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Module 11 - Negotiation
What's the benefit of studying this topic?
Working, perhaps living in different countries, means multiple
levels of negotiation. Holding an awareness of cultural impact
in your negotiations will enable you to be open and effective.
This mindset sets you up for success in a global, interconnected
work life.
Readings:
· Adler Ch 9 emphasizes specifics of different negotiation styles
likely tied to a range of cultural values
· Adler Ch 10 explores cultural transitions when living in
different countries
· Adler Ch 11 suggests an important role for your spouse as
you/your family adventure across country borders and cultural
values. Although US-centric culture often omits an emphasis on
family, when managing professional advancement, family goals
are emphasized in other cultures, and underpin important career
negotiations.
· Lecture 11 (below)
Review:
· Power Point offers insights on the qualities of a good
negotiator, and a checklist for managing the negotiation
environment. (Scroll down to locate power point).
· Select 1 video clip or more, to add ideas. (See last section at
the end of this web page).
Module 11Negotiations in Multi-Cultural Settings to Bring It
All Together
Introduction: Setting the Stage
Keep three key areas in mind discussed in other modules:
ethics, motivation, and decision making. Think about how the
ideas within these earlier topics also impact conflict and
negotiation. The course elements are inter-related -- leadership
is about many differing areas of importance in an integrated
way.
But a leader must be an agent of change. As a change agent, he
or she will navigate through conflict and negotiations in making
decisions. Change is improved with effective management of
conflict in the organization.
Along with conflicts and negotiating them to solutions, comes
stress–let's spend a minute thinking about what stress can do.
Take the use of steel in construction. Steel is a durable, yet
flexible material that can accept much stress; enabling stability
in a building. The benefit over wood is that in a fire, the stress
of the heat won't cause damage as quickly. Yet, should the
stress be overwhelming on an increasing basis, the steel too,
will cease to function; and the building will fall. Stress is
generally a good thing; it allows the building to settle, and it
absorbs the effects of weather; but too much stress is not
healthy for the building or for leaders and workers. In managing
conflict negotiations well, you as a leader will need to also
balance time, pace, and communication to find the right level of
stress.
At-a-glance Definitions:
Conflict: Difference of view points, opposing perspectives, or a
disagreement. As a conflict deepens there is growing
understanding of harmful risk and expanded resistance to seeing
other opinions.
Negotiation: A process for determining agreement and
cooperation. This process is not a bad thing or situation. The
need to negotiate suggests awareness that something can be
better or improved.
Americans Have Framed Much of theNegotiationApproach:
USA leaders with their important history of industrial
development and the country's continued diversity of people
have influenced negotiation processes. Here's a basic American-
centric approach:
1. Keep calm. The party, who loses her or his cool first,
generally will come up short.
2. Negotiate with facts over emotion. Too often, the negotiator
will wave the flag, cry out for the disadvantaged, or over-
exaggerate the situation.
3. Be prepared to walk away and go another day. Sometimes it's
better to plant the seed, leave, and come back to the table.
4. Don't be afraid to give up something early. When you are
dealing with an issue that has benefit for both parties; give
something small up front. The other party will see the need to
reciprocate; and you then, want to go for the steak.
5. Kenny Rogers said it best, "know when to hold them; know
when to fold them; know when to walk away; know when to
run." By that, I mean - when negotiating, have a complete
picture of the situation; don't lose sight of the trees in the
forest; and be careful not to win a battle; but lose the war.
Differing Negotiation Expectations from Different Cultures:
Here's the issue–other cultures did not learn USA rules. They
learned their own and that cultural knowledge becomes an
important push or pull, when negotiations must happen across
cultural belief systems.
Information as Basis: What's valued
Presenting Ourselves: Expectations for Attitude
Determining an Agreement: What Interactions Seem Important
Arabs- affective appeals
Expectations are to build upon personal expression–joy, sadness
other feelings
Russians- axioms or principles appeal
Expectations are to start with grounding philosophy
Japanese-
· Emotional sensitivity is highly valued
· Emotions are hidden, highly subtle
· Face saving critical
Latin Americans-
· Emotional sensitivity valued
· Aggressive and passionate
· Explicit power plays
· One individual decides
Americans- factual appeals
Expectations are to use facts (objective data)
Americans-
· Often disregard role of emotions
· Hold a deep desire to be direct (and quick)
· Attitude of being practical
Americans-
· Emotional sensitivity not valued (seen as revealing weakness)
· Impersonal and straightforward
· Team input but often single decision make
· Factual, cost-benefit analysis-based decisions
Adapted and summarized from Adler, Ch 11, and Hofstede
Note: Selected cultural information and attention to a range of
countries compared with American culture aim to hold the
purpose of illustrating, not evaluating differences. Cultural
values are not good or bad. They exist and need to be
recognized. For more specific information, review reading
assigned from Adler found at the top of this web page.
Contrasting cultural expectations will be seen quickly in
negotiation discussions. These contrasts are likely to create a
sense of surprise and perhaps frustration. Here's an example:
· Americans may often focus on preparation, judgment,
integrity, persuasiveness.
· Chinese offer interactions which demonstrate dedication,
winning respect, broad perspective and integrity.
Adler (Chapter 9) suggests a more inclusive, dialogue approach
which is "culturally synergistic". When negotiating across
culture or working with a diverse group consider these actions
carefully:
· Prepare
· Train around cultural values
· Define interests
· Build relationships
· Separate people from the problem
· Observe and then adjust to other styles and pace
· Exchange information about people, experience, priorities and
tasks
· Invent options for mutual gain (actively use Best Alternatives)
· Use criteria appropriate for cultures represented.
Use of Best Alternatives--BATNA:
BATNA is a term coined by Roger Fisher and William Ury in
their 1981 bestseller, Getting to Yes: Negotiating Without
Giving In. The ideas in this book continue to be a standard for
learning negotiation skills.
BATNA stands for "best alternative to a negotiated agreement."
