Negotiation Process and Stakeholders

This report provides an analysis of the negotiation process, including the definition of negotiation, reasons for its occurrence, and key stakeholders involved. It also evaluates the steps and information required for negotiating and generating deals. Additionally, the report explains the RFP process and the relevant types of documentation required. It concludes with recommendations for dealing with issues that can arise during the negotiation process.

Pitching and Negotiation
Skills

Contents
INTRODUCTION...........................................................................................................................1
TASK 1............................................................................................................................................1
P1 Determine what is a negotiation, why it occurs and who the key stakeholders are during a
negotiation process......................................................................................................................1
P2 Evaluate the key steps and information required for negotiating and generating deals.........3
M1 Present a concise rationale for the negotiation process, including detailed steps that
organisations go through during a negotiation process and the information required in
preparation...................................................................................................................................4
D1 Critically evaluate the steps of the negotiation process and present valid solutions for
dealing with issues that can arise.................................................................................................5
TASK 2............................................................................................................................................6
P3 Explain the RFP Process and the relevant types of documentation required.........................6
P4 Explain the contractual process and how relevant documentation is managed and
monitored.....................................................................................................................................7
M2 Evaluate the RFP process within an organisational context, outlining the key
documentation required and consequences of breaching the terms of an agreement..................9
D2 Critically evaluate the competitive tendering and contract process and make
recommendations for completing a successful tender with minimal risk..................................10
CONCLUSION..............................................................................................................................11
REFERENCES..............................................................................................................................12

INTRODUCTION
Business negotiation refers to a process of open discussion between two or more than two
business organisation or parties to resolve a conflict or an issue (Ehlich and Wagner, 2011).
Dynamic and competitive nature of business environment has increased the importance and
significance of negotiation agreements between organisations operating in a similar dimension.
In the following report, an attempt has been made to analyse the term negotiation and the factors
contributing to its existence along with the important stakeholders during the process of
negotiation. The report also aims to determine and critically evaluate the process of negotiation
with respect to various steps and stages in the process of negotiation. In the report, the process of
RFP and contractual management are also being evaluated along with critical evaluation of the
competitive tendering and contractual process.
TASK 1
P1 Determine what is a negotiation, why it occurs and who the key stakeholders are during a
negotiation process.
Negotiation can be termed as a strategic process wherein two or more than two business
organisations come together to conduct an open discussion for resolving any particular conflict
or an issue which both the parties might be facing (De Moor and Weigand, 2004). Under
negotiation deals, an effort is made by business organisations to find a solution for ending a
dispute by mutual agreement and compromise. Mutual acceptance lays the foundation of a
negotiation and based on the respective position of the business organisations in the conflict,
compromise is made in an effective manner which brings positive outcomes and results to both
the parties involved in the negotiation. Negotiation process is primarily influenced when
business organisations feel the need to arrive at a mutual conclusion to solve an existing problem
which they expect to bring better positive results. Negotiation process in the context of a
business organisation might also occur internally within the organisation. Significant reasons
why negotiation process occurs between business organisations are being explained as follows:
Avoiding business conflicts: Negotiation aims to mitigating the negative impacts of an
ongoing business conflict or an issue and arrive at an agreement which brings positive results for
the parties involved in the process of negotiation. When there exists a conflict between business
organisations which operate under a similar dimension, negotiation deals are considered the best
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way to reduce adverse impacts and continue profitable operations in harmony (Lewicki and
Hiam, 2011). Hence, the primary reason why a negotiation process occurs is to eliminate the
conflict of interest between two organisation or parties and operate in harmony.
Creating win-win situation: Negotiation process occurs in a business context to ensure that
the parties involved in negotiation are getting some benefit out of the deal. Motivating factor for
the process of negotiation in any context is the need to derive positive value for all parties
instead of competing to harm and impact each other’s interests.
Mutual respect and image: When there exists an issue or a business conflict in an
organisation context, it creates an adverse impact on the image of the parties involved in conflict.
For example, salary issues in a company might affect the image and reputation of the
organisation. Hence, negotiation process is aimed to enhance the mutual respect and the image
and goodwill of parties which are involved in a conflict (Agndal, 2007).
