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parties to the contract? According to what criteria should they be selected?
11. State what the main tasks and aims of claim management are.
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206
G. Berkel
Negotiation Management
Ingmar Geiger
Every time that the top German government bodies end an extended visit to an
economically important partner country of the Federal Republic of Germany, the
media reports on large-scale business transactions that the accompanying delega-
tion from the national industry has concluded with companies or other
organizations in the host country. Frequently, this type of high profile trip is
primarily used by the companies involved to publicize what a large number of
managers in the supplier company and the customer organization have prepared and
agreed upon in a number of negotiation rounds.
However, the details of what takes place until this kind of high profile conclusion
can be reached remain sealed to even the most attentive observer of the discussion.
The internal assessments of potential projects by the supplier, the income structure,
and extensive preparatory activities in the financial and legal area have been
covered by other chapters in this book.
This chapter deals with the question of which factors have an influence on the
structure and outcome of specific negotiations regarding this kind of project and
how a supplier involved in the project business can use the findings for their
marketing.
This first requires the specification of what characterizes a negotiation in the
industrial plant and project business and which areas of interaction between the
supplier and potential customers we want to and can consider as belonging to the
negotiation with respect to time, personnel, organization and content. This occurs in
Sect.
1
. A specific academic perspective can then be taken regarding the specified
subject under investigation, which is linked to appropriate modeling (Sect.
2
). The
introduced terminology can then be used to present the numerous influencing
factors on a negotiation and its outcomes and to discuss the relevant effects.
Section
3
presents this core part of the chapter. Section
4
provides specific
I. Geiger (
*
)
School of Business and Economics, Freie Universita¨t Berlin, Berlin, Germany
e-mail:
ingmar.geiger@fu-berlin.de
#
Springer-Verlag Berlin Heidelberg 2016
M. Kleinaltenkamp et al. (eds.),
Business Project Management and Marketing
,
Springer Texts in Business and Economics, DOI 10.1007/978-3-662-48507-1_6
207
information on how a future negotiation situation may be structured successfully
for a supplier, as it covers the preparations for a negotiation. The conclusion
(Sect.
5
) wraps up the chapter.
1
Examination of Negotiations in the Industrial Plant
and Project Business
1.1
Characteristics and Definition of a Negotiation Situation
People are constantly negotiating: Spouses negotiate over the distribution of the
tasks in the family, teenagers negotiate with their parents about the time they have
to return home at night, friends negotiate about the restaurant they want to go to for
dinner, unions and employers’ associations negotiate collective conditions for
employees in a certain sector and region, politicians negotiate about legislation,
countries negotiate about trade barriers or even war and peace, and companies
negotiate about business transactions, corporate purchases or the salaries of man-
agement personnel. Despite the sometimes completely different backgrounds,
every negotiation that takes place is fundamentally the same. They are
characterized by the following
features
:
• A negotiation requires
at least two parties
. Negotiations always involve inter-
personal or inter-group processes (Lewicki et al.
2010
, p. 6; Rubin and Brown
1975
, p. 6).
• In a negotiation, the decisions reached by the parties are
interdependent
. In a
negotiation, no party can reach a mutually binding decision, which displays
comparable costs or income with regard to a genuine negotiation result, without
the consent of the other party (Lax and Sebenius
1986
, p. 7; Rubin and Brown
1975
, p. 7).
• In principle, there are three situations in which parties negotiate with each other:
(a) in order to allocate limited resources, such as land, an inheritance or time,
(b) in order to create something new, which the negotiating parties would not be
able to do independently, and (c) in order to resolve a problem or a conflict
between them (Lewicki et al.
2010
, p. 2). What is common to all of these generic
situations is that the parties are attempting to
improve
their
situation
in relation
to the status quo by negotiating with each other (Kutschker
1972
, p. 237).
• Negotiations are necessary if parties are pursuing different interests with regard
to the object of the negotiation, i.e. there is a
conflict of interest
(Lewicki
et al.
2010
, p. 6; Pruitt and Carnevale
1993
, p. 2). If both parties wanted exactly
the same thing, this would only involve a coordination of the joint interests. This
is not a negotiation.
• Interdependent decision-making in negotiations takes place in that parties iden-
tify
demands
and
offers
and are confronted by the same from the counterpart.
Even if the parties involved initially fight for their starting positions and do not
208
I. Geiger
budge, they ultimately give way and make agreement possible by way of mutual
concessions
, i.e. a process of give and take (Lewicki et al.
2010
, p. 7 et seq.).
• Negotiations are held in order to improve the position of the relevant party as a
result of the negotiation result, than would have been the case without the
agreement. A negotiation therefore involves
mutual influence attempts
and
strategic actions
. Strategic actions refer to the fact that both parties include the
likely actions of the other party into their own considerations. In doing so, the
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