Negotiation Simulation Chestnut Village

Negotiation between the Bunyon Construction Company and the residents of the Chestnut Drive, seving as access road to the construction site.


I was part of the representatives of Bunyon's Construction Company:

• Valentin: Senior VP
• Christiane: General Counsel
• Me: VP Construction Management
• Camille: VP Marketing & Development

BEFORE NEGOTIATON

Before entering the negotiations with the residents of chestnut drive, we had to agree on a strategy and an agenda. Speaking as one when in front of the residents would be crucial. Each of us had different core interests.

My core interests as VP for Construction Management were the following:

• not slowing down construction to suit the residents
• imperative to held the project within the budget and schedule (not to agree to anything that makes construction more expensive or slow it down)
• rather come over budget than use substandard building materials (even if it costs your job)
• you don’t want anyone to tell the contractors and subcontractors how to do their job (they know - their job and they do it well)
• making the construction site safe, thus putting up fences

We discussed our main interests and agreed on the following points:

• safety: we agree that safety has to be increased, also in our interest to avoid any further vandalism. So we’ll put up fences around the site and propose speed bumps if the residents wish so
• stick to schedule: completing the building in time is crucial after the disaster with the shopping center
• sticking to the budget: not propose any measures to the residents that will have a considerable cost as the granit leak already uses a great part of the calculated reserves
• dust: we’ll cover the trucks in order to reduce the dust produced by the trucks
• NO alternative road will be built, way too expensive and would take too much time
• allow the residents to use the tennis court every Saturday for a lower fee
• invite them to the inauguration party

Our BATNA is actually quite simply to do nothing, However we need to avoid any damage of our reputation! So our strategy is first to listen to their complaints. Then start negotiating on the different points. Making sure not only to make concessions but also to get something in return, like cooperation and good press. Underline the positive sides for them: more families will move here, the faster we can work the faster the noise will have an end and their homes gain value.


DURING NEGOTIATION

We entered the negotiations and we were surprised by the relaxed atmosphere. Marina, the shopkeeper, was leading the negotiation during the whole time. She did a very good job. I think however, we should have leaded the negotiation a bit more. We discussed on different points:

• Security: The residents told that their kids fell into wholes and one child was almost run over by a passing truck. We agreed to put up the fences as soon as possible and to install speed bumps. This is a measure which is bearable for us as far as costs are concerned. We wanted to avoid the topic of the potential creation of a new access road so we agreed on speed bumps. However, we deny to install night lights as first, kids should not be playing on the street at night and second, the fences will not allow for anyone to enter the construction site. I also agree to talk to the site supervisor to let him know about the incident with the kid so that he could talk with his truck drivers to pay attention given that in this residential area there are kids around going to school.  The child needs therapy after the shock and we agree to look into a possible coverage of the fees with our insurance.

• Recreational facilites: The residents demand to have access to the recreational facilities that will are constructed with the new residence. Our Marketing & Development Manager just very hesitantly agreed for access every Saturday for a lower fee arguing that the facilites are actually exclusive for the inhabitants of the new residence. We felt the residents of Chestnut Drive had asked quite a lot so what we asked in return was some good press and cooperation by emphasizing the fact that delays would only result in a longer construction phase.

• Dirty street: The residents were complaining about the dirty (dust, dirt and litter) streets. And asked about a cleaning service in order to keep the street tidy. We argued that dirt comes along with every construction site. We agreed to protect the trucks in order to reduce dust. As we cannot guarantee for a regular cleaning service we agree to let the streets being cleaned once. They further complained about the workers peeing on the street. I do actually not want to intervene in the leading of the workers. This however is an unacceptable behavior and I will talk to the site supervisor about it.

• They had another complaint about workers, apparently they had whistled at one of the resident’s girl, aged 14. That is not acceptable either, and I assure them to bring the topic up when visiting the construction site the next time.

• Noise: Moreover the construction works as well as the trucks coming and going is noisy. We insisted on the fact that a construction site always comes along with noise. Apparently windows have broken because of the vibration of the works. We agree to send someone over to check and then to look into it with our insurance.

The residents tried to make us sign a contract with a penalty clause in case we do not fulfill the above mentioned points. We however refused to do so, as all of the above measures and gestures are done out of goodwill and our interest in keeping good relations with the residents.

Further topics we discussed:

• there would be a monthly meeting between representatives of Bunyon’s and the residents to address issues right away
• there will be better communication channels
• they will be invited to the inauguration party and may present their services (for example carpenter) there to the new residents.

RECAP

Both parties left the negotiation table being content about the outcome. The negotiations were not at all hostile and both parties seemed willing to cooperate and to accept compromises. It’s true that we have made many concessions. When writing the blog now I actually only realize how many they were. On the other hand I think it was wise to do so. Even if the residents of Chestnut Drive could not have stopped the construction of the new Residence they could easily delay the construction or make it more expensive. Both of which we want to absolutely avoid, after the shopping center disaster.

What was good:

• we acted as one, we sticked to what we agreed on beforehand
• we did not say yes to all their demands
• the topic of a new access road did not even come up

Critics:

• we did not really distribute rules for the negotiation process
• I maybe should have sticked more to my rule as Construction Manager, that is not to care so much about the well being of the residents but rather about the budget and schedule being kept within the planning
• we were not the leading party during the negotiations. We maybe behaved a bit too much as the accused with the feeling of having to defend ourselves.

All in all I found this kind of negotiation exercise very interesting and helpful as it allows you really to assume a role and to discuss the issue in your group - which makes it easier and more difficult at the same time.