CHAPTER 16 Handle Conflict, Negotiation, and Decision Making Don't neglect the power of “yes” LEARNING OBJECTIVES At the end of this chapter you will be able to: · Understand what conflict is, why it is occurring and how to manage it. · Describe methods for effective negotiations. · List tools that will help you make more effective and less biased decisions. WHAT'S INSIDE? · Be a Critical Thinker: Dealing with Deception at the Bargaining Table · Bringing OB to Life: Intuition and US Airway Flight 1549 · Checking Ethics in OB: Is a Two-Tiered Wage System Ever Justified? · OB in the Office: What to Do When Face-to-Face Negotiations Are Not Possible: Tips for Negotiating via Email · OB in the Office: Sooner or Later You'll Know How to Negotiate a Better Raise · Research Insights: Analytical and Intuitive Decisions: When to Trust Your Gut · Worth Considering or Best Avoided? Labor and Management Sides Disagree. Is a Strike the Answer? You are at work and you hear your colleagues disagreeing with each other loudly. Their voices can be heard throughout the office, and you notice people popping their heads up to see what's going on. You are in charge of the team, and you know that your organization prides itself on having a collegial culture. What do you do? For many people, the answer is clear: Conflict is bad—we need to get rid of it. Conflict makes people uncomfortable and harms our ability to work together, so managers need to step in and resolve differences. Is this always true? Couldn't it be that conflict can also play a positive role in the workplace? In this chapter, we show that conflict can be good when it surfaces important issues that need to be discussed. The key to managing it is knowing how to determine what kind of conflict is occurring and then using it to generate better decisions. This requires developing skills in areas that are becoming increasingly important in today's workplace: conflict, negotiation, and decision making. 16.1 Manage Conflict LEARNING OBJECTIVES Understand what conflict is, why it occurs, and how we can manage it more effectively. · Define what conflict is and why it occurs. · Understand conflict management strategies. · Guard against common conflict management pitfalls. Why Do We Have Conflict? Conflict occurs whenever disagreements exist in a social situation over issues of substance, or whenever emotional antagonisms create frictions between individuals or groups.1 Team leaders and members can spend considerable time dealing with conflicts. Sometimes they are direct participants, and other times they act as mediators or neutral third parties to help resolve conflicts between other people.2 Because conflict dynamics are inevitable in the workplace, we need to know how to handle them.3 Functional and Dysfunctional Conflict Any type of conflict in teams and organizations can be upsetting both to the individuals directly involved and to others affected by its occurrence. As with the opening example, it can b ...

1. CHAPTER 16
Handle Conflict, Negotiation, and Decision Making
Don't neglect the power of “yes”
LEARNING OBJECTIVES
At the end of this chapter you will be able to:
· Understand what conflict is, why it is occurring and how to
manage it.
· Describe methods for effective negotiations.
· List tools that will help you make more effective and less
biased decisions.
WHAT'S INSIDE?
· Be a Critical Thinker: Dealing with Deception at the
Bargaining Table
· Bringing OB to Life: Intuition and US Airway Flight 1549
· Checking Ethics in OB: Is a Two-Tiered Wage System Ever
Justified?
· OB in the Office: What to Do When Face-to-Face Negotiations
Are Not Possible: Tips for Negotiating via Email
· OB in the Office: Sooner or Later You'll Know How to
Negotiate a Better Raise
· Research Insights: Analytical and Intuitive Decisions: When
to Trust Your Gut
· Worth Considering or Best Avoided? Labor and Management
Sides Disagree. Is a Strike the Answer?
You are at work and you hear your colleagues disagreeing wi th
each other loudly. Their voices can be heard throughout the
office, and you notice people popping their heads up to see
what's going on. You are in charge of the team, and you know
that your organization prides itself on having a collegial
culture. What do you do?
For many people, the answer is clear: Conflict is bad—we need
to get rid of it. Conflict makes people uncomfortable and harms

2. our ability to work together, so managers need to step in and
resolve differences. Is this always true? Couldn't it be that
conflict can also play a positive role in the workplace?
In this chapter, we show that conflict can be good when it
surfaces important issues that need to be discussed. The key to
managing it is knowing how to determine what kind of conflict
is occurring and then using it to generate better decisions. This
requires developing skills in areas that are becoming
increasingly important in today's workplace: conflict,
negotiation, and decision making.
16.1 Manage Conflict
LEARNING OBJECTIVES
Understand what conflict is, why it occurs, and how we can
manage it more effectively.
· Define what conflict is and why it occurs.
· Understand conflict management strategies.
· Guard against common conflict management pitfalls.
Why Do We Have Conflict?
Conflict occurs whenever disagreements exist in a social
situation over issues of substance, or whenever emotional
antagonisms create frictions between individuals or
groups.1 Team leaders and members can spend considerable
time dealing with conflicts. Sometimes they are direct
participants, and other times they act as mediators or neutral
third parties to help resolve conflicts between other
people.2 Because conflict dynamics are inevitable in the
workplace, we need to know how to handle them.3
Functional and Dysfunctional Conflict
Any type of conflict in teams and organizations can be upsetting
both to the individuals directly involved and to others affected
by its occurrence. As with the opening example, it can be
uncomfortable to work on a team where two coworkers are
continually hostile toward each other, or where your team is
constantly battling over resources.4 As Figure 16.1 points out,
however, it's important to recognize that conflict can serve a
functional or dysfunctional purpose.

3. Functional conflict, also called constructive conflict, results in
benefits to individuals, the team, or the organization. This
positive conflict can bring important problems to the surface so
they can be addressed. Constructive conflict increases the
amount of information used for decision making. This can allow
decisions to be more carefully considered—or perhaps even
reconsidered—to increase the chances that the right path of
action is taken. Constructive conflict can also be used to
stimulate creative solutions to complex problems.
Dysfunctional conflict, or destructive conflict, works to the
disadvantage of an individual or team. It diverts energies, hurts
group cohesion, promotes interpersonal hostilities, and creates
an overall negative environment for workers. This type of
conflict occurs when two team members are unable to work
together because of interpersonal differences
(destructive emotional conflict), or when the members of a work
unit fail to act because they cannot agree on task goals
(destructive substantive conflict). Destructive conflicts can
decrease performance and job satisfaction as well as contribute
to absenteeism and job turnover. Managers and team leaders
should be alert to destructive conflicts and be quick to take
action to prevent or eliminate them—or at least minimize any
harm done.
Figure 16.1The two faces of conflict: functional conflict and
dysfunctional conflict
Worth Considering or Best Avoided?
Labor and Management Sides Disagree. Is a Strike the Answer?
It's hard to find a person who isn't in favor of good-quality
schools. But when it comes time to change schools in search of
a better future, teachers, administrators, and school boards
sometimes have a hard time reaching agreement.
Take a case in the city of Chicago. In 2012, Mayor Rahm
Emmanuel supported changes to lengthen school days, pay
teachers on merit based in part on measures of student

4. performance, close some schools, and open new ones. After
months of negotiations, teachers were given a 16 percent salary
increase over four years. Nonetheless, the teacher's union went
on strike over concerns about teacher evaluations, job security,
and rules for hiring and firing teachers.
Even after a tentative agreement was reached by negotiators, the
strike continued. Karen Lewis, President of the Chicago
Teachers Union, told reporters that teachers were “not happy
with the agreement. They'd like it to actually be a lot better.”
Robert Bruno, a labor law professor at the University of Illinois
at Chicago, said, “I'm hard pressed to imagine how they could
have done much better.” A parent commented, “What's the point
of going on strike if you don't get everything you need out of
it?”5
When the strike was over, more than 350,000 Chicago school
kids had missed nine days of school.
Do the Analysis
In contrast to the Chicago school situation, GM and the
Canadian Auto Workers Union negotiated a new labor contract
without a strike. The union's top negotiator said his workers,
“clearly have a bright future,” and GM's negotiator said a new
labor deal “will enable significant new product, technology and
process investments.”6 Is striking the answer when labor–
management conflict hits the wall? Who wins and who loses
when strikes occur? When conflicts occur, does having the
threat of a strike on the table make management more willing to
listen? What skills and conditions make reaching agreements
more likely in high-conflict situations?
Types of Conflict
A first step in conflict management is determining whether the
conflict is functional or dysfunctional. We also need to
recognize why the conflict is occurring. Most conflict can be
sorted into two basic types—substantive and emotional.7 Each
type is common, ever present, and challenging to deal with.
Whereas substantive conflict can be functional when it is used
to generate new ideas and new ways of thinking that benefit the

5. individuals or the team, emotional conflict is almost always
dysfunctional.
Substantive conflict is a fundamental disagreement over ends or
goals to be pursued and the means for their accomplishment. A
dispute with one's boss over a plan of action to be followed is
an example of substantive conflict. When people work together
every day, it is only normal that different viewpoints on a
variety of substantive workplace issues will arise. At times,
people will disagree over such things as team and organizational
goals, the allocation of resources, the distribution of rewards,
policies and procedures, and task assignments.
Emotional conflict involves interpersonal difficulties that arise
over feelings of anger, mistrust, dislike, fear, resentment, and
the like. It is commonly known as a “clash of personalities.”
How many times, for example, have you heard comments such
as, “I can't stand working with him,” or “She always rubs me
the wrong way,” or “I wouldn't do what he asked if you begged
me?” When emotional conflicts creep into work situations, they
can drain energies and distract people from task priorities and
goals. Yet, they emerge in a wide variety of settings and are
common in teams, among coworkers, and in superior–
subordinate relationships.
What Conflict Management Strategy Should I Use?
Most conflict management approaches focus on conflict
resolution, an attempt to eliminate the underlying reasons for
conflict.8 But if the conflict is functional we don't want to
eliminate it, we want to stimulate it to generate positive
outcomes. The strategy we use needs to take this into
consideration. We can choose between two general approaches:
· Reducing differences involves getting everyone involved to
adopt new attitudes, behaviors, and approaches toward one
another. This conflict management strategy focuses on conflict
resolution and is an appropriate strategy for handling
dysfunctional conflict. It does this by appealing to higher values
and superordinate identity.
· Tolerating differences involves pushing members to value and

