Conflict Resolution

A DEFINITION OF CONFLICT

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

We can define conflict, then, as a process that begins when one party perceives another party has or is about to negatively affect something the first party cares about. 2  This definition is purposely broad. It describes that point in any ongoing activity when an interaction crosses over to become an interparty conflict. It encompasses the wide range of conflicts people experience in organizations: incompatibility of goals, differences over interpretations of facts, disagreements based on behavioral expectations, and the like. Finally, our definition is flexible enough to cover the full range of conflict levels—from overt and violent acts to subtle forms of disagreement.

TRANSITIONS IN CONFLICT THOUGHT

It is entirely appropriate to say there has been conflict over the role of conflict in groups and organizations. One school of thought has argued that conflict must be avoided—that it indicates a malfunctioning within the group.

Conflict is an inherent part of organizational life. Indeed, some level of conflict is probably necessary for optimal organizational functioning.

We call this the traditional view. Another perspective proposes not only that conflict can be a positive force in a group but that some conflict is absolutely necessary for a group to perform effectively. We label this the interactionist view. Finally, recent research argues that instead of encouraging “good” or discouraging “bad” conflict, it’s more important to resolve naturally occurring conflicts productively. This perspective is the managed conflict view. Let’s take a closer look at each view.

The Traditional View of Conflict

The early approach to conflict assumed all conflict was bad and to be avoided. Conflict was viewed negatively and discussed with such terms as violence, destruction, and irrationality to reinforce its negative connotation. This traditional view of conflict was consistent with attitudes about group behavior that prevailed in the 1930s and 1940s. Conflict was a dysfunctional outcome resulting from poor communication, a lack of openness and trust between people, and the failure of managers to be responsive to the needs and aspirations of their employees.

The view that all conflict is bad certainly offers a simple approach to looking at the behavior of people who create conflict. We need merely direct our attention to the causes of conflict and correct those malfunctions to improve group and organizational performance. This view of conflict fell out of favor for a long time as researchers came to realize that some level of conflict was inevitable.

Task conflict is more constructive than process or, especially, relationship conflict.

The Interactionist View of Conflict

The interactionist view of conflict encourages conflict on the grounds that a harmonious, peaceful, tranquil, and cooperative group is prone to becoming static, apathetic, and unresponsive to needs for change and innovation. 3  The major contribution of this view is recognizing that a minimal level of conflict can help keep a group viable, self-critical, and creative.

The interactionist view does not propose that all conflicts are good. Rather, functional conflictsupports the goals of the group and improves its performance and is, thus, a constructive form of conflict. A conflict that hinders group performance is a destructive or dysfunctional conflict. What differentiates functional from dysfunctional conflict? The evidence indicates we need to look at thetype of conflict—whether it’s connected to task, relationship, or process. 4

Task conflict relates to the content and goals of the work. Relationship conflict focuses on interpersonal relationships. Process conflict relates to how the work gets done. Studies demonstrate that relationship conflicts are almost always dysfunctional. 5  Why? It appears that the friction and interpersonal hostilities inherent in relationship conflicts increase personality clashes and decrease mutual understanding, which hinders the completion of organizational tasks. Unfortunately, managers spend a lot of effort resolving personality conflicts among staff members; one survey indicated this task consumes 18 percent of their time. 6

In contrast, low levels of process conflict and low to moderate levels of task conflict can be functional, but only in very specific cases. Recent reviews have shown task conflicts have the potential to be just as disruptive as relationship conflicts. 7  For conflict to be productive, it must be kept within certain boundaries. For example, one study in China found that moderate levels of task conflict in the early development stage could increase creativity in groups, but high levels of task conflict decreased team performance, and task conflicts were unrelated to performance once the group was in the later stages of group development. 8  Intense arguments about who should do what become dysfunctional when they create uncertainty about task roles, increase the time to complete tasks, and lead members to work at cross-purposes. Low to moderate levels of task conflict stimulate discussion of ideas. This means task conflicts relate positively to creativity and innovation, but they are not related to routine task performance. Groups performing routine tasks that don’t require creativity won’t benefit from task conflict. Moreover, if the group is already engaged in active discussion of ideas in a nonconfrontational way, adding conflict will not help generate more ideas. Task conflict is also related to these positive outcomes only when all members share the same goals and have high levels of trust. 9  Another way of saying this is that task conflicts are related to increased performance only when all members believe the team is a safe place for taking risks and that members will not deliberately undermine or reject those who speak up. 10

