10
Conflict and Negotiation
Although cooperation and collaboration are ideal conditions, conflict and negotiation are ever present in team and organizational dynamics. Everyone has to be able to deal with them in positive ways. The word “yes” can often get things back on track when tensions build and communication falters in teamwork and interpersonal relationships. 
What's Inside?
Bringing OB to LIFE
KEEPING IT ALL TOGETHER WHEN MOM'S THE BREADWINNER
Worth Considering . . . or Best Avoided?
LABOR AND MANAGEMENT SIDES DISAGREE. IS A STRIKE THE ANSWER?
Checking Ethics in OB
BLOGGING CAN BE FUN, BUT BLOGGERS BEWARE
Finding the Leader in You
ALAN MULALLY LEADS BY TRANSFORMING AN EXECUTIVE TEAM
OB in Popular Culture
CONFLICT AND THE DEVIL WEARS PRADA
Research Insight
WORDS AFFECT OUTCOMES IN ONLINE DISPUTE RESOLUTION
Chapter at a Glance
- What Is the Nature of Conflict in Organizations?
- How Can Conflict Be Managed?
- What Is the Nature of Negotiation in Organizations?
- What Are Alternative Strategies for Negotiation?
Conflict in Organizations
TYPES OF CONFLICT 
LEVELS OF CONFLICT
FUNCTIONAL AND DYSFUNCTIONAL CONFLICT CULTURE AND CONFLICT
We all need skills to work well with others who don't always agree with us, even in situations that are complicated and stressful.1 Conflict occurs whenever disagreements exist in a social situation over issues of substance, or whenever emotional antagonisms create frictions between individuals or groups.2 Team leaders and members can spend considerable time dealing with conflicts. Sometimes they are direct participants, and other times they act as mediators or neutral third parties to help resolve conflicts between other people.3 The fact is that conflict dynamics are inevitable in the workplace, and it's best to know how to handle them.4
Conflict occurs when parties disagree over substantive issues or when emotional antagonisms create friction between them.
Types of Conflict
Conflicts in teams, at work, and in our personal lives occur in at least two basic forms: substantive and emotional. Both types are common, ever present, and challenging. How well prepared are you to deal successfully with them?
Substantive conflict is a fundamental disagreement over ends or goals to be pursued and the means for their accomplishment.5 A dispute with one's boss or other team members over a plan of action to be followed, such as the marketing strategy for a new product, is an example of substantive conflict. When people work together every day, it is only normal that different viewpoints on a variety of substantive workplace issues will arise. At times people will disagree over such things as team and organizational goals, the allocation of resources, the distribution of rewards, policies and procedures, and task assignments.
Substantive conflict involves fundamental disagreement over ends or goals to be pursued and the means for their accomplishment.
Emotional conflict involves interpersonal difficulties that arise over feelings of anger, mistrust, dislike, fear, resentment, and the like.6 This conflict is commonly known as a “clash of personalities.” How many times, for example, have you heard comments such as “I can't stand working with him” or “She always rubs me the wrong way” or “I wouldn't do what he asked if you begged me”? When emotional conflicts creep into work situations, they can drain energies and distract people from task priorities and goals. Yet, they emerge in a wide variety of settings and are common in teams, among co-workers, and in superior-subordinate relationships.
Emotional conflict involves interpersonal difficulties that arise over feelings of anger, mistrust, dislike, fear, resentment, and the like.
Levels of Conflict
Our first tendency may be to think of conflict as something that happens between two people, something we call “interpersonal conflict.” Conflicts in teams and organizations take other forms as well, and each needs to be understood. The full range of conflicts that we experience at work includes those emerging from the interpersonal, intrapersonal, intergroup, and interorganizational levels.
Interpersonal conflict occurs between two or more individuals who are in opposition to one another. It may be substantive, emotional, or both. Two teammates debating each other aggressively on the merits of hiring a specific job applicant for the team is an example of a substantive interpersonal conflict. Two persons continually in disagreement over each other's choice of words, work attire, personal appearance, or manners is an example of an emotional interpersonal conflict. Both types of interpersonal conflict often arise in the performance assessment process where the traditional focus has been on one person passing judgment on another. Sometimes the issue is one of sub-stance—“Just exactly what does ‘poor’ performance mean?” asks the subordinate. Others times it is emotional—“I don't care if it is okay. Your long hair is a misfit with the rest of the team,” says the boss. Even as performance reviews turn toward peer and 360° types, similar issues can make assessments difficult interpersonal moments.
Interpersonal conflict occurs between two or more individuals in opposition to each other.
Intrapersonal conflict is tension experienced within the individual due to actual or perceived pressures from incompatible goals or expectations. Approach-approach conflict occurs when a person must choose between two positive and equally attractive alternatives. An example is when someone has to choose between a valued promotion in the organization or a desirable new job with another firm. Avoidance-avoidance conflict occurs when a person must choose between two negative and equally unattractive alternatives. An example is being asked either to accept a job transfer to another town in an undesirable location or to have one's employment with an organization terminated. Approach-avoidance conflict occurs when a person must decide to do something that has both positive and negative consequences. An example is being offered a higher-paying job with responsibilities that make unwanted demands on one's personal time.
Intrapersonal conflict occurs within the individual because of actual or perceived pressures from incompatible goals or expectations.
Intergroup conflict occurs between teams, perhaps ones competing for scarce resources or rewards or ones whose members have emotional problems with one another. The classic example is conflict among functional groups or departments, such as marketing and manufacturing. Sometimes these conflicts have substantive roots, such as marketing focusing on sales revenue goals and manufacturing focusing on cost-efficiency goals. Other times such conflicts have emotional roots, as when egotists in their respective departments want to look better than each other in a certain situation. Intergroup conflict is quite common in organizations, and it can make the coordination and integration of task activities very difficult.7 The growing use of cross-functional teams and task forces is one way of trying to minimize such conflicts by improving horizontal communication.
Intergroup conflict occurs among groups in an organization.
Interorganizational conflict is most commonly thought of in terms of the rivalry that characterizes firms operating in the same markets. A good example is business competition between U.S. multinationals and their global rivals: Ford versus Hyundai, or AT&T versus Vodaphone, or Boeing versus Airbus, for example. But interorganizational conflict is a much broader issue than that represented by market competition alone. Other common examples include disagreements between unions and the organizations employing their members, between government regulatory agencies and the organizations subject to their surveillance, between organizations and their suppliers, and between organizations and outside activist groups.
