Flashcards
The Distributive Bargaining Situation
Cards in this deck (62)
- 1Definition of Distributive bargaining-Competitive, Win-Lose
-Goals of one party are in fundamental and direct conflict with goals of other party
-Resources are fixed and limited
-Each party wants to maximize his/her share of the resources - 2Distributive bargaining: Each party will use strategies and tactics that maximize outcomes obtained True/FalseTrue
- 3Most strategies guard information True/FalseTrue
- 4What are 2 rules regarding guard information1. Give information only when it provides a strategic advantage
2. Attempt to obtain information from other party - 5“Winning” in distributive bargaining in large part depends on strategies and tactics used True/FalseTrue
- 6Distributive bargaining typically has a negative, macho, offensive connotation True/FalseTrue
- 7Why study Distributive Bargaining ?3 reasons1. Some interdependent situations are distributive in nature
2. Many people use distributive bargaining almost exclusively
3. Avoid counterproductive strategies or tactics - 8Distributive Bargaining (2) Key analysis points1. Target point
2. Resistance point - 9What does ZOPA stand for?Bargaining range, settlement range, zone of potential agreement
- 10What are the (2) ZOPA?Positive bargaining range
Negative bargaining range - 11Prescriptively: you should make a deal if ZOPA is positive? True/FalseTrue
- 12Behaviorally: People often fail to reach agreement when the ZOPA is positive? True/FalseTrue
- 13Sometimes, people reach agreement when the ZOPA is negative? True/FalseTrue
- 14Alternatives give the negotiator power to ??? from the negotiationwalk away
- 15Typically, negotiators TARGET points do NOT overlap. However, it is often the case that their RESERVATION points DO. True/FalseTrue
- 16If alternatives are attractive negotiators can:Set their goals higher
Make fewer concessions - 17If there are no attractive alternativesNegotiators have much less bargaining power
- 18Primary objective in distributive bargaining is tomaximize the value of the single deal…
- 19What are some key steps that can be taken to help maximizing the value of a deal?Push for settlement near opponents resistance point
Get the other party to reduce their resistance point
-If bargaining range is negative either:
-Get the other side to reduce their resistance point
-Modify your own resistance point
-Be sure that other party feels they got the best possible deal (i.e., ego satisfaction) - 20(10) Pie slicing strategies1.Know your BATNA and Resistance point
2. Research the other party’s BATNA
3. Set high aspirations (target points)
4. Make the first offer if you can
5. Counteroffer immediately
6.Avoid stating ranges
7. Make bilateral (not unilateral) concessions
8. Use an objective-appearing rationale to support your offers
9. Manage other parties’ perceptions
10. Do not fall for the “even split” ploy (i.e., split the difference)
Counteroffer immediately - 21What are the 9 Typical Hardball TechniquesGood guy/Bad guy
Highball/Lowball
Bogey (playing up an issue of little importance)
The Nibble (asking for a number of small concessions to get to agreement)
Chicken
Intimidation / Aggressive behavior
Snow Job (overwhelm the other party with information)
Assume the close
Exploding offers - 22Dealing with Hardball Tactics: Four main optionsIgnore them
Discuss them – negotiate the negotiation process
Respond in kind (i.e., do the same thing to them)
Co-opt (i.e., befriend) the other party - 23Expanding the Pie: Strategies That Do Not Work-Commitment to reaching a win-win deal
Compromise
-Focusing on a long-term relationship
-Adopting a “cooperative orientation”
-Taking extra time to negotiate - 24Key CLUE to Integrative PossibilitiesMore than one issue is on the table…
- 25Fundamental assumption for integrative negotiation:It is possible for both sides to achieve their objectives.
- 26Important processes in integrative bargaining-Create a free flow of information
-Attempt to understand the other negotiator’s real needs and objectives
-Emphasize the commonalities between the parties and minimize the differences
-Search for solutions that meet the goals and objectives of both sides - 27Key Steps in the Integrative Negotiation Process-Identify and define the issue
-Understand the issue fully
-Identify interests and needs on both sides
-Generate alternative solutions
-Evaluate and select among alternatives - 28Key Steps in the Integrative Negotiation Process Identify and define the issue1.Define the issue in a way that is mutually acceptable to both sides
-Not worded to lay blame or favor one side or the other…
2. Keep the issue statement clean and simple
-Be as specific as possible, but not to specific…
3. Depersonalize the problem
-Separate the issues from the parties and relationships involved in the negotiation - 29Key Steps in the Integrative Negotiation Process Understand the issue fully (identify interests and needs)-Interests: The underlying concerns, needs, desires, or fears that motivate a negotiator
-Types of interests
Substantive interests
Process interests
Relationship interests
Interests in principles
-MUST attempt to understand other’s interests w/o criticism….ask clarifying questions – which interests are mutual?
---Focus on INTERESTS not positions (Job offer example….)
