MCom I Semester Conflict Negotiation Study Material Notes
Table of Contents
MCom I Semester Conflict Negotiation Study Material Notes: A definition of Conflict Transition in Conflict Thought The Human Relation View Functional Versus Dysfunctional Conflict Process Cognition and Personalization Intentions Behavior Outcomes Negotiation bargaining Strategies Issues in negotiation Summary and Implications s for Managers :
CTET Paper Level 2 Previous Year Science Model paper II in Hindi
A Definition of Conflict
There has been no shortage of definitions of conflict Despite the divergent meanings the term has acquired, several common themes underlie most definitions. Conflict must be perceived by the parties to it; whether or not a conflict exists is a perception issue. If no one is aware of a conflict, then it is generally agreed that no conflict exists. Additional commonalities in the definitions are opposition or incompatibility and some form of interaction. These factors set the conditions that determine the beginning point of the conflict process.
We can define conflict, then, as a process that begins when one party perceives that another party has negatively affected, or is about to negatively affect, something that the first party cares about
This definition is purposely broad. It describes that point in any ongoing activity when an interaction “crosses over” to become an interparty conflict. It encompasses the wide range of conflicts that people experience in organizations-incompatibility of goals, differences over interpretations of facts, disagreements based on behavioral expectations, and the like. Finally, our definition is flexible enough to cover the full range of conflict levels from overt and violent acts to subtle forms of disagreement
Conflict Negotiation Study Material
Transitions in Conflict Thought
It is entirely appropriate to say that there has been conflict” over the role of conflict in groups and organizations. One school of thought has argued that conflict must be avoided—that it indicates malfunction within the group. We call this the traditional view. Another school of thought, the human relations view, argues that contlict is a natural and inevitable outcome in any group and that it need not be evil, but rather has the potential to be a positive force in determining group performance. The third, and most recent, perspective proposes not only that conflict can be a positive force in a group but explicitly argues that some conflict is absolutely necessary for a group to perform effectively. We label this third school the interactionist approach. Let’s take a closer look at each of these views
The Traditional View
The early approach to conflict assumed that all conflict was bad. Conflict was viewed negatively and it was used synonymously with such terms as violence, destruction, and irrationality to reinforce its nee ative connotation. Conflict, by definition, was harmful and was to be avoided.
The traditional view was consistent with the attitudes that prevailed about group behavior in the 1930s and 1940s. Conflict was seen as a dysfunctional outcome resulting from poor communication a lack of openness and trust between people, and the failure of managers to be responsive to the needs and aspirations of their employees.
The view that all conflict is bad certainly offers a simple approach to looking at the behavior of people who create conflict. Since all conflict is to be avoided, we need merely direct our attention to the causes of conflict and correct these malfunctionings in order to improve group and organizational performance. Although research studies now provide strong evidence to dispute that this approach to conflict reduction results in high group performance, many of us still evaluate conflict situations using this outmoded standard.
Conflict Negotiation Study Material
The Human Relations View
The human relations position argued that conflict was a natural occurrence in all groups and organizations. Since conflict was inevitable, the human relations school advocated acceptance of conflict. Proponents rationalized its existence: It cannot be eliminated, and there are even times when conflict may benefit a group’s performance. The human relations view dominated conflict theory from the late 1940s through the mid-1970s.
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Functional Versus Dysfunctional Conflict
The interactions view does not propose that all conflicts are good. Rather, some conflicts support the goals of the group and improve its performance; these are functional, constructive forms of conflict. In addition, there are conflicts that hinder group performance: these are dysfunctional or destructive forms of conflict.
What differentiates functional from dysfunctional conflict? The evidence indicates that you need to look at the type of conflict.’ Specifically, there are three typest task, relationship, and process.
Task conflict relates to the content and goals of the work. Relationship conflict focuses on interpersonal relationships. Process conflict relates to how the work gets done. Studies demonstrate that relationship conflicts are almost always dysfunctional. Why? It appears that the friction and interpersonal hostilities inherent in relationship conflicts increase personality clashes and decrease mutual understanding, which hinders the completion of organizational tasks. On the other hand, low levels of process conflict and low to moderate levels of task conflict are functional. For process conflict to be productive, it must be kept low. Intense arguments about who should do what becomes when it creates uncertainty about task roles, increases the time to compeers working at cross purposes. Low to moderate levels of task conflict consistent Demonstrate a positive effect on group performance been use it stimulates discussion of a help group perform better.
The Conflict Process
The conflict process can be seen as comprising five stages: potential opposition or incompatibility, cognition and personalization, intentions, behavior, and outcomes. The process is diagrammed in Exhibit 14-1.
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Stage 1: Potential Opposition or Incompatibility
The first step in the conflict process is the presence of conditions that create opportunities for conflict to arise. They need not lead directly to conflict, but one of these conditions is necessary if the conflict is to surface. For simplicity’s sake, these conditions (which also may be looked at as causes or sources of conflict) have been condensed into three general categories: communication, structure, and per sonal variables.
