Negotiation

Negotiation is a process of bargaining with one or more parties to arrive at a solution that is acceptable to all. This process involves five basic steps: Planning Interpersonal relationship building, exchanging task-related information, persuasion, and agreement.

As learnt negotiation takes place between two or more people to meet their means, through process of bargaining, persuasion and followed by the agreement signed by both the parties. This can take place between two or more individuals, businesses, cross border businesses, businesses and governments, and between governments of two countries. Negotiation is step by step process of preparing or planning, bargaining and persuasion, and agreement, the parties also have to look into the cultural, political elements prior to going for negotiation in international business.

The core of negotiation is bargaining and persuasion. Either side would look into it that they do not give away more that it has to, both the sides are aware that concessions also plays an important role in converting the negotiation into a final deal. Bargaining and persuasion is successful only when one side understand the position of other side. Know-how of shared characteristic and differences between them, their abilities to work on alternatives and their readiness to work for a solution.

After bargaining a persuasion the final phase of negotiation is agreement. This is achieved through allowing concession from either sides and preparing an agreement. Negotiations approaching this phase are usually successful, and signed of agreement binds both the parties into a contract. In western countries the agreements are signed immediately after the negotiations are done, while in Asian countries this is believed to be a beginning of long time relationship, and the terms of the agreement can be modified as and when required, with mutual understanding.

Whenever we do negotiation we do it with people and they have emotions, perceptions, personality and communication and all this has a process to go through. These emotions can affect the result of negotiation extremely, producing unsatisfactory outcomes. It becomes very important for negotiation to be successful to distinguish between the people (emotions, perceptions, personality and communication) and problem (objectives).

It is important to understand the interests of other side, as it will help in understanding the other side in well manner, this will also help working on solutions. Concentrating on position of other side can divert the negotiation on wrong directions. Highlighting the mutual gain during the negotiation will help the process of negotiation in correct direction and both the side will work towards solving the problems rather than creating one.

Focusing on objective is core of all negotiations. Both the parties have to agree on that the negotiations will not turn in debate and which divert the main point of negotiation. This mutual agreement between both parties will help in saving time and reaching a successful negotiation process.

Social And Economic Impacts Of Gold Mining

Gold mining is a global industry. Currently, there are more than 600 productive gold mines spread over 70 different countries, and these figures do not include artisanal and small-scale mining operations. Yet, despite the scale and geographic reach of the industry, gold mining’s impacts on economic growth and development are not well understood. Indeed, they are frequently neglected or misreported.

The World Gold Council set out to address this ‘information gap’ and offer the industry’s very diverse set of stakeholders – gold mining companies and their employees, government representatives, community leaders and wider civil society – empirical evidence of gold mining’s socio-economic impacts and a firm set of indicators by which change and progress might be judged.

A research program was initiated resulting in a series of research outputs, including those produced in collaboration with our Member companies, including Newmont, finally culminating in the recently published research report, and the social and economic impacts of gold mining. We believe this work, with its greater scope and more extensive inputs, advances our collective knowledge on the ‘shared value’ created by gold mining.

The findings from this research provide insights into how formal gold mining contributes to:

• Supporting global economic growth
• Supporting the development of host nations
• Investing in people
• Supporting community development

In 2013, gold mining made a total contribution of more than US$171bn to the global economy. Globally, the gold mining industry directly contributed around US$83.1 billion to the global economy in 2013. Taking indirect economic impact into account, this contribution increases to US$171.6 billion. This is greater than the GDP of more than 150 countries and more than the world’s total overseas aid budget.

Gold mining’s direct economic contribution to the global economy has increased seven-fold from 2000 to 2013. This is greater than the rise in the value of gold over the same period.

Total number of jobs that result from commercial gold mining estimated at 4.2 million globally. Globally, gold mining companies directly employed more than one million people in 2013, with three million more people employed as a result of the industry’s suppliers and support services. In most gold producing countries, more than 90 percent of the industry’s employees are local workers.

The report shows that gold mining has made good progress in seeking to develop local human capital and skills. More than 60 percent of the countries covered in the report are low or lower-middle income with substantial socio-economic development needs. However, the report indicates that growth in the economic contribution of gold mining often coincides with a marked improvement in income status of host nations.

