Negotiation Assignment

INTRODUCTION Whether people like it or not, they are negotiators. Negotiation is an obvious thing in life such as: a negotiation with boss about raising salary, a negotiation with customers about products, services which the desired price or a group of oil and mining companies make a plan to found joint venture in offshore oil exploration, Minister of Foreign Affairs of United States met the Soviet Union to seek agreement on nuclear weapons, a negotiation among countries on WTO accession, or simply lovers negotiate with each other the place to hang out and what to eat. All these are negotiated. Negotiation is not a process reserved only for the skilled diplomat, top salesperson, or ardent advocate for an organized lobby; it is something that everyone does, almost daily (Lewicki et al 2011:2). There are existed more situations which need to negotiate, however not much of importance is attached to negotiation in day-to-day life, because it is almost a routine affair (Singh, 2010). Although negotiation happens daily, however how to achieve effective negotiation is not easy. Especially in business, the desire of every enterprise is to get highest profit. This depends a lot on diplomatic, negotiation of entrepreneur on market. Economic negotiations is only really rich, diverse and promote its important role as social production development at high levels, commodity producing more and more, the production and business activities, exchanges take place not only on strong national scope, but also in the whole world. In term of integration, negotiation is more developed, more complicated.

MAIN BODY 1.1 DEFINITION OF NEGOTIATION Mentioned about negotiation, perhaps many people know; but the true meaning of what it is, reflects what specific concepts then there are very few perfect answers. Negotiation is a process by which two or more parties each which its own goals & perspectives coordinate areas of interest through concessions & compromise to reach an agreement and take the joint decision about areas of common concerns in a situation in which neither side has nor wants to use power (Kavita Singh, 2010). In simplest terms, negotiation is a discussion between two or more disputants who are trying to work out a solution to their problem1. That means if the problem has not been resolved 1 "Negotiation," International Online Training Program on Intractable Conflict, Conflict Research Consortium, University of Colorado, [available at: http://www.colorado.edu/conflict/peace/treatment/negotn.htm]

successfully in fact, the negotiation process has not ended. It is like when two or a group of people want to share a basket of oranges which are very precious and rare, but who also want to share more, civilized people do not support the use of violence, thus invented negotiation. It is also demonstrated by Robbins SP., et al (2001) that negotiation is a process in which two or more parties exchange goods and services and attempt to agree upon the exchange rate for them. By negotiation, common interest will be met and the solution will achieve the most satisfied. If done well, negotiations could sight the relationship between the parties and lead to understanding and respecting each other deeply, if both parties desire to maintain long-term relationships. According to Fisher & Ury (1991), negotiation is basic method to achieve what we want from others. It is communication process designed to reach an agreement between us and the other party which has the right to share and countervailing benefits. Negotiation situations have fundamentally the same objectives whether negotiation of countries at war, they negotiate for business contract between buyer and seller or labour conditions between management and labour, negotiation in finding sponsor organization for huge event which is including to apportion benefits and to resolve conflict. The terminology and different expressions used in conflict resolution to describe the needs and desires. Corresponding to the desired position in which parties want to win the conflict whereas the need corresponds to the fundamental benefits of their own. The negotiators expressed variety of different desires depending on perspective distribution of benefits. In international business, negotiation is an indispensable activity and is particularly important. 1.2 NEGOTIATION AND CASES Whenever the need, the desire of a personal conflicts with the others, this is a start for negotiation in order to satisfy all the demands, maintain the relationships and achieve agreement. Everyone wants to participate in the decisions that affect themselves, very few people accept a decision to be ruled by others. People who do not like someone, they negotiate to resolve these differences. The real world is a huge negotiating table and the negotiations may occur in the conference, on the table, the light and the darkness. Negotiations are on political, diplomatic, military, business as well as other subtle. Gosselin (2007) affirmed that when considering about negotiation, there should be addressed in term of a workflow rather than a game. There are numerous situations which can be handled by negotiation. Three main aspects of negotiation are mentioned:

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Personal situation: the individual client has large negotiation enough to allow negotiating

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such as buying a car, house or other valuable assets. Organizational situation: there is internal aspect where management and staffs represent basic business functions such as setting goals, negotiation in company, negotiating about resources or external aspect such as the meeting between two or more parties in business

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contract Client situation: appropriate to the sale of products or services with long-term relationship to different customers.

