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7Con�lictandNegotiation
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LearningObjectives
Afterreadingthischapterandstudyingthematerials,youshouldbeableto:
Explain the nature of con�lict.
Utilize various methods to resolve con�licts.
Recognize the forms of negotiation, including distributive and integrative situations.
Understand the stages of negotiation in a constructive manner.
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Religiousexpressionisacommonareaofcontentionin
workplacepolicies.
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7.1TheNatureofCon�lict
One indisputable fact of organizational life is that there are people involved, and that many times they get into disputes and con�licts. At times such
disagreements can be resolved through relatively calm, rational processes including mediation or other forms of negotiation. At others, con�licts emerge
practically without notice and no intervening step can be taken to prevent them or even slow them down. In other situations, what begins as an uneventful
negotiation can evolve into a more dramatic con�lict situation. In all cases, individual employees and their supervisors will be expected to respond and react to
the issue at hand. Consider the circumstances present in the OBinAction feature regarding employee and management religious concerns in pro�it-seeking
companies.
OBinAction:ThePotentialforNegotiationandCon�lict—ReligiousActivitiesandCompanyPolicies
What happens when the religious af�iliations of employees become potentially at odds
with company policies and practices? Two stories highlight the need for careful
negotiation or con�lict resolution.
The �irst occurred in 2015 at a Cargill manufacturing facility in Fort Morgan, Colorado.
Cargill employed more than 150 workers who practiced Islam. A group of 11 workers of
Somalian descent asked if they could have access to a "prayer and re�lection" room within
the plant for a common time of prayer. Some disagreement exists regarding the manner in
which management dealt with the request.
One employee stated that the immediate supervisor asked them to break in smaller
groups so that they would not disrupt production on the assembly line. Another claimed
that higher level managers decided to reduce the number of prayer breaks as a response
to the request. In either case, the Somali workers prayed in small groups on the day of
their request, and at the end of their shift, 10 of the 11 workers quit.
Soon after, 150 Muslim workers missed work for three days in protest. The management
team at Cargill dismissed them for failing to inform the company that they would be
absent. Following the incident, nearly 130 of the �ired workers �iled complaints with the
U.S. Equal Employment Opportunity Commi.
2. workplacepolicies.
Purestock/Thinkstock
7.1TheNatureofCon�lict
One indisputable fact of organizational life is that there are
people involved, and that many times they get into disputes and
con�licts. At times such
disagreements can be resolved through relatively calm, rational
processes including mediation or other forms of negotiation. At
others, con�licts emerge
practically without notice and no intervening step can be taken
to prevent them or even slow them down. In other situations,
what begins as an uneventful
negotiation can evolve into a more dramatic con�lict situation.
In all cases, individual employees and their supervisors will be
expected to respond and react to
the issue at hand. Consider the circumstances present in the
OBinAction feature regarding employee and management
religious concerns in pro�it-seeking
companies.
OBinAction:ThePotentialforNegotiationandCon�lict—
ReligiousActivitiesandCompanyPolicies
What happens when the religious af�iliations of employees
become potentially at odds
with company policies and practices? Two stories highlight the
need for careful
negotiation or con�lict resolution.
The �irst occurred in 2015 at a Cargill manufacturing facility
in Fort Morgan, Colorado.
Cargill employed more than 150 workers who practiced Islam.
A group of 11 workers of
Somalian descent asked if they could have access to a "prayer
3. and re�lection" room within
the plant for a common time of prayer. Some disagreement
exists regarding the manner in
which management dealt with the request.
One employee stated that the immediate supervisor asked them
to break in smaller
groups so that they would not disrupt production on the
assembly line. Another claimed
that higher level managers decided to reduce the number of
prayer breaks as a response
to the request. In either case, the Somali workers prayed in
small groups on the day of
their request, and at the end of their shift, 10 of the 11 workers
quit.
Soon after, 150 Muslim workers missed work for three days in
protest. The management
team at Cargill dismissed them for failing to inform the
company that they would be
absent. Following the incident, nearly 130 of the �ired workers
�iled complaints with the
U.S. Equal Employment Opportunity Commission (EEOC)
regarding discriminatory
practices based on religion (Chang, 2016).
The second event occurred in 2014. In that case, the U.S.
Supreme Court, on its �inal day of activity for the session,
ruled that any requirement of family-
owned corporations to pay for insurance coverage for
contraception under the Affordable Care Act violated a federal
law protecting religious freedom.
The dissenting opinion made by Justice Ruth Bader Ginsberg
from the court was that the outcome represented "a decision of
startling breadth" (Liptak,
2014). She attacked the majority opinion as a radical overhaul
4. of corporate rights and worried that it could apply to all
corporations and to countless laws
regarding religion in the workplace.
The case revolved around arguments made by attorneys for
Hobby Lobby and Conestoga Wood Specialties. Both companies
insisted they should not be
required to include contraception coverage as part of insurance
policies for employees. Religious liberty by the owners was the
primary argument made
by the winning side (Liptak, 2014).
The court's decision produced signi�icant publicity regarding
Hobby Lobby. Some customers may have felt that even bringing
the complaint was an
undesirable act; whereas others may have been thrilled the
company "took a stand" in terms of the religious beliefs of the
owners. Clearly, taking the issue
to the Supreme Court suggests strong determination by those
who brought the case.
Re�lectionandApplicationQuestions
1. Could both of these events have been resolved through
negotiation rather than con�lict?
2. Describe all of the potential persons or groups who might
have had interests or a "stake" in the outcome of both
situations.
3. Why might religious beliefs and preferences create an even
more incendiary situation than other organizational issues?
This chapter considers con�lict and negotiation. Any employee
can expect to deal with these issues, beginning with bargaining
for wages and other
considerations when hired. Con�lict will be examined �irst,
followed by negotiation.
5. What do you think of when you hear the term "con�lict"? To
some, con�lict represents a negative force, accompanied by
words such as "destructive," "violent," or
"angry." Others view con�lict on a continuum ranging from
mild disagreements to major confrontations. Over time,
con�lict has been viewed as something to be
avoided or eliminated, as inevitable but manageable, and even
as a driving force that leads to innovation and much needed
change (De Dreu & Van de Vliert,
1997; Fink, 1968). Consequently, de�ining the term creates
challenges.
In the context of organizational behavior, con�lict is a
circumstance in which one party negatively affects or seeks to
negatively affect another party (Thomas,
1992). Con�lict can be observable or perceived (Wall &
Callister, 1995), which means that someone may believe that a
con�lict exists even when it would be
dif�icult to point out as an observable event. Con�lict and
negotiation are closely related concepts, in that both suggest
that two parties are involved, and both
parties seek to impose their will or gain in a disputed situation.
Con�lict contrasts with another concept, competition; a
condition in which all parties in an event or situation attempt to
do their best, with the person or group
producing the most desired outcome emerging as the winner. A
sales contest between individuals or teams is a competition; a
confrontation between two
members of a sales force over which one should make a call on
a prospective client is a con�lict.
Recently, con�lict has been conceptualized as taking two
forms. In an organizational context, functionalcon�lict occurs
when the organization's interests are
6. served in some way, such as improvement in performance or
greater cooperation among individuals or groups. Functional
con�lict is also called constructive, or
cooperative, con�lict. A functional con�lict would involve an
argument about how best to design a retail store to make it more
customer-friendly.
Dysfunctionalcon�lict takes the form of destructive activities
that hinder group or organizational performance. Three
categories of dysfunctional con�lict have
been identi�ied, as shown in Table 7.1 (Amason, 1996).
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Table7.1:Categoriesofdysfunctionalcon�lict
Taskcon�lict Disagreement about the type of work that should
be performed and goals
Relationshipcon�lict Interpersonal dispute
Processcon�lict Disagreement about methods of doing a job or
performing a task
Functional con�licts tend to revolve around ideas. The process
of resolution may be passionate, but the goal remains to achieve
a positive outcome. Dysfunctional
con�licts devolve into character assassination and vendettas as
the parties involved seek to "win" rather than necessarily
reaching a viable solution or
compromise.
7. LevelsofCon�lict
Not all con�licts are the same. Managers should be aware that
four levels of con�lict occur in the workplace. Resolving
con�lict cannot take place until the level has
been properly identi�ied. The four levels of con�lict are as
follows:
intrapersonal, or intrapsychic, con�lict
interpersonal con�lict
intragroup con�lict
intergroup con�lict
Intrapersonalcon�licts (also called intrapsychiccon�licts)
occur within an individual. Ideas, thoughts, values, and
emotions can con�lict with one another. For
instance, selling a product that someone does not think has
suf�icient quality or one that is potentially dangerous may
create an intrapsychic con�lict when the
individual also recognizes the need to make sales and generate
personal income.
