Managing Conflict within Organizations through Negotiations

Abstract

This article will focus on negotiation. Negotiation, as a tool of conflict management and conflict resolution in modern business organizations, will be described and analyzed in the following sections. The article will provide an overview of organizational conflict and conflict management. The role of the conflict manager will be described. The article will include a discussion and analysis of the main models, tactics, and strategies for negotiation. Integrative and distributive approaches to negotiation will be addressed.

Keywords Conflict Management; Conflict Resolution; Distributive; Integrative; Negotiation; Organizational Conflict

Management > Managing Conflict within Organizations through Negotiations

Overview

Negotiation, which refers to the process of bargaining preceding an agreement, is part of a larger process of managing conflict within organizations. While this article focuses on business negotiations, negotiation should be understood as a central and fundamental conflict resolution and management tool used by individuals, governments, and businesses alike. Negotiation skills, used to manage interpersonal, inter-group, inter-organizational, and international conflict, are crucial for participation in the modern business world. Organizational conflict and organizational change, and related negotiation mechanisms and tools for managing these processes, are characteristic of current business practices across businesses and industries.

Changes in contemporary business practices are causing the role of negotiation in business to evolve from conflict resolution to conflict management. In the twenty-first century, private sector organizations are increasingly moving from traditional authoritative, hierarchical structures to cooperative, team-based structures. The new team-based model of organizations, dependent upon cooperation and functioning work relationships, requires high-level knowledge of negotiation skills, conflict management skills, and mediation tactics. This structural change is occurring in large part as a result of globalization and its related processes, as well as the Internet and related technologies. Businesses and industries are increasingly transnational, decentralized operations. Goods and services may be produced in one region and sold in another. Telecommuting is a common work choice made in businesses with virtual rather than brick-and-mortar headquarters and stores. The increased pace of technological development and innovation requires businesses to become learning organizations to remain competitive in the marketplace. Cooperative management and participatory problem solving, both requiring negotiation skills, are common in team-based, decentralized business organizations. Furthermore, a culture that includes conflict as creative tension but not as a destructive force is an element of successful team-based organizations (Boni & Weingart, 2012).

Negotiation, as a tool of conflict management in modern business organizations, will be described and analyzed in this article. The following sections provide an overview of organizational conflict and conflict management. These sections will serve as the foundation for a discussion and analysis of negotiation, mediation, and the relationship between negotiation and conflict management.

Organizational Conflict

Organizational conflict, which refers to an interactive process manifested in incompatibility, disagreement, or dissonance within or between social entities, creates organizational change. Types of conflict include interpersonal, inter-group, inter-organizational, and international conflict. Conflict is a social process. Contextual antecedents, such as individual, team, project, and organizational characteristics, influence and may exacerbate conflict (Barki & Hartwick, 2001). The conflict process can be positive or negative. Functional conflict creates positive change within the organization. Dysfunctional conflict creates negative change within the organization. Organizational conflict can arise from problems within work activities as well as incompatible preferences and goals.

Singleton, Toombs, Taneja, Larkin, and Pryor (2011) suggest that definitions of conflict will differ depending on the level of volatility, or perceived volatility, in the conflict. In the least volatile realm, the word conflict implies dissension, disagreement, opposition, and lack of consensus among two or more people. In the most volatile realm, the implication is associated with animosity, anger, antagonistic words and/or behavior, and increasing levels of frustration. In either case, those involved in the conflict should understand the difference between functional and dysfunctional conflict and the extent to which conflict management and conflict resolution theories and tools are needed.

Occurrence of Organization Conflict

Organizational conflict often occurs in the following situations and scenarios (Rahim, 2002):

  • Parties are required to engage in an activity that is incongruent with their needs or interests.
  • Parties hold behavioral preferences that are incompatible with another person's implementation of their preferences.
  • Parties want some mutually desirable resource that is in short supply.
  • Parties possess attitudes, values, skills, and goals that are appropriate for directing their behavior but contradict the attitudes, values, skills, and goals held by others within an organization.
  • Two parties have contradictory preferences regarding their joint actions.

