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by: Domenica Klocko II
Domenica Klocko II
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T. Chandler

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T. Chandler
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This 20 page Class Notes was uploaded by Domenica Klocko II on Tuesday October 13, 2015. The Class Notes belongs to MGT 3513 at Louisiana State University taught by T. Chandler in Fall. Since its upload, it has received 60 views. For similar materials see /class/223122/mgt-3513-louisiana-state-university in Business, management at Louisiana State University.


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Date Created: 10/13/15
OTEST 1 Understanding LaborManagement Conflict amp Resolution Focus is on the employment relationship The relationship is mixedmotive 0 There are elements of cooperation amp elements of conflict 0 The cooperation is required because labor employees and capital will have to come together in order to produce products and provide services 0 The combination of capital and labor are what drive the economy 0 The conflict comes into play when you have differences between what each side believes what each side thinks what its expected roles and responsibilities are not always in agreement I There s not always agreement about how profits should be distributed between capital and labon Here we ll be emphasizing what we do when conflict arises in employment Sources of workplace conflict 2 different perspectives of workplace conflict 0 HRM Perspective amp Industrial Relations Perspective 0 Both HRM and Industrial relations academics focus on employment relationship They focus on the same things but come at it from different perspectives o HRM PERSPECTIVE of conflict recognizes that conflict exists in the employment relationship I However this perspective holds that conflict can be eliminated I According to the HRM perspective conflict is a management problem caused by poor management practices The way to resolve conflict here is thru better policies and procedures implementation innovative workplace practices good management training etc Those are the things that will rid the org of conflict Scientific management is an example of this Fredrick Taylor wanted to use industrial engineering techniques to discover the one best way to perform jobs in an org and then to link worker productivity to economic incentives The belief of these people was that if you applied the scientific mgmt technique you could achieve the unity of interests between employees and management 0 Ee s would benefit because they get higher gains of the org 0 Mgmt would benefit would benefit from the profits from the improved efficiency Scientific management ignored the social element of work which led the development of human relations But it provides a good example of how management tries to identify ways to improve policies and procedures to eliminate conflict Any conflict that can t be eliminated thru improved management practices should be dealt with thru various types of mutual gains bargaining The HRM recognizes that negotiations may be necessary to deal with residual conflicts that can t be resolved I The belief is that if everything is done properly HRM says most conflict can be eliminated and what s left behind can be negotiated 0 Industrial Relations Perspective holds that conflict is a normal part of the employment relationship just as HRM said but it can t be eliminated The reason for the difference in perspective focuses on the cause I Says conflict is caused by power imbalances between employees and employers I Which sides holds the greater power Employers I Employees are much more dependent on employers for their livelihood than the opposite way I The single most important issue to most workers is MONEY Pay is the most important issue I There s a natural tension bewwteen employees desire for higher wages and benefits and the employers desire to contain costs I There s also conflict between ee s job security and HRM s desire for flexibility I Some people are order takers and some are order givers so there s always subordination I There s also competition between employees for better jobs people vying for promotions people fighting for scarce resources I According to the IRP the only way to deal with power imbalances effectively is thru government regulation legislation that gives rights to ee s unionization or thru ongoing negotiations that occur on an almost daily basis between ee s and management I Unlike HRM perspective IRP doesn t believe that conflict can ever be eliminated So despite those 3 possible solutions there will always be some sort of conflict Prospects for Workplace Harmony 0 Odds They re not very good 0 Even under the HRM perspective the org without conflict is what they re striving for but it s not likely to be achieved 0 There are lots of things that would interfere with workplace harmony I Greater interdependence I Work is more specialized so people rely on each other to get work done I Competition between employees for promotions and scarce resources I Dynamic nature of business relations Harmful Effects that come out of conflict Turnover dissatisfied with jobs can voice dissatisfaction or leave excessive absenteeism sabotage shirking when you give less than full effort on the job litigation unionization Workplace Bullying got a lot of attention in the last few years need for orgs to address this issue in the same way that sexual harassment has gotten attention 0 Workplace bullying consistent negative interpersonal behavior that s experienced by people at work I Research finds that this has adverse effects on people s health and productivity sometimes its subtle Workplace violence most extreme acting out in the workplace Conflict is anytime people have different goals and priorities and they need to work together so they have to come to a solution Dispute conflicts that are out in the open and there s disagreements about how they should be resolved Overview what organizations are doing to manage workplace conflict Basic elements of a dispute and dispute resolution 0 lnterests what it is that people really care about underlying needs or fears or concerns that have led them to make a demand of another party what is it they really want amp WHY do they want it why do they care about this issue I Reconciling interests can be very difficult because it requires a deeper understanding of the other party than is needed based on rights or power disputes You really have to know what s motivating the other side that s creating the conflict 0 Reconciling interests are done thru negotiating o Collective bargaining interest based form of dispute resolution 0 Mediation interests based form of dispute resolution mediator doesn t have the power to make the decision on the dispute 0 Problem solving negotiation 0 Rights focuses on some independent standard that has perceived fairness or legitimacy I Can be formal rights like in an employment contract or handbook I Not all rights are fomalized some are based on basic notions of fairness Based on equality or equity I People that focus on rights in employment disputes often find that they don t agree on what the