Interpersonalcon�licts take place between individuals. Many
times, two individuals in a company enter into con�licts.
Personality con�licts often result from
workplace incivility. Examples of incivility include sexually
inappropriate comments, racial or ethnic slurs, ridicule of older
or younger workers, derision based
on sexual orientation, and insensitive comments about physical
or mental disabilities (Blau & Anderson, 2005). Other
interpersonal con�licts take place simply
because one person dislikes another, or when mutual animosity
exists, for whatever reason. Interpersonal con�licts also emerge
for what could be considered
"legitimate" reasons, such as disagreements about
8. organizational goals, managerial decisions, the distribution of
resources (budgets, pay), or a more personal
matter such as a performance appraisal rating.
Intragroupcon�lict refers to incidents between members of a
group. Disagreements about group goals, methods of operation,
and leadership create intragroup
con�licts. When con�licts are not properly managed and
resolved, the end results can be poor decisions and ineffective
group functioning (Bazerman & Neale,
1992). Intragroup con�lict can quickly emerge when two
individuals try to assume the role of leader, especially in
forming stage of the group.
Intergroupcon�lict takes place between various groups, such as
between departments within a company, or between factions
such as ethnic groups or female
and male employees. Intergroup con�licts emerge when
disagreements about goals, differences of opinion about which
group should be assigned a project or
task, or budget allocations become the focus of attention.
Each of these four types of con�lict requires an intervention. In
the case of an intrapersonal con�lict, a counselor or advisor
may assist. Interpersonal, intragroup,
and intergroup con�licts may be resolved in a variety of ways.
Managers choose the most appropriate method for dealing with
each problem as it arises. Con�lict
resolution will be discussed in Section 7.2.
AModeloftheStagesofCon�lict
Louis Pondy (1967) developed one of the �irst and most widely
cited models of con�lict. A modi�ied version appears as Figure
7.1. Pondy's model states that
con�licts occur to a lesser or greater extent depending on the
9. organization's place in a con�lictcycle. The cycle suggests that
when individuals become subjected
to a series of con�licts (even when they are only spectators),
they become increasingly sensitized to the events. As a result,
subsequent con�lict will be more
likely. When a series of con�licts has been resolved and the
company enters a more tranquil period, participants become
more patient with each other and the
net result is reduced numbers of open con�licts. Managerial
skill and intervention can break the cycle of increasing
con�lict.
As shown in Figure 7.1, latentcon�lict represents all of the
potential sources of con�lict at the individual or group level.
Table 7.2 displays the various areas or
issues where potential sources of con�lict within an
organization might exist. These potential sources may or may
not erupt into open confrontations. Some
problems may exist for years without ever becoming manifest.
Others may take a "fast track" and quickly develop into
altercations.
Figure7.1:AdaptationofPondy'scon�lictmodelandcon�lictcycle
Pondy's model of the phases of organizational con�lict shows
how con�lict can become a cycle that continues to feed
upon itself.
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10. Source:Pondy,L.(1967September)OrganizationalCon�lict:Con�
lictsandModels,Administrative Science Quarterly,12,296–320.
Table7.2:Potentialsourcesofcon�lict
Individuallevel Groupordepartmentallevel
Job assignments Group task assignments
Performance appraisals Budgets/resource allocation
Promotions Personalities of group members
Pay raises Dependence/bottlenecks
Personality issues and incivility Goals
Dependence/bottlenecks Communication breakdown
Goals Ethical issues
Status differences
Communication breakdown
Power differences
Ethical violations
Feltcon�lict occurs when people know something is wrong but
cannot pinpoint the source. Have you had the experience of
walking into a room and knowing
immediately something is not right, but having no clue as to the
actual problem? At that point, you are feeling the con�lict.
Perceivedcon�lict means that those near a con�lict know the
issues and the people involved, yet do not feel discomfort from
11. it. In essence, the con�lict is
"someone else's problem." Often, perceived con�licts take
place in other departments or parts of an organization.
As shown in Figure 7.1, felt con�licts can evolve into
perceived con�licts and vice versa. In other words, an
employee or employee group moves from knowing
something is wrong to discovering what other people are
�ighting about. Conversely, perceived con�licts can move into
the realm of being felt. In this instance, the
con�lict involved suddenly starts to cast a pall over those who
previously knew about it but did not feel uncomfortable as a
result. This means they now
experience it more directly
As felt and perceived con�lict intensi�ies, perceptions of the
con�lict change. When this happens, those near the con�lict
feel it so strongly that it begins to affect
their work and/or feelings about the workplace, leading to a
sense that things are about to "explode." Those who perceive
the con�lict can no longer stay neutral,
feeling they must "take sides." In both instances (feelings and
perceptions become stronger), the con�lict has taken on new
dimensions. The tendency shifts
toward interpreting people and events as being either with or
against one side. Thinking reverts to more stereotypical and
biased forms that favor a person's
viewpoint. This sets the stage for opencon�lict, which displays
visible outward signs (Lewicki, Barry, & Saunders, 2010, p.
19).
One driving force that moves a con�lict from a potential issue
into a more tangible stage is frustration (Meyers, 1990). When a
worker has a goal in mind and a
policy, action, behavior, or any other overt or covert barrier
prevents achievement of that goal, con�lict becomes more
12. likely. The worker's goal could be as
political as getting an undeserved promotion or as positive as
trying to help out a coworker.
Open con�licts appear as showdowns, confrontations, and other
outward signs. Often an open con�lict results from ongoing
escalation of the issue. Manifest
con�lict behaviors include yelling, loud arguments, and
violence toward others at the individual level, and work
slowdowns, strikes, and deliberate rules
violations at the group level. At that point, con�lict resolution
must take place. A manager or arbiter needs to step in.
As an example, consider a latent con�lict with both individual
and departmental elements. The potential dispute plays out in
the accounting and sales
departments. The issue is the timing of turning in sales report
�igures. The sales department and individual salespeople wish
to wait until the last possible
minute to turn in their numbers, thereby giving them the chance
to list as many sales as possible—which in turn affects their
commissions. The accounting
department cannot "close the books" until all sales information
arrives. This often results in late nights for the accountants who
want to complete their reports
on time. As a result, a latent con�lict exists.
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Simultaneously, one of the salespeople and one of the
13. accountants are part of the safety committee, which also
involves the human resources manager and a
member of the production staff. During one of their weekly
meetings, the accountant is visibly perturbed and irritable.
Others in the room feel the presence of a
con�lict but do not know the source of the tension.
After the meeting, the accountant describes his frustration to the
production department manager who then understands the
problem, but concludes he does
not want to get involved and that it is not his problem.
Perceived con�lict is now in place.
Over time, frustrations continue to mount. Neither the
accountant nor the salesperson seems particularly engaged in
the work of the safety committee, and
glares and stares replace more pleasant interactions. The
production department members begin to believe that such late
sales reports and delayed accounting
statements can slow the process of replacing inventory in a
timely fashion. Thus, they conclude that the tension between
accounting and sales has an impact on
them. As a result, both felt and perceived con�licts have
reached new levels.
Eventually, the tensions boil over in the hallway after a safety
committee meeting. The accountant and the salesperson are
nose-to-nose trading insults and
complaints. Soon after, the dispute has been described to
members of both departments, with outright hostility beginning
to grow. The con�lict has become open,
and someone must take charge to resolve the situation. The
mediator (manager or some other person) worries that this
con�lict might lead to other con�licts
between production, sales, and accounting, if not resolved
quickly and effectively.
14. In sum, con�lict is a circumstance in which one party
negatively affects or seeks to negatively affect another party.
Managers should be aware of the potential
sources of con�lict and work to resolve them when they occur.
SUBMITSUBMITSUBMIT
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Allcon�lictsareunique,andtheorderofstepstoward
resolutionwillbedeterminedonacase-by-casebasis.
DuncanSmith/Photodisc/Thinkstock
7.2Con�lictResolution
A manifest con�lict often requires a cooling-off period before
any attempt at resolution can start. When emotions are high,
reasonable dialogue will be unlikely.
When an arbiter or manager surmises that both sides have
suf�iciently calmed down, con�lict resolution can commence.
In general, the con�lict resolution
process involves the following steps or activities (Rackham,
1976):
Identify the parties involved.
Identify the issues.
Identify the positions of the parties.
Find the bargaining zone.