Different perspectives and mindsets: Different perspectives and mindsets influence the
process of negotiation in a very significant manner. This is one of the primary reasons why the
process of negotiation occurs in a business context whether internally or externally. For example,
existing compensation may seem unfair to the employees because of different mindset and
opinion which leads to the need of negotiation between the management and the employees.
Stakeholders during a negotiation process:
During the process of negotiation, many stakeholders and their interests have to be
considered by the parties involved in negotiation which are being discussed below:
Business Organisations: Primary stakeholders involved in the process of negotiation are
the business organisations who are expecting to resolve a conflict by entering into a mutual
agreement. In this regards, both the parties have a tendency to ensure maximum satisfaction of
their individual interests and at the same time, ensure a positive valence for the other party.
Employees: A negotiation process in any business context is likely to create an impact and
influence on the interest of employees in the organisation which has to be considered before
arriving at a negotiation conclusion by the management (Watson, Osborne‐Brown and
Longhurst, 2002).
Customers: Needs and interests of customers may be affected by a business negotiation
deal. For example, two competitors in a similar dimension may agree to work together for
enjoying monopoly prices which will negatively effect the needs and interests of customers.
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Hence, it is necessary to evaluate the positive as well as negative impacts of a negotiation on the
interests of the customers.
Shareholders: Shareholders of the business organisation involved in a negotiation deal
will get impacted by the result of negotiation and the impact it will create on individual growth
and profitability of the organisations. Hence, priority should be given to the needs and interests
of shareholders as a major stakeholder in the negotiation process (Price and Cybulski, 2006).
Financial Institutions: In business situations where trade negotiations are made, financial
institutions and banks have a major role to play in ensuring the smooth transfer of funds or
furnishing guarantee on behalf of the company.
Government: Negotiation process between two or more companies might create an
influence and impact on the needs and interests of the government of the region which has to be
evaluated before closing a negotiation deal.
P2 Evaluate the key steps and information required for negotiating and generating deals.
Negotiation is a step-by-step process where the management of both the parties needs to
consider and evaluate many information and elements with an objective of arriving at a positive
mutual agreement. Essentially, the process of negotiation comprises of five important steps
which are being explained below:
Preparation: The first step in the process of negotiation involves preparing in detail which
is instrumental for the success of negotiation. Issues and conflicts to be resolved need to be
evaluated properly. Here, many things are to be considered by the management such as leverage
evaluation and identifying the position of both the parties in the process of negotiation which
also gives confidence (Zhu, 2011). This stage involves identification of the reputation of both the
parties, determining clear objectives and comprehending the role played by important
stakeholders in the process.
Definition of ground rules: This step involves communicating and providing important
information with respect to ground rules of negotiation such as the place of meeting and
negotiation, people who will attend the meeting, issues and conflicts which are to be resolved,
time constraints etcetera.
Clarification and justification: This is an important step where both the parties to
negotiation explain their respective positions and demands to the other parties. It is an
opportunity to explain, amplify and clarify their demands and positions and why it is important
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to agree the negotiation deal on the terms as stated by both the parties. Effectiveness of the
overall negotiation process is also influenced by the position assumed by parties after initial
clarification and justification of their demands and positions (Dietmeyer and Kaplan, 2004).
Bargaining and problem-solving: This step is the point where the parties get an
opportunity to come closer to their objectives. Here, it is crucial for both the parties to have a
positive mindset and arrive at a conclusion which is beneficial for both the parties involved in
negotiation. Planned arguments and having a logical approach determines the results and
outcomes of the bargaining stage in the process of negotiation.
Closure and implementation: It is the final step in the process of negotiation where the
deal is closed after both the parties come at a mutual agreement and necessary arrangements are
made to monitor the legal effectiveness and capacity of the negotiation deal. Proper and detailed
contract needs to be drafted for effective closure which contains and provides information about
the terms and conditions of negotiation for future legal binding and accountability (Adair and
Brett, 2004).
