BUS403 Study Guide

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Study Guide Structure

In this study guide, the sections in each unit (1a., 1b., etc.) are the learning outcomes of that unit. 

Beneath each learning outcome are:

• questions for you to answer independently;
• a brief summary of the learning outcome topic; and
• and resources related to the learning outcome. 

At the end of each unit, there is also a list of suggested vocabulary words.

How to Use this Study Guide

1. Review the entire course by reading the learning outcome summaries and suggested resources.
2. Test your understanding of the course information by answering questions related to each unit learning outcome and defining and memorizing the vocabulary words at the end of each unit.

By clicking on the gear button on the top right of the screen, you can print the study guide. Then you can make notes, highlight, and underline as you work.

Through reviewing and completing the study guide, you should gain a deeper understanding of each learning outcome in the course and be better prepared for the final exam!

Unit 1: What Is Negotiation?

1a. Define the theory, processes, and practices of negotiation

• What is the importance of the four areas of negotiation: goals, strategy, issues, and planning?
• How can negotiation lead to a more effective outcome than a dispute or disagreement?

When two or more parties disagree, each side must decide whether the issue of disagreement is worth fighting for. If neither side feels the dispute is important or relevant, they may agree to disagree. Suppose at least one party feels strongly enough about the importance of the outcome or their relationship. In that case, they may try to convince the other party to participate in a more productive conversation that addresses each other's points of view (negotiation). If they pursue the issue, they should formulate a clear outcome (goal), decide on an approach (strategy) to convince the other party to agree with the terms, define obstacles (issues) that may preclude mutual agreement, and specify steps to take to obtain their desired outcome (planning).

One or more parties may decide they want to win at any cost, even at the other party's expense. On the other hand, they may decide that all parties can obtain a desirable outcome by working together for mutually agreed-upon goals (see the figure in the 1f section below). Whatever strategy the participants decide on, various issues must be resolved before implementation planning can begin.

To review, see Negotiations and What is Negotiation?.

1b. Describe the five phases of negotiation

• What are the five phases of negotiation, and how would you describe each phase?
• What is the definition of concession?
• Why is it important to gather information before beginning a negotiation?
• What should you do if the other party rejects your best offer?

The five traditional negotiation phases include:

1. investigation
2. determining your best alternative to a negotiated agreement (BATNA)
3. presentation
4. bargaining
5. closure

Thorough preparation is key to any successful negotiation and will help you avoid choosing an inferior or suboptimal alternative. During the bargaining phase of your negotiation, you may decide to make concessions to obtain a more desired goal.

During the first negotiation phase (investigation), each party should determine what they want to achieve from the negotiation (their goals) and what they are willing to concede or not concede during the bargaining phase to reach an agreement. Armed with this knowledge, they can make informed choices during the negotiation. A negotiator ignores this information-gathering phase at their peril.

During the second negotiation stage, consider your best alternatives to a negotiated agreement (BATNA) to help decide whether to accept an offer. You should brainstorm alternatives if the negotiation does not lead to a favorable outcome for you. During the presentation stage, you assemble all the information supporting your position in the negotiation. During the bargaining phase, each party discusses its goals and seeks an agreement. There is a back-and-forth process in which trade-offs or concessions are made to reach a mutually satisfying outcome.

During the fifth and final negotiation phase (closure), you may gain valuable insight if the other party rejects your best and final offer. Ask them what it would take to reach an agreement if you were to negotiate further. Your willingness to learn from your opponent may prompt them to re-open the door to negotiations you may have assumed were closed.

You interviewed for a job and anticipated receiving an offer, but they chose another candidate. The job seemed to be a dream job. What steps might be productive for your job search?

To review, see Negotiations.

1c. Describe how to incorporate problem-solving strategies in negotiations

• What are the distributive, integrative, and mixed-motive negotiation strategies?
• What are some strategies that can be used to avoid these obstacles?

During a distributive negotiation, each party determines the issue is more important than preserving or establishing a good relationship. Using the fixed-pie analogy, each party tries to get more of a divided pie. Ultimately, at least one party will not get everything they want – a win-lose or lose-lose outcome. Buying a car from a salesperson is an example of this type of negotiation. The buyer aims to get the most value for the least cost. The salesperson's goal is to make the most profit. Neither party is interested in becoming friends – they want to get the best deal.

During an integrative negotiation, the two parties care about the issue and want to preserve a long-standing relationship. They want a successful negotiation and the other party to believe they have met their goals. There may be areas for concessions and trade-offs, or they may incorporate creative ideas so each party achieves what they want. This is the only negotiation approach that can be a win-win for both parties.

Mixed motive negotiation uses aspects of distributive and integrative approaches. While the issues and relationships are important to consider the other party's interests, these issues may not be mutually compatible. Their objective is to add value to "expand the pie" so each party gets some of what they want, but they understand one or both parties may not get everything they want.

People negotiate to add benefits, claim something they value, or create an acceptable solution to a problem. Unfortunately, many people fail to express their underlying concerns, issues, or goals when they state their position and supporting arguments. Their failure to identify and communicate goals and objectives creates obstacles to successful outcomes. Businesses may need to employ a third party when the original participants cannot achieve an agreeable solution.

To review, see Problem-Solving and Decision-Making in Groups and Decision-Making in Groups.

1d. Interpret the dynamics of the group decision-making process

• What is groupthink, and how does it contribute to suboptimal decision-making?
• What are consensus and majority rule? What is the difference between them?
• Why do many people say that two heads are always better than one when making decisions?

Decision-making and problem-solving tools and models can help businesses solve problems systematically and rationally. While this course does not focus on decision-making tools, we benefit from diverse opinions and ideas when deciding our best alternative or course of action. We negotiate from a position of strength when we see all of our available options (including those of the other party) and understand where the other person is coming from, so we can make a decision that benefits everyone.

It is important to generate multiple solutions for each part of a multi-faceted problem during the decision-making process. Stopping the solution-generation process prematurely because an idea may seem popular among the group members who do not want to risk their acceptance as a member can lead to groupthink and suboptimal decision-making.

Eight negative characteristics of groupthink can prevent groups from choosing the best alternative:

1. The illusion of invulnerability
2. Collective rationalizations
3. An unquestioned belief in the group's inherent morality
4. Stereotyped views of outgroups
5. Direct pressure
6. Self-censorship
7. Illusions of unanimity
8. The emergence of self-appointed mind guards

During the problem-solving process, groups can decide among proposed solutions in many ways. The majority rule indicates a vote will be taken, and the group accepts the solution with the most votes. Consensus calls for group members to discuss possible solutions and weigh the pros and cons until they reach a general agreement.

Have you ever participated in group decision-making when you felt your voice was not being heard or louder members were "steamrolling" a decision before you and others could present your ideas? What type of decision-making would have helped you present your solutions?

To understand why "two heads may be better than one" in decision-making, note some pros and cons of individual versus group decision-making in this figure.

Advantages and Disadvantages of Different Levels of Decision Making

To review, see Problem-Solving and Decision-Making in Groups and Decision-Making in Groups.

1e. Explain the advantages of using SMART goals in negotiations

• What are the characteristics of SMART goals?
• What are the advantages of goal setting?

The advantage of goal setting is that group participants with a common goal know what is expected from them and can measure their progress. Effective goals are specific, measurable, achievable, realistic, and time-oriented (SMART):

1. Specific: Establishing the appropriate scope of goals is difficult; it is important to be as specific as possible to ensure successful implementation.
2. Measurable: The ability to measure and assess progress quantitatively is useful in goal setting because it provides motivational checkpoints and ensures progress stays on track.
3. Achievable: Ensuring goals are achievable is important to attaining goals. People tend to challenge themselves, but it is important to stay within the confines of ability.
4. Realistic: Realistic goal setting requires a grounded approach to identifying tangible, results-oriented objectives.
5. Time-oriented: Establishing deadlines is essential for goals, particularly from a motivational perspective. Knowing the completion time frame ensures the end product is useful and relevant to the business.

Structuring a project based on a series of smaller goals with closer deadlines (rather than one distant end goal) can be more motivating because they seem manageable and achievable. Managers should divide projects into immediate, specific, and realistic sub-goals to maximize motivation and output.

Effective goal setting relies on the group's ability to complete the goals on time. Have you ever procrastinated on an important assignment because the deadline was two months away? Would it have helped to set small daily or weekly goals so you could measure your progress toward your goal of completing a 30-page research paper?

To review, see Setting the Right Goals.

