28
Manage Conflict through Negotiation and Mediation
M. SUSAN TAYLOR AND ASHLEY FIELBIG
Managers’ often find that their formal authority falls far short of their responsibilities and their success is dependent on the actions of others outside the chain of command. Though people in this predicament may yearn for more control, there is often no practical way to follow the textbook advice to match authority with responsibility. “Indirect management” is the name we give this increasingly important phenomenon of concentrated responsibility but shared authority and resources. It calls for a very different approach from traditional line management. (Lax and Sebenius, 1986)
Managers function in an increasingly complex world where competition is intense and global for virtually all product or service lines. Their revenue generating initiatives require cross-unit cooperation and coordination. In addition, the structural parameters or procedural precedents that might assist in the implementation of revenue generating initiatives are often absent or inconsistent. Furthermore, teams of employees who require and demand substantial self-determination in order to perform their jobs effectively, increasingly staff manager’s work units. Factors such as scarce resources, ambiguous lines of authority, conflicting goals, and high levels of interdependence generate a perfect set of conditions for conflict in the managerial job.
What exactly is meant by the term conflict? Conflict is the process that occurs when one party perceives that another has frustrated or is about to frustrate one or more of its goals or “interests” as they are often referred to in the applied negotiations literature (Fisher, Uri, and Patten, 1981; Thomas, 1976). In which aspects of a manager’s job might we expect conflict to emerge? Both research and experience show us that conflict frequently occurs across many aspects of managers’ jobs, for example in interactions with their own managers, dealings with peers or associates, discussions with the employees they manage, and in their need or desire to “shore up” their formal authority in the organization. Therefore, managers face and must attempt to resolve conflict on virtually a daily basis. Perhaps not surprising then, Fred Luthans and his colleagues have found that managing conflict between employees ranked 5th on a list of 12 managerial activities found to be most important to managerial effectiveness (Luthans et al., 1988).
This chapter focuses on the manager’s role as conflict resolver. It is based on the meta-principle that negotiation and mediation processes, when used appropriately, enhance managers’ effectiveness in resolving many of the conflicts that confront them at work. Although written from a normative perspective that is based on research findings, the chapter also explores descriptive information concerning what is known about the ways managers tend to deal with conflict.
Past research has identified three ways in which conflicts or disputes may be resolved: (1) interests, (2) rights, and (3) power (Ury, Brett, and Goldberg, 1988). First, parties may seek to reconcile conflicts by finding solutions that will appeal to the most important interests of most of those involved in the dispute. Ury et al.’s second way to settle disputes is focused on “rights”. In this method, managers determine whose “rights” they want to satisfy, through the assessment of some independent standard. The standard must be legitimate for all involved. Examples of such standards include contracts, or even socially accepted norms such as reciprocity and precedence, or existing guidelines created by the organization to resolve such disputes. The third approach towards conflict resolution focuses on power. Parties may attempt to resolve conflicts according to who is more powerful, or influential in the organization. Power can be defined as the ability to force through ordering or suggesting the other party to do things he/she would not otherwise do. Unfortunately, however, as Ury et al. (1988) observes, power differentials are generally difficult to reconcile without a costly “test of wills.”
Fortunately, the work of Ury et al. (1988) also provides some assistance in assessing the effectiveness of conflict resolution methods.
One method of assessing the effectiveness of different conflict resolution methods is to consider the “costs of disputing.” Costs of disputing include: (1) various transaction expenses, including those that are economic, psychological, and time based; (2) parties’ satisfaction with the fairness of the outcomes and of the resolution process in general; (3) the effect of the resolution on the parties’ relationship, particularly on their ability to work together on a day-to-day basis; and finally (4) the likelihood of conflict recurrence, either between the two parties or between one of them and another party. Once assessing method effectiveness vis-à-vis these four criteria, Ury et al. (1988, p. 15) concluded that: “in general reconciling interests is less costly than determining whose rights are more clearly supported by the contract or precedent, which in turn is less costly than determining who is more powerful,” a process likely to result in the drawn-out battle of wills mentioned earlier. However, rights and power may sometimes be used to enhance the effectiveness of interest reconciliation by setting boundaries around what will be determined through the reconciliation of interests. Thus, a sales manager might well use his or her legitimate power (see Chapter 19) to establish monetary limits on the size of the account that sales representatives involved in a dispute about account ownership might resolve through negotiation or to develop a process determining the percentage of revenues that particular divisions might lay claim to when revenues exceed 10 million. Overall, evidence seems to support the relative effectiveness of reconciling parties’ interests as an appropriate conflict resolution method for managers. This conclusion brings us to the topic of negotiation.
Negotiation is a frequently applied technique for reconciling interests. It may be extremely useful to managers when their perceived or actual interests are directly in conflict with interests of others in the workplace. Others include managers’ employees, their bosses, and those outside their chain of command, for example the support staff charged with the operations of various management systems in the organization, for example budget, human resources, etc. As Lax and Sebenius (1986, p. 2) have noted, “Negotiation is a useful skill for important occasions, but it also lies at the core of the manager’s job. Managers’ negotiate not only to win contracts but also to guide enterprises in the face of change.”
