An exploding offer refers to a business deal offer or employment one, which expires if the recipient of the offer does not accept it quickly. Therefore, the offeror of the deal uses short deadlines to coerce recipient into accepting the offer before considering alternatives.
The Characteristics of Exploding
- Power Asymmetry. Usually, the parties to the exploding offer do not have equal powers. The offeror of the deal controls the negotiation in which the person received the deal either adheres to the offerors’ demands or backs out.
- A Pressure-Inducing “Test of Faith.” Exploding offers as a rule create a situation that is complicated to the extent that the person receiving the offer feels pressurized to accept the offeror’s terms. The individual receiving the offer does not get the chance to think over it.
- Restricting Choice. Exploding offers do not give the party receiving the offer a wide range of options which to choose from. Usually, the recipient of the offer agrees to abide by the conditions set by the offeror or disagrees.
- Lack of Good Faith: in exploding offers negotiations, usually the party offering the deal is not guided by intentions of good faith. The way one deals with the recipients of the offers is not fair.
Several reasons pertaining to causes of making exploding offers are diverse. The latter are used to compelling the recipients of offers to accept to abide by the conditions set by their offerors. Many users of this negotiation technique use it because they feel that they cannot compete with their competitors.
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Dealing with Exploding Offers
Recipients of exploding offers can deal with them by trying to be reasonable. They should counter the offerors of exploding offers by asking for a reasonable amount of time to explore other options.
Fighting Fire with Fire: The Farpoint Gambit
This is a technique of countering exploding offers using hard ways. The recipient of the offer also sets conditions for the offeror to abide by before an agreement is reached.
When to Use or not to Use the Farpoint Gambit
Farpoint Gambit should not be used with the aim of gaining advantage. However, it can be used if:
- The party giving the offer is behaving unethically.
- The recipient needs more time to think about the offer.
- The recipient needs clarifications.
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A Critique of the Exploding Offer Negotiation Technique and the Farpoint Gambit
The Exploding Offer negotiation technique is a method that disadvantages the recipient of the offer. When people go out to shop for something, they would prefer to take their time. They would prefer to carry out comparisons amongst the different providers of the item of the commodity. Nevertheless, this negotiation technique narrows the options the recipients would have under normal circumstances (Deutsch, 1973). Therefore, the recipients of the offers might bow down to pressure and take the offer only to regret in the future. The recipient, for instance, might later on come to realize that the offer is not fulfilling, at least as pointed out during the negotiation.
The use of this technique, especially the Farpoint Gamble, can also bring into an end a negation process that would have been beneficial to the parties to this process. The recipients of the offer might feel that they have not been handled courteously, and as they counter in the same way, it could only worsen things. At the end of it all when both parties get agitated things might turn out ugly (Deutsch, 1973).
However, the Exploding Offer negotiation technique might be beneficial to the party giving the offer. The offer might use it to pressurize the recipient of the offer to take the offer. Once the recipient of the offer bows down to pressure, it is success to the offeror (Deutsch, 1973).
The Exploding Offer negotiation technique is a method that can be applied in negotiation. Nevertheless, it a lot of solution needs to be taken.