MGT 430 FINAL

When the relationship counts more than the issue in dispute, the best concession strategy is accommodation.

True

Interests

Underlying concerns, needs, desires or fears that motivate a negotiator to take a particular position.

ZOPA

Zone of Possible Agreement, distance between reservation prices

5 signs of integrative potential

1.Does the negotiation contain more than one issue? 2.Do parties have different preferences (interests) across negotiation issues? 3.Is the long-term relationship important? 4.Can other issues be brought in? 5.Can other parties be brought in?

Six foundations of effective negotiating

1.Your personal bargaining style 2.Your goals and expectations 3.Authoritative standards and norms 4.Relationships 5.The other party's interests 6.Leverage

Of the five negotiation styles, which can be toxic to relationships?

Competing

Of the five negotiation styles, which appeals to norms of fairness?

Compromising

According to Shell, parties need to answer every question during a negotiation in order to keep the negotiation moving forward.

False

According to Shell, the never open rule (that is, do not ever make the first offer) is always good advice.

False

According to the author of our textbook, G. Richard Shell, the best advice is not to vary your natural bargaining style. In other words do not adjust your style depending on the bargaining situation you face. Rather, you should learn a single, all-purpose menu of bargaining moves and use them in every negotiating situation.

False

According to Shell, outright lies such as fictitious other offers and better prices are unethical practices for which school of bargaining?

Idealist school

If you have attractive alternatives or good sources of normative leverage or can easily live without the other party's cooperation, the _______ stage of negotiations is the time to signal this to the other party.

Information Exchange

A negotiator's concern for what is "fair" or "right" is considered which type of interest?

Interest in principle

Raymond is negotiating a contract with a long-term supplier at the chemical company where he works. Which type of bargaining situation does this scenario describe?

Balanced Concern

According to Shell: in which situation do you want to move slowly on your least important issues first and use the conditional "if...then" formulation for concession making?

Balanced Concerns

If you sense that your counterpart is trying to extract concessions from you on the basis of his or her initial success of establishing rapport, you should:

Be alarmed that you are being conned

BATNA

Best alternative to a negotiated agreement , most attractive option if deal is not made

Of the five negotiation styles, which requires high levels of trust?

Collaborating

Which of the following is not one of the Six Foundations of effective negotiation stated in Shell?

Control and Status Quo

In the "Luna Pen" case, Erika determines that the Luna pens she purchased in Hong Kong and Malaysia are:

Counterfeit

In the "Luna Pen" case, which barrier is Erika most concerned about as she prepares for the upcoming negotiation?

Cross-Cultural Barrier

Close relationships trigger the use of _______. Encounters with strangers cause us to expect and exhibit more competitive, selfish behavior.

Equality or equal sharing norms

If you decide to negotiate yourself, which type of communication gives everyone the maximum "bandwidth" for communication?

Face-To-Face meetings

A bargaining move is fraudulent when a speaker either knowingly or unknowingly misrepresents a material fact on which the victim reasonably relies causing damages.

False

Leverage is a static factor in bargaining and does not change as negotiations proceed.

False

Power and leverage are the same thing.

False

Two research studies of negotiator behavior discussed in the textbook have shown that the most effective negotiators overwhelmingly tend to display predominantly competitive traits in negotiations rather than cooperative traits.

False

Consistency principle

Felt as a "tug to agree with other party when the standards or norms he/she articulates are consistent"with what we've said in the past

This term refers to things we strive toward that are usually beyond the range of our past achievements. We set these to give ourselves direction but we are not greatly surprised or disappointed if we fall short.

Goals

Role of Gifts and Favors

Help build trust as they symbolize underlying relationship

Expanding the Pie

Increasing available resources in such a way that both parties can achieve their objectives.

This type of leverage derives from the consistency principle and refers to the party's relative ability to apply that principle.

Normative

Pareto Efficient

Optimal settlement point where there is no agreement that will make one party better off without making the outcome less favorable for another party.

