Group Presentation

On
“Power, Conflict and
Negotiation .”
MBA 4th (B) Finance.

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Presenters:

„ 1. Uzma Munir ( ).
„ 2. Ahisha Haq ( ).
„ 3. Ajmal Khan ( ).
„ 4. Yasir Mushtaq ( ).
„ 5. Saeed khan ( ).
„ 6. Sehreen Rashid ( ).

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Power:

„ Definition: Power refers to a capacity that A

has to influence the behavior of B, so that B
acts in accordance with A’s wishes.

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Bases of power:

1. Formal Power
2. Coercive Power
3. Reward Power
4. Legitimate Power
5. Personal Power
6. Expert Power
7. Referent Power

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 Bases of power:
1. Formal Power:
„ Formal power is based on an individual’s position in an organization.
Formal power can come from the ability to coerce or reward or it can
come from formal authority.
2. Coercive Power:
„ The coercive power base is being dependent on fear.
„ It rests on the application, or the threat of application, of physical
sanctions such as the infliction of pain, the generation of frustration
through restriction of movement, or the controlling by force of basic
physiological or safety needs.
„ At the organizational level, A has coercive power over B if A can
dismiss, suspend, or demote B, assuming that B values his or her
job.
„ Similarly, if A can assign B work activities that B finds unpleasant or
treat B in a manner that B finds embarrassing, A possesses coercive
power over B.
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Bases of power:
„ 3. Reward Power:
„ The opposite of coercive power is reward power.
„ People comply because doing so produces positive benefits;
therefore, one who can distribute rewards that others view as
valuable will have power over those others.
„ These rewards can be anything that another person values.
„ Coercive power and reward power are actually counterparts of
each other.
‰ If you can remove something of positive value from another or
inflict something of negative value upon him/her, you have
coercive power over that person.
a. If you can give someone something of positive value or remove
something of negative value, you have reward power over that
person.

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„ 4. Legitimate Power:
„ In formal groups and organizations, the most
frequent access power is one’s structural position. It
represents the power a person receives as a result
of his/her position in the formal hierarchy.
„ Positions of authority include coercive and reward
powers.
„ Legitimate power, however, is broader than the
power to coerce and reward. It includes acceptance
of the authority of a position by members of an
organization.

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 Bases of power:
„ 5. Personal Power:
„ Personal Power is the power that comes from individuals unique
characteristics.
„ In Personal power, we look at two bases of personal power –
Expertise and the respect and admiration of others.

„ 6. Expert Power:
„ Expert power is "influence wielded as a result of expertise,
special skill, or knowledge."
„ Expertise has become a powerful source of influence as the
world has become more technological. As jobs become more
specialized, we become increasingly dependent on experts to
achieve goals.

„ 7. Referent Power:
„ Influence based on possession by an individual of desirable
resources or personal traits.

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Dependency: The Key to Power

„ The General Dependency Postulate:

„ The greater B’s dependency on A, the greater the
power A has over B.
‰ When you possess anything that others require but that
you alone control, you make them dependent upon you
and, therefore, you gain power over them.
„ Dependency, then, is inversely proportional to the
alternative sources of supply.
‰ This is why most organizations develop multiple suppliers
rather using just one.
‰ It also explains why so many of us aspire to financial
independence.

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What Creates Dependency?
• Importance
„ To create dependency, the thing(s) you control must be
perceived as being important.
„ Organizations actively seek to avoid uncertainty.
„ Therefore, those individuals or groups who can absorb an
organization’s uncertainty will be perceived as controlling an
important resource.
• Scarcity
„ A resource needs to be perceived as scarce to create
dependency.
„ Low-ranking members in an organization who have important
knowledge not available to high-ranking members gain power
over the high-ranking members.
„ The scarcity-dependency relationship can further be seen in
the power of occupational categories.
„ Individuals in occupations in which the supply of personnel is
low relative to demand can negotiate compensation and
benefit packages, which are far more attractive than can those
in occupations where there is an abundance of candidates.
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 Power Tactics
Ways in which individuals translate power bases into specific
actions.

