Deal Negotiations Research Articles

A Study on the Effect of Housing Transaction Characteristics on Negotiation Satisfaction

This study was conducted on housing transaction parties with experience in selling and buying apartments in Gangnam 3-gu in order to verify the relationship between the key characteristic factors and the satisfaction of negotiation in the housing transaction negotiation. Through the multiple regression analysis, empirical analysis was conducted on the relationship of the impact on negotiation satisfaction by structuring important influence variables in the housing transaction extracted through previous studies into personal and situational characteristics. As a result of empirical analysis, it was found that the negotiating goal, information symmetry, and timing have a positive effect on the satisfaction of negotiation in housing transactions. In other words, it was found that negotiators who have more features and acquired information focused on the negotiation objectives and more time to deal with external environment changes have a favorable position in negotiating housing transactions. In addition, it was confirmed that the factors perceiving negotiation satisfaction were different for each occupation group. Among the survey targets, public officials and office workers showed positive results as shown in the empirical analysis results.

Investigation of Guide's Perception and Understanding of Nonverbal behavior employed by Foreign Guesses during transactional Negotiation at Lembar Harbour

The importance of using nonverbal communication (NVC) is as a complement to spoken expressions when especially communicating with people of different background. On one hand, NVC is used to convey meaning in which verbal words can’t convey meaning, and is used to express attitudes and emotions in interpersonal relations. On the other hand, NVC is used to convey intended meaning when the addressor can’t fully understand against the addresse with different socioculture. Since NVC is very important in conversation particularly when communicating with foreigners. Therefore, this study concerns with guide’s understanding and perception on NVC in transactional negotiation. The paper used quailitative and quantitative research trying to see the common forms of NVC expressed by two sides. The sample is all guides and is taken from the field in which conversation takes place. This research used observation to see actual data of on going discourse and used camera recorder to see the common NVC employed by guides and foreign guesses and asking guide’s understanding through questionnaires and perception through interview. The result showed that most of guides about 90% understand the basic forms of NVC such as head nodding and shaking, hand shaking, finger sign and eye contact while other forms, 73% of guides doesn’t understand nonverbal sign used by guesses during conversation, and about 89 % of them said that the involvement of Nonverbal Communication is very important to bridge words and lack of vocabulary. However, because majority of them lack of knowledge on nonverbal signs leads them to ignore such things.

Affirming Europe with trade: deal negotiations and the making of a political identity

Drawing from economic sociology, this article argues that trade liberalization is never devoid of cultural and symbolic content. As such, when pursued by international entities, it can help affirm collective identities. The EU Commission’s recent external trade negotiations with the USA (TTIP) and Canada (CETA) over food quality offer excellent examples. Pitting itself against North American neoliberalism and business-oriented commercialism, the Commission has championed a European understanding of food integrity and social responsibility. In so doing, it has also emphasized its role as the institution protective of European values on the world stage. Internally, the Commission’s pursuit of a digital single market has in parallel revealed a different approach. Here, the Commission has stressed the values of efficiency, the transcending of national borders, and consumer and business freedom. In that context, the Commission has presented itself as the political entity capable of advancing a dynamic and competitive vision of Europe. These differences point to the complexity associated with crafting ‘European’ values. They also point to preexisting domestic regulatory traditions in certain sectors as key factors influencing the Commission. We close by reflecting on the fact that the Commission’s rhetoric has not gone unchallenged externally or internally.

Identifying Conversational Structures and Strategies between Guide and Foreign Guests in Transactional Negotiation of Tour (Transport) Service

This article aimed to find conversational structure and strategies employed by guides in transactional negotiation with foreign guests and find out the best one, which latter becomes standardized conversational structures and strategies in persuading and satisfying customers. This paper examined structures of conversation with regard to Sinclair-Coulthard’s Birmingham model. This study is qualitative in nature, attempting to describe data, represented in the form of words. During data collection, utterances were recorded directly by a set of tape-recorders then transcribed into spoken text. Later, the recorded data were analyzed using Sinclair Coulthard analysis model of within or outside classroom discourse. The data were analyzed in terms of the four discourse units: transaction, exchange, move, and acts. Among these four units, exchange and move were mainly focused. The result showed that the structure of guides’ conversation in doing transactional negotiation is somewhat the same. Starting from so – called starter which consist of question and answer then transaction which employed question and informing and the last is closing. There were 3 scripts epitomized the result. The script 1 and 2 merely focused on price without explaining the itinerary and car services extensively. The script 3 showed the success of transaction, that is how guide employed strategic communication in transactional negotiation.