BATNAs help you as a manager to lead decision making
through conflict, because the planning provides you with a
wider range of options. With more options, critically thought
through (here's the value for critical thinking skill once more),
then you are better prepared to make a stronger, better decision
or plan. Said differently, you will not make a wise decision
without some thinking.
In the simplest negotiation, you may find that you and others
may easily find a 3rd option, based on discussion. In that case,
you don't need the BATNA. But more often, than not, the
process of critical thinking used to develop alternatives will
improve the negotiated agreement. Research into negotiation
behaviors continues today. In the web links in the last section of
this page, you will find a way to access the Project on
Negotiation (PON, 2012).
The reasons for negotiation are:
· There are different views for activities ahead and there's a
need for cooperation.
· The different views conflict.
· Better results are possible.
Having a good BATNA increases your negotiating power, and
influence for effective leading.
BATNAs are not always easily seen. They surface through
careful thinking and a simple process for finding the option that
fits.
1. Develop a list of actions you might take if no agreement is
reached.
2. Add to the more promising actions so that you can see them
as practical step by step actions.
3. Identify (decide) which option appears best.
Cultural values add complexity and diversity of beliefs require
the consideration of a broader range of factors and possibilities.
For example, a community discovers that its water is being
polluted by the discharges of a nearby factory, with
headquarters in another country. Community leaders' first
attempt to negotiate a cleanup plan with the company, but the
business refuses to voluntarily agree on a plan of action that the
community is satisfied with. In such a case, what are the
community's options for trying to resolve this situation?
· The community could wage a public education campaign and
inform citizens of the problem. This media attention could lead
to new interest from a competing multi-national agreeing to be a
"good corporate citizen" and offering better environmental
strategy for the community.
· They could contact a designated international agency (such as
subset of the United Nations) and see what sort of authority that
agency has over such a situation.
· Community leaders could lobby appropriate governing
agencies in country to develop and implement more stringent
regulations on polluting factories.
At the same time you are determining your BATNA, you should
also consider the alternatives available to the other side. The
more you can learn about their options, the better prepared you
will be for negotiation. In the discussion and learning process,
you may find that both others and yourself were not informed,
but thought you were. You are likely to discover more
constraints and underlying interests.
When negotiating with people holding more collectivist values,
as well as those who want to reduce uncertainties, know that
you will be expected to talk about various alternatives so that
everyone can develop or learn views of what may be very
reasonable. It will be helpful to hold an open, patient and
curious mindset.
Also understand that if you are acculturated as an American, or
if you grew up in a culture that has a high commitment to
competition (Hofstede) you want to be especially thoughtful
about how you see the outcome. Negotiation is not a horse race,
with one winning and others losing. Negotiation is a series of
discussions in which people learn, add to understanding, and
find a better solution for all interests represented.
Research Trends:
Studies related to negotiation have long held the interests of
psychologists, sociologists and the legal profession. Before the
20th century studies were reported, and conflict management
and mediation theorists having published more than 5,000
articles since.
Of keen, recent interest to the researchers are three topics: (a)
use of technology and computer simulations to assist with data
and strategy management of the negotiation process; (b)
exploration of emotional intelligence as a related field to add
resources and understanding about trust building; (c)
stakeholder theory and the role of important influence
impacting negotiations.
Module 10 - Decision Making
What's the benefit of studying this topic?
All managers make decisions in order to be successful leaders.
Because diversity and multi-cultural influences will increase in
most work units and teams, understanding the essential decision
making process from a view of diversity adds critical skill to
your performance.
Readings:
· Adler Ch. 8 describes basic decision making approach and
then delineates aspects of multi-cultural impact.
· Lecture 10 (below)
Review:
· Power Point outlines role of individual
perspective/responsibility for managing effective decisions.
(Scroll down to locate power point).
· Select 1 or more video clip to add ideas. (See last section of
this web page).
Module 10Decision Making for Leading Multi-cultural Groups
Introduction:
A multinational corporation was expanding its product line at an
existing operation in Greece. Headquarter leaders determined
that an up and coming talent with Greek parents might be
especially effective. During the interview for the job, he
consistently expressed his keen desire to get ahead. Two days
after arriving, the new manager called his workforce together.
As the group gathered they were jovial and appeared pleased to
hear from their new leader. They, too, were aware of his Greek
heritage. The new manager began by saying "I've decided it is
very important to have a clear product strategy. I also believe
you should offer competitive ideas–so that we get the best."
Then he asked the workers for their input. The group became
silent, with most people's eyes dropping to study the floor.
What happened? What side-tracked the manager's decision?
What process did the manager use–or did he? And what role
might cultural differences have played? In thinking about the
last question, it may be helpful to consider likely cultural
values often linked to Greek culture; while valuing competition
its society places importance on avoiding uncertainty or
minimizing risk. People often hold a strong regard for
positional leadership and its power, which can create distance
and diminish informal discussions.
At-a-glance definitions:
Decision: A determination, agreement, or declaration. Decisions
can be viewed as findings and factual; but they can also be
thought about as a judgment or opinion or ruling.
Decision Making: An approach or process, often using 5 steps
or activities, which include
· Set managerial objectives. What do we want to achieve in the
process? This activity may also be called recognizing the
problem to solve.
· Search for alternatives by gathering information. Don't just go
with some have called "the first right answer."
· Compare and evaluate the alternatives.
· Make a choice among the alternatives.
· Implement the decision chosen.
Follow up or monitor progress. This is a sixth step frequently
added to assure performance information and accountability
(Harrison, 1999).
Decision Process
Problem-Solving Cultures (often associated with higher
interests in individuality, competition, and lower attention to
uncertainty)
Situation Accepting Cultures (often associated with higher
interests in groups/collective mindset, cooperation, and higher
attention to longer time orientation)
Determining whether or not there's a problem
I should change the situation.
Some situations should be accepted for what they are.
Gathering Information to define alternatives
Emphasis on facts, data, and the "numbers".
Emphasis on ideas and possibilities.
