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07 December 2012

Assignment of Managerial Negotiation

Assignment No : 03 (Two) Topic : A Case study on approach of negotiation

Submitted To
Mr. S.M. Hasan Iqbal Chief Technical Adviser European Union Course Instructor : Managerial Negotiation Department of Business Administration

Submitted By
Mahfuza Akter [Mili] ID : 10206038 Dilshad Jahan Disha ID : 12106009 Aziza Sultana ID :11106020 Mahamudur Rahman ID : 12206011 Nazmi Hoque ID : 12306045


Date: December 07, 2012


Mr. S.M. Hasan Iqbal

Department of Business Administration, Course of Managerial Negotiation The University of Asia Pacific. Dhaka 1209 From: Mahfuza Akter Mili; Dilshad Jahan Disha; Aziza Sultana; Mahamudur Rahman; Nazmi Hoque.(Students of MBA) Subject : Prayer for accepting our group assignment .

As you said on 30.11.2012 in the class, we have formed a group consisting of five (05) members and we have prepared our assignment as per you told us . We have discussed and analyzed the case study amongst us and have prepared our assignment on basis of that. It may also contain some mistakes and we could overlook some important point. The names of group members are stated below: Group members : Mahfuza Akter [Mili] ID : 10206038 Dilshad Jahan Disha ID : 12106009 Aziza Sultana ID :11106020 Mahamudur Rahman ID : 12206011 Nazmi Hoque ID : 12306045 Signatures .. .. .. .. ..

Therefore, we will by highly obliged if your overlook consider these mistake and accept our this Assignment.


You are the flight manager of a small private airline Daily Ural Dimu. The next flight you are schedule to operate is a half an hour from Vurugamari to Chagolnaiya. You have just been advised that there has been over booking due to some mismanagement at the sales department, which means that you do not have enough space in business class to accommodate all the passengers who have booked for the flight. There is however space capacity in economy class. The airfare for business class is Tk. 3000. In case all passengers show up and now you have deal with the situation. Which negotiation approach do you think would be most smart and effective and why Apologize to the business class and ask them to take economy seats. Tell them they will still be given free Khejurer rosh and Khathal on the flight. Offer a cash payment of Tk. 500 to any business class passenger who is prepared to travel economy class. Offer free Majavanga to Kamrangirchar business class return ticket, at a date to be arranged by Airline Company, to passenger prepared to trade down to economy class. Pray to god for some of business passenger would not show up.

Negotiation approach of a flight manager to solve the overbooked flights

As a flight manager, to take a effective and smart negotiation approach from the given options need to analyzed the situation and over looked the following things: How will react the overbooked passengers? Which one negotiation approach will most acceptable for passengers? Which one negotiation approach will not affect in the airline revenue? Which one negotiation approach will profitable for the airline? Which one approach will make a good relation between the organization and passengers? What will happen when the passengers accept and dont accept the offer? What affect will make in the organization when the passengers accept and doesnt accept the offer?

Analysis the situation

The airline company is fully responsible for the situation thats why its their duty to make satisfied the passengers even the company has to bear some loss because the customer is a king of an organization. But also need to think about the benefits of the organization as a job of manager and also save the position The passengers who are overbooked and get a offer which is not acceptable to them then they may be cancelled their flights and may have made it necessary for them to take a different flight, maybe with a different airline. On the other hand they want to be a bump passenger and claimed compensations. An airline's inventory is comprised of the seats that it has on each flight. If a customer does not fly on the flight which he or she has a reservation, his or her seat is unused and cannot be returned to inventory for future use as in other industries. This undermines the productivity of an airline's operations; it is increasing productivity, of course, that contributes to lower airfares and expanded service. Airline seats are extremely perishable; when the aircraft door closes, an empty seat is lost forever. Any revenue the airline receives for what would be an empty seat, that offsets the direct cost of carrying an additional passenger, will add to profitability. Adding seats to an aircraft increases its revenue-generating power, without adding proportionately to its costs. If passenger favor, it will seek to maximize the number of seats to keep. If the passenger accept to travel in economics class that will be more profitable for airline organization because it fill up the empty seats of economic class which help the organization to overcome their inventory loss. Finally as a flight manager need to select that negotiation approach which one is most acceptable for passengers and that will also effective and smart for both.

Analysis the given options

Option 1 Only apologized will not acceptable for all passengers may be some passengers will violet and the airlines will lose the costumers forever. Only given the free khejurer rosh and kathal cant satisfied the passengers because its not an extra facility for business class passenger then why they would compromise the other facilities that they should have from the business class. In short time khejure rosh and kathal may not be arranged for all economics passengers and it may be more expensive. Option2. A business class ticket is more costly than the other class. Usually passengers buy that ticket to get the extra facilities and to make a comforted journey. The passengers will not accept low service for their given amount. Only when they will get a cash payment back they will accept the offer It must be equal the service and cost of the service in the view of passenger then they will be satisfied. When passengers will feel that the offer is properly justified then they have a trust on the organization that will turn to an asset as a good will. Customer is the king of an organization. If they are satisfied they will be eager to make a forever relation, which will be more profitable for the organization. It will also balance the given service and cost of service Cash payment will overcome by filling up the empty economy seat. That why it will not effect on revenue. This option maybe most acceptable to the passengers and profitable for the airline organization Option3 Offering free majavanga to kamrangirchar business class return ticket that sound illogical because that offer return ticket and also the date will be arranged by airline organization. The passenger might become irritate by getting that unnecessary offer and that is not acceptable. Option4 If everyone started to pray for solving their problem without doing any work then all the activities of the world will remain stop. God only help those who help themselves.

Selected negotiation approach

By analyzing all the 4 options, as a flight manager realized that option 2 is most effective and smart negotiation approach because its consider the both sides situation.