ECommerce Essay Example | Topics and Well Written Essays - 1000 words

ECommerce - Essay Example It is evident that many companies now realize the importance of websites as a tool to gain market share and improve sales. Most flourishing companies like unique home decor, Paul Michael company, Bensons would not have reached the places they are without their websites (Plumley & Wyrostek, 2011). http://www.horchow.com/: The Horchow management structure consists of activities such as the allocation of tasks, supervision and coordination, which are directed towards the accomplishment of the aims of the company. The company structure mainly participates in the accomplishment of the company goals this is because the company has several dedicated employees whose main agenda is to assist the company to achieve his company's goals. Horchow has several supervisor is in each and every department, this ensures the employees work up to the required standard. This contributes to the making of designing high quality decor products because the management has catered everything governing the emplo yees work. The company uses various business models to make it distinct from other companies. The business models also help to describe the organizational architecture of capture mechanisms, delivery which are employed by the company's enterprise. The company has applied business models such as, collecting intelligence, user generated content, and improving the available systems. It also uses transport services such as airline and private courier services to ensure their products are available all over the continent. The goals of the business are primarily marketing the products on sale and making sure they increase their profits though online sale and delivery. The company also seeks to be capable of running consumer satisfaction surveys so as to assist they gauge their progress. Finally, the ultimate goal is to ensure that the company becomes a reputable and among the most respected and successful in this field of business The website will, therefore, be designed so as to make sur e the company achieves most of its goals in the most efficient way possible. The website will become a partial platform for the marketing department. This is because many people nowadays depend on the internet for many things, making it an easier place to access customers. The products will be marketed by posting them on the website and giving information on the latest home decors awaiting release and those already in the market. In order to enhance marketing, the company will have to alias with the most visited websites and have accounts in social platforms such as Facebook, linked in, twitter and MySpace among others. Secondly the company will should be able to give customers the ability to purchase items and request them to get delivered to supported locations. The products shall be priced ant the availability of a customer to purchase the items collectively using a virtual card. This will allow them to shop for many products easily. The third aspect of this website is customer s upport. This will be implemented through the creation on the FAQs section, including live customer care care support though chart or voice calls via Skype. This will help improve customer experience because they will be capable to do have choices about the products they purchase, hence improve the company’s reputation. The final part of the website will be the ability to run consumer satisfaction surveys on the website. This will be done by first examining the counter of customers who have signed up to the company’s website. The second method is through the website daily count of the number of individuals who search, or visit the website. The final method is through consumer satisfac

Design a Flowchart Wk.1 Essay Example | Topics and Well Written Essays - 1000 words

Design a Flowchart Wk.1 - Essay Example Most conflict in any situation involves communication breakdown to some extent" (pp. 34). It's important to have clarity in one's life. In this case, the author is obviously upset with the job situation. The author wants to be a freelance writer, because the current bottleneck of the author is the author's job. The author's current job is boring and thankless. There is not enough pay; the author feels underutilized and underappreciated. Moreover, the author feels that the current work the author is doing is not meaningful. Having clarity is a positive thing, because one can have more insight into one's activities and their meaningfulness. Since the author's work is not fulfilling, it is hoped the author can find more meaningful work, therefore. To the author, meaningful work means that the author would have the ability to choose what the author wants to do (in writing, for example). The author would not have to do anything the author did not want to do. Work would consist of being ab le to work at a stay-at-home office, in the author's ideal life. According to Bruner (2002), "The capacity of an integrated or multistep process is determined by the portion of the process with the least capacity, or the bottleneck of the system. Thus, identification and relief of bottlenecks are important issues in process management" (pp. 127). First, one must find out (or identify) the bottleneck. Obviously, the bottleneck has been identified as the author's work situation. The author wishes to do a job that is not problematic. In order to solve the problem of the bottleneck, something obviously should be done. The author, therefore, has decided that the answer to this bottleneck of the work situation is to simply change jobs. Warren (2008) comments, "The theory of constraints (TOC) is astrategy that focuses on reducing the influence of bottlenecks on a process" (pp. 455). According to this theory, this management philosophy-the five focusing steps-can help to reduce the problems inherent in getting rid of a bottleneck. The bottleneck in process described here was that of this author's job. This author wanted to obtain new employment that would be satisfying. Mainly, the problem identified was the author's dissatisfaction with current employment. Current employment would be replaced with a freelance writing job that would allow the author to spend less time working and at the same time earn more money. REFERENCES Bruner, R.F. (2002). The portable MBA. USA: Wiley. Dettmer, H.W. (1997). Goldratt's theory of constraints: a systems approach to continuous improvement. USA: ASQ Quality Press. How delays affect processes and change. (2009). Available: http://www.bizmanualz.com/information/2005/03/24/how-delays-affect-processes-and-change.html. Warren, C.S. (2008). Survey of accounting. USA: South-Western College

What Is New Public Management?

What Is New Public Management? New Public Management, what is it? We have heard the term throughout the first semester and have endeavoured to understand its historical and present relevance as well as its various facets that are supposedly favourable in reforming inefficient public sector enterprises, making them leaner and more efficient. But is New Public Management, all that it is made up to be, is it up-to the tasks it is set, is it the new paradigm for public sector reform in developing countries? These are the questions well be tackling in this paper. The Wikipedia defines New public management (NPM) as a management philosophy used by governments since the 1980s to modernise the public sector. It is a broad and very complex term used to describe the wave of public sector reforms throughout the world since the 1980s. The main hypothesis in the NPM-reform wave is that more market orientation in the public sector will lead to greater cost-efficiency for governments, without having negative side effects on other objectives and considerations.  [i]   The World Bank group thinks that NPM is used to describe a management culture that emphasizes the centrality of the citizen or customer, as well as accountability for results. It also suggests structural or organizational choices that promote decentralized control through a wide variety of alternative service delivery mechanisms, including quasi-markets with public and private service providers competing for resources from policymakers and donors. NPM does not claim that government should stop performing certain tasks. Although the New Public Management often is associated with this policy perspective, NPM is not about whether tasks should be undertaken or not. It is about getting things done better.  [ii]   It is supposed to have evolved as a consequence of the emergence of globalisation and as a response to policies of structural adjustment. NPM was conceived as a means to improve efficiency and responsiveness to political principals. Its origins were in Parliamentary democracies with curiously strong executive powers, centralized governments, and little administrative law. In this archetypal setting, NPM seems to embody the idea of a cascading chain of contracts leading to a single (usually Ministerial) principal who is interested in getting better results within a sector portfolio over which he or she has significant and relatively unchallenged authority.  [iii]   NPM, is a much more outcome oriented and efficient theory than earlier public management theories because it entails a more judicious disbursement of the public budget. It is supposed to be achieved by applying some attributes of the private sector into the public sector, such as competition etc. it can be said to be a policy to run the public sector as though it was the private sector but keeping public sector considerations in mind at the same time. The basis of NPM lay in reversing the two cardinal doctrines of progressive public administration (PPA); that is, lessening or removing differences between the public and the private sector and shifting the emphasis from process account-ability towards a greater element of account-ability in terms of results.  [iv]   It endeavours to better the public sector by restructuring, using tactics such as deregulation, decentralisation, promotion of autonomous agencies, output based evaluation, contracting, introduction of competition between agencies and enterprises etc. From the end of the 1970s to the 1990s governments around the world were engaged in widespread and sustained reforms of their public administration. These reforms started in the USA and the United Kingdom, where the Republican and Conservative governments that came to power championed the New Right campaigns for reforms. In New Zealand, however, where the most acclaimed reforms took place, the political force behind them was a Labour government, i.e. a leftist power. The reforms immediately aroused academic interest and research was carried out and theories developed. Perhaps to facilitate academic discourse, the reforms collectively came to be called the new public management (NPM).  [v]   The major driving force behind the reforms was economic stagnation in many countries. The New Right blamed this economic stagnation seen in huge national debts, balance of payment Sowaribi Tolofari problems, high rates of unemployment, underperforming industries, etc. on the excessive scope of governments engagement in business, mediocrity in administrative performance and the lack of accountability, among other things. In addition, there was also new intellectual thinking developing on how public services should be organised and delivered. This was probably because the populace in various countries were now better educated and more sophisticated in their thinking, tastes and demands.  [vi]   New Public Management has been a worldwide phenomenon in some form or other. Democratic regimes in New Zealand, Australia, and the United Kingdom have all implemented some range of reforms consistent with NPM. Malta and Austria have also implemented NPM elements. Each of these initiatives has had some combination of elements including cost cutting, creating of separate agencies or business enterprises to eliminate traditional bureaucracies, separating the purchaser of goods from the provider of those goods, introducing market mechanisms, decentralizing management authority, introducing performance-management systems, moving away from tenure-like civil service systems to contractual and pay-for-performance personnel systems, and increasing use of customer-focused quality improvement systems. Credit for the impetus of these reforms is given to American ideas, particularly the ideas of American public choice economists  [vii]   The philosophy seems to be based in the greatness of private management over public management and therefore suggests that the only logical thing to do is to transfer control to the private sector. Since all government activities cannot be transferred into private hands the theory suggests the next best thing, the application of business management into government. However, public management is different from public administration: the former is derived from commercial operations and is meant to bring about a new mind-set, a new vocabulary and a proliferation of management techniques. It is also meant to debureaucratize government operations and to reduce red tape substantially.  [viii]   If only one element is to be pointed out as characterising the reforms, it would be marketisation. The administration of public services was now benchmarked against private business power should be exercised by those who give the service; the consumer should have choice; the reason to exist should be determined by how well the organisation performs; there should be measures of performance and public accountability. These characteristics were based on certain theories: mainly public choice, transaction cost economics and principal-agent theory.  [ix]   The reforms have majorly been driven by a combination of socio-economic, political and technological factors. One of the similarities between countries going down the NPM route has been the experience of some sort of economic or fiscal crisis, which speeded up these countrys will to streamline their enterprises and cut back costs wherever possible, basically to stabilize their economy any-which way possible. With crisis looming overhead the tenacity of the welfare state came under fire and with it the institutionalised form of state run enterprises. One can say that these reforms are not purely the work of political will, other more sinister external factors were in play. In the case of most developing countries, reforms in public administration and management have been driven more by external pressures and have taken place in the context of structural adjustment programmes. Other drivers of NPM-type reforms include the ascendancy of neoliberal ideas from the late 1970s, the developm ent of information technology, and the growth and use of international management consultants as advisors on reforms. Additional factors, in the case of developing countries, include lending conditionalitys and the increasing emphasis on good governance.  [x]   The literature provides evidence that in many, if not the majority of, developing countries, economic crisis has been by far the most important factor driving the introduction of ambitious reforms in the public sector since the early 1980s. In sub-Saharan Africa (SSA) economic and fiscal crises preceded economic reforms, which also triggered public sector management reforms. Many African and Latin American countries suffered from unsustainable external and domestic debts, deteriorating real terms of trade, increasing real interest rates on international financial markets, high inflation, low levels of savings and investment, and shortages of basic consumer goods. More recently, the economic and fiscal crises in the Asian tiger economies have promoted major reforms in the public sectors of countries such as Indonesia, Malaysia and South Korea. Most countries, especially in Africa, had debilitating underlying problems à ³ severe institutional weaknesses, fiscal indiscipline and weak e xternal competitiveness.  [xi]   Larbi describes the economic and fiscal situation that was the harbinger of NPM reforms in Africa and Latin America. He records that many African and Latin American countries suffered unsustainable rates on international financial markets, high inflation, low levels of savings and investments, and shortages of basic consumer goods. It should be noted, however, that in these cases external pressures from so-called donors and lenders initiated the reforms. Kiiza accounts for the effect of this difference by saying that available comparative evidence shows both a handsome and an ugly face of the reforms: The handsome face of managerialism appears in the developed countries where the review of Weberian public administration has been done deliberately in search of excellence. The ugly face appears in the developing countries, particularly in sub-Saharan Africa, where Managerialism has been religiously spread by the IMF/World Bank fraternity.  [xii]   Internally, in these countries, policy deficiencies, bad and excessive management of the economy, large-scale institutionalized corruption, weak and demoralized public services, low productivity and political instability, all contributed to a worsening of the crises. Loss-making SOEs contributed significantly to budget deficits and thus to the fiscal crisis.  [xiii]   Going first to the IMF and then to the World Bank meant accepting stabilization and structural adjustment packages with their accompanying conditionalitys in order to obtain credits and debt rescheduling from creditor banks and multilateral lending institutions. Policy-based lending by multilateral institutions was used as an instrument to encourage crisis states to embark on reforms that were pro-market and pro-private sector.  [xiv]   Thus it can be said that in a way NPM was stuffed down these nations throats. But the most primary mistake committed was that the policies and the structures utilized in implementing the NPM in these countries were the same that were proven successful in their more developed counterparts. What was not realized or was ignored was that the manner of functioning of the countrys beuracricies their market, the level of development of their private sectors was markedly different from the developed countries and the same ideas were not liable to work here. Despite all its advantages, one of the premier drawbacks of NPM most of the time was its very little contribution to actual policymaking. Instead, seeing as its main emphasis is private sector managerial techniques, it emphasizes the need for fewer thinkers and more doers. However, if one defines success as substantive involvement of citizens in shaping the direction of policy that affects their lives, there is little indication of such involvement beyond what existed before NPM implementation began. As Pollitt (1993) notes, citizenship is an awkward concept for those promoting managerialism, where the term customer is more common. He argues that the collectivist view of citizenship is alien to an individualist model where the market is the chief focus of transactions and values (125-6). Armstrong (1998) notes in his assessment of Australian implementation of NPM that the concept of meeting customer needs ignores the ability of customers to articulate their needs or make choices, either because they are uninformed or do not have the resources to do so . Rhodes further argues that in Australia, there is no evidence to show that (NPM) has provided customers with any means whatever of holding the government to account (1996, 106-10). Those claiming success for NPM have focused on short-term effects and on issues of efficiency. While it may be too early to assess the long-term impact of NPM in countries such as New Zealand and Australia, the evidence supporting democratic accountability and citizen engagement is not encouraging. This concept of management has little to do with democracy and democratic values, shedding the reality or the facade of democracy found in earlier public-sector reforms. What is left is a core of market orientation to economic efficiency in the public sector. As Borgmann (1992) argues, when citizens are recast as consumers, they operate within an attenuated form of democracy: But to extol the consumer is to deny the citizen. When consumers begin to act, the fundamental decisions have already been made. Consumers are in a politically and morally weak position. They are politically weak because the signals that they can send to the authorities about the common order are for the most part ambiguous. Does the purchase of an article signal approval, thoughtlessness, or lack of a better alternative?  [xv]   Dunleavy and Hood (1994) note concerns among traditional bureaucrats or hierarchists about the potential destabilizing effects of NPM if the processes of change should get out of control, become unmanageable and do irreversible damage to the provision of public services. For developing countries, but not for the World Bank and donor agencies, the price to be paid for such policy mistakes may be great in terms of threats to political stability and loss of economic wellbeing. In the United Kingdom, one of the leading exemplars in NPM applications the internal market in the NHS has been criticized as concentrating too many The New Public Management Approach and Crisis States resources on management and paperwork rather than on front-line service provision. This is illustrated by the almost fourfold increase in the number of managers in the NHS between 1991 and 1994, with administration absorbing 10.5 per cent of all NHS costs in 1994, compared to 6 per cent before the reforms. Overall, public sector managers are seen as a gaining group in the managerial emphasis in reforms.  [xvi]   But at the same time NPM will also be causing problems of morale in the public services because of the basic premise of NPM being the superiority of private sector over the public sector. Moreover, because it also suggests that whenever possible its activities should be transferred to the private sector, the implication is that public service has no intrinsic value. It also belittles the noble side of the public-service profession: public servants became public servants because they wanted to serve their country. If they had wanted to become entrepreneurs, they would have joined the private sector or started their own businesses.  [xvii]   Critics of the NPM, lamenting the collapse of the welfare state, have referred to the increasing inequality that market-type mechanisms produce market niche-seeking behaviour by public service providers. Whereby, conditions of social exclusion may be created given the organizational and cultural changes in social provision, expressed in the concepts of markets and individualism. Thus, those who need state provision and welfare safety-nets most viz a viz the poor and the vulnerable will be harmed by such reforms. Accountability and monitoring becomes tougher with fragmentation. Furthermore, since governments and other purchasers struggle to monitor contracts in various provider organisations, there is a risk of incurring huge transaction costs. According to Le Grand and Barlett (1993) quality in service provision may decline since minimalist, economizing standards are replacing aspirational professional standards. The pursuit of efficiency in flawed policies with short-term gains will be encouraged by NPM, undermining states capability to take a continuing standpoint on education, technology, health and the environment, given the heavy emphasis on cost reduction. One needs to consider these issues before seeking to transfer NPM to crisis states.  [xviii]   When assessing NPM critically, it is noted that there might be a promotion of corruption and self-interest by the senior bureaucrats and policy makers, who will opt for contracting out and for privatization in lieu of opportunities for rent-seeking and other forms of misdemeanour. Furthermore, greed, favouritism and conflicting interests in NPM has also piloted in a decline in ethical standards of public life. In case of developing countries, adopting the NPM will lead to more arbitrary use of judgment since the accountability mechanisms are weak and patronage systems more prevalent. The NPM method may work better in some frameworks than others. Like the public service which covers various activities, some of which are person-centred like, education, while some are not. Some are competitive, others are hard to mould into the competitive format, some high technological content (telecommunications), and others low. Thus, these factors should be kept in mind, as they affect the chances of NPM being a good fit in crisis states. Clarke and Newman have also argued that NPM à ¬is often portrayed as a global phenomenon à ³ a core element in the process of convergence between states, overriding distinct political and cultural characteristicsà ®. Given the different and difficult circumstances of reforms in adjusting economies and the potential risks mentioned above, it is doubtful whether a universalistic and à ¬evangelicalà ® approach to NPM is a tenable option. Even in developed countries such as the United Kingdom, experience suggests that change toward NPM à ¬has not been smooth and linear, but uneven and contestedà ® and that social actors are not shaped unambiguously by large-scale trends or forces for change.  [xix]   NPM-related reforms generally might undermine political control, meaning that administrative leaders in the central departments and agencies, such as leaders in public commercial enterprises, are gaining influence, but also private commercial actors and consumers more generally. The reforms have created more skepticism towards collective solutions, a depolitization of the public sector and increasing conflicts over what is public.  [xx]   While there is relatively little NPM to be found in developing countries when compared to the early predictions, there is even less evaluation of NPMs impact. The most comprehensive overview of NPM type reforms is offered by Batley (1999). Summarizing the conclusions from a 5-year review of the changing role of government in adjusting economies in South Asia, Sub-Saharan Africa and South America, Batley finds that the effect of NPM reforms has been mixed, at best, with some improvements in efficiency and mixed effects on equity. On the downside, he notes that the transaction costs of radical reforms to autonomize service delivery agencies tend to outweigh the efficiency gains of unbundling, and that reforms that seek to separate purchasers from providers sometimes reduce accountability.  [xxi]   Refocusing on the effective state is given prominence in the 1997 World Development Report, The State in a Changing World, which marks a significant shift in thinking about the state and its role in development: the need to factor the state back into development. There is now some recognition by the Bank that reforming the public sector the NPM way does not lend itself to clear, unambiguous solutions. NPM is not a panacea for all problems in the developing economies. conclusion The above-mentioned criticisms of NPM and concerns about social solidity, parity and steadiness have rejuvenated interest in the dynamic role of the state again. The debate has changed. It is how do we re-empower the state so that it is able to do its job effectively. While the new public management method may not be a answer for the problems of public sector management in developing states, a cautious and selective variation of some features to selected areas may be advantageous and their employment needs to be subtle to operative reality. The enthusiasm for neoliberal policies and NPM practices that characterized most of the 1980s and early 1990s is now tempered with caution and, in some cases, rejection of the more extreme forms of the NPM approach. There is recognition that imposing one template of reform on all, irrespective of context, is unwise and unimplementable, and may even breed conflict and undermine stability. The way forward is to make the state work better, not to dismantle it. The Bank suggests two strategies. The first is to match the states role to its capability; the earlier mistake was that the state tried to do too much with few resources and limited capacity. The second approach is to strengthen the capability of the state by reinvigorating public administration institutions to enable them to perform their enabling, regulating, monitoring and co-ordinating roles. This will entail creating effective rules and restraints, encouraging greater competition in service provision, applying measures to monitor performance gains, and achieving a more responsive mix of central and local governance by steering policies in the direction of greater decentralization.  [xxii]   NPM-type reforms in developing states seem to be based on a common framework with those in developed countries and seem to follow a blueprint rather than a process or contingent approach. Yet these countries differ widely in terms of their institutional conditions and their capacity to implement public sector management reforms based on NPM principles and practices.  [xxiii]   There is a need to give consideration to problems of how to implement rather than just what to implement. For some time now, too much attention has focused on the plan content of reforms without suitable attention to suitable preparations for application, partly due to the domination of outside organizations in the design of reform bundles and the resultant dearth of resident ownership and promise to reform.

The Art of Hybrid Writing Essay -- poetry, short stories

â€Å"From a very early age†¦I knew that when I grew up I should be a writer.†- George Orwell in ‘Why I Write’ (1965) As a writer, I am aware that there are different types ‘voices’ when it comes to their personal writing. During the course of this module I’ve learned a lot about my personal ‘voice’ and it has helped enhance my writing skills. For example, there will be times where I will have to force myself to write, even when I don’t have the motivation to; because sometimes I can get a great story or poem out of it. Other things that I have learned during this module are: old habits aren’t always the best and I should save my energy on keeping them around, and at times imitating the works of other writers can help teach new techniques I would not have learned in any other way. When I first started writing, I would write mostly poetry and sometimes short stories. I would usually take days to write a good poem, and weeks for a good story. Sometimes I would get so busy that I would put it off for a while and I wouldn’t get back to it for a month or so. Although ever since I started this course I had to use the time that was given to me, especially the rest of the week till the next class. As Dorothea Brande said in her book ‘Becoming a Writer’ in Chapter Six: â€Å"Decide for yourself when you will take the time for writing; for you are going to write in it.† I would usually write my stories at night, around 7:30-8pm since I that would be around the time I would have the sudden urge to write. When I wrote the first draft of ‘Good Deed’, I had started writing it around 8pm as I had planned that morning I would. While I was writing it, I thought it would take me a little less than an hour to write since I had the idea of what I wanted ... ...orothea Brande said in chapter ten in her book ‘Becoming a Writer’ â€Å" They [the words] are yours to use only when you have made them your own by full acquaintance and acceptance.† Even so, this semester has really thought me so many things in the period of twelve weeks. From learning what truly is my voice in writing, to kicking away old habits that would only do damage, and in the end, imitating can also help me improve certain aspects of my writing. This whole semester has been quite the rollercoaster in terms of this module, I learned so much and I will continue to keep learning from these lessons as I keep going forth my journey in university. Works Cited Brande, Dorothea, and John Gardner. Becoming a Writer. New York: J.P. Tarcher, 1981. Print.Orwell, George. Decline of the English Murder, and Other Essays. Harmondsworth, Eng.: Penguin, 1965. Print. The Art of Hybrid Writing Essay -- poetry, short stories â€Å"From a very early age†¦I knew that when I grew up I should be a writer.†- George Orwell in ‘Why I Write’ (1965) As a writer, I am aware that there are different types ‘voices’ when it comes to their personal writing. During the course of this module I’ve learned a lot about my personal ‘voice’ and it has helped enhance my writing skills. For example, there will be times where I will have to force myself to write, even when I don’t have the motivation to; because sometimes I can get a great story or poem out of it. Other things that I have learned during this module are: old habits aren’t always the best and I should save my energy on keeping them around, and at times imitating the works of other writers can help teach new techniques I would not have learned in any other way. When I first started writing, I would write mostly poetry and sometimes short stories. I would usually take days to write a good poem, and weeks for a good story. Sometimes I would get so busy that I would put it off for a while and I wouldn’t get back to it for a month or so. Although ever since I started this course I had to use the time that was given to me, especially the rest of the week till the next class. As Dorothea Brande said in her book ‘Becoming a Writer’ in Chapter Six: â€Å"Decide for yourself when you will take the time for writing; for you are going to write in it.† I would usually write my stories at night, around 7:30-8pm since I that would be around the time I would have the sudden urge to write. When I wrote the first draft of ‘Good Deed’, I had started writing it around 8pm as I had planned that morning I would. While I was writing it, I thought it would take me a little less than an hour to write since I had the idea of what I wanted ... ...orothea Brande said in chapter ten in her book ‘Becoming a Writer’ â€Å" They [the words] are yours to use only when you have made them your own by full acquaintance and acceptance.† Even so, this semester has really thought me so many things in the period of twelve weeks. From learning what truly is my voice in writing, to kicking away old habits that would only do damage, and in the end, imitating can also help me improve certain aspects of my writing. This whole semester has been quite the rollercoaster in terms of this module, I learned so much and I will continue to keep learning from these lessons as I keep going forth my journey in university. Works Cited Brande, Dorothea, and John Gardner. Becoming a Writer. New York: J.P. Tarcher, 1981. Print.Orwell, George. Decline of the English Murder, and Other Essays. Harmondsworth, Eng.: Penguin, 1965. Print.

