BUSI 310 MIDTERM 1

What to prepare before negotiation

- a target price that is slightly beyond counter's reservation price (ambitious, but realistic) -A BATNA! Negotiation w/out a BATNA = begging -a clearly defined negotiation price that would still make this trade worthwhile. based on BATNA/outside factors

Why study teams?

- increasingly utilized in US organizations -important to be aware that teams can occasionally hamper performances! (ex: new pilot teams makes more mistakes)

When is diversity helpful?

-When the organizational culture is welcoming and encourages disagreement -When the task is exploratory (new/complex) rather than an exploitation task (implementing something already known)

How to RECIEVE feedback

-don't argue, but ask clarifying questions -digest feedback -recognize when feedback is consistent over time/different givers -Think about what you do and don't want to change, and how

How to develop your BATNA

-generate list of alternative options -improve some of the more promising actions -select best alternative option

How to GIVE feedback

-give pos feedback regularly -give neg feedback sporadically and privately -DONT sandwich pos/neg - seems dis-genuine -tailor message to person -detach person from problem -be specific

The positives of feedback

-important to be aware of strengths/weaknesses -can prevent/resolve conflicts -helps us improve!

Why is management important?

-people skills are attractive to recruiters -well-performing organizations understand what people want

How to use effectively use rewards

-set broad organizational goals untied to financial reward -keep focus on performance > quota -encourage symbolic rewards

The negatives of feedback

-some people are sensitive to certain issues -we tend to seek evidence that we are great, and are skeptical of contrary evidence (confirmation bias)

Rewards that work

-specific -neither too difficult nor too easy to obtain -ensure it encourages the DESIRED behavior

Choice Paralysis

-the more options you have, the more likely it is that you won't choose at all -More options increase expectations, thus those that choose experience greater rates of dissatisfaction and self-blame (large opportunity cost)

How should organizations use personality?

-there's no perfect composition, but should have a diverse employee-personality profile -can measure through personality tests, interviews, performance indicators

What is personality dependent on?

50% by genes and early socialization, but can change over time personality is RELATIVE and CONTEXT DEPENDENT (extrovert in one group can be an introvert in another)

Negotiation Tactics - Knowledge of other party's BATNA

=power -can you create value for the other party, relative to their BATNA? -Direct their attention to their own comparably low BATNA

Distributive Negotiation

A negotiation in which parties compete to get largest share of a fixed pie (one party's gain is the other party's loss)

What's the potential power of teams?

Access to MORE ideas, info, expertise, and perspectives

HOW MUCH task conflict is beneficial?

An optimal amount, as too much can spill into RELATIONSHIP CONFLICT, depending on the level of trust in the group (again, can prevent this by fostering psychological safety)

availability heuristic

Common information is more likely to be discussed

3 types of negotiation issues

DISTRIBUTIVE (conflicting interests, try to claim as much of the pie as possible) COMPATIBLE (corresponding interests, identify and settle on obvious option) (leverage compatibility by "conceding" something you want too) INTEGRATIVE (blend of conflicting/corresponding interests - trade on diff issues to maximize size of pie) (diffs don't equal conflict, slowly move towards cooperation)

How to reach pareto optimal solution

Differentiate between POSITIONS (what you're asking for - position negotiation elicits anger/ego, yields impasses or worse outcomes) and INTERESTS (why you're asking for it - uncover the other party's true interests by posing PACKAGE DEALS)

Authority

Expose your expertise/skills (people obey authority figures)

WHEN is task conflict beneficial?

For non-routine, complex tasks (ex: don't want task complex on assembly line)

What is a team?

Group of 2 or more individuals with a shared goal and interdependent behaviors

What is the consequence of agreement in teams? What is the solution?

Groups tend to settle on the first acceptable alternative rather than the best - Have people share ALL information before anyone votes ("if only HP knew what HP knows") -create a culture in which team members are open to alternative POVs (psychological safety). Do so by leading by example, rewarding contrarians, and pushing complacency -appoint devil's advocate -leaders should refrain from speaking first -reward different POVS,

Scarcity

Highlight unique benefits/exclusive info (what's rare is more attractive - limited time offer, "natural" talent, exclusive club)

3 Negotiation Benchmarks

Know yours and the other party's: -target price -BATNA (best alternative to a negotiated agreement) -Reservation price (lowest willing to go)

Consistency

Make people's commitments active, public, and voluntary (ex: WILL you please call > please call)

Personality Traits - The Big 5 (OCEAN)

Openness to experience Conscientiousness Extraversion Agreeableness Neuroticism

What's the implication of biases?

Our minds bias us towards imperfect individual-level decision making

Agreeableness

Placing a high value on getting along with others -Agreeable people prioritize relationship quality, but may prevent critical questions / seem spineless - Disagreeable people prioritize getting it right, but can seem rude

Conscientiousness

Preferring a structured life, goal-directed behavior -high conscientious people provide discipline in teams, but may come off as rigid -low conscientious people provide flexibility and creativity, but may come off as lazy/disorganized

Conformity / groupthink

Psychological pressures push people to act differently in groups than individually, tend to conform

How does personality interact with environmental pressures

Strong situational demands (ex: formal workplace), less personality shows Weak situations, more freedom to show personality

Openness to experience

The quality of being interested in new things, imaginative, and adventurous -high openness people push group to consider new ideas, but may seem impractical -low openness people emphasize proven ideas, but may seem conservative

Extraversion

The quality of deriving energy from being around others/ being dominant in groups -Extraverted people are good politicians, but may seem intense -Introverted people orient the group to work>play, but may seem antisocial

Detriment of Teams - Common Knowledge Effect

When info is distributed, groups tend to discuss the info that everyone knows, leaving much info withheld.

