Self Esteem/Self Efficacy and Communication/Team Building

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7Con�lict and Negotiation

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Learning Objectives

After reading this chapter and studying the materials, you should be able to:

Explain the nature of con�lict. Utilize various methods to resolve con�licts. Recognize the forms of negotiation, including distributive and integrative situations. Understand the stages of negotiation in a constructive manner.

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Religious expression is a common area of contention in workplace policies.

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7.1 The Nature of Con�lict One indisputable fact of organizational life is that there are people involved, and that many times they get into disputes and con�licts. At times such disagreements can be resolved through relatively calm, rational processes including mediation or other forms of negotiation. At others, con�licts emerge practically without notice and no intervening step can be taken to prevent them or even slow them down. In other situations, what begins as an uneventful negotiation can evolve into a more dramatic con�lict situation. In all cases, individual employees and their supervisors will be expected to respond and react to the issue at hand. Consider the circumstances present in the OB in Action feature regarding employee and management religious concerns in pro�it-seeking companies.

OB in Action: The Potential for Negotiation and Con�lict— Religious Activities and Company Policies

What happens when the religious af�iliations of employees become potentially at odds with company policies and practices? Two stories highlight the need for careful negotiation or con�lict resolution.

The �irst occurred in 2015 at a Cargill manufacturing facility in Fort Morgan, Colorado. Cargill employed more than 150 workers who practiced Islam. A group of 11 workers of Somalian descent asked if they could have access to a "prayer and re�lection" room within the plant for a common time of prayer. Some disagreement exists regarding the manner in which management dealt with the request.

One employee stated that the immediate supervisor asked them to break in smaller groups so that they would not disrupt production on the assembly line. Another claimed that higher level managers decided to reduce the number of prayer breaks as a response to the request. In either case, the Somali workers prayed in small groups on the day of their request, and at the end of their shift, 10 of the 11 workers quit.

Soon after, 150 Muslim workers missed work for three days in protest. The management team at Cargill dismissed them for failing to inform the company that they would be absent. Following the incident, nearly 130 of the �ired workers �iled complaints with the U.S. Equal Employment Opportunity Commission (EEOC) regarding discriminatory practices based on religion (Chang, 2016).

The second event occurred in 2014. In that case, the U.S. Supreme Court, on its �inal day of activity for the session, ruled that any requirement of family- owned corporations to pay for insurance coverage for contraception under the Affordable Care Act violated a federal law protecting religious freedom. The dissenting opinion made by Justice Ruth Bader Ginsberg from the court was that the outcome represented "a decision of startling breadth" (Liptak, 2014). She attacked the majority opinion as a radical overhaul of corporate rights and worried that it could apply to all corporations and to countless laws regarding religion in the workplace.

The case revolved around arguments made by attorneys for Hobby Lobby and Conestoga Wood Specialties. Both companies insisted they should not be required to include contraception coverage as part of insurance policies for employees. Religious liberty by the owners was the primary argument made by the winning side (Liptak, 2014).

The court's decision produced signi�icant publicity regarding Hobby Lobby. Some customers may have felt that even bringing the complaint was an undesirable act; whereas others may have been thrilled the company "took a stand" in terms of the religious beliefs of the owners. Clearly, taking the issue to the Supreme Court suggests strong determination by those who brought the case.

Re�lection and Application Questions

1. Could both of these events have been resolved through negotiation rather than con�lict? 2. Describe all of the potential persons or groups who might have had interests or a "stake" in the outcome of both situations. 3. Why might religious beliefs and preferences create an even more incendiary situation than other organizational issues?

This chapter considers con�lict and negotiation. Any employee can expect to deal with these issues, beginning with bargaining for wages and other considerations when hired. Con�lict will be examined �irst, followed by negotiation.

What do you think of when you hear the term "con�lict"? To some, con�lict represents a negative force, accompanied by words such as "destructive," "violent," or "angry." Others view con�lict on a continuum ranging from mild disagreements to major confrontations. Over time, con�lict has been viewed as something to be avoided or eliminated, as inevitable but manageable, and even as a driving force that leads to innovation and much needed change (De Dreu & Van de Vliert, 1997; Fink, 1968). Consequently, de�ining the term creates challenges.

In the context of organizational behavior, con�lict is a circumstance in which one party negatively affects or seeks to negatively affect another party (Thomas, 1992). Con�lict can be observable or perceived (Wall & Callister, 1995), which means that someone may believe that a con�lict exists even when it would be dif�icult to point out as an observable event. Con�lict and negotiation are closely related concepts, in that both suggest that two parties are involved, and both parties seek to impose their will or gain in a disputed situation.

Con�lict contrasts with another concept, competition; a condition in which all parties in an event or situation attempt to do their best, with the person or group producing the most desired outcome emerging as the winner. A sales contest between individuals or teams is a competition; a confrontation between two members of a sales force over which one should make a call on a prospective client is a con�lict.

Recently, con�lict has been conceptualized as taking two forms. In an organizational context, functional con�lict occurs when the organization's interests are served in some way, such as improvement in performance or greater cooperation among individuals or groups. Functional con�lict is also called constructive, or cooperative, con�lict. A functional con�lict would involve an argument about how best to design a retail store to make it more customer-friendly.

Dysfunctional con�lict takes the form of destructive activities that hinder group or organizational performance. Three categories of dysfunctional con�lict have been identi�ied, as shown in Table 7.1 (Amason, 1996).

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Table 7.1: Categories of dysfunctional con�lict Task con�lict Disagreement about the type of work that should be performed and goals

Relationship con�lict Interpersonal dispute

Process con�lict Disagreement about methods of doing a job or performing a task

Functional con�licts tend to revolve around ideas. The process of resolution may be passionate, but the goal remains to achieve a positive outcome. Dysfunctional con�licts devolve into character assassination and vendettas as the parties involved seek to "win" rather than necessarily reaching a viable solution or compromise.

Levels of Con�lict

Not all con�licts are the same. Managers should be aware that four levels of con�lict occur in the workplace. Resolving con�lict cannot take place until the level has been properly identi�ied. The four levels of con�lict are as follows:

intrapersonal, or intrapsychic, con�lict interpersonal con�lict intragroup con�lict intergroup con�lict

Intrapersonal con�licts (also called intrapsychic con�licts) occur within an individual. Ideas, thoughts, values, and emotions can con�lict with one another. For instance, selling a product that someone does not think has suf�icient quality or one that is potentially dangerous may create an intrapsychic con�lict when the individual also recognizes the need to make sales and generate personal income.

Interpersonal con�licts take place between individuals. Many times, two individuals in a company enter into con�licts. Personality con�licts often result from workplace incivility. Examples of incivility include sexually inappropriate comments, racial or ethnic slurs, ridicule of older or younger workers, derision based on sexual orientation, and insensitive comments about physical or mental disabilities (Blau & Anderson, 2005). Other interpersonal con�licts take place simply because one person dislikes another, or when mutual animosity exists, for whatever reason. Interpersonal con�licts also emerge for what could be considered "legitimate" reasons, such as disagreements about organizational goals, managerial decisions, the distribution of resources (budgets, pay), or a more personal matter such as a performance appraisal rating.

Intragroup con�lict refers to incidents between members of a group. Disagreements about group goals, methods of operation, and leadership create intragroup con�licts. When con�licts are not properly managed and resolved, the end results can be poor decisions and ineffective group functioning (Bazerman & Neale, 1992). Intragroup con�lict can quickly emerge when two individuals try to assume the role of leader, especially in forming stage of the group.

Intergroup con�lict takes place between various groups, such as between departments within a company, or between factions such as ethnic groups or female and male employees. Intergroup con�licts emerge when disagreements about goals, differences of opinion about which group should be assigned a project or task, or budget allocations become the focus of attention.

Each of these four types of con�lict requires an intervention. In the case of an intrapersonal con�lict, a counselor or advisor may assist. Interpersonal, intragroup, and intergroup con�licts may be resolved in a variety of ways. Managers choose the most appropriate method for dealing with each problem as it arises. Con�lict resolution will be discussed in Section 7.2.

A Model of the Stages of Con�lict

Louis Pondy (1967) developed one of the �irst and most widely cited models of con�lict. A modi�ied version appears as Figure 7.1. Pondy's model states that con�licts occur to a lesser or greater extent depending on the organization's place in a con�lict cycle. The cycle suggests that when individuals become subjected to a series of con�licts (even when they are only spectators), they become increasingly sensitized to the events. As a result, subsequent con�lict will be more likely. When a series of con�licts has been resolved and the company enters a more tranquil period, participants become more patient with each other and the net result is reduced numbers of open con�licts. Managerial skill and intervention can break the cycle of increasing con�lict.