Communication Deepak had worked in supply chain management at Bristol-Hotel for three years. She enjoyed her work in large part because her boss, Ranjan, was a great guy to work for. Then Ranjan got promoted six months ago and Vijay took his place. Deepa says her job is a lot more frus trating now. “Ranjan and I were on the same wavelength. It’s not that way with Vijay. He tells me something and I do it. Then he tells me I did it wrong. I think he means one thing but says some thing else. It’s been like this since the day he arrived. I don’t think a day goes by when he isn’t yelling at me for something. You know, there are some people you just find it easy to communicate with. Well, Vijay isn’t one of those!”
Deepa’s comments illustrate that communication can be a source of conflict. It represents the opposing forces that arise from semantic difficulties, misunderstandings, and “noise” in the communication channels. Much of this discussion can be related back to our comments on communication in Chapter
A review of the research suggests that differing word connotations, jargon, insufficient exchange of information, and noise in the communication channel are all barriers to communication and potential antecedent conditions to conflict. Evidence demonstrates that semantic difficulties arise as a result of differences in training, selective perception, and inadequate information about others. Research has further demonstrated a surprising finding: The potential for conflict increases when either too little or too much communication takes place. Apparently, an increase in communication is functional up to a point, whereupon it is possible to overcommunicate, with a resultant increase in the potential for conflict. Too much information as well as too little can lay the foundation for conflict. Furthermore, the channel chosen for communicating can have an influence on stimulating opposition. The filtering process that occurs as information is passed between members and the divergence of communications from formal or previously established channels offer potential opportunities for conflict to arise.
Structure Meera and Rubina both work at In Style-a large discount furniture retailer. Meera is a salesperson on the floor; Rubina is the company credit manager. The two women have known each other for years and have much in common-they live within two blocks of each other, and their oldest daughters attend the same middle school and are best friends. In reality, if Meera and Rubina had different jobs they might be best friends themselves, but these two women are consistently fighting battles with each other. Meera’s job is to sell furniture and she does a heck of a job. But most of her sales are made on credit. Because Rubina’s job is to make sure the company minimizes credit losses, she regularly has to turn down the credit application of a customer with whom Meera has just closed a sale. It’s nothing personal between Meera and Rubina–the requirements of their jobs just bring them into conflict.
The conflicts between Meera and Rubina are structural in nature. The term structure is used, in this context, to include variables such as size, degree of specialization in the tasks assigned to group members, jurisdictional clarity, member goal compatibility, leadership styles, reward systems, and the degree of dependence between groups.
Research indicates that size and specialization act as forces to stimulate conflict. The larger the group and the more specialized its activities, the greater the likelihood of conflict. Tenure and conflict have been found to be inversely related. The potential for conflict tends to be greatest when group members are younger and when turnover is high.
The greater the ambiguity in precisely defining where responsibility for actions lies, the greater the potential for conflict to emerge. Such jurisdictional ambiguities increase intergroup fighting for control of resources and territory.
Groups within organizations have diverse goals. For instance, supply management is concerned with the timely acquisition of inputs at low prices, marketing’s goals concentrate on disposing of outputs and increasing revenues, quality control’s attention is focused on improving quality and ensuring that the organization’s prod meet standards, and production units seek efficiency of operations by maintain Hewlett-Packard manager Tom Alexander stood on a HP printer steady production flow. This diversity of goals among groups is a major source during a meeting of company of conflict. When groups within an organization seek diverse ends, some of which engineers to make a point about like sales and credit at In Style-are inherently at odds, there are increased opportuincompatible goals. HP’s goal was nities for conflict. to develop a low-cost, lightweight
Personal Variables Did you ever meet someone to whom vol took an immediate disliker Most of the opinions they expressed, you disagreed with. Even insignificant characteristics-the sound of their voice, the smirk when they smiled, their personality-annoyed you. We’ve all met people like that. When you have to work with such individuals, there is often the potential for conflict.
Our last category of potential sources of conflict is personal variables. They include the individual.ual value systems that each person has and the personality characteristics that account for individual idiosyncrasies and differences.
The evidence indicates that certain personality types-for example, individuals who are highly authoritarian and dogmatic-lead to potential conflict. Most important, and probably the most overlooked variable in the study of social conflict, is differing value systems. Value differences, for example, are the best explanation of diverse issues such as prejudice, disagreements over one’s contribution to the group and the rewards one deserves, and assessments of whether this particular book is any good. That Kanwaljeet dislikes Bengali’s and Aditi Paul believes Kanwaljeet is arrogant, that an employee thinks he is worth Rs five lacs a year but his boss believes him to be worth Rs four lacs, and that Anu thinks this book is interesting to read while Sangeeta views it as the trash are all value judgments. And differences in value systems are important sources for creating the potential for conflict.
Conflict Negotiation Study Material
Stage II: Cognition and Personalization
If the conditions cited in Stage I negatively affect something that one party cares about, then the potential for opposition or incompatibility becomes actualized in the second stage. The antecedent conditions can lead to conflict only when one party or more is affected by, and aware of the conflict. As we noted in our definition of conflict, perception is required. Therefore, one or more of the parties must be aware of the existence of the antecedent conditions. However, because a conflict is perceived does not mean that it is personalized. In other words, “A may be aware that Band Aare in serious disagreement… but it may not make A tense or anxious, and it may have no effect whatsoever on A’s affection toward B.10 It is at the felt level that individuals become emotionally involved, that parties experience anxiety, tension, frustration, or hostility.