1f. Describe the steps of creating a negotiation strategy

• What is prenegotiation, and what four activities should negotiators accomplish during this stage?
• What questions should negotiators ask during the investigation phase of negotiation?
• What is an example of a competitive negotiation strategy?
• What is an example of a cooperative negotiation strategy?
• What are positional bargaining and interest-based bargaining?
• Can you explain the difference between positions and interests in the context of negotiation?
• What is the difference between a strategy and a tactic?
• What are some tactics parties use to support distributive, integrative, and mixed-motive negotiation strategies?

1g. Describe how to apply the concepts of game theory to negotiation

• What is a zero-sum game?
• How do a negotiator's expectations affect their attitude toward negotiating in a zero-sum game and whether to adopt a competitive or collaborative negotiation strategy?
• What are the psychological perspectives of the prisoner's dilemma?
• How does the Prisoner's Dilemma illustrate game theory?

1h. Compare distributive and integrative negotiation

• What is the definition of distributive and integrative negotiation?
• Would a competitive or collaborative strategy be more appropriate in a distributive negotiation? Why?
• Why is a competitive or collaborative strategy more appropriate for an integrative negotiation?
• What are the variable factors in a distributive negotiation: asking price, target price, reservation point, walk-away point, and alternative solution?
• How do these factors affect the zone of possible agreement (ZOPA)?
• What are some typical subjects for concession in bargaining?

During a distributive negotiation, your objective is to obtain the best terms from your negotiation, regardless of whether you and the seller become friends. You probably do not want to make any concessions because you are not interested in forming a relationship or becoming a future customer.

Consider these variables when buying a car. Let's assume price is a major factor in your decision-making. You have researched the alternative models. What do you want to pay, and what is the highest price you will pay? Would you pay a higher price if the car has low mileage, an extended warranty, or additional features? Consider the seller. What is the published selling price? What is the lowest price they will accept? At what point will you or the seller walk away from the negotiation?

When buying a car, the outcome is important to each party – the buyer wants to pay the least; the seller wants to receive the most. Neither side is interested in building or preserving a relationship. The buyer may have to pay more than they wanted, and the seller may fail to get their target price. Each can walk away from the transaction. Their approach will probably depend on whether other car dealers and customers are readily available.

Consider an employee who asks their employer for a raise. Employees who like their job may accept less pay or other compensation, such as more vacation, a better health insurance policy, a parking space, or other benefits. Unlike car purchases, this situation calls for a collaborative or problem-solving approach. Both parties want a satisfactory outcome for themselves and each other to maintain a good relationship. We call this approach an integrative negotiation.

During a distributive (win-lose) negotiation, one party gets what they want, but the other party relinquishes something they value. Examples of variable factors in negotiation include the asking price, target price, reservation points, walk-away points, and alternative solutions.

During a negotiation, the items negotiators consider subject to trade-off or concession may positively or negatively affect the variables above. Typical concessions include money, time, resources, responsibilities, and autonomy.

Unions bargain over contractual issues their members feel strongly about, such as pay raises, work hours, and benefits. To obtain these demands, they may offer concessions that appeal to management. What is an example of a trade-off or concession to get better healthcare coverage?

To review, see:

• Integrative Negotiation
• The Importance of Integrative Negotiation
• Collaborate to Negotiate

1i. Explain the advantages emotional intelligence brings to a negotiation

• What is emotional intelligence?
• How can emotions help or hinder successful negotiations?
• What are some advantages of critical thinking?

• achievable
• bargaining
• BATNA
• closure
• concession
• consensus
• distributive negotiation
• emotional intelligence
• groupthink
• integrative negotiation
• interest-based bargaining
• investigation
• majority rule
• measurable
• mixed-motive negotiation
• negotiation
• negotiation strategy
• positional bargaining
• postnegotiation
• prenegotiation
• presentation
• prisoner's dilemma
• realistic
• specific
• SMART goals
• strategy
• tactic
• time-oriented
• win-lose
• win-win
• zero-sum game

Unit 2: Managing Business Negotiations

2a. Describe and give examples of effective sales negotiations

• What is a sales negotiation?
• How might someone negotiate a salary increase from their employer using the five steps of negotiation?
• What items are open to negotiation when receiving a job offer that includes cash and non-cash components?

A sales negotiation is a discussion between a buyer and seller to make a sales deal. The parties address their concerns about the perceived value of the product or service, other available concessions or benefits, and the price the seller is willing to accept and the buyer is willing to pay. Research and communication are critical to a successful negotiation.

For example, during the first phase of salary negotiation (investigation), you should define your best alternative to a negotiated agreement (BATNA) by researching what other companies pay people who perform similar job functions in your area, so you can demand a comparable and reasonable salary. Determine your acceptable salary range: this bargaining range will guide your zone of possible agreement (ZOPA) with your employer.

The second phase is presentation. You should be able to communicate your past successes with appropriate evidence. Why are you a valuable employee who deserves a raise? What will you contribute to your company in the future? During Phase 1, you should have prepared a response to reservations your employer may raise, so you can explain why their concerns are unwarranted. During Phase 3 (bargaining), you may agree to accept certain concessions. Phase 4, where you and your employer "close the deal," is the final stage.

Most employers offer financial rewards and other types of compensation during salary negotiations. Cash components include your base salary, periodic bonuses, and sales commissions. Typical non-cash components include paid holidays, vacation, sick leave, health and dental insurance, stock options, retirement account contributions, tuition reimbursement, and parking or mass transport subsidies.

Employers offer potential employees additional incentives during the bargaining phase of salary negotiations. During collective bargaining, union representatives argue employers should provide certain cash and non-cash benefits when they negotiate on behalf of their union members.

To review, see Closing Starts at the Beginning and Principles of Persuasion.

2b. Compare approaches for negotiating with suppliers

• What are stakeholders?
• Why is trust such an important basis for sustainable profitability?

A stakeholder is a person or organization with a vested interest or concern about something. Stakeholders include stockholders, employees, and customers. James Stuart writes, "The best business runs on sustainable arrangements." Stakeholders should promote a win-win strategy to instill trust among the negotiating parties. He lists ten steps for successful business negotiation. Trust is a basis for sustainable profitability.

An integrative or collaborative strategy requires assessing the components of the negotiation and the relationship between the parties. This approach concerns creating or maintaining trust to encourage future, long-term interactions and a win-win outcome where all parties come away with most or everything they want. Sustainable profitability is only achieved through being treated fairly, respectfully, and honestly.

To review, see The Essence of Negotiation.

2c. Summarize the history of labor negotiations in the United States

• What are some key historical events of the U.S. labor union movement?

The labor movement in the United States reached its pinnacle during the 1940s and 1950s. In 1935, the U.S. Congress enacted the Wagner Act, also known as the National Labor Relations Act, to safeguard employees' rights to form unions by prohibiting employer interference, coercion, or restraint. However, there was a significant policy shift in 1947 when Congress passed the Taft-Hartley Act, which leaned favorably toward businesses. Later, in 1959, the Landrum-Friffling Act imposed several restrictions on unions. During the 1950s, 36 percent of the American workforce was unionized (Friedman, 2010), whereas the current figure is just over 11 percent.

The U.S. National Labor Relations Act of 1935 covers most collective agreements in the private sector. This act makes it illegal for employers to discriminate, spy on, harass, or terminate workers' employment because of their union membership. It also makes it illegal for employers to retaliate against employees who engage in organizing campaigns, form company unions, or refuse to engage in collective bargaining with the union representing their employees. It is also illegal to require any employee to join a union as a condition of employment. Unions are also exempt from antitrust law hoping that members may collectively fix a higher price for their labor.

The U.S. National Labor Relations Act of 1935 covers most collective agreements in the private sector. This act establishes a range of prohibited employer behaviors, such as discrimination, spying, harassment, or wrongful termination based on an employee's union membership. Moreover, it safeguards employees from retaliation when engaging in organizing campaigns, forming company unions, or refusing to engage in collective bargaining with their designated union. Additionally, the act explicitly prohibits the compulsory requirement of union membership as a condition of employment. Unions are granted an exemption from antitrust laws, with the intent of enabling members to collectively negotiate for better labor prices.

In the past, labor negotiations have followed the advent of nearly every new industry, such as the steel industry of the late 1890s, factory workers in the 1930s, and public and private sector employees during the 1970s and 1980s. In 2020, the Covid-19 pandemic exposed poor working conditions in several industries and large companies. Low unemployment rates and greater demand for workers have encouraged employees to organize to demand better pay, benefits, hours, and a share in profits, such as local hospitals, Amazon, Starbucks, and Trader Joe's.