15. Make a decision.
Note that these activities may not occur exactly in this
sequence. At times several
characteristics, such as the issues, parties, and positions may be
evident from the outset. In
others, more than one of the factors may be revealed at the same
time due to one statement
made by a party to the con�lict. The manager's job (or the
mediator) will be to identify each
element before seeking a resolution.
To identify the parties involved, the manager seeks to be certain
whether an individual or
group con�lict exists. Next, he or she must identify the real
issues involved in the dispute,
which may take time. Many times a con�lict �irst becomes
manifest because of something quite
minor. When two persons become involved in a shoving match
over who should use the copier
�irst, odds are the real issue is something else.
The moderator works to identify the positions of each party.
When the con�lict involves only
two individuals or two groups, discovering their positions
should be fairly easy. Often,
however, a problem or concern exhibits many facets and the net
result is that several people
or coalitions have some sort of vested interest. To effectively
resolve the con�lict, the
moderator must determine the agendas of all parties involved,
which may be a more dif�icult
task.
Finding the bargaining zone in a con�lict resolution resembles
identifying the settlement
16. range in a negotiation. The bargaining zone is the area in which
give and take can be carried
out. At times, no such range may be found; one side will win
and the other will lose.
Making the �inal decision determines the outcome of the
con�lict. A win-win solution allows
all sides to make gains. In essence, each side is "better off "
when a resolution has been
reached. A win-lose solution means one side gains the
advantage over the other. A lose-lose,
or compromise, means both parties gain on some issues but lose
on others. Most bargaining
agreements between unions and management result in
compromise solutions on a variety of
issues, from pay to bene�its to other employment
circumstances.
Con�lictResponses
Con�lict resolution includes an understanding of the concerns
of the parties involved. The dual concerns model, as developed
by Rubin, Pruitt, and Kim (1994),
assumes that individuals handle con�lict by balancing a
concern for themselves (their personal outcomes) with a concern
for others. The tendency to be pro-
social or pro-self will determine a particular con�lict style:
contending/competing, inaction/avoiding,
yielding/accommodating, problem solving/collaborating,
or conciliatory/compromising (see Figure 7.2).
Figure7.2:Responsestoconcerns
There are �ive main con�lict styles, each characterized by a
different level of concern for the other's outcomes.
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ApproachestoDisputeResolution
Professionals discuss the different stages of dispute
resolution.
Source:Rubin,J.Z.,Pruitt,D.,&Kim,S.H.(1994).Social con�lict:
Escalation, stalemate, and
settlement(2nded.).NewYork,NY:McGraw-Hill.
When one side has little concern about the other's outcomes,
two con�lict styles may result: contending/competing or
inaction/avoiding. Contending or
competing occurs when one side fully pursues its outcomes with
no regard for the outcomes of the other side. Strong tactics,
such as threats, intimidation, and
unilateral action, appear. Other terms associated with
contending include "dominating" and "forcing" (Rahim, 1985).
Inaction and avoiding are characterized by
withdrawal and passivity; the party involved has little regard
for its own outcome or for the other side's outcome. It retreats
from the con�lict.
When concern for the other party's outcome is high, two
con�lict styles are possible: yielding/ accommodating and
problem solving/collaborating. The
yielding/accommodating style involves seeking to help the other
side achieve its outcomes with little care about one's own
outcomes, because maintaining a
18. social relationship is more important than being "right" or
winning. Yielding is also referred to as "obliging" and
"smoothing" (Rahim, 1985). A problem
solving/collaborating style occurs when high concern for the
other's outcomes accompanies high concern for one's personal
outcomes. The goal is to achieve a
win-win solution. Problem solving has also been labeled an
"integrating" approach.
When there are moderate levels of concern for the other party's
outcome as well as one's own, the compromising con�lict style
emerges. A compromise becomes
more likely when the two sides hold equal levels of power,
consensus cannot be reached, and the goals of the two parties
are not strongly connected. Discovering
the relative positions of the two sides becomes part of the
con�lict resolution process. Managers try to identify the level
of give and take that will be possible by
assessing the strength of commitment each side has to its
position. More effective negotiations or resolutions then
become possible.
AlternativeApproaches
At times, a con�lict stands a better chance at effective
resolution when a third party intervenes. Alternative dispute
resolution attempts to incorporate user-
friendly methods of dispute resolution and seeks to avoid more
adversarial approaches (Morrow & Bernardi, 1999). The
methods used in this approach include
facilitation, conciliation, peer review, ombudsman, mediation,
and arbitration.
Facilitation involves a third party urging the two sides to meet
and deal directly in a constructive and positive fashion. In
simple terms, a "face-to-face" meeting
19. takes place. Both parties are allowed to express their positions
and frustrations in a civil manner. In general parlance, this
might be called "hashing things out,"
such as when an individual employee and a supervisor disagree
about a performance appraisal score or rating.
Conciliation uses a neutral third party who acts informally as a
communication conduit to help
resolve a dispute without the parties directly meeting.
Conciliation involves a "go-between"
person. Intergroup con�licts can be resolved by a manager of
higher rank playing the role of
conciliator. For instance, a sales department manager would like
to be able to offer each client a
"tailor made" product; whereas a production manager prefers
more of a "one size �its all"
system to make items more ef�iciently. In another situation, a
company tax attorney may
disagree with an accountant or accounting department's
assessment of a tax liability to be paid
to the government. A manager of higher rank can serve as the
go-between looking for
accommodation by both sides.
When peerreview is utilized, a panel of trustworthy coworkers
that can remain objective is
asked to render a nonbinding verdict or opinion about how the
con�lict should be resolved.
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20. CriticalThinkingQuestions
1. Why do you think communication is emphasized as
the most important aspect of dispute resolution?
2. Can you think of a con�lict you've experienced that
could have been resolved through one-on-one
communication?
Peer review takes place in some organizations when a dispute
between an individual and a
supervisor takes place, over a matter of discipline, where the
employee feels he or she has been
treated unjustly or penalized in an unfair manner.
An ombudsman is a respected employee who will hear both
sides of an argument and attempt
to arrange a solution acceptable to both sides. Some
organizations include an ombudsman
position in the hierarchy. Any individual or group with a
complaint may take it to this
individual, who then works toward a resolution.
Mediation employs a trained arbiter to �ind innovative
solutions to the con�lict. Many
unionmanagement disputes are settled through mediation.
Arbitration retains a third party who operates in a formal, court-
like environment and hears
testimony and evidence before rendering a judgment about how
the con�lict should be
resolved. Arbitration can be used to settle con�licts over pay or
job assignments. It is often
viewed as the "last resort," when no other method has been
successful.
21. Con�lictOutcomes
The goal of any con�lict resolution should be to reach a
functional settlement. Desired
outcomes of con�lict resolution include agreement, stronger
relationships, and organizational
learning. Agreement is achieved when both sides believe a
settlement was fair or equitable.
Stronger relationships emerge when both parties try to build
trust and goodwill for the future.
Organizational learning takes place when an individual or group
achieves greater
selfawareness or better understands how to �ind creative
solutions to problems.
Table 7.3 lists some of the additional positive outcomes
associated with con�lict. These can occur at the interpersonal,
intergroup, and intragroup levels. Positive
outcomes are sometimes dif�icult to achieve, in which case
certain negative aftereffects of con�lict may result. These
aftereffects are noted in Table 7.4.
Table7.3:Positiveoutcomesofcon�lict
Positiveoutcomes
Con�licts may serve as safety valves to reduce pent-up
emotions and pressures.
Con�lict generated by external threats may increase internal
cohesion.
Con�lict can help introduce much-needed change.
Con�lict can bring long-standing animosities and hidden
agendas to the surface.
22. Con�lict may trigger creativity and innovation.
Con�lict resolution may foster increased communication in the
future.
Source:King,D.(1981,January–
February).Threecheersforcon�lict!Personnel, 58(1),13–22.
Table7.4:Negativeaftereffectsofcon�lict
Negativeaftereffects
Con�lict may foster anger and revenge which can lead to
continuing attempts to make the other side look bad.
Con�lict may result in noncompliance with orders and
decisions.
Con�lict may cause reduced effort or passive resistance from
one or more parties.
Con�lict may lead to empire building, withholding information,
or territory defense.
Con�lict may encourage an increasingly legalistic approach to
tasks and assignments.
Con�lict may result in withdrawal behaviors such as
daydreaming or meeting in groups to visit rather than to resolve
issues.
Con�lict may lead to new lobbying efforts.
Con�lict may encourage sarcasm in front of the mediator.
Con�lict may increase sensitivity to statements and comments.
