REPORT ON “NEGOTIATION”
Submitted by -
19301097 - Abdullah Hasan Sajjad Rafi
20304063 - SHAFAYAT MOHAMMAD FARDEEN
21201387 - SWAPNIL MAZUMDER
19104052 - AITIJHYA AHASAN
Submitted to -
Ms. Tasneem Bareen Hassan
BUSINESS AND HUMAN COMMUNICATION ( BUS201 )
Section : 07
Date of Submission: 5 th December 2022
Letter of Transmittal
5th December 2022
Ms. Tasneem Bareen Hassan
Lecturer
Brac Business School
Brac University
Dhaka, Bangladesh.
Dear Ma’am,
We the members of group 2 of section 7 of BUS201 would like to submit our report on the business
communication research topic regarding negotiation.
The following report consists of the discussion of various topics which includes the relevance of
negotiations, importance of negotiation in the business communication, business negotiation
techniques, and the pros and cons of negotiation. Mainly extensive secondary research have been
used in order to prepare this report.
Sincerely,
ABDULLAH HASAN SAJJAD RAFI (19301097)
SHAFAYAT MOHAMMAD FARDEEN (20304063)
SWAPNIL MAZUMDER (21201387)
AITIJHYA AHASAN (19104052)
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Acknowledgment
Supervisor
Ms.
:
Tasneem
Bareen
Team
ABDULLAH
SHAFAYAT
SWAPNIL
workers
HASAN
MOHAMMAD
Hassan
:
SAJJAD
RAFI
FARDEEN
MAZUMDER
AITIJHYA AHASAN
2
Executive summary
In a business exchange process negotiation is one of the most critical elements for a company. For
example, McDonald's became an international fast-food restaurant chain just from a local
restaurant for a crucial negotiation and eventually the actual company owners lost their ownership
for failing in the negotiations when the company grew bigger and bigger. Which is why negotiation
is extremely important in a company's growth and future. There are various communication
techniques and methods for negotiation. For a successful negotiation those needs to be followed.
That’s why companies hire negotiators to tackle critical situations. As in negotiation it’s tried to
keep a win-win situation for both parties so that it has some pros and cons also. All of these aspects
of business negotiation have been analyzed in the report.
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Table of contents
Letter of Transmittal
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Table of contents
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1. Introduction
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2. Negotiation’s relevance in business world
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3. Importance of negotiation in the business communication
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4. Business negotiation techniques
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5. Pros and cons of Negotiation
5.1. Pros of Negotiation :
1. Enables you to maximize your value:
2. Eliminates issues :
3. Minimizes Stress:
5. Promotes respect:
5.2. Cons of negotiation
Unequal power between parties in negotiation:
Negotiations tend to be voluntary:
Negotiations can be used as a stalling tactic:
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Conclusion :
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NEGOTIATION
1. Introduction
Negotiation is a process where two or more parties try to come to an agreement mostly on an
exchange or conflicting matter. The main purpose of negotiation is to achieve a win-win situation
on the common and individual goals of both parties. The targets mostly include the interchange of
tangibly observable goods, expertise, services, money, knowledge, and other resources
[1]
. When
it comes to the business negotiation there can be various organizations such as firms, government
and military organizations, scientific research and medical institutions and various cultural groups
as negotiating parties
[2]
. In business negotiation generally a team of negotiators represent the
organization at the negotiating table. The negotiation method and the context of negotiations is a
very important element. For example, the geographical and cultural context of the negotiating
parties plays a vital role to influence opponent parties. An example of business negotiation is
among the garment workers and the factory owners of Bangladesh after the horrific Rana Plaza
tragedy. After the tragedy the factory owners agreed at the negotiation table to improve workers'
condition and safety measures which benefited the owners at the same time by getting more new
orders. Also the industry started to boom again after this negotiation.
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Fig: Business negotiation in a nutshell
2. Negotiation’s relevance in business world
In the business world negotiation is necessary in everyday tasks. For example, negotiating the
salary when hiring employees, fixing the terms and conditions in every business deal etc.
everywhere negotiator plays a very vital role. This is why companies even hire specialized business
negotiators for best solutions. A great example is the Apple and Samsung’s negotiation of. In 2011,
Apple issued a lawsuit by claiming that Samsung copied their iPhone in the Galaxy models.
