Managing Conflict and Negotiating Chapter Eleven Managing Conflict and Negotiating McGraw-Hill/Irwin Copyright © 2010 The McGraw-Hill Companies, Inc. All rights reserved.

After reading the material in this chapter, you should be able to: Define the term conflict, distinguish between functional and dysfunctional conflict, and identify three desired outcomes of conflict. Define personality conflicts, and explain how they should be managed. Discuss the role of in-group thinking in intergroup conflict, and explain what can be done to avoid cross-cultural conflict.

After reading the material in this chapter, you should be able to: Explain how managers can program functional conflict, and identify the five conflict handling styles. Identify and describe at least four alternative dispute resolution (ADR) techniques. Draw a distinction between distributive and integrative negotiation, and explain the concept of added-value negotiation.

Major Trends that Make Conflict Inevitable Constant change Greater employee diversity More teams (virtual and self-managed) Less face-to-face communication Global economy with increased cross-cultural dealings

A Modern View of Conflict process in which one party perceives its interests are being opposed or set back by another party

Functional versus Dysfunctional Conflict serves organization’s interests. Dysfunctional conflict threatens organization’s interests.

Antecedents of Conflict Incompatible personalities or value systems. Overlapping or unclear job boundaries. Competition for limited resources. Interdepartment/intergroup competition. Inadequate communication. Interdependent tasks. Organizational complexity

Antecedents of Conflict Unreasonable or unclear policies, standards, or rules. Unreasonable deadlines or extreme time pressure. Collective decision making Decision making by consensus. Unmet expectations. Unresolved or suppressed conflict.

Question? As a manager of a forty-five person department, Connie has always heard that there are certain situations that produce more conflict than others. She is interested in learning about these situations so she can carefully read early warnings and take appropriate actions. Which of the following is not an antecedent of conflict? Inadequate communication Organizational simplicity Decision making by consensus Unmet expectations The correct answer is “B” AACSB:  Group-individual dynamics Bloom's Taxonomy:  Application Difficulty:  Hard Page:  277

Why People Avoid Conflict Harm Rejection Loss of relationship Anger Being seen as selfish Saying the wrong thing Intimacy

Desired Outcomes of Conflict Agreement Stronger relationships Learning

Major Forms of Conflict Personality conflict interpersonal opposition driven by personal dislike or disagreement.

How to Deal With Personality Conflicts

Question? Having taken this OB class and learned about how they deal with personality conflict, what tip(s) would you offer to employees having a personality conflict? In resolving conflict, focus on personalities. Bring co-workers into the conflict so you have witnesses. Communicate directly with the other person to resolve the perceived conflict. Keep the direct supervisor out of the conflict loop, especially if the dysfunctional conflict persists. The correct answer is “C” AACSB:  Group-individual dynamics Bloom's Taxonomy:  Application Difficulty:  Hard Page:  281

Intergroup Conflict Intergroup conflict conflict among work groups, teams, and departments Too much cohesiveness can breed groupthink because a desire to get along pushes aside critical thinking

Handling Intergroup Conflict Contact hypothesis the more the members of different groups interact, the less intergroup conflict they will experience Managers should identify and root out specific negative linkages between groups

Question? Don is an Executive VP of a regional health-insurance company. He has noticed that the different departments do not work well together and seem more concerned with “protecting their turf” than in working to reach organizational goals. Don thinks that if he can create some group activities, the departments will have less conflict. This is called _________. Convex theory Concave hypothesis Contact hypothesis Intergroup theory The correct answer is “C” – contact hypothesis. See previous slide

Managing Intergroup Conflict: An Updated Contact Model Figure 11-1

How to Build Cross-Cultural Relationships Be a good listener Be sensitive to the needs of others Be cooperative, rather than overly competitive Advocate inclusive (participative) leadership Compromise rather than dominate Build rapport through conversations Be compassionate and understanding Avoid conflict by emphasizing harmony Nurture others (develop and mentor)

Programming Functional Conflict Programmed Conflict encourages different opinions without protecting management’s personal feelings.

Programming Functional Conflict Devil’s advocacy assigning someone the role of critic. Dialectic method fostering a debate of opposing viewpoints to better understand an issue.

Techniques for Stimulating Functional Conflict: Devil’s Advocacy Figure 11-2

Five Conflict Handling Styles Figure 11-3

Alternative Styles for Handling Dysfunctional Conflict Integrating interested parties confront the issue and cooperatively identify the problem, generate and weigh alternative solutions, and select a solution Appropriate for complex issues plagued by misunderstanding

Question? In handling conflict, Jorge believes that interested parties must confront the issue and cooperatively identify the problem, generate and weigh alternative solutions, and select a solution. Jorge can be described as advocating which conflict handling style? Obliging Integrating Dominating Avoiding The correct answer is “B” AACSB:  Group-individual dynamics Bloom's Taxonomy:  Application Difficulty:  Medium Page:  286

Alternative Styles for Handling Dysfunctional Conflict Obliging (Smoothing) involves playing down differences while emphasizing commonalities Appropriate when it is possible to get something in return

Alternative Styles for Handling Dysfunctional Conflict Dominating (Forcing) relies on formal authority to force compliance Appropriate when an unpopular solution must be implemented

Alternative Styles for Handling Dysfunctional Conflict Avoiding involves either passive withdrawal from the problem or active suppression of the issue Appropriate for trivial issues

Alternative Styles for Handling Dysfunctional Conflict Compromising give-and-take approach involves moderate concern for both self and others Appropriate when parties have opposite goals

Third Party Interventions: Alternative Dispute Resolution avoiding costly lawsuits by resolving conflicts informally or through mediation or arbitration

Alternative Dispute Resolution Facilitation Conciliation Peer review Ombudsman Mediation Arbitration

Question? Fredhandbag Photography has created a panel of trustworthy employees to decide on disputes at the company. This is called _________. Mediation Facilitation Conciliation Peer review The correct answer is “D” – peer review. See previous slide and p.289

Negotiating Negotiation Two types: give-and-take process between conflicting independent parties. Two types: Distributive Integrative

Question? The local one-hour-photo workers union was unhappy with the present contract. The process to work out a new contract is called ___________. Facilitation Negotiation Concession Arbitration The correct answer is “B” – negotiation. See previous slide.

