Home > Free Essays > Business > Business Communication > Negotiation in Organizations

Negotiation in Organizations Term Paper

Exclusively available on IvyPanda Available only on IvyPanda
Updated: Jan 14th, 2020

Introduction

Currently, there exist a lot pertinent issues which create problems for different stakeholders in the society. In such situations, negotiations assist in the solution of these problems and discovery of lasting solutions to these problems. Negotiation is a widespread technique involving discussions or dialogue between people used in solving interpersonal, inter-group or interstate conflicts.

People have different ideas or interests on different subjects. However, different people might be interested in one particular subject leading to conflict in some instances. In these situations, negotiations are used in resolving the issue and possibly in making people agree to a common settlement that improves the relationship between them.

Negotiations are very important in the aversion of dangerous situations and in the creation of lasting solutions. The art of negotiation was very essential and it helped to resolve wars and conflicts in many nations, for instance, the establishment of the Republic of South Sudan.

Agreements and binding solutions are some of the benefits accrued from negotiations, because negotiations aim at finding solutions to conflicts and building lasting relationships between aggrieved parties. This essay will take a look into negotiation and how it has been used in solving disputes between Newmont, a large Gold producer, the Ghanaian people and stakeholders in a Gold mining project.

The essay will focus on negotiating skills used such as position bargaining, different stages of negotiation and the eventual outcomes of the negotiation. The essay will cover the negotiation between Newmont and other stakeholders starting from the commencement of the conflict to the final resolution. The essay will also look at the different stages and strategies used in arriving at the final solution.

Process of Negotiation

Negotiation is a challenging task that involves the use of intricate procedures, rules and approaches. The process of negotiation involves the use of so many techniques, and it is divided into several stages that include preparation, opening the negotiation, Negotiating, closure and signing or affirming to the agreement.

In the process of negotiation, it is inherent for the negotiator to understand the position of each interested party in connection with the conflict. The first step in a negotiation is the preparation process and this step involves the gathering information concerning facts that contributed to the conflict. At this stage, it is important to contact all the stakeholders to be involved in the negotiation.

As a negotiator, it is essential for you to conduct extensive researches on the pertinent issues that led to the conflict and history of the conflict. Before negotiations, the negotiator explains to all stakeholders his intentions (Dietmeyer, 2004). He should also try to establish a relationship with all the stakeholders and plan strategically for the negotiations.

The next stage in the process of negotiation involves the introduction of the parties to each other. It is at this juncture that the issues are defined, and the agenda of the negotiation is set. It is also significant that interests of all stakeholders are identified so as to strategize on how negotiations are going to be guided. The guiding factor in this stage is a balance of power.

A skilful negotiator should understand that it is very difficult and sometimes impossible to negotiate. Researchers and Envoys articulate that it is difficult to negotiate with someone who has considerable power over you in any given situation (Lewicki, 2010). Power in negotiation is important in achieving a settled agreement.

In negotiations, occasionally to achieve success you have to offer the other party more than their “best alternative to a negotiated agreement” (BATNA).

As a result, it is important to find a way in which you can increase your bargaining power as a negotiator to make it easy for you to command respect over the other parties. The BATNA is a strategy used in defining the alternatives that could be used in defining other options if a negotiation is not reached (Thompson, 2008).

The main and important part of negotiation is the negotiation process where all the parties meet and kick-start dialogue. During the negotiation, it is important for the negotiator and all the stakeholders to come up with multiple options for settling the conflict.

Throughout the negotiation process, it is essential for the negotiator to find out teething problems that might prevent reaching for a settlement (Derrida, 2002). It is also important for the negotiator and all stakeholders to asses all the valid options against the set out objectives.

In the process of negotiation, the negotiator should settle for the best approach in solving the conflict. Because of this reason it is essential to understand the conflict. Conflicts are usually understood through the use of a conflict map as illustrated by figure 1 below.

A conflict map.

Once the conflict is understood, the negotiator and his team should take the opposing sides and roles for the negotiations. Upon the comprehension of the problem, it is important for all stakeholders to surface with ideas and offers to end the conflict. The Final stage in the negotiation process is making concessions and writing a formal settlement or agreement to conclude the negotiation.

