9jaSchoolsPoint: NEGOTIATING WITH MANAGERS FROM AFRICA: THE NIGERIAN APPROACH

Abstract

The Nigerian business environment is still characterized by challenges such as difficulty in obtaining information on business performance. Meanwhile, data codification is required for effective report on business activities. Managers, who are saddled with the task of negotiating for their business organizations therefore have serious task, especially in the Nigerian business environment that tends to be influenced by cultural plurality and milieu; frequent policy review and of course, frequent demands. This discourse examined negotiation by managers in Nigeria. The Nigerian business environment was reviewed. The author further examined approaches in negotiation, types and processes with particular reference to managers in Nigeria. It is concluded that managers in Nigerian have much tasks in the negotiation process given the factors earlier deciphered.

Introduction

A discussion on negotiation in Nigeria or among managers in Nigeria will be fascinating when there is clear understanding of the Nigerian business environment. Meanwhile, any discussion on the Nigerian business environment will be more fascinating when information and data of business activities are readily available. Unfortunately, it is not quite easy to obtain information on business performance in Nigeria as information sourcing in Nigeria is to say the least cumbersome. The National Bureau of Statistics (NBS), a body established by an Act of Parliament to generate statistics on business performance has so much responsibility, where the regular, sourcing, generation, organization, release and publication of statistics on business activities and operation is just a fraction of its many duties. The Nigerian business model comprising private (individuals and private firms participating in the productive processes); and public (government) initiatives and ownership of businesses create more tasks for NBS. This challenge notwithstanding, the Nigeria’s business environment of the 21^st century needs data codification and publication of business activities on a regular basis, especially on daily basis. This will serve as a reference material and facilitate decision making by investors, customers, business analysts, business educators, government functionaries responsible for the formulation of business policies, among others.

Negotiation in the Nigerian business environment assumes varying degrees considering the nature of Nigeria’s economy which is not in the extreme either as a capitalist (where private firms and individuals own productive resources in a seemingly free market enterprise system) or socialist (where government ownership of productive resources in a seemingly system of welfarism). Nigeria’s economic system can therefore be described as a mixed economy where both government and private initiatives and ownership of business is allowed. One can therefore imagine the complexity of the negotiation process in such a business environment.

In view of the foregoing, captains of industries/business; top government functionaries; foreign nationals; country representative and international experts lead negotiating teams for business organizations, government, multinational enterprises, and international organizations respectively. Moreover, negotiations involving employers (public or private) and employees have union leaders at the negotiation table for their employees. In addition to the aforementioned, there are situations where numbers of the public, civil society, interest groups, sectional groups, rebels/militant, and religious organizations show sympathy on other conflicting groups or have their interests to be protected or their demands to be met. Where this arises, they are at liberty to have their representatives or agent at the negotiation table.

This chapter examines negotiation among managers in Nigeria and attempt, first to decipher the Nigerian business environment, negotiation in its conceptual sense, meaning, types, process, approaches and how managers in Nigeria business environment justifies their position in the negotiation table un behalf of their business establishments.

The Nigeria business environment

The post-independence Nigeria was characterized with increased business activities and strategies with a view to increasing the output of goods and services; raise the standard of living of Nigerians and boost national income. Therefore, Nigeria pursued vigorously industrialization and the development of business using appropritate policies, such as financial policies, import substitution, curbing excessive monetary expansion and exchange control measures. Remarkably, the foreign currency (Domiciliary Accounts) Decree of 1985, which came to effect on October 1, 1985 allowed Nigerians, foreigners resident in Nigeria and companies registered under Nigerian laws to keep accounts denominated in the US Dollars, British Pound Sterling, French Franc, Deutsche Mark and Swiss Franc with Nigeria’s local banks. This measure was meant to enhance autonomous flow of foreign exchange. There was an initial attempt by the then Military President to obtain IMF loan for industrial and business development. Nigerians, on the early part of 1986 rejected IMF adjustment loan proposed by the military government of General Ibrahim Babangida. This led to the adoption of the Structural Adjustment Programme (SAP) in July 1986.

Another important policy that has characterized the Nigerian business environment is the promulgation of Nigerian enterprise promotion Decree 1972, 1977, etc, privatization policy, among others. The Nigerian Enterprise pPromotion Decree reserved for Nigerian citizens, full ownership of small scale business enterprises, and for large scale businesses, and 40 percent equity participation. The 1977 Decree was promulgated to increase the number of business that should be owned wholly by Nigerians.

Privatization is defined in Nigeria’s Privatization Decree No. 25, 1988 as “the relinquishment of part or all of the equity and other interest held by the federal government (of course Federal Military Government as at the time) or its agency in enterprises whether wholly or partly owned by the federal government (as at the time, federal military government) and privatize shall be construed accordingly.

Privatization policy is very significant in the business life of Nigeria, hence, almost every administration tend to privatize privatization policy. Hence, from time to time more establishment that well formerly owned by government are transferred into private hand. Privatization can take the following forms:

1. Enterprises in which 100% equity held by the government can wholly be privatized which can take the form of full commercialization; partial communalization.

2. Enterprises in which equity held by the government can be partially privatized.

Okon (2016) remarked that Nigeria has been a focus for international business investment because of its potential for market expansion as the most populated nation on the African continent. The Nigeria business environment has therefore undergone constant review to match pace with global trend. This holds serious implications for managers in negotiation. Again, the need to get Nigeria on track of development is placing serious task on managers during negotiation. What are common among most African countries (Okon, 2015) postulated is the continuous underdevelopment of resources. Managers, during any negotiation process are poised to promote effective business agreement for the overall development of the Nigeria’s business environment. Again, government representatives in the negotiation process must be able to drive home investors to the country.

Negotiation as a Concept

Negotiation generally means a bargaining process between two or more parties with each party advocating in the negotiation process with identified demands, aims or viewpoints and seeking for a common platform where mutual agreement is imminent. Negotiation is a matter of give and take. Negotiation is a method by which people settle differences. It is a process by which compromise or agreement is reached while avoiding argument and dispute. In any disagreement, individuals understandably aim to achieve the best possible outcome for their position (or perhaps an organization they represent). However, the principles of fairness, seeking mutual benefit and maintaining a relationship are the keys to a successful outcome. Specific forms of negotiation are used in many situations: international affairs, the legal system, government, industrial disputes or domestic relationships as examples. However, general negotiation skills can be learned and applied in a wide range of activities. Negotiation skills can be of great benefit in resolving any differences that arise between you and others. It is inevitable that, from time-to-time, conflict and disagreement will arise as the differing needs, wants, aims and beliefs of people are brought together. Without negotiation, such conflicts may lead to argument and resentment resulting in one or all of the parties feeling dissatisfied. The point of negotiation is to try to reach agreements without causing future barriers to communications. Negotiation is not done spontaneously but comes in stages; appears in different types; key points are needed for successful negotiation; interests and positions in the negotiation process; effective communication, an essential ingredient for negotiation.

Hartzell (2011) explained that to negotiate is the process or act of attempting to achieve agreement between two or more parties by clarifying and discussing issues, establishing the areas of controversy, clarifying positions taken, options for agreement, discovering and confirming areas of agreement, and creating and clarifying the language and terms of agreement, including the intent and duties of the respective parties. Hartzell, who portrayed negotiation from the angle of employment therefore, asserted that the essence of the collective bargaining process centres on the discussion of terms and condition of employment by employers and employees, or their representatives, with a view to reaching a mutually acceptable outcome.

Similarly, Kelleher and Klein (2006) averred that negotiation takes place when officials talk to each other directly or indirectly or through an intermediary. Here, Kelleher and Klein observed that indirect communications have come to be considered in diplomacy as well. The authors described this as tacit negotiations, a process which involves officials saying or doing something with the intent of sending a message to another (in their case, government) without telling it directly. A shift in position can in this case signal the willingness to break an impasse and negotiate a peaceful resolution to a dispute. The points deciphered above implies that negotiation covers many spheres of endeavour including intra and inter companies; government and business enterprises; among individuals; among countries; civil societies; foreign countries, among others.

Valderey (2016), analyzing conflict resolution between Multinational Enterprises (MNEs) operating in Latin America and their host countries observed that the negotiation table has enlarged to accommodate other guests beyond traditional delegates from the government and the external enterprise. Valderey further reported that representatives from all corners of society, whether rightfully appointed or not, have now a say in matters that no longer be restricted to secretive negotiations. The author further noted that conflicts, indeed may arise from the array of demands and expectations of those who believe that they are entitled to participate in decisions that affect the lives of many. Here, negotiation is seen as the process among different entities or persons by which every part involved looks to maximize its own benefit or agree to the common solution of a problem.

