Introduction
The Chocolate Factory (TCF) case study demonstrates the art of negotiations, from preparation to final agreement, between the involved parties. Information presented in this case study exemplifies how parties approach negotiations, especially in business. The most pronounced negotiation tactics are preparation, clarity of desired outcomes, and reciprocity (Fells and Sheer, 2019). Both TFC and the union representatives demonstrated thorough preparation and clarity of goals. In the final meeting, TFC exercised reciprocity to rationalize their negotiation. All three strategies were effective in moving the negotiation towards a successful outcome.
Preparation and Planning
TCF and the Union representatives deploy preparation and planning before the actual negotiations. As the current Enterprise Bargaining Agreement ended, TCF and the Union representatives were aware of the upcoming negotiations. Due to this, they both invested time and resources to review the past working conditions and terms of employment.
As the employer, TCF is keen to ensure that it signs an agreement that works in its favor. To ensure this outcome, TCF’s Employer Relations, led by Amanda, took up an industry and market analysis. This analysis prepared for the negotiation as it helped the team pinpoint the areas of concern that would be addressed (Fells and Sheer, 2019). Essentially, the preparation worked to clarify the goals to be achieved in the negotiation and evaluate the company’s current employee welfare.
The Union representatives, on their part, also conducted extensive research to prepare for their log of terms in the new agreement. As stated in the case study, the Union representatives reviewed employment data in the Australian Bureau of Statistics and European Agreements. The representatives also reviewed previous enterprise agreements and TCF’s financial records.
Additionally, the union representatives conducted primary research to collect views on employee’s concerns. This extensive preparation was monumental in creating rational agreement terms (Jung and Krebs, 2019). First, the research provided evidence of increased safety issues at TCF. The preparation helped to ascertain prevailing remuneration and work shifts for industry players. Ultimately, preparation by TCF and the Union fulfilled the exploration phase while enabling both parties to negotiate from an information point of view.
Clarity of Outcome and BATNA
Clarity of goals is a vital negotiation strategy that TFC and the Union demonstrated. Before engaging in any negotiation, negotiating parties must clearly state what they intend to achieve from the negotiation (Gates, S., 2022). In this case study, TCF stated that it aimed to increase flexibility, minimize financial liabilities and labor costs, and establish clarity of safety protocols in the company.
The Union representatives, on their part, focused on increasing remuneration to 4.5% annually (Bessey, Ladd, and Walaszek, 2022). It also aimed to improve the labor division, have TCF improve its machinery, and invest in safety training and retraining. The list of goals from both parties sets the foundation for negotiations in the moving phase.
In line with the clarity of goals, the Union Representatives had set their target point for remuneration levels. Following through the case study, it is evident that increasing remuneration was the most contentious element of the negotiations. Due to this, the union representatives were prepared for resistance and a stand-off on this element.
The clarity of goals was effective in moving forward with the negotiation, and the outcome aligns with Bessey, Ladd, and Walaszek (2022), who argue that the clarity of goals is the precursor to arriving at the Zone of Possible Agreement. According to Bessey, Ladd, and Walaszek (2022), having clear goals creates a direction for negotiation and helps focus on developing the line of argument. In line with this, the clear goals set by both parties cultivated negotiations based on logic, company performance, and market analysis. These were escalated by commitment, along with the explicit goals, forged for progress in the negotiations.
Reciprocity
The negotiation between TCF and union representatives put reciprocity at play. Reciprocity is the strategic technique where negotiating parties exchange considerations (Bessey, Ladd and Walaszek, 2022). Considerations in this context refer to information to engender understanding of the other party’s point of view. By the second meeting, the negotiation had reached a resistance point because neither TCF nor the Union was willing to waive their demands.
The role of reciprocity in moving the negotiation close to an agreement is threefold. One, reciprocity helped to manage the rising emotions of both parties. Secondly, reciprocity cultivated objective communication as both parties were willing to communicate their goals (Bessey, Ladd, and Walaszek, 2022). In the third meeting, TCF changed its approach by starting with the less contentious elements. TCF’s move to strategically share more information on their market industry helped to justify their resistance to increasing employee wages.
Thirdly, reciprocity created trust between the Union and the party. As stated in the case study, the union representatives were surprised at how open TCF’s representatives were with the company’s financials. This tangent cultivated a spirit of goodwill, indicating that TCF was willing to execute the terms but was constrained by unfavorable market trends.
Reciprocity prevailed in the fourth meeting, where the union representatives and TCF team discussed occupational safety. Due to the trust and harmony both parties established in the third meeting, TCF agreed with the Union to replace old machines with new ones (Macy, 2022). The TCF team also agrees to improve employee training on occupational safety to reduce the number of strains, sprains, and other injuries in the line of work. By agreeing with the Union’s recommendations, TCF creates a basis for the Union to reciprocate in restructuring working shifts and remuneration. This strategy was pivotal in fostering negotiation openness and reaching an amicable agreement.
Conclusion
The negotiation between TCF and union representatives exemplifies typical business negotiations in the real world. Both parties demonstrated preparation, clarity of goals, and reciprocity throughout the negotiation. Thorough preparation helped to ascertain key employee issues. It also helped to prepare for rebuttals from the other party and to present informed arguments (Chan, Ramírez and Stefoni, 2019). Clarifying goals was important in directing the negotiation to the endpoint. Reciprocity was the top strategy because of the considerable negotiation progress made by the parties after implementing the strategy. In as much as the movement phase of the negotiation was difficult in the first two meetings, the fourth meeting recorded positive progress that would lead to a final agreement on all the agreement terms.
Reference List
Bessey, L.J., Ladd, C., Walaszek, A. (2022) ‘Negotiation skills as a program director. In: Macaluso, M., Houston, L.J., Kinzie, J.M., Cowley, D.S. (Eds) Graduate medical education in psychiatry‘, Springer. Web.
Chan, C., Ramírez, C. and Stefoni, C. (2019) ‘Negotiating precarious labour relations: dynamics of vulnerability and reciprocity between Chinese employers and their migrant workers in Santiago, Chile’, Ethnic and Racial Studies, 42(9), pp.1456-1475. Web.
Fells, R. and Sheer, N. (2019) Effective negotiation: From research to results. Cambridge University Press.
Gates, S., 2022. The negotiation book: Your definitive guide to successful negotiating. John Wiley & Sons.
Jung, S. and Krebs, P. (2019) The essentials of contract negotiation. Springer.