Category: Negotiation

Introduction

The crisis in the negotiations between Vendros Technologies and Netcom Brasil is connected to numerous issues of different nature and requires particular consideration for its successful resolution. Although their partnership seems to be a profitable endeavor for both parties, in the long run, it is not going to be successful until all the problems are adequately addressed. This condition implies the necessity to pay attention not only to the very subject of the prospective agreement but also to the cultural differences and the stemming varying perceptions of negotiators. From this perspective, it is vital to determine the principal and agents, identify all issues and stances in this respect, describe Vendros’ BATNA and its implications, define the channels of persuasion, and recommend negotiation practices. Therefore, the purpose of this report is to examine the above aspects of the matter and suggest an appropriate course of action for Vendros to arrive at an agreement with Netcom Brasil.

The Principal and Agents for Negotiation

The first step leading to the resolution of misunderstanding between Vendros Technologies and Netcom Brasil is the definition of the principal and agents for the upcoming negotiations. In this case, the primary decision-maker or, in other words, the principal party is presented by the attorney from Vendros David Harrow and “Fabio de Gioia and Tom Silver, the account executives for Netcom Brasil” (Olson & Stoever, 2005, p. 632). In turn, the principals from Netcom Brasil include “Eduardo Giberto, chief technology officer; João de Paolo, the chief financial officer; and Sarah Mayer, a North American Networx attorney” (Olson & Stoever, 2005, p. 632). The agents of the two companies are “large shadow teams, including Brazilian attorneys” (Olson & Stoever, 2005, p. 633). Hence, the outcomes of their meetings depend on their capability to find a compromise between the requirements of the businesses under consideration.

Issues and Parties

The previous history of negotiations between Vendros Technologies and Netcom Brasil demonstrated the presence of content issues related to their partnership. First, the entities struggled to agree on technology ownership since the latter wanted unlimited intellectual property rights, whereas the former viewed this intention as a threat to their profitability (Olson & Stoever, 2005). Second, the conflict was connected to Netcom Brasil’s desire to have access to the software code, and Vendros viewed this claim as their prospective losses in the case if this information is transmitted to third parties in the future (Olson & Stoever, 2005). In this way, the financial aspect of the matter was of critical importance.

Third, this stance is confirmed by the following claims made by the two parties. Thus, Netcom Brasil’s vision of expansion through providing rights to subsidiaries was considered by Vendros to be related to their losses in the long run (Olson & Stoever, 2005). Fourth, there was a misunderstanding regarding operational guarantees as Vendros’ did not believe in Netcom Brasil’s capability to meet the deadlines, which the latter thought to be the lack of trust (Olson & Stoever, 2005). Fifth, the risks deriving from the currency instability presented another reason for disagreement because Netcom Brasil insisted on paying in reais, whereas Vendros did not make any other suggestions but rejected the idea on the basis of the impossibility of hedging (Olson & Stoever, 2005). The combination of the above content issues can be seen as the principal obstacle on the way to an agreement between the companies, and their representatives’ opinions are well-informed.

Interests For Each Side For Each Issue

Examining the underlying interests of each side concerning the identified issues can be beneficial for finding a compromise between their claims. From this point of view, Vendros’ position is determined by the company’s financial concerns since they are mostly oriented on the long-term profitability of this partnership. In addition, its representatives are worried about the technological aspect and software ownership as the scope of rights of Netcom Brasil under their agreement correlates with their capability to find other partners in the country. The same consideration applies to subsidiaries of Netcom Brasil who can potentially cooperate directly with Vendros. In turn, the interests of Netcom Brasil include the desire to gain as much control as possible over regular operations in order to remain competitive. Moreover, they encompass the belief in the sufficiency of resources opposed by the opinions of Vendros’ leaders. As for the currency, the conflict of interests is determined by the possible legal risks for Netcom Brasil and the intention of Vendros to lower the reais.

Vendros’ BATNA and Its Implications for Negotiations

The analysis above showed that the common ground for the companies’ partnership is the desire to receive profits while strictly following the deadlines and other requirements as per the contract. However, the risks for Vendros should be mitigated by developing the Best Alternative to a Negotiated Agreement (BATNA). This alternative course of action with regard to the specified conditions should be based on the changes in the schedule and, more specifically, the delay in the decision-making process. This solution will be advantageous for clarifying the situation with the currency and help negotiators consider the possibility of partnerships with other companies to compare the terms. For Vendros, the implications of BATNA in the course of the ongoing negotiations are connected to the failure to agree on the technological aspect of the matter. Thus, they can benefit from the opportunity to analyze the consequences of their cooperation with Netcom Brasil thoroughly.

Two Cultural Issues

The two cultural issues, which emerged during the negotiations between Vendors and Netcom Brasil, are connected to their principal differences in perceptions. First, the unpredictability of timing in organizing meetings was the main factor, which adversely affected the attitudes of the former’s representatives (Olson & Stoever, 2005). They struggled to accept this mode of communication, and the situation was complicated by the continuous change of participants from the side of Netcom Brasil (Olson & Stoever, 2005). Second, the varying practices of discussing matters negatively influenced the process. Thus, the employees from Vendors could not concentrate on the tasks at hand due to the comments of peripheral team members (Olson & Stoever, 2005). As a result, the productiveness of their work was limited, and the decisions were impossible to make.

The Rationale for Two Channels of Persuasion

Another way to positively affect the negotiations is using the channels of persuasion by Vendros’ leaders to promote their views on the appropriateness of the contract terms to the interests of both parties. First, they can emphasize their commitment to the partnership with Netcom Brasil and be consistent in their actions and suggestions, which are supposed to bring profits to each of them (Lewicki et al., 2014). The rationale for this step is the previous uncertainty of managers from Netcom Brasil in this area, which is one of the main obstacles to their willingness to negotiate the conditions. Second, it is critical to adopt an approach based on reciprocity, which, in this case, means to give way through cooperation by being the first party to compromise (Lewicki et al., 2014). This solution will help Vendros occupy a more favorable position in the meetings, resulting in the necessity for Netcom Brasil to follow their lead.

