Thoughts and Insights by Michael Gregory

Do attitudes matter in conflict resolution and negotiations?

As an experienced mediator and negotiator, I have asked myself this question. Researching it further I wanted to share with you what I have learned. Other experts in the field have offered advice too. Attitudes drive behaviors. There seems to be a consensus that yes, mental attitudes play a critical role in determining whether a mediation or a negotiation is successful. A deeper dive into the process is presented to help you and for you to help others that may be involved with self-determining mediations or negotiations.

IRS and conflict resolution – Part 6 Thoughts on Rev. Rul. 59-60

One of the fundamentals of business valuation training is Revenue Ruling 59-60. Although published in 1959 with the express purpose to “outline and review in general the approach, methods and factors to be considered in valuing shares of the capital stock of closely held corporations for estate tax and gift tax purposes” it has been accepted by the federal courts in applications of fair market value across the board. This commentary introduces the main points of the revenue ruling, provides some insights from a historical perspective and comments on a recent publication regarding Revenue Ruling 59-60 and its application to Subchapter S corporations, limited liability corporations, and partnerships.

What does it mean to be ethical in a negotiation?

Having taught ethics to CPA societies and in other venues I make use of my own texts and also those of Linda Fisher Thornton with her book, 7 Lenses: Learning the Principles and Practices of Ethical Leadership.  This commentary makes use of these sources and an article from the Harvard Law School Program on Negotiation written by Katie Shonk entitled Ethics in Negotiation: Avoid Complicity in Wrongdoing. In negotiations this implies not committing illegal and immoral acts, but also calling out unethical behavior of others. Shonk’s article highlights Max Bazerman’s book, Complicit: How We Enable the Unethical and How to Stop. You only have one reputation. You need to protect that all costs. So, what do you do? Read on.

Should you make the first offer in a multi issue negotiation? Yes, but…

When you are involved in a multi-issue negotiation you may have asked yourself whether you should make the first offer and if so on which issue? Should you offer something significant on a major issue? Should you offer a token offer on a minor issue? There are different schools of thought on this. Recent research from the Harvard Program on Negotiation at Harvard Law School offers some good insights for you to take advantage of this multi-issue negotiation. Additional insights are provided based on real world negotiations between a major taxpayer and the IRS.

Business valuers, the IRS, and conflict resolution – Part 4 S-Corp issues

This is the fourth in a series of six monthly technical blogs on issues related to business valuation. Many business valuers believe that all entities whether a C-corp that is taxed or an S-corp that pays no federal income taxes should both be valued as if they pay tax (Grabowski, Mercer, Van Vleet)[i]. These business valuers believe there is no difference in the determination of fair market value. Others believe there is an S-corp adjustment to be made, but it should not be fully taxed (Fannon, Treharne)[ii]. These approaches suggest a premium for an S-corp. In general, the IRS believes that an S-corp should not be tax affected since it does not pay federal income taxes. This article looks at this issue in general. For a more complete analysis of this topic see original commentary dated Valuing Interests in S Corps (2013) or an updated and more comprehensive commentary within Business Valuations and the IRS (2018).   [i] https://www.amazon.com/Business-Valuations-IRS-Michael-Gregory/dp/1945148020 (423-433 and 436-441)   [ii] https://www.amazon.com/Business-Valuations-IRS-Michael-Gregory/dp/1945148020 (419-423 and 433-435)  

What are the keys for a successful mediation?

Having been involved in over 2,500 mediations, facilitations, and negotiations in my career, I thought what are keys to a successful mediation? Revisiting this I want to offer you some thoughts that may help you. My experience is largely oriented towards the federal judicial system, working with experts and clients, administratively with the IRS, and as a volunteer in housing court, conciliation court, with neighborhood disputes, in public housing and other venues including between gangs. I have found that alternative dispute resolution focusing on mediation works, saves time and money, is confidential, and it is successful in implementation because the parties produced a solution that they can both live with going forward. What follows are some key elements and what I have found as best practices that you may find helpful too.

When using a mediator what process might be used?

When humans interact on a conflict it does not mean there have to be negative consequences. Disputes, conflicts, or disagreements can be addressed in a number of ways, but sometimes a third party mediator may help the parties look at the situation differently allowing the parties to actually grow as part of the process. A trained mediator familiar with the area in question can often cut to the chase and help de-escalate the situation to focus on the substantive issues. In previous posts the various alternative forms of mediation were introduced (evaluative, facilitative, transformative) including with an application to family businesses. What these demonstrate is that mediation can play a vital role in addressing these types of disputes.

What mediation techniques should you use to resolve disputes between employees?

Invariably conflicts or disputes arise between employees for a variety of reasons. Often the best solution is for the two parties to determine how  to work amicably with one another. However, sometimes these issues simmer over time or become caustic in nature. As a manager or peer this can poison a work environment. As a leader you may be called upon to work with the parties to help them come to a solution that everyone as a minimum can live with going forward. The hope would be to come to a solution where everyone is pleased with the final outcome. In reality often times the final solution maybe anywhere between these two extremes. So, how can you do this?

Does sympathy help during conflicts and negotiations?

Empathy puts yourself in someone else’s shoes emotionally. Sympathy by comparison is when you have feelings of pity or sorrow for someone else’s misfortune. In a dispute, conflict, or negotiation does sympathy work for or against you? You may be surprised. In this article by the Harvard Program on Negotiation they looked at five studies. What they found was that although you may have thought that sharing vulnerabilities may have caused the other side to pounce on the weakness, just the opposite was the case. Those that shared information about dealing with a difficult situation created a more mutually beneficial agreement. This commentary looks at this question a bit deeper.

Business valuers, the IRS, and conflict resolution – Part 1 Setting the stage

This is the first in a six part series looking at this topic. Today the focus is on expert witnesses in federal court sessions having various rules to follow regarding their expertise and reports. Given these rules how can an expert demonstrate leadership, help with dispute resolution, or conflict resolution working with the client or client’s representative to resolve the case with the other party and the other expert? Business valuers are taught to be advocates for their position and not for their client. They are to be independent. Only a small number of cases actually make it to court. The question is how does an expert witness such as a business valuer serve their client best with an out of court settlement? This last question will be addressed in a future monthly blogs.