Org Behavior Ch 12: Conflict, Negotiation, Power, and Politics

Cognitive Factors

Certain beliefs and attitudes can lead to conflict. Two such cognitive factors involve differing expectations and one party's perceptions of the other party.

Strategic Contingencies (Model of Power)

Individuals and organizational units can also obtain power by being able to address the strategic problems that an organization faces. This is referred to as the strategic contingencies model of power.90 For example, when an organization is in a highly innovative industry, where success depends on being able to develop new products, the research and development (R&D) department and its key people have a great deal of power. The R&D unit has the knowledge (human capital) critical for the success of the firm's strategy to produce innovations and compete effectively in its industry. Consider the pharmaceutical industry. Pharmaceutical firms must introduce valuable new drugs regularly, especially as their patents on current drugs expire. Without new drugs, their revenues will decrease, and the firms will eventually die. The knowledge and expertise needed to develop new drugs is very important to the company strategy. Thus, the R&D units in pharmaceutical firms often have significant power. Essentially, these units control resources that are valuable to the organization.91 Units or individuals may obtain power, then, by identifying the strategic contingencies faced by an organization and gaining control over them. For example, in the United Airlines situation discussed earlier in this chapter, management (which controls the financial resources) gained more power by arguing that financial difficulties were critical and could be solved only by the unions' agreement to salary and pension concessions. However, the unions (which control the human capital in some ways) gained power by highlighting the importance and sensitivity of operations. They did this through disruptive work slowdowns. The most immediate problem for the organization, then, was to get its flights running on schedule again. The strategy of operating flights on time and satisfying customers was negatively affected by the union's exercise of its power. Thus, the unions controlled the most important resources for the strategy and had more power at that point. If units or people are able to identify the contingencies important to the organization's strategy and performance and control them, they should be able to maintain their bases of power. They can then use that power to require the organization to act in ways that benefit them. Take, for example, an athletic department that brings a great deal of alumni money to its university. Because of its ability to provide the university with financial resources, the athletic department has power. The department then uses that power to demand that the university provide more resources to the athletic department. In so doing, the athletic department gains even more power. Strategic contingency power is related to dependency.92 Dependency occurs when a unit or person controls something that another unit/person wants or needs. For example, in the popular TV show The Sopranos, all the gangsters were dependent on Tony Soprano, the mob boss. Because Tony controlled all of the mob's "businesses" (such as phone-card fraud rings and truck-hijacking operations), the gangsters were able to make a living only if Tony allowed them to operate one of these businesses. Beyond dependency, a key source of power in the structural contingencies model is the ability to cope with uncertainty.93 Uncertainty creates threats for the organization. Anyone who can help reduce this uncertainty by addressing key issues will gain power. In the opening case, it was implied that environmental organizations have achieved greater power and influence with businesses. There are several reasons for this, including the uncertainties of tougher environmental regulations and the growing public concern with environmental issues. Environmental organizations gain power because they can help businesses deal with these uncertainties. Another source of power involves being irreplaceable.94 One of the power moves made by Michael Eisner at Disney was to avoid developing a succession plan. After all, if no one was prepared to replace him, the board would be unlikely to ask him to resign.95 In contrast, Jack Welch, the former CEO of General Electric, announced 10 years before stepping down that finding a successor was the most important job he had to do.96 Finally, strategic contingency power can result from controlling the decision process, either by setting parameters on the types of solutions that are acceptable or by controlling the range of alternatives to be considered.97 For example, consider a class project in which student project teams must choose a company to analyze. If a team member states that he knows what types of projects the professor prefers and what types of projects have received good grades in the past, he can gain a great deal of control over the group's decision making regarding the type of project on which they will work.

Differentiation

Organizations can add new can add new functional areas as they serve a more diverse public. Dividing up the work in this manner is referred to as __________. Effective organizations become more _______ as they grow larger or as their external environment becomes more complex.

History

Previous relationships between two parties can influence the likelihood of conflict in the future. Past performance and previous interactions are two such relationship factors.

Personality (Type A Personality)

The Type A personality trait has been linked to increased conflict. People with Type A personalites are competitive, aggressive, and impatient. One study found that managers with Type A personalties reported more conflict with suboridnates. Becuuse people with Type A personalities are more competitive, they are more liekly to perceive others as having competing goals, even when this is not the case.

