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Updated: 14 Dec 2020

Issues in Negotiation: How to Solve a Problem

negotiation problem


This case study shows how two sides can find a successful negotiation resolution by tackling the issues in a creative and mutually beneficial way.

Negotiators can often fail to understand the real underlying issues of a problem. Meaning, these negotiators lack a key insight into what the basis for the negotiation really is. All too often, negotiators don’t train themselves to identify and frame the issues in negotiation to resolve. 

Negotiation skills courses often emphasize that if this crucial first step of the negotiation process is not addressed properly, it’s quite likely that the rest of the negotiation process will unravel. This is because of a lack of understanding of the core issues 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 significant problems in one of their subassemblies.

The Root Cause

The root of the problem revolved around certain types of fittings and pins. Some of these parts were bending and distorting from the operation of the machinery, leading to the issue of damaged units. Quality control then had to reject these units because of imperfections. These rejected components were put aside and then reworked later in the month.

This extra effort resulted in increased costs, as workers had to put in overtime to meet quotas. The issue was, these extra costs were not in the manufacturing budget. The manager of this subassembly line didn’t want to shoulder these overhead expenses, feeling it was not his line’s responsibility.

Likewise, the manager of 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 subassembly department. 

The subassembly department manager countered this argument. He claimed that the parts were in good condition before they left his department. He stated 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 issue. 

The Resolution

Through negotiation questions and open answers, both sides agreed that the subassembly workers had some slack time available each month. The damaged parts were returned in small batches from the final assembly plant. This was so that the subassembly workers could work on these parts during their slack periods. When both sides finally understood the problem, they were able to negotiate a solution that was acceptable to both sides.

Also, when looking at the problem in more minute detail, the managers learned that some of the staff in the final assembly plant may not have full training. These workers may have also been partially responsible for the incurred damage. To further their training, management sent these workers to the subassembly plant. There, the workers learned more about the daily happenings of 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 staff when and where they were most needed. Finally, because of the up-to-date training, there were fewer damaged parts.

Only when both sides finally understood the problem were they able to negotiate a solution that was acceptable to both sides.


One important lesson to draw here is that 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 training courses always includes gaining the necessary negotiation skills to uncover both your own and the other negotiator’s interests, plus their priority.

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4.5 out of 5 from 13 responses
  • 1
    emmiline on

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

  • 10
    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?

  • 11
    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

  • 20
    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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