Selling and Negotiation Exam 3 Review
What are distributive bargaining strategies
- Assess the other party's target, resistance, and cost of terminating negotiations - Manage the other party's impression of the negotiator's target resistance point and cost of terminating negotiations - Modify the other party's perception of his or her own target, resistance, and cost of terminating negotiations - Manipulate the actual costs of delaying or terminating negotiations
what does that spread between resistance points?
- Called the bargaining range, settlement range, or zone of potential agreement - Where actual bargaining takes place - When buyers resistance point is above the seller - positive bargaining range - When the sellers resistance point is above the buyers - negative bargaining range
What are 4 key steps in the integrative negotiation process?
- Creating a free flow of information - Attempting to understand the other negotiator's real needs and objectives - Emphasizing things parties have in common - Searching for solutions that meet the goals and objectives of both parties (Identify and define the problem, Surface interests and needs, Generate alternative solutions, Evaluate and select alternatives)
Examples of tactics for direct action to alter impressions
- Selective presentation - Reveal only the necessary facts - Explain or interpret known facts to present a logical argument - Display an emotional reaction - Ethics are a concern - It may backfire
examples of intangible factors
- The need to win, beat the other party, or avoid losing to the other party - The need to look good, competent, or tough to the people you represent - The need to defend an important principle or precedent in a negotiation - The need to appear fair or honorable or to protect one's reputation - The need to maintain a good relationship with the other party after the negotiation is over; Often rooted in personal values and emotions
What are some strategies that are effective for interdependent situations? (1.4 in textbook)
- Win lose strategies - When parties depend on each other to achieve their own outcome they are interdependent characterized by interlocking goals - BATNA - best alternative to negotiated agreement - zero - sum - Distributive situations, only one winner - Nonzero sum - Integrative or mutual gains many people can achieve their goals and objectives
what are important things to consider in an opening stance?
- You have to decide how you want to be competitive, moderate, etc. - Think carefully about the message they are trying to signal - To communicate effectively, a negotiator should try to send a consistent message through both the opening offer and opening stance
How do you respond to hardball tactics
1. Discuss them: label the tactic and offer to negotiate the process itself before continuing 2. Ignore them: ignoring a hardball tactic can be powerful- the tactics take a lot of energy to enact properly 3. Respond in kind: may the be most useful when dealing with another party who is testing your resolve or as a response to exaggerated positions 4. Co-opt the other party: it is more difficult to attack a friend than an enemy
what are the ways to weaken the other parties' resistance points?
1. Reduce the other party's estimate of your cost of delay or impasse; the more you can convince the other party that your costs of delaying or ending negotiations are low, the more modest the other's resistance point will be 2. Increase the other party's estimate of their own cost of delay or impasse; the more can do to convince the other party that delaying or ending negotiations will be costly, the more likely he or she will be to establish a modest resistance point 3. Reduce the other party's perception of the value of an issue; if can convince the other party that a current negotiating position will not have the desired outcome or that the present position is not as attractive as the other believes; then he or she will adjust his or her resistance point 4. Increase the other party's perception that you value an issue
what are the characteristics common to all negotiations?
1. There are 2 or more parties 2. There is a conflict of needs and desires between 2 or more parties- that is, what one wants is not necessarily what the other one wants, and the parties must search for a way to resolve the conflict 3. The parties negotiate by choice 4. When we negotiate we expect a give and take process that is fundamental to our understanding of the word negotiation 5. The parties prefer to negotiate and search for agreement rather than to fight openly, have one side dominate and the other capitulate, permanently break off contract, or take their dispute to a higher authority to resolve it 6. Successful negotiation involves the management of tangibles (price or the terms of agreements) and also the resolution of intangibles
what are the 3 reasons negotiations occur?
1. To agree on how to share or divide a limited resource such as land money or time 2. To create something new that neither party could do on his or her own 3. To resolve a problem or dispute between the parties
What are the 6 Negotiating tools mentioned in this chapter? (Getting More - Ch 1 Questions)
1. be dispassionate emotion destroys negotiations you must force yourself to be calm 2. prepare for even 5 seconds collect your thoughts 3. find the decision-maker 4. focus on your goals not who is right 5. make human contact people are everything 6. acknowledge the other party's position and power
What is it when the one party accept a change in your position
A concession has been made
What is a resistance point?
