CONFLICT RESOLUTION STRATEGIES NEGOTIATION : THE ART OF GIVE AND TAKE Negotiation involves discussions aimed at resolving conflict.

Procedural Steps for a typical Negotiation Process (i) Identify and Define the Problem (ii) Get the facts distinguish between facts and assumptions (iii) Generate Possible Solutions (iv) Evaluate Possible Solutions (v) Select Solutions (vi) Implement the Solutions (vii) Evaluate the Results Evaluating Desired Relationship Outcome People and organisations often enter negotiations driven by self-centred desires. However, negotiation should also be influenced by the relationship outcome the person or the organisation desires after the negotiation process is over. In other words, the type of negotiation strategy one chooses will directly affect the relationship they currently share and hope to develop. One way to evaluate relationship outcome is to look at relative power. The relative power of each channel member is roughly equivalent to that members dependence on the other. Boundary personnel instinctively evaluate the relative levels of power among channel members. Decisions to compete, retreat, accommodate, or collaborate when conflict arises is in large part based on this understanding of the existing relative power relationships. Conflict may arise from manifest power in the channel relationship. Manifest power is in evidence whenever channel members collectively vie for the upper hand in the interaction process. The frequency and intensity of conflict that emerges between two partners in marketing channels largely follows from whether the members perceive that the relationship supports or undermines their interests. Supportive relationships can act as incentives for continuing negotiation, even at the cost of short-term gains, particularly when the relationship is more highly valued than the stakes under dispute. Channel members should not select negotiating strategies until after they have evaluated what they and other channel members seek regarding the future of their relationship. Choosing a Negotiation Strategy Negotiation strategies can be divided into two broad types : (i) Predatory (ii) Symbiotic Predatory Negotiation Channel members who use predatory negotiation usually consider as weak or unsophisticated the idea of relationship sustaining bargaining sessions featuring information sharing, give and take, open communication, creativity, and an attitude of cultivating the common good. They view the economic pie as fixed, which means that any gains must be taken from another channel member. The predatory strategy follows from the view that conflict resolution is a hard and tough process in which neither participant is concerned with the others needs. Any possibility of a future relationship is considered less important than the gains that may be realised through winning this particular struggle. The name of the game in predatory negotiation is hardball, wherein each negotiator tries to gain as

much as possible by giving the other as little as possible. The object is to persuade the other channel member that they need what you have while you are only marginally interested in their offer. The nature of the solution eventually derived through hardball depends on who : (i) concedes slowest (ii) exaggerates the value of its concession the most while understating the value of the others allowances, and (iii) argues most forcefully The channel member who is willing to lose, conceal information, or accept only favourable settlements generally prevails. The most aggressive hardballers usually those possessing substantial channel power often make inflexible demands, while threatening to retaliate or walk away if their demands are not met. Jungle fighters view channels as dog-eat-dog places. They tend to be bold, innovative, entrepreneurial, and willing to take negotiating risks if they think the payoff is more success. Their view is that other channel members are working for them rather than with them. Such attitudes can occassionally show up in predatory negotiation styles. Toughness at the bargaining table means sticking to your position, letting your counterpart know that you mean business, and being unafraid to ask for concessions when doing so does not violate the sanctaury of the relationship. However, there are limits to how tough one should negotiate. Symbiotic Negotiation When two dissimilar organisms live together because doing so is mutually beneficial, then the phenomenon is termed Symbiosis. Symbiotic negotiation features attempts to create mutual value through trade-offs and bargaining. Symbiotic negotiators believe that conflict resolution is best achieved by being cooperative, imaginative and persistent in the persuit of mutual gains relative to the possibility of no agreement. Symbiotic negotiators stress the possibility of sharing information and open lines of communication. An open submission strategy involves one channel members concessions to another on all but the barest material aspects of the issue in conflict. This is done in an attempt to build a more productive relationship. The judgement that relationship building is the most desirable outcome possible from negotiation yields the joint-gains orientation necessary for a mutually agreeable resolution. One channel member receives gains relating to the issue in conflict; the other receives the benefits of a significantly strengthened channel relationship that should produce rewards in the future. The beneficiary is likely to respond in kind some time in the future. Another symbiotic negotiation strategy is the well-known win-win strategy wherein both sides emerge victorious from a conflict or, in the worst case, no one loses. Joint gains are achieved through a win-win orientation by avoiding behaviours that could worsen the relationship while actively seeking behaviours that could increase the substantive elements of the issue under negotiation. This is accomplished through mutual efforts to increase the size of the pie, thus invalidating much of the natural incentive to fight, or by covering elements within the current pie that satisfy the needs of each party. Channel negotiations can be based on substance when each channel member : (i) Separates the People from the Problem : Negotiators work side by side, not across from one another. They should assault problems, not each other. (ii) Focuses on Needs rather than Positions : Boundary personnels egos often become too closely identified with their respective negotiating positions. Too much concern for