As shown in Figure 7.1, latent con�lict represents all of the potential sources of con�lict at the individual or group level. Table 7.2 displays the various areas or issues where potential sources of con�lict within an organization might exist. These potential sources may or may not erupt into open confrontations. Some problems may exist for years without ever becoming manifest. Others may take a "fast track" and quickly develop into altercations.

Figure 7.1: Adaptation of Pondy's con�lict model and con�lict cycle

Pondy's model of the phases of organizational con�lict shows how con�lict can become a cycle that continues to feed upon itself.

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Source: Pondy, L. (1967 September) Organizational Con�lict: Con�licts and Models, Administrative Science Quarterly, 12, 296–320.

Table 7.2: Potential sources of con�lict Individual level Group or departmental level

Job assignments Group task assignments

Performance appraisals Budgets/resource allocation

Promotions Personalities of group members

Pay raises Dependence/bottlenecks

Personality issues and incivility Goals

Dependence/bottlenecks Communication breakdown

Goals Ethical issues

Status differences

Communication breakdown

Power differences

Ethical violations

Felt con�lict occurs when people know something is wrong but cannot pinpoint the source. Have you had the experience of walking into a room and knowing immediately something is not right, but having no clue as to the actual problem? At that point, you are feeling the con�lict.

Perceived con�lict means that those near a con�lict know the issues and the people involved, yet do not feel discomfort from it. In essence, the con�lict is "someone else's problem." Often, perceived con�licts take place in other departments or parts of an organization.

As shown in Figure 7.1, felt con�licts can evolve into perceived con�licts and vice versa. In other words, an employee or employee group moves from knowing something is wrong to discovering what other people are �ighting about. Conversely, perceived con�licts can move into the realm of being felt. In this instance, the con�lict involved suddenly starts to cast a pall over those who previously knew about it but did not feel uncomfortable as a result. This means they now experience it more directly

As felt and perceived con�lict intensi�ies, perceptions of the con�lict change. When this happens, those near the con�lict feel it so strongly that it begins to affect their work and/or feelings about the workplace, leading to a sense that things are about to "explode." Those who perceive the con�lict can no longer stay neutral, feeling they must "take sides." In both instances (feelings and perceptions become stronger), the con�lict has taken on new dimensions. The tendency shifts toward interpreting people and events as being either with or against one side. Thinking reverts to more stereotypical and biased forms that favor a person's viewpoint. This sets the stage for open con�lict, which displays visible outward signs (Lewicki, Barry, & Saunders, 2010, p. 19).

One driving force that moves a con�lict from a potential issue into a more tangible stage is frustration (Meyers, 1990). When a worker has a goal in mind and a policy, action, behavior, or any other overt or covert barrier prevents achievement of that goal, con�lict becomes more likely. The worker's goal could be as political as getting an undeserved promotion or as positive as trying to help out a coworker.

Open con�licts appear as showdowns, confrontations, and other outward signs. Often an open con�lict results from ongoing escalation of the issue. Manifest con�lict behaviors include yelling, loud arguments, and violence toward others at the individual level, and work slowdowns, strikes, and deliberate rules violations at the group level. At that point, con�lict resolution must take place. A manager or arbiter needs to step in.

As an example, consider a latent con�lict with both individual and departmental elements. The potential dispute plays out in the accounting and sales departments. The issue is the timing of turning in sales report �igures. The sales department and individual salespeople wish to wait until the last possible minute to turn in their numbers, thereby giving them the chance to list as many sales as possible—which in turn affects their commissions. The accounting department cannot "close the books" until all sales information arrives. This often results in late nights for the accountants who want to complete their reports on time. As a result, a latent con�lict exists.

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Simultaneously, one of the salespeople and one of the accountants are part of the safety committee, which also involves the human resources manager and a member of the production staff. During one of their weekly meetings, the accountant is visibly perturbed and irritable. Others in the room feel the presence of a con�lict but do not know the source of the tension.

After the meeting, the accountant describes his frustration to the production department manager who then understands the problem, but concludes he does not want to get involved and that it is not his problem. Perceived con�lict is now in place.

Over time, frustrations continue to mount. Neither the accountant nor the salesperson seems particularly engaged in the work of the safety committee, and glares and stares replace more pleasant interactions. The production department members begin to believe that such late sales reports and delayed accounting statements can slow the process of replacing inventory in a timely fashion. Thus, they conclude that the tension between accounting and sales has an impact on them. As a result, both felt and perceived con�licts have reached new levels.

Eventually, the tensions boil over in the hallway after a safety committee meeting. The accountant and the salesperson are nose-to-nose trading insults and complaints. Soon after, the dispute has been described to members of both departments, with outright hostility beginning to grow. The con�lict has become open, and someone must take charge to resolve the situation. The mediator (manager or some other person) worries that this con�lict might lead to other con�licts between production, sales, and accounting, if not resolved quickly and effectively.

In sum, con�lict is a circumstance in which one party negatively affects or seeks to negatively affect another party. Managers should be aware of the potential sources of con�lict and work to resolve them when they occur.

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All con�licts are unique, and the order of steps toward resolution will be determined on a case-by-case basis.

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7.2 Con�lict Resolution A manifest con�lict often requires a cooling-off period before any attempt at resolution can start. When emotions are high, reasonable dialogue will be unlikely. When an arbiter or manager surmises that both sides have suf�iciently calmed down, con�lict resolution can commence. In general, the con�lict resolution process involves the following steps or activities (Rackham, 1976):

Identify the parties involved. Identify the issues. Identify the positions of the parties. Find the bargaining zone. Make a decision.

Note that these activities may not occur exactly in this sequence. At times several characteristics, such as the issues, parties, and positions may be evident from the outset. In others, more than one of the factors may be revealed at the same time due to one statement made by a party to the con�lict. The manager's job (or the mediator) will be to identify each element before seeking a resolution.

To identify the parties involved, the manager seeks to be certain whether an individual or group con�lict exists. Next, he or she must identify the real issues involved in the dispute, which may take time. Many times a con�lict �irst becomes manifest because of something quite minor. When two persons become involved in a shoving match over who should use the copier �irst, odds are the real issue is something else.

The moderator works to identify the positions of each party. When the con�lict involves only two individuals or two groups, discovering their positions should be fairly easy. Often, however, a problem or concern exhibits many facets and the net result is that several people or coalitions have some sort of vested interest. To effectively resolve the con�lict, the moderator must determine the agendas of all parties involved, which may be a more dif�icult task.

Finding the bargaining zone in a con�lict resolution resembles identifying the settlement range in a negotiation. The bargaining zone is the area in which give and take can be carried out. At times, no such range may be found; one side will win and the other will lose.

Making the �inal decision determines the outcome of the con�lict. A win-win solution allows all sides to make gains. In essence, each side is "better off" when a resolution has been reached. A win-lose solution means one side gains the advantage over the other. A lose-lose, or compromise, means both parties gain on some issues but lose on others. Most bargaining agreements between unions and management result in compromise solutions on a variety of issues, from pay to bene�its to other employment circumstances.

Con�lict Responses

Con�lict resolution includes an understanding of the concerns of the parties involved. The dual concerns model, as developed by Rubin, Pruitt, and Kim (1994), assumes that individuals handle con�lict by balancing a concern for themselves (their personal outcomes) with a concern for others. The tendency to be pro- social or pro-self will determine a particular con�lict style: contending/competing, inaction/avoiding, yielding/accommodating, problem solving/collaborating, or conciliatory/compromising (see Figure 7.2).

Figure 7.2: Responses to concerns

There are �ive main con�lict styles, each characterized by a different level of concern for the other's outcomes.

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Approaches to Dispute Resolution

Professionals discuss the different stages of dispute resolution.

Source: Rubin, J. Z., Pruitt, D., & Kim, S. H. (1994). Social con�lict: Escalation, stalemate, and settlement (2nd ed.). New York, NY: McGraw-Hill.

When one side has little concern about the other's outcomes, two con�lict styles may result: contending/competing or inaction/avoiding. Contending or competing occurs when one side fully pursues its outcomes with no regard for the outcomes of the other side. Strong tactics, such as threats, intimidation, and unilateral action, appear. Other terms associated with contending include "dominating" and "forcing" (Rahim, 1985). Inaction and avoiding are characterized by withdrawal and passivity; the party involved has little regard for its own outcome or for the other side's outcome. It retreats from the con�lict.

