McGraw-Hill/Irwin Copyright © 2010 by The McGraw-Hill Companies, Inc. All rights reserv ed. CHAPTER TWO Strategy and Tactics of Distributive Bargaining Three Reasons Negotiators Should Be Familiar with Distributive Bargaining 1. 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 2-3 The Distributive Bargaining Situation • 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 for both parties 2-4 The Distributive Bargaining Situation Preparation—set a • Target point, aspiration point • Walkaway, resistance point • Asking price, initial offer 2-5 The Distributive Bargaining Situation Party B - Buyer Party A - Seller Walkaway Point Target Point Asking Price Initial Offer Target Point Walkaway Point 2-6 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 2-7 The Distributive Bargaining Situation Party B - Buyer Party A - Seller Walkaway Point Target Point Asking Price Initial Offer Target Point Walkaway Point Alternative Alternative 2-8 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: – 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 2-9 Keys to the Strategies The keys to implementing any of the four strategies are: • Discovering the other party’s resistance point • Influencing the other party’s resistance point 2-10 . rights reserv ed. CHAPTER TWO Strategy and Tactics of Distributive Bargaining Three Reasons Negotiators Should Be Familiar with Distributive Bargaining 1 Situation • Goals of one party are in fundamental,direct conflict to another party • Resources are fixed and limited • Maximizing one’s own share of resources