Professional Documents
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BMGT42780 Madan Sumit Journal
BMGT42780 Madan Sumit Journal
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Reflections on “BioPharm-Seltek” role-play (lecture 3)
1) Which of your negotiation tactics and strategies worked well, which did not work, and
why?
In the given role play, we, the Purple team-3, played the role of CFO of BioPharm company.
Our task was to negotiate and buy the Seltek plant in US. This case relates to a typical
negotiation of competitive bargaining, where the single biggest issue revolved around the
buying price of the plant. Hence, the most important part from our side was to understand the
whole case in-depth and create a thorough negotiation strategy. Next, I’ll elaborate some of the
tactics that worked well for us during the negotiation.
First, we broke the whole case in various sub-parts. For example, the price of the plant, the
land price, the pending real estate tax due to Seltek, the patent that Seltek wanted to sell, and
Seltek’s trained workforce that we wanted to retain. We further created couple of issues such
as early possession of the plant and age of the plant. Then it was important to rank these issues
in-order of priority and accordingly react aggressively or go-easy on the specific issue during
the negotiation. The whole idea was to create as many issues as possible. Such a scenario helped
us trade some of the non-priority issues against the high-priority issues during the negotiation.
Further, multiple issues helped us avoid near-impasse situation when we had to finalize on the
overarching issue of price of the plant. During the end of the negotiation, we could play down
the significance of the cost of the plant. This helped us get a reasonable price – which indeed
was the main slice of the pie.
Next, we meticulously created a script around each issue to support our offer with convincing
1~2 stories, reasons or facts. For example, we tried to derive the age of the plant from the
depreciation shown in Seltek’s accounting books. We had strong reasons behind the numbers
of our first offer. The preparation helped us bring cogent arguments throughout the negotiation
session. Further, it put us in a little commanding position, where we could ask the Green team
members about the rationale behind their demands. After the negotiations were over, we
candidly asked the green team about the impact of our arguments and they admitted that they
were taken aback and felt themselves on the backfoot during the course of the negotiation.
Further, our preparation helped us make the first offer, which was little below the target we
had set for the purchase of the plant. Based on the insurance value of the plant, we offered a
singles number of $8.3 million. We didn’t want to offer any range because we were
apprehensive that the Green team may pick the number favourable to them. After attending the
lecture and reading the text in Thompson book, I internalized that such a tactic also helps
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maintain the bargaining surplus. This is especially useful when we are not aware of the Zone
of possible agreement (ZOPA).
Our last tactic that would have worked for us was with respect to our behaviour. We chose to
remain restrained, calm and polite throughout the conversation. There was an occasion when
the Green team misread their numbers around the market value of the plant. At that instance,
we offered our support to reach the right numbers. Such an approach helped us use the
combination of high goals and cooperation to achieve favourable outcome for us.
However, despite a favourable outcome there were many areas of improvement. We realised
that we could have achieved a lot better result had we employed certain strategies. To start
with, before entering the negotiations we kept our aspirations quite high. Despite our team
having the management approval of $ 40 million for the investment and a BATNA of $37.5
million ($25.5 million for new plant and $ 12 million for each month’s sales loss), we
aggressively targeted and prepared our first offer of $ 8.3 million (based on building insurance
value). This gave us a big zone of possible agreement during the negotiation. But this also
brought a lot of complacency in our attitude towards our first offer and the target price. Once
the Green team countered our initial offer with an aggressive $22 million price of the plant, we
didn’t ask many questions about the reasons for which they were seeking such a high-premium
on the plant’s market price. I realise that target influences outcomes. Hence, it implies that
though our initial offer was aggressive, we were really not very serious about defending that
target. We too quickly pivoted our offer from insurance price to Seltek’s balance sheet’s price
and then to market price of the plant. We should have pushed them to their reservation price
by maintaining our position on initial offer for a little longer.
Further, in our homework, we should have researched the other party’s BATNA. We should
have taken a clue that their plant is a specialized plant and there is always scarcity of buyers
for a specialized plant. Further, it was in their interest to get out of the business and hence they
were willing to sell their running plant. But since we focussed on avoiding negative outcomes
and their claims were quite aspirational, the overall price settled close to their target than ours.
I also felt that during the end of the negotiation, we fared poorly at the final settlement price
and felt for the even-split ploy. We had good reasons for our initial and intermittent offers
whereas they were not able to justify the premium that they had put on the market price of the
plant. Yet, we had moved from $8.3 million to $16.5 million and they had just lowered from
$22 million to $19 million. And during the final settlement of the plant price, they started to
employ the even-split ploy and we took the bait. Hence, we settled at $17.85 million which
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was double the price from where we started and they conceived a mere 18.5% from their initial
offer. This is a big learning for me as to when to employ or avoid the even-split manoeuvre.
Another area of improvement is to be aware of the silence zone. There were multiple occasions
when the Green team went into silence. This was probably to ponder on their own positions.
We mistook that silence for dissatisfaction and placed another offer. This led to we using a lot
of our bargaining surplus and appearing weak and anxious in the negotiation. Though the
overall outcome was still positive for us, the main reason for that was because the case was
designed as such in which we had a big bargaining zone. But in real life, when the level of
uncertainties are high, such position of weakness will hurt my position as a negotiator.