Business Models and Transactions in C2C Social Commerce: Practices of Selected Social Commerce Practitioners in Thailand

There has been an increase in the popularity of using social media for commercial purposes, and this is commonly known as consumer-to-consumer (C2C) social commerce (s-commerce). Thailand is among one of the world’s largest C2C s-commerce markets; however, its C2C s-commerce has different characteristics from traditional e-commerce. This study investigated the patterns of various C2C s-commerce business models and purchasing processes being used in Thailand, based on data collection from interviews and direct observations. The findings revealed the patterns of the transaction process, including advertising, searching, negotiation and ordering, payment, and delivery. It also been found that there are six business models in C2C s-commerce: S-retailing, S-specific market, S-preorder, S-auction, S-reverse auction, and S-portal. The activities in C2C s-commerce were presented by using the logical process diagram to show differences in user interaction patterns and business arrangements. A solid understanding of business models and purchasing processes will help sellers to improve process effectiveness, as well as helping buyers reduce the risk when making purchases using C2C s-commerce in Thailand.

Cross‐border mergers and acquisitions amid political uncertainty: A bargaining perspective

Research Summary: This article exploits a natural experiment to estimate the causal effect of political uncertainty on bargaining outcomes in cross‐border acquisitions. We argue that political uncertainty alters the relative bargaining power between acquiring versus target firms. The host country's political uncertainty makes the returns on cross‐border acquisitions more unpredictable. Accordingly, foreign acquirers demand compensation for such uncertainty in negotiations, otherwise they will not consider their acquisitions profitable. Thus, when political uncertainty is high in the host country, ceteris paribus, foreign acquirers have greater bargaining power, which leads to more favorable outcomes for acquirers. Using national elections to measure political uncertainty, we find evidence strongly supporting our prediction. Target firms capture a smaller portion of the acquisition gains than do acquiring firms, when political uncertainty is high.Managerial Summary: The uncertainty about the host government policies is a major concern for firms considering cross‐border acquisitions. However, we know little about how such uncertainty influences cross‐border deal negotiations and outcomes. This research investigates the effect of political uncertainty on the bargaining outcomes in cross‐border acquisitions. We argue that high political uncertainty in the host country strengthens the foreign acquirer's bargaining position relative to the acquired firm. The outcome of investment is harder to predict under political uncertainty, and therefore the foreign acquirer will require compensation for political uncertainty such as paying a lower takeover premium and using a contingent payment option. Without such compensation, the foreign acquirer may not find it attractive to make a deal. Our empirical results support our argument.

Procedural Frames in Negotiations: How Offering My Resources Versus Requesting Yours Impacts Perception, Behavior, and Outcomes: Correction to Trötschel et al. (2015).

Reports an error in "Procedural frames in negotiations: How offering my resources versus requesting yours impacts perception, behavior, and outcomes" by Roman Trötschel, David D. Loschelder, Benjamin P. Höhne and Johann M. Majer (Journal of Personality and Social Psychology, 2015[Mar], Vol 108[3], 417-435). In the article "Procedural Frames in Negotiations: How Offering My Resources Versus Requesting Yours Impacts Perception, Behavior, and Outcomes" by Roman Trötschel, David D. Loschelder, Benjamin P. Höhne, and Johann M. Majer (Journal of Personality and Social Psychology, 2015, Vol. 108, No. 3, pp. 417-435. http://dx.doi.org/10.1037/pspi0000009), rounding errors in p values occur in the Results under the Concession rate section of Experiment 4a and in the Outcome profits section of Experiment 5. The second sentence of the Discussion section of Experiment 4a should read as follows: Averaged across roles (i.e., buyers and sellers) parties made lower concessions and achieved higher individual outcomes when offering rather requesting resources. The last sentence of the Concession rates section of Experiment 5 should read as follows: This pattern was reversed when animals from zoo Y were addressed first, although this contrast effect did not reach significance. (The following abstract of the original article appeared in record 2015-09924-002.) Although abundant negotiation research has examined outcome frames, little is known about the procedural framing of negotiation proposals (i.e., offering my vs. requesting your resources). In a series of 8 experiments, we tested the prediction that negotiators would show a stronger concession aversion and attain better individual outcomes when their own resource, rather than the counterpart's, is the accentuated reference resource in a transaction. First, senders of proposals revealed a stronger concession aversion when they offered their own rather than requested the counterpart's resources-both in buyer-seller (Experiment 1a) and in classic transaction negotiations (Experiment 2a). Expectedly, this effect reversed for recipients: When receiving requests rather than offers, recipients experienced a stronger concession aversion in buyer-seller (Experiment 1b) and transaction negotiations (Experiment 2b). Experiments 3-5 investigated procedural frames in the interactive process of negotiations-with elementary schoolchildren (Experiment 3), in a buyer-seller context (Experiments 4a and 4b), and in a computer-mediated transaction negotiation void of buyer and seller roles (Experiment 5). In summary, 8 experiments showed that negotiators are more concession averse and claim more individual value when negotiation proposals are framed to highlight their own rather than the counterpart's resources. (PsycINFO Database Record