An Example of Power

The use of different power bases is not mutually exclusive. Associates and managers can use multiple bases at one time. The past CEO of Disney, Michael Eisner, is an example of someone who drew power from a variety of sources.89 During the years of Eisner's reign at Disney (1984-2006), the entertainment giant went through a number of ups and downs. Owing to Eisner's efforts in his early years, the company's performance improved dramatically. In later years, Disney experienced a number of complex issues: hostile takeover threats; the acquisition of Miramax Studios and Capital Cities/ABC; conflict with Bob and Harvey Weinstein of Miramax; a successful alliance with Pixar Animation studios; the dissolution of the alliance with Pixar; the very public and contentious resignation of Jeffrey Katzenberg as president of Disney; constant battles with Disney family member Roy Disney; and the expensive hiring and resignation of Eisner's friend, Michael Ovitz. For a long time, Eisner was incredibly successful in maintaining power over Disney, despite opposition from shareholders, other Disney companies, the Disney family, and even his own executives. How did he do it? Numerous reports exist about Eisner's strategies for increasing and holding his power. First, Eisner had a great deal of legitimate power. He was both the chairman of the board of directors and the CEO. These positions allowed him to make managerial decisions while at the same time having the authority to evaluate those decisions. He also had the power to hire and fire executives and board members, almost guaranteeing that he was surrounded by people who supported him. This led to complaints by Eisner's detractors that he dominated the board by filling it with his own people, who often did not work in the best interests of other shareholders. A second way in which Eisner obtained power was by lavishing attention on board members, important investors (like Warren Buffett and Sid Bass), members of the Disney family, and even the widows of former executives. In this way, he was able to curry favor with important Disney stakeholders. Eisner was also a genius at using information. He wooed board members to support him by constantly supplying them with information. He stated, "If I filled them in, made them my partner, if things didn't go so well, the likelihood of, 'I told you so' and those kind of reactions would not exist." At the same time, he controlled communication between executives and board members so that any disagreements, important discussions, or decisions had to go through him. When Eisner wanted to fire Michael Ovitz only months after hiring him, he went through elaborate procedures, talking to board members without Ovitz's knowledge and spreading the word that Ovitz wasn't working out. Another way that Eisner maintained power was to divide those who might oppose him and to make himself indispensable. He encouraged and allowed rivalries between executives and board members to develop so that other important decision makers were unable to form a cohesive unit. He also refused to train or plan for who would succeed him in the chairman and CEO roles, thus making his departure a problem for Disney. 0 0 Finally, Eisner maintained power by restricting the power of others. One of the reasons that the Weinstein brothers wanted to separate Miramax from Disney was that Eisner tried to stop them from releasing the movie Fahrenheit 911, which was critical of the Bush administration. Ovitz's experiences seem to be parallel. According to Michael Ovitz, Eisner implied in the hiring process that the chief financial officer and the corporate operations chief would report to Ovitz. However, Ovitz soon learned at a dinner party that both of these men would report to Eisner. By March 2004, Disney shareholders had become highly dissatisfied. Led by Roy Disney, among others, they participated in a 43 percent no-confidence vote to oust Eisner as the chairman of the Disney board. One of the major factors leading to this vote was the $140 million severance pay package that Eisner gave to Ovitz after Ovitz had been at Disney for only 15 months. Shareholders argued that they had not been given enough information about this deal and that the cost was detrimental to the company. They believed that Disney board members had buckled under Eisner's pressure at shareholders' expense. By December 2005, Eisner had stepped down as chairman; however, he stated that he planned to remain as CEO of Disney until his retirement in 2006. It appears that Michael Eisner's use of power was sometimes inappropriate. This was a special concern because Eisner was both chairman and CEO of Disney. Thus, he already had significant legitimate power. Furthermore, his position also gave him reward power throughout the entire company. This entailed not only control of financial rewards but also the ability to give attention and information to those who valued inclusion. Because of his efforts in turning around Disney after he became CEO, many perceived him to have expert power. In addition, his prominent position afforded him referent power. His actions regarding Michael Ovitz suggest that he used coercive power as well. He fired Ovitz but only after conducting a negative campaign with members of the board of directors. He then gave Ovitz an exceptionally large severance pay package. It seems that Eisner may often have acted in his own best interests and not in the best interests of the company or its shareholders. This story perhaps suggests why Disney's performance suffered during the last years of Eisner's reign.

Personal Appeal

A personal appeal tactic often focuses on the target's loyalty or affection. For example, an associate may remind targets about how he has always supported their ideas and causes before asking them to support his idea.

Pressure

A pressure tactic involves threats, nagging, or demands as a means of influencing targets. For example, an associate who threatens to expose a target's secret if the target does not comply with her wishes is using pressure tactics.

Rational Persuasion

A rational persuasion tactic involves using logical arguments or factual information to persuade targets that the persuader's request will result in beneficial outcomes. For example, a sales associate who is the number-one seller may tell her boss all the benefits of switching to a purely commission-based compensation system while ignoring the potential disadvantages.

Communication

A common cause of dysfunctional conflict is poor communication, which can lead to misunderstandings and allow barriers to be erected. Probably the easiest way to prevent conflicts is to ensure good communication. Both too little and too much communication can lead to conflict. On the one hand, when there is too little communication, individuals do not know enough about each other's intentions, goals, or plans. Coordination becomes difficult, and misunderstandings are more likely to occur, which can lead to dysfunctional conflict. On the other hand, too much communication can also result in information overload and misunderstandings that cause conflict.

Consulation

A consultation tactic requires getting the target to participate in the planning or execution of whatever the politician wants accomplished. For example, a unit manager who wants to implement a specific strategy would consult associates and supervisors to gain their support for her plan. These consultations, though, may be quite cynical because the manager is not really interested in anyone's input.

Legitimizing

A legitimizing tactic involves making a request seem legitimate or official. For example, an associate who wants to complete a project in a certain manner will try to convince targets that this is "how management wants it done."

