value creation

The result of cooperative problem-solving skills in a negotiation that uncover joint gains for both parties. Value creation is an aspect of Òwin-winÓ or Ònon-zero-sumÓ negotiation, in which both parties benefit from the agreement. (David A. Lax and James K. Sebenius, 3-D Negotiation [Harvard Business School Press, 2006], 17)

The following items are tagged value creation.

Enhancing Your Deal in Business Negotiations

Posted by & filed under Sales Negotiations.

Not all contracts are created equal. Some maximize joint through creative trades, while others are barely satisfactory. Strategic wariness causes many people to leave untapped value on the bargaining table. Of course, agreements based on incomplete and distorted information aren’t likely to be efficient.

Keeping the Game Out of Court

Posted by & filed under Business Negotiations.

Sometimes those on opposite sides of a bitter dispute can achieve great gains – if only they can spot the ways in which they are similar.

In 2001, the Metropolitan Intercollegiate Basketball Association (MIBA), an organization of five New York-area colleges best known for staging college basketball’s National Invitation Tournament, filed a lawsuit against the National Collegiate Athletic Association (NCAA). MIBA allege that certain NCAA rules governing team participation in preseason and postseason tournaments restricted school’s participation in MIBA tournaments, in violation of various antitrust laws. After four years of litigation, the two parties announced not only that they would settle a lawsuit but also that the NCAA would purchase the rights to the MIBA preseason and postseason tournaments.

A Value-Creating Condition Thwarted

Posted by & filed under Business Negotiations.

In late 1999, with its stock in free fall, NCS HealthCare, a provider of pharmacy services to long-term care facilities, began “exploring strategic alternatives” – code in the mergers and acquisitions world that NCS’s board wanted to put the company up for sale.

In 2001, Omnicare, a larger provider in the same general industry, offered to buy NCS for $270 million, a number lower than the value of the company’s debt. The deal would have left the company’s stockholders with nothing, and talks broke down when NCS demanded a higher price. In June 2002, Omnicare’s fierce rival Genesis HealthCare came to the table with an offer for NCS. Fearful of having its deal stolen away by Omnicare, which had just beaten Genesis in a bidding contest for another company, Genesis proposed a condition on the deal. It would make an offer only if NCS’s chairman and president, who together held a majority of the voting shares, committed to the Genesis deal and rejected any competing offer from Omnicare. NCS accepted this condition, and the merger was announced on July 28, 2002.

Water Diplomacy: Understanding Uncertainty, Risk, and Opportunity in Water Management

Posted by & filed under Dispute Resolution.

When countries face contending water claims, one of the biggest obstacles to reaching an agreement is uncertainty. Specifically, there are three types of uncertainty: uncertainty of information, uncertainty of action, and uncertainty of perception. In part 2 of this 5 part series, Program on Negotiation faculty member Lawrence Susskind explains the uncertainties facing negotiators trying to make agreements.

Want the Best Possible Deal? Cultivate a Cooperative Reputation – Collaboration and Value Creation

Posted by & filed under Conflict Management.

In negotiation, different types of reputations serve different purposes. When you’re haggling over just one issue, such as the price of a used car or a computer installation, one party’s win is typically the other’s party’s loss. In such distributive negotiations, where each party is trying to claim the biggest piece of a fixed pie, having a reputation as a tough bargainer can be an effective means of undermining a competitor’s confidence and power.

Do You Need a Broker?

Posted by & filed under Conflict Resolution.

According to conventional wisdom, you should always hire a real estate agent when you’re trying to buy a house. The broker’s market expertise will help you decide what moves to make and what price to pay. Because the seller usually has his own broker, the motto “fight fire with fire” applies as well. Perhaps most important, home buyers don’t even have to pay their brokers; the seller’s broker splits the commission with your agent. Hiring a buy-side broker splits the commission with your agent.