Source:King,D.(1981,January–
23. February).Threecheersforcon�lict!Personnel, 58(1),13–22.
Effective management of con�lict seeks to lead to the potential
positive outcomes noted in Table 7.3 and avoid the potential
negative aftereffects noted in Table
7.4. Doing so includes two primary activities. First, managers
should actively analyze potential sources of con�lict at all
times, so that these sources can be
eliminated. Second, managers should seek to become quality
con�lict arbiters. They should remember that impartiality, a
sense of humor, and a calm disposition
are major assets in con�lict resolution.
Approaches to Dispute Resolution
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Withtheloomingthreatofinfectious
disease,thelinebetweenparanoiaand
reasonablecautioncanbecomeblurry.
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7.3TheNatureofNegotiationsandBargainingProcesses
As noted at the start of the chapter, con�licts can emerge
practically without notice, and no intervening step can be taken
to prevent them or even slow them
down. At the same time, many forms of latent con�lict are
resolved through relatively calm, rational processes including
mediation, negotiation, or even a simple
face-to-face discussion. Unfortunately, what begins as an
uneventful negotiation can evolve into a more dramatic
con�lict. This section explains methods
managers can use to prevent a less signi�icant dispute or
bargaining issue from turning into an outright con�lict.
Negotiation is a give-and-take decision-making process
involving interdependent parties with differing objectives or
outcome preferences (Bazerman & Neale,
1992). Two perspectives exist regarding the terms "negotiation"
and "bargaining." Some sources identify them as being the same
(Robbins, 2005, p. 434; Wall,
1985). Others take a slightly different view, suggesting that
negotiation refers to a win-win situation in which the ultimate
objective is to �ind solutions that are
mutually acceptable to all parties to a complex con�lict.
Bargaining, on the other hand, represents a competitive "win-
25. lose" circumstance in which each party
seeks to obtain the best possible outcome for their side
(Lewicki, Barry, & Saunders, 2010, p. 3).
In this chapter the two terms will be used interchangeably.
Negotiations and what could be perceived as "bargaining" may
not always be clear-cut, as noted in the
OBinAction case regarding quarantine for health care workers
who treated patients with the Ebola virus in Africa a few years
ago.
OBinAction:TheQuarantineControversy
In 2014, a major outbreak of the Ebola virus in West Africa
spread worry and concern on practically a
world-wide basis. The highly contagious disease resulted in
thousands of deaths and concerns of
epidemics in new places. Con�lict and negotiation emerged in
several situations, based on whether
returning health care workers who treated Ebola patients should
be quarantined following their arrival
in the United States.
In New Jersey, Nurse Kaci Hickox was placed into a mandatory
quarantine due to rules established by the
state government. She complained that the governor at that
time, Chris Christie, was "not a doctor" and
called the policy "poorly planned" and "not evidence-based."
Hickox, a volunteer nurse for Doctors
Without Borders, tested negative for the virus upon her arrival
in the U.S. She described the quarantine
as inhumane and arbitrary.
The federal government quickly tried to respond. Members
engaged in urgent discussions with the
governors of New York, New Jersey, and Illinois over plans to
26. quarantine all health workers coming back
from infected areas. The national government did not take the
ultimate step of asking that quarantines be
lifted, but spokespersons raised concerns about creating undue
panic in the general population (The
Guardian, 2014).
Hickox was eventually released from quarantine, and returned
to her home in Maine. Soon after, the
controversy re-emerged as governor Paul LePage raised
concerns about where she would be allowed to
travel, even as she took a bike ride in her community. Hickox's
attorney Norm Siegel told CNN that Hickox
went for the ride to make a point: She could be in out in public
"without freaking everyone out." LePage's
of�ice vowed to "exercise the full extent of his authority
allowable by law" to keep her away from public
spaces (Fantz & Hanna, 2014).
The standoff raised the question: Should this issue be resolved
based on fear or facts? "The worst thing would be is if she steps
out of her house in the
next hour and they try to put handcuffs on her," Siegel said. In
the end, she did not contract the virus or infect any other
person.
Re�lectionandApplicationQuestions
1. Can you name all of the parties and stakeholders in this
situation?
2. Evaluate the state government's intervention in this
controversy?
3. What type of resolution resulted from this negotiation: win-
win, win-lose, or a compromise?
In employment settings, two types of negotiations take place:
27. distributive negotiations and integrative negotiations (Walton &
McKersie, 1965). Distributive
negotiations involve a single issue and a zero-sum game in
which one side's gains become the other side's losses (win-lose),
similar to a con�lict resolution. A
furniture manufacturer negotiating the price of fabric used to
cover sofas serves as an example. Every dollar that the
manufacturer has to pay for the raw
material represents a dollar of revenue to the fabric supplier.
The second circumstance, an integrativenegotiation, resembles a
problem-solving agenda in which both sides try to obtain a
settlement that bene�its both—a
win-win solution. In today's complex marketplace, integrative
negotiations have grown in popularity and usage. Table 7.4
identi�ies some of the key differences
between distributive and integrative negotiation.
Table7.4Integrativeversusdistributivenegotiation
Integrative Distributive
Assumption Basic goals do not con�lict Basic goals are
fundamentally opposed
Buildingarelationship A strong priority Not a priority
Resources Can expand A �ixed amount
Leveloftrust Is possible or exists Not possible
In essence, a distributive approach resembles a zero-sum game,
such as poker. One party wins by taking away "chips" from the
other. Consequently, any goals
cannot overlap between the two and trust is not likely.
Relationships cannot be strengthened when this approach
prevails.
28. The integrative method assumes resources resemble a "balloon
concept" in which they can be expanded when necessary. Trust
can be built to combine resources
and goal agreement can be reached. This method, in turn, makes
it possible to build positive and lasting relationships.
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Integrative negotiation requires a different mindset. In essence,
the negotiator must be able to separate personal feelings
(including differences) from analysis of
the problem. Further, both sides must be able to concentrate on
positions rather than merely the interests of their side or group.
The agenda should include time
to seek out mutually bene�icial ideas rather than merely
gaining an advantage.
The primary problem which can emerge from an integrative
approach occurs when one side mistakes the attempt to build a
relationship with "softness" or
"weakness." If one party assumes a competitive advantage
exists due to the willingness to cooperate from the other, the
approach is destined to fail.
With the differences between the two approaches (integrative
versus distributive) in mind, Table 7.5 identi�ies three types of
negotiations that take place in the
business community. The categories include negotiations
between an individual and a company, between two companies,
29. and between a company and an
outside agency or organization. Both distributive and
integrative negotiations take place in those areas.
Table7.5:Typesofnegotiations
Betweenindividualandcompany
Employment contract
Wages
Bene�its
Betweentwocompanies
Sales
Partnerships
Betweencompanyandoutsidegroup
Company management and unions
Company and government
Company and special interest groups
PreconditionstoNegotiation
Prior to any negotiation process, careful deliberation should be
given to whether negotiating represents the best option.
Preconditions for bargaining involve
ensuring that several circumstances exist. Three areas to
consider are the psychological climate, the availability of
resources, and the characteristics of the
bargaining issue.
30. ThePsychologicalClimate
Negotiation can take place only when the parties involved
exhibit certain mental characteristics. When the proper frame of
mind does not emerge, negotiations
become more likely to fail. The most important psychological
elements are (Moore, 2011):
willingness to participate in negotiations
readiness to negotiate
agreement on some issues
willingness to settle
sense of urgency
The willingness to participate begins with the ability to identify
key parties to a negotiation. Managers should be aware of who
the various stakeholders are
prior to any bargaining process. A stakeholder is a person or
group with a vested interest in the outcome of a negotiation. In
the case of negotiations with outside
agencies, for example, it may be possible that a company will
seek to reach an agreement with a union while at the same time
remaining aware of governmental
constraints, such as those related to bargaining in good faith,
equal opportunity legislation, and antitrust laws. Stakeholders
should tangibly demonstrate their
readiness to be seated at the bargaining table. If a stakeholder
group is absent or unwilling to commit to good-faith bargaining,
the potential to �ind a viable
solution is reduced.
An individual or group conveys the readiness to negotiate
through a commitment to conduct the needed investigation prior
to any �irst meeting. The stakeholder
should have adequate time to prepare a negotiation strategy.
Before beginning any actual negotiation, all sides should be
31. able to say, "We're ready."
Negotiation will not be possible unless some agreement on
issues and interests can be identi�ied. Although various issues
may be of concern to only one party,
negotiation becomes less of an option unless some mutual
interests are found. For example, a union should be able to
agree with company leaders that ensuring
working safety is in the interest of both sides. The parties
should be able to commit to a joint decision-making process
based on these agreements (Kolb &
Williams, 2003).