Interorganizational conflict occurs between organizations.
Functional and Dysfunctional Conflict
Any type of conflict in teams and organizations can be upsetting both to the individuals directly involved and to others affected by its occurrence. It can be quite uncomfortable, for example, to work on a team where two co-workers are continually hostile toward each other, or where your team is constantly battling another to get resources from top management attention. As Figure 10.1 points out, however, it's important to recognize that conflict can have a functional or constructive side as well as a dysfunctional or destructive side.
FIGURE 10.1 The two faces of conflict: functional conflict and dysfunctional conflict.
Labor and Management Sides Disagree. Is a Strike the Answer?
It's hard to find a person who isn't in favor of good-quality schools. But when it comes time to change schools in search of a better future, teachers, administrators, and school boards sometimes have a hard time reaching agreement.
Take the case of Chicago. Mayor Rahm Emmanuel supported changes to lengthen school days, pay teachers on merit based in part on measures of student performance, and close some schools and open new ones. After months of negotiation teachers were given a 16 percent salary increase over 4 years. Nonetheless, the teacher's union went on strike over concerns about teacher evaluations, job security, and rules for hiring and firing teachers.
Even after a tentative agreement was reached by negotiators, the strike continued. Lewis said teachers were “not happy with the agreement. They'd like it to actually be a lot better.” Robert Bruno, a labor law professor at the University of Illinois at Chicago, said, “I'm hard pressed to imagine how they could have done much better.” A parent commented, “What's the point of going on strike if you don't get everything you need out of it?”
When the strike was over, more than 350,000 Chicago school kids had missed 9 days of school.
Do the Analysis
In contrast to the Chicago school situation, Ford and the Canadian Auto Workers Union negotiated a new labor contract without a strike. The union's top negotiator said, “It's a damn good deal in these economic times,” and Ford's negotiator said it “will improve competitiveness of the Canadian operations.” So, is striking the answer when labor-management conflict hits the wall? Who wins and who loses when strikes occur? When conflicts occur, does having the threat of a strike on the table make management more willing to listen? What skills and conditions make reaching agreements more likely in high conflict situations?
Functional conflict, also called constructive conflict, results in benefits to individuals, the team, or the organization. This positive conflict can bring important problems to the surface so they can be addressed. It can cause decisions to be considered carefully and perhaps reconsidered to ensure that the right path of action is being followed. It can increase the amount of information used for decision making. It can offer opportunities for creativity that can improve performance. Indeed, an effective manager or team leader is able to stimulate constructive conflict in situations in which satisfaction with the status quo is holding back needed change and development.
Functional conflict results in positive benefits to the group.
Dysfunctional conflict, or destructive conflict, works to the disadvantage of an individual or team. It diverts energies, hurts group cohesion, promotes interpersonal hostilities, and creates an overall negative environment for workers. This type of conflict occurs, for example, when two team members are unable to work together because of interpersonal differences—a destructive emotional conflict—or when the members of a work unit fail to act because they cannot agree on task goals—a destructive substantive conflict. Destructive conflicts of these types can decrease performance and job satisfaction as well as contribute to absenteeism and job turnover. Managers and team leaders should be alert to destructive conflicts and be quick to take action to prevent or eliminate them—or at least minimize any harm done.
Dysfunctional conflict works to the group's or organization's disadvantage.
Blogging Can Be Fun, But Bloggers Beware
It is easy and tempting to set up your own blog, write about your experiences and impressions, and then share your thoughts with others online. So, why not do it?
Catherine Sanderson, a British citizen living and working in Paris, might have asked this question before launching her blog, Le Petite Anglaise. At one point it was so “successful” that she had 3,000 readers. But the Internet diary included reports on her experiences at work—and her employer, the accounting firm Dixon Wilson, wasn't at all happy when it became public knowledge.
Even though Sanderson was blogging anonymously, her photo was on the site, and the connection was eventually discovered. Noticed, too, was her running commentary about bosses, colleagues, and life at the office. One boss, she wrote, “calls secretaries ‘typists.’” A Christmas party was described in detail, including an executive's “unforgivable faux pas.” Under the heading “Titillation,” she told how she displayed cleavage during a video conference at the office.
When it all came out, Sanderson says that she was “dooced”—a term used to describe being fired for what one writes in a blog. She sued for financial damages and confirmation of her rights, on principle, to have a private blog. The court awarded her a year's salary.
Who's in the Right? Would you agree with the observer who asks, “Say you worked for a large corporation, and in your spare time you wrote an anonymous ‘insider's view’ column for the Financial Times. Would you expect anything less than termination upon discovery?” Or would you agree with another, who asks, “Where does the influence your employer has on your day-to-day life stop?” Just what are the ethics issues here—from the blogger's and the employer's perspectives? Who has what rights when it comes to communicating in public about one's work experiences and impressions?
Culture and Conflict
Society today shows many signs of cultural wear and tear in social relationships. We experience difficulties born of racial tensions, homophobia, gender gaps, and more. They arise from tensions among people who are different from one another in some way. They are also a reminder that cultural differences must be considered for their conflict potential. Consider the cultural dimension of time orientation. When persons from short-term cultures such as the United States try to work with persons from long-term cultures such as Japan, the likelihood of conflict developing is high. The same holds true when individualists work with collectivists and when persons from high-power-distance cultures work with those from low-power-distance cultures.8
People who are not able or willing to recognize and respect cultural differences can cause dysfunctional conflicts in multicultural teams. On the other hand, members with cultural intelligence and sensitivity can help the team to unlock its performance advantages. Consider these comments from members of a joint European and American project team at Corning. American engineer: “Something magical happens. Europeans are very creative thinkers; they take time to really reflect on a problem to come up with the very best theoretical solution. Americans are more tactical and practical—we want to get down to developing a working solution as soon as possible.” French teammate: “The French are more focused on ideas and concepts. If we get blocked in the execution of those ideas, we give up. Not the Americans. They pay more attention to details, processes, and time schedules. They make sure they are prepared and have involved everyone in the planning process so that they won't get blocked. But it's best if you mix the two approaches. In the end, you will achieve the best results.”9
Conflict Management
STAGES OF CONFLICT HIERARCHICAL CAUSES OF CONFLICT
CONTEXTUAL CAUSES OF CONFLICT
INDIRECT CONFLICT MANAGEMENT STRATEGIES
DIRECT CONFLICT MANAGEMENT STRATEGIES
Conflict can be addressed in many ways, but true conflict resolution—a situation in which the underlying reasons for dysfunctional conflict are eliminated—can be elusive. When conflicts go unresolved, the stage is often set for future conflicts of the same or related sort. Rather than trying to deny the existence of conflict or settle on a temporary resolution, it is always best to deal with important conflicts in such ways that they are completely resolved.10 This requires a good understanding of the stages of conflict, the potential causes of conflict, and indirect and direct approaches to conflict management.
