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Chapter 14
Conflict and Negotiation
LEARNING OBJECTIVES)
After studying this chapter, students should be able to:
14-1. Describe the three types of conflict and the three loci of conflict.
14-2. Outline the conflict process.
14-3. Contrast distributive and integrative bargaining.
14-4. Apply the five steps of the negotiation process.
14-5. Show how individual differences influence negotiations.
14-6. Assess the roles and functions of third-party negotiations.
INSTRUCTOR’S RESOURCES
Instructors may wish to use the following resources when presenting this chapter.
Text Exercises
Myth or Science?: “Teams Negotiate Better than Individuals in Collectivistic Cultures”
Career OBjectives: How Can I Get a Better Job?
An Ethical Choice: Using Empathy to Negotiate More Ethically
Personal Inventory Assessment: Strategies for Handling Conflict
Point/Counterpoint: Pro Sports Strikes Are Caused by Greedy Owners
Questions for Review
Experiential Exercise: A Negotiation Role-Play
Ethical Dilemma: The Lowball Applicant
Text Cases
Case Incident 1: Disorderly Conduct
Case Incident 2: Twinkies, Rubber Rooms, and Collective Bargaining
Instructor’s Choice
This section presents an exercise that is NOT found in the student's textbook. Instructor's Choice
reinforces the text's emphasis through various activities. Some Instructor's Choice activities are
centered on debates, group exercises, Internet research, and student experiences. Some can be
used in class in their entirety, while others require some additional work on the student's part.
The course instructor may choose to use these at any time throughout the class—some may be
more effective as icebreakers, while some may be used to pull together various concepts covered
in the chapter.
Web Exercises
At the end of each chapter of this Instructor’s Manual, you will find suggested exercises and
ideas for researching OB topics on the Internet. The exercises “Exploring OB Topics on the
Web” are set up so that you can simply photocopy the pages, distribute them to your class, and
make assignments accordingly. You may want to assign the exercises as an out-of-class activity
or as lab activities with your class.
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. 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. Specific implications for
managers are below:
Choose an authoritarian management style in emergencies, when unpopular actions need
to be implemented (such as cost cutting, enforcement of unpopular rules, discipline), and
when the issue is vital to the organization’s welfare. Be certain to communicate your
logic when possible, to make certain employees remain engaged and productive.
Seek integrative solutions when your objective is to learn, when you want to merge
insights from people with different perspectives, when you need to gain commitment by
incorporating concerns into a consensus, and when you need to work through feelings
that have interfered with a relationship.
You can build trust by accommodating others when you find you’re wrong, when you
need to demonstrate reasonableness, when other positions need 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, to minimize loss
when you are outmatched and losing, and when employees should learn from their own
mistakes.
Consider compromising when goals are important but not worth potential disruption,
when opponents with equal power are committed to mutually exclusive goals, and when
you need temporary settlements to complex issues.
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.
This chapter begins with a discussion of Spotify. As the music industry example demonstrates, forms of conflict and
negotiation are often complex—and controversial—interpersonal processes. While we generally see conflict as a
negative topic and negotiation as a positive one, what we deem positive or negative often depends on our
perspective. Conflict can turn personal. It can create chaotic conditions that make it nearly impossible for
employees to work as a team. However, conflict also has a less well-known positive side. We’ll explain the difference
between negative and positive conflicts in this chapter and provide a guide to help you understand how conflicts
develop. We’ll also present the specifics about the topic closely akin to conflict: negotiation.
BRIEF CHAPTER OUTLINE
I. A Definition of Conflict
A. There has been no shortage of definitions of conflict, but common to most is the idea that
conflict is a perception.
1. If no one is aware of a conflict, then it is generally agreed no conflict exists.
a. Also needed to begin the conflict process are opposition or incompatibility and
interaction.
2. We define conflict as a process that begins when one party perceives that another
party has negatively affected, or is about to negatively affect, something that the first
party cares about.