La clause d’exception du tabac au sein de l’Accord de partenariat transpacifique : une victoire pour la santé publique ?

Notre recherche se divise en deux parties. Le premier axe est la compréhension des enjeux qui ont mené à l’adoption de l’exception pour le tabac au sein de l’Accord de partenariat transpacifique (PTP). Le second vise à déterminer si cette disposition marque une préséance de la santé publique sur les principes du commerce international et du droit des investissements. Les actions menées par les militants antitabac, lors des négociations du PTP et l’adoption de la clause 29.5 confirment que la santé publique gagne en importance. Les plaintes déposées par Philip Morris International auprès des tribunaux arbitraux internationaux pour contester des réglementations nationales antitabac ont fortement contribué à l’insertion de cet article dans le traité. Les arrêts démontrent la complexité des problèmes que pose le tabac. Néanmoins, la portée limitée de cette disposition prouve que les enjeux économiques qu’implique le commerce du tabac jouent un rôle prépondérant. Le carve-out du tabac ne traduit pas une volonté explicite de rendre la santé prioritaire, mais plutôt un compromis. Cependant, le caractère novateur de la mesure est indéniable.

‘The miskeet tree doesn't belong here': shifting land values and the politics of belonging in Um Doum, central Sudan

The new-yet-old phenomenon of ‘land grabbing’ is often characterized in media and NGO reports as an unstoppable tidal wave hitting the African continent. Yet, as Anna Tsing reminds us, global power rarely operates without friction (2005). From the negotiation of deals that give investors access to land, to its transformation for use in large-scale agribusiness or mining operations, the process of ‘grabbing land’ is rarely unilinear and always historically situated. While some land investments materialize, others run into crisis. In April of 2013, a deal was struck between government elites and a Saudi businessman over customary land in Um Doum – a peri-urban community in central Sudan – that had been utilized by local families for generations. Community members immediately mobilized against the deal using civil disobedience tactics and media advocacy, forcing government officials to reverse the land deal and to initiate negotiations aimed at locally redistributing the land through registration and titling. Despite the apparent success of this resistance to a large-scale land deal, this article argues that the subsequent programme of land titling nevertheless represented the extension of state control over land tenure and generated profound change in gendered and ethnic social relations and land values. As such, the Um Doum negotiations served to restructure, rather than reverse, the process of land dispossession. It concludes that even when large-scale land deals are renegotiated in favour of those dispossessed, it is important to consider the ways in which ‘negotiability’ in land rights (Peters, 2004) can benefit elites and exacerbate existing social divisions by intensifying forms of inequality in land access.

Mathematical Modeling and Experimental Evaluation of Optimal Agendas and Procedures for N-Issue Negotiation

This paper addresses the multi-issue negotiation between two self-interested agents in context of online auction, an auction where items are sold over internet. The outcome of such negotiations depends on the agenda and the negotiation procedure. In this paper we study the impact of varying agenda and procedure on the negotiation outcome in general and for an auction system in particular. This is done under incomplete information settings with the equilibrium strategies defined for issue-by-issue and package deal negotiation procedures. On the basis of these strategies, the optimal agenda-procedure combination for each agent is determined. An experimental evaluation of the same has also been done with multiple agents for an auction system, with satisfactory results.

