Section I

Case Study
1. Answer
Defining Issues and Interests
Negotiators are mainly guided to their wants by firstly identifying their interests, once their
interests are identified, they choose the issues that will attain those interests, and for those
issues they will need to determine their position.
Interests are most often identified by asking ‘why’ you want something to occur. It is
considered non-negotiable, but it provides a holistic view on what the negotiation process
needs to achieve. Additionally, interests are what motivate the negotiators to negotiate
because it brings out the issues and positions for the actual negotiation process.
Issues in negotiation are anything that the negotiation parties have discretion over, but the
end decision must be made by both parties. Simply put, it is anything over that can be traded
and whatever negotiators can trade or trades, is deemed an issue. The deliverable of a
negotiation is any trade that was agreed to or not by the negotiators on each issue or
position.
In summary, interests basically give the purpose of the negotiation as it answers the ‘why’ we
are entering the negotiating and issues lay down the ‘what’ can actually be negotiated to reap
the interest.
Interests – Stay Put Building Co. Ltd. (Stay Put) and NiceWater
The interests for Stay Put is to acquire the ex-commercial land that became available in an
area that fits their criteria. Additionally, achieving the company’s projection of house
building plans for the next 5 years.
The interest in NiceWater is to generate funds for investment. Also, to have the land sold.

Issues – Stay Put Building Co. Ltd. (Stay Put)

1. Price range is no more than £1.2m but prefers to purchase it for as little as £900,000.
2. Condition of sale if being bought without outline planning permission
3. Returnable deposit, to allow for planning permission to be pursued
Issues – NiceWater
1. Sale processing quickly without any conditions of sale
2. Expecting a higher offer for the land
3. Complete transaction over a 12-month period that allows for outline approvals but only
with a non-refundable down payment.

2. Answer
Define Debate
Debate is defined as an act of two-way communication. Messages are sent and received then
it is revised or confirmed with any perceptions of the other party. Additionally, debate creates
the tone of the entire negotiation process and really gives a clearer understanding of what the
other party expects from the negotiation. In negotiation, debates are unavoidable and once
given sufficient time and it is done effectively, it yields great results.
Avoiding Deadlock
Debates can be constructive or destructive, constructive debates yield solutions or acceptable
decisions, whilst destructive debates yield moves the process away from a desirable
outcome.
In this case, Theo should look out specifically for constructive debates behaviour from Finlay
in order to avoid deadlock.
Neutral Statements
Neutral statements are most commonly used in debates. The opinions, views, approach, or
attitudes of one negotiator, or an answer to a question are covered by the view of the other
and are under discussion. It removes negotiation from the destructive range of behaviours.
Communication is key throughout negotiation and the use of neutral statements is the main
avenue for communication.
Questions
Questions are important as they help the negotiator to understand how important or how
badly the other negotiator wants it and what they are willing to trade to have it. Using this
method there should be approximately 4 questions per 15 minutes with most of the questions
being opened rather than closed. For example, Finland may ask Theo ‘What type of condition
of sale are you expecting?’ This can avoid deadlock as it helps Finlay to understand exactly
what Theo is expecting in the condition of sale rather than not taking it into consideration.
Listening Skills
It must be noted that humans are very poor listeners, and if questions are being asked, the
answers should be properly listened to. It is easy to miss important details when you are
distracted by your thoughts which misconstrues the overall answer. Theo can observe if
Finlay is making notes whilst he is answering questions proposed to him and if he requests
clarity on any of the answers given then it can be said that he is actively listening.
Summaries
Most people want their point of view to be understood and if this does not happen, they can
fall into the argument range as they feel as though the person is ignoring them. This can
create a deadlock in the debate which is not ideal for either party. To avoid this situation,
Finland will be expected to demonstrate that he is listening by using sentences that
summarises what Theo said. This way Theo can correct anything that Finland misconstrued
and be assured that he is listening to what is being said. It must be noted that if Finland has
the correct summary of Theo’s point of view it does not indicate that he agrees with him.

