week 3 - planning & strategy - post class

7/23/2019 Week 3 - Planning & Strategy - Post Class

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PLANNING &

STRATEGYLeighton Wilks

HROD 493

Fall 2015



Agenda

•Individual Assignment

•Planning & Strategy

•Planning for “Coast News”

•Negotiation – “Coast News”

•Coast News



Individual Assignment

• Your task for the self-appraisal paper is toassess your personal

strengths and weaknesses as anegotiator, record keylessons from the class

material and exercises,and suggest avenuesfor improvement.

• Maximum 10 pages

• double spaced

• 12 point font

• excluding title page andreferences

• 30% of final grade

• Due Dec 8th

– 5:00 pm



Questions to Ask Yourself

1. What are your strengths as a negotiator? (be veryspecific)

2. What are your weaknesses as a negotiator? How canyou ameliorate them? (be very specific)

3. What experiences from the simulations and exerciseswere especially memorable to you? What lessons didyou learn? (here you may want to discuss some detailsof how you and your counterparts negotiated particular

exercises)



Questions to Ask Yourself

4. What lessons from lectures, readings, and/or classdiscussion had their biggest impact on you? Why?

5. What did you find particularly surprising? In what ways(if any) has this course changed the way that you thinkabout negotiation?

6. Have you seen any lessons of the course playthemselves out in either your personal or professionallife?



The Good, the Bad, and the Ugly

A good paper will:

• Provide insight into yourstrengths andweaknesses

• Utilize concepts from thecourse to explainoutcomes• Your side and your

counterpart

• Focus on the processnot the outcome

• Have references!

A bad paper will:

• Tell me how awesomeyou are

• Tell me every detail ofevery negotiation• Be a “play by play”

• Ignore all course content• Focus on the outcome of

the negotiation• I don’t care how successfulyou were, I care why youwere successful!

• Contain misteaks



How Will I be Evaluated?

• Analysis (40 pts): How well do you understandand integrate the key concepts you areexploring?

• Relevance (40 pts): How much light does yourdiscussion shed on the elements of negotiation?

• Exposition (20 pts): How clearly written andprofessionally presented is the paper?



PLANNING



Learning Objectives

• Understand that the most effective negotiationsare 80% preparation and 20% negotiation!

• Formulate appropriate goals for negotiation

purposes• Understand the basic steps of the planningprocess

• Consider some strategic choices that flow fromthe planning process



Goals

• Determining goals isthe first step in thenegotiation process

• Tangibles – money,financing, timing

• Intangibles –relationships,

reputation• Procedural - shapingthe agenda, having avoice at the table



Goals

• Negotiators shouldspecify goals andobjectives clearly

• NEGOTIATIORS WITHCLEAR GOALS DO BETTER!

• Goals are not wishesor fantasy – they are a

focused target one canrealistically achieve



Effective Goals

• Effective goals should be – concrete, specific,and measurable

• Bad goal – Negotiate a better price on a used car

• OK goal - Negotiate a price on a used car that is up to20% lower than the asking price and leaves the sellerhappy

• Good goal – Negotiate down to a price of $15,000 (20%

below asking) and leave the seller feeling that this wasthe best possible outcome that he could have achieved



Phases of Negotiation

Greenhalgh (2001)

• Phases 4-6 are what we typically consider“negotiation”

• Generally don’t pay enough attention to the otherphases

• Suggests this is how people should negotiate, nothow they actually negotiate

• Cultural differences influence this model greatly



The Planning Process

1. Defining the issues

2. Defining the bargaining mix

3. Defining interests

4. Knowing limits and alternatives5. Setting targets and openings

6. Assessing constituents and the social context

7. Analyzing the other party

8. Presenting issues to the other party9. Protocol

* How much planning (analysis) depends on the complexityof the negotiation



1. Defining the Issues

• Thus far our negotiationhas been fairly simple• Only one issue - $$$

• Future negotiations willme much more complexwith multiple issues

• Must identify all the

these issues• Your point of view & your

counterpart’s point of view!



2. Defining the Bargaining Mix

Bargaining Mix: The combination of lists from both sides

• Assemble a list of all of your issues (regarding thenegotiation)

• Determine which issues are more/less important• Rank order

• Categories (High, medium, low)

• Award points out of 100

• Identifiy what issues you can trade off for an ”easy win”

• Give concessions on issues that are not important to you!

