The principal problem MCA made was the decision to put down pledges as incomes instead of actually waiting for the money to materialize. It was Keith's radical ambitious plans that resulted to this move and ideally led to the museum almost becoming bankruptcy. Peggy Fischer was elected at the helm of the board at the time when the museum financial soundness was in critical jeopardy. Some members of the board thought taking legal action against the Smiths was the logical thing to do, however, Peggy did not agree as a suit would certainly ruin the longstanding reputation of the museum. This was especially at this time when it was reported that Peter had been diagnosed with cancer which meant that they were facing some financial difficulties of their own. The museum's financial situation could however, not go unnoticed as they would have to shut down if they failed to come up with a way to recover the $5 Million from the Smiths.
Peggy believed in a more rational way of holding negotiations with the Smiths and trying to convince them to honor their pledge since it was the moral thing to do. Negotiations are viewed as the most subtle way of redefining an old relationship that seems not to be working to each party's satisfaction and forming a new relationship that is more responsive to both party's needs and is cordially accepted. For negotiations to be successful, it is fundamental that both parties identify where the problem lies. Educate one another about what they believe will make meet each other's needs and finally settle the problems they are facing by coming up with potential and viable settlement options. They do this while bargaining which settlement option is most feasible before arriving at the final conclusion (Jochemczyk & Nowak 2010). She knew if she could get a hold of them, she could convince them to pay the money so as to save the museum.
To achieve this through negotiation as opposed to legal actions, there are certain goals that have to be established for negotiations to be successful. These include; creating interdependence between the two parties. For negotiations to be successful, both parties must depend on each other in a bid to get what they want (Jochemczyk & Nowak 2010). In such a situation, Peggy resolved to keep the more drastic step of taking the Smiths to court but by negotiating with them to pay the pledge. Though the board believed that they could not entirely get the full $5 million, they wanted some payment that was near the agreed sum. The smiths were dependent on the negotiations being fruitful without the need for court battles especially at the time when he was sick and needed all the rest. The board was dependent on the negotiations to avoid going bankrupt. They did not want to use their legal strategy that would only add to extra expenses to their already crippled financial soundness.
According to (Jochemczyk & Nowak 2010), the main goal of a negotiation is always to reach a common ground. Since both parties cannot get entirely what they want, reaching a common ground that is fair to both parties and where everyone gets a share of what they wanted is what builds a mutual understanding and a successful negotiation. An overiding goal when beginning negotiations is creating the will to settle. Both parties must have something to lose if the negotiations are not fruitful and if so, there would be a willing to settle so as to benefit. As the chairperson of the board, it was her responsibility to get the best deal in the negotiations. She wanted to settle the matter amicably without resulting to legal cases as this would harm the museum's reputation and question her leadership ability to chair the board. The BATNA method of taking legal suit would severely dent their image on top of being very expensive. According to Lee, a member of the board, the law suit would not only anger the Smiths, but also prevent them from never making a donation to the institution. It would as well irritate other donors who would stop making donations for fear of harsh repacations for failure to honor the pledges.
In settling them matter through negotiations, it would rebuild the once torn down relationship between MCA and the Smith. Convincing them that the donation is for the good of the institution and that it would go a long way in helping many generations to come, is the corner stone of building trust in the negotiations. It is essential to restore the strong relationship that was once there by being morally upright despite the board not supporting Peter's decision. Peggy knew that her position required her to find a way to get the donation from the Smiths regardless of which method she used but Peggy knew though they had not been close friends, they had worked together and suing Peter was the wrong thing to do especially the museum being a non- profit institution. It would paint a negative image of the institution being money hungry and never had a non- profit institution won such a massive settlement from legal suits (Reb 2010).
To ensure the success of the negotiations, it is important to reach a common ground where each party will feel that they stand to gain or benefit from the success of the negotiations. Where one party feels oppressed, an agreement is unlikely to be reached leaving MCA taking more harmful legal actions. Where both MCA and the Smiths agree on a way forward, they can only do so where mutual gains exist. Since it is evident that MCA went ahead with the construction based on the pledge of the Smiths, it would only be fair that the Smiths meet their part of the deal by meeting their moral obligations of paying the money. It is however, morally upright that MCA not pressure the Smiths as they are facing a difficult situation of Smith being sick. They need to arrive at a mutual agreement of the amount Peter should pay, by creating a logical payment plan for the Smith bearing in mind that they also have medical expenses they have to meet. MCA should also reduce the pledge so as to remove the heavy financial burden, this is certainly a materly tactic of making the Smith more inclined to pay the pledge. Peter Smith may also be added back as a member of the board once he has the strength to do so in honor of his contribution when he was chairman.
Some more tactics to be used to ensure that the negotiations are successful is by never putting too much pressure on the smiths by giving them deadlines. This will certainly kill their commitment as they will feel as if they are being forced into paying a donation they are supposed to pay willingly. It is crucial not to dwell on the reasons as to why Peter left the board, these are merely old personal issues that are not the primary agenda and which are likely to evoke strong emotions that are unwanted. Creating a healthy relationship with the Smiths by showing sympathy during their difficult situations and slowly introducing the main issue at hand is a more effective tactic of ensuring compliance. It is critical that Peggy not be too rigid in her advance for payment of the pledge (Reb 2010).
She should certainly consider the perspective of the other Smith's side by analyzing their current situation and not demanding too much for them. Showing that you are concerned and are willing to listen and help is a smart tactic for creating trust with the Smiths. Peggy should support her arguments with testimonials as to why the pledge is so important to the museum. The Smith loved the museum so much that they devoted themselves whole heartedly to its progress, hence, showing concern why such money is so important by pointing out the consequences of not receiving the pledge is an effective way of softening up the other party. Explaining that the society runs to lose a lot should the museum become bankrupt close down would certainly encourage the Smith to contribute (Dimotakis & Conlon et al. 2012).
The power advantage Peggy may use was the fact that, though she is the chairperson, she wants to do what is in the best interest of not just the museum, but also what is in the best interest of the Smiths. Showing the fact that they share the same values and an ideal of wanting MCA to grow into a reputable institution, is a good foundation for basing the negotiations. Peggy talking to the Smiths as the new chairperson has its advantages as the Smiths are able to address their issues directly knowing that they will be acted upon. Having been the chairman, Peter certainly knows the hardships that come with the job and he would be more responsive…