Negotiation Skills as a Tool for Enhancing Timely Delivery of Material
CHAPTER ONE
OBJECTIVE OF THE STUDY
The objectives of the study are to identify the different methods of pricing and by so doing state the importance of negotiation as one of the means of arriving at a price to pay for goods and services. It is also to high-light negotiation tactics and how effectively negotiation is used in industries.
- To identify various negotiation skills in an organization and their contribution in enhancing timely delivery of materials.
- To identify the resources required to support negotiation planning and execution.
- To highlight on the benefits of a good negotiation skills to the organization.
- To make relevant recommendation on how NOCACO can improve negotiation skills.
CHAPTER TWO
LITERATURE REVIEW
In the philosophy of business, it is the sellers privilege to fix the price at which she/him is selling his/her product in the economics of business, which decision depends on how many buyer can be found who are willing to pay the price, otherwise there is no market. From this angle it could be argue that the buyer makes the prince as a practical matter neither of these positions categorically supported. Business cannot be conducted on the basis of the irresistible of arriving at a multitude agreement recruiting in sales and purchase profit, (1979) said that “no man’s sale is another man’s purchase.”
The supplier must find an outlet for his product and the buyer must find the materials needed by his company, market and prices are not made by quotations or offers, but by actual transaction. There are three general criteria of what a fair price should be it is assumed.
- That price should bear a reasonable relation to cost (i.e. material plus manufacturing cost plus overhead and profit).
- That price is the result of economics condition (supply and demand).
- That price is determined by competition. The purchasing manager must take all these influences into account in his or her analysis of price and in deciding what is the right price for a given products at a given time. In business as in any other negotiation, the first consideration is the substance of the proposition being and counters position from other side. According to Lawrence (1988)” each party has to make his own value analysis of the consequence of accepting versus rejecting what is on offer.”
The buyer who has a need for the good has evaluate whether he will be better of accepting them .the sale must assess the benefit of taking a lower, offer, versus not making the sale. It is essential for a negotiator to be quite clear about what his final positions. For a seller .this is the price and could sell the same amount elsewhere .similar for the buyer, these are price and terms below which he would loss, by buying or could but better elsewhere.
CHAPTER THREE
RESEARCH METHODOLOGY
Having identified negotiation, its importance in purchasing and materials management in NOCACA as well as the purpose of the study as evidence in the first chapter, the researcher in finding solution to these problems and prospects need adequate information as an important tool for research of this nature. The researcher deemed it necessary to follow certain methods or approaches of data collection, In view of research; methodology and design employed in the study are as follows
CHAPTER FOUR
DATA PRESENTATION AND ANALYSIS
This chapter as stated earlier is to present the research findings and analyze the data collected through the questionnaire. At the end the hypothesis proposed for this research will be tested and the assumption made by the researcher would have been pronounced either wrong or right.
CHAPTER FIVE
SUMMARY, RECOMMENDATION AND CONCLUSION
SUMMARY
This research into the purchasing activities of these companies showed that the ability of the personnel department to search for and employ the best and suitably qualified employee for this department is not and easy taste. This is as a result of the fact that for negotiation to be successful a negotiator should have the attributes of a good negotiation and these are generally hard to find in one single human being.
Though most individuals in the department are aware of the benefits and disadvantages of negotiation his not as effectively used as it should be. This is not limited to the company under study alone. Most individuals in Nigeria use negotiation was clearly understood by most employees. And unlike government institutions they do not agree that it is a form of hanging on price slashihg but as means of confirming discussing or bargaining to reach agreement in business transaction. If negotiation is properly used in a fair price the desired quality to get highest profit the price agree is suitable.
Negotiations, as it was discovered does not necessary reduce fraud. This is was because members of those negotiating teams might be fraudulent and might have concluded among themselves to defraud the company.
On the whole it was agreed that planning for negotiation should be clearly stated, and the negotiation team should work towards achieving these objectives.
Important information on materials and supplier alike should be kept for use for future reference. These will ensure the avoidance of competent supplier.
The research shows that negotiating on home ground has a psychological advantage and that negotiation should be used when any of the puerilities criteria for competitive bidding are missing and also when a seller is a sole source of supply or who controls multiple of source that behave in a monopolistic manners.
Furthermore, tactics and strategies to be used non weakness should be exploit by conceal or at least avoid as long as possible having them put to test.
