1. Chapter 12 Conflict, Negotiation, Power, and Politics
Michael A. Hitt
C. Chet Miller
Adrienne Colella
Slides by Ralph R. Braithwaite

2. Michael Dell
Green Conflict
Do you think companies are becoming more aware of the impact of their businesses on the environment?
Can the goals of environmental and conservation groups be compatible with the goals of businesses? Why or why not?
What are the upside gains for businesses that become more environmentally friendly? What are the consequences if they don’t?
Exploring Behavior in Action

3. Knowledge Objectives
Explain how conflict can be either functional or dysfunctional, and distinguish among various types of conflict.
Discuss common causes of conflict.
Describe conflict escalation and the various outcomes of conflict.
Explain how people respond to conflict and under what circumstances each type of response is best.
Understand how organizations can manage conflict.
Describe the basic negotiation process, strategies, and tactics.
Explain why organizations must have power to function, and discuss how people gain power in organizations.
Define organizational politics and the tactics used to carry out political behavior.

4. Dysfunctional Conflict
The Nature of Conflict
Dysfunctional Conflict
Functional Conflict
Conflict
Conflict - The process in which one party perceives that its interests are being opposed or negatively affected by another party.
Dysfunctional conflict - Conflict that is detrimental to organizational goals and objectives.
Functional conflict - Conflict that is beneficial to organizational goals and objectives.

5. Effects on Individuals Effects on Interpersonal Relationships
Effects of Conflict
Effects on Individuals
Effects on Behavior
Effects on Interpersonal Relationships
Effects on Individuals
Anger
Hostility
Frustration
Stress
Guilt
Low job satisfaction
Embarrassment
Effects on Behavior
Reduced motivation and productivity
Avoidance of other party
Emotional venting
Threats
Aggression (psychological or physical)
Quitting
Absenteeism
Biased perceptions
Stereotyped thinking
Increased commitment to one’s position
Demonizing others
Effects on Interpersonal Relationships
Distrust
Misunderstandings
Inability to see others’ perspectives
Questioning of others’ intentions
Changed attitudes towards others
Changed amount of power
Changed quality of communication
Changed amount of communication
Adapted from Exhibit 12-1: Effects of Conflict

6. Functional Consequences
Improved Problem Solving
Facilitation of Change
Enhanced Morale and Cohesion
Potential Benefits of Conflict
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Stimulation of Creativity
Spontaneity in Communication

7. Types of Conflict Personal Conflict Substantive Conflict
Procedural Conflict
Personal conflict - Conflict that arises out of personal differences between people, such as differing goals, values, or personalities. Sometimes referred to as relationship conflict.
Substantive conflict - Conflict that involves work content, tasks, and goals. Sometimes referred to as task conflict.
Procedural conflict - Conflict that arises over responsibilities and how work should be completed. Sometimes referred to as process conflict.

8. Effects of Types of Conflict on Task Performance
Degree of Conflict
Task Performance
High
Low
Substantive Conflict
Personal Conflict
Procedural Conflict
Adapted from Exhibit 12-2: The Effects of Different Types of Conflict on Task Performance

9. Individual Characteristics
Causes of Conflict
Structural Factors
History
Communication
Conflict
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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.
Structural factors - Increased specialization; Interdependence among parties; Physical layout; Centralization versus decentralization
Communication – Too little or too much
Cognitive factors - Differing expectations; Perceptions of the other party
Individual characteristics – Personality; Value differences; Goals
History - Past performance; Previous interactions
Individual Characteristics
Cognitive Factors

10. Experiencing Strategic OB
Un-United
What were some of the conflicts that United was experiencing even before September 11, 2001?
What could Jim Goodwin, United’s CEO, have done differently?
How would you characterize the relationship between union and management? What could each side have done to more effectively deal with the issues the organization was experiencing?
Do you think United will survive?
Experiencing Strategic OB

11. Experiencing Strategic OB
Rosie vs. Donald
What was your reaction to the escalating conflict between Rosie O’Donnell and Donald Trump?
Was anything ever resolved between the two of them?
Do you agree that “each of the parties harmed the other but did equal harm to themselves”?
What has been your experience with escalating conflict?
Experiencing Strategic OB

12. Conflict Escalation
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Conflict escalation - Process whereby a conflict grows increasingly worse over time.
Escalation of conflict is more likely when
Cultural differences exist between the parties
The parties have a history of antagonism
The parties have insecure self-images
Status differences between parties are uncertain
Parties have strong ties to each other
The parties do not identify with one another
One or both parties has the goal of beating the other party

