M 4
Select Page

Case Study

Updated: 10 Oct 2019

The Real Negotiation Problem Issue

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.

There is one big stumbling block negotiators often encounter. Some negotiators fail to understand the real underlying issues beneath a problem. Therefore, some negotiators lack a key insight into what the basis for the negotiation really is. All too often, negotiators don’t take enough time to identify and frame the issues to resolve. This is the crucial first step to any negotiation.

If this first phase of the negotiation process is not addressed properly, then it is quite likely that the rest of the negotiation process will unravel. This is 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 large electronics firm faces considerable problems in one of their sub-assemblies.

The Root Cause

The root of the problem revolved around certain types of fittings and pins. Some of these parts were becoming bent and distorted by the operation of the machinery. Units that were being produced were damaged. The units then had to be rejected because of imperfections. These rejected components were put aside and then re-worked later on in the month.

This extra effort resulted in increased costs as workers had to work overtime to meet quotas. These extra costs had not been considered in the manufacturing budget. The manager of this sub-assembly line did not want to be charged with these overhead expenses. The manager felt it was not his line’s responsibility.

Likewise, the manager who was overseeing the final assembly department also refused to accept the increased costs. He argued that the extra costs were a direct result of the poor work of the sub-assembly department. Since this was where the problem stemmed from, he argued, this department was the one at fault.

The sub-assembly department manager countered this argument. He claimed that the parts were in good condition before they left his department. He specified that the damage must have occurred in the final assembly manager’s department instead. Both sides had reached an impasse.

Some time passed before both sides could reach a resolution. What both sides were really seeking was to find a long-term solution to this dilemma. When both sides finally understood the problem, they were able to negotiate a solution that was acceptable to both sides.


Through questions and open answers, both sides agreed that the sub-assembly workers had some slack time available during every working month. The damaged parts were returned in small batches from the final assembly plant. This was so that the sub-assembly personnel could work on these parts during slack periods.

Also, when the problem was examined in more minute detail, the managers learned that some of the personnel in the final assembly plant may not have been fully trained. These workers may have also been partially responsible for the damage incurred. These workers were sent to the sub-assembly plant to further their training. There, the personnel learned more about what transpired in that department.

The resulting solution combined the increased cost concerns of both departments. In addition, the managers were able to reduce overtime. The managers achieved this reduction by allocating personnel to when and where they were most needed. Finally, because of the enhanced training, the number of damaged parts was considerably reduced.


There is one important lesson to be drawn here. The managers were only able to address the problem when they understood the real underlying issues driving their cost overruns. To share a perspective on how important understanding the real issues at stake is: the first day of all our negotiation skills courses always includes gaining the necessary negotiation skills to uncover both your own and the other negotiator’s interests, plus their priority.

1 Star2 Stars3 Stars4 Stars5 StarsRate this Article
4.2 out of 5 from 9 responses
  • 0
    emmiline on

    ok so in an instance your told to describe the real issue of the case study how will you go about it

  • 4
    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?

  • 5
    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

  • 16
    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.

  • Leave a Reply

    Your email address will not be published. Required fields are marked *