During collective bargaining, the negotiation process between employees and employers, employees attempt to achieve employment conditions that serve their shared interests. What might be an issue under dispute during the collective bargaining process?

To review, see Collective Bargaining.

2d. Describe the role negotiation plays in mergers and acquisitions

• What are mergers and acquisitions?
• How do mergers and acquisitions compare to each other?

Mergers are business combinations – when two firms agree to proceed as a single new company rather than remain separately owned and operated. Companies' dominant rationale to explain why mergers occur is that the acquiring firm wants to improve its financial performance. An acquisition occurs when one company takes over the operational management decisions of another smaller, weaker company. The weaker company continues to operate under the name of the stronger company that purchased them. Note that the acquisition could have resulted from a "hostile takeover."

Synergy refers to the benefits of combining two different groups, people, objects, or processes. The underlying principle is 2 + 2 = 5. In other words, combining two companies creates a new entity worth more than the sum of its parts.

Imagine you work for a small company that has struggled financially and learn that a large, well-known corporation has acquired your workplace. Your management team has been extremely secretive and did not communicate the acquisition details to its employees. What would your main concerns be regarding your future in the new organization? Why do companies want to acquire others?

To review, see Mergers and Acquisitions and Investment Thesis on Sears: Case Study.

2e. Compare the roles of principles and agents during business negotiations

• What are agents and principals?
• How would you describe the two categories of duties that an agent owes their principal: fiduciary duty and general duties imposed by agency law?

The principal is someone who engages an agent to work on their behalf. The agent has a fiduciary responsibility to act in the principal's best interest. Their professional duty includes:

• avoiding self-dealing
• preserving confidential information
• using skill and care
• demonstrating good conduct
• keeping and rendering accounts
• not attempting the impossible or impracticable
• obeying the principal
• giving information to the principal

The relationship between the principal and agent is not only contractual but relies on each party's trust in the other.

Let's say you want to buy the perfect house, and the real estate agent you contract is working on commission. They will only make money if you buy a house through them. Do you believe they will apprise you of pertinent information such as price reductions, plumbing or electrical problems, and other concerns about the house?

To review, see Relationships between Principal and Agent and Liability of Principal and Agent; Termination of Agency.

2f. Identify the advantages and disadvantages of multiparty negotiations

• What are some characteristics of multi-party negotiations?
• Can you describe the advantages and disadvantages of these facets?

During a multi-party negotiation, interested parties bring a variety of interactions, including sides, parties, roles, and issues. All of these variables, and more, play a role in the outcomes of the negotiations.

Multi-party negotiations are more complicated than two-party negotiations because each party may decide to join with one or more other participants to form a coalition. The process is more involved because of individual or coalition agendas and the formulation of BATNAs that may fluctuate throughout the negotiation. Other complexities result from social aspects, such as groupthink, fears of leaked information, defection, and the formulation of decision rules.

To review, see Multi-Party Negotiation and Power.

2g. Explain the effect of timing and the "six power tactics" in negotiations

• How do negotiators utilize behavioral, rational, and structural power tactics?
• What are the definitions of the six sources of power: legitimate power, referent power, expert power, reward power, coercive power, and informational power?

Negotiators use three categories of power tactics to push or prompt others into action: behavioral, rational, and structural.

1. Behavioral tactics can be soft or hard. Soft tactics take advantage of the relationship between the person and the target. They are more direct and interpersonal and can involve collaboration or social interaction. Hard tactics are harsh, forceful, and direct and rely on concrete outcomes. However, they are not necessarily more powerful. In many circumstances, fear of social exclusion can be a stronger motivator than physical punishment.
2. Rational tactics of influence use reasoning, logic, and objective judgment. Irrational tactics rely on emotionalism and subjectivity. Examples include bargaining and persuasion (rational), evasion, and put-downs (irrational).
3. Structural tactics exploit the relationship between individual roles and positions. Bilateral tactics like collaboration and negotiation involve reciprocity between the influencing person and the target. Unilateral tactics are enacted without any participation on the part of the target. These tactics include disengagement and fait accompli. Political approaches, such as playing two against one, take yet another approach to exert influence.

The six sources of power are:

1. Legitimate or positional power refers to an individual's role or status within a company or organization. This formal authority was delegated to the position holder.
2. Referent power comes from an individual's ability to attract others and build loyalty. It is based on personality and interpersonal skills. Others admire these individuals due to personal traits, such as charisma or likability. These positive feelings become the basis for interpersonal influence.
3. Expert power draws from someone's skills and knowledge. It is especially potent when an organization needs them. It is narrower than other power sources because it only applies to a specific area of expertise and credibility.
4. Reward power derives from one's ability to confer valued material rewards and other positive incentives or motivate others through benefits or gifts. For example, a manager can reward employees with cash, promotions, pay increases, or extra time off.
5. Coercive power refers to applying threats, sanctions, and other negative consequences, such as through direct punishment or withholding desired resources or rewards. Coercive power relies on fear to induce compliance.
6. Informational power derives from the ability to access facts and knowledge that others find valuable or useful. This access signifies relationships with other influential individuals and communicates a status that leaves a positive impression. Informational power enables the establishment of credibility and facilitates rational persuasion. It also serves as a basis for engaging in beneficial exchanges with others actively seeking that information.

To review, see Sources of Power.

Unit 2 Vocabulary

• acquisition
• agent
• behavioral tactics
• bilateral tactic
• coalition
• coercive power
• collective bargaining
• expert power
• fiduciary responsibility
• hostile takeover
• informational power
• Landrum-Friffling Act of 1959
• legitimate power
• merger
• multi-party negotiation
• National Labor Relations Act of 1935
• National Labor Relations Board (NLRB)
• principal
• rational tactics
• referent power
• reward power
• sales negotiation
• stakeholder
• structural tactic
• synergy
• Taft-Hartley Act of 1947
• unilateral tactic
• zone of possible agreement (ZOPA)

Unit 3: Conflict in the Workplace

3a. List five benefits of functional disagreement and conflict in the workplace

• What are functional and dysfunctional conflicts?
• How does functional conflict benefit group decision-making?
• What are conflict management and conflict resolution, and what is the difference between them?
• Can you give an example of bullying in the workplace?
• Why should managers utilize conflict management or conflict resolution to address bullying?
• What approach should managers take to resolve interpersonal conflict?
• What are intrapersonal, interpersonal, and intergroup conflicts?

Functional conflict can be a positive force for change in the workplace by fostering new, innovative, and more efficient ways of accomplishing tasks or goals. However, it requires a delicate balance of encouraging people to challenge one another about their ideas, decisions, and preferences without promoting negativity. Unfortunately, misunderstandings and personal clashes can foster dysfunctional conflict and create a caustic work environment.

Too much or too little conflict can disrupt performance. The goal is to find a balance where a healthy debate of ideas occurs, but dysfunctional conflict is kept at bay. Personal conflict increases anxiety and stress, creates a climate of mistrust, and causes individuals to feel demeaned and defeated. A negative work environment lowers morale, hinders teamwork and cooperation, and may increase employee turnover. It ultimately causes reduced productivity.

The worst cases of personal conflict lead to workplace bullying. New employees at Intel Corporation participate in a four-hour training module to learn constructive confrontation. The content includes positively dealing with others, using facts rather than opinions to persuade others, and focusing on solving the problem rather than the people involved. "We don't spend time being defensive or taking things personally. We cut through all of that and get to the issues," notes a trainer from Intel University. Dahle, C. (2001, June).

Workplace conflict ranges from minor disagreements to bullying to workplace violence. Conflict can occur within an individual (intrapersonal), between individuals (interpersonal), and among groups (intergroup). While dysfunctional conflict is unproductive and destructive, a moderate amount of conflict can be healthy and necessary when employee disagreement is channeled respectfully and used to gather new ideas and further the organization's goals.

Why should managers take time to address small conflicts among employees that seem to target one person, such as someone new to the team, community, or from a different culture? What type of conflict is this: intrapersonal, interpersonal, or intergroup?

To review, see Understanding Conflict and Five Good Things about Conflict.

3b. Explain how organizational structure impacts communication and transparency

• What are the four types of organizational structure, and how does each structure affect communication and transparency within an organization?

