Negotiation is an essential part of every business. Few core abilities are crucial for an individual for successful contract negotiation, such as exceptional communication skills, knowledge of the law and contracting rules, and the ability to quickly adapt to the situation. It is important to set priorities, take control of the situation, make decisions that would be beneficial from the commercial standpoint.
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It is necessary to consider the fact that The Navy’s Contract Administration Officer is relatively hard to negotiate with when preparing for contract negotiations. Also, it is necessary to develop a set of negotiation strategies and tactics to receive the most benefit from an agreement. Angeleana Torres Inc. is ready to review a smaller profit margin in this situation, even because the company hopes for a net margin of 10% for provided services.
Setting clear profit goals beforehand should help with reaching an agreement (Purse, 2015). One of the possible profit motives that should be analyzed for accepting a smaller than average profit margin in case of getting the contract is an agreement for further cooperation. Such an agreement could be extremely beneficial for both sides because it could allow Angeleana Torres Inc. to expand and provide other kinds of services, and the other party gets a trust-worthy partner. Another profit objective that may be taken into consideration is an agreement that the Department of Navy should provide Angeleana Torres Inc. with a particular yearly amount of work that would satisfy the company.
Every individual starts a negotiation to reach a positive outcome (Fleck, Volkema, Pereira, Levy, & Vaccari, 2014). So it is rather important not to give up at the early stages of the process, and provide offers that could be beneficial for both sides. There are four primary negotiation strategies. If a problem-solving approach is chosen, both parties seek and find mutually beneficial solutions that would maximize the total benefit of all participants in the negotiations.
It creates an excellent basis for further cooperation. Competing strategy means that each side tries to gain the most advantages out of negotiations. Such negotiations are the hardest most of the time, and this strategy is not appropriate in this case because it will not be that easy to cooperate. When a compromising approach is chosen, both sides try to select a solution that would adequately satisfy both sides. However, this strategy is not optimal and will never bring the greatest possible benefit to both parties.
The yielding strategy is not the greatest because it means that a party agrees to any offer by the other side. Just slowly conceding may cause both sides to get worse results from negotiations than expected. Cooperation with Angeleana Torres Inc. would be highly beneficial for the Department of Navy so both parties should be interested in providing their opponent with great offers. However, this strategy cannot be entirely dismissed because the company must receive this contract if it plans to work with other government agencies in the future. Psychological aspects of negotiations should also not be overlooked.
Unethical behavior during negotiations is not welcomed in any case, especially in a certain environment (Westbrook, Arendall, & Padelford, 2011). One must be calm and decisive during the process so the other side could feel the importance of this negotiation. In this case, a compromising strategy should be chosen as the main one, and a yielding approach may also be considered in the case things will not go that well, and The Navy’s Contract Administration Officer takes advantage of the negotiation inexperience of his opponent. The small reduction of prices is a great tactic to achieve an advantage when negotiating a contract (Jong, 2009).
So this offer should also be considered as a way to gain an advantage over the competitor. Changing the strategy during the process of negotiations depending on the situation can also be called an essential skill. If a negotiator sees an opportunity to make a significant proposition, it should be done at the right moment because an opportunity may be missed. It is highly necessary to consider possible outcomes when making a decision (Knight, 2009).
Even though the opponent’s propositions may seem great at first, they should be carefully reviewed before giving a definite answer. This company has a pretty good chance of receiving a contract because the risk of losses by government agencies associated with such jobs is relatively small (Kim & Brown, 2012).
In conclusion, there are various extremely efficient negotiation strategies and tactics that would be effective for Angeleana Torres Inc. to win a contract with the Department of Navy. It is highly necessary to select profit objectives, develop an appropriate set of negotiation strategies and tactics, and provide propositions that would be far superior to those of another local competitor to be completely prepared for the negotiation process. It is critical for the company to not make any mistakes because it is a crucial stage of proposing.
Fleck, D., Volkema, R., Pereira, S., Levy, B., & Vaccari, L. (2014). Neutralizing unethical negotiating tactics: an empirical investigation of approach selection and effectiveness. Negotiation Journal, 30(1), 23-48.
Jong, D.M. (2009). Good negotiations: strategies for negotiating vendor contracts. The Bottom Line: Managing Library Finances, 22(2), 37-41.
Kim, Y., & Brown, T. (2012). The importance of contract design. Public Administration Review, 72(5), 687-696.
Knight, F. (2009). Risk, uncertainty and profit (2nd ed.). North Chelmsford, MS: Courier Corporation.
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Purse, N. (2015). Blurry objectives threaten engagement and profitability. Human Resource Management International Digest, 23(2), 28-30.
Westbrook, W.K., Arendall, S.C., & Padelford, M.W. (2011). Gender, competitiveness, and unethical negotiation strategies. Gender in Management: An International Journal, 26(4), 289-310.