Bacchus Winery

This week we did the Bacchus Winery negotiation, talked about cross cultural negotiation and handed in our real life negotiation papers. All of these different activities helped structure negotiation skills and helped us understand how complicated negotiations can become, especially if there are several parties that we need to work with.

The video we watched about the Japanese and American men working on a deal just goes to show how differently our two cultures go about business. In America we get right to the point of business and we do not beat around the bush too much. It may be difficult for Americans to understand that other cultures, like the Japanese, would prefer to build a strong, trustworthy relationship before they agree on a contract that may have terms which they like. In order to complete deals with other cultures, it is important to understand their viewpoints and study up on what type of values they have before you begin a negotiation with them.

The Bacchus Winery negotiation took great effort to come to a compromise. Tuan and I played the Tokyo Saki role, and we felt as if we were almost pushed to the side for most of the negotiation. Although the other two sides did ask us about our interests, they were busy trying to work out a solution to the Niko problem. What caused problems is that the Serbian team had lied about the outcomes of losing Niko. This confused our team and the Bacchus team. The Serbian team made it seem as if they were giving us a better deal, but really they got the better of it as they revealed what they had done at the end of the negotiation. We still do feel good about the outcome of our negotiate, but we still have not figured out the status of experience for our score.

The real world negotiation was another great experience, because it helps you better realize what typed of information you are left out on, and also shows you that the other party may lie about several things. Mine was done at a car dealer, so I do not blame the guy for lying about the blue book value of my car because I'm sure some people fall for it and the dealers claim a higher profit from the traded vehicle. Overall it was a good experience to actually go out and try a real negotiation even though my tactics may have been a little off. It made me wonder if I had known some of the material from this class when I purchased my car, would I have gotten a better deal?

MCA case/ Connecticut Valley negotiation

This week we took part in a three party negotiation that dealt with seven competing projects. We were either a headmaster, faculty committee member or board of trustees member for the Connecticut Valley School. The point was to agree on the main improvements for the school while staying under budget for the year. As a headmaster, my three main concerns were the pool, hockey rink roof and busses. As soon as me and my partner got to the negotiation table, we we found that the faculty and trustees had already formed a coalition within minutes. They presented us with a plan that sounded suffice and included all possible upgrades except the pool and the heating system. The faculty convinced us that this was the best approach and the trustees had agreed. As soon as we began to make our argument we got word that a girl was assaulted walking from the library to her dormitory. The timing of this news harmed our argument because everyone immediately found the campus lighting as a necessary issue, including my partner and I. We decided that not getting the pool was acceptable because we still did get the hockey rink roof and busses. Improving our current assets and helping our students out with busses seemed to be a higher priority. We had access to a pool that we were able to rent, so we decided that we would have to wait another year to invest in our own pool. After all, we did invest a large sum of the budget into athletic activities last year as well, so it was only fair to allow some improvement of academic activities this year.


The MCA case was interesting because the flight attendants really wanted to be compensated in a similar way to the competing airline companies. They were proven to be underpaid, and did not have the same type of benefits as other companies. The flight attendants union was able to come up with a strong strategic plan to encourage MCA management to give them an upgraded contract. MCA did not come into the negotiation nearly as prepared as the flight attendants did, which is why they were forced to give up some more on the first interest by the flight attendants. Unfortunately, the case did not go through the whole negotiation, but it seemed as if the strategies that the union had designed were working in their favor.

Jordan Electronics Company

Today we did the Jordan Electronics Company negotiation activity, which was a collective attempt to come to an agreement on what is best for the company. It took everyones cooperation to figure out what we needed to do to best benefit the company. Before the negotiation, we were required to do a negotiation checklist.

A.   About You

a.     The overall goal in this negotiation is to convince each of the departments that a new, portable design for the JAC 36 is better for the future of the Jordan Electronics Company.

b.     Issues

                                               i.     One issue is that some members would rather redesign the old JAC 36 rather than create a new, portable device, which will cost more, but will have a better outcome because the competitors have updated versions that are portable. The designers are close to a breakthrough and fixing the bugs for the portable machine.

                                             ii.     Another issue is the frivolous features, such as voice control and optical coupling. The features may not need to be added because of the lack of use by the users, or the minimal difference in temperature.