Understanding Nonverbal Communication

Communication is more than just an exchange of dialogue. Sometimes, even the most powerful messages are unsaid or nonverbal. Nonverbal communication reminds you of what is inside another person’s mind. Emotions and thoughts are usually conveyed without the use of words or voice, but the best communicators are sensitive to its messages. Nonverbal communication includes facial expression, gestures, body language, and the use of space. A study over at UCLA indicated that around 93 percent of communication effectiveness is determined by nonverbal cues. Another study shows that the impact of a singing performance was determined seven percent on the words used, 38 percent by voice quality, and 55 percent by nonverbal communication. Nonverbal behavior also reflects a person’s true emotions and thoughts. A speaker may try to say one thing, but his body language and the tiniest of facial expressions tells otherwise. However, multicultural differences in body language and gestures are usually open to misinterpretation. Greeks would nod their heads when they mean â€Å"no,† which we would instantly misunderstand for a â€Å"yes. † Brazilians, meanwhile, would find the OK sign vulgar. With the thumb and index finger forming a circle and the three other fingers are extended, for them it means â€Å"you’re an a-hole. † With these in mind, nonverbal communication can be a vital tool in screening job candidates. If you want to determine what is really on each interviewee’s mind, you need to pay close attention to the following. Watch their body language – People communicate on many level. Their facial expressions, eye contact, posture, hand and feet gestures, body movement, and even appearance can determine a person’s confidence level as well as the emotions conveyed. In fact, how a job applicant sits in the lobby can say a lot about his skills, strengths, weaknesses, and concerns. Check if the verbal and nonverbal communication agrees with each other – If a person says one thing but his body gesture tells you otherwise, give more weight on what he does not say. He may try to mask his thoughts by saying things differently, but his nonverbal behavior would most likely show it. Practice reading nonverbal communication – We do not become experts in nonverbal communication overnight. Understanding this types of communication takes time and practice. The first step is to recognize the power of what is unspoken, as well as following your gut whether what the applicant said is true.

3d Negotiation

www. hbr. org Savvy negotiators not only play their cards well, they design the game in their favor even before they get to the table. Playing the Whole Game 3-D Negotiation by David A. Lax and James K. Sebenius Reprint R0311D Savvy negotiators not only play their cards well, they design the game in their favor even before they get to the table. 3-D Negotiation by David A. Lax and James K. Sebenius COPYRIGHT  © 2003 HARVARD BUSINESS SCHOOL PUBLISHING CORPORATION. ALL RIGHTS RESERVED. What stands between you and the yes you want? In our analysis of hundreds of negotiations, we’ve uncovered barriers in three complementary dimensions: The first is tactics; the second is deal design; and the third is setup. Each dimension is crucial, but many negotiators and much of the negotiation literature fixate on only the first two. For instance, most negotiation books focus on how executives can master tactics—interactions at the bargaining table. The common barriers to yes in this dimension include a lack of trust between parties, poor communication, and negotiators’ â€Å"hardball† attitudes. So the books offer useful tips on reading body language, adapting your style to the bargaining situation, listening actively, framing your case persuasively, deciding on offers and counteroffers, managing deadlines, countering dirty tricks, avoiding cross-cultural gaffes, and so on. The second dimension, that of deal design—or negotiators’ ability to draw up a deal at the table that creates lasting value—also receives attention. When a deal does not offer nough value to all sides, or when its structure won’t allow for success, effective 2-D negotiators work to diagnose underlying sources of economic and noneconomic value and then craft agreements that can unlock that value for the parties. Does some sort of trade between sides make sense and, if so, on what terms? Should it be a staged agreement, perhaps with contingencies and risk-sharing provisions? A deal with a more creative concept and structure? One that meets ego needs as well as economic ones? Beyond the interpersonal and deal design challenges executives face in 1-D and 2-D negotiations lie the 3-D obstacles—flaws in the negotiating setup itself. Common problems in this often-neglected third dimension include negotiating with the wrong parties or about the wrong set of issues, involving parties in the wrong sequence or at the wrong time, as well as incompatible or unattractive no-deal options. 3-D negotiators, however, reshape the scope and sequence of the game itself to achieve the desired outcome. Acting entrepre- harvard business review †¢ november 2003 page 1 -D Negotiation neurially, away from the table, they ensure that the right parties are approached in the right order to deal with the right issues, by the right means, at the right time, under the right set of expectations, and facing the right nodeal options. Former U. S. trade representative Charlene Barshefsky, who has negotiated with hundreds of companies, governments, and nongovernmental organizat ions to spearhead deals on goods, services, and intellectual property, characterizes successful 3-D negotiations this way: â€Å"Tactics at the table are only the cleanup work. Many people mistake tactics for the underlying substance and the relentless efforts away from the table that are needed to set up the most promising possible situation once you face your counterpart. When you know what you need and you have put a broader strategy in place, then negotiating tactics will flow. †1 3-D Negotiation in Practice Even managers who possess superior interpersonal skills in negotiations can fail when the barriers to agreement fall in the 3-D realm. During the 1960s, Kennecott Copper’s longterm, low-royalty contract governing its huge El Teniente mine in Chile was at high risk of renegotiation; the political situation in Chile had changed drastically since the contract was originally drawn up, rendering the terms of the deal unstable. Chile had what appeared to be a very attractive walkaway option—or in negotiation lingo, a BATNA (best alternative to negotiated agreement). By unilateral action, the Chilean government could radically change the financial terms of the deal or even expropriate the mine. Kennecott’s BATNA appeared poor: Submit to new terms or be expropriated. Imagine that Kennecott had adopted a 1-D strategy focusing primarily on interpersonal actions at the bargaining table. Using that approach, Kennecott’s management team would assess the personalities of the ministers with whom it would be negotiating. It would try to be culturally sensitive, and it might choose elegant restaurants in which to meet. Indeed, Kennecott’s team did take such sensible actions. But that approach wasn’t promising enough given the threatening realities of the situation. Chile’s officials seemed to hold all the cards: They didn’t need Kennecott to run the mine; the country had its own experienced David A. Lax ([email  protected] com) is a principal of Lax Sebenius, a negotiation-strategy consulting firm in Concord, Massachusetts. James K. Sebenius ([email  protected] edu) is the Gordon Donaldson Professor of Business Administration at Harvard Business School in Boston and a principal of Lax Sebenius. They are both members of the Negotiation Roundtable forum at Harvard Business School and the authors of 3-D Negotiation: Creating and Claiming Value for the Long Term, forthcoming from Harvard Business School Press. anagers and engineers. And Kennecott’s hands seemed tied: It couldn’t move the copper mine, nor did it have a lock on downstream processing or marketing of the valuable metal, nor any realistic prospect, as in a previous era, of calling in the U. S. fleet. Fortunately for Kennecott, its negotiators adopted a 3- D strategy and set up the impending talks most favorably. The team took six steps and changed the playing field altogether. First, somewhat to the government’s surprise, Kennecott offered to sell a majority equity interest in the mine to Chile. Second, to sweeten that offer, the company proposed using the proceeds from the sale of equity, along with money from an Export-Import Bank loan, to finance a large expansion of the mine. Third, it induced the Chilean government to guarantee this loan and make the guarantee subject to New York state law. Fourth, Kennecott insured as much as possible of its assets under a U. S. guarantee against expropriation. Fifth, it arranged for the expanded mine’s output to be sold under long-term contracts with North American and European customers. And sixth, the collection rights to these contracts were sold to a consortium of European, U. S. , and Japanese financial institutions. These actions fundamentally changed the negotiations. A larger mine, with Chile as the majority owner, meant a larger and more valuable pie for the host country: The proposal would result in more revenue for Chile and would address the country’s interest in maintaining at least nominal sovereignty over its own natural resources. Moreover, a broad array of customers, governments, and creditors now shared Kennecott’s concerns about future political changes in Chile and were highly skeptical of Chile’s capacity to run the mine efficiently over time. Instead of facing