Assignment 7

may2025

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Chapter 11

Managing Conflict and Negotiations

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Introduction

To perform, interdependent individuals and groups must establish working relationships

Across organizational boundaries

Between individuals

Among groups such interdependence may foster either cooperation or conflict

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As discussed in Chapter 10, organizations rely on work groups and teams to be successful. In organizations, employees and groups are dependent on one another for ideas, information, assistance, and other types of coordinated action.

Intergroup Conflict

Conflict is inevitable, but neither inherently good nor bad

Too much or too little conflict can have negative consequences

Some conflict situations produce nothing positive while others improve decision quality and employee relations

The critical issue is not whether conflict exists, but how it is managed

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In the past, many organizational practitioners operated on the assumption that any and all conflict was bad and thus should be eliminated. Today we understand that is not the case. A more accurate and enlightened view is that conflict is neither inherently good nor bad, but it is inevitable. It is true that too much conflict can have negative consequences because it requires time and resources to deal with it and because it diverts energy that could more constructively be applied elsewhere. Too little conflict, on the other hand, can also be negative in that such a state can lead to apathy and lethargy and provide little or no impetus for change and innovation. If everything is going smoothly, people may become too comfortable to want to make changes that could improve organizational effectiveness. Some conflict situations produce nothing positive. Other conflict situations, however, may be beneficial if they are used as instruments for change or innovation. For example, evidence suggests conflict can improve the quality of decision making and employee relations in organizations. Thus, in dealing with conflict, the critical issue is not so much the conflict itself but how it is managed. Using this perspective, we can define conflict in terms of the effect it has on the organization. In this respect, we shall discuss both functional and dysfunctional conflict.

Functional Conflict

A confrontation between groups that enhances and benefits the organization’s performance

Without it, there would be little commitment to change, and most groups would become stagnant

Functional conflict can…

Lead to increased awareness of problems

Result in broader, more productive searches for solutions

Facilitate positive change, adaptation, and innovation

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A functional conflict is a confrontation between groups that enhances and benefits the organization’s performance. Without this type of conflict in organizations, there would be little commitment to change, and cost groups likely would become stagnant. Functional conflict can lead to increased awareness of problems that need to be addressed, result in broader and more productive searches for solutions, and generally facilitate positive change, adaptation, and innovation.

Dysfunctional Conflict

Confrontation or interaction between groups that harms the organization or hinders the achievement of organizational goals

Such conflict should be eliminated

The same level of conflict that creates a healthy, positive movement toward goals in one group may be disruptive and dysfunctional in another

A group’s tolerance for stress and conflict can depend on the type of organization it serves

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A dysfunctional conflict is any confrontation or interaction between groups that harms the organization or hinders the achievement of organizational goals. Management must seek to eliminate dysfunctional conflict. Beneficial conflicts can often turn into harmful ones. In most cases, the point at which functional conflict becomes dysfunctional is impossible to identify precisely. The same level of stress and conflict that creates a healthy and positive movement toward goals in one group may prove extremely disruptive and dysfunctional in another group (or at a different time for the same group). A group’s tolerance for stress and conflict can also depend on the type of organization it serves.

Conflict and Organizational Performance

EXHIBIT 11.1 Relationship between Intergroup Conflict and Organizational Performance

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The relationship between the level of intergroup conflict and organizational performance that is consistent with a contemporary perspective is presented in Exhibit 11.1 for three hypothetical situations.

Conflict and Organizational Performance

Every organization has an optimal level of conflict that generates positive performance

When the conflict level is too low…

Performance can suffer

Innovation is less likely to happen

The organization may have difficulty adapting to its changing environment

The survival of the organization can be threatened

When the conflict level is too high, the resulting chaos can also threaten the organization’s survival

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As previously indicated, conflict may have either positive or negative consequences for the organization, depending on how much exists and how it is managed. Every organization has an optimal level of conflict that can be considered highly functional—it helps generate positive performance. When the conflict level is too low, performance can also suffer. Innovation and change are less likely to occur, and the organization may have difficulty adapting to its changing environment. If a low conflict level continues, the very survival of the organization can be threatened. On the other hand, if the conflict level becomes too high, the resulting chaos also can threaten the organization’s survival.