Comparing alternatives as options
New and future-oriented alternatives, based on adults can learn
and change.
Past and Present included in alternatives, along with future,
based on adults hold values and expectation (little or no
change).
Make a choice
Act as quickly as possible.
Emphasize delegation.
Ruling Factors: Is the decision true or false?
Act with deliberation.
Emphasize the role of authority or positional power.
Ruling Factors: Is the decision good or bad?
Implementation
Managed from the top to plan and guide.
Each worker responsible for his part .
Managed through participation, using a more collective,
cooperative roll out.
The group or team is responsible.
Research Trends:
The topic of decision making and how to improve upon the
factors within that process, especially using technology
software, continues to hold the interest of researchers.
Over the past two decades there have been more and more
studies about decision processes linked to performance. (More
than 2600 publications of research in 2005-12). This research
was focused on robustness of information, metrics to add
reliability, and dissemination comparisons for assuring
adherence to decisions.
Decisions of effective leadership are another studied area.
(Approximately 525 published articles in peer reviewed journals
2005-12). Themes of research included impact of participation
and increased use of technology. Studies also appeared
organized by sector with emphasis on education and public
sector leadership decisions.
Decision making and cultural values are represented by a
smaller group of reported research. (94 studies in the past 6
years). Emphasis is on more effective marketing through the use
of cultural factors, particularly Hofstede's cultural dimension
studies (Business Source Complete Data Base 2012.
Constraints:
There are several factors that work against our taking the ideal
approach to decision making. These factors include:
· The myth of maximization. You may tend to believe that more
information may lead to a better decision. Sometimes, the
reverse is true; more information only clouds the issue.
· The need for "satisficing."If you have taken other management
courses, you may be familiar with this term. It means, simply,
"I can live with it." Satisficing occurs when the organization
opts for a course of action that may not be the ideal (the
maximized), but is acceptable.
· Time and cost. In this highly competitive environment, we
don't always have the luxury of gathering exhaustive amounts of
information. More than one company (IBM, for example) has
learned the hard way that sometimes it is necessary to go with
incomplete information in order to get one with it. Tom Peters
(1994) refers to this as the "Ready, Fire, Aim" approach -- an
approach that he says is necessary in today's frenetic workplace.
· Communication failures. Miscommunication can take many
forms -- failure to listen; overload and "noise;" failure to
present an unambiguous message, etc.
· Precedent. Often, how people make decisions depends on what
occurred previously. For example, if Company A had great
success with a direct mail marketing campaign for one product,
its marketing people may assume that such an approach will
work the next time.
Mindset or perception traps:
How people gather information and the interaction between
minds and the situation is selective and complex. Perception can
lead people into errors or what decision science experts term
"traps".
The Anchoring Trap: Use of familiar facts or data to set up and
credential a determination or a decision Here's how it works
when you answer these two questions together
· "Is the population of New York greater than 15 Million
people?"
· "What's your best estimate of the population of New York?"
The chances are that your answer to the second question will be
influenced by the first question. If the first question had used
"20 Million" many people would have then replied with a larger
number (and have fallen into how information was anchored).
The Status Quo Trap. Each of us has our own biases, and these
biases affect the decisions we make. When given a set of
alternatives, we will tend toward those that perpetuate the status
quo, in part because we feel safer with the known than the
unknown.
The Sunk-Cost Trap. Have you ever held onto a stock long after
it had real worth? Or retained an employee, even though we
knew at some level that he or she was not going to work out?
That's the "sunk-cost trap."
The Confirming-Evidence Trap. For years, IBM was convinced
that it was virtually invincible. So when the CEO went around
to various IBM sites, he asked staff how it was going. The
answer was just what he wanted to hear: Everything is going
great. (Hammond, Keeney and Raifa, 1998)
Judgment under Uncertainty:
Bazerman (2006) a recognized researcher on decision
methodologies, believes that decision makers look for certainty
even though many decisions are made in the face of uncertainty.
The main premise of Bazerman is understanding risk and
uncertainly will increase the likelihood of a quality decision
making process. Two concepts determine alternatives under
uncertainty:
· Probability (the likelihood that any particular outcome will
occur); and
· Expected value (weighing all potential outcomes associated
with the alternative by their probabilities and summing them).
When approaching uncertainty, Bazerman identifies systematic
ways to increase your awareness of uncertainty and risk. He
concludes that the process of framing is critical in developing a
manager's ability to make effective decisions.
To date there's little psycho-social research examining the
impact of cultures which appear to place priorities on reducing
uncertainty. However, as cultural awareness grows, interest can
expand around use of risk and holding expectations for avoiding
as much uncertainty as possible. Those who are acculturated to
pay particular attention to avoiding unknowns or uncertainties
can contribute ideas to deliberation when crossing cultural
borders. Their critical thinking and drive for added
discussion/information gathering may shape future decision
making processes in important ways. In the meantime, you as a
manager can be especially thoughtful about how and how much
time to spend on gathering information, thinking critically about
that information, to make good decisions.
Decision-Making: Hindsight Bias and the Assessment of Human
Performance:
Alex Agase, former Northwestern University football coach,
once quipped if you want to give him advice, do it on Saturday
between 1 and 4 o'clock, during the 25 seconds between plays.
Not on Monday. He knew the right thing to do on Monday.
Despite Agase's lament, Monday morning quarterbacking is still
a favorite American pastime at work. Clearly the interception
could have been avoided by running the ball. Since the outcome
is so clear, Monday morning quarterbacks question why the
coach couldn't anticipate it. We tend to expect that others
should know by foresight what we have learned by hindsight.
