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provide a final, academically-informed and industry-applicable assessment of your chosen leader. Using your research findings and citing proper sources, give a final and comprehensive analysis of your chosen leader. 

Be sure to cover important topics such as: What are JEFF BEZOS’  most notable accomplishments? What is his  “style” (in the context of motivational and management theories)? What was the greatest conflict JEFF BEZOS  faced (Chapter 14)?

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Be sure to use actual examples from the literature and cite your sources appropriately. Be sure to include extensive research outside the textbook and also to cite the textbook correctly including page numbers. You are expected to use at least two academic or business sources other than your textbook each week.

CHAPTER 14 ATTACHED 

1

2

A Change of Tune

While most of us are accustomed to instant access to nearly any music we want over the Internet, digital music distribution is actually a relatively new and volatile market. As recently as 2005, almost all music sales came from physical media like compact discs. By 2015, however, digital downloads overtook CDs in revenue and legal streaming services comprised nearly a third of the overall music market. In Sweden and South Korea, as an extreme example, streaming music services provided 90 percent of recorded music revenues. This rapid shift for the industry in a short period of time has created ongoing high-stakes negotiations.

When Daniel Ek (pictured here) started Spotify in 2006, now one of the most successful streaming services, the music producers were suspicious that his service would lower their revenues. Ek claimed his intention was not to cheat the system, but to beat music pirates at their own game by offering a service that made legally listening to tracks easier and more pleasant than illegal downloads. He noted, “It’s not like people want to be pirates. They just want a great experience. So we started sketching what that would look like.” Through many conflicts and negotiations, Ek maintained that Spotify offered greater profits for everyone in the music industry, and eventually the industry’s players agreed.

The basic terms between record companies and Spotify are simple—Spotify acquires the right to distribute music to fans by paying royalties to the copyright holders. In turn, Spotify can make money from either running advertisements or charging users. To maintain legal access to the music, Ek must continually negotiate with all the recording companies that administer copyrights. Spotify remains completely responsible for ensuring adherence to copyright laws.

This seemingly straightforward negotiation process of exchanging rights for revenues is actually quite complex in practice, especially since pricing models are still being worked out by the players in the industry. Spotify also needs to demonstrate to recording companies that cooperating with streaming services creates better value for them than different music distribution methods, even as prices change. The possibilities for lucrative negotiations are high—but so are the possibilities for conflict.

A number of factors have strengthened Spotify’s bargaining position. For one, any record label that walks away from a deal with Spotify risks losing access to many listeners who rely exclusively on streaming services for their music. For another, it’s better for record labels to make money through an agreement with Spotify than to make nothing from pirated copies of their music.

At the same time, the major labels have their own bargaining resources. First and foremost, if media companies won’t deal with Spotify, the service will quickly lose its appeal. Second and related to this, if Spotify cannot obtain music rights for popular artists, disappointed listeners may easily turn to other services and threaten its existence. The highest-profile defector so far is Taylor Swift, who moved from Spotify to another streaming service that offered her a higher rate of return on plays. The impact of the music star’s defection isn’t completely known but may be costly since the decision was very public in the media.

The stakes of these negotiations are high. One thing is for sure: in such a turbulent market, there will surely be a lot of time spent at the bargaining table in the years to come.

Sources: J. Seabrook, “Revenue Streams,” The New Yorker, November 24, 2014,  com/magazine/2014/11/24/revenue-streams“>http://www​.newyorker.com/magazine/2014/11/24/revenue-streams ; S. Dredge, “Ministry of Sound Boss Attacks Major Labels for Streaming ‘Short Termism,’” The Guardian, May 15, 2015,  http://www.theguardian.com/technology/2015/may/15/ministry-of-sound-major-labels-​ music-streaming-spotify ; and N. Prins “Spotify Racks Up a Streaming Milestone: Artists Settle in for the Fight,” Forbes, May 14, 2015,  http://www.forbes.com/sites/nomiprins/ 2015/05/14/spotify-racks-up-a-streaming-milestone-artists-settle-in-for-the-fight/ .

As the music industry example demonstrates, forms of conflict and negotiation are often complex—and controversial—interpersonal processes. While we generally see conflict as a negative topic and negotiation as a positive one, what we deem positive or negative often depends on our perspective.

Conflict can turn personal. It can create chaotic conditions that make it nearly impossible for employees to work as a team. However, conflict also has a less well-known positive side. We’ll explain the difference between negative and positive conflicts in this chapter and provide a guide to help you understand how conflicts develop. We’ll also present the specifics about the topic closely akin to conflict: negotiation.

A Definition of Conflict

1. 1 Describe the three types of conflict and the three loci of conflict.

There has been no shortage of definitions of conflict, 1  but common to most is the idea that conflict is a perception. If no one is aware of a conflict, then it is generally agreed no conflict exists. Also needed to begin the conflict process are opposition or incompatibility, and interaction.

We define  conflict  broadly as a process that begins when one party perceives another party has affected or is about to negatively affect something the first party cares about. Conflict describes the point in ongoing activity when interaction becomes disagreement. People experience a wide range of conflicts in organizations over an incompatibility of goals, differences in interpretations of facts, disagreements over behavioral expectations, and the like. Our definition covers the full range of conflict levels, from overt and violent acts to subtle forms of disagreement.

There is no consensus over the role of conflict in groups and organizations. In the past, researchers tended to argue about whether conflict was uniformly good or bad. Such simplistic views eventually gave way to approaches recognizing that not all conflicts are the same and that different types of conflict have different effects.

Contemporary perspectives differentiate types of conflict based on their effects.  Functional conflict  supports the goals of the group, improves its performance, and is thus a constructive form of conflict. For example, a debate among members of a work team about the most efficient way to improve production can be functional if unique points of view are discussed and compared openly. Conflict that hinders group performance is destructive or  dysfunctional conflict . A highly personal struggle for control in a team that distracts from the task at hand is dysfunctional.  Exhibit 14-1  provides an overview depicting the effect of levels of conflict. To understand different types of conflict, we will discuss next the types of conflict and the loci of conflict.

Types of Conflict

One means of understanding conflict is to identify the type of disagreement, or what the conflict is about. Is it a disagreement about goals? Is it about people who just rub one another the wrong way? Or is it about the best way to get things done? Although each conflict is unique, researchers have classified conflicts into three categories: task, relationship, or process.  Task conflict  relates to the content and goals of the work.  Relationship conflict  focuses on interpersonal relationships.  Process conflict  is about how the work gets done.

Studies demonstrate that relationship conflicts, at least in work settings, are almost always dysfunctional. 2  Why? It appears that the friction and interpersonal hostilities inherent in relationship conflicts increase personality clashes and decrease mutual understanding, which hinders the completion of organizational tasks. Of the three types, relationship conflicts also appear to be the most psychologically exhausting to individuals. 3  Because they tend to revolve around personalities, you can see how relationship conflicts can become destructive. After all, we can’t expect to change our coworkers’ personalities, and we would generally take offense at criticisms directed at who we are as opposed to how we behave.

Exhibit 1

Conflict and Unit Performance

While scholars agree that relationship conflict is dysfunctional, there is considerably less agreement about whether task and process conflicts are functional. Early research suggested that task conflict within groups correlated to higher group performance, but a review of 116 studies found that generalized task conflict was essentially unrelated to group performance. However, there were factors of the conflict that could create a relationship between conflict and performance. 4

One such factor was whether the conflict included top management or occurred lower in the organization. Task conflict among top management teams was positively associated with performance, whereas conflict lower in the organization was negatively associated with group performance, perhaps because people in top positions may not feel as threatened in their organizational roles by conflict. This review also found that it mattered whether other types of conflict were occurring at the same time. If task and relationship conflict occurred together, task conflict was more likely negative, whereas if task conflict occurred by itself, it more likely was positive. Also, some scholars have argued that the strength of conflict is important—if task conflict is very low, people aren’t really engaged or addressing the important issues. If task conflict is too high, however, infighting will quickly degenerate into relationship conflict. Moderate levels of task conflict may thus be optimal. Supporting this argument, one study in China found that moderate levels of task conflict in the early development stage increased creativity in groups, but high levels decreased team performance. 5

Finally, the personalities of the teams appear to matter. One study demonstrated that teams of individuals who are, on average, high in openness and emotional stability are better able to turn task conflict into increased group performance. 6  The reason may be that open and emotionally stable teams can put task conflict in perspective and focus on how the variance in ideas can help solve the problem, rather than letting it degenerate into relationship conflicts.

What about process conflict? Researchers found that process conflicts are about delegation and roles. Conflicts over delegation often revolve around the perception of some members as shirking, and conflicts over roles can leave some group members feeling marginalized. Thus, process conflicts often become highly personalized and quickly devolve into relationship conflicts. It’s also true, of course, that arguing about how to do something takes time away from actually doing it. We’ve all been part of groups in which the arguments and debates about roles and responsibilities seem to go nowhere.

Loci of Conflict

Another way to understand conflict is to consider its locus, or the framework within which the conflict occurs. Here, too, there are three basic types. Dyadic conflict  is conflict between two people.  Intragroup conflict  occurs within a group or team.  Intergroup conflict  is conflict between groups or teams.

Nearly all the literature on task, relationship, and process conflict considers intragroup conflict (within the group). That makes sense given that groups and teams often exist only to perform a particular task. However, it doesn’t necessarily tell us all we need to know about the context and outcomes of conflict. For example, research has found that for intragroup task conflict to positively influence performance within the team, it is important that the team has a supportive climate in which mistakes aren’t penalized and every team member “[has] the other’s back.” 7  But is this concept applicable to the effects of intergroup conflict? Think about, say, NFL football. As we said, for a team to adapt and improve, perhaps a certain amount of intragroup conflict (but not too much) is good for team performance, especially when the team members support one another. But would we care whether members from one team supported members from another team? Probably not. In fact, if groups are competing with one another so that only one team can “win,” interteam conflict seems almost inevitable. Still, it must be managed. Intense intergroup conflict can be quite stressful to group members and might well affect the way they interact. One study found, for example, that high levels of conflict between teams caused individuals to focus on complying with norms within their teams. 8

It may surprise you that individuals become most important in intergroup conflicts. One study that focused on intergroup conflict found an interplay between an individual’s position within a group and the way that individual managed conflict between groups. Group members who were relatively peripheral in their own group were better at resolving conflicts between their group and another one. But this happened only when those peripheral members were still accountable to their group. 9  Thus, being at the core of your workgroup does not necessarily make you the best person to manage conflict with other groups.

Another intriguing question about loci is whether conflicts interact with or buffer one another. Assume, for example, that Jia and Marcus are on the same team. What happens if they don’t get along interpersonally (dyadic conflict) and their team also has high task conflict? Progress might be halted. What happens to their team if two other team members, Shawna and Justin, do get along well? The team might still be dysfunctional, or the positive relationship might prevail.

Thus, understanding functional and dysfunctional conflict requires not only that we identify the type of conflict; we also need to know where it occurs. It’s possible that while the concepts of task, relationship, and process conflict are useful in understanding intragroup or even dyadic conflict, they are less useful in explaining the effects of intergroup conflict. But how do we make conflict as productive as possible? A better understanding of the conflict process, discussed next, will provide insight about potential controllable variables.

The Conflict Process

1. 2 Outline the conflict process.

The  conflict process  has five stages: potential opposition or incompatibility, cognition and personalization, intentions, behavior, and outcomes (see Exhibit 14-2 ).

Stage I: Potential Opposition or Incompatibility

The first stage of conflict is the appearance of conditions—causes or sources—that create opportunities for it to arise. These conditions need not lead directly to conflict, but one of them is necessary if it is to surface. We group the conditions into three general categories: communication, structure, and personal variables.

COMMUNICATION Susan had worked in supply chain management at Bristol-Myers Squibb for three years. She enjoyed her work largely because her manager, Harry, was a great boss. Then Harry was promoted and Chuck took his place. Six months later, Susan says her job is frustrating. “Harry and I were on the same wavelength. It’s not that way with Chuck. He tells me something, and I do it. Then he tells me I did it wrong. I think he means one thing but says something else. It’s been like this since the day he arrived. I don’t think a day goes by when he isn’t yelling at me for something. You know, there are some people you just find it easy to communicate with. Well, Chuck isn’t one of those!”

Exhibit 2

The Conflict Process

Susan’s comments illustrate that communication can be a source of conflict. 10  Her experience represents the opposing forces that arise from semantic difficulties, misunderstandings, and “noise” in the communication channel (see  Chapter 11 ). These factors, along with jargon and insufficient information, can be barriers to communication and potential antecedent conditions to conflict. The potential for conflict has also been found to increase with too little or too much communication. Communication is functional up to a point, after which it is possible to overcommunicate, increasing the potential for conflict.

STRUCTURE Charlotte is a salesperson and Mercedes is the company credit manager at Portland Furniture Mart, a large discount furniture retailer. The women have known each other for years and have much in common: They live two blocks apart, and their oldest daughters attend the same middle school and are best friends. If Charlotte and Mercedes had different jobs, they might be friends, but at work they constantly disagree. Charlotte’s job is to sell furniture, and she does it well. Most of her sales are made on credit. Because Mercedes’s job is to minimize credit losses, she regularly has to turn down the credit applications of Charlotte’s customers. It’s nothing personal between the women; the requirements of their jobs just bring them into conflict.

The conflicts between Charlotte and Mercedes are structural in nature. The term structure in this context includes variables such as size of group, degree of specialization in tasks assigned to group members, jurisdictional clarity, member–goal compatibility, leadership styles, reward systems, and degree of dependence between groups. The larger the group and the more specialized its activities, the greater the likelihood of conflict. Tenure and conflict are inversely related, meaning that the longer a person stays with an organization, the less likely conflict becomes. Therefore, the potential for conflict is greatest when group members are younger and when turnover is high.

PERSONAL VARIABLES Have you ever met someone you immediately disliked? Perhaps you disagreed with most of his opinions. Even insignificant characteristics—his voice, facial expressions, or word choice—may have annoyed you. Sometimes our impressions are negative. When you have to work with people you don’t like, the potential for conflict arises.

