Introduction to Negotiation Strategy
At Oak Spring University, we provide corporate level professional Negotiation Strategy and other business case study solution. Samarco: the role of businesses in empowering people, Portuguese Version case study is a Harvard Business School (HBR) case study written by Rosa Maria Fischer, Paulo Da Rocha Ferreira Borba, Luciana Rocha De Mendonca, Monica Bose. The Samarco: the role of businesses in empowering people, Portuguese Version (referred as “Samarco Rodrigues” from here on) case study provides evaluation & decision scenario in field of Strategy & Execution. It also touches upon business topics such as - negotiation strategy, negotiation framework, Organizational culture, Social responsibility, Strategy.
Negotiation strategy solution for case study Samarco: the role of businesses in empowering people, Portuguese Version ” provides a comprehensive framework to analyse all issues at hand and reach a unambiguous negotiated agreement. At Oak Spring University, we provide comprehensive negotiation strategies that have proven their worth both in the academic sphere and corporate world.
What’s my BATNA (Best Alternative To a Negotiated Agreement) – my walkaway option if the deal fails?
What are my most important interests, in ranked order?
What is the other side’s BATNA, and what are his interests?
Samarco produced iron ore pellets used for making steel. In 2003, the company had a 17% share of the global market of the product. At the time it had 1,286 employees, split between its units in Germano, in the State of Minas Gerais, and Ponta de Ubu, in the State of EspA?rito Santo.The two units were linked by an ore conveyor 396 km long, with a maximum carrying capacity of 15.5 million tons a year. The company's mission was "to be a Brazilian supplier of high quality iron for the global steel industry, creating value for all its stakeholders". In line with this guideline, between 1997 and 2003, Samarco coordinated and financed the Bento Rodrigues Popular Environmental Education program. The aim was to contribute to the development of the community living in the Bento Rodrigues district, by gaining the commitment of the residents for identifying community problems and seeking solutions that might increase local development. In spite of the reach of concrete results, after the end of the direct intervention undertaken by the company, a decline in the participation of the community was perceived, along with the discontinuity of the actions begun. In 2003, the need to build a second ore conveyor provided Samarco with a new opportunity for interacting with the communities. Its prior experience with the Bento Rodrigues Popular Environmental Education Program caused the Environment Manager to propose a new social project concept for the company, called the Social Responsibility Education and Communication Program - PROECOS. This program, to be implemented in partnership with GAIA (Group for Interdisciplinary Application to Learning) had broad objectives: to improve the company's image; to involve the communities in the preparation of sustainable social-environmental projects and to build a network of partners for meeting local demands and proceeding with development actions after the end of the company's involvement in the Program. For other managers, however, simpler technical projects had achieved more satisfactory results and would be more in line with the company's business strategy. So, why not continue to pursue projects already tried and tested rather than betting on such extensive and complex ones? These fierce internal controversies culminated in a dilemma as to whether or not the company's way of operating socially should be changed.
By interests, we do not mean the preconceived demands or positions that you or the other party may have, but rather the underlying needs, aims, fears, and concerns that shape what you want. Negotiation is more than getting what you want. It is not winning at all cost. Number of times Win-Win is better option that outright winning or getting what you want.
Options are the solutions you generate that could meet your and your counterpart’s interests . Often people come to negotiations with very fixed ideas and things they want to achieve. This strategy leaves unexplored options which might be even better than the one that one party wanted to achieve. So always try to provide as many options as possible during the negotiation process. The best outcome should be out of many options rather than few options.
When soft bargainers meet hard bargainers there is always the danger of soft bargainers ceding more than what is necessary. To avoid this scenario you should always focus on legitimate standards or expectations. Standards are often external and objective measures to assess the fairness such as rules and regulations, financial values & resources , market prices etc. If the negotiated agreement is going beyond the industry norms or established standards of fairness then it is prudent to get out of the negotiation.
Every negotiators going into the negotiations should always work out the “what if” scenario. The negotiating parties in the “Samarco: the role of businesses in empowering people, Portuguese Version” has three to four plausible scenarios. The negotiating protagonist needs to have clear idea of – what will happen if the negotiations fail. To put it in the negotiating literature – BATNA - Best Alternative to a Negotiated Agreement. If the negotiated agreement is not better than BATNA then there is no point in accepting the negotiated solution.
One of the biggest problems in implementing the negotiated agreements in corporate world is – the ambiguity in the negotiated agreement. Sometimes the negotiated agreements are not realistic or various parties interpret the outcomes based on their understanding of the situation. It is critical to do negotiations as water tight as possible so that there is less scope for ambiguity.
Many negotiators make the mistake of focusing only on the substance of the negotiation (interests, options, standards, and so on). How you communicate about that substance, however, can make all the difference. The language you use and the way that you build understanding, jointly solve problems, and together determine the process of the negotiation with your counterpart make your negotiation more efficient, yield clear agreements that each party understands, and help you build better relationships.
Another critical factor in the success of your negotiation is how you manage your relationship with your counterpart. According to “Rosa Maria Fischer, Paulo Da Rocha Ferreira Borba, Luciana Rocha De Mendonca, Monica Bose”, the protagonist may want to establish a new connection or repair a damaged one; in any case, you want to build a strong working relationship built on mutual respect, well-established trust, and a side-by-side problem- solving approach.
According to
Harvard Business Review
, there are three types of negotiators – Hard Bargainers, Soft Bargainers, and Principled Bargainers.
Hard Bargainers – These people see negotiations as an activity that they need to win. They are less focused less on the real objectives of the negotiations but more on winning. In the “Samarco: the role of businesses in empowering people, Portuguese Version ”, do you think a hard bargaining strategy will deliver desired results? Hard bargainers are easy to negotiate with as they often have a very
predictable strategy
Soft Bargainers – These people are focused on relationship rather than hard outcomes of the negotiations. It doesn’t mean they are pushovers. These negotiators often scribe to long term relationship rather than immediate bargain.
Principled Bargainers – As explained in the seven elemental tools of negotiations above, these negotiators are more concern about the standards and norms of fairness. They often have inclusive approach to negotiations and like to work on numerous solutions that can improve the BATNA of both parties.
Open lines of communication between parties in the case study “Samarco: the role of businesses in empowering people, Portuguese Version” can make for an effective negotiation strategy and will make it easier to negotiate with this party the next time as well.
Rosa Maria Fischer, Paulo Da Rocha Ferreira Borba, Luciana Rocha De Mendonca, Monica Bose (2018), "Samarco: the role of businesses in empowering people, Portuguese Version Harvard Business Review Case Study. Published by HBR Publications.
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