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Mutual Gains Bargaining

Darth Vaughn, May 1998

"The smartest strategy in war is the one that
allows you to achieve your objectives
without having to fight."

--Sun Tzu, 500 BC

The Concept

Mutual Gains Bargaining (MBG) is preventative medicine. It helps to circumvent many of the ills associated with traditional labor-management interaction, and allows for healthier more productive cooperation. MGB is a method of bargaining designed to dramatically improve the quality of solutions, and increase the likelihood of compliance between labor and management, ultimately benefiting their constituents. The philosophy behind the process is that through in-depth discussion with an emphasis on side by side problem solving (as opposed to face to face confrontation), you can get what you need, and I can get what I need. This is a much more effective approach compared to the traditional adversarial process.

Mutual Gains is about becoming a more effective negotiator by recognizing and avoiding those behaviors that intensify conflict. This review gives a basic introduction into the philosophy behind the concept and process of using MGB. In addition, this site lists the keys to success with MGB, and the resources to get more information on, and training for, Mutual Gains Bargaining.

Public management has a responsibility to promote taxpayers interests, and labor unions have a duty to represent workers' interests, but often times unions and management find themselves distracted from their intended purposes and engaged in ideological fights with each other. Too many bargaining situations are resulting in bad contracts both from the point of view of management and the unions, with neither side really getting what they needed.

With traditional bargaining, groups enter the negotiations with their own preferred solutions and then haggled over whose proposal is best. Labor and management will develop their positions on issues, submit overblown proposals to each other, and argue emphatically. Arguing on positions leaves both sides with one of four options; "I win, you lose," "You win, I lose," "We both compromised, and lost", or "No deal." Eventually the outcome is determined by a series of power struggles concentrating on personalities and anecdotal data rather than the issues. Traditional bargaining is adversarial, the approach is to beat the other guy. Mutual Gains Bargaining, on the other hand, is a different way of thinking.

With MGB both sides understand the need to focus on interests before their positions. It's not to beat the other guy, but rather to get the best for what you need and the other side as well, because their interests are linked to your interests. Labor-management cooperation is supposed to be an affirmation of the leadership in both the union and management with the goal of seeking better ways of working and new avenues to success. This cooperation in no way compromises or denies the identity of either party. It is also not an answer to all ills. Conflict may still arise, as it should for if handled correctly it sparks creativity and change. This cooperation, is rather a process that can provide a better way to get things done.

The mutual gains process focuses negotiating teams on interests rather than positions. MGB is a simple concept that unions and management can identify at least one goal in common and find ways to jointly accomplish that goal.

As simple as the concept might be, it's critical that labor, management, and legislation go through a formal training process before they decide to embark on mutual gains. Often times, too much distrust exists between the groups not to. Legislators are often ignored, but it's important that they be pulled on board so they understand and support the process.

The Process

There are various approaches and techniques to Mutual Gains Bargaining. This approach is used by Cornell University's Program for Employment and Workplace Systems (PEWS).

  • Opening Discussion: The Big Picture
    This is the preparation phase where each side constructs a list of interests instead of constructing positions. Union and management team members sit dispersed around a table (as opposed to traditional negotiations where parties sit across from each other) and openly and honestly discuss their interests and concerns regarding an issue. Lists of interests should be made separately at first, although ultimately you may be able to construct the lists together.
  • List the interest underlying the positions
    This is a pre-bargaining phase in which each side exchanges their interests and concerns. This is not a wish list or a list of outcomes wanted. Team members analyze all interests, and focus in on those that are mutual. Many times both parties are surprised by how many common interests they have. The parties then agree on the process for bargaining.
  • List options (Inventing not deciding)
    You have now entered the bargaining process. The parties will find an outside facilitator useful, until confidence in the process develops. In this context the facilitator is a facilitator to the process, not to either party. Once both parties are familiar with the process, team members can take turns serving as facilitators and recorders of information if desired. 

    Once interests have been identified and examined, the parties participate in a brainstorming process to develop a series of potential solutions and options for each interest. The information is shared openly among both bargaining teams and the potential solutions and options are listed without assessing their feasibility. A list is then complied of both parties' interests.
  • Try to arrive at some standards
    Once options are developed, the groups agree upon a set of objective standards to use in evaluating the options. It is during this phase that the parties decide what data they need to analyze issues or concerns, and gather the data jointly. The parties then brainstorm again to compile another list of interests, which is refined and polished through discussion until a consensus is reached.
  • Evaluation Options (DECIDING)
    Finally, through open discussion, the teams begin to apply the objective standards and identify those potential solutions and options on which team members can reach consensus. The groups also identify what is clearly unrealistic and eliminate those options. This is a process for distinguishing the options that meet your interests. As options are agreed upon, together union and management team members draft contract language and a bargaining history for final review and consensus approval by the full team.

Labor-management cooperation is the key to having an effective relationship between unions and management while keeping the public sector competitive and viable. Mutual Gains bargaining is not a cure all solution, and does not prevent the different parties from disagreeing with each other on issues. Under this process, however, disagreements neither affect the overall relationship, or the ability to resolve other issues. The parties can agree to disagree, but disputed issues will be resolved through the MGB process. For labor-management cooperation to result, two powerful institutions (union and management) must respect each other and work together to achieve mutual interests whenever possible.

Mutual Gains is more than just a process. It is a cultural change in philosophy that cannot occur without careful preparation. As an organization begins to implement contracts using Mutual Gains to effect changes in working, trained union and management officials will need to jointly train other supervisors, union officials, and employees on the process, contract topic, and key contractual terms. Both parties will need to continue to work together to implement and effectively administer these contracts.

