N02: Strategy and Tactics of Distributive Bargaining
After learning about the process of negotiation, now negotiator needs to understand strategies and tactics of distributive bargaining in order to get a better deal.
Distributive bargaining is about compromise and accepting that not all negotiations can be in a win-win situation. It’s used when resources are fixed and limited, and parties are simply negotiating on price. It is often called competitive, or win-lose bargaining. In other words, in a distributive situation, the goals of one party are usually conflict with the goals of the other party. Every dollar that you reduce the price by or increase it by is simply a direct ‘win’ for you and a ‘lose’ for the other party.
The negotiation is for ‘claiming value’, therefore, in this chapter, negotiator will learn how to develop effective distributive bargaining process which requires careful planning, strong execution, and constant monitoring of the other party’s reaction. Also, negotiator will learn and understand these strategies to successfully reach the claiming value state of any negotiation and resolve the conflict without a problem.
1.What are the important tactical tasks concerned with targets, resistance point, and the cost of terminating negotiations for a negotiator in a distributive bargaining situation?
1.assess the other's party target, resistance point, and the cost of terminating negotiations; Indirect assessment/Direct assessment.
2. Manage the other party's impression; screening activities/direct action to alter impressions.
3. Modify the other party's perceptions
4. Manipulate the actual costs of delay or termination; Disruptive action/alliance with outsiders/schedule manipulation.
2.Why Is Distributive Bargaining Important?
Distributive bargaining is important because there are some disputes that cannot be solved in any other way they are inherently zero-sum. If the stakes are high, such conflicts can be very resistant to resolution. For example, if budgets in a government agency must be cut 30 percent, and people's jobs are at stake, a decision about what to cut is likely to be very difficult. If the cuts are small enough that the impact on employees will be minor, however, such distributive decisions can be made more easily.
Even in cooperative negotiations, distributive bargaining will come into play. Distributive bargaining and integrative bargaining are not mutually exclusive negotiation strategies. Integrative bargaining is a good way to make the pie (joint value) as large as it can possibly be, but ultimately the parties must distribute the value that was created. If they are able to expand the pie enough, distribution is easy. If there is still not enough to give each side what it wants, however, distributive negotiation will be more difficult.
3. What is the Process and Strategy in Distributive Negotiations?
The process of distributive negotiation involves the interplay of one's walk away value the minimum or maximum one can accept before "walking away" from the deal and the adversary's walk away value. The trick is to get an idea of your opponent's walk away value and then try to negotiate an outcome that is closer to your own goals then theirs. Whether or not parties achieve their goals in distributive bargaining depends on the strategies and tactics they use.