We examined the basic structure of competitive or distributive bargaining situations and some of the strategies and tactics used in distributive bargaining. Distributive bargaining begins with setting your own opening, target, and resistance points. All points are important, but the resistance points are the most critical. The spread between the parties’ resistance points defines the bargaining range.
It is rare that a negotiation includes only one item; more typically, there is a set of items, referred to as a bargaining mix. Each item in a bargaining mix can have opening, target, and resistance points. The bargaining mix may provide opportunities for bundling issues together, trading off across issues, or displaying mutually concessionary behavior.
Examining the structure of distributive bargaining reveals many options for a negotiator to achieve a successful resolution; most of which fall within two broad efforts: to influence the other party’s belief about what is possible and to learn as much as possible about the other party’s position, particularly about the resistance points. The negotiator’s basic goal is to reach a final settlement as close to the other party’s resistance point as possible. Negotiators work to gather information about the opposition and its positions; to convince members of the other party to change their minds about their ability to achieve their own goals; and to promote their own objectives as desirable, necessary, or even inevitable.
Distributive bargaining is basically a conflict situation, wherein parties seek their own advantage, in part through concealing information, attempting to mislead, or using manipulative actions. All these tactics can easily escalate interaction from calm discussion to bitter hostility. Yet negotiation is the attempt to resolve a conflict without force, without fighting. Further, to be successful, both parties to the negotiation must feel at the end that the outcome was the best that they could achieve and that it is worth accepting and supporting. Effective distributive bargaining is a process that requires careful planning, strong execution, and constant monitoring of the other party’s reactions.
Discussion Questions (Original post should be 200 words):
Why is it advantageous to make an extreme opening offer?
What characteristics of original offer, opening stance and opening concession would signal a position of firmness? Of flexibility?
What is the disadvantage of letting the absence of further concessions convey the message of the final offer?
What are the strategies for responding to hardball tactics?
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