Reading Passage Time: 3 minutes A win-win negotiation is concluded when both parties gain something of value in exchange for mak

Professor:
Let me tell you about a case study that is often used as an example of how a win-win situation can be negotiated by both parties. Tony was a computer software designer who had come up with a great idea for a computer game, but his problem was that he couldn’t afford to quit his job while he worked on the game because he had to make a living for his family. He thought it would probably take him about a year to actually complete the programming for the game if he worked in his spare time. Okay. Well, he put together a proposal, and took it to a multinational company that had launched several successful computer games. But the problem was that the company made him a very low offer—just a thousand dollars a month for twelve months. And although that would have paid his bills during the time that he would have been working on the program, he knew that the game had a huge potential for return on the company’s investment. So he felt like he would be taking all the risk without having the opportunity to share in the reward. But when the company refused to give him any additional upfront money, then, instead of getting angry, Tony went back with a counteroffer. He agreed to accept the $12,000 as an advance on the profits that he expected the game to generate. And he suggested that they share the future revenues in a ratio of 40:60—40 percent for Tony and 60 percent for the company. The company was interested, but explained to Tony that they would be investing over a million dollars in order to produce and market the game and would need a larger share in order to proceed. So they agreed on a 30:70 split. And, as it happened, the game was a big success, the company made a huge profit and Tony was able to quit his regular job and start his own game design company. So—everybody won. They were both able to minimize their risk and increase their profits.