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Negotiation is a word that most people associate with a high voltage hostage situation, where a kidnapper holds an individual or a group of people at gunpoint in a bank and demands some mind-boggling amounts of money as ransom, and an escape route devoid of cops. This is the face value of negotiation, which we are used to seeing in movies and the evening news. Negotiation encompasses those daily activities we engage in that make us bargain with family, friends, and colleagues to get the results we desire to achieve. This paper seeks to shed light on the art of negotiation, and prime focus will be given to the case study of the negation skills employed by Lieutenant Early, at the Arkadelphia naval base.
Negotiation is an art that incorporates threefold activities; preparation, face-to-face discussions, and debriefing. In preparation, one needs to collect all information concerning the other party, and also available facts about the product in case it is a commodity he or she wants to buy (Young, 2001). Additionally, it is important to learn the negotiating procedures of the other party, to be in a better bargaining position in the whole process. As part of the preparation, it is paramount that the buyer gets all the cost components of the product to be bought, to understand the cost implications, as this will assist in case one wants to eliminate some costs (Young, 2001). The face-to-face component is the actual part where the two parties meet and conduct the negotiation, which is mostly done on the seller’s premises in case of a purchase. It is upon each party to perform to their best, to make sure that they get they carry the day and do not lose on the way. After the face-to-face phase, the negotiators can revisit the process to analyze where they made mistakes or their strong points, which helps them to strengthen their negotiation skills in the future (Burt et.al, 2010). Though an important stage, debriefing is not necessary for all negotiations, since some people do not intend to involve in future negotiations.
In the preparation phase of the negation of Lieutenant Early with a representative from the Trustworthy Company, she confirmed the cost breakdown of the aforementioned firm and compared their charges with that of rival firms in the same industry. Additionally, a feasibility analysis confirmed that it was cheaper to complete maintenance and repair activities of the nuclear submarines, with three or four mechanics in one afternoon, than the old-fashioned way of doing things that wasted time and were more costly. She also went through the cost breakdown of the cost quotation from the company, to scrutinize the cost of direct materials and overheads.
Lieutenant Early invited a representative from the trustworthy company, to try and reduce some of the overheads which to her seemed unnecessary. For efficiency, at the naval base, the machines are required, and unfortunately Trustworthy is the sole source company available to provide them at overly inflated prices. Lieutenant Early is given the mammoth task of being the only negotiator of the process in this case. Under normal circumstances, there would have been a purchasing department to take care of procurements (Burt et.al, 2010). Lieutenant Early is also faced with another problem in that, the supply of the machines by trustworthy does not reflect reasonable cost as required. Many unnecessary overhead costs need to be eliminated, but the representative is not ready to make any concession, and instead says the cost structure is justified and correct. There are ghost workers in the firm who are paid monthly, as evidenced by the deceased employee whose estate has been receiving monthly remunerations, for the last two years. This is perceived by Lieutenant Early as an unwarranted addition to the cost of the machines. The firm is not that large yet it has three levels of management, which could easily be integrated to avoid the extra costs incurred in the course of production. The owners of the firm, the Hawthorn family, have management roles in the firm yet they have also employed managers, causing overlapping of roles and therefore, introducing unnecessary extra costs that could easily be avoided. From the discussion with the representative, it is noted that there is a lot of relaxation and sociability by the employees at the workplace, mostly during working hours which if eliminated would reduce by a greater margin, the overhead costs. Furthermore, the ratio of stenographers to the number of production workers also raises eyebrows and needs to be revised if efficiency is to be improved at the firm. The labor overheads are unnecessary for the workers, who seem to be loafing around the soft drink machines and wasting time, instead of continuing with the production of the machines.
Seemingly, the bone of contention between Lieutenant Early and the Trustworthy Company is the unnecessary administrative and labor overheads, which make her procurement a thorny issue. This is because she sees no correlation between the additional overheads and the real price of the machines. It is therefore prudent for her to seek redress with senior management, preferably the Hawthorn family, for a more insightful negotiation, to bring down the cost of the machines to an acceptable market price. It is also worth noting that in negotiations, the outcomes can be diverse since there could either be a win-win or win-loose situation, depending on one’s skills.
References
Burt, D. N., Petcavage, S. D., & Pinkerton, R. L. (2010). Supply Management. Boston: McGraw‐Hill.
Young, Peyton, H. (2001). Negotiation Analysis. Michigan: University of Michigan Press.
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