Samsung on counter issued a lawsuit against Apple for failing to pay royalties for the use of its
wireless transmission technology. However, in order to avoid a legal dispute, both giants
eventually showed some signs of willingness to negotiate. A judge later reduced the penalty against
Samsung and since then Samsung is one of Apple's largest suppliers. This illustrates the
importance of negotiation in the business world in terms of company growth and sustainability.
That’s why negotiation is a critical element in a business exchange process [3].
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3. Importance of negotiation in the business communication
When an employee receives a selection call from a company, the negotiation process begins from
that moment and it goes on the whole time he works in the company. Negotiation is a very
important element in business communication because company profit, value, respect, acceptance
etc. every critical thing depends on the negotiation process. From dealing with the vendors to the
business deals, lawsuits, product pricing, overperforming competitors etc. in every step the
company goes through various types of negotiations with different types of organizations or
individuals. That’s why in business communication, negotiations are important for companies'
overall success.
Fig : Key focus of business negotiation
4. Business negotiation techniques
There are some constants in life that never change. Negotiation abilities are more crucial than ever
in the commercial sector. Effective negotiation can influence whether or not a win-win agreement
is reached. Competence in conflict resolution is a crucial life skill, especially in the business world
where it is vital to learn how to negotiate effectively.
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Fig: Effective negotiation process
Negotiation skills are vital because lacking it may result in lost money, advancement, and other
business opportunities. Talking about another important thing is that fear should not come in the
way of negotiations. Know that if the other person seems more confident, it is typically not because
they deserve what they're requesting more than you do, but rather because they're more convinced
of it.
Fig : Example of Collaborative Tactics in negotiation
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Another important aspect of any negotiation technique is knowing when to withdraw. There are
certain conflicts that are simply not worth fighting. When business decisions are uncertain, it is
crucial to be willing to walk away and to know when to do so. If the other party is clearly trying
to get their way without offering any concessions, it is wiser to walk away from the negotiation.
Sincerity in one's conduct As with the majority of forms of negotiation, fairness is a top priority
during the process. If people can realize this and have compassion for one another's
circumstances,it will lead to a good result. Each participant to a negotiation has unique advantages
and room for concessions. If you want to thrive in commercial transactions, you must maintain a
cool head and respect people.Social talentsis another important factor. It is less important what
you say than how you express it. If you structure your case effectively, you can dramatically boost
your bargaining power. If you enter a negotiation with anxiousness or hostility, your adversary
will have the upper hand. Acting in a calm, composed, and straightforward manner is the best way.
Negotiation skills are vital and cannot be emphasized enough. Therefore, the skill to bargain will
always be valuable in the business world. However, the circumstances for corporate success are
established when executives see the importance of negotiation and prioritize assembling a team of
skilled negotiators. Remember that the objective of any successful negotiation is to obtain an
agreement that is acceptable to both parties.
Fig : Aspects of business negotiation skill
You should always know what kind of person you are dealing with so that you can adapt your
approach accordingly.
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5. Pros and cons of Negotiation
5.1. Pros of Negotiation :
As our requirements, objectives, goals, and views clash with those of others, conflicts are
unavoidable in our personal and professional lives. Disagreements can evolve into
confrontations, extreme anger, and animosity if they are not resolved via negotiation.The goal of
negotiation is to reconcile these issues in the best interests of both parties while leaving the door
open for future conversation.
The Benefits of Negotiation:
The use of negotiating is particularly beneficial:
● It can use "preventive diplomacy" to keep a disagreement from escalating.
● It has the potential to broaden both parties' areas of interest by increasing the "pie."
● It saves time and money by settling disagreements in a short amount of time.
● It enhances communication, increasing the likelihood of a favorable conclusion.
In court, the judge makes the final decision. The decision is made by the parties during a
negotiation. It allows parties to personalize the verdict to their own needs, and it works equally
well in complicated and basic daily disagreements. Moreover, there are other benefits as well.
