Introduction to Negotiation - Term Paper Example

 «Introduction to Negotiation» Negotiation has got a long history and has no universally agreed definition. This is a truly human characteristic because it is closely connected with speech, language and social aspect, including non verbal communication (Kennedy 2004:1). Thus, the main essence of negotiation is to reach an agreement based on mutual understanding between the parties involved. Negotiation can bring two parties together who have different, even completely opposite interests and enables them to reach an agreement that is acceptable to both parties involved. Negotiation can take place between intimate friends or even foes and some authors describe negotiation as a zero-sum transaction- what one gains, the other loses in which their version of the art of the deal is to give less than they receive (Kennedy 2004). More often than not, people negotiate because they value things differently. Bazerman (1992) concurs with this notion when he says that most negotiators talk about prices and they seldom talk about motivations which denote the value of the deal. Thus, most people prefer a win-win situation when they engage in a negotiation process with the aim of reaching an acceptable agreement by both parties. There are different styles of negotiation such as distributive, collaborative, competing, compromising, avoiding or accommodating among others. Against this background, this report seeks to critically analyse a personal action plan in the negotiating process, discuss the concepts of BATNA, reservation price, ethical and unethical behaviour in negotiation. It also seeks to outline the use of integrative and distributive negotiation as well as discuss internet based, rights based and power based approaches in the process of conflict or dispute resolution. The report details the critical steps that can be implemented in a negotiation process and a discussion of the ideal approach that can be taken in conflict resolution. Factors taken into consideration when preparing a negotiation Negotiation is a process and it is different from a one day event. Successful negotiators take into consideration various factors in the negotiation process as going to be discussed below. Some of the factors include the following: gather information about yourself and the other party, estimate their RP, know your BATNA, research other party’s BATNA as well as adopting a suitable style of negotiation (Kennedy 2004). First and foremost, gathering facts as well as the other relevant information related to the subject matter of negotiation is imperative as it works as a guideline towards the attainment of set goals to be achieved. As far as negotiation is concerned, the negotiator should have as much information as possible about the deal to be negotiated. A negotiator must also have personal information which comprises the strengths as well as the weaknesses to be better positioned to engage in a fruitful negotiation. Collecting this information is also vital in that it better positions the negotiator to know all the facts at hand that may be required to convince the other party to enter into an agreement. This also helps create awareness of the other party’s information about their operations. Negotiation for tenders for instance has to be approved by a board or other superiors in an organisation hence the need to be as authentic as possible so as to avoid taking a biased direction. This is based on a real life situation hence the need to reflect that the negotiation will be based on real knowledge about the particular subject. Secondly, the negotiator should first conduct a thorough research about his or her own best alternative to no agreement (BATNA). The main advantage of this approach is that the negotiator is endowed with the capacity to make bilateral concessions where necessary which will be based on the facts obtaining on the ground. This stage requires a holistic approach given that it forms the crux of the negotiating process. This helps the negotiator to be better positioned to visualise the attractiveness of the deal compared to the proposals offered. Knowing the other party’s BATNA is the other third factor that can be taken into consideration and is crucial in that discussions held will be based on the same magnitude of understanding where the negotiator can be in control of all the proceedings where necessary concessions can be made if there is need. Facts are clarified and the correct position is adopted and the negotiator is entrenched with the power to determine the course of action to take with regards to the attainment of the set goals. It becomes relatively easier to make an offering when all the required information is readily available since the negotiator is aware of the consequences of such action and the level at which an agreement can be reached which may or may not be compromised. The forth factor is that the strategic negotiation process should be influenced by the negotiators’ reservation price, (RP) which should not be conceded for the other offerings as this would weaken the negotiator’s position. RP is primarily concerned with roughly estimating the price at which it becomes unprofitable to do business. The negotiator should make considerable efforts to estimate the other party’s RP. In essence, negotiators are often concerned with a win-win situation hence the need to have a firm position when negotiating. Lastly negotiators have to adopt a style when they are negotiation for something. Whilst two extreme styles namely; the tough and soft approaches are widely seen as common in a negotiating process, the zero-sum versus integrative approach can be more accommodative since it can allow the negotiator to have considerable room to make informed decisions that are based on the responses from the other party. It is imperative to use persuasion in a negotiation process rather than threats as this would