6. appreciate differences. This strategy focuses on conflict
management rather than conflict resolution. It does this by
emphasizing the benefits of having people think in different
ways, including heterogeneous backgrounds, beliefs and
perspectives. While it can and should be used for dysfunctional
conflict, it is particularly appropriate for functional
conflict.Strategies for Handling Dysfunctional Conflict
When dysfunctional conflict goes unresolved, it often leads to
future conflicts of the same or related sort.9 Rather than trying
to deny the existence of conflict or settle on a temporary
resolution, it is always best to deal with dysfunctional conflicts
in such ways that they are completely resolved.
You can do this using direct face-to-face conflict management
strategies or indirect and more structural strategies. The latter
are required when dysfunctional conflict cannot be directly
resolved. Think about it. Aren't there times when personalities
and emotions prove irreconcilable? In such cases an indirect, or
structural, approach to conflict management can often
help.Relational Conflict
Relational conflict is emotional conflict that comes from
incompatibility in identity, ideology, interpersonal style and
values.10 We see this in public discourse currently in conflict
over political party ideologies and identities and in global
contexts in conflicts between ethnic groups. It also occurs in the
workplace when employees with different techincal training
argue over performance standards or approaches to getting work
done.
One strategy for reducing relational conflict is the ladder of
inference, in which members critically analyze why they have a
particular ideological belief.11 The ladder of inference works to
address identities and ideologies that are part of our cognitive
scripts and schema. Another strategy is to reduce perceived
differences by developing more inclusive categories
through recategorization, decategorization, or cross-
categorization. Perhaps the most well-known way of doing this
is superordinate identity.12 For example, instead of “We are

7. Democrats” and “We are Republicans,” superordinate identity
is, “We are all Americans.”
Upward referral uses the chain of command for conflict
resolution.13 Problems are moved up from the level of
conflicting individuals or teams for more senior managers to
address. While this approach can work, it does have limitations.
If conflict is severe and recurring, the continual use of upward
referral may sustain conflict rather than result in true conflict
resolution, much like children running to their parents rather
than resolving conflicts themselves.Status Conflict
Status conflict occurs when individuals or groups attempt to
establish hierarchical differentiation or undermine the authority
of others.14 This conflict is inherently political in that it comes
from power differences. It can be seen when a low -power
person needs the help of a high-power person who does not
respond, when people who hold dramatically different values
are forced to work together on a task, or when a high-status
person is required to interact with and perhaps be dependent on
someone of lower status.Process Conflict
Process conflict is disagreement in how roles and
responsibilities should be assigned.15 It comes from things like
arguments over who gets preferred tasks and how much work
one party does compared to another. It can also come from task
and workflow interdependencies that occur between work units,
such as disputes among people and teams who are required to
cooperate to meet challenging goals. Process conflict occurs in
hospitals, for example, when doctors feel they don't get test
results in time to be able to appropriately care for their patient.
Figure 16.2Structural diff erentiation as a potential source of
conflict among functional teams
Process conflict can also come from structural differentiation,
when different teams and work units pursue different goals with
different time horizons, as shown in Figure 16.2. For example,
actual or perceived resource scarcity can also foster destructive
conflict. Working relationships are likely to suffer as

8. individuals or teams try to position themselves to gain or retain
maximum shares of a limited resource pool. They are also li kely
to resist having their resources redistributed to others.
There are several effective strategies for handling conflict that
is dysfunctional in teams. Figure 16.3 provides a summary of
those strategies for conflicts associated with relationships,
status, and processes in team coordination.Strategies for
Handling Functional Conflict
Functional conflict, or task conflict, occurs when people have
disagreements about the content and outcomes of tasks being
performed.16 It is consistent with substantive conflict as
defined earlier. Functional conflict represents disagreements
over ideas, procedures, processes or directions that should be
used when performing a task. It is critically important in
situations of complexity where tasks are ambiguous and
uncertain. In these situations, conflicting perspectives are
needed because old ways of doing things won't work. Instead,
novel and creative solutions to problems are required.
Functional conflict cannot be handled using a reducing
differences strategy because eliminating differences gets rid of
the diversity needed to address complexity. Instead, you need to
capitalize on differences. This is done by what Harvard
professor Ronald Heifetz calls cooking the conflict—creating
conditions for people to engage their differences to generate
creative tension.17 If the tension is too low, meaning people are
not engaging in conflict, then you turn up the heat by injecting
tension to pull out the differences. If the tension is too high,
meaning conflict is becoming dysfunctio nal, then you reduce
the heat by finding commonality across differences or
identifying ways to connect across ideas to move forward.
Figure 16.3Summary of strategies for handling dysfunctional
relationship, status, and process conflicts in teams
Strategies for Handling Dysfunctional Conflict
Type of Conflict
Reduce Differences
Tolerate Differences

9. Relationship Conflict
· Find common ground
· Appeal to higher values, mission, vision
· Ladder of inference
· Superordinate identity
· Find value in other's identities, beliefs
· Upward referral
· Perspective taking
Status Conflict
· Negotiate to reduce status differences
· Flatten hierarchies and the power structure
· Change rules to level status and power
· Reduce formalities (e.g., dress code)
· Reinforce and legitimise hierarchy
· Highlight value of status differential
· Demonstrate benefit of differences in power
Process Conflict
· Distribute responsibilities evenly
· Job sharing
· Rotate duties and assignment
· Appeal to sportsmanship, team expectations
· Clarify distinctiveness of roles
· Reinforce areas of specialisation and expertise
· Coordinate distance contributions
A key element of managing this in projects is recognizing at
which point the conflict is beneficial for task performance and
at which point it is detrimental. When it becomes detrimental,
you need to reduce the conflict and focus back on how
individuals can work together and accomplish the goal.
How Can I Guard against Conflict Management Pitfalls?
As shown in Figure 16.4, conflict management strategies can
vary in their emphasis on cooperativeness and assertiveness in
the interpersonal dynamics of the situation. The key to
understanding conflict management approaches is recognizing
that not all of them focus on win-win. When some parties lose,
the potential for conflict remains and might even escalate.

10. Therefore, you want to try to guard against conflict strategies
that pursue lose–lose or win–lose outcomes.18
Avoid Lose–Lose Strategies
Lose–lose conflict occurs when nobody fully gets what they
want in a conflict situation. The underlying reasons for the
conflict remain unaffected, and a similar conflict is likely to
occur in the future.
Lose–lose outcomes are likely when the conflict management
strategies involve little or no assertiveness. This can occur on a
range:
· Avoidance is when no one acts assertively; everyone pretends
the conflict doesn't exist and hopes it will go away.
· Accommodation, or smoothing, is playing down differences
and highlighting similarities and areas of agreement; thi s
attempt at peaceful coexistence ignores the real essence of a
conflict and often creates frustration and resentment.
· Compromise occurs when each party shows moderate
assertiveness and cooperation and is ultimately willing to give
up something of value to the other; because no one gets what
they really wanted, the antecedent conditions for future
conflicts are established.
Figure 16.4Five direct conflict management strategies
· occurs when each party shows moderate assertiveness and
cooperation and is ultimately willing to give up something of
value to the other; because no one gets what they really wanted,
the antecedent conditions for future conflicts are established.
Figure 16.4Five direct conflict management strategies Minimize
Win–Lose Strategies
In win–lose conflict, one party achieves its desires at the
expense and to the exclusion of the other party's desires. This is
a high-assertiveness and low-cooperativeness situation. It may
result from outright competition in which one party achieves a
victory through force, superior skill, or domination. It may also
occur as a result of authoritative command, whereby a formal
authority such as manager or team leader simply dictates a
solution and specifies what is gained and what is lost by whom.

11. Win–lose strategies fail to address the root causes of the
conflict and tend to suppress the desires of at least one of the
conflicting parties. As a result, future conflicts over the same
issues are likely to occur.
Aim for Win–Win Strategies
Win–win conflict is achieved by a blend of both high
cooperativeness and high assertiveness.19 Collaboration and
problem solving involve recognition by all conflicting parties
that something is wrong and needs attention. It stresses
gathering and evaluating information in solving disputes and
making choices. All relevant issues are raised and openly
discussed. Win–win outcomes eliminate the reasons for
continuing or resurrecting the conflict because nothing has been
avoided or suppressed.
The ultimate test for collaboration and problem solving is
whether or not the conflicting parties see that the solution to the
conflict achieves each party's goals, is acceptable to both
parties, and establishes a process whereby all parties involved
see a responsibility to be open and honest about facts and
feelings. When success in each of these areas is achieved, the
likelihood of true conflict resolution is greatly increased. This
process often takes time and consumes lots of energy, however.
Each party must be willing to commit.
Collaboration and problem solving aren't always feasible.
People may not be willing to come to the table, and strategies
used might not be effective. In situations where resolution is
possible, however, knowing the right strategy can help.
Know When to Use Alternative Conflict Management Strategies
· Avoidance may be used when an issue is trivial, when more
important issues are pressing, or when people need to cool down
temporarily and regain perspective.
· Accommodation may be used when issues are more important
to others than to yourself or when you want to build credits for
use in later disagreements.
· Compromise may be used to arrive at temporary settlements of
complex issues or to arrive at expedient solutions when time is

12. limited.
· Authoritative command may be used when quick and decisive
action is vital or when unpopular actions must be taken.
· Collaboration and problem solving are used to gain true
conflict resolution when time and cost permit.
Study Guide 16.1
Why do we have conflict?
· Conflict appears as a disagreement over issues of substance or
emotional antagonisms that create friction between individuals
or teams.
· Moderate levels of conflict can be functional for performance,
stimulating effort and creativity.
· Too little conflict is dysfunctional when it leads to
complacency; too much conflict is dysfunctional when it
overwhelms us.
What conflict management strategy should I use?
· Conflict management strategies differ depending on whether
the situation involves functional or dysfunctional conflict.
Dysfunctional conflict should be eliminated through conflict
resolution; functional conflict should be stimulated to generate
creative solutions.
· Two broad conflict management strategies are reducing
differences and tolerating differences. Reducing differences
works for dysfunctional conflict; tolerating conflict works for
both functional and dysfunctional conflict.
How can I guard against common conflict management pitfalls?
· Avoid lose–lose conflict, which results from avoidance,
accommodation (smoothing), and compromise.
· Minimize win–lose conflict associated with competition and
authoritative command.
· Aim for win–win conflict, which is achieved through
collaboration and problem solving.
16.2 Learn How to Negotiate
LEARNING OBJECTIVES
Describe methods for effective negotiations.
· Understand why you need to negotiate.