Keep in mind two points. First, Stage II is important because it’s where conflict issues tend to be defined. This is the point in the process at which the parties decide what the conflict is about. And, in turn, this “sense-making” is critical because the way a conflict is defined goes a long way toward establishing the sort of outcomes that might settle it. For instance, if I define our salary disagreement as a zero-sum situation–that is, if you get the increase in pay you want, there will be just that amount less for me-I am going to be far less willing to compromise than if I frame the conflict as a potential win-win situation (i.e., the dollars in the salary pool might be increased so that both of us could get the added pay we want). So the definition of a conflict is important because it typically delineates the set of possible settlements. Our second point is that emotions play a major role in shaping perceptions. For example, negative emotions have been found to produce oversimplification of issues, reductions in trust, and negative interpretations of the other party’s behavior. In contrast, positive feelings have been found to increase the tendency to see potential relationships among the elements of a problem, to take a broader view of the situation, and to develop more innovative solutions.14
Conflict Negotiation Study Material
Stage III: Intentions
Intentions intervene between people’s perceptions and emotions and their overt behavior. These intentions are decisions to act in a given way.15
Why are intentions separated out as a distinct stage? You have to infer the other’s intent in order to know how to respond to that other’s behavior. A lot of conflicts are escalated merely by one party attributing the wrong intentions to the other party. In addition, there is typically a great deal of slip page between intentions and behavior, so behavior does not always accurately reflect a person intentions.
Exhibit 14-2 represents one author’s effort to identify the primary conflict-handling intentions, Using two dimensions-cooperativeness (the degree to which one party attempts to satisfy the other party’s concerns) and assertiveness (the degree to which one party attempts to satisfy his or her own concerns)–five conflict-handling intentions can be identified: competing (assertive and uncooperative tive), collaborating assertive and cooperative), avoiding (unassertive and uncooperative). accommodating (unassertive and cooperative), and compromising (midrange on both assertiveness and cooperativeness). 16
Competing when one person seeks to satisfy his or her own interests, regardless of the impact on the other parties to the conflict, he or she is competing. Examples include intending to achieve your goal at the sacrifice of the other’s goal, attempting to convince another that your conclusion is correct and that his or hers is mistaken, and trying to make someone else accept blame for a problem.
Collaborating When the parties to conflict each desire to fully satisfy the concerns of all parties, we have cooperation and the search for a mutually beneficial outcome. In collaborating, the intention of the parties is to solve the problem by clarifying differences rather than by accommodating various points of view. Examples include attempting to find a win-win solution that allows both parties’ goals to be completely achieved and seeking a conclusion that incorporates the valid insights of both parties.
Avoiding A person may recognize that a conflict exists and want to withdraw from it or suppress it. Examples of avoiding include trying to just ignore a conflict and avoiding people with whom you disagree.
Accommodating when one party seeks to appease an opponent, that party may be willing to place the opponent’s interests above his or her own. In other words, in order for the relationship to be maintained, one party is willing to be self-sacrificing. We refer to this intention as accommodating. Examples are a willingness to sacrifice your goal so that the other party’s goal can be attained, supporting someone else’s opinion despite your reservations about it, and forgiving someone for an infraction and allowing subsequent ones.
Compromising When each party to the conflict seeks to give up something, sharing occurs, resulting in a compromised outcome. In compromising, there is no clear winner or loser. Rather, there is a willingness to ration the object of the conflict and accept a solution that provides incomplete satisfaction of both party’s concerns. The distinguishing characteristic of compromising, therefore, is that each party intends to give up something. Examples might be a willingness to accept a raise of Rs 20 an hour rather than Rs 30, to acknowledge partial agreement with a specific viewpoint, and to take partial blame for an infraction.
Intentions provide general guidelines for parties in a conflict situation. They define each party’s purpose. Yet, people’s intentions are not fixed. During the course of a conflict, they might change because of reconceptualization or because of an emotional reaction to the behavior of the other party. However, research indicates that people have an underlying disposition to handle conflicts in certain ways.17 Specifically, individuals have preferences among the five conflict-handling intentions just described; these preferences tend to be relied on quite consistently, and a person’s intentions can be predicted rather well from a combination of intellectual and personality characteristics. So it may be more appropriate to view the five conflict-handling intentions as relatively fixed rather than as a set of options from which individuals choose to fit an appropriate situation. That is, when confronting a conflict situation, some people want to win it all at any cost, some want to find an optimal solution, some want to run away, others want to be obliging, and still others want to “split the difference.”
