Foundation of org behavior

3.3 Discussion

:

Using Power Well

Getting Started

Have you ever wondered where power comes from? Not the type

of power used for energy, but the power we see in countries,

organizations, and politics. Think about your organizational

structure. Is it a

flat or tall structure? Where is the power, who are

the power people, what type of power is displayed? Is it positional

power by the CEO? Or maybe you have been in a situation where

you had a leader who used reward power to ensure the goals of

the departme

nt were met. While you have studied the five power

bases in a previous course, you will return to them again in this

discussion assignment. Reviewing those power sources will be

helpful. However, in this discussion, you should consider not just

the base by

which one possesses power but think critically about

how one uses power. How one uses power has important

implications for organizational behavior.

Background Information

Power is sometimes considered through a negative lens, and

rightly so. Some people h

ave experienced the use of power in

structures, leaders, and even justice scenarios in ways that are

inequitable, abusive, or demeaning. However, at its core, power

represents the capacity to act or to do something. It is the

capacity to exert influence to

ward some outcome. For example,

imagine a flashlight without a battery. Without the “power,” the

flashlight cannot illuminate.

Power by itself is neutral and amoral. It is how power is generated,

how it is used, and how it is maintained that creates its po

sitive or

negative manifestations. As you work on this assignment, delve

below the surface of the power bases and the related information.

How do we as leaders (and organizational members) use power

well to influence positive organizational behavior?

1.

Revie

w

Chapter 13

(PDF document)

and read

Chapter 10

(PDF

document)

in the text,

An Introduction to Organization

Behavior

.

o

Terms of Use: This work

is licensed under a

Creative

Commons

(new tab)

by

–

nc

–

sa 3.0

(new tab)

license. The

original version can be found

here

(new tab)

.

3.3 Discussion: Using Power Well

Getting Started

Have you ever wondered where power comes from? Not the type

of power used for energy, but the power we see in countries,

organizations, and politics. Think about your organizational

structure. Is it a flat or tall structure? Where is the power, who are

the power people, what type of power is displayed? Is it positional

power by the CEO? Or maybe you have been in a situation where

you had a leader who used reward power to ensure the goals of

the department were met. While you have studied the five power

bases in a previous course, you will return to them again in this

discussion assignment. Reviewing those power sources will be

helpful. However, in this discussion, you should consider not just

the base by which one possesses power but think critically about

how one uses power. How one uses power has important

implications for organizational behavior.

Background Information

Power is sometimes considered through a negative lens, and

rightly so. Some people have experienced the use of power in

structures, leaders, and even justice scenarios in ways that are

inequitable, abusive, or demeaning. However, at its core, power

represents the capacity to act or to do something. It is the

capacity to exert influence toward some outcome. For example,

imagine a flashlight without a battery. Without the “power,” the

flashlight cannot illuminate.

Power by itself is neutral and amoral. It is how power is generated,

how it is used, and how it is maintained that creates its positive or

negative manifestations. As you work on this assignment, delve

below the surface of the power bases and the related information.

How do we as leaders (and organizational members) use power

well to influence positive organizational behavior?

1. Review Chapter 13(PDF document) and read Chapter 10(PDF

document) in the text, An Introduction to Organization

Behavior.

o Terms of Use: This work is licensed under a Creative

Commons(new tab) by-nc-sa 3.0(new tab) license. The

original version can be found here(new tab).

Chapter 10

Conflict and Negotiations

L E A R N I N G O B J E C T I V E S

After reading this chapter, you should be able to do the following:

1. Understand the different types of conflict.
2. Understand the causes of conflict.
3. Understand the consequences of conflict.
4. Understand how to manage conflict effectively.
5. Understand the stages of the negotiation process.
6. Understand how to avoid common negotiation mistakes.
7. Engage in conflict management and negotiation ethically.
8. Understand cross-cultural differences in conflict and negotiation.

462

10.1 Negotiation Failure: The Case of the PointCast

Chapter 10 Conflict and Negotiations

463

Figure 10.1

© Thinkstock

In 1997, a company called PointCast Network Inc. was the hottest start-up in Silicon Valley. Its founder and CEO,
Christopher Hassett, was “the most famous guy on the Internet,” said Hassett’s former attorney, Allen Morgan.
Hassett was named CNET’s newsmaker of the year—an honor previously bestowed on giants such as Bill Gates of
Microsoft and Larry Ellison of Oracle. The “push technology” that PointCast pioneered was making headlines as
well as being featured on the cover of Wired as “The Radical Future of the Media beyond the Web.”

All the attention around PointCast motivated one of the world’s largest communications companies—Rupert
Murdoch’s News Corporation—to make them an offer of $450 million. Negotiations were intense and lasted
weeks. With media speculation that PointCast—a company with almost no revenue—deserved to be valued at
$750 million, some people say Hassett started believing the hype and, with the support of his board, asked for
more money. “People involved in the company thought they’d be the next Netscape. They hung out for more,”
Murdoch said. News Corporation instead lowered its initial offer to $400 million but added incentive clauses that
brought the offer close to the original $450 million if PointCast met its financial projections.

PointCast also rejected that offer, and News Corporation walked away from the bargaining table. The timing
couldn’t have been worse for PointCast, as “push” technology became old news thanks to the maturing of
alternatives such as Yahoo! By the time PointCast decided to go public in 1998, the company was valued at half
of News Corporation’s last offer. Worse, the process of filing an initial public offering (IPO) requires the company
to disclose all potential dangers to investors. PointCast’s disclosures—such as news that customers had left
because of poor performance—scared off so many investors that PointCast ultimately withdrew its IPO. By that
time Hassett had been forced out by the board, but the company never fully recovered. In the end, PointCast was
acquired in 1999 by Idealab for $7 million. In this case, stalled negotiations cost the firm a steep price of $443
million.

Referring to the missed opportunity, an industry expert said, “It may go down as one of the biggest mistakes in
Internet history.” According to Steve Lippin, writing in the Wall Street Journal, “Merger professionals point to
these euphemistically called ‘social issues’—ego and corporate pride, that is—as among the most difficult aspects

Chapter 10 Conflict and Negotiations

10.1 Negotiation Failure: The Case of the PointCast 464

of negotiating multibillion-dollar mergers these days. Although financial issues can be vexing too, these social
issues can be deal-breakers.”

In a similar and more recent situation in 2008, Yahoo! CEO Jerry Yang was ousted by the board of directors
following failed deals with Microsoft and Google. Yang’s behavior during negotiations indicated that he wasn’t
interested in bargaining as much as playing “hard to get.” He “kept saying we should get more money, we
should get more money, and [he was] not realizing how precarious their position was,” says high-tech analyst
Rob Enderle. In other words, even deals that look great financially can fall apart if participants fail to pay
attention to organizational behavior issues such as perception, groupthink, and power and influence.

Case written by [citation redacted per publisher request]. Based on information from Arnoldy. B. (2008,
November 19). Why Yahoo’s Jerry Yang stepped down. Christian Science Monitor. Retrieved January 20, 2009, from
http://www.csmonitor.com/2008/1119/p02s01-usec.html; Auletta, K. (1998, November 19). The last sure thing.
New Yorker; Lipin, S. (1996, August 22). In many merger deals, ego and pride play big roles in which way talks go.
Wall Street Journal, Eastern edition, p. C1; PointCast fire sale. (1999, May 11). Wired. Retrieved November 14, 2008,
from http://www.wired.com/techbiz/media/news/1999/05/19618.

D I S C U S S I O N Q U E S T I O N S

1. Considering the amount of buzz surrounding Hassett’s new technology
and the impact previous, similar advancements have made, was Hassett
necessarily foolish for not taking a quick offer?

2. Is the PointCast situation a case of pride clouding someone’s judgment
or more accurately a representation of the rapidly changing nature of
computer-related business? In other words, if Hassett’s advancement
had been in an industry that is not known for such rapid changes, would
he have been considered foolish if he hadn’t held out for more money?

3. This case focuses on how foolish Hassett was for not accepting Rupert
Murdoch’s first or second offer. However, think of the buyout offer from
the perspective of Rupert Murdoch. If the buyout had gone through,
News Corporation would likely have lost hundreds of millions of dollars
on the deal, and the company was effectively spared massive losses by
the merger falling through. What could Murdoch have done differently
to protect against such risky mergers in the future?

Chapter 10 Conflict and Negotiations

10.1 Negotiation Failure: The Case of the PointCast 465

10.2 Understanding Conflict

L E A R N I N G O B J E C T I V E S

1. Define conflict.
2. Understand different types of conflict.
3. Address whether conflict is always negative.

Let’s take a closer look at these social issues such as conflict to understand how they
can derail companies and individuals alike—and what to do to prevent such
consequences from happening to you. In this chapter, you’ll see that managing
conflict and engaging in effective negotiation are both key for effective
organizational behavior within organizations as well as daily life. Conflicts range
from minor annoyances to outright violence. For example, one million workers
(18,000 people per week) are assaulted on the job in the United States
alone.National Institute for Occupational Safety and Health. (1997). Violence in the
workplace. Retrieved November 14, 2008, from http://www.cdc.gov/niosh/
violfs.html. One of the major ways to avoid conflicts escalating to these levels is
through understanding the causes of conflict and developing methods for managing
potential negative outcomes. Negotiation is one of the most effective ways to
decrease conflict and will also be examined in depth in this chapter.

Similar to how conflicts can range from minor to major, negotiations vary in terms
of their consequences. A high-stakes negotiation at work might mean the difference
between a company’s survival and its demise. On the other end of the spectrum, we
deal with minor negotiations on a regular basis, such as negotiating with a
coworker about which movie to see. Maybe you make a concession: “OK, we’ll watch
what you want but I get to pick where we eat.” Maybe you hold tough: “I don’t want
to watch anything except a comedy.” Perhaps you even look for a third option that
would mutually satisfy both parties. Regardless of the level, conflict management
and negotiation tactics are important skills that can be learned. First, let’s take a
deeper look at conflict.

Conflict1 is a process that involves people disagreeing. Researchers have noted that
conflict is like the common cold. Everyone knows what it is, but understanding its
causes and how to treat it is much more challenging.Wall, J. A., & Callister, R. R.
(1995). Conflict and its management. Journal of Management, 21, 515–558. As we noted
earlier, conflict can range from minor disagreements to workplace violence. In

1. A process that involves people
disagreeing.

Chapter 10 Conflict and Negotiations

466

Figure 10.2

Of the conflict between Michael
Dell (shown here) and Steve Jobs,
David Yoffie, a professor at the
Harvard Business School who
closely follows the computer
industry, notes that the conflict
may stem from their differences

addition, there are three types of conflict that can arise within organizations. Let’s
take a look at each of them in turn.

Types of Conflict
Intrapersonal Conflict

Intrapersonal conflict2 arises within a person. For example, when you’re uncertain
about what is expected or wanted, or you have a sense of being inadequate to
perform a task, you are experiencing intrapersonal conflict. Intrapersonal conflict
can arise because of differences in roles. A manager may want to oversee a
subordinate’s work, believing that such oversight is a necessary part of the job. The
subordinate, on the other hand, may consider such extensive oversight to be
micromanagement or evidence of a lack of trust. Role conflict, another type of
intrapersonal conflict, includes having two different job descriptions that seem
mutually exclusive. This type of conflict can arise if you’re the head of one team but
also a member of another team. A third type of intrapersonal conflict involves role
ambiguity. Perhaps you’ve been given the task of finding a trainer for a company’s
business writing training program. You may feel unsure about what kind of person
to hire—a well-known but expensive trainer or a local, unknown but low-priced
trainer. If you haven’t been given guidelines about what’s expected, you may be
wrestling with several options.

Interpersonal Conflict

Interpersonal conflict3 is among individuals such as
coworkers, a manager and an employee, or CEOs and
their staff. For example, in 2006 the CEO of Airbus S.A.S.,
Christian Streiff, resigned because of his conflict with
the board of directors over issues such as how to
restructure the company.Michaels, D., Power, S., &
Gauthier-Villars, D. (2006, October 10). Airbus CEO’s
resignation reflects company’s deep structural woes.
Wall Street Journal, pp. A1–A10. This example may reflect
a well-known trend among CEOs. According to one
estimate, 31.9% of CEOs resigned from their jobs because
they had conflict with the board of
directors.Whitehouse, K. (2008, January 14). Why CEOs
need to be honest with their boards. Wall Street Journal,
Eastern edition, pp. R1–R3. CEOs of competing
companies might also have public conflicts. In 1997,
Michael Dell was asked what he would do about Apple
Computer. “What would I do? I’d shut it down and give
the money back to shareholders.” Ten years later, Steve

2. Conflict that arises within a
person.

3. A type of conflict between two
people.

Chapter 10 Conflict and Negotiations

10.2 Understanding Conflict 467

in terms of being from different
generations and having different
management styles.

Source: http://en.wikipedia.org/
wiki/
Image:Michael_Dell,_square_cro
p.jpg.

Jobs, the CEO of Apple Inc., indicated he had clearly held
a grudge as he shot back at Dell in an e-mail to his
employees, stating, “Team, it turned out Michael Dell
wasn’t perfect in predicting the future. Based on today’s
stock market close, Apple is worth more than
Dell.”Haddad, C. (2001, April 18). Why Jobs and Dell are
always sparring. Business Week Online. Retrieved May 1,
2008, from http://www.businessweek.com/bwdaily/
dnflash/apr2001/nf20010418_461.htm; Markoff, J. (2006,
January 16). Michael Dell should eat his words, Apple
chief suggests. New York Times. Retrieved January 19,
2007, from http://www.nytimes.com/2006/01/16/
technology/16apple.html. In part, their long-time disagreements stem from their
differences. Interpersonal conflict often arises because of competition, as the Dell/
Apple example shows, or because of personality or values differences. For example,
one person’s style may be to “go with the gut” on decisions, while another person
wants to make decisions based on facts. Those differences will lead to conflict if the
individuals reach different conclusions. Many companies suffer because of
interpersonal conflicts. Keeping conflicts centered around ideas rather than
individual differences is important in avoiding a conflict escalation.

Intergroup Conflict

Figure 10.3

Conflicts such as the Air Canada pilot strike can have ripple effects. For example, Air Canada’s parent company
threatened to cancel a $6.1 billion contract with Boeing for new planes if they were unable to negotiate an
agreement with the pilots who would fly them. Conflict consequences such as these could affect those working at
this Boeing Factory in Seattle, Washington.

Source: http://commons.wikimedia.org/wiki/Image:Boeing_Factory_2002.jpg.

Chapter 10 Conflict and Negotiations

10.2 Understanding Conflict 468

Intergroup conflict4 is conflict that takes place among different groups. Types of
groups may include different departments or divisions in a company, and employee
union and management, or competing companies that supply the same customers.
Departments may conflict over budget allocations; unions and management may
disagree over work rules; suppliers may conflict with each other on the quality of
parts. Merging two groups together can lead to friction between the
groups—especially if there are scarce resources to be divided among the group. For
example, in what has been called “the most difficult and hard-fought labor issue in
an airline merger,” Canadian Air and Air Canada pilots were locked into years of
personal and legal conflict when the two airlines’ seniority lists were combined
following the merger.Stoykewych, R. E. (2003, March 7). A note on the seniority
resolutions arising out of the merger of Air Canada and Canadian Airlines. Paper
presented at the American Bar Association Midwinter Meeting, Laguna Beach, CA.
Seniority is a valuable and scarce resource for pilots, because it helps to determine
who flies the newest and biggest planes, who receives the best flight routes, and
who is paid the most. In response to the loss of seniority, former Canadian Air pilots
picketed at shareholder meetings, threatened to call in sick, and had ongoing
conflicts with pilots from Air Canada. The conflicts with pilots continue to this day.
The history of past conflicts among organizations and employees makes new deals
challenging.

Is Conflict Always Bad?

Most people are uncomfortable with conflict, but is conflict always bad? Conflict
can be dysfunctional if it paralyzes an organization, leads to less than optimal
performance, or, in the worst case, leads to workplace violence. Surprisingly, a
moderate amount of conflict can actually be a healthy (and necessary) part of
organizational life.Amason, A. C. (1996). Distinguishing the effects of functional and
dysfunctional conflict on strategic decision making: Resolving a paradox for top
management teams. Academy of Management Journal, 39, 123–148. To understand how
to get to a positive level of conflict, we need to understand its root causes,
consequences, and tools to help manage it. The impact of too much or too little
conflict can disrupt performance. If conflict is too low, then performance is low. If
conflict is too high, then performance also tends to be low. The goal is to hold
conflict levels in the middle of this range. While it might seem strange to want a
particular level of conflict, a medium level of task-related conflict is often viewed as
optimal, because it represents a situation in which a healthy debate of ideas takes
place.

4. Conflict that takes place among
different groups, such as
different departments or
divisions in a company, or
between union and
management, or between
companies, such as companies
who supply the same customer.

Chapter 10 Conflict and Negotiations

10.2 Understanding Conflict 469

Figure 10.4 The Inverted U Relationship Between Performance and Conflict

Task conflict can be good in certain circumstances, such as in the early stages of
decision making, because it stimulates creativity. However, it can interfere with
complex tasks in the long run.De Dreu, C. K. W., & Weingart, L. R. (2003). Task
versus relationship conflict: Team performance, and team member satisfaction: A
meta-analysis. Journal of Applied Psychology, 88, 741–749. Personal conflicts, such as
personal attacks, are never healthy because they cause stress and distress, which
undermines performance. The worst cases of personal conflicts can lead to
workplace bullying. At Intel Corporation, all new employees go through a 4-hour
training module to learn “constructive confrontation.” The content of the training
program includes dealing with others in a positive manner, using facts rather than
opinion to persuade others, and focusing on the problem at hand rather than the
people involved. “We don’t spend time being defensive or taking things personally.
We cut through all of that and get to the issues,” notes a trainer from Intel
University.Dahle, C. (2001, June). Is the Internet second nature? Fast Company, 48,
144. The success of the training remains unclear, but the presence of this program
indicates that Intel understands the potentially positive effect of a moderate level
of conflict. Research focusing on effective teams across time found that they were
characterized by low but increasing levels of process conflict (how do we get things
done?), low levels of relationship conflict with a rise toward the end of the project
(personal disagreements among team members), and moderate levels of task
conflict in the middle of the task time line.Jehn, K. A., & Mannix, E. A. (2001). The
dynamic nature of conflict: A longitudinal study of intergroup conflict and group
performance. Academy of Management Journal, 44, 238–251.

Chapter 10 Conflict and Negotiations

10.2 Understanding Conflict 470

K E Y T A K E A W A Y

Conflict can be a problem for individuals and organizations. There are
several different types of conflict, including intrapersonal, interpersonal,
and intergroup conflict. Moderate conflict can be a healthy and necessary
part of organizational life.

E X E R C I S E S

1. What are the types of conflicts that individuals may have at work?
Which type have you experienced the most?

2. What are some primary causes of conflict at work?
3. Explain how miscommunication might be related to a conflict at work.

Chapter 10 Conflict and Negotiations

10.2 Understanding Conflict 471

10.3 Causes and Outcomes of Conflict

L E A R N I N G O B J E C T I V E S

1. Understand different causes of conflict.
2. Understand jobs at risk for conflict.
3. Learn the outcomes of conflict.

There are many potential root causes of conflict at work. We’ll go over six of them
here. Remember, anything that leads to a disagreement can be a cause of conflict.
Although conflict is common to organizations, some organizations have more than
others.

Figure 10.5 Potential Causes of Conflict

Causes of Conflict
Organizational Structure

Conflict tends to take different forms, depending upon the organizational
structure.Jaffe, D. (2000). Organizational theory: Tension and change. New York:
McGraw Hill. For example, if a company uses a matrix structure as its
organizational form, it will have decisional conflict built in, because the structure
specifies that each manager report to two bosses. For example, global company ABB
Inc. is organized around a matrix structure based on the dimensions of country and
industry. This structure can lead to confusion as the company is divided
geographically into 1,200 different units and by industry into 50 different

Chapter 10 Conflict and Negotiations

472

units.Taylor, W. (1991, March–April). The logic of global business: An interview with
ABB’s Percy Barnevik. Harvard Business Review, 69, 90–105.

Limited Resources

Resources such as money, time, and equipment are often scarce. Competition
among people or departments for limited resources is a frequent cause for conflict.
For example, cutting-edge laptops and gadgets such as a BlackBerry or iPhone are
expensive resources that may be allocated to employees on a need-to-have basis in
some companies. When a group of employees have access to such resources while
others do not, conflict may arise among employees or between employees and
management. While technical employees may feel that these devices are crucial to
their productivity, employees with customer contact such as sales representatives
may make the point that these devices are important for them to make a good
impression to clients. Because important resources are often limited, this is one
source of conflict many companies have to live with.

Task Interdependence

Another cause of conflict is task interdependence; that is, when accomplishment of
your goal requires reliance on others to perform their tasks. For example, if you’re
tasked with creating advertising for your product, you’re dependent on the creative
team to design the words and layout, the photographer or videographer to create
the visuals, the media buyer to purchase the advertising space, and so on. The
completion of your goal (airing or publishing your ad) is dependent on others.

