Today we started the new theme "You Are Hired!". Once again, we are dragged into the issues related to "bargaining" but the context is altogether different as the issues related to our discussion are intellectual property rights (IPR) and trade related property rights (TRPR).
One of the key issues raised in the "Open Source Development" case is the negotiating ability of the software professionals emphasizing on the fact that an employer does not own everything you do by law but only by the contract you may have signed. How many of us have the negotiating ability to pull off a better deal, without compromising on the professional interests, by critically look into the various clauses and analyze the pros and cons?
In this context, I thought of sharing with you the following interesting episode very much pertaining to our current theme discussion.
_________________
INDIAN PLAYERS REFUSE TO SIGN ICC CONTRACT
Source: http://www.rediff.com/ 19th August 2002.
Indian cricketers on Monday night refused to sign the agreement for the Champions Trophy in Sri Lanka and accused the International Cricket Council of 'boycotting' them.
The players sent a letter to the Board of Control for Cricket in India explaining the reasons for their decision, which said, "We believe by signing the player contract, we are caught totally in the middle."
"On the one hand, we suffer exposure from the ICC/BCCI when they could allege non-compliance with our obligations. On the other hand, we could face exposure from our competitive sponsors who have paid us for the right to exploit our brand and image commercially," the players said in a press release.
"We have been told that unless we sign a document which forces us to relinquish all our intellectual property and personal commercial rights, we would be ineligible to play for our country in tournaments conducted by the International Cricket Council.
"We are put in a peculiar situation where we are not boycotting the ICC run tournaments but the ICC is boycotting us," the players said.
The players also rejected BCCI's proposal to sign the agreement only for the Champions Trophy, after which it promised to take up the matter with ICC.
"The ICC restrictions are overly broad, covering not just the Champions Trophy but thirty days before and after. In the present case, therefore, by simply signing the contract, the ICC could already allege breach," the players said, pointing out that less than one month remained for the start of Champions Trophy.
"We want to play. We are not asking for anything more than that we have been getting. We are just not being allowed to play much against our wishes," they said.
____________________
- Like the case of "non-negotiable offer" from Darrel Hair, What can we learn from our heroes from this episode?
- How do we look at the issues related to Marketing, Advertising, Brand Management, IPR, TRPR, Compensation etc., from the perspectives of Players, BCCI, ICC and other significant stakeholders?
- There are plenty of materials available in "public domain" in the internet. However, one is expected to use the information wisely without making everybody suffer from information overload. Let me remind you from our FAQs that we, as a batch, value your original meaningful contribution and "copy-pasting from internet" would be treated as plagiarism and dealt with as per the provisions in PGDM Students MoP.
- Secondly, while trying to present the facts and contexts, let us try to be precise without arguing like lawyers. Let us keep in mind that too much of description of facts would confuse the readers.
- Thirdly, do not try to be solely focusing on what you have to say but lend your ears, eyes, brain and even your heart to what others have to say on this issue. As far as I am concerned, I am going to restrain myself, to the extent possible, from making any comment to allow you act as moderators of each other as a learning community. Build on the analysis of other participants. Learn from the experience of Dialectic Forum 01 - Non-Negotiable Offer.
- You are required to participate only if the topic interests you. While every participation counts, desparate participation does not! This also means do not wait till the last day to make your contribution. As mentioned in the FAQs, "Ordinarily, each forum will be kept open for a week", but it may be closed anytime before if I think there are sufficient number of contributions covering the signficant issues pertaining to the forum.
- Last but not the least, I have requested participants to display their unique id i.e., Roll number, if not the full name as in the attendance. But many participants have not conformed with the quest. Kindly go to the settings and change the display name with your roll number. Non-compliance will lead to natural omission of the postings for the purpose of course involvement.
With Regards,
Ganesh
21 comments:
Though this could differ a bit from our discussion, I would like to discuss on when one becomes eligible to negotiate.
The topic says it all! We need to be a hero or at least you should be able to distinguish yourself from others to be in a better bargaining position. Can a normal person (a fresher or with max 3 years of experience) be able to bargain like this in his/her interview? Why should the company be bothered about wasting the precious time of the HR in such discussions and further legal procedures and documentations while they can simply reject you and look for the next candidate, when you are no different from others?
