Negotiation in Business Administration (7) INTRODUCTION 3 MAIN BODY3

Business Administration (7) INTRODUCTION 3 MAIN BODY3 1.1 Requirement of negotiation strategy 3 1.2 Use of different negotiation techniques 4 1.3 How research on other party can be used in negotiation.4 1.4 How cultural difference might affect negotiations 5 2.1Identify purpose, scope and objective of negotiation technique 5 2.2 Explain the scope of their own authority for negotiating negotiation 6 2.3 Prepare a negotiation strategy6 2.4 Prepare fall back stances 7 2.5 Assessment of likely objectives and negotiation stance of other party. 8 3.1 Negotiation within responsibility limits

Business Administration
(7)

Table of Contents
INTRODUCTION...........................................................................................................................3
MAIN BODY...................................................................................................................................3
1.1 Requirement of negotiation strategy.....................................................................................3
1.2 Use of different negotiation techniques................................................................................4
1.3 How research on other party can be used in negotiation......................................................4
1.4 How cultural difference might affect negotiations................................................................5
2.1Identify purpose, scope and objective of negotiation.............................................................5
2.2 Explain the scope of their own authority for negotiating......................................................6
2.3 Prepare a negotiation strategy...............................................................................................6
2.4 Prepare fall back stances ......................................................................................................7
2.5 Assessment of likely objectives and negotiation stance of other party.................................8
2.6 Research strength and weakness of other party....................................................................8
3.1 Negotiation within responsibility limits in way that optimise opportunities........................9
3.2 Adapt conduct of negotiation in accordance with changing circumstances..........................9
3.3 Maintain accurate records of negotiations, outcomes and agreements...............................10
3.4 Adhere to organisational policies and procedures and legal and ethical requirements in
negotiations...............................................................................................................................10
CONCLUSION..............................................................................................................................11
REFERENCES..............................................................................................................................12

INTRODUCTION
Business administration refers to the management of a business. This includes different
aspect of overseeing and management of operation of business which includes accounting,
finance and marketing. Negotiation is process where two or more parties who have different
needs and objectives discuss the problem in order to reach on a win win situation. The good
negotiation is helpful in the success of business and enables to build better relationship (What is
negotiation, 2018.). To better understand this concept Tesco Plc is selected for this report. The
requirement of negotiation strategy is being explained in this report. There are various
negotiation techniques which is used by parties as culture effect on negotiation is also being
explained in this report. As there are different purpose, scope and objectives of negotiation along
with negotiation strategy which is being discussed in this report. The adaption of the conduct in
accordance with changing circumstances is being explained in present report. There are some
policies and procedures and legal and ethical requirements when carrying out business
negotiations.
MAIN BODY
1.1 Requirement of negotiation strategy
Negotiation strategy plays an important role in the business environment in order to reach
to win win situation for parties. The negotiation strategy is required in order to build better
relationship for future business. As this strategy states that do not make first offer and never
negotiate with own. The conflict can be arisen during the negotiation so walk away strategy can
be very helpful to avoid conflictive situation during negotiation. In most negotiation, the main
goal is to be fair, so negotiation strategy can be very helpful to be open, fair and honest to gain
most from that negotiation process. A person doing negotiation must have proper knowledge
about the topic so that conversation must be effective and productive. As insufficient information
can not allow the manager to crack deal on a positive note. As all type of mentioned strategy can
be very helpful for the achieving win win situation for parties who all are included in the process
of negotiation (Houston, Jiang and Ma, 2014).
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1.2 Use of different negotiation techniques
Negotiation techniques is tool which is used by parties in order to do negotiation
effectively and efficiently. There are different negotiation techniques which are useful, is
discussed below:
Put ego aside:
This is a very important technique for getting successful deal while negotiation. As best
negotiator either do not care or do not show they care about gets credit for a successful deal. The
ego should be kept aside during negotiation because it can harm the business deal.
Have open ended question conversation:
The effective negotiation question should always be open ended as this allows party to
open up about their feelings and gain their trust. As nobody wants the simple responses like yes
or no because this close the conversation (Hesselbarth and Schaltegger, 2014).
