Volkswagen's Use of Negotiation Tactics in Business Report

This report provides a comprehensive overview of negotiation and its tactics within a business context, specifically using Volkswagen as a case study. It begins with an introduction outlining the aim and objectives of the report, followed by an exploration of the ethics, skills, and role of negotiation in resolving conflicts and fostering positive relationships. The report delves into various negotiation tactics, the negotiation process, and relevant theories. It highlights the significance of negotiation for both small and large organizations, emphasizing its benefits in policy-making, problem-solving, and decision-making. The report also discusses the importance of ethical considerations, skills such as active listening and verbal interaction, and the role of negotiation in long-term success, relationship maintenance, and revenue generation. The report concludes by summarizing the key findings and emphasizing the crucial role of negotiation in achieving organizational objectives and maintaining a competitive advantage.

Negotiation and its
Tactics

TABLE OF CONTENTS
INTRODUCTION...........................................................................................................................1
Aim and objectives......................................................................................................................3
Ethics of negotiation...................................................................................................................4
Skills of negotiation....................................................................................................................4
Role of negotiation......................................................................................................................5
Significance.................................................................................................................................6
Negotiation tactics.......................................................................................................................7
Process of negotiation.................................................................................................................8
Theories of negotiation.............................................................................................................10
CONCLUSION..............................................................................................................................11
REFERENCES..............................................................................................................................12

INTRODUCTION
Negotiation is a healthy discussion between two parties or more than this in order to
resolve various issues or conflicts for maintaining friendly relations. However, main objective of
this term is to identify all hidden points of differences by interacting with each other to reach at
the final conclusion (Al-Khatib, 2011). Therefore, major motive of this assignment is to outline
the effects or vital role of negotiation strategy at different levels of business as well as while
handling a large project. Volkswagen is one of the famous automotive companies by having its
branches in number of countries for gaining maximum benefits by satisfying needs or demands
of local and foreign clients. Thus, it has been observed that selected firm was engaged in number
of large projects which are not easy to be handled without adopting this tool. Basically, overall
report is going to express the opinions of different authors in order to understand the term
negotiation in more deeper sense. Hence, aim, objectives, tactics, skills and necessary roles of
negotiation are going to be outlined in this project for understanding the effectiveness of scheme.
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(Source: New Volkswagen, 2018)
NEGOTIATION
According to Dür, (2010) negotiation is a friendly discussion between two parties
involved in a conflict on some specific topic for clarifying issues by highlighting all the visible
or invisible points. On the other hand Mcelreath, (2011) assessed that two parties involving in a
discussion is believing that they need to resolve their conflicts for maintaining positive relations
between them. In fact, it plays a major role in resolving barriers with the help of mediator or
arbitration as they are responsible for transferring information from one party to another. Hence,
management team of Volkswagen is adopting this tool while dealing with their partners or
different shareholders in order to make overall terms or conditions clear (Mateo, 2010). Thus,
negotiation is essential for either small or large organization due to its efficiency or effectiveness
as it helps the enterprise as well as common man to run their life in a better manner. Hence, some
of the major things which shows that usage of negotiation is beneficial for particular individual
or common man and a business entity. Apart from this Wong, (2013) stated that negotiation
strategy is very advantageous for success of an association which is highlighted as follows:-
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Illustration 1: New Volkswagen

 First and foremost thing is that it aids higher authority of an organization while making
policy for overall company
 Creates a healthy environment at workplace
 Clear out hidden issues or barriers
 Supports while auditing process
 Aids in removing confusion with investors or various shareholders (Krakauer, 2011).
(Source: ALLEN, 2016)
Aim and objectives
According to Kissinger, (2011) negotiation is highly useful or appropriate for
Volkswagen because it is a key to success by eradicating invisible barriers identified at
workstation. Thus, major aim and objectives of this strategy are described as below:-
 Identify problems which affect the development of an enterprise
 Resolve the conflicts between staff members or any other individuals available at
workplace
 Minimize the contentions or problems
 Create a healthy environment (Hormann, 2011).
 Make healthy relations between employer and employee
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Illustration 3: Negotiate Illustration 2: Negotiate

