Negotiation/Conflict Resolution VIII Project

Running head: NEGOTIATION 1

NEGOTIATION 5

Negotiation Guide

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In business communication, it is essential to avoid any kind of conflict and choose an alternative that suits you and the other party as well for the peaceful commencement of business. Negotiation is very necessary because it helps the business to be succeeded and also helps organizations to develop good relationships in the business world. In this way, the mutual benefit can be achieved (Lewicki et al., 2016). Negotiation should be planned ahead and at the same time, the following steps should be followed while planning the negotiating terms because it is always better to be prepared for what is to come. In this assignment, each step of the negotiating planning will be discussed with the assistance of the real-world problem. The objective of this negotiation is to maintain the profit margin for each party.

Negotiating Goal: The first step is to decide the major objective or goal of the negotiating. For example, a firm wants its suppliers to reduce the amount of a single product to 800 dollars. Their goal would be to ask for the price reduction and to maintain their profit margin in their supplies.

Major Issues: Major issues constitute the problems that may arise during the negotiating deal. In this case, the suppliers want their price to be 1000 dollars per product and they do not want their product to be sold at a lower price to gain the profit margin.

Bargaining Mix: The bargaining mix contains the issues that are up for negotiation from both parties (Steele & Beasor, 1999). In this example, the price expectations of both parties are the problem that needs a solution. For both parties, their price demand is important because of their business.

Interests: It is the underlying concern behind the goal of each party. For example, in this case, both parties want to achieve profit in their sales and purchasing by bargaining on the price. Just like every business, the profit margin is a major concern here.

Alternatives: The best alternative in case of failure of negotiation is to find a middle ground for both parties which will be beneficial for each of them. In this case, the firm can ask the supplier to fix the price at 900 dollars per product which will be close to each party’s demand. They can also ask suppliers to supply more products per month. In this way, the dependence on other suppliers will be reduced and it will be beneficial for the supplier as well because of the increased sale of their products.

Limits: The resistance point the point beyond which, the negotiation cannot be discussed. The resistance point, in this case, is the price of more than 900 dollars because the company cannot afford the little margin in their profit gains. For a successful business, they need to gain more profit.

Other Party’s Goals: For negotiation, it is important to understand the expectations and demands of another party as well. In this case, another party also wants profit in their business and their resistance point is to lower the margin of their profit from 900. The major issue is the profit margin for both buyers and suppliers.

Target and Opening Bid: The target is the point where a company wants the conclusion of the negotiation. Their target would be to set the price at 900 dollars per product with an increased quantity of the products per month. It will be beneficial for the suppliers as well. Their opening bid would be to demand the price of product 800 but through negotiation, 900 would be their resistance point and they will not increase the price any further.

Social Context: While negotiating, it is important to value and respect the social context of the culture or the business world. It helps in creating a better reputation and it includes the following norms, culture, habits, laws and religious bindings. In this deal, the social context is to not undermine the interest of the partner that you are dealing with, which is the norm and culture of the business world as well. That is why; they will keep the interests of another party in mind as well.

Presentation: The presentation of negotiation is a very important part that concludes the success or failure of the deal. Their first objective will be to make other parties feel that they understand their concerns as well. They would talk about fulfilling their interests and gaining mutual benefit out of it. Their strategy would be to make them understand the benefits of this deal and to focus less on their own benefits or concerns.

References

Lewicki, R. J., Barry, B., & Saunders, D. M. (2016). Essentials of negotiation. McGraw-Hill Education.

Steele, P., & Beasor, T. (1999). Business negotiation: A practical workbook. Gower Publishing, Ltd..