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Negotiation Strategies in Real Estate and Events

This document contains summaries of 3 simulations related to negotiations. Simulation 1 involves negotiating the sale of land between a seller and buyer. The seller's BATNA is £10,000 and they want £35,000, eventually agreeing to £12,000. Simulation 2 involves negotiating a performance slot for a singer at a music festival, aiming for a win-win outcome. Simulation 3 involves negotiating a labor dispute as a general secretary. References are provided for each simulation.
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0% found this document useful (0 votes)
15 views10 pages

Negotiation Strategies in Real Estate and Events

This document contains summaries of 3 simulations related to negotiations. Simulation 1 involves negotiating the sale of land between a seller and buyer. The seller's BATNA is £10,000 and they want £35,000, eventually agreeing to £12,000. Simulation 2 involves negotiating a performance slot for a singer at a music festival, aiming for a win-win outcome. Simulation 3 involves negotiating a labor dispute as a general secretary. References are provided for each simulation.
Copyright
© All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as DOCX, PDF, TXT or read online on Scribd

Table of Contents

Simulation 1: Park Row negotiation – Seller..................................................................................................

References of Simulation 1:............................................................................................................................

Simulation 2: Glastonbury Festival – Sai Agent.............................................................................................

References of Simulation 2:............................................................................................................................

Simulation 3: The Rail Dispute - General Secretary.......................................................................................

References of Simulation 3:............................................................................................................................

Appendix: Host of Simulation3 ......................................................................................................................

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Simulation 1: Park Row negotiation – Seller
In this simulation, land transactions are the main topic of this distributive negotiation situation.
Specifically, I decided to sell the house and land because I moved to Edinburgh, Scotland. I bought that
land for £35,000 10 years ago, however, the buyer of the house was not interested in my land, so they
offered to buy the land back for £10,000. I will inquire about the need to buy land from my neighbor
who has property adjacent to the land to sell the land at a higher price before I move to Scotland
because home buyers bid for the land at a fraction of the price three amount of money I bought the land
10 years ago.

Distributive negotiation is a type of negotiation in which parties conflict and compete directly with each
other to achieve the highest benefits and values for themselves. That means only one side profits from
the other (Vo, et al., 2007). Specifically, in this situation, we both have a "claim value". In other words,
the land buyer and I are fixed on the amount of land to sell and the budget but we both try to get as
much value as possible for each of us without regard to the other person's needs (Vo, et al., 2007).

In negotiations, BATNA, the best alternative to a negotiated agreement, has proven to be a useful tool
(Sebenius, 2017). Furthermore, BATNA is also a value to evaluate the results of negotiations. Those
who dominate the negotiation are often the ones with a more attractive BATNA. Therefore, the person
with a stronger BATNA will gain more benefits, power, and fewer concessions during the negotiation
process (Kim & Fragale, 2005). However, negotiators often accept negotiation outcomes closer to their
BATNA than their aspirational value (Thompson & Leonardelli, 2004). In this simulation, my BATNA
value is £10,000. At the same time, my resistance point is also £10,000. That means if the buyer offers
less than £10,000, I will not sell the land because that price is too low compared to the amount I paid 10
years ago. However, 10 years ago I bought the land for £35,000 so my target point is £35,000.

