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Bargaining: describes the competitive, win-lose situation

Negotiation: refers to win-win situations such as those that occur when parties
try to find a mutually acceptable solution to a complex conflict
Elements of Preparation
-Information gathering
Downside of preparation
-Resource limit
-Informational limit
-Cognitive limits
-Mistaken assumptions
-Selective Perception
Reason for Negotiatiations-
-To agree on how to share or divide a limited resource
-To create something new that neither party could attain on his or her own
-To resolve a problem or dispute between the parties
Successful negotiation involves:
-Management of tangibles (e.g., the price or the terms of agreement)
-Resolution of intangibles (the underlying psychological motivations) such as wi
nning, losing, saving face
Flow of Negotiations: Stages and Phases
-Beginning phase (initiation)
-Middle phase (problem solving)
-Ending phase (resolution)
Possitive Bargaining Zone - The Common Price range between the reservation point
s of both buyer and seller.
Bargaining Surplus - The gap between the reservation points of both buyer and se
Basic Rules of Negotiation -
-Remain Focussed
-Know the other party
-Be reasonable
-Use your words carefully
-Sense of Humor
-Use creativity
Strategy and Tactics of Distributive Bargaining
Bargaining Situations
-Goals of one party are in fundamental,direct conflict to another party
-Resources are fixed and limited
-Maximizing ones own share of resources is the goal
Preparationset a
-Target point, aspiration point
-Walkaway, resistance point
-Asking price, initial offer
Fundamental Strategies
-Push for settlement near opponents resistance 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 alternative
-Discovering the other partys resistance point *
-Influencing the other partys resistance point*
Assessing the other partys resistance point *-
-Indirect Assessment find information used by the opponent to determine (unions f
und position, manufacturers inventory position, property on sale for the duration
-Direct Assessment Opponent reveals so that it is not considered as a bargaining
ploy (show wallet). Provoking the other party into an angry outburst hoping sli
p of tongue.
Influencing the other partys resistance point*-
-Highlight the cost of delay
-Show little interest in the thing your opponent perceives valuable
-Highlight the value of the thing that you offer
Tactical Tasks of Negotiators
-Assess outcome values and the costs of termination for the other party
-Manage the other partys impressions
-Modify the other partys perceptions
-Manipulate the actual costs of delay or termination
Tactics for distributive negotiations
-Do not disclose any significant information about your circumstances.
-Learn as much as possible about the other side
-Establish an anchor
-Divert the discussion away from unacceptable anchors
-Make cautious concessionary moves
-Use time as a negotiation tool
-Offer multiple proposals, and consider packaging options
-Signal your interest in closing the deal
Strategy And Tactics of Integrative Negotiation
-Inquire about the other side's interests
-Provide significant information about your circumstances
-Look for differences to create value
-Take your time
What Makes IntegrativeNegotiation 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 for standards of performance
Key Steps in the Integrative Negotiation Process
-Identify and define the problem
-Understand the problem fully
identify interests and needs on both sides
-Generate alternative solutions
-Evaluate and select among alternatives
Factors That Facilitate Successful Integrative Negotiation
-Some common objective or goal
-Faith in ones own problem-solving ability
-A belief in the validity of ones own position and the others perspective
-The motivation and commitment to work together
-Clear and accurate communication
-An understanding of the dynamics of integrative negotiation
Why Integrative Negotiation Is Difficult to Achieve
-The history of the relationship between the parties
-The belief that an issue can only be resolved distributive
-The mixed-motive nature of most negotiating situations
Major aspects for consideration (Cross Culture)-
Degree of formality
Gift giving
Eye contact
Body language
Power Moves
-Strengthening your BATNA
-Weakening other partys BATNA
-Changing the other partys perception of your BATNA
-Changing the other partys perception of their own BATNA
-Using credible threats
-Engaging in a war of attrition
-Using brinkmanship