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1.1 An overview of business negotiation
As an integral part of nearly all people lives, negotiation is carried out or employed in all life aspects. This has resulted in the proposition of a considerable number of definitions regarding it. In general, negotiation is defined as a process of decision whereby two or more people/parties attempt to manipulate each other via a varying means of communication. The main purpose of the process is to achieve common interest as well as individual interests.
A considerable number of individual negotiate in their different role for instance, as business owners as well as employees. This type of negotiations is called professional negotiation done in the confines of professional capacity. This happens in different and all business levels at all time. In addition, negotiations take place between different organizations for reasons that are business related. In this regard, aspect such as professional negotiating is termed as business negotiations. Business negotiations are constructed in a way that buyer-seller negotiation form is established. The way negotiations are accomplished and its resulting outcome, actually have a great impact on business.
Different scholars have come up with two different types of negotiations using different terms to refer to them. The first type of negotiation is either referred to as win-lose, competitive, transactional or distributive negotiation. In this kind of negotiation, it is characterized by the insight that negotiation pie (negotiation issue) has a fixed size. In this case, a one party gain is a loss to the other party. Therefore, the negotiation looks like a competition between the two parties.
The other type of negotiation is referred to as integrative, relational, win-win or collaborative. In this kind of negotiation, the negotiating parties do not perceive a fixed negotiation pie size. Rather, it is expanded to incorporate aspects that are not thought of in anticipation of parties coming together and as a result, a relationship is developed. This kind of negotiation does not exhibit any form of competition, hence a considerable effort by the two parties is undertaken to ensure that they are both “winners.”
2.0 Negotiation context
Nearly all business negotiations are carried out in a context. Context in this case comprise of the medium used to conduct the context as well as negotiating setting for instance, physical location. The other important part of negotiation context includes negotiation pie. Time factors, such as deadlines and time pressures form part of the negotiation setting. Lastly, negotiations are carried out in a cultural context.
2.1 Medium of negotiations
Technological advances as well as growing interest in, for instance, electronic auctions, different scholars are considering negotiation medium. A considerable number of studies compare the existing negotiation media such as videoconferencing, face-to-face negotiations, computer-mediated communication, as well as telephone. It is established that negotiation outcomes and processes are greatly impacted by media richness. Concerning time used, face-to-face negotiations are more time conscious compared to computer-mediated negotiations. A comparison resulting in terms of virtual negotiations with face-to-face negotiations is that, negotiators tend to be hostile in virtual negotiations, since they hardly know each other.
Other advanced negotiating media such as NSS (Negotiation Support Systems) are utilized to counter the existing inefficiencies within the negotiation process. NSSs use leads to the attainment of more balanced contracts as well as high joint outcomes. Again, it allows execution of agreements within the shortest time possible. It is further established that, NSSs is more appropriate when a negotiator has negotiation skills that are conflict-oriented. For better creation and adoption of electronic NSSs contextual factors such as information, sharing plays a vital role. For instance, when negotiators have access to similar information the negotiation process ran in a smooth way.
Negotiation medium is also used as a way to alleviate cultural-related problems that normally occurs in negotiations. Further, it is established that, with electronic negotiations relationship between negotiation behavior and culture is moderated by technology. For instance, culture dimensions that hinge on social cues like power distance are less prominent in negotiations that are web based.
2.2 Negotiation setting
Surprisingly, existing research have little to do with the physical location as a negotiation setting. However, it is argued that location result in one party being favored than the other. Normally, a host company has a range of advantages, which include exercising a greater control over the process of negotiation. Despite the fact that, even the visiting party has some advantages, it is better to pursue a neutral ground strategy to avoid conflicts.
It is evident that, in times where negotiators negotiated for themselves, they are made less competitive by the time pressure, and therefore, a considerable proportion of negotiations result to an agreement. On the other hand, when they are negotiating on behalf of other individuals, an added competitive behavior result, this translates to low agreement proportion. High time pressures result in larger concessions. The resulting concessions are in consistent with the preferences of negotiator. Again, time pressure made the possibility of reaching a consensus a reality. Further research indicates that negotiators are less willing to reveal deadline time, this is they presume that it will affect their outcome detrimentally. However, other studies maintained that revealing deadline result in speedy concessions, hence better outcomes are generated for the negotiator.