Avoiding

A party who exhibits an avoiding response neglects both his own concerns and those of the other party. An avoiding style may be necessary to allow emotions to cool down or as a means of delaying decisions until effective solutions can be found. IBM has avoided conflict by refusing to do business in countries that allow bribery of public officials.7

Competing

A party with a competing response attempts to win at the expense of the other party. Other names for this response include forcing and dominating. This style is useful when quick, decisive action is required, when an unpopular course of action must be taken, or when the other party would take advantage of noncompetitive behavior. For example, some countries have more lenient copyright laws than the United States, leading to a proliferation of imitative (knockoff) goods (such as fake Gucci purses, Adidas sneakers, and Rolex watches). The Calvin Klein Company used a competing conflict response in dealing with counterfeiters by establishing a worldwide network to investigate and take legal action against any organization counterfeiting its goods.70

Win-Win

A win-win situation occurs when both parties get what they want. Consider a situation in which a union bargains for increased pay, but management does not have the resources to increase pay. A win-win situation would occur if the union decided to accept specific productivity incentives. Increases in productivity would be accompanied by cash bonuses, thus increasing union members' pay to the levels they desired in the first place. Management would win because productivity (and consequently profit) would be expected to increase, which would in turn, cover the higher pay. Exhibit 12-3 depicts the five conflict outcomes.

Accommodating

An accommodating response is the opposite of a competitive style. A person using an accommodating response will forgo his own concerns so that the concerns of the other party can be met. For example, when someone has to work on a holiday, a particular associate may agree to be that person so that a co-worker can have the holiday off, in order to avoid conflict. An accommodating style may be used by a party who believes that he cannot win. It may also be useful when the issue is less important to one party than to the other. An individual or unit can adopt an accommodating style in return for a favor at a future time.

Ingratiation

An ingratiation tactic makes the target feel good by flattering or helping him. For example, a person may tell a colleague how valuable he is before asking for his support.

Inspirational Appeal

An inspirational appeal tactic is used to generate the enthusiasm and support of targets by appealing to their important values and ideals. For example, to obtain a target's support for her new web-based advertising plan, a person may appeal to an ecology-conscious target by explaining how electronic advertising saves trees as opposed to advertising in newspapers and magazines.

Personality (Dispositional Trust)

Another type of personality characteristic likely to influence how people experience and react to conflict is ___________. People who are low in trust are less likely to cooperate with others and less likely to try to find mutually beneficial solutions when conflict arises. When people are high in trust, they are more likely to concede to another party during conflicts, especially when it appears that the other party is upset or disappointed. High-trust individuals are more likely than others to become vulnerable because they have positive expectations about the motives of others.

Closing the Deal

At this stage, both parties should be quite clear about the conclusion of the negotiations and the particulars of the final agreement. Final agreements should be formalized and it should be made clear what each party's responsibility is in implementing the agreement. This process appears to be quite strict. However, it should be followed in any formal negotiation, ranging from negotiating one's pay increase to negotiating major merger and acquisition deals. In the Managerial Advice feature, we explore a common type of negotiation scenario—that of negotiating one's salary when taking a new job.

Negotiation (long-term relationship)

Apart from the issues directly under negotiation, there is often the long-term relationship between parties to consider. Most often during negotiations, the parties desire to remain friendly, trustful, and respectful of each other. For example, if a company was negotiating with an environmental group and the negotiations turned hostile, future relationships between the two groups would remain antagonistic. The company might do only what is absolutely required to meet the terms of negotiations and fail to develop new ways in which to protect the environment. The environmental group might then give only a weak endorsement to the company or refuse to work with it on environmental practices. The activities aimed at influencing the attitudes and relationships of the negotiating parties are referred to as attitudinal structuring.

Coalition

As discussed above, a coalition tactic is used when people with common interests join together to pursue their interests. For example, a coalition might be represented by ethnic and minority group members who band together to promote organizational diversity.

Increased Specialization

As organizations become larger and more diverse, they require more ___________ for effective operations. For example, smaller organizations may have general human resource managers who perform most or all of the human resource management functions, but larger organizations frequently have specialist for employment, labor relations, training, compensation, and affirmative action. This situations represents specializations within one function.

Conflict Escalation (and Outcomes)

As we have just seen, conflict has many causes, and they are often interrelated. For example, structural factors such as specialization are related to differences in goals and perceptions. The physical environment can cause conflict because it can interfere with communication. However a conflict begins, though, there are only a certain number of ways in which it can end. Fortunately, most cases of conflict are resolved, although not necessarily in a manner satisfactory to both parties (as in the earlier example, where two vice presidents were in conflict and one was fired by the CEO). In this section, we discuss conflict escalation and then focus on conflict outcomes.

Associates (negotiate)

Before closing this section on negotiation, it is important to point out that associates negotiate all the time in everyday work life. When we think of negotiations, we tend to think of formalized negotiations such as labor-management bargaining or merger-and-acquisition talks. However, negotiations take place whenever there are two or more parties who need to come to an agreement about a proposed course of action. Negotiation is just a means of trying to influence others to obtain outcomes that one desires. Thus, a major issue that underlies all negotiations as well as conflict situations is power.77 When two parties try to influence each other to attempt to maximize their own outcomes or attain a target outcome, the issue of power can be critical to resolving the conflict.

