Question

Preparation for Negotiations

Labor costs, productivity, flexibility, and many other outcomes are determined in large measure by what happens during negotiations. Therefore, the company must carefully prepare along a number of dimensions. Fossum defined a sequence of management preparations for negotiations, establishing seven steps management should take.

LBSC, Inc., operates a milk processing plant in Kenosha, Wisconsin. Its union, the Brotherhood of Food Processing Workers (BFPW), represents all nonsupervisory production employees in the facility. The contract between LBSC and BFPW expires in six months, so LBSC must start to prepare for the negotiations. LBSC’s HR department plans to conduct a number of management meetings asking for feedback on the appropriate goals of bargaining, and to ask the finance department to estimate the acceptable cost profile for the term of the next contract. It will gather information on plant average seniority and inventory levels, and forecast customer demand. It will analyze grievances and find out what it can do about the course of other recent negotiations for the BFPW. Its finance department will estimate the costs of one additional holiday and a 401(k) plan. Finally, it will decide how much latitude it will have to make concessions and what will have to be referred to the corporate office before it can be approved.

This activity is important because the outcome of contract negotiations can have a major impact on the ability of a company to meet its competitive challenges.

The goal of this activity is to match scenarios to each of the seven steps management should take in preparing to negotiate.

Identify which step LBSC Inc. is performing for each of the actions (as laid out by Fossum) below.

ANSWER KEY

a. prepare for a strike

b. establishing the cost of potential union demands

c. determining strategy and logistics

d. anticipating union demands

e. establishing interdepartmental contract objectives

f. receiving the old contract

g. preparing and analyzing data

QUESTIONS

1. Conduct management meetings

2. Identify provisions that might cause difficulty

3. Gather seniority and inventory info

4. Determine the authority of the bargaining team

5. What management intends to do

6. Determine cost of a new holiday

7. Analyze grievances

Answer 1

Following steps will be followed by LBSC for each of the given action

1. Conduct management meetings - e. establishing interdepartmental contract objectives

2. Identify provisions that might cause difficulty - a. prepare for a strike

3. Gather seniority and inventory info - f. receiving the old contract

4. Determine the authority of the bargaining team - d. anticipating union demands

5. What management intends to do - c. determining strategy and logistics

6. Determine cost of a new holiday - b.establishing the cost of potential union demands

7. Analyze grievances - g. preparing and analyzing data