MBA506 Thinking Styles, Negotiation and Conflict Management

Negotiation & Report (Purchase)

Stage 1: Pre-negotiation

1. Thinking Style Preference

Theory of mental self-government depicts that the thinking style can be assessed from the constructs from an individual's notion of government. According to Heidar and Nikomaram (2018), this theory can be used to understand various functions such as thinking style-form, scope or levels. Thus, I have used this theory of mental self-government to identify my thinking style form as well as my thinking style scope. Based on my self-assessment I have come to the understanding that the attributes of my thinking style align with the Monarchic thinking style form. This is because I tend to allow my complete focus into one issue or task until it is completed before moving to the next task. However, this task-focused nature has an influence on my thinking style scope because I have found that I have an Internal thinking style scope. This is because I am an introvert individual and I feel that my productivity increases when I am left alone or working independently without any external intervention.

2. Optimality of Thinking Style Preference

Abdulkhaliq and Al-Halawachy (2019) have stated that thinking style derives from our notions of government or organisational capability and this thinking style preferences are the reflection of the technique we use to govern ourselves. Therefore, the findings from the evaluation of my thinking style have revealed that I have a Monarchic thinking style form. Now, this style form can be suitable for my negotiation style as monarchic individuals focus on a task until it is completed. Therefore, in a similar view, it can be stated that I involve myself to acquire a result from any negotiation I have involved myself with. This, as a result, tells me that I have an optimal thinking style form to conduct a successful negotiation as a purchasing agent. 

On the other hand evaluation of my thinking style scope has revealed that I have an Internal scope. My assessment and understanding suggest that this scope is applicable to carry out negotiation as I can independently take decisions based on the situation to be persuasive towards the other involved parties. Thus, my findings suggest I have an optimal negotiation capability to be a purchasing agent.

3. Adjustment Requirements

My evaluation suggests that I have a good amount of negotiation skill and which is suitable to conduct negotiations. However, my understanding is that I still need to improve my negotiation skill and thus my thinking style form and scope requires adjustments. According to Marsden and Siedel (2017), understanding the concept of BATNA is important learning for a successful negotiator as it helps a negotiator to navigate when bargaining. Hence, I will focus on the incorporation of the likely BATNA of the individual or organisation with whom I am negotiating in the future. Furthermore, other factors such as listening carefully to other parties is also an important aspect where I can improve as it will help me to explore other possibilities based on the identification of their needs. Another area I need to improve or make adjustments is the preparation of the alternative goals, thus when a negotiation is not proceeding favourably I will be able to transform my goals accordingly.

4. Client's BATNA and Reservation Value

For this present negotiation or the property deal in question, my client was Farnsworth Property Trust and they were willing to purchase a commercial property at 63 Bradury Street, Mooroolbank, Melbourne. However, eventually, this purchase query resulted in a series of bargaining for the property and required my client to adopt BATNA. BATNA stands for Best Alternative to a Negotiated Agreement and widely being used by the negotiators to ensure alternate viability for a deal (Thompson, 2020). My client Farnsworth Property Trust was offered a price point of AU$ 17.5 million for this property in question and based on the depreciation rate I countered this asking price and offered AU$ 16 million for the property. The reservation value for my client was a price point below the AU$ 17.5 million marks. The seller of this property Pasehndale Holdings Ltd came through and negotiated for AU$ 16.5 million which is significantly lower than the price of a property in this area which ranges between AU$ 16.5 million and AU$ 17.5 million.

5. Other Party's BATNA and Reservation Value

In this case, the other party was the seller of this property, Pasehndale Holdings Ltd. Similar to my client Farnsworth Property Trust, they had also involved themselves into a series of bargains or negotiations for this said property in Melbourne. However, the desired value from our seller was AU$ 17.5 million and which we countered with a price point of AU$ 16 million. To which our seller also responded and countered our offer with a price point of AU$ 16.5 million. This, as a result, demonstrated the presence of BATNA in our seller's case as well. Because of which they shifted to an alternate negotiation and offered the new price point of AU$ 16.5 million. This AU$ 16.5 million is the reservation value for the other party as a result.

