BUS356 Business Negotiation Tutor Marked Assignment (TMA) | SUSS

Tutor-Marked Assignment

This assignment is worth 20% of the final mark for BUS356 Business Negotiation. The cut-off date for this assignment is 06 February 2025, 2355 hrs.

Note to Students:

Compose your report using Microsoft Office Word, and save it either as .doc or .docx (preferred).
You are to include the following particulars in your submission: Course Code, Title of the TMA, SUSS PI No., Your Name and Submission Date

Instructions

Students need to apply essential knowledge and skills learnt in this course to address the questions and demonstrate the ability to be creative to solve problems.

Students must demonstrate written proficiency by producing a typed report in Microsoft Word 2013 or later (*.docx) format. Any key illustrations and diagrams should be shown in the main report with proper in-text citations.

Please note that:

• The details and names used in the questions are fictional. Any resemblance to a real-life situation is purely coincidental.
• Students should not include the questions in the report.
• The ability to (i) conduct proper research, provide the appropriate referencing of sources (students must provide proper in-text citations and an end-text reference list), and (ii) demonstrate critical thinking and creativity are all essential skills that our students must develop. Hence, marks will also be awarded for good research effort and proper referencing.
• Fewer marks will be awarded to students who merely extract information from their reference sources without demonstrating critical analysis and creativity.
• Answers that are simply reproduced from the course materials will not be given any marks.

Question 1

Note: This is a fictitious case.

Sale of a House: A Choice of Negotiating Strategies

Mr Kar (herein known as “Kar”) and his wife are both Australians and have been staying in a freehold five-bedder, semi-detached house in Dunearn Road, Singapore for the past ten years. Their house is in an upper-middle-class area and near several prestigious schools. Nanyang Primary School is less than 1 km away, and the Tan Kah Kee MRT station is only 350m away from their house. Their house is also located away from the main road and near a playground. The surrounding area is safe as it is well-lit. Also, there are frequent police patrols around the area.

Kar rented the house ten years ago when he was posted by his Sydney-headquartered company to work in Singapore. He rented the house for a few years, and when he became a Singapore Permanent Resident, he bought the house from his landlord at a good price. Although the house was well-maintained, he renovated the house for $200,000 a year ago. The Kars loved the surrounding area. Grocery shopping was convenient as NTUC FairPrice and Cold Storage were just a ten-minute walk away. The couple ate out almost every weekend with their friends, often at various popular Chinese, Indian, Japanese and Italian restaurants just a short walk from their house.

Kar knew that his house was a rare find. Kar surfed the internet and found out that his house was the only landed property in the 4,000 square feet category on sale in the vicinity then. Most of the other units on sale were either larger in their land area (costing much more) or terrace houses (2,000 square feet or less).

However, Kar just got notice that he would be posted back to his headquarters office in Sydney to oversee an important programme there. He had to start work there in four months (at the latest). The Kars had mixed feelings about their relocation to Sydney. On the one hand, they loved staying in Singapore. On the other hand, the couple also looked forward to spending more time with their ageing parents in Sydney. They decided that they would sell their house directly to a buyer and avoid paying the 1% to 2% Seller Agent’s fees to a property agent.

Kar’s bank recently valued his house at $8.5M. He advertised his house as sitting on 4,300 square feet of land on the 99.co property website for $8.5M or $1,977 psf. Kar would be in charge and responsible for all matters about the sale of their house. This included all the house viewings and negotiations with potential buyers.

The Kars have been rearing three pedigreed Bull Terrier dogs (purchased in Singapore for $8,000 a few years back) for the past five years. The couple loved their dogs and wanted to send them back to their Sydney home. Unfortunately, the respective authority did not permit them to export their three dogs back to Sydney. The couple was not keen to send their dogs to a local dog shelter to be put up for adoption. If nobody adopted their dogs after a year, they would likely be put down. The dog shelters do not have sufficient accommodation to house too many dogs.

The Kars were seriously considering selling their house at a special price to any buyer based only on one condition, namely that the buyer likes dogs and will adopt their three dogs for free. They may sell their house for up to $300,000 cheaper (than their advertised $8.5M price), provided the prospective house buyer could assure the couple of his or her sincerity and commitment towards the care of their beloved dogs until their death.

A week after the advertisement was up, Kar had shown his house to eight potential buyers, of which three had made an offer close to his asking price of $8.5M. The three potential buyers liked Kar’s renovations, which were completed a year ago. One of the five remaining potential buyers who have yet to make an offer was the Tan family.

The Kars have a good impression of the Tans. Their lead negotiator was Mr. Tan (herein known as “Tan”). Tan, his wife, their three daughters (1, 3 and 5 years old) and their helper made up the six members of their household, and they needed a house above 3,000 square feet. It was their first visit to Kar’s house and the surrounding area. Tan told Kar that he and his wife intended to enrol their three daughters at the nearby Nanyang Primary School when they reached the age of seven. It was a reputable school. The school is within 1 km from Kar’s house, and the Tans would stand a high chance of their daughters being admitted there, given the prevailing government’s school allocation policy for students at that time.

Tan told Kar at their first meeting that he would like to buy Kar’s house at a good price as his three daughters were young and his household expenses were high. Tan had not done much research. Yet, he was willing to offer $8M to $8.2M to Kar for his house. He was just unsure if it was too early to make an offer. He felt that perhaps he could wait a bit longer, get more market information and get a better sense of Kar’s keenness to sell his house to him.

Interestingly, the Tans like dogs. They do not own any dogs, but they volunteer at a dog shelter on weekends. Kar saw Tan’s daughters playing happily with his dogs during the Tans’ first viewing. Kar thought to himself that the Tans looked like they could provide the most ideal environment for his dogs should they choose to adopt his dogs. But how could he broach this without being too presumptuous?

Meanwhile, as they talked more, Tan wondered if there was any chance that Kar might just lower his asking price for the house if he were to offer to adopt Kar’s dogs. Kar had told Tan that he could not relocate the dogs back to Sydney, and he was worried that nobody would adopt his dogs in Singapore.

(a) Assume that Kar wants to close the sale of his house with Tan. Consider two (2) possible strategies from the Dual Concerns model, namely the Contending strategy and the Problem-solving strategy, in managing conflict between Kar and Tan during the negotiation for the sale of Kar’s house to Tan.

For each of the two (2) strategies (Contending and Problem-solving), define each strategy in your own words, analyse with evidence from the given case, the nature of the negotiation, the relative negotiating power of both parties, the option(s) available for Kar and likely outcome(s) for Kar. You may state any reasonable assumptions.

(b) Assume that Kar was not in a hurry to sell his house and that he wants to achieve the highest possible price and the best outcome for him and his wife. Tan and his family have made an appointment to view Kar’s house for the second time to make a final offer.

Appraise how Kar could apply the four (4) tactical tasks under the distributive bargaining approach to achieve his objective(s). For each tactical task, provide relevant assumption(s) and specific action(s) Kar could take (e.g., what he should say to Tan) and also a plausible scenario (e.g., responses and outcomes) from Kar’s and Tan’s perspectives.