MGT 7780: Negotiation Theory and Practice 1 SYLLABUS Winter 2015 January 15-April 30, 2015 INSTRUCTOR Professor Marick F. Masters Director, Labor@Wayne, Professor of Business & Adjunct Professor of Political Science 255 Reuther Library 5401 Cass Avenue Wayne State University TEL: (313) 577-5358 FAX: (313) 577-5359 E-mail: marickm@wayne.edu LOCATION AND TIME Thursday, 6-8:45pm WSU Oakland Center Room 0525 33737 West Tweleve Mile Road Farmington Hills, MI 48331 1 REQUIRED TEXTS David S. Hames. 2012. Negotiations: Closing Deals, Settling Disputes, and Making Team Decisions, Thousand Oaks, CA: SAGE Publications, Inc. [Referred to as TEXT below.] This book is available at the WSU university book store. Marick F. Masters. 2011. The Negotiating Executive. [Referred to as Masters; to be distributed at no cost in class on January 9, 2014.] BACKGROUND Negotiation occurs on a daily basis in all aspects of our lives, even though we might not recognize it as such. The 24/7 news cycle reveals the ubiquity of negotiating in diverse contexts: The U.S. House and Senate negotiating a budget deal; Bristol and Astra negotiating a deal in the pharmaceutical industry; AIG selling its jet leasing business; the UAW and Fiat negotiating the former’s stake in Chrysler; TRW and GM negotiating a price increase; Mayorelect Duggan negotiating an operational plan with Emergency Manager Orr; the efforts to negotiate a new WTO trade deal; and ongoing negotiations connected with the Detroit bankruptcy. On a more personal level, we negotiate with family, friends, colleagues, and untold others on everything from the time to arrange a social gathering to a pay increase and work responsibilities. Negotiating is the basic method we use to make deals, resolve disputes, and arrive at decisions in small-to-large groups. Negotiations are as varied as there are people and contexts: informal settings between friends; semi-formal work settings between peers; formal business-to-business negotiations over sales, tie-ups, mergers, disputes; country-to-country summits over trade agreements. We should always be on the lookout for opportunities to negotiate. It is increasingly rare where we can simply dictate outcomes. We have to NEGOTIATE them. Our ability to negotiate effectively is important because it affects the quality of lives we are able to lead. Failing to negotiation well in certain situations, such as for your first or second job, can have life-enduring consequences. COURSE ORIENTATION This course is designed from a generalist’s perspective. It focuses on negotiations in organizational contexts involving different types of parties. The overarching goal is to provide you with techniques and tools that can be applied in virtually any type of context. Obviously, you will need to know the specific substance of a potential negotiation if you want to do well. That is where your experience, education, and training in the basic functional aspects of your profession, work, and management come into play. But this course does not assume that you have any specialized knowledge. As suggested, the concepts and principles of negotiations apply to any organizational setting in which you might operate, such as the public or non-profit sector. Negotiation skills, principles, and techniques are transferable across professional, personal, and social situations. 2 Negotiating capability is very portable, and that is one of the reasons why you can benefit so much from sharpening it. You want to hone the basic skills of effective negotiating. Please note that most of the real learning that occurs in a course like this one is from role-play simulations and de-briefing discussions. You will learn a lot from your colleagues, who bring a wealth of knowledge and experience that is applicable, regardless of whether your job per se depends on negotiating in a formal sense, as it might in sales or mergers and acquisitions or labor-management relations. Take advantage of the wealth of experience and expertise that is available in this class. Learn from the various media provided: readings, notes and slides, discussions, role plays, de-briefings, videos, and preparation and reflection with your colleagues. We emphasize experiential learning—or learning through practice—in this course. Theory is also important because it addresses the “why.” Why, for example, does a collaborative approach to negotiations offer advantages? It is not because it will make you feel good or that negotiation is about being nice. Rather, it is because it permits the fuller exploration of options, which, in turn, increases your chances of reaching a superior outcome. LEARNING OBJECTIVES AND OUTCOMES This course has three basic objectives: (1) to familiarize you with the overall process of negotiation and its various dimensions, elements, and phases; (2) to develop and practice key negotiating skills, strategies, and techniques; and (3) to promote team-based collaboration. By focusing on these objectives, we will achieve several positive learning outcomes, giving you greater capacity to understand the fundamentals of negotiation, more confidence in negotiating across different situations, and improved negotiating