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Negotiation is a communication process in which two or more parties discuss issues and attempt to resolve them via dialogue to resolve (Laubach, 2002). Negotiations constantly happen on a minor, major and intermediate stages. They also take place in the office and daily life. Negotiations in a workplace may take different forms such as salary negotiations, settlement negotiations, contract negotiations, union negotiations, during litigation purchase order negotiations, and more. Laubach argues that depending on the circumstance, different negotiations and negotiation strategies will be employed. Negotiation strategies also suffer failures (Laubach, 2010), as is the case of Kaiser Permanente Hospitals. The nurses of Kaiser Permanente Hospitals held one of the largest strikes in California history. A strike that could have been evaded had the negotiation processes between management and union representatives succeeded. The initial cause of the strike was failed contract renewal agreements between the hospital’s management and union representatives. The strike was called by 4,000 members of National Union of Healthcare Workers, representing mental health clinicians, clinical psychologists, licensed social workers and opticians. The union began bargaining for a new contract in 2010. The failed bargaining processes, in turn, led to two other unions walking out in sympathy with their colleagues. In total 17,000 registered nurses with the California Nurses Association/ National Nurses United, and 650 members of Stationary Engineers Local 39 joined the strike.
Using Kaiser Permanente as a case study, this paper explores the criteria of choosing good negotiation tactics, conditions under which bargaining processes fail and what to do to avoid such circumstances.
1.0 Negotiation Formats
Hopmann (1998) argues that while numerous types of negotiations exist, running the range from simple domestic negotiations to workplace negotiations to settle a civil suit. There are two main formats in which these negotiations occur. These are principled negotiation and positional bargaining. In the first instance, also known as integrative negotiation, parties work together to forge a value-creating agreement that leaves both parties happy with the outcome and with the status of the relationship. This was obviously not the case, factoring the failed bargaining between Permanente management and Nurse Union officials. Principled negotiation creates a joint environment in which parties establish shared interests and work together to build mutually beneficial solutions.
The second type of negotiations is Positional bargaining, also known as distributive negotiation, which normally involves arguing based on a fixed position (Jeong, 2016). Each side takes an extreme position based on its needs, wants, and limits. According to negotiation expert Won Jeong, the positions assumed are almost always on opposite ends of the gamut. This seems to be the card game being played by Permanente and Nurse union parties that led to the failure of their bargaining, hence the strike. Both parties treated the negotiation as a zero-sum game in which only one party can come out victorious in the negotiation. The union officials wanted the contracts of the nurses renewed and their benefits to remain intact, the Permanente team on the other end seemed to want to do away with both. Thus by with extreme positions and making only small concessions, both parties made the negotiations tense and dragged on. A failed negotiation/strike then ensued, following a stalemate.
2.0 Kaiser Permanente’s interests
Kaiser’s management sought to reduce its operational costs as, according to its management, the health provider was accruing losses through extensive benefit schemes and bloated staff. The health provider’s options to achieve its goals, aimed at first, reducing its staff. This was to be achieved by reducing the contract years of their staff that was the inception of the strike. This reduction in contract periods started with staff the dental unit. Second, the management of Kaiser sought to reduce the benefits extended to its nursing staff. This was to be achieved by doing away with benefits deemed unnecessary by Kaiser Management.
3.0 Nurses Union, Nurses and their interests
In direct opposition to the adjustments by Kaiser Management, the nurses argued that the changes were illegal and malicious. Union officials argued that Kaiser’s CEO took home nearly $9 million in compensation in 2010 and other top managers enjoyed lucrative salaries, bonuses and perks. This compared to the salaries and benefits of many nurses that were now at the edge of unemployment, seemed to be meager sums, a non-comparable situation as per the union officials. The subject of cutting down on staff contract terms also met equal opposition. Psychologist Adam Front from Kaiser argued that Kaiser understaffs its mental health units, thus even at present, the facility does not have adequate resources needed to provide sufficient healthcare for its patients. In support of Front’s view, the Nurses Union argued that Kaiser is already understaffed. Thus the existing staff is overworked. Cutting down on their benefits would only add insult to injury. As per Gimpel (2007), negotiation situations with parties unwilling to shift with regards to their wants barely succeed, unless, a third and impartial body, puts across a measure that both parties have to agree to. This was the Ministry of health, which, unfortunately, did not intercede.
Equally, while choosing the preeminent negotiation options, several factors need to be considered to ensure that the parties leave the negotiation table satisfied.
First, it is important to consider and classify the relationship of the parties involved in the conflict. In the case of Kaiser and its employees and extensively, the Nurses union, the relationship seemed to have been hostile even before the issue. According to (Gimpel, 2007) there are several levels of relationships that have to be put into consideration. These include; cooperative negotiation, continuous negotiation, intermittent negotiation, and crisis negotiation. To put the issue at Kaiser to rest, a multi-faceted approach should have been used, integrating the different negotiation schemes and supporting the schemes by the strength of off-table relationships. This, according to Gimpel, achieves stronger relations and leaves room for further negotiations, be there any emergent issues. Also, both long-term and short-term effects are mitigated.