During the negotiation process, I applied the direct assessment strategy to conduct negotiations. One
party predicts the level and needs of the other side and predicts the negotiation results by listening to
the other side's proposals and viewpoints. This method is called direct assessment (Movius, 2008). With
a moderate stance, I approached the neighbor by inviting her to afternoon tea to get to know her and
greet her like a friend. During the conversation, I used bogey to nonchalantly mention the need to sell
my land. In other words, the other party may be distracted by other stories, a small offer may be
considered less important and less likely to be detected by the other party's intentions (Kuppa, 2018).
This helped me avoid being confirmed by neighbors that selling land was an important and urgent
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matter as well as avoiding being forced to sell land at a cheap price. After accidentally mentioning the
need to sell the land, I probed the neighbor's need to buy the land to capture some necessary
information such as the neighbor's target point, resistance point about the land, and her BATNA. In
negotiations, communication is the key to grasping information, needs, and demands of the other side
as well as predicting negotiation results from information obtained from the other side and devising
strategies in negotiations (Linda L & Michael E, 1992). She said she wanted to buy that land for
£15,000, however, I did not agree with that price. I met her the next day at her house to continue our
negotiations. The next day, when we walked into her garden, I used intimidation tactics to persuade her
to buy the land. I expressed my regret at having to sell this land because this land will sell for a higher
price in the future. Unfortunately, I revealed that I had to move to Scotland shortly, so my position in
the negotiations was weaker than my neighbor's. On the other hand, she used aggressive behavior to
pressure the price and forced me to sell the land for £9,000 with egoism. This price was too low
compared to the amount I spent to buy the land, so there was a conflict between us. I affirmed that I will
not sell this land for less than £10,000. Furthermore, to regain my negotiating position, I made the point
that her net worth would increase greatly by purchasing this land. Finally, the neighbor used nibble to
force me to agree to negotiate. Because they knew the other side wanted to carry out the transaction in
the shortest possible time and were tired after long negotiations, they made an overwhelming offer
along with other requirements (Kuppa, 2018). She made an offer to buy the land for a final price of
£12,000 with a competitive stance. Since I was in a weaker position in the negotiations, I was forced to
sell the land for £12,000 with divine command ethics. This sale price is £2,000 higher than my
BATNA.

In the end, the final transaction price of my land was £12,000. This price was higher than my BATNA
of £2,000 but well below my target point. I will not disclose my information to avoid being captured by
the other side to pressure the price and lose my position during the negotiation process. At the same
time, I will clearly express my views right from the beginning of negotiations and have an
uncompromising and conciliatory attitude so that the other party does not dominate and pressure the
price.

References of Simulation 1:

Kim, P. H. & Fragale, A. R., 2005. Choosing the Path to Bargaining Power: An Empirical Comparison
of BATNAs and Contributions in Negotiation. Journal of Applied Psychology, 90(2), p. 373.

Kuppa, R., 2018. Negotiating a Contract. PM World Journal, 7(10), pp. 1-11.

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Linda L, P. & Michael E, R., 1992. Communication and Negotiation. 20 ed. s.l.:Sage.

Movius, H., 2008. The effectiveness of negotiation training. Negotiation Journal, 24(4), pp. 509-531.

Sebenius, J. K., 2017. BATNAs in Negotiation: Common Errors and Three Kinds of “No”. Negotiation
Journal 33, 33(2), pp. 89-99.

Thompson, L. & Leonardelli, G. J., 2004. The big bang: The evolution of negotiation research.
Academy of Management Executive, 18(3), pp. 113-117.

Vo, Q. B., Lin, P. & Cavedon, L., 2007. Intelligent Decision Technologies. Negotiating flexible
agreements by combining distributive and integrative negotiation, 1(1-2), pp. 33-47.

Simulation 2: Glastonbury Festival – Sai Agent


In this simulation, as singer Sai's artist manager, I'm tasked with helping Sai get a performance slot at
the Glasstonbury Music Festival. Additionally, I need to ensure Sai gets maximum benefit from that
music festival. Sai's performance fee reservation point is £142,000. I need to negotiate with the festival
organizers so that Sai can perform on the main stage, have a private dressing room, and participate in
the festival's Meet & Greet fans and Social media campaigns so that Sai can reach many audiences, and
promote Sai's image. The purpose of this negotiation is for Sai to be able to perform at the Glasstonbury
Music Festival with certain benefits in a win-win manner for both Sai and the Glasstonbury Music
Festival.

