Be SPECIFIC with your answers, citing precise examples from the case. Use more space if necessary.
IMPORTANT! 10% of your grade on this assignment will be based on the visual quality of your written work. This includes (but is not limited to) providing all requested information, proofreading your document, running a grammar and spell check, and insuring that your document is properly formatted and aligned. It is fully expected that you will submit “professional quality” work to your instructor, both in content and in presentation.
PART 1: YOUR ANALYSIS OF THE NEGOTIATION
- In one or two sentences, explain why this negotiation is taking place. (2 points)
Philip Fisch, A German sales representative for a midsized engineering company engages the Vice minister of the Ministry of Foreign Trade in Cuba, Juan Fajardo Duque Antonio in negotiations in attempts to cover a second deal. The deal under negotiation, if successful, would enable Fisch’s company to generate sales revenues amounting to EUR 20 million, being an improvement of terms over the pre-existing deal. On their part, the Cuban Sugar manufacturing industry will benefit from increased productivities as a result of using mechanical equipment component’s supplied by Fisch’s company.
- List the PERIPHERAL elements (other than positions and interests) which may have an impact on the negotiation and explain why. These may include (but are not limited to) emotions, feelings, relationships, cultural variables, etc. (3 points)
- Relationships- the relationships between the negotiator and the negotiating party determines the extent to which an individual would be willing to take a tough stance, press for particular issues, or become submissive during the deal. The future implications of the negotiation process should be identified by examining the level of importance (Oertig, & Buergi, 2006).
- Legitimacy- Perceptions from neutral third parties or using external stands defines the level of legitimacy in a negotiation process. Approaching the negotiation using acceptable standards plays a critical role in solidifying offers, creating new option avenues, and even lessen offers from the other negotiating parties
- Communication- There is no doubt no deal can be struck without the existence of proper communication channels. Communication is the greatest tool that leads to understanding (Oertig, & Buergi, 2006).. The negotiation process should be characterized by listening, acknowledging contributions from the other party, and speaking with purpose to avoid generating debates
- Personal perceptions of “facts under negotiation” may lead to misunderstandings and eventually, the negotiation might fail due to counter-reactions caused by reactions to personalized perception of facts (Heavrin, and Carrell, 2008). For instance, a statement made by one party may be intended at identifying a problem during the negotiation process but it may heard to imply an attack. Wrong inferences can also be drawn from comments made during the negotiation
PART 2: ANALYSIS OF INTERESTS, OBJECTIVES AND CURRENCIES (both sides)
Please fill in the IOC MATRIX as thoroughly as you can. Be sure to look beyond what is written in your documents. (2 points per box = 12 points total)
PART 3: ITEMS TO BE NEGOTIATED
a. Complete the table below for each item you plan to negotiate. (2 points)
- Explain how you determined your OPENING, TARGET and LIMIT for each item. (2 points)
It was obvious that the bargaining included agreements on more than one item. These items in the bargaining mix provided the criteria for determining the target, opening, and limit points. The decisions on these points were determined based on the available opportunities that could be obtained from the deal. Bundling concerns together and exhibiting mutually concessionary behavior was inescapable
- Complete the table below based on assumptions you have made about your counterpart’s TARGETS and LIMITS. Below the table, explain on what basis you have made those assumptions. (3 points)
PART 4: PREPARING YOUR STRATEGY AND YOUR NEGOTIATION
APPROACH
- What strategy do you want to put in place? Explain why. (5 points)
Since the major objective of the deal is to influence the Cuban vice minister to sign the deal, I intend to use specific strategies to influence and persuade the Cuban vice minister to agree my offer. First, I will assess his values and the likeliness of terminating the negotiation. Second, I will try to manage his impressions regarding the outcome values. Third, modification of his perceptions towards the value outcomes identified and finally, manipulate the level of costs that could be incurred by postponing the negotiation.
- What alternatives are available to you in this negotiation? (3 points)
Distributive bargaining concerns, friendly stance, reducing the expected level of value outcomes, and taking a competitive but a less strict stance are the possible alternatives available during the deal.
- Which of these alternatives is your BATNA? Explain why. (2 points)
The best alternative would be to adopt the distributive bargaining concerns where a loss on my side will be compensated by a loss on their other side. This strategy is my BATNA because I can be able to incorporate other strategies such as approaching the deal from a friendlier perspective and showing commitment to my offers
- What assumptions can you make about your counterpart’s ALTERNATIVES and BATNA? Explain why. (2 points)
- The alternatives adopted by Juan Fajardo Duque Antonio are aimed at influencing the situation. Deceptive tactics forms a major share of his BATNA’s intentions and motives
- List ALL the questions you plan to ask your counterpart to uncover his/her needs and interests, and to validate or invalidate your assumptions about him/her. Explain when and why. (5 points)
- Are the alleged suppliers reliable or is it just a tactical move aimed at forcing the deal? This question will clarify allegations suggested by technicians over the possibility of replacement
- Do you think extended negotiation periods will change our perceptions of the deal? The deal had taken four weeks without success.