A study indicated that matters relating to the technical and operative aspects of the job emerged, as important issues of superior-subordinate conflict whereas individual differences between managers were viewed as the significant sources of such conflicts. In general, it was observed that a manager’s conflict resolution behavior was characterized by an immense utilization of problem-solving, smoothing and compromising modes together with the relative absence of withdrawing and forcing behaviors.18
Conflict Negotiation Study Material
Stage IV: Behavior
When most people think of conflict situations, they tend to focus on Stage IV. Why? Because this is where conflicts become visible. The behavior stage includes the statements, actions, and reactions made by the conflicting parties.
These conflict behaviors are usually overt attempts to implement each party’s intentions. But these behaviors have a stimulus quality that is separate from intentions. As a result of miscalculations or unskilled enactments, overt behaviors sometimes deviate from original intentions. 19
It helps to think of Stage IV as a dynamic process of interaction. For example, you make a demand on me; I respond by arguing, you threaten me; I threaten you back, and so on. Exhibit 14-3 provides a way of visualizing conflict behavior. All conflicts exist somewhere along this continuum. At the lower part of the continuum, we have conflicts characterized by subtle, indirect, and highly controlled forms of tension. An illustration might be a student questioning in class a point the instructor has just made. Conflict intensities escalate as they move upward along the continuum until they become highly destructive. Strikes, riots, and wars clearly fall in this upper range. For the most part, you should assume that conflicts that reach the upper ranges of the continuum are almost always dysfunctional. Functional conflicts are typically confined to the lower range of the continuum.
If a conflict is dysfunctional, what can the parties do to de-escalate it? Or, conversely, what options exist if conflict is too low and needs to be increased? This brings us to conflict-management techniques. Exhibit 14-4 lists the major resolution and stimulation techniques that allow managers to control conflict levels. Note that several of the resolution techniques were described earlier as conflict-handling intentions. This, of course, shouldn’t be surprising. Under ideal conditions, a person’s intentions should translate into comparable behaviors.
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Stage V: Outcomes
The action-reaction interplay between the conflicting parties results in consequences. As our model (see Exhibit 14-1) demonstrates, these outcomes may be functional in that the conflict results in an improvement in the group’s performance, or dysfunctional in that it hinders group performance.
Functional Outcomes How might conflict act as a force to increase group performance? It is hard to visualize a situation in which open or violent aggression could be functional. But there are a number of instances in which it’s possible to envision how low or moderate levels of conflict could improve the effectiveness of a group. Because people often find it difficult to think of instances in which conflict can be constructive, let’s consider some examples and then review the research evidence. Note how all these examples focus on task and process conflicts, and exclude the relationship variety
Conflict is constructive when it improves the quality of decisions, stimulates creativity and innovation, encourages interest and curiosity among group members, provides the medium through which problems can be aired and tensions released, and fosters an environment of self-evaluation and change. The evidence suggests that conflict can improve the quality of decision making by allowing all points, particularly the ones that are unusual or held by a minority, to be weighed in important decisions 20 Conflict is an antidote for groupthink. It doesn’t allow the group to passively “rubber stamp” decisions that may be based on weak assumptions, inadequate consideration of relevant alternatives, or other debilities. Conflict challenges the status quo and therefore furthers the new faces, promotes reassessment of group goals and activities, and increases the probability that the group will respond to change.
For an example of a company that suffered because it had too little functional conflict, you don have to look further than automobile behemoth General Motors, 21 Many of GM’s problems, from the late 1960s to the late 1990s, can be traced to a lack of functional conflict. It hired and promoted individuals who were “yes-men,” loyal to GM to the point of never questioning company actions Managers were, for the most part, homogeneous: conservative white males raised in the Midwestern United States who resisted change-they preferred looking back to past successes rather than for ward to new challenges. They were almost sanctimonious in their belief that what had worked in the past would continue to work in the future. Moreover, by sheltering executives in the companys Detroit offices and encouraging them to socialize with others inside the GM ranks, the company further insulated managers from conflicting perspectives.
More recently, Yahool provides an illustration of a company that suffered because of too little functional conflict. Begun in 1994, by 1999 Yahoo! had become one of the best-known brand names on the Internet. Then the implosion of dot.com stocks hit. By the spring of 2001. Yahoo!’s advertising sales were plunging and the company’s stock was down 92 percent from its peak. It was at this point that Yahoo!’s most critical problem became exposed: the company was too insulated and void of functional conflict. It couldn’t respond to change. Managers and staff were too comfortable with each other to challenge the status quo. This kept new ideas from percolating upward and held dissent to a minimum. The source of the problem was the company’s CEO, Tim Google. He set the tone of no confrontation. Only when Koogle was replaced in 2001 with a new CEO who openly challenged the company’s conflict-free climate, did Yahoo begin to successfully solve its problems.
