DON Practice exams
It is often times difficult to identify the other negotiator's interests because he or she may not fully understand what he or she wants or needs in a particular negotiation.
True
NFL quarterback Tom Brady's interest in having an ownership interest in Under Armour so that he could have a continuing income stream after his retirement from professional football is best described as a tangible interest.
True
Splitting the difference is frequently used to close a deal because it is easy, quick and generally seems fair to both negotiators.
True
The best way to respond to someone who uses the hardball tactic of highball/lowball is to counter with your own your own extreme first offer.
True False CORRECT
Assume that you are trying to sell a textbook to your roommate. You have determined the market value of your book to be $45 (based on a "buy-back" price you received from the University Book Store) but have a goal of selling the book for $75. Your roommate offers to buy your textbook for $50. Based on these facts, which of Roger Dawson's "Power Negotiation/Sales Strategies" would be appropriate for you to use in countering your roommate's first offer?
Accept your roommate's first offer since you have such a weak alternative to buying the book from your roommate. "Flinch" at your roommate's first offer. Offer to split the difference between $45 and $50. Play the part of a "reluctant seller." b and d (correct)
Which of the following statements is true?
Being "genuine" in negotiations means that a negotiator understands and works with his/her general tendencies when analyzing a negotiation situation and preparing a negotiation strategy. Inexperienced negotiators frequently try to imitate the style of other more successful negotiators. Effective negotiators understand that even the best-planned negotiation strategy may have to change once a negotiation gets started. a and b a, b and c (correct)
Which of the following statements is true?
Being "genuine" in negotiations means that a negotiator understands and works with his/her general tendencies when analyzing a negotiation situation and preparing a negotiation strategy. Inexperienced negotiators frequently try to imitate the style of other more successful negotiators. Effective negotiators understand that even the best-planned negotiation strategy may have to change once a negotiation gets started. a and b a, b and c (correct)
Which negotiation strategy would generally be the most appropriate to use in a distributive bargaining situation?
Competitive (correct) Collaboration Accommodation Compromise Avoidance
Which of the following statements is true?
Compromise and collaboration negotiation/conflict handling styles are effectively the same since both aim at achieving "win-win" outcomes. Collaboration is generally best used when there are multiple issues to be negotiated and the situation is not zero-sum. Very few negotiation situations would support the use of an avoiding negotiation/conflict handling style. b and c (correct) a, b and c
Which of the following statements about people classified as "cooperative" is true?
Cooperative people actually tend to make fewer concessions in negotiations compared to competitive people. Cooperative people tend to be more effective than individualistic socially oriented people in working with other people to expand resources available to distribute during a negotiation. Cooperative people are better able than competitive people to use and implement integrative ("win- win") negotiation strategies. Cooperative people tend to make more proposals during a negotiation than competitive people. b, c and d (correct)
Which of the following steps will help a negotiator commit to following through with an agreement she/he has negotiated?
Engage in some sort of "social ritual" (e.g., shaking hands at the end of the deal). Hold a press conference announcing the deal that has just been negotiated. Summarize the agreement in the form of a memorandum of understanding or contract. a and b a, b and c (correct)
Studies suggest that cooperative negotiators cannot be successful in price-only business transactions nor can competitive negotiators be effective in situations that require relationship-building skills.
FALSE (correct)
Which of the following statements is false?
Generally, a negotiator should not change his or her reservation price (RP) after the start of a negotiation. A negotiator's Best Alternative to a Negotiated Agreement (BATNA) can never be improved. (correct) Without an established BATNA, a negotiator may ultimately accept a suboptimal outcome. A negotiator may set his RP by considering objective information, such as a list price for a used car. None of the above
Which of the following statements about salary/employment negotiations is false?
It is important for a job candidate in a salary negotiation to identify his/her Best Alternative to a Negotiated Agreement (BATNA). A job candidate should generally let the employer first raise the issue of starting salary. It is important for a job candidate to understand the market value of someone with her/his experience and qualifications. A job candidate should not immediately accept or reject the employer's first salary offer. None of the above (correct)
Why is a collaborative negotiation strategy often times the hardest to implement?
It requires a number of third-party individuals to act as agents or facilitators. It represents an ideal situation that does not really exist. It requires that a negotiator identify his or her interests as well as the interests of the other negotiator. It requires a significant amount of trust between the two negotiators so that they can share different concerns and interests about the issues being negotiated. c and d (correct)
When both parties to a negotiation have a good Best Alternative to a Negotiated Agreement (BATNA), what effect should this have on the settlement zone (or zone of possible agreement)?