-Notes on interests
There may be more than one & interests can change - 30Key Steps in the Integrative Negotiation Process Generate alternative solutions (creative phase)-Brainstorming
-Expand the pie
-Logroll
-Use nonspecific compensation
-Cut the costs for compliance
Find a bridge solution - 31Logroll – Are there any issues of high priority to me that are of low priority to the other, and vice versa? Use nonspecific compensation – one negotiator receives what he or she wants, and the other is compensated (or paid) by some method that was initially outside the bounds of the negotiation Cut the costs for compliance—What can I do to minimize the other’s risk and costs so that he or she would be more willing to agree? Find a bridge solution – Can we invent a solution that meets the relative priorities, underlying interests, and needs of both parties?Logroll – Are there any issues of high priority to me that are of low priority to the other, and vice versa?
Use nonspecific compensation – one negotiator receives what he or she wants, and the other is compensated (or paid) by some method that was initially outside the bounds of the negotiation
Cut the costs for compliance—What can I do to minimize the other’s risk and costs so that he or she would be more willing to agree?
Find a bridge solution – Can we invent a solution that meets the relative priorities, underlying interests, and needs of both parties? - 32Logroll – question?Are there any issues of high priority to me that are of low priority to the other, and vice versa?
- 33Use nonspecific compensation – question?Use nonspecific compensation – one negotiator receives what he or she wants, and the other is compensated (or paid) by some method that was initially outside the bounds of the negotiation
willing to agree? - 34Cut the costs for compliance—question?What can I do to minimize the other’s risk and costs so that he or she would be more willing to agree?
- 35Find a bridge solution - question?Can we invent a solution that meets the relative priorities, underlying interests, and needs of both parties?
- 36Evaluate and select alternatives1. Narrow the range of solutions
2. Evaluate solutions based on quality, acceptability, and objective standards/criteria
Agree to the criteria in advance of evaluating options
Be willing to justify personal preferences
3. Be alert to the influence of intangibles in selecting options
4. Use subgroups to evaluate complex options
5. May be done before negotiation as well
6. Take time out to cool off
7. Keep decisions tentative until all aspects of the final proposal are complete
8. Minimize formality and record keeping until final agreements are closed - 37Factors That Facilitate Successful Integrative Negotiation (Expand the Pie)1. Build Trust & Share Information
2. Clear and accurate communication
3. Make package deals, not single-issue offers
4. If all else fails…..make multiple offers simultaneously - 38Factors That Facilitate Successful Integrative Negotiation (Expand the Pie) Build Trust & Share Information-Need to be open and cooperative about interests, preferences and priorities (not BATNA) across negotiation issues
-It’s not whether to reveal information, but what information… - 39Factors That Facilitate Successful Integrative Negotiation (Expand the Pie) Clear and accurate communicationAsk diagnostic questions
NOTE: Only 7% of untrained negotiators seek information about the other party’s preferences, etc. - 40Why Integrative Negotiation Is Difficult to Achieve1. The history of the relationship between the parties
-If contentious in past, it is difficult not to look at negotiations as win-lose
2. A belief that an issue can only be resolved distributively
-Negotiators are biased to avoid behaviors necessary for integrative negotiation
3. The mixed-motive nature of most negotiating situations
-Purely integrative or purely distributive situations are rare
-The conflict over the distributive issues tends to drive out cooperation, trust needed for finding integrative solutions - 41Key Steps in the Integrative Negotiation Process Evaluate and select alternativesNarrow the range of solutions
Evaluate solutions based on quality, acceptability, and objective standards/criteria
Agree to the criteria in advance of evaluating options
Be willing to justify personal preferences
Be alert to the influence of intangibles in selecting options
Use subgroups to evaluate complex options
May be done before negotiation as well
Take time out to cool off
Keep decisions tentative until all aspects of the final proposal are complete
Minimize formality and record keeping until final agreements are closed - 42Pie slicing strategies Know your BATNA and Resistance pointBe able to clearly articulate your BATNA before entering a negotiation
Expend time and effort to improve your BATNA before entering into a negotiation
Alternatives give the negotiator power to walk away from the negotiation
Do not reveal your BATNA in the negotiation
Do not lie about your BATNA
Do not reveal your resistance point - 43Pie slicing strategies Research the other party’s BATNA1. Public information (press, trade associations)
2. Private information (colleagues, other competitors) - 44Pie slicing strategies Set high aspirations (target points)-Avoid winner’s curse
-Avoid boulwareism
-Don’t confuse resistance point with your target or opening offer - 45Pie slicing strategies Make the first offer if you can-Sets the anchor point (Correlate .85 with final outcomes)
-Once you make an offer—BE PATIENT - 46Pie slicing strategies Counteroffer immediately-Diminishes anchor effect of first offer
-Signals a willingness to negotiate - 47Pie slicing strategies Avoid stating ranges-Counterpart will consider the “extreme” end of the range as your target
-If a range is requested, return with several offers that would be equally satisfying for you - 48Pie slicing strategies Make bilateral (not unilateral) concessions-Pattern of concessions
-Degree of concessions - 49Pie slicing strategies Manage other parties’ perceptionsScreen: Say very little…Use silence
Emotional reactions – the “flinch” - 50Pie slicing strategies Do not fall for the “even split” ploy (i.e., split the difference)Anchors are typically arbitrary numbers
Often total concessions are not equal - 51Typical Hardball TechniquesGood guy/Bad guy
Highball/Lowball
Bogey (playing up an issue of little importance)
The Nibble (asking for a number of small concessions to get to agreement)
Chicken
Intimidation / Aggressive behavior
Snow Job (overwhelm the other party with information)
Assume the close
Exploding offers - 52Dealing with Hardball Tactics Four main options:Ignore them
Discuss them – negotiate the negotiation process
Respond in kind (i.e., do the same thing to them)
Co-opt (i.e., befriend) the other party - 53Integrative Negotiation Expanding the Pie: Strategies That Do Not WorkCommitment to reaching a win-win deal
Compromise
Focusing on a long-term relationship
Adopting a “cooperative orientation”
Taking extra time to negotiate - 54Key CLUE to Integrative PossibilitiesMore than one issue is on the table…
- 55Strategy & Tactics of Integrative Negotiation-Fundamental assumption for integrative negotiation: It is possible for both sides to achieve their objectives.