Negotiation is defined as “the situation where parties, with some apparent conflict, seek to do better through jointly decided action than they could do otherwise” (Lax and Sebenius, 1986, p. 12). There are essentially two types of negotiation: (1) distributive or win/lose and (2) collaborative or win/win. The body of research on the nature and effects of negotiation is quite substantial. Because collaborative negotiation is best used in situations: (1) where a long-term, rather than a short-term relationship exists, or is envisioned between parties; (2) when those involved share important values or principles that shape their goals in the negotiation; and (3) where there are a number of different issues at stake, such that the likelihood of creating a situation of joint gain is higher, we strongly argue that this type of negotiation is better than distributive in resolving the kinds of conflict in which managers are frequently involved. Thus, in this chapter, we provide a number of principles about the nature of collaborative negotiation and also generate several recommendations for enhancing managers’ negotiation effectiveness.
Negotiation principles and recommendations
Which negotiating styles of behavior tend to enable managers to “do better through joint action?” Work by Fisher, Ury, and Patten (Fisher, Ury, and Patten, 1991) at the Harvard Negotiation School have found that higher joint gains frequently result from collaborative negotiation focused on achieving the interests of both parties. Principles of collaborative negotiation include:1. Parties’ should engage in a candid and open exchange of information about both their interests.
2. Each party should intend to satisfy the other’s interests to some degree such that the focal party’s (the manager’s) interests are satisfied to the greatest extent and the other party’s interests are satisfied at least to an acceptable degree.
3. Both parties should be creative in identifying many possible options that might satisfy the other party’s interests.
4. Parties should rely on external standards, facts, or criteria to resolve disputes over the value of various options (e.g. the use of the Blue Book to determine used car values).
5. Parties should identify and try to enhance a “BATNA,” the best alternative to a negotiated solution, in order to enhance their ability to “do better through negotiating,” than through other methods, because they will not be forced to accept an undesirable offer simply to reach agreement. Thus the key idea of a BATNA is to have a very strong alternative that you can move to if your existing partner does not meet your important interests or goals. During negotiation, parties should communicate with one another in ways that enhance their relationship by focusing on resolving the issues, rather than singling out one another for disdain and contempt (see also Chapter 18), and working hard to improve their relationship so that negotiation is easier for subsequent conflicts; at the very least, the communication used in negotiation should not worsen the relationship.
Recommendations for negotiating collaboratively
1. Take stock of your own interests to make sure you understand and can prioritize them. What is it you want out of this negotiation? Prioritize your interests so you will be ready to make some tradeoffs if necessary. Set higher goals for what you would like to walk away with - research shows they tend to yield higher gains.
2. Begin the bargaining with a positive overture, perhaps by making a small concession - then reciprocate the other party’s concessions but not at the cost of abandoning your own.
3. Look beneath the other party’s behavioral tactics (bluffing, silence) and try to determine his or her strategy. Even threats and power plays can be intended to guide you toward a mutually acceptable agreement. Be sensitive to this and follow it if it is beneficial to your interests.
4. Do not allow accountability to your constituents (e.g. your manager or your employees) or surveillance by them to spawn highly aggressive competitive bargaining; it often spirals quickly out of control, making joint gains impossible.
5. If you have power (whether greater expertise, legitimate, referent, etc.), in a negotiation, use it - with specific demands, mild threats, and persuasion - to guide the other party toward an agreement (see also Chapter 19).
6. Be open to accepting third party assistance to reach agreement (more on this below).
7. Attend to the negotiation environment. Be aware that your behavior and power as well as that of the other party are altered by it. Opponents who come from environments of scarce resources are often rewarded for highly competitive and aggressive bargaining. Anticipate this and strive to protect your interests (Wall and Blum, 1991).
8. Negotiation tends to be more efficient (faster, more likely to reach agreement) and more likely to yield agreements in the interests of both parties (collaborative negotiations) when they have positive working relationships. Thus, strive to develop a positive working relationship with your negotiation partner. Design situations in which you both depend on one another for help across a number of issues and opportunities for action. When working relationships are already strained, suggest problem-solving workshops to improve them before beginning the negotiations.
9. Teams of negotiators often respond more competitively than do individuals. Be alert to the possibility that when teams are involved, contentious behavior is more likely to spiral and escalate the conflict. Also internal conflict within a team will lower the likelihood of reaching agreement between the two parties. Strive to minimize within team conflict before between-group negotiations start (Chapter 18). Try to align the thinking on your own team before starting. Note that you may have to use coercive power to obtain compliance from members who are less attached to the group, while conciliation techniques - explanation, reciprocal favors, concessions - often work for members with a greater sense of group commitment (see again Chapter 19).