The problem is that this bias is not confined to football. It is
quite pervasive and has the potential to adversely impact a wide
variety of human behaviors, particularly turning leaders away
from telling more of the plan's story,
Being Smart After the Fact
Proclamations about human error are most always made "after
the fact," rarely before. As noted by Reason (1990), the most
significant psychological difference between individuals who
were involved in events leading up to a disaster and those who
are called upon to investigate after it occurred is knowledge of
the outcome. Investigators have the luxury in hindsight of
knowing how things are going to turn out; front line operators
and their supervisors do not. While most people would not
expect much credit for picking a horse after it has won the race,
many investigators are unaware of the influence of outcome
knowledge on their perceptions and reconstruct ions of the
incident. Given the advantage of a known outcome, what would
have been a bewildering array of non-convergent events
becomes assimilated into a coherent, causal framework for
making sense out of what happened. In fact, it may be difficult
to imagine it happening any other way. "Why couldn't they see
it?" is the question that is often asked. Such hindsight results in
expectations by investigators that participants should have
anticipated the incident by foresight; it also blinds them to what
actually would have been known had the roles been reversed. If
investigations of human error are to be fair and impartial,
appropriate actions and decisions need to be determined before
the mishap; not from the comfortable vantage point of
hindsight.
Process vs. Outcome
Russo and Schoemaker (1989) observed that many managers
have difficulty improving their decision-making processes.
Instead they focus on outcomes which limit clearer
understanding of process methods. These researchers had
managers choose between one of two potential new products to
market. It was given that Product A had a 50% chance of
succeeding, while product B had a 60% chance of succeeding.
In both cases, success meant a profit of one million dollars;
failure resulted in no profit. The company chose to market
Product B. It failed, and Product A is later marketed by a
competitor, and it succeeds. Did the company make the right
decision?
Managers were asked to rate the quality of the decision on a
scale from 1 (clearly made the wrong decision) to 7 (clearly
made the right decision). Their average rating was 4.4, showing
a fair degree of confusion as to the correct decision. The
decision to market product B was absolutely correct. Why didn't
they all respond with a 7, as any group of rational managers
should have? Because they let knowledge of the outcome
confuse their thinking about the worthiness of their decision.
Because chance factors will sometimes have their way
(accounting for 40% in this case) does not mean that clear
thinking should be abandoned. Part of the problem may be
cultural. In a very competitive U.S. business environment where
the stakes are very high, successful outcomes are highly valued.
New product managers are more likely to be rewarded for
successful outcomes than they are for implementing correct
decision processes which are less discernible.
Framing
Can even the way questions are framed influence the
reconstructive process?
The research of Elizabeth Loftus (1980) on memory and on the
reliability of eyewitness testimony provides a resounding "yes"
to the above question. Loftus described the problem this way.
Human memory does not work like a videotape recorder or a
movie camera. When a person wants to remember something, he
or she does not simply pluck a whole memory intact out of a
"memory store." The memory is constructed from stored and
available bits of information; any gaps in the information are
filled in unconsciously by inferences. When these fragments are
integrated and make sense, they form what we call "memory"
(p. 31).
Loftus' statement serves as a reminder that it is not just the
shadowy figures of the underworld or those of dubious integrity
that are likely to give unreliable testimony. Honest and
otherwise reliable people can sincerely affirm as true what is
actually false. When our memories are put to the test, we do not
discriminate very well what was actually encoded from what we
reconstructed to make sense of the event. Thus we can quite
sincerely testify as having observed something that never took
place because we may be relying on an active retrieval process
that fills in the gaps. This process is a normal and integral
aspect of our memory. There are many factors that influence the
way the gaps are filled in. Many of these factors are subtle and
contextual in nature. And outcome knowledge is one of the key
ingredients in shaping context.
In one of her experiments, Loftus showed how the framing of a
question can influence what is subsequently reported. With the
cooperation of the Seattle Police Department, Loftus and Palmer
(1974) had people view realistic films of actual and staged
automobile accidents and then answer questions about what they
saw. One of the questions was "About how fast were the cars
going when they smashed into each other?" This question
elicited a different estimate of speed than questions using the
verbs collided, bumped, hit, or contacted in place of smashed.
Although the subjects saw the same films, cars which were
framed by the word smashed were found, on average, to be
traveling nine miles per hour faster than cars which merely
contacted. Smashed provided some other information as well. A
week later, experimental subjects were called back and asked
"Did you see any broken glass?" Fourteen percent of the
subjects whose question was framed with the verb hit reported
seeing broken glass, while 32% of the subjects whose question
was framed with smashed reported seeing broken glass. As the
reader may have already guessed, there was no footage of
broken glass in the films seen by these "eyewitnesses."
Leadership and Decision Making:
What is the role that leaders can and should play in
organizational decision making? Here are five suggestions:
Recognize that decision making is a continuum. Who makes the
decision is not an either/or question. It's more complex than
that. The continuum runs all the way from Leader makes the
decision unilaterally, to Leader gathers information and then
makes the decision to lead and his or her team make the
decision jointly, to Leader delegates the final decision to others.
Effective leading does not depend on you having all the
answers. Look around for who may also have ideas and insights.
Leaders who are comfortable with themselves are also
comfortable in empowering others.
Consider a brainstorm and participation/negotiation. Decisions
should involve a group when the choice may be unpopular; or
when it would be helpful to gather additional information prior
to making a decision, or when you as a manager know that you
don't have important data, observations or direct experience.
(Note: Decision making ties into negotiation activities and
skills see module on that topic).
Know when to delegate the decision-making process. Not every
decision needs a committee. Consider who needs to take the
lead. Staff is often quite willing to have the CEO make some
decisions; it gives them a sense that someone is in charge.
Leadership and organizational culture are two sides of the same
coin. Know whether your work culture is more hierarchical or
more team focused. If the organizational culture is
participatory/team-centric or one in which it is OK to speak up.
You will observe workers doing so. As a result, the leader is
more likely to get the information needed to make an informed
decision.
If, on the other hand, the culture is characterized by "shoot the
messenger" with decisions handed down, only the foolhardy are
likely to want to be a player when it comes to making tough
decisions. The culture of strict hierarchy is changing in many
organizations, but your work as a leader means that you will
observe and become skilled at knowing when you can involve
others in decisions, and when you must be seen as the decision
maker.