Research studies in diverse settings confirm the functionality of conflict. Consider the following findings
The comparison of six major decisions made during the administration of four different U.S. presidents found that conflict reduced the chance that groupthink would overpower policy decisions. The comparisons demonstrated that conformity among presidential advisors was related to poor decisions, whereas an atmosphere of constructive conflict and critical thinking surrounded the well-developed decisions.23
There is evidence indicating that conflict can also be positively related to productivity. For instance, it was demonstrated that, among established groups, performance tended to improve more when there was conflict among members than when there was fairly close agreement. The investigators observed that when groups analyzed decisions that had been made by the individual members of that group, the average improvement among the mig conflict groups was 73 percent greater than was that of those groups characterized by low-conflict conditions. Others have found similar results: Groups composed of members with different interests tend to produce higher quality solutions to a variety of problems than do homogeneous groups.25
The preceding leads us to predict that the increasing cultural diversity of the workforce should provide benefits to organizations. And that’s what the evidence indicates. Research demonstrates that heterogeneity among group and organization members can increase creativity, improve the quality of decisions, and facilitate change by enhancing member flexibility. For example, researchers compared decision-making groups composed of all-Anglo individuals with groups that also contained members from Asian, Hispanic, and black ethnic groups. The ethnically diverse groups produced more effective and more feasible ideas and the unique ideas they generated tended to be of higher quality than the unique ideas produced by the all-Anglo group
Similarly, studies of professional-systems analysts and research and development scientists support the constructive value of conflict. An investigation of 22 teams of systems analysts found that the more incompatible groups were likely to be more productive. Research and development scientists have been found to be most productive when there is a certain amount of intellectual conflict.
Creating Functional Conflict We briefly mentioned conflict stimulation as part of Stage IV of the conflict process. In this section we ask: If managers accept the interactionist view toward conflict. what can they do to encourage functional conflict in their organizations?
There seems to be general agreement that creating functional conflict is a tough job, particularly in large American corporations. As one consultant put it. “A high proportion of people who get to the top are conflict avoiders. They don’t like hearing negatives, they don’t like saying or thinking negative things. They frequently make it up the ladder in part because they don’t irritate people on the way up.” Another suggests that at least seven out of ten people in American business hush up when their opinions are at odds with those of their superiors, allowing bosses to make mistakes even when they know better.
Such ant conflict cultures may have been tolerable in the past but not in today’s fiercely competitive global economy. Organizations that don’t encourage and support dissent may find their survival threatened. Let’s look at some approaches organizations are using to encourage their people to challenge the system and develop fresh ideas.
The Walt Disney Company purposely encourages big, unruly, and disruptive meetings to create friction and stimulate creative ideas. Hewlett-Packard rewards dissenters by recognizing go-against the-grain types, or people who stay with the ideas they believe in even when those ideas are rejected by management. Herman Miller Inc., an office furniture manufacturer, has a formal system in which employees evaluate and criticize their bosses. IBM also has a formal system that encourages dissension. Employees can question their boss with impunity. If the disagreement can’t be resolved, the system provides a third party for counsel.
Royal Dutch Shell Group, General Electric, and Anheuser Busch build devil’s advocates into the decision process. For instance, when the policy committee at Anheuser-Busch considers a major move, such as getting into or out of a business or making a major capital expenditure, it often assigns teams to make the case for each side of the question. This process frequently results in decisions and alternatives that hadn’t been considered previously.
One common ingredient in organizations that successfully create functional conflict is that they reward dissent and punish conflict avoiders. The real challenge for managers, however, is when they hear news that they don’t want to hear. The news may make their blood boil or their hopes collapse, but they can’t show it. They have to learn to take the bad news without flinching! No tirades, no tight-lipped sarcasm, no eyes rolling upward, no gritting of teeth. Rather, managers should ask calm, even-tempered questions: “Can you tell me more about what happened?” “What do you think we ought to do?” A sincere “Thank you for bringing this to my attention” will probably reduce the likelihood that managers will be cut off from similar communications in the future.
Conflict Negotiation Study Material
Negotiation
Negotiation permeates the interactions of almost everyone in groups and organizations. There’s the obvious: Labor bargains with management. There’s the not so obvious: Managers negotiate with employees, peers, and bosses; salespeople negotiate with customers, purchasing agents negotiate with suppliers. And there’s the subtle: A worker agrees to answer a colleague’s phone for a few minutes in exchange for some past or future benefit. In today’s team-based organizations, in which members are increasingly finding themselves having to work with colleagues over whom they have no direct authority and with whom they may not even share a common boss, negotiation skills become critical
We’ll define negotiation as a process in which two or more parties exchange goods or services and attempt to agree on the exchange rate for them. Note that we’ll use the negotiation and bargaining of the terms interchangeably.
In this section, we’ll contrast two bargaining strategies, provide a model of the negotiation process, ascertain the role of personality traits on bargaining, review gender and cultural differences in negotiation, and take a brief look at third-party negotiations.
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Bargaining Strategies
There are two general approaches to negotiation-distributive bargaining and integrative bargaining, These are compared in Exhibit 14-5.
Distributive Bargaining You see a used car advertised for sale in the newspaper. It appears to be just what you’ve been looking for. You go out to see the car. It’s great and you want it. The owner tells you the asking price. You don’t want to pay that much. The two of you then negotiate over the price. The negotiating strategy you’re engaging in is called distributive bargaining. Its most identifying feature is that it operates under zero-sum conditions. That is, any gain I make is at your expense, and vice versa. Referring back to the used-car example, every dollar you can get the seller to cut from the car’s price is a dollar you save. Conversely, every dollar more the seller can get from you comes at your expense. So the essence of distributive bargaining is negotiating over who gets what share of a fixed pie.