                                            iii.     There are features that should be implemented such as the new microprocessor (64-bit from Japanese)

c.     Importance of the issues

                                               i.     Portable machine

Adapted:       30 pts (x 100%)

Not adapted: 0 pts

                                             ii.     Wanted features

1.     64-bit Microprocessor

Implemented: 10 pts (x 33.33%

Not Implemented 0 pts

                                            iii.     Frivolous features

1.     Use of optical coupling:

Not Implemented: 5 pts (x 16.7%)

Implemented        : 0 pts

2.     Use of Voice Control:

Not implemented: 5 pts (x 16.7%)

Implemented       : 0 pts

d.     BATNA

                                               i.     The best alternative to this would be to redesign the standard machine, without much changing in portability or to include options that may be unnecessary.

e.     Resistance Point

                                               i.     The lowest agreement I can accept would be to have the frivolous features, no 64-bit and no portability, even though it is not preferred, we are working on this together and the R&D preferences may not be every department’s preferences

B.    About the other sides

a.     The VP of sales wants to keep the selling price the same

                                               i.     They also are confusing with whether or not they want to adapt the portable machine after they convinced the president to go with a simple redesign.

b.     The VP of production is concerned with the price of the changeover to produce the new product.

c.     Resistance point unknown

d.     The target would be to get everyone on the same page, and convince them to adapt the portable device with no useless features.

C.    The situation

a.     There is no deadline because demand for the old JAC 36 is still there, but customers are complaining about the lack of updates. Therefore, a new design is needed soon and the president says that the sooner it is designed, the better.

b.     We need to come up with a fair deal that will not drive up costs too much, and will not drive up the selling price too much.

c.     There are not really any avoided topics for this negotiation, because I feel that we are working together to come up with the best possible solution for the company.

D.   The relationship between the Parties

a.     The negotiations could be repetitive, but we need to come to an agreement because the future of the company depends on updated products. The competitors have far more updated versions of the machine on the market right now.

b.     I feel that there is a common trust between each party of the negotiation because we do have the same goal, and do work for the same company. An updated product will benefit the company, but the issue is how much to update the product.

c.     I hope for the other parties to be straightforward without bluffing because of our common goal. Laying it out on the table will be the best thing for this negotiation to work.

d.     The financial president is the chair at this negotiation, so they will probably have the most say in everything, other than that, we may have similar authority over all the decisions.

We found during the activity that we had the same goal, and we could use each other's information to see what our best option was. We ultimately decided to go ahead with the revised version of the JAC 36 for now and eventually move onto the portable version when the engineer is trained, and the bugs are worked out of the software to run the new device. It was unclear what the terms of each party was before the negotiation started, so we had to learn what each other wanted after it started.

Other then a few sections, the checklist definitely helped organize the negotiation and helped pinpoint what the issues are and which ones are most important. My point system may have been off a little because some values may be missing. 

Final Offer- Movie

Final Offer, the movie, was an interesting documentary on an negotiation that took place between General Motors and the Canadian Union workers. The negotiation took place in the 1980s and what made it so interesting is that the American union workers had already worked out a deal with General Motors, which meant that GM could not give the Canadian workers a much better offer because this would change how the Americans felt and could create future implications. The film was centralized around Bob White who was leading the negotiation on the union's side. He wanted to work out a deal with getting the leader, Owen Beiber involved. Bob feared that if they were not able to work out a deal, Owen Beiber would step in and work out something that may not be fair for the union. GM wanted to go with a different type of contract, where the union would share profits that GM made. The union would rather get a cost of living allowance increase of 3%. The agreement was pushed off and eventually the workers went on a wildcat strike that started 16 hours before it was intended (which showed some lack of control and organization by Bob White and the union officials). There was now a deadline that was set for the workers to go on a more long term strike if there is not a deal made so the pressure was really on. Bob White used a bluffing strategy by saying he had 10 million dollars in strike funds when he did not. This made the other side feel that there was less pressure on Bob and the union then there actually was. GM had some leveraging power of their own. They were able to threaten the closing of plants and loss of jobs. Owen Beiber threatened to take over control of the negotiation and make a contract that was similar to the deal that the Americans came up with, which is not what the Canadians wanted. After 8 days of the strike by the Canadian Union, General Motors had flinched. They offered Bob White a 2.25% increase for three years, which was not the 3% that the union had wanted, but Bob convinced them that it was a good enough deal to take.