Integrative negotiation is a win-win negotiation in which both sides focus on increasing common
benefits before dividing each side's benefits. In other words, integrative negotiation has a positive effect
and brings more long-term effects than distributive negotiation (Benetti, et al., 2021). In this simulation,
I try to negotiate with the organizers in a constructive spirit and put the interests of both sides as the
most important issue. Creating mutually beneficial outcomes is called “value creation” (Craver, 2011).
Mutual gain is the main concept in this simulation, both parties benefit based on a high level of trust
through transparency and respect (Birnbaum, 1985). In particular, subjective interest emphasizes the
desires and needs of individuals regarding an issue (Lu, et al., 2016), while relational interest focuses
on the desires and needs of both parties to ensure and maintain the relationship (Arvanitis &
Karampatzos, 2013). That means, my subjective interests around issues include performance fee, stage,
Dressing Room and other perks, Meet & Greet fans, and social media campaigns in the spirit of
building and placing the interests of both parties is the most important issue and so is the festival

4
organizing committee. Therefore, our relational interest is to try to avoid competition, and conflict and
give in to each other for mutual benefit.

At the beginning of the negotiation, I tried to apply the expand the pie strategy to work with the festival
organizers to develop mutually beneficial agreements from a moderate stance with virtue ethics. The
strategy of expanding the pie offers common solutions that benefit both parties without causing damage
to the other party in the spirit of construction, creativity, and compromise, so cooperative and effective
agreements are often achieved (Basadur, et al., 2000). I proposed that Sai participate in social media
campaigns with the festival organizers to communicate Sai's image to more people, thereby increasing
Sai's influence and recognition level. At the same time, because Sai is a rising artist, participating in the
festival's social media campaigns will attract more people to pay attention and know more about the
festival. I also proposed to let Sai participate in Meet & Greets fans backstage to increase Sai's
recognition level in the media and build a positive image in the fan community with deontological
ethics. The festival organizers and I also think that this is beneficial for their festival because Sai's
presence in Meet & Greet fans will help them increase media interactions and attract more attention,
while also turning up the heat of the festival to a higher level. By contrast, when I requested a private
room for artist Sai to ensure her privacy and safety, the organizers rejected my request with a
competitive stance. They assumed that many celebrities were performing at the festival so they would
prioritize private dressing rooms for those famous artists; furthermore, Sai is a rising artist, and if she
were given her dressing room, she would likely be envied and gossiped about by other rising artists.
This will hurt Sai's spirit and image. After pondering for a short period, I felt that the organizers' point
of view was correct. At the same time, sharing a dressing room with other artists is not a bad thing
because it can help Sai interact, get acquainted with many other artists, and expand her relationships. I
used the logroll strategy to negotiate the cost of Sai's performance at the festival. In negotiations, the
logroll strategy is used when the parties agree to trade off their issues. In other words, one party agrees
to give up issues that are less important to them but important to the other party, and the other party
receives important benefits from the other party (Qu & Cheung, 2012). My target point for the
performance fee was £167,000 along with the request that Sai perform on the main stage to be closest to
the audience. On the other hand, with a competitive stance, the organizers did not agree with my price
and request. They took the view that the main stage is for big stars to perform, Sai is just a rising artist
so the requirement to perform on the main stage is unfair as well as Sai's performance fee is too high.
For Sai to perform on the main stage, I reduced her performance fee to £142,000 with a moderate
stance to give Sai the best possible performance at this festival with divine command ethics.

5
The final agreement in the negotiations we reached was for Sai's performance fee of £142,000 as well
as performing on the main stage, participating in Meet & Greets fan and social media campaigns, and
sharing dressing rooms with other artists. The results of this negotiation bring benefits to both sides,
this is a win-win negotiation. I need to take a more competitive stance to get more benefits for my artist.

References of Simulation 2:

Arvanitis, A. & Karampatzos, A., 2013. Negotiation as an intersubjective process: Creating and
validating claim rights. Philosophical Psychology, 26(1), pp. 89-108.

Basadur, M., Pringle, P., Speranzini, G. & Bacot, M., 2000. Collaborative problem solving through
creativity in problem definition: Expanding the pie. Creativity and Innovation Management, 9(1), pp.
54-76.

Benetti, S., Ogliastri, E. & Caputo, A., 2021. Distributive/integrative negotiation strategies in cross-
cultural contexts: a comparative study of the USA and Italy. Journal of Management & Organization,
27(4), p. 786–808.

Birnbaum, R., 1985. A Guide to Mutual Gains Bargaining. Cooperation in Academic Negotiations.

Craver, C. B., 2011. The Inherent Tension Between Value Creation and Value Claiming During
Bargaining Interactions. GW Law Faculty Publications & Other Works, Issue 12, p. 1.

