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Competitive Positional-Based Negotiation

Discuss about the Negotiation And Its Approaches.

Negotiation is the process by which individuals or groups settle their differences, disagreements and achieve best possible outcomes for them. This research is based on two approaches to the negotiation. These are Competitive Positional-Based Negotiation which is also known as competing ideologies (Hensher and Stanley, 2008). In this, there is always a “win-lose” situation of negotiation. The second approach is Problem Solving Interest-Based Negotiation is also known as cooperative ideologies; it is always a “win-win” situation of negotiation. In the following report, on the basis of recommendations given during the training need analysis conducted by, Barbara Johnstone who is the General Manager of United Beverages Private Limited. As per the general manager, there is lack of skills in the staff of company in undertaking negotiations. Barbara wants to know the best approach for negotiations which is appropriate for the company so that he could conduct training of the staff. In the report, there is a detailed explanation of characteristics of each approach; assumptions of each approach, risks associated with each approach and probable impact of the relationship of each approach. The recommendations and findings give the final picture to the best approach to Negotiation and the reason for this recommendation (Wong and Howard, 2017).

In this the process of negotiation is treated as a competition. It is a “Win-lose” situation in which parties have contrary interest. These processes is treated as win or lose which means one person is always in gain and another person is always on loss during the negotiation. The outcome of this negotiation is treated only in terms of winners and losers. All the negotiation is treated in financial terms only. This strategy further involves hard exchange and double dealings. It is also known as positional, hard bargaining or distributive negotiation (Mathews, 2018).

The characteristics are as follows:

  • Threats, tensions and pressures- In this kind of negotiation there is a lot of pressure on both the parties, so the pressure of losing is more than the happiness of winning.
  • Sticking to the positions- The winning person is always like to be in that position only and can do anything to maintain that position. This can ensure losing for other person.
  • Want clear victory- The victory or loss for both of the parties is very clear as losing or winning is the only option left with parties and everybody will try their best to ensure there victory.
  • High opening demands- The people who have the nature of risk takers expect a higher return. They can offer the price which can cause great loss to the other party.
  • Domination of one party over other- This win-lose situation had created domination as one party always win and other will always lose which creates a domination of winning party over losing party (Neuliep, 2017).

The assumptions are:

  • The gain of one becomes the loss of other- Due to the nature of the approach the gain of one person automatically becomes the loss of other.
  • Deal does not affect the material available choices for tomorrow- This is always considered as a very formal negotiation. This means everything is highly professional. This states that future availability is not affected by present choices.
  • Controlled by egocentric self-interest- In this, egocentric self-interest means that both of the parties wants to win and at the same time they want to satisfy their ego as well.
  • Limited Resources- It happens because one of the parties is sharing only that information which can create and increase their possibility of winning (Hargie, 2016).

The risks associated are:

  • Leads to rigidity- One change in the rule can impact the final decision of negotiation. It is very important to maintain rigidity in rules and all the rules must be decided in advance and with full consent of both the parties.
  • Disclosure of facts- This risk is related to the fact of disclosure of information. If any related information which needs to be disclosed is kept hidden it can create a huge impact in final decision making.
  • Bound to joint gains- In some of the cases where one party is more powerful than the other one, they would force the other party to bear the loss. It can lead to force on another party to convert that negotiation to problem-solving interest-based negotiation (Filippini, Koller and Masiero, 2015).
  • The threat to future relations- This kind of negotiation is very competitive in nature which can increase the domination of one party over the other. In order to save themselves from this domination losing party may cut off all the future relations which can cause negative impacts to both the parties.
  • Competition can increase the cost- The greed for win can create the extensive competition among both the parties which leads to creation of rivals. In order to protect them, they need to increase the security and confidentiality in the organisation. This can lead to increase in overall operational cost of company (Hua, 2015).