„ Influence Tactics:
„ Legitimacy: Relying on one’s authority request is in accordance with rule.
„ Rational persuasion: logical and faucal augment the request is
reasonable.
„ Inspirational appeals: developing emotional commitment by appealing to
target.
„ Consultation: increasing the target motivation by involving.
„ Exchange: rewarding the regret with benefit.
„ Personal appeals: asking for compliance based friendship or loyalty.
„ Ingratiation: using friendly, praise behavior prior to make request.
„ Pressure: using warnings, repeated demands and threats
„ Coalitions: using the support of others as a reason for to agree

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Conflict:

„ "A process which begins when one party

perceives that the other is frustrated, or is
about to frustrate, some concern of his (or
her)”
‰ Perceived by the parties
‰ Parties are in opposition to one another
‰ At least one party is blocking the goal attainment
of the other party
‰ Goals can be tangible or psychological

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Conflict Management techniques:

„ The use of resolution and stimulation techniques

to achieve the desired level of conflict
„ Conflict Resolution Techniques
„ Conflict Stimulation Techniques

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Conflict Resolution Techniques
„ Problem solving: Face to face meeting to resolve the problem
„ Super ordinate goals: Creating a shared goals that cannot be
attained without the conflicting parties
„ Expansion of resources: Give reward, increase salary create
win/win solution
„ Avoidance: The desire to withdraw from or suppress a conflict..
„ Compromise: A situation in which each party to a conflict is willing to
give up something.
„ Authoritative command: Use authority to resolve conflict
„ Altering the human variable: Human relation training to change
their behavior.
„ Altering the structural variables: Changing the formal
organization culture by transfer, job redesign and create coordination

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Conflict Stimulation Techniques

1. Communications: Using ambiguous or

threatening messages to increase conflict levels
2. Bringing in outsiders: Adding employees whose
value and style is change from the present
3. Restructuring the organization: Making similar
structural changes to disrupt the status quo,
altering rule and regulation
4. Appointing a devil’s advocate: Designating a
critic to purposely argue against the majority
positions held by the group.
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What is negotiation?

„ Negotiation - a joint process of finding a mutually

acceptable solution to a complex conflict
„ Useful under these conditions
„ Two or more parties
„ Conflict of interest between the parties
„ Parties are willing to negotiate
„ Parties prefer to work together rather than to fight
openly, give in, break off contact, or take the dispute
to a higher authority

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The Negotiation Process:

„ The Negotiation Process is divided into five

steps:
„ 1. Preparation and planning:
„ 2. Definition of ground rules:
„ 3. Clarification and justification:
„ 4. Bargaining and problem solving:
„ 5. Closure and implementation:

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 The Negotiation Process:
„ 1. Preparation and planning:
„ Do your homework. What is the nature of the conflict? What is the
history leading up to this negotiation? Who is involved, and what are
their perceptions of the conflict? What do you want from the
negotiation? What are your goals?
„ You also want to prepare an assessment of what you think the other
parties to your negotiation’s goals are.
‰ When you can anticipate your opponent’s position, you are better
equipped to counter his or her arguments with the facts and figures
that support your position.
„ Once you have gathered your information, use it to develop a
strategy.
„ Determine your and the other side’s Best Alternative To a
Negotiated Agreement (BATNA).
‰ Your BATNA determines the lowest value acceptable to you for a
negotiated agreement.
‰ Any offer you receive that is higher than your BATNA is better than
an impasse.
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The Negotiation Process:

„ 2. Definition of ground rules:

„ Who will do the negotiating? Where will it take place? What
time constraints, if any, will apply?
„ To what issues will negotiation be limited? Will there be a
specific procedure to follow if an impasse is reached?
„ During this phase, the parties will also exchange their initial
proposals or demands.
„ 3. Clarification and justification:
„ When initial positions have been exchanged, explain, amplify,
clarify, bolster, and justify your original demands
„ This need not be confrontational.
„ You might want to provide the other party with any documentation
that helps support your position.

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The Negotiation Process:
„ 4. Bargaining and problem solving:
„ The essence of the negotiation process is the actual give and
take in trying to hash out an agreement.
„ Concessions will undoubtedly need to be made by both parties.
„ 5. Closure and implementation:
„ The final step—formalizing the agreement that has been worked
out and developing any procedures that are necessary for
implementation and monitoring.
„ Major negotiations will require hammering out the specifics in a
formal contract.
„ For most cases, however, closure of the negotiation process is
nothing more formal than a handshake.

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Yasir Mushtaq MBA 4th (B) Finance...
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