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.