Integrative vs. Distributive 1

Integrative Bargaining Versus Distributive Bargaining

In Labor Union and Management Negotiations

Tanya Burnside, Janie Magras & William Thomas

Abstract

Integrative and Distributive bargaining are terms used to describe negotiation strategies in

collective bargaining. Distributive bargaining is based on fixed or opposing viewpoints and

usually results in compromise or no decision at all. Integrative bargaining, on the other hand,

usually results in a win-win situation for both parties. In reviewing the 2003 survey by the

Quebec Ministry of Labor, the 1997 Teamsters Union versus UPS negotiations, and the coalition

of Kaiser Unions versus Kaiser Permanente, we will compare the effects of integrative and

distributive bargaining on their respective contracts. We will also present information on

management and union negotiator preferences.

Integrative vs. Distributive 2

We studied the effects of integrative bargaining and distributive bargaining from both the

labor union and management perspectives. Distributive bargaining is the traditional form of

bargaining that has been used since the emergence of collective bargaining. In distributive

bargaining, parties are focused on what they want out of the agreement, having little concern for

the impact on the other party.

Integrative bargaining is focused on the interest of all parties involved. According to

Boniface and Rashmi (2012) this is a relatively new concept that surfaced in the early 1990s. In

integrative bargaining both parties negotiate in good faith, understanding that each side should

gain from the negotiations. This approach is beneficial to both sides and serves to bridge the gap

between management and labor after the negotiations are over.

Review: General studies on mutual gains: Integrative vs. Distributive Bargaining.

Paquet et al. (2000) compared 38 signed contracts. Half of the contracts were negotiated

using distributive bargaining techniques. The remaining nineteen were negotiated using

integrative bargaining. Paquet et al. measured the frequency of change in areas of pay,

recognition, work hours and several other categories. In contracts where integrative bargaining

was used, there were mutual gains in the areas of grievance and disciplinary. There were no

mutual gains in the contracts negotiated using distributive bargaining.

In 2003, Quebec’s Ministry of Labor surveyed 45 negotiators, 25 management

representatives and 20 labor union representatives, which had used integrative bargaining. The

45 people surveyed were involved in negotiating 32 collective bargaining agreements in 2003.

The report concluded that of the 45 people surveyed, 42 felt that integrative bargaining resulted

in long-term sustainable gains for both the union and management (Worklife Report, 2003).

Integrative vs. Distributive 3

Quebec’s Ministry of Labor also determined representatives from each side found it

easier to negotiate on specific items of importance using interactive bargaining. Union

representatives, found it easier to negotiate on personnel change issues. Management

representatives, found it easier to negotiate work hours and overtime issues. The report found

that organizational change, an issue important to both sides, was easier to negotiate as well.

Review: 1997 Teamsters Strike against UPS.

In 1997, the Teamsters Union Strike against United Parcel Service (UPS) proved to be

crippling for the nation. After a nine month negotiation and a three day extension the teamsters

went on strike. The strike, which lasted fifteen days, impacted more than just UPS. It also

affected the cash flow of many of the businesses they serviced.

The purpose of the article written by Reiskin (2007) was to explain how integrative

bargaining is used to successfully reach agreements when two parties have shared interests. On

the other hand, greater conflicts require distributive bargaining to reach agreements. When there

are stronger conflicts within the organization, integrative bargaining is not a conducive approach.

Integrative bargaining requires a trust factor between parties.

Teamsters President James Hoffa said the union had “negotiated an agreement that will

greatly benefit our members at UPS, as well as Teamster members in other industries covered by

pension and health and welfare funds that will receive the contribution increases” (Reiskin,

2007). UPS considered abandoning the well-established, but nearly depleted, Central States

Pension fund. Issues covered in negotiations included UPS replenishing the pension fund to

allow employees long term benefits. The union refused to allow UPS to abandon the pension

plan and insisted the company work to fund the depleting pension plan. As part of negotiations,

Integrative vs. Distributive 4

UPS decided to pay $6.1 billion to Central States Pension fund and be given the right by the

union to abandon future funding of the existing pension plans.

A determining factor that helped expedite the progress of the Teamster Union strike was

the reduction in UPS credit rating by Standard and Poors (S&P). UPS also realized it did not

know how the company would pay for the buyout after being placed on “CreditWatch with

negative implications.” Previously, S&P had said UPS was one of only six industrial

corporations nationwide with an “AAA” rating, the highest given (Reiskin, 2007). UPS took a

distributive stance, during the negotiations, with a result of losing their AAA credit rating in

order to resolve the strike. Despite this it was a win-win for the company and the union. A UPS

representative went on record stating that taking on debt for the right reason is the right thing to

do (Reiskin, J. S. 2007). The representative also stated the $6.1 billion buyout ensures the safety

of the pensions for their 44,000 employees. UPS further acknowledged that if the buyout did not

happen, another cut in pension benefits would occur.

