Successful-negotiationCaseStudyAnalysis

Runninghead:CASESTUDYANALYSIS:PARTA1CaseStudyAnalysis:PartA“Successfulnegotiationisanart,notascience.Thethreemostimportantconcernsandelementsinanynegotiationaretherelationship,theriskandthevalue.Theseconcernsaretherealdecisioncriteriathatunderlieanybusinesstransaction”(DiFrances,2005,para.2).CapitalMortgageInsuranceCorporation(CMI)wasacquiredbyNorthwestEquipmentCorporationin1978andwasawhollyownedsubsidiary(Lewicki,Saunders,&Barry,2005).NorthwestEquipmentCorporationacquiredCMIwhentheparentcompanywentintoChapter11bankruptcy.ThecompanywasdevelopedtoworkwithresidentialmortgagelendersinsellingmortgageguarantyinsurancepoliciesthroughouttheUnitedStates.Thefollowingpaperwillbrieflydescribethecaseathand,whatrolesocialcontextwillplayinthenegotiationprocess,andhowthesocialrelationshipthatBurr,Lehman,andKupchakwillaffectthenegotiation.Thepaperwillendbydescribingthetangibleandintangiblebenefits,cost,andrisksassociatedwithnegotiatingCorporateTransferServices(CTS).AnalyzingthecaseofCapitalMortgageCorporationwillallowareadertodefinehowsocialrelationshipsaffectnegotiations,anddefinethebenefits,costs,andrisksofthenegotiationprocess.CaseSummaryCMIhasaninterestinbroadeningitsfinancialservicestostrengthenthecompany.CMIprimarygoalistobetheleaderinthefinancialservicesindustry.CMIwillhavetostandagainstthecurrentindustryleader,MerrillLynch,totakealargeshareofthemarket.CMImustacquireCTSatareasonablepricetoachievethisgoal.CMIsecondgoalistokeeptheCTSkeystaffandmaintainagoodworkingrelationshipwiththecurrentownerofCTS,ElliotBurr.CMIwantstokeeptheirrelationshipwithElliotBurrstrongsothathewillbewillingtobeflexibleandcollaboratewithCMIthroughoutthelongCASESTUDYANALYSIS:PARTA2negotiationprocess.MaintainingagoodrelationshipwithElliotBurriscrucialbecauseCMIneedstokeepthecurrentCTSemployeesinplacetomanageCTSfunctionsandcurrentbusinessinterests.Fosteringagood,long-termrelationshipwithElliotBurrwillhelpkeepCTS’scurrentemployeeshappyandtheoperationworkingsmoothly.OtherbenefitwouldbethatCTShasanexcellentfootholdinthecorporaterelocationbusiness,immediatelicensingandotherlegaldocumentsin38states,InfluenceonMetroNetnetwork,anexperiencedoperationsmanager,andaclearincreaseinbusinessforCMI.Ifnoagreementisreached,thebestalternativetoanegotiatedagreement(BATNA)ofCMIwouldbe:buildashuttleservicetothecompanyorseekabusinesssimilartoCTS.However,thefirstoptionwouldbeaveryexpensiveoutputandnootheroptionsforthesecondoptiontoday.Forthisreason,realizeasuccessfulnegotiationisthepreferredchoiceofCMI.SocialContextSocialcontextplaysalargeroleinnegotiations.Afterall,negotiationisdefinedasasocialinteractionthatrequiresmorethanonepersonorparty.Theabilitytoacquireknowledgeaboutothersisanimportantpartofnegotiating.Whereassomenegotiationsinvolveanimmediateexchangeandquickresolution,andknowledgeofaperson’sneeds.Arelationshipcanhelpconstructbuildingblocksmakingtheoutcomemoresatisfyingforbothparties.“Perception,cognition,andemotionarethebasicbuildingblocksofallsocialencounters,includingnegotiation,inthesensethatoursocialactionsareguidedbyhowweperceiveandanalyzetheotherparty,thesituation,andourowninterestsandpositions”(Lewicki,Saunders,&Barry,2005,p.132).Perceptionisthewaythatonetakesininformationfromtheirenvironment.Thiscanbeheavilyinfluencedbyexperiences,otherpeople’sinput,andeventheirmood.Inanegotiation,CASESTUDYANALYSIS:PARTA3perceptioncanbepowerfuleitherpositivelyornegatively.Apotentialproblemisperceptualdistortion,orerrorsinperception(stereotyping,thehaloeffect,selectiveperceptionandprojection).Themostcommonperceptualdistortionisstereotyping,whichoccurswhenaparticularattributeisassignedtoanindividualwhofitsintoaparticularcategoryordemographic.Thehaloeffectoccurswhenpeoplegeneralizebaseduponknowingjustonecharacteristicofoneperson.Selectiveperceptionistakinganattributeofsomeoneandusesittoconfirmapreconceivednotionandprojectionistheprocessoftakingapersonalattributeanddispersesitamongothers.Eachoftheseexamplescanbeaverypowerfulinfluenceonthenegotiationprocess.Whereasperceptionisthewayinformationistakenin,cognitionishowthatinformationisprocessed.Framingisakeyaspectofcognitioninthat“aframeisthesubjectivemechanismthroughwhichpeopleevaluateandmakesenseoutofsituations,leadingthemtopursueoravoidsubsequentactions”(Lewicki,Saunders,&Barry,2005,p.135).Finally,emotioncomesintoplayinnegotiationaswell.Moodandemotioncansometimesbeconfusedbutwhatdifferentiatesthetwoarespecificity,intensity,andduration.Moodstatesarelessspecific,lessintensebutlastlongerthanemotionstates,whereasemotionstatesareoftendirectedmorespecificallyandaremoreintense.Negotiationscanleadtobothpositiveandnegativeemotions,justasthoseemotionscanhavepositiveornegativeoutcomesonnegotiations.RelationshipsPersonalrelationshipsandreputationswillalwaysbeapartofthenegotiationprocess.Inthiscase,thepersonalrelationshipisverystrongpartofthecurrentnegotiation.Becauseofthehistoryoftherelationshipbetweentheparties,thethreewilltrytousetheirdifferentstylestoCASESTUDYANALYSIS:PARTA4influencethecurrentnegotiations.ThethreeseniorleadersofCTS,