results. At the end of this course, if you apply yourself and keep an open mind, you will be able to: 1. Know when to negotiate and when not to negotiate; 2. Set realistic negotiating priorities and know when a good deal is within distance; 3. Negotiate with difficult counterparts and in difficult situations; 4. Prepare systematically for a negotiation; 5. Know when to walk away from the negotiating table; 6. Use collaborative and competitive negotiating techniques; 7. Understand how multilateral negotiations differ from bilateral talks; 8. Understand when you have negotiating power and how to use it; 9. Appreciate the role of differences in negotiations and how they offer a basis for settlements; 3 10. Break deadlocks and know when to use third-party dispute resolution procedures; 11. Appreciate cross-cultural differences in negotiations; and 12. Gain more experience in working in teams. At the beginning of this course, you will conduct a self-assessment of your negotiations activities, styles, and capability. You will also develop a personal action plan on what you plan to achieve in this course. This course is a chance to set “stretch” goals and work towards meeting them. Effective negotiators, regardless of their level of experience, learn continuously from their mistakes and successes. Your knowledge and skill level in this field of practice is not finite. COURSE REQUIREMENTS There are three sets of requirements in this course: (1) participation in six negotiation role-play simulations; (2) a negotiations paper and class presentation; and (3) a final examination. These requirements are described in more detail. 1. Role-Play Simulations. (60 percent of final grade; 180 points maximum; 30 points per role play, split evenly between participation and peer evaluation of your negotiating counterparts.) There are six required role-play simulations. These role plays will occur in class. You will receive confidential instructions the week before the role play. [You will have the week before the role-play to prepare.]These CONFIDENTIAL instructions are not to be shared with any other person in twoperson or three-person negotiations. In team-based negotiations, you may prepare for the negotiations with only your specific team members. IT IS ESSENTIAL TO PRESERVE THE CONFIDENTIALITY OF SIMULATION MATERIALS. Team assignments will be made in class on January 16th. You may not change your team assignment. Attendance at the role plays is mandatory. If, for a university-sanctioned excuse, you must miss a role- play assignment, you may complete an alternative assignment, which is a three-page single-spaced memorandum detailing how you would conduct the negotiation to which you were assigned. Alternative assignments are due within one week after the date of the pertinent simulation. Failure to turn in this alternative assignment within one week after the role play will result in zero credit for that role play. If you need to miss a role-play simulation please let me know as soon as possible in advance. The learning in this course is based heavily on participating in the role plays. YOU WILL NOT RECEIVE ANY CREDIT IF YOU MISS A ROLE PLAY WITHOUT COMPLETING AN ALTERNATIVE ASSIGNMENT IN THE TIME PERIOD REQUIRED. YOU MAY NOT MISS MORE THAN TWO ROLE PLAY ASSIGNMENTS. IF YOU MISS MORE THAN TWO ASSIGNMENTS YOU WILL AUTOMATICALLY NOT RECEIVE CREDIT FOR ANY OF THE ADDITIONAL ASSIGNMENTS MISSED. Specifics about the alternative assignment are provided below. You will receive 15 points for your participation (i.e. attendance) in the role-play simulation. 4 You may receive up to 15 points based on your peer evaluation, which is completed by your counterpart in the negotiation. The peer evaluations focus on how well you performed in the negotiation. Role-play simulations are NOT evaluated on the basis of whether or not you reached an agreement or how “good” the agreement is. 2. Negotiations Paper and Class Presentation. (20 percent of final grade; 60 points maximum; 30 points for paper and 30 points for class presentation.) Paper is due on the day of your presentation (April 23). Presentation is to be 7 minutes absolute maximum; presentations will be strictly timed. Paper should be five pages in length, typed and double-spaced, and address these specific questions: What were your principal negotiating strengths and weaknesses at the start of this class? What objectives did you set in your personal action plan at the beginning of class? How well did you meet those objectives and what concrete steps did you take toward achievement? What were the most effective and ineffective behaviors you observed during the role-play simulations in class? What are the three key lessons you learned from your experiences in this class? How will you apply what you have learned to your everyday activities? What is the principal piece of advice you would give someone if they asked you what they needed to do to become a good negotiator? Your class presentation should also address these questions. You should prepare a PowerPoint presentation to give to class. Your paper will be evaluated on the basis of written clarity and coverage of the questions. Your presentation will also be evaluated on the basis of your clarity and coverage. A copy of your presentation, as is the case with your paper, is due the day of your presentation. A failure to provide either one on time will result in zero points for this requirement. 