10. Compared to face-to-face negotiations, e-negotiations (computer mediated) generate: (a) more multi-issue offers, (b) less rapport in the relationship, (c) mixed findings on the creation of joint gain, meaning some studies show better results with face-to-face negotiations and some show no difference between face-to-face and e-negotiations, and (d) more equal gains for both parties. However, by enhancing e-negotiations with schmoozing, such as brief personal disclosure and short telephone calls prior to negotiations, negotiators are able to decrease the use of aggressive strategies that reduce their outcomes. In addition, schmoozing tends to: (a) increase cooperation, trust, and relationship quality; (b) improve joint outcomes; and (c) reduce the likelihood of impasse (Thompson and Nadler, 2002).
Not only do managers have to resolve conflicts where they are directly involved as a participating party, but they often have to resolve it when they are indirectly involved and affected, for example the case where two employees from the manager’s work group are engaged in a dispute. How do managers respond in these situations? Research by Sheppard (1984) indicates that they choose one of four third party modes of conflict resolution based on four criteria: (1) efficiency: whether the action taken will resolve the conflict with a minimal amount of resources, for example their time, employees’ time, expense, etc.; (2) effectiveness: whether the action will insure the conflict is solved well and remains solved (see Chapter 23) - for example, using a mode of resolution that involves listening to all parties’ views, and then brainstorming an appropriate solution minimizes the re-emergence of the conflict; (3) participant satisfaction: whether the action will insure that parties are satisfied with the outcome - one way joint satisfaction is achieved is by letting both parties present their views and then inventing a solution that satisfies both of them; (4) fairness: whether the action will solve the dispute in a way that the parties believe is fair according to some external standard. Research has shown that when choosing which actions to take, managers typically weight efficiency and effectiveness higher than the other criteria. Furthermore, research shows emphasizing efficiency and effectiveness encourages managers to attempt to take control of the conflict situation, a situation we examine below that suboptimizes potential outcomes to the parties themselves and their organization.
Sheppard (1984) proposed a four-fold classification system for the modes in which third parties, such as managers, may intervene in conflicts. His system is based on high and low levels of procedural and outcome control by the third party (the manager in our case) and is supported by at least two studies. The classification system and study results are shown below:1. Inquisitorial Intervention (High process control/high outcome control) - in this mode, managers actively control the discussion between parties, frequently directing what is said, and they control the outcome by inventing and enforcing a solution that they believe will meet both parties’ needs, much like an inquisitor or benevolent parent. Sheppard and his colleagues (Sheppard, 1984; Lewicki and Sheppard, 1985) found that the managers tend to use this method of intervention most frequently.
2. Adversarial Intervention/Judge (Low process control/high outcome control) - in this mode, a manager decides how the conflict will be resolved and enforces the resolution if needed. However, the manager does not try to actively control the process. Rather he or she allows the parties to determine how they wish to present information about the conflict, listens to the information presented and then makes a decision. This style was the second most frequent used by managers.
3. Avoiders, Delegators, Impetus Providers/Motivating (Low process control, low outcome control) - for this mode, a manager may totally ignore the conflict, delegate it to others such as human resources or lower level managers to resolve or try to motivate the parties themselves to resolve it by asking, “What is going on here?” and then signaling the parties that strong punishment will be forthcoming if they don’t solve their own dispute. This was the third most common mode of third party intervention.
4. Mediation (High process control/low outcome control - in this mode a manager controls the process through which parties reveal information about their conflict but does not attempt to control the decision concerning how the conflict will be resolved. Mediation was virtually unused by the mangers studied.
What then are the effects of these different interventions?
Research on the effects of mode usage indicates that a greater reliance on the mediator mode of conflict resolution is likely to enhance managers’ effectiveness the most in resolving third party conflicts. Managers’ use of a particular mode has important implications, not only for the content of the resolution obtained, but also for the disputing parties’ perceptions of the fairness of the outcome and the procedure used.
The bottom line is that those managers who use the mediator mode tended to produce compromise outcomes that incorporate at least some of each party’s interests, while those who used other modes, for example questioning parties, opposing their perspectives of the conflict, threatening to resolve it unilaterally if they did not, etc., tended to produce outcomes favoring one of the conflicting parties over the other (Karambayya and Brett, 1989). Not surprisingly, employees were more satisfied when their interests were either favored in the outcome, or when they experienced a compromise outcome. Further, those who experienced the mediator mode of third party resolution tended to perceive that the conflict outcome, resolution process, and mediator were fairer than did those who experienced the other three modes of inquisitor, judge, or the combined avoiding/delegating /providing impetus mode. Parties’ fairness perceptions are important (see Chapters 14 and 21) because they have been shown to impact the effectiveness of conflict resolution, that is, to strengthen the relationship between parties, and aid in preventing a recurrence of the conflict (Karambayya, Brett, and Lytle, 1992). Therefore, even though managers show a tendency to resolve conflict in ways that allow them greater control over the outcome implemented, such as inquisitor or judge, these are not the best approaches. Instead, using these modes increases the risk that managers will produce solutions that undermine the relationship between parties. This tends to erode the conflict resolution and to prevent the parties themselves from working together effectively to resolve their own conflicts in the future.
