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Negotiating Action-Learning Plan Paper by Feridun Sarihan

1. Situation Analysis Through my personal, academic and business life experiences the most challenging negotiation was when I was negotiating for promotion and salary increase while working at MEY Alcoholic Beverages Company (now acquired by Diageo). I started working for MEY in 2008 as Sales Planning Specialist at Sales & Distribution Department (Exhibit1) and my main duties were to forecast sales of alcoholic beverages -like Raki, Wine, Vodka, Liqueur etc. -, deliver sales objectives for each sales region and also plan the distribution of these products between MEYs distribution warehouses and customer plants/locations. When we think about the MEYs organization and business structure, I can faithfully say that my job at MEY was extremely strategic and significant for companys success, because every decision for investments, deals and sales strategy was based on the sales forecasts. Before going into the details of phenomena and variables of situation, I would like to introduce myself and my value for MEY Beverages. First of all, I was graduated from Middle East Technical University, Industrial Engineering department and this is one of the top universities and also departments of Turkey. For instance, in Turkey there is a central exam for university entrance and my department admits only top 1% students according to this exam. Overall, I think that I am a hard-working and brilliant employee for MEY. Other than my academic background, I am also experienced in my field and had one year of planning experience at AVON Products in Istanbul Turkey before joining MEY and also had two years of experience at MEY and worked as the most brilliant employee at the department. Overall, with my academic and business background, I was a promising employee for MEY Alcoholic Beverages.

Negotiating Action-Learning Plan Paper by Feridun Sarihan

Here, it is important to talk about the MEY Alcoholic Beverages Companys history and its business.MEY Alcoholic Beverages Company produces, markets and sells alcoholic beverages. Its product category includes raki, vodka, gin, cognac, liqueur, and wine. The company sells its products in Turkey and also internationally. Company was founded in 2004 and is based in Istanbul, Turkey. MEY Alcoholic Beverages Company used to be a public company which is managed by Turkish Government, privatized in 2004. A local holding acquired the company in 2004 for $292 MM and two years later, company was sold to Texas Pacific Group Capital (TPG) US based private-equity firm- for $900 MM(1). In February 2011, MEY was acquired by Diageo Plc for $2.1 Billion (1.3 Billion) to gain a vast distribution network in the fast-growing nation (2). MEY is market leader in every product category and has yearly sales of average $900 MM and $200 MM of EBITDA (earnings before tax, interest, depreciation, and amortization). After introducing me, my duties at MEY and MEYs history and business, the phenomena of the negotiation can be described as my demand for promoting to supervisor position, good salary increase (around 25%) and more power leading a team- and improving my leadership abilities as a result. I was working for MEY since 2008 and had been there nearly for 2 years so I knew that it was the right time to demand this promotion. 1.1 Transcripts After making up my mind about demanding promotion, first step is to share this with my manager, Mr. Serdar Habiboglu (Sales Planning and Operations Manager (SPO)). As being a specialist in the company, it is not a regular way to directly go HR director before going to your manager. The appropriate way to demand a promotion is to first go to manager. Before going to my manager, my strategy was (1) talking about my current situation/performance/progress and

Negotiating Action-Learning Plan Paper by Feridun Sarihan

general issues at department I knew that he would give positive feedbacks- , (2) Talking about how I do in department and declaring my request for promotion. First meeting; with Mr.Habiboglu: What was going in my mind while each person in the conversation was speaking: Be brave, talk about the good things, success and your accomplishments at the department and come to point as soon as possible. What each person actually said: Me: Hi Mr. Habiboglu. Do you know the latest result of sales forecast accuracy success rate? We did it again! SPO Manager: Oh really? This is great Feridun! You know these figures are really important for us since there is new company policy that all of us will be evaluated on the key performance indicators and as you know Great! I caught a good point and also he looks pretty happy today so, it is also right time to talk about the issue. the forecast accuracy rate is the most significant index for us. Me: Yes, I know and really give importance to these figures, try to do my best to get good results and good performance rating at the end of year also. Also, I have my own goals at the department, you know I am working here for 2 years and I really want to be promoted to supervisor position this year.