2.4 Cultural context
Negotiations can be cross-cultural leading to an interaction of distinct cultures. A study on emotions between Chinese and Dutch negotiations revealed that the Chinese are angrier with themselves, more uncertain and more anxious compared to the Dutch, who are les quiet, less friendly, driven and felt more irritated. The Chinese are indicates high levels of frustrations whenever they are undertaking a role that is contrary to their culture. For Danes, negotiation is a time consuming process compared to the Chinese who did not. To both parties, network plays an important role in the negotiation process. Further, a research study established that a culture that have high collectivism levels spend a lot of time on positioning, planning and on non-task negotiations actions. In addition, cultures that have high uncertainty avoidance do not easily get to an agreement.
3.0 Negotiation strategies
Based on the four main principles of negotiation a strategy is established. First, in any negotiation process a separation of relationship issues is vital. Individual problems such as emotion, communication, and perception should be dealt with separately. These problems should be dealt with separately.
Secondly, the needs as well as interests of the individuals should take a centre stage rather than their positions. This is because individual can take extreme positions and stubbornly hold to them firmly; hence, a counter response may be experienced.
Thirdly, the invention of options for mutual gain is useful when negotiating a dispute given that party’s interests are addressed. The solution should be win-win for both parties.
Fourthly, negotiators should insist on objective criteria. This will greatly help them come up with a decision faster, hence, simplifying the process of negotiation. For a better negotiation to be attained, parties should be aware of available alternatives. This will limit the chances of reaching worst agreements or reject far better agreements. Fisher, Ury and Patton maintain that it is of essence to know and improve an individual BATNA before one concludes a negotiation.
4.0 Negotiating techniques
4.1 Positional bargaining
This refers to a technique used for negotiations that rely on successive giving up and taking of positions, for instance, two parties haggling over an item price. Even though positional bargaining can be used with success, its outcome may not be satisfactory and efficient, since it is unlikely to result in a solution that is peaceful. Negotiators a time lock into positions leaving little consideration of both party interests. They feel that any amount of comprise will lead to a losing face.
Positional bargaining generates incentives that halt settlement. It is more of a battle than a joint effort of producing a solution. For this case, any agreement reached at indicates split of differences other than creative and careful development of a solution that is mutually beneficial.
4.2 Principled negotiation
This refers to a negotiation technique, which applies an interest-based approach during negotiation. It has four accompanying principles as outlined by Fisher, Ury and Patton in their book “Getting to Yes” which includes; separating the people from the problem, focusing on interests, not positions, inventing options for mutual gain and insisting on objective criteria. The approach is useful in all disputes; therefore, it is a perfect tool to use in a considerable number of disputes. However, it can be utilized with the company of other relevant approaches whenever intractable conflicts are encountered. The approach is rampant in cultures where emphasizes is given to rational cost benefit analysis (CBA) and emotions and relationships importance de-emphasized. Principled negotiation is less useful for cultures that consider relationship aspect to be taking the centre stage in any conflict.
When people are in conflict, it means that they are in a struggle with each other due to their opposing needs, their different values, and beliefs. Conflict is common in most organizations; it can be between employees or between the employee and management. When conflict or constant disagreement is always present in a company, the performance of the company and the motivation of the employees may deteriorate. Therefore, it is very important for companies to know or come up with models that will address these issues of conflict in an effective way to set the company back in its direction.
One good means of fighting conflict that has been known to work is use of negotiation.
Negotiation is a mode of resolving conflict where the two parties involved come to a compromise after having discussed the issue that may be causing them conflict. For example your roommate may love to play loud music while you love your silence. Here a compromise can be reached where the roommate can listen to their music at a low volume and you can read.
Although people come to a compromise after negotiations, it is clear a party loses while one other wins. Nevertheless, effective negotiation should leave the two parties feeling that they all gained, it should aim at problem solving rather than determining who won and who lost. This essay will show a model that can be used to resolve conflict by use of negotiation.
