Lesson Description
At some point in everyone’s life, they are faced with the
need to negotiate. This is an awkward and uncomfortable exercise
for many people. In this lesson, students role play a negotiation
and cite strategies that were used in the negotiation to create
a win-win agreement.
Concepts
trade
negotiation strategies
Related Subject Areas
Communications
Economics
Objectives
Students will:
- identify ways in which
trade makes people better off
- identify
negotiation strategies
Materials
Two copies of Handout 1, Art Supply Store
Visual 1, Strategies to Create Win-Win Agreements
Procedure
1. Prior to beginning the lesson, choose two students to perform
a role play. Assign them parts, and instruct them to read through
the script. In performing the role play, the two students should
be seated at a table.
2. Introduce the lesson by asking students to define the following
words: haggle, quibble, bargain, and dicker. (Students should
recognize that each of these words refer to negotiation, often in
regard to
price.) Ask students to relate instances where they have engaged
in price negotiations or have witnessed a price negotiation. (Answers
will vary, but students should relate events such as their own negotiation
over the price of a car, a barter situation they experienced as a
child, watching a parent negotiate the price of a repair,
negotiation over the price of an item at a garage or yard sale,and
so on.)
3. Explain that negotiations take place to effect a trade. One principle
of economics is that trade makes people better off. Ask students
for examples of trades they made either recently or as children.
(Students might have traded baseball cards or lunches as children.
As young adults, they may have traded other goods or services with
one another, such as trading CDs or trading a CD for help working
on a car.)
4. Ask students if they were ever unhappy with a trade. (Answers
will vary, but some students may indicate that they were unhappy
with a trade.)
5. Ask students who were made worse off by a trade for details of
the experience. Explain that, in these cases, it is likely that they
did not have adequate information about the good or service for which
they were trading. Emphasize that during negotiations, it is important
to gather adequate information.
6. Explain that students are going to witness a negotiation that
takes place at an art supply store. In this scene, Chris is applying
for a job.
7. When the students have completed the role play, ask the following
questions of the class. When appropriate, direct questions to the
students who played Chris and Manager.
- What did Chris want? (a
job, decent pay, a generous discount on art supplies, not to
ride the bus to work)
- What did Manager want? (an
experienced and reliable employee, artists on his staff, to increase
sales)
- What information did Chris gather from Manager? (Chris
determined the wage rate and the store’s discount rate. He also determined
that Manager was looking for someone with experience.)
- What information did Manager gather from Chris? (Manager
determined that Chris had experience in sales, was an artist,
and wanted
to work closer to home.)
- Initially, what kept Chris and Manager from making a deal?
(the lower hourly wage)
- How did Chris and Manager begin to get past that problem?
(Manager acknowledged that no one should be expected
to take a pay cut.)
- What options did they generate to address the wage
problem and satisfy their interests? (Manager
offered raises
after three and six months;
Chris offered to demonstrate new art materials.)
- What would have happened if they had not reached
an agreement? (Chris would continue to ride
the bus to
his old job,
he would continue
to receive a low employee discount, but he would
work for a higher hourly wage. Manager would miss
two opportunities – hiring
an experienced employee who would be on time and increasing sales
by demonstrating new products.)
- Provide some
examples of instances in which the parties demonstrated that they
were listening
to each other?
(Answers will vary,
but students may respond with the following points:
Manager empathized
with Chris’s
negative experience in taking the bus; Manager
recognized that Chris couldn’t be expected
to take a pay cut and suggested that they work
something out; Chris recognized that the store
had
policies
in regard to wages, so he suggested a plan for
raises.)
- Describe the final agreement. (Chris
would receive periodic raises and a higher hourly wage when
he does demonstrations.)
- How did the
information Chris gathered from Manager help Chris in negotiation?
(Chris
understood that Manager wanted someone
with experience
and was impressed that Chris was an artist.
He
used this information to negotiate periodic
raises and a higher wage for demonstrations.)
- How did the information
Manager gathered from Chris help Manager in negotiation? (Manager
ascertained that Chris
wanted to avoid
a bus ride and was interested in the store’s
relatively large discount. Manager used
this information to negotiate a
lower initial
wage for Chris.)
