Negotiation Plan for the Universal Company

PRE-NEGOTIATION PLAN

• ISSUES:

The issues needed to be negotiated are:

1. The reason why the 12 types of modules inspected at the desired level when they left our plant are found to be under quality arriving at the Philips plant.
2. The cost of repairing the faulty parts – Who will bear the cost? How much? As Philips manager’s desire, he would like to claim all of his poor products at Crawley’s expense while this problem is not totally traced by the modules received from the Crawley plant.
3. Overtime cost for Philips workers is due to the delayed production. It is unreasonable to be paid by us.
4. The modules cost $15,000 a week, the longer the dispute can not be solved, the more the expense is. The Philips manager do not want to release the unqualified modules until we accept the responsibility.
5. The solution to ensure the 95 level of acceptance at the time of arrival at the Philips plant. We align with the company policy to take full responsibility of product quality during the shipment and we would like to have the acknowledgement from the Philips plant when they receive the order.

Our primary underlying interests are:

• To fix the faulty modules at no compensation by sending a repair person to the Philips plant.
• To determine the root cause of 12 types of modules, whether due to the stocking or assemble process of the Philips plant.

• GOALS:

• Target point:

• To send a repair person to the Philips plant without any compensation.
• To make an agreement to have the quality acknowledgement of every shipment

• Resistance point: Maximum of 50% of repairing cost which is quoted by our plant (Crawley)
• Offering point: Accept to boost the investigation to figure out the root reason soon and engage in solution for improvement without any compensations at this time.

• PRELIMINARY ASSESSMENT OF PHILIPS PLANT        

• Their target point: to get fully paid for the repairing cost.
• Their resistance point: to be reimbursed for 50% of the repairing cost.
• Their possible interest: they would like to have compensation for the repairing cost, overtime cost and inspection cost.
• Their possible opening: to claim all of their poor quality product is based on the modules receiving from our plant and they have to request their employee to work over time to meet the schedule.
• Their strength: they have the advantage from the evidence that a considerable portion of this problem can be traced to the quality of the modules received from our plant.
• Their weakness:

• They do not want the top management informed about this problem.
• The longer it takes for to be solved, the more overtime cost they have to pay for their employee.
  

• PHILIPS PLANT MANAGER NEGOTIATION STYLE and REPUTATION
  

At the beginning, the Philips manager will blame all their poor quality products on our modules. They will show their inspection evidence that have advantages for them such as their assembling/ production lines which operated properly but because of the error module, the overall quality is unacceptable. They also mention about customer feedback about their products. They are enduring the labor expense due to the late schedule, the inspection fee for investigation, and the useless modules due to the defaults. However, they would like to settle this problem peacefully to catch up with their production schedule and do not want to get the involvement from the top management that the reason why they actively call for a meeting.