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Chapter 2 Distributive Bargaining, Starting points (initial offers),…
Chapter 2
Distributive Bargaining
What makes integrative negotiation different
Focus on commonalties rather than differences
Address needs and interests, not positions
Commit to meeting the needs of all involved parties
Exchange information and ideas
Invent options for mutual gain
Use objective criteria to set standards
Why Negotiators need to know Distributive bargaining
Interdependent situations that are distributive require knowing how this works in order to do well
Need to know how to counter the effects of the strategies
Every situation has the potential to require skills at the “claiming-value” stage including integrative
Distributive bargaining situation
Target points
Resistance points (walkaway)
Alternative outcomes
Role of alternatives to a negotiated agreement
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
Fundamental Strategies
Key to the strategies
Tactical tasks of negotiators
Manage the other party’s impressions
Screen your behavior:
Say and do as little as possible
“Silence is golden when answering questions”
Direct action to alter impressions
Present facts that enhance one’s position
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
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 e.g start neg on arrival after long trip
Access the other party's target, resistance point and costs of terminating negotiations
Indirectly
Determine information opponent used to set:
Target
Resistance points
Directly
Opponent reveals the information
INFORMATION is KEY to Negotiation. 2.1
Positions Taken During Negotiations
Opening offers
Where will you start?
Exaggerated or modest?
Opening stance
What is your attitude?
Competitive? Moderate?
Initial concessions
The role of concessions
Without them, there is either capitulation or deadlock
Patterns of concession making
The pattern contains valuable information
Final offers (making a commitment)
“This is all I can do”
Making Concessions
Label your concessions
What you have given up
Emphasize the benefits to the other side
Don’t give up on your original demands too hastily
Demand and define Reciprocity
Make contingent concessions
Make concessions in installments $20 or $10x2
Commitments: Tactical Considerations
Establishing a commitment
Preventing the other party from committing prematurely
Their commitment reduces your flexibility
Way to create commitment
Increase the prominence of demands
Reinforce the threat or promise
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
Closing a Deal
Provide alternatives (2 or 3 packages)
Assume the close
Split the difference
Exploding offers
Deal sweeteners
Dealing with Typical Hardball Tactics
Ignore them
Discuss them
Respond in kind
Co-opt the other party (befriend them)
Good Cop/Bad Cop
Lowball/Highball
Bogey (playing up an issue of little importance)
The Nibble (asking for a number of small concessions too)
Chicken
Intimidation
Aggressive Behavior
Snow Job (overwhelm the other party with information)
Starting points (initial offers)
Public pronouncement
Linking with an outside base