i. 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.
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.
i. It also appears that having a history of showing anger, rather than
sowing the seeds of revenge, actually induces more concessions
because the other party perceives the negotiator as “tough.”
ii. Finally, culture seems to matter. For instance, one study found that
when East Asian participants showed anger, it induced more
concessions than when the negotiator expressing anger was from the
United States or Europe, perhaps because of the stereotype of East
Asians as refusing to show anger.
c. Another relevant emotion is disappointment.
i. Generally, a negotiator who perceives disappointment from his or her
counterpart concedes more.
(a) In one study, Dutch students were given 100 chips to bargain over.
Negotiators who expressed disappointment were offered 14 more
chips than those who didn’t.
(b) In a second study, showing disappointment yielded an average
concession of 12 chips. Unlike a show of anger, the relative power
of the negotiators made no difference in either study.
(c) 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.
d. Anxiety also appears to have an impact on negotiation.
i. For example, one study found that individuals who experienced more
anxiety about a negotiation used more deceptions in dealing with
others.
2. 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.
3. Gender differences in negotiations
a. Men and women negotiate differently and those differences affect
outcomes.
b. A popular stereotype is that women are more cooperative, pleasant, and
relationship-oriented in negotiations than men.
c. There is some merit to this.
d. Men tend to place a higher value on status, power, and recognition,
whereas women tend to place a higher value on compassion and altruism.
e. Moreover, women do tend to value relationship outcomes more than men,
and men tend to value economic outcomes more than women.
f. 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.
g. 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.
II. 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-condence 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.
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.
5. 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.
C. 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.
a. They are widely used in labor-management negotiations and in civil court
disputes.
b. The key to success—the conflicting parties must be motivated to bargain
and resolve their conflict, intensity cannot be too high, and the mediator
must be perceived as neutral and non-coercive.
3. An arbitrator is a third party with the authority to dictate an agreement.
a. It can be voluntary (requested) or compulsory (forced on the parties by
law or contract).
b. The big plus of arbitration over mediation is that it always results in a
settlement.
4. A conciliator is a trusted third party who provides an informal
communication link among parties.
a. This role was made famous by Robert Duval in the first Godfather film.
b. Comparing its effectiveness to mediation has proven difficult.
c. Conciliators engage in fact finding, interpreting messages, and persuading
disputants to develop agreements.
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.
6. 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.
Myth or Science?
“Teams Negotiate Better than Individuals in
Collectivistic Cultures”
This exercise contributes to:
Learning Objectives: Apply the five steps of the negotiation process; Show how individual differences
influence negotiations
Learning Outcome: Describe the nature of conflict and the negotiation process
AACSB: Written and oral communication; Diverse and multicultural work environments; Reflective
thinking
According to a recent study, this statement appears to be false.
In general, the literature has suggested that teams negotiate more effectively than
individuals negotiating alone. Some evidence indicates that team negotiations create
more ambitious goals, and that teams communicate more with each other than individual
negotiators do.
Common sense suggests that if this is indeed the case, it is especially true in collectivistic
cultures, where individuals are more likely to think of collective goals and be more
comfortable working in teams. A recent study of the negotiation of teams in the United
States and in Taiwan, however, suggests that this common sense is wrong. The
researchers conducted two studies comparing two-person teams with individual
negotiators. They defined negotiating effectiveness as the degree to which the negotiation
produced an optimal outcome for both sides. U.S. teams did better than solo individuals
in both studies. In Taiwan, solo individuals did better than teams.
Why did this happen? The researchers determined that in Taiwan, norms respecting
harmony already exist, and negotiating in teams only amplifies that tendency. This poses
a problem because when norms for cooperation are exceptionally high, teams “satisfice”
to avoid conflict. In contrast, because the United States is individualistic, solo teams may
only amplify their tendencies to focus solely on their own interests, which makes
reaching integrative solutions harder.
Overall, these findings suggest that negotiating individually works best in collectivistic
cultures, and negotiating in teams works best in individualistic cultures.
Sources: Based on M. J. Gelfand, J. Brett, B. C. Gunia, L. Imai, T. Huang, et al., “Toward a Culture-by-Context Perspective on
Negotiation: Negotiating Teams in the United States and Taiwan,” Journal of Applied Psychology 98 (2013), pp. 504–-513; and A.
Graf, S. T. Koeszegi, and E.-M. Pesendorfer, “Electronic Negotiations in Intercultural Interfirm Relationships,” Journal of Managerial
Psychology 25 (2010), pp. 495–-512.