Interpersonal Conflict

"Interpersonal conflict" refers to a phenomenon that occurs between interdependent parties as they experience negative emotional reactions to perceived disagreements and interference with the attainment of their goals. Interpersonal conflict within organizations often occurs on project teams involving multiple parties with potentially conflicting agendas, goals, styles, personalities, and objectives. Symptoms of interpersonal conflict include hostility, jealousy, steamrolling, poor communication, political maneuvering, a proliferation of technical rules, norms, and regulations, frustration, and low morale. Interpersonal conflict is characterized by interdependence, disagreement, interference, and negative emotion. Interpersonal conflict within organizations can produce positive or negative results or change. Examples of negative outcomes from interpersonal conflict include distrust of others, hostility, decreased group coordination and cohesiveness, reduced job satisfaction and motivation, higher absenteeism and turnover, grievances, and lower performance and productivity. Examples of positive outcomes from interpersonal conflict include greater self-awareness, creativity, adaptation, and learning (Barki & Hartwick, 2001). Additionally, if dealt with correctly, interpersonal conflict can promote enhanced listening skills, create healthy boundaries, and enhance listening skills (Campbell & Guide, 2016).

Diagnosis of Organizational Conflict

Most people, groups, and organizations have conflict thresholds that must be exceeded for conflict to occur. Managers are generally responsible for the diagnosis of organizational conflict. The diagnosis of organizational conflict generally specifies the type of conflict, parties involved, and the level and type of intervention needed. A diagnosis should indicate whether there is a need for an intervention and the type of intervention needed.

Goals & Objectives of Intervention

Interventions in situations of organizational crisis are designed to accomplish the following goals and objectives (Rahim, 2002):

  • Interventions in situations of organizational crisis are designed to attain and maintain a moderate amount of substantive conflict in non-routine tasks at various levels.
  • Interventions in situations of organizational crisis are designed to reduce affective conflict at all levels.
  • Interventions in situations of organizational crisis are designed to enable the organizational members to select and use the appropriate styles of handling conflict so that various situations can be effectively dealt with.
  • Despite the fact that conflict often serves a function within organizations, conflict management most often attempts to reduce, resolve, and minimize conflict (Rahim, 2002).

Conflict Management

Managers across a wide range of businesses and industries oversee organizational conflict to ensure a successful resolution. Conflict is managed by organizational leaders, often referred to as "conflict managers." "Conflict management," which refers to designing effective macro-level strategies to minimize the dysfunctions of conflict and enhance the constructive functions of conflict in order to enhance learning and effectiveness in an organization, is recognized as its own field (Rahim, 2002). Examples of conflict management include negotiation, bargaining, mediation, and arbitration. There are two main categories of conflict management techniques, including conflict stimulation and conflict resolution. "Conflict stimulation" refers to the creation of conflict within organizations to promote change. Conflict resolution includes techniques (such as problem-solving, expansion of resources, avoidance, compromise, authoritative command, altering human variables, and altering structural variables) to reduce conflict within the organization.

Conflict Management Styles

Different conflict management styles have different outcomes. "Conflict management styles" refer to general strategies or behavioral orientations individuals adopt when dealing with conflicts. There are five different modes or styles of conflict management, including asserting, accommodating, compromising, problem-solving, and avoiding (Barki & Hartwick, 2001):

  • Asserting: Conflict within the asserting management approach is considered a win-lose situation. This approach is also referred to as "competing," "dominating," and "forcing."
  • Accommodating: The accommodating approach to conflict management involves individuals obliging or yielding to others' positions or cooperating in an attempt to smooth over conflicts. This approach is also referred to as "cooperating," "obliging," "yielding," and "sacrificing."
  • Compromising: The compromising approach to conflict management involves give-and-take behaviors where each party wins some and loses some. This approach is also referred to as "sharing" and "splitting the difference."
  • Problem-solving: The problem-solving approach to conflict management occurs when individuals in conflict try to fully satisfy the concerns of all parties. This approach is also referred to as "integrating," "cooperating," and "collaborating."
  • Avoiding: The avoiding approach to conflict management occurs when individuals are indifferent to the concerns of either party and refuse to act or participate in the conflict. This approach is also referred to as "withdrawing," "evading," "escaping," and "apathy."

