BUS403: Negotiations and Conflict Management (2016.A.01)

1a. Identify and explain the theory, processes, and practices of negotiation, conflict resolution, and relationship management

• Define and explain the difference between conflict resolution and negotiation.
• Define intrapersonal, interpersonal, and intergroup conflict.
• Define conflicts of substance, conflicts of value, conflicts of process, conflicts of misperceived differences, and relationship conflicts.

People participate in negotiations to find a mutually-agreeable solution to a disagreement, problem, or area of conflict. Their ability to negotiate a satisfactory resolution often depends on whether the parties share a common goal and how much they rely on each other (their level of interdependence).

For example, a successful negotiation may depend on how you feel about whether both sides should benefit from the resolution (a win-win solution) or one side should benefit more than the other (a win-lose). The losing side may be willing to accept a less agreeable solution today if they know they will benefit during a second negotiation later.

1b. Identify the differences between the competitive and cooperative approaches

• Define and name some benefits and drawbacks for negotiating with conflict avoidance, accommodation, competition, and compromise in mind.
• Define a collaborative and competitive negotiation style.
• When is it appropriate to use a collaborative or competitive style?

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? Will you be more competitive when negotiating with a car salesperson to obtain the lowest price even though you know they will receive less commission from the sale? Before choosing your negotiation strategy, consider how much you value your relationship with the other party and the possible outcome of your negotiation.

If you place a greater emphasis on preserving or creating a good relationship, you may decide to be more collaborative, to pursue a win-win outcome where each party benefits. If the outcome of your negotiation takes precedence (you want a lower price for your car purchase), you may decide to be more competitive to obtain a winning solution.

Review the levels of cooperation and competitiveness associated with different conflict-handling styles in this figure.

Conflict-Handling Styles

1c. Define the distinction between managing conflict and resolving conflict

• Define and describe some ways to overcome the following causes of workplace conflict: organizational structure, limited resources, task interdependence, incompatible goals, personality differences, and communication problems.
• When should a manager manage a conflict rather than resolve it?
• When should a manager resolve a conflict rather than manage it?

Many people use the terms conflict management and conflict resolution interchangeably. However, you may waste time, money, and opportunity if you choose to resolve an unsolvable problem or if you continue to manage a problem you could easily solve.

Conflict management refers to containing conflict rather than removing it. Conflict resolution occurs when you take steps to improve or remove a conflict situation, and all parties are satisfied or agree to strive for a win-win solution. Resolving these conflicts may require third-party intervention, such as diplomacy for straightforward negotiations, mediation, and arbitration.

For example, when resolving a business conflict, managers try to determine their company's best outcome. Is your relationship with an employee who produced shoddy work more important than retaining a client who is dissatisfied with the employee's poor performance? One manager may manage the conflict by looking for ways to improve the employee's performance and finding another way to placate their client. Conversely, another manager may prioritize retaining a valuable client and resolving the conflict by replacing the employee.

1d. Identify various objectives of and obstacles to successful negotiation

• Define and describe the five phases of negotiation.
• Explain strategies for determining your best alternative to a negotiated agreement (BATNA), seller's reservation, buyer's reservation, bargaining range, and the zone of possible agreement (ZOPA).
• Define concession.
• Define the distributive, integrative, and mixed-motive negotiation strategies.
• Identify some obstacles to a successful negotiation, such as overconfidence bias, hindsight bias, anchoring, framing bias, escalation of commitment.
• Describe some strategies for avoiding these obstacles.
• Define how negotiators may use a third party during an alternative dispute resolution (ADR).
• When should managers use mediation or arbitration to help resolve a dispute?

The five traditional negotiation phases include investigation, determining your best alternative to a negotiated agreement (BATNA), presentation, bargaining, and 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 concede certain concessions to obtain a more desired goal.

People enter into negotiations to add benefit, claim something they value, or create an acceptable solution to a problem. Unfortunately, people frequently fail to express their underlying concerns, issues, or goals when they state their position and supporting arguments. This failure to clearly identify and communicate goals and objectives creates many obstacles to achieving a successful outcome. Businesses may need to employ a third party when the original participants cannot arrive at an agreeable solution.

Review the five phases of negotiation, mediation, and arbitration in Negotiations. Review BATNA and ZOPA in Negotiation: Theory and Practice. Review obstacles to negotiation in Faulty Decision-Making.

 

1e. Explain how we can optimize our decision making

• Define groupthink and explain how it can contribute to suboptimal decision making.
• Define and explain the difference between consensus and majority rule.
• Explain why many people say that two heads are always better than one when making decisions.
• Define functional and dysfunctional conflict and explain how functional conflict benefits group decision making.
• Define and explain the difference between conflict management and conflict resolution.
• Define and provide an example of bullying in the workplace.
• Explain why managers should use conflict management or conflict resolution to address bullying.
• How should managers resolve interpersonal conflict?

Decision-making and problem-solving tools and models are available to help businesses solve problems systematically and rationally. While this course does not focus on decision-making tools in detail, we usually benefit from having a diversity of opinions and various ideas to choose from when deciding our best alternative or course of action. We negotiate from a position of strength when we can 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 involved.

We are frequently asked to make a decision, as a member of an informal group, business team, volunteer committee, or board of directors.

Group Decision-Making describes five types of group decisions:

1. Members identify alternatives but do not decide on a course of action (the authors call this a "plop");
2. Members delegate their decision-making to an expert;
3. Members reach a middle ground or take an average of all the opinions;
4. Members accept the decision of the majority or two-thirds of voting members;
5. Members reach a consensus in which everyone agrees with the decision.

Decision-Making in Groups describes eight negative characteristics of groupthink that can prevent groups from choosing the best alternative:

1. 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.

Review some pros and cons of individual versus group decision making in this figure.

Advantages and Disadvantages of Different Levels of Decision Making

Functional conflict can be a positive force for change in the workplace by fostering new, innovative, and more efficient ways to accomplish tasks or goals. However, promoting functional conflict in the workplace is not easy. It requires a delicate balance of encouraging people to challenge one another about their ideas, choices, and preferences without negativity. Unfortunately, misunderstandings and personal clashes can also create dysfunctional conflict and a caustic work environment.

Unit 1 Vocabulary

This vocabulary list includes some terms that may help you answer some of the review items above and some terms you should be familiar with to successfully complete the final exam for this course.

• Accommodative style
• Alternative dispute resolution
• Anchoring bias
• Arbitration
• Avoiding style
• Bargaining Tactics
• Better alternative to a negotiated agreement (BATNA)
• Bullying
• Buyer's reservation point
• Collaborative negotiation style
• Communication problems
• Competitive negotiation style
• Competition
• Compromise
• Conflict
• Conflict accommodation
• Conflict avoidance
• Conflict management
• Conflict of process
• Conflict of misperceived differences
• Conflict of substance
• Conflict of value
• Conflict resolution
• Consensus
• Distributive negotiation strategy
• Dysfunctional conflict
• Escalation of commitment
• Framing bias
• Functional conflict
• Groupthink
• Hindsight bias
• Incompatible goals
• Integrative negotiation strategy
• Intergroup conflict
• Interpersonal conflict
• Intrapersonal conflict
• Interests
• Limited resources
• Majority rule
• Manage
• Mediation
• Mixed motive negotiation strategy
• Organizational structure
• Overconfidence bias
• Personality differences
• Power
• Relationship conflict
• Relationship management
• Resolve
• Rights
• Seller's reservation point
• Task interdependence
• Zone of possible agreement (ZOPA)