67 Fish Pond Lane in Cambridge, MA was purchased five years ago for $95,000 by two lawyers. Since then, its value has at least doubled. The owners, expecting to stay for some time, kept the house in excellent condition and added several unique features, including an elegant high-tech aviary for exotic birds. The owners recently moved to California, however, and the house has been on the market for a month. Two graduating business school students are interested in purchasing the house. One or both of them plan to meet with one or both of the owners while the latter are in town for a few days to see if a sale can be arranged.
The exercise is a little more natural as a one-on-one negotiation with absent partners, but two-on-two negotiations also work and provide some interesting team dynamics. All instructions are neutral as to sex and marital status.
For all parties:
Confidential Instructions for:
- This exercise usually generates difficult negotiations. In this familiar context the stakes seem large, and while there are many objective criteria on point, they are neither fully consistent nor determinative. The tendency to haggle is strong, and a variety of bargaining tactics can be used. Review can explore which tactics were effective under what circumstances, and why.
- Many important concerns and legitimate criteria in the case are intangible and/or difficult to measure. This raises the question of how arguments can persuasively be turned into numbers.
- The exercise is a good one for focusing closely on what specific events cause parties to change their offers, and what brings them to the point of closing the deal.
- A discussion of deadlines, their effects and how to create them, is usually appropriate.
- Comparison of results also raises questions about what techniques, attitudes and tactics produce more competition and/or animosity? How does amicability correlate with pareto optimality of results?
- A variety of questions are raised concerning the concept of BATNA. How does a party’s perception of its BATNA affect conduct in the negotiation? How should it? How can BATNAs be improved? When is it ethical to try to change the other side’s BATNA for the worse? When not? What are some ways of doing that?
- This exercise also facilitates a rich post-mortem consideration of how the parties might have prepared better.
Anchoring; BATNA; Bluffing; Closure; Commitment; Fairness; Information exchange; Interests, dovetailing; Interests, quantifying; Joint gains; Legitimacy; Misrepresentation; Objective criteria; Offers, first; Reservation price; Systems of negotiation
This is a two-person scored negotiation simulation involving a venture capital investment. Individuals are scored on their ability to attain favorable investment terms for themselves and on the quality of the relationship they develop with their potential business partner. The simulation introduces the incorporation of process and relationship interests into negotiation strategy. Relationship-straining conflict has been purposefully included in the negotiation to assess students’ ability to deal with difficult demands while maintaining a positive relationship.
The venture capital (VC) firm Aerovent Capital is considering a $100 million investment in the startup company Earth Escape. The founder of Earth Escape and the lead partner from Aerovent Capital must negotiate a term sheet outlining eight significant terms of the investment. Both parties are concerned with structuring a deal that protects their substantive investment interests and with creating a positive foundation for their potential collaboration. Thus, both individuals are scored on their ability to negotiate favorable investment terms for themselves and on the quality of the relationship they develop with their potential business partner. Each negotiator’s Total Score is a sum of Substantive Points, awarded according to the agreed-upon terms of the investment, and Process Points, awarded according to each partner’s perception of the negotiation process.
The eight negotiable terms of the investment constituting the Substantive Points include: VC equity percentage, type of stock, dividends, antidilution rights, number of VC-appointed board members, vesting of the founder’s shares, CEO replacement provision, and “no shop” provision. The confidential instructions for the venture capitalist and founder outline specific point values and resistance points for each term. Both parties’ BATNAs (Best Alternative To a Negotiated Agreement) are described and quantified. After the term sheet has been agreed upon, the VC and the founder independently fill out questionnaires that ask them to evaluate each other on five attributes to determine the amount of Process Points they are awarded. These attributes serve as proxies for assessing the future of the business relationship based on their experiences during the negotiation. Both negotiators aim to maximize their individual Total Scores. Familiarity with venture capital investing is not a prerequisite for this simulation.
