Stability of Negotiation Outcomes
Contents
1.1. Process Dynamics: Maintenance and Shifts. 3
1.2. Cross-level dynamics: maintenance and shifts. 5
References. 9
Abstract
Negotiation is a process where the parties alter their methods in regard to the other party. We are of the opinion that mutual association is best hypothesized as a developing practice and is notable factor in noting the negotiator’s capacity to note mutually beneficial outcome. This paper focusses on two elements that affect the process and quality of contracts; the alignment of the methods that would lead to satisfaction and congruence of the party’s objective for profit.
Stability of Negotiation Outcomes
1. Theoretical Analysis: Stability of Negotiations
Negotiation offers a process for mutually reliant individuals to manage conflicting objectives. Meaning that companies have interdependent groups of people, bringing forth a clear meaning of negotiation in the business sector. Be it that the relation of activities to acquire certain objectives or conditions, negotiations take place since the top leadership and employees are of the opinion that reaching a common ground is the best way to meeting their objectives.
Scholars are to a great extent more apprehensive on how people get to their objectives. The results can be contrasted on the grounds of resource distribution (Fells, 2012). The negotiators can distribute resources in a manner that leads to value being acquired as it optimizes their outcomes as well as others. A main concern for negotiation experts is the manner negotiators implement these objectives to acquire mutually advantageous outcomes.
In getting a solution to this question, negotiation studies has acquired a contextual aspect. Meaning that studies have focused on exogenous elements that affect negotiation results disregarding the manner negotiations change. But, the model employed cannot be used to talk about the variance in negotiation results; studies showing that negotiators in similar settings acquire contrasting results. This paper will state two reasons that make it hard for contextual models to answer for lack of stability of negotiation results.
1.1. Process Dynamics: Maintenance and Shifts
Basically, negotiation methods show an integration of tactical tendencies. People tend to be tactical and this is strategic as they tend to enable the person to shift closer to getting his or her objective. Based on the outcome, negotiators first strategic method may be integrative, enabling the cooperative objective of enabling the corporative objective of making good use of results. Even though there are several motives that call for negotiation to combine integration and distribution, we will focus on the dominance of one of the methods at a certain point in time.
Negotiations begin with steps acquired by people. These steps show individual objectives at start of negotiations. They show the methods employed by negotiators like issuing demands, or attacking parties. These methods show the dominant state of a negotiator.
Even with the start of actions persons, negotiation is described by the interplay between the parties. This is since they assess the progress to meeting their desires (Fells, 2012). With the lack of goals to be met, the negotiators come up with strategic options that keep the negotiation process going. In the case an issue arises that keeps them far from establishing their goals, they employ necessary steps to move the negotiation strategic stance. The new point of view of the process are hence understood by analyzing how the methods move with time.
1.1.1. Process Maintenance
This shows the length of stability in the parties’ strategic focus. At this point in time, the parties show a common strategic tactic and similar objectives in them. This process can be integrative of distributive. How the process is maintained is reliant on the level of aggregation. At the inter-personal level, maintenance calls for the parties to connect tactic-wise. This helps to create and maintain a common approach as it offers added pressure of every party’s interpretation of the situation. At the negotiation-based level, maintenance is noted when the parties make use of similar methods for a long time. This results to a joint practice and portrays a progressive method that is employed by both parties.
1.1.2. Process shift
This shows divergent strategic method and discrepant objective. They influence the main stage orientation set using process maintenance. At the personal level, process shift take place when negotiators come up with methods that vary the ones employed by the other party. This is common when negotiation is in progress and the parties move from one stage of distribution to stage of integration or integration and distribution. These shifts are seen as temporal elements that lead to variances in negotiation stages.
Process shifts take place when the parties’ progress to establishing their objectives are barred. At the personal level, there two causes that make negotiators contrast the prior strategy. The first one is a negotiator to alter the main phase while the second takes place when the other negotiator has come up with a method that shifts negotiators from the main stage and the mismatch is an effort to take the negotiation to this method. At the negotiation level, changes come up when the main phase hinders the parties from acquiring their main ordinate objectives (Fells, 2012). For instance, negotiators making use of distributive methods may note their methods are complicating things for settlement to be acquired and shift to an integrative model. The recognition that the process is directing negotiators far from their main objective of reaching a settlement leading to a strategic shift. Every party is able to model the negotiation and trigger changes to strategy.
1.2. Cross-level dynamics: maintenance and shifts
The impact of this two level is that they are parallel but autonomous as noted in the context stage. Hence, the negotiation is modeled by the levels of aggregation as well as the connection of the process in aggregation level. The steps employed by the parties at the personal level can either promote or adversely affect the main phase in the negotiation.
1.2.1. Maintenance
Here the parties uphold a common strategic method when the inter-personal and negotiation are connected. For instance, an integrative method may be employed and connects with the integrative phase. It hence creates and backs the new integrative stage. When the parties respond to this strategies, they add value to their interaction hence making the phase a rigid one. The parties can therefore setup a main phase when the other one responds. When this responds goes on, the parties create an integrative stage that leads to self-building sense of cooperation. Additionally, the parties can create a distributive stage that may lead to competition.
