Answer:
Stage 1:
1:
BATNA is the Best Alternatives To Negotiated Agreements according to which the parties negotiate on the best alternatives obtainable by them. According to Fells 2016, it can be explained that negotiation is effective if the results are connected to the interest of the parties and the parties derive benefits from such interests. According to Goldberg et al. 2014, it can be explained that negotiation is a dispute resolution system according to which the parties meet their minds in the halfway through the compromise of interests from both the ends. According to Schaerer, Loschelder and Swaab 2016, it has been said that negotiations imply the bargaining zones which give rise to multiple alternatives in that aspect. Thompson 2013 explains the truth of negotiation as the power to bargain. Beenen and Barbuto Jr 2014 states that negotiation is an intensive exercise to make a deal between the parties and such deal is the outcome of rigorous assessment of their interests from both the parties.
In the case study, the BATNA as well as the reservation value for my client is:
- LeBron James offered 823530$ as consideration against the services offered to DeGrandis Sporting Goods for endorsing the badmintons sold by them.
- Our client, DeGrandis Sporting Goods negotiated the amounted with a reduction of 15% amounting to 700000$.
- The reservation value for our client is 700000$ and BATNA for our client is either to accept the original offer or wait for their response to our negotiated terms of the contract.
2:
BATNA is the Best Alternatives To Negotiated Agreements according to which the parties negotiate on the best alternatives obtainable by them. According to Gomes et al. 2014, it can be explained that the negotiation of the terms and conditions of the contract is an intensive exercise and hence, it tends to stress out people leading to angered behavior at the end of a process of negotiation. According to Carneiro et al. 2013, it has been explained that negotiations should be explained as well as understand in the mannerism of case studies and principles in order to provide the best solution in case of disputes or angered negotiations. According to Tomlinson and Lwicki 2015, it can be explained that the basis of contracts and the contractual terms is based upon the concept of negotiation. For an instance, the concept of counter-offer is largely the acceptance and recognition of the term of negotiation. According to Mackenzie, Vincent and Zeleznikow 2015, it can be explained that offer forms the basis for BATNA because it sets the expectations of the party towards the agreeable benefit. According to Kirgis 2014, it can be explained that leverage and influence is what drives negotiation. In other good negotiators are those who can create an influence over the other party and coerce them with the intellect to enter into the negotiated contract.
In the given case study, the BATNA for the other party is:
- LeBron James offered 823530$. And we counteroffered an amount 15% lesser than the original offer amounting to 700000$ as consideration.
- LeBron James can either accept the agreement or try to look for agreements with most preferable terms.
- The offer proposed to Elite Sports Stars is at 700000$ and their BATNA is to either accept the offer or look for the ones which offer the most preferred terms.
- However, the reservation value in both the scenarios shall be 700000$.
3:
ZOPA is the Zone Of Possible Agreements meaning the minimum targets attained by the parties in the course of negotiation beyond which the deal is not possible. According to Druckman and Rosoux 2016, it has been explained that the process of negotiation is a complete roller coaster of twists and turns involving focal points and turning points in its due course. According to Propescu 2013, it has been explained that Negotiation is the process which gives decisiveness towards a negotiable agreement. However, such negotiations and negotiable terms give rise to ZOPA beyond which the deal may be struck off. According to Butterfield et al. it has been explained that negotiations are the outcome of effective communication skills being established between the parties. According to Fassina and Whyte 2014, it has been explained that negotiations may result in angered communications leading to failure of BATNA as well as ZOPA. According to Duerfeldt 2019, negotiating with an expert requires effective skill and patience because an effective negotiator is firstly the successful communicator.
In the given case study, the strategy to be applied for effective negotiation or ZOPA for our client would be begin a bargain which is lower than our estimated reservation value. In doing so, by rigorous negotiation and relaxation of some amount would make the other satisfied of his bargaining outcome and we would be happy for saving some money and using the same for statutory and other expenses so that, ultimately the reservation value remains the same.
Stage 2
Items Discussed
The agenda for the email was the discussion regarding the terms of contract for the services of LeBron James. The terms offered by the party was 823530$. However, we had offered a negotiated value of 700000$ which is 15% less than the value offered by them. Further, the term of the contract was discussed being at least 4months and not exceeding 5 months because any period till 2months shall be a loss for the company with maximum amount of 200000$ and the third month shall be a neutral month having no profit or loss in the accounts of DeGrandis Sporting Goods. However,4th month onwards the company revenue would notice profits and hence, to ensure profits are earned from such campaign, the term is the campaign should not be less than 4months. And to protect the endorsement value of the celebrity, long term exposure to such campaign is not recommended and hence, maximum term of contract shall be nit more than 5months.
Outcome
LeBron James did not accept the negotiated consideration amount for the enforcement of the contract.
Notes
LeBron James could have further negotiated the value to ensure ZOPA is met for both the parties but they chose to negotiate with other enterprises and accept the offer with their most preferred terms and conditions of the contract.
DATE
Items Discussed
The terms and conditions for the establishment of the contract was discussed between the parties with consideration amount payable by DeGrandis Sporting Goods to Elite Sports Stars shall be 700000$
Outcome
The Elite Sports Stars may agree with the terms and conditions of the offer and accept the contract or they may negotiate with other enterprises to find their most preferred offer and accept accordingly.
