ANALYSIS OF LIVE8 NEGOTIATION

LIVE8 Negotiation  - Janine Olah

            For my preparations for the LIVE8 negotiation, I used the negotiation checklist.  My overall goal was to get the potential audience for my concert to be able to access information about the concert on the WorldWideWeb.  The issues I had in meeting this goal were to obtain a domain name, and at the same time keep as much money as possible in my departmental budget.  The most important issue was to get the domain name.

             I set my Resistance Point at $1,200,000.00, which represented the one million dollars I had left in my department’s budget, plus the $200,000.00 that my boss said he could collect from other departments.  It was difficult to decide on my initial offer, but I eventually chose to anchor the negotiation much lower than my reservation price to see what would happen.  My initial bid was $300,000.00.  My BATNA was that I would have to pay an outrageous sum for one of the other two domain names.

            I didn’t know a whole lot about my opponent, Kameron Morral, other than that he was from Turkey and that his domain name had been “under construction” for a while.  I assumed that his BATNA would be just to keep the domain name and wait until another person wanted the name. As for his resistance point, this was nearly impossible for me to determine.  I knew that of the three other domains I contacted, two wanted 5 million dollars and one of them was willing to let theirs go for free, so there was quite a range.

            As far as the situation, I was more impatient because the concert was going to start in two weeks and the website was going to be shut down on that domain in one week.  Since Kameron site had been idle for some time, I didn’t feel he’d have much urgency to sell.   

            Looking at the fairness norms, I wanted to focus on the charity aspect of the concert so that he might feel a sense of moral obligation to sell. There were a few topics of discussion that I wanted to avoid.  One, was the fact that I was about have my current website shut down and, two, the fact that two other domains were trying to get 5 million dollars for their similar sites. 

            When I first contacted my negotiating partner I wanted to make sure that I didn’t sound too desperate.  I also wanted to focus on interests by stressing the charity aspects of the deal and tried to appeal to his sense of goodwill. I framed my request as an opportunity for him rather than a need of mine.  I never mentioned my other domain name that was being challenged. I led with my initial $300,000 offer, a full 900,000 lower than my resistance point.  

            I was pleasantly surprised when Kameron returned with an offer of $475,000 because his first offer was already lower than my resistance point.  My counteroffer to his counteroffer was to go up just a bit to $325,000.  I tried to appeal to his emotions by adding the slight dig about taking money from starving children and I added a sense of urgency for him by mentioning that the domain name might not be worth much after the concert, so the time to sell was now.

            His next offer was $375,000, and even though this offer was well within my bargaining range, my role explained that I was to save as much as I could.  So at this point I used the norm of reciprocity by sharing some information with Kameron about the other three domain names in hopes of gaining some empathy from him.  I also “expanded the pie” by offering him tickets to the concert and advertising mention, along with my offer of $350,000  which was splitting the difference between the two latest offers.  At the end, I avoided asking a yes or no question to seal the deal.  That offer was accepted. 

            I felt the negotiation went well and that each of us had some of our interests met.  I was pleased that I ended up well below my reservation point.

            

Negotiating in Teams

Well, as you probably know from previous blogs and role plays, I am a regular user of the "Good Cop, Bad Cop" technique in negotiation.  Therefore, I do see many pros to negotiating in teams.  When using a team approach, though, you have to make sure that both (or all) team members are on the same page.  This does take some preplanning. Without preplanning, your other team members could take the negotiation in a direction that you didn't want it to go.  That is why, as Reading 3.13 points out, it is important to discuss differences in advance and assign roles and responsibilities.




You should discuss differences in advance because typically, you do not want to be arguing with your fellow team member DURING the negotiation (even if you ARE using the "good cop, bad cop" strategy you are only giving the APPEARANCE of not being in agreement). If you don't discuss things ahead of time, you could accidently negotiate against yourself!




Another pro of teamwork that was mentioned in class is that if teams have disagreements on issues, that can actually spark better outcomes.  It was interesting that this was brought up in class because the exact the example you gave of one person giving an idea and the others latching on to that idea without any conflict happened with our group as we tried to come up with our topic for our group project.  I had suggested that each of us come up with a few topics, but that we should not comment on them until everyone had put forth their topics, via a reply-to-all email. I emailed out my suggestions and even stated on that email, "PLEASE ADD YOUR SUGGESTIONS".  However, because I was the first one to suggest anything, the rest of the group then seemed to just comment on those and decide on those, without putting through their own ideas.  I am going to mention this to see if we can get some more variety in the next couple of days.  I don't actually think that my suggestions are the best choices, but I wanted to get the ball rolling since we were a bit behind. 




Assigning roles and responsibilities is very important in a team negotiation.  If roles are clearly defined, then it is less likely that one member of the team will go rogue and put forth ideas and concessions that were not originally agreed upon. And there are some roles that suit certain people's personalities better than others.  Those strengths should be emphasized and utilized in the negotiation.

