General Information Regarding Heffen vs Pacific - Assignment Example

Negotiation Evaluation Papers Any negotiation process should veer towards problem solving. Interest based-bargaining or problem solving makes parties involved in the negotiation process to concentrate on their vested interest rather than asserting demands and positions. The parties tend to find solutions that fulfil their interest. While doing that, they come up with concessions that are consistent with their varied concerns and needs (Cronin-Harris 1). For those taking part in the negotiation process should recognize that interests and needs frequently differ. In addition to that, they reflect distinct concerns, values and motives. As a matter of fact, these varied differences allow the negotiation process to become an inquiry into finding the distinct solutions and needs that satisfies both parties. Problem solving negotiation occurs as a result of issues dealing with money. In that case, it can become a component of solution that constitutes other aspects. Negotiation can be best described as a side by side dialogue in which parties trade on their issues rather than conflicting over resources that are limited (Doye et al. 2). It is unethical to perceive negotiation as an encounter that is casual without giving it forethought. The outcome is meandering and reactive meetings rather than meetings that are proactive with certain goals in mind. Inadequate planning reflects itself at the negotiation table as parties tend to rely too much on ineffective and demands that attempts to persuade their opponent. General Information Regarding Heffen vs. Pacific These are recording companies and are having issues on who should take artistic control of the STAR album, a once known popular group. The group is comprised of four individuals namely, Sarren, Trace, Armstrong and Robins (STAR). The group regrouped itself three months ago and they are working on their second album after 15 years. However, six weeks down the line, Robin’s signs with Heffen record company a two year contract whilst the rest of the group signed contracts with Pacific Records Company. My client (Heffen records) believes that, if given the opportunity to produce the album under his label, he would manage to sell about seventy five thousand copies (75,000copies), whilst the follow up album would sell up to one million five hundred thousand copies. Each CD would cell at 15dollars thus totalling to 11.25million dollars and the follow up album accumulating 22.5million dollars. In that case, Heffen Company will be entitled to 25% of each CD gross. Nevertheless, Heffen Company is willing to offer Pacific Record a maximum of 10%and no more than that from the total gross sell only if she is given the artistic control of the album. In addition to that, as a final resort, she would yield to giving Robins away only if Pacific Record pays 1, 000,000 dollars. This negotiation is significant to Heffen. She would have handled it herself, but as a result of the conflict between her and the president of Pacific Records Mr Paul Pack, she cannot handle it. That is why I as the third party I am involved in the negotiation process so as to arrive at a concrete solution. Preparation The Pacific Records comes to my clients company and they are given 6-10% bargain for the first year. In the second year, they are allowed to take Robin on condition that they pay 1,000,000 dollars. However, if they refuse to comply with these conditions, they will be subjected to work under their name (pacific records) but all the returns accumulated from the album sell will be taken by my clients company (Heffen Company). The negotiation strategy applied to come with the above terms and conditions is the “Plan Money Moves Based on Objective Principle.” According to this strategy, money becomes the component of a solution negotiated. Similarly, better handling of monitory issues results to outcomes that are effective. For example, the negotiation between Pacific Record Company and Heffen Company agreed on various terms that are money oriented. The Pacific record company to make a down payment of one million five hundred thousand regardless of the sales received. As such, the Pacific Record Company will have a total control over the album, marketing and as well as artistic control. If all this is adhered to, Heffen Record Company gets 5% of the gross after all the CDs are sold. Finally, the Pacific Record Company will offer artistic help for the Solo CD of Robin but under Heffens name. Before negotiation starts, it is important to set the tone that will be adapted during the entire process. According to studies carried out among negotiators trying to come up with a solution, the negotiator who makes a more ambitious demand or offer for money that does not compromise his claims and allows room for concession often gets results that are superior. Consequently, a balanced demand or offer helps in avoiding the possibility of a conflict. The conflict might resurface only if a negotiator makes demands that are outlandish. An offer that is appealing or reasonable always attracts the other side and in return induces counteroffers that are more reasonable (Charles 35). The negotiator move should be supported by rationale that are objective and can be found. Reason is hard to fight, the better the support of the demand, the harder it is to counter. Principled reasoning necessitates the negotiation cordial tone and advances the fair solution search. The Pacific Record Company utilizes the following strategy” Plan Factual Inquiries Carefully”. In this strategy, Deborah representing the Pacific company prepares a superior plan that addresses fruitful and specific information inquiry. This is seen from the questions she asks. For