undermine the purpose of negotiating. This is meant to ensure that the negotiator can be able to convince the other party that promises made during the negotiation process can be fulfilled. BATNA BATNA is an acronym standing for best alternative to no agreement (Kennedy 2004:25). Thus, the more attractive your BATNA is compared to the proposals you receive, the more power you have and, the less attractive your BATNA is compared to the deal on offer, the less power you have. Thus, the BATNA is the crux of the negotiation process as it clearly defines the position of the negotiator in relationship with the proposals received for a particular deal. In order to come up with an appropriate BATNA, the negotiator should list what he thinks can be done in the event that he fails to reach an agreement. At times, it may not be easy to reach an acceptable agreement by both parties involved but a compromise deal can be made which can be acceptable to both parties. Negotiating parties may differ in their views but they would be interested in that particular deal hence the need for them to closely engage and see if they can reach a compromise which however should not disadvantage the other party. As far as BATNA is concerned, there is need for the negotiator to convert the most promising options into practical choices. In the process, he must be flexible and accommodative where for instance the offer is better than your BATNA, he can consider improving or accepting it and if the offer is worse, he may consider rejecting it (Kennedy 2004). The negotiator should always be on guard to exercise his BATNA if the other party will not improve their offer. It has always to be borne in mind that the BATNA is the best alternative to no agreement during a negotiation as this gives the negotiator the power to concede certain proposals or accept them. Basically, negotiation is meant to reach an agreement where something is exchanged for something that is valuable. It should not be one sided hence the need for the negotiators to have desired positions in their dealings. Reservation Price (RP) According to this concept, the negotiator can prefer no deal than to deal on worse terms (Bazerman & Neale 1992). At times a negotiator can come to realise that certain prices are unprofitable to do business. Of notable concern is that the negotiator must realise that he should not confuse a desirable with a truthful bottom line. There might be a tendency to overestimate the potential of the deal being negotiated and this can be misleading. In most cases, you are not yet aware of the full facts before you negotiate and the circumstances may suggest that your original reservation price is not obtainable. However, the negotiator must always make sure that he does not rationalise to surrender under pressure but can consider adjusting the RP as long as it does not compromise the quality of the outcome of the negotiation process. In some instances, the RP is established arbitrarily by the seniors of which going beyond this point might result in being sacked (Kennedy 2004). This likely impact can be discussed during the preparation exercise and a clear position about the RP has to be established. All the implications likely to impact on the RP should be diagnosed before the actual negotiation process so as to avoid an embarrassing situation where the negotiator can enter into agreements that are not in tandem with the overall position of the organisation. Ethical/Unethical behaviours in negotiation Basically, the term ethics is primarily concerned with distinguishing between something that is good and bad in the way individuals behave. On the other hand, business or organisational ethics refers to the values, principles and standards that operate within business and these attempt to make a distinction between something that is morally good from bad (Rossouw 2004). The bottom line when negotiating is this simple but very important question: Is it ethical to lie? It can be seen that both individual and organisational ethics are concerned with upholding the principles of honesty and truthfulness especially when negotiating in an endeavour to satisfy the needs of both parties involved in an acceptable way. Negotiating strategies premised on lies are bound to fail as they would be doubtful in the eyes of the other parties involved in the negotiation process. According to Tompson (2005), negotiation should be based on the principles of fairness and equality. Negotiation should not be based on biased pretences as this would compromise the outcome of the deal in question. Once the other party has discovered that the negotiator is lying, the end result of the process would likely reach a dead end as the chances of failing to reach an acceptable agreement will be very slim. Being truthful when negotiating is a virtue which cannot at all costs be substituted by lies. The behaviour of the negotiator plays an important role as far as the concept of ethics is concerned. It plays a crucial role in determining the outcome of the negotiation process. Taking a neutral but firm position is always advocated as it gives the negotiator a better position to make necessary concessions while upholding the principle of fairness and equity during the process. Where there is openness in the discussion, chances of reaching a mutual agreement will be very high since all the decisions reached will be based on common understanding. Distributive negotiation In a distributive negotiation, the party who gives an aggressive first offer is better positioned to gain positive results in this kind of negotiation since he or she has the anchor to direct the process given that some concessions can be made along the line (Thompson 2005). By virtue of anchoring on your aspirations not RP, the negotiator stands better chances of gaining room to make concessions and appear generous. This gives an advantage to the one who gives the first offer as