Conflict Types, Causes & Consequences

Dr. Pankaj Chaudhari, Assistant Professor, MBA Department, DMIETR, Sawangi
Meghe, Wardha Mob. 8669080462
CONFLICTS & NEGOTIATIONS
Conflict – Definition:
Conflict is simply differing ideas or actions, often related to the selfish pursuit of
needs (known and unknown) that end in a state of unrest. It is a necessary and permanent part
of life. The important thing to remember is that conflict is natural. It can be a slight conflict
that causes no harm or an egregious conflict that results in irreparable damage.
Conflict itself is neither good nor bad. When conflict is addressed maturely with an eye to a
positive resolution it can, in most cases, lead to growth among all the conflicting parties.
There are four main types of conflict, and they stem from many sources. This lesson reviews
the major types and sources of conflict and offers examples of each.
Nature of Conflict:
A conflict is the moment of truth in a relationship-a test of its health, a crisis that can weaken
or strengthen it, a critical event that may bring lasting resentment, smoldering hostility,
psychological scars. Conflicts can push people away from each other or pull them into a
closer and more intimate union; they contain the seeds of destruction and the seeds of greater
unity; they may bring about armed warfare or deeper mutual understanding.
How conflicts are resolved is probably the most critical factor in all relationships.
Unfortunately, most people try to resolve them by using only two basic approaches in which
someone wins and someone loses, both of which outcomes are ineffective and harmful to the
relationship.
Few persons accept the fact that conflict is part of life and not necessarily bad. We look on
conflict as something to avoid at all costs. We often hear husbands and wives boast that they
have never had a serious disagreement-as if that means theirs has been a good relationship.
Parents tell their children, “All right, there is to be no arguing tonight at the dinner table-we
don’t want to spoil our dinner.” Or they yell, “Stop that arguing, right now!” Parents of
teenagers can be heard lamenting that now that their children are older there are many more
disagreements and conflicts in the family. “We used to see eye to eye on most things.” Or,

“My daughter was always so cooperative and easy to handle, but now we don’t see things her
way and she can’t see things our way.”
At home or at work, most of us hate to experience conflict, are deeply trouble when it occurs,
and are quite confused about how to handle it constructively. Actually, it would be a rare
relationship if, over a period of time, one person’s needs did not conflict with the other’s.
When any two people (or groups) coexist, conflict is bound to occur just because people are
different, think differently, and have needs and wants that sometimes do not match.
Conflict, therefore, is not necessarily bad-it exists as a reality of any relationship. As a matter
of fact, a relationship with no apparent conflict may be unhealthier than one with frequent
conflict. A good example is a marriage where the wife is always subservient to a dominating
husband or vice versa, or a boss-subordinate relationship in which the subordinate is so
deathly afraid of the boss that s/he does not dare cross him/her in any way.
Most people have known families, especially large families, where conflict crops up
constantly and yet these families are wonderfully happy and healthy. Conversely, we often
see newspaper accounts of youthful criminals whose parents indicate complete astonishment
that their boy could do such a thing. They say they never had any trouble with him; he had
always been so “cooperative” which is usually a euphemism of “obedient.”
Conflict in a family or a work group, openly expressed and accepted as a natural
phenomenon, can be far healthier than most people think. Members have the opportunity to
experience conflict, learn how to cope with it, and be better prepared to deal with it in later
life. And family conflict may actually be beneficial, provided that the conflict in the home
gets resolved constructively.
This is the critical factor in any relationship: how their conflicts get resolved, not how many
conflicts occur. It is the most critical factor in determining whether a relationship will be
healthy or unhealthy, mutually satisfying or unsatisfying, friendly or unfriendly, deep or
shallow, intimate or cold, peaceful or violent.
Causes of conflicts:
Task Interdependencies. The first antecedent can be found in the nature of task
interdependencies. In essence, the greater the extent of task interdependence among

