Business Negotiation and Solving the Intergroup Conflicts

Distributive and integrative bargaining

Distributive bargaining is a concept of negotiation that is used when different parties want to divide or distribute a common resource (Allen, 2003). Several factors can result in the distribution of a resource. Due to this fact, it is essential to come up with a strategy that will ensure that all parties benefit from the division. This strategy is used to solve conflicts that are characterized by different parties having different interests with regard to the resource at hand. In addition, none of these parties is willing to compromise in order to ensure that the cooperation that existed initially continues (Borisoff and Victor, 1998). This strategy is characterized by the division of the resource. This is the only solution that managers will have at that point and time to solve the problem and ensure that all the parties involved benefit from the solution. For example, in a case where the financial budget of an organization has been cut down, distributive bargaining among different departments is the only solution that will reduce the impacts that the employees will feel (Borisoff and Merrill, 1998).

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Integrative bargaining on the other hand refers to a negotiation concept that whereby different parties come together to find a solution to their problems (Spangler, 2003). This strategy is characterized by managers combining all the resources from the different parties to come up with a final product that will be beneficial to all. Here, the parties develop mutual agreements that will aim at meeting their needs and interest. In the process, these parties avoid the development of disputes among them (Daft, 2002). This is because all the parties involved work together as a team to come up with solutions to the problems that they are facing. This leads to a win-win situation as the interest of each party have been considered a resultant agreement. As a result, this agreement leads to the development of a favorable relationship among the parties involved in the short run and in the long run.

Consequences of unresolved intergroup conflicts and effects on employee performance and motivation

An organization is made up of groups of individuals who are distributed in various departments within the organization. In the process, these individuals normally have different goals and objectives that they want to attain in the short run and in the long run. Therefore, these individuals are expected to meet their personal, departmental and organizational goals and objectives. In addition, these individuals normally have different ideologies and strategies. Given this scenario, conflict among employees is inevitable (Victor, 2010). It is thus the role of the management to identify the sources of conflict and come up with solutions before the situation gets out of hand. Conflicts are at times beneficial if the management can use them effectively to increase competition and production among employees. On the other hand, conflicts can affect an organization in a negative way if its causes are not identified early enough and proper mechanisms are put in place to resolve the issue. This in turn affects the performance and morale of employees (Jago, 2002).

If the management does not take careful measures to identify the causes of conflicts, the issue may prevail in the short run and in the long run (James, 2010). This may result in a number of outcomes. First, insubordination among the employees may develop. Due to the fact that the management has failed to solve the issues that affect the normal operations of the organization, employees may lose the trust, respect and faith that they had in them. In such a situation, the employees will feel that the management does not have any form of control over the organization. This will impact negatively their performance, attitudes and characters. As a result, the overall performance of the organization is expected to decline (Bass, 2010).

If the management allows conflict to continue in the long term, employees will put much of their efforts into their own personal interests rather than on production (Miller and Steinberg, 2004). In such a case, conflict resolution will be the main priority of employees. As a result, they will spend much of their time trying to come up with a solution to their problems. This will have a huge blow on the production of the company. This will be due to the fact that only a limited amount of time will be allocated to production. As a result, the chances of the organization being sustainable in the short run and in the long run will be minimized (Thomas, 2004).

In an organization, conflict arises between individuals, groups and departments. For an organization to operate in an effective and efficient manner, all the employees within the organization need to work together as a team. However, as a result of the conflict that has developed among them, these individuals, groups or departments will fail to embrace the team spirit (Terry, 1996). The resultant effect of this act is the fragmentation of work within the organization. This will result in a decline in productivity and work quality, lack of new ideas and difficulty in the organization meeting its targets and deadlines. As a result, the organization will experience low levels of consumer satisfaction. This will in turn lead to the organization not being sustainable in the long run. It is thus essential for the management, through their leadership skills to ensure identify all causes of conflicts within their organizations and come up with proper measures to ensure that such an issue is solved before it impacts negatively on the morale and performance of employees (Nurmi, 2007).

