MGT461 Business Negotiation - Agent Roles in 'Starlet' and Property

This assignment presents a comprehensive negotiation analysis centered around two distinct scenarios: the 'Virtual Victorian' property sale and the 'Starlet' actress negotiation. In the property sale, the analysis delves into target points, resistance points, and BATNA (Best Alternative to a Negotiated Agreement) for the buyer, scrutinizing the seller's listing price and identifying negotiation factors. The 'Starlet' case explores the role of agents in talent negotiations, highlighting potential conflicts of interest and proposing alternative compensation structures to benefit both the artist and the studio. It further examines various fixed salary policies, evaluating their impact on Talia Montgomery, her agents, and the producers, ultimately recommending a balanced approach that aligns the interests of all parties involved. The study emphasizes the importance of transparency and fair representation in negotiations, especially when agents are involved, to ensure successful outcomes for all stakeholders. Desklib provides a platform to access similar solved assignments and past papers for students.

Running head: NEGOTIATION ANALYSIS
Negotiation Analysis
Name of the Student
Name of the University
Author Note

1NEGOTIATION ANALYSIS
Answer 2:
Target
Point
Opening Offer Resistance
Point
BATNA Interest Reasoning
Buyer: $2,42,000 $2,35,000 $2,60,000 Purchase of
other property
for $2,35,000
and further
$25,000 for
repairs and
refurnishing
basement.
Speedy negotiation
within 2 weeks
Sharing of half of the
closing cost
Pay in total less than
2,60,000
Target point – as this is
the cost of the other
property
Opening offer – the
bottom line of the
budget, to provide a
starting point for
negotiation
Resistance Point – the
point beyond which the

2NEGOTIATION ANALYSIS
buyer cannot negotiate
Your Guess of Other Party:
Issues
$2,70,000
or more
$2,70,000 Lower than
$2,70,000
To keep the
house and
delist the
property.
Sell to another
for the listing
price or more
The only data available
is the listing price and
all assumptions made
revolve around the
same.
No estimation available
for other similar
properties.

3NEGOTIATION ANALYSIS
Answer 3:
The property listed in Sunnyvale being a mid-sized Victorian house with a large yard and
finished basement is listed at $2,70,000. The nature of the property and amenities is such that
the realtors have no measure for comparing its price. In order to compare two properties a
few factors need to be considered such as size of property, its location, the available
amenities, price, condition of structure and need for repairs. On a few of these parameters the
buyer can compare the other property that they are considering. Its price and property size are
favourable as opposed to the 1490 Maple Drive Sunnyvale Property.
Considering these factors, the sellers Listing Price can be said to be arbitrary as a bigger
property is available for $28,000 less and there have been no sales in that area to correctly
determine the cost of this property. This point of uncertainty is a negotiation factor available
to the buyer. Additionally, the listing price does not mention the distribution of closing costs.
If the seller can be convinced to share the same, as there is no clarity on how it is to be
distributed the price can be negotiated at $,2,60,000
Answer 4:
The seller can claim that the cost of the property is attributed to its location in an upscale
family-oriented neighbourhood. It is an ideal location and property for raising a family with a
big yard and good elementary school near by. The area also provides for supermarkets and
other amenities within close reach. The property has also been well maintained in order to
ensure that the buyers do not have to spend any time and money after their purchase.
As a response to the justification of the price, I would highlight how the house though located
in a good neighbourhood would be small to raise a family. Being a medium sized house with
only three rooms and two washing facilities would be inconvenient to raise a big family in,

4NEGOTIATION ANALYSIS
specially with guests and family making frequent visits. The house being a period property
would require additional costs for its upkeep and maintenance, the same has been done
successfully by the current owners but puts an added burden on the buyers and therefore
makes the property undesirable for a section of society.
Answer 5:
Similarity between the cases.
In both the instances the agents play an important role in all transactions. The parties are
mostly prevented from having direct interactions and all interactions are coloured by the
interest of the agents. This contributes towards the scope of increased misunderstanding,
where the parties can never truly discover the real intention of the others. Even if the original
parties like the buyer and seller in the Virtual Victorian case have the same interest, for
example the seller might prefer a speedy transaction at a lower cost as opposed to getting
$2,70,000 at a later date. A reduced selling price however effects the agent’s commission
who might be unwilling to let the seller lower their price for their personal gain.
Similarly, in Starlet the agent’s interest lies in Talia receiving a high fixed salary as their
commission is a percentage of the same. However, Trafalgar Studios might enjoy an option
where Talia bears the risk and receives a large portion of the merchandise sales instead of a
large salary. This would ensure that the Studio bears minimum risk, and Talia is given more
credit for her efforts it they bear fruitful results. This risk can be divided by balancing a
suitable bonus and percentage of merchandise sale that suits both Talia and Trafalgar Studios.
What interferes with this strategy is the commission that the agents receive, because of their
personal interest they might push for a higher fixed salary.

5NEGOTIATION ANALYSIS
In both the situations priority is to ensure that both the parties along with their agents are
satisfied, due to the lack of transparency that is introduced with the introduction of the agents
the interest of the parties may get diluted and not be adequately represented. Thus, for a deal
to be successful it must satisfy the parties and their agents.
Answer 6:
Policy I
(given)
Proposal
II (given)
Proposal
III
(given)
Proposal
IV
(given)
Policy
V
Policy
VI
Policy
VII
Fixed Salary
(in millions)
5.8 4.96 5.42 3.21 4.5 3 6
% of
merchandise
sale
10% 5% 15% 15% 10% 25% 5%
Bonus (in
millions)
4.19 5.32 .67 11.17 10 15 4
Total
expected
value (in
millions)
6.998 6.2 6.094 5.98 6.89 6.9 6.98
Value after
Commission
to Talia (in
6.12 5.4 5.284 5.5 6.215 6.045 6.08

6NEGOTIATION ANALYSIS
millions)
J.R. Agency
Commission
(in millions)
.87 .744 .81 .48 .675 .45 .9
Talia’s
agent’s
commission
(in millions)
.29 .248 .27 .16 .25 .15 .3
Reasons for Multiple Equivalent Simultaneous Offers:
Policy I -IV have been provided in the task.
Policy I is balanced as it has a high fixed income average percentage of merchandise sale but
low bonus
Policy II has medium fixed and variable factors.
Policy III has a fairly high fixed income and percentage of merchandise sale but a very low
bonus.
Policy IV has a low fixed rate and higher variables
Policy V balances the fixed income and the variable factors giving Talia a high expected
income along with a fairly high commission for the agents.

7NEGOTIATION ANALYSIS
Policy VI has a low fixed income but higher variables, it is risky for Talia but fruitful for the
Producers as the fixed income is low and they only share their benefits with Talia once it
accrues.
Policy VII has a high fixed income that is beneficial to the agents but might be undesirable to
the producers, Talia is protected as the low variables are balanced with a higher fixed income
Policies V, I and VI (in that order) are beneficial for Talia as they give her a high value after
commission.
Policies VII, I and III (in that order) are beneficial for Talia’s agent and J.R. Agency
Policies VI, IV and V (in that order) are beneficial to the Producers as they give Talia a lower
fixed income
We can see that Policies V and VI are beneficial to both Talia and the producer, but VI
having the lowest commission might not be chosen by the agents however V gives a fair
opportunity for commission may or may not be the agent’s choice. Policy V or a policy of a
similar nature would be equally beneficial to all those involved, Policy I would be even better
but might not be preferred by the Production House as the fixed salary is high.