individuals or groups (that is, the more they have to work together or collaborate to
accomplish a goal), the greater the likelihood of conflict if different expectations or goals
exist among entities, in part because the interdependence makes avoiding the conflict more
difficult. This occurs in part because high task interdependency heightens the intensity of
relationships. Hence, a small disagreement can very quickly get blown up into a major issue.
Status Inconsistencies. A second factor is status inconsistencies among the parties involved.
For example, managers in many organizations have the prerogative to take personal time off
during workdays to run errands, and so forth, whereas nonmanagerial personnel do not.
Consider the effects this can have on the nonmanagers’ view of organizational policies and
fairness.
Jurisdictional Ambiguities. Conflict can also emerge from jurisdictional ambiguities—
situations where it is unclear exactly where responsibility for something lies. For example,
many organizations use an employee selection procedure in which applicants are evaluated
both by the personnel department and by the department in which the applicant would
actually work. Because both departments are involved in the hiring process, what happens
when one department wants to hire an individual, but the other department does not?
Communication Problems. Suffice it to say that the various communication problems or
ambiguities in the communication process can facilitate conflict. When one person
misunderstands a message or when information is withheld, the person often responds with
frustration and anger.
Dependence on Common Resource Pool. Another previously discussed factor that
contributes to conflict is dependence on common resource pools. Whenever several
departments must compete for scarce resources, conflict is almost inevitable. When resources
are limited, a zero-sum game exists in which someone wins and, invariably, someone loses.
Lack of Common Performance Standards. Differences in performance criteria and reward
systems provide more potential for organizational conflict. This often occurs because of a
lack of common performance standards among differing groups within the same
organization. For example, production personnel are often rewarded for their efficiency, and
this efficiency is facilitated by the long-term production of a few products. Sales departments,
on the other hand, are rewarded for their short-term response to market changes—often at the

expense of long-term production efficiency. In such situations, conflict arises as each unit
attempts to meet its own performance criteria.
Individual Differences. Finally, a variety of individual differences, such as personal abilities,
traits, and skills, can influence in no small way the nature of interpersonal relations.
Individual dominance, aggressiveness, authoritarianism, and tolerance for ambiguity all seem
to influence how an individual deals with potential conflict. Indeed, such characteristics may
determine whether or not conflict is created at all.
Consequences of Conflict:
Conflict has both positive and negative consequences. Positive conflict is known as
functional conflict and negative conflict is known as dysfunctional conflict.
Positive Conflict (Functional Conflict):
Conflict is not only inevitable, it is also desirable. It is constructive and encourages new ideas
to solve organisational problems. It promotes change and keeps the organization going in the
desired direction.
It believes that conflict has the following positive consequences:
1. High degree of cohesion:
Inter-group conflict gives rise to commitment and loyalty amongst members of the group.
Group members unite together, take advantage of opportunities, overcome threats and take
strong actions to resolve their problems. All members of the group work together for a
common goal.
It promotes group cohesiveness if people of different groups compete with each other. In
order to do better, members of each group work together. They become loyal and bonded to
each other which promotes organisational performance.
2. Improvement in quality of decisions:
When group members face conflict, they think of all possible solutions to the problem,
evaluate the decisions and use their creative and innovative abilities to arrive at the best