• Introducing a long list of issues often makes success morelikely rather than less likely – provided they are all real



Collective Agreement Terms



3. Defining Interests

• Interests are differentthan issues!

• Interests are “why you

want something”• E.g. “I want to buycondo because:• interest rates are low

• I want to start buildingequity

• I want to impress myfriends



3. Defining Interests

• The best way to defineinterests is to ask“why”!

• Don’t makeassumptions aboutyour counterpartsissues

• Just because money ismost important to you,doesn’t mean it is tothem!

• The “two old ladies”story



4. Knowing Limits and Alternatives

• A good negotiator willestablish a resistancepoint and BATNA

• Sound familiar?



5. Setting Targets and Openings

• A good negotiator willset a specific targetpoint that is realistic

• Reflects goals

• How will you presentthe issues

• Single issues

• Package

• What can you tradeoff/throw away?



6. Assessing Constituents and the SocialContextWho is:

• On your team? (A)

• On the other team? (B)

• On the sidelines? (C)• Owners, supervisors

• In the stands? (D)• Shareholders, media,

competitors

• Context (E)• History, relationships,

deadlines



7. Analyzing the other party

• Analyzing other’sissues, interests,alternatives is

important!• Issues, bargaining mix

• Interests & needs

• Resistance & BATNA

• Reputation & style

• Constituents & authority

• Strategy & tactics



8. Presenting Issues to the Other Party

• Present your case clearly and provide supporting factsand arguments• Their job is to try to refute your arguments

Ask:

• What facts support my point of view?

• What data sources exist that support my view?

• Have these issues been negotiated before?• If so, what was the outcome?

• What are the other party’s interests?

• How can I present my facts so that they are mostconvincing?



9. Protocol

• What agenda should we follow?

• Where should we negotiate?

• What is the time period?

• What might be done if the negotiation fails?

• How will we keep track of what is agreed to?

* All of these can be influenced (manipulated) by

an experienced negotiator!



Summary on the Planning Process

“...planning is the most

important activity innegotiation.”



NEGOTIATION TIME!



Coast Mountain News: Background Information

• Afternoon daily newspaper of Centerville, small city onWest Coast

• Publishes six afternoons a week• In sound financial shape with good reputation

• The nearby morning competitor has had a greatercirculation for many years.• Last month, new publisher, Pat Smith acquired the Coast

News• Need to determine how a new press that was ordered by

the previous publisher will be used• Sandy Thurman, Advertising manager, and Terry

Hernandez, Executive Director, charged with determiningthe priorities



Remember:

• Do not show your role materials to yourcounterpart.• This rule applies even after the exercise is complete –

we will use the debrief to elaborate on preferences,

issues, etc.• You can tell your counterpart anything you want,but you can’t change the facts of the case.

• You can negotiate anywhere you choose, so longas you are back here at the assigned time.



Coast Mountain News

• In pairs, negotiate the case “Coast Mountain News”• negotiate for 45 minutes; if you do not come to an

agreement within this limit it will be considered animpasse

• Please come back ready to discuss at 4:00



Negotiation time

• Be back here at

• Once you are finished add the points for your individualroles and let me know.

• DO NOT SHOW YOUR POINT CHARTS TO YOURCONTERPART!

• Do not discuss your negotiation with your counterpartafter you have a deal.

• I will post your results for Coast Mountain News



Coast News Discussion

• How did this negotiation differ from BioPharm/Seltek?

• Did the planning guide help you? If so, how?

• How did you approach this negotiation (strategy)?• Did it matter that you worked for the same company?

• Did you have a BATNA, Reservation point…?

• What did Hernandez want (primary interest)?• Quality!

• What did Thurman want (primary interest)?• Revenue!

• What impact did the different interests have on thenegotiation?



Coast News Discussion

• How did you determine which of the five issueswere most important to you?

• What were the most important issues to your

counterpart?• Do these differences provide an opportunity toincrease the total value on the table?



