Cultural Differences in Negotiation

Cultural differences and norms can affect a negotiation in many aspects. For example, when discussing cultural attitudes towards time in a negotiation it is said that Germans are punctual, Latins are habitually late, Japanese negotiate slowly, and Americans are quick to make a deal. This is just a small factor that comes into play when dealing with many different cultural norms in negotiation. Furthermore, if an American man is negotiating against a Japanese man, the American man want to adjust his culture tendencies of trying to end the negotiation quickly because the Japanese man can take that as sign of disrespect. These cultural norms can also transpire through direct or indirect communication, informal or formal personal style, emotion involved in negotiation, general or specific agreement forms, etc. These are just a few things to try to be cautious of when negotiating with different cultures and how to accommodate individual norms. 

Moreover, relating these cultural topics to personal experience can be demonstrated through this past week's negotiation, "Bacchus Winery." In this negotiation there were three parties being played, Bacchus Winery (Americans), Tokyo Saki (Japanese), and Serbian Steins & Stems (Serbian).  Each role had their own different cultural backgrounds and norms which gave them more “points” in the negotiation and different negotiation tactics. Bacchus Winery wanted to end the negotiation as fast as possible and close a deal quickly which captured its American backgrounds. Whereas Tokyo Saki wanted to speak to people of authority in each company and more of a managerial position as a sign of respect. Lastly, Serbian Steins & Stems wanted to speak to male figures of each company because it also showed a sign of respect, as well as, ensuring a serious partnership amongst a deal being made. Each party realized early on in the negotiation that we wanted to be as cooperative as possible since we are going into business together, however we still wanted to gain on our main interest while keeping cultural differences in mind.

Live-8, Electronic Negotiation

In this weeks blog, I'll be discussing the differences between electronic and face-to-face negotiation. In this past weeks negotiation, I was trying to purchase a web domain name because I had complications with my last domain name and needed it to be revolved around the name "Live-8." This domain name is critical because of the charity concert that I am orchestrating and utilizing a website to do a lot of my interactions with guest and ticket sales. Accordingly, I need it up and running immediately. However, the new domain name that I am trying to purchase is currently being used and we our in the process of exchanging a settlement over the domain name via "texting."

Some of the positives with using electronic negotiation as a medium is that you can plan out your responses more meticulously and not have emotion or pressure alter your decision making. Also, utilizing the silence tactic or anchor tactic can be more beneficial by making the other team reach a deal closer to your aspiration. 

However, there are also cons to electronic negotiation because you can't see facial expressions or pick up on situational ques through face-to-face negotiation. Furthermore, if you are on the receiving end of the silence tactic, like I was in the "Live-8 Negotiation," you become eager and impatient and might want to make concessions faster than you normal would, especially if you are on a strict deadline.

All in all, there are positives and negatives in negotiating through electronic mediums. I believe a good choice is to use electronic mediums to initiate negotiations, but then use face-to-face negotiating to hopefully result in a faster and more cooperative negotiation depending on the circumstances.   

Negotiation Biases

In this weeks blog I will be talking about biases in negotiation. Biases prevent us from acting rationally and getting as much as we can out of a negotiation. There are two main terms I can relate to involving negotiation biases. First being, "negotiators tend to assume that their gain must come at the expense of the other party and thereby miss opportunities for mutually beneficial trade-offs between the parties." Secondly, "negotiators judgments tend to be anchored upon irrelevant information, such as an initial offer."

I believe these are very common biases in negotiations and can relate to them using past negotiations done in class. For example, for the first biases relating to not finding the log rolling issues and being involved in more of a competitive negotiation can be shown through the "Bakery-Florist-Grocery-Negotiation." We each had our own goal, and wanted the most personal value out of the negotiation. We took a competitive route towards negotiating where we only cared about our personal outcomes and not the mutual benefit of the future partnership. With two parties gaining the most output and leaving the other party to diminish, ended up hurting every party in the long run. Since we didn't identify the log rolling issues, we missed out on maximizing our wealth collectively and could have created more value instead of reach the most individual value.

Lastly, when negotiators tend to be anchored by an initial offer is a biases that is used in majority of negotiations. This anchoring tactic is a great to use because you are making an irrational first offer that the other party will most likely not agree with, but will be biased to that offer and be fixated on that offer. Therefore, believing that your reservation point or BATNA is close to that original offer. Majority of the time, the negotiator using the anchoring tactic will receive a better settlement based off this anchoring bias.  

   

Final Offer Video Rating...Ripe Tomatoes 98%

On my version of Rotten Tomatoes, known as Ripe Tomatoes, there are things I liked and learned from the "Final Offer" video. I think this video really represented good examples of people's interest and positions in a negotiation. For example, the CAN GM, Rob Andrews was using pattern bargaining from the US agreement and was taken the position of setting up the same deal their American counterpart agreed to and applying it to the CAN UAW. However, the CAN UAW, Bob White disagreed with this contract because it went against the CAN workforce's interest and did not want profit sharing. 

