Budget Time

Introduction

The study of gender has garnered considerable attention inasmuch as all members of organizations are expected to work effectively with one another and treat everyone equally. Unfortunately, we are often motivated by stereotypes when negotiating. As educators who teach negotiation courses, we illuminate what is transpiring during a negotiation so that, in an ideal situation, people can optimize their own outcomes and the outcomes of the other party (the so-called “win-win” negotiation). When it comes to gender-related issues, however, there is a dearth of exercises that create an effective platform for meaningful discussion. Of the few gender-based exercises that do exist, many are limited to the overtly conspicuous gender issues of sexual harassment and discrimination. What is needed is a negotiation exercise based on relevant and cutting edge research into how women and men behave within a negotiation—one the participants would likely not recognize as being based on gender. Budget Time was created to address that need.

Why Run Budget Time?

Exercises that are conspicuously “themed” are inherently problematic. For example, in a business ethics class running an exercise dealing with ethical issues is often like lobbing a softball—it is big, slow, and it is not too tough to put the bat on the ball. Yes, in the comfort of a business ethics class executives from Arthur Andersen could come up with the ethically correct answer of “no” to the question, would you shred financial documents that you knew were the target of a federal investigation?

The same “this is just too obvious” problem can also arise in a negotiation class if a simulation is unmistakably gender based (e.g., the negotiation topic is sexual harassment, spousal abuse, or divorce). Budget Time is a nonobvious gender-based negotiation presented simply as an internal negotiation between a vice president (VP) and a department head regarding next year’s budget increase. To the participants that is all they see, that is, dialogue in pursuit of an agreed-on budget increase. There is no mention of gender. Differences in negotiated outcomes are enacted by using a disadvantaged department head role and an advantaged department head role, both negotiating with the same VP role.

We have not found another exercise that enacts as many learning outcomes as Budget Time is able to do. In other gender-based exercises, the parties are aware they are negotiating in a gender-related context as illustrated by the self-designated gender negotiation simulations currently available from the Harvard Program on Negotiation (n.d.):

Budget Time incorporates all the subtle disadvantages women often experience without the participants knowing that is what the exercise entails. Participants are simply told to negotiate next year’s budget increase for their department, and go into the negotiation with no knowledge that they are undertaking a negotiation containing gender-related issues. This is beneficial in two ways: (a) there is no concern that participants are trying to “do the right thing” or “give the correct answer” because of the context and (b) the outcomes demonstrate that, regardless of gender, certain disadvantages may occur. The research indicates, however, in the real-world disadvantages occur more often to females than to males.

Learning Objectives

Budget Time has many takeaways for participants. In fact, there at least 13 differences between the advantaged and disadvantaged department head roles. There are numerous learning objectives, all based on research by expert academics in the field of negotiation and gender (see Appendix F, Debrief Issues/Learning Objectives). At a minimum, Budget Time should provide participants with an appreciation and deeper understanding of the role gender plays in negotiation, as well as how to mitigate the effect of certain disadvantages. Major learning objectives include the following:

Budget Time provides an excellent platform to not only teach the participants what the research says but to have them actually experience and validate the research.

Gender Issues in Negotiation: What the Research Says

We began by reviewing the research of experts in the field of negotiation and gender, including Deborah Kolb and Kathleen McGinn of Harvard University; Leigh Thompson and Adam Galinsky of Northwestern University; Linda Babcock of Carnegie Mellon University; Laura Kray of University of California, Berkley; and Christina Bombelli of Bicocca University (Milan, Italy). Facilitators running this simulation should have knowledge of general negotiation terminology (e.g., best alternative to a negotiated agreement [BATNA], reservation price, target), but should also be able to discuss the special topics and learning objectives that Budget Time incorporates. The following are the 13 special topics that are the learning objectives contained in Budget Time: glass cliff, self-fulfilling prophecy, preventative negotiation, initial aspirations and anchoring, lack of self-promotion, sacrifice self-interest/aspirational collapse, ungrounded assumptions/low self-esteem, corporate policies versus corporate culture, women don’t ask, negotiations with a little “n” versus negotiations with a big “N,” networks, avoiding backlash against women who do self-promote, and stereotype threat. Each issue is defined in Appendix F—Debrief Issues/Learning Objectives, which may also be used as a handout for participants during the debrief.

