Process Of Negotiation
Discuss about the Essentials Of Management And Leadership In the Public Health.
Negotiation is a process of resolving differences between two parties for reaching the terms of agreement through exploring for exchange offers and options. It is not a single activity but a series of events that are required for arriving at a single decision. There is negotiation when there is a difference in ideas or ways to handle a situation. There are two ways of reaching a negotiation, firstly by exploring options and various possibilities which adds value to the issue. Secondly, by exchanging opinions and ideas, the competitive advantage of the issue increases by implementing strategies (Fells, 2010,pp-3).
The negotiation process has five stages or phases to acquire the preplanned goal. The five stage model for negotiation is:
- Preparation Stage
The pre-negotiation stage or the preparation stage comprises of gathering information for planning and setting of goals. This further includes the planning and goal setting by defining what to achieve, the limits for compromise, deciding upon the exchange offers, determining the alternatives if the deal isn’t fully negotiated, assembling all the gathered information and objectives and developing an agenda for it. BATNA is formed in order to improve the issue (Moorhead and Griffin, 2012).
- Opening Stage
This stage comprises of laying out the arguments. This is a critical stage for asking questions and presenting views and increasing the knowledge about the issue. The information is used to construct a persuasive argument for which the negotiating party may find it reasonable enough to agree to the terms or argument for agreement. Notes are taken from the other party’s presentation and a note is made for what is important to them (Pain, 2014).
- Bargaining Stage
This stage plays the classic game of negotiation in which compromises are made and a relationship of give and take is established. Both the parties expect the opening demand must be exaggerated and they seek for redress or negotiation. There may be a bidding process for moving up in the agreement towards target and convincing the either side for the same. The parties must consider moving in the detail phase where a long range of arguments are possible (Guasco and Robinson, 2007).
- Closing Stage
This stage is a wrapping up final agreement. A review is made for the terms and conditions agreed, or the clarification for ambiguities made or finishing the incomplete discussions. These are the most important activities in the negotiation process. It is an outcome of the negotiation process on formalizing the agreement in the memorandum or a mutual understanding (Pan et al., 2012).
- Implementation Stage
Creating Batna
This is a critical stage of negotiation process. After formulating the agreement, it as to be put into action. At this stage, various flaws may be discovered or incompletion of any issue. New issues may arise and certain problems that may not be foreseen might crop up. Therefore this critical phase is a fix up or going back to resolve the issues aroused (Lewicki and Hiam, 2006, pp-41-45)
This is a concept of creating the Best Alternative to a Negotiated Agreement. It is not necessary that the best outcome is achieved through negotiation (Anderson and Narus, 2011,pp-371). The steps involved in creating a BATNA are:
- Identification of BATNA- The three elements involved in this step are creation of list of alternative strategies, working for development of these alternative ideas and making a selection of the best strategy (Zetik and Stuhlmacher, 2002).
- Increasing strength of selected alternative- The alternative chosen is specified in terms of cost and outcomes as to how strong an alternative it will prove itself.
- Determination of need to negotiate- In many situations, the alternative strategies prove better than the original one.
- Examination of potential BATNA is to be done from the other side (Burke and Friedman, 2011,pp-59).
As stated in the words of Lewicki, “Negotiation is not a process reserved only for the skilled diplomat, top salesperson, or ardent advocate for an organized lobby; it is something that everyone does, almost daily”. People tend to negotiate all the time. There are stages or incidents in everyday’s life where people negotiate. There are friends who negotiate to decide for the place to have dinner. There are children who negotiate for watching a program on television. Businesses negotiate for purchasing materials and selling their products. The lawyers negotiate for settling claims before presenting in court. The policemen negotiate with the terrorists for freeing hostages. Therefore, negotiation is not only for the skilled people, but a part of everybody’s daily life. There are incidents that are about to happen or are in the process of happening, might have happened in the past and create consequences for the present. There are few examples citing that the negotiation skills are basically the same in each case whenever practiced (Kolb, Williams and Kolb, 2003).
Chang Yang was getting late for his class as his ten years old Toysun sedan wasn’t starting. He pounded on the steering wheel and kicked the door shut in anger. He was not doing well in his classes for management and he could not afford to miss even a single class. He recognized that something needs to be done with his car as his car was giving mechanical problems everyday for the past three months. He decided of trading his Toysun with another second handed car that would atleast make him attend the management class helping in his graduation. He went to the nearby shopping area after classes that had a lot of repair garages and second handed cars. He did not have much knowledge about cars but he was fine with getting any car that would last atleast eighteen months and reliable in nature which won’t cause problems to him every day while on the way to his classes.
