Resource Allocation Negotiation Skills: Case Study Analysis

This project presents a negotiation case study involving resource allocation between the Head of Research and Development and the Head of Production. The scenario involves a limited budget of $2 million, and the goal is to determine how the funds should be divided. The Head of Research and Development prioritizes market research, while the Head of Production requires funds to enhance production facilities. The assignment analyzes the negotiation process, including the initial positions of each party, the arguments presented, and the final resolution facilitated by a negotiator. The negotiator guides the parties toward a compromise, ultimately suggesting an equal allocation of resources, which both parties agree to. This case study highlights the importance of negotiation skills, conflict resolution, and leadership in achieving mutually beneficial outcomes within an organization.

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 both 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.
Party 1: Do you think it would be adequate enough to proceed with only a nominal amount of
$ 1million in research and development? We require more funds for proceeding with
marketing and promotion. Being the member of the management team, how could you do not
know the importance of marketing?
Me: Even if I am aware of the facts, couldn’t you find out any other source for promoting the
products and services? Why being rigid towards the marketing strategy when you know that
you have been provided with a limited fund?

Party 2: I am ready to negotiate with the other team for equal resource. Please ask them to
sign the agreement for such.
Me: Being stubborn for making such a decision will not help any of us. Rather, please be
assured that allocation of resources will be for the best interest of the company and will
benefit all the members of the organization.
Party 1: Ok, then kindly proceed with resource allocation.
Party 2: Agreed.
Me: Let’s begin with the allocation.