Nigeria’s economy is strong and there are many possibilities to do business in this country but the people of Nigeria are largely unaware of the rules of the western world. They have their unique understandings and perspectives on how to conduct business so there could be a large gap between business habits of other countries and Nigerians. Therefore, for doing business in Nigeria it may be better to enter the local market with a well-versed negotiator or consultant. Nigeria is a very different place for who would like to start working there. The keys to success are adaptability, flexibility, and some cultural knowledge background. In Nigeria, having a personal relationship with your colleagues and superiors is normal. At first, they spend hours to know each other. In Africa and Asia, the family is an important subject of conversation. Therefore, talking about family and health matters could be the best way to knowing your partner. During meetings, it is important to be pleasant and agreeable so do not try to rush through this process or impose your own agenda during these initial meetings.

In private meetings, don’t be shocked if they are interrupted by calls, emails, or knocks at the door; Nigerians do a lot of work in teams and managers constantly manage them. Nigerians prefer the use of Mr. /Mrs. /Ms. and surname so using the first name of your client is not common. Titles are of utmost importance, too. Many Nigerians will insist on being addressed with full titles at all times. Some occupations are used as titles as well, such as “engineer”. Greeting processes are very important in Nigeria. Take time to exchange pleasantries and ask about each other’s well-being. To shake someone’s hand is common; if you are a man greeting a woman, wait for her to extend her hand first. Remember to shake hands with everybody when you enter a room and go through the obligatory, fairly lengthy introductions with warmth and good grace. Try to greet each person in a group individually, in order of seniority. This is a common sign of respect, which can also be applied to superiors. It is also appropriate to bow your head when shaking the hand of someone much obviously older than you. When speaking to superiors and seniors, try to avoid eye contact. In general, Nigerians make much less use of eye contact than members of Western cultures. Insisting on looking others in the eye during a conversation might easily be taken as a sign of rudeness or even aggression. There is no exact way or time to exchange business cards, but you should always try to accept them with both hands or with your right hand – never with the left.
Always take a moment to examine the business card. Don’t ever write on your business cards; if your details have changed, it’s better to have new cards printed. Punctuality is valued, but also, due to the erratic traffic conditions, being on time can be quite hard.

Patience is a virtue you will surely need when doing business in Nigeria. It is often wise to schedule important meetings well ahead and to call in the day before to confirm. Remember that there are a number of different ethnicities, cultures, and religions living side by side in Nigeria. Make sure to ask co-workers about their background in order not to offend anybody by accident. The “thumbs up” sign, which in Western societies usually denotes that everything is all right, can be very offensive in Nigeria. The Concept of personal space is almost nonexistent in Nigeria. It is quite normal for people to stand close to you when talking or standing in line. While this may seem unpleasant to some, be tolerant and do not tell people to back off. Dress smartly when you go to Nigeria. Your relative importance may be judged on your appearance. Try to avoid using your left hand when handing things to people, drinks, food etc. A large part of the Nigerian population is Muslim so be aware of Muslim taboos on alcohol, pork, gambling etc.

Especially such negotiations arise while establishing strategic partnership, undertaking joint ventures, performing strategic alliances, mergers and acquisitions, creating networks and virtual or process-oriented organizations, maintaining industrial relations, and within other complex transactions, comprising numerous issues and parties as well as involving considerable risk or even uncertainty, caused by the impact of turbulent environment. Taking into account presented features of contemporary business negotiations, it should be concluded that global business environment stimulated by modern information technology is highly challenging to the managers within present companies, especially from the point of view of performing negotiation processes effectively enough. Therefore it is necessary to specify the roles and functions being accomplished by the managers within those processes. Thus the objective of the paper is to present author’s concept of the description of those roles and functions, which is based on the original, complex model of negotiations in a company. Unfortunately the issue to be discussed in the paper is not investigated thoroughly enough in the research and literature on negotiations.

Concept and types of business negotiations

It is assumed that business negotiations should be treated as a specific process, i.e. complex venture (project), including many activities of the parties interested in reaching agreement and resolving conflicts that may occur. Those activities interact with one another in many different ways. First of all negotiations constitute interactive decision making process. At the initial stage of that process the parties on them own formulate alternative solutions to the considered problems and specify criteria for the evaluation of alternatives, reflecting solely individul parties’ goals and interests. Then all negotiators must adjust both alternatives and criteria to reach common ground at the level satisfactory for all sides. The decisional dimension of negotiations is the most important for the purpose of their analysis, organizing, and leading. The other important aspects of business negotiations are as follows (Lewicki et al. 2005:), (Rządca 2003:

23–47), (Kozina 2012):

1. Conflict resolution and search for an agreement, which creates: mutual dependence between parties, interpersonal communication process, mutual exchange of tangible and intangible values,

2. New values creation.

As far as the types of business negotiations are considered, from the point of view of a company as either their party or environment, numerous of those types can be distinguished, applying two sets of criteria: basic ones – clarifying specific features of business negotiations and supportive ones - reflecting their common characteristics. Criteria types of negotiations – can be intra-organizational (internal) – between organizational posts and units within a company and inter-organizational (external) – between company representatives and external stakeholders (clients, suppliers, subcontractors and so on). Areas of company performance (business functions), i.e. negotiations within:

a. Operations (core) processes, e.g. production ones.

b. Human resource management, especially collective bargaining.

c. Marketing and trade – concerning both sales and supply.

d. Accounting and finance.

e. Research and development.

f. Mixed – concerning issues from different areas, e.g. within project management or process-oriented structures.

Importance (significance) of Negotiations

a. Strategic – concerning fundamental issues, e.g. mergers or alliances.

b. Tactical – creating capabilities, e.g. material supply, production maintenance.

c. Operational – within processes performance, mainly internal and external cooperation.

Negotiations frequency

a. Routine (recurrent).

b. Occasional (exceptional).

According to supportive criteria Negotiations scope

a. Simple – on singular issues, e.g. price or wages.

b. Complex (multi-issued), e.g. trade or credit negotiations.

Negotiations goals and character of conflict

a. Compulsory – e.g. collective bargaining, negotiating with a boss.

b. Voluntary, e.g. with suppliers, clients and other partners.

c. Alignments – mutual agreements within processes being performed.

Number of negotiations partners

a. Two-party.

b. Multi-party.

Attitude towards negotiations

a. Integrative (cooperative, win-win).

b. Distributive (competitive, win-lose).

Therefore the model of business negotiations must be based on complex approach to management process. From the point of view of company’s features, as both a party and an environment of negotiations, it is indispensable to see their role in a company from holistic perspective, integrating different concepts stemmed from the other works on business negotiations in literature. Negotiations are strictly subordinated to establishing company’s objectives as a specific type of an organization. They are necessary for both establishing company’s interactions with environment and determining internal cooperation. Moreover, regarding negotiations as an interactive decision process, allows us to notice their indiscrete relation with management process. For each specific negotiation situation it is a particular manager or other employee – company representative or a member of negotiating team (subordinated to that manager due to the delegation of authority) – who is responsible for performing negotiation process.

Negotiations objectives are strictly (directly) determined by the needs and requirements of particular venture, project, transaction etc., which is performed by using negotiations as a specific managerial instrument, e.g. buying or selling goods, establishing compensation systems, gaining financial resources and so on. Those objectives are also depended (indirectly) on overall company’s goals, stemming from its strategy and mission, e.g. expansion on new, promising markets, investment in up-to-date technology, or alliances with other companies. Such goals constitute negotiations external objectives, formed by managers supervising negotiations and expressed by general effectiveness criteria for particular ventures, such as profitability, productivity, etc. Partial negotiations objectives (tasks) are determined by other dimensions, the scope in particular and concern specific issues to be negotiated.

Negotiating as one of managerial roles

For each particular negotiation in a company their principal is a manager at higher level of hierarchy or an employee to whom responsibility for supervising negotiations has been delegated. Such a person is also responsible for performing negotiations, and accomplishing their goals. It is either a member of functional department or project team (usually in intra-organizational negotiations) or company representative (individual or member of negotiating team), which occurs within inter-organizational negotiations. Therefore managerial functions in negotiations must be seen in the context of typical roles and competencies of executives. Playing that role manager represents the organizations in different negotiations, either intra- or inter-organizational ones..

The particular tasks of the negotiations superior are as follows:

− taking responsibility for achieving the best possible results in terms of the objectives of negotiations and the company as a whole,

− making decision to initiate negotiations,

− appointing (nominating) team leader and approving the composition of the team,

− assigning tasks and delegating decision-making powers to the leader,

− monitoring team activities and the progress of negotiations,

− approving key decisions in the negotiation process, especially in terms of making major concessions and commitments,

− formulating final draft of the agreement (ratified later on higher level of hierarchy),

− making necessary interventions or direct involvement in conducting negotiations (if it is appropriate),

− acting as team leader in the case of direct participation to negotiations,

− evaluating the effectiveness of negotiations – external assessment from the point of view of general company goals.

Leader (head) of the team, (boss, chief negotiator) – responsible for controlling (managing) entire negotiation process. His (her) particular tasks are as follows:

− determining partial (detailed) objectives of negotiations and their strategy and techniques,

− identifying and acquiring the resources necessary to conduct negotiations,

− determining the time and place of negotiations,

− designing the composition of negotiating team (choosing representatives),

− assigning team roles and tasks as well as delegating responsibilities to other team members (spokesperson, experts, behavioral and data analysts and so on),

− presenting proposals to the other side and making necessary concessions and commitments,

− coordinating entire negotiating process and facilitating teamwork,

− evaluating the effectiveness of negotiations – internal assessment, i.e. within negotiating team and considering particular negotiations objectives.

