67 Fish Pond Lane

SCENARIO:

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.

MECHANICS:

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.

TEACHING MATERIALS:

For all parties:

  • Map

 

Role specific:
Confidential Instructions for:

  • Buyer(s)
  • Seller(s)

 

Teacher’s Package:

  • All of the above
  • Teaching note

 

MAJOR LESSONS:

  • 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.

 

PROCESS THEMES:

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

Aerospace Investment

OVERVIEW:

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:

MATERIALS:

Participant materials include:

  • General Instructions for both parties

 

Confidential materials for Venture Capitalist, including:

  • Confidential Instructions
  • Confidential score sheet
  • Process evaluation of the Founder

 

Confidential materials for the Founder of Earth Escape, including:

  • Confidential instructions
  • Confidential score sheet
  • Process evaluation of the Venture Capitalist

 

Teacher's Package includes:

  • All of the above
  • Teaching Note
  • Results and Analysis by Professor Gordon Kaufman from his 2010 course

An Actual Small Claims Mediation

SCENARIO:

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.

 

MECHANICS:

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.

 

SIMILAR SIMULATIONS:

 

Ancolet Corp. v. Elson Realty Trust

SCENARIO:

Ancolet Corporation is a small manufacturing company. They rent space from Elson Realty Trust. Recently, Ancolet needed to re-configure their space in order to make room for new equipment. They made a deal with Elson, and Elson employees began construction. Many problems ensued. Ancolet put its rent payments in an escrow account for the last several months in protest. They are now suing Elson for lost revenue due to the damage done to their machines and the business lost during the construction. Elson counter-sued for the rent due. The judge wants the case settled before it comes to trial. Now the lawyers and their clients are meeting to discuss settlement.

 

TEACHING MATERIALS:

For all parties:

  • General Instructions
  • Statement of Damages

 

Role specific:

  • Elson (and counsel)
  • Ancolet (and counsel)

 

Teacher's package:

  • All of the above

 

MAJOR LESSONS:

  • The potential tension between preserving a good working relationship and pressing hard for what might be seen as substantive concessions is a central concern.
  • One side is specifically told that they are tough negotiators. It is interesting to see how that affects their style during the actual negotiation.
  • There is an enormous gap between how much money Ancolet wants to receive and how much Elson is willing to pay. A lot of creativity is required in order to settle this case.
  • There is a very small zone of agreement.

 

SIMILAR SIMULATIONS:

 

Appleton vs. Baker

SCENARIO:

The Appletons and Bakers own homes on adjacent parcels of land. The Appletons are selling their house, and they also want to sell the half-lot which rests between their home and the Bakers'. The purchasers of their home are not interested in buying the lot. The Bakers are interested in the lot. There is a large bargaining zone ($5,000 to 20,000), but neither party knows of the other party's interests.

Note: After debriefing, it is an option to have a five-minute re-negotiation once everyone knows the actual constraints placed on the other party.

 

TEACHING MATERIALS:

Role specific:

  • Appleton
  • Baker

 

Teacher's package:

  • English version: Copies of both participant roles plus teaching notes
  • Non-English versions: Copies of both participant roles only

 

MAJOR LESSONS:

  • When several pairs negotiate simultaneously, the sale prices vary dramatically, which provides for a good discussion of the results of different strategies.
  • The advantages and disadvantages of making the first offer can be explored, as well as techniques for doing so.
  • Advantages and disadvantages of disclosure are also illustrated.

 

SIMILAR SIMULATIONS:

 

Bakra Beverage

NEW – ALL-IN-ONE CURRICULUM PACKAGE 

If you are new to teaching negotiation or are looking to go in-depth on the fundamental negotiation concepts, the Bakra Beverage All-In-One Curriculum Package will provide you with everything you need to teach negotiation.

The All-In-One Curriculum Package makes it easy to teach negotiation, track learning outcomes, and includes materials for the instructor as well as for students.