A negotiator's bottom line; the most he will pay as a buyer, the smallest amount he will settle for (seller)
Do you want to signal when you're almost done with concessions
A simple absence of further concessions conveys that there is no room for further movement; but the other party may feel the pattern of concessions is being violated
What is considered outside the bargaining range and what happens
Anything outside these points will be summarily rejected by one of the 2 negotiators; Anything outside of the spread between resistance points; this is where the actual bargaining takes place
What is distributive bargaining
Basically a competition over who is going to get the most of a limited resource; Zero sum: ones in which there can be only one winner or where the parties are attempting to get the larger share or piece of a fixed resource
what is the dilemma of honesty that negotiators face?
Concerns how much truth to tell each other; Telling the other party everything may given them the opportunity to take advantage; Not telling the other person anything may lead to stalemate
What roles do concessions take in negotiations
Concessions are central, without them, negotiations would not exist
Intrapersonal and intrapsychic conflict
Conflict occurs within an individual (ideas, thoughts, emotions, values, predispositions, or drives that are in conflict with each other)
what is calculated incompetence?
Constituents do not give the negotiating agent all the necessary information, making it impossible for his or her to leak information; Instead, the negotiator is sent with the task of simply gathering facts and bringing them back to the group; can make negotiations complex and tedious, and it often causes the other party to protest vigorously at the negotiator's inability to divulge important data or to make agreements
people often differ in their perception of the future of an item
Differences in risk tolerance; Differences in time preferences - The creating value process is more effective when it is done collaboratively and without a focus on who gets what
hardball tactics are...
Difficult to enact, each involves risk for the person using it; important to understand tactics and how they work so you can recognize if hardball tactics are being used against you
zero-sum
Distributive situations, only one winner
What should you start before you start a negotiation
Establish starting, Target, and Resistance points before a negotiation
what is the be-all and end-all of negotiations? Explain. (Getting More - Ch 1 Questions)
Goals are the be-all and end-all of negotiations. You negotiate to meet those goals.
What kind of distributive bargaining tactics are useful
Guard information carefully; negotiators give information to the other party only when it provides a strategic advantage; Locate the other party's resistance point and the relationship of that resistance point to your own; Influencing the other party's resistance point
How does Diamond define "framing"? Give an example. (Getting More - Ch 4 Questions)
He first mentions that it is the key to standards. Framing means packaging information or presenting it using specific words and phrases that will be persuasive to the other party. They use the example in the text saying 'do you intend to make customers happy?' This frames the problem to the server.
What should you focus on the most in negotiations? (Getting More - Ch 4 Questions)
He says for us to execute and focus what are my goals? What standards should I use? What are their needs? Can I invoke any common enemies? Can I form a vision of a relationship? Who is their decision-maker? Etc. The most important thing is to focus and execute the strategy.
Why does Diamond not like calling standards "consistency traps"? (Getting More - Ch 4 Questions)
He says that it gives a wrong impression and you aren't trying to trap anyone, but instead you want them to keep the promises they have made.
How does Stuart Diamond define "standards"? Give an example. (Getting More - Ch 4 Questions)
He says, "a standard is a practice, policy, or reference point that gives a decision legitimacy." An example would be the McDonald's fresh fries example that is used in the text. The student was able to use their standards to get the fresh fries they wanted.
what is the dilemma of trust that negotiators face?
How much to believe what the other tells you; If you believe everything the other party says then they could take advantage of you; If you believe nothing they say you will have difficulty reaching an agreement
Do you want to go really fast with concessions or make a progression of them
Immediate concession are perceived less valuable than gradual delayed concessions; Negotiators generally resent a take it or leave it approach
What are the three different ways relationships can be characterized
Independent, dependent, or interdependent
Nonzero sum
Integrative or mutual gains many people can achieve their goals and objectives
what is the difference between integrative and distributive?
Integrative: Attempts to find solutions so both parties can do well and achieve their goals, the purpose is to create value Distributive: Mindset of only one winner, the purpose is to claim value, and to do what ever is necessary to claim the reward
what is selective presentation?
Negotiators reveal only the facts necessary to support their case
What are some strategies that are effective for independent situations?
