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You are the Manager of Live* Art Galleries. Prepare a negotiation by filling out the form provided.
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NEGOTIATE PLANNING LIVE8 (N-4)
1.
What are your interests? (rank in order of importance) You are not required to use every
line.
(a)
(b)
(c)
(d)
2.
What is your best prediction of the interests of the other party? (rank in order of
importance) You are not required to use every line.
(a)
(b)
(c)
(d)
3.
If you do not reach agreement in negotiation, what will you do? Analyze the benefits and
drawbacks from this alternative. (You should use this to help you determine when to stay or
leave the negotiation). The reading refers to this concept as a BATNA analysis.
4.
If you do not reach agreement in negotiation, what do you think is the other side will do?
Analyze the benefits and drawbacks from this alternative. (You should use this to help you
assess how much leverage the other side has in the negotiation). The reading refers to this
concept as a BATNA analysis.
5.
List some options which would satisfy your interests (try to identify options you think
would be particularly attractive to the other side as well): you are not required to use every
line.
(a)
(b)
(c)
(d)
(e)
(f)
(g)
6.
Identify what your opening offer/demand will be and why:
7.
Identify what you think the other side’s opening offer/demand will be:
8. What is your goal (or aspiration) for this negotiation and what is your specific strategy to
accomplish this (for this specific negotiation)? Why are you using this strategy for this
negotiation? (Remember, a strategy is a series of steps you will take to achieve your goal. It is
not merely being cooperative or competitive.)
Additional items to consider in your preparation (you do not need to provide written answers to
these questions):
• What information do you want to offer to the other party during negotiation?
• What information do you need from the other party?
• What other information should you keep in mind as you go into this negotiation?
• How can you prepare yourself mentally for this negotiation?
• How will you handle the beginning of the negotiation, what you will do to counter highly
positional or aggressive negotiating behavior, at what point would you be willing to walk
away from the negotiation? Where do you have power? Where does the other side have
power? How can you change the relative power dynamic to your benefit?
• What do you consider an acceptable settlement range?
• What are you willing to pay or give to get the deal done? What do you think the other
party is willing to pay or give to get the deal done? What is your “walk-away price” — the
point at which you are indifferent to whether a negotiation reaches agreement or ends in
an impasse? (Remember to take into account the present value of deal; your/your client’s
level of risk aversion; additional costs associated with pursuing something other than a
negotiated settlement agreement).
Live8
(authored by Noam Ebner)
Instructions for the Manager of Live8 Art Galleries
June 2005. As the summer heat begins to take its toll on Istanbul, many of the city’s inhabitants
desert it in favor of beach resorts. This does not bother you in the least, as it makes room for
the incoming flood of tourists. Two million tourists visit the city yearly, 70% of them during
the summer months. A large number of these find themselves, at some point during their visit,
visiting one of your shops – the Live8 Art Galleries, a chain of art galleries located across
Turkey.
After graduating from business school in 1995, you directed an NGO promoting civic
involvement and urban renewal in Istanbul’s poorest areas. The work was hard and your efforts
were always underappreciated, but every little bit of change you were able to bring about made
it all seem worthwhile.
In August 1999, your world – along with that of thousands of others’ – changed. The
earthquake that destroyed huge sections of Istanbul, killing thousands of people and leaving
thousands of others homeless affected you deeply. Although you and your family made it
through the quake safely, the catastrophic event that scarred the country left its mark on you as
well. The period after the earthquake seems like a blur to you now; it seems as if you never
slept, working first in rescue efforts and then in reconstruction. Besides the physical stress your
job entailed, the period was emotionally draining as well. You felt a great deal of anger towards
the government for not foreseeing and preparing for the catastrophe, as well as for hampering
reconstruction efforts through inefficient bureaucracy. This anger was surpassed by the anger
you felt towards the rich countries of the West – the U.S. and Great Britain particularly. While
these countries promised aid in various forms, you feel that whatever materialized was always
too little and too late. In many situations, your calls to Western government agencies and donor
NGO’s ended with them making promises that they did not keep. Projects you planned and
prepared for had to be abandoned, leaving you to face the angry and disappointed people who
had depended on you. After six months, you were completely burned out. Frustrated by the
whole notion of dependency on aid, you decided that people have to work their own way out
of tragedy.
