Business 20
Lecture #13: Managing People & Power, Influence,
and Negotiation
Why Are People Hard to
Manage?
Business 20
D. Sherwood
¡  People have Emotions, Beliefs and Feelings
¡  Individual perceptions, evaluations, and
thoughts about an issue or event
¡  Subjective, Inconsistent, Irrational
¡  Emotions, Beliefs and Feelings Drive People’s
Behaviors and Attitudes
¡  People react differently to situations
¡  Subjective, Inconsistent, Irrational
Model of Behavior
Business 20
D. Sherwood
Perceived Environment
Cognitive process
Attitudes
Beliefs
Feelings
Emotions
Behavior
Behavioral
Intentions
Business 20
D. Sherwood
Cognitive Dissonance
Business 20
D. Sherwood
An uncomfortable tension
experienced when behavior
is inconsistent with our
attitudes.
Cognitive Dissonance
Depends on how much the
behavior is:
Public
Important
Voluntary
Inspiring Employees
Business 20
D. Sherwood
¡ Don’t just ask for worker input – use it and reward
them for it.
¡ Tell your people you care about them and show
them with your actions
¡ Show employees what they are learning and
help them to continually grow
¡ Support people when they make a mistake and
complement them when they don’t
¡ Set clear goals and celebrate accomplishments
Source: Business Week, May 1, 2006
EVLN Dissatisfaction
Model
EXIT – leaving the
organization,
transferring to another
work unit, or at least
trying to make these
exits
LOYALTY – Employees
who respond to
dissatisfaction by
patiently waiting.
Business 20
D. Sherwood
VOICE – any attempt to
change, rather than
escape from, a
dissatisfying situation.
NEGLECT – reducing work
effort, paying less attention
to quality, and increasing
absenteeism and lateness
Employee-CustomerProfit-Chain Model
Organizational Practices
Employee satisfaction with job
and company
• Lower turnover
• Friendly service
• Motivated staff
Business 20
D. Sherwood
Higher Revenue and Profits
• Satisfied clients
• More returning clients
• More client referrals
Clients perceive higher-value
service
Causes of Stress
for College Students
Business 20
D. Sherwood
¡ Change – a big life change, like entering a
university
¡ Loss – someone close to you
¡ Uncertain Future – thinking about your career
¡ Wasting Time
¡ Procrastination
¡ Disorganization
¡ Lack of Interest
¡ Burnout / Exhaustion
¡ Unnecessary perfectionism
¡ Visitors / Telephone Calls
Source: Health Information, University of Ottawa
Causes of Stress
Business 20
D. Sherwood
Low Task
Control
Work
Overload
Harassment and Incivility Psychological harassment Sexual harassment
Consequences of Stress
Business 20
D. Sherwood
Muscle pain
Impaired job
performance
Job dissatisfaction
Poor decision
making
Tension headaches
Workplace accidents
Consequences
Depression
Lower organizational
commitment
Cardiovascular disease
Aggressive behavior
Moodiness
Workplace-Related Stress
Management Practices
Stress Management
Strategy
Examples
Withdraw from the stressor.
Work breaks, days off, vacations, and
sabbaticals.
Change stress perceptions.
Control stress consequences.
Receive social support.
Remove the stressor.
Increasing employee confidence,
providing humor.
Relaxation and meditation techniques,
wellness programs.
Supportive leadership, social
interaction, support groups.
Reassign employees; minimize noise,
unsafe conditions, harassment.
Why is Power Important to
management Effectiveness?
¡  Organizations are political
entities in which different people
or units control scarce resources
¡  To meet goals, a manager must
realize that he/she is dependent
upon others
¡  Managers must work to create
power of his/her own in order to
influence others to get things
done
Business 20
D. Sherwood
Sources and
Contingencies of Power
Sources of power:
D. Sherwood
Influence over
organizational
outcomes
• Hierarchical position
• Expertise
• Control over
information
Business 20
• Network of allies
Contingencies of
power:
• Individual attributes
• Substitutability
• Control over
resources (people,
capital, space, etc.)
• Centrality
• Discretion
• Visibility
Power Through
Information Control
Wheel formation
(centralized information
flow)
Business 20
D. Sherwood
All-channel formation
(decentralized information
flow)
High
information
control
Influence Tactics
¡  Silent Authority – occurs when someone
complies with a request because of role
expectations and the requester’s legitimate
hierarchical power
Business 20
D. Sherwood
¡  Assertiveness – applying hierarchical power to
influence others
¡  Network Building – actively seeking and
establishing relationships with people who may
prove useful in the future
¡  Exchange – the promise of benefits or resources
in exchange for another party’s compliance
with your request
Influence Tactics
(cont.)
Business 20
D. Sherwood
¡  Coalition – a group of people that comes together to
cooperate in attaining a certain goal
¡  Ingratiation – attempts to increase the extent to which
someone likes you
¡  Impression Management – the process of actively
shaping one’s public image
¡  Persuasion – the use of reason through factual
evidence and logical arguments
¡  Inoculation Effect – warning an audience you are
trying to influence about opposing arguments
Conflict & Negotiation
Business 20
D. Sherwood
¡  Conflict– a situation that
arises when one party
perceives that its interests are
being opposed or negatively
influenced by another party
¡  Negotiation – an interpersonal
decision-making process by
which two or more parties try
to reach an agreement over
an issue that is being disputed
BATNA: Best
Alternative To a
Negotiated Agreement
Your initial
offer point
Your target
point
Business 20
D. Sherwood
Your
BATNA
Area of
potential
agreement
Opponent’s
BATNA
Opponent’s
target
point
Opponent’s
initial offer
point
Salary Negotiation
Business 20
D. Sherwood
Your initial
offer point
Your target
point
Your
BATNA
$15 / Hour
$13 / Hour
$11 / Hour
Area of
potential
agreement
Employer’s
BATNA
Employer’s
target point
Employer’s
initial offer
$12 / Hour
$10.50 / Hour
$10 / Hour
Negotiating Initial
Salary
Business 20
D. Sherwood
1.  Know the going rate
2.  Settle on a range, not a number
3.  Understand what they’re buying
4.  Don’t make the first move
5.  Make your case – recruiting is hard
6.  Offer options – Benefits and Hours
Matter
Source: The Wall Street Journal, August 22, 2006
Importance of Concessions
with Negotiations
1.  Enable the parties to move
toward the area of potential
agreement
2.  Symbolize each party’s
motivation to bargain in good
faith
3.  Tell the other party about the
relative importance of the
negotiating items
Business 20
D. Sherwood