13. · Know how to use different negotiation strategies.
· Guard against common negotiation pitfalls.
We've all done it. We wish we had negotiated a starting salary
or a pay raise. We're kicking ourselves—why didn't we ask for
more? If we had, would it have made a difference? Many people
avoid negotiation because they think they will be looked upon
badly. What they may not realize is that in many cases
negotiating effectively is a sign of competence and capability.
For some positions, where people are expected to take on
leadership or business development responsibilities, you can
look bad if you don't negotiate.
In this module, we show you how to be a better negotiator. The
trick is being informed and not afraid. When people negotiate
effectively, all parties benefit. And although this may sound
crazy, negotiating can actually be fun.
Why Should I Negotiate?
Negotiation is the process of making joint decisions when the
parties involved have different preferences.20 Negotiation
applies to a variety of situations, including major issues like job
offers and salary agreements, but also everyday job situations
like negotiating over job assignments, budgets, departmental
resources, policy issues, and directions of new initiatives. It is
an essential skill and has special significance in many
workplaces today where work is less structured, more
collaborative and highly dynamic.
The Need to Negotiate
You and a colleague are starting new jobs after completing your
MBA programs. You are both offered a salary of $100,000. You
are happy with the salary and accept the position outright, but
your colleague negotiates and gets $107,000. You might justify
this by saying that it isn't worth risking your reputation or
getting your new manager upset over $7,000. But what is the
real cost to you? It isn't just the $7,000—it is that amount
compounded over a lifetime. If you and your counterpart receive
the same pay raises and promotions during your career, after
thirty-five years you would have to work eight more years to

14. have the same amount as your colleague.21
When we don't negotiate or do so well, we lose out on important
opportunities and rewards. To negotiate effectively, we need to
have bargaining power. Bargaining power is the strength of the
position we bring to a negotiation situation.22 When we have
high bargaining power, it is easier to negotiate because we have
more control over the outcome. Like all power, bargaining
power is based on dependencies—the more dependent one party
is on the other, the less bargaining power that party has.23 In
the example of the salary negotiation, we have more bargaining
power if we have less dependency on the hiring company for a
job. The ideal bargaining power situation occurs when we have
multiple companies trying to hire us and we can choose the one
that fits us best.
Negotiation Goals and Outcomes
In any negotiation, you have to remember that there are two
important goals at stake: substance goals and relationship
goals.24Substance goals deal with outcomes that relate to the
content issues under negotiation. Negotiation over the terms of
a contract is one example. Relationship goals deal with
outcomes that relate to how well people involved in the
negotiation and any constituencies they may represent are able
to work with one another once the process is concluded. In the
new-hire example, the key relationship is with the boss, your
coworkers, and the company.
We all know that negotiations don't always end with substance
achieved and relationships intact. However, that shouldn't deny
the importance of striving for both. Effective negotiation occurs
when substance issues are resolved and working relationships
are maintained or even improved. In practice, think of this as
striving to satisfy two criteria for effective negotiation:
· Quality of outcomes. The negotiation results in a quality
agreement that is wise and satisfactory to all sides.
· Harmony in relationships. The negotiation is harmonious and
fosters rather than inhibits good interpersonal relations.
OB in the Office

15. What to Do When Face-to-Face Negotiations Are Not Possible:
Tips for Negotiating via Email
Negotiations are almost always challenging, and these
challenges can be exacerbated when negotiations take place via
email instead of face-to-face. Email is now the most used form
of corporate communication and it saves both money and time.
Research indicates that email negotiations can inhibit the trust
and relationship building that are so often at the heart of any
resolution. So how can we improve our email negotiations?
First, whenever possible, make sure that email is one forum for
negotiating and not the only forum. If face-to-face meetings are
not possible, utilize video conferencing options to build rapport.
Add telephone and email to follow up on proposals and iron out
details.
Make sure your emails are clear and concise and have clear
objectives. Read your emails out loud before pressing the send
button to make sure they convey the proper tone and avoid
innuendo. Choose carefully which parties you copy on the
email. It can be tempting to add team members at all levels in
the organization, but what may have started out as a targeted
communication for one or two people can turn into a stream of
consciousness that can go on tangents when so many parties get
involved.
Negotiations are all about back-and-forth communication. To
encourage that communication make sure to ask specific
questions via email and state what your intended goals are.
Follow up if you do not receive the answers you are seeking.
Make sure there is a back-and-forth discussion rather than a
one-sided communication.
Pay specific attention to the subject lines of your emails
because those few words are the first impression each party has.
They should also be informative and can be changed when you
forward a communication to parties new to the negotiation.
When it feels as though the tone of the conversation is losing
productivity and efficiency, remember to bring the personal

16. relationship back into play and follow up with a phone call or
video conference. Use email as one of a variety of negotiating
tools but not the only one.
How Do I Negotiate?
Once we have made the decision to negotiate, we need to know
how to do it. This involves understanding the basic negotiating
strategies available and the steps in the negotiation
process.Understand Negotiation Strategies
In most negotiations, there are two broad strategies you can use,
and they differ markedly in approach and possible
outcomes.25 Which one you use can have a major influence on
how the negotiation transpires and the outcomes that result.
The first is distributive negotiation. It focuses on positions
staked out or declared by conflicting parties. In distributive
negotiation, each party tries to claim certain portions of
the available pie whose overall size is considered fixed.
Distributive negotiation is analogous to the notion of “my way
or the highway.”
The second is integrative negotiation. Also called principled
negotiation, it focuses on the merits of the issues. In integrative
negotiation, the parties involved look for mutually agreed-upon
ways of distributing the pie, rather than staking claims to
certain portions of it. They try to enlarge the available pie.
Integrative negotiation is analogous to, “Let's find a way to
make this work for both of us.”
OB in the OfficeSooner or Later You'll Need to Know How to
Negotiate a Better Raise
During your career, the time will most assuredly come for you
to negotiate a pay raise, a new set of responsibilities, or
increased benefits. Chances are, you'll find yourself unprepared
for the discussion. You may pay a price for that. There's quite a
bit of advice for how to negotiate pay raises. A compilation of
thoughts and tips follows.
· Prepare, prepare, prepare: Do the research to find out what

17. others make for a similar position inside and outside the
organization, including everything from salary to benefits,
bonuses, incentives, and job perks. Internet research at sites like
LinkedIn and Glassdoor.com can help you fill in a lot of the
blanks here.
· Document and communicate: Identify and communicate your
value. Put forth a set of accomplishments that show how you
have saved or made money and created value for an employer or
how your skills and attributes will do so for a prospective one.
· Advocate and ask: Be your own best advocate. In salary
negotiation, the rule is “Don't ask, don't get.” But don't ask too
soon—your boss or interviewer should be the first to bring up
salary.
· Stay focused on the goal: The goal is to satisfy your interests
to the maximum extent possible. This means everything from
getting immediate satisfaction to being better positioned for
future satisfaction.
· View the details from the other side: Test your requests
against the employer's point of view. Ask if you are being
reasonable, convincing, and fair. Think about the other person's
perspective: How can the boss explain to higher levels and to
your peers a decision to grant your request?
· Don't overreact to bad news: Never quit on the spot if you
don't get what you want. Be willing to search for and consider
alternative job offers.Distributive Negotiation
Participants in distributive negotiation usually approach it as
a win–lose episode. Distributive negotiation tends to unfold in
one of two directions: a hard battle for dominance or a soft and
quick concession. Neither one delivers great results.
· Hard bargaining: Each party holds out to get its own way.
Parties seek dominance over the other and try to maximize self-
interests, leading to competition. This approach may lead to
a win–lose outcome in which one party dominates and gains, or
it can lead to an impasse.
· Soft bargaining: One or both parties make concessions just to
get things over with. This leads to accommodation, in which one

18. party gives in to the other, or compromise, in which each party
gives up something of value in order to reach agreement. In
both cases some latent dissatisfaction is likely to remain.
Figure 16.5 illustrates classic two-party distributive negotiation
by the example of the graduating senior negotiating a job offer
with a recruiter.26 Look at the situation first from the
graduate's perspective. She has told the recruiter that she would
like a salary of $60,000; this is her initial offer. However, she
also has in mind a minimum reservation point of $50,000—the
lowest salary that she will accept for this job. Thus, she
communicates a salary request of $60,000 but is willing to
accept one as low as $50,000. The situation is somewhat the
reverse from the recruiter's perspective. His initial offer to the
graduate is $45,000, and his maximum reservation point is
$55,000; this is the most he is prepared to pay.
Figure 16.5The bargaining zone in classic two-party negotiation
The bargaining zone is the range between one party's minimum
reservation point and the other party's maximum reservation
point. In Figure 16.5, the bargaining zone is $50,000 to
$55,000. This is a positive bargaining zone since the reservation
points of the two parties overlap. Whenever a positive
bargaining zone exists, bargaining has room to unfold. Had the
graduate's minimum reservation point been greater than the
recruiter's maximum reservation point (for example, $57,000),
no room would have existed for bargaining.
Classic two-party bargaining always involves the delicate task
discovering the respective reservation points—one's own and
the other's. Progress can then be made toward an agreement that
lies somewhere within the bargaining zone.
Checking Ethics in OB
Is a Two-Tier Wage System Ever Justified?
The time is the early 2000s. The industry is the domestic auto
industry. The “Big Three”—Chrysler, Ford, and General
Motors—are struggling. It is tough to earn a profit because
costs, especially legacy pension costs, are high. Competition

