The Galactica SUV (1).

Barkacs, Craig B. ; Barkacs, Linda L.

CASE DESCRIPTION

The purpose of this case is to provide an intercultural/international negotiation exercise that tests the ability of students to overcome cultural obstacles and think outside the box in order to structure a creative deal. The case has a difficulty level of five to seven, depending upon the depth with which the instructor wishes to explore the case, as well as the comfort level of the instructor with respect to the various issues. The negotiation exercise is designed to take from one and a half to two class hours (including the debrief), although more time may be spent on it. The case also requires approximately thirty to forty-five minutes of in-class or outside preparation time by the students.

CASE SYNOPSIS

What do you suppose would happen if a space alien from a distant and different culture arrived on the lot of a futuristic planet earth spacecraft dealership to negotiate the purchase of a space vehicle? In order to find out, climb into a Galactica SUV spacecraft, buckle up, and enjoy the ride!

This case is designed for use as a role playing opportunity in an international negotiation class. The subject matter of the negotiation derives from an activity many students have already engaged in--the purchase of a vehicle (in this case, however, that vehicle is a futuristic spacecraft, i.e., the Galactica SUV). Each student is assigned a role, either that of space alien CN-319 (the buyer) or that of earthling Spacey Starr (the seller), and then given time to prepare. The student is instructed to stay in role for the duration of the negotiation. Moreover, the student must make use of the cultural characteristics provided for each assigned role.

In order to avoid the cultural stereotyping that occurs in most intercultural or international negotiation exercises, this case deftly finesses the issue by creating two fictional cultures. CN-319, the prospective buyer, is a Banatarian from the planet Banatar, and each student playing this role is given a confidential role sheet describing certain cultural characteristics of Banatarians. Spacey Starr, the seller, is an earthling. Unfortunately for Spacey Starr, however, earthlings often confuse Banatarians with Vanatarians (from the planet Vanatar). While Banatarians and Vanatarians share some common cultural characteristics, they are diametrically opposed on others. Spacey Starr, who mistakenly believes prospective buyer CN-319 is a Vanatarian, prepares for the negotiation by becoming acquainted with Vanatarian cultural characteristics, which are outlined in the confidential role sheet provided to those playing the role of Spacey Starr. Accordingly, the well-intentioned (but ill-informed) Spacey Starr character inadvertently tends to commit cultural faux pas after cultural faux pas.

In addition to substantive lessons on conducting an integrative negotiation, the case also introduces a variety of cultural issues that often can and do occur in a real world intercultural or international negotiation. By having to contend with cultural confusion, the case tests the ability of students to deal with cultural errors, learn from mistakes, and overcome them. After the negotiation exercise has been completed, the instructor thoroughly debriefs the case to explore both the negotiation and cultural issues. Detailed instructions on how to conduct a debrief are included. Moreover, there is also a list of negotiation terms and definitions to assist those who are new to teaching negotiation.

INSTRUCTORS' NOTES

Recommendations for Teaching Approaches

The instructor should be familiar with the entire case before attempting the exercise in the classroom. At the beginning of the class, separate the students into individual groups of two. One student will play the role of CN-319, the potential buyer of a Galactica SUV. The other student will play the role of Spacey Starr, the seller of the Galactica SUV. Each student is given his or her confidential role information, which includes the factual background necessary for the negotiation, as well as the cultural characteristics they need to be familiar with. If possible, it is recommended that you copy the material (i.e. the role sheets) so that the factual information is on one side of the sheet of paper, and the cultural characteristics information is on the reverse side. It is also often helpful to copy the role sheets for each side of the negotiation on different colored paper so that you can quickly identify which student is the buyer and which is the seller.

Once all the pairings of students have reached a deal or an impasse (or time has been called), the students should be instructed to fill out the attached "deal sheet." (See end of this document for copy of the "deal sheet"). The deal sheets are then collected. The students are then instructed to write the outcome of their negotiation on the board for all to see. At this point, the debrief begins.

