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Characteristics of Competitive Positional-Based Negotiation

Business communication has a key role to play in case of any business organization. Along with business communication, negotiation skills also have a vital role to play.  In the given case study, the general manager of United Beverages Pty.Ltd, Barbara Johnstone identified that the employees lack negotiation skills. However, before the employees are given the required training, it is essential to identify which types of negotiation skills are most appropriate for the company. In this assignment, two types of negotiation skills, namely competitive positional-based negotiation and problem solving interest based negotiation has been compared to identify the characteristics of each of the approaches. Moreover, the assumptions of these approaches have been highlighted along with the identification of the risks. The impacts have also been discussed in this assignment. The comparison highlights the best approach, most suitable for the United Beverages. Finally, recommendations based on the comparison of these two approaches have been included in this assignment. Based on the recommendations, appropriate training will be given to the employees, such that their communication skills, effective listening skills, along with the negotiation skills are developed, thus enhancing the business of United Beverages.   

Negotiation could be defined as a discussion that aims to reach a solution, agreed upon by both the parties (Steele and Beasor 2017). One of the most effective approaches to negotiation in business organization is the competitive positional-based negotiation (Corken and McGreevy 2016). The characteristics of this approach are as follows:

  1. This is the most traditional approach of negotiation (Dekker and Breakey 2016).
  2. This negotiation involves the negotiating parties to hold a rigid position in the negotiation (Görög 2016).
  3. Each of the parties negotiates to establish their idea and considers only their interest while involved in this type of negotiation (Lundberg and Janze 2016).  
  4. Each of the party starts the process of negotiation with an extreme position and tries to retain that idea, along with negotiating and making concessions (Dekker and Breakey 2016).
  5. One of the best examples of this type of approach is the negotiation between a customer and a seller. The customer has a maximum price which he can pay for a product, while the seller has a minimum price under which he cannot sell the product (Lundberg and Janze 2016). Thus, a rigid negotiation takes place in this case, each of them trying to establish their position.
  6. This kind of a negotiation is essential since this is the first kind of approach when two parties enter into a negotiation (Dekker and Breakey 2016).

In this kind of a negotiation, the process is considered as a competition among the parties in the negotiation (Dekker and Breakey 2016). One of the basic assumptions in the competitive positional based negotiation is that the negotiation is driven by the ego-centric interest of each of the parties (Görög 2016). Moreover, the underlying motivation by which this negotiation is driven is competition. For this negotiation, only limited resources are available (Camisón et al. 2016). However, the result of the negotiation or the negotiation itself does not affect the future. It is also assumed that the basic motive of this negotiation is a win over the other party, in the negotiation (Dekker and Breakey 2016). This approach of negotiation has a key role to play in any business organization.  

Though this type of negotiation is a traditional one, yet there are various risks of this approach (Dekker and Breakey 2016).  Each of the party in the process of negotiation is strongly biased towards the fulfillment of their interests (Lundberg and Janze 2016). Thus, the risks of confrontation are quite high in this case. Moreover, in order to ensure that each of the parties wins, the negotiation process might take place against openness as well as responsiveness (Dekker and Breakey 2016). Another major risk in this type of negotiation is that it is difficult to predict the exact responses of the opponents (Riskin 2015). These are some of the major risks that are faced while the competitive positional-based negotiation is used. These risks encountered might reduce the utility of the competitive positional-based negotiation approach.

Assumptions of Competitive Positional-Based Negotiation

This approach of negotiation might reduce the positivity in the relationships among the various parties involved in the negotiation (Dekker and Breakey 2016). This is because, each of the party in the negotiation is rigid to establish their point of view and the soul interests are kept in focus. Moreover, in order to establish the facts, confrontations are very common, thus having a strong impact on the relationships (Lundberg and Janze 2016). Effective business connections might be lost and the lack of empathetic understanding will result in degradation of effective relationships (Dekker and Breakey 2016). Thus, as seen above, though this is one of the most traditional methods, yet the risks of losing good connections are high (Riskin 2015). Moreover, in the spree of establishing one’s facts, openness to new ideas and innovations might be lost, if this method of negotiation is widely used in United Beverages Pty.Ltd.     

