BUS 610 Organizational Behavior/week 3 discussion 1 and 2
Chapter Seven Negotiation and Conflict Christopher Robbins/Thinkstock Learning Objectives After reading this chapter and studying the materials, you should be able to:
• Recognize the forms of negotiation, including distributive and integrative situations. • Carry out the stages of negotiation in a constructive manner. • Explain the nature of conflict. • Utilize various methods to resolve conflicts. baa66968_07_c07_187-214.indd 187 6/17/13 11:57 AM Section 7.1 The Nature of Negotiations and Bargaining Processes 7.1 The Nature of Negotiations and Bargaining Processes This chapter analyzes the steps and processes involved in negotiation, conflict, and conflict resolution.
These subjects share many key elements. Remember, however, that instances occur in which negotiation takes place without the presence of conflict, particularly when two sides pursue a mutually benefi\ cial relationship, such as when a manufacturer ’s sales team negotiates a cooperative advertising or market- ing agreement with a retail chain. In other circumstances, negotiation may be used to resolve a conflict.
Conversely, conflicts may be resolved with or without the use of negotiation processes, such as when litigation takes place and the matter is resolved or adjudicated by the court system.
In that context, negotiation may be defined as a give-and-take decision-making process involving inter - dependent parties with differing objectives or outcome preferences (Bazerman & Neale, 1992). Two per - spectives exist regarding the terms “negotiation” and “bargaining.” Some sources identify them as being the same (Robbins, 2005, p. 434; Wall, 1985). Others take a slightly different view, suggesting that nego - tiation refers to a win-win situation in which the ultimate objective is to find \ solutions that are mutually acceptable to all parties to a complex conflict. Bargaining, in that context, represents a competitive “win- lose” circumstance in which each party seeks to obtain the best possible outcome \ for their side (Lewicki, Barry, & Saunders, 2010, p. 3). In this chapter the two terms will be used i\ nterchangeably.
Two types of negotiations take place in employment settings: distributive\ negotiations and integrative negotiations (Walton & McKersie, 1965). Distributive negotiations involve a single issue and a zero-sum game in which one side’s gains become the other side’s losses (wi\ n-lose). A furniture manufacturer nego - tiating the price of fabric used to cover sofas serves as an example. Every dollar that the manufacturer has to pay for the raw material represents a dollar of revenue to the fabric supplier. In the terminology noted above, distributive negotiations are bargaining processes.
The second circumstance, an integrative negotiation, resembles a problem-solving agenda in which both sides try to obtain a settlement that benefits both—a win-win solutio\ n. Integrative bargaining, in other words, is similar to a “negotiation” as defined above. Integrative solutions are unlikely, unless the two sides can establish a mutual goal.
Table 7.1 identifies three types of negotiations that take place in the business community. The categories include negotiations between an individual and a company, between two companies, and between a company and an outside agency or organization. Both distributive and integrative negotiations take place in those areas.
Table 7.1: Types of negotiations Between Individual and Company Between Two CompaniesBetween Company and Outside Group Employment Contract SalesUnions Wages PartnershipsGovernment Benefits Special Interest Learning Objective #1:
What forms of negotiation take place in organizations? baa66968_07_c07_187-214.indd 188 6/17/13 11:57 AM CHAPTER 7 Section 7.1 The Nature of Negotiations and Bargaining Processes Preconditions to Negotiation Prior to any negotiation process, careful deliberation should be given to whether negotiating represents the best option. Preconditions for bargaining involve ensuring that several circumstances exist. Three areas to consider are the psychological climate, the availability of resources, and the characteristics of the bargaining issue. OB in Action Negotiation and the NFL In 2011, the National Football League’s owners negotiated a collective bargaining agreement with the players and their union in which both sides benefited in certain ways. The mutual goal was to continue playing football without a disruption to the upcoming season. Reaching an agreement took time and several major twists and turns. Michael Silver, who summarized the process for Yahoo Sports (Silver, 2011), commented that the process began when NFL team owners voted to discontinue the previous collective bargaining agreement. That contract granted players 57% of reve - nues from league activities. The owners wanted a larger portion of revenues to offset additional new costs, such as building and renovating various stadiums. As bargaining chips, the owners sought to extend the football season from 16 to 18 games. They also proposed capping salaries for rookie players, creating a testing program for human growth hormone, and implementing additional player safety programs. Player safety was one agreed-upon area during the negotiation process; however, the players argued that extending the season by two games would create additional injuries, noting especially the fatigue factor at the end of the season. The players also resisted attempts to lower salaries. As part of the process, the players decertified the union, so that it was no longer the legally recognized bargaining agent for them and used this as a bargaining tactic. This action allowed the government to consider antitrust lawsuits against the league. The owners locked the players out, thereby stopping payments for wages. A series of new, current, and for - mer players all entered the negotiations. Eventually, the former players filed a separate lawsuit, claiming that, without a union, current players could not negotiate on their behalf concerning pension issues. A U.S. circuit court judge then ruled that the lockout should end. Most teams allowed players to enter the front office but not to practice or enter the locker room. NFL Commissioner Roger Goodell stated that the league would not use replacement players, as had been tried in a previous negotiation. As the deadline to delay or halt the season came near, the annual Hall of Fame game was canceled. Then the impasse broke and an agreement was reached. A series of new game rules were included that were intended to create safer conditions. Revenues were distributed in a manner acceptable to the owners, players, and former players. While preseason practices were limited, the actual season began on time. The 16-game schedule continued as part of the agreement.
Questions for Students 1. Can you name all of the parties and stakeholders in this negotiation? 2. How did governmental intervention affect this negotiation in a unique way? 3. What type of resolution resulted from this negotiation: win-win, win-lose, or a compromise? LM Otero/Associated Press In 2011, NFL Commissioner Roger Goodell entered into negotiations with team owners and the NFL Players Association to finalize a collective bargaining agreement. baa66968_07_c07_187-214.indd 189 6/17/13 11:57 AM CHAPTER 7 Section 7.1 The Nature of Negotiations and Bargaining Processes The Psychological Climate Negotiation can only take place when the parties involved exhibit certai\ n mental characteristics. When the proper frame of mind does not emerge, negotiations become more likely to fail. The most important psychological elements are (Moore, 2011): • willingness to participate in negotiations • readiness to negotiate • agreement on some issues • willingness to settle • sense of urgency The willingness to participate begins with the ability to identify key parties to a negotiation. Manag- ers should be aware of who the various stakeholders are prior to any bargaining process. In the case of negotiations with outside agencies, for example, it may be possible that\ a company will seek to reach an agreement with a union while at the same time remaining aware of governmental constraints, such as those related to bargaining in good faith, equal opportunity legislation, and antitrust laws.
A stakeholder is a person or group with a vested interest in the outcome of a negotiation. These individu - als should tangibly demonstrate their readiness to be seated at the bargaining table. If a stakeholder group is absent or unwilling to commit to good-faith bargaining, the potential to find a viable solution is reduced.
An individual or group conveys the readiness to negotiate through a commitment to conduct the needed investigation prior to any first meeting. The stakeholder should have adequate time to prepare a nego- tiation strategy. Before beginning any actual negotiation, all sides should be able to say, “We’re ready.” Negotiation will not be possible unless some agreement on issues and interests can be identified. Although various issues may be of concern to only one party, negotiation becomes less of an option unless some mutual interests are found. For example, a union should be able to agree with company leaders that ensuring working safety is in the interest of both sides. The parties should be able to commit to a joint decision-making process based on these agreements (Kolb & Williams, 2003).