You can see the Aerospace Investment negotiation game being played by participants in this short, two-part video. Part A:
And Part B:
Participant materials include:
- General Instructions for both parties
Confidential materials for Venture Capitalist, including:
- Confidential Instructions
- Process evaluation of the Founder
Confidential materials for the Founder of Earth Escape, including:
- Confidential instructions
- Process evaluation of the Venture Capitalist
Teacher's Package includes:
- Results and Analysis by Professor Gordon Kaufman from his 2010 course
Akron Steel, one of the largest recyclers of ferrous metals in the U.S., is looking to expand even more in the next five years. Poor sales performance over the last six months, however, may limit Akron’s access to capital for expansion. A task force investigates the problem to determine the reasons for poor sales performance and provide recommendations to correct the problem.
When it’s discovered that regional sales managers were overstating their sales estimates the presentation goes ahead but tempers flare. A facilitator is brought in for a follow-up meeting to address the ramifications of the blow up and help the task force get back on track by rebuilding trust within the group and clarifying what the task force would do regarding the charge of poor sales forecasting.
By meeting with each task force member the facilitator determines that the areas of concern are financial impact, customer and supplier relations, and human resources.
In groups of six, facilitators and task force members create maps of the conflict using a matrix illustrating how issues should be framed and what agenda the next task force meeting should follow.
Players have 30 minutes of preparation time. Mapping the conflict takes about 70 minutes.
- the effect of relationships on negotiation outcomes
- resolving conflict and clarifying issues before negotiating
- techniques for mapping a conflict in an emotionally charged situation
- overcoming emotional obstacles in problem solving
- giving order and clarity to a emotional issue
- decoding communication
For all parties:
Role-specific instructions for:
B. Davis: Chair of the Task Force
K. Martin: Product design specialist
R. Nakano: Special assistant to the vice resident of Sales
An Actual Small Claims Mediation
Sometimes it is helpful when discussing small claims mediation to have an actual case for students, mediators, litigants, and lawyers to study. This copy of the agreement reached between J. Construction Company, plaintiff, and the Elk Knights of Odd Fellows, defendant. The Elk Knights deducted several hundred dollars from the bill for construction of their new hall, claiming that the construction company went over schedule, left a mess, and made use of their custodian. The Knights also found fault with the quality of the construction. The Plaintiff claimed $870.00 plus $95.57 interest and $15.30 in court costs. The plaintiff made two claims in an attempt to circumvent the $750.00 limit on small claims court.
This is a discussion piece best utilized as a supplement used with other mediation role simulation or as a tool to guide people through the mediation process.
Version A: Axis Electronics is a huge Silicon Valley-based computer firm with its Microcomputer Development division of sixty employees located just outside Boston. Richard Van Heusen, Executive Vice President of Microcomputer Development, hired Denise Webster, a life-long New Englander with high academic credentials in microcomputers, to work as a manager in the division; she is the first female manager in that division, and the only professional woman with whom Richard has dealt in twenty years of business. An extremely challenging work assignment (solo development of a mouse/drawing pad prototype), followed by a series of social advances by Richard, leads Denise to work at home and miss work without explanation. Richard, stating that the project is in jeopardy and that Denise is not committed to Axis, demotes her from her position as project head and gives her notice of termination. Denise's attorney meets with Axis' in-house counsel to discuss the situation and attempt to resolve it before commencing any formal legal activity. Neither party knows much about the other's interest. Resolution of the situation is possible without litigation; while there are salary and profit figures to be handled, and agreement should not occur unless the specific problems of possible sexual harassment and gender discrimination between Richard and Denise are discussed and settled, and a company policy and grievance process for future situations is discussed as well.
Version B: Same as Version A, except that Axis Electronics is a 500-employee computer firm located in Massachusetts; Denise is not specified to be a lifelong New Englander, and has experience with personal computers as well as microcomputers. In this version, it may be possible to gloss over the current situation, but it will not be possible to reach an agreement which involves rehiring Denise but does not set up a company policy and grievance process for handling future situations involving possible sexual harassment and gender discrimination.
