Negotiations in Organization

An Assignment

On

Negotiations in Organization

Prepared for:

Dr. Muhammad Abdul Moyeen

Professor

Prepared by:

Anika Zaman Tasneem

MBA program 2015 (17th batch)

Roll No: 335

Stream: SIM

Department of Management

Faculty of Business Studies

University of Dhaka

Date of submission: 06 December 2015

1. Define negotiation.

Ans. Negotiation is an interactive process by which two or more parties attempt to resolve their opposing interests. It is a dialogue between two or more people or parties intended to reach a mutually beneficial outcome, resolve points of difference, to gain advantage for an individual or collective, or to craft outcomes to satisfy various interests.  There are some specific conditions where negotiation will achieve the best results:

• When the conflict consists of two or more parties or groups
• A major conflict of interest exists between both parties
• All parties feel that the negotiation will lead to a better outcome
• All parties want to work together, instead of having a dysfunctional conflict situation

2. Discuss the characteristics common to all negotiation situation.

Ans. Negotiation situations have some fundamentally common characteristics. These characteristics are applicable for any negotiation whether it is a business transaction or a political agreement. They are discussed below:

1. Two or more parties

Since negotiation is a process between individuals, within groups, and between groups, there has to be two or more parties involved. Though people can negotiate with themselves, it is considered to be an action that takes place between more than one individuals, groups, or organizations.

2. Conflict of needs and desires between the parties

Conflict prevails between the needs and desires of the parties involved in a negotiation and the parties must search for a way to resolve the conflict.

3.  Willingness of the parties

Negotiation is largely a voluntary process. The parties negotiate because they think they can improve their outcome or result, compared with not negotiating or simply accepting what the other side offers. It is a strategy pursued by choice.

4. Modify opening positions

Negotiation is as “give-and-take” process. Here both sides will have to modify or move away from their opening statements, requests, or demands. Although both parties may at first argue strenuously for what they want, ultimately both sides will compromise in order to reach an agreement.

5. Resolve issues themselves

The parties prefer to negotiate and search for agreement rather than to fight openly or take their dispute to a higher authority to resolve it. Negotiation occurs when the parties prefer to invent their own solution for resolving the conflict, when there is no fixed or established set of rules or procedures for how to resolve the conflict, or when they choose to bypass those rules.

6. Management of both tangibles and intangibles

Successful negotiation involves the management of tangibles and also the resolution of intangibles. Intangible factors are the underlying psychological motivations that may directly or indirectly influence the parties during a negotiation. Some examples of intangibles are

• the need to “win,” beat the other party, or avoid losing to the other party;
• the need to look “good,” “competent,” or “tough” to the people you represent;
• the need to defend an important principle or precedent in a negotiation; and
• the need to appear “fair,” or “honorable” or to protect one’s reputation; or
• the need to maintain a good relationship with the other party after the negotiation is over, primarily by maintaining trust and reducing uncertainty

3. When should you avoid negotiation?

Ans.  Sometimes a situation may arise when standing firm on the ground instead of negotiating is a better idea. Following are the situations when one should avoid negotiations.

1. When one may lose the farm.

If the situation is like that where one may lose everything it is better to choose other options rather than negotiate.

2. When one is sold out.

If someone is running at capacity, it is better to raise the price than to deal

3. When the demands are unethical

If the counterpart asks something that cannot be supported because it’s illegal, unethical or morally inappropriate, it is better not to negotiate.

4. When one does not care.

If a party does not have any stake on the outcome, he or she should not negotiate. S/he will have everything to lose and nothing to gain.

5. When one does not have time.

If the time pressure works against the negotiator,  s/he will make mistakes and may fail to consider the implications of his or her concessions.

6. When the other party acts in bad faith.

One should stop the negotiation if the other party shows signs of acting in bad faith. If their negotiation can’t be trusted, neither can be trusted their agreement. In this case negotiation is of little or no value.

7. When waiting would improve negotiator’s position.

If the odds are good that one will gain ground with a delay, it is better to wait. A new technology may avail soon or the financial situation may improve. So if another opportunity is coming one should wait long enough to take it.

8. When one is not prepared.

Negotiation should not be done without being fully prepared. If one is not ready, it is better to say “no” rather than losing a deal.

4. Discuss interdependence. How does it affect negotiated outcomes?

Ans. In a negotiation situation the parties need each other in order to achieve their preferred objectives or outcomes. When the parties depend on each other to achieve their own preferred outcome, they are

Interdependent. This need of depending on each other for a desired outcome is called interdependence.