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Case Study – Due Diligence

Conflict
• Conflict is a necessary part of human life.
• All conflicts are not bad.
• The way you resolve the conflicts determine the
value of the outcome.

Conflict occurs whenever:

• Disagreements exist in a social situation over issues
of substance.
• Emotional antagonisms cause frictions between
individuals or groups.
View of Conflicts
1. Functional (or constructive) conflict.

• Results in positive benefits to individuals, the

group, or the organization.
• Likely effects.
• Surfaces important problems so they can be addressed.
• Causes careful consideration of decisions.
• Causes reconsideration of decisions.
• Increases information available for decision making.
• Provides opportunities for creativity.
2. Dysfunctional (or destructive) conflict.

• Works to the disadvantage of individuals, the

group, or the organization.
• Likely effects:
• Diverts energies.
• Harms group cohesion.
• Promotes interpersonal hostilities.
• Creates overall negative environment for
workers.
How to manage conflicts???

• Direct conflict management approaches are

based on the relative emphasis that a person
places on assertiveness and cooperativeness.
– Assertiveness.
• Attempting to satisfy one’s own concerns.
• Unassertive versus assertive.
– Cooperativeness.
• Attempting to satisfy the other party’s concern.
• Uncooperative versus cooperative.
Avoidance

• Unassertive and uncooperative.

• Downplaying disagreement.

• Failing to participate in the situation

and/or staying neutral at all costs.
Accommodation &
Smoothing

• Unassertive and cooperative.

• Letting the other’s wishes rule.

• Smoothing over differences to maintain

superficial harmony.
Compromise

• Moderate assertiveness and moderate

cooperativeness.

• Working toward partial satisfaction of

everyone’s concerns.

• Seeking acceptable rather than optimal

solutions so that no one totally wins or
loses.
Competition & Authoritative Command

• Assertive and uncooperative.

• Working against the wishes of the other

party.

• Fighting to dominate in win/lose

competition.

• Forcing things to a favourable conclusion

through the exercise of authority.
Collaboration & Problem
Solving

• Assertive and cooperative.

• Seeking the satisfaction of everyone’s

concerns by working through differences.

• Finding and solving problems so

everyone gains as a result.
Negotiation
• Negotiation involves discussion to make agreements where
the parties involved have some difference of interest or
simply negotiation of how a task or project will be carried out.

• Negotiation involves a greater level of democracy in decision

making than consultation. In a negotiation there may be
considerable uncertainty about what the outcome will be. In
contrast managers who consult their employees may already
have decided the core of what they intend to do from the
outset.

• Managers will negotiate with trade unions and with individual

employees over work related issues.
Main features of
Negotiation
• 2 or more parties

• Something of value or interest to the parties

• Desire to engage in interaction

• Atleast some desire to accommodate

• Authority to honour the agreement or settlement

Negotiation Goals &
Outcomes
• Substance goals.
– Outcomes that relate to content issues.

• Relationship goals .
– Outcomes that relate to how well people
involved in the negotiations and any
constituencies they represent are able to
work with one another once the process is
concluded.
Effective Negotiation

• Occurs when substance issues are resolved

and working relationships are maintained or
improved.

• Criteria for an effective negotiation.

– Quality.
– Harmony.
– Efficiency.
Strategies involved in
Negotiation
1. Distributive Negotiation

• The key questions is: “Who is going to get this

resource?”
• “Hard” distributive negotiation.
– Each party holds out to get its own way.
• “Soft” distributive negotiation.
– One party is willing to make concessions to the
other party to get things over.
• Bargaining zone.
– The range between one party’s minimum
reservation point and the other party’s
maximum reservation point.
– A positive bargaining zone exists when the
two parties’ points overlap.
– A positive bargaining zone provides room
for negotiation.
2. Integrative negotiation.

• The key questions is: “How can the resource

best be utilized?”
• Is less confrontational than distributive
negotiation, and permits a broader range of
alternative solutions to be considered.
• Opportunity for a true win-win solution.
• Range of feasible negotiation tactics.
–Selective avoidance.
–Compromise.
–True collaboration.
Common Negotiation
Pitfalls
• The myth of the fixed pie.
• The possibility of escalating commitment.
• Negotiators often develop overconfidence in
their positions.
• Communication problems can cause
difficulties during a negotiation.
– Telling problem.
– Hearing problem.
Third Party Role in
Negotiation
• Arbitration.
– A third party acts as a “judge” and has the
power to issue a decision that is binding on
all disputing parties.

• Mediation.
– A neutral third party tries to engage the
disputing parties in a negotiated solution
through persuasion and rational argument.
Situations Requiring
Negotiations
• Informal Situations

• Formal Situations

• Unstructured Situations

• Structured Situations
 Informal Situation

• Allocation of work

• Problem solving meetings

• Target setting

• Performance counselling

• One – to – one discipline meetings

• Routine meetings

• Bipartite committee meetings

 Formal Situation
• Performance – review discussions
• Appraisal interviews
• Selection interviews
• Budgetary meetings
• Grievance meetings
• Works committee meetings
• Joint council meetings
• Agenda – based meetings
• Pre – decided bipartite meetings
Unstructured Situation

• Problem solving meetings

• Target setting

• Performance counselling

• One – to – one discipline meetings

• Routine meetings

• Bipartite committee meetings

 Structured Situation

• Performance review discussion

• Appraisal interviews
• Selection interviews
• Budgetary meetings
• Works committee meetings
• Joint council meetings
• Agenda – based meetings
• Pre – decided bipartite meetings
Negotiation Process

• Preparation

• Opening

• Bargaining

• Closure
Case Study – A salary
negotiation
A department manager of XYZ Ltd. was asked by his secretary for a rise of
10% in her salary. She was worth it. The problems was that 10 percent
represented a large raise compared to the 5% other employees had
received. Was there a creative both-win way out of this problem? As they
explored the possibilities, several ideas emerged. The company starts work
at 8am and closes at 5pm. The manager learned that his secretary
encountered heavy traffic every evening on the way home. They agreed to
have her work from 7:30am to 4:30pm. This saved her at least 20-25
minutes driving time. Certainly a benefit to her at little or no expense to
the company. They then studied her job in detail. Before long they jointly
developed a new description which gave her more responsibility, and, at
the same time, more interesting work. Both parties benefitted from the
changed scope of work. The raise itself was then discussed. A compromise
was reached by agreeing on a 6% raise for three months and then an
additional 2% later if the new responsibilities were adequately performed.