Texoil Negotiation Essay.
1. Facts: Provide a brief overview of key events (How was the time allocated? Offers: opening-offer and counter-offer, as well as progression of offers? How was information exchanged? Were there pivotal turning points?) Since I’m the one who is selling the service station, so I suggest that I make the first offer. First offer I made was $1,000,000 because my target is $800,000 and also I told her the reasons why I think the station is worth that amount of money. Yulin said that’s impossible because she didn’t have so much money because she is just the representative of the oil company and she had budget.
I believed her and make a $100,000 concession. And she kept on saying she hadn’t had that much money for me. So I ask her the price she can give me. She said she can give me $450,000 at most which even was nearly 100,000 dollars lower than my reservation point. Of course I said no. Then negotiation came into a deadlock.
But the pivotal turning point came that Yulin asked me why I wanted to sell the station if it was so good. I said I need money to start my dream trip around the world.
Then Yulin asked me if I can reduce the price under the condition that she offered a job for me after I come back from the trip. I said if I didn’t collect enough money, I even cannot start my trip, not to mention the job stuff. Then another pivotal turning point came: we realized that this case had a negative bargaining zone which is different from the ones before. So we decided to give our reservation price and also see if there was something except the cash that she can give me. So she was willing to give me $450,000 cash with a $50,000 per year job after I come back. But even my reservation price minus the money that I may need after coming back without job was $488,000 which is more than $45,000. So I ask her if she can give me some extra benefits to me or give me some other money in advance because I really need this trip. So she said she can hire me as manager now and allowed me to go on my trip with pay and also she can give me the free oil gift card for my boat every month. Then we reached an agreement.
2. Tools/Concepts: What did you learn about bargaining or conflict management from this situation and how do the concepts presented in the lecture or readings enrich your understanding of the process of this negotiation, its outcome, or your own style? 1. Just like what professor said in the class, always try to expand the pie and think integratively. Usually, at the beginning of the negotiations we don’t know what type of the negotiation is. So we cannot easily think it is a fixed pie. We should open our mind and do some creative thinking to see if we can expand the pie. Here is my own example. In the negotiation, after I and Yulin offered our prices several times. We all thought what was going on? Why our prices didn’t have an intersection even we already gave our reservation prices? Based on the situation that both sides were not lying, we analyzed this was a case different from others had already discussed. So Yulin suggest she can offer me job and other benefits except the cash. We do think integratively and find a way to increase the pie to avoid impasse.
2. This point was what I learn from my partner is learning to be cooperative. When prices are offered back and force and both sides are in a very extreme mood. At this moment, a conflict is easy to happen. There must be one side to attract another side’s attention to something that is related to the price but is not exactly the price. So the atmosphere will not be so tense and the conflict can be avoided. Here is my example. In the Texoil negotiation, we offered our price back and forth. I asked her to give me that amount of cash and she said she didn’t have. Tense mood appeared and we could not keep on talking that any more. We should pay our attention to some related things but not exactly the cash. Yulin did well and she asked me why I wanted so much money. So the tense mood was released and conflict was successfully being avoided. 3. Build trust when the negotiation is integrative. During the negotiation, Yulin and I found the bargaining zone is negative and we told each other the reservation price and to see if we have other ways to avoid the impasse.
3. Mistakes: What did you do that you wish you hadn’t done? Why? In this negotiation, I did something without comprehensive consideration. At first, after I made my first offer. My partner didn’t agree with that and she said she can give me job after I come back but I must lower the price. But I refused that immediately without thinking. And we back to the cash problems and in the end. Fortunately my partner mentioned the job thing again and I consider that and think that can be my choice. After the negotiation, I thought if I can consider the advice that my partner said, maybe our negotiation can go through better and faster.
4. Insights: What did you learn about yourself from this experience? What did you learn from the behavior of others in this experience? In the negotiation, sometimes we should try to understand each other’s situation. And see if we can both reach what we want under the negative bargaining zone. Besides I should try to avoid coming into an impasse. During this negotiation, I also try the theory that I learned in the classes before: I highlight my strength of BATNA when my partner said she had not had that much money. I could not accept that price.
So I said if below my BATNA price, I will not sell my station at all. I think that was actually worked because my partner said she can give me some benefits for example going on trip with pay and gift cards of oil. I think my partner did very well in the negotiation. She is very cooperative which means when we come into deadlock she is willing to cooperate with me to solve the problem and expand the pie without knowing that theory. In addition, she also asked me why. So more information is put on the table and we had the opportunity to shift the positional to principled bargaining. And she is very gentle, easily to touch with. Those are good personality worth me to learn.
5. Emotions: How did you feel prior, during and after the negotiations? How did you feel about your negotiation partner? How did your feelings influence your actions? Before the negotiation, I prepared well, I read the materials for several times and made sure what was my reservation price and target price. Besides I also decided, under the special situation, how much concession I can make. I assumed my partner’s reservation price too. Even though I made all the preparation I could, I still felt a little worried because I haven’t done well since the beginning. But during the negotiation, I not only felt worried but also confused, because I found no matter how much concession I was willing to make could not change the fact that our bargaining is negative. Fortunately, we find some way except cash to handle that problem but not an impasse.
After the professor announced the data about the negotiation and do some explanations about the case, I felt happy because we did the right thing: talking about not only the cash. About my partner, she is a very nice girl. When she couldn’t give the price that I want, she didn’t lower the price immediately. On contract she asked me why I ask for so much cash and why I sold the station for, which make a pretext for the following information. She also told me her difficulties in cash. We both understand each other’s situation. We negotiated in a very peace atmosphere. I thought a peaceful mood is beneficial to the process of the negotiation.
6. Goals: What would you do the same or differently in the future, or how would you like to behave in order to perform more effectively? What I will do the same in the future is always thinking intigretaively and try to expand the pie all the time. Besides, I should always keep the confidence and try to attract other side’s attention to other things when coming into an intense atmosphere. And what I should keep in mind is there is no right answer in a negotiation and there are maybe a range of possible settlements. And before I make some decision I should make a comprehensive consideration to avoid regretting to refuse a maybe good suggestion.