Four Recommendations Regarding Negotiations Practices

The conducted analysis allows making recommendations related to negotiation practices. They include using an appropriate negotiating strategy, reconciling the interests, ensuring the equal distribution of value, and setting limits. First, Vendros should adopt the collaborative approach with “a high priority for both the relationship and the outcome” to meet all participants’ needs (Lewicki et al., 2014, p. 16). Second, the company should emphasize the shared vision instead of highlighting the differences in perceptions during the discussion (Lewicki et al., 2014). Third, Vendros’ leaders should develop ways to distribute the profits concerning all the circumstances and implied risks (Lewicki et al., 2014). Fourth, it will be advantageous for Vendros to set limits to the negotiations in terms of the presence of only the persons making decisions or directly affected by them (Lewicki et al., 2014). Thus, following these guidelines will ensure the efficiency of communication.

Conclusion

In conclusion, resolving the conflicts between Vendros Technologies and Netcom Brasil is possible by considering their causes. As follows from the findings, they are related to financial matters, technology, operational guarantees, the definition of rights, and currency. Meanwhile, the shared interests are profitability and a long-term partnership. Therefore, the options are to take a break in negotiations or use the recommendations, according to which Vendros should enhance collaboration through developing a common vision, proper distribution of benefits, and setting limits.

References

Lewicki, R. J., Barry, B., & Saunders, D. M. (2014). Negotiation: Readings, exercises, and cases (7^th ed.). McGraw-Hill Higher Education.

Olson, J. W., & Stoever, W. A. (2005). Vendros in Brazil: Negotiating an international technology transfer.Thunderbird International Business Review, 47(5), 627-638. Web.

The video “Introduction to Negotiation” greatly benefited me as I learned new concepts and strategies. First, I understood what a reservation value or BATNA is and how it is determined. The narrator explains that the two main points of negotiation are to know your reservation value and do not pay more or less depending on your role of seller or buyer (Yale University, n.d.). Although this video gives examples of financial operations, it can also be used in any kind of negotiation. In addition, an essential aspect of this video is that it explains the positions of the buyer and seller. Hence, an important condition for successful negotiations is understanding the reservation value of the other party, since this knowledge gives an advantage in setting the most favorable price.

The video “Start By Asking” is a helpful addition to the theoretical concepts presented in the first video. The speaker, using a specific practical example, explained how to use a reservation value in negotiations. In addition, the most useful information of this video for me was an example of how a speaker would find out information about a company and then use it to raise the price. This situation is a prime example of how one can use BATNA in negotiations.

I once got involved in a negotiation selling my old game console. I charged a reasonably high price as the product was almost new, and I expected a buyer to try to lower the price. Thus, I used reservation value, although I was not aware of the concept. Eventually, I reduced the price to my reservation value, and although the negotiations were successful for me, I would like to get more for it. If I had known BANTA during those negotiations, I would have learned more information about the buyer before the price cut and could have made more profit. After the sale, I found out that the buyer urgently needed a console as a present; thus, he could agree to a higher price because he had no time to search another present.

One of the main reasons why some valuation methods are not suitable for a startup is the lack of “historical” data. In other words, to evaluate a company like Apple, data from past years of its work, strategy, and also the organization’s reliability can be used. At the same time, startups are new companies that do not yet have information about their ways of working, making a profit, and other data necessary for evaluation. All startups have is an idea and an assessment of the success of its implementation.

The dialog

1. I am afraid product X is a bit expensive.
2. It is more expensive than product Y, but it has some advantages.
3. Could you describe the terms that you will give us if we buy product X?
4. Please explain what you mean.
5. I guess you could give us more credit, could not you?
6. To be honest, I am not sure we could do it. It could be a little difficult because you are over your limit.
7. I am afraid we have a problem with our cash flow.
8. It could help if you pay part of your debt.
9. Sure, we can do it.
10. This solution could give us more flexibility.

Reference

Yale University. (n.d.). Introduction to negotiation: A strategic playbook for becoming a principled and persuasive negotiator.Coursera. Web.

The negotiations are the key instrument in each possible kind of deal that provides the possibility of an agreement on beneficial terms for both sides. In a particular case, as a union representative for the police department, it is crucial to work on a successful and efficient strategy that will ensure the best possible outcome. Since the contract is about to expire, there is a need to renegotiate the management conditions on which the police department will continue working. This essay observes the central point of the discussed contract and the specific issues that have to be considered during the following cooperation.

The beginning of the negotiations can determine the following direction of the conversation. As it can create possibilities and a good impression, it can ruin the following arrangement and influence the final decision. To start the discussion on the contract, it would be great to summarize the accomplishments and observations from the past period of the duration of the expired agreement. Since the topics that are most important to discuss and implement in the new contract are already known, the first aspect to mention is the results of the previous policies and conditions. Starting from the most important ones briefly and efficiently, all the pint should be explained and delivered without burdening them with unnecessary details. After the summary is clear to the other side of the negotiations, it is time to make a move and announce the first item. The most substantial arguments for each aspect should be discussed in the order from the strongest ones to the weakest to capture the attention and assert the person.

On top of negotiated conditions for the contract is the requirement to provide officers with paid administrative leave or paid-desk duty when something traumatic and dangerous happens. On duty can occur many different incidents such as gun shootings or deaths. Due to the possible emotional and physical stress that the officer might experience, giving them some time off work is necessary. The expenditures that this measure requires are the most efficient and less costly method to help people stay in excellent physical and mental states. Such accidents can lead to trauma, burnout, or suppressed stress that can affect overall productivity, job performance, and concentration. The work in the police department requires a decent amount of accuracy and concentration, for any minor mistakes can impact someone’s life and affect the future of the person. The estimated cost for that aspect is $336 000. Without the administrative leaves, the officers are more likely to cause issues that eventually will be more expensive than the free day or extra paid shift.