Lu, W., Zhang, L. & Fu, Y., 2016. Improving Subjective Value in Construction Claim Negotiations:
Role of Behavioral Primers. Journal of Management in Engineering, 32(4), p. 05016005.

Qu, Y. & Cheung, S. O., 2012. Logrolling “win–win” settlement in construction dispute mediation.
Automation in Construction, Issue 24, pp. 61-71.

Simulation 3: The Rail Dispute - General Secretary


I serve as general secretary of the Railway Union, representing railway workers in this simulation. The
government is withdrawing financial support after the Covid-19 epidemic and reforming the railway
industry by cutting staff and reducing wages and conditions of workers. This puts pressure on and
negative effects on railway workers. Therefore, I negotiated with the Rail Company Consortium
representative on behalf of the union members. Our purpose is to negotiate with the railway company to
resolve the dispute and protect the rights of railway workers. I was forced to take “action short of a

6
strike” and “strike action” to put pressure on the railway company if an agreement could not be
reached.

Integrative negotiation of a dispute can last a long time during the dispute resolution process, focusing
on resolving disagreements between the parties to come up with a final solution that meets the interests
of the parties (Zhang, et al., 2016). In this simulation, I negotiate with the Rail Company Consortium
representative to ensure the rights of railway workers on a moderate stance to come up with suitable
measures for both the Railway Union and the Railway Consortium to ensure common benefits for each
other. During negotiations, both parties bring up their own needs, so this causes conflict when each
other's needs cannot be met. "Dual concern" occurs when parties cooperate to resolve disputes and find
solutions that benefit both parties (Sorenson, et al., 1999). As general secretary of the Railway Union, I
represent railway workers in expressing their needs, that is, subjective interests (Cohen, 2008). I want to
protect jobs for workers, limit salary cuts, and protect workers' benefits. Besides, avoiding strikes and
mutual disputes is the common goal and interest of the railway union and the railway company, that is,
relational interest (Lewicki & Polin, 2013). The worst alternative to a negotiated agreement or WATNA
occurs when one negotiating party does not achieve the desired result, causing the negotiation to fail
and preventing the parties from reaching a final agreement (Eunson, 2012). In this simulation, WATNA
appears when I fail to negotiate with the railway company. In other words, when negotiations cannot be
reached, the railway union will go on strike.

At the beginning of the negotiation, I used a logroll strategy with a moderate stance. I negotiated with a
representative of the railway consortium to reduce the number of workers by 5%. In contrast, the
representative did not agree with the competitive stance, they wanted to reduce staff by 8% to reduce
salary costs. For the following terms to be negotiated smoothly, I agreed to the agreement to reduce
staff by 8% with the requirement that the Railway Consortium reduce the number of employees using
the staff attrition solution. Regarding the issue of cutting the wages of workers, I asked the Railway
Consortium to increase wages by 16% for workers because they have to work more after the railway
company reduced workers by 8% and compensated for living costs. On the contrary, the opponent did
not agree to my request with an aggressive stance because they thought my request for a 16% increase
was too high given their resistance point of 3%, so the representative of the Railway Consortium
proposed a 2% salary increase with egoism. An aggressive stance expresses one's needs decisively but
does not take the other parties' needs seriously, causing distrust and negative effects on the relationship
(Cooper & Stump, 2015). This means that the proposal for a 2% salary increase was too low compared
to the original proposal of the Railway Consortium and the subjective interests of the Railway Union,

7
so I was forced to use WATNA as the railway union to implement the strike. In other words, the
relational interests of both parties were not fulfilled and were broken (Verma, 2022). Strike activities
would affect the country's business and circulation; thus, with utilitarianism, representatives of the
Railway Consortium gave in with a proposal to increase wages by 9% for workers with a moderate
stance. This proposal was positive and is a positive signal for this negotiation. Not only did I negotiate
about jobs and wages for workers, but I also protected their working conditions, I asked to keep
voluntary Sunday off and increase x2.0 hourly salary on Sundays to improve wages for workers. With
virtue ethics, the representative of the Railway Consortium agreed with my request; at the same time,
they also requested that the right to paid leave for workers be reduced to 25 days. With a moderate
stance and a desire for positive results in the negotiation, I accepted this request. Regarding the on-call
premium, the Railway Consortium representative and I agreed on a fee ranging from £80 to £99.

