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CHAPTER TWO

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CHAPTER TWO

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    1. 1 CHAPTER TWO Strategy and Tactics of Distributive Bargaining

    2. 2 The Distributive Bargaining Situation 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

    3. 3 The Distributive Bargaining Situation Preparationset a Target point, aspiration point Walkaway, resistance point Asking price, initial offer

    4. 4 The Distributive Bargaining Situation

    5. 5 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

    6. 6 The Distributive Bargaining Situation

    7. 7 Negative Bargaining Zone

    8. 8 The Most Commonly Asked Questions Should I reveal my reservation point? Should I lie about my reservation point? Should I try to manipulate the other partys reservation point? Should I make a final offer or commit to a position?

    9. 9 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

    10. 10 Keys to the Strategies The keys to implementing any of the four strategies are: Discovering the other partys resistance point Influencing the other partys resistance point

    11. 11 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

    12. 12 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

    13. 13 Manage the Other Partys Impressions Screen your behavior: Say and do as little as possible Direct action to alter impressions Present facts that enhance ones position

    14. 14 Modify the Other Partys Perceptions 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

    15. 15 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

    16. 16 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?

    17. 17 Positions Taken During Negotiations 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

    18. 18 Thompsons Pie-Slicing Strategies (I) Strategy 1: Assess your BATNA and improve it Strategy 2: Determine your reservation point, but do not reveal it Strategy 3: Research the other partys BATNA and estimate their reservation point Strategy 4: Set high aspirations (be realistic, but optimistic) Strategy 5: Make the first offer (if you are prepared) Strategy 6: Immediately reanchor if the other party opens first

    19. 19 Thompsons Pie-Slicing Strategies (II) Strategy 7: Plan your concessions Pattern of concessions Magnitude of concessions (GRIT model) Timing of concessions Strategy 8: Use an objective-appearing rationale to support your offers Strategy 9: Appeal to norms of fairness Strategy 10: Do not fall for the even split ploy

    20. 20 Closing the Deal Provide alternatives (2 or 3 packages) Assume the close Split the difference Exploding offers Deal sweeteners

    21. 21 Dealing with Typical Hardball Tactics Four main options: Ignore them Discuss them Respond in kind Co-opt the other party (befriend them)

    22. 22 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 to)

    23. 23 Typical Hardball Tactics Chicken Intimidation Aggressive Behavior Snow Job (overwhelm the other party with information)

    24. 24 Summary Negotiators need to: Set a clear target and resistance points Understand and work to improve their BATNA Start with good opening offer Make appropriate concessions Manage the commitment process

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