Paper , Order, or Assignment Requirements
Management of Negotiation
Assessment: Essay Limit: 2500 words A written essay (2,500 words) to be submitted to the School Office (100% of the final mark).
Instructions: Using the attached article that summarizes the events that transpired, analyse the negotiation and contract dispute between the London Olympic’s organizers and G4S. Your analysis should include an assessment of both parties’ strengths and weaknesses in the negotiation. You should also include suggestions for how both parties could have improved their outcome. Your essay should include and refer to negotiations concepts learned through specific class readings, discussions, and activities.
Timeline: how G4S’s bungled Olympics security contract unfolded
March 2011: G4S is made the official “security services provider” for London 2012 and will provide training and management for the 10,000-strong security workforce, including a mix of military, private security guards and unpaid volunteers.
London 2012 chief executive Paul Deighton says the firm will help ensure security provisions are “robust and of the highest professionalism”.
December 2011: The Government announces that the number of security guards for the Games will rise to 23,700 – more than double Locog’s original estimate of 10,000. Security costs from the Olympics budget have risen from £282m to £553m.
G4S’s initial contract with Locog to provide 2,000 security staff rises to 10,400 personnel, in a contract now worth £284m.
Confidential documents obtained later by the Daily Telegraph suggest that G4S’s management fee rose from £7.3m to £60m. Almost £34m of the increase was for the G4S “programme management office” overseeing the security operation, compared to an increase of just £2.8 million in the firm’s recruitment spending.
The Public Accounts Committee’s report states that Locog have been forced to renegotiate their contract with G4S for venue security from a “weak negotiating position”.
July 11 2012: G4S admits to ministers that it “would not be able to deliver the numbers of security personnel that they had promised”.
July 12 2012: Defence Secretary Philip Hammond announces up to 3,500 extra troops will be needed for security duties during the Olympics amid fears that G4S will not be able to meet the needs.
Home Secretary Theresa May tells MPs there was “no question of Olympic security being compromised” following the decision to draft in additional servicemen and women.
July 13 2012: G4S says it stands to lose up to £50m as a result of the London Olympics security fiasco. The company adds that it “deeply regrets” the problems which have meant troops being drafted in at the 11th hour to make up a shortfall in security guards.
Shares in G4S close down 1.5pc at 278.7p, with more than £150m wiped off the company’s market value in two days.
July 14 2012: G4S chief executive Nick Buckles says the firm will be facing a penalty payment “in the range” of between £10m and £20m as a result of the failure to meet its commitments.
August 2012: Nick Buckles rules out bidding for contracts at the 2016 Olympics in Brazil because he fears the reputational damage that would be done to the company if the fiasco of the London contract was repeated.
He is also unable to provide answers about why the company’s Olympics security contract went so badly wrong.
September 2012: The FTSE 100 company says it has accepted the resignations of UK boss David Taylor-Smith and Ian Horseman Sewell, the managing director of global events, over the failure. Nick Buckles keeps his job.
November 2012: G4S loses its contract to run the Wolds prison, with the jail to returning to the public sector next year.
February 2013: G4S says it will take a bigger-than-expected £70m hit on its Olympic Games contract.
The loss, which compares with its previous estimate of £50m, follows months of negotiations with Games organisers Locog.
May 2013: G4S issues a profit warning, saying that margins this year could be lower than expected after a difficult first quarter in Europe.
May 21, 2013: Nick Buckles announces he will step down as chief executive of G4S. Under Mr Buckles’ captaincy, G4S’ share price has soared as it expanded into some 125 countries. However, his time at the helm is more likely to be remembered for a succession of incidents that have blighted the world’s largest security company over the last year and a half.