Mechanistic structures are rigid, centralized bureaucracies designed to create organizational efficiencies. Organic structures are flexible and decentralized, with low levels of formalization. Communication lines are more fluid. Employees perform duties based on the current, specific needs of the organization. Job descriptions are more general. Organic structures tend to have higher levels of job satisfaction. Their structures promote entrepreneurial behavior and innovation.

Four elements of organizational structure include centralization, formalization, hierarchical levels, and departmentalization.

Centralization refers to whether decision-making authority is concentrated at higher levels of the company hierarchy. In decentralized companies, lower-level employees can make decisions and solve problems. Some employees prefer working at organizations where managers confidently give instructions and make decisions. Centralization may lead to more efficient operations, especially for companies that operate in stable environments.

Formalization refers to whether an organization's policies, procedures, job descriptions, and rules are written and explicitly articulated. Formalized structures have many written rules and regulations. These written rules control employee behavior, so workers have little autonomy to make decisions on a case-by-case basis. Employee behavior is more predictable. A formalized structure can reduce motivation and job satisfaction and invite a slower decision-making pace.

Hierarchy refers to the number of levels in the company's organization chart. Tall structures have several management layers between frontline employees and the top level. Since managers supervise fewer employees, they can monitor employee activities closely. Flat structures have fewer layers. Employees have greater freedom of action since managers must supervise more people. Research shows flat organizations provide greater employee satisfaction and greater levels of self-actualization.

However, there is greater role ambiguity among employees when managers supervise large numbers of workers in flat structures. Employees are unsure of what is expected on the job.[299] This disadvantages employees who need more managerial guidance. Advancement opportunities are limited in flat structures due to fewer management layers. Employees report that flat structures satisfy higher-order needs such as self-actualization, but tall structures satisfy their security needs.

Organizational structures have different departmentalization levels, categorized as functional or divisional.

Organizations with functional structures group jobs based on similar functions. They may have departments devoted to accounting, finance, human resources, information technology, manufacturing, or marketing. Each person performs a specialized role and handles large volumes of transactions. Functional structures are more effective for companies with fewer products and services that require special attention in a stable environment that is slow to change.

Organizations with divisional (or product-specific) structures may have departments with unique customers, geographic locations, products, or services. Since each product line has unique demands, a divisional structure makes it easier for employees to address customer demands promptly and anticipate market changes. These companies are more agile and perform well in turbulent environments. Certain employees prefer working in this environment with more diverse and complex activities.

To review, see Organizational Structure and Change.

3c. Describe how scarcity of resources impacts workplace disagreement and conflict

• What is scarcity?

Scarcity refers to whether you have to choose between alternatives. When choosing a scarce good, you must give up an alternative. Every choice has an opportunity cost that affects the choices people make. The opportunity cost for any choice is the value of the best alternative you had to give up when you chose the first option.

Companies with inadequate resources often develop issues and conflicts. Employees may compete for limited or scarce funding, resources, or time required to complete tasks. Computer equipment, cutting-edge gadgets, and accessories may be allocated to higher-level employees while others go wanting. These technical devices may be critical for productivity and cause unhealthy competition, an unethical work environment, and lower morale. This type of conflict demotes teamwork and encourages individualism. (Katz & Flynn, 2013)

To review, see Defining Economics.

3d. Explain how leadership commitment affects conflict resolution in the workplace

• Why do leaders need to be able to analyze the sources of conflict and have the skills to manage issues as they arise?
• Why should leaders be aware of their conflict management style?

Effectively managed conflicts lead to resolutions with positive outcomes and enhanced productivity for the team and organization (Loehr, 2017b; Evans, 2013). Leaders must be able to manage conflict when it occurs. This ability is critical to the individuals' and teams' success (Guttman, 2004).

Peter Northouse states, "It is up to the leader to assess what action, if any, is needed and then intervene with the specific leadership function to meet the demand of the situation." Effective leaders must respond with an action the situation requires (Northouse, 2016). A leader's job is to analyze the conflict and facilitate a positive and productive resolution.

Transformational leaders gain the trust of their followers. They inspire them to change their expectations and motivations to work toward a common goal. In a study of the relationship between transformational leaders and conflict management (Zhang et al.), transformational leaders who used conflict management methods were able to influence their teams to establish stronger identities, discuss their disagreements and frustrations outwardly, and work out solutions that benefited the team (Zhang, Cao, Tjosvold, 2011).

The Thomas Killmann Conflict-Handling (TKI) Modes are below. Effective leaders will use some or all of these styles or modes at different times depending on the situation and their ultimate goal during the dispute or negotiation.

1. Avoiding – withdrawing from a conflict or sidestepping issues, leaving issues unresolved, and having a sense of timing.
2. Accommodating – setting your concerns aside, obeying orders, selflessness, and yielding to the greater good.
3. Competing – standing your ground, debating, using influence, stating your position clearly, and stressing your feelings.
4. Collaborating – using active listening, identifying concerns, and analyzing input and confrontation.
5. Compromising – negotiating and finding the middle ground, making concessions, and assessing value.

To review, see Leadership Guide to Conflict and Conflict Management and Four Ways to Deal with Conflict at Work.

3e. Explain models of task interdependence

• What is task interdependence?
• How does task interdependence depend on trust and communication for its effectiveness?

Task interdependence refers to relying on others to fulfill certain tasks to accomplish one's goals. For instance, if your supervisor assigns you the task of creating an advertisement, you would need to collaborate with the creative team to design the words and layout, engage the services of a photographer or videographer for visual elements, and work with a media buyer to acquire the appropriate advertising space, among other necessary interactions.

A manufacturing process is another example of task interdependence. The production, processing, and shipping departments depend on the output from each department to complete the company's goals. Each team member, leader, and manager is accountable to themselves and each other. Effective interdependence relies on accountability and communication.

In Bruce Tuckman's model of the group development process (forming, storming, norming, performing, and adjourning), task interdependence occurs during the performing stage. Team members should focus on team goals and problem-solving. Team leaders should manage high-risk tasks and coach and develop members. Team members progress to a level of team cohesion and unity. A level of trust, communication, acceptance, and conflict resolution allows members to emphasize problem-solving and goal attainment.

To review, see:

• Why Teamwork Works
• Effective Teamwork and Collaboration
• Conflict Management: Conflict in the Workplace

3f. Explain the relationship between employee task interdependence, teamwork, and workplace conflict

• How does communication affect the relationship between employees and their roles in a team?
• How can a lack of mutual understanding of assigned tasks due to inadequate communication lead to workplace conflict?

Imagine this story: two team members do not get along. Their manager becomes more involved in conflict resolution by talking to each employee separately and then together. The three explore options for accomplishing their tasks and agree to communicate their needs to each other in the future. The manager believes she had failed to clearly assign their roles and tasks. She schedules a follow-up meeting to ensure the team progresses satisfactorily on the project with each other.

This story illustrates the need for employees to rely on themselves and each other to achieve a common goal. The team developmental and performing stages emphasize problem-solving and task interdependence.

To review, see:

• Teamwork Effectiveness
• Why Teamwork Works
• Effective Team Work and Collaboration
• Conflict Management: Conflict in the Workplace
• Conflict Management: Addressing Resistance to Change

3g. Discuss how active listening, clarity regarding roles, and resistance to change affect workplace conflict

• How do active listening, role clarity, and resistance to change affect workplace conflict?

Imagine this story: two colleagues fail to listen to each other or understand their different perspectives. Their conversation devolves into a laundry list of accusations of unacceptable behaviors. Finally, the parties learn to listen to each other without accusations or adopting a defensive posture. The opportunity exists for clarification and explanation of attitudes and behavior. Has this ever happened to you?

To review, see Conflict Management: Identifying Active Listening and Conflict Management: Addressing Resistance to Change.

3h. Identify different personality types

• What is the Myers-Briggs Type Indicator (MBTI) personality test?

The Myers-Briggs Type Indicator (MBTI) measures four pairs of preferences: extrovert vs. introvert, sensing vs. intuitive, thinking vs. feeling, and judging vs. perceiving. The model offers 16 personality types since there are two options for each of the four preferences.

Personality refers to how people act in situations according to their emotions, reactions, and motivations in different conditions. Personality type refers to how we categorize these characteristics. An example of personality type is when we describe someone as more extroverted or introverted. Extroverts tend to be more outgoing; they express their thoughts and actions freely. Introverts tend to keep their feelings to themselves.

