NegotiatingNegotiatingNegotiatingNegotiating
Strategy and Tactics of Strategy and Tactics of gyDistributive Bargaining
gyDistributive Bargaining
Siena Heights UniversitySiena Heights UniversityProfessor WallaceProfessor Wallace
(Lewicki, Saunders & Barry. 2011)
Importance of Understanding Importance of Understanding 2-2 gDistributive Bargaining
gDistributive Bargaining
1 Multiple situations1 Multiple situations1. Multiple situations2. Counter strategies1. Multiple situations2. Counter strategiesg3. Skills potential for
“ l i i l ”
g3. Skills potential for
“ l i i l ”“claiming-value” stage“claiming-value” stage
(Lewicki, Saunders & Barry. 2011)
SituationsSituations2-3
SituationsSituations
Goals of one party are in fundamental &Goals of one party are in fundamental &in fundamental & direct conflict to another party
in fundamental & direct conflict to another partyanother partyResources are fixed and limited
another partyResources are fixed and limitedand limitedMaximizing one’s
h f
and limitedMaximizing one’s
h fown share of resources is the goal f b th ti
own share of resources is the goal f b th ti
(Lewicki, Saunders & Barry. 2011)
for both partiesfor both parties
The Distributive Bargaining The Distributive Bargaining 2-4g gSituation
g gSituation
Situation includes:St ti i t
Situation includes:St ti i tStarting points (initial offers)Starting points (initial offers)Target pointsResistance pointsTarget pointsResistance pointsResistance points (walkaway)Resistance points (walkaway)Alternative outcomesAlternative outcomes
(Lewicki, Saunders & Barry. 2011)
outcomesoutcomes
The Distributive Bargaining The Distributive Bargaining 2-5
SituationSituation
Party A - Seller
Walkaway Point Target Point Asking Price
Initial Offer Target Point Walkaway Point
(Lewicki, Saunders & Barry. 2011)
Party B - Buyer
The Role of Alternatives to a The Role of Alternatives to a 2-6
Negotiated AgreementNegotiated AgreementAlternatives give the negotiator power to walk away from theAlternatives give the negotiator power to walk away from thepower to walk away from the negotiation
If attractive negotiators
power to walk away from the negotiation
If attractive negotiatorsIf attractive, negotiators can:
Set their goals higher
If attractive, negotiators can:
Set their goals higherSet their goals higherMake fewer concessions
If tt ti
Set their goals higherMake fewer concessions
If tt tiIf unattractive :Negotiators have much less b i i
If unattractive :Negotiators have much less b i i
(Lewicki, Saunders & Barry. 2011)
bargaining powerbargaining power
The Distributive Bargaining The Distributive Bargaining 2-7g gSituation
g gSituation
Party A - Seller
Walkaway Point Target Point Asking Price
AlternativeAlternative
Alternative
Party B Buyer
Initial Offer Target Point Walkaway Point
(Lewicki, Saunders & Barry. 2011)
Party B - Buyer
Fundamental StrategiesFundamental Strategies2-8
Fundamental StrategiesFundamental Strategies
Push for settlement near opponent’s resistance pointPush for settlement near opponent’s resistance pointpGet the other party to change their resistance point
pGet the other party to change their resistance pointresistance pointIf settlement range is negative, either:
G h h id h h i i
resistance pointIf settlement range is negative, either:
G h h id h h i iGet the other side to change their resistance pointM dif i t i t
Get the other side to change their resistance pointM dif i t i tModify your own resistance point
Convince the other party that the Modify your own resistance point
Convince the other party that the
(Lewicki, Saunders & Barry. 2011)
settlement is the best possiblesettlement is the best possible
Keys to the StrategiesKeys to the Strategies2-9
Keys to the StrategiesKeys to the Strategies
