Tag Archives: 2012 Small Business Leadership Academy

Small Business Leadership Academy

Small Business Leadership Academy: Match Your Negotiating Style To Your Objective

“Playing hardball” is a phrase often used to describe negotiations. The point is the deal — there’s a winner and a loser — and the toughest side prevails.

Hardball is a good game plan under some circumstances — if it’s a one-time opportunity, for example. But what if the client or customer with whom you are negotiating has potential to bring you business long-term? In that situation, driving hard might not be your best approach.

Alan Goldman, a management professor of practice at the W. P. Carey School of Business, is teaching the negotiations classes in the 2012 Small Business Leadership Academy (SBLA) presented by W. P. Carey’s Center for Executive and Professional Development. Drawing lessons from the Harvard Negotiation Project, Goldman is helping students realize a more sophisticated approach to negotiating that goes beyond winner-take-all.

Key to the Harvard system is the theory that there are two broad approaches to negotiating: Theory X and Theory Y.

Theory X negotiators are the hardball players. The process is adversarial and focused on the deal and the bottom line. A Theory X negotiator dominates by wielding power, exploiting weakness and elevating the rational over emotions.

Theory Y negotiators seek to build fruitful relationships. For them, the objective is agreement, so they work on establishing trust. They open with small talk. They’re empathetic, flexible and willing to yield for mutual benefit.

Each style has its place, says Goldman. If the objective is a one-time transaction, then driving Theory X-style for the best deal obtainable, no matter how hard-nosed you have to be, may be the best approach.

But sometimes the greater advantage — and profit — accrues across numbers of transactions. In that case you’d be doing yourself a favor to employ the tactics of a Theory Y negotiator.

Assigned reading in Goldman’s class is one of the classics of negotiating training, the bestselling “Getting to Yes: Negotiating Agreement Without Giving In.” Its lessons are valuable in your personal life as well as business.


Listen to the Podcast:
Match Your Negotiating Style To Your Objective


The Small Business Leadership Academy (SBLA) is an intensive executive education program designed to strengthen the business acumen of small business leaders in Arizona. The program was jointly developed by the W. P. Carey School of Business and the Salt River Project (SRP), the program’s founding sponsor. Other seat sponsors this year include: Arizona Lottery, Blue Cross Blue Shield of Arizona, Hahnco and U.S. Bank. Each week we will bring you a few salient points from each class as well as comments from the professors themselves and the impact the information has had on the students.

For more information about the Small Business Leadership Academy, please visit SBLA’s website.

Small Business Leadership Academy

Strategic Procurement: Developing Supply Strategy

“Knowledge is power,” says Joseph Carter, the Avnet Professor of Supply Chain Management at the W. P. Carey School of Business, and leader of the Strategic Procurement section of the 2012 Small Business Leadership Academy.

For a small company looking to bring on a large company as a client, or keep a large company as a client, cost can be the main component of the relationship. “Price is only one part of the total cost,” Carter remarks. “The four general types of supply costs include purchase price, transaction costs, administrative costs and production costs. “

The large company will first define its category, putting information together, including the strategy for that category. Strategy can include searching out the lowest cost, the quickest response time or the least amount of risk, which relates to the external market complexity. This information should be available at the drop of a hat for the company.

One place the large company will try to squeeze their suppliers is by negotiating a lower purchase price. The purchase price is always important, but it isn’t as simple as just one number. The purchase price includes four distinct factors: profit, semi-variable costs, variable costs and fixed costs.

The large company knows that a very small percentage of its suppliers garner the majority of the purchase dollars. Purchases should be grouped into imperative categories with the understanding that 80 percent of dollars spent will be on 20 percent of the categories.

What does this all mean to the small business owner? Once they understand where they stand as a supplier, they can better understand the bidding processes that they must go through, as well as the pressures they will face. For the small business owner, knowledge is power.


Listen to the podcast.


The Small Business Leadership Academy (SBLA) is an intensive executive education program designed to strengthen the business acumen of small business leaders in Arizona. The program was jointly developed by the W. P. Carey School of Business and the Salt River Project (SRP), the program’s founding sponsor. Other seat sponsors this year include: Arizona Lottery, Blue Cross Blue Shield of Arizona, Hahnco and U.S. Bank. Each week we will bring you a few salient points from each class as well as comments from the professors themselves and the impact the information has had on the students.

For more information about strategic procurement and/or the Small Business Leadership Academy, please visit SBLA’s website.