Manager as a mediator

Finally, it is necessary to describe specific managerial role in negotiations which is mediation, usually applied to facilitate resolving internal conflicts in a company by the executives (leaders) in particular teams of employees. Generally speaking, mediation is “the intervention into a dispute or negotiation by an acceptable, impartial, and neutral third party, who has no authoritative decision-making power to assist disputing parties in voluntarily reaching their own mutually acceptable settlement of issues in dispute”. It is a “technique of staving off or curbing a dispute, involving the participation of a third neutral party. The mediator assumes that the object of the conflict is a matter of its participants, so does not impose any solutions, but allows the parties to find a compromise” (De Sttephen 1988). The objective of mediation is to implement such course of action by the “third party” to:

a. prevents the escalation of the conflict, which may hinder or even preclude proper functioning of the organization or, in the case of a conflict between different organizations, may lead to the rupture of mutual contacts;

b. contributes to the reduction of intensity of the conflict, which is measured by the divergence of interests (goals) of the parties;

c. leads to a settlement of the conflict or solving it by such an arrangement of the situation that it is acceptable to both parties.

The mediator role is to control the activities of the antagonists and creating kind atmosphere. The mediator monitors the communication, not allowing inappropriate behaviors that may contribute to the escalation of the conflict (De Sttephen 1988). Within any intra-organizational conflict manager at a suitable level of hierarchy plays the role of mediator

Approaches to Negotiation

There are two general approaches to negotiation namely; distributive bargaining, and integrative bargaining (Robbins, Judge and Vohra, 2012). Distributive bargaining according to the authors is the negotiation that seeks to divide up a fixed amount of resources; a win-lose situation. It operates under a zero-sum condition. For instance, an item such as used car is being advertised online and prospective buyer bargains, whereby the owner gives the price. The prospective buyer is not satisfied with the price and the bargaining begins and the two (seller and buyer) negotiate over the price.

There is a zero-gain condition which implies that any gain one makes as at t he expense of the other and vice versa. As much as the buyer is able to negotiate for a cut in price leaves much to be saved. Thus, as much as the seller can get the buyer agrees on a said price is at the expense of the buyer. The idea in distributive bargaining is to get to a fixed amount of the item or services. When the parties agree or believe in the fixed amount, they tend to negotiate or bargain distributive.

This is the strategy commonly and widely adopted by labour-management negotiations over wages in Nigeria. Usually, labour’s representatives go to the bargaining table determined to get much money as possible out of management of course. This has the tendency to increase management’s costs which is the reason for resistance in the part of management. Both parties have the tendency to bargain aggressively treating the other as an opponent, who must be defeated. This is illustrated on figure 1.

Fig. 1: Distributive bargaining

Source: modified from Robbins et al.,

Fig. 1 has two parties open to the distributive bargaining zone-parties A and B who are two negotiators. Each negotiator has a target point that defines what each negotiator would like to achieve as well as a resistance point. The resistance point marks the lowest outcome t hat is acceptable. Any point below, the party can break out and call-off the negotiation rather than accept a less favourable settlement.

The area between these two points makes up the aspiration range for both parties. There is also the tendency for overlap between A’s and B’s aspiration ranges which in turn make for the existence of settlement range for aspiration to be met on either side. In distributive bargaining, first offer is very important and can technically be described as the power of first offer.

Robbins et al., posited that: “when you are engaged in distributive bargaining, research consistently shows one of the best things you can do is make the first offer, and make it n aggressive one. One reason for this is that making the first offer shows power. Individuals in power are much more likely to make initial offers, speak first at meetings, and thereby gain the advantage. Another reason is the anchoring bias. Once anchoring point is set, they fail to adequately adjust it based on subsequent information. A savvy negotiator sets an anchor with the initial offer and scores of negotiation studies show that such anchors greatly favour the person who set it.

Another distributive bargaining tactic is revealing a deadline. This can be adopted when negotiating with yet-to-be hired new employee who tends to capitalize on the company’s interest in his/her worth to play the hardball and ask for an extraordinary salary and many other benefits. Negotiators who reveal deadlines speed concessions from their negotiating counterparts, making them reconsider their position.

Integrative bargaining

This is a form of negotiation that seeks one or more settlements t hat can create a win-win solution. This form of negotiation is more suitable in intra-organizational behaviour.

Company distributive with integrative bargaining

Bargaining characteristics	Distributive bargaining	Integrated bargaining
Goal	Get as much as the pie as possible	Expand the pie so that both parties are satisfied.
Motivation	Win-lose	Win-win
Focus	Positions (“I cannot go beyond this point on this issue”).	Interests (“can you explain why this issue is so important to you?”).
Interests	Opposed	Congruent
Information sharing	Low (sharing information will only allow other party to take advantage).	High (Sharing information will allow each party to find ways to satisfy interests of each party.
Duration of relationship	Short term	Long term.

The negotiation process

Figure 2 adapted from Robbins, et al provides a simplified model of the negotiation process. It views negotiation as made up of five steps:

1. Preparation and planning

2. Definition of ground rules

3. Clarification and justification

4. Bargaining and problem solving and

5. Closure and implementation

1. Preparation and planning: before you start negotiating, you need to do your homework. What’s the nature of the conflict? What’s the history leading up to this negotiation? Who’s involved and what are their perceptions of the conflict? What’s do you want from the negotiation? What are your goals? If you are a supply manager at Dell Computer, for instance, and your goal is to get a significant cost reduction from your supplier of keyboards, make sure this goal stays paramount in your discussions and doesn’t get overshadowed by other issues. If often helps to put your goals in writing and develop a range of outcomes-from “most hopeful” to “minimally acceptable”-to keep your attention focused.

You also want to assess what you think are the other party’s goals. What are they likely to ask/request? How entrenched is their position likely to be? What intangible or hidden interests maybe important to them? On what might they be willing to settle? When you can anticipate your opponent’s position, you are better equipped to counter arguments with the facts and figures that support your positions.

Relationships with chain as a result of negotiation, is another outcome to take into consideration. If you could “win” a negotiation but push the other side into resentment of animosity, it might be wiser to pursue a more compromising style. If preserving the relationship will make you seem weak and easily exploited, you may want to consider a more aggressive style. As an example of how the tone of a relationship set in negotiations matters, consider the people who feel good about the process of a job offer negotiation are more satisfied with their jobs and less likely to turn over a year later regardless of their actual outcome from their negotiation. A company that is very successful in negotiating terms of employment that satisfy it but not the new hire pays a price in its long term relationship with the employees.

Individual Differences in Negotiation Effectiveness

In considering individual differences in negotiation, it is pertinent to ask: Are some people better negotiators than others? The answer could be more complex than one can imagine or think. Robbins, Judge and Vohra (2012) suggested and discussed three factors as having influence on how effectively individuals negotiate: personality, mood/emotions, and gender.

Personality Traits in Negotiation: Can you predict an opponent’s negotiating tactics if you know something about his or her personality? Because personality and negotiation outcomes are related but only weakly, the answer is, at best, “sort of”. Negotiators who are agreeable or extraverted are not very successful in distributive bargaining. Why? Because extraverts are outgoing and friendly, they tend to share more information than they should. And agreeable people are more interested in finding ways to cooperate rather than top butt heads. These traits, while slightly helpful in integrative negotiations, are liabilities when interests are opposed. So the best distributive bargainer appears to be a disagreeable introvert-someone more interested in his or her own outcomes than in pleasing the other party and having a pleasant social exchange. People who are highly interested in having positive relationships with other people, and who are not very concerned about their own outcomes, are especially poor negotiators. These people tend to be very anxious about disagreements and plan to give in quickly to avoid unpleasant conflicts even before negotiations start.

Research also suggests intelligence predicts negotiation effectiveness, but, as with personality, the effects aren’t especially strong. In a sense, these weak links are good news because they mean you’re not severely disadvantaged, even if you are an agreeable extravert, when it comes time to negotiate. We all can learn to be better negotiators. In fact, people who think so are more likely to do well in negotiations because they persist in their efforts even in the face of temporary setbacks.

Moods/Emotions in Negotiation: Do moods and emotions influence negotiation? They do, but the way they do appears to depend on the type of negotiation. In distributive negotiations, it appears to depend on the type of negotiation. In distributive negotiations, it appears that negotiators in a position of power or equal status who show anger negotiate better outcomes because their anger induces concessions from their opponents. This appears to hold true even when the negotiators are instructed to show anger despite not being truly angry. On the other hand, for those in a less powerful position, displaying anger leads to worse outcomes. So if you’re a boss negotiating with a peer or a subordinate, displaying anger may help you, but if you’re an employee negotiating with a boss, it might hurt you.

In integrative negotiations, in contrast, positive moods and emotions appear to lead to more integrative agreements (higher levels of joint gain). This may happen because, as we noted in chapter 4, positive mood is related to creativity.

