Negotiation Bargaining Chips: The Value of Goodwil
The more goods and services you have to "trade" to negotiate a deal, the more likely you will achieve the most optimal settlement possible. Remember, litigation is simply a business negotiation being conducted in the courts (Google's Eric Schmidt). Though the facts relevant to the litigation are narrow, the facts relevant to the negotiated settlement are unconstrained. Therefore, we're starting this morning a new series on Negotiation Bargaining Chips. Here, for instance, is an except on the topic from the PRI radio program Marketplace. Click on the highlighted headline for full story and podcast.
(peanut butter: an item that has recently lost much of its goodwill value)
Decoder: The value of 'goodwill' from the Marketplace website.
Let's say you bought [a] company. Its goodwill is now considered one of your assets. It appears on your balance sheet just like office equipment or company cars. And your accountants can calculate whether that goodwill value is increasing or decreasing. If the value decreases, you can put that down as an expense. And if an agency like Moody's suspects the value might decrease? They can downgrade your credit rating.
At which point you might find yourself shopping at that other Goodwill.
Goodwill. Don't forget its value when negotiating with your adversary.
