Negotiation Case Study

Question:-

Write a Case Study on Negotiation

Answer:-

Negotiators making the first offer earns a psychological advantage. It is a demonstration of power and creates an image in the opponent’s mind that the negotiator is in control of the process. An effective first offer can actually put the entire control and influence in the hands of the negotiator. It sets the stage for the final offer and allows the negotiator to claim more than the zone of agreement. The negotiator can claim the higher share of the difference amount between the offer and the counter-offer. It also demonstrates the confidence of the negotiator. It puts forward the message that the negotiator is making a credible offer and that sufficient preparation has been made to strike a deal (Rainey, 2003).

One of the drawbacks of making the first offer is that gives the opponent way too much information which it can use to its advantage. In case both the parties are well prepared, it would give the opponent an insight into the probable surplus that it can leverage in the final deal. A poorly constructed first offer shows the lack of involvement and can end the negotiation even before it begins. It might hint the opponent about the negotiators anxiousness to rush to a settlement (Rainey, 2003).

Identifying ZOPA (Zone of Possible Agreement) is easy when the negotiating parties are aware of their BATNA (Best Alternative to a Negotiated Agreement) (Sebenius, 2017). Glazer’s repeated attempts to generate counter-offer from the Chinese went in vain. In face of competition with the Mitsubo-Pressure he felt compelled to reduce the prices continually in hope of generating response from the Chinese. In spite of making the first offer, he found himself lowering the price by twenty percent in one week. He was not aware of the legal parameters and was not familiar with the Chinese negotiation practices. It shows that neither did he know about his own BATNA nor did he have any idea about the opponent’s BATNA. He was not adequately prepared for the deal in a new setting. His negotiations fell prey to the

Chinese deception where they pretended to have more power and access to the better alternative when in reality they were actually evaluating and driving the offers.