Distributive Bargaining Basics

· Play your cards close to your chest - Give little or no information to the other side. The less they know about our interests as to why we want to make the purchase, our preferences, or the point at which we’d decline to deal, the better our position. Expressing eagerness or need, reveals a weakness which could be exploited to our disadvantage.

· The opposite is equally true - Try to pry as much information from the other side. Any additional information that we uncover can be used as leverage to negotiate a better deal.

· The only thing you should ever tell - The only information we should ever reveal are those alternative options, such as other sellers, which shows we are prepared to walk from the negotiation whenever it suits us.

· Let them make the first offer - Whatever is used as the first offer will generally act as an anchor upon which the rest of the negotiation will revolve. Try to get the other side to set the stage from which to start.

· Be realistic - Being too greedy or too stingy will likely result in no agreement, so keep it real.

Integrative Negotiations - Everybody Wins Something (usually) The word integrative means to join several parts into a whole. Conceptually, this implies some cooperation, or a joining of forces to achieve something together. Usually involves a higher degree of trust and a forming of a relationship. Both parties want to walk away feeling they’ve achieved something which has value by getting what each wants. Ideally, it is a twofold process.

In the real world of business, the results often tilt in favor of one party over the other because, it’s unlikely that both parties will come to the table at even strength, when they begin the talks.

Nonetheless, there are many advantages to be gained by both parties, when they take a cooperative approach to mutual problem solving. The process generally involves some form or combination of making value for value concessions, in conjunction with creative problem solving. Generally, this form of negotiation is looking down the road, to them forming a long term relationship to create mutual gain. It is often described as the win-win scenario.

Integrative Negotiation Basics

· Multiple Issues - Integrative negotiations usually entails a multitude of issues to be negotiated, unlike distributive negotiations which generally revolve around the price, or a single issue. In integrative negotiations, each side wants to get something of value while trading something which has a lesser value.

· Sharing - To fully understand each other’s situation, both parties must realistically share as much information as they can to understand the other’s interests. You can’t solve a problem without knowing the parameters. Cooperation is essential.

· Problem Solving - Find solutions to each other’s problems. If you can offer something of lesser value which gives your counterpart something which they need, and this results in you realizing your objective, then you have integrated your problems into a positive solution.

· Bridge Building - More and more businesses are engaging in long term relationships. Relationships offer greater security.

We use the two types of negotiation described above all the time. Occasionally, these two different forms of negotiation even overlap. By understanding their nature, we will be better prepared when faced with different situations. By learning more, we can improve both our interpersonal and professional relationships, through an increased awareness of the negotiation process utilized in our everyday lives [20, 45].

POST-LECTURE QUESTIONS:

1. What qualities make a good negotiator?

2. Do you have to negotiate? Do you like negotiating? Why/Why not?

3. What do you think is the best way to negotiate with someone who has a stronger bargaining position than yourself?

4. What are the normal social rules in your country in the context of a buyer-customer negotiation?

5. What types of negotiations do you know?

6. Is every negotiation potentially a Win-Win one?

7. Do you think people should tell the complete truth when negotiating?

8. Think of some recent high-level negotiations in your country? What stages did they go through?

 

EXERCISES and ACTIVITIES

Situations and negotiators

Draw a line from each word on the left to a word on the right to make a word pair. Then use your word pairs to complete the sentences below.

eleventh labour bargainingco llective mutual bargaining

chip dispute advantage hour bargaining

 

a) This … is getting worse and now seems likely to lead to a strike.

b) We think that this compromise is to our ….

c) Everyone is hoping that these … discussions will be successful.

d) The high level of public support is a powerful … for the firefighters.

e) I believe that … is the right way to reach agreement about teachers’ salaries.

Decide which of the alternatives (A-E) each speaker is talking about. Write the letter of your answer in the box at the end of the sentence. You will have to use some alternatives more than once.

1. ‘We agree that when the new company is formed, there will be no forced redundancies.’
2. ‘We’ve agreed to a rise of 2.5%, but the union also wants a minimum salary of £ 20, 000.’
3. ‘If the US taxes our steel exports, we will increase the tax on goods from the US.’
4. ‘We start by asking for a very high price, then we negotiate down to a reasonable level.’
5. ‘If we order 10, 000 units from you, what discount will you offer us? ’
6. ‘The President of Energon will head the company and I have agreed to stay on as VP.’
7. ‘The employers’ offer is a joke. Our members deserve at least 8% this year.’
A. trade dispute В. merger negotiations С. customer-supplier negotiations D. wage negotiations E. bargaining tactic

 

 

The statements below are about negotiations. Write one word in the gap to complete each statement. The first letter is given in each case.

a) ‘Rafi is a very tough n _ _ _ _ _ _ _ _ _ and always gets the best price.’

b) ‘These d _ negotiations could easily fail.’

c) ‘This p _ _ dispute has been going on for over two months now.’

d) ‘I’d say that the employers have all the bargaining p and will win in the end.’

e) ‘Last m negotiations are going on to avoid an all-out strike.’

 

Negotiations: preparing

In each of the numbered sentences (1-5) there is one word which is wrong. Circle the mistake and write the correct word at the end of the line.

a) Good morning everyone. Perhaps we should start the meeting.

b) Welcome to our offices. I must admit that it is nice to be on home venue...............

c) Our presentatives are Julia Gold and Sam Western. Oh, and me...............

d) I think that we all know the foreground to these talks...............

e) We’ve got a very tight tabletime today and a lot to discuss...............

f)So, unless you have any questions, let’s get out to business..............

 

Draw a line from each word on the left to a word on the right to make a word pair. (There is one word that you don’t have to use.) Then use your word pairs to complete the sentences below.

kick fallback neutral relaxed negotiating small

atmosphere ground priority talk off position team

 

 

a) We will hold talks on … so neither side has an advantage.

b) We’ll … the discussion by setting out our needs.

c) Our … is very experienced and fully understands the process.

d) We believe the talks will be held in a … with no real arguments.

e) We start with … over coffee, but then it gets serious.

f) We have asked for 10%, but we do have a … if that is turned down.

 

Find the word that completes each tip on negotiating. The first and last letters of the answers are given.

o									s
p									s
a					a
b									s
e									e

a) Work out what you want to achieve: your ….

b) Decide on the most important things: your….

c) Have a clear timetable for the talks: an....

d) Don’t waste time: get down to....

e) Know the ‘dos and don’ts’ of negotiating: its....

 

Furthering negotiations

The statements below are about negotiations. Write one word in the gap to complete each statement.

a) ‘She asked a lot of p _ _ _ _ _ _ questions about the new contract.’

b) ‘We had to h _ _ _ _ _over the price, but eventually got them for £ 20 each.’

c) ‘We’ll pay $200 onс _ _ _ _ _ _ _ _that you deliver by April 1st.’

d) ‘We will give you a 5% discount asl _ _ _ as you order more than 100 boxes.’

e) ‘We willс _ _ _ _ _ _ _ increasing our offer, provided you agree to call off the strike.’

 

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