Resolution-Focused View of Conflict

Researchers, including those who had strongly advocated the interactionist view, have begun to recognize some problems with encouraging conflict. 11  As we will see, there are some very specific cases in which conflict can be beneficial. However, workplace conflicts are not productive; they take time away from job tasks or interacting with customers, and hurt feelings and anger often linger after conflicts appear to be over. People can seldom wall off their feelings into neat categories of “task” or “relationship” disagreements, so task conflicts sometimes escalate into relationship conflicts. 12  A study conducted in Taiwan and Indonesia found that when levels of relationship conflict are high, increases in task conflict are consistently related to lower levels of team performance and team member satisfaction. 13  Conflicts produce stress, which may lead people to become more close minded and adversarial. 14  Studies of conflict in laboratories also fail to take account of the reductions in trust and cooperation that occur even with relationship conflicts. Longer-term studies show that all conflicts reduce trust, respect, and cohesion in groups, which reduces their long-term viability. 15

In sum, the traditional view was shortsighted in assuming all conflict should be eliminated. The interactionist view that conflict can stimulate active discussion without spilling over into negative, disruptive emotions is incomplete. The managed conflict perspective does recognize conflict is inevitable in most organizations, and it focuses more on productive conflict resolution. The research pendulum has swung from eliminating conflict, to encouraging limited levels of conflict, and now to finding constructive methods for resolving conflicts productively so their disruptive influence can be minimized.

THE CONFLICT PROCESS

The conflict process has five stages: (1) potential opposition or incompatibility, (2) cognition and personalization, (3) intentions, (4) behavior, and (5) outcomes. The process is diagrammed in Exhibit 14-1 .

Stage I: Potential Opposition Or Incompatibility

The first step in the conflict process is the appearance of conditions that create opportunities for conflict to arise. These conditions need not lead directly to conflict, but one of them is necessary if conflict is to surface. For simplicity’s sake, we group the conditions (which we can also look at as causes or sources of conflict) into three general categories: communication, structure, and personal variables.

communication

Communication can be a source of conflict. This arises from semantic difficulties, misunderstandings, and “noise” in the communication channels. A review of the research suggests that differing word connotations, jargon, insufficient exchange of information, and noise in the communication channel are all barriers to communication and potential antecedent conditions to conflict. Research has further demonstrated a surprising finding: the potential for conflict increases when either too little or too much communication takes place. Apparently, an increase in communication is functional up to a point, after which it is possible to overcommunicate, with a resultant increase in the potential for conflict.

structure

The term structure in this context includes variables such as size of the group, degree of specialization in the tasks assigned to group members, jurisdictional clarity, member–goal compatibility, leadership styles, reward systems, and the degree of dependence between groups. The larger the group and the more specialized its activities, the greater the likelihood of conflict. Tenure and conflict have been found to be inversely related; the potential for conflict is greatest when group members are younger and when turnover is high. The greater the ambiguity about where responsibility for actions lies, the greater the potential for conflict to emerge. Such jurisdictional ambiguities increase intergroup fighting for control of resources and territory. Diversity of goals among groups is also a major source of conflict. Reward systems, too, create conflict when one member’s gain comes at another’s expense. Finally, if a group is dependent on another group (in contrast to the two being mutually independent), or if interdependence allows one group to gain at another’s expense, opposing forces are stimulated.

