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Introduction
In term of negotiation, there is more than one definition. Negotiation is a process that two or more parties are practicing to achieve a certain goal or need (Fells, p.3). Another definition of negotiation is a global social activity that helps to resolve an issue between two or more firms, governments, management, etc. To approach an outcomes that all parties will be satisfied on the agreement that been achieved (Thompson, Wang & Gunia, 2009).
According to (Lewicki, Saunders & Barry, 2011) Negotiation occurs for several reasons; first of all, an agreement for how can each party divide, share a restricted resource for example, time and a piece of property. Second, creating something new to share that a party cannot do by his/her own. Third, creating a solution for an issue between two parties. Regarding our case, both parties have an issue with their own supplier/producer and both want to find an alternative seller/buyer to keep the business on track.
Process
I was prepared for the negotiation by setting my main points and how to work with other parties since my main focusing points were on getting better deal than the previous producer who suspends the supply of the processors. The previous supplied product cost is $21 per unit and our target was to achieve lower than that by starting price of $15 per unit. Also, to get the maximum quantity number of stock that is no less than 15,000 units. However, they countered our offer by their initially price of $45 per unit. This caused a little confusion because of the big gap difference of both starting prices. The agreement after a long negotiation was on $32 per unit of 15,000 units.
Learning
There are many research cited that, the first offer from the seller is strongly related to the final agreement (Chertkoff and Conley, 1967 and Galinsky and Mussweiler, 2001). Therefore, the higher offer in price is always suggested in order to result in a high price end of agreement (Thompson, 2008, p.13).
Reference
Fells, R. (2010). Effective negotiation. (2nd ed). New York: Cambridge.
Lewicki, R., Saunders, D., & Barry, B. (2011). Essentials of negotiation. (5th ed). New York: McGraw-Hill.
Thompson, L., Wang, J., & Gunia, B. (2009). Negotiation. Annual Review of Psychology, 61(1), 491-515. Retrieved from http://www.annualreviews.org.libraryproxy.griffith.edu.au/doi/full/10.1146/annurev.psych.093008.100458
Thompson, L. (2008). The truth about negotiation. New Jersey: Upper Saddle River. Retrieved from http://books.google.com.au/books?id=y9X5hAWl6mAC&printsec=frontcover&source=gbs_ge_summary_r&cad=0
J.M. Chertkoff, M. Conley Opening offer and frequency of concessions as bargaining strategies Journal of Personality and Social Psychology, 1 (1967), pp. 181–185
NEED FIX
A.D. Galinsky, T. Mussweiler First offers as anchors: The role of perspective-taking and negotiator focus Journal of Personality and Social Psychology, 81 (2001), pp. 657–669
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