Techniques of Negotiation - Research Paper Example

Techniques of Negotiation Trust is defined by the scholars as confident positive expectations regarding another’s conduct”. (Lewicki, McAllister, & Bies, 1998). The concepts of trust in organizations become popular in 1980’s. A huge amount of literature came out between 80’s and 90’s. The literature was focused on strengthen the relations with the suppliers through building trust. However this literature was focused on three control mechanism theories, price, authority and trust. Trust was seen as an essential factor before taking any decision that involves risk. (Creed, Miles, Kramer, & Tyler, 1996) Trust plays a key role in building up the trust among different organization departments. Nowadays organizations are not limited to one city, country and even continents. The process of globalization, multicultural workforce, multicultural suppliers and customers, they all are an integral part of an organization these days. With so much expansion and diversity at the workplace the role of trust becomes far more important than any other time. Any sort of product development, expansion, mergers, acquisitions mainly rely on trust factor between the organization parts and also external relations. The literature of trust is expanded throughout many disciplines. However major part has been played by the psychologist in shaping up the literature. The literature in psychology has focused on how trust shape up the social relations. The trust factor is seen as a healthy personality sign in organizations and people who are part of it. (Lewicki, et al., 1998) More recently trust literature has focused on how it increases the efficiency of organization work and explaining how it has emerged in the past decade. The work done on trust in the past few decades can be divided into categories. These categories are 1) trust as an individual attribute, 2) trust as a behavior, 3) trust as a situational factor, and 4) trust as an individual arrangement. (Bigley & Pearce, 1998) In this particular essay our main focus is on trust as a situational factors, as our main topic is negotiation and trust in negotiation. Negotiation is a situation and presence of trust is an essential part of the process. In this essay our focus is on Trust In negotiation. In the next few paragraphs the essay will focus on the literature of negotiation and the role that trust plays in it. Negotiation has been defined by many scholars in different ways. One of the common and easy definition for the concept is following, “It is a process by which the involved parties or group resolve matters of dispute by holding discussions and coming to an agreement which can be mutually agreed by them. It also refers to coming to closing a business deal or bargaining on some product. It also means exchange of negotiable instruments such as bills of exchange, cheques etc in exchange of goods, service or money.” The above definition clearly defines it as a process in which parties either resolve their disputes, or make agreement for new business by holding discussions and eventually coming to an agreement. The situation involves two or more than two parties who may have conflict over the interest. These situations can involve individuals within an organization, groups, or two separate organizations. The basic concept of negotiation is too coming to an agreement rather than avoiding the conflict. (Lewicki, Saunders, & Minton, 1985) Trust in negotiation has become extremely important in the past few decades. Negotiation itself is a complex and difficult process; it is not simple enough to proceed on its own. It’s very important to have clear communication and element of trust to make it successful. Organizations have realized that without building trust it will be difficult to negotiate with suppliers, competitors, and stakeholders. Especially when it comes to crises negotiation, the only forward way is building trust and making sure that you are being trusted too. (Docherty, 1999) The element of trust becomes extremely important when negotiations are being carried out with an external party. Negotiation on conflict of interest usually starts when there is a breakdown in communication or parties can’t reach agreement, in this case the element of trust becomes an essential part of the whole process. (Bazerman & Lewicki, 1983; Strauss, 1978) Lewicki has contributed a significant amount in the literature of negotiation. He defines the whole process by explaining the elements of interdependence are very important. Goal setting and analyzing the other party before the process starts plays an essential role in the success of the process. Once the process starts the situation can turn around despite the whole preparation and many times a win lose situation is created rather than win-win one. The fact is that it can only be turned around with building trust with other party and making sure that you are being trusted too. (Lewicki & Litterer, 1985) A study conducted on college students resulted that trust during negotiation benefit both parties and usually lead to an outcome that’s mutually beneficial for both parties. (Kimmel, 1980) Trust is not the element that negotiation depends on but its other way around as well. Many times negotiation is used to build trust with the other party. This process involves reaching an agreement which helps the parties able to trust each other. Once the trust is established then the further negotiation process relies on trust. (Fells, 1993) Another study conducted on fresh fruit and vegetable market involved the trust negotiation between growers and market agents. Most of the growers in the market dealt with more than one agent. The process of trust building came when the exchange of products and money took place. It was a long process which involved negotiation at first and then the building of trust with the passage of time. Research explained that the building of trust only took place when grower and market agents were aware of each other goals which were similar. (Batt, 2003) A very important part of literature on trust and negotiation emerged in the past decade involving e-business and World Wide Web and other business that take place though internet. This sort of market emerged in the past 2 decades and has proven to flourish only on the basis of trust. Consumers purchasing behavior is widely affected the trust factor and it becomes a central issue in negotiation process as well. Without the physical presence of people and structure, negotiation still takes places and is successful only because trust exists between the parties. (Ltd, 2000) Trust building in negotiation process is most important when there are conflicts of interests. There are other situations when parties come together because they have a common goal and they want to pursue together. That situation usually occurs when there is a merger or acquisition in place. However in other