Negotiation in Management Decision Making Essay

Having been approached by The Director of the Cowley Council Council ( cardinal) regarding an industrial dispute with their refuse collectors, a report has been prep atomic number 18d to bewilder insight into the field of duologue and aid the council in their talks with the refuse collectors. The dispute is primarily implicated with three hundreds plans to change usageing practices but thither are excessively a be of other issues regarding pay, shift patterns and recent cuts in the training budget and expenses.The refuse collectors are threatening to go on strike if their demands are non met, an action that the council would undoubtedly like to avoid. According to Rubin and Brown (1975), negotiation refers to a process in which individuals work together to formulate contracts regarding an issue or issues in dispute. An agreement result only occur if the offers made are accepted by both of the parties (Neale & Northcraft 1991) and should lead to separate and stability, fo ster social harmony, amplification feelings of self-efficacy, reduce the probability of future conflict, and stimulate stinting prosperity (Rubin et al 1994).Getting the negotiation game right is ever important for managers as the global economy expands, as the service sector grows, as corporate restructuring continues and as employees continue to be concerned with managing their own careers (Neale and Bazerman 1992 3). The sign stages of the report will cover theory and research on the decision-analytic approach to negotiation and discuss its relevance and possible use for CCC regarding its dispute with the Cowley refuse collectors.I will then position potential biases and pitfalls that prat act as barriers to in effect(p) negotiation that CCC should try to avoid. Finally I will conclude and outline suggested proposals for CCC to consider with the aim of assisting and improving their negotiations with the refuse collectors. The decision-analytic approach to decision do is a more pragmatic alternative to the dominant psychological and economic perspectives, which contain a tot of limitations.The individual-attribute literature fails to measure dis assigns adequately, the situational literature does not consider the wideness of the negotiators perceptions in interpret situational characteristics (Neale and Bazerman 1991 20) and the game theory unrealistically assumes impeccably rational, supersmart people (Raiffa 1982, 2001). What differentiates the decision-analytic approach is its focus on how erring phratry like you and me actually behave rather than on how we would behave if we were smarter, thought harder, were more consistent, were all learned (Raiffa, 1982 21).Previous psychological and economic approaches have focused on describing how people hazard decisions or prescribing how to ameliorate decision making. However, very little interaction has occurred between the descriptive and prescriptive camps (Neale and Bazerman 1991 20), and it i s Raiffas (1982) avocation of an lopsided prescriptive/descriptive relationship that makes the decision-analytic approach stand out, creating a prescriptive need to descriptively say how negotiators actually make decisions (Bazerman et al 2001).Many scholars hold the view that the prescriptions gained from this model are more semiprecious than those offered by more traditional approaches (loose and Sebenius 1986). Raiffas framework for approaching effective negotiations distinguishes three sets of claimation, a cabal of which determines the structure of the negotiation game each parties alternative to a negotiated agreement, each parties set of interests, and the relative importance of each parties interests.To develop agreement, people need to get a good understanding of their own preferences and priorities, to surpass those to their counterpart, and to integrate education about others preferences and priorities into their own understanding of the problem at slew (De Dreu e t al 2000). Before CCC enter into any negotiations with the refuse collectors, it is imperative to determine a shell Alternative To a Negotiated Agreement (BATNA), the standard against which any proposed agreement should bemeasured (Fisher, and Ury 1981).Negotiations can be greatly improved by identifying a BATNA and carefully evaluating the negotiated agreement against that alternative (Ertel 1999). This helps negotiators fix a qualification point, a lower bound, which is crucial to monitor throughout the negotiation. Agreements that provide more value than the BATNA are prefer over impasse likewise any agreements that provide less than the BATNA should be rejected.A potential BATNA for CCC would be to look into other refuse arrangement companies opening up the possibility of privatisation. The privatisation of refuse assemblage is a serious consideration in many areas of the UK and a major debating point for the city council (Birmingham get down 2013) in Birmingham. Waste Co ncern, a private refuse collection company, claims that 17% of council tax goes towards refuse collection and that privatisation would lead to a cheaper, more frequent collection service, and a more efficient recycling dodge (edieWaste 2010).If CCC values the current refuse collectors, despite the current dispute, and they are reluctant to consider much(prenominal) an ultimatum, they could consider a more strategic change by introducing the proposed changes incrementally, or by altering the meat of changes beingness made. It is crucial for negotiators to understand each troupes key interests and how they align (Reardon 2005 28).Fisher and Ury (1981) underline the importance of the distinction between a parties position, and their interests, with a position being the stated requirement that a party demands from the other side, whist an interest is the underlying desire of the negotiator and the motives for their position. It can however be difficult to understand ones interest s and those of the other party. CCCs primary interests are increasing productivity and decrease costs, whilst the refuse collectors interests are concerned with their financial rewards.It is however important to try and understand all of the parties interests. The forcefulness Director whitethorn be under pressure