Topic: Negotiations
Characters: Mary, Broker for a firm which buys and sells businesses; Rev. Smith, a retired minister now managing a nonprofit organization; George, Mary’s supervisor
Mary, a recent college graduate, works for a company which represents clients who are interested in either buying or selling businesses. As a “business broker,” her job is to arrange such sales.
Rev. Smith, a retired minister, contacts Mary’s company to arrange for the purchase of a small manufacturing plant just outside of town. He has recently formed a nonprofit corporation to aid troubled youths and wants to convert the building into a recreation center. He desires to work with Mary because she formerly attended his church and he trusts her implicitly.
Mary’s supervisor, George, has assigned her the task of negotiating a deal for Rev. Smith’s organization. Some of the machines at the manufacturing plant are in poor condition and would require $100,000 to repair. Rev. Smith intends to remove them in any event.
The seller is asking for a $250,000 down payment on a $1,000,000 sale. Rev. Smith’s organization can only raise $150,000. After studying the situation, George is convinced that if the seller can be led to believe that repairing the machines is important to Rev. Smith, the down payment request would be reduced to $150,000 and the asking price to $950,000.
George therefore instructs Mary to mislead the seller. She is told to insist–with a straight face–that either the seller repair the machines or drop the down payment and asking price. Mary is uncomfortable with this strategy, both for the sake of honesty and because Rev. Smith has not approved it. Yet, as a new employee, she wants to please her supervisor.
Author: Alexander D. University. Hill, Associate Professor of Law and Ethics, Seattle Pacific