Negotiations succeed when participants are willing to settle. When continuing a conflict becomes more important than settling, negotiations tend to fail. Consequently, for an agreement to be reached, the nega - tive consequences of failing to find an agreement must be more significant than the negative consequences of keeping the conflict going. Also, when one side expresses or holds unexpressed negative animosity toward another party, it can sharply affect psychological readiness to bargain. These barriers must be lowered so that participants will become more willing to settle.
Finally, time frames also influence the psychological climate surrounding potential negotiations. When no deadline, pressure, or urgency to reach an agreement appears, negotiations are less likely to proceed. A sense of urgency may be imposed either by external or internal time constraints or by potential negative or positive con - sequences to a negotiation outcome, such as a court date or the time when an existing sales or union contract is set to expire. A side that can afford to procrastinate has an advantage in a negotiation in which the other side expe - riences a sense of urgency. Tony May/Stone/Getty Images Unexpressed negative emotions toward another party can prevent an agreement from being reached. baa66968_07_c07_187-214.indd 190 6/17/13 11:58 AM CHAPTER 7 Section 7.1 The Nature of Negotiations and Bargaining Processes The Availability of Resources In order for a negotiation to take place, resources must be present, such as sufficient time and money to fully engage in a dialogue. In the NFL situation noted earlier, time was the key resource. If the two sides had not been able to agree to a settlement prior to the start of the season, the entire negotia- tion would have been threatened. An additional bargaining resource includes the bargaining skills of key negotiators. In general, when one side’s resources are inadequate or unequal to the other side’s resources, the first side’s bargaining position may be weakened to the point at which negotiations become difficult to conduct.
The resources held by a group in a negotiation include a “means of influence” form of levera\ ge. Classic views of power suggest that influence is based on legitimate, reward-based, coercive, expertise-oriented, and charismatic means (French & Raven, 1959), as displayed in Table 7.2. Often, the tendency may be to think first about the use of coercion to achieve bargaining objectives; however, persuasion may also result from using the other methods.
Table 7.2: Means of influence in negotiation Type of Influence Description Legitimate Results from a negotiator’s superior position based on any of the following: • a governmental dictate • ownership of a patent or similar protection • contractual advantage from a previous negotiation Reward based Based on the ability to promise rewards such as access to additional business partners/ customers or the potential that a basis will be established for future agreements Coercion Based on the ability to deliver negative consequences such as: • loss of revenues • loss of supplies • damaged relations with customers • damaged relations with governmental organizations Expertise Based on influence achieved through presentation of factual evidence and/or analysis by experts in the area or field Charisma Based on the use of personal persuasiveness, thought-provoking questions, and discussion The Characteristics of the Bargaining Issue The bargaining issue, or the primary item to be negotiated, poses an impediment or creates the need to bargain. To reach the status of a viable bargaining issue, several factors should be in place: • interdependence • willingness to compromise • unpredictability of the outcome • negotiable issues • participants hold the authority to decide baa66968_07_c07_187-214.indd 191 6/17/13 11:58 AM CHAPTER 7 Section 7.1 The Nature of Negotiations and Bargaining Processes Interdependence. The high level of attachment or necessary interaction between the part\ ies results in interdependence. An employee bargaining for salary offers to exchange a skill or talent and the orga- nization, which needs that skill or talent, agrees to a level of compensation. The exchange creates the interdependence. Parties to a sale, such as the provider of a raw material and a manufacturer, should in some way rely on each other—that is, be interdependent—in order to have their needs met or interests satisfied. When one party to a bargaining arrangement finds it can satisfy its needs without the help or cooperation of the other, no real reason to negotiate exists.
Willingness to Compromise. Company leaders know that not all negotiations require compromise. Par - ties may reach an agreement that meets the needs of all participants without a concession from any party.
In many disputes, however, compromise may be necessary for the parties to reach an agreement. If one side determines that the other has “dug in” and no compromise will be possible, negotiation becomes a less viable option.
Unpredictability of the Outcome . Parties will also negotiate when the outcome of an issue cannot be predicted. For example, if one company knows that a lawsuit against anothe\ r company only has a 50% chance of success, the firm’s management team may decide that its best interests are served by negotiat- ing instead. The reason for the decision would be that by negotiating, the company would r\ eceive at least some of what it wants; on the other hand, if the parties pursue litigati\ on, a court order may completely favor the other side by imposing a judgment and damages against one of t\ he two parties. The same holds true when an individual considers suing another person or a company.
Negotiable Issues. For successful negotiation to occur, negotiators must believe that there are acceptable settlement options. Room for give and take must be present. When only win/lose settlement possibilities occur, the parties involved become more reluctant to enter into dialogue.
Participants Hold the Authority to Decide . In any negotiation, the participants involved must have the authority to make a decision. When they do not, or when a ratification p\ rocess has not been established, negotiations will normally be limited to an information exchange between the parties (Lewicki & Hiam, 2006, pp. 40–73). Additional Alternatives Prior to entering into a negotiation process, manag- ers should evaluate and select a guide for the process.
Among the venues available for a two-sided event, negotiation represents only one option. Other options include facilitation, mediation, arbitration, and the courts. These additional methods, which will be dis - cussed later in the chapter, should be investigated, espe - cially when it becomes clear that negotiation is not an option. Table 7.3 provides examples of times when such is the case. Comstock/Thinkstock Additional venues available for resolution of a two-party dispute include facilitation, mediation, arbitration, and the courts. baa66968_07_c07_187-214.indd 192 6/17/13 11:58 AM CHAPTER 7 Section 7.1 The Nature of Negotiations and Bargaining Processes Table 7.3: When negotiation is not an option Negotiation will not be an option when the other side has made unethical demands acts in bad faith Negotiation should not be an option if your side has not prepared would have an improved position by simply waiting does not have time to negotiate could lose everything has little or nothing to gain Sources: Lewicki, R. J., Barry, B., & Saunders, D. M. (2010). Negotiation (6th ed.). New York: McGraw-Hill, 7; Levinson, J. C., Smith, M. S. A., & Wilson, O. R.
(1999). Guerilla negotiating: Unconventional weapons and tactics to get what you\ want. New York: John Wiley & Sons, 22–23.
In summary, the give-and-take decision-making process of negotiation can seek the goals of winning at the expense of the other side in a distributive process, or can seek a settlement that assists both sides in an integrative negotiation. Prior to any negotiation, the persons or groups involved should assess the psychological climate, the availability of resources, and the characteristics of the bargaining issue, taking into account circumstances in which other dispute resolution options are more viable.
Comprehension Exercise 1. A negotiation that involves a single issue and a zero-sum game in which one side’s gains become the other side’s losses (win-lose) is a a. representative negotiation. b. distributive negotiation. c. integrative negotiation. d. selective negotiation. 2. A willingness to participate, readiness to negotiate, agreement on some issues, and a willingness to settle are all part of which negotiation precondition? a. the bargaining matrix b. the psychological climate c. the availability of resources d. the characteristics of the bargaining issue Answers: 1) b 2) b baa66968_07_c07_187-214.indd 193 6/17/13 11:58 AM CHAPTER 7 Section 7.2 The Stages of Negotiation 7.2 The Stages of Negotiation When the parties have determined that negotiation represents the best option for settling an issue, an individual or company begins the various stages of negotiation. Results \ can be achieved by careful man- agement of the entire process. At the most general level, negotiation consists of three overall stages: the initial, middle, and ending stages. Table 7.4 presents the various tasks that take place within this three- stage model of negotiation.
