Negotiation Insights

Insights on the MC negotiation activity:

Being assigned the role of the managing Director for COB, I was reluctant to be at the negotiating panel along with my other group mates. I thought about being there with them because it was mentioned in one of the readings that the people in the negotiating team must have limited authority. Being the MD, I would have unlimited authority so being in the panel was against what the reading advised already. However, some of my group mates wanted me to sit next to them on the panel so I joined them initially. However, when the San Feriano group came in, I noticed that one of them sat way in the back. I quickly deduced that he was assuming the role of the Prime Minister. Realizing this, I moved away from my group mates to sit in the back row as well.

As the first round of negotiations began, I quickly realized that the San Feriano group would be using the “Soviet” style in negotiating. They were very arrogant and simply wanted to have their way. I think my group mates may have been a little surprised with how the other group reacted. This showed as some of them were getting irritated and frustrated. This resulted in some confusion amongst our team in the first round of the negotiations. I think my group mates were prepared to negotiate with a reasonable San Feriano team, not the dictators that they had in front of them! Our group sort of panicked when the other team kept asking for our financial figures because we did not assume that they would place so much significance on them. We were prepared to argue the numbers along with the other issues but the San Feriano team insisted on focusing on the IRR and the NPV of the project. When the 2nd team called for a break so that we could “fix our figures”, I thought that they had the upper hand at that point in the negotiation.

During the break, we decided to make a stand and not to concede so much to the other team. We agreed that we would set our conditions and that we would approach the negotiations with a “these are what we can work with, take it or leave it” attitude. Personally, I think that this was the right approach because even though it was stated in our briefing materials that we badly needed the project, getting the project on terms that would cause our company to lose money was worse than not getting the project in the first place. Furthermore, I remember reading that the most effective way to handle the “Soviet” style was to draw the line and walk away if necessary. Once we decided to take a stand as a team, I thought that we had a good chance of getting more in the next round of the negotiations.

True