-Important processes in integrative bargaining
-Create a free flow of information
-Attempt to understand the other negotiator’s real needs and objectives
-Emphasize the commonalities between the parties and minimize the differences
-Search for solutions that meet the goals and objectives of both sides - 56Key Steps in the Integrative Negotiation Process-Identify and define the issue
-Understand the issue fully
-Identify interests and needs on both sides
-Generate alternative solutions
-Evaluate and select among alternatives - 57Key Steps in the Integrative Negotiation Process 1. Identify and define the issueDefine the issue in a way that is mutually acceptable to both sides
Not worded to lay blame or favor one side or the other…
Keep the issue statement clean and simple
Be as specific as possible, but not to specific…
Depersonalize the problem
Separate the issues from the parties and relationships involved in the negotiation - 58Key Steps in the Integrative Negotiation Process 2. Understand the issue fully (identifyinterests and needs)
Interests: The underlying concerns, needs, desires, or fears that motivate a negotiator
Types of interests
Substantive interests
Process interests
Relationship interests
Interests in principles
MUST attempt to understand other’s interests w/o criticism….ask clarifying questions – which interests are mutual?
Focus on INTERESTS not positions (Job offer example….)
Notes on interests
There may be more than one & interests can change - 59Key Steps in the Integrative Negotiation Process 3. Generate alternative solutions (creative phase)Brainstorming
Expand the pie – How can resources be expanded to meet the demands of both sides?
Logroll – Are there any issues of high priority to me that are of low priority to the other, and vice versa?
Use nonspecific compensation – one negotiator receives what he or she wants, and the other is compensated (or paid) by some method that was initially outside the bounds of the negotiation
Cut the costs for compliance—What can I do to minimize the other’s risk and costs so that he or she would be more willing to agree?
Find a bridge solution – Can we invent a solution that meets the relative priorities, underlying interests, and needs of both parties? - 60Key Steps in the Integrative Negotiation Process 4. Evaluate and select alternativesNarrow the range of solutions
Evaluate solutions based on quality, acceptability, and objective standards/criteria
Agree to the criteria in advance of evaluating options
Be willing to justify personal preferences
Be alert to the influence of intangibles in selecting options
Use subgroups to evaluate complex options
May be done before negotiation as well
Take time out to cool off
Keep decisions tentative until all aspects of the final proposal are complete
Minimize formality and record keeping until final agreements are closed - 61Factors That Facilitate Successful Integrative Negotiation (Expand the Pie)-Build Trust & Share Information
Need to be open and cooperative about interests, preferences and priorities (not BATNA) across negotiation issues
It’s not whether to reveal information, but what information…
-Clear and accurate communication
Ask diagnostic questions
NOTE: Only 7% of untrained negotiators seek information about the other party’s preferences, etc.
-Make package deals, not single-issue offers
-If all else fails…..make multiple offers simultaneously - 62Why Integrative Negotiation Is Difficult to AchieveThe history of the relationship between the parties
If contentious in past, it is difficult not to look at negotiations as win-lose
A belief that an issue can only be resolved distributively
Negotiators are biased to avoid behaviors necessary for integrative negotiation
The mixed-motive nature of most negotiating situations
Purely integrative or purely distributive situations are rare
The conflict over the distributive issues tends to drive out cooperation, trust needed for finding integrative solutions
Information
- Description
- Flashcards on The Distributive Bargaining Situation, created by Roxann Daniello on 10/07/2018.
- Created by
- Roxann Daniello · Jul 2018
- Updated
- Jul 28, 2018
- Views
- 14
- Rating