What Berge and His Team Did and Its Implications - Assignment Example

Negotiations Case Study Name Institution Negotiations Case Study Case Question (1): The Principles and values the CEO professed Values and principles are considered some of the essential requirements in a business company. Workplaces required the employment of values and principles to create friendly internal and external environments (The Boston Consulting Group, n.d.). For instance, Berge, during his reign of cutting costs at NA, argued positively towards various instances of values and principle, stressing on why it is imperative to have them in the company. However, from the initiatives and measures that Berger employed, it is evident that he was not sincere when he promoted his aspects of principles and values. Berger talks of trust and optimism as some of the values that an employee should have to be able to manage in the contemporary worlds where ethic is paramount. He argues that “If managers lose trust, they can manage. If I’m not trusted, I can’t manage.” According to Berger, it is essential to trust in the abilities of a person and his or her strategies even if the full knowledge of the potential rewards or consequences is not fully comprehended. His promotion of trust among the employees in the company turns out to be a profess considering that he needed 5000 employees to voluntarily quit their jobs and be replaced by the same number of new recruits deemed highly flexible and talented. If trust is one of values he needed in the company, he would not have proposed to cut people’s jobs in the company and replace them. Another instance of principle that Berge is not quite sincere about is fair competition. Fair competition is a principle that is required in all the industries. It is even advocated for by many laws and jurisdiction across the world. It is of great essential, especially to the consumers. Chanco (2013) outlines that fair competition is one of the business principles that every industry should observe to allow quality services to the consumers. To Berger, being competitive refers to being preferred in all the ways possible. Providing quality services to customers and adopting the principle of quality customer relations are some of the aspects that improves the competitiveness of a company (Jac et al., 2013). Berger also acknowledges this criterion and advocates for the customers, arguing that the customers should be treated as kings. However, his sense of profess is demonstrated in the event of reducing the flight rates, much lower than what the industry holds and to the extent that the top management of NA considered it uncompetitive. If Berger was sincere about providing good quality services to consumers, there are other measures he would have used instead of the unfair competition. Berger also mentioned his ambition to resolve issues with the employees and decided that he would be more caring and considerate towards the employees to improve their morale and performance. Considering his quest to manage costs, this was evidently not sincere claim, that would later bring forth a frustrated lot. Case Question (2): What Berge and his team did and its implications In the first instance of dispute between the Berger team and pilots, NA threatened to acquire pilots from scab labor to replace its pilots due to the arguments against its actions. However, this only intensified issue and the pilots went on complaining. The team decided to act rationally towards meeting the pilot union demands. According to Neale & Bezerman (1992), rationality is the aspect amendments to maximize the interests if the parties involved in the negotiation. The Berger team also made such rational decisions and agreed to a deal that the pilots considered satisfactory. However, this opened ways for the other unions with an implication that employees can be given what they demand. Following the agreement Berger and his team made with one of the cabin crew unions about a new salary scheme in the attempts to reduce costs over three years, NABU, another rival cabin crew union disputed the agreement, arguing that the company was trying to consequent financial losses on its members. The team accepted that some of the crews were to lose their money, especially the newly recruited ones. According to (Alavoine, 2014), this practice depicted an instance of biasness and holds the potential of preventing further negotiations towards a rational agreement between the negotiators. Berger and his team agreed rationally to the pilot union and irrationally towards the cabin crew union, NABU. The practice implied that Berger and his team were more self-oriented than towards the welfare of the employees. The Department of Justice, Canada (2015) describes this approach of negotiation as competitive, where the negotiator tries to maximize his or her return at the expense of the other involved party in the negotiations. Such actions are likely to attract much critics and further complaints and differences. At NA, the approach that Berger and his team employed attracted further instances of critics and differences. The female cabin crew voted in support of strike to protest against the unfavorable and unfair actions of the Berger team. Upon the closure to the strike deadline, Berger and his team commenced the tactics of threats, as opposed to the assurances that they employed at the beginning but failed. Assurance is one of the negotiation skills that instill the sense of hope among the