Dynamics of diversity drive attention towards decisions and
how they are negotiated. But there is a paradox to consider:
While decision steps are central to your management authority,
there is limited information within success stories and case
studies about these details. This situation becomes problematic
when there are a range of cultural expectations. In contrast,
exploring how to making decisions by being attentive to diverse
views adds power and analytical skill to your management
performance.
Questions:
You can observe important lessons about your
decision/negotiating process by look at a memorable or “turning
point” event in which you recall a decision and how it was
negotiated, or not.
In what ways was that decision effective?
Was the decision negotiated? Why or why not?
Would that process work effectively if there were diverse
viewpoints?
(Modules 10 &11)

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  • 1. Module 11 - Negotiation What's the benefit of studying this topic? Working, perhaps living in different countries, means multiple levels of negotiation. Holding an awareness of cultural impact in your negotiations will enable you to be open and effective. This mindset sets you up for success in a global, interconnected work life. Readings: · Adler Ch 9 emphasizes specifics of different negotiation styles likely tied to a range of cultural values · Adler Ch 10 explores cultural transitions when living in different countries · Adler Ch 11 suggests an important role for your spouse as you/your family adventure across country borders and cultural values. Although US-centric culture often omits an emphasis on family, when managing professional advancement, family goals are emphasized in other cultures, and underpin important career negotiations. · Lecture 11 (below) Review: · Power Point offers insights on the qualities of a good negotiator, and a checklist for managing the negotiation environment. (Scroll down to locate power point). · Select 1 video clip or more, to add ideas. (See last section at the end of this web page). Module 11Negotiations in Multi-Cultural Settings to Bring It All Together Introduction: Setting the Stage Keep three key areas in mind discussed in other modules: ethics, motivation, and decision making. Think about how the ideas within these earlier topics also impact conflict and negotiation. The course elements are inter-related -- leadership
  • 2. is about many differing areas of importance in an integrated way. But a leader must be an agent of change. As a change agent, he or she will navigate through conflict and negotiations in making decisions. Change is improved with effective management of conflict in the organization. Along with conflicts and negotiating them to solutions, comes stress–let's spend a minute thinking about what stress can do. Take the use of steel in construction. Steel is a durable, yet flexible material that can accept much stress; enabling stability in a building. The benefit over wood is that in a fire, the stress of the heat won't cause damage as quickly. Yet, should the stress be overwhelming on an increasing basis, the steel too, will cease to function; and the building will fall. Stress is generally a good thing; it allows the building to settle, and it absorbs the effects of weather; but too much stress is not healthy for the building or for leaders and workers. In managing conflict negotiations well, you as a leader will need to also balance time, pace, and communication to find the right level of stress. At-a-glance Definitions: Conflict: Difference of view points, opposing perspectives, or a disagreement. As a conflict deepens there is growing understanding of harmful risk and expanded resistance to seeing other opinions. Negotiation: A process for determining agreement and cooperation. This process is not a bad thing or situation. The need to negotiate suggests awareness that something can be better or improved. Americans Have Framed Much of theNegotiationApproach: USA leaders with their important history of industrial development and the country's continued diversity of people have influenced negotiation processes. Here's a basic American- centric approach: 1. Keep calm. The party, who loses her or his cool first,
  • 3. generally will come up short. 2. Negotiate with facts over emotion. Too often, the negotiator will wave the flag, cry out for the disadvantaged, or over- exaggerate the situation. 3. Be prepared to walk away and go another day. Sometimes it's better to plant the seed, leave, and come back to the table. 4. Don't be afraid to give up something early. When you are dealing with an issue that has benefit for both parties; give something small up front. The other party will see the need to reciprocate; and you then, want to go for the steak. 5. Kenny Rogers said it best, "know when to hold them; know when to fold them; know when to walk away; know when to run." By that, I mean - when negotiating, have a complete picture of the situation; don't lose sight of the trees in the forest; and be careful not to win a battle; but lose the war. Differing Negotiation Expectations from Different Cultures: Here's the issue–other cultures did not learn USA rules. They learned their own and that cultural knowledge becomes an important push or pull, when negotiations must happen across cultural belief systems. Information as Basis: What's valued Presenting Ourselves: Expectations for Attitude Determining an Agreement: What Interactions Seem Important Arabs- affective appeals Expectations are to build upon personal expression–joy, sadness other feelings Russians- axioms or principles appeal Expectations are to start with grounding philosophy Japanese- · Emotional sensitivity is highly valued · Emotions are hidden, highly subtle · Face saving critical Latin Americans- · Emotional sensitivity valued · Aggressive and passionate · Explicit power plays
  • 4. · One individual decides Americans- factual appeals Expectations are to use facts (objective data) Americans- · Often disregard role of emotions · Hold a deep desire to be direct (and quick) · Attitude of being practical Americans- · Emotional sensitivity not valued (seen as revealing weakness) · Impersonal and straightforward · Team input but often single decision make · Factual, cost-benefit analysis-based decisions Adapted and summarized from Adler, Ch 11, and Hofstede Note: Selected cultural information and attention to a range of countries compared with American culture aim to hold the purpose of illustrating, not evaluating differences. Cultural values are not good or bad. They exist and need to be recognized. For more specific information, review reading assigned from Adler found at the top of this web page. Contrasting cultural expectations will be seen quickly in negotiation discussions. These contrasts are likely to create a sense of surprise and perhaps frustration. Here's an example: · Americans may often focus on preparation, judgment, integrity, persuasiveness. · Chinese offer interactions which demonstrate dedication, winning respect, broad perspective and integrity. Adler (Chapter 9) suggests a more inclusive, dialogue approach which is "culturally synergistic". When negotiating across culture or working with a diverse group consider these actions carefully: · Prepare · Train around cultural values · Define interests · Build relationships · Separate people from the problem
  • 5. · Observe and then adjust to other styles and pace · Exchange information about people, experience, priorities and tasks · Invent options for mutual gain (actively use Best Alternatives) · Use criteria appropriate for cultures represented. Use of Best Alternatives--BATNA: BATNA is a term coined by Roger Fisher and William Ury in their 1981 bestseller, Getting to Yes: Negotiating Without Giving In. The ideas in this book continue to be a standard for learning negotiation skills. BATNA stands for "best alternative to a negotiated agreement." BATNAs help you as a manager to lead decision making through conflict, because the planning provides you with a wider range of options. With more options, critically thought through (here's the value for critical thinking skill once more), then you are better prepared to make a stronger, better decision or plan. Said differently, you will not make a wise decision without some thinking. In the simplest negotiation, you may find that you and others may easily find a 3rd option, based on discussion. In that case, you don't need the BATNA. But more often, than not, the process of critical thinking used to develop alternatives will improve the negotiated agreement. Research into negotiation behaviors continues today. In the web links in the last section of this page, you will find a way to access the Project on Negotiation (PON, 2012). The reasons for negotiation are: · There are different views for activities ahead and there's a need for cooperation. · The different views conflict. · Better results are possible. Having a good BATNA increases your negotiating power, and influence for effective leading. BATNAs are not always easily seen. They surface through careful thinking and a simple process for finding the option that fits.
