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Negotiations

Group Five Eneja Petrit Mushi

Spring 2008—Management 5638Dr. Nan Muir Bodensteiner

This presentation focuses on negotiations in the business world, to what extend is used, on it methods and it overall impact it has on business.

What is Negotiations?

Negotiation is an interaction of influences!

The process of negotiations can be

broken down in three categories!

Process Behavior Substance

Process How the parties negotiate, tactics, the

necessary sequence of steps taken for the process to reveal itself.

Deals with the relationships among the parties involved and their adopted style of communications.

Behavior

Substance

Refers to the agenda, the issues, the options and the agreement

What role does negotiations assumes in business practices? Whether in our private, social or business

life, we all use some form of negotiation in our every day interactions.

We constantly negotiate for product, services or social positions. This interaction (negotiations) take a whole new form, dynamic and life of it’s own in the work place! All leaders, managers, executives are in a constant tag of war between themselves and other parties in determining what resource to allocate to whom, where and how.

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QuestionnaireThe questionnaire to respondents:

1-What types of negotiation do you engage in? 2-How do you negotiate salary with potential new

employees?3-Do you prepare before negotiations? If so what do

you do?4-In distributive negotiations: how do you slice the

pie? 5-In win-win negotiations: How do you expand the

pie?6-How did you develop your negotiation style?7-How important is it, and to what extent, do you try

to establish trust or build relationships in your negotiations?

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Questionnaire continued

8-What role do ethics play in negotiations?

9-At what stage in negotiations is it important to be creative and why?

10-How is negotiating with multiple parties, coalitions or teams different from negotiating one-on-one?

11-Do your negotiation tactics change when negotiating with foreigners? If so, how?

12-Have you ever had training in negotiation? If so, explain the training.

13-How important is negotiating in your current position?

14- What makes a good negotiator?

Participants John (Jackie) Spurling, Vice president

of Sterling Engineering Inc., P.E.

Joe Hill Q.A. Lab. Manager

Jim Ogg Manger at Halliburton

Operations Manger at Training Design Systems in Clear Lake

Negotiation Fields

As we found out in our research, negotiation was used in business dealings, financial transaction and dealing with people (coworkers, new employees, clients)

43%

29%

29%

Fields of negotiations

Financial People Bussines

Preparing beforehand

We had mixed results in our surveys. While the majority of negotiators took time to prepare before engaging in negotiations, a minority did not!75%

25%

Prepare vs. Walk-ins

Prepared beforehandWalk-ins

Expanding the Pie (Distributive Negotiations)

A good negotiator will find new avenues to sweeten the deal and increase profitability for all involved parties. In the surveys conducted I found that all parties actively pursued this bargaining method.100%

0%

Expanding the Pie

Creative NegotiationsStrick

Building Relationships

We asked how important is trust and building relationships to the hole process. What I found was that all of the negotiators relied on, fostered and encourage this approach to the negotiations.

100%

0%

Building relation and trust in ne-

gotiations

Building Relations Lack of inters in B.R.

Negotiation Training

While all of the interviewees had a very good idea of the role of negotiations in their daily business, most of them lacked preliminary technical or professional training on the subject.

25%

75%

Training vs. No Train-ing

Formal Training No Training

Ethical Behavior

In all our surveys I found that ethics played a major role in negotiating. Unethical behavior was unacceptable and had no place in negotiations in general!

100%

0%

Ethical vs. Unethical Behavior

Ethical Unethical Behavior

Negotiation RelevanceWe put up the question “How relevant are these negotiations” and the answer was without a doubt “essential”.

Below is the data that we collected:

25%

75%

0% 0%

Negotiation Relevance

Very important Important Some What important Irelevant

Negotiating in a multi-cultural environment

Globalization is a reality that we are faced on daily bases.

Different people, cultures, points of view and perceptions, this is the current business climate.

What works for the local folks and what is perceived as proper way of negotiating might be construed as very offensive in other cultures.

