BUS403: Negotiations and Conflict Management

4a. Identify and describe negotiation theories, concepts, and tactics to manage negotiations as well as professional relationships

• Describe the importance of Warden's four areas of negotiation: goals, strategy, issues, and planning.
• Define and explain how negotiators use behavioral, rational, and structural power tactics in their negotiations.
• Define the six sources of power: legitimate, referent, expert, reward, coercive, and informational.
• Describe how people respond to those who use these three power tactics.

What is Negotiation? describes four parts to a negotiation: goals, strategy, issues, and planning. Each area can help ensure optimal outcomes. Strategy Planning explains that planning your negotiation strategy involves considering the outcomes you wish to achieve and knowing whether you want to maintain a long-term relationship with the other party. This determination will help you decide whether you should take the other party's needs into account as you calculate whether certain proposals are in your own best interest.

Negotiators often use power tactics to "push or prompt others into action". For example, they can use three categories of power tactics (behavioral, rational, and structural) in different ways to achieve their goals.

4b. Describe and assess the importance of various factors that impact negotiations, including specific issues in question, different stakeholder positions, interests, relationships, and group dynamics

• Define stakeholder.
• Why is trust such an important basis for sustainable profitability?
• Define agent and principal.
• Describe the two categories of duties an agent owes their principal: fiduciary duty and a set of general duties imposed by agency law.
• Define collective bargaining.
• What legislation defines and regulates collective bargaining in the United States.
• Define mediation and arbitration.

The Essence of Negotiation explains that "the best business runs on sustainable arrangements". To create sustainable business benefits, business relationships need to change. Stakeholders should promote a win-win strategy during negotiations to instill trust among the negotiating parties. The article lists ten steps for successful business negotiation.

An agent is someone who has the authority to act on behalf of another (the principal). The agent has a fiduciary responsibility to act in the best interest of the principal. Their professional duty also includes avoiding self-dealing, preserving confidential information, using skill and care, demonstrating good conduct, keeping and rendering accounts, not attempting the impossible or impracticable, obeying the principal, and giving information to the principal.

In the United States, the National Labor Relations Act of 1953 covers most collective bargaining agreements in the private sector. The resolution of collective bargaining disputes often involves arbitration.

4c. Develop and execute effective negotiation strategies and tactics for different scenarios

• Describe how you might negotiate a salary increase from your employer in terms of the five steps of negotiation.
• Describe some items that may be open to negotiation when you receive a job offer that includes cash and non-cash components.

Research and communication are critical to conducting a successful negotiation, including salary negotiation.

For example, for Phase 1 (investigation), you should define your best alternative to a negotiated agreement (BATNA) by researching what other companies pay people to perform similar job functions in your area so that you can demand a comparable and reasonable salary. Determine your acceptable salary range: this is your bargaining range, which will serve as a guide for your zone of possible agreement (ZOPA) with your employer. Decide whether you will accept any concessions or other benefits your employer may offer instead of a salary increase (see below). You might compile a list of reservations you (as the seller) have so you can ask your employer to rectify any concerns you have with some acceptable solutions.

Phase 2 refers to your presentation. You should be able to clearly communicate your past successes with the appropriate evidence that explains why you are a valuable employee and deserve a raise. Describe the future contributions you will provide the company if given the opportunity. During Phase 1, you should have prepared to respond to any reservations your potential employer (the buyer) may have, so you can explain why any of these areas of concern are not really problematic. Phase 3 involves bargaining where you may have to agree to certain concessions, and Phase 4 describes the final stage where you and your employer close the deal.

Employers typically offer financial rewards and other types of compensation during salary negotiations. For example, cash components may include your base salary, periodic bonuses, and sales commissions. Typical non-cash components include paid holidays and vacation, sick leave, health and dental insurance, stock options, retirement account contributions, tuition reimbursement, and parking or mass transport subsidies. Employers can offer potential employees these additional incentives during the bargaining phase of salary negotiations. During collective bargaining, union representatives may argue that employers should provide these benefits to their employees when negotiating on behalf of their union members.

Unit 4 Vocabulary

This vocabulary list includes some terms that may help you answer some of the review items above and some terms you should be familiar with to be successful in completing the final exam for this course.

• Acquisitions
• Agent
• Arbitration
• Coalitions
• Collective bargaining
• Collaborative negotiation strategy
• Competitive negotiation strategy
• Fiduciary duty or responsibility
• Interest-based bargaining
• Mergers
• Moves and turns
• Multi-party business negotiations
• Positional bargaining
• Principal
• Stakeholder