You will be supplied with an information brief describing the confidential negotiation positions and interests of two international organisations about to engage in negotiations. You have been engaged by both parties to the negotiation to prepare an independent detailed report advising them on a recommended approach to the negotiation. This should include a recommended negotiation strategy, negotiation best practices and an appraisal of the potential risks that may contribute to the conclusion of a suboptimal agreement or no agreement being reached. In preparing your report, you should consider all the relevant factors that may have a bearing on the negotiations. Whilst most of the report would apply to both organisations, you may wish to include separate confidential briefings for both parties on issues which are specific to them. In particular, you should make reference to relevant literature and concepts studied within the module.
Table of Contents
1 Introduction
1.1 Type of Settlement
2 Vision
2.1 Negotiation Interests
2.2 Negotiation Strategy
2.3 Negotiation Preparation
2.4 Negotiation Tactics
3 Value
3.1 Deal Objectives
3.1.1 Aspiration Base (AB)
3.1.2 Real Base (RB)
3.1.3 Zone of Possible Agreement (ZOPA)
3.1.4 Best Alternative To Negotiated Agreement (BATNA)
4 Negotiation Process
4.1 Framing
4.2 Questioning
4.3 Team Negotiation
4.4 Seating Arrangement
4.5 Value Creation (win more / win more)
4.5.1 The Disney Method / Creativity Model
5 Relationship
5.1 Trust
5.2 Communication
5.3 Cultural differences
5.3.1 Negotiation in China
5.3.2 Corporate Culture
5.4 Persuasion
5.5 Negotiation Strategy
5.6 Negotiation Tactics
5.7 Appraisal of Potential Risks
5.7.1 Dealing with Oligopolies
5.7.2 Complex and Multi-stage Projects
5.7.3 Failed Deal
5.8 Negotiation Preparation Checklist
5.8.1 Pillar 1: Vision
5.8.2 Pillar 2: Value
5.8.3 Pillar 3: Process
5.8.4 Pillar 4: Relationship
5.9 Negotiation Strategy
5.10 Negotiation Tactics
5.11 Appraisal of Potential Risks
5.11.1 Capture Problem
5.11.2 Conflicts of Interest
5.11.3 Failed Deal
5.12 Negotiation Preparation Checklist
5.12.1 Pillar 1: Vision
5.12.2 Pillar 2: Value
5.12.3 Pillar 3: Process
5.12.4 Pillar 4: Relationship
6 Conclusion
7 Literature
7.1 Books and Papers
8 Appendices
8.1 Chemical Company International (confidential)
8.1.1 Three Questions Test – (Appendix Part 1)
8.1.2 Negotiation Strategy Selector Test – (Appendix Part 2)
8.1.2.1 Selection of the Strategy from CII`s Perspective (Potgieter, 2014)
8.1.2.1.1 Importance of Time
8.1.2.1.2 The Number of Alternatives
8.1.2.1.3 The Importance of the Relationship
8.1.2.2 The Negotiation Strategy Outcome from DM`s Perspective
8.1.2.2.1 Importance of Time
8.1.2.2.2 The Number of Alternatives
8.1.2.2.3 The Importance of the Relationship
8.2 Dragon Manufacturing (confidential)
8.2.1 Three Questions Test – (Appendix Part 3)
8.2.2 Negotiation Strategy Selector Test – (Appendix Part 4)
8.2.2.1 Selection of the Strategy from DM`s Perspective
8.2.2.1.1 Importance of Time
8.2.2.1.2 The Number of Alternatives
8.2.2.1.3 The Importance of the Relationship
8.2.2.2 The Negotiation Strategy Outcome from CII`s Perspective
8.2.2.2.1 Importance of Time
8.2.2.2.2 The Number of Alternatives
8.2.2.3 The Importance of the Relationship
Objectives and Core Topics
The primary goal of this case study is to provide comprehensive recommendations for an international negotiation between Chemical Company International (CCI) and Dragon Manufacturing (DM) regarding the supply of a specialized VBY compound, utilizing the Negotiation Toolkit framework to achieve a successful and synergistic partnership.
- Application of integrative negotiation strategies to resolve supply chain requirements.
