Analysis of the negotiation
Following between the co – owners of the Hackerstar Company, I was appointed the chief attorney representing one of the owners by the name Alan Hacker. This negotiation is taking place so that the two can come to an agreement that will see Litigation ruled out, Hackerstar receive royalties that Star is claiming and Hacker gets to move on with his innovations with another group of investors.
The peripheral elements that may have an impact on the negotiation include sharing of HackerStar’s assets, possibility that Star may have a personal grudge with Hacker. Star may be out to sue Hacker even with the possibility even with this negotiation being scheduled. Another element that may affect this situation is that there is the fact agreeing to what is equal in regards to royalties may be a difficult task. This is mainly because there are other people involved, the secondary investors who want to fund Powerscreen. The fact that Gates and company may want to fund HackerStar directly and take PowerScreen away from Star is also an issue. Screen clearly wants royalties paid to HackerStar and proceeds shared equally.
Analysis of Interests, Objectives and Currencies
My Interests
My Objectives
Their currencies
-Avoiding Litigation
-Ensuring that HackerStar continues functioning as a company
-Ensuring that both Hacker and Star are comfortable with the terms of this negotiation
-Preventing a situation where Hacker feels that he has been ‘ripped - off’ by Star.
-To come up with agreeable formulae of sharing the proceeds by Powerscreen
-Estimating the amount in percentage that will be agreeable to both Hacker and Star
$30, 000 on form of royalties per year
Their Interests
Their Objectives
My currencies
-Ensuring that The royalties by the program developed by Hacker are share equally between Hacker and Star.
-That Hacker fully adheres to the terms within his eight year contract
- Ensuring that hacker fulfills his contract
-Achieving the highest returns in form of royalties
$25,000 in form of royalties per year
Items to be negotiated:
My Targets
ITEM
OPENING TARGET
TARGET
LIMIT
RELATIVE IMPORTANCE
The royalties to be paid may influence business with the Gates.
These are the proceeds from Hacker’s invention.
Short term Notes
This is money belonging to the company
Accounts receivable
Part of the company’s assets that also belongs to Hacker.
In the case of royalties, I used the table that I was provided with showing the returns that were reported for the sales of PowerScreen. I also estimated the starting figures and closing figures for cash, short-term notes and accounts receivable using the balance sheet that I was provided with.
Their targets
ITEM
OPENING TARGET
TARGET
LIMIT
RELATIVE IMPORTANCE
The royalties to be paid belong to Hackerstar, so partly belongs to Star.
Proceeds were only possible because of Star’s investment.
Short term Notes
This is money belonging to the company
Accounts receivable
Part of the company’s assets that also belongs to Star.
The above estimations have been arrived after carefully studying the balance sheet, projected returns from Powerscreen and putting into mind that Star want to make the most out of HackerStar in form of capital gains.
Preparing your strategy and your negotiation approach
The only alternative is to lower my targets such that Hacker can get a share of the company since his interest is with innovation without having him feel like he has been side stepped. I also intend to alternatively let go of the company so that Hacker can proceed with his creativity with the Gates without having to fulfill his contract and pay royalties. My BATNA however is the former.
The Star’s alternatives may involve full Litigation, as well as dissolution of the company. However I assume that their BATNA is litigation because what matters to them most is the Royalties that Star wants from the proceeds received from Powerscreen.
Some of the questions Intend to ask my partner to validate/ invalidate my assumptions include: what do you hope to achieve in this negotiation?; Does your client want HackeStar running?
I intend to inform my partner during the beginning of the negotiation that we hope for a smooth cross over without dissolution of the company during the beginning of the negotiation. This will have them thinking of a solution that will best work for both of the parties.
I intend to withhold the fact that we are avoiding litigation because this will have them pushing for it, which is not in our best interest.
Creative options
OPTION
WHY?
HOW?
Withdrawing Claims
Withdrawing claims on assets owned by HackerStar.
Dissolution
Dissolution of the company leads to laws that are predetermined and litigation doesn’t have to occur
Suggesting dissolution of the company to allow Hacker to proceed without the need to complete his contract
Partnership
Since Gates and co are investors, a partnership with Hackerstar may completely erode the chances of dissolution, litigation and bad blood
Suggesting it to both teams at the beginning of the negotiation, after presenting it to Hacker before coming to the table