Review: 2005 contract negotiations between the Coalition of Kaiser Permanente Unions

and Kaiser Permanente.

The case study focuses on the 2005 national contract negotiations between Kaiser

Permanente (KP) comprised of Kaiser Health Plan and Permanente Medical Groups, and the

Coalition of Kaiser Permanente Unions (CKPU) comprised of 10 diverse unions representing 44

bargaining units with 86 thousand union members. The 2005 contract negotiations were deemed

successful and represent integrative bargaining and distributive bargaining. Figure 1 details the

issues and concerns both parties negotiated.

Integrative vs. Distributive 5

FIGURE 1. Key Partnership Issues and Concerns Carried into Negotiations(McKersie, Sharpe, Kochan, Eaton, Strauss, & Morgenstern, 2008)

The process of negation in this case involved two bargaining phases. Phase I: Bargaining

Task Groups (BTG) at Work, BTG committee which included Common Issues Committee (CIC)

members had the task of submitting recommendations for the agreement to the CIC. The CIC

served to strengthen Phase II of the negotiations. Part of the BTG’s process involved training on

integrative bargaining negotiations. In seven out of the eight BTG’s integrative bargaining was

used more than distributive bargaining. Mutual and conflicting interests included performance

improvement, attendance, and benefits. Each interest was handled by a different BTG

committee. Phase II: CIC Negotiations, designated the CIC with completing contract

negotiations. This involved BTG recommendations. The labor unions gains included reduced

differentials for like positions across the board, sustained health pension benefits, and

Integrative vs. Distributive 6

performance sharing, training, trusts, and monetary issues. Management gains included stable

pay for performance, revamped attendance program, established agreement with union for flex

benefits program, continued local and regional based wages, prevention of increases to the

benefit pension program, and investing more money in positions the organization needed to fill.

Negotiators effectively used distributive bargaining when conflicts between parties were

apparent and used integrative bargaining when mutual interest existed. It is important to note

that trusting relationships had already been formed between both parties as a result of the Labor

Management Partnership (LMP), allowing more mutual consideration during negotiations. As

long as a high level of trust existed distributive bargaining could be limited. As with any

organizational conflict, tensions posed a threat to solutions. Those tensions had to be effectively

handled before either negotiation process could be used. Issues causing the most tension

requiring distributive bargaining were wage and benefits. Another major issue was the potential

dissolution of the AFL-CIO, which involved several member unions that comprised the Kaiser

Coalition. The result of an AFL-CIO split would create a new federation and leave remaining

member unions with a fraction of what AFL-CIO represented. Issues like absenteeism and sick

leave policies were effectively addressed using integrative bargaining. Negotiation research

suggests that distributive bargaining stances are used by both parties during negotiations (White

et al. 1994; Kristensen and Garling 1997). The use of either bargaining stance in this case is

most clearly determined by whether the issue is integrative or distributive.

The case study authors concluded that integrative bargaining negotiations “served as a

way of applying or operationalizing integrative bargaining and affected the process dynamics in

ways the Walton and McKersie theory predicted”. The Walton and McKersie Behavioral Theory

of Labor Negotiations suggest concepts of ‘mixed-motive nature of bargaining’ and the ‘contract

Integrative vs. Distributive 7

zone’. Walton and McKersie suggest that mixed motive and trust developed relationships move

negotiations past distributive bargaining. Walton and McKersie also add that poor

communication during distributive bargaining may lead to positive contract zone strikes

(Kochan, 1992).

Distributive bargaining, integrative bargaining, attitudinal structuring, and intra-

organizational bargaining are the four sub processes represented in labor negotiations.

According to Walton and McKersie (1992) distributive bargaining is defined as “a zero sum or

‘win-lose’ payoff structure”, in which limited resources are distributed. Integrative bargaining is

the opposite consisting of a variable payoff or ‘win-win’ structure in which the parties have

opportunities to mutually meet each other’s needs. Attitudinal structuring seeks to change

attitudes of either party to attain maximum benefits for both parties. Intra-organizational

bargaining focuses on the activities of each party including interaction (Walton & McKersie,

1992).

Distributive bargaining in this case dominated when economic and attendance issues

were negotiated. Conflicting issues promoted emotional negativity that fostered distributive

bargaining, but forced parties to work through emotions and continue the process. Integrative

bargaining was more prevalent in the use of BTG’s who’s integrative bargaining techniques were

used by members that had already established trust, respect and the ability to communicate

effectively for negotiations. Intra-organizational bargaining reflected in deadline pressures,

conflicting positions of management and unions, and communication using integrative

bargaining. Attitudinal structuring reflected in the trust members developed and their ability to

effectively handle emotions.

Integrative vs. Distributive 8

Review: Survey of Management and Labor opinions on the value of Integrative

Bargaining.

