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Summary Negotiation and Case Analysis Revision Notes 2021 (BPP)

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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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