Negotiating Action-Learning Plan Paper by Feridun Sarihan

I think I deserve this with good results and also , you know, my friends at the department (2 female employees at

department other than me) are pregnant and seems like I will be doing their parts while they are at their maternity leave, this At last I could tell it, I hope he doesnt gets promotion will also be good motivation for my words as a threat because I dont want to me. seem as if I am blackmailing him, because he needs me during the girls maternity leaves and I want to use this but not blackmail. Also, I know I cant get anything without his support. SPO Manager: I hear you Feridun. Up to now, I really enjoyed working with you and you did very well at department especially your success in forecast accuracy and in quality project was very significant. I will arrange a meeting with HR director and maybe Sales Director and you. Your promotion is ok for met but last decision will be given by them, you know the process. Me: Yes, Mr.Habiboglu, I know. I really appreciate your support. So, I will be waiting for the details and time of meeting. SPO Manager: Yes, Feridun. I will let you know.

Negotiating Action-Learning Plan Paper by Feridun Sarihan

It was really promising conversation for me because I knew that if I had my managers support, then it would be easier to Sales & Distribution directors support and HR director would give what I want and the result would be win-win result. First step is always crucial and thought that my first step was successful; also, my colleagues maternity leave and my being only one to do the work at the department was an important part in this success. Second meeting; Sales & Distribution director, HR director, my manager and me

What was going in my mind while each person in the conversation was speaking: I am a bit anxious before meeting, because I am not very well-prepared and my chance to direct this meeting is so low, so this will be like general conversation about my What each person actually said: SPO Manager: As all you know, todays meeting is about Feriduns request for promotion from specialist position to

supervisor position. In every aspect, I support Feriduns promotion since he is very successful at the department and -as he also stated- this will be a good motivation for him while his peers are off for their

promotion and final decision will be given.

Good starting, but I really wonder what HR Director thinks, because he will be giving the final decision.

maternity leave. Sales Director: I agree with Serdar, although I have been at the company for less than 8 months, I heard really good things about Feridun and believe that he should be
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Negotiating Action-Learning Plan Paper by Feridun Sarihan

promoted. HR Director: I know the issue and read Feriduns personnel documents before

coming here, so impressive; however, I am planning to stop promoting employees to supervisor positions if they are not leading a team, so as Feridun wont be managing a Oh no! This was really shock for me; I was team, I cant promote him to supervisor not prepared for this response, thought position. But, I understand his salary everything will be very easy since they need increase me, if they dont promote me, I may quit and something for him, maybe salary increase of there would be no one to do the work at the 5-7%, department which is very strategic nowadays and at most I can do this. department of company. But HR director seems ignorant on this issue, time to remind him about consequences. Me: I can understand you; but, I dont agree that I wont be leading a team, while my peers are on maternity leave, I will be leading all the business at the department and also you should be aware of my academic and work experiences. I think I am very valuable and my salary and position is lower than the industry average when compared with the peers in the industry. you know economic situation request and maybe can do

Negotiating Action-Learning Plan Paper by Feridun Sarihan

Oh no! I didnt have any other job offer and didnt think that I would need it during this negotiation process.

HR director: Do you have any job offer at hand from any other company? Me: No, I dont, but I can bring an offer to you if you need it. I want to be more valuable for my company and also improve my abilities like leadership, having more responsibility. I am not thinking about leaving company. HR Director: I hear you Feridun. Glad to hear that also. I will check your demand with my team again and will look what I can do, but this will be the most I can do. I will let you know by e-mail.

After one week, I got an e-mail from HR director, saying that I got promotion as Senior Sales Planning Specialist, but not a team-leading position and also the salary increase was only 6.5% which was so lower than I expected. 1.2 Key Variables and Facts The major players of this negotiation process are me, my manager, HR director and partly Sales & Distribution director. I can say that my manager and Sales director were at my side but HR director is on the other side. Here are details of relevant players, needs, tactics, strengths and weaknesses:

