Scenario #7: Partnership: The Unbalancing Act
I. Introduction
This scenario highlights a business partnership that is in decline. The conflict that
this creates and the resolution of it provide a good background for discussion of
the types and causes of conflict in organizations. Partnership agreements and
issues with venturing into business with personal friends are also explored.
II. Learning Objectives
1. To assess students’ understanding of the sources of conflict in organizations.
2. To analyze and evaluate approaches to conflict in a novel situation.
3. To identify issues concerning business partnerships.
III. Scenario Description:
Overview: Jonas Goldberg and Rande Gedaliah, lifelong friends, went into
business together to establish The LivingRoom, a café bookstore. Lately, Jonas
has not been doing his fair share of the work and has been unreliable, shirking
many of his important duties. Rande has reached the point of confronting Jonas
and wants to take immediate action to resolve this situation.
Profile:
 Rande Gedaliah is a Partner, manager, and co-owner of The LivingRoom,
a café and bookstore with an active community center and bakery. She is
solely responsible for overseeing the bakery, which distributes to local
restaurants and stores. In addition, she also manages the café and its
community events along with her partner.
 Jonas Goldberg co-founded The LivingRoom. As Co-owner and
Manager, Jonas oversees all bookstore needs and manages the café and
community events portion of the business with his partner and long-time
friend, Rande Gedaliah.
References: The references included in the DVD are:
 Sources of Conflict in Organizations (PPT 7-3)
 Types of Conflict in Organizations (PPT 7-5)
 Partner’s Duties (PPT 7-7)
 Nonwrongful Dissociations of Partnerships (PPT 7-8)
Back History: “The Living Room” is a small business located in the Boston
suburbs. The business is a new spin on the café bookstore, with the additions of
an active community center and bakery, with distribution to local
restaurants/stores.
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Jonas is a freelance writer and stay at home Dad with three young children. His
wife is a District Attorney. He was looking for a side venture as well as
supplemental income.
Rande is a divorced mother of two young schoolboys and a successful sculptor
who needed income with a schedule she could control. Randee is very levelheaded and generally calm, as long as all the balls she’s juggling stay in the air.
Rande and Jonas opened The LivingRoom two years ago and have recently
expanded the hours/customer flow drastically in an attempt to finally make a
decent income.
They split most of the business duties, share the larger tasks, and each spend a
certain number of hours in the café supervising – they are 50-50 partners. They
have known each other for years and years [their parents are family-friends] and
have had a generally smooth relationship. Jonas and Rande had agreed completely
about increasing business hours so drastically about two months ago. But Jonas
did not anticipate the impact this would have on his life and is struggling to deal
with it.
In the past six weeks Jonas has canceled meetings last minute, missed the Tax
Accountant meeting altogether, forgot to do employees weekly payroll twice, and
has not brought in a single community event for the month [both are responsible
for booking at least three lucrative events/month]. Meanwhile the change in
hours is exhausting Rande and Jonas’ unreliability is totally stressing her out.
Scene Set-up: After calling Jonas three times to remind him, Rande and Jonas are
finally meeting to discuss Rande’s dissatisfaction with Jonas’ contribution to the
company.
Scene Location: Back-room coffee-break area
The Meeting - Summary: Rande indicates to Jonas that the distribution of the
workload and his repeatedly missing meetings and other major responsibilities
(e.g., payroll) is not acceptable. Jonas understands this but contends he is doing
the best he can and is still contributing significantly to the business. Rande asks
him what can be done to improve this situation. Jonas cuts the meeting off
because he has to pick up his daughter. Rande tries to pin him down on another
meeting time which he half-heartedly agrees to.
6 Days Later – Rande finally meets with Jonas again and asks him what solutions
he came up with. He says he’d like to bow out gracefully but wants to reserve the
right to sell his share to whomever he wants in order to make the most money.
Rande seems relieved at his decision but explains that she has the first right of
refusal and that she has already discussed their partnership agreement with their
lawyer. They agree to meet with the lawyer the following Monday.
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Afterthoughts – Summary: Rande is shocked at Jonas’ expectation that he could
sell his share of the business to anyone he wants. She feels the interaction went
very poorly and is saddened that he didn’t seem to make their friendship or the
success of the business a priority in his life. She feels he never truly appreciated
the impact of his actions on their business or friendship. She notes the difficulty
of going into business with a friend.
Dossier: The specific artifacts included in the DVD are:
1. Meeting notes on establishing the business
2. Three voice messages from Rande’s assistant to Jonas
3. Email from Rande to their lawyer
IV. Discussion Questions:
The References and related Discussion Questions may be found in PowerPoint slides 7-1
to 7-9.
Learning Objective #1: To assess students’ understanding of the sources of conflict in
organizations.
1. Jonas and Rande are facing a difficult situation. What sources of conflict
contributed to the problems they are having? See PPT 7-3.
Several of the sources on PPT 7-3 could be offered. Specifically, scarce
resources seem to be a primary source because they need to operate the store
longer to be able to reach their financial goals. This increase in operations causes
an added burden on the partners and increases their need to be effective time
managers. Also, the partners have overlapping authority so Jonas has been
abdicating his share of the responsibility because of his family demands causing
Rande to do his share of the work.

