The Influence of Third Party Power and Suggestions on Negotiation: The Surface Value of a...

The Influence of Third Party Power and Suggestions on Negotiation: The Surface Value of a C o m p r o m i s e 1

DONALD E. CONLON~ PETER CARNEVALE Department of Business Administration

University of Delaware University of Illinois

WILLIAM H. Ross Department of Management

University of Wisconsin-Lacrosse

A simulated organizational dispute tested the influence of third party power and settlement suggestions on negotiation. Six different types of third party suggestions were tested: Integrative (highest possible value to both parties), compromise (the prominent solution equally favorable to both parties), unintegrative (lowest possible value to both parties), favorable (more value to subject than to opponent), unfavorable (more value to opponent than to subject), and no offers. Additional subjects bargained with no third party. The results suggest that the potential of a third party to impose a settlement influenced disputant perceptions of power and desire for third party involvement, but had only weak effects on communication processes and little effect on offer proposals. While integrative suggestions led to greater acceptability of the third party, compromise suggestions positively influenced the appearance of fairness and the use ofrationality and exchange messages. Receipt of an unfavorable suggestion resulted in less favorable ratings of third party acceptability, greater perceptions of bias, and the use of more assertive messages and fewer upward appeals aimed at the third party than did receipt of a favorable suggestion. Implications for managerial dispute resolution behavior and subsequent perceptions of satisfaction and justice are discussed.

The use of negotiation as a heuristic for interpreting behavior in organizations is rapidly gaining acceptance. Negotiators in organizations are often affected by the involvement of a third party (Pruitt, 1981a). A growing literature (Kolb, 1985; Camevale, 1986a; Kressel & Pruitt, 1989; Notz & Starke, 1978; Carnevale & Pruitt, 1992; Conlon & Ross, 1993) focuses on how the actions of third parties influence the outcomes of negotiation and the beliefs

'The authors thank Howard Garland and L. Allen Slade for their helpful comments on an earlier draft of this paper. Thanks are also due to Chris Schwichtenberg, Tim Turner, and Karrie Huber for their assistance in the data collection. Support from National Science Foundation Grant Number BNS-8809263 to Peter Carnevale is also gratefully acknowledged.

*Correspondence concerning this article should be addressed to Donald E. Conlon, Department of Business Administration, University of Delaware, Newark, DE 197 16-2710.

1084

Journal of Applied Social Psychology, 1994, 24, 12. pp. 1084-1 113. Copyright 0 1994 by V. H. Winston & Son, Inc. All rights reserved.

THIRD PARTY POWER 1085

and attitudes of the parties involved. The present study examines the impact of third party power and suggestions for settlement on negotiation.

In organizational settings, many managerial activities concern the resolution of disputes (Mintzberg, 1973; Carnevale, 1986b; Murnighan, 1986). For example, if two managers are arguing about promotion criteria, and another manager at the same level of the organizational hierarchy intercedes to facilitate a voluntary agreement, then this manager is acting as a mediator. Although mediation and arbitration are two popular forms of third party activity, many organizational disputes place managers in roles that cannot easily be classified as mediation or arbitration (Kolb & Sheppard, 1985). In response to this problem, Murnighan (1986) coined the term “intravention” to refer to a procedure where the third party not only has the power to impose settlements on disputants but also the freedom not to impose any settlement. This neologism reflects both the power and possibilities a superior may have over subordinates involved in an organizational dispute. Third parties in the intravention procedure have more power than mediators (because they have decision control, should they decide to use it), but they also have more flexibility than arbitrators (who typically are constrained and must exercise decision control if the parties cannot agree).

This brief discussion of third party roles suggests that a key distinction between intravention and the other two roles lies in the amount of discretion or latitude afforded the third party under intravention. managerial discretion is a topic that has received only scattered attention in the organizational literature (e.g., Tannenbaum & Schmidt, 1973; Hambrick & Finkelstein, 1987). The role of discretion in third party behavior has also received little attention, though the present study and other recent work (e.g., McGillicuddy, Welton, & Pruitt, 1987; Conlon, Carnevale, & Murnighan, 1994) attest to its growing importance.