According to the MBTI, extrovert or introvert measures how people get energized. Extroverts (E) get their energy from interacting with other people. They are outgoing and sociable, enjoy talking to others, and share their thoughts freely. Introverts (I) get their energy from their thoughts and ideas from within. They prefer to talk and interact with fewer people and process their ideas more thoroughly before sharing them (Kroeger 2002).

Sensing or intuition determines how people gather information about the world around them. Sensors (S) are practical and realistic and prefer to receive exact information and specific facts. Intuitives (N) think in terms of the big picture. They are theoretical and prefer big ideas and conceptual information rather than facts (Kroeger 2002). 

Thinking or feeling measures how people make decisions. Thinkers (T) are objective and base their decisions on facts. They are firm in their decisions and detached from emotion. Feelers (F) are subjective and base their decisions on emotion. They consider the circumstances and are emotionally invested in their choices (Kroeger 2002).

Judging or perceiving measures the kind of environment people create around them. Judgers (J) prefer structure and order. They like to have control over plans and a fixed itinerary. Perceivers (P) are tentative and spontaneous with their schedules. They go with the flow and like to be flexible (Kroeger 2002).

Imagine you take the Myers-Briggs Type Indicator personality test, which says you are an ISTJ. Does it suggest your career preference is in sales or accounting? Do you think people have different personalities in certain environments, such as their personal and work lives? Do you think individuals who take this test could try to fix the results to achieve the desired categorization? Do cultural differences play a role in the test results?

To review, see Personality Types.

3i. Discuss how conflicting personalities, stereotypes, and cultural biases cause dysfunctional workplace conflict

• What are cultural knowledge, awareness, sensitivity, and competence?
• What is the difference between each?
• What are the benefits of working in a culturally competent organization that promotes inclusion and equality?

We naturally categorize people by age, language, occupation, ethnicity, income, and many other qualities. This can create mental traps that erect barriers to communication and understanding. Stereotyping is biased thoughts about an individual because you have assigned them to a certain category. For example, Kathleen is 75 and plans to run in the New York City Marathon next year. If you knew only her age, would you be surprised that she is an accomplished runner?

Categorization can give rise to prejudice. Just like stereotypes, prejudice involves having biased attitudes towards individuals based on their group membership. Where stereotypes are related to thinking, prejudices are more emotional. Prejudice is when someone has negative views of Kathleen because they have negative views about older adults. For example, Kathleen is an excellent driver, but some co-workers joke about her driving slowly with her turn signal on because that is how all older people drive.

The tendency to categorize is associated with discrimination. Discrimination is a behavior bias against a person (or group) based on stereotyped beliefs about that group. If members of Kathleen's hiking club do not invite her to an upcoming hike because they fear she will move too slowly because she is old, they are discriminating against her. They are not looking at her as an individual but as part of a group for which they have certain preconceptions.

Culture refers to a particular group's shared traditions, beliefs, customs, history, folklore, and institutions. It is a common bond between individuals who share similarities in ethnicity, language, nationality, or religion. Culture serves as a framework of rules that shape our identities and profoundly influences how we express ourselves as part of a collective and as unique individuals.

Organizations can have a culture – of policies, procedures, programs, and practices – since they incorporate certain values, beliefs, assumptions, and customs. This organizational culture, however, may not reflect knowledge about different groups of people. Culturally competent organizations incorporate this knowledge and transform it into standards, policies, and practices.

There are four levels to these concepts:

1. Cultural knowledge means knowing about the cultural characteristics, history, values, beliefs, and behaviors of another ethnic or cultural group.
2. Cultural awareness is being open to changing cultural attitudes.
3. Cultural sensitivity is knowing that cultural differences exist but not assigning values to the differences, such as one culture being better, worse, right, or wrong. Internal conflict (intrapersonal, interpersonal, and organizational) can occur when a custom or belief goes against multiculturalism.
4. Cultural competence is being able to effectively manage the previous three levels. A culturally competent organization can work effectively in cross-cultural settings with behaviors, attitudes, and policies to produce better outcomes.

To review, see:

• Stereotypes, Prejudice, and Discrimination
• Prejudice, Discrimination, and Stereotyping
• Gender
• Sexual Harassment
• Ageism at Work
• Five Cross-Cultural Capabilities for Clinical Staff
• Building Culturally Competent Organizations
• Organizational Conflict
• Four Keys to Resolving Workplace Conflicts

3j. Identify strategies for eliminating dysfunctional conflict in the workplace caused by negative stereotypes and cultural biases

• What is the definition of a negative stereotype?
• What is the definition of cultural bias?
• What are some strategies for resolving dysfunctional conflicts caused by negative stereotypes and cultural biases?
• What are some strategies to achieve cultural competence?

Cultural bias stems from an assumption that everyone from a cultural group shares the same beliefs or practices. Ethnocentrism describes the imposition of your cultural values and beliefs onto another culture. This occurs when a different way of doing things, outside your worldview, is deemed invalid or inferior, while your culture is superior or the standard or norm.

Self-reflective practice avoids the common pitfalls of ascribing differences to someone from a different culture (the "other"). Self-awareness is essential to understanding the viewpoint and motive behind another person's actions to resolve conflict (Spaho, 2013). Understanding the other person and analyzing their strengths and weaknesses helps manage organizational conflicts.

An organization that strives to educate employees and managers regarding stereotyping and cultural biases and manage dysfunctional conflict in the workplace is culturally competent.

Achieving cultural competence is less likely to occur as a top-down organizational mandate, but support from the top should be part of it. A committee representing all organizational levels can help get everyone to "buy in" by creating and facilitating action steps. Employees from all organizational levels should be involved. Those who do not understand the importance of becoming more culturally sensitive can complicate the process.

The steps are:

1. Develop support for change throughout the organization (who wants change and who does not)
2. Identify cultural groups that should be involved (who should be involved in planning, implementing, and reinforcing the change)
3. Identify barriers (what is not working, what will stop you or slow you down)
4. Assess your current level of cultural competence to identify gaps (what knowledge, skills, and resources can you build on?)
5. Identify the resources needed and where you can find them
6. Develop goals, implementation steps, and deadlines (who, what, when, and how)
7. Commit to ongoing progress evaluation to measure outcomes. Be willing to respond to change (What do progress and success look like? What signs indicate the organization is on track?)

Unit 3 Vocabulary

• accommodating
• agism
• avoiding
• centralization
• collaborating
• competing
• compromising
• cultural awareness
• cultural bias
• cultural competence
• cultural knowledge
• cultural sensitivity
• discrimination
• divisional structures
• dysfunctional conflict
• ethnocentrism
• extrovert
• feeling
• formalization
• functional conflict
• functional structures
• gender
• hierarchy
• intergroup conflict
• interpersonal conflict
• intrapersonal conflict
• introvert
• intuitive
• judging
• mechanistic structures
• opportunity cost
• organic structures
• perceiving
• personal conflict
• personality
• prejudice
• scarcity
• self-reflective practice
• sensing
• sexual harassment
• stereotyping
• task interdependence
• thinking
• Thomas Killmann Conflict-Handling (TKI) modes
• transformational leaders
• Tuckman's model

Unit 4: Conflict Resolution Strategies

4a. Compare the five styles for handling conflict: competing, collaborating, compromising, avoiding, and accommodating

• What is the definition of a collaborative and competitive negotiation style?
• What are the benefits and drawbacks of negotiating with conflict avoidance, accommodation, competition, and compromise in mind?
• How can the causes of workplace conflict, such as organizational structure, limited resources, task interdependence, incompatible goals, personality differences, and communication problems, be overcome?

Review the five modes of the Thomas Killmann Conflict-Handling Mode Instrument (TKI) – avoiding, accommodating, competing, collaborating, and compromising – in learning outcome 3d. What does it mean to be collaborative or competitive during a negotiation? When choosing a negotiation approach, each party must assess the relative importance of their long-term relationship and how much they value the desired outcome.

For example, is winning an argument with a work colleague more important than retaining a friendly, collaborative partnership? Are you concerned that obtaining a lower price for the car you want to buy will decrease the commission the salesperson receives from the sale? If you emphasize preserving or creating a good relationship, you may decide to be more collaborative and pursue a win-win outcome. If the outcome of your negotiation takes precedence (you want a lower price for the car you buy), you may decide to be more competitive.

Conflict-Handling Styles

Many people use the terms conflict management and conflict resolution interchangeably. However, conflict management is when you contain or manage conflict rather than remove it. Conflict resolution is when you improve or resolve a conflict situation. All parties are satisfied or agree to pursue a win-win solution. Resolving conflicts may require third-party intervention, such as diplomacy, mediation, or arbitration.

