Unit 4: Managing Different Types of Business Negotiations
In this unit, we explore factors important to negotiating in an organizational context. These include salary negotiations, ironing out contracts with suppliers, settling contract issues with a labor union, and negotiating a merger. Consider how to negotiate as the underdog in business-to-business transactions. Transformational negotiations can go beyond providing a win-win solution to a problem; they can help build alliances. In these negotiations your counterpart is a partner, rather than an adversary, engaged in a collaborative effort to build a long-term strategic partnership.
Completing this unit should take you approximately 14 hours.
Upon successful completion of this unit, you will be able to:
- identify and describe negotiation theories, concepts and tactics to manage negotiations as well as professional relationships;
- describe and assess the importance of various factors that impact negotiations, including specific issues in question, different stakeholder positions, interests, relationships, and group dynamics; and
- develop and execute effective negotiation strategies and tactics for different scenarios.
4.1: Multi-Party Business Negotiations
This video describes four parts to negotiation: goals, strategy, issues, planning. A key point for knowing whether you have won or lost in a negotiation is to compare the outcome with your initial goals. For example, what value do you place on the item or the issue? Outcomes must be clear and measurable so you can compare them to your original and subsequent goals.
This video stresses the need to prepare for successful negotiations. Two ideas will guide the chosen strategy: the importance of the outcome to you and the importance of your long-term relationship with the other party. There are four strategies you can use depending on the importance of the outcome and the relationship.
Read this article to learn about the advantages and disadvantages of coalitions and the challenges of multiparty negotiations. For example, in multi-party negotiations, the complexities are informational, procedural, and social. What is the definition of a coalition?
4.2: Negotiating Mergers and Acquisitions
Review this presentation to learn about the selling points that would be included in the Investment Thesis for Sears, including real estate, operations, top brands, leadership, liquidity, and catalysts.
Read this section to learn more about how to write a clear and effective thesis statement. A clear thesis statement is essential to provide structure for a speaker and clarity for an audience. Answer the questions at the end of the section.
This article cites how important it is for international professionals to prepare thoroughly when negotiating with people from North America. There is an ingrained perception that North Americans are less adept at being flexible and changing things on the fly. As thorough as our preparation may be, we need to allow for flexibility at any point during negotiations to ensure a successful outcome.
4.3: Sales Negotiations
Read this section to learn how to successfully close a sale. Successful closings start at the beginning. You will see many of the concepts you have been reading about in this course come to life. For example, a successful close is based on preparing to meet the opportunities. The analogy used in this article is that the selling process is like building a house: if the foundation is poured right, everything else will come together. You may find that the steps to closing a complex sale ($100,000 and higher), discover, diagnose, design, and deliver, are similar to the negotiating phases you read about earlier. Answer the questions at the end of the section.
This section describes social psychologist Robert Cialdini's six principles of persuasion. While there may not be a definitively correct answer to what is the best way to persuade your listener, these principles are powerful and effective.
4.4: Negotiating with Suppliers
Read this article to learn why businesses should have sustainable arrangements. In discussing the necessary roles of co-operation and collaboration, the author writes that the philosophy of "maximizing profit at any cost" is no longer appropriate for a world of finite resources, increasing consumer power, and increasing supplier importance.
4.5: Labor Negotiations
Read this article on collective bargaining to learn the conditions and negotiation process between groups of employees (unions) and employers in the human resource frame. In the United States, the National Labor Relations Act of 1953 covers most collective agreements in the private sector. What actions are deemed illegal by this act? How would you describe arbitration?
4.6: Gender in Business Negotiation
There are stark differences in how women and men negotiate. Research has found that men are more likely to negotiate on behalf of their own issues. Women, if they negotiate at all, are more likely to negotiate on behalf of others. This difference has implications for the overall organization and has an accumulated disadvantage for women. Even if a woman assertively negotiates on her own behalf, the perception of her efforts may be negative.
4.7: Negotiating for Yourself
This section takes us through the phases of negotiation to explain how we can use these phases to optimize our negotiated outcomes. You may not want to accept the first offer extended to you. This article offers tips for negotiation success.
Read this section. Your past salary signals to employers your level, title, and responsibilities. To obtain a higher salary, you need to position yourself so employers do not question your abilities because you have not received a high salary in the past. However, sometimes it makes sense to take a lower salary. The article responds to similar questions: What is the best way to approach a recruiter about a salary negotiation? How does someone new to the workforce approach negotiation? How does that approach change after you have had a few years of experience? There may be other benefits worth negotiating besides salary. This section will help you consider several approaches to formulate your initial position.
In addition to salary and other cash components, non-cash components (stock options, stock grants, retirement accounts, benefits, start date, employee perks, paid versus unpaid leave, lifestyle and flexibility, outplacement service, and severance pay) can play a major role in whether or not to accept a job offer.
4.8: Principals and Agents in Negotiation
Read this chapter to learn about the types of agents and their relationship to their principals.
Read this chapter to learn about the agent's duty to the principal (fiduciary and general) and the principal's duty to the agent (contract and tort).
4.9: Moves and Turns in Negotiation
Leaders can employ sources of power and influence in a meaningful and ethical way. There are six sources of power and tactics (legitimate, referent, expert, reward, coercive, and informational) people use to push or prompt others into action. What are the six sources of power, and where does each source come from?
Unit 4 Assessment
- Receive a grade
Take this assessment to see how well you understood this unit.
- This assessment does not count towards your grade. It is just for practice!
- You will see the correct answers when you submit your answers. Use this to help you study for the final exam!
- You can take this assessment as many times as you want, whenever you want.