Principles of Management
This class is taught by Professor Michael S. Eagleson, JD. Mike is a very good teacher who is very passionate about alternative dispute resolution (ADR). I had decided to do my final presentation about Mutual Gains Bargaining as it is used quite frequently in ADR. I had never heard of mutual gains bargaining or ADR before this class and I was so fortunate to have Michael, a court appointed mediator, as both an instructor and a resource. Below is a paper written in support of the presentation I did in class.
Mutual Gains Bargaining
Mutual Gains Bargaining
A Paper Presented To
Professor Michael S. Eagleson, JD
In partial fulfillment of the requirements of
MGMT 300, Principles of Management
University of La Verne
College of Business and Public Management
Glen Sallee
La Verne, California
09/08/2012
Introduction
Abstract
This paper will discuss the principles of mutual gains bargaining. A brief description of the characteristics and techniques of mutual gains bargaining will follow. A case highlighting how mutual gains bargaining principles and techniques were used in the real world will conclude this paper.
Mutual Gains Bargaining
One way to resolve conflicts is through negotiation. There are two main types of negotiation: Integrative negotiation and distributive negotiation. Integrative negotiation strategies, also known as or mutual gains bargaining, works to promote solutions that benefits both sides and win-win solutions. Solutions arrived at through the process of mutual gains bargaining are collaborative, creative and “expand the pie”. Distributive negotiation strategies are adversarial and begin with the assumption that the size of the pie is fixed. So distributive negotiators try and get as much of the pie as they can. Whoever gets the most pie is the winner. The loser receives less or no pie under distributive agreements and has little incentive to follow through with any such agreement. This paper will explore the methodology of mutual gains bargaining and contrast said methodology with distributive bargaining where appropriate.
Methodology
Separate the people from the problem
This is probably the most important aspect of mutual gains bargaining. Attempting to assign blame, accusing the other party causes the other party to become defensive. Telling the restaurant manager that he is a slob who never gets the restaurant clean causes him to become defensive and argue with you. The restaurant manager will show you his cleaning schedule and present witnesses who will swear they saw everyone cleaning. Then you will have to defend your initial position that the restaurant manager is a slob and show him all the examples of such. Both sides dig in to their positions and what is neglected is the issue that needed to be addressed in the first place: the dirty restaurant. A mutual gains strategy focuses on the issue, in this case the dirty restaurant, and not on assigning blame for the dirt. So instead of telling the manager he is a slob who never cleans we’d focus on the issue and say something like “Bill I’ve noticed several times now that the kitchen is very dirty after the lunch rush. I’m concerned about passing our next health inspection, as I know you are as well. Can we get together and figure out a way to improve this situation?” Well Bill being a reasonable person who sees that he is not being attacked personally is going to agree to meet with you and help figure out a way to fix up the mess.
Focus on interests, not positions
Interests define what the problem is that is responsible for the conflict. Our desires and concerns are our interests. People have basic needs of security, economic well-being, a need to belong, recognition, and control (Fisher, Ury, Patton, 2011). People use positions as defense mechanisms to keep and/or protect their interests. We must make an extra effort to identify the underlying interests causing the conflict. It is helpful to make a list of the various interests as you identify them. It is also important to make sure that we talk to all the relevant people who have a stake in the conflict and its eventual resolution. Pin people down to specific interests that they have. It is not enough to find out that we all want world peace or to be happy. It is ok to be hard on the problem just avoid being hard on the people.
Invent Options for Mutual Gain
When we are defining the various interests, we might be tempted to come up with solutions on the fly. However until we have identified all the interests of those involved any solutions we might come up with will be incomplete at best. We do not want to take all the time and expense to negotiate an agreement only to have to do it again because we prematurely put in place solutions that did not reflect all the interests of those involved. After we have identified those interests we should engage in brainstorming to find various solutions that will satisfy the different interests. It is unlikely that a single answer will solve any complex problem or conflict. It is also true that in distributive bargaining often times the parties, view things as winner take all or that there is a “fixed pie”. Mutual gains bargaining demands creativity from the participants involved. There are specific rules to follow for brainstorming sessions. Before we brainstorm, the procedure is: 1. Define the problem; 2. Choose a few participants; 3. Change the environment; 4. Keep it informal; 5. Choose a facilitator (Fisher, Ury, &Patton). So we want to know what our purpose in brainstorming is, get the right people into the session, arrange the session in an environment where the participants can devote all their energies towards it, keep it casual and relaxed, and have a facilitator to keep thing moving along.
