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OBHR 493: Negotiations > Ch2 > Flashcards

Ch2 Flashcards

1
Q

3 reasons to learn distributive bargaining

A
  1. u will face dsitributie situations
  2. u need to know how to counter when anothe rperson is distirbutive wiht you
  3. every engotiation has dist neg elements!
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2
Q

Target point
resistance/reservation point
Asking price

A

the optimal goal for one party

beyond which a negotiator would rather have no deal

what is the initial offer

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3
Q

initial price is stated outright during negotiatons

target price is inferred through the process of negotaiton

reservation point may NOT EVEN BE REVEELAED

A
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4
Q

What can you infer about the reservaiton point

A

may infer that the other’s resistance point was near the last offer the other was willing to consider before the negotiation ended.

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5
Q

Other terms for zopa

A

bargaiing range, settlement range

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6
Q

how does target price influence the result of the negotiation?

A

Negotiaton outcomes and satisfaction with outcomes

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7
Q

BATNA
WATNA

A

best alt to negotation agreement

worst alt to negotiation agreement

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8
Q

what does a strong batna do?

A

give the negotiator more power-> cuz they can simply walk away

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9
Q

4 ways to influence others resistance point

A
  1. reduce the opps estimate of our cost if the deal moves slowly: if they think we do not mind the deal taking time, they are less likely to have a high RP
  2. Increase the opps estimate of their own cost if the deal moves slowly: if they feel they will pay more without a deal struck or if the negotiation is slow, then they will have a lower RP
  3. Reduce the opps perceived value of an issue: degrade the issue and convince them it is not worth that much!
  4. increase the opps percieved value of an issue: if you convince them ana issue matters to you A LOT! then they will be looser with the RP
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10
Q

4 tactical tasks to consider in distributive negotiation scenario

A

a. assess others rp, target, cost of terminating negotitations [gain info!! either directly through negotiation or indirectly through research]

b. manage theri perceptions of MY rp, target, cost of terminating negotitations [METHOD #1: screen the info you give; by 1. concelaing info 2. calculated incompetence (choosing a negotiation agent and not giving them info so they cant reveal it by accident) 3. (having 1 spokesperson) 4. (SNOW JOB!)]

[METHOD #2: DIRECT ACTION;
1. SELECTIVE PRESENTATION: only present favourable info items from neutral sources, or 2. say “if i were in your shoes, heres what i would do”, 3. SHOW an emotional reaction to an offer! THE FLINCH/DEMUR]

c. modify their own perceptions of their own rp, target, cost of terminating negotitations [Highlighting overlooked items,

d. manipulate acc cost of delaying/terminating negotiations (plan disruptive action [ increase the costs of not reaching a negotiated agreement through disruptive action ex: atheletes venting on social media for mgmt issues! public appeal],
form an alliance with outsiders [involve other parties who can somehow influence the outcome in the process, ex :threatening to report], and manipulate the scheduling of negotiation[ increase time pressure on negotiators])

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11
Q

2 factors for negotiators to be sensitive to when creating offers

A
  1. value characteristics, which are how much the issues and options of different issues are worth to a negotiator; and
  2. content characteristics, which involve the way the negotiation is constructed (number of issues, possible options, etc.).

Negotiators need to be aware that parties may differ in not only the value they place on different issues but also how they construct the negotiation space itself.

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12
Q

is it better to make a first offer?

A

anchors the negotiation

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13
Q

There is research evidence that even “phantom anchors” can lead to better economic outcomes in negotiations.

what are phantom anchors

A

Phantom anchors are statements like “I was going to ask for $10,000, but I can offer $8,000.

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14
Q

research has shown that more precise opening offers (for instance, $20.15) lead to more modest counteroffers from the other negotiator and better agreement outcomes for those that use precise opening offers rather than rounded opening offers (for instance, $20)

A
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15
Q

how to weaken first offer advantage

A

by concentrating on own target and RP

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16
Q

Studies indicate that negotiators who make exaggerated opening offers get higher settlements than do those who make low or modest opening offers.

A
  1. it gives the negotiator room for movement and therefore allow them time to learn about the other party’s priorities.
  2. an exaggerated opening offer acts as a meta-message and may create, in the other party’s mind, the impression that:
    -there is a long way to go before a reasonable settlement will be achieved,
    -more concessions than originally intended may have to be made to bridge the difference between the two opening positions, and
    -the other may have incorrectly estimated their own resistance point.
17
Q

Two disadvantages of an exaggerated opening offer are that

A

it may be summarily rejected by the other party and halt negotiations prematurely, and

    it communicates an attitude of toughness that may be harmful to long-term relationships.
18
Q

2 TYPES OF OPENING STANCES

A

cometitive or moderate

alernatively belligerent (trying to attack their offers)