- In what ways was Chris made better off?
(He got a job closer to home, he
got a larger
discount, and
he got
to use his
skills in demonstrations.)
- In what ways
was Manager made better off? (Manager got an experienced,
reliable employee.
He got
an employee who could
bring in business
on slow days by providing demonstrations
of the art supplies.)
8. Explain that negotiations take place all of the time between
people with many different types of relationships, such as parent
and child, buyer and seller, employer and employee, labor and management,
Congress and the President.
9. Define negotiation as the give and take process of bargaining
to reach an agreement. Explain that, generally, negotiations are
not one time events. They establish or foster ongoing relationships.
That’s why a win-win outcome should be the goal. Negotiating
is a collection of behaviors combing communication skills, psychology,
sociology, economics, and conflict management.
10. Explain that each party in a negotiation has certain interests.
Interests are the goals each party would like to reach. In negotiation,
it is important to listen for clues about each others’ interests.
11. Explain that sometimes the interests of each party become obscured
by the parties’ stated positions. For example, Chris took
the position that he would not take a pay cut. Manager took the
position
that all new employees must start at minimum wage. The conversation
between the two parties could have ended at the time that each
of these positions were made known.
12. Ask students to explain how Chris and Manager got beyond their
positions to discover each others’ interests. (Chris listened
carefully to all of the things Manager said and asked questions for
clarification. As a result, he discovered that Manager’s interests
were to hire someone who was experienced and reliable as well as
boost business on slow days, so Chris asked
about periodic wage increases and the possibility of art demonstrations
to bring in business on slow days. . Manager listened carefully
to what Chris said and asked questions for clarification. As a result,
he discovered that Chris had an interest in working closer
to home, but could not accept a
pay cut. Manager offered other benefits, such as a large discount
and a higher wage for demonstrations.)
13. Present the following scenario to the class.
Two children are arguing
over an orange. “It’s my orange!” screamed
one of the children. “No, it’s my orange!” yelled
the other. Dad enters the room and decides to help the children
out by cutting the orange in half and giving a portion to each
child.
But, neither child is happy. One of the children wanted the orange
peel to make marmalade, while the other wanted the pulp to make
juice.
14. Ask students the following questions:
- What was the children’s
stated position? (They both stated they wanted the orange.)
- What was each child’s interest? (One
wanted the peel, and one wanted the pulp.)
- What outcome would have created a win-win agreement? (One
child could have received the entire peel, the other could have
received the
entire pulp.)
Closure
Display Visual 1, Strategies to Create Win-Win Agreements.
Discuss each point in general and then specifically as these strategies
apply
to the Art Supply Store negotiation.
- Separate the people from the problem. Try to learn how the other
party sees the situation. Be aware of emotions.
How did Chris and Manager
use this strategy to create a win-win agreement? (Answers will
vary, but two suggested answers are as follows:
Manager saw Chris’s situation. Chris wanted to work closer
to home. Chris saw Manager’s situation in that he wanted an
experienced salesperson. Both Chris and Manager remained calm and
stated their positions and their wants. Neither yelled, pounded the
desk, or left in a huff. Remaining calm and focusing on the problem
at hand helps move the negotiation along.)
- Focus on underlying interests,
not positions. Ask, “What do
you really want?” and “Why do you want it?”
How did Chris and Manager
use this strategy to create a win-win agreement? (Answers
will vary, but students could respond that
Manager recognized that Chris wanted a job closer to home.
Chris stated that
he really wanted the job. Manager sought solutions to hiring
Chris by focusing on his store’s location and ways to improve
wages.)
- Invent options that are good for both sides. Try to identify several
approached to solving the problem.
How did Chris and Manager use this strategy to create a win-win
agreement? (Possible answers are that Chris suggested
periodic wage increases and art demonstrations.)
- Agree on solutions that will be acceptable to both sides. To minimize
the change of misunderstandings, make the agreement as specific as
possible outlining who, what, when, where, and how.
How did Chris and Manager use this strategy to create a win-win
agreement? (Chris and manager specified a time frame
for wage increases, the amount of the increase, the store
discount, the time frame for
demonstrations, and the amount of compensation for demonstrations.)
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