What is the Problem as seen by both parties, and what argument can be used to defend their position?

Final Paper CMN4131 Winter 2021
Part 1 – Negotiation (25 marks)
Scenario: Salary Negotiation
Applicant’s Summary
Tom Wilson is a senior graduating from a large western university. Tom has majored in finance for the last 4 years and is graduating at the top of the class. Like many students at the university, Tom has an active life outside of the classroom and has made the most of his time at the university by developing the professional and social aspects of his life. Tom is active in campus life, volunteering for clubs and dedicating a portion of his time to helping at the local homeless shelter. In addition to charitable activities, Tom has also worked as a cashier at a grocery store and developed a strong customer service skillset.
Over the summer Tom had an internship with a large Fortune500 company working as a financial consultant. This opportunity helped Tom develop a strong interest in pursuing a career as a financial consultant and gained some valuable experience for his future career. In addition to developing professionally, Tom also met his girlfriend Sally in their third year. As it turned out, Sally was an accounting major with similar interests. After graduation, the two are going to marry and start their lives together.
Tom is facing the challenge of finding employment after university, but recently got a significant break. Tom had submitted a resume to Great West Life Financial Services, an up-and-coming investment firm in the area, and they extended an interview opportunity. Tom believes the interview went extremely well and he is hopeful that the firm will make contact soon with their decision.
Tom has researched other firms in the area and has determined that starting salary for a position like this one is wide ranging. The minimum starting salary was reported at $55,000 with the maximum salary reported at $75,000. Tom and Sally would love to start a family and hope that they can begin to save money for a home. A $75,000 starting salary sure would help, but Sam hopes to command at least $65,000 in the current marketplace.
Due to the level of activity in Tom’s undergraduate education and resulting class standing, Tom has also been pursued by Greenbank Financial Services. Greenbank is an older firm in the neighbourhood but is less attractive to Tom due to its more conservative investment strategies. However, Greenbank would provide an adequate place for Tom to begin working if a job with Great West Life does not work out.
Employer’s Summary
Bob Peterson is a Senior Manager of Finance for Great West Life Financial Services. Bob has been looking too long for a new financial consultant. In addition to the challenges of managing 30 financial consultants, Bob has also been tasked with hiring for the new position. While the market brings in many candidates, the challenge is finding the “right” candidate. Bob is looking for someone with the right qualifications and ambition to fill the position.
After a 6-week search and many interviews, Bob finally interviewed a candidate he believes might be the right fit. Tom Wilson was a great candidate. His resume was incredible and had a dedication and professionalism that exceeded that of other candidates. Tom came off as genuine with a real passion for finance that Bob had not yet seen in any other candidate. Tom reminded Bob of himself when he was younger. Since Tom is graduating at the end of this semester, this would allow him to start in the new position.
Bob plans to contact Tom after lunch. In that call Bob plans on offering the position and explaining the compensation package to Tom including a salary, vacation, and a summary of the benefit program offered by Great West Life. Bob hopes that Tom, like so many others finishing their degrees, will be thrilled to have the opportunity to have a position immediately after graduation, and this eagerness for a position will allow Tom to accept the position at a reasonable salary. Bob does not know if Tom has any other offers, so he wants to make sure he makes the right offer that is reasonable.
Determine the following for both Tom and Bob in negotiating the salary agreement. Briefly explain your reasons for each section (if applicable). Answers for this section should be 1-2 pages in length single spaced.
A. Interests
B. Bargaining Range
· Target Point
· Resistance Point
· BATNA
· WATNA
· Opening Bid
C. Invent Options. What are some additional options that can be offered from both sides?
Part 2 – Mediation (35 marks)
Scenario: Family Dispute
Terry and Bobby have been sharing an apartment for 1 year. Terry, the eldest, has a well-paid professional job and finds no problem paying $900/month for rent while Bobby pays $600. Bobby is currently unemployed and receiving Employment Insurance (EI), and as a result, has much tighter budget. They have come to you because Bobby is often unable to pay his rent consistently, so Terry has begun to hold Bobby’s Employment Insurance cheques until the end of each month to guarantee that he pays his portion of the rent first, before spending it on extra-curricular activities. They need help negotiating their current living arrangements.
Additional Facts about Terry
Terry is having a lot of difficulty with Bobby. He did not pay last month’s rent and was late the month before. Terry is feeling a bit fed up because Bobby constantly has friends over and goes out drinking and doesn’t seem to be looking very hard for a new job. Terry feels like she has to look after Bobby, and also doesn’t approve of his lifestyle. In addition to paying the larger portion of the rent, Terry has to pay the following monthly expenses by herself.
· Hydro ($100/month)
· Phone/Internet ($80/month)
· Food ($800)
Terry started to keep Bobby’s Employment Insurance cheques, guaranteeing that Bobby will have enough money to pay rent at the end of the month. Terry is aware that this isn’t totally legitimate, but she can’t afford to pay all of her sibling’s bills.
Concerns
Terry feels somewhat guilty and very responsible for what is going on. Just before her mother died last year, she promised her that she would watch out for her sibling. She felt that she owed it to her mother to take care of Bobby but finds it difficult since she doesn’t really understand what makes him tick. She perceives Bobby’s life as irresponsible, but also much more interesting than hers. Bobby has lots of friends and an easy going attitude – but Terry feels she is paying for it all. Bobby has never really had a serious job. Terry is afraid that taking care of Bobby is going to continue all her life and she would like to move on with her life. As kids, she always had to get Bobby out of trouble, finishing his homework, and protecting Bobby from consequences. Terry doesn’t feel that Bobby appreciates all that she has done for him.
Additional facts about Bobby
Bobby is fed up with his sibling Terry. He admits that he hasn’t been really responsible with his rent payments for the last 2 months but doesn’t believe that Terry is acting appropriately by holding onto his Employment Insurance cheques until the end of the month.
Bobby is looking for work, but he doesn’t want to be a dishwasher. He would like to find work in an interesting field. Terry doesn’t understand how tight the job market is. In the meantime, Bobby believes he should still have fun and enjoy his life spending time with his friends. Even though Terry seems bothered by it, Bobby finds it very helpful to relieve stress.
Concerns:
Bobby has a fair bit of resentment towards Terry. Terry has always been the good, responsible sibling who took care of him. Bobby realizes that, but he believes it doesn’t give Terry the right to boss him around. Bobby believes that Terry has become even worse since their mother passed away last year. Bobby has some ideas about how he can follow his dream to work in what really interests him, but it’s going to take some time to get there. When Bobby moved in last year, it was out of necessity and not a long term plan. He realizes that if he moves out on his own or with some friends, he will have to pay more, which he does not have available funds right now.
Terry and Bobby have reached out to you to help them resolve this conflict and to discuss the future of their living arrangement.
Identify the following in this scenario. Answers for this section should be 2-3 pages in length single spaced.
1. What is the Problem as seen by both parties, and what argument can be used to defend their position?
2. What are their Interests?
3. What are some options and solutions to this problem?

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