Negotiation Section 01: Negotiation Fundamentals

Negotiation Section 01: Negotiation Fundamentals
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Negotiation Section 01: Negotiation Fundamentals Chapter 02: Strategy and Tactics of Distributive Bargaining 2019 McGraw-Hill Education. All rights reserved. Authorized only for instructor use in the classroom. No reproduction or further

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Negotiation Section 01:
Negotiation Fundamentals Chapter 02:
Strategy and Tactics of Distributive Bargaining © 2019 McGraw-Hill Education. All rights reserved. Authorized only for instructor use in the classroom. No reproduction or further distribution permitted without the prior written consent of McGraw-Hill Education.<br>
02
The Distributive Bargaining Situation The target point is a negotiator’s optimal goal.
Also called a negotiator’s aspiration.
The resistance point is a negotiator’s bottom line.
Also called a reservation price.
The asking price is the initial price set by a seller.
The buyer may counter with their initial offer.
The spread between resistance points – the bargaining range, settlement range, or zone of potential agreement – is important.
When the buyer’s resistance point is above the seller’s, there is a positive bargaining range. 2<br>
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The Role of Alternatives to a Negotiated Agreement What will you do if no agreement is reached?
What is your best alternative to a negotiated agreement – BATNA?
What is your worst alternative to a negotiated agreement – WATNA?
Alternatives give negotiators the power to walk away.
Negotiators can set their goals higher and make fewer concessions.
Good bargainers know their realistic alternatives before starting discussions and try to improve their alternatives during negotiation.
Strong BATNAs can influence how a negotiation unfolds.
Negotiators with strong BATNAs usually make the first offer.
Benefits of a good BATNA are strongest when the bargaining range is small and negotiations are competitive or unlikely to reach agreement. 3<br>