Just take our own life. Ever heard anyone from a grade - II arts or engineering college being asked about his/her expectation of the compensation during the interview? Compare it with the scenario in an IIT or RECs(NIT), wherein the college itself places a bar on the minimum salary, a company willing to participate in the recruitment process should be offering. Just 3-5 years down the lane, when the same person from grade-II college looks for a job change, will be in a better bargaining position. Just recently, a friend of mine, who just accepted what Infosys offered 3.5 years back was considering a job change. With her experience and knowledge in the field, she was able to negotiate well. She was having 3 jobs in hand from TCS, Wipro and HCL ready to offer 5.5, 6 and 6.5 lakh respectively (of course market scenario also helped).
The point I try to make is that, a person becomes eligible to negotiate only when he/she stands out of the crowd. The distinguishing feature not only paves way for negotiation and gives you an advantage in the process, more importantly it gives you the confidence (or guts rather) to demand more.
There could be a scenario like this. What if a fresher, who just accepted whatever he was offered, stumbles upon an innovation in just a year or two? Though it appears prudent that he/she should have looked into the agreement (foreseeing the future), before he/she signed, the reality is that the avenues are limited or almost nil.
Look at the other set of heroes in hockey, poor fellows, people are not bothered even settle their dues.
I feel Santosh rightly pointed out that in order to bargain one needs to stand out in the crowd. As regards to the issue being discussed, the denial to sign the contract was mainly from the top icons(Sachin Tendulkar, Sourav Ganguly, Virender Sehwag). Others just followed suit as a sign of solidarity. So, I opine that in order to bargain the worth of the individual must be perceived by both the parties i.e. the organization should see him as an asset as well as the individual should be able to correctly estimate his worthiness and hence his power and limit of bargain.
Not every employee can negotiate with his/her employer. Most of the times it is the employer who is in a better position and often the employees are bound to accept the terms and conditions of the contract. But in some cases like the ICC contract issue, the employees can negotiate the terms of the contract for their individual benefits/interests. ICC entered into a conflict with the Indian players, as it wanted the players to sign a contract which would prohibit them from endorsing any of their personal sponsors so that it does conflict with the interests of ICC’s official sponsors. Most of the Indian cricketers made a lot of money from such endorsements. Signing ICC’s contract would not only mean that the players would violate their existing contracts with their current sponsors but would also lose all the money that they could earn from these endorsements. As already pointed out in the previous post, here the Indian players could negotiate the terms of the contract with ICC as they were in a better bargaining position. Apart from this the players also had a lot of their personal gains at stake. This controversy also got a lot of media attention and further delays in finalizing the contract could impact the revenues earned by ICC. So it had to arrive at a consensus with the Indian players soon. All this contributed to giving the players and edge over ICC in negotiating the terms of the contract.
I would also like to differ with my friend, Santosh on the point that tier-2 college students do not have enough to show in their CV’s, which makes their bargaining power in the market insubstantial. I would like to tell him that he has ASSUMED that in the 4-yr of studies in tier -2 college, the students do not garner enough achievements to be reflected in their CV’s. There are many students from several tier-2 and even tier-3 colleges whom I know, who ranked in first 100 ranks All India level in GATE, won National design contest, IET best innovation award, or won extraordinary laurels, accolades, honours over the period of 4yrs. They carry high bargaining power in the market than even students from REC’s, IIT, IIM’s.
The situation which started as a player –admistration standoff soon turned into a ICC- BCCI standoff. The BCCI, threatened to drop those players from the squad which endorsed ICC’s rival brands, clearly giving preference to its financials gains. This meant a clear violation of the Participating Nations Agreement or the PNA which the BCCI signed in March 2002. According to the PNA, the Board is committed to sending its best team to the World Cup.
The ICC sensing that it could not conduct a tournament of this magnitude without the full Indian contingent stood down further. Earlier, the players were barred from endorsing rival products for a period of 30 days before and after an ICC event, which later was reduced to only 5days.The image clause, which allowed the official sponsors to use player images till six months after an ICC event, was also reduced to three months. At last, it also threatened the board of hefty penalties if they still refused to abide by the contract rules.
