Theoretical Perspectives of Negotiation - Case Study Example

s of Theoretical Perspectives of Negotiation: Negotiation is often attributed with the privilege of being called an art since hard and fast rules of science don’t always apply. However, the negotiator is expected to analyze and make judgments about the resources available and the bargaining power of the other party. This implies that certain techniques and strategies may be applied while negotiations are at play, to reach a favorable agreement. However, similar techniques may not uniformly be applicable in every situation but they may be acquired after experience and adequate training. In this context, literature review from various sources may offer credence in understanding the concepts, issues pertaining to the concepts and also the best practices being utilized by the experts. In the present scenario, where a negotiation is being bargained to keep the best interests intact, an analysis of relevant literature may be necessary. Also, since the deal is being addressed to another party also having similar monetary interests at stake, the theoretical framework addressing such complex situation must be incorporated. Furthermore, since the negotiation is taking place via email conversation, this element must also be considered while negotiating with the other party. To serve the purpose, the report compiling the outcomes from a three day seminar on negotiations with difficult people and difficult condition, published by Harvard may prove to be helpful. The finding point out to the concept of ‘bounded awareness’ which implies that the scope of the discussion must be broadened which negotiations. In other words, a broader array of thoughts and resources must be put into the negotiation to multiply the options available and also to understand the scenario better (Harvard 399-401). Furthermore, another important aspect which the finding touches upon is the significance of precedents which have been set up already. In other words, past decisions in the field (past negotiations with the same person) may act as yardsticks to measure future success in terms of negotiation outcomes. Also, the findings also comment on the critical nature of negotiations where a quick response is required. This, according to the discussion held at the seminar, is the true of negotiators since he/she is expected to seize any opportunity which comes in the way of the deal readily and making rational judgment within a narrow time frame. In the simulation being demonstrated here, these findings may prove to be quite conclusive, since the bounded awareness regarding the Hollywood industry along with the background of the casting director may lead towards effective negotiation. Similarly, the time frame to reach a negotiation with the direction is also narrow, thus, every clue must be analyzed critically to make best use of the time. However, to further predict a model in this context, to make the best possible deal out of the situation, further literature must be explored. Fisher, Ury & Patton also highlight some interesting insights about making an attractive offer. The study implies that the success of a negotiation lies in making an offer to the other party which is more attractive than their BATNA (Best Alternative to a Negotiated Agreement), otherwise there is no chance of convincing the other parties (Fisher, Ury & Patton 33-34). The simulation negotiation may potentially fail if the BATNA of the casting director is ignored while analyzing the situation. The study also offers explanation regarding how a negotiation can be made more successful and impactful, even when the window of opportunity is narrow. This perspective implies that resources are not the only sources of strengthening one`s stance, rather there are many other sources as well. For instance, sounding persuasive and maintaining a good rapport with the other party may prove to be quite impactful for the deal. Furthermore, the situation may be manipulated in one`s favor by underestimating the stakes in the deal and making it sound like the deal is more important to the other party (National education association of the US 13-14). Also, as mentioned above as well, development of a good BATNA is the key to bringing the other party to the unfavorable side of the negotiating table. Though the model being developed during the simulations exercise can make use of all these techniques, it must also not be forgotten that the mode of communication is electronic email, and for this reason, the pros and the cons of the online medium must also be explored. An analysis of the work of Ebner in explaining negotiation paradigms applicable over electronic email may prove to fill the gaps left. The study suggests that the mechanisms of negotiations over emails are quite distinct to those of face-to-face negotiations. Since body language and cue in face-to-face communication act as a bridge to fill the trust deficit with the negotiation, the emails pose a trust issue amongst the parties involved. Furthermore, the tone and influence of the negotiators here relies on the words used and phrases applied. Therefore, while communicating the offer over email, cognitive clues and emotive phrases must be carefully used; only enough to unmask the personality and feeling of the other party at the same time ensuring that the person doesn’t feel intimidated in any way (Ebner 19-20). Also, since there are no gaps or silent modes over email conversations, the negotiator won`t have to worry about leaving a dominating expression or rather a passive one. In addition, the expectations won`t have to be communicated in a stalling manner and position can directly be stated (Knippenberg & Hogg 22-23). Thus, the model must also incorporate the space left over online forum to strengthen one`s position as a negotiator. Role in Simulation: The role being played by me in the simulation is that of the executive which must incorporate major principles reflected by the theoretical models discussed above. Since as the executive my position is where I can pose my position and my stance with clarity, that too over electronic mail, thus I must be aware of the industry and also, I must make use of the opportunity window exhibited by the situation, also by the narrow time frame. Also, I must determine my BATNA in such a way that the casting director may find my offer satiating and at the same time giving up on the needs important to my success. Execution of Simulation Deal: The negotiation