At the fruit and vegetable section, the lady approaches the seller in one of the stalls and says she wants to buy a pomelo as requested by her kids. She then asks for the price of the pomelos on display. A middle-aged man, the storekeeper, says the pomelos cost P85 apiece. The buyer says she will buy one if the seller can sell one pomelo for P70.
The man replies that he cannot decide so he will have to ask his wife, who is the boss and store manager, if the price the buyer was bargaining for is okay. The man comes back and tells the buyer that the boss said a piece of pomelo has a minimum floor price of P80 only.
The lady thanks the seller, leaves and approaches a nearby stall that is selling the same items at the fruit and vegetable section. The storekeeper starts to negotiate with the lady who asks the former his price offer for the pomelos on display. The seller says his pomelos are sold at P75 apiece but he is willing to sell at P70 per piece if the lady will buy at least two pieces.
The customer buys two pomelos which she paid P140 for. She shows her kids the fruits, telling them she bought the pomelos for P70 each. Her kids are thankful that she was able to find the fruit that they asked for, but she could have bought just one so she can use the money to buy other items.
The foregoing illustrates two simple situations that people experience as they go through negotiations in their daily lives. In attaining goals, the actors in certain cases unmindfully or carelessly commit missteps and lapses.
For unwitting participants, the mistakes could be unintentional or honest. Although in many instances, the lead negotiators deliberately make moves that lead to the achievement of objectives that are personal or for another group they represent.
Back to the case of the pomelos, the lady buyer acted as the lead negotiator for her kids and had the freedom to make decisions. On the other side, the first storekeeper had to ask his boss if he could sell the pomelos at P70 a piece. In short, he cannot decide or negotiate on his own.
The negotiation failed when the price of a pomelo was pegged at a floor price of P80 a piece. Having the freedom to walk away from a negotiation that reaches a deadlock opens avenues for counterpart negotiators who have a greater freedom to decide.
At the second fruit stall, the buyer’s honest mistake was that she decided to buy two pieces of pomelo at P70 per piece without telling her kids, the group that she was representing in the negotiation. As articulated by her kids, she could have saved money for other items if she bought just one piece of pomelo.
Certainly, there are lessons that negotiators can pick up from the foregoing situations to make negotiations more effective. This is especially significant when private corporations are required by law to share their gross earnings with communities that host their companies.
But first, negotiators should be prepared as one body that is negotiating for the interests of the organization that is representing, not just a small part of the community, but the whole domain. Smaller political units may organize another set of negotiators who may not necessarily be members of other levels of negotiators to avoid mixed demands.
Preparation by an organization whose members have common demands is crucial for a successful negotiation as compared to a negotiating panel that has members who have hidden interests. In such a situation, the members of the negotiating panel could end up opposing each other’s proposals.
Building trust is a rule that should be considered by all parties when negotiating for demands. With this, one’s position becomes stronger. When negotiators are strong, they develop the strength to walk away when necessary. This means, nobody will be regretful nor can be blamed for agreements that can no longer be amended and have to be carried out in a span of time.
Commitment around the negotiation table should also be considered. The party representatives of a company that is offering goods to its host community in order to operate should not show acts of limitation to negotiate. If the company representative does not have a wide discretion, he should be replaced.
In many instances, companies employ the “take-it-or-leave-it” negotiation strategy. But offers of companies to host communities should be negotiable. If this happens, the representative of the host community should ignore this tactic and make a counter proposal instead. But then, there are instances when community representatives give way for unknown reasons.
There are times when companies make offers that need no counteroffers. It is a bait. This situation makes the host community representative reduce his demands. In a similar scenario, the company makes the offer to other community members. This is a common but dirty tactic employed by companies.
When the offer is accepted without “passing through” members of the negotiating panel, the negotiation becomes a “divide-and-conquer” situation where members of the same party will be bidding against each other.
I have seen this happen and this continues to be employed as I write. No need to mention names, but I am sure those who are active participants in ongoing negotiations know well their own selves or who I am referring to.
