The Effect of Personal Characteristics on Negotiation - Literature review Example

The affect of personal characteristics on negotiation 2005 The negotiation activity presupposes a significant level of interaction between buyers and sellers. Negotiations entail that individuals come together to reconcile differences in initial party offerings. During this process bargainers attempt to establish reasonable terms of agreement and hope to secure mutually beneficial outcomes (Perdue & Summers, 1991). According to Adams' (1963) 'norm of equity', the negotiators when faced with perceptions of inequity, will work to restore equity. But the empirical evidence presented by Greenberg (1978) and Leventhal (1976) shows that there are several exceptions to Adams' theory, which are based on individual differences of negotiators, so that they don't prefer their outcome/input ratios to be equal (Patrick & Jackson, 1991). For instance, Miles, Hatfield and Huseman (1989) identified a spectrum of individuals who have different equity preferences. That's why in negotiations it could be unreasonable to adhere strictly to Adams' 'norm of equity', because bargainers' perception of what if 'fair' may be arbitrary. There exist two approaches to buyer-seller encounters in literature (Bazerman et al., 2000; Barry & Friedman, 1998): cooperative and/or problem-solving approach, and distributive and/or competitive. The first type, known also as integrative approach, presupposes conflict resolution, integration, and information exchange among buyers and sellers (Bazerman et al., 2000; Barry & Friedman, 1998; Pruitt, 1981). The competitive or distributive strategy involves threats and excessive demands, seeks to win concessions at the counterpart's expense (Barry & Friedman, 1998; Perdue & Summers, 1991). Eliashberg, Lilien & Kim (1995) name the cooperative problem-solving theory as the most effective way in resolving conflicts. Miles, Hatfield and Huseman (1987) stayed that equity sensitivity is an individual difference that influence how individuals react to inequity. Equity sensitivity is a 'person's perception of what is and what is not equity and then uses that information to make predictions about reactions to inequity' (King, Miles and Day 1993, p.135). For example, on the one end of the continuum there are the benevolents, or 'givers' who express high satisfaction in relation to others when their output/input ratios are less than the comparison other; they have higher tolerance for under-reward. Also at mid-range there are the equity sensitives, who most closely adhere to the traditional norm of equity (where inputs and outputs are balanced) (Allen & White, 2002). On the other end of the continuum are 'takers', who are most satisfied when they receive more outcomes than inputs (King, Miles & Day, 1993). According to King, Miles & Day (1993), benevolent negotiators, or 'givers', won't provide more inputs, in comparison to their outputs, to their counterparts. In the negotiations these inputs appear in the form of sharing information, making concessions changes, and discussing preferences among bargaining parties, which are critical elements of the cooperative problem-solving strategy. Entitleds, or 'takers' focus on themselves and the outcomes, and are more likely to take action to rectify any imbalance in the input/output ration when compared to their counterparts (Allen & White, 2002; Miles, Hatfield and Huseman, 1989). In the negotiation process entitleds are likely to be less cooperative than their counterparts. So that, it could be expected the following strategies to take place: H1: Benevolent negotiators will demonstrate more cooperative behaviours than entitled negotiators. Because they are more concerned with the outcomes of the bargaining activity and are more likely to follow the cooperative manner of behaviour, they place higher importance to intristic outcomes such as cooperation (King, Miles & Day, 1993). As a result, a positive connection exists between equity sensitivity and negotiators' perceptions of their cooperative behaviors. Pruitt (1981) notes that negotiators have the natural tendency to match or 'return' the bargaining strategies of those of their partners. Perhaps, negotiators are willing to 'give' information (that are benevolent tendencies) if they perceive their counterpart behaving in a cooperative manner. H2: A positive connection exists between equity sensitivity and negotiators' perceptions of their counterparts' cooperative behaviours. In the late 1970s and early 1980s, Prof. Gerald R.Williams set up a series of experiments on comparison of cooperative and competitive styles of negotiations, where he experienced lawyers from across the USA. He found that 65% of them expressed cooperative, while only 24% - competitive negotiation