S ChanDepartment of Business Administration

Lecture 9Conflict and Negotiation

Lecture 9Conflict and Negotiation

Definition of ConflictDefinition of Conflict

A process that begins when one party perceives that another party has negatively affected, or is about to negatively affect, something that the first party cares about– That point in an ongoing activity when an interaction

“crosses over” to become an interparty conflict

Encompasses a wide range of conflicts that people experience in organizations– Incompatibility of goals

– Differences over interpretations of facts

– Disagreements based on behavioral expectations

Transitions in Conflict ThoughtTransitions in Conflict Thought

Traditional View of Conflict

– The belief that all conflict is harmful and must be avoided

– Prevalent view in the 1930s-1940s

Conflict resulted from:

– Poor communication

– Lack of openness and trust between people

– Failure to respond to employee needs

Continued Transitions in Conflict ThoughtContinued Transitions in Conflict Thought

Human Relations View of Conflict– The belief that conflict is a natural and inevitable outcome in

any group

– Human relations school advocated acceptance of conflict, which may sometimes benefit a group’s performance

– Prevalent from the late 1940s through mid-1970s

Interactionist View of Conflict– The belief that conflict is not only a positive force in a group

but that it is absolutely necessary for a group to perform effectively

– Current view

Forms of Interactionist ConflictForms of Interactionist Conflict

Functional conflicts:

- Conflicts which are constructively support the goals of the group and improve its performance

Dysfunctional conflicts:

-Conflicts that destructively hinder group performance or involve personal attack.

Types of Interactionist ConflictTypes of Interactionist Conflict

Task Conflict– Conflicts over content and goals of the work

– Low-to-moderate levels of this type are FUNCTIONAL

Relationship Conflict– Conflict based on interpersonal relationships

– Almost always DYSFUNCTIONAL

Process Conflict– Conflict over how work gets done

– Low levels of this type are FUNCTIONAL

The Conflict ProcessThe Conflict Process

We will focus on each step in a moment…

© 2009 Prentice-Hall Inc. All rights reserved.

E X H I B I T 15-1E X H I B I T 15-1

Stage I: Potential Opposition or IncompatibilityStage I: Potential Opposition or Incompatibility

Communication– Semantic difficulties, misunderstandings, and “noise”

Structure– Size and specialization of jobs

– Jurisdictional clarity/ambiguity

– Member/goal incompatibility

– Leadership styles (close or participative)

– Reward systems (win-lose)

– Dependence/interdependence of groups

Personal Variables– Differing individual value systems

– Personality types

Stage II: Cognition and PersonalizationStage II: Cognition and Personalization

Important stage for two reasons:

1. Conflict is defined • Perceived Conflict

– Awareness by one or more parties of the existence of conditions that create opportunities for conflict to arise

2. Emotions are expressed that have a strong impact on the eventual outcome• Felt Conflict

– Emotional involvement in a conflict creating anxiety, tenseness, frustration, or hostility

Stage III: IntentionsStage III: Intentions

Intentions– Decisions to act in a given way– Note: behavior does not always accurate reflect intent

Dimensions of conflict-handling intentions:– Cooperativeness

• Attempting to satisfy the other party’sconcerns

– Assertiveness• Attempting to satisfy

one’s own concerns

E X H I B I T 15-2E X H I B I T 15-2

Source: K. Thomas, “Conflict and Negotiation Processes in Organizations,” in M.D. Dunnette and L.M. Hough (eds.), Handbook of Industrial and Organizational Psychology, 2nd ed., vol. 3 (Palo Alto, CA: Consulting Psychologists Press, 1992), p. 668. With permission.

Stage III: IntentionsStage III: IntentionsDimensions of conflict-handling intentions:

– Competing• One seeks to satisfy his/her own interests, regardless of the impact on

other parties, one wins and the other losses. – Collaborating

• Search for cooperation and a mutually beneficial outcome—Win-Win solution. Party solve problems by clarifying differences rather than by accommodating various points of view.

– Avoiding• One to withdraw or suppress the conflicts. E.g. trying to ignore a conflict

and avoid others with whom you disagree. – Accommodating

• One attempts to place the other conflicting party’s interest above his/her own in order to maintain relationship. More self sacrificing

– Compromising• Each party to a conflict seeks to give up something to results a

compromised outcome. No clear winner or loser.

