Siena Heights University graduate class on Negotiation as Process based on text (2011) from Lewicki, Saunders and Barry (McGraw-Hill).

1. Negotiating
Strategy and Tactics of
gy
Distributive Bargaining
Siena Heights University
Professor Wallace
(Lewicki, Saunders & Barry. 2011)

2. 2-2
Importance of Understanding
g
Distributive Bargaining
1.
1 Multiple situations
2. Counter strategies
g
3. Skills potential for
“ l i i l ”
“claiming-value”
stage
(Lewicki, Saunders & Barry. 2011)

3. 2-3
Situations
Goals of one party are
in fundamental &
direct conflict to
another party
Resources are fixed
and limited
Maximizing one’s
own share of
h f
resources is the goal
for both
f b th parties
ti
(Lewicki, Saunders & Barry. 2011)

4. 2-4
The Distributive Bargaining
g g
Situation
Situation includes:
Starting i t
St ti points
(initial offers)
Target points
Resistance points
(walkaway)
Alternative
outcomes
(Lewicki, Saunders & Barry. 2011)

5. The Distributive Bargaining 2-5
Situation
Party A - Seller
Walkaway Point Target Point Asking Price
Initial Offer Target Point
Walkaway Point
Party B - Buyer
(Lewicki, Saunders & Barry. 2011)

6. 2-6
The Role of Alternatives to a
Negotiated Agreement
Alternatives give the negotiator
power to walk away from the
negotiation
If attractive negotiators
attractive,
can:
Set their goals higher
Make fewer concessions
If unattractive :
tt ti
Negotiators have much less
bargaining power
b i i
(Lewicki, Saunders & Barry. 2011)

7. 2-7
The Distributive Bargaining
g g
Situation
Party A - Seller
Walkaway Point Target Point Asking Price
Alternative
Alternative
Initial Offer Target Point Walkaway Point
Party B - Buyer
(Lewicki, Saunders & Barry. 2011)

8. 2-8
Fundamental Strategies
Push for settlement near opponent’s
resistance point
p
Get the other party to change their
resistance point
If settlement range is negative, either:
G h h id h h i i
Get the other side to change their resistance
point
Modify
M dif your own resistance point
it i t
Convince the other party that the
settlement is the best possible
(Lewicki, Saunders & Barry. 2011)

9. 2-9
Keys to the Strategies
The keys to implementing
any
an of the fo r strategies
four
are:
Discovering the other
party’s resistance point
party s
Influencing the other
party’s resistance point
’ i i
(Lewicki, Saunders & Barry. 2011)

10. 2-10
Tactical Tasks of Negotiators
Assess outcome values and
the
th costs of termination for
t ft i ti f
the other party
Manage the other party’s
impressions
p
Modify the other party’s
perceptions
Manipulate the actual costs
of d l or termination
f delay i i
(Lewicki, Saunders & Barry. 2011)

11. 2-11
A
Assess th Oth P t
the Other Party
Target, Resistance Point, and Costs of Terminating
Negotiations
Indirectly
Determine data used to
set:
T
Targett
Resistance points
Directly
Opponent reveals the
pp
information
(Lewicki, Saunders & Barry. 2011)

12. 2-12
Manage Impressions
Filter your behavior:
Say and do as little as possible
Direct action to alter
impressions
Present facts that enhance
one’s position
(Lewicki, Saunders & Barry. 2011)

13. 2-13
Modify Perceptions
Make outcomes appear less
attractive
i
Make the cost of obtaining g
goals appear higher
M k d d
Make demands and d
positions appear more or
less attractive to the other
p y
party – whichever suits your
y
(Lewicki, Saunders & Barry. 2011)
needs

14. 2-14
Manipulate Costs of
p
Delay or Termination
Plan disruptive action
Raise the costs of delay to the other party
Form an alliance with outsiders
Involve (or threaten to involve) other
parties who can influence the outcome in
your favor
Schedule
S h d l manipulations
i l i
One party is usually more vulnerable to
p y y
delaying than the other
(Lewicki, Saunders & Barry. 2011)

15. 2-15
Positions
Opening offers
Where will you start?
Opening stance
Attitude?
Competitive? Moderate?
Initial concessions
Should any be made? If
so, how large?
so
(Lewicki, Saunders & Barry. 2011)

16. 2-16
Positions D i N ti ti
P iti During Negotiations
The role of concessions
Without them, there is either
Wi h h h i ih
capitulation or deadlock
Patterns of concession
The pattern contains valuable
information
Final offers (commitment)
“This is all I can do”
(Lewicki, Saunders & Barry. 2011)

17. 2-17
C
Commitments: T ti l
it t Tactical
Establishing a commitment
Three
Th properties:i
Finality
Specificity
Consequences
Preventing premature
commitment
i
Their commitment reduces
your flexibility
(Lewicki, Saunders & Barry. 2011)

18. 2-18
C ti Commitment
Creating C it t
Public pronouncement
Linking with an outside
base
Increase the
i
prominence off
demands
Reinforce the threat or
promise
(Lewicki, Saunders & Barry. 2011)

19. 2-19
Commitments: Tactical
Ways to abandon a
committed position
Plan a way out
Let it die silently
Restate the commitment in
more general terms
Minimize the damage to the
relationship if the other
backs off
(Lewicki, Saunders & Barry. 2011)

20. 2-20
Closing the Deal
Provide alternatives
(2 or 3 packages)
Assume the close
Split the difference
Exploding offers
Deal sweeteners
s eeteners
(Lewicki, Saunders & Barry. 2011)

21. 2-21
H db ll T ti
Hardball Tactics
Four main options:
Ignore them
Discuss them
Respond in kind
Co-opt the other
p y (befriend
party (
them)
(Lewicki, Saunders & Barry. 2011)

22. 2-22
Typical Hardball Tactics
Good Cop/Bad Cop
Lowball/Highball
b ll/ i hb ll
Bogey (playing up an
issue of little
importance)
The Nibble (asking
for a number of small
concessions to) )
(Lewicki, Saunders & Barry. 2011)

23. 2-23
Typical H db ll T i
T i l Hardball Tactics
Chicken
Intimidation
i id i
Aggressive
Behavior
S
Snow J b
Job
(overwhelm the
other party with
information))
(Lewicki, Saunders & Barry. 2011)

24. 2-24
S
Summary
Negotiators need to:
Set a clear target and
resistance points
Understand and work to
improve their BATNA
p
Start with good opening offer
Make appropriate concessions
Manage the commitment
(Lewicki, Saunders & Barry. 2011)
process