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positions tends to obscure what participants actually need or want. A more effective approach is to focus on the underlying human or organisational needs that caused boundary personnel to adopt their positions in the first place. Develops options for Mutual Gain : Having to design optimal solutions under pressure or in the presence of adversaries tends to narrow our vision. Searching for the one perfect solution also inhibits creativity, particularly when the stakes are high. Each sides independent generation of alternative solutions prior to meeting and deciding which actions to pursue overcomes these limitations. Uses only Objective Criteria : When the issue in conflict is discussed in terms of impartial standards such as market value, expert opinion, custom, or the law, the conversation involuntarily moves away from a discussion of what the parties are or are not willing to do. When objective criteria are used, neither party has to give in illogically or under false pretences to the other; instead both parties can look forward to a fair solution.

Symbiotic negotiation behaviours emphasize open channel of communication and separate the substantive aspects of the issue under conflict from the personalities of the boundary personnel involved in the negotiation. As such, the transactional costs associated with parties entrenching themselves within fortified positions and then having to dig their way out are avoided. By focusing on basic interests, mutual satisfaction, and objective standards, symbiotic negotiation strategies offer legitimate means of resolving conflict. Symbiotic negotiation tends to produce agreements that meet the legitimate needs of each side to the extent possible. However, symbiotic strategies will not always lead to the best possible outcomes for each party. How do head-to-head negotiations affect the internal channel environment? Creating versus Claiming Value Channel members are faced with a predicament when they attempt to resolve conflicts. First, symbiotic strategies designed to create mutual value through cooperation and collaboration are diametrically opposed to predatory strategies intended to claim value. Moreover, the use of negotiation strategies for claiming value generally obstructs its creation and makes one susceptible to predatory negotiation strategies. However, no matter how successful negotiators are in creating value through cooperative actions, each must, at some point, grab some pie in a predatory fashion. Hardball by either party impairs efforts to satisfy both parties interests through symbiotic, valuecreating strategies. Exaggerating the value of concessions or minimising the benefits one receives through the other channel members concessions is highly unlikely to promote open and truthful communication. Threats or demands undermine effective listening and an understanding of another partys interests. But revealing information about ones preferences in a negotiation is also risky, since doing so opens one up to the other partys predatory strikes. The willingness to make new, creative offers is a sign that a channel member is willing to make additional concessions. While an optimal solution normally results when both parties openly discuss the problem, respect each others substantive and relationship needs, and creatively seek to satisfy each others human needs, reality dictates that such behaviour cannot be expected to automatically occur. One channel members genuine attempts to use open submission or a win-win strategy exposes that organisation to the predatory strategies of its channel counterpart. Once revealed in the process of one-sided symbiotic disclosure, even shared interests can be held hostage in exchange for concessions on other issues. In a negotiation between a symbiotic and predatory channel member, the symbiotic negotiator is susceptible to exploitation at the hands of the predator. For this reason, many channel members

develop an aversion towards using symbiotic strategies when they expect their counterparts to act in a predatory fashion. This suspicion, which in the absence of a relational exchange, is logical causes many channel members to forego potential gains. But if both channel members employ predatory strategies, there is a lower likelihood of any new value emerging from the resolution process. In the best-case scenario, the use of predatory strategies will result in each party receiving only mediocre outcomes. When the extreme negotiating strategies are aligned along vertical and horizontal axes, a matrix of the probable consequences emerging from the conflict resolution processes can be constructed. Refer to grid in module When attempting to resolve conflicts through negotiation, parties should : (i) Do their Homework : Good negotiators understand the implications of each item on the table, the consequences associated with various concessions, and where the absolute bottom line of the negotiation lies. Deal only from the Top of the Deck : Your negotiating success depends upon another persons ability to communicate, in minutes what might have been haggled over for hours or days, unless you deal directly with those individuals having the authority to accept the changes you propose. Remember that Quitters never Win, and winners never quit. Remember that Attitude is Everything Build Bridges (relationships) rather than Walls