How to Facilitate the Exercise

Some participants in a negotiation class or workshop often try to anticipate and “game” simulations that are being run. To mask its gender focus, Budget Time can be introduced by saying something along the lines of:

We’ve conducted several negotiations where one party is negotiating on behalf of him or herself opposite an unrelated party, i.e., an external negotiation. Well, a lot of important negotiations take place within organizations that prominently implicate issues of fairness, morale, and organizational norms. Accordingly, it’s highly valuable to examine internal negotiations as well as external ones.

Given the structure of Budget Time, participants are not likely to discern the gender component of the exercise. While there is only one VP role (Appendix A), there are actually two separate department head roles:

In a 3-hour class, we have the participants prepare during class time. However, if you have a shorter class (e.g., 80-90 minutes), we recommend giving the participants the role sheets in advance, but only after emphasizing the confidential nature of the role sheets along with explicit instructions prohibiting any discussion or sharing of the role sheets. Once the participants have prepared, they should disperse in pairs (one VP and one department head) so that no pair may overhear the negotiation of the other pair. You may also wish to number both the VP role and the department head role so that the participants are randomly paired. Instruct the participants to negotiate for a set period of time (45-60 minutes). Once all the pairs have completed the negotiation, record the results and begin the debrief (see Appendices D, E, and F). Table 1 contains complete instructions for the facilitator.

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Table 1.

Facilitator Instructions.

Preclass preparation:	(1) Make copies of the vice president role in one color (Appendix A). (2) Make copies of the department head role in a different color (copy half from the “advantaged” role—Appendix B and half from the “disadvantaged” role—Appendix C). Note. Both the advantaged and disadvantaged roles must be the same color. (3) Number the vice president roles. (4) Number the department head roles (consider using even numbers for the “advantaged” roles and odd numbers for the “disadvantaged” roles).
Running the simulation:	(1) Introduce the exercise (making no mention of gender)—use language suggested in the paper: “We’ve conducted several negotiations where one party is negotiating on behalf of him or herself opposite an unrelated party, i.e., an external negotiation. Well, a lot of important negotiations take place within organizations that prominently implicate issues of fairness, morale, and organizational norms. Accordingly, it’s highly valuable to examine internal negotiations as well as external ones.” (2) Instruct the students that they will have 30 minutes to prepare individually or hand out prior to class. (3) Pair the students—call out each number and have the corresponding vice president and department head raise their hands so they know their negotiation counterpart. (4) Negotiation timing—instruct the students to spread out so no one can overhear their negotiations. They will have 45 to 60 minutes to complete the negotiation.
The debrief:	(1) Record results—put the team numbers and amounts of budget increase on the whiteboard. (2) Ask students— • Did all the department heads have the same performance scores? • Why do you think the results are so disparate? • Do you see a pattern in the outcomes? (3) Begin the discussion of the research integrated into the simulation (see Appendices D, E, and F).

Notes on the Role of the Department Head: Advantaged Versus Disadvantaged

The roles for the department heads were drafted specifically to put the participants in one of two modes. The advantaged department head is primed with a promotion focus and the disadvantaged department head is primed with a prevention focus (see Table 2 for specific examples of promotion- versus prevention-focused behaviors). Nevertheless, there are many similarities between the advantaged and the disadvantaged roles.

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Table 2.

Specific Examples of Promotion- Versus Prevention-Focused Behaviors.