The exercise works best with one attorney per side. The parties' instructions require 20-30 minutes to read and analyze. Negotiation can take 40-50 minutes; review can last anywhere from 40-90 minutes.
TEACHING MATERIALS (Both Versions):
For all parties:
- Axis Electronics Attorney
- Denise Webster's Attorney
Teacher's Package (26 pages total):
- All of the above material
- Teaching Note
- List of Suggested Readings
- The partisan perceptions on each side can contribute to difficulty in understanding the other party's "take" on the situation and its causes. Attempts to educate can take place at two levels: educating the other negotiator, and educating the client. Participants can discuss how partisan perceptions affected their acceptance of differing interpretations of the case at hand, and the methods they used to try to educate their negotiating partner. The group can discuss possible ways to educate clients, in the initial interviews and in the post-negotiation discussion and presentation of an agreement for approval (this will be helpful for the client memos each side is required to write after the exercise and review).
- Fairness and power imbalance questions are triggered by the issues of sexual harassment and gender discrimination present in the exercise. These two problems can be specifically addressed, or they can be broadened to serve as a base of discussion of difference issues in negotiating. Participants can explore the possibilities of miscommunication, societal causes, how the presence of a possible stereotype or difference affects negotiating strategy, and how to balance a desire for social change with the client's interests in this case.
Attorney/Client relations; BATNA; Disclosure; Issues of difference; Fairness; Interests, dovetailing; Interests, internal ordering; Lawyering; Objective criteria; Partisan perceptions; Power imbalance
Beaumont Incinerator Exercise
The operation of an incinerator near a racially diverse community in a small, financially depressed town is the focus of debate in this exercise. As members of a "task force," participants must formulate an action plan to address charges of unfairness in the implementation of environmental policy. The exercise asks what are "valid" grounds for claims of environmental justice, who has a right to make such charges, and to what degrees remedies should acknowledge issues of race and class.
This is multi-party negotiation that has the potential for coalitions. The preparation time necessary is 30 minutes. The minimum negotiation time is 1 hour and debriefing can be completed in 1 hour too. The threat of legal action and community outrage is motivation for process in the negotiation.
For all parties:
- Confidential Information for Franz
- Confidential Information for Soren
- Confidential Information for Hamilton
- Confidential Information for Thompson
- Confidential Information for Briggs
- Confidential Information for Price
Teacher's Package (49 pages total)
- Environmental racism has been defined as racial and/or class discrimination in environmental policy making and in the enforcement of regulations and laws, the deliberate targeting of poor communities or communities of color, or the official sanctioning of the presence of poisons and pollutants in life-threatening levels within those communities.
- A process of consensus building can be structured so that environmental justice is achieved. The requirements of such a process go beyond what democracy typically provides (i.e. one cannot depend upon the electoral or voting process to ensure adequate input of consensus).
- Compensation may be part of a response to charges of environmental racism, but public participation is necessary to forestall any future problems.
NOTE: Now available is the Environmental Justice Package, which is comprised of the Teacher's Packages of this exercise and the simulation "Siting an Asphalt Plant in the City of Madrona", and includes the article Risk and Justice, by Patrick Field, Lawrence Susskind, and Howard Raiffa.
Mr. Henry Soles, the wealthy owner of a 1927 custom-made Bentley convertible has hired an agent to sell his car. A corporation has made an offer. The only other likely buyer is Amelia Austin. Mrs. Austin has asked her personal secretary to make an offer for the Bentley. There is no current market price for this unique automobile, although there is some data on various Rolls Royce and other Bentley models. The two representatives are meeting to negotiate the purchase.
After preparation for as little as 5 minutes, this one-on-one negotiation should take 20-40 minutes depending on the skillfulness of the participants. Average review time is 20-40 minutes, or 60-75 minutes if two participants are asked to negotiate the case in front of class.
