COM 539 Week 5 Negotiation and Persuasion Example

Negotiating the Robot Contract: Interests, Anchors and Trust in a Hospital Equipment Deal

[Student Name]

University of Phoenix

COM/539: Communications: Selling and Customer Engagement

Week 5 Assignment

[Instructor Name]

[Date]

Lakeview Floorcare Systems, its sales team, customers and figures are composites written for a model paper.

Week 4 described the robotic cleaner pilot at Northshore Health's newest hospital, sold by Lakeview Floorcare Systems, the course's fictional equipment company. The pilot succeeded. Cleaning audits by the infection prevention lead matched or exceeded manual results in 94 percent of tests, corridor labor hours fell 40 percent and no navigation incidents occurred. Northshore now wants to buy 12 robots for the new hospital and two others. The procurement manager has asked for a proposal and signaled three demands: a price well below the $78,000 list, a five-year warranty instead of two and the right to return the robots if performance declines. This paper plans the negotiation.

Interests Behind Positions

Fisher et al. (2011) urged negotiators to ask what each side truly needs behind its stated demands, to create options that serve both sides and to rely on fair standards both can accept. Northshore's positions, lower price, longer warranty and an exit right, reflect underlying interests: staying within a capital budget of about $800,000 for the year, avoiding risk from unfamiliar technology and showing the board a defensible decision. Lakeview's interests include margin, a reference account for robotic sales in healthcare, predictable service revenue and a long relationship with a seven-hospital system.

Alternatives and the Zone of Agreement

Northshore's best alternative is the competitor's robot, quoted informally at about $70,000, but without a pilot at Northshore and with service from a dealer three hours away, or continuing with staff and conventional machines. Lakeview's best alternative is to sell the robots elsewhere; demand is growing, but a health system reference is valuable. Lakeview's floor price, below which margin is unacceptable, is about $66,000 per unit. The zone of possible agreement likely lies between $66,000 and $75,000, with warranty and service terms adding value on both sides.

The Opening Offer

Galinsky and Mussweiler (2001) found in experiments that first offers acted as anchors, predicting final settlement prices, and that the party making the first offer often achieved better outcomes, while negotiators who focused on the other side's alternatives or their own ideal targets could weaken the anchor's effect. Lakeview should therefore make the first offer, ambitious but justified with pilot results: $76,000 per robot for 12 units, a three-year warranty and a service plan at $4,800 per robot per year, with a total value calculation showing payback in under three years from labor savings.

Trust and Information Sharing

Kong et al. (2014) conducted a meta-analysis of trust in negotiation and found that trust was positively related to integrative behaviors, such as information sharing, and to joint outcomes, with trust especially important when negotiators had repeated interactions. Lakeview's relationship with Northshore has been rebuilt over two months; sharing complete pilot data, including two minor faults, will strengthen trust rather than weaken Lakeview's position.

The two minor faults in the pilot data are worth disclosing; hiding them would cost more trust than they could cost in price.

Concession Plan

Concessions will be traded, not given:

Price: move from $76,000 to $72,000 in exchange for a commitment to 12 units now and an option on 8 more at the same price within 18 months.

Warranty: extend from three to five years in exchange for a five-year service plan, which Lakeview values for its recurring revenue.

Exit right: instead of a return right, offer a performance guarantee: if cleaning audit results fall below agreed levels for two consecutive quarters, Lakeview will repair or replace units at no cost.

Payment: offer leasing through a finance partner so Northshore stays within its capital budget.

Walk-away point: below $68,000 with a five-year warranty and no service plan.

Persuasion

Evidence will carry the persuasion: Northshore's own audit results, labor savings in hours and dollars and statements from Miguel's environmental services team about how the robots changed their work. Dr. Osei, the infection prevention lead, has offered to present the audit results to the committee herself, which carries more weight than any Lakeview slide.

Preparing for Objections

Lisa will likely raise three objections. On price: the competitor is cheaper. The answer is total cost: the competitor's robot needs a service visit from three hours away, and Northshore's pilot data show Lakeview's uptime at 98 percent. On risk: robots are new. The answer is the performance guarantee and the pilot results. On budget: the capital is not available. The answer is leasing, which turns the purchase into an operating expense. Preparing responses in advance lets the representative listen to each objection fully before answering, as Week 4 recommended.

Who Negotiates

Lakeview's side will include the representative, who owns the relationship, and the sales director, who has authority on price and terms. Agreeing beforehand who can concede what prevents the representative from making promises the company cannot keep and signals to Northshore that Lakeview is serious. Northshore's procurement manager will lead for the customer, but the plan assumes the facilities director and infection prevention lead will influence her, so materials will be prepared for all three.

Timing the Proposal

Northshore's capital committee meets in six weeks. Submitting the proposal two weeks before that meeting gives Lisa time to prepare her recommendation and the infection prevention lead time to prepare her audit summary. Submitting too early invites the competitor to respond; too late leaves the committee without time to read it.

Ethics

Persuasion must stay honest. The representative should not claim a competitor's robot fails audits without evidence, invent deadlines or overstate savings. Disclosing the pilot's minor faults is both ethical and strategic.

If Northshore Will Not Move

Planning includes the possibility of failure. If Lisa insists on $66,000 with a five-year warranty, no service plan and a return right, the deal falls below Lakeview's walk-away point. The representative should then propose a smaller first order, four units at the new hospital, at terms within Lakeview's limits, keeping the door open for the other sites once the robots prove themselves over a year. Walking away from the larger deal is better than signing terms that would lose money and set a precedent with the rest of Northshore's facilities.

What Success Looks Like

A good outcome is not only the price. Success means a signed contract for 12 units at or above $70,000, a five-year service plan, an option on additional units and a relationship in which Northshore's procurement manager sees Lakeview as fair. A deal at a higher price that leaves her feeling squeezed could cost the option and the reference. Measuring the outcome against all these goals keeps the team from fixating on a single number.

After Signing

The contract begins the next phase of the relationship. Quarterly reviews, the performance guarantee and the option on additional units keep both sides focused on results.

Conclusion

Planning the Northshore negotiation around interests, alternatives, a justified first offer, trust and traded concessions gives Lakeview a path to a fair price, recurring service revenue and a lasting reference account, while giving Northshore budget fit and protection against performance risk.

References

Fisher, R., Ury, W., & Patton, B. (2011). Getting to yes: Negotiating agreement without giving in (3rd ed.). Penguin Books.

Galinsky, A. D., & Mussweiler, T. (2001). First offers as anchors: The role of perspective-taking and negotiator focus. Journal of Personality and Social Psychology, 81(4), 657-669. https://doi.org/10.1037/0022-3514.81.4.657

Kong, D. T., Dirks, K. T., & Ferrin, D. L. (2014). Interpersonal trust within negotiations: Meta-analytic evidence, critical contingencies, and directions for future research. Academy of Management Journal, 57(5), 1235-1255. https://doi.org/10.5465/amj.2012.0461