Sally Soprano Teaching Guide

03/04) . All rights reserved. 1985.000. The exercise was written by Norbert Jacker and Mark Gordon.PROGRAM ON NEGOTIATION AT HARVARD LAW SCHOOL AN INTER-UNIVERSITY CONSORTIUM TO IMPROVE THE THEORY AND PRACTICE OF CONFLICT RESOLUTION SALLY SOPRANO I TEACHING NOTES Sally Soprano I involves a salary negotiation between an opera singer and an opera company. the Lyric. The Lyric is eager to hire Sally.000. an inexperienced soprano who sang the lead role is rumored to have been paid more than $24. online at www. 1989. The original case is copyright © 1979 by Professor Norbert S. Fax: 617495-7818. Jacker.000 for the lead role. 518 Pound Hall. Please help to preserve the usefulness of this case by keeping it confidential. and the rather inexperienced secondary soprano is being paid $14. revised or translated in whole or in part by any means without the written permission of the Director of Curriculum Development.000 to $18.60 minutes: preparation (preferably outside of class) 20 . Sally desperately wants this role. at the height of her career. 1988. 1990. and the trustees have authorized the business manager to offer up to $45. which could give her a chance at a forthcoming television special. Sally received $22. Copies are available at reasonable cost from the Program on Negotiation Clearinghouse.) Four years ago. Naturally.000 for the lead. OVERVIEW Sally Soprano is a distinguished older soprano who has not had a lead role in two years.500 for singing the secondary role in Norma at the Lyric. MECHANICS Time Required: 20 . New material copyright © 1982. 2004 by the President and Fellows of Harvard College. and the soprano who had been engaged to sing the title role has developed a condition requiring surgery before the performance. would like the salary to be lower. if possible.org or by telephone at 800-258-4406.000. (Rev. The Lyric Opera has a production of Norma opening in three weeks.pon. Telephone: 617-495-1684. This case may not be reproduced. Cambridge. but inflation and an increase in opera’s popularity have nearly doubled the salary scale since then. more than a year ago she received $12.60 minutes: debriefing 2 people Confidential Instructions for Sally’s Agent Confidential Instructions for Lyric Opera’s Business Manager Group Size: Materials: These notes were written by the Harvard Negotiation Project. 1995. except for the impact on future engagements and reputation. Her salaries for secondary roles over the last two years have ranged from $10. Last year. which is a not-for-profit organization.35 minutes: negotiation 45 . The original soprano hired for the lead was to have been paid $30. Program on Negotiation at Harvard Law School.000. MA 02138. (Industry practice is that lead roles receive about twice the amount received by secondary role singers. She would be willing to sing the part for nothing. .g.g. (This case can be prepared in class in about 20 to 30 minutes. That package is the “reservation price” or “reservation value. Copyright © 1982. and parties can be clearer about what they need to reach agreement. Jacker. and an assessment of the quality of the working relationship. (Rev. f) g) Did you think your BATNA was stronger or weaker than the other side’s? What can each side do to improve its BATNA? Original case Copyright © 1979 by Professor Norbert S. side agreements (e. risk. for advertising). All rights reserved. the shorter the preparation time allowed. The following questions may be used as a basis for class discussion. the more likely that participants will resort to positional bargaining. 03/04) 2 . 1989. 1988. etc. the wide range in possible outcomes for this negotiation will be apparent. Once you have estimated your BATNA. The other side’s BATNA should also be estimated. 1) Strategy and BATNA a) What things might you do if you do not reach an agreement at the bargaining table? b) What strategies did participants use in each role? c) What is your Best Alternative to a Negotiated Agreement (BATNA)? d) What is the value of the BATNA in terms of the “currencies” that will be on the table in the negotiation.SALLY SOPRANO ⎯ TEACHING NOTES PROCEDURE 1. 3. Collect the outcomes of the negotiating groups for use in the debriefing. but perks.” Having an estimate of one’s own and the other side’s BATNAs provides a reference point for evaluating offers and gives every player more power at the negotiating table. dollars. 1995. DEBRIEFING When the outcomes of the negotiating groups are displayed to the class. 