M1 Present a concise rationale for the negotiation process, including detailed steps that
organisations go through during a negotiation process and the information required in
preparation.
Every process of negotiation is a detailed five step procedure with each stage or step
having utmost importance in determining the success and effectiveness of overall negotiation. A
rationale for each step under the process of negotiation is as follows:
Preparation: It is crucial to prepare in advance to have a detailed information and be
confident in the negotiation communication. Without effective preparation and leverage
evaluation, a party may provide the chance to the other party to assume a dominating position in
the deal which is not desirable.
Definition of ground rules: Deciding the details about meeting well in-advance helps in
ensuring the limitation of constraints such as time, place, attendance etcetera. It helps in ensuring
proper conduction of the meeting.
Clarification and justification: It is an essential step to help the parties understand each
other’s position in the negotiation and the issue with respect to the impact it creates on both the
parties.
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Bargaining and problem-solving: Effective bargaining is imperative to ensure that both
the parties in the negotiation deal derive positive outcomes and benefit from entering into a
mutual agreement.
Closure and implementation: Closure and implementation of the negotiation deal is
important to ensure that no parties deny their responsibility and performance of the contract in
future and in the case it happens, a legal action can be taken as a remedial measure.
Information required in Preparation:
Preparing for negotiation requires a lot of information which needs to be collected and
analysed for ensuring a successful negotiation deal (Fells, 1996). Here are some of the elements
to be considered:
 Nature of the conflict and problem being faced and its impact on the business operations
 Information about the other organisation and the history of the company
 Leverage evaluation and the position assumed in the negotiation deal
 People and stakeholders involved in the conflict and their perspectives on the conflict
 Information about the objectives and the priorities of the company
 A detailed plan and strategy for entering into the negotiation deal and logical arguments.
D1 Critically evaluate the steps of the negotiation process and present valid solutions for dealing
with issues that can arise.
Issues: During preparation, lack of required information might be an issue which can arise to
adversely affect the success of negotiation process.
 Time constraints and mutual agreement for deciding the conditions of meeting for
negotiation might be another potential issue which can harm negotiation process (Kraus,
Wilkenfeld and Zlotkin, 1995). A tendency of both the parties to satisfy personal interest and derive more benefits out of
the negotiation due to lack of trust and mutual respect can be another challenge in the
process of negotiation. Lack of empathy and having a negative outlook towards the negotiation process can
affect the process of negotiation. Viewing negotiation as a battle and the intent to win at all costs is another issue which
may arise during the process of bargaining which can affect success of negotiation.
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Solutions:
 Management information systems can be used by the parties to derive complete and
detailed information in the preparation stage along with effective market and internal
research (Nadler and Shestowsky, 2006).
 Schedule of the meeting should be mutually agreed to and the mode of meeting can be
flexible to mitigate the time and place constraints.
 Mutual trust and the positive intention of arriving at a conclusion which is beneficial for
both the parties is essential for determining the success of negotiation process.
 Legal representatives of both the parties should be involved in each stage and step during
the process of negotiation to ensure contractual capacity.
TASK 2
P3 Explain the RFP Process and the relevant types of documentation required.
Request for Proposal is a document or a type of formal request which is often posted by large
government agencies or big corporations to elicit responses from different vendors and sellers for
satisfaction of a need or solution of a problem of the issuer (Andrea, 2003). This is a very
important document which specifies the needs and requirement of the issuer and also outlines the
criterion on which the seller or the vendor will be evaluated to make the final decision. Different
steps and stages involved in the process of RFP along with the important documentation required
at each stage are being discussed below:
1. Assessment: First step in the process of RFP involves an assessment and identification of
the needs and requirements of the issuer, an in-depth analysis of the current gaps and
deficiencies in the system and the specific functional areas which are to be improved or
enhanced with the help of a solution. This stage outlines the project requirements and
guidelines. An important and crucial document which is required as an outcome of the
RFP stage is the project description and guidelines which also provides information about
the elements which will be used to evaluate sellers and vendors.
