Effective Negotiation Strategies and Decision-Making in Management

Posted on Jan 7, 2025 in Business Administration and Management (BAM)

Negotiations: A Means of Resolving Conflict

Negotiations are a process in which a decision is taken jointly by two or more parties. These parties first express their conflicting demands, then try to reach an agreement through the implementation of concessions and the search for alternative solutions.

The aim of negotiation is to reach the best deal, not just any agreement. Characteristics of the negotiation process are:

  • Existence of a conflict of interest that will be resolved through verbal interaction.
  • There is a battle of wits.
  • It is developed through a series of phases.
  • The mutual goal is to reach an agreement.

Four Basic Rules of Negotiation

  1. Separate people from the problem.
  2. Defend interests, not positions.
  3. Generate the highest number of possible options.
  4. Base the outcome on objective criteria.

Attitudes Appropriate to a Negotiation

  • Observe and listen at both verbal and nonverbal levels.
  • Do not attack the other’s image.
  • Control emotions.
  • Do not exaggerate in statements.
  • Be flexible in the standings.
  • Do not complain; suggest alternatives.
  • Do not accept concessions without reciprocation.
  • Make concessions initially available, but realistic.

Key Elements of the Negotiation Process

  • The parties: Individuals or groups involved, defending their interests.
  • The goal: To influence the other party to obtain the maximum benefit.
  • The power: The ability to influence a party has over another.
  • Switching capacity: The parties define their willingness to compromise and when not, and it varies as the negotiation unfolds.
  • Agreement: The outcome of the negotiations, which must satisfy all parties.

Styles of Negotiation

  • Integrative

    Searching for the best deal for all parties. Agreements are designed to give the maximum possible satisfaction to the interests of both negotiators simultaneously.

  • Distributive

    Each party seeks the best outcome for itself. Summarized in the words, “I win, you lose.” In this case, one party’s goals are often in conflict with each other.

Decision-Making Process

  1. Identify and define the problem, gathering information about who will be affected and to what extent it affects the individuals involved.
  2. Analyze the causes, selecting and identifying the most likely potential consequences.
  3. Identify a list of alternatives or possible solutions.
  4. Decide on the best possible option (decision-making) and implementation.
  5. Evaluate the results of the decision taken.

Ways of Thinking of Managers

Type X

  • Employee is lazy by nature.
  • Works for money and has no ambition.
  • Prefers to follow orders rather than assume any responsibility.
  • Is dependent, must be continually addressed.

Type Y

  • Likes to work.
  • Sets their own goals and objectives and is not afraid to take responsibility.
  • Is creative, autonomous, and independent.
  • Is naturally motivated.

Leadership Styles

  • The Autocratic Style

    The typology is based on X and is characterized by the boss making decisions unilaterally.

  • The Democratic Style

    Based on the typology Y. Takes into account subordinates when making decisions.

  • The Laissez-Faire Style

    It corresponds to the Z theory, according to which decision-making is left to the working group, of which the leader is also a part.