Gender differences in negotiations: Do men and women negotiate differently? And does gender affect negotiation outcomes? The answer to the first question appears to be no. the answer to the second is a qualified yes.

A popular stereotype is that women are more cooperative and pleasant in negotiations than are men. The evidence doesn’t support this belief. However, men have been found to negotiate better outcomes than women, although the difference is relatively small. It’s been postulated that men and women place divergent values on outcomes. It is possible that a few hundred dollars more in salary or the corner officer is less important to women than forming and maintaining an interpersonal relationship.

The belief that women are “nicer” than mean in negotiations is probably due to confusion between gender and the lower degree of power women typically hold in most large organizations. Because women are expected to be “nice” and mean “tough”, research shows women are penalized when they initiate negotiations. What’s more, when women and men actually do conform to these stereotypes-women act “nice” and men “tough” – it becomes a self-fulfilling prophecy, reinforcing the stereotypical gender differences between male and female negotiators. Thus, one of the reasons negotiations favour men is that women are “damned of thy do, damned if they don’t”. Negotiate tough and they are penalized for violating a gender stereotype. Negotiate nice and it only reinforces and lets other take advantage of the stereotype.

Evidence also suggests women’s own attitudes and behaviours hurt them in negotiations. Managerial women demonstrate less confidence in anticipation of negotiating and are less satisfied with their performance afterward, even when their performance and the outcomes they achieve are similar to those for men. Women are also less likely than men to see an ambiguous situation as an opportunity for negotiation. It appears that women may unduly penalize themselves by failing to engage in negotiations when such action would be in their best interests.

Third-party negotiations

To this point, we’ve discussed bargaining in terms of direct negotiations. Occasionally, however, individuals or group representatives reach a stalemate and are unable to resolve their differences through direct negotiations. In such cases, they may turn to a third party to help them find a solution. There are four basic third-party roles: mediator, arbitrator, conciliator and consultant.

A mediator is a neutral third party who facilitates a negotiated solution by using reasoning and persuasion, suggesting alternatives, and the like. Mediators are widely used in labour-management negotiations and in civil court disputes. Their overall effectiveness is fairly impressive. The settlement rate is approximately 60 percent, with negotiator satisfaction at about 75 percent. But the situation is the key to whether negotiation will succeed; the conflicting parties must be motivated to bargain and resolve their conflict. In addition, conflict intensity can’t be too high; mediation is most effective under moderate levels of conflict. Finally, perceptions of the mediator are important; to be effective, the mediator must be perceived as neutral and no coercive.

An arbitrator is a third party with the authority to dictate an agreement. Arbitration can be voluntary (requested by the parties) or compulsory (forced on the parties by law or contract). The big plus of arbitration over mediation is that it always results in a settlement. Whether or not there is a negative side depends on how heavy handed the arbitrator appears. If o ne party is left feeling overwhelmingly defeated, that party is certain to be dissatisfied and unlikely to graciously accept the arbitrator’s decision. Therefore, the conflict may resurface at a later time.

A conciliator is a trusted third party who provides an informal communication link between the negotiator and the opponent. This role was made famous by Robert Duval in the first Godfather film. As Don Corleone’s adopted son and a lawyer by training, Duval acted as an intermediary between the Corleones and the other Mafioso families. Comparing conciliation to mediation in terms of effectiveness has proven difficult because the two overlap a great deal. In practice, conciliators typically act as more than mere communication conduits. They also engage in fact finding, interpret messages, and persuade disputants to develop agreements.

A consultant is a skilled and impartial third party who attempts to facilitate problem solving through communication and analysis, aided by knowledge of conflict management. Unlike other third parties, the consultant does not try to settle the issues but rather works to improve relationships between the conflicting parties so they can reach a settlement themselves. Instead of putting forward specific solutions, the consultant tries to help a longer-term focus: to build new and positive perceptions and attitudes between the conflicting parties.

Conflict and culture

Research suggests that differences across counties in conflict resolution strategies may be based on collectivistic tendencies and motives. Collectivist cultures see people as deeply embedded in social situations, whereas individualist cultures see people as autonomous. As a result, collectivists are more likely to seek to preserve relationships and promote the good of the group as a whole than individualists. To preserve peaceful relationships, collectivists will avoid direct expression of conflicts, preferring to use more indirect methods for resolving differences of opinions. Collectivists may also be more interested in demonstrations of concern and working through third parties to resolve disputes, whereas individualists will be more likely to confront differences of opinion directly and openly.

Some research does support this theory. A study of Indian, French, and U.K-based project managers to determine their approach toward managing conflict showed that French project managers, who are considered to be more individualistic, used competitor counterparts, used avoider and accommodator styles. A study among librarians in India, however, showed that the use of conflict management style differed depending on the seniority of the librarian and the relationship with the person with whom the conflict needs to be managed. For example, head librarians used integrating as a style with subordinates but used obliging with peers, while integrating is used by junior librarians as the dominant style irrespective of who they are dealing with. Another study revealed that whereas U.S. mangers were more likely to use competing tactics in the face of conflicts, compromising and avoiding are the most preferred methods of conflict management in China. Interview data, however, suggests top management teams in Chinese high-technology firms preferred integration even more than compromising and avoiding.

Cultural differences in negotiations

Compared to the research on conflict, there is more research on how negotiating styles vary across national cultures. One study compared U.S. and Japanese negotiators and found the generally conflict-avoidant Japanese negotiators tended to communicate indirectly and adapt their bahaviours to the situation. A follow-up study showed that whereas among U.S. mangers making early offers led to the anchoring effect we noted when discussing distributive negotiation, for Japanese negotiators early offers led to more information sharing and better integrative outcomes. In another study, managers with high levels of economic power from Hong Kong, which is a high power-distance country, were more cooperative in negotiations over a shared resource than German and U.S. manager, who were lower in power distance. This suggests that in high power distance countries, those in positions of power might exercise more restraint.

Another study looked at verbal and nonverbal negotiation tactics exhibited by North American, Japanese and Brazilians during half-hour bargaining sessions. Some of the differences were particularly interesting. The Brazilians on average said “no” 83 times, compared to 5 times for the Japanese and 9 times for the North Americans., the Japanese displayed more than 5 periods of silence lasting longer than 10 seconds during the 30-minure sessions. North Americans averaged 3.5 such periods; the Brazilians had none. The Japanese and North Americans interrupted their opponent about the same number of times, but the Brazilians interrupted 2.5 to 3 times more often than either. Finally, the Japanese and the North Americans had no physical contact with their opponents during negotiations except for hand-shaking, but the Brazilians touched each other almost 5 times every half hour.

Summary and Implications for Managers

While many people assume conflict lowers group and organizational performance, this assumption is frequently incorrect. Conflict can be either constrictive or destructive to the functioning of a group or unit. As shown in Figure 3 adapted from Robbins et al, levels of conflict can be either too high or too low. Either extreme hinders performance. An optimal level is one that prevents stagnation, stimulates creativity, and allows tensions to be released, and initiates the seeds of change, without being disruptive or preventing coordination of activities.

Conflict and unit performance

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Fig. 3: Conflict and Unit Performance, adapted from Robbins et al (2012).

What advice can we give managers faced with excessive conflict and the need to reduce it? Don’t assume one conflict-handling intention will always be best! Select an intention appropriate for the situation. Here are some guidelines.

· Use competition when quick, decisive action is vital (in emergencies), on important issues, when unpopular rules, discipline), on issues vital to the organization’s welfare when you know you’re right, and against people who take advantage of noncompetitive behaviour.

· Use collaboration to find an integrative solution when both sets of concerns are too important to be compromised, when your objective is to learn, when you want to merge insights from people with different perspective or gain commitment by incorporating concerns into a consensus, and when you need to work through feelings that have interfered with a relationship.

· Use avoidance when an issue is trivial or symptomatic of other issues, when more important issues are pressing, when you perceive no chance of satisfying your concerns, when potential disruption outweighs the benefits of resolutions, to let people cool down and regain perspective, when gathering information supersedes immediate decision, and when others can resolve the conflict more effectively.

· Use accommodation when you find you’re wrong and to allow a better position to be heard, to learn, to show your reasonableness, when issues are more important to others than to yourself and to satisfy others and maintain cooperation, to build social credits for later issues, to minimize loss when you are outmatched and losing, when harmony and stability are especially important, and to allow employees to develop by learning from mistakes.

· Use compromise when goals are important but not worth the effort of potential disruption of more assertive approaches, when opponents with equal power are committed to mutually exclusive goals, to achieve temporary settlements to complex issues, to arrive at expedient solutions under time pressure, and as a backup when collaboration or competition is unsuccessful.

Negotiation is an ongoing activity in groups and organizations. Distributive bargaining can resolve disputes, but is often negatively affects the satisfaction of one or more negotiators because it focused on the short term and because it is confrontational. Integrative bargaining, in contrast, tends to provide outcomes that satisfy all parties and t hat build lasting relationships. When engaged in negotiation, make sure you set aggressive goals and try to find creative ways to achieve the goals of both parties, especially when you value the long-tem relationship with the other party. That doesn’t mean sacrificing your self-interest; rather, it means trying to find creative solutions that give both parties what they really want.