The last strategy that I need to learn is with respect to my behaviour. I need to appear more
assertive during the conversations. As previously mentioned, during the negotiation, we
anchored our offer multiple times from insurance value of $8 million to book value of $12
million to market price of $16 million. And before placing a new offer, we took a break and
discussed internally within the team. There were times during the break when we were
negotiating our own selves and diminishing our own stance that we took few minutes ago. We
were more concerned that our low offers are offending the opposite team. But we should have
grasped this fact better that if they need more, they’ll ask for it. So instead of them asking for
themselves, we started advocating their position within ourselves and this led to generous,
multiple offers from our side. Realization during the class debrief that the BATNA for other
side was mere $6 million further reinforced our behavioural deficiency that we were quite
liberal and lacked assertiveness.
2) What was the impact of your target, your BATNA, and each side’s first offer on the
negotiation?
For us, our BATNA was worth $37.5 million. Whereas the market value of Seltek plant was
$16 million. This created a big bargaining zone for us. Further, it created a lot of confidence of
striking a favourable deal if we stick to the basics. But at the same time, it also created a lot of
interest in getting this deal done. The issue with our BATNA was not only about the money
but also the uncertainties associated with it. Our BATNA involved building a new plant and in
all practicality building a new plant involve high risk of delays. And each month’s delay was
associated with a loss of $1 million. Hence, the psychology of our team was to focus on the
economics associated with the deal rather than targeting the larger chunk of the negotiation pie.
I firmly believe that if we had a stronger BATNA and a narrower bargaining zone, the final
result would have been much better than the existing settled price.
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With respect to our target, we created of weak target with a wide range of $11 to 16 million.
This too had a negative impact on our side of negotiation. Such wide range allowed us to go
easy during the anchoring & re-anchoring process. After the class lecture, I realised that a better
target is a single number or with a narrow range. Further, a sound negotiator needs to
aggressively defend his targets till he reaches closer to the target or gets a good idea of the
reservation point of the other side.
With respect to placing first offer, our homework allowed us to open the negotiation with an
aggressive first offer. The offer was such that it indeed created chilling effect. We did get a
strong feedback from the opposing side that with such an offer, the negotiation might not last
long. However, we were prepared for such a feedback and placed a type of forced-request to
bring to the table their first offer.
With respect to the counter-offer, the Green team was forced to take a break after our first offer
and come up with a revised strategy. But the Green team did a commendable task of bringing
the counter-offer that diminished the prominence of our first offer. The evident shortcoming
from our side was that we let them re-anchor the negotiation with their counter-offer that was
at a much higher price point. At that very instance, either our team should have re-anchored
once again or forced them to come up with a revised offer closer to our first offer.
3) What was the pattern of concessions in the negotiation? Did it favour either side more
than the other, and if so, why?
The pattern of concession was one key area that was left totally unplanned during the
negotiation homework of our team. During the negotiation, the pattern, timing or magnitude of
concession was random and subjective. The only point that saved us was that within our team
only one person was made responsible for giving concessions. Hence, the concessions were
considered during the break we took within the conversations. This allowed us to keep the
magnitude of concessions in control. After the class, I could relate our pattern to the White Hat/
Black Hat strategy where we offered big discounts at the start of the negotiation but decreased
the magnitude of discounts at the latter half of the role-play. However, I feel in such a
distributive negotiation, we could have followed the reverse strategy that is the Black
Hat/White Hat strategy, particularly when the zone of agreement and reservation points of the
other team were not clear.
Also, there were some points that the other team employed that worked well against us. First,
they employed the strategy of tapered concessions, where, they kept on reducing the size of the
concessions. And because we had a wide range of bargaining for us, we kept conceding large
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discounts for their small discounts. Further, towards the end of the negotiation, they started
offering price in decimals. This further reinforced our belief that their reservation point is very
close. I intend to master and deploy this manoeuvre in future negotiations.
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Reflections on “Atlas GlobalTel” role-play (lecture 4)
1) What strategies and tactics did you use to maximise your points? Were they effective,
and why (or why not)?
In the Atlas-GlobalTel role play, our team played the role of senior executives from GlobalTel
(a global mobile device manufacturer) and we had to negotiate terms and conditions of
agreement with Atlas (a talented software designer for mobile interface and applications) for a
new mobile phone interface. This type of negotiation fell under the category of integrative
negotiation where joint value could be created and claimed. During the negotiation, there were
certain tactics that worked well for us.
First, we started the meeting straight away by talking about the vision of the phone and the
business. We set the scene right in the first five mins. We communicated about our focus on
understanding the big picture and meeting each party’s needs. It was essential that both parties
be prepared to work closely to craft an outcome satisfying to both. This gave common direction
to both the teams and helped focus on the integrative approach.
However, before the meeting, homework was essential. It was essential to understand our
BATNA, reservation point, an ambitious but realistic target (that unlike last meeting, we were
extremely serious to defend) and a trigger point somewhere in the middle (which alarms us that
we have moved far from target and are approaching our reservation point). The negotiation
involved 12 elements to be negotiated and without ample preparation, we could have easily
been swayed from a good deal. During the homework, we also decided to bundle the issues
instead of dealing one at a time. Not only would it save us time but also create room to generate
value by exploring other party’s interests. We prepared our reference spreadsheet, which we
aggressively used throughout the meeting to remain on-track. We planned not only the targets
but also our concessions on the spreadsheet that helped us avoid giving too many concessions.
While we created initial bundle of elements, during the meeting we kept revising these bundles.
