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Conflict &Negotiation Process

Prof.Shabir Ahmad The Business School

University of kashmir June 24, 2010

As people with different backgrounds, interests, visions, values, needs and ideologies interact, a variety of conflicts often develop. A contemporary perspective on conflict recognizes that conflict is neither inherently good or bad but can be either depending on how it is dealt with.
Thus in dealing with conflict the critical issue is not so much the conflict itself but how it is managed.

Learning Objectives
1. Understand the nature of organizational conflict, its sources, and the way it arises between stakeholders and subunits 2. Identify the mechanisms by which managers and stakeholders can obtain power and use that power to influence decision making and resolve conflict in their favour

What is Organizational Conflict? The clash that occurs when the goal-directed behavior of one group blocks or thwarts the goals of another Although conflict is often perceived as something negative, research suggests that some conflict can actually improve organizational effectiveness
Can overcome inertia and lead to learning and change

What is Organizational Conflict?

Beyond a certain point, conflict becomes a cause for organizational decline
Conflict leads to inability to reach consensus and indecision Too much time spent on bargaining rather than acting swiftly to resolve problems

On balance, organizations should be open to conflict and recognize its value

Pondys Model of Organizational Conflict Conflict is a process that consists of five sequential stages Stage 1: Latent conflict: no outright conflict exists, but there is a potential for conflict because of several latent factors
Sources of conflict include:
Interdependence Difference in goals and priorities Bureaucratic factors Incompatible performance criteria Competition for scarce resources

Pondys Model of Organizational Conflict (cont.) Stage 2: Perceived conflict: subunits become aware of conflict and begin to analyze it
Conflict escalates as groups battle over the cause of conflict

Stage 3: Felt conflict: subunits respond emotionally to each other, and attitudes polarize into us-versusthem
Cooperation between units decreases What began as a small problem escalates into huge conflict

Pondys Model of Organizational Conflict (cont.) Stage 4: Manifest conflict: subunits try to get back at each other
Fighting and open aggression Passive aggression doing nothing Organizational effectiveness suffers

Stage 5: Conflict aftermath: conflict is resolved in some way

If sources of conflict are not resolved, the dispute will arise again Conflict aftermath

Pondys Model of Organizational Conflict


Functional Conflict

Dysfunctional conflict

A functional conflict is a confrontation Between groups that enhances and benefits the organizations performance. Functional conflict can contribute to Creativity, innovation, and improved decision-making among other benefits.

Dysfunctional conflict, on the other hand, Is that which harms the organization or hinders the achievement of organizational goals .


organizational group Interpersonal Intra-individual



Intra-individual Conflict
Frustration Model Goal Conflict
Role Conflict and Ambiguity

Sources of Interpersonal Conflict Personal differences Information deficiency Role Incompatibility Environment Stress

Johari Window
Known to self
Not known to self

Known to others

Open area

Blind area

Not know to others

Hidden area

Unknown area

Factors Contributing to Intergroup Behavior

The interdependent nature of the relationship between work groups Differences in goals Differences in perceptions

Reactions to Conflict
Competing Collaborating Avoiding Accommodating Compromising

Managing Conflict
Organizational conflict can escalate rapidly and sour an organizations culture
Managing conflict is an important priority

Organizations must balance the need to have some good conflict without letting it escalate into bad conflict Choice of conflict resolution method depends on the source of the problem

Managing Conflict: Resolution Strategies Acting at the level of structure

Because task interdependence and differences in goals produce conflict, alter the level of differentiation and integration to change relationships Increase the number of integrating roles Assign top managers to solve conflict Rethink the hierarchy/reporting chain

Managing Conflict: Resolution Strategies (cont.) Acting at the level of attitudes and individuals
Establish a procedural system that allows parties to air their grievances
Important for conflict between management and unions

Use a third-party negotiator Exchange/rotate/terminate individuals CEOs can also use their power to resolve conflicts and motivate units to cooperate

Strategies for Interpersonal Conflict resolution

Model the attitudes and behaviors you want your employees to emulate Identify the source of conflict, structural or interpersonal Focus on the task not personalities Address conflict in a timely way Learn for conflict AND Allow time to cool off Analyze the situation State the problem to the other person Leave the person an out

The common dilemma

Participants are friends. The goal is agreement.

Participants are adversaries.
The goal is victory. Be hard on the problem. Distrust others. Dont have to talk Dig in your position. Open with an extreme position Concede stubbornly Wont/threats

Make concessions to cultivate the relationship. Be soft on the people. Trust others. Make offers. Have to talk

Relationship over substance

Open with a reasonable position Concede generously Will/offers

Negotiation Skills
People : Separate the people from the problem. Interests: Focus on interests, not positions. Options: Generate a variety of possibilities before
before deciding what to do

Criteria: Insist that the result be based on some

objective standard.