Probably the most widely cited example of distributive bargaining is in labor-management negotiations over wages. Typically, labor’s representatives come to the bargaining table determined to get as much money as possible out of management. Since every cent more that labor negotiates increases management’s costs, each party bargains aggressively and treats the other as an opponent who must be defeated.
The essence of distributive bargaining is depicted in Exhibit 14-6. Parties A and B represent two negotiators. Each has a target point that defines what he or she would like to achieve. Each also has a resistance point, which marks the lowest outcome that is acceptable–the point below which they would break off negotiations rather than accept a less favorable settlement. The area between these two points makes up each one’s aspiration range. As long as there is some overlap between A and BS aspiration ranges, there exists a settlement range in which each one’s aspirations can be met.
When engaged in distributive bargaining, one’s tactics focus on trying to get one’s opponent to agree to one’s specific target point or to get as close to it as possible. Examples of such tactics are persuading your opponent of the impossibility of getting to his or her target point and the advisability of accepting a settlement near yours; arguing that your target is fair, while your opponents isn’t; and attempting to get your opponent to feel emotionally generous toward you and thus accept an outcome close to your target point.
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Integrative Bargaining A sales representative for a women’s sportswear manufacturer has just closed a Rs 50 lacs order from a small clothing retailer. The sales rep calls in the order to her firm’s credit department. She is told that the firm can’t approve credit to this customer because of a past slow payment record. The next day, the sales rep and the firm’s credit manager meet to discuss the problem. The sales rep doesn’t want to lose the business. Neither does the credit manager, but he also doesn’t want to get stuck with an uncollectible debt. The two openly review their options. After considerable discussion, they agree on a solution that meets both their needs: The credit manager will approve the sale, but the clothing store’s owner will provide a bank guarantee that will ensure payment if the bill isn’t paid within 60 days.
This sales-credit negotiation is an example of integrative bargaining. In contrast to distributive bargaining, integrative problem solving operates under the assumption that there exists one or more settlements that can create a win-win solution.
In terms of intraorganizational behavior, all things being equal, integrative bargaining is preferable to distributive bargaining. Why? Because the former builds long-term relationships and facilitates working together in the future. It bonds negotiators and allows each to leave the bargaining table feeling that he or she has achieved a victory. Distributive bargaining on the other hand, leaves one party a loser. It tends to build animosities and deepen divisions when people have to work together on an ongoing basis.
What do you want from the negotiation? What are your goals? If you’re a supply manager at Dell, for instance, and your goal is to get a significant cost reduction from your supplier of keyboards, make sure that this goal stays paramount in your discussions and doesn’t get overshadowed by other issues. It often helps to put your goals in writing and develop a range of outcomes from “most hopeful to “minimally acceptable”—to keep your attention focused. You also want to prepare an assessment of what you think the other party to your negotiation’s goals are. What are they likely to ask for? How entrenched are they likely to be in their position? What intangible or hidden interests may be important to them? What might they be willing to settle on? When you can anticipate your opponent’s position, you are better equipped to counter his or her arguments with the facts and figures that support your position.
The importance of sizing up the other party is illustrated by the experience of Keith Rosenbaum, a partner in a major Los Angeles law firm. “Once when we were negotiating to buy a business, we found that the owner was going through a nasty divorce. We were on good terms with the wife’s attorney and we learned the seller’s net worth. California is a community-property-law state, so we knew he had to pay her half of everything. We knew his time frame. We knew what he was will ing to part with and what he was not. We knew a lot more about him than he would have wanted us to know. We were able to twist him a little bit, and get a better price.”36
Once you’ve gathered your information, use it to develop a strategy. For example, expert chess players have a strategy. They know ahead of time how they will respond to any given situation. As part of your strategy, you should determine yours and the other side’s Best Alternative To a Negotiated Agreement (BATNA):57 Your BATNA determines the lowest value acceptable to you for a negotiated agreement. Any offer you receive that is higher than your BATNA is better than an impasse. Con versely, you shouldn’t expect success in your negotiation effort unless you’re able to make the other side an offer they find more attractive than their BATNA. If you go into your negotiation having a good idea of what the other party’s BATNA is, even if you’re not able to meet theirs, you might be able to get them to change it.
Definition of Ground Rules Once you’ve done your planning and developed a strategy. you’re ready to begin defining the ground rules and procedures with the other party over the negotiation itself. Who will do the negotiating? Where will it take place? What time constraints, if any, will apply To what issues will negotiation be limited? Will there be a specific procedure to follow if an impasse is reached? During this phase, the parties will also exchange their initial proposals or demands Clarification and Justification When initial positions have been exchanged, both you and the other party will explain, amplify, clarify, bolster, and justify your original demands. This needn’t be confrontational. Rather, it’s an opportunity for educating and informing each other on the issues, why they are important, and how each arrived at their initial demands. This is the point at which you might want to provide the other party with any documentation that helps the essence of the negotiation process is the support your position. actual give and take in trying to hash out a Bargaining and Problem Solving The essence of the negotiation process agreement is the actual give and take in trying to hash out an agreement. It is here where concessions will undoubtedly need to be made by both parties.