Of course, the discretion inherent in the intravention procedure creates a great deal of uncertainty for disputants. Will the third party impose a settlement without giving disputants a chance to work out an agreement by themselves? Will the third party impose an agreement only as a last resort, that is, when the disputants appear to have reached an impasse? Or, will the third party refuse to impose a settlement, and force the disputants to continue their negotiations? These questions are not faced by disputants involved with a mediator.

The present study contrasts intravention and mediation procedures in a simulated organizational dispute. Subjects, as disputants, negotiated in the presence of a third party who either did or did not have the power to impose a settlement. Past research (e.g., Johnson & Pruitt, 1972; Notz & Starke, 1978) demonstrates that bargainers who anticipate more controlling third party procedures are more conciliatory towards their opponent, make larger

1086 CONLON ET AL.

concessions, and are more likely to reach agreement. We anticipate that since the intravention procedure places greater decision control in the hands of the third party than does mediation, disputants will perceive that they retain more power in the negotiation under mediation procedure than under the intravention procedure.

Hypothesis 1: Disputants involved with a high power third party (intravention) should perceive that they have less power in the negotiation than subjects involved with a low power third party (mediation).

In addition, negotiators who perceive that they have less power are likely to behave differently from those who perceive that they have more power. Pruitt (1981b) argues that powerful third parties can produce conditions that encourage both parties to negotiate. Research on third parties in international disputes suggests that it may be easier for disputants to make concessions when a powerful third party is involved because such concessions are less likely to be viewed as a sign of weakness (Pruitt, 1981b).

Hypothesis 2a: Disputants involved with a high power third party will demand less of the resources in negotiation (thereby offering more to their opponent) than disputants involved with a low power third party.

Third party power may also affect the communication behavior of the disputants. Work by Kipnis, Schmidt, and Wilkinson (1980), who developed a format for classifying negotiator messages, will be used to test this assertion. The influence categories identified by Kipnis et al. (1980) include: (a) assertive, strong influence tactics characterized by making demands, ordering, and setting deadlines; (b) ingratiation, weak unobtrusive influence tactics characterized by acting humble and making the other person(s) feel important; (c) rationality, tactics such as using logic and trying to explain one’s request; (d) exchange, tactics involving the trading of positive benefits; (e) upward appeal, tactics that attempt to increase pressure on the party by imploring the influence of parties higher in the organization; (0 blocking, tactics which attempt to stop or delay one from carrying out an action; and (g) coalitions, tactics where the message sender attempts to form an alliance with one or more people. This work has particular relevance here because their scheme was designed to account for influence tactics that a negotiator might use on supe- riors as well as peers. Thus, it nicely reflects one element of our distinction between intravenors and mediators (i.e., boss vs. peer).


Hypothesis 2b: Disputants involved with a high power third party will send to the third party, and to the opponent, greater proportions of messages that reflect conciliatory or agreeable behavior (specifically, ingratiation, rationality, exchange, and upward appeal messages) than disputants involved with a low power third party.

Even with the involvement of a third party, many conflicts are difficult to resolve because disputants have little information about each other’s preferences for settlement. Much of the negotiation literature is predicated on conflicts where disputants do not know their opponent’s preferences, or where disputants do not wish to reveal their own preferences in fear of giving away a competitive advantage. With regard to third party intervention in such disputes, this uncertainty can have a profound effect on how third party suggestions for settlement may be interpreted.

Consider for explanatory purposes the integrative bargaining table to be used in the present study, shown in Table 1. This table represents a standard negotiation task used in many studies of third party-assisted negotiations (e.g., Carnevale & Conlon, 1988; Conlon et al., 1994). As can be seen, there are three issues that need to be negotiated, and there are nine offer levels for each issue at which an agreement can be reached. Numbers next to each letter indicate the value of settling at that level to the negotiator. At least five different classes of third party suggestions can be distinguished.

