Business Administration: Effective Negotiation Strategies Report

This report delves into the multifaceted realm of business negotiation, offering a comprehensive exploration of its core principles, strategies, and practical applications. It commences by outlining the fundamental requirements of a successful negotiation strategy, encompassing problem-solving, compromising, and competitive approaches. The report then examines the effective utilization of various negotiation techniques, such as active listening and problem-solving, emphasizing the importance of thorough research on the opposing party. A significant portion is dedicated to the impact of cultural differences on negotiation dynamics, underscoring the need for cross-cultural awareness. Furthermore, the report elucidates the purpose, scope, and objectives of negotiation, along with the importance of understanding one's authority and the negotiation stances of the other party. It also addresses fall-back stances and compromises that align with negotiating strategies, as well as the strengths and weaknesses of each party. The report concludes by emphasizing the significance of conducting negotiations within defined responsibility limits, maintaining accurate records, and adhering to organizational policies, ethical standards, and legal requirements. This report provides a thorough understanding of the key elements of business negotiation, equipping readers with valuable insights and practical knowledge for navigating complex business interactions.

BUSINESS
ADMINISTRATION 7

Table of Contents
INTRODUCTION ..........................................................................................................................1
MAIN BODY ..................................................................................................................................1
1.1 Requirements of a negotiation strategy.................................................................................1
1.2 Use of different negotiation techniques................................................................................2
1.3 Research on the other party can be used in negotiations......................................................2
1.4 Cultural differences might affect negotiations......................................................................3
2.1 Purpose, scope and objectives of the negotiation..................................................................3
2.2 Scope of their own authority for negotiating........................................................................3
2.3 Negotiating strategy..............................................................................................................4
2.4 Fall-back stances and compromises that align with the negotiating strategy and priorities. 4
2.5 Objectives and negotiation stances of other party.................................................................5
2.6 Strengths and weaknesses of the other party.........................................................................5
3.1 Negotiations within responsibility limits in a way that optimises opportunities..................6
3.2 Conduct of the negotiation in accordance with changing circumstances..............................6
3.3 Accurate records of negotiations, outcomes and agreements made......................................7
3.4 Organisational policies and procedures, and legal and ethical requirements when carrying
out business negotiations.............................................................................................................7
CONCLUSION ...............................................................................................................................8
REFERENCES................................................................................................................................9

INTRODUCTION
Business administration considers as necessary part of management and it helps in
managing an economic activity in order to gain the profits. It consists managing business
operations, decision making, people and also some other resources for achieving the specific
objectives or goals. This present report is based on negotiation in business environment.
Negation is process where two or more than two parties with various goals consult problems to
find acceptable solution (Kutvonen, Norta and Ruohomaa, 2012). There will be discussion about
the procedures, policies, ethical and legal requirements at the time of carrying business
negotiations. Under this mention report will be discuss about cultural differences which affect
the negotiations. Conduct negotiation in accordance with the changing circumstances will be
discussed here.
MAIN BODY
1.1 Requirements of a negotiation strategy
Negotiation refers to method through people can settle their differences. It is an effective
process through which an agreement is reached while neglecting dispute and argument. It is
communication procedure under which several parties make discussion about the issues and
make a common solutions. There are different kinds of negotiation strategies and their needs are
mention below:
Problem solving- Under this, both conflict parties are committing for analysing as well
as discussing the problems when they enter in to the long- term agreements.
Compromising- This strategy of negotiation seeks towards some of the fair balance
where two parties are appear for getting equitable deal (Lewis and et. al., 2017). In this, both the
parties are forgoing to their ideal outcomes, settle them so that it can satisfactory to the every
participant.
Competing- It treat process as competition that can be lost or won. In this strategy,
people which use this type of approach think that they are more superior. They can use any
negotiation tactics consisting deceptive ones.
Yielding- This strategy is not to be negotiate. There is conceding point that is not
necessary for one but also essential to the other party.
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These all are the different strategies of negotiation and their main aim is to resolve any
issues by developing a better solutions and also create healthy relationship among both parties.
1.2 Use of different negotiation techniques
Negotiation refers to style of consulting things between people in effort in order to come
at conclusion for satisfying all parties are involved (Lowe, Purchase and Ellis, 2012). It is
necessary in formal and informal daily transactions like for an instance negotiation situations of
sale, service delivery, lease and some of the other legal contracts. There are different techniques
of negotiation mention below as above:
To be better Listener- It is necessary that negotiators should be good listeners which can
listen to other with patiently and do not interrupt. Under this, it is essential to listen the proposal
of other party because it can come up with any uniqueness and also give better solution. It is
helpful in set up the negotiation in better manner.
