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Allied, Benevolent, and Caring Services are three independent, nonprofit social service providers. These organizations have provided an array of health-related services in the state for the last ten years. They are now each interested in expanding their activities to offer a broader selection of social services in the state.

The State Office of Health and Human Services (OHHS) has indicated a willingness to provide funds for the proposed new services, but only to a consortium of two or more organizations. OHHS will not grant any extra funding to Allied, Benevolent, or Caring alone.

Allied, Benevolent, and Caring differ in the size of their service population, staff, and facility size. Consequently, depending on how they are organized, they will qualify for different levels of funding. OHHS has indicated the following amount of funds would be awarded, depending on the consortium formed:

- Allied alone: $0
- Benevolent alone: $0
- Caring alone: $0
- Allied and Benevolent: $118,000
- Allied and Caring: $84,000
- Benevolent and Caring: $50,000
- Allied, Benevolent, and Caring: $121,000

The executives of each organization were not initially eager to form a consortium. They have independent Boards of Directors who expect them to raise as much money for their own organization as possible. On the other hand, they realize that without some cooperation, they will obtain no funds for additional services. Consequently, should any of the organizations choose to work together, they will be concerned about their individual shares of the grant awarded by OHHS.

Your job is to meet with the representatives of the other two organizations—separately or together—to negotiate the best arrangement you can for your organization. Your goal is to bring in as much OHHS money as you can for your organization.

An agreement entered into by your organization must define the members of the consortium as well as each organization’s share of the grant awarded by OHHS.

The total amount of time for the exercise is 45 minutes. Members of each organization’s negotiating team should meet together for 10 minutes before beginning discussions with anyone from the other two organizations. When negotiations begin, you can arrange a joint meeting of all three organizations. If two of the three organizations wish to speak privately, the third organization may not interrupt for the first 5 minutes of the meeting. If any agreement is reached, it must last for at least 5 minutes before negotiations can conclude. Specifically, an initial agreement must be signed by all members of the consortium, then resigned 5 minutes later. Any agreement not resigned is null and void. Any resigned agreement is final. The 5-minute resigning procedure is waived during the final 5 minutes of the exercise. During these 5 minutes, any initial agreement is a final agreement.

1. Was the agreement reached? If so, what were the terms?
2. If no agreement was reached, what were the barriers?
3. How was the power of each member construed in your group?
4. How did these definitions of power affect the negotiations in your group?
5. What were the relative costs and benefits of working in three-party as opposed to two-party groups?

Answer :

When considering the terms of the agreement, the organizations should evaluate the costs and benefits of forming a consortium with different combinations of members.

They should weigh the potential funding amounts provided by OHHS for different consortium combinations and aim for a fair distribution of the organization's funds based on factors like service population, staff, and facility size.

1. Barriers to reaching an agreement could include competing interests of each organization, differing opinions on fair distribution of funds, or reluctance to cooperate in a consortium. Effective communication, compromise, and a focus on the overall goal of providing more social services to the state can help overcome these barriers.

2. The power of each member in the group can be construed based on their service population, staff, facility size, and potential contributions to the consortium. Larger organizations with more resources may have more influence in negotiations.

3. The definitions of power within the group can affect negotiations by dictating how much weight each organization's preferences carry. Organizations with more perceived power might push for a larger share of the funding, while smaller organizations may need to negotiate more strategically to ensure they receive adequate funding for their needs.

4. The relative costs and benefits of working in three-party groups as opposed to two-party groups depend on the specific dynamics of the organizations involved. In a three-party group, there may be more complexity and potential for conflict, but the overall funding awarded by OHHS is higher ($121,000). In two-party groups, negotiations might be simpler, but the overall funding is lower (Allied and Benevolent: $118,000; Allied and Caring: $84,000; Benevolent and Caring: $50,000). Each organization should consider these factors when determining their preferred consortium arrangement.

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