Cascade Manor Post Negotiation Analysis

Cascade Manor – Post Negotiation Analysis

Introduction

Cascade Manor was an interesting exercise because it was our first multi-party negotiation case. The roles were as follows – Chief Planner and CFO of the City of Bainbridge vs VP and CFO of Alki Corporation. I was playing the role of the Chief Planner of the City of Bainbridge. According to the details given to me, Bainbridge is suffering due to a depressed economy and the approval of the Cascade manor residential project could help in resolving the economic conditions of the city. I have no knowledge about the kind and depth of information my partner, The CFO of the city of Bainbridge possesses or what the priorities or restrictions of Alki Corporation are.

Control

The Cascade Manor negotiation had two levels of control. The first was between my partner and me and the second was between us and the officials from Alki Corporation. In order to appear as a cohesive team in front of the opponents, my partner and I discussed our priorities before we faced the Alki Corporation officials. We separated the topics each of us would take lead on during the actual negotiation. The distribution of control between us partners was easier because even though we had a level of separate information given to us, our final goal was to make $1MN in net revenue for the city of Brainbridge.

During the actual negotiation, the Alki Corporation officials controlled the negotiation in the beginning when we made demands beyond our target. For example, although we knew that most profitable open space would be at 30%, we started off with a demand for 40% open space although 40% was less favorable than 30%. This was my partner and my strategy to test the waters. We knew that Alki Corporation would not benefit from open space but we wanted to know their resistance level for the space. One good thing during our negotiation was that we began the conversation by asking Alki corporation officials what is most important to them – to which they replied lower taxes. Thus, by using lower taxes as a leverage point, we controlled the negotiation to make it work in our favor.

Critical Factors

The critical factors that governed this negotiation and their respective effects were as follows –

1. Shared goals with partner – My partner and I, both, ultimately cared about generating $1MN in net revenue for the city of Bainbridge without any particular specifications of what the constituents of the pie are.
2. Early knowledge of opponent’s point of leverage – As mentioned before, we identified the opponent’s leverage point i.e. taxes. They were very sensitive to lowering taxes and we used this point as bait to make them agree to terms that would give us the maximum profit. This approach is great because by achieving this sort of transparency in the beginning, itself, if both parties realize that they don’t have conflicting interests, it becomes easy to achieve a mutual agreement.
3. Flexibility to make changes – we had close to six parameters to be negotiated i.e. open space, height, sub-contractors, inspectors, low income housing deal and taxes. Each of these parameters had enough points of flexibility to toughen or sweeten the deal.
4. Information – This negotiation was a great example of real world negotiation because as much as it replicated the possibility of missing information, it also provided ample information to take decisions and give the opponent enough room to wiggle. For example, knowing that 4 storied buildings are optimal is great, but knowing that 8 storied buildings lead to a loss of $250K is important too.

Differentiating Factor

This negotiation exercise was different because it was multi-party. Although this exercise was on the similar lines of Bullard Houses case, it was different because it had two representatives of the city, negotiating a deal with two corporate professionals to bring maximum profits to the city. The level of authority, the depth of information and the common goals make this a different case than the ones discussed before.