Why do managers use modes of conflict resolution other than mediation, even though, as discussed above, they tend to be suboptimal. Modes that provide managers with greater control over the outcome of the conflict, such as inquisitor and judge, are more likely to be used in cases where time pressures for settlement are severe and the settlement will have broad implications for the resolution of other disputes in the work unit or organization. Other factors increasing managers’ tendency to take greater control of outcome of the dispute include: whether the manager will have to interact with disputing parties again in the future (if yes, the manager will assume greater control); whether the manager possesses formal authority over the conflicting parties (i.e. their own employees rather than peers - if yes, the manager will assume greater control); and the amount of experience a manager has supervising employees - less experienced managers assume greater control (Lewicki and Sheppard, 1985; Karambayya et al., 1992).
Two other overarching explanations for managers’ tendency to suboptimize conflict resolution in cases where they are the third party only indirectly involved are, first, that they tend to attribute the cause of the conflict to parties’ personality dysfunctions, rather than to differing goals or interests, and then assume it is their job to intervene in conflicts quickly and directly. These factors are likely to discourage the manager’s use of a mediating style for conflict resolution (Kolb, 1986; Kolb and Sheppard, 1985). Finally, managers are unlikely to rely on mediation to resolve third party conflict because they lack the basic behavioral skills to do so. Thus, we discuss the types of mediation behaviors that managers may use and which works best, when.
Research has confirmed three types of mediator behavior - diagnostic (formerly called reflexive by the researchers, Kressel and Pruitt, 1985), contextual, and substantive interventions. However, it is important to note prior to discussing these that employees’ reactions to managers’ attempts to mediate conflicts at work tend to be more positive when the disputing individuals are allowed some time to resolve the conflict on their own, without mediation. Quick intervention in a conflict between employees by a manager attempting to mediate is likely to violate the employees’ sense of due process, their perceptions of fairness, and, subsequently, the longevity and effectiveness of any agreement reached (Conlon and Fasolo, 1990).
That being said, the following types of mediation interventions are applicable at different points in the mediation episode; thus a mediator might use all of them in a single mediation or simply one or two, based on his or her judgment that the parties require more or less assistance in resolving their own dispute. We begin with “Diagnostic” mediation interventions as they tend to be used first in a mediation episode.
Diagnostic interventions occur early in the mediation process and involve the manager’s attempt to become familiar with the conflict between the parties, bond with them, and establish ground rules for parties’ behavior that will prevent the conflict from escalating until the manager understands it better. The manager then attempts to diagnose the nature of the conflict and the types of tactics that are likely to result in agreement. Although it is commonly accepted that mediators must be neutral and disinterested in the conflicts of the parties they assist, mediator neutrality does not appear to be as important as previously believed. Many times mediators are chosen because of their relationship with one party (e.g. labor mediation). Thus, they are able to influence the conflict because they have an interest in the way it is resolved.
Contextual interventions consist of managers’ attempts to impact the process through which the two parties interact with one another to discuss, negotiate, and resolve their conflict. It does not address the content of the conflict resolution but instead focuses on issues such as climate, structure, conflict within each party’s team, etc. At the most basic level, contextual interventions are intended to encourage parties to persist in their efforts to resolve the conflict, help them to engage in problem solving and get them to the point of developing their own solution. Thus, this type of intervention may address issues of poor communication, facilitate effective discussion sessions that diffuse anger and keep parties focused on the problem that faces them, and perhaps even establish joint fact finding so that both parties will accept the results.
Substantive interventions concern how the mediator deals directly with the issues in conflict between the parties. These behaviors tend to occur later during the mediation process and include the exploration of potential compromises, the suggestion of possible agreements, and assistance in evaluating the pros and cons of various proposals.
In general, research (Lim and Carnevale, 1990) indicates that all three types of intervention are effective with one exception. At very high levels of conflict, only the diagnostic intervention remains effective, probably because it helps build trust between the mediator and parties and provides both with a better understanding of the nature of the conflict. However, at very high levels of conflict, both contextual and substantive interventions tend to decrease parties’ likelihood of reaching agreement, probably because the parties view them as attempts to undermine their key interests.
In addition, there are active versus passive approaches that underlie the three interventions discussed above (Lim and Carnevale, 1990). These approaches refer to the mediators’ level of assertiveness or forcefulness in enacting any of the three types of interventions. Mediators often exert considerable pressure on the parties to agree to specific proposals, particularly in cases where the mediator’s own interests or values are involved, he or she feels pressure to avoid the high costs of litigation, or very high levels of tension or hostility exist between parties. In general, research indicates that an assertive mediator approach is positively associated with the incidence of settlement rather than a stalemate. Thus, mediators should tend to use all three interventions in an assertive, rather than passive manner.
Below is a summary of several principles from managers’ use of third party conflict resolution modes at work:1. When managers choose to mediate the dispute between parties at work, employees or peers, many favorable results occur from the mediator approach. They include high, shared perceptions of fairness in the process, an acceptance of a proposed settlement, and a settlement that reflects the interests of both parties. In addition, parties’ fairness perceptions positively affect the nature of their relationship with the mediator, and decrease the likelihood that conflict will recur.
