Ch.2

Question 1

The distributive bargaining situation goals

Answer 1

• Goals of one party are usually in fundamental and direct conflict with the goals of the other party
• Resources are fixed and limited
• Maximizing one’s own share of resources is the goal

Question 2

what is a target point

Answer 2

This is your goal. Be optimistic but realistic

Question 3

Resistance point

Answer 3

A price or outcome below which you will not go

Question 4

asking price or initial offer

Answer 4

initial price set by the customer or seller

Question 5

What is the bargaining zone/ zone of potential agreement

Answer 5

the space between the two parties’resistance points

Question 6

What is a positive bargaining zone

Answer 6

When the buyer’s resistance point is above the seller’s

Question 7

What is a negative bargaining zone

Answer 7

The seller’s resistance point is above the buyer’s, and the buyer won’t pay more than the seller will minimally accept. ( so hard to reach an agreement. One party would have to change its resistance point)

Question 8

What is the role of alternatives to a negotiated agreement? (BATNA)

Answer 8

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

Question 9

If alternatives are attractive, negotiators can:

Answer 9

Set their goals higher
Make fewer concessions

Question 10

If there are no attractive alternatives

Answer 10

Negotiators have much less bargaining power

Question 11

Fundamental strategies to win a negotiation:

Push for _________ near opponent’s ________ _________
Get the other party to change their ___________ ____________by influencing their_______

Convince the other party that this settlement is the _________ ________

Answer 11

settlement, resistance point

resistance point beliefs

best possible

Question 12

Fundamental strategies to win a negotiation:

If settlement range is negative, either:
- Get the other side to change ________ __________
- Modify __________ ___________ resistance point

Answer 12

best possible
your own

Question 13

The objective of both parties is

Answer 13

to obtain as much of the bargaining zone as possible. To reach an agreement as close to the other party;s resistance point as possible

Question 14

If the other party sees that you need a settlement quickly and cannot defer it. Is this an advantage or a disadvantage for them?

Answer 14

Advantage for the other party. The other party will set a more demanding resistance point.

Question 15

The more a person needs a settlement, the more _____ they will be in setting a resistance point.

Answer 15

modest.

Question 16

If you convince the other party that they BATNA is not as good, then, they might adjust their ______ ______

Answer 16

resistance point

Question 17

What is indirect assessment (approach to Assess the Other Party’s Target, Resistance Point and Cost of Termination)

Answer 17

Determining what information an individual likely used to set target and resistance points and how they interpreted this information.

Question 18

Direct assessment (approach to Assess the Other Party’s Target, Resistance Point and Cost of Termination)

Answer 18

Sometimes, the other party will provide accurate information about their targets, resistance points and expectations.

Question 19

Manage the Other Party’s Impressions

Answer 19

• screen your behavior
• direct action to alter impressions

Question 20

Assess the Other Party’s Target,
Resistance Point and Cost of Termination, indirectly and directly

Answer 20

Indirectly:
Determine information opponent likely used to set:
- Target
- Resistance Points
Directly
Opponent reveals the information

Question 21

Screen your behavior

Answer 21

screen your behavior:
- Concealment ( say and do as little as possible to not give cues to the other party)
- Calculated incompetence: constituents do not give the negotiating agent all the necessary information, making it impossible for the agent to lead info. ( lawyers, real estate agents, etc)
- limit themselves ( ex: I will talk to my wife first)

Question 22

Direct action to alter impressions

Answer 22

• Selective presentation : negotiators reveal only facts necessary to support their case
  Present facts that enhance one’s position
• Emotional reactions (e.g. a flinch): letting a negotiation counterpart see your negative reaction increases the likelihood that you will claim more value.

Question 23

Ways to modify the other party”s perception

Answer 23

• Make outcomes appear less attractive
• Make the cost of obtaining outcomes appear higher
• Make demands and positions appear more/less attractive to the other party
• Interpret for the other party what the outcomes of his/ her proposal will really be (i.e. highlighting something that has been overlooked).
  Conceal information.

Question 24

Manipulate the Actual Costs of Delay or Termination

Answer 24

Negotiators have deadlines. there is that time pressure:

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 ( ex: business people going overseas to negotiate)

Question 25

What are some tactical tasks

Answer 25

- Assess the other party’s target, resistance point, and cost of terminating negotiations - Manage the other party’s impression of the negotiator’s target, resistance point, and cost of terminating negotiation - Modify the other party’s perception of his/her own target, resistance point, and cost of terminating negotiation - Manipulate the actual costs of delay or termination

Question 26

Positions taken during negotiations

Answer 26

At the beginning, each party takes a position, then the other party will typically change their position in response to info from the other party - opening offers - phantom anchors -opening stance - initial concessions

Question 27

An opening offer is ___ to the negotiator bc

Answer 27

Advantageous to the negotiator making the offer because they can anchor the negotiation An ambitious opening offer gives the negotiator room for movement and time to learn about the other’s priorities.

Question 28

Phantom offers

Answer 28

Provide economic benefits by reducing the magnitude of the counteroffers made by the opposing side Ex: I was going to offer to pay 20 500 but instead I can offer 21 000. More value claimed by the party making the initial offer People who use this technique are also perceived as more manipulative, which may impact reputation and relationships

Question 29

Opening stance

Answer 29

What is your attitude to adopt during the negotiation? Competitive? Moderate?

Question 30

Initial concessions

Answer 30

An opening offer is usually met with a counteroffer; these two offers define the initial bargaining range Symbolic message to the other party about how you will proceed

Question 31

What is the role of concessions

Answer 31

Without them, there is either capitulation or deadlock. Good distributive bargainers will not begin the negotiation with an opening offer too close to their own resistance point. They will make sure to have enough bargaining range to make some concessions.

Question 32

Final offer

Answer 32

This is all I can do” Convey the message that there is no further room for movement. The final offers has to be large enough to be dramatic yet not so large that it creates the suspicion that the negotiator has been holding back.

Question 33

Tactics for Closing the Deal

Answer 33

- Provide alternatives (2 or 3 packages): packages that are more or less equivalent in value. - Assume the close - Split the difference: split the difference between the two offers. - Exploding offers (extremely tight deadline): convince the other party to accept the settlement and to stop considering alternatives. - Deal sweeteners (save a special concession for the close)

Question 34

_______ tactics are not recommended to use.

Answer 34

Hardball tactics

Question 35

How to respond to hardball tactics

Answer 35

Ignore them Discuss/label them Respond in kind Co-opt the other party (befriend them before they use it on you)

Question 36

\What are some typical hardball tactics(7)

Answer 36

- Good Cop/ Bad Cop - Lowball/Highball - Bogey - The Nibble - Intimidation - Aggressive Behaviour - Snow Job (overwhelm the other party with information)

Question 37

The nibble explain

Answer 37

a small concession sought close to the end of the deal( ex: a free tie with the suit). This amount is to small to loose the deal over, but large enough to upset the other party

Question 38

The bogey, explain

Answer 38

(playing up an issue of little importance. Later in the negotiation, the issue can be traded for issues that are actually important

Question 39

Lowball/Highball

Answer 39

( starting with a ridiculously low or high opening offer)