Conflict resolution occurs when the reasons for a conflict are eliminated.
Stages of Conflict
Most conflicts develop in the stages shown in the nearby figure. Conflict antecedents establish the conditions from which conflicts are likely to emerge. When the antecedent conditions become the basis for substantive or emotional differences between people or groups, the stage of perceived conflict exists. Of course, this perception may be held by only one of the conflicting parties.
There is quite a difference between perceived and felt conflict. When conflict is felt, it is experienced as tension that motivates the person to take action to reduce feelings of discomfort. For conflict to be resolved, all parties should perceive the conflict and feel the need to do something about it.
Manifest conflict is expressed openly in behavior. At this stage removing or correcting the antecedents results in conflict resolution, whereas failing to do so results in conflict suppression. With suppression, no change in antecedent conditions occurs even though the manifest conflict behaviors may be temporarily controlled. This occurs, for example, when one or both parties choose to ignore conflict in their dealings with one another. Conflict suppression is a superficial and often temporary state that leaves the situation open to future conflicts over similar issues. Only true conflict resolution establishes conditions that eliminate an existing conflict and reduce the potential for it to recur in the future.
Hierarchical Causes of Conflict
The nature of organizations as hierarchical systems provides a convenient setting for conflicts as individuals and teams try to work with one another. Vertical conflict occurs between levels and commonly involves supervisor-subordinate and team leader-team member disagreements over resources, goals, deadlines, or performance results. Horizontal conflict occurs between persons or groups working at the same organizational level.
FIGURE 10.2 Structural differentiation as a potential source of conflict among functional teams.
Hierarchical conflicts commonly arise from goal incompatibilities, resource scarcities, or purely interpersonal factors. Line-staff conflict involves disagreements between line and staff personnel over who has authority and control over decisions on matters such as budgets, technology, and human resource practices. Also common are role ambiguity conflicts that occur when the communication of task expectations is unclear or upsetting in some way, such as a team member receiving different expectations from the leader and other members. Conflict is always likely when people are placed in ambiguous situations where it is hard to understand who is responsible for what, and why.
Contextual Causes of Conflict
The context of the organization as a complex network of interacting subsystems is a breeding ground for conflicts. Task and workflow interdependencies cause disputes and open disagreements among people and teams who are required to cooperate to meet challenging goals.11 Conflict potential is especially great when interdependence is high—that is, when a person or group must rely on or ask for contributions from one or more others to achieve its goals. Conflict escalates with structural differentiation, when different teams and work units pursue different goals with different time horizons as shown in Figure 10.2. Conflict also develops out of domain ambiguities, when individuals or teams lack adequate task direction or goals and misunderstand such things as customer jurisdiction or scope of authority.
Actual or perceived resource scarcity can foster destructive conflict. Working relationships are likely to suffer as individuals or teams try to position themselves to gain or retain maximum shares of a limited resource pool. They are also likely to resist having their resources redistributed to others.
Power or value asymmetries in work relationships can also create conflict. They exist when interdependent people or teams differ substantially from one another in status and influence or in values. Conflict resulting from asymmetry is likely, for example, when a low-power person needs the help of a high-power person who does not respond, when people who hold dramatically different values are forced to work together on a task, or when a high-status person is required to interact with and perhaps be dependent on someone of lower status.
Indirect Conflict Management Strategies
Most people will tell you that not all conflict in teams and organizations can be resolved by getting everyone involved to adopt new attitudes, behaviors, and stances toward one another. Think about it. Aren't there likely to be times when personalities and emotions prove irreconcilable? In such cases an indirect or structural approach to conflict management can often help. It uses such strategies as reduced interdependence, appeals to common goals, hierarchical referral, and alterations in the use of mythology and scripts to deal with the conflict situation.
Managed Interdependence When workflow conflicts exist, managers can adjust the level of interdependency among teams or individuals.12 One simple option is decoupling, or taking action to eliminate or reduce the required contact between conflicting parties. In some cases, team tasks can be adjusted to reduce the number of required points of coordination. The conflicting parties are separated as much as possible from one another.
Buffering is another approach that can be used when the inputs of one team are the outputs of another. The classic buffering technique is to build an inventory, or buffer, between the teams so that any output slowdown or excess is absorbed by the inventory and does not directly pressure the target group. Although it reduces conflict, this technique is increasingly out of favor because it increases inventory costs.
“This puts me smack in the middle of a distinctively modern dilemma: how to handle the tensions of a marriage between an alpha woman and a beta man?”
Keeping It All Together When Mom's the Breadwinner
Members of today's new generation were largely raised with a sense of male-female equality. But is the man prepared for the woman to be the primary breadwinner? It wasn't too long ago that this question would have seemed out of the ordinary. After all, the female partner or spouse as breadwinner was pretty much an anomaly. Times have changed, and both men and women are facing adjustments.
The U.S. Bureau of Labor Statistics reports that some 40 percent of women earn more than their husbands, and wives out-earn husbands in 35 percent of families in top income brackets. Susan is one, and says, “This puts me smack in the middle of a distinctively modern dilemma: how to handle the tensions of a marriage between an alpha woman and a beta man?” Michelle is another and she says that gender role reversal—man takes care of the kids and chores while the woman goes to work—“puts immense pressure on our marriage.”