employees (Kydd & McManus, 2014). Berger assured the NABU that its members will not be financially challenged. However, upon disagreement based on the terms that the union deemed unfair, Berger and his team began to employ threats, creating awareness of the extreme consequences that the employees will face if they go through with the strike. As Lewicki et al. (2010) and Kydd & McManus, (2014) explain, threats are power-based tactics that are used to prevent imminent repercussions of a failed negotiation. Berger was so focused on reducing cost of operation in NA even if it meant reducing the salaries and benefits of the employees, who threatened to strike. With the threats, there are fewer chances that the union and the company conclude on an agreement that favors Berger’s ambition of cutting costs and providing fair terms for the employees. Therefore, the negotiations underway are most likely to prolong. Case Question (3): The business results in relation to employees’ interpretation, collective emotions, and work behaviors After the failure of the interests and power approaches to the negotiations, the intense emotions concerning the threats that Berger and his team were imposing on the employees resulted in reduced performance in the company. The head of human resources argued that the planned strike was illegal and that the employees who intend to go through with it are risking getting sent home of sued for their actions. These are some of the practices that elevated the employees’ emotions, with some arguing that they helped build the company to where it was but the management team was not concerned about their welfare and interests. Miron-Spektor & Rafaeli (n.d.) and Amarnani (2016) explain that employees’ emotions affect the outcome of the customer services. The morale of the employees reflects on the way they provide customers with the services of their company. However, the morale of the employees primarily depends on the management methods hat either uplift or suppress their self-esteem (Amarnani, 2016; Katzeribach, 2008). Therefore, since quality customer service is one of the principles that every company tend to hold, alongside the improved customer relationship, a company is required to observe the needs and interests of the employees, who impacts the same attitude of treatment to the customers. The possibility of the customer to develop loyalty and positive attitude towards the company and its services depend on the quality of services and customer care that the company and its employees offer to the customer (van Kleef et al., 2004; Miron-Spektor & Rafaeli, n.d.). Since the positive business results also depend on the ability of the company to keep the existing customers and attract more potential consumers, the business performance is likely to be affected by the actions and decisions that affect the employees, hence the customer services as well. The business results at the end of Berger’s reign characterized low returns to the extent that the company was recording less than it has ever did during when it was ranked the worse airline company in 1980. Even though Berger’s leadership resulted in increased returns, it was at the expense of the employees. He first decided that 5000 employees would be replaced and then decision to reduced employees’ pay followed. Their bias, though rational, decision to provide the pilots with a satisfactory deal resulted in protest among the other employees. Upon threatening them, they lowered the esteem of the employers. They reacted emotionally, in which some of them were arguing that such treatment were most likely to consequent negatively on the customer services. A former employee narrated about how they had to travel a long distance with only one functional toilet. Berger himself fumed and got embarrassed upon realizing that they could not even provide audio and entrainment services to the customers, even in the first class cabin. Customer’s complaints being were responded to after averagely a month due to very many complains, but few people to attend to them. In October 2006, the company’s primary airport hub was voted the worst in relation to luggage retrieval. It is evident that the actions towards cutting cost in NA only resulted in reduced morale of the employees and customer relations. Poor services was the primary result that caused damage to the company’s image and reputation, sending it back to where it started when it was owned by the state. Case Question (4): Berger’s response towards the employees’ emotions Emotion outbursts are inevitable in workplaces. The management activities and practices in a company are always subject to critics, since not every employee gets conversant with the decisions made or are satisfied with policies passed. Even though emotions are biological in mechanisms, they determine how people behave during such times. Therefore, an emotional outburst in a workplace determines the behaviors of the affected employees and how they reflect on their duties and responsibilities. It is upon the management to determine the best practices or amendments to address the employees’ complaints and resolve the emotions. In this case, Berger and his team acknowledged the repercussions of their decisions and decided to make amendments towards rebuilding the employees’ morale and performance. He launched two initiatives based the two objectives. The first one entailed the use of questionnaires to identify the key causes of the emotions and the second focused