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Negotiation is one of the key elements in a successful business. In fact, negotiation applies in absolutely any area in life. Note that negotiation involves bringing together two parties to a common ground. In case of conflict resolution, negotiation involves coming together of the two parties to form an agreement concerning the conflict. On the other hand, in business, the aim of negotiation is to persuade the other side (TOS), the negotiating counterpart to buy your product or ideas. Many problems arise during negotiations which may lead to deal breaker or making an illogical decision in a negotiation. It is therefore important that supply chain management professionals should be shrewd negotiators especially when it comes to negotiating internationally. This follows the fact that negotiation differs from region to region due to the cultural differences that exist among the different communities. Remember that, as put by Frank Acuff, an international negotiator and educator, sometimes the best deal is not deal (Acuff, 2008).
Supply chain is a process used by companies from outsourcing of raw materials through acquisition, production and finally production. Supply chain management professionals are therefore individuals who participate in one role or the other in the supply to ensure the chain is as cost effective as it is efficient. Supply chain involves stages like to plan, develop, make, deliver and return. As it may have been guessed, all these processes of the supply chain involve intense negotiation. Unfortunately, most professionals in the supply chain management do not have resourceful information to help them deal with negotiations especially interculturally and internationally.
Strategies of negotiations are of great importance in negotiation especially because it differs from region to region as well as from the nature of negotiation (Mentzer, 2001). It should be noted that supply chain management has gone global and therefore the professionals should be armed with this knowledge in order to achieve a win-win situation and avoid the bullwhip sting. The aim of this research paper is to identify ways in which supply chain management professionals can become effective negotiators. Different aspects of negotiations have therefore been evaluated in respect to supply chain management.
The methods used in carrying out a negotiation research are commonly by interviews and questionnaires where the participants give responses to set questions. In this research, the analysis is made on about 263 peer reviewed articles from journals. The articles are results of researches conducted by interviews and questionnaires as explained. Research questions used in the exercises include negotiation parties, context, outcomes and processes. The four are the major constructs that are distinguishable from all negotiation researches (Agndal, 2007).
Note that this constructs are interrelated and it is therefore hard to make a conclusion about a negotiation based on one construct. However , to make a coherent argument one has to first look at each construct individually before moving on to the next. The context of negotiation involved questions on what mechanism of negotiation was more effective in relation to technological advances. Various negotiation factors such as negotiation setting, use of time, negotiation issues and effects of cultural differences in negotiation (Agndal, 2007).
It should be noted that most of the research on negotiation carried out have been done with students as the respondents and are therefore experimental in nature. Mostly, the likert scale is used in order to determine the range of performance. The questionnaire gives an allowance for responses with a scale from point one to a higher point depending on the scale of the likert with one representing excellence and the high point represent a failure (Agndal, 2007).
It is worth mentioning that most of the student participants who take part in these exercises have either worked as negotiators previously or continue to work as negotiators. An example of such students are those taking MBA and therefore the simulation researchwork in this case is modelled in a form of role plays. It should be remembered that all peer reviewed articles investigated indicated that simulation research dominates negotiation research with more than 63% as compared to only about 26% of survey research and 5% of mixed survey and simulation.
Interviews are better preferred to questionnaires because there is little knowledge about business negotiation and therefore drafting questionnaires that are confident and representative is difficult. Furthermore, questionnaires have an approach that encourages one to make a certain response which makes flexibility difficult. For instance, it is difficult to make a negative response to one question on the questionnaire and a positive on the next because the questions are kind of related. In addition using the questionnaires have a propensity for guiding the respondent to a certain line of response. Since most negotiation researches are simulations or experiments, where students are the general respondents, questionnaires results in offering responses with a common result. On the other hand, interviews enable a researcher to have certain degree of fluctuation that is caused by flexibility of responses (Nieuwmeijer, 1992).
The method of measurement of performance is not convincing in the business world since what students, as the respondents in the research, may think is excellent may not be effective to the business fraternity. The great question is how you measure the performance of a negotiation according to the psychology of a student who is not experienced in business matters? Well, the answer is impossible. Note that researchers take great care to research with students exposed to business negotiations (Agndal, 2007).
Simulation researches are important because they circumvent the possible problems that may arise. In negotiation, however, implementing them becomes a problem because of the problem of applicability in real life business practice. Note that it is based on theoretical approach and only little practical knowledge in business negotiation, mostly by MBA students is experienced. Furthermore, it can be possible that even if the students have practiced some degree of negotiation, it is still superficial compared to real business negotiation especially in supply chain negotiation which has emerged with great success globally (Agndal, 2007).