EXHIBIT 14-1 The Conflict Process

personal variables

Our last category of potential sources of conflict is personal variables, which include personality, emotions, and values. Personality does appear to play a role in the conflict process: some people just tend to get into conflicts a lot. In particular, people high in the personality traits of disagreeableness, neuroticism, or self-monitoring are prone to tangle with other people more often, and to react poorly when conflicts occur. 16  Emotions can also cause conflict. An employee who shows up to work irate from her hectic morning commute may carry that anger with her to her 9:00 am meeting. The problem? Her anger can annoy her colleagues, which can result in a tension-filled meeting. 17

Stage II: Cognition and Personalization

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

As we noted in our definition of conflict, one or more of the parties must be aware that antecedent conditions exist. However, because a conflict is a perceived conflict does not mean it is personalized. In other words, “A may be aware that B and A are in serious disagreement… but it may not make A tense or anxious, and it may have no effect whatsoever on A’s affection towardB.” 18  It is at the felt conflict level, when individuals become emotionally involved, that they experience anxiety, tension, frustration, or hostility.

Keep in mind two points. First, Stage II is important because it’s where conflict issues tend to be defined, where the parties decide what the conflict is about. 19  The definition of a conflict is important because it typically delineates the set of possible settlements.

Second, emotions play a major role in shaping perceptions. 20  Negative emotions allow us to oversimplify issues, lose trust, and put negative interpretations on the other party’s behavior. 21  In contrast, positive feelings increase our tendency to see potential relationships among the elements of a problem, to take a broader view of the situation, and to develop more innovative solutions. 22

Stage III: Intentions

Intentions intervene between people’s perceptions and emotions and their overt behavior. They are decisions to act in a given way. 23

We separate out intentions as a distinct stage because we have to infer the other’s intent to know how to respond to his or her behavior. Many conflicts escalate simply because one party attributes the wrong intentions to the other. There is also typically a great deal of slippage between intentions and behavior, so behavior does not always accurately reflect a person’s intentions.

Using two dimensions—cooperativeness (the degree to which one party attempts to satisfy the other party’s concerns) and assertiveness (the degree to which one party attempts to satisfy his own concerns)—we can identify five conflict-handling intentions: (1) competing (assertive and uncooperative), (2) collaborating (assertive and cooperative), (3) avoiding (unassertive and uncooperative), (4) accommodating (unassertive and cooperative), and (5) compromising(midrange on both assertiveness and cooperativeness). 24

· 1.  Competing.  When one person seeks to satisfy her own interests regardless of the impact on the other parties in the conflict, that person is competing. You compete when you place a bet that only one person can win, for example.

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

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

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

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

Intentions are not always fixed. During the course of a conflict, they might change if the parties are able to see the other’s point of view or respond emotionally to the other’s behavior. However, research indicates people have preferences among the five conflict-handling intentions we just described. 25  We can predict a person’s intentions rather well from a combination of intellectual and personality characteristics.

Stage IV: Behavior

When most people think of conflict situations, they tend to focus on Stage IV because this is where conflicts become visible. The behavior stage includes the statements, actions, and reactions made by the conflicting parties, usually as overt attempts to implement their own intentions. As a result of miscalculations or unskilled enactments, overt behaviors sometimes deviate from these original intentions. 26

It helps to think of Stage IV as a dynamic process of interaction. For example, you make a demand on me, I respond by arguing, you threaten me, I threaten you back, and so on.  Exhibit 14-2  provides a way of visualizing conflict behavior. All conflicts exist somewhere along this continuum. At the lower part are conflicts characterized by subtle, indirect, and highly controlled forms of tension, such as a student questioning in class a point the instructor has just made. Conflict intensities escalate as they move upward along the continuum until they become highly destructive. Strikes, riots, and wars clearly fall in this upper range. Conflicts that reach the upper ranges of the continuum are almost always dysfunctional. Functional conflicts are typically confined to the lower range of the continuum.

If a conflict is dysfunctional, what can the parties do to de-escalate it? Or, conversely, what options exist if conflict is too low and needs to be increased? This brings us to techniques of conflict management. We have already described several as conflict-handling intentions. This shouldn’t be surprising. Under ideal conditions, a person’s intentions should translate into comparable behaviors.

EXHIBIT 14-2 Conflict-Intensity Continuum

Source: Based on S. P. Robbins, Managing Organizational Conflict: A Nontraditional Approach (Upper Saddle River, NJ: Prentice Hall, 1974), pp. 93–97, and R. Glasi, “The Process of Conflict Escalation and the Roles of Third Parties,” in G. B. J. Bomers and R. Peterson (eds.), Conflict Management and Industrial Relations (Boston: Kluwer-Nijhoff, 1982), pp. 119–140.

