Strategy and Tactics of Distributive Bargaining1

7/21/2019 Strategy and Tactics of Distributive Bargaining1

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Strategy and Tactics of

Distributive Bargaining


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Chapter Outline

Distributive Bargaining Process

Fundamental Strategies

Tactical Task Positions taken During egotiation

Commitment

Closing the Deal

!ardball Tactics


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Bargaining " egotiation

egotiation is a process of interpersonal

decision#making$

Bargaining is a type of negotiation in%hich buyer " seller of a goods or service

dispute the price %hich %ill be paid and

the e&act nature of transaction %ill takeplace' " eventually come to an agreement$


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Types of Bargaining

Distributive : (t is a %in#lose bargaining because)

%hatever one side gains comes at the e&pense of the

other party# %hat is *%on+ by one is *lost+ by other$

(t is referred to as hard bargainingbecause it isusually a highly competitive process designed to reach

a formal %ritten agreement' such as a purchase

contract$

Integrative : Parties come to an agreement in anamicable manner' %in#%in situation for the parties

involved$


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Contd,$

(t usually occurs in negotiations based on

the sale of products %here all that matters

is price' for e&ample in the sale of anautomobile and in real estate$


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-alue Claiming

The competitive process of claiming value involves

dividing up a *fi&ed pie+ or the total amount of value

available to the disputing parties$

.ach side tries to get as much of the pie as possible$The more one side claims' the less the other side gets$

This is also kno%n as a *%in#lose+ negotiation$

To claim a value in negotiation' one uses competitive

tactics to try to convince the other side$


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/hat are !ardball Tactics0

They are designed to pressure targetedparties to do things they %ould not other%ise do$

They are tactics %hich result in a changeout come of Distributive BargainingProcess$

They are tactics %hich %ork on poorlyprepared negotiators$


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Typical !ardball Tactics

1ood 1uy2Bad 1uy

!ighball23o%ball

Bogey ibble

Chicken

(ntimidation

Sno% 4ob

5ggressive Behavior


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1ood 1uy2Bad 1uy

amed after police interrogation

techni6ue$

(t is relatively transparent' especially %ithrepeated use$

egotiators using this tactic can become so

involve %ith their game and act they fail toconcentrate on obtaining their goals$


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!ighball23o%ball

Starts %ith a ridiculously high2lo% opening

offer that kno% they %ill never achieve$

The tactics goal is have the other partyreevaluate their opening offer and move

closer to the resistance point$

The risk is the other party %ill thinknegotiating is a %aste of time$


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Bogey

/hen a negotiator pretends an issue

important and it is not$

(t only %orks %ell (f they pick a issue thatis important to the other side$

(t can be a difficult tactic to enact$


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ibble

(s a tactic used to get small concession%ithout negotiating$

The concession is too small to lose the dealover' but large enough to upset the otherside$

(t is felt that nibble tactic is not in good

faith and may seek revenge in futurenegotiations$


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Chicken

egotiators %ho use this tactic combine a

large bluff and threaten actions$ 5 high stakes gamble$


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(ntimidation 2 5ggressive

Behavior (t is guilt' anger' legitimacy' fear' %hat ever givesyou po%er over the other party$

(f you are making a concession' because you

assume the other party is more po%erful' or

simply accepts the legitimacy of the other

negotiator' %hich means you are (T(7(D5T.D$

5ggressive behavior is similar accept it is therelentless pushing$


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Sno% 4ob

(s the 1overnments favorite tactic %hen

releasing information to the public$

(t is the over%helming of information thatyou have trouble determining %hich facts

are real or important$


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Dealing %ith Typical !ardball

Tactics

1ood 1uy2Bad 1uy

8.specially if you call them out on it at the

beginning$

!ighball23o%ball

8The best %ay to deal is not to counter the offer$

8Be prepared to leave to demonstratedissatisfaction of using this tactic$


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Tactics Cont,$ Bogey

8 (s difficult tactic to defend against) ho%ever' being%ell prepared for negotiation %ill make you less

susceptible to it$8 5lso %atch out for sudden reversals in positions$

ibble8 Before closing a deal ask */hat else do you %ant0+

giving both parties a chance to negotiate in good faith$8 5l%ays have a your o%n list of nibble prepared to

offer in e&change$


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Tactics Cont,$

Chicken8 (s very difficult to defend against$

8 Preparation and a through understanding of the situation$

8 9se e&ternal e&perts to help %eigh your options$

(ntimidation8 (f the other negotiator is acting aggressively' then discuss

issues by putting your stand in the negotiation process$

8 5nother effective strategy is the use of a team' usuallynot everyone is intimidated by the same thing and theyoffer support if the intimidation is uncomfortable$


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Tactics Cont,$

Sno% 4ob83isten for consistent and inconsistent

information$ Do not be afraid to ask 6uestions

until you understand the ans%er$

8(f the matter is highly technical suggest for atechnical e&pert to look over the technicalissues$

85gain' preparation is the key to dealing %ith asno% :ob tactic$


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Summary

(t has been recommended not to use any of thehardball techni6ues$

9nderstanding hardball tactics %ill make you a%are

of the user;s ob:ective$ 1ood planning %ill help you deal and avoid hardball

tactics$

!ardball tactics can backfire$

They are offensive and motivate revenge$ 7any negotiators consider these tactics out of bounds

for any situation$


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Thank you

Strategy and Tactics of Distributive Bargaining1

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