For example, we added software IP protection to non-compete period and non-compete penalty
to create higher joint value. Revising of bundles also helped us avoid any near-deadlock
situation as new value was created continuously.
Next, we used logrolling effectively. There were several occasions during the meeting, when
we realized that some parameters such as software development fees and creative control rights
are of more significance to the Atlas team than they were to us. On the other hand parameters
such as delivery schedule and handset manufacturer were very important to our cause. Hence,
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we made exchanges for such parameters that were of high importance to us in return of what
were more important to the Atlas team.
Further, to reach final agreement, we also deployed the PreSS (Pre-settlement settlement)
technique, where we were creating to temporary/notional agreements on various elements of
the agreement such as non-compete period and penalty and kept moving forward in the
negotiation. These intermittent agreements coupled with the option of revisiting them if
required provided confidence and pace to the negotiation process. The idea that nothing is
agreed till everything is agreed always kept the reservation points alive till the end of the
negotiations. However to solidify these intermittent agreements, we kept consolidating at
various stages of the meeting to ensure our concessions are in-check and transition from
intermittent solutions to the final agreement is smooth.
Finally, we touched the most difficult element – royalty, which was of high importance to both
the teams and required distributive approach. To claim low royalty fees, we decided to again
bundle that with some elements of high importance to Atlas fees. We never wanted to win on
every issue. Hence, we decided to give further concessions on software development budget
and Atlas fees. This tactic worked for us and we were able to settle at a very low royalty.
However, I feel that though the above strategies worked for us but the most valuable underlying
tactic that worked for us was again behaviour. We used hand gestures and voice modulation to
drive our points without hurting other party’s esteem. We managed our relation in a cordial
way and kept clarifying again and again to cooperate and not compete. We kept our focus high
on creating a win-win situation and offering various combinations of elements to create
maximum value. And while creating value, we avoided any premature concessions. Within our
team, one member played the role of moderator and other became a tough negotiator. While
the moderator helped build trust and didn’t let the meeting reach a standoff position, the tough
negotiator helped claimed a large portion of the pie.
However, out of the whole meeting there were also some strategies that didn’t work for us.
First, like the last negotiation role-play, this time too we were keen and hence made the opening
offer. But our opening offer had almost no impact on the further course of negotiation. The
other side made the counter offer that was based on the other extreme of the negotiation scale.
The reason for such disconnect was that we created and made the offer with respect to our
interests only. Whereas in an integrative negotiation, it is crucial to understand each other’s
interests first before placing an offer. Hence, the whole exercise of placing the offer without
understanding each other’s interests went futile.
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Second, the process of negotiation started with a distributive approach over each element. This
wasted at least 10~15 mins of the meeting without achieving any meaningful result. Further,
we were lucky that such an approach didn’t worsen the overall environment. The chances were
high that the approach could have spoiled the whole atmosphere to reach a win-win deal. We
took a little break to discuss within ourselves. After the break, we pivoted over our initial
approach and started proposing bundled offers. We then started to realize that some value is
being created during the notional agreements. Hence, I feel that we were late in uncovering
other party’s needs and interests. The time wasted initially could have well been utilized at a
later stage to further create any value if left.
2) How well did you manage the process of information sharing, and how would you
improve that process if you were to undertake a similar negotiation again?
The overall process of information sharing was based on three principles: two-way flow of
information, build trust by sharing interests and active listening backed by immediate action.
After the futile attempt of anchoring the negotiation around the first offer from our side and
counter-offer by the Atlas team, both teams decided to share their respective interests. To start
the flow of information, we decided to start with less contentious, technical issues such as
chipset and handset manufacturer and then proceed to commercial discussions later. These
initial settlements established immediate rapport and provided confidence to both the teams to
share more information. Further, it was important to share and understand the level of
significance of each parameter to individual team for which we invited thoughts of Atlas team
on each parameter followed by our thoughts on that parameter. This helped us grasp the
implications that each parameter has on the potential agreement. We were also able to catch
some indirect messages that revealed Atlas’ top priorities. Further, there were common
interests such as Chipset and Atlas Special Edition phone on which both teams laid early
emphasis.
The trust-level was further enhanced by carefully listening the top priorities and interests of
each team and incorporating those in the offer. For example, we wanted full control over the
manufacturing processes and Atlas team wanted to protect the software rights to safeguard their
competitive advantage. This agreement was immediately incorporated in the offer to build the
trust-levels between the two teams. Further, to deal with more contentious issues, we provided
various options for bundles that were roughly of equal importance to us but affected the Green
team differently. And during answers to those questions (use of inductive reasoning), we were
able to identify areas where value could be created for both the teams.
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However, if I were to undertake a similar negotiation again, I have identified some areas where
I could improve.
Thompson details the concept of illusion of transparency where we feel that the other team
knew much about us whereas that is not the case. Same is the case vice-versa. I believe we
were caught by this illusion of transparency. We believed that an element such as Target retail
price was an obvious right for GlobalTel and Atlas team should have had no reservations about
it. This clearly was not the case and Atlas team too had an interest in such elements. Hence,
we could have shared relative priorities early and avoid false/illusory conflicts.
Next, adopting approach of integrative negotiation, I would prepare myself better by asking
more diagnostic questions about interests and priorities. This helps in finding more about the
other team’s reservation points. I have to remain conscious about the fact that underlying
interests and stated positions are different and I should explore that part a little early in the deal.
