Negotiation role play - Universal Computer Company

In our negotiation role play, I was given the role of the Crawley Plant Manager.

As mentioned in the article "Three Approaches to Resolving Disputes: Interests, Rights, and Power",  "questions of who is more powerful turns on who is less dependent on the other".  In the case study, on one hand, the Crawley Plant manager seemed to be in the power position in the negotiation because the Phillips Plant was dependent on the Crawley plant to supply the modules, so therefore Crawley had a good amount of power.   However, looking at it in a rights-based way, it seemed that the Phillips plant clearly had the right to expect quality parts from the Crawley Plant. This made it difficult for me to take a power-based position in the negotiation.

Both parties in this dispute had a mutual interest in having a higher acceptance rate for the modules. Crawley's interest would be to sell more parts to Phillips without the expense of taking bad parts back or having to repair bad parts.  Another interest of Crawley would be to maintain a good reputation. Ultimately, it was in both companies' interest to get the parts into the Phillips plant with minimal faulty parts, so that production can continue and customers can be served.

As this negotiation played out, the four criteria to compare costs and benefits were apparent.

The first criteria was the transaction costs.  For the Crawley plant, agreeing to a high acceptance rate would be a higher transaction cost for Crawley.  However, at the Phillips plant there was the loss of production and so that was a high transaction cost for them.  Our final agreement tried to balance the transaction costs between the two parties, with Crawley agreeing to a higher acceptance rate on the parts that weren't typically falling below the 95% rate, and agreeing to a reasonable acceptance rate on the 12 parts that were failing at a higher percentage rate.

The next criteria was satisfaction with outcomes.  In our negotiation, both parties were satisfied with the results because it seemed fair and both parties agreed to take some responsibility for the faulty parts.

The third criteria, effect on the relationship, was taken into account during the negotiation.  Since the two plants must continue to work together and because both plants' ultimate goal is for the Universal Computer Company's products to be sold, we were careful during our negotiation not to alienate the other party.  We often used statements such as "I understand your need for that", or "we both want the same thing" to convey our understanding of the other party and to keep the relationship intact.

The fourth criteria, recurrence, was taken into account in our final agreement, in which Crawley agreed to revisit the issue down the road and make any changes to the agreement that might be necessary.

Overall, I think that our final agreement was more interest-based than power-based or rights based, and we came up with a win-win solution in the end.