Wright Plane Case

Debriefing – Wright Plane Case (7th Oct 2006)

General: What happened; what was the outcome; were you successful or not; why and why not;
We think we were successful overall. In fact, I feel the negotiation was more towards our favour. We were successful because we got a feeling that we were in a better than the other side. The other side seemed more desperate to have a deal than we were.

· who was satisfied (answer this before comparing walkaways or comparing information);
I think we were more satisfied because the negotiation went in our favour.

· did either violate his/her walkaway; if so, why?
No we did not violate our walkaway price.

· if there was a gap in walkaways, how did you bridge (or try) the gap.
There was a ZOPA so there was no gap.

· did we get near the “Pareto Frontier?” or …did we “leave money on the table”…where are we on the graph?
We did not leave money on the table. In fact, we were closer to our desired target that we had expected to be.

· was there anything that surprised you about the negotiation
I thought it was unusual the other side kept on trying to avoid a counter offer our anchor bid.

Negotiation Process: What was the process of negotiation- opening offers, sequences of offers, counteroffers, anchoring, initial offer, counteroffers? Did the other side start high/low? What effect did this have on the negotiation?
· We initiated the negotiation by first trying to intimidate them by reasoning that their plane was not worth much and that we might have to haul it away. After the initial discussions, ur strategy was to set the anchor first and set a low one. After it was apparent that they did not want to sell the engine alone, we initiated talks with a figure of $3,500 for the entire plane. They reasoned that their plane was worth $30,000 - $35,000. We then asked them if that included depreciation, but they were adamant in throwing out $30,000 as their initial offer. We then offered $4,000, however, they did not come down on their second offer and didn’t seem willing to negotiate. After some further conversations, they dropped their offer down to around $28,000. They then decided to throw the idea on the table of creating a partnership between our two parties in which we would do the repair work and pay them $22,000 and receive 50% ownership and be able to have “first dibs” on the plane when we wanted. That particular offer was not attractive to us, as we did not really need to go into partnership with them. However, after that offer, we decided on a new strategy and planned the following: our next offer was to be $5,500 to buy the plane outright, we then would make our next offer $6,500, our last strictly cash offer would be $7,000. Our first combination offer would entail, $7,000 plus the removal of the plane. We also added several options to this offer . Offer a. was to offer them a commission on work they sent to our garage and perhaps commission based structure on business they sent to our charter (Which never came up), offer b was to offer commission and have them discount Ads in their newspaper and finally offer c was the above but we would pay for the Ads. Our next two options would be to accept their offer of a partnership and then our final decision was to walk away. In the end our final offer was $9,600 including repairing their Ford explorer, we would also receive a full pg ad once a week and they would receive 20% commission on any business they sent our way as well as we would give them 20% off repairs we did on their newspaper trucks. The price also included the moving cost of the plane to our garage.


A test: was my negotiation effective? (some of these may not apply in a particular exercise)
Score yourself from 1=poor to 5=excellent
_4_ Planning and Strategy: did I have a strategy; was my walkaway right; did I estimate the other’s well?
_4_Did I establish my own priorities and potential trade-offs
_4__First approach: were we win-win, positive; try to establish rapport; did I deal with first offers effectively?
_4__How well did I develop a plan for managing the process of negotiation?
_4__Did I actively shape the agenda and manage the process to my advantage?
_4__How well did I try understand the other person:
_3__Exploring Interests: did I communicate my interests;
_4__Persuasion: How well did I persuade the other side about my legitimate needs and limits and the value of what I offered
_3__The Other's Interests did I find out the other side's real interests and constraints
_3__Creating Value (integrative or win-win) vs Claiming Value (distributive or win-lose)
_5__Options: Did we explore "expand the pie" options: did we try to find ways of meeting each party’s needs
_3__Inquiry vs. advocacy: did I ask (inquiry) a lot of questions, or just advocate my position
_5__Alternatives: Was I clear on my BATNA; was I clear about what happens if there is no agreement
___Legitimacy: was the agreement considered fair by some external benchmark
_4__Commitments: did the agreement avoid problems in the future; were any “strings left untied?”
_5__Communication: did we practice effective two way communication…did we listen…did we rephrase…
_5__Focus on the problem, not the person: did we avoid attacking or threatening the other person
_3__Relationship: did we deal well with differences; is our relationship better off now than before
_4__Psychological factors: did outside factors (eg. emotions) affect the outcome (their efforts or ours)
_3__Did we reach an outcome that maximized potential mutual gains; did we come close to the "Pareto Frontier?"
_5__Other factors: did anything else affect the negotiation-physical space, time pressure, etc.


Did we use the Techniques of Principled Negotiation: (did the other party?)…If not, what blocked it?
· listen, be warm and friendly; avoid quarreling; ask questions, ask questions, ask questions, ask clarification, rephrase
· be open to persuasion
· be principled (“You want to pay….I need …Can you think of ways that is fairer than splitting
· turn the interaction from adversarial haggling into side-b-side solving of the problem of what is fair.

For Yourself: General Conclusion: In areas where you felt you were less than totally successful, how might you be more effective next time. From this exercise, what did you learn that you are going to try to do better next time you negotiate;
I feel we could have been better coordinated as team. We were sometimes not on the same page (Could have been solved if we had more time to discuss the case together) Next time I would also look at exchanging more information.

· What were keys to the negotiation being successful or unsuccessful
The key to the negotiation being successful was that we approached it as a transaction situation and we perceived that we were in a better position so we send a message that we were in a strong position but we were ready to be flexible; we used our signaling leverage well.

· What would you do differently if you were to do this same negotiation again
I would try and be more open and ask more questions as well. I think we guarded a lot of information and that made negotiation a lot longer to complete. Next time I would therefore look at exchanging more information.

· What did you learn about yourself? About negotiations What tendencies do you have in negotiation that you need to be careful about (too aggressive, too likely to quit searching for solutions once your; What do you feel you need to work on? What would you do differently next time?
I feel that I can become condescending at times which is not good thing. I also don’t ask as many questions as I should which doe not help me to gain more insights into the other side. I would try and ask more questions and let the other side a more of the talking.

· What did you learn in general?
I learnt the importance of reading the situation correctly and how to respond to that situation in a correct manner. Additionally, I learnt how to respond and send messages out according to the position that I am in (e.g. Sending a firm message in a strong situation or flexible in a strong situation)

· If this were a real case, what obstacles to joint problem-solving might you encounter; how would you overcome them?
If this were, a real case maybe there would have been a problem with the way we went about exchanging information. Both the sides were very guarded about the information they wanted to divulge. In real life this could have let to a breakdown. We should have trusted each other more even though it was purely transactional in nature. To assist us an outside mediator could have been engaged who is known to both to overcome this suspicion between the two sides.