Final Exam Study Guide MGT 430 Negotiations
By: Evatee
Final Exam Study Guide
MGT 430 Negotiations
Basic Negotiation Concepts
• BATNA: Best Alternative to a Negotiated Agreement (The better your BATNA, the
greater your power)
• Reservation Point: “Bottom-line” “walkaway” minimum acceptable level you are
required to say yes too
• Goals & expectations-how are they alike & different?
o Goals are things we strive toward that are usually beyond the range of our past
achievements- give us direction
o Expectations is a considered judgment about what we can and ought reasonably
to accomplish- what give weight and conviction to our statements at the
bargaining table
o Difference between the two is your attitude
• ZOPA- “bargaining range”
o How do you determine it? The overlap between the buyer and sellers price
o Positive ZOPA always guarantees a deal?
o Deal within ZOPA is always better compared with no deal? Not unless your Batna
is the better option
o How can the ZOPA be expanded? (hint: Texoil) Find different solutions to no
ZOPA, like securing a job after or royalty fees
• Anchoring and first offers
o Definition and effect of anchoring: the human tendency to be affected by “first
impression” numbers through into your field of vision- people unconsciously
adjust their expectations based on this high or low starting point “reference point”
o Pros and cons in differing bargaining situations-
o When and how to use anchoring effect- opening when you have a strong
BATNA, leverage, or argument/ give the opening offer
o How can preparation reduce vulnerability to anchoring effect? -prepare well
enough to be on par or ahead of the other party in terms of their knowledge of the
issues at hand, and of market and industry trends
o When are you prepared to open first? (Shell, 157-9) “The answer lies in
how much information you have”
o Opening & concession strategies-tactical decisions (Shell, 174). Refer to the table
• Issues, Interests, Parties and Positions
o Definitions, how they’re related and different- Who are they, why are they
, Final Exam Study Guide MGT 430 Negotiations
By: Evatee
there, what is important to them, what are they prepared to negotiate, view of
the situation, and do they have the authority to close?
o Are all relevant parties always at the table?
By: Evatee
Final Exam Study Guide
MGT 430 Negotiations
Basic Negotiation Concepts
• BATNA: Best Alternative to a Negotiated Agreement (The better your BATNA, the
greater your power)
• Reservation Point: “Bottom-line” “walkaway” minimum acceptable level you are
required to say yes too
• Goals & expectations-how are they alike & different?
o Goals are things we strive toward that are usually beyond the range of our past
achievements- give us direction
o Expectations is a considered judgment about what we can and ought reasonably
to accomplish- what give weight and conviction to our statements at the
bargaining table
o Difference between the two is your attitude
• ZOPA- “bargaining range”
o How do you determine it? The overlap between the buyer and sellers price
o Positive ZOPA always guarantees a deal?
o Deal within ZOPA is always better compared with no deal? Not unless your Batna
is the better option
o How can the ZOPA be expanded? (hint: Texoil) Find different solutions to no
ZOPA, like securing a job after or royalty fees
• Anchoring and first offers
o Definition and effect of anchoring: the human tendency to be affected by “first
impression” numbers through into your field of vision- people unconsciously
adjust their expectations based on this high or low starting point “reference point”
o Pros and cons in differing bargaining situations-
o When and how to use anchoring effect- opening when you have a strong
BATNA, leverage, or argument/ give the opening offer
o How can preparation reduce vulnerability to anchoring effect? -prepare well
enough to be on par or ahead of the other party in terms of their knowledge of the
issues at hand, and of market and industry trends
o When are you prepared to open first? (Shell, 157-9) “The answer lies in
how much information you have”
o Opening & concession strategies-tactical decisions (Shell, 174). Refer to the table
• Issues, Interests, Parties and Positions
o Definitions, how they’re related and different- Who are they, why are they
, Final Exam Study Guide MGT 430 Negotiations
By: Evatee
there, what is important to them, what are they prepared to negotiate, view of
the situation, and do they have the authority to close?
o Are all relevant parties always at the table?