Promotion focused	Prevention focused
Backfire effect	Stereotype threat
Strong anchors—focus on target price	Weak anchors—focus on reservation price
Ask for what you want and resist early capitulation	Aspirational collapse
Self-promotion	Belief that work world is a meritocracy
Connect goals to the goals of the organization	Make ungrounded negative assumptions about how other person will react
Act with confidence	Fear and defensiveness

For example, as part of the evaluation process for the department heads, metrics are used to grade the prior year’s performance. (The metric system used by the organization scores each area on a scale of 1 to 10, with “1” being extremely poor and “10” being outstanding.) To correspond with the VP role, both department head roles provide the same numeric preliminary assessment of how the department performed during the last fiscal year; namely: (a) a “3” in product development, (b) a “9” in professional development and training, and (c) a “5” in customer relations and marketing. Moreover, in both roles the department head took a leave from work on the birth of a child. While both department head roles tell essentially the same story, numerous gender-laden differences—per the research—are baked into the disadvantaged department head role. As the research indicates, there are significant but opaque advantages men often enjoy in the workplace, along with a number of disadvantages that women often face. Examples include the glass cliff (Kolb, 2010), exclusion from networking activities (Perrewe & Nelson, 2004), and the policies versus the actual culture of organizations (Kolb, 2010). The advantaged (i.e., the workplace of men) and disadvantaged (i.e., the workplace of women) role sheets purposefully reflect what the research says is all too often commonplace.

There is nothing fair about the difference in roles and, yes, the deck is stacked (see Appendix E, Contrasting verbiage). The exercise is purposefully designed to produce wildly disparate results in terms of how much money the VP increases the budget by. Outliers notwithstanding, those with the disadvantaged role generally get an increase of $175,000 to $275,000, while those with the advantaged role tend to get from $900,000 to $1.1 million.

By coding the role sheets differently, we prime each negotiator to enter the negotiation with either a prevention focus (the disadvantaged role) or promotion focus (the advantaged role). In dyadic negotiations, negotiators with a promotion focus achieve superior outcomes than negotiators with prevention focus in two ways: (a) they claim more resources at the bargaining table and (b) they create more resources at the bargaining table that benefit both parties (Galinsky, Leonardelli, Okhuysen, & Mussweiler, 2005). The rationale is that promotion-focused negotiators pay more attention to their target prices and also make more extreme opening offers. Moreover, in multi-issue negotiations, a promotion focus increases the likelihood that a dyad will achieve a jointly optimal outcome as compared with prevention-focused dyads (Galinsky et al., 2005). Table 2 categorizes certain behaviors we see as promotion focused versus prevention focused. The prevention- versus promotion-focused behavior artificially creates outcomes associated with various pitfalls many women (and those with less power in a given scenario) experience during negotiation.

The Debrief: An Overview

When debriefing Budget Time, we use the following structure and set of materials to help participants see as many learning outcomes as possible from their negotiation experiences:

More on How to Conduct the Debrief

During the debrief it is important to stress to those randomly assigned the role of disadvantaged department head that, under the circumstances, they were likely to obtain a very modest budget increase. Accordingly, they should not be embarrassed by any such modest increase compared with those with an advantaged role. In fact, it is the large gap between the outcomes that gets their attention, arouses their curiosity, and sets the stage for a lively debrief. It is also crucial to point out—as will almost certainly be the case—that the men in the disadvantaged department head role performed similarly to females in that same role. This is good news, in that it demonstrates how anyone saddled with such disadvantages is likely to suffer an adverse outcome. Moreover, women in the role of advantaged department head will likely have performed as well (or better) than men in those same roles.

Another common theme for the facilitator, throughout the debrief of Budget Time, is to emphasize “not all women, not all the time.” In other words, while much of the research indicates statistically significant differences in approaches used and circumstances encountered by men versus women, it is critical to emphasize to participants that all women do not experience the disadvantages built into Budget Time nor do all men enjoy the advantages.

Once the banter and occasional teasing over outcomes subsides, participants are told how the two department head roles were created, one advantaged and one disadvantaged. We then explain how even though both department head roles have a common core narrative, the disadvantaged role incorporates what research indicates are a number of disadvantages women often experience when negotiating. It should be noted that the disadvantages tend to fall primarily into two categories—one external and the other internal. External disadvantages are adverse circumstances women often encounter. Internal disadvantages are various states of mind common to women that can undermine the approach one takes in a negotiation.

To better understand how Budget Time works, drawing specific examples from the role sheets is instructive (see Appendix E—Debrief and Takeaways, Contrasting verbiage, which you may wish to hand out to the participants). By way of illustration, Item 1 in Appendix E makes clear that the advantaged role informs the participant that “you were officially promoted and you formally took over as department head.” The disadvantaged role begins with the department head also moving into the same vacated position, but concludes with this notable difference:

you have simply been the acting or interim department head.

