Planning for Rapid & Scott Negotiation

In any negotiation, preparation is crucial; and having a set, outlined process

to follow when preparing helps mitigate a potential oversight of any
significant issues within the negotiation. Following a set process also helps
one stay on task and in-line with what the important issues and factors are
in a negotiation. In Bargaining for Advantage, G. Richard Shell provides a
well-structured framework to follow in planning for a negotiation. For this
reason, I used Shells negotiation preparation framework to plan for the
negotiation between Rapid Printing Company (Rapid) and Scott
Computers, Inc (Scott).
The first step to prepare for my negotiation is to outline the actual problem.
While at first the problem seems to be relatively straight forward, upon
thinking on it further it becomes a bit more ambiguous. The initial problem
seems to be that Rapid is unsatisfied with the product we sold them
because they cannot operate the program without the necessary
application program, and for this reason they are refusing to make the
agreed-upon payments for our hardware and operating program. However,
upon further analysis, I do not think this is the actual problem. If this was
the problem, it would simply be a matter of using the contract as evidence
of our agreement. The real problem for us is that because Rapid is
experiencing extreme financial difficulty, a judgment against them in our
favor will actually end up costing us money as we will pay significant costs
for the trial and most likely never receive any settlement compensation
from Rapid. For this reason, our actual problem in this negotiation is that
we must negotiate with B.R. Brown from Rapid to figure out a way to settle
the disagreement in a way in which we will still receive the outstanding
payments Rapid owes us, without damaging our reputation from the point
of view of other clients.
The second step in our process is to outline our goals and decision makers.
The first part of this step is to develop a high expectation. I typically
consider this to be my initial offer in order to set the expectations as well as
the other partys frame of reference as high as possible. In this instance,
my initial offer is to settle with Rapid, paying them nothing, but allowing
them to pay only the outstanding payments and then resume their regular

monthly payments to us rather than to pay the full amount immediately as

the contract states. In addition, because we know they need an application
program in order to run the operating program successfully, and because
they are currently experiencing financial hardships until they get the
program running, we will allow them to defer payments until they attain an
application program to work with the operating program (See Appendix A).
Once we get SCPPI through field development, we will offer it to Rapid at
market value so that they can ensure their operating system is running
efficiently. Clearly, this is a bit of a stretch to believe Rapid will even
consider it, but by setting expectations as high as possible; we leave
ourselves more room to negotiate.
My actual bargaining goal in this instance would be to settle the
disagreement by paying nothing to Rapid, but also relieving them of paying
the total amount owed to us immediately. Instead, we will offer for Rapid to
pay only outstanding payments and to defer future payments until they
attain an application program which can work in conjunction with their
operating program and hardware. If they do not attain an application
program prior to SCPPI completing field development, we will offer it to
them at a 10% discount with free installation. Once they acquire an
application program, payments will resume as normal (See Appendix A)
Our bottom line in this case is to settle and cut our losses. Rather than
going through with the trial with little upside and paying $50,000 in legal
fees, we will allow Rapid to breach the contract if they agree to make all
outstanding payments, remove all our operating programs from their
systems, and return all hardware. While this is not ideal, and we will still
incur a loss, the loss will not be nearly as great as if we have to spend
$50,000 in legal fees for a case in which we never realize any settlement
compensation because of Rapid filing for bankruptcy. The most negative
effect this solution will have will be on our reputation with other clients.
In this case, the target decision-maker is the President and Chairman of
Rapid, B.R. Brown. For this reason, we decided to forego meeting with any
lawyers and requested to meet with B.R. Brown directly. This will help to
not only avoid any ambiguity in reaching an agreement, but it will also help
establish a better relationship with B.R. Brown and Rapid.

Potential influencers to B.R. Brown will be his lawyers, consultants, Dee

Williams, and program operators. We already decided to avoid negotiating
with the lawyers and go straight to Brown. However, we may want to look
more into talking with Rapids program operators in order to get a better
idea of what they need in terms of an application program. Also, Dee
Williams from Rapid may have a significant influence being as he is the one
responsible for purchasing our operating program and hardware. Since we
already have an established relationship with him, we may want to consider
talking with him prior to negotiating with Brown (See Appendix A).
Continuing through the planning process, we must analyze the underlying
needs and interests of ourselves and Rapid. One of our needs is to earn
income. Rapid has somewhat of a conflicting interest with regards to this
because a portion of the income we need to earn comes at the expense of
Rapid. Rapid has a similar need earn its own income. In this case, we
actually have a shared interest in Rapids profits because more income for
them means they can afford to make their payments to us. Perhaps, we
could explore opportunities to help Rapid generate income.
Another shared interest between each of us is to find or develop an
application program that works in conjunction with our operating program.
Doing this means increased profits for both of us. We may be able to allow
Rapid to use SCPPI on a trial basis why it goes through field development
and help them to work out the kinks, or we may want to look at finding an
application program from a third party for Rapid to use.
Rapid also has an interest to recoup lost profits from not having an efficient
operating system. This is a conflicting interest with us because they are
looking to recoup these profits at our expense.
The other interest we have is to maintain a strong reputation. We do not
want other clients seeing us as weak or conceding. This seems to be an
ancillary interest in this case, but it could potentially conflict with Rapids
interests depending on the potential settlement. For instance, we make not
be willing make a deal which has no direct financial cost to us, but has a
significant impact on how we are perceived by other clients.

