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discussionweek5.docxWednesdayApr 15 at 5:42am
Our text describes bargaining as a situation where two or more parties have different interests and goals, and that parties are willing and able to communicate over the differences to come to an agreement on price, timing, and other details that might affect the bargain (Benton, 2014). Both parties are trying to win and avoid loses, and the fact that both parties acknowledge this allows them to come together to discuss terms and price. There is a basic understanding and recognition of need present between the parties, it is just agreeing on how to make the connection work. It is suggested by some professionals that a project manager's ability to negotiate can make a project a success or a complete failure (). Project managers need to rely on their bargaining skills often in situations where they need to make decisions in the best interest of their budget and their schedule. A project manager might encounter a situation where their usual supplier is unable to deliver during the time of a project, and the project manager is required to find a vendor or supplier they don't normally use. In this situation the project manager might have to try and negotiate on price to keep the transactions on par with their other supplier. A project might have a tight deadline and the timing might need to take place faster than usual, requiring the project manager to bargain with their supplier to speed things up. Another situation might be acquiring new items from their supplier and they need to negotiate the items and pricing for all future transactions. Finally, it could be the opposite where the project manager has plenty of time and they can search for the cheapest price.
Although I am not currently a project manager, as a manager of a small business I do encounter situations where negotiation and bargaining takes place. For example, because we are a small business we have a limited budget when it comes to hiring bands and event artists for our parties. Bands usually charge too much for what we can afford for a 4 hour set on a Friday or Saturday night. However, many local small town bands are flexible, both on price and the size of the set. In order for us to be able to provide live music to our guests we have bargained set prices with several local bands, which allows us to book out a schedule every 6 months and rotate the people who have been willing to work with us. In some situations we had to pay a bit more to get a really good band and a bigger following, in other situations the band had to cut down to a smaller set size like a duet set instead of a full 5 band crew to make the price work. At the end of the day, if it were not for successful bargaining, our event schedule would be very boring.
WednesdayApr 15 at 10am
Bargaining is a form of negotiations that allows two parties to negotiate terms and conditions of a product or service. Bargaining can be categorized into two different types. Distributive bargaining is common, and it deals with give and take from both parties. According to Benton ( 2014), the more one party gets, the less the other gets. Integrative bargaining allows both parties to find a solution that is beneficial for everyone. According to Benton (2014), by working together, both parties can increase the total profits available to be divided between them.
As a buyer, we aren’t always looking for the lowest price, in fact we are looking for a price that is fair and reasonable. In my experience, my bargaining or negotiations consist of distributive bargaining. Sometimes the government must give a little to get a lot. A previous effort that I was apart of and my have mentioned before was a procurement with Raytheon to repair 20 assets. Raytheon wanted more profit than what we have given in the past and what the weighted guidelines yielded . Most know that profit and risk go hand and hand. The higher the risk, usually the more profit a contractor will request. Raytheon wanted 4% more in profit than what we originally wanted to pay. After the teleconference, we had a meeting with the Program Manager, and she expressed how missions were impacted already with planes down and really needed those assets ahead of schedule. We agreed to Raytheon’s profit amount, only if they could expediate delivery on the other 13 assets (delivered 7 already). Raytheon agreed to delivering assets 6 months ahead of schedule.
Using the power of bargaining ensured that both parties could find terms and agreements that was beneficial. Though we had to give up more money, the contractor had to harder to push those assets out and have them ready for deliver ahead of schedule. Negotiations are the fun part of the acquisition process because no negotiation is the same and they are very unpredictable.
ThursdayApr 16 at 3:34am
In the multimedia presentation it is stated that interpersonal skills are all about the relationship with other people (Franklin, 2009). Also mentioned is leadership and of building relationships as very important skills a project manager needs. The development of employees is important in knowing their strengths and weaknesses. Capitalize and assign tasks people enjoy and hand off those they do not to others. Knowing the team is important in keeping the project on track. Franklin stresses the body language and tone of the conversation is 93% communication we project (Franklin, 2009). We can be careful at the choice of words we use, but if we do not look and sound interested, we will not convince the other person of our message. Knowing one’s own self is an important skill set to understand how you may be perceived by others. Be genuine about what you are involved. Management of the emotional intelligence is a learned skill we use to help us deal with situations daily. We can learn from out mistakes and improve our reactions. I would like to add that listening is a form of communication that is very important in negotiations. Other interpersonal skills a project manager should possess is that of team building, decision making, motivation, communication, leadership, and finally negotiation (Simplilearn, 2019).
The planning components of the buyers and seller’s perspective in a formal negotiation should be considered carefully. Benton (2014) asserts, “The seller’s proposal should be based on a thorough conceptual and economic analysis” (p. 338). Components include the Request for Proposal or the Request for Quote (Benton, 2014). Screening of proposals must be conducted for the criterial that fits the proposal. The bargaining strength of the seller will depend on seller’s current capacity, likelihood of a successful bidder, deadline, and status of the seller (Benton, 2014).
From the buyer’s perspective, the strengths are the number of sellers and buyers in the market, knowledge of item or service, cost breakdown, and level of preparation (Benton, 2014). The buyer must complete rigorous price and cost analysis from the data gained form the seller’s proposal, visit vendors if needed, set obtainable goals and objectives, and finally develop a plan of action (Benton, 2014). Proper planning for and the conduct of the negotiations will be handled with proper planning.
I will use my son-in-law once again who is a buyer for Arby’s Corporation in Atlanta who is also under the management of Inspire Brands. He is the project manager whose job it is to source kitchen equipment for the Arby’s stores. His interpersonal skills are well equipped for this type of work. He exemplifies the team-building skills needed to put project together and is motivated and driven to communicate well to both his leadership and suppliers. His ability to communicate at all levels is impressive to see and watch him accomplish much for Arby’s.
ThursdayApr 16 at 6:31am
Negotiation can be viewed as two or more parties seeking to find a mutually acceptable solution to a shared problem. Project managers should use negotiating techniques as a means to facilitate meaningful conversations that help move plans along from a stalemate to a win-win outcome. Employing effective negotiation tactics significantly improves outcomes in various areas, which include contract terms, conditions, pricing, deadlines, metrics, liabilities, etc. Thus, negotiation skills are critically important to project success in both informal and formal settings. When negotiating, the project leader should consider all stakeholders, and think through how responses will be perceived. It is also critical for project managers to listen carefully to individual thoughts and reactions. Another fundamental principle is to be knowledgeable and prepared by familiarizing yourself with issues, concerns, and challenges, as well as desired outcomes so that you can offer something of equal value.
When problems arise, consider how to alleviate the problem, and try to recommend something that might make the other party satisfied. According to Englund (2010), it is essential to set limits and boundaries. For example, a project manager has been tasked with acquiring a specific product with a strict budget of 50k. Two vendors have similar products, but one is of better quality and costs a little more. The Project manager wants to proceed with the better product and starts negotiations with the higher-priced vendor to match the price. However, the vendor does not nudge. The project manager negotiates with due diligence, and decides that if the vendor doesn’t reduce pricing by 5%, he will fall back on the other vendor. Setting these types of boundaries and limits for yourself helps you determine whether to proceed or let it go.
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