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Potential Benefits of Conflicts among Channel Settings When properly approached, conflict can : (i) Bring problems out into the open where they can be effectively dealt with. (ii) Lead to the development of new perspectives on old problems or situations. (iii) Lead to new ideas and new approaches to dealing with problems, if creativity and the right negotiating strategies are brought to the table. (iv) Allow channel members to ventilate feelings that needed to be aired. (v) Lead to harmony and more productive, growing relationships. (vi) Lead to a greater awareness of and appreciation for the needs of other channel members. (vii) Cause channel members to better understand themselves, their motivations, their goals and their behaviours. PROBLEM SOLVING STRATEGIES+ Problem solving strategies are the actions taken to resolve the disputes, disagreements, or confrontations between the members of marketing channels. They involve the pursuit of alternative solutions to the conflict in question. (i) Logrolling Here, each channel participant identifies its priorities and offers concessions on those issues it views as less significant. (ii) Compromise Strategy This involves the resolution of conflicts by establishing a middle ground based on the initial

positions of both parties. Several issues or concerns may be related to a given conflict. A compromise strategy need not necessarily involve an exchange of information about either partys needs, goals, or priorities. Instead, it is based on appropriate or reciprocal concessions from their initial positions by both parties. (iii) Aggressive Strategy This strategy is used to work out problems using threats, persuasive arguments, or punishments. In this case, the objective is to extract, through whatever means available, one-sided concessions from the other channel member. Each partys short- or long-term orientation towards the relationship has the most influence on its problem solving behaviour. The more powerful partys desire to exploit its power through coercive means is generally stifled in negotiations between channel members having prior relationships and the expectation of future relationships. This dampening effect results because coercive actions can spark future retaliation. Boundary personnel generally recognise this fact and understand the relative distributions of power can shift over time. PERSUASIVE MECHANISMS The act of persuasion implies that one channel member influences another members behaviour. However, persuasion should not be viewed as something one boundary member does to other boundary members. It should instead be viewed as something that is done with others. The process of persuasion occurs in three steps : Gaining personal acceptance Confirming motivation, and Dispensing rewards Gaining personal acceptance The channel partners must believe in the rules of negotiation the explicit or implicit guidelines that govern acceptable behaviour during the bargaining process. Without personal acceptance, persuasion will not occur because members will not believe in any settlement that is subsequently achieved. Moreover, the cost of surveillance or the need for future incentives to ensure compliance to the solution will increase. In the second step, the boundary personnel of firms using persuasion to resolve conflict must carefully search out the motivations of their counterparts. Here, assumptions about partner concerns should be avoided because they are likely to be wrong and potentially harmful. The best form of persuasion is Self-Persuasion. Self-Persuasion is most likely to occur when boundary personnel become thoroughly involved with the issues in conflict and in the process of problem solving. Attribution theory holds that when people observe themselves doing well (i.e. participating in desirable behaviours), they generally accept the reasons for their doing well as flowing from within themselves. These individuals would have persuaded themselves that this solution is the right thing to do The third step in the persuasion process involves the dispensation of rewards. Rewards are likely to favourably affect the recipient negotiators present behaviour, while also influencing the channel member to act in a similar, positive fashion when similar conflicts arise in the future. Rewards should flow only after gaining the target boundary personnels personal buy-in and self-motivated

participation in the process of conflict resolution. In channel conflicts, rewards might involve costconcessions, long-term contractual agreements, or favourable territorial considerations, but they need not automatically assume this form. Verbal appeals, encouragement and praise are often acceptable substitutes for more tangible appeals. LEGALISTIC STRATEGIES Legalistic strategies such as arbitration and settlement are used when one channel member contends that a formal legal contract or agreement requires another member to perform a given action. Legal action should be used only as a final option. This is because when a legal action is threatened or taken, the targeted firm may overtly comply but will likely harbour ill-will toward the channel member bringing the action. As a result, conflict may actually increase rather than decrease. Furthermore, the target firm will likely dissolve its relationship with the firm bringing the suit, regardless of who wins the settlement. TAKING THE LONG VIEW : MANAGING CONFLICT THROUGH MARKETING CHANNEL CLIMATE
(i) (ii)

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(iv) (v) (vi) (vii)

Autonomy : The perception of self-determination with respect to work procedures, priorities and, to some extent, the goals that are acceptable within a marketing channel. Cohesion : A perception of togetherness or sharing within the channel relationship setting, including the willingness of channel members to provide material and intangible aid to another upon request. Trust : The perception of freedom to communicate openly with fellow channel members about sensitive or weighty issues under the presumption that the integrity of such communication will not be violated. Pressure : The perception of unreasonable time demands or performance expectations with respect to task completion and performance standards within the channel relationship. Recognition : The perception that member contributions to the success of the channel will be rightfully acknowledged. Fairness : The perception that channel practices, policies and procedures are equitable rather than arbitrary, biased or capricious. Innovation : The perception that reasonable change and new and creative ways of conducting channel functions are encouraged. This includes risk-taking in new areas in which the member has little prior experience (but apparently has the capacity for success).