Pre-Class Exercise 5

Guidelines

 Answer all questions

 Bullets preferred
 Do not repeat case facts and questions
 Please check the course outline to check evaluation weightages and risks

Submission

 Put the following in the SUBJECT line: NEG, your first name, slash, followed
by roll no, slash, and followed by pre class exercise with number.

For example:

Subject: NEG/Rama/23/PCE 5

 Submit your answers to CAMU to reach latest by 11.55 PM today

(18.04.2023).
 Submissions received beyond time limit, without proper subject line
whatever the reason will not be evaluated.

Question

Based on Banyan House (C)

1. Did Prasad do the right thing by letting Shah make the 1st offer? Begin
with clearly stating your stand Yes/No. Then justify.
Yes, Prasad did the right thing by letting Shah make the first offer. By doing
so, Prasad gained some important information about Shah's valuation of
Banyan House. Moreover, it allowed Prasad to position his counteroffer
based on Shah's initial valuation. Prasad's response to Shah's opening
gambit was also clever, as it put the onus on Shah to reveal his maximum
valuation, which could give Prasad an upper hand in the negotiation.
 2. Did Prasad do the right thing with his 3.5 crores counter offer? Begin with
clearly stating your stand Yes/No. Then Justify.
Yes, Prasad did the right thing with his 3.5 crores counteroffer. He used a
strategic approach by choosing a price point that was above his aspiration
level, but not too high as to be unreasonable. Moreover, he supported his
counteroffer with a strong argument about the high cost of moving to a
tranquil environment with high real estate values. This tactic helped him
justify his counteroffer and strengthened his bargaining position.
3. What would you have done if you were in Prasad’s seat?
If I were in Prasad's seat, I would have also let Shah make the first offer.
This would provide me with valuable information about Shah's valuation of
Banyan House and allow me to position my counteroffer accordingly.
However, I would have been more flexible with my counteroffer and tried
to explore other potential areas of compromise. For instance, I might have
proposed a phased transition that would allow Banyan House to sell the
property to Shah over a longer period, thereby reducing the cost of moving.
I would also have tried to find out more about Shah's underlying interests
and concerns, and explore potential areas of common ground that could
lead to a mutually beneficial agreement.

Note: Before answering these questions, please read page 27 to 37 of Negotiation

Genius. From Section heading “common negotiation mistakes” till before start of
“how far can I push them” No common-sense answers please