Another moment that needs to be discussed is the issue of pension funding and liabilities. Due to the issue with the underfunded pension plan issue when the organization has more liabilities than assets, some officers who work in the department should be guaranteed a fully funded pension. Otherwise, future retirees will not live a wholesome life without financial security and confidence in the future (Kagan, 2020). Moreover, those who have already finished their duty and reached retirement age might struggle with getting their earned money after they stop working. Also, the guarantee that the current or future usually retires is binding, and the organization can face several problems and difficulties (Kagan, 2020). Therefore pension liabilities are a crucial issue that should be solved. The officers have to be provided with fully funded pensions to live financially secure after retirement and protect the organization from backlash and lawsuits.

In addition, special bonuses will bring the right amount of motivation and encouragement for the following work for officers who only started their career path in the department. One of the best ways is to provide them with early holiday premiums after successfully passing the prohibition. The estimated cost for this would be $1000 for one employee to provide them with finances for a living while they are still at the beginning of the career path and stimulate them to the following hard work.

The last topic for negotiation is the prevention of investigation of the officer for an accident that happened a hundred or more days ago. The officers have to feel safe and confident while performing their job, and the police department’s responsibility is to ensure that possibility. However, the situations can differ from time to time and should be observed individually, but the main point is to stay objective and fair while dealing with the investigation. Therefore, to prevent the officers from investigating, the department has to make sure that they follow the rules and the laws at work and do not overuse their credentials. Since the incidents can inevitably affect the reputation and status of the police department, specific measures should be taken to prevent the investigation from keeping the image and having time to research the situation from the inside.

Overall, the negotiation strategy for resigning the contract should be an effective tool that can persuade the other side of the beneficial agreement and leave a positive impression after. The first thing is to summarize the main issues and, after that, suggest more productive solutions. The argument must be presented from the strongest to the weakest with statistical data to ensure the negotiations will result desirably.

Reference

Kagan, J. (2020). Underfunded Pension Plan. Investopedia.

Negotiation

Negotiation is frequent for international business executives, although it differs by country. Consideration of similarities and differences in culture, conflict resolution viewpoints, views on power or status, and decision-making techniques are all a part of a global negotiation. Negotiators in the United States are known for being decisive, legalistic, and results-oriented. In contrast, negotiators in China concentrate on establishing connections, and the dominant negotiating style in Canada is cooperative, with negotiators willing to compromise.

According to Americans, Canadians, and Chinese, cooperation and rivalry are the stepping stones to effective negotiation. They both have similar bargaining views on cooperation and competitiveness. Different cultures favor one strategy while negotiating (Staff, 2022). The American negotiation culture might be unpleasant and hostile because they may openly shout over individuals and air their disagreements (McKenzie, 2018). The Chinese prioritize relationship growth and only enter into agreements that will result in mutually beneficial results. In contrast, Canadians subscribe to the notion of win-win, in which they anticipate the other party to return their trust and respect.

Negotiating characteristics will unavoidably differ depending on people and situations. American negotiators are legalistic and utilize a conceptual language from other areas. In China, the choice of a negotiator is based on their capacity to make friends before starting a negotiation (Shonk, 2022). An intelligent negotiator in Canada strives for a win-win scenario that creates the groundwork for a long-term connection in which business partners will stay in touch long after they have a contract. Canadian negotiating approach is the most efficient in commercial negotiations. Collaborating with competent negotiators, should be discouraged; because this style dwells on acquiring the most for their organization, there might be reluctance to establish a collaborative relationship.

Many American negotiators use a checklist technique, but the Chinese are known to adopt a more comprehensive approach and follow the rule that nothing is accepted until they agree on everything (McKenzie, 2018). It is the primary cause of the recent collapse in negotiations between the two parties. At this juncture, the American side may believe that the Chinese team is dishonest, and the negotiation may collapse.

Inter-Country Negotiation

The differences when approaching negotiations in these countries have vast differences. However, there are steps that each side should take prior to attending the negotiation that will ensure the success of the event. Before the two teams negotiate, both sides should debate and strive to agree on the standards that will guide the negotiations (McKenzie, 2018). Parties should not presume that their standard is universally accepted because minor discrepancies impede talks.

The checklist technique and the standard of nothing being decided until everything is accepted are both entirely legitimate. If the two parties are unaware of their respective styles, a conflict of expectations may occur. Determining how to bargain before the negotiations begin will lessen the likelihood of such a confrontation and so avoid disappointment and aggravation later on (Shonk, 2022). As the recent collapse of US-China economic ties has demonstrated, discussions between governments are challenging enough regarding the substance. Considering the significance of a trade agreement between the world’s two biggest economies, there is hope that contrasts in style do not lead these negotiations to fail prematurely. Therefore, both teams need to have rules that will guide the negotiation process.

References

McKenzie, D. (2018). Negotiation strategies: Tips on getting what you want and finding a middle ground when needed. CPACanada.

Shonk, K. (2022). Top 10 negotiation skills you must learn to succeed absorb these integrative negotiation skills to improve your outcomes. Harvard Law School.

Staff, P. (2022).Cross cultural negotiations in international business: Four negotiation tips for bargaining in China. Harvard Law School.

Contract negotiation is an art and science that necessitates education, continuous training, and diverse experience. Acquisition of negotiation skills requires a substantive understanding of the contract law and procedures of a contract. As negotiations contribute significantly towards the performance of an organization, skilled and experienced negotiators should be involved. Adequate time and effort are required for the preparation and establishment of a justifiable negotiation position. In addition, preparation enables the negotiator to have substantive knowledge of the contract’s expectations and boosts his or her confidence in facing any challenges during negotiation. The negotiation process attributed to an organization boosts its competitive standing and the organization gains trust and respect from the contracts issuers.