3. There is no consensus over the role of conflict in groups and organizations.
4. In the past, researchers tended to argue about whether conflict was uniformly good or
bad. Such simplistic views eventually gave way to approaches recognizing that not all
conflicts are the same and that different types of conflict have different effects.
5. Contemporary perspectives differentiate types of conflict based on their effects.
(Exhibit 14-1)
a. Functional conflict supports the goals of the group and improves its
performance.
b. Conflicts that hinder group performance are dysfunctional or destructive forms of
conflict.
II. Types of Conflict
A. Types of Conflict
1. Researchers have classified conflicts into three categories: task, relationship, or
process.
a. Task conflict relates to the content and goals of the work.
b. Relationship conflict focuses on interpersonal relationships.
c. Process conflict is about how the work gets done.
2. Studies demonstrate that relationship conflicts, at least in work settings, are almost
always dysfunctional.
a. 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.
3. Of the three types, relationship conflicts also appear to be the most psychologically
exhausting to individuals.
4. While scholars agree that relationship conflict is dysfunctional, there is considerably
less agreement as to whether task and process conflicts are functional.
a. Early research suggested that task conflict within groups was associated with
higher group performance, but a recent review of 116 studies found that task
conflict was essentially unrelated to group performance.
b. However, there were factors that could create a relationship between conflict and
performance.
c. One such factor was whether the conflict included top management or occurred
lower in the organization.
d. Task conflict among top management teams was positively associated with their
performance, whereas conflict lower in the organization was negatively associated
with group performance.
e. This review also found that it mattered whether other types of conflict were
occurring at the same time.
f. If task and relationship conflict occurred together, task conflict was more likely
negative, whereas if task conflict occurred by itself, it more likely was positive.
5. Finally, some scholars have argued that the strength of conflict is important—if task
conflict is very low, people aren’t really engaged or addressing the important issues.
a. If task conflict is too high, however, infighting will quickly degenerate into
personality conflict.
b. According to this view, moderate levels of task conflict are optimal.
i. Supporting this argument, one study in China found that moderate levels of
task conflict in the early development stage increased creativity in groups, but
high levels decreased team performance.
6. Finally, the personalities of the teams appear to matter.
a. A recent study demonstrated that teams made up of individuals who are, on
average, high in openness and emotional stability are better able to turn task
conflict into increased group performance.
b. The reason may be that open and emotionally stable teams can put task conflict in
perspective and focus on how the variance in ideas can help solve the problem,
rather than letting it degenerate into relationship conflicts.
7. What about process conflict? Researchers found that process conflicts revolve around
delegation and roles. Conflicts over delegation often revolve around shirking, and
conflicts over roles can leave some group members feeling marginalized.
8. Thus, process conflicts often become highly personalized and quickly devolve into
relationship conflicts.
a. It’s also true, of course, that arguing about how to do something takes time away
from actually doing it. We’re all been part of groups in which the arguments and
debates about roles and responsibilities seem to go nowhere.
B. Loci of Conflict
1. Another way to understand conflict is to consider its locus, or where the conflict
occurs.
2. Here, too, there are three basic types.
a. Dyadic conflict is conflict between two people.
b. Intragroup conflict occurs within a group or team.
c. Intergroup conflict is conflict between groups or teams.
3. Nearly all the literature on task, relationship, and process conflict considers
intragroup conflict (within the group).
4. That makes sense given that groups and teams often exist only to perform a particular
task. However, it doesn’t necessarily tell us about the other loci of conflict.
5. Another intriguing question about loci is whether conflicts interact or buffer one
another.
a. Intense intergroup conflict can be quite stressful to group members and might
well affect the way they interact.
6. Thus, understanding functional and dysfunctional conflict requires not only that we
identify the type of conflict; we also need to know where it occurs.
7. It’s possible that while the concepts of task, relationship, and process conflict are
useful in understanding intragroup or even dyadic conflict, they are less useful in
explaining the effects of intergroup conflict.
