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Business communication and Negotiation skill

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Parties Involve in Negotiation

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Department of International Business
School of Management Pondicherry University Puducherry- 6050 !

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MB" #IB$ st year %0 %- ! Roll No: - 50 &egotiation
&egotiation is a techni'ue of discussing issues among one selves and reaching to a conclusion (enefiting all involved in the discussion. It is one of the most effective ways to

avoid conflicts and tensions. When individuals do not agree with each other, they sit together, discuss issues on an open forum, negotiate with each other and come to an alternative which satisfies all. In a layman s language it is also termed as !argaining. If, you want to go for a movie !ut you "now that your parents will never agree to your decision. Will you fight with your parents# $!viously N$, instead you will sit with them and try your level !est to convince them and negotiate with them without fighting and spoiling everyone s mood. %ro!a!ly you will spend the coming wee"end with your parents if they allow you today for the movie else you will negotiate with your friends so that they agree for a noon show. Negotiation helps you to achieve your goal without hurting anyone. &our goal in this case is to go for a movie and you negotiate either with your parents or friends to achieve the same. &our !oss as"s you to su!mit a report within two wor"ing days and you "now that the report is a little critical one and needs more time. Will you say a yes to your !oss 'ust to please him# &our yes might ma"e the !oss happy then !ut later you will land yourself in !ig trou!le if you fail to su!mit it within the desired time frame. It s always !etter to negotiate with your !oss rather than accepting something which you "now is difficult. (s" for some more time from your !oss or pro!a!ly don t ma"e an e)haustive report. Negotiation is !etter as it would prevent spoiling your relation with your superiors later. )lements of &egotiation*&egotiation + Process , Behavior , Su(stance #"genda$ Process- *he way individuals negotiate with each other is called the process of negotiation. *he process includes the various techni+ues and strategies employed to negotiate and reach to a solution. Behavior- ,ow two parties !ehave with each other during the process of negotiation is referred to as !ehavior. *he way they interact with each other, the way they communicate with each other to ma"e their points clear all come under !ehavior.

Su(stance- *here has to !e an agenda on which individuals negotiate. ( topic is important for negotiation. In the first situation, going for the late night movie was the agenda on which you wanted to negotiate with your parents as well as your friends.

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-ypes -ay-to-day. /anagerial Negotiations

Parties Involved 0. -ifferent levels of /anagement 1. In !etween colleagues 2. *rade unions 3. 4egal advisers

)4amples 0. Negotiation for pay, terms and wor"ing conditions. 1. -escription of the 'o! and fi)ation of responsi!ility. 2. Increasing productivity. 0. 6tri"ing a contract with the customer. 1. Negotiations for the price and +uality of goods to !e purchased. 2. Negotiations with financial institutions as regarding the availa!ility of capital. 0. (dhering to the laws of the local and national government.

5ommercial Negotiations

0. /anagement 1. 6uppliers 2. 7overnment 3. 5ustomers 5. *rade unions 8. 4egal advisors 9. %u!lic 0. 7overnment 1. /anagement 2. 5ustomers

4egal Negotiations

5 Day-to-Day 6 Managerial &egotiations*-

6uch types of negotiations are done within the organi:ation and are related to the internal pro!lems in the organi:ation. It is in regards to the wor"ing relationship !etween the groups of employees. ;sually, the manager needs to interact with the mem!ers at different levels in the organi:ation structure. <or conducting the day-to-day !usiness, internally, the superior needs to allot 'o! responsi!ilities, maintain a flow of information, direct the record "eeping and many more activities for smooth functioning. (ll this re+uires entering into negotiations with the parties internal to the organi:ation. ;nder this type of negotiation there are several types of parties involve:0. -ifferent level of /anagement. 1. In !etween colleagues. 2. *rade union. 3. 4egal adviser.

%5 7ommercial &egotiations*6uch types of negotiations are conducted with e)ternal parties. *he driving forces !ehind such negotiations are usually financial gains. *hey are !ased on a give-and-ta"e relationship. 5ommercial negotiations successfully end up into contracts. It relates to foregoing of one resource to get the other. ;nder this type of negotiation these types of parties involve:0. /anagement. 1. 6uppliers. 2. 7overnment. 3. 5ustomers. 5. *rade union.

8. 4egal advisers. 9. %u!lic. 85 9egal &egotiations**hese negotiations are usually formal and legally !inding. -isputes over precedents can !ecome as significant as the main issue. *hey are also contractual in nature and relate to gaining legal ground. ;nder this type of negotiation these types of parties involve:0. 7overnment. 1. /anagement. 2. 5ustomers.

Several parties involve in negotiation*5 Different level of Management*- *he term =9evels of Management refers to a line of demarcation !etween various managerial positions in an organi:ation. *he num!er of levels in management increases when the si:e of the !usiness and wor" force increases and vice versa. *he level of management determines a chain of command, the amount of authority > status en'oyed !y any managerial position. *he levels of management can !e classified in three !road categories: I5 II5 III5 -op level 6 "dministrative level Middle level 6 )4ecutive 9o: level 6 Supervisory 6 /perative 6 0irst-line managers

/anagers at all these levels perform different functions. *he role of managers at all the three levels is discussed !elow:

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-op 9evel of Management It consists of !oard of directors, chief e)ecutive or managing director. *he top management is the ultimate source of authority and it manages goals and policies for an enterprise. It devotes more time on planning and coordinating functions. *he role of the top management can !e summari:ed as follows a. *op management lays down the o!'ectives and !road policies of the enterprise. !. It issues necessary instructions for preparation of department !udgets, procedures, schedules etc. c. It prepares strategic plans > policies for the enterprise. d. It appoints the e)ecutive for middle level i.e. departmental managers. e. It controls > coordinates the activities of all the departments.