Negotiations succeed when participants are willing to settle.
When continuing a con�lict becomes more important than
settling, negotiations tend to fail.
Consequently, for an agreement to be reached, the negative
consequences of failing to �ind an agreement must be more
signi�icant than the negative
consequences of keeping the con�lict going. Also, when one
side expresses or holds unexpressed negative animosity toward
another party, it can sharply affect
psychological readiness to bargain. These barriers must be
lowered so that participants will become more willing to settle.
The most standard approach to
lowering such barriers involves starting with all points of
agreement and common ground prior to discussing any disputed
areas.
Finally, time frames also in�luence the psychological climate
surrounding potential negotiations. When no deadline, pressure,
or urgency to reach an agreement
appears, negotiations are less likely to proceed. A sense of
urgency may be imposed either by external or internal time
constraints or by potential negative or
positive consequences to a negotiation outcome, such as a court
32. date or the time when an existing sales or union contract is set
to expire. A side that can afford to
procrastinate has an advantage in a negotiation in which the
other side experiences a sense of urgency.
TheAvailabilityofResources
In order for a negotiation to take place, resources must be
present, such as suf�icient time and money to fully engage in a
dialogue. An additional bargaining
resource includes the bargaining skills of key negotiators. In
general, when one side's resources are inadequate or unequal to
the other side's resources, the �irst
side's bargaining position may be weakened to the point at
which negotiations become dif�icult to conduct.
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Insituationswherenegotiationisnotplausible,
alternativemethodsareavailable,suchasmediation.
ComstockImages/Stockbyte/Thinkstock
The resources held by a group in a negotiation include a "means
of in�luence" form of leverage. Classic views of power suggest
that in�luence is based on
legitimate, reward-based, coercive, expertise-oriented, and
charismatic means (French & Raven, 1959), as displayed in
Table 7.6. Often, the tendency may be to
think �irst about the use of coercion to achieve bargaining
objectives; however, persuasion may also result from using the
33. other methods.
Table7.6:Meansofin�luenceinnegotiation
Typeofin�luence Description
Legitimate Based on a negotiator's superior position due to
a governmental dictate
ownership of a patent or similar protection
contractual advantage from a previous negotiation
Reward based Based on the ability to promise rewards such as
access to additional business partners/customers or the potential
that a basis will be
established for future agreements
Coercion Based on the ability to deliver negative consequences
such as
loss of revenues
loss of supplies
damaged relations with customers
damaged relations with governmental organizations
Expertise Based on in�luence achieved through presentation of
factual evidence and/or analysis by experts in the area or �ield
Charisma Based on the use of personal persuasiveness, thought-
provoking questions, and discussion
TheCharacteristicsoftheBargainingIssue
The bargaining issue, or the primary item to be negotiated,
poses an impediment or creates the need to bargain. To reach
the status of a viable bargaining issue,
several factors should be in place:
interdependence
willingness to compromise
34. unpredictability of the outcome
negotiable issues
participants hold the authority to decide
Interdependence. The high level of attachment or necessary
interaction between the parties results in interdependence. An
employee bargaining for salary offers
to exchange a skill or talent; and the organization, which needs
that skill or talent, agrees to a level of compensation. The
exchange creates interdependence.
Parties to a sale, such as the provider of a raw material and a
manufacturer, should in some way rely on each other—that is,
be interdependent—in order to have
their needs met or interests satis�ied. When one party to a
bargaining arrangement �inds it can satisfy its needs without
the help or cooperation of the other, no
real reason to negotiate exists.
WillingnesstoCompromise. Company leaders know that not all
negotiations require compromise. Parties may reach an
agreement that meets the needs of all
participants without a concession from any party. In many
disputes, however, compromise may be necessary for the parties
to reach an agreement. If one side
determines that the other has "dug in" and no compromise will
be possible, negotiation becomes a less viable option.
UnpredictabilityoftheOutcome. Parties will also negotiate when
the outcome of an issue cannot be predicted. For example, if
one company knows that a lawsuit
against another company only has a 50% chance of success, the
�irm's management team may decide that its best interests are
served by negotiating instead.
The reason for the decision would be that by negotiating, the
company would receive at least some of what it wants; on the
other hand, if the parties pursue
35. litigation, a court order may completely favor the other side by
imposing a judgment and damages against one of the two
parties. The same holds true when an
individual considers suing another person or a company.
Issues. For successful negotiation to occur, negotiators must
believe that there are acceptable settlement options. Room for
give and take must be present. When
only win-lose settlement possibilities occur, the parties
involved become more reluctant to enter into dialogue.
ParticipantsHoldtheAuthoritytoDecide. In any negotiation, the
participants involved must have the authority to make a
decision. When they do not, or when a
rati�ication process has not been established, negotiations will
normally be limited to an information exchange between the
parties (Lewicki & Hiam, 2006, pp.
40–73).
AlternativeApproaches
Prior to entering into a negotiation process, managers should
evaluate and select a guide for
the process. Among the methods available for a two-sided
event, negotiation represents only
one option. Other options include facilitation, mediation,
arbitration, and the courts, which
were discussed earlier in the chapter. These additional methods
should be investigated,
especially when it becomes clear that negotiation is not an
option: for example, if the other
side has made unethical demands or acted in bad faith.
Negotiation should also not be an
option if your side
has not prepared.
36. would have an improved position by simply waiting.
does not have time to negotiate.
could lose everything.
has little or nothing to gain. (Lewicki, Barry, & Saunders, 2010;
Levinson, Smith, &
Wilson, 1999)
In summary, the give-and-take decision-making process of
negotiation can seek the goals of
winning at the expense of the other side in a distributive
process, or can seek a settlement
that assists both sides in an integrative negotiation. Prior to any
negotiation, the persons or
groups involved should assess the psychological climate, the
availability of resources, and the
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characteristics of the bargaining issue, taking into account
circumstances in which other
dispute resolution options are more viable.
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7.4TheStagesofNegotiation
When the parties have determined that negotiation represents
the best option for settling an issue, an individual or company
begins the various stages of
negotiation. Results can be achieved by careful management of
the entire process. At the most general level, negotiation
consists of three overall stages: the
initial, middle, and ending stages. Table 7.7 presents the
various tasks that take place within this three-stage model of
negotiation.
Table7.7:Thestagesofnegotiation
InitialStage MiddleStage EndingStage
Prepare
Open
Argue
Explore
Signal
Package
Close
Sustain
Source:Adaptedfrom:Baack,D.(2012)Management
Communication.BridgepointEducation,Inc.,p.232.
TheInitialStage
The initial stage of negotiation consists of two primary
activities: preparation and opening. When managers plan
thoroughly, the chances for achieving desired
38. bargaining goals increase. The failure to plan provides the other
party with a bargaining advantage that continues through the
remainder of the process.
Preparing
At the point in which management determines that negotiations
should go forward, preparation begins. Managers should employ
several principles to guide
preparations:
Identify and prioritize goals.
Establish a settlement range.
Focus on long-term goals and consequences.
Concentrate on mutual principles and concerns.
When a single-party negotiation takes place, an individual may
be trying to bargain for the best possible pay package, buyout,
or retirement settlement. The
individual's bargaining goal depends on his or her
circumstances. A person taking a buyout who also plans to
continue working has goals that are different from
someone intending to retire. When someone is negotiating for a
salary, several key factors determine exactly what that
individual will bargain for, including the
prevailing market rate, current economic conditions, bene�its
offered, long-term considerations (building a career versus
having a job for the time being), and
the individual's tangible personal accomplishments (Brophy,
2004).
In a similar fashion, when parties bargain as part of a
purchasing situation, two companies may seek to make a one-
time purchase at the best possible price or
use the negotiation process to build a longer-term relationship
with the other organization. A company bargaining with a union
might prioritize avoiding a work
39. stoppage or seek to achieve the best possible deal regardless of
the cost.
Finding the settlement range—the bargaining zone in which
acceptable outcomes are located—results from knowing the
company's priorities, its available
resources, and the strength of its bargaining position. A
negotiator needs to know the boundaries prior to beginning any
session. An individual bargaining with
the company establishes similar "�inal offer" points. To �ind
the settlement range, the mediator should:
Collect and analyze relevant data about the people and
dynamics involved in the problem.
Verify the accuracy of the data.
Minimize the impact of inaccurate or unavailable data.