Incompatible Goals

Sometimes conflict arises when two parties think that their goals are mutually
exclusive. Within an organization, incompatible goals often arise because of the
different ways department managers are compensated. For example, a sales
manager’s bonus may be tied to how many sales are made for the company. As a
result, the individual might be tempted to offer customers “freebies” such as
expedited delivery in order to make the sale. In contrast, a transportation
manager’s compensation may be based on how much money the company saves on
transit. In this case, the goal might be to eliminate expedited delivery because it
adds expense. The two will butt heads until the company resolves the conflict by
changing the compensation scheme. For example, if the company assigns the bonus
based on profitability of a sale, not just the dollar amount, the cost of the expediting
would be subtracted from the value of the sale. It might still make sense to expedite
the order if the sale is large enough, in which case both parties would support it. On
the other hand, if the expediting negates the value of the sale, neither party would
be in favor of the added expense.

Chapter 10 Conflict and Negotiations

10.3 Causes and Outcomes of Conflict 473

Personality Differences

Personality differences among coworkers are common. By understanding some
fundamental differences among the way people think and act, we can better
understand how others see the world. Knowing that these differences are natural
and normal lets us anticipate and mitigate interpersonal conflict—it’s often not
about “you” but simply a different way of seeing and behaving. For example, Type A
individuals have been found to have more conflicts with their coworkers than Type
B individuals.Baron, R. A. (1989). Personality and organizational conflict: Type A
behavior pattern and self-monitoring. Organizational Behavior and Human Decision
Processes, 44, 281–297.

Communication Problems

Sometimes conflict arises simply out of a small, unintentional communication
problem, such as lost e-mails or dealing with people who don’t return phone calls.
Giving feedback is also a case in which the best intentions can quickly escalate into
a conflict situation. When communicating, be sure to focus on behavior and its
effects, not on the person. For example, say that Jeff always arrives late to all your
meetings. You think he has a bad attitude, but you don’t really know what Jeff’s
attitude is. You do know, however, the effect that Jeff’s behavior has on you. You
could say, “Jeff, when you come late to the meeting, I feel like my time is wasted.”
Jeff can’t argue with that statement, because it is a fact of the impact of his behavior
on you. It’s indisputable, because it is your reality. What Jeff can say is that he did
not intend such an effect, and then you can have a discussion regarding the
behavior.

In another example, the Hershey Company was engaged in talks behind closed
doors with Cadbury Schweppes about a possible merger. No information about this
deal was shared with Hershey’s major stakeholder, the Hershey Trust. When Robert
Vowler, CEO of the Hershey Trust, discovered that talks were underway without
anyone consulting the Trust, tensions between the major stakeholders began to
rise. As Hershey’s continued to underperform, steps were taken in what is now
called the “Sunday night massacre,” in which several board members were forced
to resign and Richard Lenny, Hershey’s then current CEO, retired.Jargon, J.,
Karnitschnig, M., & Lublin, J. S. (2008, February 23). How Hershey went sour. Wall
Street Journal, pp. B1, B5. This example shows how a lack of communication can lead
to an escalation of conflict. Time will tell what the lasting effects of this conflict will
be, but in the short term, effective communication will be the key. Now, let’s turn
our attention to the outcomes of conflict.

Chapter 10 Conflict and Negotiations

10.3 Causes and Outcomes of Conflict 474

Outcomes of Conflict

One of the most common outcomes of conflict is that it upsets parties in the short
run.Bergman, T. J., & Volkema, R. J. (1989). Understanding and managing
interpersonal conflict at work: Its issues, interactive processes and consequences. In
D. M. Kolb & J. M. Kolb (Eds.), Hidden conflict in organizations (pp. 7–19). Newbury
Park, CA: Sage. However, conflict can have both positive and negative outcomes. On
the positive side, conflict can result in greater creativity or better decisions. For
example, as a result of a disagreement over a policy, a manager may learn from an
employee that newer technologies help solve problems in an unanticipated new
way.

Positive outcomes include the following:

• Consideration of a broader range of ideas, resulting in a better,
stronger idea

• Surfacing of assumptions that may be inaccurate
• Increased participation and creativity
• Clarification of individual views that build learning

On the other hand, conflict can be dysfunctional if it is excessive or involves
personal attacks or underhanded tactics.

Examples of negative outcomes include the following:

• Increased stress and anxiety among individuals, which decreases
productivity and satisfaction

• Feelings of being defeated and demeaned, which lowers individuals’
morale and may increase turnover

• A climate of mistrust, which hinders the teamwork and cooperation
necessary to get work done

Chapter 10 Conflict and Negotiations

10.3 Causes and Outcomes of Conflict 475

Is Your Job at Risk for Workplace Violence?

You may be at increased risk for workplace violence if your job involves the
following:

• Dealing With People

◦ Caring for others either emotionally or physically, such as at a
nursing home.

◦ Interacting with frustrated customers, such as with retail sales.
◦ Supervising others, such as being a manager.
◦ Denying requests others make of you, such as with customer

service.

• Being in High-Risk Situations

◦ Dealing with valuables or exchanging money, such as in banking.
◦ Handling weapons, such as in law enforcement.
◦ Working with drugs, alcohol, or those under the influence of them,

such as bartending.
◦ Working nights or weekends, such as gas station attendants.

Sources: Adapted from information in LeBlanc, M. M., & Kelloway, E. K. (2002).
Predictors and outcomes of workplace violence and aggression. Journal of
Applied Psychology, 87, 444–453; National Institute for Occupational Safety and
Health. (1997). Violence in the workplace. Retrieved November 12, 2008, from
http://www.cdc.gov/niosh/violfs.html; National Institute for Occupational
Safety and Health. (2006). Workplace prevention strategies and research needs.
Retrieved November 12, 2008, from http://www.cdc.gov/niosh/docs/2006-144/.

Given these negative outcomes, how can conflict be managed so that it does not
become dysfunctional or even dangerous? We’ll explore this in the next section.

Chapter 10 Conflict and Negotiations

10.3 Causes and Outcomes of Conflict 476

K E Y T A K E A W A Y

Conflict has many causes, including organizational structures, limitations on
resources, task interdependence, goal incompatibility, personality
differences, and communication challenges. Outcomes of well-managed
conflict include increased participation and creativity, while negatives of
poorly managed conflict include increased stress and anxiety. Jobs that deal
with people are at higher risk for conflict.

E X E R C I S E S

1. What are some primary causes of conflict at work?
2. What are the outcomes of workplace conflict? Which types of job are the

most at risk for workplace violence? Why do you think that is?
3. What outcomes have you observed from conflict?

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L E A R N I N G O B J E C T I V E S

1. Understand different ways to manage conflict.
2. Understand your own communication style.
3. Learn to stimulate conflict if needed.

There are a number of different ways of managing organizational conflict, which
are highlighted in this section. Conflict management5 refers to resolving
disagreements effectively.

Ways to Manage Conflict
Change the Structure

When structure is a cause of dysfunctional conflict, structural change can be the
solution to resolving the conflict. Consider this situation. Vanessa, the lead
engineer in charge of new product development, has submitted her components list
to Tom, the procurement officer, for purchasing. Tom, as usual, has rejected two of
the key components, refusing the expenditure on the purchase. Vanessa is furious,
saying, “Every time I give you a request to buy a new part, you fight me on it. Why
can’t you ever trust my judgment and honor my request?”

Tom counters, “You’re always choosing the newest, leading-edge parts—they’re
hard to find and expensive to purchase. I’m supposed to keep costs down, and your
requests always break my budget.”

“But when you don’t order the parts we need for a new product, you delay the
whole project,” Vanessa says.

Sharon, the business unit’s vice president, hits upon a structural solution by stating,
“From now on, both of you will be evaluated on the total cost and the overall
performance of the product. You need to work together to keep component costs
low while minimizing quality issues later on.” If the conflict is at an intergroup
level, such as between two departments, a structural solution could be to have
those two departments report to the same executive, who could align their
previously incompatible goals.

5. Resolving disagreements
effectively.

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Change the Composition of the Team

If the conflict is between team members, the easiest solution may be to change the
composition of the team, separating the personalities that were at odds. In
instances in which conflict is attributed to the widely different styles, values, and
preferences of a small number of members, replacing some of these members may
resolve the problem. If that’s not possible because everyone’s skills are needed on
the team and substitutes aren’t available, consider a physical layout solution.
Research has shown that when known antagonists are seated directly across from
each other, the amount of conflict increases. However, when they are seated side by
side, the conflict tends to decrease.Gordon, J., Mondy, R. W., Sharplin, A., &
Premeaux, S. R. (1990). Management and organizational behavior. New York: Simon &
Schuster, p. 540.

Create a Common Opposing Force

Group conflict within an organization can be mitigated by focusing attention on a
common enemy such as the competition. For example, two software groups may be
vying against each other for marketing dollars, each wanting to maximize
advertising money devoted to their product. But, by focusing attention on a
competitor company, the groups may decide to work together to enhance the
marketing effectiveness for the company as a whole. The “enemy” need not be
another company—it could be a concept, such as a recession, that unites previously
warring departments to save jobs during a downturn.

Consider Majority Rule

Sometimes a group conflict can be resolved through majority rule. That is, group
members take a vote, and the idea with the most votes is the one that gets
implemented. The majority rule approach can work if the participants feel that the
procedure is fair. It is important to keep in mind that this strategy will become
ineffective if used repeatedly with the same members typically winning. Moreover,
the approach should be used sparingly. It should follow a healthy discussion of the
issues and points of contention, not be a substitute for that discussion.

Problem Solve

Problem solving is a common approach to resolving conflict. In problem-solving
mode, the individuals or groups in conflict are asked to focus on the problem, not
on each other, and to uncover the root cause of the problem. This approach
recognizes the rarity of one side being completely right and the other being
completely wrong.

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Conflict-Handling Styles

Individuals vary in the way that they handle conflicts. There are five common styles
of handling conflicts. These styles can be mapped onto a grid that shows the
varying degree of cooperation and assertiveness each style entails. Let us look at
each in turn.

Figure 10.6 Conflict-Handling Styles

Avoidance

The avoiding6 style is uncooperative and unassertive. People exhibiting this style
seek to avoid conflict altogether by denying that it is there. They are prone to
postponing any decisions in which a conflict may arise. People using this style may
say things such as, “I don’t really care if we work this out,” or “I don’t think there’s
any problem. I feel fine about how things are.” Conflict avoidance may be habitual
to some people because of personality traits such as the need for affiliation. While
conflict avoidance may not be a significant problem if the issue at hand is trivial, it
becomes a problem when individuals avoid confronting important issues because of
a dislike for conflict or a perceived inability to handle the other party’s reactions.

Accommodation

The accommodating7 style is cooperative and unassertive. In this style, the person
gives in to what the other side wants, even if it means giving up one’s personal
goals. People who use this style may fear speaking up for themselves or they may
place a higher value on the relationship, believing that disagreeing with an idea

6. An uncooperative and
unassertive conflict-handling
style.

7. A cooperative and unassertive
conflict-handling style.

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Figure 10.7

Body language can fuel a conflict.

might be hurtful to the other person. They will say things such as, “Let’s do it your
way” or “If it’s important to you, I can go along with it.” Accommodation may be an
effective strategy if the issue at hand is more important to others compared to
oneself. However, if a person perpetually uses this style, that individual may start to
see that personal interests and well-being are neglected.

Compromise

The compromising8 style is a middle-ground style, in which individuals have some
desire to express their own concerns and get their way but still respect the other
person’s goals. The compromiser may say things such as, “Perhaps I ought to
reconsider my initial position” or “Maybe we can both agree to give in a little.” In a
compromise, each person sacrifices something valuable to them. For example, in
2005 the luxurious Lanesborough Hotel in London advertised incorrect nightly rates
for £35, as opposed to £350. When the hotel received a large number of online
bookings at this rate, the initial reaction was to insist that customers cancel their
reservations and book at the correct rate. The situation was about to lead to a
public relations crisis. As a result, they agreed to book the rooms at the advertised
price for a maximum of three nights, thereby limiting the damage to the hotel’s
bottom line as well as its reputation.Horowitz, A., Jacobson, D., Lasswell, M., &
Thomas, O. (2006, January–February). 101 dumbest moments in business. Business
2.0, 7(1), 98–136.

Competition

People exhibiting a competing9 style want to reach
their goal or get their solution adopted regardless of
what others say or how they feel. They are more
interested in getting the outcome they want as opposed
to keeping the other party happy, and they push for the
deal they are interested in making. Competition may
lead to poor relationships with others if one is always
seeking to maximize their own outcomes at the expense
of others’ well-being. This approach may be effective if
one has strong moral objections to the alternatives or if
the alternatives one is opposing are unethical or
harmful.

8. A middle-ground conflict-
handling style, in which a
person has some desire to
express their own concerns
and get their way but still
respects the other person’s
goals as well.

9. A conflict-handling style that is
highly assertive but low on
cooperation.

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© 2010 Jupiterimages
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Collaboration

The collaborating10 style is high on both assertiveness
and cooperation. This is a strategy to use for achieving
the best outcome from conflict—both sides argue for
their position, supporting it with facts and rationale
while listening attentively to the other side. The
objective is to find a win–win solution to the problem in which both parties get
what they want. They’ll challenge points but not each other. They’ll emphasize
problem solving and integration of each other’s goals. For example, an employee
who wants to complete an MBA program may have a conflict with management
when he wants to reduce his work hours. Instead of taking opposing positions in
which the employee defends his need to pursue his career goals while the manager
emphasizes the company’s need for the employee, both parties may review
alternatives to find an integrative solution. In the end, the employee may decide to
pursue the degree while taking online classes, and the company may realize that
paying for the employee’s tuition is a worthwhile investment. This may be a
win–win solution to the problem in which no one gives up what is personally
important, and every party gains something from the exchange.

Which Style Is Best?

Like much of organizational behavior, there is no one “right way” to deal with
conflict. Much of the time it will depend on the situation. However, the
collaborative style has the potential to be highly effective in many different
situations.

We do know that most individuals have a dominant style that they tend to use most
frequently. Think of your friend who is always looking for a fight or your coworker
who always backs down from a disagreement. Successful individuals are able to
match their style to the situation. There are times when avoiding a conflict can be a
great choice. For example, if a driver cuts you off in traffic, ignoring it and going on
with your day is a good alternative to “road rage.” However, if a colleague keeps
claiming ownership of your ideas, it may be time for a confrontation. Allowing such
intellectual plagiarism to continue could easily be more destructive to your career
than confronting the individual. Research also shows that when it comes to dealing
with conflict, managers prefer forcing, while their subordinates are more likely to
engage in avoiding, accommodating, or compromising.Howat, G., & London, M.
(1980). Attributions of conflict management strategies in supervisor-subordinate
dyads. Journal of Applied Psychology, 65, 172–175. It is also likely that individuals will
respond similarly to the person engaging in conflict. For example, if one person is
forcing, others are likely to respond with a forcing tactic as well.10. A conflict-handling style that is

high on both assertiveness and
cooperation.

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What If You Don’t Have Enough Conflict Over Ideas?

Part of effective conflict management is knowing when proper stimulation is
necessary. Many people think that conflict is inherently bad—that it undermines
goals or shows that a group or meeting is not running smoothly. In fact, if there is
no conflict, it may mean that people are silencing themselves and withholding their
opinions. The reality is that within meaningful group discussions there are usually
varying opinions about the best course of action. If people are suppressing their
opinions, the final result may not be the best solution. During healthy debates,
people point out difficulties or weaknesses in a proposed alternative and can work
together to solve them. The key to keeping the disagreement healthy is to keep the
discussion focused on the task, not the personalities. For example, a comment such
as “Jack’s ideas have never worked before. I doubt his current idea will be any
better” is not constructive. Instead, a comment such as “This production step uses a
degreaser that’s considered a hazardous material. Can we think of an alternative
degreaser that’s nontoxic?” is more productive. It challenges the group to improve
upon the existing idea.

Traditionally, Hewlett-Packard Development Company LP was known as a “nice”
organization. Throughout its history, HP viewed itself as a scientific organization,
and their culture valued teamwork and respect. But over time, HP learned that you
can be “nice to death.” In fact, in the 1990s, HP found it difficult to partner with
other organizations because of their culture differences. During role plays created
to help HP managers be more dynamic, the trainers had to modify several role-
plays, because participants simply said, “That would never happen at HP,” over the
smallest conflict. All this probably played a role in the discomfort many felt with
Carly Fiorina’s style as CEO and the merge she orchestrated with Compaq Computer
Corporation, which ultimately caused the board of directors to fire Fiorina. On the
other hand, no one is calling HP “too nice” anymore.

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OB Toolbox: How Can You Stimulate Conflict?

• Encourage people to raise issues and disagree with you or the status quo
without fear of reprisal. An issue festering beneath the surface, when
brought out into the open, may turn out to be a minor issue that
can be easily addressed and resolved.

• Assign a devil’s advocate to stimulate alternative viewpoints. If a
business unit is getting stagnant, bring in new people to “shake
things up.”

• Create a competition among teams, offering a bonus to the team that
comes up with the best solution to a problem. For example, have two
product development teams compete on designing a new product.
Or, reward the team that has the fewest customer complaints or
achieves the highest customer satisfaction rating.

• Build some ambiguity into the process. When individuals are free to
come up with their own ideas about how to complete a task, the
outcome may be surprising, and it allows for more healthy
disagreements along the way.

K E Y T A K E A W A Y

Conflict management techniques include changing organizational structures
to avoid built-in conflict, changing team members, creating a common
“enemy,” using majority rules, and problem solving. Conflict management
styles include accommodating others, avoiding the conflict, collaborating,
competing, and compromising. People tend to have a dominant style. At
times it makes sense to build in some conflict over ideas if none exists.

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E X E R C I S E S

1. List three ways to decrease a conflict situation. What are some pros and
cons of each of these approaches?

2. Do you deal with conflict differently with friends and family than you do
at work? If so, why do you think that is?

3. What is your usual conflict-handling style at work? Do you see it as
effective or ineffective?

4. Describe a situation in which not having enough conflict can be a
problem.

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Figure 10.8 The Five Phases
of Negotiation

10.5 Negotiations

L E A R N I N G O B J E C T I V E S

1. Learn the five phases of negotiation.
2. Learn negotiation strategies.
3. Avoid common mistakes in negotiations.
4. Learn about third-party negotiations.

A common way that parties deal with conflict is via negotiation. Negotiation11 is a
process whereby two or more parties work toward an agreement. There are five
phases of negotiation, which are described below.

The Five Phases of Negotiation
Phase 1: Investigation

The first step in negotiation is the investigation12, or
information gathering stage. This is a key stage that is
often ignored. Surprisingly, the first place to begin is
with yourself: What are your goals for the negotiation?
What do you want to achieve? What would you concede?
What would you absolutely not concede? Leigh
Steinberg, the most powerful agent in sports (he was the
role model for Tom Cruise’s character in Jerry Maguire),
puts it this way: “You need the clearest possible view of
your goals. And you need to be brutally honest with
yourself about your priorities.”Webber, A. (1998,
October). How to get them to show you the money. Fast
Company, 198. Retrieved November 14, 2008, from
http://www.fastcompany.com/magazine/19/
showmoney.html.

During the negotiation, you’ll inevitably be faced with
making choices. It’s best to know what you want, so that
in the heat of the moment you’re able to make the best
decision. For example, if you’ll be negotiating for a new
job, ask yourself, “What do I value most? Is it the salary level? Working with
coworkers whom I like? Working at a prestigious company? Working in a certain

11. A process whereby two or more
parties work toward an
agreement.

12. The first step in negotiation in
which information is gathered.

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geographic area? Do I want a company that will groom me for future positions or do
I want to change jobs often in pursuit of new challenges?”

Phase 2: Determine Your BATNA

If you don’t know where you’re going, you will probably end up somewhere else.

– Lawrence J. Peter

One important part of the investigation and planning phase is to determine your
BATNA13, which is an acronym that stands for the “best alternative to a negotiated
agreement.” Roger Fisher and William Ury coined this phrase in their book Getting
to Yes: Negotiating without Giving In.

Thinking through your BATNA is important to helping you decide whether to
accept an offer you receive during the negotiation. You need to know what your
alternatives are. If you have various alternatives, you can look at the proposed deal
more critically. Could you get a better outcome than the proposed deal? Your
BATNA will help you reject an unfavorable deal. On the other hand, if the deal is
better than another outcome you could get (that is, better than your BATNA), then
you should accept it.

Think about it in common sense terms: When you know your opponent is desperate
for a deal, you can demand much more. If it looks like they have a lot of other
options outside the negotiation, you’ll be more likely to make concessions.

As Fisher and Ury said, “The reason you negotiate is to produce something better
than the results you can obtain without negotiating. What are those results? What
is that alternative? What is your BATNA—your Best Alternative To a Negotiated
Agreement? That is the standard against which any proposed agreement should be
measured.”Fisher, R., & Ury, W. (1981). Getting to yes: Negotiating agreement without
giving in. New York: Penguin Books.

The party with the best BATNA has the best negotiating position, so try to improve
your BATNA whenever possible by exploring possible alternatives.Pinkley, R. L.
(1995). Impact of knowledge regarding alternatives to settlement in dyadic
negotiations: Whose knowledge counts? Journal of Applied Psychology, 80, 403–417.