It should make the settlement zone larger. It should decrease the size of the settlement zone. (correct) BATNAs are not related to the settlement zone. None of the above are true
Why is it difficult for a negotiator to understand the other side's interests, to "get into the other party's shoes?"
Many negotiators continue to hold a fixed-pie assumption about negotiation, which causes them to assume that the other negotiator's interests are diametrically opposed to their own. Other times negotiators assume that all negotiations are simple transactions resulting in a winner and loser and have little interest in considering ways to help the other negotiator "win." (correct)
Which of the following are ways to build trust and establish effective relationships with another negotiator?
Share internal information with the other negotiator. Emphasize the similarities you have with the other negotiator. Use the norm of reciprocity. Find a shared problem or "enemy." All of the above (correct)
Why is a nibble generally an effective negotiations tactic?
Since a nibble is made after the negotiators appear to have reached an agreement, an inexperienced negotiator may worry that the agreement will fall apart if he or she does not agree to the additional request. Negotiators frequently rationalize agreeing to the nibble by comparing the relatively low cost of agreeing to the nibbler with the total value of the negotiated agreement. a and b (correct)
Which of the following concession strategies would be most appropriate for a distributive bargaining situation?
Start high and concede slowly. (correct) Make larger concessions on less important issues and smaller concessions on the most important issues.
As a general rule, and according to the nine-year study of "skilled" negotiators conducted by Rackham, "skilled" negotiators prefer using competitive negotiations strategies compared to the cooperative negotiations strategies favored by less skilled negotiators.
TRUE FALSE (correct)
Why are many people reluctant to negotiate over salary during an employment negotiation?
They worry about being seen by the employer as "greedy" by asking for more than the offered salary amount. All of the above (correct) They are concerned about the appearance of being aggressive or "ungrateful." They worry about having the job offer rescinded and given to another candidate. They have not properly determined their Best Alternative to a Negotiated Agreement (BATNA) or taken steps to improve their BATNA.
A competitive negotiations strategy is useful when
a negotiator needs to stand firm on an issue and maintaining a good relationship with the other negotiator is of little or no concern. (correct) the negotiation situation suggests the possibility of both parties doing well by working together. concern for the negotiator's own outcomes is low and there is an ongoing relationship with the other negotiator. a and b a, b and c
Which of the following negotiation/conflict handling styles would be most appropriate in a situation in which a person must maximize his or her outcome and the relationship with the other person (and his or her outcome) is not important?
accommodation competition (CORRECT) avoidance collaboration/problem-solving None of the above
Imagine that you and your roommates have just moved out of an apartment and you need to talk to your landlord about getting your security deposit back. Yesterday your security deposit check came in the mail, but you notice that the landlord withheld $1,500 for damages and cleaning the carpet. You know that you did not leave everything exactly perfect but you did spend several hours cleaning the apartment when you moved out. You decide to contact your landlord and try to get the rest of your security deposit back. If you can't convince the landlord to give you the rest of the security deposit back, you will have to find a lawyer to help you file a lawsuit against the landlord in small claims court. Identify two hardball tactics you might use in negotiating with your landlord. Will hardball tactics be effective in this negotiation? Why or why not?
ball/low ball offer and possibly good cop/bad cop with the help of one of your roommates. Hardball tactics may be effective as both parties likely view this as a distributive bargaining situation. (correct)
Forty-two Republican Senators in the United States Senate announced in December 2010 that they would block legislative action on every issue being proposed by Democratic Senators until Congress passed a law extending tax cuts previously agreed to during the time that George W. Bush was President. The Republicans' action in refusing to negotiate on any legislative issue until the Democrats agreed to extend the Bush tax cuts best reflects the hardball tactic of:
chicken. (correct) nibbling. a sweetener. a flinch.
The 9-trial Decision Task provides a score on three social orientation measures, which include:
collectivism self-determination. individualism. (correct) problem-solving. avoidance.
In an employment negotiation, the candidate's request for a $50,000 starting salary is considered a/an ______________ and the reason for that request - the candidate needs a starting salary of at least $50,000 to pay her rent and student loans - is considered to be a/an _________________.
interest; position position; excuse position; interest (correct) interest; excuse
Issue trading" and "package bargaining" are generally associated with a/an _____________ negotiation.
distributive integrative (correct)
People frequently say they "hate to negotiate" because they:
don't see negotiation situations develop until it is too late to do any planning. fail to understand what is required to plan for an effective negotiation. do not understand that different negotiation situations may require different strategies. assume all negotiations are competitive and "win-lose" in nature. All of the above (correct)
In order to be given a specific social orientation classification on the 9-trial Decision Task, a person must score at least ____ out of 9 for a particular social orientation measure.
four five six (correct) seven eight
Integrative negotiations go by many names, including:
mutual gains bargaining. principled bargaining. All of the above (correct) interests-based bargaining.