Table 7.4: The stages of negotiation Initial Stage Middle StageEnding Stage Prepare ArgueClose Open ExploreSustain Signal Package Sources: Encyclopedia of Business and Finance (2011). Negotiation. Retriev\ ed from http://www.enotes.com/business-finance-encyclopedia/negotiation ; ChangingMinds.org (2011). The eight-stage negotiation process. Retriev\ ed from http://changingminds.org/disciplines/negotiation/eight-stage/eight-stage.htm The Initial Stage In the initial stage of negotiation, two primary activities, preparation and opening, receive attention.
When managers plan thoroughly, the chances for achieving desired bargaining goals increase. The failure to plan provides the other party with a bargaining advantage that continues through the remainder of the process.
Prepare At the point in which management determines that negotiations should go \ forward, preparation begins.
Managers should employ several principles to guide preparations: • Identify and prioritize goals. • Establish a settlement range. • Focus on long-term goals and consequences. • Concentrate on mutual principles and concerns. When a single-party negotiation takes place, an individual may be trying\ to bargain for the best pos - sible pay package, buyout, or retirement settlement. The individual’s bargaining goal depends on his or her circumstances. A person taking a buyout who also plans to continue working has goals tha\ t are Learning Objective #2:
How can managers carry out the stages of negotiation in a constructive manner? baa66968_07_c07_187-214.indd 194 6/17/13 11:58 AM CHAPTER 7 Section 7.2 The Stages of Negotiation different from someone intending to retire. When someone is negotiating for a salary, several key factors determine exactly what that individual will bargain for, including the prevailing market rate, current economic conditions, benefits offered, long-term considerations (building a career versus having a job for the time being), and the individual’s tangible personal accomplishme\ nts (Brophy, 2004).
In a similar fashion, when parties bargain as part of a purchasing situation, two companies may seek to make a one-time purchase at the best possible price or use the negotiation process to build a longer-term relationship with the other organization. A company bargaining with a union might prioritize avoiding a work stoppage or seek to achieve the best possible deal regardless of the cost.
Finding the settlement range—the bargaining zone in which acceptable outcomes are located—results from knowing the company’s priorities, its available resources, and the strength of its bargaining posi- tion. A negotiator needs to know the boundaries prior to beginning any session.\ An individual bargain - ing with the company establishes similar “final offer” points. To do so involves applying the concepts identified in Table 7.5.
Table 7.5: Finding the settlement range Collect and analyze relevant data about the people and dynamics involved in the problem. Verify the accuracy of the data. Minimize the impact of inaccurate or unavailable data. Identify all parties’ substantive, procedural, and psychological interests. Source: C. W. Moore (2011). Negotiation. Retrieved from http://www.au.af.mil/au/awc/awcgate/army/usace/negotiation.htm Long-term goals and consequences include issues such as trust and confidence in the other party. Mutual principles and concerns begin with whether the relationship will be adversarial or cooperative. One of the more destructive forces in the process can take place when the urge to win overwhelms rational thinking (Malhotra & Murningham, 2008). Preparation involves selecting approaches or procedures that lead to problem solving whenever possible.
The Opening Stage The opening stage begins when parties make initial contact in person, by telephone, or by mail. In this initial stage, efforts to build rapport and establish a cordial relationship can ease early tensions. Negotia - tors should express the desire to reach an acceptable agreement. Expressing one’s commitment to follow through with procedures that have been established creates a more professional tone. Those involved should check their perceptions of the other side and seek to minimize the effects of stereotypes. Both sides should fully understand the processes that will be used (Moore, 2011).
At the same time, each negotiator should understand that “no” can \ be the opening position, and that the first offer made by the other side will often be quite different from his or her expectations. The bargainer or team should be aware of the “reluctant buyer” (or seller) ploy, which involves deliberate stalling and conveying an unwillingness to reach a quick agreement. As part of the opening, the negotiator should be ready with tactics to respond to these and other complications. Doing so includes developing a strategy to handle strong emotions (Shell, 1999). A standard opening includes the steps displayed in Table 7.6. baa66968_07_c07_187-214.indd 195 6/17/13 11:58 AM CHAPTER 7 Section 7.2 The Stages of Negotiation Table 7.6: Opening negotiation procedures • Introduce all parties. • Exchange statements that demonstrate willingness to listen and share ideas, show openness, and demonstrate desire to bargain in good faith. • Establish guidelines for behavior. • State mutual expectations for the negotiations. • Describe history of problem and explain why there is a need for change or agreement. • Identify interests and/or positions. • Define issues and set an agenda. Source: Encyclopedia of Business and Finance (2011). Negotiation. Retrieved from http://www.enotes.com/business-finance-encyclopedia/negotiation In sum, preparation leads to confidence. However, confidence should be accompanied by caution. An analysis of the issues coupled with seeking to understand the other part\ y helps lead to an effective bar- gaining session.
The Middle Stage Once negotiations are fully underway, a wise approach is to start with an issue in which there is high investment on the part of all participants, where no serious disagreements are present, and in which a strong likelihood of agreement exists. Then, parties should take turns describing how they view \ the situation. A moderator or one party can encourage participants to express their side in enough detail to ensure that all involved understand the individual’s or group’s viewpoint. The negotiating parties should lis- ten actively to one another, ask open-ended questions, and focus on collecting information. The middle stages, as noted in Table 7.4, include the processes of arguing, exploring, signaling, and packaging.
Arguing Negotiators more efficiently argue when both parties first identify specific issues to be discussed. These issues should be framed in a non-judgmental, neutral manner whenever possible. As issues of dispute are raised, both sides reveal information that benefits their arguments and avoid revealing damaging information. Various per - suasion techniques are employed, including silence, veri - fying information, and reconfiguring arguments to best suit a party’s position (Goldman & Rojot, 2003). An example of using silence includes waiting until the other side makes an offer, which means, as many salespeople will note, “the first person to sp\ eak loses.” Further, arguments may be reconfigured, such as when one side says, “We can afford to buy this,” and the opposing side responds, “You can’t afford NOT to buy this,” thereby attempting to increase the value of what has been offered. iStockphoto/Thinkstock The middle stage of a negotiation includes arguing, exploring, signaling, and packaging. baa66968_07_c07_187-214.indd 196 6/17/13 11:58 AM CHAPTER 7 Section 7.2 The Stages of Negotiation In the arguing phase, negotiators can use a variety of additional techniques. Som\ e attempt to control the agenda of the sales meeting by ensuring that only relevant information that pertains to the potential sale is discussed. Buyers may attempt to control the agenda as well. Either party may attempt to slice a deal by tabling issues on which they cannot reach agreement and instead focusing on smaller slices of the deal. They may also attempt to split the difference when arriving at a final deal. Here, they would focus on meeting halfway on subjects such as price, delivery demands, and othe\ r issues pertaining to the final agreement (Baack, Harris, & Baack, 2012).