Do homework:
This is a best tool for cracking a winning deal for negotiating parties. If managers enters
into a negotiation without any preparation than they are already lost the deal. There should be a
complete research of strength and weakness of other party in order understand their needs.
Stick to the principles:
The negotiator of business have set of guiding principles and values on which they never
compromise. So this is a tool which can be used by negotiators if they find negotiation deal is
crossing boundaries than one can leave that deal without any second thought.
These are techniques which are useful for negotiators to reach on positive outcome of a
deal.
1.3 How research on other party can be used in negotiation.
The research is an important tool in order to better understand behaviour of other party in
negotiation. For cracking a positive deal in the negotiation this is important to do research on the
other party. The investigation allows to the party to bargain at their side and grab the deal. As
different parties have their ways to do bargaining. For example, Tesco is planning to meet their
new supplier in order to make negotiation for their new deals. The manager of Tesco has done
some research regarding the supplier behaviour in market. As they found that supplier charges
higher price from its new customers and put a hidden clause in the agreement regarding that.. So
at the time of negotiation manager of Tesco has point out this issue and crack the deal on mutual
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agreement for supplying the material at fair price. So the research helps the company to find out
information and crack the positive deal. So this is how research on the other party can be used
for the better outcomes.
1.4 How cultural difference might affect negotiations
International deals and business are not only cross borders but also cross cultures. Culture
make impact on how people think, behave and communicate. As this also make affects the
transaction they make and way they negotiate. There are different frameworks of negotiation
which is affected by culture these are as follows:
Negotiating goal : Contract or relationship ?
Negotiators from the various cultures have their different viewpoint regarding purpose of
negotiation. As for some cultures negotiators sees negotiation as a contract between two parties
while other culture deal maker thinks that this is not only a contract but a relationship between
two sides. So the cultural difference can make impact on negotiation process (Grusec and
Hasting, 2014).
Risk taking: High or low ?
In the deal, negotiators cultures can affect desire of one side to take risks – to try new
approaches and tolerate uncertainties in a proposed course of action. For example, the Japanese
with their focus on need large amount of information and intricate group decision making
process tend to be risk averse. As in similarly Americans are considered as risk takers. So the
culture affects desire for risk taking and ultimately it can be seen in the negotiation.
2.1Identify purpose, scope and objective of negotiation
Purpose of negotiation:
The main purpose of negotiation is to reach on an agreement in order to participate in an
activity which resulted in the mutual benefits. As apart from this there different purpose from
different perspective such as:
The purpose of negotiation from buyer's perspective is Negotiation is an art which helps to reach
on a common understanding through bargaining on the essentials of contract such as delivery,
specifications, prices and terms
From seller's perspective is to grab the deal closed on the best possible terms for their business
and leaving the buyer feeling as they have also got good deal.
Scope of negotiation:
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 Business, sales and marketing etc.
 In industrial relations such as compensations and work conditions etc.
 In company takeovers, merger and acquisition and joint ventures etc.
 Negotiations in business regulations with authorities.
Objective of negotiation:
As main objective of negotiation is to accomplish certainty in order to record what is
being supplied, what quantities and what standard is being supplied. And the effect of not
meeting these requirement on time.
 To settle an adequate, fair and reasonable price.
 To make ensure that contract is performed within given time
 Settle on win win situations
 Develop a better relationship with competent supplier.
2.2 Explain the scope of their own authority for negotiating
As there are two or more parties in negotiation and each have authority to bargain to a
certain extent. Scope of authority refers to the amount of authority an agent has been given or
delegated might be expected to delegate in order to carry out their principles of business. As
there are certain principles and values of business and they follow these principle at time of
negotiation. In case in an individual is crossing the boundaries and disobeying the standard of
organisation then they are not suppose to do any negotiation. This scope of authority is very
helpful in a bargaining deal as negotiator can clearly say no to seller reason being limited scope
of authority. Scope of authority restrains to commit any deal on behalf of organisation which has
not been ratified by appropriate authority (Fishburn, 2013). Having a strong alternative to a
negotiated agreements led negotiators to be three times more likely try to make the first offer.