The keys to implementing an of the fo r strategiesThe keys to implementing an of the fo r strategiesany of the four strategies are:any of the four strategies are:
Discovering the other party’s resistance pointDiscovering the other party’s resistance pointparty s resistance pointInfluencing the other
’ i i
party s resistance pointInfluencing the other
’ i iparty’s resistance pointparty’s resistance point
(Lewicki, Saunders & Barry. 2011)
Tactical Tasks of NegotiatorsTactical Tasks of Negotiators2-10
Tactical Tasks of NegotiatorsTactical Tasks of Negotiators
Assess outcome values and th t f t i ti fAssess outcome values and th t f t i ti fthe costs of termination for the other partythe costs of termination for the other partyManage the other party’s impressionsManage the other party’s impressionspModify the other party’s perceptions
pModify the other party’s perceptionsperceptionsManipulate the actual costs f d l i i
perceptionsManipulate the actual costs f d l i i
(Lewicki, Saunders & Barry. 2011)
of delay or terminationof delay or termination
A th Oth P tA th Oth P t2-11
Assess the Other PartyAssess the Other Party
Target, Resistance Point, and Costs of Terminating Negotiations
IndirectlyDetermine data used to
IndirectlyDetermine data used to
Negotiations
Determine data used to set:
T t
Determine data used to set:
T tTargetResistance pointsTargetResistance points
DirectlyOpponent reveals the
DirectlyOpponent reveals the
(Lewicki, Saunders & Barry. 2011)
ppinformation
ppinformation
Manage ImpressionsManage Impressions2-12
Manage ImpressionsManage Impressions
Filter your behavior:Filter your behavior:Say and do as little as possibleSay and do as little as possible
Direct action to alter Direct action to alter impressions
Present facts that enhanceimpressions
Present facts that enhancePresent facts that enhance one’s positionPresent facts that enhance one’s position
(Lewicki, Saunders & Barry. 2011)
Modify PerceptionsModify Perceptions2-13
Modify PerceptionsModify Perceptions
Make outcomes appear less i
Make outcomes appear less iattractive
Make the cost of obtaining attractiveMake the cost of obtaining ggoals appear higherM k d d d
ggoals appear higherM k d d dMake demands and positions appear more or Make demands and positions appear more or less attractive to the other party – whichever suits your less attractive to the other party – whichever suits your
(Lewicki, Saunders & Barry. 2011)
p y yneedsp y yneeds
Manipulate Costs of Manipulate Costs of 2-14pDelay or Termination
pDelay or Termination
Plan disruptive actionPlan disruptive actionRaise the costs of delay to the other party
Form an alliance with outsidersRaise the costs of delay to the other party
Form an alliance with outsidersForm an alliance with outsidersInvolve (or threaten to involve) other parties who can influence the outcome in
Form an alliance with outsidersInvolve (or threaten to involve) other parties who can influence the outcome inparties who can influence the outcome in your favor
S h d l i l i
parties who can influence the outcome in your favor
S h d l i l iSchedule manipulationsOne party is usually more vulnerable to
Schedule manipulationsOne party is usually more vulnerable to
(Lewicki, Saunders & Barry. 2011)
p y ydelaying than the other
p y ydelaying than the other
PositionsPositions2-15
PositionsPositions
Opening offersOpening offersWhere will you start?
Opening stanceWhere will you start?
Opening stanceOpening stanceAttitude?
Opening stanceAttitude?
Competitive? Moderate?
Initial concessionsCompetitive? Moderate?
Initial concessionsShould any be made? If so how large?Should any be made? If so how large?
(Lewicki, Saunders & Barry. 2011)
so, how large?so, how large?
