Discriminaton at Coca Cola Negotiation

Discriminaton at Coca Cola

Negotiation Strategies and Tactics

Distributive bargaining and integrative negotiation are specific negotiation strategies.

The approaches used in each of these methods vary greatly. Distributive bargaining is an adversarial and competitive technique that requires the negotiators to closely guard their own interests and is summarized as a win-lose method of negotiation. On the other hand, integrative negotiation focuses on reaching a meeting of the minds. Each participant's interests are considered and taken into account during the process. The sides are attempting to reach a mutually satisfactory conclusion; integrative negotiation is described as a win-win type of negotiation. For the purposes of this paper, both of these strategies are implemented in the context of the Coca-Cola discrimination case for the purposes of illustrating the behavior and communication of the attorney negotiators in the two different contexts. The first context is marked by aggression and intimidation before a conclusion is reached while in the second scenario the negotiators are mild and respectful of each other's interests and positions. For the purposes of this paper, each scenario reaches the same conclusion although by extremely different means.

Negotiation is an art which requires well defined skill to achieve successful results. Effective negotiators know the results they want and understand the skills require to achieve these results. The following traits are the common skills that successful negotiators all share: preparation and planning, knowledge of the subject matter, ability to think clearly and rapidly under pressure, ability to express thoughts verbally, and listening skills. Raffia (1982). Along with these skills, successful negotiators employ techniques such as distributive bargaining and integrative negotiation -- during the negotiation process.

Factual Background

It's Thursday November 16, 2000 at 7:00AM and I am on my way to meet my client, Donny Mitchell -- an employee of Coca Cola. After our meeting, we will then continue to what I believe should be the final negotiation for my client in his discrimination case against his employer. These negotiations have been ongoing for nearly a year. I am, Michelle Douglass, attorney at law, and I am one of the senior attorneys handling the case for our firm. One of the lead plaintiffs on the class action suit, Mr. Mitchell, is one of the many Coca Cola employees who sued the franchise for discrimination.

Mr. Mitchell is 48 years old and a father of three ages 23, 20, and 16.

He has worked for Coca Cola Company for 21 years as a delivery driver and his annual salary is $38,000. In the last five years, Mr. Mitchell has applied for a promotion as a supervisor four times. The promotion process includes an aptitude test and a series of interviews. Each of the four times, Mr. Mitchell did not score the minimum score on the aptitude test and was declined the promotion. Each of the four promotions was given to a white employee. Three of the four times, the employee who was awarded the position had less seniority than Mr. Mitchell. Mr. Mitchell has not received a raise in two years as Coca Cola cites to lack of economic resources. During the discovery process, it was revealed that the black employees at the company averaged $26,000 less annually than white employees. Winter (2000).

Our firm has been involved in negotiations with the Coca Cola Company since our law suit was filed in April 1999. Winter (2000). We have unable to reach a settlement. Our firm has determined that if we are unable to reach an agreement today, we are ready to proceed to trial on the case. After a brief consultation with Mr. Mitchell, I along with several of my co-counsel take our places at the negotiation conference table. On the opposite end of the table are the attorneys for Coca Cola, joined by Douglas N. Daft, Coca Cola's chairman and chief executive. Winter (2000). Approximately 80 of the nearly 2000 employees of Coca Cola, including Mr. Mitchell, are present in the gallery of the conference room. Winter (2000). It is approximately 9:05AM and we begin negotiations.

Distributive Bargaining Method

The distributive bargaining method of negotiation is a competitive, win/lose type of bargaining process. The principle is that there are limited resources to bargain with and the process revolves around who is going to the get the most out of these limited resources. Lewicki, Barry, Saunders, and Minton (2003). In distributive bargaining, unlike its counter part integrative negotiation, the goals of the parties are contrary to one another and both parties want to maximize their share accordingly. Lewicki, Barry, Saunders, and Minton (2003). It is important to remember that during distributive bargaining, a negotiator should avoid volunteering information, as this could ultimately harm his position during the negotiation. Levinson, Smith, Wilson (1999). All information should be closely guarded and offered strategically only when it will help the negotiator's position. Lewicki, Barry, Saunders, and Minton (2003).