70 percent of the value that gold mining companies distribute within an economy relates to payments to local suppliers and employees. The majority of government revenues from gold mining are derived from indirect sources, such as corporate and income tax rather than from money relating to permits and royalties or direct minerals taxes.

Overall, the research presents a picture of an industry that has developed significantly in terms of how it benefits the global economy and helps drive growth and progress at the national and community level, particularly in the developing world.

Of course, the gold mining industry still faces considerable challenges, not least in ensuring the growth and momentum of the socio-economic contributions detailed in this report are sustainable. Furthermore, this is unlikely to be done in isolation, by the gold mining industry on its own. Our ambition for this research is that it may help improve shared understanding around the industry to better inform productive engagement between stakeholders to maximize the growth and development potential of responsible gold mining.

Customerization

A new type of mass customization is redefining marketing and business strategies. Many companies now offer highly customized products in a wide range of categories, including sneakers, coffee, dental products, newspapers, vitamins, bicycles, cars, golf clubs, eyeglasses, garden design cosmetics, and greeting cards. Some companies, such as priceline.com and DealTime.com have customized the price determination process; they let customers specify their own prices and then try to locate providers who are willing to sell at those prices. Companies, such as Dell, establish custom websites (called premier pages) for their business customers, whose employees can then order computer configuration that have already been approved by their companies. These are examples of what we call Customerization, a redesign of marketing from the customer’s perspective. These companies are doing more than catering to new markets or delivering custom-made products at lower prices; they are transforming the practice of marketing from being seller-centric to being buyer-centric. Customerization encompasses more activities and functions than mass customization of products. Mass customization as defined by Hart (1996) is “using flexible processes and organizational structures to produce varied and often individual customized products and services at the price of standardized mass-produced alternatives.”

Both mass customization and Customerization are attempts to provide products and services that better match the needs of customers-they are two sides of same coin. Both are IT-intensive. However, mass customization is IT-intensive on the production side, whereas Customerization is IT-intensive on the marketing side. Also, Customerization is inherently dependent on internet and related technologies as a vehicle for implementing this concept in an economical way.

In developing a strategy for Customerization, a company should be guided not only by customer’s wants and needs that are best satisfied by customized offerings, but also its operational capabilities. Customerization is a critical aspect of the emerging new marketing paradigm, which has enormous implications for a firm’s marketing strategy, and, more importantly, for the entire business strategy and operations of the firm. Fundamentally, Customerization requires and effective integration of marketing, operations, R&D, finance, and information.

Mass Marketing

Mass marketing will never die – as long as there are international brands with mass appeal, this type of advertising and promotion will continue to exist. Those who argue that “mass marketing is dead” are probably getting better marketing results by targeting niche market segments with a defined demographic. This type of marketing is common on the Internet, where search engine keywords are used to attract potential buyers who are looking for a particular product or service. Mass marketing requires lots of money, a cohesive marketing plan and access to mass media, such as magazines, popular websites, national or international radio, and cable television networks. Those who argue that mass marketing is dead will probably not have access to the type of multi-million dollar budgets that mass marketing requires. Instead, they will do smaller marketing campaigns, using Internet websites, blogs, social networking, and word-of-mouth advertising. While mass marketing may be on the wane, companies such as Coca-Cola and Nike use it extensively to retain their brand’s appeal throughout the world.

Here are some known benefits of mass marketing:

• Uses mass media to build brands

• Reinforces a company’s mission statement

• Creates an image, or lifestyle, associated with a brand name

• Gets attention from millions of people

Mass marketing also has drawbacks. This may include:

• Expenses – mass marketing costs a lot of money

• The money spent on ads may not be recouped through sales

• This marketing doesn’t connect with niche audiences

Smaller marketing initiatives can be low-cost or free; often, creative or “guerilla” advertising is used to attract attention without access to radio, TV, etc. For those who believe that mass marketing is dead, finding a niche market and targeting that market segment in ads is preferred over spending a lot of money on a mass marketing campaign.