19. from foreign carmakers is also increasing. They are building
new cost-efficient plants and making huge inroads in the
domestic companies' market share.
How did America's big firms respond? They decided to use a
two-tier wage system that paid new workers substantially less
(up to one-half less) than existing workers doing the same job
and put a ceiling on the newer workers' wages, which meant
they could never be paid more than $19 an hour. Going along
with this system meant saving thousands of jobs, so the
industry's labor unions went along. Following the Great
Recession that began in 2008, the strategy seemed to have been
a wise one, as car sales dropped dramatically. However,
discontent grew among the newer workers who knew they could
never hope to earn at the level of their coworkers who had been
hired before 2007.27 In 2015, the UAW and General Motors
negotiated a new contract for workers that included the end of
the two-tier system.28
Do the Analysis
Is saving thousands of jobs a sufficient justification for paying
workers doing the same job different wages? Do more senior
workers deserve to make more money than their less
experienced coworkers? Was the negotiation of a two-tier wage
system a win-win for automakers and workers in 2007? What
are the pros and cons of a two-tier wage system?Integrative
(Principled) Negotiation
The integrative, or principled, approach involves a willingness
to negotiate based on the merits of the situation. It is less
confrontational than the distributive and permits a broader
range of alternatives to be considered in the negotiation process
by adopting a win–win orientation. The foundations for gaining
truly integrative agreements can be described as supportive
attitudes, constructive behaviors, and good information. Each
party must have a willingness to trust one another, a willingness
to share information with the other party, and a willingness to
ask concrete questions of the other party. Even though it may
take longer, the time, energy, and effort needed to negotiate an

20. integrated agreement can be well worth the investment.
To use an integrative approach, you should keep in mind the
following principles:
· Separate people from the problem.
· Don't allow emotional considerations to affect the negotiation.
· Focus on interests rather than positions.
· Avoid premature judgments.
· Keep the identification of alternatives separate from their
evaluation.
· Judge possible agreements by set criteria or standards.
Be a Critical ThinkerDealing with Deception at the Bargaining
Table
The NFL draft is a critical and important event for draft-eligible
players and teams. The stakes are high, as choices about fit
between teams and players could have major implications for
the careers of young players, the short-term competitiveness of
teams, and return on a team's long-term investment.
In the weeks leading up to the NFL draft, and especially during
the three days when the event takes place, conditions are rife
for trickery, dishonesty, and misdirection. Team managers and
owners participate in elaborate ruses and even outright lies to
better position themselves for negotiations with other teams,
draft picks, and agents.
Former Dallas Cowboys Coach Bill Brandt told USA Today, “I
refer to this time before the draft as ‘National Liars Month' in
the NFL.”29 Researchers at Harvard University30 have detailed
four ethical challenges to honesty and integrity in the
negotiations process.
· Ethical Challenge 1: Human nature is such that we are lured
by temptation. The more lucrative the reward, the more likely
we are to deceive the other party at the negotiating table. Even
when directly asked or challenged to be honest, our focus on the
reward or bribe could lead us down the path of deception.
During a professional sports draft, the rewards for teams and

21. players could be millions of dollars, so players often exaggerate
their credentials, teams misdirect in terms of their intentions,
and agents fabricate competing offers.
· Ethical Challenge 2: Although we know that there are no
guarantees in life, humans strive for certainty and security.
When faced with uncertainty, ethics are often compromised, and
we become deceptive. The more uncertainty there is in contract
negotiations and the outcome of the draft, the more likely teams
and players will mislead each other. Each year, only about 7
percent of eligible players are actually drafted by NFL
teams.31 For a player in the NFL draft, there is a great deal of
uncertainty regarding which team will want him on the roster,
which city he could live in, and even whether he'll be drafted at
all. With uncertainty and the stakes so high, there is often a
great deal of trickery and deception when seeking offers from
coaches and team managers. If teams are not certain about a
player's likely success in the league, they are prone to
misleading competitors about their intentions.
· Ethical Challenge 3: Power, or lack thereof, can affect how we
conduct ourselves in negotiations. Humans are self-
preservationists. When we feel powerless, our ethical standards
could slip. New athletes entering the NFL have often
complained about their lack of power in the draft process and in
discussions with team ownership, and as such, regularly seek to
restore power and credibility in negotiations.
· Ethical Challenge 4: If the likely victims of our deception are
anonymous or impersonal, we are more likely to lie. A group of
owners, or a team full of unknown peers, is usually much more
impersonal than a well-known colleague such as an agent or
coach—people with whom players have established rapport.
Be a Critical Thinker
Check Fairness Should there be a penalty for lying at the
negotiating table?
Seek Depth If so, what should the penalty be and how should it
be applied?
The integrative approach relies on the concept of BATNA:

22. the best alternative to a negotiated agreement.32 BATNA is
important to integrative negotiation because each party must
know what he or she will do if an agreement cannot be reached.
They must identify and understand their personal interests in the
situation and know what is really important to them in the case
at hand. When these issues are clear, the parties can work to
understand what the other party values and see how they can
bring the two together.Engage the Negotiation Process
The negotiation process does not begin with negotiation but
with the decision to negotiate in a particular way. In most cases,
a collaborative rather than adversarial attitude will benefit the
negotiation process. It helps achieve the win-win associated
with integrative negotiation. As described by Stanford professor
Margaret Neale, negotiation is “about finding a solution to your
counterpart's problem that makes you better off than you would
have been had you not negotiated.”33 This requires that you
view negotiation not only relative to your interests, but also to
the others' interests. This negotiation process can be
summarized in three steps.
· Step 1: Assess
Think about the situation and decide whether negotiating is
appropriate. Ask yourself, “If I were to negotiate could I
generate a positive outcome?” Then think about the other side:
“Could negotiating on this issue benefit them?” Try not to jump
too quickly to no. Keep your mind open and be creative in
broadly exploring the questions. Have others help you if you
find yourself answering no when, in fact, negotiating would be
beneficial.
· Step 2: Prepare
If the answers to step 1 are yes, the next step is to prepare. This
is one of the most crucial stages in negotiation. If you do this
properly, the rest can be easy. The key to sound preparation is
getting as much information as possible. You also need to know
what your bargaining power is. The good news is that with
networks and the internet, information is more readily available
than ever. To prepare, talk to people. Find out what they know.

23. Ask about what kinds of resources are available. For example, if
you are negotiating a job offer, find salary information and
know what the market rate is. Remember that salary is just one
element of a hiring package—ask others what typical hiring
packages are for people in your field.
· Step 3: Engage
The third step is to engage in the negotiation. Don't be afraid to
make the first ask as long as you are okay with that outcome.
You can also wait and see what is offered and then use that
information to make a counteroffer. For principled negotiation,
frame your request relative to how it can be mutually beneficial.
In the salary negotiation, express that your hope is to stay in the
position for a while and tell them that having the right salary
will help ensure your longevity. Think through what you will
need to be effective in the position and use that to frame your
request. If you are being hired to start a new program in the
organization, identify the resources you will need to be
successful and make your request in that light.
How Can I Guard against Common Negotiation Pitfalls?
The negotiation process can be complex on ethical and many
other grounds. It is subject to volatile interpersonal and team
dynamics. As if this isn't enough, all negotiators need to guard
against the common negotiation pitfalls listed below.34Myth of
the Fixed Pie
The myth of the fixed pie is the tendency to stake out your
negotiating position based on the assumption that in order to
gain your way, something must be subtracted from the gains of
the other party. This is a purely distributive approach to
negotiation. The whole concept of integrative negotiation is
based on the premise that the pie can sometimes be expanded or
used to the maximum advantage of all parties, not just one.
Escalating Commitment
Escalating commitment occurs when negotiations begin with
parties stating extreme demands and then people become
committed to them and reluctant to back down. Concerns for

24. protecting one's ego and saving face may lead to the irrational
escalation of a conflict. Self-discipline is needed to spot
tendencies toward escalation in one's own behavior as well as in
the behavior of others.
Overconfidence
Overconfidence occurs when people believe their positions are
the only correct ones. As a result they ignore the other party's
negotiating power or needs. In some cases, negotiators
completely fail to see merits in the other party's position—
merits that an outside observer would be sure to spot. Such
overconfidence makes it harder to reach a positive common
agreement.
Communication Problems
Communication problems can also cause difficulties during a
negotiation. As Roger Fisher and William Ury suggested,
“negotiation is the process of communicating back and forth for
the purpose of reaching a joint decision.”35 This process can
break down because of a telling problem—the parties don't
really talk to each other, at least not in the sense of making
themselves truly understood. It can also be damaged by
a hearing problem—the parties are unable or unwilling to listen
well enough to understand what the other is saying. Indeed,
positive negotiation is most likely when each party engages in
active listening and frequently asks questions to clarify what
the other is saying. Each party occasionally needs to stand in
the other party's shoes and to view the situation from the other's
perspective.36
Know When to Bring in a Third Party
It would be ideal if everyone involved in a negotiation followed
high ethical standards of conduct, but an overemphasis on self-
interests can sidetrack this goal. The motivation to behave
ethically in negotiations can be put to the test by each party's
desire to get more than the other from the negotiation or by a
belief that there are insufficient resources to satisfy all parties.
After the heat of negotiations dies down, the parties may try to
rationalize or explain away questionable ethics as unavoidable,

25. harmless, or justified.
After-the-fact rationalizations can have long-term negative
consequences, such as not being able to achieve one's wishes
again the next time negotiations take place. At the very least,
the unethical party may be the target of revenge tactics by those
who were disadvantaged. People who have behaved unethically
can become entrapped by such behavior and may be more likely
to display it again in the future. In such cases, it may be
necessary to bring in a third party. In a process
called alternative dispute resolution, a neutral third party works
with persons involved in a negotiation to help them resolve
impasses and settle disputes. They are helpful in moving things
forward when negotiations come to an impasse or when parties
don't trust each other's motives.
There are two primary forms through which dispute resolution
is implemented. In arbitration, such as the salary arbitration
now common in professional sports, the neutral third party acts
as a judge and has the power to issue a decision that is binding
on all parties. This ruling takes place after the arbitrator listens
to the positions advanced by the parties involved in a dispute.
In mediation, the neutral third party tries to engage the parties
in a negotiated solution through persuasion and rational
argument. This is a common approach in labor–management
negotiations, where trained mediators acceptable to both sides
are called in to help resolve bargaining impasses. Unlike an
arbitrator, the mediator is not able to dictate a solution.
Study Guide 16.2
Why should I negotiate?
· Negotiation is the process of making decisions and reaching
agreement in
· situations where participants have different preferences.
· Managers may find themselves involved in various types of
negotiation situations, including two-party, group, intergroup,
and constituency negotiation.
· Effective negotiation occurs when both substance goals
(dealing with outcomes) and relationship goals (dealing with