Negotiation between Newmont and the Ghanaian people

Mining is a large scale operation that involves a lot of people and a lot of stakeholders are usually involved in this operation. Newmont is a large scale Gold producer based in the United States and operated mines in different regions globally. When Newmont entered the Ghanaian market to establish Gold mines, it contacted the Ghanaian government, the Noyem people and several other stakeholders.

However, when large mining companies establish operations in various regions, they often displace population, destroy the environment and eradicate the livelihoods of small miners. Newmont was granted concessions to mine in the Noyem region in Ghana, the concession was granted by the Ghanaian government.

Nevertheless, problems such as the destruction of the livelihood of small and artisanal miners were supported by the government leaving a lot of people poor and destitute. The government committed to fighting smuggling of minerals by small scale miners and therefore, it licensed large mining companies.

These measures fail to address the problem of poverty, land and economic issues. As a result, conflict between the government, mining companies and the Noyem (Ghanaian) people ensued (Acuff, 2008). The environmental protection agency had issues with the mining project to be undertaken in Noyem since it argued that the project would lead to massive environmental degradation.

In the undeveloped countries like Ghana, artisanal and small scale miners perceive the government as being allied to large scale producers. The feeling of these small scale miners usually leads to mistrust and therefore, conflicts occur and lead to problems between people. Due to the problems concerning Newmont mining operations in Ghana, a negotiation was necessary to resolve this issue.

Newmont faced a lot of challenges in the mining of Gold in the Noyem land since they faced the challenge of environmental sustainability, corporate image and other miscellaneous issues. The environmental protection agency (EPA), Non-governmental agencies (NGO’s), and environmentalists put pressure on Newmont to conduct sustainable mining and protect the environment.

Newmont assessed its operations in Ghana and made the comparison to the operations of other small scale and artisanal miners. The Gold industry in Ghana had grown tremendously due to the introduction of legislation that favoured small scale production of Gold (Derrida, 2002).

The government in the late 1980’s and early 1990’s had licensed Gold buying companies to engage in buying Gold from small scale and artisanal miners. As a result, the industry grew tremendously especially when the Gold prices were high and this favoured mining in small scale.

The presence of active gold mining and the licensing of private gold buyers in the Ghana helped the gold industry grow and created a new partnership between the small scale miners and licensed gold traders.

After analysing the situation, Newmont chose to go with the “best alternative to a negotiated agreement” (BATNA) approach (Walker, 1995). In this case, the company wanted to look out for the interests of all stakeholders and thus, the company decided to engage small scale and artisanal miners in the mining operation.

Newmont decided buy gold directly from these miners once they had formed a formidable group for the company to work with them. For the negotiation to be carried out, the company together with all stakeholders set up a negotiation team. The team involved Newmont, the Noyem Chief, the Mineral Chamber, the University of Manchester, and the Precious Minerals Marketing Corporation.

The other main issue was the conflict between Newmont and EPA over environmental protection rights. This issue was settled first due to its potential of destroying the ongoing negotiations. During the negotiations, it was necessary to ascertain the bargaining power held by each of the parties so that the negotiations could not favour nay of the parties (Thompson, 2008).

Overview of the Negotiation

The Negotiations between all stakeholders in the Noyem gold mining project started in 2008, and it was this juncture that all negotiation skills were employed. The first step that initiated the negotiations was the analysis of the position of each and every party in the mining project. Newmont had an interest in opening an open pit mine in the Noyem region; however, this conflicted with position of the EPA which was against the project.

The Noyem chief interest was to protect the interests of small and artisanal miners who resided in the Noyem region (Strauss, 2007). The mineral chamber’s mandate of licensing all mining activities was also interested in monitoring all mining activities in the region. In the negotiation process, the University of Manchester sent a team to act lead negotiators in the project (Dietmeyer, 2004).

