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

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.

Beaumont Incinerator Exercise

SCENARIO:

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.

 

MECHANICS:

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.

 

TEACHING MATERIALS:

For all parties:

  • General Instructions
  • Portia Tribune Article

 

Role Specific:

  • 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)

  • All of the above
  • Teaching Note

 

MAJOR LESSONS:

  • 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.

Bentley Convertible

SCENARIO:

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.

 

MECHANICS:

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.

 

TEACHING MATERIALS:

Role specific:

  • Soles's Representative
  • Amelia Austin's Agent

 

Teacher's package:

  • All of the above

 

MAJOR LESSONS:

  • 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.

 

SIMILAR SIMULATIONS:

 

PROCESS THEMES:

Anchoring; Authority; BATNA; Interests, quantifying; Objective criteria; Offers, first; Reservation price

Big Pipeline in Swagwit

SCENARIO:

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?

 

MAJOR LESSONS:

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
  • Set your aspirations
  • 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.

 

MECHANICS:

This negotiation may be run within 30 minutes with a 10 minute prep-time. You should allow at least 20 minutes for debriefing

 

TEACHING MATERIALS:

For all parties:

  • General Instructions

 

Role specific:

  • 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
  • Chart of possible scores

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

Bunyon Brothers

SCENARIO:

Four weeks ago, the Bunyon Brothers Construction Company began work on a 77-unit condominium complex at the end of a quiet, wooded, dead-end street named Chestnut Drive. All permits were properly, if quietly, obtained, and the quality of construction is high. Some resistance from the neighborhood was, of course, expected, but tempers now seem to be unusually high and a credible threat has developed of neighbors blocking the site access. The Company's General Counsel has scheduled a meeting with a neighborhood "negotiating committee." In preparation, he has scheduled an internal planning meeting with the Vice Presidents for Construction Management and for Marketing and Development. The exercise revolves around their three-party meeting.

NOTE: This exercise is an intra-team negotiation and is one of the two sides that makes up the exercise Chestnut Village (the other side is the exercise Chestnut Drive).

 

MECHANICS:

The Company officers should meet for 45-105 minutes. A break after 45 minutes for a presentation on intra-group process can be useful. After the completion of these preparation sessions, the groups should meet with one or more neighbor representatives (one or more of the officers at a time, however they chose in their planning session). Neighbors can be played by the instructor(s) or by other participants who have prepared as neighbors in the context of Chestnut Drive. Instructors can model various styles of negotiation. These negotiation sessions usually run about 20 minutes each. Different groups of executives and neighbors can continue by the substitution method (taking over where things left off) or by starting over.

 

TEACHING MATERIALS:

For all parties:

  • General Instructions

 

Role specific:

Confidential Instructions for the:

  • General Counsel
  • V.P. for Marketing and Development
  • V.P. for Construction Management

 

Teacher's Package:

  • All of the above

 

PROCESS THEMES:

Agenda control; Authority; BATNA; Commitment; Communica- tion; Compliance; Constituents; Currently perceived choice analysis; Education, as a means; Force; Group process; Media; Meeting design; Precedents; Preparation; Public opinion; Reality testing; Threats; Yesable propositions

 

MAJOR LESSONS:

This case focuses on two major themes. The first is preparation. What is your BATNA? What is theirs? What are their major interests likely to be? What are ours? What does their choice look like now? How, realistically, could we change it? What can they actually do? What can we do? How do we make it as easy as possible for them to do what we want, and hard for them to do otherwise? How do we best communicate all this? What yesable propositions do we have for them? Should we consult before deciding?

The second theme is meeting design and group process. How do three people work together to prepare for a negotiation? Set an agenda? Set strict time limits? Use a flipchart and a recorder? A facilitator? Separate inventing from deciding? And how do they work together in the ultimate meeting? Should they? How do they avoid divide and conquer tactics or distractions that keep them from focusing on any one point? How do they get commitment?

Another important theme is the problem of dealing with a representative of a constituency who does not have firm authority. The neighbor negotiators cannot really commit their neighbors. How should the Bunyon Brothers deal with that? Can either party really agree to what the other wants?

The case also raises the question of relationship and reputation. Both sides have important long-term interests.

Carter Estate Problem, The

SCENARIO:

James Carter, husband of Rosie Carter and father of Chris and Terry Carter, recently died after a four year battle with an undisclosed illness. Having plenty of warning, Mr. Carter (also head of the successful family cosmetic business) carefully planned for the disposition of his assets upon his death. The majority of issues surrounding the settlement of his estate have been resolved, however, a few minor issues remain unresolved and have led to dispute between his two children. The first dispute concerns Mr. Carter’s lakeside retreat. Secondarily, there are concerns over the distribution of some of Mr. Carter’s personal effects. The personal effects include: a stamp collection, a diamond ring, a pocket watch, a membership in the Metropolitan Club and the award-winning, family dog, Bonzo.

