Group Five EnejaPetrit Mushi Spring 2008—Management 5638 Dr. 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. Behavior Deals with the relationships among the parties involved and their adopted style of communications. 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.
7 Questionnaire The 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?
8 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)
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!
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.
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.
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.
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!
Negotiation Relevance We put up the question “How relevant are these negotiations” and the answer was without a doubt “essential”. Below is the data that we collected:
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:
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 Business 2-Interdependence 3-Competition 4-Information Age 5-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 possibilities 2-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 Implications 1-Do you homework 2-Define your range: a-Know Your Target. b-Reservation point c-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 Trust b-Let the other parties know what your priorities and preferences c-Make package deals d-Make multiple offers 5-Establish trust and build a relationship 6-Create a Negotiation Strategy a-Know your limits and strength b-Try to understand your opponent c-Try to understand your own style thoroughly.
Understanding the Implications 7- When engaged in Cross-Cultural Negotiations keep in mind: a-Learn to analyze cultural differences b-Recognize that you are dealing with different concepts of power c-Avoid ethnocentrism (my way is better) d-Find out how to show respect in their culture e-Learn as much as you can about the culture f-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 interview 2-Negotiating your grade 3-Negotiating your committee members for your doctorate degree 4-Promoting your inters structure at your current job 5-Negotiate New agreements 6-Every Day Life!
References The Mind And Heart Of The Negotiator-Leigh Thompson Adler, Chapter 7, “Negotiating with Foreigners” PBS-Commanding Heights Episode 1 The battle of ideas PBS-Commanding Heights Episode 2 The agony of reform