Once you have gathered your information, use it to develop a strategy. For example, expert chess players know ahead of time how they will respond to any given situation. As part of their strategy, you should determine your and other sides Best Alternative to a Negotiated Agreement (BATNA). Your BATNA determines the lowest value acceptable to you for a negotiated agreement. Any offer you receive that is higher than your BATNA is better than an impasse. Conversely, you shouldn’t expect success in your negotiation effort unless you are able to make the other side an offer it finds more attractive than its BATNA. If you go into your negotiation having a good idea of what the other party’s BATNA is, even if you are not able to meet it, you might be able to elicit a change. Think carefully about what the other side is willing to give up. People who underestimate their opponents willingness to give on key issues before the negotiation even starts end up with lower outcome from negotiation.

2. Definition of ground rules: Once you have done your planning and develop a strategy, you are ready to begin defining with the other party the ground rules and procedures of the negotiation itself. Who will do the negotiating? Where will it take place? What time constraints, if any, will apply? To what issues will negotiation be limited? Will you follow a specific procedure if an impasse is reached? During the phase, the parties will also exchange their initial proposals or demands.

3. Clarification and justification: When you have exchanged initial positions, both you and the other party will explain, amplify, clarify, bolster, and justify your original demands. This need not be confrontational. Rather, it is an opportunity for educating and informing each other on the issues, why they are important, and how you arrived at your initial demands. Provide the other party with any documentation that helps support your position.

4. Bargaining and problem solving: The essence of this negotiation process is the actual give-and-take in trying to hash out an agreement. This is where both parties will undoubtedly need to make concessions.

5. Closure and Implementation: The final step in the negotiation process is formalizing the agreement that has been worked out and developing any procedure necessary for implementation and monitoring. For major negotiations-from labour management negotiations to bargaining over lease terms to buying a piece of real estate to negotiating a job offer to a senior management position-this requires hammering out the specific in a formal contract. For most cases, however, closure of the negotiation is nothing more format than a handshake.

In the pursuit of business goals and objectives as well as other facets of human lives, opportunities and requirements for negotiation arise daily at different environments and locations within the local and international levels. Negotiation implies a person conferring with another so as to arrive at the settlement of some matter. Negotiation is a basic means of getting what an individual wants from others. It is back-and-forth communication designed to reach an agreement when people have some interests. The negotiators display skills that are most likely to convince each other to get into such an agreement. Therefore, negotiators have to exhibit peculiar attributes that can make them succeed in the course of negotiation. These among others include the following:

1. Good negotiators are born - they are self-made, requires study and practice

2. Experience is a great teacher - experience can improve negotiation skills to some extent, but have to learn from the experience - not unaided, un-reflected, without feedback. Experience tends to improve our confidence, but not our accuracy/effectiveness

3. Good negotiators take lots of risks - while this may work in the movies, it isn’t in the script for real negotiations. Some negotiators may do this occasionally, but after carefully considering risks & potential benefits. They know how to evaluate a situation and make an optimal choice given the information available.

4. Good negotiators rely on intuition - Effective negotiators are self-aware and very conscious of what they are doing and why. Most of the important work of negotiation takes place before meeting (preparation).

5. Negotiations are always win-lose - a vast majority can be win-win.

6. The only negotiations are formal or explicit negotiations - far more negotiations take place informally every day.

7. Good negotiators are tough, intimidating, and try to get everything they can - sometimes true (in some one-shot competitive negotiations), but much more often inappropriate and ineffective. Good negotiators are not in it for their egos - they focus on results.

Elements of Negotiation

There are some elements or factors that promote negotiation. These crucial elements in every negotiation include information; time and power.

Information – information is very necessary in the success of any negotiation and forms the life blood in negotiation. The more a party to negotiation gets to know about the other side, the better for the individual’s attainment of success in the negotiation process. It is natural that while an individual seeks to find out information from the other party, such individual should be ready to dislodge information to the other party. It is obvious that some persons seeking information from another may not have all that was expected; just as such a person may equally hoard some aspects of information that the other party may as well need in the course of the negotiation. This may not be helpful however. The ideal thing is that one has to give information to get information and at the same time watch for unintentional cues, verbal cues, and behavioral cues - in addition to explicit information given by the other side.

Time – it may take people a long time to reach conclusively, terms of negotiation. In a competitive negotiation for instance, it is helpful to make known the actual deadline to the other side; try to get clues about the deadline of the other side; they usually have one. It is also helpful to note that many concessions may occur just before a deadline, so patience pays. Generally speaking therefore, one cannot achieve the best outcome quickly; hence it is good to avoid "take it or nothing" tactics, especially early, as this may not be effective.

Power – the use of power here is not in absolute but relative terms but negotiators should have potential power sources. There are many sources and tactics to gain more sophistication and restraint in using power; and this is very important. Many things affect relative power and power balance. These, among others include: position and privilege; cultural differences; developmental ability; relationship; and information and time advantages.

Requirements for Appropriate Negotiation

Appropriate negotiations requires: usual elements of a conflict situation (opposing interests, although there also may be some common interests); parties have and recognize their interdependence to at least some degree; motivation to engage with each other, rather than avoid; the situation falls between avoidance and domination; there is enough power balance that people can "come to the table"; parties have reached an active phase in which proposals can be made and explored.

Stages of Negotiation

The process of negotiation includes the following stages:

1. Preparation

2. Discussion

3. Clarification of goals

4. Negotiate towards a Win-Win outcome

5. Agreement

6. Implementation of a course of action

Preparation

Before any negotiation takes place, a decision needs to be taken as to when and where a meeting will take place to discuss the problem and who will attend. Setting a limited time-scale can also be helpful to prevent the disagreement continuing. This stage involves ensuring all the pertinent facts of the situation are known in order to clarify your own position. In the work example above, this would include knowing the ‘rules’ of your organisation, to whom help is given, when help is not felt appropriate and the grounds for such refusals. Your organisation may well have policies to which you can refer in preparation for the negotiation. Undertaking preparation before discussing the disagreement will help to avoid further conflict and unnecessarily wasting time during the meeting.

Discussion: During this stage, individuals or members of each side put forward the case as they see it, i.e. their understanding of the situation. Key skills during this stage include questioning, listening and clarifying.

Sometimes it is helpful to take notes during the discussion stage to record all points put forward in case there is need for further clarification. It is extremely important to listen, as when disagreement takes place it is easy to make the mistake of saying too much and listening too little. Each side should have an equal opportunity to present their case.

Clarifying Goals: From the discussion, the goals, interests and viewpoints of both sides of the disagreement need to be clarified. It is helpful to list these factors in order of priority. Through this clarification it is often possible to identify or establish some common ground. Clarification is an essential part of the negotiation process, without it misunderstandings are likely to occur which may cause problems and barriers to reaching a beneficial outcome.

Negotiate Towards a Win-Win Outcome: This stage focuses on what is termed a 'win-win' outcome where both sides feel they have gained something positive through the process of negotiation and both sides feel their point of view has been taken into consideration. A win-win outcome is usually the best result. Although this may not always be possible, through negotiation, it should be the ultimate goal. Suggestions of alternative strategies and compromises need to be considered at this point. Compromises are often positive alternatives which can often achieve greater benefit for all concerned compared to holding to the original positions.

Agreement: Agreement can be achieved once understanding of both sides’ viewpoints and interests have been considered. It is essential to for everybody involved to keep an open mind in order to achieve an acceptable solution. Any agreement needs to be made perfectly clear so that both sides know what has been decided.

Implementing Course of Action: From the agreement, a course of action has to be implemented to be carried through the decision making process. If the process of negotiation breaks down and agreement cannot be reached, then re-scheduling a further meeting is called for. This avoids all parties becoming embroiled in heated discussion or argument, which not only wastes time but can also damage future relationships. At the subsequent meeting, the stages of negotiation should be repeated. Any new ideas or interests should be taken into account and the situation looked at afresh. At this stage it may also be helpful to look at other alternative solutions and/or bring in another person to mediate.

Informal Negotiation

There are times when there is a need to negotiate more informally. At such times, when a difference of opinion arises, it might not be possible or appropriate to go through the stages set out above in a formal manner. Nevertheless, remembering the key points in the stages of formal negotiation may be very helpful in a variety of informal situations. In any negotiation, the following three elements are important and likely to affect the ultimate outcome of the negotiation:

1. Attitudes

2. Knowledge

3. Interpersonal Skills

Attitudes: All negotiation is strongly influenced by underlying attitudes to the process itself, for example attitudes to the issues and personalities involved in the particular case or attitudes linked to personal needs for recognition. Always be aware that: negotiation is not an arena for the realisation of individual achievements; there can be resentment of the need to negotiate by those in authority; certain features of negotiation may influence a person’s behaviour, for example some people may become defensive.

Knowledge: The more knowledge you possess of the issues in question, the greater your participation in the process of negotiation. In other words, good preparation is essential.