Even though many, perhaps most, men don't have a problem with their partners or wives out-earning them, the stereotype still puts them in an awkward position. What does the label “house husband” mean to you—“slacker dude letting his wife do the heavy work” or “modern guy finding fulfillment in his role?” When Jon says, “I'm not the ambitious type like Alison, so I'm happy for her to make more money,” does that make something less of him in their life partnership? When Greg says, “I do feel angry and helpless because I can't support the family unit,” what are the implications for his self-concept, work, and family relationships?
OB is heavy into issues of work-life balance, and the issues seem to be getting more complex than ever. More understanding of gender role reversals and female breadwinners would be useful. Indications are that relationships are better when couples are open with one another and in general agreement about what's taking place and why. Maybe OB can fill in the details and help couples increase the likelihood that both parties will be satisfied at home, at work, and in their relationship.
Conflict can sometimes be reduced by assigning people to serve as liaisons between groups that are prone to conflict.13 Persons in these linking-pin roles are expected to understand the operations, members, needs, and norms of their host teams. They are supposed to use this knowledge to help the team work better with others in order to accomplish mutual tasks.
Appeals to Common Goals An appeal to common goals can focus the attention of conflicting individuals and teams on one mutually desirable conclusion. This elevates any dispute to the level of common ground where disagreements can be put in perspective. In a course team where members are arguing over content choices for a PowerPoint presentation, for example, it might help to remind everyone that the goal is to impress the instructor and get an “A” for the presentation and that this is only possible if everyone contributes their best.
OB IN POPULAR CULTURE
Conflict and The Devil Wears Prada
Who wears Prada? In the hit movie The Devil Wears Prada, there is no doubt that it is Miranda Priestly (Meryl Streep). She's quite a contrast to her new assistant Andrea Sachs (Anne Hathaway). “Andy” is clearly out of her element when it comes to working in the fashion industry. As an assistant to the demanding Miranda, editor-in-chief of Runway magazine, she frequently finds herself assigned to impossible tasks.
In one scene, Andy is sent to retrieve sketches from designer James Holt (Daniel Sunjata) and gets buried in a party. She meets famed writer Christian Thompson (Simon Baker). Their conversation centers on career talk, but it's easy to see that Thompson has other motives. Although Andy recognizes this to a degree, she also realizes this relationship could have real value in terms of helping her meet Miranda's “impossible demands.”
There are many work themes in this movie, from good boss-bad boss issues to everyday “How do you get along in a tough job” insights. The next time you watch it, however, check how the various players use or don't use conflict management and negotiation skills.
Management consultant William C. Byham says it is important to forge “deliberate connections” on the job. These connections become networks for learning, collaboration, and work accomplishment. They help us build all-important social capital: the capacity to enlist the help and support of others when it is needed.
Get to Know Yourself Better Take Assessment 18, Conflict Management Strategies, in the OB Skills Workbook. Think seriously about how you handle conflict and negotiation situations in your personal and work situations. What did you learn in this assessment about your preferred style for dealing with conflict? Sometimes the styles tend to be about equal. In other cases, we may learn that we have a dominant style. What about you? If you have a dominant style, how well does it serve you?
Upward Referral Upward referral uses the chain of command for conflict resolution.14 Problems are moved up from the level of conflicting individuals or teams for more senior managers to address. Although tempting, this has limitations. If conflict is severe and recurring, the continual use of upward referral may not result in true conflict resolution. Higher managers removed from day-to-day affairs may fail to see the real causes of a conflict, and attempts at resolution may be superficial. In addition, busy managers may tend to blame the people involved and perhaps act quickly to replace them.
Altering Scripts and Myths In some situations, conflict is superficially managed by scripts, or behavioral routines, that are part of the organization's culture.15 The scripts become rituals that allow the conflicting parties to vent their frustrations and to recognize that they are mutually dependent on one another. An example is a monthly meeting of department heads that is held presumably for purposes of coordination and problem solving but actually becomes just a polite forum for agreement.16 Managers in such cases know their scripts and accept the difficulty of truly resolving any major conflicts. For instance, by sticking with the script, expressing only low-key disagreement, and then quickly acting as if everything has been taken care of, the managers can leave the meeting with everyone feeling a superficial sense of accomplishment.
Direct Conflict Management Strategies
In addition to the indirect conflict management strategies just discussed, it is also very important to understand how conflict management plays out in face-to-face fashion. Figure 10.3 shows five direct conflict management strategies that vary in their emphasis on cooperativeness and assertiveness in the interpersonal dynamics of the situation. Although true conflict resolution can occur only when a conflict is dealt with through a solution that allows all conflicting parties to “win,” the reality is that direct conflict management may also pursue lose-lose and win-lose outcomes.17
FIGURE 10.3 Five direct conflict management strategies.
Lose-Lose Strategies Lose-lose conflict occurs when nobody really gets what he or she wants in a conflict situation. The underlying reasons for the conflict remain unaffected, and a similar conflict is likely to occur in the future. Lose-lose outcomes are likely when the conflict management strategies involve little or no assertiveness. Avoidance is the extreme where no one acts assertively and everyone simply pretends the conflict doesn't exist and hopes it will go away. Accommodation (or smoothing) as it is sometimes called, involves playing down differences among the conflicting parties and highlighting similarities and areas of agreement. This peaceful coexistence ignores the real essence of a conflict and often creates frustration and resentment. Compromise occurs when each party shows moderate assertiveness and cooperation and is ultimately willing to give up something of value to the other. Because no one gets what they really wanted, the antecedent conditions for future conflicts are established.
Avoidance involves pretending a conflict does not really exist.
Accommodation (or smoothing) involves playing down differences and finding areas of agreement.
Compromise occurs when each party gives up something of value to the other.
Win-Lose Strategies In win-lose conflict, one party achieves its desires at the expense and to the exclusion of the other party's desires. This is a high-assertiveness and low-cooperativeness situation. It may result from outright competition in which one party achieves a victory through force, superior skill, or domination. It may also occur as a result of authoritative command, whereby a formal authority such as manager or team leader simply dictates a solution and specifies what is gained and what is lost by whom. Win-lose strategies fail to address the root causes of the conflict and tend to suppress the desires of at least one of the conflicting parties. As a result, future conflicts over the same issues are likely to occur.
Competition seeks victory by force, superior skill, or domination.
Authoritative command uses formal authority to end conflict.