decisions. Inter-group conflict, thus, improves the quality of decisions and stimulates
creativity and innovation. When people have conflicting opinions, they deeply analyse facts
of the case. Deep understanding of concepts promotes new thinking, new ideas and, thus,
fosters innovation.
3. Emergence of leaders:
Everybody does not think alike in conflicting situation. Group members bestow power on
those who can positively contribute to the problem situation to take decisions. Increased
power gives rise to leaders who act as the group captain. This also reduces rivalry amongst
members to become group leaders.
4. Response to change:
Conflict promotes change if people do not readily agree to each other. Differences in
opinions, values and perception introduce new ways of working which is different from the
traditional thinking. Conflicts challenge the existing state of affairs and promote new ideas
and reassessment of current group practices. Conflict signals something wrong with the
present system of working and promotes ability to assess the present and desire for a better
future. Conflict, thus, increases responsiveness of group to change.
5. Increased productivity:
It is empirically proved that productivity of conflicting groups is more than those which have
close agreement amongst the members. Members with different perceptions and interests
produce high-quality solutions to problems. This improves productivity of the group.
Conflicts highlight weaknesses in the existing system of management. These weaknesses can
be removed to improve efficiency of the organisation’s operating system.
6. Releases strain:
If group members do not agree with pre-defined values and norms, conflicts give them a
ground for voicing their reservations. This releases strain that would otherwise remain
suppressed in their minds. In conflicting situations, people openly express their thoughts and
feelings, even if they are against the thought process of other members of the organizations.
This releases strain and provides mental satisfaction to the members.

Negative Conflict (Dysfunctional Conflict):
In positive conflict, differences in opinion do not hurt anyone’s feelings. People respect each
other’s ideas and arrive at new solutions to the problems to develop working relationships. In
negative conflict, on the contrary, people show disrespect for others’ ideas. They aim to
promote their interests at the cost of others.
The negative consequences of conflict are as follows:
1. Mental strain:
Excessive conflict creates tension and frustration amongst people. This not only harms the
individuals (as they may enter into a state of depression) but also harms the organisation
(people do not positively contribute to organisational productivity).
2. Discontentment:
Conflict breeds antagonism and discontentment. This reduces power to think creatively and
reduces group effectiveness. If people do not arrive at mutually agreeable solutions, it results
in discontentment. People are not satisfied with their jobs. This lowers the organizational
productivity.
3. Communication breakdown:
When individuals or groups develop conflicting ideas, they avoid interacting with each other.
This reduces communication amongst them leading to inter-group rivalry and loss of
productive ideas.
As conflicts lead to disagreement and communication breakdown, people do not agree with
each other leading to splitting up of groups and units. This diverts energy from organizational
goals and leads to instability in the organizational structure.
4. Resignation:
Discontentment can lead to resignation from jobs. If results are not in favour of people who
strongly oppose certain decisions, they do not wish to work in those organizations and look

for other job outlets. If these people are dynamic and creative individuals, it is loss for the
organisation.
5. Distorted perceptions:
Groups hold strong perceptions about their activities and disregard those of the other group.
They highlight their strong points and competitors’ weak points. This leads to deviation from
organizational goals.
6. Competitive struggle:
Conflict leads to competition. Rather than arriving at consensus, agreement or settlement,
competitive struggle declines group’s ability to think and act positively.
7. Subordination of group goals to individual goals:
Members promote personal goals rather than group goals. They think of ways to promote
their personal interests rather than organisational interests. This reduces organisational
efficiency. People divert energy from constructive to destructive thinking.
They think of how to win over conflicting situations rather than pursuing organisational
goals. Short-term personal problems, thus, supersede long-term interests of the organisation.
People focus on personal goals at the cost of organisational goals. This results in goal
displacement as short-term perspective overpowers the long-term perspective.
8. Threat to group survival:
In extreme situations, members can stop working. This stops functioning of the group and
threatens its survival.
Phases/Terms of conflicts:
Stage 1: Frustration. As we have seen, conflict situations originate when an individual or
group feels frustration in the pursuit of important goals. This frustration may be caused by a
wide variety of factors, including disagreement over performance goals, failure to get a
promotion or pay raise, a fight over scarce economic resources, new rules or policies, and so