on the employees’ performance, therefore it entailed training of the employees. According to (Canada, Department of Justice, 2015), collaborative strategy is one of the effective ways of resolving differences during negotiations. Similarly, (Champoux, 2017; Pinkley, 1994) argues that the management needs to include the employees in their plan and process of responding to the employees’ emotions. Lewicki et al., 2010) is of the opinion that engaging employees while addressing any disputes acts as a control mechanism to resistance to change, resulting in increased chances of a successful dispute resolution. Evidently, Berger was determined to meet the needs of the employees by engaging them in the active determination of case factors of the emotion outbursts and reduced performance. However, this strategy was not dully exhaustive towards the potential causes of the emotions and the poor performance. The results of the questionnaires demonstrated that the employees did not like the way Berger and his team treated them and still did not have the trust that there are ways of resolving costs issues without sacrificing their sides of benefit. The employees did not have faith in Berger and his leadership concerning employees’ treatment. The lack of trust resulted to increased resistance, hence failure in the sense of a timely dispute resolution. Also, providing training to employees does link to resolving their emotions. (Iqbal et al., 2014) explains that employees’ training is only oriented towards improving their performance and provision of quality customer services. However, concerning the welfare of the employees, Berger did not respond competently to the issues that were affecting the employees. Question (5): Berger’s leadership and employees’ behavior In every organization, leadership strategy and style impacts on the organization behavior, especially on the employees. The performance of the employees is directly linked to the leadership style in the company (Lewicki et al., 2010). The leadership strategy employed in an organization should be collaborative and empower the employees, motivating them and building their esteem and the ability to impact positively on customer services. Iqbal et al. (2014) suggest that autocratic leadership style is one of the effective leadership approaches that recognize and rewards the efforts of the employees, integrating them into a more motivated work environment and performance outcome. Berger also demonstrates such instances of influence on the employees’ emotions, behaviors and performance. When Berger first executed his plans and ambitions for the development of the company, he integrated the efforts of the employees and recognized their impacts on the improved outcomes and returns of the company. He rewarded those efforts with the bonuses. There was an atmosphere of motivation and collaboration between the leadership and the employees. During that time, NA was recording major improvements in the industry, even during the difficult times when most of the competitors were trending down stream. Ciulla (2014) argues that it is ethical to recognize the contribution of employees’ efforts towards the realized success of a company. This makes the employees own the goals of the company and work hard to get the highest possible results. Champouz (2017) explains that the quality behavior in the company depends on the ability of the leadership to integrate individuals, groups, and departments in the enterprise. Therefore, it is evident that the accepted behavior of the employees was as a result of the feeling they were part of the success in the Company. One of the employees even stated that he has been with the company for 25 year form since it was despised by people as the worst, and his efforts also contributed to the success that the company later realized through the leadership of Shott and now Berger. However, the evolution of Berger’s leadership presented a different phase. The quest to reduce costs even further resulted in sacrificing the employees. He proposed to replace 5000 employees. The proposal commenced changes in employees’ behaviors as they were reasoning that costs are always cut by reducing expenses and not the employees. He went further and reduced the employees’ pay, a decision that resulted in disputes and collaborative emotions and behaviors from the employees and their unions. Matters became worse to an extent that Berger and his leadership team stated making threats. Strikes and boycotting duties are the resultant behaviors of his leadership style. The reaction to lower pay as experience here were the effect of employees who were demoralized, and who felt that their efforts were not being put into consideration. The strikes and boycotting meant reduced output and destabilization which would ultimately result to reduced profits for the company. References Amarnani, R.K. (2016). A self-esteem threat perspective on the downstream customer consequences (Degree of Philosophy’s Thesis, Australian National University). Alavoine, C. (2014). Unethical practices in negotiations. The confrontation between international and external factors. Working Paper Series, 223. Canada, Department of Justice, (2015). Dispute resolution reference guide. Retrieved April from http://www.justice.gc.ca/eng/rp-pr/csj-sjc/dprs-sprd/res/drrg-mrrc/03.html Champoux, J.E. (2017). Organizational behavior: Integrating individuals, groups, and organizations. 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