Going back to the example of your new job negotiation, consider your options to the
offer you receive. If your pay is lower than what you want, what alternatives do you

13. Stands for the “best alternative
to a negotiated agreement.”
Determining your BATNA is
one important part of the
investigation and planning
phase in negotiation.

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have? A job with another company? Looking for another job? Going back to school?
While you’re thinking about your BATNA, take some time to think about the other
party’s BATNA. Do they have an employee who could readily replace you?

Once you’ve gotten a clear understanding of your own goals, investigate the person
you’ll be negotiating with. What does that person (or company) want? Put yourself
in the other party’s shoes. What alternatives could they have? For example, in the
job negotiations, the other side wants a good employee at a fair price. That may lead
you to do research on salary levels: What is the pay rate for the position you’re
seeking? What is the culture of the company?

Greenpeace’s goals are to safeguard the environment by getting large companies
and organizations to adopt more environmentally friendly practices such as using
fewer plastic components. Part of the background research Greenpeace engages in
involves uncovering facts. For instance, medical device makers are using harmful
PVCs as a tubing material because PVCs are inexpensive. But are there alternatives
to PVCs that are also cost-effective? Greenpeace’s research found that yes, there
are.Layne, A. (1999, November). Conflict resolution at Greenpeace? Fast Company.
Retrieved November 14, 2008, from http://www.fastcompany.com/articles/1999/
12/rick_hind.html. Knowing this lets Greenpeace counter those arguments and puts
Greenpeace in a stronger position to achieve its goals.

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Figure 10.9

All phases of the negotiation
process are important. The
presentation is the one that
normally receives the most

OB Toolbox: BATNA Best Practices

1. Brainstorm a list of alternatives that you might conceivably take if
the negotiation doesn’t lead to a favorable outcome for you.

2. Improve on some of the more promising ideas and convert them
into actionable alternatives.

3. Identify the most beneficial alternative to be kept in reserve as a
fall-back during the negotiation.

4. Remember that your BATNA may evolve over time, so keep
revising it to make sure it is still accurate.

5. Don’t reveal your BATNA to the other party. If your BATNA turns
out to be worse than what the other party expected, their offer
may go down, as PointCast learned in the opening case.

Sources: Adapted from information in Spangler, B. (2003, June). Best Alternative
to a Negotiated Agreement (BATNA). Retrieved November 12, 2008, from
http://www.beyondintractability.org/essay/batna/; Conflict Research
Consortium, University of Colorado. (1998). Limits to agreement: Better
alternatives. Retrieved November 12, 2008, from http://www.colorado.edu/
conflict/peace/problem/batna.htm; Venter, D. (2003). What is a BATNA?
Retrieved January 14, 2008, from http://www.negotiationeurope.com/articles/
batna.html.

Phase 3: Presentation

The third phase of negotiation is presentation14. In this
phase, you assemble the information you’ve gathered in
a way that supports your position. In a job hiring or
salary negotiation situation, for instance, you can
present facts that show what you’ve contributed to the
organization in the past (or in a previous position),
which in turn demonstrates your value. Perhaps you
created a blog that brought attention to your company
or got donations or funding for a charity. Perhaps
you’re a team player who brings out the best in a group.

14. The third phase of negotiation.

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attention, but the work done
before that point is equally
important.

© 2010 Jupiterimages
Corporation

Phase 4: Bargaining

During the bargaining15 phase, each party discusses
their goals and seeks to get an agreement. A natural
part of this process is making concessions16, namely,
giving up one thing to get something else in return.
Making a concession is not a sign of weakness—parties
expect to give up some of their goals. Rather,
concessions demonstrate cooperativeness and help
move the negotiation toward its conclusion. Making
concessions is particularly important in tense union-management disputes, which
can get bogged down by old issues. Making a concession shows forward movement
and process, and it allays concerns about rigidity or closed-mindedness. What
would a typical concession be? Concessions are often in the areas of money, time,
resources, responsibilities, or autonomy. When negotiating for the purchase of
products, for example, you might agree to pay a higher price in exchange for
getting the products sooner. Alternatively, you could ask to pay a lower price in
exchange for giving the manufacturer more time or flexibility in when they deliver
the product.

One key to the bargaining phase is to ask questions. Don’t simply take a statement
such as “we can’t do that” at face value. Rather, try to find out why the party has
that constraint. Let’s take a look at an example. Say that you’re a retailer and you
want to buy patio furniture from a manufacturer. You want to have the sets in time
for spring sales. During the negotiations, your goal is to get the lowest price with
the earliest delivery date. The manufacturer, of course, wants to get the highest
price with the longest lead time before delivery. As negotiations stall, you evaluate
your options to decide what’s more important: a slightly lower price or a slightly
longer delivery date? You do a quick calculation. The manufacturer has offered to
deliver the products by April 30, but you know that some of your customers make
their patio furniture selection early in the spring, and missing those early sales
could cost you $1 million. So, you suggest that you can accept the April 30 delivery
date if the manufacturer will agree to drop the price by $1 million.

“I appreciate the offer,” the manufacturer replies, “but I can’t accommodate such a
large price cut.” Instead of leaving it at that, you ask, “I’m surprised that a 2-month
delivery would be so costly to you. Tell me more about your manufacturing process
so that I can understand why you can’t manufacture the products in that time
frame.”

“Manufacturing the products in that time frame is not the problem,” the
manufacturer replies, “but getting them shipped from Asia is what’s expensive for
us.”

15. The fourth phase of
negotiation.

16. Giving up one thing to get
something else in return.

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When you hear that, a light bulb goes off. You know that your firm has favorable
contracts with shipping companies because of the high volume of business the firm
gives them. You make the following counteroffer: “Why don’t we agree that my
company will arrange and pay for the shipper, and you agree to have the products
ready to ship on March 30 for $10.5 million instead of $11 million?” The
manufacturer accepts the offer—the biggest expense and constraint (the shipping)
has been lifted. You, in turn, have saved money as well.Adapted from Malhotra, D.,
& Bazerman, M. H. (2007, September). Investigative negotiation. Harvard Business
Review, 85, 72.

Phase 5: Closure

Closure17 is an important part of negotiations. At the close of a negotiation, you and
the other party have either come to an agreement on the terms, or one party has
decided that the final offer is unacceptable and therefore must be walked away
from. Most negotiators assume that if their best offer has been rejected, there’s
nothing left to do. You made your best offer and that’s the best you can do. The
savviest of negotiators, however, see the rejection as an opportunity to learn.
“What would it have taken for us to reach an agreement?”

Recently, a CEO had been in negotiations with a customer. After learning the
customer decided to go with the competition, the CEO decided to inquire as to why
negotiations had fallen through. With nothing left to lose, the CEO placed a call to
the prospect’s vice president and asked why the offer had been rejected, explaining
that the answer would help improve future offerings. Surprisingly, the VP
explained the deal was given to the competitor because, despite charging more, the
competitor offered after-sales service on the product. The CEO was taken by
surprise, originally assuming that the VP was most interested in obtaining the
lowest price possible. In order accommodate a very low price, various extras such as
after-sales service had been cut from the offer. Having learned that the VP was
seeking service, not the lowest cost, the CEO said, “Knowing what I know now, I’m
confident that I could have beaten the competitor’s bid. Would you accept a revised
offer?” The VP agreed, and a week later the CEO had a signed contract.Malhotra, D.,
& Bazerman, M. H. (2007, September). Investigative negotiation. Harvard Business
Review, 85, 72.

Sometimes at the end of negotiations, it’s clear why a deal was not reached. But if
you’re confused about why a deal did not happen, consider making a follow-up call.
Even though you may not win the deal back in the end, you might learn something
that’s useful for future negotiations. What’s more, the other party may be more
willing to disclose the information if they don’t think you’re in a “selling” mode.

17. The last part of negotiation in
which you and the other party
have either come to an
agreement on the terms, or one
party has decided that the final
offer is unacceptable and
therefore must be walked away
from.

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Should You Negotiate for a Higher Salary?

Yes! According to a survey conducted by CareerBuilder.com, 58% of hiring
managers say they leave some negotiating room when extending initial job
offers. The survey also found that many of the hiring managers agree to a
candidate’s request for a higher salary. “Salary negotiation has become a
growing opportunity in the job acquisition process,” says Bill Hawkins,
president and CEO of The Hawkins Company, a full-service executive search
firm with offices in Los Angeles and Atlanta. “Candidates who fail to make a
counteroffer could forfeit significant income.”

Source: Adapted from information in Reed-Woodard, M. (2007, April). Taking
money off the table. Black Enterprise, 37(9), 60–61.

Negotiation Strategies
Distributive Approach

The distributive view18 of negotiation is the traditional fixed-pie approach. That is,
negotiators see the situation as a pie that they have to divide between them. Each
tries to get more of the pie and “win.” For example, managers may compete over
shares of a budget. If marketing gets a 10% increase in its budget, another
department such as R&D will need to decrease its budget by 10% to offset the
marketing increase. Focusing on a fixed pie is a common mistake in negotiation,
because this view limits the creative solutions possible.

Integrative Approach

A newer, more creative approach to negotiation is called the integrative
approach19. In this approach, both parties look for ways to integrate their goals
under a larger umbrella. That is, they look for ways to expand the pie, so that each
party gets more. This is also called a win–win approach. The first step of the
integrative approach is to enter the negotiation from a cooperative rather than an
adversarial stance. The second step is all about listening. Listening develops trust as
each party learns what the other wants and everyone involved arrives at a mutual
understanding. Then, all parties can explore ways to achieve the individual goals.
The general idea is, “If we put our heads together, we can find a solution that
addresses everybody’s needs.” Unfortunately, integrative outcomes are not the
norm. A summary of 32 experiments on negotiations found that although they
could have resulted in integrated outcomes, only 20% did so.Thompson, L., &

18. The traditional fixed-pie
approach in which negotiators
see the situation as a pie that
they have to divide between
them.

19. An approach to negotiation in
which both parties look for
ways to integrate their goals
under a larger umbrella.

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Hrebec, D. (1996). Lose-lose agreements in interdependent decision making.
Psychological Bulletin, 120, 396–409. One key factor related to finding integrated
solutions is the experience of the negotiators who were able to reach
them.Thompson, L. (1990). Negotiation behavior and outcomes: Empirical evidence
and theoretical issues. Psychological Bulletin, 108, 515–532.

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OB Toolbox: Seven Steps to Negotiating a Higher Salary

• Step 1: Overcome your fear.

◦ The first step is to overcome your fears. Many people don’t
even begin a salary negotiation. We may be afraid of angering
the boss or think that because we are doing a good job, we’ll
automatically be rewarded. But, just because you’re doing a
good job doesn’t mean you’ll automatically get a raise. Why? If
you don’t ask for one, the boss may believe you’re satisfied
with what you’re getting. So why should he pay you more?
Imagine going into a car dealership and being absolutely
delighted with a car choice. The sticker price is $19,000. Would
you pay the dealer $23,000 just because you really like the car?
Of course not. You probably wouldn’t even offer $19,000. If the
car was up for auction, however, and another bidder offered
$20,000, you’d likely increase your offer, too.

◦ That’s what salary negotiation is like. Your boss may be
thrilled with you but at the same time is running a business.
There’s no reason to pay an employee more if you seem
satisfied with your current salary.

• Step 2: Get the facts.

◦ Before you enter into the negotiation, do some background
research. What are other companies paying people in your
position? Check sites such as Payscale.com, salary.com, and
salaryexpert.com to get a feel for the market. Look at surveys
conducted by your professional organization.

• Step 3: Build your case.

◦ How important are you to the organization? How have you
contributed? Perhaps you contributed by increasing sales,
winning over angry customers, getting feuding team members
to cooperate, and so on. Make a list of your contributions. Be
sure to focus on the contributions that your boss values most.
Is it getting recognition for the department? Easing workload?
If another employer has shown interest in you, mention that
as a fact. However, don’t use this as a threat unless you’re
prepared to take the other offer. Mentioning interest from
another employer gets the boss to think, “If I don’t give this

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raise, I may lose the employee.” (By the way, if you don’t feel
you have a strong case for your raise, perhaps this isn’t the
time to ask for one.)

• Step 4: Know what you want.

◦ Set your target salary goal based on your research and the
norms of what your organization will pay. Now ask yourself, if
you don’t get this figure, would you quit? If not, are there
other alternatives besides a salary increase that you’d
consider? For example, would you accept a higher title? More
vacation time? Paid training to learn a new skill? Flexible
hours?

• Step 5: Begin assertively.

◦ Start the discussion on a strong but friendly tone. “I think I’m
worth more than I’m being paid.” List the ways you’ve
contributed to the company.

• Step 6: Don’t make the first offer.

◦ Let your boss name the figure. You can do this by asking, “How
much of a raise could you approve?” However, if the boss
insists that you name a figure, ask for the most that you can
reasonably expect to get. You want to be reasonable, but you
need to allow room to make a concession. Your boss will
assume your opening number was high and will offer you less,
so asking for the actual figure you want may leave you feeling
disappointed.

◦ If the boss opens with, “The salary range for this position is
$66,000 to 78,000,” ask for the high end. If your goal was
higher than that range, challenge the range by explaining how
you are an exception and why you deserve more.

• Step 7: Listen more than talk.

◦ You’ll learn more by listening rather than talking. The more
you listen, the better the boss will feel about you—people tend
to like and trust people who listen to them.

◦ If you can’t get a raise now, get your boss to agree to one in a
few months if you meet agreed-upon objectives.

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Sources: Adapted from information in Brodow, E. (2006). Negotiation boot camp.
New York: Currency/Doubleday; Nemko, M. (2007, December 31). The general
way to get a raise. U.S. News & World Report, 57.

Avoiding Common Mistakes in Negotiations
Failing to Negotiate/Accepting the First Offer

You may have heard that women typically make less money than men. Researchers
have established that about one-third of the gender differences observed in the
salaries of men and women can be traced back to differences in starting salaries,
with women making less, on average, when they start their jobs.Gerhart, B. (1990).
Gender differences in current and starting salaries: The role of performance, college
major, and job title. Industrial and Labor Relations Review, 43, 418–433. Some people
are taught to feel that negotiation is a conflict situation, and these individuals may
tend to avoid negotiations to avoid conflict. Research shows that this negotiation
avoidance is especially prevalent among women. For example, one study looked at
students from Carnegie-Mellon who were getting their first job after earning a
master’s degree. The study found that only 7% of the women negotiated their offer,
while men negotiated 57% of the time.CNN. (2003, August 21). Interview with Linda
Babcock. Retrieved November 14, 2008, from http://transcripts.cnn.com/
TRANSCRIPTS/0308/21/se.04.html. The result had profound consequences.
Researchers calculate that people who routinely negotiate salary increases will earn
over $1 million more by retirement than people who accept an initial offer every
time without asking for more.Babcock, L., & Lascheve, S. (2003). Women don’t ask:
Negotiation and the gender divide. Princeton, NJ: Princeton University Press. The good
news is that it appears that it is possible to increase negotiation efforts and
confidence by training people to use effective negotiation skills.Stevens, C. K.,
Bavetta, A. G., & Gist, M. E. (1993). Gender differences in the acquisition of salary
negotiation skills: The role of goals, self-efficacy, and perceived control. Journal of
Applied Psychology, 78, 723–735.

Letting Your Ego Get in the Way

Thinking only about yourself is a common mistake, as we saw in the opening case.
People from the United States tend to fall into a self-serving bias in which they
overinflate their own worth and discount the worth of others. This can be a
disadvantage during negotiations. Instead, think about why the other person would
want to accept the deal. People aren’t likely to accept a deal that doesn’t offer any
benefit to them. Help them meet their own goals while you achieve yours.
Integrative outcomes depend on having good listening skills, and if you are thinking

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only about your own needs, you may miss out on important opportunities.
Remember that a good business relationship can only be created and maintained if
both parties get a fair deal.

Having Unrealistic Expectations

Susan Podziba, a professor of mediation at Harvard and MIT, plays broker for some
of the toughest negotiations around, from public policy to marital disputes. She
takes an integrative approach in the negotiations, identifying goals that are large
enough to encompass both sides. As she puts it, “We are never going to be able to sit
at a table with the goal of creating peace and harmony between fishermen and
conservationists. But we can establish goals big enough to include the key interests
of each party and resolve the specific impasse we are currently facing. Setting
reasonable goals at the outset that address each party’s concerns will decrease the
tension in the room, and will improve the chances of reaching an
agreement.”Rothenberger, C. (2008, September 11). Negotiation 201: Refine your
skills. Fast Company. Retrieved January 11, 2008, from
http://www.fastcompany.com/articles/team/prob_podziba.html. Those who set
unreasonable expectations are more likely to fail.

Getting Overly Emotional

Negotiations, by their very nature, are emotional. The findings regarding the
outcomes of expressing anger during negotiations are mixed. Some researchers
have found that those who express anger negotiate worse deals than those who do
not,Kopelman, S., Rosette, A. S., & Thompson, L. (2006). The three faces of Eve: An
examination of the strategic display of positive, negative, and neutral emotions in
negotiations. Organizational behavior and human decision processes, 99, 81–101. and that
during online negotiations, those parties who encountered anger were more likely
to compete than those who did not.Friedman, R., Anderson, C., Brett, J., Olekalns,
M., Goates, N., & Lisco, C. C. (2004). The positive and negative effects of anger on
dispute resolution: Evidence from electronically mediated disputes. Journal of
Applied Psychology, 89, 369–376. In a study of online negotiations, words such as
despise, disgusted, furious, and hate were related to a reduced chance of reaching an
agreement.Brett, J. M., Olekalns, M., Friedman, R., Goates, N., Anderson, C., & Lisco,
C. C. (2007). Sticks and stones: Language, face, and online dispute resolution.
Academy of Management Journal, 50, 85–99. However, this finding may depend on
individual personalities. Research has also shown that those with more power may
be more effective when displaying anger. The weaker party may perceive the anger
as potentially signaling that the deal is falling apart and may concede items to help
move things along.Van Kleef, G. A., & Cote, S. (2007). Expressing anger in conflict:
When it helps and when it hurts. Journal of Applied Psychology, 92, 1557–1569. This
holds for online negotiations as well. In a study of 355 eBay disputes in which

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mediation was requested by one or both of the parties, similar results were found.
Overall, anger hurts the mediation process unless one of the parties was perceived
as much more powerful than the other party, in which case anger hastened a
deal.Friedman, R., Anderson, C., Brett, J., Olekalns, M., Goates, N., & Lisco, C. C.
(2004). The positive and negative effects of anger on dispute resolution: Evidence
from electronically mediated disputes. Journal of Applied Psychology, 89, 369–376.
Another aspect of getting overly emotional is forgetting that facial expressions are
universal across cultures, and when your words and facial expressions don’t match,
you are less likely to be trusted.Hill, D. (2007). Emotionomics: Winning hearts and
minds. Edina, MN: Adams Business & Professional; Holloway, L. (2007, December).
Mixed signals: Are you saying one thing, while your face says otherwise?
Entrepreneur, 35, 49.

Letting Past Negative Outcomes Affect the Present Ones

Research shows that negotiators who had previously experienced ineffective
negotiations were more likely to have failed negotiations in the future. Those who
were unable to negotiate some type of deal in previous negotiation situations
tended to have lower outcomes than those who had successfully negotiated deals in
the past.O’Connor, K. M., Arnold, J. A., & Burris, E. R. (2005). Negotiators’ bargaining
histories and their effects on future negotiation performance. Journal of Applied
Psychology, 90, 350–362. The key to remember is that there is a tendency to let the
past repeat itself. Being aware of this tendency allows you to overcome it. Be
vigilant to examine the issues at hand and not to be overly swayed by past
experiences, especially while you are starting out as a negotiator and have limited
experiences.

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Tips for Negotiation Success

• Focus on agreement first. If you reach an impasse during
negotiations, sometimes the best recourse is to agree that you
disagree on those topics and then focus only on the ones that you
can reach an agreement on. Summarize what you’ve agreed on, so
that everyone feels like they’re agreeing, and leave out the points
you don’t agree on. Then take up those issues again in a different
context, such as over dinner or coffee. Dealing with those issues
separately may help the negotiation process.

• Be patient. If you don’t have a deadline by which an agreement
needs to be reached, use that flexibility to your advantage. The
other party may be forced by circumstances to agree to your
terms, so if you can be patient you may be able to get the best deal.

• Whose reality? During negotiations, each side is presenting their
case—their version of reality. Whose version of reality will prevail?
Leigh Steinberg offers this example from the NFL, when he was
negotiating the salary of Warren Moon. Moon was 41 years old.
That was a fact. Did that mean he was hanging on by a thread and
lucky to be employed in the first place? “Should he be grateful for
any money that the team pays him?” Steinberg posed, “Or is he a
quarterback who was among the league leaders in completions and
attempts last year? Is he a team leader who took a previously
moribund group of players, united them, and helped them have
the best record that they’ve had in recent years?” All those facts
are true, and negotiation brings the relevant facts to the forefront
and argues their merit.