Our last category of potential sources of conflict is personal variables, which include personality, emotions, and values. People high in the personality traits of disagreeableness, neuroticism, or self-monitoring (see  Chapter 5 ) are prone to tangle with other people more often—and to react poorly when conflicts occur. 11  Emotions can cause conflict even when they are not directed at others. An employee who shows up to work irate from her hectic morning commute may carry that anger into her workday, which can result in a tension-filled meeting. 12  Furthermore, differences in preferences and values can generate higher levels of conflict. For example, a study in Korea found that when group members didn’t agree about their desired achievement levels, there was more task conflict; when group members didn’t agree about their desired interpersonal closeness, there was more relationship conflict; and when group members didn’t have similar desires for power, there was more conflict over status. 13

Stage II: Cognition and Personalization

If the conditions cited in Stage I negatively affect something one party cares about, then the potential for opposition or incompatibility becomes actualized in the second stage.

As we noted in our definition of conflict, one or more of the parties must be aware that antecedent conditions exist. However, just because a disagreement is a  perceived conflict  does not mean it is personalized. It is at the  felt conflict  level, when individuals become emotionally involved, that they experience anxiety, tension, frustration, or hostility.

Stage II is important because it’s where conflict issues tend to be defined, where the parties decide what the conflict is about. 14  The definition of conflict is important because it delineates the set of possible settlements. Most evidence suggests that people tend to default to cooperative strategies in interpersonal interactions unless there is a clear signal that they are faced with a competitive person. However, if our salary disagreement is a zero-sum situation (the increase in pay you want means there will be that much less in the raise pool for me), I am going to be far less willing to compromise than if I can frame the conflict as a potential win–win situation (the dollars in the salary pool might be increased so both of us could get the added pay we want).

Second, emotions play a major role in shaping perceptions. 15  Negative emotions allow us to oversimplify issues, lose trust, and put negative interpretations on the other party’s behavior. 16  In contrast, positive feelings increase our tendency to see potential relationships among elements of a problem, take a broader view of the situation, and develop innovative solutions. 17

Stage III: Intentions

Intentions  intervene between people’s perceptions and emotions, and their overt behavior. They are decisions to act in a given way. 18

Intentions are a distinct stage because we have to infer the other’s intent to know how to respond to behavior. Many conflicts escalate simply because one party attributes the wrong intentions to the other. There is slippage between intentions and behavior, so behavior does not always accurately reflect a person’s intentions.

Exhibit 14-3  represents one way to identify the primary conflict-handling intentions. Using two dimensions—assertiveness (the degree to which one party attempts to satisfy his or her own concerns) and cooperativeness (the degree to which one party attempts to satisfy the other party’s concerns)—we can identify five conflict-handling intentions: competing (assertive and uncooperative), collaborating (assertive and cooperative), avoiding (unassertive and uncooperative), accommodating (unassertive and cooperative), and compromising (midrange on both assertiveness and cooperativeness). 19

Exhibit 3

Dimensions of Conflict-Handling Intentions

Source: Figure from “Conflict and Negotiation Processes in Organizations” by K. Thomas in M. D. Dunnette and L. M. Hough (eds.), Handbook of Industrial and Organizational Psychology, 2/e, vol. 3 (Palo Alto, CA: Consulting Psychologists Press, 1992), 668. Used with permission.

COMPETING When one person seeks to satisfy his or her own interests regardless of the impact on the other parties in the conflict, that person is  competing . We are more apt to compete when resources are scarce.

COLLABORATING When parties in conflict each desire to fully satisfy the concerns of all parties, there is cooperation and a search for a mutually beneficial outcome. In  collaborating , parties intend to solve a problem by clarifying differences rather than by accommodating various points of view. If you attempt to find a win–win solution that allows both parties’ goals to be completely achieved, that’s collaborating.

AVOIDING A person may recognize a conflict exists and want to withdraw from or suppress it. Examples of  avoiding  include trying to ignore a conflict and keeping away from others with whom you disagree.

ACCOMMODATING A party who seeks to appease an opponent may be willing to place the opponent’s interests above his or her own, sacrificing to maintain the relationship. We refer to this intention as  accommodating . Supporting someone else’s opinion despite your reservations about it, for example, is accommodating.

COMPROMISING In  compromising , there is no winner or loser. Rather, there is a willingness to ration the object of the conflict and accept a solution with incomplete satisfaction of both parties’ concerns. The distinguishing characteristic of compromising, therefore, is that each party intends to give up something.

Stage IV: Behavior

When most people think of conflict, they tend to focus on Stage IV because this is where conflicts become visible. The behavior stage includes statements, actions, and reactions made by conflicting parties, usually as overt attempts to implement their own intentions. As a result of miscalculations or unskilled enactments, overt behaviors sometimes deviate from original intentions. 20

Stage IV is a dynamic process of interaction. For example, you make a demand on me, I respond by arguing, you threaten me, I threaten you back, and so on.  Exhibit 14-4  provides a way of visualizing conflict behavior. All conflicts exist somewhere along this continuum. At the lower end are conflicts characterized by subtle, indirect, and highly controlled forms of tension, such as a student challenging a point the instructor has made. Conflict intensities escalate as they move upward along the continuum until they become highly destructive. Strikes, riots, and wars clearly fall in this upper range. Conflicts that reach the upper ranges of the continuum are almost always dysfunctional. Functional conflicts are typically confined to the lower range of the continuum.

Exhibit 4

Conflict-Intensity Continuum

Sources: Based on S. P. Robbins, Managing Organizational Conflict: A Nontraditional Approach (Upper Saddle River, NJ: Prentice Hall, 1974), 93–97; and F. Glasi, “The Process of Conflict Escalation and the Roles of Third Parties,” in G. B. J. Bomers and R. Peterson (eds.), Conflict Management and Industrial Relations (Boston: Kluwer-Nijhoff, 1982), 119–40.

Intentions that are brought into a conflict are eventually translated into behaviors. Competing brings out active attempts to contend with team members, and more individual effort to achieve ends without working together. Collaborating creates investigation of multiple solutions with other members of the team and trying to find a solution that satisfies all parties as much as possible. Avoidance is seen in behavior like refusals to discuss issues and reductions in effort toward group goals. People who accommodate put their relationships ahead of the issues in the conflict, deferring to others’ opinions and sometimes acting as a subgroup with them. Finally, when people compromise, they both expect to (and do) sacrifice parts of their interests, hoping that if everyone does the same, an agreement will sift out.

A review that examined the effects of the four sets of behaviors across multiple studies found that openness and collaborating were both associated with superior group performance, whereas avoiding and competing strategies were associated with significantly worse group performance. 21  These effects were nearly as large as the effects of relationship conflict. This further demonstrates that it is not just the existence of conflict or even the type of conflict that creates problems, but rather the ways people respond to conflict and manage the process once conflicts arise.

If a conflict is dysfunctional, what can the parties do to de-escalate it? Or, conversely, what options exist if conflict is too low to be functional and needs to be increased? This brings us to techniques of  conflict management  Exhibit 14-5  lists the major resolution and stimulation techniques that allow managers to control conflict levels. We have already described several as conflict-handling intentions. Under ideal conditions, a person’s intentions should translate into comparable behaviors.

Exhibit 5

Conflict Management Techniques

Stage V: Outcomes

The action–reaction interplay between conflicting parties creates consequences. As our model demonstrates (see  Exhibit 14-1 ), these outcomes may be functional if the conflict improves the group’s performance, or dysfunctional if it hinders performance.

FUNCTIONAL OUTCOMES How might conflict act as a force to increase group performance? It is hard to visualize a situation in which open or violent aggression could be functional. But it’s possible to see how low or moderate levels of conflict could improve group effectiveness. Note that all our examples focus on task and process conflicts and exclude the relationship variety.

Conflict is constructive when it improves the quality of decisions, stimulates creativity and innovation, encourages interest and curiosity among group members, provides the medium for problems to be aired and tensions released, and fosters self-evaluation and change. Mild conflicts also may generate energizing emotions so members of groups become more active, energized, and engaged in their work. 22

DYSFUNCTIONAL OUTCOMES The destructive consequences of conflict on the performance of a group or an organization are generally well known: Uncontrolled opposition breeds discontent, which acts to dissolve common ties and eventually leads to the destruction of the group. And, of course, a substantial body of literature documents how dysfunctional conflicts can reduce group effectiveness. 23  Among the undesirable consequences are poor communication, reductions in group cohesiveness, and subordination of group goals to the primacy of infighting among members. All forms of conflict—even the functional varieties—appear to reduce group member satisfaction and trust. 24  When active discussions turn into open conflicts between members, information sharing between members decreases significantly. 25  At the extreme, conflict can bring group functioning to a halt and threaten the group’s survival.

MANAGING FUNCTIONAL CONFLICT If managers recognize that in some situations conflict can be beneficial, what can they do to manage conflict effectively in their organizations? In addition to knowing the principles of conflict motivation we just discussed, there are some practical guidelines for managers.

First, one of the keys to minimizing counterproductive conflicts is recognizing when there really is a disagreement. Many apparent conflicts are due to people using different verbiage to discuss the same general course of action. For example, someone in marketing might focus on “distribution problems,” while someone from operations will talk about “supply chain management” to describe essentially the same issue. Successful conflict management recognizes these different approaches and attempts to resolve them by encouraging open, frank discussion focused on interests rather than issues. Another approach is to have opposing groups pick parts of the solution that are most important to them and then focus on how each side can get its top needs satisfied. Neither side may get exactly what it wants, but each side will achieve the most important parts of its agenda. 26

Third, groups that resolve conflicts successfully discuss differences of opinion openly and are prepared to manage conflict when it arises. 27  The most disruptive conflicts are those that are never addressed directly. An open discussion makes it much easier to develop a shared perception of the problems at hand; it also allows groups to work toward a mutually acceptable solution. Fourth, managers need to emphasize shared interests in resolving conflicts, so groups that disagree with one another don’t become too entrenched in their points of view and start to take the conflicts personally. Groups with cooperative conflict styles and a strong underlying identification with the overall group goals are more effective than groups with a competitive style. 28

Differences across countries in conflict resolution strategies may be based on collectivistic tendencies and motives. 29  Collectivist cultures see people as deeply embedded in social situations, whereas individualist cultures see them as autonomous. As a result, collectivists are more likely to seek to preserve relationships and promote the good of the group as a whole.  They will avoid the direct expression of conflict, preferring indirect methods for resolving differences of opinion. Collectivists may also be more interested in demonstrations of concern and working through third parties to resolve disputes, whereas individualists will be more likely to confront differences of opinion directly and openly.

Some research supports this theory. Compared to collectivist Japanese negotiators, their more individualist U.S. counterparts are more likely to see offers as unfair and to reject them. Another study revealed that whereas U.S. managers were more likely to use competing tactics in the face of conflicts, compromising and avoiding were the most preferred methods of conflict management in China. 30   Interview data, however, suggest that top management teams in Chinese high-technology firms prefer collaboration even more than compromising and avoiding. 31

Cross-cultural negotiations can also create issues of trust. 32  One study of Indian and U.S. negotiators found that respondents reported having less trust in their cross-culture negotiation counterparts.  The lower level of trust was associated with less discovery of common interests between parties, which occurred because cross-culture negotiators were less willing to disclose and solicit information. Another study found that both U.S. and Chinese negotiators tended to have an ingroup bias, which led them to favor negotiating partners from their own cultures. For Chinese negotiators, this was particularly true when accountability requirements were high.

Having considered conflict—its nature, causes, and consequences—we now turn to negotiation, which often resolves conflict.

 Watch It!

If your professor has assigned this, go to the Assignments section of  mymanagementlab.com  to complete the video exercise titled  Gordon Law Group: Conflict and Negotiation .

Negotiation

1. 3 Contrast distributive and integrative bargaining.

Negotiation permeates the interactions of almost everyone in groups and organizations. There’s the obvious: Labor bargains with management. There’s the not-so-obvious: Managers negotiate with employees, peers, and bosses; salespeople negotiate with customers; purchasing agents negotiate with suppliers. And there’s the subtle: An employee agrees to cover for a colleague for a few minutes in exchange for a future benefit. In today’s loosely structured organizations, in which members work with colleagues over whom they have no direct authority and with whom they may not even share a common boss, negotiation skills are critical.

We can define  negotiation  as a process that occurs when two or more parties decide how to allocate scarce resources. 33  Although we commonly think of the outcomes of negotiation in one-shot economic terms, like negotiating over the price of a car, every negotiation in organizations also affects the relationship between negotiators and the way negotiators feel about themselves. 34  Depending on how much the parties are going to interact with one another, sometimes maintaining the social relationship and behaving ethically will be just as important as achieving an immediate outcome of bargaining. Note that we use the terms negotiation and bargaining interchangeably.

Bargaining Strategies

There are two general approaches to negotiation—distributive bargaining and integrative bargaining. 35  As  Exhibit 14-6  shows, they differ in their goal and motivation, focus, interests, information sharing, and duration of relationship. Let’s define each and illustrate the differences.

Exhibit 6

Distributive versus Integrative Bargaining

DISTRIBUTIVE BARGAINING You see a used car advertised for sale online that looks great. You go see the car. It’s perfect, and you want it. The owner tells you the asking price. You don’t want to pay that much. The two of you negotiate. The negotiating strategy you’re engaging in is called  distributive bargaining . Its identifying feature is that it operates under zero-sum conditions—that is, any gain I make is at your expense, and vice versa. Every dollar you can get the seller to cut from the car’s price is a dollar you save, and every dollar the seller can get from you comes at your expense. The essence of distributive bargaining is negotiating over who gets what share of a fixed pie. By  fixed pie , we mean a set amount of goods or services to be divvied up. When the pie is fixed, or the parties believe it is, they tend to bargain distributively.

The essence of distributive bargaining is depicted in  Exhibit 14-7 . Parties A and B represent two negotiators. Each has a target point that defines what he or she would like to achieve. Each also has a resistance point, which marks the lowest acceptable outcome—the point beyond which the party would break off negotiations rather than accept a less favorable settlement. The area between these two points makes up each party’s aspiration range. As long as there is some overlap between A’s and B’s aspiration ranges, there exists a settlement range in which each one’s aspirations can be met.