forth. In fact, conflict can be traced to frustration over almost anything a group or individual
cares about.
Stage 2: Conceptualization. In stage 2, the conceptualization stage of the model, parties to
the conflict attempt to understand the nature of the problem, what they themselves want as a
resolution, what they think their opponents want as a resolution, and various strategies they
feel each side may employ in resolving the conflict. This stage is really the problem-solving
and strategy phase. For instance, when management and union negotiate a labor contract,
both sides attempt to decide what is most important and what can be bargained away in
exchange for these priority needs.
Stage 3: Behavior. The third stage in Thomas’s model is actual behavior. As a result of the
conceptualization process, parties to a conflict attempt to implement their resolution mode by
competing or accommodating in the hope of resolving problems. A major task here is
determining how best to proceed strategically.
Stage 4: Outcome. Finally, as a result of efforts to resolve the conflict, both sides determine
the extent to which a satisfactory resolution or outcome has been achieved. Where one party
to the conflict does not feel satisfied or feels only partially satisfied, the seeds of discontent
are sown for a later conflict, as shown in the preceding. One unresolved conflict episode can
easily set the stage for a second episode. Managerial action aimed at achieving quick and
satisfactory resolution is vital; failure to initiate such action leaves the possibility (more
accurately, the probability) that new conflicts will soon emerge.
1. Why do organizations have so much conflict?
2. Describe the process of the conflict model.
2. How does conflict arise in organizations?
Conflict in organizations can be caused by task interdependencies, status inconsistencies,
jurisdictional ambiguities, communication problems, dependence on common resource pools,
lack of common performance standards, and individual differences. A model of the conflict
process follows four stages. Conflict originates (stage 1) when an individual or group
experiences frustration in the pursuit of important goals. In stage 2, the individual or group
attempts to understand the nature of the problem and its causes. In stage 3, efforts are made to
change behavioral patterns in such a way that the desired outcome, or stage 4, is achieved.

Conflict handling mechanism:
Conflict cannot and should not be avoided. There is always an optimum level of conflict at
which organisational performance is the highest. When the level of conflict is low, the
organisation will not be adaptive to change. This threatens its long-run survival.
When the level of conflict is too high, it creates chaos and disruptions in the organisation.
This also threatens its long-run survival. There is need, therefore, for managers to resolve
conflict. They should promote functional or constructive conflict and avoid dysfunctional or
destructive conflict.
Management of conflict involves:
1. Stimulation of functional conflict and
2. Resolution of dysfunctional conflict.
1. Stimulation of functional conflict:
The following methods help to stimulate or encourage constructive conflict:
(a)Bring managers with backgrounds, values and styles different from those who are
presently working in the organisation.
(b)Add or delete individuals and groups to the existing network. This will re-distribute power
and, thus, stimulate conflict.
(c)Break old teams and departments and re-organise them. New work, members and
responsibilities will be created requiring adjustment with each other. This will give rise to
conflict and new and improved methods of operation.
(d)Allow members to openly communicate with each other. Members can freely discuss their
problems, disagree with each other and have a wide perspective for decision-making.
(e)Foster competition by paying financial and non-financial incentives for good performance.
This will promote conflict as each member will try to outperform others.

(f)Replace authoritarian managers with behavioural managers. They promote interaction
amongst group members and bring out their hidden desires thereby, resulting in conflict.
(g)Create an environment of creative and innovative thinking. When members find new
ways for doing the work, it will promote conflict and productive suggestions.
(h) Introduce changes in people, structure and technology.
(i)Allow compromise where each party is concerned about their goal accomplishment and is
willing to engage in ‘give and take’ to reach a reasonable solution.
(j)Allow collaboration where parties try to manage conflict without making concessions by
coming up with new ways to resolve differences.
2. Resolution of dysfunctional conflict:
These methods suppress or resolve conflict rather than promote them.
They are as follows:
(a)Introduce changes in the organisation structure so that conflicting parties are separated and
placed at different positions.
(b) Introduce participative style of management where decisions reflect the opinion of all.
(c)Integrate individual goals with organisational goals so that both individuals and
organisations promote each other’s interests.
(d)Managers should call the conflicting parties, listen to their arguments and try to get one
side into giving in. This is helpful when manger has more information than the parties and he
can satisfy each one of them.
(e)Provide incentives (financial and non-financial) to all rather than those who report
outstanding performance.
(f) Install training programmes for improving relationships amongst individuals and groups.

