Discussing Contract Negotiation Strategies: Applying the Method of Joint Advantage
The Teaching Negotiation Resource Center (TNRC) offers a wealth of resources for negotiation education, including over 250 negotiation exercises and role-play simulations, critical case studies, enlightening periodicals, more than 30 videos, and 100-plus books. These materials are invaluable in introducing students to key concepts while addressing the theory and practice of negotiation.
GE International Contract Simulation
One of TNRC's simulations, the GE International Contract, showcases the mutual gains approach in contract negotiations. In this two-party negotiation between a large corporation and a consulting firm, the parties have differing expectations regarding the price of the project. By focusing on underlying interests instead of fixed positions, negotiators move beyond positional bargaining to explore creative options and collaborate effectively.
A key moment in the simulation arises when both parties realize they have very different expectations about the appropriate price. By sharing Best Alternative to a Negotiated Agreement (BATNA) and understanding each other's constraints and criteria for a fair price, they can generate options that salvage the deal, maintain their relationship, and satisfy their companies’ interests. The simulation highlights the importance of comparing principled negotiation to positional bargaining, managing and disclosing BATNAs strategically, collaborative option generation to expand value, and using objective standards to determine fair pricing.
Flagship Airways Simulation
In the Flagship Airways simulation, negotiators face complex data and a history of relationship dynamics. This six-person negotiation between an industrial manufacturer and its primary client over restructuring an existing purchase agreement emphasizes balancing the best deal for each party with trust and team alignment, while carefully managing the long-term relationship. Key lessons include building intra-team trust, maintaining inter-party relationships, and working from a principled framework that identifies shared interests and objective criteria rather than entrenched positions.
TNRC's Mutual Gains Approach Lessons
Essential steps in applying the mutual gains approach, as demonstrated in both simulations, include focusing discussion on underlying interests instead of fixed positions, openly sharing information selectively to reveal priorities and constraints, brainstorming multiple options for joint gain (trade-offs, logrolling), using objective criteria (market data, expert standards) to anchor agreements, developing and managing BATNAs to understand each party’s alternatives and leverage, and balancing competitive and cooperative elements to grow the “pie” instead of dividing a fixed amount.
Application of TNRC Materials
TNRC negotiation exercises and teaching materials introduce participants to new negotiation and dispute resolution tools, techniques, and strategies. These materials are used to teach various negotiation skills, such as interval team conflicts, trading across and within issues, the influence of threats and promises, power imbalance typical of employee relations, and exploring the problems of power imbalance. They are designed for educational purposes and are used in college classroom settings, corporate training settings, by mediators and facilitators, and by individuals seeking to enhance their negotiation skills.
Ultimately, TNRC simulations demonstrate how the mutual gains approach avoids zero-sum conflict and leads to more sustainable contracts by making negotiation a joint problem-solving effort grounded in data, relationship, and principled standards. The simulations aim to teach students about balancing long-term and short-term interests, the importance of thorough preparation, avoiding short-term gains that jeopardize long-term relationships, effective cross-cultural negotiation, and clear communication. TNRC materials are not advertisements but are educational resources for negotiation learning and practice.
- The GE International Contract Simulation, a resource from the Teaching Negotiation Resource Center (TNRC), uses negotiation between a large corporation and a consulting firm to illustrate the mutual gains approach in business dispute resolution.
- The Flagship Airways Simulation, another TNRC offering, highlights the importance of balancing the best deal for each party with trust and team alignment in a six-person negotiation over restructuring an existing purchase agreement.
- The mutual gains approach, as demonstrated in TNRC's simulations, involves focusing discussions on underlying interests, open information sharing, brainstorming multiple options for joint gain, using objective criteria to anchor agreements, developing and managing Best Alternative to a Negotiated Agreement (BATNA), and balancing competitive and cooperative elements.
- TNRC negotiation exercises and teaching materials are instrumental in introducing participants to various negotiation skills, including those related to team conflicts, power imbalance, cross-cultural negotiation, and clear communication, serving as valuable resources for education-and-self-development and personal-growth.
- By avoiding zero-sum conflict and making negotiation a joint problem-solving effort grounded in data, relationship, and principled standards, TNRC simulations like GE International Contract and Flagship Airways aim to teach students about balancing long-term and short-term interests, the importance of thorough preparation, and the strategies that lead to more sustainable contracts.