CONCLUSION
From the research carried out, it was found out that one of the most key function of professional procurement is that individuals aspiring to managerial position should be allowed to develop generally administrative and managerial skills for the benefit of the company by making materials quality of the right time and at right price.
Competitive bidding and negotiation are manually exclusively as techniques for arriving at the price to pay. This reflects an attribute long head by traditional theorist that competitive bidding and negotiation are separate techniques, each used under difference circumstances for different reasons. This is true but there is nothing unethical or unprofessional about using negotiation as a follow up to competitive bidding techniques is used to determine price that is, “obtaining the best value every naira spent”
Negotiation on the other hand is used in all situation were one of the 5 pre-requisite contain for competing bidding does not exist. This method is used especially when the time required is too short. The money value involves is too low the number of bidders is inadequate, they are not willing to compare, specification are not clear but vague, the supplier is a monopolist where all these situation exists or prevail the buyer has no alternative than to negotiate hence, negotiation helps in arriving at a price to pay for goods and services. It can therefore be concluded that within the limits obligated by his position to aggressively go after the best price that will mean the least cost under the most favourable conditions available to his firm.
LIMITATION OF THE STUDY
The research encountered a lot of problems in course of carrying this study effectively and efficiently prominent among them are; –
NON DISCLOSE OF INFORMATION
Oil industries in the west particularly in port Harcourt metropolis, do not find it easy disclosing their business particulars to aliens- some of them saw it was as a meeting of dividing their business secrets to outsiders, especially when it comes to finance and saw it away of unmarking their inefficiencies and in capabilities.
INADEQUATE FINANCE
The research being a student and this dependent on relative for financial assistances is greatly limited in her financial trophy firm school to the industry under study in order to obtain relevant information needed. This is rather difficult and taking because of the huge transaction fare spent and the risk involved in roads in trying to get in touch with the purchasing manager who seemed not to be keeping appointments.
TIME CONSTRAINT
Times contributed more to the problems. The researcher limited time was shore between scrambling from information, her regular pressing lectures and other academic works, etc .not withstanding these problems, the researcher is successful in getting information required.
RECOMMENDATION
Based on the findings listed above, recommendations are made when adherers would hopefully benefit the organization in question and in the industry in general.
- Purchaser and supplier need to establish a price mechanism which will protect them against changing circumstances, such as economics, social and political factors
- Purchasing strategy calls at all time for a sound basic of updated information technical, economic, and commercial and it need the support of appropriate techniques such as cost and value analysis tender approval and negotiation. To be backed by good recruitment and a programmes of education and training.
- A buyer should know his supplier, prepare a profile of each supplier from which material has been purchased over the past few years. This should show the type of raw material purchased the quantity and quality. Record the time clasped from date of purchase order to delivery. Note that any rejections because of the materials delivered did not meet specifications. Especially note any short delivers and the resulting action taken includes alternates suppliers of the same types of raw materials which have not been used data. Have the controller department prepare a financial stability analysis for each important supplier. All this will equip the buyer when buying into negotiation with a particular supplier.
- Objective of negotiation should be clearly be stated and the team should work towards achieving these objectives.
- Planning for negotiation is very important after all relevant information needed has been collected, the team negotiation should meet to familiarized itself with the plans for negotiation and the issues objectives and data upon which plans were based the final negotiation strategy and technique and to condition the team for the actual negotiation proceeding.
- When negotiating1the following guideline might be used:
- Aim to persuade, not cajole
- Remember the important of mutual respect and the most negotiation have a futurity.
- Try to execute emotion from the proceeding
- Neither underestimated, non over estimate the other part’s skill, information or intelligent.
- Clearly indicate the potential mutual benefits of the position which you have taken.
- Toughness, competitiveness and firmness are attributing which increase creditability
REFERENCES:
- Baily peter (1989): “Purchasing and supply management” 4th edition, Pitman book Ltd
- Baily Peter and Farmer (1981) “purchasing principle and management” 4th edition, Pitman book Ltd London
- Cellos Pemotin .R. (1989) “Negotiation” A seminar paper delivered at Michalin Nigeria
- Lyson C.K (1989)” 1st edition Mechdonald and Evans series hand book E S Toiler
- Oyeoku 0. K (1986) “Principles of purchasing and supply management” 1 edition pacific publisher Obosi Anambra state Nigeria
- Paul Steel (1986) “Purchasing and supply management “journal of institute of purchasing and supply, April