Deal with problems- In this technique, it is essential to listen the problem of each person
with specific reason. Instead of neglect issues, understand problems of every person and also
deal with their issues by providing them better solutions (Weiss, 2014).
Don’t be in hurry to close deal- Under this, both parties should take time for discussing
things between themselves. It should be assure that decisions need to be win win situation for
both parties so that they can not face any other issues.
1.3 Research on the other party can be used in negotiations
In negotiation, there are two parties involved and arguing on the common issue. There is
a need to give them a common solution that can be beneficial for both parties. If there is one
party conduct investigation on another then, it will know about the time of issue, place, subject
and the main reason behind arising issue with proper evidence (Mani, Barua and Whinston,
2012). If one party conduct research on other then it should proof guilty to other party with
proper evidence. From this, one party can get benefited of this. On the other hand, one of
necessary negotiation aspect is to present case in clear manner and also provide the supporting
arguments as well as facts that can refuse arguments of other party. It will help in provide the
benefits to party that conduct an investigation on the other and also will provide positive
outcomes in a better and effective manner.
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1.4 Cultural differences might affect negotiations
In an organisation, there are many different people which belongs of various culture and
negotiate in their own way. Impact of culture on the negotiation is categorized in to the cross-
cultural and categorized along with the cultural characteristics. If there is a negotiation situation
among two parties which belong to different countries then their language physical appearance,
communication all will be different from each other (McDonald, Mcdonald Greg, 2012). Their
business culture will also be different from each other. Under this, it is necessary to know about
their culture and their way of working. There is a need to recognize their norms, values for the
interactions in which involving outsiders which may be differ. By identifying norms or culture of
both parties, understand their problems and reach at the common conclusion that can be
beneficial for both parties. From this, they can work together by understanding culture of each
other.
2.1 Purpose, scope and objectives of the negotiation
Purpose of Negotiation
Main purpose of the negotiation is to reach at an agreement to participate in activity that
will help in provide the mutual benefits. It resolves the disagreement and also prevent the
conflict from any escalating. The negotiation is helpful in provide the long- term success to
business. It is beneficial for company in order to enhance productivity and develop better
relationship (Thomason, Simendinger and Kiernan, 2012).
Scope of negotiation
The scope of negotiation is on the marketing, sales, industrial relations such as working
conditions, compensation to workers etc.
Objectives of negotiation
 The main objective of negotiation is to remove any obstacles among two parties.
 It helps in develop long term relationship among parties (Paul, Yeates and Cadle, 2014).
 It assess in improving the bottom line.
2.2 Scope of their own authority for negotiating
Authority plays an essential role in negotiations. When there is a need to negotiating deal
then deal with a person that is able to see deal through. In scope of authority, power is to be
delegated to an individual who is in agreement in order to carrying business related principles. It
is necessary to think about the job role that what they can have at the time of negotiating. If
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authority will be own then it will be helpful in take decisions without interfering of any person. If
there will be any other person involve or any other authority then there will a situation of ethical
dilemma will be arise and problem related to decision making in negotiation will be arise
(Siewiorek and et. al., 2012). In addition to this, own authority for negotiation helps in listen
problem of the other parties, conduct investigation, determine leverage points and many other
things. The authority will focus on the specific issues and listen problems of both the parties. In
context to own authority, it can make its own regulations and rules and take effective decision
that can help for both parties to overcome from specific issue.
2.3 Negotiating strategy
Strategy refers to overall approach in order to conduct negotiation. Under this, there is a
negotiation among company and supplier. In context to this, there is a competitive strategy
develop. In this, different steps are mention below:
Identification of negotiation goals- Under this, there is a need to determine goals
of the negotiation. Like there is a situation of negotiation among the supplier and an organisation
regarding raw material. With the help of this, basic goals could easily be attained right on time.
Developing examining questions to protect goals- Both the negotiators may have
different questions and this could directly impact upon goals. Henceforth, different questions
could easily protect goals and they can be attained in specific time frame.
Answering questions- Where the two negotiators came in front, questions may arise.
Therefore, it is required for both the negotiators to consider questions so that effective plans
could be easily developed.
Identification of appropriate tactics- Considering all the questions directly pulls out right
decisions and through this appropriate tactics could easily be developed to resolve issues among
the negotiators.