Interpersonal skills and knowledge enable a negotiator to build a robust rapport between the contractor and the negotiating panel. This skill facilitates the creation of a friendly, but the business-minded environment at the negotiation table. The use of effective communication allows the negotiator to present the ideas and requirements of the organization in a precise but concise manner to the panel. With the minimum time used for clarification of the demands and expectations of the organization, the negotiator controls the proceedings at all times and limits delays on secondary issues. A skillful negotiator tackles complex disputes that may arise during negotiation accordingly. A negotiator has the capability to bring in issues that could be beneficial to the organization, but may have been left out in the contract specifications, and convince both parties on the need to consider them. An effective presentation of the demands of the organization in line with the expectation of the contractor boosts the organization’s chances of winning numerous contracts. This skillful personality improves the level of negotiation of an organization against its rivals, which in the end boosts the overall performance of the organization.

Courtesy and flexibility ensure that the negotiation process is conducive to every member at the negotiation table. A negotiator who portrays courtesy facilitates a peaceful and respectable discussion for the achievement of the negotiation objectives. Because of the existence of different individuals in the negotiation panel, for example, the old and the young, courtesy creates a win-win situation for every member. Moreover, courtesy by the use of appropriate language and communication techniques makes every participant in the negotiation process feel appreciated and respected. The flexibility of the negotiator plays a significant role in addressing the varying arguments of the contractor and the negotiating team to come into a concrete and final agreement. This trait enables the negotiator to deal with emerging issues in the discussion session skillfully and tactfully in accordance with the relevance of the subject matter. At the same time, the negotiator can ingest any demands of the contractor or organization and manipulate them in a manner to suits both parties and align their differences.

A well-informed and respectful negotiator improves the general rating and chances of consideration of an organization by a contractor. Initially, at preparation for negotiation, knowledge enables the negotiator to gather facts about the subject in order to limit shock and misconceptions at the negotiation time. During negotiation, the negotiator helps to guide the panel on the critical issues to be handled carefully and in a detailed manner. Diverse knowledge allows the negotiator to tackle any matter that arises during negotiation with confidence and certainty. The versatile information exhibited by the negotiator enables him or her to raise new issues, reflect on earlier discussions similar to the subject of interest and the possible solutions for any difficulties that might arise.

Preparation is a valuable strategy that a negotiator should employ in meeting the needs of both parties involved in the negotiation process. In this regard, a negotiator needs to identify and evaluate the organization’s objectives and interests. He or she should try to diagnose the contractor’s expectations, needs, and interests in the subject matter. This task enables the negotiator to collect relevant data and facts about the matter at hand. This backup information provides detailed background and supportive arguments for the negotiator’s presentation. With this knowledge, a negotiator can evaluate the likely impact of macro and micro issues relating to the subject of discussion. Nonetheless, the negotiator boosts his knowledge and develops skills for handling any eventualities during discussion.

In the preparation process of negotiation, documents, information, and any other necessary material is assembled with the assistance of the Board, stakeholders, lawyers and other professional advisers. The appropriate negotiation strategies require to be well documented and include alternative options. This process allows the negotiator to prepare his or her team by training or coaching them to meet the demands of the negotiation. At the same time, the negotiator can brainstorm with the team members for any shortcomings during preparation. This process provides the negotiator with an effective group, which is up to the task and well equipped with the knowledge for negotiation. While preparing, the negotiator enlightens the team members of the expectations of the contract negotiation and the need to portray a favorable image of the company. At the end of the preparation process, the negotiator should conclude the whole process with predictions of the likelihood of the contract negotiations outcome. He or she also can make final amendments to the whole process before the final day of presentation.

Introduction

• Contract negotiation involves two or more parties.
• The parties deliberate on a contract to reach an agreement.
• The agreement is legally binding.
• Both parties must be satisfied and have their rights protected.
• The agreement must be mutually beneficial.

Contract negotiation is the process of deliberating over a significant issue to reach an agreement that benefits the parties involved. During the negotiation process, the parties evaluate their interests to agree on the what is in their best interest. A contract agreement is subject to the law such that the terms of the agreement must be observed by the involved parties and there are legal consequences to the parties that breach the contract (Simone et al., 2020). The party negotiating must conform to the requirements of the law including being of legal age to sign a contract, being mentally capable to understand the content of the contract and not being under the influence of any intoxicated substance at the time of signing the contract.

Employment contracts govern most of the business agreements between companies and their employees. The contract involves reaching an agreement between the employer and the employee on various factors that will define their employment relationship (Clipa et al., 2019). Some of the significant factors addressed in the employment contract include the duration of the contract, the environment of work, the hours of work, the payment rate, salary, the duties assigned to the employee, and other benefits. The employment contract is governed by the labor laws and therefore its terms and conditions must conform to the labor laws. There are various labor laws in the United States that define the structure of the workplace. These laws include child labor, gender equality, racial equality and the working conditions.

Employment Contract

• The contract is an agreement between the employer and the employee.
• The contract is legally binding.
• The agreement is subject to labor laws.
• The contract is precise on the rights and responsibilities of the employers and the employees.
• The agreement is subject to the offer the employer makes to the employee.

Employment contracts govern most of the business agreements between companies and their employees. The contract involves reaching an agreement between the employer and the employee on various factors that will define their employment relationship (Clipa et al., 2019). Some of the significant factors addressed in the employment contract include the duration of the contract, the environment of work, the hours of work, the payment rate, salary, the duties assigned to the employee, and other benefits. The employment contract is governed by the labor laws and therefore its terms and conditions must conform to the labor laws. There are various labor laws in the United States that define the structure of the workplace. These laws include child labor, gender equality, racial equality and the working conditions

There are three major forms of employment contracts:

• Permanent employment contract.
• Fixed-term employment contract.
• Causal employment contract.

There are two employment categories defined by these contracts:

• For-Cause Employment.
• At-Will Employment.

Employment contracts are determined by the employment status of the party that the employer is negotiating the contract with where it can be an ordinary employee or a contractor. Depending on the status of the employee, the contract can either be permanent, fixed term or causal. Permanent employment contract involves an agreement between an employer and an employee who works on regular hours and is paid a salary. The fixed-term contract involves is an agreement that covers a specific period of time after which it expires. Causal contract does not define the duration for the agreement. It can be terminated any time when either of the party decides.