Research has shown that demographic and personality traits affect which mode or style of conflict management individuals choose to employ in the workplace. For instance, gender research suggests women tend to accommodate, compromise, or avoid conflict, while men tend to assert or compete more (Sone, 1981; Cardona, 1995, qtd. in Prause & Mujtaba, 2015). Still, one should be wary of assigning gender-specific characteristics to styles conflict management in the workplace, just as one should in greater society. A person's dominant values influence their conflict management style: those who value self-transcendence (humility, cooperation, etc.) are more accommodating; those who prize conservation (self-image, recognition, etc.) are inclined to avoid conflict; those for whom self-enhancement (authority, power, wealth, etc.) is of prime import tend to dominate; and those with an openness to change (independence, curiosity, harmony) are likely to engage in problem-solving (Anjum, Karim & Bibi, 2014).

Criteria Necessary for Successful Conflict Resolution

Team-based organizations increasingly work to manage conflict rather than resolve conflict. All conflict management strategies, including asserting, accommodating, compromising, problem-solving, and avoiding, must satisfy certain criteria to be effective. These criteria include organizational learning and effectiveness, needs of stakeholders, and ethics:

  • Organizational learning and effectiveness: Conflict management strategies designed to enhance organizational learning, enhance critical and innovative thinking. Organizational members, including employees and managers, are expected to learn the process of conflict diagnosis and intervention.
  • Needs of stakeholders: Conflict management strategies, designed to satisfy the needs and expectations of the strategic stakeholders and to attain a balance among them, involve these parties in a problem-solving process that will lead to collective learning and organizational effectiveness. This conflict management strategy is intended to lead to stakeholder satisfaction and confidence.
  • Ethics: Conflict management designed to define organizational problems so that it leads to ethical actions that benefit humankind is referred to as "ethical conflict management."

Conflict management in a contemporary business organization's functions requires a supportive organizational culture. Employees in contemporary business organizations that value conflict management are encouraged by managers and leadership to engage in the process of diagnosis of and intervention in problems. An organizational culture that supports conflict management, encourages task-related conflict and discourages emotional conflict. It also supports organizational learning, risk-taking, openness, diverse viewpoints, continuous questioning, inquiry, and sharing of information and knowledge. Conflict management within a supportive organizational culture has the potential to enhance organizational learning that involves knowledge acquisition, knowledge distribution, information interpretation, and organizational memorization (Rahim, 2002).

Applications

Negotiation

In the business sector, negotiation is used within and between organizations. Negotiation is used in the commercial arena of buying and selling and solving industrial relations problems (Baines, 1994). "Commercial or business negotiation" refers to the process for resolving differences of opinion that arise in contract dealings between a buyer and seller. Commercial negotiations can involve a complex range of financial, business, and contractual issues. Planning, conducting, and analyzing the outcomes of commercial negotiations are key elements of a successful business (Ashcroft, 2004). Negotiations between individuals and organizations can be adversarial, coercive, emotional, cooperative, logical, courteous, or mutually advantageous. Negotiation of all kinds requires preparation, discussion, offers, and bargaining. While these are viewed as distinct stages, they build on one another. Preparation involves clarifying basic assumptions, selecting the negotiating team, choosing the leaders, discovering information, deciding on aims for the process, and arranging the physical environment or meeting place. The negotiating session involves introductions, presentation of cases, listening, offering options, summarizing, taking breaks, not rushing, making a deal when appropriate, and formalizing the negotiated agreement by signing a document (Baines, 1994).

Traditional Models of Negotiation

Traditionally, there have been three main models of negotiation: integrative, distributive, and interdependence (Donohue & Roberto, 1996):

  • Integrative model of negotiation: The integrative model of negotiation focuses on multiple issues, engages in problem-solving, offers concessions and acceptances, and focuses on mutually beneficial solutions.
  • Distributive model of negotiation: The distributive model of negotiation involves parties within a distributive orientation that may conceal information, exaggerate their positions, and use threats, attacks, demands, and repetitive arguments. Distributive negotiation behavior works to create a context that makes integration less acceptable.
  • Interdependence model of negotiation: The interdependence model of negotiation combines integrative and distributive models. Negotiators continuously and explicitly define their interdependence by offering information, strategies, and tactics that foster both cooperation and competition. The interdependence model exists along a continuum of integrative-distributive processes.

