Negotiation preparation worksheet

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MGT 4359: Negotiation and Conflict Resolution

Negotiation Preparation Worksheet and Rubric

Overview

"People who know what they want, what they are willing to settle for and what the other side is all about stand a better chance of negotiating a more favorable deal for themselves."

Preparation is the most important activity in the negotiation process. When prepared for an upcoming negotiation, the first step is spending some time thinking about and identifying the issues and your positions and interests that will likely be addressed during the negotiation. You should look at these issues, positions, and interests from your perspective and from the other side's perspective. In Module 4, you learned about the importance of identifying your BATNA, and now in this assignment, you will also make some well-reasoned assumptions about the other side's BATNA. You should also look at ways of creating value or expanding the pie.

Using a negotiation worksheet during the preparation process will help walk you through the different elements that you expect to encounter during the negotiation process. In this assignment, you will consider a specific scenario and use the worksheet below to help you prepare for a hypothetical negotiation. This assignment is designed to help you practice the concept of preparation through the use of a worksheet.

Scenario:

Your company is replacing 30 computers for its office operations. This represents 50% of the inventory of computers for the business. The computers being replaced have sufficient capabilities to handle the current needs of the company. However, the objective in replacing the computers is to upgrade the technology in the office over the next two to three budget cycles, to prepare for an upgrade of the system-wide financial, accounting, and human resource systems. Your budget for the first 30 replacements per computer is $2,500 or a total of $75,000. You have contacted several local computer distributors to try to get the best price. ABC Office Technologies, a computer distributor company, will be coming to the office to look at the office setup and to make recommendations on the type of computer equipment they believe you may need and that they offer and sell. The ABC sales representative, in setting up the visit, said that they wanted to “earn your business.” This visit could be the first negotiation session with ABC, so you need to be prepared. To prepare, you will use a negotiation worksheet to develop your negotiation plan for this purchase.

As part of your preparations, you must review what you know about the company. ABC Office Technologies is a small computer company that specializes in computer and office products. They are a full-service company providing computer units, delivery and installation, warranty work, and financing for their installed products. The company has been in business for the last 10 years and is always looking for new business. ABC strives to provide good customer service with the hope that their existing clients will choose them for purchases of additional equipment and repeat business. ABC has a good standing with the Better Business Bureau.

Prompt:

For this assignment, follow these steps:

1. Save a copy of this worksheet so you can edit the tables below

2. Address the questions in the worksheet (you may have to make assumptions to answer some of the questions)

3. Upload a saved copy of this completed worksheet to submit your assignment

Negotiation Worksheet

A. Overall, describe what you are trying to achieve through this negotiation (What is the reason for wanting to change the status quo?):

B. What do you consider good outcomes for you?

1. Rank or prioritize your key issues or interests:

2. Identify which issues are essential and must be gained for a settlement otherwise you will accept your BATNA, and not accept the agreement:

3. Identify which are important and you would like to gain, but are willing to trade to achieve essential or other important items:

4. Identify which are desirable and have secondary value, but could be exchanged for essential or important items:

5. Identify which can be thrown or traded away. (Items that you are perfectly willing to concede, that may have value only to the other party.)

C. What will the other side consider a good outcome for them?

1. Assess the interests of the other side:

2. Rank the key issues for the other side from Essential to Throwaways:

D. Identify potential value creation opportunities by exploring the areas in the following table:

Areas of Common Ground (What interests do you share, or what areas do you have some agreement on?)

Areas for Compromise (What positions or interests are you willing to compromise on?)

Areas for Favorable Trade (What interests or positions are you willing to compromise in exchange for something the other side has or can offer?)

E. Develop arguments to support your key and important issues and against their issues you disagree with. (Use external standards and factual data).

1. Identify the industry standards for the product or service:

2. Identify the industry standards for the price of the product or service:

3. Identify other companies that have recently paid for similar products:

F. Determine your BATNA (Best Alternative To a Negotiated Agreement) and that of the other side. Always decide your BATNA before entering any negotiation. Your BATNA is your fallback position and helps you to decide to choose between walking away without an agreement or settlement. To determine your BATNA, consider that if the other party withdrew from negotiations today or you decided to walk away, what would be your alternatives and what would you be left with?

1. Make a list of your alternative and their alternatives if the negotiation ends without agreement.

Your list of alternatives:

Their list of alternatives:

1.

1.

2.

2.

3.

3.

4.

4.

2. Evaluate which of the above alternatives are the best for each side. Who has the strongest BATNA?

G. Determine your reservation value. (Your reservation value as the buyer is the highest price that you will be willing to pay for the product or service. With multiple issues aside from price, this may be difficult to determine):

H. Determine the reservation value of the seller. (The reservation value of the seller is the lowest price that the seller is willing to sell the product or service for):

I. Identify who will have the authority to make the final decision for your side. Will that person be at the table? If not, explain the process for obtaining approval to agree to a deal:

J. Identify who will have the authority to make the final decision for the other side. Will that person be at the table? If not, explain their process for obtaining approval to agree to a deal:

K. Describe everything you can about the other side, the people, culture, goals, and issues. Who are the people you will be negotiating with? What is their style? Is the company they work for known for working with other companies? Have they recently negotiated a deal with another company that you can call?

L. Identify other companies that provide the same or similar products or services if you cannot complete a deal with this company:

Guidelines for Submission: To submit this assignment, upload a saved copy of this completed worksheet.

Instructor Feedback: This activity uses an integrated rubric in Blackboard. Students can view instructor feedback in the Grade Center.

Rubric

Criteria

Complete (100%)

Needs Improvement (75%)

Incomplete(0%)

Value

Worksheet

Completed worksheet and showed a good understanding and sincere effort.

Submitted completed worksheet, but responses may be lacking in detail or clarity.

Did not submit completed worksheet.

100

Total

100%

*This negotiation worksheet is developed from content in the following book: Watkins, M. (2003). Negotiation (Harvard Business Essentials Series). Boston: Harvard Business School Press. This is also the source of the quote at the top of the worksheet.

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