A study completed at the University of Massachusetts Center for Survey Research

(Cutcher-Gershenfeld, Kochan & Wells, 2001) used information from a National Performance

Review Customer Survey commissioned by the Federal Mediation and Conciliation Service

(FMCS) to contact union and management negotiators and question them on the value of

Integrative Bargaining. The FMCS provided data on 1050 contracts with expiration dates

between April I, 1993 and April 1, 1996. The FMCS received 777 union negotiator responses

and 780 management responses to the survey.

For the purposes of their article Cutcher-Gershenfeld, Kochan & Wells focused their

evaluation on matched pairs of lead negotiators for both union and management on each side of a

contract negotiation. A total of 586 pairs were surveyed on whether they preferred to use

integrative or distributive bargaining in contract negotiations. By selecting pairs they ensured a

true comparison between management and union perceptions on the same contract negotiation.

The 586 pairs closely match the distribution of unionized companies in the country

though there were some slight variations. Figure 2 below, shows percentage of industries

represented in the survey versus percent of unionized companies, for that industry in the national

population. While the survey sample does reflect the population of bargaining units on file with

the FMCS, manufacturing and healthcare are somewhat over-represented. Conversely retail,

wholesale and service are slightly under-represented as are all other remaining industries. The

key limitation of the survey was noted as “a cross-sectional snapshot of collective-bargaining

practices”.

Integrative vs. Distributive 9

Figure 2. Comparison of Survey Sample to National Population(Cutcher-Gershenfeld, Kochan & Wells, 2001)

The survey drew a conclusion from the negotiators that had experience with Integrative

Bargaining on whether they preferred it or the distributive bargaining method. Of the managers

surveyed, 79.8 percent preferred Integrative bargaining versus only 59.6 percent of union

leaders. The assumption was made that these percentages were the result of experiences to date.

Translating this to the overall sample of 1050 contract negotiations, the survey team concluded

that 26.2 percent of management negotiators and 24.8 of union negotiators prefer the use of

Integrative bargaining in negotiating contracts. According to this study, management negotiators

tend to see the value of Integrative Bargaining more than union negotiators. But, there are still

many strong supporters of Integrative Bargaining in the union ranks as well.

Review: A union representative’s view of interest-based bargaining.

The article A Special Comment from a Conflict Management Practitioner: A call for

research on collaboration versus traditional bargaining in labor-management relationships

Integrative vs. Distributive 10

(Roose, 2006) was written by Paul Roose who worked for the California State Mediation and

Conciliation Service (CSMCS) in 2006. Roose offers some firsthand knowledge on the value of

collaborative negotiations over the traditional adversarial negotiations. His knowledge comes

from experience as a Shop Steward in the Letter Carriers Union while working for the US Postal

Service (USPS).

Roose explained how USPS supervisors were pressured by their leadership team to drive

higher productivity. When the letter carriers failed to increase their productivity the supervisors

would issue performance consultations. The write-ups would only serve to upset the letter

carriers causing them to work “to rule and not one step faster”. This caused supervisors to create

work-arounds which generated grievances from the union at the rate of approximately 1500

grievances per year from only 3000 union members.

This continuous cycle of pitting-unhappy-grievance-filing letter carriers against stressed

out USPS supervisors placed a tremendous and unnecessary financial burden on both sides. The

amount of time spent resolving grievances was very costly prompting USPS managers and the

union leaders to work together toward something they called Employee Involvement (EI). EI was

a concerted effort to change behavior in the organization on a daily basis. Union representatives

and USPS leaders would meet regularly, at all levels, to discuss and resolve problems. The new

concept being used on a daily basis helped Roose understand that if he worked with the company

to achieve their objectives during contract negotiations, then the company would be more likely

to help him accomplish his member’s objectives.

Conclusion

Integrative vs. Distributive 11

Based on the studies of union and management perspectives we feel that integrative

bargaining is the best bargaining stance to use when both parties have mutual interest.  We

acknowledge the need for a distributive bargaining stance when conflicting interests exist. Often

contract negotiations should, and do, include both.  

In our research, we found that management negotiators preferred integrative bargaining

more often than union negotiators. However, it would be interesting to further study matched

pairs that do not agree integrative bargaining is preferable. The question for this study would be

how much does the outcome of negotiations impact negotiator opinions of usefulness of one

approach over the other.

Discussion: we agree that labor negotiations should include a mix of integrative and

distributive bargaining to reach the best possible agreement. What are your thoughts on this? 

Integrative vs. Distributive 12

References

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International Journal of Business and Social Science, 3 (9), 40-48

Cutcher-Gershenfeld, J., Kochan, T., & Wells, J.C. (2001). In Whose Interest? A First Look at

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Kochan, T. (1992, May). Walton and McKersie’s behavioral theory of labor negotiations: An

industrial relations perspective. Journal of Organizational Behavior, 3, 289-295.

Kristensen, H & Garling, R. (1997). Determinants of buyers’ aspiration and reservation price.

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McKersie, R. B., Sharpe, T., Kochan, T. A., Eaton, A. E., Strauss, G., & Morgenstern, M.

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