Integrative vs Distributive Negotiations

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Questions and Answers

What are the potential reasons for impasses in negotiations?

Fixed pie bias and emotional escalation (correct)

High reservation prices by both parties

Shared interests between the buyer and seller

Clear communication between the parties

What is meant by 'fixed pie bias' in negotiations?

The tendency to focus solely on monetary compensation

The assumption that the negotiators can only agree on a single price

The belief that the other party's interests are completely opposed to one's own (correct)

The view that all parties will automatically be satisfied with the outcome

How can emotions affect negotiations?

They often lead to further commitments to failing strategies (correct)

They result in more open information sharing

They are irrelevant to the negotiation process

They can enhance clarity and agreement

Which of the following is NOT a reason for failing to realize integrative potential in negotiations?

Over-communication of interests Signup and view all the answers

What might be included in solutions during a negotiation?

A job guarantee and a line of credit Signup and view all the answers

What distinguishes positions from interests in negotiations?

Positions are what you ask for, whereas interests explain why you ask for it. Signup and view all the answers

Which of the following represents the interests of the VP Operations?

Managers to support expansion Signup and view all the answers

What is the reservation price set by the VP Operations?

$160,000 Signup and view all the answers

What is the total interest cost that the Restaurant Owner is considering for the trip?

$190,000 Signup and view all the answers

What might happen if the VP Operations does not secure the restaurant?

Lose clients and potentially harm reputation. Signup and view all the answers

What key benefit does the Restaurant Owner seek upon return from their trip?

Job security. Signup and view all the answers

How does the Restaurant Owner's offer compare with the VP Operations' reservation price?

The Owner's offer is higher than the VP's reservation price. Signup and view all the answers

What is the primary reason interests are crucial in negotiations?

They enable bridging a deal between parties. Signup and view all the answers

What is the primary advantage of making late first offers in integrative negotiations?

It facilitates the discovery of creative agreements. Signup and view all the answers

Which effect does delaying the first offer have on information exchange in negotiations?

It allows for greater information exchange. Signup and view all the answers

What is meant by 'perspective taking' in negotiations?

Perceiving a situation from another individual’s point of view. Signup and view all the answers

How does delaying the first offer impact the focus of negotiations?

It reduces the focus on early positions and promotes discussing interests. Signup and view all the answers

What scale is used to measure how well the interests of the other party are met?

1 to 7 scale. Signup and view all the answers

Which of the following is NOT a benefit of making late first offers?

It encourages preemptive offers. Signup and view all the answers

What does the concept of flexibility refer to in the context of late first offers?

Encouraging open dialogue about interests and positions. Signup and view all the answers

Why is taking the other party's perspective beneficial in negotiations?

It builds empathy and may lead to creative solutions. Signup and view all the answers

What is a key benefit of negotiators mimicking their counterparts?

It creates more value in negotiations. Signup and view all the answers

Which strategy focuses on understanding the other party's priorities?

Take their perspective Signup and view all the answers

Why should negotiators be cautious about the level of mimicry used during negotiations?

Status differences should be considered. Signup and view all the answers

What does a handshake typically signal in a negotiation context?

Cooperative intent. Signup and view all the answers

Which of the following strategies is NOT listed as helpful for creating value in negotiations?

Provide personal opinions Signup and view all the answers

Asking questions during negotiations serves what primary purpose?

To gather information relevant to both parties. Signup and view all the answers

What outcome is associated with negotiators who ask thoughtful questions?

They are likely to reach deals more often. Signup and view all the answers

What should negotiators avoid when using mimicry as a strategy?

Overly imitating their opponents. Signup and view all the answers

What is a potential hindrance to achieving integrative negotiations?

Fixed pie bias Signup and view all the answers

Which strategy can enhance integrative negotiations?

Perspective taking Signup and view all the answers

Which of the following does NOT represent an obstacle in integrative negotiations?

Effective questioning Signup and view all the answers

What approach should be avoided to foster integrative negotiation?

High-pressure tactics Signup and view all the answers

What is one of the best ways to build trust during negotiations?

Using mimicry Signup and view all the answers

What benefit does asking questions provide in negotiations?

It reveals priorities. Signup and view all the answers

What was the primary observation made by the student during his visit to AfterXroom?

Most customers were 35 years and older. Signup and view all the answers

What challenge did Jeff, the stylist, mention regarding their customer base?

They find it difficult to attract SMU students due to pricing. Signup and view all the answers

What role did the student acquire after offering to promote the salon?

Salon Ambassador Signup and view all the answers

What was one of the benefits the student received as the Salon Ambassador?

A $15 discount on the initial haircut Signup and view all the answers

Which of the following is NOT a benefit listed for customers who quoted the ambassador's name?

Free hair service upgrades Signup and view all the answers

What is a characteristic of integrative negotiations mentioned?

They focus on mutual benefit. Signup and view all the answers

How long was the initial term for the Salon Ambassador position?

Two months Signup and view all the answers

Study Notes

Integrative Negotiations

Integrative negotiations differ from distributive negotiations. In distributive, opposing preferences maximize one's individual gain ("slicing the pie"). Integrative approaches seek to maximize individual and joint gain ("increasing the pie").
Common interests exist in integrative negotiations.

Distributive Negotiations

Distributive negotiations aim to maximize one's gain by leveraging opposing preferences.
Key strategies include:
- Improving BATNA (best alternative to a negotiated agreement), maximizing value, and increasing certainty.
- Making ambitious, precise first offers to set the tone and anchor the opponent.
- Using qualitative anchors (e.g., highlighting pros/cons).
- Utilizing decreasing concessions to signal reaching the bottom line.
- Only revealing strong BATNA, but not reservation price.

Today's Class

Focused on integrative negotiations.
Included an exercise ("Holy Crab").
Covered pitfalls in integrative negotiations.
Discussed integrative strategies.

Exercise "Holy Crab"

Students engaged in a negotiation exercise.
Preparation, negotiation and class continued phase of exercise.

Your Negotiation Partner

Provided role information for different groups (G1, G2, G3).

Role Information (1/2) and (2/2)

Provided details like BATNA (Best Alternative to a Negotiated Agreement), Reservation Price, and Interests for both VP Operations (buyer) and Restaurant Owner (seller).
- Example: VP's BATNA: $200k to build a new restaurant/Lose clients, reservation price: $160,000.

Bargaining Zone

The area between the buyer and seller's reservation prices in a negotiation. A negative zone indicates a potential lack of overlap in interests and possible impasse.

Interests and Positions

Identifying and focusing on the underlying interests, not just the positions, is crucial for value creation in integrative negotiations.

Value Creation Strategies

The following strategies are important in integrative negotiations:
- Delaying initial offers.
- Understanding the other party's perspective.
- Building trust (being vulnerable, mimicking).
- Using handshakes to signal cooperative intent.

Asking Questions

Useful for uncovering priorities, revealing interests, and increasing rapport, which are helpful to create dealmaking potential.
Asking effective questions leads to greater dealmaking. Examples like: "Why is this important to you?" "How would this help you?" "Are there other options to achieve this?"

Next Session

Provide feedback to partner.
Research and develop an additional integrative strategy.
Submit strategies and email to instructor.
Read a negotiation article.

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Description

This quiz explores the differences between integrative and distributive negotiations, emphasizing strategies and concepts such as BATNA and common interests. Students will engage with key techniques that impact negotiation outcomes, enhancing understanding of how to maximize both individual and joint gains in negotiations.