The operations of the small and artisanal miners were supported by companies licensed to purchase gold from them. These miners formed co-operatives and the co-operatives would deal with companies licensed by the Precious Minerals Marketing Corporation. As a result, the Precious Minerals Marketing Corporation had an interest in the undertaking of the Noyem gold project.

Upon the study of the interests of all stakeholders in the Noyem gold project, the University of Manchester team decided to introduce all parties to one another. Once all the parties were introduced, the negotiators decided to contact all the parties to state their interest in the project. It is from interests of all parties that options could be devised with the aim of coming up with an objective.

The objectives of the negotiations were to come up with a binding agreement that would be beneficial to all the parties. The interests of most of the parties conflicted with those of Newmont and thus all the stakeholders decided to come up with an alternative solution to solving the conflict (Acuff, 2008). Due to the difficulty in pushing for its interests, Newmont decided to agree to a BATNA.

Most of the stakeholders upon choosing different alternative options, they settled for mining to be undertaken by small and artisanal miners in the Noyem region. Small and artisanal mining was active in the Noyem region before Newmont was granted a mining concession in the region.

Environmentalists and some NGO’s were at the fore front of fighting for the rights of the small and artisanal miners in the process of securing permissions for the m to mine gold. These organizations argued that small scale miners had a right to earn a living through mining as a larger part of fighting poverty.

Whereas, environmentalists were of the argument that small scale miners did not destroy the environment compared to large scale miners such as Newmont (Ghauri, 2003).

The negotiation position taken by most of the stakeholders was against granting Newmont permission to mine gold in Noyem. They argued that Newmont’s operations would amount to disadvantaging the local population, lead to environmental degradation and cause tension between the locals and the company.

As a result, the negotiation settled for a BATNA whereby local miners were given a chance to mine and sell their gold to Newmont under the leadership of the Noyem chief. This option took into perspective that the operation of small and artisanal miners was in operation and it would only be prudent for them to participate in gold mining.

The option of using small scale miners in the mining of gold was a decision that was in tune with Newmont’s CSR (Corporate Social Responsibility). Using the options available for Newmont and all stakeholders, Newmont has better bargaining power due to its huge financial resource, legal concession and high BATNA.

However, the Noyem people through the mining co-operatives could provide Newmont with the opportunity to gain legitimacy on the front of CSR (Lewicki, 2010). The negotiations were structured to look at the gains to be accrued by all stakeholders while, an agreement could be reached easily.

Finally, all the stakeholders agreed to the option of allowing the Noyem people to mine gold and sell it to Newmont in exchange for a working relationship between the two parties. All the parties also settled for further negotiations in case problems persisted concerning the agreement.

Analysis of the Negotiation

The negotiation between all the stakeholders in the Noyem gold mining project led to a settled agreement based on a BATNA. The agreement served the interests of all parties in the negotiation, all negotiation procedures, and factors were followed in the Noyem gold project. Newmont’s decision to settle for a BATNA was the best solution to solving the problem since the conflict would still persist.

The negotiations between all stakeholders yielded results that boosted the relationship between all parties in the negotiation. In the process of negotiation, it is important for all parties to offer a factual account of their position and interest in the ensuing conflict.

The negotiation agreement will be beneficial to all parties since the negotiation would help coagulate the relationship between Newmont and the people of Ghana. The negotiations strengthened incentives for Newmont to work with the Noyem people and help protect the livelihood of the Noyem people (Thompson, 2008).

The benefit of the negotiation was that environmental biodiversity was considered in finding a solution to the conflict. In a negotiation, all stakeholders must look for a win-win solution for a binding solution to be found. In this situation, Newmont settled for a settlement that favoured the position of most of the stakeholders in the negotiation.

All stages and factors for negotiation were considered in the negotiation undertaking (Strauss, 2007). In the analysis of a negotiation process, we take a look at the outcomes of the negotiation with the aim of deducing the effectiveness of negotiations. In the Noyem gold project, negotiations yielded an agreement that include the ability of the building relationship between the parties.

The negotiation between the stakeholders was satisfactory in that all the parties in the negotiation agreed to the terms. The university of Manchester team played a pivotal role in coming up with the settlement in the negotiation procedures. As the negotiators, the team created a serene environment for the negotiations to continue up to the point of fruition.

