Negotiation Simulations Motif

ENHANCED NEGOTIATIONS & ROLE PLAYS

The motif suggests two teams of negotiators (dark blocks) using a simulation model to investigate their proposals with the coloured circles suggesting the interaction between the teams of negotiators.

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There are two problems with the normal negotiation role play. First, each party tends to invent issues and assumptions so as to win while the other party looses. Second, the financial aspects of the negotiation are trivial. Our negotiation role plays over come this by providing two simulation models - one to help the sellers assess the financial outcome of their proposals and one for the buyers to help assess the costs of the proposals. Over nearly thirty years use on courses this has led to win-win agreements despite vigorous negotiation.

These are a series of computer enhanced negotiation role-plays lasting a day that can be used:

The series consists of four negotiations each addressing different industrial situations These are:

But, our experience designing and using these simulations since 1983 means we can customise or create similar negotiations to meet your specific needs remarkably quickly. For example, our latest simulation (the Constructive Negotiation) took about two weeks to develop!

KEY LEARNING: Each negotiation covers:

DURATION: Approximately one day.

TARGET AUDIENCE: The negotiations are designed for senior sales staff, purchasing staff and management.

METHOD: After a short briefing the training group is divided into pairs of Buyers and Sellers each of three to five participants. These teams consider the problem and progress through the following stages:

  1. PLANNING
  2. INFORMATION GATHERING
  3. PREPARATION OF INITIAL PROPOSAL
  4. INITIAL NEGOTIATION
  5. MODIFICATION OF PROPOSAL
  6. FINAL NEGOTIATION
  7. REVIEW & DISCUSSION

The negotiation may be videoed.

Besides these elements of a negotiation role-play, separate planning models are provided to the selling and buying groups to allow them to forecast the financial impact of their proposals.

The use of computer models allows the financial impact of the proposals to be fully analysed (without overly stretching the participants' mathematical ability)! Also, the design of these models coupled with the fact that teams cannot "invent" the financial dimension, means that the negotiation invariably leads to a WIN-WIN situation.

AVAILABILITY: Commercial and Sales Negotiation are available off-the-shelf and a comprehensive Trainer's Pack is provided allowing trainers with little or no experience with simulations to run the simulations. Systems Negotiation is only available tutored.

KEY LEARNING

NEGOTIATION OBJECTIVES

Besides the usual price, profit & cost objectives, each group has other objectives. For the FMCG negotiation, the sellers have surplus brewing capacity and the retail buyers (with cash flow problems) require delayed payment. This raises the issues of the objectives of both parties. For the buyers these include least total cost purchase, ease & safety of purchase, politics of the buying group etc.. For the sellers the include profits and profitability, size of order, future business opportunities etc..

NEGOTIATION STRATEGY

The role-play takes the participants through all the stages of the negotiation (from planning through information gathering, initial proposal to final proposal to agreement). At each stage, as the negotiation unfolds, teams must decide strategy and manage the process. Not only does this involve deciding who says what, but includes body language and even the physical arrangement of the negotiating arena.

TRADE-OFFS

Each negotiation involves reaching agreement in several (six or seven) areas. Each area differs in importance to buyers and sellers and has different impact on financial results. So, not only must teams consider the importance and cost to their side but must find the importance to the other side. This allows trade-offs in areas that are important to one side but not the other. Additionally, some areas may benefit both sides. In the FMCG negotiation, if the selling group provides more advertising support to the buyer than the basic amount, the additional sales more than cover the cost of the additional advertising support. (However, if the two sides are in conflict, this mutual benefit will not be explored.)

NEGOTIATING BEHAVIOUR

Although, almost invariably, the simulation concludes with a win-win agreement, this does not mean that conflict and inappropriate behaviours do not happen. This provides the opportunity to explore and discuss these behaviours and contrast them with helpful behaviours using actual examples from the negotiation. This is illustrated by the following exchange:

Buyer: "You obviously failed to heed our statement on price."

Seller: "No with respect ........"

Buyer: "But when you quoted ........"

Seller: "We did not quote - we mooted ......."

(Despite this acrimonious exchange, the group reached a win-win agreement!)

FINANCIAL IMPLICATIONS

Although participants do not have to do calculations or have deep accounting knowledge, each negotiation explores the financial implications of the negotiation. Implications in terms of profit, cost and cash flow. The negotiations emphasise, for the buyers, the total cost of acquisition (financing, quality, purchase cost etc.) rather than just purchase cost. For the sellers, the total cost of supply (selling, servicing, financing and product) are explored.

TEAM MANAGEMENT

By participating in a team negotiation, participants not only must consider the other party to the negotiation but, also, must manage their team. Also, working in a team means that the different negotiation tasks and roles can be explored. Tasks such as negotiator, chairman, observer and recorder. Where the participants normally work in a negotiating team, this role separation is vital. However, even when the negotiation is done as an individual, these roles are still necessary (albeit provided by the individual).


Constructive Negotiation

CONSTRUCTIVE NEGOTIATION was developed for a major construction company. It involves a negotiation between a construction company and a local government about the purchase of Prefabricated One-person Dwellings for the low paid.

Areas of agreement cover price, dwelling type, number of dwellings, fitting. commencement and completion dates and payment terms.

Currently, Constructive Negotiation is only available as a fully tutored basis.

Besides the Participant's Brief (download below), there are separate briefs for Sellers and Buyers and on request these can be e-mailed.

UK version Document Size 36k bytes Download 66k Bytes  
US version Document Size 39k bytes Download 66k Bytes  

Commercial Negotiation

COMMERCIAL NEGOTIATION was developed for the Chartered Institute of Marketing's college following their experience with Sales Negotiation. It involves a negotiation between a brewery and a supermarket chain about the sales of an own-brand beer.

Areas of agreement cover price, duration of contract, strength of beer, delivery, payment terms and promotional support.

Commercial Negotiation is available as a package for trainers, on a rental basis or as a fully tutored basis.

Besides the Participant's Brief (download below), there are separate briefs for Sellers and Buyers and on request these can be e-mailed.

UK version Document Size 35k bytes Download 98k Bytes Download 107k Bytes Click to download the simulation software.
US version Document Size 36k bytes Download 98k Bytes Download 107k Bytes Click to download the simulation software.

Sales Negotiation

SALES NEGOTIATION involves a negotiation between an electric motor manufacturer and a steel maker about the purchase of steel raw material.

Areas of agreement cover price, duration of contract, quality of steel, delivery frequency, payment terms and payment currency.

Sales Negotiation is available as a package for trainers, on a rental basis or as a fully tutored basis.

Besides the Participant's Brief (download below), there are separate briefs for Sellers and Buyers and on request these can be e-mailed.

UK version Document Size 33k bytes Download 98k Bytes Download 66k Bytes Click to download the simulation software.
US version Document Size 35k bytes Download 98k Bytes Download 66k Bytes Click to download the simulation software.

1999 Jeremy J. S. B. Hall
Most recent update: 28/11/10
Hall Marketing, Studio 11, Colman's Wharf,
45 Morris Road, London E14 6PA, ENGLAND
Phone  +44 (0)20 7537 2982
E-mail
jeremyhall@simulations.co.uk