instance, she asks what the contracts says, how much the president of the company has to part with in case he does not follow the contract, the album time frame and the biggest interest in the situation. The answers given by the proponent are as follows 2years, 35million, 11.25 million, one year and artistic control respectively. The strategy works in a way that, information is inquired during the initial stages of negotiation. The question arises from analyzing the opponent underlying priorities and interests and coming up with options that might satisfy both of them. The suitable negotiator spends most of his time staying curious, asking questions. In addition to that, he or she uncovers the opponent views of the facts, situation, interests and priorities. The phase of acquiring information aids in confirming the planned analysis and in revealing of new data. In case of dual skilled negotiators, both sides will have the capability of securing the new data. They utilize and respect the reciprocity norm. As such, if there is sharing of information by a single side, then it should acquire all the information it requests. Naturally, majority of negotiators are always reluctant to reveal information that is detrimental for purposes of avoiding being taken advantage of. However, if the two parties respect reciprocity they can establish a trust that allows adequate and sufficient flow of information (Kumar 1236). The effective deals always result from information sharing. It provides way for creating solutions that are viable. It allows the creation of tone between negotiating teams. The tone focuses on solving the problem rather than bargaining based on positions. For instance the negotiation between Pacific Records and Heffen Records Company was based on information sharing. Each representative had their offer and their response. However, Haffen Company claims that Pacific refused her offer. Nevertheless, the company (Pacific) was asked to give its offer. The Heffen company offer was to have artistic control, marketing and everything for the first year. In addition to that, for each CD sold, the 5% gross profit will be theirs. Moreover, if the CD does not sell as expected, they will release Robins so that Pacific company can work with Robin. In addition to that, Heffen Company is ready to release their marketing professional group to help with selling of Robin’s solo CD. The companies through bargaining reach an agreement. The Pacific Company through Deborah gives her offer. Her final offer is payment of a down payment of 500.000 paid twice initially not considering the sales volume, and the remaining USD 500.000 payment to be made if the CD sells. An additional 1000.000 will be offered totalling to USD 1.500.000.000 dollars. Another offer from Deborah was to give Heffen Company USD 1.5000.000 as down payment regardless they work under their name, have the CD recorded under Heffen company label. Thus, Pacific company gets payment plus marketing and artistic control only if Heffen sells more than they expected. The two companies have two offers to choose from. First, to stay with Robin plus the other members of the STAR group, produce CD having Heffen label, pacific to gain marketing and artistic control plus an addition of 2000.000. The second option is for Heffen Company to control for them, record the album under their label, market and pay 150000. There exist various techniques for negotiations dealing with money. First, the negotiators need to establish a rationale, formula or framework whose doctrines will enlighten issues dealing with money. Once the two parties agree on a formula, its application becomes easier. However, the debates on choosing the formula that is appropriate rests on distinct values of the negotiators. For example, both the Pacific and Heffen Company had their own interests that needed to be satisfied. Reaching an agreement needs negotiation and discussion between the two parties. Nevertheless, once an agreement is determined, money issue gets solved easily. Sometimes plans change during the negotiation process based on the information provided as in the case of Heffen v.s Pacific. Sufficient planning for negation results to greater confidence at the negotiation table. Moreover, it helps in developing an action plan for uncovering interests, priorities and factual data that can be utilized in crafting the suitable solution possible(Koc-Menard 375). Significant factors learned from the Negotiation Process During the negotiation process, I learned that for a negotiation to be successful, the following steps needs to be followed. Negotiators need to separate people from the problems, focusing on interests rather than positions, inventing options for mutual gain (working hand in hand to come with options that satisfy both parties), insisting on using a criterion that is objective for purposes of judging the proposed solution(Lewick et al 345). All these steps are necessary for analyzing situations that are stressful, negotiation planning or discussing options as illustrated below. Separating People from Problem It is extremely difficult to respond to a problem when individuals do not misunderstand each other, get upset and personalize things. The president of Pacific Company, Paul Pack argues that, if the three of the four member of the STAR group have signed a contract under Pacific records, then it is logical if the CD is produced under their label. On the other hand, Heffen Company president, Miss Heffen responds that, If Trace, Sarren and Armstrong wants to produce a CD with Neal Robins, then the CD will belong to her. As such, she will not permit Neal Robins to produce a CD for any other person while he is confined under the company’s exclusive contract. In addition to that, he owes