 

MAJOR LESSONS:

  • This exercise presents the opportunity to use a careful analysis of the interests of the parties to craft an agreement to solve a dispute.
  • This exercise illustrates the danger of single-issue bargaining. Should participants limit the negotiation to a monetary dispute, Chris and Terry will be locked in a contest of wills. Hard bargaining may well emerge, resulting in a situation in which one party’s gain means a corresponding loss to the other party.
  • Good negotiators put the distributive issues in this case in perspective and reduce their importance by dovetailing interests with creative options that expand the pie. This case has an enormous potential range of such creative options.

 

MECHANICS:

This exercise is best one-on-one. Allow approximately 30 minutes for preparation and 30-45 minutes for negotiation. Debriefing should last at least 30 minutes.

 

TEACHING MATERIALS:

  • For all parties:
    • General Information

     

  • Role specific:Confidential Instructions for:
    • Chris Carter
    • Terry Carter

     

  • Teacher’s Package:
    • All of the above

 

PROCESS THEMES:

BATNA; Communication; Competition v. Cooperation; Emotions; Fairness; Interest, dovetailing; Joint gains; Legitimacy; Options, generating

Chestnut Drive

SCENARIO:

Four weeks ago, Bunyon Brothers Construction Company began work on a 77-unit condominium complex at the end of a quiet, wooded, dead-end street named Chestnut Drive. The residents of Chestnut Drive were surprised and angered by this development, but, after some inquiry, concluded that there was little that could be done. Now, however, the construction process has once again brought their tempers to a boil. The neighbors' complaints include: the excessive noise from blasting, dangerously speeding trucks, the lack of a fence around the project area, foul language and habits among the construction workers, and damage to windows and at least one foundation allegedly caused by the blasting. They have elected a six-member negotiating committee consisting of a retired executive, a lawyer, a cab driver, a dentist, a small businessman, and a carpenter. The lawyer has set up a meeting of the community group with the Bunyon Brothers General Counsel. This exercise revolves around the neighbors commit- tee's preparation meeting.

NOTE: This exercise is an intra-team negotiation and is one of the two sides that makes up the exercise Chestnut Village (the other side is the exercise The Bunyon Brothers).

 

MECHANICS:

After individual preparation, groups of (roughly) six neighbors meet for about 90-105 minutes preparing to negotiate with Mr. Murphy of the Bunyon Brothers Company. A message is delivered to the lawyer 10 minutes into the session informing him that a newspaper reporter would like a statement. The group must choose whether or not to spend time on this, and if so, how much. A break after 45 minutes for a presentation on meeting design and group process is often effective. By that point, participants are familiar with the problem and interested in any insights that might be helpful in their remaining preparation time. At the end of the preparation period, groups traditionally have 20-minute negotiating sessions with Mr. Murphy or a management team from the Bunyon Brothers Company, often played by the instructor(s) demonstrating various negotiation styles. The negotiating sessions can be run serially, with one group picking up where the last left off, or consecutively, in either case with the rest of the class observing and thinking how they would proceed differently. An alternative to the instructor demonstration is to have groups of prepared neighbors negotiate with representatives of the Bunyon Brothers Company who have prepared Case No. 10004.0, The Bunyon Brothers.

 

MAJOR LESSONS:

  • This case focuses on two major themes. The first is preparation. What is your BATNA? What is theirs? What are their major interests likely to be? What are ours? What does their choice look like now? How, realistically, could we change it? What can they actually do? What can we do? How do we make it as easy as possible for them to do what we want, and hard for them to do otherwise? How do we best communicate all this? What yesable propositions do we have for them? Should we consult before deciding?
  • The second theme is meeting design and group process. How do six people work together to prepare for a negotiation? Set an agenda? Set strict time limits? Use a flipchart and a recorder? A facilitator? Separate inventing from deciding? And how do they work together in the ultimate meeting? How do they avoid divide and conquer tactics or distractions that keep them from focusing on any one point? How do they get commitment?
  • Another important theme is the problem of representing a constituency without firm authority. Can the negotiators really commit their neighbors? How should the Bunyon Brothers deal with that? Can either party really agree to what the other one wants?
  • The case also raises the question of relationship and reputation. Both sides have important long-term interests.

