Negotiation Strategy Planning free essay sample

ISSUE SUBISSUE POINTS (distributing 100 points across allissues) YOUR INTEREST OTHERS’ INTEREST Worker autonomy and target production levels 1.Below avg production level 2.Easy daily production target 3.Loose management control 4.Production target of new facility cannot be fixed in advance 26 1. Increase plant utilization. 2. Increase sales and productivity 3. Keep employees motivated and efficient 4. Achieve more than break even on CAPEx for new facility 1.Motivates to work above targets. 2. Flexible working environment 3. Want to continue their autonomy Group Incentives 1.Incentives too generous 2. Prevailing only at Deloitte but not at other ABC plants 26 1.Avoid loafing 2.Eliminate/drastically reduce incentives Enjoy idle time Escalator clause 1.Unique to ABC 2. CPI adjusted wages 3. High cost to company 16 1.Eliminate it from agreement to reduce cost. 2. Welfare of employees through deferred payment 1. Provides compensation for increasing inflation. 2. Welfare of people of Deloitte Location of new plant 1.Outside because of lower capex 2. Corporate HQ still in Deloitte 3. ABC plant is bread and butter of people of Deloitte 20 1.Low capital expenditure 2.Threat to labor to take consent on other terms 3. Reputation at stake if plant relocated 4. Avoid public relation problem 1.Employment 2. Prosperity of town Wages and benefits 1. Fixed annual wage. 2. Infrequent layoff , 52 week notice period (too long) 3. Much better than industry avg (2x salary) 4. Bonus generously paid 5. layoff notice to 325 employees 12 1.It’s a seasonal industry. Fix wage and low layoff increase cost of operation. 2. Bring cost down to at least industry avg 3. Reduce hourly wage 1.Enjoy greater salary and wages 2. Job security What is your general position in the negotiation? As management, we can frame policies but given the long history of the harmony of management-labor relationship, the position is comparably equal for both parties. It’s the employees that run the plant and Deloitte plant is a major production facility. Why are the above issues important to you? The company is old and started as a family business when the competition was limited. With increasing competition (e.g IFP) and changing industry trends, it is important for ABC to follow industry practices and control cost. This in turn will increase profitability which is necessary for long term success and sustainability of ABC. Due to high cost, almost 200 companies have gone out of business and the only mantra available in industry to stay ahead is to lower cost and increase labor productivity. Deloitte plant accounts for 75% of company’s production and hence is a major game changer. Why do you think these issues may be important to them? The ABC plant is the major employer for residents of the town. Also it has been seen as the best place to work for because of the incentives and benefits it offers. The labor 190 has found the terms and conditions of work very supportive and trusted the management since old times. Change in their old working policies, wages and benefits might result in dissatisfaction for lot of employees. It requires them to shift from their status quo position they have been enjoying since long. What are your sources of power? The Deloitte plant enjoys benefits above industry avg with low productivity levels. There is an option to shift the new plant to other location with HQ office still in Deloitte thus agreeing to Adam Baxter Foundation charter. A shift in plant location will be a major hit to the labor and could be used as a ground for negotiation. What are your opponents sources of power? It’s a union and highly vocal and is influential member of CIO but with merger of unions, the power has diminished. Situational Assessment? The ratification is in the powers of top management and requires majority voting by Local 190 members. It is important thus to reach to an agreement  acceptable to both parties. Following are the MESOS and reservation package from management side: Issue PACKAGE 1 PACKAGE 2 PACKAGE 3 Reservation package Worker autonomy and target production levels  higher than current levels (80%) of productivity with management authority higher than current levels (80%) of productivity with management authority higher than current levels (80%) of productivity with management authority higher than current levels (80%) of productivity with management authority Group Incentives 10% of base pay 5% of base pay 10% of base pay 30% of base pay Escalator clause Eliminate Eliminate Deferred payment Eliminate Location of new plant Deloitte Deloitte Other location Deloitte Wages and benefits $9/hr $9.5/hr $10/hr (fixed) + additional $1/hr if company exceeds industry average production level $13/hr