Negotiation strategies in the Coca-Cola discrimination case

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).

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.

Attorney for defendant: I do understand that. Let's consider what else we can do for your clients.

Attorney for the plaintiff: Offer more money? Let's consider the logistics here. If our clients accept your offer of $125,000,000 they would receive approximately $62,000 each as there are 2,000 plaintiffs in this case. For the amount of years they have endured the discrimination, I cannot agree that this is not a fair offer.

Attorney for the defendant: Very well then. We are prepared to offer $140,000,000 as compensation for your clients and to give each of them raises of 3% on their current salary.

Attorney for the plaintiff: That sounds like a fairer deal, however, our problem with this would be the likelihood that if a client does not remain with your company they will be prejudiced by this deal, and I would not want to see this happen. Why don't we do this -- our clients will take $165,000,000 and the 3% raise.

Attorney for defendant: $156,000,000 and the 3% raise.

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

Summary of the Integrative Negotiation Approach: In this integrative negotiation approach, the defense attorney begins the process with defining the problem while expressing sensitivity to the needs and interests of the plaintiffs. Many writers on negotiation have stressed the key to achieving an integrative agreement is the ability to understand and satisfy each other's interests. Fisher, Ury, Patton (1991). Next, the attorney for the defendant proceeds to assess the plaintiff's interest and needs in light of the offer that the attorney for the plaintiff has proposed. Not prepared to accept this offer, the attorney for the defendant inquires as to the rationale behind the offer with the expectation of better understanding the plaintiff's interests.

The plaintiff's attorney responds that that their interests are primarily economic and principled. During the process of integrative negotiation, there are numerous competing interests that each side could claim: substantive interests defined as economic and financial issues, process interests defined as the way a dispute is settled marked by a desire and enjoyment for negotiation, relationship interests defined as a desire to protect the relationship that the parties have with each other, and interests in principle defined as a desire for what is fair, just, and right. Lax and Sebenius (1986). In response, the attorney for the defendant mildly interjects his clients' interests as being primarily substantive before counter offering. During the negotiation, each side is careful not to disrupt the atmosphere of trust that was initially established in the beginning. Each side listens to the other and remains flexible to the other side -- both of these are characteristic of the integrative negotiation process. The negotiation proceeds and ultimately concludes with the defense attorney generating an alternative solution -- he both increases their offer and includes the option of a 3% raise for each of the plaintiffs. While this offer of a raise is attractive to the plaintiff's attorney, she proceeds to evaluate other alternatives before she accepts the offer and ultimately closes the deal.

The various techniques can be involved in the art of negotiation. In two of these -- distributive bargaining and integrative negotiation the participants approach negotiation in strategically different ways. Nevertheless, if one is a successful negotiator, the results will be similar -- a resolution that each side can be satisfied with in light of their interests, needs, and objectives.