2. Nevertheless, managers show strong tendencies to question parties about the causes of the conflict, to challenge their approaches to resolving it, and to unilaterally decide the dispute if parties can’t resolve it themselves - all behaviors that deliver poorer results than does well-implemented mediation.
3. Managers’ tendencies to unilaterally solve disputes between employees increase when time is scarce, the conflict has implications for the rest of their unit or for the organization, and disputing parties will not have to work together in the future.
Thus, we recommend that managers interested in pursuing a mediation mode of conflict resolution should act assertively and use:1. Diagnostic interventions that increase each party’s trust of the manager’s fairness, also increase the likelihood of the manager’s identifying the underlying causes of the conflict, and his or her display of behaviors most likely to result in settlement.
2. Contextual interventions that facilitate communication between parties, help to diffuse anger and other intense emotions, assist in identifying the most important issues of dispute, provide for the systematic discussion of issues and incremental agreement, and develop a joint, unbiased process for locating information needed to resolve the conflict.
3. Substantive interventions that propose solutions to the conflict that may have escaped the attention of the parties while also assuring them that the choice of solutions will be left up to them.
4. Contextual and substantive interventions to first address the within-group conflict when it is internal to the organization within groups of employees.
There are notable exceptions to the recommendations provided within this chapter for enhancing the effectiveness of managers’ negotiation and mediation skills. For negotiations, the recommendations are limited to parties who rationally seek out solutions that will enhance and maintain their own interests. When conflicting parties act irrationally by showing little concern for important interests, earlier recommendations provided in the negotiation section of this chapter are unlikely to prove effective. Irrational behavior could be inspired by intense anger or latent hostility, drug or alcohol abuse, psychosis, or constraints placed on the party by their constituents. An example of negotiating with an irrational party is provided in the case illustration below and the sequel that follows. In a similar vein, when negotiators hold different principles about what constitutes fairness in negotiation procedures and outcomes, prior negotiation recommendations made in this chapter are unlikely to result in agreements. Such differences may result from past negotiation experiences that were quite distributive, i.e. win-lose of differences in equity sensitivity. In any event, when differences in definitions of fairness vary between parties, they often become hostile and rigid, and are unwilling to concede any option that is acceptable to the other; thus no agreement is reached and a stalemate generally occurs as well as a decrease in the quality of the relationship (Pruitt, Pierce, Zubeck, McGillicuddy, and Welton, 1991).
In the case of the manager as mediator, it is important to realize that most types of mediation behavior tend to be more effective under moderate levels of conflict, rather than extremely high or low levels. At very high or very low levels of conflict, the probability that either contextual or substantive mediation interventions will lead to an agreement diminishes rapidly (Kressel and Pruitt, 1985). Similarly, very low levels of conflict also tend to weaken the positive settlement effects of mediation interventions. Mediation is likely to result in cooperation and agreement by the involved parties only when they are motivated by sufficiently high levels of conflict to bargain and resolve their conflict (Wall and Blum, 1990). Finally, employees are likely to react more positively to managers’ mediation attempts when they are first allowed some time to resolve the conflict on their own. Quick intervention by a manager attempting mediation is likely to violate the employees’ sense of due process and their perceptions of fairness. Subsequently, it is also likely to affect the longevity and effectiveness of any agreement reached (Conlon and Fasolo, 1990). Having examined some possible exceptions or boundary conditions to mediation we further illustrate the application of the concepts through the use of a case study and its sequel several years later.
Negotiating with irrational folks: the case of Jay Leno’s agent
An excellent illustration of what happens when rational managers attempt to negotiate conflicts with irrational parties is provided in the book The Late Show. The Late Show discusses the David Letterman and Jay Leno battle for late night TV. According to the author, Bill Carter (1994), this negotiation was highly influenced by the persona of Leno’s long-time agent, Helen Kushnick. It was Helen who helped Jay, not initially liked or favored by NBC Tonight Show host Johnny Carson, attain an edge over Carson’s preferred choice, David Letterman. Realizing that NBC affiliate stations would have considerable influence in any decision about a new host for the Tonight Show, Kushnick convinced Jay to conduct several cross-country tours where he appeared live on many NBC affiliates and devoted considerable time to building rapport with their owners and managers. The support of the NBC affiliates, as well NBC executives’ belief that Jay’s personality and style of comedy were better suited to a long-term run on NBC’s Tonight Show than were David Letterman’s, ultimately clinched the deal for him. On May 16, 1991, Leno signed a lucrative agreement making him host of the Tonight Show on the departure of Johnny Carson. This contract also named Helen Kushnick as the executive producer on the show.