 

TEACHING MATERIALS:

For all parties:

  • General Instructions

 

Role Specific:

Confidential Instructions for the:

  • Cab Driver
  • Carpenter
  • Retired Executive
  • Shopkeeper
  • Dentist
  • Lawyer
  • Telephone Message to Lawyer

 

Teacher's Package:

  • All of the above
  • Draft Teaching Note

 

PROCESS THEMES:

Agenda control; Authority; BATNA; Commitment; Communication; public vs. private; Compliance; Constituents; Crisis decision- making; Currently perceived choice analysis; Delay tactics; Education, as a means; Emotions; Force; Group-think; Group process; Media; Meeting design; Preparation; Public opinion; Threats; Yesable propositions

Chestnut Village

SCENARIO:

Version A: Four weeks ago, the Bunyon Brothers Construction Company began work on a 77-unit condominium complex at the end of a quiet, wooded, dead-end street named Chestnut Drive. Residents of Chestnut Drive were surprised and angered by this development, but the construction company properly, although quietly, obtained all necessary permits. Recent developments have the neighbors fuming. Among them are noise, speeding trucks, lack of a fence around the site, foul language and habits among the construction workers, and damage to windows and at least one foundation allegedly caused by blasting. The neighbors (a retired executive, a lawyer, a cab-driver, a dentist, a shopkeeper and a carpenter) have arranged a meeting with the construction company (General counsel, a Senior VP, VP for Marketing & Development and VP of Construction Management) in an attempt to correct the situation. Each group will have a preparation meeting before an external negotiation is held.

Version B: Same as version A, except the role of cab driver is eliminated and the roles of Senior VP and General Counsel have merged into one.

NOTE: This exercise is a merger of the one-sided exercises Bunyon Brothers and Chestnut Drive and is structurally similar to the exercise Construction in Bunyonville without mediators.

 

MECHANICS:

Allow 90-105 minutes for internal negotiations. External negotiation should last 60-90 minutes. All members shall be present at the meeting but it works best if there is only one presenter for the construction company.

 

TEACHING MATERIALS:

For all parties:

  • Map

 

Role Specific:

  • General instructions for the Neighbor Representatives

 

Confidential Instructions for:

  • Cab Driver (Version A Only)
  • Carpenter
  • Dentist
  • Lawyer
  • Retired Executive
  • Shopkeeper

 

General Instructions for Construction Company

 

Confidential Instructions for:

  • General Counsel (Version A only)
  • Senior Vice President (Version A Only)
  • Senior Vice President/ General Counsel (Version B Only)
  • Vice President of Construction Management
  • Vice President of Marketing & Development

 

Teacher's Package (34 pages total):

  • All of the above
  • Teaching Note

 

PROCESS THEMES:

Agenda control; Authority; BATNA; Commitment; Communication; Compliance; Crisis decision-making; Currently perceived choice analysis; Emotions; Force; Group-think; Group process; Media; Meeting design; Preparation; Public opinion; Threats; Yesable propositions

 

MAJOR LESSONS:

This case focuses on two major themes. The first is preparation. What is your BATNA? What is theirs? What are their major interests likely to be? What are ours? What does their choice look like now? How, realistically, could we change it? What can they actually do? What can we do? How do we make it as easy as possible for them to do what we want, and hard for them to do otherwise? How do we best communicate all of this? What yesable propositions do we have for them? Should we consult before deciding?

The second theme is meeting design and group process. How do groups work together to prepare for a negotiation? Set an agenda? Set strict time limits? Use a flip-chart and a recorder? A facilitator? Separate inventing from deciding? And how do they work together in the ultimate meeting? How do they avoid divide and conquer tactics or distractions that keep them from focusing on any one point? How do they get commitment?

Another important theme is the problem of representing and dealing with a representative of a constituency without firm authority. Can the negotiators really commit their neighbors? How should the Bunyon Brothers deal with that? Can either party really agree to what the other one wants?

The case also raises questions of relationship and reputation. Both sides have important long-term interests.

Collective Bargaining at Central Division

SCENARIO:

The union and management bargaining teams for American Phone Company are preparing for upcoming negotiations. The last round of negotiations in 1986 was disastrous; there was a strike and relationships were damaged. The leadership on both sides would like things to go better this time around and has said that they want to work toward a more cooperative relationship. Trust between the two groups has eroded over the years, however, any attempts to employ a mutual gains approach here is not necessarily met with enthusiasm by their constituencies. The negotiations revolve around three issues likely to be on the table in 1989: wages, employment security and medical benefits.

 

MECHANICS:

Individuals should be given at least 30 minutes to read general and confidential material. Internal group negotiations and preparations should take 60-90 minutes. External negotiations between management and the union can take 60-90 minutes.

