Summary: This was a multiparty negotiation, which involved 6 players all with very different negotiation styles. It was an exercise in which teams easily form a coalition. There were concessions about the value added each team would bring to the “table”, and my team in a situation of power saw how negatively the other teams reacted in name of fairness and how important was to share the pie.
During this exercise there was a 3-stage process: individual assessment, team’s assessment and negotiation.
1) During my individual assessment: I did a thorough analysis of what I believed it was Stockman’s fair value. My reservation price was $215,000 as I did a mean value between 230,000 and 197,000. However I was prepared to accept 197,000 in case my counterparties had convincing arguments or/and have used the Sharpley’s method for distributing the pie.
2) During Stockman’s assessment, my team: My partner was comfortable with my analysis and we rapidly agreed on the strategy. He was very favorable of having a cooperative attitude. As a team, we decided to start negotiating as a group of 3 in order to expand the pie to everyone.
3) During the teams’ assessment when we reassembled: There was a consensus that we were better off together than separately, and we decided to do a simultaneous negotiation in order to guarantee that no one was left out of the deal. Everyone wanted to have an even participation. There were two main breakpoints that change the course of the negotiation: the anchoring and a vertiginous switching of power positions.
What did I do right?
– I did the anchoring of the thought process; I presented the scenario that was more favorable to Stockman, my team. As below: – I Assumed that 480 total was the fair value and started backwards by subtracting the added-value from the person that left the deal. Based on this analysis Stockman was the biggest contribution to the pie, it represented 56.25% of the conjunct agreement. – United was not receptive to this deal, and they were not impressed that at my eyes they were worth only 12.5%. United instantly turn to Turbo for a deal. That attitude was surprising to me as I was expecting a more aggressive tactic of United to do a collision with Stockman.
– My initial splitting did not convince United and Turbo as in total they had less than partnering together. I knew and acknowledged that, so I offer Turbo and United some of my 270 share. That was the right thing to do, however I should have reclaimed something in exchange. One should only give up a share of the pie if it has something in return. “Free lunches turn out to be expensive lunches” in the means that people will always ask for more if they don’t feel they need to compromise. – I was not favorable at all to divide equally the pie. I knew my value and was determined to not let go what I considered my fair bit.
What did I do wrong?
– I started to get nervous and eventually I panic when I realized that Turbo was starting to be more interested to negotiate with United. United in the midst of an angry Turbo, took advantage and ask for a bigger pie to continue with Stockman. This was a crucial moment, which I internally panic. I should have asked for a break and set again my direction with my partner. Internally I needed “some minutes in the balcony”, to decompressed. – When I saw that Turbo and United were building up forces, I put in a table a completely new negotiation, which was very disruptive, compared to the previous one:
– In this negotiation scenario, United saw their share increasing from 60 to 90 and Turbo would remain more or less the same. Turbo felt berated and betrayed, based on the equity theory they did not accepted and demanded for more. – I learn a big lesson, never radically change negotiation positions.
Doing such a radical change underestimates the seriousness of your previous arguments and injures radically your position. One should take the time to negotiate and not feel compelled to do quick decisions. In this particular exercise I should have listened more. I got exposed for trying to control and leverage my position of power. Nevertheless, I managed to do a deal still within my initial reservation price.
What would I like to do different?
– My Stockman partner was sitting on the bench next to United I guess that made me feel in a certain point of the negotiation isolated. Adding to that, I was the only one in the negotiation with calculations and without my phone to add up and do the recalculation of the values on the spot. – I would mirror the behavior of my colleagues next time, if no one shares calculation sheets I will not show any that I have made. Next time, I will push myself more to be more spontaneous and try to use more persuasive arguments than analytical calculations during the negotiation. – Next time I will listen more and try to understand what is considered as “fairness”, for instance United just being part of the deal might have been fair per se. I lost a good opportunity to stay only with my first analysis and just duel on a psychological construct that United was a small company that developed research in an area that was not Stockman’s main interest, so being part of the deal for United was already a bonus. (I had a better relationship with Turbo).
– At the end of the negotiation I just wanted to protect my reservation price at all cost, I lost control and got in the frame of the yes bias. Maybe I am not as much of a risk taker as I thought I was. – Next time, I will get in line with the intentions of my counterparty and announce my intentions and which are the concessions that I think are reasonable. It is always good to start conceding little and slowly progressively do some concessions. People love to feel they are doing progress in their negotiation and it should be gradual – higher satisfaction for the people involved. – It was good to have done an analytical analysis, however next time I will not share entirely my thought process. I should have used my good planning for my advantage during the negotiation.
Courtney from Study Moose
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