The negotiation in business is price. The desire of buyers and sellers are different. Seller wants to increase price while the desire of buyer is reducing price (or unchanged). It is reason for a negotiation occurs in every purchase process. The negotiation is in management of an organization. Management has always happened in the negotiations both internal and external affairs. A typical case describes the contrary between two sides – labour and management. For the vast majority of organizations, the cost of the people who do the work is the largest single item of operating costs (Brewster C., et al, 2011). An industrial manufacturing firm, income depends on many factors, including the cost of inputs. In many years of rising profits, unions and organizations representing the interests of workers stand up to require redistributing profits by increasing the auxiliary bonuses and threatened to strike if their demands were not met. And the relationship between worker – management changes depending on circumstances which can be stressful and suspect each other despite the financial situation of enterprise is still bright. The firm continue efforts to increase the production according to the program orientation for years. The negotiation will certainly happen when leaders intend to set up improvements payment system, which will apply a change of increase rate wage associated with the production results, however to reduce minimum the wage. The discussion will focus on the rate of wage increases. When discussing about the increasing rate of wage, as usual every year, both sides get 5% as a basis for discussion, but the process is quite tough debate, both sides come to an agreement at the level of 2% - 3%. The two sides exchanged views of each other and the familiar tricks of the Trade Union are threatening to strike. Leaders of enterprise do not avoid discussion, proposed a new wage policy, implemented in many years, and is to determine the income of all workers in accordance with the results produced of enterprise. Applying this principle, the board gave the Union to discuss a fundamental change in the way paid in the period of transition, with some assurance. Changing the

negotiating positions of the annual salary rate by introducing a new wage policy initiative by the leader led discussion on how to apply the new payment period which extend to over a number of years. The change of negotiation content led to the parties expressed satisfaction at the higher level than an initial. So to avoid a conflict, people do turn things around in many ways in order to facilitate cooperation between the negotiating parties. Negotiation is not only just related to business activity, it is a basic human activity (Ghauri & Usunier, 2003, p.3). You have been driving your motorbike for many years, and spent a lot of money to repair and now it doesn’t work anymore. And now you are attracted by the new vehicle advertisement and the program of exchanging new motorbike. At this time, you also discover that you have not been able to pay the difference when changing vehicles. Therefore, you decide to go into negotiations with shop owners in order to get the new car. 1.3 NEGOTIATION AND SKILLS From the above cases, it can be seen that although staying in different situations, the objective of negotiations is still to go to the agreement, therefore it is also has certain basic rules and skills in negotiation. The globalization of economic and business activity, now more than ever before, requires people from all disciplines and professions to make deals with companies and organizations throughout the world” (Salacuse, 2003, p.viii). Therefore, in order to be successful in negotiation, negotiators must be steadfast, prudently protect their rights, and must know how to respond flexibly, creatively in each particular case. Negotiation is a process of discussion, agreement between the parties to come to consensus, so negotiation is process of making the request, accept concessions if successful, each party will achieve the purpose for each side, rather than the process of insisting on protecting their rights. Therefore, moreover, they must prepare carefully, thoroughly, building negotiation objectives in science way, prepare solid argument to convince partners, steadfastly defend goals. At the same time, negotiators must be quick, flexible, analyse and discover the plan of partners, bringing greater benefits to the parties, in some case should be subtle changes, accept the partners’ plan to achieve the ultimate goal is the successful negotiation. Negotiators must know to harmonize the protection of interests in maintaining and developing relationships with partners. Negotiation is a process of exchange and discussion between the parties convinced that between them have in common, but also have point of disagreement, to expand common the mutual and narrow section of disagreement to go to unified comments. Successful

negotiation is just to keep relationship as well as keep the benefit of the parties; therefore negotiation is agreed process between “collaboration” and “conflict”. In negotiation, must be avoided: negotiating style is too “soft”, just keeps focused relationship of the two sides without regard to their position, leading to an opponent being pinched, from this concession to the others, eventually suffer despite of was going to agreement. On the contrary, it should not be “hard”, insisted protect its position as the talks broke; the corporation was too pressed to perform well. In international business, the negotiators need to ensure the role “mutually benefits”. According to Nierenberg (1990), negotiation is not a game of chess, not to fight a treasure winner, nor a battle to destroy or put the opponent until die, which is negotiating a mutually career benefits. Negotiators need to protect their own interests, in the identified range which can be found the most benefits, on the other hands, any one always satisfy the lowest needs of the enemy. Particularly in international business, negotiation is an international exchange activity, so it depends much on the political relations and diplomacy of the countries concerned. When negotiating with foreign companies, you need to abide by good way, foreign policy related to the country. At the same time, to learn the ways, policies, legislation and regulations regarding to import of partner countries, so as not to violate, to prevent risks. In order to be successful in negotiation, negotiators need to know how to apply the strategy in different situation and use basic skills to achieve the goal depending on different negotiation situation that was showed by Nierenberg (1990) -

Cooperative strategy: the approach of the negotiations for the conflict is resolved it but retains personal relationships and ensure the two sides to achieve their gals. Here is the