One type of suggestion is the integrative solution, AEI, which gives each bargainer 160 points. This suggestion involves having disputants make a tradeoff on their high and low priority issues; each subject gives up their least important issue (as represented by the point values) in return for getting everything on their most important issue. Thus, the integrative suggestion provides the greatest possible combined value for both parties (i.e,, pareto efficiency is achieved).

A second type of suggestion is the compromise suggestion, EEE, which gives each bargainer 120 points. The compromise settlement embodies one standard of fairness (equality) typically used in resource allocation judgments. It is also the most prominent settlement point (cf. Pruitt, 1981a; Schelling, 1960). Schelling (1960) notes that a prominent solution is often the focus of parties’ convergent expectations, and the practice of “splitting the difference” on each issue is a common settlement strategy. The compromise suggestion, like the integrative suggestion, is equally favorable to both parties, but is not as valuable a settlement as the integrative suggestion. Nevertheless, compromise settlements are very common in negotiations because “splitting the difference” on each issue is a very popular and obvious settlement strategy (Pruitt,

1088 CONLON ET AL

Table 1

The Issue Charts for the New York and Boston managers

Cutoff money Number of years Promotion

OA 5 B

10 c 15 D 20 E 25 F 30 G 35 H 40 I

120 A 105 B 90 C 75 D 60 E 45 F 30 G 15 H 0 1

Boston (i.e., subject’s) payoff table

OA 10 B 20 c 30 D 40 E 50 F 60 G 70 H 80 I

New York payoff table

80 A 70 B 60 C 50 D 40 E 30 F 20 G 10 H 0 1

OA 15 B 30 C 45 D 60 E 75 F 90 G

105 H 120 I

40 A 35 B 30 C 25 D 20 E 15 F 10 G 5 H 0 1

1981a) that appears to be satisfactory and fair to both parties. Third parties who propose the compromise settlement thereby acknowledge this inherent fairness or reasonableness.

A third suggestion that is similar in some respects to the integrative and compromise suggestions also involves making tradeoffs on two issues. In this case, however, the disputants each give up their most valuable issue, while keeping their least important issue. This suggestion, IEA, is the opposite of the integrative suggestion; we will refer to it as the unintegrative suggestion. The


unintegrative solution is a very inefficient settlement for the negotiators, and it is not likely that they would reach such an agreement of their own volition. However, a third party might wish to impose this on disputants because it serves the third party’s interests, or use it as a threat to push the parties toward more cooperative interactions. Past research on intravenors (Conlon et al., 1994) suggests that powerful third parties were sometimes willing to impose such a settlement on disputants if doing so provided the third party with a favorable outcome.

The integrative, compromise, and unintegrative suggestions are similar because, in each case, disputants receive the same outcome as their opponents. These three solutions can also be thought of as balanced or symmetrical, as subjects can see that they are getting exactly half of the overall pool of resources, though the manner in which their half is allocated on each issue and the utility (points) it provides varies. When disputants have complete information about their opponent’s payoffs, we would expect negotiators to show a strong preference for integrative solutions. But, what are the consequences when disputants negotiate without this information?

Theories of equity and distributive justice (e.g., Adams, 1965, Laver, 198 I), as well as experimental work (Conlon, Lind, & Lissak, 1989; Conlon & Fasolo, 1990) suggest that more favorable outcomes lead to greater outcome satisfaction, though not necessarily greater perceptions of outcome fairness (Conlon & Fasolo, 1990). This suggests that integrative suggestions will be seen as more satisfying than compromise suggestions, which will be seen as more satisfying that unintegrative suggestions. The above referenced work also suggests that disputants who receive integrative suggestions will find the third party’s involvement to be more acceptable than will disputants whose third parties propose compromise or unintegrative suggestions. This is because integrative suggestions provide more value to the disputant.

However, perceptions of fairness do not always tack closely to perceptions of satisfaction. In fact, we expect third parties who propose compromise suggestions to be perceived as most behaving in a fair, neutral, “unbiased” manner. Unbiasedness is presumed to relate to both the third party and the specific proposals the third party makes, as perceptions of third party fairness and evaluations of the fairness of third party suggestions are often highly correlated (e.g., Conlon & Fasolo, 1990). At least two disparate literatures support our thesis that compromise suggestions will lead to favorable perceptions of third party unbiasedness. We will begin by considering evidence from the organizational justice literature, and conclude by reviewing research on negotiator cognitions.

