1. A negotiation story – a possible joint venture
What lessons can we learn about negotiation and about negotiating strategically?
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2. A possible joint venture - the story
Two airline CEOs sign an MOU
The project teams build a trust relationship and sign a confidentiality agreement
The parties put their proposals but fail to agree; the negotiations end in disarray
A third party intermediary helps rebuild the process; agreement is reached on the substantive issues, which left the financials to agree upon and …

3. A possible joint venture - the story
and …
The European airline puts its financial offer on the table, as does the Asian airline
The two positions are far apart
Rather than enter into negotiations on price, the European airline walks away
How can we tell whether this was the correct decision?

4. A possible joint venture – the strategic analysis of the end-game, 1
From the European airline’s perspective, what does our context tell us about the strategy factors?
Importance of the issue to self
a project for strong growth, CEO vision
Concern for other’s outcome
low instrumentality, contingent only on the benefits from the proposed joint venture
Expectation of other’s strategy ??
Time pressure
internal momentum but no external deadlines
Quality of alternatives
other projects and opportunities (but not in China)

5. A possible joint venture – the strategic analysis of the end-game, 2
From the European airline’s perspective, what do the strategy factors suggest would be the appropriate strategy? So …
Importance of the issue to self
a project for strong growth, CEO vision
Concern for other’s outcome
low instrumentality, contingent only on the benefits from the proposed joint venture
Expectation of other’s strategy ?? ??
Time pressure
internal momentum but no external deadlines
Quality of alternatives
other projects and opportunities (but not in China)
high
low
low
good

6. A possible joint venture – the strategic analysis of the end-game, 3
From the European airline’s perspective, what strategy do we expect the Asian airline to take? To answer this we must analyse their situation, so …
From the Asian airline’s perspective:
Importance of the issue to self (i.e. to them)
strong growth project, had made major concession to enable negotiations to continue
Concern for other’s (i.e. our) outcome
low instrumentality, contingent only on the benefits of the proposed joint venture
Expectation of other’s (i.e. our) strategy
has made the major concession on systems, will expect this to be matched
Time pressure
internal pressures not to concede increasing
Quality of alternatives
other projects and opportunities (but not in China)
high
low
concede
low
good

7. A possible joint venture – the strategic analysis of the end-game, 4
From the European airline’s perspective, now we have an understanding of the other party’s likely strategy, we can now complete the assessment of the strategy factors:
Importance of the issue to self
Concern for other’s outcome
Expectation of other’s strategy
Time pressure
Quality of alternatives
high
low
contend
low
good

8. A possible joint venture – the end-game
The European airline
What do the strategy factors suggest?
Strategy factor
Importance of issue to self
Concern for other’s outcome
Expectation of other’s strategy
Time pressure
Quality of alternatives
high/low
low
high
contend
poor
high
low
concede
good
high(ish)
high
compro-mise
poor for both
high
compro-mise
low(ish)
good for both
high/low
concede contend compromise
high/low
good/poor
A possible joint venture – the end-game
concede
contend
clear cut compromise
creative compromise

9. A possible joint venture – end-game
The European airline
What do this suggest about how the negotiations will unfold?
Strategy factor
Importance of issue to self
Concern for other’s outcome
Expectation of other’s strategy
Time pressure
Quality of alternatives
high/low
low
high
contend
poor
high
low
concede
good
high/low
concede contend compromise
Deadlock?
high/low
good/poor
A possible joint venture – end-game
concede
contend

10. A possible joint venture – changing the strategy factors?
What might the European airline do to change the factors impacting on the Asian airline which might then change the Asian airline’s intention to contend?
The importance of issue to them
Their view of the outcome’s importance to us
Their view of our expected strategy
The time pressure they are under
The alternatives they have
high: reduce it?
unlikely
low: raise it?
only by improving instrumentality value
concede: contend?
we will contend
low: increase it?
no external leverage which does not also impact on us
good: worsen them?
no immediate leverage, same industry context as us

11. A possible joint venture – end-game
The European airline
It appears that not much can be changed. So …
Strategy factor
Importance of issue to self
Concern for other’s outcome
Expectation of other’s strategy
Time pressure
Quality of alternatives
high/low
low
high
contend
poor
high
low
concede
good
high/low
concede contend compromise
Deadlock!
So be prepared to walk away rather than concede
high/low
good/poor
A possible joint venture – end-game
concede
contend

12. A possible joint venture – the end
The European airline puts its financial offer on the table, as does the Asian airline
The two positions are far apart
Rather than enter into negotiate on price, the European airline walks away
Was this the correct decision?
A good negotiator is one who knows when to walk away rather than reach a poor agreement. 

13. Strategic negotiating in practice
Make enough noise and they will give you anything just to shut you up!