Finally, the result of the negotiation was an 8% reduction in the number of employees, a reduction in
the number of employees by staff attrition, a 9% increase in wages for workers, a voluntary Sunday day
off, and an x2.0 increase in salary on Sunday overtime, reduced paid leave to 25 days as well as the on-
call premium from £80 to £99. Although there were conflicts during the negotiation process and the use
of my WATNA, we aimed to build common interests for both parties, so we resolved conflicts as
reasonably and quickly as possible. The Railway Union and the Railway Consortium had achieved
benefits for both sides, this was a win-win negotiation. I need to take a tougher stance to bring more
benefits to the workers in the Railway Union.

References of Simulation 3:

Cohen, A., 2008. Negotiation, Meet New Governance: Interests, Skills, and Selves. Law & Social
Inquiry, 33(2), pp. 501-562.

Cooper, P. A. D. & Stump, P. R. L., 2015. Negotiating Stances Used with Minority Suppliers: A
Research Note. Atlantic Marketing Journal, 4(1), p. 2.

Eunson, B., 2012. Conflict management. s.l.: John Wiley & Sons.

Lewicki, R. J. & Polin, B., 2013. Trust and negotiation. In: Handbook of research on negotiation.
s.l.:Edward Elgar , pp. 161-190.

Sorenson, R., Morse, E. & Savage, G., 1999. A test of the motivations underlying choice of conflict
strategies in the dual‐concern model. International journal of conflict management, 10(1), pp. 25-44.

8
Verma, A., 2022. Negotiation for human beings: what, why and how?. Revista Brasileira de
Alternative Dispute Resolution-Brazilian Journal of Alternative Dispute Resolution-RBADR, 4(8), pp.
17-37.

Zhang, S. B., Fu, Y. F., Ying Gao, P. & Zheng, X. D., 2016. Influence of Trust and Contract on Dispute
Negotiation Behavioral Strategy in Construction Subcontracting. Journal of Management in Engineering,
32(4), p. 04016001.

Appendix: Host of Simulation3


1. Topic:

Integrative negotiation: The Rail Dispute

2. Simulation session summary:

Our team includes 4 people: Dinh Tran Khanh Trang (secretary), Nguyen Vu Thuy Duong (Cheerleader
1), Pham Nhat Dan (Cameraman), and Do Phuong Thao (Cheerleader 2). During the simulation, Khanh
Trang followed and recorded the process, and Nhat Dan filmed the simulation 3. Initially, Thuy Duong
and Phuong Thao introduced the topic of Simulation 3. Then, Khanh Trang and Phuong Thao divided
the class members into teams, specifically 3 teams. Next, we gave 20 minutes for class members to read
simulation 3. At the end of 20 minutes, Thuy Duong and Phuong Thao made a small game for class
members to better understand the background and situation of Simulation 3 before entering the
discussion process. Thuy Duong summarized the background and situation of simulation 3 again to help
class members avoid confusion. Next was to carry out simulation discussion activity 3. We encouraged
each group to move to different locations around the school area to discuss for 40 minutes. This created
a comfortable space for groups to discuss and avoids plagiarism between groups. Finally, the groups
returned to the classroom and presented the results of their group discussions. The group with the
highest score in Simulation 3 received a small gift prepared by our team.

3. Results of simulation:

The two teams had a win-win negotiation result with points of 36 and 33 respectively. The other team
had a win-lose negotiation result with a score of -5.

4. Limitations:

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- The team division process was still messy. Therefore, it is necessary to arrange the team before the
simulation session to avoid wasting time.

- Simulation discussion time was limited. Therefore, it is necessary to spend a lot of time for teams to
discuss and shorten the time of other activities while still ensuring adequate information is conveyed.

5. Students absent:

- Ngo Gia Vy

- Nguyen Ngoc Vu Dai

6. Record video:

[Link]

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