Materials include: 

  • Instructor’s Guide – Guide for instructors on negotiation concepts, simulation logistics, and debriefing simulation participants.
  • Instructor Background Reading List – List of background readings for instructors to complete before using the simulation to gain a better understanding of the negotiation concepts.
  • Student Background Reading List – List of background readings for students to complete before the simulation to gain understanding of the negotiation concepts.
  • Confidential Role Instructions – Confidential role-specific materials for participants in the exercise.
  • Pre-Negotiation Surveys – After completing the background reading and/or presentation of the negotiation concepts, participants complete the online Pre-Negotiation Survey to benchmark their understanding of the key learning points the game is intended to teach.
  • Agreement Outcome Form – Participants reporting the results of any agreements reached in the simulation.
  • Post-Negotiation Survey – After finishing the simulation, but before the debrief, participants fill out the Post-Negotiation Survey so Instructors can gauge participants understanding of the issues and concepts.
  • Class PowerPoint Presentation – The first part of the PowerPoint slide deck is for the instructor to use to introduce negotiation concepts, how to participate in a negotiation simulation, and Bakra Beverage. The second part is for the instructor to use in debriefing the simulation with participants.
  • Feedback Survey – At the conclusion of the exercise, participants can give feedback on the process and outcomes.

The Bakra Beverage All-In-One Curriculum Package requires a minimum of 90 minutes of class time, but is best run in a two and half or three-hour class. To order this package, you must purchase a minimum of ten copies. A separate copy must be purchased for every participant in the exercise. The materials are all single use and must be re-purchased for subsequent uses.

SCENARIO:

Structurally almost identical to the Sally Soprano role simulation, Bakra Beverage is a two-party, nonscorable negotiation between a beverage manufacturer and a soft drink distributor over the terms of a potential distribution contract.

BebsiCo is a multi-billion-dollar, multinational soft drink manufacturer interested in expanding its operations into the Middle Eastern country of Kumar. The distributor that was supposed to handle BebsiCo’s new distribution campaign, Kabir Cola, decided suddenly last week to close its Kumari operations and focus on other Middle Eastern countries. BebsiCo is eager to sign a new distribution contract with the Kumar-based Bakra Beverage, a financially troubled but reputable soft drink distributor. Indeed, BebsiCo headquarters has authorized its Director of Middle East Operations to offer Bakra up to $6.75 million per year for the contract, though BebsiCo would like that figure to be lower if possible.

Bakra desperately wants this contract, which would put it back on the map, attract additional clients, and give the company the confidence and certainty about its future that it has been waiting for to purchase Jayyid Juices (a juice and specialty beverage distributor). The contract is so important that Bakra would almost be willing to distribute for BebsiCo for free, except for the impact on future agreements and reputation.

In addition to the wide zone of possible agreement regarding the distribution fee, the simulation includes a range of possible criteria for determining the fee as well as numerous possibilities for value-creating options. Teaching points include the value of focusing on interests to create mutually beneficial options, the power of objective criteria, the effect of both parties’ BATNAs on the negotiation dynamic, and the importance of balancing both process and substance interests when a long-term relationship is at stake.

This simulation may be used as an alternative to Sally Soprano if a more corporate or international context is desired.

 

Participant materials include:

  • Confidential instructions for Bakra Beverage’s Sales Director
  • Confidential instructions for BebsiCo’s Director of Middle East Operations

 

Teacher’s package includes:

  • All of the above
  • Teaching note

 

ENHANCED VERSION AVAILABLE:

A digitally enhanced version of this simulation is available through the iDecisionGames platform and includes the following features:

  • An Instructor’s Guide summarizing the negotiation concepts covered in the simulation, a quick review of simulation logistics, and a ready-to-use set of debriefing slides;
  • Highlights from background readings that will help both students and instructors gain a better understanding of negotiation concepts and methods covered in the simulation;
  • Pre- and post-simulation questionnaires instructors can use gauge each student’s grasp of the core concepts before and after participating in the simulation;
  • PowerPoint slides that introduce key concepts before the simulation and highlight lessons for debriefing;
  • Real time, interactive, data analytics provided via the iDecisionGames platform.

To order the Bakra Enhanced Package click here.

