Looking for the Harborco negotiation solution? Read our Harborco negotiation report and learn about the negotiation BATNA, outcomes, and recommendations.
Interests
The situation in the case refers to diverse types of interests among the involved parties: shared, differing, and conflicting. Harborco shares the economic and developmental interests with Fujairah Department of Economic Development and Federal Agency of Coastal Resources. At the same time, the primary interests of the UAE Environmental League profoundly differ from those held by the organization. Lastly, the interests of other ports in the UAE enter into the conflict with Harborco’s interests as they want the same things. As stated by Patton (2005), identical interests often become the source of the most intense conflicts.
Thus, during the negotiation, Harborco should pay significant attention to the ports’ concerns regarding the maintenance of financial profitability as this area is the most challenging to deal with in the given case. The parties should consider as many potential solutions to the given problems as possible in order to create a win-to-win situation. To do so, both possible negative and positive circumstances of the conflict (e.g., the effects of partnerships or their lack of financial performance) must be taken into account.
Legitimacy
Patton (2005) states that often the need for legitimacy and fair treatment is “the main driver in a dispute” (p. 281). As in the case of conflicting interests, the parties that claim fair treatment and have different views on the legitimacy of a solution may have the same interests as their counterparts. In the case, Harborco considers that it is reasonable to establish a new deep-water port, while other UAE ports may consider the realization of the proposed project as an unfair decision because it may be detrimental to their performance.
However, the opposing views of legitimacy may be supported by differing interests as well. For instance, from the perspective of the UAE Environmental League, the provision of freedom to develop any industry mix to Harborco would be unfair. To come to a well-crafted agreement, researchers suggest the involved parties seek the understanding of opposing views as the combination of different stories helps generate new insights (Weiss, 2013).
Relationships
Relationships among parties constitute a core of the negotiation process. Patton (2005) notes that “having a fond or trusting relationship may make dispute resolution easier, while hostile feelings can make it much harder” (p. 282). There are several ways in which Harborco’s relationships with other parties may go wrong. The major threat, however, is hidden in the fact that the organization needs to reach the agreement with only four of the five parties. In the given situation, Harborco may decide to prioritize relationships with those stakeholders that have less differing interests with it while neglecting the party with the major opposing views (i.e., the UAE ports).
Nevertheless, such a decision may be considered unethical and, moreover, by disrupting relationships with one of the stakeholder groups, the company may influence its performance in a negative way. To avoid unfavorable outcomes, Harborco should treat other ports as potential business partners and regard them as legitimate stakeholders − those who may have a direct impact on organizational performance and, at the same time, can be directly influenced by it (Santana, 2011). Santana (2011) states that by addressing legitimate stakeholders’ needs and providing an added value for them, the company will contribute to own sustainability and profitability.
Harborco Negotiation BATNA
In the case, many alternative solutions can be identified including the likely BATNAs for both Harborco and its counterparts. However, their BATNAs not always meet. For instance, while the best alternative for the organization will be the exercise of total freedom in the development of industry mix, the BATNA for the Federal Agency of Coastal Resources and the UAE Environmental League will be the imposition of limitations on the industry mix and the encouragement of all clean industries only. It can be thus suggested to evaluate all options and find the sufficiently acceptable one for both parties.
Options
“Options create value in negotiation by maximizing the satisfaction of shared interests…or by exploiting differences in interests” (Patton, 2005, p. 284). In the analyzed negotiation process, diverse options are provided, and they cover a wide range of the parties’ interests. For instance, in the dispute with the environmentalists, Harborco takes into account such options as some harm to ecology (i.e., neglect of green organizational practices), maintenance of ecological balance (i.e., realization of a few green initiatives), and improvement of ecological setting (i.e., organization-wide compliance with ecological standards). In this way, Harborco reviews all potential solutions from doing nothing to the consideration of public interests and their integration in the future business operations. Such an approach supported by efficient communication can help to reach a positive outcome.