Great Stories – TATA

Great stories succeed because they are able to capture the imagination of large or important audiences.

• A great story is true
• Great stories make a promise.
• Great stories are trusted.
• Great stories are subtle.
• Great stories happen fast.
• Great stories don’t appeal to logic, but they often appeal to our senses.
• Great stories are rarely aimed at everyone.
• Great stories don’t contradict themselves.
• Most of all, great stories agree with our world view.

Apart from the Seth Godin elements of great/good story the stories should also be:

1. Simple – Good stories are easy to understand. They’re also told in a language that matches the way the intended audience communicates, so they don’t need to spend time interpreting and then absorbing. Simplicity also aides in memorability, because the overall lesson is easy to grasp in summary.
2. Emotional – Good storytelling requires an emotional component. Most of the memorable ones have humor, pain or joy (sometimes all three). If every story were simply facts stated, one after another, most of us wouldn’t listen or remember any of it.
3. Truthful – Not truth in the scientific sense, where there’s an objective fact stated, but true in so far as the tellers believe in what they’re saying and are honest with themselves and their audience about it.
4. Real – Good stories are first-hand experiences the teller actually witnessed. Even if it’s a story that’s passed on generationally, an effective one still has an element of how that story relates directly to the teller, told in the teller’s own words.
5. Valid – Regardless of the audience size, a good story works for any One to one million. It isn’t concerned with how many people can hear it, just that someone, somewhere is listening to it.

TATA

There is a difference between making money for oneself and creating wealth for others. This is the story of a business house that has created wealth for a nation. It is a story of struggle, anxiety, adventure and achievement. This is the story of our pioneers.

Jamsetji Tata, the Founder of the Tata group began with a textile mill in central India in the 1870s. His powerful vision inspired the steel and power industries in India, set the foundation for technical education, and helped the country leapfrog from backwardness to the ranks of industrialized nations.

The Tata group is the only business conglomerate in India which has contributed several leaders of stature to public life. Their leadership and values have guided the destiny of the Group and built a heritage that has made the Tata’s India’s most respected corporate group.

Over the past 100 years, the Tata’s have invested in industries and worked in areas which have been of specific importance to nation building and industrial development. This has been done while upholding the values cherished by the group: innovation, leadership, trust and fair play. In today’s fiercely competitive times, the Tata group has shown that material goals can be achieved without abandoning belief in core values and principles. In a world where values such as commitment, integrity and nationalism are eroding, the Tata group is a sparkling example of how they continue to be the guiding principles of all its endeavors.

The elements of great/good story Godin mentioned which align with TATA are they are true, make promise to the nation to bring in the development and infrastructure, they are trusted, and no contradiction in the stories.

Concluding the blogs on Leadership

Self-Management A leader sets examples that are exemplary. Self-management involves, time management, being motivated, planning. I need to work on my self-management as I lack on time management

Willingness to admit a mistake Human tendency is to make mistakes but the ability to accept and admit that one has done a mistake is courageous.

Time management will help day to day activities and work towards the future. One of the qualities that differs leaders from others is his/her visionary ideas. Concerning about today, now and tomorrow can be mitigated by improving time management.

Staying up to date on the current topics either it’s about global economy or technological innovations, reading books on different and varied topics can enhance the know-how across the globe. This can be achieved only by keeping abreast with the latest news around and improving knowledge on various topics. It is not just in the organizations that we find leaders but also in personal life.

From the above discussions we know the various types of leadership skills that exist. During the research of the three companies i.e. Microsoft, GE, and British Railways, it is clear that most of the organizations follow transformational style of leadership. From the blogs I have shared with you so far we can say that the best forms of leadership styles that nurture inspire and get the most of an individual or an employee is transformational style of leadership. As per the previous blogs we also found out that a leader has a vision and works towards that mission. A leader without a vision does not serve any purpose. Though there are various styles of leadership, it is beneficial for an organization to adapt transformational form of leadership. Working on these leadership blogs, it helped me to give a deep thinking about myself as a leader and the areas that I need to work on to become a good leader.