Coast News Results

Group #Thurman(Revenue)

Hernandez(Quality)

1 820,000 97

2 767,000 83

3 780,000 98

4 847,000 77

5 760,000 113

6 820,000 827 840,000 78

8 790,000 75

9 780,000 91

10 830,000 83

11

12 760,000 109

13 770,000 7814 900,000 76

15 1,100,000 68

16 767,000 83

17 900,000 80

19

19 ND ND

20 ND ND



COAST NEWS Preferences

Issue Options Thurman Hernandez

Deadline

(1)

A. 11:00 A.M.

B. 11:40 A.M

C. 12:20 P.M.

D. 1:00 P.M.

100,000

70,000

30,000

0

0

10

20

30

Control Over Section2

(3)

A. News: FrontAdv: Back & Double Truck

B. News: Front & backAdv: Double Truck

C. News: Front, Back, Top of D.T.Adv: Bottom of D.T.

D. News: Front, Back, Double Truck

Adv: None

400,000

267,000

133,000

0

0

3

7

10

Color Photographs

(2)

A. News 0 / AD 6

B. News 1 / AD 5

C. News 2 / AD 4

D. News 3 / AD 3

E. News 4 / AD 2

F. News 5 / AD 1

G. News 6 / AD 0

200,000

170,000

140,000

110,000

80,000

50,000

0

0

6

12

18

24

28

30

Spot Color

(4)

A. Banners 0 / Ad 6

B. Banners 1 / Ad 5C. Banners 2 / Ad 4

D. Banners 3 / Ad 3

E. Banners 4 / Ad 2

F. Banners 5 / Ad 1

G. Banners 6 / Ad 0

300,000

280,000240,000

180,000

120,000

60,000

0

0

58

11

14

17

20

Advertorials

(5)

A. Look like news

B. “ADV” in fine type

C. Bold Faced “ADV” 3X

D. No Advertorials

500,000

200,000

100,000

0

0

10

20

50

1

2

3

4

5

1

2

3

4

5



The Distributive Issue (Win/Lose)


Deadline

(1)

A. 11:00 A.M.

B. 11:40 A.M

C. 12:20 P.M.

D. 1:00 P.M.

100,000

70,000

30,000

0

0

10

20

30


(3)





Adv: None

400,000

267,000

133,000

0

0

3

7

10

Color Photographs

(2)

A. News 0 / AD 6

B. News 1 / AD 5

C. News 2 / AD 4

D. News 3 / AD 3

E. News 4 / AD 2

F. News 5 / AD 1

G. News 6 / AD 0

200,000

170,000

140,000

110,000

80,000

50,000

0

0

6

12

18

24

28

30

Spot Color

(4)

A. Banners 0 / Ad 6


D. Banners 3 / Ad 3

E. Banners 4 / Ad 2

F. Banners 5 / Ad 1

G. Banners 6 / Ad 0

300,000

280,000240,000

180,000

120,000

60,000

0

0

58

11

14

17

20

Advertorials

(5)

A. Look like news



D. No Advertorials

500,000

200,000

100,000

0

0

10

20

50

1

2

3

4

5

1

2

3

4

5



Can We Increase Value through Priorities?


Deadline

(1)

A. 11:00 A.M.

B. 11:40 A.M

C. 12:20 P.M.

D. 1:00 P.M.

100,000

70,000

30,000

0

0

10

20

30


(3)





Adv: None

400,000

267,000

133,000

0

0

3

7

10

Color Photographs

(2)

A. News 0 / AD 6

B. News 1 / AD 5

C. News 2 / AD 4

D. News 3 / AD 3

E. News 4 / AD 2

F. News 5 / AD 1

G. News 6 / AD 0

200,000

170,000

140,000

110,000

80,000

50,000

0

0

6

12

18

24

28

30

Spot Color

(4)

A. Banners 0 / Ad 6


D. Banners 3 / Ad 3

E. Banners 4 / Ad 2

F. Banners 5 / Ad 1

G. Banners 6 / Ad 0

300,000

280,000240,000

180,000

120,000

60,000

0

0

58

11

14

17

20

Advertorials

(5)

A. Look like news



D. No Advertorials

500,000

200,000

100,000

0

0

10

20

50

1

2

3

4

5

1

2

3

4

5





Deadline

(1)

A. 11:00 A.M.

B. 11:40 A.M

C. 12:20 P.M.

D. 1:00 P.M.

100,000

70,000

30,000

0

0

10

20

30


(3)





Adv: None

400,000

267,000

133,000

0

0

3

7

10

Color Photographs

(2)

A. News 0 / AD 6

B. News 1 / AD 5

C. News 2 / AD 4

D. News 3 / AD 3

E. News 4 / AD 2

F. News 5 / AD 1

G. News 6 / AD 0

200,000

170,000

140,000

110,000

80,000

50,000

0

0

6

12

18

24

28

30

Spot Color

(4)