there are likely chances of attracting the other party to go for the decision made by the other. If one is positioned to control the negotiation, there are likely chances that the outcome will be favourable to him as anticipated while at the same time appealing to the other party which thus leads to an acceptable agreement. In this distributive negotiation, making larger concessions early then smaller ones later signal that the first part to make the offer is getting closer to the RP which secures his intentions and purpose of negotiation. There ought to be bilateral concessions whereby the other party must also intervene so as to avoid a situation where one person is negotiating alone. As the name implies, this negotiation strategy is based on equal distribution of offers and concessions where both parties can agree on the process taking place. This strategy shows that there is involvement of both parties and an agreement can be reached by consensus. Integrative negotiation This type of negotiation is mainly comprised of parties that are searching for solutions where the negotiators have compatible interests (Kennedy 2004).In order to reach a win-win situation, the integrative approach will enable the negotiators to create mutual trust between themselves where sharing of information can be made possible by emphasising the commonality of interests especially in conflict situations. Thus, provision of vital information is important in that considerable gains will be achieved where informed decisions based on mutual understanding will be made. Essentially, the purpose of negotiation is to reach an agreement between two parties where there is no one who feels robbed and disadvantaged by the negotiation approach taken. By integrating the process, the negotiator tries to ensure that different ideas emanating from common interest are accommodated while at the same time trying to ensure the retention of the intended purpose of negotiating. Dictating everything to the other party is not encouraged as it defies the purpose of the negotiation process which is meant to create an acceptable agreement between the parties involved. There are likely chances of gaining useful contributions if both parties are equally involved where ideas and knowledge can be freely shared and can be debated upon. Something that has been agreed upon by the negotiators stands better chances of being adopted as an agreement. Internet based approach to conflict resolution Online negotiation is becoming more common and in the process creating some new solutions to the (same) old problems (Kennedy 2004). Without visual contact, preferably face to face contact, many non verbal features of communication are missing in the negotiation which assists in mutual understanding and are activated informally outside the negotiating room. According to this notion, the face to face scenario poses dangers of male dominance where one or two people do all the talking, initiate offers and demands and take responsibility of the process. Online communication removes this effect and parties involved can reach a mutual agreement without pressure. Procurement websites where business-to-business transactions take have shown that the use of internet based negotiation can cut up to 20 % procurement costs including the costs of face to face negotiations with the suppliers (Kennedy 2004). There are legal and insurance services where the parties can elect to negotiate online. The plaintiff and the business operator are bound by the terms and conditions of use of the service. With regards to civil actions, the parties save time and cost in correspondence of issues which may not be related to real value of the claim. This is a smart and quicker way of solving disputes where parties can revert to trial or traditional negotiation when they fail to agree. During the contemporary period, new information and communication technology (ICT) has revolutionised the ways of communication and doing business. The advent of the internet has brought about new features that make communication relatively easy and can reach a wide range of people located in diverse geographical areas hence this approach is more ideal in conflict resolution compared to the others discussed below. Right based approach to conflict resolution This entitles the negotiator’s interests to be protected in the case of default or some failure to meet the contractual obligations by the other negotiators. Failure by the other negotiators to pay in full what is owed gives you the right to claim what should be yours. This is very important especially in a licence agreement. The negotiator will be entitled to offer notice of reversion once he has discovered that there is default on the other part to meet the agreed obligations. However, this method is time consuming and is costly. This approach is more of physical confrontation where the parties involved will seek to outdo each other face to face. In as far as conflict resolution is concerned, this approach has got its own weaknesses given that the negotiators will be arguing from a legal perspective in whatever deal they might be discussing. The process will be characterised by dominance where the other negotiators will seek to subdue others for their own benefit. Indeed, the law is there to protect all the citizens equally, in some cases, it may be over exercised. There will be need to file law suits in the courts which is a costly exercise. Instead of focusing on the dictates of the negotiation, more time will be spent on people heckling each other. Power based approach to conflict resolution Each negotiator has the power over the other negotiators to the extent that he can induce them to do something they would not do and vice versa (Kennedy 2004). For instance, if you have a greater power ratio than unity (the costs of rejection are larger than the costs of acceptance) then you have bargaining of power. Of notable concern