  • 6. 1. Develop a list of actions you might take if no agreement is reached. 2. Add to the more promising actions so that you can see them as practical step by step actions. 3. Identify (decide) which option appears best. Cultural values add complexity and diversity of beliefs require the consideration of a broader range of factors and possibilities. For example, a community discovers that its water is being polluted by the discharges of a nearby factory, with headquarters in another country. Community leaders' first attempt to negotiate a cleanup plan with the company, but the business refuses to voluntarily agree on a plan of action that the community is satisfied with. In such a case, what are the community's options for trying to resolve this situation? · The community could wage a public education campaign and inform citizens of the problem. This media attention could lead to new interest from a competing multi-national agreeing to be a "good corporate citizen" and offering better environmental strategy for the community. · They could contact a designated international agency (such as subset of the United Nations) and see what sort of authority that agency has over such a situation. · Community leaders could lobby appropriate governing agencies in country to develop and implement more stringent regulations on polluting factories. At the same time you are determining your BATNA, you should also consider the alternatives available to the other side. The more you can learn about their options, the better prepared you will be for negotiation. In the discussion and learning process, you may find that both others and yourself were not informed, but thought you were. You are likely to discover more constraints and underlying interests. When negotiating with people holding more collectivist values, as well as those who want to reduce uncertainties, know that you will be expected to talk about various alternatives so that everyone can develop or learn views of what may be very
  • 7. reasonable. It will be helpful to hold an open, patient and curious mindset. Also understand that if you are acculturated as an American, or if you grew up in a culture that has a high commitment to competition (Hofstede) you want to be especially thoughtful about how you see the outcome. Negotiation is not a horse race, with one winning and others losing. Negotiation is a series of discussions in which people learn, add to understanding, and find a better solution for all interests represented. Research Trends: Studies related to negotiation have long held the interests of psychologists, sociologists and the legal profession. Before the 20th century studies were reported, and conflict management and mediation theorists having published more than 5,000 articles since. Of keen, recent interest to the researchers are three topics: (a) use of technology and computer simulations to assist with data and strategy management of the negotiation process; (b) exploration of emotional intelligence as a related field to add resources and understanding about trust building; (c) stakeholder theory and the role of important influence impacting negotiations. Module 10 - Decision Making What's the benefit of studying this topic? All managers make decisions in order to be successful leaders. Because diversity and multi-cultural influences will increase in most work units and teams, understanding the essential decision making process from a view of diversity adds critical skill to your performance. Readings: · Adler Ch. 8 describes basic decision making approach and then delineates aspects of multi-cultural impact. · Lecture 10 (below)
  • 8. Review: · Power Point outlines role of individual perspective/responsibility for managing effective decisions. (Scroll down to locate power point). · Select 1 or more video clip to add ideas. (See last section of this web page). Module 10Decision Making for Leading Multi-cultural Groups Introduction: A multinational corporation was expanding its product line at an existing operation in Greece. Headquarter leaders determined that an up and coming talent with Greek parents might be especially effective. During the interview for the job, he consistently expressed his keen desire to get ahead. Two days after arriving, the new manager called his workforce together. As the group gathered they were jovial and appeared pleased to hear from their new leader. They, too, were aware of his Greek heritage. The new manager began by saying "I've decided it is very important to have a clear product strategy. I also believe you should offer competitive ideas–so that we get the best." Then he asked the workers for their input. The group became silent, with most people's eyes dropping to study the floor. What happened? What side-tracked the manager's decision? What process did the manager use–or did he? And what role might cultural differences have played? In thinking about the last question, it may be helpful to consider likely cultural values often linked to Greek culture; while valuing competition its society places importance on avoiding uncertainty or minimizing risk. People often hold a strong regard for positional leadership and its power, which can create distance and diminish informal discussions. At-a-glance definitions: Decision: A determination, agreement, or declaration. Decisions can be viewed as findings and factual; but they can also be thought about as a judgment or opinion or ruling. Decision Making: An approach or process, often using 5 steps or activities, which include
  • 9. · Set managerial objectives. What do we want to achieve in the process? This activity may also be called recognizing the problem to solve. · Search for alternatives by gathering information. Don't just go with some have called "the first right answer." · Compare and evaluate the alternatives. · Make a choice among the alternatives. · Implement the decision chosen. Follow up or monitor progress. This is a sixth step frequently added to assure performance information and accountability (Harrison, 1999). Decision Process Problem-Solving Cultures (often associated with higher interests in individuality, competition, and lower attention to uncertainty) Situation Accepting Cultures (often associated with higher interests in groups/collective mindset, cooperation, and higher attention to longer time orientation) Determining whether or not there's a problem I should change the situation. Some situations should be accepted for what they are. Gathering Information to define alternatives Emphasis on facts, data, and the "numbers". Emphasis on ideas and possibilities. Comparing alternatives as options New and future-oriented alternatives, based on adults can learn and change. Past and Present included in alternatives, along with future, based on adults hold values and expectation (little or no change). Make a choice Act as quickly as possible. Emphasize delegation. Ruling Factors: Is the decision true or false? Act with deliberation. Emphasize the role of authority or positional power.
