Cut the costs for compliance versus nonspecific compensation

Cut the costs for compliance versus non-specific compensation. Explain with example the difference between \'cutting the costs for compliance\' and \'non-specific compensation\'.

Solution

Two different strategies / approaches in negotiation can be identified as:

Though functioning of both the approaches are different and applied in different circumstances. For example, if a football player is contracted to one particular club and another club wants to hire that player. In that case, player has to pay / compensate the existing owner club for the release. In this case, his new club pays the whole or part of release money for the player. Now through “\'cutting the costs for compliance”, cost of compliance by the player is reduced by his new club. Thus, it can be clearly seen that compliance terms of the club is satisfied as well as the cost of compliance of the player is also reduced.

In contrast to it, Nonspecific compensation works in different manner. It can be understood with another example. One researcher wants to work with NGOs to complete the research work. An NGO offers the opportunity to researcher. Though, NGO cannot pay much. In this case, NGO provides benefits such as free entry in to seminars, conferences or workshops that are very important to the researcher. In this case, these offerings become “Nonspecific compensation” that helps NGO employing the researcher.

In first case, compensation is paid to leave the present club and cost of compliance is reduced. Though, in second example, compensation is paid to carry along the researcher with the NGO.