 Acts as a support model while handling or managing a large project.
Ethics of negotiation
According to Winterheld, (2013) negotiation is an appropriate method of resolving issues
between two parties but in a ethical way which means without exploiting rights of other.
Therefore, equality needs to maintain while solving problem and follow necessary guidelines
which is required during negotiation process. Mainly it is not easy to remove problems between
private parties due to number of problems like hidden factors which affects their relations in
various manner. Therefore, various elements which is essential to consider in order to maintain
ethics in negotiation process which is described as follows:-
 Respect thoughts or opinions of both the parties.
 Need to consider necessary elements before coming at any conclusion.
 Do not exploit the rights of members involved in a negotiation process.
 Provides equality opportunity to both the parties.
Skills of negotiation
According to Aquilar, (2010) it has been analysed that negotiant skills is all about
desirable talent whose main objective is to discuss things in order to reach at final conclusion.
Therefore a successful negotiation need to gathered two parties for making them close so that
they can make a final agreement which is accepted by both. Thus, topmost skills of negotiation
process is described as follows that are stated by Oriña, (2013):- Assessment of problem:- An appropriate negotiation process have the ability to analyse
the issue by determining the interest of each or every party involved in this. Preparation:- Before engaging in a discussion process an association need to design a
suitable meeting which consist of objectives, regions for trade and options to prescribed
objectives. Active listening:- Negotiators must have the talent of actively listen to another member
involving in a debate. It is indispensable to hear point of view of other party in order to
make compromises.
 Verbal interaction:- Parties involving in discussion process must know how to
communicate effectively for reaching at final results by satisfying needs or demands of
both members.
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Role of negotiation
According to Liu, (2011) negotiation is a term which plays a very crucial role in
development or achievement of selected firm or entire corporate world due to its efficiency and
effectiveness as it supports in maintaining peaceful environment of an association. In fact,
number of companies are adopting this strategy in order to run their business operations in most
appropriate way because it aids in encouraging employees towards friendly relations and advise
them to minimize conflicts. Volkswagen is having their branches in various other nations which
is not easy to handle without compromising as well as requires skilled or sensible employees so
that they get aware about the method of ruining a business entity. Along with this, they also
know the benefits of negotiation strategy at workplace as well as their weakness. Hence, major
role of above selected scheme is mentioned as follows:-
Problem solver: - According to this term it has been analysed that negotiation is a word
which plays a very eminent role in discussing hidden issues which helps an organization in
resolving their business problems in a defined time period (Wilson, 2011). Additionally, by
adopting this technique management can easily resolve barriers identified at workplace with the
help of corrective direction assisted by negotiation planner. For example; if employees is enable
to understand their job role then their supervisors is going to explain all the points by having a
healthy discussion with them for resolving this problem.
Decision maker: - Odell, (2010) states that decisional process is not that much simpler
because it requires suggestion or advice from expertise person as well as decision making skill
and off-course high level of confidence. Volkswagen is a large association where more than
billions of employees are working due to which it is not easy to pass a single decision without
consulting any other person. Thus, it is essential to conduct a meeting for discussing rights or
interest of workers and entire staff members in a healthy way. Therefore, before circulating a
final decision an organization need to negotiate with their overall team.
Observer: - As per this word, it has been denoted that negotiation also plays a role of
watching everything or circumstances with the help of various tool in order to resolve conflicts.
It means without observation process it is not easy to manage all the business activities and failed
to achieve objectives of negotiation . Thus, it is indispensable to determine things or various
facts or figures which plays a necessary role in accumulating relevant data that helps while
decision making process.
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Clarifying object: - One of the major obligation of this scheme is to clarify all the points
of contracts for removing obstacles faced by an organization. According to this term it has been
analysed that number of things get clarified with the use of negotiation strategy.
Policy designer:- Apart from all the above roles, policy making is also consider as one of
the major duty which is perform by corporation with the help of management team in order to
understand the demand of employees. In fact, managers are liable for finalizing company policy
as per consumer and employees requirement by doing healthy discussion.
Hence, according to Pan, (2011) above components shows that this strategy is very much