Identify all parties' substantive, procedural, and psychological
interests. (Moore, 2011, para. 66)
Long-term goals and consequences include issues such as trust
and con�idence in the other party. Mutual principles and
concerns begin with whether the
relationship will be adversarial or cooperative. One of the more
destructive forces in the process can take place when the urge to
win overwhelms rational
thinking (Malhotra, Ku, & Murnighan, 2008). Preparation
involves selecting approaches or procedures that lead to
problem solving whenever possible.
Opening
The opening stage begins when parties make initial contact in
person, by telephone, or by mail. In this initial stage, efforts to
build rapport and establish a cordial
relationship can ease early tensions. Negotiators should express
the desire to reach an acceptable agreement. Expressing one's
commitment to follow through
40. with procedures that have been established creates a more
professional tone. Those involved should check their
perceptions of the other side and seek to
minimize the effects of stereotypes. Both sides should fully
understand the processes that will be used (Moore, 2011).
At the same time, each negotiator should understand that "no"
can be the opening position, and that the �irst offer made by
the other side will often be quite
different from his or her expectations. The bargainer or team
should be aware of the "reluctant buyer" (or seller) ploy, which
involves deliberate stalling and
conveying an unwillingness to reach a quick agreement. As part
of the opening, the negotiator should be ready with tactics to
respond to these and other
complications. Doing so includes developing a strategy to
handle strong emotions (Shell, 1999). When opening, the
negotiator should employ the following
steps:
Introduce all parties.
Exchange statements that demonstrate willingness to listen and
share ideas, show openness, and demonstrate desire to bargain
in good faith.
Establish guidelines for behavior
State mutual expectations for the negotiations.
Describe history of problem and explain why there is a need for
change or agreement.
Identify interests and/or positions.
De�ine issues and set an agenda. (Lewicki & Hiam, 2006)
In sum, preparation leads to con�idence. However, con�idence
should be accompanied by caution. An analysis of the issues
coupled with seeking to understand
the other party helps lead to an effective bargaining session.
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TheMiddleStage
Once negotiations are fully under way, a wise approach is to
start with an issue in which there
is high investment on the part of all participants, where no
serious disagreements are present,
and in which a strong likelihood of agreement exists. Then,
parties should take turns
describing how they view the situation. A moderator or one
party can encourage participants
to express their side in enough detail to ensure that all involved
understand the individual's or
group's viewpoint. The negotiating parties should listen actively
to one another, ask
openended questions, and focus on collecting information. The
middle stage, as noted in Table
7.7, includes the processes of arguing, exploring, signaling, and
packaging.
Arguing
Negotiators more ef�iciently argue when both parties �irst
identify speci�ic issues to be
discussed. These issues should be framed in a nonjudgmental,
42. neutral manner whenever
possible. As issues of dispute are raised, both sides reveal
information that bene�its their
arguments and avoid revealing damaging information. Various
persuasion techniques are
employed, including silence, verifying information, and
recon�iguring arguments to best suit a
party's position (Goldman & Rojot, 2003). An example of using
silence includes waiting until
the other side makes an offer, which means, as many
salespeople will note, "the �irst person to
speak loses." Further, arguments may be recon�igured, such as
when one side says, "We can
afford to buy this," and the opposing side responds, "You can't
afford NOT to buy this," thereby
attempting to increase the value of what has been offered.
In the arguing phase, negotiators can use a variety of additional
techniques. Some attempt to
controltheagenda of the sales meeting by ensuring that only
relevant information that
pertains to the potential sale is discussed. Buyers may attempt
to control the agenda as well.
Either party may attempt to slice a deal by tabling issues on
which they cannot reach
agreement and instead focusing on smaller slices of the deal.
They may also attempt to split
thedifference when arriving at a �inal deal. Here, they would
focus on meeting halfway on
subjects such as price, delivery demands, and other issues
pertaining to the �inal agreement
(Baack, Harris, & Baack, 2012).
A key concept that drives negotiators in the arguing stages is
BATNA, which stands for Best
Alternative To a Negotiated Agreement. The BATNA concept
43. typically determines the lowest
acceptable value in the negotiation, because anything that is
more desirable than the best
outside alternative is likely to be accepted (Bazerman & Neale,
1992, pp. 67–68). Ideally,
BATNA is identi�ied as part of the preparation for a
negotiation, because it allows the person
bargaining to know when an offer is higher than one that would
lead to an impasse because it
is above that "�loor" level. A negotiator will often try to
discover the BATNA of the opposing
side in order to further expedite negotiation arguments.
Exploring
During the exploration stage, parties try to generate options for
settlement. Exploring involves reviewing the needs of parties
that relate to disputed areas and
looking for agreements in principle. Negotiators may consider
breaking a major issue into smaller, more manageable issues
and generating solutions for these
sub-issues. Exploration tactics include:
Expanding the pie so that bene�its are increased for all parties.
Alternating satisfaction so that each party has his or her
interests satis�ied but at different times.
Trading items that are valued differently by parties.
Looking for integrative or win-win options.
Using trial and error to generate multiple solutions.
Trying silent generation in which each individual develops
privately a list of options and then presents his or her ideas to
other negotiators.
Conducting position/counterposition option generation.
Separating generation of possible solutions from evaluation.
(adapted from: Lewicki, Barry, & Saunders, 2010)
As part of the exploration process, a negotiator, when asked for
44. a concession, will often request a tradeoff. The bargaining party
should be wary of any person
that attempts to rely on a "higher authority," such as "My boss
won't go for that offer," as a rationale for not meeting various
negotiation points. Also, effective
bargainers are aware of the "vise" tactic, in which the other side
continually uses phrases such as "You'll have to do better than
that" to put the squeeze on a
bargaining position.
As noted in the de�inition of negotiation, exploration occurs
when true give and take takes place. The two parties can defend
areas of greatest interest to their
sides while offering compromises in other areas. Exploration
can help identify hidden interests or agendas of the other side.
Bargaining parties can probe each
issue either one at a time or together to identify interests, needs,
and concerns of the principal participants in the dispute.
Exploration continues unless or until a
stalemate takes place.
Signaling
A signal can take one of several forms. One is recognition that
an impasse has been reached, such as when one side or a
mediator says, "We're not getting
anywhere." To handle an impasse, three approaches might be
used: (a) the issue might be set aside so that other issues can be
dealt with; (b) one of the
negotiating points might be changed; or (c) an outside party
might be brought in to seek a resolution.
Another type of signal notes that agreeable terms are in sight.
When a negotiator says something along the lines of "I think
we're getting close," the signal has
been sent. When a union negotiator responds, "I think our
members would ratify that proposal," a signal of potential
45. agreement has been offered.
Packaging
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Negotiationsaregenerallyclosedwithawritten
acknowledgement,butverbalacknowledgements,aswell
assymbolicgestures,mayoccuraswell.
Antonio_Diaz/iStock/Thinkstock
Once a signal has been sent that agreement is possible, a
package can be reached. Packaging is the part of the process
where negotiators assess �inal options for
settlement. This includes a review of the interests of the parties
involved and an analysis of how many interests can be met by
the available options. Part of
assessing options is that both sides evaluate the costs and
bene�its of each option. At that point, a party can revise
bargaining strategies when needed. In general,
the consensus is that one side's power increases when the other
side �irst commits. Therefore, both sides should be willing to
note agreement in order to move
toward a �inal arrangement.
TheEndingStage
The ending stage commences when the two sides agree to the
alternative or set of alternatives. An individual negotiating for
46. salary and bene�its reaches the
ending stage when all elements of the employment contract have
been agreed upon. A sale reaches the ending stage when the
terms, including price, delivery
schedule, �inancing, and other matters have been settled. An
agreement between a company and a union occurs when all
issues present in the bargaining session
have been resolved. Two elements of the ending stage are the
close and efforts to sustain the agreement.
Closing
The close includes the moment when the parties establish a
procedural means to �inalize the
agreement. It may take the form of a written memorandum or a
legal contract. The bargaining
arrangement should contain suf�icient detail to implement the
agreement and handle any
contingencies that might arise. Monitoring protocols may also
be established.
An individual negotiating employment with a company has
reached the close when a contract
or memo spells out the date employment will begin, along with
all of the details of the
agreement. In some circumstances, a verbal acceptance is all
that is necessary. Ordinarily,
however, it is better to put the agreement in writing.
A sale is closed when papers specifying the nature of the
purchase have been signed or
verbally agreed upon by both sides. For example, a bill of
lading speci�ies the contents of a
shipment of goods.
A close between two companies creating an arrangement such as
a merger or joint venture
47. occurs when the two sides have formally signed legal
documents creating the relationship. A
close between a union and a company takes place when the
bargaining contract has been
agreed upon and a vote by union members certi�ies the
contract, making it ready for a
signature from negotiators for both sides. Monitoring of union–
management agreements
normally includes speci�ied procedures for �iling grievances
regarding contract violations or
other matters of contention or disagreement.