Exhibit 7

Staking Out the Bargaining Zone

When you are engaged in distributive bargaining, one of the best things you can do is make the first offer, and make it an aggressive one. Making the first offer shows power; individuals in power are much more likely to make initial offers, speak first at meetings, and thereby gain the advantage. Another reason this is a good strategy is the anchoring bias, mentioned in  Chapter 6 . People tend to fixate on initial information. Once that anchoring point has been set, they fail to adequately adjust it based on subsequent information. A savvy negotiator sets an anchor with the initial offer, and scores of negotiation studies show that such anchors greatly favor the person who sets them. 36

Say you have a job offer, and your prospective employer asks you what sort of starting salary you want. You’ve just been given a gift—you have a chance to set the anchor, meaning you should ask for the highest salary you think the employer could reasonably offer. Asking for a million dollars is only going to make most of us look ridiculous, which is why we suggest being on the high end of what you think is reasonable. Too often, we err on the side of caution, afraid of scaring off the employer and thus settling for far too little. It is possible to scare off an employer, and it’s true employers don’t like candidates to be assertive in salary negotiations, but liking isn’t the same as doing what it takes to hire or retain someone. 37  What happens much more often is that we ask for less than we could have obtained.

INTEGRATIVE BARGAINING Jake was a Chicago luxury boutique owned by Jim Wetzel and Lance Lawson. In the early days of the business, Wetzel and Lawson moved millions of dollars of merchandise from many up-and-coming designers. They developed such a good rapport that many designers would send allotments to Jake without requiring advance payment. When the economy soured in 2008, Jake had trouble selling inventory, and designers were not being paid for what they had shipped to the store. Despite the fact that many designers were willing to work with the store on a delayed payment plan, Wetzel and Lawson stopped returning their calls. Lamented one designer, Doo-Ri Chung, “You kind of feel this familiarity with people who supported you for so long. When they have cash-flow issues, you want to make sure you are there for them as well.” 38  Chung’s attitude shows the promise of  integrative bargaining . In contrast to distributive bargaining, integrative bargaining assumes that one or more of the possible settlements can create a win–win solution. Of course, as the Jake example shows, both parties must be engaged for integrative bargaining to work.

In terms of intraorganizational behavior, integrative bargaining is preferable to distributive bargaining because the former builds long-term relationships. Integrative bargaining bonds negotiators and allows them to leave the bargaining table feeling they have achieved a victory. Distributive bargaining, however, leaves one party a loser. It tends to build animosity and deepen divisions when people have to work together on an ongoing basis. Research shows that over repeated bargaining episodes, a losing party who feels positively about the negotiation outcome is much more likely to bargain cooperatively in subsequent negotiations.

Why, then, don’t we see more integrative bargaining in organizations? The answer lies in the conditions necessary for it to succeed. These include opposing parties who are open with information and candid about concerns, are sensitive to the other’s needs and trust, and maintain flexibility. 39  Because these conditions seldom exist in organizations, negotiations often take a win-at-any-cost dynamic.

Compromise may be your worst enemy in negotiating a win–win agreement. Compromising reduces the pressure to bargain integratively. After all, if you or your opponent caves in easily, no one needs to be creative to reach a settlement. People then settle for less than they could have obtained if they had been forced to consider the other party’s interests, trade off issues, and be creative. 40  Consider a classic example in which two siblings are arguing over who gets an orange. Unknown to them, one sibling wants the orange to drink the juice, whereas the other wants the orange peel to bake a cake. If one capitulates and gives the other the orange, they will not be forced to explore their reasons for wanting the orange, and thus they will never find the win–win solution: They could each have the orange because they want different parts.

MYTH OR SCIENCE?

Teams Negotiate Better Than Individuals in Collectivistic Cultures

According to a recent study, this statement appears to be false.

In general, the literature has suggested that teams negotiate more effectively than individuals negotiating alone. Some evidence indicates that team negotiations create more ambitious goals, and that teams communicate more with each other than individual negotiators do.

Common sense suggests that if this is indeed the case, it is especially true in collectivistic cultures, where individuals are more likely to think of collective goals and be more comfortable working in teams. A study of the negotiation of teams in the United States and in Taiwan, however, suggests that this common sense is wrong. The researchers conducted two studies comparing two-person teams with individual negotiators. They defined negotiating effectiveness as the degree to which the negotiation produced an optimal outcome for both sides. U.S. teams did better than solo individuals in both studies. In Taiwan, solo individuals did better than teams.

Why did this happen? The researchers determined that in Taiwan norms respecting harmony already exist, and negotiating in teams only amplifies that tendency. This poses a problem because when norms for cooperation are exceptionally high, teams “satisfice” (settle for a satisfactory, but less than optimal, solution) to avoid conflict. When Taiwanese individuals negotiate solo, at least they can clearly represent their own interests. In contrast, because the United States is individualistic, solo negotiators may focus on their own interests, which makes reaching integrative solutions more difficult. When Americans negotiate in teams, they become less inclined to focus on individual interests and therefore can reach solutions.

Overall, these findings suggest that negotiating individually works best in collectivistic cultures, and negotiating in teams works best in individualistic cultures.

Sources: Based on M. J. Gelfand et al., “Toward a Culture-by-Context Perspective on Negotiation: Negotiating Teams in the United States and Taiwan,” Journal of Applied Psychology 98 (2013): 504–13; and A. Graf, S. T. Koeszegi, and E.-M. Pesendorfer, “Electronic Negotiations in Intercultural Interfirm Relationships,” Journal of Managerial Psychology 25 (2010): 495–512.

The Negotiation Process

1. 4 Apply the five steps of the negotiation process.

Exhibit 14-8  provides a simplified model of the negotiation process. It views negotiation as made up of five steps: (1) preparation and planning, (2) definition of ground rules, (3) clarification and justification, (4) bargaining and problem solving, and (5) closure and implementation. 41

PREPARATION AND PLANNING Before you start negotiating, do your homework. What’s the nature of the conflict? What’s the history leading up to this negotiation? Who’s involved and what are their perceptions of the conflict? What do you want from the negotiation? What are your goals? If you’re a supply manager at Dell Computer, for instance, and your goal is to get a significant cost reduction from your keyboard supplier, make sure this goal stays paramount in discussions and doesn’t get overshadowed by other issues. It helps to put your goals in writing and develop a range of outcomes—from “most hopeful” to “minimally acceptable”—to keep your attention focused.

You should also assess what you think are the other party’s goals. What are they likely to ask? How entrenched is their position likely to be? What intangible or hidden interests may be important to them? On what might they be willing to settle? When you can anticipate your opponent’s position, you are better equipped to counter arguments with facts and figures that support your position.

Relationships change as a result of negotiation, so take that into consideration. If you could “win” a negotiation but push the other side into resentment or animosity, it might be wiser to pursue a more compromising style. If preserving the relationship will make you seem easily exploited, you may consider a more aggressive style. As an example of how the tone of a relationship in negotiations matters, people who feel good about the process of a job offer negotiation are more satisfied with their jobs and less likely to turn over a year later regardless of their actual outcomes from these negotiations. 42

Exhibit 8

The Negotiation

Once you’ve gathered your information, develop a strategy. You should determine your and the other side’s best alternative to a negotiated agreement, or  BATNA . Your BATNA determines the lowest value acceptable to you for a negotiated agreement. Any offer you receive that is higher than your BATNA is better than an impasse.

In nearly all cases, the party with superior alternatives will do better in a negotiation, so experts advise negotiators to solidify their BATNA prior to any interaction. 43  There is an interesting exception to this general rule—negotiators with absolutely no alternative to a negotiated agreement sometimes “go for broke” since they don’t even consider what would happen if the negotiation falls through. 44  Think carefully about what the other side is willing to give up. People who underestimate their opponent’s willingness to give on key issues before the negotiation even starts end up with lower outcomes. 45  Conversely, you shouldn’t expect success in your negotiation effort unless you’re able to make the other side an offer it finds more attractive than its BATNA.

DEFINITION OF GROUND RULES Once you’ve done your planning and developed a strategy, you’re ready to define with the other party the ground rules and procedures of the negotiation itself. Who will do the negotiating? Where will it take place? What time constraints, if any, will apply? To what issues will negotiation be limited? Will you follow a specific procedure if an impasse is reached? During this phase, the parties will exchange their initial proposals or demands.

CLARIFICATION AND JUSTIFICATION When you have exchanged initial positions, you and the other party will explain, amplify, clarify, bolster, and justify your original demands. This step needn’t be confrontational. Rather, it’s an opportunity for educating each other on the issues, why they are important, and how you arrived at your initial demands. Provide the other party with any documentation that supports your position.

BARGAINING AND PROBLEM SOLVING The essence of the negotiation process is the actual give-and-take in trying to hash out an agreement. This is where both parties need to make concessions.

CLOSURE AND IMPLEMENTATION The final step in the negotiation process is formalizing your agreement and developing procedures necessary for implementing and monitoring it. For major negotiations—from labor–management negotiations to bargaining over lease terms—this requires hammering out the specifics in a formal contract. For other cases, closure of the negotiation process is nothing more formal than a handshake.

Individual Differences in Negotiation Effectiveness

1. 5 Show how individual differences influence negotiations.

Are some people better negotiators than others? The answer is complex. Four factors influence how effectively individuals negotiate: personality, mood/emotions, culture, and gender.

PERSONALITY TRAITS IN NEGOTIATIONS Can you predict an opponent’s negotiating tactics if you know something about his or her personality? Because personality and negotiation outcomes are related but only weakly, the answer is, at best, “sort of.” 46  Most research has focused on the Big Five trait of agreeableness, for obvious reasons—agreeable individuals are cooperative, compliant, kind, and conflict-averse. We might think such characteristics make agreeable individuals easy prey in negotiations, especially distributive ones. The evidence suggests, however, that overall agreeableness is weakly related to negotiation outcomes. Why is this the case?

Career Objectives

How can I get a better job?

I feel like my career is at a standstill, and I want to talk to my boss about getting a more developmental assignment. How can I negotiate effectively for a better job position?

— Wei

Dear Wei:

You’re certainly starting out on the right foot. A lot of people focus on a salary as a way to achieve success and negotiate for the best short-run offer. There’s obviously an advantage to this strategy in the short run, but sustained career growth has better payoffs in the long run. Developing skills can help put you on track for multiple salary increases. A strong skill set from developmental assignments will also give you a better position for future negotiations because you will have more career options.

Long-term career negotiations based on developmental assignments also often are easier to bring up with a supervisor. That’s because salary negotiations are often a zero-sum situation, but career development negotiations can bring positive outcomes to both sides. When negotiating for a developmental assignment, make sure you emphasize a few points with your supervisor:

· When it comes to salary negotiations, either you get the money, or the company keeps the money. Given that, your interests and the interests of your managers are directly opposed. On the other hand, negotiating for developmental assignments usually means finding ways to improve not just your skills, but also your contribution to the company’s bottom line. You can, in complete honesty, frame the discussion around these mutual benefits.

· Let your supervisor know that you are interested in getting better at your job, and that you are motivated to improve through a developmental assignment. Asking your supervisor for opportunities to grow is a clear sign that you are an employee worth investing in.

· Be open to creative solutions. It’s possible that there are some idiosyncratic solutions (also called “I-deals”) for enhancing both your interests and those of your supervisor. One of the best things about an integrative bargaining situation like this is that you and your negotiation partner can find novel solutions that neither would have imagined separately.

Think strategically about your career, and you’ll likely find you can negotiate not just for a better paycheck tomorrow, but for a paycheck that keeps increasing in the years to come.

Sources: Y. Rofcanin, T. Kiefer, and K. Strauss, “How I-Deals Build Resources to Facilitate Reciprocation: Mediating Role of Positive Affective States,” Academy of Management Proceedings, August, 2014, DOI: 10.5465/AMBPP.2014.16096abstract; C. Liao, S. J. Wayne, and D. M. Rousseau, “Idiosyncratic Deals in Contemporary Organizations: A Qualitative and Meta-Analytical Review,” Journal of Organizational Behavior, October 16, 2014, DOI: 10.1002/job.1959; and V. Brenninkmeijer and M. Hekkert-Koning, “To Craft or Not to Craft,” Career Development International 20 (2015): 147–62.

The opinions provided here are of the managers and authors only and do not necessarily reflect those of their organizations. The authors or managers are not responsible for any errors or omissions, or for the results obtained from the use of this information. In no event will the authors or managers, or their related partnerships or corporations thereof, be liable to you or anyone else for any decision made or action taken in reliance on the opinions provided here.

It appears that the degree to which agreeableness, and personality more generally, affects negotiation outcomes depends on the situation. The importance of being extraverted in negotiations, for example, will very much depend on how the other party reacts to someone who is assertive and enthusiastic. One complicating factor for agreeableness is that it has two facets: The tendency to be cooperative and compliant is one, but so is the tendency to be warm and empathetic. 47  It may be that while the former is a hindrance to negotiating favorable outcomes, the latter helps. Empathy, after all, is the ability to take the perspective of another person and gain insight/understanding of him or her. We know perspective-taking benefits integrative negotiations, so perhaps the null effect for agreeableness is due to the two tendencies pulling against one another. If this is the case, then the best negotiator is a competitive but empathetic one, and the worst is a gentle but empathetic one.

The type of negotiations may matter as well. In one study, agreeable individuals reacted more positively and felt less stress (measured by their cortisol levels) in integrative negotiations than in distributive ones. Low levels of stress, in turn, made for more effective negotiation outcomes. 48  Similarly, in “hard-edged” distributive negotiations, where giving away information leads to a disadvantage, extraverted negotiators do less well because they tend to share more information than they should. 49

Self-efficacy is one individual-difference variable that consistently seems to relate to negotiation outcomes. 50  This is a fairly intuitive finding—it isn’t too surprising to hear that those who believe they will be more successful in negotiation situations tend to perform more effectively. It may be that individuals who are more confident stake out stronger claims, are less likely to back down from their positions, and exhibit confidence that intimidates others. Although the exact mechanism is not yet clear, it does seem that negotiators may benefit from trying to get a boost in confidence before going to the bargaining table.

