MANTISSA COLLEGEDAMANSARA

KUALA LUMPUR

NAME: AYANLEKE JULIUS OLUWASEUN

I.D NUM: BBM-F1308-0324

COURSE: NEGOTIATION TECHNIQUES

COURSE CODE: MG 425

LECTURER: MR. SUREN DEV

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Table of Content

Topic PETRO TRANS NEGOTIATION Page(s)

Introduction 2

Q1: Define parties and their goals and issues. 3

Q2: Compare and contrast the negotiation situation in these two branches. Culture

& ways of negotiation. How different do you see negotiation situation in these two countries? 4

Q3: Should company accept the requests? What is your suggestion? 5

Q4: Compare and contrast the negotiation techniques used for two different

requests. 6

Q5: What kind of preparations would you have for the negotiation meetings? 7

References 8

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Introduction

Issues of Quality of Work Life are becoming an increasingly popular concept in this age. It

basically talks about the methods in which an organisation can ensure the complete wellbeing

of an employee instead of just focusing on work related aspects. It is a fact that an individual

life cannot be divided into sections and any disturbance on the personal life will affect his or her

professional life or other way. Therefore, organisations have started to focus on the overall

development and happiness of the employee and reducing their stress levels without harming

the economic health of the company. Each organisation has its own way of achieving this.

However, organisation that does not integrate this care based system tends to lack best of

workers.

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Question 1

When parties enter into a negotiation process to resolve conflict, they will bring a certain

orientation to the table in their effort to settle the conflict. The two most basic orientations

people adhere to when entering into negotiations are cooperative or competitive. A

cooperative approach aligns with the process of interest based or integrative bargaining, which

leads parties to seek win win solutions. Disputants that work cooperatively to negotiate a

solution are more likely to develop a relationship of trust and come up with mutually beneficial

options for settlement. The mutual gains approach is considered a constructive resolution

process (David et al, 1986).

An employer is an organisation, institution, agency, certified firm, nonprofit association, small

business, store, or individual who hires a qualified person in the needed field of work. An

agreement is reached in exchange for the persons work or services, the employer or the

organisation pays compensation that may include a salary, an hourly wage, and benefits

according to the specified minimum wage in the country. An organisation or employer has

some certain goals and objectives they want to meet through the skills of their employees and

their first goal is to maximise profits, minimise risks, minimise cost of production or operations

and maximizing customer satisfaction, maximum utilization of human resources. The major

issue the company is having with both of its branches in the US and India is the recent strike by

the workers in these branches, seeking for quality work life and increment in wages and salary

but due to the global economic meltdown, the company could not meet their demands even

though it was presented in a disorganized manner (Arnesen and Eric, 2006).

An employee is an individual who was hired by an organisation to do a precise job. The

employee is hired by the employer after he or she has undergone certain test to see if they are

qualified for the post. In workplaces represented by a union, the collective bargaining

agreement covers most aspects of an employee’s relationship with the workplace. An employee

trades his or her skills, knowledge, experience, and contribution in exchange for compensation

from an employer. The goal of an employee is to be paid accurately and on time, adequate

training, safe working conditions, compensations and incentives, full description of all the

organisation policies and especially of their job responsibilities, and fair and positive feedback Page 3 of 11

from supervisor. Employees in these branches are having problems with their employer

because of the poor quality work life and the company inability to fulfill their promise on wages

and salaries increment because they know most of these things are not only reasonable, but

also are required by law (Arnesen and Eric, 2006).

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Question 2:

In the two countries where Petro Trans is facing these problems, the only similarities in their

ways of negotiation is that both of them is demanding for increase in quality state of work life

and their wages even if it is small. There is a vast difference in their ways of negotiation

considering difference in culture and beliefs. Here are some of the differences highlighted in the

box below by (Kopelman et al, 2008).

United States of America India

They establish rapport quickly and then move

in to the negotiation proper.

Negotiation in India is personal and they

establish relationships

They only look for mutual gains whenever

possible. They are more concern about the

outcome of the transaction. Some say little

gain is always satisfying to them.

They so much believe in win-win situation

because there is no fixed price in India. Both

parties negotiate on everything

Americans do not like full formality in business

negotiation. They believe forward movement

idea can emerge when the environment is not

so uptight.

Indians negotiations follow formal procedures;

the atmosphere is friendly and relaxed. To

them negotiation in a free environment will

make the enemy comfortable and

compromise.

