Introduction to Negotiation Strategy
At Oak Spring University, we provide corporate level professional Negotiation Strategy and other business case study solution. Shanghai Diligence Law Firm, Chinese Version case study is a Harvard Business School (HBR) case study written by Robert G. Eccles, Catherine Zhang. The Shanghai Diligence Law Firm, Chinese Version (referred as “Compensation Firm” from here on) case study provides evaluation & decision scenario in field of Leadership & Managing People. It also touches upon business topics such as - negotiation strategy, negotiation framework, Compensation, Developing employees, Employee retention, Entrepreneurial management, Growth strategy, Marketing, Motivating people.
Negotiation strategy solution for case study Shanghai Diligence Law Firm, Chinese Version ” provides a comprehensive framework to analyse all issues at hand and reach a unambiguous negotiated agreement. At Oak Spring University, we provide comprehensive negotiation strategies that have proven their worth both in the academic sphere and corporate world.
What’s my BATNA (Best Alternative To a Negotiated Agreement) – my walkaway option if the deal fails?
What are my most important interests, in ranked order?
What is the other side’s BATNA, and what are his interests?
Shanghai Diligence Law Firm, started in January 2006, is a rapidly growing law firm in China's burgeoning legal services market. In addition to the usual challenges facing all professional service firms (picking and retaining talent and building a desired client portfolio), the firm faces some challenges and opportunities that are unique to its setting in China and the fact that the firm is not yet three years old. The legal profession in China is a new and rapidly growing one with a large number of small firms all trying to carve out a distinctive niche for themselves. One of the partners in the firm, Joseph Shang, has created an innovative compensation system he calls the "A-B-C-D Model" which enables even the most junior associates to earn compensation for bringing in new business. This model is a kind of hybrid between the typical compensation system found in a Chinese law firm and those found in U.K. and U.S. law firms. The goal of this approach to compensation is to enable the firm to get and keep promising lawyers while also giving them an incentive to help grow the business. Somewhat unusual for a typical law firm, or any type of professional service firm, this compensation model is only used in Shang's practice. The founder and CEO, Chenyao Wu, has his own version of an "A-B-C-D Model," and discussions are taking place about what the firm should be doing about compensation. In addition to compensation, the firm is grappling with issues regarding divergent views amongst the partners, building a brand in a very competitive marketplace and the stability of the core team.
By interests, we do not mean the preconceived demands or positions that you or the other party may have, but rather the underlying needs, aims, fears, and concerns that shape what you want. Negotiation is more than getting what you want. It is not winning at all cost. Number of times Win-Win is better option that outright winning or getting what you want.
Options are the solutions you generate that could meet your and your counterpart’s interests . Often people come to negotiations with very fixed ideas and things they want to achieve. This strategy leaves unexplored options which might be even better than the one that one party wanted to achieve. So always try to provide as many options as possible during the negotiation process. The best outcome should be out of many options rather than few options.
When soft bargainers meet hard bargainers there is always the danger of soft bargainers ceding more than what is necessary. To avoid this scenario you should always focus on legitimate standards or expectations. Standards are often external and objective measures to assess the fairness such as rules and regulations, financial values & resources , market prices etc. If the negotiated agreement is going beyond the industry norms or established standards of fairness then it is prudent to get out of the negotiation.
Every negotiators going into the negotiations should always work out the “what if” scenario. The negotiating parties in the “Shanghai Diligence Law Firm, Chinese Version” has three to four plausible scenarios. The negotiating protagonist needs to have clear idea of – what will happen if the negotiations fail. To put it in the negotiating literature – BATNA - Best Alternative to a Negotiated Agreement. If the negotiated agreement is not better than BATNA then there is no point in accepting the negotiated solution.
One of the biggest problems in implementing the negotiated agreements in corporate world is – the ambiguity in the negotiated agreement. Sometimes the negotiated agreements are not realistic or various parties interpret the outcomes based on their understanding of the situation. It is critical to do negotiations as water tight as possible so that there is less scope for ambiguity.
Many negotiators make the mistake of focusing only on the substance of the negotiation (interests, options, standards, and so on). How you communicate about that substance, however, can make all the difference. The language you use and the way that you build understanding, jointly solve problems, and together determine the process of the negotiation with your counterpart make your negotiation more efficient, yield clear agreements that each party understands, and help you build better relationships.
Another critical factor in the success of your negotiation is how you manage your relationship with your counterpart. According to “Robert G. Eccles, Catherine Zhang”, the protagonist may want to establish a new connection or repair a damaged one; in any case, you want to build a strong working relationship built on mutual respect, well-established trust, and a side-by-side problem- solving approach.
According to
Harvard Business Review
, there are three types of negotiators – Hard Bargainers, Soft Bargainers, and Principled Bargainers.
Hard Bargainers – These people see negotiations as an activity that they need to win. They are less focused less on the real objectives of the negotiations but more on winning. In the “Shanghai Diligence Law Firm, Chinese Version ”, do you think a hard bargaining strategy will deliver desired results? Hard bargainers are easy to negotiate with as they often have a very
predictable strategy
Soft Bargainers – These people are focused on relationship rather than hard outcomes of the negotiations. It doesn’t mean they are pushovers. These negotiators often scribe to long term relationship rather than immediate bargain.
Principled Bargainers – As explained in the seven elemental tools of negotiations above, these negotiators are more concern about the standards and norms of fairness. They often have inclusive approach to negotiations and like to work on numerous solutions that can improve the BATNA of both parties.
Open lines of communication between parties in the case study “Shanghai Diligence Law Firm, Chinese Version” can make for an effective negotiation strategy and will make it easier to negotiate with this party the next time as well.
Robert G. Eccles, Catherine Zhang (2018), "Shanghai Diligence Law Firm, Chinese Version Harvard Business Review Case Study. Published by HBR Publications.
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