Negotiation Process of the Dairy Company - Essay Example

? 3001EHR Negotiation The plan for a workplace Negotiation QingYing Chen ID: 2704055 Joan ial Time: 4p.m, Monday Word count: 1145 Reference style: APA Introduction This study is about the negotiation process of the dairy company. It analysed the most important issue which is most keen to get agreement for managers of diary company. It also adopt a cooperative strategy which is use to negotiate with union and aim to build the long-term relationship with workers. At the end of the study, it identified the issue where may arise conflict. The most important issue For the diary products company, it is necessary to negotiate about the hour roster which including implications for shifts and for overtime. There are some inevitable reasons and situations result in company have to change worker's rosters or hours. For example, different season may have different demand, such as demand of ice-cream is higher in summer. Then company may require more workers work overtime in this period to increase the output of products. However, the number of workers work overtime can affect the profit of organisation because of the large expense of overtime pay. In fact, managers should reduce expenses as much as possible to reach the maximum profit of company. Besides that financial disadvantage to workers having to change rosters or hours to be kept to a minimum but some workers will earn less on the new rosters because there will be less regular overtime. Financial disadvantage will affect worker's dissatisfaction on company and will directly affect their work efficiency and quality of work. (Peddle, 2008) Therefore, how to balance workers work overtime and worker's financial advantage is a critical problem that should be considered by manager. The least important issue The least important issue is the duration of the agreement. It could be less important compare to other issues. For example, it might have some contingency problems occur when the agreement have fulfilled during the course such as union may want to get some more benefit for labours. It can directly lead the labour cost change and determine the agreement duration. Then it will have the new agreement replaced the original. It realised that the agreement duration is the least important issue among others. Therefore, it can not settled the duration of the agreement can be existed for 2 years. Overall strategy might be adopt The strategy will be adopt here is the cooperative strategy which is the integrative bargaining. Integrative bargaining is to to find common or complementary interests and to solve problems confronting both parties.It is aim to maximize joint benefits and reconcile interests and solve problems.(Walton & McKersie (1965) The reason to use this strategy is to establish long-term relationship between company and employees. It is an important element to achieve company goal. As it mentioned before, company leave out employee's financial disadvantage of account can result in dissatisfaction of employees, it leads a high staff turnover and negative impacts for company. The dairy company should assume several ways to achieve win-win agreement. Negotiator can directly take aim at primal problems through avoid some less important problems during negotiating. ( Bazerman, Magliozzi & Neale, 1985) Then managers need to used the integrative bargaining strategic in proper phases of negotiation process. Rojot summarised three main phases of negotiation which are beginning phase, middle phase and end phase.(1990) The integrative bargaining strategy will be adopted in the beginning phase. The first reason to adopt the strategy in this phase is the aim of company to use the integrative bargaining strategy to build long-term relationship with employees. In the beginning phase, the first meeting will be held. However, negotiating parties are stand on opposite position because each of the party wants to gain their ends and they may not trust each other. Therefore, to build trust in the first phase is a necessary precondition to build long-term relationship. The second reason is the integrative bargaining strategy includes collaborative tactics. Rojot stated that the use of tactics and adaptative style, whatever the strategy and style may be, if one opens competitively one may never have a chance to become collaborative later, it is because negotiating has a built-in competitive dynamic. (1990) Therefore, manager should consciously tell employees that they are intended to build long-term relationship with them. There are some issues may occur in each phase. In the beginning phase, the opponents may become emotional after exchange the opening statement, because the conditions that negotiator stated beyond their bottom line. Another issue may be occur is the opponent express tough attitudes and they are going to adopt competitive strategy. In the middle phase, the worst case may be occurred is the deadlock. Deadlock usually occurs when opponent's conditions beyond their bottom line and both parties refuse to give concessions and. In the end phase, the breakdown of the negotiation may be occurred. There are two probabilities: reach the agreement or can not reach the agreement. It will directly affect future relationship with opponent. Conflict The third issue which is about worker's overtime pay may arise conflicts. It is because the diary company's aim is to reduce or eliminate hours worked at overtime rates to achieve higher profit of the company. However, the change of rosters or hours can lead to financial disadvantage to workers. The nominal weekly hours is to be 38 hours averaged over a number of weeks and 76 hours across two weeks. Some workers may work 60 hours across the first two weeks and only work 16 hours across the next two weeks because of change of the roster, and than they can have 22 hour overtime pay. However, managers may only picked some of employees to change roster or work overtime because they wants to reduce the expense of overtime. This will lead other employees earn less because there will be less regular time. "The key to effective negotiation is clear communication. Communication involves three important skills: speaking, listening and understanding." (Fiske & Clark, 2006) Managers firstly have to know why employees dissatisfied with their arrangement. And know what they actually want. "If two people do not understand each other's problems and concerns, then the process of negotiation will either be broken off or will end with solutions that do not work."