Research suggests intelligence predicts negotiation effectiveness, but, as with personality, the effects aren’t especially strong. 51  In a sense, these weak links mean you’re not severely disadvantaged, even if you’re an agreeable extravert, when it’s time to negotiate. We all can learn to be better negotiators. 52

An Ethical Choice

Using Empathy to Negotiate More Ethically

You may have noticed that much of our advice for negotiating effectively depends on understanding the perspective and goals of the person with whom you are negotiating. Preparing checklists of your negotiation partner’s interests, likely tactics, and BATNA have all been shown to improve negotiation outcomes. Can these steps make you a more ethical negotiator as well? Studies suggest that they might.

Researchers asked respondents to indicate how much they tended to think about other people’s feelings and emotions and to describe the types of tactics they engaged in during a negotiation exercise. More empathetic individuals consistently engaged in fewer unethical negotiation behaviors like making false promises and manipulating information and emotions.

When considering how to improve your ethical negotiation behavior, follow these guidelines:

1. Try to understand your negotiation partner’s perspective. This isn’t just by understanding cognitively what the other person wants, but by empathizing with the emotional reaction he or she will likely have to the possible outcomes.

2. Be aware of your own emotions, because many moral reactions are fundamentally emotional. One study found that engaging in unethical negotiation strategies increased feelings of guilt, so by extension, feeling guilty in a negotiation may mean you are engaging in behavior you’ll regret later.

3. Beware of empathizing so much that you work against your own interests. Just because you try to understand the motives and emotional reactions of the other side does not mean you have to assume the other person is going to be honest and fair in return. So be on guard.

Sources: Based on T. R. Cohen, “Moral Emotions and Unethical Bargaining: The Differential Effects of Empathy and Perspective Taking in Deterring Deceitful Negotiation,” Journal of Business Ethics 94, no. 4 (2010): 569–79; and R. Volkema, D. Fleck, and A. Hofmeister, “Predicting Competitive-Unethical Negotiating Behavior and Its Consequences,” Negotiation Journal 26, no. 3 (2010): 263–86.

MOODS/EMOTIONS IN NEGOTIATIONS Do moods and emotions influence negotiation? They do, but the way they work depends on the emotion as well as the context. A negotiator who shows anger can induce concessions, for instance, because the other negotiator believes no further concessions from the angry party are possible. One factor that governs this outcome, however, is power—you should show anger in negotiations only if you have at least as much power as your counterpart. If you have less, showing anger actually seems to provoke “hardball” reactions from the other side. 53

Another factor is how genuine your anger is—“faked” anger, or anger produced from surface acting (see  Chapter 4 ), is not effective, but showing anger that is genuine (deep acting) is. 54  It also appears that having a history of showing anger, rather than sowing the seeds of revenge, actually induces more concessions because the other party perceives the negotiator as “tough.” 55  Finally, culture seems to matter. For instance, one study found that when East Asian participants showed anger, it induced more concessions than when the negotiator expressing anger was from the United States or Europe, perhaps because of the stereotype of East Asians as refusing to show anger. 56

Another relevant emotion is disappointment. Generally, a negotiator who perceives disappointment from his or her counterpart concedes more. In one study, Dutch students were given 100 chips to bargain over. Negotiators who expressed disappointment were offered 14 more chips than those who didn’t. In a second study, showing disappointment yielded an average concession of 12 chips. Unlike a show of anger, the relative power of the negotiators made no difference in either study. 57

Anxiety also appears to have an impact on negotiation. For example, one study found that individuals who experienced more anxiety about a negotiation used more deceptions in dealing with others. 58  Another study found that anxious negotiators expect lower outcomes, respond to offers more quickly, and exit the bargaining process more quickly, leading them to obtain worse outcomes. 59

As you can see, emotions—especially negative ones—matter to negotiation. Even emotional unpredictability affects outcomes; researchers have found that negotiators who express positive and negative emotions in an unpredictable way extract more concessions because this behavior makes the other party feel less in control. 60  As one negotiator put it, “Out of the blue, you may have to react to something you have been working on in one way, and then something entirely new is introduced, and you have to veer off and refocus.” 61

CULTURE IN NEGOTIATIONS Do people from different cultures negotiate differently? The simple answer is the obvious one: Yes, they do. However, there are many nuances in the way this works. It isn’t as simple as “these negotiators are the best”; indeed, success in negotiations depends on the context.

So what can we say about culture and negotiations? First, it appears that people generally negotiate more effectively within cultures than between them. For example, a Colombian is apt to do better negotiating with a Colombian than with a Sri Lankan. Second, it appears that in cross-cultural negotiations, it is especially important that the negotiators be high in openness. This suggests a good strategy is to choose cross-cultural negotiators who are high on openness to experience, and to avoid factors such as time pressure that tend to inhibit learning about the other party. 62

Finally, because emotions are culturally sensitive, negotiators need to be especially aware of the emotional dynamics in cross-cultural negotiation. One study, for example, explicitly compared how U.S. and Chinese negotiators reacted to an angry counterpart. Chinese negotiators increased their use of distributive negotiating tactics, whereas U.S. negotiators decreased their use of these tactics. That is, Chinese negotiators began to drive a harder bargain once they saw that their negotiation partner was becoming angry, whereas U.S. negotiators capitulated somewhat in the face of angry demands. Why the difference? It may be that individuals from East Asian cultures feel that using anger to get their way in a negotiation is not a legitimate tactic, so they refuse to cooperate when their opponents become upset. 63

GENDER DIFFERENCES IN NEGOTIATIONS There are many areas of organizational behavior (OB) in which men and women are not that different. Negotiation is not one of them. It seems fairly clear that men and women negotiate differently, men and women are treated differently by negotiation partners, and these differences affect outcomes (see OB Poll).

OB Poll Men Ask More

Source: A. Gouveia, “Why Americans Are Too Scared to Negotiate Salary,” San Francisco Chronicle, April 3, 2013, downloaded May 30, 2013 from  http://www.sfgate.com/jobs/ .

A popular stereotype is that women are more cooperative and pleasant in negotiations than men. Though this is controversial, there is some merit to it. Men tend to place a higher value on status, power, and recognition, whereas women tend to place a higher value on compassion and altruism. Moreover, women do tend to value relationship outcomes more than men, and men tend to value economic outcomes more than women. 64

These differences affect both negotiation behavior and negotiation outcomes. Compared to men, women tend to behave in a less assertive, less self-interested, and more accommodating manner. As one review concluded, women “are more reluctant to initiate negotiations, and when they do initiate negotiations, they ask for less, are more willing to accept [the] offer, and make more generous offers to their negotiation partners than men do.” 65  A study of MBA students at Carnegie-Mellon University found that the male students took the step of negotiating their first offer 57 percent of the time, compared to 4 percent for the female students. The net result? A $4,000 difference in starting salaries. 66

One comprehensive literature review suggests that the tendency for men to receive better negotiation outcomes in some situations does not cover all situations. 67  Indeed, evidence suggested women and men bargained more equally in certain situations, women sometimes outperformed men, and men and women obtained more nearly equal outcomes when negotiating on behalf of someone else. In other words, everyone was better at advocating for others than they were at advocating for themselves.

Factors that increased the predictability of negotiations also tended to reduce gender differences. When the range of negotiation settlements was well defined, men and women were more equal in outcomes. When more experienced negotiators were at the table, men and women were also more nearly equivalent. The study authors proposed that when situations are more ambiguous, with less well-defined terms and less experienced negotiators, stereotypes may have stronger effects, leading to larger gender differences in outcomes.

So what can be done to change this troublesome state of affairs? First, organizational culture plays a role. If an organization, even unwittingly, reinforces gender-stereotypic behaviors (men negotiating competitively, women negotiating cooperatively), it will negatively affect negotiations when anyone goes against stereotype. Men and women need to know that it is acceptable for each to show a full range of negotiating behaviors. Thus, a female negotiator who behaves competitively and a male negotiator who behaves cooperatively need to know that they are not violating expectations. Making sure negotiations are designed to focus on well-defined and work-related terms also has promise for reducing gender differences by minimizing the ambiguous space for stereotypes to operate. This focus on structure and work relevance also obviously helps focus negotiations on factors that will improve the organization’s performance.

Research is less clear on whether women can improve their outcomes by showing some gender-stereotypic behaviors. Researchers Laura Kray and colleagues suggested that female negotiators who were instructed to behave with “feminine charm” (be animated in body movements, make frequent eye contact with their partners, smile, laugh, be playful, and frequently compliment their partners) did better in negotiations than women not so instructed. These behaviors didn’t work for men. 68

Other researchers disagree and argue that what can best benefit women is to break down gender stereotypes for the individuals who hold them. 69  It’s possible this is a short-term/long-term situation: In the short term, women can gain an advantage in negotiation by being both assertive and charming, but in the long term, their interests are best served by eliminating these sorts of sex role stereotypes.

Evidence suggests women’s own attitudes and behaviors hurt them in negotiations. Managerial women demonstrate less confidence than men in anticipation of negotiating and are less satisfied with their performance afterward, even when their performance and the outcomes they achieve are similar to those for men. 70  Women are also less likely to see an ambiguous situation as an opportunity for negotiation. Women may unduly penalize themselves by failing to engage in negotiations that would be in their best interests. Some research suggests that women are less aggressive in negotiations because they are worried about backlash from others.

Negotiating in a Social Context

1. 6 Assess the roles and functions of third-party negotiations.

We have mostly been discussing negotiations that occur among parties that meet only once, and in isolation from other individuals. However, in organizations, many negotiations are open-ended and public. When you are trying to figure out who in a work group should do a tedious task, negotiating with your boss to get a chance to travel internationally, or asking for more money for a project, there’s a social component to the negotiation. You are probably negotiating with someone you already know and will work with again, and the negotiation and its outcome are likely to be topics people will talk about. To really understand negotiations in practice, then, we must consider the social factors of reputation and relationships.

REPUTATION Your reputation is the way other people think and talk about you. When it comes to negotiation, having a reputation for being trustworthy matters. In short, trust in a negotiation process opens the door to many forms of integrative negotiation strategies that benefit both parties. 71  The most effective way to build trust is to behave in an honest way across repeated interactions. Then, others feel more comfortable making open-ended offers with many different outcomes. This helps to achieve win-win outcomes, since both parties can work to achieve what is most important to themselves while still benefitting the other party.

Sometimes we either trust or distrust people based on word-of-mouth about a person’s characteristics. What type of characteristics help a person develop a trustworthy reputation? A combination of competence and integrity. 72  Negotiators higher in self-confidence and cognitive ability are seen as more competent by negotiation partners. 73  They are also considered better able to accurately describe a situation and their own resources, and more credible when they make suggestions for creative solutions to impasses. Individuals who have a reputation for integrity can also be more effective in negotiations. 74  They are seen as more likely to keep their promises and present information accurately, so others are more willing to accept their promises as part of a bargain. This opens many options for the negotiator that wouldn’t be available to someone who is not seen as trustworthy. Finally, individuals who have higher reputations are better liked and have more friends and allies—in other words, they have more social resources, which may give them more understood power in negotiations.

RELATIONSHIPS There is more to repeated negotiations than just reputation. The social, interpersonal component of relationships with repeated negotiations means that individuals go beyond valuing what is simply good for themselves and instead start to think about what is best for the other party and the relationship as a whole. 75  Repeated negotiations built on a foundation of trust also broaden the range of options, since a favor or concession today can be offered in return for some repayment further down the road. 76  Repeated negotiations also facilitate integrative problem solving. This occurs partly because people begin to see their negotiation partners in a more personal way over time and come to share emotional bonds. 77  Repeated negotiations also make integrative approaches more workable because a sense of trust and reliability has been built up. 78

In sum, it’s clear that an effective negotiator needs to think about more than just the outcomes of a single interaction. Negotiators who consistently act in a way that demonstrates competence, honesty, and integrity will usually have better outcomes in the long run.

Third-Party Negotiations

To this point, we’ve discussed bargaining in terms of direct negotiations. Occasionally, however, individuals or group representatives reach a stalemate and are unable to resolve their differences through direct negotiations. In such cases, they may turn to a third party to help them find a solution. There are three basic third-party roles: mediator, arbitrator, and conciliator.

 mediator  is a neutral third party who facilitates a negotiated solution by using reasoning and persuasion, suggesting alternatives, and the like. Mediators are widely used in labor–management negotiations and in civil court disputes. Their overall effectiveness is fairly impressive. For example, the Equal Employment Opportunity Commission (EEOC) reported a settlement rate through mediation at 72.1 percent. 79  But the situation is the key to whether mediation will succeed; the conflicting parties must be motivated to bargain and resolve their conflict. In addition, conflict intensity can’t be too high; mediation is most effective under moderate levels of conflict. Finally, perceptions of the mediator are important; to be effective, the mediator must be perceived as neutral and noncoercive.

An  arbitrator  is a third party with the authority to dictate an agreement. Arbitration can be voluntary (requested by the parties) or compulsory (forced on the parties by law or contract). The big plus of arbitration over mediation is that it always results in a settlement. Whether there is a downside depends on how heavy-handed the arbitrator appears. If one party is left feeling overwhelmingly defeated, that party is certain to be dissatisfied and the conflict may resurface at a later time.

 conciliator  is a trusted third party who provides an informal communication link between the negotiator and the opponent. This role was made famous by Robert Duval in the first Godfather film. As Don Corleone’s adopted son and a lawyer by training, Duval acted as an intermediary between the Corleones and the other Mafioso families. Comparing conciliation to mediation in terms of effectiveness has proven difficult because the two overlap a great deal. In practice, conciliators typically act as more than mere communication conduits. They also engage in fact-finding, interpret messages, and persuade disputants to develop agreements.