A key concept that drives negotiators in the arguing stages, BATNA, stands for Best Alternative To a Negotiated Agreement. The BATNA typically determines the lowest acceptable value in the negotiation, because anything that is more desirable than the best outside alternative is likely to be accepted (\ Bazer - man & Neale, 1992, pp. 67-68). Ideally, BATNA is identified as part of the preparation for a negotiation, because it allows the person bargaining to know when an offer is higher than one that would lead to an impasse because it is above that “floor” level. A negotiator will often try to discover the BATNA of the opposing side in order to further expedite negotiation arguments.
Exploration During the exploration stage, parties try to generate options for settlement. Exploring involves review- ing the needs of parties that relate to disputed areas and looking for agreements in principle. Negotiators may consider breaking a major issue into smaller, more manageable issues and generating solutions for these sub-issues. Exploration tactics include the concepts provided in Table 7.7.
Table 7.7: Exploration tactics Expand the pie so that benefits are increased for all parties. Alternate satisfaction so that each party has his or her interests satisfied but at different times. Trade items that are valued differently by parties. Look for integrative or win/win options. Use trial and error to generate multiple solutions. Try silent generation in which each individual develops privately a list of options and then presents his or her ideas to other negotiators. Conduct position/counterposition option generation. Separate generation of possible solutions from evaluation. Source: Encyclopedia of Business and Finance (2011).
As part of the exploration process, a negotiator, when asked for a concession, will often request a trad - eoff. The bargaining party should be wary of any person that attempts to rely on a “higher authority,” such as “My boss won’t go for that offer,” as a rationale for not meeting various negotiation points. Also, effective bargainers are aware of the “vise” tactic, in which the other side continually uses p\ hrases such as “You’ll have to do better than that” to put the squeeze on a bargaining position.
Exploration occurs when true give and take, as noted in the definition of negotiation, takes place\ . The two parties can defend areas of greatest interest to their sides while offering compromises in other areas. baa66968_07_c07_187-214.indd 197 6/17/13 11:58 AM CHAPTER 7 Section 7.2 The Stages of Negotiation Exploration can help identify hidden interests or agendas of the other side. Bargaining parties can probe each issue either one at a time or together to identify interests, needs, and concerns of the principal par- ticipants in the dispute. Exploration continues unless or until a stalemate takes place.
Signaling A signal can take one of several forms. One is recognition that an impasse has been reached, such as when one side or a mediator says, “We’re not getting anywhere.” To handle an impasse, three approaches might be used: (a) the issue might be set aside so that other issues can be dealt with; (b) one of the nego - tiating points might be changed; or (c) an outside party might be brought in to seek a resolution.
Another type of signal notes that agreeable terms are in sight. When a negotiator says something along the lines of “I think we’re getting close,” the signal has been sent. When a union negotiator r\ esponds, “I think our members would ratify that proposal,” a signal of potential agreement has been offered.
Packaging Once a signal has been sent that agreement is possible, a package can be reached. Packaging is the part of the process where negotiators assess final options for settlement. This includes a review of the inter - ests of the parties involved and an analysis of how many interests can be met by the available options.
Part of assessing options is that both sides evaluate the costs and bene\ fits of each option. At that point, a party can revise bargaining strategies when needed. In general, the consensus is that one si\ de’s power increases when the other side first commits. Therefore, both sides should be willing to note agreement in order to move toward a final arrangement.
The Ending Stage The ending stage commences when the two sides agree to the alternative or set of alternatives. An individual negotiating for salary and benefits reaches the ending stage when all elements of the employment contract have been agreed upon. A sale reaches the ending stage when the terms, including price, delivery schedule, financing, and other matters have been settled. An agreement between a company and a union occurs when all issues present in the bargaining session have been resolved.
Two elements of the ending stage are the close and efforts to sustain the agreement. The Close The close includes the moment when the parties establish a pro - cedural means to finalize the agreement. It may take the form of a written memorandum or a legal contract. The bargaining arrangement should contain sufficient detail to implement the agreement and handle any contingencies that might arise. Moni- toring protocols may also be established.
An individual negotiating employment with a company has reached the close when a contract or memo spells out the date employment will begin, along with all of the details of the Creatas/Thinkstock A close normally includes a written memorandum or a signed legal contract. baa66968_07_c07_187-214.indd 198 6/17/13 11:58 AM CHAPTER 7 Section 7.2 The Stages of Negotiation agreement. In some circumstances, a verbal acceptance is all that is necessary. Ordinarily, however, it is better to put the agreement in writing.
A sale is closed when papers specifying the nature of the purchase have been signed or verbally agreed upon by both sides. For example, a bill of lading specifies the contents of a shipment of goods.
A close between two companies creating an arrangement such as a merger or joint venture occurs when the two sides have formally signed legal documents creating the relationship. A close between a union and a company takes place when the bargaining contract has been agreed upon and a vote by union members certifies the contract, making it ready for a signature from negotiators for both sides. Moni- toring of union–management agreements normally includes specified procedures for filing grievances regarding contract violations or other matters of contention or disagreement.
A handshake provides a symbolic finalization of an agreement. When congratulations are offered, both parties are able to relax and enjoy the accomplishment of concluding an acceptable agreement.
Sustaining Efforts to sustain an agreement include establishing monitoring protocols. Standard methods used to sustain agreements include follow-up phone calls, letters, and other interactions. \ These contacts help reassure the other side that the agreement is acceptable and that the terms will be carried out. Monitoring in a sales situation includes updates regarding when orders have been shipped and received. A perfor - mance bond also helps guarantee a project will be properly completed, such as construction of a building or facility.
Bargaining in Other Countries Culture is a major influence during the negotiation process (Adair, Okumura, & Brett, 2001). When both buyer and seller are from the same culture, negotiations can be fairly straightforward. In cross- cultural negotiations, difficulties are more likely to arise. Buyers and sellers have different ways of thinking and behaving, and these differences directly influence sales negotiations (Hamner, 1980).
The use of words, ceremony, and the relative status of the bargaining parties often affects negotiations (Gulbro & Herbig, 1996). Some negotiators are unwilling to follow any prescribed negotiating script or routine. In that context, what is left unsaid may be as important as what is actually said.
Time perceptions affect negotiations. Some buyers take longer than others during the negotiation process. Buyers in Japan, for example, are usually much slower to make decisions than buyers in the United States. Attempting to instill a specific deadline, a popular negotiation tactic, may be met with much hesitation in Japanese culture. Another popular negotiation tactic, bluffing, involves threatening to walk away from negotiations when the other side will not move from a position or is not willing to concede as much as is needed to close the deal. Effective salespeople utilize cultural intelligence and cross-cultural compe - tence to arrive at an agreement that is satisfactory to both themselves and the purchasing organization. Hemera/Thinkstock In cross-cultural negotiations, difficulties are more likely to arise. baa66968_07_c07_187-214.indd 199 6/17/13 11:58 AM CHAPTER 7 Section 7.3 The Nature of Conflict Cultures also vary in terms of willingness to argue or display aggressiveness (Schmidt, 1987). In many cultures, negotiations cannot begin until positive relationships have first been formed, and many times bargaining will be viewed as an unending process (Lubman, 1993). Other factors that often influence international negotiations include the use of eye contact, the amount of physical distance between \ the parties (including actually touching the other person), the use of def\ erent language, gift giving, and protocols for agreement (bowing versus a handshake). A cultural assimilator may be called upon to help with international negotiations. A cultural assimilator is a person versed in the culture of another country who provides assistance in understanding how to interact in that culture.
Bargaining processes, as this section suggests, involve a considerable amount of time\ and detail. Manag- ers who effectively deal with each stage achieve better results during negotiation sessions.