In the organizational justice literature, Greenberg’s (1 990) work on managing impressions of organizational justice attests to the importance

1090 CONLON ET AL.

managers place in “looking fair,” and not just “being fair.’’ The compromise suggestion is the epitome of consistency, in that each disputant gets half of the resource in dispute on each issue. A compromise suggestion may enhance the appearance of third party fairness because each disputant receives the same level of favorability from each issue. The widely varied settlement of each issue inherent in an integrative or unintegrative suggestion (which provide each disputant all, nothing, and half on three issues) does not appear consistent and may diminish the appearance of fairness, particularly when disputants are uncertain about their opponents’ preferences.

Numerous scholars (e.g., Deutsch, 1975; Leventhal, 1976; Greenberg, 1987; Allison & Messick, 1990) suggest that in situations where maintaining social harmony is important, dividing rewards equally regardless of differential inputs among participants is the preferred distribution norm. In several dispute contexts, Lowenstein, Thompson, and Bazerman (1989) found that most disputants preferred equal outcomes over outcomes that favored one party or the other. It may be that in organizational contexts, third parties are expected to realize that maintaining good relationships among employees is facilitated by dividing rewards on issues equally regardless of differential values among the issues. Thus, providing equal outcomes on each issue, and not merely equal outcomes at an overall (and more favorable) level, can enhance perceptions of fairness (Harris & Joyce, 1980).

Cognitive approaches to negotiation ( e g , Bazerman & Neale, 1983; Thompson & Hastie, 1990) and resource allocation (Allison & Messick, 1990) also suggest that compromise suggestions might be seen as more fair than integrative suggestions. Under conditions of uncertainty, disputants assume that both parties value each issue equally and that their preferences are diver- gent. This “fixed pie” assumption has important consequences for the likely cognitions of the Boston manager in Table 1. The integrative AEI suggestion would be seen as providing the Boston manager’s opponent (New York) only 40 + 40 + 0 = 80 points, a much lower outcome than the Boston manager would receive. This distortion does not occur when the compromise EEE is suggested, as the Boston manager should infer that the opponent receives 20 + 40 + 60 = 120 points, the same total that the Boston manager receives. Thus, a focus on negotiator cognitions would also predict that the compromise suggestion might lead to greater perceptions of third party unbiasedness than the integrative suggestion.

Hypothesis 3: While disputants who receive integrative suggestions will be more accepting of third party intervention than disputants who receive compromise or unintegrative suggestions, disputants who receive compromise suggestions will


perceive that the third party is less biased than disputants who receive integrative or unintegrative suggestions.

Two other types of third party suggestions can be distinguished. A suggestion can clearly appear to favor one party at the expense of the other. For example, the Boston manager in Table 1 will likely view a mediator suggestion of BBB very unfavorably as it provides the negotiator only 30 points. However, the negotiator would view a settlement of HHH very favorably as it provides 210 points. Regardless of whether the negotiator knows with certainty the opponent’s payoffs, they are likely to believe that they are disfavored when the suggested settlement is so close to AAA and favored when the suggested settlement approaches 111.

Obviously, the type of suggestion that is made by a third party for settlement may have a strong influence on how much a disputant is likely to concede in negotiation (Pruitt, 1981a). Past research has typically considered third party suggestions for settlement that were equally beneficial to both parties (e.g., Pruitt & Johnson, 1970; Bartunek, Benton, & Keys, 1975). In many organizational disputes however, the third party (being a member of the same organization as the disputants) has a preference for a particular settlement that may strongly favor one disputant over another (Murnighan, 1986).

