Chapter 12 Conflict, Negotiation, Power, and Politics

1. Chapter 12Conflict, Negotiation, Power, and Politics Michael A. Hitt C. Chet Miller Adrienne Colella Slides by Ralph R. Braithwaite

2. Green Conflict Michael Dell Exploring Behavior in Action Do you think companies are becoming more aware of the impact of their businesses on the environment? Can the goals of environmental and conservation groups be compatible with the goals of businesses? Why or why not? What are the upside gains for businesses that become more environmentally friendly? What are the consequences if they don’t?

3. Knowledge Objectives • Explain how conflict can be either functional or dysfunctional, and distinguish among various types of conflict. • Discuss common causes of conflict. • Describe conflict escalation and the various outcomes of conflict. • Explain how people respond to conflict and under what circumstances each type of response is best. • Understand how organizations can manage conflict. • Describe the basic negotiation process, strategies, and tactics. • Explain why organizations must have power to function, and discuss how people gain power in organizations. • Define organizational politics and the tactics used to carry out political behavior.

4. The Nature of Conflict DysfunctionalConflict FunctionalConflict Conflict

5. Effects of Conflict Effects onIndividuals Effects onBehavior Effects on InterpersonalRelationships Adapted from Exhibit 12-1: Effects of Conflict

6. Improved Problem Solving Facilitation of Change Enhanced Morale and Cohesion Potential Benefits of Conflict Spontaneity in Communication Stimulation of Creativity Functional Consequences

7. Types of Conflict PersonalConflict SubstantiveConflict ProceduralConflict

8. High Substantive Conflict Personal Conflict Procedural Conflict Task Performance Low Low Degree of Conflict High Effects of Types of Conflict on Task Performance Adapted from Exhibit 12-2: The Effects of Different Types of Conflict on Task Performance

9. Structural Factors History Communication Conflict Individual Characteristics Cognitive Factors Causes of Conflict

10. Un-United What were some of the conflicts that United was experiencing even before September 11, 2001? What could Jim Goodwin, United’s CEO, have done differently? How would you characterize the relationship between union and management? What could each side have done to more effectively deal with the issues the organization was experiencing? Do you think United will survive? ExperiencingStrategic OB

11. Rosie vs. Donald What was your reaction to the escalating conflict between Rosie O’Donnell and Donald Trump? Was anything ever resolved between the two of them? Do you agree that “each of the parties harmed the other but did equal harm to themselves”? What has been your experience with escalating conflict? ExperiencingStrategic OB

12. Conflict Escalation

13. Win-Lose Win-Win Compromise Lose-Lose Lose-Win Conflict Outcomes High Degree of Satisfaction of Party A’s Concern Degree of Satisfaction of Party B’s Concern Low High Adapted from Exhibit 12-3: Possible Conflict Outcomes

14. Responses to Conflict High Competing Collaborating Compromising Assertiveness Avoiding Accommodating Low Cooperativeness High

15. Negotiation A process by which parties with different preferences and interests attempt to agree on a solution.

16. Negotiation Strategies DistributiveBargaining IntegrativeBargaining

17. Distributive Tactics Integrative Tactics Attitudinal Structuring Tactics Negotiation Tactics Adapted from Exhibit 12-4: Negotiation Tactics

18. The Negotiation Process BATNA Preparation Closing theDeal Determiningthe NegotiationProcess Negotiating theAgreement

19. Costly Conflict Resolution ManagerialAdvice • Salary negotiations – classic case of conflict • Do your homework • Determine your BATNA • Know what salary you want • Never make vague counteroffers • Avoid a hard stand – winner’s remorse • Be realistic • Be polite • Never inflate past salary or experience • Calculate benefits as part of the package • Don’t play “hard to get” when little bargaining power

20. Power The ability of those who hold it to achieve outcomes they desire. The ability of one person to get another person to do something that he or she would not normally do. Persuasion is often the exercise of power.

21. Referent Power Coercive Power Legitimate Power Reward Power Expert Power Bases of Power

22. Michael Eisner An Example of Power • Eisner had a great deal of legitimate power. • Eisner lavished attention on board members, important investors, Disney family members, and others. • Eisner limited access to and controlled key information. • Eisner divided those who might oppose him and made himself indispensable. • Eisner restricted the power of others. Did he use his power for the good of the organization?

23. Strategic Contingencies Model People and organizational units gain power by being able to address the major problems and issues faced by the organization. • People need to identify strategic contingencies faced by an organization and gain control over them • Anyone who can help reduce uncertainties faced by the organization will gain power • People who are irreplaceable have power • Power can result from controlling the decision process, either by setting parameters on the types of solutions that are acceptable or by controlling the range of alternatives to be considered

24. Organizational Politics • Behavior that is directed toward furthering one’s own self-interests without concern for the interests or well-being of others • Goal of political behavior is to exert influence on others • Most managers and associates (70%) feel they have been harmed by political behavior of others • Fewer managers and associates (45%) feel they have gained power and influence by acting politically

25. Levels of Politics Individual Group An associate who usespolitics to suit his or herbest interests – takingsole credit for a groupproject for example Often in the formof coalitions – agroup whose membersact together toactively pursuea common interest

26. Consultation PersonalAppeal Ingratiation Political Tactics RationalPersuasion InspirationalAppeal Pressure Legitimizing Coalition Exchange

27. Political Skill The ability to effectively understand others at work and to use this knowledge to enhance one’s own objectives. People with strong political skills: • Find it easy to imagine themselves in others’ positions or see their points of view • Can understand situations, determine the best response and adjust their behavior accordingly • Develop large networks and are known by many people • Easily gain cooperation of others • Make others feel at ease

28. The Strategic Lens • Can you describe a situation in which conflict was functional (i.e., had positive outcomes)? If so, in what ways was the conflict functional? • A strategic leader must use power in many actions that he or she takes. In what ways can he or she exercise this power to achieve positive outcomes? • How can knowledge of conflict, negotiations, power, and politics in organizations help you be more successful in your career? Please be specific.

29. Questions