What Negotiation Is and What Interests and Positions Refer to in Negotiation - Assignment Example

Negotiation College: Name: Students ID: Date: Course Name: Unit Code: Time: Instructor: Top Class and Swift Case Study a) Distinguish between the interests and positions of each of the parties. Ahead of answering this question, I define what negotiation is and what interests and positions refer to in negotiation. Negotiation is a universal approach to dispute resolution and is employed in effective decision making. It also supports lots of other alternative dispute resolution methods. Negotiation can be defined as a backward and forward communication between parties to strike a common balance; or a way of receiving what you want from others; or an effort to resolving differences. Two distinctive types of negotiation are position-based negotiation and interest-based negotiation (Raiffa, 2002). A position is where a party states (what) the manner in which the underlying problem ought to be dealt with or determined; or proposes a particular way out. More often than not, parties choose a position(s) that they expect to suit their specific interest or meets up their various wishes. On the other hand, interests are well-defined wishes, provisions or achievements that parties have got to meet up in an agreement before it is regarded as acceptable. Interests may well refer to the substance to defined practical reflections or mental wishes. Interests are centred on all parties based on their personal or organisational wishes. Interests prompt parties to negotiate seeing as they are usually buried under a position. Interests may possibly be mutual or contradictory. Therefore, even though in negotiation it is at times easy to find a common ground, it is crucial that the "interests" and "positions" linked to the negotiation are well cut out (Fisher & Ury, 2011). Referring to the case of Top Class and Swift, the parties have a common interest; they need to expand their operations. Both parties have made new investments from which they intend they generate more cash from. However, each party holds a different position on the manner in which they seek to support their new investments. The position of Top Class is to generate more revenue by increasing their selling price by 9.5 per cent. Swift holds two positions (1) they can only admit a 3 per cent increase in price; and (2) they need Top Class to reimbursed monies on any future orders held by Top Class as compensation for a loss they may well incur due to the poor stitching of the 10,000 pairs of jeans they had acquired from Top Class. b) Identify the alternatives available to each party and how they will impact on the negotiations. As the parties negotiate, one party may easily make a blind deal. It is for this reason that each party has got to consider several alternatives. Alternatives refer to the actions that either party may well engage out of the negotiations, by itself or through a third partner. However, the other party with whom one negotiates is not always involved. The parties simply determine the most favourable alternative they possibly would prefer to crop up from the negotiation. Moreover, it is crucial for the parties to ensure that the alternatives become real rather than merely expressing them. The parties as well ought to act on the alternatives so that they know how to raise them when necessary (Lodder & Zeleznikow, 2005). Having the alternative helps the parties to answers to the following questions: What are our alternatives if the negotiations fail? Do we have an alternative at all if the negotiations fail? Which agreement do we consider? There are four key alternatives that each party may consider in the negotiations; i. Best Alternative to a Negotiated Agreement (BATNA) ii. Worst Alternative to a Negotiated Agreement (WATNA) iii. Estimated/Expected Alternative to a Negotiated Agreement (EATNA) iv. Most Likely Alternative to a Negotiated Agreement (MLATNA) i. Best Alternative to a Negotiated Agreement (BATNA) This is the alternative that will produce the most favourable outcome for either party. If any of the party’s alternative to the negotiation is better than the agreement the parties settle on out of the negotiation, the party will clearly prefer the Best Alternative To a Negotiated Agreement. On the other hand, if the agreement the parties settle on out of the negotiation is better than any of the parties’ alternatives, the agreement will be their Best Alternative To a Negotiated Agreement (Fisher & Ury, 2011). Top Class and Swift have got to ensure that the alternatives they choose are certainly practical and they should endeavour to improve their Best Alternative To a Negotiated Agreement. This alternative has an effect on the manner in which the parties carry out the negotiations because they tend to be overoptimistic. ii. Worst Alternative to a Negotiated Agreement (WATNA) To deal with the problem of parties being overoptimistic about their Best Alternative To a Negotiated Agreement and to help the parties make an informed decision, Notini (2005), argues that the parties should as well analyse their Worst Alternative To a Negotiated Agreement. However this alternative has found to be limited in that parties tent to be too optimistic regarding their chances. Just like parties consider the best alternative hence underrate the other party’s alternative, parties are likely to perceive that their Worst Alternative To a Negotiated Agreement is better than it is and consider the other party’s Worst Alternative To a Negotiated Agreement as of inferior quality than what would be reasonable. iii. Estimated/Expected Alternative to a Negotiated Agreement (EATNA) The Best Alternative To a Negotiated