is that power is subjective. One may perceive his power according to many influences on his mind of some of them may be mistaken. This can be costly if one overemphasises the limits of his power. It can be noted that in true spirit of negotiation, an element of respect must prevail where the parties involved ought to have the courtesy to treat each other as equal. In a face to face environment, some negotiators may appear to wield more power by virtue of their physical structure and some might have strong voices over the others. This will clearly undermine the need to resolve a conflict should it emerge out of the negotiation. Some negotiators may try to assert their authority over their counterparts which will result in conflict and misunderstanding. Accommodative style of negotiation is my preferred one given that it tries to take into consideration the views of all parties involved. As the name implies, this style treats the negotiators as equal partners with the same power where no one party will yield too much power over the other party. This style is particularly aimed at creating mutual trust between the negotiators where sharing of information can be made possible by emphasising the commonality of interests especially in conflict situations. Thus, provision of vital information is important in that considerable gains will be achieved where informed decisions based on mutual understanding will be made. Thus, an accommodative style has strengths in that it tries to create a free and fair environment where different parties can engage without undue pressure or coercion. Decisions reached will be mutually acceptable since the purpose of negotiation is to reach an agreement between two parties where there is no one who might feel robbed by the other party. With this particular type of negotiation, all the people involved can freely interact and they can exchange their views without fear. Over and above, it can be noted that negotiation is a process which requires a holistic approach in order to attain the set goals. There is need to establish an RP then embark on a drive to establish the other party’s BATNA as the focal point of the negotiation process. Being a good listener and planning an opening offer are good recipes for success in a negotiation. Barriers likely to be encountered can be overcome if the negotiator has all the information required in making an informed decision which is not biased. It can also be seen that unethical practices such as lying when negotiating are not advocated as they compromise the outcome of the process. As far as conflict resolution is concerned, the internet based approach is more appropriate. During the contemporary period, new information and communication technology (ICT) has revolutionised the ways of communication and doing business. The advent of the internet has brought about new features that make communication relatively easy and can reach a wide range of people located in diverse geographical areas hence the aspect of face to face communication is removed since the other parties may yield unfair advantage over the others through instilling fear in the others. The accommodative style has more advantages over the others and is the preferred one when it comes to negotiation. Summary of the steps I intend to use to negotiate for a job The first step is that I have to make up my mind and decide on the particular type of job that I will want to get. In this case I will seek a marketing related career in a company that is socially conscious-one that upholds ethical principle in its operations. Making a decision about choosing a career is the first step that can ensure that I build a solid foundation when it comes to negotiating for the job. I will need to gather as much information as possible about the requirements of the job. I must have information about the field I intend to join. This is the most important part that determines the success of the negotiation that will follow in my job prospects. Just like the BATNA, this process forms a very important aspect of the negotiation process. I will also look for information about the exact organisation that can meet my requirements. Searching for this kind of information can be done through the newspapers or journals. In most cases, the prospective employer will be more interested in knowing why the applicant has shown interest in the company. This will help them select the best candidate so I will take every measure to research as much information about the organisation as possible. I can approach them with my resume in the event that there has been a job opening advertised. When looking for a job, it is important to go physically with the resume and present your case in a polite and diplomatic manner which shows maturity and professionalism. I will have to bear in mind that there are also other job seekers hence the need to focus on my strengths. I will try by all means to minimise my weaknesses though I may have some in order to present myself in a positive manner. I will present myself in the best possible way and try to show that I am knowledgeable about the job. At least a prospective candidate should show that he has knowledge about the job offered. When negotiating for a contract, I will put more emphasis on the interest of getting the opportunity to meaningfully contribute to the overall performance of the organisation that focus on aspects related to remuneration. References Bazerman M.H. & Neale M.A. ( 1992). Negotiating rationally. New York. Free Press. Kennedy G (2004). Essential Negotiation. London. Profile Books Limited. Kennedy G. (1997). Kennedy on negotiation. Gower. Aldershot. Rossouw D. (2004). Business Ethics: 3rd Edition. Oxford. Cape Town. Oxford University Press. Thomson L (2005). Developing a negotiation style. New Jersey. Prentice Hall. Thomson L. (2001). The mind and the heart of the negotiator. 2nd Edition. New Jersey. Prentice Hall. Read More