Assignment

on
Negotiation & Conflict Management (IB-515)

Submitted to
Professor Dr. Chowdhury Saima Ferdous
Department of International Business
University of Dhaka

Submitted by
Group-21

ID Name Topics Page

BE-110 Ismail Farabbi What is Negotiation 2-4
(Group Leader) Features of Negotiation
KJ-015 Md. Rahat Forazi Characteristics 5-8
Key Dimensions
BB-108 Md. Khaled When Negotiation occurs 9-10
Saifullah Emon Characteristics of Negotiator
KJ-109 Aman Ullah What is not Negotiation 11-12
When not to Negotiate
ZR-106 Shahed Hossain

Date of Submission: 2 may, 2023

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 What is Negotiation

Negotiation is the primary skill of leadership. It is the act of discussing an issue between two
or more parties with competing interests with an aim of coming to an agreement. That means
through negotiation parties from their initially divergent positions move to a point in which
the problem or conflict maybe solved and the agreement maybe signed.

Actually Negotiation is not merely bargain, selling or making any agreement. In fact It is
knowing the main reason for conflict and having the power of resolving that conflict. Power
means the knowledge and capabilities of resolving conflict and strong relationship between
the stakeholders. Strong Relationship with stake holders leads to effective negotiation because
it’s hard to imitate by the competitors.

Negotiation is also a mind game which acts psychologically. In a negotiation table parties
should understand the subjects of dependence on each other. A successful negotiation
involves the proper management of both tangible and intangible resources of the respective
parties.

Example
1) Party A is the seller and party B is the probable buyer. A fixed the per unit price of X
commodity at Tk. 10. But B is bargaining to purchase at Tk. 8 and give the example of others
who can provide him at that price. But if A sells at Tk. 8, that would not be profitable for the
company. In this respect A should try to pursue B in some other ways rather than price. A
should explain why B will be benefited by purchasing from A instead of purchasing from A’s
competitors at lower price. A should properly explain that why and how their product quality
is better than those of competitors. After all A have to make B think that A’s price is higher
because of better quality.

2) A buyer has set a RP of $375,000 for the purchase of a factory building. He says
himself,“That’s as high as I’m willing to pay”. So, naturally he would like to pay less. The
seller set his RP at $ 350000. The two parties may haggle a bit in reaching agreement, but an
agreement in this range would satisfy each.

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 Features of Negotiation

The basic features of negotiation include:

 Exchane of offers
 Collaboration
 Information
 Power
 No two negotiation are alike
 Critical components of doing business

Exchange of Offeres: There is exchange of offers or benefits in each negotiation. Benefits

need to be set according to the needs of both parties. It’s a give and take process in which
each of the parties have their own interests to be fulfilled.

Collaboration: In negotiation collaboration refers to help each other after serving own
purpose . Negotiating parties must have the mentality of mutual help. The aim of parties
should not only gain but also retain a good relationship with their partners. In this respect
mutual trust, ethics and morality are inevitable.

Information: Information or more often the lack of it is central in reaching an agreement. No

matter how much negotiators prepare, there are always things that they do not know (but wish
they did). A well established principle is that more information leads to better outcomes.
That’s why negotiation can be viewed as a process of information exchange; particularly
information about possible solutions on one hand and walk away alternatives on the other.

Power: Paradoxically this has a great deal to do with the potential consequence if the parties
were not negotiating. The power that negotiators have relates to the alternatives open to them
- ways other than negotiation to achieve their desired objectives. Negotiation can be viewed
as a process whereby the alternatives that negotiators think they have are changed. The lack
of power reflected in concern about having only a poor alternative brings negotiators to the
negotiation table and keep them there.

No two negotiation are alike: No two negotiations and negotiators are the same. Each
negotiation is distinct even if there are similarities between them. Every negotiation is
considered as separate in terms of their respect agreement.

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Critical component of doing business: Nowadays negotiation is a critical component of
doing business. In every sphere of business negotiation is necessary. Effective negotiation
leads to successful business agreement.