For example, when resolving a business conflict, managers try to determine the best outcome for their company. What is more important – keeping an employee who did shoddy work or keeping a client unhappy with their poor performance?

To review, see:

• Thomas-Kilmann
• Finding Opportunities in Conflict
• Conflict Resolution

4b. Compare the ADR strategies of negotiation, mediation, and arbitration

• What are negotiation, mediation, and arbitration, and how do they compare?

Steps to a successful negotiation include formulating a clear outcome or goal, deciding on an approach or strategy, defining obstacles or issues that may preclude mutual agreement, and planning or specifying steps to obtain a desired outcome.

Mediation is a formal process of alternative dispute resolution (ADR) that includes a neutral and impartial third-party mediator who is agreeable to all parties involved in the dispute. The mediator's objective is to facilitate mutual understanding, foster common ground, develop an action plan for resolving the issue, and follow up with the parties to ensure that peace is maintained.

Mediators are expected to maintain their impartiality throughout the mediation discussions, allowing each party to present their case and arguments fairly and accurately without displaying bias towards one side. In a workplace context, a professional from the human resources department may serve as the third-party mediator. Although their role involves resolving conflicts with the company's interests in mind, they may not be entirely impartial due to their affiliation with the organization.

Arbitration is an even more formal method of ADR where parties vest authority in a third-party neutral decision maker (an arbitrator) they hire who will hear their case and issue a decision or arbitration award. Arbitrators are neutral decision-makers who are often experts in the law and the subject matter of the dispute. The nature of the settlement is typically determined by state laws, which dictate whether the parties are legally obliged to adhere to the arbitrator's decision or ruling.

A Continuum of Different ADR Methods

To review, see:

• Alternative Dispute Resolution
• A Problem-Solving Approach to Conflict Resolution
• Conflict Resolution
• Mediation
• Arbitration
• Argument Analysis: An Epic Day for Employers in Arbitration

4c. Explain the role of unions and collective bargaining in conflict resolution

• What is collective bargaining?
• Which legislation defines and regulates collective bargaining in the United States?

Collective bargaining is the negotiation process between the company or employer and an employee union. Resolving collective bargaining disputes often involves arbitration. The ultimate goal is for the employer and the union to reach a contractual agreement outlining union members' rights and responsibilities for a specified period. Non-union employees also tend to benefit from the negotiated agreement. Once the agreed-upon period expires, the parties engage in new negotiations to establish a fresh contract.

Throughout history, workers worldwide have formed guilds, coalitions, or unions to negotiate for increased pay and better working conditions. Unions step in to negotiate for workers who threaten to strike or refuse to work until the employer agrees to meet their terms. Employers threaten to fire the striking workers and hire new ones amenable to the current work conditions. Politicians often get involved when the country's economy or lack of public services is at stake. Unions have pushed employers to create healthier work environments by reducing child labor, paying workers overtime pay, providing healthcare and retirement benefits, and supplying special safety or protective gear.

Review the Wagner Act or National Labor Relations Act of 1935, the Taft-Hartley Act of 1947, which restricted labor union practices, and the Landrum-Friffling Act of 1959, which imposed several additional limitations on unions.

To review, see The Nature of Unions and Collective Bargaining.

4d. Discuss the pros and cons of mandatory arbitration agreements

• What is mandatory arbitration?
• What are the pros and cons of mandatory arbitration?

Many business contracts (rental, vendor, and employee agreements) include a clause that requires signers to participate in mandatory arbitration rather than go to a court of law should any complaints or disputes arise for the reasons we explore below. The results of arbitration may be binding or non-binding. In binding arbitration, the arbitrator's decision is final, and neither party can appeal the decision through the courts except in rare circumstances. In non-binding arbitration, the arbitrator's decision or award is a recommendation.

Individuals frequently use arbitration to resolve family law issues such as divorce, custody, and child support issues. Companies use arbitration to settle labor disagreements, business transactions, and property disputes according to business law.

Arbitration rules differ by state. Arbitration rules are more formal than mediation but less formal and restrictive for presenting evidence than in a trial (see learning outcome 4e). Arbitrators decide which evidence to allow, and they are not required to follow precedents or provide their reasoning in the final award. Regardless of the rules followed, arbitrations proceed according to external rules known to all parties involved.

Businesses insert these clauses into their contracts because they do not want to litigate disputes in court. The legal process is in the public eye, it may cost millions of dollars, it takes a long time, and the outcome is particularly risky because you may be forced to abide by the decision of an unsympathetic judge or jury. Mediation and arbitration are more private, less time-consuming, less costly, and less risky.

Many employees unwittingly sign forced arbitration clauses as part of their employment contracts in which they waive their right to sue their employer in court and must settle disputes through arbitration. These agreements benefit companies that prefer to keep these disputes and settlements private and out of the court system. Still, they stymie employees who seek damages from sexual harassment, workplace injuries, anti-discrimination, and similar lawsuits.

Public Citizen, a nonprofit organization representing consumer interests in Congress, reports that consumers usually fare better in litigation than arbitration. Issues of fairness are magnified in these disputes where the parties have unequal levels of wealth and power. Forced arbitration clauses may cause the injured party to forfeit their right to appeal an arbitration decision or participate in any kind of class action lawsuit, in which individuals with a similar issue sue as one collective group.

To review, see Arbitration and Argument Analysis: An Epic Day for Employers in Arbitration.

4e. Compare formal and informal conflict resolution strategies

• What are some examples of informal conflict resolution strategies?

The common dispute resolution methods we have discussed – negotiation, mediation, arbitration, and litigation – range from informal to formal with increasing amounts of time, effort, and costs. You can negotiate a disagreement among friends over dinner, mediate a work dispute with the help of a work colleague or human resource professional, resolve a disagreement about your lease with your landlord or contractor with a hired professional arbiter or panel of arbitrators, or file a lawsuit in a court of law to seek monetary damages in the courtroom.

Negotiation and mediation offer more flexibility, whereas the arbitration process can involve many of the formal procedures observed in a courtroom trial. This includes the presentation of evidence, witness testimonies, discussion of relevant local laws or ordinances, and examination of signed legal documents, such as contracts, damage receipts, and other forms of evidence. The parties typically meet to discuss and present their arguments and evidence before the arbitrator, who then delivers their judgment, determines the amount of damages owed, and provides a specific course of action within a defined timeframe.

Companies seeking to keep disputes private often opt for arbitration instead of a courtroom trial, as the proceedings and settlement outcomes do not become part of the public record accessible to journalists, potential clients, and other interested parties. The arbitration process tends to be less time-consuming and costly than a courtroom trial, although it can still involve significant expenses for the participants.

To review, see:

• Mediation
• Arbitration
• Argument Analysis: An Epic Day for Employers in Arbitration

4f. Explain the importance of legal standing in litigation

• What is legal standing?

Anyone who pays the court filing fee and hires an attorney can bring a lawsuit, but the court may decide not to hear their case. There may be no case or controversy, no law supporting the plaintiff's claim, the wrong court, too much time has lapsed (a statute of limitations problem), or the plaintiff may lack legal standing. Only people whose interests are directly affected have the legal right to bring a lawsuit. Similarly, you cannot sue on another person's behalf because you cannot demonstrate that your legal interests or rights have been violated.

To review, see When to Bring a Lawsuit.

4g. Explain how class action lawsuits affect corporations

• What are some legal risk management strategies?
• What is reputational risk?

Customers can join forces to create a more powerful entity than if they were to sue individually. For example, during a class action suit, customers can pool their resources to hire a more experienced attorney and divide the damages among themselves once the jury has reached a verdict. Attorneys may agree to work on the case for no charge if they lose, but they will receive a percentage of the damages if they win the case. These damages can drain a business' financial resources and ruin its reputation due to media exposure.

Ford Motor Company knowingly endangered its customers in the Ford Pinto case. During their legal risk analysis, they identified the risk (the gas tanks exploded, but the car met minimum federal safety standards), evaluated the financial impact of lawsuits on the company ($49.5 million annually), and the annual cost to fix the vehicle defect ($137 million – adding $11 to the cost of each car). However, Ford's reputational risk was in jeopardy during this case. Quantitative risk evaluation in dollars and cents does not tell the whole story. Ford lost many more lawsuits and their damaged reputation, which money cannot buy!

To review, see When to Bring a Lawsuit and Law and Legal Risk Management.

4h. Describe the jury trial process

• What are the steps in a jury trial?

