BUS 50.3 Chapter 2 - Copy

BUS 50.3 Chapter 2 - Copy - CHAPTER TWO Strategy and...

Info iconThis preview shows pages 1–12. Sign up to view the full content.

View Full Document Right Arrow Icon
CHAPTER TWO Strategy and Tactics of Distributive Bargaining
Background image of page 1

Info iconThis preview has intentionally blurred sections. Sign up to view the full version.

View Full DocumentRight Arrow Icon
The Distributive Bargaining Situation Zero-sum (one winner) Goals of one party are in fundamental,direct conflict to another party Resources are fixed and limited Maximizing one’s own share of resources is the goal
Background image of page 2
Distributive Bargaining Overall Strategies Guard information carefully, give information only when it offers a strategic advantage Highly desirable to obtain information about the other party in order to improve negotiation power
Background image of page 3

Info iconThis preview has intentionally blurred sections. Sign up to view the full version.

View Full DocumentRight Arrow Icon
Reasons to be Familiar with Distributive Bargaining Some interdependent situations are distributive and to do well one needs this knowledge Many individuals exclusively use this approach, so one needs to know how to counter this approach when being a recipient Every negotiation situation has the potential to use this approach when “claiming value” (getting the larger portion)
Background image of page 4
Distributive Bargaining Situation – Key Terms Target point (AKA aspiration point): point at which a negotiator would like to conclude negotiations (the optimal goal) Walkaway (AKA resistance point): a negotiator’s bottom line Asking price: initial price set by seller Initial offer: initial number offered by buyer
Background image of page 5

Info iconThis preview has intentionally blurred sections. Sign up to view the full version.

View Full DocumentRight Arrow Icon
Bargaining Range Range where actual bargaining takes place Positive bargaining range: buyer’s resistance point is above the seller’s resistance point (i.e., buyer will minimally pay more than what seller is minimally willing to sell for) Negative bargaining range: seller’s resistance point is above the buyer’s resistance point (these negotiations are likely to stalemate)
Background image of page 6
Miscellaneous Points Establish starting, target, and resistance points before negotiation Note: You usually do not know the other party’s resistance point
Background image of page 7

Info iconThis preview has intentionally blurred sections. Sign up to view the full version.

View Full DocumentRight Arrow Icon
The Distributive Bargaining Situation Party B - Buyer Party A - Seller Walkaway Point Target Point Asking Price Initial Offer Target Point Walkaway Point
Background image of page 8
The Role of Alternatives to a Negotiated Agreement Alternatives give the negotiator power to walk away from the negotiation Seller: a different buyer Buyer: another equivalent purchase If alternatives are attractive, negotiators can: Set their goals higher Make fewer concessions If there are no attractive alternatives: Negotiators have much less bargaining power
Background image of page 9

Info iconThis preview has intentionally blurred sections. Sign up to view the full version.

View Full DocumentRight Arrow Icon
The Distributive Bargaining Situation Party B - Buyer Party A - Seller Walkaway Point Target Point Asking Price Initial Offer Target Point Walkaway Point Alternative Alternative
Background image of page 10
Fundamental Strategies Push for settlement near opponent’s resistance point Get the other party to change their resistance point If settlement range is negative, either:
Background image of page 11

Info iconThis preview has intentionally blurred sections. Sign up to view the full version.

View Full DocumentRight Arrow Icon
Image of page 12
This is the end of the preview. Sign up to access the rest of the document.

Page1 / 33

BUS 50.3 Chapter 2 - Copy - CHAPTER TWO Strategy and...

This preview shows document pages 1 - 12. Sign up to view the full document.

View Full Document Right Arrow Icon
Ask a homework question - tutors are online