i.e. the contract deal gets through in two parts in the simulation. However, being the executive, I was involved in dealing with the Casting Director Sam and also, with the agent representing the actors. Following is an excerpt from the email; Me: Hi Sam, As the Executive , my request is our budget is no more than 1.2M, for actor no more than 700K, for actress no more than 450K. Sam: Hi, I cannot accept that offer. I believe that it is going to cost at least 1 million for the Actor and 500 for the Actress. Therefore, I would need a budget of at least 1.5 Million. That being said, I also have a connection with an international company to make our show go worldwide. This would mean at least an additional 200,000 in profit on the show. This is a great opportunity to drive additional profit and it is something that only I can bring to the table. If you accept my offer, I can represent you. However, if you cannot accept I cannot go any lower in terms of budget and you would have to proceed with negotiations with the agent yourself.  Me: How about we both stepping back and make an average. Lets say 1.4M. You must also consider, I can give you a bonus of 11% as commission for every dollar you saved in the budget. Making international profits is an excellent idea. I really hope we can make an agreement and work as partners. Sam: Ok Great. I will proceed with negotiations with Armando and tell you how it goes.  Finally , the deal which was reached is elaborated below;  Casting director (Sam) agreed over a 1.4 million dollar budget from the Executive (Me), and received 11% commission on every dollar he saved , however the condition that he would create 200,000 additional profits in international market for Executive (Me) remains intact. The deal between Casting director and the Agent (Armando) was settled at 1.1 million dollars. (700 K for the Mr. Actor (Xiyuan) and 400 K for the Female Actress (nobody play this role). Mr. Actor (Xiyuan) is the top paid person in show and Agent (Sam) give him another opportunity could bring the Mr. Actor a minimum of 250 K salary.  Shortcomings in the Simulation Negotiation: As the executive, my job was to monopolize the cost in the deal and hire the best available actors within the range allocated. Furthermore, I had leverage in the simulation case due to the past working experience in the area. However, I feel that things went out of hand and the instead of me having the sole authority or at least the higher level of authority, Sam was also able to get a better deal than he should have gotten. The models elaborated above suggested repeatedly that the BATNA must be thought through quite rigorously since the success of the deal on my part lied on the quality of my BATNA. However, due to time constraints and due to the offer pertaining to international exposure I lowered my guards and gave a higher price for the actors. My BATNA (Best Alternative to a Negotiated Agreement) may have been that I could have refused to hire the casting director. Instead, I may have talked to the Actor myself to reach a better deal. However, there lies a technicality in this aspect as well, since I don’t posses any skills in negotiating with the actor and also, a lot of time may have been lost as a result. However, I could still have used that in the negotiation to reach a better deal since Sam wasn’t well aware of my constraints. On the other hand, though the deal may have been better, it didn’t all go to vain. Instead, a good deal did go through by the end of the negotiation since I was able to hire quality actor i.e. Xiyuan within the budget limit I had set for the show. In addition to the good actors, I was able to grab the opportunity of international exposure for the show which wouldn’t just bring extra revenues for the show, but also would be positive for the show image. In addition, as suggested by the models analyzed via various studies and reports, a precedent had been set by virtue of this negotiation, which implies that every time Sam would be hired to bring in the actors, the deal to bring in international exposure would follow. Furthermore, I was well aware of the external environment as well as the abilities of Sam as the casting director. Also, I had a fair idea of the deal which the actors pursue in the current market. Thus, I was able to offer a deal of 1.1 M in the beginning since I knew that the offer would exceed too high. Also, I was considerate of the best practices in the field owing to my past experience which gave me an edge. Thus, the theoretical paradigms are quite applicable in the simulation scenario for the most part since the factors illustrated do actually compel the other party to give a good deal. Thus, conclusively, the simulation exercise can be illustrated by placing it under the theoretical paradigms reflected via various studies. There is consensus in the viewpoint that diplomacy and the art of manipulating the conditions in one`s favor is a quality possessed by the most successful negotiators. In this context, it is significant not only to understand the conditions and scenario where the negotiation is being conducted, rather the feelings and needs of the other party must also be considered. However, the BATNA is the single most important component of a deal which must never be taken lightly. Yet, even if all conditions are met, there is no guarantee that the negotiation will go smooth, as that happened during the simulation, though a fair deal was reached where better outcomes could have been achieved. However, with every negotiation, one learns and applies the knowledge to set new precedents and get better with the art of negotiating. Works Cited: Ebner, N. (2011). “Negotiating via email”. In M. Benoliel (Ed.) Negotiation Excellence: Successful Deal Making. pp. 397-415. World Scientific Publishing: Singapore. Fisher, R., Ury, W., & Patton, B. (1991). Getting to yes: Negotiating agreement without giving in. New York, N.Y: Penguin Books. Knippenberg, D. ., & Hogg, M. A. (2003). Leadership and power: Identity processes in groups and organizations. London: SAGE. National Education Association of the United States. (1969). Professional negotiation and the principalship. Washington: Dept. of Elementary School Principals, National Education Association. (http://catalog.hathitrust.org/Record/001288109) Program on Negotiation at Harvard Law School. (2012). Negotiation briefings. (http://www.pon.harvard.edu/freemium/improve-your-negotiation-skills-negotiation-training-from-the-pros/) Read More