The US UAW did not mind the same contract presented and agreed to profit sharing. They had different interest that aligned with job security and not so much towards hourly wage and yearly increases, which profit sharing would eradicate. On the other hand, CAN UAW interests did not correlate with the US UAW and the CAN workforce did not have to worry about job security, but more towards hourly wages and yearly increases. 

Rob Andrews believed that Bob White should accept the offer because following the same contract as the US did was normal procedure and was standard protocol since it was for the same company. In addition, the GM' s interest wanted profit sharing because they thought it would motivate workers to try harder and increase quality in their products. Both parties had different interest and were for moral and practical reasons, however, they couldn't see past each others positions and focused on the what instead of the why in the negotiation.  

Ripe Tomatoes: 98% "Final Offer"

Emotional Role in Negotiation

In this weeks blog, I'm discussing how emotions can play a role in negotiation and how to resolve disputes when emotions are highly involved. I believe the best way to describe emotional negotiation is relaying it through personal experiences. 

Referring back to my job, I work in a chain restaurant that has locations all around the world. This job comes with its pros and cons like any other job, however, one of the main cons is that you are working with peoples food and drinks. In this job you will get a lot of cases where people are displeased with the service, food or atmosphere and can get very emotionally involved in their complaints or negotiation with Management. Being a Manager, I have the role of trying to recognize these signs and try to deescalate these situations to the best of my ability. 

For example, the most common incident is a customer is displeased with the food and would like to talk to a Manager. I already know going into the negotiation that the other party is displeased and have at least a little bit of emotional discomfort where they had to ask their sever for a Manager to speak with. Once I approach the table, I try to pick out several factors dealing with emotions and see how I can resolve them. 

List of Emotional Factors

• Identify the emotions they and others are experiencing.
• Is it just one person at the table or is it multiple people at the table and why are they displeased with their visit?
• Understand how these emotions affect their thinking.
• Are they very upset because they believe something that was in the food that shouldn't be because they are allergic and could cause them to be physically ill? 
• Are they upset because this is a special occasion and it is being ruined do to a poor experience at our restaurant? 
• Or is it as simple as their meal not being prepared to their exact qualifications? 
• Use that knowledge to achieve better outcomes.
• If they are afraid that the food has nuts for example, make sure they didn't accidentally have any nuts in there dish through the kitchen staff or show the customer the ingredient list that provides information listed in the dish. Also ask if they are feeling any allergic symptoms and if you need to call an ambulance or if they have an "epipen" on them?
• If they are upset with something specific and it is effecting their special occasion how can you fix the problem and make it up to them?
• Was their food not prepared correctly? let them know you can fix the problem and have them a new meal and will not be charging them for that meal.   
• Productively manage emotions, tempering or intensifying them for whatever purpose.
• I always like to approach tables frequently to make sure everything is alright with their experience before a problem arises. This helps lower emotions in the long run.
• If a guest is utterly displeased with their experience and there is nothing you can do to accommodate them at that time, then maybe give them a free meal for their next visit. This can help by allowing time to elevate emotions so they do not intensify and at the same time trying to accommodate their needs of a good experience while eating at your restaurant. 

 

Real World Coalition Experience

In this week's blog I'll being discussing coalitions and how they apply to me in a real world context. Coalitions bring several benefits to weaker parties and can help strengthen your side of the negotiation by pulling resources from each other and avoiding destructive competition. 

In my real world experience with coalitions, I am going to refer to a work experience where myself and 3 other bartenders had to figure who was going to close the bar one particular night. At my job we tend to hold charity events and donate our time and money towards the event. While hosting the event, we also provide entertainment by flipping bottles and putting on a show while we work to help raise money. We all enjoy doing these events, however no one likes staying for the whole event due to how long and tiring they are, but someone has to close down the bar. This is when joining a coalition can help you significantly in the negotiation. If everyone argues for them-self it becomes a drawn out process and you don't get many results. However, if you get as many bartenders on your side and build a stronger argument you can pin the closing shift onto the lone bartender. 

Furthermore, in order to be successful you have to make sure your interest align and that you are choosing the right bartender to join your coalition. If you choose a bartender you wish to build a coalition against and you ask a bartender to join your team and they have close relations with the counter party, you could single yourself out and have them join the other party and put yourself in a bad situation. 

Next, this leads to the Pros and Cons of joining a Coalition and how to apply it to this situation.

