Negotiation and its approaches

This report explains the two approaches to negotiation: Competitive Positional-Based and Problem Solving Interest-Based. It discusses their characteristics, assumptions, risks, and probable impacts on relationships. The report recommends the Problem Solving Interest-Based approach for United Beverages Private Limited. The approach is helpful for employees to learn new skills and increase customer satisfaction. Positive interaction among employees will increase team spirit, efficiency, and motivation.

Running Head: Negotiation and its approaches 0
Negotiation and its approaches

Negotiation and its approaches 1
Executive Summary
In the following report, the negotiation and its approaches are explained. The two approaches
which are explained are Competitive positional-based negotiation and problem solving
interest-based negotiation. In this, the characteristics, assumptions, risks, probable impacts on
relationships are explained. These are explained so that Barbara Johnstone, the general
manager of United Beverages Private Limited can come to know about the best approach of
negotiation adopted by the manager so train their staff. In this report all the negotiation
strategies are discussed and then at last the final conclusion is prepared to find out the best
method for negotiation. The approach which is selected is mentioned in the
recommendations.

Negotiation and its approaches 2
Table of Contents
Executive Summary.....................................................................................................1
Introduction....................................................................................................................3
Competitive Positional-Based Negotiation................................................................3
Characteristics of the Approach.............................................................................3
Assumption............................................................................................................4
Risk............................................................................................................................4
Probable impact on Relationships..........................................................................5
Problem Solving Interest Based Negotiation.............................................................6
Characteristics of the approach..............................................................................6
Assumption............................................................................................................6
Risk........................................................................................................................7
Impacts on Relations..................................................................................................7
Findings and Recommendations....................................................................................8
Recommendations......................................................................................................8
Conclusion......................................................................................................................9

Negotiation and its approaches 3
Introduction
Negotiation is the process by which individuals or groups settle their differences,
disagreements and achieve best possible outcomes for them. This research is based on two
approaches to the negotiation. These are Competitive Positional-Based Negotiation which is
also known as competing ideologies (Hensher and Stanley, 2008). In this, there is always a
“win-lose” situation of negotiation. The second approach is Problem Solving Interest-Based
Negotiation is also known as cooperative ideologies; it is always a “win-win” situation of
negotiation. In the following report, on the basis of recommendations given during the
training need analysis conducted by, Barbara Johnstone who is the General Manager of
United Beverages Private Limited. As per the general manager, there is lack of skills in the
staff of company in undertaking negotiations. Barbara wants to know the best approach for
negotiations which is appropriate for the company so that he could conduct training of the
staff. In the report, there is a detailed explanation of characteristics of each approach;
assumptions of each approach, risks associated with each approach and probable impact of
the relationship of each approach. The recommendations and findings give the final picture to
the best approach to Negotiation and the reason for this recommendation (Wong and Howard,
2017).
Competitive Positional-Based Negotiation
In this the process of negotiation is treated as a competition. It is a “Win-lose” situation in
which parties have contrary interest. These processes is treated as win or lose which means
one person is always in gain and another person is always on loss during the negotiation. The
outcome of this negotiation is treated only in terms of winners and losers. All the negotiation
is treated in financial terms only. This strategy further involves hard exchange and double
dealings. It is also known as positional, hard bargaining or distributive negotiation (Mathews,
2018).
Characteristics of the Approach
The characteristics are as follows:

Negotiation and its approaches 4
 Threats, tensions and pressures- In this kind of negotiation there is a lot of pressure
on both the parties, so the pressure of losing is more than the happiness of winning.
 Sticking to the positions- The winning person is always like to be in that position
only and can do anything to maintain that position. This can ensure losing for other
person.
 Want clear victory- The victory or loss for both of the parties is very clear as losing
or winning is the only option left with parties and everybody will try their best to
ensure there victory.
 High opening demands- The people who have the nature of risk takers expect a
higher return. They can offer the price which can cause great loss to the other party.
 Domination of one party over other- This win-lose situation had created domination
as one party always win and other will always lose which creates a domination of
winning party over losing party (Neuliep, 2017).
Assumption
The assumptions are:
 The gain of one becomes the loss of other- Due to the nature of the approach the
gain of one person automatically becomes the loss of other.
 Deal does not affect the material available choices for tomorrow- This is always
considered as a very formal negotiation. This means everything is highly professional.
This states that future availability is not affected by present choices.
 Controlled by egocentric self-interest- In this, egocentric self-interest means that
both of the parties wants to win and at the same time they want to satisfy their ego as
well.
 Limited Resources- It happens because one of the parties is sharing only that
information which can create and increase their possibility of winning (Hargie, 2016).
Risk
The risks associated are:
 Leads to rigidity- One change in the rule can impact the final decision of negotiation.
It is very important to maintain rigidity in rules and all the rules must be decided in
advance and with full consent of both the parties.

Negotiation and its approaches 5
 Disclosure of facts- This risk is related to the fact of disclosure of information. If any
related information which needs to be disclosed is kept hidden it can create a huge
impact in final decision making.
 Bound to joint gains- In some of the cases where one party is more powerful than the
other one, they would force the other party to bear the loss. It can lead to force on
another party to convert that negotiation to problem-solving interest-based negotiation
(Filippini, Koller and Masiero, 2015).
 The threat to future relations- This kind of negotiation is very competitive in nature
which can increase the domination of one party over the other. In order to save
themselves from this domination losing party may cut off all the future relations
which can cause negative impacts to both the parties.
 Competition can increase the cost- The greed for win can create the extensive
competition among both the parties which leads to creation of rivals. In order to
protect them, they need to increase the security and confidentiality in the organisation.
This can lead to increase in overall operational cost of company (Hua, 2015).
Probable impact on Relationships
The impacts are:
 Less importance to negotiation Parties- This kind of negotiation is done with the
motive to earn more profit. There is less emphasis given to establishing relations with
the parties and more importance is given to earning the profit.
 Formal languages are used in communication- They need to use formal languages
in the negotiation as both the parties want to gain as much profit as they can. This can
make the communication more formal and rough.
 Talk more and listen less- In order to gain more profit each party tries to make their
point more clearly which leads to more talking about the problem and listening less
about the issues.
 Winning party is always in domination to losing party- If this kind of negotiation
is used for a long time and that organization has a history of winning all the
negotiations, this creates a sort of domination of winning party over losing parties.
Winning the negotiations implies the growth of the organization which can lead to
increase in power.