Comprehension Exercise 1. Arguing, exploring, signaling, and packaging take place in what stage of n\ egotiation? a. preparation b. opening c. middle d. ending 2. In which process do bargaining parties try to generate options for settlement? a. arguing b. exploration c. signaling d. packaging Answers: 1) c 2) b 7.3 The Nature of Conflict What do you think of when you hear the term “conflict”? To some, conflict represents a negative force, accompanied by words such as “destructive,” “violent,” or “angry.” Others view conflict on a continuum ranging from mild disagreements to major confrontations. Over time, conflict has been viewed as some - thing to be avoided or eliminated, as inevitable but manageable, and eve\ n as a driving force that leads to innovation and much needed change (De Dreu & Van de Vliert, 1997; Fink, 1968). Consequently, defining the term creates challenges.
In the context of organizational behavior, conflict may be defined as a circumstance in which one party negatively affects or seeks to negatively affect another party (Thomas, 1992). Conflict can be observable Learning Objective #3:
What types of conflicts occur in organizations? baa66968_07_c07_187-214.indd 200 6/17/13 11:58 AM CHAPTER 7 Section 7.3 The Nature of Conflict or perceived (Wall & Callister, 1995), which means that someone may believe a conflict exists even wh\ en it would be difficult to point out as an observable event. Conflict and negotiation are closely related con- cepts, in that both suggest that two parties are involved, and both seek to impose their will or gain in a disputed situation.
Conflict contrasts with another concept, competition, a condition in which all parties in an event or situa - tion attempt to do their best, with the person or group producing the most desired outcome emerging as the winner. A sales contest between individuals or teams is a competition; a confrontation between two members of a sales force over which one should make a call on a prospective client is a conflict.
Recently, conflict has been conceptualized as taking two forms. In an organizational context, functional conflict occurs when the organization’s interests are served in some way, such as improvement in perfor - mance or greater cooperation among individuals or groups. Functional conflict is also called constructive, or cooperative, conflict. A functional conflict would involve an argument about how best to design a retail store to make it customer friendly. Dysfunctional conflict takes the form of destructive activities that hinder group or organizational performance. Three categories of dysfunctional conflict have been identi- fied, as shown in Table 7.8 (Amason, 1996).
Table 7.8: Categories of dysfunctional conflict Task conflict disagreement about the type of work that should be performed and goals Relationship conflict interpersonal dispute Process conflict disagreement about methods of doing a job or performing a task Levels of Conflict Not all conflicts are the same. Managers should be aware that four levels of conflict occur in the work - place. Resolving conflict cannot take place until the level has been properly identified. The four levels of conflict are as follows: • intrapersonal, or intrapsychic, conflict • interpersonal conflict • intragroup conflict • intergroup conflict Intrapersonal conflicts (also called intrapsychic conflicts) occur within an individual. Ideas, thoughts, values, and emotions can conflict with one another. For instance, selling a product that you do not think has sufficient quality may create an intrapsychic conflict when you also recognize the need to make sales and generate personal income.
Interpersonal conflicts take place between individuals. Many times, two individuals in a compan\ y enter into conflicts. Personality conflicts often result from workplace incivility. Examples of incivility include sex - ually inappropriate comments, racial or ethnic slurs, ridicule of older/younger work\ ers, derision based on sexual orientation, and insensitive comments about physical or mental disabilities (Blau & Anderson, 2005).
Intragroup conflict refers to incidents between members of a group. Disagreements about goals, meth - ods of operation, and leadership create intragroup conflicts. When conflicts are not properly managed baa66968_07_c07_187-214.indd 201 6/17/13 11:58 AM CHAPTER 7 Section 7.3 The Nature of Conflict and resolved, the end results can be poor decisions and ineffective group functioning (Bazerman & Neale, 1992).
Intergroup conflict takes place between various groups, such as between departments within a com- pany, or between factions such as ethnic groups or female and male employees. Intergroup conflicts emerge when disagreements about goals, differences of opinion about which group should be assigned a project or task, or budget allocations become the focus of attention.
Each of these four types of conflict requires an intervention. In the case of an intrapersonal conflict, a coun- selor or advisor may assist. Interpersonal, intragroup, and intergroup conflicts may be resolved in a variety of ways. Managers choose the most appropriate method for dealing with each problem as it arises.
A Conflict Model Louis Pondy (1967) developed one of the first and most widely cited mo\ dels of conflict. A modified ver - sion appears as Figure 7.1. Pondy’s model suggests conflicts occur to a lesser or greater extent depending on the organization’s place in a conflict cycle. The cycle suggests that when individuals become sub - jected to a series of conflicts (even when they are only spectators) they become increasingly sensitized to the events. As a result, subsequent conflict will be more likely. When a series of conflicts has been resolved and the company enters a more tranquil period, participants become more patient with each other and the net result is reduced numbers of open conflicts. Managerial skill and intervention can \ break the cycle of increasing conflict.
Figure 7.1: Adaptation of Pondy’s conflict model and conflict cycle La tent Conflict Open Conflict Conflict Af termath Felt Conflict Pe rceived Conflict Pondy’s model of the phases of organizational conflict shows how conflict can become a cycle that continues to feed upon itself. baa66968_07_c07_187-214.indd 202 6/17/13 11:58 AM CHAPTER 7 Section 7.3 The Nature of Conflict The Stages of Conflict As shown in Figure 7.1, latent conflict represents all of the potential sources of conflict at the individual or group level. Table 7.9 displays the various areas or issues where potential sources of conflict within an organization might exist. These potential sources may or may not erupt into open confrontations.
Some problems may exist for years without ever becoming manifest. Others may ta\ ke a “fast track” and quickly develop into altercations.
Table 7.9: Potential Sources of Conflict Individual Level Group or Departmental Level Job assignments Group task assignments Performance appraisals Budgets/resource allocation Promotions Personalities of group members Pay raises Dependence/bottlenecks Personality issues and incivility Goals Dependence/bottlenecks Communication breakdown Goals Ethical issues Status differences Communication breakdown Power differences Ethical violations Felt conflict occurs when people know something is wrong but cannot pinpoint the source. Have you had the experience of walking into a room and knowing immediately something is not right, but having no clue as to the actual problem? At that point, you are feeling the conflict.
Perceived conflict means that those near a conflict know the issues and the people involved, yet do not feel discomfort from it. In essence, the conflict is “someone else’s problem.” Often, perceived conflicts appear in other departments or parts of an organization.
As felt and perceived conflict intensify, perceptions become distorted. The tendency shifts toward inter - preting people and events as being either with or against one side. Thinki\ ng reverts to more stereotypical and biased forms that favor a person’s viewpoint. This sets the stage\ for more open conflict (conflict that has visible outward signs) (Lewicki, Barry, & Saunders, 2010, p. 19).
One driving force that moves a conflict from a potential issue into a more tangible stage is frustration (Meyers, 1990). When a worker has a goal in mind and a policy, action, behavior, or any other overt or covert barrier prevents achievement of that goal, conflict becomes more likely. The worker ’s goal could be as political as getting an undeserved promotion or as positive as trying to help out a coworker. baa66968_07_c07_187-214.indd 203 6/17/13 11:58 AM CHAPTER 7 Section 7.4 Conflict Resolution Open conflicts appear as showdowns, confrontations, and other outward signs. Often an open conflict results from ongoing escalation of the issue. Manifest conflict behaviors include yelling, loud arguments, and vio- lence toward others at the individual level, and work slowdowns, strikes, and deliberate rules violations at the group level. At that point, conflict resolution must take place. A manager or arbiter needs to step in.