Which approach to opening is described by Shell as your own highly favorable interpretation of some standard or reference point?

Optimistic Opening

Name the Key aspects of negotiation

Parties, Issues, Positions, Interests

Nonspecific compensation

Payoff for the conceding party in exchange for agreeing to accommodate the other party's interests. Not directly related to the substantive issues in the negotiation.

Which of the following is not an example of the scarcity effect tactic for closing a negotiation?

Pointing out that you have invested a great deal of time and want to see the deal through

Two collectors of antiques are bargaining over the sale of an oriental vase. One begins by saying, "I'm looking for an item to put in my show room that is affordable for the average collector." This negotiator is employing which of the following negotiating tactics?

Positioning Theme

Four stages of a negotiation

Preparation, info exchange, explicit bargaining, commitment.

What is a "bogey" as discussed in "Distributive Bargaining: A Strategy for Claiming Value?"

Pretending an issue is very important even though it is not

Holding a press conference about a deal to move a sports team to a different city is an example of what type of commitment ritual?

Public Announcement

Different situations call for different strategies. Which situation describes negotiations between employees working on well-functioning executive teams?

Relationships

RP

Reservation Price, highest/lowest value each party is willing to give, walk-away price

This principle applies to a simple psychological fact: we tend to trust people who appear more rather than less familiar to us; people who act like us, share our general interests and experiences, and identify with the same groups.

Similarity principle

According to "Distributive Bargaining: A Strategy for Claiming Value," inundating the other party with so much information that it is not possible to determine what is accurate or relevant best describes which of the following tactics:

Snow Job

We prefer to say yes to the requests of someone we know and like. Psychologist Robert Cialdini refers to this as:

The liking rule

What is leverage

The powerto obtain an agreement on your own terms

Which of the following negotiation situations has a higher risk of unethical conduct than the others?

Transaction

A key difference between integrative and distributive bargaining is that the goals of the parties in integrative bargaining are not mutually exclusive.

True

According to "Distributive Bargaining: A Strategy for Claiming Value," it is often a mistake not to reveal your deadline to the other party in the negotiation because being unaware of the deadline they will expect a longer negotiation and concede at a slower pace.

True

According to Shell, establishing rapport at the outset of negotiations is a distinct, separate part of the information exchange process.

True

According to Shell, the goal of all negotiations is to secure commitment and not merely agreement.

True

According to the article "Is Business Bluffing Ethical?" bluffing in business transactions does not necessarily reflect the bluffer's moral character in his/her personal life.

True

According to the article "Is Business Bluffing Ethical?" the bluff is an integral part of the business game.

True

According to the article "Is Business Bluffing Ethical?" the phrase "It pays to be ethical" is just a self-serving calculation in disguise.

True

Any agreement within the ZOPA leaves both parties better off than they would be with their BATNAs

True

Even the most accommodating person brings a somewhat competitive attitude to negotiation.

True

In negotiation situations where the relationship matters, "softer" closing techniques are the rule instead of scarcity effect closing tactics.

True

Leverage is based on the other party's perception of the situation, not the facts.

True

Postsettlement settlement is an innovative closing technique where parties try to move from good agreements to better deals in which they seek that bit of extra value they may have left on the table. According to Shell's research, this is hard to implement in practice.

True

Research confirms that people receiving concessions often feel better about the bargaining process than people who get a single firm, "fair" price. In fact, they feel better even if they end up paying more than they otherwise might.

True

The potential for "expanding the pie" ultimately depends on how the other party's interests compare to your own

True

Similarity Principle

We tend to trust people that appear more rather than less familiar to us

Which of the following is the short-hand description for the Pragmatist School of bargaining ethics?

What goes around comes around

Goal or target point:

What you hope to attain in negotiation

When to make first offer?

When prepared to do so •Open if your information about market value is as good or better than your counterpart's and you can estimate their reservation price -When you want to take control of negotiation by anchoring

You can assess leverage by asking yourself which of the following questions?

Which party has the most to lose from no deal?