Class Exercise
1. Ask students to read the paper at
http://www.kwintessential.co.uk/cultural-services/articles/cross-cultural-negotiati
on.html.
2. Divide the class into task teams of three to five students each.
3. Have each task team select a country in which to create a joint venture with a
local company.
4. Each team should create a plan for the upcoming negotiations for the joint
venture.
5. The plan should include how the team perceives the negotiation issues. The paper
should be addressed to meet its joint venture objective.
Teaching Notes
This exercise is applicable to face-to-face classes or synchronous online classes such as
BlackBoard 9.1, Breeze, WIMBA, and Second Life Virtual Classrooms. See
http://www.baclass.panam.edu/imob/SecondLife for more information.
Career OBjectives
How can I get a better job?
This exercise contributes to:
Learning Objectives: Apply the five steps of the negotiation process; Show how individual differences
influence negotiations
Learning Outcome: Describe the nature of conflict and the negotiation process
AACSB: Written and oral communication; Diverse and multicultural work environments; Reflective
thinking
I feel like my career is at a standstill, and I want to talk to my boss about getting a more
developmental assignment. How can I negotiate effectively for a better job position? —
Wei
Dear Wei:
You’re certainly starting out on the right foot. A lot of people focus on a salary as a way
to achieve success and negotiate for the best short-run offer. There’s obviously an
advantage to this strategy in the short run, but sustained career growth has better payoffs
in the long run. Developing skills can help put you on track for multiple salary increases.
A strong skill set from developmental assignments will also give you a better position for
future negotiations because you will have more career options.
Long-term career negotiations based on developmental assignments also often are easier
to bring up with a supervisor. That’s because salary negotiations are often a zero-sum
situation, but career development negotiations can bring positive outcomes to both sides.
When negotiating for a developmental assignment, make sure you emphasize a few
points with your supervisor:
• When it comes to salary negotiations, either you get the money, or the company
keeps the money. Given that, your interests and the interests of your managers are
directly opposed. On the other hand, negotiating for developmental assignments
usually means finding ways to improve not just your skills, but also your
contribution to the company’s bottom line. You can, in complete honesty, frame
the discussion around these mutual benefits.
• Let your supervisor know that you are interested in getting better at your job, and
that you are motivated to improve through a developmental assignment. Asking
your supervisor for opportunities to grow is a clear sign that you are an employee
worth investing in.
• Be open to creative solutions. It’s possible that there are some idiosyncratic
solutions (also called “I-deals”) for enhancing both your interests and those of
your supervisor. One of the best things about an integrative bargaining situation
like this is that you and your negotiation partner can find novel solutions that
neither would have imagined separately.
Think strategically about your career, and you’ll likely find you can negotiate not just for
a better paycheck tomorrow, but for a paycheck that keeps increasing in the years to
come.
Sources: Y. Rofcanin, T. Kiefer, and K. Strauss, “How I-Deals Build Resources to Facilitate Reciprocation: Mediating Role of Positive
Affective States,” Academy of Management Proceedings, August, 2014, DOI: 10.5465/AMBPP.2014.16096abstract; C. Liao, S. J.
Wayne, and D. M. Rousseau, “Idiosyncratic Deals in Contemporary Organizations: A Qualitative and Meta-Analytical Review,”
Journal of Organizational Behavior, October 16, 2014, DOI: 10.1002/job.1959; and V. Brenninkmeijer and M. Hekkert-Koning,“To
Craft or Not to Craft,” Career Development International 20 (2015): 147–62.
An Ethical Choice
Using Empathy to Negotiate More Ethically
This exercise contributes to:
Learning Objectives: Apply the five steps of the negotiation process; Show how individual differences
influence negotiations
Learning Outcome: Describe the nature of conflict and the negotiation process
AACSB: Written and oral communication; Ethical understanding and reasoning; Reflective thinking
You may have noticed that much of our advice for negotiating effectively depends on
understanding the perspective and goals of the person with whom you are negotiating.
Preparing checklists of your negotiation partner’s interests, likely tactics, and BATNA
have all been shown to improve negotiation outcomes. Can these steps make you a more
ethical negotiator as well? Studies suggest that it might.
Researchers asked respondents to indicate how much they tended to think about other
people’s feelings and emotions and to describe the types of tactics they engaged in during
a negotiation exercise. More empathetic individuals consistently engaged in fewer
unethical negotiation behaviors like making false promises and manipulating information
and emotions.