Stage V: Outcomes

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

functional outcomes

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

Conflict is constructive when it improves the quality of decisions, stimulates creativity and innovation, encourages interest and curiosity among group members, provides the medium through which problems can be aired and tensions released, and fosters an environment of self-evaluation and change. The evidence suggests conflict can improve the quality of decision making by allowing all points to be weighed, particularly those that are unusual or held by a minority. 27 Conflict is an antidote for groupthink. It doesn’t allow the group to passively rubber-stamp decisions that may be based on weak assumptions, inadequate consideration of relevant alternatives, or other debilities. Conflict challenges the status quo and therefore furthers the creation of new ideas, promotes reassessment of group goals and activities, and increases the probability that the group will respond to change. An open discussion focused on higher-order goals can make these functional outcomes more likely. Groups that are extremely polarized do not manage their underlying disagreements effectively and tend to accept suboptimal solutions, or they avoid making decisions altogether rather than working out the conflict. 28

Research studies in diverse settings confirm the functionality of active discussion. Groups whose members have different interests tend to produce higher-quality solutions to a variety of problems than do homogeneous groups. 29  Team members with greater differences in work styles and experience also tend to share more information with one another. 30

dysfunctional outcomes

The destructive consequences of conflict on the performance of a group or an organization are generally well known: uncontrolled opposition breeds discontent, which acts to dissolve common ties and eventually leads to the destruction of the group. And, of course, a substantial body of literature documents how dysfunctional conflicts can reduce group effectiveness. 31  Among the undesirable consequences are poor communication, reductions in group cohesiveness, and subordination of group goals to the primacy of infighting among members. All forms of conflict—even the functional varieties—appear to reduce group member satisfaction and trust. 32  When active discussions turn into open conflicts between members, information sharing between members decreases significantly. 33  At the extreme, conflict can bring group functioning to a halt and threaten the group’s survival.

managing functional conflict

If managers recognize that in some situations conflict can be beneficial, what can they do to manage conflict effectively in their organizations? Let’s look at some approaches organizations are using to encourage their people to challenge the system and develop fresh ideas.

One of the keys to minimizing counterproductive conflicts is recognizing when there really is a disagreement. Many apparent conflicts are due to people using different language to discuss the same general course of action. For example, someone in marketing might focus on “distribution problems,” whereas someone from operations will talk about “supply chain management” to describe essentially the same issue. Successful conflict management recognizes these different approaches and attempts to resolve them by encouraging open, frank discussion focused on interests rather than issues (we’ll have more to say about this when we contrast distributive and integrative bargaining styles). Another approach is to have opposing groups pick parts of the solution that are most important to them and then focus on how each side can get its top needs satisfied. Neither side may get exactly what it wants, but both sides will get the most important parts of its agenda. 34

Groups that resolve conflicts successfully discuss differences of opinion openly and are prepared to manage conflict when it arises. 35  The most disruptive conflicts are those that are never addressed directly. An open discussion makes it much easier to develop a shared perception of the problems at hand; it also allows groups to work toward a mutually acceptable solution. Managers need to emphasize shared interests in resolving conflicts, so groups that disagree with one another don’t become too entrenched in their points of view and start to take the conflicts personally. Groups with cooperative conflict styles and a strong underlying identification to the overall group goals are more effective than groups with a competitive style. 36

Differences across countries in conflict resolution strategies may be based on collectivistic tendencies and motives. 37  Collectivist cultures see people as deeply embedded in social situations, whereas individualist cultures see them as autonomous. As a result, collectivists are more likely to seek to preserve relationships and promote the good of the group as a whole. They will avoid direct expression of conflicts, preferring indirect methods for resolving differences of opinion. Collectivists may also be more interested in demonstrations of concern and working through third parties to resolve disputes, whereas individualists will be more likely to confront differences of opinion directly and openly.