III. The Conflict Process
A. Introduction
1. The conflict process has five stages: potential opposition or incompatibility,
cognition and personalization, intentions, behavior, and outcomes. (Exhibit 14-2)
B. Stage I: Potential Opposition or Incompatibility
1. Communication
a. Communication as a source of conflict represents those opposing forces that arise
from semantic difficulties, misunderstandings, and “noise” in the communication
channels.
b. Differing word connotations, jargon, insufficient exchange of information, and
noise in the communication channel are all barriers to communication and
potential antecedents to conflict.
c. The potential for conflict increases when either too little or too much
communication takes place.
d. Communication is functional up to a point, after which it is possible to over
communicate, increasing the potential for conflict.
2. Structure
a. The term structure includes variables such as size, degree of specialization,
jurisdictional clarity, member-goal compatibility, leadership styles, reward
systems, and the degree of dependence.
b. Size and specialization act as forces to stimulate conflict.
3. Personal variables—include personality, emotions, and values.
a. 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.
b. Emotions can also cause conflict even when they are not directed at others.
C. Stage II: Cognition and Personalization
1. Antecedent conditions lead to conflict only when the parties are affected by and
aware of it.
2. However, because a disagreement is a perceived conflict does not mean it is
personalized.
3. Conflict is personalized when it is felt and when individuals become emotionally
involved.
4. This stage is where conflict issues tend to be defined and this definition delineates the
possible settlements.
5. Second, emotions play a major role in shaping perceptions.
6. Negative emotions produce oversimplification of issues, reductions in trust, and
negative interpretations of the other party’s behavior.
7. Positive feelings increase the 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.
D. Stage III: Intentions
1. Intentions are decisions to act in a given way.
a. Why are intentions separated out as a distinct stage? Merely one party attributing
the wrong intentions to the other escalates a lot of conflicts.
b. One author’s effort to identify the primary conflict-handling intentions is
represented in Exhibit 14-3.
c. Five conflict-handling intentions can be identified: competing, collaborating,
avoiding, accommodating, and compromising.
E. Stage IV: Behavior
1. Stage IV is where conflicts become visible. The behavior stage includes the
statements, actions, and reactions made by the conflicting parties. These conflict
behaviors are usually overt attempts to implement each party’s intentions. (Exhibit
14-4)
2. At the lower part of the continuum, conflicts are characterized by subtle, indirect, and
highly controlled forms of tension.
3. Conflict intensities escalate as they move upward along the continuum until they
become highly destructive.
4. 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?
a. This brings us to techniques of conflict management.
b. Exhibit 14-5 lists the major resolution and stimulation techniques that allow
managers to control conflict levels.
c. We have already described several as conflict-handling intentions.
d. Under ideal conditions, a person’s intentions should translate into comparable
behaviors.
F. Stage V: Outcomes
1. Outcomes may be functional—improving group performance, or dysfunctional in
hindering it. (Exhibit 14-1)
2. Functional outcomes
a. Conflict is constructive when it:
i. Improves the quality of decisions.
ii. Stimulates creativity and innovation.
iii. Encourages interest and curiosity.
iv. Provides the medium through which problems can be aired and tensions
released.
v. Fosters an environment of self-evaluation and change.
3. Dysfunctional outcomes
a. The destructive consequences of conflict on the performance of a group or an
organization are generally well known.
b. A substantial body of literature documents how dysfunctional conflicts can reduce
group effectiveness.
4. Managing functional conflict
a. If managers recognize that in some situations conflict can be beneficial, what can
they do to manage conflict effectively in their organizations?
b. Groups that resolve conflicts successfully discuss differences of opinion openly
and are prepared to manage conflict when it arises.
c. Differences across countries in conflict resolution strategies may be based on
collectivistic tendencies and motives.
IV. Negotiation
A. Introduction
1. Negotiation is a process in which two or more parties exchange goods or services and
attempt to agree upon the exchange rate for them. We use the terms negotiation and
bargaining interchangeably.