When concern for the other party's outcome is high, two con�lict styles are possible: yielding/ accommodating and problem solving/collaborating. The yielding/accommodating style involves seeking to help the other side achieve its outcomes with little care about one's own outcomes, because maintaining a social relationship is more important than being "right" or winning. Yielding is also referred to as "obliging" and "smoothing" (Rahim, 1985). A problem solving/collaborating style occurs when high concern for the other's outcomes accompanies high concern for one's personal outcomes. The goal is to achieve a win-win solution. Problem solving has also been labeled an "integrating" approach.

When there are moderate levels of concern for the other party's outcome as well as one's own, the compromising con�lict style emerges. A compromise becomes more likely when the two sides hold equal levels of power, consensus cannot be reached, and the goals of the two parties are not strongly connected. Discovering the relative positions of the two sides becomes part of the con�lict resolution process. Managers try to identify the level of give and take that will be possible by assessing the strength of commitment each side has to its position. More effective negotiations or resolutions then become possible.

Alternative Approaches

At times, a con�lict stands a better chance at effective resolution when a third party intervenes. Alternative dispute resolution attempts to incorporate user- friendly methods of dispute resolution and seeks to avoid more adversarial approaches (Morrow & Bernardi, 1999). The methods used in this approach include facilitation, conciliation, peer review, ombudsman, mediation, and arbitration.

Facilitation involves a third party urging the two sides to meet and deal directly in a constructive and positive fashion. In simple terms, a "face-to-face" meeting takes place. Both parties are allowed to express their positions and frustrations in a civil manner. In general parlance, this might be called "hashing things out," such as when an individual employee and a supervisor disagree about a performance appraisal score or rating.

Conciliation uses a neutral third party who acts informally as a communication conduit to help resolve a dispute without the parties directly meeting. Conciliation involves a "go-between" person. Intergroup con�licts can be resolved by a manager of higher rank playing the role of conciliator. For instance, a sales department manager would like to be able to offer each client a "tailor made" product; whereas a production manager prefers more of a "one size �its all" system to make items more ef�iciently. In another situation, a company tax attorney may disagree with an accountant or accounting department's assessment of a tax liability to be paid to the government. A manager of higher rank can serve as the go-between looking for accommodation by both sides.

When peer review is utilized, a panel of trustworthy coworkers that can remain objective is asked to render a nonbinding verdict or opinion about how the con�lict should be resolved.

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Critical Thinking Questions

1. Why do you think communication is emphasized as the most important aspect of dispute resolution?

2. Can you think of a con�lict you've experienced that could have been resolved through one-on-one communication?

Peer review takes place in some organizations when a dispute between an individual and a supervisor takes place, over a matter of discipline, where the employee feels he or she has been treated unjustly or penalized in an unfair manner.

An ombudsman is a respected employee who will hear both sides of an argument and attempt to arrange a solution acceptable to both sides. Some organizations include an ombudsman position in the hierarchy. Any individual or group with a complaint may take it to this individual, who then works toward a resolution.

Mediation employs a trained arbiter to �ind innovative solutions to the con�lict. Many unionmanagement disputes are settled through mediation.

Arbitration retains a third party who operates in a formal, court-like environment and hears testimony and evidence before rendering a judgment about how the con�lict should be resolved. Arbitration can be used to settle con�licts over pay or job assignments. It is often viewed as the "last resort," when no other method has been successful.

Con�lict Outcomes

The goal of any con�lict resolution should be to reach a functional settlement. Desired outcomes of con�lict resolution include agreement, stronger relationships, and organizational learning. Agreement is achieved when both sides believe a settlement was fair or equitable. Stronger relationships emerge when both parties try to build trust and goodwill for the future. Organizational learning takes place when an individual or group achieves greater selfawareness or better understands how to �ind creative solutions to problems.

Table 7.3 lists some of the additional positive outcomes associated with con�lict. These can occur at the interpersonal, intergroup, and intragroup levels. Positive outcomes are sometimes dif�icult to achieve, in which case certain negative aftereffects of con�lict may result. These aftereffects are noted in Table 7.4.

Table 7.3: Positive outcomes of con�lict Positive outcomes

Con�licts may serve as safety valves to reduce pent-up emotions and pressures.

Con�lict generated by external threats may increase internal cohesion.

Con�lict can help introduce much-needed change.

Con�lict can bring long-standing animosities and hidden agendas to the surface.

Con�lict may trigger creativity and innovation.

Con�lict resolution may foster increased communication in the future. Source: King, D. (1981, January–February). Three cheers for con�lict! Personnel, 58(1), 13–22.

Table 7.4: Negative aftereffects of con�lict Negative aftereffects

Con�lict may foster anger and revenge which can lead to continuing attempts to make the other side look bad.

Con�lict may result in noncompliance with orders and decisions.

Con�lict may cause reduced effort or passive resistance from one or more parties.

Con�lict may lead to empire building, withholding information, or territory defense.

Con�lict may encourage an increasingly legalistic approach to tasks and assignments.

Con�lict may result in withdrawal behaviors such as daydreaming or meeting in groups to visit rather than to resolve issues.

Con�lict may lead to new lobbying efforts.

Con�lict may encourage sarcasm in front of the mediator.

Con�lict may increase sensitivity to statements and comments. Source: King, D. (1981, January–February). Three cheers for con�lict! Personnel, 58(1), 13–22.

Effective management of con�lict seeks to lead to the potential positive outcomes noted in Table 7.3 and avoid the potential negative aftereffects noted in Table 7.4. Doing so includes two primary activities. First, managers should actively analyze potential sources of con�lict at all times, so that these sources can be eliminated. Second, managers should seek to become quality con�lict arbiters. They should remember that impartiality, a sense of humor, and a calm disposition are major assets in con�lict resolution.

Approaches to Dispute Resolution From Title: Employment Relations and Conflict Resolution

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With the looming threat of infectious disease, the line between paranoia and reasonable caution can become blurry.

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7.3 The Nature of Negotiations and Bargaining Processes As noted at the start of the chapter, con�licts can emerge practically without notice, and no intervening step can be taken to prevent them or even slow them down. At the same time, many forms of latent con�lict are resolved through relatively calm, rational processes including mediation, negotiation, or even a simple face-to-face discussion. Unfortunately, what begins as an uneventful negotiation can evolve into a more dramatic con�lict. This section explains methods managers can use to prevent a less signi�icant dispute or bargaining issue from turning into an outright con�lict.

Negotiation is a give-and-take decision-making process involving interdependent parties with differing objectives or outcome preferences (Bazerman & Neale, 1992). Two perspectives exist regarding the terms "negotiation" and "bargaining." Some sources identify them as being the same (Robbins, 2005, p. 434; Wall, 1985). Others take a slightly different view, suggesting that negotiation refers to a win-win situation in which the ultimate objective is to �ind solutions that are mutually acceptable to all parties to a complex con�lict. Bargaining, on the other hand, represents a competitive "win-lose" circumstance in which each party seeks to obtain the best possible outcome for their side (Lewicki, Barry, & Saunders, 2010, p. 3).

In this chapter the two terms will be used interchangeably. Negotiations and what could be perceived as "bargaining" may not always be clear-cut, as noted in the OB in Action case regarding quarantine for health care workers who treated patients with the Ebola virus in Africa a few years ago.

OB in Action: The Quarantine Controversy

In 2014, a major outbreak of the Ebola virus in West Africa spread worry and concern on practically a world-wide basis. The highly contagious disease resulted in thousands of deaths and concerns of epidemics in new places. Con�lict and negotiation emerged in several situations, based on whether returning health care workers who treated Ebola patients should be quarantined following their arrival in the United States.

In New Jersey, Nurse Kaci Hickox was placed into a mandatory quarantine due to rules established by the state government. She complained that the governor at that time, Chris Christie, was "not a doctor" and called the policy "poorly planned" and "not evidence-based." Hickox, a volunteer nurse for Doctors Without Borders, tested negative for the virus upon her arrival in the U.S. She described the quarantine as inhumane and arbitrary.

The federal government quickly tried to respond. Members engaged in urgent discussions with the governors of New York, New Jersey, and Illinois over plans to quarantine all health workers coming back from infected areas. The national government did not take the ultimate step of asking that quarantines be lifted, but spokespersons raised concerns about creating undue panic in the general population (The Guardian, 2014).

