Project Materials

EVALUATION OF THE APPLICATION OF NEGOTIATION TECHNIQUE IN THE PUBLIC SECTOR ORGANIZATION

ABSTRACT

Any organisation that aspires to create profits in the long run must critically analyse its power and capacity to negotiate. Negotiation is one of the most critical tasks for purchasing experts. It’s also the most delicate and tough because you’re dealing with a seller whose primary goal is to maximise profits. And without appropriate negotiation, there will be no compromise, and there will be a loss of profit. The project work is divided into five chapters. The first chapter introduces the concept, while the second part provides a review of related literature on general purchasing and how it has affected the public sector, such as the Ministry of Health in Owerri. The third chapter outlines the approach and methods utilised to collect data. The fourth chapter presents and analyses the findings. Chapter five contains a summary of the research’s findings, conclusions, and recommendations.

Chapter one

INTRODUCTION

1.1 General Background of the Study

The real world is a gigantic negotiating table, and whether you like it or not, you are a participant. Every day of our lives, we engage in some form of negotiation with another individual or group of people. Sometimes we leave the exercise with the impression that we have received a fresh bargain, possibly because we did not negotiate effectively.

In purchasing negotiations, it is critical to always be aware when negotiating on behalf of their organisation because an invaluable large number of goods and human resources may be at danger.

Negotiation is one of the most critical tasks for purchasing experts. It’s also the most sensitive and challenging. It is delicate because it entails dealing with a seller whose primary goal is to maximise profits and thus price, whilst the buyer’s goal is to keep the seller’s earnings and price within acceptable limits.

DEFINITIONS

Webster defines negotiation broadly as conferring, talking, or barging to obtain an agreement in a business transaction. To be truly effective in purchasing, negotiation must be used in its fullest sense, i.e. as a decision-making process. In this contest, negotiation is a planning, reviewing, and analysing process used by a buyer and seller to establish an acceptable agreement or compromise.

These agreements and compromises cover all facets of the business transaction, not simply the price. Zenz (1994:247) defines negotiation as trading or deliberation that results in an agreement. Negotiation is more than just a pricing debate.

Although price is an important factor in any procurement negotiation, it is only one of many elements that can be discussed between the parties. Legally, any contract must include agreement by the parties on all components of the contract. Thus, in addition to price, negotiations should include a discussion of the transaction’s quality and services.

A cynic once suggested that negotiation for supplies is the art of unscrupulously pursuing the unwilling in order to persuade him to perform the impossible immediately at a loss.

More precisely, negotiation can be defined as bargaining or cantering with others in order to reach an agreement or make an arrangement that is freely acceptable to all parties involved.

Steele (1986:20) describes negotiation as the give-and-take trade process that involves agreeing on and acting on the terms of a transaction. The two parties attempt to consummate a transaction by negotiation.

1.2 Statement of the Problem

This project work is on the evaluation of the implementation of negotiation strategies in public sector organisations, hence the problems are as follows:

1. The Imo State Ministry of Health uses little or no bargaining in its operations.

2. Personnel in this ministry lack the requisite abilities to effectively carry out the negotiation.

3. Many people in the ministry value time and thus prefer competitive bidding and tendering.

4. The ministry fails to recognise the fundamental roles and responsibilities of negotiation.

1.3 PURPOSE OF THE STUDY

i. Determine why people prefer competitive bidding and tendering over negotiation.

ii. To look into the quality of staff in the organisation to see if they have the requisite experience to carry out good negotiations.

iii. To investigate the impact of organisational policies on the use of negotiation.

iii. Determine the roles of purchasing in the use of negotiation strategies in the Ministry of Health in Imo State.

v. Determine the roles and benefits of bargaining, as well as how to increase the organization’s profits.

vi. Determine how and who makes purchasing decisions.

1.4 Significance of the Study

The study is important because it will provide knowledge to public sector organisations about the numerous benefits and solutions to the problems experienced while purchasing offers.

The study is also interested in examining the methods of study. It goes on to recognise the benefits that society derives from negotiation and their role as colleagues.

i. A suitable limited bargaining method increases the likelihood of receiving a fair and reasonable price.

ii. It also assists the supplier in delivering on time and in line with specifications, allowing the organisation to acquire standard quality goods and craftsmanship.

iii. An inspection method will be employed if the material is substandard.

iv. Cost structures may vary as a result of additional amendments.

This research is beneficial to the researcher since it will assist her in meeting the requirements for the award of a Higher National Diploma in the relevant field. Other studies, whether future researchers or not, will find the project to be a beneficial resource in building their own.

1.5 RESEARCH QUESTION.

This study will counter its findings on the following questions.

i. Do personnel at the Ministry of Health consider bargaining as a significant activity, or do they prefer competitive bidding?

ii. Can anyone find an appropriate application of negotiation skills in the Ministry of Health?

iii. Does the Ministry of Health understand the value and role of negotiation techniques?

iv. Do the top officials in the Ministry of Health possess the requisite negotiation skills and knowledge?

v. Can proper bargaining increase the organization’s profits?

vi. Can competent bargaining increase the organization’s profits?

vii. Is trade-off effectively observed and implemented within the ministry?

1.6 Hypothesis.

To fulfil the study’s purpose, hypotheses will be established and employed in data collecting analysis. The research hypotheses are:

1. Hypothesis: Negotiation strength in public sector organisations is low.

Hi: The ability to bargain in the public sector is strong.

2. Hypothesis: Negotiation strategies have no major impact on the purchasing function in the public sector.

Hi: The negotiating sector organisation plays an important or purchasing role in the public sector organisation.

3. H0: The use of negotiation strategies in the public sector is ineffective.

Hi: The use of negotiation techniques in the public sector is effective.

1.7 SCOPE OF THE STUDY

This study focusses on evaluating the use of negotiation strategies. It covers the public sector in the Owerri area, specifically the Ministry of Health.

It focusses its research on the purchasing and material management departments. The findings from their unit studies will be utilised to draw comparisons with other public sectors.

1.8 Limitations of the Study

Negotiation, like any other managerial function, has its own set of problems, which can be internal or external. The external problem can arise when management fails to understand that if the role of negotiation techniques in procurement officers is specified, there will be improvement; however, the study is limited by the following factors.

i. The researcher’s financial constraints limited his visit to the case study firm.

ii. The external ability of the researcher to organise the data to reflect the study’s objectives.

iii. The bureaucracy or due process involved in the interpretation of information.

iv. True constraints in this regard are usually directed towards exam preparation.

1.9 Operational Definition of Terms

Negotiation can be defined as a situation in which business disagreements are resolved. According to Larmer and Dobler (1983), negotiation is a process of planning, reviewing, and analysing used by the buyer and seller to reach an acceptable agreement or compromise.

ii. Trade off: A sacrifice made by both buyer and seller to improve the negotiation processes, thereby limiting the negotiation processes.

iii. Lead time: This represents the time between when goods are ordered and when delivery is completed, as time is critical to the purchasing department.

iv. Fair price: This refers to a price that benefits both the buyer and the seller.

v. Expediting: This refers to moving goods from the supplier to the point of delivery.