While we are brainstorming, we do not want the participants to sit across from each other. We do not want them to think of this as a battle or a confrontation. We want them to collaborate in this process so we sit them side by side. We must clearly define the rules making sure that everyone understands that there is to be no criticism of any kind allowed. The facilitator is to enforce the no criticism rule. When everyone understands the rules brainstorm. Get as creative as possible. Make sure that the group comes up with a long list of ideas. Look at the problem form every side possible. The more ideas that the group can generate will make it easier to craft an agreement that everyone can live with later. Finally make sure that everyone’s ideas are recorded and that this is done with full awareness of the group (Fisher, Ury, & Patton).
After the brainstorming is over highlight the most promising ideas. Take the best ideas and have the group invent ideas to make them better. We still are not deciding the issue yet. We are looking at ideas and trying to determine which of those will be most helpful in designing a decision. We might have a brainstorming session with the other side. When we leave, we should set a time for us to decide.
Insist on Objective Criteria
When we construct the final agreement, it is important for us to insist on using objective criteria. The reason is we want this agreement to last and be accepted by the participants. If the agreement is perceived by one or more of the parties to be slanted, the agreement may not hold up. The parties may sabotage it. So the more we strive to apply standards of fairness to our agreements the easier it is to produce a wise and fair agreement. Therefore, we need to frame each issue as a joint search for objective criteria. We should search for the most applicable standards to the various interests involved. Once we have decided on the objective criteria we must not yield to pressure to set aside those standards (Fisher, Ury, & Patton).
Case
The Elk Knights of the Odd Fellows were sued by J. Construction Company. J. Construction had been contracted by the Elks to construct an old looking dungeon themed room. The Elks deducted several hundred dollars for what they claimed as incomplete work, for the project running over schedule, and for the wages, they had to pay their own janitor to clean up mess left behind by the contractor. J. Construction sued for $870 plus $100 in interest and $20 in court costs. Because the total claimed by J. Construction exceeded the $750 small claims limit J. Construction actually filed two small claims cases to try and recover. When the cases reached the Judge, he ordered mediation to resolve the two cases instead of hearing them both. (PON Harvard 2012). Now if we resolve this case using distributive or positional bargaining one side would be trying to win and the other side would lose. It is not clear from the facts listed who would prevail. Clearly, there would be a chance that one side would end up getting nothing and the other side everything. Therefore, the result is a win-lose scenario. Mutual gains bargaining seek to provide a solution that benefits both sides.
We are seeking a win-win solution. The mediator in this case would first separate the people from the problem. He would seek out the substance of the problem and not focus on personal issues. Therefore, if J. Construction said that the Elks were cheapskates who cheated him then the mediator would ignore that and seek to understand why that was said.
The mediator would also talk to, listen to both sides, and try to identify the interests behind the positions. He already knows that the Elks feel justified in modifying the amount they paid J. Construction. What the mediator wants to know is why and when he asks the Elks he discovers that they are upset with the results that J. Construction achieved. It was important to the Elks that the finished room looked old and antique. The Elks showed how the antiquing process dried and left big cracks that exposed the brand new wood underneath. This really upset them so they felt justified in modifying their bill because they were going to have to hire someone to fix the problem. The Elks Best Alternative to a Negotiated Agreement was to risk losing the case and pay the full judgment, which included about $120 over the amount they deducted. They also knew they might win and pay nothing.
J. Construction on the other hand had no choice but to file two small claims cases. The work was done specification of the Elks and there had been no complaint about the work. For the trouble in filing, J. Construction wanted compensation for court costs and interest. The mediator had identified the interests of the parties involved. J. Construction wanted to be paid and the Elks were unhappy with the work.
Now the mediator knows the interests of the parties. He would go brainstorm with the Elks. The mediator would go and brainstorm with J. Construction. He would get as many ideas as possible that would help him craft an agreement. He would engage in what if scenarios and etc. Eventually he would get a good idea of what would satisfy both parties’ interests and suggest that solution to them. Finally, he would propose a standard, which both parties could accept so that they could know that the result was equitable. An example of a solution that would benefit both parties would be to have J. Construction make the necessary repairs to the job and have the Elks pay the total amount owed. Both parties get what they really want.
Conclusion
In conclusion, the four steps of mutual gains bargaining are to: 1. Separate the people from the problem; 2. Focus on the interests of those involved; 3. Invent options for mutual gain; 4. Insist on using objective criteria. Following the procedures for mutual gains bargaining leads to wise and accepted agreements.
References
Daft, R.L. (2012). Management (10th ed.). Mason, OH: South Western.
Fisher, R., &, Ury, W., & Patton, B. (2011). Getting to yes: Negotiating agreement without giving in (3rd ed.). New York, NY: Penguin Group.
Hall, L. (1993). Negotiation: Strategies for mutual gain. Thousand Oaks, CA: Sage Publications.
Program on Negotiation at Harvard Law. http://www.pon.harvard.edu/shop/an-actual-small-claims-mediation/
Susskind, L.E., & Cruikshank, J. L. (2006). Breaking Robert’s rules: The new way to run your meeting, build consensus, and get results. New York, NY: Oxford University Press.
A Paper Presented To
Professor Michael S. Eagleson, JD
In partial fulfillment of the requirements of
MGMT 300, Principles of Management
University of La Verne
College of Business and Public Management
Glen Sallee
La Verne, California
09/08/2012
Introduction
Abstract
This paper will discuss the principles of mutual gains bargaining. A brief description of the characteristics and techniques of mutual gains bargaining will follow. A case highlighting how mutual gains bargaining principles and techniques were used in the real world will conclude this paper.
Mutual Gains Bargaining
One way to resolve conflicts is through negotiation. There are two main types of negotiation: Integrative negotiation and distributive negotiation. Integrative negotiation strategies, also known as or mutual gains bargaining, works to promote solutions that benefits both sides and win-win solutions. Solutions arrived at through the process of mutual gains bargaining are collaborative, creative and “expand the pie”. Distributive negotiation strategies are adversarial and begin with the assumption that the size of the pie is fixed. So distributive negotiators try and get as much of the pie as they can. Whoever gets the most pie is the winner. The loser receives less or no pie under distributive agreements and has little incentive to follow through with any such agreement. This paper will explore the methodology of mutual gains bargaining and contrast said methodology with distributive bargaining where appropriate.
Methodology
Separate the people from the problem
This is probably the most important aspect of mutual gains bargaining. Attempting to assign blame, accusing the other party causes the other party to become defensive. Telling the restaurant manager that he is a slob who never gets the restaurant clean causes him to become defensive and argue with you. The restaurant manager will show you his cleaning schedule and present witnesses who will swear they saw everyone cleaning. Then you will have to defend your initial position that the restaurant manager is a slob and show him all the examples of such. Both sides dig in to their positions and what is neglected is the issue that needed to be addressed in the first place: the dirty restaurant. A mutual gains strategy focuses on the issue, in this case the dirty restaurant, and not on assigning blame for the dirt. So instead of telling the manager he is a slob who never cleans we’d focus on the issue and say something like “Bill I’ve noticed several times now that the kitchen is very dirty after the lunch rush. I’m concerned about passing our next health inspection, as I know you are as well. Can we get together and figure out a way to improve this situation?” Well Bill being a reasonable person who sees that he is not being attacked personally is going to agree to meet with you and help figure out a way to fix up the mess.
Focus on interests, not positions
Interests define what the problem is that is responsible for the conflict. Our desires and concerns are our interests. People have basic needs of security, economic well-being, a need to belong, recognition, and control (Fisher, Ury, Patton, 2011). People use positions as defense mechanisms to keep and/or protect their interests. We must make an extra effort to identify the underlying interests causing the conflict. It is helpful to make a list of the various interests as you identify them. It is also important to make sure that we talk to all the relevant people who have a stake in the conflict and its eventual resolution. Pin people down to specific interests that they have. It is not enough to find out that we all want world peace or to be happy. It is ok to be hard on the problem just avoid being hard on the people.
Invent Options for Mutual Gain
When we are defining the various interests, we might be tempted to come up with solutions on the fly. However until we have identified all the interests of those involved any solutions we might come up with will be incomplete at best. We do not want to take all the time and expense to negotiate an agreement only to have to do it again because we prematurely put in place solutions that did not reflect all the interests of those involved. After we have identified those interests we should engage in brainstorming to find various solutions that will satisfy the different interests. It is unlikely that a single answer will solve any complex problem or conflict. It is also true that in distributive bargaining often times the parties, view things as winner take all or that there is a “fixed pie”. Mutual gains bargaining demands creativity from the participants involved. There are specific rules to follow for brainstorming sessions. Before we brainstorm, the procedure is: 1. Define the problem; 2. Choose a few participants; 3. Change the environment; 4. Keep it informal; 5. Choose a facilitator (Fisher, Ury, &Patton). So we want to know what our purpose in brainstorming is, get the right people into the session, arrange the session in an environment where the participants can devote all their energies towards it, keep it casual and relaxed, and have a facilitator to keep thing moving along.
While we are brainstorming, we do not want the participants to sit across from each other. We do not want them to think of this as a battle or a confrontation. We want them to collaborate in this process so we sit them side by side. We must clearly define the rules making sure that everyone understands that there is to be no criticism of any kind allowed. The facilitator is to enforce the no criticism rule. When everyone understands the rules brainstorm. Get as creative as possible. Make sure that the group comes up with a long list of ideas. Look at the problem form every side possible. The more ideas that the group can generate will make it easier to craft an agreement that everyone can live with later. Finally make sure that everyone’s ideas are recorded and that this is done with full awareness of the group (Fisher, Ury, & Patton).
