Paul Merage School of Business

Purpose: This paper aims to offer a new theory of “inventive negotiation” as a useful alternative to the outdated thinking of the past century. Design/methodology/approach: The literature is reviewed, and a series of stories is used to bolster a new understanding. Findings: The paper is a critique of the theory of integrative bargaining, arguing that it often limits the creative processes that produce long-term relationships with customers. This paper introduces a third theory of negotiation, something the author calls inventive negotiation. Originality/value: The primary lesson of negotiation courses in American business and law schools suggests a narrow focus on reaching agreements while paying little attention to implementation and the paramount importance of maintaining ongoing commercial relationships. This paper introduces a third theory of negotiation, something the authors call inventive negotiation. It places emphasis on long-term, trusting commercial relationships as the key outcome of negotiation. The theory also posits negotiation as a creative process wherein innovations processes can play a central role. For example, both group diversity and facilitators can aid in producing creative agreements along the way toward mutually profitable business relationships.