(Fiske & Clark, 2006) In this case, manager should make sure that employees can have equal chance to work overtime. For example, manager may discuss with employees and suggest that they can draw up a new roster, tick the name who has already worked overtime, and the next overtime can arrange to other employees who did not work overtime. This solution can help to manager reduce the expense of overtime, it can also help to solve some employee's financial disadvantage problem, thus the dissatisfaction also be reduced at the same time. What Occurred “Effective negotiators uncover information about themselves, their opponents, and the object of a negotiation during both the prep phase and the actual negotiation itself” (Lewicki, Saunders, Minton & Barry, 2003, p.239). In relation to the training negotiations, there were concerns related to whether or not the receipt of training would provide opportunities for employees over that of employees who did not receive effective training seminars. In order to get the root of this emotion and concern, the negotiation team needed to uncover what was driving inherent emotional responses to opportunity delegation and the level of fairness that each member of the bargaining group perceived related to training. Abraham Maslow described the five highest motivators required in order for an individual to become effective members of a contributory organization. Of these is a sense of belonging. “Individuals need to feel useful and also feel that they have some affect on their environment” (Gambrel & Cianci, 2003, p.145). Integrative bargaining was conducted in order to build long-term relationships between the company and bargaining employee unit, thus relying on psychological theory and methodology related to inherent belonging attributes was required to gain their commitment and agreement. This was conducted by constantly reinforcing that the employees had significant value to profitability and productivity, giving the union representatives a sense of value-added beliefs stemming from the corporate bargaining unit. By appealing to the inherent desires and motivations that drive more positive communication and open discussion, the management team was able to gain commitment and trust that what was being discussed was true, honest and direct. This also led to the ability to ensure confidentiality related to the development of employee representatives who would have access to the financial information of the company. By establishing an open line of communication, using language that always focused on belonging and social harmony as valued team members of the organization, the contract developed to ensure confidentiality was easily constructed by union representatives and the management team. Inclusion was the basis of the heart of the negotiations related to the development of the joint workplace committee. Even though this role was only consultive, union representatives agreed that inclusion of employees in company meetings gave them a greater sense of purpose and could also have a voice to issue concerns over financial matters in an open and inclusive environment. Though the hours roster failed to meet expectations rrelated to overtime payments and the establishment of shift security, some headway was made regarding how pay should be established. “Nothing works under all circumstances, so you have to be agile and flexible” (Zubko, 2008, p.26). Though no clear resolution was achieved, productivity issues were left flexible for future discussions, again by establishing an agreed-upon joint workplace committee that could be exposed to the financial situation of the company. It was agreed upon by the union reps and the management team that it would take two years to ensure stability and predictability related to the cost of labour and related to productivity improvements. Therefore, all members of the bargaining team were satisfied that the joint committee would provide the most opportunity to work out these problems over time after reviewing current financial condition of the business and after creating adequate flowcharts of work activities in each section of the business to establish a clear hours roster that could be used effectively over the long-term. The union representatives had demanded a 60/40 productivity benefit, however the bargaining finally led to an agreement of 70/30 in favour of the company. Organizational narratives were constructed that revealed real-time financial concerns that such a productivity split would create. These are stories of how “things are done around here” and reveal how real life events occur as related to the company portfolio (Goodall, Goodall & Shiefelbein, 2010, p.43). By giving the union representatives a brief overview of the current financial position and strategic goals already in place, it offered a trustworthy snapshot of the realities of profitability and growth for the company. Without this establishment of trust through organizational narratives and shared financial information, such an agreement would have likely been argued at 60/40 in favor of employees. By understanding the strategic long-term goals of the company for expansion and the trickle down effect these long-term goals would have on employee income levels, the bargain was able to be negotiated successfully at 70/30. This was, again, an aspect of clear and concise communication and trust establishment that the realities of finance would be addressed and shared appropriately as had been agreed upon. Conclusion From the manager's point of view, to build the long-term relationship with employees is very important to the company's perspective. In this negotiation, the manager of the dairy company adopt the integrative strategy to gain the agreement with employee. However, to make a plan to use the strategy is a key point . This study talked about the way to use the strategy and identified some issue that may arise in the negotiation process. It was the openness and psychological methodology utilized by the management negotiation team that provided the most benefit for all elements of the bargaining that was ultimately achieved; despite a few failures in the short-term. In retrospect, the only elements that should have been changed related to the negotation were lack of reliance on more psychological theories in order to gain advantage and, somewhat, maintain a deceptive composure as part of tactical bargaining rather than bargaining with absolute disclosure. It is likely that if this style of bargaining had been chosen, the matters left unresolved would have been easier managed by the corporate bargaining team. It is now always a good idea to reveal all of the realities of the corporate position especially when issues of long-term profitability and growth could be impacted such as related to the roster development and hours of overtime paid. Reference Peddle, M. T. (2008). Negotiating and bargaining in economic development. Government Finance Review, 24 (3), 32. Walton, R. E. & Mckersie, R. B. (1965). A Behavioral Theory of Labor Negotiation. New York: McGraw-Hill. Rojot, J. (1991). Negotiation:from theory to practice. Houndmills, Hants: Macmillian. Fiske, C. & Clark, J. A. (2006). Negotiation skills. columbia: University of Missouri-columbia. Bazerman, M. H., Magliozzi, T. & Neale, M. A. (1985). Integrative bargaining in a competitive market. Organizational Behavior and Human Decision Processes, 35 (3), 294-313. Lewicki, R., Saunders, D., Minton, J. & Barry, B. (2003). Negotiation: Readings, Exercises and Cases, 4th ed. McGraw-Hill Irwin. Gambrel, P. & Cianci, R. (2003). Maslow’s Hierarchy of Needs: Does it Apply in a Collectivist Culture, Journal of Applied Management and Entrepreneurship, 8(2), pp.143-162. Zubko, Nick. (2008). Powers of Persuasion, Industry Week ,257(11), pp.26-28. Goodall, H., Goodall, S. & Shiefelbein, J. (2003). Business and Professional Communication in the Global Workplace, 3rd ed. Wadsworth Cengage Learning. Read More