Bog Berries, Inc. v. the Federal Environmental Agency

SCENARIO:

Bog Berries Inc. (Bog Berries), a large and successful cranberry products firm, has been accused of intentionally dumping toxins into sewers and waterways near its plant. The Federal Environmental Agency (FEA) filed felony charges under revisions of the Clean Water Act. An uneasy settlement deal was reached between Bog Berries and the FEA, but both parties have suffered considerable public relations damage and feelings are raw. Representatives from both sides must now negotiate the detailed stipulations of a new agreement that will allow Bog Berries to continue operation while meeting FEA requirements.

 

MAJOR LESSONS:

  • When the game is played by several groups at the same time, the comparison of outcomes is instructive. Typically, some groups will reach agreement and some will not.
  • Even though the parties are likely to settle, the agreements they reach are typically far from optimal. Pareto-optimal scores can be displayed in this game. The players can then explore how and why superior agreements were not found. The concept of the Pareto frontier can be examined.
  • The range of possible agreements is wide; by comparing agreements, the usefulness of generating multiple options should emerge.
  • The design of the meeting and decisions as to pre-meeting caucus, intra-party discussions, seating plans etc. should be created by the parties.

 

TEACHING MATERIALS:

For all parties:

  • General Instructions

 

Role Specific: Confidential Instructions for

  • Bog Berries CEO
  • Bog Berries Public Relations Officer
  • Bog Berries Attorney
  • FEA Head Negotiator
  • FEA Head Scientist

 

Teacher's Package:

  • All of the above
  • No teaching note currently available

 

KEYWORDS/ THEMES:

Negotiating compliance; environmental dispute resolution; regulatory negotiation; science-intensive policy dispute; inside-outside tensions; public relations; caucusing

 

SIMILAR SIMULATIONS:

Carson Extension

DirtyStuff

Dioxin: Waste to Energy Game

Rad Waste I

Book Contract, The

SCENARIO:

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.

 

MECHANICS:

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.

 

TEACHING MATERIALS:

Role specific:

  • Confidential Instructions for the Agent, Jay McIntyre
  • Confidential Instructions for the Publisher, Terry Holtz

 

Teacher's Package:

  • All of the above

 

MAJOR LESSONS:

  • 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.

 

SIMILAR SIMULATIONS:

  • GE International
  • A Salary Negotiation
  • Sally Soprano
  • San Morgan Contract
  • Tendley Contract

 

SUBJECT:

Business; Contracts; Interpersonal

 

PROCESS THEMES:

Anchoring; BATNA; Bluffing; Commitment; Confidentiality; Disclosure; Fairness; Information exchange; Meaning of "success"; Objective criteria; Offers, first; Options, generating; Precedents; Risk aversion; Trust

Bradford Development

SCENARIO:

Bradford, an old New England industrial city, is experiencing an economic boom. The city has recently adopted a ‘linkage agreement’ policy, requiring developers to make once-off payments to the city to offset infrastructure and housing costs. Curry Corporation (‘Curry’) is the first developer to propose a major project under the new administration. After meeting with all the appropriate municipal agencies and citizen groups, the only major issue left unresolved in the proposed project is the appropriate size of the linkage payment that Curry should make to the city.

 

MAJOR LESSONS:

  • Pre-negotiation analysis should include a realistic appraisal of one's BATNA. This provides a reference point against which proposed offers can be evaluated. It is important for each party to assess not only its own BATNA, but also that of the other party. This can also be done in the course of the negotiation itself by trying to elicit information from the other party about its alternatives.
  • Distributive bargaining divides up a fixed pie, and is therefore inherently constant-sum. One party's gain is another party's loss.
  • Each party should explore the interests of the other side before making an offer. Making an offer before exploring the other side's interests could anchor the bidding too high or too low, thereby minimizing one's own potential gains.
  • When the negotiating parties are involved in an ongoing relationship, it is rarely (if ever) prudent to lie or misrepresent one's interests.

 

ADDITIONAL NOTES:

This game can be played with multiple and simultaneous groups of four.