The main value of powerful negotiators is that it can develop perspective taking or the ability to
appreciate and determine the view point from another person.
2.3 Prepare a negotiation strategy
There are different negotiation strategy which allows to reach on win win situation. These
are as follows:
Set a friendly climate:
The friendly outcome can be very helpful in the negotiation as it helps in gaining faith of
parties and show mutual interest in negotiation deal.
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Make multiple offers:
The negotiator needs to put more than one offer on the negotiating table in order to make
deal on win win situation. As party can reject one offer if there is more than one offer than party
might get attracted towards that and deal can be cracked. This shows flexibility of negotiating
party and desire to understand the need of other party.
Analysis of outcomes and risks:
The risk evaluation needs to be done by the parties in order to reach on a win win
situation. As different type of risk can be arisen at the time of negotiation so by evaluating the
risk it can be countered and bargaining can be done on a positive note.
A contingent agreement:
The parties have different thoughts and beliefs regarding the likelihood of future events.
As the time of negotiation the party convinced that firm will deliver projects on time but later on
this becomes unrealistic. So there should be contingent contracts in order to reduce risk of future
uncertainty.
2.4 Prepare fall back stances
The best negotiators are not always those who achieve the ideal results but those who
achieve something in the middle of real position and fall back position. This is discussed as
below:
Preparation:
Preparation refers to the more knowledge about other party will helpful to adapt the
position of self. As it can be helpful in the strategy to set friendly climate (Fischer and Fröhlich,
2013 ).
Opening move:
The opening move should be as collection of information, expressing of views and listen
view of other parties. As this will gives the more data to negotiator in order to give their
viewpoints.
Middle game:
At this point the discussion heats up and goes to another level. Negotiator might needs to
re evaluate their position and represent their ideas. Its very important to be creative to find a
solution. The better negotiators understand the signals very quickly and accurately which is
given by other parties.
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Results:
After reaching on agreement it is time to analyse how process has worked. So if party has
accomplished it some of objectives only than it needs to re visit the outstanding points.
2.5 Assessment of likely objectives and negotiation stance of other party.
Assessing counterparty simply means to uncover some relevant information regarding
other party. The objectives and stance can be assessed by following ways these are as follows:
Objectives or interests:
This is very important to know main objective of other party and value of their interest as
because on the basis of that negotiator can prepare their strategy.
Resistance points and alternatives:
The other party will likely to have opposition point in respect to there interest. This point
will be tied to available option for given interest or collective interest at issues.
The assessment can be done in following ways, these are discussed as below:
Indirect assessment:
Assessment can be done indirectly by observations, document consultations and
communicating with friends, acquaintances or relatives. The anticipation of other party interest
comes under this indirect assessment.
Direct assessment:
The direct assessment includes straightforward method of getting relevant and key
information regarding other party. In this method other party is being asked to discuss their goals
at the table or before negotiation begins. As with help of broad discussion it can be understood
that what other party wants and would like to achieve from upcoming negotiations (Eichfelder
and Schorn, 2012).
2.6 Research strength and weakness of other party.
This is very important to research and get information regarding strength and weakness
of other party. As strength and weakness can be observed during the negotiation process. As
Tesco manager has negotiated with their new supplier so some of supplier strength and weakness
is discussed as below:
Strength:
Strength refers to the capacity and capability of an individual to reach on a positive
outcome. As suppliers main strength was confidence, the confidence enables supplier to crack
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the deal with hidden clauses in agreement. Apart from this, supplier was fluent in communication
which restrain people to doubt on its agreements. Supplier was good at negotiating on prices and
cracking profitable deal.
Weakness:
The main weakness of supplier was that pertaining that their products and services are
best. As another weakness of supplier was that deceiving nature which supplier uses in its
agreement by putting up a hidden clause. Supplier was used to very straight forward in respect of
false communicating feature of their product and services.
