1. ESSENTIALS OF NEGOTIATION SIXTH EDITION
ROY J. LEWICKI
BRUCE BARRY
DAVID M. SAUNDERS
© 2016 by McGraw-Hill Education. This is proprietary material solely for authorized instructor use. Not authorized for sale or distribution in any manner. This document may not be copied, scanned, duplicated, forwarded, distributed, or posted on a website, in whole or part.

2. Chapter 2 Strategy and Tactics of Distribution Bargaining
© 2016 by McGraw-Hill Education. This is proprietary material solely for authorized instructor use. Not authorized for sale or distribution in any manner. This document may not be copied, scanned, duplicated, forwarded, distributed, or posted on a website, in whole or part.

3. Three Reasons Negotiators Should Be Familiar with Distributive Bargaining
Independent situations require knowing how this works in order to do well
Need to know how to counter the effects of the strategies
Every situation has the potential to require skills at the “claiming-value” stage
© 2016 by McGraw-Hill Education. This is proprietary material solely for authorized instructor use. Not authorized for sale or distribution in any manner. This document may not be copied, scanned, duplicated, forwarded, distributed, or posted on a website, in whole or part.

4. 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
© 2016 by McGraw-Hill Education. This is proprietary material solely for authorized instructor use. Not authorized for sale or distribution in any manner. This document may not be copied, scanned, duplicated, forwarded, distributed, or posted on a website, in whole or part.

5. The Distributive Bargaining Situation
Preparation—set a
Starting/asking price, initial offer
Target point, aspiration point
Walkaway, resistance point
Alternative outcomes
© 2016 by McGraw-Hill Education. This is proprietary material solely for authorized instructor use. Not authorized for sale or distribution in any manner. This document may not be copied, scanned, duplicated, forwarded, distributed, or posted on a website, in whole or part.

6. The Distributive Bargaining Situation (extended view)
Party B - Buyer
Party A - Seller
Walkaway Point Target Point Asking Price
Initial Offer Target Point Walkaway Point
© 2016 by McGraw-Hill Education. This is proprietary material solely for authorized instructor use. Not authorized for sale or distribution in any manner. This document may not be copied, scanned, duplicated, forwarded, distributed, or posted on a website, in whole or part.

7. 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
© 2016 by McGraw-Hill Education. This is proprietary material solely for authorized instructor use. Not authorized for sale or distribution in any manner. This document may not be copied, scanned, duplicated, forwarded, distributed, or posted on a website, in whole or part.

8. The Distributive Bargaining Situation (extended view with alternatives)
Party A - Seller
Walkaway Point Target Point Asking Price
Alternative
Alternative
Initial Offer Target Point Walkaway Point
Party B - Buyer
© 2016 by McGraw-Hill Education. This is proprietary material solely for authorized instructor use. Not authorized for sale or distribution in any manner. This document may not be copied, scanned, duplicated, forwarded, distributed, or posted on a website, in whole or part.

9. 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
© 2016 by McGraw-Hill Education. This is proprietary material solely for authorized instructor use. Not authorized for sale or distribution in any manner. This document may not be copied, scanned, duplicated, forwarded, distributed, or posted on a website, in whole or part.

10. Keys to the Strategies The keys to implementing any strategies are:
Discovering the other party’s resistance point
Influencing the other party’s resistance point
© 2016 by McGraw-Hill Education. This is proprietary material solely for authorized instructor use. Not authorized for sale or distribution in any manner. This document may not be copied, scanned, duplicated, forwarded, distributed, or posted on a website, in whole or part.

11. Four Propositions That Suggest How the Keys Affect the Process
The higher the other party’s estimate of your cost of delay or impasse, the stronger the other party’s resistance point will be.
The higher the other party’s estimate of his or her own cost of delay or impasse, the weaker the other party’s resistance point will be.
© 2016 by McGraw-Hill Education. This is proprietary material solely for authorized instructor use. Not authorized for sale or distribution in any manner. This document may not be copied, scanned, duplicated, forwarded, distributed, or posted on a website, in whole or part.

12. Four Propositions That Suggest How the Keys Affect the Process
The less the other party values an issue, the lower their resistance point will be.
The more the other party believes that you value an issue, the lower their resistance point may be.
© 2016 by McGraw-Hill Education. This is proprietary material solely for authorized instructor use. Not authorized for sale or distribution in any manner. This document may not be copied, scanned, duplicated, forwarded, distributed, or posted on a website, in whole or part.

13. Tactical Tasks of Negotiators
Assess the other party’s target and resistance points and the costs of termination for the other party
Manage the other party’s impressions
Modify the other party’s perceptions
Manipulate the actual costs of delay or termination
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14. Assess the Other Party’s Target, Resistance Point, and Costs of Terminating Negotiations
Indirect Assessment
Determine information opponent used to set:
Target
Resistance points
Direct Assessment
Opponent reveals the information
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15. Manage the Other Party’s impressions
Screen your behavior:
Say and do as little as possible
Direct action to alter impressions
Present facts that enhance one’s position
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16. Modify the Other Party’s 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
© 2016 by McGraw-Hill Education. This is proprietary material solely for authorized instructor use. Not authorized for sale or distribution in any manner. This document may not be copied, scanned, duplicated, forwarded, distributed, or posted on a website, in whole or part.

17. 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
© 2016 by McGraw-Hill Education. This is proprietary material solely for authorized instructor use. Not authorized for sale or distribution in any manner. This document may not be copied, scanned, duplicated, forwarded, distributed, or posted on a website, in whole or part.

18. Positions Taken During Negotiations
Opening offers
Where will you start?
Opening stance
What is your attitude?
Competitive? Moderate?
Initial concessions
Should any be made? If so, how large?
© 2016 by McGraw-Hill Education. This is proprietary material solely for authorized instructor use. Not authorized for sale or distribution in any manner. This document may not be copied, scanned, duplicated, forwarded, distributed, or posted on a website, in whole or part.

19. 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.” or “This is as far as I can go.”
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20. Closing the Deal Provide alternatives (2 or 3 packages)
Assume the close
Split the difference
Exploding offers
Deal sweeteners
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21. Dealing with Typical Hardball Tactics
Four main options for responding:
Discuss them
Ignore them
Respond in kind
Co-opt the other party (befriend them)
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22. 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 closing the deal)
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23. Typical Hardball Tactics
Chicken
Intimidation
Aggressive Behavior
Snow Job (overwhelm the other party with information)
© 2016 by McGraw-Hill Education. This is proprietary material solely for authorized instructor use. Not authorized for sale or distribution in any manner. This document may not be copied, scanned, duplicated, forwarded, distributed, or posted on a website, in whole or part.