situation such as union and management negotiation or employees management situation usually occurs when one of both parties is not happy with each other. In this sort of circumstances trust particularly becomes a vital component in achieving success for the whole process. The problem with trust however comes in these situations as well because parties are already not happy with each other and when trust is being built in the process, they become suspicious of each other and feel that they are being led to a trap. However this situation can easily be tackled by hiring external consultants or the mediators who can be neutral and play a role in tackling the negotiation further. Trust is a slow process and can take years to build. Once it’s broken it is very hard to get it back in organizations. That is why negotiation become very tough and challenging as the parties have only come to this stage because a trust has already been broken. However literature suggests clear solution for this situation. Researchers and studies suggest that before going into such negotiation it is important that parties let each other know that they are willing to corporate with each other and come to a solution. It is also important to convey that after all parties have come together because they have common interest and goals and both are willing to resolve the situation. (Butler Jr, 1999) Hypothesis As a consultant I have been asked to pursue negotiation on behalf of the company/top management with a group of employees who have gone on strike. The company name is Panorama Ltd and it’s a business to business consulting provider. The company is a combination of office and home based workers. Home based workers are the consultants that go to different companies to give them consulting advice on business issues. While the workers at the office carry the administrative tasks such as HR, call centre, marketing, and sales. The problem is with the home based workers/consultant, they have gone on the strike on the basis that their workload is too much when compared with the salaries they are paid. They also feel isolated and left out from the office decisions. They require the company’s top management to understand their situation and come up with a solution. The company has asked me as an external consultant to negotiate with the consultant to come back from the strike. The company has given me instructions on the issues of salary and isolation telling me to exactly first come up with the problem and then the solution. Top management fears that problems are wider and deeper than they seem and are not just salary related. This conclusion has been drawn by small talks that some of the managers have carried out with the consultants. Since the trust element is low between the parties they have hired an external consultant to carry out the task for them. Objective As an external consultant it is now my duty to resolve the situation through my negotiation skills. The objectives are the following, To know the real reasons behind the issues of isolation, salary, and workload. Negotiate these issues to come up with a solution that benefits both parties Make sure to get to the bottom of all problems as sometime problem conveyed and real one that’s in existence are entirely different. Implement the solutions within the organization to make sure such situation is not created again. Research As the literature defines that the process of negotiation cannot begin unless the parties analyze each other needs desires, conflicts and interest to understand the situation background. Gaining such information is basis of any negotiation process.(Zartman, 1978) So I begin the first step by analyzing the whole situation. The research was done through observation at the company, small interviews with the consultants and office based workers, and idle chats with the top management. The research was qualitative rather than quantitative and involved gaining as much informal information as possible. The purpose of conducting this type of research was to get use to the company’s atmosphere to understand the situation better. Another reason was to make sure that office based workers and consultants both feel that I am also part of the company rather than an outsider. Literature recommends that before entering into the negotiation process it is important to convey that cooperative attitude is carried rather than competitive. (Stevens, 1963) Since I was representing the company and the top management I made sure that I convey the attitude that’s friendly and willing to negotiate rather than impose. By doing such research I came up with this background, There is a clear lack of communication between the office worker and consultants Consultants often complained about lack of communication from office workers. Consultants felt that they are being kept out of office decisions as all the decisions relating or not relating them are conveyed rather than being consulted. They also complained about the visibility of the top management and said that they don’t know how the company is run and if they can trust the top management at all. There were also issues within the group of consultants as they did not know about each other work and ranks. The points listed above were just a background information that I gained from informal chat and small interviews to understand the situation. There clearly seemed a lack of trust between office workers, top management and the consultant. My responsibility was to talk with the consultants and negotiate with them to come back to work. The consulting process and Results The oldest model for negotiation includes four factors, win-win, win-lose. Lose-win, lose-lose. The best possible is to achieve win-win situation in a negotiation process, however it is not always achievable. Many times while building trust parties cut down out because it is felt that trust building is just creating a trap to close down the negotiation. Too many efforts on trust building can also be dangerous for the negotiation process. The focus should be to make efforts which do not look and sound exaggerating to the other party. When the parties come to negotiate with each other they always have their minds set on some sort of give and take. The only reason to come and negotiate is because they have some similar goals as well. Conflicting interest are just one way of looking at the process. If the parties have come together to talk with each other then it means they have similar goals in mind and they are willing to give something for it. The process can be damaged if it starts and ends with one party imposing too much on the other depending if they have a upper hand. My efforts were obviously to create a win-win situation for the company because consultants were part of the company and not outsiders. I entered into negotiation process by doing the background search and knowing some problems that seemed to be known by