DRM 2053

Negotiation
Techniques
DR HJH AIDA NASIRAH ABDULLAH
UNIVERSITI PERTAHANAN NASIONAL MALAYSIA

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Week 2
STRATEGY AND
TACTICS OF
DISTRIBUTIVE
BARGAINING
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distribution without the prior written consent of McGraw-Hill Education.

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THREE REASONS NEGOTIATORS SHOULD

BE FAMILIAR WITH DISTRIBUTIVE
BARGAINING
Independent situations require
knowing how this works in order to do
well
2. Need to know how to counter the
effects of the strategies
3. Every situation has the potential to
require skills at the claiming-value
stage
1.

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distribution without the prior written consent of McGraw-Hill Education.

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THE DISTRIBUTIVE BARGAINING

SITUATION
Goals of one party are in fundamental,

direct conflict to another party

Resources are fixed and limited
Maximizing ones own share of
resources is the goal for both parties

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distribution without the prior written consent of McGraw-Hill Education.

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THE DISTRIBUTIVE BARGAINING

SITUATION
Preparationset a
Target point, aspiration point
Walkaway, resistance point
Asking price, initial offer

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distribution without the prior written consent of McGraw-Hill Education.

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THE DISTRIBUTIVE BARGAINING SITUATION

Party A - Seller

Walkaway Point

Initial Offer
Walkaway Point

Target Point

Asking Price

Target Point

Party B - Buyer

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distribution without the prior written consent of McGraw-Hill Education.

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THE ROLE OF ALTERNATIVES TO

A NEGOTIATED AGREEMENT
Alternatives give the negotiator power

to walk away from the negotiation

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

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distribution without the prior written consent of McGraw-Hill Education.

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THE DISTRIBUTIVE BARGAINING SITUATION

Party A - Seller
Walkaway Point

Target Point

Asking Pric

Alternativ
e

Initial Offer
Walkaway
Point
Party
B - Buyer

Alternative
Target Point

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distribution without the prior written consent of McGraw-Hill Education.

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FUNDAMENTAL STRATEGIES
Push for settlement near opponents

resistance point
Get the other party to change their
resistance point
If settlement range is negative,
either:
Get the other side to change their

resistance point
Modify your own resistance point

Convince the other party that the

settlement is the best possible

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distribution without the prior written consent of McGraw-Hill Education.

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KEYS TO THE STRATEGIES

The keys to implementing any of the
four strategies are:
Discovering the other partys
resistance point
Influencing the other partys resistance
point

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distribution without the prior written consent of McGraw-Hill Education.

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FOUR PROPOSITIONS THAT

SUGGEST
HOW THE KEYS AFFECT THE
PROCESS

1. The higher the other partys estimate

of your cost of delay or impasse, the

stronger the other partys resistance
point will be.
2. The higher the other partys estimate
of his or her own cost of delay or
impasse, the weaker the other partys
resistance point will be.
Copyright 2015 McGraw-Hill Education. All rights reserved. No reproduction or
distribution without the prior written consent of McGraw-Hill Education.

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FOUR PROPOSITIONS THAT

SUGGEST
HOW THE KEYS AFFECT THE
PROCESS
3. The less the other party values an

issue, the lower their resistance point

will be.
4. The more the other party believes
that you value an issue, the lower
their resistance point may be.

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distribution without the prior written consent of McGraw-Hill Education.

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TACTICAL TASKS OF NEGOTIATORS

Assess outcome values and the

costs of termination for the other

party
Manage the other partys
impressions
Modify the other partys perceptions
Manipulate the actual costs of delay
or termination
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distribution without the prior written consent of McGraw-Hill Education.

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ASSESS THE OTHER PARTYS TARGET, RESISTANCE

POINT, AND COSTS OF TERMINATING
NEGOTIATIONS

Indirectly
Determine information opponent used to

set:
Target
Resistance points

Directly
Opponent reveals the information

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distribution without the prior written consent of McGraw-Hill Education.

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MANAGE THE OTHER PARTYS

IMPRESSIONS
Screen your behavior:
Say and do as little as possible
Direct action to alter impressions
Present facts that enhance ones position

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distribution without the prior written consent of McGraw-Hill Education.

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MODIFY THE OTHER PARTYS PERCEPTIONS

Make outcomes appear less attractive

Make the cost of obtaining goals

appear higher
Make demands and positions appear
more or less attractive to the other
party whichever suits your needs

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distribution without the prior written consent of McGraw-Hill Education.

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MANIPULATE THE ACTUAL COSTS OF

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 manipulations
One party is usually more vulnerable to
delaying than the other

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distribution without the prior written consent of McGraw-Hill Education.

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POSITIONS TAKEN
DURING NEGOTIATIONS
Opening offer
Where will you start?
Opening stance
What is your attitude?
Competitive? Moderate?

Initial concessions
Should any be made? If so, how large?

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distribution without the prior written consent of McGraw-Hill Education.

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POSITIONS TAKEN
DURING NEGOTIATIONS
The role of concessions
Without them, there is either capitulation or
deadlock
Patterns of concession making
The pattern contains valuable information

Final offers (making a commitment)

This is all I can do

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distribution without the prior written consent of McGraw-Hill Education.

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COMMITMENTS:
TACTICAL CONSIDERATIONS
Establishing a commitment
Three properties:
Finality
Specificity
Consequences

Preventing the other party from

committing prematurely
Their commitment reduces your flexibility

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distribution without the prior written consent of McGraw-Hill Education.

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WAYS TO CREATE A
COMMITMENT
Public pronouncement
Linking with an outside base
Increase the prominence of demands
Reinforce the threat or promise

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distribution without the prior written consent of McGraw-Hill Education.

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COMMITMENTS:
TACTICAL CONSIDERATIONS
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

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distribution without the prior written consent of McGraw-Hill Education.

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CLOSING THE DEAL

Provide alternatives (2 or 3 packages)
Assume the close
Split the difference
Exploding offers
Deal sweeteners

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distribution without the prior written consent of McGraw-Hill Education.

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DEALING WITH TYPICAL

HARDBALL TACTICS
Four main options:
Ignore them
Discuss them
Respond in kind
Co-opt the other party (befriend them)

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distribution without the prior written consent of McGraw-Hill Education.

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TYPICAL HARDBALL TACTICS

Good Cop/Bad Cop
Lowball/Highball
Bogey (playing up an issue of little

importance)
The Nibble (asking for a number of
small concessions to)

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distribution without the prior written consent of McGraw-Hill Education.

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TYPICAL HARDBALL TACTICS

Chicken
Intimidation
Aggressive Behavior
Snow Job (overwhelm the other party

with information)

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distribution without the prior written consent of McGraw-Hill Education.

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SUMMARY
Negotiators need to:
Set a clear target and resistance points
Understand and work to improve their
BATNA
Start with good opening offer
Make appropriate concessions
Manage the commitment process
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distribution without the prior written consent of McGraw-Hill Education.

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