(g)Avoiding action or taking no action saying that information is insufficient will postpone
and resolve the conflict on its own.
(h)Conflict can be resolved through compromise. Managers can convince each party to
sacrifice some objectives in order to gain others.
(i) Allow arbitration where conflicting parties submit to the judgement of a third party.
(j)Transfer people from one work unit to the other and allow overlapping of membership.
When one person is a member of two groups, conflict gets reduced.
(k)Obeying rules strictly reduces conflict. Let every conflicting situation be handled
according to rules.
(l)Allow the parties to resolve conflict through consensus. The parties try to find solutions
together rather than winning over each other.
(m)Establish superordinate goals. These are goals set for level higher than that of conflicting
parties and include the conflicting parties’ lower level goals. The parties deviate from
conflicts at their level to higher level goals. Achieving superordinate goals resolves conflicts
at their level.
Five ways of addressing conflict are identified by Thomas and Kilman:
(a) Avoidance:
One should avoid or postpone conflict by ignoring it or changing the subject. Avoidance can
be useful as a temporary measure to buy time or as an expedient means of dealing with
minor, non-recurring conflicts. In more severe cases, conflict avoidance can involve severing
a relationship or leaving a group.
(b) Collaboration:
People should work together to find a mutually beneficial solution to the problem. Though
this is a win-win solution to conflict, collaboration can also be time-intensive and
inappropriate if there is absence of trust, respect or communication amongst participants.

(c) Compromise:
Conflicting parties find a middle ground in which each party is partially satisfied.
(d) Competition:
Both the parties should assert their viewpoint at the potential expense of another. It can be
useful when achieving one’s objectives outweighs one’s concern for the relationship.
(e) Accommodation:
If above measures do not help to resolve conflict, one party surrenders its needs and wishes to
accommodate the other party.
NEGOTIATION
Definition & Importance:
Negotiation is a part of life. People negotiate daily either for individual purposes or for
business purposes. But when negotiating for business purpose, which is a very complicated
process, one needs to have knowledge and skill of handling such negotiations. Negotiations
have become one of the researched topics and a lot of literature can be found on this topic.
Negotiation is a method by which people settle differences. It is a process by which
compromise or agreement is reached while avoiding argument and dispute.
Approach to Negotiations
Approaches to Negotiation:
As with conflict management, negotiation can be handled in different ways. The outcome of a
negotiation depends on the approach.
Bargaining Orientation:
This approach is based on the premise that one person can win only at the expense of the
other – that any victory by one party must be matched by the other’s loss. That is why this is
also called the win-lose approach.

Although this approach is marked by competitiveness and may create ill will, this is
sometimes the best approach when the other party is determined to take advantage of you or
when your interests truly conflict with those of the other party and compromising is not a
satisfactory option.
Lose-Lose Orientation:
This is adopted when one negotiating partner feels his own interests are threatened and reacts
by doing all he can to ensure that the outcome of the negotiation does not serve the other
party’s interests either. In effect, everybody ends up being a loser.
Lose-lose outcomes occur when negotiating partners ignore one another’s needs or when the
need to hurt each other outweighs the need to find some kind of an acceptable solution.
Compromise:
A lose-lose situation is hardly a desirable outcome. To avoid this, sometimes people
compromise. Both parties give up a part of what they had originally sought, and settle for
something less than that. A compromise is the best way out when it is impossible for both
parties to convince each other or when even the partial attainment of one party’s goals
depends’on the satisfaction of the other.
Compromise is a good option when disputed resources are limited. For instance, if two
managers each need a full-time secretary, but budget restrictions make this impossible; they
may have to compromise by sharing one secretary.
Win-Win Orientation:
When the needs of the negotiating parties a 45.1 looks at some of the aspects of this
approach. The win -win approach is superior to other problem-solving styles, because
everyone ends up feeling satisfied. However, such a solution is only possible when the needs
of the parties involved do not conflict.
This approach works well when the following five steps are followed:
a. Determine the Needs of Both Parties:

If both parties can identify what issues are important to the other, they would find it easier to
work toward a mutually acceptable solution.
b. Develop a List of Possible Solutions:
Once the basic issues have been identified, the two parties can sit together and come up with
several solutions that would satisfy everyone’s needs. All possible solutions are put down,
without any of them being evaluated
c. Choose the Most Appropriate Solutions:
At this stage each solution is evaluated and the ones that are most promising are adopted.
d. Implement the Solution:
Once the best solution is decided upon, make sure everyone understands it, and then
implement it.
e. Follow up on the Solution:
Even the best plans need to be monitored after they have been implemented. A while after the
plan has been put into action, meet with the other parties involved and discuss how the
solution is working out. If anyone’s needs are still unmet, you could go back to the problem-
solving procedure and identify another solution.

Major Elements of Negotiation Preparation:
Success in negotiation, like other things in life, does not just happen. A good deal of
preparation is necessary to ensure that your endeavors are successful. Being well-prepared
breeds confidence and a confident manner can always give you an edge in any
communication process. Preparation involves several activities
Understand the People Involved:
It is important to know something about the people with whom we must negotiate and the
organization they represent. What are their roles, their objectives? What problems will they
raise? Are they in a position to make a difference or will they have to consult someone else?
The answers to these questions will help you to better handle the issues that come up during
the actual negotiation. How the other party sees you is important too. He is likely to respect
you more if he perceives you as being professional, confident and as having the requisite
authority to negotiate
Know Your Objectives:
Having your objectives clearly in mind is very important. Identify the objectives; decide what
the priorities are, what the variables are and what should be your attitude to each. The
variables are the different factors involved in the negotiation – the raw material, so to speak,
of negotiation.
To be well prepared you must know exactly how much you are willing to concede or
compromise on each factor. You must also have ready all the arguments you may need to
justify your point of view, particularly on those points which you want to win.
Conduct:
Two factors that operate during the actual negotiation are the tactics of negotiation and the
interpersonal behavior that accompanies them. Negotiation tactics hinge on the variables –
some of which are conceded by us and some by the other party.
Variables that are traded are referred to as ‘concessions.’ Negotiation is in fact, the process of
trading concessions. To negotiate skillfully you must have knowledge of all the variables and

their possible use as concessions. As you start the process of negotiation bear in mind four
important principles.
a. Aim High:
It pays off to aim for the best deal you can imagine. You can always trade down. If you start
too low, it is difficult to trade up, particularly at a late stage in the process. In complex
negotiations where there are a large number of variables, it is worthwhile to separate the
variables into three priority categories.
i. The ‘musts’; those that we must get, if the deal is to be accepted by us at all.
ii. The ‘ideals’: what we hope to get, to make the ideal deal;
iii. The ‘loss leaders’: what we are prepared to trade in order to reach a deal.
b. Get the Other Person’s Shopping List:
It is important to identify what the other party wants, and what he is likely to concede. This
will help you to assess the situation better.
c. Keep the Whole Package in Mind:
Focus on the total situation – your views and the other party’s – so that you proceed
conscious of everything (or as much as possible) that will be involved.
d. Keep Searching for Variables:
Remain flexible. What you plan beforehand should never act like a straightjacket. Sometimes
matters proceed along the lines you expect; many times they don’t. Adapting and fine-tuning
may always be required.