Contemporary Models of Negotiation

Changes in contemporary business practices due to globalization, new technology, and the emergence of team-based organizations have expanded the field of negotiation strategies to include additional approaches (and models) of negotiation such as power-based, interests-based, needs-based, dignity model, comprehensive systemic, SWOT, and stage:

  • Power-based model of negotiation: The power-based model of negotiation, based on distributive principles, is characterized by selfishness, aggressive behavior, and competition. Power-based disputants will work to maximize their individual self-interests (Chaterjee, 2006).
  • Interest-based model of negotiation: The interest-based model of negotiation, also referred to as "interest-based bargaining" or "mutual gains bargaining," refers to bargaining processes that are focused on understanding and building on interests and using problem-solving tools as a way of avoiding positional conflicts and achieving better outcomes for all stakeholders. Interest-based negotiation skills and tactics include active listening, converting positions into underlying needs or interests, joint data collection, brainstorming, joint task forces, facilitation, and effective communication with constituents (Fonstad, 2004). The interest-based model of negotiation, based on integrative negotiation, separates disputants from the problem, focuses on interests and not positions, generates a variety of possibilities before creating an agreement, and insists that the results be based on some objective criteria (Chaterjee, 2006).
  • Need-based model of negotiation: The human needs approach to conflict negotiation treats disputants as socio-psychological beings with certain needs that require fulfillment, not as rational actors interested in the furtherance of self-interest. The need-based approach assumes that conflict arises from a threat to fundamental needs. The need-based model of negotiation works toward win-win solutions (Chaterjee, 2006).
  • Dignity model of negotiation: The dignity model of negotiation assumes that situations of conflict arise from inhuman physical and verbal violence that compromise individual and group dignity. The dignity model of negotiation is based on the following premises: acceptance of humanity, validation of gender, class, and race identities, recognition of each party, understanding, fairness, security, inclusion, autonomy, trust, and access to relationship recovery (Chaterjee, 2006).
  • Comprehensive systemic model of negotiation: The comprehensive systemic model of negotiation addresses conflict as mediation between structure and agency. "Structure" refers to the broad framework that a social system functions within, and "agency" refers to individual and collective action (Chaterjee, 2006).
  • SWOT model of negotiation: The SWOT model of negotiation is used to evaluate the company's strengths, weaknesses, opportunities, and threats. This business management tool is an effective business negotiation strategy. Looking at a firm's production and marketing goals and assessing the firm's operations and management policies and practices in light of those goals, the SWOT model is used to plan negotiating tactics and strategy. Knowledge of a company's strengths, weaknesses, opportunities, and threats allows for savvy and informed negotiation (Cellich, 1990).
  • The stage model of negotiation: The stage model of negotiation specifies a fixed number of stages that negotiators move through as they interact and move toward closure. Negotiators begin in a distributive mode, concealing information and using aggressive and contentious strategies, and then move toward an integrative model emphasizing problem solving and supportive strategies (Donohue & Roberto, 1996).

Determining the Negotiation Model to be Used

Conflict managers, and individual parties or disputants, decide which negotiation model or approach to use based on multiple factors, including consistency of frame, nature of negotiator training, time allocated to negotiate, goals of disputants, and level of uncertainty (Donohue & Roberto, 1996):

  • Consistent frame: Numerous factors emerge during negotiations that push parties into a consistently integrative or distributive frame.
  • Nature of negotiator training: Negotiators are usually trained to use a specific sequence of behaviors in the course of their negotiation proceedings.
  • Time to negotiate: The amount of time available or allocated to negotiation sessions varies by negotiator, organization, business, and industry.
  • Goals of disputants: The goals of disputants involved in negotiation may initially be implicit or explicit as well as reasonable or unreasonable. Negotiators describe the key points of each disputant's case, claim, or position to make goals clear to everyone involved in the negotiation session.
  • Level of uncertainty: When disputants enter a negotiation session uncertain of their knowledge of the issues, their understanding of their opponent's position, or their ability to predict their opponent's goals and strategies, instability and volatility is likely to result.