everyone in the company. The 2nd step involved starting the talks with the group of consultants. Since this was a group, they had a leader to represent them. However I made sure that all the consultants were present during the discussion because they were independent workers and later could create issues with the leader not conveying the whole situation. During the process the following steps were taken, Trust Building: when the process started I made it clear to the other party that I have been part of the company for few weeks now and I am not just instructed by top management rather I have my own observations regarding the situation. This step was very effective as it relaxed the other party and they showed some trust on me. As the conversation went on I stated other facts such as lack of communication is a real issue with other organizations as well and they aren’t the only ones suffering from it. I also assured them that I have worked with other organizations that were combination of different types of workers and completely understand the situation at Panorama. The reality that I was an outsider seemed to play a negative role however I turned the situation by saying that by being an outsider I can view the situation without any biasness which is an advantage to them. These all facts from my side did very well to the negotiation process and built the trust between us. Understanding the other side: The 2nd part of the process was listening and understanding the other party. I listened patiently to the other party and realized that real issues have not been the salaries and the workload. The more complains were related to being left isolated and invisibility of the top management. Although they were very important part of the company, they did not feel the same way. They were working as individuals rather than as teams and the sense of being part of teams and achievement were not present. The lack of communication with the office staff was also an issue because everyone was communicating on individual level and had their own issues and complaints regarding the whole process. Conveying top management views: After hearing the problems of the consultants, it came as a relief that the biggest issue of salary was not an issue at all. It was just used as an excuse to deliver all the other problems that consultants were having. After I completely understood their point of view I delivered the top management point of view by saying that they want to resolve the issue and they do not see you separate from the company or as freelancer rather you are very important part of the company. I also delivered the information that I have been given a freehand with regards to creating a model of solution for any problems that you come up with. Coming to an agreement: The negotiation process went really well as there was great trust and confidence level between the parties. Now was the right time to come to an agreement that creates win-win situation for both parties. The first problem was listed as being isolated, it was suggested that rather than consultants working on individual basis from now on, they will be divided into regional teams with a leader (depending on seniority) and they will report to him/her. The person will also be responsible for communicating with the top management regarding any issues. I than negotiated that salaries seem to be a mere problem as consultants are happy with the work and issues are non monetary. It was agreed by the consultant after a little negotiation. The third problem of communication with the office workers was resolved by coming to an agreement that consultant and office worker will meet once a month with their respective representatives to discuss any issues. This will cover the gap between them and also improve communication. Closing Down: The negotiation finished after the agreement were reached between the parties. It was a win-win situation as consultants achieved what they wanted and company did not give monetary benefits which was real issue considering financial situation of the company. Both parties resolve communication issues as well. Conclusion Trust in the negotiation literature has flourished for the past one decade. It has presented models and ideas on how a negotiation can process and what can be done to make it successful. Other factors such as clear communication, cooperative attitude and understanding the other party are also very important. However trust is the main part of negotiation and without the trust factor prevailing throughout the discussions it is very hard to reach agreements. The agreements that are made without the trust element are not based on win-win situation. The hypothesis presented above clearly illustrate that how in real situation trust can play a vital role in reaching win-win situation and satisfy both parties. However the above illustrated situation is just a hypothesis and negotiation process does not always go this smooth. The parties can show stubbornness and lack of trust at each other. However the best way to tackle the situation can only be by trust building. References 1. Batt, P. (2003). Building trust between growers and market agents. Supply Chain Management. An International Journal, 8(1), 65-78. 2. Bazerman, M., & Lewicki, R. (1983). Negotiating in organizations: Sage Beverly Hills, CA. 3. Bigley, G., & Pearce, J. (1998). Straining for shared meaning in organization science: Problems of trust and distrust. Academy of Management Review, 23(3), 405-421. 4. Butler Jr, J. (1999). Trust expectations, information sharing, climate of trust, and negotiation effectiveness and efficiency. Group & Organization Management, 24(2), 217. 5. Creed, W., Miles, R., Kramer, R., & Tyler, T. (1996). Trust in organizations. Trust in organizations: frontiers of theory and research, 16. 6. Docherty, J. (1999). There is no cookbook for crisis negotiation: A response to Stuart Wright. Terrorism and Political Violence, 11(2), 74-82. 7. Fells, R. (1993). Developing trust in negotiation. Employee Relations, 15(1), 33-45. 8. Kimmel, M. (1980). Effects of trust, aspiration, and gender on negotiation tactics. Journal of Personality and Social Psychology, 38(1), 9-22. 9. Lewicki, R., & Litterer, J. (1985). Essentials of negotiations. Chicago: Irwin. 10. Lewicki, R., McAllister, D., & Bies, R. (1998). Trust and distrust: New relationships and realities. Academy of Management Review, 23(3), 438-458. 11. Lewicki, R., Saunders, D., & Minton, J. (1985). Negotiation: Irwin Burr Ridge, IL. 12. Ltd, M. (2000). Building trust to develop competitive advantage in e-business relationships. Competitiveness Review, 10. 13. Stevens, C. (1963). Strategy and collective bargaining negotiation: McGraw-Hill. 14. Strauss, A. (1978). Negotiations: Varieties, contexts, processes, and social order: Jossey-Bass Inc Pub. 15. Zartman, I. (1978). The negotiation process: Theories and applications: Sage Publications, Inc. Read More