Negotiations 6e mcgraw hill chapter 2

The Distributive Bargaining Situation • Goals of one party are in fundamental, direct conflict to another party • Resources are fixed and limited • Maximizing one’s own share of resources is the goal for both parties 2-1 The Distributive Bargaining Situation Preparation—set a • Target point, aspiration point – where the negotiator wants the negotiations to end • Walkaway, resistance point – The point the negotiator will not accept • Asking price, initial offer – first price mentioned 2-2 Distributive Bargaining • When involving yourself in distributive bargaining, it create a situation where you refuse to see the commonalities and ignore the other parties needs and wants Distributive Bargaining • What is the bargaining range? • In distributive bargaining, why does the negotiator want to obtain as much of the bargaining range as possible? • Why does a distributive negotiator leave room for concessions? Concessions • What are concessions? • Why is concessions considered a type of courtesy to the other party? • When concessions get smaller, what is this an indication of? The Role of Alternatives to a Negotiated Agreement • Alternatives give the negotiator power to walk away from the negotiation – If alternatives are attractive, negotiators can: • Set their goals higher • Make fewer concessions – If there are no attractive alternatives: • Negotiators have much less bargaining power 2-6 Fundamental Strategies • Push for settlement near opponent’s resistance point • Get the other party to change their resistance point • If settlement range is negative, either: – Get the other side to change their resistance point – Modify your own resistance point • Convince the other party that the settlement is the best possible 2-7 Keys to the Strategies The keys to implementing any of the four strategies are: • Discovering the other party’s resistance point • Influencing the other party’s resistance point 2-8 Four Propositions That Suggest How the Keys Affect the Process The higher the other party’s estimate of your cost of delay or impasse, the stronger the other party’s resistance point will be The higher the other party’s estimate of his or her own cost of delay or impasse, the weaker the other party’s resistance point will be 2-9 Four Propositions That Suggest How the Keys Affect the Process The less the other party values an issue, the lower their resistance point will be The more the other party believes that you value an issue, the lower their resistance point may be 2-10 Modify the Other Party’s Perceptions • Make outcomes appear less attractive • Make the cost of obtaining goals appear higher • Make demands and positions appear more or less attractive to the other party – whichever suits your needs 2-11 Manipulate the Actual Costs of Delay or Termination • Plan disruptive action – Raise the costs of delay to the other party • Form an alliance with outsiders – Involve (or threaten to involve) other parties who can influence the outcome in your favor • Schedule manipulations – One party is usually more vulnerable to delaying than the other 2-12 Ways to Create a Commitment • • • • Public pronouncement Linking with an outside base Increase the prominence of demands Reinforce the threat or promise 2-13 Commitments: Tactical Considerations • Ways to abandon a committed position – – – – Plan a way out Let it die silently Restate the commitment in more general terms Minimize the damage to the relationship if the other backs off 2-14 Closing the Deal • • • • • Provide alternatives (2 or packages) Assume the close Split the difference Exploding offers Deal sweeteners 2-15 Dealing with Typical Hardball Tactics • Four main options: – Ignore them – Discuss them – Respond in kind – Co-opt the other party (befriend them) 2-16 Typical Hardball Tactics • Good Cop/Bad Cop • Lowball/Highball • Bogey (playing up an issue of little importance) • The Nibble (asking for a number of small concessions to) 2-17 Typical Hardball Tactics • • • • Chicken Intimidation Aggressive Behavior Snow Job (overwhelm the other party with information) 2-18 Summary Negotiators need to: • Set a clear target and resistance points • Understand and work to improve their BATNA • Start with good opening offer • Make appropriate concessions • Manage the commitment process 2-19 [...]... threat or promise 2- 13 Commitments: Tactical Considerations • Ways to abandon a committed position – – – – Plan a way out Let it die silently Restate the commitment in more general terms Minimize the damage to the relationship if the other backs off 2- 14 Closing the Deal • • • • • Provide alternatives (2 or 3 packages) Assume the close Split the difference Exploding offers Deal sweeteners 2- 15 Dealing with... whichever suits your needs 2- 11 Manipulate the Actual Costs of Delay or Termination • Plan disruptive action – Raise the costs of delay to the other party • Form an alliance with outsiders – Involve (or threaten to involve) other parties who can influence the outcome in your favor • Schedule manipulations – One party is usually more vulnerable to delaying than the other 2- 12 Ways to Create a Commitment... kind – Co-opt the other party (befriend them) 2- 16 Typical Hardball Tactics • Good Cop/Bad Cop • Lowball/Highball • Bogey (playing up an issue of little importance) • The Nibble (asking for a number of small concessions to) 2- 17 Typical Hardball Tactics • • • • Chicken Intimidation Aggressive Behavior Snow Job (overwhelm the other party with information) 2- 18 Summary Negotiators need to: • Set a clear... Negotiators need to: • Set a clear target and resistance points • Understand and work to improve their BATNA • Start with good opening offer • Make appropriate concessions • Manage the commitment process 2- 19 ... negotiator wants the negotiations to end • Walkaway, resistance point – The point the negotiator will not accept • Asking price, initial offer – first price mentioned 2- 2 Distributive Bargaining... delaying than the other 2- 12 Ways to Create a Commitment • • • • Public pronouncement Linking with an outside base Increase the prominence of demands Reinforce the threat or promise 2- 13 Commitments:... relationship if the other backs off 2- 14 Closing the Deal • • • • • Provide alternatives (2 or packages) Assume the close Split the difference Exploding offers Deal sweeteners 2- 15 Dealing with Typical