 

TEACHING MATERIALS:

For all Parties:

  • General Instructions

 

Role Specific:

  • Confidential Instructions for Municipal Negotiation Specialists
  • Confidential Instructions for Curry Representatives

 

Additional Teaching notes:

  • Detailed notes including:
  • FAQ by parties about their instructions
  • Debriefing guidelines for the instructor
  • Discussions about the use of one's BATNA
  • Comments about the distributive bargaining process
  • Comments about lying and misrepresentation
  • Summary of lessons
  • Exam Questions

 

KEYWORDS:

BATNA; Bluffing; Credibility; Ethics; Integrative bargaining; Legitimacy; Linkage; Misrepresentation; Real estate development

 

SIMILAR SIMULATIONS:

Negotiated Development in Redstone

Bullard Houses

SCENARIO:

Downtown Realty, Inc. owns the historic Bullard Houses, a set of 51 attached brownstones in the city of Gotham. The Houses, occupied for decades by the city's wealthy elite, have fallen into disrepair and are currently occupied only by a few low-income families. Downtown Realty has been prevented from demolishing the Houses by the Gothic Landmark Commission. Consequently, Downtown is eager to sell the property, and has several offers on the table. One offer proposes to convert the Houses into apartments, another into townhouses, and a third into a sophisticated marketplace. Downtown has not yet seen the offer of a fourth developer, Absentia, Ltd. Absentia is unfamiliar with Downtown's other offers, but is confident that its offer will be appealing, although it is unwilling to reveal its exact plans. Each of the four offers presents a quite different financial package, each of which must be evaluated by Downtown in terms of present value. Both sides must take into consideration financial needs, tax implications, personal interests, and future dealings with the city Zoning Board. The negotiation involves attorneys representing Downtown Realty and Absentia, Ltd.

You can see students practicing the Bullard Houses negotiation game in this free video:

Bullard Houses was also used in a recent study at the University of California, Berkeley on the role gender plays in negotiation. The study focused specifically on whether the stereotype of women being more easily misled than men, was actually true. You can read more about the study and it's findings here.

MECHANICS:

This case is essentially a one-on-one negotiation, but can be run effectively using teams of two. Individual preparation takes several hours, and involves extensive, but simple, present value calculations. Playing time can run from 40 minutes to one hour. Debriefing time should not be less than 30 minutes; substantially more is possible, up to 90 minutes.

 

TEACHING MATERIALS:

For all parties:

  • General Instructions

 

Role specific:

Confidential instructions for:

  • Seller
  • Buyer

 

Teacher's Package:

  • All of the above
  • Teaching Note

 

PROCESS THEMES:

Attorney/Client relations; BATNA; Confidentiality; Information exchange; Lawyering; Message analysis; Misrepresentation; Objective criteria; Political constraints, dealing with; Preparation; Quantitative analysis; Undisclosed principles

 

MAJOR LESSONS:

One of the main issues in this case is whether to settle at all. The complexity of information exchange may impede settlement in a single negotiation session. This situation brings up the general point that the best outcome of a negotiation sometimes is not to reach an agreement.

Several interesting questions of confidentiality are raised here, since the sellers have promised one of the developers not to reveal information about their offer, and the buyer's agent is under strict orders not to discuss his principal's plans. Under what circumstances, if any, can the attorney reveal information, and what other ways are there to avoid suspicion?

This case requires careful analysis of the available information both before and during the negotiation. Beforehand, negotiators should work through a variety of simplified, but reasonably realistic financial structures (bonds, mortgages, loans, etc.) to make a judgment about the relative worth of the various offers and possible alternatives. During the negotiations, while much information cannot be revealed, what can has important, probably unforeseen, but not obvious implications for the other side.

 

ENHANCED VERSION AVAILABLE:

A digitally enhanced version of this simulation is available through the iDecisionGames platform and includes the following features:

  • An Instructor’s Guide summarizing the negotiation concepts covered in the simulation, a quick review of simulation logistics, and a ready-to-use set of debriefing slides;
  • Highlights from background readings that will help both students and instructors gain a better understanding of negotiation concepts and methods covered in the simulation;
  • Pre- and post-simulation questionnaires instructors can use gauge each student’s grasp of the core concepts before and after participating in the simulation;
  • PowerPoint slides that introduce key concepts before the simulation and highlight lessons for debriefing;
  • Real time, interactive, data analytics provided via the iDecisionGames platform.

To order the Bullard Enhanced Package click here.