Integrating these tactics in negotiation strategy- Considering all tactics and
implementation of them may aid a company and the supplier to their relations with each other ad
this could be implemented in negotiation strategy as well.
2.4 Fall-back stances and compromises that align with the negotiating strategy and priorities
Fall back stances refers to select a second option. Under this, there is a negotiation
between supplier and company about the cost as well as quality of raw materials. The supplier
wants to provide its raw material to company in £20 but company wants to purchase it in £18.
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So, there is a situation of negotiation arise between both the parties and it is known as fall- back
stances. On the other hands, they both can be compromises with the help of using the
compromising strategies (Steers and Nardon, 2014). In addition to this, both parties can agree on
the specific cost which can be beneficial for supplier and an organisation. They can be align with
the compromising strategy on negotiation and priorities. They can come on the £19 and in this,
company enhance £1 and supplier loss £1. They both are agreed in £19 because of quality.
Among many suppliers, this is one the one supplier that provide the better quality of raw
materials. Company purchase raw material for producing the products as well as services which
can satisfy needs and demands of consumers in an effective manner.
2.5 Objectives and negotiation stances of other party
Under this, it can be done by the preliminary interviews with those people which have
done the business with other party. There can be exchange information regarding targets on the
initial proposals with other party before starts negotiation. The objectives of both parties which
are involve in negotiation are different from each other (Teece, Peteraf and Leih, 2016). In this,
objectives of other party i.e. supplier is to provide its raw material of high cost so that it can earn
profit because the quality of its its raw material is good. Its main focus on providing raw material
to company that any other supplier can not have. On the other hand, there are some negotiation
stances of other party such as supplier wants to provide its raw materials in £20 because of the
high quality standard product and there is an another supplier that want to provide offer its raw-
materials in £18 because it quality of raw material is medium. There is less choices to the
company because of the selected suppliers.
2.6 Strengths and weaknesses of the other party
There are two different parties involved in the process of negotiation like supplier and
company. There are some strengths and also weaknesses of supplier is mention below as above:
Strengths
 The main strength of supplier is that it provides high quality of raw materials to company.
 Supplier has negotiation skill to give its raw materials in £20.
 It makes innovation in its raw materials so that company can produce the products or
services accordingly which can satisfy demands or needs of consumers in a better
manner.
Weaknesses
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 Having limited opportunities in market as they don't have the option to choose from the
large number of organisations due to limited accessibility.
 The negotiation power of supplier is very low as they have less bargaining power in
comparison to other organisations.
3.1 Negotiations within responsibility limits in a way that optimises opportunities
Negotiation refers to formal discussion among people which have various intentions or
aims in business when they are trying to reach at an agreement ( Thomason, Simendinger and
Kiernan, 2013). It is a kind of set up or settlement. In the negotiation, two different parties find a
common solution on specific area. Under this, if company wants to purchase the raw material in
£20 but supplier is ready to give it in £22 then it will be disadvantage for suppler and provide
effective opportunity to them so that company can see other supplier and also deal with it. On the
other hand, if supplier is ready to offer its raw materials in £18 dollar instead of £20 then it will
provide opportunities to an organisation in order to reducing the cost. If raw material will be low
cost then it can produce the products by reducing cost of production and provide to consumers at
minimum cost. It will be helpful in maximise profit level of company (Vischer, 2012).
3.2 Conduct of the negotiation in accordance with changing circumstances
At the time of negotiation, it is necessary to adopt the negotiation style or tactic. Under
this, effective planning is helpful in understand about the change. Under this, if company can
make change in its policy that it can purchase raw materials in £18 then it will select a supplier
that can provide the raw materials in same cost. Other than this, there can be some other
circumstances such as:
 In this, company set its mindset to buy raw material in £20 and think that supplier will be
ready to give raw material in same cost but after then the cost in which supplier provide
raw material is £22, then it is a disadvantage for company (Siewiorek and et. al., 2012).
 Under this, if company set its cost to purchase materials from supplier is £20 and supplier
is ready to provide them in £18 then it will be beneficial for firm and it can purchase
better quality of raw material at reasonable cost. It will be beneficial for the company and
from this, it can provide its goods to consumers at minimum cost.
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3.3 Accurate records of negotiations, outcomes and agreements made
Record keeping related to negotiation is necessary and helpful for success of firm. It is
necessary for an organisation that it should keep records and also allocate due to importance
(Weiss, 2014). For company, record keeping system should be reliable, easy to be follow and
accurate etc. better record keeping is necessary in context to meeting financial commitments of
business along with providing information in which the business decisions for future is based.
