Negotiation Strategy Article Analysis
Organizational Negotiations – MGT/445
Negotiation Strategy Article Analysis
The several negotiation strategies include collaboration, accommodation, competition, and avoidance (Lewicki, Saunders, & Barry, 2006). Depending on the situation, one strategy may be more effective than another strategy. Two such instances in which different negotiation strategies were applied are Negotiating New Vehicle Purchases (Craver, 2005) and Town Settles Mall Suit (The Daily News of Newburyport, 2010). A review of each article, including the application of negotiation strategies and a compare and contrast analysis, will highlight the differences from each scenario.
In Negotiating New Vehicle Purchases (Craver, 2005), the competitive strategy is used. The article walks through six negotiation stages encountered when purchasing a car. The goal of the article is to prepare the buyer for the dealership’s tactics and maximize the buyer’s negotiation power. The first negotiation phase begins before entering the dealership by determining the true dealer cost for a vehicle. The second negotiation phase begins the discussion with a salesperson over price. The third phase reviews how to react when the sales manager rejects the offer and the salesperson attempts to raise the agreed-upon price. The fourth phase begins negotiation over trade-in values, when applicable. The fifth phase moves into negotiation financing, and the sixth and final phase is negotiating any add-on dealer fees. At the end of the negotiation, the buyer is poised to emerge with the highest return on the smallest investment.
In Town Settles Mall Suit (The Daily News of Newburyport, 2010), the Seabrook Planning Board used a combination of the avoidance and collaboration strategies. The article lists the events leading to a negotiation in which Developers Diversified Realty (DDR) wanted to purchase 47 acres of land to build a mall. The DDR had attempted to gain approval for the land sale and mall construction for more than four years, but the Planning Board previously had denied all requests and refused to negotiate. The DDR filed a lawsuit against the Planning Board in 2010 and the Planning Board set a meeting for November 2010.
In the negotiation, the Planning Board held a closed-door meeting and did not allow any comments or questions from the public. The ending agreement was that the Board approved DDR to purchase the land and build the mall in exchange for DDR dropping their lawsuit and funding road enhancements to the major roads around the mall. The Planning Board at first refused to provide the negotiated details to the public, but once released, the estimated cost for the road construction to DDR under the agreement is $3.156 million.
Compare and Contract
The first article, Negotiating New Vehicle Purchases (Craver, 2005), described a competitive negotiation strategy whereas the Town Settles Mall Suit (The Daily News of Newburyport, 2010) described a combination of avoidance and collaboration. The strategies have different approaches and tactics. The competitive style focused on a win-lose outcome, but the collaboration style focused on a win-win. The reason for the different styles is the situations have different goals. In the car negotiation, the buyer is attempting to maximize their profit, but in the mall negotiation, the city and realty firm are attempting to find a mutually beneficial arrangement.
The Planning Board in the mall negotiation used the avoidance strategy until DDR filed a lawsuit. The lawsuit gave DDR negotiating power and gave the Planning Board a reason to collaborate. Had DDR not filed the lawsuit, the Planning Board could have continued avoiding. In the vehicle purchase, both parties have something to gain from the transaction so the avoidance strategy does not apply. The same positive results would not be obtained had each scenario used a different negotiation style.
Application in My Work Setting
The competitive, avoidance, and collaboration styles are applicable in my work at different times depending on the situation. In price and service negotiations, understanding when and how to approach a client is critical to the success of the negotiation. Some clients approach all vendor negotiations with the competitive style, and I must acknowledge and react accordingly. For example, if I respond to a competitive negotiation with a collaborative style, my company will not receive a beneficial agreement.
The two articles provide excellent examples of different negotiation styles. The car negotiation uses the competitive style, whereas the mall negotiation uses the avoidance and collaboration styles. The styles have different approaches, tactics, and strategies, but both are effective for different situations. The negotiation strategies are applicable in my work, especially for price and service negotiations with clients. Understanding the different strategies through analysis is a critical tool in successfully applying the styles to everyday negotiations.
Carver, C. B. (2005). Negotiating new vehicle purchases. The Negotiator Magazine. Retreived from http://www.negotiatormagazine.com/article275_1.html
Lewicki, R. J., Saunders, D. M., & Barry, B. (2006). Negotiation (5th ed.). Boston: McGraw Hill
The Daily News of Newburyport (2010, November). Town Settles Mall Suit. Retrieved from http://www.tradingmarkets.com/news/stock-alert/ddr_town-settles-mall-suit-1288694.html