Chapter Case: To Agree or Not to Agree – That is the Question Read the Chapter C
ID: 2747714 • Letter: C
Question
Chapter Case: To Agree or Not to Agree – That is the Question Read the Chapter Case: In 1983, after months of intense four-party negotiations, the Commonwealth of Kentucky, the City of Louisville, Jefferson County, and Humana (a private for-profit hospital company), had agreed that Humana would operate the new state-built teaching hospital that was a part of the University of Louisville School of Medicine. Humana agreed to assume responsibility for financial support of the hospital, including uncompensated care for the community’s poor, in exchange for a commitment of $20 million a year from the state and approximately $6 million a year from the local governments. The medical school was to supply doctors and interns and would be allowed to use the facility as its teaching hospital. The signing of this unique and historic agreement was to be held at the newly completed hospital at a festive press event. But after all of the parties had arrived, local dignitaries and staffs, hospital employees, and members of the press were kept waiting while Governor John Y. Brown Jr. had an impromptu private meeting with Mayor Harvey Sloane and Jefferson County Judge/Executive Mitch McConnell. In the meeting, the governor refused to sign the agreement unless the mayor and the county judge/executive agreed to issue $12 million in previously authorized bonds to defray part of the cost of the hospital. Fifteen years earlier, the city and county had proposed renovating the local public hospital, which the city and county governments owned and the University of Louisville managed—and at that time, local voters had approved issuing $12 million in bonds for the renovation. The bonds were never issued. However, in the ensuing years the state agreed to build a new University of Louisville teaching hospital. And although the issue of the city and county contributing to the cost of the hospital through that prior bond issue had come up during negotiations, the state had not previously made it a condition of the agreement because there was some doubt as to whether the bonds could still legally be issued. So now, after about an hour of discussion and delay, Mayor Sloane and County Judge/Executive McConnell, with help from their legal advisers, convinced Governor Brown that they could not change the agreement they were about to sign at the very public event without going back to their respective legislative bodies for approval—which would take at least a month, if their legislative bodies would even agree. Nor could they assure the governor that the bonds could be sold legally. The best offer they could make was to sign a side letter that said they would use their “best efforts” to have the bonds issued and the money turned over to the state. Reluctantly, the governor accepted their offer and the agreement was signed. (Heavrin 254-255)
Respond to the following :
Assume the role of one of the five parties in the case as you form your answers: What reasons do you have for remaining with the negotiations at this point?
Describe three tactics you can use after agreement is reached and your bargaining partner asks for one more thing.
Detail the parts, i.e., elements of an agreement template and explain why it helped you in this negotiation.
Explanation / Answer
In response to the first question, " What reasons do you have for remaining with the negotiations at this point?" my submission is the very purpose for which the agreement has reached to the stage of being formally signing at a festive press event. As per my undersatanding the stand taken by the Governor with respect to old issue of bonds worth $12 million, appeared alike to pressurizing, and or hard bargaining and or contarary view about his conduct as if trying to put icing on the cake and extract more funds for the much needed and agreed funds for the health care sector. Further as mentioned in the text, the same issue was considered and dropped while negotiating, drafting and or finalising the agreement. Therefore , I do not find any valid reasons for not remaining with the negotiations at this point of time when public at large is expecting something good to happen in the public interest with the hope to have better quality of life in the future.
With respect to second question's about the three tactics, that one can use after the agreement is reached, firstly stick to the agreement with little or no deviations allowed or permitted, secondly try to accomodate the issue of bonds as an addendum/ annexure to the agreement and resolves the difficulties/ problems in the way of issue of bonds. The important figures are value of bonds $12 million whereas yearly commitments of $20 million from State government and yearly $6 million from local governments. Therefore, as per my understanding the issue can be resolved with "best efforts" to have bonds issued legally.
With respect to third question I am unable to quote any template for the agreement but advised you to make use of what is mentioned in your prescribed textbook.