• Deadlines. Research shows that negotiators are more likely to strike
a deal by making more concessions and thinking more creatively
as deadlines loom than at any other time in the negotiation
process.

• Be comfortable with silence. After you have made an offer, allow the
other party to respond. Many people become uncomfortable with
silence and feel they need to say something. Wait and listen
instead.

Sources: Adapted from information in Stuhlmacher, A. F., Gillespie, T. L., &
Champagne, M. V. (1998). The impact of time pressure in negotiation: A meta-
analysis. International Journal of Conflict Management, 9, 97–116; Webber, A. (1998,
October). How to get them to show you the money. Fast Company. Retrieved

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November 13, 2008 from http://www.fastcompany.com/magazine/19/
showmoney.html.

When All Else Fails: Third-Party Negotiations
Alternative Dispute Resolution

Alternative Dispute Resolution (ADR)20 includes mediation, arbitration, and other
ways of resolving conflicts with the help of a specially trained, neutral third party
without the need for a formal trial or hearing.New York State Unified Court System.
(2008, October 28). Alternative dispute resolution. Retrieved November 14, 2008,
from http://www.courts.state.ny.us/ip/adr/index.shtml. Many companies find this
effective in dealing with challenging problems. For example, Eastman Kodak
Company added an alternative dispute resolution panel of internal employees to
help them handle cases of perceived discrimination and hopefully stop a conflict
from escalating.Deutsch, C. H. (2004, August 24). Race remains a difficult issue for
many workers at Kodak. New York Times.

Mediation

In mediation21, an outside third party (the mediator) enters the situation with the
goal of assisting the parties in reaching an agreement. The mediator can facilitate,
suggest, and recommend. The mediator works with both parties to reach a solution
but does not represent either side. Rather, the mediator’s role is to help the parties
share feelings, air and verify facts, exchange perceptions, and work toward
agreements. Susan Podziba, a mediation expert, has helped get groups that
sometimes have a hard time seeing the other side’s point of view to open up and
talk to one another. Her work includes such groups as pro-choice and pro-life
advocates, individuals from Israel and Palestine, as well as fishermen and
environmentalists. According to the U.S. Equal Employment Opportunity
Commission, “Mediation gives the parties the opportunity to discuss the issues
raised in the charge, clear up misunderstandings, determine the underlying
interests or concerns, find areas of agreement and, ultimately, to incorporate those
areas of agreements into resolutions. A mediator does not resolve the charge or
impose a decision on the parties. Instead, the mediator helps the parties to agree on
a mutually acceptable resolution. The mediation process is strictly
confidential.”The U.S. Equal Employment Opportunity Commission. (2007,
December 4). Mediation. Retrieved November 13, 2008, from http://www.eeoc.gov/
mediate/index.html. One of the advantages of mediation is that the mediator helps
the parties design their own solutions, including resolving issues that are important
to both parties, not just the ones under specific dispute. Interestingly, sometimes

20. Includes mediation,
arbitration, and other ways of
resolving conflicts with the
help of a specially trained,
neutral third party without the
need for a formal trial or
hearing.

21. A process in which an outside
third party (the mediator)
enters the situation with the
goal of assisting the parties to
reach an agreement.

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mediation solves a conflict even if no resolution is reached. Here’s a quote from
Avis Ridley-Thomas, the founder and administrator of the Los Angeles City
Attorney’s Dispute Resolution Program, who explains, “Even if there is no
agreement reached in mediation, people are happy that they engaged in the
process. It often opens up the possibility for resolution in ways that people had not
anticipated.”Layne, A. (1999, November). Conflict resolution at Greenpeace? Fast
Company. Retrieved November 11, 2008, from http://www.fastcompany.com/
articles/1999/12/rick_hind.html. An independent survey showed 96% of all
respondents and 91% of all charging parties who used mediation would use it again
if offered.Layne, A. (1999, November). Conflict resolution at Greenpeace? Fast
Company. Retrieved November 11, 2008, from http://www.fastcompany.com/
articles/1999/12/rick_hind.html.

You Know It’s Time for a Mediator When…

• The parties are unable to find a solution themselves.
• Personal differences are standing in the way of a successful solution.
• The parties have stopped talking with one another.
• Obtaining a quick resolution is important.

Sources: Adapted from information in Crawley, J. (1994). Constructive conflict
management. San Diego: Pfeiffer; Mache, K. (1990). Handbook of dispute resolution:
Alternative dispute resolution in action. London: Routledge.

Arbitration

In contrast to mediation, in which parties work with the mediator to arrive at a
solution, in arbitration22 the parties submit the dispute to the third-party
arbitrator. It is the arbitrator who makes the final decision. The arbitrator is a
neutral third party, but the decision made by the arbitrator is final (the decision is
called the “award”). Awards are made in writing and are binding to the parties
involved in the case.American Arbitration Association. (2007). Arbitration and
mediation. Retrieved November 11, 2008, from http://www.adr.org/arb_med.
Arbitration is often used in union-management grievance conflicts.

22. A process that involves
bringing in a third party, the
arbitrator, who has the
authority to act as a judge and
make a binding decision to
which both parties must
adhere.

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Figure 10.10

As a last resort, judges resolve
conflicts.

Source:
http://upload.wikimedia.org/
wikipedia/commons/4/44/
Supreme_Court_Front_Dusk.jpg.

Arbitration-Mediation

It is common to see mediation followed by arbitration.
An alternative technique is to follow the arbitration
with mediation. The format of this conflict resolution
approach is to have both sides formally make their cases
before an arbitrator. The arbitrator then makes a
decision and places it in a sealed envelope. Following
this, the two parties work through mediation. If they
are unable to reach an agreement on their own, the
arbitration decisions become binding. Researchers using
this technique found that it led to voluntary agreements
between the two parties 71% of the time versus 50% for
mediation followed by arbitration.Conlon, D. E., Moon,
H., & Ng, K. Y. (2002). Putting the cart before the horse:
The benefits of arbitrating before mediating. Journal of
Applied Psychology, 87, 978–984.

K E Y T A K E A W A Y

Negotiation consists of five phases that include investigation, determining
your BATNA, presentation, bargaining, and closure. Different negotiation
strategies include the distributive approach (fixed-pie approach) and the
integrative approach (expanding-the-pie approach). Research shows that
some common mistakes made during negotiations include accepting the
first offer made, letting egos get in the way, having unrealistic expectations,
getting overly emotional, and letting past negative outcomes affect the
present ones. Third-party negotiators are sometimes needed when two sides
cannot agree.

E X E R C I S E S

1. What are the negotiation phases and what goes on during each of them?
2. When negotiating, is establishing a BATNA important? Why or why not?
3. What are the third-party conflict resolution options available?

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10.6 The Role of Ethics and National Culture

L E A R N I N G O B J E C T I V E S

1. Consider the role of ethics in negotiation.
2. Consider the role of national culture in negotiation.

Ethics and Negotiations

Are hardball tactics OK to use? Sometimes a course of action is legal but is
questionable in terms of ethics. A good rule of thumb is that hardball tactics should
not be used because the negotiation is likely not to be the last time you will interact
with the other party. Therefore, finding a way to make a deal that works for both
sides is preferable. Otherwise, if you have the complete upper hand and use it to
“destroy” the other party, it’s likely that at a future date the other party will have
the upper hand and will use it to retaliate mercilessly against you. What’s more,
your reputation as a negotiator will suffer. As J. Paul Getty said, “My father said:
‘You must never try to make all the money that’s in a deal. Let the other fellow
make some money too, because if you have a reputation for always making all the
money, you won’t have many deals.’”Quote retrieved January 29, 2009, from
http://www.saidwhat.co.uk/keywordquotes/money.

Ethics establish a way of doing what is right, fair, and honest. If your counterpart
feels you are being unfair or dishonest, he or she is less likely to make any
concessions—or even to negotiate with you in the first place.

Here are some tips for ethical negotiations:

• Be honest.
• Keep your promises.
• Follow the Platinum Rule. The Golden Rule tells us to treat others the

way we want to be treated. Author Tony Alessandra goes a step further
with the Platinum Rule: “Treat people the way they want to be
treated.” Caring about others enough to treat them the way they want
to be treated helps build long-term relationships based on ethics and
trust.Stark, P. B., & Flaherty, J. (2003). Ethical negotiations: 10 tips to
ensure win–win outcomes. Negotiator Magazine. Retrieved November 11,
2008, from http://www.negotiatormagazine.com/
showarticle.php?file=article106&page=1.

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Negotiation Around the Globe

Not understanding cultural differences is another common mistake. Some cultures
have a higher or lower threshold for conflict. For example, in countries such as
Japan or Korea, the preference is for harmony (called wa in Japan) rather than overt
conflict.Lebra, T. S. (1976). Japanese patterns of behavior. Honolulu, HI: University
Press of Hawaii. Americans and Germans have a much higher tolerance for conflict
as a way of working through issues. In a study of Japanese, German, and American
cultures, it was found that almost half of the preference for different conflict
management styles was related to the country in which participants were
raised.Tinsley, C. (1998). Models of conflict resolution in Japanese, German, and
American cultures. Journal of Applied Psychology, 83, 316–323.

In Japan, much like Pakistan, the tendency is not to trust what is heard from the
other party until a strong relationship is formed. Similarly, in China, conversations
start out with innocuous topics to set a mood of friendliness.U.S. Commerce
Department. (2007). Retrieved November 11, 2008, from http://www.Buyusa.gov.
This differs a great deal from American negotiators who tend to like to “get down to
business” and heavily weigh first offers as reference points that anchor the process
as both sides make demands and later offers.

There are also differences in how individuals from different cultures use
information and offers during the negotiation process. Observations show that
Japanese negotiators tend to use offers as an information exchange process.Adair,
W. L., Weingart, L., & Brett, J. (2007). The timing and function of offers in the U.S.
and Japanese negotiations. Journal of Applied Psychology, 92, 1056–1068. Research has
found that American negotiators tend to reveal more information than their
Japanese counterparts.Adair, W. L., Okumua, T., & Brett, J. M. (2001). Negotiation
behavior when cultures collide: The United States and Japan. Journal of Applied
Psychology, 86, 371–385. Japanese negotiators might learn little from a single offer,
but patterns of offers over time are interpreted and factored into their
negotiations. Since Japan is a high-context culture, information is learned from
what is not said as well as from what is said.

Even the way that negotiations are viewed can differ across cultures. For example,
the Western cultures tend to think of negotiations as a business activity rather than
a social activity, but in other cultures, the first step in negotiations is to develop a
trusting relationship. Negotiators in Brazil, for example, seriously damaged
relationships when they tried to push negotiations to continue during the Carnival
festival. “The local guys took that as a disrespectful action,” said Oscar Lopez,
commercial director for Hexaprint, S.A. De C.V. in Mexico. “It took several weeks to
restore confidence and move on.”Teague, P. E. (2006, August 17). Collaboration
trumps negotiations. Purchasing, 135(11), 58.

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Also keep in mind what agreement means in different cultures. For example, in
China, nodding of the head does not mean that the Chinese counterpart is agreeing
to what you are proposing, merely that they are listening and following what you
are saying. “Culturally, Chinese companies and workers do not like to say no,” says
a buyer at a manufacturer based in the United States. Here’s how to overcome the
problem. Instead of phrasing a question as, “Can you do this for us?” which would
put the Chinese official in an uncomfortable position of saying no (which they likely
would not do), rephrase the question as, “How will you do this for us and when will
it be done?”Hannon, D. (2006, May 18). DO’s and DON’Ts of doing business in China.
Purchasing, 135(8), 52.

K E Y T A K E A W A Y

Being honest during negotiations, keeping your promises, and treating
others as you would like to be treated all help you negotiate ethically. Not
understanding the culture of a person or group of people you are
negotiating with can be a major mistake. Try to learn as much as you can
about the culture of others involved and be sure to clarify key points along
the way. Also, keep in mind that agreement (e.g., nodding one’s head up and
down or saying “yes, yes”) may not mean the same thing in all cultures.

E X E R C I S E S

1. Is the goal of negotiation to maximize your economic outcome at all
costs? Why or why not? Is it ethical to do so?

2. What are some similarities and differences in conflict management
preference and negotiation practices among different countries around
the globe? Have you had any experiences with individuals from other
cultures? If so, how did it go? How might it have gone better?

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10.7 Avoiding Conflict at WorldCom: The Case of Bernard Ebbers

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506

Figure 10.11

Source: U.S. National
Communications System.

You could argue that Bernard Ebbers, of the now defunct WorldCom, was one of the biggest conflict avoiders in
corporate history. As CEO, Ebbers avoided internal company conflict at all costs, and he ultimately avoided the
reality that WorldCom, once the dominant company in the telecommunications industry, was in serious
economic trouble. Notorious for his temper, employees were reluctant to present Ebbers with company
information that he didn’t like. A 2002 Economist article describes Ebbers as “parochial, stubborn, preoccupied
with penny-pinching.…Mr. Ebbers was a difficult man to work for.” Under Ebbers, WorldCom’s $9 billion
accounting fraud grew in order to avoid facing its worsening economic reality.

WorldCom’s roots stem from a Mississippi telecom company called LDDS where Ebbers was CEO. Growing to over
80,000 employees through multiple acquisitions of other telecom businesses, WorldCom became the
overwhelming industry leader. However, many of WorldCom’s executives had worked with Ebbers since his start
as CEO 2 decades before. Ebbers, who was regularly seen in cowboy boots and a 10-gallon hat, led his close-knit
staff in a “shoot from the hip” style. He was resistant to new technology and famously refused to use e-mail to
communicate with his employees. A well-known company mantra was “That’s the way we did it at LDDS.” Ebbers
lead WorldCom through over 60 acquisitions over a period of 15 years. He grew annual revenues from $1 million
in 1984 to over $17 billion in 1998. However, Ebbers had little regard for long-term plans and avoided making
larger strategic decisions as his company accumulated increasing debt.

As WorldCom acquired new companies, its accounting procedures, computer systems, and customer service
issues became increasingly more complex, and industry experts note that WorldCom struggled to keep up with
the growth. Company employees who tried to bring initial problems to Ebbers’s attention were discouraged, and

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Ebbers made it clear he only wanted to hear good news. This avoidance of problems created a company culture
that demanded success at all costs. That ultimately included falsifying financial reports. For example, former
employees admitted to registering “rolling revenue” to inflate earnings, recording a single sale multiple times.
Another 2002 Economist article reports that this and other dishonest techniques were “endemic in the sales
hierarchy of WorldCom.…Increasing reported revenues came above all else.”

Despite efforts to inflate the books, WorldCom’s stock prices dramatically declined, and Ebbers left the company
in 2002 after pressure from WorldCom’s board of directors. What came to light after his departure, however,
highlighted the significant problems he avoided confronting. Under new CEO John Sidgmore, internal auditor
Cynthia Cooper uncovered multiple instances of financial dishonesty and illegal activity overseen by CFO Scott
Sullivan, a close confidant of Ebbers. A 2002 Wall Street Journal article reports, “As she pursued the trail of fraud,
Ms. Cooper time and again was obstructed by fellow employees, some of whom disapproved of WorldCom’s
accounting methods but were unwilling to contradict their bosses or thwart the company’s goals.”

Ultimately Cooper’s investigation revealed the fraud that took place under Sullivan and Ebbers. Sullivan later
admitted to having booked $3.8 billion of costs as capital expenditures and that five quarters’ worth of profits
should have been recorded as losses. Ebbers’s refusal to honestly face the harsh economic truth for WorldCom
was ultimately highlighted to be a source of WorldCom’s financial problems. In 2005, he was found guilty of
fraud, conspiracy, and filing false documentation. WorldCom was purchased for $7.6 billion and subsequently
integrated into Verizon (NYSE: VE) in 2006, and Ebbers began serving a 25-year jail sentence in 2005.

Case written by [citation redacted per publisher request]. Based on information from Markham, J. W. (2006). A
financial history of modern U.S. corporate scandals: From Enron to reform. New York: M. E. Sharpe Inc.; Pulliam, S., &
Solomon, D. (2002, October 30). Uncooking the books. Wall Street Journal, Eastern edition. Retrieved April 4, 2010,
from http://proquest.umi.com.proxy.lib.pdx.edu/
pqdweb?RQT=318&pmid=7510&TS=1270430724&clientId=11319& VInst=PROD&VName=PQD&VType=PQD; The
big lie: Inside the rise and fraud of WorldCom. (2005). CNBC. Retrieved April 4, 2010, from http://www.hulu.com/
watch/46528/cnbc-originals-the-big-lie#s-p9-so-i0; When something is rotten: The best defence against
“infectious greed” is a healthy corporate culture. (2002, July 25). Economist. Retrieved April 4, 2010, from
http://www.economist.com; Yesterday’s man: WorldCom’s Bernie Ebbers typified the lionised chief executive.
Now he is an ex-lion. (2002, May 2). Economist. Retrieved April 4, 2010, from http://www.economist.com.

Chapter 10 Conflict and Negotiations

10.7 Avoiding Conflict at WorldCom: The Case of Bernard Ebbers 508

D I S C U S S I O N Q U E S T I O N S

1. What potential causes of conflict existed at WorldCom during Bernard
Ebbers’ administration?

2. What might have happened if Ebbers had been prone to a different
conflict-handling style, such as compromise or collaboration?

3. How did having a small “inner circle” of leadership affect the corporate
culture at WorldCom?

4. If you were Cynthia Cooper, how might you have dealt with being
ignored? What options did Cooper have to deal with the company
conflict?

5. What responsibility did the board of directors have to detect and
confront the problems at WorldCom?

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10.8 Conclusion

Conflict can run the gamut from minor annoyances to physically violent situations.
At the same time, conflict can increase creativity and innovation, or it can bring
organizations to a grinding halt. There are many different types of conflict,
including interpersonal, intrapersonal, and intergroup. Within organizations, there
are many common situations that can spur conflict. Certain organizational
structures, such as a matrix structure, can cause any given employee to have
multiple bosses and conflicting or overwhelming demands. A scarcity of resources
for employees to complete tasks is another common cause of organizational
conflict, particularly if groups within the organization compete over those
resources. Of course, simple personality clashes can create intrapersonal conflict in
any situation. Communication problems are also a very common source of conflict
even when no actual problem would exist otherwise. When conflict arises, it can be
handled by any number of methods, each with varying degrees of cooperation and
competitiveness. Different situations require different conflict handling methods,
and no one method is best.

Negotiations occur during many important processes, and possessing astute
negation skills can be an incredible tool. A key component to negotiations involves
having a BATNA, or “best alternative to a negotiated agreement.” Negotiations
typically move through five phases, including investigation, determining your
BATNA, presentation, bargaining, and closure. During a negotiation, it is important
not to make any number of common mistakes. These mistakes can include
accepting the first offer, letting ego get in the way, having unrealistic expectations
of the outcome of the negotiation, becoming too emotional during the process, or
being weighed down by previous failures and letting the past repeat itself. It is
important to keep in mind that many cultures have preferential methods for
handling conflict and negotiation. Individuals should understand the cultural
background of others to better navigate what could otherwise become a messy
situation.

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10.9 Exercises

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511

E T H I C A L D I L E M M A

Imagine that you are part of a bargaining team that has been engaged in
negotiations for 6 long months. One night, as you are getting ready to leave
and are gathering your things, you notice a piece of green paper on the
ground near where Devin, a member of the opposite negotiation team, was
sitting just a few minutes earlier. When you pick it up, you realize that it is a
list of the ideal outcome for the other team.

At first you are ecstatic—this is the information you need to end these
negotiations! Then you begin to recall your organizational behavior course
and all those ethical dilemmas that seemed so easy back then. What should
you do? Should you use the information for your team? I mean, why not,
they were careless enough to leave it behind? On the other hand, would that
be ethical?

Thinking back to that OB course, you recall some key questions you should
ask yourself during negotiations:

• Would this be honest?
• Would this involve keeping my promises?
• Would I be following the Platinum Rule and be “treating people the way

they want to be treated?”

As you are pondering these questions, you also realize that this is a key
decision. There are some additional questions you should ask yourself
around making ethical decisions if you plan on using this information to
help your team:

• Is this decision fair?
• Will I feel better or worse about myself after I make this decision?
• Does this decision break any organizational rules?
• Does this decision break any laws?
• How would I feel if this decision were broadcast on the news?

Just as you think you’ve made your decision, Devin from the opposing team
walks back in and asks you if you’ve seen a green piece of paper.

• What would you do?
• What are the ethical dilemmas involved?
• How would you justify your choice?
• What would be the consequences of your choice?

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I N D I V I D U A L E X E R C I S E

A Case of Listening: When Silence Is GoldenDevine, W. (2002, September 30).
Anatomy of a deal-maker. California Real Estate Journal. Retrieved November
14, 2008 from http://www.wdesquire.com/pages/dealmaker.html.

Listening can be an effective tool during negotiations. William Devine was
representing a client on a land purchase. “The owner and I spent 2 hours on
the phone horse-trading contract issues, then turned to the price,” Devine
explained. “We were $100,000 apart.” The owner then said, “The price your
client proposes will leave us well short of our projections. That makes it very
tough on us.” The line went silent.