Parties are able to meet their own needs without the assistance of others
How much more are people willing to help you if you treat them as individuals? (Getting More - Ch 2 Questions)
People are five times as likely to help you if you treat them as individuals. In the text, it also mentions that 90% versus around 15% are willing to help.
dual concerns model
People in conflict have 2 independent types of concern 1. Concern about their own outcomes (horizontal; assertiveness dimension) 2. Concern about the other's outcomes (vertical; cooperativeness dimension); These points can be represented at any point from none to high
Getting More talks about reordering a sentence in this chapter. Why and what does it do? (Getting More - Ch 3 Questions)
Reordering a sentence can ensure that both parties are understanding the statement correctly. This allows for you to better understand what they are receiving and if there is any miscommunication. Wording a sentence with the question first like the example in the text is much easier to interpret and clear. When you ask someone for their perception first it shows that you value them, they are then much more interested in what you have to say.
What is the first thing you should do each day of a negotiation? (Getting More - Ch 2 Questions)
The first thing that you must do each day of negotiation is to take the emotional and situational temperature of the people sitting across from you.
Summarize the section "the question of power in your own words. (Getting More - Ch 1 Questions)
The section begins by defining power as the ability to meet goals over any time frame. Power on its own does not have much power and can be damaging. The skills to gain power need to be used carefully, if you overuse the power you can actually lose the power you have and hinder you from accomplishing your goals. People hate it when they feel as though you are using the power to put yourself above them. Women tend to be better at negotiating than men because they listen and try harder to learn the tools being presented. Women have less raw power and when you have too much it can cause a backlash. When there is less power, there is less risk of this retaliation. Subtler tools are more effective. Small countries are better at resolving things and children are better at negotiating than adults. It is important to watch others and this will lead to individuals achieving their own goals. People with less power tend to have creativity and by giving people power you can get what you want in return. Power is very sensitive in nature.
Are hardball tactics effective
They work best against poorly prepared negotiators but can also backfire
Intergroup conflict
This conflict between organizations, ethnic groups, warring nations, or feuding families or within splintered, fragmented communities; Negotiations at this level are the most complex
Intragroup conflict
This is a conflict within a group
Interpersonal conflict
This is conflict between individuals
what does win-win situation mean?
Those that occur when parties are trying to find a mutually acceptable solution to a complex conflict; Essentially both parties get something good
What are some ways that alternatives play into negotiations
When there are a lot of attractive alternatives negotiators can set their goals higher and make fewer concessions; If you have no attractive alternatives you have much less bargaining power
Discuss in your own words "Finding and Acknowledging Their Power". (Getting More - Ch 2 Questions)
When valuing others you are not just focused on someone who is super high up in the company, but rather everyone even if it may seem pointless. People will want to help if you make them feel empowered. Don't chastise people when they mess up, instead acknowledge their power and see the wonderful outcomes that come from it. One very important thing to note is that reactivity can be very harmful in situations as such. When acknowledging someone's power you are finding the decision-maker that is within that individual. It seems odd but ask them for help and use empathy because they will then be much more likely to help you. Have them solve the problem for you and give them the power to feel like they can even though you may not accept the answer.
Can you always walk away? is that an answer?
Yes you can always walk away
Do people have time preference differences or not?
Yes, one negotiator may want to realize gains now, while the other may be happy to defer gains into the future
What should you start with in a negotiation? Give an example. (Getting More - Ch 4 Questions)
You should start with the easy things in a negotiation. Asking something like when is the next meeting is a good simple example of something to say. It makes both parties feel like they accomplished something
what is conflict?
a disagreement or opposition, and includes the belief that the parties' current needs cannot be achieved simultaneously
independent relationship characteristics
are able to meet their own needs without the assistance of others; They are relatively detached, indifferent and uninvolved with others
Emotions and perceptions are far more important than...?(Getting More - Ch 1 Questions)
are far more important than power and logic in dealing with others.
why are alternatives important?
because they give negotiators the power to walk away from any negotiation when the emerging deal is noy very good
What does BATNA mean?
best alternative to a negotiated agreement; Whether you should or should not agree on something in a negotiation depends entirely upon the attractiveness to you of the best available alternative; Negotiators need to understand their own and the other party's BATNA
what can packaging concessions lead to?
better outcomes than making concessions singly on individual issues
Resources are fixed and limited and...?