These contracts determine the type of employment relationship that the employers form with their employees. There are two main categories of employment including for-cause employment and at-will employment (Simone et al., 2020). For-cause employment contract can only be terminated for a specific reason and the decision must be reviewed by other authorities. On the other hand, At-will employment contract can be terminated whenever the employer deems fit and is not subject to any authority. However, the US, employer ae required to submit specific reasons for the termination of contracts.

The party proposing for contract modification must specify the following:

• The changes involved.
• The parties affected by the changes.
• The reasons for the changes.
• The time required to implement the proposed changes.
• The options that can be explored.

Making proposals for modification of the workforce contract is necessary to ensure that the parties involved in the contract agree to the proposals before implementing the changes. When communicating the changes all the affected must be given enough time to consider the proposals and understand their implications. This will enable them find the best way to respond. The proposing party must explain the other options that it had explored before making conclusions on the changes and why they are not appropriate. The other parties must be given the opportunity to make their proposals on alternative options. Lastly, both parties must negotiate to solve any disagreements brought by the proposed changes

Motivation

Workforce contract modification is motivated by various factors including:

• The need to embrace economic conditions.
• The need to incorporate government policies.
• The need to correct mistakes on the existing contract.
• The need to change working schedule.
• The need to improve the working environment.

Businesses are effected by several factors that motivate the employers and employees to propose changes on the employment contract. Some of the major motivators include unfavorable economic conditions which may force the employer to propose reducing the salary and rates of the employees to protect the company from suffering huge losses (Joubert, 2020). Government policies such as introduction of new labor laws may force the employer to reorganize the workforce which may require modifications on the contracts of the employees. Furthermore, the employer my propose changes on the existing contracts after realizing a mistake on the contract and therefore the need for corrections. For the employees, they may propose changes on their contracts to adopt more flexible working schedule. Additionally, employees may propose changes on their contracts to demand in their working conditions especially if the current working environment is not conducive. Other factors such as low wages, long working hours and the need to change from working part-time to full time or vice vasa may trigger proposals for contract modification.

Importance of Consulting both Parties

• It prevents parties from breaching the contract.
• It enables the other parities to make alternative suggestions.
• It solves the confusion that may arise as result of the changes.
• It enables the parties adopt the changes swiftly.

Consultation is necessary before making any modifications on the existing contract. Since a contract is a legally binding agreement, any changes must involve the consent of both parties. Additionally, it is significant to involve the other parties to allow them give alternative solutions to the problem triggering the contract modifications (Joubert, 2020). Furthermore, modifications may cause a lot of confusion to the affected parties if they are implemented without their consultation. It is therefore significant to consult them to enable them understand and respond to their concerns effectively. besides, by consulting them, the parties create an opportunity to negotiate for an agreement on any disagreements that may arise. lastly, consultations give the affected parties enough time to familiarizes with the proposed changes and adopt swiftly thus making the implementation process efficient.

Negotiation Strategies

Negotiation strategies involve four major stages:

• Preparing.
• Opening and exchanging information.
• Bargaining.
• Closing and implementation.

Negotiation strategies employ these four stages to enable the parties involved to express their interest and deliberate on their differences to reach an agreement. At the preparation stage, the parties collect the information necessary for explaining their objectives and expectations of the contract being negotiated (Strykowski, 2018). The next stage is opening and exchanging of information where the concerned parties define and justify their positions. At the bargaining stage, the each party employs different negotiation strategy to propagate their interest. Lastly, at the closing and implementation stage, the parties reach an agreement and review the terms of the consensus to solve any form of misunderstanding.

Types of Negotiation Strategies

• Competition (Win-Lose).
• Collaboration (Win-Win).
• Compromise.
• Accommodation (Lose-Win).
• Avoidance (Lose-Lose).

The type of negotiation strategy that the negotiating parties employ tend to have three outcomes including all the parties to win the contract by successfully propagating their interests, either of the party to win while the other loses, or both parties to lose. The relationship between the parties tend to depend on the outcome of the negotiation process.

Negotiation Strategies

Competition

• Adopts the win-lose model.
• Prioritizes the interests of each party.
• Favors the outcome of the negotiation than the relationship of the parties.
• Achieves the short-term benefits of the agreement.

The competition negotiation style is largely based on an aggressive approach that both parties take. The benefits of winning the negotiation are the main motivation for the negotiators to continue propagating their interests (Jang et al., 2018). It is often employed to win short-term benefits rather than reaching a mutual agreement. This negotiation style can ruin the reputation of the parties if it becomes exceedingly competitive. The parties tend to use their position of leverage to outdo each other.

Collaboration

• Adopts the win-win model.
• Favors the interests of both parties.
• Exploits the creativity of the concerned parties
• Strengthens the relationship of between the parties involved.
• Embraces the long-term benefits of the agreement

The collaborative strategy aims to achieve both positive outcome and a good relationship between the parties involved. This strategy requires the parties to think creatively to develop solutions that are satisfying to those involved (Strykowski, 2018). Therefore, it consumes time and resources as the parties try to develop effective solutions. In most cases, it is usually successful when the parties’ interests are compatible.

Compromise

• Embraces the bargaining model
• Requires the parties to forgo some of their interests in favor of the other.
• Requires the parties to take significant time to reach an agreement.
• Requires the parties to be familiar with each other.

This negotiation style requires that parties give up some of their interests for the other party to gain. It is usually effective when the parties involved have a long-term relationship such that the winning party is likely to give up its interest in favor of the other party in the future agreements (Strykowski, 2018). However, this model hinders creativity and because it does not give the parties opportunity to explore other options that can lead to a mutual agreement. In most cases, those who use compromising approach are concerned of the relationship of the parties rather than th benefits of the outcome. In most scenarios, at least the interest of each party is satisfied but one party tend to benefit more than the other.

