Discussing the bottom line in budget negotiations

By on / Daily, Negotiation Skills

The PON Clearinghouse offers hundreds of role simulations, from two-party, single-issue negotiations to complex multi-party exercises. Multimode, Inc. is a two-party intra-organization negotiation between a company’s financial and human resources officers regarding the amount of a budget increase.

SCENARIO: T. Boyd, a Vice President of Budget and Finance at Multimode, Inc., (a manufacturing firm) is about to meet J. Arnold, a Vice President of the Human Resource Development Office at Multimode. T. Boyd has formally met with other departments to discuss the upcoming year’s budget as well as expected productivity increases. The maximum allowable budget increase has been set at 5%. In order to implement a new reorganization plan, J. Arnold is requesting an 8% increase.

MECHANICS: This game is designed for two players. Reading and preparation take approximately 15 minutes and the actual play of the simulation runs about 30 minutes.

TEACHING MATERIALS:

  • For all parties:
    • General information
  • Role specific:
    • Confidential instructions to:
    • J. Arnold
    • T. Boyd
  • Teacher’s package:
    • All of the Above

PROCESS THEMES: closure; commitment; communication; constituents; cost-benefit analysis; fairness; financial analysis; legitimacy; meaning of “success”; nonverbal communication; objective criteria; partisan perceptions; precedents; relationship; reservation price.

MAJOR LESSONS:

In post-negotiation discussion, participants may review the advantages and disadvantages of truthfully revealing their bottom lines.

The parties presume there is a gap between what one can offer and what the other can accept. In fact, there is an overlap. Their initial perceptions shape their subsequent efforts to probe for information.

The degree to which issues other than the percentage increase or cut should come into play is a useful focus for a discussion of good “outcomes.”

To purchase this role simulation, click here.

Related Posts

Comments

Leave a Reply