Fractionating Problems into Several, Simpler Parts
A prime example of creativity in negotiating is fractionating problems into their respective parts, so that the several, simpler parts are easier to see, and negotiations can proceed along more mutually-beneficial lines. For example, when AirTran and Southwest Airlines merged, AirTran broached the smaller issue of their business seating option. Thus, AirTran and Southwest Airlines, by breaking the overarching merger into smaller parts, were able to see eye-to-eye on the business seating issues, one that AirTran successfully contended would maintain their customer base (Thompson).
Finding Differences to Exploit
A key example of the exploitation of differences comes from the political arena. In the US Congress, the dynamic of politics and the position by politicians on certain policies plays out every day. Thus, when a Congressman comes to the bargaining table with a political opponent, a creative way to negotiate can comprise a tactic whereby one, or both politicians, realize differences in their politics, and use those differences to their advantage (Binder & Lee). When John Boehner, House Majority Speaker, voted to continue the Bush tax cuts of 2012, Democrats were left in the lurch, deciding in favor of a tax hike for even lower income Americans (Binder & Lee). Eventually, Boehner’s House strategy failed due to a large Republican coalition that wanted no tax cuts (Binder & Lee). The bill that addressed the fiscal cliff continued to the Senate for further wrangling with President Obama (Binder & Lee).
Cost-cutting
Cost-cutting is a way to lessen the blow of a negotiation that is perceived by a company to be not in their best interests, one that in any event they would come up short. Cost-cutting is actually a way to avoid losing a negotiation. An excellent example of cost-cutting is a negotiation that took place between two vastly different, competing interests – The Nature Conservancy and the Great Northern Paper Company. Though creatively negotiating, the two organizations brokered a deal where both took a calculated risk, and cut their costs, should either one have lost out in the process of negotiation. As a result, The Nature Conservancy took on $50 million of the Great Northern Paper Company’s outstanding debts, and The Great Northern Paper Company agreed to protect 250,000 acres of land from being developed for paper and timber (Thompson).
Expanding the Pie
Expanding the pie is a creative negotiating strategy that enlarges the preconceived options available at the deal-making table. According to the textbook, a school wanted to expand, but the nearby firehouse resisted, stating that such an expansion would make the firehouse less safe. So, in order to expand the pie, both parties bought land from another party, who turned around and sold another closer parcel of his land to both the firehouse and the school. Thus, it was a win-win situation, as the land available to the school was expanded, making it unnecessary to battle the firehouse, which was able to secure its safety (Thompson).
Bridging
Bridging is a creative negotiation strategy in which both sides determine the unstated needs of the other side. For example, according to the textbook, when DISH Network refused to broadcast any of its AMC channels. However, there was a previously-unrecognized issue that was not on the table of the two companies – a lawsuit of $700 million by AMC against DISH. This was due to DISH’s refusal to distribute AMC’s new channel, Voom. Even though it was not part of the original deal, AMC and DISH came to a harmonious agreement, in which AMC received its $700 million from DISH, but DISH also won access to AMC’s advanced satellite technology (Thompson).
Nonspecific Compensation
Nonspecific compensation is a type of creative negotiation where both parties win in ways they did not expect. In other words, one part may be paid in ways other than money, especially if they have faith in the other party’s earning power. For example, Real Time Consulting’s managing director, Phil Jones, used this technique with a particular Formula One Racing Team. The deal went through because Mr. Jones believed in the vision of the Racing Team, and the value of their ideas – although the racing team could not pay Jones money for website development by Real Time Consulting. As a result, the companies worked out an agreement that gave Real Time Consulting free access to the racing team’s conference meetings. From Jones’s viewpoint, this benefits his clients, but it also helps the racing team get their much-needed marketing and promotion (Thompson).
Structuring Contingency Contracts
In effect, a structured contingency contract is when two organizations bet on the future, or base their contract on uncertain forecasts -- a type of gambling. Companies rely on this practice because compromise is unfeasible in the present. Thus, each side, suspecting the other side of underhandedness, wager on the future. For example, The Electronic Privacy Information Center and the Center for Digital Democracy contended that websites were amassing their users’ private information without the consent of the users. When the National Telecommunications and Administration Information met, they structured a contingency contract that, in essence, helped put together a code of conduct that app developers were required to implement. Part of this code mandated that apps let consumers know what type of information is being collected, and whether information is shared with other apps. This agreement has resulted in more competition between apps due to notices of testing. Such notices inform interested parties how well the app is doing at not sharing its users’ private information. In turn, such compliance serves as a gauge of an app’s overall effectiveness at securing the privacy of sensitive, confidential user information, such as location, and even information regarding finances (Thompson).
Works Cited
Binder, Sarah A., & Lee, Frances E. “Making Deals in Congress.” American Political Science Association. n.d. Web. 15 May, 2016.
Thompson, Leigh. The Mind and Heart of the Negotiator, Sixth Edition. Hoboken, NJ: Pearson Education: 2015. Print.
