Organizational Behavior - MGT502 VU

Lesson 27
CONFLICT AND NEGOTIATION
Overview

Many people automatically assume that conflict is related to lower group and organizational
performance. This chapter has demonstrated that this assumption is frequently incorrect. Conflict
can be either constructive or destructive to the functioning of a group or unit. As shown in Exhibit
14-8, levels of conflict can be either too high or too low. Either extreme hinders performance. An
optimal level is where there is enough conflict to prevent stagnation, stimulate creativity, and
allow tensions to be released, and initiate the seeds for change, yet not so much as to be disruptive
or deter coordination of activities.

Inadequate or excessive levels of conflict can hinder the effectiveness of a group or an

organization, resulting in reduced satisfaction of group members, increased absence and turnover
rates, and, eventually, lower productivity. On the other hand, when conflict is at an optimal level,
complacency and apathy should be minimized, motivation should be enhanced through the
creation of a challenging and questioning environment with a vitality that makes work interesting,
and there should be the amount of turnover needed to rid the organization of misfits and poor
performers.
What advice can we give managers faced with excessive conflict and the need to reduce it? Do
not assume there is one conflict-handling intention that will always be best! You should select an
intention appropriate for the situation. The following provides some guidelines:

Use competition when quick, decisive action is vital (in emergencies); on important
issues, where unpopular actions need implementing (in cost cutting, enforcing unpopular
rules, discipline); on issues vital to the organization’s welfare when you know you are
right; and against people who take advantage of noncompetitive behavior.

Use collaboration to find an integrative solution when both sets of concerns are too
important to be compromised; when your objective is to learn; to merge insights from
people with different perspectives; to gain commitment by incorporating concerns into a
consensus; and to work through feelings that have interfered with a relationship.

Use avoidance when an issue is trivial, or more important issues are pressing; when you
perceive no chance of satisfying your concerns; when potential disruption outweighs the
benefits of resolution; to let people cool down and regain perspective; when gathering
information supersedes immediate decision; when others can resolve the conflict more
effectively; and when issues seem tangential or symptomatic of other issues.

Use accommodation when you find you are wrong and to allow a better position to be
heard, to learn, and to show your reasonableness; when issues are more important to
others than yourself and to satisfy others and maintain cooperation; to build social credits
for later issues; to minimize loss when you are outmatched and losing; when harmony
and stability are especially important; and to allow employees to develop by learning
from mistakes.

Use compromise when goals are important but not worth the effort of potential disruption
of more assertive approaches; when opponents with equal power are committed to
mutually exclusive goals; to achieve temporary settlements to complex issues; to arrive at

© Copyright Virtual University of Pakistan 130

Organizational Behavior - MGT502 VU

expedient solutions under time pressure; and as a backup when collaboration or

competition is unsuccessful.

Definition - Conflict

"a process which begins when one party perceives that the other is frustrated, or is about
to frustrate, some concern of his (or her).
•Perceived by the parties
•Parties are in opposition to one another
•At least one party is blocking the goal attainment of the other party
•Goals can be tangible or psychological
–Money
–Task Achievement
–Happiness
Types of Conflict
Task conflict
Conflict over content and goals of the work
Relationship conflict
Conflict based on interpersonal relationships
Process conflict
Conflict over how work gets done

Sources of conflict L evels an d T yp es o f

•Organizational C o n flict
hierarchy
•Competition for scarce L evel o f co n flict T yp e o f co n flict
resources O rg an izatio n W ith in a nd betw een orga nizations
•Self-image &
stereotypical views of
others G ro u p W ithin and betw een groups

•Differing goals &

objectives W ithin an d betw een individuals
In d ivid u al
•Failures & resultant
blame fixing
•Poor coordination of activities
Five Conflict Management
Conflict Management Styles
Styles
Avoiding - deliberate decision Collaborating
Assertive

Competing
to take no action on
a conflict or to stay
Assertiveness

out of a conflict
Accommodating - concern that the Compromising
other party’s goals
be met but
Unassertive

relatively
Avoiding
unconcerned with Accommodating
getting own way Uncooperative Cooperative
Cooperativeness

© Copyright Virtual University of Pakistan 131

Organizational Behavior - MGT502 VU

Competing - satisfying own interests; willing to do so at other party’s expense

Compromising - each party gives up something to reach a solution
Collaborating - arriving at a solution agreeable to all through open & thorough discussion

What is negotiation?

1. Negotiation is a “process in which two or more parties exchange goods or services and
attempt to agree upon the exchange rate for them.” We use the terms negotiation and
bargaining interchangeably.
2. Negotiation permeates the interactions of almost everyone in groups and organizations. For
example, labor bargains with management. \
3. Not so obvious, however,
a. Managers negotiate with employees, peers, and bosses.
b. Salespeople negotiate with customers.
c. Purchasing agents negotiate with suppliers.
A worker agrees to answer a colleague’s phone for a few minutes in exchange for some past or
future benefit.