essential for proper functioning of an enterprise as it helps Volkswagen team in attaining their
organisational objectives or targets in a defined time period. Whereas, on the other hand Weber,
(2011) states that implementation of this strategy is much more difficult at workplace due to its
complication as it requires expertise advice in order to understand each or every point in an
appropriate manner.
Significance
Negotiation is indispensable for every large or small contracts as well as commercial and
non-commercial agreements because it act as a useful tool of problem solving by performing
various effective functions (ALLEN, 2016). Apart from business world, normal human beings are
also adopting this technology while resolving their personal confusions like; family disputes,
fights between friends and various other members. Along with this, it helps them by clearing
differences between two individuals which are engaged in a discussion. Thus, it has been
identified that negotiation is mandatory for those organization which are handling or running a
very big projects in order to solve issues occurred while doing a business. In fact, it is not easy to
convince a customer or suppliers without using this skill. Thus, number of factors are identified
which shows that negotiation is essential or and very much significant for development of an
association is stated as follows:-
Long term success:- According to Patricelli, (2011) this term is consider one of the major
factor which shows that negotiation is indispensable is that it supports in attaining long term
achievement by performing business activities in most appropriate manner . Along with this,
compromising with customers is helpful for company in gaining their trust or loyalty as well as
able to build a positive goodwill at marketplace.
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Maintenance of relationship: - If two parties which are involved in a fight get succeeded
in resolving their issues or conflicts and create a friendly relations then it helps them in attaining
similar objectives in a defined time period. Moreover, healthy connection between staff members
aids them in accomplishing assigned job in a minimum time frame by satisfying needs or
demands of customers.
Mutual benefits: - As per this term it is analysed that if there is absence of any conflicts
or disputes then an organization or any team can easily gain mutual benefits by completing their
business operations as soon as possible. In fact this advantageous is possible with the help of
togetherness as if overall group members are working by coordinating with each other then they
can easily gain competitive advantage from marketplace (Wang and Yu, 2013) .
Creation of win-win situation: - According to this terminology if two parties are
involving in a contract then both are ready for compromising in which not a single party can win.
It means both are the winners and believing in solving problem which affects the success of an
enterprise. Hence, negotiation is a strategy used for success of an enterprise by stabilizing the
violent situation.
Generate revenue:- According to this term, it has been assessed that one of the major
factors which shows that negotiation is mandatory for development of an enterprise because it
supports in maximizing return on their company initial investment. For example; if an
association does not have any issues or barriers with customers and succeeded in convincing
different customers then they can easily generate more or more revenue (New Volkswagen,
2018). As a result, an organization may able to build their goodwill at marketplace.
Negotiation tactics
It is a term which means designing a strategy for attaining specific goal of an association
with the use of various styles which is designed as follows:-
Negotiation styles: - It has been identified that there are five different types of
negotiation are available that are written below:-
Accommodating :- (highly sensitive in emotions, connection and body language)
Competing:- (shows the dominating nature in which individuals are ready to compete
with each other by expressing their opinions and thoughts in front of each other)
Collaborating:- (they are open and very genuine as well as try to understand the concerns
or interest of other contractor )
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Avoiding:- (they are trying to neglect the situation and do not want to involve in a
negotiation process)
Compromising:- (ready for sacrificing without demand much more thing in order to
resolve situation).
Hence, it has been analysed that negotiation is an appropriate process of maintaining the
environment of workplace by attaining set objectives or goals in a minimum duration.
Process of negotiation
According to Pruitt, (2013) negotiation is an open procedure between two commercial
parties in order to identify an effective or acceptable solutions to a difficult circumstances. In
fact, it will consider all the essential steps which is required for minimizing a problem or barriers
which will affect enhancement of an association . Thus, five major steps that are involved while
negotiating process is described as follows:-
(Stage: 1) Preparation and planning:- Initially, an organization need to get aware about the
reason behind conflict, members involved in it and various other thing which is required while
planning a negotiation. Mainly an effective preparation is essential for avoiding any mistake or
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Illustration 4: Stages of negotiation
(Source: Stages of negotiation, 2017)