Maintaining accurate records – the negotiation
In regards to negotiation, it is essential to maintain records throughout process. It is
essential for an organisation to keeping record in negotiation by note down minutes of
discussion. In addition to this, minutes are tangible record of meeting for participants and also
information source for those members which were unable to attend the meeting (Yi, 2014). The
record of meeting can be maintain on papers, system etc. It will be helpful in provide all details
related to negotiation in a better manner.
Maintaining accurate records – the outcome
In order to following negotiation and gain better outcome, it is necessary to record the
meeting minutes in a better manner. It is essential that all parties which involved in negotiation
should sign on agreement (Kutvonen, Norta and Ruohomaa, 2012).
Maintaining accurate records – the agreement
If in case an agreement has been made by following negotiation then it is necessary to be
documented as well as signed through all the parties. It can minimize risk of developing any
dispute.
3.4 Organisational policies and procedures, and legal and ethical requirements when carrying out
business negotiations
In business negotiation, it is necessary to considered policies and procedures of an
organisation, ethical and legal requirements. Under this, there are some rules, policies and also
procedures set through company related to negotiation. If company has fix budget to purchase
raw material and sign the contract in purchasing it then it is a policy of firm. It is necessary to
follow the organisational procedures and policies related to the negotiation. In negotiation
policies includes ultimate decision- maker, handling the disputes, agreement documentation and
many others (Lowe, Purchase and Ellis, 2012). On the other hand, there are many different
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legislations which need to consider at the time of negotiation. In negotiation process, company
need to consider Data Protection Act, Bribery Act, Sarbanes–Oxley Act etc.
When company conduct the negotiation process then it should not conduct any unethical
activities. Ethics refers to norms, values and principles which need to be followed. It is moral
principle that govern behaviour of a person in order to conduct an activity in better manner. In
addition to this, it is necessary to assure that negotiation should follow ethical negotiation
principles. If company will not follow ethics in negotiation then fit can develop negative impact
on reputation of business and firm can not sustain for long period of time at market place. Under
this, ethical negotiation is more successful when outcome is to satisfying to both the parties and
it depend on three different core values such as reciprocity, respect and trust (McDonald,
Mcdonald Greg, 2012).
CONCLUSION
It has been concluded from the above mention report that negotiation is helpful in
removing disputes and develop the positive relationship among two differer parties which work
together. Under given report studied about different purpose, scope and also objectives of
negotiation in better manner. There has been prepared fall- back stances as well as comprises
align with priorities and negotiating strategies. Negotiations with in the responsibilities which
limits in way that optimises opportunities has been mentioned in given report.
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REFERENCES
Books & Journals
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Routledge.
Lowe, S., Purchase, S. and Ellis, N., 2012. The drama of interaction within business networks.
Industrial Marketing Management. 41(3). pp.421-428.
Mani, D., Barua, A. and Whinston, A.B., 2012. An empirical analysis of the contractual and
information structures of business process outsourcing relationships. Information
Systems Research. 23(3-part-1). pp.618-634.
McDonald, G., Mcdonald Greg, 2012. System, method and business model for an
identity/credential service provider. U.S. Patent Application 13/096,118.
Paul, D., Yeates, D. and Cadle, J. eds., 2014. Business analysis. British Computer Society.
Sassen, S., 2016. The Global City: Strategic Site, New Frontier. In Managing Urban Futures
(pp. 89-104). Routledge.
Siewiorek, A. and et. al., 2012. Learning leadership skills in a simulated business environment.
Computers & Education. 58(1). pp.121-135.
Steers, R.M. and Nardon, L., 2014. Managing in the global economy. Routledge.
Teece, D., Peteraf, M. and Leih, S., 2016. Dynamic capabilities and organizational agility: Risk,
uncertainty, and strategy in the innovation economy. California Management
Review.58(4). pp.13-35.
Thomason, S.J., Simendinger, E. and Kiernan, D., 2013. Several determinants of successful
coopetition in small business. Journal of Small Business & Entrepreneurship. 26(1).
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Vischer, J.C., 2012. Workspace strategies: Environment as a tool for work. Springer Science &
Business Media.
Weiss, J.W., 2014. Business ethics: A stakeholder and issues management approach. Berrett-
Koehler Publishers.
Yi, H., 2014. Green businesses in a clean energy economy: Analyzing drivers of green business
growth in US states. Energy. 68. pp.922-929.
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