Negotiation Checklist

Negotiation Checklist:

A.    About You 

1.     Currently reviewing job offers from FourCom and Robust Routers.  Interned with Robust Routers over the summer, Leigh Bulterma was Joe Tech’s manager during the internship and the individual that Joe will be negotiating his job offer with.

2.     Joe Tech aspirations and interests going into the negotiation with Robust Routers.

-          Prefers to start in Business Development over Associate Product Manager.  

-          Would like Robust Routers to match the $15,000 sign on bonus offered by FourCom.

-          Negotiate a better relocation allowance that covers all moving costs, broker costs, potential storage, and a flat sum for other extraneous costs.

-          Stock options, not a strong point given uncertain market, last resort if Joe cannot convince Robust Routers to concede on other issues.

-         Start date is not overly important but Joe wouldn’t mind traveling Europe for a couple months after graduation

Issue 1:	Business Development Position
	Maximum Value:				100 Points
RR Business Development Position					100 Points
FourCom Business Development Position					75 Points
RR Associate Manager Position (but move up)					50 Points
Start-up Company Business Development Position					25 Points
RR Associate Manager Position (Stagnant)					0 Points
Issue 2:	Salary
	Maximum Value:				100 Points
RR Business Development Position $101,000					100 Points
FourCom Business Development Position $101,000					75 Points
RR Product Manager Position $83,000					50 Points
Start-up Company BD Position $95,000					25 Points
RR Associate Manager Position $88,000					0 Points
Issue 3:	Signing Bonus
	Maximum Value:				100 Points
RR $10,000 Bonus					100 Points
FourCom $15,000 Bonus					50 Points
RR $10,000 Bonus OR Start-Up Company					0 Points
Issue 4:	Relocatoin
	Maximum Value:				100 Points
RR $15,000 Package					100 Points
FourCom Package					75 Points
RR $10,000 Package					50 Points
RR Original Package $,5000 OR Start Up Company					0 Points
Issue 5:	Start Date
	Maximum Value:				100 Points
RR BD Position and Time to Travel					100 Points
RR BD Position  but Start Right Away					75 Points
RR PM Position and Time to Travel					50 Points
RR PM Position  but Start Right Away					25 Points

. Offer From FourCom                                             0 Points

Issue 6:	Stock Options
	Maximum Value:			100 Points
RR Stock Packate 1,000 Stocks + 500 Per Yr.				75 Points
FourCom Stock Packate 1,000 Stocks + 500 Per Yr				25 Points
Start Up Company				0 Points

3.     BATNA/Aspiration/Resistance Point – If the negotiation with Robust Routers does not conclude with a satisfactory job offer, Joe Tech can accept the offer from FourCom or continue the job search.  

-          Salary/Title:

o     $83,000 (88-5) (R)

o    $101,000 (A)

-          Assignment:

o    Associate Product Manager (R)

o    Business Development Manager (A)

-          Signing bonus:

o    $10,000 (R)

o    $15,000 (A)

-          Relocation:

o    $5,000 (R)

o    $15,000 (A)

-          Stock options:

o    1000 + 500 Per Year (R)

o    1500 + 500 Per Year (A)

-          Start date:

o    May (R)

o    Later (A)

B.    About the Other Side

1.     Importance of Issues

-          Assignment

-          Salary

-          Start Date

-          Signing Bonus

-          Relocation

-          Stock Options

4.     Relationship Between Parties

-          Leigh Bultema was Joe Tech’s manager during his summer internship. 

-          Internship was favorable, some level of trust between both parties.

-          The start date is June 1, 2016 indicating a sense of urgency on Robust Routers end. 

Crawley and Phillips Negotiation Review Relating to Assigned Readings

The in class negotiation, Universal Computer Company, favored a collaborative outcome and was easily resolved using the approach geared to reconciling interests.  My role was the Crawley Plant Manager, who was to negotiate with the Phillips Plant Manager on the issue of defective modules.   The company is vertically integrated and the modules that come from the Crawley plant are used by the Phillips plant in the next steps of manufacturing a final product.  Crawley has an acceptance level of 95% overall, and produces 42 individual modules.  Phillips plant has been experiencing quality issues with 12 of the modules produced and supplied by the Crawley Plant.   The defective modules have caused several issues for the Phillips plant including, delayed production, added inspections, and customer complaints.  Even though both plants work for the same parent company, each plant is individually responsible for the production of their products and each manager has the interest of their plant in mind and future evaluations by their higher ups are most likely performance based.  Failure to come to an agreed upon solution could cause trouble for both managers.  The success of a collaborative agreement is based on the relationship which has present and future value and a focus on the outcome, this method of negotiation will result on a win-win for each party.

My negotiation partner and I began the discussion by laying out the concerns.  Going in to the negotiation, my interpretation was that Crawley was lacking in their product inspections and rather then become defensive it was better overall to work with the other party to gain ideas and to better the production process as a whole.  Empathizing with the Phillips manager and trying to place yourself in their position helps to better identify the underlying problem and find a solution suitable for both parties.  If I were the Phillips Manager and my production line was suffering due to defective modules, I would be upset by being put in a position where I could not control the modules I was receiving and in turn it was effecting the overall success of my plant.  Being that the company is integrative, the Phillips plant manager does not have the option to negotiate with a different supplier to provide the same modules that Crawley is supplying.   Crawley may have a 95% overall acceptance rate, but they can increase the acceptance rate by better screening the 12 commonly defective modules and help Phillips become more productive at the same time.  If Crawley can use the advice and ideas from the Phillips manager than both plants will operate more efficiently.

