Reflective Journal on negotiation Essay
In the past four weeks, my study group members and me had took part in three negotiation simulations. The first one is that we are Newcastle local car dealer and want to sell used car to Japanese international student ( other group ).In this negotiation simulation, we keep our price first, let other group know the market price of this kind of car and let them give the price in their mind, then base on this price we give a 25% higher price with 1 year volunteer to them.In this negotiation, our strategies is Let the other party bid.( Benton, W. C ). Though in Then in the next week negotiation simulation we play a famous person Ltd versus Stephenie Meyer, and ask booksellers spread our book.At this time we tell booksellers what we want first and regard this advace as lowest line.
Finally, we got much more than what we want $1.2 million as royalties and $20,000 contract signing bonus. In this negotiation simulation, the strategy we used is giving out what we want and increase the price step by step.(Clark, Ruth Colvin).But in this negotiation our group member have some problems in interaction. The price of what we want is not deal down, so in the negotiation we have some mistakes in talk with other group. We have to make good communication next time. In the week ten we made another negotiation about resort redevelopment in Hinchinbrook Island. We are Japanese developer, At first we do not make a good communication with each other group member , so there are many mind about the contract payment and employment problem in our team.
After noticing this problem, we hold a short meeting to unify the mind in those problems. Then we made a deal very quickly with other group. First year , we pay $20 million as contract payment;Give profit to local community from 1% to 5% in next five years and after five years leave 5% profit to local community each year. We also must employ 40% resident who correspond our requirement and promise to keep 40 hours work a person each week.In this negotiation, we give a big cake to opposite side let them think it is better than what they think.(Monden, Yasuhiro ).
Before the final negotiation simulation our group have hold three meetings,first meeting we analysed to the responsibility of each role in this negotiation and made each member know which role is suit for him.In second meeting, we reach the information what we want in each role. And third meeting we organized the informations which found by each group members and made a plan to the final negotiation simulation. I play the C.F.O of Zijing Mining in the final negotiation simulation. I reached the finance information from Authoritative third-party research institutions like J.P.Morgan and the company reports.I found that from 2011 the growth rates of Zijing Mining in net sales, EBITDA,EBIT, Earning before Tax, Net Income and Cash Flow are all keep 100% increase.
After the Company acquired 89.15% interest in Norton Gold Fields Limited, the enterprise value of Zijing Mining Group Co. Ltd increased to 8127.51 million USD.The Profitability Ratios for Zijing Mining is higher than other Mining group companies.Its ROA keep 8.71% increase,ROE take 19.59% increase each year and ROCE also keep high speed about 16.78% in last 5 years.Although Rio Tinto Limited is the investor, all the company data is lower than Zijing Mining.I think this is one point of this negotiation we can get more value from Tinto. Financial Summary
From 1 January 2013 to 31 March 2013,this three months the net income of Zijing Mining had increased 28% about RMB 11.77 billion and net sales growth increase 21.76%.This is the reason why we want to more investment from Tinto. According to these information I made a plan that we can give the highest growth rate is 23% to Tinto and the return of investment based on the technology about mining Tinto can support. Part 3
In the final negotiation our team work is not good enough. At the time that introducing ourself and our roles, the voice of our team members is small our group can’t get the point quickly. But luckily, at the negotiation time we can show our mind clearly to other group. Through 20 mines negotiation, finally we made a deal with $500 million sell 51% share to Tinto, close 27 mine and lay off 1000 employees. We ask training of 100 Chinese engineers in safe mining technology and they support all the technologies about mining to Zijing Mining.
From this final negotiation, we know information plays a very important role in the negotiation, the less informations you got, the other side will know about your weakness, so the better will be your position (Luecke, 2003, P4).We should do more preparation before the negotiation, reach the information from Authorities. Therefore, I will pay more attention in studying negotiation skills and reach more value books to enlarge my negotiation skills, and I will also improve my communication skills from the books and practice in the real world. I always believe as long as keep learning the skills will be made progress in the future. Appendix
Luecke R (2003). Negotiation. Boston:Harvard Business School Publishing Corporation.
Benton, W. C (2010). Construction purchasing and supply chain management / W.C. Benton, Linda F. McHenry .
Clark, Ruth Colvin (2011).E-learning and the science of instruction : proven guidelines for consumers and designers of multimedia learning / Ruth C. Clark, Richard E. Mayer .
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