The Noyem chief wielded little power when entering into this negotiation and the negotiators in this project had to tilt the power balance to favour the Noyem chief. Shifting the power balance would help the other parties into creating a level playing field for the negotiations to continue. In this case, BATNA for every stakeholder in this case was very important (Walker, 1995).

From the negotiator’s point of view, Newmont had a considerable power over all other parties due to the fact that the company has a huge financial resource, a legal concession and experience in mining. However, its BATNA is not so good since it involves relinquishing its rights over the mining activities in Noyem.

While, the Noyem people who form the bulk of the small and artisanal miners are illegal miners who cannot be allowed to mine due to their activities (Dietmeyer, 2004). But on the other hand, on realising that Newmont’s BATNA favoured them, the balance of power changed and favoured them. The change in the balance of power yielded a level playing ground for all parties to negotiate easily.

The Noyem people’ BATNA is very strong and therefore, if Newmont take the first option of then it weakens the Noyem people’s position. As a result, the negotiators decided to push for the position of the two major stakeholders to work together in the mining project. The negotiations were fruitful, and it led to the best solution in this gold mining project.

Summary and Recommendations

When solving a problem, several techniques are used in searching for a solution, in the case of the Noyem gold project the use of negotiations was the best solution. The negotiations in this project were fruitful and an agreement was reached. The process of negotiation is usually challenging, especially when one of the parties has a large substantial power over other parties.

Understanding power and its influence in negotiations are crucial in making plans for the creation of good and suitable propositions to solving the conflict. The negotiator should wield a sizeable control over the negotiation and ensure that no party holds a considerable amount of power over the other parties.

The negotiations that took place between the Noyem people and Newmont focussed on the interests of the parties, and in this case, it majored on monetary gains (Lewicki, 2010).

However, there was more to gain from the negotiations in this project due to the diversity and stakes held by each and every stakeholder. Newmont’s goal was to benefit from the project and at the same time build relations with the Noyem people and the government of Ghana.

The university of Manchester team that formed the lead negotiator role benefitted from the change in position from Newmont. Newmont has a role in its business operation of being responsible to the community and its customers. Therefore, Newmont’s CSR strategy ensured that the company settled for a BATNA which helped in building trust and better relations with other stakeholders (Thompson, 2008).

Newmont’s move in the negotiation ensured better relations with the Ghanaian government, the Noyem people and the Environmental Protection Agency. Newmont could also benefit in future projects especially in Africa because the negotiations showed that Newmont was fully committed to its CSR policy.

The negotiations were an example in the public-private partnership with different government authorities, Newmont and the Noyem people engaging in the negotiation (Walker, 1995).

The importances of negotiations were accrued from this project because it departed from the past whereby large mining companies often ignore the interests of all stakeholders and undertake a project. The negotiations yielded an agreement that went ahead to solve the pertinent issue of resource sharing in the society.

The negotiation between the Noyem people, Newmont and other stakeholders was a perfect example of how negotiations should be undertaken. It is recommended by skilled negotiators that different stakeholders to state their positions and interest in the subject being discussed.

For a successful negotiation, it is advised that the negotiator should steer the parties from sticking to their position and explore other alternatives of finding a solution. In most cases if finding a solution is difficult, the negotiator might come up with a BATNA for each interested party in the negotiations. A BATNA is normally used in difficult negotiations and in cases where a win-win situation is being searched by all parties.

The case of Noyem project is one such case whereby all the parties seek to benefit from the project and they all had to settle for the best possible solution (Ghauri, 2003). The best policy in negotiation is to choose a negotiator who is skilled in the particular field where conflict persists. In the case of the Noyem gold project, the university of Manchester team consisted of experts who had studied gold mining activities in Ghana.

Thus, the university of Manchester team were better placed to handle the negotiations in this project. It is usually highly recommended that a negotiator should be an individual or team that consists of people with no vested interest in the subject causing the conflict (Walker, 1995).