Summary

While many people assume conflict lowers group and organizational performance, this assumption is frequently incorrect. Conflict can be either constructive or destructive to the functioning of a group or unit. Levels of conflict can be either too high or too low to be constructive. Either extreme hinders performance. An optimal level is one that prevents stagnation, stimulates creativity, allows tensions to be released, and initiates the seeds of change without being disruptive or preventing the coordination of activities.

1

2

A Change of Tune

While most of us are accustomed to instant access to nearly any music we want over the Internet, digital music distribution is actually a relatively new and volatile market. As recently as 2005, almost all music sales came from physical media like compact discs. By 2015, however, digital downloads overtook CDs in revenue and legal streaming services comprised nearly a third of the overall music market. In Sweden and South Korea, as an extreme example, streaming music services provided 90 percent of recorded music revenues. This rapid shift for the industry in a short period of time has created ongoing high-stakes negotiations.

When Daniel Ek (pictured here) started Spotify in 2006, now one of the most successful streaming services, the music producers were suspicious that his service would lower their revenues. Ek claimed his intention was not to cheat the system, but to beat music pirates at their own game by offering a service that made legally listening to tracks easier and more pleasant than illegal downloads. He noted, “It’s not like people want to be pirates. They just want a great experience. So we started sketching what that would look like.” Through many conflicts and negotiations, Ek maintained that Spotify offered greater profits for everyone in the music industry, and eventually the industry’s players agreed.

The basic terms between record companies and Spotify are simple—Spotify acquires the right to distribute music to fans by paying royalties to the copyright holders. In turn, Spotify can make money from either running advertisements or charging users. To maintain legal access to the music, Ek must continually negotiate with all the recording companies that administer copyrights. Spotify remains completely responsible for ensuring adherence to copyright laws.

This seemingly straightforward negotiation process of exchanging rights for revenues is actually quite complex in practice, especially since pricing models are still being worked out by the players in the industry. Spotify also needs to demonstrate to recording companies that cooperating with streaming services creates better value for them than different music distribution methods, even as prices change. The possibilities for lucrative negotiations are high—but so are the possibilities for conflict.

A number of factors have strengthened Spotify’s bargaining position. For one, any record label that walks away from a deal with Spotify risks losing access to many listeners who rely exclusively on streaming services for their music. For another, it’s better for record labels to make money through an agreement with Spotify than to make nothing from pirated copies of their music.

At the same time, the major labels have their own bargaining resources. First and foremost, if media companies won’t deal with Spotify, the service will quickly lose its appeal. Second and related to this, if Spotify cannot obtain music rights for popular artists, disappointed listeners may easily turn to other services and threaten its existence. The highest-profile defector so far is Taylor Swift, who moved from Spotify to another streaming service that offered her a higher rate of return on plays. The impact of the music star’s defection isn’t completely known but may be costly since the decision was very public in the media.

The stakes of these negotiations are high. One thing is for sure: in such a turbulent market, there will surely be a lot of time spent at the bargaining table in the years to come.

Sources: J. Seabrook, “Revenue Streams,” The New Yorker, November 24, 2014,  http://www​.newyorker.com/magazine/2014/11/24/revenue-streams ; S. Dredge, “Ministry of Sound Boss Attacks Major Labels for Streaming ‘Short Termism,’” The Guardian, May 15, 2015,  http://www.theguardian.com/technology/2015/may/15/ministry-of-sound-major-labels-​ music-streaming-spotify ; and N. Prins “Spotify Racks Up a Streaming Milestone: Artists Settle in for the Fight,” Forbes, May 14, 2015,  http://www.forbes.com/sites/nomiprins/ 2015/05/14/spotify-racks-up-a-streaming-milestone-artists-settle-in-for-the-fight/ .

As the music industry example demonstrates, forms of conflict and negotiation are often complex—and controversial—interpersonal processes. While we generally see conflict as a negative topic and negotiation as a positive one, what we deem positive or negative often depends on our perspective.

Conflict can turn personal. It can create chaotic conditions that make it nearly impossible for employees to work as a team. However, conflict also has a less well-known positive side. We’ll explain the difference between negative and positive conflicts in this chapter and provide a guide to help you understand how conflicts develop. We’ll also present the specifics about the topic closely akin to conflict: negotiation.

A Definition of Conflict

1. 1 Describe the three types of conflict and the three loci of conflict.

There has been no shortage of definitions of conflict, 1  but common to most is the idea that conflict is a perception. If no one is aware of a conflict, then it is generally agreed no conflict exists. Also needed to begin the conflict process are opposition or incompatibility, and interaction.

We define  conflict  broadly as a process that begins when one party perceives another party has affected or is about to negatively affect something the first party cares about. Conflict describes the point in ongoing activity when interaction becomes disagreement. People experience a wide range of conflicts in organizations over an incompatibility of goals, differences in interpretations of facts, disagreements over behavioral expectations, and the like. Our definition covers the full range of conflict levels, from overt and violent acts to subtle forms of disagreement.

There is no consensus over the role of conflict in groups and organizations. In the past, researchers tended to argue about whether conflict was uniformly good or bad. Such simplistic views eventually gave way to approaches recognizing that not all conflicts are the same and that different types of conflict have different effects.

Contemporary perspectives differentiate types of conflict based on their effects.  Functional conflict  supports the goals of the group, improves its performance, and is thus a constructive form of conflict. For example, a debate among members of a work team about the most efficient way to improve production can be functional if unique points of view are discussed and compared openly. Conflict that hinders group performance is destructive or  dysfunctional conflict . A highly personal struggle for control in a team that distracts from the task at hand is dysfunctional.  Exhibit 14-1  provides an overview depicting the effect of levels of conflict. To understand different types of conflict, we will discuss next the types of conflict and the loci of conflict.

Types of Conflict

One means of understanding conflict is to identify the type of disagreement, or what the conflict is about. Is it a disagreement about goals? Is it about people who just rub one another the wrong way? Or is it about the best way to get things done? Although each conflict is unique, researchers have classified conflicts into three categories: task, relationship, or process.  Task conflict  relates to the content and goals of the work.  Relationship conflict  focuses on interpersonal relationships.  Process conflict  is about how the work gets done.

Studies demonstrate that relationship conflicts, at least in work settings, are almost always dysfunctional. 2  Why? It appears that the friction and interpersonal hostilities inherent in relationship conflicts increase personality clashes and decrease mutual understanding, which hinders the completion of organizational tasks. Of the three types, relationship conflicts also appear to be the most psychologically exhausting to individuals. 3  Because they tend to revolve around personalities, you can see how relationship conflicts can become destructive. After all, we can’t expect to change our coworkers’ personalities, and we would generally take offense at criticisms directed at who we are as opposed to how we behave.

Exhibit 1

Conflict and Unit Performance

While scholars agree that relationship conflict is dysfunctional, there is considerably less agreement about whether task and process conflicts are functional. Early research suggested that task conflict within groups correlated to higher group performance, but a review of 116 studies found that generalized task conflict was essentially unrelated to group performance. However, there were factors of the conflict that could create a relationship between conflict and performance. 4

One such factor was whether the conflict included top management or occurred lower in the organization. Task conflict among top management teams was positively associated with performance, whereas conflict lower in the organization was negatively associated with group performance, perhaps because people in top positions may not feel as threatened in their organizational roles by conflict. This review also found that it mattered whether other types of conflict were occurring at the same time. If task and relationship conflict occurred together, task conflict was more likely negative, whereas if task conflict occurred by itself, it more likely was positive. Also, some scholars have argued that the strength of conflict is important—if task conflict is very low, people aren’t really engaged or addressing the important issues. If task conflict is too high, however, infighting will quickly degenerate into relationship conflict. Moderate levels of task conflict may thus be optimal. Supporting this argument, one study in China found that moderate levels of task conflict in the early development stage increased creativity in groups, but high levels decreased team performance. 5

Finally, the personalities of the teams appear to matter. One study demonstrated that teams of individuals who are, on average, high in openness and emotional stability are better able to turn task conflict into increased group performance. 6  The reason may be that open and emotionally stable teams can put task conflict in perspective and focus on how the variance in ideas can help solve the problem, rather than letting it degenerate into relationship conflicts.

What about process conflict? Researchers found that process conflicts are about delegation and roles. Conflicts over delegation often revolve around the perception of some members as shirking, and conflicts over roles can leave some group members feeling marginalized. Thus, process conflicts often become highly personalized and quickly devolve into relationship conflicts. It’s also true, of course, that arguing about how to do something takes time away from actually doing it. We’ve all been part of groups in which the arguments and debates about roles and responsibilities seem to go nowhere.

Loci of Conflict

Another way to understand conflict is to consider its locus, or the framework within which the conflict occurs. Here, too, there are three basic types. Dyadic conflict  is conflict between two people.  Intragroup conflict  occurs within a group or team.  Intergroup conflict  is conflict between groups or teams.

Nearly all the literature on task, relationship, and process conflict considers intragroup conflict (within the group). That makes sense given that groups and teams often exist only to perform a particular task. However, it doesn’t necessarily tell us all we need to know about the context and outcomes of conflict. For example, research has found that for intragroup task conflict to positively influence performance within the team, it is important that the team has a supportive climate in which mistakes aren’t penalized and every team member “[has] the other’s back.” 7  But is this concept applicable to the effects of intergroup conflict? Think about, say, NFL football. As we said, for a team to adapt and improve, perhaps a certain amount of intragroup conflict (but not too much) is good for team performance, especially when the team members support one another. But would we care whether members from one team supported members from another team? Probably not. In fact, if groups are competing with one another so that only one team can “win,” interteam conflict seems almost inevitable. Still, it must be managed. Intense intergroup conflict can be quite stressful to group members and might well affect the way they interact. One study found, for example, that high levels of conflict between teams caused individuals to focus on complying with norms within their teams. 8

It may surprise you that individuals become most important in intergroup conflicts. One study that focused on intergroup conflict found an interplay between an individual’s position within a group and the way that individual managed conflict between groups. Group members who were relatively peripheral in their own group were better at resolving conflicts between their group and another one. But this happened only when those peripheral members were still accountable to their group. 9  Thus, being at the core of your workgroup does not necessarily make you the best person to manage conflict with other groups.

Another intriguing question about loci is whether conflicts interact with or buffer one another. Assume, for example, that Jia and Marcus are on the same team. What happens if they don’t get along interpersonally (dyadic conflict) and their team also has high task conflict? Progress might be halted. What happens to their team if two other team members, Shawna and Justin, do get along well? The team might still be dysfunctional, or the positive relationship might prevail.

Thus, understanding functional and dysfunctional conflict requires not only that we identify the type of conflict; we also need to know where it occurs. It’s possible that while the concepts of task, relationship, and process conflict are useful in understanding intragroup or even dyadic conflict, they are less useful in explaining the effects of intergroup conflict. But how do we make conflict as productive as possible? A better understanding of the conflict process, discussed next, will provide insight about potential controllable variables.

The Conflict Process

1. 2 Outline the conflict process.

The  conflict process  has five stages: potential opposition or incompatibility, cognition and personalization, intentions, behavior, and outcomes (see Exhibit 14-2 ).

Stage I: Potential Opposition or Incompatibility

The first stage of conflict is the appearance of conditions—causes or sources—that create opportunities for it to arise. These conditions need not lead directly to conflict, but one of them is necessary if it is to surface. We group the conditions into three general categories: communication, structure, and personal variables.

COMMUNICATION Susan had worked in supply chain management at Bristol-Myers Squibb for three years. She enjoyed her work largely because her manager, Harry, was a great boss. Then Harry was promoted and Chuck took his place. Six months later, Susan says her job is frustrating. “Harry and I were on the same wavelength. It’s not that way with Chuck. He tells me something, and I do it. Then he tells me I did it wrong. I think he means one thing but says something else. It’s been like this since the day he arrived. I don’t think a day goes by when he isn’t yelling at me for something. You know, there are some people you just find it easy to communicate with. Well, Chuck isn’t one of those!”

Exhibit 2

The Conflict Process

Susan’s comments illustrate that communication can be a source of conflict. 10  Her experience represents the opposing forces that arise from semantic difficulties, misunderstandings, and “noise” in the communication channel (see  Chapter 11 ). These factors, along with jargon and insufficient information, can be barriers to communication and potential antecedent conditions to conflict. The potential for conflict has also been found to increase with too little or too much communication. Communication is functional up to a point, after which it is possible to overcommunicate, increasing the potential for conflict.

STRUCTURE Charlotte is a salesperson and Mercedes is the company credit manager at Portland Furniture Mart, a large discount furniture retailer. The women have known each other for years and have much in common: They live two blocks apart, and their oldest daughters attend the same middle school and are best friends. If Charlotte and Mercedes had different jobs, they might be friends, but at work they constantly disagree. Charlotte’s job is to sell furniture, and she does it well. Most of her sales are made on credit. Because Mercedes’s job is to minimize credit losses, she regularly has to turn down the credit applications of Charlotte’s customers. It’s nothing personal between the women; the requirements of their jobs just bring them into conflict.

The conflicts between Charlotte and Mercedes are structural in nature. The term structure in this context includes variables such as size of group, degree of specialization in tasks assigned to group members, jurisdictional clarity, member–goal compatibility, leadership styles, reward systems, and degree of dependence between groups. The larger the group and the more specialized its activities, the greater the likelihood of conflict. Tenure and conflict are inversely related, meaning that the longer a person stays with an organization, the less likely conflict becomes. Therefore, the potential for conflict is greatest when group members are younger and when turnover is high.

PERSONAL VARIABLES Have you ever met someone you immediately disliked? Perhaps you disagreed with most of his opinions. Even insignificant characteristics—his voice, facial expressions, or word choice—may have annoyed you. Sometimes our impressions are negative. When you have to work with people you don’t like, the potential for conflict arises.