An understanding of the negotiations that unfold below requires some background on Helen Kushnick’s negotiation style, personality, and relationship with Jay Leno. Helen’s style was one of extreme contending. She had experienced much sadness during her adult life including the death of one of her twins. Her only son died while still an infant as the result of an AIDs infected blood transfusion. In 1989, shortly after her son’s death, her husband died from colon cancer. Furthermore, Helen was ill with breast cancer and was undergoing chemotherapy at the time of the negotiations. On his deathbed, Jerry Kushnick, Helen’s husband, asked Jay Leno to take care of his wife and his 11-year-old daughter. Jay consented and then publicly repeated his promise at the funeral. According to her close associates, Helen’s style never faltered in the face of these overwhelming obstacles, it just became more intense. Carter noted, “She didn’t become beaten or bowed; she just became more determined, more driven, more ferociously focused than ever before” (Carter, 1994, p. 171). Angered by Johnny Carson’s rejection of Jay, Helen secretly started a rumor that NBC was going to drop Carson for Jay. This rumor caused incredible tension between the network and Carson for a period of time before his retirement.
Once Jay Leno took over as Tonight Show host in 1991, NBC executives were surprised to find that he appeared stiff and uncomfortable in the host slot. He was without the spontaneity and humor that had consistently characterized his guest spots. Many attributed this change in style to Helen’s influence on the show as executive producer. Angered by Carson’s rejection of Jay and his refusal to invite Jay to appear on any of the final shows before his retirement, Helen repeatedly rejected NBC executives’ request that Jay make a complimentary statement about Carson and his career on Jay’s first show. The absence of such a statement was conspicuously noted in all the press given to Jay’s opening and a source of embarrassment to him and to NBC. Helen went on to attempt to choreograph Jay’s movements on the set, making them appear stiff, formal, and affected. She placed the blue-collar comic in expensive designer suits, and erupted in a tirade of name-calling and endless criticism of anyone who tried to question these changes. Soon her attacks extended to Jay himself; she publicly and privately belittled him and attacked his comedy and his intelligence. Jay never responded to the attacks or even appeared embarrassed by them. However, many on the Tonight Show felt that the effects of Helen’s attacks were apparent in Jay’s shaky appearance on the set, particularly during the opening monolog. Further, Helen undertook a bloodletting campaign to protect Jay from the competition by blacklisting the signing of any guests who appeared on Arsenio Hall’s show. Disliking Jerry Seinfeld, one of Jay’s closest friends, she denied Seinfeld’s request to use the Tonight Show set. She further denied the scheduling of a surprise guest appearance by Jay on Seinfeld’s own show. She even blacklisted Seinfeld himself, the host of one of NBC’s most popular shows, from the Tonight Show until NBC executive Warren Littlefield personally intervened.
Time and time again during this period, Helen ignored the pleas of NBC executives to tone down her “Winner Take All” approach. Her approach was belittling the network’s image and its long-term relationships with distinguished guests. However, Helen refused, and actually intensified her destructive activities. She was confident that her hold on Leno would prevent NBC from ever firing her. She believed if she was fired Jay would leave the show as well. At first she was right. Ignoring NBC’s multiple requests that Helen be fired, Jay instead asked the network to write out a list of what was acceptable for Helen to do and not do. Shortly afterward in the middle of a meeting, the executives and Jay watched as Helen’s form morphed from cool, controlled, and rational into a lotus form accompanied with screaming and rocking. Warren Littlefield, the President of NBC, then told Leno that she was totally out of control and had to go. Still, Jay was reluctant to cut the 17-year bond between them. Leno refused to assure Littlefield that he would show up for work if Helen were fired. Finally, Jay learned that Helen had started the rumor that NBC would replace Carson with Leno. This was a rumor he had personally denied starting, even when speaking to Johnny Carson himself. His support for Helen began to crumble. He signaled Littlefield that he would do the show, with or without Kushnick.
On Monday morning when Helen arrived for work, the network handed her a letter of dismissal. Still, Jay refused to support the action, issuing press releases that he supported Ms. Kushnick. He hoped to duck the conflict until after that day’s show was taped, but Helen confronted him in his dressing room. She was raging and screaming so loud that she could be heard throughout the set. When these tactics failed to work, she came at Leno with emotion, arguing that he had to quit the Tonight Show for Sarah, her daughter’s sake. At this point, even Jay had had enough. He broke a glass cover on his desk to stop the tirade, refused to quit, and went on to display a dazzling performance on that night’s show. Helen stormed off the studio lot shortly after the filming began, leaving Jay’s direction in the hands of others. As soon as she left, NBC barred her from the set, posting little photos of her at all the studio gates.
Helen Kushnick’s behavior provides a perfect illustration of the way in which irrational negotiators use threats and intimidation to obtain their own way and ignore even courteous entreaties from the other party to maintain a long and valued relationship. Clearly unable to see the impact of her behavior on the interests the network held supreme, Helen simply grew more and more confident that she could do whatever she pleased. She believed because she held power over Jay Leno, the network star, she could do whatever she wanted regardless of no matter how negatively it impacted her long-term interests or those of the network. Time and time again, she chose to satisfy short-term emotional needs, rather than preserve the long-term interests and relationship at stake. As shown here, neither collaborative win-win nor contending win-lose approaches tend to work with irrational negotiators. Instead, a party caught up in this kind of exchange is generally better off to find a strong BATNA (meaning the “Best Alternative to a Negotiated Agreement,” see Negotiation Principles), or satisfying alternative, and exit the relationship without agreement.