Caitlin’s Challenge

Caitlin's Challenge is a short case with an accompanying video written and produced by Deborah Kolb. The case recounts Caitlin Elliot's history with a company called Microenterprises Incorporated as the background to a negotiation she plans to have with its CEO, George Baker, about a promotion and bonus. The video shows Caitlin's negotiation discussion with George. The case and video are set within an organizational context with potential gender issues as part of the negotiating context. The case lends itself to a discussion about what makes negotiating for oneself in an organization more challenging than negotiating on behalf of others, how to prepare for a negotiation where personal issues are at stake, and what strategies work best in dealing with a difficult boss. Gender issues can be discussed at individual, interactional, and organizational levels. The video can be effectively analyzed using a moves and turns framework to structure the discussion. Caitlin's Challenge, because it is set in an organizational context, can be used in management and leadership courses as well as in negotiation and conflict classes where instructors want to help students think about and practice what to do in real time. Accompanying the teaching note and video, we include a PowerPoint exemplar to teach Caitlin's Challenge.

 

Objectives:

  • The case illustrates the complexity of negotiating for oneself in an organization where there are significant power differentials and where the issues to be negotiated are often unclear and/or contested.
  • Students are invited to consider how a person prepares herself for a negotiation that has been contentious in the past and where there is not much of a negotiating track record.
  • The video provides an opportunity for students to observe different moves and turns.
  • The case provides an opportunity to discuss gender and how it might matter in these negotiations.

 

Camp Lemonnier

Scenario:

Camp Lemonnier is a United States Naval Expeditionary Base located in the African country of Djibouti. Djibouti, bordering Somalia, Ethiopia, Eritrea, the Red Sea and the Gulf of Aden, has been home to Camp Lemonnier since the September 11, 2001 attacks prompted the United States to seek a temporary staging ground for U.S. Marines in the region. Since then, Camp Lemonnier has expanded to nearly 500 acres and a base of unparalleled importance, in part because it is one of the busiest Predator drone bases outside of the Afghan warzone. Camp Lemonnier is home to the Combined Joint Task Force―Horn of Africa of the U.S. Africa Command (AFRICOM)—and is the only permanent U.S. military base in Africa.

Tensions between the two usually friendly nations took a turn after the crash of a U.S. Predator drone in the capital city of Djibouti. The United States Defense Attaché and the Djiboutian Deputy Minister of Foreign Affairs are meeting to renegotiate the terms of the lease contract for Camp Lemonnier. The negotiation will include the following issues: contract length, total lease payments per year, potential for renegotiation, economic development aid, and support for the local population, including staffing at the base.

Major lessons of this simulation include:

  • Defining BATNA: knowing your own BATNA will help you not accept a deal that is suboptimal to your likely walk-away alternative.
  • Understanding the Zone of Possible Agreement (ZOPA): By estimating the ZOPA prior to a negotiation you can avoid taking a deal that is worse for you than your next best (realistic) alternative.
  • The impact of culture in negotiation.
  • Process management and agenda setting.
  • Uncovering interests: integrative bargaining, or “mutual gain” negotiation, focuses on the idea that through careful preparation a negotiation outcome can be favorable for both sides.
  • Principal-agent dynamics.
  • Uncovering sources of power in negotiation.

This exercise is based on the real 2014 negotiations between the United States of America and the Republic of Djibouti. The Camp Lemonnier Case Study, which details the real-life negotiation, is available for purchase separately, and can be used either with this simulation or on its own.

Materials: 

  • General Instructions for all parties
  • Confidential Instructions for Djiboutian Deputy Minister of Foreign Affairs
  • Confidential Instructions for United States Defense Attaché
  • Results Form
  • Teaching Notes

Camp Lemonnier Case Study

Scenario:

In the spring of 2014, representatives from the United States of America and the Republic of Djibouti were in the midst of renegotiations over Camp Lemonnier, the only permanent U.S. base on the continent of Africa. Djibouti, bordering Somalia, Ethiopia, Eritrea, the Red Sea and the Gulf of Aden, has been home to Camp Lemonnier since the September 11, 2001 attacks prompted the United States to seek a temporary staging ground for U.S. Marines in the region. Since then, Camp Lemonnier has expanded to nearly 500 acres and a base of unparalleled importance, in part because it is one of the busiest Predator drone bases outside of the Afghan warzone.