The ICC also allowed the players, like Sachin Tendulkar and Virender Sehwag, to continue promoting the companies, which are in a conflict of interest with the official sponsors during the tournament except on the days when India was playing a match. But the BCCI rejected the offer.
All this because of the fact that the BCCI had a high bargaining power over the ICC. Around 80 % of the revenues of ICC were being contributed from companies in India. If in any bargaining situation one of the parties has such power then it can obviously make the rules.
As far as employees are concerned, in India not many employees in most organizations have a bargaining power because the work done out here is not something that requires a high level of expertise (Talking about the IT and outsourcing sector).Where the expertise is required obviously the employee’s bargaining power increases. And it doesn’t matter if are from a top rung or bottom rung college .If you are willing to perform there is no stopping you and price you can draw.
For the record 23 people from my previous project have joined at a package of 6.o lakhs and above with experience in the range 2-3 years .So we can very well assume that normal persons(max 3 years experience) still have a bargaining power if they bargain well and with the right people.
I agree with Sandeep and Anuradha that employees usually may not command bargaining power. The bargaining power of cricketers was higher because
1. Cricketers have talent that is irreplaceable at least in the short run.
2. The players went for “collective bargaining".
3. BCCI is the richest body in cricket and players being adamant ICC had to wilt under pressure.
A conflict of interest arose because the cricketers have two contracts- one with the BCCI and other with the sponsors. And the financial benefits from sponsors are far more than what they get for playing cricket.
ICC rightly argues that “ambush marketing” could result wherein companies which aren’t official sponsors to the ICC cup could use the contracted players to gain the benefit of advertising. ICC could have at least offered players pursue their sponsors immediately after the ICC cup. In this case interest of ICC should prevail. Players while on duty should follow rules of their employer.
In this context now we go back to the “open source development”.
If the individual who brings out something new is an employee of the company, then the company has a claim on the innovation. However if the individual is an independent contractor then he might get the benefit. But I feel that just using company’s resource should not be enough. Suppose two employees are working on a technology. Both of them are released from their project because of recession. Now one of them is on bench and the other finds a project. However there is little work in the project. Both the employees develop codes individually.Both of them use just internet and the knowledge they built in the past for this innovation. It seems surprising that one employee retains the credit of the innovation where as other doesn’t. As in Germany the employees should have the first right over the innovated product and should retain the right to sell it to their employer.
I would like to present this situation with a what if analysis type ?
If a player who is already committed to advertise a rival sponsor , signs the contract offered by the ICC , then a question really arises , which contract is valid ? Is there any possibility that a contract will supercede the other contract ? Can we have two contracts active at the same time asking the stake holders of the contract to behave differently at the same time ? I think this will lead to a legal crisis. And the player should abide by which contract ? This is exactly like a person who is married for a first time , engages to get married for a second time even before the first marriage is dissolved. As usual as this happens , the first wife can definitely ( of course if she is not ok with this arrangement ) sue the person if she thinks that he is going to get married again ? If the player has to abide by the ICC contract , then he runs the risk of monetary loss and legal suits from his sponsor for failing to honour the clauses of his agreement and at the same time , if he did not sign the contract , he does have the risk of not being able to play for his country which will earn the non suitability factor for endorsing by his sponsor which will prompt the sponsor to withdraw the contract once the time is over ?
the solution to this kind of one sided benefit aimed when doing the exchange , the ICC plays into a game which will question all its motives.
First of all , if it wants to retain its right as an employer , rather than sharing a part of its revenue with BCCI and finally with the players , should it not look upon itself as a organisation who will protect the players as an employees rather than the contractors ? the compensation as promised by the ICC is only for tenure of the game.
Why did it selectively allow the top cricketers to continue with the contract ?this points to the answer on the extent of bargaining power it has. these players are exactly the cash cows who can be milked to gain revenues .As rightly pointed by Sandeep and Santhosh Durai , if one has the right bargaining power , then the one can rightly negotiate and fix terms in his favour.
