Week 1 - Distributive & Integrative Bargaining Flashcards
Characteristics of Negotiation
- A basic means of getting what you want
- Conflict of needs between two or more parties
- Parties negotiate because they think they can get a better deal
- Back and forth communication to reach agreement
Partners prefer searching for an agreement rather than:
- Fight openly
- Capitulate
- Break off contact permanently
- Take their dispute to a third party
What does negotiation involve?
Tangibles and intangibles
Interdependence
In negotiation, parties need each other to achieve their preferred outcomes or objectives
Interdependent goals
- Win-lose: I win, you lose (conflicting goals)
- Win-win: opportunities for both parties to gain (convergent goals)
Type of interdependence shapes processes and outcomes
- Zero-sum distributive - one winner
- Non-zero-sum or integrative - mutual gains
Mutual adjustment
- Throughout the negotiation, both parties act to influence the other
- An effective negotiator understands how people will adjust and readjust
and how the negotiation might twist and turn - Negotiators face two dilemmas in mutual adjustment
- Dilemma of honesty
- Dilemma of trust
Dilemma of honesty
How honest should you be in a negotiation
Dilemma of trust
How much should you trust the other party
Concession making
Part of mutual adjustment.
- When one party agrees to make a change in his/her position
- Fairness and reciprocity in concessions is important
Conflict
Conflict can be defined as a:
* sharp disagreement
* perceived divergence of interest
* belief that the parties’ current aspirations cannot be achieved simultaneously
Dysfunctions of conflict
- Competitive, win-lose mindset
- Misperception and bias
- Emotionally charged
- Decreased communication
- Blurred issues
- Locked into positions
- Magnified differences
- Escalation
Functions and benefits of conflict
*Content-related discussions
*Creative problem-solving
*Change and innovation
*Awareness of self and others
*Strengthened relationships
*Stimulating and fun
The Dual Concern Model
Two axes: Concern about the other’s outcomes and concern about own outcomes
- Yielding (accomodating): little concern for own outcomes and high on other’s outcomes. Helpful if you were wrong, or when something is not important
- Inaction: doing nothing. Appropriate for a cooling of period, not when you are responsible for a decision;
- Compromising: finding each other in the middle;
- Contending (forcing): Useful with trivial issues, when something is not complex;
- Problem-solving: This is needed with complex situations needing commitment from others for success, not for simple, or timely issues.
Distributive bargaining
In distributive negotiations, the goals of one party are in fundamental and direct conflict with the goals of the other party
Purpose of distributive bargaining
To claim value:
* A competition over who is going to get the most of a limited resource
Three reasons why a negotiator should understand distributive bargaining
- In order to do well in interdependent situations that are distributive
- To know how to counter the effects of such widely used strategies
- Every negotiation requires skills at the “claiming-value” stage
Basic elements of distributive bargaining situations
- Positions
- Opening offers
- Create room for making concessions
- Target points
- Stretch goals that parties aspire to
- People who aim high get better deals but don’t become too greedy with a large stretch goal
- Resistance points
- Negotiators will not go beyond this point (i.e., their bottom line)
- Should be kept secret from the other party
ZOPA
Zone of possible agreement
- When resistance points overlap, there is a positive bargaining range
- With a negative bargaining range, there is no room for settlement
Methods of Distributive bargaining
- Zopa
- Concessions: patterns of concession making contain valuable information
- Final offers: “this is all I can do” / “I asked my boss and he allowed me to give you a special deal…”
- Settlement point
BATNA
Best Alternative to a Negotiated Agreement
- People with strong BATNAs
- Set their goals higher
- Make fewer concessions
If no attractive alternatives, negotiators have little bargaining power
How to develop negotiation power?
- What is my BATNA
- Should I disclose my BATNA to the other side during negotiations
- If I have a weak BATNA, should I lie about alternatives?
- Do I know what the other side’s BATNA is? How can I find their BATNA?
- How can I weaken the other side’s BATNA?
- How can I strengthen my BATNA?
Goals distributive bargaining
- Settlement as close to the other party’s resistance point as possible
Strategies in distributive bargaining
Strategies in distributive bargaining:
* Learn as much as possible about the other party’s position
- BATNA
- Resistance point
* Influence the other party’s belief about what is possible
- Convince the opponent of your position
- Make the opponent change their mind about their own position
- Put the opponent under pressure
