Preparation for Second Week

The centerpiece for the week's activities will be the negotiation exercises.  You will find that there will be a lot to absorb!  Just when you feel that you have mastered one aspect of negotiation, we will challenge you by making the next negotiation just a bit more complicated.

To get as much as you can out of the week, you should read Chapters 1 through 5 of Getting to Yes (Fisher and Ury) and Chapters 1 through 9 of Negotiating Rationally (Bazerman and Neale) before you arrive.  The second book, in particular, will draw on much of the first week's material and apply decision making insights to negotiation.  In addition, please familiarize yourself with as much of the reading material as possible.  There is one exception:  The negotiation exercises (e.g., Mapletech, Working Moms, etc.) will be handed out when you arrive.

On the next page, you will find preparation questions for Class 1.  Please read and prepare the assignment for Class 1 before you arrive for the second week.  You will need to prepare Part D when you arrive for the second week.  The confidential information for the Texoil exercise will be found in your mailbox.

Part A

Read: The Syllabus

Review the section of the syllabus that pertains to the second week.  In addition, you should review the grading requirements for the class.

Part B

Read: James K. Sebenius, "Six Habits of Merely Effective Negotiators", Harvard Business Review, (April 2001)

The Sebenius article presents some common negotiation mistakes.  It also sets up the course by introducing many of the concepts we will develop during the week.  As you read the article, try to take an objective look at your own negotiation tendencies, and reflect upon which of the mistakes you have made in the past.

Part C

Read: C.K. Coolidge (A)  (HBS 894-017)

Note:  We will discuss this case in the second part of class.  C.K. Coolidge (CKC), a chemical manufacturer, is being sued for patent infringement.  Plaintiffs are the patent holder and its sole licensee who is also a CKC competitor.  An analyst at CKC has performed a break-even analysis, balancing the costs of going to court with settling out-of-court.  CKC is planning its negotiating strategy.

Questions:

l. Who are the parties or "sides" in this negotiation?  What are the interests of each party?  If no agreement is reached, what are the consequences to each party?
2. What are some possible agreements?
3. What is your recommended negotiation strategy for C.K. Coolidge?
4. Stated as a royalty percentage of past and future sales, what outcome do you think will result from your strategy?  Why?
       (   ) < 3%    (   ) 3-3.99%    (   ) 4-4.99%    (   ) 5-5.99%    (   ) 6-6.99%    (   ) 7-7.99%   (   ) > 7.99%

Part D

Read: Texoil case (Note:  The case will be part of a package of role play materials that will be in your mailbox when you arrive for the second week.  A package has been prepared individually for you!  Please don't share the information with others, or substitute another student's materials.)

A small gas station owner is negotiating the sale of his/her franchise to the parent firm, Texoil.  You have been assigned to the role of either the station owner ("Smith") or the company representative.  One page of information provides general background knowledge shared by both parties.  A second page provides information unique to each party (marked "confidential").  Study all of the information.  As with all cases, the information you have received should be treated as strictly confidential.  Please do not discuss the case with other students prior to the negotiation.  Note:  You will spend the first part of today's class carrying out this negotiation.

Part E

Please complete the computer survey at:

http://gsbsurvey.uchicago.edu/surveys/george.wu/wuxp0n.html

The survey is a general survey to help to get me to know you. You should complete the survey by Monday, August 6, 10:00 pm. The questions are found below for your convenience.

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