I would like close to my blogs with one of influential leader in the american history and give brief details about his achievement, information source is from Wikipedia.

Raised in a poor family in small towns of Northern Illinois, Ronald Reagan graduated from Eureka College in 1932 and worked as a sports announcer on several regional radio stations. Moving to Hollywood in 1937, he became a television and film actor, starring in a few major productions. Reagan was twice elected as President of the Screen Actors Guild, where he tried to root out Communist influence. At this time he was an FBI informant, under the codename “Agent T-10”. In the 1950s he was a spokesman for General Electric. Having been a lifelong Democrat, his views changed, and he switched to the Republican Party in 1962. In 1964, Reagan’s speech, “A Time for Choosing”, in support of Barry Goldwater’s presidential campaign, earned him national attention.

Entering the Presidency in 1981, Reagan implemented sweeping new political and economic initiatives. His supply-side economic policies, dubbed “Reaganomics”, advocated tax rate reduction to spur economic growth, control of the money supply to curb inflation, economic deregulation, and reduction in government spending. In his first term he survived an assassination attempt, escalated the War on Drugs, and fought public-sector labor. His economic policies saw a reduction of inflation from 12.5% to 4.4%, and an average annual growth of GDP of 7.91%; while Reagan did enact cuts in domestic spending, military spending increased federal outlays overall, even after adjustment for inflation. During his reelection bid, Reagan campaigned on the notion that it was “Morning in America”, winning a landslide in 1984 with the largest Electoral College victory in history.

Leaving office in 1989, Reagan held an approval rating of sixty-eight percent, matching those of Franklin D. Roosevelt, and later Bill Clinton, as the highest ratings for departing presidents in the modern era. While having planned an active post-presidency, in 1994 Reagan disclosed his diagnosis with Alzheimer’s disease earlier that year, appearing publicly for the last time at the funeral of Richard Nixon; he died ten years later at the age of 93.

Leadership – Part Seven

The common factors of a leadership are:

• They are Principled
• Always set out to change things
• Had thoughts and ideas that motivated others
• They were noticeable.

Leaders get up thinking about tomorrow, are very focused on a group, walk with a collective passion of the entire organization towards a great future and use their talent to widely spread a shared commitment.

Leadership styles can be broadly classified into four categories. They are:

Autocratic Leadership Style In this style of leadership, the leader has all the power. It’s a monarch kind of a system wherein the employees are not considered for any but orders made.

Bureaucratic Leadership Style In this style of leadership the leader strictly abides himself and the teams as per the rules and follows documents for every decision to be taken.

Democratic Leadership Style In this style, the employees are consulted before a decision is taken unison is maintained in any work done.

Laisezz – Faire In this type of leadership, the leader avoids any kind of activity and the complete decision making lies in the hands of the employees.

Some other characteristics other than the ones mentioned above are:

Act on opportunity  Leaders have the tendency to spot an opportunity and work on it immediately. This is an important quality of a leader and the one that separates leaders from others.  

Considerate  Being considerate towards team members and standing against the management to support my team is much needed.  This builds a strong relation of trust between team members.

Inspiring and Motivational Inspiring team members by helping them to realize their own potentials and work accordingly towards the achievement of their goals. When the work being done by the team members helps them to achieve their goals, it is quite easy to motivate them and inspire them. This method helps to attain great results in terms of productivity from the team members.

Decision Making  Consulting opinions from the team before a decision is made builds a strong feeling of being a part of the team, a part of the organization.

To know their team:  When you acknowledge the team members with their names and remember them, it gives them immense pleasure and feel valued by the organization.

Photo credit – http://pixshark.com/good-leadership.htm

Leadership – Part Six

Continuing with GE…..

Looking at the style of leadership that Jack Welsh followed, it seems like it is a transformational style of leadership. As defined above, transformational style of leadership is the one that not only focuses on themselves but also on others. Jack had this energy in him that used to uplift people around him, filled them with enthusiasm and passion. He had the ability to inspire and make people follow him. He had a great vision and always used to increase the horizon to greater heights and also achieved them.

Switching gears to IT, let’s talk about Microsoft….

