Introduction to Negotiation Strategy
At Oak Spring University, we provide corporate level professional Negotiation Strategy and other business case study solution. Rewriting the Playbook for Corporate Partnerships case study is a Harvard Business School (HBR) case study written by F de AsA?s MartA?nez-Jerez. The Rewriting the Playbook for Corporate Partnerships (referred as “Bharti Vendors” 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, Operations management.
Negotiation strategy solution for case study Rewriting the Playbook for Corporate Partnerships ” 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?
This is an MIT Sloan Management Review article. Today's business environment is unforgiving of companies that are slow to adapt. To extend their capabilities and facilitate change, many organizations have experimented with different types of strategic partnerships with suppliers and customers that help them design and deliver products and services efficiently. But some innovative companies are attempting to redefine the parameters of strategic partnerships through multileveled relationships with customers and suppliers that leverage the resources and capabilities of the respective parties.What makes such partnerships -which the author calls adaptive strategic partnerships -counterintuitive is that they are being used in situations where the two most relevant streams of organizational economics would argue for vertical integration. One company that has pursued adaptive strategic partnerships is Bharti Airtel Ltd., the Indian telecommunications services company. Back in 2004, Bharti Airtel's managers found that negotiating and updating contracts with vendors interfered with their ability to focus on satisfying the company's customers and outsmarting its competition. Contrary to what other telecom operators have done, it negotiated unconventional relationships with some of its leading vendors, including Nokia Siemens Networks (now Nokia Solutions and Networks), Ericsson and IBM. Instead of expanding network infrastructure by purchasing increasing amounts of equipment (such as exchanges and cellular antennas), which often results in unused capacity, Bharti Airtel pays the vendors to operate the network; it compensates them based on telecom volume, paying only when equipment is in use. In addition to rethinking its approach to network capacity, vendors take responsibility for network performance and troubleshooting. Typically, companies with outside partners rely on simple tools such as service-level agreements, which specify what is expected from each party and provide for performance standards to assess compliance. But in managing its partnerships with vendors, Bharti Airtel uses a joint governing structure that encourages people at different levels of the organizations to communicate and address problems as they arise. In some cases, such interactions have led the company and its partners to redraw the scope of their collaborations (for example, assign responsibility for building and maintaining the cell towers to a new company), something that would be more difficult to do in a more traditional partnership. The incentive system rewards vendors for efficient network management. By sharing information with its telecom equipment providers, Bharti Airtel and its partners are incentivized to develop processes that advance learning, innovation and mutual trust. Other companies are shifting the institutional framework on three dimensions: 1) incentives 2) information and 3) collaboration mechanisms. By managing across these dimensions, they are paving the way for the new level of collaboration.
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 “Rewriting the Playbook for Corporate Partnerships” 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 “F de AsA?s MartA?nez-Jerez”, 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 “Rewriting the Playbook for Corporate Partnerships ”, 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 “Rewriting the Playbook for Corporate Partnerships” can make for an effective negotiation strategy and will make it easier to negotiate with this party the next time as well.
F de AsA?s MartA?nez-Jerez (2018), "Rewriting the Playbook for Corporate Partnerships Harvard Business Review Case Study. Published by HBR Publications.
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