01-03-2012, 09:24 PM
Is it possible to avoid this potential conflict through the negotiation process? If no, discuss why; if yes, then which of negotiation styles can be more useful for the supplier to effectively resolve this matter?
Yes with the help of negotiation process this potential conflict can be resolved. In my point of view compromising style will be most suitable for this process.
Compromising Style:
This technique is often known as the “middle ground” approach.
Compromise is a negotiation process in which both parties give up something they want. Whatever one side gets, the other side loses. Neither side gets what they want but both sides make concessions in order to reach a conclusion that is equally acceptable to both.
Current Scenario:
In this current scenario, as such both parties are compel to fulfill the agreement because Supplier Company have fear to lose their 5, 000, 00 Rupees security and on the other side, Textile Company is compel to keep this supplier because of time shortage and heavy workload activities. (Snow) If Textile Company will try to does new agreement with new supplier than it will get material at currently high expensive prices instead of old fixed prices. So both parties should makes cooperation with each other and renegotiation on final decision.
Suggest a “Best Alternative to a Negotiated Agreement (BATNA)” from supplier’s point of view?
If we analysis the situation than the following Alternatives can be generated from the following situation.
Supplier firm can leave the contract.
Both parties can go to Litigation.
Supplier firm can bear minor loss after price adjustment.
Textile Company agreed on increased prices of cotton yarn at current market rate.
Both parties can cooperate with each other and renegotiate the agreement.
Best Alternative to Negotiated Agreement:
However, from the above alternative last one is the best strategy to resolve this conflict because both parties are interested and compel to fulfill this agreement. So for this purpose they should make a renegotiation and Textile Company should agree on increase prices which should be lower than market price so that Supplier Company can achieve its breakeven point. With the help of this situation Textile Company will have got the prices which are less than the current market price and Supplier Company will sacrifice its profit but achieved its loss recover and stand at breakeven point.
Yes with the help of negotiation process this potential conflict can be resolved. In my point of view compromising style will be most suitable for this process.
Compromising Style:
This technique is often known as the “middle ground” approach.
Compromise is a negotiation process in which both parties give up something they want. Whatever one side gets, the other side loses. Neither side gets what they want but both sides make concessions in order to reach a conclusion that is equally acceptable to both.
Current Scenario:
In this current scenario, as such both parties are compel to fulfill the agreement because Supplier Company have fear to lose their 5, 000, 00 Rupees security and on the other side, Textile Company is compel to keep this supplier because of time shortage and heavy workload activities. (Snow) If Textile Company will try to does new agreement with new supplier than it will get material at currently high expensive prices instead of old fixed prices. So both parties should makes cooperation with each other and renegotiation on final decision.
Suggest a “Best Alternative to a Negotiated Agreement (BATNA)” from supplier’s point of view?
If we analysis the situation than the following Alternatives can be generated from the following situation.
Supplier firm can leave the contract.
Both parties can go to Litigation.
Supplier firm can bear minor loss after price adjustment.
Textile Company agreed on increased prices of cotton yarn at current market rate.
Both parties can cooperate with each other and renegotiate the agreement.
Best Alternative to Negotiated Agreement:
However, from the above alternative last one is the best strategy to resolve this conflict because both parties are interested and compel to fulfill this agreement. So for this purpose they should make a renegotiation and Textile Company should agree on increase prices which should be lower than market price so that Supplier Company can achieve its breakeven point. With the help of this situation Textile Company will have got the prices which are less than the current market price and Supplier Company will sacrifice its profit but achieved its loss recover and stand at breakeven point.
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