Question

How does Carr argue that strategy in business is analogous to strategy in a game of poker?

what are the advantages and disadvantages of limiting a negotiator's authority?

Define bargaining mix. What are the advantages and disadvantages of large bargaining mixes?

please provide in 150 words each

Answer 1

Answer) The basis of Carr’s argument seems to be that there is a difference between what he calls “private morality” and the moral context of the business world. The analogy he uses is the game of poker. Many of you perhaps are familiar with poker and perhaps have even played in some of the online sites or with friends. Of course, there are rules to the game and certain things constitute cheating. However, there is also an understanding in poker that “bluffing” is acceptable and within the bounds of the rules. If I am holding a pair of threes and you have a full house it is perfectly acceptable for me to bluff you out of your better hand and take the winnings. Similarly, there are cases, according to Carr, where bluffing is acceptable in the business world. His argument for this seems to rest on the presumption that the business world is, in some sense, fundamentally different than the world of private morality.  

The argument Carr makes seems to rest on two points. First, there is a strong pressure to deceive in business. Consider the example he cites about an applicant filling out a psychological profile. Sure, this is a small example but it does illustrate that the pressure to deceive enters the business world from the very start. If one wishes to be successful in the world of business, or in this case even enter the business world, one has little choice but to deceive. Or as Carr more politely puts it, bluff.

A second point is that business in general only has the obligation to follow the law. There is no good reason for any business to go beyond the law or to consider what might be ethical if it demands doing more than the law requires. So, in a sense, he is equating, for the purpose of the business world, law and ethics.  

The two points seem to go hand in hand. Given the competitive nature of business (like the competitive nature of poker) there is a strong pressure to only follow the law. After all, you can be sure that your competition will do this and nothing more so if you decide to run your business by extra-legal moral principles you will suffer as a result. Not only is this the case, but also everyone expects that you will only follow the law. As an extreme case in point remember the Italian Tax case. There, it was expected that everyone would bluff on their taxes. Look at all the trouble that was caused when someone actually told the truth!  

But then what explains all the talk about ethics in business? According to Carr this is partly good PR and prudent. After all, no one wants to deal with a business that talks about bluffing. But also, talk about business ethics and codes of ethics might just protect a business from government regulators. If you talk a good game of ethics today you might save yourself from more intrusive laws and regulations tomorrow. Sounds sort of Machiavellian doesn’t it?

You might think that business people would have loved Carr. After all, he seems to be giving them a license to behave just as they please. But, actually, business people were among the first to protest Carr’s argument. Perhaps you can guess why. Here he is giving away their cover! But the strategy of bluffing is less effective the more it becomes known that you are bluffing or intending to do so. Also, once you equate ethical behavior with following the law you send a signal that if businesses need ethical improvement that means there needs to be more law and regulation of business. But, that is the exact opposite of what businesses want. So, Carr’s effort to be honest about bluffing won few friends in business. Well, perhaps they agreed with him but wished he hadn’t said anything.

Answer 2) Advantages: Negotiators kept on a "short leash" cannot be won over by a persuasive presentation to commit their constituency to something that is not wanted. They cannot give out sensitive information carelessly. Disadvantages: When a negotiator always has to "check things out" with those he represents, the other party may refuse to continue until someone who has the power to answer questions and make decisions is brought to the table. The limited authority may frustrate the other and create an unproductive tension in the negotiating relationship.

Answer 3) The combined lists of issues from each side in the negotiation is called bargaining mix.

terests are the underlying concerns, needs, desires or fears behind a negotiator's position. By uncovering a party's interests, a negotiator may open up the negotiation for creative problem solving.

The target point is the point at which a negotiator would like to conclude negotiations. It is his optimistic goal for a specific issue.

The bargaining mix is the package of issues up for negotiation. Each item in the bargaining mix, can have its own starting, target and resistance point.

The point beyond which a negotiator is unwilling to settle is her resistance or reservation point.

The bargaining zone or range is the spread between the two parties resistance points.

Positive Bargaining Range.   When a buyer's resistance point is above the seller's resistance point there is a positive bargaining range.

Negative Bargaining Range. When a seller's resistance point is above the buyer's resistance point.

The settlement zone consists of the points which overlap between the parties participating in a negotiation. If the bargaining ranges of two negotiators do not overlap, it is unlikely that a settlement will be obtained. settlement can be reached.

Large bargaining mixes give us more possible components and arrangements for settlement, thus increasing the likelihood that a particular package will meet both parties' needs and, therefore, increasing the likelihood of a successful settlement. At the same time, larger bargaining mixes can lengthen negotiations because there are more possible combinations of issues to consider and combining and evaluating all these mixes makes things very complex.