The activity that we did in class on Monday was very fun. We spent the class negotiating a contract for a book company and a new author. Before negotiating the deal I made sure that I looked over the point system on the back of the chart and got a feel for what I wanted to ask for. During the negotiation I let the author tell me what she wanted, and then we tried to find a common ground. My partner demanded a lot out of the deal, but I stood my ground to make sure that I could make as much money as I could for my company. In regards to how many countries she wanted to release her book to as well as the number of book clubs that will adapt her book, I let her believe that I was complying with her needs, even though I was benefiting from the decision as well. This way, when I wanted something more from the deal, I would be able to tell her that I had thus far complied with that she wanted. Before reaching the final agreement, we had some difficulty figuring out how much the author should receive for the signing bonus and the advance. She wanted both an advance as well as a signing bonus. I told her that I was not going to be able to do that. However she then wanted the maximum amount for the signing bonus since I said I was only giving her one or the other. We both sat in silence for a little bit each of us hoping that the other would give in. After about five minutes of silence she finally spoke and said that she would settle with no advance and a $20,000 signing bonus if I gave let her only produce 3 books. I agreed to this because this is what I wanted to begin with.
When analyzing the classes results for this negotiation, I was able to see where me and my partner fell in terms of creating value for us individually, as well as collectively. I was pleased to see that I did pretty well with creating value for myself and my company (bestbooks). In terms of creating value for me and my partner collectively, we didn't do so well. If we had communicated more and found out our common interests we would have been able to help each other out hand in hand and possible maximize profit for the both of us. Even though my partner and I were unable to create value for each other collectively, I was still pleased to see that I did well with creating value for myself.
Wednesday, February 15, 2012
Wednesday, February 1, 2012
Week of 2/1/2012
This week in class we did two negotiations exercises. The exercise that we did today (2/1/2012) was very different from past exercises. Before even participating in this exercise I found the content of the case to be very confusing. This exercise was different because we weren't negotiating on a selling/buying price. We had to really understand the detail of the case before even starting to negotiate. In the Phillips Crawley case I played the role of Crawley. I ended up compromising to what the Phillips representative wanted as soon as we got to meet. I was under the impression that I needed to comply with the Phillips representative because a) it seemed that the issue that we were facing what my fault. b) we were a team working under the same "umbrella" and regardless it didn't matter who was right or who was wrong because in the end both of our efforts are what makes the final product, which ultimately makes both of us money. I felt that by some of the other teams going in and really looking to be competitive and do what was best from them really wasn't going to work out for them. I did realize that I was a little bit taken advantage of in my particular negotiation. I agreed to have my modules screened before they are delivered to the Phillips plant. That was probably not the most cost effective way to settle this dispute. This negotiation really taught me that there are a lot more things that we as business men and women will have to negotiate about other than a buying/selling price. As well as that you really have to pay attention to every single detail on your end so that you are able to put up a better argument.
Sunday, January 29, 2012
Exercise: 1/25/2012
1/25/2012
Today in class we did our first negotiation exercise. The exercise was based on a car sale. For this negotiation each of us played a specific role, one person was the seller and the other was the buyer. I was the seller. Each of us were given a scenario that told us which price we needed to either sell the car at or buy the car. The negotiation was then to either sell the car at the highest price or buy the car at the lowest price. During my negotiation with a classmate, we went back and forth and could not come up with an agreement. She wanted to buy my car for less than I would have received if I traded it in. That wouldn't make sense to do and she wasn't willing to spend more so we decided that we weren't going to have a deal. After the exercise we were able to see how each team did in the exercise and also, some students spoke about how they reached an agreement. It shocked me to see some people buying the cars at a price they couldn't afford which meant that they were going to have to take a loan out for the car, as well as seeing people sell the car for lesser amount than they were going to get if they traded it in.
After the negotiation we learned a lot of valuable vocabulary words that linked in with the negotiation process. Terms included: Reservation price which was defined as the highest price you were willing to spend or the most you are willing to spend. Another term that we learned about was BATNA which is the best alternative to negotiated agreement. To go more in depth with that it's the value of the deal that you will have if you reach no agreement. For this exercise my BATNA would be to trade the car in for a potentially lesser value than selling it. Anchoring was a term that really stood out to me. The person who initiated the negotiation is usually anchoring the other party because they get the first say in the price. I witnessed anchoring in this exercise because I felt anchored by my partner when she gave me a really low first offer for my car. I immediately felt that I had to alter my counter offer because I almost felt embarrassed that for asking something too high. Over all this negotiation was a good learned experience and I plan on using the things that I learned in this negotiation for future negotiations.
Today in class we did our first negotiation exercise. The exercise was based on a car sale. For this negotiation each of us played a specific role, one person was the seller and the other was the buyer. I was the seller. Each of us were given a scenario that told us which price we needed to either sell the car at or buy the car. The negotiation was then to either sell the car at the highest price or buy the car at the lowest price. During my negotiation with a classmate, we went back and forth and could not come up with an agreement. She wanted to buy my car for less than I would have received if I traded it in. That wouldn't make sense to do and she wasn't willing to spend more so we decided that we weren't going to have a deal. After the exercise we were able to see how each team did in the exercise and also, some students spoke about how they reached an agreement. It shocked me to see some people buying the cars at a price they couldn't afford which meant that they were going to have to take a loan out for the car, as well as seeing people sell the car for lesser amount than they were going to get if they traded it in.
After the negotiation we learned a lot of valuable vocabulary words that linked in with the negotiation process. Terms included: Reservation price which was defined as the highest price you were willing to spend or the most you are willing to spend. Another term that we learned about was BATNA which is the best alternative to negotiated agreement. To go more in depth with that it's the value of the deal that you will have if you reach no agreement. For this exercise my BATNA would be to trade the car in for a potentially lesser value than selling it. Anchoring was a term that really stood out to me. The person who initiated the negotiation is usually anchoring the other party because they get the first say in the price. I witnessed anchoring in this exercise because I felt anchored by my partner when she gave me a really low first offer for my car. I immediately felt that I had to alter my counter offer because I almost felt embarrassed that for asking something too high. Over all this negotiation was a good learned experience and I plan on using the things that I learned in this negotiation for future negotiations.
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