Agreement and the Worst Alternative To a Negotiated Agreement are just two extremes in negotiations. The parties have got to mull over what happens if the negotiations come to a complete end. This is to integrate reality into the negotiations seeing as the parties will not at all times know the available realistic alternatives. Hence, the negotiation will be determined mainly by the parties’ expectations regarding other available options. That’s why the Estimated Alternative To a Negotiated Agreement engages a key role in negotiations than the two extremes (Burgess & Burgess, 2001). However, its effect is that the parties may have impractical expectations regarding their alternatives; hence, the probability of reaching a mutual agreement is considerably reduced. This alternative also leads to frequent eleventh-hour collapses in negotiations iv. Most Likely Alternative to a Negotiated Agreement (MLATNA) This alternative considers the most apparent result. What is most expected to come about should the negotiations stop determines at what time either party has got to walk out on the negotiations? Apparently this seems may be the most favourable alternative to negotiating, since the other feasible alternatives do not take into consideration the likelihood of a certain development. This alternative eases the negotiation process and boosts the possibility of reaching a mutually satisfying agreement (Harvard Business School Publishing, 2003). c) Consider any challenges or hurdles that may prevent the parties reaching a mutually satisfying agreement. The method used in negotiation may well be a problem. Taking the case where the parties opt to solve their dispute based on their positions, it will be hard for them to reach a mutually satisfying agreement. Fisher & Ury (2011) state that for parties to strike a mutually satisfying agreement, they have got to keep away from negotiating based on their positions. Positions merely stimulate conflict given that they are centred on predestined solutions and they attack the other party’s position(s). Positions are hard to bend since they are expressed in terms of yes/no, either/or, win/lose. In this regard, there is only one way in which a position may be gratified, that is, giving what is demanded, and failure to which there may be a consequence. Therefore, positions tend to turn out unsatisfactory agreements. Another challenge could arise if the parties base their negotiation on prices only. According to Raiffa (2002), parties whose negotiation is solely based on price may well twist potentially accommodating arrangements into adversarial ones. Even though in the case of Top Class and Swift, price is a key factor, it is not the only one. It is could as well be challenging if one party chooses to overlook the other party’s problem and becomes self-centred. For example, Top Class may choose to neglect Swift’s problem. In such a situation, the parties may not be able to reach a mutually satisfying agreement unless they identify with their individual interests along with the options where they may not strike a deal. This is because the other party may agree just to suit its reasons, not the other party’s reasons (Notini, 2005). It is therefore important for the parties to identify with and attend to the other party's difficulty as a way out to solving their own. The parties may as well not reach a mutually satisfying agreement is either party acts aggressively. Actions such as making cynical comments, demeaning, discriminating, bribing, unfair criticism, attempts to make the other party feel culpable or feel inferior, and using trivialising words, among other hostile behaviours could improperly pressure the other party, hence, deter the parties from reaching a mutually satisfying agreement. Such actions are just intended to help one party "win" at the expense of the other party. They tend to give rise to bitterness, lack of ownership on the decision that has been arrived at, lack of initiative from the other party once a problem arises, taking out goodwill, broken relations, and retribution. Even though they at times work, they produce short-term gains but run into long term expenses (Fisher & Ury, 2011). Time pressure and use of delay strategies are probable challenges and hindrances to reaching a mutually satisfying agreement. For instance, Swift early in the negotiation could propose that they pass over the haggling and asks Top Class to just offer their best price. Delay strategies could arise where one party regards themselves as the more important party and is therefore the one to determine the course of the negotiation. For example Swift could consider itself more important given that it buys cloth ware from Top Class. Such a strategy puts fear on the other party and exerts some pressure upon them. As a result, the other party may forcefully concur with whichever agreement that is arrived at simply to keep the negotiation short (Lodder & Zeleznikow, 2005). This will not result in a mutually satisfying agreement. References Burgess, G. and Burgess, H. (2001). Student protests, negotiation, and constructive confrontation, Conflict management in higher education report, 2(1). Fisher, R. and Ury, W. (2011). Getting to Yes: Negotiating Agreement Without Giving In. New York: Penguin Books. Harvard Business School Publishing (2003). Negotiation. Boston: Harvard Business School Publishing. Lodder, A.R. and Zeleznikow, J. (2005). Developing an online dispute resolution environment: Dialogue tools and negotiation support systems in a three-step model, Harvard Negotiation Law Review, 10. Raiffa, H. (2002). Negotiation Analysis: The Science and Art of Collaborative Decision Making. Belknap Press. Cambridge, MA. Read More