legitimate right should be 0 Resolving disputes based on rights are arbitration arbitrator makes a rights based determination on who should prevail o Litigation another form of rights based conflict resolution 0 Power every dispute has a power based element to it as well I To resolve disputes based on power you must figure out which party is more powerful than the other I M is the ability to coerce someone to do something that they otherwise wouldn t do I When people are approaching a dispute from a power base they are either making threats that they ll impose costs to the other side or do acts that are imposing costs on the other side I The threat of a strike by a union is a power dispute I Power based negotiation the person in power makes the decision or power contests parties take actions to determine who will prevail At one time orgs used exclusively power to resolve conflicts in employment Managers held the power so when there was a power the manager said what was going to happen Overtime there became more recognition that rights based resolution should be used more frequently 60 s brought the passage of employment law that gave rise to rights based resolution More recently there s a focus on interest based resolution What approach is best 0 Must examine I Transaction costs involved in all dispute resolutions includes money time emotional costs I Satisfaction of the outcomes or process I Recurrence whether the dispute comes up again ideal to have a procedure to eliminate that dispute I Effects of relationship how the two sides feel about each other 0 lnterests vs rights or power I lnterest based dispute resolution is thought to be superior to the other two I lnterest based can have fairly high transaction costs not easy to do and takes a lot of time to figure out what people s underlying interests are but they re thought to be much lower than with the other 2 options I lnterest based dispute relation have winwin outcomes so satisfaction should be okay 0 Rights amp power based disputes result in winners and losers I Interest based outcomes lead to very little occurrence because underlying problems should be solved I Effects on relationships is good 0 Rights vs power I Rights based dispute resolution is better than power based dispute resolution 0 That s because transaction costs should be lower with rights based dispute resolution and there should be more satisfaction with the outcome and process in rights based Even if you lose the process has legitimacy in rights based so you should feel okay about losing 0 Goal interestsoriented dispute resolution system I The goal is to try to move from a distressed to an effective system I In the distressed system we use power most often then rights then interests I We re seeing a movement to using interests more often then rights then power to solve disputes I That doesn t mean that they should just have interests An integrated conflict dispute resolution system should integrate all 3 of these all 3 should be used but interests should be emphasized over the others 0 Drivers of that trend 5 C s I Compliance the recognition of all employment legislation that s out there makes companies more mindful of the need to have fair employment practices in place I Costs most important of these 5 c s lots of recognition of costs prices can push an org to change its conflict resolution practices I Crisis I Competition competing for talent I Culture to try to develop a culture in an org where you have commitment loyalty positive work environment Managing Conflict Thru Negotiation When you have conflict you could have litigation avoidance or other options that don t have to do with negotiation But negotiation is probably the best bet Negotiation Rationally you need to figure out how to make the best decisions you can in order to maximize your outcomes 0 Negotiating rationally focuses on decision making so that you may maximize your outcomes 0 That doesn t mean that you ll always win You may find yourself in situations where you won t get the better of the other side So it doesn t mean if you do these things you will win What you can control when you negotiate is the decision you make It s all about making the right decisions Preparing for Negotiations a key component of negotiation even simple negotiations require preparation 80 of your time should be spent preparing to negotiate and 20 should be spent at the negotiation table 0 It s the trend for people not to spend enough time on prep You don t have targets strengths and weaknesses evaluated for them or their opponent so they won t be able to articulate the strengths and attack the weaknesses They tend to wing it o Gathering and Assessing Information I Types of Conflict you need to consider the type of conflict you re involved in and the level of which that conflict occurs 0 Conflict any situation where two or more parties have separate and incompatible goals or situations 0 Goal conflict what tends to be the focus of negotiations because people negotiate when there s something tangible at stake they want to divide resources or affect others behaviors it is really the essence of the definition of conflict 2 parties with incompatible goals so their decided end states are not the same also known as scarce resource competition 0 Affective Conflict conflict that occurs when people have incompatible feelings or emotions the feelings or emotions that they have toward one another are incompatible 0 Cognitive Conflic occurs when people have ideas thoughts or beliefs that are incompatible sometimes known as consensus conflict it s just about different ideas or beliefs not about who gets what Affective conflict is related to relationships and that relationship will have implications on the negotiating strategy Cognitive conflict is always in play with goal conflict they have different goals because they have different beliefs about the world So when you try to find rationale about your goal you find that there are underlying affective and cognitive conflicts I Levels at which conflict occurs lntrapersonal conflict is a conflict people have internally over issues Interpersonal conflict that occurs between two individuals most of these examples deal with negotiation dyads 2 parties 0 These conflictsnegotiations is always present even if you have team or group negotiations because typically there is one chief spokesperson lntergroup conflict between two groups that are work units in an organization conflict between teams or between two divisions in an organization 0 There could conflict between 2 organizations Organizational captures several types of conflict that relate to the structure of an organization 0 Vertical conflict conflict in an org between people on different levels of the organization between employees and managers interdependence 0 Horizontal conflict conflict that occurs between individuals or groups at the same level of an organization Interdependence in orgs leads to conflict and can be on the same level Linestaff conflict is another type of org conflict line employees manage the 0 employees that produce what that the org uses staff provide technical advisories 0 Role conflict cluster of tasks that others expect a person to perform when doing