to cut costs in order to trounce to a budget so her personal interests may have more focus on execute her job in order to maintain it. The interests of the refuse collectors overly concern HR aspects such as, work life balance and training and development. These interests are motives behind the position of their threat of strike, and further scrutiny may offer CCC potential areas to focus on during negotiation.Focussing on deeper interests can provide a more reasonable bargaining platform and a creative and practical solution to a negotiation. at once the interests of each party have been represented, it is important for negotiators to try and value the relative impo rtance of each partys interests. This then allows the parties to effectively trade-off less important issues to gain more important issues. If CCC can establish that, for example, the refuse collectors desire a better work life balance as well as sufficient financial well-beings, there may be potential for a average ground to be reached offering a certain amount of each.The importance of interests often comes down to economic factors, thus job security is frequent consideration. In this instance the job security of the refuse collectors is at risk as there is a chance of redundancies if they do not cooperate. This development provides the building blocks for view analytically about a negotiation (Bazerman and Moore 2009154) and prepares the parties for the two primary tasks of negotiation creating and claiming value (Lax and Sebenius 1986). It is crucial for negotiators to establish the reservation points of both parties.That is the worst possible outcome they will accept in the beginning a negotiation is impasse. With both reservation points established, a positive bargaining zone is created, which allows negotiators to aim for a resolution that is tho acceptable to the other party (Bazerman and Moore 2009 156) by getting as close to their reservation point as possible. It is however, also vital for both parties to try and cooperate in creating value in the negotiation, as there is often opportunity to considerably enlarge the pie before cutting it into shares for each side to enjoy (Raiffa 2002 91).Lax and Sebenius (1986) stress that differences must be seen as opportunities, as opposed to barriers, that can be explored to find the or so efficient solution rather than just satisficing (Simon 1956). According to Schmidt and Tannenbaum (1960) differences can help to increase the range and bod of alternatives suggested and even potentially enrich ones own goals, ideas, and methods. So CCC must capitalise on the differences in the party preferences (Pruit t 1983) by evaluating theposition of the refuse collectors, and looking into finer detail at the interests behind these positions, before attempting to develop novel alternatives through creative problem solving (Neale and Bazerman 1991 24). Negotiation then depends fundamentally on parties ability to trade issues against each other (Froman & Cohen 1970) and place demands and formulate concessions to foster agreements that meet their own goals, plot avoiding that the counterpart leaves the situation (De Dreu et al 2000). CCC could for example offer certain alternative benefits to the refuse collectors if the changes are implemented.Perhaps an investment in more efficient equipment and machinery would be appealing. There are certain tools that negotiators can use in order to aid their efforts in collecting information and subsequently increase the probability of creating value. It is certainly the case that deception is often used in negotiation (Schweitzer 1997) and can be an effec tive strategy for increasing ones own outcomes (OConnor and Carnevale 1997). However in this instance, both parties must also note that building trust and initiating a free flow of information is critical to finding and endogenic agreement (Johns and Saks 2011)).In heated negotiations this is far easier said than done, as neither side wants to give aside too much information on their stance on particular issues. However, CCC is in the position to try and create a trustworthy relationship in order to improve their informational position. The director could inform the refuse collectors of the councils pressures and financial limitations that are the driving factor behind the need to change the working practices and make cuts. If no suitable solution is agreed upon, then there may have to be redundancies, as the council cannot overspend.Another tactic could be to strategically disclose some information. As behaviours in negotiation are often reciprocated (Lewicki and Litterer 1985), this may prompt the refuse collectors to open up and pass over revealing information which may facilitate the negotiation process. CCC must also ask a lot of questions to increase the chances of ascertaining critical information. According to Bazerman and Moore (2009 162) asking questions and listening actively are the keys to collecting important new information from the other side but it also important for negotiators to remember that information can be gained from what is not said, as well aswhat is said.An alternative to trading issues would be for CCC to arrange some affable of contingency contract to verify weather their plans to change working practices is fair or weather it is being rightly disputed by the refuse collectors. CCC could assess a weeks worth of collection rounds and together with the refuse collectors, formulate weekly targets in terms of time and productivity. A weeks trial on this typesetters case of contingency contract could easily establish weather CCCs planned changes are excusable or not.There are a number of ways in which contingent contracts can benefit the outcomes to negotiations as outlined by Bazerman and Gillespie (1999). Firstly organising the implementation of a contingency contract can identify bluffs by insincere parties. This will aid CCC initially with regard to their uncertainties over issues such as the number of staff needed on each collection round, shift patterns and pay. Contingency contracts are also a useful tool in incentivising performance. It may provide more motivation for the refuse collectors to start working at or above the levels specified in the contract.