Moreover, the advantaged role states how the new department head has moved into the coveted and prestigious corner office, while the disadvantaged department head remains in the old office. So right from the outset, the two different department head roles portray an all too frequent gender-based feature of the workplace: When males move upward into a vacated position, the full title, higher salary, and other accoutrements of power are often awarded, whereas females are more likely to be relegated to “interim” or “acting” status, absent the higher salary and other accoutrements of power. This phenomenon is known as the glass cliff (Kolb, 2010). It is an external disadvantage related to organizational and structural obstacles women often encounter.

A second example of the differences in the role sheets is how the advantaged role is aspirational and provides target dollar figures for the three budget items under consideration, adding up to a total of $1.1 Million (see Appendix E, Items 4, 6, and 9). Although the disadvantaged role also includes dollar figures for the same three budget items, those dollar figures are much more modest and anything but aspirational.

Accordingly, the disadvantaged department head is not thinking of targets at all, but instead is saddled with a mentality of “what’s the least I can get by on?” (This is an internal disadvantage and, incidentally, not at all an infrequent posture of low-power negotiators.) The foregoing dollar amounts add up to a paltry $190,000. In anticipation of these meager amounts being referenced in protest during the debrief by disadvantaged department heads that fare poorly, consider the following excerpt from the disadvantaged role:

Although your department could do with four or five times that number, trying to get close to matching a $200,000 total budget increase for your department (without upsetting your supervisor too much) would be a step in the right direction.

The above framing is done for three reasons. First, research indicates males tend to be more aspirational than females (Thompson, 2008). Second, gender notwithstanding, those negotiators who do not set targets create a disadvantage for themselves, while negotiators who do set targets create an advantage for themselves (Thompson, 2008). Third—and most important—even though those with the disadvantaged role are not directly given the target amounts provided to those with advantaged role, they are explicitly told that they could really use “four or five times” the amount their reservations points add up to, which puts them in the target range of $800,000 to $1 million—right on par with those who have the advantaged role (see Appendix E, Item 11). Despite being told they could use “four or five times” the $200,000 the other department head received, they take such ownership of other incorporated psychological burdens that most do not even recall this verbiage being a part of their role sheets, and this typically has to be explicitly pointed out to them. These examples are, but a few, of the 13 differences between the advantaged and disadvantaged role sheets. The facilitator should carefully review Appendices D, E, and F to become familiar with all the differences in verbiage, as well as the related learning objectives. For ease of reference, each appendix contains information numbered from 1 to 13. For example, if you look at Item 1 on Appendix E (Contrasting verbiage), this language sets up the learning objective of the glass cliff, which is defined in Item 1 of Appendix D (Teaching Notes). Moreover, Item 1 of Appendix F (Debrief Issues/Learning Objectives) contains an overview of the learning objective, definition, and research citation for the glass cliff. Appendix D, the facilitator’s best friend, is an outline of a debrief consisting of all 13 learning objectives.

Facilitators may discuss all 13 features or pick and choose the learning objectives that in their judgment are most appropriate for the participants in their class or training session. In most instances, however, the participants are so engaged in the debrief, so willing to share their own experiences, and so fascinated by the supporting research that only some of the 13 gender-based features can or will be covered. As a caveat, you should be prepared for some in the room who may attempt to challenge or discount the research.

We have run this negotiation for numerous undergraduate and graduate classes, as well as for executive education and corporate training. As a whole (and as designed and expected), the advantaged department heads greatly outperform the disadvantaged department heads. While this is not surprising, it is significant in that when analyzed the differences between the advantaged and disadvantaged department heads in part are a matter of attitude and approach, both of which can be changed (i.e., the internal factors of both attitude and approach are arguably fixable).

