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Negotiation Case Study: Negotiation and Conflict Management
Before analyzing the negotiation, it is necessary to consider the scenario and essential aspects such as purpose and participants. The interaction to be considered in this project is the negotiation of the sale of publishing rights for the book. I want to grant a second party the print and electronic rights to distribute my book: as an author, I am the first party to sell the rights, and publisher X is the second party. In this case, the primary condition for me is to receive half of the profits from the sale of my book. The publisher, on the other hand, is only willing to give me 35% of all sales revenue. Thus, the main goal of these negotiations is to find a mutual agreement for the sale and distribution of the print and electronic rights to a book that satisfies both parties.
Seven Fundamental Questions
The success of negotiations depends largely on how the participants prepare and educate themselves. It is essential to consider and determine the answers to the seven fundamental questions. They will contribute to an awareness of the interests and needs of the negotiation process, its causes and the value it can create. The first question to be determined is what is expected of the process, which for me as an author was to obtain a satisfactory offer for the sale of copyrights. The next question is what decision is expected from the second participant in the process. This aspect involves carefully examining the terms offered by the other party and determining what value they may have for each participant.
The third question concerns the identification of the value that the future negotiation will create. In this case, it is the division of profits from the sale of the book in print and electronic form and how the publisher will benefit from collaborating with me. The fourth question involves highlighting the criteria and characteristics of why the other party should work with me. To do this, it is essential to highlight sufficiently compelling arguments for the other party. This includes proving why the book will be successful and benefit the publisher, such as the popularity of the genre, the authors, and meeting the needs of the target audience.
Question five involves assessing the alternatives or choices that would be acceptable if difficulties arise during the negotiations. This involves not only determining the value of the process, but also exploring possible steps to resolve the agreement. The best alternatives to a negotiated agreement must be effectively developed as part of the case. The sixth aspect of preparing for negotiation is to identify the commitments that the participants are willing to make and the point beyond which I should not negotiate. In this case, my bargaining limit is 40 percent, which means I cannot agree to a deal below that. The seventh fundamental question deals with the definition of a communication strategy for the negotiation (Grunig, 2022). In this case, the critical criteria are the provision of all important information, the sharing of the interests of the parties and the expression of possible dissatisfaction.
Pricing Matrix
The focus of these negotiations is not the price, but the percentage that I, the author, receive from my deal with the publisher. The pricing matrix below shows possible deal options with the publisher that could satisfy my interests and thus help ensure effective negotiations. This demonstrates the best negotiation option, where I receive 50% of the sales of each book, and the worst option, where I receive only 40% of the sales. In addition, the pricing matrix shows a publishers offer where I get 35%. In creating this pricing matrix, I focused on a book price that would satisfy my interest in the deal, as well as be slightly higher than the average book price in the United States. Specifically, the average book price in the U.S. is as high as $18, so the price of my book could be slightly higher given the limited print run and exclusive content (McZell, 2023). The price matrix shows that at this chosen price, the range of profit per book that would satisfy my negotiating interest is between eight and ten dollars, while the publisher can only offer me seven dollars per book.
I created a negotiation matrix that suggests different behavioral strategies for me. The choice of a particular strategy is determined by the importance of my relationship with the publisher as well as the importance of the outcome of the negotiation. I will apply avoidance when the outcome of the negotiation and the relationship with a particular publisher are less critical because there are other publishers in the market. Due to the presence of competitors, I am unlikely to use Accommodating, which allows me to lose profits but build a reliable relationship with the publisher, but also the competing strategy is not applicable to me because a good relationship with the publisher is an integral part of the negotiations and further work. The ideal negotiation terms are collaborating and compromising.
Zone of Possible Agreement
A zone of possible agreement is a zone in the negotiation process that determines the successful conclusion of a deal. The zone for a percentage of sales negotiation between a publisher and me is determined by the intersection of the two parties matrices, and it is important to consider the publishers goals and constraints in the negotiation process (Macy, 2021). In particular, the publishers primary interest is to maximize its share, but also to maintain a relationship with me as the author. The figure below demonstrates the possible benefit options for the publisher, the percentage of sales they can expect to receive. A range of 30 to 60 percent is a highly undesirable outcome for the publisher and will not result in a successful deal. The higher the percentage, the more money the publisher gets from the sale, but the worse off I am. One can see that the terms on both sides overlap, in the range of 55 to 60 percent for the publisher or 40 to 45 percent profit for me. It is this zone that is potentially successful for a deal, which means that under these conditions I have to make concessions on profit, and so does the publisher.