- This simple case was designed to explore positional bargaining in a classic situation where objective criteria are scarce. Techniques such as anchoring, asymptotic concessions, final offers, pleading lack of authority, low-balling, and so on, can usually be identified among participants' negotiation tactics.
- The case also highlights the importance of the fear of being taken, and the role objective criteria can play in handling that fear.
- The sparseness of the criteria, however, encourage their use as justifications for rigid positions rather than partial data about what might seem fair. This allows a discussion of how the difference manifests in practice and what its consequences are.
- The relationship of BATNA to bottom line is clearly raised.
- The differences between agent and principal interests, authority, and strategy are easily explored.
Anchoring; Authority; BATNA; Interests, quantifying; Objective criteria; Offers, first; Reservation price
Big Pipeline, a construction company, is building a pipeline through land owned by First Nation (Native American) peoples. Twenty years ago, a similar project by the same company left many of the indigenous peoples feeling dissatisfied and unhappy – this has resulted in tensions in this current negotiation. Happily, most of the issues between the Mountain Home Band, the group of First Nations people who will be the most affected, and Big Pipeline have been worked out. One major issue remains – allocation of job opportunities. How many laborers should be used for the construction project and how many of these jobs should be reserved for Mountain Home Band people?
It is possible to negotiate agreements that create gains for you and for them–you can both beat your BATNA. To create joint gains, use the Mutual Gains Approach:
- Know your own BATNA and interests
- Communicate your interests, and probe for their interests
- Trade across issues you value differently
- Use standards you can both accept to help you choose among options and packages
Manage the opportunities and dangers involved in setting aspirations:
- Set your aspirations high
- Be responsive to new information; don't be rigid.
- When you do adjust your aspirations, be careful not to leave value unclaimed.
- Help your partner do the same.
Negotiate as if relationships mattered:
- Don't jeopardize long-term relationships by pushing too hard for short-term gain.
- Effective "cross-cultural" negotiation depends upon making sure you are understood (and understand).
- The rewards of modest risk-taking can be substantial. There will always be tension between the advantages of cooperation and the need to "compete."
- Good negotiators develop a repertoire of negotiating styles.
- You have to talk about relationships to improve them.
This negotiation may be run within 30 minutes with a 10 minute prep-time. You should allow at least 20 minutes for debriefing
For all parties:
- Big Pipeline Project Manager + score sheet
- Mountain Home Band Chief + score sheet
Additional Teaching Notes:
- Summary of 'lessons learned'
- Summary score sheet for 120 players
The complaints clerk in a department store sees a customer coming with a blender recognizable as one of the store's special super-sale items. The store cannot return these items to the manufacturer. The clerk has a small weekly budget to absorb the cost of such items, if returned, and the department head has instructed that it be used sparingly. The budget for this week is overspent. The customer, having used the blender for over a week, believes it is either defective or an inadequate appliance, and has therefore decided to return it.
This negotiation works well as one-on-one, but can be extended to two-on-one, by including another participant on either side. It takes no more than five minutes to run; debriefing can last up to half an hour with several replays. The exercise can be run as is, or one or both parties can be given additional psychological instructions about their character (making it more of a role play for that party, instead of a negotiation).
- The scenario makes it easy to slip into a negative, reactive mode, with unsatisfactory outcomes often resulting.
- Those parties willing to consider the perceptions and interests of the other party as relevant can usually engage effectively in mutually beneficial joint problem-solving.
- The persuasive effect of threats, cajoling, anger, helplessness, crying and other techniques can be explored.
