Reading passageA win-win negotiation is concluded when both parties gain something of value in exchange for making concessions. Although the balance of power may change during the negotiation process, negotiators on both sides must remain open to options

Reading passage

A win-win negotiation is concluded when both parties gain something of value in exchange for making concessions. Although the balance of power may change during the negotiation process, negotiators on both sides must remain open to options that will ultimately allow for a fair exchange. To achieve a resolution that benefits both parties, everyone involved must be willing to listen carefully to each other's concerns. To arrive at a conclusion that is good for everyone, negotiators must reveal what they value and what they do not value. Good negotiators look for something that their side does not value but to which the other side assigns a high value. By offering it, they lose nothing, but the other side gains something, thereby feeling more disposed to concede something that the other side perceives as valuable. In addition to listening for ways to help the other side, everyone has to be aware of the limitations that both sides may bring to the table. There are some options that cannot be explored because they are not possible for one of the parties. For example, a price that does not allow a profit margin for the company that manufactures it is not a point of negotiation, unless the other side can offer a way to increase profits or productivity. If that isn't possible, then perhaps a service that saves the buyer money might be a way to balance the firm pricing structure of the goods.

A win-win negotiation allows both parties to feel that they made a good deal, but another positive outcome is the way that the people involved feel about each other. In traditional bargaining, people on opposite sides of a negotiation tend to view each other as adversaries, a relationship that is often difficult to change after the negotiation as collegues who want to support each other's success. When the deal has been made and the collaboration begins, the people involved are already committed to working together for their mutual benefit.

Professor:

Let me tell you about a case study that is often used as an example of how a win-win situation can be negotiated by both parties. Tony was a computer software designer who had come up with a great idea for a computer game, but his problem was that he couldn't afford to quit his job while he worked on the game because he had to make a living for his family. He thought it would probably take him about a year to actually complete the programming for the game if he worked in his spare time. Okey. Well, he put together a proposal, and took it to a multinational company that had launched several successful computer games. But the problem was that the company made him a very low offer - just a thousand dollars a month for twelve months. And although that would have paid his bills during the time that he would have been working on the program, he knew that the game had a huge potential for return on the company's investment. So he felt like he would be taking all the risk without having the opportunuty to share in the reward. But when the company refused to give him any additional upfront money, then, instead of getting angry, Tony went back with a counteroffer. He agreed to accept the $12,000 as an advance on the profits that he expected the game to generate.

And he suggested that they share the future revenues in a ratio of 40:60 - 40 percent for Tony and 60 percent for the company. The company was interested, but explained to Tony that they would be investing over a million dollars in order to produce and market the game and would need a larger share in order to proceed. So they agreed on a 30:70 split. And, as it happened, the game was a big success, the company made a huge profit and Tony was able to quit his regular job and start his own game design company. So - everybody won. They were both able to minimize their risk and increase their profits.

Question: Summarize the main points made in the reading passage, and then explain how the case study from the lecture supports the reading.