UAW - GM Negotiations

I think that there were two key negotiation tactics that Bob White used brilliantly while negotiating on behalf of the Canadian division of the UAW. These tactics were when White sent Claude Ducharme to the Detroit meeting and when White make a villain out of John Clout.

White decided to send Ducharme in his place to the UAW meeting in Detroit. I think this action was strategic because I think White guessed that if he went, he would be pressured into an unsatisfactory agreement. By sending Ducharme, who has no power to make such decisions, White avoided these pressures. Also, Ducharme is a French-Canadian. His presence represents the division between the United States and Canada. This division is important to make because the Canadians want their own unique contract with GM. When Ducharme reported back to White, these speculations proved correct. Ducharme advised White that he has no allies among his fellow officers.

When White informed his board of what he considered to be GM’s final offer, none of the board members liked it. In order to sway for the majority vote, White needed to use a negotiation tactic with his own board. White tried to make friends with all of the board members, making kind remarks to their concerns. He reinforced that he understood their concerns but he thought that this was as good as it was going to get. He played nice with all of the board members except John Clout. Clout really went over and beyond with his disgust toward settling on the proposed agreement. In response, White was silent, listening to all of Clout’s complaints. When Clout was done speaking, White had pretended that Clout had attacked him personally. This was a great tactic because it made Clout look like a villain. Also, White was able to shout out responses and facts attacking one person, not the whole board. I think that this is when most other members on the board realized that accepting the proposal was the best decision. Bob White states, “We fought (GM) on principle, we were right, we found common ground, we got some money, let’s get back to work, let’s understand this makes sense economically and let’s talk about the future.” I think this quote displays that White is a great negotiator because he understands what it is about. He understands that it’s about finding common ground and making the negotiation integrative so that both parties are satisfied with the outcome.

Newtown Schools Dispute

This week we did the Newtown Schools Dispute and I was a board member on the West Newtown School District. Our strategy was to have a lead negotiator and have the rest of the board chime in with facts or other suggestions during the negotiation. I think that this was a really good way to go about doing this negotiation. Also, we started out talking about interests. We listed our interests so that the teachers would feel more comfortable listing theirs. 

The teachers said up front that if they didn’t like how things were going, they weren’t afraid to go on strike. In response to this, the board emphasized how we were going to try to meet their needs as best that we could, but a strike doesn’t solve anything. At the end of the strike, we would be back here negotiating just with upset parents, and a cut into the teachers’ summer. We made sure to emphasize interests and collaboration because we perceived the risk that they would go on strike to be relatively high. The negotiations started off pretty well, we were able to log-roll our most important issues with theirs. Toward the end when we got to the discussion on benefits, I think that both sides dwelled too much on the small issues. I think that the board didn’t do a good job explaining all of the things that we gave up for the teachers. So, when we got to the benefits, the teachers thought that they had taken more hits than the board. This caused the teachers to suffer from the decision making bias of framing and loss aversion. They saw the benefits as a potential for loss, so they irrationally were unwilling to incur any losses. I just felt like we kept going back and forth on the smallest unimportant issues because they weren’t willing to give much up. But in the end, I think that the negotiation had a good outcome for both parties.

When we talked about the negotiations of the other groups in class, I felt like they didn’t go as well because they didn’t start out focusing on interests. Also, the other groups seemed to make the mistake of focusing too narrowly on the issues. In a negotiation like this, the issues needed to be used to leverage other issues. Also, I think that it is a problem to start out with the small issues. This leaves limited time and energy to negotiate the most important issue. One group didn’t do so well because of this and I think that the other group got lucky.  I think it’s a better plan to start out with the big issues. When you decide on the big issues, they are not set in stone, you are still able to use the other issues to leverage the big one.

All in all, I feel good about how the negotiation went and the outcome.

Robust Routers Job Offer

The negotiation exercise this week was the Robust Routers Job Offer. It was interesting to change things up and do the negotiation as a class.

 However, I don’t think that the “Joes” put the situation into perspective. Yes, it was important to get the best deal possible, but I could not believe that the “Joes” would think about talking to a potential future boss in the manner that they did. I guess it depends on each person’s personality, but I would never repeat over and over how great I am or talk down on the opposite sex. It’s one thing to tell someone that the situation is out of your control or take the blame for something away from you, but it’s completely inappropriate to disrespect anyone, especially in a professional setting.

I think that both of the “Leighs” handled the situation very well, staying professional. Emily did a great job of sticking to her guns and not raising the salary. Also, when Dan went back and tried to renegotiate the relocation without changing the signing bonus, Emily stayed persistent and said hey we already agreed on this, we’re not changing the relocation without changing the signing bonus as well. I think that Greg did a great job of negotiating because at the end Matt didn’t get a very good deal for the “Joes” but Matt still felt like he got a good deal.

Overall I don’t think that Matt settled on a good deal for the “Joes”. He was too concerned about the department, when the change of department was guaranteed within 2 years. If I were to negotiate this case, my first priority would be the title. I would strive to get the product manager position because management levels and job titles are directly linked to the size of year-end bonuses and options. My second priority would be the salary. I would not have accepted anything below $83,000 (because of the trade off). My next priorities (in order) would be: relocation, signing bonus, stock options, start date and assignment. The relocation and signing bonus weren’t as important because they are one time collections. On the other hand, the title determines the bonus each year and the salary will be paid each year, so these are continuous collections that build up. The start date would definitely be used as leverage for a higher salary. I would even consider using the relocation or signing bonus as leverage also.