theirjob occurs when a person perceives incompatible messages from role senders I lntrasender role conflict when the manager came to you and said you need to finish project X all you do is project X and the same manager then tells you he was wondering why the report of project Y wasn t completed I lntersender role conflict you get incompatible messages from different role senders you might be on the project team that s working on X and the head of the project team is trying to get you to do something and your manager is telling you to do something else You have to know what type of conflict it is because you need to know if you re up against one person are you representing a group lntergroup negotiations require negotiations with group members The organization component leads do different ways of negotiating with your colleague or boss These are not mutually exclusive Even group and team negotiations often break down into interpersonal discussion between group leaders Interpersonal will occur in vertical and horizontal and all types of role conflicts lntergroup conflicts have a horizontal aspect to them I Assess what will happen if agreement is not reached This requires you to assess you alternatives In the negotiations literature there s one alternative you should pay special attention to BATNA Best Alternative To a Negotiated Agreement the single most important component of the negotiation 0 Alternatives are a source of power in negotiations they give you leverage It s easy to tell you what the BATNA is my BATNA is subjective If we entered into the same negotiation with different parties we may view them differently Alternatives should be real not something you wish you could do or wish you had BATNA s are dynamic not static They can get better or worse over time You always have a BATNA but it is not always very good Not specifying a BATNA is a huge mistake It leads people to accept offers that may be worse than their alternatives BATNAs are closely related to resistance points or reservation prices If you re negotiating and you can get a deal that s better than your alternatives you should take it If you can t get a deal that s better than your alternatives then you walk away I Identify the issues in the negotiation What are the things you re trying to get resolution on when you meet with the other side lssues are the things that are on the table that you re actually trying to get agreement on In negotiations the more moving parts the better You don t want to bog down the negotiation with trivial matters but you should always try to find multiple issues to negotiate If you negotiate only one issue then the negotiation is purely distributive the thing I win you lose I Assess the importance of each issue Prioritize the issues prior to the start of the negotiations You can rank order the issues This allows you to give up less important to get back more important things I Assess underlying interests Issues and interests aren t the same thing lssues are things on the table and interests are why we care about those things Underlying interests are concerns motivations fears the why part of why I care about the negotiation Extremely important to collaborative bargaining not so much competitive bargaining I Determine goals Goal determination is focused on what you want from a negotiated settlement It requires that you specify 3 points along your bargaining range O 0 See diagram 1 0 Es is the buyer starting position Starting positions are the initial demands each makes of the other 0 Bt is the buyer s target Target is most closely aligned with a goal It s the best settlement that you can realistically hope to achieve not what you were hoping for 0 Br is the buyers resistance point It s the worse settlement that you re willing to accept before turning to your alternatives These are also called walkaway points You won t go beyond these points to get an agreement You ll walk away 0 Resistance points are set in relation to BATNA s 0 Seller also has the starting target and resistance point 0 What s important is whether or not the resistance points overlap The most the buyer is willing to spend is greater than the least the seller is willing to accept so there s opportunity for agreement That means bargaining surplus zone of possible agreement bargain of surplus zone 0 Why is it called a bargaining surplus Because a negotiated settlement can create value to them relative to their alternatives The buyer indicates any settlement in their surplus is better than their alternatives and same thing with the seller 0 Goal determination requires that you create a bargaining range 0 The target point is the best settlement you think you can achieve 0 The resistance point is closely associated with the BATNA the reservation price resistance point is closely related to your best alternative for a negotatied agreement All settlements that fall within your range satisfy your goal your goal is to get a better deal than your BATNA If you settle close to your resistance point you are only slightly better than your BATNA If you achieve a goal in your target you did well If you re got close to your starting point you really excelled Every settlement within your range is good for you relative to your alternative Your opponent also has a bargaining range It s the combination of the 2 ranges that set up the negotiation The area between the 2 resistance points is the zone for possiblepotential agreement your positive bargaining range Settlement will occur somewhere within this range in competitive bargaining This also represents surplus because it s the value that the negotiated agreement has relative to no agreement Both parties are better off with any settlement that occurs here than they are with no settlement The settlement will reflect the person with the most power in the negotiation I What happens if the resistance points don t overlap That s called a negative bargaining zone o If the resistance points don t overlap the most the buyer is willing to pay is less than the least the seller is willing to accept o If you went into negotiations like this you should walk away not change your resistance point These steps are not a linear progression You often have to go back and revisit some of them as part of the preparation process Everything thus far focuses on what you want from a negotiation But it s important that you think about what your opponent wants too It requires that you do everything that we ve just covered from the perspective of your opponent I What s your opponent s alternative to a negotiated agreement What is their BATNA I ID their issues that they will want to talk about I Combination of issues you bring and they bring are known as the bargaining mix I If you ve lD ed issues they will discuss figure out what is the most important to them second most important to them etc Start imagining tradeoffs I Start figuring out what underlying issues are especially if you re into collaborative bargaining I You should figure out what their bargaining range is likely to look like 0 Most important thing to figure out about opponents bargaining range is the opponent s resistance point If you can get close to the resistance point you ve maximized your surplus 0 Research