“My impulse was to say something in response to the silence, and I started
to speak, then stopped. As I hesitated, I sensed that if I said, ‘My client can
pay all cash,’ or ‘It’s still a good deal for you,’ then the owner would take my
comment as an invitation to joust, we would battle over the hundred grand,
and my client would end up having to pay some or all of that sum. The
owner had not asked a question or proposed a compromise, so no response
was required from me at that moment. I decided to remain silent. After what
felt like days but was probably less than 30 seconds, I heard, ‘But I guess it’s
good for us [i.e., his company] to just get this deal done, so we’ll do it.’”

Devine saved his client $100,000 by staying silent.

Questions to Think About

1. What does this case suggest about the role of silence in negotiations?
2. Have you ever had a similar experience when saying nothing paid off?
3. Are there times when silence is a bad idea? Explain your answer.

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G R O U P E X E R C I S E

Salary Negotiations

Thinking about negotiations is a lot easier than actually engaging in them.
In order to give you some practice with the information in this chapter, you
will engage in a salary negotiation.

1. To make this more meaningful, the exercise will be based on a job that
you are actually interested in. Think of a job you would like to have
(either now or in the future). Imagine you have been offered this job.
The salary is OK. It is about 15% below the market rate for this type of
job, but you really want the job.

2. What will you do?

◦ Will you negotiate for a higher salary?
◦ What are the pros and cons of this choice?

3. If you’ve decided to negotiate (and we strongly suggest you do), work
through the next six steps in the OB Toolbox “Seven Steps to
Negotiating a Higher Salary.” Once you are up to step 5, let your
instructor know you are ready to begin the negotiation process.

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Chapter 13

Power and Politics

L E A R N I N G O B J E C T I V E S

After reading this chapter, you should be able to do the following:

1. Understand the meaning of power.
2. Recognize the positive and negative aspects of power and influence.
3. Recognize the sources of power.
4. Understand and recognize influence tactics and impression

management.
5. Learn the definition of a social network and how to analyze your own

network.
6. Understand the antecedents and consequences of organizational

politics.
7. Understand how ethics affect power.
8. Understand cross-cultural influences on power use.

Video Connection

If you are interested in learning more about Steve Jobs as he describes pivotal
moments in his life, view Steve Jobs’s commencement speech at Stanford in
2005, available at the following Web site: http://www.youtube.com/
watch?v=UF8uR6Z6KLc

619

13.1 Focus on Power: The Case of Steve Jobs

Chapter 13 Power and Politics

620

Figure 13.1

Source:
http://commons.wikimedia.org/
wiki/
File:Steve_Jobs_with_the_Apple_i
Pad_no_logo.jpg by Matt
Buchanan.

In 2007, Fortune named Steve Jobs the “Most Powerful Person in Business.” In 2009, the magazine named him
“CEO of the Decade.” Jobs, CEO of Apple Inc. (NASDAQ: AAPL), has transformed no fewer than five different
industries: computers, Hollywood movies, music, retailing, and wireless phones. His Apple II ushered in the
personal computer era in 1977, and the graphical interface of the Macintosh in 1984 set the standard that all
other PCs emulated. His company Pixar defined the computer-animated feature film. The iPod, iTunes, and
iPhone revolutionized how we listen to music, how we pay for and receive all types of digital content, and what
we expect of a mobile phone.

How has Jobs done it? Jobs draws on all six types of power: legitimate, expert, reward, information, coercive, and
referent. His vision and sheer force of will helped him succeed as a young unknown. But the same determination
that helps him succeed has a darker side—an autocracy and drive for perfection that can make him tyrannical.
Let’s take each of these in turn.

1. Legitimate power. As CEO of Apple, Jobs enjoys unquestioned legitimate power.
2. Expert power. His success has built a tremendous amount of expert power. Jobs is renowned for

being able to think of markets and products for needs that people didn’t even know they had.
3. Reward power. As one of the richest individuals in the United States, Jobs has reward power both

within and outside Apple. He also can reward individuals with his time and attention.
4. Information power. Jobs has been able to leverage information in each industry he has transformed.
5. Coercive power. Forcefulness is helpful when tackling large, intractable problems, says Stanford

social psychologist Roderick Kramer, who calls Jobs one of the “great intimidators.” Robert Sutton
notes that “the degree to which people in Silicon Valley are afraid of Jobs is unbelievable.” Jobs is
known to berate people to the point of tears.

6. Referent power. But at the same time, “He inspires astounding effort and creativity from his people.”
Employee Andy Herzfeld, the lead designer of the original Mac operating system, says Jobs imbues

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13.1 Focus on Power: The Case of Steve Jobs 621

employees with a “messianic zeal” and can make them feel that they’re working on the greatest
product in the world.

Those who work with him say Jobs is very hard to please. However, they also say that this means that Apple
employees work hard to win his approval. “He has the ability to pull the best out of people,” says Cordell
Ratzlaff, who worked closely with Jobs on OS X for 18 months. “I learned a tremendous amount from him.” Jobs’s
ability to persuade and influence has come to be called a “reality distortion field.” As Bud Tribble put it, “In his
presence, reality is malleable. He can convince anyone of practically anything.” Hertzfeld describes his style as
“a confounding mélange of a charismatic rhetorical style, an indomitable will, and an eagerness to bend any fact
to fit the purpose at hand.” The influence works even when you’re aware of it, and it works even on “enemies”:
“No other high-tech impresario could walk into the annual sales meeting of one of his fiercest rivals and get a
standing ovation,” which is what Jobs got in 2002 from Intel Corporation (the ally of Apple archrival Microsoft in
the partnership known as Wintel: Windows + Intel).

Jobs’s power is not infallible—he was ousted from his own company in 1987 by the man he hired to help him run
it. But he returned in 1997 and brought the company back from the brink of failure. The only years that Apple
was unprofitable were the years during Jobs’s absence. Many are watching to see how Apple and Jobs succeed
with the iPad in 2010.

Case written by [citation redacted per publisher request]. Based on information from Schlender, B. (2007,
November 27). The power of Steve Jobs. Fortune, 117–118; Sutton, R. (2007). The no asshole rule. New York: Warner
Business Books; Kahney, L. (2008, March 18). How Apple got everything right by doing everything wrong. Wired.
Retrieved January 4, 2008, from http://www.wired.com/techbiz/it/magazine/16-04/bz_apple; Hertzfeld, A.
(1981, February). Reality distortion field. Retrieved January 4, 2008, from http://folklore.org/
StoryView.py?story =Reality_Distortion_Field.txt.

D I S C U S S I O N Q U E S T I O N S

1. Steve Jobs has achieved a great deal of success. What are some possible
negative consequences of the level of power that he holds?

2. Where does Steve Jobs’s power and influence come from?
3. How might the CEO of Apple create compliance within his organization?
4. Does a member of an organization who has the title of power, such as

Steve Jobs, need legitimacy from the members of the organization to
realize that power, or is the title enough?

5. Apple is a global company. How might the power structure within Apple
change to reflect regional differences?

Chapter 13 Power and Politics

13.1 Focus on Power: The Case of Steve Jobs 622

13.2 The Basics of Power

L E A R N I N G O B J E C T I V E S

1. Learn the meaning of power.
2. Understand how power can have both positive and negative

consequences.
3. Learn about different sources of power.
4. Understand the relationship between dependency and power.

What Is Power?

We’ll look at the aspects and nuances of power in more detail in this chapter, but
simply put, power1 is the ability to influence the behavior of others to get what you
want. Gerald Salancik and Jeffery Pfeffer concur, noting, “Power is simply the
ability to get things done the way one wants them to be done.”Salancik, G., &
Pfeffer, J. (1989). Who gets power. In M. Thushman, C. O’Reily, & D. Nadler (Eds.),
Management of organizations. New York: Harper & Row. If you want a larger budget to
open a new store in a large city and you get the budget increase, you have used your
power to influence the decision.

Power distribution is usually visible within organizations. For example, Salancik
and Pfeffer gathered information from a company with 21 department managers
and asked 10 of those department heads to rank all the managers according to the
influence each person had in the organization. Although ranking 21 managers
might seem like a difficult task, all the managers were immediately able to create
that list. When Salancik and Pfeffer compared the rankings, they found virtually no
disagreement in how the top 5 and bottom 5 managers were ranked. The only slight
differences came from individuals ranking themselves higher than their colleagues
ranked them. The same findings held true for factories, banks, and universities.

Positive and Negative Consequences of Power

The fact that we can see and succumb to power means that power has both positive
and negative consequences. On one hand, powerful CEOs can align an entire
organization to move together to achieve goals. Amazing philanthropists such as
Paul Farmer, a doctor who brought hospitals, medicine, and doctors to remote
Haiti, and Greg Mortenson, a mountaineer who founded the Central Asia Institute
and built schools across Pakistan, draw on their own power to organize others

1. The ability to influence the
behavior of others to get what
you want.

Chapter 13 Power and Politics

623

toward lofty goals; they have changed the lives of thousands of individuals in
countries around the world for the better.Kidder, T. (2004). Mountains beyond
mountains: The quest of Dr. Paul Farmer, a man who would cure the world. New York:
Random House; Mortenson, G., & Relin, D. O. (2006). Three cups of tea: One man’s
mission to promote peace…One school at a time. New York: Viking. On the other hand,
autocracy can destroy companies and countries alike. The phrase, “Power tends to
corrupt, and absolute power corrupts absolutely” was first said by English historian
John Emerich Edward Dalberg, who warned that power was inherently evil and its
holders were not to be trusted. History shows that power can be intoxicating and
can be devastating when abused, as seen in high-profile cases such as those
involving Enron Corporation and government leaders such as the impeached
Illinois Governor Rod Blagojevich in 2009. One reason that power can be so easily
abused is because individuals are often quick to conform. To understand this
relationship better, we will examine three famous researchers who studied
conformity in a variety of contexts.

Conformity

Conformity2 refers to people’s tendencies to behave consistently with social norms.
Conformity can refer to small things such as how people tend to face forward in an
elevator. There’s no rule listed in the elevator saying which way to face, yet it is
expected that everyone will face forward. To test this, the next time you’re in an
elevator with strangers, simply stand facing the back of the elevator without saying
anything. You may notice that those around you become uncomfortable.
Conformity can result in engaging in unethical behaviors, because you are led by
someone you admire and respect who has power over you. Guards at Abu Ghraib
said they were just following orders when they tortured prisoners.CNN.com. (2005,
January 15). Graner sentenced to 10 years for abuses. Retrieved November 4, 2008,
from http://www.cnn.com/2005/LAW/01/15/graner. court.martial/. People
conform because they want to fit in with and please those around them. There is
also a tendency to look to others in ambiguous situations, which can lead to
conformity. The response to “Why did you do that?” being “Because everyone else
was doing it” sums up this tendency.

So, does conformity occur only in rare or extreme circumstances? Actually, this is
not the case. Three classic sets of studies illustrate how important it is to create
checks and balances to help individuals resist the tendency to conform or to abuse
authority. To illustrate this, we will examine findings from the Milgram, Asch, and
Zimbardo studies.

2. People’s tendencies to behave
consistently with social norms.

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13.2 The Basics of Power 624

Figure 13.2

This is an illustration of the
setup of a Milgram experiment.
The experimenter (E) convinces
the subject (“Teacher” T) to give
what are believed to be painful
electric shocks to another
subject, who is actually an actor
(“Learner” L). Many subjects
continued to give shocks despite
pleas of mercy from the actors.

Source: http://en.wikipedia.org/
wiki/
Image:Milgram_Experiment_v2.p
ng.

The Milgram Studies

Stanley Milgram, a psychologist at Yale in the 1960s, set
out to study conformity to authority. His work tested
how far individuals would go in hurting another
individual when told to do so by a researcher. A key
factor in the Milgram study and others that will be
discussed is the use of confederates, or people who seem
to be participants but are actually paid by the
researchers to take on a certain role. Participants
believed that they were engaged in an experiment on
learning. The participant (teacher) would ask a series of
questions to another “participant” (learner). The
teachers were instructed to shock the learners
whenever an incorrect answer was given. The learner
was not a participant at all but actually a confederate
who would pretend to be hurt by the shocks and yell out
in pain when the button was pushed. Starting at 15 volts
of power, the participants were asked to increase the
intensity of the shocks over time. Some expressed
concern when the voltage was at 135 volts, but few
stopped once they were told by the researcher that they
would not personally be held responsible for the
outcome of the experiment and that their help was
needed to complete the experiment. In the end, all the
participants were willing to go up to 300 volts, and a
shocking 65% were willing to administer the maximum
of 450 volts even as they heard screams of pain from the
learner.Milgram, S. (1974). Obedience to authority. New
York: Harper & Row.

The Asch Studies

Another researcher, Solomon Asch, found that individuals could be influenced to
say that two lines were the same length when one was clearly shorter than the
other. This effect was established using groups of four or more participants who
were told they were in experiments of visual perception. However, only one person
in the group was actually in the experiment. The rest were confederates, and the
researchers had predetermined whether or not they gave accurate answers. Groups
were shown a focal line and a choice of three other lines of varying length, with one
being the same length as the focal line. Most of the time the confederates would
correctly state which choice matched the focal line, but occasionally they would
give an obviously wrong answer. For example, looking at the following lines, the
confederates might say that choice C matches the length of the focal line. When this

Chapter 13 Power and Politics

13.2 The Basics of Power 625

Figure 13.3

Participants were asked one by
one to say which of the lines on
the right matched the line on the
focal line on the left. While A is
an exact match, many
participants conformed when
others unanimously chose B or C.

happened, the actual research participant would go along with the wrong answer
37% of the time. When asked why they went along with the group, participants said
they assumed that the rest of the group, for whatever reason, had more information
regarding the correct choice. It only took three other individuals saying the wrong
answer for the participant to routinely agree with the group. However, this effect
was decreased by 75% if just one of the insiders gave the correct answer, even if the
rest of the group gave the incorrect answer. This finding illustrates the power that
even a small dissenting minority can have. Additionally, it holds even if the
dissenting confederate gives a different incorrect answer. As long as one
confederate gave an answer that was different from the majority, participants were
more likely to give the correct answer themselves.Asch, S. E. (1952b). Social
psychology. Englewood Cliffs, NJ: Prentice Hall; Asch, S. E. (1956). Studies of
independence and conformity. A minority of one against a unanimous majority.
Psychological Monographs, 70(9), Whole No. 416. A meta-analysis of 133 studies using
Asch’s research design revealed two interesting patterns. First, within the United
States, the level of conformity has been decreasing since the 1950s. Second, studies
done in collectivistic countries such as Japan showed more conformity than those
done in more individualistic countries such as Great Britain.Bond, R., & Smith, P. B.
(1996). Culture and conformity: A meta-analysis of studies using Asch’s (1952b,
1956) line judgment task. Psychological Bulletin, 119, 111–137.

The Zimbardo Study

Philip Zimbardo, a researcher at Stanford University,
conducted a famous experiment in the 1970s.Zimbardo,
P. G. Stanford prison experiment. Retrieved January 30,
2009, from http://www.prisonexp.org/. While this
experiment would probably not make it past the human
subjects committee of schools today, at the time, he was
authorized to place an ad in the paper that asked for
male volunteers to help understand prison
management. After excluding any volunteers with
psychological or medical problems or with any history
of crime or drug abuse, he identified 24 volunteers to
participate in his study. Researchers randomly assigned
18 individuals to the role of prisoner or guard. Those
assigned the role of “prisoners” were surprised when
they were picked up by actual police officers and then
transferred to a prison that had been created in the basement of the Stanford
psychology building. The guards in the experiment were told to keep order but
received no training. Zimbardo was shocked with how quickly the expected roles
emerged. Prisoners began to feel depressed and helpless. Guards began to be
aggressive and abusive. The original experiment was scheduled to last 2 weeks, but
Zimbardo ended it after only 6 days upon seeing how deeply entrenched in their

Chapter 13 Power and Politics

13.2 The Basics of Power 626

roles everyone, including himself, had become. Next we will examine the
relationship between dependency and power.

The Relationship Between Dependency and Power
Dependency

Dependency3 is directly related to power. The more that a person or unit is
dependent on you, the more power you have. The strategic contingencies model
provides a good description of how dependency works. According to the model,
dependency is power that a person or unit gains from their ability to handle actual
or potential problems facing the organization.Saunders, C. (1990, January). The
strategic contingencies theory of power: Multiple perspectives. Journal of
Management Studies, 21(1), 1–18. You know how dependent you are on someone
when you answer three key questions that are addressed in the following sections.

Scarcity

In the context of dependency, scarcity4 refers to the uniqueness of a resource. The
more difficult something is to obtain, the more valuable it tends to be. Effective
persuaders exploit this reality by making an opportunity or offer seem more
attractive because it is limited or exclusive. They might convince you to take on a
project because “it’s rare to get a chance to work on a new project like this,” or
“You have to sign on today because if you don’t, I have to offer it to someone else.”

Importance

Importance5 refers to the value of the resource. The key question here is “How
important is this?” If the resources or skills you control are vital to the
organization, you will gain some power. The more vital the resources that you
control are, the more power you will have. For example, if Kecia is the only person
who knows how to fill out reimbursement forms, it is important that you are able to
work with her, because getting paid back for business trips and expenses is
important to most of us.

Substitutability

Finally, substitutability6 refers to one’s ability to find another option that works as
well as the one offered. The question around whether something is substitutable is
“How difficult would it be for me to find another way to this?” The harder it is to
find a substitute, the more dependent the person becomes and the more power
someone else has over them. If you are the only person who knows how to make a
piece of equipment work, you will be very powerful in the organization. This is true
unless another piece of equipment is brought in to serve the same function. At that

3. Directly related to power. The
more that a person or unit is
dependent on you, the more
power you have.

4. In the context of dependency,
refers to the uniqueness of a
resource.

5. The value of the resource.

6. One’s ability to find another
option that works as well as
the one offered.

Chapter 13 Power and Politics

13.2 The Basics of Power 627

point, your power would diminish. Similarly, countries with large supplies of crude
oil have traditionally had power to the extent that other countries need oil to
function. As the price of oil climbs, alternative energy sources such as wind, solar,
and hydropower become more attractive to investors and governments. For
example, in response to soaring fuel costs and environmental concerns, in 2009
Japan Airlines successfully tested a blend of aircraft fuel made from a mix of
camelina, jatropha, and algae on the engine of a Boeing 747-300 aircraft.Krauss, C.
(2009, January 30). Japan Airlines joins the biofuels race. New York Times. Retrieved
January 30, 2009, from http://greeninc.blogs.nytimes.com/2009/01/30/japan-
airlines-joins-the-biofuels-race/.

Figure 13.4

Possessing any of the three aspects of a resource could make others depend on you, two would make you extremely
needed, and having all three could make you indispensable.

Chapter 13 Power and Politics

13.2 The Basics of Power 628

K E Y T A K E A W A Y

Power is the ability to influence the behavior of others to get what you want.
It is often visible to others within organizations. Conformity manifests itself
in several ways, and research shows that individuals will defer to a group
even when they may know that what they are doing is inaccurate or
unethical. Having just one person dissent helps to buffer this effect. The
more dependent someone is on you, the more power you have over them.
Dependency is increased when you possess something that is considered
scarce, important, and nonsubstitutable by others.

E X E R C I S E S

1. What does the phrase “Power corrupts and absolute power corrupts
absolutely” refer to? What experiences have you had that confirm or
refute this assumption?

2. Thinking about the Milgram and Zimbardo studies, do you think you
would behave the same or differently in those situations? Why or why
not?

3. What lessons can be learned from the past studies of conformity to help
avoid abuses of power in the future?

4. Give an example of someone who you are dependent upon. Think about
how scarcity, importance, and substitutability affect this dependency.

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13.3 The Power to Influence

L E A R N I N G O B J E C T I V E S

1. Identify the five sources of power.
2. Understand influence tactics.
3. Learn about impression management.
4. Examine the impact of the direction of influence attempts.

Bases of Power

Having power and using power are two different things. For example, imagine a
manager who has the power to reward or punish employees. When the manager
makes a request, he or she will probably be obeyed even though the manager does
not actually reward the employee. The fact that the manager has the ability to give
rewards and punishments will be enough for employees to follow the request. What
are the sources of one’s power over others? Researchers identified six sources of
power, which include legitimate, reward, coercive, expert, information, and
referent.French, J. P. R., Jr., & Raven, B. (1960). The bases of social power. In D.
Cartwright & A. Zander (Eds.), Group dynamics (pp. 607–623). New York: Harper and
Row. You might earn power from one source or all six depending on the situation.
Let us take a look at each of these in turn, and continue with Steve Jobs from the
opening case as our example.

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630

Figure 13.5

People who have legitimate power should be aware of how their choices and behaviors affect others.

Source: © The New Yorker Collection. 1986. Leo Cullum from cartoonbank.com. All rights reserved.

Legitimate Power

Legitimate power7 is power that comes from one’s organizational role or position.
For example, a boss can assign projects, a policeman can arrest a citizen, and a
teacher assigns grades. Others comply with the requests these individuals make
because they accept the legitimacy of the position, whether they like or agree with
the request or not. Steve Jobs has enjoyed legitimate power as the CEO of Apple. He
could set deadlines and employees comply even if they think the deadlines were
overly ambitious. Start-up organizations often have founders who use their
legitimate power to influence individuals to work long hours week after week in
order to help the company survive.

