Question 1

Which of the following statements about negotiation preliminaries is FALSE?

Accepted Answer

Engaging in small talk before getting down to business can actually help establish rapport and build a relationship with the other party. It is not advisable to completely avoid small talk during negotiation preliminaries.

Question 2

"It's a great contract, and we look forward to you supplying our widgets for a long time to come," said Bert Buyer as he passed the signed contract across the table to Sabrina Seller. "Do you suppose," he continued, "that on this first order you could pay the freight charges instead of shipping FOB factory?" Bert is:

Accepted Answer

Nibbling refers to making small additional requests or demands after a deal has been agreed upon, which is what Bert is doing by asking Sabrina to pay the freight charges after the contract is signed.

Question 3

Why is it usually advantageous to place key issues of the negotiation near the end of the agenda?

Accepted Answer

Placing key issues near the end allows negotiators to understand the other side's style and concession patterns, which can be advantageous in addressing the most critical points effectively.

Question 4

Which of the following is an appropriate guideline for effective negotiations?

Accepted Answer

All of the options presented are appropriate guidelines for effective negotiations. Listening carefully helps to understand the other party's perspective and interests, asking probing questions helps to clarify misunderstandings and keep the negotiations on track, periodic status reports help to ensure that both parties are clear on what has been agreed upon and what still needs to be addressed, and saving face is important to maintain good relationships even in tough negotiations.

Question 5

The florist had agreed to the purchase of a new $650 refrigeration display cabinet for fresh-flower arrangements. As the salesperson for the cabinet is leaving, she says, "Did I remember to tell you that there is a $100 delivery fee in addition to the agreed upon price for the unit?" What is the BEST way for the florist to respond to this question?

Accepted Answer

The florist should refuse to pay the additional fee because it was not part of the original agreement.

Question 6

Which of the following statements about negotiation preliminaries is true?

Accepted Answer

Creating an agenda that states what will be discussed and in what sequence is important in negotiation preliminaries as it helps to avoid confusion and staying on track during the negotiation. The other options are either incorrect or not universally applicable.

Question 7

"Oh by the way, the loan contract will require that your company maintain a checking account at this bank with a minimum balance of $7,000 or be subject to a 2 percent upward adjustment in the interest rate while the balance is below the minimum," said the banker just as the entrepreneur thought the start-up loan for her new business venture was settled. The banker is practicing:

Accepted Answer

The banker is practicing lowballing, which involves initially offering favorable terms and then adding additional conditions or costs after the agreement seems settled.

Question 8

The human resource director has been directed to set up a weekend executive retreat next month at some resort location not more than five hours from the company's home office. The director had great difficulty in finding such a location on such short notice, but he is very pleased with what has been negotiated. As he prepares to leave the resort office, the resort owner casually mentions if your group is not checked out by 9:00 a.m. Sunday, I'll have to charge them for a full day." The resort owner is using:

Accepted Answer

The resort owner is using ambush negotiation by introducing an unexpected term at the last moment, potentially catching the director off guard.

Question 9

The leader of the selling team says to the members of the buying team, "Who are you trying to kid? You need my company's filtration systems to maintain your product quality. You're going to have to pay an extra $20 per system and just cut costs somewhere else." Another member of the selling team responds by saying, "Now wait a minute. These are our friends you're talking to. How about we only charge $10 extra per system and split the shipping charges with you? Doesn't that sound fair?" What method of win-lose negotiation is exemplified here?

Accepted Answer

The scenario describes the "good guy―bad guy routine," where one negotiator takes a tough stance while the other appears more reasonable to make the offer seem fairer.

Question 10

The buyer leapt to her feet and declared, "I have never been more humiliated in my whole life. Do you honestly expect me to take this offer back to my supervisor? I'll be fired on the spot." The buyer is apparently using the _____ tactic.

Accepted Answer

The buyer is using an emotional outburst in an attempt to pressure the seller into improving their offer.

Question 11

Ambush negotiation:

Accepted Answer

Ambush negotiation can happen at any stage, including meetings before the main negotiation or during product installation, and is often referred to as a sneak attack. It is typically a win-lose tactic, making all the statements accurate.

Question 12

The florist had agreed to the purchase of a new $640 refrigeration display cabinet for fresh-flower arrangements. As the salesperson for the cabinet is leaving, she says, "Did I remember to tell you that there is a $100 delivery fee in addition to the agreed upon price for the unit?" The salesperson is using:

Accepted Answer

Lowballing is a tactic where a seller offers a product at a lower price than intended to get the buyer to agree, then adds additional costs later.

Question 13

A person who is both cooperative and assertive is in the _____ mode.

Accepted Answer

Collaborating is the mode where a person is both cooperative and assertive. This mode involves working together to find a solution that meets the needs of all parties involved.

Question 14

While the installers were laying the tile in the restaurant's newly refurbished restrooms, the buyer calmly told the seller, "We need to renegotiate the price on this tile. I have learned that you charge a 50 percent markup, and as a small business owner, I find that unacceptable." The buyer is using:

Accepted Answer

The answer of While the installers were laying the tile...

Question 15

The best situation, from a negotiation standpoint, would be for both teams to have members who generally:

Accepted Answer

Collaboration is the most effective approach to negotiation as it involves finding mutually beneficial solutions. Therefore, if both teams have members who use collaboration to resolve conflicts, there is a higher likelihood of reaching a successful negotiation outcome.

Question 16

Emily opened the negotiation session by saying, "I think we're all here today looking for a win-win deal. Unless we all leave this table feeling that we've each satisfied our objectives as much as was possible under the circumstances, I'm going to consider this negotiation a failure." Emily's approach to negotiation is the _____ mode.

Accepted Answer

Emily's statement suggests a collaborative approach to negotiation, which aims to find a solution that satisfies the needs and interests of all parties involved. She emphasizes the importance of achieving a win-win outcome, indicating her willingness to work together and find creative solutions that benefit everyone.

Question 17

The salesperson selling radio ad time was pleased that he had come to an agreement with the largest retailer in town. As he was leaving the office, the retailer's media buyer asked, "Even though those rates don't take effect for two weeks, do you think you could apply those rates to our next two weeks of advertising time?" The media buyer was:

Accepted Answer

The media buyer is trying to get a last-minute concession, which is one of the classic characteristics of nibbling.

Question 18

All of the following are typical tactics of win-lose negotiators EXCEPT:

Accepted Answer

Negotiation jujitsu is actually a tactic used by collaborative negotiators who try to turn the other party's aggressive or competitive tactics into cooperative ones. The other options (A, C, D, and E) are all tactics commonly used by win-lose negotiators.

Question 19

Which of the following statements about agendas for negotiations is important?

Accepted Answer

None of the statements are universally important or applicable as negotiation strategies can vary greatly depending on the context and parties involved.

Question 20

"You can take this proposal and shove it up your nose!!" shouted the buyer. "I can't believe you wasted the time of six people to bring us all together to listen to that kind of garbage! Can you offer a single reason why this meeting should continue?!" The buyer is apparently using the _____ tactic.

Accepted Answer

The buyer is using an emotional outburst tactic by shouting and expressing anger towards the proposal and the people involved in the meeting. This tactic is meant to intimidate and undermine the opposing party, and to create an emotional response that could potentially lead to the negotiations being disrupted or ended.

Quiz 12: Formal Negotiating