Negotiation and its approaches 6
 Negotiator has the option of closing the negotiation by giving its final offer- This
is done when the parties are too competitive in nature and they both are very strong
competitors. In order to end the negotiation the negotiator can give its final offer and
close the negotiation.
 No bargaining take place- This kind of negotiation takes place on professional
grounds only. The rules of negotiation are also set in advance so the chances of
bargaining do not exist, as bargaining can create the chance for gain for both of the
parties which create a win-win situation (Brett and Thompson, 2016).
Problem Solving Interest Based Negotiation
It is a “win-win” situation which is made to increase the joint gains, reasonable and open
communication. It is basically cooperative in nature. The outcomes expected are creative and
durable solutions and improvement of relations. They have separation of people from the
problems; the focus is always on interest not on positions, generating options for mutual
gains, assurance of fair process and practice for direct communication. Initially, there is
submission of proposals and problems defined as per in traditional bargaining and then both
the parties solve the problems together (Starr-Glass, 2014).
Characteristics of the approach
The characteristics are as follows:
 Focus on Issues, not on People or Positions- In this kind of negotiation the entire
focus is on the problem not on the person due to which the issue is created.
 There is the use of reasons rather than power- The reason for the problem is
explained rather than focusing on who is more powerful. The reason behind this is the
nature of the approach which states that there is no loss every party is going to gain
something (Agndal, Åge, and Eklinder-Frick, 2017).
Assumption
The assumptions are:
 Common interest, benefits, and needs exist- The focus is on the solution determined
which can create the benefits for every party.

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 Trust building takes place- It takes place as the solutions considered are obtained
with full discussion and consideration of all the members.
 Accurate exchange of information- Every party is going to gain something so there
is no reason for the competition between the parties which increase the honesty in
negotiation.
 Discussion of all the facts needed to obtain a solution- This assumption states that
all issues relating to negotiation have taken place while proposing a solution. It is
assumed that decision has taken place with full disclosure of all the related facts and
figures.
 Problems are solved through knowledge and creativity- It is assumed that the
solution of the problem is derived from knowledge and creative thinking as the
decision making takes place only after the discussion with both the parties.
 Mutual gain- The solution is derived with the motive of mutual gain which means
that both the parties should get some of the benefit from the negotiation (Khadhraoui,
et al., 2017)
Risk
The Risk associated is following:
 The negotiator will be forced to adopt another approach- There is a high risk that
decision will be in favour of one party and other will be forced to accept that decision.
 The principal of disclosure of all the facts may not be the same for both of the parties-
There is a huge risk that both of the parties will not disclose all the facts which can
directly or indirectly impact the solution of a problem (Mnookin, 2015)
Impacts on Relations
The impacts of relations of this kind of negotiation are:
 Less importance given to opposing parties- Importance is always given to solving a
particular problem not on the parties due to which the problem occurs.
 The policy of talk less listen more- Focus is on solving a particular problem which
involves listening all the facts available to study so that effective solution can be
obtained.

Negotiation and its approaches 8
 Positive and friendly attitude- The motive of this negotiation is to solve the problem
not to gain profit. This creates a positive and friendly attitude as both of the parties
know that they both are going to gain something from this kind of negotiation.
 Changes in the deal can take place even if there is a loss to one party- The change
in the deal will take place only if that change is causing a certain amount of profit to
both of the parties. If there is a possibility in which gives more profit to one party and
other is on loss than that solution is not considered.
 Readiness to cooperate and sacrifice- This happens because the focus is on
increasing the mutual gains, not on individual gain (Linebarger, Enterline and Liebel,
2018).
Findings and Recommendations
In this report, a comparison of attributes of two approaches to negotiation is conducted. The
approaches are Competitive positional-based negotiation and Problem Solving Interest-Based
Negotiation (Katz and Pattarini, 2008)
Recommendations
The strategy for Negotiation needed in this situation is Problem Solving Interest Based
Negotiation which is based on the “Win-Win” strategy for Negotiation (Wheeler, 2010).
This kind of negotiation is helpful for the employees of the organisation. In this, problem-
solving is the main focus. This is the kind of skills which should be learnt by the employees
of the organisation. The organisation is a beverage manufacturing industry and customer
satisfaction is a major motive so the “Win- Win” strategy is the best for this situation. The
employees must learn to find out the solution which can be profitable to both the organisation
and the customers. They will learn new skills and the organisation will get more profit.
Positive interaction among the employees will increase the team spirit, efficiency and
motivation (Herbst, Voeth and Meister, 2011)
Conclusion
In the previous report, firstly in the introduction part the meaning of negotiation and the two
approaches are defined and the reason for preparing the report is introduced. Then,

Negotiation and its approaches 9
competitive positional-based negotiation is introduced as a topic then its characteristics,
assumptions, risks and probable impacts on relations are explained. After this the problem
solving interest-based negotiation is introduced and in its detail explanation includes the
characteristics, assumptions, risks associated and the probable impacts on relations are
explained. Lastly in the findings and recommendations part the best approach which can be
used for the negotiation with the major reasons for recommendations are determined.

Negotiation and its approaches 10
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