The first step in a trial is selecting a jury. The judge and attorneys for each side question potential jurors during voir dire to ensure they are unbiased. Depending on the type of trial, juries can include 6-12 people with at least two alternate jurors. The judge's main responsibility is to ensure the trial is fair to both sides, such as when the judge rules on the admissibility of certain evidence.

The second step is the opening statement from the plaintiff's lawyer (and from the defendant's lawyer, depending on the type of trial). The lawyer for the plaintiff calls witnesses and presents relevant physical evidence as proof. After direct testimony from each witness ends, the defendant's lawyer may cross-examine the witness. After cross-examination, the plaintiff may re-examine the witness, followed by re-cross-examination.

After the plaintiff has made their case, the defendant presents their side using the same procedure described above. The plaintiff can present rebuttal witnesses, and the defendant can present surrebuttal witnesses. After all of the testimony has been introduced, either party can ask the judge for a directed verdict.

If the judge refuses to grant a directed verdict, the attorney for each side presents closing arguments to the jury. The judge instructs the jury on the meaning of the law as it relates to this case and tells them what facts they must use to determine a verdict for one party or the other. After the judge gives their instructions, the jury retires to a private room to reach a verdict. Depending on the type of case, the jury must reach a unanimous decision or a majority verdict. If they cannot decide, the outcome is a hung jury. The plaintiff will decide whether to retry the case at a later date. Once the jury delivers their verdict, the judge dismisses them and regains control of the case.

The trial process is clear, but there are many variables, and the outcome is unpredictable. There are many disruptions. The judge may accept or overrule a lawyer's objections. Witnesses' testimony can favor either side. Attorneys may be more or less skillful, and jurors may need to be replaced. Have you ever been called for jury duty? Were you chosen to hear a case? What is the most difficult part of jury duty?

To review, see The Trial.

4i. Identify risks companies face when they use litigation to resolve conflicts rather than ADR strategies

• What types of risks do companies face when they rely on litigation instead of ADR strategies?

Corporations should conduct a risk analysis to determine their risk exposure when resolving disputes. Their options include risk avoidance, reduction, shifting, and acceptance. In every scenario, businesses should also consider their reputational risk.

They should be especially cognizant of these factors when deciding whether to proceed with a trial or do everything they can to avoid it at all costs. As we have discussed throughout this unit, a trial may cost millions of dollars to pay attorney fees and any damages awarded, the process takes a long time, and the outcome is particularly risky because you may be forced to abide by the decision of an unsympathetic judge or jury. The legal process often occurs in the public eye.

For example, customers can bring a class action lawsuit for sub-par service or defective products. The media usually report on these class-action lawsuits, which can damage the company's reputation. It can be difficult for a business to recover from public exposure that deems its business practices, products, or services unethical, overpriced, inferior, or dangerous.

To review, see Law and Legal Risk Management and The Trial.

4j. Discuss methods managers can use to understand the perspective of their employees

• What are some techniques that can be used to open lines of communication between managers and employees?
• What are some strategies for understanding the perspective of team members?
• How can teams in conflict achieve a win-win outcome through integration?

Team leaders can remedy problems with team dynamics. The first step is to work with the team to develop a shared understanding of why members are not collaborating effectively. Tools available include team surveys, interviews with team members, and 360-degree evaluations. Coaching for this intervention focuses on helping team members have unemotional conversations. Intervention should not be a personal attack or criticism but an essential dialogue to help the organization perform better.

There are several steps for understanding employees to resolve conflict:

1. Listen before talking. Many conflicts result from poor communication.
2. Never use email to resolve complex issues.
3. Pick up the phone to diffuse emotion.
4. Never send an emotional email or make an emotional statement.
5. Take a "walk in the woods" to discover common interests that lead to new solutions.

Another way to view this process is by considering the following:

1. Self-interests. Participants articulate their view of key problems, issues, and options.
2. Enlarged interests. Participants reframe their understanding of the problems and options based on integrative listening and confidence-building from step one.
3. Enlightened interests. The group actively encourages innovative thinking and problem-solving, resulting in new ideas and perspectives that were not previously taken into account.
4. Aligned interests. Participants build common ground perspectives, priorities, action items, agreements, or plans for moving forward.

To review, see:

• Resolving Conflict
• How to Make Teams Work Effectively
• Conflict Resolution – a Redefinition
• Project Completion
• Teaching about Conflict Resolution
• Five Reasons to Tell the Hard Truth to Underperformers

4k. Define what it means to work toward a common goal to resolve conflicts

• How can team leaders assist their team members in working together towards a shared objective to resolve conflicts?

Team members should work together toward common goals that benefit the whole organization rather than focus on individual agendas. This process can be painstaking since each party or stakeholder must know they can trust each other to speak frankly, knowing each will keep sensitive information confidential and that individuals will follow through on their promises and commitments. Working together toward a common goal can make secondary disagreements seem irrelevant or less important.

The shared goal may be to work together in ways that positively impact the organization or company for "the good of the order." Team members who work together on different projects within an organization share common goals. Resolving a simple dispute could be more important than risking discord and disruption that could hinder progress.

To review, see:

• Resolving Conflict
• How to Make Teams Work Effectively
• Conflict Resolution – a Redefinition
• Project Completion
• Teaching about Conflict Resolution
• Five Reasons to Tell the Hard Truth to Underperformers

4l. List some common methods of progressive discipline

• What is progressive discipline?

There are usually two reasons for disciplining employees: performance issues and misconduct. Poor performance is usually due to a lack of training, skills, communication, or motivation. It can often be solved with coaching and performance management. Misconduct is more serious because it is deliberate and involves acts of defiance. Misconduct requires progressive discipline and termination in extreme cases. Grounds for immediate termination include theft, fraud, embezzlement, and lack of motivation.

Progressive discipline involves employing increasingly severe steps or measures when an employee fails to correct problems after being given a reasonable opportunity. The underlying principle is to use the least severe action necessary to correct the behavior or situation. For example, these steps may include verbal counseling, a written warning, suspension without pay, and termination. Employees should be able to correct the problem or behavior after each step or risk termination.

The employer should document the steps taken during a progressive discipline program. They should have just cause for termination or provide sufficient notice or severance after a probationary period.

To review, see Have a Performance Conversation with an Employee and Progressive Discipline and Termination Processes.

4m. Discuss ways managers engage workers who are not performing according to expectations

• What is the process for conducting a performance problem with an employee?

The purpose of a performance review should not be to punish an employee who is not meeting expectations. It is to improve their performance. This conversation gets more difficult the longer you wait because employees will assume their behavior is acceptable if no one tells them otherwise. Delaying disciplinary conversations can reduce team morale and undermine the leader's credibility.

To inform an employee that there is a problem, start by letting the employee know about your concern and sharing specific observations of their behavior. Explain how their behavior impacts the team and clarify the expected behavior. Encourage the employee to suggest solutions on how to address the situation. Communicate the potential consequences if the issue remains unresolved. Set a follow-up date that both parties agree upon and end the conversation by expressing your confidence in the employee's ability to make positive changes.

To review, see Have a Performance Conversation with an Employee and Progressive Discipline and Termination Processes.

Unit 4 Vocabulary

• accommodation
• aligned interests
• alternative dispute resolution
• arbitrator
• arbitration
• binding arbitration
• child labor
• collaborating
• collective bargaining
• common ground
• competition
• compromise
• conflict management
• conflict avoidance
• conflict resolution
• cross-examination
• defendant
• embezzlement
• enlarged interests
• enlightened interests
• fraud
• guild
• jury
• Landrum-Griffin Act of 1959
• legal standing
• mediation
• mediator
• misconduct
• National Labor Relations Act of 1935, Wagner Act
• non-binding arbitration
• plaintiff
• progressive discipline
• rebuttal
• risk analysis
• self-interests
• suspension without pay
• Taft-Hartley Act of 1947
• termination
• third party
• trial
• union
• verbal counseling

Unit 5: International and Cross-Cultural Negotiation

5a. Define culture

• What are culture and cultural awareness?

Culture refers to a group, community, or society's beliefs, values, mindsets, or practices. Our culture forms the basis for how we think and function. It encompasses how we communicate, dress, eat, interact, play, think, and work. Our culture shapes everything we do (including those who rebel against it). In the global workplace, we must remember that people from other countries are shaped by their cultures.

Cultural awareness refers to our ability to understand another culture's values and perspectives so we can interact with them effectively, even if we do not agree with or personally accept their practices. It is important to understand that no culture is right, wrong, better, or worse.