Heffen Company two albums. This is the source of misunderstanding between the two companies. Negotiation resolutions become easier if an individual perceives the other as human being with deep values, emotions and viewpoints that are unpredictable. Personality conflicts cause differences that are far related to business problems. For instance, the president of Pacific and Heffen Records held personal antagonism between themselves. In such cases, dealing with a problem and at the same time maintaining effective working relationship become difficult as both parties have goals that are conflicting. Therefore, negotiating parties (I and Deborah) need to be psychologically prepared and committed to treat the problem and relationship separately. Perception, communication and emotion are factors that we effectively considered while negotiating for the two companies. Communication helps in understanding the other parties’ emotions, perceptions and what it wants to achieve. Through careful listening and exchanging of ideas a consensus is reached. Focusing on Interests and Not positions To end with a fair and wise decision, interests need to be reconciled and not positions. In every opposed positions lies a compatible, shared and conflicting interest. Both companies had shared interests of gaining artistic control and other conflicting interests such as whose label will be used on the produced CD. It is essential if both parties differentiate explicitly between brainstorming and negotiating session. Hence, they need to state views that are official and speak on matters at hand. Broadening Negotiation Options Brainstorming participants need to come up with multiple options from which the best is chosen. Multiple options can be generated through various ways. These are such as, examining a problem as a negotiator from the view of distinct disciplines and professionals. This offers an exclusive insight into the situation being discussed. Another way for coming up with options is through holding of brain storming sessions. Looking for Mutual gain Negotiating parties need to identify shared interest even though they are not obvious. Individuals need to ask themselves if there exists shared interest between them for purposes of preserving their relationship, what are the opportunities ahead for mutual and corporation benefit, what are the aftermaths if the negotiation does not succeed(“What are the best negotiation strategies”). Shared interest need to be viewed as opportunities rather than obstacles. Mutual gain results from generating multiple options that meets the interest of both parties. Techniques like brainstorming are significant in generating numerous options from which resolutions are later created. Utilizing of Objective Criteria Principled negotiation insists on the significance of selecting a criterion that is objective while faced with difficulties of selecting between competing alternatives. The initial step in establishing an objective criteria is via discussing with the other party the available procedures and standards that are fair. The chosen alternative should be mutually acceptable by both parties. In addition to that, both the parties’ interests should be met. Conclusion Principal negotiation comprises four steps. They include, separating people from problem, focusing on parties’ interest rather than positions, generating multiple options before deciding on what step to take and lastly basing the outcome of negotiation on objective criterion. Negotiation can be termed successful only if it produces a constructive agreement; it is efficient and improves the relationship between the parties negotiating. Principled bargaining allows negotiating parties to work as a team and come up with viable solutions. Separating individual from problems permits the negotiating team to work collaboratively and view each other as human beings with emotions. Negotiation can be made smother via building a relationship based on respect, friendship, understanding and trust. The relationship should be based on clear communication, accurate perceptions and appropriate emotions. Focus should be directed towards both parties’ interests and not on ‘losing or winning’ if efficient results need to be achieved. Negotiators need to be well prepared for purposes of providing an opportunity to come up with options which helps in serving the interests of both parties and speeding up the negotiation process (Levinson 247). It is important for the negotiating team to follow up the above four named approach while solving their issues. They should not compromise on the relationship through taking positions. The end results of the negotiation should always satisfy the interest of both parties. Works Cited Charles, Craver. Effective Legal Negotiation and Settlement: Ali-aba Professional Skills Course Materials. Philadelphia, PA: American Law Institute-American Bar Association Committee on Continuing Professional Education, 1900. Print. Cronin-Harris. “Negotiation Strategy: Planning is Critical”. The CPA Journal (2004): 1-1. Doye, Damona, Love, Ross and Tracy, Hyer. Negotiation strategies. Oklahoma: Oklahoma States University, 1988. Koc-Menard, Sergio. “Team Performance in Negotiation: A Relational Approach”. Team Performance Management Journal 15.7(2009): 357-365. Kumar, Rajesh. “Inter-partner Negotiations in Alliances: A Strategic Framework.” Journal of Management Decision 49.8(2011): 1235-1256. Levinson, Marrie., Smith, Slade & Wilson, Richards. Guerilla negotiating: Unconventional weapons and tactics to get what you want. New York: John Wiley, 1999. Lewicki, Roy , Barry, Brooke., & Saunders, David (2007). Essentials of Negotiation. Boston: Irwin, McGraw-Hill, 2007. “What Are the Best Negotiation Strategies?. Web.5 April.2012 Read More