If the ICC really wanted to protect the interests of the official sponsors , then as a matter of fact why 7 out of 10 nations refused to sign to this agreement .Aussies refused to sign this as a matter of principle rather than the conflict of interests. Its not only the conflict of interests which marks the refusal to sign the contract but other things also come into play.
I would like to differ with Santhosh over his statement , that during the term of employment , the interests of the employer shall prevail. Of course ,the interests should be taken care of , but not at the cost of running down the contract previously signed by the players and forcing them to a legal trap.
From the ICC perspective , thier concept of protecting against ambush marketing by the rivals does not just stick to one aspect of advertising.There can be also brand recalls of the rival sponsors for ex. in the form of spectators raising placards associating players with the rival sponsors during the game and many instances where ICC cannot virtually stop it.
The impasse between the ICC and the players was a simple exhibition of the power of money. The ICC acting as the organizer should have taken into consideration the fact that the players had already signed their individual endorsement contracts and hence there would be a natural standoff if rival companies are roped in as sponsors.
Malcolm Speed ,chief executive ICC said that the players should put country ahead of cash while the ICC itself put cash first by blatantly considering the sponsors which allowed it to rake in the moolah.
As Australian Cricketers' Association (ACA) chief executive Tim May told that Australian players would not sign ICC contracts to play at the Champions Trophy because they felt their sponsorship rights had been signed away without consultation(though later 11 out of the 12 teams barring India signed the contract).
However we find that a negotiation only occurs when none of the participants of a contract are indispensable(players like Sachin Tendulkar who are huge crowd pullers,pulling out of the competition would render it bland and would not satisfy the sponsors who could then sue the ICC).BCCI as an intermediary initially said that it had nothing to negotiate with the players and that the ICC should directly talk to them.Here the ICC found was forced to change the clause for just the Indian cricket team following the fact that the BCCI was ready to send a second string team for the competition. In the end full strength Indian team participated and ICC was supposed to bear any financial consequences if sued by the sponsors.
Thus we realize that a contract remains negotiable only until both the parties have enough qualifications. I wonder if there would have been such a fracas if the Indian hockey team was involved in such a condition. The answer is apparent.
can we learn from our heroes?
we are not heroes yet.At least all of us agree that, we are still not established ourselves as heroes.It may be easier for the cricketing icons of the country(like Sachin Tendulkar,Rahul Dravid,Sourav Ganguly) not to sign the ICC contract and rather enforce ICC to rethink on its terms and conditions;but whether a management graduate from XIMB,or an engineering graduate or any other graduate from a college of similar ranking in the respective field can dare to do that.
In my opinion we need to build our knowlwdge base,skill level and management skill to such an extent that we are considered as valuable assets for the organisation for which we work for.Then only we are in the position to dictate the terms and conditions on which we want to work for.
However,i consider myself fortunate if the organisation which hire me allow and motivate me to enhance my creativity and earning by not imposing contracts like "work for hire".In that case,it will increase my respect and loyalty towards the organisation and it will encourage me to devote whatever time i get beyond the working hours for the growth and development of the organisation.
As has been pointed out in some of the earlier posts, the players of the Indian team were in a better position to bargain with ICC on the terms in the contract preventing them from endorsing the products of any of the competitors of the official sponsors of the tournament. This was mainly because of the following two reasons: (a) the players in this case had the power of ‘collective bargaining’ and (b) the ICC stood to lose even higher revenues if the players backed out from the tournament.
However, in the case of IPR, this bargaining power is substantially reduced in most of the cases where it involves a single individual bargaining with an organization. It is only when the party is highly organized or is of such importance that the other party has a substantial amount at stake that the power of bargaining is high. Looking into the case “Open Source Development”, although there are instances where companies give some space to their employees, in most of the cases, the negotiating abilities of software professionals are limited given the highly competitive scenario in the IT market.
I find Olympic gold medallist Abhinav Bindra's denial to accept the trial related rules of National Rifle Association of India another example where the heros have tried to bargain and negotiate a better deal. Bindra suggested rational alternative of taking his recent international performance into consideration rather than forcing him to appear in a domestic selection trial for Commonwealth Games.
No doubt Bindra has the status to force people reflect upon the existing practice and rules.