We started by finding common ground and agreeing that the 95% acceptance rate, even if it was not defined as such in the background give in the case, should be defined as the acceptance rate for each module individually.  This opened the negotiation up to further collaboration.  My main goal was not to have Crawley fully responsible for the repair cost associated with the current defective modules that Phillips was holding, as it could reflect negatively on the Crawley balance sheet and in turn give top management an unfavorable view of the Crawley Manager’s production.   My partner had a valid argument that Crawley should be responsible for the repair cost but we were able to meet in the middle since the 95% acceptance rate was not clearly defined.  Since we agreed early on that the production and inspections prior to shipment to Phillips should be more closely monitored my partner was more open to negotiating splitting the repair costs.  Since relationship was important in this negotiation, I agreed that moving forward Crawley would be held financially responsible for repair costs incurred if the acceptance rate fell below 95% on any individual module.  The agreement to hold each module to 95% was meant to establish trust, and if I agreed to hold Crawley responsible in the future than my partner was more open to splitting the initial cost.  Such agreement made him believe that I had a sincere intention to remedy the problem of defective modules.  We also agreed to have a Phillips manager present at the Crawley plant to aid in the extra inspections needed on the faulty 12 modules.  In Hein site I’m not sure how this was beneficial to Phillips, and Crawley could run the risk of appearing incompetent to upper management but at the time it seemed like a good idea, but an unnecessary one.  Perhaps it was a way to make the Phillips Manager feel as though he was in a power position to allow him or his direct employees to aid in the module inspections at Crawley. In the end we were able to come to a mutually acceptable agreement which each party deemed fair and kept the relationship in tact which could lead to future mutually favorable negotiations.  I feel we both understood the need for collaboration and followed the steps accordingly by starting out not pointing fingers but trying to understand the problem, generate solutions, and select the best solution which lead to each party leaving the negotiation feeling as though the agreement reached was fair for both Plants.   

Tactics and Goals

Before you can enter into a negotiation with another party you must first have a clear understanding of the goals you wish to accomplish, and not lose sight of the goals.  Some negotiation tactics employed by the other party are designed to through you off kilter and lose site of the goals initially set and potentially end in an agreement satisfying the other party’s goals and not your own.  Prior to entering into negotiation once should have a solid idea of what strategies and tactics they plan to use and which they will resort to if the other party preforms unexpectedly.  Depending on the desired outcome and what is important in terms of future relationships, and outcome some tactics may be positive and some may in turn be negative and effect any future negotiations the party may encounter with one another.  Bernie Madoff said “whoever speaks first loses,” despite his lack of moral regard, he was able to “win” his negotiations, in part through silence.  In some situations one party will provide too much information to the other party and not realize.  Thinking back through my own personal negotiations, I am guilty of talking too much.  It’s a way of breaking the ice, creating a relationship, and establishing a comfort level but at times, I wonder if I provided too much information and put myself in an unfavorable position to achieve the outcome I wanted.  A personal goal would be to practice silence in certain situations and listen to the other party to get a better handle on their position and possible incite on to their next negotiation tactic.  When the other party becomes silent, I feel more of a need to spark discussion and therefore I put myself in a position to lose.

Another goal would be to better understand the tactic of reversal.  More often than not when I meet with potential clients and begin a negotiation, they are more researched because of the monetary cost of the decision.  Not that I don’t do my homework, but it’s more difficult to close a deal when the other party feels they have the upper hand.  In real estate if I am showing a home, and the other party knows exactly long the home is been on the market, the price reductions that occurred, the potential disparity of the owner to rent of sell the home due to the current market conditions it becomes harder to convince a prospect that if they choose not to move forward that there is a large pool of folks are interested beyond them.  When someone is armed with facts they try to negotiate in their favor and you tend to be on the side giving in to compromise and losing more of the deal.  I have utilized reversal in the past and it has worked, but there are times that it has not worked favorably.   I would like to learn how to switch the power play back to my favor in certain more competitive situations.  I don’t necessarily revere reversal as negative, it could be depending on the application, but I believe in truthful, honest and upfront negotiation.  Facts are facts it’s how you respond to the facts whether they be positive or negative that aids in closing the deal.  If one is untruthful in their response than the situation becomes negative. A third goal is to create a reputation for credibility, and set a higher personal standard of not being too nice, but establish trust through relationships bonded by creativity, focused on mutual gain, and collaboration.

Calling it quits seems and making assumptions are two negative tactics in negotiation.  Walking away or calling it quits, demonstrates an inability to think of a creative solution, collective work with another individual.  In a situation where the opposing negotiator seems to be unwilling to waiver, refuses to negotiate fairly or simply acts abrasively, the likeliness that they would be able to negotiate to a fair conclusion seems small as they are either unwilling or unable to think creatively.  I would like to learn enough tactics to avoid a situation where the best option seems to be calling it quits.  A new commercial has been aired that put’s a comical spin on making assumptions.  An assumptive comment is make while a couple is driving a car down the road, and both turn in to donkeys.  The statement is made by the other party “you know what happens to both you and me when you assume.’ It’s easy to make assumptions especially since assumptions can be made subconsciously and without second thought.  The goal would be more mindful of expected assumptions and be mindful that you could potentially be making assumptions without realizing. Negotiating without making assumptions seems like a goal that may take some expertise to attain. Working on assumptions and consciously avoiding assumptions would be the main goal, and focus on the tactics after building a starting point of clear mindedness.