In this deal, it was at mid-stage that we started asking as to what other team wants and what
we want. Exploring interest and priorities should be the starting point. In case of placing an
offer, if forced to present an offer at an early stage, I would create more multiple offers to be
offered at the same time. This helps avoid at being caught off-guard by other team’s early
positions, save time and nudge the opposing team in sharing its interests and priorities.
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Simultaneous Offers. The strategy suggests to prepare multiple offers that are of equal
value to oneself but they can be of different value to the other party. I intend to use this
strategy in future negotiations to find out other party’s interests by design and not by
accident. Though, I still need to be careful of the caveat associated with MESO. That is not
to let the sharks (aggressive negotiators) to cherry pick favourable components from
multiple offers. To tackle such sharks, I have to actively listen to their criticism and ask
probing questions about the apparent problems they feel about the various offers. Their
answers should sufficiently reveal their interests. MESO further helps in overcoming
concession-aversion from the other party very fast. Multiple offers present some favourable
options to the other party, which opens the other side to share their interests and offer some
concessions in return.
iii) During the final stage of the negotiation, after expanding the pie, it has to be sliced. We
need to cut the pie wisely so that we don’t leave the other party feeling pity and vulnerable
in future negotiations. Such unwise act can also open the doors to our competitors. Hence,
we need to anticipate what other party’s needs are so as to create realistic goals. We should
score maximum on our top priorities but also be willing to concede points on not so high
priorities. Create a balancing act is vital. Further, in the given case, objective criteria in
terms of points were defined for each parameter of the agreement. This helped a lot in
creating various scenarios such as BATNA, reservation point and target point. Hence, in
future negotiations too, I’ll try and quantify my interests and priorities in terms of points or
monetary value or some other objective metric.
iv) Behaviour and attitude are very important. We need to build trust and rapport as fast as
possible to strike a winning deal. Sharing priorities early helps building trust fast. We
should leave the hardest issues for last as we need to have a good start. And then, we need
to maintain the good atmosphere throughout the negotiation process. But at the same time,
we have to remember that Win-win doesn’t mean compromising. We have to focus on
cognitive perspective-taking and not empathize. We need to place all the issues on the table
and share information. And in the process, try and identify the implied needs as well.
Positive attitude helps but is not enough to create and claim value. We have to uncover
other parties needs and priorities by asking probing questions and revealing some of our
own priorities. We need to stay flexible about how interests are met. But in all
circumstances, we need to place our interests before relationship. Complete trust or full co-
operation makes it very difficult to slice the pie later in the negotiation.
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Reflections on “Viking Investments” role-play (lecture 5)
1) What were the key factors that made it difficult to reach an agreement?
In the Viking investment role-play, we played the role of Sandy Wood, owner of Woodcrafters
- a fine carpentry business. Sandy recently did a subcontract work for condominium project
undertaken by Viking investments that was owned by Pat Olafson. Pat also happens to be
Sandy’s landlord and a long-time creditor. The dispute involved the main issue of additional
expense incurred by Sandy in the condominium project but there were couple of other small
issues such as Sandy’s financial difficulty to continue business in Pat’s rental building and the
long-term credit of $200,000 due to Sandy. The main factors that made it difficult to reach an
agreement were:
i. Fundamental error of attribution - When Pat returned from his holidays, in which he
also made a non-amendable deal of the condominiums, he saw the additional bill of the
woodwork from Sandy. He had no prior information about any such additions. This made
him believe that Sandy wants to extort more money from Pat. On the other hand, Sandy
had incurred these additional expense only after due permission from Fawn, Pat’s secretary.
Sandy took this whole pain of additional work only to improve the project’s quality image.
In fact, Pat and Sandy had many a times in the past discussed about this common intention
of condominium project’s superlative quality image as the competitive image. Further, the
depressed real estate market made Sandy believe that Pat’s company, Viking investments
is in financial trouble and hence wants to bleed money out from its subcontractors. Pat’s
vacation (which indeed was a business trip) further aggravated the thought in Sandy’s mind
that Pat has the requisite money but has ill-intentions of not paying his sub-contractors.
Further, Fawn’s lack of communication to Pat about Sandy’s intent and timely information
to Fawn further intensified the communication gap and the subsequent dispute. Neither side
knew what information the other sides has. The lack of information and unawareness of
other sides perspectives made the deal very difficult.
ii. Lack of Time – Time was very critical in the whole situation. For Sandy, any delay in a
favourable decision from Pat would have affected his business continuity. The pressure
from the oak subcontractor to pay in the next 15 days was immense. Sandy had to pay off
his bills and staff’s salary on immediate basis. The verbal conflict with Pat made the
situation worse. Hence, the emotions were running high in the whole situation. In such
circumstances, requesting Pat for immediate favours would have made Sandy look
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desperate. Chances were that Pat might conceive Sandy’s intentions wrongly. Hence, the
need for immediate decisions worked against the more objective approach that Sandy could
have taken in normal circumstances.
iii. Sandy’s BATNA – Sandy was in a very difficult financial condition. He had a very weak
BATNA. If Pat were not to cooperate, then the only option left for him was to go bankrupt.