  • 10. Ruling Factors: Is the decision good or bad? Implementation Managed from the top to plan and guide. Each worker responsible for his part . Managed through participation, using a more collective, cooperative roll out. The group or team is responsible. Research Trends: The topic of decision making and how to improve upon the factors within that process, especially using technology software, continues to hold the interest of researchers. Over the past two decades there have been more and more studies about decision processes linked to performance. (More than 2600 publications of research in 2005-12). This research was focused on robustness of information, metrics to add reliability, and dissemination comparisons for assuring adherence to decisions. Decisions of effective leadership are another studied area. (Approximately 525 published articles in peer reviewed journals 2005-12). Themes of research included impact of participation and increased use of technology. Studies also appeared organized by sector with emphasis on education and public sector leadership decisions. Decision making and cultural values are represented by a smaller group of reported research. (94 studies in the past 6 years). Emphasis is on more effective marketing through the use of cultural factors, particularly Hofstede's cultural dimension studies (Business Source Complete Data Base 2012. Constraints: There are several factors that work against our taking the ideal approach to decision making. These factors include: · The myth of maximization. You may tend to believe that more information may lead to a better decision. Sometimes, the reverse is true; more information only clouds the issue. · The need for "satisficing."If you have taken other management courses, you may be familiar with this term. It means, simply,
  • 11. "I can live with it." Satisficing occurs when the organization opts for a course of action that may not be the ideal (the maximized), but is acceptable. · Time and cost. In this highly competitive environment, we don't always have the luxury of gathering exhaustive amounts of information. More than one company (IBM, for example) has learned the hard way that sometimes it is necessary to go with incomplete information in order to get one with it. Tom Peters (1994) refers to this as the "Ready, Fire, Aim" approach -- an approach that he says is necessary in today's frenetic workplace. · Communication failures. Miscommunication can take many forms -- failure to listen; overload and "noise;" failure to present an unambiguous message, etc. · Precedent. Often, how people make decisions depends on what occurred previously. For example, if Company A had great success with a direct mail marketing campaign for one product, its marketing people may assume that such an approach will work the next time. Mindset or perception traps: How people gather information and the interaction between minds and the situation is selective and complex. Perception can lead people into errors or what decision science experts term "traps". The Anchoring Trap: Use of familiar facts or data to set up and credential a determination or a decision Here's how it works when you answer these two questions together · "Is the population of New York greater than 15 Million people?" · "What's your best estimate of the population of New York?" The chances are that your answer to the second question will be influenced by the first question. If the first question had used "20 Million" many people would have then replied with a larger number (and have fallen into how information was anchored). The Status Quo Trap. Each of us has our own biases, and these biases affect the decisions we make. When given a set of alternatives, we will tend toward those that perpetuate the status
  • 12. quo, in part because we feel safer with the known than the unknown. The Sunk-Cost Trap. Have you ever held onto a stock long after it had real worth? Or retained an employee, even though we knew at some level that he or she was not going to work out? That's the "sunk-cost trap." The Confirming-Evidence Trap. For years, IBM was convinced that it was virtually invincible. So when the CEO went around to various IBM sites, he asked staff how it was going. The answer was just what he wanted to hear: Everything is going great. (Hammond, Keeney and Raifa, 1998) Judgment under Uncertainty: Bazerman (2006) a recognized researcher on decision methodologies, believes that decision makers look for certainty even though many decisions are made in the face of uncertainty. The main premise of Bazerman is understanding risk and uncertainly will increase the likelihood of a quality decision making process. Two concepts determine alternatives under uncertainty: · Probability (the likelihood that any particular outcome will occur); and · Expected value (weighing all potential outcomes associated with the alternative by their probabilities and summing them). When approaching uncertainty, Bazerman identifies systematic ways to increase your awareness of uncertainty and risk. He concludes that the process of framing is critical in developing a manager's ability to make effective decisions. To date there's little psycho-social research examining the impact of cultures which appear to place priorities on reducing uncertainty. However, as cultural awareness grows, interest can expand around use of risk and holding expectations for avoiding as much uncertainty as possible. Those who are acculturated to pay particular attention to avoiding unknowns or uncertainties can contribute ideas to deliberation when crossing cultural borders. Their critical thinking and drive for added discussion/information gathering may shape future decision
  • 13. making processes in important ways. In the meantime, you as a manager can be especially thoughtful about how and how much time to spend on gathering information, thinking critically about that information, to make good decisions. Decision-Making: Hindsight Bias and the Assessment of Human Performance: Alex Agase, former Northwestern University football coach, once quipped if you want to give him advice, do it on Saturday between 1 and 4 o'clock, during the 25 seconds between plays. Not on Monday. He knew the right thing to do on Monday. Despite Agase's lament, Monday morning quarterbacking is still a favorite American pastime at work. Clearly the interception could have been avoided by running the ball. Since the outcome is so clear, Monday morning quarterbacks question why the coach couldn't anticipate it. We tend to expect that others should know by foresight what we have learned by hindsight. The problem is that this bias is not confined to football. It is quite pervasive and has the potential to adversely impact a wide variety of human behaviors, particularly turning leaders away from telling more of the plan's story, Being Smart After the Fact Proclamations about human error are most always made "after the fact," rarely before. As noted by Reason (1990), the most significant psychological difference between individuals who were involved in events leading up to a disaster and those who are called upon to investigate after it occurred is knowledge of the outcome. Investigators have the luxury in hindsight of knowing how things are going to turn out; front line operators and their supervisors do not. While most people would not expect much credit for picking a horse after it has won the race, many investigators are unaware of the influence of outcome knowledge on their perceptions and reconstruct ions of the incident. Given the advantage of a known outcome, what would have been a bewildering array of non-convergent events becomes assimilated into a coherent, causal framework for making sense out of what happened. In fact, it may be difficult