26. processes) are achieved.
· Ethical problems in negotiation can arise when people become
manipulative and dishonest in trying to satisfy their self-
interests at any cost.
How do I negotiate?
· The distributive approach to negotiation emphasizes win–lose
outcomes; the integrative or principled approach to negotiation
emphasizes win–win outcomes.
· In distributive negotiation, the focus of each party is on
staking out positions in the attempt to claim desired portions of
a fixed pie.
· In integrative negotiation, sometimes called principled
negotiation, the focus is on determining the merits of the issues
and finding ways to satisfy one another's needs.
· The negotiation process consists of three steps: assess,
prepare, and engage. All three steps involve thinking through
the situation in a creative manner to identity ways by which all
parties involved can come out of the negotiation better off.
How can I guard against common negotiation pitfalls?
· The success of negotiations often depends on avoiding
common pitfalls such as the myth of the fixed pie, escalating
commitment, overconfidence, and both the telling and hearing
problems.
· When negotiations are at an impasse, third-party approaches
such as arbitration and mediation offer alternative and
structured ways for dispute resolution.
16.3 Be a More Effective Decision Maker
LEARNING OBJECTIVES
List tools that will help you make more effective and less biased
decisions.
· Understand the common approaches to decision making.
· Know how to be a better decision maker by recognizing
decision traps and avoiding decision biases.
· Guard against common decision-making pitfalls.
We need to make decisions all the time. Our days are full of
choice. What school should I go to? What career should I

27. pursue? What job should I take? What city should I live in?
How much should I spend on housing? It's no wonder so many
people feel overwhelmed when it comes to decision making.
Although decision making is important in our personal lives,
most people are not trained in it. In this module, we show how
to become a more effective decision maker by avoiding decision
traps and guarding against common decision-making pitfalls.
This begins with understanding the common approaches to
decision making.
What Are Common Approaches to Decision Making?
Decision making is the process of choosing a course of action
for dealing with a problem or an opportunity.37 The process is
usually described in five steps that constitute the ideal or so-
called rational decision model, as shown in Figure 16.6. We are
all familiar with this model. It begins with defining the
problem, generating alternative solutions and analyzing those
solutions to choose a preferred course of action. It ends with
implementing the solution and analyzing its effectiveness.
Figure 16.6An example of the rational decision model applied to
ethical reasoning
While this process is straightforward, the reality is that in
organizations, making the right choices can be complicated. Not
every problem requires an immediate response, sometimes
emotion and gut reactions count as much as reasoning, and the
best decision may actually be the one not made. In fact, the first
challenge to overcome in decision making is the decision to
decide. Asking and answering the following questions can
sometimes help.
· What really matters? Small and less significant problems
should not get the same time and attention as bigger ones.
· Might the problem resolve itself? Putting problems in rank
order leaves the less significant for last. Surprisingly, many of
these less important problems resolve themselves or are solved
by others before you get to them.
· Is this my, or our, problem? Many problems can be handled by

28. other people. These should be delegated to people who are best
prepared to deal with them. Ideally, they should be delegated to
people whose work they most affect.
· Will the time spent make a difference? An effective decision
maker recognizes the difference between problems that
realistically can be solved and those that simply are not
solvable.
Choices at each step in the decision-making process depend on
the decision maker and the environment. There are times when
it's best to be quick, intuitive, and creative, and times when we
should be slow, deliberative, and cautious. Sometimes, it's best
to make choices alone; other times, it's best to involve others.
These are associated with classical, behavioral, and intuitive
models of decision making.38
Classical Decision Making
The classical decision-making model sees the decision maker as
rational and fully informed.39 It assumes a certain environment
in which the problem is clearly defined, all possible action
alternatives are known, and consequences are clear. This allows
decision makers to optimize by finding the best solution to the
problem. This model fits the five-step decision-making process
presented in Figure 16.6. It represents an ideal situation of
complete information whereby the decision maker moves
through the steps one by one in a logical fashion. It nicely lends
itself to various forms of quantitative decision analysis as well
as to computer-based applications.40
Figure 16.7Decision making viewed from the classical and
behavioral perspectives Behavioral Decision Making
As Nobel laureate Herbert Simon noted, the reality is that many,
perhaps most, decision situations faced by individuals and
teams in organizations don't fit the assumptions of the classical
decision-making model. Recognizing this, the premise of the
alternative behavioral decision-making model is that people act
only in terms of their perceptions, which are frequently
imperfect.41
Behavioral scientists recognize that human beings

29. have cognitive limitations—constraints on what we are able to
know at any given point in time. These limitations restrict our
information-processing capabilities. The result is that
information deficiencies and overload compromise the ability of
decision makers to operate according to the classical model.
Instead, they end up acting with bounded rationality—
incomplete information and time and resource constraints that
limit the ability to be rational. The behavioral model recognizes
that things are interpreted and made sense of as perceptions, and
decision making occurs within the box of a simplified view of a
more complex reality. Figure 16.7 illustrates how the ideals in a
classical decision model are compromised by cognitive
limitations and bounded rationality.
Armed with only partial knowledge about the available action
alternatives and their consequences, decision makers in the
behavioral model are likely to choose the first alternative that
appears satisfactory to them. Herbert Simon calls this the
tendency to satisficing. He states, “Most human decision
making, whether individual or organizational, is concerned with
the discovery and selection of satisfactory alternatives; only in
exceptional cases is it concerned with the discovery and
selection of optimal decisions.”42Systematic and Intuitive
Decision Making
Individuals and teams may be described as using both
comparatively slow systematic and quick intuitive thinking as
they make decisions and try to solve problems. Systematic
decision making is consistent with the rational model in which a
decision is approached in a step-by-step and analytical fashion.
You might recognize this style in a team member who tries to
break a complex problem into smaller components that can be
addressed one by one. Teams engaged in systematic thinking
will try to make a plan before taking action and to search for
information and proceed with problem solving in a fact-based
and logical fashion. Systematic thinking is also known as an
analytical approach and is often recommended for better
decision making.43

30. We think of intuition as the ability to know or recognize quickly
and readily the possibilities of a given situation.44 Individuals
and teams using intuitive decision making are more flexible and
spontaneous in decision making.45 You might observe this
pattern in someone who always seems to come up with an
imaginative response to a problem, often based on a quick and
broad evaluation of the situation. Decision makers in this
intuitive mode tend to deal with many aspects of a problem at
once, search for the big picture, jump quickly from one issue to
another, and act on hunches from experience or on spontaneous
ideas. This approach is common under conditions of risk and
uncertainty.
Because intuitive thinkers take a flexible and spontaneous
approach to decision making, their presence on a team adds
potential for creative problem solving and innovation. Does this
mean that we should always favor the more intuitive and less
systematic approach? Most likely not—teams, like individuals,
should use and combine the two approaches to solve complex
problems. In other words, there's a place for both systematic
and intuitive thinking in management decision making.
Research InsightsAnalytical and Intuitive Decisions: When to
Trust Your Gut
Traditionally, managers were advised to use analytical rather
than intuitive decision-making skills. This is because people
believed that intuitive decision making would lead to biased and
bad decisions. However, recent research shows that this may be
not true. In a paper published by Erik Dane and colleagues,
findings show that for experienced decision makers, intuitive
heuristics can actually lead to better decision making.46 Why
would that be?
The review of the literature suggested that intuition-based
decision making works well for experts facing tasks that cannot
be broken down into component parts. As the authors note,
“Experts are well equipped to capitalize on the potential
benefits of intuition because they possess … domain knowledge

31. that foster[s] rapid … accurate” choices. To test this theory,
Dane and colleagues conducted a series of lab experiments.
In one of the experiments, the researchers asked students to rate
the difficulty of basketball shots. First, they took photos of
basketball players taking shots. Then they asked coaches to rate
the difficulty of these shots on a scale of one to ten. Following
this they gathered the student participants. The students were
first separated into two groups. One group had extensive
basketball experience (e.g., played three years of high school
basketball). The other did not. In the two experience groups,
students were asked to develop an analytic model with specific
factors (e.g., the closeness of the defender) that would allow
them to make judgments about difficulty. The other students
were asked to use intuition. They then gave the students a
limited amount of time to make the choices. Whom do you think
had the higher scores?
Results of the Basketball Experiment
Intuition Used
Analysis Used
Low Expertise
21.34*
24.89
High Expertise
30.09
26.46
*High score is better
It turns out that the individuals with the highest scores were the
students who had played basketball and used intuition. The
lowest scores came from the students without basketball
expertise who used intuition. The researchers also ran a similar
test with fake versus real designer brand handbags. Here, the
experts were students who owned several of the real bags versus
those who did not. The results were virtually identical.
Do the Research
How much expertise do you think is necessary for intuition to