There is indication that face-to-face negotiation is preferable to use of technology such as teleconferencing and email. Note that one of the strategies of negotiation is trust and relationship building. Using electronic negotiation makes it impossible for the parties involved to make any relationship building and therefore in most cases negotiations fail culminating to an impasse ending. Additionally, to come to an agreement, the two parties must be able to have an effective communication which involves to and fro. In a case where the two are working through electronic interphone, it is hard for low or high context negotiators to effectively decipher the stand of their counterpart without feeling embarrassed for the situation.
It is always important when negotiating to keep in mind that there are differences in culture which are responsible for many other differences in interaction between different people. Negotiation is no exception. As a supply chain management professional, it is important to note that effective negotiation will have an understanding of the shortcomings of the other side. It is indicated by the results of the research that electronic negotiation experiences higher outcomes by negotiators of the same dyads. For instance, when a Chinese negotiates with another Chinese electronically, there is a higher outcome than in face-to-face negotiation. Unfortunately this does not happen among different dyads (Agndal, 2007).
The cause of this difference could be that this takes into consideration the concepts of negotiation with time being the major factor. The cultural factors that come into play for effective negotiation includes use of time, individualism versus collectivism, orderliness and conformity and patterns of communication. These have direct influence on the pace, negotiation strategies, personal relationships, emotional aspects, decision making and contractual versus administrative factors. All this are determinants of effective negotiation for a person in supply chain management profession (Acuff, 2008).
Failure of international negotiations was found to stem from difference in argumentation, lack of willingness to adapt to the situation and also cross-cultural misunderstandings. They include stereotyping, attribution, skewed perception and information processing. Further still, ethicality also plays a major issue in business negotiation, whether locally or internationally. In fact, ethical behaviors are known to be predictors of the outcome of the negotiation as they may be viewed as a sign of honesty or distrust, depending on the culture of the individual.
The knowledge learned from the research is important to a supply chain management negotiator as it helps them identify negotiator behavior and therefore plan their approach. Note that in many cases negotiations of supply chain management will involve intercultural and international ventures where the negotiator is expected to apply the different aspects of the negotiation to work. Since negotiation processes differ from region to region, it is up to the negotiator, in a bid to make a win-win situation for his company to conform to the traditions and measure up to the expectations of his counterpart. The basic acumen of supply chain management is sourcing and outsourcing and this makes it a centralized unit which acts as a supplier on one hand and a distributor or seller on the other. It is important therefore for the exercise to have people with dedicated communication negotiation skills and intercultural conformity. As a negotiator, it is important for you to think yourself as the flexible party rather than expect your counterpart to conform to your culture. Remember that emotional factors are at play and therefore the manner in which you present yourself to your counterpart marks whether you win the negotiation (Cousins, 2006).
As a supply chain management professional, it is important to have basic training on effective negotiation so that you have the capability to recognize and integrate sources of power in your negotiation in your favor. Furthermore, it should not be that one may use unethical practices and negotiation tricks into achieving favorable results. To other types of negotiators this might work for them but for a supply chain management negotiator, ethical practice is highly valued since it ensures that each party is satisfied after a deal and thus ready for a future negotiation. It is important for supply chain management team and negotiators to always keep in mind that future business is as important as the present one and that is why it is important to attain a win-win strategy in negotiation. Never a win-lose, this denies you future business with the other party (Supply Chain Management Professionals, 2011).
As has been shown by the results, trust and relationship building, locally or internationally and also ethicality and presentation play a great role in determining the outcomes of a negotiation. A supply chain management professional should understand the importance and the technicalities of these factors on the outcome of the negotiation so that he is in a position to adhere to negotiation strategies. It is worth mentioning that negotiation strategies that govern negotiation cover all aspects of a negotiation including factors such as cultural differences (Supply Chain Management Professionals, 2011).
There are very few comprehensive negotiation researches and therefore much more have to be carried out in order to shed light into the practices. However it is important that future research on negotiation includes supply chain management professionals as it is growing extensively into negotiation. What is more is that they are better placed to make judgments pertaining to daily negotiation activities, whether locally or internationally and also intercultural in contrast to the earlier research population. Note that even if students participating in this exercise have previously worked as negotiators, they may not have as much experience in negotiation as supply chain management professionals. The fact is that supply chain management professionals are always into one form of negotiation in their daily activities as this is part of their bargain.
In fact, all business persons in their daily activities, whether purchasing or supplying, are engrossed into the same exercise. Future research on negotiation should target that group of people as they are better placed to give beneficial responses.
Interviews, although preferable to questionnaires, are not workable in negotiation research. As this is the case, it is important that future research on negotiation plan an entirely different approach which is capable of collecting as much information and data without being a nuisance to participants. For instance, I have recommended using real negotiators and real negotiation processes instead of simulation. What would negotiators feel when presented with questionnaires regarding the proceedings or how would the situation be with an interview sitting with the negotiators making an interview? Well, this cannot happen. It is important to understand that real negotiators do not take well on interruptions of their negotiations simply because in their communication, even the vaguest body language is important.