Introduction to Negotiation Strategy
At Oak Spring University, we provide corporate level professional Negotiation Strategy and other business case study solution. Winning With Open Process Innovation case study is a Harvard Business School (HBR) case study written by Georg von Krogh, Torbjorn Netland, Martin Worter. The Winning With Open Process Innovation (referred as “Ideas Authors” from here on) case study provides evaluation & decision scenario in field of Leadership & Managing People. It also touches upon business topics such as - negotiation strategy , negotiation framework, Knowledge management.
Negotiation strategy solution for case study Winning With Open Process Innovation ” 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?
This is an MIT Sloan Management Review article. Most research on open innovation has focused on the use of ideas and knowledge from outside the organization in the development of products and services. But openness can be useful for process innovation, too. The authors' research shows that manufacturers can benefit substantially when they look for ideas beyond the factory gates, especially when their operations are already advanced. In this article, the authors analyzed nine years of survey responses from 1,000 Swiss manufacturers, as well as 200 interviews with personnel at the Volvo Group (AB Volvo), a manufacturer of trucks, buses, construction equipment, and marine and industrial engines that is based in Gothenburg, Sweden. Although the authors concede that some companies have good reasons for keeping process innovations concealed, they found that for many manufacturers, such defensiveness deprives companies of a valuable source of ideas for productivity improvement. The authors present six ideas to help manufacturing companies open up their innovation process. The first idea is to encourage factories within a large company to share innovative practices and success stories with one another. Companies that already do this informally, the authors say, can extend their activities with a systematic effort inside their factory networks and lay the groundwork for other open information sharing about processes. The second idea is to focus on the pace of process improvement. The third idea is to recognize that increased use of data access systems leads to greater production cost reductions. Customer relationship management, supply chain management, and enterprise resource planning software systems all require codification of tacit knowledge, which enhances a company's capacity to spread external process ideas and technology to the people who need it. As a fourth step, the authors recommend improving the organization's ability to absorb and implement ideas from external sources. A good way to achieve this, they say, is to establish routines for gathering ideas from external sources and putting them to use. Fifth, the authors advise reaching beyond a company's internal factory networks for inspiration. Finally, they say companies should remember that "nontraditional sources of knowledge may spark process innovation and help overcome difficult problems."
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, clearly understanding the arbitrage . 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 “Winning With Open Process Innovation” 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 (Negotiations options), 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 and other people doing the mediation. According to “Georg von Krogh, Torbjorn Netland, Martin Worter”, 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 “Winning With Open Process Innovation ”, 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 “Winning With Open Process Innovation” can make for an effective negotiation strategy and will make it easier to negotiate with this party the next time as well.
Georg von Krogh, Torbjorn Netland, Martin Worter (2018), "Winning With Open Process Innovation Harvard Business Review Case Study. Published by HBR Publications.
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