Claiming value in a negotiation is analogous to:
ompromise. expanding the pie. fairness. Zero sum thinking (correct) wishful thinking.
A negotiator's ______________ may also represent his/her _______________ in a negotiation.
reservation price (RP); aspiration level (AL) aspiration level (AL); bottom line reservation price (RP); bottom line (correct) aspiration level (AL); Best Alternative to a Negotiated Agreement (BATNA) a, c and d
The most effective way for a negotiator to bridge the power gap with another negotiator is to:
threaten to walk away from the negotiations if the other negotiator does not accept the negotiator's proposals. ask questions aimed at better understanding his or her interests. make proposals that reflect an understanding of the other negotiator's interests. b and c (correct) a, b and c
"No haggle" or "one low price" selling policies are not usually effective negotiation strategies because the group of people who generally dislike to negotiate - or to "haggle" - is much smaller than people realize.
true
You are in a negotiation to buy a used car. The seller's first offer is to sell the car to you for $30,000. When you say "no," to this offer, she proposes to sell the car to you for $23,000 - a $7,000 concession. You respond by saying that $23,000 for the car is still "too high." At that point, the seller offers to sell you the car for $16,000. What message is the seller most likely sending you based on her pattern of concessions?
"I really want this deal to happen." (correct) "I am at my bottom line." "I have a really good BATNA and can easily walk away from this deal with you." "The price I receive for my car is very important to me." b and d
Anne is negotiating with Ven for the sale of an antique clock. Anne's last offer for the clock is $500 while Ven's last offer to Anne is $900. If Ven proposes to Anne that they "split the difference," and Anne agrees, the settlement point will be:
700$
Which of the following statements is false?
A negotiator should generally make equal sized concessions during an integrative negotiation to build a sense of trust with the other negotiator. (correct) Making large concessions during the early stages of a negotiation may cause the other negotiator to use hardball tactics or to insist on additional concessions before he or she makes a reciprocal concession. The need to make and receive concessions in a negotiation reflects the norm of reciprocity. Failing to explain the significance of a concession when it is offered, may cause the other negotiator to minimize or devalue the concession. All of the above
How would a negotiator's past relationship and prior interactions with the other negotiator affect his or her choice of a particular negotiation strategy?
A negotiator whose past experience with the other negotiator involved a competitive negotiation will assume the next negotiation with that person will likewise be competitive. He or she will thus prepare for a competitive negotiation, including the possible use of contentious or hardball tactics.
Identify and discuss the five traits the authors associate with successful negotiators.
Genuine; Flexible; Ethical; Active Listener; and Curious.
Which of the following statements is true?
In distributive bargaining, it is generally not advisable to share your Best Alternative to a Negotiated Agreement (BATNA) with the other negotiator. Often times negotiators may fail to reach an agreement, even when a positive settlement zone exists, because of a lack of trust between the negotiators. The parties' negotiation dance will help to determine if an agreement is possible. The parties' negotiation dance will help to determine if an agreement is possible. Reference points, like an Aspiration Level (AL), reservation price (RP) and BATNA, will help a negotiator know when to walk away from a deal and when to accept a proposed deal. All of the above (correct)
How are "integrative" issues different from "distributive" issues in a negotiation?
Integrative issues are issues in a negotiation that the negotiators value differently. Distributive issues, by contrast, involve issues that are "win-lose" for the negotiators, meaning that for one negotiator to "win" the issue, the other negotiator must "lose." (correct)
Which of the following statements is true?
Integrative negotiations generally involve a single issue, like price in a sales contract. Integrative negotiations involve both negotiators claiming value when the resources over which they are negotiating are fixed. One way to convert a distributive bargain into an integrative negotiation is by adding issues to be negotiated. (correct) Integrative negotiation is generally associated with a "fixed pie assumption." None of the above
The process of trading off low-priority issues for higher-priority issues in an integrative negotiation is referred to as ____________________.
Logrolling
Jane took the social value orientation measure below and she chose option A. What can we surmise about Jane's social values?
She is sensitive to relative differences between self and others. She is willing to take less for herself in order to reduce what the other person receives. She is a competitor. Only a and c are true
The Rackham study compared the information gathering behavior of skilled versus average negotiators. Which of the following is true of Rackham's findings?