Sequel: Jay Leno’s own upcoming departure from NBC
Fast-forward 16 years after Jay Leno’s succession to Johnny Carson in 1992. We find an incredibly successful comedian whose own upcoming succession by Conan O’Brien in 2009 appears right on target. Jay exemplifies the same workaholic he has been throughout his reign. However, he apparently learned a great deal from his own gut-wrenching ascension to the primer NBC Tonight talk show host at the expense of David Letterman, who subsequently went to CBS where his current contract expires in 2010. In 2001, however, when Jay’s late night coworker, Conan O’Brien, expressed his desire to work at an earlier hour, Jay was at one of the many highpoints in his ratings and career. What might have evolved into another fistfight negotiation that took no prisoners at NBC instead was easily averted with a deal that focused on the needs and interests of both parties. Jay got a contract for another five years after promising to step down in time to make way for Conan in 2009. While Conan, despite his eagerness, agreed to sit tight in his late night position for another half decade in exchange for a guaranteed two-year stint at the prime NBC Tonight Show spot. By all accounts, this friendly, collaborative agreement was largely due to the graciousness and hard-earned negotiation insights of Jay himself. He was heard to remark that during his earlier battle with Letterman for the Tonight slot, “A lot of good friendships were permanently damaged.” “Quite frankly, I don’t want to see anybody go through that again” (Sheppard, 2004). In fact Jay termed the new deal “the world’s easiest negotiation” and followed with “I like what I do. They were very generous.” In fact, Leno neither sought nor received an ownership stake in the show, even though Letterman and Carson have/had partial ownership. Instead, he cited his loyalty to Jack Welch, then CEO of General Electric, parent company to NBC, commenting, “I’m a handshake guy. I work for Jack. He was loyal to me, and I am to him” (Carter, 2001).
As the transition date, expected to be May 2009, approaches, Jay Leno at 58 is at the top of his game. He’s the reigning champion of late night television and continues to report that he is leaving NBC as promised. However, Leno has given no indication that he will do anything but continue to be a comedian, stating, “What I do is tell jokes at 11:30 at night.” Meanwhile senior executives at ABC, Fox, and Sony Studios have begun to circle Leno, making discrete, but highly lucrative, bids that will allow Leno to do what he does and enjoys best. His attorney, Kenneth Ziffren, states, “Jay, will of course, honor his contract obligations to NBC.” “Jay isn’t talking to anyone about anything and won’t be until it’s contractually proper” (Carter, 2008).
Jay Leno remains one classy, incredibly talented comedian who learned the pitfalls of irrational negotiations the hard way from his bulldozer agent Helen Kusnick. As a result he is now an expert negotiator in his own right. We can certainly expect that his next deal will be a very profitable one, yet one also centered on his primary interest, “telling jokes at 11:30 at night.”
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Negotiating an apartment rental in a college town: an exercise stressing the principles of and recommendations for collaborative negotiation
Introduction. This scenario asks you to adopt a collaborative negotiation style and start to work negotiating your first off-campus apartment. To simplify things for first-time role players, the negotiation involves one main issue - the price of renting/leasing an apartment. The negotiation has two roles: (a) the owner landlord and (b) the student who is a potential renter. You will be negotiating the cost of monthly rent as well as terms of benefits/services for the lease. There is additional information you can use to leverage your negotiation and obtain the best deal for your role. However, it is important that you use your confidential role information to determine how attractive various offers made by your partner are to you.
Background information. You are negotiating the terms of a lease for an unfurnished, one bedroom, and one bathroom apartment. The lease comes with three benefits/services free, while the other benefits/services are allowed at an additional negotiated price. The landlord must allow three benefits/services to be included free of charge. The landlord is allowed to deny any service/benefit. The landlord decides if a security deposit is necessary. You must negotiate your lease combination as well as the monthly rent payments. The city of College Park lists the monthly rent of comparable apartments as averaging $650.
Below is a list of possible benefits/services:• Parking privileges for tenants and guests
• Safety: alarm system installed
• Safety: insurance for anything stolen
• Rodents, insects: exterminator fees
• Air conditioning and heating
• Allowance of pets on premise/in apartment
• Maintenance problems: agree to fix maintenance problems (negotiable) within a timely (negotiable) manner
• Furniture: apartment comes furnished
• Utilities: gas and electric bundle
• Utilities: water and basic cable and internet (not wireless) bundle
Role A:
Student renter: The tenant is currently a student at the University of Maryland and is looking for an apartment to live in the College Park area. The university is going through a housing shortage and has decided to “kick” all upper classmen off campus. You don’t have a car, and need a place to live. Since you don’t have a car, this landlord’s apartment would be ideal. The landlord apartments are the only ones within 5 minute walking distance of the university. However, there are other apartments a little bit further. The maximum you can afford is $900/month. You want to get the most benefits/services for the least amount of money.