The U.S. is not alone in recognizing the strategic importance of Djibouti. France and Japan have well-established military presences and launch operations from the Djibouti-Ambouli International airport, as well. As of spring 2014, Russia was also reportedly vying for a similar land lease in the country.

Tensions between the United States and Djibouti have flared in recent years, due in large part to a string of collisions and close calls because of Djiboutian air-traffic controllers’ job performance at the airport. Americans have complained about the training of air-traffic controllers at the commercial airport. Additionally, labor disputes have arisen at the base where the United States is one of the largest non-government employers within the country.

Major lessons of this case study include:

  • Defining BATNA: what is each party’s BATNA?
  • Understanding the Zone of Possible Agreement (ZOPA): what is the ZOPA in this case?
  • The impact of culture in negotiation.
  • Uncovering interests.
  • Principal-agent dynamics.
  • Uncovering sources of power in negotiation.

This case can be paired with the Camp Lemonnier Simulation, available for purchase separately from the Teaching Negotiation Resource Center (TNRC). The simulation is a two-party, multi-issue, fictionalized version of these negotiations.

Materials:

  • Case Study Part A
  • Case Study Part B
  • Teaching Notes

Canada-China Panda Acquisition Negotiation

SCENARIO:  

In 2010, after years of communication with the Chinese Association of Zoological Gardens (CAZG) concerning a loan of giant pandas, Toronto Zoo officials see a “ripe moment” to intensify their efforts and undertake formal negotiations.  They designate a Chinese-Canadian spokesman and discuss partnering with Calgary Zoo.  The Canadians face serious challenges, however.  Giant pandas are an endangered species native only to one country: China.  Moreover as “star attractions,” they are in demand by zoos all over the world.  Political and economic factors within and between the two countries complicate the situation.

 

MECHANICS:

The two teams will meet separately for an hour to discuss their objectives and strategies.  The Canadian teams face the challenge of developing an internal alignment.  Then the two teams will meet and negotiate for one hour.  All negotiators stand to benefit from agreement but each has limits on how far he or she can accommodate the others.

 

TEACHING MATERIALS:

For all parties:

  • No separate general or “public” information (it is incorporated in confidential instructions)

Role Specific:

Confidential Instructions for:

  • John Smith, CEO of Toronto Zoo
  • Dr. Ming-Tat Li, Chair of Giant Panda Acquisition Task Force, TorontoZoo Board of Management
  • Dr. Clement Dupont, President and CEO of Calgary Zoo
  • WANG Zhongping (family name appears first), Vice-President and Secretary General of the Chinese Association of Zoological Gardens (CAZG)
  • MA Zhong, Deputy Secretary General of CAZG
  • WU Hong, CAZG staff

Teacher’s Package:

  • All of the above (51 pages)

MAJOR LESSONS:

  • To achieve a satisfactory agreement from a low-power position, a negotiator must focus on parties’ interests and resources, and generate creative (non-standard) proposals.
  • Identify and resolve internal differences before commencing external negotiations so that the negotiation team can act cohesively.  Internal cooperation is especially important when the team experiences pressure in external negotiations.
  • Call a caucus as needed during external negotiations in order to manage the team and/or the negotiation process.
  • Among the different negotiation roles that team members may assume, an intermediary (process orchestrator) must have a special set of attributes and skills.  Some of these may be innate or assigned; others must be earned on the scene.
  • To make progress in complex negotiations (many issues of various types), negotiators must clearly and explicitly set forth an agenda of items for discussion.  How, and when, they are discussed should be deliberate and strategic.
  • Negotiators should move back and forth between discussions of the “big picture” and the hammering out of details.  Too much of one or the other bogs down proceedings and leads to suboptimal outcomes.
  • When parties’ positions on one issue indicate no zone of possible agreement, additional issues and package deals should be considered.
  • Negotiators must strategically choose to reveal or withhold information.  Too much or too little information, at the wrong time, can drastically affect the attainment of their individual goals.