In sum, conflict is a circumstance in which one party negatively affects or seeks to negatively affect another party. Managers should be aware of the potential sources of conflict and work to resolve them when they occur. Comprehension Exercise 1. When the organization’s interests are served in some way, such as improvement in performance or greater cooperation among individuals or groups, which form of conflict exists? a. positive b. directed c. functional d. competitive 2. When two members of a group argue over who should lead it, which kind of conflict takes place? a. interpersonal b. intergroup c. intragroup d. virtual team Answers: 1) c 2) c 7.4 Conflict Resolution Conflict resolution includes an understanding of the concerns of the parties invol\ ved. The dual concerns model, as developed by Pruitt, Rubin, and Kim (1994) is based on the assumption that individual\ s han - dle conflict by balancing a concern for themselves (their personal outc\ omes) with a concern for others.
An individual’s tendency to be pro-social or pro-self will determine his or her particular conflict style:
contending/competing, inactive/avoiding, yielding/accommodating, problem-solving/collaborating, or conciliatory/compromising (see Figure 7.2).
Learning Objective #4:
What methods are available to resolve conflicts? Christopher Bissell/Stone/Getty Images Open conflicts appear as showdowns, confrontations, and other aggressive actions. baa66968_07_c07_187-214.indd 204 6/17/13 11:58 AM CHAPTER 7 Section 7.4 Conflict Resolution Figure 7.2: Responses to concerns Low concernfor other ’s outcomes High concern for other ’s outcomes Moderate concern for other ’s outcomes Compromising Pro blem solving/ collaborating Yielding/ accommodating Inaction/ av oiding Contending/ competing There are five main conflict styles, each characterized by a different level of concern for the other’s outcomes.
When one side has little concern about the other ’s outcomes, two conflict styles may result: contend - ing/competing or inaction/avoiding. Contending or competing occurs when \ one side fully pursues its outcomes with no regard for the outcomes of the other side. Strong tactics, such as threats, intimida - tion, and unilateral action, appear. Other terms associated with contending include “dominating” and “forcing” (Rahim, 1985). Inaction and avoiding are characterized by withdrawal and passivity; the party involved has little regard for its own outcome or for the other side’s outcome. In essence, it\ retreats from the conflict.
When concern for the other party’s outcome is high, two conflict styles are possible: yielding/accom - modating and problem solving/collaborating. The yielding/accommodating style involves s\ eeking to help the other side achieve its outcomes with little care about one’s own outcomes, because maintaining a social relationship is more important than being “right” or winning. Yielding is also referred to as “oblig - ing” and “smoothing” (Rahim, 1985). A problem-solving/collaborating style occurs when high concern for the other ’s outcomes accompanies high concern for one’s personal outcomes. \ The goal is to achieve a win-win solution. Problem solving has also been labeled an “integrating” approach.
When there are moderate levels of concern for the other party’s outcome as well as\ one’s own, the com - promising conflict style emerges. A compromise becomes more likely when the two sides hold equal baa66968_07_c07_187-214.indd 205 6/17/13 11:58 AM CHAPTER 7 Section 7.4 Conflict Resolution levels of power, consensus cannot be reached, and the goals of the two parties are not strongly connected. Dis- covering the relative positions of the two sides becomes part of the conflict resolution process. Managers try to identify the level of give and take that will be possible by assessing the strength of commitment each side has to its position. More effective negotiations or resolutions then become possible.
The Steps of Conflict Resolution A manifest conflict often requires a cooling-off period before any attempt at resolution can start. When emo - tions are high, reasonable dialogue will be unlikely.
When an arbiter or manager surmises that both sides have sufficiently calmed down, conflict resolution can commence. In general, the conflict resolution process involves the following steps (Rackham, 1976): • Identify the parties involved. • Identify the issues. • Identify the positions of the parties. • Find the bargaining zone. • Make a decision. To identify the parties involved, the manager seeks to be certain whether\ an individual or group con - flict exists. Next, he or she must identify the real issues involved in the dispute , which may take time.
Many times a conflict first becomes manifest because of something quite \ minor. When two persons become involved in a shoving match over who should use the copier first, odds are the real issue is something else.
The moderator works to identify the positions of each party. When the conflict involves only two indi - viduals or two groups, discovering their positions should be fairly easy. Often, however, a problem or concern exhibits many facets and the net result is that several people or coalitions have some sort of vested interest. To effectively resolve the conflict, the moderator must determine the agendas of all par\ - ties involved, which may be a more difficult task.
Finding the bargaining zone in a conflict resolution resembles identifying the settlement range in a nego - tiation. The bargaining zone is the area in which give and take can be carried out. At times, no such range may be found; one side will win and the other will lose.
Making the final decision determines the outcome of the conflict. A win-win solution allows all sides to make gains, similar to those in negotiations. A win-lose solution means one side gains the advantage over the other. A lose-lose, or compromise, means both parties gain on some issues but lose on others.
Additional Approaches At times, a conflict stands a better chance at effective resolution when a third party intervenes. Alterna - tive dispute resolution attempts to incorporate user-friendly methods of dispute resolution, and seeks to avoid more adversarial approaches (Morrow & Bernardi, 1999). The methods used in this approach include facilitation, conciliation, peer review, ombudsman, mediation, and arbitration. Top Photo Group/Thinkstock Effective conflict resolution can foster increased communication in the future. baa66968_07_c07_187-214.indd 206 6/17/13 11:58 AM CHAPTER 7 Section 7.4 Conflict Resolution Facilitation involves a third party urging the two sides to meet and deal directly in a constructive and positive fashion. Conciliation uses a neutral third party who acts informally as a communication conduit to help resolve a dispute without the parties directly meeting. When peer review is utilized, a panel of trustworthy coworkers that can remain objective is asked to render a nonbinding verdict or opinion about how the conflict should be resolved. An ombudsman is a respected employee who will hear both sides of an argument and attempt to arrange a solution acceptable to both sides. Media\ tion employs a trained arbiter to find innovative solutions to the conflict. Arbitration retains a third party who oper - ates in a formal, court-like environment and hears testimony and evidence before rendering a judgment about how the conflict should be resolved.
Conflict Outcomes The goal of any conflict resolution should be to reach a functional settlement. Desired outcomes of con - flict resolution include agreement, stronger relationships, and organizational learning. Agreement is achieved when both sides believe a settlement was fair or equitable. Stronger relationships emerge when both parties try to build trust and goodwill for the future. Organizational learning takes place when an individual or group achieves greater self-awareness or better understands how to find creative solutions to problems.
Table 7.10 lists some of the additional positive outcomes associated with\ conflict. These can occur at the interpersonal, intergroup, and intragroup levels. Positive outcomes are sometimes difficult to achieve, in which case certain negative aftereffects of conflict may result. These aftereffects are also noted in Table 7.10.