The first step in any model that you choose to use in solving conflict or disagreement has to be the identification of the problem. In this stage, you have to clearly identify the conflict or the disagreement. The parties involved are also pointed out at this stage. This is important because it is hard to solve a problem that does not exist. For effective conflict, solving the result of the negotiation can be defined during this stage. The parties involved in conflict are asked to state what they expect or the results that they anticipate when the conflict is resolved.
a) Define the outcomes
At this stage, one has to define the expected results from the negotiation process. The point here is that one has to aim at attaining a situation where the both parties will come out as winners and the problem will be resolved. It is at this point that you also work out what you want out of the negotiation process of solving the conflict. It can be maybe, to ensure that the parties remain in good terms or to make sure that the parties continue respecting each other and stay in good terms. Therefore, efforts should be directed towards this stage because if one does not know clearly what direction they are headed then there is no need to continue with the process.
b) Understanding interests
At this stage, there are different interests that have to be considered. The interest of the one who is trying to resolve the problem and the interests of the parties have to be carefully considered. This model is suitable for people in management or for supervisors who are out to resolve conflict that is present between employees who are working under him. It is important then for the manager using this model to clearly differentiate his interest and those of the parties.
For the involved parties; the parties have to carefully consider the other person's needs during the conflict resolving process. They have to consider that they will continue working alongside their colleague after the conflict is resolved. They should therefore aim to getting to a situation where everyone wins and where they are all at peace to continue working with each other. Some of the signs that the parties should look put for to make sure that the other party is in agreement with the negotiation process can be the language they are using. If they keep starting sentences with 'I', then this process of resolving conflict may not be headed in the right direction. Other signs can be whether they look agitated or do they keep giving close-ended answer. The presence of this signs might show that the negotiation process is not headed in the right way.
To effectively solve the conflict or the disagreement at hand, it is important for parties to continue attacking the problem and not each other. Their feelings should not hinder the process and their judgment toward each other should be minimized. For the manager who may act as the mediator between the parties they should watch out for this signs, try, and intervene where necessary so that they can ensure that the negotiations are moving towards conflict solving.
The interests of the mediator or the person overseeing the negotiation are also to be considered. What does the mediator aim at gaining from the negotiation? For most, it is usually to resolve the conflict and for things to go back in order so that, the operations of the company can resume well. They also aim at learning why such conflicts occur so that they will be in a position to avoid the reoccurrence of this situation in the future.
c) Brainstorming options
In this stage, possible solutions must be sort from the parties. Here the parties involved should be careful not to jump for only one solution or the easiest solution available. Creativity of various options should be encouraged and parties should end up choosing the right option that will help the conflict be solved and leave them both as winners. These options should be obtained from the two parties and no party should be seen to dominate in giving the solutions, because the solution arrived at may end up working for him and not solve the conflict. Options brainstormed should be for the mutual gain and not personal gain.
d) Evaluate the options
At this stage the different option are evaluated against a certain criteria. Most criteria that are used are by considering factors that are external to the parties. This factors can be it the option in accordance with the law? Is the option in line with the company's ethics or is it going against these ethics? This factors help in getting the best solution that works for the two parties. At this stage an outside mediator can be hired, this person must be respected and has had some experience.
The parties can be allowed to argue in favor of the option that they think is the right decision but caution must be taken not to allow room for them to manipulate the other party into accepting some option as the right one. In evaluating these options, signs can be observed on how the different parties react to certain options and this signs will eventually help in choosing the right option that will work for both parties.
e) Decision on a solution
This is done after careful evaluation has been done and finally a solution can be made. This solution must be for the mutual gain of the parties. After the agreement is made one can observe the parties to see whether they were satisfied or not. A common sign can be; did the parties look happy? Did they show signs of contempt after the solution to the problem was announced? This signs are important because they will determine whether the whole process will have to be re-conducted to avoid another conflict. One can also be able to determine if the conflict will occur again.
One of the major problems that this model may face is if one of the parties involved in the conflict was more powerful that the other, for example a conflict between an operation manager and a level one subordinate. This may render the model useless because the strong party may not see the need to resolve the conflict and they may not be willing to be involved in negotiations. In addition, if they were to agree to be involved in the negotiation they may end up getting their own way any way because they will tend to intimidate the other party. For such cases, it is important for the parties to get an outside mediator who will neutralize the situation and who will not favor any side of the conflict whatsoever. These mediators must understand the need for the negotiations is to bring mutual gain to all parties when he or she decides to undertake the negotiations.