a. They are seen as more likely to keep their promises and present
information accurately, so others are more willing to accept their
promises as part of a bargain.
2. Finally, individuals who have higher reputations are better liked and
have more friends and allies—in other words, they have more social
resources, which may give them more understood power in
negotiations.
II. Third-Party Negotiations
1. When individuals or group representatives reach a stalemate and are unable to resolve
their differences through direct negotiations, they may turn to a third party.
2. A mediator is a neutral third party who facilitates a negotiated solution by using
reasoning and persuasion, suggesting alternatives, and the like.
3. An arbitrator is a third party with the authority to dictate an agreement.
4. A conciliator is a trusted third party who provides an informal communication link
among parties.
III. Summary and Implications for Managers
A. While many people assume conflict lowers group and organizational performance, this
assumption is frequently incorrect.
B. Conflict can be either constructive or destructive to the functioning of a group or unit.
C. Levels of conflict can be either too high or too low to be constructive. Either extreme
hinders performance.
D. 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:
1. 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.
2. 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.
3. 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.
4. 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.
5. 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.
EXPANDED 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.
B. 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.
1. This describes that point when an interaction “crosses over” to become an inter-party
conflict.
2. It encompasses the wide range of conflicts that people experience in organizations.
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.
i. The larger the group and more specialized its activities, the greater the
likelihood of conflict.
ii. The potential for conflict is greatest where group members are younger and
turnover is high.
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,
represented in Exhibit 14-2, is along two dimensions:
i. Cooperativeness—the degree to which one party attempts to satisfy the other
party’s concerns.
ii. Assertiveness—the degree to which one party attempts to satisfy his or her
own concerns.
2. Five conflict-handling intentions can be identified: competing, collaborating,
avoiding, accommodating, and compromising.
a. Competing
i. When one person seeks to satisfy his or her own interests, regardless of the
impact on the other parties to the conflict.
b. Collaborating
i. When the parties to conflict each desire to fully satisfy the concerns of all
parties. The intention is to solve the problem by clarifying differences rather
than by accommodating.
c. Avoiding
i. A person may recognize that a conflict exists and want to withdraw from or
suppress it.
d. Accommodating
i. When one party seeks to appease an opponent, that party is willing to be
self-sacrificing.
e. Compromising
i. When each party to the conflict seeks to give up something, sharing occurs,
resulting in a compromised outcome. There is no clear winner or loser, and the
solution provides incomplete satisfaction of both parties’ concerns.
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. Stage IV is a dynamic process of interaction; conflicts exist somewhere along a
continuum.
3. At the lower part of the continuum, conflicts are characterized by subtle, indirect, and
highly controlled forms of tension.
4. Conflict intensities escalate as they move upward along the continuum until they
become highly destructive.
5. 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. How might conflict act as a force to increase group performance?
i. Conflict is constructive when it:
(a) Improves the quality of decisions.
(b) Stimulates creativity and innovation.
(c) Encourages interest and curiosity.
(d) Provides the medium through which problems can be aired and tensions
released.
(e) 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.
i. Uncontrolled opposition breeds discontent, which acts to dissolve common
ties and eventually leads to the destruction of the group.
b. A substantial body of literature documents how dysfunctional conflicts can reduce
group effectiveness.
i. Among the more undesirable consequences are hampered communication,
reductions in group cohesiveness, and subordination of group goals to the
primacy of infighting among members.
ii. All forms of conflict—even the functional varieties—appear to reduce group
member satisfaction and reduce trust.
iii. When active discussions turn into open conflicts between members,
information sharing between members has been shown to decrease
significantly.
iv. At the extreme, conflict can bring group functioning to a halt and threaten the
group’s survival.
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?
i. One of the keys to minimizing counterproductive conflicts is recognizing
when there really is a disagreement.
ii. Many apparent conflicts are due to people using different language to discuss
the same general course of action.
(a) For example, someone in marketing might focus on “distribution
problems,” while someone from operations will talk about “supply chain
management” to describe essentially the same issue.
iii. 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).
iv. 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.
v. Neither side may get exactly what it wants, but both sides will get the most
important parts of its agenda.
b. Groups that resolve conflicts successfully discuss differences of opinion openly
and are prepared to manage conflict when it arises.
i. 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.
ii. 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.
iii. Groups with cooperative conflict styles and a strong underlying identification
to the overall group goals are more effective than groups with a more
competitive style.
c. Differences across countries in conflict resolution strategies may be based on
collectivistic tendencies and motives.
i. Collectivist cultures see people as deeply embedded in social situations,
whereas individualist cultures see them as autonomous.
ii. As a result, collectivists are more likely to seek to preserve relationships and
promote the good of the group as a whole.
iii. They will avoid direct expression of conflicts, preferring indirect methods for
resolving differences of opinion.
iv. 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.
v. 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.
vi. 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.
vii. Interview data, however, suggests top management teams in Chinese
high-technology firms prefer collaboration even more than compromising and
avoiding.
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. An example of distributive bargaining is buying a car.
i. You go out to see the car. It is great and you want it.
ii. The owner tells you the asking price. You do not want to pay that much.
iii. The two of you then negotiate over the price.
iv. Its most identifying feature is that it operates under zero-sum conditions.
b. 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.
c. 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.
d. When engaged in distributive bargaining, one of the best things you can do is
make the first offer, and make it an aggressive one.
i. 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.
ii. Another reason, the anchoring bias, was mentioned in Chapter 6. People tend
to fixate on initial information.
iii. 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
it.
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.
i. Because integrative bargaining builds long-term relationships and facilitates
working together in the future, it bonds negotiators and allows each to leave
the bargaining table feeling victorious.
ii. Distributive bargaining, on the other hand, leaves one party a loser. It tends to
build animosities and deepens divisions.
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. Parties who are open with information and candid about their concerns.
ii. Sensitivity by both parties to the other’s needs.
iii. The ability to trust one another.
iv. A willingness by both parties to maintain flexibility.
e. 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 to 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.
i. 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.
ii. If preserving the relationship will make you seem weak and easily exploited,
you may want to consider a more aggressive style.
iii. 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.
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.
c. Research also suggests intelligence predicts negotiation effectiveness, but, as with
personality, the effects aren’t especially strong.
i. In a sense, these weak links are good news because they mean you’re not
severely disadvantaged, even if you’re an agreeable extrovert, when it comes
time to negotiate.
ii. We all can learn to be better negotiators.
2. Moods/emotions in negotiation
a. Moods and emotions influence negotiation, but the way they do depends on the
type of negotiation.