Our Touchstone Partners Team discussed researched theories and best practices that guide managerial negotiations in cases of ‘distributive bargaining’, involving the single issue of price, aimed at holistic outcomes that optimize both personal development and organizational behavior. Critical conversations such as this emphasize our beliefs, commitment, and accountability for our roles in building an accomplished team, profound purpose at Touchstone, and the far-reaching impact we come to bear.
June 21, 2023
Our Touchstone Team meeting introduced researched theories and best practices that guide managerial negotiations in cases of ‘distributive bargaining,’ involving the single issue of price. Cutting edge management science in negotiation techniques and tactics informed our conversations and debate in support of our professional development and to uphold standards for optimal organizational behavior. Sharing our views on vital topics such as this, highlights aspects of what makes Touchstone truly ‘Touchstone.’ Together, we aim to strengthen our three pillars, namely, our firm culture, our team, and ourselves, by visibly prioritizing the continuum around which we relate.
The session built on a previous one, concerning conflict resolution in a muti-issue case that involved ‘integrative bargaining,’ wherein using creative negotiation tactics could enhance mutual gain. In contrast, this meeting studied a case concerning the single issue of price through the buying and selling of a used car, pointing to maximizing gains, where any price gain to one side is an equivalent loss to the other side. Moving through myths that define what negotiation is and what it is not, ‘distributive bargaining’ was narrowly defined with a view to provide a primer for the case reading and ensuing price negotiation. The goal was to engage in a ‘negotiation dance’ for a beneficial value agreement between the buyer(s) and sellers(s) of the used car.
The session advanced through a series of questions deliberating essential concepts in a distributive negotiation based on the interaction within buying and selling partnerships. Cues included, how low the seller would go and how high the buyer could go. In determining how each ‘buyer’ and ‘seller’ responded to the issue at stake in reaching a necessary resolution, key terms considered each person’s BATNA (best alternative to no agreement), target price, reservation or ‘walk away’ price, and the necessity of establishing the bargaining zone, ZOPA (zone of proximal agreement), to set the price.
The post case discussion uncovered a truth in that expert negotiators do not lean on experience alone. A framework of sound practices guides successful negotiations, building tools that expand and strengthen requisite skills. Research from the Harvard Business School (HBS) and the Program on Negotiation at the Harvard Law School, as well as theory through articles published by MIT Management, Sloan School, revealed tested, practical ‘know how’ to incisively plan and strategize moves that bolster winning a negotiation. This would unravel stances used and answer a question posed post the case negotiation, asking what approaches were thought to have yielded or sacrificed value, such as who made the opening move and the manner and nature of concessions made.
Apart from considering the substantive issues in a case, Deepak Malhotra, Professor at HBS, also highlights the significance of keeping an eye on ‘process before substance.’ “Other than using the value and leverage you bring, productive interactions and profitable outcomes are the result of setting expectations, mapping out the negotiation space, and controlling the frame.” (Control the Negotiation Before it Begins, hbr.org). “A behavioral theory examines with scrutiny the subtle ways in which parties move toward or away from each other, considering subjective value: not just the substantive, of how resources are expanded and divided but also how parties feel in the process and when they leave the room.” (A classic negotiation framework, still applicable after 50 years, MIT Sloan). Inter and intra organizational relationships and goodwill are at the heart of any negotiation.
Skills in tactful negotiation are a way of life for executives and organizations. Critical conversations on subjects such as this emphasize our beliefs, commitment, and accountability for our roles in building an accomplished team, profound purpose at Touchstone, and the far-reaching impact we come to bear.
Communications and Sustainability Officer