Negotiation

journal by vidhi shah- session 1

Introduction

Group had been divided into teams to perform negotiation based on interest and not position. Each team operates a store in the country of Euro-Lat-Asia. The government has decided that stores may not be open on Sunday in both the team case. Considering all the situation and circumstances, each team goal is to MAXIMIZE THEIR OWN STORE’S PROFIT.

That’s challenging!

Lessons Learned

Things worked:

Within teams:

• Negotiation involved in getting team members to agree to make certain decisions on performance and ideas.
• Encourage effective communication and involve them to put their ideas and views to make best strategy out of all possible ways. That was interesting as people started putting their different views from their understanding and experience. BRAINSTORMING worked well.
• Listening was another key factor to understand every member’s opinion. Sounds lengthy procedure but it helps a lot. So keep remember, listening and communication are must to deal with every business negotiation.
• Involve yourself into discussion, even if you are into disagreement with the rest of the team. Better to open up of yourself and explain the cause of disagreement. Well, I did!

With counterpart team:

• We came out with solution or different approach to deal with mistrust caused between teams by signing the sheet for agreed terms in front of each other during meeting itself. Believe me it was a great learning for future business deals!

Things went wrong:

• Trust on counterpart was a mistake, they betrayed us by breaching on agreed term discussed during meeting. Of course every team was looking for their interest so what they did turned into a bad feeling and mistrust between teams. It was an indication of being alert for the next turn.
• Misunderstanding within team... Yes, our representative misunderstood the conversation and did wrong move during first meeting, which ultimately lead to low profit. Keep your eyes, ears, mind open. But good part was, instead of blaming our representative, we started to discussing out next move to recover the loss.

Better approach could be:

• Ultimately result of this negotiation was not truly satisfied with the outcome and of course our team did best to maximize profit and we did.
• Throughout the process of negotiation, team had experienced mistrust and bad feeling with no clear intension of “win-win” outcome by either side of teams.
• To bring each team into a common agreement was challenging and difficult.
• It would have been better to negotiate in favorable way and go for a compromise little from each side. This may help the teams reach a situation without creating any larger, interest based conflicts.

journal by vidhi shah- session 2

introduction

Negotiation getting more interesting with every session. Now it comes to deal with distributive negotiation. In this exercise, there was one buyer(AccelMedia) and one seller(Gtechnica). Being the seller, our (Exception, we were two sellers) aim was to sell 15,000 units of GT7 graphics accelerator cards to potential buyer at the maximum rate possible to cover net cost of $16 per unit, given the fact that the production line will sit idle if no deal is made. So cover the cost, get the highest possible price per unit and keep business/production running was the challenge.

How to gain the most profit in our interest at the cost of buyer is the main idea. Is it really advisable? I don’t know but may be this is how it works in real business world.

Lessons Learned

Things worked:

• All buyers had been asked to discuss the strategy on initial offer, lowest price to be accept (Reservation price), price that would like to be receive (know your target price). Yes, we learned new business glossary! Outcome of this discussion was, we look at every angle of the situation. And now we are ready with the baseline prices to negotiate.
• Try to obtain/assume information about counter party target/reservation price. And if you can then be the die-hard bargainers. How will you know that?? Discuss and ask questions, judge them, take risk. Make assumptions, anticipate their move and market research they might have done.
• We did the opening offer and it helped to anchor a negotiation as well as started the process positively with space to bargain.

Things went wrong:

• An exaggerated opening offer. Yes! Not decided earlier but seems discussion stared with disagreement within team as a seller. But, we dealt with it smoothly later as the discussion progress.
• Buyer quoted her first offer below our reservation price and it was almost like the turned down point of the deal.
• Ultimately, we closed the deal at reasonable price but leaving with unsatisfactory deal at counter party. And we might lose further business with them in future with the base of win-lose situation.

Better approach could be:

• Someone had to lose something significant to close the deal, rather better strategy could be to preserve a positive relationship and work together to come up with best solution for both parties. Deal with one another in a fair and open way that leads to effective problem solving and a mutually agreeable outcome. Better to have win-win situation versus win-lose situation as we experienced in above exercise.

journal by vidhi shah- session 3

introduction

We watched the classic Integrative negotiation movie “The Sluggers Come Home…” and learned how to make right business deal with Win-Win situation for both the parties by expanding pie as well as maintaining a positive relationship with the other parties. 

