Negotiation

Introduction

Information exchange is a crucial factor that determines how negotiation proceeds and thereby what type of outcomes can be obtained from such a dynamic process. This paper will examine this process of negotiation using a relative perspective and proposes that what negotiators think will predict how they will talk in order to communicate with their counterparts during the negotiation. The paper will highlight the most commonly used bargaining strategies. Integrative strategy though effective cannot be the outcome of every negotiation. Even though integrative bargains would be advantageous in work places distributive bargains are equally important. The paper will further examine the negotiation strategies and explain how it is situational and variable for a negotiator to decide on what strategy works best for the same.

A distributive bargain is a strategy in which both parties work towards maximizing their personal gains (R.J.Lewicki, D.M.Saunders, B.Barry, J.Minton, 2004, 60). In contrast, an integrative negotiation is all about expanding the pie to satisfy both the parties involved (R.J.Lewicki, D.M.Saunders, B.Barry, J.Minton, 2004, 95).

Elaboration on the Strategies under the scanner

A Distributive strategy can be defined as a strategy in which one player dominates the opponent resulting in a win-lose situation which is competitive in nature (Leo Hawkins& Michael Hudson, 1994, 15). On the contrary, in a Integrative bargaining strategy one player adopts a more cooperative approach towards the other party and ends up maximizing the pie to suit the other's needs. Yet, few of the negotiations we may participate in are likely to be purely distributive. The Harvard Business School Press suggests that although, it is clear that there is a direct competition between the interests and aspirations of each party in any situation, there is even more opportunity to integrate the parties goals and choices. No matter what type of a negotiation you are faced with, it is bound to become complex if there are multiple parties (Harvard Business School Publishing Corporation & The Society of Human Resource Management, 2005, 48:60). The text book suggests that there are always two sides to a coin. If there are people fighting for their points of view, there are the others who are totally repelled by the concept of being distributive that they will simply walk away (R.J.Lewicki, D.M.Saunders, B.Barry, J.Minton, 2004, 95).

What homework needs to be done before any negotiation

The text book suggests that with a well thought plan of action, conceptualization and implementation most negotiators can achieve their objectives. For being able to successfully negotiate, each party should know the following:

Ð'* Their best alternative to a negotiated agreement (BATNA): According to the Harvard Business School Press (2005, 77).it is your preferred course of action in the absence of an agreement.

Ð'* The minimum requirement of terms for a negotiated deal: This is the least favorable point at which you will accept an agreement and is closely related to your BATNA.

Ð'* How flexible the other party is willing to be and what trade-offs they are willing to make: This information can be gathered with using appropriate questioning styles and estimating the other parties BATNA.

The text book defines the concept of the Ð''Resistance Point'. It is the cutoff point for any negotiation. If it is reached the other party will break off the negotiation and walk away. The author, J.Lewicki categorically defines the Ð''Bargaining Range' that plays a crucial role in helping a negotiator make some basic assumptions about the outcomes towards his/her goal. The spread between the resistance points is called the bargaining or the settlement zone and it can be positive or negative depending on the offer made. If, the buyer's resistance point is above the sellers, it means that the buyer is ready to pay a little more than what the seller is selling at the lowest price, there is a positive settlement range. However, if the seller's resistance point is higher, the buyer will not pay more than that the seller will accept at the most, there is a negative settlement range.

Lessons from workshops held in week 1-4

Here are some situations where a negotiator needs to be careful about the choice of strategy.

1. No clarity of being fair towards the other party:

In certain situations negotiators work towards a goal that serves their own interests and consider that to be a fair approach. In the example of the Ð''USED CAR', when sellers promise that they will fix the exhaust problem before the sale, they actually invite the opponent to consider the deal by making a concession. If the price quoted by the seller is too high, the buyers don't respond to any further friendly concessions, a deadlock seems to appear easily. The negotiation is nearly over when the buyer comments on the seller's financial position. This is where the sellers perceive the deal to be unfair towards them. Everyone has their own versions of fairness in the process of negotiation, interestingly, they are situational and variable. Integrative bargaining is competitive thereby having a clear, non ambiguous approach.

2. Multiple Issues:

During the process of negotiating, most people have more than a single goal. Whatever one party gains, is the others loss. Most of the times this is a win-lose situation. When a SALARY NEGOTIATION scenario is considered, a salary hike is of primary importance, however, it is not the only area of focus for the negotiators. Several relevant aspects may need scrutiny, such as linking the incentives to the salary, showing the carrot for a new title or promotion, empowering the individual further or offering flexi work timings to suit the individual's needs. If your subordinate is persistent for a salary hike and doesn't consider any of the perks offered, the negotiation will not succeed. The boss- subordinate relationship is formal. If the explanation given by the boss is not logical and factual it may result in disastrous outcomes and may lead to attrition. For most of the companies, offering perks is one of the techniques to avoid a deadlock. So in short the focus is diverted and a