3 criteria for evaluating negotiation success

Wisdom- did negotiation PRODUCE a wise agreement (mutually beneficial)? Efficiency - was negotiation PROCESS cost effective in terms of resources (time)? Relationship Well-Being - did negotiation improve/not harm relationship?

Is management a science?

YES

Integrative negotiation

a negotiation approach in which the parties' goals are not seen as mutually exclusive, but the focus is on both sides achieving their objectives -seek to leverage all creative opps/expand the pie, leaving no resources on the table

Benefits of Package approach > sequential approach

allows both parties to signal their priorities, make tradeoffs, and display flexibility

Type 1 cognitive function / intuitive system / system 1

automatic, effortless, implicit, emotional

Choice architects

can take advantage of type 1 decision makers by designing an environment/context that subconsciously pushes them towards desired conclusion

Similarity bias

common info is perceived as more credible

Type 2 cognitive function / reflective system / system 2

conscious, logical, effortful (shift to type 2 thinking by considering other POVS / the opposite choice)

Pareto Efficient frontier / optimal solution

deals made inside curve are not the most efficient (squandered value), deals not possible outside curve

Drawback of diversity

diff perspectives can undermine performance due to a lack of cohesion and understanding

Benifits of Diversity

diff perspectives enhance performance because of diverse knowledge base

Task Conflict

disagreements about tasks/decisions

Zone of Possible Agreement (ZOPA)

exists between the most a buyer would pay and the least a seller would accept

Reasons for conformity

fear of conflict/humiliation/punishment need to belong (evolutionary reason) sense of reality shared w others

Scoring tools

flexible systems for assigning quantitative values to each option for each issue

After negotiation...

focusing on your TP (target point) maximizes negotiation outcomes, but focusing on your RP (reservation price) maximizes negotiation happiness

Reciprocity

give what you want to receive (people feel indebted)

conformity

individual members often agree w/the group even if they don't understand/agree w the decision or behaviour

Conformity is more likely when...

judgment public/widely shared the person is unsure, admires the group, or not in a position of power time is limited

Influence techniques in 12 angry men

lead w why you're resistant (allows others to respect your motives) foot in the door technique (start with small requests so more likely to agree to larger requests) anchoring technique (start big then minimize your request) frame your argument - use internal attributions (they're born liars) or external attributes (he's been kicked around) fundamental attribution error- tendency to overvalue internal attribution explanations for one's behavior and undervalue external attribution explanations don't present irrelevant info (dilution effect - 1 strong argument over 1 strong and 1 weak - people dont add arguments, they average them!) tailor your message (logic for broker, assertive w angry man) get allies (shifts the power dynamic)

WHY is task conflict beneficial?

leads to comprehensive info sharing, consideration of alternatives, and inspires creative solutions to bridge the difference

decision makers should avoid...

motivated errors (made out of self-interest), falling "in love" with one option, or not exploring different options

TYPES OF BIASES - Overconfidence

overconfidence clouds realistic decision making

Confirmation bias

people like having shared and validated opinions

When do rewards work?

rewards IMPROVE performance for tasks that are routine, simple, clear rewards UNDERMINE performance on complex tasks that require deep thinking / creativity

TYPES OF BIASES - Confirmation Bias

tendency to favor info that supports our motivations and failure to seek disconfirming evidence

TYPES OF BIASES - Inattentional blindness (tunnel vision)

the failure to notice stimuli when preoccupied with an attention-demanding task -In organizations, time pressures, limited access to info, financial incentives, and social incentives create tunnel vision

Neuroticism (emotional reacitivity)

the tendency to be affected by stress and emotion -neurotic people may seem sensitive -low neuroticism may seem detached

TYPES OF BIASES - Escalation of Commitment

the tendency to repeat a bad decision or allocate more resources to a failing course of action to avoid a sunk cost/save face -We are psychologically hard wired to hate losses -Reduce this bias by setting a prior limit, separate initial decision maker from decision evaluators, and focus on the alternatives rather than the loss

Influence - Liking

uncover similarities between you and other (we are more influenced by those we perceive to be in our "in group")

The problems with simple rewards

undermine intrinsic motivation work only in the short term (when rewards stops, as does behavior) (entitlement - when rewards are expected, less motivating), and can lead to tunnel vision (other goals outside what's being incentivized are neglected)

Being an effective leader means...

understanding yourself and others (what motivates you, who can you work with)

Social proof

use peer pressure when available (we look to behaviors of others to determine what's appropriate) ex: laugh tracks/auctions

What to do when in minority

vote privately, use unanimous rule, slow the decision process, question and seed doubt, challenge shared reality, resist group pressure

What to do when in majority

vote publicly, use majority rule, seek a quick decision process, maintain unity by emphasizing common goals/shared reality

Negativity bias

we pay more attention to negative info than positive info

Pluralistic Ignorance

when teams agree to actions no one wants because we assume the others want it

Sampling on the dependent variable (type of confirmation bias)

when you select cases on the basis of meeting a criteria and then use those cases as evidence for the criteria (ex: w/out larger context, can't make assumptions based on findings)

Personality is like left/right handedness because...

you have some control, but will never be as fluid/natural than with your dominant "hand"