finds that not a lot of people prepare from their own perspective and even worse from the opponents perspective 0 Conduct a self inventory this addresses the context of negotiations I Resources what resources do you have at your disposal Things that could be helpful to you as a negotiator 0 Data relevant to issues in negotiations other people that you can tap for information experience that you have that may be relevant to the issues you re negotiating consider what power sources are beneficial to you I Recurrence of negotiations do you think there will be a recurrence of negotiations with this party How likely are you to have to deal with this party in the future You negotiate differently with people that you ll see more of the than not I History bargaining history or experience history as a negotiator o If you don t have history with that person but you know others have dealt with them go to them to find out what to expect in your meeting with them I Trust assess the level of trust you have in the other side trust is really important in the collaborative strategy because with collaboration you have to share more information about the other side I Authority and constituents what kind of authority do you have in the org to reach agreements with the other party can you do whatever you want or do you need everything approved Are there people on the sidelines that are watching your negotiation constituents that are evaluating you If so how supportive are they likely to be Are they going to put any constraints on you I Do you want to develop an agenda for the negotiations to structure your discussion Does meeting location matter When are you going to meet Who is going to attend the meeting Handout Preparing for the Performance lnterview Chris Amon is the brand manager doing a performance interview with one of his subordinates Lee Petty The conflict we re exploring is only the conflict between Lee and Chris not between Lee and anyone else It s a latent conflict because it really hasn t surfaced yet It isn t out in the open yet it s not a dispute yet Types ofconfict Once you meet with Lee it is no longer latent it becomes a dispute open conflict that needs to be resolved there are clear cognitive elements to the conflict conflict that is based on ideas or beliefs There s a tangible outcome at stake from Chris perspective is Lee s change in behavior Tangible at stake for Lee is money So it s a goal conflict too 0 Cognitive conflict I One belief that is about disagreement is that Lee shouldn t be carrying the load for other departments I Lee shouldn t be given uninteresting assignments I Lee doesn t agree with attendance rules and gives his employees breaks Goal conflict 0 Might argue that it s affective but typically that s type of conflict when people don t like each other but 0 here we know that they get along quite well Chris thinks Lee is an outstanding performer Trust may have been violated Level of Conflict Interpersonal organizational vertical conflict because Chris is Lee s boss 0 There are also horizontal conflicts in play in this exercise between the 3 product managers but this conflict we re discussing is only between Chris and Lee BATNA what you as Chris can do without any cooperation from Lee best alternative to a negotiated agreement this is what you can have happen if Lee doesn t do anything doesn t comply or change behavior 0 Chris BATNA can be to fire him could be to demote him or write him an unfavorable performance evaluation or you could do nothing and just make some notes on his evaluation about his performance only Issues uncooperative behavior reluctance to take assignments bending of attendance rules de facto vacation in San Diego 0 Favoritism is not a negotiation issue because it can t be resolved in the negotiation between only Lee and Chris Interests lnterests are why you care about the issues stated in global terms 0 Maintain efficient profitable operation by retaining good employees and improving productivity restore order by sending message that rule breaking is not tolerated Goals Selfinventory 0 Resources as a manager you have lots of resources 0 Recurrence of negotiation certain 0 History good employee 0 Trust not very high 0 Authority and constituents you have legitimate power as a manager several constituents other product managers your superiors Negotiating strategy Lee Petty s Negotiating style Trying to resolve disputes based on powers rights interests To resolve based on power you go in and let Lee know who s boss tell him this is how it s going to be and if you don t do it this way there will be problems To resolve based on rights it s unfair that the your employees get to do something that the rest of the employees don t get to do ethics of vacation isn t correct vacation violates company policy and rights To resolve from an interest perspective you d look at Chris underlying interests and find out what Lee s underlying interests are and find a mutually acceptable solution 0 Select a strategy you ve gone thru the process of gathering info you ve also thought about the conflict from the other party s perspective now it s time to pick a strategy I Negotiating style assessment 0 Bases for determining default negotiating style you find a person s personality doesn t make them more or less able to get good negotiated outcomes but it does affect the negotiated style they use everyone has a default negotiating style O O 0 Social deals with how people respond to conflict situations I Engage these people jump right in to social situations including conflicts tend to be more extraverted view people as more trustworthy I Avoid these people aren t likely to jump in to social situations especially conflicts more introverted more independent and self sufficient don t like being dependent on other people Emotional deals with how people feel about conflicts I Give givers tend to be generous toward others in conflict situations exhibit a high concern for the other party s needs more cooperative given will often take care of the other party at their own expense I Take takers tend to be more competitive in nature they aggressively defend their turf make sure people don t take advantage of them try to get as much as they can out of conflict situations Cognitive deals with how people think about problems just in general I Accepting accepting person is someone who tends to think within the lines so they accept the conflict as it s presented to them don t question assumptions or challenge basic rules theyjust take the conflict as given often want to resolve conflicts thru the use of basic rules or past practice or seniority I Redefining more creative think outside the box don t take the situation the way it s presented to them try to reshape it challenge basic assumptions look for ways it can be redefined in order to create opportunities for settlement 0 People s negotiating behavior leads them to fall into categories 0 Style limited they always try to negotiate the situation the same way that s not the best way to be you need to be flexible in terms of the negotiating strategy Style followers they don t think strategically before hand the wait to see what the opponent is doing and go accordingly Style leaders these are