6. ZOPA Range

According to Alamanda et al. 2018, the considerable bargaining range is considered as a common ground for both parties involved in a negotiation and this is what is called ZOPA or Zone of Possible Agreement. ZOPA overlaps between the buyer's and seller's settlement range. In this case, the ZOPA range for my client was anything below the AU$ 17.5 million price point for this said commercial property. The ZOPA range for the seller started from the price point of AU$ 17.5 million initially. As a result, based on this ZOPA range, a common ground was developed which also resulted in the bargaining proceedings for this deal.  

My strategy was to identify the areas which disseminated the logical stance behind the negotiation such as the mention of property depreciation rate in this area.

Stage 2: Negotiation

In this current case, I acted as a purchasing agent for a company named Farnsworth Property Trust. My client informed me that they are looking to purchase a commercial property at 63 Bradury Street, Mooroolbank, Melbourne and they are looking for a price point of anything below AU$ 17.5 million. However, the commercial properties of their required size are valued between AU$ 16.5 and AU$ 17.5 million in this location. However, a suitable commercial property went for sale in this location and the seller was Pasehndale Holdings Ltd. I contacted the sales agent, Mr Nayan, on behalf of my client and communicated my client's interest in this property.

Mr Nayan notified me and my client that the asking price for this commercial property is AU$ 17.5 million, however, my client Farnsworth Property Trust asked me to negotiate the price thus, I offered the seller a price point of AU$ 16 million. As my contact point with the seller was Mr Nayan, I notified about the price my client is willing to offer for this property. However, the vendor company, Pasehndale Holdings Ltd. reached out and stated that the average rate of commercial property of their size is valued between AU$ 16.5 million and AU$ 17.5 million and their alternate negotiation price for this property is AU$ 16.5 million [Refer to Appendix].

Based on this progress I notified my client and informed them that this new price point is an excellent proposition as the sales agent Mr Nayan had communicated the right information as the average price point is higher than the asking price. Thus, my client notified me they are comfortable with the new price point of AU$ 16.5 million. Therefore, I notified Mr Nayan that my client has agreed with this price and the seller should start the legal proceedings for this deal.

Stage 3: Post Negotiation

Appendix

1^st May 2020: Mail 8: Purchase agent to Sales agent

6^th May 2020: Mail 11: Sales agent to Purchase agent

(Seller)

Stage 1: Pre-negotiation

1. Thinking Style Preference

According to Heidar and Nikomaram (2018), there are four different forms of thinking style based on the Theory of Mental Self-Government and they are Monarchic, Hierarchic, Oligarchic and Anarchic. Based on my understanding I have an Oligarchic thinking style as in certain situations I allow working with a competing approach. Furthermore, I am also capable of handling or managing multiple tasks within a certain period of time and can prioritise based on their necessity. Thus, based on these attributes it can be stated that I have an Oligarchic thinking style.

Now in terms of my thinking style scope, there can be two scopes: Internal and External (Lane, 2017). Based on the analysis of my thinking style and the attributes of these scopes, I have identified that my thinking style aligns with the external scope type. This is because I prefer to work with others and am comfortable within a group setting. Hence, my self-assessment suggests that while I have an Oligarchic thinking style, the scope identified to be external.

2. Optimality of Thinking Style Preference

If I apply the theory of self-government to assess my negotiation capability and evaluate my thinking style form and thinking style scope then my understanding that I have required competencies to conduct a sales negotiation. In this regard, Kurbanov et al. (2016) have stated that the type of self-government we possess is not merely coincidental but rather external reflections of ways through which we can govern or organise ourselves. In a similar notion, this argument is applicable in my case as well and attributes are bound to be visible in my negotiation and thinking style.  

My evaluation has demonstrated that my thinking style form is Oligarchic as I am capable of managing multiple goals or tasks and I can prioritise among them to reach the desired goal. This, as a result, demonstrates that I can adapt myself in accordance with the necessity during negotiations. Thinking style scope, on the other hand, depicted I have an external scope which is required for a sales agent as I can comfortably work with a group of people as such negotiations tend to have multiple parties involved.

3. Adjustment Requirements

Even though the previous discussion of evaluation suggests that I have an optimal thinking style to conduct negotiations, there is still room for further improvements. Therefore, going forward I will be focusing on the further development of my negotiation style. First of all, I need to be involved in more negotiation as it will enhance my thinking style and will help me to perceive areas which can be utilised to carry out successful negotiations. As Parker et al. (2019) have argued, I need to take a more proactive approach towards the negotiation as well. Such an approach will help me to identify the key areas or the opportunities and will enable me to utilise information which I failed to perceive earlier. Furthermore, I will give importance to the concept of BATNA as it will enable me to carry out an explicit translation process while bargaining or negotiating and will ensure that I am flexible with the flow of the entire process.