3. Answer
Proposal Stage Importance
The importance of the proposal stage is the ability to shift from a loose informal language to
a formal and assertive language that improves performance. The loose informal language is
used in the debate stage as it does not threaten interest, so many negotiators are not aware of
the importance of making the switch during the proposal stage.
A lot of negotiators posit that assertiveness comes across aggressive which can be true, but
they also believe that they should avoid assertiveness throughout the process which is not
true. If the proposal language does not change to formal assertiveness, it is difficult for the
negotiator to believe that you meant what was said in the proposal or that you are confident
that your proposal will be accepted. Projecting formal assertive language in your proposal
lets the negotiator know that you are certain of your proposal.
Theo’s Proposal
Theo can use a proposal to explore a solution to his negotiation. In Theo’s case he can make
the first proposal to test the water, this proposal should be vague in both condition and offer.
He already knows the price that he wants to enter at, and the conditions imposed by the entry
price are stiffer than the exit price of the proposer. Producing a tentative proposal helps to
protect the proposer.
Theo would also need to be realistic with his proposal and to achieve this he will need to
ensure the credibility of his offer to have a particular entry position. This credibility is not
difficult to achieve when the proposal details are vague.
Theo needs to ensure that he is in possession of an effective proposal and an effective
proposal must be conditional, when presented, there should be no explanation, and on
completion of presenting the proposal Theo will need to remain silent. Based on
observations, attention is given to proposals, but this will be dependent on the way they are
presented. Additionally, ensuring that the language used is formal and assertive.
4. Answer
Factors Affecting the Negotiation Process
NiceWater may have interests from other buyers including Mortar Plc who is Stay Put
biggest rival as they were able to outbid Stay Put on 2 out of 3 occasions within the last 18
months. This can definitely affect the negotiation process between NiceWater and Stay Put.
If NiceWater accepts bids from these other parties of interests it means that they will now
enter other negotiations simultaneously, these places Stay Put in a position as it opens the
negotiation process on a broader suspect that it makes much more difficult for NiceWater to
buy into their proposal.
Based on Mortar Plc, who have already outbid Stay Put on two occasions, it can be assumed
that Mortar Plc do possess purchasing power and can be willing to go the distance. If Mortar
Plc is willing to pay more than the maximum that Stay Put is willing to and they are willing
to work with NiceWater terms and conditions, then the negotiation with Stay Put will come
to an end.
Due to the number of potential bids for NiceWater, they can decide to use a red style
behaviour towards Stay Put, especially if they are aware of the importance of Stay Put
acquiring the property. Besides, NiceWater have indicated that they are expecting building
firms to offer a lot more for the land.
If NiceWater reverts to a red style behaviour and Stay Put adopts a blue style behaviour, Stay
Put will be allowing themselves to be exploited and give in to a one-sided negotiation.
Therefore, the best strategy for Stay Put in this scenario is Tit-for-Tat. This means that Stay
Put will enter with a cooperative approach as they are hoping for a successful outcome, but
once NiceWater enters with a red approach they will immediately reciprocate NiceWater
behaviour by playing red as well. Though this approach can end in a deadlock, it will help
Stay Put to maintain their stance in the negotiation.

5. Answer
Buyer / Seller Dilemma
In reality, there is no certainty that any particular offer is exactly what the other negotiator
will be willing to accept. Therefore, assumptions must be made that the first offer is not the
actual offer for exit, and it should be deemed that there is another exit offer at stake.
Negotiators think in ranges, so they know never to accept the first offer as the buying party
enters with their lowest price and the selling party enters with their highest price, which gives
rise to what is known as the negotiation range.
Both parties then have an exit price that is within the negotiation range which they both try to
move each other close to. Then there is a settlement range which is the distance between the
buyer exit point and the seller exit point.
As for this case, NiceWater property was valued at £1m - £1.5m and they used an entry price
of £1.5m whilst Stay Put is not willing to pay more than £1.2m but they prefer to pay
£900,000. If Stay Put goes in with an entry price of £850,000 a negotiation range comes into
play and both parties will not accept these first offers. This shows a gap in the entry prices
and if either party had just accepted the first entry offer, it would have been a rational
decision and neither would have received the correct value for money, or money for value.
Not accepting the first offer can also cause a delay for NiceWater to have more bidders on
board so that they can enter into more negotiations. Entering more negotiations means that
they can have a higher chance in achieving their interest with having minimal ‘buy in’ into
the negotiator’s proposal.

Conclusion
In concluding this case study, for a negotiation process to begin one must identify the interest
and issues of both issues, once this is done a debate must then take place to discuss the issues
that can be negotiated. After the debate, the proposal is done and changing the language to
assertiveness gives the basis in identifying that it is a proposal. Also, in the proposal stage it
is important to not behave as though you are still in the debate phase as some negotiators are
unable to differentiate the two habits. In the interest of this case, it was important to identify
what external factors will affect the negotiation process between the two main parties. The
case also provided a good basis as to why one must never accept the negotiators' first offer.