1985. Outcomes include not only the salary. publicity.? e) What is the price at which you walk away from the negotiation? The bargaining zone for Sally’s salary in this simulation ranges from zero to $45. e.) 2. 1990. However. 2004 by the President and Fellows of Harvard College. Each should know exactly what it will do if no agreement is reached. divide participants into teams of two and allow 20 to 30 minutes for them to negotiate. In class. 1986. You may want to review the roles with the Lyric Opera’s business managers and Sally Soprano’s agents separately before the negotiation.. Options can be evaluated more critically. intangibles. The first step in preparing to negotiate is for each party to determine his or her BATNA. you may wish to consider the minimum (or maximum) salary and other conditions that would be of equal utility to your client.000. Distribute roles before class and ask participants to prepare individually in advance of the negotiation. did you explore? This situation allows for the creation of various options separate from salary that could maximize joint gains for the parties. 2) Standards and Criteria a) (To a pair of negotiators): “You settled on a price of $X. Not all standards are equally persuasive. They argue that by focusing on interests rather than positions. those standards that fit this situation more closely (e. 1985. are more persuasive than those more general in nature (e. but this does not necessarily mean one must ask for less. or positions. (See Appendix B. 1995. this year). While no one standard is “the most fair. Attention would be paid to the effect of a poor (or good) BATNA on one’s negotiation style and strategy. knowing that the final evaluation will exclude those that do not meet the criteria agreed upon. this role. this opera company. in their book. 03/04) 3 . In this instance. so each feels its interests are being protected.g. there is ample room for integrative bargaining..” open-minded negotiators may be able to settle on an appropriate range of fairness. such as fairness or efficiency. b) Which standards seemed more persuasive? Why? One challenge in this case is the availability of a broad range of external standards. that is. A listing of these standards is supplied in Appendix A. there are many standards or criteria upon which to base an outcome.g. An agreement based on such criteria can free up the parties to invent options more creatively. general inflation rate in opera salaries over four years). 3) Interests and Creative Options a) What non-monetary interests does each side have? What monetary interests do they have that go beyond this particular negotiation? How did you talk about each side’s interests? b) What options. The objective criteria themselves can be the subject of much negotiation. and “positions. All rights reserved. external to the will of either party. Once that’s done. 2004 by the President and Fellows of Harvard College. 1989. by focusing only on the salary issue.” which are the underlying concerns of each party.) While this game can be negotiated in a very distributive manner..SALLY SOPRANO ⎯ TEACHING NOTES Some people have a curious reaction to this game. In general. Jacker. 1986. Why? Where did that number come from?” Criteria or standards for evaluating proposed options should be objective. Such criteria can be principles that the parties agree should govern the outcome. Fisher and Ury. (Rev. distinguish between “interests. and that they are unaware of the relative strength or weakness of the other party’s BATNA. taken by each party on the issues being negotiated. parties can engage in integrative bargaining and find creative ways to make all parties Original case Copyright © 1979 by Professor Norbert S. A poor BATNA may justify being more risk-averse. This feeling is independent of the fact that the other party is unaware of their poor BATNA. they may split the difference or try to invent new options that add value to one side at little or no cost to the other. 1988. Getting to YES. the objectivity is ensured by outside expertise.” which are the stands. They feel they should accept less for their client because their client’s alternatives are poor. 1990. At times. other than straight salary. Copyright © 1982. until a compromise position is found or until the parties reach an impasse. Positional bargaining occurs when parties do not focus on interests. CONCLUSION This case offers participants insight into what they believe constitutes success in a negotiation. All rights reserved. which would not be renegotiated without new information. 