• Is the coalition well organized to negotiate with the other side?
• I have to pick the correct bartenders that have similar interest that I do.
• How much will I have to pay, if anything, to join and remain a member of the coalition? What costs might we face down the road?
• I might have to provide a monetary payment in order for people to join my team, to gang up on the other bartenders and will I have to provide a cash payment every charity event in order to build a coalition. 
• Does the coalition have a good ethical reputation and a track record for success?
• Did I pick the right bartenders that will not turn on me next charity event and are they reliable co-workers that will always be at the charity events so I'm not left to negotiate by myself next time?
• What consequences might we face if a negotiation doesn't go well?
• If the negotiation doesn't go well then I can be closing the bar.
• Do the benefits of a successful deal outweigh these risks?
• If I'm successful in the negotiation I can go home early and not have to close the bar.
• If we succeed, how will the coalition allocate the value it creates? 
• If we succeed as a coalition then no of use have to close the bar down and we can continue and strengthen our party so we don't have to close future charity events. 

What type of Negotiator am I, Ethically?

According to our class chart, Chart A, measuring different levels of ethics referring to negotiations, I appear to be "shark bait". I laugh when writing this because I feel I am well rounded in negotiating at this point, but I lack the "killer" or demanding aspects of negotiating.

In Chart A, under Traditional Competitive Bargaining(TCB), I am ranked at a "5". When comparing my results to the male and female average in class, the male average is "6.03" and female "5.48", which is ranking me below in both categories. The TCB category refers to extreme opening demands and pressuring opponent to concede, thus saying that I am not a very aggressive negotiator. I agree with the TCB ranking because I tend to look more for the cooperative approach in negotiating and am not one to demand. I like my approach for being cooperative, however, this will hurt me in negotiations that call for defecting and needing more out of the negotiation.

I feel that there should be ethical approaches and treat a negotiation as you would a person in your family and not give false promises(FP) or Misrepresent Information(MIS). I also ranked below the average in both FP and MIS, but in these categories I am not upset with because I feel that you should be honest in negotiating. When misrepresenting information, you are not giving an honest side of the argument and can hinder the negotiation or future negotiations.

Furthermore, I ranked below all averages in every category of ethics in negotiating except, Positive Emotional Management(POS). This is when you lead your opponent to believe you are happy or pleased or care about him/her. I also agree with this ranking because I tend to do this in every aspect of my life and I think this could be very beneficial in negotiating. This is letting your opponent know that you care about the outcome of the negotiation, not for just your behalf, but for your opponents side as well. This can reassure your opponent that you are not trying to "rip" them off and short side them in the negotiation. However, again this is just proving more that I don't have the demanding aspects of a strong negotiator.

All in all, I agree with Chart A and how I scored. There are areas that I will need to focus on now after referring to the chart and try to be more demanding and assertive in my negotiation to ensure a more favorable outcome.

    Chart A.

Job Offer Negotiation

Robust Routers Job Offer: Check List

Order of Importance	Term in Contract	Points
1	Assignment	Business Development for RR
		Product Manager for RR
		Associate Product Manager for RR
2	Salary/Title	Business Development for RR-$101,000
		Business Development for RR-$96,000
		Business Development for RR-$88,000
		Product Manager for RR-$83,000
		Associate Product Manager for RR-$88,000
3	Relocation	Cover all moving costs-$15,000
		Pay for move-$10,000
		RR's option-$5,000
4	Signing Bonus	$20,000
		$15,000
		RR's option-$10,000
5	Stock Options	1500 shares at start date/ 750 grant options each year
		1200 shares at start date/600 grant options each year
		1000 shares at start date/500 grant options each year
6	Start Date	August(Europe Trip)
		May(Start Immediately)

Negotiation Tactics (WK3)

In this weeks blog, I will be discussing the negotiation tactics I will be using for my case exercise referring to "Knight Engines and Excalibur Engine Parts". First, a little background information referring to the case exercise, I am the VP of Sales for Excalibur Engine Parts and I am selling a special type of piston. Excalibur Engine Parts have been unsuccessful and just recently had an order terminated, rendering 10,000 pistons made and no buyer. Thankfully, Knight Engines contacted our company for a rush order of 8,000 units and would like to do business if all negotiations work out.

 

More facts about the case:

1) Was charging $600 per piston to original 10,000 unit order

2) Typical selling price $560 per piston

3) Cost of each piston to be made $480

4) Told Knight that there would be at least 5% charge extra for each piston considering the rush order

5) Extra 10% over selling price for quality control guarantee or buyer is responsible for defects

6) Competitors sell similar product for $400

7) Knight is in possible association with a Government Contract that can gain future business

 

While brainstorming for the right negotiation strategy, I want to look at my priorities and my outcome concerns. I would like to see all 10,000 units to not have a loss in this quarter and gain stockholders trust. However, I also need to consider the option of building and gaining a relationship with Knight Engines in hopes to gain a government contract. Thus, my first tactic is to keep my original offer above and aim at a selling price of $600 per unit, with a 5% fee for the "rush" order, and to push for the quality guarantee deal of 10% charge for all 8,000 units. This original offer is worthy because of the short time frame Knight Engines needs our pistons and facilitating our first need of higher sales.

