Printing Company - Negotiation Case

CASE: The Printing Contract

This is a negotiation between a Printing Company and the CEO of a small non-profit organization. The non-profit has a total of 14 employees and recently underwent some restructuring. The staff member that was the previous point of contact with the printing company has now been moved to a different position. This employee was the contact for a number of years with the printing company and knew the intricacies of the printing contract. The non-profit CEO has decided that he will now be dealing with the Printing Company and therefore the contract that is up for renewal. Unfortunately the original contract with the Printing Company was based on a handshake with a former CEO of the non-profit. The new CEO is adamant that there be a comprehensive, written, legally binding contract in place and is willing to put it out to print industry tender if negotiations are unsuccessful with the current Printing Company.

The Printing Company has been the ONLY printing company that the non-profit has ever utilized. It has been 25 years now that they have been in business with the non-profit and there has never been a legally binding contract in place. They have written up agreements from time to time, but the relationship has been based on reciprocal trust and the good work of the printing company to service the organization they consider to be their top client. They have understood the budget constraints associated with working with a non-profit and have been innovative and accommodating in producing quality mass printing with little budget.

Some helpful additional background information includes a few important facts. This new CEO and the owner of the Printing Company are amicable with each other, but away from the forum of work they are not particularly friendly with each other. They each have reputation to lose if this negotiation goes bad. There are many industry stakeholders involved with the non-profit that would like to see the Printing Company remain the same and could cause harm to the reputation of the CEO and the non-profit if they feel that due diligence and fairness have not prevailed in the negotiation. Everyone is in mutual agreement that there should be a more formal written agreement in place between the printing company and the non-profit. The CEO of the non-profit does not have any history with this Printing Company and feels no loyalty to them. In fact, simply putting the printing contract out to tender and accepting the best offer would make the CEO much more comfortable than going through the process of mutual adjustment and concession making with the current printing company. The non-profit CEO is already displaying a cognitive bias of overconfidence at the printing company for not adhering to smart business practise of legal written agreements for service in the first place. Clearly, their styles of conducting business are very different, one is warm and cooperative and the other cold and disconnected.

The Negotiation

There are two roles here; the role of the owner of the Printing Company and the CEO of the non-profit organization. The Owner could be convinced to enter into a mutually agreeable legally binding contract for printing services, however would prefer a written agreement between the two parties that doesn't have to involve lawyers. The owners interests include: that the contract be for a period of at least 3 years, that they be the exclusive printing supplier to the non-profit and that they retain creative control over the final look of the printed material. The Printing Company has acted as an arm's length employee over the course of their 20+ year relationship with the non-profit and has collaborated on all of the printed projects. They do not wish for that relationship to change and want to maximize the value of the current deal.

The CEO's interests include: keeping the costs as low as possible, but the quality to remain at or better than what has been produced to date, simply sending files over for printing should be the extent of the relationship which should push costs lower without the consulting fee as part of the price. The CEO also insists on signing a contract year to year knowing the printing company wants a longer agreement in place. The CEO hopes that based on that one difference of interests that the Printing Company