M&A deal initiation and managerial motivation

This paper contributes to our understanding of managers' motivations for initiating the sale of their company. Using a sample of 1098 publicly-listed US target firms with completed deals, we show that deals initiated by the target firm rather than by outside bidders have higher CEO ownership. Furthermore, CEOs are motivated to offer their firms for sale also by higher golden parachutes, stock and stock option grants prior to takeovers. Our results suggest that motivated CEOs participate actively in deal negotiations, rather than being bribed not to resist the deal. In target-initiated deal firms, CEO ownership and equity grants are also positively correlated with takeover premiums.

Surya Tutoring: Evaluating a Growth Equity Deal in India

The case focuses on two major challenges in deal making in emerging market economies---deal sourcing and negotiation---by focusing on a real (but disguised) Indian private equity deal. In 2010 Surya Tutoring was a fast-growing tutoring academy for high school students aspiring to gain admission to the prestigious Indian Institute of Technology (IIT). Surya’s CEO, R. K. Sharma, wanted to expand its reach beyond Kota (a city of 1 million people in the northern state of Rajasthan), which had become the center of the IIT prep school industry and home to tens of thousands of students studying for the rigorous IIT entrance exam. Sharma knew there was vast untapped potential in the teeming Indian metropolises of Mumbai, Chennai, Delhi, and Bangalore, as well as in foreign markets such as Dubai and Australia. Sharma had received term sheets from two private equity firms willing to finance Surya’s expansion. By the end of the month he needed to decide which to accept: the offer from big bulge bracket fund Blackgem, or the one from ZenCap, a small Indian firm based in Mumbai with which he had become intimately familiar during the past year.After analyzing and discussing the case, students should be able to: Identify the differences between the United States and an emerging market such as India when it comes to deal sourcing, negotiation, and financial contracting Value a growth equity transaction in an emerging economy, including financial, contractual, and qualitative (social networks, local knowledge, trust) aspects of the deal

The relevance of political affinity for the initial acquisition premium in cross‐border acquisitions

Research summary: In the context of economic nationalism, we investigate the relevance of political affinity between countries to the initial acquisition premium offered in cross‐border acquisitions. Political affinity is defined as the similarity of national interests in global affairs. We argue that political affinity affects how foreign acquirers anticipate their bargaining position in their negotiations with domestic target firms. With decreasing political affinity, the host government becomes increasingly likely to intervene against foreign firms in an acquisition deal. Consequently, foreign acquirers need to provide a more lucrative initial offer to dissuade target firms from leveraging government intervention to oppose the acquisition. Our prediction is supported by strong evidence that political affinity, as revealed by UN general assembly voting patterns, leads to lower initial acquisition premiums.Managerial summary: Media reports suggest that politics plays an important role in international business transactions. However, we still know very little about how bilateral political relations affect corporate decision‐making. In this article, we analyze the influence of the quality of bilateral political relations on the bidding behavior of foreign acquirers in cross‐border acquisitions. We argue that the host government is more likely to intervene against the foreign acquirer during deal negotiations if the quality of bilateral political relations is poor. A lower political affinity between countries therefore decreases the bargaining power of the acquirer and pushes up the initial bid premium the acquirer has to offer to the local target. Our empirical results confirm our argument. Copyright © 2015 John Wiley & Sons, Ltd.

The information role of advisors in mergers and acquisitions: Evidence from acquirers hiring targets’ ex-advisors

We examine the information role of financial advisors by focusing on mergers and acquisitions in which acquiring firms hire target firms’ ex-advisors. We document that by employing targets’ ex-advisors, acquirers pay lower takeover premiums and secure a larger proportion of merger synergies. The corresponding targets exhibit lower announcement returns and are less likely to be propositioned by competing bidders. These results indicate that acquirers take advantage of value-relevant information about targets through targets’ ex-advisors, and achieve bargaining advantages in deal negotiations. In contrast, we document no discernible value effects when targets hire acquirers’ ex-advisors, suggesting that the information role of acquirers’ ex-advisors hired by targets is weaker than that of targets’ ex-advisors hired by acquirers.