4. Client's BATNA and Reservation Value

Best Alternative To a Negotiated Agreement or BATNA is stated to be one of the advantageous alternatives which can be undertaken by a negotiator if the negotiations fail (Kappy, 2019). In this case, my client Pasehndale Holdings Ltd was willing to conduct a sale of commercial property at 63 Bradury Street, Mooroolbank, Melbourne. However, as the negotiation to sell this property progressed the requirement for BATNA became apparent as the desired negotiation value did not fall through and thus the requirement for the alternative negotiation.

The desired value for this commercial property was AU$ 17.5 million, however the purchaser Farnsworth Property Trust did not agree with the desired value and was willing to wrap up the deal in AU$ 16 million. This, as a result, triggered the requirement for the alternative bargaining and the asking price to the Farnsworth Property Trust was AU$ 16.5 million which was the reservation value as per my client's BATNA.

5. Other Party's BATNA and Reservation Value

The purchasing company in this deal was Farnsworth Property Trust as they wanted to purchase this property from my client Pasehndale Holdings Ltd. As my client had a BATNA for this property deal negotiation, the purchaser company also had a BATNA in effect as well. However, a series of bargaining about the price point for this property had required my client and me to reconsider our asking price point and rely on our BATNA. Similarly, the other party or the purchasing company also switched to an alternate negotiation in order to carry out this bargaining process.

While the purchasing company asked for AU$ 16 million deal for this property, my client denied this price point and reinitiated the negotiation for AU$ 16.5 million. The purchasing company agreed to this price point and this, as a result, demonstrates that the reservation value of the other party was a price point which is below AU$ 17.5 million, the initial asking rate.

6. ZOPA Range

While conducting this deal I was aware of both BATNA and ZOPA which are the most important aspects of negotiation. Therefore, as I was aware of BATNA, I also identified a ZOPA range based on my interaction with my client. The ZOPA range for this selling deal for my client was between AU$ 16.5 million and AU$ 17.5 million. This is because the price range for commercial property of this size is generally between AU$ 16.5 and AU$ 17.5 million. However, based on the negotiation process with the purchasing company the final selling value for this property became AU$ 16.5 million, which is within the ZOPA range of my client.

My strategy during this negotiation was to identify the price range of commercial property in this region, which can reach up to AU$ 17.5 million.

Stage 2: Negotiation

In this property deal, I was the sales agent for Pasehndale Holdings Ltd. My client Pasehndale Holdings Ltd was willing to sell their commercial property situated at 63 Bradury Street, Mooroolbank, Melbourne. Even though the commercial property of this site is being sold at a price range of AU$ 16.5 and AU$ 17.5 million in this location, my client Pasehndale Holdings Ltd. decided for an asking price of AU$ 17.5 million due to the fact that this property was becoming to be financially non-lucrative for my client. Thus, my client was willing to liquidate this property, thus the decision to sell this property.

The purchasing agent for the purchasing company Farnsworth Property Trust was Mr Ahmed Kumar and he was my contact person to reach the purchaser party. During the first stage of this negotiation, purchase agent Mr Ahmed Kumar notified me that his client was interested in the property, however, they would offer a price of AU$ 16 million for this property in question [refer to Appendix]. Based on this communication the second stage of this bargaining or negotiation began. 

As I informed my client about the bargained value of this property, I was told to negotiate as the property value in this area ranges above AU$ 16.5 million and up to AU$ 17.5 million. However, considering the circumstances the final asking price point was AU$ 16.5 million, which I communicated to the purchasing agent promptly. Based on the communication between me and the purchasing agent Mr Ahmed Kumar the purchasing company Farnsworth Property Trust agreed with the new price point and the deal came through with a series of successful negotiations. Overall, both parties benefited as my seller needed to liquidate the property, whereas the purchaser was looking for a commercial property at a lower than average price point in this area.

Stage 3: Post Negotiation

Appendix

1^st May 2020: Mail 8: Purchase agent to Sales agent

1^st May 2020: Mail 9: Sales agent to Vendor company

6^th May 2020: Mail 10: Vendor company to the Sales agent