iMIE – iMSCPM – IM4 INDIVIDUAL EXAM Leadership & Managerial skills Consulting - Negotiation skills Prof. Massimo Lupi - Prof. Luca Baiguini Deadline: March 23st at 11:00 Student full name (in CAPITAL letters): GRASSI GIULIO Prepare a report in which you analyse a negotiation using the models shared during the lesson. The report should be structured as follows: 1) Description of the situation 2) Describe personal style and motivational factors according to the learned model 3) Personal conclusions FORMAT: maximum 3 pages, 2000 characters each (blank spaces included). The figure involved in this negotiation has mainly been the CFO and a couple of other employees from his department; regardless of the matter, me and my boss (CPO) have also been involved due to the importance of another project parallel and related to this mediation. On the other side of the negotiation, as our counterpart, we have a manager from a Danish property management company. The focus of my company was over a full purchase of a facility given the cost savings over a long haul. Whilst the owners of the land were obviously more inclined towards a renting contract given the possible profit premium generated by the latter, as a result the entire process protracted for much longer than expected. In the first place, my firm contacted the Danish company several times to request help either through a discount over the rent or a purchase at a specific amount which neither of the two were accepted by the latter. Here are recognizable within the counterpart’s manager two traits of styles: Controller, in the sense of the priority of their objectives and the resolute decision making in regards to the negative response taken and Logic in the sense of the usage of time with the purpose of gathering as much information possible at the expenses of an increased overall timing and the probable unpredictability shown through our first requests. Additionally as a result of the two previous traits, a drive to defend is clearly present: given the specific system of values which they’ve probably felt as threatened, as well as a drive to acquire and to bond: defined by their motive to keep the negotiation on regardless of our opposite requests. Our CFO argued that our business would have not brought any kind of disorder or bother in terms environment given the usage that we were going to make of the facility in contrast with the players already placed in the nearby plants, showing in this first part clear traits of controller with the feel of useless time spent and a resolute decision making. Contrary to the counterpart, our side has shown a clear drive to learn (given the seek for new and the usage of rationality) up to a certain extent where a drive to acquire has come into place: through the research and pursuit of a final agreement which, by the end of the mediation, has been followed by a clear drive to bond. This first part could also define an example of bounded rationality where the counterpart was opting for a sub-optimal decision as it wasn’t going to consider other major variables. The decision was being simplified in order to make it easier to make a decision with limited information and also being caused by a time constraint. The fact that from our side we have taken into consideration a “lower bound for determining the minimum outcome” (Arias, V. C., 2008) we would have required from the negotiated agreement, risking in this way the fall into a failed negotiation but also setting in that way a baseline for a potential outcome in order not to go below it, follows the concept of BATNA (Best Alternative To Negotiated Agreement). Up to this point of the mediation both of the parties have focused their efforts and attention over a single issue: the type of contract to be established. There are therefore clearly recognizable the traits of a distributive kind of negotiation. Thus, adding issues on which to discuss could have been a fundamental tool to create value, allowing for a transition towards a more integrative kind of negotiation. The property management company, at first, was not inclined to share any type of information with us as well as showing firmness over their price policy through the immediate denial of the request for a lower fixed rent cost. Bringing to light the problems arising from the excessive focus of both parts on a single issue. “negotiators who pay attention exclusively to price turn potentially cooperative deals into adversarial ones” (Sebenius, J. K., et. al., 2001). It has been fundamental from the side of my firm to have exercised pressure selectively over the process, henceforth having thought about trade offs present in the two displays. As a result, an agreement was established defining two years of rent followed by a certification of the possibility to purchase the facility at a fair market price after having fulfilled the agreement previously stated. This was possible due to our CFO's creativity, who, rather than allowing self-interest to determine the final result, was able to effectively close the negotiation by introducing other factors into the process. Matching, in this way, a novation kind of agreement as well as showing clear traits of a creative style (along with the social and logical ones) through his optimism shown towards the counterpart and interest in the definition of a creative outcome. Also, towards the end, the counterpart has shown a clear shift from a more distributive type of negotiation (leveraging on many different factors) to an integrative one (being able to eliminate the persistent information asymmetries, the impact of cognitive biases and moving towards a seek for efficient mutual concessions); therefore allowing for a future and long-term relationship. It has been clear how both parties have neglected the other side’s problem. “Tough negotiators sometimes see the other side’s concerns but dismiss them” (Sebenius, J. K., et. al., 2001) mainly because helping each other would have implied value for their own side. The different perceived values of the different variables clearly defined the presence of very distant negotiation processes also related to the very unrelated cultures. It has been fascinating to understand how the availability of the counterpart (and vice-versa), gathered throughout the process, has also been due to the fact that the selectively taken compromises have not caused us costs or harm whatsoever but rather benefits. Bibliography ● Arias Castillo Victoria. 2008. “Making Rational Decisions in Negotiations” Academia.edu ● Babcock Linda, Murningham Keith, Thompson Leigh & Pillutla Madan. 1999. “The Information Dilemma in Negotiations”. The International Journal of Conflict Management. ● Goldwich, David. 2010. Win-win negotiations – developing the mindset, skills and behaviours of win-win negotiators. Singapore: Marshall Cavendish International Asia Pte. ● Mouzas, Stefanos. 2006. “Negotiating Umbrella Agreements”. Negotiation Journal. ● Raiffa, Howard. 2002. Negotiation Analysis: The Science and Art of Collaborative Decision Making. MA: Harvard University Press, Cambridge. ● Schelling, Thomas. 1960a. “An Essay on Bargaining” in The Strategy of Conflict, pp. 21-52. Harvard University Press, Cambridge ● Schelling, Thomas. 1960b. “Bargaining, Communication and Limited War” in The Strategy of Conflict, pp. 53-80. Harvard University Press, Cambridge. ● Sebenius, James. 2001. “Six Habits of Merely Effective Negotiators”. Harvard Business Review, pp. 87-95. ● Sebenius, James and Lax, David. 1986. The Manager as Negotiator: Bargaining for Cooperation and Competitive Gain. New York: The Free Press.