Hickox was eventually released from quarantine, and returned to her home in Maine. Soon after, the controversy re-emerged as governor Paul LePage raised concerns about where she would be allowed to travel, even as she took a bike ride in her community. Hickox's attorney Norm Siegel told CNN that Hickox went for the ride to make a point: She could be in out in public "without freaking everyone out." LePage's of�ice vowed to "exercise the full extent of his authority allowable by law" to keep her away from public spaces (Fantz & Hanna, 2014).

The standoff raised the question: Should this issue be resolved based on fear or facts? "The worst thing would be is if she steps out of her house in the next hour and they try to put handcuffs on her," Siegel said. In the end, she did not contract the virus or infect any other person.

Re�lection and Application Questions

1. Can you name all of the parties and stakeholders in this situation? 2. Evaluate the state government's intervention in this controversy? 3. What type of resolution resulted from this negotiation: win-win, win-lose, or a compromise?

In employment settings, two types of negotiations take place: distributive negotiations and integrative negotiations (Walton & McKersie, 1965). Distributive negotiations involve a single issue and a zero-sum game in which one side's gains become the other side's losses (win-lose), similar to a con�lict resolution. A furniture manufacturer negotiating the price of fabric used to cover sofas serves as an example. Every dollar that the manufacturer has to pay for the raw material represents a dollar of revenue to the fabric supplier.

The second circumstance, an integrative negotiation, resembles a problem-solving agenda in which both sides try to obtain a settlement that bene�its both—a win-win solution. In today's complex marketplace, integrative negotiations have grown in popularity and usage. Table 7.4 identi�ies some of the key differences between distributive and integrative negotiation.

Table 7.4 Integrative versus distributive negotiation Integrative Distributive

Assumption Basic goals do not con�lict Basic goals are fundamentally opposed

Building a relationship A strong priority Not a priority

Resources Can expand A �ixed amount

Level of trust Is possible or exists Not possible

In essence, a distributive approach resembles a zero-sum game, such as poker. One party wins by taking away "chips" from the other. Consequently, any goals cannot overlap between the two and trust is not likely. Relationships cannot be strengthened when this approach prevails.

The integrative method assumes resources resemble a "balloon concept" in which they can be expanded when necessary. Trust can be built to combine resources and goal agreement can be reached. This method, in turn, makes it possible to build positive and lasting relationships.

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Integrative negotiation requires a different mindset. In essence, the negotiator must be able to separate personal feelings (including differences) from analysis of the problem. Further, both sides must be able to concentrate on positions rather than merely the interests of their side or group. The agenda should include time to seek out mutually bene�icial ideas rather than merely gaining an advantage.

The primary problem which can emerge from an integrative approach occurs when one side mistakes the attempt to build a relationship with "softness" or "weakness." If one party assumes a competitive advantage exists due to the willingness to cooperate from the other, the approach is destined to fail.

With the differences between the two approaches (integrative versus distributive) in mind, Table 7.5 identi�ies three types of negotiations that take place in the business community. The categories include negotiations between an individual and a company, between two companies, and between a company and an outside agency or organization. Both distributive and integrative negotiations take place in those areas.

Table 7.5: Types of negotiations Between individual and company

Employment contract

Wages

Bene�its

Between two companies

Sales

Partnerships

Between company and outside group

Company management and unions

Company and government

Company and special interest groups

Preconditions to Negotiation

Prior to any negotiation process, careful deliberation should be given to whether negotiating represents the best option. Preconditions for bargaining involve ensuring that several circumstances exist. Three areas to consider are the psychological climate, the availability of resources, and the characteristics of the bargaining issue.

The Psychological Climate Negotiation can take place only when the parties involved exhibit certain mental characteristics. When the proper frame of mind does not emerge, negotiations become more likely to fail. The most important psychological elements are (Moore, 2011):

willingness to participate in negotiations readiness to negotiate agreement on some issues willingness to settle sense of urgency

The willingness to participate begins with the ability to identify key parties to a negotiation. Managers should be aware of who the various stakeholders are prior to any bargaining process. A stakeholder is a person or group with a vested interest in the outcome of a negotiation. In the case of negotiations with outside agencies, for example, it may be possible that a company will seek to reach an agreement with a union while at the same time remaining aware of governmental constraints, such as those related to bargaining in good faith, equal opportunity legislation, and antitrust laws. Stakeholders should tangibly demonstrate their readiness to be seated at the bargaining table. If a stakeholder group is absent or unwilling to commit to good-faith bargaining, the potential to �ind a viable solution is reduced.

An individual or group conveys the readiness to negotiate through a commitment to conduct the needed investigation prior to any �irst meeting. The stakeholder should have adequate time to prepare a negotiation strategy. Before beginning any actual negotiation, all sides should be able to say, "We're ready."

Negotiation will not be possible unless some agreement on issues and interests can be identi�ied. Although various issues may be of concern to only one party, negotiation becomes less of an option unless some mutual interests are found. For example, a union should be able to agree with company leaders that ensuring working safety is in the interest of both sides. The parties should be able to commit to a joint decision-making process based on these agreements (Kolb & Williams, 2003).

Negotiations succeed when participants are willing to settle. When continuing a con�lict becomes more important than settling, negotiations tend to fail. Consequently, for an agreement to be reached, the negative consequences of failing to �ind an agreement must be more signi�icant than the negative consequences of keeping the con�lict going. Also, when one side expresses or holds unexpressed negative animosity toward another party, it can sharply affect psychological readiness to bargain. These barriers must be lowered so that participants will become more willing to settle. The most standard approach to lowering such barriers involves starting with all points of agreement and common ground prior to discussing any disputed areas.

Finally, time frames also in�luence the psychological climate surrounding potential negotiations. When no deadline, pressure, or urgency to reach an agreement appears, negotiations are less likely to proceed. A sense of urgency may be imposed either by external or internal time constraints or by potential negative or positive consequences to a negotiation outcome, such as a court date or the time when an existing sales or union contract is set to expire. A side that can afford to procrastinate has an advantage in a negotiation in which the other side experiences a sense of urgency.

The Availability of Resources In order for a negotiation to take place, resources must be present, such as suf�icient time and money to fully engage in a dialogue. An additional bargaining resource includes the bargaining skills of key negotiators. In general, when one side's resources are inadequate or unequal to the other side's resources, the �irst side's bargaining position may be weakened to the point at which negotiations become dif�icult to conduct.

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In situations where negotiation is not plausible, alternative methods are available, such as mediation.

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The resources held by a group in a negotiation include a "means of in�luence" form of leverage. Classic views of power suggest that in�luence is based on legitimate, reward-based, coercive, expertise-oriented, and charismatic means (French & Raven, 1959), as displayed in Table 7.6. Often, the tendency may be to think �irst about the use of coercion to achieve bargaining objectives; however, persuasion may also result from using the other methods.

Table 7.6: Means of in�luence in negotiation Type of in�luence Description

Legitimate Based on a negotiator's superior position due to a governmental dictate ownership of a patent or similar protection contractual advantage from a previous negotiation

Reward based Based on the ability to promise rewards such as access to additional business partners/customers or the potential that a basis will be established for future agreements

Coercion Based on the ability to deliver negative consequences such as loss of revenues loss of supplies damaged relations with customers damaged relations with governmental organizations

Expertise Based on in�luence achieved through presentation of factual evidence and/or analysis by experts in the area or �ield

Charisma Based on the use of personal persuasiveness, thought-provoking questions, and discussion

The Characteristics of the Bargaining Issue The bargaining issue, or the primary item to be negotiated, poses an impediment or creates the need to bargain. To reach the status of a viable bargaining issue, several factors should be in place:

interdependence willingness to compromise unpredictability of the outcome negotiable issues participants hold the authority to decide

Interdependence. The high level of attachment or necessary interaction between the parties results in interdependence. An employee bargaining for salary offers to exchange a skill or talent; and the organization, which needs that skill or talent, agrees to a level of compensation. The exchange creates interdependence. Parties to a sale, such as the provider of a raw material and a manufacturer, should in some way rely on each other—that is, be interdependent—in order to have their needs met or interests satis�ied. When one party to a bargaining arrangement �inds it can satisfy its needs without the help or cooperation of the other, no real reason to negotiate exists.

Willingness to Compromise. Company leaders know that not all negotiations require compromise. Parties may reach an agreement that meets the needs of all participants without a concession from any party. In many disputes, however, compromise may be necessary for the parties to reach an agreement. If one side determines that the other has "dug in" and no compromise will be possible, negotiation becomes a less viable option.