- Strategic preparation based on the "Seven Element Model" and negotiation checklists.
- Management of cross-cultural communication and relationship dynamics between Western and Chinese business entities.
- Risk appraisal, including the challenges of oligopolistic market conditions and potential conflicts of interest.
- Value creation techniques, specifically focusing on the Disney Method for collaborative problem-solving.
Excerpt from the Book
2.1 Negotiation Interests
Your interests are your goals, needs and motivation. These interests are fundamental drivers during a negotiation (Dobler, Lee and Burt, 1984). A lot of negotiators assume that their goals are adversarial with the main focus on conflicting interests, but the potential value of shared interests may be larger than the value in dispute (Malhotra & Bazerman, 2008). Especially in your case the potential value is huge.
Interest-based negotiating is called integrative negotiations (Fisher, Ury & Patton, 1987). It is a set of techniques that attempts to improve the quality and likelihood of negotiated agreements by providing an alternative to traditional distributive negotiation techniques. While distributive negotiation assumes there is a fixed amount of value (a "fixed pie") to be divided between the parties, Integrative negotiation often attempts to create value in the course of the negotiation ("expand the pie") (Brazeal, 2009).
But remember that Integrative negotiating often involves a higher degree of trust and the forming of a relationship (Barry & Friedman, 1998). It can also involve creative problem-solving that aims to achieve mutual gains for both parties.
Summary of Chapters
1 Introduction: Introduces the negotiation context between CCI and DM and defines the overarching purpose of providing evidence-based best practice recommendations.
2 Vision: Explores fundamental negotiation interests, strategic approaches (such as integrative negotiation), and essential preparatory steps using established theoretical models.
3 Value: Defines key deal objectives including Aspiration Base, Real Base, ZOPA, and BATNA to ensure negotiators understand the distinction between price and value.
4 Negotiation Process: Examines tactical elements like cognitive framing, questioning techniques, team composition, and seating arrangements to manage the interpersonal dynamics of the meeting.
5 Relationship: Discusses the significance of trust, communication, and cross-cultural competence, specifically highlighting differences between Western and Chinese business norms.
6 Conclusion: Summarizes the readiness of the parties and reinforces that an integrative approach is critical for long-term synergy.
Keywords
Negotiation, Integrative Bargaining, Supply Chain, Strategic Management, Cross-Cultural Communication, VBY Compound, BATNA, ZOPA, Relationship Management, Conflict Resolution, Chemical Industry, Team Negotiation, Integrative Negotiation, Value Creation, Professional Competence.
Frequently Asked Questions
What is the core focus of this negotiation report?
The report provides a professional advisory framework for an exclusive supply agreement negotiation between a UK-based pharmaceutical firm (CCI) and a Chinese chemical manufacturer (DM).
Which central topics are analyzed in the document?
The document covers strategic vision, value creation, process management, and relationship building, grounded in established negotiation theories.
What is the primary objective of the proposed negotiation?
The primary goal is to establish a sustainable, exclusive supply agreement for the VBY compound that provides value for both parties through synergy and long-term partnership.
Which scientific method is utilized in the study?
The study applies the "Negotiation Toolkit" by Potgieter, alongside recognized academic models such as the "Seven Element Model" and the "Disney Method" for creative problem-solving.
What is covered in the main section?
The main section details best practices for negotiation preparation, including the identification of goals, the establishment of BATNAs, and the management of cultural and corporate differences.
Which keywords characterize this work?
Key terms include negotiation strategy, integrative bargaining, cross-cultural competence, and strategic supply chain management.
Why is the "Capture Problem" relevant to this specific case?
It highlights the risk that the negotiator, Chris Waters, might prioritize his personal relationships with CCI over achieving the best possible deal for his employer, Dragon Manufacturing.
How does the "Puppy Dog" tactic benefit Dragon Manufacturing?
It allows DM to demonstrate their reliability and high quality to CCI, effectively mitigating the buyer's skepticism regarding a new international supplier.
- Quote paper
- Jochen Kasper (Author), 2014, Negotiation Management. A Case Study on Strategy Selection, Munich, GRIN Verlag, https://www.hausarbeiten.de/document/293243
