2 Negotiations: Author Hal Stack for Chelst and Canbolat
party’s understanding of your interests and priorities, but typically the parties will have different views of what is fair. Sometimes dealing with the other
party’s objections and summarizing both the agreements and the concessions the parties have made will convince the other party that it is time to end the
“negotiation dance” and agree to a settlement. Packaging the issues with their beneficial trades will often bring the negotiations to closure. Some negotiators
find it helpful to present equivalent packages and let the other party select the one it prefers. A common approach, of course, is to “split the difference.”
When the parties cannot reach an agreement, there may be interventions available such as mediation or arbitration. Mediators can help the parties put
together an agreement, but the parties decide whether to accept it. Arbitration differs from mediation in that the arbitrator determines the final outcome. Both
options, however, have their limits. Mediators may focus on getting an agreement, any agreement, to the detriment of one or both parties’ best interests.
Arbitrators are often accused of simply spitting the difference between the parties’ final offers.
While the exercise of power may be used to bring the negotiations to closure, it is not without cost. By choosing to use power, you have increased the
probability that the other side will use power as well. The result may well be a damaged relationship, increased legal fees, delays, loss of market share, or
worse. Power should be exercised strategically: you should avoid idle bluffs and target high-priority interests. At the same time, your purpose in exercising power
is to bring the other party back to the table and negotiate an agreement. Thus, you must leave the other party a way back to the table that enables him or her to
save face. Your best source of power, of course, is a strong BATNA, which will enable you to walk away from the negotiations as needed.
Even after the parties reach agreement, there may be opportunities for increasing the value of the agreement through the use of a “post-settlement
settlement.” The concept of the post-settlement was first developed by Howard Raiffa 2003 as a way to optimize negotiation outcomes. After an initial
agreement has been reached, the parties agree to reopen the negotiations in search of an agreement that is better for both sides. If a better agreement is
found, then both sides share in the gain. If a better agreement acceptable to both sides is not found, then the parties stay with the original agreement. Under the
terms of the post-settlement settlement, the parties can only improve their respective outcomes by improving the other party’s outcomes. Seventy-five
percent of the time when negotiators use post-settlement settlement, they achieve a better agreement Thompson 2008.
15.5 Negotiating a Deal
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Negotiations: Author Hal Stack for Chelst and Canbolat The dynamics of this negotiation process can be seen more concretely in the
case below. This case involves negotiations between a catcher and a baseball team. Consider the following information in Tables 15-6 and 15-7 Barrett 1989.
Table 15-6: Catcher’s and team’s interests and goals
Catcher Baseball team
The catcher, near retirement, is a free agent who has recovered from a knee
injury.
It is two years since he has played after a failed negotiation with another team
last year.
The catcher is interested in playing in his home town as a first-stringer for a
contender.
The catcher’s lifetime batting average is .285.
The catcher is interested in a career as a broadcaster and possibly in the team’s
front office after his retirement.
Pay is not as important to him as a broadcasting career when he retires
from playing. His pay two years ago was 2.3 million.
The team’s starting catcher is out for the year due to injury.
The team is interested in this catcher but is concerned about his knees.
The team needs an experienced catcher who knows the batters and is a steady
hitter.
The team sees itself as a contender and hopes to fill the stadium and increase
revenue.
The average pay for a first-string catcher is 1.9 million; the team’s
current catcher receives 1.7 million.
Salary negotiations with other players on the team begin next spring.
Goal . A three-year contract with an
opportunity to be the starting catcher and to move into broadcasting after
retirement.
Goal
. Secure an experienced catcher capable of helping the team reach the
playoffs.
Table 15-7: Summary of interests and BATNA
Catcher Baseball team
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Negotiations: Author Hal Stack for Chelst and Canbolat Salary
Length of contract 3 years Broadcasting opportunity
Starting as catcher Playing for a contender
Playing in hometown Salary
Length of contract 1 year Fitness to play
Performance level Increased revenue
Precedent Catcher who knows the batters
BATNA . Pursue catching or a
broadcasting opportunity elsewhere. ReservationTarget Price: 1.92.5
million
BATNA . Sign a younger and less
experienced catcher. ReservationTarget Price: 2.31.7
million
These negotiations involve multiple issues that the parties value differently. Consequently, a range of solutions may create value and leave both
parties better off than striking no deal at all. In anticipating the team’s likely concern about the fitness of the catcher’s knees, the catcher’s agent would stress
the catcher’s recovery and conditioning.
In anticipating the return of their incumbent catcher, now injured, the team may be interested in signing the veteran catcher to a one-year contract, but
it may also recognize the value of having an experienced hand behind the plate in the event the injured player does not fully recover. Listening carefully to his
other interest in developing a broadcasting career in his hometown, the team might consider a creative contract that could ease him into doing color
commentary on television. Working with the catcher to sponsor baseball camps and set up speaking engagements in the community will enhance the catcher’s
visibility and could help to build attendance at games.
Uncertainty about the catcher’s continued fitness to play might be addressed through a contingency that links the catcher’s pay with variables such
as batting average and games played. Discussion over salary could lead to a contingent contract that ties total salary to team performance measures, such as
reaching the playoffs and attendance. A contingent contact with a base salary 1.7 million and contingencies that reach 2.6 million might be acceptable to the
catcher while at the same time allowing the team to avoid a precedent that would influence future negotiations with other players. Similarly, the team might pay
the catcher a separate salary for his work as a broadcaster while keeping his salary as a player competitive with the rest of the team. The salary may not be as
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Negotiations: Author Hal Stack for Chelst and Canbolat important to the catcher as the opportunity to get back to his hometown and
launch his career in broadcasting. Nevertheless, there remains the intangible issue of self-image and concern that the salary be appropriate to his status as an
experienced, nationally known player.
15.6 Negotiating a Dispute