In negotiation they are always direct and

straight to the point

Saying or usage of NO is harsh. They avoid it

by all means because they see it at as

disrespecting to the other party and it can

cause conflict of interest

United States negotiators expect quick They conduct business in a leisure pace. They

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decision and solutions; as they you must have

done your background research before

coming and have your target point in mind

do not believe in concept of time is money

In negotiation, individuals with relevant

knowledge and skills make decisions

Decisions are always made by the top

management of the team or organisation

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Question 3:

As the chief negotiator of Petro Trans, I suggest the company should accept their request but

before the intention of acceptance is made known, the chief negotiator must negotiate with

the workers union representative; first to know their resistance point and try to modify them

on the perception of their target because workers termination is not an option considering the

amount intangible resources and training that has been invested in them and the drastic drop

in production (Ury, et al 1999). Obviously, in this situation all they want is increment in their

pay and quality work life. As the chief negotiator, I need to make them understand that the

company cannot afford the percentage of increment they are asking for at the moment due to

the economic recession but there is going to be a certain percentage increase in their wages

and salaries and certainly quality work life will be improved by giving health care allowance,

safety at work, retirement packages and more enhanced working environment (Leigh, 2005).

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Question 4

As the Petro Trans chief negotiator, Lowball/Highball tactics would be used to negotiate the

requests by starting with a ridiculous low opening offer that they will never agree to and from

there, the company can re-evaluate the opening offer by moving close to their resistance point

or beyond the point (David, 1993). For example a labour management negotiation where the

union first offer was to request for 45% but after this tactics was applied, they both agreed on

15% increment.. Furthermore, management may tell the union representatives that if they do

not agree to the current that has been offered, the company is ready to close down and go out

of the business remembering them how hard to secure job couple with the present economy

downfall (Roy, et al 2010).

As the company chief negotiator, I would prefer to negotiate separately considering the

difference in geographical location, culture, currency, standard of living, labour laws and

regulations and economy. Negotiating separately is the best option in this situation even

though they are requesting for similar thing but because of the differences in culture, ideas and

customs which are always consider first in every international negotiation. In order for the best

outcome to be achieved, each branch must be addressed and well evaluated based on their

society. (Salacuse, 2003). Negotiating differently with the stakeholders in the two branches will

be helpful because of difference in their beliefs and the way things are done. For example in

India, they negotiate on everything because there are no fixed prices while in the US not

everything can be negotiated. In the US, many company engage in quality of work life for their

workers as is very important to them and recommended by labour laws as well as individual

right recognition, so they expect the same from Petro Trans while in India their standard of

living is not so high, collective benefits is still allowed and little things can still be over looked

which will be in the company favour. (Movius and Susskind).

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Question 5

As a negotiator, conduct some research about other company in the same industry, their wages

and salaries, packages for quality work life and the individuals involved in the negotiating. In

particular, find out about issues that can influence the other party’s outcome. Study the

company financial status because of the recession and how the outcome will affect the

negotiation, like payment terms and budgets, and about the information you still need before

you can begin negotiations. And most importantly, creation of strategy as a plan of action to

determine the best way of achieving the negotiation goals and outlining the tactics consider

beneficial. Effective planning help negotiators to be more focused on the outcome, logical and

more realistic. After all this research, development of BATNA is important (Morton, 1998).

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References

Arnesen and Eric, U.S. Labor and Working-Class History (2006). Vol; 32064, pp. 650

David L., James K., and Sebenius, The Manager as Negotiator: Bargaining for Cooperation and Competitive Gain (1986). New York: The Free Press

David C., Negotiation Tactics (1993).New York: University Press of America Incorporation

Howard R., The Art and Science of Negotiation (1982).New Jersey: Belknap Press

Kopelman, S. and Rosette, A.S., Cultural variation in response to strategic display of emotions in negotiations (2008). Special Issue on Emotion and Negotiation in Group Decision and Negotiation, Vol.17, pp. 65-77.

Leigh L. T., The Mind and Heart of the Negotiator (2005). 3rd Edn: Prentice Hall Publisher

Movius H. and Susskind L.E., Built to Win: Creating a World Class Negotiating Organization. Cambridge, MA: Harvard Business Press

Morton D., Cooperation and Competition, in The Handbook of Conflict Resolution: Theory and Practice (1998), 1st Edn San Francisco: Jossey-Bass Publishers

Roy J. L, Bruce B. and David M.S., Negotiation Techniques (2010). 6th Edn: New York: America. McGraw Hill International.

Salacuse, J. W. The Global Negotiator: Making, managing, and mending deals around the world in the twenty-first century (2003). New York, Palgrave Macmillan Publishers

Ury W., Fisher R., and Bruce P., Getting to Yes: Negotiating Agreement Without Giving in (1999). 2nd Edn: Penguin USA

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