Negotiation is an acquired skill that is required for effective business and management activities. This skill is employed in conflicts/ situations where two or more individuals hold divergent positions. In this case, the negotiation skill is utilized in a joint decision-making process between two or more parties aimed at reaching a common ending. Each party attempts to reach a favorable outcome through exchanging offers and counter-offers (Lewicki, Saunders, and Barry, 2006, p.12). Most studies have identified two strategies that can be employed in negotiations. These are integrative and distributive strategies. The integrative strategy entails a situation whereby one party is engaged in an interest-based negotiation process with another while the distributive strategy involves one party taking a stern position on a certain situation during the process of negotiating with another (Lewicki et al., 2006, p.18).
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Additionally, the authors argue that there are three approaches to negotiations. These are soft, hard and principled negotiations. Soft negotiations involve an integrative interest-based negotiating approach while hard negotiations entail highly competitive positional negotiating approaches. On the other hand, principled approaches involve both soft and hard negotiation tactics. This essay entails the analysis of two articles in which the two negotiation strategies are employed in reaching a common outcome. It also gives a description of the negotiation process in each case. Finally, the essay compares and contrasts the approaches employed in the two strategies.
The fate of Detroit’s Big 3 will trickle down locally By Bill Kirk
The article entails a negotiation between the three CEOs of three auto Companies (Chrysler, Ford and General Motors) and the US government. The conflict/ situation that arises, in this case, is that the three Company bosses have formed a combined force in asking the government to offer them a bailout package (Kirk, 2008, par.2). The three individuals are representing the interests of many suppliers of small auto parts, auto dealers and many workers in the auto industry. They base their arguments on the fact that, if the three giants fail to obtain the loan, about 2-3 million jobs will be lost. They also cite the falling sales of other industries associated with the current situation in the auto industry. The approach used in this case is that of appealing to the government to come to the aid of its citizens.
Saudi Oil Tanker Owners in Negotiations with Pirates (Update 1)
This article involves negotiations between the owners of the oil tanker from Saudi Arabia and the Pirates that have captured the vessel off the coast of Somalia. The conflict that arises, in this case, is that the Pirates are demanding ransom money from the owners of the tanker in order to release it and its crew (Alexander and Krause-Jackson, 2008, par.2). The situation here is that one party has an upper hand over the other. The Pirates are involved in hard positional negotiations with the vessel owners considering the fact that they are holding hostage the crew members and the ship is carrying products worth millions of dollars.
The two articles are similar in that negotiations are used by one party is asking the other for cash. Both cases involve one party holding the position that the other party must give in to their demands otherwise there will be consequences. Both parties employ counteroffers, conditions and requisites in negotiating.
The difference between the two articles is that in the first one, the US government stands no chance of being forced into meeting the terms of the other parties while in the second one, the vessel owners can be coerced into meeting the Pirates’ demands. The arguments used by the three bosses are only possibilities and it is not guaranteed that they will happen in case the government fails to provide the loan. On the other hand, if the pirates threaten to kill the captives, they will actually do it if the ransom money is not paid.
These negotiation strategies are useful in business, management and bargaining in that one party can employ any of the two in getting the other party to meet the demands perceived to be favorable for the prevailing conditions.
The essay has given a detailed analysis of two articles in which different approaches to negotiations have been employed. The similarities and differences between the two articles have also been given in this essay. It is worth noting that, a negotiation is a useful tool in business and management since it allows two parties holding divergent positions to reach a given favorable outcome through a joint decision-making process.
Alexander, C., & Krause-Jackson, F. (2008). Saudi oil tanker owners in negotiations with pirates (Update 1). Bloomberg L.P. Web.
Kirk, B. (2008). Fate of Detroit’s Big 3 will trickle down locally. North Andover: EargleTribune.com. Web.
Lewicki, R., Saunders, D., & Barry, B. (2006). Negotiation: readings, exercises, and cases (5th ed.). New York: McGraw Hill.