- Based on successes from the previous negotiation, do you think you will find another company willing to supply the equipment and be paid on interests? This question would provide answers to where they will source funds to import food to satisfy the looming food shortage
- Does lack of punctuality during negotiations translate into lack of commitment into the deal? This question is aimed at challenging their laid back culture and values
- What will you gain if I cancel this negotiation or rather if this negotiation becomes unsuccessful? This question is tactic to show that Fisch’s company too had other options. This will change his perceptions because the
- What information do you feel you should PROVIDE to your counterpart? Explain WHEN and WHY. (4 points)
I will be willing to justify my preferences in situations where my options are less desirable. The Vice Minister needs to understand that the deal is worth a fortune to Fisch’s company and he needs to understand the necessity of having a common ground-a win-win situation in this case. He aims to satisfy his currencies and my Company has its share too.
- What information do you feel you should WITHHOLD from your counterpart? Explain WHY. (2 points)
The issue of doubled revenue from the deal. It is critical to withhold this information because the vice minister will understand my motives and interests and the target point.
- What CREATIVE OPTIONS do you want to explore during this negotiation? Explain why. Complete the table below to explain your ideas. (5 points)
- How do you want to approach the cross-cultural dimensions of this negotiation? Be clear and specific. Why? (10 points)
There is no doubt that negotiations involving people from different cultures are often complex and complicated. This negotiation involves striking a deal with an individual from a culture that upholds different ideas to mine. Possible effects include exerting conditions on perceptions of reality, misinterpreted perceptions, and meanings. The first strategy is learning the foundations of the Cuban cultural etiquettes and examining ways that can be adopted to limit the differences with the German culture. Second, I will accept the possibility of extended lengths of negotiations because of the varying times. In this situation, I will not exert pressure or push for quick responses from my Cuban counterpart. Third, building rapport is critical for developing relationships in addition to helping to understand the other parties. In this scenario, understanding the cultural drivers for the Cuban culture is paramount to this negotiation. Finally, expanding our thinking negotiation limits enabled us to avoid external judgments to hamper the negotiation process.
TOTAL POINTS FOR PREPARATION SHEET:
- 62 points for content
- 6 points for presentation
_____ /68 = _____ / 20
POST NEGOTIATION WORKSHEET
Counterpart Name(s):
Please complete this post-negotiation worksheet immediately upon completion of your negotiation, while everything is still fresh in your mind. Be SPECIFIC with your answers, citing precise examples from your negotiation. Use more space if necessary.
IMPORTANT! 10% of your grade on this assignment will be based on the visual quality of your written work. This includes (but is not limited to) providing all requested information, proofreading your document, running a grammar and spell check, and insuring that your document is properly formatted and aligned. It is fully expected that you will submit “professional quality” work to your instructor, both in content and in presentation.
RESULTS
- List all the items on which you reached agreement, and include the amount (or terms) agreed upon. If you finished with a “no outcome”, indicate where you got stuck and why, providing details about which items you agreed upon, and which you did not. (2 points)
- Managed to strike the deal but at reduced terms. I did not manage to realize my intended target of EUR 20 million in sales but I settled at my closest deal of EUR 17 million
- Understanding each other’s cultural diversities played a huge role in the negotiation because each other’s motives and intentions were brought out clearly
- How satisfied are you with your outcome? Why or why not? Be as specific as possible. (3 points)
- We were satisfied that each party managed to satisfy its currencies. On my part (Fisch), I managed to supply the equipment at a deal that will enable my company increases its revenue generation by upwards of 75%. The Cuban Vice minister also enabled his country to save money, which was critical in importing food to cater for the looming food shortages
- Discuss how you created value within your negotiation & why. If you feel you did NOT create value, be specific in explaining why or why not. (3 points)
Examining the negotiation from both perspectives provided an opportunity to realign our tactics. Other key strategies that were adopted to generate value in the negotiation included assessing the options, generating alternatives, uncovering hidden interests, and evaluating the costs. Eventually, we exchanged currencies and signed a deal
STRATEGY AND BATNA
- Describe the strategy and techniques you used during this negotiation. Provide specific examples, and explain why you felt they were or were not effective.
(3 points)
- I assessed the values and the likeliness of terminating the negotiation.
- I managed his impressions regarding the outcome values.
- I modified his perceptions towards the value outcomes identified and
- I manipulated the level of costs that could be incurred by postponing the negotiation and persuaded him into signing the deal
- Describe the strategy and techniques used by your counterparts. Provide specific examples, and explain why you felt they were or were not effective (3 points)
The major strategy used by my counterpart was deceptive tactics whereby he threatened to give the deal to other suppliers. While they did not provide a proof of the lack of my credibility, he argued that my company charged higher interests.