strategies. Effective negotiators are said to have the following personal characteristics: they are rational, experienced, perceptive, creative, analytical, self-controlled, intelligent and honest. (Williams, 1983) Salacuse (2003) outlined ten factors that influence a person in negotiations. Here belong the one, called 'emotionalism', that can he rated as 'high' or 'low'. According to the researcher, 'Latin Americans show their emotions at the negotiating table, while Japanese and many other Asians hide their feelings' (p.231). That can also influence the outcome of the negotiations. For example, Chen (2004) explains that the 'public expression of anger are considered bad manners in China' (p.14). During negotiations, the people involved perceive each other and interpret the behavior they 'see', often on a subconscious level. For example, the way a person is perceived in his role as a negotiator may determine how others react towards him and accept his ideas. Moreover, the person's own perception of the people with whom he is negotiating will influence his functioning as a negotiator. The success of negotiations, as a result, may depend, then, on how the negotiator is perceived as well as on the issues under negotiations. Physical appearance is also stated to influence of the first impressions made by a counterpart, and thus, influence the negotiating strategy. Status and role of a person play their great part in perceiving a negotiator. Costello (1963, p.3) stays that the perceive of the negotiation in his organization in case when people know and don't know his organizational role is different, as so their behavior. He names the categorizing on the basis of roles 'stereotyping' (Costello, 1963, p.46-47), which can occur in negotiations between unchanging parties. Personal characteristics, thus, affect greatly the process and the result of negotiations, because according to Bennis et al. (1964), 'an individual uses himself as a norm against which to judge others', of which he makes the following conclusions: a) knowing yourself makes it easier to see others accurately; b) our own characteristics affect the characteristics we are more likely to see in others; c) the person who accepts himself is more likely to be able to see favourable aspects of other people; d) accuracy in perceiving others is not a single skill that some people have and others don't; e) a corollary is the finding that, for people we like, we tend to perceive more accurately the ways in which they are. Roberts (2000) thinks that personality is integrated, selfserving, individualistic, overt (it affects external behaviour), consistent. Personal characteristics tend to occupy one of the leading positions in negotiation process in case people cannot manage their emotional states and behavioral patterns. According to the theory of personality traits, they are 'prominent aspects of personality that are flexible in a wide range of important social and personal contexts', and have some characteristics which partly determine the behaviour. So that, a friendly person is to behave friendly in any situation, only because of this his trait of personality. Lewis Goldberg proposed a five-dimension personality model, consisted of 'Big Five': 1. extraversion (vs. introversion; physical-stimulation-oriented vs. quiet and physical-stimulation-averse). Such people will behave differently in the negotiating process: extraverts will tend to express their real attitudes and emotions, while introverts are eager to follow the schedule, without self-express and emotional colouring of the process; 2. neuroticism (i.e., emotional stability; calm, unperturbable, optimistic vs. emotionally reactive, prone to negative emotions). Optimists in extreme situations or in case of disagreements will show their calmness and indifference, while emotionally reactive people tend to express emotional instability, which isn't a constructive factor in any negotiating process; 3. agreeableness (i.e., affable, friendly, conciliatory vs. aggressive, dominant, disagreeable). Both extreme personal characteristics aren't positive for the favorable negotiation outcomes; 4. conscientiousness (i.e., dutiful, planful, and orderly vs. spontaneous, flexible, and unreliable). The first type will show more stereotyped forms of behavior, when the second one tend to be a rather unpredictable one; 5. openness to experience (i.e., open to new ideas and change vs. traditional and staid). The first type negotiators will show the wider range of possibilities to choose, and will be more adaptable to new changes then the second ones. Another theory of personal characteristics, built on the observations of Carl Jung, is called the Big Four, and presupposes such individual characteristics as: 1. extraversion vs. introversion; 2. intuition