Skilled negotiators ask more questions than average negotiators. Skilled negotiators do more testing of their understanding of what the other negotiator said compared to average negotiators. Skilled negotiators spend more time summarizing issues and agreements during the negotiation than average negotiators. All of the above are true (correct) Only a and b are true
What assumptions might people make when completing the 9-trial Decision Task?
Some people will assume that the goal of the task is for them to choose the option that maximizes their outcome. Some people will assume that the goal of the task is for them to find the option that maximizes the outcome for the other person. Some people will assume that the goal of the task is to find the maximum outcome that provides both parties with an equal amount. a and b a, b and c (correct)
NFL quarterback Tom Brady's interest in being associated with Under Armour because the company is "cool" and "cutting edge" is best described as a/an _______________ interest.
intangible
A demand for a tangible interest framed as a position - "I want a $2,000 pay raise or I will quit" - often times hides an underlying or hidden intangible interest, such as the need for job security, the need to be treated fairly or the need for recognition.
TRUE
A key finding of the Rackham study about the traits of effective negotiators is that effective negotiators use distributive strategies and hardball tactics far more often than "average" negotiators.
TRUE FALSE (correct)
Boulwarism is generally regarded as an effective negotiation strategy because many negotiators find making concessions to be an unnecessary part of the negotiation process.
TRUE FALSE (correct)
Integrative negotiation is best described as a process by which both negotiators are equally satisfied by the outcome of their negotiation and both negotiators claimed equal value in their negotiated agreement.
TRUE False (correct)
A Boulwarism negotiation strategy tends to lead to impasses because negotiators generally expect to receive concessions during a negotiation.
TRUE (correct)
An important part of planning for a negotiation involves considering the negotiation style that best fits the specific negotiation situation.
TRUE (correct) FALSE
Although most negotiators have a dominate negotiation/conflict handling style, effective negotiators understand that they may have to use a different style depending on the specific negotiation situation.
TRUE (correct) FALSE
As a general rule, it is difficult for a negotiator to change her or his dominant negotiation/conflict handling style.
TRUE (correct) FALSE
Unlike a distributive bargaining situation, in integrative negotiations failing to share information actually disadvantages a negotiator.
TRUE (correct) False
Which two reference points of the buyer and seller will determine their zone of potential agreement (ZOPA)?
The aspiration levels (ALs) of the buyer and the seller. The reservation price (RP) of the buyer and the aspiration level (AL) of the seller. The Best Alternative to a Negotiated Agreement (BATNA) of the buyer and the seller. The reservation price (RP) of the buyer and the seller. (correct) The opening offers of the buyer and the seller
You have been given a job offer to start work on June 1st as a Financial Analyst for the ABC Company. The ABC Human Resources Director says that you if you accept the offer within the next 48 hours, ABC will give you a signing bonus of $3,000; however, if you don't accept the offer within the next 48 hours the job offer will still be there for you but you won't receive a signing bonus. What negotiating technique is ABC's Human Resources Director using to convince you to make a quick decision to accept the company's job offer?
The norm of reciprocity. An "exploding" offer. (correct) A "sweetener." Good cop/bad cop. Concession devaluation.
As a general rule, a strategy of dealing with a negotiation on an "issue-by-issue" basis creates a greater risk of reaching an impasse than does a negotiation based on the negotiators trading different issues depending on how important the different issues to the different negotiators.
True
Which of the following situations is most likely an integrative negotiation situation?
Two business partners discussing ways to terminate their business and to fairly distribute the business' assets. A start-up company negotiating an employment offer with a candidate to become the company's first director of marketing. a and b (correct) a, b and c A student on spring break in Cancun negotiating with a street vendor to purchase a souvenir that the student can bring back home.
When is it in a negotiator's best interest to make the first offer?
When the other negotiator is very knowledgeable about the market price of the goods you are buying and selling. When you are uncertain about the appropriate market price. When you believe the other negotiator is uncertain about the market value. (correct) When you are the buyer in the negotiation. It is never in a negotiator's interest to make the first offer in a negotiation.
Which of the foll owing is best described as a "distributive" bargaining situation?