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Conflict resolution strategy

As the manager of Track World International, I had to resolve the conflict that had developed between the management and employees as a result of the demand for a pay rise. This plea came from employees of all the departments. This situation was tricky to handle since there was no surplus in the budget. In addition, it required a long-term solution so that the conflict does not arise again in the future (Shelton, 2004). To solve this dispute, I used the integrative bargaining strategy and followed the following steps:

  1. Assessment
  2. Acknowledgment
  3. Attitude
  4. Action


During the assessment step, I summoned the representatives of all the departments. Here, I gave them the chance to present their grievances and demand with regard to the situation at hand. In the process, I managed to identify that their main demand was an increase in their normal pay and bonuses for overtime. Also at this stage, I allowed each party to state their demands and the regions they are willing to compromise on. This formed a firm basis on which the solution relied upon.

Acknowledgment was the second step. Here, each party was given the chance to state their grievances while the other parties involved listened. This was an essential step as it gave one the chance to be in the position of their partys situation. Despite the fact that it was not a must for the other party to agree to what was being mentioned, this stage was crucial as it built empathy that was essential in solving the dispute at hand. It was at this stage that the departmental heads discovered that they were incurring unnecessary expenditure especially on health cover, transportation costs and entertainment.

With the use of my implicit and explicit communication styles, I was able to determine the attitudes of the parties involved. The attitude that a party has developed towards the other really determines the manner in which these parties perceive each other. The members of the departments involved were bitter about the salary the company was offering them given the harsh economic times that were currently prevailing. Therefore, as a manager, I had to acknowledge this issue and come up with a solution that would unify all the employees of the organization so that we work together as a team.

After gathering and analyzing all the background information that is required, we came up with a problem-solving strategy that involved the participation of all the departments. We agreed to cut on the unnecessary costs that all the departments were willing to compromise. The surplus was then distributed to all the departments to cater for the pay increase that the employees were demanding. Despite the fact that the percentage increase was not as per their initial demands, most employees were satisfied with the efforts that the management and their departmental representatives put to solve the issue. To them, this was a source of motivation. After monitoring the progress of the employees for several months, it was evident that they were satisfied with the solution since production had increased by 4%.

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Allen, E. (2003). Distributive Bargaining. Beyond Intractability. Web.

Bass, B. (2010). From Transactional to Transformational Leadership: Learning to Share the Vision. Organizational Dynamics, 18 (3), 19-31.

Borisoff, D. and Victor, D. (1998). Conflict Management: A Communication Skills Approach. Boston: Allyn and Bacon.

Borisoff, D. and Merrill, L. (1998). The Power to Communicate: Gender Differences and Barriers. Prospect Heights, IL: Waveland.

Daft, R.L. (2002). Organizational Theory and Design. St. Paul, MN: West Publishers

Jago, A. (2002). Leadership: Perspectives in Theory and Research. Management Science, 28 (3), 315-336

James, B. (2010). From Transactional to Transformational Leadership: Learning to Share the Vision. Organizational Dynamics, 18 (3), 19-31.

Miller, G.R. and Steinberg, M. (2004). Between People: A New Analysis of Interpersonal Communication. Chicago: Science Research Associates.

Nurmi, R. (2007). International Management Leadership. New York: International Business Press.

Shelton, C.D. (2004). From Chaos to Order: Exploring New Frontiers in Conflict Management. Organization Development Journal,22 (3), 22–41.

Spangler, B. (2003). Integrative or Interest-Based Bargaining. Beyond Intractability. Web.

Terry, P.M. (2006). Conflict Management. Journal of Leadership Studies, 3 (2), 3–21.

Thomas,K. (2004). Thomas-Kilmann Conflict Mode Instrument. Sterling Forest, NY:Xicom, Inc.

Victor, M. (2010). Conflict Management and Negotiation Strategy. Resources for Business. Web.

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