Teaching Notes

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Teaching Notes
By Stephen B. Goldberg

Texoil is a two-party, quantified transactional negotiation with integrative potential. The owners of a service station would like to sell their station, and a large oil and gas company would like to buy it. The stations owners are tired of the responsibilities of ownership and want to take a two year sailing trip around the world, while they are still young enough to enjoy such a trip. The oil and gas company is in the midst of a strategic expansion, buying independent service stations, and turning them into mini service marts.

are not written up in their role materials; however, they should use the information they have creatively.

The most striking learning point of the exercise is the
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4. Ask if revealing didn’t make them feel vulnerable. The point of this line of questioning is to help students discover the kind of information that provides a basis for creating value, (i.e., not information about bottom line, but about interests and priorities).
5. The question about feeling vulnerable raises the issue of trust. Ask whether trust was established, and how. Generally, trust results from the process of reciprocal information sharing, and proposals that are responsive to information shared.

To make the job offer, either the Texoil representative must reveal information about Texoil’s long term strategy, and/or the station owner must reveal plans for a two year sabbatical.
There are a number of other things that can be added to make the bargaining zone overlap, including health care, oil and gas for the trip, a line of credit for boat repairs, and putting TEXOIL on the hull or sails.
All of these creative ideas, that create value because they are of low cost to one party and high value to the other party, require information to be discovered.

6. Which agreements are better than others? We usually do not point out particular agreements, but speak generally. Better agreements in terms of value creation are ones that have many of the features listed above. Better agreements in terms of value claiming are ones where Texoil pays less than $500,000 cash and it gives the job and other items,

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