Added-Value Negotiation cooperatively developing multiple-deal packages while building a long-term relationship

Steps in Added-Value Negotiation Clarify interests Identify options Design alternative deal packages Select a deal Perfect the deal

Seven Steps To Negotiating Your Salary Know the market rate Consider the economy Know your own value Be honest Don’t go first Consider benefits, too Look at the long term

Supplemental Slides Slides 39-43 contain extra non-text examples to integrate and enhance instructor lectures Slide 39: Conflict Monitoring Slide 40: Costs of Dysfunctional Conflict Slide 41: Why Conflict Matters Slide 42: Management in the Movies Jaws – “The Town Meeting” Slide 43: Video discussion slide

Conflict Monitoring Read an article on Conflict monitoring

Costs of Dysfunctional Conflict Fortune 500 senior executives spend 20 percent of their time in litigation activities. Typical managers spend up to 30 percent of their time dealing with conflict. The turnover costs for an employee are anywhere from between 75 percent and 150 percent of their annual salary. 16 percent of employees report conflict with a supervisor as the main reason for leaving their last job.

Why Conflict Matters “The best insurance against crossing the ethical divide is a roomful of skeptics.” “CEOs must actively encourage dissent among senior managers by creating decision-making processes, reporting relationships, and incentives that encourage opposing viewpoints…” “By advocating dissent, top executives can create a climate where wrongdoing will not go unchallenged.” Business Week, Special Report – The Crisis in Corporate Governance, May 6, 2002 Here are some quotes from an article in Business Week called the Crisis in Corporate Governance. It described issues where the facilitation of functional conflict can have an impact on several important factors. Ethics: “The best insurance against crossing the ethical divide is a roomful of skeptics.” When Sherron Watkins, the Enron whistleblower spoke at Mason (March 2007) she mentioned how the Board of Directors capitulated to requests to waive the corporate code of ethics. CEOs must actively encourage dissent among senior managers by creating decision-making processes, reporting relationships, and incentives that encourage opposing viewpoints… This is the idea that you don’t want to insulate yourself from alternative perspectives because you could be wrong or not make the best long-term decision “By advocating dissent, top executives can create a climate where wrongdoing will not go unchallenged.” This is a similar sentiment as the above two Now let’s look at an example of how not promoting dissent and functional conflict can have dire consequences… go to slide on Columbia Disaster Source: The crisis in corporate governance, 5/6/2002, BusinessWeek Special Report)

Management in the Movies Jaws – “The Town Meeting” In this scene, the Mayor is leading a town meeting with Chief Brody and the merchants. Questions How is the conflict of closing the beach handled? Which conflict management strategy does Chief Brody use? Which strategy does the mayor use? Relevant concepts Organizational conflict Interpersonal conflict Overlapping authority Negotiation Overview This clip is a good example of conflict that arises because of different agendas or beliefs. In the resort community of Amity a swimmer is found dead on the beach, allegedly killed by a shark. The police chief, Brody (Roy Scheider) wants to close the beaches, but the merchants are afraid that their businesses will suffer if the beaches are closed. They are reluctant to believe that another attack could occur. The mayor (Murray Hamilton) settles the conflict by compromising without discussing his solution with the chief. This is a good discussion point for conflict management strategies and their long term effectiveness. Discussion Questions How is the conflict of closing the beach handled? The mayor asks the merchants and the town council to meet together to discuss options to deal with the possibility of a killer shark. Which conflict management strategy does Chief Brody use? Chief Brody wants to use the competition strategy. He wants to keep the beach as safe as possible and thinks that closing them until the shark is found is the best way. He is not as concerned with the money tourists might spend as much as wanting to keep them safe. Which strategy does the mayor use? The mayor uses a compromise strategy by offering to close the beaches for only 24 hours. He seems to make this decision without good information or regard to swimmer’s safety. He allows the merchants’ cries for relief to affect his judgment.

Video: Toxic Coworkers Annoying coworkers can be found in every organization. How can you turn these situations around to have good outcomes result? Is the conflict being described here functional or dysfunctional? Why? Do you think there are there more annoying people today than in the past, or are we just more sensitive to our working environment? What different types of conflict did you pick up on being described in the video? Effectively dealing with the behaviors being described can help the “offender” recognize what they are doing and perhaps rectify their behavior. Strategies for dealing with the different types will vary as was described in the video. The conflict being described here is primarily dysfunctional in nature. Allowing the situation to continue and become more bothersome makes the conflict more and more dysfunctional. There probably aren’t any more annoying people today than any other time, but workers today are more willing to speak up if their working conditions are less than good. This would include annoying coworkers. The video primarily included descriptions of personality conflicts. However, they did mention the coworker who speaks a different language and then speaks loudly on the phone - this would be a form of cultural conflict.