HOW TO DO THE DEBRIEF--PART ONE: THE DEAL

The instructor should begin with a discussion of "BATNA"--the Best Alternative To a Negotiated Agreement. By definition, there is only one BATNA, given that it is the "best" alternative. A formal discussion of BATNA may be found in Getting to Yes by Fisher and Ury or The Mind and Heart of the Negotiator by Leigh Thompson (See also "Negotiation Terms," included as part of this case). The instructor should also discuss "ATNA"--Alternative To a Negotiated Agreement. This is the generic derivation of BATNA, simply identifying one or more alternatives to a negotiated agreement without specifying such as the "best" alternative. For a buyer, establishing a BATNA determines the highest price he or she is willing to pay (because if he or she must pay more than that specific amount, then such a buyer would rather do something else - i.e., take an "alternative" or fall-back position). Conversely, for a seller, establishing a BATNA determines the lowest price at which he or she is willing to sell.

Suggested Questions for Cn-319 (The Buyer)

1. If CN-319 (the buyer) is unable to reach a deal with Spacey Starr, what is CN-319's BATNA?

CN-319 can buy the spacecraft from the dealer in the next solar system over (two hours away) for ^47,800. (This is certainly a pretty strong BATNA, but it is not without some possible risk, e.g. although they say they can deliver the SUV, CN-319 is NOT present there.)

2. What if the SUV in the neighboring solar system is sold in the meantime?

Student answers will vary, although the main problem with such an outcome would be that the CN-319's boss (XR-424) would be profoundly disappointed that his/her instructions to obtain the SUV today were not followed. Students might suggest, however, that attempting to make the purchase over the cell-screen (rather than having to fly there in person) would obviate this problem.

3. What if the actual price of the competing dealer in the neighboring solar system turns out to be more, e.g., a bait and switch tactic?

It depends. Even if the competing dealer in the neighboring solar system tries to get more than the ^47,800 originally quoted, it is possible that the price would still be less than the ^51,800 price quoted by Spacey. If there is insufficient movement in Spacey's price, CN-319 (the buyer) may simply wish to do business with the competing dealer in the neighboring solar system.

4. What are the CN-319's ATNAs?

ATNA #1: Get the spacecraft from The Snicker's Galaxy dealer for ^46,000 in 2 weeks (This is very poor outcome - delivery is way too late for the honeymoon.) ATNA #2: No deal--an extremely bad outcome, given that XR-424 told CN-319 "I must absolutely have [the Galactica SUV] by tomorrow, in time for JK-957 and me to take it on our honeymoon," and, also told CN-319, "Make it happen, CN-319."

Suggested Questions for Spacey Starr (The Seller)

1. What is Spacey's BATNA?

No deal!--such an outcome is very bad because "no deal" means no commission, no bonus, and no defraying of debt (which is the ^4,000 Spacey has already accumulated). The instructor should point out that sometimes one's BATNA may not be good, or may in fact even be quite awful, i.e., the fallback position is terrible. Considering that the "no deal" BATNA for the seller in this case is in fact quite awful, Spacey should be highly motivated to make a deal.

Let's take a look at the initial bargaining zone parameters in this case:

Spacey's Employer (Avery) = Does not want Spacey to sell below ^51,800 CN-319's Employer (XR-424) = Indicates CN-319 should pay ^46,000 or less ^0 <--^46,000--] [--^51,800--[right arrow]

There is no overlap, which = a negative bargaining zone. A discussion of negative bargaining zones may be found in The Heart and Mind of the Negotiator by Leigh Thompson. A definition may be found under "Negotiation Terms," included as part of this case.

Consider next how the parties can move closer together:

CN-319 (the buyer) knows he/she can go up to ^47,800 and get a spacecraft right away (at the dealership one solar system over). Spacey (the seller) has the okay to sell for ^48,000

^0 <--^47,880--] [--^48,000--[right arrow]

With this understanding, there is still a negative bargaining zone, but it is much smaller.

2. Spacey wants that ^4,000 bonus--he/she only needs to sell one more spacecraft to get it. What does this really mean?

Spacey can get a ^4000 credit (his/her bonus amount) for selling any spacecraft, so if he/she sells the spacecraft for ^48,000, he/she gets:

^4,000 bonus ^ 1,000 commission (25% of anything over ^44,000) ^5,000 Total Bonus + Commission

If Spacey does not sell a spacecraft, Spacey loses his/her ^4,000 bonus and gets no commission.

3. Can Spacey sell a spacecraft for less than ^48,000, still get a bonus and some commission, and keep his/her boss happy?