Lessons Learned

Things worked:

• What a beautiful way to convey salary raise by… instead of asking directly for salary raise, she asked to add her salary cost to the total amount of reservation price for the deal.
• Curry brothers were ready to work around their first offer but decided not to react on Barbara’s surprise to their initial offer.
• After getting offer by Barbara, instead of walking away from the negotiation as offer was below their reservation price, they gave Barbara valid reasons to value the field highly. They tried to adjust Barbara’s frame by getting her to look at the net figure- the difference between gate receipts. And here starts widening the pie by finding creative options that will meet the interests of both.  
• They showed the confidence in attendance needed by Barbara to cover the lease payment and accordingly made another interesting deal to meet Barbara expectation of lease and sharing profit above the lease payment.
• Both the party hold their position to reduce the size of concession and deal was getting longer time but signaling that they are unlikely to move much further.
• Curry brothers used the integrative negotiation tactics by creating value to the deal and providing best Win-Win situation for both. It was an interesting rational negotiation, tactics and strategies for negotiating profitable agreements"

Things didn’t work:

arb

• Curry brothers were under-confidence and not prepared with their first offer knowing reservation price, target price, their BATNA etc.

• Barbara was overconfident. She had an unrealistic expectation by believing it's a win-lose situation and she will get a deal as she wants.

• Barbara was ready to walk away seeing curry brother’s ridiculous first offer and with-holding her information in first meeting which shows that she was not looking for interests and other possible options of negotiations but just her position.

Better approach could be:

• Barbara could have used the logical behavior in first place and shared information in good intention to build trust and open opportunity to expand agreements.

• Instead of attacking the curry brother’s position and push her own positions on them, she could have considered interests for both of them being rational in every options available and offer given by Curry brothers.

• Best approach could have been to give up some desired outcomes to get other desired outcomes and work on mutually beneficial deal.

• Curry brother came up with offer that minimizes the risk of Barbara which was the best turning point Barbara could have accepted.  

journal by vidhi shah- session 4

INTRODUCTION

Tropical Island people are proud of its rich native culture and lack of commercialization unlike other islands surrounding. Island queen Inc. are luxurious ship which cater high class passengers facing slow business and seeking new destination. It’s ready to help Tropical Island to increase their revenue and economic, infrastructure development in exchange of allowing them to visit their port. Both parties hold the shared goal of increasing profits.    

Lessons Learned

Things worked:

• Both negotiating parties learned the other party’s priorities, what issues are mutually beneficial.
• We both exchanged our interest through a back and forth exchange of ideas and discussions as we both were well prepared.
• We agreed to visiting Island a certain amount of times in a year but we altered the times of visit per day dividing the passengers in different day slots in order to accommodate to the Island and not don’t over crowd the Island at the same time which shows an example of generating different option favorable to both the parties.

Things didn’t work:

• Expanding pie was limited due to high cultural values and marine life damage concern.
• Trying to offer the Island money in exchange for access to port was not the only viable proposal because the cultural values were too important to those living on Island. So we expanded our options by providing them better infrastructure, construction of their community college, employment opportunity to their habitants etc.
• The Mayor of Tropical Island was responsible for making decision and had a high level of legitimated power. On the other hand, being Captain of cruise, the Captain had limited power and was responsible to answer broad of the company for every decision made. So we had to take precautions to avoid damage which can be caused due to power imbalances.

Better Approach:

• We must take into consideration that our analysis of the other party’s BATNA. So during negotiation we don’t easily manipulated.
• In order to gain power, it was important to signal our BATNA but not reveal it completely. So if the Tropical Island does not agree to our terms then we have discovered another Island with similar qualities.
• We must create trust in other party to show them that will work with cooperation and friendly manner even in future if situation arise in terms of betterment of Island.
• To work smoothly in future as well we must focus on win-win situation rather win versus lose.