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cooperative solution that requires the two sides hold the view “win – win”. Compromise strategy: To find a solution to achieve “win – win” is impossible, the negotiators towards an outcome includes a small victory and a small portion of losses. Persuasion and influence to pull this style. Compromise situation means that two sides

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accept and make a point of “win less – lose less” Mediation strategy: The approach of negotiators to conflict is to maintain the personal relationship by anyways, less related or no relation to purpose of the parties. Concession, compromises principle and avoid conflict is seen as a way to protect relationships. Here is

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the unyielding or “lose – win” when the opinion of negotiators is allowing the others to win. Control strategy: the negotiators approach conflict is to understand the steps necessary to ensure satisfying personal purposes, even spend the relationship. Conflict is seen as a statement win, must be win in any ways. This is a negotiated settlement that use any physical force as appropriate to defend a point of view that they believe is right or trying to win.

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Avoiding strategy: the negotiators consider avoiding conflict. Central theme of this style is elusive, it produces disappointing results is entirely for the parties involved. The purpose of the party is not met, nor maintains relationships. Here is the point of withdrawal, in which the views of the negotiators is to retreat, accept defeat, allowing the other side to win the honour

An emphasis on strategic behavior is central to the micro-political approach (Edward, et.al, 2007). Depending on place, time and behaviour of the other party, as well as how the negotiators protect their own interests, they choose the suitable strategy, the resource and the resolution of conflicts to ensure the right and success negotiation. And the result is successful or not, it also depends on the skill of negotiators during doing the negotiation. The negotiators should master the art of negotiation in fluent speak, natural intonation, volume matching. Secondly, the negotiators should create understanding by concentrating to listen, take notes, creating rational space for negotiation and especially do not despise enemy. Moreover, the negotiators should pay attention in body language including to build relationships first, judge the perceived of enemy, observe the change of opponent and learn the culture of negotiation in different countries. CONCLUSION In summary, everybody in life is negotiators, however to become a leading in negotiation, it is needed to determine certainly the elements which affect to negotiating process and apply well the rules of negotiation then achieve the success in negotiation. Essentially negotiation is behaviour and process in which the parties will jointly conduct exchanges, discuss the conditions and measure to jointly deal and agreed the problem, situation that they are as close to their expected benefits as well. And reached agreement is the success of the parties. Negotiation is indispensable in life, including career, business, and politics, social or even personal life whereas people face to negotiation every day. The results affect directly to the benefits of negotiators and others around. Therefore the study, master the art of negotiation is extremely important. It helps negotiators enter negotiations with confidence, grasp every opportunity to win and avoid the mistakes leading up to the failure. The success of negotiation depends largely on preparation, bravery and experience. Through the above analysis, in order to achieve success, negotiators need to capture the essence of negotiation, clearly define objectives and outcome to be achieved, which sets up the science negotiation process, efficient and flexibly use of skills support. There is a rational process with good skills to help the negotiators are carried out quickly, accurately and promptly remedy the problem, bad situation occur which affect the negotiation process.

REFERENCES Brewster, C., Sparrow, P., Vernon, G., & Houldsworth, E. (2011) Comparative HRM and Institutional Influences. In Brewster et al (2011) International Human Resource Management. London, CIPD. Ghauri, P. N. & Usunier, J. C. (2003). International Business Negotiations (2nd ed.). Kidlington, Oxford, UK: Pergamon.

Edwards, T., Colling, T. & Ferner, A.M., 2007. Conceptual approaches to the transfer of employment practices in multinational companies: An integrated approach. Human Resource Management, 17(3), pp.201–217. Available at: http://hdl.handle.net/2086/3176.

Fisher R. & Ury W. (1991), Getting to Yes – Negotiating an agreement without giving in (2nd ed.). Random House Business Books

Lewicki, R., Saunders, D. and Barry, B. (2011) Essentials of Negotiation. London, McGraw Hill. Chapter One. Nierenberg G.I., The art of negotiating (1990), Intl Center for Creative Thinking Ltd

"Negotiation," International Online Training Program on Intractable Conflict, Conflict Research Consortium, University of Colorado, [available at: http://www.colorado.edu/conflict/peace/treatment/negotn.htm]

Gosselin T., Practical Negotiating - Tools, Tactics & Techniques (2007), John Wiley and Sons Ltd Robbins SP., Odendaal A., & Roodt G. (2001), Organizational Behavior – Global and Souther African Perspectives, Pearson Education Salacuse, J. W. (2003). The global negotiator. New York, NY: Palgrave Macmillan. Singh B.D., Negotiation & Counselling – Text and Cases (2010) fifth edition, New Delhi Brewster Singh K., Organizational behaviour – Text and Cases (2010), Peason Education