A negotiation is an engagement between one party and another with the aim of reaching into an agreement. The main essence of the negation process is to enable two or more sides with diverse views on an issue to adopt a central point of agreement (Lewicki, Barry & Saunders, 2003). This paper will describe my negotiation process with a car dealer. My company was planning to buy a new fleet of cars for its staff and also dispose some of the old ones to a car dealer. The managing director appointed me to engage in the negotiations with the car dealer and come to an agreement on the terms of sale.
Description of the Situation
My company wanted to buy seven new cars for its staff at a wholesale price since it was buying a large number. Additionally, the manager had requested to exchange some of the cars with the car dealer as a trade in. The car dealer was uncooperative on the two issues and was unwilling to accept any terms beyond what they give to retail customers. The car dealer was strict to his retail sales price and his policy of discouraging trade-in. The aim of my negotiation was to request the dealer to accept the terms of our offer and work allow at least the trade in if not the price.
The first day I made contact was fruitful since I was able to approach the main manager of the car dealership agency with the proposed terms. I presented my case and the manager presented his terms which he defended. On the second day of my meeting with him, I presented the idea of trading in with his new cars which he sought to know how many old cars and their description. The next meeting was to convince the manager to consider selling at wholesale price instead of the retail price. After further negotiations, the dealer finally agreed to sell the cars at retail price but with a 2% cash discount.
The final amount settled after the negotiations was the amount net of the value of older cars traded in. As much as we did not achieve our request for wholesale price, we were able to get a trade in and a 2% profit. This is the main objective of any negotiation process since the two sides involved have the temptation to stick to their original thinking styles. With the new price being agreed upon, we ended the negotiation process with the car dealer. Finally, t, my company went on to complete the agreement by buying the cars and giving the trade-in.
The first mediation strategy I used is the mediation strategy. In representing my company, I was being a negotiator on my company`s behalf. This is because the mediation strategy involves involving in a conversation between the two sides (Lewicki, Barry & Saunders, 2003). Despite being on the side of the company, I also acted as a mediator between the company and the car dealer. This method works best when the issue being meditated upon will result in mutual benefit. In my case, the sale of the seven cars was beneficial to the car dealer due to the increase of his business margins. We benefited from the purchase of the cars for use by staff at the same time disposing the old ones. This made the strategy effective for my company and the car dealer were able to come to a mutual benefit.
The second strategy I used to be integrative mediation. This strategy involves a set of tools or strategies to improve or build on an already existing agreement or a previously negotiated agreement (Lewicki, Barry & Saunders, 2003). In this case, my main objective was to improve on the company`s stipulated terms of sale. Before the negotiations, the company`s terms were to sell cars at retail only with no any discount and no trade-ins. However, through my negotiation engagement with the car dealer, a new deal of buying the cars at 2% discount to trade in was agreed. This way, the integrative negotiation strategy was effective in achieving a favorable compromise for both sides.
The final negotiation strategy I used to be a collaborative style of negotiating. Collaborative negotiation involves engagement by the parties to the negotiation in a manner that appreciates and understands the concerns of the other negotiating partner (Lewicki, Barry & Saunders, 2003). In my case, I used this style by understanding the strict terms of sale that the car dealer had. This is the reason why I did not carry out the negotiation on the very first day. This also helped me to understand the policy and regulations of the company before negotiation. The second and the subsequent meetings were therefore aimed at understanding the interests of the car dealer. This strategy was effective because before introducing the element of trade in, I had learnt the dynamics of the car dealer.
Recommendations for Future
In handling a similar situation in the future, the company could have sent a team of negotiators other than just one person. I feel that in the negotiations, there could be more strength in having a negotiating a committee with the car dealer. This is because the numbers in a committee will make the car dealer have a feeling that he was negotiating with an organization. This is because corporate and business community respects other business organizations other than just individuals. Therefore, a committee of negotiators is more effective than one person. This is because a committee has a bigger corporate image with more diverse views than just an individual.
Secondly, the company should prepare an auction for the old cars. An auction is a form of negotiation where those interested will be requesting a product or service at a specific price. With the used cars having been sold to the highest bidder, the company could then have used the money to buy the new cars. It could have been even more effective if the management had issued tenders to several car dealers from which to buy from. From the bids, the management would then pick the lowest bidder who automatically becomes the lowest negotiated price.
The case described involved a typical negotiation from a business environment set up. It is the negotiation engaged between me on behalf of my company and the car dealer. The negotiation process adopted collaborative strategy, mediation and integrative strategies engage the car dealer. The case was a fruitful negotiation process because both my company and the car dealer came to an agreement. However, the company could have organized a committee to negotiate or could have involved auctioning and tendering. Additionally, the agreement reached between the two parties was beneficial to both of the parties. This makes the process one of the best tools of solving any organizational conflict, and business transaction negotiations.
Lewicki, R., Barry, B., & Saunders, D. (2003). Negotiation. United States: Califonia, McGraw