When it comes to common people like us we can find ample examples where common employees have bargained with their employees in matters of salary, job responsibility, transfers etc. Unfortunately there are many employees who believe exceptional track record,significant contributions etc. are the absolute prerequisite for negotiating for their legitimate rights. Though these things may be needed for negotiating on some crucial issues, every employee can always convey his issues with the employer and can try to pull a better deal. Factors like fear of speaking out, impression of not being given importance force many to accept the employers explicit and implicit conditions which they regret later. The lack of resistance from employee encourages the employer to enforce more stringent terms and conditions for the employees. It's true that many times the employees have less bargaining power especially in IPR issues, but most of the time the employees do not realise that acceptance of an illogical and too harsh terms could hamper their own career prospectives and job satisfaction.
One may get trapped in a situation where he can't claim his own work as his own and feel frustrated. It may not be possible to change the contracts radically, but it is always possible to put forward one's concern and seek further clarification if required.
In an employer – employee relationship the bargaining power can be normally distributed in some cases. We can say that at the tail ends of the normal distribution lie the average employee or the non performers who have lesser or negligible bargaining power. At the middle lie the high performers or the employees important to the company who have high bargaining power. Here in this case the distribution is however not based on the performance. India is a highly important country when it comes to cricket. BCCI is the one of the wealthiest cricket board in the world. India has a very high bargaining power. There have been many cases where the Indian cricketers were forced to drop their endorsements in the name of cricket. I think that what matters is the performance of the players on the field and not off the field. The players also have signed contracts with the endorsers. If they sign the ICC contract then they not only violate their contracts with the endorsers but also incur a high loss in terms of monetary value. ICC can add restrictions on the Indian players during the course of tournament. But the contract involves restrictions thirty days before and after. This is unfair as far as IPR of players are concerned. These high restrictions by the ICC contributed in the high bargaining power of the players. Moreover they very rightly said that their job is to play and an employee can give his best performance only if he is allowed to perform under his wishes.
From the discussions so far we are clearly aware that we have great negotiating power only when
We are irreplaceable and that we have knowledge and skills which are difficult to acquire in the short term. This is the fact in case of our players
But when we take the case of software engineers who are just out of the college and are in their first jobs, most of them are given the contract to sign without even giving them enough time to read through it this makes them liable to miss the fine prints in the contract such as when the company claims all the work done by the employee during the term of employment rather than during the work hours. Most of the employees come to know of such things only when the problem arises and by this time they have almost lost the battle because you have signed the contract it means you have read and understood the terms of it.
On the other hand people while switching companies have great bargaining and negotiating power, most of the people nowadays while going to the other companies go with a huge list of demand and they refuse to sign the contract until at least 50% of their demands are met. This is because they know their job clearly and also are completely aware of what kind of loop holes the company might keep in its contract so they easily spot it and negotiate on it.
So the power to negotiate is mostly dependent on the position that we are in.
I remember the day when I joined fresh from campus in a software company, we had joined in a batch of few hundreds and in the orientation day we were given to fill up lots of forms, I might have signed a contract then, sincerely I don’t remember, probably the excitement of joining overshadowed everything. After working in the organization for some time when I got a chance to switch job, I could demand a lot more things, my negotiating power had increased, based on my value in the market with regards to the skills I had acquired in the past few years and I was able to negotiate many terms with my prospective employer. Basically what I am trying to point out, as most of people in discussion above have pointed out, the negotiation power of an individual depends on the person’s value in the market, not everyone have the liberty to bend the contract.
When the options available are plenty players or for that matter anyone is in the position to bargain. If we look at the current scenario in the cricket world, with the success of IPL and other cricket leagues players have plenty of options to choose, some are even giving up national duty for the sake of league games so given a situation to sign a contract now, the can obviously bargain the terms and conditions
I admit, its delightful to look into the various insights from my colleagues, particularly from Sandeep Swain and Arun Narayanan.
Raising again the issue of bargining power, but from a different point of view, I feel in cases pertaining to "Open Source Development", its the employer who has en edge over the employee in terms of bargaining power. As rightly pointed out by many, we hardly look into the contract while signing on the dotted line. Even generally, whenever there is a clause saying "I accept to all terms and conditions", we simply bypass it and just click on the radio button.