Example
X and Y are two parties X want to buy a car from Y. Here it is an exchange of offers (car &
money). X expect a better quality car from Y and for that he is ready to pay a good amount of
money. Y also wants to give X a good car at a reasonable price (obviously with reasonable
profit) and to maintain a good relationship with him. This is collaboration. X and Y both have
the information about car market and price. If X has sufficient knowledge, other alternative
sources or networks to buy that car with his desired price, X is said to have power. Also in
terms of Y if he has more customers to sell that car, he is also said to have power. Moreover
their negotiation is distinct and not alike of another and for buying and selling that car
negotiation is inevitable that means critical components of that business.

Reference
1. Steele, P., & Beasor, T. (1999). Business negotiation: A practical workbook. Gower
Publishing, Ltd..

2. Starkey, B., Boyer, M. A., & Wilkenfeld, J. (2005). Negotiating a complex world: An
introduction to international negotiation. Rowman & Littlefield Publishers.

3. Ghauri, P. N., & Usunier, J. C. (Eds.). (2003). International business negotiations.

Emerald Group Publishing.

4. Fells, R., & Sheer, N. (2019). Effective negotiation: From research to results. Cambridge
University Press.

5. Thompson, L. (1990). Negotiation behavior and outcomes: Empirical evidence and

theoretical issues. Psychological bulletin, 108(3), 515.

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 Characteristics of negotiation

When two or more parties who have divergent interests or objectives want to come to an
agreement, they engage in negotiation as a process of communication and decision-making.
The characteristics of negotiation can vary depending on the context, but some general
characteristics are:

1. Interdependence: A negotiation involves two or more parties who rely on one another to
accomplish their objectives. There is dependency since each party's choices and actions have
an impact on the other.

A negotiation between a buyer and a seller in a business transaction is an example of

interdependence. The buyer depends on the seller to provide the product or service, while the
seller depends on the buyer for payment. Both parties must work together to achieve their
respective goals.

2. Conflict: Conflicts of interest between the parties frequently lead to negotiation. Each party
has its own preferences, requirements, and goals, some of which may conflict with those of
the other party.

A negotiation between a tenant and landlord over lease terms is an example of conflict. The
tenant may want lower rent or more favorable lease terms, while the landlord may want
higher rent or more stringent lease conditions

3. Communication: Communication between the parties is a key component of negotiation.

Understanding each other's viewpoints, interests, and priorities requires effective interaction.

A negotiation between a manager and an employee over job responsibilities and expectations
is an example of the importance of communication. The manager and employee must
communicate effectively to ensure that the employee understands the job requirements and
the manager understands the employee's capabilities and limitations.

4. Agreement: A mutually beneficial agreement between the parties is the goal of negotiation.
Both parties' interests should be met by this agreement, which will also serve as a foundation
for upcoming communication.

A negotiation between two companies over a joint venture partnership is an example of an

agreement. Both parties must negotiate the terms of the partnership, including funding,
responsibilities, and profit sharing, to ensure that the agreement is mutually beneficial.

5. Flexibility: In order to successfully negotiate, one must be adaptable and flexible. To get to
an agreement, the parties must be willing to change their positions and expectations.

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A negotiation between a job candidate and employer over salary and benefits is an example of
the need for flexibility. The candidate may need to adjust their salary expectations or be open
to negotiating additional benefits to secure the job offer.

6. Power: Power dynamics, or situations where one side is more powerful than the other, can
arise during negotiations. This influence might come from a variety of sources, including
knowledge, resources, or authority.

A negotiation between a government and a foreign corporation over natural resource

extraction is an example of power dynamics. The government may have more power due to
its control over the resource, while the corporation may have more power due to its expertise
and resources.

7. Relationship: Relationships between the parties may change as a consequence of

negotiations. While an unfavorable negotiation experience might damage a partnership, a
good negotiation experience may boost trust and improve subsequent interactions.

Dimensions of Negotiation

Negotiation dimensions are the different factors that can influence the negotiation process and
outcome. Some of the key negotiation dimensions include:

1. Power: The relative power and influence that each side has throughout the negotiation
process is referred to as the "power dimension" in negotiation. Expertise, resources, prestige,
and position are just a few examples of the many diverse ways that power may be obtained.
Depending on their level of influence, a side with more clout may be able to dictate the
parameters of negotiation or the final result. For example, a company negotiating a merger
with a smaller firm may have more power due to its greater resources and influence in the
industry.