Accommodation

• Employs the lose-win model.
• Favors the interests of one party at the expense of the other party.
• Prioritizes the relationship of the parties over the outcome.
• Amends the relationships that had been broken and gain trust of the winning party.

The accommodative negotiation strategy is the opposite of the competitive strategy. In this type of strategy, the party that is less persistent gives up its interest in favor of the more persistent party (Jang et al., 2018). This strategy involves a lot of personal interests rather than business interests. Therefore, emotions and personal feelings may be involved. The outcome is usually aimed at building trust, respect and long-term relationship between the parties involved.

Avoidance

• It involves adopting the lose-lose model.
• It involves disregarding the significance of the outcome and the relationship of the parties.
• It involves withdrawing from the negotiations.
• It involves dismissing the interests of the parties.

The avoidance strategy is only effective when an agreement threatens the existing peace between the conflicting parties. One party may withdraw from the negotiations if the outcome is likely to make the other party stronger and more threatening.

Conclusion

• Contract negotiation requires both parties to reach an agreement that is mutually beneficial.
• Employment contract is one of the most common contract negotiations that is legally binding and requires law.
• Contract modification requires consultations with the concerned parties.
• The major contract negotiation strategies include competition, collaboration, compromise, accommodation and avoidance.

References

Simone, A. M., Simone, M., Block, L., & LaVine, N. (2020). Contract Negotiation Skills: A Workshop for Women in Medicine.MedEdPORTAL, 16, 10910.

Clipa, A. M., Clipa, C. I., Danileț, M., & Andrei, A. G. (2019). Enhancing sustainable employment relationships: An empirical investigation of the influence of trust in employer and subjective value in employment contract negotiations. Sustainability, 11(18), 4995.

Joubert, K. L. (2020). An elaboration and modification of the May, Gilson, and Harter (2004) employee engagement structural model (Doctoral dissertation, Stellenbosch University).

Jang, D., Elfenbein, H. A., & Bottom, W. P. (2018). More than a phase: Form and features of a general theory of negotiation.Academy of Management Annals, 12(1), 318-356.

The article “An Experimental Test of Negotiation Strategy Effects on Knowledge Sharing Intentions in Buyer–Supplier Relationships” by Thomas et al. is devoted to investigating the relationships between buyers and suppliers. Based on the theoretical resources analysis, the authors of the article conclude that the win-lose negotiation strategy is one of the efficient ones. This hypothesis is analyzed based on a practical experiment. The researchers use the study’s scenario-based experimental design to prove or refute the hypothesis. The authors describe the chosen sample justifying the integration of the students into the experiment. They discuss the demand characteristics and requirements regarding the ethical and practical aspects of the investigation for the researchers. During the experiment, the Lirket scale is chosen to evaluate the range of certainty and the likelihood of particular sentiments of the subjects. The article’s authors describe in detail the methods to ensure the validity and reliability of the results, such as manipulation and realism confounding checks. The experiment results are analyzed through MANOVA and ANOVA strategies which allow considering the psychometric properties of the participants.

The main aim of the article is to prove the positive impact of the win-lose tactic on the quality of communication between buyers and suppliers. Based on the analyzed results, the authors of the article highlight that most of the hypotheses are true. However, such aspects as an increase in operational knowledge transfer activities and others were not supported. Considering the statistical combination of results, mainly all the claims were supported by practical information. The authors conclude by providing ideas for future research in this sphere and claim that there are specific limitations. They state that the repetitiveness of the results is necessary to prove the correlation between the win-lose strategy and the improvement of the relationships quality of buyers and suppliers.

Global processes are characterized by the fact that they affect the interests of two or more parties. To achieve equality, where no one is in a winning position, it is necessary to negotiate. In addition, each decision has social complexities, which are reflected in the pressure or adjustment of the parties’ capabilities. It is necessary to analyze what are the most effective types of negotiations that exist, as well as consider the example of the Challenger crash.

Types of Negotiations

First of all, it is necessary to highlight that there are three main types of negotiations, namely, bilateral, multilateral, and causal. The two-sided view is classic and most common, where two individuals or organizations are involved, regulating their interests. The essence of the process is the achievement of mutually beneficial agreements and the creation of certain conditions for the subject of negotiations (Lewicki et al., 2020). This type is used both between states and in business. The most striking example is the negotiations between one country and another, where representatives agree on the terms of economic impact as well as potential benefits (Lewicki et al., 2020). It is essential to single out another type of multilateral treaty, which are a more complex structure. The fact is that this type is similar to bilateral, but the fundamental difference lies in the presence of a large number of sides, more than two (Lewicki et al., 2020). The most striking example of this type is the trade negotiations of states in the WTO, where the goal for several states is to simplify the trade procedure.

Finally, the coalition type of negotiation is the least common and most complex. The fact is that the result of this process is a coalition settlement, which implies a declarative agreement. Separately, it is worth mentioning that such negotiations are more political in comparison with the previous ones since they are common in a multi-party parliamentary system (Lewicki et al., 2020). Such negotiations concern the review of government actions or projects and consist of long-term interaction between two or more parties. In this case, formally there are two or more parties, so they perform the function of coalitions (Lewicki et al., 2020). A striking example of such negotiations is the discussion by party representatives of an increase or reduction in government spending.

The Social Complexities of the Challenger Explosion

The Challenger explosion entailed many negative consequences for both the state and society as a whole. However, it is necessary to analyze what social difficulties are most significant in the context of this catastrophe. First of all, it should be emphasized that this launch was an anniversary, and therefore symbolic (McDonald & Hansen, 2018). From this follows the first social difficulty associated with ignoring the warnings of engineers about the presence of defects by managers. In other words, to carry out a symbolic mission, some people began to neglect any risks and fears (McDonald & Hansen, 2018). This is also explained by the fact that even before takeoff there was information about malfunctions that could lead to disaster (McDonald & Hansen, 2018). Another striking example is the emerging social pressure on the incumbent president and the government to conduct an effective investigation into the crash. The reason for this was the symbolic attitude to the process, as well as the great prestige of astronauts among people. There were relatives, friends, and colleagues of the victims who witnessed this disaster on the site (McDonald & Hansen, 2018). However, social difficulties have damaged state authority in this area.

