Case Study

The Real Negotiation Problem Issue

negotiation problem

Summary

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 negotiators 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 of the negotiation process will unravel because the core issues were not properly understood at the outset.

Let’s look at an example case study which emphasises the need to define and identify the problem. In this example, a substantial electronics firm face considerable difficulties in one of their sub-assemblies. 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 sub-assembly 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 sub-assembly department as this was where the problem originated.

The sub-assembly 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.

Through questions and open answers, it was ascertained that the sub-assembly 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 sub-assembly 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 sub-assembly plant to further their training and to learn more about what transpired in that department.

The resulting solution incorporated the increased cost concerns of both departments. In addition, overtime was reduced by allocating personnel to when and where they were most needed, and finally because of the enhanced training, the number of damaged parts was considerably reduced.

One of the lessons 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 that were driving their cost overruns. To share a perspective into how important understanding the real issues at stake are: the first day of all our negotiation skills courses always includes gaining the necessary negotiation skills to uncover both your own and the other party’s interests, plus their priority.

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3 comments
  • 2
    1
    Sue Ryu on

    An excellent example. Understand the importance of understanding the underlying issues. Good. It seems tthat it did not provide any negotiations discussion that resulted in action – instead after some time passed, the subassembly team worked on looking at the problem in detail. Shouldn't this be suggested, perhaps through brainstorming, after or at the initial mtg. What would happen if they didn't have any slack time. Then the problem will continue to happen. How did they resolve the budget issue?

  • 3
    1
    Munchma Kuchi on

    I'm in the same class right now as Lika Madik. We had a live debate in class to determine the first actions that should have been taken in this case study. Fun Stuff

  • 15
    3
    Jacks on

    This article is a clear indication of the importance that in negotiations, the parties must focus on the issue or multiple issues and not on personalities or people and simply attempting to pass the buck to someone else. This approach lends itself to quick and workable solutions for both parties. Win-win.

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