Keys to Interest Based Bargaining Success

There are a number of key factors in making win-win negotiations and labor- management cooperation successful.

  • Stick to the Process. Labor and management must be committed to MGB. They must communicate with each other, understand each other's needs and interests, and pursue answers that benefit both groups.
  • Share Information to Build Trust. Sincerity, openness, and honesty are fundamental in building trust between labor and management.
  • Set an Example. During negotiations, and during day-to-day contract, the administration, union leaders and managers need to set an example of open communication for all to follow.
  • Do What You Say. Trust and rapport are key for making labor management cooperation work. Labor and management leaders must follow through on their promises and be open and honest with each other.
  • Isolate the Problem from the People. Often people tend to link the problem with the people, and a conflict of personalities emerges. Some people will not accept a new approach and will be subversive to both groups' mutual interests. These individuals will need to be removed, and concentration should be placed on the majority of managers and employees who prefer the cooperative model.
  • Long-term Partnership. Partnership does not end when the contracts are finalized. The conclusion of the Mutual Gains Bargaining process is the initiation of a long-term partnership between union and management. Both groups need to develop a system for cooperative change extending beyond the duration of the contract.

Union and Management's Benefits

For the union and management, the primary question centers on what cooperation will mean for both groups in the short and long run. The union can use MGB as a way to empower workers and their institutions to shape their lives at work. In, Mutual Gains: A Guide to Union-Management Cooperation, authors Rosenthal & Burton identify the benefits for unions and management. Union Benefits Include:

  • Increased access to information, and prenotification of changes in work arrangements and technology.
  • Increased input, which helps management avoid errors or decisions that would hurt union membership.
  • Work satisfaction may increase.
  • Union may be able to address a broader range of personal concerns.
  • Members concerns are resolved more quickly and fully.
  • Membership, education and skill levels increase.

In the public sector, management must make the organization as effective as possible to meet the needs and expectations of citizens and their legislative authorities. Authors Rosenthal & Burton also identify the benefits for management. Management's benefits include:

  • Improved management effectiveness.
  • Increased organizational flexibility.
  • Improved working environment.
  • Enhanced productivity.

The Mutual Gains bargaining approach establishes that common ground can be located, mutual interests identified, and cooperative relationships between unions and management built.


American Federation of State, County and Municipal Employees -(AFSCME)

Fisher, Roger, & Ury, William. Getting to Yes. Penguin Books: New York, New York. 1991.

This is the classic work, where many of the Mutual Gains philosophy originate from.

Flaherty, Benard. "Mutual Gains Negotiating A Skills Workshop." Cornell University.

This is a training manual from a two-day training session offered by Cornell University's ILR Extension department, and conducted by Mr. Flaherty. Because of the initial difficulties involved in starting the MGB process, it is strongly suggested groups interested in Mutual Gains Bargaining engage in some type of formal training.

Kochan, Thomas, & Osterman, Paul. The Mutual Gains Enterprise. Harvard Business School Press: Boston, Massachusetts. 1994.

This work brings together the authors recent work on labor market and employment policies with their work on the human resource strategies and labor management practices of individual firms. The book supplies a lot of theoretical and practical approaches to Mutual Gains Bargaining.

Program for Employment and Workplace Systems (PEWS)

To get more information on Mutual Gains and training. The Program for Employment and Workplace Systems (PEWS) works jointly with union and management groups to design and implement organizational changes and work restructuring. PEWS works in the public and private sector on issues such as work flow and job redesign, quality improvement, problem solving and team building, alternative compensation, union-management relationships, and collective bargaining and workplace negotiations. PEWS also works with industry groups, economic development areas, and union internationals on participative design, strategic planning, and problem-solving processes.

Rosenthal & Burton's , Mutual Gains: A Guide to Union-Management Cooperation. ILR Press, Cornell University: Ithaca, NY, 1993.

This book is about why and how to cooperate in ways that lead to mutual gains for both the union and management. This work lays out the theoretical and practical aspects of implementing Mutual Gains.

California Teachers Association:

Schools and the education industry are increasingly becoming huge users and supporters of Mutual Gains. CTA helps public school teachers create the best possible learning conditions for California's children. Through collective bargaining and legislation, CTA is working to create a safe and positive learning environment for all children.


For Access to Formal MGB Training See:
This is a workshop in Management programs, Labor Relations, and Mutual Gains Negotiation offered by ILR Extension at Cornell University. The goal of this workshop is to teach how to realize bargaining objectives by focusing the negotiation process on interests as opposed to the use of power and rights at the collective bargaining table. It will increase your proficiency in:

  • How to avoid taking positions that lead to conflict
  • How to explore interests with the intent to realize mutual resolution of issues
  • Exploring the possibilities of joint gains for management and unions
  • Turning negotiations marked by disputes into a process that emphasizes collaboration and improved relationships
Cornell's Program for Employment and Workplace Systems (PEWS) works jointly with union and management groups to design and implement organizational changes and work restructuring. PEWS works in the public and private sector on issues such as work flow and job redesign, quality improvement, problem solving and team building, alternative compensation, union-management relationships, and collective bargaining and workplace negotiations. PEWS also works with industry groups, economic development areas, and union internationals on participative design, strategic planning, and problem-solving processes.
Interest-Based Bargaining is a three-day program in which Management and Association bargaining teams are trained together and learn to improve their table skills using the "interest-based" methodology. The program's philosophy emphasizes that successful bargaining rests on the ability of the parties to achieve shared goals without undermining either party's ability to attain their separate goals or protect their traditional rights and responsibilities. It is co-trained by California Teachers Association (CTA) staff and school district representatives.