• Subject Name : Management

Communication and Negotiation Skills

Communication management is the systematic planning, and monitoring of all the channels of communication within an organization and between the organizations which also includes the organization, management, and dissemination of all the directives relate to communicating within the hierarchies of the organization. Effective communication is the key factor to create trust within the organization. Lack of good communication not only creates havoc and unpleasant working culture but also hampers the productivity and outcome in the organization (Mittal, 2018). The communication barriers which impeded the actualization of effective communication are as under-

Hierarchical barriers- Hierarchies are very important for organizations to function correctly and hierarchies are only connected through communication, communication was raised when two employees of different statuses interacted with one another. The solution to this problem is that the senior members of the staff should regularly take feedback from the subordinate’s staff and emphasizing that honest and constructive feedback will be rewarded. 80 % of the workers who were not satisfied with their direct manager felt disengaged at work. Regular one on one meeting is very important by the line managers (Mittal, 2018).

Problems with workplace layout- the layout of the office can have a wonderful or destructive effect on internal communications which is one of the barriers the company faced. Open-plan offices were designed for effective communications but were started to be used to pack the workers in lesser spaces for reducing costs. A traditional interactive workplace with adequate privacy is the need, thus a semi-enclosed quiet area can be very useful where the worker can work with silence and focus and also open to communication. The best is to ask the employees what kind of layout they feel best for working and communicating.

Politics- our organization has experienced a problem within the employees of saving the information to themselves in the assumption that it will help their career ambitions. By keeping others in the veil, people tried to further their agenda and wanted to rise with this perception. 25 % of the employees do not trust their employers (Raupp & Hauffjann, 2012), thus promoting transparency will not only build trust within the organization but also promote effective communication as transparency is the top factor for the employees to determine their happiness and work satisfaction in the organization.

Language barriers- the misinterpretations related to languages has been a serious communication barrier in our organization, workers form the different specialties use different terminologies that are not easily accessible to everyone. A formal communications policy be announced and made mandatory in case of interaction which will encourage employees to communicate and even curious to learn from each other’s specialty. Encouraging employees to speak slowly and write as simpler as possible and avoiding the technical jargon as much as possible will work wonders for communication. However, listening skills should also be encouraged as communication is a two-way process. 

Geographical barriers- to save the cost and use the international labor market, our organization has started to hire workers from different nations and the geographical barrier has taken a special place against communication (Raupp & Haufjann, 2012). There are certain difficulties with communication when the workforce is geographically diversified. Technology utilization is an effective tool for overcoming such a communication problem as a simple mail behavior will not work when doing multiple projects and can lead to information overload. Using project-specific communication tools with remote employees can also work very effectively. 

Case study

Answer 1. A stakeholder is a party that has a direct or indirect interest in a company or an event and can be affected by the event or the company business. A stakeholder has a vested interest in the company and they can be investor, public, government, trade partners, etc. stakeholders are classified as direct stakeholders who have a direct relationship with the event or the company and indirect stakeholders who do not have a direct stake in the company but somehow will be affected by the actions and operations.

There are several stakeholders that may directly or indirectly affect the decision-making of the procurement. First of all the CEO of NMD limited is the chief stakeholder as he has the supreme power to approve the purchase of NMD or whether to manufacture the material themselves. Mr. Aabid, the CPO is another direct stakeholder who wanted to procure the precipitators at the dream price but with a 40 % increase, Mr. Chowdhary, COO is another direct stakeholder who has only allowed a 20 % increase from the dream price, apart from that, the senior buyer of the NMD who has made the order can also influence the procurement procedure, the two companies who are the competitors as suppliers of the NMD are also strong stakeholders as 70 % of the revenue came from NMD order in the last year. The other stakeholders are the technical persons, engineers who are to manufacture the transformers as cutting the cost can put an additional burden of manufacturing on them. The government no India is also a stakeholder and the vigilance commission who had made a protocol for the procurement process as these institutions could also alter or improve the procurement. The small parts manufacturer of the precipitators that the companies buy from are also the stakeholders as cost-cutting on the orders may hamper their supply of materials to the two companies. 