The impacts are:

  • Less importance to negotiation Parties- This kind of negotiation is done with the motive to earn more profit. There is less emphasis given to establishing relations with the parties and more importance is given to earning the profit.
  • Formal languages are used in communication- They need to use formal languages in the negotiation as both the parties want to gain as much profit as they can. This can make the communication more formal and rough.
  • Talk more and listen less- In order to gain more profit each party tries to make their point more clearly which leads to more talking about the problem and listening less about the issues.  
  • Winning party is always in domination to losing party- If this kind of negotiation is used for a long time and that organization has a history of winning all the negotiations, this creates a sort of domination of winning party over losing parties. Winning the negotiations implies the growth of the organization which can lead to increase in power.
  • Negotiator has the option of closing the negotiation by giving its final offer- This is done when the parties are too competitive in nature and they both are very strong competitors. In order to end the negotiation the negotiator can give its final offer and close the negotiation.
  • No bargaining take place- This kind of negotiation takes place on professional grounds only. The rules of negotiation are also set in advance so the chances of bargaining do not exist, as bargaining can create the chance for gain for both of the parties which create a win-win situation (Brett and Thompson, 2016).

 It is a “win-win” situation which is made to increase the joint gains, reasonable and open communication. It is basically cooperative in nature.  The outcomes expected are creative and durable solutions and improvement of relations. They have separation of people from the problems; the focus is always on interest not on positions, generating options for mutual gains, assurance of fair process and practice for direct communication. Initially, there is submission of proposals and problems defined as per in traditional bargaining and then both the parties solve the problems together (Starr-Glass, 2014).

Problems with Competitive Positional-Based Negotiation

The characteristics are as follows:

  • Focus on Issues, not on People or Positions- In this kind of negotiation the entire focus is on the problem not on the person due to which the issue is created.
  • There is the use of reasons rather than power- The reason for the problem is explained rather than focusing on who is more powerful. The reason behind this is the nature of the approach which states that there is no loss every party is going to gain something (Agndal, Åge, and Eklinder-Frick, 2017).

The assumptions are:

  • Common interest, benefits, and needs exist- The focus is on the solution determined which can create the benefits for every party.
  • Trust building takes place- It takes place as the solutions considered are obtained with full discussion and consideration of all the members.
  • Accurate exchange of information- Every party is going to gain something so there is no reason for the competition between the parties which increase the honesty in negotiation.
  • Discussion of all the facts needed to obtain a solution- This assumption states that all issues relating to negotiation have taken place while proposing a solution. It is assumed that decision has taken place with full disclosure of all the related facts and figures.
  • Problems are solved through knowledge and creativity- It is assumed that the solution of the problem is derived from knowledge and creative thinking as the decision making takes place only after the discussion with both the parties.
  • Mutual gain- The solution is derived with the motive of mutual gain which means that both the parties should get some of the benefit from the negotiation (Khadhraoui, et al., 2017)

The Risk associated is following:

  • The negotiator will be forced to adopt another approach- There is a high risk that decision will be in favour of one party and other will be forced to accept that decision.
  • The principal of disclosure of all the facts may not be the same for both of the parties- There is a huge risk that both of the parties will not disclose all the facts which can directly or indirectly impact the solution of a problem (Mnookin, 2015)

The impacts of relations of this kind of negotiation are:

  • Less importance given to opposing parties- Importance is always given to solving a particular problem not on the parties due to which the problem occurs.
  • The policy of talk less listen more- Focus is on solving a particular problem which involves listening all the facts available to study so that effective solution can be obtained.
  • Positive and friendly attitude- The motive of this negotiation is to solve the problem not to gain profit. This creates a positive and friendly attitude as both of the parties know that they both are going to gain something from this kind of negotiation.
  • Changes in the deal can take place even if there is a loss to one party- The change in the deal will take place only if that change is causing a certain amount of profit to both of the parties. If there is a possibility in which gives more profit to one party and other is on loss than that solution is not considered.
  • Readiness to cooperate and sacrifice- This happens because the focus is on increasing the mutual gains, not on individual gain (Linebarger, Enterline and Liebel, 2018).

In this report, a comparison of attributes of two approaches to negotiation is conducted. The approaches are Competitive positional-based negotiation and Problem Solving Interest-Based Negotiation (Katz and Pattarini, 2008)

The strategy for Negotiation needed in this situation is Problem Solving Interest Based Negotiation which is based on the “Win-Win” strategy for Negotiation (Wheeler, 2010).