As far as leverage goes in this case, we have quite a bit to work with. We
are currently much better off than Rapid is financially. As much as we want
to settle and avoid going to trial and incurring legal fees, we know that due
to Rapids financial position, they cannot afford to experience lengthy trial
either. While we may experience a significant loss by going to trial, Rapid is
likely to go into bankruptcy.
The actual contract may be our greatest leveraging asset. While Rapid is
arguing that we promised application programming, there is nothing in the
contract that states this, and to our knowledge, there is no conflicting
evidence that states this. For this reason, we must believe that Rapids
lawsuit will not hold up in a court of law (See Appendix A).
As far as possible proposals, we have our initial offer as well as our target
point and resistance point. Our target point is our most realistic proposal
which we prefer most. Our next best option may be to explore options in
which we help pay for the expenses of Rapid acquiring an application from
a third party. While we have no real way of helping Rapid recoup lost
profits, another option may be to help them with networking and acquiring
new, future clients to allow for increased future profits (See Appendix A).
From our perspective the authoritative standards and norms are to follow
the contract set in place. We never made a promise to supply Rapid with
an application program, and the contract does not require us to do so, so
they should not expect us to do so. Both parties agreed to the original
contract, and nothing has changed. Their authoritative standards and
norms may be that June Robertson either promised them, or insinuated
that we would supply them with an application program, and so we owe it to
them. Because we know that our operating program needs an application
program for it to run correctly, we should be providing this to them. Our
counter to this is that while we do not believe Robertson made any promise
to them; even if she did, she would not have had any authority to make this
promise and so it has no substance. If this was to be part of our agreement,
we would have written into the contract.
Concerning third party moves, we have a few. We may want to use Dee
Williams, June Robertson, or the program operators as an audience in our
meeting with Brown. Williams and Robertson may be able to provide more

insight as to what promises Robertson actually made. However, it may be

better for us to distance ourselves from Robertson if she did in fact make
promises, and use her as an excuse for the misinterpretation of our
agreement (See Appendix A).
In this negotiation, we find ourselves in balanced concern situation. The
stakes of interest are high and the value of the relationship is high.
Therefore, we should use problem-solving or compromising strategies. We
may need to mix cooperative and competitive styles when negotiating.
From their perspective, I believe they see it as a balanced concern situation
as well, although, they may see it as more of a transaction situation. I
expect their negotiating style to be somewhat competitive because they are
under such financial hardship, but I think for this reason, it could also be
more compromising.
The best mode of communication in this instance is face to face. In any
other form of communication, too much is susceptible to being lost in
translation and which such a high degree of importance on the relationship,
a face to face meeting is necessary.
In this negotiation, our positioning theme is such, We want to help Rapid
find an application program which works in conjunction with the operating
software and hardware we sold them. In doing this, we want to maintain our
strong reputation and honor our original agreement with Rapid.
Appendix A
I. The Problem
I must negotiate with () to solve ()
II. Goals and Decision Maker
High Expectation (Initial Offer) | Target Decision Maker |
Bottom Line | Influencers |
III. Underlying Needs and Interests

Mine | Theirs |
IV. Leverage
What do I lose if there is no deal?What steps/alternatives will reduce these
losses? | If no deal, what will they lose?Can I influence their alternatives or
make their status quo worse? |
Leverage Favors: Me |
V. Possible Proposals
|
VI. Authoritative Standards & Norms
Mine | Theirs | Counter Arguments |
|||
|||
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VII. Third Party Moves
|
VIII. Situation & Strategy Analysis
Situation as I see it: Balanced ConcernsMy basic style:I need to be more ()
in this situation. | Situation as they see it: Balanced ConcernsTheir
expected strategy: |
IX. Best Modes of Communication
Face to Face, Second best is teleconference (no agent, email) |
X. Overall Positioning Theme
|

During this deferment, the total owed to us will accrue interest until Rapid
can begin making payments to us once again. This will entice Rapid to
make their payments if at all possible.
Once they acquire an application program, all outstanding payments will be
due within 15 days, and we will re-establish the original payment plan.
The problem with talking with the program operators or Williams is that
Brown will not want a company he is in a lawsuit with talking to his
employees. One alternative may be to check if Brown would like to bring
Williams or the program operators with him, but I think for this meeting it
would be best to keep it between us and Brown.