Unraveling Business Negotiations Using Practitioner Data

Abstract

Although negotiations are a core business activity, there is a lack of information about what actually occurs during a business negotiation. This study addresses this issue though an international survey of managers focusing on actual negotiations. The 294 respondents reported on what actions they took as they sought to achieve an agreement, including how information was exchanged and how they looked for new solutions and managed concession making. The analysis suggests a pragmatic approach to negotiation, whereby information is not withheld, but neither is it freely given. Solutions emerge from discussion of priorities and commonalities rather than through more formal creative processes. The underlying script of negotiation appears to draw more on competitive than overtly collaborative tactics, suggesting that business negotiators are cautious co-operators. Further research avenues include investigating the pressures and context that impact upon negotiators' decision-making and closer examination of interactions between negotiation tasks en route to an agreement.I negotiated a 2-year service level agreement with a monopoly supplier. We negotiated over a 6-month period and met multiple times using face to face and conference calls. We moved from sorting the scope to more detailed discussions to running test phases to finally signing.(Procurement Manager) I negotiated a purchase order with a supplier. We met their representatives twice and about 10 times via teleconversation. We communicated the requirements and specifications by tele-conversation. The first meeting sorted out the details of the deal and quality concerns; the second meeting sorted out the terms. Following the multiple tele-conferences, we were able to agree on final terms that were acceptable to us. (Procurement Supervisor) Very little in business seems to happen without negotiation. Procurement contracts have to be secured, finance has to be raised, production schedules have to be finalized, and a sales contract is needed with any number of clauses covering price, delivery, quality, and risk mitigation. Managers might find themselves negotiating is needed with government officials, with environmental groups, with indigenous communities or-if something goes wrong-with lawyers and regulators. A deeper understanding of how negotiators negotiate and how the negotiation process works in the business context will contribute to more effective business practices. To this end, this article provides insights from a survey of nearly 300 negotiation practitioners. The survey findings reveal the tactics they each used in one of their business

Successful buyer–supplier relationships

“…As an example, in a situation where two companies had committed to cooperate over sharing resources, the negotiations themselves were still competitive (Fells, 2013). Both Fells et al (2015) and Ramsay (2004) found an underlying competitiveness as evidenced in their surveys of business and supply chain negotiations.…”

“…The interviews with the 36 senior procurement managers provide rich insights into how they manage their buyer-supplier relationships and, in particular, into the role of negotiations. As in any other context, buyer-supplier negotiations occur only because neither party is able to achieve its objectives without the involvement of the other (Fells, 2016). The ensuing negotiations not only set the terms of the contract but also establish the context in which the contract will be implemented.…”

Environmental Conflict and Media Coverage of an Oil Spill in Trinidad

“…Media coverage can contribute to an integrative approach to conflict and negotiation, but it may not always be in the interest of boosting newspaper ratings. The negotiation processes of 294 practitioners were analyzed to unravel the pragmatic strategies used to arrive at agreements (Fells, Rogers, Prowse, & Ott, ). That study, however, noted the need for further research into the pressures and context which impact negotiators' decision‐making.…”

Making MNC Competitive Through Effective Cross Cultural Negotiations

“…The party, which had the lower hand at the time of the negotiation and agreement, will later struggle to improve its stand and will pull out (or, at least, tend to pull out) of the agreement with party which at that time had the upper hand. In the context of this viewpoint and further commenting on effective negotiation process, Fells et al (2015) state that fuller exchange and sharing of information and data and openly exchanging each party's goals and "the ideal" solution and then sincerely working out an acceptable compromise accord would result in a more realistic and satisfying solution to both parties.…”