7. Power that comes from one’s
organizational role or position.

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Reward Power

Reward power8 is the ability to grant a reward, such as an increase in pay, a perk,
or an attractive job assignment. Reward power tends to accompany legitimate
power and is highest when the reward is scarce. Anyone can wield reward power,
however, in the form of public praise or giving someone something in exchange for
their compliance. When Steve Jobs ran Apple, he had reward power in the form of
raises and promotions. Another example of reward power comes from Bill Gross,
founder of Idealab, who has the power to launch new companies or not. He created
his company with the idea of launching other new companies as soon as they could
develop viable ideas. If members could convince him that their ideas were viable, he
gave the company a maximum of $250,000 in seed money, and gave the
management team and employees a 30% stake in the company and the CEO 10% of
the company. That way, everyone had a stake in the company. The CEO’s salary was
capped at $75,000 to maintain the sense of equity. When one of the companies,
Citysearch, went public, all employees benefited from the $270 million valuation.

Coercive Power

In contrast, coercive power9 is the ability to take something away or punish
someone for noncompliance. Coercive power often works through fear, and it forces
people to do something that ordinarily they would not choose to do. The most
extreme example of coercion is government dictators who threaten physical harm
for noncompliance. Parents may also use coercion such as grounding their child as
punishment for noncompliance. Steve Jobs has been known to use coercion—yelling
at employees and threatening to fire them. When John Wiley & Sons Inc. published
an unauthorized biography of Jobs, Jobs’s response was to prohibit sales of all books
from that publisher in any Apple retail store.Hafner, K. (2005, April 30). Steve Jobs’
review of his biography: Ban it. New York Times. Retrieved January 5, 2008, from
http://www.nytimes.com/2005/04/30/technology/
30apple.html?ei=5090&en=7cc0ad54117bc197&ex=1272513600&partner=
rssuserland&emc=rss. In other examples, John D. Rockefeller was ruthless when
running Standard Oil Company. He not only undercut his competitors through
pricing, but he used his coercive power to get railroads to refuse to transport his
competitor’s products. American presidents have been known to use coercion
power. President Lyndon Baines Johnson once told a White House staffer, “Just you
remember this. There’s only two kinds at the White house. There’s elephants and
there’s ants. And I’m the only elephant.”Hughes, R., Ginnet, R., & Curphy, G. (1995).
Power, influence and influence tactics. In J. T. Wren (Ed.), The leaders companion (p.
345). New York: Free Press.

8. The ability to grant a reward,
such as an increase in pay, a
perk, or an attractive job
assignment.

9. The ability to take something
away or punish someone for
noncompliance.

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Figure 13.6

Expert Power

Expert power10 comes from knowledge and skill. Steve Jobs has expert power from
his ability to know what customers want—even before they can articulate it. Others
who have expert power in an organization include long-time employees, such as a
steelworker who knows the temperature combinations and length of time to get the
best yields. Technology companies are often characterized by expert, rather than
legitimate power. Many of these firms utilize a flat or matrix structure in which
clear lines of legitimate power become blurred as everyone communicates with
everyone else regardless of position.

Information Power

Information power11 is similar to expert power but differs in its source. Experts
tend to have a vast amount of knowledge or skill, whereas information power is
distinguished by access to specific information. For example, knowing price
information gives a person information power during negotiations. Within
organizations, a person’s social network can either isolate them from information
power or serve to create it. As we will see later in this chapter, those who are able to
span boundaries and serve to connect different parts of the organizations often
have a great deal of information power. In the TV show Mad Men, which is set in the
1960s, it is clear that the switchboard operators have a great deal of information
power as they place all calls and are able to listen in on all the phone conversations
within the advertising firm.

Referent Power

Referent power12 stems from the personal
characteristics of the person such as the degree to
which we like, respect, and want to be like them.
Referent power is often called charisma13—the ability
to attract others, win their admiration, and hold them
spellbound. Steve Jobs’s influence as described in the
opening case is an example of this charisma.

10. Power that comes from
knowledge and skill.

11. Power that comes from access
to specific information.

12. Power that stems from the
personal characteristics of the
person such as the degree to
which we like, respect, and
want to be like them.

13. The ability to attract others,
win their admiration, and hold
them spellbound.

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13.3 The Power to Influence 633

As the 44th elected president of
the United States, Barack Obama
has legitimate power. As
commander-in-chief of the U.S.
Armed Forces, he also has
coercive power. His ability to
appoint individuals to cabinet
positions affords him reward
power. Individuals differ on the
degree to which they feel he has
expert and referent power, as he
received 52% of the popular vote
in the 2008 election. Shortly after
the election, he began to be
briefed on national security
issues, providing him with
substantial information power as
well.

Source: http://en.wikipedia.org/
wiki/
Image:ObamaSouthCarolina.jpg.

What Is Influence?

Starting at infancy, we all try to get others to do what
we want. We learn early what works in getting us to our
goals. Instead of crying and throwing a tantrum, we may
figure out that smiling and using language causes
everyone less stress and brings us the rewards we seek.

By the time you hit the workplace, you have had vast
experience with influence techniques. You have
probably picked out a few that you use most often. To be
effective in a wide number of situations, however, it’s
best to expand your repertoire of skills and become
competent in several techniques, knowing how and
when to use them as well as understanding when they
are being used on you. If you watch someone who is
good at influencing others, you will most probably
observe that person switching tactics depending on the
context. The more tactics you have at your disposal, the
more likely it is that you will achieve your influence
goals.

Al Gore and many others have spent years trying to influence us to think about the
changes in the environment and the implications of global warming. They speak,
write, network, and lobby to get others to pay attention. But Gore, for example,
does not stop there. He also works to persuade us with direct, action-based
suggestions such as asking everyone to switch the kind of light bulbs they use, turn
off appliances when not in use, drive vehicles with better fuel economy, and even
take shorter showers. Ironically, Gore has more influence now as a private citizen
regarding these issues than he was able to exert as a congressman, senator, and vice
president of the United States.

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OB Toolbox: Self-Assessment

Do You Have the Characteristics of Powerful Influencers?

People who are considered to be skilled influencers share the following
attributes.

How often do you engage in them? 0 = never, 1= sometimes, 2 = always.

• present information that can be checked for accuracy
• provide a consistent message that does not change from situation

to situation
• display authority and enthusiasm (often described as charisma)
• offer something in return for compliance
• act likable
• show empathy through listening
• show you are aware of circumstances, others, and yourself
• plan ahead

If you scored 0–6: You do not engage in much effective influencing behavior.
Think of ways to enhance this skill. A great place to start is to recognize the
items on the list above and think about ways to enhance them for yourself.

If you scored 7–12: You engage in some influencing behavior. Consider the
context of each of these influence attempts to see if you should be using more
or less of it depending on your overall goals.

If you scored 13–16: You have a great deal of influence potential. Be careful that
you are not manipulating others and that you are using your influence when it
is important rather than just to get your own way.

Commonly Used Influence Tactics

Figure 13.7 Influence Tactics Use and OutcomesKipnis, D., Schmidt, S. M., & Wilkinson, J. (1980).
Interorganizational influence tactics: Explorations in getting one’s way. Journal of Applied Psychology, 65,
440–452; Schriescheim, C. A., & Hinkin, T. R. (1990). Influence tactics used by subordinates: A theoretical and
empirical analysis and refinement of Kipnis, Schmidt, and Wilkinson subscales. Journal of Applied Psychology,

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75, 132–140; Yukl, G., & Falbe, C. M. (1991). The Importance of different power sources in downward and lateral
relations. Journal of Applied Psychology, 76, 416–423.

Source: Adapted from information in Falbe, C. M., & Yukl, G. (1992). Consequences for managers of using single
influence tactics and combinations of tactics. Academy of Management Journal, 35, 638–652.

Researchers have identified distinct influence tactics and discovered that there are
few differences between the way bosses, subordinates, and peers use them, which
we will discuss at greater depth later on in this chapter. We will focus on nine
influence tactics. Responses to influence attempts include resistance, compliance,
or commitment. Resistance14 occurs when the influence target does not wish to
comply with the request and either passively or actively repels the influence
attempt. Compliance15 occurs when the target does not necessarily want to obey,
but they do. Commitment16 occurs when the target not only agrees to the request
but also actively supports it as well. Within organizations, commitment helps to get
things done, because others can help to keep initiatives alive long after compliant
changes have been made or resistance has been overcome.

1. Rational persuasion17 includes using facts, data, and logical
arguments to try to convince others that your point of view is the best
alternative. This is the most commonly applied influence tactic. One
experiment illustrates the power of reason. People were lined up at a
copy machine and another person, after joining the line asked, “May I
go to the head of the line?” Amazingly, 63% of the people in the line
agreed to let the requester jump ahead. When the line jumper makes a
slight change in the request by asking, “May I go to the head of the line
because I have copies to make?” the number of people who agreed

14. Occurs when the influence
target does not wish to comply
with the request and either
passively or actively repels the
influence attempt.

15. Occurs when the target does
not necessarily want to obey,
but they do.

16. Occurs when the target not
only agrees to the request but
also actively supports it as well.

17. Includes using facts, data, and
logical arguments to try to
convince others that your
point of view is the best
alternative.

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13.3 The Power to Influence 636

jumped to over 90%. The word because was the only difference.
Effective rational persuasion includes the presentation of factual
information that is clear and specific, relevant, and timely. Across
studies summarized in a meta-analysis, rationality was related to
positive work outcomes.Higgins, C. A., Judge, T. A., & Ferris, G. R.
(2003). Influence tactics and work outcomes: A meta-analysis. Journal of
Organizational Behavior, 24, 89–106.

2. Inspirational appeals18 seek to tap into our values, emotions, and
beliefs to gain support for a request or course of action. When
President John F. Kennedy said, “Ask not what your country can do for
you, ask what you can do for your country,” he appealed to the higher
selves of an entire nation. Effective inspirational appeals are authentic,
personal, big-thinking, and enthusiastic.

3. Consultation19 refers to the influence agent’s asking others for help in
directly influencing or planning to influence another person or group.
Consultation is most effective in organizations and cultures that value
democratic decision making.

4. Ingratiation20 refers to different forms of making others feel good
about themselves. Ingratiation includes any form of flattery done
either before or during the influence attempt. Research shows that
ingratiation can affect individuals. For example, in a study of résumés,
those résumés that were accompanied with a cover letter containing
ingratiating information were rated higher than résumés without this
information. Other than the cover letter accompanying them, the
résumés were identical.Varma, A., Toh, S. M., & Pichler, S. (2006).
Ingratiation in job applications: Impact on selection decisions. Journal
of Managerial Psychology, 21, 200–210. Effective ingratiation is honest,
infrequent, and well intended.

5. Personal appeal21 refers to helping another person because you like
them and they asked for your help. We enjoy saying yes to people we
know and like. A famous psychological experiment showed that in
dorms, the most well-liked people were those who lived by the
stairwell—they were the most often seen by others who entered and
left the hallway. The repeated contact brought a level of familiarity
and comfort. Therefore, personal appeals are most effective with
people who know and like you.

6. Exchange22 refers to give-and-take in which someone does something
for you, and you do something for them in return. The rule of
reciprocation says that “we should try to repay, in kind, what another
person has provided us.”Cialdini, R. (2000). Influence: Science and
practice. Boston: Allyn & Bacon, p. 20. The application of the rule
obliges us and makes us indebted to the giver. One experiment
illustrates how a small initial gift can open people to a substantially
larger request at a later time. One group of subjects was given a bottle

18. Those that seek to tap into our
values, emotions, and beliefs to
gain support for a request or
course of action.

19. The influence agent’s asking
others for help in directly
influencing or planning to
influence another person or
group.

20. Different forms of making
others feel good about
themselves.

21. Helping another person
because you like them and they
asked for your help.

22. Give-and-take in which
someone does something for
you and you do something for
them in return.

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of Coke. Later, all subjects were asked to buy raffle tickets. On the
average, people who had been given the drink bought twice as many
raffle tickets as those who had not been given the unsolicited drinks.

7. Coalition tactics23 refer to a group of individuals working together
toward a common goal to influence others. Common examples of
coalitions within organizations are unions that may threaten to strike
if their demands are not met. Coalitions also take advantage of peer
pressure. The influencer tries to build a case by bringing in the unseen
as allies to convince someone to think, feel, or do something. A well-
known psychology experiment draws upon this tactic. The
experimenters stare at the top of a building in the middle of a busy
street. Within moments, people who were walking by in a hurry stop
and also look at the top of the building, trying to figure out what the
others are looking at. When the experimenters leave, the pattern
continues, often for hours. This tactic is also extremely popular among
advertisers and businesses that use client lists to promote their goods
and services. The fact that a client bought from the company is a silent
testimonial.

8. Pressure24 refers to exerting undue influence on someone to do what
you want or else something undesirable will occur. This often includes
threats and frequent interactions until the target agrees. Research
shows that managers with low referent power tend to use pressure
tactics more frequently than those with higher referent power.Yukl, G.,
Kim, H., & Falbe, C. M. (1996). Antecedents of influence outcomes.
Journal of Applied Psychology, 81, 309–317. Pressure tactics are most
effective when used in a crisis situation and when they come from
someone who has the other’s best interests in mind, such as getting an
employee to an employee assistance program to deal with a substance
abuse problem.

9. Legitimating tactics25 occur when the appeal is based on legitimate or
position power. “By the power vested in me…”: This tactic relies upon
compliance with rules, laws, and regulations. It is not intended to
motivate people but to align them behind a direction. Obedience to
authority is filled with both positive and negative images. Position,
title, knowledge, experience, and demeanor grant authority, and it is
easy to see how it can be abused. If someone hides behind people’s
rightful authority to assert themselves, it can seem heavy-handed and
without choice. You must come across as an authority figure by the
way you act, speak, and look. Think about the number of commercials
with doctors, lawyers, and other professionals who look and sound the
part, even if they are actors. People want to be convinced that the
person is an authority worth heeding. Authority is often used as a last
resort. If it does not work, you will not have much else to draw from in
your goal to persuade someone.

23. A group of individuals working
together toward a common
goal to influence others.

24. Exerting undue influence on
someone to do what you want,
or else something undesirable
will occur.

25. Those that occur when the
appeal is based on legitimate or
position power.

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From the Best-Seller’s List: Making OB Connections

You can make more friends in two months by becoming interested in other
people than you can in two years by trying to get other people interested in
you.

– Dale Carnegie

Figure 13.8

Source: http://en.wikipedia.org/
wiki/File:Picturecarnegie.jpg.

How to Make Friends and Influence People was written by Dale Carnegie in 1936 and
has sold millions of copies worldwide. While this book first appeared over 70
years ago, the recommendations still make a great deal of sense regarding
power and influence in modern-day organizations. For example, he
recommends that in order to get others to like you, you should remember six
things:

1. Become genuinely interested in other people.
2. Smile.
3. Remember that a person’s name is to that person the sweetest and

most important sound in any language.
4. Be a good listener. Encourage others to talk about themselves.
5. Talk in terms of the other person’s interests.
6. Make the other person feel important—and do it sincerely.

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13.3 The Power to Influence 639

This book relates to power and politics in a number of important ways.
Carnegie specifically deals with enhancing referent power. Referent power
grows if others like, respect, and admire you. Referent power is more effective
than formal power bases and is positively related to employees’ satisfaction
with supervision, organizational commitment, and performance. One of the
keys to these recommendations is to engage in them in a genuine manner. This
can be the difference between being seen as political versus understanding
politics.

Impression Management

Impression management26 means actively shaping the way you are perceived by
others. You can do this through your choice of clothing, the avatars or photos you
use to represent yourself online, the descriptions of yourself on a résumé or in an
online profile, and so forth. By using impression management strategies, you
control information that make others see you in the way you want to be seen.
Consider when you are “being yourself” with your friends or with your family—you
probably act differently around your best friend than around your mother.Dunn, E.,
& Forrin, N. (2005). Impression management. Retrieved July 8, 2008, from
http://www.psych.ubc.ca/~dunnlab/publications/Dunn_Forrin_2005.pdf.

On the job, the most effective approach to impression management is to do two
things at once—build credibility and maintain authenticity. As Harvard Business
School Professor Laura Morgan Roberts puts it, “When you present yourself in a
manner that is both true to self and valued and believed by others, impression
management can yield a host of favorable outcomes for you, your team, and your
organization.”Stark, M. (2005, June 20). Creating a positive professional image. Q&A
with Laura Morgan Roberts. Retrieved July 8, 2008, from the Harvard Business
School Web site: http://hbswk.hbs.edu/item/4860.html.

There may be aspects of your “true self” that you choose not to disclose at work,
although you would disclose them to your close friends. That kind of impression
management may help to achieve group cohesiveness and meet professional
expectations. But if you try to win social approval at work by being too different
from your true self—contradicting your personal values—you might feel
psychological distress.

It’s important to keep in mind that whether you’re actively managing your
professional image or not, your coworkers are forming impressions of you. They26. Actively shaping the way you

are perceived by others.

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13.3 The Power to Influence 640

watch your behavior and draw conclusions about the kind of person you are,
whether you’ll keep your word, whether you’ll stay to finish a task, and how you’ll
react in a difficult situation.

Since people are forming these theories about you no matter what, you should take
charge of managing their impressions of you. To do this, ask yourself how you want
to be seen. What qualities or character traits do you want to convey? Perhaps it’s a
can-do attitude, an ability to mediate, an ability to make a decision, or an ability to
dig into details to thoroughly understand and solve a problem.

Then, ask yourself what the professional expectations are of you and what aspects
of your social identity you want to emphasize or minimize in your interactions with
others. If you want to be seen as a leader, you might disclose how you organized an
event. If you want to be seen as a caring person in whom people can confide, you
might disclose that you’re a volunteer on a crisis helpline. You can use a variety of
impression management strategies to accomplish the outcomes you want.

Here are the three main categories of strategies and examples of each:

• Nonverbal impression management27 includes the clothes you
choose to wear and your demeanor. An example of a nonverbal signal
is body art, including piercings and tattoos. While the number of
people in the United States who have body art has risen from 1% in
1976 to 24% in 2006, it can hold you back at work. Vault.com did a
survey and found that 58% of the managers they surveyed said they
would be less likely to hire someone with visible body art, and over
75% of respondents felt body art was unprofessional. Given these
numbers, it should not be surprising that 67% of employees say they
conceal body art while they are at work.Society for Industrial and
Organizational Psychology Inc. (SIOP). (2008, February 6). Body art on
the rise but not so trendy at work. Retrieved February 8, 2008, from the
SIOP Web site: http://www.siop.org.

• Verbal impression management28 includes your tone of voice, rate of
speech, what you choose to say and how you say it. We know that 38%
of the comprehension of verbal communication comes from these cues.
Managing how you project yourself in this way can alter the
impression that others have of you. For example, if your voice has a
high pitch and it is shaky, others may assume that you are nervous or
unsure of yourself.

• Behavior impression management29 includes how you perform on
the job and how you interact with others. Complimenting your boss is
an example of a behavior that would indicate impression management.

27. Includes the clothes you
choose to wear, body language,
and your demeanor.

28. Includes your tone of voice,
rate of speech, what you
choose to say and how you say
it.

29. Includes how you perform on
the job and how you interact
with others.

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Figure 13.9

Impression management includes
how a person dresses, how they
stand, and the way they behave
at work.

© 2010 Jupiterimages
Corporation

Other impression management behaviors include conforming, making
excuses, apologizing, promoting your skills, doing favors, and making
desirable associations known. Impression management has been shown
to be related to higher performance ratings by increasing liking,
perceived similarity, and network centrality.Barsness, Z. I., Diekmann,
K. A., & Seidel, M. L. (2005). Motivation and opportunity: The role of
remote work, demographic dissimilarity, and social network centrality
in impression management. Academy of Management Journal, 48, 401–419;
Wayne, S. J., & Liden, R. C. (1995). Effects of impression management on
performance ratings: A longitudinal study. Academy of Management
Journal, 38, 232–260.

Research shows that impression management occurs
throughout the workplace. It is especially salient when
it comes to job interviews and promotional contexts.
Research shows that structured interviews suffer from
less impression management bias than unstructured
interviews, and that longer interviews lead to a
lessening of the effects as well.Tsai, W., Chen, C., & Chiu,
S. (2005). Exploring boundaries of the effects of
applicant impression management tactics in job
interviews. Journal of Management, 31, 108–125.

Direction of Influence

The type of influence tactic used tends to vary based on
the target. For example, you would probably use
different influence tactics with your boss than you
would with a peer or with employees working under
you.