Win-Win Strategies Win-win conflict is achieved by a blend of both high cooperativeness and high assertiveness.18 Collaboration and problem solving involve recognition by all conflicting parties that something is wrong and needs attention. It stresses gathering and evaluating information in solving disputes and making choices. All relevant issues are raised and openly discussed. Win-win outcomes eliminate the reasons for continuing or resurrecting the conflict because nothing has been avoided or suppressed.
Collaboration and problem solving involve recognition that something is wrong and needs attention through problem solving.
The ultimate test for collaboration and problem solving is whether or not the conflicting parties see that the solution to the conflict: (1) achieves each party's goals, (2) is acceptable to both parties, and (3) establishes a process whereby all parties involved see a responsibility to be open and honest about facts and feelings. When success in each of these areas is achieved, the likelihood of true conflict resolution is greatly increased. However, this process often takes time and consumes lots of energy, to which the parties must be willing to commit. Collaboration and problem solving aren't always feasible, and the other strategies are sometimes useful if not preferred.19 As the “You Should Know . . .” features points out, each of the conflict management strategies may have advantages under certain conditions.
Negotiation
ORGANIZATIONAL SETTINGS FOR NEGOTIATION
NEGOTIATION GOALS AND OUTCOMES ETHICAL ASPECTS OF NEGOTIATION
Picture yourself trying to make a decision. Situation: You are about to order a new tablet device for a team member in your department. Then another team member submits a request for one of a different brand. Your boss says that only one brand can be ordered. Situation: You have been offered a new job in another city and want to take it, but you are disappointed with the salary. You've heard friends talk about how they “negotiated” better offers when taking jobs. You are concerned about the costs of relocating and would like a signing bonus as well as a guarantee of an early salary review.
The preceding examples are just two of the many situations that involve negotiation—the process of making joint decisions when the parties involved have different preferences.20 Negotiation has special significance in teams and work settings, where disagreements are likely to arise over such diverse matters as wage rates, task objectives, performance evaluations, job assignments, work schedules, work locations, and more.
Negotiation is the process of making joint decisions when the parties involved have different preferences.
Organizational Settings for Negotiation
Managers and team leaders should be prepared to participate in at least four major action settings for negotiations. In a two-party negotiation, the manager negotiates directly with one other person. In a group negotiation, the manager is part of a team or group whose members are negotiating to arrive at a common decision. In an intergroup negotiation, the manager is part of a team that is negotiating with another group to arrive at a decision regarding a problem or situation affecting both. In a constituency negotiation, each party represents a broader constituency—for example, representatives of management and labor negotiating a collective bargaining agreement.
Negotiation Goals and Outcomes
Two important goals are at stake in any negotiation: substance goals and relationship goals. Substance goals deal with outcomes that relate to the content issues under negotiation. The dollar amount of a salary offer in a recruiting situation is one example. Relationship goals deal with outcomes that relate to how well people involved in the negotiation and any constituencies they may represent are able to work with one another once the process is concluded. An example is the ability of union members and management representatives to work together effectively after a labor contract dispute has been settled.
Effective negotiation occurs when substance issues are resolved and working relationships are maintained or even improved. In practice, think of this in terms of two criteria for effective negotiation:
Effective negotiation occurs when substance issues are resolved and working relationships are maintained or improved.
- Quality of outcomes—The negotiation results in a “quality” agreement that is wise and satisfactory to all sides.
Criteria of effective negotiation
- Harmony in relationships—The negotiation is “harmonious” and fosters rather than inhibits good interpersonal relations.
Ethical Aspects of Negotiation
It would be ideal if everyone involved in a negotiation followed high ethical standards of conduct, but this goal can get sidetracked by an overemphasis on self-interests. The motivation to behave ethically in negotiations can be put to the test by each party's desire to get more than the other from the negotiation and/or by a belief that there are insufficient resources to satisfy all parties.21 After the heat of negotiations dies down, the parties may try to rationalize or explain away questionable ethics as unavoidable, harmless, or justified. Such after-the-fact rationalizations can have long-run negative consequences, such as not being able to achieve one's wishes again the next time. At the very least, the unethical party may be the target of revenge tactics by those who were disadvantaged. Once some people have behaved unethically in one situation, furthermore, they may become entrapped by such behavior and may be more likely to display it again in the future.22
FINDING THE LEADER
IN YOU
Alan Mulally Leads by Transforming an Executive Team
Why did a CEO brought in from outside the industry fare the best as the Big Three automakers went into crisis mode during the economic downturn? That's a question that Ford Motor Company's chairman, William Clay Ford Jr., has been happy to answer. The person he's talking about is Alan Mulally, a former Boeing executive that Ford hired to retool the firm and put it back on a competitive track.
Many wondered at the time if an “airplane guy” could run an auto company. It isn't easy to come in from outside an industry and successfully lead a huge firm. Mulally's management experience and insights are proving well up to the task. One consultant remarked, “The speed with which Mulally has transformed Ford into a more nimble and healthy operation has been one of the more impressive jobs I've seen.” He went on to say that without Mulally's impact, Ford might well have gone out of business.
In addition to making changes to modernize plants and streamline operations, Mulally tackled the bureaucratic problems common to many extremely large organizations—particularly those dealing with functional chimneys and a lack of open communication. William Ford says that the “old” Ford had a culture that “loved to meet” and in which managers got together to discuss the message they wanted to communicate to the top executives. Mulally changed all that.
He began with a focus on transparency and data-based decision making. He pushed for greater cooperation between Ford's divisions. He pursued a more centralized approach to global operations, one that focused on building vehicles to sell in many markets. When some of the senior executives balked and tried to go directly to Ford with their complaints, Mulally refused. “I didn't permit it,” he says, thus reinforcing his authority to run the firm his way.
Ford's a dividend-paying stock once again, and Mulally has gained lots of respect for his executive prowess. One of his senior managers says, “I've never had such consistency of purpose before.” The next big question is: “Who's going to replace Mulally?” He's due for retirement soon.
What's the Lesson Here?
How comfortable are you with conflict? Can you tolerate heated discussions around you, and can you recognize the difference between productive and nonproductive conflict? Would you be able to stand firm when others disagree with you (e.g., try to protect the status quo), or would you question your judgment?