Distributive Bargaining Method in Action

Attorney for defendant Coca Cola: For the record, it is 9:07AM. I am Arnold Smith, senior counsel for the defendant's Coca Cola Corporation. Also present are the associate counsel from my firm who will announce their presence. Joining us at the table is Mr. Douglas N. Daft, Coca Cola's chairman and chief executive. Also present at the table are counsel for the plaintiffs who will announce their presence. For the last year, we have been attempting to settle this lawsuit against our client. We have made a fair offer of $125,000,000 in as settlement in full to the plaintiffs. Assuming that there are 2,000 plaintiffs joined in this suit, this will permit each plaintiff to walk away from the table with approximately $62,000. This is approximately 2 times their annual salary and an excellent deal. (Mr. Smith's and the Coca Cola Corporation have a resistance point of $175,000,000 and a target point of $150,000,000.)

Attorney for plaintiff: For the record, I am Michelle Douglas, senior counsel for the plaintiffs in this case. On behalf of my clients, we openly reject the offer of $125,000,000 in this case. Our clients have undergone years of discrimination at the hands of Coca Cola and this has cost them millions of dollars total over the years. To offer them approximately $62,000 each is a travesty.

Attorney for defendant: Well, Mrs. Douglas, what type of numbers is your clients seeking? Our client is dealing with very limited resources as a result of the economy and we cannot go much higher than the number we offered. If your number is too high, we might as well get prepared to do to trial.

Attorney for plaintiff: Mr. Smith, our clients are seeking $200,000,000. It is highly unlikely that our clients will accept anything less than this for the many years of discrimination that they have suffered. Even if our clients were to accept an offer of $200,000,000 they would not be fully compensated for their losses. Our clients have suffered over the years. They have families to support. Someone like yourself, Mr. Smith, could not possibly understand some of the hardships that clients of ours, such as Mr. Mitchell, have endured at the hands of your client. He has lost much more than your offer could ever repay. He has children that are in college and his family survives off of a very modest salary. He has been denied promotions and raises over and over again while white employees with less seniority have received these positions. What is this that you're offering? Justice? Let's be real sir; you can do better than that! $200,000,000 is a fair settlement for our clients. (the resistant point for Mrs. Douglas and her clients is $150,000,000 while their target point is $170,000,000. Meanwhile, she is utilizing that hardball tactic of aggression through intimidation.)

Attorney for defendant: Mrs. Mitchell, I do not deny that your clients have suffered a loss, although much of what you have argued cannot be substantiated -- we are not here to argue the merits or justifications of promotions within the company. Nor do I intend to get myself caught up in your emotional whims. I am obliged to make offers that are fair to both my clients and yours rather than to make offers based on the fact that I feel sorry for someone. Because it is our goal to see this negotiation come to an end, we will increase our offer to $140,000,000.

Attorney for plaintiff: Listen sir, neither I, nor my clients have the time to sit here and allow you to diminish what their case is worth. Our clients such as, Mr. Mitchell, have worked for Coca-Cola for 21 years and is making only $38,000 and for 21 years, he has been continuously low balled by your client's company. He has never been paid what he is worth. I am embarrassed that you can make such a whimsical offer to a man and group of people that have been through so much already at the hands of your clients. (Mrs. Douglas continues with her hardball tactics of aggression and is now using intimidation through guilt.) if the offer were closer to $200,000,000 then it would at least be realistic considering all that my clients have endured over the years.

Attorney for defendant: Listen Mrs. Douglas, in total, we have been at this for some time now and we have made considerable progress throughout these negotiations. I feel as if we are close enough to reaching some type of agreement. We are currently offering $140,000,000 and you are asking for somewhere in the ball park of $200,000,000. We are not prepared to offer that to your clients, but we are prepared to take this case to trial and let the jury decide on this issue. In this case, they could lose and get nothing. We are willing to increase the offer to $150,000,000. They can take this amount today and walk away with approximately $75,000 each. The other option for your clients is to take nothing today and go to trial.