Pruitt (198 la) argues that third party suggestions that strongly favor one party over another will be seen as biased. As a result, the favored disputant may seek to cultivate a relationship with the third party, while the disfavored disputant may react with hostility. This is consistent with work on biased intermediaries in international settings (Zartman & Touval, 1985), which suggests that third party bias in favor of one party may lead to coalition attempts by the favored party designed to preserve the perceived advantage or to preserve the favorable relationship with the third party. Further, if the third party favors one party, that party may feel empowered. Dyadic bargaining research shows that when one party is more powerful than the opponent, the party is reluctant to make generous offers to the opponent (cf. Pruitt, 1981a). Thus, we advance two hypotheses regarding favorable and unfavorable third party suggestions.

Hypothesis 4: Disputants who receive third party suggestions that strongly favor their position over their opponent will: (a) perceive that they have greater power in the negotiation, (b) be more accepting of third party intervention, and (c) desire third party involvement to a greater extent, than disputants who receive third party suggestions that strongly favor their opponent’s position.

1092 CONLON ET AL.

Hypothesis 5: Disputants who receive favorable suggestions from a third party will demand more of the resources in negotiation (thus offering less to their opponent), and send greater proportions of coalition-building messages to the third party than subjects who received unfavorable suggestions.

We also predict an interaction between third party power and favorable versus unfavorable suggestions on the behavior of negotiators. As an intravenor can impose a settlement on disputants while a mediator can merely suggest settlements, a favorable suggestion from an intravenor is likely to bolster a negotiator’s position in negotiation, leading to less cooperation with the opponent. On the other hand, receiving an unfavorable suggestion from an intravenor might push a negotiator to be more conciliatory in an effort to avoid the imposition of a harsh, unfavorable outcome by the third party.

Hypothesis 6: We predict the following interaction between third party power and favorablehnfavorable suggestions: Nego- tiators with a high power third party who make favorable recommendations will perceive that they have the most power and will also demand the most resources in negotiation; negotiators with a high power third party who makes unfavorable recommendations will perceive they have the least power and demand the fewest resources; negotiators with low power third parties will have intermediate levels of power perception and demand an intermediate level of resources in negotiation.

A final hypothesis is based on comparisons between subjects who receive no suggestions from a third party, and subjects who bargain without a third party. Rubin and Brown (1975) suggest that the mere presence of a third party has a positive effect on negotiations and improves the likelihood of agreements. In addition, negotiators are often motivated to reach agreement because they fear that the third party will take control away from them (Brett & Goldberg, 1983). To test this assertion, we included a control condition where disputants bargained with no third party involvement at all.

Hypothesis 7: Subjects bargaining with no third party will propose offers of greater value to themselves and less value to their opponent than subjects negotiating with a third party who makes no suggestions.


Method

Participants, Research Design, and Procedure

A total of 261 business administration students participated in return for class credit and the chance at monetary prizes. Subjects were run in groups ranging in size from 12 to 30. A 2 x 6 factorial design varied third party power (ability to impose a decision versus no ability to impose), and the offers proposed by the third party (unfavorable, unintegrative, compromise, integrative, favorable, or no offers proposed). In addition, some students bargained without a third party in a control condition. All subjects were randomly assigned to the 13 conditions in the study. Cell ns ranged from 18 to 22.

Each subject was seated in front of a personal computer which presented the instructions, task, and questionnaire. The experimenters were blind to the assignment of subjects to experimental conditions. Subjects were told that they would interact with two other subjects via a computer network. Subjects were then “randomly” assigned the role of Boston manager, whose task was to reach a solution in a conflict with another manager, the New York manager. In addition, subjects were told that a third manager, the Product manager, would be assisting them in settling the dispute (the subjects in the control condition did not receive this information regarding the third party). All subjects were assigned the role of Boston manager, and the offers proposed by the New York manager and the third party suggestions were predetermined.

The scenario was based on a negotiation which occurred in a large securities firm. The New York and Boston managers negotiated three issues: the size of transferrable accounts, length of service in the company before being eligible for promotion, and promotion criteria. The issues were displayed on the screen in tabular form (Table 1) consistent with past research on integrative bargaining and mediation (e.g., Carnevale & Conlon, 1988).