When considering how to improve your ethical negotiation behavior, follow these
guidelines:
1. Try to understand your negotiation partner’s perspective, not just by understanding
cognitively what the other person wants, but by empathizing with the emotional
reaction he or she will have to the possible outcomes.
2. Be aware of your own emotions, because many moral reactions are fundamentally
emotional. One study found that engaging in unethical negotiation strategies
increased feelings of guilt, so by extension, feeling guilty in a negotiation may mean
you are engaging in behavior you’ll regret later.
3. Beware of empathizing so much that you work against your own interests. Just
because you try to understand the motives and emotional reactions of the other side
does not mean you have to assume the other person is going to be honest and fair in
return. So be on guard.
Sources: Based on T. R. Cohen, “Moral Emotions and Unethical Bargaining: The Differential Effects of Empathy and Perspective
Taking in Deterring Deceitful Negotiation,” Journal of Business Ethics 94, no. 4 (2010), pp. 569–579; and R. Volkema, D. Fleck, and
A. Hofmeister, “Predicting Competitive-Unethical Negotiating Behavior and Its Consequences,” Negotiation Journal 26, no. 3 (2010),
pp. 263–286.
Class Exercise
1. Divide the class into teams of two.
2. Each team is to role play a negotiation on the rental of a venue for a fraternity
party concert (one student’s role) and the rental ballroom owner (the other
student’s role). The ballroom is privately-owned and has, in the past, charged
renters by the person attending or a flat rate. In addition, in the past, the rental
owner required refreshments and beverages to be purchased through his
organization. And the owner requires security throughout the evening in the
parking lot and inside to ensure no conflicts occur.
3. The two should try to use empathy as a basis for the negotiations. See the guide at
http://www.negotiationinstitute.com/column/empathy-critical-skill-use-negotiatio
ns.
4. Have the class observe the negotiations of four of the teams. Rate the teams on
improvement of the use of empathy from the first group to the last.
Teaching Notes
This exercise is applicable to face-to-face classes or synchronous online classes such as
BlackBoard 9.1, Breeze, WIMBA, and Second Life Virtual Classrooms. See
http://www.baclass.panam.edu/imob/SecondLife for more information.
Personal Inventory Assessments
Strategies for Handling Conflict
We all handle conflict, but few of us may have actual strategies in place. Take this PIA to
further explore ways to handle conflict.
Point/Counterpoint
Pro Sports Strikes Are Caused by Greedy Owners
This exercise contributes to:
Learning Objectives: Show how individual differences influence negotiations; Assess the role of third-party
negotiations
Learning Outcome: Describe the nature of conflict and the negotiation process
AACSB: Written and oral communication; Reflective thinking
Point
I’m as sick as anyone of the constant strikes, lockouts, and back-and-forth negotiations
between sports teams and the players’ unions. Of the major pro sports leagues, Major
League Baseball (MLB) is the only one not to have had a strike since 1995 – and it had
eight in its history. You’ve got to wonder why this keeps happening. Here’s why: owners’
greed knows no limit.
In nearly every recent strike or lockout, the main issue was money and how to divide it.
When the National Hockey League (NHL) locked out the players during the 2012-2013
season, the owners were the instigators. They wanted to reduce the players’ share of
hockey revenues. They wanted to eliminate salary arbitration. They wanted to introduce
term limits to contracts. They wanted to change free-agency rules and eliminate signing
bonuses. On a philosophical level, some of these proposals are interesting because they
reveal that owners want to restrict competition when it suits them and increase it when it
benefits them.
While the owners were whining about the unfairness of long-term contracts, the
Minnesota Wild’s owner Craig Leipold, a noted negotiations hawk, signed Zach Parise
and Ryan Suter to identical 13-year, $98 million contracts. Contracts like these suggest
that owners want the players’ union to save them from themselves.
Perhaps some of this would make sense if the owners were losing money hand over fist,
but that is hardly the case. The NHL has three teams worth over $1 billion each, and few
are worth less than $200 million. The owners aren’t hurting either. Most are millionaires
many times over. Los Angeles Kings owner Philip Anschutz is reported to have a net
worth of $12 billion.
Forbes reports the average NFL team is now worth over more than $1.43 billion and the
Dallas Cowboys are worth $3.2 billion; even low revenue and poorly run teams make
money. Take the Jacksonville Jaguars. Wayne Weaver paid $208 million for the team in
1993. It has never made it to the Super Bowl and is almost always an also-ran in its
division. Did the team’s ineffectiveness really cost Weaver? He sold the club for $770
million in 2012.