3.1 Negotiation within responsibility limits in way that optimise opportunities
Negotiation can be done up to the certain limit which is authorised by higher authority.
As the negotiation needs to carry out in way which helps negotiator to have a positive deal.
There are some values and principles which is followed by negotiator in a process and these
principles restrains party to cross any boundary. This is important to do negotiation within the
boundary as it enables as excess of choices can hamper effectiveness of bargaining. This limit
can be used in way to optimise opportunities by choosing only its require to choose. As due to
limitation negotiator can come up with the new innovative ideas which ultimately can be helpful
for dealing in successful bargaining process. As within limits, choices can be more liberating
(Bounfour and Edvinsson, 2012).
3.2 Adapt conduct of negotiation in accordance with changing circumstances
The negotiation is flexible and situation during negotiation can be change at anytime so
conduct of negotiation should be according to the circumstances. As party should not fix their
behaviour in negotiation it needs to be change with situation. If negotiator keep constant with
same behaviour during complete process of negotiation than it could lead to loss in the deal. This
should be based on the people and their interest. As it should not be depend on positions. The
negotiator needs to generate different possibilities in their mind before deciding what to do. This
will enable the negotiator to change their conduct according to present situation and get right
deal. There are different negotiation tactics, negotiator needs to be aware about these tactics so
one can adapt these according to situation. For example, during the negotiation if the supplier of
Tesco force the manager of Tesco to cross their boundaries of negotiation than manager can
dismiss that negotiation process with instant effect.
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3.3 Maintain accurate records of negotiations, outcomes and agreements
The negotiation is a contract between two or more parties which includes the outcomes of
that negotiation process. As it is very important to keep records of these agreements and
outcomes at safe place in order to prevent from any discrepancies in future. These records can be
used in future for keeping their safe viewpoints in front of other party. Records can assist
company to find out the what have been decided in the negotiation process and what was
outcome of negotiation deal. An agreement is legal document which includes different terms and
conditions which decided between the company and party. So if this agreement is misplaced by
the company than they can get into a difficult situation and the supplier can get benefit out of this
situation. So it is important to maintain accurate and authentic record of these agreements and
negotiation outcomes. In order to maintain the records safe the liability should be given to a
responsible person so that they maintain these records accordingly at safe place. These can be
stored online as well in order to prevent from the loss (Allais and Hagen, 2013).
3.4 Adhere to organisational policies and procedures and legal and ethical requirements in
negotiations.
While carrying out business negotiations there are different policies and procedures, legal
and ethical requirements which needs to be followed by the parties in order to fairly process the
negotiation. The plan and policies set the guideline which needs to be used by the negotiator
parties in order to smooth functioning of negotiation. Ethics refers to the fair practices and doing
right things in negotiation so that process can be taken smoothly. The different ethical
requirement which needs to be fulfil by the parties these are as follows:
End result ethics:
This refers that parties should be agreed on their final result . As it is important to have
mutual agreement on the end results.
Appropriate behaviour:
It is very important to have appropriate behaviour in this process so that fair practices can
be followed in the process.
Social ethics:
The social ethics needs to followed in the negotiation process as because moral rightness
of an action is determined by the norms and customs of a particular society.
The legal requirements are as follows:
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 Have clear policy regarding confidentiality
 Ensure not to disclose any sensitive information of business
 Be aware about bribery in all forms.
 Do not mislead
 Prevent to risk of enter into a contract by mistake.
CONCLUSION
In the conclusion it can be said that negotiation is very important for cracking a
successful deal. As there are different use of negotiation strategy in the negotiation process, the
culture differences affects the negotiation process. There are various purpose, scope and
objectives of negotiation. The research done on the other parties can be used in effective way at
the time of negotiation. There is limitation for doing the negotiation to a certain extent. The
strength and weakness of other party can be very helpful for win win situation. There are
different policies and procedures, legal requirement and ethical requirement which needs to be
followed by the negotiators.
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REFERENCES
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Online
What is negotiation. 2018. [Online] Available Through: <https://investinganswers.com/financial-
dictionary/businesses-corporations/negotiation-6040>
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