Why do patents facilitate trade in technology? Testing the disclosure and appropriation effects

Evidence suggests that patents facilitate technology transactions but the reasons for the effect are unclear. Patents may assist trade in technology by either: (i) protecting buyers against the expropriation of the idea (the ‘appropriation effect’); or (ii) increasing information sharing during the negotiation phase through publication of technical details contained in the patent document (the ‘disclosure effect’). We estimate the strength of both effects using exact matching analysis on a novel dataset of 860 technology transaction negotiations. We find evidence for the appropriation but not the disclosure effect. Technology transaction negotiations involving a granted patent instead of a pending patent (our test for the appropriation effect) are significantly more likely to be successfully completed. The appropriation effect is stronger in technology fields where patent protection is known to be more effective such as biotech, chemicals, drugs and medical.

M&A Deal Initiation and Managerial Motivation

On a sample of 1098 US publicly listed target firms, we show that target initiated deals face potential financial distress and have higher CEO ownership. We further show that CEOs are motivated to offer their firm for sale due to their higher ownership, golden parachutes and stock and stock option grants before the takeover. Moreover, motivated CEOs seem to actively participate in deal negotiations rather than be just bribed not to resit the deal and their ownership and equity grants are positively correlated with premium. This suggests a positive role for deal initiation for target shareholders.

Learn From Breaking Up: The Effect of Acquisition Experience on Termination Fee Provisions

Research on acquisition experience has long debated whether and when this experience can improve acquisition performance. We contribute to this line of research by investigating learning that occurs in the strategic actions that acquirers take within the deal negotiation period. As an important tool to prevent breaking up with the target, we evaluated how acquirers use termination fee provisions in response to lessons learned from past success and failure as well as variations in the value of the target. Coding acquirer termination fee and target termination fee provisions from 3,974 agreements of U.S. public acquisitions from 1993 to 2014, we found that acquirers’ experience decreases the propensity to include both provisions in the agreement but this effect is driven by experiences with deals that are complete; a high proportion of experience with deals that are announced by not completed then increases the likelihood of using termination provisions. Moreover, when the target is more valuable, the negat...

Law Firm Selection and the Value of Transactional Lawyering

Following the contraction in demand for law firms’ services during the Great Recession, “Big Law” was widely diagnosed as suffering from several maladies that would spell its ultimate demise, including excessive fees, excessive size, increased competition from in-house counsel, the commoditization of legal work, and the decline in demand for “relationship firms.” While each of these market pressures is only too real for certain segments of the law-firm population, their threat to the most elite U.S. law firms has been largely misunderstood. Even as many firms reduce their fees and contract in size, we should expect certain firms to continue to charge more and grow bigger. The current prescriptions for fixing Big Law fail to recognize that the top-tier firms within the group serve a unique market function. Focusing on a particular type of legal work – major corporate transactions – this Article proposes a novel theory of the value created by elite law firms: their private information about “market” deal terms, acquired through repeated exposure to the same types of transactions, provides clients with a significant bargaining advantage in deal negotiations. By aggregating expertise in the ever-changing and ever-increasing set of deal terms for certain transactions, law firms help their clients price such terms more accurately and thereby maximize their surplus from the deal. This pricing function – traditionally thought to be limited to investment banks – is one that cannot be replicated or subsumed by in-house counsel, other service providers, or commoditized contracts.

Bargaining power of targets: Takeover defenses and top-tier target advisors

This paper examines whether takeover defenses (i.e., poison pills and classified boards) can enhance the bargaining position of the target firm, especially when the target advisor is a top-tier investment bank. I find that classified boards and poison pills are positively linked to target's share of merger gains, target announcement returns, and premiums when the target employs a top-tier advisor and the acquisition is initiated by the acquirer. These results support the argument that top-tier target advisors might be more effective in utilizing takeover defenses in deal negotiations to enhance the bargaining position of their client firms and help them capture higher returns and share of merger gains.

Strategic Buyers vs. Private Equity Buyers in an Investment Process

This paper compares the position of strategic buyers and private equity buyers in a typical investment process, from fundraising/sourcing of equity capital, through deal sourcing, due diligence, valuation and deal financing, deal negotiation and transaction execution, to value creation post-closing and exit/long-term plans. The paper evaluates advantages and disadvantages of the two different types of buyers within each of the phases of an investment process, and suggests that the financial discipline, flexibility, focus, and incentives structure of private equity firms often provide them with an edge over strategic buyers. Rather than being a rigorous academic study, the paper is intended to help M&A practitioners, whether on the strategic buyer or private equity side, with understanding their “opponent”.