A handshake provides a symbolic �inalization of an agreement.
When congratulations are
offered, both parties are able to relax and enjoy the
accomplishment of concluding an acceptable agreement.
Sustaining
Efforts to sustain an agreement include establishing monitoring
protocols. Standard methods used to sustain agreements include
follow-up phone calls, letters,
and other interactions. These contacts help reassure the other
side that the agreement is acceptable and that the terms will be
carried out. Monitoring in a sales
situation includes updates regarding when orders have been
shipped and received. A performance bond also helps guarantee
a project will be properly
completed, such as construction of a building or facility.
Con�lictandNegotiationAcrossCultures
Culture is a major in�luence during the negotiation process
(Adair, Okumura, & Brett, 2001) as well as during any con�lict
resolution process. When both buyer
and seller are from the same culture, negotiations can be fairly
straightforward. In cross-cultural negotiations, dif�iculties are
48. more likely to arise. Table 7.8
provides examples of some of the primary differences.
Table7.8Cross-culturalissuesinnegotiationandcon�lict
Factor Example
Time Arriving on time versus being late
Length of time needed to reach resolution
Time differences between countries
Language Aggressive versus deferent forms of speech
Degree of formality/use of names and titles
Use of slang Differences in meaning of slang terms
Gestures Differences in meaning of gestures
Rank Rank of individual assigned to the negotiation
Differences in rank of negotiators
Gender Treatment of women
Setting Place negotiation/con�lict resolution occurs
Legal difference Form of legal system in both countries
Religious differences Roles of religious values in both countries
Cultural differences Norms and social mores
Technology Use of technology
Trust/distrust of technology
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TheNegotiationProcessinIndia
Indian professionals discuss the typical negotiation process
in India.
CriticalThinkingQuestions
1. How is India's negotiation process similar to that of
the United States?
2. How is it different?
Infrastructure Presence or absence in countries involved
As Table 7.8 indicates, parties in negotiations and in con�lict
situations may have major differences in ways of thinking and
behaving, and these factors come
directly into play (Hamner, 1980). The use of words, ceremony,
and the relative status of the bargaining parties often affects
negotiations (Gulbro & Herbig,
1996). Some negotiators are unwilling to follow any prescribed
negotiating script or routine. In that context, what is left unsaid
may be as important as what is
actually said.
Consider a few basic complications. In one country, the use of
bribery may be standard
business practice, and bribes paid may be tax-deductible costs
of doing business. In another,
such a tactic would be illegal. Further, in many countries laws
regarding intellectual property
50. (patents, for example) vary widely. A bargaining process or
con�lict resolution interaction
might be disrupted by such legal discrepancies.
With regard to deference between parties, a person in an
international negotiation can hold
rank within one organization, but fail in con�lict resolution
when the individual is not respected
by other parties, for any reason, including the fact that the
person is simply an outsider.
Time perceptions can affect negotiations, as well. Some buyers
take longer than others during
the negotiation process. Buyers in Japan, for example, are
usually much slower to make
decisions than buyers in the United States. Attempting to instill
a speci�ic deadline, a popular
negotiation tactic, may be met with much hesitation in Japanese
culture.
In some countries, a popular negotiation tactic, bluf�ing,
involves threatening to walk away
from negotiations when the other side will not move from a
position or is not willing to
concede as much as is needed to close the deal. In other nations,
such a tactic would be highly
offensive. Effective salespeople utilize cultural intelligence and
cross-cultural competence to
arrive at an agreement that is satisfactory to both themselves
and the purchasing organization.
Cultures also vary in terms of willingness to argue or display
aggressiveness (Schmidt, 1987).
In many cultures, negotiations cannot begin until positive
relationships have �irst been formed,
and many times bargaining will be viewed as an unending
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SummaryandResources
ChapterSummary
Negotiation, con�lict, and con�lict resolution share many
common elements. People are at the heart of such similarities.
Many of the factors that lead to con�lict
and negotiation are similar, such as the distribution of resources
(pay, budgets), human resource decisions (hiring, �iring, task
assignments, performance
appraisals, transfers), goal disagreements, and other managerial
decisions of all sorts can either result in a more systematic and
organized negotiation or an
outright con�lict that calls for resolution.
Con�lict is a circumstance in which one party negatively
affects or seeks to negatively affect another party. Functional or
cooperative con�lict occurs when the
organization's interests are served in some way, such as through
improvement in performance or greater cooperation among
individuals or groups.
Dysfunctional con�lict takes the form of destructive activities
that hinder group or organizational performance. The four levels
of con�lict are intrapersonal or
intrapsychic con�lict, interpersonal con�lict, intragroup
con�lict, and intergroup con�lict.
The con�lict cycle begins with latent con�lict, which includes
all potential sources of con�lict at the individual or group
53. level. Felt con�lict occurs when people
know something is wrong but cannot pinpoint the source.
Perceived con�lict means that those near a con�lict know the
issues and the people involved, yet do not
feel discomfort from it. In open con�lict showdowns,
confrontations, and other outward signs of manifest con�lict
appear. Open con�lict requires some form of
resolution.
Con�lict resolution includes understanding the concerns of the
parties involved. The dual concerns model suggests a
combination of concerns about one side's
outcomes and concerns about the other side's outcomes. When
one side has little concern about the other's outcomes, the two
possible responses are
contending (competing) and inaction (avoiding). In
circumstances in which concern for the other's outcomes are
high, the two possible actions are yielding
(obliging) and problem solving (an integrating approach). When
moderate levels of concern for both personal and the other
side's outcomes are present, the
most common approach involves compromising.
The steps of the con�lict resolution process include identifying
the parties involved, identifying the issues, identifying the
positions of the parties, �inding the
bargaining zone, and making a decision. Decisions may be win-
lose, lose-lose (compromise), or win-win solutions.
Alternative dispute resolution attempts to incorporate more
user-friendly methods of dispute resolution, and seeks to avoid
adversarial approaches. It uses
methods such as facilitation, conciliation, peer review,
ombudsman, mediation, and arbitration. Desired outcomes of
con�lict resolution include agreement,
stronger relationships, and organizational learning.
54. Negotiation is a give-and-take decision-making process
involving interdependent parties with differing objectives or
outcome preferences. Distributive
negotiations involve a single issue and a zero-sum game in
which one side's gains become the other side's losses (win-lose).
Integrative negotiations resemble a
problem-solving agenda in which both sides try to obtain a
settlement that bene�its both—a win-win solution. Negotiations
take place between individuals and
companies, between companies, and between a company and an
outside group. During the preconditions to negotiation stage,
three areas to consider are the
psychological climate, the availability of resources, and the
characteristics of the bargaining issue.
The initial, middle, and ending stages require managerial
attention. The initial stage involves preparation and a quality
opening. The middle stage consists of
several phases: arguing, exploration, signaling, and packaging
potential solutions. The ending stage involves a close and the
attempt to sustain the agreement to
its full implementation. Preparation, negotiating tactics and
methods, and closing methods can make a bargaining session
more palatable for all concerned.
Special consideration should be given to international
negotiations. A cultural assimilator can be a valuable asset in
international bargaining situations.
CASESTUDY:Sarah'sDilemma
Sarah Norville loved her job as an advertising media buyer and
consultant. She worked for Impact Advertising, one of the 20
largest advertising agencies
in California. Her tenure began straight out of college after she
served an internship in the company. She knew many of the
55. employees in her department
and in other areas, and had tried hard to develop a reputation as
a professional, competent, and pleasant coworker.
Sarah took the position after turning down an offer from another
agency. The other offer included a higher salary and a
managerial title; however, she was
not convinced the company's future was as bright as she
expected Impact Advertising's would be. She believed that her
immediate supervisor, Rick
Watson, would adjust her salary when he learned of her value to
the agency.
After the �irst four months on the job, a casual dinner with a
coworker had a major impact. The coworker informed Sarah that
she was among the lowest-
paid new hires from the previous year, even though she had
more experience as the result of her internship. Impact
Advertising had tried to maintain a
secret pay policy—with little success. This incident was just
one more example.
Sarah approached Rick carefully. She explained her frustration
with a lower rate of pay than others with less experience. She
also noted that her work
during the �irst quarter had earned her the highest possible
ranking at her performance appraisal.
Rick responded, "Well, you did accept the offer we made. And
you have to remember, two of those hires also had taken some
graduate courses. That sort
of offsets experience."
