NEGOTIATION
Paige Turner – Bestbooks Case
Paige Turner – Best books
• Contract negotiation between an author and a book
company.
• 8 issues to negotiate over. Point totals are on the back.
DO NOT TALK ABOUT POINTS, but realize that you want
to maximize your point value.
• You have 30 minutes to reach an agreement
• CORRECTION: Bestbook’s point sheet has wrong
header, rest of the page is ok
Solution
• What is the max point value for Turner’s Agent?
• What is the max point value for Bestbooks?
• Who has the highest point total?
Issue
Royalties
Contract
Signing
Bonus
Number of
print runs
for the book
Number of
weeks that
Paige has
to promote
the book
Bestbooks
Terms in
Contract
Turner
Total
15%
13%
10%
7%
5%
1,000
2,000
3,000
4,000
5,000
6,000
5,000
4,000
3,000
2,000
7,000
$50,000
$40,000
$30,000
$20,000
$10,000
0
1,000
2,000
3,000
4,000
5,000
4,000
3,000
2,000
1,000
5,000
5
4
3
2
1
3,500
3,000
2,500
2,000
1,500
3,500
3,000
2,500
2,000
1,500
7,000
35
30
25
20
15
3,000
2,500
2,000
1,500
1,000
100
200
300
400
500
3,100
Fixed sum
7,000
7,000
Fixed sum
5,000
5,000
Compatible
5,000
3,000
2,300
1,500
Variable Sum
Issue
Number of
books
Bestbooks
Terms in
Contract
Turner
Total
6
5
4
3
2
500
400
300
200
100
500
1,000
1,500
2,000
2,500
1,000
$0
$15,000
$30,000
$45,000
$60,000
5,000
4,000
3,000
2,000
1,000
0
1,500
3,000
4,500
6,000
5,000
Number of
countries
where the
book will be
distributed
14
12
10
8
6
4,000
3,500
3,000
2,500
2,000
4,000
3,500
3,000
2,500
2,000
8,000
Number of
book clubs
that will
adopt the
book
5
4
3
2
1
7,500
6,000
4,500
3,000
1,500
5,000
4,000
3,000
2,000
1,000
12,500
Advance
Variable sum
1,800
2,600
Variable sum
6,000
7,000
Compatible
6,000
4,000
7,500
2,500
Compatible
Issues
• Fixed Sum: distributive, best thing to do is trade off
• Variable Sum: integrative, potential to optimize mutual
gain. Gaining information from each other would lead to
both sides getting maximum amount of points.
• Compatible: integrative, both sides have the same
interests
Issue
Terms in Contract
Royalties
Contract Signing
Bonus
Print runs
Weeks of Promotion
Number of books
Advance
# Countries
Splitting
Bestbooks 20300
Turner 20300
# Book Clubs
Total 40,600
Bestbooks
Turner
Total
15%
13%
10%
7%
5%
$50,000
$40,000
$30,000
$20,000
$10,000
5
4
3
2
1
35
30
25
20
15
6
5
4
3
2
$0
$15,000
$30,000
$45,000
$60,000
14
12
10
8
6
1,000
2,000
3,000
4,000
5,000
0
1,000
2,000
3,000
4,000
3,500
3,000
2,500
2,000
1,500
3,000
2,500
2,000
1,500
1,000
500
400
300
200
100
5,000
4,000
3,000
2,000
1,000
4,000
3,500
3,000
2,500
2,000
6,000
5,000
4,000
3,000
2,000
5,000
4,000
3,000
2,000
1,000
3,500
3,000
2,500
2,000
1,500
100
200
300
400
500
500
1,000
1,500
2,000
2,500
0
1,500
3,000
4,500
6,000
4,000
3,500
3,000
2,500
2,000
7,000
5
4
3
2
1
7,500
6,000
4,500
3,000
1,500
5,000
4,000
3,000
2,000
1,000
12,500
Fixed sum
7,000
7,000
5,000
Fixed sum
5,000
5,000
7,000
Compatible
5,000
3,000
3,100
Variable Sum
2,300
1,500
1,000
Variable sum
1,800
2,600
5,000
Variable sum
6,000
7,000
8,000
Compatible
6,000
4,000
7,500
2,500
Compatible
Issue
Terms in Contract
Royalties
7,000
Least Optimal
Bestbooks 16500
Turner 12,500
Total 29,000
6,000
5,000
4,000
3,000
2,000
5,000
4,000
3,000
2,000
1,000
3,500
3,000
2,500
2,000
1,500
100
200
300
400
500
500
1,000
1,500
2,000
2,500
0
1,500
3,000
4,500
6,000
4,000
3,500
3,000
2,500
2,000
5
4
3
2
1
7,500
6,000
4,500
3,000
1,500
5,000
4,000
3,000
2,000
1,000
12,500
Weeks of Promotion
Number of books
# Book Clubs
Total
1,000
2,000
3,000
4,000
5,000
0
1,000
2,000
3,000
4,000
3,500
3,000
2,500
2,000
1,500
3,000
2,500
2,000
1,500
1,000
500
400
300
200
100
5,000
4,000
3,000
2,000
1,000
4,000
3,500
3,000
2,500
2,000
Print runs
# Countries
Turner
15%
13%
10%
7%
5%
$50,000
$40,000
$30,000
$20,000
$10,000
5
4
3
2
1
35
30
25
20
15
6
5
4
3
2
$0
$15,000
$30,000
$45,000
$60,000
14
12
10
8
6
Contract Signing
Bonus
Advance
Bestbooks
Fixed sum
7,000
7,000
5,000
Fixed sum
5,000
5,000
7,000
Compatible
5,000
3,000
3,100
Variable Sum
2,300
1,500
1,000
Variable sum
1,800
2,600
5,000
Variable sum
6,000
7,000
8,000
Compatible
6,000
4,000
7,500
2,500
Compatible
Issue
Terms in Contract
Royalties
Contract Signing
Bonus
Print runs
Weeks of Promotion
Number of books
Advance
# Countries
# Book Clubs
Bestbooks
Turner
Total
15%
13%
10%
7%
5%
$50,000
$40,000
$30,000
$20,000
$10,000
5
4
3
2
1
35
30
25
20
15
6
5
4
3
2
$0
$15,000
$30,000
$45,000
$60,000
14
12
10
8
6
1,000
2,000
3,000
4,000
5,000
0
1,000
2,000
3,000
4,000
3,500
3,000
2,500
2,000
1,500
3,000
2,500
2,000
1,500
1,000
500
400
300
200
100
5,000
4,000
3,000
2,000
1,000
4,000
3,500
3,000
2,500
2,000
6,000
5,000
4,000
3,000
2,000
5,000
4,000
3,000
2,000
1,000
3,500
3,000
2,500
2,000
1,500
100
200
300
400
500
500
1,000
1,500
2,000
2,500
0
1,500
3,000
4,500
6,000
4,000
3,500
3,000
2,500
2,000
7,000
5,000
4,000
3,000
2,000
1,000
12,500
3
2
1
7,500
6,000
4,500
3,000
1,500
Optimal solution
Bestbooks 24100
Turner 29100
5
Total 52,200 4
Fixed sum
7,000
7,000
5,000
Fixed sum
5,000
5,000
7,000
Compatible
5,000
3,000
3,100
Variable Sum
2,300
1,500
1,000
Variable sum
1,800
2,600
5,000
Variable sum
6,000
7,000
8,000
Compatible
6,000
4,000
7,500
2,500
Compatible
Takeaway
• Identify people’s needs and wants as well as your own
• Realize when there is potential for an integrative solution