Negotiation And Influence: Discussion And Experience

Discuss about the Negotiation and Influence.

Negotiation is one of the most important characteristic that must be present in a leader. Leader are of various types, there may be political leaders, business leaders, social leaders, academic leaders and there can be plenty of such examples. The few qualities which a leader must possess are negotiating, compatible and obligating nature, persuasion power, strategic flexibility, patience, flexibility among others. The leaders are expected to have better control on situations and they are expected to be better equipped to deal with adversities, this is the reason they are placed as the leader as they are in a better understanding of leadership than the followers.

Successful Negotiation power is also important for people who desire to achieve success in career and in other fields. If the negotiating power is not effective enough the people who are competing would get competitive advantage and would exceed and move ahead in competition.

The situation described in this report is my experience of negotiation about buying a small business, which is a shop located at the downtown Sydney. The shop is an antique shop which sells various items which are having antique value. There were various bargaining zones in this situation for both the sides. The compromising factor for the business owner who is selling the property is the poor infrastructural condition of the business. Therefore the claiming value that he had set was quite high for the purchaser in all sense.

What did you learn about yourself or other?

The negotiation started off with the following situations. The shop was located in a very important and popular location in downtown Sydney. It had plenty of antique items and interesting items for collection. However the store was really small and had a number of infrastructural flaws which needed urgent repairs. The antique items in the shop was creating value for the shop. However there were conflict spirals because of the contradicting situations. Therefore there was plenty of chance to negotiate with the shop owner about the final price of the shop. There was expected win/lose outcomes for both the sides depending on who can successfully draw the negotiation on their own side.

I always had this idea that I was not good at negotiation and that I cannot influence people and draw the argument to my side. I always thought about possible Joint benefits about both the sides while negotiating. However in present business scenarios the ideal case should be individualistic interest and the maximum gains that can be derived from the particular negotiation in question. The business negotiations are of various types, some are of long-term relationship, and some are short-term relationship. 

What did you learn about yourself or other?

It is one of the important aspect of a negotiation to first understand the nature of a person in order to finally take the final decision about in what way a negotiation can be continued. Therefore in order to conduct a negotiation successfully it is necessary to ensure that the person negotiating understands human behaviour and nature well. Apart from that there is a necessity to know the various theories of negotiation in order to enhance the negotiation skills. The best negotiation happens when there is a win/win outcome for both the negotiation sides.

I learnt about myself that when there is need and when it is required I can push myself to ensure that I negotiate well and try to attain Best Alternative To a Negotiated Agreement (BATNA) if the best negotiated agreement is not achievable. I also learnt about others that everyone is very anxious to ensure that they get the best out of the deal and their negotiation gives the best result in their favour. I had prepared to negotiate after going through various theories and models of negotiation. Therefore this is also something about which I learnt in the process of negotiation. I was aware about the true nature of my capabilities of performing the various responsibilities properly because after I have acquired the shop after negotiation it was required that I will be responsible enough in running the business properly while producing profits and generating more revenue.

What did you do that worked well?  Why?

The negotiation started with the premise that the shop would be brought by me in onetime payment of the whole amount and the owner will not conduct any repair work or similar endeavours while handing over the property to me. This were the basic demands of the owner of the shop when he wanted to sell the property. However the demands of the shop owner had been impossible to consider without negotiation from the side of the buyer as many of the demands put forward were unreasonable not worth to be considered. In a negotiation there has to be a collective benefit that has to be considered and not unilateral benefits from one side of the negotiator. The targets of the negotiator from both sides of the negotiating table was to use tactics in order to influence the other side in accepting their demands.

The “contract zone model” proposed by Walton and McKersie states “In this model, each party in a negotiation has an aspiration zone of outcomes within which the final settlement, if" settlement is reached, will fall”. Therefore the situation was similar in this case where the shop owner who was intending to sell the property had his desires to alter the outcome as was his desire. “Within this context, the resistance point is often viewed as the most salient aspect. It determines if impasse will occur. By definition, parties will not enter into agreements that fall below their least acceptable outcomes”. Therefore I was resistant to accept the demands put by him. Though each side had the goal to maximise individual gain both the sides were carrying opposed/opposite interests.