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Middle 9evel of Management *he !ranch managers and departmental managers constitute middle level. *hey are responsi!le to the top management for the functioning of their department. *hey devote more time to organi:ational and directional functions. In small organi:ation, there is only one layer of middle level of management !ut in !ig enterprises, there may !e senior and 'unior middle level management. *heir role can !e emphasi:ed as a. *hey e)ecute the plans of the organi:ation in accordance with the policies and directives of the top management. !. *hey ma"e plans for the su!-units of the organi:ation. c. *hey participate in employment > training of lower level management.

d. *hey interpret and e)plain policies from top level management to lower level. III5 9o:er 9evel of Management 4ower level is also "nown as supervisory . operative level of management. It consists of supervisors, foreman, section officers, superintendent etc. (ccording to R.C. Davis, =6upervisory management refers to those e)ecutives whose wor" has to !e largely with personal oversight and direction of operative employees?. In other words, they are concerned with direction and controlling function of management. *heir activities include a. (ssigning of 'o!s and tas"s to various wor"ers. !. *hey guide and instruct wor"ers for day to day activities. c. *hey are responsi!le for the +uality as well as +uantity of production. d. *hey are also entrusted with the responsi!ility of maintaining good relation in the organi:ation. e. *hey communicate wor"ers pro!lems, suggestions, and recommendatory appeals etc to the higher level and higher level goals and o!'ectives to the wor"ers. %5 &egotiation :ith 7olleagues*- ( 5olla!oration !etween people in which they consider alternatives to arrive at mutually agreea!le solutions and . or o!'ectives. 5olleagues are those e)plicitly united in a common purpose and respecting each other@s a!ilities to wor" toward that purpose. ( colleague is an associate in a profession or in a civil or ecclesiastical office.

85 -rade union:- ( trade union ABritish CnglishD, la(our union A5anadian CnglishD or la(or union A(merican CnglishD is an organi:ation of wor"ers who have !anded together to achieve common goals such as protecting the integrity of its trade, achieving higher pay, increasing the num!er of employees an employer hires, and !etter wor"ing conditions. *he trade union, through its leadership, !argains with the employer on !ehalf of union mem!ers Aran" and file mem!ersD and negotiates la!our contracts Acollective !argainingD with employers. *he most common purpose of these associations or unions is Emaintaining or improving the conditions of their employmentE.F0G

*his may include the negotiation of wages, wor" rules, complaint procedures, rules governing hiring, firing and promotion of wor"ers, !enefits, wor"place safety and policies. *he agreements negotiated !y the union leaders are !inding on the ran" and file mem!ers and the employer and in some cases on other non-mem!er wor"ers. !5 9egal advisor*If the legal issues in the negotiation are comple) or not thoroughly

understood !y the 4ead Negotiator it is important to have a legal advisor. *his may or may not !e the ;6H 4egal $fficer depending on availa!ility and the specific nature of the contract. It is ideal to have the legal advisor present for all negotiations !ut if this is not possi!le, it is important to retain the right to have those negotiations where they are not present, reviewed !y the legal advisor and if unaccepta!le, renegotiated. 55 Supplier*- Negotiation in the purchasing process covers the period from when the first communication is made !etween the purchasing !uyer and the supplier through to the final signing of the contract. Negotiation can !e as simple as trying to o!tain a discount on a case of safety gloves through to the comple)ities of ma'or capital purchases. ( purchasing professional must aim to !e successful in their negotiations with suppliers to o!tain the !est price with the !est conditions for every item that is purchased.

65 1overnment*- (lmost everyone has faced the frustrating tas" of negotiating with a government-local, state, national, or foreign-at some point. International trade negotiations among national governments and organi:ations are usually arduous and complicated. We propose a framewor" that supports government to government negotiation. With this framewor", governments can "eep trac" of previous negotiations using a data!ase of negotiation records in an electronic platform. /oreover, the framewor" supports searching, sharing and learning past negotiation records as well as the a!ility to conduct negotiations on a variety of resources, products and services.

;5 7ustomers*- No matter what type of industry you@re in, you most li"ely have people !uying your product or service. 6ervice-!ased purchases are easier to negotiate with customers !ecause there@s usually a scope of wor" involved. But if you sell products, that shouldn@t stop you from trying out some effective and relatively simple negotiating techni+ues. ( few things that can !e negotiated with customers include discounts, payment terms, delivery options, warranties, and insurance, customi:ation and +uality standards.

7onclusion *- *he involvement of parties li"e level of management, negotiation with colleagues, trade union, customers, pu!lics, government supplier, > legal advisors the negotiation are easy. *hese parties are help in negotiation, it is !eneficial for organi:ation.