Our last category of potential sources of conflict is personal variables, which include personality, emotions, and values. People high in the personality traits of disagreeableness, neuroticism, or self-monitoring (see  Chapter 5 ) are prone to tangle with other people more often—and to react poorly when conflicts occur. 11  Emotions can cause conflict even when they are not directed at others. An employee who shows up to work irate from her hectic morning commute may carry that anger into her workday, which can result in a tension-filled meeting. 12  Furthermore, differences in preferences and values can generate higher levels of conflict. For example, a study in Korea found that when group members didn’t agree about their desired achievement levels, there was more task conflict; when group members didn’t agree about their desired interpersonal closeness, there was more relationship conflict; and when group members didn’t have similar desires for power, there was more conflict over status. 13

Stage II: Cognition and Personalization

If the conditions cited in Stage I negatively affect something one party cares about, then the potential for opposition or incompatibility becomes actualized in the second stage.

As we noted in our definition of conflict, one or more of the parties must be aware that antecedent conditions exist. However, just because a disagreement is a  perceived conflict  does not mean it is personalized. It is at the  felt conflict  level, when individuals become emotionally involved, that they experience anxiety, tension, frustration, or hostility.

Stage II is important because it’s where conflict issues tend to be defined, where the parties decide what the conflict is about. 14  The definition of conflict is important because it delineates the set of possible settlements. Most evidence suggests that people tend to default to cooperative strategies in interpersonal interactions unless there is a clear signal that they are faced with a competitive person. However, if our salary disagreement is a zero-sum situation (the increase in pay you want means there will be that much less in the raise pool for me), I am going to be far less willing to compromise than if I can frame the conflict as a potential win–win situation (the dollars in the salary pool might be increased so both of us could get the added pay we want).

Second, emotions play a major role in shaping perceptions. 15  Negative emotions allow us to oversimplify issues, lose trust, and put negative interpretations on the other party’s behavior. 16  In contrast, positive feelings increase our tendency to see potential relationships among elements of a problem, take a broader view of the situation, and develop innovative solutions. 17

Stage III: Intentions

Intentions  intervene between people’s perceptions and emotions, and their overt behavior. They are decisions to act in a given way. 18

Intentions are a distinct stage because we have to infer the other’s intent to know how to respond to behavior. Many conflicts escalate simply because one party attributes the wrong intentions to the other. There is slippage between intentions and behavior, so behavior does not always accurately reflect a person’s intentions.

Exhibit 14-3  represents one way to identify the primary conflict-handling intentions. Using two dimensions—assertiveness (the degree to which one party attempts to satisfy his or her own concerns) and cooperativeness (the degree to which one party attempts to satisfy the other party’s concerns)—we can identify five conflict-handling intentions: competing (assertive and uncooperative), collaborating (assertive and cooperative), avoiding (unassertive and uncooperative), accommodating (unassertive and cooperative), and compromising (midrange on both assertiveness and cooperativeness). 19

Exhibit 3

Dimensions of Conflict-Handling Intentions

Source: Figure from “Conflict and Negotiation Processes in Organizations” by K. Thomas in M. D. Dunnette and L. M. Hough (eds.), Handbook of Industrial and Organizational Psychology, 2/e, vol. 3 (Palo Alto, CA: Consulting Psychologists Press, 1992), 668. Used with permission.

COMPETING When one person seeks to satisfy his or her own interests regardless of the impact on the other parties in the conflict, that person is  competing . We are more apt to compete when resources are scarce.

COLLABORATING When parties in conflict each desire to fully satisfy the concerns of all parties, there is cooperation and a search for a mutually beneficial outcome. In  collaborating , parties intend to solve a problem by clarifying differences rather than by accommodating various points of view. If you attempt to find a win–win solution that allows both parties’ goals to be completely achieved, that’s collaborating.

AVOIDING A person may recognize a conflict exists and want to withdraw from or suppress it. Examples of  avoiding  include trying to ignore a conflict and keeping away from others with whom you disagree.

ACCOMMODATING A party who seeks to appease an opponent may be willing to place the opponent’s interests above his or her own, sacrificing to maintain the relationship. We refer to this intention as  accommodating . Supporting someone else’s opinion despite your reservations about it, for example, is accommodating.

COMPROMISING In  compromising , there is no winner or loser. Rather, there is a willingness to ration the object of the conflict and accept a solution with incomplete satisfaction of both parties’ concerns. The distinguishing characteristic of compromising, therefore, is that each party intends to give up something.

Stage IV: Behavior

When most people think of conflict, they tend to focus on Stage IV because this is where conflicts become visible. The behavior stage includes statements, actions, and reactions made by conflicting parties, usually as overt attempts to implement their own intentions. As a result of miscalculations or unskilled enactments, overt behaviors sometimes deviate from original intentions. 20

Stage IV is a dynamic process of interaction. For example, you make a demand on me, I respond by arguing, you threaten me, I threaten you back, and so on.  Exhibit 14-4  provides a way of visualizing conflict behavior. All conflicts exist somewhere along this continuum. At the lower end are conflicts characterized by subtle, indirect, and highly controlled forms of tension, such as a student challenging a point the instructor has made. Conflict intensities escalate as they move upward along the continuum until they become highly destructive. Strikes, riots, and wars clearly fall in this upper range. Conflicts that reach the upper ranges of the continuum are almost always dysfunctional. Functional conflicts are typically confined to the lower range of the continuum.

Exhibit 4

Conflict-Intensity Continuum

Sources: Based on S. P. Robbins, Managing Organizational Conflict: A Nontraditional Approach (Upper Saddle River, NJ: Prentice Hall, 1974), 93–97; and F. Glasi, “The Process of Conflict Escalation and the Roles of Third Parties,” in G. B. J. Bomers and R. Peterson (eds.), Conflict Management and Industrial Relations (Boston: Kluwer-Nijhoff, 1982), 119–40.

Intentions that are brought into a conflict are eventually translated into behaviors. Competing brings out active attempts to contend with team members, and more individual effort to achieve ends without working together. Collaborating creates investigation of multiple solutions with other members of the team and trying to find a solution that satisfies all parties as much as possible. Avoidance is seen in behavior like refusals to discuss issues and reductions in effort toward group goals. People who accommodate put their relationships ahead of the issues in the conflict, deferring to others’ opinions and sometimes acting as a subgroup with them. Finally, when people compromise, they both expect to (and do) sacrifice parts of their interests, hoping that if everyone does the same, an agreement will sift out.

A review that examined the effects of the four sets of behaviors across multiple studies found that openness and collaborating were both associated with superior group performance, whereas avoiding and competing strategies were associated with significantly worse group performance. 21  These effects were nearly as large as the effects of relationship conflict. This further demonstrates that it is not just the existence of conflict or even the type of conflict that creates problems, but rather the ways people respond to conflict and manage the process once conflicts arise.

If a conflict is dysfunctional, what can the parties do to de-escalate it? Or, conversely, what options exist if conflict is too low to be functional and needs to be increased? This brings us to techniques of  conflict management  Exhibit 14-5  lists the major resolution and stimulation techniques that allow managers to control conflict levels. We have already described several as conflict-handling intentions. Under ideal conditions, a person’s intentions should translate into comparable behaviors.

Exhibit 5

Conflict Management Techniques

Stage V: Outcomes

The action–reaction interplay between conflicting parties creates consequences. As our model demonstrates (see  Exhibit 14-1 ), these outcomes may be functional if the conflict improves the group’s performance, or dysfunctional if it hinders performance.

FUNCTIONAL OUTCOMES How might conflict act as a force to increase group performance? It is hard to visualize a situation in which open or violent aggression could be functional. But it’s possible to see how low or moderate levels of conflict could improve group effectiveness. Note that all our examples focus on task and process conflicts and exclude the relationship variety.

Conflict is constructive when it improves the quality of decisions, stimulates creativity and innovation, encourages interest and curiosity among group members, provides the medium for problems to be aired and tensions released, and fosters self-evaluation and change. Mild conflicts also may generate energizing emotions so members of groups become more active, energized, and engaged in their work. 22

DYSFUNCTIONAL OUTCOMES The destructive consequences of conflict on the performance of a group or an organization are generally well known: Uncontrolled opposition breeds discontent, which acts to dissolve common ties and eventually leads to the destruction of the group. And, of course, a substantial body of literature documents how dysfunctional conflicts can reduce group effectiveness. 23  Among the undesirable consequences are poor communication, reductions in group cohesiveness, and subordination of group goals to the primacy of infighting among members. All forms of conflict—even the functional varieties—appear to reduce group member satisfaction and trust. 24  When active discussions turn into open conflicts between members, information sharing between members decreases significantly. 25  At the extreme, conflict can bring group functioning to a halt and threaten the group’s survival.

MANAGING FUNCTIONAL CONFLICT If managers recognize that in some situations conflict can be beneficial, what can they do to manage conflict effectively in their organizations? In addition to knowing the principles of conflict motivation we just discussed, there are some practical guidelines for managers.

First, one of the keys to minimizing counterproductive conflicts is recognizing when there really is a disagreement. Many apparent conflicts are due to people using different verbiage to discuss the same general course of action. For example, someone in marketing might focus on “distribution problems,” while someone from operations will talk about “supply chain management” to describe essentially the same issue. Successful conflict management recognizes these different approaches and attempts to resolve them by encouraging open, frank discussion focused on interests rather than issues. Another approach is to have opposing groups pick parts of the solution that are most important to them and then focus on how each side can get its top needs satisfied. Neither side may get exactly what it wants, but each side will achieve the most important parts of its agenda. 26

Third, groups that resolve conflicts successfully discuss differences of opinion openly and are prepared to manage conflict when it arises. 27  The most disruptive conflicts are those that are never addressed directly. An open discussion makes it much easier to develop a shared perception of the problems at hand; it also allows groups to work toward a mutually acceptable solution. Fourth, managers need to emphasize shared interests in resolving conflicts, so groups that disagree with one another don’t become too entrenched in their points of view and start to take the conflicts personally. Groups with cooperative conflict styles and a strong underlying identification with the overall group goals are more effective than groups with a competitive style. 28

Differences across countries in conflict resolution strategies may be based on collectivistic tendencies and motives. 29  Collectivist cultures see people as deeply embedded in social situations, whereas individualist cultures see them as autonomous. As a result, collectivists are more likely to seek to preserve relationships and promote the good of the group as a whole.  They will avoid the direct expression of conflict, preferring indirect methods for resolving differences of opinion. Collectivists may also be more interested in demonstrations of concern and working through third parties to resolve disputes, whereas individualists will be more likely to confront differences of opinion directly and openly.

Some research supports this theory. Compared to collectivist Japanese negotiators, their more individualist U.S. counterparts are more likely to see offers as unfair and to reject them. Another study revealed that whereas U.S. managers were more likely to use competing tactics in the face of conflicts, compromising and avoiding were the most preferred methods of conflict management in China. 30   Interview data, however, suggest that top management teams in Chinese high-technology firms prefer collaboration even more than compromising and avoiding. 31

Cross-cultural negotiations can also create issues of trust. 32  One study of Indian and U.S. negotiators found that respondents reported having less trust in their cross-culture negotiation counterparts.  The lower level of trust was associated with less discovery of common interests between parties, which occurred because cross-culture negotiators were less willing to disclose and solicit information. Another study found that both U.S. and Chinese negotiators tended to have an ingroup bias, which led them to favor negotiating partners from their own cultures. For Chinese negotiators, this was particularly true when accountability requirements were high.

Having considered conflict—its nature, causes, and consequences—we now turn to negotiation, which often resolves conflict.

 Watch It!

If your professor has assigned this, go to the Assignments section of  mymanagementlab.com  to complete the video exercise titled  Gordon Law Group: Conflict and Negotiation .

Negotiation

1. 3 Contrast distributive and integrative bargaining.

Negotiation permeates the interactions of almost everyone in groups and organizations. There’s the obvious: Labor bargains with management. There’s the not-so-obvious: Managers negotiate with employees, peers, and bosses; salespeople negotiate with customers; purchasing agents negotiate with suppliers. And there’s the subtle: An employee agrees to cover for a colleague for a few minutes in exchange for a future benefit. In today’s loosely structured organizations, in which members work with colleagues over whom they have no direct authority and with whom they may not even share a common boss, negotiation skills are critical.

We can define  negotiation  as a process that occurs when two or more parties decide how to allocate scarce resources. 33  Although we commonly think of the outcomes of negotiation in one-shot economic terms, like negotiating over the price of a car, every negotiation in organizations also affects the relationship between negotiators and the way negotiators feel about themselves. 34  Depending on how much the parties are going to interact with one another, sometimes maintaining the social relationship and behaving ethically will be just as important as achieving an immediate outcome of bargaining. Note that we use the terms negotiation and bargaining interchangeably.

Bargaining Strategies

There are two general approaches to negotiation—distributive bargaining and integrative bargaining. 35  As  Exhibit 14-6  shows, they differ in their goal and motivation, focus, interests, information sharing, and duration of relationship. Let’s define each and illustrate the differences.

Exhibit 6

Distributive versus Integrative Bargaining

DISTRIBUTIVE BARGAINING You see a used car advertised for sale online that looks great. You go see the car. It’s perfect, and you want it. The owner tells you the asking price. You don’t want to pay that much. The two of you negotiate. The negotiating strategy you’re engaging in is called  distributive bargaining . Its identifying feature is that it operates under zero-sum conditions—that is, any gain I make is at your expense, and vice versa. Every dollar you can get the seller to cut from the car’s price is a dollar you save, and every dollar the seller can get from you comes at your expense. The essence of distributive bargaining is negotiating over who gets what share of a fixed pie. By  fixed pie , we mean a set amount of goods or services to be divvied up. When the pie is fixed, or the parties believe it is, they tend to bargain distributively.

The essence of distributive bargaining is depicted in  Exhibit 14-7 . Parties A and B represent two negotiators. Each has a target point that defines what he or she would like to achieve. Each also has a resistance point, which marks the lowest acceptable outcome—the point beyond which the party would break off negotiations rather than accept a less favorable settlement. The area between these two points makes up each party’s aspiration range. As long as there is some overlap between A’s and B’s aspiration ranges, there exists a settlement range in which each one’s aspirations can be met.