Each issue had nine proposal levels ranging from “A” to “I.” Subjects were told to try to agree on one proposal level for each issue. Points shown next to each proposal level indicated the value of that settlement level to the subject. Subjects were told that while they would only see their own point values, the Product manager would see both their point values and their opponent’s point values. Tradeoffs were possible on the three issues to facilitate agreement: The high priority issue for the New York manager (the opponent) was the low priority issue for the Boston manager (the subject), and vice versa.

In each round of the negotiation, subjects first saw the New York manager’s 3-letter proposal. Subjects then saw the offer proposed by the third party (if applicable). Finally, subjects saw their own issue chart, which listed their own personal outcomes as they were associated with particular agreements. They

1094 CONLON ET AL.

were told that their outcomes would be converted to lottery tickets. At the completion of the study, seven prize winning tickets would be selected. First prize was $40, two second prizes were worth $20 each, and there were four third prizes of $10 each. The instructions emphasized that their chances increased as the number of lottery tickets increased, and thus they should try to get as many points as possible.

In all conditions, the offers generated by the New York manager gave few points to the subject. These offers on each of the seven rounds of negotiation were: “AAA,” “AAA,” “ABA,” “BAB,” “BAB,” “BBA,” and “BBB,” respectively.

Independent Variables

Power. In the low power condition, subjects were told that the product manager was a peer of both managers in the dispute. Subjects were told that while the product could suggest specific agreements, the product manager did not have the authority to impose a settlement on the disputants. They were also told that the Product manager could choose not to get involved at all. In the high power condition, subjects were told that the product manager was a superior to both managers in the dispute. These subjects were then told the range of options this third party had to choose from. Subjects were told that the product manager might not get involved at all, or could simply choose to make suggestions “like a mediator.” “But,” subjects were warned, “the product manager has the authority to impose an outcome on the two managers if he or she wants to, and if this occurs you must accept the outcome. DO NOT FORGET THIS.” In addition to these instructions, a message written in red continuously flashed on the screen during the negotiation which reminded subjects that the product manager might impose a settlement.

Third party suggestions. The manipulation of third party offer suggestions occurred on rounds three, four, six, and seven of the negotiation. This pattern gave negotiators an initial chance to make progress on their own, and allowed us to examine any impact third party power might have prior to the suggestions manipulation. On the other rounds, the word “NONE” appeared instead of a suggestion. Within each experimental condition, the third parties proposed the same offer on these four rounds. Subjects in the unfavorable condition received “BBB” suggestions, which provided the subject only 30 points. Subjects in the unintegrative condition received “IEA” suggestions, which provided the subject 80 points. Subjects in the compromise condition received “EEE” suggestions, which provided the subject 120 points. Subjects in the integrative condition received “AEI” suggestions, which provided the subject 160 points. Subjects in the favorable condition received “HHH” suggestions, which


provided the subject 210 points. Subjects in the no offer condition received the word “NONE” from the third party on all seven rounds.

Subjects in the control condition bargained without a third party, and thus did not receive any power or suggestion manipulations.

Dependent Variables

Subjects had two options for sending messages to the other parties on each round: They could choose from a list of 20 messages or they could send their own message. Most of the provided messages were similar to ones used in previous research (e.g., Carnevale & Conlon, 1988). The computer recorded the proposals, the messages, and the time spent selecting messages. All negotiations were interrupted after the seventh round. Everyone then responded to a 35-item questionnaire, which consisted of a number of 5- and 6-point Likert style items that asked subjects their perceptions of the negotiation process (e.g., “How cooperative are you trying to be toward your opponent in the negotiation?’’, not cooperative at all [ 11 to extremely cooperative [6]), the third party (e.g., “How concerned is the third party that you get a good outcome?”, not concerned at all [ 11 to very concerned [6]), the suggestions made by the third party (e.g., “How fair are the third party’s settlement proposals?”, extremely unfair [I J to extremely fair [6]), and the behavior of their opponent (e.g., “To what extent are your messages influencing the behavior of your opponent?”, they are having no effect at all [ 11 to they are having a great deal ofeffect [6]). Upon completion of the questionnaire, subjects were informed that the study was finished. A complete explanation of the experiment was provided to all subjects over a 3-day period after the last subjects were run. The lottery money was also distributed at this time.