Negotiating Action-Learning Plan Paper by Feridun Sarihan

Me: I think my major strengths are been working at the company for nearly 2 years, experienced and well-educated, successful results; my main weakness is not being a part of political groups at the company just trying to have good relationships with others. Also, my main needs are to earn more money, to take more responsibility and to gain more power at work. By this way, I will have more chance to prove myself to upper level executive team and also gain social status/prestige. Also, by leading a team, I will have the chance to improve my leadership skills which I will need in the future. SPO Manager: His major strength is being working at the company since the start of the company, he knows everyone and also well-educated, smart and experienced coming from PepsiCo- in the industry; however, his level is lower than the director and this is an important weakness for this case. We get along very well and he didnt want me to leave because he trusted me at the department, not controlling any work of me also sending me to the meetings. Besides, if I leave at the end of this negotiation process, he would be in real trouble since my team-mates were both pregnant at the same time and would leave for the maternity leave. So, this was the worst time for losing a sub-ordinate. In addition to these, a new employee means spending time for searching, training and waiting for him to reach required experience level. HR Director: He is the most important person in decision-group; major strength is being director and upper level than mainly my manager and me, also being at the company since the start of company. Major weakness is sales departments being more strategic for company than HR. His major key success indicator is keeping the employee cost in given budget limits not paying more-, and also wants every employee to be happy and with full performance. His main interests are lower employee cost, lower employee turnover rates and happy employees with full performance.
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Negotiating Action-Learning Plan Paper by Feridun Sarihan

Sales Director: He is the newest one in the company but his power is supposed to be more than all of the other parties at the table but since he is new, he doesnt have power against HR director. He couldnt push him enough, since he was new those times. His main strength is being director of companys most strategic department but main weakness is being new to company and not having enough power. His main need is achieving the yearly sales objectives and low turnover rate in sales department also. 1.3 Key Lenses/Perspectives of Parties in Negotiation In this negotiation there are two parties; one wants my promotion with parallel to my demands and HR director who says No this request. Since, two parties have different perspectives and different priorities, there is a conflict and it is important to come up with a solution which satisfies both of the parties. For example, in my perspective this promotion is the thing that I deserve with my background academic and business- and also this will be an important step in my career progress and I can say that this is a long-term improvement for me. Also, my manager and sales director wants me to perform well and they think that I will be more motivated by getting promotion and this will somehow guarantee my existence in the company for a couple of years since I would be satisfied with my desires and position in the company. My manager was at middle level position and directors position was top level, also their perspective was more on efficiency side and trying to keep my motivation at high level. On the other hand, HR director was seeing the situation from a perspective of efficiency, he wanted me to do the same work with same salary also do the other pregnant girls works while they are at maternity leave, because he had a budget limit. In addition to this, my promotion
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Negotiating Action-Learning Plan Paper by Feridun Sarihan

might be an example for other employees at other departments working with the same title with me, and he thought that if I got a promotion they would also want to get promotion like a domino effect. Maybe he wanted to satisfy my demand but this might cause more unsatisfied employees at the company and more salary increase as well. Overall, both parties have a perspective of efficiency and want to have satisfied employee; the main difference is people my side seeing the efficiency in our Sales & Distribution department, but HR director is seeing the efficiency in all company departments. 2. Actionable Theory and Diagnosis/Interpretation Here, I need to analyze the situation and causes of it by the mean of individual, environmental and organizational criteria. 2.1 Individual Causes In my case there are four individuals; me, my manager, sales director and HR director. Here, I will analyze the individual causes for each, which results in not coming up with a win-win solution. 2.1.1 HR Directors Individual Causes First of all, HR director has his own budget limitation that he has to be in this yearly limit for employee salaries and a promotion means an increase in salary and this a threat for him that may prevent him achieving his yearly performance. If he couldnt achieve his yearly performance objective he may not be able to get yearly bonus or he can get lower yearly performance bonus. Secondly, HR director as everyone- wants to use his power. Promotion decisions is most important tool that he has and he doesnt want to share this power with anyone else and he wants
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Negotiating Action-Learning Plan Paper by Feridun Sarihan

