Coca-Cola’s Sustainability Initiatives a ‘refreshing’ Move?

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focal point Salient number, figure, or value in a negotiation that appears to be valid but is actually arbitrary and/or has no basis in fact.

hidden table The negotiations that take place behind the scene between a principal and his or her constituents.

linkage effects A phenomenon that refers to the fact that some negotiations will affect other negotiations; i.e., resolutions in one situation will have implications for a future situation.

monolithic party A member of a group that acts as a single unit; i.e., there is no divergence within the group.

Mixed-motive enterprise A negotiation involving both cooperation and competition.

overconfidence effect Refers to unwarranted levels of confidence in people’s judgment of their abilities, the likelihood of positive events, and underestimates the likelihood of negative events.

party A participant in negotiation. Parties can be individuals, groups, organizations, communities, or nations.

positional negotiator A person who determines a set of terms desired in a negotiation, presents those terms, and refuses to budge on any dimension of any issue.

ratification Approval of a contract by a body or group not necessarily present at the negotiation table.

reactive devaluation The tendency for people to devalue an option previously considered to be more attractive, merely as a consequence of it being offered by the counterparty.

reference point What a person considers to be a gain or loss.

reservation point The point at which a negotiator is indifferent between reaching a settlement and walking away from the bargaining table.

risk aversion Preference for a sure thing rather than a gamble that has an equal or greater expected value.

scarce resource competition Conflict or competition that exists when people perceive one another as desiring the same limited resources.

strategic risk The relative risk levels of the tactics that negotiators use at the bargaining table.

sunk costs Money invested that cannot be recovered.

sure thing principle A principle that states that if alternative x is preferred to y, in the condition that some event, a, occurs, and if x is also preferred to y in the condition that some event, a, does not occur, then x should be preferred to y, even when it is not known whether a will occur.

target or target point The ideal or upper limit of what a negotiator expects to get out of a negotiation. Also called the aspiration or aspiration point.

time horizon The amount of time between the negotiation and the consequences, or realization, of negotiated agreements.

winner’s curse A situation in which a negotiator makes an offer or requests something that is immediately accepted by the opponent.

Suggested Exercises and other materials

- EXERCISE: The Biopharm-Seltek Negotiation

- by Leonard Greenhalgh

- Biopharm-Seltek is a distributive negotiation over the sale of a manufacturing facility that produces genetically-engineered compounds. Negotiators are given information about the costs of their alternatives, but have to determine aspirations, reservation prices, and opening offers themselves. There are no teaching notes; however, the teaching notes associated with Coffee Contract (see suggested cases for Chapter 3) can easily be adapted for this exercise. Preparation: 10 min. Negotiation: 20 min. Available from Creative Consensus, Inc., P.O. Box 5054, Hanover, NH 03755. Phone/fax: (603) 643-0331.

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- EXERCISE: Coffee Contract

- by Tony Simons and Thomas Tripp

- Coffee Contract is a distributive exercise. It concerns the contract for coffee at the Cornell Hotel School. The exercise provides a good context for teaching fundamental negotiation concepts like bargaining zone, reservation prices, and BATNAs, as well as distributive negotiation tactics, openings, concession making, and threats. Creative students may build in some integrative elements, and even if the students fail to find these creative ideas, the instructor can use them to introduce integrative negotiations. Preparation: 15 min. Negotiation: 30 min. Available from the Dispute Resolution Research Center at the Kellogg School of Management, Northwestern University, 2001 Sheridan Road, Evanston, IL 60208. Phone: (847) 491-8068; e-mail: drrc@kellogg.northwestern.edu.

- EXERCISE: Commodities Brokersby Leigh Thompson and Leaf Van Boven

This is a set of three negotiations between two brokers. It is a multiple-time-period, two-party integrative negotiation between two brokers trading four commodities, in which there is risk involved. Participants are randomly assigned to the role of Broker Jones or Broker Smith in the trading of various quantities and grades of wheat, rice, copper, and crude oil. This is an excellent negotiation exercise for illustrating the impact of risk and uncertainty on behavior and performance over time. Preparation: 15 min. Negotiation: 30 min. Available from the Dispute Resolution Research Center at the Kellogg School of Management, Northwestern University, 2001 Sheridan Road, Evanston, IL 60208. Phone: (847) 491-8068; e-mail: drrc@kellogg.northwestern.edu.

- EXERCISE: Energetics meets Generex

- by W. Trexler Proffitt, Jr.

- This is a two-party distributive negotiation based on a real California wind energy farm transaction. It is good for illustrating biases including anchoring and availability. There is the option to provide an outside offer during the negotiation that illustrates the power of BATNA. Preparation: 10 min. Negotiation: 30 min. Available from the Dispute Resolution Research Center at the Kellogg School of Management, Northwestern University, 2001 Sheridan Road, Evanston, IL 60208. Phone: (847) 491-8068; e-mail: drrc@kellogg.northwestern.edu.

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