32. be superior? How do you know if you have it, and how can you
get it? Can you think of other important research questions you
would want to test to learn more about the role of trusting the
gut in decision making?
How Can I Be a Better Decision Maker?
The pathways to good decisions can seem like a minefield of
challenging issues and troublesome traps. Whether working
individually or as part of a team, being a more effective
decision maker requires avoiding decision traps and recognizing
decision biases.
Avoid Decision Traps
Judgment, or the use of intellect, is important in all aspects of
decision making. When we question the ethics of a decision, for
example, we are questioning the judgment of the person making
it. Work by Nobel laureate Daniel Kahneman, his colleagues,
and many others shows that people are prone to mistakes and
biases that often interfere with the quality of decision
making.47 These can work as decision traps.
Many decision traps can be traced back to the use of heuristics.
While heuristics serve a useful purpose by making it easier to
deal with uncertainty and the limited information common to
problem situations, they can also lead us toward systematic
errors that affect the quality, and perhaps the ethical
implications, of any decisions made.48
· The availability heuristic involves assessing a current event
based on past occurrences that are easily available in one's
memory. An example is the product development specialist who
decides not to launch a new product because of a recent failure
of another launch. In this case, the existence of a past product
failure has negatively, and perhaps inappropriately, biased
judgment regarding how best to handle the new product.
· The representativeness heuristic involves assessing the
likelihood that an event will occur based on its similarity to
one's stereotypes of similar occurrences. An example is the
team leader who selects a new member not because of any
special qualities of the person, but because the individual comes

33. from a department known to have produced high performers i n
the past. In this case, the individual's current place of
employment—not job qualifications—is the basis for the
selection decision.
· The anchoring and adjustment heuristic involves assessing an
event by taking an initial value from historical precedent or an
outside source and then incrementally adjusting this value to
make a current assessment. An example is the executive who
makes salary increase recommendations for key personnel by
simply adjusting their current base salaries by a percentage. In
this case, the existing base salary becomes an “anchor” that
limits subsequent salary increases. This anchor may be
inappropriate, such as in the case of an individual whose market
value has become substantially higher than what is reflected by
the base salary plus increment approach.
Recognize Decision Biases
In addition to decision traps, decision makers are also prone to
decision biases. One bias is confirmation error, whereby the
decision maker seeks confirmation for what is already thought
to be true and neglects opportunities to acknowledge or find
disconfirming information. A form of selective perception, this
bias involves seeking only information and cues in a situation
that supports a preexisting opinion.
A second bias is the hindsight trap where the decision maker
overestimates the degree to which he or she could have
predicted an event that has already taken place. One risk of
hindsight is that it may foster feelings of inadequacy or
insecurity in dealing with future decision situations.
A third bias is the framing error. It occurs when managers and
teams evaluate and resolve a problem in the context in which
they perceive it—either positive or negative. Suppose research
shows that a new product has a 40 percent market share. What
does this really mean to the marketing team? A negative frame
views the product as deficient because it is missing 60 percent
of the market. Discussion and problem solving within this frame
would likely focus on: “What are we doing wrong?” If the

34. marketing team uses a positive frame and considers a 40 percent
share as a success, the conversation might be: “How can we do
even better?” We are constantly exposed to framing in the world
of politics—the word used to describe it is spin.
How Can I Guard against Common Decision-Making Pitfalls?
Even if you manage to avoid decision traps and biases, there are
still other pitfalls you can fall into. You can find yourself
escalating commitment to a bad decision, simply because you
already have so much invested in it. Or you can make the
mistake of using the wrong decision style for a group, which
could lead to the wrong decision or others who are unhappy
with the decision process.
Watch for Escalating Commitment
After the process of making a decision is completed and
implementation begins, it can be hard for decision makers to
change their minds and admit they made a mistake even when
things are clearly not going well. The time and effort expended
on a decision is conceptually similar to a company's sunk
financial cost in a new investment. Instead of backing off, the
tendency is to press on to victory. This is called escalating
commitment—continuing and renewing efforts on a previously
chosen course of action, even though it is not working.49 The
tendency toward escalating commitment is reflected in the
popular adage, “If at first you don't succeed, try, try again.”
Escalating commitments are a form of decision entrapment that
leads people to do things that the facts of a situation do not
justify. This is one of the most difficult aspects of decision
making to convey to executives because so many of them rose
to their positions by turning losing courses of action into
winning ones.50 Managers should be proactive in spotting
failures and more open to reversing decisions or dropping plans
that are not working. This is easier said than done.
The tendency to escalate commitments often outweighs the
willingness to disengage from them. Decision makers may
rationalize negative feedback as a temporary condition, protect
their egos by not admitting that the original decision was a

35. mistake, or characterize any negative results as a learning
experience that can be overcome with added future effort.
Perhaps you have experienced an inability to call it quits or
been on teams with similar reluctance. It's hard to admit to a
mistake, especially when a lot of thought and energy went into
the decision in the first place; it can be even harder when one's
ego and reputation are tied up with the decision. By way of
advice, researchers suggest the following ways to avoid getting
trapped in escalating commitments.
· Set advance limits on your involvement and commitment to a
particular course of action; stick with these limits.
· Make your own decisions; don't follow the lead of others
because they are also prone to escalation.
· Carefully determine just why you are continuing a course of
action; if there are insufficient reasons to continue, don't.
· Remind yourself of the costs of a course of action; consider
saving these costs as a reason to discontinue.
Know Whom to Involve
In practice, good organizational decisions are made by
individuals acting alone, by individuals consulting with others,
and by people working together in teams.51 In true contingency
fashion, no one option is always superior to the others: who
participates and how decisions are to be made should reflect the
issues at hand.52
When individual decisions, also called authority decisions, are
made, the manager or team leader uses information gathered and
decides what to do without involving others. This decision
method assumes that the decision maker is an expert on the
problem at hand. In consultative decisions, by contrast, inputs
are gathered from other persons and the decision maker uses
this information to arrive at a final choice. Team members work
together to make the final choice by consensus or unanimity
and, it is hoped, without resorting to a vote.
Victor Vroom and his colleagues identify different ways in
which individual, consultative, and team decisions are
made.53 They want decision makers to understand the

36. differences and be able to make good, informed choices among
them in real situations. There are two forms of the authority
decision to recognize and understand. In one, the authority
figure makes the decision alone, using information avail able at
that time. In another, the authority figure obtains information
from team members and then makes a decision on behalf of the
group. There are also two forms of the consultative decision. In
one, the team leader shares the problem with team members
individually, gets their ideas and suggestions, and then makes a
decision. In another, the team leader shares the problem with
team members as a group, collectively obtains their ideas and
suggestions and then makes a decision. In the team or consensus
decision, the leader shares the problem with team members as a
group, engages them in lots of sharing and discussion, and then
seeks consensus to arrive at a final decision.
When choosing among the decision options, consultative and
team decisions are recommended when the leader lacks
sufficient expertise and information to solve the problem alone,
the problem is unclear and help is needed to clarify the
situation, acceptance of the decision and commitment by others
are necessary for implementation, and adequate time is
available to allow for true participation. Consultative decisions
are also preferred as pathways for talent development and
engagement. Authority decisions work best when team leaders
have the expertise needed to solve the problem, they are
confident and capable of acting alone, others are likely to
accept and implement the decision they make, and little or no
time is available for discussion. Realistically speaking, if
problems must be resolved immediately, the authority decision
may be the only option.
Bringing OB to Life
Intuition and US Airways Flight 1549
On the afternoon of January 15, 2009, television news anchors
broke in with news about a plane that had crashed in the Hudson
River. The immediate reaction was “Oh no, not another tragic

37. plane crash!” But it turned out this time would be different.
This was largely due to the pilot, Chesley “Sully” Sullenberger,
whose experience and quick thinking allowed him to
successfully crash land US Airways Flight 1549 into the Hudson
River, saving the lives of everyone on board.
In an interview with Greta van Susteren of Fox News,
Sullenberger was asked to recount what happened. Van Susteren
commented, “It probably took about twenty seconds to explain;
you had to make that decision like [snaps her fingers] that.”
Sullenberger responded, “It was sort of an instinctive move
based upon my experience and my initial read of the situation.”
What Sullenberger describes is intuitive decision making. It is
precisely why pilots spend considerable time in flight
simulators. The goal is to develop the experience necessary for
dealing with problems that may only occur once, if ever, in a
career. While systematic decision making works in normal
operating mode, in times of crisis, what is needed is intuitive
decision making. Intuition allows someone to quickly size up a
situation and act out of instinct. That is exactly what
Sullenberger did that allowed him to save hundreds of lives.
Know How to Make Decisions in Crises
A unique situation is decision making during a crisis. One of
the mistakes people make in these situations is turning to a
knee-jerk reaction. This occurs because our brain is wired to
focus on self-protection, which may cause us to focus on the
safety for ourselves and not for others. We also tend to operate
based on emotion and not logic. In crisis situations, adrenaline
kicks in and switches off the logical part of the brain, which
reduces our ability to make a quality decision.
What can help with decision making under crisis is training and
preparation. In a crisis we go through three stages of reacting:
(1) stalling, (2) deciding what to do, and (3) acting. Training on
these three stages can increase decision quality. By preparing
for a crisis, you can reduce the stall time because individuals
have some idea of what to expect as far as how their body will
react. For example, we know that when individuals are in crisis,

38. they experience paralysis or panic. Their heart rates go up, they
have difficulty breathing, they may get hot or stressed, and
vision may even be impaired—all leading to poor decision
quality. In these situations, it is best to take a breath, let the
initial response pass, and then try to act when thinking is
clearer. Take a minute if you have it, try to assess the situation,
and then decide what to do in a slightly cooler environment.
Study Guide 16.3
What are the different approaches to decision making?
· In the classical decision model, optimum decisions identifying
the absolute best choice are made after analyzing with full
information all possible alternatives and their consequences.
· In the behavioral decision model, satisficing decisions that
choose the first acceptable alternative are made with limited
information and bounded rationality.
· In the intuitive model, decision makers deal with many aspects
of a problem at once, jump quickly from one issue to another,
and act on hunches from experience or on spontaneous ideas.
What are common decision traps and biases?
· Common decision traps include the use of judgmental
heuristics. Such heuristics include availability decisions based
on recent events, representativeness decisions based on similar
events, and anchoring and adjustment decisions based on
historical precedents.
· Common decision biases include confirmation error, seeking
information to justify a decision already made; the hindsight
trap, overestimating the extent to which current events could
have been predicted; and framing error, or viewing a problem in
a limited context.
How can I guard against common decision-making pitfalls?
· Individuals and teams must know who should be involved in
making decisions, making use of individual, consultative, and
team decisions as needed to best fit the problems and
opportunities being faced.
· Individuals and teams must be able to counteract tendencies
toward escalating commitment to previously chosen courses of

