The fusion energy experimental Tokamak site negotiation.

Burruss, J.R. ; Barkacs, Craig B. ; Barkacs, Linda L. 等

CASE DESCRIPTION

The purpose of this case is to provide an international negotiation simulation exercise, derived from a specific setting adapted from a real situation, that tests the ability of students to overcome cultural and political obstacles while engaging in coalition building in order to structure an integrative and mutually beneficial agreement. The case is appropriate for upper division undergraduate students or graduate students, depending upon the depth with which the instructor wishes to explore the case and the instructor's comfort level with the issues included in the case. The negotiation exercise is designed to take about two to three hours (including the debrief), although more time may be spent on it. The case requires that students devote approximately one hour of preparation for the case, but this time can be spent outside class if necessary.

CASE SYNOPSIS

The Fusion Energy Experimental Tokamak ("FEET") Site Negotiation simulation is a multiparty and coalition building negotiation exercise. Inspired by the real-world negotiations surrounding the International Thermonuclear Experimental Reactor (ITER), this fascinating multiparty negotiation simulation provides outstanding lessons in coalition building, difficulties in maintaining coalitions, intercultural communication, real world politics and, of course, negotiation skills. The real-world ITER negotiations (pronounced "ee-ter", which is Latin for "the way") had their roots in a 1984 proposal by the Soviet Union seeking a method to harness nuclear fusion as an energy source. More specifically, the proposed ITER reactor would essentially be a gigantic vacuum vessel surrounded by super-conducting coils that magnetically confine hydrogen plasma in the shape of a doughnut. Once accomplished, the temperature of the plasma will then be increased to the point of igniting fusion, a method that scientists view as a credible first step to capturing fusion as a feasible commercial energy source.

Despite having had its genesis in 1984, the real-world negotiation involving ITER was not completed until June of 2005. Distilled to its essence, the ITER negotiation resulted in France being designated as the location for the reactor with Japan being granted the lead role in managing and directing the effort. Accordingly, the research related jobs primarily will go to Japan, and the construction jobs will go to France. This real-world outcome--after such protracted negotiations spanning over 20 years--is provided for informational purpose only and is not at all suggestive of what should or should not happen when conducing the FEET simulation.

FEET, while inspired by ITER, is nevertheless separate and distinct from ITER and, in fact, the outcome with the most possible points for ALL of the parties in the FEET simulation would be for the parties to agree to build two reactors. Interestingly, none of the six parties individually has the allocated resources to fund one FEET reactor, but collectively the six parties actually have the resources to fund two FEET reactors. Despite intense disagreement by the parties over where to build any FEET reactor, the parties nevertheless share a desire to fund FEET. Given that, no one party has enough money its budget to fund a FEET reactor on its own, the parties are required to negotiate over 1) where to locate the FEET reactor, and 2) how to apportion the cost.

While none of the parties knows for certain whether there are sufficient funds for two FEET reactors, if any one party withdraws from the negotiation it is certain that there will only be enough money for one FEET reactor. In addition to each party's primary motivation to fund at least one FEET reactor, each party has a secondary motive: For Russia it is to procure funding for a second FEET reactor, for all others it is to advance their preference for the site location.

Each party's tertiary goal is to minimize cost (i.e., to reduce its financial contribution to FEET). While this cost reduction motive may lead some parties to withdraw from the negotiations and let other parties bear the full financial burden of FEET, this is balanced by the risk of triggering a cancellation of FEET (which requires $15 Billion to fund) and the lost opportunity to influence the site location of FEET (or in the case of Russia, the funding of a second FEET reactor).

Given that the best outcome for ALL parties is to agree to build two reactors, the scoring component in this simulation operates less as a pie-expansion or trade-off mechanism and more as an incentive to prioritize. In addition to the specific prioritizing function of getting at least one reactor funded (if not two), the scoring component also provides a modest incentive for the participants to assume various cultural and political roles during the simulation. A remarkable phenomenon to observe during the simulation is how the secondary cultural and political components can overtake what should be the dominant objective of agreeing to fund at least one FEET reactor.

INSTRUCTORS' NOTES

Background

The Fusion Energy Experimental Tokamak ("FEET") Site Negotiation simulation is a multiparty and coalition building negotiation exercise. None of the six parties individually has the allocated resources to fund one FEET reactor, but collectively the six parties actually have the resources to fund two FEET reactors.