2. Technical Specifications: Listing out the important technical requirements of the project
and functional solution which is required can help in communicating clear expectations to
the sellers and vendors. A detailed and comprehensive document specifying the technical
requirements is required to be maintained at this stage which can further be used for
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holding vendor contractually accountable in case of non-delivery of the required
technology or solution (Lapham and et. al., 2016).
3. Publishing the RFP: Crafting the RFP document and publishing the RFP document is the
next important step in the complete process which requires certain strategical planning.
Development of a publication strategy for RFP which allows a number of responses from
competitive sellers and vendors is essential to make the best decision for signing the
contract. RFP document needs to be managed and monitored effectively at this stage.
4. Response Evaluation: It is a very crucial step where the issuing company or corporation
evaluates the responses received from different sellers and vendors aiming to provide the
technical solution required. Creation of a team with different stakeholders with expertise
in different functional areas is essential for the purpose of evaluation so that the project
submission and responses can be comprehensively evaluated. A sheet or a document with
proper grading and ranking for the response received from each seller should be prepared
at this stage which can also help in simplification of the ranking process and the results
can be verified by any seller or vendor for future references.
5. Selection and Negotiation: After the agreement of the evaluation team, selection of the
vendor or seller has to be communicated to all the potential vendors which marks the
initiation of negotiation and contract with the selected vendor. It is crucial to address
every element of RFP with the help of documents such as terms and conditions, costs and
payment milestones and statement of work. Statement of work is a very crucial document
to be managed and monitored at this stage which outlines the future course of action in
the project.
P4 Explain the contractual process and how relevant documentation is managed and monitored.
Contractual process can be termed as the series of steps which are taken by an organisation
while creation, implementation and execution of a legal agreement to ensure the legal capacity of
the contract in an effective and efficient manner (Schwartz and Watson, 2013). Although every
organisation has different steps which determine effectiveness of its contractual process, some
common steps which are essential to be considered while creation of any contract are being
discussed below:
1. Selecting a contract: First and foremost, step in the process of contract management is to
select a suitable and appropriate type of contract which can be determined with the help
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of needs and requirements of the particular transaction. However, it should be noted that
using any form of contract other than the standard agreement forms requires a prior
approval from the government authorities before drafting the contract.
2. Collecting the necessary information: Collecting and analysing all the relevant
information to the details of the contract is important to ensure effective contractual
management. At this stage, various documents which are central to the overall contract
such as budget, finance and cost payments, statement of work and additional supporting
documents needs to be managed effectively.
3. Choosing a negotiator: Appointment of a person with the capacity to negotiate the terms
of agreement is an important step in the process of contractual management. It is
important that the person who is responsible for negotiating and binding the terms of
agreement is an authorised signatory of the corporation (Tian, He and Fu, 2017).
4. Contract review process: Before the final contract signing process, reviewing each and
every detail and specification mentioned in the final proposal or contract document by
both the parties involved in the process is very important to execute the contractual
process effectively. This stage provides the opportunity to make any final changes or
modifications in the contract specifications before the signing and legal capacity of the
contract in enforced.
5. Contract signing: Last step in the contractual process involves final documentation and
signing of the contract after obtaining an agreement by both the parties to the
specification and details of the contract. After execution of contract signing process, both
the parties have a legal obligation to fulfil the terms and requirements of the contract and
non-compliance can result into penalties and legal procedures.
Managing and monitoring relevant documentation:
Every contract requires important documentation such as Terms of Reference, Statement
of Work, Request for Proposal, Invitation to Tender etcetera to be effectively managed and
monitored in the following manner:
 Strategical ordering and organising each document with an electronic copy to be stored
digitally which can only be accessed by a number of individuals with formal
authorisation (Andreeva and et. al., 2017).
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 Using cloud storage to create a permanent record and drive of documents to avoid any
problems in case the local data is missing or removed.
 Implementation of access control system even in case of hard paper documentation to
prevent any unauthorised user to access the documents.
 Deploying a team of legal representatives to ensure effective execution of each document
essential within the process of contractual management.
M2 Evaluate the RFP process within an organisational context, outlining the key documentation
required and consequences of breaching the terms of an agreement.
