Essay on Negotiation and Negotiation Distributive Negotiation

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Terms to know:
Negotiation
Distributive Negotiation – limited amount of resources and you must divide pie -For one to do better, other must give something up (car sale)

Integrative Negotiation – complex negotiations, what you typically do at work, strategic partnerships - i.e. Mergers and Acquisitions

Resistance Pt/Bottom Line(RP)– amount beyond which I will walk-least favorable outcome needed to satisfy negotiator -Always arbitrary, subject to cognitive biases
- It can become dominant and if you get an offer just better than it, you may quit pushing for your ultimate goal – do NOT focus so much on RP that you lose site of goal
- lower bound influenced by more SUBJECTIVE calculations (what is highest amt. you will pay?)

Reservation Price-price beyond which a negotiation will not go – represents lower bound that’s defined from OBJECTIVE information prior to negotiation (what are you pre-approved to pay?)
Target Pt/Aspiration level – Goal for negotiation-what one would ideally like to achieve
Opening Offer
Bargaining Zone/Range – zone between two initial offers
Positive Bargaining Zone- when the lowest amt the seller will accept (seller’s RP) is LESS THAN the highest the buyer will pay (buyer’s RP)
Negative Bargaining Zone – when the seller’s RP is MORE THAN the buyer’s RP
Bargaining Surplus Buyers-area between the buyer’s Res. Pt. and the final settlement Sellers- area between the seller’s Res. Pt. and the final settlement

Pro-Social – Cooperative and Equalitarian – seek option that provides equal outcome for all parties
Own Gain – Individualistic – seek option that gives you greatest value regardless of the other’s outcome
Relative Gain – Competition – seek option that maximizes the difference b/w you and the competition
Negotiation Styles:

1. Collaborative – concern with Problem Solving – problem focused, seeks solution that satisfies concern of both sides
Strengths – facilitate the process, ask lots of questions and developing diff. ways to resolve negotiation
Weaknesses – may make a simple solution more complex

2. Compromise – willing to split the difference, exchange concessions, seeks middle ground, focus on fairness, don’t want to appear selfish
Strengths – seek simple, fair methods of taking turns or splitting diff. to resolve negotiation diff. quickly
Weaknesses – rush the negotiation process and make concessions too quickly, don’t ask enough questions
3. Competitive – concern with Winning – likes to take charge, control, win, claim value, may be impatient Strengths – can quickly see how power and leverage can be gained
Weaknesses – can be hard on relationships, may overlook non-quantitative issues that also yield value
4. Avoidance-concern with Avoiding Conflict – dislikes disputes, uncomfortable with disagreement, feels conflict is unproductive, withdraws and becomes detached
Strengths – may be experienced by others as graceful tact and diplomacy; skilled at using conflict-reducing methods such as authority and rules to substitute for negotiation
Weaknesses – may pass up opportunities to ask for things that’d make them better off, can be a bottleneck when conflict is functional part of organization or group life
5. Accommodating – concern with Good Relationships – sensitive to other’s feelings, wants to be liked, a smoother Strengths- team player even when conflict of interests, focus on interpersonal relationships
Weaknesses – may place more importance on relationships than is warranted, vulnerable to competitive styles

BATNA – Best Alternative to Negotiated Agreement
Settlement Zone/ZOPA – Zone of Possible Agreement – where settlement occurs, between the 2 parties Res. Pt’s
Bargaining Mix – the package of issues in a negotiation
Distributive Bargaining – claim as much of the bargaining zone that’s favorable to you as you can
-Typically use when there is no prior relationship and/or there won’t be an ongoing relationship (car sale)
4 Fundamental
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