Key Highlights Class #4 (10/7/06)

Key Highlights Class #4 (10/7/06)

Framing Encounters– Arguing Different Viewpoints (Wright Airplane Case)

We started out with two groups of three negotiating for the best price for a damaged airplane. I was in the sellers group and we had a couple key things going in our favor in selling the damaged airplane. First, we came into the negotiations from a personal standpoint with mortgage, harmonious home, etc. in mind rather than trying to make a profit on the plane. The buyers had a little more at stake coming into the negotiations in that their livelihood could depend on the deal because the buyers were embarking on a new business venture and needed to make money. Similar to the Sally Soprano Case, we ultimately devised a way to share the risk by swapping out the engine and putting in a damaged engine to sell to someone else. The buyers also had to agree to a very short time frame and well as providing services and help scrapping the plane. The concessions each side had to make seemed minimal and both sides left happy, for the most part.
Challenges in Group Negotiations
In the group negotiations, I felt uncomfortable sharing a lot of information after the buyers made an extremely low-ball offer to buy the plane. It was not up to me since we had a spokesperson (Anne) who handled most of the negotiations. I did not want to share information right off the bat because I was trying to get a good deal and by telling the opponent how much we needed to sell the plane, that would cost leverage power in the negotiations. I found that negotiating with a group is challenging. In our case, one person acted as the spokesperson.. This was effective in this case because we got the cash and the time frame worked out after the bluffing failed. The negotiation probably would not have come to an agreement had it been only one person negotiated with another.
Negotiations and Common Interests - Stay Flexible

In our case, we (the sellers) tried to bluff by asking for a very high price for the damaged plane and the buyers did not believe that the plane was worth that amount because it was not believable. They were not buying into the manner in which the value was explained to back up the offer prices and so in order to continue, we ended up throwing other things into the negotiations. For example, since the sellers owned a newspaper, we offered free marketing for their business hence turning the negotiations integrative. It was challenging to figure out what the other side needs and in this case, the buyer’s needs were dramatically different than the sellers so it was hard to find common areas of benefit besides money making the negotiations distributive. The buyer’s interests were to get their business up and running and the sellers wanted to sell the plane for personal reasons. An important lesson learned in this negotiation was to stay open and try to shift distributive negotiations to integrative. Acting stubborn or bluffing makes it more difficult to find common areas of interest. It is important to remain flexible. Upon coming to an agreement, we changed the negotiations and used unique talents on each side as a bargaining point. The buyers came up with a complicated algorithm to help sell the plane by swapping engines.

Strategies for Future Group Negotiations
I think a good strategy in group negotiations is to convince the other side that your frame is the best way and bring the others in the group on board. Although negotiating in a group can be a bit tricky, I think the trade-off is that you may have more leverage. Trusting and sharing information we were able to cull opportunities for joint gain.