7919 - Laserfiche WebLink

Home Browse Search

Although there is no best overall strategy in negotiations, experience consistently emphasizes the necessity of thorough, diligent preparation by the instream flow negotiator. The pattern of concessions, for instance, is directly affected by the negotiator's knowledge of his opponent's payoffs and requirements, which he should have developed beforehand. A hard initial offer by a negotiator usually results in a more favorable final offer by an opponent who does not have information about the negotiator's payoffs. Small concessions by the opponent also usually result in a more favorable final offer by a negotiator, especially if he does not have information about the opponent's payoffs or is under substantial time pressure (Druckman 1977). Books and articles by experienced negotiators are full of stories about business negotiations in which the unprepared engineer, accountant, lawyer, purchaser or seller is taken to the cleaners, such as the negotiation between Hughes Aircraft and Starmatic for power generating equipment for the first unmanned space vehicle to the moon. Starmatic's bid was $450,000. After one day's negotiating, in which Starmatic was pressed to justify its figures, the contract was signed for $220,000. When the Hughes team arrived at the conference: "We soon learned that the opponent's team was in greater disarray than our own. Their chief engineer was not conversant with the original proposal and felt obliged to apologize for his lack of detailed knowledge. The supplier's contract administrator and controller indicated that they had not reviewed the proposal prior to the conference and asked for a short delay in order to do so. We requested accounting justification for the $450,000 bid and were pleased that the controller lacked this. He left the room and returned almost thirty minutes later with an armful of messy workpapers. We continued to insist upon accounting justification and began to realize that the estimating base was not likely to be found in the books. Starmatic's cost system was no better than that of the rest of the industry. 5