Monthly Archives: October 2011

It’s A Matter Of Principle

How many times have you heard “it’s the principle of it.”  Be assured that when you hear this during a negotiation, nothing good is going to follow.  This is a red flag that things have just turned south and that there will be no rules of rationality moving forward.  In negotiations, the “matter of principle”, is code for “I want to win”.  It is a proclamation that becomes an excuse to be difficult and inflexible.  It is an emotional response, rather than an intellectual one and is an opt-out clause when it comes to responsible, professional negotiation. 

 A Smart Negotiator must realize that once the “matter of principle” is invoked, the chances of making a quality deal are not very good.  Corrective action may be necessary to salvage the negotiation.  One method in accomplishing this would be to call a caucus and reframe the facts, in order to recalibrate the vision of the parties involved.  Following are a couple of examples that illustrate the devastating affect that the “matter of principle” can have on the outcome of a negotiation.

 The Smart Negotiator!® workshop often uses a labor-management case as an exercise.  Teams typically negotiate in good faith to the point where they almost have a deal.  It is not unusual for the labor team to make a request for something to close the deal and reach a final agreement.  In this instance, labor asked for one additional holiday to close the deal.  At this point, many times the management team’s vision shifts and they flatly refuse to give an additional holiday, estimated to cost the company between $7000-$9000, on the grounds that “it is the principle” of it.  Consequently, the labor team becomes emotional and decides to go on strike, costing the company $30,000 per day.  The management team concludes that they will not spend $7000-$9000 to close a deal that would allow the company to continue to earn $12M/year profit, but allows the company to lose $30,000 per day in a strike.  What happened to the negotiator’s fiduciary responsibility to the company? Reframing the facts and removing the emotion from the situation would sound like this:  “You can pay a maximum of $9000 to close the deal and preserve the $12M/year profit or cost the company $30,000 per day of the strike and still not have a deal.  If the strike last 3 days the cost is 10 times ($90,000) the cost of one holiday.” Is this a matter of principle?

 Here’s an example from Small Claims Court:  A former employee (Plaintiff) filed a suit against its employer (Defendant) for $3000 in back wages.  The employee claimed he was owed $3000, but had no records to support the claim.  The employer acknowledged that he did owe the plaintiff some back wages and wanted to reach an agreement through mediation. Consequently, based on their records, the employer offered to pay the plaintiff $1500 in wages minus $400 for the equipment (power washer) that the employee didn’t return.  In essence, the deal was a check for $1100 at mediation and the employee keeps the power washer.  The plaintiff’s response to the employer’s offer was: “No.  It is the principle of it.  An employer shouldn’t treat its employees in this manner.”  Without any records, the judge may rule in favor of the defendant, awarding $0 to the plaintiff.  The plaintiff had $1100 in his hand and the equipment, but chose to go to court.  Is this a matter of principle?

 The next time you are engaged in a negotiation and one of the parties claims “it is a matter of principle”, your Smart Negotiator alarm should go off.  If you want to be successful, don’t move forward with the negotiation until you recalibrate the vision of the other party– and this is a matter of principle!


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