One of the most effective approaches to negotiation is the problem solving internet based negotiation. The main characteristics of the problem solving interest based negotiation are as follows:

  1. This approach is based on the understanding the interest of all the parties,  along with developing the best solution (Goldberg et al. 2014).
  2. The negotiation is driven by the mutual interests of all the parties, and hence the most optimized and feasible solution is searched for.
  3. The matter of negotiation is completely separated from the people with whom the negotiation takes place. This separation helps in finding the most appropriate solution, rather than being rigid on the interest of each of the party.
  4. Using this approach of negotiation, options are created such that there is mutual benefit and gain of all the parties in the negotiation (Dekker and Breakey 2016).
  5. The various alternative solutions are to be known, while the process of negation is in progress (Dekker and Breakey 2016).
  6. It is essential that each of the party knows the goal that they want to achieve.   

The assumptions in this approach of negotiation includes that both the parties understand the perception of each other. Since the problem solving interest based negotiation focuses on the best solution that takes care of the interest of both the parties, hence understanding all the perception is essential. Moreover, it is assumed that both the parties are empathetic towards each other (Andriessen et al. 2013). The motives of the other parties are not to be interpreted. Understanding of the matter of conflict is clear is also one of the basic assumptions (Dekker and Breakey 2016). Since the parties in the process of negotiation are aligned towards the achievement of the best solution, with the fulfillment of the mutual goals, hence, it is assumed that they are open for innovation and are less rigid than the competitive positional-based negotiation approach.   

One of the greatest risks in this approach is that, since the negotiation is for a win-win situation, the mutual interest of the parties might contradict each other. This will result in a win-loss situation (Dekker and Breakey 2016). Moreover, if the best solution is not fulfilling the interest of both the parties, then the best solution might be compromised. Since the main motive of this approach is to find out the best solution, hence the correct issue has to be identified (Pruitt 2013). The identification of the incorrect issue is not desirable. Thus, a major risk is faced if the issue of negotiation is identified incorrect.   Lack of determination of BATNA (Best alternative to negotiation) and WATNA (Worst alternative to negotiation) is also a major risk (Misztal 2013). Lack of these might result in the failure to determine the best possible solution in the negotiation.

The problem solving interest based negotiation has a positive impact on the relationships. Since this approach is driven by the mutual interest of the parties, hence the negotiation process has as strong impact on the mutual relationships of the negotiating parties (Felin and Zenger 2014). However, in contrast to the competitive position based negotiation, the business relations are enhanced in this kind of negotiation approach as the mutual interests are fulfilled in the negotiation approach. Thus, in any business organization, the use of the problem solving interest based negotiation is desirable. Along with the conflict resolution, enhancements of the business relationships are also witnessed in this approach. Moreover, since this approach is less rigid, both the parties are open for innovation and acceptance of the best solution (Dekker and Breakey 2016). Thus, positivity in the relationships are seen as a result of problem solving interest based negotiation.   

Risks of Competitive Positional-Based Negotiation

Thus, as seen in the above mentioned comparison, each of the negotiation approaches has its own characteristics as well as risks. For the United Beverages Pty. Ltd, among the two of the negotiation approaches, the most suitable is the problem solving interest based negotiation process. In the business world, this negotiation approach is the most effective one. The business relations are strengthened along with the solving of the business problems. Moreover, the risks in the problem-solving interest based negotiation are less than the other one, thus ensuring a positive outcome.  Moreover, the possibility of confrontation is also negligible for this approach, thus ensuring a positive business relation. Thus, the employees of United Beverages could be given training on the negotiation skills, with focus on the problem solving interest based negotiation, rather than the other approach. Along with this training, the communication skills are to be enhanced as well. Communication has a key role to play in the process of negotiation. Thus, communication skills of the employees need to be enhanced, in order to enhance the negotiation skills. Moreover, comprehensive skills are also to be developed and given training on.  This skill is essential for the development of the negotiation approach. The perception of the other party needs to be comprehended successfully, hence, training on the comprehensive skills are also needed. Thus, it is recommended that the training needs of the employees are identified, along with pertaining training on the negotiation skills, which is an essential skill in business communication. Effective listening needs to be practiced as well. Effective listening is essential for the understanding of the perspective of the other person.

