Which deal is the most favorable to all parties

Assignment Help Management Theories

Reference no: EM133534739

A non-EU European country has recently been paralyzed by the direct action of truck drivers who are angry at a package of regulations that the government is considering introducing. Discussion between the government and representatives of the truck drivers is now taking place at a secret location to try to resolve the dispute. Three issues need to be resolved:

the maximum number of hours the drivers can legally drive per day,
whether or not the government will introduce a special fuel tax and
whether or not charges will be made against ten drivers who have been arrested during the dispute.

The possible number of driving hours that could be agreed are given below, together with the chief government negotiator's rough assessment of the values which each side would place on each outcome (100 = best outcome, 0 = worst outcome).

Max. No. of driving hours Drivers' value Government value

11 10 0

10 60 80

9 40 90

8 0 100

For the fuel tax issue, only two levels are possible - either the tax will be imposed or not. However, for the arrested drivers three outcomes are possible i) serious charges ii) minor charges and iii) charges dropped. Estimates of the values that the negotiating parties put on these outcomes are set out below.

Level of charges Drivers' value Government value

Serious 0 100

Minor 80 90

No charges 100 0

The government's negotiator has also estimated weights to reflect the relative importance that the parties attach to swings from the worst to best position on each issue. For the drivers avoiding reducing the maximum number of driving hours from 11 to 8 is thought to be the most important swing. Avoiding the introduction of the fuel tax is thought to be only 10% as important as this, while the reduction of the level of charges against the arrested workers from serious to no charges is 50% as important.

For the government introducing the fuel tax is the most important swing. Reducing the maximum number of driving hours from 11 to 8 is 60% as important as this, while avoiding reducing the level of charges against the drivers from serious to no charges is only 40% as important.

The following tentative deal has been reached:

Reduce the maximum number of driving hours to 9
Impose the fuel tax
Make no charges against the arrested drivers.
The objective of this case study is to apply multiattribute value analysis to a negotiation problem involving two parties and several issues so that a deal which is to the mutual benefit of both parties can be reached.

It is advisable to use a spreadsheet to calculate the values to each party of each of the 24 possible deals.

Question:

Show an Excel spreadsheet will show which deal is the most favorable to all parties. This involves:

Allowing the truckers to drive for a maximum of 9 hours.
Introducing the fuel tax
Bringing no charges against the arrested drivers.

Reference no: EM133534739

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