- Confidential Instructions for the Clerk
- Confidential Instructions for the Consumer
Consumer; Interpersonal; Psychological; Small claims
Apologies; BATNA; Communication; Credibility; Emotions, role of; Fairness; Interpersonal skills; Misrepresentation; Nonverbal communication; Objective criteria; Power imbalance; Threats; Yesable propositions
Terry Holtz, a senior editor with a highly regarded, independent publishing firm has received a proposed book entitled Entrepreneurial Schools written by a young, up and coming, but never before published author. Terry is extremely interested in the book and is willing to pay an exceptionally high author's advance for the book. Jay McIntyre is a successful literary agent and represents Rachel Leonard, author of Entrepreneurial Schools. Jay has shown Rachel's manuscript to one other publishing firm than Terry's and has since found out that they are not interested. This coupled with Rachel's professional ambitions, which would be helped greatly by the visibility that comes with publication, has made Rachel anxious to close the deal with Terry's firm fast. She has told Jay to settle for what he can get from Terry's firm, but not to leave any money on the table.
NOTE: This exercise is analytically similar to the exercise Parker-Gibson in a different setting.
The exercise works best as a one on one exercise. Preparation should take 10-15 minutes and negotiation can take 10-30 minutes. Review and debriefing can last from 30-75 minutes.
- Confidential Instructions for the Agent, Jay McIntyre
- Confidential Instructions for the Publisher, Terry Holtz
- This exercise is an excellent vehicle for comparing principled negotiation and positional bargaining. Depending on the skill of the other negotiator, both approaches can do well. Both parties should be risk averse, however, and wary of an adversarial approach that might get out of hand.
- The knowledge that one's BATNA is weak often leads people to negotiate much less vigorously than they otherwise would. Is this ever justified? If so, under what conditions? The case affords a good opportunity to point out that any such analysis should be based on a consideration of the parties' relative BATNA's.
- Since the case does have a strong competitive element, there is ample opportunity to explore techniques for indirectly and directly extracting information from the other side. Likewise, techniques of protecting oneself from "giving up" the possibility for gains that were unforeseen can be explored and discussed.
Business; Contracts; Interpersonal
Anchoring; BATNA; Bluffing; Commitment; Confidentiality; Disclosure; Fairness; Information exchange; Meaning of "success"; Objective criteria; Offers, first; Options, generating; Precedents; Risk aversion; Trust
Camilia Pictures is a film production company dedicated to producing movies with artistic merit, strong market potential, and cutting-edge sensibilities. Seven years ago, Camilia Pictures President Raven Reynolds, then an independent producer with a small company and a big Hollywood name, and Rick Statler, CEO of family entertainment powerhouse Labrador Entertainment, agreed to a merger. Camilia would continue to produce high-quality films, but it would do so as a part of the larger Labrador empire. Though Reynolds would still run Camilia, all movies it produced would now belong to Labrador.
For its first few years under the Labrador umbrella, Camilia Pictures thrived. But for the past few years, it has struggled as Reynolds and Statler continue to battle over money. Reynolds insists that she needs more to succeed. Statler, meanwhile, is increasingly concerned about the bottom line. The dispute between these two came to a head when Reynolds used her own money to purchase Privileges and Immunities, a controversial new documentary, against Statler’s direct orders. Reynolds contends that because she used her own money to buy it and Statler is refusing to distribute it, she has the right to make her own arrangements to bring Privileges to theaters. Statler insists that the film belongs to Labrador and that he is completely within his rights to refuse distribution. Labrador’s in-house counsel has referred both parties to separate lawyers to avoid a conflict of interest.
This simulation revolves around the meeting between the lawyers for Labrador Entertainment and Camilia Pictures, but is also suitable for use by non-lawyers. At stake is not only the ownership of the new documentary, but also the future of Raven Reynolds and Camilia Pictures at Labrador Entertainment.