3. Final Examination. (20 percent of final grade; 60 points maximum.) Your final examination will consist of six short-answer questions, worth a maximum of 10 points each. The examination is comprehensive in terms of coverage of readings, class slides and other relevant materials. The questions will assess your understanding of and ability to apply relevant concepts covered in class. A study guide will be provided the week before the final. The final will be on April 30th during regular class time. You will have two hours to complete the final. 5 GRADING Grades will be assigned according to the following distribution of points: 276-300 points = A 92% 270-275 points = A- 90% 260-269 points = B+ 86.6% 246-259 points = B 82% 240-245 points = B- 80% 230-239 points = C+ 76.6% 210-229 points = C 70% Less than 210 points = F DE-BRIEFINGS After each simulation (either immediately following or in the next class period), we will conduct a de-briefing. This de-briefing will focus on a set of questions which are in the de-briefing discussion form provided below. It is very important that de-briefings be taken seriously. This is an opportunity to learn from each other. Building negotiation capability requires learning from mistakes and a willingness to change behaviors and practices that are not working. We will draw out lessons learned in these de-briefings. CLASS SCHEDULE The following is a list of topics, readings and activities. Date Topics Reading Assignments Activities in Class January 15 Introduction to Negotiations TEXT: Chapters 1 and 11 Core Competencies Masters: Introduction, Chapters 1 and 2 Collect Student Information Forms (at end of syllabus) Negotiations Activity, Style, Self-Assessment, Personal Action Plan 6 January 22 Game: Airbus v. Boeing Trial Negotiation Team Plan January 29 Getting Ready: How to Prepare for a Negotiation TEXT: Chapter 2 Video February 5 Psychological and Social Aspects of Negotiations TEXT: Chapter 7 1st Required Role Play February 12 Making Proposals: Communications and Decision-Making TEXT: Chapter 6 Video Masters: Chapter 3 Masters: Chapter 4 Telephone and ETechnology Negotiations February 19 Negotiating Power TEXT: Chapter 8 2nd Required Role Play February 26 Win-Lose Negotiations TEXT: Chapter 3 Video Masters: Chapter 5 March 5 Win-Win Negotiation TEXT: Chapter 4 3rd Required Role Play Masters: Chapter 6 March 12 Dealing with Difficult Negotiations and Negotiators Masters: Chapter13 Video March 19 Spring Break Spring Break Spring Break March 26 Closing TEXT: Chapters 5 and 14 4th Required Role Play Breaking Deadlocks and Third-Party Dispute Resolution Masters: Chapters 7 9 and 10 April 2 April 9 Cross-Cultural Negotiations TEXT: Chapter 12 Ethics in Negotiations TEXT: Chapter 9 5th Required Role Play Masters: Chapter 11 Video Masters: Chapter 12 April 16 6th Multi-Party and Agent Negotiations TEXT: Chapter10 Required Role Play April 23 Best Practices in Negotiations Masters: Chapter 14 Student Reports April 30 Final Examination Final Examination Final Examination 2 Hours 2 Hours 2 Hours Masters: Chapter 13 We will adhere, unless necessary due to unforeseen circumstances, to the dates regarding the required negotiations and other course requirements. The schedule of topics covered is an admittedly ambitious one. We will make the effort to keep on schedule in terms of topics, but we will not rush matters if more time is required on a particular topic. However, make the effort to keep up with the readings. You will only be tested in the final examination on those topics covered in class. I do introduce material from the TEXT into class slides for discussion, though I might sometimes take a different approach from the TEXT. THERE IS NOT A SINGLE BEST WAY TO NEGOTIATE. EXPERT NEGOTIATORS, IN FACT, DISAGREE ON WHAT IS BEST PRACTICE IN CERTAIN RESPECTS. HOWEVER, THERE HAS BEEN A CONVERGENCE OF THOUGHT AND PRACTICE IN THE FIELD ON HOW TO NEGOTIATE MOST EFFECTIVELY UNDER MOST CIRCUMSTANCES. AND ONE OF THE EFFECTIVE PRACTICES IS TO BE ADAPTABLE, FLEXIBLE, AND AGILE; ABLE, IN OTHER WORDS, TO THINK ON YOUR FEET. YOU HAVE TO EXPECT THE UNEXPECTED. 8 COMMUNICATIONS AND OFFICE HOURS Class materials, except for confidential instructions for role-play simulations, will be posted on Blackboard at appropriate times. Lecture notes for each week will generally be posted a few days in advance of the relevant session. The best way to communicate with me is e-mail (marickm@wayne.edu). I generally try to answer my email within 24 hours. I do not keep regular office hours, as my schedule is far too crowded to permit such a luxury. I do, however, always try to find mutually convenient times to meet in order to be as accessible as possible. If you need to talk to me by phone, call me at (313) 577-5358. If I am not in and you need to leave an important message, call my assistant, Ms. Octavia Eaton, at (313) 577-5382. Her office location is 249 Reuther