Analysis for business negotiation - Case Study Example

Moreover, this was likely due to the high labor costs in France as well as the increasing inputs of the production process. With this baseline of understanding established, the CEO then went on to elaborate upon how labor costs and inputs within Slovakia are measurably cheaper than in France (approximately 30% on the whole). In such a way, such an approach would definitively save money in the long run. Finally, anecdotal evidence is given with regards to the fact that other large firm such as Peugeot and Sony had recently relocated their operations from France to Slovakia and had experience and measurable increase in overall growth and profitability as a result. 2. How did this CEO communicate to the media the closing of the plant and its relocation to Slovakia from becoming a national issue?

One of the first reasons that any level of media hype is generated is with regards to the level and extent to which leaks of the information reveal a sensational story that the media cannot resist. In such a way, the strategy of closure within this particular case was handled with the utmost care. This was facilitated I insisting that all individuals who were cognizant of these changes sign a nondisclosure agreement and remain very tightlipped within the firm as well as without with regards to the facts that closure was soon it likely to take place.

In this way, once the information was released, the firm had fully anticipated the response and was able to manage the story in a way that did not create a sensation or make stakeholders feel as if they had been kept in the dark with regards to such a decision. 3: What were the negotiating strategies used to reach the agreement? With regards to the negotiating strategies used to reach the agreement of plant closure, these were necessarily concentric around cooperation, analysis of the situation from multifaceted viewpoint, and general secrecy.

Although the first to have been briefly enumerated upon, the general secrecy might necessarily be viewed as a negative aspect. However, the negative externalities of not keeping a closely guarded secret with regards to the means by which the plant would close might necessarily harm each and every stakeholder within the entire process. By making the information known prior to a formal strategy being elaborated upon, the situation would necessarily unfold in and out of hand manner without the CEO or top management being able to be directed in any way shape or form.

From the firm’s perspective, such an eventuality would mean in much higher cost with regards to the payments that they would be due to the labor unions. 4: What are the pitfalls to be avoided when negotiating with the labor union representatives? By engaging early with the labor unions, the firm was able to experience a €1 million savings by reducing costs that would otherwise have been associated with payoffs to the union that were required. This was able to be effected simply by assuring them that all employees 55 years or older would be a able to draw an early pension from the plant shuttering.

In this way a cooperation strategy was employed. Furthermore a bond of trust between the firm and the union representatives was established prior to the shuttering of plant. This was leveraged when the bad news was delivered to the union as a means of creating a situation in which the union