Its not always necessary for an employee to be highly-skilled or indispensable in order to possess higher bargaining power. For example, if I am careful enough to read my contract carefully and have negotiating skills, I can dictate my own terms before joining the firm.
In case of ICC vs Indian cricket team, of course it was blatant unprofessionalism on part of ICC to threaten the players of not being able to play in the tournament. Its the right of a player to sell his brand image and go for endorsements, no matter if he endorses for the rival competitor of the governing body. It violates the commercial rights of the players.
BCCI, being one of the richest bodies and the most influential player today in the cricketing world, was able to dictate terms over ICC but its not always the case.All in all, I think what really matters at the end of the day is how aware one is about his/her rights and how skillfully he/she negotiates.
While going through the Newspaper today morning, I found a Quote by the CEO of Star India, " The biggest risk in a business is an aversion to risk". Rightly said but I think it is applicable in every field of life. Some of my colleagues had said that one has to stand apart from the crowd so that he/she shall be able to bargain. So just think the risk involved in being different from the crowd. Two things can happen, either the crowd will start following the person or the person at last would join the crowd. But one thing has got a greater probability that ensures a person to take a risk and that is Power (it may be due to monetary funds or simply by influential stature).
The case of BCCI and ICC shows the control that BCCI and the Indian Players have on the game. The sponsors that the Indian players have and the money generated through it is far more compared that to the ICC Sponsors. Just imagine a World Cup that too of Cricket without India. ICC can't afford it. In fact, ICC was not able to generate enough revenues during the last World Cup. One of the reasons being India not progressing beyond the group stages and hence cutting of the viewership from India. So to put it in short India is in a position to take a risk in the above case and resolve it as per their demands.
Learnings that we get from the episode are :-
1. Being apart from crowd alone doesn't help, one has to be influential enough to raise his/her concerns.
2. Think of some innovativeness on your part to convince your employer by the skills and abilities that one possess(definitely each and every person has unique skills)and let the crowd follow you. If not then be a part of the crowd and follow what others do.
I agree fully with what Santosh, debashish, and Kaushik said about when and how one becomes eligible to negotiate. I agree that in a contract the bargaining power finally tilts towards that person who stands to loose less if the contract becomes null and void. Yes, that seems to sum up the lessons learnt from the ICC controversy as well as the case of Brinda. So our immediate duty as of now is to become heroes in our fields, before we start cribbing abou our intellectual property rights.
But, wait.
I got a question. If having negotiation power means the individual has to loose less if the contract does not materialize, then it implies that he has to be able to offer more for the contract to materialize. And, if that indeed is the underlying base of a contract, then, well.. if the individual is offering more than what the compensation is worth anyway, then his or her "bargaining power" is not too effective after all.. right?
So to put it very crudely, what is the use of being a hero even, if at the end of the day to get something you have to offer more than what it is worth??
Now, I don't have an answer to that. I am only bothered by the question. Thats all...
Here both the parties were using their power to enforce their own interests on each other and the above problem arises because there is conflict of interests. Both the parties know that how they are important for each other for furthering their own interests that’ s why they had entered into a “negotiating” game. Otherwise the most powerful party would have enforced the contract on the least powerful party as the companies do to the entry level employees and even they would not have reverted back. If they would have tried to revert back the companies would have least bothered to change the contract for the employee because they are easily replaceable by many in the job market. But if the party who reverts back is important for their business they would consider as in the ICC and Indian cricketers case. So for negotiating you need to have the edge, success, skills, qualifications and knowledge which are irreplaceable. Then may be the other party will try to listen to your demands. I would like to cite an example here from the film industry. Nowadays established and successful actors negotiate with the film producers to have profit sharing options from the success of the film rather than the regular pay cheque they used to get. Same is with successful actor Aamir khan who negotiated for such an option for his film “3Idiots”. And obviously the film producers would give in to such demands because they know his talent, success and mass appeal will ensure them commercial success which the other actors may not be able to do so. The same is with the Indian cricketers.
Post a Comment