Business Negotiations

Discipline: Business

Type of Paper: Question-Answer

Academic Level: Master's

Paper Format: APA

Pages: 1 Words: 275


Business Negotiations

Good Cop/Bad Cop
Negotiating with 2 parties- one if for you and the other is against you

What two dilemmas face negotiators?
Honesty and trust 

Dilemma of Honesty 
Concern of how much truth to tell the other party

Dilemma of Trust 
Concern about how much negotiators should believe what the other party tells them

Ethical questions in negotiations 
Omission and commission

Failing to disclose information that would benefit the other

Actually lying about the common-value issue

Distributive bargaining
Claiming value: objective is to gain the largest piece of resource 

Integrative bargaining
Creating and claiming value: objective is to have both parties do well

Determines the point at which you can say "no" to an unfavorable proposal

Negotiating without determining your BATNA is
negotiating with your eyes closed

The area or range in which a deal that satisfies both parties can take place; set of agreements that satisfy both parties 

Sellers reservation price

Reservation price
"Walk away" point; least favorable point in which you will accept a deal

If BR > SR...
a positive bargaining zone exists

Buyers reservation price

If BR < SR...
there is no zone of possible agreement

Anchoring is best used in
distributive bargaining/negotiations

Anchoring is 
- Powerful - Undetectable - Unavoidable

ridiculously low or high offer

Bogey (red herring)
Used when someone attacks an issue by using irrelevant facts or argument as distractions

Hardball tactics 
Used in distributive negotiations (good cop/bad cop, lowball/highball, bogey, the nibble, aggressive behavior, snow job)
The Nibble

Adding a small item to the deal after both parties have spent significant time and effort in the negotiation and the agreement is near

Agressive behavior
Using harsh behavior to attack the other party, insisting the other party explains their position and insists upon their best offer early in the negotiation

A negotiator tries to overwhelm the other party with information, in order to take advantage of the other's uncertainty and anxiety; intended to distract or confused

Best way to deal with hardball tactics
Discuss it. Tell the other party that you know the game they are playing and that you aren't going to be fooled by it

Negotiation where claiming maximum value is the primary goal

An individual's belief in and willingness to act on the words, actions, and decisions of another

In distributive bargaining you should not...
disclose any significant information about your own circumstance

What is the most common style of negotiations?

- Likes solving other peoples problems, good relationship building skills - Sensitive to others emotional states and body language - Great as a member of a team, in "relationship management" roles and customer service - Can be vulnerable to high competitors

Weaknesses of Accommodating Style
- Tend to emphasize their own frame of references as objectively right - Can be seen as unreasonably stubborn

- Eager to "close the gap" in negotiations - Useful when time is short, but can move too fast where integrative opportunities can be overlooked

Weaknesses of Compromising
- Stand on principle (sometimes where others don't see it) - Good for passion and commitment - Can be seen as stubborn

- Tact and diplomacy, useful when interpersonal differences interfere with negotiation - Tend to substitute rules and hierarchies for negotiations - Agents, e-mails memos to minimize direct confrontation - Can miss opportunities, allowing problems to fester 

Weaknesses of Avoiding
- No fear of conflict, assertive/candid bargaining - Useful for L/R, litigation, M&A work - Can be seen as tactless and overly confrontational

- Likes finding the best solution for all parties - Good at probing below surface to discover interests - Wants all parties to engage and interact - Can be complicated when solution is simple and takes more time than necessary

Weaknesses of Collaborating
- Can be uncomfortable with creativity in bargaining - Tend to like clear, pre-set goals - Can be a bottleneck and slow down the process (use of breaks and caucuses can help)

- Likes to win (negotiation is a game) - Has value in distributive negotiations - Can be hard on relationships -

Weaknesses of Competing
- Doesn't value fairness, solving problems, or building relationships - Can be useful as a member of a team, but can be a disadvantage in high stakes negotiation with high competitors on the other side

Hardball tactics are best used in
distributive bargaining

Negotiator's dilemma
Both sides could create value if both were forthcoming with information about their needs and situations. Either side will suffer if one shares information about their needs and the other does not.

What people say they want

The reasons behind what they say they want

Concessions are
necessary part of distributive barganing

Contrast principle
Affects the way we see the difference between two things that are presented one after another. If the difference between the items is fairly great, we will tend to see a greater difference than actually exists

A powerful way to invoke the power of reciprocation because they usually also involve the principle of perceptual contrast

Information Based Bargaining
You will get better results for yourself and achieve more for others who depend on you by tirelessly searching for key facts about the parties to the negotiation and the particular situation

Value creation is most associated with
Integrative bargaining