Centralization (Versus Decentralization)

Both centralization and decentralization of authority can cause conflict, but each causes a different form of conflict. At the level of the overall organizations, centralized authority means that one individual makes decisions for all units or that one higher unit makes decisions for all other units. Centralization can lessen dysfunctional conflict between units because all units are more likely to share the same goals and perspectives in a centralized system. However, conflict between individuals and their supervisions wihtin units or between individual units and the decision-making unit can arise because individuals and units have less control over their own work situations. A recent study of advertising agencies demonstrated these effects.

Goals

By definition, when individuals have competing or contrary goals, they often engage in conflict. In addition, certain aspects of individual goals make conflict more likely.51 Associates with lofty goals, rigid goals, or competitive goals are more likely to experience conflict, especially when they are strongly committed to the goals. Differences in goals can result from structural characteristics of the organization, such as increased specialization and interdependency. Recall our earlier example of the merit system for state-government employees. The merit system has the goal of ensuring that only qualified candidates are on the eligible-for-hire list and that all applicants are given a fair chance. A state agency wants qualified applicants for a job opening, but it also needs the position filled quickly so that the required work is done. It takes time to be fair to all and to be cautious about who is on the eligible list, which can delay getting the list to the state agency. Meanwhile, the agency may have a vacant job and a work backlog during the delay. In this case, differences in goals generate conflict. As the difference between the goals of two units becomes greater, the likelihood that conflict will occur increases. Organizations with structures that align individual and subgroup goals with those of the organization experience less conflict.52

Collaborating

Collaborating responses are attempts to fully meet the concerns of both parties. To use a collaborating response, the parties must work together to identify solutions in which both parties can win.72 This type of response is most likely to result in the win-win outcome described earlier. A collaborating response is best used when both parties' concerns are too important to ignore and when the objective is to learn and to gain commitment.

Compromising

Compromising responses are those in which a party tries to partially meet both his own concerns and those of the other party. A compromising response is best used when the parties are of relatively equal power, when temporary settlements to complex problems are required, when there is time pressure, and as a backup when collaboration (described next) is unsuccessful.

Dysfunctional Conflicts

Conflict that interferes with performance. Conflict can be dysfunctional for several reasons. First, conflict with important constituencies can create doubt about the organization's future performance in the minds of shareholders, causing stock prices to drop. Second, conflict can cause people to exercise their own individual power and engage in political behavior directed toward winning the battle at any cost rather than attaining broader organizational goals. Third, Conflict can have negative effects on interpersonal relationships. Finally, it takes time, resources, and emotional energy to deal with conflict, both on an interpersonal and and organizational level. Thus, resources that could be invested in achieving the organization's mission are used in efforts to address the conflict. Managers have rated conflict management as equal to or higher in importance than planning, communicating, motivating, and decision making.

Causes (of Dysfunctional Conflict within Organizations)

Conflict within organizations can be caused by many factors, which are frequently interrelated. To manage conflict effectively, managers should understand the causes of conflict and be able to diagnose them. Some of the more common causes are structural factors, communication factors, cognitive factors, individual characteristics, and the history of relations between the parties.

Decentralization

Decentralized authority means that each unit manager can make important decisions. Although decentralized authority can reduce conflict between superiors and subordinates within a unit, because subordinates are usually given more control over their work situations, it also creates the potential for more conflict between units because decisions made by one unit may conflict with decisions made by another. Futhermore, these decisions may reflect biased perceptions associated with the separate units. Shared cultural values and strong information flows can prevent these problems, but the potential for difficulties remains.

Determining (the negotiation process)

Determine the timeline, place, and structure of the negotiation. Also, agreements should be made about confidentiality, the sharing of information, and how agreements will be approved. At this point, who will be present during the negotiation process should be clarified.

Personality (differences)

Differences in personality across people can also facilitate conflict. People high in conscientiousness plan ahead, are organized, and desire feedback. While working on a project, a person high in conscientiousness wants to plan the project out, start early, set clear goals, and consistently seek feedback. Someone who is low in conscientiousness may see these actions as unnecessary, creating the potential for procedural conflict. Note that it is not the degree of conscientiousness per se that leads to conflict here; it is the difference in this trait between two people who must work together.

Negotiating the Agreement

During this stage the actual negotiation takes place and negotiation strategies and tactics are used.