Unpredictability of the Outcome. Parties will also negotiate when the outcome of an issue cannot be predicted. For example, if one company knows that a lawsuit against another company only has a 50% chance of success, the �irm's management team may decide that its best interests are served by negotiating instead. The reason for the decision would be that by negotiating, the company would receive at least some of what it wants; on the other hand, if the parties pursue litigation, a court order may completely favor the other side by imposing a judgment and damages against one of the two parties. The same holds true when an individual considers suing another person or a company.

Issues. For successful negotiation to occur, negotiators must believe that there are acceptable settlement options. Room for give and take must be present. When only win-lose settlement possibilities occur, the parties involved become more reluctant to enter into dialogue.

Participants Hold the Authority to Decide. In any negotiation, the participants involved must have the authority to make a decision. When they do not, or when a rati�ication process has not been established, negotiations will normally be limited to an information exchange between the parties (Lewicki & Hiam, 2006, pp. 40–73).

Alternative Approaches

Prior to entering into a negotiation process, managers should evaluate and select a guide for the process. Among the methods available for a two-sided event, negotiation represents only one option. Other options include facilitation, mediation, arbitration, and the courts, which were discussed earlier in the chapter. These additional methods should be investigated, especially when it becomes clear that negotiation is not an option: for example, if the other side has made unethical demands or acted in bad faith. Negotiation should also not be an option if your side

has not prepared. would have an improved position by simply waiting. does not have time to negotiate. could lose everything. has little or nothing to gain. (Lewicki, Barry, & Saunders, 2010; Levinson, Smith, & Wilson, 1999)

In summary, the give-and-take decision-making process of negotiation can seek the goals of winning at the expense of the other side in a distributive process, or can seek a settlement that assists both sides in an integrative negotiation. Prior to any negotiation, the persons or groups involved should assess the psychological climate, the availability of resources, and the

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characteristics of the bargaining issue, taking into account circumstances in which other dispute resolution options are more viable.

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7.4 The Stages of Negotiation When the parties have determined that negotiation represents the best option for settling an issue, an individual or company begins the various stages of negotiation. Results can be achieved by careful management of the entire process. At the most general level, negotiation consists of three overall stages: the initial, middle, and ending stages. Table 7.7 presents the various tasks that take place within this three-stage model of negotiation.

Table 7.7: The stages of negotiation Initial Stage Middle Stage Ending Stage

Prepare Open

Argue Explore Signal Package

Close Sustain

Source: Adapted from: Baack, D. (2012) Management Communication. Bridgepoint Education, Inc., p. 232.

The Initial Stage

The initial stage of negotiation consists of two primary activities: preparation and opening. When managers plan thoroughly, the chances for achieving desired bargaining goals increase. The failure to plan provides the other party with a bargaining advantage that continues through the remainder of the process.

Preparing At the point in which management determines that negotiations should go forward, preparation begins. Managers should employ several principles to guide preparations:

Identify and prioritize goals. Establish a settlement range. Focus on long-term goals and consequences. Concentrate on mutual principles and concerns.

When a single-party negotiation takes place, an individual may be trying to bargain for the best possible pay package, buyout, or retirement settlement. The individual's bargaining goal depends on his or her circumstances. A person taking a buyout who also plans to continue working has goals that are different from someone intending to retire. When someone is negotiating for a salary, several key factors determine exactly what that individual will bargain for, including the prevailing market rate, current economic conditions, bene�its offered, long-term considerations (building a career versus having a job for the time being), and the individual's tangible personal accomplishments (Brophy, 2004).

In a similar fashion, when parties bargain as part of a purchasing situation, two companies may seek to make a one-time purchase at the best possible price or use the negotiation process to build a longer-term relationship with the other organization. A company bargaining with a union might prioritize avoiding a work stoppage or seek to achieve the best possible deal regardless of the cost.

Finding the settlement range—the bargaining zone in which acceptable outcomes are located—results from knowing the company's priorities, its available resources, and the strength of its bargaining position. A negotiator needs to know the boundaries prior to beginning any session. An individual bargaining with the company establishes similar "�inal offer" points. To �ind the settlement range, the mediator should:

Collect and analyze relevant data about the people and dynamics involved in the problem. Verify the accuracy of the data. Minimize the impact of inaccurate or unavailable data. Identify all parties' substantive, procedural, and psychological interests. (Moore, 2011, para. 66)

Long-term goals and consequences include issues such as trust and con�idence in the other party. Mutual principles and concerns begin with whether the relationship will be adversarial or cooperative. One of the more destructive forces in the process can take place when the urge to win overwhelms rational thinking (Malhotra, Ku, & Murnighan, 2008). Preparation involves selecting approaches or procedures that lead to problem solving whenever possible.

Opening The opening stage begins when parties make initial contact in person, by telephone, or by mail. In this initial stage, efforts to build rapport and establish a cordial relationship can ease early tensions. Negotiators should express the desire to reach an acceptable agreement. Expressing one's commitment to follow through with procedures that have been established creates a more professional tone. Those involved should check their perceptions of the other side and seek to minimize the effects of stereotypes. Both sides should fully understand the processes that will be used (Moore, 2011).

At the same time, each negotiator should understand that "no" can be the opening position, and that the �irst offer made by the other side will often be quite different from his or her expectations. The bargainer or team should be aware of the "reluctant buyer" (or seller) ploy, which involves deliberate stalling and conveying an unwillingness to reach a quick agreement. As part of the opening, the negotiator should be ready with tactics to respond to these and other complications. Doing so includes developing a strategy to handle strong emotions (Shell, 1999). When opening, the negotiator should employ the following steps:

Introduce all parties. Exchange statements that demonstrate willingness to listen and share ideas, show openness, and demonstrate desire to bargain in good faith. Establish guidelines for behavior State mutual expectations for the negotiations. Describe history of problem and explain why there is a need for change or agreement. Identify interests and/or positions. De�ine issues and set an agenda. (Lewicki & Hiam, 2006)

In sum, preparation leads to con�idence. However, con�idence should be accompanied by caution. An analysis of the issues coupled with seeking to understand the other party helps lead to an effective bargaining session.

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The opening stage is meant to build familiarity between the two parties.

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The Middle Stage

Once negotiations are fully under way, a wise approach is to start with an issue in which there is high investment on the part of all participants, where no serious disagreements are present, and in which a strong likelihood of agreement exists. Then, parties should take turns describing how they view the situation. A moderator or one party can encourage participants to express their side in enough detail to ensure that all involved understand the individual's or group's viewpoint. The negotiating parties should listen actively to one another, ask openended questions, and focus on collecting information. The middle stage, as noted in Table 7.7, includes the processes of arguing, exploring, signaling, and packaging.

Arguing Negotiators more ef�iciently argue when both parties �irst identify speci�ic issues to be discussed. These issues should be framed in a nonjudgmental, neutral manner whenever possible. As issues of dispute are raised, both sides reveal information that bene�its their arguments and avoid revealing damaging information. Various persuasion techniques are employed, including silence, verifying information, and recon�iguring arguments to best suit a party's position (Goldman & Rojot, 2003). An example of using silence includes waiting until the other side makes an offer, which means, as many salespeople will note, "the �irst person to speak loses." Further, arguments may be recon�igured, such as when one side says, "We can afford to buy this," and the opposing side responds, "You can't afford NOT to buy this," thereby attempting to increase the value of what has been offered.

In the arguing phase, negotiators can use a variety of additional techniques. Some attempt to control the agenda of the sales meeting by ensuring that only relevant information that pertains to the potential sale is discussed. Buyers may attempt to control the agenda as well. Either party may attempt to slice a deal by tabling issues on which they cannot reach agreement and instead focusing on smaller slices of the deal. They may also attempt to split the difference when arriving at a �inal deal. Here, they would focus on meeting halfway on subjects such as price, delivery demands, and other issues pertaining to the �inal agreement (Baack, Harris, & Baack, 2012).

A key concept that drives negotiators in the arguing stages is BATNA, which stands for Best Alternative To a Negotiated Agreement. The BATNA concept typically determines the lowest acceptable value in the negotiation, because anything that is more desirable than the best outside alternative is likely to be accepted (Bazerman & Neale, 1992, pp. 67–68). Ideally, BATNA is identi�ied as part of the preparation for a negotiation, because it allows the person bargaining to know when an offer is higher than one that would lead to an impasse because it is above that "�loor" level. A negotiator will often try to discover the BATNA of the opposing side in order to further expedite negotiation arguments.