During the negotiation, when working with GM, Bob White was able to keep calm and control his emotions, even though cameras showed that he was stressed over the situation. By being able to control his emotions, GM was able to sense his confidence and this was probably able to help the union with the negotiation.

Negotiation - 2/29/2012

This week we did a team negotiation activity that required one group of people to take on a role of a teachers union, and the other group to take on a role of the school board. The way we negotiated several issues that both sides were concerned with required tedious concentration and ended up being one of the more difficult negotiations that we have had to do thus far. Teams were getting frustrated as time was running out, but we were also getting tired of negotiating as well. The loss of focus was due to how much content we had to discuss in order to reach an agreement and avoid a strike by the teachers. It was much more difficult in this case then it would be in previous to see the common ground and find logrolling opportunities. I played the role of a teacher on the union, and our strategy was to become open with the school board in order to build a relationship and do what is best for the union while still creating a quality education atmosphere for the students of the school. As we began, it became clear that the school board team did not have the same strategy as we did, and would not respond to our openness. We stated several times that our main objective was to get a deal done, and that we had nothing to hide, but the other team tried to out-do us and "win" the negotiation. It took a while to even agree on a single topic, but once things started moving along, the board became more open and started working with us a little bit. Although not all members of each team felt the same about each issue, we worked it out and agreed upon what we believe was a pretty good deal. The last few issues such as benefits and arbitration were thrown together at the last second, but we did actually come to an agreement.

We learned a good amount from this activity and it is practice for negotiating as a team, because in the real world there probably are many examples of team negotiations. We could have used more time to prepare as a team for the negotiation, and in turn, this might have actually helped us save time during the actual negotiation. Overall, the activity was a good experience for learning how to negotiate as a team rather than individually, and provided us with a real world example.

This week in negotiation we worked on a different type of scenario where both parties can work together to maximize the value of the deal as a whole. Instead of there being a "winner" and "loser" in the negotiation, the purpose of this deal was for both parties in the BestBook/Paige Turner case to work together and try to maximize the value of each side. I played the part of the BestBook party and negotiated with the Paige Turner agent who was played by Isaac. We ended up working out a fair deal with few compromises by building a trusting relationship and figuring out what each others interests were. There were three categories in the deal that we both wanted to maximize such as number of countries that the books would be sold in. We both stated what we wanted for each of the categories and realized that we had common interests among a few of the categories. We also figured out how to log roll the two categories that we each had a different level of concern about. I realized that Isaac had less emphasis on the number of weeks promoted, and I think he realized that I was not too concerned about the number of books that we signed Paige for. I think that since we build a good relationship, we did not find the need to bluff and that is what helped us come to a good mutual agreement that benefited us both. Without there being much value left on the table, we were able to get close to the Pareto frontier. In fact, the results showed that we had come up with the best agreement in terms of maximizing value for both parties. Personally we did not come up with the highest numbers, but together we came up with the best value out of the class.

We also talked about the differences between the American culture and other cultures around the world when it comes to negotiation. The example we were told about the Chinese working on a deal with the Americans goes to show that the Americans like to get right down to business after breaking the ice and creating a small relationship. The Chinese (and probably other countries) would rather work on a relationship and build trust before working on a deal. This is definitely something that we all should realize, especially if we get into any type of international business in the future.

One more thing from this week is that we got back the results from the questionnaire. It was interesting to see how I negotiate and the different aspects of negotiation that were measured from the survey.

Negotiation 2/2/2012

This week in Negotiation I learned a variety of different terms and strategies that deal with making deals with other parties. One of the main things that I caught onto with the early negotiation activities is how difficult it is to figure out what information the other party has and knowing how far they are willing to go. At this point, in all activities I have been the seller, so I am never too sure what the reservation price of the buyer is which makes it difficult to work out a deal that I am comfortable with. Knowing an absolute Zone of Potential Agreement during the negotiation process would probably help the buying and selling parties split the difference so there would not really be a winner and a loser. For me, negotiation worked a little better with the "used car" activity. I made enough money on that transaction to cover the down payment for the Acura and possibly a few monthly payments. In the piston sale negotiation activity, I did settle for less then expected for the pistons that I sold. The price was below the cost of production, but the price was still much better then my next best alternative, so I was banking on the fact that the size of this deal will give some good advertising and provide future profits (or at least the buyer had some good strategies of convincing me with this idea). My aspiration of the deal was to receive some profits in the short term, but hopefully it pays off in the long term.