Examples Of Negotiation In Everyday Life
A well established international airline company is getting close to bankruptcy. There has been enormous economic pressure on them because of new budget fare and the fear of terrorism. The company derives a way out of getting bankrupted by seeking eight hundred million dollars by cutting on the pilots’ wage and benefit. Knowing this the company went seeking to the Air Line Pilots Association that is an international union for the pilots discussing the cuts. If the pilots do not agree with the cuts and concession in their payments, the airlines will soon be bankrupt (Carrell and Heavrin, 2004).
The two roommates Janet and Jocelyn share a one-bedroom apartment where both friends are working. Janet is an accountant who has a well settled job with a good company but she decides upon going back to her school for masters. She got herself enrolled in the evening program of Big City University and goes to her classes. On the other side, Jocelyn is into an advertising company and stays on fast track. She has to travel a lot for her job purpose and requires a lot of socializing with clients. The issue arises when Janet doesn’t have her class in the evening and needs peace for studying in the apartment. Jocelyn requires talking on the phone a lot and gets people for dinner. She either gets ready for going out or coming back late in the evening. Janet faces a lot of difficulties in such circumstances and wants to confront it to Jocelyn (Ha?ma?la?inen and Saarinen, 2007).
Another situation arises in case of a financial crisis faced by the government created by the old fashioned legislature and the re-elected president. The president keeps insisting on raising the taxes for the ongoing services provided by the government, focusing on the 1-2% highest taxpayers. Contrarily, the legislature whose political party favours the richest class insists on cutting the government expenditure rather than raising taxes on them. The majority of legislatures have pledged upon not agreeing for any increment in the tax rates and fear losing their jobs by the next election if they do so. It is predicted that the financial doomsday is near if such a crisis isn’t resolved by negotiation of both parties (Cohen, 2003).
One of the top recruits Ashley Johnson from twenty fifth ranked business school. She secured a second interview with one of top consumer goods company for which she got invited to its headquarters city where top-notch arrangements are made for her lodging in a four star hotel with excellent amenities and services. She has her flight delayed and she has to reach the meeting at 7:30 a.m. for which she woke up at 6:45 a.m. She stepped in the shower and turned on the water knob. The water knob fell in her hand which leaves with no water is the shower. There were some repairmen who started a repair job on the shower but left it unfinished turning off the water. Ashley panics thinking about how she will reach her breakfast meeting with the senior recruiter in forty five minutes. She is in a dilemma in how to deal with that crisis with the hotel renowned for its services mainly (Moffitt and Bordone, 2005).
There have been several reasons discussed for negotiations looking at the above cases:
- For agreeing on sharing or dividing limited resource, being land, money or time.
- For creating anything new or making an innovation on the thought that the other party haven’t thought of.
- For resolving disparity between parties (Lewicki, Barry and Saunders, 2007).
There is a case study of Joe and Sue Carter where Sue wanted to spend a vacation in the upcoming summers. While Joe had some other plans in mind for going away from the normal life, away from people and wanted to charter a cruise. While the kids wanted to go to a summer camp. Later on the way to work, Joe met his purchasing manager who told about the problem going on in engineer’s department. Sometime later, he got a call from automobile company in which Sue had chosen a luxurious car. Sue was getting harassed by phone calls from the bank regarding loan. In the evening, he had a case of real estate development for environmental management and protection. The situation was such that they knew communication was important. Communication would help in negotiation or compromise for each situation.
There are certain situations which have been critically evaluated by the writers arguing having same characteristics for negotiations under all circumstances. The following features have been related to Joe and Carter Story:
- There is an involvement of two or more parties, be it individuals, groups or organizations. Although people may have negotiations with themselves in case of debates or challenges like not being able to decide to play tennis or watch a football game, or spend time studying at home on a Saturday afternoon (Fisher and Ury, 2011). As per Carter story, there is negotiation between Joe and his wife, the auto salesman and purchasing manager. Sue negotiates with her husband and with the Conservation Commission, and the management senior at the bank. Joe and Carter still face the upcoming negotiation about their vacation and motor scooter.
- A conflict between needs and desires is always present in which one is necessarily wanted irrespective of other wanting it. The parties resolve conflict constructing a way out of it (Starkey et al., 2010). Joe and Sue have negotiations over management of children, vacation spending, automobiles, budgets, procedures with company and community practices relating to preservation of natural resources and issuing building permits.
