Negotiation Strategy Article Analysis

Negotiation Strategy Article Analysis

Negotiations and how they are conducted can drastically affect an individuals’ personal and professional future. The strategies employed for a negotiation can influence the outcome of a negotiation. Using two articles about different types of negotiation, the following will describe the negotiation processes for each situation, and compare and contrast how they could apply in a typical work setting (UOPX, 2012).

Professor Lax Buys His Dream house

The first article, “Professor Lax buys his dream house,” is about David Lax’s, a former Harvard Business School professor and current owner of a consulting firm, efforts to buy his “dream house” and the strategies he used to close the deal (Koselka, 1996). The asking price for this house was $379,000, but Lax wanted to acquire it for less (Koselka, 1996). The seller was an 87-year-old woman who recently moved into a nursing home and would like to move back into the house in the event the nursing home situation did not work out (Koselka, 1996). Using his negotiating skills, Lax decided his strategy in this situation would be to “worsen the seller’s other alternatives” (Koselka, 1996, para. 3). Working in Lax’s favor was that he was in no rush to move, he did not have to move, his children were too young for school, and the seller refused to close the deal before September (Koselka, 1996). Factors working against him were competing offers by those who wanted to close the deal sooner and if not careful, his offer could be used by the seller to bolster the price of the (Koselka, 1996).

To prepare for the negotiation, Lax investigated the seller and discovered that one of her sons-in-law was a former chairman of the major Wall Street investment firm Drexel Burnham Lambert and another was financier Dean Witter III (Koselka, 1996). Knowing that the seller was well represented, he carefully drafted an initial offer of $325,000 with the stipulation the if his offer was accepted the seller would sign an agreement to reimburse expenses incurred by him should she terminate the deal and return to the house, and she had to agree not to negotiate with any other interested parties until their negotiations were concluded (Koselka, 1996). This would allow the seller to back-out of the deal and reimburse Lax for his inconvenience (Koselka, 1996). Furthermore, the contract would ensure Lax’s bid would be considered first, it would reduce the chance that the seller will accept other bids, and dissuade others parties from bidding because their offers would not be considered before September (Koselka, 1996). In the end, Lax’s strategy proved successful; the deal was finalized in November for $348,000 (Koselka, 1996).

How the Reds Got Junior

The second article, “How the Reds Got Junior,” is about major league baseball player