Exhibit 7

Staking Out the Bargaining Zone

When you are engaged in distributive bargaining, one of the best things you can do is make the first offer, and make it an aggressive one. Making the first offer shows power; individuals in power are much more likely to make initial offers, speak first at meetings, and thereby gain the advantage. Another reason this is a good strategy is the anchoring bias, mentioned in  Chapter 6 . People tend to fixate on initial information. Once that anchoring point has been set, they fail to adequately adjust it based on subsequent information. A savvy negotiator sets an anchor with the initial offer, and scores of negotiation studies show that such anchors greatly favor the person who sets them. 36

Say you have a job offer, and your prospective employer asks you what sort of starting salary you want. You’ve just been given a gift—you have a chance to set the anchor, meaning you should ask for the highest salary you think the employer could reasonably offer. Asking for a million dollars is only going to make most of us look ridiculous, which is why we suggest being on the high end of what you think is reasonable. Too often, we err on the side of caution, afraid of scaring off the employer and thus settling for far too little. It is possible to scare off an employer, and it’s true employers don’t like candidates to be assertive in salary negotiations, but liking isn’t the same as doing what it takes to hire or retain someone. 37  What happens much more often is that we ask for less than we could have obtained.

INTEGRATIVE BARGAINING Jake was a Chicago luxury boutique owned by Jim Wetzel and Lance Lawson. In the early days of the business, Wetzel and Lawson moved millions of dollars of merchandise from many up-and-coming designers. They developed such a good rapport that many designers would send allotments to Jake without requiring advance payment. When the economy soured in 2008, Jake had trouble selling inventory, and designers were not being paid for what they had shipped to the store. Despite the fact that many designers were willing to work with the store on a delayed payment plan, Wetzel and Lawson stopped returning their calls. Lamented one designer, Doo-Ri Chung, “You kind of feel this familiarity with people who supported you for so long. When they have cash-flow issues, you want to make sure you are there for them as well.” 38  Chung’s attitude shows the promise of  integrative bargaining . In contrast to distributive bargaining, integrative bargaining assumes that one or more of the possible settlements can create a win–win solution. Of course, as the Jake example shows, both parties must be engaged for integrative bargaining to work.

In terms of intraorganizational behavior, integrative bargaining is preferable to distributive bargaining because the former builds long-term relationships. Integrative bargaining bonds negotiators and allows them to leave the bargaining table feeling they have achieved a victory. Distributive bargaining, however, leaves one party a loser. It tends to build animosity and deepen divisions when people have to work together on an ongoing basis. Research shows that over repeated bargaining episodes, a losing party who feels positively about the negotiation outcome is much more likely to bargain cooperatively in subsequent negotiations.

Why, then, don’t we see more integrative bargaining in organizations? The answer lies in the conditions necessary for it to succeed. These include opposing parties who are open with information and candid about concerns, are sensitive to the other’s needs and trust, and maintain flexibility. 39  Because these conditions seldom exist in organizations, negotiations often take a win-at-any-cost dynamic.

Compromise may be your worst enemy in negotiating a win–win agreement. Compromising reduces the pressure to bargain integratively. After all, if you or your opponent caves in easily, no one needs to be creative to reach a settlement. People then settle for less than they could have obtained if they had been forced to consider the other party’s interests, trade off issues, and be creative. 40  Consider a classic example in which two siblings are arguing over who gets an orange. Unknown to them, one sibling wants the orange to drink the juice, whereas the other wants the orange peel to bake a cake. If one capitulates and gives the other the orange, they will not be forced to explore their reasons for wanting the orange, and thus they will never find the win–win solution: They could each have the orange because they want different parts.

MYTH OR SCIENCE?

Teams Negotiate Better Than Individuals in Collectivistic Cultures

According to a recent study, this statement appears to be false.

In general, the literature has suggested that teams negotiate more effectively than individuals negotiating alone. Some evidence indicates that team negotiations create more ambitious goals, and that teams communicate more with each other than individual negotiators do.

Common sense suggests that if this is indeed the case, it is especially true in collectivistic cultures, where individuals are more likely to think of collective goals and be more comfortable working in teams. A study of the negotiation of teams in the United States and in Taiwan, however, suggests that this common sense is wrong. The researchers conducted two studies comparing two-person teams with individual negotiators. They defined negotiating effectiveness as the degree to which the negotiation produced an optimal outcome for both sides. U.S. teams did better than solo individuals in both studies. In Taiwan, solo individuals did better than teams.

Why did this happen? The researchers determined that in Taiwan norms respecting harmony already exist, and negotiating in teams only amplifies that tendency. This poses a problem because when norms for cooperation are exceptionally high, teams “satisfice” (settle for a satisfactory, but less than optimal, solution) to avoid conflict. When Taiwanese individuals negotiate solo, at least they can clearly represent their own interests. In contrast, because the United States is individualistic, solo negotiators may focus on their own interests, which makes reaching integrative solutions more difficult. When Americans negotiate in teams, they become less inclined to focus on individual interests and therefore can reach solutions.

Overall, these findings suggest that negotiating individually works best in collectivistic cultures, and negotiating in teams works best in individualistic cultures.

Sources: Based on M. J. Gelfand et al., “Toward a Culture-by-Context Perspective on Negotiation: Negotiating Teams in the United States and Taiwan,” Journal of Applied Psychology 98 (2013): 504–13; and A. Graf, S. T. Koeszegi, and E.-M. Pesendorfer, “Electronic Negotiations in Intercultural Interfirm Relationships,” Journal of Managerial Psychology 25 (2010): 495–512.

The Negotiation Process

1. 4 Apply the five steps of the negotiation process.

Exhibit 14-8  provides a simplified model of the negotiation process. It views negotiation as made up of five steps: (1) preparation and planning, (2) definition of ground rules, (3) clarification and justification, (4) bargaining and problem solving, and (5) closure and implementation. 41

PREPARATION AND PLANNING Before you start negotiating, do your homework. What’s the nature of the conflict? What’s the history leading up to this negotiation? Who’s involved and what are their perceptions of the conflict? What do you want from the negotiation? What are your goals? If you’re a supply manager at Dell Computer, for instance, and your goal is to get a significant cost reduction from your keyboard supplier, make sure this goal stays paramount in discussions and doesn’t get overshadowed by other issues. It helps to put your goals in writing and develop a range of outcomes—from “most hopeful” to “minimally acceptable”—to keep your attention focused.

You should also assess what you think are the other party’s goals. What are they likely to ask? How entrenched is their position likely to be? What intangible or hidden interests may be important to them? On what might they be willing to settle? When you can anticipate your opponent’s position, you are better equipped to counter arguments with facts and figures that support your position.

Relationships change as a result of negotiation, so take that into consideration. If you could “win” a negotiation but push the other side into resentment or animosity, it might be wiser to pursue a more compromising style. If preserving the relationship will make you seem easily exploited, you may consider a more aggressive style. As an example of how the tone of a relationship in negotiations matters, people who feel good about the process of a job offer negotiation are more satisfied with their jobs and less likely to turn over a year later regardless of their actual outcomes from these negotiations. 42

Exhibit 8

The Negotiation

Once you’ve gathered your information, develop a strategy. You should determine your and the other side’s best alternative to a negotiated agreement, or  BATNA . Your BATNA determines the lowest value acceptable to you for a negotiated agreement. Any offer you receive that is higher than your BATNA is better than an impasse.

In nearly all cases, the party with superior alternatives will do better in a negotiation, so experts advise negotiators to solidify their BATNA prior to any interaction. 43  There is an interesting exception to this general rule—negotiators with absolutely no alternative to a negotiated agreement sometimes “go for broke” since they don’t even consider what would happen if the negotiation falls through. 44  Think carefully about what the other side is willing to give up. People who underestimate their opponent’s willingness to give on key issues before the negotiation even starts end up with lower outcomes. 45  Conversely, you shouldn’t expect success in your negotiation effort unless you’re able to make the other side an offer it finds more attractive than its BATNA.

DEFINITION OF GROUND RULES Once you’ve done your planning and developed a strategy, you’re ready to define with the other party the ground rules and procedures of the negotiation itself. Who will do the negotiating? Where will it take place? What time constraints, if any, will apply? To what issues will negotiation be limited? Will you follow a specific procedure if an impasse is reached? During this phase, the parties will exchange their initial proposals or demands.

CLARIFICATION AND JUSTIFICATION When you have exchanged initial positions, you and the other party will explain, amplify, clarify, bolster, and justify your original demands. This step needn’t be confrontational. Rather, it’s an opportunity for educating each other on the issues, why they are important, and how you arrived at your initial demands. Provide the other party with any documentation that supports your position.

BARGAINING AND PROBLEM SOLVING The essence of the negotiation process is the actual give-and-take in trying to hash out an agreement. This is where both parties need to make concessions.

CLOSURE AND IMPLEMENTATION The final step in the negotiation process is formalizing your agreement and developing procedures necessary for implementing and monitoring it. For major negotiations—from labor–management negotiations to bargaining over lease terms—this requires hammering out the specifics in a formal contract. For other cases, closure of the negotiation process is nothing more formal than a handshake.

Individual Differences in Negotiation Effectiveness

1. 5 Show how individual differences influence negotiations.

Are some people better negotiators than others? The answer is complex. Four factors influence how effectively individuals negotiate: personality, mood/emotions, culture, and gender.

PERSONALITY TRAITS IN NEGOTIATIONS Can you predict an opponent’s negotiating tactics if you know something about his or her personality? Because personality and negotiation outcomes are related but only weakly, the answer is, at best, “sort of.” 46  Most research has focused on the Big Five trait of agreeableness, for obvious reasons—agreeable individuals are cooperative, compliant, kind, and conflict-averse. We might think such characteristics make agreeable individuals easy prey in negotiations, especially distributive ones. The evidence suggests, however, that overall agreeableness is weakly related to negotiation outcomes. Why is this the case?

Career Objectives

How can I get a better job?

I feel like my career is at a standstill, and I want to talk to my boss about getting a more developmental assignment. How can I negotiate effectively for a better job position?

— Wei

Dear Wei:

You’re certainly starting out on the right foot. A lot of people focus on a salary as a way to achieve success and negotiate for the best short-run offer. There’s obviously an advantage to this strategy in the short run, but sustained career growth has better payoffs in the long run. Developing skills can help put you on track for multiple salary increases. A strong skill set from developmental assignments will also give you a better position for future negotiations because you will have more career options.

Long-term career negotiations based on developmental assignments also often are easier to bring up with a supervisor. That’s because salary negotiations are often a zero-sum situation, but career development negotiations can bring positive outcomes to both sides. When negotiating for a developmental assignment, make sure you emphasize a few points with your supervisor:

· When it comes to salary negotiations, either you get the money, or the company keeps the money. Given that, your interests and the interests of your managers are directly opposed. On the other hand, negotiating for developmental assignments usually means finding ways to improve not just your skills, but also your contribution to the company’s bottom line. You can, in complete honesty, frame the discussion around these mutual benefits.

· Let your supervisor know that you are interested in getting better at your job, and that you are motivated to improve through a developmental assignment. Asking your supervisor for opportunities to grow is a clear sign that you are an employee worth investing in.

· Be open to creative solutions. It’s possible that there are some idiosyncratic solutions (also called “I-deals”) for enhancing both your interests and those of your supervisor. One of the best things about an integrative bargaining situation like this is that you and your negotiation partner can find novel solutions that neither would have imagined separately.

Think strategically about your career, and you’ll likely find you can negotiate not just for a better paycheck tomorrow, but for a paycheck that keeps increasing in the years to come.

Sources: Y. Rofcanin, T. Kiefer, and K. Strauss, “How I-Deals Build Resources to Facilitate Reciprocation: Mediating Role of Positive Affective States,” Academy of Management Proceedings, August, 2014, DOI: 10.5465/AMBPP.2014.16096abstract; C. Liao, S. J. Wayne, and D. M. Rousseau, “Idiosyncratic Deals in Contemporary Organizations: A Qualitative and Meta-Analytical Review,” Journal of Organizational Behavior, October 16, 2014, DOI: 10.1002/job.1959; and V. Brenninkmeijer and M. Hekkert-Koning, “To Craft or Not to Craft,” Career Development International 20 (2015): 147–62.

The opinions provided here are of the managers and authors only and do not necessarily reflect those of their organizations. The authors or managers are not responsible for any errors or omissions, or for the results obtained from the use of this information. In no event will the authors or managers, or their related partnerships or corporations thereof, be liable to you or anyone else for any decision made or action taken in reliance on the opinions provided here.

It appears that the degree to which agreeableness, and personality more generally, affects negotiation outcomes depends on the situation. The importance of being extraverted in negotiations, for example, will very much depend on how the other party reacts to someone who is assertive and enthusiastic. One complicating factor for agreeableness is that it has two facets: The tendency to be cooperative and compliant is one, but so is the tendency to be warm and empathetic. 47  It may be that while the former is a hindrance to negotiating favorable outcomes, the latter helps. Empathy, after all, is the ability to take the perspective of another person and gain insight/understanding of him or her. We know perspective-taking benefits integrative negotiations, so perhaps the null effect for agreeableness is due to the two tendencies pulling against one another. If this is the case, then the best negotiator is a competitive but empathetic one, and the worst is a gentle but empathetic one.

The type of negotiations may matter as well. In one study, agreeable individuals reacted more positively and felt less stress (measured by their cortisol levels) in integrative negotiations than in distributive ones. Low levels of stress, in turn, made for more effective negotiation outcomes. 48  Similarly, in “hard-edged” distributive negotiations, where giving away information leads to a disadvantage, extraverted negotiators do less well because they tend to share more information than they should. 49

Self-efficacy is one individual-difference variable that consistently seems to relate to negotiation outcomes. 50  This is a fairly intuitive finding—it isn’t too surprising to hear that those who believe they will be more successful in negotiation situations tend to perform more effectively. It may be that individuals who are more confident stake out stronger claims, are less likely to back down from their positions, and exhibit confidence that intimidates others. Although the exact mechanism is not yet clear, it does seem that negotiators may benefit from trying to get a boost in confidence before going to the bargaining table.