Sooner than you would have thought, you identified an opportunity to put this belief into
practice. An old school friend, now a sculptor, told you about an idea he and some friends were
considering. A group of seven artists, each of whom had lost someone or something – a friend,
a relative, a house or an art studio – in the earthquake, were considering opening a joint art
gallery. The artistic themes would be those of survival, finding hope in the depths of tragedy,
self-dependency and human courage. The artists would individually and collaboratively create
artwork in each of their respective media – painting, sculpting and metalworking – and share
all profits equally.
Concerned about the venture, and realizing that none of the seven had any business experience
or know-how, your friend asked you to meet with them, hear their plans and perhaps give them
a few tips. After one meeting with the group (and a couple of sleepless nights), you made them
an offer: you would join the group as an eighth, equal partner, practicing the arts of
management: marketing, finance, logistics etc. The group agreed willingly, giving you full
authority and control over all business-related decisions, and your new career had begun. The
group agreed on the name Live8, and decided to allocate 10% of its profits to a fund dedicated
to help other artists take the same step they were taking through giving business loans to new
galleries and artistic ventures.
In six years, the venture has expanded from a cramped gallery in Besiktas to six expansive,
European-style galleries in Istanbul, Ankara and several resort areas, catering to locals and
tourists alike. Events such as 9/11 and the Madrid train bombings created international
sympathy for your galleries’ themes abroad. Realizing the potential of the export market, you
purchased the rights to the Internet domain name www.live8.org. Designed as a showcase for
Live8’s creations, you put in months designing the site, and it is finally set to be uploaded and
online next week. The domain name itself cost five thousand dollars – you bought it from
someone who made a big profit at your expense, but there was no good alternative: live8.com,
live8.biz and others were already taken. You spent another twenty thousand dollars on the
design process, hiring an expert web-design artist, and consider this money well spent. You
view the website as another gallery, a venue where clients could visit, appreciate – and
purchase. Additionally, you see the website as the first step in your plan to expand the chain to
Europe. You feel almost ready to open branches in Paris, Rome and Barcelona, and the website
would provide the chain sufficient exposure to make this feasible. Feasible, of course, only as
soon as you can find the $1,700,000 necessary to finance this plan. You could borrow most of
the money from banks, or find an external investor, but don’t want to place the chain heavily
into debt, or under someone else’s control. You are hesitant to start off with only one gallery,
knowing that the effect of opening all three at once as a Turkish/European chain would have a
much more powerful effect.
Lately, people have been asking you if you were connected to the Live8 concerts. Confused,
you Googled the term and discovered that it was the name of an event set to take place in two
weeks time, organized by the people who organized the “LiveAid” concerts twenty years ago.
Concerts with leading artists would be held all over the world, and all proceeds – from
television broadcasting, disc sales, refreshment concessions at the concerts etc. – would go
towards combating poverty in Africa. Additionally, the organizers hope that the sheer mass of
people sharing in the event – by coming to the concerts or by following them, on TV or through
the Internet – will have an effect on the leaders meeting at the G8 summit, forcing them to deal
seriously with new proposals for aid to Africa.
You find it ironic that this pro-aid initiative adopted the same name as your own venture,
promoting the opposite ideology of self-dependency. While the situation in Africa has always
troubled you, you know that the only possible way out is for Africans to take responsibility for
themselves. You wonder how much of the aid will actually reach the population it was destined
for, and how much will be wasted on the aid agencies’ inflated administrations – to say nothing
of corrupt locals on the ground in Africa. You are willing to bet that – once again – Africans
would receive too little, too late; their energy would once again be wasted on anger towards
the West instead of being used to take charge of their own continent, their own countries and
their own lives. Now, whenever anybody asks if your chain is connected to the event, you are
quick to set them straight on this issue.
Yesterday you received an e-mail, from someone saying they were interested in the live8.org
site and asking if you were the owner. You replied that yes, you are indeed the owner and what
do they want? They still haven’t gotten back to you, but you suspect that they will very soon.
As you complete your preparation document, consider how you would prepare for the
unknown. Even with this uncertainty, you should be able to and you need to figure out your
most important interests, your aspirations and reservation point. You can only guess at this
point what the negotiation is about, so, address the unknown and make educated guesses. As
always, we don’t expect you to mind-read your counterparty and guess correctly. We expect
you to take us through your thought process of dealing with uncertainty.
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