Internal negotiations can include:

  • Resource allocation discussions
  • Project management and implementation
  • Labor relations
  • Influencing and persuading
  • Recruitment and promotion
  • Etc.

The problem starts with the structure of most corporate firms.  Decisions tend to follow a pyramid like hierarchy, even in flat or modular organizations.  As a result, disputes and conflicts are escalated for resolution.  The two sides submit their conflicting views and recommendations for consideration.  The decision maker chooses.  One side wins, and one side loses.  At the risk of over-simplifying the problem, this process creates win-lose outcomes when clearly win-win is appropriate given the circumstance.  (see Wheel of Negotiation)

Change the Decision Process

In order to avoid a win-lose outcome, the first step is to begin treating the discussion as a negotiation.  Instead of relying on delegated authorities to solve the conflict or issue, agree with the parties involved to reach a consensus as a group.  Leave escalation as a means for resolving deadlock or last resort.  If deadlock occurs, a “last best offer” style for the decision can be very effective at minimizing the lose factor.  In treating the issue as a negotiation a formal process needs to be followed to maximize the potential result. (Details below)

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February 12th Philippe Dauman, Viacmon’s president and CEO, issued the following statment:

As we go forward, we are continuing to focus more on software than hardware, looking to reduce the cost structure associated with Rock Band, being selective in the music titles that we choose for Rock Band based on their cost. The music industry will assist with this category to make sure that it can continue on a profitable basis in the future and then finally we think we have the best games in the category, we’ll continue to rollout exciting products.

An obvious signal to the Music Industry as he begins the negotiation by creating his position through the media.  It is even more effective when followed by a letter/email/phone call to each company with his offer.  Effective positioning helps to shift the frame of reference before the negotiation technically begins.  Philippe is preparing the industry to receive his demands. To truly shift their expectations you need to deliver an offer, effectively dropping an anchor.

The Music Industry would be wise to attempt to shift the focus back onto their position with a preemptive strike.  Instead of allowing Viacom to open the discussions with some ridiculous offer like 50%, they need to provide an anchor of their own to begin the discussions around their position.  By opening first the initial expectation is set.  This is definitely shaping up into a classic Hard Bargaining negotiation.  I’ll keep my eye on any developments.  What do you think?

Darvin Moon finished 2nd in the 2009 World Series of Poker, winning $5.18 million.  Although Darvin is an amateur, many times he demonstrated an uncanny ability to make the right call at the right time.  Sometimes he was just plain lucky.

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Negotiating in China

In Kissinger’s book, Ending the Vietnam War : A History of America’s Involvement in and Extrication from the Vietnam War, he recounts the following observation. The American delegation made arrangements to occupy 3 floors in a prominent hotel in Paris. The Vietnamese delegation, on the other hand, bought a chateau. The message was clear. We are here for as long as it takes.

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In a nutshell this is the advice I gave my client in response to yesterday’s post.

Start by examining what you know about the circumstance. (more…)

Today I thought it would be interesting to take and dissect a real negotiation to see some of the concepts in action.  So here is the setup, I’ve obscured some of the facts to protect the guilty:

Parties Involved:

1.  Record Company – Very large entertainment company (more…)