Further, he still had to sell the house that he with his family was living in. The worst part
was that Sandy’s BATNA of going bankrupt can unfortunately also be interpreted by Pat
as a threat. Hence, the upcoming meeting with Pat was based on a very weak BATNA,
irrespective of distributive or integrative approach that Sandy adopts.
iv. Narrow Zone of possible agreement (ZOPA) – After the class debrief, I realized that it
was very difficult to create a balanced deal. If Pat agrees to pay the full differential amount
claimed by Sandy, then he has to forego lucrative investments. But if Sandy takes the brunt,
he’ll have to sell his house, discontinue his business and still go bankrupt. In Sandy’s
invoice that is raised to nearly $1 million, the positive bargaining zone was only of $10,000.
A good integrative deal could only be reached if both sides are at the best of their creativity
and cooperation. In the highly emotional environment generated due to verbal conflict,
along with business pressures and time crunch, reaching an amicable agreement was
extremely difficult.
The agreement we reached with Pat included receivable of $860k, revised rent of $4.5k per
month, rollover of Pat’s earlier credit and additional $10k which amounts to total $210k loan,
selling of Sandy’s house and co-investing $360k in both the Pat’s upcoming investments. This
deal fulfilled the interests of both the team. Sandy will be able to keep his crew together,
maintain his business continuity, reduce his existing rent by 10% and receive enough money
from Pat to pay the lumber’s bill. Pat, on the other hand, will have a much enhanced image in
the market after the positive reviews he would receive from the condominium project with
superlative woodwork quality. This will serve as competitive advantage for his upcoming
projects. We were able to create an additional value of nearly $200k in the whole deal. Pat
would be able invest in both his projects and Sandy wouldn’t have to pay his debt of $200k
immediately to Pat. We were able to reach such an agreement that is advantageous to both the
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parties by successfully employing interest-based approach in the negotiation. I firmly believe
that had we employed any other approach, such a deal would not have been possible where
despite all the difficulties mentioned in the previous answer, not only both parties’ interests
were met but also additional value was being created. Further, I have elaborated our interest-
based approach and tactics employed that worked in our favour while reaching the deal.
First, we opened the meeting on the right note. Our team decided to offer an apology at the
start of the meeting for the previous verbal conflict. In the apology, we stressed on not to focus
on the dispute and rather focus on making our interests very clear to each other. This set the
tone of right for the further course of negotiation. The other team in turn evaded any usage of
threat and avoided displaying its power and rights that it derived from the contract signed
between Woodcrafters and Viking investments. The advantage of Sandy or Pat displaying
power to each other would have been that each individual wouldn’t have looked weak against
each other. But that wouldn’t have solved any purpose of resolving the dispute. In fact each
individual decided to not to recognize each other’s power which resulted in such a dispute. The
teams understood well that any usage of power and rights might not result in a favourable deal
and in fact if legal measures come into the picture, it will come with additional, crippling legal
costs that will seriously disrupt both the businesses. We shared our information about our
potential to go bankrupt but the tone of information sharing was more of sharing our difficulties
rather than displaying any power that we could use against Pat. We also had the moral authority
as we did the job after approval from Pat’s secretary, Fawn and further the job was done with
good intentions to create additional quality value in the project at the lowest cost. But again,
this information was shared to inform Pat rather than imposing our right. We were open to
learn what motivated Pat to take such a drastic step against Sandy and then started searching
for ways to meet each other’s needs. Such an approach helped us lot in alleviating mistrust
between Sandy and Pat.
Next, we used GRIT (Graduated Reciprocation in Tension) effectively. At one instance, we
reached a deadlock as neither of us had enough money to support each other’s needs. We re-
established negotiations by initiating a concession of selling our house. This was a little gamble
as we stated that we’ll commit to selling the house without knowing whether other side would
reciprocate or not. Selling the house was a difficult, emotional decision for Sandy. But if the
deal was not made, Sandy’s BATNA of going bankrupt included losing the house anyway.
According to the norm of reciprocity, we expected a reciprocation of benefits from Pat. The
strategy worked and the other side felt responsible for making a concession in return by
providing an option for Pat’s loan rollover. It further helped downplay the significance of the
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rent of Pat’s building on which we could extract a 10% discount. This exchange encouraged
the negotiation process to begin again. After that, both teams started the process of brain-
storming and focussed on interest-based questions and proposals. It was during this process
that the idea of co-investing came up which we happily agreed to.
After this role-play followed by its debriefing in the class and coupled by Thompson’s theory
associated with dispute resolution, there are two main learnings that I am taking forward to my
future negotiations.
a. Disputes can be resolved by separating people from the problems: While resolving
disputes, people have the tendency to fall trap to fundamental error of attribution. In this
role-play, we too wrongly assumed that Pat’s intention might be to squeeze money out of
his sub-contractors to support his business. After the debrief in the class we realized that
Pat has already sold the condo’s in an non-amendable deal and the total profit that he was
making was $220k that was less than the additional invoice of $250k that Sandy raised to
Pat. Hence, Pat’s fury as a business owner was justified to an extent. While resolving the
dispute, it was essential that Sandy and Pat focus on the interests and not the position that
each one took. Positions change in due course but interests may or may not change. It is
crucial that one is not too emotionally attached to one’s information. As a negotiator, one
has to get rid of the biases generated through one’s limited information and try to unveil
the information and perspectives that the other party have.