Meanwhile, the way issues are negotiated must be understood as negotiating will require different methods in different situations.

Interpersonal Skills: Good interpersonal skills are essential for effective negotiations, both in formal situations and in less formal or one-to-one negotiations.

These skills include:

Effective verbal communication

Effective communication in required in negotiation and this should promote effective listening and rapport building. This will in effect, reduce and misunderstanding.

Listening
We provide a lot of advice to help you improve your listening skills, see our page Active Listening.

Reducing misunderstandings

This is a key part of effective negotiation.
See our pages: Reflection, Clarification and The Ladder of Inference for more information.

Rapport Building
Build stronger working relationships based on mutual respect.

Problem Solving

This skill is necessary to resolve any issue that has already been in contention. Other skills can be brought to the fore to resolve dispute. This skill applies when there is industrial action.

Decision Making

Decision making arises when avenues have been adopted whereby parties under negotiation have drawn an agreement which has been accepted and possibly endorsed by the parties. Decisions arrived at should have the possibility of a prolonged implementation until otherwise agreed by same parties that a review is paramount.

Assertiveness

This is a skill needed to sustain ones proposition in a way that issues agreed can be sustained. Managers as people occupying leadership position need this skills when decision is or has to be taken.

Dealing with Difficult Situations

Ever since the birth of the employer-employee relationship, collective bargaining, or the teaming up of employees to negotiate terms with their employers, has existed in some shape or form. Today the public usually recognizes these groups of employers as labour union official in organizations responsible for maintaining a united front of employee demands regarding hours, wages, benefits, working conditions, health coverage, overtime, grievances and workplace rules. The right of labor unions to gather is protected under the 1st Amendment as a right to exercise freedom of speech in peaceful protest, and guaranteed by additional legislation. Labor unions often loom large in the media, especially in the auto, airline and sports industries. Their methods of collective bargaining are often so effective that any gridlock can shut down entire businesses for costly periods of time. Although unions usually negotiate with a single employer, certain cases have been levied against entire industries, notably the auto and airline industries, where the employees of competing companies may share similar grievances and demands, to provoke an industry or sector-wide change. Once a company and its labor union settle on a mutually acceptable agreement, a final contract called collective bargaining element (CBE) is signed and validated for a set period of time.

1. Good negotiators are born - they are self-made, requires study and practice

5. Negotiations are always win-lose - a vast majority can be win-win.

6. The only negotiations are formal or explicit negotiations - far more negotiations take place informally every day.

Elements of Negotiation

There are some elements or factors that promote negotiation. These crucial elements in every negotiation include information; time and power.

Negotiation, to be appropriate, requires usual elements of a conflict situation (opposing interests, although there also may be some common interests. Also, parties have and recognize their interdependence to at least some degree. Further, motivation to engage with each other, rather than avoidance is quite imperative. Thus, the situation falls between avoidance and domination; and there is enough power balance that people can "come to the table". In addition, parties have reached an active phase in which proposals can be made and explored.

Some perspectives on negotiation:

Although it would be nice to hope that negotiation tactics are used to reach settlement with the other, this is not always the case as there could be contrast in implicit negotiations, in many settings. For instance:

1. Communication is often indirect, yet still trying to settle differences without resorting to force or avoidance.

2. Two main approaches to negotiation:

a. Competitive

b. Collaborative

Differences can appear in:

i. Content: win-lose (in competitive) versus win-win (in collaborative)

ii. Relationship: unfriendly versus friendly

iii.Identity/face-saving: rigid/confrontational versus flexible/supportive

iv.Process: positional bargaining versus interest-based bargaining (to build solution)

v. I feel that it is desirable to consider (at least partly) collaborative negotiations in a large majority of situations. However, collaborative negotiations are not always possible, appropriate, or sufficient. For example, sometimes you need to protect yourself.

It is pertinent to note here that negotiations can and often do combine competitive and collaborative approaches and tactics

Competitive Negotiations:

The basic assumptions in competitive negotiation are:

a. Negotiating is controlled by egocentric self-interest

b. The underlying motivation is competitive and antagonistic

c. Limited resources are available and are zero-sum

d. This negotiation does not affect the future

e. The goal is to win as much as you can, especially more than the other side

Communication patterns in Competitive Negotiations:

a. Make high opening demands and concede slowly

b. Try to maximize tangible resource gains, within the limits of the current dispute

c. Exaggerate the value of concessions that are offered

d. Use threats, confrontations, argumentation, forceful speaking

e. Conceal and distort information

f. Manipulate people and the process by distorting intentions, resources, and goals

g. Try to resist persuasion on issues

h. Focus on quantitative and competitive goals rather than relational goals

Disadvantages:

a. Can hurt relationships, with mistrust, anger, breakdowns, communication distortions.

b. Blocks creative exploration & potential joint gains

c. Payoffs of competitive actions are often overestimated

d. Encourages brinkmanship (impasses)

e. May undermine implementation (commitment vs. compliance)

Collaborative Negotiations:

Basic assumptions in collaborative negotiation include:

a. Parties have both diverse and common interests

b. Common interests are valued and sought

c. The negotiation process can result in both parties gaining something

d. The negotiating world is controlled by enlightened self-interest

e. Interdependence is recognized and enhanced

f. Limited resources do exist, but they can usually be expanded through cooperation & creativity

g. The goal is a mutually agreeable solution that is fair to all parties. Agreement can be attained by understanding interests, rather than arguing for positions

h. Places value on relationship, requires trust, relies on good disclosure of relevant information

Communication patterns:

a. Adopts collaborative tactics such as: non-evaluative descriptive statements, disclosing statements, honest inquiry, requesting feedback, supportive remarks, concessions, accepting responsibility

b. Brainstorm creative new options to meet everyone’s needs, expand the pie

c. Use of nonspecific compensation (pay off in other ways for concession here)

d. Logrolling (identifies and tries to deal with top-priority issues for each)

e. Bridging (invent new options to meet the other side’s needs)

f. Minimize costs to the other for going along with you

Disadvantages:

1. May pressure an individual to compromise and accommodate in ways not in his/her best interests

2. Avoids confrontational strategies (which can be helpful at times)

3. Increases vulnerability to deception & manipulation by a competitive opponent

4. Makes it hard to establish definite aspiration levels & bottom lines

5. Requires substantial skill and knowledge of the process

6. Requires strong confidence on one's perceptions regarding the interests and needs of the other side.

Principles of Negotiation

The principles highlighted hereunder is particularly suitable in collaborative negotiations, but can be used in competitive negotiations too.

The principles centre around four considerations (PIOC), namely: people, interest, option and criteria.

People: Separate people from the problem

Interests: Focus on interests, not positions (interests always underlie positions)

Options: Generate a variety of possibilities before deciding what to do

Criteria: Insist that the result be based on objective standards

People – when considering this principle, the following considerations should further be met:

a. Negotiators are people first

b. Failure to deal with others as human beings prone to human reactions can be disastrous

Interests

The following considerations are pertinent

a. Usually are several possible positions that could satisfy any interest

b. Behind opposed positions lie shared and compatible interests, as well as conflicting ones

c. There are usually multiple interests

d. Look forward, rather than back

e. Commit to your interests, not your positions

f. Stay open to take their interests into account

g. Be hard on the problem, soft on the people

h. Distinguish among interests, goals (=objectives), positions, strategies, and actions. Consider these examples:

- An interest is a motivator, an underlying need, desire, or concern

- A goal is a desired outcome or result

- A position is a stated result or proposal, usually in a negotiation or conflict

- A strategy is the method or path for achieving a goal

- Tactics and actions are specific steps to be taken, hopefully following a strategy

Options (creative ones)

· Library window

· Avoid: Premature judgment; searching for the single answer; assuming fixed pie; stance that solving their problem is their problem

· Look for shared interests and mutual gain

· Develop creative new options (brainstorm to expand the pie

· Make their decision easy

Criteria (objective criteria)

· Commit to reaching a solution based on principle, not pressure

· Be open to reason, closed to threats

· Discuss objective standards for settling a problem instead of trying to force each other to back down

· Frame issue as joint search for objective criteria

· Reason & be open re which standards are appropriate & how to apply

· Yield only to principle & facts, not pressure

· Note that your position "is a matter of principle"

Collaborative negotiation can further be strengthened with the following issues:

- moving from self-interest to shared concerns

- moving from competitiveness to cooperativeness

- moving from an exchange model to a more intuitive, emotional stance

Negotiation in Nigeria and among Managers

Negotiation in Nigeria cuts across both private and public sectors. In the private sector, it is increasingly more competitive than in the public sector. Those making demands as much as the legality of their demands can expand implore techniques to get management to accept their demands. This may occur at the level of negotiation where promoters of the company seek legal registration procedures to get the company registered with the Corporate Affairs Commission (CAC). Further steps see the display of skills, credentials and prevent actions by prospective employees to get enlisted in the payroll of the company. Again, on the publication notice on issue of shares, prospective shareholders also get acquainted with those who are diagnosing to allot the shares.