people who think strategically about what negotiating style is best and try to use that to satisfy their objectives this is the approach you want going on proactive flexible o 5 styles are legitimate 3 styles are illegitimate o The 5 main negotiating styles legitimate or common 0 Competition distributive bargaining winlose bargaining people who have a competitive orientation as default see negotiations as winlose So they enter the conflict situation hoping to get the better of their opponent Most people see negotiations as this type lt s distributive in that there s a fixed pie of available resources and your goal is to get as much of those resources for yourself Collaboration integrative bargaining collaborative negotiators are interested in doing well and protecting their interests but they recognize the validity of their opponents and needs someone who negotiates collaboratively will try to do well themselves but also help the others side achieve their goals higher levels of trust are necessary and more information exchange Goal is to try to integrate your needs with those of your opponent involved in joint problem solving you want to grow the size of the pie 0 Compromise thought of as the split the difference approach to negotiating it s competitive in that you want to make sure you get something from your opponent you want to take something from the negotiation but you are short circuiting the competition by agreeing to some objective appearing rationale for determining the outcome considered to be a satisficing approach not trying to maximize the outcome and not really worried about increasing the size of the pie second best fall back approach for negotiations 0 Accommodation occurs when a person is willing to give into the other party s demands either because they don t care about the outcome too much or they care a whole lot about the relationship you don t want to push your needs too hard because you don t want to upset the opposing party it s a losing approach if you care about getting something for yourself The other side gets the bargaining surplus o WithdrawalAviodance this is a nonengagement approach to negotiating conflict exists demands have been made you decide that you aren t going to address it you will just wait for it to go away o If you compete and you re successful you will get the bargaining surplus o If you re a collaborator both sides will do well in regards of the bargaining surplus because you re going to create pie 0 Compromise the bargaining surplus gets split 0 Accommodation other side gets the surplus o Withdrawavoidance no one gets it if there s not active involvement by both sides there s no surplus whatever could have been gained by negotiated agreement was left on the table 0 Competition and collaboration are the only 2 that exhibit a high concern for the outcome 0 3 Illegitimate strategy illegitimate because it raises ethical questions or have ethical ambiguity can be used effectively though these are considered to be extreme versions of the competition 0 Con seeks to take advantage of the other side thru deception and the creation of misplaced trust when you look at some of the tactics of competitive bargaining you can see how they fit in the con approach you really want to know their BATNA and their resistance point so you trick them into giving you that o Borrow people secure concessions from their opponent by promising future concessions to their opponent borrow approach runs into ethical problems when you don t deliver 0 Rob one party tries to take advantage of the other through the use of power that the other party or some objective observer would view as unfair involves taking advantage of another party thru the use of power to such an extent that an objective observer would think you re being unfair drawing the line where power is good and not good is gray area 0 What does this all mean 0 Your default negotiating style is the style you re most comfortable with one you might resort to when you find yourself pressured in situations But it s not fixed just because it s your default doesn t mean you negotiate that way every time 0 You should look at the traits of your default negotiating style and think about what you would have to differently to adopt a different style I If you are a CON and you engage take and redefine you are not that far from being COLLABORATIVE all you have to do is engage give and redefine and easily be a collaborator I You can think about the person you will meet with before you meet to plan your style Emotional style not the strategy that you employ but the manner that you employ it The emotional style questionnaire we filled out in class req s us to say true or false on these statements You compute your score The negotiating style lD ed the strategy this emotional style one is the style of how you should package whatever style you re using Rational someone who believes that it is best not to display emotion when negotiating with other parties 0 They think you should try to maintain a poker face 0 People that have this view think showing emotion is a sign of weakness or that it will somehow expose you to be taken advantage of by the other side make you vulnerable to the other party 0 This is true to any kind of emotion negative or positive Positive person who believes that you catch more flies with honey they think that exhibiting a positive mood being friendly happy is an advantage in negotiating o If you display a positive mood they re more likely to make concessions to you so they say Negative sometimes referred to as the ranting negotiator o Believes that displaying negative emotions anger is to one s advantage in negotiating o Other relevant emotions like impatience frustration indignation sadness pouting etc Research finds that generally speaking one of these performs worse than others Negative will yield the worse results With regards to competitive negotiations the positive or rational approach yielded better outcomes 0 But there s a difference between being truly negative a real experienced emotional state like being mad and being strategically angry 0 Research finds that people who display positive emotion in negotiations are using more cooperative or collaborative strategies they tend to engage in more info exchange they generate more alternatives for possible outcomes they re better at innovative problem solving So which negotiating strategy would the negative emotional style be appropriate for Competitive or any of the illegitimate styles especially rob and con approaches Men vs Women do they negotiate differenty Yes Propensity to negotiate 0 Women are much less likely to initiate negotiations than are men 0 Women earn about 69 of what men earn at the same job After 1 year women will earn 80 of what men earn for the same job Then it settles again at 69 I Pay difference can be due to gender discrimination But some of it is due to women s lack off asking for more men are more inclined to get more when they re hired and after they re hired too Women tend to report grater anxiety than men about negotiations They view it as distasteful They don t want to go in and ask for something 0 Women are less likely to negotiate with men than women 0 o Negotiation strategy