 

MAJOR LESSONS:

  • There are often legitimate differences within bargaining teams. These internal conflicts ought to be worked out before serious bargaining begins as unresolved internal conflict can create problems when it comes time to ratify carefully crafted draft agreements. This exercise creates the opportunity for participants to practice techniques and strategies of managing internal team conflict.
  • In most collective bargaining situations, each side begins by staking out its position. Both usually do this before they even hear what the concerns are of the other side. This often leads to the process of trading concessions which results in minimally acceptable outcomes. To achieve maximum joint gains it is necessary to focus instead on listening to the interests of the other side before staking out opening positions. The best techniques for probing interests can be studied.
  • Using statements developed during the session on probing interests, the best ways of inventing options for mutual gain and the power of creative options can be explored.
  • The significance of relationships can be studied in the context of negotiation strategies. The impact of existing and future relationships on implementation can be explored.
  • Issues of representation can be examined, since each of the players represents a group or institutional constituency. Each representative has a mandate which aids or constrains his or her ability to negotiate.
  • This game allows the players to explore the influence of threats and promises on the behavior of other parties.
  • The game raises questions of relationship, precedent and reputation. All sides have important long-term interests.

 

TEACHING MATERIALS:

For all parties:

  • General Information
  • Inventing Options for Mutual Gain — Instructions

 

For Union Members (L. Rigley, A. Jones, and M. Bemis):

  • Union Fact Sheet

 

For Management Members (K. Lewis, R. Gentry, and J. Evans):

  • Management Fact Sheet

 

Confidential Instructions for Internal Team Negotiations:

  • Union Representatives
  • M. Bemis, President of the Local
  • A. Jones, Staff Member of the International Union
  • L. Rigley, Regional Representative of the International Union

 

Management Representatives:

  • J. Evans, Manager of Large Business Services
  • R. Gentry, Head of the Benefits Department
  • K. Lewis, Division Manager of Labor Relations

 

Confidential Instructions for Identifying Interests:

Union Representatives:

  • M. Bemis, President of the Local
  • A. Jones, Staff Member of the International Union
  • L. Rigley, Regional Representative of the International Union

 

Management Representatives:

  • J. Evans, Manager of Large Business Services
  • R. Gentry, Head of the Benefits Department
  • K. Lewis, Division Manager of Labor Relations

 

Teacher's Package:

  • All of the above


PROCESS THEMES:

Agenda control; Caucusing; Competition v. Cooperation; Consensus building; Interest, dovetailing; Issue control; Joint gains; Options, generating; Packaging; Recurring negotiations

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

Consultant, The

SCENARIO:

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.

 

Teaching Materials:

For all parties:

General Information

Teacher's Package:

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

MAJOR LESSONS:

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.

Development on Bay Island

SCENARIO:

Manatee Townhomes, Inc., has proposed a residential development for a harbor island in Bay City. Before proceeding it must obtain the approval of Bay City's Department of Streets and Thoroughfares. Streets and Thoroughfares will grant approval only if Manatee agrees to pay a sum money in the form of a traffic impact exaction.

In this exercise the two groups meet to determine the amount of the exaction. Manatee wants a low exaction in order to keep its profits high; Streets and Thoroughfares wants a high exaction in order to minimize future tax levies. There is a large zone of potential agreement ($3.8 million to $10 million), but neither side knows too much about the interests of the other side. There are few, if any, opportunities for joint gains.

 

MECHANICS:

  • Divide the group into teams of one or two Manatee representatives and one or two Street and Thorough-fares representatives. Distribute the confidential instructions, and allow 20-30 minutes for reading the instructions, preparing strategies, and, if there are two-person teams, caucusing with teammates. Allow 30-45 minutes to negotiate the exaction. Debriefing should last for 30-60 minutes.
  • This case has a wide zone of potential agreement where each of the parties has reason to misunderstand the interests of the other side. In this sort of situation, the first offer is often powerful in anchoring the decision, but making a first offer that is advantageous to one's own side is difficult without securing information about the other side's true interests.
  • This case explores the advantages and disadvantages of sharing information. Since this is a one-issue case with a wide zone of agreement, gaining information about the other side is to one's advantage and revealing information about one's own side is a disadvantage.
  • This case presents the opportunity to distinguish between distributive bargaining and integrative bargaining situations, and to consider negotiation tactics that might be useful in each situations.

 

TEACHING MATERIALS:

Role Specific:

  • Confidential Instructions for:
  • Department of Street and Thoroughfares
  • Manatee Townhomes

 

Teaching Package:

  • All of the above
  • Teaching note

 

PROCESS THEMES:

Anchoring; Bluffing; Information exchange; Interest analysis; Interests, quantifying; Misrepresentation; Offers, first