Microsoft

Bill Gates, the founder of the company, Microsoft, is considered to be one of the greatest influential leaders of the world. He had a vision and worked towards it. Bill Gates was fascinated with computers at a very young age of 14. His fascination and enthusiasm led to building an empire in the computer field. When he was working on the computers, he saw the huge potential that computers had both in commercial and home based environments and thus purchased the rights of writing in MS – DOS and  at a very young age of 23 years, he sold a DOS program of his to Seattle Computers for $25,000. He felt that many people will need to use MS- DOS and this will lead to purchase of the software that he owned. As expected, IBM purchased the rights for MS-DOS from Bill gates and renamed it as PC-DOS. Though his parents were completely against his idea of walking into the path that no one where it would lead to, he still carried on. He has a neurotic desire to excel in whatever he does.

Bill Gates was an authoritative person. He is quite known for having heated board meeting. In his initial ages, when people used to sell illegal copies of his software, he publicly wrote an open letter to all those who were using the illegal copies of MS – DOS. He always breeds an environment of constructive criticism which compels his fellow mates to use creativity for technical problems. Bill Gates gives autonomous power to his managers, by doing so, there is a feeling of my company amongst the managers and they will work in unison to achieve the targets set and use the resources considerably. This was the trust that Bill Gates had on his team members as he always hired the best of the best talent in the town and believed that they can be trusted. He is quite famous for his competitive nature and nurtures a healthy competitive environment in his organization.

Thus, it can be inferred that the kind of leadership that Bill Gates follows is a transformational style of leadership. He adapts himself based on the environment that he is working in, inspires and motivates his team through an environment of constructive criticism.

From the previous blogs, the most prevalent form of leadership in most of the organizations is the transformational leadership style. As defined by Burns (1978) and Bernard Bass (1994) that transformational leadership style is the one that works towards building and shaping the goals of the members thereby achieving a change in the organization. The approach of transformational leader is to instill energy and passion with the members that they work with. Rather than worrying about themselves they show interest in you, motivate you to achieve your goals and achievements.

In all of the examples that we have noticed, all of them had a vision. They worked for achieving a goal. This is what used to excite them every day and made them work harder to achieve their vision. They always thought of the future. All of the above leaders created trust amongst their followers. This helped them to sell a new vision to them and convince them to work for that vision. The final point that makes transformational leaders click in the real world of business is the ability to take charge and lead the team. They constantly instill a very high level of commitment from their followers to the envisioned vision. It seems like they believe that success comes every time there is a commitment towards the vision by the followers.

Leadership – Part Five

Continuing with British Railways….

Mr. R.B. Reid came into power when the British Railways was plagued with crisis and was to be taken over by private companies. Mr. Reid, chairman of BR, had a vision. He wanted the British Railway system to be accident proof as was supported by the British Rail’s Rule Book.  He worked towards his mission and also motivated and encouraged his team to work towards the same. When Mr. Reid took over as the Chairman, there was a lot of non-coherence within the team. He built trust into the team by having a one to one relationship with them. He ensured that every penny used for the British Railways was being used in the right way. He put in different measures ensure that a proper scrutiny is being done to ensure that the many being sanctioned is used for the cause it’s been asked for.

In this case, we see a transformational style of leadership wherein Mr. Reid had a vision and worked towards it. Every time he achieved his goals he increased his vision further. He had the benefit of strong network that helped him to improve the system.

General Electric, Imagination at work

The former Chief Executive of CEO, Mr. Jack Welsh, is a very prominent figure in GE. He not only took GE to the zenith but also showed his successors a way to do so. He changed the model of the company as a whole and revamped it such that it is a leader in whatever it does. Jack Welsh worked on a model that worked to inspire, motivate and encourage its people.  Those are the 4 E’s of leadership which are:

Energy Any employee in GE is fully energized and works to excel in his own capabilities. Right from the top management to the executives all of them work with a zeal to achieve the goals set. This is built in by the team leaders for the lower management who draw their inspirational energy from the top management.