2. Although we commonly think of the outcomes of negotiation in one-shot economic
terms, every negotiation in organizations also affects the relationship between the
negotiators and the way the negotiators feel about themselves.
3. 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.
4. Note that we use the terms negotiation and bargaining interchangeably.
B. Bargaining Strategies
1. Two general approaches to negotiation: (Exhibit 14-6)
a. Distributive bargaining
b. Integrative bargaining
2. Distributive bargaining
a. The essence of distributive bargaining is negotiating over who gets what share
of a fixed pie.
i. By fixed pie, we mean a set amount of goods or services to be divvied up.
ii. When the pie is fixed, or the parties believe it is, they tend to bargain
distributively.
b. The most widely cited example of distributive bargaining is in labor-management
negotiations over wages.
i. The essence of distributive bargaining is depicted in Exhibit 14-7.
(a) Parties A and B represent two negotiators.
(b) Each has a target point that defines what he or she would like to achieve.
(c) Each also has a resistance point, which marks the lowest outcome that is
acceptable.
(d) The area between these two points makes up each one’s aspiration range.
(e) As long as there is some overlap between A and B’s aspiration ranges,
there exists a settlement range where each one’s aspirations can be met.
c. When engaged in distributive bargaining, one of the best things you can do is
make the first offer, and make it an aggressive one.
3. Integrative bargaining
a. 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.
b. Both parties must be engaged for it to work.
c. In terms of intra-organizational behavior, all things being equal, integrative
bargaining is preferable to distributive bargaining.
d. Why do we not see more integrative bargaining in organizations? The answer lies
in the conditions necessary for this type of negotiation to succeed.
i. 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.
4. Compromise might be your worst enemy in negotiating a win-win agreement.
i. The reason is that compromising reduces the pressure to bargain integratively.
ii. 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.
C. The Negotiation Process (Exhibit 14-8)
1. Preparation and planning
a. Do your homework.
i. What is the nature of the conflict?
ii. What is the history leading up to this negotiation?
iii. Who is involved, and what are their perceptions of the conflict?
iv. What do you want from the negotiation?
v. What are your goals?
b. You also want assess what you think are the other party’s goals.
c. When you can anticipate your opponent’s position, you are better equipped to
counter his or her arguments with the facts and figures that support your position.
d. Relationships will change as a result of a negotiation, so that’s another outcome to
take into consideration.
e. Once you have gathered your information, use it to develop a strategy.
i. Determine your and the other side’s Best Alternative to a Negotiated
Agreement (BATNA).
ii. Your BATNA determines the lowest value acceptable to you for a negotiated
agreement.
iii. Any offer you receive that is higher than your BATNA is better than an
impasse.
2. Definition of ground rules
a. Who will do the negotiating? Where will it take place? What time constraints, if
any, will apply?
b. To what issues will negotiation be limited? Will there be a specific procedure to
follow if an impasse is reached?
c. During this phase, the parties will also exchange their initial proposals or
demands.
3. Clarification and justification
a. When initial positions have been exchanged, explain, amplify, clarify, bolster, and
justify your original demands.
b. This need not be confrontational.
c. You might want to provide the other party with any documentation that helps
support your position.
4. Bargaining and problem solving
a. The essence of the negotiation process is the actual give-and-take in trying to hash
out an agreement.
b. Concessions will undoubtedly need to be made by both parties.
5. Closure and implementation
a. The final step—formalizing the agreement that has been worked out and
developing any procedures that are necessary for implementation and monitoring.
b. Major negotiations will require hammering out the specifics in a formal contract.
c. For most cases, however, closure of the negotiation process is nothing more
formal than a handshake.