errors while performing these activities (Winterheld, Simpson and Oriña, 2013).
(Stage: 2) Define rules: - After making plan or necessary strategy which is used by company to
resolve their issues or conflicts, it is the time for designing effective rules or regulations which
are applicable on every member of an association. In fact, it is essential for executing this
process in more efficient way as it supports in resolving conflicts.
(Stage: 3) Clarification and justification:- After analysing above plans or steps it is necessary
to clarify all the factors or points of differences and justified it in order to attaining objectives of
negotiating process in appropriate way. In this stage it is used by company for identifying any
hidden problems and ensure that process which is adopting is very much effective for solving
issues (Rojot, 2016).
(Stage: 4) Bargaining and problem solving: - In this phase, an association is going to represent
the issue in front of both the parties for reaching at final stage. Along with this trying to manage
all the activities in most appropriate manner. It means solutions has been made at this stage by
understanding the problems.
(Stage: 5) Closure and implementation: - At the end of this process, final decision has been
taken by implementing planned strategy by meeting the needs or requirements of both the
parties involving in a conflict. Moreover, in this phase an organization is going to implement
scheme which is designed by them and get succeeded in resolving issue which affects success
of an association.
Hence, it has been understood that process of negotiation is follow by five major steps
which supports Volkswagen in resolving their various organizational barriers that have a greater
impact on a development of an enterprise. According to survey report it has been identified that
Volkswagen is confronting number of problems and faces various major scandals due to which
their sales volume are majorly get affected because of low productivity. As a result it influence
their success as well as revenue generation in various manner. Therefore, it is essential for
selected firm is to adopt negotiation strategies in order to minimize hidden problems and barriers
for attaining their company success (Belkin and Tarba, 2011).
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Theories of negotiation
According to Yiu, (2014) negotiation theory are mainly design for resolving issues faced
by company or any individual while using this strategy at workplace in order to resolve their
barriers. In fact number of scholars are come up with their idea or thoughts towards management
of this scheme by considering relevant information or data. Generally, negotiation is a very
complicated term which requires advice from expertise person for understanding their motive
and able to accomplish assigned task in a defined time period. Basically, foundations of theories
that fall under negotiation are decision analysis, behavioural decision making, game theory, etc.
On contrary to this Madan, (2013) states that other categorization of approaches are structural
analysis, strategic, processes and so on. Hence, various necessary frameworks or theories are
explained as follows:-
Game theory – This theory of negotiation was developed by Von Neumann and
Morgenstern in year 1994. It has been utilized by a number of researchers but most of the
developments are coined by Rapoport. This theory has more of negative points as according to
this the parties involve either loose the whole conflict or win, there in no in between situation in
this study. It has a limitation of having rigidity as it does not allow changes in case if goals are
established beforehand. There after game theory also makes the process of negotiation over
simple by restricting the number of participants and issues which are done on the basis of
assumption that people involve in a conflict are rational in what they do (Cheung, 2014).
Therefore, it has been analysed that game theory is one of the useful approach which might be
used by selected firm in resolving their conflicting situations.
Bilateral monopolistic theory approach: - According to this frameworks, an organization
does not aware about actual or precise problems whereas their investigation design will not
reflects this advance in their learnings. In fact, number of variable present in this are always
fluctuated due to changes in time period. Therefore, bargaining theory provides some allowances
for more complexities such as previous history or socio-economic, surrounding, intra
organizational bargaining as well as institutional requirement of various parties (Bahrammirzaee,
2013).
Theories non-mathematical nature: - It is based on verbal approach which consist of
different perspectives based on investigation for example; transactional assessment, exchange
theory, system, etc. Along with this it is a combination of number of investigation methods like;
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