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Managerial Skills Assignment
Managerial Skills Assignment
Managerial Skills Assignment
MEANING-
All parties feel that the negotiation will lead to a better outcome
2. John Doe wants a job with Company XYZ but must negotiate his salary and
benefits.
5. Union ABC wants higher wages and pension contributions from Company
XYZ.
EXAMPLE- The Ninja Corporation has one of the largest factories on the
East Coast. Every five years, the company puts out a request for bids for
businesses to clean and paint the factory floor. Once a contractor is selected,
Ninja Corporation starts a negotiation process in order to facilitate the best price
and service on this massive undertaking.
PROCESS OF NEGOTIATION
Ninja Corporation has received numerous bids for the factory painting job. The
company has decided to enter negotiations with Wet Paint Biz. There are five
steps to the negotiation process, which are:
Preparation and planning is the first step in the negotiation process. Here, both
parties will organize and accumulate the information necessary to have an
effective negotiation. Ninja Corporation and Wet Paint Biz both need to
prepare fully for the negotiation. Information can be powerful in negotiations
and help add validity to claims. Both companies should investigate each other's
history and try and figure out what the opening offer will be for the paint job.
Wet Paint Biz needs to uncover the highest amount Ninja Corporation is
willing to pay for the factory paint job, while Ninja Corporation needs to figure
out the lowest Wet Paint Biz will take for the job.
2. Definition of ground rules:
The second step in negotiation is the definition of ground rules. In this step,
rules and procedures will be established for the planned negotiation.
Consideration will be given to questions, such as:
In addition, both parties will try and figure out what price should be the starting
point for the negotiation. Also, demands and expectations should be disclosed
up front. Lastly, the bottom line, which is the lowest price that Wet Paint Biz
will provide services to Ninja Corporation for, will need to be uncovered by
Ninja Corporation. Ninja will start the negotiations with an opening offer, or
starting price, suggesting a price of $25,000 for the job. Both parties also
agreed that the negotiations would last one day and if a price for the job was
not agreed upon, then Ninja Corporation would consider a different vendor.
Now that the rules have been established, a discussion needs to take place
regarding the specifics of the job price. In the third negotiation
step, clarification and justification, the positions of both parties are discussed at
length. Clarification and Justification: When initial positions have been
exchanged both you and the other party will explain amplify, clarify, bolster
and justify your original demands. This neednt be confrontational. Rather, its
an opportunity for educating and informing each other on the issues, why they
are important and how each arrived their initial demands. This is the point at
which you might want to provide the other party with any documentation that
helps support your position.
4. Bargaining and problem solving:
The essence of the negotiations process is the actual give and take in trying to
hash out an agreement. It is here where concessions will undoubtedly need to
be made by both parties.
The final step in the negotiation process is formalizing the agreement that has
been worked out and developing any procedures that are necessary for
implementing and monitoring.
1. Authority:
The first key factor affecting any negotiation is authority. Negotiation may start
with deliberation but to be effective, it has to end up in a conclusion or
settlement. For this, both the parties should have the power or authority to
conclude the deal.
2. Credibility:
Trust and mutual confidence are very relevant in any process of negotiation.
People who are known to be honest, sincere, steady and reliable have an edge
when they enter the process of negotiation.
3. Information:
Negotiation often proceeds on the basis of facts, figures, past data, future trends
and outlook, studies, empirical data and calculations. Information, to repeat a
clich, is power. Adequate and reliable information about the various issues
involved is essential for ensuring the success of a negotiation exercise.
4. Time:
The time frame within which the negotiation should be completed is another
important factor affecting the process of negotiation. One of the parties may
have a certain urgency as a result of which they may be in a hurry to conclude
the negotiation. It is due to time constraints that negotiations cannot go on
endlessly and both the parties should agree on a time frame within which the
process has to be completed.
5. Emotional control:
Human beings are not just rational, they are also emotional. Every person has
his or her qualities of the head and heart. It is true that in business situations,
people take decisions based on thinking and reasoning and after a careful
evaluation of choices before them. Yet, if we scratch the surface, we do find
emotions at play. Good negotiators are aware of the play of emotions and are
responsive to them. Apart from assessing the emotional state of the people in
the other party, the negotiator should himself display the appropriate emotional
state. Sometimes, it would be appropriate to come on strong with forceful
points.
6. Communication Skills: