Robust Routers: A Negotiation Simulation Analysis of the Interplay of Relational and Power Dynamics

As a prospective and successful prospective MBA graduate, I, Joe Tech, was offered an opportunity for employment with Robust Routers. Robust Routers, who will be referred to from here on as RR is a technological company located in California, for whom I provided my services and abilities as an intern. Leigh Bultima, a leading executive of RR and friend of a fellow alumnus who served as our liaison, was impressed with my productivity and work ethic, hence providing the opportunity for employment contingent upon my graduating with an MBA degree. I was offered a pretty package, although the terms of employment were not the ideal terms. I have high standards for myself, and I expect the compensation to most accurately reflect my exemplary work ethic and productivity accordingly. As such, I will use a moderately aggressive negotiation strategy to reach an agreement of the terms of employment, with the aim of imparting my belief in myself and my abilities unto Mr. Bultima, who has become a friend as well as a supervisor along with the prospect of becoming a colleague. The following report will analyze our encounter and negotiation from each of our respective positions, including the terms, disparities, and strategies of each side.

The terms of Robust Routers were as follows: The proposed salary of the initial offer was $88,000 paid monthly, with an additional signing bonus of $15,000 to be paid within 30 days of acceptance of the position. I was initially offered a comprehensive benefits package including health and life insurance, paid sick leave, et cetera. The terms of the initial terms required that I relocate to California from my current residence in Tennessee, offering an additional $5,000 to assist with relocation expenses. Additionally, I was offered 1,000 stock options, with the incentive of gaining 500 each year of employment, up to three years.

The goal of my collaborative negotiations was to convince Mr. Bultima that I am an asset worthy of my complete terms of compensation. In quantitative terms, I requested a salary supplement of $92,000, $4,000 per year more than the initial offer. I proposed a signing bonus of $20,000 to be paid within 15 days of acceptance of the position, rather than thirty. A stock option of 1,500 was proposed, with the same incentive opportunity as previously offered. Finally, I requested that Robust Routers create a remote position rather than request relocation, upon which terms I would forego the $5,000 relocation offer.

I utilized an aggressive negotiating strategy to assert my terms of the position. This strategy served a couple of purposes. Primarily, my proposed terms of employment were obviously in my best interest. I believe that I am worthy of the upgraded compensation package that I requested. I had a particular preference for remaining in my native Tennessee as terms of employment. This is something that I felt strongly about, given that a relocation imposes undue stress upon my family. Secondly, assuming an aggressive negotiation role implies that I expect to be treated as an equal within the robust router executive office. As a former intern of the company, There may or may not be a lingering superiority among my prospective colleagues. Whatever the case may be, this action sends the unmistakable message that I am to be treated as a respected colleague and asset to the company.

My reasoning for using such a strategy to negotiate my terms is as follows: I am able to use the technique that best represents my interest because I am a young business person with an intimate knowledge of Robust Router company processes, and track record of success, both as an MBA student and as an employee of Robust Routers. As such, I am in an ideal position in the job market; a high-demand commodity sought after by technology companies around the United States. I have the ability to decline any offer that I am not fully comfortable with, which is a position of power in its own right.

However, one concern that I must keep in mind in my relationship with Mr. Bultima. We have multiple years of history as coworkers, and will almost assuredly remain in contact regardless of the result of these negotiations. It would not serve his or my own best interest to sever our working relationship over mere dollars and cents, as we still have a great deal to offer each other in the future, both personally and professionally.

I initially kicked off negotiations by stating my terms in full, as they are listed above. Leigh requested that we sit down to discuss the terms in full, implying that he has accepted my proposal to negotiate. I interpreted this as a positive sign, as Mr. Bultima is a seasoned industry veteran, and was fully aware of my intentions for negotiation. We scheduled a conference call for the following week.

To begin the conference Mr. Bultima asked that I restate my terms in full. We then negotiated each point individually, each of us stating our arguments for our respective positions until a sort of agreement was met. At one point, we had to refer to other points and make adjustments as sort of ‘bargaining chips’ in an attempt to persuade the other on a point that we each felt was more important. For example, we jumped from salary to relocation a number of times, adjusting our figures in order to find a middle ground of agreement or a concession.

In the end result, I accepted the position at Robust Routers. I was given a supplemented salary of $94,500 with a $25,000 signing bonus to be paid within 30 days of acceptance of the position. Full benefits were provided to me, with an additional seven days of paid sick leave if needed. The additional stock option of 1500 was also conceded in my favor.

Relocation was a hot point of contention throughout negotiations. I initially stated that I was not willing to relocate under any circumstances, due to the burden it would place on my family to uproot and relocate halfway across the country. I maintained that I would travel to California for monthly meetings, at full company expense. Mr. Bultima was firm in his stance to maintain the position as ‘in-house’. He cited that Silicon Valley is full of potential prospects just like me who would jump at the offer that I have been given. This was a valid point, to which I responded that my family takes precedence over lucrative job offers and relocation bonuses. Mr. Bultima then replied with an argument that quite frankly changed my position. He had researched ideal family residential locations within a 15-mile radius of Robust Routers business offices. He contended that the areas within silicon valley were affordable, very accommodating, and positioned ideally in beautiful sunny California, the nearby private high school was a nationally recognized institution with great connections to prestigious nearby Universities, which would be perfect for my two middle-school-aged children. He then offered to supplement my salary and bonuses to compensate for the costs associated with these schools.

This was a surprising turn that convinced me thoroughly and had changed my position regarding relocation. It was made clear that my friend and colleague clearly had my best interest in mind, and had gone far out of his way to create agreeable terms for my relocation. Ultimately, I accepted the position after he also conceded the request that I begin at the end of the summer rather than the beginning, in order to give my family and children a chance to acclimate themselves to their new home.

Overall, I feel that we both ‘won’ in negotiations. Robust Routers gained a young, successful, and knowledgeable business mind that is already familiar with the operations and the staff. I received quite a nice compensation package, which included even more than my initial asking amount, given that I only concede the point of relocation, a point which he argued quite eloquently. My sole loss will be that I will have to relocate away from my friends and family. However, this is more than compensated for by the newfound opportunities that will be created in my new California residence.

An intriguing balance of power and relationship maintenance was readily observable throughout negotiations. The fact that Mr. Bultima and I have been acquaintances for over two years was critical throughout. Mr. Bultima demonstrated to me that he is fully committed to my best interests, as he believes that my best interests are also in the best interests of the company. We both understood that relocation is both difficult and taxing. We also both understood that the position that I was being offered is much more effective as an in-house position rather than a remote one. Our mutual respect for each other and our relationship laid the groundwork for effective negotiation.

On the flip side of the relationship maintenance was the present power dynamics, which will be discussed more technically after a brief scenario explanation. Initially, Mr. Bultima asserted his power by referencing the scores of young business professionals in Silicon Valley. I then responded in a similar fashion and essentially implied that I would be able to seek employment elsewhere if my terms were not agreed to. This was a small risk in that a lucrative offer position that I was familiar with hung in the balance of this one single point. For Mr. Bultima, it essentially came down to these two options: 1) He would deny my offer for a remote position, and devote time and effort finding a productive and trustworthy candidate to assume the role in house, then exhausting more time, money and energy training this individual until prepared to fully take on the role. Or 2) He would concede on all other points in an effort to persuade me to relocate. He decided that the additional money would be well spent, as it would provide a seamless transition for the company that would prove profitable in the long run. We agreed to the terms. He did maintain some small power dynamic by requesting that my bonus be paid within thirty days rather than my requested fifteen, a point that I readily conceded given the favorable circumstances, as fifteen days without a signing bonus was not worth potentially losing the relationship and the offer. Ultimately, I believe that this point was made by Mr. Bultima in an attempt to gain a small victory in a negotiation that turned in my favor.

It is widely known that the influence of power plays a prominent role in determining the outcome of a negotiation (Bacharach & Lawler, 1981). As such, I made a point to stand my ground in terms of power assertion, as surely this tactic would come into play throughout the negotiation, especially given that Mr. Bultima was formerly my superior. This negotiation directly aligned with power balance theory, which states that the power between two parties is a) directly proportional to the outcome at stake and b) inversely proportional to the availability of this outcome through alternative means (Fragale, Kim & Pinkley, 2005) The struggle of power between Mr. Bultima and I stemmed from our desired outcomes, and our respective abilities to achieve those outcomes elsewhere as an alternative. While I was confident in my ability to receive favorable prospects of employment elsewhere, Mr. Bultima, while able to recruit from the silicon valley, did not have the option to recruit a unique associate who had the business savvy, personal relationship, and experience with Robust Routers that I could provide. Based on power balance theory, the scales tipped in my favor when we both came to the realization that I was truly an unequivocally the best man for the job.

To conclude, I accepted the position at Robust Routers under the following conditions: I am scheduled to relocate to Silicon Valley at the end of the summer. I will be compensated for a total of $94,500, with a $25,000 signing bonus to be paid within thirty days of my signing. I received a full benefits package, with an additional seven days of paid sick leave yearly. I am to receive 1500 stock options, with the opportunity to receive an additional 500 per year for up to three years. I am more than happy with the terms of negotiation and am optimistic about starting a new chapter of my life in California.

References

Bacharach, S. B., & Lawler, E. J. 1981. Bargaining: Power, tactics, and outcomes. San Francisco: Jossey-Bass

Fragale, A. R., Kim, P. H., & Pinkley, R. L. (2005). Power dynamics in negotiation. Academy of Management Review, 30(4), 799-822.