Negotiation Strategies
APPROACHES TO DISTRIBUTIVE NEGOTIATION
HOW TO GAIN INTEGRATIVE AGREEMENTS COMMON NEGOTIATION PITFALLS
THIRD-PARTY ROLES IN NEGOTIATION
When we think about negotiating for something, perhaps cars and salaries are the first things that pop into mind. But people in organizations are constantly negotiating over not only just pay and raises, but also such things as work rules or assignments, rewards, and access to any variety of scarce resources—money, time, people, facilities, equipment, and so on. The strategy used can have a major influence on how the negotiation transpires and its outcomes.
Two broad negotiation strategies differ markedly in approach and possible outcomes. Distributive negotiation focuses on positions staked out or declared by conflicting parties. Each party tries to claim certain portions of the available “pie” whose overall size is considered fixed. Integrative negotiation, sometimes called principled negotiation, focuses on the merits of the issues. Everyone involved tries to enlarge the available pie and find mutually agreed-on ways of distributing it, rather than stake claims to certain portions of it.23 Think of the conversations you overhear and are part of in team situations. The notion of “my way or the highway” is analogous to distribution negotiation; “Let's find a way to make this work for both of us” is more akin to integrative negotiation.
Distributive negotiation focuses on positions staked out or declared by the parties involved, each of whom is trying to claim certain portions of the available pie.
Integrative negotiation focuses on the merits of the issues, and the parties involved try to enlarge the available pie rather than stake claims to certain portions of it.
Approaches to Distributive Negotiation
Participants in distributive negotiation usually approach it as a win-lose episode. Things tend to unfold in one of two directions—a hard battle for dominance or a soft and quick concession. Neither one nor the other delivers great results.
“Hard” distributive negotiation takes place when each party holds out to get its own way. This leads to competition, whereby each party seeks dominance over the other and tries to maximize self-interests. The hard approach may lead to a win-lose outcome in which one party dominates and gains, or it can lead to an impasse.
“Soft”distributive negotiation takes place when one party or both parties make concessions just to get things over with. This soft approach leads to accommodation—in which one party gives in to the other—or to compromise—in which each party gives up something of value in order to reach agreement. In either case at least some latent dissatisfaction is likely to remain.
Figure 10.4 illustrates classic two-party distributive negotiation by the example of the graduating senior negotiating a job offer with a recruiter.24 Look at the situation first from the graduate's perspective. She has told the recruiter that she would like a salary of $60,000; this is her initial offer. However, she also has in mind a minimum reservation point of $50,000—the lowest salary that she will accept for this job. Thus she communicates a salary request of $60,000 but is willing to accept one as low as $50,000. The situation is somewhat the reverse from the recruiter's perspective. His initial offer to the graduate is $45,000, and his maximum reservation point is $55,000; this is the most he is prepared to pay.
FIGURE 10.4 The bargaining zone in classic two-party negotiation.
The bargaining zone is the range between one party's minimum reservation point and the other party's maximum reservation point. In Figure 10.4, the bargaining zone is $50,000 to $55,000. This is a positive bargaining zone since the reservation points of the two parties overlap.
The bargaining zone is the range between one party's minimum reservation point and the other party's maximum.
Whenever a positive bargaining zone exists, bargaining has room to unfold. Had the graduate's minimum reservation point been greater than the recruiter's maximum reservation point (for example, $57,000), no room would have existed for bargaining. Classic two-party bargaining always involves the delicate tasks of first discovering the respective reservation points—one's own and the other's. Progress can then be made toward an agreement that lies somewhere within the bargaining zone and is acceptable to each party.
Sooner or Later You'll Need to Know How to Negotiate a Better Raise
We've all done it—wish we'd asked for more when negotiating a starting salary or a pay raise. Why didn't we? And, even if we did, would it have made a difference? Chances are you'll go into a salary negotiation unprepared. And you may pay a price for that. There's quite a bit of advice around for how to negotiate pay raises. A compilation of thoughts and tips follows.
- Prepare, prepare, prepare—do the research and find out what others make for a similar position inside and outside the organization, including everything from salary to benefits, bonuses, incentives, and job perks.
- Document and communicate—identify and communicate your value; put forth a set of accomplishments that show how you have saved or made money and created value for an employer, or how your skills and attributes will do so for a prospective one.
- Advocate and ask—be your own best advocate; in salary negotiation, the rule is “Don't ask, don't get.” But don't ask too soon; your boss or interviewer should be the first to bring up salary.
- Stay focused on the goal—the goal is to satisfy your interests to the maximum extent possible; this means everything from getting immediate satisfaction to being better positioned for future satisfaction.
- View the details from the other side—test your requests against the employer's point of view; ask if you are being reasonable, convincing, and fair; ask how the boss could explain to higher levels and to your peers a decision to grant your request.
- Don't overreact to bad news—never “quit on the spot” if you don't get what you want; be willing to search for and consider alternative job offers.
How to Gain Integrative Agreements
The integrative approach to negotiation is less confrontational than the distributive, and it permits a broader range of alternatives to be considered in the negotiation process. From the outset there is much more of a win-win orientation. Even though it may take longer, the time, energy, and effort needed to negotiate an integrated agreement can be well worth the investment. Always, the integrative or principled approach involves a willingness to negotiate based on the merits of the situation. The foundations for gaining truly integrative agreements can be described as supportive attitudes, constructive behaviors, and good information.25
Attitudinal Foundations There are three attitudinal foundations of integrative agreements. First, each party must approach the negotiation with a willingness to trust the other party. This is a reason why ethics and maintaining relationships are so important in negotiations. Second, each party must convey a willingness to share information with the other party. Without shared information, effective problem solving is unlikely to occur. Third, each party must show a willingness to ask concrete questions of the other party. This further facilitates information sharing.
Two-Tier Wages a Hot Button Issue in Labor-Management Negotiations
It was tough for automakers to sell cars and trucks when consumers were struggling. It was tough to earn a profit when costs, especially legacy pension costs, were high. And it was tough to compete with foreign carmakers who were building new cost-efficient plants. America's big firms—Chrysler, Ford, General Motors—responded with a two-tier wage system that pays new workers substantially less (up to one-half less) than existing workers doing the same job. So far the industry's labor unions have gone along with the two-tier system. It's appearing in other settings as well—many new teachers, for example, face similar two-tier systems. Some say two-tier wages are just a stopgap measure that will fade away with an improving economy? Others say they're here to stay.