PROCESS THEMES:

Bargaining power, coordination of internal and external negotiations, agenda-setting, intermediaries (tactics, effects), information management, interests, aspirations, value creation

Colortek Job

SCENARIO:

J.B. Daniels is the Vice President of Health, Safety and Environmental Affairs at Colortek, a large manufacturer of film and photographic equipment located in the Northwest. In the four years that J.B. Daniels has been with Colortek, he/she has done much to increase the environmental awareness at the company. Recently, Daniels' second-in-command got the ball rolling on a "Green Marketing" campaign but has since left Colortek. Daniels has a strong interest in filling this position as soon as possible so that his/her department does not lose control of the "Green Marketing" project. Chris Dawson, a former Assistant Press Secretary to the Governor, has interviewed with J.B. Daniels twice thus far and has easily been the strongest candidate for the job. Dawson, however, is due to start business school in eight months. Daniels and Dawson are about to meet for the third time to discuss the final details of the position and money. There is a lot of overlap in terms of salary.

 

MECHANICS:

This is a one-on-one exercise. Participants should be given 15-30 to prepare and 30 minutes to negotiate. Debriefing should take at least 30 minutes, 60-90 minutes is sufficient.

 

MAJOR LESSONS:

  • 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 analyses should be based on a consideration of the parties' relative BATNA's.
  • The available data allow a number of more or less equally persuasive arguments about what a "fair" salary would be. This is at a minimum good practice in developing and using objective criteria. Beyond that, the exercise presents the more difficult challenge of finding an objective basis with which to judge the applicability of alternative objective criteria.

 

TEACHING MATERIALS:

For all parties:

  • Creative Options Sheet

 

Role Specific:

Confidential Instructions for:

  • J.B. Daniels
  • Chris Dawson

 

Teacher's Package:

  • All of the above

 

PROCESS THEMES:

Anchoring; BATNA; Communication; Creativity; Fairness; Information exchange; Joint gains; Offers, first; Options, generating; Relationship

Development Negotiations in the Project Review Process

SCENARIO:

A developer and city planner are about to begin negotiations concerning a proposed development in Riverdale City. The design of this residential project is based on a previous development that Jones, the developer built. Cole, the city planner, opts for changes in the design, in addition to adding affordable housing units. Another issue which the parties must address is the amount of help that Cole will give to the project. Both the planner and developer are highly concerned about the time element involved. Jones feels that the proposed plan will upgrade the neighborhood, while Cole argues that some definite changes must be made so that the development is suitable for neighborhood. Following the negotiations, Cole will submit a report containing recommendations to the Board of Zoning Appeals.

 

MECHANICS:

This exercise was created for two players. The scoring system is designed on a maximum, moderate, and minimum scale. The players need approximately 20 minutes to prepare for the negotiation which can run from 60 to 90 minutes. Post negotiation discussions take about 45 minutes. The planner can be required to submit a draft of the agreement made between the parties in the form of recommendations to the Board of Zoning Appeals.

 

MAJOR LESSONS:

  • The maximum, moderate, and minimum scale of scoring in this game enables participants to concentrate on the three main issues and create detailed discussions. Communication becomes a key element, as the parties must be clear about what they are searching for and what they will accept.
  • The parties have an opportunity to create a package that will reflect joint gains. In post negotiation discussions, participants can discuss the differences in scores by reviewing actual and possible packages, as well as negotiating styles.
  • Dealing with the dynamics of trading between issues forces students to set values on their interests and assess the importance of each issue to the other party as well.
  • The role of "face saving" and legitimacy is highlighted in the conflicting interests of both sides.
  • The possibility of achieving joint gains can stimulate tension between creating and claiming; the inferiority of compromises can also be highlighted.

 

TEACHING MATERIALS:

For all parties:

  • General Information

 

Role Specific:

Confidential Information for:

  • Jones, the Developer
  • Cole, the City Planner

 

Teacher's Package:

  • All of the above
  • Possible Scorable Outcomes

 

PROCESS THEMES:

Anchoring; Authority; BATNA; Bluffing; Closure; Commitment; Communication; Competition v. Cooperation; Compliance; Cost-benefit analysis; Decision analysis; Drafting; Interest, dovetailing; Issue control; Meaning of "success"; Message analysis; Objective criteria; Offers, first; Packaging; Precedents; Public opinion; Time constraints; Yesable propositions