D. Individual Differences in Negotiation Effectiveness
1. Personality traits in negotiation
a. Can you predict an opponent’s negotiating tactics if you know something about
his/her personality? The evidence says “sort of.”
b. The evidence suggests that overall agreeableness is weakly related to negotiation
outcomes. Why is this the case?
i. It appears that the degree to which agreeableness, and personality more
generally, affects negotiation outcomes depends on the situation.
ii. The importance of being extraverted in negotiations, for example, will very
much depend on how the other party reacts to someone who is assertive and
enthusiastic.
iii. A recent study suggested that the type of negotiations matter as well. In this
study, agreeable individuals reacted more positively and felt less stress
(measured by their cortisol levels) in integrative negotiations than in
distributive ones.
(a) Low levels of stress, in turn, made for more effective negotiation
outcomes.
iv. Research also suggests intelligence predicts negotiation effectiveness, but, as
with personality, the effects aren’t especially strong.
2. Moods/emotions in negotiation
a. Moods and emotions influence negotiation, but the way they do depends on the
type of negotiation.
b. Another factor is how genuine your anger is—“faked” anger, or anger produced
from surface acting (see Chapter 4), is not effective, but showing anger that is
genuine (deep acting) is.
c. Another relevant emotion is disappointment.
i. Generally, a negotiator who perceives disappointment from his or her
counterpart concedes more.
d. Anxiety also appears to have an impact on negotiation.
e. One 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.
f. 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).
3. Culture in negotiations
a. Do people from different cultures negotiate differently? The simple answer is the
obvious one: yes, they do.
b. First, it appears that people generally negotiate more effectively within cultures
than between them.
i. For example, a Colombian is apt to do better negotiating with a Colombian
than with a Sri Lankan.
c. Second, it appears that in cross-cultural negotiations, it is especially important
that the negotiators be high in openness.
d. Finally, because emotions are culturally sensitive, negotiators need to be
especially aware of the emotional dynamics in cross-cultural negotiation.
4. Gender differences in negotiations
a. Men and women negotiate differently and these differences affect outcomes.
b. A popular stereotype is that women are more cooperative, pleasant, and
relationship-oriented in negotiations than men. There is some merit to this.
c. Men tend to place a higher value on status, power, and recognition, whereas
women tend to place a higher value on compassion and altruism.
d. Moreover, women do tend to value relationship outcomes more than men, and
men tend to value economic outcomes more than women.
e. These differences affect both negotiation behavior and negotiation outcomes.
i. Compared to men, women tend to behave in a less assertive, less
self-interested, and more accommodating manner.
ii. However, the disparity goes even further than that. Because of the way
women approach negotiation, other negotiators seek to exploit female
negotiators by, for example, making lower salary offers.
f. So what can be done to change this troublesome state of affairs?
i. First, organizational culture plays a role here.
ii. If an organization, even unwittingly, encourages a predominantly competitive
model for negotiators, this will tend to increase gender-stereotypic behaviors
(men negotiating competitively, women negotiating cooperatively), and it will
also increase backlash when women go against stereotype.
iii. Second, at an individual level, women cannot directly control male
stereotypes of women. Fortunately, such stereotypes are fading. However,
women can control their own negotiating behavior.
V. Negotiating in a Social Context
A. Introduction
1. To really understand negotiations in practice, we must then consider the social factors
of reputation and relationships.
B. Reputation
1. Your reputation is the way other people think and talk about you.
a. When it comes to negotiation, having a reputation for being trustworthy matters.
b. In short, trust in a negotiation process opens the door to many forms of integrative
negotiation strategies that benefit both parties.
2. The most effective way to build trust is to behave in an honest way across repeated
interactions.
a. Then, others feel more comfortable making open-ended offers with many
different outcomes.
b. This helps to achieve win-win outcomes, since both parties can work to achieve
what is most important to themselves while still benefitting the other party.
3. What type of characteristic helps a person develop a trustworthy
reputation? A combination of competence and integrity.
a. Negotiators higher in self-condence and cognitive ability are
seen as more competent by negotiation partners.
b. They are also considered better able to accurately describe a
situation and their own resources, and more credible when they
make suggestions for creative solutions to impasses.
4. Individuals who have a reputation for integrity can also be more
effective in negotiations.
