Running short on oil!

Hello!

On the previous lesson we had the assessed negotiations about the oil price. As a government representation I met my friend Onasti in terms of negotiating about buying oil from him. I must say the negotiation was intense. It felt very realistic and arguments were presented for and against in order to get the deal we both were after. 

I think in our case the negotiation went pretty well. The environment was friendly and the both parties listened to each other. I think this is an important part of negotiation. It is important to know what the other person wants and ask further questions to gain knowledge that could potentially help to solve the problem. We had very rash disagreement about the price of the oil and the airport tax reductions. We started from 140 $ per barrel and ended up at 62$ per barrel (I was aiming for 50-60$) so you can see fierce negotiation took place. However, there were major tax reduction requirements (began from 40%) that were not within my authority and also the number of barrels was lower (5 million) than what was asked first. However it would have been enough to fullfill the needs of the industry. 

Me and Onasti did not get a deal in the end due to the fact that we were short on time. However, I regard the negotiation a success because we were both in good terms even after the negotiation and we both were willing to keep on negotiations on the next possible time when there would be more time. We both had to be flexible and find out what the other person valued the most. For me I found out that Onasti appreciated most the airport tax reductions and was ready to be flexible on the price and amount of oil. He did not have all the oil instantly but we agreed to have it regularly delivered so that he would have time to get more of it after first sending the government a bit of oil. At the end of the negotiation we agreed to talk to our colleagues and discuss about the deal at table. After this we would have proceeded our negotiations. I was to ask my supervisor for the tax reduction possibilities in case the price and amount of oil could have been adjusted to meet our needs in a better way. I believe that in the next meeting we could have been able to strike a deal.

I think we both succeeded well in argumentation and listening to the other person. We also succeeded in aiming for a win win situation and discussed about which aspects of the deal were important to both of us and on which we could have more flexibility. What I personally think I could have improved was the use of strong-arming by using the Airport tax increase. However, as we ran out of time I had no time to get to it fully. I found this aspect really challenging to implement, because it can easily be understood as threatening and that can lead to the worsening of the negotiation spirit. I think it requires plenty of skill and practice to be able to threathen the other person without actually threatening him. (confusing isn’t it hahah) It is important that everybody cooperate and compromising that can be unbeneficial for the both parties. This is especially the case when both of the parties are to do business in the future too. Thus negotiating in a good spirit is important. 

I think this negotiation was an educating experience which provided insight into the possible challenges in negotiations. It can be challenging to arrive to a deal when the opinions and goals of the both parties differ by a great deal. However, effective argumentation and cooperation with the other party (not to forget persuasive strategies) helped a lot with forming a more uniform idea about the deal. So remember to be collaborative and seek understanding while making your own point loud and clear!

That’s all for now. Let’s get back to negotiation next week ;)