Contract Simulation and Management Simulation

Contract Simulation and Management Simulation
 
Memo: Chief Executive of Span Corporation
 
Re: C-S Negotiations
 
Situational Overview
 
At present, Span is in negotiations with the C-S Corporation to determine the particulars of a joint venture between the two organizations. Negotiations have come to an impasse because of what is perceived as C-S’s stalling techniques, designed to extract further concessions from Span. C-S has been continually changing the originally defined requirements of the negotiations.
 
What should Span do when C-S continually adds to or changes their original contract requirements?
 
One way to cope with this frustrating situation, however, is to view this volatile period of negotiations as a potential plus rather than a minus. Now, it is time for both organizations to take stock, then to come back to the negotiating table with more clearly defined objectives, deploying the current conflict in a positive fashion, with an eye to achieving a final and collective agreement. To make such a change in negotiation strategy constructive, the two organizations must first conduct some mutual brainstorming, as all actors come together to list of all the potential requirements the two organizations might consider within the objectives of the contract, without criticizing or dismissing any options. Then, the organizations must define their mutual objectives for each contractual phase or issue, and anticipate and define the best possible outcome if both cooperate according to certain terms.
 
Thus, changes in contract requirements over the course of a non-adversarial negotiation are not necessary ‘bad,’ provided they meet a mutual objective. Thus, rather than engage in a concessionary strategy, it is better to view the possibilities within a negotiation in a ‘win win’ fashion, and an opportunity to clarify the original terms of the contract, rather than for one party to dominate the other.
 
Although immediate organizational objectives may differ, ideally, such an integrative negotiating strategy generates innovative potential future outcomes for both organizations’ collective desires. Changes in original contract requirements must meet a single and clear objective. One should not view two organizations as polar opposites in their needs and interests. Thus, the organizations must take stock right now, and collectively decide what is the primary, singular aim of the contract. Why did C-S and Span wish to enter into the talks in the first place?
 
How do you think the results of the negotiation might differ if both sides followed a positional bargaining strategy vs. one that is interest-based?
 
Positional bargaining in contrast to the ‘win-win’ or integrative strategy advocated above, views organizational interests as incompatible. One organization has its goals, and concedes its objectives only to achieve other objectives, haggling over contract requirements much as one might a price. This is why C-S set its original aims where it did, so it would have more to give up. It took a haggling, or an adversarial or ‘us vs. them’ approach, where one negotiating party sets its personal aims high and assumes it will have to give something up to the other negotiating party. This assumes that two organizations never have harmonious interests, and exist only as self-interested adversaries with accidentally meeting objectives over the course of the negotiating process. But both organizations can have similar desires, concerns, and fears about the future and the aims of the contract.
 
What role, if any, should future business opportunities play in Span’s decisions to enforce the original provisions of this contract? Why?
 
The future is what Span should focus on, not past notions of fairness or fears of looking weak. Span wishes to return to the original provisions, else C-S view Span as weak and demand even more concessions. However, taking such a hard-line approach will not necessarily benefit Span in the long-term. The organizational objective of both C-S and Span is not to win the negotiation, but to win at finding future business opportunities for both organizations. This was the original intent of the contract, even if the originally stated provisions have changed given the positioning of the two actors over the course of the negotiation process.
 
What additional strategy (or variation on a given strategy) would you recommend to solve the challenge given?
 
Integrative and Distributive bargaining strategies are the two classical ways of approaching negotiations. For the reasons outlined above, integrative bargaining is the ideal strategy to pursue in an organizational negotiation where two business actors are seeking to benefit their organizations’ collective long-term futures. However, additional facets to the integrative strategy could also be considered and deployed during the negotiations such as active listening. This is another way to better understand the final objective, yet to not ignore conflict even in a ‘win win’ approach to negotiating. In active listening, the parties do not argue, rather one party states its case. The other negotiating party states its case. Both entities speak without interruption, and then the points of difference are identified. Then a third and disinterested facilitator asks, ‘how do the two organizations emerge from these different positions? ‘ This allows conflict to be expressed aloud, without actually creating an adversarial style of argumentation that proves unfruitful to both parties.
 
JUST FILL IN THE BLANKS AS YOU SEE FIT

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