A. Banners 0 / Ad 6


D. Banners 3 / Ad 3

E. Banners 4 / Ad 2

F. Banners 5 / Ad 1

G. Banners 6 / Ad 0

300,000

280,000240,000

180,000

120,000

60,000

0

0

58

11

14

17

20

Advertorials

(5)

A. Look like news



D. No Advertorials

500,000

200,000

100,000

0

0

10

20

50

1

2

3

4

5

1

2

3

4

5

200,000230,000260,000290,000320,000330,000300,000

300,000

330,000320,000290,000260,000230,000200,000



The Pareto Frontier

“An agreement is defined as pareto efficient when there is no other agreement that would

make any party better off without decreasing theoutcomes to any other party.”

“With any pareto inefficient agreement, thereexists an alternative that would benefit at leastone party without injuring any party.”

– Neale and Bazerman -



Pareto Optimality

• What is lost in a pareto sub-optimal outcome?• Value that could have been created is lost

• What opportunity does the presence of pareto optimaloutcomes represent?• Value that is created can be claimed



Where Does the Value Come From?

• Issues that can be traded off (logrolling) due todifferences in:• Priorities

• The Assessments of the Probability of Future Events

• Risk Preferences

• Time Preferences

• e.g., Deadlines & Control over Section 2

• e.g., Color photographs & Spot Color



Group # Thurman (Revenue) Hernandez (Quality) Hernandez (x10K) Total "Value"

1 820,000 97 970,000 1,790,000

2 767,000 83 830,000 1,597,000

3 780,000 98 980,000 1,760,000

4 847,000 77 770,000 1,617,000

5 760,000 113 1,130,000 1,890,000

6 820,000 82 820,000 1,640,000

7 840,000 78 780,000 1,620,000

8 790,000 75 750,000 1,540,000

9 780,000 91 910,000 1,690,000

10 830,000 83 830,000 1,660,000

11 0 0

12 760,000 109 1,090,000 1,850,000

13 770,000 78 780,000 1,550,000

14 900,000 76 760,000 1,660,000

15 1,100,000 68 680,000 1,780,000

16 767,000 83 830,000 1,597,000

17 900,000 80 800,000 1,700,000

19 0 0

19 ND ND #VALUE! #VALUE!

20 ND ND #VALUE! #VALUE!PO 760,000 109 1,090,000 1,850,000

PO 1,010,000 75 750,000 1,760,000

PO 1,230,000 63 630,000 1,860,000

PO 730,000 113 1,130,000 1,860,000

22 = 1D, 2B, 3A, 4B, 5D

23= 1D, 2F, 3A, 4F, 5A

24= 1D, 2F, 3A, 4B, 5A

25= 1D, 2F, 3A, 4B, 5D





Deadline

(1)

A. 11:00 A.M.

B. 11:40 A.M

C. 12:20 P.M.

D. 1:00 P.M.

100,000

70,000

30,000

0

0

10

20

30


(3)





Adv: None

400,000

267,000

133,000

0

0

3

7

10

Color Photographs

(2)

A. News 0 / AD 6

B. News 1 / AD 5

C. News 2 / AD 4

D. News 3 / AD 3

E. News 4 / AD 2

F. News 5 / AD 1

G. News 6 / AD 0

200,000

170,000

140,000

110,000

80,000

50,000

0

0

6

12

18

24

28

30

Spot Color

(4)

A. Banners 0 / Ad 6


D. Banners 3 / Ad 3

E. Banners 4 / Ad 2

F. Banners 5 / Ad 1

G. Banners 6 / Ad 0

300,000

280,000240,000

180,000

120,000

60,000

0

0

58

11

14

17

20

Advertorials

(5)

A. Look like news



D. No Advertorials

500,000

200,000

100,000

0

0

10

20

50

1

2

3

4

5

1

2

3

4

5

200,000230,000260,000290,000320,000330,000300,000

300,000

330,000320,000290,000260,000230,000200,000



Types of Issues in Negotiation

1. Distributive (win/lose)• Claiming value

• E.g. Advertorials

2.Integrative (win/win)• Value is created (more pie)

• Must claim the value that is created

3. Compatible

• Both negotiators want the same thing• Often distributive because of hardball tactics

• BioPharm1. Time – both wanted the deal ASAP

2. Work force – both wanted to keep the current workforce



QUESTIONS?

week 3 - planning & strategy - post class

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