We could have also started by uncovering the facts such as miscommunication created by
Fawn. But again, uncovering facts don’t guarantee resolution. If the dispute is deep-rooted
in the history such as the Israel-Palestine issue, there is a potential of escalation rather than
resolution and hence uncovering facts can become a dangerous ploy. As realized in the
class example of Northern Ireland story of Good Friday agreement, in case of historic
disputes, people are more interested in the past rather than creating a bright future.
And as has been the case in previous role-plays, good behaviour proved to be of essence
once again. We focussed on active listening and kept acknowledging other team’s feelings.
Once we got a hint of an investment opportunities that Pat has, we offered our support. To
credit the other team, they didn’t cross the line when there was a proposal of selling Sandy’s
house. They left the decision to us and never imposed selling the house as a mandatory
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option. Further, when Michael from the Green team asked – “how else can his team support
to resolve the dispute”, changed the course of negotiation. More information started to flow
and quick value was created. As discussed in the class, other options to reduce tensions are
change of meeting’s settings, location or use humour – though humour can be risky at times.
b. Interest-based approach creates value: Thompson states interests are a person’s needs,
desires, concerns, fears—in general, the things a person cares about or wants. Negotiators
who focus on interests attempt to learn about the other party’s underlying needs, desires,
and concerns. Interests-based negotiators attempt to reconcile differences in a way that
addresses parties’ most pressing needs and concerns. During the role-play, we adopted the
interest-based approach, kept our focus on exploring to find Pat’s interests and finally
reaped benefits by not only meeting each other’s interests but also by creating additional
value by the means of co-investments. Had our approach been power-based or rights-based,
at best we could have got a mediocre deal. In case of power-based approach, Pat’s power
came from the contract. Sandy had bankruptcy as power. But use of power wouldn’t have
been sufficient to reach a deal. Rather display of power hurt oneself too. In terms of rights-
based approach, again Pat’s rights derived from contracts and Sandy had moral rights. But
rights would not have created value in the agreement. My learning is that people have to
focus in their interests rather than power or rights. However, if other party use rights-based
or power-based approach, we don’t counter them and rather refocus or influence them back
to interest-based approach. We need to re-state their interests to reinforce the point that we
are with them and we are thinking of them while negotiating on our points. Our subsequent
probing questions and tone of the questions should be framed in such a way that the other
party is pulled back to concentrate on the interests. As an effective negotiator, we don’t
have to react to the situation. Rather we need to create an efficient response to counter the
power struggle and create an interest-based winning agreement.
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Reflections on “Alpha Beta” role-play (lecture 7)
In the Alpha-Beta role play, we played the role of Betans. We were the leading manufacturers
of robots in the country of Beta and were seeking opportunity to export Robots. Our negotiation
style included collective decision-making, being formal, indirect, patient, unemotional and
passive. We were to deal with Alpha Incorporate, who is a large diversified company in the
nation of Alpha. Beta is interested in getting the access to Alpha market and Alpha’s artificial
vision technology. Whereas, Alpha wanted to acquire manufacturing expertise of building
robots and hence wanted to import maximum models from Beta with lowest possible number
of units per model. The deal is a cross-cultural deal with Alpha’s style to be less formal and
more direct and Beta style to be more formal and indirect. The result of this role-play was that
we were not able to reach an agreement with the Alpha-team.
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partnership but they were only keen to transfer our manufacturing-expertise in the first year
itself. Our long-term vision could not match their short-term goals and hence it was not
possible to reach a deal.
b) Did not respect our sacred value of hierarchy – At the start of the meeting, we introduced
our team along with the role and responsibility that each team member has. However,
during the negotiation, the Alpha team members kept asking direct questions about the
areas which were not relevant to that specific team member of our team. For example, they
asked me couple of times about the royalty fees. My role was confined to managing
operations in the Beta company and hence I had to redirect that question to my team
member. This resulted in restricted flow of information. Further, it was easy for the Alpha
team to discuss their constraints in-front of us and re-iterate their offer but we couldn’t have
discussed our teams reservations upfront. We had to take multiple breaks to discuss with
the revised offers. This resulted in significant wastage of time and hence restricted the
ability of our team to employ negotiation techniques such as PreSS or GRIT.
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I couldn’t resolve the matter of number of models to be shared with Alpha team or the
number of units to be produced per model for the purpose of exports to Alpha, I directed
the decision to my superiors in the meeting. Similarly, my superiors were looking for my
intervention when matter of transferring of our manufacturing expertise came up or when
we had to discuss timelines for production of robots with Alpha’s artificial vision
technology. This to-and-fro wasted significant time in the negotiation and frustrated the
other party’s team members.
b) Our style of disagreement was not explicit: During the meeting, we never gave upfront
direct answers. Rather we used a lot of down-grader words such as maybe, a little, might
not be possible, etc. This confused the Alpha team as to whether we completely agree with
the proposed solution or not. When the Alpha team was very far from reaching our positive
bargaining zone in terms of number of units per model, our continuous usage of
downgraders may have passed the wrong message that they were near to our agreement
point. Further, as mentioned previously, due to the high power-structure within the team,
we took a lot of time in providing answers, avoided direct eye-contact and went to silence
when confronted with uncomfortable solutions, and took frequent breaks to discuss the
matters internally. Further, we provided a concise, single answer and continuously repeated
our previous answers to multiple questions posed by the Alpha-team. This indirect
communication hampered creativity and possibility to come up with any innovative
solution. Hence, there was little opportunity created for integrative negotiations.
