Hrm595

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Negotiations in Collection Portfolio Acquisitions

Carey Thrasher

Keller University

Negotiations 595

Instructor Ernest P. Gause

December 14, 2011

Introduction-+

Negotiations in the collection industry can take many forms and one can utilize integrative bargaining, more commonly referred to as ‘win-win” bargaining or distributive bargaining also known as “win-lose” bargaining. Experienced negotiators know that there are too many situational and monetary variables for a single strategy to work in all cases and often times we need to utilize both approaches to effectively conduct negotiations. In this paper I will explain when it would be constructive for a collections professional to use each approach or a combination of approaches and in what context we would utilize the technique.

Defining Integrative and Distributive Bargaining and Their Differences

There are two common approaches to any negotiation situation: distributive and integrative. Each is useful in specific contexts, and the same negotiator may utilize either or both strategies depending upon their desired goal. The largest difference between the two styles is the circumstance in which they are used. Often when we negotiation a one-time situation or purchase we will utilize a distributive bargaining approach and try to gain the best price or outcome where “we” are the winner and those we are negotiating with are the “losers” In these situations we rarely interact with the opposing party on a regular or future basis and are seeking the best possible outcome for this specific negotiation without interest in building a long-term relationship. In contrast, an integrative bargaining situation occurs when it's possible to produce a greater outcome together than either could reach on their own. It's used when the parties have a relationship or want to establish one, and when cooperation benefits both parties. There are often multiple issues to address, and the negotiations can be complex and ongoing....