Energizer The energizer for these employees is the one to one relationship that the team leaders have with their teams. This is one of the foremost things every team leader is taught about. Having a one to one relationship with their employees shows that you care for them and are willing to help them in every possible way. By doing so, the employees are highly dedicated and work for the company with lots of enthusiasm.

Edge These are the officials with an competitive edge. They are the ones who have authority and control on critical decisions such as hiring new people, promotions etc.

Execute  This plays the most important role in the leadership model. It is the execution of the activities by the employees to achieve targets and to reach the goal of the company.

All the above mentioned play a very critical role in GE. In one of the interviews on CNBC, Jack Welsh, answering to a question as to how one can become a leader, Jack constantly emphasized on the need of building great teams. He strongly believed that for a success in any organization, team coherence makes all the difference. He also emphasized on the need to energize people. People who have an edge, people who have passion for their jobs, who can change and still continue to go further is what he believes is required to be a leader. He also says that if he had to employ anybody, the characteristics that he will be willing to look at are innovation in him. As per him, a leader is one who is smarter, who is energized, has the ability to get the work done, has an edge and most importantly has a passion for the role. Talking about leadership, he believes that every organization has a mix of people, i.e., in every organization; there is at least 20% of the employees who are highly motivated and will do anything to get the job done and always give high performance, 70% of them who are moderate and 10% of them whose performance is not of any worth. The method that Jack followed in GE to mobilize those 10% of them is by talking to them and helping them to achieve their best. If they do not feel comfortable in the job they are performing, they themselves will realize it and leave.

Leadership – Part Four

Patience No matter how many attempts did a leader make and the number of failures happened, it will never deter a leader. A leader keeps pushing forward and works relentlessly until and unless they reach what they aimed for. This is one of the important characteristics of a leader.

Passionate  In any of the interviews that Kack Welsh, the Ex- CEO of GE, gave, every time he mentions “Be passionate”. A leader is very passionate of his job, about his organization and wants to do something different every time. There is a never dying thirst in a leader to reach the top.

Leaderships in Organizations

A person who has the capability to inspire others to dream more, to learn more and become more is a leader. Leadership in an organization is an action not a job position. A leader does not wait for a problem to come and then work on it but anticipates it and starts working on it before it can cause any damage.  Leadership plays a very critical role in any organization. If an organization excels it is because of the leadership provided by the leader of the company and vice versa. Just being in a high position will not make them leaders. A leader need sot have a vision to work for and needs to motivate his people around such that they are ready to excel their own capabilities to attain organizational goals.  A leader can follow any of the above mentioned theories to motivate his team. But what happens in reality. Are these theories just theories or are they implemented in the real life. Looking at the various companies and their leadership styles following are the observations made:

The British Railways British Railways was a pioneer in railway system. It gifted the world; the most easiest and convenient means to travel across to many places. However, the British Railways was in a complete mess in the 1980’s.Every CEO who wanted to reform the British railway system could not do so as the political influence was very high and the budget allocated to reform the system was sufficient enough. Here, I would like to talk about R.B.Reid who completely revamped the system of British railways, who initially was ruled out to be unfit for the position of CEO.  Many of his successors tried to change the system but every trial of their ended in a vain effort.

What makes R.B.Reid unique was he was from the system. He started his career as an Engineer soon after finishing his MBA studies and gradually grew from there to become the CEO of the company. He had a good rapport with various departments and made good friends.  This nature of building networks helped him to achieve what was impossible for his predecessors. British Railways is a very huge organization with many operational and safety regulations and various obligations to fulfill the statutory requirements of the government.  It was place which was bound with traditions, cultures and history. Mr. Reid being a part of the system from the beginning understood these very well unlike his competitors who were hired from outside the railway system. One of the necessary moves to be made to improve the services of British Railways was to reduce the debt on the organization for which Mr. Reid went on a cost cutting mode. He slashed most of the jobs that were unnecessary and unwanted. Within two years of he taking charge as a CEO, he has successfully delivered productivity improvements and cost reductions magnificently which was never achieved before.  By this he proved his worth and this gave him power to bid for the maintenance efficient rolling stock and the electrification and upgrading of major routes.  He made some major changes in the railway industry such as changing the double routes to a single route and so on and so forth.