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Labor/Management Negotiation: A Simulation Activity

Directions for Teachers

  1. Distribute the handout with the introductory paragraph describing the events surrounding the railroads strike of 1877. Have students read the paragraph. Emphasize that this as an example of the history of conflict between labor and management in this country. While not every disagreement escalated into violence, it was not rare.

  2. Direct students to read the second paragraph. Explain that the simulation is designed to help them better understand a very competitive process that plays an important role in our economic system. The results of collective bargaining in one business can set a trend that may impact an entire industry, and ultimately the entire economy.

  3. Direct students to read the third paragraph. Distribute the general information handout. Emphasize that each group of two or three students will be paired against another group for the simulation. The goal of each group is to negotiate the best deal possible for their side. Stress that a skillful negotiator is not always the loudest, but they are the most persuasive.

  4. Organize students into groups of six or fewer. Allow them to set up labor and management teams within these groups. Once they are clear as to the respective teams, give each team one copy of the confidential information for their side. Be sure they do not share the information with their adversaries.

  5. Teams should meet separately for several minutes to decide on the demands they will make during the negotiation and to plan a bargaining strategy. Once they indicate that they are ready, direct them to begin the negotiation. Remind them that the current contract has expired and that a strike will occur if this last attempt to reach a settlement fails.

  6. Allow them to negotiate for 20 to 30 minutes (timing will vary) and keep them informed of the time left as the strike deadline approaches. Encourage them to compromise in order to reach an agreement, neither side will benefit from a strike. You may want to extend the deadline based on the timing of the activity.

  7. One variation, which may be employed if one or more groups are unable to settle, is to assign members of other groups to act as mediators to help facilitate an agreement.

  8. Students should write the terms of the contract in a format similar to that used to present the current contract. They should be encouraged to be creative in crafting a new contract. As long as both sides agree, they are free to change the current contract in any reasonable way they wish.

  9. Once the contracts are written and signed by the parties, you may want to have them briefly present the key provisions and answer questions about why they reached certain conclusions. There are likely to be significant differences in the settlements achieved by the different teams. Ask students to identify the biggest “winners” from both labor and management perspectives.

  10. In addition, or as an alternative to the above, have students write a press release about the contract settlement. The union representatives should write the release as if it were to be published in a newsletter distributed to their membership. Management representatives should write for a publication to be read by stockholders. 
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