The crash of the shuttle dealt a severe blow to the reputation of the United States, the public refused to encourage further attempts at such experiments. The program was suspended for a long period, and the states began to suffer serious losses (McDonald & Hansen, 2018). However, the managers and engineers of the shuttle were under long censure by the citizens after the investigation was completed (McDonald & Hansen, 2018). Thus, the catastrophe introduced a set of social complexities that played the role of both a regulator of the entire process and a punishment for frivolity.

Groupthink

It is worth noting that one of the main problems of the shuttle crash was groupthink. The fact is that the leaders tried to extract only benefits, ignoring any warnings and fears. As a result of such negligence and irresponsibility, there was a catastrophe and human victims, as well as unrest in society. However, it is worth noting that not only the leaders, but all employees are not to blame (McDonald & Hansen, 2018). The specialists were so motivated by the potential benefit that they obeyed the leaders unquestioningly and did not try to object to them (McDonald & Hansen, 2018). Thus, herd thinking happened, where professionals preferred the principle of “thinking as others think”. The phenomenon of groupthink was also characteristic of a society that swiftly condemned the state. The fact is that completely all state structures cannot be involved in the disaster (McDonald & Hansen, 2018). However, due to mourning and shock, several activists began to promote the position of the authorities’ guilt in what happened, and soon the whole society picked it up, without understanding the issue (McDonald & Hansen, 2018). This is groupthink, since the majority acted in the manner of others, without thinking about the problem.

Recommendations for a Challenger Meeting

If I was a member of the Challenger launch meeting, I would attempt to initiate negotiations. It is important that the negotiations would be multilateral, that is, they would affect the interests of society, astronauts, engineers, and leaders. The essence of the negotiations would be to postpone the launch of the shuttle until the complete elimination of all risks and effects. In this case, the catastrophe might not have happened, and there would have been no casualties. In this case, the interests of both the state and society and astronauts would be observed. Since the interests of managers also need to be taken into account, an alternative option should be proposed, for example, a launch without astronauts on board.

References

Lewicki, R. J., Barry, B., & Saunders, D. M. (2020). Negotiation (8th ed.). McGraw-Hill Education. Web.

McDonald, A. J. & Hansen, J. R. (2018). Truth, lies, and O-Rings. Inside the space shuttle Challenger disaster. University Press of Florida.

Introduction

An integrative negotiation strategy is a negotiation method where both parties settle on level ground. This method focuses on creating a mutual agreement between the disputing parties to see all of them benefit from the deal. Integrative bargaining is vital as it produces effective results where everyone’s views are addressed. The case of Connecticut Valley Schools is an example of a situation that requires trustee involvement to determine the most efficient projects to implement in the school. This paper provides an integrative negotiation strategy to arrive at the school’s final decision on project implementation.

Integrative Negotiation Strategy

To begin with, each project must be evaluated to determine Net Profitability Index (NPV). The NPV is essential in determining the project’s future value to be implemented (Schill, 2020). A positive NPV implies a higher profit value of the project, while a negative NPV means the project will not be profitable in the future. It is important to note that each project’s discount rate in this case study is 12%.

The first project, in this case, is the swimming pool with an initial cost of $640,000, while renting the pool is $60,000 per year. The Payment per year costs $10, 000 and the rent received will be $30,000. The savings on swimming pool project therefore is 60,000-10,000+30,000 = 80000. The swimming pool is expected to be valuable for 15 years; therefore, the NPV of this project is $41,086. Next is the bus project having an initial investment of 270,000, and the cost of the buses is 180,000. The bus project has additional expenses of 80,000, implying that the yearly savings on the bus project will be $180,000-$80,000 =$100,000. The NPV of the bus project, therefore, is $141,140. The other project is the new roof hockey rink project with an initial investment of $60,000. This project has no cash inflows and therefore has a negative NPV value.

The wood chip heating system requires an initial amount of $800,000 with a lifespan of 15 years. The average savings on this project is 140000+160000 / 2 =300000 / 2 =150000. The NPV of this project is $221,630, which is a positive value and looks more profitable when implemented. The next project is the renovation of the fine arts building, which has an initial investment of $300,000. The renovation of the building does not have a cash inflow, and therefore the project will have a negative NPV value. Next is the renovation of the women’s locker room which has an initial $40,000. This project, too, will generate no additional cash inflows and hence negative NPV value. The final project is upgrading computer labs, which will cost an amount of $120,000. This project has an additional investment of less than $160,000 and hence negative NPV value.

Conclusion

In conclusion, the only projects with positive NPV values are the swimming pool, bus, and wood chip heating system projects from the above discussion. The other remaining projects can not generate the cash inflows for the school and, therefore, cannot be prioritized. The wood chip heating system project has the highest NPV value of the three selected projects; consequently, it looks more profitable to implement. This negotiation strategy is based on the long-term goals of the school operations. The school should work to pay for the heating system project first with 5% interest which would make $420,000 a year. The swimming pool project should be implemented through a 3-year installment plan at an interest rate of 7% to generate $114,133 yearly. The remaining projects would total $235,000, making the total expenditure $403,133 and leaving a balance of $96,000 for savings in case of any emergencies.

Reference

Schill, M. J. (2020). The profitability index. SSRN Electronic Journal, 1, 23-56. Web.

Introduction

Negotiation is an art of human communication that is evident whenever people make conversations. People often negotiate with friends or family for favors, contractors to receive services, and medical practitioners while seeking the most effective treatment solutions. However, business or contract negotiations take a formal approach, obligating the parties involved to adhere to strict rules regarding the business terms and pay increased attention to detail. Otherwise, rushing into a contract can result in severe outcomes like damaged relationships, tarnished portfolio, lawsuits, and voided contracts. Thus, this essay explains and analyzes the critical factors of a negotiation that are ethical and conducive to the goals of procuring twelve-cell computer batteries for the organization.