Political Skill

Events from a few years ago at Morgan Stanley, the large financial services firm, illustrate the use of some of these political tactics.105 Over the five-year period ending in April 2005, Morgan Stanley stock lost one-third of its value, and the company was performing worse than its major competitors. In March 2005, a group of eight disgruntled Morgan Stanley ex-executives initiated a process intended to oust the CEO, Philip Purcell. Because they collectively owned only 1.1 percent of Morgan Stanley shares, they needed to convince other shareholders that Purcell should go.106 One action they took involved sending a letter to other shareholders blaming the company's poor performance solely on Purcell's leadership. Because there are likely to be many causes for an organization's poor performance, this statement can be seen as a legitimizing tactic because they state the cause of the problem with assumed expertise (substantial experience in Morgan Stanley and the industry). The ex-executives also personally courted shareholders, displaying ingratiation. Another tactic involved speaking passionately about the future of Morgan Stanley. This was done by Robert Scott, who was the ex-president and would-be-CEO of the company. Unfortunately for Scott, many investors were concerned only with short-term profit, so his inspirational appeal held little sway over investors. As one independent analyst noted, "People who hold those shares are going to want something concrete before they give up their votes"107; he suggested that the ex-executives use an exchange tactic instead. As of late April 2005, Purcell continued as CEO, but the walls were beginning to crumble. Many important Morgan Stanley executives and senior analysts were deserting for competitors, and a large shareholder publicly expressed support for the disgruntled former ex-executives. In June 2005, Purcell resigned.108 Research has examined the issue of who is better or more successful in behaving politically. One line of research has found that personality is related to the types of political tactics people are likely to use.109 For example, extraverts are likely to use inspirational appeals and ingratiation, whereas people high on conscientiousness are most likely to use rational appeals. Also, people have varying abilities to engage in political behavior. Some people are quite good at it, but others are more transparent in their actions, thus alerting the target to their intentions. Research has identified an individual difference known as political skill that affects the successful use of political tactics. Political skill is the ability to effectively understand others at work and to use this knowledge to enhance one's own objectives.110 People with strong political skills have the following qualities:111 They find it easy to imagine themselves in others' positions or take another's point of view. They can understand situations and determine the best response. They can adjust their behavior to fit the situation. They develop large networks and are known by a great many people. They can easily gain the cooperation of others. They make others feel at ease. Individuals with strong political skills can use them to the advantage of the organization (e.g., gaining the cooperation of diverse groups). Using political skills for one's own political gain, however, can harm the organization. Therefore, political skills can be positive, but only if used to achieve the appropriate goals.112

Formal Negotiation Process

For formal negotiations, there are generally four stages that a negotiation process should follow: 1. Preparation 2. Determining the Negotiaton Process 3. Negotiating the Agreement 4. Closing the Deal

Win-Lose (or Lose-Win)

In either of these outcome scenarios, one party's concerns are satisfied, whereas the other party's concerns are not. This type of outcome is obviously not advantageous for the losing party, and it often is not particularly advantageous for the organization. Such outcomes can be difficult to avoid, however. When conflicts involve "zero-sum," or distributive issues, one party can gain only at the expense of the other. This can cause each party to attempt to fully satisfy its concerns at the expense of the other party. For example, consider a situation in which two opposing parties are competing for a limited number of resources. The more of the resources one party obtains, the less of the resources the other party obtains. When United Airlines fought its unions following the 9/11 attacks on New York, distributive issues were at the heart of the conflict.67 Each dollar obtained by the unions for salaries and pension benefits represented a dollar out of the pocket of the airline.

Interdependency

In most organizations, work must be coordinated between/among units and between/among individuals inside those units. The more interdependent units or individuals are, the more the potential for dysfunctional conflict exists. A good example of interdepedence can be found within state governments. Many state employees work under what is referred to as a merit system. This system is designed to alleviate political patronage; employment is based on a person's merit. A human resource management agency based on the merit system is used to screen applicants for state employment and to maintain lists of those who are eligible for certain jobs within state government. When a state agency has a job opening, it must request a list of eligible applicants from the merit system. The state agency, then, depends on the merit system, and the merit system exists to serve state agencies. if the merit system is slow in responding to a request, conflict can occur.

Lose-Lose

In this conflict outcome, neither party gets what was initially desired. In situations involving verbal aggression, lose-lose outcomes are often seen. The aggressor often fails to obtain an initially desired goal such as a promotion or continued employment, and he also frequently fails to obtain true satisfaction through the aggressive behavior. The aggrieved sometimes fails to achieve desired peace in the workplace, and can suffer negative consequences beyond that.

Increasing Specializations (benefits)

Increasing specializations has many positive benefits, but it also creates a greater potential for dysfunctional conflict. Specialist frequently view issues from different perspectives. They also often differ with regard to time perspectives and goals. For example, within a human resource unit the training specialist may have different perspectives relative to the compensation specialists. Also, a research and development department often operates within a long-term time frame because developing a product and preparing it from manufacture often require several years. However, a production department operates within a much shorter time frame, perhaps a few weeks (the time required to produce the products for a given order.) Conflict can result when the research and development department is late in developing and testing product prototypes, thereby creating scheduling delays for the production department.

Individual Characteristics

Individual characteristics that may lead to conflict include personality factors, differences in the value placed on conflict, and differences in goals.

Previous Interactions

Individuals who have experienced conflict in the past are more likely to experience it in the future.56 Previous conflict can influence the probability of future conflict in several ways. First, the parties often engage in the same conflict-inducing behaviors. Second, the parties likely distrust one another. Third, they may expect conflict, and this expectation may become a self-fulfilling prophecy. Think of the old story of the warring Hatfield and McCoy families. These two families had been fighting so long that younger members of each family did not know what had caused the initial conflict. All they had learned was to engage in conflict with the other family. Later in the chapter we discuss the negotiation process, which is an illustration of how associates and managers attempt to resolve conflict. Negotiation situations are influenced by the negotiators' previous interactions. Research has shown that negotiators' history of negotiation in terms of the quality of deals they arranged influences how they negotiate in other situations—even if they are negotiating with a different person.57 Negotiators who have a history of not being able to reach a satisfactory conclusion during previous negotiations are much more likely to reach unfavorable solutions in future negotiations than those who have had a successful negotiation history.