Update on real world negotiation

When last we left my real world negotiation, I was waiting on the General Manager to respond to my email.  

It took him several days, but I did finally hear back from him on Wednesday afternoon. I really thought he was using the "silence" technique in his negotiation, but he claimed that my email went into the SPAM folder and I don't have any reason to doubt that this was true.

Unfortunately, he was also unwilling to concede to any of my negotiated prices or rent terms that I put forth.  He reiterated what the property manager said about it being an issue of following the Fair Housing Law. I have since done a little research on the Fair Housing Law and although there's nothing to state that all people have to pay the same rent at any property, it does prohibit discrimination based on race, sex, and all other protected classes.  Therefore, I believe that the property management wishes to avoid any accusations of being discriminatory, by simply not negotiating on any prices. That way they would never be accused of giving someone a better deal because, say, the person is white; or avoid the appearance that, perhaps, they were discriminating against a homosexual person because he had to pay more than a heterosexual tenant. 

I still believe that they could have agreed to giving Brad the original shorter lease term, since they already had given his roommate the shorter lease term.  This wouldn't really get them into any trouble with Fair Housing Issues since they could simply honor the first lease term that he agreed to before the new management came.  But, since my son never signed anything, he pretty much is out of luck.  

I believe that this negotiation was doomed from the start because of this Fair Housing issue that I wasn't aware of during my preparations, but at least it was a learning experience. 

Musings on the School Board vs. Teachers Negotiation

This negotiation was one of the most difficult role-playing exercises that we've had to do so far. There were so many variables and some information was unobtainable, such as how much we could save by cutting specific benefits.  This causes us to flounder a bit.

To start off,  my group's role was the School Board and it seems like the role of the school board had so many really negative negotiating points.  It made it hard to make any starting offer that didn't sound like we were jerks.

Another problem we had was our three members were never on the same page.  This was because we ran out of time in the preparation phase. Therefore, sometimes one of us would make an offer,or concede to something, that the others did not actually want to agree to.

A third problem was that I felt that one member of our group simply wanted the best alternative for us in EVERY category.  This person did not seem to want give the teacher's union ANY part of the pie!  This person, in caucus, told me that I was "being too nice" because I wanted allow the teachers a longer notice time.  Meanwhile, I felt that the longer notice time was in our the teachers' interest, our interest and the students' interest, since the teachers would be able to work through the semester causing less disruption.

We came to agreements on some issues, but never came to a complete agreement.  The teacher's union group, I felt, started to become annoyed with us because we had such extreme positions.

One thing I feel that has been happening in some of the successful negotiations though, is that the groups get together and simply "give away the role" so to speak.  For instance, they might say "Our most important thing is this, what is your most important thing?". And then they simply decide to split the issues based on that rather than actually role-playing the scene out.  In a real negotiation, should we give away that info right off?  I thought not, because I thought that if you kept some of that to yourself, then you would APPEAR to be giving ground when really it didn't matter anyway.

For example, in a negotiation for a phone deal, if I don't care about a texting plan, in a real negotiation I don't think I'd come right out to the phone company and say "Texting is not important to me but getting a low monthly total price is very important to me"  Wouldn't I instead say, I really need my monthly bill to be X dollars.  Is there any way I we can get to that price?"   And then maybe the phone company might say, "Well we cannot give you a low rate with unlimited everything, but you could get a lower rate for voice and data only".  At this point we'd agree, it would look like I gave something up and it would look like the phone company gained something, but in reality I never cared about texting in the first place.  Maybe it's the same thing, I don't know.  Feel free to set me straight on this in the comment section of this blog.

Our group (both sides) on the other hand did not come right out and say what the rankings were for our roles.  We were definitely taking the role play seriously and seemed to realistically assume the roles.

Negotiating for a kitten

My son wants a kitten.  I do not.

I think they are cute and all that, but we already have a very nice dog.  My son is in college and I know that I will end up becoming the caretaker of the kitten, should he get one.

Still, even knowing this, I decided to let him negotiate with me for the acquiring of a kitten.  Because I do not really want a kitten, I have set my reservation point very high.  I told him that he would have to get on the Dean's list 3 semesters in a row.  Also, he will have to pay for the kitten's vet bills and food.  He has agreed to these parameters.  I have little worry since he's never been on the dean's list yet!  Was this a negotiation not in good faith?  Maybe...maybe not.

Actually, if he DOES end up getting on the Dean's list for three semesters then I think the negotiation will have been an interest-based success for both of us.  My interest is for his grades to improve and his interest is to have a kitten.  So if this negotiation succeeds it would be win win!

A Coalition of Geocachers

A kind of coalition that I am a member of is the "Geocaching Hampton Roads" group.

