Negotiation For Purchase Of Commercial Asset - Pre-negotiation, Essay, And Post-negotiation Stages.

You must answer the following questions:
1. What is your thinking style preference form – monarchic, hierarchic, oligarchic, anarchic – and what is your thinking style level – internal, external?
Attach copies of completed Sternberg-Wagner Thinking Style Inventories.
2. Are your thinking style preferences – form and level – optimal for conducting this negotiation?
Explain your answer.
3. What adjustments (if any) could you make to adapt to a more optimal thinking style for this negotiation?
4. What is your client’s BATNA? What is your client’s reservation value?
5. What is the other party’s BATNA? What is the other party’s reservation value?
6. What is the ZOPA range? What is your strategy for claiming the greater proportion of the ZOPA?
.

Stage 2: Negotiation

1. Enter negotiations with your counterpart for the sale and purchase of the commercial asset;
2. Maintain a communications log that captures the date, method, items discussed, and outcomes
of each communication

Stage 3: Post negotiation
You must prepare a short report to your client advising the outcome of the negotiation.

Introducation

The CEO of Pashendale Holding Limited has nominated me to represent the company in buying a commercial property 110 Burns Street, Bankstown Sydney.

My thinking style preference form is hierarchic whereas my thinking style level is external. My form and level of thinking style preference are optimal for conducting this interview. This is because the task at hand is a hierarchic problem, that is, purchase of a piece of land. This form requires the hierarchic style of thinking. As a negotiator, I possess these qualities that are why the hierarchic thinking style is the most appropriate thinking style for this negation. I wouldn't make any adjustments in adapting to any other optimal thinking style. There are four forms of governments: hierarchic, oligarchic, anarchic and monarchic. Correlating with each of these forms are styles and problems that require certain kinds of mental processes, (Sterberg, 1991, p.98). They are:

The Hierarchic Form

Hierarchic problems – They are problems that require attainment of various goals, with the goals allocated differing priorities and importance, (Ademi, 2010, p.140).

The hierarchic style – Hierarchic stylists tend to:

1. Be prompted by a hierarchy of objectives, with the acknowledgment that not all objectives can be achieved equally well and that some objectives are less important than others.
2. Take a healthy move towards to problems
3. Believe that the end doesn’t necessarily justify the means
4. View challenging objectives as acceptable
5. Seek intricacy and is tolerant apart from being flexible.
6. Know what to prioritize and what not to prioritize at different times

Have the ability to make decisions effectively and quickly.

The Monarchic Form

Monarchic problems – They are problems that require attainment of a single need or goal. Pure monarchic problems are infrequent although problems that are not inherently monarchic may be tackled as if they are, (Merio, 2009, p.61). Oversimplifications of problems by problem solvers in representation often result to problems that are not intrinsically monarchic become so, (Ehilich, 2014, p.49). Problems get to be of one kind or another mainly as a result of the way people portray them. For example, a problem might seem oligarchic to one individual but monarchic to another.

The Monarchic Style

People who mainly demonstrate a monarchic style have a tendency to:

1. Be prompted by a one need or goal at a time.
2. Be determined and aggressive
3. To be convinced that the ends justify the means
4. To try resolve obstacles head on
5. To oversimplify problem depictions
6. To be comparatively bigoted and unbending.
7. To be excessively decisive

The Oligarchic Form

Oligarchic problems – They are the ones requiring attainment of several equally important goals, (Zartman, 2013, p.180). The similar significance of the needs may be perceived rather than actual.

Oligarchic style - Individuals who prefer this style have a propensity:

1. To be driven by numerous competing needs.
2. To have numerous, possibly similar means of handling problems.
3. To be motivated by goal friction and pressure
4. To be of the opinion that the ends justify the means.
5. To realize that similar needs and goals have a tendency of hinder completion of tasks because all of the conflicting goals and needs are viewed as of approximately equal importance
6. To yearn for complexity, open-minded and very versatile.
7. To have difficulties setting priorities since every single thing looks equally significant.
8. To be rather irresolute

The Anarchic Form

Anarchic problems - They are difficulties that require a different turn from existing strategies for their solution, (Bercovitch, 2011, p.75). They demand a completely new approach.

