Different Approaches to Negotiation
Read the following scenario and answer the questions below
Having completed an engineering degree, Rachael established a well-respected construction company in Australia called Mayfair Constructions. Having just secured a building contract for a new apartment building in Sydney worth $100 million, Rachel is in the process of sourcing building materials from overseas suppliers. One company that she is dealing with is an Indian-based external cladding company known as Sun-Set Constructions based in the capital of India, New Delhi.
After arriving in New Delhi and organising an initial meeting to negotiate the terms of the deal, Rachel found it very difficult to enter into discussions with the representative from Sun-Set Constructions, Mr. Omar. He seemed to be dismissive of Rachel, more interested in showing her the local sites of New Delhi and did not want to enter into formal negotiations about the price, volume and shipping of the external building cladding that Rachel needed to complete her construction project. Rachel is currently considering whether her trip has been a waste of time and whether future negotiations should be carried out via email when she returns to her Sydney office.
To make matters worse, Rachel has just received some preliminary reports suggesting that the cladding provided by Sun-Set constructions was actually the cause of a serious fire in an apartment block in the UK as the cladding is suspected to be highly flammable. However, further testing needs to be carried out to confirm these suspicions. The definitive scientific reports on the flammable nature of the cladding produced by Sun-Set Constructions won’t be available for over 12 months. If Rachel fails to complete construction during this time she will surely lose the $100 million residential building contract that she has just secured. Rachel is at a loss at what to do.
Remembering that you are an expert negotiator, Rachel has come to you to seek your advice on how to proceed with negotiations in the future. Using your knowledge of negotiation theory and materials, provide Rachel with advice on the following:
1. Using negotiation knowledge and theory gained in this course, what type of approach tonegotiations would you recommend Rachel to pursue with Sun-Set Constructions? Why?
2. If Rachel was to proceed with negotiations with Sun-Set Constructions, how can Rachelprepare for negotiations considering her lack of familiarity with Indian negotiators. Is there particular training and learnings she could undertake? Why?
3. What tactics should Rachel use in negotiating with Sun-Set constructions?
4. Are there any ethical considerations that should be considered in Rachel’s case? If so, using relevant ethical frameworks discussed in this course, what advice would you give her in attempting to address these issues?
1. Negotiation can be defined as a process of reaching an agreement between disputing parties (Perkov, Primorac, & Kozina, 2016). Communication is considered a key aspect in negotiation for the parties as a means to give offer and counteroffer. Some of the key elements to a successful negotiation include time, power and information.
Different theorists have given different school of thoughts on the approaches to negotiation. William Zartman categorizes approaches to negotiation into five namely; Strategic, structural, Integrative and processual approaches. Strategic approach refers to a scenario whereby scientific formulas and rationale are used to arrive at an agreement whereas structural approach considers negotiations as an outcome of features of negotiation such as the issue involved and the number of participants. In behavioral approaches, the character and personality of the negotiating parties determines the course of outcome.
Rachel should use behavioral approach in this situation. In an effort to describe this approach, Kelly & Kaminskien?, (2016), defines the qualities of a good observant as one who has high self-control, who does not get distracted by external factors such as frivolous amusements and deviations from the key agenda. They further describe a good observer as one who makes judgment and takes prompt measures with regards to matters on the table. They go straight to the point by taking the shortest most logical path for the purposes of realizing their goals.
2. Thompson Leigh (2005) identifies some of the ways of preparing for negotiations is to do a self- assessment, assessment of the other party you are negotiating with and an analysis of the situation. In self-assessment, one has to consider the agenda that is “What do I want to achieve” and “What are my options”. When describing, “what do I want”, Thompson describes the ideal negotiation scenario as one where there is clear identification of targets and aspirations. The major setbacks that might arise at this point include; under- aspiring negotiator who sets his target too low by asking something that is immediately granted over aspiring negotiators are those who set their targets too high and not willing to make any concessions while the grass-is-greener negotiators are those who really don’t know what they want.