  • 14. to imagine it happening any other way. "Why couldn't they see it?" is the question that is often asked. Such hindsight results in expectations by investigators that participants should have anticipated the incident by foresight; it also blinds them to what actually would have been known had the roles been reversed. If investigations of human error are to be fair and impartial, appropriate actions and decisions need to be determined before the mishap; not from the comfortable vantage point of hindsight. Process vs. Outcome Russo and Schoemaker (1989) observed that many managers have difficulty improving their decision-making processes. Instead they focus on outcomes which limit clearer understanding of process methods. These researchers had managers choose between one of two potential new products to market. It was given that Product A had a 50% chance of succeeding, while product B had a 60% chance of succeeding. In both cases, success meant a profit of one million dollars; failure resulted in no profit. The company chose to market Product B. It failed, and Product A is later marketed by a competitor, and it succeeds. Did the company make the right decision? Managers were asked to rate the quality of the decision on a scale from 1 (clearly made the wrong decision) to 7 (clearly made the right decision). Their average rating was 4.4, showing a fair degree of confusion as to the correct decision. The decision to market product B was absolutely correct. Why didn't they all respond with a 7, as any group of rational managers should have? Because they let knowledge of the outcome confuse their thinking about the worthiness of their decision. Because chance factors will sometimes have their way (accounting for 40% in this case) does not mean that clear thinking should be abandoned. Part of the problem may be cultural. In a very competitive U.S. business environment where the stakes are very high, successful outcomes are highly valued. New product managers are more likely to be rewarded for
  • 15. successful outcomes than they are for implementing correct decision processes which are less discernible. Framing Can even the way questions are framed influence the reconstructive process? The research of Elizabeth Loftus (1980) on memory and on the reliability of eyewitness testimony provides a resounding "yes" to the above question. Loftus described the problem this way. Human memory does not work like a videotape recorder or a movie camera. When a person wants to remember something, he or she does not simply pluck a whole memory intact out of a "memory store." The memory is constructed from stored and available bits of information; any gaps in the information are filled in unconsciously by inferences. When these fragments are integrated and make sense, they form what we call "memory" (p. 31). Loftus' statement serves as a reminder that it is not just the shadowy figures of the underworld or those of dubious integrity that are likely to give unreliable testimony. Honest and otherwise reliable people can sincerely affirm as true what is actually false. When our memories are put to the test, we do not discriminate very well what was actually encoded from what we reconstructed to make sense of the event. Thus we can quite sincerely testify as having observed something that never took place because we may be relying on an active retrieval process that fills in the gaps. This process is a normal and integral aspect of our memory. There are many factors that influence the way the gaps are filled in. Many of these factors are subtle and contextual in nature. And outcome knowledge is one of the key ingredients in shaping context. In one of her experiments, Loftus showed how the framing of a question can influence what is subsequently reported. With the cooperation of the Seattle Police Department, Loftus and Palmer (1974) had people view realistic films of actual and staged automobile accidents and then answer questions about what they saw. One of the questions was "About how fast were the cars
  • 16. going when they smashed into each other?" This question elicited a different estimate of speed than questions using the verbs collided, bumped, hit, or contacted in place of smashed. Although the subjects saw the same films, cars which were framed by the word smashed were found, on average, to be traveling nine miles per hour faster than cars which merely contacted. Smashed provided some other information as well. A week later, experimental subjects were called back and asked "Did you see any broken glass?" Fourteen percent of the subjects whose question was framed with the verb hit reported seeing broken glass, while 32% of the subjects whose question was framed with smashed reported seeing broken glass. As the reader may have already guessed, there was no footage of broken glass in the films seen by these "eyewitnesses." Leadership and Decision Making: What is the role that leaders can and should play in organizational decision making? Here are five suggestions: Recognize that decision making is a continuum. Who makes the decision is not an either/or question. It's more complex than that. The continuum runs all the way from Leader makes the decision unilaterally, to Leader gathers information and then makes the decision to lead and his or her team make the decision jointly, to Leader delegates the final decision to others. Effective leading does not depend on you having all the answers. Look around for who may also have ideas and insights. Leaders who are comfortable with themselves are also comfortable in empowering others. Consider a brainstorm and participation/negotiation. Decisions should involve a group when the choice may be unpopular; or when it would be helpful to gather additional information prior to making a decision, or when you as a manager know that you don't have important data, observations or direct experience. (Note: Decision making ties into negotiation activities and skills see module on that topic). Know when to delegate the decision-making process. Not every decision needs a committee. Consider who needs to take the
  • 17. lead. Staff is often quite willing to have the CEO make some decisions; it gives them a sense that someone is in charge. Leadership and organizational culture are two sides of the same coin. Know whether your work culture is more hierarchical or more team focused. If the organizational culture is participatory/team-centric or one in which it is OK to speak up. You will observe workers doing so. As a result, the leader is more likely to get the information needed to make an informed decision. If, on the other hand, the culture is characterized by "shoot the messenger" with decisions handed down, only the foolhardy are likely to want to be a player when it comes to making tough decisions. The culture of strict hierarchy is changing in many organizations, but your work as a leader means that you will observe and become skilled at knowing when you can involve others in decisions, and when you must be seen as the decision maker. Dynamics of diversity drive attention towards decisions and how they are negotiated. But there is a paradox to consider: While decision steps are central to your management authority, there is limited information within success stories and case studies about these details. This situation becomes problematic when there are a range of cultural expectations. In contrast, exploring how to making decisions by being attentive to diverse views adds power and analytical skill to your management performance. Questions: You can observe important lessons about your decision/negotiating process by look at a memorable or “turning point” event in which you recall a decision and how it was negotiated, or not. In what ways was that decision effective?
  • 18. Was the decision negotiated? Why or why not? Would that process work effectively if there were diverse viewpoints? (Modules 10 &11)