We asked whether or not they apply the same principles in negotiating in a multi-cultural party negotiation. The answers were very surprising:

75%

25%

Negotiating with Multicultural Parties

Same principles Different Principles

Understanding the Results Developing Effective Negotiation skills

has become an essential aspect of conducting business for executives, leaders and managers.

Here are some of the aspects in this process.

1-Dynamics Nature of Business2-Interdependence3-Competition4-Information Age5-Diversity

Negotiating in a Dynamic Environment In the analysis of the collected

data, I found that there was a genuine effort in expanding the pie, in creating new possibilities or just bringing up facts which where overlooked by the other party.

By doing so deals were sealed and agreements were reached.

Dynamic Nature Of Business The dynamic nature of business in today’s

world means that there is constant negotiation due to the constant state of flux. Now days there is no such thing “employee or employer loyalty”. Most of students, will change their job once they have completed this program.

Faced with this reality people have to: 1-Create new possibilities2-Integreate their inters with that of the party

involved with. 3-Realize that there will always be competition

within and among companies.

Interdependence In today’s business world interdependence is a reality that all

managers, leaders and executive have to deal with. In this atmosphere of conflicting inters structures, a good negotiator needs to know how to promote his inters while creating a win-win situation for all the parties involved.

Click to Play Video

Competition In the last decade competition for

market share has reached new heights. Few companies dominate the majority of the market, bringing new the meaning to the word “competition”.

Understanding that competition is part of doing business and finding a way to accommodate different structure of inters, while at the same time pushing your product, service or agenda makes a good negotiator.

Negotiating in a Competitive Environment In a post survey interview John

Spurling P.E. revealed that when negotiating with new clients, he would try to gain new contracts not by lowering the price but rather by emphasizing the quality and reliability of services his company would provide!

Usually this was enough to get the job!

Information Age

The technological revolution of the 90’s had a major impact on how business is conducted.

The accessibility and abundance of information have greatly and steadily increased.

A good negotiator should be able to discriminate through this ocean of information to retrieve the relevant ones, for successful negotiations.

Diversity

With globalization taking root in 21century, diversity is a reality which can not be disregarded.

The ability to deal and agree with different cultures, backgrounds, nationalities and way of communications is essential.

The problem is that it’s not easy to find a system generalized enough to communicate and specific enough to translate the specifics and details.

Negotiating in a Multi-Cultural Environment What I found in analyzing the surveys was that interviewees that

had all the power did not change their negotiating style while those who negotiated in leveled playing field (power was 50:50) did change their styles to accommodate the other parties. Below is a sample of how different the negotiating styles are between a Polish and American.

Click to play video

Understanding the Implications1-Do you homework2-Define your range:

a-Know Your Target. b-Reservation pointc-BATNA (Best Alternative To a Negotiated Agreement)

3-Engage I Distributive Negotiations (try to understand their BATNA)4-Engage in Win-Win Negotiations.

a-Build Trustb-Let the other parties know what your priorities and preferencesc-Make package dealsd-Make multiple offers

5-Establish trust and build a relationship6-Create a Negotiation Strategy

a-Know your limits and strengthb-Try to understand your opponent c-Try to understand your own style thoroughly.

Understanding the Implications7- When engaged in Cross-Cultural Negotiations keep

in mind:a-Learn to analyze cultural differencesb-Recognize that you are dealing with different concepts of powerc-Avoid ethnocentrism (my way is better)d-Find out how to show respect in their culturee-Learn as much as you can about the culturef-When in Rome do as Romans do

Remember: Negotiating should be more about creating new options and alternatives and coming out in a win-win agreement rather than using aggressive tactics.

Applying the Newly Learned Knowledge

The above information can be applied in:

1-Job interview2-Negotiating your grade3-Negotiating your committee

members for your doctorate degree4-Promoting your inters structure at

your current job5-Negotiate New agreements6-Every Day Life!

ReferencesThe Mind And Heart Of The Negotiator-Leigh Thompson

Adler, Chapter 7, “Negotiating with Foreigners”

PBS-Commanding Heights Episode 1 The battle of ideas

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