OB Chapter 14; Conflict & Negotiation
A process that occurs when two or more parties decide how to allocate scarce resources. Negotiations in organizations affect relationship between negotiators and how they feel about themselves but are also one-shot economic terms.
General Approaches to Negotiation
Distributive bargaining and integrative bargaining.
Its identifying feature is that it operates under zero-sum conditions (the gain of one is at the expense of the other). It’s negotiating over who gets what share of a fixed pie (ie. labor-management negotiations over wages).
A set amount of goods or serves to be divvied up. When it’s fixed or the parties believe it is, they tend to bargain distributability.
Distrituvie Bargaining Points
There is a target point (defines what one would like to achieve) and a resistance point (marks lowest acceptable outcome where the party would break off negotiations rather than accept a less favorable settlement).
Distribute Bargaining Techniques
Making the first offer shows power, and aggressive first offers are best. Because anchoring bias causes people to fixate on initial information, it’s important.
Assumes that one or more of the possible settlements can create a win-win solution. For intraorganizational behavior, it’s preferable because it builds long-term relationships. There doesn’t have to be a loser.
How to Negotiate
Individuals bargaining in teams reach more integrative agreements because more ideas are generated. Putting more issues on the table helps. Focusing on the reasoning for something instead of economic value helps understanding. Compromising is bad because people settle for less and may not know what each wants (ie. orange juice vs. orange cake and not knowing where the oranges are going).
Preparation and planning, definition of ground rules, clarification and justification, bargaining and problem solving, and closure and implementation.
Preparation and Planning
Be sure to take into consideration whether you should pursue a more compromising or agressive style. Consider the goals of the negotiation. People need to feel good about the process.
Best alternative to negotiated agreement, which is the lowest value acceptable to you for a negotiated agreement. Knowing your own and the other party’s BANTA can help elicit a change even if a compromise can’t be reached.
Definition of Ground Rules
Parties change initial proposals and demands and individuals define the procedures of the negotiation itself, looking at things like time constraints, negotiation locations, topics, and more.
Clarification and Justification
Individuals explain, amplify, clarify, bolster, and justify their original demands. It’s not necessarily confrontational but it’s an opportunity to explain the importance of issues.
Bargaining and Problem Solving
The give-and-take in hashing out an agreement. Both parties make concessions here.
Closure and Implementation
A step for formalizing agreements and developing necessary procedures for implementing and monitoring it. A contract or handshake is normally the result.
Individual Differences in Negotiation Effectiveness
Personality, moods/emotions, culture, and gender.
Personality Traits in Negotiation
Personality and negotiation outcomes are weakly related. Overall agreeableness is weakly related to negotiation outcomes. Agreeableness is risky because there’s cooperative/compliant and warm/empathetic.
Moods/Emotions in Negotiation
Being angry induces concessions because the other negotiator doesn’t’ think the angry person will concede. Anger should only be expressed if you have power. Genuine anger is important, as is culture (East Asian anger is perceived as more serious). Disappointment makes people feel more guilty. Anxiety is effective in that anxious negotiators expect lower outcomes, respond to offers faster, and exit the bargaining process more quickly. Unpredictable emotions extract more concessions because the other party feels less in control.
Culture in Negotiations
People negotiate more effective within cultures. Choosing cross-cultural negotiators who are high on openness to experience, but also avoiding factors (time pressures) that inhibit learning to understand the other party. In a study between U.S. and Chinese negotiators, when a counterpart was angry, Chinese negotiators increased their use of distributive negotiating tactics (hard bargain) while U.S. caved.
Gender Differences in Negotiations
Men place a higher value on status, power, recognition, and economic outcomes, while women prefer compassion, altruism, and relationship outcomes. Women are less-assertive, less self-interested, and more accommodating. In a Carnegie Melon study, men took the 1st step in negotiating 57% of the time while women did 4%, and men made $4,000 more. Women have less confidence and are less likely to se ambiguous situations as opportunities. Women are more likely to be assertive when bargaining on someone else’s behalf.
Implications for Managers
Choose an authoritarian management style in emergencies. Seek integrative solutions when objective is to learn. Build trust by accommodating others as you see fit. Consider compromising when goals are important but not worth potential disruptions. Set aggressive negotiating goals and find creative ways to achieve objectives of both parties.