You are negotiating a major contract with the federal government for a G.P.S. Navigation system that only your company makes. The product has been battle tested in numerous actual war time conditions during the past few years. You are the lead negotiator for your company. You know that the individual representing the U.S. Government is adept at saving the government money on acquisitions of high tech equipment that companies like the one you represent make.
Write a three (3) page paper in which you:
- Discuss the critical behaviors that you should be mindful of during the negotiating process with the industry members in the scenario. Justify your response.
- Compare the fundamental differences between negotiating contracts with the federal government and a personal negotiation in which one is purchasing a new home or a new car.
- Discuss five (2) skills mentioned in Chapter 26 in the text that you believe would be critical for your success negotiating contracts with the federal government. Provide support for your rationale.
- Use at least three (3) quality resources in this assignment. Note: Wikipedia and similar Websites do not qualify as quality resources.
Your assignment must follow these formatting requirements:
- Be typed, double spaced, using Times New Roman font (size 12), with one-inch margins on all sides; citations and references must follow APA or school-specific format. Check with your professor for any additional instructions.
- Include a cover page containing the title of the assignment, the student’s name, the professor’s name, the course title, and the date. The cover page and the reference page are not included in the required assignment page length.
Get the Other Side to Commit First
Power Negotiators know you’re usually better off if you can get the other side to commit to a position first. Several reasons are obvious:
- Their first offer may be much better than you expected.
- It gives you information about them before you have to tell them anything.
- It enables you to bracket their proposal (see Chapter 1). If they state a price first, you can bracket them, so if you end up splitting the difference, you’ll get what you want. If they can get you to commit first, they can then bracket your proposal. Then if you end up splitting the difference, they get what they wanted.
- Plead poor. “Mike, I don’t think for a moment that I can afford to buy your boat from you, but I did notice that you never use it, and I thought you might just want to sell it to me at a giveaway price.”
- apply the pressure of Higher Authority. “Mike, my wife is going to kill me for even asking you this, but . . . . ”
- Use the power of competition. “Mike, I’ve been looking at a boat similar to yours that seems like a real bargain, but before I go ahead I thought I’d see what you would want for yours.” By using these approaches, you modify Mike’s aspirations without having to commit to a position. The less you know about the other side or the proposition that you’re negotiating, the more important the principle of not going first becomes.
How the Beatles Went First and Lost Millions
If the Beatles’ manager Brian Epstein had understood this principle, he could have made the Fab Four millions more on their first movie. United Artists wanted to cash in on the popularity of the singing group, but was reluctant to go out on a limb because the studio didn’t know how long the Beatles would be popular. They could have been a fleeting success that fizzled out before their movie hit the screens. They planned it as an inexpensively made exploitation movie, and budgeted only $300,000 to make it.This was clearly not enough to pay the Beatles a high salary, so United Artists planned to offer the Beatles as much as 25 percent of the profits. The Beatles were such a worldwide sensation in 1963 that the producer was very reluctant to ask them to name their price first, but he had the courage to stay with the rule. He offered Epstein $25,000 up front and asked him what percentage of the profits he thought would be fair.
Brian Epstein didn’t know the movie business and should have been smart enough to play Reluctant Buyer (see Chapter 5) and use Good Guy/Bad Guy (see Chapter 14). He should have said, “I don’t think they’d be interested in taking the time to make a movie, but if you’ll give me your very best offer, I’ll take it to them and see what I can do for you with them.” Instead, his ego wouldn’t let him play dumb (see Chapter 27), so he assertively stated that they would have to get 7.5 percent of the profits or they wouldn’t do it. This slight tactical error cost the group millions when director Richard Lester, to every one’s surprise, created A Hard Day’s Night, a brilliantly humorous portrait of a day in the group’s life, became a worldwide success.
If both sides have learned that they shouldn’t go first, you can’t sit there forever with both sides refusing to put a number on the table, but as a rule, you should always find out what the other side wants to do first.
Apart from price, you’re always better off to have the other person bring a proposal to you than you are to take one to them. Some crafty negotiators go to incredible lengths to make it look as though the other side approached them when the reverse was true. Movie producer Sam Goldwyn once wanted to borrow a contract actor from Darryl Zanuck, but couldn’t reach Zanuck because he was in a meeting. After many tries to reach Zanuck, an exasperated Goldwyn finally insisted that the call be put through. When Darryl Zanuck finally picked up the phone, Sam Goldwyn, who had initiated the call, blithely said, “Darryl, what can I do for you today?”
Lewis Kravitz, an Atlanta executive coach and former outplacement counselor, counsels patience and knowing when not to speak. He tells of a young man he coached who had just been sacked and said he was willing to take a $2,000 pay cut to $28,000 on his next job. But Kravitz coached him to let the prospective employer make the first move. In this case, the interviewer offered $32,000, stunning the overjoyed job-seeker into momentary silence, which the interviewer interpreted as dissatisfaction. He upped the offer to $34,000. “In negotiating, he who speaks first generally comes out on the short end of the stick,” he says.Key Points to Remember 2. Don’t let that stop you from trying to modify their opening negotiating position. (“It would have to be a giveaway price but we might be interested,” or “We’ve already turned down an offer for $10,000.”)