Exploring During the exploration stage, parties try to generate options for settlement. Exploring involves reviewing the needs of parties that relate to disputed areas and looking for agreements in principle. Negotiators may consider breaking a major issue into smaller, more manageable issues and generating solutions for these sub-issues. Exploration tactics include:

Expanding the pie so that bene�its are increased for all parties. Alternating satisfaction so that each party has his or her interests satis�ied but at different times. Trading items that are valued differently by parties. Looking for integrative or win-win options. Using trial and error to generate multiple solutions. Trying silent generation in which each individual develops privately a list of options and then presents his or her ideas to other negotiators. Conducting position/counterposition option generation. Separating generation of possible solutions from evaluation. (adapted from: Lewicki, Barry, & Saunders, 2010)

As part of the exploration process, a negotiator, when asked for a concession, will often request a tradeoff. The bargaining party should be wary of any person that attempts to rely on a "higher authority," such as "My boss won't go for that offer," as a rationale for not meeting various negotiation points. Also, effective bargainers are aware of the "vise" tactic, in which the other side continually uses phrases such as "You'll have to do better than that" to put the squeeze on a bargaining position.

As noted in the de�inition of negotiation, exploration occurs when true give and take takes place. The two parties can defend areas of greatest interest to their sides while offering compromises in other areas. Exploration can help identify hidden interests or agendas of the other side. Bargaining parties can probe each issue either one at a time or together to identify interests, needs, and concerns of the principal participants in the dispute. Exploration continues unless or until a stalemate takes place.

Signaling A signal can take one of several forms. One is recognition that an impasse has been reached, such as when one side or a mediator says, "We're not getting anywhere." To handle an impasse, three approaches might be used: (a) the issue might be set aside so that other issues can be dealt with; (b) one of the negotiating points might be changed; or (c) an outside party might be brought in to seek a resolution.

Another type of signal notes that agreeable terms are in sight. When a negotiator says something along the lines of "I think we're getting close," the signal has been sent. When a union negotiator responds, "I think our members would ratify that proposal," a signal of potential agreement has been offered.

Packaging

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Negotiations are generally closed with a written acknowledgement, but verbal acknowledgements, as well as symbolic gestures, may occur as well.

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Once a signal has been sent that agreement is possible, a package can be reached. Packaging is the part of the process where negotiators assess �inal options for settlement. This includes a review of the interests of the parties involved and an analysis of how many interests can be met by the available options. Part of assessing options is that both sides evaluate the costs and bene�its of each option. At that point, a party can revise bargaining strategies when needed. In general, the consensus is that one side's power increases when the other side �irst commits. Therefore, both sides should be willing to note agreement in order to move toward a �inal arrangement.

The Ending Stage

The ending stage commences when the two sides agree to the alternative or set of alternatives. An individual negotiating for salary and bene�its reaches the ending stage when all elements of the employment contract have been agreed upon. A sale reaches the ending stage when the terms, including price, delivery schedule, �inancing, and other matters have been settled. An agreement between a company and a union occurs when all issues present in the bargaining session have been resolved. Two elements of the ending stage are the close and efforts to sustain the agreement.

Closing The close includes the moment when the parties establish a procedural means to �inalize the agreement. It may take the form of a written memorandum or a legal contract. The bargaining arrangement should contain suf�icient detail to implement the agreement and handle any contingencies that might arise. Monitoring protocols may also be established.

An individual negotiating employment with a company has reached the close when a contract or memo spells out the date employment will begin, along with all of the details of the agreement. In some circumstances, a verbal acceptance is all that is necessary. Ordinarily, however, it is better to put the agreement in writing.

A sale is closed when papers specifying the nature of the purchase have been signed or verbally agreed upon by both sides. For example, a bill of lading speci�ies the contents of a shipment of goods.

A close between two companies creating an arrangement such as a merger or joint venture occurs when the two sides have formally signed legal documents creating the relationship. A close between a union and a company takes place when the bargaining contract has been agreed upon and a vote by union members certi�ies the contract, making it ready for a signature from negotiators for both sides. Monitoring of union–management agreements normally includes speci�ied procedures for �iling grievances regarding contract violations or other matters of contention or disagreement.

A handshake provides a symbolic �inalization of an agreement. When congratulations are offered, both parties are able to relax and enjoy the accomplishment of concluding an acceptable agreement.

Sustaining Efforts to sustain an agreement include establishing monitoring protocols. Standard methods used to sustain agreements include follow-up phone calls, letters, and other interactions. These contacts help reassure the other side that the agreement is acceptable and that the terms will be carried out. Monitoring in a sales situation includes updates regarding when orders have been shipped and received. A performance bond also helps guarantee a project will be properly completed, such as construction of a building or facility.

Con�lict and Negotiation Across Cultures

Culture is a major in�luence during the negotiation process (Adair, Okumura, & Brett, 2001) as well as during any con�lict resolution process. When both buyer and seller are from the same culture, negotiations can be fairly straightforward. In cross-cultural negotiations, dif�iculties are more likely to arise. Table 7.8 provides examples of some of the primary differences.

Table 7.8 Cross-cultural issues in negotiation and con�lict Factor Example

Time Arriving on time versus being late Length of time needed to reach resolution Time differences between countries

Language Aggressive versus deferent forms of speech Degree of formality/use of names and titles

Use of slang Differences in meaning of slang terms

Gestures Differences in meaning of gestures

Rank Rank of individual assigned to the negotiation Differences in rank of negotiators

Gender Treatment of women

Setting Place negotiation/con�lict resolution occurs

Legal difference Form of legal system in both countries

Religious differences Roles of religious values in both countries

Cultural differences Norms and social mores

Technology Use of technology Trust/distrust of technology

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The Negotiation Process in India

Indian professionals discuss the typical negotiation process in India.

Critical Thinking Questions

1. How is India's negotiation process similar to that of the United States?

2. How is it different?

Infrastructure Presence or absence in countries involved

As Table 7.8 indicates, parties in negotiations and in con�lict situations may have major differences in ways of thinking and behaving, and these factors come directly into play (Hamner, 1980). The use of words, ceremony, and the relative status of the bargaining parties often affects negotiations (Gulbro & Herbig, 1996). Some negotiators are unwilling to follow any prescribed negotiating script or routine. In that context, what is left unsaid may be as important as what is actually said.

Consider a few basic complications. In one country, the use of bribery may be standard business practice, and bribes paid may be tax-deductible costs of doing business. In another, such a tactic would be illegal. Further, in many countries laws regarding intellectual property (patents, for example) vary widely. A bargaining process or con�lict resolution interaction might be disrupted by such legal discrepancies.

With regard to deference between parties, a person in an international negotiation can hold rank within one organization, but fail in con�lict resolution when the individual is not respected by other parties, for any reason, including the fact that the person is simply an outsider.

Time perceptions can affect negotiations, as well. Some buyers take longer than others during the negotiation process. Buyers in Japan, for example, are usually much slower to make decisions than buyers in the United States. Attempting to instill a speci�ic deadline, a popular negotiation tactic, may be met with much hesitation in Japanese culture.

In some countries, a popular negotiation tactic, bluf�ing, involves threatening to walk away from negotiations when the other side will not move from a position or is not willing to concede as much as is needed to close the deal. In other nations, such a tactic would be highly offensive. Effective salespeople utilize cultural intelligence and cross-cultural competence to arrive at an agreement that is satisfactory to both themselves and the purchasing organization.

Cultures also vary in terms of willingness to argue or display aggressiveness (Schmidt, 1987). In many cultures, negotiations cannot begin until positive relationships have �irst been formed, and many times bargaining will be viewed as an unending process (Lubman, 1993). Other factors that often in�luence international negotiations include the use of eye contact, the amount of physical distance between the parties (including actually touching the other person), gift giving, and protocols for agreement (bowing versus a handshake).

A cultural assimilator may be called upon to help with international negotiations. As discussed in Chapter 1, a cultural assimilator is a person versed in the culture of another country who aids in understanding how to interact in that culture.

Bargaining situations and con�lict resolution processes, as this section suggests, involve a considerable amount of time and detail. Managers who effectively deal with each stage achieve better results during negotiation sessions.