Conflict and Organizational Performance

EXHIBIT 11.2 Types of Interdependence

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Work interdependence occurs when two or more organizational groups must depend on one another to complete their tasks. The conflict potential in such situations ranges from relatively low to very high, depending on the nature of the interdependence. Three distinct types of interdependence among groups have been identified: pooled, sequential, and reciprocal. Exhibit 11.2 provides a visual representation of these three types.

Causes of Intergroup Conflict: Goal Differences

Conflict can arise between groups

Mutually exclusive goals

Limited resources that must be allocated between groups

Different time horizons needed by groups to achieve their goals

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Ideally, interacting groups will always view their goals as mutually compatible and behave in such a way as to contribute to the attainment of both sets of goals. Realistically, however, this is frequently not the case. Several problems related to differences in goals can create conflicts. Groups with mutually exclusive goals can find themselves in conflict. When limited resources must be allocated between groups, mutual dependencies increase and any differences in goals become more apparent. Finally, the different time horizons needed by groups to achieve their goals can be a source of conflict.

Causes of Intergroup Conflict: Perception

Factors that can cause groups to form differing perceptions

Status incongruence: conflicts concerning the relative status of different groups

Inaccurate perceptions: often cause one group to develop stereotypes about other groups

Different perspectives

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Goal differences can be accompanied by differing perceptions of reality, and disagreements over what constitutes reality can lead to conflict.

Status incongruency conflicts concerning the relative status of different groups are common. Usually, many different status standards are found in an organization, rather than an absolute one. The result is many status hierarchies. For example, status conflicts often are created by work patterns—which group initiates the work and which group responds.

Inaccurate perceptions often cause one group to develop stereotypes about other groups. While the differences between groups may actually be quite small, each group will tend to exaggerate them.

Consequences of Dysfunctional Intergroup Conflict

Groups placed in a conflict situation tend to react in fairly predictable ways

Changes occur both within and between groups

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Behavioral scientists have spent more than four decades researching and analyzing how dysfunctional intergroup conflict affects those who experience it. They have found that groups placed in a conflict situation tend to react in fairly predictable ways. We shall examine a number of the changes that can occur within groups and between groups as a result of dysfunctional intergroup conflict

Consequences of Dysfunctional Intergroup Conflict

Changes Within Groups

Increased group cohesiveness

Emphasis on loyalty

Rise in autocratic leadership

Focus on activity

Changes Between Groups

Distorted perceptions

Negative stereotyping

Decreased communications

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When groups are engaged in a conflict, their cohesion tends to increase. Competition, conflict, or perceived external threat usually result in group members putting aside individual differences and closing ranks. Members become more loyal to the group, and group membership becomes more attractive.

The tendency of groups to increase in cohesiveness suggests that conformity to group norms becomes more important in conflict situations. In reality, it is not unusual for groups to overconform to group norms in conflict situations.

In extreme conflict situations where threats are perceived, democratic methods of leadership are likely to become less popular. Group members want strong leadership.

When a group is in conflict, its members usually emphasize doing what the group does and doing it very well. The group becomes more task-oriented. Tolerance for members who goof off is low, and there is less concern for individual member satisfaction.

During conflicts, the perceptions of each group’s members become distorted. Group members develop stronger opinions of the importance of their units. Each group sees itself as superior in performance to the others and as more important to the survival of the organization than other groups.

As conflict increases and perceptions become more distorted, all the negative stereotypes are reinforced.

Communications between the groups in conflict usually break down. This can be extremely dysfunctional, especially where sequential interdependence or reciprocal interdependence relationships exist between groups.