To review, see:

• Culture and Business
• Ethical and Cross-Cultural Negotiations
• Rate Your Cross-Cultural Relationships to Build Them

5b. Compare how cultural beliefs can influence negotiations

• How does understanding cultural norms influence negotiations?
• What are some challenges commonly faced in intercultural negotiation, and what are some strategies to overcome them?
• What is cultural intelligence?

People from different cultures may interpret the facts and purposes of negotiation differently. It helps to learn about the geography, history, and general practices of the culture to overcome these barriers. As in any negotiation, you should learn what each negotiating team hopes to gain to create a winning solution for both sides.

According to Earley, Ang, and Van Dyne, cultural intelligence (CQ) refers to our ability to adapt as we interact with people from different cultures regarding behavior, motivation, and metacognitive aspects. People with higher CQs can blend more easily into any environment to conduct business more effectively. Anders Brendstrup explains the importance of knowing and accepting the various idiosyncrasies of different cultures.

To review, see:

• Culture and Business
• Ethical and Cross-Cultural Negotiations
• Rate Your Cross-Cultural Relationships to Build Them

5c. Describe how nonverbal communications impact business negotiations

• Why is non-verbal communication important to business?

Nonverbal communication can carry greater truths than the spoken word. It is important to understand the teachings, perceptions, and societal norms of work colleagues from different cultures to avoid miscommunications using gestures that the other person might find insulting.

To review, see:

• Culture and Business
• Ethical and Cross-Cultural Negotiations
• Rate Your Cross-Cultural Relationships to Build Them

5d. Discuss the challenges multinational corporations face in managing their employees

• What are some challenges that multinational corporations encounter when managing their employees?
• What are some approaches to addressing incompatible customs and cultural norms?
• Why is "saving face" important in Chinese culture?

Training and managing employees in a culturally diverse multinational corporation can be challenging. Managers should recognize and respect different beliefs, cultural norms, and customs. For example, American employees often eat lunch at their desks to complete work tasks during the 30–60 minutes they have to eat lunch. However, in many countries, lunch is the main meal of the day; employees go home to eat lunch with their families and return to work from 5:00 until 8:00 p.m. These workers also spend much time getting to know each other personally since business is often based on trust and personal connections.

Many more traditional cultures have the concept of saving face, which refers to the deference and respect workers show their supervisors and elder co-workers. It can be rude, if not fatal, to ask too many questions or second-guess their opinions, especially in public. Bringing gifts to your superiors is expected and may boost your standing in many countries. However, many Western cultures frown upon this practice because it invites corruption.

To review, see:

• Culture and Business
• Ethical and Cross-Cultural Negotiations
• Rate Your Cross-Cultural Relationships to Build Them
• Cultural Awareness from Both Sides
• Finding a Common Language in Intercultural Negotiation
• The Importance of Face in China
• In China, Begin Slowly with Praise
• Business in Mexico
• Latino vs. Hispanic: Constructing a New America
• The Effect of Politics on Global Negotiations
• Be Proactive with Your Government Relationships
• Problems with Authorities Can Be an Opportunity

5e. List the seven dimensions of Trompenaars' model of national cultural differences

• What is Trompenaars' Model of National Culture, and how do its seven dimensions apply to cross-cultural and international negotiations?

Fons Trompenaars (1953–), a Dutch management consultant, created a model to compare general national cultural differences using seven dimensions. These descriptions can help participants anticipate and respond to cultural beliefs and practices during international negotiations. Even if you do not agree with these stereotypes, they may be helpful to consider.

1. Universalism vs. particularism
2. Individualism vs. communitarianism
3. Neutral vs. emotional
4. Specific vs. diffuse
5. Achievement vs. ascription
6. Sequential vs. synchronic
7. Internal vs. external control

To review, see Trompenaars' Model of National Culture Differences and Interview with Fons Trompenaars.

5f. List Geert Hofstede's six dimensions of culture

• What is Geert Hofstede's Dimensions of Culture Theory, and how do its six cultural dimensions apply to cross-cultural and international negotiations?

Geert Hofstede (1928–), a Dutch social psychologist, created a cultural dimensions framework that examines cross-cultural communication to compare national cultures across six dimensions. Hofstede describes how culture affects individual values and human behavior.

1. Power distance
2. Uncertainty avoidance
3. Individualism vs. collectivism
4. Masculinity vs. femininity
5. Long-term orientation
6. Indulgence vs. restraint

To review, see Types of Organizational Culture and Intercultural Communication.

5g. Explain how understanding culture and national identity affect cross-cultural or international negotiations

• Why should business leaders try to understand the economic, political, and social culture of a country or region where they wish to do business?

Negotiators should examine cultural differences at all levels. However, they should always remember that making gross generalizations and false stereotypes can be counter-productive. It helps to know the individuals they are dealing with, not just their culture, country, or company.

We can categorize cultural differences during international business negotiations into four areas: 1. language, 2. nonverbal behaviors, 3. values, and 4. thinking and decision-making processes. Business leaders who work in foreign countries are wise to build relationships with local government representatives to minimize and avoid legal and political pitfalls before they occur. For example, many Americans believe the laws in China are quite vague, and it is easy to cross legal or political lines while transacting business within their borders.

To review, see: 

• Cultural Awareness from Both Sides
• Finding a Common Language in Intercultural Negotiation
• The Importance of Face in China
• In China, Begin Slowly with Praise
• The United States and the Arab World
• Arab Women as Business Leaders Will Always Be the Exception
• Business in Mexico
• Latino vs. Hispanic: Constructing a New America
• Introductory Trade Issues: History, Institutions, and Legal Framework
• The World Trade Organization (WTO)
• The Effect of Politics on Global Negotiations
• Be Proactive with Your Government Relationships
• Problems with Authorities Can Be an Opportunity

5h. Describe political and legal issues that impact international negotiations

• Why can problems with authorities be an opportunity for businesses in foreign countries?

In countries where regulations and practices change frequently, it can be difficult for an off-shore business to remain "up to speed." Creating connections with government and political authorities provides an opportunity to build invaluable relationships that can help the business avoid roadblocks.

The media can exacerbate inaccurate cultural stereotypes. Businesses should adopt an approach that corresponds to the area where they work since populations in different countries (and even regions within countries) can have different cultural and political outlooks. Communication is essential to understanding and building trust. Employing teams in these countries to interact directly with native representatives can avoid misunderstandings and make all the difference. Anthony Cordesman states in his video, "An ethnocentric America can turn friends into enemies. They cannot turn enemies into friends".

To review, see:

• The United States and the Arab World
• Arab Women as Business Leaders Will Always Be the Exception
• Business in Mexico
• Latino vs. Hispanic: Constructing a New America
• The Effect of Politics on Global Negotiations
• Be Proactive with Your Government Relationships
• Problems with Authorities Can Be an Opportunity

5i. Describe the role the World Trade Organization plays in international business negotiations

• What is the main purpose of the General Agreement on Tariffs and Trade (GATT) and the World Trade Organization (WTO)?

In 1948, the United Nations created the General Agreement on Tariffs and Trade (GATT) to promote international trade by reducing and eliminating trade barriers, such as tariffs and quotas. During the Uruguay Round negotiations from 1986 to 1993, the member countries replaced GATT with the World Trade Organization (WTO), which first met on Jan. 1, 1995.

The WTO's main purpose is to serve as a forum for member countries to negotiate and adjudicate trade agreements and participate in dispute resolution for trade in goods, services, and intellectual property.

Part of WTO's nondiscrimination mandate is the designation of most-favored-nation status (MFN). Most-favored-nation status requires WTO members to apply the same terms and trade conditions to all other WTO members. In other words, if a country grants another country (even a non-WTO member) a special favor, every other WTO member must receive the same treatment.

To review, see The World Trade Organization (WTO).

Unit 5 Vocabulary

• achievement
• ascription
• collectivism
• communitarianism
• culture
• cultural awareness
• cultural norm
• cultural intelligence (CQ)
• diffuse
• emotional
• external control
• femininity
• Fons Trompenaars
  
• Geert Hofstede
• General Agreement on Tariffs and Trade (GATT)
• individualism
• indulgence
• internal control
• long-term orientation
• masculinity
• neutral
• nonverbal communication
• particularism
• power distance
• restraint
• saving face
• sequential
• specific
• synchronic
• uncertainty avoidance
• universalism
• values
• World Trade Organization (WTO)