Behavioral Foundations All behavior during a negotiation is important for both its actual impact and the impressions it leaves behind. This means the following behavioral foundations of integrative agreements must be carefully considered and included in any negotiator's repertoire of skills and capabilities:
- Separate people from the problem.
How to gain integrative agreements
- Don't allow emotional considerations to affect the negotiation.
- Focus on interests rather than positions.
- Avoid premature judgments.
- Keep the identification of alternatives separate from their evaluation.
- Judge possible agreements by set criteria or standards.
Information Foundations The information foundations of integrative agreements are substantial. They involve each party becoming familiar with the best alternative to a negotiated agreement (BATNA). That is, each party must know what he or she will do if an agreement cannot be reached. Both negotiating parties must identify and understand their personal interests in the situation. They must know what is really important to them in the case at hand and, they must come to understand what the other party values.
Common Negotiation Pitfalls
The negotiation process is admittedly complex on ethical and many other grounds. It is subject to all the possible confusions of complex, and sometimes even volatile, interpersonal and team dynamics. And as if this isn't enough, negotiators need to guard against some common negotiation pitfalls.26
One common pitfall is the tendency to stake out your negotiating position based on the assumption that in order to gain your way, something must be subtracted from the gains of the other party. This myth of the fixed pie is a purely distributive approach to negotiation. The whole concept of integrative negotiation is based on the premise that the pie can sometimes be expanded or used to the maximum advantage of all parties, not just one.
Second, the possibility of escalating commitment is high when negotiations begin with parties stating extreme demands. Once demands have been stated, people become committed to them and are reluctant to back down. Concerns for protecting one's ego and saving face may lead to the irrational escalation of a conflict. Self-discipline is needed to spot tendencies toward escalation in one's own behavior as well as in the behavior of others.
Third, negotiators often develop overconfidence that their positions are the only correct ones. This can lead them to ignore the other party's needs. In some cases negotiators completely fail to see merits in the other party's position-merits that an outside observer would be sure to spot. Such overconfidence makes it harder to reach a positive common agreement.
Fourth, communication problems can cause difficulties during a negotiation. It has been said that “negotiation is the process of communicating back and forth for the purpose of reaching a joint decision.”27 This process can break down because of a telling problem-the parties don't really talk to each other, at least not in the sense of making themselves truly understood. It can also be damaged by a hearing problem-the parties are unable or unwilling to listen well enough to understand what the other is saying. Indeed, positive negotiation is most likely when each party engages in active listening and frequently asks questions to clarify what the other is saying. Each party occasionally needs to “stand in the other party's shoes” and to view the situation from the other's perspective.28
Research Insight
Words Affect Outcomes in Online Dispute Resolution
A study of dispute resolution among eBay buyers and sellers finds that using words that give “face” were more likely than words that attack “face” to result in the settlement of online disputes. Jeanne Brett, Marla Olekans, Ray Friedman, Nathan Goates, Cameron Anderson, and Cara Cherry Lisco studied real disputes being addressed through Square Trade, an online dispute resolution service to which eBay refers unhappy customers. For purposes of the study, a “dispute” was defined as a form of conflict in which one party to a transaction made a claim that the other party rejected.
The researchers point out that most past research on dispute resolution has focused on situational and participant characteristics. In this case, they adopted what they call a “language-based” approach based on the perspectives of face theory, essentially arguing that how participants use language to give and attack the face of the other party will have a major impact on results. In filing a claim, for example, an unhappy buyer might use polite words that preserve the positive self-image or face of the seller, or they might use negative words that attack this sense of face. Examples of negative words are agitated, angry, apprehensive, despise, disgusted, frustrated, furious, and hate.
This study examined 386 eBay-generated disputes processed through Square Trade. Words in the first social interchange between parties were analyzed. Results showed that expressing negative emotions and giving commands to the other party inhibited dispute resolution, whereas providing a causal explanation, offering suggestions, and communicating firmness all made dispute resolution more likely. A hypothesis that expressing positive emotions would increase the likelihood of dispute resolution was not supported. The study also showed that the longer a dispute played out, the less likely it was to be resolved.
In terms of practical implications, the researchers state, “Watch your language; avoid attacking the other's face either by showing your anger toward them, or expressing contempt; avoid signaling weakness; be firm in your claim. Provide causal accounts that take responsibility and give face.” Finally, they note that these basic principles apply in other dispute resolution contexts, not just online.
Source: Jeanne Brett, Marla Olekans, Ray Friedman, Nathan Goates, Cameron Anderson, and Cara Cherry Lisco, “Sticks and Stones: Language and On-Line Dispute Resolution,” Academy of Management Journal 50 (February 2007).
Third-Party Roles in Negotiation
Negotiation may sometimes be accomplished through the intervention of third parties, such as when stalemates occur and matters appear to be irresolvable under current circumstances. In a process called alternative dispute resolution, a neutral third party works with persons involved in a negotiation to help them resolve impasses and settle disputes. There are two primary forms through which it is implemented.
In arbitration, such as the salary arbitration now common in professional sports, the neutral third party acts as a “judge” and has the power to issue a decision that is binding on all parties. This ruling takes place after the arbitrator listens to the positions advanced by the parties involved in a dispute. In mediation, the neutral third party tries to engage the parties in a negotiated solution through persuasion and rational argument. This is a common approach in labor-management negotiations, where trained mediators acceptable to both sides are called in to help resolve bargaining impasses. Unlike an arbitrator, the mediator is not able to dictate a solution.
In arbitration a neutral third party acts as judge with the power to issue a decision binding for all parties.
In mediation a neutral third party tries to engage the parties in a negotiated solution through persuasion and rational argument.
10 Study Guide
Key Questions and Answers
What is the nature of conflict in organizations?
- Conflict appears as a disagreement over issues of substance or emotional antagonisms that create friction between individuals or teams.
- Conflict situations in organizations occur at intrapersonal, interpersonal, intergroup, and interorganizational levels.
- Moderate levels of conflict can be functional for performance, stimulating effort and creativity.
- Too little conflict is dysfunctional when it leads to complacency; too much conflict is dysfunctional when it overwhelms us.
