The first day of the decision making and negotiation workshop was good. We had good negotiation exercises and case studies and I thought it was quite helpful. Today we learnt about the 2 ways to make decisions; one in which we rely on the rules and methodology to make rules namely the normative way and the 2nd method, which is effortless and depends on intuition. I am an intuitive decision maker. I rely on my instincts in most instances. Our first case was the “Carter Racing” case. There were several reasons to run for the race but somehow it just did not feel right to run based on the low temperatures for the current day of running. In short, I felt like it was not the right day to run. I was in a team in which 3 of us felt that running for the day was not feasible and that we should just lay low and run on another day because the stakes were too high. We had an opposition from one of our group members; Maryam felt that we should take the risk. Our main issue was the non-availability of data at 40 degrees Fahrenheit. We resolved the issue by taking a majority vote and it was decided that we would not run.
When the “Challenger Disaster” case (carter racing was a simulation of this disaster) results were announced, I knew that we had made the right decision and it was okay to rely on instincts. In this case, even though we did not have all the necessary information, it was important to ask for the right information. So the lesson from this was to ask the right questions and gain as much information as possible. Also, we had to keep in mind that our actions were irreversible and there was no coming back from a decision that we had made. This was a good learning exercise. In this situation, I learnt that taking quick decisions under pressure required both a rational and an intuitive approach. Also, there was a difference in opinion and many groups in the class decided to run. We had an analysis of why they did so and why we try to avoid a rational approach. After this, our professor had us answer a confidence quiz and she taught us how to overcome overconfidence. Some of the biases that we learnt about were:
•The Default Option And Its Power
•The Anchoring Bias
•The Availability Bias
•The Endowment Bias
•The Confirmation Bias
•The Overconfidence Bias.
I learnt that we should combine both the “Normative” and “Descriptive” way to form a “Prescriptive” way to make decisions. Asking questions and asking for the right information is essential in all cases. August 2nd, 2011
Yesterday we saw the difference between the “Normative” and “Descriptive” decision making processes and the various biases that hinder our decision making process. Today we summarized the concepts that we had learnt yesterday and also discussed on the various reasons for negotiating. Some of the reasons were power, not being happy with the current situation, profit and loss, possibility to agree on a common decision and priorities. We negotiate in our daily life and there are various types of negotiations. These are as follows: •Job Negotiations
•Real Estate Negotiations
•Negotiations with Difficult People in Difficult Situations. We also understood concepts like “Willingness to Pay/Willingness to Accept” or “Walkaway Price”, “Best Alternative to a Negotiated Agreement” (BATNA) and “Zone Of Possible Agreements” (ZOPA). We had a negotiation on the “Bentz – Smith” case. I think I learnt a lot from this case because this negotiation was a little tricky. I ultimately got a deal in which both the parties were happy. This had come at a cost and I had to take a little risk as I was the seller; I had to split the risk at 50% with the buyer. It was a win – win situation. In the debriefing session, I picked up some of the tactics involved in bargaining and negotiating. I also got to learn about the “boomerang effect” and the “Negotiation dance” and kept in mind to ask the right questions while negotiating. Another tactic for getting the “right price” was the average of the buyer’s and seller’s price.
Also, unilateral discussions should not be made. Setting anchors is also another good exercise and is quite effective. After this case, we negotiated on the “Sally Soprano” case where I was the agent from the Opera and we were looking to hire Sally Soprano. From this exercise, I learnt that I should always try to negotiate more and see “beyond the surface” of a good deal. In the debriefing session, I got to know that the ZOPA for this case was quite high and I could have got a better deal. But I have to say that it was a fair deal and that made me happy. At the end of the day, we started a discussion on the “7 element frame work” model by the Harvard Business School. It was a good day indeed.
August 3rd, 2011
We continued the discussion on the “7 element frame work” model today. However, before starting the session, our professor asked us all to play a game. The game was quite simple but it required us to put our money at stake. The returns were 50% if we came through the problem as a team. In the end, we failed and we lost our initial input. The professor then taught us the concepts of free riding. Moving on, we also spoke a little more on the 3 P’s of negotiation namely,
By this time, we had done many negotiations in classes and these were as follows: •One on One negotiations: individual decision making, strategic decision making •Negotiations as being an agent of a principal and reporting back to the principal and today we saw a different type of negotiation in which we were supposed to be in a cross cultural business setting and we were playing the role of an American company who wanted to negotiate with a Japanese one. We had to get into the role and behave according to the rules of the case. I was playing someone that I am not at most times. I was supposed to be aggressive, rude, direct and casual. It took some time to get into the role but I think our group pulled it off quite well. It was a good experience and I learnt that being in the shoes of an aggressive person is quite easy. An aggressive person puts across his/her thoughts without thinking about the other person and at times, this does work. We had a lot of arguments in this negotiation case but in the end, we and the company that we were negotiating with, were happy. It was a win – win situation. We are going to talk about the discussions/debriefing of the cross cultural negotiation tomorrow.
August 4th, 2011
We started off the day with the debriefing of the cross cultural negotiation case (Alpha Beta Negotiation) and we analysed the characteristics of each negotiating side. Alphas were supposed to be aggressive and dominating and Betas were supposed to be calm and passive. Today was different. It was different because we had 2 different types of negotiations to handle. It was different from other negotiations that I have been a part of. The first negotiation was the “Oil Pricing” scenario. From the surface, this seemed like a very easy exercise but it was very difficult. This was because it was not easy controlling emotions during this exercise and we did not know the basis of negotiation of the other side/team. I learnt that controlling emotions was a major and important part of any business setting. Also, the exercise changed the goal from “maximize profit” to “defeat the other team”. This should not have been the case. Our team was quite aggravated because the opposition did not keep their word and we had suffered some major losses during the negotiation. This was because we trusted our opposition too easily. This has to be changed.
We did not give out a clear message that we wanted to work in unison and for the common good of both the companies. We should have sent a clear message that we were willing for a maximum profit scenario on both ends by quoting the highest amount on the first bid. It is very important that the tone of negotiation be gauged before any further steps are taken. Also, what we could have done is that we could have put ourselves in their shoes. Eventually, we realised that their main motive was profit without a win – win situation.
The second exercise was a group negotiation which went off quite well; better than what I had expected. Since it was a 6 party negotiation with each party having their particular interests in mind (with these interests clashing with each other), I figured that it was going to be a noisy affair but it turned out to be the exact opposite. The discussion went off smoothly and this time we negotiated from a different perspective. I saw that natural coalitions were being formed and since my role (in this case, being a representative from the town of Crandon) was that of an observer, I played my part well. I did not talk a lot and spoke only when necessary. It was an exercise that taught me that it is not always possible to get the best deal and that we can walk away with a good deal and this in turn, creates harmony amongst the negotiating parties. I thought that we looked at the pressing issues from all aspects and our team got the best deal in the end.
Some of the key takeaways for me from this course are as follows: •Asking questions when needed and for more information
•Verifying the information by asking “how” “why” “when” and “where” •Keeping a clear objective on the goal and also analysing the situation clearly •Keeping a calm attitude in difficult situations and also when dealing with difficult people •Setting anchor points in a negotiation because these are very important and by the end of the course, I had learnt to use them well •Trying to use the BATNA and ZOPA concepts well
•Working on all 3 aspects of negotiations i.e. People, Process And Problem and also using the “7 element frame work” This workshop has taught me a lot and I will be looking forward to using the principles, tactics, methodologies and principles that I learnt here in the future.