On May 1, 2000, Present Clinton announced that the scrambling of GPS signals would be turned off. When this happened, it allowed civilians to have accurate GPS Data.  On May 3, 2000, a man named Dave Ulmer hid a bucket of trinkets in the woods and announced it's location as a set of GPS coordinates via a newsgroup.  This was the first instance of the hobby called "Geocaching".

Geocaching became more and more popular as more and more people were able to afford GPS receivers. People would hide ammo cans in the woods and publish the coordinates on the new website geocaching.com.  My own family became involved in Geocaching in 2002 in Newport News Virginia.  My kids were young enough to enjoy it as a treasure hunt, and my husband and I liked getting outside and exploring new parks and trails.

                                         My sons finding their very first Geocache in 2002

In early 2003, I was seeking a way to get together with other people who shared the hobby.  So I created a group called "Geocaching Hampton Roads", and set about publicizing and trying to find others who would be interested in this coalition.  I started out by using the geocaching.com website to find people who had recently found caches in my area and then I sent them out a note about the group being formed.  The first week had only 13 members, but the group has since grown to over 700 members. 

While I originally created the group for the social aspect, one of the most important benefits of having this coalition of local geocachers came in the form of negotiating with the local parks.  As geocaching became more popular, some of the local parks had issues with the hobby.  Some did not understand the hobby and thought that it would be a destructive influence to the natural settings.

Because we had a large group, we were able to meet with different parks officials and explain the hobby and assure park officials that the geocachers in the area were generally respectful of the parks. We also organized "Cache-in, Trash-out" days where we would all meet and clean up a park or a trail. The more park managers heard about and saw the good things our group would do, they more willing they were to allow geocaches to be placed in the parks.  To this day, the group has a great relationship with the local parks.   The parks even call upon group members to run geocaching seminars for park visitors and this helps bring even more visitors to the parks. Every year, the group holds a large geocaching picnic at one of the parks.  The last one had more than 500 people, which is good for the economy of the region and for the parks.  I feel this coalition of geocachers has been very successful, and has a good ethical reputation.  The only downside of the coalition that I can see is that on occasion, some people in the group have wanted to formalize the group more, with written bylaws, rules and officers.  So far it has not become a structured group, but I think that in the future, it may. 

                          Geocaching Hampton Roads Group at the annual picnic in 2014

Ethics in Negotiation

I think that some "dishonesty" is necessary in any negotiation.  After reading about the three schools of bargaining ethics (It's a Game" Poker School",  the "Do the Right Thing Even if it Hurts" Idealist School, and the "What Goes Around Comes Around Pragmatist School, I feel that I mainly subscribe to the "It's a Game" Poker School of bargaining ethics.  I think that there are many elements that are like a game when negotiating.  Bluffing and misleading are integral parts of the "game".  My negotiating strategy is often to withhold information that would give my opponent an advantage over me.  Also as in my previous example in my "good cop, bad cop" post,I feel misleading by giving a little false information is acceptable in a negotiation.  As long as no one gets hurt, I don't see a reason to be totally forthcoming in all parts of a negotiation.

Negotiation in job offers

I found the articles and the role-play about negotiating job offers to be very intriguing.  Unfortunately, I feel that in many jobs there isn't a lot of wiggle room to be negotiated on. I think it might depend on the kind of job that one is seeking and also the organization that the job is in.

For example, in lower level jobs and for jobs in any type of government entity, I have never had any success negotiating for salary or for other concessions.  And believe me, I have tried.  Once I was a long-term substitute in the High School and when it came time for the position to be filled, I attempted a negotiation for a higher salary by bringing up the fact that I had experience and also an Associates Degree.  I was simply told the starting salary is the starting salary and there was no room for negotiation.  Another time, I was seeking a government job and I attempted to negotiate a flex-time schedule, and again, I was told there was no possibility.  My husband also had no success when he took a Federal Government job and tried to negotiate for a higher rate of vacation day-earning to account for his military service. It seems that these agencies are very unflexible.  Maybe had I taken the class all those years ago, we might have been able to use a technique that would work to persuade them.

In the role-play, the job that the person being hired for seemed like it was a higher level job and one that allowed for more negotiation.  I guess that the more important the job and the more unique the candidate, the better the chances are for negotiation in the job offer.  

That being said, I have had one successful employment negotiation.  This came about when I was working at the University part-time and wished to take on a second part-time job.  I was selected as the candidate for the second job, however, the job hours of the second-job were the same as the job hours for my first job, 8:00-11:45.  Both supervisors preferred that I work the morning shift at their office. So I had to negotiate a bit with both and we finally worked out a schedule where I work two mornings a week and three afternoons at one job and then vice-versa at the other job. I think I have the oddest schedule on campus, however, it works.