What did you do that worked well? Why?

What I decided to do is to follow the process of investigative negotiation in order to ensure that the goals of negotiation that I have set is met. Investigative negotiation can be described as the negotiation process based on information. Malhotra and Bazerman states “Investigative negotiators—like truly effective salespeople—keep this focus top of mind. They also understand that constructing a value-maximizing deal often hinges not on their ability to persuade but on their ability to listen. In the end, negotiation is an information game.” Therefore the main attempt was to gather as much information about the relevant information about property related issues and then present these to the shop owner in order to establish that I know enough about the field and he cannot influence me or manipulate me. This worked out well. I had to keep knowledge about multiple issues, however I faced many negotiators dilemmas as well in the process of negotiation.

What did you do that did not work well?  Why? What would you do differently next time?

The thing which I believe did not well was the procrastination that I showed in completing the deal in proper time. I should have showed urgency while trying to ensure that the negotiation process ends in proper time and the deal closes with mutual gain offers. I should have sorted the priorities and preferences in order to ensure that the point of indifference is addressed and both the parties are getting their rights and the threats to the successful completion of the deal is eliminated.  The large demands that have been put forward by the shop owner had pushed the deal into a deadlock. I needed to ensure that there was trust creation among me and him so that the negotiation process opens up and we reach the Zone of Potential Agreement. In the article titled “HOW TO NEGOTIATE WITH POWERFUL SUPPLIERS” Paranikas et al., stated that “The quickest and least expensive way to redress a power imbalance is to offer the supplier a market opportunity that is too good to pass up in exchange for price concessions. Finding the right carrot can take some digging. If everything else fails, cancelling all your orders, excluding the supplier from future business, or threatening litigation—or some combination of those actions—may be the only answer, short of going out of business. These are truly tactics of last resort.” Therefore replacing the term purchaser with the shop owner shows that if I would have played a little hard on the negotiation process then there was a possibility of getting the deal closed faster and the shop owner could have been persuaded. The fact that the shop owner was giving me unreasonable demands is what could have used against him in order to ensure that he is intimated and offers to come to a middle point. I should not be the one to suffer and get the Worst Alternative to a Negotiated Agreement. The point where I could have been pushed to walk away should have been recognised by me from the very beginning. What I did was to give plenty of opportunity to the shop owner in asserting and stating his unreasonable demands which should have been diffused by me from the very beginning of the deal. Next time onwards I would ensure that I set my mind to put forward my final offer and do not entertain any last minute demand and also I ensure that me and the opposite party would sort out our trade differences and other differences from the very beginning. Every deal must be having its Limits and Time to be completed and the opening offers are valid till a point of time only. I would eliminate all information asymmetry in the process of negotiation and both the sides should be aware about the rights and limits of the trade deal that is offered by both the sides. 

What did you do that did not work well? Why? What would you do differently next time?

How did your experience and outcome compare to the predictions of various "theories" or "principles" of bargaining

There are various theories of bargaining and often I have found similarities of many of these theories to the outcomes of my own bargaining experience. The behavioural theory of bargaining states that the outcome of bargaining is dependent on the attitude and personality of the person conducting the bargaining. Two types of personalities bargaining are hard liners and the soft-liners. It is generally believed that the hardliners would get competitive advantage on the soft-liners in the process of bargaining. It was found by me that in the beginning of the process of negotiation indeed the shop owner being a hardliner was attempting to influence me and my decisions. I had to change my own stance in order to ensure that my own interests are recognise in the deal. The Game theory of bargaining states that “Bargaining games refer to situations where two or more players must reach agreement regarding how to distribute an object or monetary amount. Each player prefers to reach an agreement in these games, rather than abstain from doing so.” The monetary amount was unacceptable to what was demanded from me, however the person justified the demand by stating that the shop was located in a very nice place in one of the most popular spot in the whole area. What I understood from the style of negotiation of the shopkeeper is that he had traces of Chinese negotiating traits, the Chinese negotiators are “more concerned with the means than the end, with the process than the goal”. There is a difference between the style of negotiation in the American style and the Chinese style.