03/04) 4 . (Rev. Many clients feel anxious during the negotiation and find it difficult to hold firm where appropriate. questions may arise as to the scope of the authority of the agent and the role of the principal in the negotiation. 1985. In order to explore the interests of parties at the table. Whatever the authority. Generally. After the opening position is offered. 2004 by the President and Fellows of Harvard College. This type of bargaining builds little trust between the parties. Concessions are made grudgingly. Jacker. each party typically identifies a bottom line. 1989. each party makes small concessions. Is it “winning” by doing better than the other side? Or is it achieving an objectively good outcome Original case Copyright © 1979 by Professor Norbert S. Copyright © 1982. The endeavor becomes one of joint problem-solving. rather than adversarial positioning. 1995. Focusing on interests compels the parties to listen carefully to each other to discover what each believes is really important. resulting in a positive-sum rather than a zero-sum agreement. in most cases the agent would wish to reserve final decisions for the client and to allow time to consider the proposed agreement. This encourages creativity and joint problem-solving essential to integrative bargaining. the negotiation process should include the opportunity to “brainstorm” possible approaches to problems without the commitment to options proposed by either party. an opening. 1986. 4) Agency Issues a) What was the nature of the commitment you gave to your client? b) Was it final and binding? c) Was it subject to client approval? d) Was it discussed explicitly or just “assumed?” Given that the negotiator is an agent. The parties can explore possibilities for joint gains and tradeoffs. Interests define the problem in a way that allows for collaboration and creativity in fashioning a solution. rather than forward toward a creative outcome. and a fall-back before negotiation begins. as there is no opportunity to develop a relationship and no incentive to explore each other’s interests. 1988. This does not mean the agents cannot or should not agree on a recommended settlement. Most distributive bargaining follows this positional approach. The result is a process that moves backward from an opening position. based on their fall-back strategy. the principal would be present if there is a need for education of the principal or for reality-checking. 1990. In positional bargaining.SALLY SOPRANO ⎯ TEACHING NOTES to the negotiation better off. 1995. Jacker. 03/04) 5 . 1990. 1989. also available from the PON Clearinghouse. (Rev. 2004 by the President and Fellows of Harvard College. Copyright © 1982. The facts are the same as in Sally Soprano I. Collaborative problem-solvers tend to say that more information would have made it easier to negotiate a good outcome. 1985. all available information is known by both sides. although that is against the interests of both clients. 1988.SALLY SOPRANO ⎯ TEACHING NOTES for both parties? Some participants will not settle this case. The question. they fear that revealing their BATNA may weaken them and that the negotiation will deadlock with each side trying to extract the last dollar from the other. “Would more information about the other side’s BATNA and interests have made this case easier or more difficult to negotiate?” may reveal how participants define success in a negotiation. except that as a result of a discussion between Sally and the Lyric Opera’s artistic director.] Original case Copyright © 1979 by Professor Norbert S. 1986. Those who say it would be harder may be out to “win” the negotiation. All rights reserved. [Special note: This issue can be tested by following-up the Sally Soprano I debrief with negotiation of Sally Soprano II. because it is easier to maximize joint gains and to decide on an appropriate salary standard when there is full information. 000 $25.000 $18.000 $45.000 $38. 2004 by the President and Fellows of Harvard College.250 $30. 1985. 1995.000 $0 Original case Copyright © 1979 by Professor Norbert S. $45.000 $15. All rights reserved. 