FEET is inspired by the real-world negotiation involving the International Thermonuclear Experimental Reactor ("ITER"), which involved the same six parties. ITER (pronounced "ee-ter", which is Latin for "the way") was suggested in 1984 by the former Soviet Union as a proposed method of harnessing nuclear fusion as an energy source. The concept behind ITER is to construct a gigantic vacuum vessel surrounded by super-conducting coils that magnetically confine hydrogen plasma in the shape of a doughnut. Once that is accomplished the temperature of the plasma will then be increased to the point of igniting fusion.

Despite having begun in 1986, the real-world negotiation involving ITER was not completed until June of 2005. (It is suggested that less time than that be used to conduct the FEET the simulation!) In real life, the ITER reactor costs were divided thus:

 EU (host): 50%;
 Other 5 parties: 10% each.

The foregoing distribution would correspond to the host in the FEET simulation paying $7.5 Billion and each of the other five participants paying $1.5 Billion. Interestingly, this real-life outcome is entirely possible in the fictional FEET case.

The proposed costs for the real-world ITER project are 10 billion Euro for the construction of ITER, its maintenance, and the research connected with it during its lifetime. It was at the June 2005 conference in Moscow that the six participating members of the ITER cooperation agreed on the funding contributions of 50% by the hosting member (the European Union) and 10% by each non-hosting member. Although Japan's contribution as a non-hosting member is only 10%, the EU agreed to grant it a special status so that Japan will provide for 20% of the research staff at Cadarache and be awarded 20% of the construction contracts, while the European Union staff and construction components contributions will be cut from 50 to 40%.

This real-world outcome--after such protracted discussions spanning almost 20 years--is provided for informational purpose only and is not at all suggestive of what should or should not happen when conducting the FEET simulation. FEET, while inspired by ITER, is nevertheless separate and distinct from ITER and, in fact, the outcome with the most possible points for ALL of the parties in the FEET simulation would be for the parties to agree to build two reactors.

Despite the parties' differing views regarding the various site locations, the parties are nevertheless motivated to come together by a common desire to generate enough funding to launch the FEET reactor project. As indicated, no one party has enough money in its budget to fund construction of a FEET reactor on its own, leaving 1) where to locate the FEET reactor, and 2) how to apportion the cost as the main points of contention.

Also as indicated, it is possible to fund two FEET reactors--there is $32 Billion at the table, $2 Billion more than is needed for two FEET reactors. If, however, any party withdraws from the negotiation there will only be enough money for one FEET reactor. In addition to each party's primary motivation to fund at least one FEET reactor, each party has a secondary motive: For Russia it is to procure funding for a second FEET reactor, for all others it is to advance their preference for the site location.

Each party's tertiary goal is to minimize cost (i.e., to reduce its financial contribution to FEET). While this cost reduction motive may lead some parties to withdraw from the negotiations and let other parties bear the full financial burden of FEET, this is balanced by the risk of triggering a cancellation of FEET (which requires $15 Billion to fund) and the lost opportunity to influence the site location of FEET (or in the case of Russia, the funding of a second FEET reactor).

Given that the best outcome for ALL parties is to agree to build two reactors, the scoring component in this simulation operates less as a pie-expansion or trade-off mechanism and more as an incentive to prioritize. In addition to the specific prioritizing function of getting at least one reactor funded (if not two), the scoring component also provides a modest incentive for the participants to assume various cultural and political roles during the simulation. A remarkable phenomenon to observe during the simulation is how the secondary cultural and political components (from a point value standpoint) can overtake what should be the dominant objective of agreeing to fund at least one reactor, let alone two reactors.

The take-aways from this exercise are many. A main objective is to expose the student to the many dimensions of multi-party negotiations. A multi-party negotiation is one in which a group of three or more individuals, each representing their own interests, attempt to resolve their actual and/or perceived differences (Thompson, 2004). In multi-party negotiations, issues of process abound as coalitions form and social interactions become more complex. Trade-offs are more difficult. There are problems of voting and majority rule, as well as communication breakdowns.