The integrative theory of bargaining states the process of win win bargaining or the interest based bargaining where both the parties are at positive gains from the outcome of the bargaining process. The goal to maximise joint gains is established and the convergent or congruent interest is established. The singe issue of the negotiation is the maximisation of profit of both the sides. Integrative negotiation is the best for situations where both the sides are interested in ensuring that the outcome of the negotiation process is valuable for both the parties. Interests, Rights and Powers of both the sides are maintained and recognised. The process of negotiation that I conducted with the shop owner to acquire the antique shop helped me go through various processes of bargaining in making the deal successful.

What did you learn about bargaining, conflict, and/or other concepts covered in the readings assigned?

The various readings that were required to be studied helped me learn a lot of aspects, principles and ideas about bargaining. The first reading titled “Reservation Prices, Resistance Points, and BATNAs: Determining the Parameters of Acceptable Negotiated Outcomes” by White and Neale explains in great deal the various theoretical perspectives of bargaining and negotiation which gives clear insights to the  person reading about how a bargaining can be completed successfully. The BATNA (Best Alternative to a Negotiated Agreement) is an important aspect of any bargaining process.

In the reading titled “How to negotiate with powerful suppliers” by Paranikas et al. starts by stating that “in many industries the balance of power has dramatically shifted from buyers to suppliers”, this is true in one sense because in the present age of outsourcing services and manufacturing processes the suppliers play a very important role in completing the business process. The various factors that is stated by the authors in order to ensure that the negotiation process is useful are as follows- “bringing new value to your supplier, change how you buy, create a new supplier and play hardball”.

In the “investigative negotiation” by Malhotra and Bazerman  the following principles are stated “PRINCIPLE 1  Don’t just discuss what your counterparts want – ?nd out why they want it,  PRINCIPLE 2  Seek to understand and mitigate the other side’s constraints, PRINCIPLE 3  Interpret demands as opportunities, PRINCIPLE 4  Create common ground with adversaries, PRINCIPLE 5  Continue to investigate even after the deal appears to be lost.” These 5 principle can ensure that the negotiator can successfully complete an investigative negotiation.

Bazerman et al., (2013) in the work “NEGOTIATION STRATEGIES  FOR WOMEN” has explained crucial aspects of negotiation process among women and what are the implications in such cases. It is held that women sometimes ask for less and presently the phenomenon of the Sandberg Effect and why the women are asking for more. “The average college-educated woman earns $713,000 less over the course of her working life than her male counterpart, according to the Coalition of Labor Union Women. What explains this persistent gender gap? Women employees’ awareness that they could be penalized for negotiating assertively on their own behalf is one factor, according to new research from Emily T. Amanatullah of the University of Texas at Austin and Michael W. Morris of Columbia University.” Therefore the women are now at a stage where the fear of a backlash is high because the women are now asserting their rights and equality back.

In “The Chinese Negotiation” by Graham and Lam states the differences between the American or Western way of negotiation and the Chinese way of negation. Among the Chinese the means  is more important than the end.

Conclusion

In conclusion it can be stated that the negotiation process is very important in order to ensure that the interest of the negotiator is maintained. When there is a negotiation which is problematic and both the sides are not agreeing to come to a mutually agreed conclusion various tactics can be used.

In my case by applying a hard-line negotiation I could successfully buy the property I was aiming and the negotiation process was successful and in my favour.

References:

Bazerman, Max., Blum, Gabriella., Bordone, Robert. et al., 2013. NEGOTIATION STRATEGIES FOR WOMEN. Harvard Law School.

Graham, J.L. and Lam, N.M., 2003. The Chinese negotiation. Harvard business review, 81(10), pp.82-91.

Malhotra, D. and Bazerman, M.H., 2007. Investigative negotiation. Harvard business review, 85(9), p.72.

Paranikas, P., Whiteford, G.P., Tevelson, B. and Belz, D., 2015. How to negotiate with powerful suppliers. Harvard Business Review, 93(7), pp.90-96.

White, S.B. and Neale, M.A., 1991. Reservation prices, resistance points, and BATNAs: Determining the parameters of acceptable negotiated outcomes. Negotiation Journal, 7(4), pp.379-388.