EXHIBIT 11.3 Conflict-Resolution Grid

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Exhibit 11.3 provides a framework, in the form of a conflict-resolution grid, for examining these various approaches. As the exhibit suggests, one way of viewing conflict-resolution efforts between groups is to examine the extent to which a conflicting group has an internal and external focus with respect to resolution strategies. An internal focus represents the extent to which a group is intent upon addressing its own concerns in a conflict situation. An external focuser reflects the extent to which a group is intent on addressing the concerns of the other group (or groups) involved in the conflict. From this perspective, internal and external foci are not opposite ends of the same dimension. Rather, they are two separate dimensions. Varying degrees of focus on these two dimensions lead to five approaches to resolving intergroup conflict. Depending upon the nature and conditions of the conflict, each of these five approaches can represent an effective approach for conflict resolution management. We will examine each of these approaches separately.

Managing Conflict Through Resolution

Managers must live with intergroup conflict, so they must learn to manage it

Dominating

Accommodating

Problem solving

Avoiding

Compromising

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A dominating approach to conflict resolution represents a group’s maximum focus on meeting its own concerns, coupled with a minimal focus on meeting the concerns of the other group. Dominating tends to be a power-oriented approach.

In many respects, accommodating is just the opposite approach from dominating. An accommodating party places maximum emphasis on meeting the needs of the other group, while minimizing its own concerns. Although accommodation may appear to be “giving in,” this may be an extremely beneficial approach for a conflicting group to use in some situations.

Problem solving represents what might appear to be the theoretically ideal or best approach to conflict resolution. However, it can be an extremely difficult approach to implement effectively. Problem solving, sometimes called collaborating or integrating, seeks to resolve conflict by placing maximum focus on both groups’ concerns. Successful problem solving requires that conflicting groups display a willingness to work collaboratively toward an integrative solution that satisfies the needs of all concerned.

Frequently, some way can be found to avoid conflict. While avoiding may not bring any long-run benefits, it can be an effective and appropriate strategy in some conflict situations. Foremost among these is when avoiding is used as a temporary alternative. When the conflict is a particularly heated one, for example, temporary avoidance gives the involved parties an opportunity to cool down and regain perspective.

Compromising is a traditional method for resolving inter-group conflicts. With compromise, there is no distinct winner or loser, and the resolution reached probably is not ideal for either group. Compromising can be used very effectively when the goal sought (for example, money) can be divided equitably. If this is not possible, one group must give up something of value as a concession.

Which Approach to Use?

Dominating approach

Use on important issues where you are certain you are right, and where the benefit of a resolution outweighs the possible negative feelings by the dominated group

Accommodating approach

Use in disputes that are of greater importance to the other group than they are to yours

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While there are many different situations in which each of the approaches is valid, keep these general points in mind:

• Use a dominating approach on important issues where you are certain you are right and where the benefit of a resolution outweighs the drawback of possible negative feelings by the dominated group.

• Use an accommodating approach in disputes that are of far greater importance to the other group than they are to your group.

Which Approach to Use?

Avoiding

Use primarily as a temporary and expedient means to buy more time

Compromising

Good backup approach when other approaches fail to resolve the issue

Problem-Solving

Use when groups are willing to invest time and effort to reach a resolution that maximizes everyone’s outcome

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• Use an avoiding approach primarily as a temporary expedient to buy more time.

• Use a compromising approach as a middle ground. It is a good backup approach when other approaches (mainly dominating and problem solving) fail to resolve the issue.

• Use a problem-solving approach when both groups are willing to invest time and effort to reach a resolution that maximizes everyone’s outcome.

EXHIBIT 11.4 An Overview of Intergroup Conflict

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What this chapter has said thus far about intergroup conflict is summarized in Exhibit 11.4. The exhibit illustrates the relationship between causes and types of conflict, the consequences of conflict, and approaches to conflict resolution. Keep in mind that views of conflict and approaches to conflict resolution vary across cultures. Important aspects of conflict are viewed and experienced differently in different nations.

Stimulating Constructive Intergroup Conflict

Lack of any disagreement can lead to sub-optimum performance and inferior decision making

Lack of conflict may prove beneficial in the short run, but can lead to situations where one group holds tremendous influence over another

Increasing conflict can be an effective antidote for groupthink

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Throughout this chapter we have stressed that some conflict is beneficial. This point was first made in the discussion on the contemporary perspective on conflict and is noted again in Exhibit 11.4, which details some of the functional consequences of intergroup conflict. We have already examined the situation where conflict is dysfunctional because it is too high; we have said little, however, regarding situations in which there is an insufficient amount of conflict. If groups become too complacent because everything always operates smoothly, management might benefit from stimulating conflict. Lack of any disagreement can lead to suboptimum performance, including inferior decision making.

