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Managing Conflict within Organizations

through Negotiations
Management > Managing Conflict within Organizations through Negotiations

Table of Contents
Abstract
Overview
Organizational Conflict
Occurrence of Organization Conflict
Interpersonal Conflict
Diagnosis of Organizational Conflict

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 conflict manager
will be described. The article will include discussion and analysis of the main models, tactics, and strategies for negotiation.
Integrative and distributive approaches to negotiation will be
addressed.

Goals & Objectives of Intervention

Conflict Management
Conflict Management Styles
Criteria Necessary for Successful Conflict
Resolution

Applications
Negotiation
Traditional Models of Negotiation
Contemporary Models of Negotiation
Determining the Negotiation Model to be
Used
Steps to Negotiation
Issues & Variables that Impact Negotiation
Processes

Conclusion
Terms & Concepts
Bibliography
Suggested Reading

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,

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Managing Conflict within Organizations through Negotiations

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 dissention, disagreement,
opposition, and lack of consensus among two or more people. In
the most volatile realm, the implication is associated 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 whether, 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 his or her 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, steam rolling, 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 selfawareness, creativity, adaptation, and learning (Barki &
Hartwick, 2001).
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 level and type of intervention
needed. A diagnosis should indicate whether there is 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.

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Managing Conflict within Organizations through Negotiations

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 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, problemsolving, and avoiding (Barki & Hartwick, 2001):

Asserting: Conflict, within the asserting management ap-

proach, 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 conflict.
This approach is also referred to as withdrawing, evading,
escaping, and apathy.

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, problemsolving, 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 man-

agement 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 orga-

nizational 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; supports organizational learning; risk taking,
openness; diverse viewpoints; continuous questioning and
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 which 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

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Managing Conflict within Organizations through Negotiations

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 interdepen-

dence 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 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-interest (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 ap-

proach to conflict negotiation treats disputants as sociopsychological beings with certain needs which 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 winwin 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, 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 nego-

tiation 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 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 mode emphasizing problem solving and supportive strategies (Donohue & Roberto, 1996).

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Managing Conflict within Organizations through Negotiations

Determining the Negotiation Model to be Used

Issues & Variables that Impact Negotiation Processes

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):

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):

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 into a nego-

tiation 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 dis-

putants 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.

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 and using concessions,
adjournments, and doing whatever is necessary to reach
an agreement.

Win-win values: Win-win values involves 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
the filing of 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
are neutral third parties (Greig, 2005).

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

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Managing Conflict within Organizations through Negotiations

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, include 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 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 varies across cultures (Sadri, 2013).
Conflict managers must assess the positional bias of each participant to ensure a successful negotiation outcome for all involved.

Bibliography

Terms & Concepts

Bazerman, M., & Curhan, J. (2000). Negotiation. Annual

Review of Psychology, 51(1), 279. Retrieved May 31,
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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, har-

mony, 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 up 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 agree-

ment.

Organization: A goal-oriented social grouping.

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and Commercial Training,36(6/7), 229-233. Retrieved
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Barki, H., & Hartwick, J. (2001). Interpersonal conflict and
its management in information system development. MIS
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Managing Conflict within Organizations through Negotiations

Greig, J. (2005). Stepping into the fray: when do Mediators

mediate? American Journal of Political Science, 49(2),
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M. (2011). Workplace conflict: a strategic leadership
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Complete. http://search.ebscohost.com/login.aspx?direct=t
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Suggested Reading
Adair, W., & Brett, J. (2005). The negotiation dance: time,
culture, and behavioral sequences in negotiation.
Organization Science, 16(1), 33-51. Retrieved May 31,
2007, from EBSCO Online Database Business Source
Complete. http://search.ebscohost.com/login.aspx?direct=t
rue&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(2), 128-156. Retrieved May 31, 2007, from EBSCO
Online Database Business Source Complete. http://search.
ebscohost.com/login.aspx?direct=true&db=bth&AN=2140
9072&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(1), 13-35. Retrieved May 31, 2007, from
EBSCO Online Database Business Source Complete.
http://search.ebscohost.com/login.aspx?direct=true&db=bt
h&AN=18353379&site=ehost-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.

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