In order to reverse the current bargaining trends in Africa, it is important that supply chain organisations, professionals, executives and directors move away from price-chiselling practices towards long-term negotiation, said Professor Douglas Boateng, the founder and CEO of PanAvest International and Partners.
Speaking at the Institute of Directors Zimbabwe’s ‘Director of the Year Awards’, Boateng insisted that not only will a shift towards engaged negotiation facilitate organisational success and value creation, but it will also help to move the Zimbabwean supply chain environment in line with industry specific best practice.
One of the most important, but often misunderstood aspects of supply chain management is negotiation, said Boateng. A relative lack of negotiation on the African continent is not only hampering the sustainability and competitiveness of the supply chain industry, but also has a negative effect on region-wide service delivery, organisational value chain performance and broader socio-economic development.
Drawing attention to the findings of a six-year study on director-level perceptions around aspects of supply chain management, Professor Boateng highlighted the differences between negotiation and bargaining, and argued that while “bargaining tends to focus on short-term price-chiselling,” negotiation involves “engaging on equal terms for mutual benefit.”
Unlike bargaining, negotiation “is not about ‘winning’ or ‘losing,’ nor is it about attaining cheaper prices. Rather, since it is seen as the catalyst for building long-term win-win relationships, negotiation is about compromise,” he said.
He further suggested that appreciating negotiation’s strategic importance and involving the right professionals from the outset can assist with achieving win-win value chain agreements and subsequent long-term contracts.