When the negotiation starts the two parties are at opposite ends of the scale. However, by the
time the negotiation closes, they are expected to settle on something they can both relate to as
a ‘good deal.’ This is the point of balance which is usually a range of solutions around the
middle point of the scale, as illustrated in Figure 4.1.
Both parties usually recognize that the two extreme points from which they start their initial
stance – are unrealistic. Negotiation can thus be represented as the to and fro process that
moves up and down the line and dictates where things finally settle.
Sometimes the first round of negotiation only serves to induce both parties to shift to a more
reasonable initial stance. As negotiation is essentially a communication process, its success,
to a great extent, will depend on how well the two parties can build what are called bridges of
rapport.’These bridges help them to see each other’s point of view and to relate to each other.
To build these bridges to an acceptable agreement you must:
i.Do your homework beforehand – research the opposition, the topic, and your own team’s
blind spots or hang-ups – so you don’t waste anyone’s time.
ii. Identify your priorities, your needs, and your top and bottom line beforehand.
iii. Come prepared with all necessary documents and agreements.
iv.Generate a range of options before deciding upon one; don’t try to determine a single,
correct solution. Instead, think of a wide range of possibilities that could please both sides.

v. Open the discussion on a neutral note to allay any hostility.
vi.Listen actively and keep an open mind rather than deal from a position of ‘entrenched
antagonism.’
vii.Remember the likeability factor (like likes like). If the opposing side likes you, you stand
a much better chance of achieving your goals within reason. However, don’t make that your
primary goal.
viii. Keep your emotions in check; ignore, rather than respond to personal attacks.
ix.Show respect for the other person’s views: don’t browbeat, denigrate, or insult the
opposing team.
x. Avoid manipulating because it creates bitterness rather than harmony.
xi. Encourage the other party to look at the issue from your perspective.
xii. Look out for positive signals of cooperation from the other side and build on these.
xiii.State the areas where agreement has been reached and list the issues that are still being
negotiated.
Overall, success in negotiation comes largely from good listening skills, the ability to
communicate persuasively and good interpersonal skills. Negotiations will not produce the
desired effect unless those involved consciously address both the solid facts and the human
dimension.
Communication can be described as an exchange of what we might call “messages,” and it
has been found that such “messages” have both a factual and an interpersonal dimension. It is
the interpersonal dimension that governs the factual one in human communication.
Now that we’ve considered some of the aspects of negotiation, let us look at an actual
negotiation. This will give you some idea of the strategies adopted by successful negotiators.
Issues in negotiation:

When individuals find it difficult to adjust with each other, the best way is to sit together and
discuss among themselves and adopt the middle path. Instead of fighting with each other, it is
better to discuss things and come to an alternative benefiting all. Negotiation takes into
account the personal interests of all and helps individual to come to a common
conclusion.
When the targets of a team are set, all the team members are invited to discuss with their
superiors. If the boss assigns a target of 20 sales a month and the team members find it
unachievable, they should negotiate with their boss to slightly lower their targets, rather than
saying a yes to it.
When you want to go for a party, you probably negotiate with your parents that if they allow
you to go for the same, you will study the whole weekend. The process of negotiation is
designed to benefit all but sometimes it is little difficult to reach to a conclusion and
satisfy all.
There are few challenges to negotiation and one must try his level best to overcome them. Let
us study them in detail:
 The biggest challenge to negotiation is when individuals are not ready to
understand the second party at all. There are individuals who only think about their
interests and tend to ignore the interest and needs of the other.
Jim wanted to buy a shirt for himself. He was only concerned with his pocket and
never bothered about the store owner. He quoted an unusually low price and the store
owner refused to sell the shirt. The outcome was a big zero. Nobody could get what
they wanted. Jim failed to understand the fact that the store owner is not sitting for
charity. He also has a family to look after and thus even his profits are important.
Why would he sell something at a less rate which would not earn him his profits?
Try to find out the expectations of the other party as well. For business negotiation,
you will definitely be appreciated if you save your organization’s money but
remember the other party is also doing business. Quote something which will save
your company’s money as well as earn some profits for the other party as well.