 

Secondly, I will try probing/testing Knight and finding out their wants and needs in the deal. Most importantly probing for answers about the government contract. If Knight does have a contract with the government, I believe the best option is to "tweak" my original offer and work towards a collaborative strategy and try to build a strong relationship. In order to build a relationship, I will most likely have to distribute value accordingly and give something now in order to get something in the future. Since Knight and Excalibur have not done business with each other before, I want to gain their trust and really show the sincerity of our company and wanting to meet their needs. While also adding a concession towards a contract with the government through Knight Engines. I think a reasonable proposal is to drop the rush fee of 5% and to ensure the quality parts without the 10% charge as well in order to gain future needs. However, I will need to refer to a cautionary note to ensure that I am not over collaborative in this deal and will need to distribute my values according to my findings of Knights needs and wants. 

 

                                                            Chart A.

 

 

Referring to Chart A., Collaborative strategy is the most beneficial in this case because we both have resolutions to both our needs and a high importance to both relationship and outcome. We are trying to gain a "Win-Win" approach by gaining a mutual gaining relationship. A relationship is more beneficial to Excalibur because we sell a rare commodity engine part, and having a relationship, gains future sales. Therefore, gains company growth, pleased stock shareholders, and quality parts that satisfy Knight Engine's needs.

 

Prisoner's Dilemma (Blog 1 & 2)

In this week's blog I'll be discussing "Prisoner's Dilemma" in real life situations such as, negotiating the sale of a used car I advertised on Craigslist, and negotiating a contract for snow removal for my place of business. Moreover, how does understanding the prisoner's dilemma help me in both scenarios?

In the first scenario, I am selling my car on Craigslist to a complete stranger and we both want to get the greatest satisfaction out of the deal. In chart (A), the satisfaction will range from 0-10, 0- being unsatisfied, and 10- being very satisfied. The prisoner's dilemma teaches me and the buyer that there are several outcomes to this scenario and we both want to be the most satisfied of the deal. However, what will be the best outcome? I obviously want the most money out of my car, so I can get the biggest profit from my car. On the other hand, the stranger from Craigslist wants to get the car for as cheap as possible, so he can get the "biggest bang for his buck."

Cooperation, in this scenario, is the stranger from Craigslist purchasing the vehicle at the list price posted and there's no negotiation. However, defecting in this scenario, is the stranger wanting a lower price for the vehicle. As shown in chart (A), both the stranger and I both agree on the list price, so we are both mostly satisfied (7,7). I am not fully satisfied at a (10) because if the stranger agrees to the set price, I feel I could have gotten more money for my car and vise versa for the stranger. Furthermore, if the stranger defects and I sell my car to him at a lower price, I will be very unsatisfied and he will be very satisfied (0,10).  On the other hand, if I defect and stand my ground while the stranger wants less out of my car and sell it, I'll be very satisfied where as the stranger will be least satisfied (10,0). Finally, if we both bargain for a price and prolong the sale until we reach an agreement, we will be slightly satisfied. However, our low satisfaction is due to having to lower my price of my car and not having it as low as the stranger wanted to buy it for.

A.

 In the second scenario, I'm negotiating a contract for snow removal for my place of business (which has a small parking lot and about 100' of sidewalk). In this scenario, the snow removal company and I are better off cooperating and agreeing on the original price of snow removal. It's respectable to have a good business to business model, as well as, I don't have as much negotiation to use for  leverage. To simplify the situation, I can purchase equipment that will cost a lot of money up front, and plow the snow myself.  This will leave me unsatisfied based on personal labor and cost. The other option being, to pay for the snow removal initially. Furthermore, if I try to negotiate price, we can both become agitated and be unsatisfied with the outcome. In this scenario its good to have leverage in negotiation and with it being a time constraint for my business to open, I lack the leverage needed to find another snow removal company.

However, in the first scenario, myself and the stranger from Craigslist both have room for negotiating. Even though it seems better for us both to agree on the set price and be mostly satisfied, its better for us to negotiate and defect since its a big ticket item. We will be less satisfied as a whole, but in the end it is the better option since there is room for negotiation on both parties. Where as for the snow removal scenario, negotiation isn't present for both parties and we are both better to cooperate. 

Finally, the prisoner's dilemma shows that both options have different outcomes on relatively similar scenarios based on sales. Nevertheless, the more rational choice, based off the prisoner's dilemma model, both parties should defect in the Craigslist sale, and both parties should cooperate in the snow removal exchange.