Upward Influence

Upward influence30, as its name implies, is the ability to influence your boss and
others in positions higher than yours. Upward influence may include appealing to a
higher authority or citing the firm’s goals as an overarching reason for others to
follow your cause. Upward influence can also take the form of an alliance with a
higher status person (or with the perception that there is such an alliance).Farmer,
S. M., & Maslyn, J. M. (1999). Why are styles of upward influence neglected? Making
the case for a configurational approach to influences. Journal of Management, 25,
653–682; Farmer, S. M., Maslyn, J. M., Fedor, D. B., & Goodman, J. S. (1997). Putting
upward influence strategies in context. Journal of Organizational Behavior, 18, 17–42.
As complexity grows, the need for this upward influence grows as well—the ability

30. The ability to influence your
boss and others in positions
higher than yours.

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of one person at the top to know enough to make all the decisions becomes less
likely. Moreover, even if someone did know enough, the sheer ability to make all
the needed decisions fast enough is no longer possible. This limitation means that
individuals at all levels of the organization need to be able to make and influence
decisions. By helping higher-ups be more effective, employees can gain more power
for themselves and their unit as well. On the flip side, allowing yourself to be
influenced by those reporting to you may build your credibility and power as a
leader who listens. Then, during a time when you do need to take unilateral,
decisive action, others will be more likely to give you the benefit of the doubt and
follow. Both Asian American and Caucasian American managers report using
different tactics with superiors than those used with their subordinates.Xin, K. R., &
Tsui, A. S. (1996). Different folks for different folks? Influence tactics by Asian-
American and Caucasian-American managers. Leadership Quarterly, 7, 109–132.
Managers reported using coalitions and rationality with managers and
assertiveness with subordinates. Other research establishes that subordinates’ use
of rationality, assertiveness, and reciprocal exchange was related to more favorable
outcomes such as promotions and raises, while self-promotion led to more negative
outcomes.Orpen, C. (1996). The effects of ingratiation and self promotion tactics on
employee career success. Social Behavior and Personality, 24, 213–214; Wayne, S. J.,
Liden, R. C., Graf, I. K., & Ferris, G. R. (1997). The role of upward influence tactics in
human resource decisions. Personnel Psychology, 50, 979–1006.

Influence takes place even before employees are hired. For example, ingratiation
and rationality were used frequently by fire fighters during interviews.McFarland,
L. A., Ryan, A. M., & Kriska, S. D. (2002). Field study investigation of applicant use of
influence tactics in a selection interview. Journal of Psychology, 136, 383–398.
Extraverts tend to engage in a greater use of self-promotion tactics while
interviewing, and research shows that extraverts are more likely to use
inspirational appeal and ingratiation as influence tactics.Cable, D. M., & Judge, T. A.
(2003). Managers’ upward influence tactic strategies: The role of manager
personality and supervisor leadership style. Journal of Organizational Behavior, 24,
197–214; Kristof-Brown, A., Barrick, M. R., & Franke, M. (2002). Applicant
impression management: Dispositional influences and consequences for recruiter
perceptions of fit and similarity. Journal of Management, 53, 925–954. Research shows
that ingratiation was positively related to perceived fit with the organization and
recruiters’ hiring recommendations.Higgins, C. A., & Judge, T. A. (2004). The effect
of applicant influence tactics on recruiter perceptions of fit and hiring
recommendations: A field study. Journal of Applied Psychology, 89, 622–632.

Downward Influence

Downward influence31 is the ability to influence employees lower than you. This is
best achieved through an inspiring vision. By articulating a clear vision, you help31. The ability to influence those

in positions lower than yours.

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people see the end goal and move toward it. You often don’t need to specify exactly
what needs to be done to get there—people will be able to figure it out on their own.
An inspiring vision builds buy-in and gets people moving in the same direction.
Research conducted within large savings banks shows that managers can learn to be
more effective at influence attempts. The experimental group of managers received
a feedback report and went through a workshop to help them become more
effective in their influence attempts. The control group of managers received no
feedback on their prior influence attempts. When subordinates were asked 3
months later to evaluate potential changes in their managers’ behavior, the
experimental group had much higher ratings of the appropriate use of
influence.Seifer, C. F., Yukl, G., & McDonald, R. A. (2003). Effects of multisource
feedback and a feedback facilitator on the influence behavior of managers toward
subordinates. Journal of Applied Psychology, 88, 561–569. Research also shows that the
better the quality of the relationship between the subordinate and their supervisor,
the more positively resistance to influence attempts are seen.Tepper, B. J., Uhl-Bien,
M., Kohut, G. F., Rogelberg, S. G., Lockhart, D. E., & Ensley, M. D. (2006).
Subordinates’ resistance and managers’ evaluations of subordinates’ performance.
Journal of Management, 32, 185–208. In other words, bosses who like their employees
are less likely to interpret resistance as a problem.

Peer Influence

Peer influence occurs all the time. But, to be effective within organizations, peers
need to be willing to influence each other without being destructively
competitive.Cohen, A., & Bradford, D. (2002). Power and influence in the 21st
century. In S. Chowdhurt (Ed.), Organizations of the 21st century. London: Financial
Times-Prentice Hall. There are times to support each other and times to
challenge—the end goal is to create better decisions and results for the organization
and to hold each other accountable. Executives spend a great deal of their time
working to influence other executives to support their initiatives. Research shows
that across all functional groups of executives, finance or human resources as an
example, rational persuasion is the most frequently used influence tactic.Enns, H.
G., & McFarlin, D. B. (2003). When executives influence peers: Does function matter?
Human Resource Management, 42, 125–142.

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OB Toolbox: Getting Comfortable With Power

Now that you’ve learned a great deal about power and influence within
organizations, consider asking yourself how comfortable you are with the three
statements below:

• Are you comfortable saying, “I want to be powerful” to yourself?
Why or why not?

• Are you comfortable saying, “I want to be powerful” to someone
else? Why or why not?

• Are you comfortable having someone say, “You are powerful” to
you? Why or why not?

Discomfort with power reduces your power. Experts know that leaders need to feel
comfortable with power. Those who feel uncomfortable with power send those
signals out unconsciously. If you feel uncomfortable with power, consider putting
the statement in a shared positive light by saying, “I want to be powerful so that we
can accomplish this goal.”

K E Y T A K E A W A Y

Individuals have six potential sources of power, including legitimate,
reward, coercive, expert, information, and referent power. Influence tactics
are the way that individuals attempt to influence one another in
organizations. Rational persuasion is the most frequently used influence
tactic, although it is frequently met with resistance. Inspirational appeals
result in commitment 90% of the time, but the tactic is utilized only 2% of
the time. The other tactics include legitimizing, personal appeals,
exchanges, ingratiation, pressure, forming coalitions, and consultation.
Impression management behaviors include conforming, making excuses,
apologizing, promoting your skills, doing favors, and making associations
with desirable others known. Influence attempts may be upward, downward,
or lateral in nature.

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E X E R C I S E S

1. Which of the six bases of power do you usually draw upon? Which do
you use the least of at this time?

2. Distinguish between coercive and reward power.
3. Which tactics seem to be the most effective? Explain your answer.
4. Why do you think rational persuasion is the most frequently utilized

influence tactic?
5. Give an example of someone you’ve tried to influence lately. Was it an

upward, downward, or lateral influence attempt?

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13.4 Organizational Politics

L E A R N I N G O B J E C T I V E S

1. Understand what organizational politics are.
2. Examine political behavior within organizations.

Organizational Politics

Organizational politics are informal, unofficial, and sometimes behind-the-scenes
efforts to sell ideas, influence an organization, increase power, or achieve other
targeted objectives.Brandon, R., & Seldman, M. (2004). Survival of the savvy: High-
integrity political tactics for career and company success. New York: Free Press;
Hochwarter, W. A., Witt, L. A., & Kacmar, K. M. (2000). Perceptions of organizational
politics as a moderator of the relationship between conscientiousness and job
performance. Journal of Applied Psychology, 85, 472–478. Politics has been around for
millennia. Aristotle wrote that politics stems from a diversity of interests, and those
competing interests must be resolved in some way. “Rational” decision making
alone may not work when interests are fundamentally incongruent, so political
behaviors and influence tactics arise.

Today, work in organizations requires skill in handling conflicting agendas and
shifting power bases. Effective politics isn’t about winning at all costs but about
maintaining relationships while achieving results. Although often portrayed
negatively, organizational politics are not inherently bad. Instead, it’s important to
be aware of the potentially destructive aspects of organizational politics in order to
minimize their negative effect. Of course, individuals within organizations can
waste time overly engaging in political behavior. Research reported in HR Magazine
found that managers waste 20% of their time managing politics. However, as John
Kotter wrote in Power and Influence, “Without political awareness and skill, we face
the inevitable prospect of becoming immersed in bureaucratic infighting, parochial
politics and destructive power struggles, which greatly retard organizational
initiative, innovation, morale, and performance.”Kotter, J. (1985). Power and
influence. New York: Free Press.

In our discussion about power, we saw that power issues often arise around scarce
resources. Organizations typically have limited resources that must be allocated in
some way. Individuals and groups within the organization may disagree about how
those resources should be allocated, so they may naturally seek to gain those

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resources for themselves or for their interest groups, which gives rise to
organizational politics. Simply put, with organizational politics, individuals ally
themselves with like-minded others in an attempt to win the scarce resources.
They’ll engage in behavior typically seen in government organizations, such as
bargaining, negotiating, alliance building, and resolving conflicting interests.

Politics are a part of organizational life, because organizations are made up of
different interests that need to be aligned. In fact, 93% of managers surveyed
reported that workplace politics exist in their organization, and 70% felt that in
order to be successful, a person has to engage in politics.Gandz, J., & Murray, V. V.
(1980). The experience of workplace politics. Academy of Management Journal, 23,
237–251. In the negative light, saying that someone is “political” generally stirs up
images of back-room dealing, manipulation, or hidden agendas for personal gain. A
person engaging in these types of political behaviors is said to be engaging in self-
serving behavior that is not sanctioned by the organization.Ferris, G. R., Frink, D. D.,
Galang, M. C., Zhou, J., Kacmar, K. M., & Howard, J. L. (1996). Perceptions of
organizational politics: Prediction, stress-related implications, and outcomes,
Human Relations, 49, 233–266; Valle, M., & Perrewe, P. L. (2000). Do politics
perceptions relate to political behaviors? Tests of an implicit assumption and
expanded model. Human Relations, 53, 359–386; Harris, K. J., James, M., &
Boonthanom, R. (2005). Perceptions of organizational politics and cooperation as
moderators of the relationship between job strains and intent to turnover. Journal of
Managerial Issues, 17, 26–42; Randall, M. L., Cropanzano, R., Bormann, C. A., &
Birjulin, A. (1999). Organizational politics and organizational support as predictors
of work attitudes, job performance, and organizational citizenship behavior. Journal
of Organizational Behavior, 20, 159–174.

Examples of these self-serving behaviors include bypassing the chain of command
to get approval for a special project, going through improper channels to obtain
special favors, or lobbying high-level managers just before they make a promotion
decision. These types of actions undermine fairness in the organization, because not
everyone engages in politicking to meet their own objectives. Those who follow
proper procedures often feel jealous and resentful because they perceive unfair
distributions of the organization’s resources, including rewards and
recognition.Parker, C. P., Dipboye, R. L., & Jackson, S. L. (1995). Perceptions of
organizational politics: An investigation of antecedents and consequences. Journal of
Management, 21, 891–912.

Researchers have found that if employees think their organization is overly driven
by politics, the employees are less committed to the organization,Maslyn, J. M., &
Fedor, D. B. (1998). Perceptions of politics: Does measuring different loci matter?
Journal of Applied Psychology, 84, 645–653; Nye, L. G., & Wit, L. A. (1993).
Dimensionality and construct validity of the perceptions of politics scale (POPS).

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Educational and Psychological Measurement, 53, 821–829. have lower job
satisfaction,Ferris, G. R., Frink, D. D., Bhawuk, D. P., Zhou, J., & Gilmore, D. C. (1996).
Reactions of diverse groups to politics in the workplace. Journal of Management, 22,
23–44; Hochwarter, W. A., Ferris, G. R., Laird, M. D., Treadway, D. C., & Gallagher, V.
C. (in press). Nonlinear politics perceptions—work outcomes relationships: A three-
study, five-sample investigation. Journal of Management; Kacmar, K. L., Bozeman, D.
P., Carlson, D. S., & Anthony, W. P. (1999). An examination of the perceptions of
organizational politics model: Replication and extension. Human Relations, 52,
383–416. perform worse on the job,Anderson, T. P. (1994). Creating measures of
dysfunctional office and organizational politics: The DOOP and short-form DOOP
scales psychology. Journal of Human Behavior, 31, 24–34. have higher levels of job
anxiety,Ferris, G. R., Frink, D. D., Bhawuk, D. P., Zhou, J., & Gilmore, D. C. (1996).
Reactions of diverse groups to politics in the workplace. Journal of Management, 22,
23–44; Kacmar, K. M., & Ferris, G. R. (1989). Theoretical and methodological
considerations in the age-job satisfaction relationship. Journal of Applied Psychology,
74, 201–207. and have a higher incidence of depressed mood.Byrne, Z. S., Kacmar, C.,
Stoner, J., & Hochwarter, W. A. (2005). The relationship between perceptions of
politics and depressed mood at work: Unique moderators across three levels. Journal
of Occupational Health Psychology, 10(4), 330–343.

The negative side of organizational politics is more likely to flare up in times of
organizational change or when there are difficult decisions to be made and a
scarcity of resources that breeds competition among organizational groups. To
minimize overly political behavior, company leaders can provide equal access to
information, model collaborative behavior, and demonstrate that political
maneuvering will not be rewarded or tolerated. Furthermore, leaders should
encourage managers throughout the organization to provide high levels of feedback
to employees about their performance. High levels of feedback reduce the
perception of organizational politics and improve employee morale and work
performance.Rosen, C., Levy, P., & Hall, R. (2006, January). Placing perceptions of
politics in the context of the feedback environment, employee attitudes, and job
performance. Journal of Applied Psychology, 91(10), 21. Remember that politics can be
a healthy way to get things done within organizations.

Antecedents of Political Behavior
Individual Antecedents

There are a number of potential individual antecedents of political behavior. We
will start off by understanding the role that personality has in shaping whether
someone will engage in political behavior.

Political skill32 refers to peoples’ interpersonal style, including their ability to
relate well to others, self-monitor, alter their reactions depending upon the

32. Peoples’ interpersonal style,
including their ability to relate
well to others, self-monitor,
alter their reactions depending
upon the situation they are in,
and inspire confidence and
trust.

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situation they are in, and inspire confidence and trust.Ferris, G. R., Perrewé, P. L.,
Anthony, W. P., & Gilmore, D. C. (2000). Political skill at work. Organizational
Dynamics, 28, 25–37. Researchers have found that individuals who are high on
political skill are more effective at their jobs or at least in influencing their
supervisors’ performance ratings of them.Ferris, G. R., Fedor, D. B., & King, T. R.
(1994). A political conceptualization of managerial behavior. Human Resource
Management Review, 4, 1–34; Kilduff, M., & Day, D. (1994). Do chameleons get ahead?
The effects of self-monitoring on managerial careers. Academy of Management
Journal, 37, 1047–1060. Individuals who are high in internal locus of control believe
that they can make a difference in organizational outcomes. They do not leave
things to fate. Therefore, we would expect those high in internal locus of control to
engage in more political behavior. Research shows that these individuals perceive
politics around them to a greater degree.Valle, M., & Perrewe, P. L. (2000). Do
politics perceptions relate to political behaviors? Test of an implicit assumption and
expanded model. Human Relations, 53, 359–386. Investment in the organization is also
related to political behavior. If a person is highly invested in an organization either
financially or emotionally, they will be more likely to engage in political behavior
because they care deeply about the fate of the organization. Finally, expectations of
success also matter. When a person expects that they will be successful in changing
an outcome, they are more likely to engage in political behavior. Think about it: If
you know there is no chance that you can influence an outcome, why would you
spend your valuable time and resources working to effect change? You wouldn’t.
Over time you’d learn to live with the outcomes rather than trying to change
them.Bandura, A. (1996). Self-efficacy: The exercise of control. New York: Worth
Publishers.

Figure 13.10

Individual and organizational antecedents can both lead to political behavior.

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13.4 Organizational Politics 650

Organizational Antecedents

Scarcity of resources breeds politics. When resources such as monetary incentives or
promotions are limited, people see the organization as more political. Any type of
ambiguity can relate to greater organizational politics. For example, role ambiguity
allows individuals to negotiate and redefine their roles. This freedom can become a
political process. Research shows that when people do not feel clear about their job
responsibilities, they perceive the organization as more political.Muhammad, A. H.
(2007, Fall). Antecedents of organizational politic perceptions in Kuwait business
organizations. Competitiveness Review, 17(14), 234. Ambiguity also exists around
performance evaluations and promotions. These human resource practices can lead to
greater political behavior, such as impression management, throughout the
organization. As you might imagine, democratic decision making leads to more
political behavior. Since many people have a say in the process of making decisions,
there are more people available to be influenced.

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OB Toolbox: Overcoming Ineffective Politics

Author and consultant Patrick Lencioni recommends the following four steps
for overcoming ineffective politics due to turf wars. When members of the
organization are more concerned about their own area of operations than
doing what’s best for the entire organization, in the long run you may have a
problem with turf wars33. Taking these four steps can help overcome this
situation:

1. Create a thematic goal. The goal should be something that everyone
in the organization can believe in, such as, for a hospital, giving
the best care to all patients. This goal should be a single goal,
qualitative, time-bound, and shared.

2. Create a set of defining objectives. This step should include objectives
that everyone agrees will help bring the thematic goal to fruition.

3. Create a set of ongoing standard operating objectives. This process
should be done within each area so that the best operating
standards are developed. These objectives should also be shared
across the organization so everyone is aware of them.

4. Create metrics to measure them. Measuring whether the standard
operating objectives get done is a vital step in the process. Rather
than someone else pointing out what isn’t working, all the people
within the department will have the information necessary to
come to this conclusion and correct the problem, because
ultimately, everyone in the organization cares about achieving the
thematic goal.

Source: Adapted from information in Lencioni, P. M. (2006). Silos, politics and turf
wars: A leadership fable about destroying the barriers that turn colleagues into
competitors. New York: Jossey-Bass.

33. Members of the organization
are engaged in turf wars when
they are more concerned about
their own area of operations
than doing what’s best for the
entire organization in the long
run.

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K E Y T A K E A W A Y

Organizational politics is a natural part of organizational life. Organizations
that are driven by unhealthy levels of political behavior suffer from lowered
employee organizational commitment, job satisfaction, and performance as
well as higher levels of job anxiety and depression. Individual antecedents of
political behavior include political skill, internal locus of control, high
investment in the organization, and expectations of success. Organizational
antecedents include scarcity of resources, role ambiguity, frequent
performance evaluations and promotions, and democratic decision making.

E X E R C I S E S

1. Do you think politics are a positive or negative thing for organizations?
Why?

2. Describe an example of a negative outcome due to politics.
3. Describe an example of a positive outcome due to politics.
4. Can you think of additional individual or organizational antecedents of

political behavior?
5. What political behaviors have you observed within school groups or

your workplace? Were they successful? Why or why not?

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13.5 Understanding Social Networks

L E A R N I N G O B J E C T I V E S

1. Learn what social networks are.
2. Understand social network analysis.

Social Networks

We’ve seen that power comes from many sources. One major source relates to who
you know and how much access you have to information within your organization.
Social networks34 are visual maps of relationships between individuals. They are
vital parts of organizational life as well as important when you are first looking for
a job. For example, if you are interested in being hired by Proctor & Gamble, you
might call upon your social network—the network of people you know—to find the
people who can help you accomplish this task. You might ask your network if they
know anyone at Proctor & Gamble. If you did so, the people you’d call on aren’t just
your friends and family—they’re part of your informal network. In fact, research
finds that 75% to 95% of all jobs are never formally advertised but are filled through
such social networks.Hansen, K. (2008). A foot in the door: Networking your way into the
hidden job market. Berkeley, CA: Ten Speed Press.

Much of the work that gets done in organizations is done through informal
networks as well. Networks serve three important functions. First, they deliver
private information. Second, they allow individuals to gain access to diverse skills
sets. Third, they can help create power.

Organizations can conduct a social network analysis (SNA)35, a systematic effort
to examine the structure of social relationships in a group. Their purpose is to
uncover the informal connections between people. SNA dates back to 1934 when
Joseph Moreno introduced the tools of sociometry. More recently, the advent of
computers has made SNA possible on large networks. In the past decade, SNA has
become widely used across fields.

Conducting SNA

SNA can be conducted either directly or indirectly. The indirect way is to analyze e-
mails between people. For example, which employees e-mail each other? How
often? Who replies to whom? Another technique is to observe a group in action to

34. A map of the relationships
between individuals.

35. A systematic effort to examine
the structure of social
relationships in a group.

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see which employees talk to each other and who approaches whom for what.
Additional, nonintrusive options are to look at project structures of billable hours
such as determining which individuals regularly work together. Direct approaches
to SNA involve doing a survey that asks questions directly.Cross, R., Parker, A.,
Prusak, L., & Borgatti, S. P. (2001). Knowing what we know: Supporting knowledge
creation and sharing in social networks. Organizational Dynamics 30(2), 100–120. For
example, the survey might ask individuals, “Who would you go to for technical
information? Who can you rely on to give you the pulse of the company? Who do
you trust to keep your best interests in mind?” SNA can reveal who is trusted,
important in decision making (that is, to whom do people turn for advice before
making an important decision?), and innovative (“With whom are you most likely
to discuss a new idea?”). The direct approach is likely to be more targeted, but some
people may see it as an unwanted intrusion.

