OAM 432 Exam 1 Latest Update Graded A+

OAM 432 Exam 1 Latest Update Graded A+ distributive negotiation A negotiation in which the goals of the negotiating parties are in direct opposition, often involving a single issue zero-sum/fixed-pie structure if someone gets more of the pie, the other by definition gets a smaller portion reservation price point at which you're indifferent to achieving an agreement or walking away (lowest bar) BATNA best alternative to negotiated agreement; best outside option - highest source of leverage in a distributive negotiation ZOPA zone of possible agreement -- range in which buyer and seller's RPs overlap - buyer's RP = seller's RP - if ^ false -- don't make a deal agreement bias false tendency to believe that it's better to make a deal regardless of the circumstances of whether it makes sense to or not target price your ideal outcome anchoring theory that first offers influence outcomes more than any other factor because negotiating parties use it as a reference point and do not sufficiently adjust from it first offer should be a step BEYOND target price + good rationale + supportive points when to NOT make first offer - if you don't know the other party's BATNA - if you care about long-term relationship how to respond to ridiculous first offers - don't acknowledge the offer/suggest adjustment - quickly re-anchor with aggressive counteroffer + strong rationale - steer convo away from pure #s integrative negotiations negotiations typically involving multiple issues & longer-term horizon in which parties have differing priorities or different value weights maximizing value on integrative issues has potential to offset losses on poor performance in distributive issues variable-sum structure scenario in which both parties of a negotiation are looking for ways to "expand the pie"/integrate goals to create mutual gains (NOT meeting in the middle) pareto-efficiency describes a negotiated agreement in which all of the issues have been allocated in the most efficient manner that "maximizes the pie" - one party can only achieve a better outcome by hurting the other party - achieved via trusting relationship with counterpart, sharing interests & priorities, and making mutually beneficial tradeoffs on lower-priority issues - does NOT necessarily create equitable agreements scoring system allows for assessment of trade-offs & areas of flexibility 1. weigh issues you care about in terms of %s 2. identify options available for each issue 3. assign a point value to each option for each issue 4. calculate "score" of each option: score = point value X issue weight contingent contracts When terms are not final and are based on certain events or conditions occurring in the future PROS - allows parties to leverages differences to create joint value - motivates continued performance - points out potentially insincere parties LIMITATIONS - future terms must be measurable by both parties - future terms must not be manipulatable - risky if other side has more info than you MESO multiple equivalent simultaneous offers - presentation of different packages of equal value to the other party to gauge counterpart's preference (anchoring with perception of flexibility) dispute a claim made by one party that is rejected by the other - often involves heated emotion -- misunderstandigs - about minimizing losses - parties' BATNAs are linked self-serving bias tendency to hold a more favorable view of ourselves relative to others fundamental attribution error related to self-serving bias: - tendency to attribute positive events happening to oneself to internal factors while attributing negative events to external factors (reversed when explaining about other people) naive realism tendency to believe that we see the world objectively and that people will come to same conclusions as long as they're presented with same info -- those who disagree must be wrong, uninformed, or irrational dispute resolution framework 1. Interests 2. Rights 3. Power Interests -BEST approach to reach mutually beneficial agreements, outcome satisfaction, & continued relationships -focuses on: needs, desires, concerns -process: learn about others' concerns to create value for both parties -outcome: more likely integrative Rights -focuses on: perceived legitimacy, fairness of arguments, whos' right -use if counterpart refuses to negotiate, you're at an impasse after exhausting all efforts, counterpart seriously violated policy/norm/procedure -process: determine standard of fairness, contract, or law to apply -outcome: more likely distributive Power -focuses on: coercion or imposing costs on some -process: threats, sanctions - last resort option