Stage IV: BehaviorStage IV: Behavior

Conflict Management

– The use of resolution and stimulation techniques to achieve the desired level of conflict

Conflict- Resolution Techniques:

1. Problem solving: Face to face meeting of the conflicting parties to identifying the problems and resolving it through open discussions.

2. Super-ordinate goals: Creating a shared goal that cannot be attained without the cooperation of each of the conflicting parties

3. Expansion of Resources: If conflict is caused by scarcity of resources,I.e. money, promotion and opportunities– expansion of resources can create win-win solution.

4. Avoidance: Withdrawal from or suppression of the conflict.

15-12

Stage IV: BehaviorStage IV: Behavior

Conflict- Resolution Techniques (con’t):

5. Smoothing: Playing down differences while emphasizing common interests between the conflicting parties

6. Compromise: Each party to the conflicts gives up something of values.

7. Authoritative command: Management uses its formal authority to resolve the conflict then communicates its desires to the parties involved.

8. Altering the human variable: Using behavioral change techniques such as human relation training to alter attitudes and behaviors that cause conflict.

9. Altering the structural variables: Changing the formal organization structure and the interaction patterns of conflicting parties through job redesign, transfer, creation of coordinating position..

Source: Based on S. P. Robbins, Managing Organizational Conflict: A Nontraditional Approach (Upper Saddle River, NJ: Prentice Hall, 1974), pp. 59–89

Stage V: OutcomesStage V: Outcomes Functional

– Increased group performance

– Improved quality of decisions

– Stimulation of creativity and innovation

– Encouragement of interest and curiosity

– Provision of a medium for problem-solving

– Creation of an environment for self-evaluation and change

Dysfunctional– Development of discontent

– Reduced group effectiveness

– Retarded communication

– Reduced group cohesiveness

– Infighting among group members overcomes group goals

Creating Functional Conflict– Reward dissent and punish

conflict avoiders

NegotiationNegotiation

Negotiation (Bargaining)– A process in which two or more parties exchange goods or

services and attempt to agree on the exchange rate for them

Two general bargaining strategies:– Distributive Bargaining

• Negotiation that seeks to divide up a fixed amount of resources; a win-lose situation (labour-management negotiations over wages)

– Integrative Bargaining• Negotiation that seeks one or more settlements that can create

a win-win solution

Distributive versus Integrative BargainingDistributive versus Integrative Bargaining

Bargaining Characteristic Distributive Bargaining

Integrative Bargaining

Goal Get all the pie you can Expand the pie

Motivation Win-Lose Win-Win

Focus Positions Interests

Information Sharing Low High

Duration of Relationships Short-Term Long-Term

Distributive

Integrative

Source: Based on R. J. Lewicki and J. A. Litterer, Negotiation (Homewood, IL: Irwin, 1985), p. 280.

Bargaining Tactics and the Bargaining ZoneBargaining Tactics and the Bargaining Zone

Distributive Tactics– Make an aggressive

first offer

– Reveal a deadline

Integrative Tactics– Bargain in teams

– Put more issues on the table

– Don’t compromise

© 2009 Prentice-Hall Inc. All rights reserved. 15-17

E X H I B I T 15-6E X H I B I T 15-6

The Negotiation ProcessThe Negotiation Process

BATNA

– The Best Alternative To a Negotiated Agreement

– The lowest acceptable value (outcome) to an individual for a negotiated agreement

The “Bottom Line” for negotiations

E X H I B I T 15-7E X H I B I T 15-7

Individual Differences in Negotiation EffectivenessIndividual Differences in Negotiation Effectiveness

Personality Traits– Extroverts and agreeable people weaker at distributive

negotiation – disagreeable introvert is best– Intelligence is a weak indicator of effectiveness

Mood and Emotion– Ability to show anger helps in distributive bargaining– Positive moods and emotions help integrative bargaining

Gender– Men and women negotiate the same way, but may

experience different outcomes– Women and men take on gender stereotypes in negotiations:

tender and tough– Women are less likely to negotiate

Global ImplicationsGlobal Implications

Conflict and Culture– Japanese and U.S. managers view conflict differently

– U.S. managers more likely to use competing tactics while Japanese managers are likely to use compromise and avoidance

Cultural Differences in Negotiations– Multiple cross-cultural studies on negotiation styles, for

instance:• American negotiators are more likely than Japanese bargainers

to make a first offer

• North Americans use facts to persuade, Arabs use emotion, and Russians used asserted ideals

• Brazilians say “no” more often than Americans or Japanese