vs. sensing (trust in conceptual/abstract models of reality vs. concrete sensory-oriented facts); 3. thinking vs. feeling (thinking as the prime-mover in decision-making vs. feeling as the prime-mover in decision-making), which will directly influence the way of decision-making process in negotiations; 4. perceiving vs. judging (desire to perceive events vs. desire to have things done so judgments can be made). (Phares, 1991) This personality typology explains people's behaviour in the situation of communication. For example, an extrovert-sensing-feeling-judging person is warm-hearted, talkative, and likes harmonious relations; he won't desire any conflict situations in the negotiations, trying to minimize the level of disagreements between the parties. Behaviorists theories (B.F.Skinner) explain personality in terms of reactions to external stimuli, when people's behaviour is formed by processes of operant conditioning. Cognitivism (A.Bandura) view behaviour as being guided by cognitions (e.g. expectations) about the world and other people. Humanistic psychology (A.Maslow, C.Rogers) emphasize that people have free will and play an active role in determining how they behave. It focuses on subjective experiences of persons instead of factors that determine behaviour. (Mischel, 1999) Individual differences psychology studies the ways in which people differ in their behaviour, which typically include the study of intelligence (trait), IQ and personality. Dunlap (1932) described persons according to their emotional types, as follow: the timid person (with emotions of embarrassment, dismay, apprehension or fear in situations where normal people show little emotional effect, or where quite different emotions would be more appropriate). Such people in negotiations will show their emotional state and insure more expressively that will be very beneficial for a partner; an irritable person (may 'boil over' in an offensive way or express himself snappishly under stimulation which should be only mildly annoying. On the other hand, such persons may, for politic reasons, somewhat restrain their outward expressions, but still feel the irritation they don't display. 'soft' type (whose sympathy is too easily arise, and who is an easy prey for clever swindlers. Such people are impediment to the maintenance of social order and justice). These people in negotiations are easily to make to adopt a non-beneficial decision for them; self-pity (the neurotic, from whatever complex of disadvantageous traits he may suffer, is especially prone to self-pity, which confirms and strengthens his neurosis). (Dunlap, 1932) Sheldon (1940, 1942, cited in Phares, 1991) classified personality according to body type, called somatotype, where he distinguished 'endomorph', who is relaxed, sociable, tolerant, comfort-loving and peaceful. These people look plump, buxom, with developed visceral structure; 'mesomorph' - muscular body, he is active, assertive, vigorous, combative; and 'ectomorph' with lean, delicate, poor muscles, and who is quiet, fragile, restrained, non-assertive and sensitive. Following Sheldon's theory, it is possible to predict a person's behaviour in the situation of negotiations, judging only on his physical characteristics and body structure. Block (1971) from the point of view of communication, identified 5 personality types among male participants: well-adjusted or Resilient person: adaptable, flexible, resourceful, interpersonally successful; overcontrolling: a maladjusted type: uptight, difficult to deal with. These persons will provoke difficulties in negotiations, cause their behaviour and decisions will be much stereotyped, and it would be difficult to adjust him to new circumstances; undercontrolling: another maladjusted type: impulsive, risky, delinquent or even criminal. Such persons cannot be safe relied at, cause they can provoke unpredictable results as for outcomes of the deal. (Phares, 1991) Gender differences also affect the process of negotiations. Kray, Galinsky & Thompson (2002) found that women have higher aspiration, make more aggressive opening offers, and negotiate more profitable agreements for themselves than do men. One of the very important counterparts in negotiations is power that may help the process or may simply lead to a further entanglement of issues. Power is understood by Steward (1989) as the potential to influence another successfully, it is the capacity to change the behavior or attitudes of others in a desired fashion. There are four sources of personal power: rational persuasion, referent power, expert power and charisma. Rational persuasion is based on logic and good evidence, expert power - on superior knowledge of a certain field, while charisma is explained as being an engaging and magnetic personality to be