Table 7.10: Conflict outcomes Positive Outcomes Negative Aftereffects Conflicts may serve as safety valves to reduce pent-up emotions and pressures. Conflict may foster anger and revenge which can lead to continuing attempts to make the other side look bad. Conflict generated by external threats may increase internal cohesion. Conflict may result in noncompliance with orders and decisions. Conflict can help introduce much-needed change. Conflict may cause reduced effort or passive resistance from one or more parties. Conflict can bring long-standing animosities and hidden agendas to the surface. Conflict may lead to empire building, withholding information, or territory defense. Conflict may trigger creativity and innovation. Conflict may encourage an increasingly legalistic approach to tasks and assignments. Conflict resolution may foster increased communication in the future. Conflict may result in withdrawal behaviors such as daydreaming or meeting in groups to visit rather than to resolve issues. Conflict may lead to new lobbying efforts. Conflict may encourage sarcasm in front of the mediator. Conflict may increase sensitivity to statements and comments. Source: King, D. (1981, January–February). Three cheers for conflict! Personnel, 58, 13–22. baa66968_07_c07_187-214.indd 207 6/17/13 11:58 AM CHAPTER 7 Chapter Summary Effective management of conflict includes two primary activities. First, m\ anagers should actively analyze potential sources of conflict at all times, so that these sources can be eliminated. Second, managers should seek to become quality conflict arbiters. They should remember that impartiality, a sense of humor, and a calm disposition are major assets in conflict resolution.
Chapter Summary Negotiation, conflict, and conflict resolution share many common elements. Negotiation is a give- and-take decision-making process involving interdependent parties with differing objectives or outcome preferences. Distributive negotiations involve a single issue and a zero-sum game in which one side’s gains become the other side’s losses (win-lose). Integrative negoti\ ations resemble a problem-solving agenda in which both sides try to obtain a settlement that benefits both\ —a win-win solution. Negotia- tions take place between individuals and companies, between companies, a\ nd between a company and an outside group. During the preconditions to negotiation stage, three areas to consider are the psycho - logical climate, the availability of resources, and the characteristics of the bargaining issue.
The initial, middle, and ending stages require managerial attention. The initial stage involves prepara - tion and a quality opening. The middle stage consists of several phases: arguing, exploration, signaling, and packaging potential solutions. The ending stage involves a close and\ the attempt to sustain the agreement to its full implementation. Preparation, negotiating tactics and methods, and closing methods can make a bargaining session more palatable for all concerned. Special consideration should be given to international negotiations. A cultural assimilator can be a valuable asset in international bargaining situations.
Conflict is a circumstance in which one party negatively affects or seeks to negatively affect another party.
Functional or cooperative conflict occurs when the organization’s interests are served in some way, such as through improvement in performance or greater cooperation among individuals or groups. Dysfunc- tional conflict takes the form of destructive activities that hinder group or organizational performance.
The four levels of conflict are intrapersonal or intrapsychic conflict, interpersonal conflict, intrag\ roup conflict, and intergroup conflict.
The conflict cycle begins with latent conflict, which includes all poten\ tial sources of conflict at the indi - vidual or group level. Felt conflict occurs when people know something is wrong but cannot pinpoint the source. Perceived conflict means that those near a conflict know the issues and the\ people involved, yet do not feel discomfort from it. In open conflict showdowns, confrontations, and other outward signs of manifest conflict appear. Open conflict requires some form of resolution.
Conflict resolution includes understanding the concerns of the parties involved. T\ he dual concerns model suggests a combination of concerns about one’s side’s outcom\ es and concerns about the other side’s outcomes. When one side has little concern about the other ’s outcomes, the two possible responses are contending (competing) and inaction (avoiding). In circumstances in which concern for the other ’s outcomes are high, the two possible actions are yielding (obliging) and problem solving (an integrating approach). When moderate levels of concern for both personal and the other side’s outcomes are present, the most common approach involves compromising.
The steps of the conflict resolution process include identifying the parties involved, identifying the issues, \ identifying the positions of the parties, finding the bargaining zone, and making a decision. Decisions may be either win-lose, lose-lose (compromise), or win-win solutions. baa66968_07_c07_187-214.indd 208 6/17/13 11:58 AM CHAPTER 7 Chapter Summary Alternative dispute resolution attempts to incorporate more user-friendly methods of dispute resolu- tion, and seeks to avoid adversarial approaches. It uses methods such as facilitation, conciliation, peer review, ombudsman, mediation, and arbitration. Desired outcomes of conflict resolution include agree - ment, stronger relationships, and organizational learning.
Comprehension Exercise 1. When one party to a conflict has little concern for the outcomes of the \ other party, the two responses are contending or a. inaction/avoiding. b. yielding/accommodating. c. problem solving/collaborating. d. compromise. 2. A respected employee who will hear both sides of an argument and attempt to arrange a solu - tion acceptable to both sides is a(n) a. facilitator. b. conciliatory spokesperson. c. ombudsman. d. arbitrator. Answers: 1) a 2) c Case Study: Sarah’s Dilemma Sarah Norville loved her job as an advertising media buyer and consultant. She worked for Impact Advertising, one of the 20 largest advertising agencies in California. Her tenure began straight out of college after she served an internship in the company. She knew many of the employees in her department and in other areas, and had tried hard to develop a reputation as a professional, competent, and pleasant coworker. Sarah took the position after turning down an offer from another agency. The other offer included a higher salary and a managerial title; however, she was not convinced the company’s future was as bright as she expected Impact Advertis - ing’s would be. She believed that her immediate supervisor, Rick Watson, would adjust her salary when he learned of her value to the agency. After the first four months on the job, a casual dinner with a coworker had a major impact. The coworker informed Sarah that she was among the lowest-paid new hires from the previous year, even though she had more experience as the result of her internship. Impact Advertising had tried to maintain a secret pay policy—with little success. This inci - dent was just one more example. Sarah approached Rick carefully. She explained her frustration with a lower rate of pay than others with less experience. She also noted that her work during the first quarter had earned her the highest possible ranking at her performance appraisal. Rick responded, “Well, you did accept the offer we made. And you have to remember, two of those hires also had taken some graduate courses. That sort of offsets experience.” Sarah replied, “I plan to start an MBA this summer. Just one class. But over time, I plan to complete the entire program.” (continued) baa66968_07_c07_187-214.indd 209 6/17/13 11:58 AM CHAPTER 7 Review Questions Review Questions 1. Define negotiation and explain the nature of distributive and integrative negotiations. 2. What three preconditions to bargaining should be considered prior to entering a negotiation? 3. What two activities are involved in the initial stage of negotiation? 4. What are the four elements of the middle stage of negotiation? 5. Explain the two activities that take place during the ending stage of a \ negotiation. 6. Define conflict and competition and explain the nature of functional and dysfunctional conflict. 7. What four levels of conflict occur? 8. What are the stages of conflict and the conflict cycle? 9. What conflict styles are associated, respectively, with low concern for the other ’s outcomes, high concern for the other ’s outcomes, and moderate concern for the other ’s outcomes in conflict resolution? 