Using the Seven Elements

Enter the Circle
Communication Relationship Interests


Create Value
If Yes

If No



Claim Value

Gather facts Create Positions



Build supporting arguments Fix a bottom line

Create a concession strategy: offer/counteroffer

Risks a too-narrow focus, rigidity, and aversion to learning Information overload Scripted, unpersuasive: crafted to justify our views rather than change theirs Often unrelated to a reality-tested, walk-away alternative Places commitment before anything else, limits option creation

7 Elements Preparation Checklist Interests

What are ours? What are theirs? Ask ourselves Why? What else? Are there other parties interests to consider? Which interests are shared, which are just different, and which are in conflict? What are the priorities of these various interests? Brainstorming what possible options might satisfy these interests? What might they or a third party propose? What possible arrangements might creatively satisfy each parties interests? Whats our BATNA? Whats theirs? Can we improve ours? Weaken theirs?



7 Elements Preparation Checklist Legitimacy

What precedents exist? Is there a standard operating procedure? Law? Custom? Market Value? Is there a fair process if we currently lack a single standard? What ought to govern an agreement? How can they justify the outcome to their constituents?

What is our authority? Theirs? What do we aspire to? What can we live with? What kind of commitment do we want at each stage of the negotiation process? Conditional agreement? Joint recommendation? Framework agreement? List of interests, options? Process agreement?

7 Elements Preparation Communication Checklist

What information do we want to listen for?

How can we show them they have been heard?

What message do we want left in their minds? What is our process strategy? How should we begin? What is our agenda? How might we close? How will we deal with surprises? What are the words we might use around the tough issue?

How is it today, and how would we like it to be in the future?
What actions can we take to build the relationship without conceding or buying the relationship?

Some strategic guidelines

Use LEGITIMACY Offer why an option is fair or defensible

Explain your reasoning

Look for fair procedures Use the Test of Reciprocity Be sure that you are open to persuasion Ensure Good Two-Way COMMUNICATION Negotiate the process Balance advocacy and inquiry Speak for yourself, not for them Listen and demonstrate that you have heard Test operating assumptions

(Let me show you why/where this came from) Before countering, inquire (Why? Based on what?)

Classic positional bargaining

Commitment (extreme position) Offer Last offer Final last offer Threat (BATNA)

Will there be any deal?

Final last offer Last offer Offer Commitment (extreme position) Threat (BATNA)

Some strategic guidelines

Acknowledge each BATNA as a choice Reality test theirs How well does it satisfy their interests? Consider sharing yours as a decision you face Use BATNA discussions as an opportunity: To learn about interests To invite options that exceed all BATNAs COMMITMENT with care, after learning all you can Commit early to process Commit to substance at the end of the process Review each partys understanding, document if needed Ask if it has the necessary detail to be implemented: who, what, where, when and how

Some strategic guidelines

Clarify INTERESTS, not positions Ask Why?, What else?, In what order? Share some of your interests Share and test your understanding of theirs Solicit criticism of possible options Invent OPTIONS for joint gain Jointly brainstorm multiple options Separate inventing from deciding Break up decision making
Option generation Option evaluation/refinement Commitment to an option

Some strategic guidelines

Deal with RELATIONSHIPS and substance, each on its own merits Be unconditionally constructive on the

relationship Trustworthy, even if not trusting Understanding, even if not agreeing Accepting the person, even if not their behavior Separate the people from the problem Use interests, options, legitimacy to address the problem Discuss relationship issues separately and explicitly CCBD Consider Consulting Before Deciding

Common errors for both

Assumes a choice: RELATIONSHIP or



Focuses on positions, ignores INTERESTS Ignores LEGITIMACY Mixes inventing and deciding - limits OPTIONS Places COMMITMENT before listening One-way COMMUNICATION Ignores real world ALTERNATIVES

Charting Negotiation Success

Effective negotiation skills: The key stages
P R E P A R A T I O N Strategy & Tactics S U C C E S S

Review and learning

Some common measures of success Winning

Get the most concessions

Break their bottom line

Get the last possible dollar They hurt more

Not losing
No one is happier

Avoid confrontation
Get any deal Just dont get cheated

Complex negotiations
Repeat over time Multi-issue Multi-party

Intangible Factors

External and Internal

Tangible Factors

A Seven Element framework for measuring success No agreement, OR an agreement that:

1. Is better than any walk-away ALTERNATIVE Esp. our BATNA our Best Alternative To a Negotiated Agreement 2. Satisfies INTERESTS: Ours, well Theirs, at least acceptably

3. 4. 5. 6.

Others, at least tolerably

Leaves no joint gains on the table: is among the best of many OPTIONS Uses LEGITIMACY: objective criteria or transparent processes allow parties to view mutual decisions as fair and sensible Contains COMMITMENTS that are well-planned, mutually understood, and operational Is reached efficiently with effective COMMUNICATION


Builds a good working RELATIONSHIP among the parties

Conflict outcomes
I want you to:
Lose Win 2

I want to:

1 Lose- Lose 3

4 Win-Win



Thank You