1. What is the key problem?
A. Time management
B. Communication
C. Overlapping tasks
Time management is a critical issue because Jonas has not been able to
manage his time to fulfill his responsibilities.

2. Jonas’ behavior indicates:
A. Disinterest
B. Burn-out
C. Distraction
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Jonas’ behavior indicates distraction from the business due to family obligations.
This is demonstrated when he needs to leave the meeting to pick up his daughter.
Learning Objective #2: To analyze and evaluate approaches to conflict in a novel
situation.
1. Which type of conflict is depicted in this scenario? (see PPT 7-5)
Interpersonal conflict because the problem is between two individuals, Jonas and
Rande.
2. Evaluate Rande’s approach to resolving this conflict. What conflict management
style did she use: avoiding, accommodating, forcing, compromising, or
collaborating? Support your answer with examples from the scene.
Rande used a problem oriented approach, rather than person oriented. She
maintained ownership of the problem and described it in specific behavioral terms
rather than being judgmental or evaluative. She never raised her voice or became
overly emotional. She was firm when she felt it was necessary (e.g., refusing to
let him sell his share to someone else). She did not avoid or accommodate, she
attempted to collaborate to reach a mutually beneficial solution.

3. How was this meeting?
A. A success
B. A good start
C. A failure
Rande feels that this meeting was a failure because she could not get Jonas to
understand her point of view. However, the meeting could have gone a lot worse.
The issue didn’t get completely resolved so it wasn’t a success but Jonas agreed to
further communications and admitted that he had trouble meeting his
responsibilities so it was not a complete failure.
Learning Objective #3: To identify issues concerning business partnerships.
1. What unique challenges did Rande and Jonas face when entering into this
partnership?
They both have family obligations to juggle as well as shared responsibility of
every aspect of the business. They were friends prior to embarking on this
business. Jonas was used to a slower paced job in which he had more control
over his time (as a freelance writer). Rande was used to running her own agency
and being in control of all aspects of it.
2. What impact did their friendship seem to have on this partnership?
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Their friendship did not prevent them from creating a legal partnership agreement
which was a good decision. However, Jonas may have taken advantage of his
friendship with Rande figuring that she would pick up the slack when he couldn’t
fulfill his responsibilities. Rande may have delayed this conversation because she
didn’t want to have a difficult discussion with a friend.
3. What partner duties did Jonas fail to perform? See PPT 7-7.
Jonas failed to serve the partnership and exercise care. This is demonstrated by
missing critical meetings and failing to issue paychecks on time to employees.
4. What should happen to ensure that a nonwrongful dissociation of the partnership
occurs? See PPT 7-8.
The partner is volunteering to leave but he needs to abide by the partnership
agreement. Rande has been informed by her lawyer that the agreement reads that
she has the opportunity to buy Jonas’ share before he can seek other buyers.

4. How should Rande respond [to Jonas’ suggestion that he find a buyer]?
A. Accept offer
B. Refuse offer
C. Negotiate
Her appropriate response would depend on the specific language of the
agreement. If in fact it states that she has first right of refusal then she should
refuse Jonas’ suggestion that he find a buyer. If the language in the agreement
was unclear than she may try to negotiation a better situation.

5. What are Rande’s rights?
A. Choose partner
B. Buy out Jonas
C. None
Rande says that the lawyer says she can buy out Jonas.

6. What is the best solution?
A. End partnership
B. Solve problems
C. Redistribute work
Given the fact that Jonas admits he is overwhelmed and unable to contribute
enough to the business, they should probably end the partnership.
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