The Factors That Can Influence Negotiation Outcomes

Negotiation is a complex process because the outcomes must meet the interests of all parties involved in the negotiation. Therefore, several factors can interfere with the results of contract negotiation, obligating administrators and managers to acknowledge all potential facilitators and inhibitors of effective negotiation to ensure benefits. Nonetheless, the crucial aspects of negotiation include the context, individual interests, negotiators’ cognition, trust, communication, ethics, intermediaries, the negotiation process, and the medium of communication (Galluccio, 2021). The context of a negotiation refers to the conditions or situations that bring about the negotiation process. In this case, the organization seeks to procure twelve-cell computer batteries. The main objective is to obtain high-quality batteries at a favorable price and ensure fast delivery. Subsequently, the negotiators’ cognition refers to the mental processes that shape the negotiation process. On that account, positive perceptions and a good understanding of the benefits of these batteries to the organization can encourage administrators to put in more effort in the process.

The negotiators’ creativity also plays a critical role in allowing parties to agree on a long-term business arrangement that will bear fruit. Creativity refers to the willingness to develop and search for alternatives and solutions to inhibit challenges. The negotiation process, describing the communication tactics, negotiation style, presence of intermediaries, and the tools applied in negotiation also influence outcomes since a streamlined and efficient process focuses on the most critical issues of the contract (Yoon-Flannery & Nguyen, 2018). Finally, trust, ethics, and effective communication also determine negotiation outcomes because they facilitate understanding and mutual agreement. Negotiators who can communicate their needs and plans show high levels of organization, thus encouraging parties to acknowledge their demands. Subsequently, ethical negotiation practices like integrity and fairness play a major role in sustaining positive relationships between negotiators. Thus, the procurement teams should familiarize themselves with these tenets and their effective application and practice to avoid limitations.

Critical Elements of a Successful Negotiation

Successful negotiations comprise five basic elements, including preparation, information exchange, bargaining, concluding, and execution. Preparation is the most crucial element of a contract negotiation process because it allows both parties to familiarize themselves with each other’s values, business tactics, and cultures (Jung & Krebs, 2019). For instance, preparation before negotiating on the twelve-cell battery procurement will involve comprehensive market research of the chosen suppliers’ background, reliability, quality, and pricing. Moreover, it will allow for comparison to determine the supplier offering the most benefits. Subsequently, information exchange involves informing all parties of the contract’s requirements and soliciting their contributions, and opinions. Therefore, the plan to procure the twelve-cell batteries will include the input of parties involved in the negotiation process.

Afterward, the negotiation may move into the bargaining state, where all parties present their suggestions and demands toward closing the contract and any changes that would increase the contract’s effectiveness and viability. Consequently, this stage involves complicated processes, requiring effective communication between all parties and clear guidelines on how to proceed with the contract negotiation (Galluccio, 2021). Therefore, the organization will provide its suppliers with a detailed list of demands and rules they should adhere to when delivering on their responsibilities. Consequently, the suppliers will respond according to their capabilities, thus allowing the negotiation to move into the conclusion and execution process. In the conclusion and execution stages, all parties preview the contract’s demands and commit themselves to meet its requirements. Eventually, the procurement process will begin, and all parties will be required to meet their end of the bargain.

Applying Aspects of Negotiation to Business or Personal Life

Negotiation is an art that demands high ethical standards and interpersonal collaborations to ensure that initiatives are effective and efficient. Therefore, it is crucial to observe moral and ethical guidelines when engaging in contract negotiations to avoid negative outcomes like litigation and a voided contract (Jung & Krebs, 2019). On that account, truthfulness, trustworthiness, and integrity should be a priority when getting into legally binding contracts to ensure the sustainability of the business. On that account, administrators and individuals in charge of the twelve-cell battery procurement process will be warned against any actions that might jeopardize the viability of the contract. Additionally, the project will be designed to meet the demands of both parties and assure benefits (Yoon-Flannery & Nguyen, 2018). Thus, the process will observe all the stipulated guidelines and spearhead effective communication and positive relationships through all processes for fruitful cooperation.

Although a win-win outcome is often the best resolution in contract negotiation, sometimes it is impossible for both parties to benefit, especially in a contract regarding the procurement of products or services, because of the processes associated with closing the deal and executing the contract. For example, although the twelve-cell battery procurement negotiation aims to realize positive outcomes for both parties, the organization’s interest lies in driving down the pricing to achieve higher value, which might obligate the suppliers to sacrifice, thus facilitating a win-lose outcome. However, a win-lose negotiation can quickly escalate and become adversarial, as one of the parties may not be satisfied with the outcomes. As a result, it may contribute to occasional conflicts, workflow disruptions, inefficiencies, and poor service delivery due to budget cuts. Thus, a win-lose outcome or zero-sum approach to contract negotiation might be beneficial for one party but might not always yield positive results.

Conclusion

Contract negotiation requires dedication and commitment toward set goals to achieve program initiatives. Moreover, it is crucial to know the potential ethical, legal, social, and interpersonal factors that can impact the negotiation outcomes. However, it is advisable to observe all the elements of successful negotiation and incorporate moral and ethical values into the negotiation process to limit errors and foster sustainable relationships. Moreover, effective communication and information exchange between involved parties can serve a major role in streamlining processes. Hence, although the twelve-cell battery procurement negotiation process may benefit from a win-lose negotiation approach and outcome, observing all the tenets of successful contract negotiations will enable the initiatives to be efficient.

References

Galluccio, M. (2021). Science and Diplomacy: Negotiating Essential Alliances. Springer Nature.

Jung, S., & Krebs, P. (2019). Preparation and Negotiation Process. In The Essentials of Contract Negotiation (pp. 7-19). Springer, Cham.

Yoon-Flannery, K., & Nguyen, J. (2018). Contract Negotiation. In A Surgeon’s Path (pp. 75-80). Springer, Cham.