Moms.com: Analysis of Integrative Negotiations

In the “Moms.com” negotiation, I played the role of a representative of an international multimedia corporation looking to perform a syndication sale of one of our top rated shows. The corporation had determined that one station in particular provided the best potential for the largest profit. It was my task to “get the best deal possible” with this station. I prepared for the negotiation by creating a spreadsheet, which allowed me to go over multiple package combinations until I found what I thought to be the best deal under the restrictions placed on me by my corporation. After negotiations began, I quickly discovered that my “best deal”, was really my best profit, and that this package would not work for the buyer. After discussing our needs & wants, we were able to work out an agreeable deal that turned out to be the best in the class. This paper covers the importance of exchanging information for integrative agreements, and provides ideas on the types of questions negotiators should ask to maximize efficiency.

Fisher and Ury (1991) say that “without communication there is no negotiation.” Communicating by willingly providing information and asking questions develops the relationship and trust between all parties. By sharing information, a negotiator encourages perspective taking and improves the quality of the agreement (class notes, 17/09/04). By gathering information, a negotiator is better able to identify where the value is (Thompson, 2004), and may see potential trades & deals that can maximize the pie (class notes, 17/09/04).

Sharing information does not mean that a negotiator must share his/her BATNA or specific costs and benefits. However, one may elect to share other information such as his/her interests and/or priorities. Providing information assists in developing a “win-win” negotiation (class notes, 17/09/04). In the “Moms.com” negotiation, I began the trust building processes by sharing the hard limits placed upon me by the corporation on the number of runs per episode and years allowed to finance the sale. By freely providing this information, after rejecting the buyer’s initial offer, I avoided discouraging or offending the buyer as a result of the rejection. Also, by not providing the actual financial costs of approaching or exceeding these limits, I avoided the issue of anchoring the deal.

By initially sharing information, I created the expectation of reciprocity, which allowed me to gather information with the expectation of receiving a truthful answer. Studies show that a skilled negotiator spends twice as much time “acquiring and clarifying information” than the average negotiator (Shell, 1999). While proposing packages and calculating the financial results, I prompted the buyer for information on what was more important to him with respect to financing terms or the number of runs per episode. Again, without providing the specific financial costs of either, the buyer told me that he prioritized the number of runs per episode over the length of financing. This information was a great help. We discovered that an integrative solution was feasible by increasing his potential profit through raising the number of runs per episode, and decreasing my potential loss by paying more money up front and shortening the finance period.

The discussion, up to this point, supports the fact that exchanging information is a necessity in developing a good negotiated agreement. Effective questioning is a crucial part to the information exchange process (Shell, 1999), and allows a negotiator to efficiently gather the data he/she needs to maximize the pie. There are 5 basic types of questions that allow a negotiator to gather information effectively.

The first type of question is the “opening gambit” (class notes, 17/09/04). This type of question is intended to help determine the “playing ground”. The type of information provided by the answer helps to determine the flexibility of the negotiator. An example of an opening gambit is, “What parts of the negotiation can you bend on?” or “Are there any concrete limits that I should be aware of?” The response given will determine how you should approach this negotiation. If the other side(s) is firm and rigid in their response, you may elect to review and/or develop your BATNA. However, if the other party responds with an answer that reflects a willingness to be flexible, then you may decide to forget about improving your BATNA and pursue a win-win deal.

Determining the facts of what is being negotiated is one of the most important reasons to ask questions. This reason leads to the second type of questioning called “fact finding” (class notes, 17/09/04). Answers to these questions provide information that clarifies the “quality and value of the to-be-negotiated issues” and increases the possibility of reaching an agreement that exceeds all parties’ BATNAs (Thompson, 2004). Examples of fact finding questions are, “Why are you looking to sell/buy?” or “What is your alternative if we fail in negotiation?” A failure to reveal key information can result in a negotiator under- or overvaluing a particular resource, which has a negative effect on negotiating a win-win agreement (Thompson, 2004).

Interest gathering is another effective type of questioning (class notes, 17/09/04). Fisher and Ury (1991) point out that interests are what motivate people, and that “they are the silent movers behind the hubbub of positions.” They go along to state that someone’s position is what they have decided on, however their interests are what caused them to decide. The types of questions used to determine interests can come down to putting one’s self in the other party’s shoes and asking, “Why?”(Fisher and Ury, 1991) For example, “Why does the buyer need longer financing?” or “Why doesn’t the other side see the benefits of my offer?” It is very important to reveal underlying interests if negotiators expect to reach win-win agreements. Establishing underlying interests can also help define the priorities of the negotiated issues, which helps in “maximizing the pie”. (Thompson, 2004)

The fourth type of questioning involves seeking solutions (class notes, 17/09/04). Solution seeking questions are a way to build trust and establish commitment to the negotiated agreement. This type of question allow you to show interest in what the other side(s) want, as well as provides them the opportunity to point out the problems they may have with your proposal. Examples of these types of questions are, “Do you have any ideas on how we can implement this solution effectively?” or “Are there any points to my proposal that you don’t like?” By allowing for feedback and criticism, a negotiator is showing the parties involved that he/she is committed to finding an agreement. The answers to these types of questions can also be a good source of information by providing you insight into their interests. Finally, by prompting for input from all parties involved, you are increasing the probability of their agreement buy in.

The fifth and final type of questioning is confirmatory (class notes, 17/09/04), or commonly referred to as active listening. Confirmatory questioning is very important when concluding negotiations. Asking these types of questions tests the understanding by all parties involved. Effective negotiators are able to use these questions to “nail down” the issues and agreements, which means fewer problems with commitment and implementation. (Shell, 1999) Some examples of this type of questioning are, “Let me make sure I understand, are you saying…?” or “In summary, you are suggesting that…?” By making sure to ask these types of questions, a negotiator is helping to ensure nothing is misunderstood about or left out of the agreement.

The exchange of information is vital to succeeding in any negotiation. The quote, “knowledge is power”, applies directly to attaining a win-win negotiated agreement. It helps to avoid thinking about a negotiation as a game or war between sides. This type of thinking will naturally discourage you from wanting to truthfully share information. Willingly exchanging information with an “opponent” or “enemy” is seen as a bad idea in war and most games. A good negotiator should approach a negotiation as if they are dealing with their “fraternal twin”. A negotiator should expect to share information that he/she would expect the other side to share. (Thompson, 2004) By sharing information, a negotiator can build trust between all parties, and create an atmosphere where the other parties feel comfortable truthfully responding to questions he/she may have. Leigh Thompson (2004) sums up the decision on information sharing nicely, by saying that it is not a decision of “whether to reveal information, but of what information to reveal”.

References

Fisher, R., & Ury, W. (1991). Getting to Yes: Negotiating Agreement Without Giving In.

Shell, G. (1999). Bargaining for Advantage: Negotiation Strategies for Reasonable People

Thompson, L. (2004). The Mind and Heart of the Negotiator, 3rd Edition.