19
Q

12 guidelines for making concessions

A
  1. concede on small issues not major ones
  2. never make two concessions in a row
  3. given an initial offer that gives you room to make concessions
  4. Give yourself enough room to make concessions.
  5. Try to get the other party to start revealing their needs and objectives first.
  6. Be the first to concede on a minor issue but not the first to concede on a major issue.
  7. Make unimportant concessions and portray them as more valuable than they are.
  8. Make the other party work hard for every concession you make.
  9. Use trade-offs to obtain something for every concession you make.
  10. Generally, concede slowly and give a little with each concession.
  11. Do not reveal your deadline to the other party.
  12. Occasionally say “no” to the other negotiator.
  13. Be careful trying to take back concessions even in “tentative” negotiations.
  14. Keep a record of concessions made in the negotiation to try to identify a pattern.
  15. Do not concede “too often, too soon, or too much.”
20
Q

does a take it or leave it approach work?/fait accompli

A

no! only considers one party and people have resentment

21
Q

why does the pattern of concessionmaking matter?

A

because of concessionsa re getting smaller: we are getting closer to resistance point

22
Q

how are final offers indicated?

A

A good negotiator will say, “This is all I can do” or “This is as far as I can go.”

let the absence of any further concessions convey the message in spite of urging from the other party. The other party may not recognize at first that the last offer was the final one and might volunteer a further concession to get the other to respond. may result in bitterness

make the last concession more substantial. This implies that the negotiator is throwing in the remainder of the negotiating range.

A concession may also be personalized to the other party (“I went to my boss and got a special deal just for you”), which signals that this is the last concession the negotiator will make.

23
Q

5 ways to close a deal

A
  1. provide alts not just 1 final offer
  2. assume the close (dont directly say that the deal is done but act like it is)
  3. Split the diff: do a summative statement and split the remaining issues
  4. Exploding offer
  5. sweetner: throw in a nice thing
24
Q

what are the results of hardball tactics

A

harm to reputation, lost deals, negative publicity, and consequences of the other party’s revenge.

25
Q

8 hardball tactics + 1 + 1

A
  1. good cop/bad cop
  2. bogey
  3. high ball/low ball
  4. nibble
  5. chicken
  6. snow job
  7. agression
  8. intimdiation
  9. silence//.././.
  10. exploding offer
26
Q

good copp/bad cop
-what
-weaknesses

A

Alternating between negotiators who use tough and more lenient negotiation approaches

weeakness: countered by openly stating what the negotiators are doing. People forgetting main goal of negotiation

27
Q

Lowball/High ball

risk

responses

A

Using extreme offers to change the anchor of potential negotiation settlements

risk: other party will think negotiating is a waste of time and will stop the process.

responses: insisting that the other party start with a reasonable opening offer;
stating market value of the item being discussed, supporting it with facts and figures; threatening to leave the negotiation; and responding with an extreme counteroffer

28
Q

Bogey

defenes?

A

Pretending a low priority item is important in order to trade it for a concession on another item

defense: d. Probing with questions about why the other party wants a particular outcome may help you reduce the effectiveness of a bogey

29
Q

Nibble

2 defenses

A

Asking for a proportionally small concession on a new item to close the deal

First, respond to each nibble with the question “What else do you want?” This should continue until the other party indicates that all issues are in the open; then both parties can discuss all the issues simultaneously. Second, have your own nibbles prepared to offer in exchange. When the other party suggests a nibble on one issue, you can respond with your own nibble on another.

30
Q

Chicken

A

Using a large bluff plus a threat to force the other party to concede

31
Q

Snow Job

A

Overwhelming the other party with so much information they cannot make sense of it

  1. ask questions
  2. bring in experts
  3. listen closely to identify inconsistent info
32
Q

Intimidation

defences?

A

Using emotional ploys such as anger and fear and legitimacy and guilt to force concessions

  1. work in a team 2. bring up values (fair and ersectful negotiation)
33
Q

Agression

A

using relentless requests for more concessions and better deals with an aggressive tone

  1. work in a team 2. stop and discuss that you ned fairness and respct
34
Q

4 defneces against hardball tactices + 1

A
  1. discuss them: label the tactic and call it out
  2. ignore them
  3. repsond in kind: with ur own tactics
  4. co-opt the party: become friends before they can use the tactic

TACTIC SPECIIFC DEFENSES

35
Q

What is 80/20 rule

A

80% planning
20% negotiating

36
Q

4 minmum prep for a neogitation

A
  1. target
  2. asking price
  3. resistance ooint
  4. batna
37
Q

switching costs

A

the things that make a party not switch to another! the cost assocaite with the effort of switching

38
Q
A

OBHR 493: Negotiations (9 decks)

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