Negotiation - a joint process of finding a mutually acceptable solution to a complex conflict

Useful under these conditions
–Two or more parties
–Conflict of interest between the parties
–Parties are willing to negotiate
–Parties prefer to work together rather than to fight openly, give in, break off contact, or
take the dispute to a higher authority

Approaches to Negotiation

1. There are two general approaches to negotiation: distributive bargaining and integrative
bargaining.

2. Distributive bargaining
• An example of distributive bargaining is buying a car:
a. You go out to see the car. It is great and you want it.
b. The owner tells you the asking price. You do not want to pay that much.
c. The two of you then negotiate over the price.
• Its most identifying feature is that it operates under zero-sum conditions. Any gain I
make is at your expense, and vice versa.
• The most widely cited example of distributive bargaining is in labor-management
negotiations over wages.
a. Parties A and B represent two negotiators.
b. Each has a target point that defines what he or she would like to achieve.
c. Each also has a resistance point, which marks the lowest outcome that is acceptable.
d. The area between these two points makes up each one’s aspiration range.
• As long as there is some overlap between A and B’s aspiration ranges, there exists a
settlement range where each one’s aspirations can be met.
• When engaged in distributive bargaining, one’s tactics focus on trying to get one’s
opponent to agree to one’s specific target point or to get as close to it as possible.

© Copyright Virtual University of Pakistan 132

Organizational Behavior - MGT502 VU

Integrative bargaining

• An example: A sales rep calls in the order and is told that the firm cannot approve credit
to this customer because of a past slow-pay record.
a. The next day, the sales rep and the firm’s credit manager meet to discuss the problem.
They want to make the sale, but do not want to get stuck with uncollectible debt.
b. The two openly review their options.
c. After considerable discussion, they agree on a solution that meets both their needs.
The sale will go through with a bank guarantee that will ensure payment if not made
in 60 days.
• This example operates under the assumption that there exist one or more settlements that
can create a win-win solution.
• In terms of intra-organizational behavior, all things being equal, integrative bargaining is
preferable to distributive bargaining.
• Because integrative bargaining builds long-term relationships and facilitates working
together in the future, it bonds negotiators and allows each to leave the bargaining table
feeling victorious.
• Distributive bargaining, on the other hand, leaves one party a loser. It tends to build
animosities and deepens divisions.
• Why do we not see more integrative bargaining in organizations? The answer lies in the
conditions necessary for this type of negotiation to succeed.
a. Parties who are open with information and candid about their concerns
b. A sensitivity by both parties to the other’s needs
c. The ability to trust one another
d. A willingness by both parties to maintain flexibility

The Process of Negotiation

1. Preparation and planning:

• Do your homework. What is the nature of the conflict? What is the history leading up to
this negotiation? Who is involved, and what are their perceptions of the conflict? What
do you want from the negotiation? What are your goals?
• You also want to prepare an assessment of what you think the other party to your
negotiation’s goals is.
a. When you can anticipate your opponent’s position, you are better equipped to counter
his or her arguments with the facts and figures that support your position.
• Once you have gathered your information, use it to develop a strategy.
• Determine your and the other side’s Best Alternative To a Negotiated Agreement
(BATNA).
a. Your BATNA determines the lowest value acceptable to you for a negotiated
agreement.
b. Any offer you receive that is higher than your BATNA is better than an impasse.
2. Definition of ground rules:
• Who will do the negotiating? Where will it take place? What time constraints, if any, will
apply?
• To what issues will negotiation be limited? Will there be a specific procedure to follow if
an impasse is reached?
• During this phase, the parties will also exchange their initial proposals or demands.

© Copyright Virtual University of Pakistan 133

Organizational Behavior - MGT502 VU

3. Clarification and justification:

• When initial positions have been exchanged, explain, amplify, clarify, bolster, and justify
your original demands
• This need not be confrontational.
• You might want to provide the other party with any documentation that helps support
your position.
4. Bargaining and problem solving:
• The essence of the negotiation process is the
actual give and take in trying to hash out an The Process of
agreement.
• Concessions will undoubtedly need to be
Negotiation
made by both parties.
5. Closure and implementation: Preparation Clarification and
and Planning Justification
• The final step—formalizing the agreement
that has been worked out and developing any Closure and
procedures that are necessary for Implementation

implementation and monitoring Bargaining and

Definition of
• Major negotiations will require hammering Ground Rules
Problem
Solving
out the specifics in a formal contract.
• For most cases, however, closure of the
negotiation process is nothing more formal than a handshake.
Mapping the Negotiation

•Describe the problem of the negotiation

•Identify the people involved
•Use empathy to analyze the situation
•Record participants’ needs and fears about the problem
Conducting the Negotiation

•Use an appropriate negotiation style

•Use suitable language
•Use effective responding and listening techniques
•Identify needs and wants
•Set up the negotiation
•Create the non-verbal environment
•Start the negotiation
•Deal with conflict during the negotiation
•Achieve a negotiated outcome

Third-party negotiations

• When individuals or group representatives reach a stalemate and are unable to resolve
their differences through direct negotiations, they may turn to a third party.
• A mediator is a neutral third party who facilitates a negotiated solution by using
reasoning and persuasion, suggesting alternatives, and the like.
a. They are widely used in labor-management negotiations and in civil court disputes.