Beyond shareholdings, companies advertise for special contracts where contractors are allowed to bid. At this stage, the company expects quality job delivery. Hence, contractors with best experience are sought for. However, the human factor of personal relationship plays vital role in the Nigerian factor (this is not however the right thing). This is outside the much reported “kick-back” syndrome which held sway in Nigeria before the outset of the Muhammadu Buhari led administration that has been eulogized with his “anti-corruption mantra”. Of course, this seems to be yielding fruit in three visible areas. Fist, there is a serious hunt on those having corruption case(s) in the area of bribery for business deal in the private and public spheres. Secondly, any business deal currently ongoing in Nigeria can be so done with ethical consideration devoid of the usual “kick-back” syndrome. Thirdly, there is a renewed invasion of the Nigerian business environment for business deal, as against a couple of years ago when most multinationals withdrew their business commitments in Nigeria as a way of protesting against illegal demands to provide a platform for business negotiation.

Another aspect of negotiation that is very serious and rampant in Nigeria is the labour unrest between employers and their employees mainly promoted through the increasing actions of frowning unionism. In most cases, offices are closed for several months and sometime close to a year. This affirms the assertion of Robbins, Judge and Vehra (2012) that negotiation permeates the interactions of almost everyone in groups and organizations. Robbins et al. further explained that there is the obvious where labour bargains with management and the not-so-obvious where managers negotiate with employees, peers and customers; salespeople negotiate with customers, purchasing agent negotiate with suppliers. Other forms of negotiation open to an organization include the subtle where an employee agrees to cover for a colleague for a brief period in exchange of some past or future benefits. Thus, negotiation skills have become vital to organizational and personal lives in modern sense. A cursory look at organizational structure in modern organizations where most personnel working together have no direct authority and may not even share common boss yet. Negotiation skills can bridge any noticeable gap or structural divide.

Therefore, negotiation is a process that occurs when two or more parties decide how to allocate scarce resources. Negotiation, regardless of the parties tend to affect the organization to a large extent, hence, should not be seen as a one-short economic term. Robbins et al., used negotiation and bargaining interchangeably and further posits: although we commonly think of the outcomes of negotiation in one-short economic terms, like negotiating over the price of a car, every negotiation in organizations also affect the relationship between the negotiators and the way the negotiators feel about themselves. Depending on how many the parties are going to interact with one another, sometimes maintaining the social relationship and behaving ethically will be just as important as the immediate outcome of each bargain.

Apei (2008) in an exploratory study examines cultural characteristics of Nigerian negotiators. The author noted that as Nigeria constitutes a major market in Africa, knowledge of what behavior to expect from Nigerian negotiators can facilitate the negotiation process. A questionnaire was administered to 200 Nigerian business men and women of the formal private sector of the economy, who were asked to rate themselves along ten dimensions of factors affected by culture. Responses were analyzed according to gender, age group, occupation and regional group. Statistical tests of significance were carried out. Results reveal that Nigerians involved in negotiation on behalf of their organizations are likely to be relationship oriented and adopt a win-win approach, although the Yoruba may be less so than other ethnic groups. Nigerians will seek a specific form of agreement and avoid wasting time. They are likely to be moderate in formality and display of emotions. Women are much less likely than men to take high risks. An informal style will be more frequent among negotiators with an engineering background. Most Nigerians below the age of 40 who form part of a negotiating team will expect their leader to make decisions based on team consensus. People from other countries wanting to do business with Nigerians should familiarize themselves with the way culture is likely to influence the 10 negotiation factors. They will then be better prepared to interpret and understand their counterparts' behavior at the negotiation table, and to communicate effectively.

The study by Apei has great implications for negotiation among managers in Nigeria. Inter-personal relationship and communication play vital role in negotiation. Those in the negotiation process must ensure that they understand one another and this can be achieved through effective communication and ability to create inter-personal relationship.

Okoro and Day (2013) conducted a study on critical analysis of nonverbal behavior in inter-cultural communication between Nigerians and Non Nigerians during business transactions. Findings from survey of more than one hundred respondents (Nigerian business men and women) residing in Nigeria and in the United States over a period of eight months (2011– 2012) were interpreted and analyzed. Specific nonverbal communication variables of the study included silence, non-verbal feedback, facial expressions, voice volume, gestures, and eye contact. The survey comprised of demographics and open-ended questions, and was pilot-tested by a sample of business people of multiple ethnicity and gender. Using survey and face-to-face interviews, this research expands research on specific behaviors of Nigerian non-verbal communication in the larger African context. It identifies unique nonverbal symbols essential for effective business negotiation in Nigeria, and provides appropriate culture. The study recommends communicating cross-culturally and nonverbally with Nigerians during interpersonal communication and group negotiations. Finally, the study stresses the significance of enculturation in Nigeria by identifying adjustment strategies associated with nonverbal behavior in cross-cultural business negotiations.

Essien (2014) noted that Nigeria is composed of more than 250 ethnic groups that divide the country both linguistically and territorially. The most populous and politically influential are the: Hausa and Fulani 29%, Yoruba 21%, Igbo 18%, Ijaw 10%, Kanuri 4%, Ibibio 3.5%. The major tribes in the country (Hausa-Fulani, Yoruba, and Igbo) have their own distinct culture, language, and communication patterns, and they also have a peculiar way of negotiating with non-Nigerians in business transactions and relationships. While the Igbo tribe is more business inclined, the Hausa-Fulani tribe is more politically influential because of their population and early involvement with the country’s political process. The Hausa-Fulani tribes are mainly Muslim, traditional- oriented, and have less Western education than other ethnic groups in the country. Evidently, the Igbo and Yoruba tribes embraced the Western culture early in their development, and they are more Western-oriented and sophisticated in lifestyle and general business orientation. The lifestyle of these tribes could be traced to their exposure and relationship with Western societies over the years, which account for the Structure of their verbal and nonverbal communication patterns. In terms of religious belief, the Igbo are mainly Christians and the Yoruba consist of Christians and Muslims.

Okoro and Day (2013) explained that as past and present studies indicate Igbo and Yoruba tribes engage in global business at different levels, but the Igbo dominate business and entrepreneurial transactions and activities in Nigeria. Many international business people deal largely with the Igbo tribe because they are more entrepreneurial, competitive, and risking-taking (sic). Furthermore, their nonverbal communication pattern is less complicated, because it is encompasses and demonstrates their relationship with people from other parts of the world. Geographically, Nigeria is classified into two major temperature zones – the tropical and rainforest area, which stretches from the coast to about 9 degrees latitude north, and a savannah zone, which covers the rest of the country. Nigeria has a land area of 923,768 square kilometers, situated fully within the tropical zone.

In considering negotiation among managers in Nigeria, it is pertinent to note also that the Nigerian business environment is more of micro or small scale bu9isnesses than large scale enterprises. Essien (2014) in a study reported that Micro and small scale businesses play significant role in socio- economic development of any nation with Nigeria inclusive. But despite the significant role they play in national development, they are usually faced with some challenges that constraint their growth. The study adopted a descriptive survey design. The study population comprised operators of manufacturing micro and small scale businesses in Akwa Ibom State and sample of 234 operators of manufacturing micro and small scale businesses were selected through stratified random sampling and “Nigerian Business Environment and Growth Constraints Questionnaire “developed by the researcher was used in data collection. This instrument was duly validated and tested to be reliable. Of the 234 copies of the questionnaire administered, 225 useable copies were retrieved. Frequencies and simple percentage as well as factor analysis were used to analyze data. Data analysis was facilitated with the use of the Statistical Package for Social Sciences (SPSS version 20.0) Results showed that the dimensionality of the MSMI’s constraints can be explained by 7 factors. These include problem of infrastructure particularly-power ; strict rules on credit; high interest rates on loan; multiple taxation; absence of tax holiday; trade liberalization; and poor patronage of made in Nigeria goods; It was identified that problem of infrastructure (power), inaccessibility of credit, high interest rate on loans, multiple taxation respectively were the major constraints that affected the growth of micro and small scale manufacturing businesses in Akwa Ibom State. Hence, to stabilize power, the Akwa Ibom State government should geared efforts toward generating electricity through Ibom IPP; the use of immovable assets as criterion to access business funding by banks should be reviewed; tax regimes should be harmonized. Also, ensuring product quality by SON, and promoting awareness of made in Nigeria products through trade fairs and exhibitions by MAN and NACCIMA will address trade liberalization and poor patronage factors. Small and medium scale enterprises (SMEs) abound in Nigeria. Their increasing number is due to the fact that they require less capital, fewer labour, low technological knowledge and a little managerial ability to establish. In addition, it generates employment, contributes to rapid economic growth and industrialization, and utilizes indigenous resources. These and many more, make small scale enterprises the life wire of the Nigerian economy.