Yes! But how ... Example: What if CN-319 (the buyer) will only pay, say, ^46,000 for the spacecraft? Can Spacey still obtain his/her objectives? Here is how:

A. Spacey sells a spacecraft, so Spacey gets a ^4,000 bonus.

B. At ^46,000, the spacecraft is ^2000 above the ^44,000 cost, so Spacey gets 25% of ^2000, which equals ^500.

C. Spacey's employer, however, did not authorize a sales price below ^48,000. What can Spacey do? Answer: Spacey still sells the spacecraft for a nominal ^48,000 sales price, but gives CN-319 a ^2000 rebate out of the ^4000 bonus.

RESULT: Spacey nets ^2500, which is ^2000 of the bonus plus ^500 commission. Although Spacey has to surrender ^2000 of his bonus to make this deal, such an outcome is still obviously better for Spacey than no deal. After all, no deal for Spacey means no bonus and no commission.

Technical Argument Spacey might try to make to increase his or her take: Spacey tells employer Avery--"I got the price you wanted (by throwing in the ^2000 of my bonus), so I should get my full commission (i.e. 25% x ^4,000 = ^1000)

4. How low can Spacey drop the price and still meet all of his/her objectives?

This is the break even point, which is effectively Spacey's BATNA (and reservation point) in that it has the same financial impact on Spacey as no deal at all, i.e., Spacey makes nothing to defray his/her debt.)

Answer: ^43,000 (Spacey's break even)--How?

^4,000 bonus (for selling an SUV)--employer (Avery) pockets the bonus (47,000) + 1000 commission (25% of ^4000 [the amount OVER ^44,000]) (48,000) ^5,000

To make this point clearer, consider the analysis in question 5, which follows:

5. Spacey tells the employer (Avery)--"Don't pay me the ^1000 commission." What did the dealership get?

The dealership gets a ^48,000 benefit as follows:

^43,000 Selling Price ^ 4,000 The amount of Spacey's bonus the dealership gets to recoup ^ 1,000 The amount of Spacey's commission the dealership gets to recoup ^48,000 TOTAL Benefit to Dealership

Point #1: If Spacey sells for anything over ^43,000, he/she has an argument to put at least some money in his/her pocket.

Point #2: If Spacey sells for anything less than ^43,000, he/she would owe the dealership money

Point #3: The nominal sales price to the buyer CN-319 under such circumstances would be ^48,000, with a special one-time only rebate of ^5,000. (A stated nominal and public price of ^48,000 with an unadvertised one-time only rebate to CN-319, obviates to some extent the concern about having to make the same deal to the next customer who walks on the lot.)

Consider now the bargaining zone parameters in this case: ^0 <--]^47,800 (CN-319 - the Buyer) (Spacey - the Seller) ^43,000[--[right arrow]

6. What do we have now?

positive bargaining zone with a broad range totaling ^4,800 (also known as a ZOPA--Zone Of Possible Agreement--see definition in "Negotiation Terms" portion of the case).

 Apart from the extensive and instructive intercultural components
 of this case that are thoroughly addressed in Part Two, the
 strength of this negotiation exercise is its ability to illustrate
 both 1) how to engage in an integrative negotiation, and 2) what
 the benefits are of an integrative negotiation. For purposes of
 this case, an integrative (or win-win) negotiation means bringing
 other considerations, not just the asking price, into the deal. The
 most prominent example of the integrative potential in this case is
 the way in which Spacey Starr can use his/her commission and bonus
 money to create a positive bargaining zone where none previously
 existed and, most importantly, to avoid his/her dreadful BATNA,
 which would mean no deal and no defraying of Spacey's debt! One of
 the most gratifying developments to witness is when participants
 come up with creative possibilities not originally contemplated by
 the case, e.g., various added incentives to make the deal even
 better for both parties. Such integrative thinking, of course,
 serves to craft even better agreements by expanding the pie (see
 definition of "integrative negotiation" and "expanding the pie" in
 the "Negotiation Terms" portion of the case).

HOW TO DO THE DEBRIEF--PART TWO: INTERCULTURAL ISSUES

In order to avoid the real world cultural stereotyping that inevitably occurs when conducting an international negotiation exercise, for purposes of this case two fictional cultures were created. As set forth in their respective roles, CN-319 (the buyer) is from the planet Banatar, while Spacey Starr (the seller) mistakenly believes CN-319 is from the planet Vanatar. Accordingly, in preparation for meeting CN-319, Spacey decides to acquaint him/herself with Vanatarian culture. In order to compound Spacey's confusion, Spacey learns that v's and b's are sometimes pronounced same way on Vanatar. Accordingly, when CN-319 states that he/she is from Banatar, Spacey (wrongly) infers that CN-319 is simply pronouncing the "b" as a "v".