Interdependency

Interdependeny can result from limited resources or from required coordination in the timing and sequencing of activities. All organizations have limited resources and attempt to find the most efficient way to divide the resources and accomplish tasks.

Negotiation Strategies

Negotiators typically emphasize one of two strategies.74 The distributive bargaining strategy involves a competing, win-lose approach. It tends to be used when one party's goals are in direct conflict with the goals of another party. For example, if a buyer and a supplier are negotiating over the price of a product, the higher the agreed-upon price, the bigger the win for the supplier and the bigger the loss for the buyer. On the other hand, the integrative bargaining strategy involves a collaborative, win-win approach. This strategy tends to be used when the nature of the problem permits a solution that is attractive to both parties. Sometimes what appears to be a distributive situation at the beginning can be turned into an integrative strategy by broadening the issues under consideration. For example, if the above buyer were to also offer the supplier bigger orders and offer to buy additional products in return for a lower price on the product under negotiation, then an integrative solution could be reached. The buyer would get a lower price; the supplier would get increased volume, an issue that it feels much more strongly about. Depending on what type of strategy a negotiator is using, different types of tactics are appropriate and likely to be effective.

Referent Power

People are said to have referent power when others are attracted to them or desire to be associated with them. For example, it has been found that executives who have prestigious reputations among their colleagues and shareholders have greater influence on strategic decision-making processes in their firms.87 Referent power is the most resilient type of power because it is difficult to lose once it has been achieved. In addition, referent power can be used to influence a wide range of behaviors.88

Legitimate Power

People derive legitimate power (or formal authority) from the positions they hold in the organization. Legitimate power is narrow in scope because it can be applied only to acts that are defined as legitimate by everyone involved. For example, after being elected to a second term in 2004, President George W. Bush replaced many of the cabinet members from his first term. This was an exercise in legitimate power because the president has the formal authority to choose his cabinet members. However, when Attorney General Alberto Gonzales fired many U.S. attorneys, he came under fire because he was viewed as not having the legitimate authority to do so, and his motives were questioned.84

Responses to Conflict

People respond to conflict in different ways. One person might try to win at all costs, whereas another person might try to ensure that both her own concerns and those of the other party are addressed. There are five potential responses to conflict, as well as situations in which each response is appropriate.68 Each of these responses is described in terms of assertiveness and cooperativeness.69 Here, assertiveness refers to the extent to which a party tries to satisfy his, her, or its own concerns. Cooperativeness refers to the extent to which a party attempts to satisfy the other party's concerns.

Differing Expectations

People sometimes differ in their expectations about jobs, careers, and managerial actions. A common example of such differences involves professional associates. (such as research scientists, accountants, or attorneys). Professional associates often perceive themselves as being loyal to their professions and define their careers as extending beyond a particular organization. In so doing, they focus on those activities valued by the profession, which the management of the organization does not necessarily value. This can lead to lower organizational loyalty and potentially to conflict between these associates and management. If the differences in expectations are great and conflict ensures, the associates may even leave the organization. Thus, managers must be aware of this potential problem and work to reduce differences in expectations.

Differences (Across people in the perceived value of conflict)

People vary in the degree to which they value conflict. Some people think conflict is necessary and helpful, whereas others avoid it at all costs. There are important cultural differences as well in the way people view conflict.48 People in Western cultures tend to view conflict as an inevitable and sometimes beneficial aspect of life. Those in some Asian cultures (such as Chinese) believe that conflict is bad and should be avoided.49 These value differences make it more difficult to resolve conflicts when the parties are from different cultures. Value differences are most likely to get in the way of conflict resolution when the parties have a high need for closure.50 That is, when people desire for there to be closure to a situation, they will resort to their strongest cultural norms to guide their decision making. So an American with a high need for closure might seek out solutions that put her at the best advantage for prevailing, whereas a Chinese associate with a high need for closure would focus on avoiding the conflict and maintaining harmony.

Coalitions

Political behavior can occur at several levels. At the individual level, it involves an associate or manager who uses politics to suit his best interests, such as an individual who attempts to take sole credit for a project that was jointly completed. Political behavior at the group level often takes place in the form of coalitions. Coalitions are groups whose members act in an integrated manner to actively pursue a common interest. For example, when a new CEO must be chosen for an organization, groups of shareholders may act together to influence the board of directors' choice of a particular successor. Politics can also occur at the organizational level, such as when particular organizations hire lobbyists who try to influence congresspersons' votes on issues important to that organization.103

Political Tactics

Political tactics can also be aimed at any target. Upward political influence refers to individual or group influence on someone in a superior position, such as a manager. Lateral politics refers to attempts to influence targets at the same hierarchical level. Finally, downward influence refers to attempts to influence those lower down in the hierarchy. What do politics look like in organizations? In other words, what do people do to engage in political behavior? A great deal of research has examined the political tactics used within or by organizations.104 These tactics include the following:

Bases (of Individual Power)

Power in organizations can come from many sources. John French and Bertram Raven developed one of the most commonly used typologies for describing the bases of power.83 It includes five categories: legitimate power (formal authority), reward power, coercive power, expert power, and referent power.