Conclusion

Conflicts in the society today cannot be avoided, and amicable ways of solving these conflicts should be devised. Huge projects such as construction of roads, bridges or mining projects often cause conflicts which are difficult to resolve. One such conflict was the gold mining project in Noyem in Ghana. During the undertaking of this project, Newmont was awarded the concession to mine gold.

A conflict ensued with different stakeholders opposing the project and thus negotiations were kick-started. The phase of the negotiations saw different parties give their positions, and finally an agreement was signed. The agreement focussed on the best approach to a negotiated agreement.

Under this deal, the party with enormous bargaining power had to settle for a less than initial offer for the negotiations and the position of other parties to be respected. In the negotiations between all stakeholders, in the Noyem gold project, the lead negotiator was a party that had no stake in the project.

Negotiation procedures were strictly adhered to in this case because it is always prudent for the negotiator to be non-partisan or have zero interest in the subject under negotiations. In undertaking difficult negotiations that involve a lot of interested parties and huge resources as exemplified in the Noyem gold project it is important for the negotiators to trend carefully in finding a solution (Acuff, 2008).

The negotiation strategy of using BATNA was employed in finding a solution for the conflict in this project. Using this strategy, the interested parties were able to lose their initial positions and settle for an agreement that favoured all stakeholders in the conflict.

References

Acuff, F. (2008). How to negotiate anything with anyone anywhere around the world. Washington, WA: AMACOM Div American Mgmt Assn.

Derrida, J. & Rottenberg, E. (2002). Negotiations: interventions and interviews, 1971- 2001. Los Angeles, CA: Stanford University Press.

Dietmeyer, B. & Kaplan, R. (2004). Strategic negotiation: a breakthrough 4-step process for effective business negotiation. Lowell, MA: Kaplan Publishing.

Ghauri, P. & Usunier, J. (2003). International business negotiations. Austin, TX: Emerald Group Publishing.

Lewicki, R., Saunders, D. & Barry, B. (2010). Negotiation. New York, NY: McGraw- Hill.

Strauss, A. (2007). Negotiations: varieties, contexts, processes, and social order. Boston, MA: University of Michigan Press.

Thompson, L. (2008). The truth about negotiations. London: FT Press.

Walker, M. & Harris, G. (1995). Negotiations: six steps to success. Chicago, IL: PTR Prentice Hall.

This term paper on Negotiation in Organizations was written and submitted by your fellow student. You are free to use it for research and reference purposes in order to write your own paper; however, you must cite it accordingly.
Removal Request
If you are the copyright owner of this paper and no longer wish to have your work published on IvyPanda.
Request the removal

Need a custom Term Paper sample written from scratch by
professional specifically for you?

Writer online avatar
Writer online avatar
Writer online avatar
Writer online avatar
Writer online avatar
Writer online avatar
Writer online avatar
Writer online avatar
Writer online avatar
Writer online avatar
Writer online avatar
Writer online avatar

certified writers online

Cite This paper

Select a website referencing style:

Reference

IvyPanda. (2020, January 14). Negotiation in Organizations. Retrieved from https://ivypanda.com/essays/negotiation-in-organizations-term-paper/

Work Cited

"Negotiation in Organizations." IvyPanda, 14 Jan. 2020, ivypanda.com/essays/negotiation-in-organizations-term-paper/.

1. IvyPanda. "Negotiation in Organizations." January 14, 2020. https://ivypanda.com/essays/negotiation-in-organizations-term-paper/.


Bibliography


IvyPanda. "Negotiation in Organizations." January 14, 2020. https://ivypanda.com/essays/negotiation-in-organizations-term-paper/.

References

IvyPanda. 2020. "Negotiation in Organizations." January 14, 2020. https://ivypanda.com/essays/negotiation-in-organizations-term-paper/.

References

IvyPanda. (2020) 'Negotiation in Organizations'. 14 January.

More related papers
Psst... Stuck with your
assignment? 😱
Hellen
Online
Psst... Stuck with your assignment? 😱
Do you need an essay to be done?
What type of assignment 📝 do you need?
How many pages (words) do you need? Let's see if we can help you!