Australian Ideal College

Registered as Australian Ideal College Pty. Ltd.

ABN: 15 126 592 756
RTO No.: 91679 CRICOS Provider Code: 03053G
Campus: Level 8, 75 King St, Sydney NSW 2000 Australia
Tel: +61-2-9262 2968 Fax: +61-2-9262 2938
Email: admin@idealcollege.com.au
Educating for Excellence Website: www.idealcollege.com.au

Negotiate budgets and financial plans

Question 1
Consider a work/school or home situation in which you needed to negotiate an outcome. Describe the negotiation:
1. What happened?
2. What was the outcome?
3. Could the outcome have been considered win-win?
4. Describe how you would conduct the negotiation today. What changes would you make?

Question 2
Consider the Dolly’s Delight strategic goals and operational plans (see Appendix 3 in Student Workbook). Identify
stakeholders for budget discussions involving sales and production cost centres.
1. What potential issues might arise that would require negotiation?
2. Describe how you would approach these negotiations.

Question 3
Explain how you can prepare a successful negotiation.

Solution
If a major disagreement needs to be resolved, however, it can be worth preparing thoroughly. Think through the following points
before you start negotiating.
Goals - What do you want to get out of the negotiation? What do you expect the other person to want?
Trades - What do you and the other person have that you can trade? What do you each have that the other might want? What
might you each be prepared to give away?
Alternatives - If you don't reach agreement with the other person, what alternatives do you have? Are these good or bad? How
much does it matter if you do not reach agreement? Does failure to reach an agreement cut you out of future opportunities?
What alternatives might the other person have?
Relationships - What is the history of the relationship? Could or should this history impact on the negotiation? Will there be any
hidden issues that may influence the negotiation? How will you handle these?
Expected outcomes – what outcome will people be expecting from this negotiation? What has the outcome been in the past,
and what precedents have been set?
The consequences – what are the consequences for you of winning or losing this negotiation? What are the consequences for
the other person?
Power – who has what power in the relationship? Who controls resources? Who stands to lose the most if agreement is not
reached? What power does the other person have to deliver what you hope for?
Possible solutions – based on all of the considerations, what possible compromises might be reached?

Question 4
Define and briefly explain the terms ‘win-win strategy’ and ‘win-lose strategy’.

Solution
Win-win strategies aim to meet the needs of both paties, not to win positions or gain victories at one party’s expense.
Both parties are satisfied with the settlement negotiated. The win-win strategy succeeds only if both parties
concentrate on problem-solving strategies and on communicating well. They must negotiate the situation on its
merits and base all bargaining on the interests of both parties. Each party is then more likely to be committed to the
outcome.

Win-lose strategies result in the party who initiates the conflict being satisfied and the other dissatisfied. This staregy
focuses on the initiator’s problem to the exclusion of the other’s. the initiator wins. Many people who adopt this
staretagy use a confusing presentation or a dominating style of speech and body language. This invites the other
side to be just as difficult, or to withdraw from conflict.

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 Australian Ideal College
Registered as Australian Ideal College Pty. Ltd.
ABN: 15 126 592 756
RTO No.: 91679 CRICOS Provider Code: 03053G
Campus: Level 8, 75 King St, Sydney NSW 2000 Australia
Tel: +61-2-9262 2968 Fax: +61-2-9262 2938
Email: admin@idealcollege.com.au
Educating for Excellence Website: www.idealcollege.com.au

Question 5
Joe is the human resources officer of a firm that is going through a period of cost-cutting. Joe sees the need to create
a new position and appoint a highly qualified and skilled person for it.
The new position will require a person who can travel throughout the state, liaise with staff and establish close links
with the firm’s clients to achieve a more clients to achieve a more client-directed service.
Joe realises the cost of this appointment is not acceptable to the firm, bur believes it is vital for the form’s growth. Joe
prepares to negotiate with his manager, Beth. She has been told by her divisional head that no more staff can be
employed unless the new position will make a real difference to the firm’s performance. In their last meeting, her
divisional head said. ‘Remember, don’t be soft when your staff ask you to make a new position. Unless it is essential,
we can’t afford it’.
a. Define Joe’s problem.
b. What are the resources of potential conflict in this situation?

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