Negotiation Versatility Part 1- Strategy and Tactics
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Transcript Negotiation Versatility Part 1- Strategy and Tactics
Negotiation Versatility Parts 1-
Strategy and Tactics of Distributive
Negotiation
Negotiation & Conflict Management
PowerPoint 2
John D. Blair, PhD
Georgie G. & William B. Snyder Professor in Management
The Distributive Negotiation
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
Preparation—set a
Target point (aspiration point)
Resistance point (walkaway point)
Asking price (initial offer)
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The Distributive Bargaining
Situation—Walk Away etc.
Party A - Seller
Walkaway Point
Target Point
Asking Price
Potential Area of Negotiation
Most Likely
Area of
Negotiation
Initial Offer
Target Point
Walkaway Point
Party B - Buyer
3
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
4
The Asymmetrical Distributive
Bargaining Situation—
Only One Party Has Very Good BATNA
Party A - Seller
Walkaway Point
Target Point
Asking Price
Potential Area of Negotiation Alternative
Most Likely
Area of
Negotiation
Alternative
Initial Offer
Target Point
Walkaway Point
Party B - Buyer
5
The Distributive Bargaining
Situation—Both Have Weak BATNAs
Party A - Seller
Walkaway Point
Target Point
Potential Area of Negotiation
Most Likely
Area of
Negotiation
Asking Price
Weak Alternative
Zone of
Potential
Agreement
Weak Alternative
Initial Offer
Target Point
Walkaway Point
Party B - Buyer
6
QUANTITATIVE STRUCTURE OF THE NEGOTIATION—A Specific Example
Note: Aspirations shown here are for illustration; the actual aspirations formulated by participants
will vary. Reservation prices are given fairly precisely in role instructions.
ZOPA = Zone of Potential Agreement
Goals/Interests:
-Purchase 10,000-18,000 units
-One Shot Deal
BATNA = No Alternative Source
Buyer’s
Aspiration
Buyer (AccelMedia)
5
15
10
Buyer’s
Reservation Price
20
25
30
35
40
45
ZOPA
Seller (GTechnica)
Seller’s
Aspiration
Seller’s
Reservation Price
Goals/Interests:
-Sell up to 15,000 units
-One Shot Deal
BATNA = No Alternative Buyer
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Fundamental Strategies
Push for settlement near opponent’s
resistance (walkaway)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
8
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
9
Tactical Tasks of Negotiators
Assess outcome values and the costs of
termination for the other party
Manage the other party’s impressions of
you
Modify the other party’s perceptions of
your offers
Manipulate the actual costs of delay or
termination to you or to the other party
10
Assess Outcome Values and the Costs
of Termination for the Other Party
Indirectly
Determine information opponent used
to set:
Target
Resistance points
Directly
Opponent reveals the information
11
Manage the Other Party’s
Impressions of You
Screen your behavior:
Say and do as little as possible
Direct action to alter impressions
Present facts that enhance one’s
position
12
Manage the Other Party’s
Perceptions of You & Your Offers
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
13
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
14
Positions Taken
During Negotiations
Opening offer
Where will you start?
Opening stance
What is your attitude?
Competitive? Moderate?
Initial concessions
Should any be made? If so, how
large?
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Positions Taken During
Negotiations—Concessions etc.
The role of concessions
Without them, there is either capitulation
or deadlock
Patterns of concession making
The pattern contains valuable information
Final offer (making a commitment)
“This is all I can do”
16
Commitments:
Tactical Considerations
Establishing a commitment
Three properties:
Finality
Specificity
Consequences
Preventing the other party from
committing prematurely
Their commitment reduces your flexibility
17
Abandoning Commitments
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
18
Closing the Deal
Provide alternatives (2 or 3
packages)
Assume the close
Split the difference
Exploding offers
Deal sweeteners
19
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)
Chicken
Intimidation
Aggressive Behavior
Snow Job (overwhelm the other party
with information)
20
Dealing with Typical
Hardball Tactics
Four main options:
Ignore them
Discuss them
Respond in kind
Co-opt the other party (befriend them)
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