Sarah replied, "I plan to start an MBA this summer. Just one
class. But over time, I plan to complete the entire program."
56. Rick smiled, "Well, when you do, I will guarantee we will make
this right. If you �inish your MBA, you will earn at least
$10,000 more than any of your
cohorts, if they're still here. Meanwhile, I can bump you up
some now." The salary he offered moved her within 85% of
what the top new hire was earning.
She had been at 75% of that �igure. She reluctantly accepted.
Sarah accelerated her MBA work, sacri�icing overtime and
some highly exciting projects in order to complete her course
work. It took her two years to
accomplish her goal of a graduate degree.
During that time, her salary increased by $5,000 annually.
When Sarah handed Rick her diploma, she expected to receive
the raise he had promised. Technically, what she was offered
did re�lect what he said. She
was to earn $10,000 more than the startingsalary of her highest-
paid coworker. Meanwhile, that coworker had also received a
$5,000 salary increase,
meaning that the differential between them was only $5,000.
Sarah asked for a meeting with Rick, a member of human
resources, and the agency's vice president. She prepared her
case, pointing out that she had
been systematically underpaid for two years, and that now the
company was again offering what she termed a "low-ball" pay
raise. She noted that even
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with her extra time in class her performance appraisals had been
among the highest in the company. She �inally asked, "Why
won't you guys just do the
right thing?" She knew that if they did not respond effectively,
other agencies would love to have her skills and educational
achievements.
CaseQuestions
1. Who are the parties involved in this negotiation?
2. What are the negotiation issues?
3. Explain how the processes of arguing, exploring, signaling,
and packaging might become part of the meeting between Sarah
and the others, if they
are willing to negotiate.
4. Use the con�lict model presented in this chapter to explain
the issues in this case.
5. Might Sarah's gender be an issue in this scenario? What other
potential ethical issues are involved?
ReviewQuestions
Clickoneachquestiontoseetheanswer.
De�inenegotiationandexplainthenatureofdistributiveandintegrati
venegotiations.
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ns/cover/books/Baack.3633.17.1/sections/cover/books/Baack.36
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Negotiation is a give-and-take decision-making process
involving interdependent parties with differing objectives or
outcome preferences. Distributive
58. negotiations involve a single issue and a zero-sum game in
which one side's gains become the other side's losses (winlose).
An integrative negotiation resembles
a problem-solving agenda in which both sides try to obtain a
settlement that bene�its both, or a win-win solution. Integrative
bargaining, in other words, is
similar to a "negotiation."
Whatthreepreconditionstobargainingshouldbeconsideredpriortoe
nteringanegotiation?
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ns/cover/books/Baack.3633.17.1/sections/cover/books/Baack.36
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The three areas to consider are the psychological climate, the
availability of resources, and the characteristics of the
bargaining issue.
Whattwoactivitiesareinvolvedintheinitialstageofnegotiation?
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In the initial stage, two primary activities, preparation and
opening, receive attention.
Whatarethefourelementsofthemiddlestageofnegotiation?
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The middle stage includes the processes of arguing, exploration,
signaling, and packaging.
Explainthetwoactivitiesthattakeplaceduringtheendingstageofane
gotiation.>
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Two elements of the ending stage are the close and efforts to
sustain the agreement. The close includes the moment when the
parties establish a procedural
means to �inalize the agreement. Efforts to sustain an
agreement include establishing monitoring protocols. Standard
methods used to sustain agreements
include follow-up phone calls, letters, and other interactions.
These contacts help reassure the other side that the agreement is
acceptable and that the terms will
be carried out.
De�inecon�lictandcompetitionandexplainthenatureoffunctional
anddysfunctionalcon�lict.
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ns/cover/books/Baack.3633.17.1/sections/cover/books/Baack.36
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Con�lict is a circumstance in which one party negatively
affects or seeks to negatively affect another party. Con�lict
contrasts with another concept, competition, a
condition in which all parties in an event or situation attempt to
do their best, with the person or group producing the most
desired outcome emerging as the
winner. Functional con�lict occurs when the organization's
interests are served in some way, such as improvement in
performance or greater cooperation among
individuals or groups. Functional con�lict is also called
constructive, or cooperative, con�lict. Dysfunctional con�lict
takes the form of destructive activities that
hinder group or organizational performance.
Whatfourlevelsofcon�lictoccur?
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The four levels of con�lict are intrapersonal (intrapsychic)
con�lict, interpersonal con�lict, intragroup con�lict, and
intergroup con�lict.
Whatarethestagesofcon�lictandthecon�lictcycle?
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The stages are latent con�lict, perceived con�lict, felt
con�lict, open con�lict, and the con�lict resolution process.
Whatcon�lictstylesareassociated,respectively,withlowconcernfo
rtheother'soutcomes,highconcernfortheother'soutcomes,andmode
rate
concernfortheother'soutcomesincon�lictresolution?
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When one side has little concern about the other's outcomes,
two con�lict styles may result: contending/competing and
inaction/avoiding. When concern for the
other party's outcome is high, two con�lict styles are possible:
yielding/accommodating and problem solving/ collaborating.
When there are moderate levels of
concern for the other party's outcome as well as one's own, the
compromising con�lict style emerges.
Whatstepsareinvolvedinthecon�lictresolutionprocess?
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The con�lict resolution process involves the steps of: identify
the parties involved, identify the issues, identify the positions
of the parties, �ind the bargaining
zone, and make a decision.
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AnalyticalExercises
1. Identify forms of distributive and integrative negotiations in
the following con�lict situations. (If one or the
other is not possible, explain why.)
individual vs. company
company vs. company
company vs. outside group
2. Provide examples of situations under which the preconditions
of negotiation cannot be met in the following
circumstances:
An individual �iles a grievance alleging unfair treatment by a
supervisor.
A company that has �iled for bankruptcy seeks to negotiate the
sale of merchandise to another
company.
A union negotiates with a company that plans to outsource most
jobs.
3. Explain how the processes of arguing, exploration, signaling,
and packaging occur in the following
negotiations:
An individual seeks a higher initial salary offer.
A supplier tries to raise prices of raw materials to a
manufacturer.
A company negotiator attempts to convince a government
of�icial that a lower penalty for unpaid taxes
67. should be imposed.
4. Provide an example of each stage of the con�lict cycle as it
applies to
an interpersonal con�lict based on incivility.
an intragroup con�lict based on differing goals of two key
members.
an intergroup con�lict based on two groups vying for of�ices
on the top �loor of a building.
5. In the dual concerns model, two key circumstances are (a)
one party has low concerns for the other's
outcomes and (b) one party has high concern for the other's
outcomes. Explain how these two circumstances
would affect the following thirdparty approaches:
facilitation
conciliation
peer review
an ombudsman
mediation
KeyTerms
Clickoneachkeytermtoseethede�inition.
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BATNA
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33.17.1/sections/co
Acronym for Best Alternative to a Negotiated Agreement, which
identi�ies the lowest acceptable value to a party in a
negotiation.
con�lict
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ns/cover/books/Baack.3633.17.1/sections/cover/books/Baack.36
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A circumstance in which one party negatively affects or seeks
to negatively affect another party.
con�lictcycle
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ns/cover/books/Baack.3633.17.1/sections/cover/books/Baack.36
33.17.1/sections/co
A model where con�lict moves from latent to perceived or felt
con�lict, to open con�lict, and �inally to resolution and
aftermath, which may in turn lead to new con�lict.
distributivenegotiation
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ns/cover/books/Baack.3633.17.1/sections/cover/books/Baack.36
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A negotiation in which a single issue and a zero-sum game
involve one side's gains becoming the other side's losses.
dysfunctionalcon�lict
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69. Con�lict that takes the form of destructive activities that hinder
group or organizational performance.
feltcon�lict
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ns/cover/books/Baack.3633.17.1/sections/cover/books/Baack.36
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What occurs when people know something is wrong but cannot
pinpoint the source.
functionalcon�lict
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Con�lict in which the organization's interests are served in
some way, such as improvement in performance or greater
cooperation among individuals or groups.
integrativenegotiation
(http://content.thuzelearning.com/books/Baack.3633.17.1/sectio
ns/cover/books/Baack.3633.17.1/sections/cover/books/Baack.36
33.17.1/sections/co
A problem-solving agenda in which both sides try to obtain a
settlement that bene�its both (a win-win solution).
intergroupcon�lict
(http://content.thuzelearning.com/books/Baack.3633.17.1/sectio
ns/cover/books/Baack.3633.17.1/sections/cover/books/Baack.36
33.17.1/sections/co
Con�lict that take place between various groups, such as
between departments within a company or between factions