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By Richard A. Luecke
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Extra resources for Best Practice Workplace Negotiations
Demonstrate an interest in the other side’s well-being. • Develop a convincing argument for why the other side’s position will hurt him or her. Assuming that anger or negative emotions are no longer fueling the other side’s irrational position, use the time-out to craft a logical argument for why his or her position is self-destructive. For example, in a labor negotiation, you might lay out a clear calculation of how higher wages will reduce profitability and the company’s ability to provide future benefits and job security.
To get an idea of what the business was worth, they hired a business appraiser, who looked at the revenues and earnings of Nikolex, and how much people had paid for comparable restaurants in the area. “I think that you should be able to get between $800,000 and $900,000 for this restaurant in the current market,” he told them. Using the appraiser range as a guide, the two owners agreed to © American Management Association. All rights reserved. org/ 32 BEST PRACTICE WORKPLACE NEGOTIATIONS put Nikolex up for sale, but privately agreed that they would not entertain offers of less than $750,000.
Because of their greater bargaining power (there being few OEMs relative to a greater number of competing suppliers), these manufacturers squeezed their suppliers for price concessions, usually by playing one firm against another. Fearful of losing business to a rival, suppliers cut prices to the bare bone. The result was a classic win-lose situation in which the stronger OEMs gained at their suppliers’ expense. In the short-run, this approach to contract negotiations worked. But in the long run it created financially weak supply companies that could not afford investments in quality control or innovation.