competition vs collaboration 0 Women are not comfortable with competition winlose approach They re more inclined to want to negotiate collaboratively Some attribute this as to the way men and women are socialized growing up men socialized to be more aggressive women socialized to be more appealing to people s needs 0 Research also finds that when men and women negotiate competitively women don t perform as well 0 Women make good collaborative negotiators until it comes to pie slicing o How others negotiate with women vs men 0 Research finds that negotiators tend to ask a significantly higher price from a female opponent than from a male 0 Likewise both genders male and female stipulate a higher resistance point when they negotiate with women than when they do with men 0 Their initial demands are higher and their resistance points are higher That s true with both genders o Principle vs agent 0 When you re negotiating as the principle you re negotiating for yourself 0 As an agent you re negotiating for someone else 0 Women are not very willing to negotiate for themselves not comfortable with the process Research finds that they re not very successful often times 0 When they negotiate as an agent they are more successful They don t feel selfish no feeling of being greedy or pushy they ll be very aggressive 0 So women need to be more assertive view more opportunities as negotiating opportunities Selecting the best strategy we know there is more than one way to negotiate how do you choose You pick the one that s best for you in the context that you re negotiating in See graph in notes 0 Relationship concerns address how important the relationship is to you do you really care about having a relationship with the other party Is it important that they trust you like you view you as friendly Or does it not matter at all 0 Usually depends on whether you think you ll have to deal with them in the future Outcome concerns how important are the outcomes in this negotiation for you Do you have to prevail on all the issues Is it really important or moderately or not important that you do well Low R and low 0 withdrawing or avoidance you don t care that they ll be mad at you and you don t care if you don t get anything out of the negotiation I High R and low 0 accommodation don t want to make your girlfriend mad they want something you care about the relationship and willing to lose on the outcome I Low R and High 0 compete willing to do anything that you have to do to beat them want all of the bargaining surplus and you don t care if it hurts the relationship I High R and high 0 collaboration hope your relationships maintain but you have high desire for outcome I Middle compromise 0 When you re proactive in figuring this out you re the style leader 0 It s not always possible once the negations begin that you go down the same path 0 General cumpaiisun 39 39 vs quot 39 39 strategies both of these exhibit a high concern for outcomes I Flow of information 0 Competitive approach tends to restrict information flows during negotiations You have to exchange some information in the form of proposals and counter proposals but you try not to tell the other party too much about what you want or why you want it belief that withholding info will give you advantage sometimes in competitive negotiation they use deception to get the opponent to make false conclusions 0 Collaborative bargaining and contrast is much different a lot more information exchange especially about interests For successful collaborative bargaining you must figure out why it is important to them they are interest base negotiators and require greater understanding the other side I Understanding the other 0 Competitive you don t need ot understand your opponent doesn t matter what their needs are you only need to know their weaknesses and exploit it 0 Collaborative the level you need is much greater understanding I Attention to commanlities and differences 0 Competitive negotiations tend to focus on differences the emphasis is on the gap between each party s demands 0 Collaborative there tends to be greater focus on commonalities shared interests or concerns want to define the negotiation as a shared problem to work together to resolve it I Focus on solutions 0 Competitive bargainers want solutions that clearly benefit you outcomes are zero sum good for you means bad for other side 0 Collaborative bargainers think that behavior is wrong the focus is on solutions that are good for both parties There s an effort to make sure that your interests are met and to work with the other side to help them meet their needs as well Power of prominence certain answers to questions have answers that are prominent if you get separated from someone and you use the power of prominence you ll end up at the same point In ormation Problems and Decision Biases Problems associated with information collection and use Seeing the other party s side in a negotiation they don t put themselves in the other party s shoes 0 You should ID all of your prep areas but do the same thing for your opponent too 0 People have a difficult time preparing for themselves in negotiation so it s no surprise that they have a hard time to prepare for the opponent leads to the winners curse o The Winner s curse occurs because negotiators routinely fail to consider their opponents position when preparing for negotiations I They do this because they re simplifying what s a complex task negotiating is complex You can simplify your preparations for negotiations by thinking about only your own side and ignoring your opponent so the reason negotiators fail to prepare for the opponent is because they re simplifying their complex task 0 What happens as a result of not preparing for your opponent is that negotiators often make offers that result in suboptimal agreements or losing agreements for you I lOW you get an agreement that isn t agreement for you that s why it s a winner s curse I If you don t have any info on the true value of an item you shouldn t make any offers 0 To avoid this you have got to put yourself in the other party s perspective Look at the negotiations from their side I What does this result mean to them and you I What info do you not possess that will determine whether the offers are good or not Information availability idea that people tend to rely too heavily on info that s easily available to them there are 2 ways that this happens 0 Ease of Retrievability there s evidence that people overestimate the probability of unlikely events if the memories associated with them are especially vivid and easy to recall I Managers who present info in colorful emotional and vivid ways are more effective I So if you want more influence present things in a more vivid way 0 Established search patterns this finds that people tend to have established search patterns for information that make that information more prominent in their decision making I So people over rely on the same usual sources of information I When you re negotiating if you always rely on the same old information then it may not be useful to you 0 Both of these things relate to prominence people tend to rely on information that s prominent in their minds Decision Biases The