Some research does support this theory. Compared to collectivist Japanese negotiators, their more individualist U.S. counterparts are more likely to see offers from their counterparts as unfair and to reject them. Another study revealed that whereas U.S. managers were more likely to use competing tactics in the face of conflicts, compromising and avoiding are the most preferred methods of conflict management in China. 38  Interview data, however, suggests top management teams in Chinese high-technology firms prefer collaboration even more than compromising and avoiding. 39

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

NEGOTIATION

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

The most effective negotiators utilize different tactics for distributive and integrative bargaining; the chapter provides clear ways in order for you to improve each type of bargaining.

We can define negotiation as a process that occurs when two or more parties decide how to allocate scarce resources. 40  Although we commonly think of the outcomes of negotiation in one-shot economic terms, like negotiating over the price of a car, every negotiation in organizations also affects the relationship between the negotiators and the way the negotiators feel about themselves. 41  Depending on how much the parties are going to interact with one another, sometimes maintaining the social relationship and behaving ethically will be just as important as achieving an immediate outcome of bargaining. Note that we use the terms negotiation andbargaining interchangeably. In this section, we contrast two bargaining strategies, provide a model of the negotiation process, ascertain the role of moods and personality traits on bargaining, review gender and cultural differences in negotiation, and take a brief look at third-party negotiations.

Bargaining Strategies

There are two general approaches to negotiation—distributive bargaining and integrative bargaining. 42  As  Exhibit 14-3  shows, they differ in their goal and motivation, focus, interests, information sharing, and duration of relationship. Let’s define each and illustrate the differences.

distributive bargaining

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

EXHIBIT 14-3 Distributive Versus Integrative Bargaining

Bargaining Characteristic	Distributive Bargaining	Integrative Bargaining
Goal	Get as much of the pie as possible	Expand the pie so that both parties are satisfied
Motivation	Win–lose	Win–win
Focus	Positions (“I can’t go beyond this point on this issue.”)	Interests (“Can you explain why this issue is so important to you?”)
Interests	Opposed	Congruent
Information sharing	Low (Sharing information will only allow other party to~take advantage)	High (Sharing information will allow each party to find ways to satisfy interests of each party)
Duration of relationship	Short term	Long term

Probably the most widely cited example of distributive bargaining is labor–management negotiations over wages. Typically, labor’s representatives come to the bargaining table determined to get as much money as possible from management. Because every cent labor negotiates increases management’s costs, each party bargains aggressively and treats the other as an opponent who must be defeated.

The essence of distributive bargaining is depicted in  Exhibit 14-4 . Parties A and B represent two negotiators. Each has a target point that defines what she would like to achieve. Each also has aresistance point, which marks the lowest acceptable outcome—the point below which the party would break off negotiations rather than accept a less favorable settlement. The area between these two points makes up each party’s aspiration range. As long as there is some overlap betweenA’s and B’s aspiration ranges, there exists a settlement range in which each one’s aspirations can be met.

When you are engaged in distributive bargaining, research consistently shows one of the best things you can do is make the first offer, and make it an aggressive one. Making the first offer shows power; individuals in power are much more likely to make initial offers, speak first at meetings, and thereby gain the advantage. Another reason this is a good strategy is the anchoring bias. People tend to fixate on initial information. Once that anchoring point is set, they fail to adequately adjust it based on subsequent information. A savvy negotiator sets an anchor with the initial offer, and scores of negotiation studies show that such anchors greatly favor the person who sets them. 43

EXHIBIT 14-4 Staking Out the Bargaining Zone

integrative bargaining

Jake is a 5-year-old Chicago luxury boutique owned by Jim Wetzel and Lance Lawson. In the early days of the business, Wetzel and Lawson had no trouble moving millions of dollars of merchandise from many up-and-coming designers. They developed such a good rapport that many designers would send allotments to Jake without requiring advance payment. When the economy soured in 2008, Jake had trouble selling inventory, and the designers found they were not being paid for what they had shipped to the store. Despite the fact that many designers were willing to work with the store on a delayed payment plan, Wetzel and Lawson stopped returning their calls. Lamented one designer, Doo-Ri Chung, “You kind of feel this familiarity with people who supported you for so long. When they have cash-flow issues, you want to make sure you are there for them as well.” 44 Ms. Chung’s attitude shows the promise of integrative bargaining. In contrast to distributive bargaining, integrative bargaining operates under the assumption that one or more of the possible settlements can create a win–win solution. Of course, as the Jake example shows and we’ll highlight later, integrative bargaining takes “two to tango”—both parties must be engaged for it to work.