Attorney for plaintiff: We feel as if $160,000,000 would be fair.

Attorney for defendant: Our final offer is $156,000,000.

After discussing the offer and the implications of rejecting it with her clients, the attorney for the plaintiff accepted the offer.

Summary of the Distributive Bargaining Approach:

In this approach, the attorney for the Defendant started the process with the opening offer of $125,000,000. Considering that the defense attorney's target point was $150,000,000 and his resistance point was $175,000,000, his opening offer gave him enough room to negotiate without the risk of going much beyond his target point. His low starting point made it even less likely that he would reach his resistance point of $175,000,000. According to the article, How to Negotiate Effectively, a first offer that comes within a bargaining zone becomes a liability. Mandelbaum (2010). Mr. Smith effectively avoided his bargaining zone and left substantial room to negotiate.

In response to Mr. Smith's offer, Mrs. Douglas proceeds to respond by adopting her opening stance which includes aggression and intimidation. Mrs. Douglas's opening stance attempts to work to get Mr. Smith to modify his proposal by appealing to the notions of injustice towards her client and making specific references to her client's personal scenario. Mrs. Douglas's hardball tactics eventually lead to a concession by Mr. Smith. However, prior to his concession, Mr. Smith reminds Mrs. Douglas that their resources are fixed and limited which is a common trait of distributive bargaining. Finally, with the expectation of closing the deal, Mr. Smith provides alternatives to Mrs. Douglas -- either accept their final offer of $150,000,000 or proceed to trial and risk obtaining nothing. With these alternatives on the table, Mrs. Douglas manages to push the deal closer to her target point before accepting the offer.

Integrative Negotiation

The strategy of Integrative negotiation focuses on commodities among the parties rather than differences. This strategy attempts to address needs and interests rather than positions. Integrative negotiation attempts to meet the needs and interests of all those involved. Lewicki, Barry, Saunders, and Minton (2003). Integrative negotiation is considered a win-win for both sides involved. Successful interest-based negotiation (integrative negotiation) involves the following traits: honesty and integrity, abundance mentality, maturity, and superior listening skills. Laubach (1997). Throughout the integrative negotiation process, negotiators find hidden opportunities for what they can do for each other. It raises the stake in a negotiation, and the level of content between the bargainers. Karrass (1999).

Integrative Negotiation Method in Action

Attorney for defendant: For the last year, we have been attempting to settle this lawsuit against our client and we are aware that both sides have needs and interests that they will seek to have met. The plaintiffs are alleging discrimination and a subsequent loss of salary and raises. Documentation exists that the plaintiffs' salaries average $26,000 lower than those of their white counter parts. Winter (2000). We are here today to attempt to offer and provide a fair and equitable resolution to this problem and it is our client's goal that this type of problem be eradicated for the future.

Attorney for the plaintiff: Thank you, sir. It is our goal to reach a fair and equitable resolution to the problem that you have stated. With that in mind, we feel as if a fair settlement offer would be $200,000,000.

Attorney for the defendant: Mrs. Douglas, I do understand your passion for your clients. However, we are not prepared to offer $200,000,000. Our clients have financial limitations as well, but we are willing to work with you to reach a more favorable agreement for both of us. Tell me, what is your motivation behind this number?

Attorney for plaintiff: Our clients have undergone years of discrimination as you alluded to in your opening statement. We are seeking the fairest settlement for them that will at the same time best compensate them for their losses.

Attorney for defendant: I agree with you, but let's also look at this in a way that is more balanced for my clients. My clients, while compensating your clients to the best of their ability, also seek to provide a better work environment for everyone to ensure that problems such as the current are eradicated. This is also a benefit for your clients as well. With this in mind, we propose an offer of $125,000,000. This will give our clients economic breathing room to correct the issues in the work environment. I am sure that it is extremely important to your clients to have a less hostile work environment in addition to receiving economic compensation.

Attorney for plaintiff: You are correct, sir. However, I do feel as if they should receive more than $125,000,000. My clients could not be fairly compensated by this amount alone.