- There is negotiation between parties by choice. They have an idea of getting a better deal than what they already have because of which they start the negotiation process. The choice is accepting the other side’s demands voluntarily. There is a chance of improvement in the case or result out of the negotiation process which indulges an individual in negotiating for the issue. Though there are several cases where one should negotiate while other times not. One must not try negotiating if not prepared, or acting in bad faith, or the demands stand unethical, or there is a limited time frame (Falcao, 2010).
- There is a give and take process or an exchange that makes negotiation possible between parties. There is an expectation of modifying or moving away from opening statements, demands or requests. In the beginning both parties are strenuously forcing upon their own sides and standing for it, but they modify their opinion after knowing each other’s sides and create an opening position at both ends. This is also called as compromise as it is the middle position of both parties’ demands. However, the negotiations created truly where one party meets the objectives or the goals, and then there is no necessary negotiation or compromise or give and take (Crump, 2011).
- Negotiation occurs between both parties to look for an agreement and fighting openly by dominating and to capitulate each other’s situations. There may be a permanent break off or disputes while the negotiation process if they show a red signal to either party. It also occurs when parties prefer resolving conflict or bypass rules. The company and systems invent procedures for resolving such cases. The rental services for equipment follow a policy for what the charge must be paid if the due falls long. In normal cases, there is a fine paid by the people. There might be a negotiation for fee reduction. Similarly, attorneys plea-bargain for clients when they see a chance of settlement before carrying their cases in the courtroom (Gates, 2011). In the Carter story, Joe pursues for negotiation rather than letting the wife decide to decide a place for spending vacation. He also negotiates for paying a lesser price of the car. He also argues with the finance group for the budget cuts.
- Negotiation is usually the settlement of tangibles as well as intangibles. The intangible factors being the need to win or compete, or to maintain a good relationship. They have an enormous influence on negotiation process and outcome. It is not possible to ignore intangibles of a case for negotiation. Intangibles affect the judgments about the fairness and appropriateness of a case. In Joe’s case, he doesn’t want to look weak in front of his department engineers. He needs Ed’s support in the upcoming budget(Lewicki, Barry and Saunders, 2007).
Conclusion
Negotiation forms a part of everyday life. People negotiate in different situations as and when required. It not only implies for salesmen, or qualified professionals or ardent advocates, but for every individual in their normal life. Negotiation is required at a workplace with the boss, at home with family, at a social group with friends etc. Compromising in situations that may be presumed as the best outcome falls as negotiation. Alternative plans are sometimes better than the actual proposal. Negotiation must be done if the ideas or opinions are strong enough to get the other side of the party into compromise.
References
Anderson, J. and Narus, J. (2011). Business market management. Upper Saddle River, N.J.: Prentice Hall.
Burke, R. and Friedman, L. (2011). Essentials of management and leadership in public health. Sudbury, MA: Jones and Bartlett Publishers.
Carrell, M. and Heavrin, C. (2004). The everyday negotiator. Amherst, Mass.: HRD Press.
Cohen, H. (2003). Negotiate this!. New York: Warner Books.
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Falcao, H. (2010). Value negotiation. Singapore: Prentice Hall/Pearson Education South Asia.
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Fisher, R. and Ury, W. (2011). Getting to yes. New York, NY: Penguin.
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Ha?ma?la?inen, R. and Saarinen, E. (2007). Systems intelligence in leadership and everyday life. [Espoo]: Helsinki University of Technology, Systems Analysis Laboratory.
Kolb, D., Williams, J. and Kolb, D. (2003). Everyday negotiation. San Francisco, CA: Jossey-Bass.
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Moffitt, M. and Bordone, R. (2005). The handbook of dispute resolution. San Francisco, CA: Jossey-Bass.
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Pan, L., Luo, X., Meng, X., Miao, C., He, M. and Guo, X. (2012). A TWO-STAGE WIN-WIN MULTIATTRIBUTE NEGOTIATION MODEL: OPTIMIZATION AND THEN CONCESSION.Computational Intelligence, 29(4), pp.577-626.
Starkey, B., Boyer, M., Wilkenfeld, J. and Starkey, B. (2010). International negotiation in a complex world. Lanham, Md.: Rowman & Littlefield Publishers.
Zetik, D. and Stuhlmacher, A. (2002). Goal Setting and Negotiation Performance: A Meta-Analysis.Group Processes & Intergroup Relations, 5(1), pp.35-52.
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