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BUSS: Labor negotiations

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IWithholding Information

a. Identify ethical systems that may guide the parties to a negotiation.
b. Examine the substantive fairness of the negotiation.
c. Examine the procedural fairness of the negotiation.
d. Differentiate between concealment behaviors in negotiations that are ethical and those that are unethical among the parties in the negotiation.
e. Evaluate how the parties can learn to create trust in a one-shot negotiation and in a long-term negotiation relationship.

During recent labor negotiations, both parties knew that the rising cost of health insurance was going to be a major issue. Two years earlier in an attempt to curtail costs, the employer's management, without publicizing or concealing the fact, decided to become self-insured. The previous insurance provider had agreed to become a third-party administrator, so it was likely that the change would not have been apparent to the employees. During the current negotiations, the employer asked that the employees agree to change benefits in order to lessen the premiums the employer paid for the health insurance. The employer told the employees no other measures could be used to reduce those growing costs. In response, the employees asked the negotiator if the employer would consider becoming self- insured so their benefits could stay the same while the employer would be able to control the costs because there wouldn't be an insurance company realizing a profit from their contributions.
It became apparent to the employer's negotiator that the employees had not noticed the change to self-insurance two years earlier. Unfortunately, any savings by becoming self-insured had already been realized in the health care program and would not change the employer's need to have benefits reduced now in order to cut costs in the future. The negotiator worried that if the employees knew their employer had already become self-insured, they would not be willing to give up some of the plan's benefits, expecting rather that the employer absorb the cost. On the other hand, the negotiator wasn't sure it was right to withhold the information from the employees, regardless of the outcome of the negotiations.

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I have outlined a response for you using the statements. If you have any further questions or need clarification, please ask.

Identify ethical systems that may guide the parties to a negotiation.
For the negotiator, there should be value creation. The negotiator represents the employees. (S) he, therefore is bound to serve their best interests, even if provided through the company. The company is most likely value claiming in this case. They have value, which they wish to maintain.

b. Examine the substantive fairness of the negotiation.
The fairness is limited, once it is discovered the employees are unaware of the changes by the company to a self-insured program. The company should have previously, upon the change, notified the employees, even if their coverage benefit did not seem to change. There is always a possibility of needs changing and changes in the future, which the employees are paying for and should be party to. Therefore, the company has an unfair advantage in terms of information available.

c. Examine the procedural ...

Solution Summary

A review of the ethics of negotiations using the supplied information and statements.

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Re-enact a historical negotiation scenario through role play and imagined dialogue and analyzes the negotiation scenario.

Part 1 (Group):
As a group, choose a well-documented negotiation scenario from history. The scenario could be a business acquisition, a labor/management dispute, or a political disagreement-any situation that involved a negotiation process between two (or more) parties, whether or not the situation was settled successfully. After your group has decided on the scenario, each student should choose a role from among the various parties in the negotiation. For example, if your scenario is a U.S. baseball strike, different students would play the roles of the baseball players' union, the team owners, the baseball commissioner, the courts, etc. If there aren't enough roles for each student, then share role duties with another student.

Once you have chosen your roles, do some background research on your party's motives and interests in the negotiation. Then use the Small Group Discussion Board or Chat rooms to create an imagined dialogue between the various negotiating parties. Think about your party's feelings, motives, and interests, and present them by posting snippets of dialogue on the Small Group Discussion Board. Ask questions of your opponent. Hide information from your opponent if your party did so in real life. Propose and respond to settlements. Perhaps your party isn't even aware of his or her interests, in which case you can present this lack of awareness by being vague in your dialogue.

Example dialogue:

BASEBALL PLAYERS' UNION: The players have decided to strike because they aren't happy with their contracts.

STADIUM FOOD VENDORS: A strike might force the cancellation of the entire season! This could ruin my business!

FANS: You already earn extremely large salaries. What more could you want?

BASEBALL PLAYERS' UNION: Our terms are as follows: [terms X, Y, and Z]

TEAM OWNERS: Couldn't we finish this season and just keep negotiating?

BASEBALL COMMISSIONER: I propose the following: [settlement proposal X]

and so on.

Don't worry if the dialogue isn't completely historically accurate. What matters most is that you present your party's known position and actions as fully and accurately as possible so that you and your group have enough information to analyze during the second part of the project. Be sure to preface your bits of dialogue with your party's name so that other students know who you are representing. Use your imagination and have fun! If possible try to choose a time when everyone is available to participate synchronously (this isn't absolutely necessary, but it will help make the dialogue more spontaneous and fun). If this proves to be too difficult to coordinate, then summarize your parties' positions, motives, and interests in longer, more comprehensive dialogue posts.

Part 2 (Group): Analyze the negotiation scenario
Divide the work among group members. Summarize and analyze the negotiation in a 3-5 page project. In your analysis be sure to address the following:

Who were the parties?
What was the final outcome?
What were the alternatives to a negotiated agreement? Were the parties aware of these alternatives?
What were each party's set of interests? Were the parties aware of their interests?
How did the parties create or claim value?
Indicate whether any party made any of the following cognitive mistakes in the negotiation:
Assuming a fixed-pie perspective
Lack of awareness of framing effects
Nonrational escalation of conflict
Negotiator overconfidence
Negotiator egocentrism
Anchoring
Ignoring the cognition of others
If cognitive mistakes were made, how did they affect the negotiation? How might the parties have acted differently?
I have chosen the Sears/ Kmart merger. How should I approach this?

Submit a final draft in APA 5th edition format.

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