P iti D i N ti tiP iti D i N ti ti2-16
Positions During NegotiationsPositions During Negotiations
The role of concessionsWi h h h i i h
The role of concessionsWi h h h i i hWithout them, there is either capitulation or deadlockWithout them, there is either capitulation or deadlock
Patterns of concessionThe pattern contains valuable
Patterns of concessionThe pattern contains valuableThe pattern contains valuable information
Final offers (commitment)
The pattern contains valuable information
Final offers (commitment)Final offers (commitment)“This is all I can do”
Final offers (commitment)“This is all I can do”
(Lewicki, Saunders & Barry. 2011)
C it t T ti lC it t T ti l2-17
Commitments: TacticalCommitments: Tactical
Establishing a commitmentTh i
Establishing a commitmentTh iThree properties:
FinalityThree properties:
FinalitySpecificity ConsequencesSpecificity ConsequencesConsequences
Preventing premature i
ConsequencesPreventing premature
icommitmentTheir commitment reduces
commitmentTheir commitment reduces
(Lewicki, Saunders & Barry. 2011)
your flexibilityyour flexibility
C ti C it tC ti C it t2-18
Creating CommitmentCreating Commitment
Public pronouncementPublic pronouncementLinking with an outside baseLinking with an outside basebaseIncrease the
i f
baseIncrease the
i fprominence of demandsprominence of demandsReinforce the threat or promiseReinforce the threat or promise
(Lewicki, Saunders & Barry. 2011)
promisepromise
Commitments: TacticalCommitments: Tactical2-19
Commitments: TacticalCommitments: Tactical
Ways to abandon a committed positionWays to abandon a committed positioncommitted position
Plan a way outcommitted position
Plan a way outLet it die silentlyRestate the commitment inLet it die silentlyRestate the commitment inRestate the commitment in more general termsMinimize the damage to the
Restate the commitment in more general termsMinimize the damage to theMinimize the damage to the relationship if the other backs off
Minimize the damage to the relationship if the other backs off
(Lewicki, Saunders & Barry. 2011)
backs offbacks off
Closing the DealClosing the Deal2-20
Closing the DealClosing the Deal
Provide alternatives Provide alternatives (2 or 3 packages)Assume the close(2 or 3 packages)Assume the closeAssume the closeSplit the differenceAssume the closeSplit the differenceExploding offersDeal s eetenersExploding offersDeal s eetenersDeal sweetenersDeal sweeteners
(Lewicki, Saunders & Barry. 2011)
H db ll T tiH db ll T ti2-21
Hardball TacticsHardball Tactics
Four main options:Four main options:Ignore themDiscuss themIgnore themDiscuss themDiscuss themRespond in kindDiscuss themRespond in kindCo-opt the other party (befriend Co-opt the other party (befriend p y (them)p y (them)
(Lewicki, Saunders & Barry. 2011)
Typical Hardball TacticsTypical Hardball Tactics2-22
Typical Hardball TacticsTypical Hardball Tactics
Good Cop/Bad Copb ll/ i hb ll
Good Cop/Bad Copb ll/ i hb llLowball/Highball
Bogey (playing up anLowball/HighballBogey (playing up anBogey (playing up an issue of little importance)
Bogey (playing up an issue of little importance)importance)The Nibble (asking importance)The Nibble (asking for a number of small concessions to)for a number of small concessions to)
(Lewicki, Saunders & Barry. 2011)
))
T i l H db ll T iT i l H db ll T i2-23
Typical Hardball TacticsTypical Hardball Tactics
Chickeni id i
Chickeni id iIntimidation
AggressiveIntimidationAggressiveAggressive BehaviorS J b
Aggressive BehaviorS J bSnow Job (overwhelm the Snow Job (overwhelm the other party with information)other party with information)
(Lewicki, Saunders & Barry. 2011)
))
SS2-24
SummarySummary
Negotiators need to:Set a clear target and
Negotiators need to:Set a clear target andSet a clear target and resistance pointsSet a clear target and resistance pointsUnderstand and work to improve their BATNAUnderstand and work to improve their BATNApStart with good opening offer
pStart with good opening offerMake appropriate concessionsManage the commitmentMake appropriate concessionsManage the commitment
(Lewicki, Saunders & Barry. 2011)
Manage the commitment processManage the commitment process
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