- What is your estimation of the ZOPA for the quantifiable elements of this negotiation? How did you arrive at those numbers? (1 point)
The estimation of ZOPA was based on the analysis of our values and interests in the negotiation. Their amount of savings to cater for food imports and the amount of interests that could be generated from the deal lead to this estimation.
- What do you believe your counterpart’s BATNA to be? How did you arrive at that conclusion? (2 points)
Deceptive tactics because their president had spelled the need for lower costs and reliable people, and he warned that failure to meet this criteria will mean no business for our company. Equally, suggesting the existence of other suppliers sounded threatening.
- In your opinion, who had the stronger BATNA—you or your counterpart? Justify your answer. (2 points)
I had the strongest BATNA.
- Because I was ready to allow the Cuban government to defer payment until the interests were realized. This deal was too good to be ignored
- The Cuban government was in dire need of saving money for food imports and, this meant that they had money to purchase equipment from other suppliers and at the same time, manage the looming food shortage.
INTERESTS AND CREATIVE OPTIONS
- Refer back to your IOC Matrix from your Pre-Negotiation Worksheet. In what ways did your perceptions change regarding the interests of your counterpart during the negotiation? Why? (4 points)
My perception regarding the interests of the counterpart changed towards the negative, though there was clearly an opportunity to invest and venture, the deal didn’t adequately cover the risks involved, additionally as the negotiation went on, things began relapsing due to ill interests from the partner
- What creative options were discussed during the negotiation? If none were discussed, why not? (3 points)
A number of creative options in this negotiation were discussed this includes:
- The Cuban sugar manufacturing industry was to adopt various methodological instruments in order to align itself with the new mechanical equipment
- In order to curb with the food shortage in the country the production in the Cuban sugar manufacturing industry was to expanding their markets due to the increased production.
- Personnel employed to operate the machinery were to be adequately trained on how to efficiently run the machines.
RELATIONSHIP AND COMMUNICATION
- Describe the evolution of the quality of your relationship with your counterpart throughout the negotiation, and explain the circumstances that may have caused it to improve or deteriorate. (3 points)
Initially, both parties presented their interests confidently, but as time elapsed, differences in preferences and interests began to show. The circumstances that contributed to these is the fact that there were two parties from different backgrounds with different cultures and interests, additionally, both the teams had had different way of life that hence causing conflicts in the deal.
- Describe the quality of your communication with your counterpart throughout the negotiation, and what you believe the contributing factors were. Provide specific examples from your negotiation. (3 points)
Considering that value judgments differ in people Peterson (2005, p. 18), the all process of communication was not the way it was perceived. The differences in judgments and preferences in the deal can be attributed to the fact that there were widely contrary communication styles and diverse norms from two people from different backgrounds. Additionally both parties had their own interests that in the whole process conflicted with that of the partner.
CULTURE & NEGOTIATION
- What elements of culture (values), if any, had an impact on your negotiation strategy? Use the elements in the table provide below to identify the factors that had an impact. Explain and provide at least 2 or 3 examples (10 points)
Considering that, the Latin Americans are impatient and that the Germans normally, proceed with caution, the deal is more likely to be affected since the two parties have different way of approaching situations. For example, the Germans may push for the need to write down a detailed procedure while the Latin Americans will want an informal procedure to be used.
The Germans will make decisions after a detailed understanding and research about how the whole process will work, on the other hand the Latin Americans will make decisions with no much detailed information since a little understanding is enough to make the right decision.
Time to the Latin Americans is not very important, considering that the Germans are time conscious, the two teams are more likely two conflicts based on this difference. For instance, the Germans will want the meeting session to focus fully on the agenda while the Latin Americans will show their interests on informal talking.
- What can you say about the other side? Did it affect the negotiation process & results? If it did, how, where & why? Be specific. (10 points)
Other than the culture difference between the two teams, a number of other factors affected the negotiation:
Considering that the two teams are profit oriented, the negotiation could not go on well. The conflicts in interest within the two teams were likely to cause disagreements, for instance, the team offering the machinery may want the returns to come along with huge interests while on the other hand the buying team is willing to pay a little interest, this will definitely lead to conflict.
Conditions posed by the two companies independently may cause disagreements as well. For example, the company offering the machinery may give out the conditions that after the prosperity of the sugar company, it has to take more machinery a situation that is likely to cause conflict.
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TOTAL POINTS FOR POST-NEGOTIATION WORKSHEET:
- 57 points for content
- 6 points for presentation
_____ /63 = _____ / 20
References
Heavrin, C., and Carrell, M. (2008). Negotiating Essentials: Theory, Skills, and Practices, Pearson Education, pp 41-43
Lothar K, (2008). Negotiating International Business and Principles of Negotiating International Business Charleston, SC and Booksurge LLC
Oertig, M. & Buergi, T. (2006). The challenges of managing cross- cultural virtual project teams. Team Performance Management, 12.1(2006), 23 - 30
Peterson, R. A. (2005). Business ethics: New challenges for business schools and corporate Leaders. Armonk, NY [u.a.: Sharpe.