the original negotiation with Kennecott alone, Chile now effectively faced a multiparty negotiation with players who would have future dealings with that country—not only in the mining sector but also in the financial, industrial, legal, and public sectors. Chile’s original BATNA—to unceremoniously eject Kennecott—was now far less attractive than it had been at the outset, since hurting Kennecott put a wider set of Chile’s present and future interests at risk. And finally, the guarantees, insurance, and other contracts improved Kennecott’s BATNA. arvard business review †¢ november 2003 page 2 3-D Negotiation If an agreement were not reached and Chile acted to expropriate the operation, Kennecott would have a host of parties on its side. Though the mine was ultimately nationalized some years later, Chile’s worsened alternatives gave Kennecott a better operating position and additional years of cash flow compared w ith similar companies that did not take such actions. This case underscores our central message: Don’t just skillfully play the negotiating game you are handed; change its underlying design for the better. It is unlikely that 1-D tactical or interpersonal brilliance at the table—whether in the form of steely gazes, culturally sensitive remarks, or careful and considered listening to all parties—could have saved Kennecott from its fundamentally adverse bargaining position. Yet the 3-D moves the company made away from the table changed the negotiation’s setup (the parties involved, the interests they saw at stake, their BATNAs) and ultimately created more value for all involved—much of which Kennecott claimed for itself. How 3-D Moves Work Successful 3-D negotiators induce target players to say yes by improving the proposed deal, enhancing their own BATNAs, and worsening those of the other parties. 3-D players intend such moves mainly to claim value for them- selves but also to create value for all sides. Claiming Value. 3-D negotiators rely on several common practices in order to claim value, including soliciting outside offers or bringing new players into the game, sometimes to create a formal or informal auction. After negotiating a string of alliances and acquisitions that vaulted Millennium Pharmaceuticals from a small start-up in 1993 to a multibillion-dollar company less than a decade later, then–chief business officer Steve Holtzman explained the rationale for adding parties to the negotiations: â€Å"Whenever we feel there’s a possibility of a deal with someone, we immediately call six other people. It drives you nuts, trying to juggle them all. But number one, it will change the perception on the other side of the table. And number two, it will change your self-perception. If you believe that there are other people who are interested, your bluff is no longer a bluff; it’s real. It will come across with a whole other level of conviction. † (For more on Millennium, see â€Å"Strategic Deal-making at Millennium Pharmaceuticals,† HBS case no. 9-800032. ) While negotiators should generally try to improve their BATNAs, they should also be aware that some of the moves they make might inadvertently worsen their walkaway options. For instance, several years ago, we The Three Dimensions of Negotiation Our research shows that negotiations succeed or fail based on the attention executives pay to three common dimensions of deal making. Focus Common Barriers Interpersonal issues, poor communication, â€Å"hardball† attitudes Approach Act â€Å"at the table† to improve interpersonal processes and tactics Copyright  © 2003 Harvard Business School Publishing Corporation. All rights reserved. page 3 1-D 2-D 3-D Tactics (people and processes) Deal design (value and substance) Lack of feasible or desirable agreements Go â€Å"back to the drawing board† to design deals that unlock value that lasts Make moves â€Å"away from the table† to create a more favorable scope and sequence Setup (scope and sequence) Parties, issues, BATNAs, and other elements don’t support a viable process or valuable agreement harvard business review †¢ november 2003 3-D Negotiation worked with a U. S. manufacturing firm on its joint-venture negotiations in Mexico. The company had already researched possible cultural barriers and ranked its three potential partners according to the competencies it found most desirable in those companies. After approaching the negotiations in a culturally sensitive spirit, and in what had seemed a very logical sequence, the U. S. team had nevertheless come to an impasse with the most attractive partner. The team abandoned those talks and was now deep into the process with the second most desirable candidate—and again, things were going badly. Imagine subsequent negotiations with the third, barely acceptable, partner if the second set of talks had also foundered—in an industry where all would quickly know the results of earlier negotiations. As each set of negotiations failed, the U. S. irm’s BATNA—a deal with another Mexican company or no joint venture at all—became progressively worse. Fortunately, the U. S. company opened exploratory discussions with the third firm in parallel with the second. This helped the U. S. company to discover which potential partner actually made the most business sense, to avoid closing options prematurely, and to take ad vantage of the competition between the Mexican companies. The U. S. business should have arranged the process so that the prospect of a deal with the most desirable Mexican partner would function as its BATNA in talks with the second most desirable partner, and so on. In short, doing so would have created the equivalent of a simultaneous four-party negotiation (structured as one U. S. firm negotiating in parallel with each of the three Mexican firms) rather than three sequential two-party negotiations. This more promising 3-D setup would have greatly enhanced whatever 1-D cultural insight and tactical ingenuity the U. S. firm could muster. In addition to strengthening their own position, 3-D negotiators who add parties and issues to a deal can weaken the other side’s BATNA. For instance, when Edgar Bronfman, former CEO of Seagram’s and head f the World Jewish Congress, first approached Swiss banks asking them to compensate Holocaust survivors whose families’ assets had been unjustly held since World War II, he felt stonewalled. Swiss banking executives saw no reason to be forthcoming with Bronfman; they believed they were on strong legal ground because the restitution issue had been settled years ago. But after eight months of lobbying by Bronfman, the World Jewish Congress, and others, the negotiations were dramatically expanded—to the detriment of the Swiss. The bankers faced a de facto coalition of interests that credibly threatened the lucrative Swiss share of the public finance business in states such as California and New York. They faced the divestiture by huge U. S. pension funds of stock in Swiss banks as well as in all Swissbased companies; a delay in the merger between Swiss Bank and UBS over the â€Å"character fitness† license vital to doing business in New York; expensive and intrusive lawsuits brought by some of the most formidable U. S. class-action attorneys; and the wider displeasure of the U. S. overnment, which had become active in brokering a settlement. Given the bleak BATNA the Swiss bankers faced, it’s hardly surprising that the parties reached an agreement, including a commitment from the Swiss bankers to pay $1. 25 billion to survivors. It was, however, an almost unimaginable outcome at the beginning of the small, initially private game in which the Swiss seemed to hold all the cards. Another way for negotiators to claim value is to shift the issues under discussion and the interests at stake. Consider how Microsoft won the browser war negotiations. In 1996, AOL was in dire need of a cutting-edge Internet browser, and both Netscape and Microsoft were competing for the deal. The technically superior, market-dominant Netscape Navigator vied with the buggier Internet Explorer, which was then struggling for a market foothold but was considered by Bill Gates to be a strategic priority. A confident, even arrogant, Netscape pushed for a technically based â€Å"browser-for-dollars† deal. In the book aol. com, Jean Villanueva, a senior AOL executive, observed, â€Å"The deal was Netscape’s to lose. They were dominant. We needed to get what the market wanted. Most important, we saw ourselves as smaller companies fighting the same foe—Microsoft. † But when all was said and done, it was Microsoft that had etched a deal with AOL. The software giant would provide Explorer to AOL for free and had promised a series of technical adaptations in the future. Microsoft had also agreed that AOL client software would be bun- harvard business review †¢ november 2003 page 4 3-D Negotiation Microsoft shifted the negotiations from Netscape’s technical browser-for-dollars deal toward wider business issues on which it held a decisive edge. led with the new Windows operating system. Microsoft—a direct competitor to AOL— would place the AOL icon on the Windows desktop right next to the icon for its own online service, the Microsoft Network (MSN). AOL’s position on â€Å"the most valuable desktop real estate in the world† would permit it to reach an additional 50 million people per year at effectively no cos t, compared with its $40 to $80 per-customer acquisition cost incurred by â€Å"carpet bombing† the country with AOL disks. In effect, Bill Gates sacrificed the mediumterm position of MSN to his larger goal of winning the browser war. How did 3-D moves swing the negotiations in Microsoft’s favor? Microsoft’s Web browser was technically inferior to Netscape’s, so the chances of Microsoft winning on those grounds were poor, regardless of its