Conflict Management In this negotiation, an agreement was reached between the employer and Joe Tech. I am satisfied with the terms of the agreement. The major sticking point was the relocation, as I prefer to remain in Nashville Not only is Nashville home, but my salary will go a lot farther in Nashville than in Silicon Valley, as the cost of living in California is very high. As the result of this aspect of the negotiation, my purchasing power will be substantially higher. From both a financial and a personal perspective, the ability to telecommute from Nashville was the most important thing I wanted to get out of the negotiation, along with reaching agreement to accept the position. In this negotiation, the most important point was really the driver of the negotiations, and it was not known if this was going to be a deal-breaker for the company or not.

There were some points where I was not able to get what I was seeking, but it was important to recognize that once I had received agreement on the telecommuting option the other factors were not as important. The company and I split the difference on the salary and both sides made concessions with respect to the bonus. It was reasonable to offer clawback on the signing bonus as well and since I expect to complete two years at the company I see this as only a minimal risk. In truth, if I have to forgo any of the signing bonus by switching firms, I would seek the difference from the hiring firm.

2. There was no settlement here. I was willing to forgo most things in this negotiation, but I would not have taken either a reduced salary or a reduction in the stock options, which I assume are calls. I think that if I needed to secure employment I would have been in a more difficult situation. I felt that since I am not yet finished school that I would be a in a good position to negotiate favorable terms...

Not needing this job in particular allowed me to be assertive in my desire to stay in Nashville. I think that for me I do not have any relevant family right now It is good to stay here, but since I do not have a child I did not need to take that into consideration. I am not sure how having a family would have affected the negotiation.
I think that both parties won the exercise. The company has received an employee that they like and the employee was able to secure a good job on his own terms. This is a good negotiation that resulted in a win-win.

3. The power in this negotiation was with the applicant. While RR is a desirable company and likely could find other qualified people, they clearly wanted Joe Tech, as they offered him the job at the end of his negotiation. They were willing to wait for him, so in this case they played their hand, and had to expect that a negotiation would occur. They ended up keeping the salary and bonus terms close to what they had initially offered, which they might not have expected to.

The bargaining power for Joe came from the fact that he, as a student, was going to be in a position to consider a number of offers. While RR is dominant in his industry, as a product manager he would be able to work in many industries. While overall unemployment rates are up, those for employees in Joe's category of young MBAs are still low. This means that for his skills Joe is in a seller's market.

Joe was able to demonstrate that bargaining power by getting the company to agree to him staying in Nashville. That required substantial bargaining power so in a sense if this was a make or break issue for Joe he had to take the gamble. As it turns out, the respective bargaining positions of these counterparties was affected by information asymmetry. Joe knew…