By way of example, “attitude” would include approaching the negotiation with a focus on integrative rather than distributive negotiation, that is, attempting to negotiate a win-win outcome rather than trying to best the other party. “Approach” would include focusing on reaching your target by making a strong anchor with a good reason, rather than not making the big ask out of fear of rejection. The objective information in each role is the same. Perhaps more significantly is that males in the role of disadvantaged department head perform similarly to females in the same role. This is a positive factor in that it demonstrates what can be accomplished with a change in the way one approaches the negotiation (i.e., promotion-focused behavior or prevention-focused behavior).

As for the external factors (e.g., job title, bigger office, etc.), participants are made more aware of the structural and organizational obstacles that may place certain individuals at a disadvantage. This is a key learning objective, particularly for those who will be or are in positions of power, for they will now be on the lookout for external circumstances working to the disadvantage of others.

Evidence of Participant Learning and Participant Experiences

Early runs of the simulation were done by making sure only women got the disadvantaged roles, but then we thought, why not distribute roles randomly, so both men and women get advantaged and disadvantaged roles? Sure enough, the wildly disparate results between the advantaged and disadvantaged department heads still prevailed regardless of gender, and an even more powerful takeaway was provided.

Tables 3 and 4 are illustrative of the kind of results that typically ensue. Table 3 shows how from the last 15 runs of Budget Time those with the disadvantaged role received an average increase of $186,000, while those with the advantaged role secured an average of $997,000. Table 4 is one example of typical results from a class with 32 participants (or 16 dyads). With those differences in results, participants realize something is up, but they have no idea that Budget Time has anything to do with gender, especially since the simulation is designed to run regardless of what genders play what roles.

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Table 3.

Average Results From 15 Runs of Budget Time.

Average budget increase for those with the disadvantaged role sheet	Average budget increase for those with the advantaged role sheet
$186,000	$997,000

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Table 4.

Results From Most Recent Run of Budget Time 16 Total Dyads.

Disadvantaged role (odd-numbered dyads)		Advantaged role (even-numbered dyads)
Dyad #	Budget increase	Dyad #	Budget increase
1	$174,000	2	$1,200,000
3	$208,000	4	$847,000
5	$163,000	6	$1,015,000
7	$196,000	8	$923,000
9	$227,000	10	$969,000
11	$137,000	12	$951,000
13	$191,000	14	$1,250,000
15	$177,000	16	$973,000

Occasionally, some males want to know why, since Budget Time is a gender-based simulation, they ended up with the disadvantaged role, the irony of such an inquiry often lost on the males asking the question. We then explain that taking up gender issues in a negotiation class can be a delicate topic and the mere mention of a gender-based simulation in advance of running it can trigger various emotional responses in some participants that can affect the way they approach the simulation. By virtue of participants having no idea that Budget Time is a gender-based simulation, any preconceived attitudes toward gender issues that may influence the exercise are not in play.

On one occasion, a highly successful, superconfident male MBA student with an impressive work history randomly received a disadvantaged role and ended up with a relatively small increase. The student, who prided himself on having often achieved strong results in prior negotiations, was visibly upset. When the gender-based nature of the disadvantaged role was disclosed during the debrief, he became highly agitated, saying it was unfair and that would never happen to him in real life. He was right of course, and the point could not have been made more forcefully. He is a man and the burdens placed on him by having the disadvantaged role is something he rarely, if ever, faces in his real-life business dealings.

It turns out that the story of this particular male MBA student has a fascinating epilogue. Six months later—after he had finally calmed down—we encountered the same gentleman at an MBA/Faculty social gathering. He approached us and said,

Hey, remember that Budget Time negotiation simulation we ran where I got all bent out of shape? Well, my fiancée is in law school and we’ve been talking about it ever since. She told me that she experiences in real life the same kind of things featured in the simulation. Thanks for running the exercise. I didn’t have a clue and even though I reacted like a jerk at the time, I really learned a ton—that’s great stuff!

Some women in the room, quite understandably, have occasionally protested that they believe they are typically quite successful in their real-world negotiations and, accordingly, do not identify with the features incorporated into the disadvantaged role. We quickly assure those women that we find their self-assessment eminently credible, but not at all at odds with the exercise. Budget Time is not about making some overbroad and generalized claim that all woman face all the incorporated gender-based issues all the time. Moreover, that some women challenge the research during the debrief is seen as a positive to the extent the “backfire effect” is triggered. In other words, when some women hear about purported disadvantages they may face in negotiation, they become more resolute about succeeding and thus, the “backfire effect” has the desirable impact of causing women to take steps to overcome difficulties they may encounter going forward (Thompson, 2008).