1990.000 $20.000+ $31.250 $31.500 $10.SALLY SOPRANO ⎯ TEACHING NOTES Appendix A: SOME POSSIBLE CRITERIA FOR ESTABLISHING A SALARY Below are some of the possible standards by which one can establish a salary for Sally for her performance of Norma. Copyright © 1982.999 $28.75 x secondary) Sally received 4 years ago when she sang lead best recent secondary role x 2 (for lead) + some adjustment for inflation what Lyric paid last year’s lead + 25% for inflation Sally’s last secondary role with the Lyric x 2 (for lead) + 25% (one year’s inflation in opera salaries) what Lyric would have paid Renata Risingstar.000 $30.000 $29.500 $36. the soprano originally cast as Norma last year’s secondary role x 2 (for lead) + 25% (one year’s inflation in opera salaries) less than Lyric would have paid the other singer because Lyric preferred her to Sally current secondary role x 2 (for lead) Sally’s lowest-paying secondary role in the past 2 years x 2 (for lead) + 25% (inflation) what Lyric paid Sally last year (secondary role) x 2 (for lead) Sally’s lowest-paying secondary role in the last two years x 2 (for lead) Sally’s highest-paying recent (secondary) role lowest payment Sally has received in the last 2 years + 50% (inflation) what Lyric paid Sally last year for secondary role lowest payment Sally has received in the last 2 years what Sally said she’d be willing to accept for the lead role in Norma $44. 1989.000 $25. 03/04) 6 . Note: The first and the last are not independent or objective standards.000 $12. (Rev.000 what Lyric is willing to pay to get her to sing last title role in Norma x 2 (for inflation in opera salaries) + $1. 1986.000 (because time is short) last title role x 2 (for inflation in opera salaries) same premium (2. Jacker. 1988. searchlights. Sally agrees to conduct master classes at the Lyric.000 and she agrees to contribute half to Lyric’s newly established “Sally Fund” to aid struggling young sopranos. so present value is about $20. 1986. All rights reserved. they will cut a deal on the royalties and jointly negotiate with the recording company. Original case Copyright © 1979 by Professor Norbert S. 1985.000).SALLY SOPRANO ⎯ TEACHING NOTES Appendix B: ILLUSTRATIVE COMPONENTS OF AGREEMENTS Percentage of gate to go to Sally: • X percent of excess over average gross ticket sales • X percent of excess over last five operas put on by Lyric • X percent of ticket revenues after Sally’s name is publicly announced minus average ticket sales in three weeks prior to opening • X percent of ticket revenues over Lyric’s break-even point • After 75 percent of seats sold for a given performance. Sally will contribute a dollar to the Lyric (subject to ceiling of $X contribution by Sally) • Sally and her agent get input into content of ad campaign • Sally gets superstar comeback buildup in Lyric’s advertising Superstar perks for Sally: • Enormous limo for Sally during entire run of Norma • Dressing room and hospitality room. locking in long-term employment for Sally and opera world notoriety for Lyric. Lyric agrees to pay Sally $100. 03/04) 7 . 1990. and Z percent of ticket revenues if house is 95 to 100 percent full Advertising • Lyric agrees to $X advertising budget • Lyric agrees to increase existing advertising budget by $X (or X percent) • For every three dollars increase in the Lyric’s advertising budget. Lyric agrees to hire the best make-up artist in the business to make Sally appear more youthful and vibrant. Sally and Lyric agree to pack first three rows with enthusiastic fans each night to precipitate tumultuous ovations.000 for the role (payable over 20 years. 1989. Copyright © 1982. Lyric pays Sally $45. Sally agrees to specifically plug the wonderful people at the Lyric on national prime-time TV if the television deal comes through. 1988. Y percent of ticket revenues if house is 85 to 95 percent full. each with big star on door. complete with show-biz stars. and lots of media Other components • • • • • • • Sally and Lyric agree to create records and tapes of the performance. fully stocked with goodies • Dozens of roses to be thrown up on stage by adoring fans (to be planted by Lyric) after each performance • Huge opening night gala. 2004 by the President and Fellows of Harvard College. X percent of ticket revenues if house is 75 to 85 percent full. 1995. Jacker. (Rev. 2004 by the President and Fellows of Harvard College. 1988. Jacker. 1990. orphans.000 and agrees to buy any unsold tickets at half the box office price (up to a ceiling of $10. 1989.000 and she agrees to match dollar for dollar any corporate contributions to the Sally Fund that are raised by the Lyric’s business manager. Lyric flies Sally down to Brazil for a quick face lift. 1995.SALLY SOPRANO ⎯ TEACHING NOTES • • • Sally sings for nothing in charity run of Norma and Lyric contributes all net proceeds to the Sally Fund. Copyright © 1982. All rights reserved. retirement homes. etc. 03/04) 8 . Lyric pays Sally $45. 1985.000) and to arrange for distribution of those tickets to students in arts programs. Sally gets an extra $5. 1986. • Original case Copyright © 1979 by Professor Norbert S. (Rev. widows.