Anarchic style – Anarchic stylists have a tendency:

1. To be driven by a collection of needs that are challenging for themselves as well as others to solve.
2. To pursue unsystematic procedures to problems
3. To be motivated by what looks like a disorder
4. To be of the opinion that the ends justify the means
5. To have challenges setting priorities
6. To be uncertain about their goals
7. To be simplifiers who are bigoted and excessively flexible

The following are internal and external issues that need to be dealt with mental self-governments.

Internal scope

Internal problems – Involves issues applying intelligence kept apart from others. For example, solving analytical problems.

Internal style – Internalists have a tendency of being introverted, less socially confident and sensitive. They prefer working alone.

External problems – Require application of intelligence as it relates to the external world of a person and of oneself. Their relation with people often becomes part of the problem. For example, working with peers.

External style - Externalists are extroverts, more socially confident and sensitive. They enjoy working with other people and hunt for issues dealing with other people as opposed to internalists. They are interpersonally more aware.

Stage 1: Pre-negotiation

BATNA is a term invented by Roger Fisher and William Ury in 1981. It stands for “Best Alternative to a Negotiated Agreement.” In this context, my client’s BATNA is the best real estate deal he can get in case the seller refuses to negotiate with me properly. BATNAs are very important in negotiations since one cannot decide the negotiated agreement reached without knowing the alternatives available. Your BATNA is the only touchstone that cushions both the buyer and the seller from agreeing to terms that are not favorable and from turning down the ones that would be in your interest to take, S (Sebenius, 2012, p.125). Having a good BATNA gives one the advantage of a greater negotiating power. For one determine his/her BATNA, they have to first think of all the alternatives in place if the current negotiation doesn’t end well then analyze all the alternatives and the cost of pursuing one. My client’s BATNA is $43.43M. Reservation value is the point at which one starts to consider the BATNA rather than starting or continuing a negotiation. The parties in a negotiation decide not to go beyond this point. In this case, my client’s reservation value, the highest price he’s willing to pay is $43M.

Zone of Possible Agreement (ZOPA) is the range where an agreement to a negotiation is most likely to occur. Finding the ZOPA range might call for some detective work for one to get the best range possible. The process starts with the seller tabling a proposal or offer. The buyer takes a look at the proposal evaluating its benefits. She then goes ahead to accept it, make a counter off or reject it out rightly. While the seller is striving to obtain the maximum amount possible for their offer, the buyer aims at getting the least amount possible. The difference between their reservation prices is their range of expectations. An overlap of the two ranges becomes the Zone of Possible Agreement or ZOPA. In case there is no overlap, in the range of expectations of both the buyer and the seller, there is a high unlikelihood of an agreement. The parties might also fail to agree even when ZOPA exists. My strategy for finding the greater range of ZOPA is to try as much as I can to make the seller reveal their reservation price from which I can work out the best ZOPA.

The following is a report explaining the outcome of the negotiation process:

(Your Name)

Email: (Your email address)

(Date)

By email: (Client email address)

(Client email address)

Chief Executive Officer

(Client Organization Name)

Dear (Client Name)

Thank you for your instructions. I wish to confirm that I got a strategically located property at Burns Street, Bankstown, Sydney.

This outcome was reached through holding several face-to-face negotiations with the seller. One of the challenges encountered was assessing the sellers BATNA precisely. By asking myself “What would he do without a deal” I got a valuable insight in estimating his BATNA thereby helping me negotiates better. Having a good BATNA was also an added advantage as it increased my negotiating power. I believe that the price $43 M is the best price in the market for a one-acre block of land at Curra. I, therefore, recommend that you settle on this option as it is affordable and its location is most suitable than the other available options so far. I also managed to crosscheck documents submitted to me by the seller, and they were all good. I have already submitted a holding payment of $20M meaning the remaining amount is $23M.

Yours sincerely,

(Your name).

Ademi, N., 2010. Negotiation and Management.

Bercovitch, J.a.J.., 2011. Negotiation or mediation? Negotiation Journal, 17(1), pp.59-77.

Ehilich, K.a.W.J., 2014. The discourse of business negotiation. pp.43-52.

Merio, A., 2009. Bargaining over governments in a stochastic environment. Journal of Political Economy, pp.57-73.

Sebenius, J.K., 2012. Negotiation analysis: A characterization and review. Management science, pp.110-32.

Sternberg, R.J.&.W.R.K., 1991. MSG Thinking Style Inventory.

Zartman, I.W., 2013. Managing Complexity. International Negotiation, 8(1), pp.179-86.