Introduction to Bargaining and Negotiation
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Added on 2019-09-26
Introduction to Bargaining and Negotiation
Added on 2019-09-26
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IntroductionBargaining and negotiations are reasonable tools for reaching an understanding to make asuccessful deal. As different parties have different needs and goals, so the bargaining strategiesare used in order to attain an effective amicable agreement. These procedures are used in thesituations such as conflicts of interests, ideological differences or any form of altercation for thatmatter (Odell, 2012). The negotiation procedure involves a negotiator who plays important rolein conflict resolutions. The following report depicts a real life scenario regarding negotiation andbargaining deal that, in most of the situations, happen between car dealers and their buyers. Situation A person needs to purchase a car and therefore visits sellers to sellers in order to fulfill his aim offinding perfect car as per the price, model and features. Before the negotiation process begins,the main parties involved in this case are – buyer and car dealer. However, during this process alot of issues are bound to arise and needed to be addressed. The buyer has certain models of carin his mind along with the price that he wants to pay for the car. While, the car dealer hasdifferent modes with different prices and his aim is to sell any of them probably by luring thepotential customers. The negotiation position, here, is that both of them has a certain minimumprice for selling and purchasing. The parties, therefore, will have to come to a compromisingstage so that they could reach to an agreement where both of them will benefit (Shell, 1999). Third Party InterventionIn the above scenario, there is a possibility of an impasse between the two parties, where theycan’t reach an agreement. So, in such a situation, for averting legal hurdles, a third party isrequired, which is neutral in that he has to take an objective viewpoint regarding the case (Brett,Kressel, & Pruitt, 1991). Both the parties then choose a trusted facilitator, who will have to listento the arguments from both sides in a non-partisan manner. Generally, there are three forms ofinterventions – settlement facilitation in which the negotiator helps in reaching the agreement bychoosing an alternative for them to end up in a win-win situation. The second form is mediationprocess in which the lines of communications are open for the parties to express theirrequirements. While, the third one entails a process in which the facilitator has the power tomake judgment or decision regarding the conflict. So, in the present scenario, the negotiationbetween the car buyer and car seller can best be performed with the help of settlementfacilitation. BATNA The Best Alternative to a Negotiated Agreement will be the final option that both of the partieswould expect to get to. The importance of using this approach is that the negotiator or thenegotiating parties always have available options regarding good alternative negotiation. Thisapproach empowers all the parties to either reach the mutually acceptable agreement or walkaway with a better agreement (Brett, Pinkley, & Jackofsky, 1996). To begin with, both theparties are needed to determine their BATNA well before the process of discussions and
negotiations start. So, the BATNA for the purchasing party is to buy a better quality car at thelowest possible prices. Other than that the buyer has to consider the factors like feasibility,impact and consequences. The buyer can go to every car to check out the prices. On the otherhand, the car seller will be eying on such a deal that includes fulfilling the buyer’s requirementsalong with maintaining the margin of profit for the company. So, at the end of the deal, a finaldecision will be made by the parties that will be based on the fairest prices by both car buyer andcar seller.Identification of IssuesThe different issues that are going to emerge in such a situation are that the buyer forgets as towhat exact purpose he needs to purchase the car for, that is, whether for business or personal use.On the other hand, the seller, due to the fact that he has to make long term profits, may try toexert pressure on the buyer by exaggerating its features. Also, if the seller comes to know thatthe buyer desperately needs a particular car and has no other options but to turn to his company,then he will use this leverage in his favor to seal this deal (Rubin, & Brown, 2013). The otherpossible issues are difficulty in the mode of payment or uncomfortable installments andunavailability of a particular color in a particular model or the difficulties associated with thedelivery.Theoretical Models and Sources of Power One of the effective theories that can be used in this negotiation process is negotiation based onposition according to its need for a particular party. It is a subjective negotiation because both theparties take a stubborn approach rather than making amendments and adjustments to their stand.It is also known as competitive bargaining because they are to reluctant to make compromise.The other applicable theory is interest based bargaining in which each of the parties are ready toconsider the interests of each other’s interests by cooperation for reaching to a compromise(Putnam, & Jones, 1982 ). Its main advantage is that both the parties can become creative andinnovative to adopt a win-win situation for themselves. Further, the balance of power is animportant element in determining effective negotiation to ensure compromise. However, if oneof the parties possess more power than the expected compromise will difficult to attain. Mechanics of procedureConversation is very effective factor in this as it ensures that the parties are in a position to havea dialogue and share their predicament. It must include a respect towards each other’s views andopinions. The healthy conversation allows the use of proper mechanisms such as relevantquestions. For example, the seller, in the present scenario, may ask what offers does the buyerexpects, while the buyer may ask about mileage, performance, extra features and securityfeatures of the car. Providing suggestions and proposals will also be done interchangeably.Strategies to successful negotiations
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