Page 76 - DMGT519_Conflict Management and Negotiation Skills

Conflict Management and Negotiation Skills

Notes 4.5 Need and Importance of Negotiation

Following are the five key reasons that illustrate the importance of negotiation skills (1) the
dynamic nature of business, (2) interdependence, (3) competition (4) the information age, and
(5) globalisation.

4.5.1 Dynamic Nature of Business

Mobility and flexibility are the dictates of the new world of work. The dynamic, changing
nature of business means that people must negotiate and renegotiate their existence in
organisations throughout the duration of their careers. The advent of decentralized business
structures and the absence of hierarchical decision-making provide opportunities for managers,
but they also pose some daunting challenges. People must continually create possibilities,
integrate their interests with others, and recognise the inevitability of competition both within
and between companies. Managers must be in a near-constant mode of negotiating opportunities.
According to Linda Greene, Associate Vice Chancellor for academic affairs at the University of
Wisconsin-Madison, “Many important events essential to professional success and professional
satisfaction happen everyday in the workplace and they are not always announced in advance.”
(The Capital Times, January 1, 2000, p. 1E). In reality, negotiation comes into play when people
participate in important meetings, get new assignments, head a team, participate in a
reorganisation process, and set priorities for their work unit. Negotiation should be like second
nature to the business manager, but often it is not.

Interdependence

The increasing interdependence of people within organizations, both laterally and hierarchically,
implies that people need to know how to integrate their interests and work together across
business units and functional areas.

Competition

Business is increasingly competitive. This means that companies must be experts in competitive
environments. Managers not only need to function as advocates for their products and services,
but they must also recognise the competition that is inevitable between companies and, in some
cases, between units within a company. Understanding how to navigate this competitive
environment is essential for successful negotiation.

Information Age

The information age also provides special opportunities and challenges for the manager as
negotiator.

Globalization

Most managers must effectively cross cultural boundaries in order to do their jobs. Setting aside
obvious language and currency issues, globalisation presents challenges in terms of different
norms of communication. Managers need to develop negotiation skills that can be successfully
employed with people of different nationalities, backgrounds, and styles of communication.
Consequently, negotiators who have developed a bargaining style that works only within a
narrow subset of the business world will suffer unless they can broaden their negotiation skills
to effectively work with different people across functional units, industries, and cultures

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