A good observant needs to be of observant mind who refuses to be distracted from the main point by pleasures or amusements, a good judge of the situation who measures things as they are, and who goes straight to the goal by using the most apt route available. Integrative approach seeks to create a condition of mutual gain in a negotiation whereas procedural approaches, perceives negotiation as a learning process for each party.
Tactics to Use in Negotiation
Rachel will need training to help her in self-assessment, assessment of the other party and thorough analysis of the situation. This training will enable her to be a better negotiator.
3. Tactics can be described as a logical sequence of techniques that can be used to achieve a certain objective. In this scenario, Mr. Omar appears to be using delay, location of the negotiation and time constraint tactic so as to have the negotiations favor him. By dismissing Rachel and drifting her attention by showing her local sites, Mr. Omar is trying to divert Rachel’s attention so that she will not have much time to negotiate. Some of the tactics that Rachel can use in this scenario include use of agenda control and threats to be able to win his attention. By use of threats, Rachel needs to mention to Mr. Omar that she is aware that there are claims that the cladding supplied by Sun-set constructions was the main cause of serious fire in an apartment block in the UK since cladding is alleged to be highly flammable. On this regard, Rachel might pretend to seek for adjournment of the negotiation as she seeks to find out the details of the report.
Seiferle-Valencia, (2017), describes culture as that which distinguishes a certain group of people from another. In layman’s English, culture can be defined as the knowledge, beliefs, morals, laws, and customs shared by members of respective social grouping which shapes their behavior. Dynamic constructivist theory notes three points which culture plays a part in negotiators’ judgment that is availability, accessibility, and activations. Negotiation is a mixed-motive task where cooperation and competition are both central elements of negotiation. In this instance, supportive goals focus negotiators on integrative results or common value creation and competing goals direct the main aspects of negotiation. In the instance of cultural difference, both similar and competitive goals are different and can be predicted from cultural differences in goals and how negotiations are framed.
Culture tends to affect norms and thus determine the behaviours that negotiators will assume. Different types of communication to use in the scenario of culture difference. High context communication is where communication is done, not just by words or actions but also taking into consideration the context in which the words are communicated. This requires prior experience with the cultural meaning portrayed in various contexts. On the other hand, low communication is straightforward and requires some familiarity with words and actions but does not require any familiarity with contexts. In low context cultures, such as western cultures, persuasion appeals to rationality, and sharing of information is open and direct whereas, in high-context cultures, persuasion makes an appeal to rationality and information sharing is implicit and indirect. In this scenario, Rachel should use high context communication to be able to get a better deal from sunset.
Influence of Culture on Negotiation
Maintaining good ethics can help a negotiator to forge a good reputation. It is much easier to reach a win-win outcome when you have a reputation of integrity and honesty. On the contrary, unethical behaviors can make a party lose a negotiation and also build a negative reputation.
The choice of a communication channel is an important factor in a negotiation process and plays a role in determining the outcome. Some of the available channels of communication for a negotiator include; Face to Face Communication, telephone conversation, written communication, and electronic communication. Most negotiators might prefer face-to-face negotiations as it enables one each party to convey much information and allow for observation of multiple clues such as body language, facial expression, and tone of voice. Telephone conversations enables one to transmit social cues through inflection or tone of voice. Written communications such as the use of letters can be used to convey information both formally and informally through use of words and symbols. Electronic communication consists of conveying of information through the use of channels such as emails and fax. In this case, Rachael should use electronic communication as it will help to draw attention Mr. Omar to the negotiation and minimize chances of interruptions witnessed during the visit to New Delhi.
According to Pinkley et.al, (2017), one of the steps of identifying alternatives include use of the acronym BATNA which means Best Alternative To a Negotiated Agreement. This helps the negotiator to determine what point should s/he walk away from the negotiation table and also enables one to leverage on a bargaining position. Rachel should strive to find alternative suppliers whether in New Delhi or in Sydney so as to increase her power to negotiate and also to increase the number of options available for her.