to say No even if it is a reasonable demand; he thinks it is his job to say No. It is nature of the business actually, in most of the companies HR is seemed like a support function, and the HR business is underestimated when compared with the business units such as sales, finance and operations units. Thirdly, HR director wanted to inaugurate new company promotion policy which prohibits an employee to promote supervisor position without becoming a leader of a team. At the current situation, there were my colleagues working with supervisor title and not having a subordinate. 2.1.2 Individual Causes for Me First of all, I was thinking that it is time for me to get a promotion to gain leadership skills and also earn more money. In addition to this, a promotion announcement to all company would increase my power and also my perception on my colleagues. People at the office would think that Feridun is successful and reliable that company decided to promote him at this position. This would mean a higher social status and also higher prestige for me at office also at social life, I would be given more strategic projects and high responsibility and this will help me to show myself upper level executive team and will be an advantage for me to demand higher positions in the future. Secondly, there were too many supervisor level colleagues working at the office and I knew that they were earning more money but doing same job or lower than mine and working less. I thought that was unfair and I should have got the same salary with them. Also, acceptance of my request to be supervisor would be a sign of promoting higher levels in the future and also this would be a reason for me for not transferring other companies.

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Negotiating Action-Learning Plan Paper by Feridun Sarihan

2.2 Organizational Causes Among the organizational causes, the most important one is MEY Alcoholic Beverages Companys being a young company. Actually, before privatization it had been in business for nearly 50 years but it was not managed with a corporate culture, the culture was more public management style and new executive team also was trying to create a new corporate culture for the company. As a result of this intent, the HR team was announcing new company policies and trying to create the new corporate culture parallel to these policies. One of the policies was about the promotion and according to this promotion policy, if you dont lead a team or you dont have a subordinate you cannot be promoted to supervisor position. The main organizational obstacle for my promotion and the conflict is this new corporate policy. In addition to these, there were other specialists in MEY who also wanted to promote to supervisor position and my promotion would be a model for them and they might come up with same demand which would be very hard to satisfy by departments also by HR itself. 2.3 Environmental Causes The major environmental cause for my promotion demand is the average salary rate in the industry. When I made research among my friends who are doing the similar jobs in the similar industries, I saw that most of them are earning more than me and this made me to decide on requesting salary increase and promotion from MEY. Generally, I wanted to be at the same level with my friends and the others in the industry in the manner of salary level and title.

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Negotiating Action-Learning Plan Paper by Feridun Sarihan

Negotiations Methods Used by Each Party The two parties in the negotiation used different negotiation methods; my side used a win-win strategy which is also very useful for both sides when we think about the long-term relationship between me and MEY, also I used parity building method by creating alliances with my manager and sales director. On the other hand, HR director intended to use lose-win method and tried to keep me at MEY with less price increase than the average industry level and also a promotion without providing me a team which I can improve my leadership abilities. (Exhibit2) Tones Used by Each Party During the negotiation process each party used a specific negotiation tone. The major negotiation tones are adversarial, analytic/civil, friendly, respectful, caring and ironic; among these tones I can say that each party used a mix of friendly and respectful tone. Because, each party was aware of mutual need; I need MEY to earn money and afford living my life, on the other hand MEY needed me because they need an employee to forecasting, planning sales and distribution. None of the parties wanted to lose the other and tried to find BATNA to satisfy each other, in case of using an adversarial or ironic tone; they knew that I would start looking for a new job. On the other hand, my using an adversarial tone would cause the negotiations to end and it would cost me my job and start looking for a new job which takes time and also there was no guarantee to find similar job in the market also with the bad economic situation.

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Negotiating Action-Learning Plan Paper by Feridun Sarihan

3. Practical Decision and Negotiating Action Plan In this part I will explain how and why I would do it if I could act/reenact the negotiation. First I will give the possible objectives, negotiation tone, negotiation approach, solution strategy /outcome, tactics/techniques, negotiating tem organization and third parties and contingency plan. 3.1 Objectives The possible objectives according to this negotiation case are: Quit job and look for new one. Accept the offer and go on working at MEY with the new position as usual. Accept the offer, go on working at MEY but showing the upper management that you are not happy with this solution and try to push them my manager and director- to change the offer. Accept the offer, but come up with new request additional to this offer such as a project leadership and increased responsibility or a promise for future leadership positions such as department executive, insist on salary increase with at least 10%. Do not accept the offer, and threat the HR director and my manager with leaving job and they would be in trouble as others at the department would leave for maternity leave for 6 months. Loose some parts of requests such as instead of supervisor position, accept Senior Sales Planning Specialist position but having a subordinate to lead. If I could act/reenact this negotiation, I would use a win-win with expansionary method. Among the possible objectives, the most reasonable and with positive sum outcome one is the option that states Accept the offer, but come up with new request additional to this offer such as a project
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Negotiating Action-Learning Plan Paper by Feridun Sarihan