negotiating skills and tactics at the table. Instead, Microsoft shifted the negotiations from Netscape’s technical browser-for-dollars deal toward wider business issues on which it held a decisive edge. Rather than focus on selling to the technologists, Microsoft concentrated on selling to AOL’s businesspeople. As AOL’s lead negotiator and head of business development, David Colburn, stated in his deposition to the Supreme Court in 1998, â€Å"The willingness of Microsoft to bundle AOL in some form with the Windows operating system was a critically important competitive factor that was impossible for Netscape to match. † Instead of trying to skillfully play a poor hand when dealing with party X on issues A and B, Microsoft changed the game toward a more compatible counterpart Y, emphasizing issues C, D, and E, on which it was strong. These examples of 3-D value-claiming moves conflict with the standard 1-D interpersonal approach to negotiation. Actions taken away from the table—sharply altering parties and issues, restructuring and resequencing the process, changing BATNAs—are not primarily about 1-D interpersonal skills but rather about enhancing the underlying setup of the negotiation itself. Creating Value. By adding complementary parties or issues to the negotiating process, 3D negotiators can not only claim value for themselves but also create more value for all parties involved. In Co-opetition, their influential book on business strategy, Adam Brandenburger and Barry Nalebuff explored the con- ept of the value net, or the collection of players whose potential combination and agreement can create value. 3-D negotiators often facilitate in the development of such value nets. They scan beyond their specific transactions for compatible players with complementary capabilities or valuations, and they craft agreements that profitably incorporate these players. The world of foreign affairs offers many examples in which potentially valuable bilateral deals can be impossible unless a third party with complementary interests is included. In a 1985 issue of Negotiation Journal, University of Toronto professor and international negotiation specialist Janice G. Stein wrote the following about the importance of Henry Kissinger’s 3-D role in a crucial Middle East negotiation: â€Å"The circular structure of payment was essential to promoting agreement among the parties. Egypt improved the image of the United States in the Arab world, especially among the oil-producing states; the United States gave Israel large amounts of military and financial aid; and Israel supplied Egypt with territory. Indeed, a bilateral exchange between Egypt and Israel would not have succeeded since each did not want what the other could supply. † In an example from the business world, the owners of a niche packaging company with an innovative technology and a novel product were deep in price negotiations to sell the company to one of three potential buyers, all of them larger packaging operations. Instead of mainly working with its bankers to make the case for a higher valuation and to refine its at-the-table tactics with each packaging industry player, the niche player took a 3-D approach. Its broader analysis suggested that one of its major customers, a large consumer goods firm, might particularly value having exclusive access to the niche player’s technologies and packaging products, so it brought the consumer goods firm into the deal. The move uncovered a completely new source of potential value—and a much higher potential selling price. It also increased the pressure on the larger packaging companies: They would face more competition and might not be able offer the same kind of exclusive, customized packaging service to their customers. The potential elements of a value net are not always obvious at the start of a negotia- arvard business review †¢ november 2003 page 5 3-D Negotiation Mapping Backward to Yes What does a sophisticated 3-D strategy look like? Consider the experience of Henry Iverson and his partners, who acquired Concord Pulp and Paper (CPP) for $8. 5 million in a highly leveraged transaction. (All company names and details have b een disguised. ) After the basic deal was done, they needed additional financing to make profitable improvements at CPP. Federal Street Bank (FSB) turned them down flat, even after they had used such 1-D tactics as persuasive appeals and elegant lunches. It was time to move into the 3-D realm. But first, some background. To acquire CPP from its creditors, Iverson and his partners had put up $700,000 in equity and obtained $7. 8 million in financing from FSB, consisting of a $1. 3 million short-term loan against receivables and a $6. 5 million loan against assets. Soon after, the opportunity arose for CPP to add a recovery boiler, which would increase plant capacity by 100 tons a day, improve overall quality and margins, and boost yearly net cash flow by $4. 1 million. The boiler would cut CPP’s emissions in its host town of Concord by 95%. Over a two-year construction period, the boiler project would cost $9 million, $6 million of which would go to Bathurst and Felson Engineering (BFE) and the rest to smaller contractors. The FSB loan officer who delivered the bad news cited the bank’s policies: â€Å"We will loan against 50% of unencumbered inventory and 80% of receivables. CPP has neither, and its capital structure is already 93% leveraged. † When Iverson pressed, he was told that if he had more equity, FSB might consider a short-term construction loan—but only if a credible third party would provide guaranteed takeout financing after two years. So Iverson used 3-D negotiating tactics to scan widely and map backward from his current predicament to establish the prior agreements (with as-yet uninvolved parties) that would maximize the chances of an ultimate yes from the bank. Involve UIC. Iverson approached two insurance companies for takeout financing. Unified Insurance Company (UIC) had the most attractive fee structure; Worldwide Insurance had higher fees and was uninterested. Both flatly stated, â€Å"CPP is too leveraged. † Moreover, UIC would only lend against the cash flow of fully completed projects. Iverson coaxed a deal letter from UIC: For a commitment fee plus a share of increased profits from the boiler, Unified agreed to lend, conditional on the successful completion of the project—and more equity in CPP’s capital structure. Involve the EDA. Iverson’s attempts to raise more equity from investors failed, so he dug further and learned that the U. S. Economic Development Administration (EDA) could make junior (subordinated) loans to firms for certified job-creating projects; the overall loan limit was equal to the number of jobs times $50,000. Since the recovery boiler project would generate at least 30 new full-time jobs, this implied a junior 1. 2. loan of up to $1. 5 million. However, the EDA loan had to be 50% matched by a Local Development Administration (LDA), which did not exist in Concord. At this point, Iverson took stock of the barriers: the engineer wouldn’t proceed without money and, in any case, wouldn’t guarantee more than the boiler itself—the only thing BFE would build. The rest of the required system would be complex. Local and regional contractors were in no position to guarantee the overall project. FSB wouldn’t do a construction loan without guaranteed takeout financing and more equity. UIC wouldn’t do permanent takeout financing without a successful project and more equity. The EDA wouldn’t lend without matching funds from the LDA and a guarantee of a successful, certified, job-creating project. And there was no LDA to certify the jobs or provide matching funds. Involve the Town of Concord. Undaunted, Iverson approached the 3. Concord Town Council and proposed that it form an LDA, which could raise matching funds, to facilitate the recovery boiler project. He argued that construction and operation of the project would create new jobs and dramatically cut CPP’s odors and pollution levels. And it would add at least $180,000 a year in property taxes if the new boiler were built. The council received these arguments favorably but, before committing, wanted assurances that the project would actually work. Involve Derano. In great need of some plausible guarantee of project success, Iverson approached Derano, a large, national (bondable) engineering, design, and project management firm. Derano expressed serious doubts about managing an already-designed project with BFE and local contractors in place. But by offering to pay above the normal fee, Iverson got Derano to manage the overall project and to give a nonrecourse performance â€Å"guarantee†Ã¢â‚¬â€all conditional on CPP’s raising project financing. 4. harvard business review †¢ november 2003 page 6 3-D Negotiation Concord Pulp and Paper starts negotiations for funding here Derano (national project management firm) †¢ funding Finish 5 Town of Concord â€Å"guaranteed† project †¢ less pollution †¢ more jobs †¢ lower taxes Start 1 Recovery Boiler Project Bathurst and Felson Engineering †¢ funding 4 2 Economic Development Administration †¢ LDA †¢ certified jobs †¢ matching funds Federal Street Bank †¢ more equity †¢ guaranteed takeout financing Unified Insurance Company †¢ more equity †¢ actual project 8 7 6 LDA Go back to Concor d with Derano deal. Carrying Derano’s letter that gave the provisional guarantee, Iverson revisited Concord’s Town Council, which agreed to create an LDA. The LDA would be instructed to issue bonds for $500,000, backed by tax revenue increases and presold to wealthy citizens, local and regional contractors, and other area businesses. As a government entity, the LDA would also formally certify the expected successful job-creation impact of the recovery-boiler project. Go back to the EDA with the Derano letter and the LDA commitments. Iverson approached the EDA, arm-in-arm with the Concord LDA, which brought matching fund commitments and its formal job certification 5. 