13. Conflict Outcomes High Win-Lose Win-Win Compromise Lose-Lose Lose-Win
Degree of Satisfaction of Party A’s Concern
Lose-Lose
Lose-Win
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Lose-Lose – neither party gets what was initially desired.
Win-Lose or Lose-Win – only one party’s concerns are satisfied and the other party’s concerns are not.
Compromise – both parties give up something in order to receive something else.
Win-Win – both parties get what they want.
Degree of Satisfaction of Party B’s Concern
Low
High
Adapted from Exhibit 12-3: Possible Conflict Outcomes

14. Responses to Conflict High Competing Collaborating Assertiveness
Compromising
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People respond to conflict in different ways. One person may try to win at all costs, whereas another person may try to ensure that both his or her own concerns and those of the other party are met. There are five potential responses to conflict, as well as situations in which each response is appropriate. Each response is described in terms of assertiveness and cooperativeness. Here, assertiveness refers to the extent to which a party tries to satisfy his or her own concerns. Cooperativeness refers to the extent to which a party attempts to satisfy the other party’s concerns.
Competing – An attempt to satisfy personal needs at the expense of the other person. Also called forcing or dominating. Often used in the form of formal authority, physical threats, manipulation, etc. You feel vindicated, but the other party feels defeated. Useful when quick decision action is needed, when an unpopular course of action is needed, when safety or rules are an issue, and when the other party will take advantage of noncompetitive behavior.
Accommodating – Opposite of competing. Satisfies the other party’s concerns while neglecting your own. Emphasis on preserving a friendly relationship at the expense of appraising issues. Can be used when one party believes it is impossible to win. Caution – the other person can take advantage of you.
Avoiding – Neglects the interests of both parties. Sidesteps the conflict or postpones a solution. Can be effective when allowing emotions to cool down or as a means of delaying a decision until effective solutions can be found. Used by managers who are not emotionally able to handle conflict. Problems don’t get resolved.
Compromising – Intermediate response while trying to bring partial satisfaction for both parties. Parties may seek expedient, not effective, solutions. Can result in game playing and encourages requests for more than what is needed. Each party gives up something but gets something in return.
Collaborating - Attempts to fully address the concerns of both parties. Does not seek to assign blame. Solution is satisfactory to both parties. Problem is likely to be resolved.
Avoiding
Accommodating
Low
Cooperativeness
High

15. Negotiation
A process by which parties with different preferences and interests attempt to agree on a solution.
Negotiation - A process by which parties with different preferences and interests attempt to agree on a solution. Furthermore, the parties are committed to achieving a peaceful means of dispute resolution.
Often requires parties to compromise, thus changing their original positions
Parties must bargain in good faith
Requires managers to build their skills in negotiation
Power underlies all conflict situations, and is critical to resolving the conflict

16. Negotiation Strategies
Distributive Bargaining
Integrative Bargaining
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Distributive Bargaining – a negotiation where one party’s goals are in direct conflict with the goals of another party.
Integrative Bargaining – a negotiation strategy where the nature of the problem permits a solution that is attractive to both parties – in other words, a win-win outcome.

17. Negotiation Tactics Distributive Tactics Integrative Tactics
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Distributive Tactics
Convince the other that breaking off negotiations would be costly for the other or for yourself.
Convince the other that you feel very committed to reaching your target outcome.
Prevent the other from making a firm commitment to an outcome close to the other’s target.
Allow the other to abandon his position without loss of face or other cost.
Convince the other that your own target outcome is fair.
Convince the other that their target outcome is unfair.
Convince the other that important third parties favor your own target outcome.
Use non-hostile humor to build positive affect.
Distract the other to impair the other’s ability to concentrate.
Integrative Tactics
Show the other that their concerns are important to you.
Show the other that your target outcome is too important to compromise.
Show the other that a win-win outcome is a possibility.
Demonstrate that you are flexible with respect to various solutions.
Insist on fair criteria for deciding among possible solutions.
Make collaborative norms salient.
Minimize use of behaviors or tactics that would cause negative emotions.
Provide an emotionally supportive climate.
Shield the other from emotional distractions.
Attitudinal Structuring Tactics
Use similar language.
Disassociate oneself from others not liked by the opponent.
Reward opponent’s behavior.
Express appreciation.
Remind opponent of role obligations.
Assist opponent in working through negative attitudes.
Return favors.
Fight the antagonism, not the antagonist.
Associate oneself with others the opponent likes.
Attitudinal Structuring Tactics
Adapted from Exhibit 12-4: Negotiation Tactics