A coalition is formed when two or more individuals from the multi-party negotiation combine their resources to affect the outcome (Thompson, 2004). Coalitions are a vehicle for otherwise weak members to get a greater share of the resources. Ironically, the members of the coalition also compete with each other regarding allocation of any share the coalition obtains.

Another problem to be dealt with in multi-party negotiations is that it is more difficult to obtain trade-offs. Students should learn to achieve trade-offs in multi-party negotiations through circular logrolling and reciprocal trade-offs. In circular logrolling, each member must offer a concession on one issue and receive a concession from another member on a different issue. Reciprocal trade-offs are when two members of the larger group directly engage in trade-offs (Thompson, 2004).

A problem that tends to arise in multi-party negotiations is the desire of group members to simplify the negotiation by instituting voting and/or decision rules. These types of rules can result in less effective outcomes in terms of pie-expansion. For example, some of the group members may decide to institute majority rule. Such voting completely ignores individual preferences, regardless of how strong a member may feel about the particular issue being voted on (Thompson, 2004). Accordingly, there is no integrative trade-off among issues.

Another problem with majority rule is the condorcet paradox, in which who wins a majority rule election will change depending upon the order in which various alternatives are proposed (Thompson, 2004). An alternative presented later in the voting is more likely to survive. A negotiator well versed in the condorcet paradox could arrange to have his or her preferences voted on in the latter stages of sequential voting. Strategic voting may also occur. This is when a group member strategically misrepresents his or her preference so that a preferred option is more likely to be favored by the group. An example would be when a group member votes for his or her least preferred option to ensure that a potentially more competitive second choice option is eliminated.

Other groups may institute a unanimity rule. Though time-consuming, outcomes are often more efficient than with groups using the majority rule (Thompson, 2004). Members must consider ways to satisfy the interests of the other members of the group. This can result in more creative outcomes. Absent unanimity, parties may make consensus decisions. These require everyone to consent before an agreement becomes binding, however, unanimity may not exist. This is because while the parties must publicly agree to a particular settlement option, their private views may be in conflict. Multi-party negotiations that use consensus decision making often result in compromise, with the lowest common denominator becoming the agreed upon option (Thompson, 2004).

Finally, multi-party negotiations sometimes involve breakdowns in communication. Participants may fail to send a message that needs to be sent, an inaccurate message may be sent, or a message may be sent but not received. All parties need to listen to one another and any misunderstandings need to be cleared up immediately. Sometimes, in an effort to prevent miscommunication, parties may break up into smaller groups and privately caucus. This is unfortunate because if the parties are able to maintain communication with the larger group there is a greater likelihood of increased profitability and more equal distribution among the group members (Thompson, 2004).

Multi-party negotiations, like other negotiations, may fall prey to typical miscommunications. People hear what they want to hear, interpret things in ways that are favorable to them, and ignore information that does not support their position. Moreover, most people are not very skilled in seeing the other party's perspective. When one party has information that the other party is unaware of, that party nonetheless acts as if the other party is aware of the information. This is known as the curse of knowledge (Thompson, 2004).

The goal of this negotiation exercise is for the parties to experience a multi-party negotiation, analyze what happened during the exercise, and through the debrief with the instructor understand what happened. More importantly, by recognizing classic errors in negotiation performance, process, and communication, it is hoped that the student will leave with a better understanding of how to increase one's likelihood of success in multi-party negotiations.

Running the Simulation and Scoring the Results

With six parties to the negotiation, it is recommended that each party be represented by one or two people (two seems to work very well). If only one party is represented by a second negotiator, it works well for the E.U. to be that party so, for example, one E.U. representative could serve as chair and would abstain from making (or seconding) motions or voting, while the other could serve as a voting, motion-making member. [NOTE: Such a distinction in the E.U. roles if there are seven participants is merely a suggestion.] If only 5 participants are available, remove Russia (say, for example, that Russia withdrew from the negotiations.) For 8 or more, consider assigning multiple negotiators for each party, but each party must still be restricted to a single vote and should not second its own motions.

Each party is provided with 1) a specific Role sheet, 2) a specific Negotiation Style sheet 3) an identical General Information sheet, and 4) the same Rules of Order sheet. (As an aside, the Rules of Order sheet provides a nice summary of, or in some cases, a brief introduction to basic rules surrounding how formal meetings are often run.)