6. along with Derano’s guarantee) of the boiler project. With this backing, EDA committed to a $1 million junior (subordinated) loan (plus the $500,000 matching loan from Concord’s LDA)— all conditional on Iverson’s obtaining construction and long-term financing. Go back to UIC to modify its â€Å"more equity† provision. Iverson successfully negotiated with Unified Insurance to modify the â€Å"more equity† term of its commitment l etter to include junior debt, since the EDA–LDA subordinated debt met UIC’s real interest in a greater financial cushion for the UIC loan. Go back to FSB with Derano, LDA and EDA commitments, and UIC modification. Returning to the bank, Iverson argued that EDA–LDA loans 7. 8. would provide the functional equivalent of FSB’s requirement for more equity. In making the case to the riskaverse loan officer, he tactfully noted that UIC, a â€Å"notoriously demanding creditor,† was willing to treat it as such to financially cushion UIC’s permanent financing. Surely that would be adequate to protect FSB’s brief twoyear exposure. With this condition met—and given Derano’s performance â€Å"guarantee† and the LDA’s certification—the bank agreed that UIC’s commitment letter met its interest in guaranteed takeout financing. FSB’s new construction-loan commitment unlocked the EDA–LDA money, which started funds flowing to Derano and BFE. And the project was launched. harvard business review †¢ november 2003 Copyright  © 2003 Harvard Business School Publishing Corporation. All rights reserved. 3 page 7 3-D Negotiation tion. For example, a U. S. European conservation group wished to preserve the maximum amount of rain-forest habitat in a South American country. From membership contributions and foundation support, the conservation group had U. S. dollars it could use (after converting the dollars to local currency at the official exchange rate) to buy development rights. The owner of the land and the conservation group negotiated hard and tentatively agr eed on an amount of rain forest to be protected and a price per hectare based on local currency. But 3-D thinking ultimately improved the deal for all sides. The host country was indebted in dollar-denominated bonds, which were trading at a 45% discount to their face value (given their perceived default risk). The country had to use scarce dollar-export earnings, needed for many pressing domestic purposes, to keep its debtservice obligations current; of course, interest payments were determined by the face value of the debt, not the bond discount. These facts suggested that more value could have been created by adding two other sets of players to the initial negotiation between the landowner and the conservation group. In this green variant of a debt-for-equity swap, the conservation group bought country debt from foreign holders at the prevailing 45% discount. It then brought this debt to the country’s Central Bank and negotiated its redemption for local currency at a premium between the discounted value of the debt and its full-dollar face value (up to an 82% premium over the discounted value). The conservation group then used this greater quantity of local currency from the Central Bank to buy more development rights from the landowner at a somewhat higher unit price. This expanded four-party negotiation—sequentially involving the conservation group, international bondholders, the Central Bank, and the landowner—benefited everyone more than the best result possible in the initial negotiation between just the landowner and the conservation group. The bank was able to retire debt and cancel dollar-interest obligations, which were very costly to the country, using cheaper (to it) local currency without exporting more or diverting scarce export earnings. The conservation group was able to save more rain forest at the same dollar cost, and the landowner got a higher price in a currency it as better positioned to use. To find complementary parties and issues, as the conservation group did, you should ask questions that focus on relative valuation. What uninvolved parties might highly value elements of the present negotiation? What outside issues might be highly valued if they were incorporated into the process? Are there any parties outsid e the immediate negotiations that can bear part of the risk of the deal more cheaply than the current players? On the other hand, it is sometimes necessary to shrink—or at least stage—the set of involved issues, interests, and parties in order to create value. For example, rather than enter into a full multiparty process at the outset, an industry association that wants to negotiate a certain set of standards may benefit from first seeking agreement between a few dominant players, which would then serve as the basis for a later deal among the wider group. Or, negotiations to forge a multi-issue strategic alliance between two firms may be dramatically simplified by one side which instead proposes an outright acquisition. Certainly, the form chosen for a transaction can dramatically affect the complexity of negotiations and the value to be had. The planned merger of equals by Bell Atlantic and Nynex would have required separate negotiations with regulatory authorities in each of the 13 states served by the companies. To avoid having to undergo politically charged negotiations at 13 different tables, the parties changed the game by creating a functionally equivalent structure in which Bell Atlantic was the nominal acquirer. Indeed, it can be necessary to change the process, rather than the substance, of a negotiation. For example, two partners seeking to terminate their relationship may have difficulty determining exactly who gets what. But they may instead be able to agree to a special mechanism like the â€Å"Texas shoot-out,† in which one side names a price at which it would be either a buyer (of the other’s shares) or a seller (of its own shares) and the other side must respond. Often, changing the form of a negotiation by bringing in a skilled third-party mediator creates value. For example, two intensive mediation efforts by outside parties helped to finally thaw the frozen negotiations between Microsoft and the Justice Department. Many fundamentally different variants arvard business review †¢ november 2003 page 8 3-D Negotiation of mediation, arbitration, and other special mechanisms exist, but all are options to change the game itself rather than efforts to negotiate more effectively by purely interpersonal means. Implementing a 3-D Negotiation Strategy Sophisticated negotiators act in all three dimensions to create and claim value. While 3-D negotiators should play the existing game well , as tacticians and deal designers, they should also act as entrepreneurs, seeking to create a more favorable target game. They can do so by scanning widely to identify possible elements of a more favorable setup; â€Å"mapping backward† from the most promising structure for the deal to the current setup; and managing and framing the flow of information to improve their odds of getting to yes. Scan widely. To act outside the box, one must first look outside the box. By searching beyond the immediate deal on the table for elements of a potential value net, 3-D negotiators can retrain their focus on complementary capabilities and valuations that other players might add. Useful game-changing questions include: Who outside the existing deal might most value an aspect of it? Who might minimize the costs of production, distribution, risk bearing, and so on? Who might supply a piece missing from the current process? Which issues promise mutual advantage? What devices might bring such potential value-creating parties and issues into the deal? And at what point does complexity or conflict of interest between parties call for shrinking the scope of the negotiation? Scanning beyond the current game to claim value normally focuses on a parallel set of questions: Are there additional bidders or parties who could favorably alter BATNAs in other ways? Can certain issues be linked for leverage? Such scanning should result in a map of all the actual and potential parties (including other interested groups within an organization, if necessary). You need to assess their actual and potential interests and BATNAs, as well as the difficulty and cost of gaining agreement with each party and the value of having its support. Your map should also identify the crucial relationships among the parties: who influences whom, who tends to defer to whom, who owes what to whom, who would While 3-D negotiators should play the existing game well, as tacticians and deal designers, they should also act as entrepreneurs. find it costly to oppose an emerging agreement with key parties on board, and so on. The founders of new ventures almost always need to scan widely in order to construct the most promising sequence of deals that lead to a self-sustaining company. Consider the situation WebTV Networks founder Steve Perlman faced in the early and mid-1990s. He had obtained seed funding, developed the technology to bring the Web to ordinary television sets, created a prototype, and hired his core team. Running desperately low on cash, Perlman scanned widely and discovered an array of potential negotiating partners—ISPs, VCs, angel investors, industrial partners, consumerelectronics businesses, content providers, manufacturers, wholesale and retail distribution channels, foreign partners, and the like. He needed to engage in 3-D analysis to determine the right subset of potential partners to create the most promising deals to build