Monthly Archives: September 2011

Dell’s decision to launch tablets via a joint venture with Baidu in China rather than in the US or Europe is only reported in passing in this article (Reuters.com) but it is fascinating when examined from the perspective of bargaining power. First of all it suggests a further subtle shift in the tipping of bargaining power from West to East. It would seem China can now potentially deliver greater scale than Europe or the US for a technology company like Dell. This is an important source of bargaining power. China can also deliver greater “network” bargaining power – literally; the giant Baidu search engine can deliver 294 million users – that’s 70% of China’s online users. China can also deliver “authority” power – trading success here counts for an increasing amount in the rest of the world.

The move is also interesting for what it says about Dell’s negotiating power. Some analysts are very cynical about the development and Dell’s weak market position – one is quoted as suggesting that it is just “grasping at straws to get any kind of publicity”. Yet companies can create “authority” in many different ways. One way is for a company to be prepared to recreate itself. This creates an air of unpredictability which wrong-foots opponents. In addition, carrying out a strategic course of action boldly and decisively rather than timidly helps develop your authority.

Dell has a reputation for steady reliability rather than flair, but launching products exclusively in China is an unusual and perhaps unexpected step, and tying up with the leading Chinese search engine is an innovative form of partnership. This kind of initiative gets noticed by commentators (as this article demonstrates). And whether or not this […]

The announcement of the Deezer UK launch and its tie up with Orange shows how important it is to be clear when you make your “bid” as a negotiator. If you don’t then the impact of your bid will be lost and the other side will be much less likely to accept it. In this case the “negotiation” with users over whether to accept the Deezer offering may already have been somewhat lost

There was definitely some initial confusion over what the Deezer offer is in the UK. The Telegraph reported the UK launch of Deezer by simply stating the standard Deezer offering:

– £4.99/month to listen to unlimited streaming via computer only
– £9.99/month to listen to unlimited streaming via computer or/ mobile device and an offline mode (presumably recently streamed songs are stored somehow in the device/pc)

This was followed within days by Mobile Today reporting the Deezer/Orange offering which provides mobile streaming only to all of their pay-monthly customers (but not PC streaming from what I can gather) to bypass the £9.99/month tariff that would otherwise have been paid for this service.

To cap it all I also read that Deezer are still finalising their licensing agreements with the UK labels and publishers, so it is not clear if this offering is ‘live’ yet (there is nothing on Orange’s website about it despite the announcement that this would be in place from last week).

When you are negotiating, offering confusion and complexity are not great ways of persuading other people (in this case the public) to accept your bid. So, it will be interesting to see what impact (if any) this service has on Orange’s sign-up rate in the UK.

The visit last week by David Cameron to Russia signals a desire to re-set the climate in negotiations between Russia and the UK.

The climate has been hostile ever since the murder of Alexander Litvenenko in London by a suspected Russian agent, Andre Lugovoi, in 2006. In fact even before that, back in 2003, things took a bad turn when Britain gave sanctuary to oligarch Boris Berezovsky, an arch Putin opponent.

The murder of Litvinov and how to deal with it has created a relationship conflict fuelled by strong emotions on both side. As has been the case here, these kinds of conflicts are often characterised by stereotyping on both sides and negative behaviour with mutual accusations and recriminations. Overlaying this “relationship” conflict is a ‘values” conflict. This kind of conflict arises where parties have different ideas for evaluating ideas or behaviour, or different ideologies or culture. The murder of Litvonov has created exactly this kind of values conflict. Whilst eliminating your opponents is certainly illegal in Russia, there is a long history of politically inspired violence which probably makes the UK Government’s horrified and indignant reaction to Litvonov’s death seem rather over the top To Mr. Putin and his regime. Especially given that they will feel that Britain taking in Boris Berezovsky was a hostile act.

Against this backdrop the visit by Cameron signifies a desire to re-set the climate. Climate is very important in negotiations – it’s one of the first stages, and it influences everybody’s state of mind and behaviour. If the climate is wrong the negotiation cannot be successful. It’s impossible to go from a “hostile” climate, which the UK and Russia have set, straight to a “warm” and open climate. However a […]

The hostile state of mind at the TUC conference last week, and the ominous planning of strikes, does not bode well for Industrial relations in the UK over the coming months.

The problem here seems to have been that all the normal stages of a negotiation have been skipped, as a result of the Government’s Pensions Review, and the desired outcome has been declared by the Government without there really being a negotiation.

No doubt the urgent need to control public sector spending has been the driving force behind the Government’s thinking. As they look at the turmoil in EuroZone countries like Greece and Italy, and even the volatile US sovereign debt position, they must feel that the only sensible course of action is to continue to squeeze the public sector’s reliance on the taxpayer so as to demonstrate to Financial markets that the UK has its government spending under control. This makes sense logically – the UK is like any other business or family; if you owe too much money you either have to increase your revenues or cut your costs. Against this backdrop, a requirement for public sector workers to contribute more to their own pension plans as the population ages has some logic.

However, whilst the decision to curb the tax payer’s potential exposure to public sector pensions may make logical sense, it is clearly a decision in in which Union members have a stake and so they will have expected a negotiated solution. When you seek to impose a pre-determined solution on a party that is expecting to negotiate about it then you have to expect that a hostile climate is going to develop. This then results in the party that feels unfairly […]

This may seem like a simple question to answer, but it is often the case that people think they are cutting a deal, when in fact they are getting nowhere.

In order for a ‘negotiation’ to happen, a set of six core ingredients need to be in place:

1. There are two or more parties
2. Everyone is at least prepared to reach an agreement
3. There are both interests in common and conflicting interests
4. Those involved have the freedom to meet each other’s needs
5. Everyone is willing to be explicit about their wants and needs (if they are not then there is no basis for negotiation)
6. People are prepared to compromise to some extent, so that everybody can feel they at least got something in the end.

So before starting a negotiation, ask yourself “are all of these ingredients present?” If they are not, then that might explain why it feels like a bit of a struggle, and you should work at adding the elements that are missing before continuing.

Many public ‘negotiations’ are in reality nothing of the sort, as one or more of these ingredients is missing. Where you have discussions with a protracted impasse, that is often the case – e.g. the Israeli-Palestinian negotiation.

Watch out for my follow up article next week entitled “What Makes an Effective Negotiator?”.