Role B:
Landlord: You want to lease your apartment out for the highest price with the least amount of benefits/services. Each service requires additional money from you to pay the workers. The university housing shortage has created a demand in off-campus housing. In addition, the economy isn’t doing well. The competition is steep from the surrounding landlords, so you want to ensure you lease out your apartment. Furthermore, you need to establish a long-term relationship with the renter. You want to utilize the renter as a resource to network future business opportunities. In addition, you want good relations with the renter to ensure future stay. You must negotiate with the renter to determine the appropriate set of benefits/services that will satisfy the student’s needs in order to secure the desired amount of profit for yourself.
Negotiating a Spring Break vacation: an exercise stressing both collaborative negotiation principles and recommendations and third party mediation
Part A
Introduction. Part A of this exercise is a negotiation whereby a college student and a travel agent attempt to come to terms on the price and services associated with a Spring Break trip to Acapulco, Mexico. The Spring Break trip includes a party package. You will be negotiating the cost of the Spring Break trip as well as what components will be involved in the Spring Break trip package. There is additional information you can use to leverage your negotiation and to compromise the best deal for your role. However, how closely one matches their roles utility is what will determine how well you did in comparison to the other groups.
Roles: Student and travel agent.
Background information. All trip options include roundtrip fare and hotel stay fare in prices. You will negotiate the length and price of the trip. In addition, you will negotiate the options for the party package combination. The party package must include three options. One option is free (determined through negotiation which one) while the others are available at a negotiable cost. All prices listed are the suggested price and are negotiable. The travel agent has the right to change any price at their discretion.
Basic information:
Length of trip
5 days 7 days
Cost $800 $1,000
Money due at time of booking $400 $500
Party package information: Based on negotiation; one option is free and any other two options for list price (must have three; can have more)
Other things to consider:• Taxi fare (not all clubs are within walking distance)
• Passport (need to renew?)
• Doesn’t include tourist activities (i.e. jet skiing, parasailing, bungee jumping, cliff diving)
• Phone card - phone coverage might not reach into Mexico
• Travel protection - can be provided for an additional $68
Role A:
Student: You want to party on Spring Break. Your parents agreed to pay $1000 of your Spring Break vacation. This is money you have upfront. You have saved $300 of your own money, which is available to you upfront as well. You are able to earn an additional $350 before your Spring Break trip. This money will not be available to you until the week before the trip. Your main motivation is to party hard for the least amount of money. You will need to bargain to get the best components out of the package deal. You will highlight the limitations or drawbacks of the options as well as allude to additional costs not included in the package option deals to get the best price. You want to ensure you have the most opportunities to enjoy yourself as possible. In addition, you can always book with another travel agent.
Role B:
Travel agent: The economy isn’t doing well and your salary depends on your ability to fill a plane for Spring Break. You want to book your student’s trip at the highest cost. For each trip booked .01% of the total cost of that booked trip is deducted off your next vacation. You want to book the trip quickly in order to maximize the amount of clients you can book. You also want to maintain good relationships with your clients in order to build a network of future clients through the student. Thus you want a happy client who will tell their friends to book with you as well. The more people that book through you, the more money you receive off your next trip. Your main motivation is to emphasize the most expensive options of the party package. You will highlight the benefits of each option and try to convince the student they need all options for the best Spring Break experience. You want to book the student the most expensive trip you can, in a timely manner. You have the power to change the list price for any of the options if doing so aides in your negotiation.
Part B - Mediating a settlement between student and travel agent after a failure to agree
Introduction. Part B assumes that two days before Spring Break, the student and the travel agent are still unable to reach a mutually satisfying agreement over the Spring Break trip, leaving the student with no vacation options. As a last course of action, the student contacts his/her father, a talented manager in the computer industry and asks for help. The father, an experienced manager who has recently read Chapter 28 agrees to mediate the dispute in order to try to help the parties reach agreement. Please assume the mediator role in this exercise and use the principles and recommendations for third party mediation. Your interests are simply to help your son or daughter settle on an affordable and enjoyable vacation without putting the travel agent at a disadvantage, to strengthen your own mediation skills through practice and to teach both parties something about the value of effectively implemented mediation in resolving conflicts between two parties.
Joint discussion questions for the above exercises
1. What kind of negotiation did you use in the exercises, distributive - win/lose or collaborative - win/win? Why did you choose this type?
2. Which negotiation principles did you rely on most heavily? Why? How well did they work?
3. Did you reach an agreement with your partner? What were the terms? How satisfied were you both with the agreement and what effect do you believe it will have on your ability to work together on a deal again?
4. What was the outcome of the mediation exercise? Why did this outcome occur?
5. Did the mediator assertively apply diagnostic, contextual and substantive interventions during the mediation attempt? What, if any, effect did these behavioral interventions have?
6. What might the mediator have done differently to enhance the likelihood of settlement between the parties?
7. Did any boundary conditions exist that negatively affected the impact of the mediation interventions? Please explain.