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Reflective Essay on individual performance in group negotiation. Uses models to explain personal position...

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Over two meetings Aussie Air’s shareholder’s representative (EI) and CEO, Down Under Air’s representative (DUA), foreign investment review board (FIRB), Australian council trade unions (ACTU) met regarding DUA acquiring EI’s shares to transform it into a private company. The issues surrounding this deal were stock price, outsourcing of jobs, management contract, sickout, government delay and Australian holding which all had a varying degree of importance to each party. These issues were also complemented by multiple negotiation variables such as value creating and claiming, relationships, biases, emotions and coalitions. How successful were you in this negotiation? How do you know you were successful? Success is defined as the optimal outcome by getting the most value for your organisation (Lewicki & Robinson, 1998). Within this negotiation, the scoring system I used to judge my success was a points system in which the more points the greater success. I was successful, as DUA’s deal was better than their BATNA, through negotiating outsourcing, contracts and stock price. Stock price was my most important issue but unfortunately, this is where I lost the most amount of potential points but they were regained in contracts and outsourcing making DUA’s overall position improved. But success isn’t only measured by DUA’s achievements but also others success (Hornickel, 2014). Every party was successful as all parties had their interested satisfied during the negotiation through being open about our important issues. This lead to a feeling of trust allowing us to come to integrative agreements which enlarged the ‘pie’ before dividing it. How did you claim value in this negotiation? What tactics did you use to advance your interests? In DUA’s position value was determined by contracts, outsourcing, stock price, sickout and government delay. Claiming value is defined by way of capturing the entire quantity of resources and distributing throughout negotiating parties. Keeping this in mind, to open negotiations I lowballed all the issues to anchor the lower end of the ZOPA, forming the comparable value (Kristensen and Garling 1997). I fortified my position by explaining the rise in price was only due to DUA and would fall if the deal failed, outsourcing would allow lower costs and grow jobs as business grew and that a contract allows management to have no consequences for poor performance, thus implementing loss aversion to strengthen the anchor. This produced agreement on outsourcing and contracts, which I leveraged to reduce price and in turn using multiple sources social technique (Typsoe, M. 1982), to persuade EI into a lower price.  How did you create value in this negotiation? How did you maximize the joint gains? I had to recognise that each party had a different set of issues and levels of importance towards their respective issues, thus to make sure that every party gained the most from the negotiations we had to come to an integrative agreement. Through some integrative decisions, we could give more benefits to those areas with overall greater points which allowed us to enlarge the pie (Goldberg 2001), such as ACTU conceding to keep 90% jobs locally if management got a 3-year contract comparted to 100% and 5 years. This allowed all parties to gain value. An issue that had little room for value-creation was stock price where I wanted low as possible and AAS wanted high as possible. I capitalized on the differences in our price forecasts (Bordone & Moffit, 2006), stating the high likelihood the price would

drop if the negotiation fell through, attempting to persuade EI that it was uncertain that price continuously would go up and we could provide certainty and monetary benefit. They neglected this information, thus forced a distributive negotiation with the final price being $6.

How did your relationship with other parties change throughout the negotiation? How did you update your strategies and tactics as the negotiation progressed and new information came to light? Relationships were founded on the idea of mutually beneficial positions, I led with openness and honestly and clearly displayed my intentions for an integrative negotiation which was met with reciprocity. My belief was that this would create good relations for the infrastructure of the business after acquisition. All parties bar EI met me with openness which strengthened our relationships and created a uniform front, but EI met our honestly with lowballing which caused a lack of trust between parties. When the amendments occurred between meetings I used this as an opportunity to further strengthen trust and shared the information I received in hope to build trust and improve relations with EI as relationships outside the coalitions also were important for a successful relationship (Goldner and Mckeon 2007). Once again rejecting openness if favour of hostility, the processes of the negotiation led to two rejections of collaboration. This further cemented the dysfunctionality between EI and other parties (Greenhalgh & Leonard, 1987), creating difficulty coming to agreeable terms. On what basis did you join or refuse to join a coalition? How did you strengthen it? How did you weaken it? Being able to satisfy ACTU’s, Governments and Managements interests early, we found that throughout the first meeting we began to adopt similar ideals and positions, ultimately indirectly forming a coalition (Sagi & Diermeier, (2017). This united front gave us accumulated power (Jandoc, 2017), which allowed us to strengthen our individual arguments and our views came from multiple sources, fortifying the social technique. This allowed us to push down price on the first day towards the $5.25-$5.75 range, which put DUA in a substantial point surplus. To keep this coalition together and strong when alterations/news were released between meetings I opened with amendment alterations to further gain trust and strengthen our coalition, this allowed us to create a unified front once again, resulting in a coalition that never weakened throughout negotiations. What cognitive biases did you observe in yourself and the other parties? How did they affect the negotiation and how did you manage these biases? We often enter a negotiation thinking that our approach is independent but cognitive biases can influence the way in which we think which therefore we can unknowingly make mistakes in judgment and decision making (Caputo, 2013). Upon review after the first meeting I fell for a bias of self-importance and control (Adler, 2005), a bias that arises when we overestimate our ability to affect the outcome of a situation. Due to my supposed power through coalitions I believed that I would be able to continue to anchor price at $5.50 at the second meeting. The amendments were negligible, I believed, to coming to an arrangement that satisfied my interests, depicting the extent of the bias. After the first meeting I was anchored on 1050 points and with the amendments I re-evaluated at 800, and in the second meeting EI realised they’re essential for the transaction thus removing my illusion of control.

Upon this realisation, I took a more passive approach to gain a realistic view of my position, but this led to EI believing they had gained control, thus setting firmly at $6. Unwilling participate in an integrative negotiation, EI’s view was distributive and as such suffered from a fixed-pie bias (Gelfand and Brett 2004). What emotions did you observe in yourself and the other parties? How did they affect the negotiation and how did you manage these emotions? Anger caused a great amount of friction between EI and DUA and even between EI and all other parties. I could strike deals by making concessions with all parties, except EI wouldn’t reciprocate and were unwilling to budge from $6. This evoked anger in other parties and generated strong friction, ultimately reducing the amount of joint gains (Allred, Mallozzi, Matsui & Raia, 1997). As our emotions create the foundation of our approach towards the negotiation itself, the coalition had a negative stance towards EI and vice versa. This lead to multiple threats of walking away which only bolstered the negativity. Therefore, we tried to improve our approach by asking ourselves independent questions about the negotiation itself and the pros and cons of suggested alternatives (Leary, Oillemer & Wheeler 2013) thus we once again approached with a fair offer to EI but were met with lowballing. These findings led me to experience that honesty is the best form of approach to a negotiation for current and future benefit. It allows coalitions to form and the coalitions are willing to make concessions for the benefit of enlarging the ‘pie’, allowing the parties to enlarge the total sum of resources (Olekalns & Smith, 2000). Whilst the negotiation at face value was about an acquisition, underneath the purchase price were an array of different factors which influenced decision making, future relationships and ultimately the success of the company itself. The underlying issues had to be continuously consulted and reviewed to ensure that all parties had their interests met. Overall the negotiation was a success as everybody succeeded their BATNA’s even with the negativity evident.

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