Question

Question 3(a)
In less than 400 words (indicate word count), examine two (2) out of the four (4)relevant hardball tactics in the distributive bargaining process which involves a typical property negotiation between a seller and a buyer. Support your answer with example(s).

(b) In less than 350 words (indicate word count), appraise how cultural differences arising from different nationalities of the property seller and a potential buyer can affect a typical property negotiation. Justify with a negotiating model on culture in the given example between the buyer and seller.

Answer 1

Q3a)The hardball tactics are one of the most used in negotiation

The hardball tactics are

1) The good cop bad cop

2) The lowball Highball tactic

3) The bogey tactics

4) The nibble-asking small concessions

1) Good cop bad cop routine-In this there are two buyer persons who are negotiating with the seller.One buyer is the extreme negotiator and wants to create a win lose situation.He starts the negotiation with a hard note on the seller,then the other steps in to pacify the effect.In case of a property sale,let us assume that a seller has quoted a price of 4 million for an apartment.After checking the rice,the buyer calls in the seller for a meeting.The first buyer is aggressive and pushes the seller to come down to a price of say 3 million.The seller disagrees.In this case its a win lose situation.Now the second buyer comes in to pacify the scheme of things and create a win win situation.He says that 3.5 million is the best we can pay.They both agree and the sale occurs.

2) The Low ball Highball technique-In this the buyer or the negotiator makes an offer which is ridiculous.He then checks the emotional reaction of the seller,If the seller agrees or succumbs to the price of the buyer,the buyer realizes that the seller does not know the value of the product that he is selling.If the seller feels offended by buyer''s offer,the buyer then realizes that the seller knows the value of the product he is selling and then comes to a term to create a win win situation.

Example-Let us take the earlier illustration,here the buyer comes and offers a ridiculous price of say 10 million.If the seller agrees,then he understands that seller is not justifying the value of the product he is selling,there will be no sale in this occasion,because the buyer wont find value in the property.Now if the seller feels offended and tries to move out of the negotiation,the buyer will tell him to sit and discuss further.Here the buyer understands that the seller is justifying the value of the product,and tries to create a win win situation

Q3b) Every negotiation aims to create a win win situation,one of the important thing to be discussed in negotiation,will be the cultural differences arising between buyer and seller of different nationalities

Effects of cultural differences in property negotiation

1) Relationship or contract-Suppose in a property selling,one person from US wants to buy a property in India.US Person may have a different way of approaching the negotiation,say he is determined that he has studied the Indian property market and is straightforward.He does not believe in extending relationship with the seller.On the other hand,the seller being Indian tends to make a relation with the buyer and does not believe in formal postures,thus could offend the buyer.The goal is same here,but approaches are different.In this method it may so happen that there is a lose lose situation

2)Attitude-Quoting the same above illustration,it may so happen that both the Indian and US guy approaches with different attitude.Say the US guy is adamant and the Indian guy is soft and sober,there could be a win lose situation here,wherein the US guy will apply a low ball highball negotiation technique which will succumb the indian seller

3) Personal style-Style differences,formality may affect the negotiation.The Indian guy may try to be a bit informal,to develop relationship selling which may not be liked by the US guy.There could be a lose lose situation

4) Sensitivity to time- US guy may have stipulated time to close the deal,which the Indian guy may not adhere

5)Communication-Lingual differences may occur ,which may require a mediator.Say the Indian guy does not understand English,so he will require a translator.There could be a gap in information flow and the deal may remain incomplete.

6) Emotions-It may so happen that there are emotional differences between the buyer and the seller.The Seller may pertain certain emotions,which the buyer may not be able to compute.The US guy may tend to hide his emotions,while the Indian may be a bit over emotional,thus there may be a lose lose situation and sale may not occur

A model for Cultural negotiation is shown below

In this figure,culture 1 shows say a buyer,having a set of preferences,which defines its integrative potential of buying.If he is inclined to buy ,he will deploy a strategic behavior which will define his interactional patterns,those have to be matched with the seller to close a deal,

Let us assume the previous illustration of negotiation between a US person who wants to buy a property in India.He will have a certain set of preferences which will define his integrative potential with the Indian seller,thus he will try to develop a strategy which will drive his interaction patterns,say he understands the Indian buyer and also behaves informally,to match with the Indian.Thus there will be a win win situation and sale will occur.Similarly it may so occur that the Indian understands the US guy and matches his thought process to complete the sale.