Conclusion

Negotiation is an essential part of business communication. Negotiation skills need to be developed by the employees, such that they are able to carry out business communications and negotiations. This assignment highlights the importance of negotiation in any business organization. Two types of the negotiation skills that are widely used namely the competitive positional-based negotiation and problem solving interest based negotiation are described and compared with each other. The characteristics of each of them are highlighted, along with the assumptions of each of the approach. Various kinds of risks that are associated with these approaches are mentioned in this assignment. A comparison and in depth analysis of the two approaches, highlights the fact that competitive positional-based negotiation is less effective and useful than the problem solving interest based negotiation. Thus, the employees of the United beverages need to be trained on the negotiation skills, specifically the problem solving interest based negotiation. Along with the negotiation skills, the communication skills, the effective listening skills as well as the comprehensive skills need to be developed. Negotiations are meant to resolve the issues that have aroused along with conflict resolution. Thus, the effective training will ensure that negotiation in business is carried out successfully.  Thus, the general manager of the United Beverages could decide on which training needs to be imparted among the employees, such that the business is enhanced and effective communication could be carried out by the employees.   

References

Andriessen, J., Baker, M. and Suthers, D. eds., 2013. Arguing to learn: Confronting cognitions in computer-supported collaborative learning environments (Vol. 1). Springer Science & Business Media.

Camisón, C., Puig?Denia, A., Forés, B., Fabra, M.E., Muñoz, A. and Muñoz Martínez, C.É.S.A.R., 2015. The importance of internal resources and capabilities and destination resources to explain firm competitive position in the Spanish tourism industry. International Journal of Tourism Research.

Corken, R. and McGreevy, P.D., 2016. Organisations, people and policies: barriers to good negotiation in the NSW planning system. Australian Planner, pp.1-8.

Dekker, S.W. and Breakey, H., 2016. ‘Just culture:’Improving safety by achieving substantive, procedural and restorative justice. Safety science, 85, pp.187-193.

Felin, T. and Zenger, T.R., 2014. Closed or open innovation? Problem solving and the governance choice. Research Policy, 43(5), pp.914-925.

Goldberg, S.B., Sander, F.E., Rogers, N.H. and Cole, S.R., 2014. Dispute resolution: Negotiation, mediation and other processes. Wolters Kluwer Law & Business.

Görög, M., 2016. Market positions as perceived by project-based organisations in the typical project business segment. International Journal of Project Management, 34(2), pp.187-201.

Lundberg, M. and Janze, L., 2016. When Proving You Are Right Is Not Enough: The Relationship Between Emotional Intelligence and Interest-Based Negotiations Among Purchasers.

Misztal, B., 2013. Trust in modern societies: The search for the bases of social order. John Wiley & Sons.

Noto, C.G., 2016. Airport Capacity Allocation with Network Airlines-Regulation of Congestion Externalities under Imperfect Competition, with Vertical Product Differentiation based on Network Density Effects (Doctoral dissertation, University of St. Gallen).

Pruitt, D.G., 2013. Negotiation behavior. Academic Press

Riskin, L.L., 2015. Beginning with Yes: A Review Essay on Michael Wheeler's the Art of Negotiation: How to Improvise Agreement in a Chaotic World.

Steele, P.T. and Beasor, T., 2017. Business negotiation: A practical workbook. Routledge.

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