Answer 2. The main problem with the NMD limited was that the CEO and COO wanted the old price quotations which were not possible for both the companies this year. It was estimated that about 40 % of the price rise will take place in the order compared to the last year. As the CPO Mr. Aabid was curious about the dream price which was the last year's price, NMD was only allowing a 20 % increase in prices. The current manufacturing ability of the company will be costly as compared to procuring the precipitants from outside and there is a strict protocol of procurement from outside by the vigilance commission, which does allow for negotiations only from that company who has bided the lowest price quotations and thus better negotiations scope is very less in these situations. NMD also has to maintain the high-quality standards which had given it the status of Maharatna and several quality systems management have accredited it. 

The suppliers were demanding at least a 40 % increase from the last year’s price, whereas the COO and CPO were wondering for the last year's price which was a loss-making deal for the supplier company and was not possible this year, an increase of at least 40 % has been notified by both the suppliers and still it was 50 % cheaper than the NMD's manufacturing procedure. Thus an effective round table negotiation which can result in a win-win for both the buyer, the supplier, and the procuring company is essential and NMD shall make the best use of the provision of the negotiation set by the protocol and if needed shall contact the concerned government department in case no solution is found.

Answer 3. The CMM of NMD Mr. Chowdhary and the CPO of the company Mr. Aabid discussed the prices of the transformers that could be factored in. Mr. Chowdhary had shared the data of internal costs of the own manufacturing by NMD, he also informed Mr. Abed that with the fact that the manicuring will cost much higher, he had taken the dispensation from the Divisional CEO to purchase the material from outside suppliers through the department of purchase. The assumptions were that Mr. Aabid is of the view that the old price was a dream one-time price and will not be possible this time and a 40 % increase in the prices will be there, still it would be 50 % less than the own manufacturing cost of NMD. Mr. Chowdhary was not agreeing with Mr. Aabid and said that he could only take the current prices in his estimates. They were not in agreement. Mr. Abed reached the CEO but he overruled the plea of Aabid and included Mr. Chowdhary into the procurement procedure, but he made sure that the previous price will not be taken into consideration but will escalate the prices up to 20 % of the previous year's level.

Prima facie, there was no personal rivalry; Mr. Aabid was only concerned about the two companies which had to bear a loss in the previous year. Mr. Aabid had a separate discussion with the engineering manager who assured him of the lesser cost of the transformer. Mr. Aabid instructed his procurement team to increase the price to the minimum. Mr. Aabid was not logical in one of his proceedings which wren based on his gut feeling that Syskatech had booked a loss of 15 % in the last year’s order and he should make every proceeding with proof and paper.

Answer 4. The contract of the NMD is very important for both the firms which make most of the revenues of the firm and Syskatech even bagged the contract last year in a loss just to maintain the contracts relation, Syskatech had a turnover of 531 m $ in last year of which 392 m $ was solely from the single order bagged from NMD, even for this loss-making deal. The other firm technocorp has also faced a loss in a government contract which the senior buyer Mr. Roberto had revealed to Mr. Aabid, and for this loss, the COO and the regional level officers were changed in the technocorp, with this in mind, both the firms have will be cautious and will circumspect in quotation making of the prices for this procurement of NMD. Technocorp has also made available its special oil for the machine at the same rate all over the world just to maintain the competition level on par with others. The manufacturing procedure of both the suppliers is the same and the cost of manufacturing the material is also the same. The companies are the only suppliers in the market for NMD and would want that In place of manufacturing on its own; NMD should give the contract as it will be cheaper for NMD. The evidence of their interests in the contract can be seen by the fact that both the companies are on the same level of technology and manufacturing cost and perhaps will offer a quotation with lower profit to NMD. Such a big contract like NMD’s can complete the sale target of company to a much extent and that is why both the companies wanted this procurement, thus to remain in the contract good books of the protocol of procurement of this PSU, companies even tend to take a contract on loss.