We further explain how Budget Time is a platform for gender-based issues in negotiation and is designed to initiate a robust discussion of those issues. While no woman is likely to experience all the issues baked into Budget Time, many women identify with many of the issues. In fact, this is one of the noteworthy aspects of most Budget Time debriefs. Given what is typically a significantly high level of identification in the room as a whole with most of the issues, the participants tend to eagerly weigh in with their own experiences, which include males in the room who typically begin to recognize the issues with an enhanced awareness. Budget Time is so provocative to most participants and includes so many potential discussion issues that on no occasion have we ever been able to discuss all of the issues built into the exercise during the debrief.

We have studied the instructive and powerful research on gender issues in negotiation, and are grateful for the work done by scholars in the field. That said, we discovered that presenting the research directly was not always well received by everyone and how, unfortunately, some people found the very topic off-putting—if not downright polarizing.

Participants emerge from this exercise with a better understanding of the role gender plays in negotiation. Feedback indicates that male participants readily share the learning with the important females in their lives (wives, sisters, mothers, colleagues, and friends). Female participants emerge with more confidence and a prescription for how to avoid gender pitfalls from the start.

Alternative Debrief Approach

As explained, Budget Time is written in such a way as to provide no indication to the participants that the exercise has anything to do with gender. It is only during the debrief that a discussion of gender issues in negotiation is explicitly raised and discussed. Sometimes, however, the mere mention of Budget Time being a gender-based negotiation—no matter how much it is based on research—creates a palpable tension in the room that causes some people to become variously defensive, contentious, or silent.

In order to delay the risks associated with announcing the gender component in Budget Time, we have recently begun to initiate the debrief in a slightly different way. After the widely disparate outcomes are posted for all to see, instead of explaining the advantaged and disadvantaged roles in terms of gender, we first differentiate the roles based on power. We tell the participants that one of the department heads had a lot of power and the other had very little. We further explain how the power allocation was derived from research pertaining to power in the workplace. At that point, we begin to draw attention to specific power variations between the advantaged and disadvantaged role sheet.

We then invite participants to comment on the power differentials to the point of sometimes directly asking if any other issues come to mind. Occasionally, gender is specifically mentioned and other times, it is not. In one ironic instance, a male MBA student who randomly received the disadvantaged role sheet said—somewhat jokingly—that his role sheet made him “feel like a girl.”

This power first approach to the debrief serves several purposes. The first is how discussing power (instead of gender) is less likely to evoke the negative emotional reactions of defensiveness, contentiousness, and silence that the word gender sometimes precipitates. Second, it is interesting to see who, if anyone, in the room makes the connection to gender. Third, many of the power distinctions between the advantaged and disadvantaged roles exist in contexts beyond gender (e.g., the size of one’s network and access to information one can glean from a larger network). This is particularly valuable for instructors who wish to discuss power differentials beyond the context of gender. Fourth, once the gender component is explicitly before the group, it is interesting to see who stays in the conversation, who drops out, and who changes their tone.

Conclusion

Budget Time creates a platform for exploring gender and other power issues in negotiation. The participants do not see the gender issues coming, the exercise works well for learning objectives regardless of the gender playing the various roles, and the significantly different results the simulation reliably delivers leads to a fascinating and highly educational debrief. Moreover, despite often substantial differences in the Budget Time participants (undergraduates, MBA candidates, MS students, executives, foreign students), the results have been startlingly similar throughout the years we have run Budget Time.

Accordingly, those who participate are rewarded with an enhanced and sophisticated awareness of gender issues in negotiation, and prescriptions for mitigating disparate outcomes that are often a function of gender. Those who facilitate Budget Time are able to provide an engaging and powerful platform for featuring and exploring the outstanding gender research that helps all of us of improve our understanding of gender issues in negotiation.