Research suggests intelligence predicts negotiation effectiveness, but, as with personality, the effects aren’t especially strong. 51  In a sense, these weak links mean you’re not severely disadvantaged, even if you’re an agreeable extravert, when it’s time to negotiate. We all can learn to be better negotiators. 52

An Ethical Choice

Using Empathy to Negotiate More Ethically

You may have noticed that much of our advice for negotiating effectively depends on understanding the perspective and goals of the person with whom you are negotiating. Preparing checklists of your negotiation partner’s interests, likely tactics, and BATNA have all been shown to improve negotiation outcomes. Can these steps make you a more ethical negotiator as well? Studies suggest that they might.

Researchers asked respondents to indicate how much they tended to think about other people’s feelings and emotions and to describe the types of tactics they engaged in during a negotiation exercise. More empathetic individuals consistently engaged in fewer unethical negotiation behaviors like making false promises and manipulating information and emotions.

When considering how to improve your ethical negotiation behavior, follow these guidelines:

1. Try to understand your negotiation partner’s perspective. This isn’t just by understanding cognitively what the other person wants, but by empathizing with the emotional reaction he or she will likely have to the possible outcomes.

2. Be aware of your own emotions, because many moral reactions are fundamentally emotional. One study found that engaging in unethical negotiation strategies increased feelings of guilt, so by extension, feeling guilty in a negotiation may mean you are engaging in behavior you’ll regret later.

3. Beware of empathizing so much that you work against your own interests. Just because you try to understand the motives and emotional reactions of the other side does not mean you have to assume the other person is going to be honest and fair in return. So be on guard.

Sources: Based on T. R. Cohen, “Moral Emotions and Unethical Bargaining: The Differential Effects of Empathy and Perspective Taking in Deterring Deceitful Negotiation,” Journal of Business Ethics 94, no. 4 (2010): 569–79; and R. Volkema, D. Fleck, and A. Hofmeister, “Predicting Competitive-Unethical Negotiating Behavior and Its Consequences,” Negotiation Journal 26, no. 3 (2010): 263–86.

MOODS/EMOTIONS IN NEGOTIATIONS Do moods and emotions influence negotiation? They do, but the way they work depends on the emotion as well as the context. A negotiator who shows anger can induce concessions, for instance, because the other negotiator believes no further concessions from the angry party are possible. One factor that governs this outcome, however, is power—you should show anger in negotiations only if you have at least as much power as your counterpart. If you have less, showing anger actually seems to provoke “hardball” reactions from the other side. 53

Another factor is how genuine your anger is—“faked” anger, or anger produced from surface acting (see  Chapter 4 ), is not effective, but showing anger that is genuine (deep acting) is. 54  It also appears that having a history of showing anger, rather than sowing the seeds of revenge, actually induces more concessions because the other party perceives the negotiator as “tough.” 55  Finally, culture seems to matter. For instance, one study found that when East Asian participants showed anger, it induced more concessions than when the negotiator expressing anger was from the United States or Europe, perhaps because of the stereotype of East Asians as refusing to show anger. 56

Another relevant emotion is disappointment. Generally, a negotiator who perceives disappointment from his or her counterpart concedes more. In one study, Dutch students were given 100 chips to bargain over. Negotiators who expressed disappointment were offered 14 more chips than those who didn’t. In a second study, showing disappointment yielded an average concession of 12 chips. Unlike a show of anger, the relative power of the negotiators made no difference in either study. 57

Anxiety also appears to have an impact on negotiation. For example, one study found that individuals who experienced more anxiety about a negotiation used more deceptions in dealing with others. 58  Another study found that anxious negotiators expect lower outcomes, respond to offers more quickly, and exit the bargaining process more quickly, leading them to obtain worse outcomes. 59

As you can see, emotions—especially negative ones—matter to negotiation. Even emotional unpredictability affects outcomes; researchers have found that negotiators who express positive and negative emotions in an unpredictable way extract more concessions because this behavior makes the other party feel less in control. 60  As one negotiator put it, “Out of the blue, you may have to react to something you have been working on in one way, and then something entirely new is introduced, and you have to veer off and refocus.” 61

CULTURE IN NEGOTIATIONS Do people from different cultures negotiate differently? The simple answer is the obvious one: Yes, they do. However, there are many nuances in the way this works. It isn’t as simple as “these negotiators are the best”; indeed, success in negotiations depends on the context.

So what can we say about culture and negotiations? First, it appears that people generally negotiate more effectively within cultures than between them. For example, a Colombian is apt to do better negotiating with a Colombian than with a Sri Lankan. Second, it appears that in cross-cultural negotiations, it is especially important that the negotiators be high in openness. This suggests a good strategy is to choose cross-cultural negotiators who are high on openness to experience, and to avoid factors such as time pressure that tend to inhibit learning about the other party. 62

Finally, because emotions are culturally sensitive, negotiators need to be especially aware of the emotional dynamics in cross-cultural negotiation. One study, for example, explicitly compared how U.S. and Chinese negotiators reacted to an angry counterpart. Chinese negotiators increased their use of distributive negotiating tactics, whereas U.S. negotiators decreased their use of these tactics. That is, Chinese negotiators began to drive a harder bargain once they saw that their negotiation partner was becoming angry, whereas U.S. negotiators capitulated somewhat in the face of angry demands. Why the difference? It may be that individuals from East Asian cultures feel that using anger to get their way in a negotiation is not a legitimate tactic, so they refuse to cooperate when their opponents become upset. 63

GENDER DIFFERENCES IN NEGOTIATIONS There are many areas of organizational behavior (OB) in which men and women are not that different. Negotiation is not one of them. It seems fairly clear that men and women negotiate differently, men and women are treated differently by negotiation partners, and these differences affect outcomes (see OB Poll).

OB Poll Men Ask More

Source: A. Gouveia, “Why Americans Are Too Scared to Negotiate Salary,” San Francisco Chronicle, April 3, 2013, downloaded May 30, 2013 from  http://www.sfgate.com/jobs/ .

A popular stereotype is that women are more cooperative and pleasant in negotiations than men. Though this is controversial, there is some merit to it. Men tend to place a higher value on status, power, and recognition, whereas women tend to place a higher value on compassion and altruism. Moreover, women do tend to value relationship outcomes more than men, and men tend to value economic outcomes more than women. 64

These differences affect both negotiation behavior and negotiation outcomes. Compared to men, women tend to behave in a less assertive, less self-interested, and more accommodating manner. As one review concluded, women “are more reluctant to initiate negotiations, and when they do initiate negotiations, they ask for less, are more willing to accept [the] offer, and make more generous offers to their negotiation partners than men do.” 65  A study of MBA students at Carnegie-Mellon University found that the male students took the step of negotiating their first offer 57 percent of the time, compared to 4 percent for the female students. The net result? A $4,000 difference in starting salaries. 66

One comprehensive literature review suggests that the tendency for men to receive better negotiation outcomes in some situations does not cover all situations. 67  Indeed, evidence suggested women and men bargained more equally in certain situations, women sometimes outperformed men, and men and women obtained more nearly equal outcomes when negotiating on behalf of someone else. In other words, everyone was better at advocating for others than they were at advocating for themselves.

Factors that increased the predictability of negotiations also tended to reduce gender differences. When the range of negotiation settlements was well defined, men and women were more equal in outcomes. When more experienced negotiators were at the table, men and women were also more nearly equivalent. The study authors proposed that when situations are more ambiguous, with less well-defined terms and less experienced negotiators, stereotypes may have stronger effects, leading to larger gender differences in outcomes.

So what can be done to change this troublesome state of affairs? First, organizational culture plays a role. If an organization, even unwittingly, reinforces gender-stereotypic behaviors (men negotiating competitively, women negotiating cooperatively), it will negatively affect negotiations when anyone goes against stereotype. Men and women need to know that it is acceptable for each to show a full range of negotiating behaviors. Thus, a female negotiator who behaves competitively and a male negotiator who behaves cooperatively need to know that they are not violating expectations. Making sure negotiations are designed to focus on well-defined and work-related terms also has promise for reducing gender differences by minimizing the ambiguous space for stereotypes to operate. This focus on structure and work relevance also obviously helps focus negotiations on factors that will improve the organization’s performance.

Research is less clear on whether women can improve their outcomes by showing some gender-stereotypic behaviors. Researchers Laura Kray and colleagues suggested that female negotiators who were instructed to behave with “feminine charm” (be animated in body movements, make frequent eye contact with their partners, smile, laugh, be playful, and frequently compliment their partners) did better in negotiations than women not so instructed. These behaviors didn’t work for men. 68

Other researchers disagree and argue that what can best benefit women is to break down gender stereotypes for the individuals who hold them. 69  It’s possible this is a short-term/long-term situation: In the short term, women can gain an advantage in negotiation by being both assertive and charming, but in the long term, their interests are best served by eliminating these sorts of sex role stereotypes.

Evidence suggests women’s own attitudes and behaviors hurt them in negotiations. Managerial women demonstrate less confidence than men in anticipation of negotiating and are less satisfied with their performance afterward, even when their performance and the outcomes they achieve are similar to those for men. 70  Women are also less likely to see an ambiguous situation as an opportunity for negotiation. Women may unduly penalize themselves by failing to engage in negotiations that would be in their best interests. Some research suggests that women are less aggressive in negotiations because they are worried about backlash from others.

Negotiating in a Social Context

1. 6 Assess the roles and functions of third-party negotiations.

We have mostly been discussing negotiations that occur among parties that meet only once, and in isolation from other individuals. However, in organizations, many negotiations are open-ended and public. When you are trying to figure out who in a work group should do a tedious task, negotiating with your boss to get a chance to travel internationally, or asking for more money for a project, there’s a social component to the negotiation. You are probably negotiating with someone you already know and will work with again, and the negotiation and its outcome are likely to be topics people will talk about. To really understand negotiations in practice, then, we must consider the social factors of reputation and relationships.

REPUTATION Your reputation is the way other people think and talk about you. When it comes to negotiation, having a reputation for being trustworthy matters. In short, trust in a negotiation process opens the door to many forms of integrative negotiation strategies that benefit both parties. 71  The most effective way to build trust is to behave in an honest way across repeated interactions. Then, others feel more comfortable making open-ended offers with many different outcomes. This helps to achieve win-win outcomes, since both parties can work to achieve what is most important to themselves while still benefitting the other party.

Sometimes we either trust or distrust people based on word-of-mouth about a person’s characteristics. What type of characteristics help a person develop a trustworthy reputation? A combination of competence and integrity. 72  Negotiators higher in self-confidence and cognitive ability are seen as more competent by negotiation partners. 73  They are also considered better able to accurately describe a situation and their own resources, and more credible when they make suggestions for creative solutions to impasses. Individuals who have a reputation for integrity can also be more effective in negotiations. 74  They are seen as more likely to keep their promises and present information accurately, so others are more willing to accept their promises as part of a bargain. This opens many options for the negotiator that wouldn’t be available to someone who is not seen as trustworthy. Finally, individuals who have higher reputations are better liked and have more friends and allies—in other words, they have more social resources, which may give them more understood power in negotiations.

RELATIONSHIPS There is more to repeated negotiations than just reputation. The social, interpersonal component of relationships with repeated negotiations means that individuals go beyond valuing what is simply good for themselves and instead start to think about what is best for the other party and the relationship as a whole. 75  Repeated negotiations built on a foundation of trust also broaden the range of options, since a favor or concession today can be offered in return for some repayment further down the road. 76  Repeated negotiations also facilitate integrative problem solving. This occurs partly because people begin to see their negotiation partners in a more personal way over time and come to share emotional bonds. 77  Repeated negotiations also make integrative approaches more workable because a sense of trust and reliability has been built up. 78

In sum, it’s clear that an effective negotiator needs to think about more than just the outcomes of a single interaction. Negotiators who consistently act in a way that demonstrates competence, honesty, and integrity will usually have better outcomes in the long run.

Third-Party Negotiations

To this point, we’ve discussed bargaining in terms of direct negotiations. Occasionally, however, individuals or group representatives reach a stalemate and are unable to resolve their differences through direct negotiations. In such cases, they may turn to a third party to help them find a solution. There are three basic third-party roles: mediator, arbitrator, and conciliator.

 mediator  is a neutral third party who facilitates a negotiated solution by using reasoning and persuasion, suggesting alternatives, and the like. Mediators are widely used in labor–management negotiations and in civil court disputes. Their overall effectiveness is fairly impressive. For example, the Equal Employment Opportunity Commission (EEOC) reported a settlement rate through mediation at 72.1 percent. 79  But the situation is the key to whether mediation will succeed; the conflicting parties must be motivated to bargain and resolve their conflict. In addition, conflict intensity can’t be too high; mediation is most effective under moderate levels of conflict. Finally, perceptions of the mediator are important; to be effective, the mediator must be perceived as neutral and noncoercive.

An  arbitrator  is a third party with the authority to dictate an agreement. Arbitration can be voluntary (requested by the parties) or compulsory (forced on the parties by law or contract). The big plus of arbitration over mediation is that it always results in a settlement. Whether there is a downside depends on how heavy-handed the arbitrator appears. If one party is left feeling overwhelmingly defeated, that party is certain to be dissatisfied and the conflict may resurface at a later time.

 conciliator  is a trusted third party who provides an informal communication link between the negotiator and the opponent. This role was made famous by Robert Duval in the first Godfather film. As Don Corleone’s adopted son and a lawyer by training, Duval acted as an intermediary between the Corleones and the other Mafioso families. Comparing conciliation to mediation in terms of effectiveness has proven difficult because the two overlap a great deal. In practice, conciliators typically act as more than mere communication conduits. They also engage in fact-finding, interpret messages, and persuade disputants to develop agreements.

Summary

While many people assume conflict lowers group and organizational performance, this assumption is frequently incorrect. Conflict can be either constructive or destructive to the functioning of a group or unit. Levels of conflict can be either too high or too low to be constructive. Either extreme hinders performance. An optimal level is one that prevents stagnation, stimulates creativity, allows tensions to be released, and initiates the seeds of change without being disruptive or preventing the coordination of activities.

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