Section II
Essays
Essay 1
Ploys and Tactics
Ploys are not long-term strategies in the negotiation process, and they mostly provide short-
term gains. Dominance, shape and close are the three different types of ploys and it is more
on the red-style behaviour.
Dominance
Negotiators who feel as though they need to be in control and dominate the negotiation use
this type of ploy. It can be assumed that the reason for utilizing this type of ploy is due to
their inability to handle tough decisions and the only way to avoid making those tough
decisions is to be dominant and limit any negotiation.
Anchoring or High Initial Demand
The Chester Karass approach suggests that one should enter ‘high,’ which simply means to
anchor your entry price. Many prospects who have used anchoring have suggested that they
were able to negotiate better prices, or they have attained high profits.
Notwithstanding this, there are many shortcomings when using anchoring, specifically the
lack of knowing where to enter ‘high.’ If there is a lack of sufficient information in knowing
exactly what a high enough price is to enter with it can instantly jeopardise the negotiation
process as the unrealistic pricing deters the other party from proceeding with the negotiation.
Though the other party can counteract with anchoring at a much lower price, this may cause
the process to be drawn out as both parties are negotiating unrealistically.
A relevant example of this is Mr. Wong having a property that he wants to put on the market
for sale and the property was valued at £1m by the valuators. If Mr. Wong decides to aim
high and enter with a price of £2m. This may instantly deter the interested party from
entering into the negotiation as there will be actual attributes of the place that show the
market value and will determine that an additional £1m is overpriced.
A ‘high’ price entry can also prevent future negotiations with a first-time potential client as
the ability to win over their trust will immediately be lost due to excessive pricing. For
example, the new potential client is looking for a new supplier to supply them with electrical
fans as their current supplier has now increased their prices by 10%. If Mr. Wong enters with
a ‘high’ price of approximately 50% higher than their current suppliers and they may
immediately dismiss any negotiation with Mr. Wong. This is because Mr. Wong price is way
above the market value and the potential client may feel as though they are being exploited
and that the negotiation process will not end in a beneficial agreement.
It can also jeopardise the ability for both parties to settle within the settlement range and may
set the wrong tone for the negotiation process. This can cause the other party to give minimal
effort during the negotiation as they are most likely expecting the process to end in a
deadlock. For example, Mr. Wong is the owner of a wholesale store, and a client wants to
procure laundry detergent, the clients is willing to pay no more than £100 for 50 bags but Mr.
Wong enters with a high price of £220 but realistically expects to settle at £125 for the least.
This discourages the clients as the negotiation gap is wide and the chances of settling in the
negotiation settlement range is low.
Conclusion
In concluding this essay, ploys and tactics are mainly successful in the short-term because
once the other party realizes it, they begin to counterattack or just settle for a deadlock.
Though a ‘high’ entry may be suitable in some instances, there are many situations where it
is not applicable. This is because there is no solid information as to how ‘high’ one should
enter, and this breaks down the negotiation process as the other party loses trust and feels
exploited. Adopting a more general entrance pricing approach that allows for a more realistic
settlement range can result in a successful negotiation process.

Essay 2
Difficult Negotiator
A difficult negotiator is considered as a red-style negotiator who encounters a blue-style
negotiator that is trying to move the negotiation phase to collaborative joint problem-solving
rather than the competitive confrontation phase. This seems like an easy task theoretically,
but practically, it takes a great deal of effort to accomplish. It happens quite often in
negotiation as it is hard for any negotiator to believe that they are being unreasonable, and
they assume that the other party is being difficult. whilst the other party is difficult.
Tit-for-Tat (TFT)
The TFT experiment was carried out by Robert Axelrod, and it consists of three rules. Firstly,
we start with blue then we play whatever was played by the other player in the previous
round, and thirdly, we forgive instantly. Simply put, it reciprocates the behaviour of the other
party without holding any grudges as the party is forgiven immediately.
This TFT approach is very applicable to real life negotiations. In real-life negotiations we
always aim to start off by being cooperative, and in the TFT strategy blue represents this
cooperativeness as it highlights that a positive outcome is high on the achievement list. The
other party can now proceed to play and once they play blue it shows that they are also
willing to cooperate and want to reach a desirable outcome. The next play we will continue
to play blue, this shows the cooperation between both parties to generate a favourable
outcome based on both parties’ interests and issues.
Applying this TFT strategy at the start of a negotiation helps set a cooperative tone for it.
This can make the negotiation process easier as the other party may ‘buy’ into the tone.
This is where Chen enters the TFT strategy and plays red as he does not want to be viewed as
weak so there is no immediate ‘buy in’ into the tone that the supplier (other party) has set.
This now causes the supplier to retaliate by playing red as it just reciprocates the behaviour
given by Mr. Chen. This causes the negotiation process to enter the deadlock phase and if
Mr. Chen does not reevaluate and play blue then it remains at that stage. Once Mr. Chen
plays blue, the supplier will immediately revert to playing blue. This is because there are no
grudges to be held and forgiving is a must, so once Mr. Chen reverts to blue, the supplier
immediately reverts to playing blue. This helps to avoid unnecessary arguments and
escalation of conflicts.
TFT Flaws
TFT do have its obvious flaw, if Mr. Chen is adamant in projecting a strong image, then this
can result in a cycle of defections. Once the strategy reaches this stage, the possibility of blue
being played by either party is far-fetched. If blue happens to be played, it will take a great
effort for the other party to forgive and respond due to it being overladen with past
grievances.
Conclusion
In concluding this essay, the TFT strategy is very useful in the beginning of the negotiation
phase at it sets a cooperative tone for the process and lets the other party know that they are
entering the negotiation with a party that wants to yearn positive results in the interests of
both parties. The TFT strategy do have its obvious flaw with the possibility of it entering a
cycle of defection.