Question

In a distributive bargaining scenario, how do I get the other party to go along? How do I win? Does bad faith exist in a distributive bargaining scenario? For instance, when selective presentation is used, does it ever become an exercise in bad faith? How do you manage dueling experts?

Answer 1

Distributive bargaining is where a portion of the assets imperatives results into one of the both party in arrangement to lose something huge.

Examples from my personal scenario would include Common distributive bargaining situations include my experience at an undergraduate College when I moved my base from one city to the other leaving my previous Corporate job behind. The management of the college out rightly expressed their discomfort compensating me every month with the salary anywhere near what I could avail in the Corporate world. It was reduced to less than a quarter. The basis that they provided for me is that the fee structure is too reasonable for the students of generate a noticeable earning for the College itself hence they could not afford to pay me much. However, after their distributive bargaining skills with me, they finally decided to raise their compensation offer to little more than a quarter of my previous salary and promised me to raise it more after the first half of my engagement in the year with the Institution. I realized that in the town where I had moved, no other college could offer me even this compensation package and that the Corporate exposure of the place was also negligible leaving me with very little options but to accept the same. Similarly, my family recently bought an apartment with 2 BHK in the area of 1400 sq feet. Keeping the area of mind, we had wished for a 3 BHK instead but the Builder argued that keeping the design map on mind, constructing the 3 BHK flat would result into various structural changes in the apartment which may practically not be possible when it is located on the 5^th floor. Before we went into this deal of buying the flat, they were in the opinion that it was feasible but now, after the deal was entered, they checked with architectural team who informed that it could not be a possibility. Hence, we ended up having a sprawling 2 BHK flat and upon consulting an Interior decorator, the entire look of the apartment changed with artificial make-shift partition in place so well designed that it was near to impossible to guess that the 3^rd room was a creation of a temporary arrangement and not a permanent structure.

In a distributive bargaining scenario, in order to get the other party to go along and also to ensure our win, following steps could be undertaken:

• In distributive bargaining, both parties should be aware of their resistance and target limits in the sense that if the other party fails to honor even the minimum expectations of the first party then, the resistance limit would end up terminating the deal itself whereas in case of the target limits, the parties would anticipate to make the deal reach to that optimal level. Like in the above examples, I would not have accepted the College compensation package if it was offered to me less than the quarter of my salary while that of my target limit was a compensation package in accordance to my previously drawn salary. Similarly, in case of the apartment that we purchased, we would not have compromised had the space area been also reduced from the other party in the deal from 11400 sq ft. to anything below it whereas in case of my target limit, I would have simply expected them to divide the apartment skillfully into a 3BHK apartment.
• Similarly, it shall also be important to understand what are the resistance limit and the target limit of the other party in the picture whether availed directly from the party in the deal itself or indirectly. However, in case of distributive bargaining scenario, direct information from the other party is rarely availed as they could stand to lose something relevant in the process hence one has to basically resort to indirect channels.
• An open offer could be placed before the other party in a kinder tone in the bargaining process such that it helps in negotiating the situation better. An aggressive open offer could also be in place provided the party has valid grounds to deal upon it especially when it goes beyond the resistance limit of the other party.
• Reasonable concessions should also be provided at the time of negotiations with the party such that it is done is a good faith thereby closing the deal.
• There needs to be a closure of the deal either an implied way where the other party ceases to negotiate any further or in an expressed way. Final concessions could also be offered to the other party so that the deal closes favorably without really breaching the resistance limits of both the parties in the scenario.

In this way, distributive bargaining scenario could be managed more efficiently. Bad faith may exist in a distributive bargaining scenario but that is unethical and certainly not advisable. Reasonable concessions could be presented before closing the deal but concealing of significant information is breaching the trust of the other party involved in the deal which, although may be a good tactic to handle the negotiation process like for example, using of selective presentation which could only depict the information which looks favorable on the face of it, to the other party but by hiding significant facts to enter into the deal, is a bad faith activity which needs to be avoided in the distributive bargaining process.

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