One result of cross-level alignment is that the parties are able to manage their strategic difference. Hence, they become vulnerable to the limitations that arise with their dominant aspect leading to premature shut down when the phase is integrative, leading to conflict and a standoff ensues when the main phase is distributive.
1.2.2. Process shifts
Here the negotiators challenge the main phase when they come up with techniques that do not connect it. For instance, when the integrative is applied in a distributive stage, it disconnects with the stage. It affects the stage and may result to a phase shift (Kilgour, and Eden, 2010). This shows that in case the parties start a process shift at the personal level they can lead to a phase shift. However, this is reliant on what the other party does. When the parties turn down the starting stage, we are able to see isolated influences that do not affect the main phase.
2. Literature Focus: Indicators of Negotiation Outcome
As seen from the theoretical framework, there are varied aspects that have been applied to measure negotiation outcomes. Further stating that negotiation outcomes are never stable. Negotiation success or failure has been attribute to these varied methods of representing the results.
We are able to analyze the variation between settling and not settling an agreement. Scholars have grouped these situations into a wide range of possibilities as profit and satisfaction model. The justification for this model varies and has changed over time.
According to Robinson and Graham the need to employ the model of profit and satisfaction hinges on the need to contrast between the buyer and seller. Hence, they state that if the negotiator employs the role of the seller, then profit ought to be used and if he takes up the role of the buyer than satisfaction ought to be used. The two variables are used to determine how the negotiation will continue. However, it is worth noting that the use of the two methods is critical as apart from trying to maximize profit, effort should be made to meet the needs of the other party.
Studies have suggested that the satisfaction aspect has gained more prominence to profit. Additionally, the concept of equity as an analysis of negotiation outcome is necessary, further complicating the process. In this focus, Maxwell et al (1999) has stated that in business negotiations, the aspect of equity in talking about price gives the seller ability to satisfy the buyer while experiencing negativity on profit. The overall result is both parties being satisfied. Equity allows the buyer’s prospects to be altered.
As described by Krstensen (2000) the main element in buyer/seller negotiation is the aspect of equity in the price as a method of gaining satisfaction for both sides. He states that this will lead to a much better chance for a lasting relationship. But, the aspect of fairness is critical; what both parties hold is necessary in assessing fairness and in modelling satisfaction.
The impact brought about by equity and satisfaction is varied. For equity, it compares the seller to the buyer while satisfaction compares the seller to other sellers. This tends to show that, even though the parties undergo similar outcomes, their perceived satisfaction may change. This shows how hard it is in getting to know the factors of negotiator’s satisfaction since it is dependent on several elements. As described, even though profit is employed, it is satisfaction that is more important. If setting a price in business negotiation case drops and is above reservation level set by the parties, the two parties can be projected to perceive satisfaction, even though it may vary with regard to level of equity perceived by the parties in the negotiation.
Hence, the level of satisfaction is a vital indicator of negotiation outcome that affects its stability. This however means overcoming two complicated aspects; content, the source of satisfaction and perception, the manner we perceive satisfaction (Kilgour, and Eden, 2010). As an indicator of negotiation outcome, satisfaction has varied attributions; agreement, interests or trust.
3. Case study
A case in point is the case where Kenya employed varied trade, exports and macroeconomic policies that hard a profound effect in gaining access to other nations. This had negative impact on its economy with a drop in tariffs in the 80s. Additionally, processed exports subsidy dropped due the poor rate resulting to a delay in payments (Muga, 1999). The main concern was the misalignment of its rate with the needed equilibrium level. Changes made did not prove effective and hence the entrance of the WTO as an interested party to help Kenya in terms of dumping and subsidies.
Kenya in this case was the buyer while WTO was the seller. Satisfaction was necessary in both cases for Kenya to have an equilibrium rate for its trading activities and WTO to ensure the country aligned to its provisions. The outcome of the negotiation proved satisfactory with Kenya placing barriers in maritime air and transport insurance whenever the situation arose hence meeting the provisions of the WTO while ensuring its needs were met. On other hand, Kenya’s market access were improved and allowed the supply of non-discriminatory measures.
Conclusion
Business companies face profound difficulties that require negotiations to settle them. The outcomes may vary from one case to another. The stability of negotiations varies in regard to varied aspects as described by several authors. The paper has been able to gives a theoretical analysis on factors that may affect stability of negotiation and gone further to give a review of the issues with support from several scholars. The paper ended with a case in point of Kenya and its conflict with the WTO provisions that proved satisfactory and profitable to both parties. This may however vary in other cases that pressure calls for compromise and hard lines to be taken.
References
Fells, R. (2012). Effective Negotiation: From Research to Results. New York: Cambridge University Press.
Kilgour, D. and Eden, C. (2010). Handbook of Group Decision and Negotiation. Glasgow: Springer Science & Business Media.
Kristensen, H. (2000). Does fairness matter in corporate takeovers? Journal of Economic Psychology, 21(1), 43-56.
Maxwell, S., Nye, P.,& Maxwell, N.(1999).Less pain, some gain: The effects of priming fairness in price negotiations. Psychology & Marketing,16 (7),545-563.
Muga, K. (1999). Africa and The World Trading System: A Case Study of Kenya. Retrieved on 17th July 17, 2014 from http://www.unmillenniumproject.org/documents/kenya_trade.doc