Crisis negotiation is normally used when one of the party stages a confrontation as in this case, a strike. The nurses of the dental section decided to down their tools, and in solidarity, the remainder of the employees called out for a strike which led to a standstill in the hospital’s services. Without effective negotiation and crisis mitigation talks, a situation can easily implode (Jeong, 2016). Crisis negotiation was important to aid in solving the immediate problem which was the strike of the nurses in the dental section. Jeong argues that if the initial needs of the aggrieved party are met, a show of good faith/rapport is established. This goes on to smooth the rest of the negotiation process. In this circumstance, the said move would have led to calling off of the strike allowing negotiations to ensure, in a less pressured environment (Jeong, 2016).
Intermittent negotiations could have also been a critical tactic in this scenario. The employees and the management at Kaiser Permanente hospital had a good relationship before the management threatened to make reductions on their health coverage and benefits. This kind of negotiation is important as it would have had the support of the relationship that existed between Kaiser Management and employees at the hospitals. It was important to conduct this negotiation to evade mistrust between the parties which may have lead to the stalemate between the two parties.
A Continuous negotiation is conducted when there is an ongoing relationship between the concerned parties (Laubach, 2002). Kaiser Permanente management and the employees have an ongoing working/professional relationship; it was the overlying fault of the Kaiser management team not to have taken advantage of this relationship.
5.0 Best Alternative to Negotiation Agreement
BATNA is a term that was coined by Roger and William in 1981. The said term was in use in the book, Getting to Yes: Negotiating Without Giving In. BATNA stands for "Best Alternative To a negotiated agreement." In a nutshell, it is the best a party involved in a negotiation process can do if the other party refuses to negotiate with them. In this instance, it is what Kaiser Permanente’s team would have done, once the nurses union declared a strike and left the negotiation table. BATNAs are critical to negotiation because it sometimes is not easy to make a wise decision about whether to or not to accept a negotiated agreement unless one knows what all their alternatives are. Fisher and William argue that having a good BATNA increases a party’s negotiating leverage. If any of the parties involved in a negotiation have a good alternative, they do not need to concede as much. This is due to the reason that they are not as likely to lose as much if they win or lose the deal under negotiation
Having a BATNA also means that the party having the BATNA can push the other side harder. In this scenario, Kaiser had the best BATNA as it was able to hire replacement staff, hence irrespective of how long the strike went on, it would still earn revenue as its services were still being offered. Also, patients are not likely to care who treats them, as long as they get treated. Thus, the options of the nurses were slim and almost nonexistent. Kaiser could then have made increasing demands, and the nurses union would have been more likely to accept them as they don't have a better option.
The nurses union, however, had a weak BATNA, but prudently, they kept this detail hidden. They relied on the pressure from the nurses union and the tyranny of numbers that lay firmly on their side. Using these, they were able to push the management of Kaiser to a collective agreement, despite Kaiser’s management having a stronger BATNA.
Guy Burgess and Heidi Burgess have adapted the concept of BATNA slightly to emphasize what they call "EATNAs." This they termed as an “estimated alternatives to a negotiated agreement" in the place of "best alternatives." Even when disputants do not have good options outside of negotiations, as in the case of the Nurses Union and Kaiser Permanente, they often think they do. For instance, both sides seemed to think the other is weaker in this scenario. Kaiser seemed to think the Nurses union is weaker given its BATNA and economic ability, whereas, the nurses union thought Kaiser to be weaker as they had the advantage of numbers to their side and the pressure from their union. Perceptions are all that matter when it comes to deciding whether or not to accept an accord. If a disputant thinks that he or she has a better option, she will, very often, pursue that option, even if it is not as good as she thinks it is.
Alternatives resulted in failed negotiations include; bringing in a trusted third party.
Sometimes negotiations stalled as in this scenario since one or both parties are reluctant to put their best offer on the table. Thus, both Kaiser and the Nurses union should have suggested enlisting a trusted, neutral third party. Such a party could have been the ministry of health. In private meetings with the third party, each side could disclose its bottom line; the third party could then advice if a zone of possible agreement, or ZOPA, exists.
Alternatively, the line-up of negotiators could have been changed. Both of the teams involved were having difficulty closing the deal at hand. Thus considering bringing in replacements would have been a viable option. A new team on one or both sides may be able to look at the negotiation with fresh eyes, free of any emotional baggage or personality clashes that could be holding the negotiations back.
Christopher L., (2002), Mastering the Negotiation Process: A Practical Guide for the Healthcare Executive, Health Administration Press, Pennsylvania.
Henner G. (2007), Preferences in Negotiations: The Attachment Effect, Springer Verlag, Germany.
Ho-Won, J. (2016). International Negotiation: Process and Strategies Cambridge University Press, New York.
Terrence, P. H. (1998). The Negotiation Process and the Resolution of International Conflicts. University of South Carolina Press, S. Carolina.
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