OAM 330 Midterm 2: Negotiations and Groups/Teams

Negotiations involving one issue and are a fixed-pie (direct win/lose or zero-sum)

Distributive negotiation

BATNA - represents best available outcome if you walked away from a negotiation

Best Alternative to Negotiated Agreement

Why is BATNA the biggest source of leverage in a negotation?

The stronger it is, the easier it is to get outcome

Should you reveal a strong BATNA? What about a weak one?

Hint at a strong one, never reveal a weak one

The highest or lowest point a party is willing to go to in a negotation

Reservation price

When should you clearly define your reservation price?

Before the negotiation

Should you ever reveal your reservation price?

No

How are BATNA and reservation price related?

BATNA helps determine reservation price, and reservation price should be close to BATNA

Why aren’t BATNA and reservation price just exactly the same thing?

Personal factors go into reservation price

Your ideal outcome in a negotation - determined by trying to get as close as the other party’s reservation price

Target price

ZOPA - represents bargaining zone between a buyer’s reservation price (highest they’d go) and a seller’s reservation price (lowest they’d go)

Zone of Possible Agreement

When does a ZOPA not exist?

If a buyer’s reservation price is less than a seller’s reservation price

Tendency to make an agreement in a negotation, even if the outcome is disadvantageous

Agreement bias

What are 3 reasons agreement bias can happen?

1. Not identifying reservation price

2. Sunk cost fallacy

3. Maintaining image

Should you make the first offer in a negotation, and because of what bias?

Yes, because of anchoring bias

When should you ever not make the first offer in a negotation?

If you have no idea what the other party’s BATNA is (or to maintain relationships)

What is a good strategy to attain a desirable outcome during a negotation?

Get the other party to focus on their reservation price

Issues where both parties want the same outcome

Compatible issues

Negotations involving multiple issues and that are variable-sum, where both parties can expand the pie and create more or less value

Integrative negotations

When all of the issues in a negotation have been allocated to create the most benefit for all possible (maximizing the pie)

Pareto-efficiency

Why are pareto-efficiency and pareto-equity not the same thing?

Trying to maximize total value can lead you vulnerable to another party claiming more of that value

What kind of info can you share in integrative negotations?

Share which issues matter but not how much, and avoid strong preferences

For integrative negotations, is it better to go issue-by-issue or negotiate pre-meditated package deals?

Package deals create a sense of flexibility

Tendency for groups to only focus on shared information rather than individual insights

Common knowledge effect

Why does the common knowledge effect occur?

Consistency and social comparisons

When the desire to maintain group cohesiveness influences the decision making process

Groupthink

What are some causes of groupthink?

Group isolation, demanded obedience, high stress

How can groupthink be prevented?

Encourage different opinions, have systematic procedures

People in groups tend to agree, so group discussions lead to more extreme opinions

Group polarization

What are the 3 causes of group polarization?

1. Persuasive arguments

2. Social comparison

3. Outgroup perception

Belief by team members on whether it’s okay to take risks

Psychological safety

What is one strategy to achieve high psychological safety from the Google article?

Allowing everyone to share without fear of repercussion

Idea that the presence of others increases the dominant response, making easy tasks better and harder tasks worse

Social facilitation

What happened in the fishing reel study (social facilitation)?

People worked faster in groups

What happened in the cockroach study (social facilitation)?

Cockroaches beat the easy maze faster with spectators, but took longer for the hard maze

Idea that the presence of others can decrease the dominant response in certain situations, because each individual is not held accountable as much

Social loafing

What happened in the pulling the rope study (social loafing)?

People pulled harder when they thought they were alone

When is social loafing less likely to occur?

Intrinsic motivation, with friends, collectivistic culture