Integrative Negotiation

Win-win, expand the pie to create gains for each side, creating value

In the absence of this, the most rational outcome to a negotiation should be that the parties reach no deal

ZOPA

Distributive Negotiations

Zero sum, win-lose, fixed pie that parties fight over, claiming value

Fraudulent bargaining move

a party makes a knowing misrepresentation of a material fact on which the victim reasonably relies on causing damages

People strongly disposed to this bargaining style naturally seek to defer and dodge the confrontational aspects of negotiations. As a positive attribute, this tendency can be experienced by others as graceful tact and diplomacy. It can also permit groups to function better in the face of dysfunctional, hard-to-resolve interpersonal conflicts.

avoiding

First offer cons

calculating first offer, can be rejected or harmful to relationship

Reciprocity Norm

duties we owe others because of their prior actions (builds trust)

First offer pros

first offer anchors negotiation, First offers often account for >50% of variance in outcomes

House, car, and land sales between strangers are typical examples of which bargaining situation?

transaction

Which negotiation tactic is described here: When the other party drags out the negotiation process and then raises or lowers the price or adds new terms at the last minute, trusting that you have too much invested to lose and so will say "yes."

overcommitment

The idealist school

-"do the right thing even if it hurts" -The same ethics that apply in the home should carry over directly to bargaining

The poker school

-"it's a game" (Carr article) -Anything goes as long as it fits the rules

The pragmatist school

-"what comes around goes around" -Misleading conduct can lead to practical problems, so do it sparingly and in the correct manner

Scarcity Effect

-Competition; many people wanting the same thing -Deadlines; time is running out -Walkouts; "take it or leave it" ultimatum

Positive Effects of seeing the others parties interests

-Look for common ground and non-conflicting interests -Determine why the other party might say "no" and try to remove objections

Types of leverage

-Positive: relative ability to provide value -Negative: relative ability to take away value -Normative: relative ability to apply consistency principle

How to counteroffer

-Re-anchor on key issues -Challenge underlying standard/logic of offer -Keep your goals in mind -Identify new sources of value to discussion

How to avoid making the first offer

-Refocus discussion on breadth of issues -Reinforce positive impressions & relationship -Reiterate desire to understand other's interests

4 degrees of commitment

-Social ritual -Public announcement -Accountability -Simultaneous exchange

Select the appropriate explanation of when to use distributive negotiation for 1) Goals 2) Relationships 3) Resources 4) Trust and Cooperation

1) Goals are in fundamental conflict. 2) Relationship is not a priority. 3)Resources are fixed and limited. 4)Trust and cooperation is lacking.

4 steps of preparation

1) assess the situation 2) match situation, style, and strategy 3) Other party's view of the situation 4) Deciding how to communicate

Information Exchange Purposes

1) establish rapport 2) obtain information 3) signaling expectation and leverage

4 key steps to integrative process

1) identify and define the problem 2) identify interests and needs 3) Generate alternative solutions 4) evaluation and selection of alternatives

Three schools of bargaining ethics

1) the poker school 2) The idealist school 3) The pragmatist school

Positioning themes

A framework defining the problem you want to solve

In the context of negotiations, which of the following statements best represents what a BATNA is?

A party's best option to satisfy his/her interests outside the current negotiation

Position

A party's stance on a focal issue in a negotiation, which is likely made obvious to other party/parties.

Superordination

A type of solution that occurs when the differences in interests that gave rise to the conflict are superseded or replaced by other interests.

Logroll

Agreement to trade off among issues, such that one party achieves a highly preferred outcome on the first issue and the other party achieves a highly preferred outcome on the second issue.

Which set of strategies are best suited for negotiations between people over airplane seating?

Avoidance, accommodation, or compromise

Abundance Mentality

An integrative negotiation attitude where concessions are not seen as decreasing one's share of the pie, but as enlarging the pie as a whole.

If the other side uses unethical tactics, Shell recommends you do which of the following:

Keep to your school of ethics