In terms of intraorganizational behavior, all things being equal, integrative bargaining is preferable to distributive bargaining because the former builds long-term relationships. Integrative bargaining bonds negotiators and allows them to leave the bargaining table feeling they have achieved a victory. Distributive bargaining, however, leaves one party a loser. It tends to build animosities and deepen divisions when people have to work together on an ongoing basis. Research shows that over repeated bargaining episodes, a “losing” party who feels positive about the negotiation outcome is much more likely to bargain cooperatively in subsequent negotiations. This points to an important advantage of integrative negotiations: even when you “win,” you want your opponent to feel good about the negotiation. 45

Why, then, don’t we see more integrative bargaining in organizations? The answer lies in the conditions necessary for it to succeed. These include opposing parties who are open with information and candid about their concerns, are sensitive to the other’s needs and trust, and are willing to maintain flexibility. 46  Because these conditions seldom exist in organizations, it isn’t surprising that negotiations often take on a win-at-any-cost dynamic.

There are ways to achieve more integrative outcomes. Individuals who bargain in teams reach more integrative agreements than those who bargain individually because more ideas are generated when more people are at the bargaining table. So, try bargaining in teams. 47  Another way to achieve higher joint-gain settlements is to put more issues on the table. The more negotiable issues introduced into a negotiation, the more opportunity for “logrolling,” where issues are traded off because people have different preferences. This creates better outcomes for each side than if they negotiated each issue individually. 48  A final piece of advice is to focus on the underlying interests of both sides rather than on issues. In other words, it is better to concentrate on why an employee wants a raise rather than focusing just on the raise amount—some unseen potential for integrative outcomes may arise if both sides concentrate on what they really want rather than on the specific items they’re bargaining over. Typically, it’s easier to concentrate on underlying interests when parties to a negotiation are focused on broad, overall goals rather than on immediate outcomes of a specific decision. 49  Negotiations that occur when both parties are focused on learning and understanding the other side tend to also yield higher joint outcomes than those in which parties are more interested in their individual bottom-line outcomes. 50

Finally, recognize that compromise may be your worst enemy in negotiating a win–win agreement. Compromising reduces the pressure to bargain integratively. After all, if you or your opponent caves in easily, it doesn’t require anyone to be creative to reach a settlement. Thus, people end up settling for less than they could have obtained if they had been forced to consider the other party’s interests, trade off issues, and be creative. 51  Think of the classic example in which two sisters are arguing over who gets an orange. Unknown to them, one sister wants the orange to drink the juice, whereas the other wants the orange peel to bake a cake. If one sister simply capitulates and gives the other sister the orange, they will not be forced to explore their reasons for wanting the orange, and thus they will never find the win–win solution: they could each have the orange because they want different parts of it!

The Negotiation Process

Exhibit 14-5  provides a simplified model of the negotiation process. It views negotiation as made up of five steps: (1) preparation and planning, (2) definition of ground rules, (3) clarification and justification, (4) bargaining and problem solving, and (5) closure and implementation. 52

preparation and planning

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

EXHIBIT 14-5 The Negotiation

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

Relationships will change as a result of a negotiation, so that’s another outcome to take into consideration. If you could “win” a negotiation but push the other side into resentment or animosity, it might be wiser to pursue a more compromising style. If preserving the relationship will make you seem weak and easily exploited, you may want to consider a more aggressive style. As an example of how the tone of a relationship set in negotiations matters, consider that people who feel good about the process of a job offer negotiation are more satisfied with their jobs and less likely to turn over a year later regardless of their actual outcomes from these negotiations. 53

