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Transcript of NEGOTIATION PLAN
Bernard B. Salazar
January 29, 2014
** Presentation Outline **
* Issues, negotiation process, and parties objectives
* Define interests, resistance points, and alternatives
* Assess constituencies and social context of negotiations
* Protocol for the negotiation
* Methods to prevent potential negotiation impasses
* Methods to manage potential impasses
CMI and CTS could establish common grounds and enhance the attractiveness of other's alternatives. CMI could:
* Acquire 80% of CTS at $600K plus Net Book Value, including the option to buy the remaining 20% at present value if CTS meets certain financial objectives.
* Acquire a little more than $600K plus Net Book Value for 100% stake of CTS to include a guaranteed access to all MetroNet's clients data.
* Acquire and pay the seller's asking price plus Net Book Value and requiring CTS partners to diversify their investments through equity or debt investments.
* CMI primary interest is to expand its financial business while
CTS' primary interest is to sell the company at a high value.
* CMI negotiation goal is to arrive at the final settlement closest to CTS' resistance point.
- Initial offer of $400K and resistance point of $600K. These will allow rooms for concessions.
* Burr, Lehman, and Kupchak were close friends professionally and personally.
* Winder was part of the group but not as closely involved as the other three. CTS General Manager and Leading Salesman.
* Burr could be the unofficial spokesman of the group. Founder and driving force behind CTS. Held in high regard by local bankers.
* Lehman is an elders statesman - a true gentleman. More of a financial advisor and investor. Burr's partner in the largest Chicago real estate broker firm.
* Kupchak is characterized as aggressive, ambitious, and interested in financial transactions much more than in the nature of the business.
CTS will have to clarify the role and responsibility of everyone prior to meeting at the negotiating table. For CMI, knowing the other parties' attitude, behavior, or reputation can help determine their negotiation approach.
the investment banks
Impasses need to be resolved at cognitive, emotional, and behavioral levels:
* Agree to ground rules
* Improve the accuracy of communication
* Fractionate the negotiation
* Establish common grounds
* Enhanced the desirability of options to the other party
* Use legitimate or objective criteria to evaluate solutions
* Monitor the interactive quality of the process, noting how each statement and action is linked to the next.
* Pay special to the multiple levels of negotiation such as identity, role, substance, and emotions.
* Be attuned to the other party's verbal and nonverbal cues.
* Be cautious in interpreting the behavior of others.
* Recognize your own trigger points.
* Anticipate change by imagining different scenarios
** Effective planning allows negotiators to design a road map that will guide them to agreement. While this may frequently need to be modified and updated as discussions with the other side proceed, and as the world around the negotiation changes, working from the map is far more effective than attempting to work without it**
corrupt or flawed?
Special Thanks to:
Capital Mortgage Insurance Corporation
Issues and Parties Objectives
* The biggest issue that CMI was facing going into the final negotiation is the acquisition price.
* 100% ownership of CTS
* Head office relocation to Philadelphia
* Retaining Tom Winder as GM
* The "primary objective" was to develop an organization that provides a strong marketing and administrative services to corporate transfer market.
* External acquisitions to broaden CMI's financial base similar to Meryll Lynch
CTS ISSUE and OBJECTIVE
* To sell the company at the highest possible price
* Good ROI for investors
FLOW OF NEGOTIATION: STAGES & PHASES
- Beginning or Initiation Phase
- Middle Phase (Bargaining or Problem Solving)
- Closing or Resolution Phase
7 KEY STEPS TO AN IDEAL NEGOTIATION PROCESS:
* Relationship building
* Information gathering
* Information using
* Closing the deal
* Implementing agreement
INTEREST, RESISTANCE POINTS, AND ALTERNATIVES
* Find another buyer or invest more money into the business operation
* Best BATNA is the company's networking relationship with MetroNet. CTS can leverage on MetroNet connection to persuade CMI to a concession
* To acquire a different company or establish its own relocation services
* The company can leverage on its vision, financial resources, and information about CTS' financial struggle
* MetroNet's endorsement of the company
Establish Common Grounds and Enhance Attractiveness Of Each Other's Alternative
Assessing Constituents and Social Context
CMI and CTS must come into agreement on the negotiation protocol to be followed such as:
* Specific agenda to follow
* Place of negotiation
* Time of negotiation
* Plan if negotiation fails
* How to keep track of what is agreed to
* How to determine if they have a good agreement
Managing Negotiation Impasse
KEY STEP IN THE PLANNING PROCESS