© Copyright Virtual University of Pakistan 134

Organizational Behavior - MGT502 VU

b. Their settlement rate is approximately 60 percent, with negotiator satisfaction at about

75 percent.
c. The key to success—the conflicting parties must be motivated to bargain and resolve
their conflict, intensity cannot be too high, and the mediator must be perceived as
neutral and no coercive.

Issues in Negotiation

The role of personality traits in negotiation

• Can you predict an opponent’s negotiating tactics if you know something about his/her
personality? The evidence says no.
• An overall assessment of the personality-negotiation relationship finds that personality
traits have no significant direct effect on either the bargaining process or negotiation
outcomes.

Gender differences in negotiations

• Men and women do not negotiate differently.
• A popular stereotype is that women are more cooperative, pleasant, and relationship-
oriented in negotiations than are men. The evidence does not support this.
• Comparisons between experienced male and female managers find women are:
a. Neither worse nor better negotiators.
b. Neither more cooperative nor open to the other.
c. Neither more nor less persuasive nor threatening than are men.
• The belief that women are “nicer” is probably due to confusing gender and the lack of
power typically held by women.
a. Low-power managers, regardless of gender, attempt to placate their opponents and to
use softly persuasive tactics rather than direct confrontation and threats.
• Women’s attitudes toward negotiation and toward themselves appear to be different from
men’s.
a. Managerial women demonstrate less confidence in anticipation of negotiating and are
less satisfied with their performance despite achieving similar outcomes as men.
b. Women may unduly penalize themselves by failing to engage in negotiations when
such action would be in their best interests.
Cultural differences in negotiations
• Negotiating styles clearly vary across national cultures.
• The French like conflict.
a. They gain recognition and develop their reputations by thinking and acting against
others.
b. They tend to take a long time in negotiating agreements, and they are not overly
concerned about whether their opponents like or dislike them.
• The Chinese also draw out negotiations but that is because they believe negotiations
never end.
a. Just when you think you have reached a final solution, the Chinese executive might
smile and start the process all over again.
b. Like the Japanese, the Chinese negotiate to develop a relationship and a commitment
to work together.
• Americans are known around the world for their impatience and their desire to be liked.
a. Astute negotiators often turn these characteristics to their advantage.

© Copyright Virtual University of Pakistan 135

Organizational Behavior - MGT502 VU

The cultural context of the negotiation significantly influences the amount and type of preparation
for bargaining, the emphasis on task versus interpersonal relationships, the tactics used, etc.
A study compared North Americans, Arabs, and Russians negotiating style, how they
responded to an opponent’s arguments, their approach to making concessions, and how
they handled negotiating deadlines.
• North Americans tried to persuade others by relying on facts and appealing to logic.
a. They made small concessions early in the negotiation to establish a relationship and
usually reciprocated the opponent’s concessions.
b. North Americans treated deadlines as very important.

• The Arabs tried to persuade by appealing to emotion.

a. They countered opponent’s arguments with subjective feelings.
b. They made concessions throughout the bargaining process and almost always
reciprocated opponents’ concessions.
c. Arabs approached deadlines very casually.

• The Russians based their arguments on asserted ideals.

a. They made few, if any, concessions.
b. Any concession offered by an opponent was viewed as a weakness and almost never
reciprocated.
c. Finally, the Russians tended to ignore deadlines.

A second study looked at verbal and nonverbal negotiation tactics exhibited by North Americans,
Japanese, and Brazilians during half-hour bargaining sessions.

• Brazilians on average said “No” 83 times compared to five times for the Japanese and
nine times for the North Americans.
• The Japanese displayed more than five periods of silence lasting longer than ten seconds
during the 30-minute sessions.
• North Americans averaged 3.5 such periods; the Brazilians had none.
• The Japanese and North Americans interrupted their opponent about the same number of
times, but the Brazilians interrupted 2.5 to 3 times more often.
• Finally, while the Japanese and the North Americans had no physical contact with their
opponents during negotiations except for handshaking, the Brazilians touched each other
almost five times every half-hour.

© Copyright Virtual University of Pakistan 136