Once you’ve gathered your information, use it to develop a strategy. For example, expert chess players know ahead of time how they will respond to any given situation. As part of your strategy, you should determine your and the other side’s best alternative to a negotiated agreement, orBATNA. 54  Your BATNA determines the lowest value acceptable to you for a negotiated agreement. Any offer you receive that is higher than your BATNA is better than an impasse. Conversely, you shouldn’t expect success in your negotiation effort unless you’re able to make the other side an offer it finds more attractive than its BATNA. If you go into your negotiation having a good idea of what the other party’s BATNA is, even if you’re not able to meet it, you might be able to elicit a change. Think carefully about what the other side is willing to give up. People who underestimate their opponent’s willingness to give on key issues before the negotiation even starts end up with lower outcomes from a negotiation. 55

definition of ground rules

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

clarification and justification

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

bargaining and problem solving

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

closure and implementation

The final step in the negotiation process is formalizing the agreement you have worked out and developing any procedures necessary for implementing and monitoring it. For major negotiations—from labor–management negotiations to bargaining over lease terms to buying a piece of real estate to negotiating a job offer for a senior management position—this requires hammering out the specifics in a formal contract. For most cases, however, closure of the negotiation process is nothing more formal than a handshake.

Individual Differences in Negotiation Effectiveness

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

personality traits in negotiation

Can you predict an opponent’s negotiating tactics if you know something about her personality? Because personality and negotiation outcomes are related—but only weakly—the answer is, at best, “sort of.” Negotiators who are agreeable or extraverted are not very successful in distributive bargaining. Why? Because extraverts are outgoing and friendly, they tend to share more information than they should. And agreeable people are more interested in finding ways to cooperate rather than to butt heads. These traits, although slightly helpful in integrative negotiations, are liabilities when interests are opposed. So the best distributive bargainer appears to be a disagreeable introvert—someone more interested in his or her own outcomes than in pleasing the other party and having a pleasant social exchange. People who are highly interested in having positive relationships with other people, and who are not very concerned about their own outcomes, are especially poor negotiators. These people tend to be very anxious about disagreements and plan to give in quickly to avoid unpleasant conflicts even before negotiations start. 56

moods/emotions in negotiation

Do moods and emotions influence negotiation? They do, but the way they do appears to depend on the type of negotiation. In distributive negotiations, it appears that negotiators in a position of power or equal status who show anger negotiate better outcomes because their anger induces concessions from their opponents. Angry negotiators also feel more focused and assertive in striking a bargain. This appears to hold true even when the negotiators are instructed to show anger despite not being truly angry. On the other hand, for those in a less powerful position, displaying anger leads to worse outcomes. Thus, if you’re a boss negotiating with a peer or a subordinate, displaying anger may help you, but if you’re an employee negotiating with a boss, it might hurt you. 57  So what happens when two parties have to negotiate and one has shown anger in the past? Does the other try to get revenge and act extra tough, or does this party have some residual fear that the angry negotiator might get angry again? Evidence suggests that being angry has a spillover effect, such that angry negotiators are perceived as “tough” when the parties meet a second time, which leads negotiation partners to give up more concessions again. 58

Anxiety also appears to have an impact on negotiation. For example, one study found that individuals who experienced more anxiety about a negotiation used more deceptions in dealing with others. 59  Another study found that anxious negotiators expect lower outcomes from negotiations, respond to offers more quickly, and exit the bargaining process more quickly, which leads them to obtain worse outcomes. 60

All these findings regarding emotions have related to distributive bargains. In integrative negotiations, in contrast, positive moods and emotions appear to lead to more integrative agreements (higher levels of joint gain). This may happen because, as we noted in a previous chapter, positive mood is related to creativity. 61

culture in negotiations

One study compared U.S. and Japanese negotiators and found the generally conflict-avoidant Japanese negotiators tended to communicate indirectly and adapt their behaviors to the situation. A follow-up study showed that, whereas early offers by U.S. managers led to the anchoring effect we noted when discussing distributive negotiation, for Japanese negotiators, early offers led to more information sharing and better integrative outcomes. 62  In another study, managers with high levels of economic power from Hong Kong, which is a high power-distance country, were more cooperative in negotiations over a shared resource than German and U.S. managers, who were lower in power distance. 63  This suggests that in high power-distance countries, those in positions of power might exercise more restraint.

