Question

“It's company policy”

Let's look at a real case where one party used positional bargaining and the other principled negotiation. Tom, one of our colleagues, had his parked car totally destroyed by a dump truck. The car was covered by insurance, but the exact amount Tom could recover remained for him to work out with the insurance adjuster.

INSURANCE ADJUSTER

A=We have studied your case and we have decided the policy applies. That means you're entitled to a settlement of $3,300.

B=I see. How did you reach that figure?

A=That's how much we decided the car was worth.

B=I understand, but what standard did you use to determine that amount? Do you know where I can buy a comparable car for that much?

A=How much are you asking for?

B=Whatever I'm entitled to under the policy. I found a secondhand car just about like it for $3,850. Adding the sales and excise tax, it would come to about $4,000.

A=4,000! That's too much!

B=I'm not asking for $4,000 or $3,000 or $5,000, but for fair compensation. Do you agree that it's only fair I get enough to replace the car?

A=OK, I'll offer you $3,500 That's the highest I can go. Company policy.

B=How does the company figure that?

A=Look, $3,500 is all you'll get. Take it or leave it.

B=$3,500 may be fair. I don't know. I certainly understand your position if you're bound by company policy. But unless you can state objectively why that amount is what I'm entitled to, I think I'll do better in court. Why don't we study the matter and talk again? Is Wednesday at eleven a good time to talk?

A=OK, Mr. Griffith, I've got an ad here in today's paper offering a '89 Taurus for $6,800.

B=I see. What does it say about the mileage?

A=49,000. Why?

B=Because mine only had 25,000 miles. How many dollars does that increase the worth in your book?

A=Let me see ... $450.

B=Assuming the $6,800 as one possible base, that brings the figure to $7,250. Does the ad say anything about a radio?

A=NO.

B=HOW much extra for that in your book?

A=$125.

B=How much for air conditioning?

A half-hour later Tom walked out with a check for $8,024.

1-In the case of "It's company policy" , how did Tom apply the principle of "suggesting a joint search for objective criteria and open to reason" in his negotiation with the insurance adjuster?

2-In the case of "It's company policy" , how did Tom apply the principle of "using fair standards" in his negotiation with the insurance adjuster?

3-In the case of "It's company policy" , how did Tom apply the principle of "not yielding to pressure" in his negotiation with the insurance adjuster?  

Answer 1

Question #1:- In the case of "It's company policy", how did Tom apply the principle of "suggesting a joint search for objective criteria and open to reason" in his negotiation with the insurance adjuster?

Answer #1:- While negotiating with the insurance adjuster, Tom correctly identified a shared goal to determine the fair outcome despite the conflicting interests. He applied the idea of shared principles that both sides find compelling and not influenced by, or biased toward either party.

Question #2:- In the case of "It's company policy", how did Tom apply the principle of "using fair standards" in his negotiation with the insurance adjuster?

Answer #2:- While negotiating with the insurance adjuster, Tom correctly applied the principle of "using fair standards" by consistently insisting to find the way insurance adjuster was calculating the insurance claim amount and offering to Tom for settlement. By sticking to the fair entitlement for the settlement amount Tom was successfully able to negotiate the fair settlement deal with the insurance adjuster.

Question #3:- In the case of "It's company policy", how did Tom apply the principle of "not yielding to pressure" in his negotiation with the insurance adjuster?

Answer #3:- While negotiating with the insurance adjuster, Tom correctly applied the principle of "not yielding to pressure" in his negotiation with the insurance adjuster" by sticking to his point of "fair entitlement" as per the company policy. Tom was able to identify the illegitimate pressure tactics by the insurance adjuster for a low settlement amount without any fair standard followed to calculate the settlement amount. Tom was firm on his objective of calculating the settlement amount based on the standard company policy and entitlement for his damaged car value.