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Negotiation power
Power in negotiations examples
Negotiation power
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A) In the negotiation for the Federated Science Fund I represented the Stockman Company. The meeting started with a caucus between Turbo and I which set the tone for the negotiation. In the five-minute caucus, we understood that we get the highest payoff by working together and decided to only form a deal with United if it benefited us. This was the main turning point in the negotiation as we returned to United with only high-ball offers: we opened with $220,000 each for Stockman and Turbo, and went only as low as $200,000 each, with $80,000 for United. United presented counter offers throughout, but all of them were below our $200,000 reservation point. Even though United continuously demanded a more inclusive deal, we saw no real benefit and made a deal by splitting $440,000 evenly.
B) The most important takeaway for me was that bargaining power has a truly significant effect on the negotiation process. Since the coalition gave Turbo and I the highest payoff, I learned that a strong power imbalance can heavily reduce the fairness of the process, as it became a take-it-or-leave-it situation for United. Prior to the negotiation I did not realize how strong of an effect an imbalance can have, as United’s pleas for a fair deal were completely ignored by us. Based on the lectures and readings, I believe this occurred because the power imbalance created contrasting frames; the coalition took a resource-based outcome frame to get the best payoff, while United took a needs-based aspiration frame to get more of a fair payoff. This is a strong reason why the final agreement did not involve United as the outcome frame took a win-loss approach and had a stronger effect in determining the final outcome, even though the aspiration frame took...
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...at the funds should be allocated based on need. With this in mind, and after hearing other deals in class, it is clear that United had a greater need for the grant than the coalition. I wish I had not let the power imbalance influence my decisions as it did.
F) In the future, I will change my approach by focussing on the long-term. To do so, I will not start similar negotiations with a caucus because of the power imbalance created. Instead I will look to be more open-minded by avoiding a selective perception and by considering an aspiration frame. I can achieve this if I consider receiving a bigger piece of the pie in the long-term by giving a company like United more money in the short-term. This will maintain positive relations with the parties I negotiate with so that we can all gain in the present and conduct further negotiations to gain in the future as well.
...during the negotiation. Because they did not explicitly articulate their objectives to each other, the union and management did not reach a settlement that was mutually beneficial. I believe both teams prioritized “winning” over fulfilling their initial objectives. Therefore, I better understood how both teams suffered under pressure during the negotiation because they realized they could no longer rely on a zero-sum strategy. Moreover, I realized how important team cohesiveness is to the bargaining process. Both the union and management lacked basic cohesiveness among their team members and consequently exacerbated the contentious and emotional environment that they created during the negotiation. Nevertheless, under these circumstances I believe the union and management ultimately reached an adequate proposal that satisfied both sides of the bargaining table.
In the simulation involving a negotiation over a job offer at Robust Routers, I played the role of the human resource director; Leigh Bultema, and my partner played the role of Joe Tech; the recent MBA graduate seeking permanent employment with the technology company. Joe is not in agreement with the terms of the original offer and would like to negotiate the terms of certain issues within the bargaining mix. One key issue Joe is negotiating is the relocation to Robust Routers headquarters in Silicon Valley, California. He would rather remain in Nashville, Tennessee and become a telecommuter. Other issues within the bargaining mix include the annual salary, signing bonus, and stock options. In this negotiation, a variety of distributive bargaining and collaborative strategies and tactics were employed to reach an agreement.
Knight. Though it was integrative negotiation, Petersen gained strong lead by opening formula price reduction, TexasAgs could have dampened the “first offer effect” by introducing new negotiator (Lewicki, Saunders, Barry, 2011, p. 41).
Lewicki, R. J., Saunders, D. M., & Barry, B. (2006). Negotiation Readings, Exercises, and Cases Fifth Ed. Bill Brubaker, Mark Asher, A Power Play for Howard Negotiation (pp. 616-626). New York, NY: Mcgraw-Hill Irwin.
Lewicki, R., Saunders, D.M., Barry B., (2010) Negotiation: Readings, Exercises, and Cases. 6th Ed. McGraw-Hill Irwin. New York, NY
Negotiations styles are scholastically recognized as being broken down into two general categories and those are distributive bargaining styles and integrative negotiation styles. Distributive bargaining styles of negotiation are understood to be a competitive type of negotiation. “Distributive bargaining, also known as positional bargaining, negotiating zero-sum, competitive negotiation, or win-lose negotiation, is a type or style of negotiation in which the parties compete for the distribution of a fixed amount of value” (Business Blog Reviews, 2011). This type of negotiation skill or style approach might be best represented in professional areas such as the stock market where there is a fixed goal in mind or even in a garage sale negotiation where the owner would have a specific value of which he/she would not go below. In contrast, an integrative negotiation approach/style is that of cooperative bargaining, or win-win types ...
Over the previous five years, the return of the ProIndex fund have outperformed the S&P 500 index, as the 5-year-return is nearly 3 times than the benchmark and the annualised return is nearly 2 times than the benchmark. It means ProIndex fund has a significant increase in value within that period. However, the ProIndex Fund has a higher standard deviation which means it is more risk than the S&P 500 index. Especially for the annualised standard deviation, it is approximately 10% higher than the benchmark. The correlation coefficient between the ProIndex and benchmark is about 0.65 which means both two variables are positive changing consistently, but there are still some other factors which have impacts on the relationship between two variables as the correlation is less than 1. Furthermore, the higher beta, 1.0132, which is more than 1 and it may be one of the reasons for high risk as well since it is more sensitive to the market change. It means that the ProIndex fund would increase by 1.0132% if the market increased by 1%.
Many unions are at battle with their respected employers. Some of these fights are better known than other fights. United Airlines is trying to renegotiate contracts to save their company money. This has been a long battle for United, that some may see as having begun with the events of September 11, 2001. In truth, the International Association of Machinists, the union that represents a majority of United employees and United have been locked in a heated battle for some time now, even before the events of that September.
NIMBY groups may break apart in the middle of the negotiating process, often due to internal power struggles. When this happens, the group tends to lose essential credibility, funding, and support from the greater public, which can become co...
Lewicki, R. J., Barry, B., & Saunders, D. M. (2007). Essentials of Negotiation. New York: McGraw-Hill/ Irwin.
Principled negotiation allows disputants to obtain what they are entitled to, while enabling them to be fair, at the same time protecting against those who would take advantage of their fairness . Although the points made are logical and indeed a great approach to certain types of conflict, I found that in some cases the method did not completely come together. More than anything, I found the method altogether was simplistic and for an ideal situation. While going through the four elements, I shall illustrate these points.
Bargaining power is the measure of capacity of one party to influence another and whichever party has the higher bargaining power can control their circumstance to strike more desirable deals with others. Whether is it gigantic or tiny, all parties have their own bargaining power of different persuading strategies.
Lewicki, R. J., Saunders, D. M., & Barry, B. (2010). Negotiation: Readings, exercises, and cases. New York: McGraw-Hill Irwin
Negotiation approaches are generally described as either distributive or integrative. At the heart of each strategy is a measurement of conflict between each party’s desired outcomes. Consider the following situation. Chris, an entrepreneur, is starting a new business that will occupy most of his free time for the near future. Living in a fancy new development, Chris is concerned that his new business will prevent him from taking care of his lawn, which has strict requirements under neighborhood rules. Not wanted to upset his neighbors, Chris decides to hire Matt to cut his grass.
Townsend, K., Wilkinson, A. & Burgess, J. (2013), ‘Is Enterprise Bargaining Still a Better Way of Working?’, Journal of Industrial Relation, vol. 55, no. 1, pp. 100-117.