1. Enables you to maximize your value:
Accepting the initial offer can frequently lead to missing out on a better bargain later on. As a
result, it is prudent to reject the original offering and get into a negotiation first. This increases
your chances of receiving the greatest value out of the provided deal. Of course, you wouldn't
make suggestions that are too far-fetched for the other side to accept.But in order for your side to
benefit later, you must maximize the deal's outcomes. After all, making the most of your
investments is always advantageous for your company. You'll have more effective ways to make
sure you've gotten the best value out of the deal once your negotiating abilities are fully
developed.
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2. Eliminates issues :
Negotiations are used to resolve issues. Businesses face a wide range of problems every day,
from minor disputes to significant interpersonal or professional conflicts.
Learning how to negotiate is important because it will help you adjust to the numerous obstacles
you experience and stop any major issues from developing. When you reach an agreement before
starting the business, a dispute between the parties can be avoided.
3. Minimizes Stress:
There could be a range of difficult scenarios you need to address at work, regardless of your job.
It's been argued that effective negotiating techniques are useful in practically every internal
working circumstance. Regarding various aspects of your work, such as tasks, deadlines, and
decisions, you can bargain with your coworkers and team members. With your negotiation skills,
you can cooperate with your coworkers and prevent workplace conflicts and stress.
5. Promotes respect:
It is impossible to emphasize the value of respect in the workplace. Respect from your team
members as their leader is crucial if you want them to be productive.The same holds true for
other outside parties including customers, suppliers, business partners, and vendors. In order to
negotiate with them, they must grow to respect you and your business. Your impression during a
negotiation may have a lasting effect that favorably influences subsequent negotiations and your
professional reputation.
5.2. Cons of negotiation
Although negotiation can be a great way to solve any sort of disagreements in business whether
be it on dealings, decision-making etc, there can still be some disadvantages which can limit the
effectiveness of some of the aforementioned advantages. For instance, while the ultimate
conclusion of negotiation should be to create a win-win approach that works for everyone, some
parties in bad faith join discussions expressly to make the other side suffer, in order to turn things
in their favor. The main disadvantages of negotiation in a business are: 1) negotiations between
unequal parties, 2) negotiations tend to be voluntary, and 3) Negotiations can be used as a stalling
tactic.
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Unequal power between parties in negotiation:
Parties should ideally have equal authority in a negotiation, but when one party has much less
strength, conversations can become problematically one-sided. If we consider a real life situation,
in the food industry of Bangladesh, middlemen like wholesalers or large scale retailers often buy
vegetables and groceries from farmers at extremely low prices and sell them at the market at a high
price. The farmers have little to no choice but to accept these prices since these wholesalers have
more power.
Negotiations tend to be voluntary:
Negotiations, unlike court verdicts, are voluntary, which implies that any party can withdraw at
any moment, which might have a detrimental influence on either or both sides. For example, if
two companies are close to reaching an agreement on a commercial partnership after months of
conversations, but one of the companies decides not to collaborate, all of the time, money, and
effort that went into the negotiations is completely wasted.
Negotiations can be used as a stalling tactic:
Negotiation may also be employed as a stalling in a variety of ways, all of which can affect one or
more of the negotiating parties. For example, two parties enter into a negotiation and one of the
parties is in an urgent situation and needs to get the deal done as soon as possible. If the opposite
party comes to know of this vulnerability, they will try to turn things in their favor by using various
stalling techniques to delay the negotiation in order to get things in their favor.
Conclusion :
To conclude, we want to strongly suggest that as the importance of negotiation in business is
inevitable that’s why the skills of effective negotiation have to be kept in consideration in a
company's business communication process. The methods of negotiations have to be chosen
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consciously, considering the situation carefully. Along with this the business negotiations need to
be analyzed and performed by specialized persons like business negotiators. Furthermore, the
negotiation process consists of a few cons which need to be handled wisely.
References:
[1]. Barnum, C. and Wolniansky, N. (1989), “Why Americans fail at overseas
negotiations”, Management Review, Vol. 78 No. 10, pp. 55-57.
[2]. Drake, L.E. (1994), “Cultural determinacy in negotiation”, ProQuest Dissertations
Publishing, MI State University, East Lansing, MI.
[3]. Anderson, J.C. and Narus, J.A. (2004), Business Market Management, 2nd ed.,
Pearson Education, Prentice Hall, Upper Saddle River, NJ.
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