Answer 5. The CPO Mr. Aabid is of the view that the old procurement price given by the company syskatech was a loss-making tender by it and he was apprehensive for the company also that it must not make a loss-making deal for itself and that is why he has separately gone to the CEO who refused to increase the price of tender 40 % but was ready with Mr. Chowdhary for a 20 % increase in price. In my view, I can assume that Mr. Aabid may have a relation with syskatech because such ethics are not generally shown by an officer of a company for the tender making company. On the other side, the tender making procedure of the NMD is not very encouraging for negotiations to have a very lesser place in this procedure, and without negotiations, a dream price which the company thought of getting this year too, is not possible as both the companies had loss-making deals with government contracts last year, had changed their officers and perhaps this change will more focus on profit-making deals.

NMD is expected by me to focus on the final decision making of the CEO and may ask for a roundtable conference of all the primary stakeholders in this deal. However, after the final submission by the CEO, NMD is likely to go with the old submissions of the companies based on their obligations and will try to include new players in the tender procedure as the dealing with these two companies will not be that smooth. Thus the strategy of open tender is in my view, most likely to be taken up by NMD, as all the chances of personal interest or favor are discarded in case of tender opening. A PSU is only liable ethically and legally to the government and ultimately to the public of India and thus the tender strategy will be the best to get the best price of the project.

Answer 6. Syskatech had bear losses in the past tender of the last year of NMD by providing a price which was called the dream price and is expected by some this year too in NMD, but this dealing was only made for the relation maintenance of syskatech with NMD and it cannot give the same price this year, looking at the manufacturing price of NMD' manufacturing procedure which will be 50 % more than both the companies and the fact there is currently no other company with the competing levels of these two companies, these companies may work in unison and may get a minimum price set by themselves to the tender. 

Syskatech can offer the best price available with a minimum profit margin as these types of tender providers should be made long term providers by the company and the company should not look for profit margin per tender and it can initially call for a 20 % up of the last price agreed upon by the CEO and the COO as Technocorp is not much expected to lower the price because its officers have been changed due to a loss-making deal done.

Technocorp has recently made changes in its officers due to the loss of making deals in government contracts. This change in my view is not feasible because the old officers looked long term relation maintenance with such a big buyer like NMD, and thus whatever has been done, technocorp management should instruct its officers to bag the contract by offering low prices and longer-term services if profitable prices are asked like maintenance and repair of machines for some years and free delivery of oil, this offer will be much efficient than the low price offering in my view.

Answer 7. The integrative negotiations or the win-win approach is a collaborative or value-creating approach which is a superior approach in this kind of negotiation where both the parties are opposite in the concern of price. This approach will make this deal feel like both parties have achieved whatever they wanted with the deal. It will result in satisfaction for both parties with regard to the deal. Both parties have to count on the resources which should be divided equally so that both can make a win-win situation. And the main concern should be to maximize the collaborative outcomes (Stoshikj, 2014). This strategy needs to include both the parties in the deal to collaborate on information sharing and should create additional value.

 Both the NMD and the suppliers should collaborate to convince the buyer of the transformers to increase the buying amount on a specific promise of value addition relating to the deal of one or more kinds. For example, NMD shall guarantee the services for free with the quality assurance that it maintains by providing the resources and service by the companies (assuming they have better resources and experience compared to NMD in services) on the guarantee of NMD. With this, the buying price of the deal shall be increased which will be profitable for both NMD and the companies. NMD should divide the procurement units between both the suppliers which will convince them to come into the deal to provide value-added services to the buyer for years. With this, the strategy of integrated negotiations can be effectively used for both the parties, and the third party which is the buyer shall get the value addition of services which will increase his brand in his market.

References for Understanding Strategy in Communication Management

Mittal, S. (2018). Barriers to communication. International Journal of Advanced Research and Development 3(1), 243-245.

Stoshikj, M. (2014). Integrative and distributive negotiations and negotiation behavior, Journal of Service Science Research 6, 29–69.

Raupp, J. & Hoffjann, O. (2012). Understanding strategy in communication management. Journal of Communication Management 16(2),146-161

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