You are negotiating with your fiancé over the cost of your upcoming wedding. You are negotiating with your landlord at the end of your apartment lease for the return of the full amount of your security deposit. (correct) You are negotiating with your parents to pay for the cost of a summer school class. You are negotiating with your roommate over which movie to rent at the video store. None of the above
A "negotiation" is best described as:
a "win-lose" game between two people with conflicting goals. competitive "haggling" between two or more people in which the only way one negotiator "wins" is by having the other negotiator "lose." a process that helps two or more people work together to achieve goals and solve problems. a problem-solving activity that requires the active participation of both negotiators for a deal to be reached. c and d (correct)
Distributive bargaining situations are based on several underlying assumptions and/or characteristics. These include:
an assumption that there is a fixed amount of resources to be distributed during the negotiations. the belief that the interests of the negotiators are diametrically opposed. the notion that distributive bargaining is more likely to occur when the negotiation involves a single issue, like price. an assumption that that the relationship between the two negotiators is not a strong one or that maintaining a future relationship is not important to either negotiator. All of the above (correct)
Rackham conducted a nine-year study of 48 professional labor and contract negotiators. Skilled negotiators, according to Rackham, generally:
avoid defend/attack spirals with the other negotiator. spend more time than average negotiators looking for common ground or shared interests with the other negotiator. have more formal education - advanced degrees in business or law - than average negotiators. a and b (correct) a, b and c
An outcome can be considered Pareto Optimal if:
both parties are satisfied with the outcome. (correct) both parties did equally well. neither party can do better unless the other party does worse. a and b a, b and c
People who tend towards the use of a competitive negotiation/conflict handling style generally:
excel at "win-lose" negotiations where both negotiators are attempting to maximize their outcome at the expense of the other side. use a variety of contentious or "hardball" negotiation tactics to achieve their goals. view most negotiation situations as zero-sum games. a, b and c (correct)
Hardball tactics:
generally signal that the negotiation will be distributive. may be effective to use against a poorly prepared negotiator. are designed to cause a negotiator to question her Best Alternative to a Negotiated Agreement (BATNA) and bargaining goals. a and b a, b and c (correct)
Discussing the negotiation process, that is establishing the ground rules for the negotiation:
helps to create rapport with the other negotiator. provides some needed structure to the negotiation process. may create some momentum for the negotiation that leads the parties to ultimately reach an agreement. a and b a, b and c (correct)
After graduating from the university, you accepted a job with the ABC Company. You have been working for ABC for the past two years. Your supervisor, Wei, constantly praises your work and suggests that you are on track to be promoted to a management position. Although you like both Wei and ABC, you believe that your base salary is $2,000 lower than what you should be paid. When you ask Wei about the possibility of receiving a $2,000 pay raise, Wei replies, "I have always enjoyed our working relationship. I consider myself as a mentor for you. You know how hard the company is working right now to keep our existing clients. This is a bad time for you to ask for more money. I am offended by your request. If the economy improves, I will promise to talk to management about getting you a pay raise." Feeling guilty for asking for the additional $2,000, you thank Wei for talking to you. Based on these facts, Wei has most likely used the hardball tactic of _________________ in her meeting with you.
intimidation (correct) bogey nibble chicken good cop/bad cop
As a general rule, "if-then" and "what-if" questions are most useful during the _____________ stage of a negotiation.
preparation rapport-building information-trading deal-making (correct) closing
As a general rule, open-ended questions are most useful during the ________________ stage of a negotiation:
preparation rapport-building (correct) information-trading deal-making closing
Two years ago, you negotiated with a sales representative from New York City over the purchase of new furniture for your apartment. This negotiation was very competitive, as the sales representative spoke quickly, continually asked you how much money you were willing to spend on the furniture and repeatedly told you that if you did not buy the furniture at the listed price several other customers would be happy to do so. You have a salary negotiation scheduled for tomorrow with a human resources representative with a company that you would like to work for. In talking to the human resources representative, you discover that she is from New York City. Assuming that negotiations with people from New York City are always competitive, you prepare a competitive approach to your salary negotiation. This situation best reflects the concept of a/an:
self-fulfilling prophecy. stereotype. assumption. a and b a, b and c (correct)
In a negotiation, the other party offers you minimal information about their financial statements but then asks you (in exchange for the information they gave you) to provide detailed information on how you calculate the retail price for the products you sell. In this situation, the other negotiator is using _______________________ to attempt to gain more information from you than what he offered in exchange.
the norm of reciprocity (correct) precedence a fairness norm the equality norm a consistency norm
Roger Dawson's "Power Negotiation/Sales Strategies" include:
the use of the flinch by a buyer in a sales negotiation. telling the other negotiator that she will "have to do better than that" (something Dawson refers to as a "vice") after receiving the negotiator's first offer on price. making equal-sized concessions throughout the negotiation. a and b (correct) a, b and c
A person using the accommodating negotiation/conflict handling style:
views the negotiation process in and of itself as a conflict to be avoided. may fail to achieve his or her own goals because of the emphasis accommodators place on maintaining a good relationship with the other person in a negotiation. (correct) sees a negotiation situation as a problem or challenge to be solved. values quality and fairness in attempting to find a middle ground solution to a conflict or negotiation situation. All of the above