Steps to Negotiation

Ultimately, despite the specific negotiation model or approach chosen by the negotiator, similar processes or sub-processes will be present in all negotiations. For example, negotiators are competitors with their counterparts in claiming scarce resources; negotiators are collaborators with their counterparts in creating value; negotiators are relationship-shapers; and negotiators are coalition managers and consensus builders within their own organization (Fonstad, 2004). In addition, all the negotiation models described above include the same basic steps. The standard steps of the negotiation process include preparation, the opening phase, reaching agreement, and closure (Manning & Robertson, 2004):

  • Preparation: Preparation establishes the issues, gathers quality information, prepares the case, and prepares for the encounter.
  • The opening phase: The opening phase creates a positive climate in which disputants state their individual cases.
  • Reach agreement: Reaching agreement involves disputants challenging the opponent's case, responding to challenges, making concessions, and trading, linking, and moving to reach agreement.
  • Closure: Closure summarizes and records agreements as well as establishes monitoring and review procedures.

Issues & Variables that Impact Negotiation Processes

Issues and variables that impact all steps of the negotiation process described above include clarity of focus, flexibility of strategy, win-win values, and interactive skills (Manning & Robertson, 2004):

  • Clarity of focus: Clarity of focus includes defining the issues, having a clear and simple case, using different types of information from a variety of sources, taking time before making decisions, agreeing to the outcome, monitoring, and reviewing.
  • Flexibility of strategy: Flexibility of strategy involves finding out about the other party and what they want, taking a long-term perspective, planning around issues rather than in a strict sequence, using concessions, adjournments, and doing whatever is necessary to reach an agreement.
  • Win-win values: Win-win values involve having respect for the other party and what they want, considering a wide range of options and outcomes, ensuring both parties clearly present their case and cooperating openly to achieve mutually acceptable outcomes.
  • Interactive skills: Interactive skills involve showing personal warmth, seeking information and clarification throughout, summarizing and testing understanding of what is said, and being open and non-defensive.

Negotiation has the potential to manage conflict and promote collaboration, learning, and more effective business operations. If the negotiation process is ineffective and conflict persists within the organization or between parties, then parties or disputants move toward mediation or arbitration. Mediation refers to the use of a third party in the negotiation process to facilitate a resolution through persuasion or alternative ideas. Arbitration refers to the involvement of a neutral third party in the negotiation process who has the authority to decide on an agreement. Mediation is one of a group of alternative methods to resolve business disputes, including arbitration, mini-trials, expanded use of value billing, and alternative fee arrangements with counsel. Mediation of business disputes often allows disputants to avoid filing a lawsuit entirely (Berman, 1994). Mediation is a dispute resolution tool used to settle disputes between individuals, companies, workers, and states that fosters agreement and reduces conflict. Mediators or arbitrators are disinterested and neutral third parties (Greig, 2005).

Conflict Management and Telecommuting

During the COVID-19 pandemic many began working remotely. As lockdown restrictions were lifted, many companies allowed employees to continue to work outside of the office. Conflict management was forced to adapt to these changes as conflict began occurring digitally and often nonverbally through email. Eighty-one percent of remote workers reported experiencing some type of workplace conflict. Misunderstanding and confusion were also more likely to occur without physical, face-to-face communication, and minor disagreements more easily escalated. Managers must incorporate several strategies to address remote workplace conflict, but studies have shown that over-communication and direct and immediate acknowledgement of conflict are two that can be easily implemented (O’Connell, 2021).

