Contract zone is the zone of possible agreement PDF

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CONTRACT ZONE MGMT 6045

Submitted to: Dr. Joanna Pitek Submitted by: Lakshay Khera

Contract zone is the zone of possible agreement, or bargaining range, describes the intellectual zone in sales and negotiations between two parties where an agreement can be met with both parties can agree to. Contract cone exists if each side’s bottom line overlaps; in other words, to avoid a strike or lockout, management will offer more and the union will accept less than the point where their negotiating positions intersect. In other words, contract zone is explained with ZOPA and BATNA concept. BATNA is considered worse than “no deal” and should be refused. ZOPA stands for a zone of possible agreement. There will be people in the market with BATNA too and ZOPA is the set of all deals that are least good for each party in a trade as then respective BATNAs. Other than this, settlement zone is also considered as contract zone, when seller’s resistance point is over the buyer’s resistance point. The settlement zone consists of points that overlaps between the parties participating in the negotiation. No, strikes will not occur if there will be a contract zone. Strikes or lockouts occur in the case of no contract zone where the expectations of both the parties are not met. There are different strategies and tactics which are designed in accordance with bargaining to reach a contract zone. These strategies are Distributive Bargaining, Integrative bargaining, Intra-term bargaining and building trust tactics. Distributive bargaining has a golden rule for getting into contact zone that is asking more than your bottom line and if that don’t take place and if lower offer is made it leads to strikes and lockouts. Mostly new relationships and negotiators are likely to have unrealistic expectations which may not fit accordioning to the management and unions and at last resulting in strikes and lockouts. There are different conditions which can result in difficulty in getting into agreement a third-party intervention helps in reducing those unrealistic expectations. Pressure from different sources may affect the decisionmaking process of the parties to get into a contract zone. There is the triangle of pressures which revolve around unions, employers, and union members. The deadline is necessary for parties to settlement. References

Brown, H. (2016). Negotiations. Contract Zone. Retrieved March 1, 2019. FOL Ellis, C. (march 2011). Contact Zone. Retrieved March 1, 2019, from 1 http://negotiatewithchad.blogspot.com/2011/03/batna-and-zopa-quick-introduction.html?m=1...