Negotiation Overview, Research Paper Example

Negotiation skills are imperative in business because every transaction and every decision that is made is a compromise between multiple parties to mutually benefit everyone involved.  These negotiations are intended to have all groups meet a certain understanding to resolve a conflict and to craft an outcome to satisfy the needs and wants of all the parties.  The skills for negotiating are tools used by the negotiator to try and gain an advantage in the process to provide the greatest good to their interests.  There is a basic formula for negotiation that comes in three parts.

1. Recognizing Conflict
2. Stating Claims
3. Concession Points

In recognizing conflict, the sides of the negotiation table have conflicting desires.  An example would be a union negotiator asking for increased pay wages and increased vacation time.  The corporate side of the table sees these as cost increases to doing business and would like to keep them as low as possible while still maintaining the skilled workforce it needs to perform the functions necessary.  This leads into the second portion regarding stating the claims.  In order to provide a solid stake into each party’s negotiation requirements supporting information must be included to back up the wants and needs of each side.  In our example the union leaders would compare and contrast market trends in pay and vacation and its corollary effect with skill level among the industry and corporate would retort that the market could only support so much and that their business is in line with industry standards.  These inputs result in either or both sides altering their negotiation claims and conceding to certain areas.  The compromise can lead to a successful negotiation execution where both parties are mutually beneficial from the process.

The amazing thing is that everyone is a negotiator in some form or fashion.  In everyday life people negotiate in business dealings.  We negotiate bed times with children, prices for sweaters at a swap meet and even the type of service we get from waiters or technology service provides such as internet or cell phone.These may not seem as important as negotiating a peace treaty with multiple war torn nations but it does involve the same core negotiation skills.  The first ideation of negotiation conjures up the thoughts about the hard-nosed salesman or the pushover purchasing a new car.  These are hard and soft negotiation types. The soft negotiator makes concessions and recedes on his or her initial bargaining requirements to maintain peace and conjecture while the hard negotiator takes full advantage of the negotiation encounter and equates the interaction like that of a battle in a war in which the parties end up just as those countries after war with ravaged and dissatisfied people and a damaged or destroyed relationship between the parties.

The most common form of negotiation would be positional bargaining.  In this form the parties take a stance on their negotiation requirements and fight for position.  Each side is expected to give a little to get a little.  This could be beneficial for both parties but this could lead to stalemates and negotiators focusing on what they are giving up instead of what benefits are gained as a whole from the negotiation.  Next we can delve into the different styles of negotiation and how they deal with collective bargaining agreements and contract negotiations.

Distributive Negotiation

In distributive negotiations the main focus is that there is a limited resource involved with a finite amount of the resource that can be distributed throughout the parties involved.  Many people refer to this type of negotiation scenario as “fixed pie” because there are only so many pieces of the pie to distribute.  Examples of this type of negotiation would be buying a home or vehicle.  In distributive negotiation this may be the only interaction you have with the parties involved.  Conversely, in regard to interactions, integrative negotiation joins the parties into a cooperative team.

Integrative Negotiation

The integrative negotiation focuses on cooperation and joining together to form a synergistic team to benefit from each other.  This requires the parties to have a higher level of trust that that of the distributive negotiation.  The parties will walk away from an integrative negotiation feeling successful in gaining what they needed from each other.

For negotiation skills and strategies we can view a quadrant chart taken from “Negotiation Conflict Styles” authored by Calum Coburn.

In negotiations there is a time and place to use all of the different type of negotiation conflict styles.  Starting with the top left we have competing.  Just as the quadrant states “I win, You lose” is what the competing section is all about.  The negotiator is only out for their needs of the negotiation and are willing to do what it takes even if other suffer as a result of the process.  This type of mentality is highly useful if results are needed as soon as possible.  The downfall is that if both parties are utilizing a competing strategy it could result in a deadlock with neither party gains ground and both parties lose out on the interaction.

On the exact opposite side of the spectrum is the accommodate style.  This style not only is a polar opposite as compete in verbiage but also in the area in which the negotiator focuses.  In the accommodate style (I lose, You Win) relationship is paramount.  This negotiation tactic is good when one side is at fault and the relationship needs to be rebuilt.  This is sort of like extending an olive branch to an enemy.  The downside is that when using the accommodate style you are giving up position by showing they you are willing to give up value.  The other downside is that if the other party is competitive the generosity will be shown as a weakness and become an advantage of the other party.

Avoidance is a passive aggressive method in which both parties lose.  Avoidance is used by people that do not like conflict, which in reality conflicts with the point of negotiation.  Negotiators with a high compete mindset will cause avoidance negotiators to avoid them at all costs.  This will result in fewer interactions between negotiators resulting in less than optimal results.  The best time to utilize avoidance is when the areas of concern have little or no impact on the business or negotiation outcomes.  Avoidance could also be used in a slightly more devious manner in which the negotiator avoids the other party until the last day of the sales period (month, quarter, or year) to ensure a sale so that the other party can meet their metrics and have a successful business cycle.  The downfall of this method is that the person with the most urgency will end up compromising their position.  Avoidance could also pursued your negotiation party to seek other interactions resulting in business for your competitor.