Notes
The offer proposed by is the reservation value for the services of Kobe Bryant. However, other terms may be negotiated in accordance with the negotiable proposals of Elite Sports Stars. The estimated revenue for the campaign is 1.1 million$. The contingency clause has been incorporated to ensure the safety for both the parties. If the revenue is more than estimation then DeGrandis will be levied a surcharge of not more than 200000$. If the revenue is less than the estimation, then DeGrandis shall be entitled for the rebate of amount of not more than 200000$. The term of the contract shall. Not be less than 4 to maximum 5months.
Stage 3
Praveen Reddy
Email [email protected]
Date 16/10/2019
ELITE SPORTS STAR
Mohit Sharda
Subject: Negotiate contract for KOBE BRYANT for endorsement of basketballs.
Dear Mohit,
We are very thankful for your interest in our proposal. However, we would like to offer you our agreeable terms and conditions for the establishment of contractual relationship between us:
The contract is established between DeGrandis Sporting Goods and Elite Sports Stars.
The intention to contract is established between the parties for the endorsement of basketballs sold by DeGrandis Sporting Goods.
The contract is established for the services of Elite Sports Star through the celebrity, Kobe Bryant to campaign advertisements for the basketballs sold by the other party.
The consideration payable in return for the services of Elite Sports Stars is 700000$.
The parties agree to continue the term of the contract for a period not exceeding 5months.
However, the term may be extended with the 5%inctease in the consideration amount payable by the party assuming, all the other terms and conditions remain the same. Nevertheless the term can only be extended for a period of 5months at a time to ensure the endorsement value of the celebrity is not lost and the revenue from the campaign is also maintained at par.
The contract also includes a contingency clause according to which the revenue proceeds from the campaign is estimated to be 1.1 million$. However, if the revenue turns out to be more than the estimated amount, then DeGrandis Sporting Goods shall surcharge an amount not exceeding 200000$ from Elite Sports Stars. However, if the total revenue turns out to be less than the estimated value, then Elite Sports Stars shall levy a rebate of an amount not exceeding 200000 million$ to DeGrandis Sporting Goods.
The contract shall demand the parties to maintain good conduct at all times and free themselves from any charges arising out of moral turpitude or criminal activities during the course of the enforcement of the contract.
The campaigning shall be, at all times in good faith towards DeGrandis Sporting Goods.
The personal interest of the celebrity should not conflict with the interest of the company selling the basketballs. In any such conflict of interest, the contract shall be deemed breached.
In case of breach of contract or any other disputes, the parties may refer to the Arbitration and the adjudicating party shall be appointed at the mutual consent of both the disputing parties.
In order to deem the terms of the contract enforceable, the consent of the parties shall be free and wilful.
The parties are legally eligible to enter into the contract in accordance to their age capacity and mental soundness.
The contract shall be enforceable only after it has been accepted by Elite Sports Stars for their services by Kobe Bryant.
For further queries, you may email me at my email [email protected] or call me at +6789054321 during business hours.
We shall be looking forward for your reply.
Thanks,
Yours sincerely,
Praveen Reddy
(Agent for Elite Sports Stars)
References:
Beenen, G. and Barbuto Jr, J.E., 2014. Let's Make a Deal: A Dynamic Exercise for Practicing Negotiation Skills. Journal of Education for Business, 89(3), pp.149-155.
Butterfield, B., Houfek, N., Tucker, J., Warren, L., Facilitators, C. and Bartosz, E., Communication and Negotiation Skills Workshop.
Carneiro, D., Novais, P., Andrade, F., Zeleznikow, J. and Neves, J., 2013. Using case-based reasoning and principled negotiation to provide decision support for dispute resolution. Knowledge and Information Systems, 36(3), pp.789-826.
Druckman, D. and Rosoux, V., 2016. Focal points and turning points in negotiation: A comparative analysis. Negotiation Journal, 32(2), pp.127-150.
Duerfeldt, A., 2019. Negotiating Cash Rent: What It Takes to Negotiate Like a Pro.
Fassina, N.E. and Whyte, G.R., 2014. “I am Disgusted by Your Proposal”: The Effects of a Strategic Flinch in Negotiations. Group Decision and Negotiation, 23(4), pp.901-920.
Fells, R., 2016. Effective negotiation: From research to results. Cambridge University Press.
Goldberg, S.B., Sander, F.E., Rogers, N.H. and Cole, S.R., 2014. Dispute resolution: Negotiation, mediation and other processes. Wolters Kluwer Law & Business.
Gomes, M., Oliveira, T., Carneiro, D., Novais, P. and Neves, J., 2014. Studying the effects of stress on negotiation behavior. Cybernetics and Systems, 45(3), pp.279-291.
Kirgis, P.F., 2014. Bargaining with consequences: Leverage and coercion in negotiation. Harv. Negot. L. Rev., 19, p.69.
Mackenzie, G., Vincent, A. and Zeleznikow, J., 2015. Negotiating about charges and pleas: balancing interests and justice. Group Decision and Negotiation, 24(4), pp.577-594.
Popescu, L., 2013. The Futiliy of the Negotiations on Transnistria. European Journal of Science and Theology, 9(Supplement 2), pp.115-126.
Schaerer, M., Loschelder, D.D. and Swaab, R.I., 2016. Bargaining zone distortion in negotiations: The elusive power of multiple alternatives. Organizational Behavior and Human Decision Processes, 137, pp.156-171.
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Tomlinson, E.C. and Lewicki, R.J., 2015. The negotiation of contractual agreements. Journal of strategic contracting and negotiation, 1(1), pp.85-98.
