Chapter 12
Conflict,
Negotiation,
Power, and
Politics
Michael A. Hitt
C. Chet Miller
Adrienne Colella
Slides by Ralph R. Braithwaite
12-1
Green Conflict
Do you think companies are becoming more
Michael Dell 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?
Exploring Behavior in Action
12-2
Knowledge Objectives
1. Explain how conflict can be either functional or dysfunctional,
and distinguish among various types of conflict.
2. Discuss common causes of conflict.
3. Describe conflict escalation and the various outcomes of
conflict.
4. Explain how people respond to conflict and under what
circumstances each type of response is best.
5. Understand how organizations can manage conflict.
6. Describe the basic negotiation process, strategies, and
tactics.
7. Explain why organizations must have power to function, and
discuss how people gain power in organizations.
8. Define organizational politics and the tactics used to carry out
political behavior.
12-3
The Nature of Conflict
Dysfunctional
Conflict
Functional
Conflict
Conflict
12-4
Effects of Conflict
Effects on
Individuals
Effects on
Behavior
Effects on
Interpersonal
Relationships
Adapted from Exhibit 12-1: Effects of Conflict
12-5
Functional Consequences
Improved
Problem
Solving
Facilitation of
Change
Potential
Benefits of
Conflict
Stimulation of
Creativity
Enhanced
Morale and
Cohesion
Spontaneity in
Communication
12-6
Types of Conflict
Personal
Conflict
Substantive
Conflict
Procedural
Conflict
12-7
Effects of Types of Conflict on
Task Performance
High
Substantive Conflict
Task Performance
Personal Conflict
Procedural Conflict
Low
Low
Degree of Conflict
High
Adapted from Exhibit 12-2: The Effects of Different Types of Conflict on Task Performance
12-8
Causes of Conflict
Structural
Factors
Communication
History
Conflict
Individual
Characteristics
Cognitive
Factors
12-9
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?
Experiencing
Strategic OB
12-10
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?
Experiencing
Strategic OB
12-11
Conflict Escalation
12-12
High
Conflict Outcomes
Win-Lose
Win-Win
Compromise
Lose-Lose
Low
Lose-Win
Degree of Satisfaction
of Party B’s Concern
Adapted from Exhibit 12-3: Possible Conflict Outcomes
High
12-13
Responses to Conflict
High
Competing
Collaborating
Compromising
Avoiding
Low
Accommodating
Cooperativeness
High
12-14
Negotiation
A process by which parties with different
preferences and interests attempt to agree on a
solution.
12-15
Negotiation Strategies
Distributive
Bargaining
Integrative
Bargaining
12-16
Negotiation Tactics
Distributive Tactics
Integrative Tactics
Attitudinal Structuring Tactics
Adapted from Exhibit 12-4: Negotiation Tactics
12-17
The Negotiation Process
BATNA
Preparation
Determining
the Negotiation
Process
Closing the
Deal
Negotiating the
Agreement
12-18
Costly Conflict Resolution
Salary negotiations – classic case of conflict
Managerial
Advice
•
•
•
•
•
•
•
•
•
•
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
12-19
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.
12-20
Coercive
Power
Legitimate
Power
Reward Power
Bases of Power
Referent Power
Expert Power
12-21
An Example of Power
• Eisner had a great deal of legitimate power.
• Eisner lavished attention on board
Michael Eisner
•
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?
12-22
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
12-23
Organizational Politics
• Behavior that is directed toward furthering one’s own
self-interests without concern for the interests or wellbeing 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
12-24
Levels of Politics
Individual
Group
An associate who uses
politics to suit his or her
best interests – taking
sole credit for a group
project for example
Often in the form
of coalitions – a
group whose members
act together to
actively pursue
a common interest
12-25
Rational
Persuasion
Pressure
Consultation
Personal
Appeal
Political Tactics
Legitimizing
Coalition
Ingratiation
Inspirational
Appeal
Exchange
12-26
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
12-27
The Strategic Lens
1. Can you describe a situation in which conflict was
functional (i.e., had positive outcomes)? If so, in
what ways was the conflict functional?
2. 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?
3. How can knowledge of conflict, negotiations, power,
and politics in organizations help you be more
successful in your career? Please be specific.
12-28
Questions
12-29