Negotiation - Case Study

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Case 1 : The Negotiation Problem
This case study shows how two parties can find a successful negotiation resolution by tackling the issues in a creative and mutually beneficial manner.|

One of the biggest stumbling blocks encountered by a negotiator is to clearly understand the real issues as the root cause and basis for the negotiation in the first place. All too many times, negotiators take insufficient time to clearly identify and frame the problem or issues to be resolved and negotiated. This is the crucial first step to any negotiation. If this first phase of the negotiation process is not addressed properly, than it is quite likely that the rest the whole negotiation process will unravel because the core issues were not properly understood at the outset. Let’s look at an example case study which emphasizes the need to define and identify the problem. In this example, a substantial electronics firm face considerable difficulties in one of their subassemblies. The root core of the problem revolved around certain types of fittings and pins that were becoming bent and distorted by the operation of the machinery. Units which were being produced were damaged and had to be rejected because of imperfections. These rejected components were put aside and then re-worked later on in the month. This duplication of effort resulted in increased costs as workers had to work overtime to meet their quotas. These extra costs for the extra work performed had not been considered in the manufacturing budget. The manager of this subassembly line did not want be charged with these overhead expenses because he felt it was not their responsibility. Likewise, the manager who was the overseer of the final assembly department also refused to accept the increased costs to his budget. He argued that the extra costs were a direct result of the poor work of the personnel in the subassembly department as this was where the problem originated. The subassembly department manager countered this argument by claiming that the parts were in good condition before they left his department and that the damage must have occurred in the final assembly manager’s department instead. Both parties had reached am impasse. Some time passed before a resolution to the matter was worked out that was agreeable to both parties. What both parties were really seeking was to find a long term solution to this dilemma. It was only when they truly understood the nature of the problem they were able to negotiate a reasonable solution that was acceptable to both of them. It was ascertained that the subassembly workers had some slack time available during every working month. The damaged parts were returned in small batches form the final assembly plant so that the subassembly personnel could work on them during these slack periods. Also, when they examined the problem in more minute detail, the managers learned that some of the personnel in the final assembly plant may not have been adequately trained and may have also been partially responsible for the damaged incurred. These personnel were identified and were sent to the subassembly plant to further their training and to learn more about what transpired in that department. The resulting solution addressed the increased cost concerns of both departments on the one hand. On the other hand, overtime was reduced by allocating the personnel where and when they most needed and finally, because of the enhanced training, the number of damaged parts was considerably reduced. The lesson to be drawn here is that the two managers were only able to address the problem when they were able to understand the real issues that lay beneath the problem as the cause for their cost overruns.

How Giving Face Can Brew Success
by Dr Bob March
Shows how understanding cultural differences and learning to work within them is the key to successful negotiations. Find out how knowing the importance of giving face in China gained trust and...
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