39. action that are not working; they must know when to quit and
abandon a course of action.
· Understand how to make decisions under crisis.
Self-Test Chapter 16
Multiple Choice
1. A/an ____________ conflict occurs in the form of a
fundamental disagreement over ends or goals and the means for
accomplishment.
1. a. relationship
2. b. emotional
3. c. substantive
4. d. procedural
2. __________ is particularly appropriate for functional
conflict.
1. a. Tolerating differences
2. b. Reducing differences
3. c. Avoidance
4. d. Win-lose
3. __________ conflict involves interpersonal difficulties that
arise over feelings of anger, mistrust, dislike, fear, resentment,
and similar.
1. a. Emotional
2. b. Substantive
3. c. Relational
4. d. Status
4. The indirect conflict management approach that uses the
chain of command for conflict resolution is known as
___________.
1. a. upward referral
2. b. avoidance
3. c. smoothing
4. d. appeal to common goals
5. A lose–lose conflict is likely when the conflict management
approach is one of ____________.
1. a. collaborator
2. b. altering scripts

40. 3. c. accommodation
4. d. problem solving
6. Which approach to conflict management can be best
described as both highly cooperative and highly assertive?
1. a. competition
2. b. compromise
3. c. accommodation
4. d. collaboration
7. Both ____________ goals should be considered in any
negotiation.
1. a. performance and evaluation
2. b. task and substance
3. c. substance and relationship
4. d. task and performance
8. In _____________ one or both parties make concessions just
to get things over with.
1. a. hard bargaining
2. b. the bargaining zone
3. c. soft bargaining
4. d. bargaining power
9. When a person approaches a negotiation with the assumption
that in order for him to gain his way, the other party must lose
or give up something, the ____________ negotiation pitfall is
being exhibited.
1. a. myth of the fixed pie
2. b. escalating commitment
3. c. overconfidence
4. d. hearing problem
10. A team leader who makes a decision not to launch a new
product because the last new product launch failed is falling
prey to the ____________ heuristic.
1. a. anchoring
2. b. availability
3. c. adjustment
4. d. representativeness
11. A ________ occurs when managers and teams evaluate and

41. resolve a problem in the context in which they perceive it.
1. a. confirmation error
2. b. framing error
3. c. hindsight trap
4. d. escalating commitment
12. The _________ decision model views decision makers as
acting in a world of complete certainty while the ____________
decision model views decision makers as acting only in terms of
what they perceive about a given situation.
1. a. classical; systemic
2. b. classical; behavioral
3. c. behavioral; systemic
4. d. behavioral; classical
13. The rational decision model is a ______ step model of
decision making, beginning with defining the problem and
ending with implementation and evaluation.
1. a. three-
2. b. four-
3. c. five-
4. d. six-
14. The ____________ bases a decision on incremental
adjustments to an initial value determined by historical
precedent or some reference point.
1. a. representativeness heuristic
2. b. anchoring and adjustment heuristic
3. c. confirmation trap
4. d. hindsight trap
15. The ____________ is the tendency to focus on what is
already thought to be true and not to search for disconfirming
information.
1. a. representativeness heuristic
2. b. anchoring and adjustment heuristic
3. c. confirmation trap
4. d. hindsight trap
Short Response
16. List and discuss the different types of conflict faced in

42. organizations.
17. Under what conditions might a manager use avoidance or
accommodation?
18. What are heuristics, and how can they affect individual
decision making?
19. What is escalating commitment, and why is it important to
recognize it in decision making?
Applications Essay
20. Discuss the common pitfalls you would expect to encounter
in negotiating your salary for your first job, and explain how
you would best try to deal with them.
CHAPTER
16
Handle
Conflict,
Negotiation,
and
Decision
Making
Don't neglect the power of “yes”
LEARNING OBJECTIVES

43. At the end of this chapter you will be able to:
·
Understand
what conflict is, why it is occurring and how to manage it.
·
Describe
methods for
effective negotiations.
·
List
tools that will help you make more effective and less biased
decisions.
WHAT'S INSIDE
?
·
Be a Critical Thinker: Dealing with Deception at the Bargaining
Table
·
Bringing OB to Life: Intuition and US Airway Flight 1549

44. ·
Checking Et
hics in OB: Is a Two
-
Tiered Wage System Ever Justified?
·
OB in the Office: What to Do When Face
-
to
-
Face Negotiations
Are Not Possible: Tips
for Negotiating via Email
·
OB in the Office: Sooner or Later You'll Know How to
Negotiate a Better Raise
·
Research Insi
ghts: Analytical and Intuitive Decisions: When to Trust Your
Gut
·
Worth Considering or Best Avoided? Labor and Manage
ment Sides Disagree. Is a Strike
the Answer?
You are at work and you hear your colleagues disagreeing with

45. each other
loudly. Their voices c
an be heard throughout the office, and you notice people
popping their heads up to see what's going on. You are in c
harge of the team,
and you know that your organization prides itself on having a
collegial culture.
What do you do?
For many people, the ans
wer is clear: Conflict is bad
—
we need to get rid of it.
Conflict makes people uncomfortable and harms our ability to
work together,
so managers need to step in and resolve differences. Is this
always true?
Couldn't it be that conflict can also play a posit
ive role in the workplace?
In this chapter, we show that conflict can be good when it
surfaces important
issues that
need to be discussed. The key to managing it is know ing how to
determine what kind of conflict is occurring and then using it to
generate b
etter
decisions. This requires developing skills in areas that are
becoming
increasingly important in today's workpl
ace: conflict, negotiation, and decision
making.
CHAPTER 16

46. Handle Conflict, Negotiation, and Decision Making
Don't neglect the power of “yes”
LEARNING OBJECTIVES
At the end of this chapter you will be able to:
manage it.
methods for effective negotiations.
biased decisions.
WHAT'S INSIDE?
Bargaining Table
ight 1549
-Tiered Wage System Ever
Justified?
-to-Face
Negotiations Are Not Possible: Tips
for Negotiating via Email
Negotiate a Better Raise
to Trust Your Gut
Sides Disagree. Is a Strike
the Answer?
You are at work and you hear your colleagues disagreeing with
each other
loudly. Their voices can be heard throughout the office, and you
notice people
popping their heads up to see what's going on. You are in
charge of the team,
and you know that your organization prides itself on having a
collegial culture.
What do you do?

47. For many people, the answer is clear: Conflict is bad—we need
to get rid of it.
Conflict makes people uncomfortable and harms our ability to
work together,
so managers need to step in and resolve differences. Is this
always true?
Couldn't it be that conflict can also play a positive role in the
workplace?
In this chapter, we show that conflict can be good when it
surfaces important
issues that need to be discussed. The key to managing it is
knowing how to
determine what kind of conflict is occurring and then using it to
generate better
decisions. This requires developing skills in areas that are
becoming
increasingly important in today's workplace: conflict,
negotiation, and decision
making.
Instructions
For your assignment this week, select two of the following
scenarios and answer all parts of the questions as prompted.
******************
Although colleges and universities have utilized distance
learning (i.e., online classes) for many years, teaching
kindergarten through 12th-grade students using an online
platform is much rarer. Unfortunately, the COVID-19
(Coronavirus) pandemic of 2020 forced K-12 schools
throughout the world to turn to distance learning to teach
children under 18. But how effective is an online curriculum for
children who are only familiar with physical classrooms? To
answer this question, your local school district asks you to
conduct a series of studies focusing on the new distance
learning curriculum they developed to teach K-12 students.

48. Fortunately, the school district does have a control group option
available to you should you need it. That is, some classrooms
can use in-person instruction as the school has adequate safety
measures in place to protect these students. The school
administrator who hired you has four goals (though only the
first goal must be addressed in all study designs):
· First, the school administrator must know if online students
are adequately learning material appropriate for their age group
(as measured by an end-of-semester exam that all students must
pass).
· Second, the administrator would like to know if the curriculum
they developed works equally well across students with
different computer experience (experienced versus
inexperienced).
· Third, the administrator would like to know if students are
improving as they progress through the semester.
· Fourth, the administrator would like to know if the curriculum
helps male and female students equally.
The school administrator recognizes that the COVID-19
pandemic is temporary but that other pandemics might occur in
the future, or K-12 schools might naturally evolve an online
component. Thus, the administrator would like to know how
well distance learning students perform over the next four
calendar years.
Assignment Instructions:
You have come up with a series of studies to test the
administrator’s goals.
· Use the information in the study designs presented below to
determine whether the design involves a posttest-only between-
groups design, a pretest-posttest between groups design, a
matched pairs design, a block design, a within-group design
(pretest, posttest), or a longitudinal design.
· Determine if the study meets the first goal of the
administrator.
· Determine whether the study meets at least one other goal, and
if not, describe how you would alter the study design to meet at

49. least one other administrator goal.
Scenario A
You design a study where you randomly assign students to one
of two conditions. In one condition, students take the
curriculum fully online. In the second condition, they take the
curriculum fully in person. However, because you think
familiarity and experience with computers might impact how
students adapt to fully online classes, you first find students
who are experienced with computers as well as students who are
not experienced with computers. To make sure the two
conditions are composed of students who share similar traits
and abilities, you pair up experienced computer users and send
one to Condition 1 and the other to Condition 2. You do the
same for the next pair (and the next). You also pair up students
who are not experienced with computers and similarly assign
one to Condition 1 and the other to Condition 2. Here, the
independent variable is the condition (online versus in-person
teaching), and the dependent variable(s) is the extent to which
the child learns the age-appropriate material (as measured by
passing the final exam and/or assignments).
1. This study best describes which of the six research designs
described in this lesson? Explain your response, including how
this study design meets the first administrator goal.
2. Does this design meet any of the other administrator goals?
· If yes, which one and why?
· If no, how could you redesign the study to meet at least one
other administrator goal?
Scenario B
You design a study where you randomly assign students to one
of two conditions. In one condition, students take the
curriculum fully online. In the second condition, they take the
curriculum fully in person. All students take a pretest at the
start of the semester and a post-test at the end of the semester.
Here, there are two independent variables. One is the type of
course (online versus in person), and the second is timing
(pretest at the start of the semester versus post-test at the end of

