Negotiation And Culture Differences Exercise Term Paper

Length: 10 pages Sources: 5 Subject: History - Asian Type: Term Paper Paper: #36100762 Related Topics: Business Negotiation, Western Culture, Negotiating, Dell Computers
Excerpt from Term Paper :



Negotiating the deal was surprisingly easy due to a combination of an apparently modest goal on my part and more negotiating ability on the part of the seller than was anticipated. While the seller implicitly made the initial offer in the publication of the ad, I ultimately initiated negotiation by stating that I had seen the ad and was wondering if the seller would take $18,000 for me to take it off his hands, stating that I knew the 2011 Toyota Prius had been expanded into a whole line of different vehicles and heavily upgraded, thus rendering the 2010 model somewhat more out-of-date than a year-old model usually would be. I did not expect the seller to accept this initial offer, but I was hoping to catch him in a consistency trap. Shell (2006) notes that "skilled negotiators know about the human need to appear consistent and try to use it as often as they can" by utilizing consistency traps, whose goal "is to precommit you to a seemingly innocuous standard and then confront you with the logical implications of the standard in a particular case -- implications that actually turn out to run against your interests" (Shell, 2006, p. 46). I was trying to get him to agree with my claim that the 2011 models rendered the 2010 Prius less desirable, and thus harder to sell, so that I would be able to use this shared assumption in order to justify selling the car for something closer to my ideal price. However, the seller effectively countered by noting that he was selling it for very near the retail book price and claimed that while my statement might be true, selling the car for $24,000 already represented his efforts at unloading it quickly. Thus, while my consistency trap succeeded in delineating and formulating the shared belief on which my offers could play, it was not quite as effective as I had hoped.

However, I was still able to utilize the shared assumption by claiming that the seller could not genuinely be planning on selling it for $24,000, as that was actually slightly above the retail book price, meaning that he was expecting to get full price for a used car rendered rapidly out of date by the dramatically advanced newer model. I then suggested that I could pay $20,000 for it considering that there was only one previous owner and it had relatively low mileage, but he claimed that this was reason enough to pay the full price. Although I was willing to pay more, I needed the seller to make a lower offer or else I would have been negotiating with myself. Thus, I claimed that I likely could not go above $20,000, and that it would simply be better to save the money for buying a 2011 model at a later date. Suggesting the presence of a negative bargaining zone seemed to work, because the seller then offered to go as low as $23,500. I responded that that was still too much, claiming that $22,500 was the sum total of what I had saved after selling my last car. Finally, the seller offered $23,000 and the option to receive partial financing by the car dealership so that I could purchase the car and pay off the full price over time, thus freeing me from having to spend "all" of the supposed $22,500 that I had. As $23,000 was the highest I was willing to go, and the financing option further lessened...

...

By deploying it after making an initial offer, and thus presenting it as an argument in favor of my author, I think I helped mark it as a trap, and the seller responded accordingly. Therefore, even though my statement regarding the 2011 models did ultimately set the parameters of the discussion, I believe it would have been more effective to first pretend I was only interested in a 2011 model as a means of implicitly setting my consistency trap without unduly warning the seller. That way, I would have been able to suggest that the price of the 2010 car was too high without making it clear that I was planning on buying it myself, and the seller would have been more likely to agree with someone making that claim as an offhand comment rather than as part of a concerted negotiating attempt.

Because consistency traps rely on getting someone to agree with a standard without realizing the implications of that standard, starting with the consistency trap and then making an offer would have increased the likelihood that the seller would agree with my claim without qualification or hesitation, such that when I did make my initial offer I could use the seller's desire to appear consistent and the social discomfort which arises from admitting a previous misstatement in order to make my fairly low offer seem more reasonable. Beginning with an offer and then clumsily deploying the consistency trap not only allowed the seller to avoid the trap, but also made it possible for him to refrain from making any offers or counteroffers, thus forcing me to close the gap between what we were willing to pay and receive from my end, driving the final price upwards.

The final deal was acceptable to both parties, because I got the car for a price within my acceptable range and the seller was able to sell the car. Furthermore, while the financing allowed me to retain more money upfront, it also ensured that I would maintain contact with the dealership even after my purchase, thus increasing the likelihood that I would go there for service or even to buy an eventual replacement. While there are some details of my negotiating tactics that I would do differently or at different times in the negotiating process in order to receive a price more in line with my $20,000 goal, in the end the negotiation was successful for both of us.

Negotiation Exercise: Settlement Form

Date of Negotiation: ____10/16/2011

Seller:

Student number:

Target prize: ____$24,999

Buyer: ____Author

Student number:

Target prize:____$20,000

Who made the first offer? ____Seller

Did you reach an agreement?

Yes

If yes, what were the terms?

Seller

Buyer

Prize:

$23,000

2010 Toyota Prius Hatchback with financing

References

Iansiti, M., & Levien, R. (2004). Strategy as ecology. Harvard Business Review, (March), 68-78.

Kanter, R. (1994). Collaborative advantage.Harvard Business Review,…

Sources Used in Documents:

References

Iansiti, M., & Levien, R. (2004). Strategy as ecology. Harvard Business Review, (March), 68-78.

Kanter, R. (1994). Collaborative advantage.Harvard Business Review, (July/August), 96-108.

Magretta, J. (1998). The power of virtual integration: an interview with dell computer's michael dell. Harvard Business Review, (March/April), 73-84.

Shell, G. (2006). Bargaining for advantage: negotiation strategies for reasonable people. New York: Penguin Books.


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