Mythical Fixed Pie 0 What is it idea that all negotiations are zerosum whatever is good to you as a negotiator is bad for your opponent and vice versa with this mindset 0 We know that most negotiations are not a fight over a fixed pie in fact most of the time negotiations involve multiple issues 0 It s usually the case that the parties will value those issues differently I If you clearly identify your priorities before the start of the negotiations you should be able to find effective tradeoffs effective tradeoffs are when you trade something of less value to get something of more value 0 The problem with people who have this perception believe that integrated outcomes aren t possible they don t think there s any opportunity to add value to negotiations so they don t look for it I This is a very common decision bias that people have with regard to negotiations some think it s reinforced with other aspects of society like competition in sports college admissions job market careers lots of people think all of the competitive situations generates this perception that everything in conflict ends up in winners and losers O O O 0 One study found that even when people want the same thing they often fail to recognize that fact Negotiate 8 issues For 2 issues they wanted the exact same outcome For 39 of the time the negotiators negotiated the outcome that both sides wanted on only one issue they were successful only 39 negotiating an outcome that both sides wanted on only one of the issues so the other issue they negotiated an outcome that wasn t good for either side relative to the best outcome for the other 60 of the people they failed to get the right outcome as well When they did negotiate the right outcome they usually didn t realize that the other side had done well they thought they had achieved the outcome they wanted because of their negotiating skill not because it was the same outcome both sides wanted It is the fixed pie perception that leads them to this They don t think that they all did well they think if they won they beat the other team This is negotiator overconfidence Related problems Negotiator overconfidence see above 0 They think they did well in negotiations if they won not that the other team may have won also but that they beat the opponent Reactiver devaluing opponent s concessions o Negotiators who have this fixed pie perception think that anything that their opponent offers them can t be good o If it was good they wouldn t have offered it o If you reactively devalue opponents concessions then you re much less likely to come to an agreement Whenever you have a single issue negotiation you have a situation that s almost always winlose when you enter into a negotiation most negotiations have some integrated potential some settlements make both parties better off Escalation of Commitment 0 0 Defined when people irrationally stay committed to an initial course of action even when it s not leading to a desired outcome Psychological factors leading to this tendency Biases in perception andjudgment once people choose a course of action stake out some position their perception is biased toward information that supports that position this is known as the confirmation trap you decide you will take a position and people look for information that confirms their decision to take that position look for information that confirms their decision and reaffirms that they ve made a good choice They tend to ignore anything that may suggest they ve made a mistake This affects people s judgment subsequent decisions they make confirm their earlier decisions Impression management people don t like to admit that they ve made mistakes they d rather be known as someone who was consistent in their behaviors and arguments research finds that consistent behavior is rewarded in organizations so if that s the case what s good for us individually and professionally to hid a mistake you re making is to be consistent in your argument and not back down Competitive irrationality there are times when a person s actions don t appear to be irrational so no specific action that they take is irrational but if you evaluate the behavior in terms of expected outcomes it was irrational if you look at any specific act and it seemed reasonable enough and then look at it in terms of outcomes and it looks irrational aka competitive spirals People get so caught up in the competition of winning and they lose sight of what the true value of outcome is to them Negotiator Overconfidence 0 Over confident about what I Their abilities as negotiators I Their ability to predict the outcome 0 They think that they re really skilled more skilled than opponent and they know where the outcome of the negotiation will be 0 Problems generated by overconfidence I It decreases the likelihood of agreements if you believe that you re more skilled negotiator than the other party then why would you make concessions You don t because you think it s a matter of time before you skill will win you I Likewise if you think you know what the outcome will be why would you open yourself up to creative solutions that don t fit into that expected outcome Close yourself off to other options less likely you ll get a winwin agreement 0 Relates to the mythical fixed pie Also relates to the winners curse they don t think about the other side and information in their power 0 o Overconfidence and needbased illusions I Illusion of superiority idea that you re more intelligent and more capable and more persuasive than your opponent you have an unrealistic positive view of yourself as a negotiator I Illusion of optimism people tend to underestimate the likelihood that they ll experience bad future events and overestimate the likelihood that they ll experience the good future events I Illusion of control people tend to believe that they have more control over future events than they really do this is true even for random outcomes like rolling dice 0 Much of the research says that the first thing you need to do to overcome the problems above is to be aware that they exist have some checks on yourself you should have trusted neutral disinterested party that you can bounce ideas off of so being aware and having a disinterested party lgnoring intangibles fairness and emotion whether you get a neg settlement from a party depends on whether they view the outcome as fair not whether they won but whether it is really fair 0 Fairness very important they don t need to win but they need to think that the outcome is fair I As an objective state fairness is not an objective state not everyone agrees on what constitutes a fair outcome or what constitutes a fair behavior decision rule I Rules of fair behavior there are certain rules that people have about fair behavior the implication of those rules of fair behavior lead to irrational outcomes sometimes 0 Emotion people used to not pay attention to emotion people often have different emotional styles that they use when they negotiate with others most of the research focuses on the impact of positive vs negative emotion I That research tends to suggest that positive emotion is more useful than negative emotion in negotiations reasons for that 0 With positive emotion it tends