Analyzing Network Ties and Key Network Roles

Once the data is collected, SNA software is used to create the maps for analysis. The
maps draw incoming and outgoing arrows between people to show the number of
ties coming into a person (contacts that the person receives) and the number of ties
outgoing (contacts that the person initiates). There are three key roles in a
network. Central connectors36 are people linked to the greatest number of people.
Boundary spanners37 are people who connect one network to another within the
company or even across organizations. Peripheral specialists38 have special
expertise that can be drawn upon even though they often work independently of
the group.

Analysis: Strong and Weak Ties

You can recognize the strength of ties between people by counting the frequency of
ties. The more interactions people have, the stronger the ties those individuals have
with each other. Strong ties39 often indicate emotional support, not just
informational support between people. Ties that are reciprocated tend to be
stronger as well. Weak ties40 are characterized by less frequent interaction and
often do not have as much emotional attachment, but they are also easier to
maintain, and therefore people can have more of them. Weak ties are particularly
useful for innovation, because people who are good friends tend to see the same
information, whereas people who are merely acquaintances are likely to be exposed
to different information. Thus, a casual encounter may spark that creative idea.
Social networks tend to be informal, but by doing an SNA, the company can harness
their power to help improve communication throughout the company (such as by
making sure people have the information to share) and to help generate and spread
innovation (by giving information to the boundary-spanning people who will pass it
on beyond their work group). Social networks serve to promote collaboration,

36. People linked to the greatest
number of people.

37. People who connect one
network to another within the
company or even across
organizations.

38. People with special expertise
that can be drawn upon even
though they often work
independently of the group.

39. Ties that often indicate
emotional support, not just
informational support between
people.

40. Ties characterized by less
frequent interaction and often
do not have as much emotional
attachment, but they are also
easier to maintain, and
therefore people can have
more of them.

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13.5 Understanding Social Networks 655

Figure 13.11

Mark Zuckerberg, cofounder of
Facebook, helped to bring social
networking to thousands of
individuals.

Source:
http://commons.wikimedia.org/
wiki/Image:Zuckerberg2.jpg.

improve new product development, and respond to emergencies or unusual
circumstances quickly.Cross, R., Liedtka, J., & Weiss, L. (2005). A practical guide to
social networks. Harvard Business Review, 83(3), 124–132.

Social networks connect people with others. Consider
networking Web sites such as Facebook or LinkedIn,
where being connected with many people makes you
more visible. This is becoming more and more salient as
80% of 12- to 17-year-olds use MySpace at least weekly,
and over 40,000 MySpace groups are devoted to
companies and colleagues.Frauenheim, E. (2007). Social
revolution: A wired workforce community. Workforce
Management. Retrieved November 27, 2007, from
http://www.workforce.com/section/10/feature/25/20/
77/index.html. In business, the more central you are,
the more power you will have. The closer you are to
more people, the more powerful you are.Cross, R. L.,
Parker, A., & Cross, R. (2004). The hidden power of social
networks: Understanding how work really gets done in
organizations. Harvard, MA: Harvard Business Publishing.
If you are the person who many people link to and you
serve as a node between people, you have brokering
power—you can introduce people to each other. People
high on this “betweenness” are also in a position to
withhold information from one person to the next,
which can happen during power plays. You also have a
greater number of people to call on when you need
something, which makes you less dependent on any one
person. The more ties you have that are incoming
(toward you), the more trusted you are.

Social network analysis shows who communicates with whom, who knows whom,
and where gaps in communication or collaboration may exist. After conducting a
network analysis, organizations can take actions to modify people’s roles or
responsibilities in ways that improve communication or diffuse innovation
throughout the organization more effectively by putting people or departments in
touch with each other.

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Figure 13.12

Doing social things such as
playing golf or tennis outside
work is one way to help build
your social network.

Building Your Own Network

There are several simple steps you can take to help
build your own social network. For example, you can go
to lunch with someone new. You can also try to do more
to encourage, help, and share with others. You can seek
information outside your own class or work group. You
can spend time with people from work outside work. All
these suggestions are effective ways to naturally build
your social network.

K E Y T A K E A W A Y

Social networks make up a key part of organizations. A social network
analysis (SNA) involves tracing who interacts with whom. Central
connectors have a large number of contacts. Boundary spanners connect to
several networks of people. Peripheral specialists often work independently.
Strong and weak ties can both be helpful for gathering information and
building one’s network.

E X E R C I S E S

1. Have you ever thought about your own social network before? What do
you think about it now?

2. Do you think the direct or indirect approach to doing a social network
analysis is the most accurate?

3. Do you think it is ethical to play golf or tennis with coworkers to build
your social network? Why or why not?

4. How have computers influenced social networking?

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13.6 The Role of Ethics and National Culture

L E A R N I N G O B J E C T I V E S

1. Consider the role of ethics and power.
2. Consider the role of national culture on power.

Ethics and Power

Power brings a special need for ethics, because the circumstances of power make it
easy for misuse to occur. As we have seen, a company president wields at least three
sources of power: legitimate from the position they hold, coercive from the ability
to fire employees, and reward such as the ability to give raises and perks. Expert
power and referent power often enter the mix as well. Now take the example of
setting the CEO’s pay. In a public company, the CEO presumably has to answer to
the board of directors and the shareholders. But what if the CEO appoints many of
the people on the board? What if the board and the CEO are friends? Consider the
case of Richard Grasso, former chairman of the New York Stock Exchange (NYSE),
whose compensation was $140 million plus another $48 million in retirement
benefits. At that time, the average starting salary of a trader on the NYSE was
$90,000, so Grasso was being paid 1,555 times more than a starting employee. The
NYSE Board of Directors approved Grasso’s payment package, but many of the
board members had been appointed to their positions by Grasso himself. What’s
more, the NYSE’s function is to regulate publicly traded companies. As Hartman and
Desjardins noted, “The companies being regulated by the NYSE were the very same
companies that were paying Grasso.”Hartman, L., & Desjardins, J. (2008). Business
ethics. New York: McGraw-Hill, p. 43. Grasso ultimately resigned amid public
criticism but kept the $140 million. Other CEOs have not faced the same outcry,
even though average CEO pay increased 200% to 400% during the same time period
that average worker pay increased only 4.3%.CEO paycharts. (2005). Retrieved
January 4, 2008, from the Fair Economy Web site: http://www.faireconomy.org/
issues/ceo_pay. Some CEOs have earned a great deal of respect by limiting what
they are paid. For example, Japan Airlines CEO Haruka Nishimatsu earns the
equivalent to $90,000 per year while running the 10th largest airline in the world. In
addition, he rides the bus to work and eats in the company cafeteria with everyone
else.Petersen, B. (2009, January 28). Japan Airline boss sets exec example. CBS
Evening News. Retrieved January 28, 2009, from http://www.cbsnews.com/stories/
2009/01/28/eveningnews/main4761136.shtml.

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Figure 13.13

CEOs like James Sinegal of Costco
Wholesale Corporation note that
compensation is not the main
motivation for their work.
Consistent with this sentiment,
by choice, Sinegal remains one of
the lowest paid CEOs of a
Standard & Poor’s 500 company,
and he has not received a raise in
7 consecutive years.

Source: Used with permission.
Photo by France Freeman, Costco
Wholesale.

Video Connection: Haruka Nishimatsu

If you are interested in learning more about CEO Haruka Nishimatsu, view this
CBS News video segment, available at the following Web site:

http://www.cbsnews.com/video/watch/?id=4761187n

Power Around the Globe

Power also has a cultural dimension. In some countries,
power is centralized in the hands of a few. This type of
distribution makes up high power distance countries.
Within organizations in these countries, the structure is
hierarchical, and compensation is based on your
position in the hierarchy. People in high power distance
countries expect unequal distribution of power, such as
large differences in pay and status.Javidan, M. Dorfman,
P., Sully de Luque, M., & House, R. (2006, February). In
the eye of the beholder: Cross cultural lessons in
leadership from project GLOBE. Academy of Management
Perspectives, 20, 67–90. People in positions of authority in
these countries expect (and receive) obedience. In
Brazil, for example, there are formal relationships
between the leader and followers, and it’s clear who has
the most power in any given work environment.
Important decisions, including decisions on hiring and
raises, are made by the person in charge, and decisions
are often based on loyalty rather than on formal review
mechanisms. Japan is also a higher power distant
country and has unequal power and wealth among its
citizens. But, people do not perceive this inequity as
inherently wrong; rather, they accept it as their cultural
heritage. Other examples of high power distance countries include the Arab
nations, the Philippines, Venezuela, and Spain.

Countries with a low power distance rating, such as Australia, the Netherlands, and
Sweden, value cooperative interaction across power levels. They emphasize equality
and opportunity for everyone. For example, Australians want their leaders to be
achievement-oriented, visionary, and inspirational, but they don’t want their

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leaders to stand out too much. Leaders need to be seen as “one of us.”Ashkanasy, N.
(1998, August). What matters most in leadership: A 60 nation study—implications of
GLOBE country-specific empirical findings for organizational behavior and
management. Presentation at Academy of Management Conference, San Diego, CA.
Organizational structures in low power distance countries are flatter with higher
worker involvement. Status is based on achievement rather than class distinction or
birth. People in power cannot arbitrarily hire their relatives or reward those loyal
to them. There are formal review mechanisms in place to give everyone a fair
chance at pay raises, and the difference in pay between high-level and lower level
jobs is smaller.

These differences in perceptions of power become especially important in
international ventures in which people of different countries work together. For
example, in a joint venture between an American and a Mexican company,
American managers were continually frustrated with what they perceived to be
slow decision making by Mexican managers. Even the e-mails sent to the Mexican
subsidiary were taking a long time to be answered. Mexico ranks higher on the
power distance dimension than the United States—company structures are more
hierarchical, and decisions are made only by top managers; therefore, lower level
managers in Mexico could not make decisions on behalf of their bosses. In the case
of e-mails, employees were consulting with their managers before answering each
e-mail, taking a long time to answer them.

In addition to differing perceptions of power, how people influence each other
seems to be determined by culture. Cross-cultural research shows that the more
task-oriented influence tactics, such as rational persuasion, are seen as more
effective in the United States than in China, and that Chinese managers rated
tactics involving relationships such as coalitions as more effective than did the
American managers.Fu, P. P., & Yukl, G. (2000). Perceived effectiveness of influence
tactics in the United States and China. Leadership Quarterly, 11, 251–266; Yukl, G., Fu,
P. P., & McDonald, R. (2003). Cross-cultural differences in perceived effectiveness of
influence tactics for initiating or resisting change. Applied Psychology: An
International Review, 52, 68–82.

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13.6 The Role of Ethics and National Culture 660

K E Y T A K E A W A Y

Power can be easily abused. This is especially the case of CEOs who are
rewarded by a board of directors that is often staffed by trusted friends and
colleagues of the CEO. It is not hard to imagine that this might become a
conflict of interest. Countries differ in terms of power distance. Some
countries such as Brazil see a formal relationship between leaders and
followers based on a rigid hierarchy.

E X E R C I S E S

1. What could be done to make sure that CEOs are paid fairly for their work
rather than as a favor from their friends?

2. What is some advice about power that you would give to a colleague who
was leaving to China to set up a new business?

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13.7 Getting Connected: The Case of Social Networking

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Figure 13.14

© Thinkstock

Networking has the potential to open doors and create possibilities for jobs and partnerships. Networking
establishes connections between individuals and access to information that one might not normally have access
to. Reaching out to strangers can be an intimidating and nerve-racking experience. In business, the more central
you are, the more power you have. Creating connections and ties to other people affords you the opportunity for
power and the ability to more closely control your future, so while at times networking might feel awkward and
uncomfortable, it is a necessary and important part of establishing and maintaining a career.

Online social networking sites play an important role in this networking process for individuals both
professionally and personally. With 1,200 employees in 2010, Facebook has 350 million users around the world,
and LinkedIn has over 60 million members in over 200 countries. A new member joins LinkedIn every second,
and about half of the members are outside the United States. These online sites have created new opportunities
for networking and allow individuals to branch out beyond their normal world of industry, school, and business.
The key is to avoid costly missteps as employers have begun to search online for information about prospective
and current employees. In 2009, 8% of companies reported that they had fired an employee for misuse of social
media.

Many of these online sites have become a tool for business. For example, LinkedIn targets working professionals
and provides them a way to maintain lists of business connections and to use those connections to gain
introduction to people using mutual contacts. Unlike other social networking sites, LinkedIn is almost entirely
used by professionals. The power of social networking flows in both directions. Employers can screen applicants
through their online accounts and recruiters more than ever are using these sites to view background
information, individual skill sets, and employment history, which can be cross-referenced with submitted
applications. Job seekers can review the profiles of those at top management firms and search for mutual
contacts. LinkedIn also provides statistics about firms, which can be useful information for individuals looking
at potential employers.

Networking is about building your brand and managing relationships. Using social networks as a vehicle to
market one’s self and make professional connections is becoming increasingly common, as well as using loose

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13.7 Getting Connected: The Case of Social Networking 663

ties or connections through others to open doors and land jobs. In an increasingly high-tech and digital world, it
is important to be aware and conscience of the digital footprint that we create. But with careful cultivation these
online networks can present many opportunities.

Case written by [citation redacted per publisher request]. Based on information from Hof, R. (2008, October 28).
Facebook in a suit: LinkedIn launches applications platform. BusinessWeek. Retrieved March 23, 2010, from
http://www.businessweek.com/the_thread/techbeat/archives/2008/10/linkedin_launch.html; Horswill, A.
(2009). How to get a job online using social networking. The Courier Mail. Retrieved March 23, 2010, from
LexisNexis Academic database; Lavenda, D. (2010, March 10). 10 tips for safe and effective social networking. Fast
Company. Retrieved March 23, 2010, from http://www.fastcompany.com/1577857/10-tips-for-safe-and-effective-
social -networking; How to use social networking sites for marketing and PR. (2008, December 24). AllBusiness.
Retrieved April 23, 2010, from http://www.allbusiness.com/marketing-advertising/public-relations/
11674037-1.html; Ostrow, A. (2009, August). Facebook fired: 8% of US companies have sacked social media
miscreants. Mashable. Retrieved March 30, 2010, from http://mashable.com/2009/08/10/social-media-misuse.

D I S C U S S I O N Q U E S T I O N S

1. How is online networking different from or similar to in-person
networking? Please describe your experience with both.

2. What are the downfalls and benefits of social networking?
3. In what ways are indirect ties as powerful and important as direct ties?
4. To what extent have you built your own brand? Is this something that

you have ever considered before?

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13.8 Conclusion

Power and politics in organizations are common. In most cases, each concept is
necessary and executed with skill and precision. Unfortunately, power can lead to
conformity from those around us, and this occurring conformity can breed
corruption. The amount of power you have has strong ties to how much others
depend on you. If you are deemed a valuable resource within an organization, then
you are able to wield that dependability to make demands and get others to do what
you want. Besides having an innate or acquired control over particular resources,
there are several social aspects of power to draw on.

Methods for obtaining more power in an organization can often lead to political
behaviors. As one person seeks to influence another to support an idea, politics
begins to play out. Though necessary in some instances, many people that follow
the rules see the politics of an organization as resulting in an unfair distribution of
resources. Still others, despite understanding the politics of a given organization,
see it as an unnecessary time consumer.

Politics, influence, and power can often reside within your social network. When an
individual is core to a social structure, they will often have some degree of control
over others. Social networks can also help you acquire jobs, make beneficial
connections, and generally make like easier. It is often a good idea to analyze your
social network and determine if it needs to be strengthened or tailored.

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13.9 Exercises

E T H I C A L D I L E M M A

It is two days before your performance appraisal. Your performance this
quarter has been less than desirable. You came close to reaching your sales
targets, but you did not meet them, and you are hoping to still get the merit
pay raise to be determined as a result of your performance appraisal. You do
not really like your manager, but you are hoping to advance in this
company, and being on your manager’s good side may be a good idea both
for your current performance appraisal and for your future in this company.

• You are now at a meeting with your manager and a group of employees.
Your manager is giving financial information to all employees about
different markets. Yet, some of this information is inaccurate, which
could lead to wrong pricing decisions and loss of money by the
company. If you correct him, though, he would most likely get upset
with you because he does not like being corrected. Would you correct
him? How and when?

• Today is also the day on which your manager’s boss is collecting
information about your manager’s leadership style, so that they can give
him a 360-degree appraisal. They assure you that your comments about
your manager will remain confidential, but the nature of your thoughts
is such that he probably would guess you are the person who made those
comments. Specifically, you think that your manager takes offense
easily, has a bad temper, and could be more effective in time
management. Would you share your thoughts with your manager’s
manager?

• You are now at the coffee shop and grabbing a cup of coffee and some
pastries. You notice that they have almond coffee cake, which is your
manager’s favorite. Would you pick some up for your manager?

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I N D I V I D U A L E X E R C I S E

Map Your Social NetworkAdapted from information in Carpenter, M.A., &
Sanders, W.M. (2007). Strategic Management. Upper Saddle River, NJ: Pearson
Education; Wasserman, S., & Faust, K. (1994). Social network analysis:
Methods and applications. NY: Cambridge University Press; Watt, D.J. (2003).
Six degrees: The science of the connected age. NY: W.W. Norton & Company Ltd.

• Step 1: Think of a specific objective you have at work or school that
involves other people. Once you have thought of an objective, jot it
down.

• Step 2: Use Figure 13.15 to list 5 to 15 people at your school or in your
professional network who you have regular contact with and who are
relevant to the objective you identified.

• Step 3: Rate how tightly connected you are with the people in your
network by placing a check in the corresponding column (barely
connected, loosely connected, somewhat connected, or tightly
connected) on the right-hand side of their name.

• Step 4: Circle the name of anyone who has introduced you to 4 or more
new people since you have known them.

• Step 5: In Figure 13.16, place a check mark in the intersecting box of
people that know each other. For example, if person 1 knows person 2,
put a check mark under the 2 at the top of the table. Continue to do this
throughout the grid (grayed boxes should be left blank).

• Step 6: Analyze your network using the guidelines on the following
calculations.

• Step 7: Consider ways to strengthen your network.

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13.9 Exercises 667

Figure 13.15

Chapter 13 Power and Politics

13.9 Exercises 668

Chapter 13 Power and Politics

13.9 Exercises 669

Figure 13.16

Let’s see how your social network adds up:

Calculating Network Size

The number of people you listed in your own network for this situation

N = _____

Calculating Network Density

It is important to understand what the maximum density of your network is.
This refers to how dense it would be if everyone in your network knew each
other.

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13.9 Exercises 670

(N * (N − 1)/2 = M) or ( _____ * ( _____ − 1)/2 = M)

M = _____

Total number of checkmarks in Figure 13.16, which represents number of
relationships among people in your network.

C = _____

Density of your network (will range between 0 and 1)

C / M = D

_____/_____= D

D = _____

Network Size

N = number of people in your network. The more people in your network,
the greater the amount of information and possibly access to greater
resources you have. We stopped at 15 people but many individuals have
more people in their network than 15.

Network Strength

The strength of your network is also important. You can talk about this in
terms of percentages of your relationships. What percentage are very tightly
connected? Close? Somewhat connected? Or barely connected?

• ___% Tightly Connected
• ___% Somewhat Connected
• ___% Loosely Connected
• ___% Barely Connected

For most people, it would be hard to manage a huge network where all the
ties are very close, just by virtue of the amount of time and energy it takes
to satisfy the conditions for closeness.

Identifying Central Connectors

Count how many names you circled in step 4. Each of these individuals plays
a special role in your network as they are central connectors who serve to

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expand your network by introducing you to new people. If you are also a
central connector, this can be a benefit to assessing information as long as
you are able to keep the network from distracting you from your work.

Network Density

Network density is important. When a person’s network density is 1.0 that
indicates that everyone in the network knows everyone else. Whether this is
good or bad depends on a few things. For example, if everyone in your
network has additional networks they belong to as well, you would be
playing a central role in their networks and you would be a boundary
spanner. But, if they also have high network density, the odds are that no
new information is getting introduced into your group. You are basically a
closed loop in which the same people interact with one another, and it is
challenging to assess changes in the environment or to be innovative.

Social networks change over time depending on your tenure in an industry
or company. The longer you have been in a given industry, the more likely it
is that you will see your network size begin to shrink and become more
dense.

Consider factors relating to power and influence and how you might go
about strengthening and increasing the size of your network.

What are the pros and cons of doing so?

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G R O U P E X E R C I S E

In a group, analyze the following individuals in terms of their potential
power bases. The first step is to discuss which types of power a person with
the job listed on the left-hand column could have. If you can think of an
example of them having a type of power, write the example in that column.

T A B L E 1 3 . 1

Legitimate
power

Reward
power

Coercive
power

Information
power

Referent
power

Flight
attendant

Computer
programmer

Executive
assistant

Manager

Mailroom
person

Customer
service
representative

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13.9 Exercises 673

Legitimate
power

Reward
power

Coercive
power

Information
power

Referent
power

CEO

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13.9 Exercises 674