Best Alternative to a Negotiated Agreement
The Best Alternative to a Negotiated Agreement (BATNA) is a critical part of preparing for and conducting negotiations. It involves determining the direction of the negotiation process in the event that the parties cannot reach a common agreement (McKibben & Skoll, 2021). Even if there are difficulties in reaching a common solution, the parties can arrive at the most effective option that may partially satisfy their interests. However, it is important to remember that not all negotiating parties are willing to reach this alternative. This fact shows that the BATNA must be negotiated in the first steps of the process.
As part of these negotiations, BATNAs were considered and drafted in the preparatory phase. Thus, as the author of the book, I decided that if I were willing to accept a 45% profit, and if these terms were not satisfactory to the publisher, I would not make the deal. It should be noted that this is quite a risky move since the organization I chose is one of the best. In order not to lose any potential profits, I considered other publishers who could offer me the percentage I wanted.
On the part of the second negotiator, it is also necessary to identify alternatives to the negotiated agreement. For the publisher, 45 percent is the threshold for accepting the agreement, but not the desired one. This is due to the fact that there are several processes involved in the book distribution process for which they are responsible, and if they offer a percentage higher than it should be, they themselves may have little benefit from the agreement.
One way to strengthen my BATNA and weaken the other partys BATNA is to keep my decision confidential. Disclosing all the information may not work in my favor, since the other party will immediately know how low he can reduce the percentage of payout from the profits from the sale of print and electronic rights. In addition, the use of various resources, such as current market analysis, can be helpful. It is possible to provide data on the popularity of the author, the genre in which the book was written, and the demand for it among readers.
Information Sharing Process
The next step is to analyze the information sharing process in the negotiation. During the preparatory phase, each party to the negotiation received information about the expected conditions and outcomes of the process. This step provided an opportunity to carefully consider the participants desires and to prepare strategies to achieve the main goal of the process (Cohen, 2020). In addition, a face-to-face meeting between the two parties gave each the floor to reiterate the terms. For the publisher, it seemed too much to ask for half of the profits for print and electronic rights, which initially created a rather tense negotiating climate. An important aspect was the provision of analytical research on the publishing market, showing the average percentage demanded by authors.
For my part, thirty-five percent was outside the scope of any negotiated agreement. I did the necessary research, which included information about the success of my previous books, the needs and demands of the audience, and the level of sales of literature in the genre. This data increased the percentage to forty, which seemed more satisfactory to me as a rights seller. The information I provided influenced the negotiation process and the possible outcome more than the information provided by the buyer.
The data which were not exchanged in the information sharing phase was the expression of the best alternative to a negotiated agreement identified by each party. This step was optional, as both parties gradually agreed that the forty percent would be satisfactory to all. It is worth noting, however, that the buyer of print and electronic rights was the first to express the maximum percentage of payments the publisher could offer. In this way, they gained an advantage by setting limits and ensuring that their offer was the most profitable for me as a seller.
The main lesson highlighted in these negotiations is that it is essential for everyone involved to have a well-developed emotional intelligence. This is due to the fact that this skill provides the ability to better understand the emotions and state of mind of the negotiators (Pérez-Yus et al., 2020). Moreover, it allows to keep the climate of the procedure at a positive level in order to achieve the most satisfactory outcome. Pérez-Yus et al. found that maintaining a positive mood in the process of sharing information promotes more effective, creative, and innovative negotiations. Self-awareness and self-regulation were also of particular value, helping to maintain a calm emotional state when stressful situations arise during negotiations.
These aspects became a crucial tool for understanding the behaviors and impulses that could negatively affect the course of the copyright sale process. For example, I was aware that the forty percent offered by the buyer did not meet my minimum bid, but self-regulation helped prevent the emotional lift caused by stress. It is worth noting that a good level of self-awareness and self-regulation was also evident on the part of the second negotiator. These characteristics contributed to a full and smooth exchange of information in the negotiation process.
References
Cohen, A. J. (2020). A labor theory of negotiation: From integration to value creation [PDF document]. Web.
Grunig, J. E. (2022). Negotiation and conflict management: Two valuable tools in the public relations toolbox. Negotiation and Conflict Management Research, 15(1), 1-5. Web.
Macy, K. V. (2021). Zone of possible agreement: Researching & predicting publishers positions [PDF document]. Web.
McKibben, H. E., & Skoll, A. (2021). Please help us (or dont): External interventions and negotiated settlements in civil conflicts. Journal of Conflict Resolution, 65(2-3), 480-505. Web.
McZell. (2023). How much producing a book costs: Tips for selecting the right price of your book 2023 guide. McZell Book Writing. Web.
Pérez-Yus, M. C., Ayllón-Negrillo, E., Delsignore, G., Magallón-Botaya, R., Aguilar-Latorre, A., & Oliván Blázquez, B. (2020). Variables associated with negotiation effectiveness: The role of mindfulness. Frontiers in Psychology, 11, 1-13. Web.
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