highly influential on people. Charismatic individuals, thus, are valuable assets during the negotiations because individuals who are seen as trustworthy or who are good communicators can at many times facilitate the process and win the cooperation of the other side. The fact of their well-liking by others often helps to swerve the outcome in their favour. Gilkey and Greenhalgh believe that personality is an essential factor in negotiation and state: 'Anyone who has negotiated with people who are stubborn, short-tempered, shy, Machiavellian, or risk-averse will attest to how important negotiators' personalities can be in determining how negotiations unfold'. (1991, p.17) Traits are stable and enduring characteristics of individuals that predispose negotiators to react to situations in particular ways. For example, Daly (1991) stays that anger: (1) inhibits the ability to search effectively for mutually agreeable solutions, and (2) affects an angry negotiator's goal by introducing new motives to punish or retaliate 'the offending party' (p.31). He believes that anger is caused by external events and never occur because of a dysfunctional personality pattern that could be altered through reflection and personal growth. According to Daly, anger functionally can be an explicit and forceful way of countering 'unacceptable' behavior; but it really depends on a person whether or not to express anger in the negotiation process. This right to choose in also emphasized by Gilkey & Greenhalgh (1991). On the contrary, Fisher and Ury (1981) argue that the most successful negotiators will focus on interests rather than positions, paying no attention to the personal characteristics of negotiators or the techniques they use. They emphasize the importance of using negotiation to communicate about interests so that mutually advantageous exchanges can occur, that will create 'win-win' result. Negotiation theorists have identified such barriers to successful negotiation, as cognitive dissonance, loss aversion, strategic bargaining, and reactive devaluation, a process in which negotiators' perceptions are influenced by the source of the information (Mnookin, 1993) Conflict is also considered to be a healthy expression of disagreement, and helps to develop a deeper understanding of the other person's needs and interests, and to create a setting in which people feel empowered rather than stifled (Stone, Patton & Heen, 1999). The authors also emphasize the idea of individual's self-image and self-esteem being impacted by the process of negotiation. In any case, in a negotiation process each party tried to overwhelm the other by stressing that they are right and the other is wrong. A process where power is used becomes a contest of wills in which each party attempts to demonstrate superior power and strength (Davis, 1989). That's why the negotiators with more favourable personal characteristics as reflexivity, emotional control, rational rather than emotional way of thinking, quick reactivity, flexibility to innovations and non-stereotyped thoughts structure, possess of a certain charisma and inner strength will have better results as for the outcomes in favor for their party. They will have better effect persuading the other party to adopt their demands, but it won't be a visible and direct process, but rather hidden and fogged one, a manipulating process. References 1. Adams, J. 1963. 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Davis, A.M. (1989) An Interview with Mary Parker Follett. Negotiation Journal, p.223-235 10. Dunlap, K. (1932) Habits: Their Making and Unmaking. New York: Liveright Publishing Corporation, Inc. p. 233-234 11. Fisher, R. & Ury, W. (1981) Getting to YES - Negotiating Agreement Without Giving In. Boston: Houghton Mifflin. 12. Greenberg, J. 1978. "Allocator-Recipient Similarity and the Equitable Division of Rewards." Journal of Research in Personality.13: 337-341. 13. Gilkey, R.W. & Greenhalgh, L. (Jan. 1991) 'The Role of Personality in Successful Negotiating'. Negotiating Journal, p.17 14. King, W., E. Miles and D. Day. 1993. "A Test and Refinement of the Equity Sensitivity Construct." Journal of Organizational Behavior. 67: 133-142. 15. Kray, L.J., Thompson, L., & Galinsky, A. (2002) Reserving the gender gap in negotiations: An exploration of stereotype regeneration. Organizational Behavior and Human Decision Processes, 87, p.386-410 16. Leventhal, G. 1976. 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(2001) International Business Negotiations: A Comparison of Theory with the Perceived reality of Australian Practioners. ISSN: 1441-3906 25. Stone, D., Patton, B. & Heen, Sheila (1999). Difficult Conversations: How to Discuss What Matters Most 26. Williams, G. (1983) Legal Negotiation and Settlement. St. Paul, MN: West Read More