Negotiation Case Study: Department Funding

This case study presents a negotiation scenario between the Head of Research and Development (Party 1) and the Head of Production (Party 2) regarding the allocation of a $2 million fund. Party 1, a less skilled negotiator, insists on using the entire fund for market research, while Party 2, a skilled negotiator, argues for a portion of the fund to enhance production facilities. The negotiator (Me) intervenes, suggesting an equal split of resources to resolve the conflict. The case highlights the challenges of resource allocation and the importance of effective negotiation strategies in a business setting.

Head of Research and Development Department (Party 1 less skilled negotiator)
Head of Production Department (Party 2 Skilled negotiator)
Me (Negotiator)
Party 1: The manager has decided to allocate $2 million on important activities. Nothing
more is much important than market research in retail sector.
Party 2: I know, it is important to get things done based on research on any subject. However,
meeting the demand of the customer is equally important as attracting and retaining the. Our
department needs additional fund for enhancing production facility.
Party 1: But it is impossible to hand over the funds to you when there are actually no use.
You all were granted funds for meeting the production level. Why didn’t you say then you
need additional funds?
Party 2: How can you say that there is actually no use? We need it for increasing production
and keeping the funds ready for the production facilities in case of increase in customers.
Party 1: I have written a formal letter to the manager and he will decide what to do and what
not to.
Party 2: I am not asking for the entire fund, at least 60% of the fund could be used by our
department. W are ready to negotiate with your team for the remaining 40%.
Party 1: We are not. We need entire fund.
Me: Do you bot mind if I explain my view:
Party 1 and Party 2: No. You may proceed.
Me: Why don’t you both take equal resource and proceed with your work.