- 2 hours individual preparation (preferably outside of class)
- 45-60 minutes preparation by side (optional)
- 45-60 minutes negotiation
- 1-2 hours debriefing
Group Size: 2 or 4 persons (lawyers may negotiate individually or in pairs)
- General Instructions for both parties
- Confidential Instructions for Raven Reynolds’ attorney
- Confidential Instructions for Rick Statler’s attorney
- Illustrative 7-Element Preparation worksheet (to be distributed after the negotiation)
Teacher's Package includes:
- All of the above
- Teaching note
This simulation is useful for focusing on a range of negotiation issues, including:
- Use of the Seven Element framework in preparation and negotiation (particularly interests, options, and objective criteria)
- Tension between empathy and assertiveness
- Tension between creating and distributing value (and associated issues such as disclosure)
- Dispute resolution in the context of a long-term relationship
- Issue control and strategy in a multi-issue negotiation
- Agreement-drafting skills and implementation orientation
- Relationship between negotiation process and substance
- Role of attorneys / agents in negotiation
Approximately three years ago, Cape Development Corporation sold one of its thirteen adjoining lots to Charlie Davis. Although Davis had plans for the lot, it is still undeveloped. The City Council has now passed a cluster zoning ordinance which permits townhouse development if some land is permanently dedicated as open space. The 12 remaining lots, which are still owned by CDC, together with Davis' lot, make a prime location for a cluster development. Such a financial asset is appealing to both parties, and has led them to this meeting to pursue a development. Both Davis and CDC have empowered agents to represent them, giving them authority up to maximum offers.
This one-on-one negotiation can run from 30-60 minutes. Teams of two can also be used, with somewhat longer times for preparation and negotiation.
Confidential Instructions for:
- Cape Development Corp. Representative
- Charlie Davis' Representative
Attorney/Client relations; Authority; Competition v. Cooperation; Cost-benefit analysis; Financial analysis; Information exchange; Joint gains; Lawyering; Objective criteria; Offers, first; Options, generating; Pareto optimization; Quantitative analysis; Relationship; Reservation price; Risk aversion
There is tremendous opportunity for exploring creative options in this negotiation. Poorly handled, however, an adversarial deadlock can result. What techniques minimize the likelihood of that outcome?
The distributive bargaining component of the negotiation permits participants to perform cost-benefit analysis, as well as reflect on the importance of focusing on joint gains.
It is useful to explore how the participants use their reservation prices to determine opening positions and concession strategies. Is this justified? Effective?
Participants can see what role analysis of projected costs plays in achieving a Pareto-optimal outcome, and what effect it has on the decision-making process.
Jamie Jackson, the Vice President for Programming at a large software company, is meeting with Allison Shore, one of the programming managers. Allison’s team has been working on a “virtual casino” computer game. Jamie is concerned about negative internal reviews of the Casino prototype, and about the way in which Allison has been managing her programmers. Allison, on the other hand, is insulted by some recent unfriendly treatment from her colleagues and the negative reaction to Casino. She is also convinced that she is paid less than her male counterparts. Though the main objective of this meeting is to determine the fate of the Casino program, the various side issues should make the meeting interesting.
This case is particularly well-suited for use in connection with the book “Difficult Conversations,” also available through the Teaching Negotiation Resource Center.
The parties’ instructions require at least 15 minutes to read and analyze. Negotiation can take 30 minutes; review can last anywhere from 30-60 minutes.
- Those parties willing to consider the perceptions and interests of the other party as relevant can usually engage effectively in mutually beneficial joint problem solving.
- The skills involved in separating the people from the problem are especially apropos in this negotiation as emotions between formerly friendly people may run high.
- If the participants choose to try to resolve workplace environment difficulties, they must face the difficulties of ordering the behavior of those around them.
CASINO TWO – UPDATED VERSION OF CASINO
In this updated version of the original simulation, Casino Two explores the complex role that gender plays in workplace dynamics. Jamie and Allison are both employees at Digital Development, a male-dominated Silicon Valley start-up that makes profitable phone apps. Jamie is the vice president for Programming and recently promoted Allison, moving her from the kids and family app team to the gaming team. Jamie feels that Allison has not been performing well in her new position. The two are meeting to discuss her performance and then negotiate next steps. The Casino Two simulation, as compared to the original Casino, features updated technological references and a new teaching note.