4. The dictionary defines ethics as the rules or standards that govern the conduct of the members of the profession also known as the principle of right or wrong. Philosophers believe that ethics defines the nature of the world we live and do prescribe the rules of living together. Aristotle defined Ethics as that which is good for individual and for society which describes the nature of responsibilities that people owe themselves and one another. Ethical negotiations can be referred to as a process of guided transformation that do occur through dialogue exchange with an aim of having optimal agreements.
When a negotiator is choosing which tactics to use, he or she needs to evaluate whether the tactic chosen is “ethically appropriate” or “ethically inappropriate”. Ethical behaviours are believed to include; trust, relationship, fairness, reflection, honesty, and openness. According to Menkel-Meadow, (2018) suggests that at times, some form of dishonest behavior can be suitable for an effective negotiator. Information is considered a source of power in controlling negotiations. Since negotiation can be defined as the process of exchanging information in order to persuade the other party, dishonesty is considered an action which is unethical and not based on good faith. Various forms of lying that a negotiator such as; Misrepresentation of one’s position to an opponent, falsification, bluffing, deception and selective disclosure or misrepresentation of facts.
Ethical Considerations in Negotiation
Misrepresentation of position to the opposing party refers to a situation here a negotiator changes his or her ideal settlement so as to create a justification for the opponent to cede ground. Negotiators who make extreme demands are more likely to have opponents cede to demands and attain highly favorable settlements. Bluffing takes place when a negotiator falsifies his or her intentions in order to carry out some act so as to lure the opponent into concession. Bluffs tend to adopt false promises and false threats. Falsification occurs through introduction of false or incorrect information as though they were true deception of the situation, is an attempt to manipulate the opponent’s logical and inferential process, in order to sway the opposing party to an incorrect conclusion. In selective or misrepresentation to constituencies occurs in a situation where other parties other than the opponent are introduced into the negotiation. Negotiation party may misrepresent the events, which take place at the negotiating table to their constituencies, or at times may misrepresent the desire of those he is representing to the opposing negotiator.
In this case of Rachel, some of the ethical considerations she should make is to apply the ethical decision-making process as mentioned by Pettigrew, (2014), In this process, five contextual variables namely; the relationship with the other party; the relative power of the negotiator in this context Mr. Omar; whether or not the negotiator is acting as agent; the group and the organisational norms and lastly the cultural norms. With regards to negotiators being agents People acting as agents may be more likely willing to disregard individual or organizational ethical standards. On organization norms, it can be said that when ethical standards were given due consideration, negotiators were less likely to employ deception as a tactic, even when there was a strong individual drive to act otherwise.
Some of the factors of evaluating strategies and tactics Rachel can use include; personalistic ethics where she chooses a course of action based on her personal conviction; duty ethics whereby she chooses how to act on the premise of her duty to maintain appropriate rules and principles; Social contracts whereby she chooses a course of action with regards to the customs, values, ethics, and strategy of the organization or community in cognizance of the expected outcomes.
Hofstede, G. (2011). Dimensionalizing Cultures: The Hofstede Model in Context. Online Readings In Psychology And Culture, 2(1). doi: 10.9707/2307-0919.1014
Kelly, E. J., & Kaminskien?, N. (2016). Importance of emotional intelligence in negotiation and mediation. International Comparative Jurisprudence, 2(1), 55-60.
Menkel-Meadow, C. (2018). The Origins of Problem Solving Negotiation and Its Use in the Present.
Pettigrew, A. M. (2014). The politics of organizational decision-making. Routledge.
Perkov, D., Primorac, D., & Kozina, G. (2016). Business Negotiation as a crucial component of sales. Economic and Social Development: Book of Proceedings, 638.
Pinkley, R. L., Conlon, D. E., Sawyer, J. E., Sleesman, D. J., Vandewalle, D., & Kuenzi, M. (2017). Unpacking BATNA Availability: How Probability Can Impact Power in Negotiation. In Academy of Management Proceedings (Vol. 2017, No. 1, p. 16888). Briarcliff Manor, NY 10510: Academy of Management.
Seiferle-Valencia, A. (2017). Race, Language and Culture. Macat Library.
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