This kind of negotiation is helpful for the employees of the organisation. In this, problem-solving is the main focus. This is the kind of skills which should be learnt by the employees of the organisation. The organisation is a beverage manufacturing industry and customer satisfaction is a major motive so the “Win- Win” strategy is the best for this situation. The employees must learn to find out the solution which can be profitable to both the organisation and the customers. They will learn new skills and the organisation will get more profit. Positive interaction among the employees will increase the team spirit, efficiency and motivation (Herbst, Voeth and Meister, 2011)

Conclusion

In the previous report, firstly in the introduction part the meaning of negotiation and the two approaches are defined and the reason for preparing the report is introduced. Then, competitive positional-based negotiation is introduced as a topic then its characteristics, assumptions, risks and probable impacts on relations are explained. After this the problem solving interest-based negotiation is introduced and in its detail explanation includes the characteristics, assumptions, risks associated and the probable impacts on relations are explained. Lastly in the findings and recommendations part the best approach which can be used for the negotiation with the major reasons for recommendations are determined.     

References

Khadhraoui, M., Plaisentm, M., Bernard, P. and Lakhal, L. (2017) The Impact of Marketing Skills and Negotiation Skills of Universities Technology Transfer Office on Technology Transfer Success. Journal of Marketing and Management, 8(2), pp. 38-46.Brett, J. and Thompson, L. (2016) Negotiation. Organizational Behavior and Human Decision Processes, 136(1), pp. 68-79.

Goldberg, S. B., Sander, F. E. A., Rogers, N. H. and Col, S. R (2012) Dispute Resolution: Negotiation, Mediation and Other Processes 6th ed. New York: Wolters Kluwer Law and Business.

Filippini, M., Koller, M. and Masiero, G. (2015) Competitive tendering versus performance-based negotiation in Swiss public transport. Transportation Research Part A, 82, pp. 158-168.

Herbst, U., Voeth, M. and Meister, C. (2011) What do we know about buyer–seller negotiations in marketing research? A status quo analysis. Industrial Marketing Management.40(6) pp. 967-978.

Hargie, O. (2016) Skilled Interpersonal Communication: Research, Theory and Practice. 6th ed. London: Routledge.

Hensher, D. A. and Stanley, J. (2008) Transacting under a performance-based contract: The role of negotiation and competitive tendering. Transportation Research Part A, 42(9), pp. 1143-1151.

Hua, Z. (2015) Negotiation as the way of engagement in intercultural and lingua franca communication: frames of reference and Interculturality. Journal of English as a Lingua Franca, 4(1), pp. 63–90.

Katz, N.H. and Pattarini, N. M. (2008) Interest-based negotiation. Journal of Communication Management, 12(1), pp. 88-97.

Linebarger, C., Enterline, A. and Liebel, S. (2018) Third?Party State Domestic Politics and Conflict Management During Interventions into Civil Conflicts. Social Science Quarterly, 99(2), pp. 744-761.

Mathews, M. (2018) Managing local supplier networks: conflict or compromise? Regional Studies, 52(7), pp. 890-900.

Neuliep, J. W (2017) Intellectual Communication. 7th ed. New York: Routledge.

Wheeler, M. (2010) Negotiation Journal. Negotiation Journal, 26(4), pp. 371-372.

Mnookin, R. (2015) Special Announcement: Leadership Transitions at Negotiation Journal. Negotiation Journal, 31(4), pp. 303-304.

Wong, R.S. and Howard, S., (2017) Think twice before using door-in-the-face tactics in repeated negotiation: Effects on negotiated outcomes, trust and perceived ethical behaviour. International Journal of Conflict Management, 29(2), pp. 167-188.

Starr-Glass, D. (2014) Internalizing cross-cultural sensitivity: reflective journals of migrant students. Journal of International Education in Business, 7(1), pp. 31-46.

Agndal, H., Åge, L.J. and Eklinder-Frick, J. (2017) Two decades of business negotiation research: an overview and suggestions for future studies. Journal of Business & Industrial Marketing, 32(4), pp. 487-504.

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