After the brainstorming is over highlight the most promising ideas. Take the best ideas and have the group invent ideas to make them better. We still are not deciding the issue yet. We are looking at ideas and trying to determine which of those will be most helpful in designing a decision. We might have a brainstorming session with the other side. When we leave, we should set a time for us to decide.
Insist on Objective Criteria
When we construct the final agreement, it is important for us to insist on using objective criteria. The reason is we want this agreement to last and be accepted by the participants. If the agreement is perceived by one or more of the parties to be slanted, the agreement may not hold up. The parties may sabotage it. So the more we strive to apply standards of fairness to our agreements the easier it is to produce a wise and fair agreement. Therefore, we need to frame each issue as a joint search for objective criteria. We should search for the most applicable standards to the various interests involved. Once we have decided on the objective criteria we must not yield to pressure to set aside those standards (Fisher, Ury, & Patton).
Case
The Elk Knights of the Odd Fellows were sued by J. Construction Company. J. Construction had been contracted by the Elks to construct an old looking dungeon themed room. The Elks deducted several hundred dollars for what they claimed as incomplete work, for the project running over schedule, and for the wages, they had to pay their own janitor to clean up mess left behind by the contractor. J. Construction sued for $870 plus $100 in interest and $20 in court costs. Because the total claimed by J. Construction exceeded the $750 small claims limit J. Construction actually filed two small claims cases to try and recover. When the cases reached the Judge, he ordered mediation to resolve the two cases instead of hearing them both. (PON Harvard 2012). Now if we resolve this case using distributive or positional bargaining one side would be trying to win and the other side would lose. It is not clear from the facts listed who would prevail. Clearly, there would be a chance that one side would end up getting nothing and the other side everything. Therefore, the result is a win-lose scenario. Mutual gains bargaining seek to provide a solution that benefits both sides.
We are seeking a win-win solution. The mediator in this case would first separate the people from the problem. He would seek out the substance of the problem and not focus on personal issues. Therefore, if J. Construction said that the Elks were cheapskates who cheated him then the mediator would ignore that and seek to understand why that was said.
The mediator would also talk to, listen to both sides, and try to identify the interests behind the positions. He already knows that the Elks feel justified in modifying the amount they paid J. Construction. What the mediator wants to know is why and when he asks the Elks he discovers that they are upset with the results that J. Construction achieved. It was important to the Elks that the finished room looked old and antique. The Elks showed how the antiquing process dried and left big cracks that exposed the brand new wood underneath. This really upset them so they felt justified in modifying their bill because they were going to have to hire someone to fix the problem. The Elks Best Alternative to a Negotiated Agreement was to risk losing the case and pay the full judgment, which included about $120 over the amount they deducted. They also knew they might win and pay nothing.
J. Construction on the other hand had no choice but to file two small claims cases. The work was done specification of the Elks and there had been no complaint about the work. For the trouble in filing, J. Construction wanted compensation for court costs and interest. The mediator had identified the interests of the parties involved. J. Construction wanted to be paid and the Elks were unhappy with the work.
Now the mediator knows the interests of the parties. He would go brainstorm with the Elks. The mediator would go and brainstorm with J. Construction. He would get as many ideas as possible that would help him craft an agreement. He would engage in what if scenarios and etc. Eventually he would get a good idea of what would satisfy both parties’ interests and suggest that solution to them. Finally, he would propose a standard, which both parties could accept so that they could know that the result was equitable. An example of a solution that would benefit both parties would be to have J. Construction make the necessary repairs to the job and have the Elks pay the total amount owed. Both parties get what they really want.
Conclusion
In conclusion, the four steps of mutual gains bargaining are to: 1. Separate the people from the problem; 2. Focus on the interests of those involved; 3. Invent options for mutual gain; 4. Insist on using objective criteria. Following the procedures for mutual gains bargaining leads to wise and accepted agreements.
References
Daft, R.L. (2012). Management (10th ed.). Mason, OH: South Western.
Fisher, R., &, Ury, W., & Patton, B. (2011). Getting to yes: Negotiating agreement without giving in (3rd ed.). New York, NY: Penguin Group.
Hall, L. (1993). Negotiation: Strategies for mutual gain. Thousand Oaks, CA: Sage Publications.
Program on Negotiation at Harvard Law. http://www.pon.harvard.edu/shop/an-actual-small-claims-mediation/
Susskind, L.E., & Cruikshank, J. L. (2006). Breaking Robert’s rules: The new way to run your meeting, build consensus, and get results. New York, NY: Oxford University Press.