his company. Map backward and sequence. It is helpful to think of the logic of backward mapping as being similar to the logic of project management. In deciding how to undertake a complex project, you start with the end point and work back to the present to develop a time line and critical path. In negotiation, however, the completed â€Å"project† should be a set of value-creating, sustainable agreements among a supportive coalition of parties. For instance, when Perlman’s WebTV was almost out of money, it might have seemed obvious that he should approach venture capital firms first. However, because VCs were deeply skeptical of consumer-electronics deals at that time, Perlman mapped backward from his VC target. He reasoned that a VC would find WebTV more appealing if a prominent consumer-electronics company were already on board, so Perlman embarked on a sequential strategy. After his first choice, Sony, turned him down, Perlman kept reasoning backward from his target. Finally, he was able to get Phillips on board. He then used Phillips to reopen and forge a complementary deal with Sony. Next he negotiated new venture money—at a far higher valuation—since both Sony and Phillips had signed on. With new money in the tank, it was fairly straightforward to thread a path of supporting agreements through manufacturers, wholesale and retail distribution channels, content providers, ISPs, and alliance harvard business review †¢ november 2003 page 9 3-D Negotiation A 3-D player’s ability to determine whether a related negotiation happens before or after his own—as well as whether the results become public—can greatly influence the outcome. partners abroad. As the WebTV case suggests, a common problem for a would-be coalition builder is that approaching the most difficult—and perhaps most critical—party offers slim chances for a deal, either at all or on desirable terms. To improve the odds of getting to yes, figure out which partners you would ideally like to have on board when you initiate negotiations with the target party. As the answer to this question becomes clear, you have identified the penultimate stage. Continue mapping backward until you have found the most promising sequence of discussions. Consider the successful sequencing tactics of Bill Daley, President Clinton’s strategist for securing congressional approval of the North American Free Trade Agreement, as reported in a 1993 New Yorker article: â€Å"News might arrive that a representative who had been leaning toward yes had come out as a no. ‘Weenie,’ [Daley would] say. When he heard the bad news, he did not take it personally. †¦He’d take more calls. ‘Can we find the guy who can deliver the guy? We have to call the guy who calls the guy who calls the guy. ’† Beyond pure sequencing, the 3-D negotiator can use the scope of the negotiation—how elements are added, subtracted, combined, or separated—to influence the chances of bringing each party on board. Issues can be added to make a deal more attractive (as Microsoft did with AOL) or a BATNA less attractive (as happened to the Swiss banks). And by not bringing on board a party to whom others have antipathy, negotiators can increase the probability of their success. That’s what James Baker did when building the first Gulf War coalition; by omitting Israel from explicit membership in the group, he was able to attract moderate Arab states. Manage the information flow. Some negotiations are best approached by gathering all affected parties together, fully sharing information, and brainstorming a solution to the shared problem. Frequently, however, vital 3D questions involve deciding which stages of the process should be public or private as well as how information from one stage should spill over to or be framed at other stages. A wry story illustrates the potential of such choices to set up a linked series of negotiations. A prominent diplomat once decided to help a charming and capable young man of very modest background from Eastern Europe. Approaching the chairman of the state bank, the statesman indicated that â€Å"a gifted and ambitious young man, soon to be the son-in-law of Baron Rothschild,† was seeking a fast-track position in banking. Shortly thereafter, in a separate conversation with the baron, whom he knew to be searching for a suitable match for his daughter, the statesman enthusiastically described a â€Å"handsome, very capable young man who was making a stellar ascent at the state bank. † When later introduced to the young swain, the dutiful daughter found him charming, with enviable talents and prospects, and acceptable to her father. When she said yes, the three-way deal allegedly went through—to everyone’s ultimate satisfaction. Setting aside the dubious factual base and ethics of this negotiation, notice how the diplomat’s 3-D actions set up the most promising game for his purposes. By separating and sequencing the stages of the process, as well as opportunistically framing his message at each juncture, the statesman created a situation that fostered an otherwise most unlikely outcome. Of course, had the banker, the baron, the daughter, and the young man been initially thrown together in a face-to-face meeting, it is doubtful that even the statesman’s suave 1-D approach could have closed the deal. Analogously, potential investors should be wary of the common tactic of separating deals to close both: for instance, getting investor A to commit funds based on the commitment of â€Å"savvy investor† B, when B has indeed committed, but only on the informal (and wrong) understanding that â€Å"reputable investor† A has unconditionally agreed to do so. Negotiations to assemble land for a real estate project offer another good example of the importance of staging the release of information. Early knowledge of a developer’s plans can be quite valuable to landowners in the target area. Since landowners may use this knowledge to extract maximum price concessions in later stages of assembly, the need for secrecy and separation of the individual negotiations is usually obvious. Indeed, the choice of which parcel to buy first, second, and so on, may depend on the relative odds that a given purchase will leak the developer’s intentions as well as whether the parcels already obtained would permit some version of the project to go ahead, or whether they would be useless with- harvard business review †¢ november 2003 age 10 3-D Negotiation out a later acquisition. Indeed, a 3-D player’s ability to determine whether a related negotiation happens before or after his own—as well as whether the results become public—can greatly influence the outcome. For example, according to a 1985 article in International Studies Quarterly, while the United States was in separate talks with Japan, Hong Kong, and Korea over textile trade agreements, a Korean n egotiator told the U. S. representatives, â€Å"We’ll ask Hong Kong to go first, then see what they get. The Koreans apparently regarded Hong Kong officials as highly skilled negotiators, with better language skills for dealing with the Americans. An observer reports that, â€Å"After waiting for Hong Kong and Japan to go first, Seoul asked for the features they had secured and then also held out for a bit more. † In essence, the order chosen by the Americans (as encouraged by the Koreans) revealed information about the U. S. approach that was of great value to the Koreans. One wonders whether the Americans should have rethought the sequence and started with Seoul. erfecting these 1-D skills, negotiators should also be innovative 2-D deal designers who have mastered the principles for crafting value-creating agreements. And the third, often-missing dimension—actions taken to change the scope and sequence of the game itself—can be crucial to a negotiation that would otherwise be completely out of tactical reach. Negotiators must take care to keep sophisticated 3-D moves from blurring into the unethical and manipulative. Yet without 3-D actions, coalitions vital to many worthy initiatives could never have been built. To create and claim value for the long term, great negotiators should be at home in all three dimensions. To do anything less is to risk playing a one- or two-dimensional strategy in a three-dimensional world. 1. A complete set of sources for this article can be found at www. people. hbs. edu/jsebenius/hbr/3-DNegotiation. pdf. †¢Ã¢â‚¬ ¢Ã¢â‚¬ ¢ That negotiators should be good listeners, persuaders, and tacticians is a given. But beyond Reprint R0311D; Harvard Business Review OnPoint 5372 To order, see the next page or call 800-988-0886 or 617-783-7500 or go to www. hbr. org harvard business review †¢ november 2003 age 11 Further Reading Harvard Business Review OnPoint articles enhance the full-text article with a summary of its key points and a selection of its company examples to help you quickly absorb and apply the concepts. Harvard Business Review OnPoint collections include three OnPoint articles and an overview comparing the various perspectives on a specific topic. 3- D Negotiation is also part of the Harvard Business Review OnPoint collection Masterful Negotiating, Product no. 5410, which includes these additional articles: Six Habits of Merely Effective Negotiators James K. Sebenius Harvard Business Review March 2002 Product no. 9411 Negotiating the Spirit of the Deal Ron S. Fortgang, David A. Lax, and James K. Sebenius Harvard Business Review February 2003 Product no. 3051 To Order For reprints, Harvard Business Review OnPoint orders, and subscriptions to Harvard Business Review: Call 800-988-0886 or 617-783-7500. Go to www. hbr. org For customized and quantity orders of reprints and Harvard Business Review OnPoint products: Call Frank Tamoshunas at 617-783-7626, or e-mail him at [email  protected] harvard. edu page 12