The Negotiation Process in India From Title: Business Culture: India—Global Business

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Summary and Resources

Chapter Summary

Negotiation, con�lict, and con�lict resolution share many common elements. People are at the heart of such similarities. Many of the factors that lead to con�lict and negotiation are similar, such as the distribution of resources (pay, budgets), human resource decisions (hiring, �iring, task assignments, performance appraisals, transfers), goal disagreements, and other managerial decisions of all sorts can either result in a more systematic and organized negotiation or an outright con�lict that calls for resolution.

Con�lict is a circumstance in which one party negatively affects or seeks to negatively affect another party. Functional or cooperative con�lict occurs when the organization's interests are served in some way, such as through improvement in performance or greater cooperation among individuals or groups. Dysfunctional con�lict takes the form of destructive activities that hinder group or organizational performance. The four levels of con�lict are intrapersonal or intrapsychic con�lict, interpersonal con�lict, intragroup con�lict, and intergroup con�lict.

The con�lict cycle begins with latent con�lict, which includes all potential sources of con�lict at the individual or group level. Felt con�lict occurs when people know something is wrong but cannot pinpoint the source. Perceived con�lict means that those near a con�lict know the issues and the people involved, yet do not feel discomfort from it. In open con�lict showdowns, confrontations, and other outward signs of manifest con�lict appear. Open con�lict requires some form of resolution.

Con�lict resolution includes understanding the concerns of the parties involved. The dual concerns model suggests a combination of concerns about one side's outcomes and concerns about the other side's outcomes. When one side has little concern about the other's outcomes, the two possible responses are contending (competing) and inaction (avoiding). In circumstances in which concern for the other's outcomes are high, the two possible actions are yielding (obliging) and problem solving (an integrating approach). When moderate levels of concern for both personal and the other side's outcomes are present, the most common approach involves compromising.

The steps of the con�lict resolution process include identifying the parties involved, identifying the issues, identifying the positions of the parties, �inding the bargaining zone, and making a decision. Decisions may be win-lose, lose-lose (compromise), or win-win solutions.

Alternative dispute resolution attempts to incorporate more user-friendly methods of dispute resolution, and seeks to avoid adversarial approaches. It uses methods such as facilitation, conciliation, peer review, ombudsman, mediation, and arbitration. Desired outcomes of con�lict resolution include agreement, stronger relationships, and organizational learning.

Negotiation is a give-and-take decision-making process involving interdependent parties with differing objectives or outcome preferences. Distributive negotiations involve a single issue and a zero-sum game in which one side's gains become the other side's losses (win-lose). Integrative negotiations resemble a problem-solving agenda in which both sides try to obtain a settlement that bene�its both—a win-win solution. Negotiations take place between individuals and companies, between companies, and between a company and an outside group. During the preconditions to negotiation stage, three areas to consider are the psychological climate, the availability of resources, and the characteristics of the bargaining issue.

The initial, middle, and ending stages require managerial attention. The initial stage involves preparation and a quality opening. The middle stage consists of several phases: arguing, exploration, signaling, and packaging potential solutions. The ending stage involves a close and the attempt to sustain the agreement to its full implementation. Preparation, negotiating tactics and methods, and closing methods can make a bargaining session more palatable for all concerned. Special consideration should be given to international negotiations. A cultural assimilator can be a valuable asset in international bargaining situations.

CASE STUDY: Sarah's Dilemma

Sarah Norville loved her job as an advertising media buyer and consultant. She worked for Impact Advertising, one of the 20 largest advertising agencies in California. Her tenure began straight out of college after she served an internship in the company. She knew many of the employees in her department and in other areas, and had tried hard to develop a reputation as a professional, competent, and pleasant coworker.

Sarah took the position after turning down an offer from another agency. The other offer included a higher salary and a managerial title; however, she was not convinced the company's future was as bright as she expected Impact Advertising's would be. She believed that her immediate supervisor, Rick Watson, would adjust her salary when he learned of her value to the agency.

After the �irst four months on the job, a casual dinner with a coworker had a major impact. The coworker informed Sarah that she was among the lowest- paid new hires from the previous year, even though she had more experience as the result of her internship. Impact Advertising had tried to maintain a secret pay policy—with little success. This incident was just one more example.

Sarah approached Rick carefully. She explained her frustration with a lower rate of pay than others with less experience. She also noted that her work during the �irst quarter had earned her the highest possible ranking at her performance appraisal.

Rick responded, "Well, you did accept the offer we made. And you have to remember, two of those hires also had taken some graduate courses. That sort of offsets experience."

Sarah replied, "I plan to start an MBA this summer. Just one class. But over time, I plan to complete the entire program."

Rick smiled, "Well, when you do, I will guarantee we will make this right. If you �inish your MBA, you will earn at least $10,000 more than any of your cohorts, if they're still here. Meanwhile, I can bump you up some now." The salary he offered moved her within 85% of what the top new hire was earning. She had been at 75% of that �igure. She reluctantly accepted.

Sarah accelerated her MBA work, sacri�icing overtime and some highly exciting projects in order to complete her course work. It took her two years to accomplish her goal of a graduate degree.

During that time, her salary increased by $5,000 annually.

When Sarah handed Rick her diploma, she expected to receive the raise he had promised. Technically, what she was offered did re�lect what he said. She was to earn $10,000 more than the starting salary of her highest-paid coworker. Meanwhile, that coworker had also received a $5,000 salary increase, meaning that the differential between them was only $5,000.

Sarah asked for a meeting with Rick, a member of human resources, and the agency's vice president. She prepared her case, pointing out that she had been systematically underpaid for two years, and that now the company was again offering what she termed a "low-ball" pay raise. She noted that even

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with her extra time in class her performance appraisals had been among the highest in the company. She �inally asked, "Why won't you guys just do the right thing?" She knew that if they did not respond effectively, other agencies would love to have her skills and educational achievements.

Case Questions

1. Who are the parties involved in this negotiation? 2. What are the negotiation issues? 3. Explain how the processes of arguing, exploring, signaling, and packaging might become part of the meeting between Sarah and the others, if they

are willing to negotiate. 4. Use the con�lict model presented in this chapter to explain the issues in this case. 5. Might Sarah's gender be an issue in this scenario? What other potential ethical issues are involved?

Review Questions

Click on each question to see the answer.

De�ine negotiation and explain the nature of distributive and integrative negotiations. (http://content.thuzelearning.com/books/Baack.3633.17.1/sections/cover/books/Baack.3633.17.1/sections/cover/books/Baack.3633.17.1/sections/cover/books/Baack.3633

Negotiation is a give-and-take decision-making process involving interdependent parties with differing objectives or outcome preferences. Distributive negotiations involve a single issue and a zero-sum game in which one side's gains become the other side's losses (winlose). An integrative negotiation resembles a problem-solving agenda in which both sides try to obtain a settlement that bene�its both, or a win-win solution. Integrative bargaining, in other words, is similar to a "negotiation."

What three preconditions to bargaining should be considered prior to entering a negotiation? (http://content.thuzelearning.com/books/Baack.3633.17.1/sections/cover/books/Baack.3633.17.1/sections/cover/books/Baack.3633.17.1/sections/cover/books/Baack.3633

The three areas to consider are the psychological climate, the availability of resources, and the characteristics of the bargaining issue.

What two activities are involved in the initial stage of negotiation? (http://content.thuzelearning.com/books/Baack.3633.17.1/sections/cover/books/Baack.3633.17.1/sections/cover/books/Baack.3633.17.1/sections/cover/books/Baack.3633

In the initial stage, two primary activities, preparation and opening, receive attention.

What are the four elements of the middle stage of negotiation? (http://content.thuzelearning.com/books/Baack.3633.17.1/sections/cover/books/Baack.3633.17.1/sections/cover/books/Baack.3633.17.1/sections/cover/books/Baack.3633

The middle stage includes the processes of arguing, exploration, signaling, and packaging.

Explain the two activities that take place during the ending stage of a negotiation.> (http://content.thuzelearning.com/books/Baack.3633.17.1/sections/cover/books/Baack.3633.17.1/sections/cover/books/Baack.3633.17.1/sections/cover/books/Baack.3633

Two elements of the ending stage are the close and efforts to sustain the agreement. The close includes the moment when the parties establish a procedural means to �inalize the agreement. Efforts to sustain an agreement include establishing monitoring protocols. Standard methods used to sustain agreements include follow-up phone calls, letters, and other interactions. These contacts help reassure the other side that the agreement is acceptable and that the terms will be carried out.