Invariably, Spacey's first cultural faux paus occurs right from the beginning when he/she attempts to greet CN-319 with some type of warmth and physical contact (usually either a handshake or hug). And while this would be perfectly appropriate for greeting a Vanatarian, it is unmistakably offensive to a Banatarian, which is of course what really CN-319 is. Just to keep Spacey guessing, the case is set up so Banatarians and Vanatarians do share some common cultural characteristics, such as both being from matriarchal societies with similar gender-loaded phrases (with the notable "Viva El Papa" exception!). As a result, Spacey doesn't know how much of his/her cultural knowledge is reliable and, not surprisingly, those playing the role of Spacey inadvertently tend to offend and insult CN-319 with great frequency. Accordingly, the cultural lessons from this case dynamic are many.

The Lesson of Misinformation

Having Spacey consulting and relying upon Vanatarian cultural characteristics instead of Banatarian cultural characteristics makes two points, the first of which is the lesson of misinformation. With respect to the lesson of misinformation, what we think we know about other cultures (or what we believe other cultures to be like) is simply wrong. Rumors, urban legends, arrogance, ignorance, bigotry, and even sloppy research can all contribute to misinformation. Accordingly, it is quite possible for people to enter into a negotiation with an abundance of overconfidence and/or a host of misperceptions. This case is structured in such a way as to insure that Spacey encounters the consequences of misinformation.

The Lesson of Cultural Stereotyping

The second point made by having Spacey consulting and relying upon Vanatarian cultural characteristics instead of Banatarian cultural characteristics is that, even if our cultural information is generally correct, we are still negotiating with individuals. And while it may be true that most people from a culture may conduct themselves in a similar way, it doesn't mean that the individual with whom you are dealing necessarily conducts himself or herself the same way. This point is often made by as asking a room full of mostly U.S. students, what is U.S. culture and what is the U.S. negotiating style? Such an inquiry will likely strike the class as naive and simplistic. Substantive responses may range from comments such as it depends on the individual, to it depends on the region, to it depends on social and economic class, to it depends on education, and so on and so forth. Even so, one can easily find quick summaries on U.S culture and negotiating styles that may be generally true, but specifically useless. Accordingly, even if Spacey had become familiar with Banatarian cultural characteristics, he or she very well might have encountered a Banatarian who defied the norm. As a result, the case to some extent can be seen to provide this type of phenomenon for Spacey to experience as well.

The Lesson of Cultural Noise

Spacey also has to work through the cultural noise of uncertainty and insecurity that often occurs during an international or intercultural negotiation. The ability to make substantive progress on a negotiation can be greatly impaired by a lack of focus or attention. Moreover, one is more likely to make a worse deal under such circumstances. In this negotiation, Spacey often finds him/herself distracted because he/she is either trying so hard to avoid making cultural mistakes or because he/she is trying so hard to recover from cultural mistakes when they do occur. Anyone who has traveled to far and distant lands knows well the disorientation component of culture shock. The Lesson of Cultural Sensitivity The case is written with the full understanding that various aspects of Banatarian culture are likely to seem absurd or comical to Spacey, but such a reaction may, and often does, take place in the real world. (Consider, for example, the wide variety of culinary preferences throughout the world that seem quite unusual or even bizarre to cultures that do not have similar tastes.) That we may find aspects of another culture absurd or comical, however, does not mean that we get to ridicule or laugh at them, especially when trying to conduct a negotiation. Accordingly, participants are expected to be in character and stay in character throughout the negotiation exercise, which means that they should try to exercise some degree of cultural sensitivity.

The Lesson of Cultural Adaptation

Finally, because Spacey inevitably makes cultural mistake after cultural mistake, Spacey has to be a quick study in order to succeed. All along the way, this case exercise repeatedly forces Spacey to figure out when a mistake has been made, figure out what the mistake was, figure out how to overcome the mistake, and learn from the mistake so it is not repeated again. In other words, Spacey's cultural adaptation skills are really put to the test.

Thoughts on Ways to Address the Intercultural Lessons

1. A Socratic approach may be utilized to facilitate the debrief, e.g.:

* CN-319, what was your reaction to Spacey's initial attempt to shake your hand?

* Spacey, what was your reaction to CN-319's cold reception when you attempted to shake CN-319's hand?

2. A somewhat more direct approach may be adopted, e.g.:

* Spacey, at what point did you begin to lose confidence in your knowledge of CN-319's culture?