3) Did you correctly interpret the behaviour of the other side in the negotiation?
During the preparation for the negotiation meeting, we anticipated Alpha team to belong to
low-context. We expected them to behave individualistically and be direct in their
communication. During the meeting, we observed the same behaviour. We found that the
power distance was less as both Alpha team members were speaking freely and didn’t seek any
permission within. Further, their extreme initial offers reflected the fact that they belong to a
culture of high-masculinity where winning is celebrated. We felt that they were motivated by
achievement of high-results. They kept on pressing us on all the four open issues and
demonstrated that all the issues are really important to them. Further, norms of formality and
status didn’t apply to them. We had repeated the status and role of each of our team members
during the meeting, yet they were asking direct questions without acknowledging the status of
the team member within our team.
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However, after observing their impatience and assuming that we have correctly interpreted the
behaviour of the other team, we too decided to use a little direct approach. In our probing
questions to them, we started asking objective, close-ended questions with a Yes-or-No as the
answer. But at this point we faltered. After forcing them to award multiple concessions to us,
we decided to come up with a near final offer. We thought that the Alpha team would be willing
to negotiate more after presumably our final offer but the Alpha team took that as our final No
and that was the abrupt end of the negotiation. I believe that we should have gone for more
subjective, interest-based, open-ended questions and should have tried some trial and error by
placing multiple offers. The MESO approach, learned in the last role-play, might have helped
us in knowing their interests and reaching an amicable agreement.
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within a culture. In our preparation to the Alpha-Beta case, we stereotyped the Alpha team.
We thought that direct questions and objective answers might help us connect better and
find more about their interests. During the placement of last offer, we anticipated that there
is scope of negotiation still left. However, the meeting came to abrupt end without any deal.
Hence, stereotyping is a needless exercise. Similarly, Thompson also explains the concept
of ethnocentrism. If egocentrism refers to unwarranted positive beliefs about oneself
relative to others, then ethnocentrism refers to unwarranted positive beliefs about one’s
own group relative to other groups. Expert negotiators are required to overcome such
uncalled-for biases. It is vital to understand that Globalization has had a huge impact on
bridging the gap between cultural differences. In the modern times, company culture
precedes country’s culture.
iii) Cultural training is significantly beneficial – When people from different cultures get
together to negotiate, there are many differences to take care of. But for the negotiators,
since the differences are more, hence scope of integrative outcomes increases. Negotiators
need to realize that discomfort is a natural consequence of different cultural styles. Hence,
negotiators need to take the differences in one’s stride and prepare well to find out how
various aspects are perceived. For example, find out how time or written contracts are
perceived in the other culture. Do people welcome time management or they feel offended
by time-saving tactics. Researching on how to build trust is central too – is it cognitive or
affective trust that works. Cognitive trust is based on the confidence you feel in someone’s
accomplishments, skills, and reliability. This trust comes from the head. In a negotiation it
builds through the business interaction: “You know your stuff. You are reliable, pleasant,
and consistent. You demonstrate that your product or service is of high quality. I trust you”.
Affective trust arises from feelings of emotional closeness, empathy, or friendship. It comes
from the heart. In most emerging markets, negotiators are unlikely to trust their counterparts
until an affective connection has been made. Seniority, long-term orientation, patience level
can all impact deals. For example, age difference or status needs is a significant factor in
public sector dealings. When a junior ranked or a young official negotiate with a senior,
ego-issues surface very quickly. Hence, choosing the right representative is the key,
especially in hierarchical team structure, where the power distance is significant. Further,
decision-making mapping is an important part of the preparation. It is essential to know
decision-making power of the person sitting across the table. My key learning is that
flexible people can adapt their styles to match the style of the meeting environment and
fetch positive outcomes.
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Personal review
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stern warning, angry eyes or a loving kiss had an impact over him. However, since the impact
started waning, I now have to negotiate with him every day over his next toy or a new cartoon
that he can watch. Further, in a negotiation, the key is that objective can’t be met by the wishes
of just one-side. Negotiation do require a commitment from all the sides on the execution of
the clauses of the agreement, else it becomes a temporary prank rather than a permanent deal.
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should be treated as having different priorities in different negotiations. Sometimes the
relationship is most important; other times creativity is the measure of how well I negotiate. In
my initial days as a professional, there were instances when I bluffed pseudo-
circumstances/false figures or when I pressed the other side too hard to take undue advantage.
People have left some negotiations with me thinking that they never want to see me again.
Those instances left me in poor light as a negotiator. I have learned from those instances and
decided to use integrity and collaboration as my strength. I have further witnessed that
emotions are contagious. Hence, most of the times I use good mood for creating integrative
solutions. At present, my relative strength can be measured by people walking away thinking
that they would again like to see me and be pleased to negotiate with me.
Weaknesses: My biggest problem in a negotiation comes with time. Many a times, I fail to
estimate as to how long should a negotiation take. The problem I have identified with myself
is that I start a negotiation with no idea as to how long it’s going to last. Every negotiation
is only worth so much of my time. I need to have to set a time frame for it. This means that
there will be a time that the negotiation starts, I need to expect it to have a certain momentum,
and then expect it to wrap up by a certain time. The reason that this is so important to know is
because if it’s not done by the time that I expect it to be over, then perhaps it’s time to walk
away from the negotiations. I understand that there is not a fixed way to determine how much
time a given negotiation should take but I can leverage this based on my own experiences.
