Purchasing and material management has evolved over the centuries and takes on many roles in the acquisition and the supply chain. One of your task as a supply chain managers is the ability to negotiate. Accounting to Monzcka (p. 480) “we define negotiation as a process of formal communication, either face-to-face or via electronic means, where two or more people, groups or organizations come together to seek mutual agreement about an issue or issues”. Negotiation is a skill which takes time to develop as it consists of five phases you must master to be prosperous in this business, these skills just don’t develop overnight. It’s a talent countless in this profession pursue, the power of negotiation is a vastly sort after skill various organizations. …show more content…
People believe as soon as a contract is awarded that’s the end of the process. Not true, awarding a contract is just the starting point. A contract must be managed for the life of the contract to make sure both parties adhere to the terms of the contract and don 't deviate from the procedures and guidelines of the contract. There are numerous elements of a contract you will learn. Also, there are two types of contract you will manage two being (1) Fixed-Price Contracts and (2) Cost-Base Contracts. Per Monczka (p. 528) “fix-price contract, the price is stated in the agreement does not change, regardless of the fluctuation in general overall economic conditions”. However, on the flip side, in cost-base contract the price is not stated in the agreement. Cost-base contract price is determined by the level of the economic risk the suppliers might incur by honoring the contract. This could result in purchaser receiving lower cost if they included in the contract the terms and conditions the suppliers are required to meet. Cost-base contracts are used more for expensive and complex purchase. The key to selecting which contract to use is determined when negotiating with the supplier. Also, you need to decide whether to us a long-term contract or short term contract. You will learn more about contract management with …show more content…
With purchasing service your emphasis is on transporting a product and indirect spending. In the 1970s the US Government stepped in to help manage transportation by deregulating transportation. The deregulation made transportation more efficient in the US and increase competition because companies were no longer worried about regulations. This also brought about a lot of new companies how took the leap of faith and entered the transportation and logistics industry. There are several means of transportation such as (1) motor carrier, (2) rail, (3) air, (4) water, and (5) pipeline out of these five rail transportation can be the cheapest. Most organizations outsource their logistics requirement to a third-party who handles all the particulars of transportation. Per Monczka (p. 646) “Indirect spending continues to receive growing attention from top management of both large and small corporations”. Indirect spending is an area that should be managed efficiently. You never want to do maverick spending as you need to spend your organization 's money in a hasty
Lewicki, J. R., Barry, B., & Saunders, M. D. (2011). Essentials of negotiation (5th ed.). New
The negotiations were successful! An agreement was reached and I got the job! This success was due in large part to the extensive planning prior to the negotiation with Robust Routers. Planning is critical to a successful outcome when negotiating (Lewicki, Saunders & Barry, 2011). This was especially true in negotiating this job offer as the bargaining mix included items as varied as state of residence, salary and even stock options. Also of great benefit was that both sides realized that the while the outcome was important the relationship would be protected and even strengthened as a result of our collaborative negotiation (Lewicki, Saunders & Barry, 2011).
Michael R. Carrell, C. H. (2008). Negotiating Essentials: Theory, Skills, and Practices. New Jersey: Pearson.
Negotiations styles are scholastically recognized as being broken down into two general categories and those are distributive bargaining styles and integrative negotiation styles. Distributive bargaining styles of negotiation are understood to be a competitive type of negotiation. “Distributive bargaining, also known as positional bargaining, negotiating zero-sum, competitive negotiation, or win-lose negotiation, is a type or style of negotiation in which the parties compete for the distribution of a fixed amount of value” (Business Blog Reviews, 2011). This type of negotiation skill or style approach might be best represented in professional areas such as the stock market where there is a fixed goal in mind or even in a garage sale negotiation where the owner would have a specific value of which he/she would not go below. In contrast, an integrative negotiation approach/style is that of cooperative bargaining, or win-win types ...
My negotiation style questionnaire indicated that my negotiation style was collaborating and accommodating. In addition, I will not avoid negotiation. I felt the result was reasonable because I like negotiation and have never avoided negotiation when I have a chance. I always try to enlarge the size of the pie to be negotiated. However, the class taught me I sometimes accommodated too much and missed a chance to create value in the end. One of the reasons is that I am afraid of getting nothing and overly cautious. This leads me to compromise before maximizing the pie. I believe I can take more risks to create value.
Lewicki, J. R., Barry, B., & Saunders, M. D. (2006). Negotiation: Readings, Exercises and Cases (5th ed.). New York: McGraw Hill.
Lewicki, R. J., Saunders, D. M., & Barry, B. (2010). Negotiation: Readings, exercises, and cases. New York: McGraw-Hill Irwin
Lewicki, R., Saunders, D.M., Barry B., (2010) Negotiation: Readings, Exercises, and Cases. 6th Ed. McGraw-Hill Irwin. New York, NY
During this course, I have learned a lot about negotiating. We learned about almost every negotiating technique there is. We learned about cross-cultural negotiations, body language, Best Alternative To a Negotiated Agreement (BATNA), variables in negotiating, and many more. Before this course, I did not know that much about negotiating. I thought that negotiating was just about trading or convincing someone to give you what you want and you did not care about the other side, resulting in a win-lose. I now know that negotiating is about getting what you want, but also giving the other side what they want as well to result in a win-win. This paper is about how I am going to improve my negotiating skills over the next six months. In order for me to improve my negotiating skills, I believe I need to improve the following skills- my body language, communication, planning, and my interpersonal communications. By improving those skills, I can become an effective negotiator.
The topic for my real world negotiation is to come to an agreement with my supervisor for a promotion as well as an increased salary. I currently work as a student assistant at the student services Planning, Enrollment Management, and Student Affairs (PEMSA) department. My goal is to increase my hourly pay from $10.15 to $12.70, a 25% increase. Having worked in this department for three years, I have taken on tasks not part of my job description such as processing return mail, data entry, and supervision.
Integrative negotiation is often referred to as ‘win-win’ and typically entails two or more issues to be negotiated. It often involves an agreement process that better integrates the aims and goals of all the involved negotiating parties through creative and collaborative problem solving. Relationship is usually more important, with more complex issues being negotiated than with Distributive Negotiation. Integrative negotiation is the process of defining these goals and engaging in a process that permits both parties to maximize their objectives.
Negotiation has been used as a vital communication tool not only in business but also in social intercourse. It helps people make common agreement and avoid conflict. So we need to use the tactics which we learned from this course and books to do more practice, only in this way we can gain advantages in negotiation.
Lewicki, R. J., Barry, B., & Saunders, D. M. (2007). Essentials of Negotiation. New York: McGraw-Hill/ Irwin.
Amazon’s coopetition-based business model is based upon collaboration and with collaboration there is a certain level of inherent negotiation required. “A collaborative strategy is one in which both parties consider the relationship and the outcome to be equally important” (Saunders et al., 2013, p. 22). As described earlier, this collaborative approach has only strengthened Amazon. They believe they can win by letting their competitors win also. Not only this, Amazon is also adding value to the organization with this logic. “As customer value is increased when there are a variety of competing offerings in a similar domain (Wang & Xie,
Negotiation approaches are generally described as either distributive or integrative. At the heart of each strategy is a measurement of conflict between each party’s desired outcomes. Consider the following situation. Chris, an entrepreneur, is starting a new business that will occupy most of his free time for the near future. Living in a fancy new development, Chris is concerned that his new business will prevent him from taking care of his lawn, which has strict requirements under neighborhood rules. Not wanted to upset his neighbors, Chris decides to hire Matt to cut his grass.