10. What steps are involved in the conflict resolution process? Rick smiled, “Well, when you do, I will guarantee we will make this right. If you finish your MBA, you will earn at least $10,000 more than any of your cohorts, if they’re still here. Meanwhile, I can bump you up some now.” The salary he offered moved her within 85% of what the top new hire was earning. She had been at 75% of that figure. She reluc - tantly accepted. Sarah accelerated her MBA work, sacrificing overtime and some highly exciting projects in order to complete her course work. It took her two years to accomplish her goal of a graduate degree. During that time, her salary increased by $5,000 annually. When Sarah handed Rick her diploma, she expected to receive the raise he had promised. Technically, what she was offered did reflect what he said. She was to earn $10,000 more than the starting salary of her highest-paid coworker. Meanwhile, that coworker had also received a $5,000 salary increase, meaning that the differential between them was only $5,000. Sarah asked for a meeting with Rick, a member of human resources, and the agency’s vice president. She prepared her case, pointing out that she had been systematically underpaid for two years, and that now the company was again offering what she termed a “low-ball” pay raise. She noted that even with her extra time in class her perfor - mance appraisals had been among the highest in the company. She finally asked, “Why won’t you guys just do the right thing?” She knew that if they did not respond effectively, other agencies would love to have her skills and edu - cational achievements. Case Questions 1. Who are the parties involved in this negotiation? 2. What are the negotiation issues? 3. Explain how the processes of arguing, exploring, signaling, and packaging might become part of the meeting between Sarah and the others, if they are willing to negotiate. 4. Use the conflict model presented in this chapter to explain the issues in this case. 5. Might Sarah’s gender be an issue in this scenario? What other potential ethical issues are involved? Case Study: Sarah’s Dilemma (continued) baa66968_07_c07_187-214.indd 210 6/17/13 11:58 AM CHAPTER 7 Review Questions Answers to Review Questions 1. Define negotiation and explain the nature of distributive and integrative negotiations. Negotiation is a give-and-take decision-making process involving interdependent parties with differing objectives or outcome preferences. Distributive negotiations involve a single issue and a zero-sum game in which one side’s gains become the other side’s losses (win-lose). An integrative negotiation resembles a problem-solving agenda in which both sides try to obtain a settlement that benefits both, or a win-win solution. Integrative bargaining, in other words, is similar to a “negotiation.” 2. What three preconditions to bargaining should be considered prior to entering a negotiation? The three areas to consider are the psychological climate, the availability of resources, and the charac - teristics of the bargaining issue. 3. What two activities are involved in the initial stage of negotiation? In the initial stage, two primary activities, preparation and opening, receive attention. 4. What are the four elements in the middle stage of negotiation? The middle stage includes the processes of arguing, exploration, signaling, and packaging. 5. Explain the two activities that take place during the ending stage of a negotiation. Two elements of the ending stage are the close and efforts to sustain the agreement. The close includes the moment when the parties establish a procedural means to finalize the agreement. Efforts to sustain an agreement include establishing monitoring protocols. Standard methods used to sustain agreements include follow-up phone calls, letters, and other interactions. These contacts help reassure the other side that the agreement is acceptable and that the terms will be carried out. 6. Define conflict and competition and explain the nature of functional and dysfunctional conflict. Conflict is a circumstance in which one party negatively affects or seeks to negatively affect another party. Conflict contrasts with another concept, competition, a condition in which all parties in an event or situation attempt to do their best, with the person or group producing the most desired outcome emerging as the winner. Functional conflict occurs when the organization’s interests are served in some way, such as improvement in performance or greater cooperation among individuals or groups. Func - tional conflict is also called constructive, or cooperative, conflict. Dysfunctional conflict takes the form of destructive activities that hinder group or organizational performance. 7. What four levels of conflict occur? The four levels of conflict are intrapersonal (intrapsychic) conflict, interpersonal conflict, intragroup con - flict, and intergroup conflict. 8. What are the stages of conflict and the conflict cycle? The stages are latent conflict, perceived conflict, felt conflict, open conflict, and the conflict resolution process.
9.
What conflict styles are associated, respectively, with low concern for the other’s outcomes, high concern for the other’s outcomes, and moderate concern for the other’s outcomes in conflict resolution? When one side has little concern about the other’s outcomes, two conflict styles may result: contending/ competing and inaction/avoiding. When concern for the other party’s outcome is high, two conflict styles are possible: yielding/accommodating and problem solving/collaborating. When there are moderate levels of concern for the other party’s outcome as well as one’s own, the compromising conflict style emerges. 10. What steps are involved in the conflict resolution process? The conflict resolution process involves the steps of: identify the parties involved, identify the issues, identify the positions of the parties, find the bargaining zone, and make a decision. baa66968_07_c07_187-214.indd 211 6/17/13 11:58 AM CHAPTER 7 Key Terms Analytical Exercises 1. Identify forms of distributive and integrative negotiations in the follo\ wing conflict situations. (If one or the other is not possible, explain why.) • individual vs. company • company vs. company • company vs. outside group 2. Provide examples of situations under which the preconditions of negotiation cannot be met in the following circumstances: • An individual files a grievance alleging unfair treatment by a supervisor. • A company that has filed for bankruptcy seeks to negotiate the sale of merchandise to another company. • A union negotiates with a company that plans to outsource most jobs. 3. Explain how the processes of arguing, exploration, signaling, and packaging occur in the fol - lowing negotiations: • An individual seeks a higher initial salary offer. • A supplier tries to raise prices of raw materials to a manufacturer. • A company negotiator attempts to convince a government official that a lower penalty for unpaid taxes should be imposed. 4. Provide an example of each stage of the conflict cycle as it applies to • an interpersonal conflict based on incivility. • an intragroup conflict based on differing goals of two key members. • an intergroup conflict based on two groups vying for offices on the top floor of a building. 5. In the dual concerns model, two key circumstances are (a) one party has low concerns for the other ’s outcomes and (b) one party has high concern for the other ’s outcomes. Explain how these two circumstances would affect the following third-party approaches: • facilitation • conciliation • peer review • an ombudsman • mediation Key Terms BATNA Acronym for Best Alternative to a Nego- tiated Agreement, which identifies the lowest acceptable value to a party in a negotiation.
conflict A circumstance in which one party nega- tively affects or seeks to negatively affect another party. conflict cycle A model where conflict moves from latent to perceived or felt conflict, to open conflict, and finally to resolution and aftermath, which may in turn lead to new conflict. distributive negotiation A negotiation in which a single issue and a zero-sum game involve one side’s gains becoming the other side’s losses. dysfunctional conflict Conflict that takes the form of destructive activities that hinder group or organizational performance. felt conflict What occurs when people know some- thing is wrong but cannot pinpoint the source. baa66968_07_c07_187-214.indd 212 6/17/13 11:58 AM CHAPTER 7 Key Terms functional conflict Conflict in which the organi- zation’s interests are served in some way, such as improvement in performance or greater coopera- tion among individuals or groups. integrative negotiation A problem-solving agenda in which both sides try to obtain a settle- ment that benefits both (a win-win solution). intergroup conflicts Conflicts that take place between various groups, such as between depart- ments within a company or between factions such as ethnic groups or female and male employees. interpersonal conflicts Conflicts that take place between individuals. intragroup conflict Conflicts or incidents between members of a group. intrapersonal conflicts Conflicts that occur within an individual regarding ideas, thoughts, values, and emotions that contradict each other. latent conflict All of the potential sources of con- flict at the individual or group level. negotiation A give-and-take decision-making process involving interdependent parties with dif- fering objectives or outcome preferences. ombudsman A respected employee who will hear both sides of an argument and attempt to arrange a solution acceptable to both parties. open conflicts Showdowns, confrontations, and other outward signs of conflict. perceived conflict What occurs when those near a conflict know the issues and the people involved, yet do not feel discomfort from it. baa66968_07_c07_187-214.indd 213 6/17/13 11:58 AM CHAPTER 7 baa66968_07_c07_187-214.indd 214 6/17/13 11:58 AM