Preparation

Prior to the negotiation, each party outlines the specific goals he or she hopes to achieve. At this point, negotiators must determine their best alternative to a negotiated agreement (BATNA). This is crucial for identifying the least that the negotiator is willing to accept. Also, during the preparation stage, negotiators should engage in self-analysis and opponent analysis. It is important for negotiators to understand their own tendencies and behavior during negotiations as well as those of the other party. At this stage, the following questions should be asked about the other party: What is the other party's position and power? Must the other party confer with other people to make concessions? What does the other party consider a "win"? What is the history of the other party's negotiating style? Does she tend to focus on the distributive strategy or rely on the integrative strategy?

Personal Conflict

Refers to conflict that arises out of personal and relationship differences between people-- differing values, personal goals, personalities, and the like. Individuals involved in personal conflict often report disliking one another, making fun of one another, having problems with each other's personalities, or perceiving each other as enemies. Personal conflict is likely to result in poor performance. This form of conflict creates distrust, misunderstanding, strain, and suspicion, and reduces goodwill. As a result, associates have trouble focusing their attention fully on their job responsibilities and find it difficult to work together toward organizationally relevant goals.

Physical Layout

The ___________ of work environments can produce dysfunctional conflict through several mechanisms. Conflict can arise when associates must work too closely together. Associates sometimes work in small, crowded cubicles that do not allow for privacy or personal space-- a phenomenon sometimes termed the "Dilbertization effect" Associates in such environments experience a stressful type of interdependency. Because everyone is continuously in view and can be easily overhead when talking, even in private conversations, conflict can arise. Conflict is especially likely if associates are unaware of the effect their behavior is having on others around them. For example, someone with a loud phone voice can be particularly irritating to co-workers. Futhermore, such enviornments do not allow associates to handle sensitive matters in private, a situation that can further increase conflict. Overall, positive face-to-face collaboration that could ease conflict and generate synergies i snot necessariily facilitated.

Power

The concept of power is one of the most pervasive in the study of organizational behavior.78 Power is generally defined as the ability to achieve desired outcomes.79 Power can also be thought of as the ability of one person to get another person to do something.80 Thus, any time someone persuades another person to do something, he or she is exercising power. For example, a coach who requires players to do pushups is exercising power. An administrative assistant who has the boss change her schedule to accommodate an associate is also exercising power. Often, power is thought to be negative. However, little would be accomplished if power were not exercised on a regular basis.81 Whether or not the exercise of power is harmful depends on the intent of the person holding the power. A manager who exercises power to meet organizational goals is using power in a positive, productive way. In contrast, a manager who exercises power to promote personal interests, at the expense of others, is misusing power. Power exists on different levels. Individuals and organizational units can have power. For example, a student body president can have power to influence university policy. Powerful units such as academic departments that bring in a great deal of external money can also influence university policy, as can the alumni association. It is generally easy to identify people in an organization or social unit who have power.82 Think of an organization to which you belong, for example, and identify who has the power in that organization.

Perceptions (of the Other Party)

The perceptions that one party holds about another can set the stage for conflict. One person may perceive that another has extremely high goals and that these goals will interfere with their own goal attainment.

Negotiation

The resolution of conflict often requires negotiations between the conflicting parties. Negotiation is a process through which two or more parties with different preferences and interests attempt to agree on a solution through back-and-forth communication. Furthermore, the parties are committed to achieving a peaceful means of dispute resolution.73 In the resolution of conflict, the parties often engage in informal or formal bargaining that requires them to react using compromise, collaboration, accommodation, or competition. Although each party usually approaches negotiations with the intent to gain the most benefits for its side, for negotiations to be successful all parties must bargain in good faith. Managers should build their skills in negotiation because they will be called on to negotiate in many situations. The political skills explained later can be useful to managers in negotiations if they use them for the benefit of the organization to achieve a negotiated agreement whereby both or all parties gain benefit and agree to abide by the decision. Depending on the circumstances, a manager can serve as a mediator or an arbitrator in negotiations. A mediator acts as a neutral third party who facilitates a positive solution to the negotiations, whereas an arbitrator acts as a third party with the authority to require an agreement. In reality, managers often serve in both roles simultaneously, and require tact and strong interpersonal skills to achieve negotiated agreement in a conflict situation. The skills and means of negotiation depend on the negotiator's bargaining strategy.

Substantive Conflict

The second type of conflict, occurs over work content, tasks, and tasks goals. In essence, differing opinions exist for task-related issues. ____________ often lead to problems and poor performance, but it is possible for such conflicts to create positive outcomes, if managed correctly. More specifically, moderate levels of substantive conflict can actually increase performance. Even somewhat higher levels might lead to creative, positive outcomes if collaborative problem solving is emphasized. This seems most likely when personal conflict is low. In a recent study, substantive conflict was found to yield open discussions and strong decisions when personal conflict was low, but to yield rigidity and poor decisions when personal conflict was high.

Procedural Conflict

The third type of conflict, concerns how work should be completed. _____ occurs, for example, when students working together on a project disagree about who will work on which parts of the project or whether they should meet face to face or communicate by e-mail. Unresolved procedural conflict has been found to negatively affect performance. If individuals cannot decide who should be responsible for completing a task or how it should be done, there is little chance that they will accomplish their goals or even complete the project.

Conflict Outcomes

There are five ways in which conflict can end in terms of how the outcome satisfies each party's concerns, interests, or wishes: lose-lose, win-lose, lose-win, compromise, and win-win.