And now for compromise which both parties win some and lose some.  Compromising is in essence haggling.  This involves pushing back on requirements on both sides to meet a mutually inclusive and beneficial deal for both parties.  The best time to use this is when time is an issue and a trustworthy counterpart is on the other side of the negotiation table.  This style does not necessarily provide the best option for both parties because compromises the positions of both parties.  Normally in a compromise situation the negotiators start with outlandish positions in order to negotiate down to what they really want or need.  Greater opening gaps between parties can and do result in deadlock.

Collaboration is in the center of the diagram.  Sometimes the collaboration style and compromise style are confused but they are different in outcome and in nature of negotiation.  Collaboration is a “Win/Win” situation for the parties involved.  Collaboration is about making sure that all the parties involved have meet their needs and that mutual value is generated from the interaction.  Under most circumstances the collaboration style should be used due to the fact that the ultimate goal is the grow value.  The pitfalls of collaboration are being able to understand who you are negotiating with and what type of negotiator they are.

Competitive negotiators must have strict guidelines in the form of written contracts so that they hold up their end of the bargain so that they live up to the rules of the negotiation.  When information is traded it is imperative that information is traded equally among parties so that an unfair advantage regarding data and information does not arise mistakenly.  Collaboration also tends to take more time and effort to put ink on the deal because of all the moving parts involved regarding the benefits of both parties.

So now that some of the basics have been covered how all of the negotiation styles and tactics reflect and impact labor relations and collective bargaining contracts.  Collective bargaining agreements includes the process of negotiations between a company and a representative of a unit or group of people in which both are concerned in reaching an agreement regarding work conditions (Holley, Jennings, Wolters 2009).  Each negotiation is unique between companies but collective bargaining fall into two categories previously described such as distributive and integrative.  Through the negotiations of a collective bargaining agreement there are some topics that come up that benefit from two parties being on the same page and having established goals and objectives in mind.  The collect bargaining scenario is interesting because both parties know that they will continue to interact with each other in multiple instances both within the current negotiation process but the entire process will repeat itself over the course of years to come by the very nature of contract negotiation.  This creates a type of bond based upon interdependence and social interaction of the negotiation teams.  Each dispute arising from conflicts between management and the union (employees) regarding terms and conditions of employment are interest disputes which need to be resolved in the collective bargaining agreement.  Since both parties understand they this is more of a long term relationshipand that they will be working in not only their daily job functions together but also in future negotiations their strategic tactics, objectives and goals are slightly different that those negotiating the price of a car in which there is a one-time negotiation.

Defining success is more involved than a quantitative dollar amount paid to the employees. The results are both objective and subjective in nature.  One way to measure success would be to compare the outcome to that of the industry average for wage increases and see how the negotiation measure up to that standard. Another way would be to reflect on how the teams built their relationship and how each team worked toward to best for both teams ensuring the best outcome for not only the employees but also the business as a whole.  Both union representation and business representation can ultimately announce they were successful in their negotiations depending on the key metrics or areas of concern they were negotiating.

In order to be prepared for a negotiation both the company and the employee representative should have the essential information such as financial documentation, cost of living adjustment data, industry standards and comparisons, data from grievances, prior year negotiation details, legal consideration and details from human resources on employee climate.  With both sides ready for negotiation the next step would be to get together and start the negotiations.

Some strategic tactics needed to implement a successful negotiation include:

• Realistic objectives
• Clarity of requirements from both sides
• Open with clarity on the intent to negotiate and the search for a win-win proposal
• Share data/information on why the contract requirements are important
• Involve both sides into the solution
  • Brainstorm
  • Alternative Ideas
• Define areas of interests and those areas that conflict
  • Begin with interests which sets the foundation of the negotiation
  • Use previous accomplishments to promote bargaining with harder points of interest
• Show genuine compassion for the other parties needs
• Ask questions regarding requirements/understand why certain things are important and promote involvement (see above bullet for brainstorming)
• Openly discuss barriers and obstacles
• Avoid all strategies that could undermine the credibility of the negotiator or damage the trust among the groups

All of these in conjunction together will create an open dialogue between negotiating parties as well as create a platform for idea generation on how to meet the objectives of both sides to have a win/win situation at the end.

In summary regarding negotiations there are multiple ways to work through negotiations.  The tactics such as competitive, avoidance, collaboration, accommodating and compromising all have their benefits and their negative aspects.  Whether we like to negotiate or not it is a part of our lives and is a vital element in business as a whole.  When it comes to collective bargaining there are multiple areas of concern: wages, hours, promotions, benefits and other employee terms and conditions of employment by the company.  The wants and needs of the employees seem to directly conflict with the wants and needs of the company employing the negotiated group.  It is also to reiterate that collective bargain are negotiations unlike many others due to the fact that people’s livelihood is under pressure and the goals, objectives and requirements of the union representative are so important to the people that they could possibly strike causing loss of revenue for the business.  This is not the optimal outcome from the negotiation.  Using the tactics and knowing the styles of the other negotiating party will provide the tools necessary to have a successful negotiation.

References

Coburn, C. (2009). Negotiation conflict styles. Acquired from http://www.negotiations.com/articles/negotiation-conflict-profiles/

William H., Kenneth J., Wolters R. (2009) The labor relations process.  9^th Edition, Cengage Learning, pp. 243-264.

Fisher, R., Ury, W., and Patton, B. (1991). Getting to yes: negotiating agreement without giving in.  2nd Edition, Houghton Mifflin.

Ury, W. (1991). Getting past no: negotiating with difficult people. Bantam Books.