Why is it necessary for all negotiators to be prepared to use and/or respond to distributive bargaining tactics?

The basic reason is that, for many novice as well as some experienced negotiators, distributive bargaining is the heart of negotiation. For them, the word negotiation brings to mind the classic car-buying situation: a single-deal negotiation in which only one issue (price) is key, and both sides view the transaction as a zero-sum game. Thus, many negotiators will view any situation as distributive and therefore will use distributive strategies and tactics, even though it may not best serve their long-term interests. In general, the distributive bargaining model is identified by three components: (1) the parties involved view each other as adversaries; (2) the objective of both parties is to maximize their self-interest or their share of the pie; and (3) they are only concerned about the current negotiation, interacting with each other as though they have no past relationship and expect no future relationshipand thus are willing to use tactics they might not use if they had a continuing relationship.3 It is important to recognize, however, that sometimes the parties do have a past and a future relationshipas in labormanagement contract negotiationsbut they use the distributive model in spite of this fact and bargain strictly as adversaries, trying to get a maximum share of the pie, seemingly unmindful that in later months or years they may suffer from the retaliatory tactics of the other party, who has been waiting to even the score.

Negotiation Skills
In this chapter we present five negotiation skills that can be learned and developed by the novice negotiator, and applied to the end-ofchapter Learning Exercise, Buying a House. Skill 3.1 Recognize a distributive bargaining situation by the three key components and therefore prepare to utilize appropriate strategies and tactics to reach a desired settlement. Begin by determining a reservation price to prevent the heat of the moment from causing you to agree to an unacceptable offer. Learn how to use bracketing of the other partys offer to achieve your desired outcome in a distributive negotiation. Recognize and use common social norms and accepted practices to evaluate offers, make counteroffers, and reach a settlement point. Learn the important role of framing offers to influence how others perceive and respond to offers.

Skill 3.2

Skill 3.3 Skill 3.4

Skill 3.5

Chapter 3

Distributive Bargaining

55

4. What is your resistance point? _______________________________________________________________________ 5. What is your best guess of the resistance point of the other party? _______________________________________________________________________ 6. Given the answers to questions 4 and 5, what is the estimated ZOPA? _______________________________________________________________________ 7. Which of the norms presented in this chapter (Fairness: equality, equity, need; Reciprocity; Good faith; Maintaining the status quo) are you most likely to use in deciding and stating your offer(s)? _______________________________________________________________________ 8. Can you anticipate how you might reframe the position of the other party? Ask why: _______________________________________________________________ Ask why not: ___________________________________________________________ _ Ask what if: ____________________________________________________________ Ask for advice: __________________________________________________________ 9. How can you best defend against an excessive anchor set by the opening offer of the other party? _______________________________________________________________________ 10. Do you have a possible future relationship with the other party? If so, how should you protect it while negotiating this exchange? _______________________________________________________________________ _______________________________________________________________________

L EARNING E XERCISE : B UYING

H OUSE

The purpose of this exercise is to apply the five negotiation skills presented in this chapter to an actual negotiation situation. You wish to buy a home in a particular neighborhood because you like it and it is in the best school district. Your family needs at least four bedrooms, 21/2 baths, and a two-car garage. At this time you have twice viewed one house that meets all of your needs and is located at 5656 Valley Oak Court. Your agent has provided you with the information on this house as well as five other houses in the neighborhood (A through E in the table below) that meet your criteria and have sold in the past year. The house on Valley Oak Court is listed for $329,000. Review the following information and answer these skills questions: Skill 3.1: Is this a distributive bargaining situation? Why or why not? Skill 3.2: How will you determine your reservation price? Skill 3.3: What initial offer should you make to use bracketing and achieve your target price of $310,000? 80
Chapter 3 Distributive Bargaining

Skill 3.4: Which norm(s) can you utilize in presenting your initial offer? Skill 3.5: How can you frame an initial offer that incorporates the norm(s) you are applying?
Price (000) ??? $359 $349 Square Feet 3,600 3,900 4,100 Bed Rooms 4 4 4 Finished Basement No Yes Yes Time on Market 6 mo. 2 mo. 3 mo.

House 5656 Valley Oak A. B.

Rooms 10 12 12

Baths 2.5 3.5 2.5

Garages 2 3 2

Miscellaneous Large wooded lot, pantry, all brick River view, central vac, large pantry Large wooded lot, cul-de-sac, crown molding Large deck w/arbor, Corian counters, alarm Wooded lot, pantry, fans Private yard, brick, custom shelves

C.

$319

3,600

13

Yes

6 mo.

D. E.

$275 $246

3,400 3,100

9 8

4 4

No No

2.5 2.5

2 2

8 mo. 8 mo.

E NDNOTES
1. R. E. Walton and R. B. McKersie, A Behavioral Theory of Labour Negotiations (New York: McGraw-Hill, 1965). 2. W. David Rees and Christine Porter, Negotiation: Mystic Art or Identifiable Process? Part 2, Industrial and Commercial Training 29 (1997): 153157. 3. Susan Cross and Robert Rosenthal, Three Models of Conflict Resolution: Effects on Intergroup Expectancies and Attitudes, Journal of Social Issues 55 (Fall 1999): 561580. 4. Howard Raiffa, The Art and Science of Negotiation (Cambridge, MA: Harvard University Press, 1982), 4465. 5. Ibid. 6. Kathleen L. McGinn, Planning to Play It by Ear, Negotiation 1 (November 2003): 46. 7. David A. Lax and James K. Sebenius, Anchoring Expectations, Negotiation 7 (September 2004): 911. 8. Adam D. Galinsky, Should You Make the First Offer? Negotiation 7 (July 2004): 14. 9. Charles Craver, The Intelligent Negotiator (Roseville, CA: Prima, 2002), 41. 10. Roger Dawson, Secrets of Power Negotiating, 2nd ed. (Franklin Lakes, NJ: Career Press, 2001), 1819. 11. Craver, The Intelligent Negotiator, 4142. 12. Jared R. Curhan, Margaret A. Neale, Lee Ross, and Jesse Rosencranz-Englemann, The O. Henry Effect: The Impact of Relational Norms on Negotiation Outcomes, Proceedings, Annual Meeting of the Academy of Management, Denver, Colorado, 2002, available at the Web site of the Social Science Research Network, http://ssrn.com/abstract=321448. 13. Harvard Business Essentials: Negotiation (Boston: Harvard Business School Press, 2003), 110114. 14. G. Richard Shell, Bargaining for Advantage (New York: Penguin Books, 1999), 3951. 15. Being Fair and Getting What You Want, Negotiation 7 (February 2004): 12. 16. J. Stacey Adams, Toward an Understanding of Inequity, Journal of Abnormal Psychology 67 (1963): 422436. 17. Roger Fisher, William Ury, and Bruce Patton, Getting to Yes, 2nd ed. (New York: Penguin Books, 1991), 153157. 18. Keith Allred, The High Cost of Low Trust, Negotiation 7 (June 2004): 14. 19. Harvard Business Essentials: Negotiation, 26. Chapter 3 Distributive Bargaining

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