BJSS is a IT consultancy firm which is headquartered in Leeds, United Kingdom and
provides unique software development services to other corporations (About BJSS, 2020).
Evaluation of the RFP process of BJSS is being done as follows:
1. Project Planning: At this stage, establishing of project boundaries and essential
components including payment schedule and budget is essential for the management of
BJSS. Important document at this stage for any IT Solution required by the BJSS is
proper details and specifications of the project.
2. Drafting the RFP: RFP should be drafted with the help of authorised people at the BJSS
with every technical information clearly mentioned to ensure that requirements are met
effectively. Importance of a document with technical specifications of the project
increases particularly in the case of BJSS since it is an IT Solution providing company
(Saito, Monden and Matsumoto, 2012).
3. Sharing RFP with vendors: Maximum responses from potential vendors and sellers are
aimed at this stage along with the important document containing statement or scope of
work.
4. Evaluation of responses: With the help of a team of different expert stakeholders, the
management of BJSS should evaluate different responses by conducting a background
check with the vendors to ensure the capacity and ability of the vendor in providing the
required solution and making the final selection and negotiation decision.
Consequences for breaching the terms of agreement:
 Right to monetary compensation including the benefits and damages borne by the victim
party to the contract due to breach of agreement (Borgonovo and Gatti, 2013).
 In specific cases, specific performance of the contract may be a consequence.
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 Any other consequences as outlined by the terms of contract in case of breach of terms of
agreement under the contract.
D2 Critically evaluate the competitive tendering and contract process and make
recommendations for completing a successful tender with minimal risk.
Competitive Tendering:
It refers to a process where competition is promoted between the sellers and vendors
interested in winning tenders over a proposal request by adopting transparency and giving equal
opportunity to every interest party (Boukendour and Hughes, 2014).
Advantages: It helps in maximisation of value for money for the client as it makes possible a number
of evaluations before making the final decision. It encourages fair competition among the sellers. It makes the process of applying for a tender easier and accessible.
 It provides equal opportunity.
Disadvantages: It is often witnessed that leading suppliers may not tender or submit bids which results
into limitation of potential sellers and vendors. Communication barriers between the seller and the customers also act as disadvantage of
the competitive tendering process.
Contractual Process:
Contractual process can be termed as the series of steps which are taken by an
organisation while creation, implementation and execution of a legal agreement to ensure the
legal capacity of the contract in an effective and efficient manner
Advantages:
 It helps in reducing risk and ensure effective execution of the contract requirements
(Demirag and et. al., 2012).
 It helps to provide clarity to the multiple stakeholder and parties included in the process
of contractual management.
Disadvantages: Formation of contracts require a great amount of time and money which is its biggest
disadvantage.
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 Creation of contract for mitigating company’s risk induces suspicion and creates a
litigious atmosphere where employees can also approach legal advice before signing or
entering into a contract with the company.
Recommendations for completing a tender with minimal risk:
 Ensuring a clear and detailed description of the tender along with essential documents
which will further form a part of the main legal contract between the parties.
 Creating a risk register to analyse and determine the impact of each type of risk which is
associated with tenders such as contract risks, appointment risks, clear documentation
risks etcetera (Dukes, Frohlich and Ma, 1992).
 Specification of the time and project schedule along with payment timeline as a part of
tender information.
 Specification of the tender assessment criteria and providing information about the
finalisation process of contract and consequences in case of breach of agreement.
CONCLUSION
On the basis of above report, it can be interpreted that business negotiation is a very
important process that ensures protection of interest of the various parties involved in the process
and interest of stakeholders is also safeguarded. Negotiation is a process which involves different
steps and each step needs to be executed effectively with utmost attention to detail to ensure its
overall effectiveness. It can also be concluded that RFP is a process with detailed steps which
may depend on the specific requirements and needs of the organisation. At last, it can be
concluded that the process of contractual management is very essential to ensure legal obligation
and accomplishment of tasks requirement and various relevant documentation in the contractual
process are to be managed and monitored effectively.
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About BJSS. 2020. [Online]. Available thru<https://www.bjss.com/about/>
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