The simulation is designed to take place over three "days". The facilitator is free to determine how long each "day" is to last, but a "day" should be a minimum of 15 minutes--and considerably longer if time allows. While the meetings are in session, the parties are not free to leave the table and privately caucus. After the first and second "day", the parties should be given a timed break (5 to 10 minutes) during which they can 1) withdraw from the negotiation, 2) refuse to speak to anyone, or 3) privately caucus. To the extent private caucusing takes place, this could be a fertile topic of discussion during the debriefing session. More specifically, it should be interesting to hear various perspectives on how or whether any private caucusing that occurred advanced or impeded the negotiation.

At the outset of the simulation, certain patterns are likely to occur. Japan and Korea form a natural coalition. The U.S. and the E.U. take positions for Spain and France, respectively. China is opposed to Japan, but otherwise uncommitted. Wanting two FEET reactors, Russia is neutral with respect to the site selected for a second FEET reactor, but demands that the first FEET reactor be in Russia. Each party has a very poor BATNA (Best Alternative to a Negotiated Agreement), and is eager to reach an agreement.

[NOTE on BATNA: A negotiator must determine his/her Best Alternative to a Negotiated Agreement. This is so important that it has been made into an acronym. A BATNA is the point at which a negotiator is prepared to walk away from the negotiation table. A negotiator should be willing to accept any set of terms superior to their BATNA. Moreover, a negotiator should reject any set of terms that are worse than their BATNA (Fisher, et al. (1991), Thompson, 2004).]

The Biggest Possible Pie: The highest possible score (exclusive of cultural points) is achieved when all parties agree to fund FEET reactors in both Japan and France, and to apportion the cost so that the leftover $2 Billion is kept by Russia, China, and Korea. This is an unlikely outcome, however.

Biggest Reasonable Pie: After three days of coalition building, Japan and Korea convince the U.S. to join together to fund a FEET reactor in Japan. China and Russia join with the E.U. to a second FEET reactor, thus increasing their scores.

U.S. Power Play: The U.S. joins the Japanese coalition. The U.S. persuades China to join the Japanese coalition, thus blocking the French site. China is better off since they can now obtain a higher financial contribution score. Russia and E.U. join because they can make minimal financial contributions and improve their scores.

For large groups of people, it is also recommended that each party have assigned to it at least one person acting as a formal observer. Any such formal observer should be given 1) all of the information provided to the specific party being observed, and 2) a Score Sheet (see "Scoring Guide," earlier in this paper) with the understanding that all observers are expected to score the party he or she is assigned to and to contribute significantly to the debriefing process. Such a format has the virtue of actively engaging those who are not directly negotiating in the simulation.

Observers should use the score sheet that follows (provided separately to each observer) to assist in totaling the negotiation score. For items with * (an asterisk), see notes below.

The Political Component

The political component integrated into the simulation not only adds interest, but also has a basis in reality from the real-world ITER negotiations concluded in June of 2005. Consider the following excerpt from an article in The Economist that appeared shortly after agreement was reached:

ITER is a joint project between America, most of the European Union, Japan, China, Russia and South Korea. For the past 18 months, work was at a standstill while the member states wrangled over where to site the reactor in what was generally recognized as a proxy for the debate over the war in Iraq. America was thought to support the placing of ITER in Japan in return for Japan's support in that war. Meanwhile, the Russians and Chinese were supporting France, which, like them, opposed the American-led invasion. That France was eventually chosen owes much to the fact that the European Union promised to support a suitable Japanese candidate as the next director general of ITER. (Nuclear ambition, The Economist, June 30, 2005)

Conclusion

The real-world tension integrated into the FEET simulation is very much appreciated by the participants, who tend to do an admirable job of animating various political motivations. The FEET simulation has been run very successfully with U.S. military officers and Intelligence officials, who seem particularly adept in understanding the political nuances. Regardless of the background of the participants, however, the FEET simulation plays out extremely well and provides everyone with an interesting and engaging educational experience. The real-world nature of the FEET simulation--derived straight from the headlines--creates a context rich in learning opportunities with respect to dealing with multiple parties, building coalitions, maintaining coalitions, managing intercultural communications, contending with political biases and, of course, cultivating negotiation skills. Accordingly, the simulation provides no shortage of topics to discuss and explore during the post negotiation debriefing analysis.