Stimulating Constructive Intergroup Conflict

Strategies for increasing conflict

Bringing outsiders into the group

Altering the organization’s structure

Stimulating competition

Using programmed conflict (devil’s advocacy)

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A technique widely used to “bring back to life” a stagnant organization or subunit of an organization is to hire or transfer in individuals whose attitudes, values, and backgrounds differ from those of the group’s present members.

Changing the structure of the organization not only can help resolve intergroup conflict, but it is also excellent for creating conflict.

Many managers utilize various techniques to stimulate competition among groups. The use of a variety of incentives, such as awards and bonuses for outstanding performance, often stimulates competition. If properly utilized, such incentives can help maintain a healthy atmosphere of competition that may result in a functional level of conflict.

Increasingly, organizations are turning to programmed conflict to increase creativity and innovation and to improve decision making. Programmed conflict is conflict that is deliberately and systematically created even when no real differences appear to exist. It is “conflict that raises different opinions regardless of the personal feelings of the managers.” One popular form of programmed conflict is devil’s advocacy. In devil’s advocacy, some-one or some group is assigned the role of critic with the job of uncovering all possible problems with a particular proposal.

Negotiations

Two or more parties attempt to reach acceptable agreement in a situation characterized by some level of disagreement

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Frequently, an important part of the process of conflict resolution involves negotiations. Negotiations may be viewed as a process in which two or more parties attempt to reach acceptable agreement in a situation characterized by some level of disagreement.

Negotiations

Negotiations may take place…

Between two people

Within a group

Between groups

Over the Internet

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In an organizational context, negotiation may occur (1) between two people (as when a manager and subordinate decide on the completion date for a new project the subordinate has just received); (2) within a group (most group decision-making situations); (3) between groups (such as the purchasing department and a supplier regarding price, quality, or delivery date), which has been the focus in this chapter; and (4) over the Internet. The Internet now serves as a place to negotiate jobs, consulting projects, training program prices, and supplier product prices. The one difference in negotiating on the Internet is that it is done with written communication only. Many of the skills discussed in this section apply to both face-to-face negotiations and Internet transactions.

Negotiations

Negotiations have at least four elements

Some disagreement or conflict exists

There is some degree of interdependence between the parties

The situation is conductive to opportunistic interaction

There exists some possibility of agreement

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Regardless of the setting or the parties involved, negotiations usually have at least four elements. First, some disagreement or conflict exists. This may be perceived, felt, or manifest. Second, there is some degree of interdependence between the parties. Third, the situation must be conducive to opportunistic interaction. .This means that each party has both the means and inclination to attempt to influence the other. Finally, there exists some possibility of agreement. In the absence of this latter element, of course, negotiations cannot bring about a positive resolution.

Win-Lose Negotiating

The classical view suggests negotiations are a form of zero-sum game

There is an assumption of limited resources

Also known as distributive negotiating

The process of “distributing” scarce resources

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The classical view suggests negotiations are frequently a form of a zero-sum game. That is, to whatever extent one party wins something, the other party loses. A zero-sum situation assumes limited resources, and the negotiation process is to determine who will receive these resources. This is also known as distributive negotiating. The term refers to the process of dividing, or “distributing,” scarce resources. Such a win–lose approach characterizes numerous negotiating situations.

Win-Win Negotiating

A positive-sum approach

Each party gains without a corresponding loss for the other party

Doesn’t mean everyone gets all they wanted

An agreement has been achieved which leaves all parties better off than they were prior to the agreement

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Win–win, or integrative, negotiating brings a different perspective to the process. Unlike the zero-sum orientation in win–lose, win–win negotiating is a positive-sum approach. Positive-sum situations are those where each party gains without a corresponding loss for the other party. This does not necessarily mean that everyone gets everything they wanted, for seldom does that occur. It simply means that an agreement has been achieved that leaves all parties better off than they were before the agreement. It may seem as if a win–win approach is always preferable to a win–lose one. Why should there be a winner and a loser if instead there can be two winners? Realistically, however, not every negotiating situation has an integrative payoff. Some situations re-ally are distributive; a gain for one side must mean an offsetting loss for the other.