Commitments
Commitments are actual decisions. They determine what the company is ready to do in order to create mutual benefits. In the context of the given negotiations, Harborco’s potential commitments may be referred to as its willingness to implement stakeholder management strategy. By addressing “an extended web of stakeholder interests,” including the needs of the “silent” stakeholder groups – local communities and the ecology, – not merely will the company meet the current public needs (e.g., Emiratization of workforce) but also succeed in the fulfillment of the organizational economic mission (Jamali, 2007, p. 217). It would be thus beneficial for Harborco to make offers based on the counterpart’s interests in case the solution does not entail significant costs.
Communication
Harborco’s goal during negotiation is the attainment of the agreement among all parties. Thus, in the communication with them, it will aim to evaluate all perceptions and doubts which they have. Patton (2005) notes that in order to understand each other better, the parties should take into account the emotional aspect of perceptions. It means that negotiators should critically evaluate their interests and implement the principles of active listening to be able to comprehend the stance of others.
Harborco Negotiation Outcomes
A desirable negotiation outcome implies the attainment of legitimate, practical, “no-waste solution that captures as much available value as possible” (Patton, 2005, p. 285). It is also expected that negotiators will develop positive relationships throughout the course of communication. However, there is a chance that Harborco may not reach the agreement with some of the parties.
Based on the situation and the nature of the conflict, the issue related to the compensation of other ports in the region may remain unresolved. While win-to-win solutions in other areas are more feasible, e.g., implementation of unlimited local preference in employment, because they are not associated with significant financial losses, and the company may relatively easily adjust to them, the large compensation does not meet Harborco’s interests at all. However, the organization considers that the construction of the port may benefit other companies as well. The outcome in this disputable area will largely depend on the efficiency of the communication and ability of the organization to convey its stance and vision.
Strengths and Weaknesses
Harborco is aware of the counterparts’ interests and, thus, understands what BATNAs they may have. The given understanding may be regarded as the company’s strength because it will guide the process of the selection of the most appropriate solution. The major weakness, however, is the lack of a clear plan of the management of disagreements and the presence of potentially insoluble conflicts.
It is possible to say that Harborco may compromise some of its initial interests and make concessions, e.g., in limitation of the industry mix, reduction of the ecological impact, and implementation of the unlimited local preference employment regulations. In some way, these agreements may be beneficial for the company as they help to balance the organizational needs and various stakeholder concerns. Thus, some compromise can contribute to long-term sustainability of the enterprise. Nevertheless, the agreement on large compensations (50-100%) may be considered inappropriate as it contradicts the company’s vision.
Recommendations
Active listening is an intrinsic part of successful communication (The art of negotiation, n.d.). Thus, it can be recommended for Harborco to implement models that facilitate active listening, e.g., the Ladder of Inference which implies that personal beliefs and assumptions are largely defined by the environment in which people operate (Lutz, 2016). From this point of view, negotiators’ unwillingness to accept the counterparts’ views may be determined by their previous experiences and backgrounds.
The principles of effective communication, as provided by the model, allow revealing these causes of current positions on issues by using inquiry and active listening. Harborco may significantly improve the mutual understanding and effectively convey its messages by applying these simple techniques. In order to explain its own way of thinking, it should invite dialog through the process of non-judgemental questioning and respectful inquiry. Harborco representatives should necessarily consider the parties’ opinions and try to integrate them into own vision of the problem to raise mutual understanding and provoke the shift toward desirable outcomes.
References
Jamali, D. (2007). A stakeholder approach to corporate social responsibility: A fresh perspective into theory and practice. Journal of Business Ethics, 82(1), 213-231. doi:10.1007/s10551-007-9572-4
Lutz, K. (2016). The Ladder of Inference: A resource list.
Patton, B. (2005). Negotiation. In M.L. Moffitt & R.C. Bordone (Eds.), The handbook of dispute resolution (pp. 279-303). San Francisco, CA: Jossey-Bass.
Santana, A. (2011). Three elements of stakeholder legitimacy. Journal of Business Ethics, 105(2), 257–265.
The art of negotiation. (n.d.)
Weiss, J. (2013). Preparing and conducting effective negotiations: Using “the seven elements.“