How can conflict be managed?
- Conflict typically develops through a series of stages, beginning with antecedent conditions and progressing into manifest conflict.
- Indirect conflict management strategies include appeals to common goals, upward referral, managed interdependence, and the use of mythology and scripts.
- Direct conflict management strategies of avoidance, accommodation, compromise, competition, and collaboration show different tendencies toward cooperativeness and assertiveness.
- Lose-lose conflict results from avoidance, smoothing or accommodation, and compromise; win-lose conflict is associated with competition and authoritative command; win-win conflict is achieved through collaboration and problem solving.
What is the nature of negotiation in organizations?
- Negotiation is the process of making decisions and reaching agreement in situations where participants have different preferences.
- Managers may find themselves involved in various types of negotiation situations, including two-party, group, intergroup, and constituency negotiation.
- Effective negotiation occurs when both substance goals (dealing with outcomes) and relationship goals (dealing with processes) are achieved.
- Ethical problems in negotiation can arise when people become manipulative and dishonest in trying to satisfy their self-interests at any cost.
What are alternative strategies for negotiation?
- The distributive approach to negotiation emphasizes win-lose outcomes; the integrative or principled approach to negotiation emphasizes win-win outcomes.
- In distributive negotiation, the focus of each party is on staking out positions in the attempt to claim desired portions of a fixed “pie.”
- In integrative negotiation, sometimes called principled negotiation, the focus is on determining the merits of the issues and finding ways to satisfy one another's needs.
- The success of negotiations often depends on avoiding common pitfalls such as the myth of the fixed pie, escalating commitment, overconfidence, and both the telling and hearing problems.
- When negotiations are at an impasse, third-party approaches such as mediation and arbitration offer alternative and structured ways for dispute resolution.
Terms to Know
Accommodation (or smoothing) (p. 223)
Arbitration (p. 230)
Authoritative command (p. 223)
Avoidance (p. 223)
Bargaining zone (p. 227)
Collaboration and problem solving (p. 223)
Competition (p. 223)
Compromise (p. 223)
Conflict (p. 214)
Conflict resolution (p. 218)
Distributive negotiation (p. 226)
Dysfunctional conflict (p. 216)
Effective negotiation (p. 224)
Emotional conflict (p. 214)
Functional conflict (p. 216)
Integrative negotiation (p. 226)
Intergroup conflict (p. 215)
Interorganizational conflict (p. 215)
Interpersonal conflict (p. 214)
Intrapersonal conflict (p. 215)
Mediation (p. 230)
Negotiation (p. 224)
Substantive conflict (p. 214)
Self-Test 10
Multiple Choice
- A/an __________ conflict occurs in the form of a fundamental disagreement over ends or goals and the means for accomplishment.
- (a) relationship
- (b) emotional
- (c) substantive
- (d) procedural
- The indirect conflict management approach that uses the chain of command for conflict resolution is known as_________.
- (a) upward referral
- (b) avoidance
- (c) smoothing
- (d) appeal to common goals
- Conflict that ends up being “functional” for the people and organization involved would most likely be__________.
- (a) of high intensity
- (b) of moderate intensity
- (c) of low intensity
- (d) nonexistent
- One of the problems with the suppression of conflicts is that it__________.
- (a) creates winners and losers
- (b) is a temporary solution that sets the stage for future conflict
- (c) works only with emotional conflicts
- (d) works only with substantive conflicts
- When a manager asks people in conflict to remember the mission and purpose of the organization and to try to reconcile their differences in that context, she is using a conflict management approach known as__________.
- (a) reduced interdependence
- (b) buffering
- (c) resource expansion
- (d) appeal to common goals
- An__________conflict occurs when a person must choose between two equally attractive alternative courses of action.
- (a) approach-avoidance
- (b) avoidance-avoidance
- (c) approach-approach
- (d) avoidance-approach
- If two units or teams in an organization are engaged in almost continual conflict and the higher manager decides it is time to deal with matters through managed interdependence, which is a possible choice of conflict management approach?
- (a) compromise
- (b) buffering
- (c) appeal to common goals
- (d) upward referral
- A lose-lose conflict is likely when the conflict management approach is one of ________.
- (a) collaborator
- (b) altering scripts
- (c) accommodation
- (d) problem solving
- Which approach to conflict management can be best described as both highly cooperative and highly assertive?
- (a) competition
- (b) compromise
- (c) accommodation
- (d) collaboration
- Both __________ goals should be considered in any negotiation.
- (a) performance and evaluation
- (b) task and substance
- (c) substance and relationship
- (d) task and performance
- The three criteria for effective negotiation are__________.
- (a) harmony, efficiency, and quality
- (b) quality, efficiency, and effectiveness
- (c) ethical behavior, practicality, and cost-effectiveness
- (d) quality, practicality, and productivity
- Of the following statements, only __________ is true.
- (a) Principled negotiation leads to accommodation.
- (b) Hard distributive negotiation leads to collaboration.
- (c) Soft distributive negotiation leads to accommodation or compromise.
- (d) Hard distributive negotiation leads to win-win conflicts.
- Another name for integrative negotiation is__________.
- (a) arbitration
- (b) mediation
- (c) principled negotiation
- (d) smoothing
- When a person approaches a negotiation with the assumption that in order for him to gain his way, the other party must lose or give up something, the ____________ negotiation pitfall is being exhibited.
- (a) myth of the fixed pie
- (b) escalating commitment
- (c) overconfidence
- (d) hearing problem
- In the process of alternative dispute resolution known as__________, a neutral third party acts as a judge to determine how a conflict will be resolved.
- (a) mediation
- (b) arbitration
- (c) conciliation
- (d) collaboration
Short Response
16. List and discuss three conflict situations faced by managers.
17. List and discuss the major indirect conflict management approaches.
18. Under what conditions might a manager use avoidance or accommodation?
19. Compare and contrast distributive and integrative negotiation. Which is more desirable? Why?
Applications Essay
20. Discuss the common pitfalls you would expect to encounter in negotiating your salary for your first job, and explain how you would best try to deal with them.
Steps to Further Learning 10
Top Choices from The OB Skills Workbook
These learning activities from The OB Skills Workbook found at the back of the book are suggested for Chapter 10.