Library. For your convenience, the best times to reach me are probably right before or right after class. My office is 255 Reuther Library. The Reuther Library is on the same street as the School of Business, where I also have an office. ALWAYS TRY LOCATING ME AT MY REUTHER OFFICE NUMBER AND TELEPHONE NUMBER (AS ABOVE). RELEVANT POLICIES (Withdrawals, Incompletes, Attendance, Disabilities, Religious Observances, and Class Etiquette) Drops and Withdrawals. According to the University’s 2014-2015 Academic Calendar, the last day to drop a class with a tuition cancellation is January 1, 2015. You may drop a class through the end of the fourth week of classes. After that, at the beginning of the fifth week, you must withdraw from class, which requires the consent of the instructor. It is your responsibility to adhere to these deadlines and associated requirements and conditions. The last day to withdraw from a class, according to the University’s Academic Calendar for 20142015, is March 29, 2015. Incompletes. Except under unusual circumstances, I am disinclined to grant an “incomplete,” particularly in a course such as this. If your schedule is such as to lead to several absences, I strongly suggest you drop the course. You may choose to enroll in a subsequent semester when your schedule is more amenable to attendance. Granting an “incomplete” generally does no one a favor, and only compounds the difficulties students encounter in finishing coursework. For undergraduate and graduate students, Wayne State University policy states that “I” grades automatically convert to an “F” after one calendar year if the work is not completed. There are no exceptions to this statute of limitations. Attendance. Attendance is required, as noted above, in the required role plays and strongly encouraged in all classes. You are also required to give a class presentation on the date designated above. You are permitted to complete an “alternative assignment” if you miss up to two role-play simulations. If you do not complete the alternative assignment and turn it in one week after the assigned role-play, you will receive zero points for that role play. Any missed simulation after that will result in zero points being assigned to you for grading purposes. Disabilities. Wayne State University provides support and reasonable accommodations for persons with disabilities. If you are a student with a disability and need special 9 accommodations, please let me know before the end of the second week of class. In order to qualify for special accommodations, you must contact Student Disability Services at 1600 David Adamany Library (313) 577-1851; Fax (313) 577-4898; www.studentdisability.wayne.edu. Religious Observances. It is Wayne State’s policy to respect the faith and religious obligations of students, faculty and staff. Students with exams or classes that conflict with their religious observances should notify me well in advance so that we can work out a mutually agreeable alternative. Class Etiquette. How you conduct and comport yourself in negotiations is very important. It is obviously important in any aspect of life. In this course, we will insist on civil discussions and polite manners. Turn off cell phones and other electronic devices during class. Do NOT email, text, or otherwise attempt to conduct other electronic business during class. Listen respectfully to your colleagues even if you disagree with the point they are making. Do not conduct distracting sidebar conversations. Treat people as you would like to be treated. Inclement Weather. During Winter semester, inclement weather may lead to the cancellation of classes by Wayne State University. Please monitor for Wayne State University cancellation notices. TEAM WORK As noted, some of our role-play simulations are team-based. You need to learn to work well as a team. You will prepare a team contract in class. IT IS YOUR OBLIGATION AS A TEAM TO WORK OUT WHATEVER DIFFERENCES YOU MIGHT HAVE REGARDING THE PERFORMANCE OF ANY ONE OF YOUR TEAM’S MEMBERS. WE MAY DO A COLLECTIVE CLASS “TEAM CONTRACT.” COURSE CHANGES Due to unforeseen circumstances or other developments, I reserve the right to make changes in the course syllabus, including the schedule and requirements. However, these changes will be made for the benefit of the class, not its hardship. COURSE CONCERNS If you have concerns about class or your performance in class, please let me know as soon as possible. It is generally advised that we discuss these concerns in confidence, so please arrange a time to talk with me at your earliest convenience. 10 ONE-ON-ONE PEER EVALUATION FORM Your Name:_______________________________________________ Name of Negotiating Counterpart:____________________________ Date:____________________________________________________ Negotiation Case:_________________________________________ DIRECTIONS: Please circle the number below that best describes your assessment of your negotiation counterpart in this specific case. Please be as objective and fair as possible. 10 = My counterpart was very well prepared and performed very well in the negotiation. 9 = My counterpart was well prepared and performed well in the negotiation. 