In essence, what we have are rich owners trying to negotiate rules that keep them from
competing with one another for players. It’s a bald-faced and hypocritical attempt to use
their own kind of union to negotiate favorable agreements, all the while criticizing the
players’ unions.
Counterpoint
Major league owners are an easy target. But they have the most to lose from work
stoppages. It’s the players and their unions who push the envelope.
It’s true that most major league players are well rewarded for their exceptional talents and
the risks they take. It’s also true that owners who are able to invest in teams are wealthy
—investors usually are. But the fault for disputes lies with spoiled players—and the
union leaders who burnish their credentials and garner the limelight by fanning the
flames of discontent.
On this latter point, give all the credit in the world to the union negotiators (paid millions
themselves), who do nothing if not hawk publicity and use hardball negotiating tactics.
Take the NHL players’ union boss Donald Fehr. For a recent “negotiation” set to begin at
10 A.M., he arrived at 11:15. At exactly 12:00, he announced he had a lunch meeting
uptown and left.
As for the players, pro athletes are entitled almost by definition. For example, one
recently retired NFL player and union representative, Chester Pitts, was commenting
about how he had to settle for an $85,000 Mercedes instead of a $250,000 car. Well, we
all have to make sacrifices. One rookie, Jets’ quarterback Geno Smith, fired his agent
after signing “only” a four-year contract for roughly $4.99 million. Smith called the
contract “hard to stomach.” I see a future in the player’s union for this guy.
Do we really need labor unions for workers whose average salaries are $2 million (NFL),
$2.58 million (NHL), $3.82 million (MLB), and $4.9 million? NHL clubs spent 76
percent of their gross revenues on players’ salaries and collectively lost $273 million the
year before the most recent lockout. It’s not much better in the NBA, where many teams
lose money. Take the Dallas Mavericks, who have rarely made money since 2002, despite
playing in the fourth-most populous metro area and winning the NBA title in 2011.
It’s easy to argue that major league sports have an unusual number of labor disputes, but
that’s not necessarily accurate. Did you hear about the 2015 largest strike of oil refinery
workers in decades or the ongoing worldwide strikes by low-paid workers in the
fast-food industry? Somehow these strikes don’t always make the news or our collective
consciousness as much as sports strikes. Sports strikes interest us, but we shouldn’t fall
into the trap of blaming these on the owners.
Sources: #104 Philip Anschutz, Forbes real time net worth, http://www.forbes.com/profile/philip-anschutz/, downloaded
June 9, 2015; T. Cary, “The 3 NHL Teams That Are Worth a Billion Dollars,” Sports Cheat Sheet, June 6, 2015; K. Badenhausen,
“Average MLB Player Salary Nearly Double NFL’s, but Still Trails NBA’s,” Forbes, January 23, 2015, http://www.forbes.com/
sites/kurtbadenhausen/2015/01/23/average-mlb-salary-nearly-double-nfls-but-trails-nba-players/; J. Feinstein, “In the
NHL Lockout, the Owners Have It All Wrong,” Washington Post, December 25, 2012, downloaded May 29, 2013, from http://
articles.washingtonpost.com/; R. Cimini, “Geno Smith’s Maturity Questioned,” ESPN, May 3, 2013, downloaded May 3, 2013,
from http://espn.go.com/; K. Campbell, “Thanks to Donald Fehr, NHL Negotiating against Itself … and Losing,” The Hockey
News, December 29, 2012, downloaded May 29, 2013, from http://sports.yahoo.com/; B. Murphy, “20 Years of Peace and
Prosperity Have Followed MLB’s Last Strike,” Twin Cities, July 5, 2014, http://www.twincities.com/sports/ci_26095630/
peace-that-lasts-since-1994-season-ending-strike; and E. Seba, “Oil Refinery Strike Widens to Largest U.S. Plant,” Huffington
Post, February 21, 2015, http://www.huffingtonpost.com/2015/02/21/us-refinery-strike-wide_n_6727736.html.
Class Exercise
1. Divide the class into paired teams of three to five students each.
2. Have one group in a pair take the Point side and the other the Counterpoint side.
3. Have the groups prepare a debate (see
http://olc.spsd.sk.ca/de/pd/instr/strats/debates/QandA.pdf for guidance).
4. Ask pairs to present debates before the class.
5. The class should vote on which side prevails in the debate.