Case Study – Negotiations 2
Scenario
Mark is the chief negotiator for the union in his widget factory. There has been a freeze on raises for 2
years during a down economy. Mark will meet soon with Jane, the Chief Exec
...
Case Study – Negotiations 2
Scenario
Mark is the chief negotiator for the union in his widget factory. There has been a freeze on raises for 2
years during a down economy. Mark will meet soon with Jane, the Chief Executive Officer (CEO) to
negotiate a new contract for the union. Mark will ask for salary increases of $3.00 per hour and 2
additional paid days off per year. He is willing to take something less, but will not settle for less than $1.50
per hour in raises and 1 day additional paid days off per year. If the company refuses to make concessions
and meet in the middle, then he will encourage his employees to strike. They are relatively high skilled
and difficult to replace on short notice. The current contract runs out in 2 days, at midnight. Jane has
already indicated a short extension might be necessary but Mark is adamant that no such extension will
be granted. Mark has also decided to send the assistant union leader (Jennifer) as a power play to show
that Mark will only negotiate directly once Jane makes concessions. He has also prepared a press release
for the local papers that is designed to stir panic about the impact on the local economy if the factory
closes. This will pressure the factory to stay…or at least that is what Mark hopes.
Jane is tired of old-school animosities between labor and management. She wants to partner with the
employees for mutual gain. The widget industry is facing increasing competition from cheaper labor
overseas. Jane’s goal is to keep the factory open and all 400 employees on the job. In order for that to
happen they will need to work together to make some changes to the factory. The company will need to
make both product innovations and efficiency improvements if it will remain in business. Jane is willing
to discuss raises and increase vacation time. Her initial offer will be $1.00/hour and 1 day added paid time
off. Jane wants any contractual changes to include provisions that will allow greater flexibility in
scheduling as well as some team-based management practices. While Jane hopes the negotiations go well,
she worries that Mark will try to be a hard-nosed bargainer and maintain the historically adversarial
relationship. Unless that changes, the factory may indeed need to close. She will remind the negotiators of
that if needed. She will also call in a mediator to help the negotiations go smoothly and collaboratively. If
that fails, the contract calls for arbitration. She hopes that won’t be necessary because arbitration is an
adversarial process that may worsen their relationships.
1 Negotiator Mark
Mark is seeking a salary increase of $3.00 per hour and two additional paid days off per
year (Asking Price). He is willing to take something less (his Target Point) but will not settle
for anything less than $1.50 per hour and 1-day additional paid day off (his Resistance Point).
Mark is approaching this negotiation as strictly a distributive bargaining as opposed to
integrative bargaining. Our text says, “distribu
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