Week 4

This week we did the Bestbooks negotiation. I was the representative for Paige Turner negotiating against Luke. We started the negotiation talking about the contract signing bonus. I explained that Paige is an excellent author and signing bonuses are so common that we shouldn't even need to negotiate. He offered me $15,000 and I said that I would really like $20,000 and he accepted that. So the negotiation started off pretty well until he said that he thought a signing bonus and an advance were redundant and asked if there was any specific reason we would need both. I didn't know what to say because I didn't really know the difference between the two. Now I realize that I should have really thought about why each category was important in the deal and I should have played on the fact that Paige Turner was a best-selling author. Also, I didn't realize or take advantage of the fact that three of the categories were common interest categories. I just assumed that everything that would be beneficial to me would be disadvantageous to him. I think we ended up with less countries than we should have because he said that it would be time consuming and expensive to print the books in other languages and distribute in other countries. I think he suggested a low number so I thought that we could just meet halfway and he agreed to that. When we were done negotiating and 'signing the contract' I felt okay about the negotiation until I added all of my points and realized that I had almost 10,000 less than the points possible. All in all, for the next negotiation I will be doing a lot more planning and possibly researching information before class. Also, I will think more of interests instead of positions and realize that there might be some things in which we have a common interest.

Week 3

In class this week, I learned the distinction between distributive negotiation and integrative negotiation. I think that distributive negotiation is best when you don’t know the person and the relationship that you have won’t matter in the future. The best example of this is the used car negotiation; it is more like a compromise. Each side is only concerned about what they get out of the negotiation. On the other hand, integrative negotiation is more like a negotiation with a friend or family member. Each side is more considerate about the other and the future relationship matters. Integrative is more collaborative so that each side wins.  Another realization that I came to is that your BATNA and your reservation price are generally the same. However, this is hard to see when your BATNA is below your cost.

Week 2

On Monday we did the Knight-Excalibur exercise. I was the representative from Excalibur trying to sell the pistons for a profit and trying to get the name out there with free advertisement. My asking price was $616 including the quality control insurance program. I further explained the insurance plan and how this would be a good deal. My fellow negotiator said that he knew that we were looking to get into some government contracts and asked what I could exchange for some free advertising. I said that I could eliminate the rush fee. He then mentioned that he thought they were worth more like $500 and asked me if our pistons were worth the extra $116. I said that they certainly were! He suggested splitting the difference to $558 including the quality insurance, no rush fee, and the free advertising. We struck a deal.  Before the negotiation, I looked over the negotiation strategies in the textbook and planned to implement some. But when the time came to it, I completely forgot any of the strategies. Also, I neglected to realize that I would have 2000 pistons that would have to be sold at a loss for $100 each. If I had realized this, I would have pushed selling more pistons and avoided mentioning the quality insurance program.

On Wednesday we did the Universal Computer Company exercise. I was the Phillips plant manager trying to get the Crawley plant manager to cover some costs of fixing their faulty modules. My negotiating partner seemed to approach this problem as if we were from two different companies (I mentioned a few times that we are working for the same company, but he was only concerned about his plant). He was very competitive and argumentative, but I kept hammering what I believed right back at him. We argued about how to interpret the 95% acceptance level. I was starting to get scared that he wasn’t going to cover any of the costs and make my plant look bad. I was thinking that I had more to lose than he did because my plant has been plagued by poor quality. Eventually I asked him what he suggested we do and he said to split the cost of fixing the 12 types of faulty modules 50/50. I said that that was not logical and I said that I would agree to 75/25 if Crawley sends an employee over to Phillips to fix the faulty modules and Crawley incurs 75% of these costs. Finally we reached an agreement. Before this negotiation, I planned to write down and use two negotiating techniques (forbearance and probing) and one closing technique (alternative). However, the negotiation did not go as I planned (there was a lot more arguing back and forth) and I did not get to use any of these techniques.

Week 1

I enjoy the class exercises and find them very helpful in understanding the negotiation concepts.

The "prisoner's dilemma" exercise was very interesting. I found that after the first discussion session before round 5, all members of our group agreed to choose "Y" so that everyone can be rewarded and triple their points. However, some group members lied in the other rounds so that they could maximize their points.  I think this can be applied to real life in ethics. In business there are many opportunities when an individual can lie to gain something and cause others to lose, however it is unethical.

The used car exercise was interesting as well. Lauren and I did come to an agreement on $8,500. However, our negotiation went pretty quickly. She told me the price that she was asking for it which was $9,800. I said that there was no way that I was going to be able to pay that price and said that I could afford $6,000. I also stated that I was looking at another vehicle that is less money and would be better in the winter and so on. She then lowered to price to $9,200. I laughed and said you're still not coming low enough for me. So she asked me what is the absolute highest that I can go. This question caught be off guard. I realize that I didn't HAVE to tell the truth, but it was my first instinct. I said that my absolute highest price would be $8,500 and she said, "well that was easy, that is what I need too." After completing the negotiation, we listened to other teams negotiating. Watching other teams made me realize other things that I could have said and facts that I could have brought up.

All in all, my negotiating skills need some work.