NEGOTIATION TERMS (FOR INSTRUCTOR'S USE IN DEBRIEF)

BATNA: A negotiator must determine his/her Best Alternative to a Negotiated Agreement. This is so important that it has been made into an acronym. A BATNA is the point at which a negotiator is prepared to walk away from the negotiation table. A negotiator should be willing to accept any set of terms superior to their BATNA. Moreover, a negotiator should reject any set of terms that are worse than their BATNA (Fisher, et al. (1991), Thompson, 2004).

EXPANDING

THE PIE: Expanding the pie is a method used to create integrative agreements through the use of integrative negotiation. It is the opposite of Pie Slicing, also known as Distributive Negotiation or Fixed Pie Negotiation, a faulty perception that the parties' interests are completely opposed. Expanding the pie means identifying trade-offs and avoiding compromise (Thompson, 2004).

INTEGRATIVE

NEGOTIATION: Integrative negotiation is also known as "win-win" negotiation. Common misperceptions are that win-win negotiation means compromise, an even split, feeling good or building relationships. What win-win really means is that both parties are better off than if there were no agreement. The very best integrative outcome--an optimal agreement--means all creative opportunities are exploited and no resources are left on the table. (Thompson, 2004).

REFERENCES

Chaney, L.H. & J.S. Maring. (2004). Intercultural Business Communication (3rd Ed.), Pearson Prentice Hall.

China: Chinese Business Etiquette, Manners, etc., Retrieved April 2, 2005 from http://www.cyborlink.com/besite/china.htm

Cultural Business Considerations for South Korea, Retrieved April 2, 2005 from http://www.exportmichigan.com/cg_ap_korea_cultural.htm

Detailed Information on the ITER Program, Retrieved March 8, 2006 from http://www.ofes.fusion.doe.gov/iter.html.

Executive Planet Doing Business in Russia, Retrieved April 2, 2005 from http://www.executiveplanet.com/businessetiquette/Russia.html

France Gets Nuclear Fusion Plant, Retrieved March 8, 2006 from http://news.bbc.co.uk/2/hi/science/nature/4629239.stm.

Fisher, Ury & Patton. (1991). Getting to Yes (2nd Edition), New York: Penguin Books.

ITER, Retrieved March 8, 2006 from http://www.iter.org/index.htm.

ITER, Retrieved March 8, 2006 from http://en.wikipedia.org/wiki/ITER.

Nuclear ambition, The Economist, June 30, 2005, http://www.economist.com/science/displayStory.cfm?story_id=4127211

Payne, N. (2005). Cross Cultural Negotiation, Retrieved April 2, 2005 from http://www.sideroad.com/Cross_Cultural_Communication/ cross-cultural-negotiation.html

Sergey, Frank, (2003).South Korea Business, Diplomacy and Face, Retrieved April 2, 2005 from www.executiveplanet.com/ business-etiquette/South+Korea.html (Akauntan Nasional, June 2003, pp.48-49)

Thompson. (2004). The Mind and Heart of the Negotiator (3rd Edition), Upper Saddle River, NJ: Prentice Hall

U.S. ITER Project News, Retrieved March 8, 2006 from http://fire.pppl.gov/iter_us_news.html.

J.R. Burruss, University of San Diego

Craig B. Barkacs, University of San Diego

Linda L. Barkacs, University of San Diego

BATNAs (before cultural points)

U.S. 40
Japan 15
Korea 15
E.U. 40
Russia 15
China 65

TOTAL 190 (exclusive of cultural points)

U.S. 100
Japan 150
Korea 150-190
E.U. 150
Russia 130-170
China 100-140

TOTAL 820 (exclusive of cultural points)

U.S. 100-120
Japan 150-160
Korea 150-190
E.U. 150
Russia 130
China 100

TOTAL 790-820 (exclusive of cultural points)

U.S. 105-145
Japan 130-170
Korea 130-170
E.U. 105-145
Russia 80-120
China 120

TOTAL 745-825 * (exclusive of cultural points)

* Maximum score in this range is unlikely