Negotiation Tactics

Good-guy / Bad-guy Team

The Nibble

Joint Problem-Solving

Power of Competition

Splitting the Difference

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To achieve a win–win or win–lose negotiation outcome, a variety of specific negotiation tactics can be employed by managers. Some of the most frequently used tactics are:

1. Good-guy/bad-guy team. Anyone who has read a detective story or seen a TV police show is familiar with this tactic. The bad-guy member of the negotiating group advocates such extreme positions that whatever the good guy says sounds reasonable.

2. The nibble. This tactic involves getting an additional concession or perk after an agreement has been reached.

3. Joint problem solving. A manager should never assume that the more one side wins, the more the other loses. Feasible alternatives not yet considered may exist.

4. Power of competition. Tough negotiators use competition to make opponents think they don’t need them.

5. Splitting the difference. This can be a useful technique when two groups come to an impasse. Managers should be careful, however, when the other group offers to split the difference too early. It may mean the other group has already received more than it thinks it deserves.

Variables that Affect Negotiations

Nature of the issues being negotiated

The context or environment

The outcomes desired

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Just as there is no one best way to manage, neither is there one best way to negotiate. The selection of specific negotiation strategies and tactics depends on a number of variables. The nature of the issues being negotiated is a critical consideration. For example, how one approaches negotiating distributive issues may be quite different from the strategy employed for negotiating integrative ones. The context or environment in which the negotiations are occurring may also be an important consideration, as may be the nature of the outcomes that are desired from the negotiating process. In many negotiating situations, this last consideration may be the most important.

Negotiation Outcomes

Substantive

Outcomes have to do with how the specific issue is settled

Relationship

Negotiating in a manner designed to maintain good relations between the parties, regardless of the sustentative results

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One useful way to think about desired outcomes is to distinguish between substantive and relationship outcomes.

Substantive outcomes have to do with how the specific issue is settled. To strive to end up with a bigger piece of the pie than the other party is to focus on a substantive outcome. On the other hand, to negotiate in a manner designed primarily to maintain good relations between the parties—irrespective of the substantive result—is to focus on relationship outcomes. While the two concerns are not mutually exclusive, the relative importance assigned them will affect a manager’s choice of negotiation strategies.

Increasing Negotiating Effectiveness

Willem Mastenbroek proposed four activities

Obtaining substantial results

Influencing the balance of power

Promoting a constructive climate

Obtaining procedural flexibility

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One model for increasing negotiating effectiveness is found in the work of the Dutch management practitioner Willem Mastenbroek. Although the model is extremely comprehensive, the key focus is on four activities.

1. Obtaining substantial results. This refers to activities that focus on the content of what is being negotiated. Desirable outcomes cannot be achieved if the negotiations do not stay constructively focused on the real issues

2. Influencing the balance of power. The final outcome of negotiations is almost al-ways directly related to the power and dependency relationships between the negotiators. Neither attempts to increase one’s power through dominance nor responding with total deference to the other party’s attempt to increase their power represents the most effective means of dealing with power issues. Achieving subtle shifts in the balance of power through the use of persuasion, facts, and expertise are almost always more effective.

3. Promoting a constructive climate. This relates to activities designed to facilitate progress by minimizing the likelihood that tension or animosity between the parties becomes disruptive. Specific activities might include attending to each party’s opinions, acting in a predictable and serious manner, treating each party with respect, and showing a sense of humor. Being on different sides of an issue does not have to mean being at odds personally.

4. Obtaining procedural flexibility. These are activities that allow a negotiator to increase negotiating effectiveness through increasing the type and number of options available for conducting the negotiations. The longer a negotiator can keep the widest variety of options open, the greater the likelihood of reaching a desirable outcome.

