Wright Plane

General: What happened; what was the outcome; were you successful or not; why and why not;

The negotiation started off with a discussion of who each participant was and what our intentions in the negotiation were. It was friendly from the beginning. Our first offers had a wide gap with his first offer being $35000 with the plane fixed up and mine being $5000 with the plane as is. We continued to talk about how we might bridge this gap talking about various options to create value. We learned very on that it would make sense for me to trade service on Graham’s car for value in the plane. We also worked on ways that more value could come from his role as editor at the paper. After discussing these options for a little while we made our next round of offers. He came down to $25000 and I came up to $7000. This gap remained large and we continued to discuss ways that we could make value. Graham played down the need to have his car repaired saying that cash was more important to him. I continued to offer my car service and explained to him that if he was going to fix up the plane and sell it new, as a repairman I know that if he was quoted $15000-$18000 worth of repairs that means it really comes out to $20000. Our next round of offers I came up to $8000 and included the repairs if he would come down. He came down to $21000. We negotiated that I would have an article written about my new charter business and ads placed in the paper for both the garage and the charter airline, while I offered him the ability to use my plane on occasion for supervised recreational flying, as he no longer had a plane. My offer came up to $10000 and he came down to $17000. Graham was very reluctant to come down any lower than this, so we continued to try to make value. We came up with a number of creative scenarios about advertising and use of airplanes for the newspaper, but Graham was reluctant to make any commitments as he was unsure of the power he had to negotiate these things as an editor. We got closer to making a deal with our next bids coming to $12000 and $14000, both of us at our walkaway. We were able to bridge this gap by negotiating the use of my charter plane, when available, for reporting purposes for the newspaper which would include the airlines name in the caption. We agreed on $13000, with $12000 up front and $1000 a year later. I broke my walkaway by $1000, but the publicity that would be generated by the article, ads, and captions were definitely worth the extra $1000 and labor on the car.

A test: was my negotiation effective? (some of these may not apply in a particular exercise)

Score yourself from 1=poor to 5=excellent

_4_ Planning and Strategy: did I have a strategy; was my walkaway right; did I estimate the other’s well?

_4__Did I establish my own priorities and potential trade-offs

_5__First approach: were we win-win, positive; try to establish rapport; did I deal with first offers effectively?

_4__How well did I develop a plan for managing the process of negotiation?

_4__Did I actively shape the agenda and manage the process to my advantage?

_4_How well did I try understand the other person:

_5__Exploring Interests: did I communicate my interests;

_4__Persuasion: How well did I persuade the other side about my legitimate needs and limits and the value of what I offered

_5_The Other's Interests did I find out the other side's real interests and constraints

_5__Creating Value (integrative or win-win) vs Claiming Value (distributive or win-lose)

_5__Options: Did we explore "expand the pie" options: did we try to find ways of meeting each party’s needs

_5__Inquiry vs. advocacy: did I ask (inquiry) a lot of questions, or just advocate my position

_4__Alternatives: Was I clear on my BATNA; was I clear about what happens if there is no agreement

_4__Legitimacy: was the agreement considered fair by some external benchmark

_4__Commitments: did the agreement avoid problems in the future; were any “strings left untied?”

_5__Communication: did we practice effective two way communication…did we listen…did we rephrase…

_5__Focus on the problem, not the person: did we avoid attacking or threatening the other person

_4__Relationship: did we deal well with differences; is our relationship better off now than before

_4__Psychological factors: did outside factors (eg. emotions) affect the outcome (their efforts or ours)

_4_Did we reach an outcome that maximized potential mutual gains; did we come close to the "Pareto Frontier?"

For Yourself: General Conclusion: In areas where you felt you were less than totally successful, how might you be more effective next time. From this exercise, what did you learn that you are going to try to do better next time you negotiate;

The success of this negotiation came from the fact that we were both able look for mutual gain off the bat. It seemed clear that we were not going to be able to settle on a dollar amount without some other exchange of value, but with the wide spread in numbers I don’t know how this negotiation would have proceeded had this not been a class. I’m not sure what I would have done differently in this negotiation. We felt like our hands were tied, because we could not assign value to our creative pieces of value and thus had to put those ideas aside. I felt that I had the upper hand for most of the negotiation as I was below my walkaway and had negotiated lots of value for my businesses. Graham, however, was very reluctant to come down, because cash seemed like a large priority and, as said above, was not comfortable negotiating too much in relation to the newspaper, because his power was limited as an editor. I did, however, really want to make the deal, because even breaking the walkaway it was much more valuable to get the charter business up and running.