Closure and Implementation The final step in the negotiation process is formalizing the agreement that has been worked out and developing procedures that are necessary for implementation and monitoring. For major negotiations which would include everything from labor-management negotiations to bargaining over lease terms to buying a piece of real estate to negotiating a job offer for a senior management position-this will require hammering out the specifics in a formal contract. For most cases, however, closure of the negotiation process is nothing more formal than a handshake.
Issues in Negotiation
We conclude our discussion of negotiation by reviewing four contemporary issues in negotiation: the role of personality traits, gender differences in negotiating, the effect of cultural differences on negotiating styles, and the use of third parties to help resolve differences. The Role of Personality Traits in Negotiation Can you predict an opponent’s negotiating tactics if you know something about his or her personality? It’s tempting to answer Yes to this question. For instance, you might assume that high-risk-takers would be more aggressive bargainers who make fewer concessions. Surprisingly, the evidence doesn’t support this intuition.38
Conflict Negotiation Study Material
Overall assessments of the personality-negotiation relationship find that personality traits have no significant direct effect on either the bargaining process or the negotiation outcomes. This conclusion is important. It suggests that you should concentrate on the issues and the situational factors in each bargaining episode and not on your opponent’s personality
Gender Differences in Negotiations Domen and women negotiate differently? And does gender affect negotiation outcomes? The answer to the first question appears to be No. The answer to the second is a qualified Yes. 40
A popular stereotype held by many is that women are more cooperative and pleasant in negotiations than are men. The evidence doesn’t support this belief. However, men have been found to negotiate better outcomes than women, although the difference is quite small. It’s been postulated that this difference might be due to men and women placing divergent values on outcomes. “It is possible that a few hundred dollars more in salary or the corner office is less important to women than forming and maintaining an interpersonal relationship.”
The belief that women are “nicer than men in negotiations is probably due to confusing gender and the lack of power typically held by women in most large organizations. The research indicates that low-power managers, regardless of gender, attempt to placate their opponents and to use softly persuasive tactics rather than direct confrontation and threats. In situations in which women and men have similar power bases, there shouldn’t be any significant differences in their negotiation styles.
The evidence suggests that women’s attitudes toward negotiation and toward themselves as negotiators appear to be quite different from men’s. Managerial women demonstrate less confidence in anticipation of negotiating and are less satisfied with their performance after the process is complete, even when their performance and the outcomes they achieve are similar to those for men.
This latter conclusion suggests that women may unduly penalize themselves by failing to engage in negotiations when such action would be in their best interests,
Cultural Differences in Negotiations Although there appears to be no significant direct relationship between an individual’s personality and negotiation style, the cultural background does seem to be relevant. Negotiating styles clearly vary across national cultures.
The French like conflict. They frequently gain recognition and develop their reputations by thinking and acting against others. As a result, the French tend to take a long time in negotiating agreements, and they aren’t overly concerned about whether their opponents like or dislike them. The Chinese also draw out negotiations, but that’s because they believe negotiations never end. Just when you think you’ve pinned down every detail and reached a final solution with a Chinese executive, that executive might smile and start the process all over again. Like the Japanese, the Chinese negotiate to develop a relationship and a commitment to work together rather than to tie up every loose end.” Americans are known around the world for their impatience and their desire to be liked. Astute negotiators from other countries often turn these characteristics to their advantage by dragging out negotiations and making friendship conditional on the final settlement. Exhibit 148 offers some insights into why American managers might have trouble in cross-cultural negotiations
The cultural context of the negotiation significantly influences the amount and type of preparation for bargaining, the relative emphasis on task versus inter-personal relationships, the tactics used, and even where the negotiation should be conducted. To further illustrate some of these differences, let’s look at two studies that compare the influence of culture on business negotiations.
The first study compared North Americans, Arabs, and Russians. 16 Among the factors that were looked at were their negotiating style, how they responded to an opponent’s arguments, their approach to making concessions, and how they handled negotiating deadlines North Americans tried to persuade by relying on facts and appealing to logic. They countered opponents’ arguments with objective facts. They made small concessions early in the negotiation to establish a relationship and usually reciprocated the opponent’s concessions. North Americans treated deadlines as
any reciprocated opponent’s concessions. North A very important. The Arabs tried to persuade by appealing to emotion. They countered the opponent’s arguments with subjective feelings. They made concessions throughout the bargaining process and almost always reciprocated opponents’ concessions. Arabs approached deadlines very casually. The Russians based their arguments on asserted ideals. They made few, if any, concessions. Any concession offered by an opponent was viewed as a weakness and almost never reciprocated. Finally, the Russians tended to ignore deadlines.
