Hello Everyone!
Thanks for checking back in! This week's blog post is using the negotiation checklist from the NEGOTIATION Readings, Exercises and Cases 6th edition book that my class is using. This checklist can be found on page 4 of http://scholarship.sha.cornell.edu/cgi/viewcontent.cgi?article=1675&context=articles. The beginning portion of it states that the negotiation checklist is, "a systematic way to ensure you are well-prepared before your next negotiation".
The Live8 Negotiation basically involved two parties, Live8 Art Galleries and LiveAid. Live8 Art Galleries was a chain of art galleries located across Turkey. LiveAid is a brand of concerts to support natural and political disasters around the world. You purchased the domain rights to a site named www.live8.org and LiveAid wants to purchase/borrow it. I am negotiating as the owner of the Live8 Art Galleries.
A. About You
1. Goal- To strike a deal to lend/sell the domain to the LiveAid concerts
2. Issues- Money, time, who will control the website, timing of the deal is around busy summer months for galleries and also two weeks before the concert will take place
3. Helping the world is important but my part feels that these efforts are useless and no money actually goes to those who need it, having the site during the busy summer months is very important to me due to bringing in traffic to my galleries, the money is very important because I desperately need $1,700,000 to fund my three new gallery expansion plan, controlling the business and website is very important to me.
A. About You
(a)
-Money for expansion plan
-Timing of opening new businesses
-Control of business and website
-Having the site during busy summer months
(b)
1st -Control of business and website
2nd -Having the site during busy summer months
3rd -Money for expansion plan
4th -Timing of opening new businesses
(c)
(40 points) -Control of business and website
(30 points) -Having the site during busy summer months
(20 points) -Money for expansion plan
(10 points) -Timing of opening new businesses
(d)
Settlements - Have at least 51% equity of my business to maintain primary shareholder.
Share the site and have separate sections for both businesses.
Realistically, I would give up the site for 2 weeks at most to maintain the site open during the summer months.
(e)
51% equity - 70 points
Share the site - 15 points
2 weeks giving up the site - 15 points
4. BATNA - To make no deal with LiveAid and to fund the expansion plan with investors and banks through debt and equity deals. Not the best situation, but my business will still mostly be mine and I will just owe some money through debt.
5. I am not willing to take anything less than 51% equity to get from the investors and banks. I am not willing to completely give up my site for anything more than 2 weeks. If they offer a specific dollar amount, then I will have to consult this checklist
B. About the Other Side
1. Each issue is important, but the fact that I cannot give up my site for more than 2 weeks and not be the primary shareholder is of utmost importance.
2. BATNA - Find other ways to market the concert
3. Resistance point - Spending too much on the site to where it would not be worth the marketing costs
4. My target is to keep full control of my business and the site with guaranteed traffic to my website post event because they will no longer have access to the site.
C. The Situation
1. There is a 2 week deadline until the LiveAid concert begins. The LiveAid side I believe is more impatient due to the fact that they only have two weeks until the concert starts.
2. I believe the only fairness norm that applies is the need norm. I need to fund my expansion plan, and this would be the best source to gain funds from before turning to investors and the bank.
3. I want them to avoid asking me how much I need to fund my expansion. This will reveal my position and they will either decline to negotiate or offer much less. I will respond that I have a set budget that I must meet in order to fund my business.
D. The Relationship between Parties
1. I do not foresee any future consequences due to the fact that this will most likely be a one-time deal. This negotiation may be repetitive in its issues because the issues are clearly defined.
2a. I feel that I can trust the party because they seem to be in greater need than I. I know that they are a nonprofit organization and those tend to be ethically sound individuals.
2b. I believe that the other party has reasons to trust me and not to trust me. I have not lied to them, so they have no reason to not trust me from the beginning. Although, I am a new business entity to these people, so they could view me as solely profit-seeking.
3. I know that the other party tends to be submissive in issues and due to the time crunch, they may be more willing to pay more than they had initially planned.
4. The other party's authority is limited by their operational capabilities. They are nonprofit and need individuals to donate time or money.
5. Consult with the other party about the agenda.
Thank you again for tuning in to my content. It's still early in the life of this blog, but have faith! There will be more content to come and more interesting things to read about.
Thank you again
Bret Thomas
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