8 = My counterpart was adequately prepared and performed adequately in the negotiation. 7 = My counterpart was less than adequately prepared and performed less than adequately in the negotiation. 6 = My counterpart was poorly prepared and performed poorly in the negotiation. 5 = My counterpart was very unprepared and performed very poorly in the negotiation. 0 = My counterpart just showed UP. NOTE: Scores are multiplied by 1.5 to convert to 15-point scale for grading purposes. 11 TEAM-BASED PEER EVALUATION FORM Your Team’s Name:____________________________________________ Your Counterpart Team’s Name:_________________________________ Date:________________________________________________________ Name of Negotiation Case:_____________________________________ DIRECTIONS: Please circle the number below that best describes your team’s assessment of your counterpart team’s performance in this negotiation. Please be as objective and fair as possible. NOTE that this is a team evaluation, so you must decide, as a team, your assessment of the other side. TURN IN ONE FORM PER TEAM. 10 = Our counterpart team was very well prepared and performed very well in the negotiation. 9 = Our counterpart team was well prepared and performed well in the negotiation. 8 = Our counterpart team was adequately prepared and performed adequately in the negotiation. 7 = Our counterpart team was less than adequately prepared and performed less than adequately in the negotiation. 6 = Our counterpart team was poorly prepared and performed poorly in the negotiation. 5 = Our counterpart team was very unprepared and performed very poorly in the negotiation. 0 = Our counterpart team just showed up. NOTE: Scores are multiplied by 1.5 to convert to 15-point scale for grading purposes. 12 ALTERNATIVE ASSIGNMENT INSTRUCTIONS If you should miss a required negotiation role-play simulation, you may complete this alternative assignment to receive credit. You are permitted to miss NO MORE THAN TWO ROLE-PLAY SIMULATIONS WITHOUT LOSING ALL POINTS for each additional missed required negotiation role-play. Complete this assignment and submit it no later than the class period immediately following the assigned Thursday evening role-play simulation during which you were absent. Assignments may be submitted to me electronically at marickm@wayne.edu. You will need to acquire the confidential instructions pertinent to the role play in order to complete this assignment. ASSIGNMENT For the role-play simulation you have been unable to attend, prepare a three-page, typed, single-spaced memorandum describing your plan on how to conduct the negotiation from the perspective of the role you are assigned. If you miss a one-on-one negotiation, address the memo to yourself; if it is a team-based negotiation, address the memo to the chief negotiator of your team. Answer each of these questions in your memorandum: 1. What are the key issues involved in the negotiation? 2. What asking, target, and reservation prices would you set? 3. What is an ideal settlement from your perspective? 4. What is the best settlement realistically attainable? 5. What are the other side’s likely priorities in the negotiation? 6. What are the key interests of your side and the other side? 7. What is your best alternative to a negotiated agreement (BATNA)? 8. What are the other side’s possible best alternatives to a negotiated agreement? 9. What kind of objections do you anticipate to your negotiating proposals? 13 DE-BRIEFING QUESTIONS After each role play simulation (either during the same class period or the following one), we will conduct a de-briefing. We will ask some of these questions during each de-briefing: 1. What were the principal outcomes of the negotiation? 2. How do the outcomes compare to your asking, target, and reservation prices? 3. Are you satisfied with the outcomes? 4. What key effective and ineffective behaviors did you observe during the negotiation? 5. What would you do differently if given the chance to do the simulation again? 6. What advice would you give to the other side to help them improve their performance? 14 STUDENT INFORMATION FORM DIRECTIONS: Please complete this form and submit it at the end of the January 9th class period. Thank you. Your Name:_______________________________________________ Your Current Occupation:____________________________________ Your Current Employer:______________________________________ Years of Work Experience:____________________________________ Undergraduate Degree (Institution and major):___________________ Professional Goal:___________________________________________ E-mail:_____________________________________________________ TEL (Day Number best to reach you):____________________________ 1. Why did you sign up for this class? 2. What are your top three objectives in this class? 3. Have you had prior formal education or training in negotiations or conflict resolution? If yes, be specific as to what type of education or training. 4. What types of negotiations do you want to practice in this class? 5. Give a brief description of a recent negotiation in which you have been involved at work? (You need not mention any names.) 15