Another study looked at differences between U.S. and Indian negotiators. 64  Indian respondents reported having less trust in their negotiation counterparts than did U.S. respondents. These lower levels of trust were associated with lower discovery of common interests between parties, which occurred because Indian negotiators were less willing to disclose and solicit information. In both cultures, use of question-and-answer methods of negotiation were associated with superior negotiation outcomes, so although there are some cultural differences in negotiation styles, it appears that some negotiation tactics yield superior outcomes across cultures.

gender differences in negotiations

Do men and women negotiate differently? And does gender affect negotiation outcomes? The answer to the first question appears to be no. 65  The answer to the second is a qualified yes. 66

A popular stereotype is that women are more cooperative and pleasant in negotiations than are men. The evidence doesn’t support this belief. However, men have been found to negotiate better outcomes than women, although the difference is relatively small. It’s been postulated that men and women place unequal values on outcomes. “It is possible that a few hundred dollars more in salary or the corner office is less important to women than forming and maintaining an interpersonal relationship.” 67

Because women are expected to be “nice” and men “tough,” research shows women are penalized when they initiate negotiations. 68  What’s more, when women and men actually do conform to these stereotypes—women act “nice” and men “tough”—it becomes a self-fulfilling prophecy, reinforcing the stereotypical gender differences between male and female negotiators. 69  Thus, one of the reasons negotiations favor men is that women are “damned if they do, damned if they don’t.” Negotiate tough and they are penalized for violating a gender stereotype. Negotiate nice and it only reinforces and lets others take advantage of the stereotype.

Evidence also suggests women’s own attitudes and behaviors hurt them in negotiations. Managerial women demonstrate less confidence than men in anticipation of negotiating and are less satisfied with their performance afterward, even when their performance and the outcomes they achieve are similar to those for men. 70  Women are also less likely than men to see an ambiguous situation as an opportunity for negotiation. It appears that women may unduly penalize themselves by failing to engage in negotiations that would be in their best interests. Some research suggests that women are less aggressive in negotiations because they are worried about backlash from others. There is an interesting qualifier to this result: women are more likely to engage in assertive negotiation when they are bargaining on behalf of someone else than when they are bargaining on their own behalf. 71

SUMMARY AND IMPLICATIONS FOR MANAGERS

While many people assume conflict lowers group and organizational performance, this assumption is frequently incorrect. Conflict can be either constructive or destructive to the functioning of a group or unit. As shown in  Exhibit 14-6 , levels of conflict can be either too high or too low to be constructive. Either extreme hinders performance. An optimal level is one that prevents stagnation, stimulates creativity, allows tensions to be released, and initiates the seeds of change without being disruptive or preventing coordination of activities.

What advice can we give managers faced with excessive conflict and the need to reduce it? Don’t assume one conflict-handling strategy will always be best. Select a strategy appropriate for the situation. Here are some guidelines: 72

· • Use competition when quick decisive action is needed (in emergencies), when issues are important, when unpopular actions need to be implemented (in cost cutting, enforcement of unpopular rules, discipline), when the issue is vital to the organization’s welfare and you know you’re right, and when others are taking advantage of noncompetitive behavior.

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

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

· • Use accommodation when you find you’re wrong, when you need to learn or show reasonableness, when you should allow a better position to be heard, when issues are more important to others than to yourself, when you want to satisfy others and maintain cooperation, when you can build social credits for later issues, when you are outmatched and losing (to minimize loss), when harmony and stability are especially important, and when employees can develop by learning from mistakes.

· • Use compromise when goals are important but not worth the effort of potential disruption of more assertive approaches, when opponents with equal power are committed to mutually exclusive goals, when you seek temporary settlements to complex issues, when you need expedient solutions under time pressure, and as a backup when collaboration or competition is unsuccessful.

· • Distributive bargaining can resolve disputes, but it often reduces the satisfaction of one or more negotiators because it is confrontational and focused on the short term. Integrative bargaining, in contrast, tends to provide outcomes that satisfy all parties and build lasting relationships.

EXHIBIT 14-6 Conflict and Unit Performance

· • Make sure you set aggressive negotiating goals and try to find creative ways to achieve the objectives of both parties, especially when you value the long-term relationship with the other party. That doesn’t mean sacrificing your self-interest; rather, it means trying to find creative solutions that give both parties what they really want.