Q & A Table of Contents
Internal Negotiations -- Where the crucial decisions are made
From: Executive Global manufacturer Hong Kong
Question: How can I analyse a conflict situation, say, when I saw the following situation happen in an office? During the inter-departmental meeting between Accounts and Sales Departments, two heads from these departments discussed the payment terms which are offered by the Sales Dept to the customers. Unfortunately, the terms are not acceptable to the Accounts Dept since they have different objectives. What can be done?
Response: Thank you for your question. It goes to the root of how corporate decisions are made.
Internal negotiations among different departments or members of a team tend to be far more difficult and in many ways more important than external negotiations with customers, suppliers, etc. When a course of action is being decided, the 'internal' stakeholders should reach agreement before a decision is reached.
The kind of problem you describe, where the Sales Department wants to make sales and is prepared to bargain over a broad range of terms with potential customers while the Accounts Department's focus is on an orderly process leading to a favorable cash flow exists in many forms almost everywhere.
It is important for both Sales and Accounting people to think of all the elements that need to be considered to satisfy the needs of customers, the company, and each department. In fact, perhaps that is the appropriate priority against which those issues should be considered.
Clearly it is in the company's interest to present customers strong incentives to do business with you. Both Sales and Accounting exist to further the company's objecctives -- customer service and profitable operations. Each department should try to reach a common understanding of those interests of the company -- and how each department's operations can contribute to the successful attainment of the company's interests.
Thus, as Sales prepares to 'roll-out' a particular campaign -- even if only for a single customer -- it would make sense to do research with Accounting, Purchasing, Manufacturing and any other stakeholding departments to develop a clear understanding of their objectives and interests. Accounting, by the same token, should try to learn about relevant market conditions: what kinds of terms are offered by competitors, demanded by customers, etc. This is called preparation and teamwork.
Clearly these sorts of issues arise with great frequency in every business in a dynamic marketplace. It is the obligation of elements within any company to 'get the corporate act together' before undertaking external negotiations. Preparation is everything.
Good luck and good negotiating, Steve.
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