* CN-319, how did Spacey react when he/she made a cultural mistake?

3. Finally, a very direct and structured approach might be to write on the board the following questions (or have it as a handout in pre-drafted form):

* What lesson, if any, on cultural misinformation did you learn?

* What lesson, if any, on cultural stereotyping did you learn?

* What lesson, if any, on cultural noise did you learn?

* What lesson, if any, on cultural sensitivity did you learn?

* What lesson, if any, on cultural adaptation did you learn?

Then, before beginning the class discussion, have each participant commit to writing his or her responses to each of the questions.

THE GALACTICA SUV--DEAL SHEET

These questions are to be completed by each negotiating pair (CN-319/
Buyer and Spacey/Seller):

-- --
Name of Person Playing Role Name of Person Playing Role
 of CN-319 of Spacey
(Buyer) [please print] (Seller) [please print]

If an agreement was reached on price, it was for ^ --

This portion to be completed by CN-319/Buyer: (without consulting
with Spacey the Seller)

If you had price objectives,
they were: Low Target High
 -- -- --

Did you use any of
the following
negotiation techniques? Reasoning Hard Lying
 (e.g. discussion (e.g.
 of dealer's threats)
 supply)

Hidden agenda items:

Did you learn that Spacey/Seller needed
to sell one more SUV today to meet his/her Yes No
quota and receive a bonus? -- --

Once the top portion is completed confidentially by CN-319, please
fold on the dotted line and present the bottom portion
to Spacey, to be filled out confidentially by Spacey without the
benefit of knowing CN-319's responses.

This portion to be completed by Spacey/Seller: (without consulting
with CN-319 the Buyer)

Spacey, if you had price objectives, Low Target High
they were: -- -- --

Did you use any of the following Reasoning Hard Lying
negotiation techniques? (e.g.
 threats)

Hidden agenda items:

Did you learn that CN-319/Buyer
had to have the SUV today so it would Yes No
be available at CN-319's boss's wedding
the next day? -- --

NEGOTIATION TERMS (FOR INSTRUCTOR'S USE IN DEBRIEF)

BARGAINING ZONE: The bargaining zone is also known as the "settlement zone."

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, Ury, & Patton (1991), Getting to Yes; Thompson (2004), The Mind and Heart of the Negotiator).

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), The Mind and Heart of the Negotiator).

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), The Mind and Heart of the Negotiator).

NEGATIVE BARGAINING ZONE: When there is no positive overlap between what the buyer is willing to pay and the seller is willing to accept, this is known as the negative bargaining zone. If the parties find themselves in a negative bargaining zone, both should exercise their BATNAs.

POSITIVE BARGAINING ZONE: If there is an overlap between what the buyer is willing to pay and what the seller is willing to accept, there is a bargaining surplus, also known as the positive bargaining zone or Zone of Possible Agreement (ZOPA). (Thompson (2004), The Mind and Heart of the Negotiator).

EPILOGUE

This case has been conducted in the classroom time and again with great success. The quantitative component of the case is an excellent way to introduce students to substantive negotiation concepts, such as BATNA, positive and negative bargaining zones, and integrative (win-win) agreements. The intercultural component succeeds in introducing the hard but important lessons of misinformation, cultural stereotyping, cultural noise, and cultural adaptation. What is particularly inspiring, however, is the excitement and enthusiasm consistently demonstrated by those participating in the role-play, both during the negotiation itself and during the debrief.

Another feature of the case that causes it to be embraced by the participants is the common experience component, i.e., so many people can relate to purchasing a vehicle. Given the context of a vehicle purchase, an ethical component also sometimes emerges in that such a context (rightly or wrongly) is perceived by many to be imbued with an aura of deceit and deception. Accordingly, some participants invariably seem to think that lying brings authenticity to their respective roles!

The bottom line is that this case works on many levels. It is simple in design, but intricate in its execution. It is highly educational, but it is also highly entertaining. Most important of all, the case teaches its lessons well and leaves the participants eager to learn more about intercultural and international negotiation.

REFERENCES

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

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

ENDNOTE

(1) This case is inspired by and is a modification and expansion of a case entitled "Muenster Pump Buys a Car," by Dr. David Burt of the University of San Diego, who has graciously authorized and consented to this adaptation and publication.

Craig B. Barkacs, University of San Diego

Linda L. Barkacs, University of San Diego