Types of Conflict

Three types of conflict occur in the workplace: personal conflict, substantive conflict, and procedural conflict. Unresolved personal conflict and procedural conflict tend to be dysfunctional, but ongoing or periodic substantive conflict can prove constructive.

Exchange

Using an exchange tactic, a person volunteers a favor in order to gain a favor in return. This is exemplified by the old axiom, "I'll scratch your back if you'll scratch mine."

Organizational Politics

When conflict is present in organizations, associates are likely to engage in political behavior. Indeed, politics are a fact of life in most organizations.98 Organizational politics corresponds to behavior that is directed toward furthering one's own self-interests without concern for the interests or well-being of others.99 The goal of political behavior is to exert influence on others. One survey of top-level executives and human resource managers indicated that organizational politics are on the rise.100 Seventy percent of survey respondents said that they had been harmed by the political behavior of others and 45 percent said they had gained power and influence by acting politically. Further, a recent synthesis of past research showed that politics in an organization is significantly related to stress and counter-productive work behaviors.101 We now discuss the specifics of political behavior.102

Past Performance

When individuals or groups receive negative feedback because of poor past performance, they often perceive it as a threat.53 When a threat is perceived, individuals frequently attempt to deal with it by becoming more rigid, exerting more control over deviant group members and ideas, and restricting the flow of communication.54 When people become more rigid and communicate less, personal, substantive, and procedural issues can become heated. Thus, when past performance is poor, the chances for conflict are greater.5

Conflict

a process in which one party perceives that its interests are being opposed or negatively affected by another party.

Expert Power

arises from special expertise or technical knowledge that is valuable to others or the organization. Expert power is limited by the degree to which this expertise is irreplaceable. For example, an associate can gain power by becoming the only person in the unit who knows how to use certain software. However, if others learn to use the software, this person's power will be diminished.

Coercive Power

exists when one person believes that another person has the ability or perceived ability to punish people. Coercive power is usually considered a negative form of power; thus, its use should be limited. Overuse or inappropriate application of this type of power can produce unintended results. For example, associates might respond with negative or undesired behaviors. Like reward power, coercive power can be derived from informal as well as formal sources. For example, an associate who spreads negative gossip about others may have coercive power because others fear that he will spread negative gossip about them.85 Coercive power is limited by the fact that those being influenced must be highly dependent on the person wielding the power.86

Conflict Escalation

is the process whereby a conflict intensifies over time. Escalation is characterized by several features. Tactics become increasingly severe on both sides, and the number of issues grows. In addition, the parties become more and more deeply involved in the conflict. Eventually, as their goals shift from caring about their own welfare and outcomes to trying to harm the other party, they lose sight of their own self-interests.58 Many reasons have been proposed for conflict escalation. Some experts feel that escalation is inevitable unless direct measures are taken to resolve the conflict.59 Others believe that conflicts do not have to escalate. Rather, there are certain general conditions that make escalation more likely. These include the following: Cultural differences exist between the parties.60 The parties have a history of antagonism.61 The parties have insecure self-images.62 Status differences between the parties are uncertain.63 The parties have informal ties to one another.64 The parties do not identify with one another.65 One or both parties have the goal of escalating the conflict in order to beat the other party.66 Conflict escalation might involve overt expressions of aggression. This aspect of escalation may be one-sided, where one party becomes more hostile than the other(s). These issues are taken up in the next Experiencing Organizational Behavior feature.

Compromise

occurs when both parties give in to some degree on an issue or set of issues. Had management at United Airlines been willing to agree to somewhat less drastic pay cuts, then the unions in exchange could have moderated their demands in other strongly contested areas, such as pensions. Indeed, compromise was actually achieved several times during the travails at United. For example, a compromise resulted in employees' accepting more substantial pay cuts than they wanted while management agreed to more employee stock ownership than it wanted. Compromise can be a desirable solution to conflict.

Reward Power

results when one person has the ability or perceived ability to provide another with desired outcomes (i.e., the person controls or is believed to control desired resources). In the long run, reward power is limited by the person's actual ability to supply desired outcomes. For example, a supervisor may have power because she can assign pay raises to associates. However, if the company has a bad year, and the supervisor is not permitted to give pay raises, then she loses this source of power. Reward power is not limited to formal sources, such as the supervisor's power to give raises; it can also come from informal sources. For example, an administrative assistant who often controls his boss's schedule may then reward associates with access to the boss.

Natural Conflict (over salary)

the natural conflict over salary and its resolution are important to both the organization and the individual involved. Jane negotiated a higher salary before accepting the job offer, but Rob did not do so. Therefore, even though Rob and Jane had equal qualifications, they were compensated differently. Furthermore, assuming that they perform at equal levels over time and thus receive the same percentage pay increases, the gap between Jane's salary and Rob's will grow. Furthermore, although the organization may save almost $14,700 over a five-year period, it may also lose a productive associate. Rob is likely to be unhappy about the difference in pay if he discovers it (which is likely). As we explained in Chapter 6, in the discussion of equity theory, Rob will feel that he is not being treated equitably. Consequently, he might search for a job with another organization. Unfortunately, if it leads to conflict between Rob and the organization, he is likely to depart for a job elsewhere. In this case, the organization loses valuable human capital.