both parties want to maximize their share
interdependent relationship characteristics
characterized by interlocking goals; The parties need each other in order to accomplish their objectives and hence have the potential to influence each other; Having interdependent goals does not mean that everyone wants or needs exactly the same thing
distributive situations
claim value
integrative situations
create value
negotiators use win-lose strategies in what type of situations?
distributive
A reciprocal concession can be haphazard
false
When successive concessions get smaller, the concession maker's position is...?
getting firmer and the resistance point is being approached (note: a concession late in negotiations may also indicate that there is little room left to move)
what may negotiators not accept?
inadequate reciprocal concessions
what does the pattern of concessions contain?
information, but it may be difficult to interpret
when do negotiators use win-win strategies?
integrative situations
what is the resistance point?
it is not known to the other party and should be kept secret
dependent relationship characteristics
must rely on others for what they need; Because they need help, benevolence, or cooperation of the other, the dependent party must accept and accommodate that provider's whims and idiosyncrasies
Is bargaining and negotiating the same thing
no; bargaining is used to describe the competitive win-lose situations such as haggling over the price of an item at a yard sale and negotiation refers to win-win situations such as those that occur when parties are trying to find a mutually acceptable solution to a complex conflict
what are starting points?
often in the opening statements; (sellers listing price and buyer's first offer)
what do concessions imply?
recognition of the other's position and its legitimacy
what are the two dilemmas in mutual adjustment that negotiators face?
the dilemma of honesty and the dilemma of trust
what does conflict result from?
the interaction of interdependent people who perceived incompatible goals and inference from each other in achieving those goals
a sellers resistance point is...
the least they will take for an item
the more you can convince the other that you value a particular issue...
the more pressure you put on the other party to set a more modest resistance point with regard to that issue
a buyers resistance point is...
the most they will pay for an item
Parties feel better about a settlement when...
the negotiation involves a progression of concessions
in distributive bargaining...
the negotiator accepts the one winner concept and pursues action to be the winner; The purpose of this negotiation is to CLAIM value
what are intangible factors?
the underlying psychological motivation that may directly or indirectly influence the parties during a negotiation
integrative negotiation attempts to...
to find solutions so both parties can achieve their goals; The purpose of negotiation is to CREATE value
clear resistance points help what?
to keep people from agreeing to deals that they later realize weren't very smart
when can negotiators also use selective presentation?
to lead the other party to form the desired impression of their resistance point or to create new possibilities for agreement that are more favorable than those that currently exist
what is one way to accomplish a simple absence of further concessions
to make the last concession more substantial; Large enough to be dramatic, yet not so large it creates suspicion that the negotiator has been holding back; A concession may also be personalized to the other party signaling this is the last concession the negotiator will make
The goals of one party are usually in fundamental and direct conflict with the goals of the other party
true
what is the target point?
usually learned or inferred as negotiations get under way; A negotiator's optimal goal; the point at which a negotiator would like to conclude negotiations; optimal goal; negotiators aspiration
finding compatibility if often the key to...
value creation
positive bargaining range
when a buyer's resistance point is above the seller's
when can conflict occur?
when the 2 parties are working toward the same goal and generally want the same outcome or when both parties want very different outcomes; Regardless of the cause of the conflict, negotiation can play an important role in resolving it effectively
negative bargaining range
when the seller's resistance point is above the buyer's
what is a resistance point?
where you stop negotiations as any settlement beyond this point is not minimally acceptable
bargaining
win-lose
negotiating
win-win
Is there sometimes conflict if you're working towards the same goal and want the same outcome
yes
can hardball tactics be seen as offensive and out of bounds?
yes
What are the 14 basic components to effective communication? (Getting More - Ch 3 Questions)
1- always communicate 2 - listen and ask questions 3 - value, don't blame them 4 - summarize often 5 - do role reversal 6 - be dispassionate 7 - articulate goals 8 - be firm without damaging the relationship 9 - look for small signals 10 - discuss perceptual differences 11 - find out how they make commitments 12 - consult before deciding 13 - focus on what you can control 14 - avoid debating who is right
what are the Different levels of conflict?
Intrapersonal and intrapsychic conflict Interpersonal conflict Intragroup conflict Intergroup conflict
What is Stuart Diamond's point about the picture in the beginning of the chapter?(Getting More - Ch 3 Questions)
It exemplifies how the biggest cause of negotiation failure is communication failure which is caused by misinterpretation. None of the answers are wrong, but people just interpret things differently.