My other weakness that I have identified is not asking by assuming that something is non-
negotiable. From the negotiation classes, I have learned that when you think like a negotiator,
everything is negotiable. In some of my own negotiations, I have witnessed that when I
decide that the terms for anything can be changed in my favour, a plethora of opportunity
presents itself. Rules can be modified if there simply is a proposal of an ethical, viable, and
mutually beneficial alternative solution. Powerful negotiators are rule breakers. The key to
successful negotiations is asking for what one wants. Many a times, I fear rejection or the
fear of looking greedy and that has got in my way. But I need to overcome this thought as I
very well understand that rejection is never personal. It is merely a reflection that I did not
present a viable argument substantiating why I should get what I want. My offer was
rejected, not me. When you get a no, it means the other person needs more information.
Experts claim that people say no an average of three times before they say yes. One way to
master the art of rejection is to get rejected but still be assertive and keep asking (though
presenting a more convincing argument).
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My last weakness is getting stuck in the dilemma of honesty and trust. With respect to
dilemma of honesty at times, I find it difficult to balance the amount/level of truth to be
shared with the other party. On the one hand, telling the person everything about my
situation may give that person the opportunity to take advantage. On the other hand, not
telling the other person anything about my needs and desires may lead to a deadlock due to
lack of information. Further, through my own experience, I have realised that forgery of
information/emotions is uncovered ultimately. And this truth have been further reinforced
in class’ learnings and associated role-plays.
With respect to the second dilemma of trust, I need to create a balance in as to how much
to believe of what the other person is telling me. I have had a history of believing everything
that the other person said and then been taken advantage of. There were also instances when
I believed nothing and reached a deadlock. I need to consider factors such as reputation of
party, past experiences, and present circumstances. I know that the principle, "truth is ever
green" is very much relevant for this situation as well otherwise one has to speak countless
lies to conceal one lie. And even then truth is exposed ultimately. However, I need to learn
the art of probing questions in order to instigate the truth from the other side.
3) What are the key strategies and behavioural changes that you personally need to
implement to improve your negotiation skills?
From the class learnings till date, I have realized that I need to incorporate some behavioural
changes (elaborated ahead) to be a better negotiator.
First, I need to transition from a cooperative negotiator to an individualist negotiator. Co-
operators and individualists take different roads to reach win-win outcomes. Individualists use
the multiple-offer strategy and indirect information exchange; in contrast, co-operators share
information about interests and priorities directly. I always felt that it is important that I
maintain a high level of concern for my own interests, as well as those of the other party.
However, the downside with co-operative negotiator is that often, two co-operators end up with
a lose-lose agreement because they fail to make their interests known to the other party. Since
my style matches more of a cooperative negotiator, I need to be more assertive, confident, and
prudent in negotiations so that I can expand and slice the pie more effectively. One of the
effective strategy listed in Thompson is to bargain on behalf of someone or something else,
not yourself. I feel that this strategy will prove effective for me. Many a times I have felt selfish
while negotiating. To get away from this limiting perception, I can think about other things
such as my company or my family and negotiate on their behalf. Indeed, when I have negotiated
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on behalf of my office colleague in his absence, I was able to achieve better outcomes. Next,
creating an audience is another effective technique. In one of my earlier assignments, the
company had “four-eye principle”. This implied at least two team members were required
while negotiating. I remember myself negotiating more assertively when accompanied by my
colleague. Thompson further reinforced this learning in his text. Next effective technique
mentioned in Thompson is insisting on commitments and not just agreements. This strategy
will definitely help me in my weakness mentioned in the earlier section – overcoming dilemma
of trust. This is because an agreement puts too much trust in the other party. Instead, I can insist
upon commitments and specific promises from the other party, with consequences if they are
not followed. This will help me understand better on how much to trust the other side.
The above mentioned tactics will help me become an individualistic negotiator who prefers to
maximize his or her own gain and is indifferent to how much the other person is getting.
Second and last competency that I need to learn is the art of refocussing my opponents on
interest-based discussion if they have adopted rights-based or power-based approach. In
earlier instances, I have succumbed to falling in the trap of reverting my opponent with the
same approach as his. In the class, I have learned that the best tactic in such a scenario is not
to reciprocate at all. I need to inculcate self-discipline and ensure that I don’t get personal in
such scenarios. Strategic cooling-off periods i.e. small breaks in the discussions are quite
effective. Further, if breaks are not possible and responding is necessary, then to respond back
with an interest-based answer (showing as if the question/comment was not passed at all). The
strategy of using Behavioural Reinforcement is also beneficial. That is if I have planned to
make a concession, do not offer it to the other party immediately after he or she has misused
rights or power. In doing so, I would end up reward the very behaviour I wanted to extinguish.
I also need to ensure that I am not making unilateral concessions as it is not effective for
refocusing negotiations. There may also be instances when the other party needs to know
that I have power too. I may use anger strategically to gain benefits. Sometimes, effective
negotiators need to wield power simply to demonstrate that they have it. However, threats must
be backed up with actions to be credible.
At the end, I’ll like to wrap up by reminding myself that it’s all about practicing and sharpening
the acquired skills of negotiations. No matter how much I learn during the class, I will for sure
forget my learnings quickly unless executed in the real world. John F. Kennedy rightly said –
“Let us never negotiate out of fear. But let us never fear to negotiate”.
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