De�ine con�lict and competition and explain the nature of functional and dysfunctional con�lict. (http://content.thuzelearning.com/books/Baack.3633.17.1/sections/cover/books/Baack.3633.17.1/sections/cover/books/Baack.3633.17.1/sections/cover/books/Baack.3633

Con�lict is a circumstance in which one party negatively affects or seeks to negatively affect another party. Con�lict contrasts with another concept, competition, a condition in which all parties in an event or situation attempt to do their best, with the person or group producing the most desired outcome emerging as the winner. Functional con�lict occurs when the organization's interests are served in some way, such as improvement in performance or greater cooperation among individuals or groups. Functional con�lict is also called constructive, or cooperative, con�lict. Dysfunctional con�lict takes the form of destructive activities that hinder group or organizational performance.

What four levels of con�lict occur? (http://content.thuzelearning.com/books/Baack.3633.17.1/sections/cover/books/Baack.3633.17.1/sections/cover/books/Baack.3633.17.1/sections/cover/books/Baack.3633

The four levels of con�lict are intrapersonal (intrapsychic) con�lict, interpersonal con�lict, intragroup con�lict, and intergroup con�lict.

What are the stages of con�lict and the con�lict cycle? (http://content.thuzelearning.com/books/Baack.3633.17.1/sections/cover/books/Baack.3633.17.1/sections/cover/books/Baack.3633.17.1/sections/cover/books/Baack.3633

The stages are latent con�lict, perceived con�lict, felt con�lict, open con�lict, and the con�lict resolution process.

What con�lict styles are associated, respectively, with low concern for the other's outcomes, high concern for the other's outcomes, and moderate concern for the other's outcomes in con�lict resolution? (http://content.thuzelearning.com/books/Baack.3633.17.1/sections/cover/books/Baack.3633.17.1/sections/cover/books/Baack.3633.17.1/sections/cover/books/Baack.3633

When one side has little concern about the other's outcomes, two con�lict styles may result: contending/competing and inaction/avoiding. When concern for the other party's outcome is high, two con�lict styles are possible: yielding/accommodating and problem solving/ collaborating. When there are moderate levels of concern for the other party's outcome as well as one's own, the compromising con�lict style emerges.

What steps are involved in the con�lict resolution process? (http://content.thuzelearning.com/books/Baack.3633.17.1/sections/cover/books/Baack.3633.17.1/sections/cover/books/Baack.3633.17.1/sections/cover/books/Baack.3633

The con�lict resolution process involves the steps of: identify the parties involved, identify the issues, identify the positions of the parties, �ind the bargaining zone, and make a decision.

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Analytical Exercises

1. Identify forms of distributive and integrative negotiations in the following con�lict situations. (If one or the other is not possible, explain why.)

individual vs. company company vs. company company vs. outside group

2. Provide examples of situations under which the preconditions of negotiation cannot be met in the following circumstances:

An individual �iles a grievance alleging unfair treatment by a supervisor. A company that has �iled for bankruptcy seeks to negotiate the sale of merchandise to another company. A union negotiates with a company that plans to outsource most jobs.

3. Explain how the processes of arguing, exploration, signaling, and packaging occur in the following negotiations:

An individual seeks a higher initial salary offer. A supplier tries to raise prices of raw materials to a manufacturer. A company negotiator attempts to convince a government of�icial that a lower penalty for unpaid taxes should be imposed.

4. Provide an example of each stage of the con�lict cycle as it applies to an interpersonal con�lict based on incivility. an intragroup con�lict based on differing goals of two key members. an intergroup con�lict based on two groups vying for of�ices on the top �loor of a building.

5. In the dual concerns model, two key circumstances are (a) one party has low concerns for the other's outcomes and (b) one party has high concern for the other's outcomes. Explain how these two circumstances would affect the following thirdparty approaches:

facilitation conciliation peer review an ombudsman mediation

Key Terms

Click on each key term to see the de�inition.

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BATNA (http://content.thuzelearning.com/books/Baack.3633.17.1/sections/cover/books/Baack.3633.17.1/sections/cover/books/Baack.3633.17.1/sections/co

Acronym for Best Alternative to a Negotiated Agreement, which identi�ies the lowest acceptable value to a party in a negotiation.

con�lict (http://content.thuzelearning.com/books/Baack.3633.17.1/sections/cover/books/Baack.3633.17.1/sections/cover/books/Baack.3633.17.1/sections/co

A circumstance in which one party negatively affects or seeks to negatively affect another party.

con�lict cycle (http://content.thuzelearning.com/books/Baack.3633.17.1/sections/cover/books/Baack.3633.17.1/sections/cover/books/Baack.3633.17.1/sections/co

A model where con�lict moves from latent to perceived or felt con�lict, to open con�lict, and �inally to resolution and aftermath, which may in turn lead to new con�lict.

distributive negotiation (http://content.thuzelearning.com/books/Baack.3633.17.1/sections/cover/books/Baack.3633.17.1/sections/cover/books/Baack.3633.17.1/sections/co

A negotiation in which a single issue and a zero-sum game involve one side's gains becoming the other side's losses.

dysfunctional con�lict (http://content.thuzelearning.com/books/Baack.3633.17.1/sections/cover/books/Baack.3633.17.1/sections/cover/books/Baack.3633.17.1/sections/co

Con�lict that takes the form of destructive activities that hinder group or organizational performance.

felt con�lict (http://content.thuzelearning.com/books/Baack.3633.17.1/sections/cover/books/Baack.3633.17.1/sections/cover/books/Baack.3633.17.1/sections/co

What occurs when people know something is wrong but cannot pinpoint the source.

functional con�lict (http://content.thuzelearning.com/books/Baack.3633.17.1/sections/cover/books/Baack.3633.17.1/sections/cover/books/Baack.3633.17.1/sections/co

Con�lict in which the organization's interests are served in some way, such as improvement in performance or greater cooperation among individuals or groups.

integrative negotiation (http://content.thuzelearning.com/books/Baack.3633.17.1/sections/cover/books/Baack.3633.17.1/sections/cover/books/Baack.3633.17.1/sections/co

A problem-solving agenda in which both sides try to obtain a settlement that bene�its both (a win-win solution).

intergroup con�lict (http://content.thuzelearning.com/books/Baack.3633.17.1/sections/cover/books/Baack.3633.17.1/sections/cover/books/Baack.3633.17.1/sections/co

Con�lict that take place between various groups, such as between departments within a company or between factions such as ethnic groups or female and male employees.

interpersonal con�licts (http://content.thuzelearning.com/books/Baack.3633.17.1/sections/cover/books/Baack.3633.17.1/sections/cover/books/Baack.3633.17.1/sections/co

Con�licts that take place between individuals.

intragroup con�lict (http://content.thuzelearning.com/books/Baack.3633.17.1/sections/cover/books/Baack.3633.17.1/sections/cover/books/Baack.3633.17.1/sections/co

Con�licts or incidents between members of a group.

intrapersonal con�licts (http://content.thuzelearning.com/books/Baack.3633.17.1/sections/cover/books/Baack.3633.17.1/sections/cover/books/Baack.3633.17.1/sections/co

Con�licts that occur within an individual regarding ideas, thoughts, values, and emotions that contradict each other.

latent con�lict (http://content.thuzelearning.com/books/Baack.3633.17.1/sections/cover/books/Baack.3633.17.1/sections/cover/books/Baack.3633.17.1/sections/co

All the potential sources of con�lict at the individual or group level.

negotiation (http://content.thuzelearning.com/books/Baack.3633.17.1/sections/cover/books/Baack.3633.17.1/sections/cover/books/Baack.3633.17.1/sections/co

A give-and-take decisionmaking process involving interdependent parties with differing objectives or outcome preferences.

ombudsman (http://content.thuzelearning.com/books/Baack.3633.17.1/sections/cover/books/Baack.3633.17.1/sections/cover/books/Baack.3633.17.1/sections/co

A respected employee who will hear both sides of an argument and attempt to arrange a solution acceptable to both parties.

open con�lict (http://content.thuzelearning.com/books/Baack.3633.17.1/sections/cover/books/Baack.3633.17.1/sections/cover/books/Baack.3633.17.1/sections/co

Showdowns, confrontations, and other outward signs of con�lict.

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perceived con�lict (http://content.thuzelearning.com/books/Baack.3633.17.1/sections/cover/books/Baack.3633.17.1/sections/cover/books/Baack.3633.17.1/sections/co

What occurs when those near a con�lict know the issues and the people involved, yet do not feel discomfort from it.

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