Value-focused negotiation versus integrative mindset: Reducing fixed-pie perceptions in integrative negotiations

Abstract

Companies and individuals alike are eager for guidance on how to negotiate more effectively and often look to academics to translate the current state of knowledge for their own purposes. There is limited knowledge about why some negotiators suffer from the fixed-pie assumption while others can avoid this bias. The fixed-pie assumption is a misconception in which one party assumes, without verifying, that the objectives of both parties conflict. Given the frequency and importance of business negotiations, combined with various theories that claim to contribute to improving negotiation performance, a comparison of existing theories – at best, the falsification of one or more theories – is relevant to businesses. This thesis aims to test and compare two theories, the scale for integrative mindset by Ade et al. (2020) and the value-focused thinking technique of identifying objectives by Keeney (1992), both of which claim to affect integrative negotiation performance. These theories have not yet been experimentally tested and compared to determine whether and in what combination their application generates superior outcomes in integrative business negotiations in the context of labour negotiations. To compare these theories, this research applies a deductive method of empirical testing in a laboratory experiment. To test and compare the two theories, a definition of business negotiation outcomes is first derived consisting of the Pareto efficiency of the individual economic outcome, the Pareto efficiency of the joint economic outcome, and the subjective value inventory of the counterpart. These business negotiation outcome indicators are supplemented by the integrative negotiation behaviours recommended by Weingart (1996) to form the framework of business negotiation performance. Linear regression analyses reveal no significant effect of the score of the scale for integrative mindset on negotiation performance indicators. Analyses between the independent variable of the value-focused thinking technique of identifying objectives and the dependent variables of integrative negotiation performance indicators suggest that applying the value-focused thinking technique of identifying objectives has a significant effect on the subjective value inventory of the counterpart. Considering the findings of Curhan et al. (2010) that subjective values impact objective values in subsequent negotiations, the findings of this study can be utilised to create both subjective and economic value in recurring negotiations. Additionally, this study mainly supports and extends the results of Weingart (1996). This thesis provides original insights into the scale for integrative mindset by Ade et al. (2020) and Keeney’s (1992) value-focused thinking technique of identifying objectives. As this study mainly supports Weingarts’ (1996) integrative behaviours as predictors of the Pareto efficiency of the individual economic outcome and joint economic outcome and indicates that the application of the value-focused thinking technique is a predictor of the counterpart’s subjective value inventory, this study effectively identifies a combination of methodologies to address all defined negotiation objectives. Furthermore, this thesis provides a basis for future research opportunities for redefining the scale for integrative mindset and offers suggestions for further research on the combinations of methodologies and indicators for improving negotiation performance.