50. the semester). The dependent variable(s) is the extent to which
the child learns the age-appropriate material (as measured by
passing the final exam and/or assignments).
1. This study best describes which of the six research designs
described in this lesson? Explain your response, including how
this study design meets the first administrator goal.
2. Does this design meet any of the other administrator goals?
· If yes, which one and why?
· If no, how could you redesign the study to meet at least one
other administrator goal?
Scenario C
You design a study where you randomly assign students to one
of two conditions. In one condition, children will have in-
person instruction in a physical classroom. In the second
condition, the children will have online instruction. Both
conditions will use the same curriculum, though the online
version is remote. The independent variable will be the
condition (in person or online), and the dependent variable(s)
will be the extent to which the child learns the age-appropriate
material (as measured by passing the final exam and/or
assignments).
1. This study best describes which of the six research designs
described in this lesson? Explain your response, including how
this study design meets the first administrator goal.
2. Does this design meet any of the other administrator goals?
· If yes, which one and why?
· If no, how could you redesign the study to meet at least one
other administrator goal?
Scenario D
You design a study where you randomly assign students to one
of two conditions. In one condition, children will have in-
person instruction in a physical classroom. In the second
condition, the children will have online instruction. However,
you first match students on multiple key characteristics that you
think might impact their learning. In this case, you focus on
their computer experience and gender. That is, you pair students

51. with the same computer experience and then randomly assign
one member of each pair to the online condition and the other
member to the in-person condition.
Similarly, you pair inexperienced students, you pair males, and
you pair females, and once again assign one member of each
pair to the online condition and the other to the in-person
condition. You do this for all students. Thus, male experienced
computer users, male inexperienced computer users, female
experienced computer users, and female inexperienced computer
users are present in both online and in-person classes. The
dependent variable(s) is the extent to which the child learns the
age-appropriate material (as measured by passing the final exam
and/or assignments).
1. This study best describes which of the six research designs
described in this lesson? Explain your response, including how
this study design meets the first administrator goal.
2. Does this design meet any of the other administrator goals?
· If yes, which one and why?
· If no, how could you redesign the study to meet at least one
other administrator goal?
Scenario E
Unfortunately, you find that the school district cannot give you
an adequate in-person comparison group; therefore, all students
will participate in the new online curriculum. Since they still
want your help to assess the program's effectiveness, you decide
to do so by assessing student knowledge at the start of the
semester and comparing it to their knowledge at the end of the
semester. The dependent variable(s) is the extent to which the
child learns the age-appropriate material (as measured by
passing the final exam and/or assignments).
1. This study best describes which of the six research designs
described in this lesson? Explain your response, including how
this study design meets the first administrator goal.
2. Does this design meet any of the other administrator goals?
· If yes, which one and why?
· If no, how could you redesign the study to meet at least one

52. other administrator goal?
Scenario F
You design a study where you randomly assign students to one
of two conditions. In one condition, children will have in-
person instruction in a physical classroom. In the second
condition, the children will have online instruction. Fortunately,
your study design allows you to follow and assess both sets of
students multiple times over four years. Even as the students
advance from one grade to the next, your study will determine if
taking classes online helps or hurts their ability to pass
assignments and final exams (the dependent variables in this
study). The independent variables would be (a) the varying
amounts of times assessments are taken (quarterly, mid-
semester, end of the semester, the following semester, the next
school year, etc.) and (b) the two conditions, in-person and
online instruction.
1. This study best describes which of the six research designs
described in this lesson? Explain your response, including how
this study design meets the first administrator goal.
2. Does this design meet any of the other administrator goals?
· If yes, which one and why?
· If no, how could you redesign the study to meet at least one
other administrator goal?
Length: 5-7 pages, not including title and reference pages
References: Include a minimum of 3 scholarly resources.
The completed assignment should address all of the assignment
requirements, exhibit evidence of concept knowledge, and
demonstrate thoughtful consideration of the content presented in
the course. The writing should integrate scholarly resources,
reflect academic expectations and current APA standards, and
adhere to Northcentral University's Academic Integrity Policy.
CHAPTER 12
Teams and Teamwork: Two Heads Really Are Better Than One

53. Alone we can do so little; together we can do so much.
- Helen Keller
Chapter Quick Start
Surely you’ve experienced the highs and the lows of teams and
teamwork—as a team member and as a team leader. Teams and
teammates can be inspirational and they can also be highly
frustrating. People in teams can accomplish great things or end
up doing very little. The more we know about teams, teamwork,
and our personal tendencies toward team contributions, the
better prepared we are to participate in today’s team-driven
organizations.
LEARNING OBJECTIVES
12.1 Explain the ways teams contribute to organizations.
12.2 Describe current trends in the use of teams in
organizations.
12.3 Summarize the key processes through which teams work.
12.4 Discuss the ins and outs of team decision making.
Career Readiness – What to Look for Inside
Thought Leadership
Skills Make You Valuable
Analysis >Make Data Your Friend
Unproductive Meetings Are Major Time Wasters
Choices >Think before You Act
Creating Disharmony to Build a Better Team
Ethics >Know Right from Wrong
Social Loafing Is Hurting Team Performance
Insight >Learn about Yourself
Don’t Short Your Team Contributions
· EvaluateCareer Situations:
What Would You Do?
· ReflectOn the Self-Assessment:
Team Leader Skills
· ContributeTo the Class Exercise:
Work Team Dynamics
· ManageA Critical Incident:
The Rejected Team Leader

54. · CollaborateOn the Team Project:
Superstars on the Team
· AnalyzeThe Case Study:
Auto Racing: When the Driver Takes a Back Seat
“Sticks in a bundle are hard to break”—Kenyan proverb
“Never doubt that a small group of thoughtful, determined
people can change the world”—Margaret Mead, anthropologist
“Pick good people, use small teams and give them great tools so
that they are very productive.”—Bill Gates, businessman and
philanthropist
“Gettin’ good players is easy. Gettin’ 'em to play together is the
hard part”—Casey Stengel, Hall of Fame Major League baseball
manager
From proverbs to societies to sports to business, the operation
of teams and teamwork has been a consistent focal point of
collective organization and is widely recognized as a critical
tool for accomplishing great things.1 Even so, just the
words group and team elicit both positive and negative reactions
from people who have been involved—either as observers or
participants—in these collectives. Although it is an embedded
idiom in Western culture that “two heads are better than one,”
we also are warned by an idiom equally embedded in our culture
that “too many cooks spoil the broth.” A true skeptic of the
collective action implied by groups or teams might say: “A
camel is a horse put together by a committee.”
Teams have a great deal of performance potential but also are
extremely complex in how they function. Teams can be a
supercharged vehicle to achieve great successes, and they can
also be the cause of equally monstrous failures.2 More than a
third of individuals participating in teams report dissatisfaction
with teamwork. Less than half of team members report receiving
training in team dynamics.3 Still, many people prefer to work in
teams than working alone. What is clear is that there is a great
deal of variability in responses to—and the effectiveness of—
teams in organizations today.
12.1 Teams in Organizations

55. LEARNING OBJECTIVE 12.1
Explain the ways teams contribute to organizations.
WileyPLUS
See Author Video
Learn More About
· Teamwork pros
· Teamwork cons
· Meetings, meetings, meetings
· Organizations as networks of groups
A team is a relatively small set of people with complementary
skills who regularly interact, and work interdependently to
achieve shared goals.4Teamwork is the process of team
members working together to accomplish these goals. Managers
must be prepared to perform at least the four important
teamwork roles shown in Figure 12.1. A team leader serves as
the appointed head of a team or a work unit. A team
member serves as a contributing part of a project team.
A network facilitator serves as a peer leader and networking
hub for a special task force. A coach or developer serves as a
team’s advisor to improve team processes and performance.
A team is a collection of people who regularly interact to pursue
common goals.
Teamwork is the process of people actively working together
interdependently to accomplish common goals.
FIGURE 12.1 Roles managers play in teams and teamwork.
A fundamental difference between teams and groups is whether
members’ goals or outcomes require that they work
interdependently or independently of one another.
The interdependence characteristic of teams puts members in
positions where they depend on each other to fulfill tasks and
carry out their work.5 Interdependence influences the way team
members combine inputs such as ideas and efforts to create
outcomes such as a completed task or project.6 And when team
members are interdependent, they tend to share information and
communicate more often, as well as act cooperatively and

56. helpfully toward one another.7
Interdependence is the extent to which team members depend on
one other to complete their work effectively.
Teamwork Pros
Although working effectively with other members can be hard
work, the effort is worth it when the team meets anticipated
performance expectations.8 One great benefit of teams is their
capacity to accomplish goals and performance expectations far
greater than what’s possible for individuals alone. This
collective performance potential is called synergy, the creation
of a whole that is greater than the sum of its individual parts.
Synergy is the creation of a whole greater than the sum of its
individual parts.
Synergy pools individual talents and efforts to create
extraordinary results through collective action. When Jens
Voigt, a former Tour de France star, was asked to describe a
“perfect cyclist,” he instead described this composite of his
nine-member team: “We take the time trial legs of Fabian
Cancellara, the speed of Stuart O’Grady, the climbing capacity
of our leaders, and my attitude.” Voigt’s point was that the tour
is simply too hard for a single rider to win based on individual
talents alone.9
Team connections can help everyone to do their jobs better —
getting help, solving problems, sharing ideas, responding to
favors, motivating one another, and avoiding roadblocks. Team
relationships can also help satisfy important needs that may be
difficult to meet in regular work or personal settings. Just being
part of a team that offers positive interpersonal interactions can
provide a sense of security, belonging, and emotional
support.10 In sum, it’s no secret that teams can be hard work.
But it’s also true that they’re most often worth it. The many
benefits of teams include the following.
· Performance gains through synergy
· More resources for problem solving
· Improved creativity and innovation
· Improved decision-making quality