 Lack of time is also a major challenge to effective negotiation. One should never be
in a hurry. You need time to convince others. Never be in a rush to purchase things or
close a deal. Analyze things carefully and then only come to conclusions.
 Going unprepared for a negotiation is unacceptable. Don’t underestimate the
second party. One should do his home work carefully. Check out even the smallest
details before going for a negotiation. Don’t think that the other person is not as smart
as you, he can ask you anything and remember even he will try his level best to
convince you. You need to have valid answers for his questions.
 Lack of patience also leads to a bad negotiation. Every individual has the right to
express his views and one should not interfere in his speech. You might not agree to
him but at least listen to him first. Sit with the second party and make him realize how
the deal would benefit you as well as him. If possible take a note pad and a pen with
you to explain things in a better way. Carry all the necessary documents which you
might require at the time of negotiation.
 Criticism, sarcasm, derogatory remarks are the biggest threats to an effective
negotiation. Never ever say anything which might hurt others. Remember everyone is
here to do business and make profits, so be logical and justified. Don’t get too
involved and over emotional. One should be a little diplomatic and intelligent for an
effective negotiation.
 Avoid last minute changes as it result in confusions and misunderstandings. The two
parties must be very clear on what they expect from each other, and must stick to it.
Don’t change statements every now and then. Once a conclusion is reached or a deal
is cracked, it’s always better to sign an agreement in presence of both the parties.
 Being too rigid is one of the biggest challenges to an effective negotiation. Be a little
flexible. Compromise to your best extent possible and don’t crib always. One should
adopt a positive attitude and try his level best to adjust with each other and find out a
solution which will satisfy all. Only price is not important, other factors like quality,
brand name, durability must also be taken into consideration. One CD player might
cost you $5 but another might cost you $4, a little cheaper than the first one, but it is
quite possible that the first one is far superior in quality than the second one. Be a
little sensible and understand things. If you have purchased something for $6, would
you sell it to someone for $3. Obviously no, the same goes with others as well.

Stay alert while you are negotiating. Don’t accept any terms and conditions without
carefully studying them. You might create problems for yourself later. Keep your ears
and eyes open while negotiating.
 Lack of confidence is again one of the major threats to negotiation. Don’t forget to
make an eye contact with the person sitting on the other side of the table. It’s
important to be serious but that does not mean you will not even greet the other
person. Be straightforward and crisp in your communication. Take care of your
dressing and appearance as well.
Stages:
However, negotiators need not sacrifice effective negotiation in favor of a positive
relationship between parties. Rather than conceding, each side can appreciate that the other
has emotions and motivations of their own and use this to their advantage in discussing the
issue. In fact, perspective-taking can help move parties toward a more integrative solution.
Fisher et al. illustrate a few techniques that effectively improve perspective-taking in their
book Getting to Yes, and through the following, negotiators can separate people from the
problem itself.
 Put yourself in their shoes – People tend to search for information that confirms his
or her own beliefs and often ignore information that contradicts prior beliefs. In order
to negotiate effectively, it is important to empathize with the other party's point of
view. One should be open to other views and attempt to approach an issue from the
perspective of the other.
 Discuss each other's perceptions – A more direct approach to understanding the
other party is to explicitly discuss each other's perceptions. Each individual should
openly and honestly share his or her perceptions without assigning blame or
judgement to the other.
 Find opportunities to act inconsistently with his or her views – It is possible that
the other party has prior perceptions and expectations about the other side. The other
side can act in a way that directly contradicts those preconceptions, which can
effectively send a message that the party is interested in an integrative negotiation.

 Face-saving – This approach refers to justifying a stance based on one's previously
expressed principles and values in a negotiation. This approach to an issue is less
arbitrary, and thus, it is more understandable from the opposing party's perspective.
Additionally, negotiators can use certain communication techniques to build a stronger
relationship and develop more meaningful negotiation solution.
 Active listening – Listening is more than just hearing what the other side is saying.
Active listening involves paying close attention to what is being said verbally and
nonverbally. It involves periodically seeking further clarification from the person. By
asking the person exactly what they mean, they may realize you are not simply
walking through a routine, but rather take them seriously.
 Speak for a purpose – Too much information can be as harmful as too little. Before
stating an important point, determine exactly what you wish you communicate to the
other party. Determine the exact purpose that this shared information will serve.

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