leadership and increased responsibility or a promise for future leadership positions such as department executive, insist on salary increase with at least 10%. By that option, I would be satisfy my leadership skill improvement demand and also would get a promise to promote to higher positions that can be created in the future. On the other hand, HR director will also be in his budget limits and also wont be violating new HR policy rule. Overall, this objective seems like to be most possible option to be a win-win deal for both of the parties and also best alternative to a negotiated agreement (BATNA). 3.2 Negotiating Tone The major negotiating tones are adversarial, analytic/civil, friendly, respectful, caring and ironic. In this case it is better to use a combination of tones; however, the two of the tones adversarial and ironic is not very applicable in my case. Because, I think the adversarial and ironic tone would be insulting for both of the parties and in case of the usage of these two tones the negotiation process may end and both parties will go to lose-lose situation. Before starting the negotiations those times, I decided the tone to be used should be friendly and respectful to every person in the negotiation. Major reason for this was my being at a lower level than the other people in the negotiation and usage of an adversarial or ironic tone would irritate the other and I can lose my power in the negotiation. They were all my managers and also people older than me and especially in my culture- they expect me to be respectful to them in any case. And also I would expect them to be respectful and friendly to me and otherwise I knew that I would leave the negotiation.

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Negotiating Action-Learning Plan Paper by Feridun Sarihan

Overall, I used combination of friendly and respectful negotiation tone in real case and I still think that it was the right negotiation tone for this case and I would use the same tone if I could act/reenact the negotiation. 3.3 Negotiating Approach Among the negotiation approaches integrative/expansionary win-win, adversarial win-lose, dialogic and internal or external third party- I would use the expansionary win-win method, by using this method all parties will be better off on driving values/interests behind initial position but at the end a win-win deal would be achieved. Here, by accepting the promotion to Senior Sales Planning Specialist position, I would be behind my initial position and objective of becoming supervisor but I would get a promotion and that would be announced to all company which would also increase my perception and power in the company and also I would gain 10% salary increase and that would be a financial earning for me also. In addition to these, I would be leader of a project and this would provide me a chance to enhance my leadership skills, and a promise for future promotion will be an important advantage for a higher possible open position in the future. On the other hand, an adversarial win-lose or third party method is not appropriate for this case because usage of an adversarial method would not be accepted by HR and my manager and sales director would not want to argue with HR director because they also would not want to come to face to face with HR director in the future. Also, third party method is not very suitable for this case because this is was a confidential case and I could not share this process with anyone else, also I was negotiating with the head of HR and even CEO of the company would not intervene in this case -at least theoretically-.
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Negotiating Action-Learning Plan Paper by Feridun Sarihan

3.4 Solution Strategy/Outcome As I mentioned before, my solution strategy/outcome to solve this issue would be accepting the offer, but coming up with new request additional to this offer such as a project leadership and increased responsibility or a promise for future leadership positions such as department executive, insist on salary increase with at least 10%. This would be accepted by all parties because I would still be working at the company and would be leader of project and with a salary increase. Also, this would be acceptable by HR director; he would be in the budget limits and would have less employee turnover rate. 3.5 Tactics/Techniques I would use the win-win method with expansionary outcomes and try to find a reasonable compromise between extremes. In addition to these, I would also try to increase effectiveness of my negotiation one needs power, info/knowledge, skill and ethics for effective negotiation- by increasing my power. I could do this by getting another job offer before starting the negotiation, this would give me another card to use put on the negotiation table. Also, I was negotiating with a difficult person and as stated in Ury (1991), I would not react negatively, step to HR directors side, not reject but reframe, build a golden gate by using HR directors language. These tactics would make me more effective in negotiation process. 3.6 Negotiation Team Organization and Third Parties As negotiation team, I and my manager had a talk about this issue but I didnt talk about this issue with sales director before the meeting, a small talk with him would give me a chance be better organized for the negotiation. Third party usage is not applicable here, because this case

