Case Background and Deal Reached
In this negotiation, JP played the role of an acquisitions consultant for Bluetronics, an enterprise software firm. His objective was to negotiate the acquisition of Vaultcorp, a small technology firm, and obtain the best deal for Bluetronics. In return, JP would receive compensation, which would be dependent upon his performance and points earned in the negotiation. There were 8 main issues that arose with the deal, for the full list of issues and corresponding points, see Appendix A. Each side of the negotiation had a BATNA of 2400 points, in the deal that was reached, JP received a point total of 6600, while Erika, representing Vaultcorp received a total of 3000 Points. This number is better than both of their BATNAs, representing a joint value of 9600, which is 4800 points greater than if they were to ‘split the issues down the middle’.
Strengths
JP excelled in many areas of this negotiation, specifically during the negotiation they were able to expand the pie and unlock a significant amount of joint value. In this specific exercise JP and Erika managed to reach the maximum joint value available, a total of 9600 points. The deal they reached is a level 3 integrative agreement, lying on the Pareto-optimal frontier. For a graphical representation of the Pareto-optimal frontier and the deal reached in this exercise, see Appendix B. The ability to achieve a level three agreement is dependent upon strategies used during the negotiation by both sides. JP demonstrated these skills during the exercise, and it is evident that they he was successful since the deal reached was a level 3 integrative deal. Looking at two approaches JP took in order to avoid the fixed pie perception and create an integra...
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...cacy, putting emphasis on creating value, focusing his thoughts and statements on success. Adopting a mindset focused around success, rather than failure will be beneficial in helping to generate positive deals in future negotiation situations. (Sullivan, O'Connor, & Burrsi, 2006)
Relationship Building
In this simulation, JP was assigned the role of an acquisitions consultant, acting as an agent on behalf of Bluetronics to acquire the small software firm Vaultcorp. This agency relationship essentially put JP in a situation where his negotiation with Erika would not likely be a reoccurring negotiating relationship. In contrast, many times negotiations occur among parties which a relationship is expected to be ongoing, in these scenarios it is important to express emotion in a manner that is conducive to building rapport and maintain the relationship is critical.
Lewicki, J. R., Barry, B., & Saunders, M. D. (2010). Negotiation: Readings, exercises and cases
Many situations present the important synchronization of internal versus external negotiations. Many individuals have studied how each side in the negotiation is able to manage the internal opposition to agreements being negotiated. This can also be known as “on the table”, or what exactly is on the line in a heated argument. Each individual involve in an argument has a particular position to be managed, and often times own personal interests are widely expressed. This paper will expand upon the case of Fischer collecting needed funds from Smith with proposals and ideas for a manageable negotiation.
Fisher, R., Ury, W., & Patton, B. (1981). Getting to yes: Negotiating agreement without giving in. New York, NY: Penguin Books.
Fisher, Roger, William Ury, and Bruce Patton. Getting to yes: negotiating agreement without giving in. 2nd ed. New York, N.Y.: Penguin Books, 1991. Print.
Michael R. Carrell, C. H. (2008). Negotiating Essentials: Theory, Skills, and Practices. New Jersey: Pearson.
Negotiations styles are scholastically recognized as being broken down into two general categories and those are distributive bargaining styles and integrative negotiation styles. Distributive bargaining styles of negotiation are understood to be a competitive type of negotiation. “Distributive bargaining, also known as positional bargaining, negotiating zero-sum, competitive negotiation, or win-lose negotiation, is a type or style of negotiation in which the parties compete for the distribution of a fixed amount of value” (Business Blog Reviews, 2011). This type of negotiation skill or style approach might be best represented in professional areas such as the stock market where there is a fixed goal in mind or even in a garage sale negotiation where the owner would have a specific value of which he/she would not go below. In contrast, an integrative negotiation approach/style is that of cooperative bargaining, or win-win types ...
Whether or not we are aware of it, each of us is faced with an abundance of conflict each and every day. From the division of chores within a household, to asking one’s boss for a raise, we’ve all learned the basic skills of negotiation. A national bestseller, Getting to Yes, introduces the method of principled negotiation, a form of alternative dispute resolutions as opposed to the common method of positional bargaining. Within the book, four basic elements of principled negotiation are stressed; separate the people from the problem, focus on interests instead of positions, invest options for mutual gain, and insist on using objective criteria. Following this section of the book are suggestions for problems that may occur and finally a conclusion. In this journal entry I will be taking a closer look at each of the elements, and critically analyse the content; ultimately, I aim to briefly bring forth the pros and cons of Getting to Yes.
Viking Investments negotiation was based on Pat Olafson (Viking) and Sandy Wood (Wood Crafters) trying to reach an agreement on the loan owed by Sandy ($200,000), the rent ($10,000) and the over-run ($250,000) for the job done. There were four members involved: Chelsea'an (Pat’s Lawyer), Kesha (Pat Olafson), Destiny (Sandy’s Lawyer) and myself (Sandy).
Lewicki, R. J., Saunders, D. M., & Barry, B. (2010). Negotiation: Readings, exercises, and cases. New York: McGraw-Hill Irwin
In the negotiation for the Federated Science Fund I represented the Stockman Company. The meeting started with a caucus between Turbo and I which set the tone for the negotiation. In the five-minute caucus, we understood that we get the highest payoff by working together and decided to only form a deal with United if it benefited us. This was the main turning point in the negotiation as we returned to United with only high-ball offers: we opened with $220,000 each for Stockman and Turbo, and went only as low as $200,000 each, with $80,000 for United. United presented counter offers throughout, but all of them were below our $200,000 reservation point. Even though United continuously demanded a more inclusive deal, we saw no real benefit and made a deal by splitting $440,000 evenly.
Planning for this negotiation was more difficult than the first negotiation in class. The first negotiation had a point system; therefore I knew what the maximum, minimum and average amount points were. Not only does the Texoil negotiation not have a point system, but there were two people on my side (sellers) and only one on the other side (buyer).
Lewicki, R., Saunders, D.M., Barry B., (2010) Negotiation: Readings, Exercises, and Cases. 6th Ed. McGraw-Hill Irwin. New York, NY
Negotiation has been used as a vital communication tool not only in business but also in social intercourse. It helps people make common agreement and avoid conflict. So we need to use the tactics which we learned from this course and books to do more practice, only in this way we can gain advantages in negotiation.
Lewicki, R. J., Barry, B., & Saunders, D. M. (2007). Essentials of Negotiation. New York: McGraw-Hill/ Irwin.
Negotiation approaches are generally described as either distributive or integrative. At the heart of each strategy is a measurement of conflict between each party’s desired outcomes. Consider the following situation. Chris, an entrepreneur, is starting a new business that will occupy most of his free time for the near future. Living in a fancy new development, Chris is concerned that his new business will prevent him from taking care of his lawn, which has strict requirements under neighborhood rules. Not wanted to upset his neighbors, Chris decides to hire Matt to cut his grass.