The roles of small scale enterprises to national economy have also been acknowledged in many other countries of the world such as Malaysia, Japan, South Korea, Zambia and India among others. Empirical studies have shown that small scale enterprises contribute over 55% of GDP and over 65% of total employment in high income countries. They also account for over 60% of GDP and over 70% of total employment in low income countries, while they contribute over 70% of GDP and 95% of total employment in middle income countries. In Nigeria, SMEs have not performed creditably well, and have not played expected significant role in economic growth. They equally have been seen not to influence apprentice training so as to accelerate employment and poverty alleviation in order to foster Nigerian economic development. Meanwhile, negotiation process among managers in small scale enterprises is not as complex as it is in the larger ones and Multinationals.

Managers in Nigeria are those employed to head top-management positions both in the private and public sectors as well as Multinational Enterprises MNEs. However, they are addressed differently with names such as Managing Directors, General Managers, Country Managers, Branch Managers, Departmental/Sectional Managers, among others.

Final Thoughts

Negotiation in Nigeria in the managers’ perspective is quite complex as managers are faced with a business environment that is complex with cultural and ethnic plurality. Howbeit, managers have as critical, the role to negotiate for their establishments. Meanwhile, various links are opened for negotiation. The links or arms opened for negotiation which managers in Nigeria must bear in mind our reach out to avail the organization, a peaceful organization existence include but not limited to:

a. Host communities

b. Suppliers

c. Employers

d. Customers

e. Government

f. Financial institutions

Fig. 3: Negotiation links: Developed by the Author (Okon, 2017)

Negotiating with Host communities

Businesses are located in communities. The most community is at liberty to lease or sell land to organizations who approach them. The process of acquiring land for building business premises requires negotiation by managers. Managers are therefore poised to negotiate for conditions that will not in any way constraint the business in the future.

Again, managers negotiate on the area of social responsibilities to the host community and are supposed to live up to their social responsibilities to avoid conflict or reduce it to the minimum. In Nigeria, it is common that most agreement entered into by companies and host communities are not implemented to the luter. This often results in various serious conflicts where youths in particular form rebel or militia and embark on hostage taking/bunkering. This act originated in the Niger Delta Region while most oil companies operate. However, the ugly incident seems to have cut across the nation in recent times.

The poor implementation of agreement between (oil) companies in Nigeria and the host communities is reported by Agbo (2008) thus: “it was hard to believe that there was where oil was first struck in Nigeria in June 1956. Oloibiri is still a desolate little island, despite some recent reluctant efforts to appease public conscience. The tide had come and gone, leaving dreary signatures on the once glowing town on the banks of ancient rivers that were then super waterways. The banks are now so eroded that, at full tide, the residents can fetch water from just the front of their houses. Some thatched houses were said to have caved in and gone with the tide”.

Agbo went on to say that while the village as the town has become, the only one road has just recently been tarred half-way. Is this not slavery? It is quite sad that Oloibirir oil exploration began in 1956 but the time can only boost of a yet-to-be competed access road 50 years later. Memiluce, the contractor as at the time of the report has quit the site.

The Oloibiri example hence is a living tragedy of the Nigerian situation. It is a minor with which companies including, those owned by the government can see their failed corporate social responsibilities, especially to the host communities. No wonder the youths are reluctant to put down their arms. This is a herculean talks for managers in the negotiation bid with host communities. Similarly, Ero (2008) observed that oil companies do not care about the environment. The complete neglect of the environment which most companies operate and the extent of degradation of these environments continue to trigger militancy and hostage taking of company workers.

Negotiating with suppliers (Purchasing)

The negotiation process has become a more important task in the purchase of goods and services. Negotiation in the purchasing process covers the period from when the first communication is made between the purchasing buyer and the supplier through to the final signing of the contract. Negotiation can be as simple as trying to obtain a discount on a case of safety gloves through to the complexities of major capital purchases. A purchasing professional must aim to be successful in their negotiations with suppliers to obtain the best price with the best conditions for every item that is purchased.

Companies of course, look to reduce their expenditure whilst increasing their purchasing power. This means that managers or their representatives in the purchasing process must display purchasing skills with negotiation principles. As professionals, they have to negotiate increasingly better rates with suppliers whilst maintaining or increasing quality and service according to the organisation’s standard and benchmark. Some companies have long lists of suppliers and would want to compare services among these suppliers. This will determine the companies where the actual purchase could be made (would purchase different items from which required purchasing resources to spend limited time on negotiating the lowest prices). Where a particular supplier offers quality services, it is common to see the purchasing rationalizing the supplier base and enter into long-term agreements with single-sourcing. This offers companies the ability to negotiate significantly lower prices for items. Negotiation can also involves the patronage of few suppliers – either moving away from lowest price scenario to negotiating with fewer vendors to obtain the lowest price with the best service, quality, and conditions. The aim is to reduce overall spending rather than negotiate the lowest price with a large number of vendors, which did not give the best overall result. The negotiated long-term contracts with a few suppliers or vendors tend to enhance a more business partnership relationship between buyer and supplier. The relationship can also save the time of fresh negotiation that may arise in search of new partnership or business deal. In this type of partnership, or relationship, the buyer will encourage the vendor to increase quality service and the vendor knows that by doing this the partnership will continue with a renewed contract with guaranteed sales.

Negotiation in a non-governmental organization may not be quite different from that explained above. However, the process may involve the application of contract rather than direct order as done in a private business undertaking. The contract begins with prequalification through contract bidding and tender process. Non-government purchasing departments continue to offer a range of prequalified vendors a request for quotation (RFQ) for items or services that it wishes to purchase. Thus, there is room for competitive bidding process. The competitive bid process can produce a range of bids and conditions that the purchasing department will evaluate and then award the business. This may or may not involve some form of negotiation. Here, purchasing items or services of significant cost will require extended negotiations to arrive at a final contract. Managers or their representatives must exhibit purchasing professionalism in this type of negotiation to ensure their companies obtain the best price with the most favourable terms. This can be guaranteed through professional training in negotiation skills.On the other hand, purchasing staff in the purchasing department can be trained so that the manager can assign any member of staff to negotiate for purchases. In any case, purchase negotiation should begin with the setting of clear and specific objectives. Purchasing staff should enter all negotiations with clearly defined objectives. Without having objectives the possibility for the purchasing professional to concede on price, quality or service is significantly raised. The negotiator should enter into discussions with the vendor with precise objectives that they wish to achieve for their company. The objective should not be absolute and should allow for some flexibility. However, the negotiator should also ensure that they do not deviate from the objectives and allow themselves to negotiate on areas that were not part of the discussion. For example, a negotiator may have worked with the vendor on their objectives on price and service, but not quality.

Kennedy (1998), Weiss (1993) and Cousins and Benzt, (1994) highlighted managerial roles and functions in negotiation process to include:

1. Focus on the process of the discussion on solutions.

2. Maintain objective attitudes to the solutions.

3. Refrain from considering and judging substantial matters.

4. Determine rules of discussion.

5. Do not allow to interrupt sides’ statements.

6. Release each option from a list of possible solutions.

7. Refrain from negotiating until all points of view are presented.

8. Maintain adequate distance to the conflict.

10. Do not intervene in the situation that does not apply to you as a manager.

11. Be objective – do not take sides.

12. Choose the right moment of intervention – preferably at the request of the parties, necessarily when the situation comes to deadlock.

13. Manage the conflict, but without taking responsibility for its solving.

14. Focus on the future.

15. Concentrate on the facts of the situation.

16. Conduct the mediation session so that each side can present its viewpoint without interruption.

17. Meet with the parties individually, if necessary.

18. Focus on the relationship.

19. Put the agreement in writing.

Negotiating with employees

Negotiating involving employees usually centres on increased salary, incutives and condition of services. Managers are at the position to protect the company. However, the welfare of employees should not be swept under the carpet. Nigeria has witnessed frequent industrial action in both the private and public sector. This therefore is putting managers at a tied corner during negotiation. It is good that managers avoid a situation that may bring about town-tooly.

Negotiating with customers

This is not so complex as customers are not so free in the bargaining process since most businesses have price tags on their products and services.

Negotiating with government

Businesses operating in Nigeria are obliged to operate within the nation’s laws and policies guiding business operation. However, there is room for negotiation, especially when a case is established on ground of default. This may not be a legal tussle but the law making bodies at the initial stage of observing fraud or poor services can invite the company involved. For instance, when MTN Nig. was observed in tax default and poor services, the National Assemblies invited the company. An agreement was therefore struct since that the initial amount alleged to have been own by MTN was reduced and the payment plan was negotiated and agreed. The success achieved can be accredited to the sagacity of the manager.

Negotiating with financial institutions

Managers negotiate to ensure the best condition in which any loan can be obtained and the repayment plan most conducive for the organization final thoughts. Negotiation by managers in Nigeria is still characterized by difficulties due to the complex nature and plurality of the Nigerian culture. The business environment is booed into cultural and political considerations. Nevertheless, the manager is left with options and strategies to adopt depending on the circumstance. Presently, it is observed that the Nigerian business environment needs more attention by mangers, especially in the negotiation table to douse all forms of tension generated due to upsurge of militancy, industrial actions and political influence.

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Tuesday, 10 July 2018

NEGOTIATING WITH MANAGERS FROM AFRICA: THE NIGERIAN APPROACH

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