The tension between creating and claiming value

In a negotiation, I believe that the tension between creating value and claiming value comes about because when you create new value and then divide that value between the two parties, you have to give up some of the value that you might have received had you simply stuck to a competitive strategy.  When you attempt to create value, you have to take a more cooperative approach and therefore you do have to reveal some of your information that in a more competitive approach you'd keep closer to your vest. Once that information is revealed, you expose yourself to losing some of your value.  

However, if good will is what you seek, then creating value is a better strategy.  First off, it is a good strategy because the person you are negotiating with will consider the deal to be more fair.  Secondly, both parties should end up receiving a fair share of the newly created value.  And finally, in a strictly competitive negotiation, one party ends with a much larger portion of the pie (or even the whole thing), and so there is a chance that you would end up being the loser if you stick to the competitive style of negotiation. When you create value, you should both end up as winners.

Negotiation role play - Universal Computer Company

In our negotiation role play, I was given the role of the Crawley Plant Manager.

As mentioned in the article "Three Approaches to Resolving Disputes: Interests, Rights, and Power",  "questions of who is more powerful turns on who is less dependent on the other".  In the case study, on one hand, the Crawley Plant manager seemed to be in the power position in the negotiation because the Phillips Plant was dependent on the Crawley plant to supply the modules, so therefore Crawley had a good amount of power.   However, looking at it in a rights-based way, it seemed that the Phillips plant clearly had the right to expect quality parts from the Crawley Plant. This made it difficult for me to take a power-based position in the negotiation.

Both parties in this dispute had a mutual interest in having a higher acceptance rate for the modules. Crawley's interest would be to sell more parts to Phillips without the expense of taking bad parts back or having to repair bad parts.  Another interest of Crawley would be to maintain a good reputation. Ultimately, it was in both companies' interest to get the parts into the Phillips plant with minimal faulty parts, so that production can continue and customers can be served.

As this negotiation played out, the four criteria to compare costs and benefits were apparent.

The first criteria was the transaction costs.  For the Crawley plant, agreeing to a high acceptance rate would be a higher transaction cost for Crawley.  However, at the Phillips plant there was the loss of production and so that was a high transaction cost for them.  Our final agreement tried to balance the transaction costs between the two parties, with Crawley agreeing to a higher acceptance rate on the parts that weren't typically falling below the 95% rate, and agreeing to a reasonable acceptance rate on the 12 parts that were failing at a higher percentage rate.

The next criteria was satisfaction with outcomes.  In our negotiation, both parties were satisfied with the results because it seemed fair and both parties agreed to take some responsibility for the faulty parts.

The third criteria, effect on the relationship, was taken into account during the negotiation.  Since the two plants must continue to work together and because both plants' ultimate goal is for the Universal Computer Company's products to be sold, we were careful during our negotiation not to alienate the other party.  We often used statements such as "I understand your need for that", or "we both want the same thing" to convey our understanding of the other party and to keep the relationship intact.

The fourth criteria, recurrence, was taken into account in our final agreement, in which Crawley agreed to revisit the issue down the road and make any changes to the agreement that might be necessary.

Overall, I think that our final agreement was more interest-based than power-based or rights based, and we came up with a win-win solution in the end.

Good Cop, Bad Cop at Rehobeth

We spent the weekend at Rehobeth Beach. This afternoon we stopped at the toy and kite store and wanted to buy a new kite.

My husband decided on a delta type kite that you could take apart and that had bungies on the cross pieces so that it would fold down more compactly than a regular kite. The price listed on the kite was $44.00.  I thought that that was too expensive.  So I began to play the "bad cop" to my husband's "good cop" as was talked about in Reading 1.3 as one of the ten hard-bargaining tactics.  I complained to my husband in front of the store owner that I thought that the kite seemed to be much more complicated to assemble and take down than the other types of Delta kites, and that we instead would want to consider one of the much cheaper $29.99 models.

During the negotiation, we also discovered that the only kite left of this model was the display model, so I also expressed reservations about having to take the display model.

The store owner then tried one of the other hard-bargaining tactics by belittling my alternatives, trying to convince me that the more expensive kite wasn't hard to put together and that the cheaper kites were not as good.  I still stuck to my position, and continued the bad cop role by quietly taking my husband aside (but in view of the owner) and expressing concern about spending so much on the kite, especially since I was unsure that I would be able to put it together easily.

The owner eventually offered to sell us the display model of the kite for $35.99 and ended up throwing in a roll of kite string as well (enlarging the pie)

While this was a very insignificant negotiation, it did follow some of the negotiation tactics and I was actually aware of the process while we were involved in it.  My reservation price in this negotiation was really the $44.00, though my aspiration price was to get at least 5.00 off. The BATNA in the negotiation was to purchase the other less expensive kite for $29.99. Once I found out that only the display model was left in stock, I knew I could likely get even a better price than my aspiration.

Welcome

Welcome to my blog for MGT 450-Negotiation