to generate positive feelings toward the other party which leads to more integrative collaborations party that encounters positive negotiator will be more flexible during negotiations more willing to make concessions engage in less hostile behavior be more trusting of the other side It also leads to more persistence when the negotiators run into obsticle s if there s positive emotion they will try to overcome those obstacles 0 Negative emotions tend to make negotiators more competitive they focus more on distributive aspect of negotiations 0 Negative emotions make it less probable that the negotiator will analyze the situation accurately and will be less effective in understanding the other party because they re not thinking as clearly leads to more frustration more blaming of the other side less of an ability to achieve collaborative outcomes People recognize this There s often a distinction made between strategic use ofemotion being strategically angry for example could work maybe and incidental affect when you know you re dealing with someone who is in a good mood and their mood is incidental to the situation has nothing to do with what you re trying to convey to them you just have to know they re in the good mood o If you know your parents are in a good mood you re more likely to ask for something their affective state is incidental to what you re trying to get from them Emotional states are also viewed differently depending on who has them angry women are viewed more negatively than an angry man men can exhibit angry outbursts and have a different view from others than women 0 Joint impact of fairness and emotion specifically how much they like the other person To define fairness In general when people are dealing with people they like they use equality When dealing with people they don t like the use a strategy that results in unequal outcome So the context matters there s a relationship between how we define fairness and who we re dealing with Your emotional state is one of the context in deciding what fairness rule you ll use Also 0 When the decision is made publically people tend to use equality as a decision rule 0 When it s private people prefer equity Based on equality distribution of outcomes without consideration of inputs just try to give people equal amounts Based on equity distribution of resources should be proportional to inputs Based on need things should be distributed relative to each party s need Research finds that although any of these may hold in general the most common definition for a fair outcome is an equal distribution of resources based on equality o Egocentric bias this means that how people define as fair and what they define as fair depends on what fairness definition benefits them most Handout on What Constitutes a Fair Outcome A People have different ideas about what constitutes a fair outcome Fairness is NOT objective it s subjective On test there will be 2 scenarios of conflict situations We will have 6 questions for each scenario Written part of test is worth 20 points and mc is 80 Small scantron Bargaining under the influence people know that drinking influences people s behavior and decision making Alcohol facilitates relationship building 0 Relieves stress 0 Lowers inhibitions and encourages camaraderie o Leads to more info exchange 0 Increases willingness to make concessions Hazards of bargaining under the influence 0 Leads to more aggressive behavior if you re negotiating while you ve been drinking tend to make more threats issue more insults o lmpairs cognition o Restricts the negotiating strategies they use aren t very complex 0 lncreases mistakes 0 Leads to a focus on irrelevant information o Leads to egocentric perceptions of fairness egocentric bias that people view fair as benefitting them 0 lnflates positive self perceptions negotiator overconfidence amp need based illusions Implementing a Competitive Negotiation Critical Factors 0 The bargaining zone 0 Sources of influence I BATNA Tactics good guybad guy highballlowball bogey the nibble chicken intimidation aggressive behavior Power coercive reward legitimate referent expert persuasiveness persistence personal integrity At the Bargaining Table 0 Don t tell or lie about your resistance point 0 Set high aspirations 0 Opening offers I Should you go first I Extreme positions 0 Opening stance 0 Plan your concessions I Pattern of concessions I Magnitude of concessions I Timing of concessions 0 Use objectiveappearing rationale to support your offers 0 Final offers and commitments 0 Closing the deal I Provide alternatives assume the close split the difference exploding offers sweeteners Negotiating rationally with a competitive strategy 0 Anchoring and adjustment I What is it I Avoiding problems I Advantages 0 Framing in negotiation I What is it I Prospect theory Results and drawbacks of a competitive strategy Moodle assignment personal conflict due 918 Define conflict ld the disputing parties type and level BATNA issues assess importance of each issue determine goals select strategy and other s strategy lnclass assignment with software company Conflict type and level 0 Type goal conflict because your preferred outcome based on sales projection are in conflict something tangible at stake told you need to come up with sales project it s also a cognitive conflict as well because you have quite different ideas about the numbers and process that s used in terms of sales projection meeting collaboration etc and it s affective conflict because it s clear that they don t like each other 0 Level rick and mary are negotiating as directors of respective groups so the level would be intergroup conflict that s horizontal Alternative BATNA o Mary s BATNA is to just send it up to Ann their boss to decide lssue or issues are that are being negotiated 0 Sales projection Underlying interests 0 Her interest is to protect her department from being blamed on a bad projection when she can t meet it Specify bargaining range resistance point target point starting point 0 Starting point is 5 million 0 Target is 85 million 0 Resistance point is 10 million mary says if everything goes well they can do as high as 10 beyond 10 they won t be able to reach Strategy Mary should use 0 Mary should think about what s important to her relationship concerns and outcome concerns If she plans on working there she will have to deal with Rick again so she should smooth out relationship problems You very much so care about the outcomes So collaborative strategy is necessary What is being expected strategy for Rick 0 Rick s expected strategy is competitive rick is an engager taker wants things the way they ve always been I He could be a con or rob There s a negative bargaining zone because mary s RP is 10 and ricks is 25 no overlap 0 There s not going to be an opportunity for a negotiated settlement So Mary will have to convince Rick that collaboration is in his interest because that s what Ann wants 0 Rick is under time pressure He needs to get it settled quickly 0 Mary also has the boss on her side Ann wants them to work together The only agreement they can do together is to give 2 figures a first year and long term goal


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