Management for Dental and Oral Health Professionals

**For Ad Hoc Honors Credit**

Name:  Rick Politician
Assignment:  Personal Case for Ad Hoc Honors Credit
Date:  June 2, 2005
Case Type:  Personal Life Example
Negotiating Parties:  Me vs. Dad

Background and Negotiation Description
            One day during elementary school my friend Zach explained to me how his parents gave him an allowance in return for chores he did around the house.  Personally, I did not have an allowance at this time.  Instead, my parents gave me a moderate amount of money when I needed funds for activities or for snacks.  They also had me helping out around the house as needed.  Zach’s situation sounded good to me as it provided more of a set structure.  Each week he had specified chores and a set allowance.  This structure allowed him to plan ahead and do his chores on his own time.  He also had the freedom to save up money that he did not spend each week from his allowance for larger purchases.
A few days later, after my dad had picked me up from karate practice, I worked up the bravery to ask him about setting up an allowance and negotiating the terms.  I had had time to think about the negotiation and this gave me a decisive advantage.  He thought an allowance sounded like a good idea so we started out negotiating over the chores I would do.  Some of the chores that needed to be discussed included washing the dishes, drying the dishes, taking out the garbage, cleaning the bathroom, vacuuming the living room, mowing the lawn, washing the cars and cleaning my room.  We decided to set up a weekly schedule as this appealed to my desire for organization and my dad’s desire for accountability.  We agreed that I would switch off each week between being either the dishwasher, or the dish dryer and taking out the garbage.  I would clean the bathroom and vacuum the living room once a month, clean my room when it got overly dirty.  For me to wash the car or mowing lawn would require additional financial compensation from him.
Next, we negotiated over money.  I wanted $12 per week to perform the above chores.  My dad appreciated my aggressive nature, but felt that $6 would be a more appropriate value.  For the moment, we moved on to negotiating the price of mowing the lawn.  My dad mentioned $9 for the whole lawn and I agreed.  We decided to split up the $9, $3.50 for the front lawn and $5.50 for the much larger back lawn.  We did this in case we wanted to split up lawn mowing duties each week between my younger sister and ourselves.  As far as car washing goes, we settled on $5.  I was not too worried about car washing.  Living in Memphis, car-washing season was only four months long, and often my parents would wash their own cars or utilize a car wash.  Coming back to negotiating an allowance, I proposed $8 per week and my dad agreed.  Knowing that I could make lots of money on mowing lawns during the summer, I was willing to settle for an allowance of $8.

Analysis
            This mixed negotiation allowed for lots of opportunities for my dad and me to expand the pie of resources being negotiated.  There were many chores for both of us to incorporate or leave out of the negotiation.  Since the chores can either be integrated into the negotiation or not and can benefit both parties, they are integrative resources.  The money for the allowance, mowing the lawns and washing the care is referred to as a distributive resource.  My dad has a fixed amount of money and that money must be distributed between him and me.  Since our negotiation contained integrative resources, the negotiation is said to have a variable sum.  Since my father and I had the opportunity to expand the pie by adjusting the variables of the negotiation, we created a win/win negotiation in which we both were better off.  Not having reached an agreed upon settlement would be considered leaving money on table, or being worse off than we could have been by agreeing on a settlement.  This situation would be described as suboptimal.
The opposite of our situation would be referred to as a win/lose or fixed pie negotiation.  In a fixed pie scenario a fixed pool of resources exists and the two parties negotiate over how much of the pool each side will receive; no outside resources are integrated into the negotiation. 
My BATNA is this negotiation would have been to continue to rely on my parents to give my money when I needed it, and me doing chores when they asked.  Although this was an acceptable alternative, I knew my dad and I could come up with a better situation.  Based off of my BATNA, I decided that I would not accept an allowance any less the $7 per week.  This would be my reservation point.  Since I had a predetermined reservation point, I would not develop a focal point.  Focal points are arbitrarily derived imitations of reservation points one creates during the negotiation. My target point for the negotiation was my $10 per week.  I would estimate my dad’s reservation point to be $10 per week and his target point to be $6 per week.  The following table illustrates our reservation and target points.  Thus, the bargaining zone (ZOPA), or region between our reservation points, would be $7 - $10.  The $3 range between these values can be called the bargaining surplus.

Chart 1 – Summary of My Dad and My Reservation and Target Points

 

The negotiation itself began with brainstorming ideas over what resources we wanted to add to the negotiation.  We invented options for mutual gain such as me cleaning my room and other chores that benefited me as well as my family.  This negotiation did not include a fix pie perception, as both my dad and I realized that our interests were not opposed to each other’s.  I opened the allowance negotiation with a first offer of $12 per week to try and set an anchor point, or an initial offer that sways the rest of the negotiation towards my target point.  This aggressive first offer was part of the strategic risk I had planned to use to maximize my negotiator’s surplus, or positive difference between my reservation point and the settled outcome.  This began the negotiation dance, or process of making offers between parties to reach a mutually agreeable settlement.  My dad immediately reanchored the negotiation with his counter offer of $6 per week to diminish the prominence of my initial offer and show his willingness to negotiate.
We both decided to make a calculated delay in order to continue negotiating over the allowance once we had discussed payment levels for lawn mowing and car washing.  My dad initially offered to pay me $9 for lawn mowing, to which I immediately agreed.  He probably suffered from the winner’s curse in this instance, as my immediate agreement signaled that his initial offer had probably matched or exceeded my target point for this part of the negotiation.
Dad and I both exhibited a principled negotiation or negotiation based on merits.  We focused on our interests and did not let ourselves become dug into positions.  We also invented options for mutual gain, ideas that provided utility for both of us.  Thus, there was no black hat (tough stance) or white hat (soft stance) concession characteristics.  There was little evidence of positional based negotiations, or quid pro quo concessions between dad and me.  Back and forth concessions occurred only at the end of the negotiation when we settled on the $8 allowance.  If we had dug in and stuck to original offers, that would have been seen as a commitment.  A person who refuses to budge from their first offer, making the initial offer their final offer, exhibits a phenomenon called Boulwarism.
Explicit negotiations involve people seeking a mutual agreement via a contract, while tacit negotiations involve indirect negotiations settled by actions taken by each party with no actual face-to-face negotiating.  The negotiation between my dad and I would be considered an explicit negotiation.  Although we did not have an actual written contract, there was a psychological contract in that both my dad and I felt psychologically committed to our word, or verbal agreement.  This is called the norm of commitment.  This situation was a mixed motive negotiation for myself in that I wanted to cooperate with my dad as much as possible because that was the precedent for our relationship, and I wanted to make sure the settlement of ended up within our positive bargaining range.  Yet, at the same time, I wanted to increase my utility as much as possible by securing a high allowance and an acceptable amount of chore responsibilities.
            My dad and I both desired to keep positive ongoing relations, where a good relationship is maintained with the other party, since we loved each other and would be living with each other until I left for college.  Another reason this negotiation was collaborative is that there was no scarce resource competition.  My father was not wealthy, but had more than enough discretionary income to pay me an allowance.  Lastly, dad and I needed to come to a joint decision since neither of us had all the power in this situation; both of us were dependent on the other to make the deal work.
            Looking back, if I were to do this negotiation again, I would probably incorporate an established pay increase into the verbal contract.  As I got older, I remember needing more and more money to participate in new activities.  My allowance definitely did not keep up with my needs as in middle and high school. 

Ending Elements
Resource being negotiated:                    Money, Chores to be done
Type of negotiation:                              Expanded Pie, Variable Sum, Integrative, Win/Win