Conclusion

Ultimately, conflict management strategies, which range from negotiating, asserting, accommodating, compromising, problem-solving, and avoiding, serve to minimize conflicts at various levels as well as work to attain and maintain a moderate amount of substantive conflict to promote healthy change and growth within business organizations. Conflict managers have the responsibility to select and use the appropriate conflict management strategy for the conflict and the disputants (Rahim, 2002). General guidelines for negotiating, relevant to all the negotiation models described in this article, including taking time to break the ice, presenting the case, listening, being prepared to suggest many options, summarizing regularly, and being prepared to take a break when negotiation stalls (Baines, 1994). Negotiation outcomes tend to vary based on the perspective and orientation of disputants. Parties with an integrative orientation view negotiation as a win-win endeavor. Parties with a distributive orientation view negotiation as a win-lose endeavor. Additionally, there is evidence that the perceived effectiveness and use of different conflict resolution behaviors vary across cultures (Sadri, 2013). Conflict managers must assess the positional bias of each participant to ensure a successful negotiation outcome for all involved.

Terms & Concepts

Arbitration: The involvement of a neutral third party in the negotiation process who has the authority to decide an agreement.

Conflict: The opposition of persons or forces that create tension; it occurs when people hold mutually exclusive goals or values.

Conflict Management: The use of resolution and management techniques to achieve a desired level of conflict.

Conflict Resolution: The use of techniques to create civility, harmony, or consensus between both sides of a conflict.

Conflict Stimulation: The creation of conflict in an organization to promote change and growth.

Disputants: Parties involved in a disagreement.

Distributive Negotiation: Negotiation that seeks to divide a fixed amount of resources.

Dysfunctional Conflict: Conflict that hurts or sabotages group performance.

Functional Conflict: Conflict that improves the performance of the group.

Integrative Negotiation: Negotiation that seeks a settlement in which both sides of the conflict win or profit.

Mediation: The use of a third party in the negotiation process to facilitate a resolution through persuasion or alternative ideas.

Negotiation: The process of bargaining that precedes an agreement.

Organization: A goal-oriented social grouping.

Bibliography

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O'Connell, B. (2021, April 6). Settling conflicts in a remote-work world. SHRM. Retrieved June 4, 2023, from https://www.shrm.org/resourcesandtools/hr-topics/people-managers/pages/remote-worker-conflict-.aspx

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Sadri, G. (2013). Choosing conflict resolution by culture. Industrial Management, 55, 10–15. Retrieved November 5, 2013, from EBSCO online database Business Source Complete. http://search.ebscohost.com/login.aspx?direct=true&db=bth&AN=90447258&site=ehost-live

Singleton, R., Toombs, L.A., Taneja, S., Larkin, C., & Pryor, M. (2011). Workplace conflict: a strategic leadership imperative. International Journal of Business & Public Administration, 8, 149–163. Retrieved November 5, 2013, from EBSCO online database Business Source Complete. http://search.ebscohost.com/login.aspx?direct=true&db=bth&AN=60073584&site=ehost-live

Suggested Reading

Adair, W., & Brett, J. (2005). The negotiation dance: time, culture, and behavioral sequences in negotiation. Organization Science, 16, 33–51. Retrieved May 31, 2007, from EBSCO online database Business Source Complete. http://search.ebscohost.com/login.aspx?direct=true&db=bth&AN=16285252&site=ehost-live

Hunt, C., & Kernan, M. (2005). Framing negotiations in affective terms: methodological and preliminary theoretical findings. International Journal of Conflict Management, 16, 128–156. Retrieved May 31, 2007, from EBSCO online database Business Source Complete. http://search.ebscohost.com/login.aspx?direct=true&db=bth&AN=21409072&site=ehost-live

McKersie, R., Eaton, S., & Kochan, T. (2004, January). Kaiser Permanente: Using interest-based negotiations to craft a new collective bargaining agreement. Negotiation Journal, 20, 13–35. Retrieved May 31, 2007, from EBSCO online database Business Source Complete. http://search.ebscohost.com/login.aspx?direct=true&db=bth&AN=18353379&site=ehost-live

Rosenthal, M. (2015). Mediating conflict. Training, 52(4), 72. Retrieved December 10, 2015, from EBSCO online database Business Source Premier. http://search.ebscohost.com/login.aspx?direct=true&db=buh&AN=103722592&site=bsi-live

Essay by Simone I. Flynn, Ph.D.

Dr. Simone I. Flynn earned her Doctorate in cultural anthropology from Yale University, where she wrote a dissertation on Internet communities. She is a writer, researcher, and teacher in Amherst, Massachusetts.