Page 198 - DMGT519_Conflict Management and Negotiation Skills

Conflict Management and Negotiation Skills

Notes
Box 9.1: Lesson from the Gift of Maggi

Why are relational norms important? Too often people, especially novice negotiators, view a
negotiation situation in a purely exchange mode or one-time interaction, without regard for the
future relationship between the parties. Therefore their objective is to win at all costs, to maximize
the gain in a purely distributive bargaining context. This one-time “car-buying” situation may
indeed be valid in many negotiation situations, but in many other situations it is not a valid
assessment because the parties have a future relationship, at least to some extent. Organizational
examples of relational norms include the common ones between managers, suppliers, co-workers,
and vendors. Two major organizational developments in the past 20 years have contributed to
the increased importance of relationships in negotiations: First, “flatter organizations”—those
with fewer levels between president and the entry level—have become more common. Within
flatter organizations, employees are given greater decision-making autonomy, and thus are
increasingly empowered to negotiate with others within the organization. Second, organizations
have become more inclined to develop partnerships with suppliers and other outside
organizations, and therefore are more inclined to maintain long-term relationships. Due to
these developments both within and between organizations, relational norms are more important
today than in the past, primarily for three reasons:
1. Future negotiations with the same party are often anticipated, and therefore negotiators
will seek to avoid harming the future relationship between the parties. Thus the relational
norm effectively moderates the exchange relationship.

2. People from other organizations expect negotiated “favors” to be repaid at a later date.
3. Trust is critical to a long-term relationship, so agreements must include less nitpicking,
fewer what-ifs or contingency clauses. A higher level of trust is expected.

9.7 Fairness Norm

According to Richard Shell, professor of legal studies and management and academic director of
the Wharton Executive Negotiation Workshop, the negotiation process involves one of human
nature’s most basic psychological drives: the need to maintain an appearance of consistency and
fairness in both words and deeds.
Psychologists call this need to appear reasonable “the consistency principle.” Negotiations of
all types provide situations in which people seek consistency due to the high level of uncertainty.
The use of a norm to provide consistency in a bargaining situation can give a negotiator what
Shell calls “normative leverage.” Negotiators who correctly anticipate the other party’s norm
and therefore frame their proposal within that context can gain an advantage.

Negotiation researchers have concluded that the fairness norm may be the most commonly
employed norm. It includes four major variations: (1) the equality norm, which negotiators

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