Usauo

An Introduction to USAuto

You may recall the 1997 movie, The Devil's Advocate, in which Keanu Reeves plays a young hotshot lawyer who is invited to join "the family firm" run by his dad, who happens to be Satan, devilishly played by Al Pacino. In one memorable scene in that movie, Al Pacino asks Keanu Reeves, "Are we negotiating?" Keanu replies, "Always!"

While managers aren't always involved in negotiations, many would likely agree that it seems like negotiations involving one issue or another are always underway. Negotiations are also a time when the corporate spotlight focuses brightly on the negotiators, and careers are often made or broken during negotiations. All that may be surprising, because negotiation is only a variant of communication.

Negotiation is a form of communication that is unique for a number of reasons. First, negotiation is often communication of significant importance to the organization. Negotiations involving managers occur when organizations are preparing to make big decisions--decisions that are often "make or break" for the business. When AOL and Time-Warner decided to join forces, when United Airlines worked with its pilots to drastically cut pay, and when Homeland Security took over various government departments, negotiations were conducted. These negotiations determined whether to do it, how to do it, and what the rights and responsibilities were of all concerned. If it is important, it is probably negotiated.

Second, negotiation involves processes that are governed by very complex laws that can create obligations in ways that are not always apparent. Some of the legal rules of the road are obvious--how parties make offers and accept, how terms are interpreted, and so forth. Other aspects of the legal environment surrounding negotiations are less obvious and can have unforeseen and drastic consequences. For example, in one negotiation between X and Y, there was an offer on the table from X to Y. One of the representatives of party Y made the simple statement, "Instead of paying us $500,000 and us paying Z the $200,000 that Y owes Z, why don't you (X) just pay Z the $200,000 directly, and pay us (Y) the $300,000?" In our legal environment, that communication during a negotiation was deemed to be a counteroffer that negated the very desirable offer that X had made to Y!

Third, negotiation places the parties in the role of agents who are acting on behalf of third parties. This creates unique obligations for the negotiators--obligations that extend substantially beyond those found in communication in general. For example, a negotiator may have the express authority during negotiation to agree to pay up to $1 million as a settlement for a complaint, but may not have authority to pay more than this amount. If the negotiator agrees to pay $1.5 million, the fact that the negotiator held him or herself out as having authority means that the other party can indeed get the $1.5 million--as $1 million from the company, and $0.5 million from the negotiator who acted beyond his or her scope of authority as an agent. It is very important that negotiators clearly limit their agreements to the boundaries of their agency.

Fourth, negotiation is an iterative process with typically many cycles or exchanges between the parties. Because there are many exchanges, parties have the opportunity to act in one manner during one communication, prompting a response by the other party and subsequent opportunities in later meetings or communication. A negotiator may demand more in Meeting One, with a view to reducing the demand in Meeting Two. You can't always take a negotiator's comment at face value.

Keep in mind that in negotiation, things are not always what they seem. The other party may be saying something different from what they believe or desire. This deception may be conducted to move the other party into a position favored by the deceiver, or it may be to cloud the true intent or desires of the deceiver. You may have to analyze further to determine if something is true or merely a distraction.

As you read the problem scenario, you might want to make up a three-column sheet with ten rows. In the first column, on the ten rows, write the questions that follow. On the next two columns, for the ten rows, you'll want to make notes about what appear to be the answers to these questions for each party:

1. What are the stated goals of each party?

2. What is the party's favored method to achieve the goal(s)?

3. What other choices were available to the party, and why did the party select the method it did? What does that mean about the other alternatives not chosen?

4. What are the "hot buttons" for each side? Why are these topics particularly sensitive?

5. What issues does each party have?

6. What choices are available for each party to resolve the issues and achieve the goals?

7. Is there any evidence that the party's true goals are different from those stated?

8. Is there a resolution that allows both parties to achieve their true goals?

9. What are the fears of the parties? Are these really the root issues, or are they only symptoms of a deeper concern that is not stated?

10. Is there a way to achieve goals while resolving the fears?

There is the tendency to believe that senior-level negotiations occur in marathon proceedings that follow a predictable sequence of events. As you may know from your own experiences, though, this is rarely the case. Negotiation at the management level is often characterized by a series of relatively short-duration meetings, telephone conference calls, e-mail exchanges, or other forms of brief communication. The direction of negotiations sometimes changes quickly, and the unexpected can be expected.

Consider the following case, in which the names of the parties and services offered have been changed in the interests of privacy:

Arizona Services Corporation (ASC) provides nationwide corporate services to a variety of very large clients. One very large potential client, Eagle Delivery (Eagle), entered into negotiations with ASC for ASC to provide corporate services. This would become ASC's largest account, and ASC was willing to negotiate some concessions to get the work.

In the first face-to-face meeting, ASC offered to provide

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