Win-Win Negotiation Case Study

In trying to create win-win negotiation agreements, one of the biggest mistakes made by negotiators who haven’t taken negotiation training seminars is to deal with the issues on an issue-by-issue basis. This often results in a breakdown in negotiations. Why? Invariably, conflicting monetary issues arise that result in a showdown between the two sides. Negotiating on an issue-by-issue agenda does not present the opportunity to make concessionary trade-offs between the different issues. 

This case study typifies the kinds of mistakes it’s easy to make without the right training when aiming for a win-win.

Unexpected Strike

In January 1993, management and labor of Bayou Steel in Laplace, Louisiana, sat down to negotiate a new contract. In this case, neither side dreamed that these talks would lead to a strike. So, each side believed that they had built a solid relationship. In effect, management went into the negotiations believing that if they used a win-win negotiation concept, they would enhance the relationship between the shop floor and management. Even Ron Farraro, president of United Steel Workers of America, didn’t conceive of the possibility that talks would collapse into a strike, and that a negotiated contract would be reached with little or no difficulty.

Management of Bayou Steel enlisted the help of two facilitators from the FMCS (Federal Mediation and Conciliation Services). They were to guide management through a win-win style negotiation with its workers. The president of Bayou said that the facilitators helped them identify and study each side’s objectives and concerns, and led him to believe that they had, in effect, resolved 90% of the contract issues.

The facilitators set up an issue-by-issue agenda. They left the economic issues as the final issues for the sides to discuss. These included:

• Incentives
• Base pay
• Overtime
• Vacation time

Management believed that they had correctly addressed the employees’ concerns about these pay issues.

What Went Wrong?

However, union members became suspicious about the management’s good intentions to take a win-win approach. They began to believe collectively that the management’s negotiation approach was a disguised ploy meant to undermine their position. This was especially so in the case of the economic issues.

At first, negotiations went relatively well and as predicted. Yet, as the economic issues were placed on the table for discussion, the situation quickly turned upside down into a hard-nosed bargaining negotiation. Management attempted to stay the course with a win-win approach, but this no longer washed with the union. Can you guess what happened? That’s right – union members walked and went out on strike.

By using an agenda to address the format of the contract negotiations, Bayou Steel failed to consider that any single issue could be so divisive. As the economic issues rose to the foreground of the talks, Bayou Steel no longer had leeway in considering trade-offs. They painted themselves into a corner because of their structure of agenda items.

Planning an Effective Agenda

We need to be able to study, compare and contrast all the issues collectively, and by order of relative importance. Package or multiple offers give a greater latitude in finding creative solutions. This is because it gives us more to work with, as opposed to dealing with, issues on a one-on-one basis through a pre-designed case agenda. Planning and using a concession strategy effectively can give one side a big power advantage over the other. So, be careful to plan your agenda wisely.