BATNA; Disclosure; Issues of difference; Fairness; Interests, dovetailing; Interests, internal ordering; Objective criteria; Partisan perceptions; Power imbalance
ChemCo, Inc is a manufacturing firm located in Shelton, a small working-class town. ChemCo employs 3000 of Shelton's population of 20,000. ChemCo is currently negotiating with the State Department of Environmental Protection (DEP) to devise an acceptable strategy to monitor air emissions from its generator. If ChemCo is forced to cut jobs as a result of stringent environmental regulations, there will be a devastating impact on Shelton. On the other hand, the Agency feels that ChemCo is the primary contributor to air pollution within the area and needs to be monitored effectively. Representatives from the DEP and ChemCo must negotiate a mutually agreeable standard for monitoring air emissions.
- This exercise illustrates how negotiations can be used to resolve conflicts among scientists when scientific data are in dispute.
- When the same negotiation is conducted by multiple groups, the comparison of outcomes is instructive. The recommendations offered by each group may differ widely and in some cases there may be no agreement reached in the time allowed.
- The scientific data available in the case (and in the world) are incomplete and inconclusive on the points at issue. The exercise motivates discussion of how decisions should be made given limited information.
- The exercise provides a context in which the formation of coalitions of "joint interest" groups can dramatically affect the negotiated outcome.
This game can be run simultaneously with multiple groups of 6.
For all parties:
- Group Confidential Instructions for ChemCo representatives
- Individual Confidential Instructions for ChemCo CEO
- Individual Confidential Instructions for ChemCo Environmental Engineer
- Individual Confidential Instructions for ChemCo Public Relations manager
- Group Confidential Instructions for DEP representatives
- Individual Confidential Instructions for DEP Air Quality Chief
- Individual Confidential Instructions for DEP Environmental Engineer
- Individual Confidential Instructions for DEP Public Affairs Manager
Regulatory negotiation, agency discretion; environmental dispute resolution; science-intensive policy disputes; public relations
Dioxin: Waste to Energy Game
The Carson Extension
Clarke v. California Insurance Co., et al.
Plaintiff Elizabeth Clarke contends that she has suffered from severe ulcerative colitis for four and a half years, resulting in her total disability. Defendant insurance company paid disability benefits for two years, and then terminated payments on the ground that she was not totally disabled under the terms of her policy. The causes and effects of ulcerative colitis are debatable, and there is disagreement between the medical experts involved in the case.
Two years ago, Clarke sued the insurance company in California state court, alleging contract and tort claims and requesting claiming disability benefits and punitive damages based on alleged malicious intent. Discovery is almost over, and the judge has indicated that she would like the case to be settled out of court. Now, the lawyers for the two parties are meeting to discuss settlement.
- Both sides have very strong and very weak elements to their cases. How does the way in which these elements are handled affect the negotiation?
- A great deal of relevant criteria is available for analysis and presentation. How does the use of criteria affect the creation and distribution of value in the negotiation?
- What constitutes success in this negotiation? Avoiding trial? Making the other side apologize? Getting (or avoiding paying) a lot of money? A combination of these?
Teacher's package includes:
- Participant materials for both sides
- No teaching note available
S. Smith, of the town Riverton, has been assigned the task of overseeing the reprogramming of the town's computerized municipal operations and the training of those employees. Smith, after careful review, has selected J. Brown of Northeast Computer Services for the sizable job. The problem, however, is that Brown has offered to do the job for $20,000, somewhat below the corporate rate, and Smith, due to a restricted budget, is constrained to spending no more than $10,000. The two have agreed to one last meeting in hopes of reaching an acceptable solution.
For all parties:
All of the Above
Teaching Note (from the Tendley Contract)
PROCESS THEMES: Anchoring; BATNA; Constituents; Constraints; Fairness; Interests, dovetailing; Objective criteria; Offers, first; Options, generating; Pareto optimization; Precedents; Risk perception
The available data allow a number of more or less equally persuasive arguments about what a "fair" contract would be. This is at a minimum good practice in developing and using objective criteria. Beyond that, the case presents the more difficult challenge of finding an objective basis with which to judge the applicability of alternative objective criteria.