The second study looked at verbal and nonverbal negotiation tactics exhibited by North Ameri cans, Japanese, and Brazilians during half-hour bargaining sessions. Some of the differences were particularly interesting. For instance, the Brazilians on average said “No” 83 times, compared to times for the Japanese and 9 for the North Americans. The Japanese displayed more than 5 periods of silence lasting longer than 10 seconds during the 30-minute sessions. North Americans averaged 3.5 such periods; the Brazilians had none. The Japanese and North Americans interrupted their opponent about the same number of times, but the Brazilians interrupted 2.5 to 3 times more often than the North Americans and the Japanese. Finally, while the Japanese and the North Americans had no physical contact with their opponents during negotiations except for handshaking, the Brazilians touched each other almost five times every half-hour.
Conflict Negotiation Study Material
Third-Party Negotiations To this point, we’ve discussed bargaining in terms of direct negotiations. Occasionally, however, individuals or group representatives reach a stalemate and are unable to resolve their differences through direct negotiations. In such cases, they may turn to a third party to help them find a solution. There are four basic third-party roles: mediator, arbitrator, conciliator. and consultants
A mediator is a neutral third party who facilitates a negotiated solution by using reasoning and persuasion, suggesting alternatives, and the like. Mediators are widely used in labor-management negotiations and in civil court disputes.
The overall effectiveness of mediated negotiations is fairly impressive. The settlement rate is approximately 60 percent, with negotiator satisfaction at about 75 percent. But the situation is the key to whether or not mediation will succeed; the conflicting parties must be motivated to bargain and resolve their conflict. In addition, conflict intensity can’t be too high; mediation is most effective under moderate levels of conflict. Finally, perceptions of the mediator are important; to be effective, the mediator must be perceived as neutral and noncoercive.
An arbitrator is a third party with the authority to dictate an agreement. Arbitration can be voluntary requested) or compulsory (forced on the parties by law or contract).
The authority of the arbitrator varies according to the rules set by the negotiators. For instance, the arbitrator might be limited to choosing one of the negotiator’s last offers or to suggesting an agreement point that is nonbinding, or free to choose and make any judgment he or she wishes.
The big plus of arbitration over mediation is that it always results in a settlement. Whether or not there is a negative side depends on how “heavy-handed” the arbitrator appears. If one party is left feeling overwhelmingly defeated, that party is certain to be dissatisfied and unlikely to graciously accept the arbitrator’s decision. Therefore, the conflict may resurface at a later time.
A conciliator is a trusted third party who provides an informal communication link between the negotiator and the opponent. This role was made famous by Robert Duval in the first Godfather film As Don Corleone’s adopted son and a lawyer by training, Duval acted as an intermediary between the Corleone family and the other Mafioso families.
Conciliation is used extensively in international, labor, family, and community disputes. Comparing its effectiveness to mediation has proven difficult because the two overlap a great deal. In practice, conciliators typically act as more than mere communication conduits. They also engage in fact finding, interpreting messages, and persuading disputants to develop agreements.
A consultant is a skilled and impartial third party who attempts to facilitate problem-solving through communication and analysis, aided by his or her knowledge of conflict management In contrast to the previous roles, the consultant’s role is not to settle the issues but, rather, to improve relations between the conflicting parties so that they can reach a settlement themselves. Instead of putting forward specific solutions, the consultant tries to help the parties learn to understand and work with each other. Therefore, this approach has a longer-term focus: to build new and positive perceptions and attitudes between the conflicting parties.
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Summary and Implications for Managers
Many people automatically assume that conflict is related to lower group and organizational performance. This chapter has demonstrated that this assumption is frequently incorrect. Conflict can be either constructive or destructive to the functioning of a group or unit. As shown in Exhibit 14-9, levels of conflict can be either too high or too low. Either extreme hinders performance. An optimal level is one at which there is enough conflict to prevent stagnation, stimulate creativity, allow tensions to be released, and initiate the seeds for change, yet not so much as to be disruptive or to deter coordination of activities.
Inadequate or excessive levels of conflict can hinder the effectiveness of a group or an organization, resulting in reduced satisfaction of group members, increased absence and turnover rates and eventually, lower productivity. On the other hand, when conflict is at an optimal level, complacency and apathy should be minimized, motivation should be enhanced through the creation of a challenging and questioning environment with a vitality that makes work interesting, and there should be the amount of turnover needed to rid the organization of misfits and poor performers.
What advice can we give managers faced with excessive conflict and the need to reduce it? Don’t assume there’s one conflict-handling intention that will always be best! You should select an intention appropriate for the situation. The following provides some guidelines: 19
Use competition when quick, decisive action is vital (in emergencies): on important issues, for which unpopular actions need implementing (in cost-cutting, enforcing unpopular rules, discipline): on issues vital to the organization’s welfare when you know you’re right; and against people who take advantage of non-competitive behavior.
Use collaboration to find an integrative solution when both sets of concerns are too important to be compromised; when your objective is to learn to merge insights from people with different perspectives: to gain commitment by incorporating concerns into a consensus and to work through feelings that have interfered with a relationship.
Use avoidance when an issue is trivial, or more important issues are pressing when you perceive no chance of satisfying your concerns; when potential disruption outweighs the benefits of resolution: to let people cool down and regain perspective; when gathering information supersedes an