18. The Negotiation Process
Preparation
BATNA
Closing the Deal
Determining the Negotiation Process
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Preparation. Prior to any 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 the least that the negotiator is willing to accept. Also, during the preparation stage, negotiators should engage in self- and opponent-analysis. It is important for negotiators to understand their own behavior during negotiations as well as that of the opponent. At this stage the following questions should be asked about one’s opponent:
What is the opponent’s position and power? Does the opponent have to confer with others to make concessions?
What does the opponent consider a “win”?
What is the history of the opponent’s negotiating style? Does he or she tend to focus on distributive strategies or rely on integrative strategies?
Determining the negotiation process. Determine the timeline, place, and structure of the negotiations. Also agreements should be made about confidentiality, the sharing of information, and how agreements will be approved. At this point it should also be clarified who will be present during the negotiation process.
Negotiating the agreement. During this stage the actual negotiation takes place and negotiation strategies and tactics are chosen and employed.
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.
Negotiating the Agreement

19. Costly Conflict Resolution
Managerial Advice
Costly Conflict Resolution
Salary negotiations – classic case of conflict
Do your homework
Determine your BATNA
Know what salary you want
Never make vague counteroffers
Avoid a hard stand – winner’s remorse
Be realistic
Be polite
Never inflate past salary or experience
Calculate benefits as part of the package
Don’t play “hard to get” when little bargaining power

20. Power
The ability of those who hold it to achieve outcomes they desire. The ability of one person to get another person to do something that he or she would not normally do. Persuasion is often the exercise of power.

21. Bases of Power Coercive Power Legitimate Power Reward Power
Referent Power
Expert Power
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Legitimate Power – Power derived from the position one holds in the organization; also known as formal authority.
Reward Power – Power resulting from the ability to provide others with desired outcomes.
Coercive Power – Power resulting from the ability to punish others.
Expert Power – Power resulting from special expertise or technical knowledge.
Referent Power – Power resulting from others’ desire to identify with a person – also known as charismatic power.

22. An Example of Power Eisner had a great deal of legitimate power.
Michael Eisner
An Example of Power
Eisner had a great deal of legitimate power.
Eisner lavished attention on board members, important investors, Disney family members, and others.
Eisner limited access to and controlled key information.
Eisner divided those who might oppose him and made himself indispensable.
Eisner restricted the power of others.
Did he use his power for the good of the organization?

23. Strategic Contingencies Model
People and organizational units gain power by being able to address the major problems and issues faced by the organization.
People need to identify strategic contingencies faced by an organization and gain control over them
Anyone who can help reduce uncertainties faced by the organization will gain power
People who are irreplaceable have power
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

24. Organizational Politics
Behavior that is directed toward furthering one’s own self-interests without concern for the interests or well-being of others
Goal of political behavior is to exert influence on others
Most managers and associates (70%) feel they have been harmed by political behavior of others
Fewer managers and associates (45%) feel they have gained power and influence by acting politically

25. Levels of Politics Individual Group
An associate who uses politics to suit his or her best interests – taking sole credit for a group project for example
Individual
Often in the form of coalitions – a group whose members act together to actively pursue a common interest
Group
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26. Political Tactics Rational Persuasion Consultation Personal Appeal
Ingratiation
Pressure
Inspirational Appeal
Political Tactics
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Rational persuasion - Use logical arguments or factual information to persuade targets that the persuader’s request will result in beneficial outcomes, ignoring potential disadvantages.
Consultation - Get the target to participate in the planning or execution of whatever the politician wants accomplished.
Personal appeal - Focus on the target’s loyalty or affection immediately prior to asking for his or her help in doing something.
Ingratiation - Make the target feel good by flattering or helping him or her.
Inspirational appeal - Appeal to the targets’ important values and ideals.
Exchange - Volunteer a favor in order to gain a favor in return.
Coalition - People with common interests join together to pursue their common interest.
Legitimizing - Make a request seem legitimate or official.
Pressure - Use threats, nagging, or demands to influence targets.
Legitimizing
Coalition
Exchange

27. Political Skill
The ability to effectively understand others at work and to use this knowledge to enhance one’s own objectives. People with strong political skills:
Find it easy to imagine themselves in others’ positions or see their points of view
Can understand situations, determine the best response and adjust their behavior accordingly
Develop large networks and are known by many people
Easily gain cooperation of others
Make others feel at ease

28. The Strategic Lens
Can you describe a situation in which conflict was functional (i.e., had positive outcomes)? If so, in what ways was the conflict functional?
A strategic leader must use power in many actions that he or she takes. In what ways can he or she exercise this power to achieve positive outcomes?
How can knowledge of conflict, negotiations, power, and politics in organizations help you be more successful in your career? Please be specific.

29. Questions