Using Third-Party Negotiations

Mediation

Arbitration

Conciliation

Consultation

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Sometimes third parties are called in when negotiations between the main parties have broken down or reached an impasse. At other times, third parties may be part of the negotiation from the beginning. In some instances, third-party involvement is imposed on the disputing parties; in others, the parties themselves voluntarily seek out third-party assistance. In any event, the instances of third-party negotiations appear to be increasing.

There are different kinds of third-party interventions, and third-party involvement has been characterized in many different ways. One such typology suggests four basic kinds of interventions. Mediation is where a neutral third party acts as a facilitator through the application of reasoning, suggestion, and persuasion. Mediators facilitate resolution by affecting how the disputing parties interact. Mediators have no binding authority; the parties are free to ignore mediation efforts and recommendations. Arbitration is where the third party has the power (authority) to impose an agreement. In conventional arbitration, the arbitrator selects an outcome that is typically somewhere between the final positions of the disputing parties. In final-offer arbitration, the arbitrator is mandated to choose one or the other of the parties’ final offers, and thus has no real control over designing the agreement. Conciliation occurs where the third party is someone who is trusted by both sides and serves primarily as a communication link between the disagreeing parties. A conciliator has no more formal authority to influence the outcome than does a mediator. Finally, consultation is where a third party trained in conflict and conflict-resolution skills attempts to facilitate problem solving by focusing more on the relations between the parties than on the substantive issues. The chief role of the consultant is to improve the negotiating climate so that substantive negotiations can take place in the future.

Negotiating Globally

Negotiating with individuals from different countries and cultures poses issues

People from other cultures negotiate differently

The Japanese emphasize a win-win approach

Americans are very candid and specific

Also playing a role

Political systems

Legal policies

Ideology

Traditions

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The number of global negotiations is increasing rapidly. The global deals, markets, and relationships that organizations are forming require careful attention to culture’s impact on style. Individuals steeped in specific cultures negotiate differently. Labeling any culture’s negotiating style is too general and constraining. However, general characteristics and tendencies have been observed and noted. The former ambassador from Singapore to the United States noted that American negotiators generally (1) are prepared, (2) are plain speaking, (3) are pragmatic, (4) understand that concessions may be required, and (5) are very specific and candid. Others have described American negotiators as blunt, arrogant, and rushed. The weaknesses of American negotiators appear to center on impatience, legalism, and poor listening skills. The strengths of American negotiators focus on friendliness, fairness, and flexibility.

EXHIBIT 11.5 Cultural Effects on Negotiating Style

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Exhibit 11.5 describes more than 300 negotiators from 12 countries. The Japanese emphasized a win–win or integrative approach more than any other countries’ negotiators. The results also indicate the direct communication styles used by Argentinean, American, and German negotiators. A recent research study that looked at cultural influences on negotiations in Finland, Mexico, Turkey, and the United States found that negotiators should not automatically assume that the process will be win–win or win–lose. Even though cultural differences in negotiations exist, each negotiator needs to “explore the attitudes of the specific parties with whom they are negotiating.”

Wall and Blum Suggestions

Begin with a positive overture

Concentrate on issues and the situational factors

Look below the surface

Do not allow competitive bargaining.

If you have power use it

Be accepting of third-party assistance

Attend to the environment

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In one form or another, negotiation is becoming an increasingly important part of the manager’s job. A review of the topic of negotiation by Wall and Blum concludes with a set of recommendations for managers on how to improve the negotiation process. They offer the following suggestions: 1. Begin the bargaining with a positive overture—perhaps a small concession—and then reciprocate the opponent’s concessions. 2. Concentrate on the negotiation issues and the situational factors, not on the opponent or his or her characteristics. 3. Look below the surface of your opponent’s bargaining and try to determine his or her strategy. 4. Do not allow accountability to your constituents or surveillance by them to spawn competitive bargaining. 5. If you have power in a negotiation, use it—with specific demands, mild threats, and persuasion—to guide the opponent toward an agreement. 6. Be open to accepting third-party assistance. 7. In a negotiation, attend to the environment and be aware that the opponent’s behavior and power are altered by it.

Assignment 7

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