2. Interests: The underlying requirements, wants, and issues of each side are referred to as the
interest dimension in negotiations. To reach a win-win agreement, it is crucial to comprehend
each party's interests. For example, in a labor negotiation between a union and management,
the interests of the union may be higher wages and better working conditions, while the
interests of management may be cost reduction and increased productivity.

3. Alternatives: The options or alternatives that each side has, if they are unable to come to an
agreement are referred to as the alternatives dimension in negotiation. The quality of each
party's alternatives may have an influence on their bargaining position and readiness to
concede. For example, if a supplier has multiple customers willing to purchase their products,

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they may have more bargaining power and be less willing to make concessions to a single
customer.

4. Time: The term "time dimension" in negotiations refers to both the length of the
negotiating process and the pressing need for a resolution. The pressure to reach an agreement
quickly can have an impact on each party's negotiating tactics and ability to make
concessions. For example, if a contract is expiring soon, parties may be more motivated to
reach an agreement before the deadline, even if they have to make concessions.

5. Information: The knowledge and information accessible to each side concerning the
negotiation topics, the other party's interests and positions, and the external circumstances that
may affect the negotiation are referred to as the information dimension in negotiation. For
example, a buyer negotiating with a seller may have more bargaining power if they have more
information about the market price of the product and the seller's cost structure.
6. Relationships: The relationship component in negotiation refers to the parties' actual or
projected connection. A positive relationship can aid in negotiating and result in a better
resolution, but a poor relationship might stymie the process. For example, in a negotiation
between a landlord and a tenant, a good relationship may lead to more flexible lease terms
and a longer-term rental agreement.

7. Culture: The cultural dimension in negotiation refers to the values, norms, and expectations
that influence the negotiation process and behavior of the parties. Cultural differences can
impact communication, trust, and the perception of what is considered a fair outcome. For
example, in a negotiation between a Japanese company and an American company, the
Japanese company may place more emphasis on building a long-term relationship and
reaching a consensus, while the American company may focus more on individual interests
and outcomes.

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 Reference

1) Lewicki, R. J., Saunders, D. M., & Barry, B. (2015). Negotiation (7th ed.). McGraw-Hill
Education.

2) Pruitt, D. G., & Carnevale, P. J. (1993). Negotiation in social conflict. Open University
Press.

3) Fisher, R., Ury, W., & Patton, B. (2011). Getting to yes: Negotiating agreement without
giving in. Penguin.

4) Cohen, H. (1980). The art of negotiating. Prentice-Hall.

5) Shell, G. R. (2006). Bargaining for Advantage: Negotiation strategies for reasonable

people. Penguin.

6) Kray, L. J., Galinsky, A. D., & Thompson, L. (2002). Reversing the gender gap in
negotiations: An exploration of stereotype regeneration. Organizational Behavior and
Human Decision Processes.

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 When Negotiation Occurs

In many fields of business, multiple organizations must work together to achieve a common
goal. However, people and processes do not always work in unison, and these occurrences
may lead to conflict between certain areas within or between each company. Conflicts can be
resolved or avoided through negotiation, allowing each business to proceed peacefully with
its specialized roles or operations on a set of agreed terms.

There are some specific conditions where negotiation will achieve the best results:

1.When the conflict consists of two or more parties or groups.

2.A major conflict of interest exists between both parties.

3.All parties feel that the negotiation will lead to a better outcome

4.All parties want to work together, instead of having a dysfunctional conflict situation.

Example

The Ninja Corporation has one of the largest factories on the East Coast. Every five years, the
company puts out a request for bids for businesses to clean and paint the factory floor. Once a
contractor is selected, Ninja Corporation starts a negotiation process in order to facilitate the
best price and service on this massive undertaking.Ninja Corporation has received numerous
bids for the factory painting job. The company has decided to enter negotiations with Wet
Paint Biz.Every time when conflicts occur, they meet and try to understand other interests.
After several discussions they finally meet a common interest with a win- win situation.

Characteristics of a good negotiator

As a general

1. open mind
2. charm
3. well thought out
4. articulate
5. experience
6. perseverance
7. patience
8. assertiveness
9. staying detached
10. flexible
11. insight
12. understand the other side
13. Persuasive

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 14. knowing what you want

With a specific way

● preparation and planning skill

● knowledge of the subject matter being negotiated
● ability to think clearly and rapidly under pressure and uncertainty
● ability to express thoughts verbally
● listening skill
● judgment and general intelligence
● integrity
● ability to persuade others
● patience
● decisiveness
● considers lots of options
● aware of the process and style of the other person.