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Negotiating Action-Learning Plan Paper by Feridun Sarihan

should be confidential and that means could not be shared with anyone else other than the people in the negotiation team. 3.7 Contingency Plan In case of an unexpected situation, such as totally refuse of my promotion demand, my contingency plan is to start looking for a new job and quit the current one as soon as possible. 4. Techne and Transcript In this part I will write another transcript of the meeting with my manager, sales director and HR director. Different from the previous time, this time I will talk to sales director about the promotion issue before meeting and also do more research on the potential jobs at the market and get an offer from another company and in addition to these, get information about the new company policy from my friend at HR and overall, I will have more info. What was going in my mind while each person in the conversation was speaking: I will let my manager start the conversation and be very respectful to all parties at the table, I know it will be a hard negotiation but since I have another offer at hand also I know my manager and sales director support me, it wont be a big deal to get a win-win solution. What each person actually said: SPO Manager: As all you know, todays meeting is about Feriduns request for promotion from specialist position to

supervisor position. In every aspect, I support Feriduns promotion since he is very successful at the department and -as he also stated- this will be a good motivation for

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Negotiating Action-Learning Plan Paper by Feridun Sarihan

Good! Everything goes as planned .

him while his peers are off for their maternity leave. Sales Director: I talked about this issue with Feridun before coming to meeting also I heard too many good things about Feridun, we are very pleased with working with Feridun, he is hard working and brilliant and I think that he will be very beneficial

Now it is time to restate my request about promotion with a friendly and respectful

employee for MEY in the future. Me: I really felt honored with hearing my

tone. managers and sales directors thoughts about me. I am proud of being a member of MEY family and my request for getting a promotion will also be a motivation for me while my colleagues are off for maternity leave. I believe that I am ready to get a leadership position and want to do more for my company. HR Director: I can understand you Feridun, but we are planning to announce a new HR

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Negotiating Action-Learning Plan Paper by Feridun Sarihan

It is time to come up with an acceptable solution.

policy about supervisor position promotions and I cant promote you to this position unless you wont be managing a team, also you want to get 25% of salary increase but I have my own labor cost budget limits and at most I can do 5-7% increase.

Coming up with an acceptable solution is better since I will be able to push HR director with a reasonable deal. Also, the offer from other company provides me an advantage and a solid example of my value in the job market.

Me: I know HR will announce a new policy about promotions to supervisor positions but maybe you can do something special for me and a new position such as Senior Specialist and also I can lead one of the sales projects and by this way I can improve my leadership abilities for potential positions in the future. Also, I got an offer from another company and they offered me a salary which is 15% higher than my current salary. Cant you make an increase similar to this one? I just want to get my right salary, which is in line with my market value. HR Director: I hear you Feridun. I will check your demand with my team again and

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Negotiating Action-Learning Plan Paper by Feridun Sarihan

will look what I can do. I will let you know by e-mail. 5. Reflective Praxis Actually, before the negotiating classes and writing this paper, I thought that I did the right thing with just accepting the given offer without coming up with another reasonable solution. However, I understood that I did several mistakes in my real case and although I had significant advantages such as support from my manager and director and maternity leave of my colleagues- I couldnt manage to use them properly. Before starting the negotiation, I thought that if I got the support of my manager and sales director, it would be enough to get the promotion not maybe with 25% salary increase but at least sales supervisor position with a sales planning team- and 15-20% salary increase. However, the reality was not like that..I did several mistakes such as not analyzing the HR directors need, not doing enough research inside or outside- to use during the negotiation, not having a contingency plan or alternative job offer to threat or at least to push the HR director, not having an alternative solution like project leadership or future promise; these were all my mistakes. When HR director sent an e-mail as the result of negotiation, I just accepted this offer and behaved emotionally and was offended. Looking back at the case, I could use my advantages more effectively and pursue the issue and negotiation with a reasonable solution that all parties would accept. Other than my mistakes, I did one good thing in the real case; it was the tone I used during the negotiation. I used friendly and respectful tone and used this tone in every part of the negotiation and I think that this was one of the most significant right things that I did. In addition to these, I followed the hierarchical rules, and my manager was always in the negotiation process.

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Negotiating Action-Learning Plan Paper by Feridun Sarihan

References (1) www.vikipedia.com (2) www.wsj.com

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