Reference

1. https://study.com/academy/lesson/what-is-negotiation-the-five-steps-of-the-
negotiation-
process.html#:~:text=When%20the%20conflict%20consists%20of,having%20a%20d
ysfunctional%20conflict%20situation.
2. https://www.thorntons-law.co.uk/for-you/thorntons-family-law-divorce-
solicitors/conflict-resolution/conflict-
negotiation#:~:text=Negotiation%20may%20be%20used%20to,Negotiations%20can%2
0take%20place%20anywhere.
3. https://scholar.google.com/scholar?hl=en&as_sdt=0%2C5&q=negotiations+&btnG=#
d=gs_qabs&t=1682953838364&u=%23p%3DQTjLpQQK_7QJ
4. https://scholar.google.com/scholar?hl=en&as_sdt=0%2C5&q=negotiations+&btnG=#
d=gs_qabs&t=1682953949154&u=%23p%3DZhNdCs59g0oJ

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 When not to negotiate
There are some traps or cognitive distortions, that commonly lead us to refusing negotiation,
when we probably should. These negatives traps are mentioned below and they are by far the
more common response when we are in conflict with an enemy.

Negative Traps (Promoting Refusal) [1]

 Tribalism
 Demonization
 Dehumanization
 Moralism
 Zero Sum Fallacy
 Fight/Fight
 Call to battle

Tribalism involves an appeal to a group identity you see your own side - in the group - as
familiar and reliable, while the other side is an out group that should be distrusted and
disfavoured. For example, the Japanese - who are different, don’t think the way Americans do
and who are not to be trusted.
Demonization is the tendency to view the other side as ‘evil', not just guilty of bad acts but
fundamentally bad to the core. For example, a partner from China secretly opening a factory
in China manufacturing a competing stent and asking for a reduction in the licence fee to his
partner who is in USA.
Dehumanization involves seeing the enemy as being outside the moral order, less than
human. Said to be a central process in prejudice, racism and discrimination, this trap justifies
the ‘other‘ as an ‘object'. For example, In 2008, Imam Yousif al-zahar of Hamas characterized
Jews as “the brothers of apes and pigs” before calling them a people who cannot be trusted
and have been traitors to all agreements.
Moralism create a tendency to see the other side as entirely at fault while you are innocent
and worthy. For example, there are two partners of an agreement, Mr. ‘A’ and Mr ‘B', for an
incident Mr. A completely blaming Mr B has purposely and flagrantly violated the agreement
and deserves moral condemnation.
The Zero-sum trap involves seeing the world in terms of a competition: what one side wins
and the other side must lose. Conflict is seen as purely distributive anything that benefits your
enemy surely bad for you.
Beside these, there are some other situations that lead us not to negotiate with others. The
situations are mentioned below.
a. When you would lose the farm
b. When you are sold out
c. When the demands are unethical
d. When you do not care
e. When you do not have time
f. When they act in bad faith
g. When waiting would improve your position
What is not Negotiation :

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Negotiation is a method by which people settle differences. It is a process by which
compromise or agreement is reached while avoiding argument and dispute. It is the way to
exchange of offers with others. Negotiation does not mean just to sale something or
bargaining with parties. The main purpose of negotiation is to build a strong relationship with
partners.
In order to achieve a desired outcome, it may be useful to follow a structured approach to
negotiate. For example, in a work situation a meeting may need to be arranged in which all
parties involved can come together.

The process of negotiation includes the following stages: [2]

1. Preparation
2. Discussion
3. Clarification of goals
4. Negotiate towards a win-win outcome
5. Agreement
6. Implementation of a course of action
From the above discussion we are clear about the definition of negotiation and its process. So,
any action that breaks the conditions of negotiation and does not follow the negotiation stages
will not considered as negotiation.

References
[1] Mnookin, R. (2010). Bargaining with the devil: When to negotiate, when to fight. Simon
and Schuster.
[2] https://www.skillsyouneed.com/ips/negotiation.html

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