Results

Questionnaire Measures

The relevant perceptual measures on the questionnaire were factor analyzed using VARIMAX rotation. Eight factors with eigenvalues greater than 1 .O emerged which cumulatively accounted for 63% of the variance. Table 2 shows the rotated factor pattern and the loadings for each questionnaire measure. The first factor was labeled “Third party acceptability” and included measures of disputants’ satisfaction with, acceptability of, and helpfulness of the third party. The second factor, labeled “Want third party involved,” included measures of the subjects’ need for third party intervention, desire for third party involvement, and attempts to preserve and improve relations with the third party.

Tabl

e 2

Fact

or A

naly

sis of

Que

stio

nnai

re M

easu

res

Mea

sure

Fact

or 1

: A

ccep

tabi

lity

of th

e th

ird p

arty

Th

ird p

arty

acc

epta

ble

Satis

fact

ion

with

third

par

ty

Third

par

ty h

elpf

ul

Follo

w th

ird p

arty

’s s

ugge

stio

n Th

ird p

arty

impo

sitio

n ac

cept

able

Nee

d th

ird p

arty

’s h

elp

Tryi

ng to

pre

serv

e re

latio

nshi

p w

ith th

ird p

arty

Tr

ying

to im

prov

e re

latio

ns w

ith th

ird p

arty

W

ant t

hird

par

ty in

volv

ed

Third

par

ty s

tand

s to

gain

from

neg

otia

tion

Third

par

ty c

once

rned

for s

ubje

ct’s

out

com

e Th

ird p

arty

con

cern

ed fo

r opp

onen

t’s o

utco

me

Third

par

ty c

once

rned

for o

wn

outc

ome

Fact

or 2

: W

ant t

hird

par

ty in

volv

ed

Fact

or 3

: Pe

rcei

ved

third

par

ty c

once

rn

0

Fact

or

0 f 0

Z

rn +

12

34

56

78

.78

-.06

.02

-.13

.03

.07

-.04

.03

.88

-.03

.04

-.06

-.01

.06

.09

.08

.82

.15

.14

-.04

.05

-.05

.12

.05

.63

.19

.03

.28

.03

.07

-.04

.03

.78

-.06

.02

-.13

-.01

-.07

-.05

-.09

.11

.53

-.09

.30

-.23

-.39

-.11

-.lo

.0

7 .8

5 -.0

1 .1

0 .1

7 .0

5 -.0

2 -.0

2 3

6

.04

.03

.14

.24

.04

-.06

.31

.62

-.I7

.l

l -.1

8 -.2

2 .0

1 .0

6

-.02

.13

-45

.18

.17

.08

-.36

.26

.17

.I3

-75

-.12

-.03

-.I5

-.1

1 .I5

-.05

-.17

-76

-.09

-.04

.13

-.02

-.05

.01

.01

-60

.28

.OO

-.11

.17

-.08

(tabl

e co

ntin

ues)

Tabl

e 2

(con

tinue

d)

Fact

or

Mea

sure

I

23

45

67

8

Fact

or 4

: D

ispu

tant

self-

inte

rest

N

eed

to b

e st

rong

to a

void

third

par

ty p

ress

ure

Impo

rtant

to g

et a

goo

d ou

tcom

e

Mes

sage

s in

fluen

cing

opp

onen

t M

essa

ges

influ

enci

ng th

ird p

arty

Fa

ctor

6:

Dis

puta

nt c

oope

rativ

enes

s B

ehav

ing

coop

erat

ivel

y in

neg

otia

tion

Tryi

ng to

impr

ove

rela

tions

with

opp

onen

t

Third

par

ty b

iase

d Th

ird p

arty

pro

posa

ls u

nfai

r

Pow

er in

neg

otia

tion

Prev

ent i

mpr

oved

rela

tions

bet

wee

n th

ird

party

and

opp

onen

t

Fact

or 5

: M

essa

ges i

nflu

entia

l

Fact

or 7

: Th

ird p

arty

bia

sed

Fact

or 8

: D

ispu

tant

’s p

erce

ived

pow

er

-.04

.25

.03

-.04

.18

-. 1 1

.54

.81

-.03

.10

.02

.04

-.08

.03

.I5

-.08

.OO

-.05

.33

.23

-.04

.08

-.01

.14

.80

.58

.02

-.I8

.oo

.2

0 .0

4 .0

7

.08

.03

-.04

.I7

-.22

.01

.24

.oo

-.11

.25

.I3

.12

-.I 1

.6

2 .8

1 -.0

2 -I 9

.04

A E A 0

.04

.86

.42

-.05

.05

-.11

.03

-.02

.0

6 -.o

1 .0

3 .1

3 -.2

1 .0

8 -.0

6

.06

-.06

.16

-.07

-.04

-u

.78

0 5 A

.57

.01

.03

.I4

-.37

.oo

.13

-.27

.I4

.15

Perc

enta

ge o

f var

ianc

e ex

plai

ned

.I7

.ll

.09

.07

.06

.05

A

.05

0

~ W

-I

.05

1098 CONLON ET AL.

Table 3

Examples of Messages Used by the Disputants

Assertive Listen New York, you have to give in more or we won’t settle this. Product manager: What kind of a suggestion is that? I’ll never agree. I am more valuable to the company than you are.a Give up a little more you creep.b

Why don’t we examine all the issues at once and look for tradeoffs? All three of us should be direct, honest, and open with each other. We should be direct, honest, and open with each 0ther.a Your offer is asking too much, mine is much more even, it’s fairer.b

If you agree to my proposal I will give you some extra lottery points. Product manager: Help me and I’ll give you money if I win the lottery. Help me and I’ll give you money if I win this lottery.

Please help the two of us reach a mutually beneficial agreement. Please force the New York manager to make more concessions. Someone should force you to make more c0ncessions.a Take a stand product manager.b

Product manager: Stay out of the negotiation. I will get back to you later about this. I have nothing to say to you at this time.a

You and I have a lot more in common than you and the New York

Let’s ignore the product manager and try to do things without him. Let’s ignore the company’s interests and try to do things ourse1ves.a I am attempting to make New York give in to us, so if I don’t contact you

for a while bear with me. I will still split winnings with you if you pick HHH.b

Rationality

Exchange

Upward appeal

Blocking

Coalitions

manager.

Ingratiation I am trying to be cooperative and c0nsiderate.a Thank you for the proposal, I agree.b I agree with the product manager’s offer and I think you should to0.b

Note. Messages without subscripts were provided to subjects in all conditions, except: aMessage was provided to subjects in control condition; bMessage was generated by subject.


The third factor, labeled “Perceived third party concern,” included measures that asked the subjects’ beliefs regarding the third party’s concern for the subject’s, the opponent’s, and the third party’s outcomes in the negotiation. The fourth factor, labeled “Disputant self-interest,” consisted of subjects’ beliefs that it was important to get a good outcome, and ratings of how important it was to create an appearance of strength in the negotiation so that the third party did not push them around. The fifth factor, labeled “Messages influential” consisted of subjects’ ratings of how much influence their messages had on the third party and their opponent.

The sixth factor, “Disputant cooperativeness,” consisted of measures of the subject’s cooperativeness in the negotiation, and subject’s desires to improve relations with their opponent. The seventh factor, labeled “Third party biased” consisted of subject’s ratings of how biased the third party was, and the perceived fairness of the third party’s recommendations. The eighth factor was labeled “Disputant’s perceived power” and consisted of self-reports of how powerful the subject was in the negotiation, and ratings of how hard they were trying to prevent improved relations between the third party and the subject’s opponent.

Eight scale scores, reflecting the factors reported above, were constructed by multiplying each subject’s response to each item in the appropriate scale by its factor loading, summing the items in each factor, and dividing by the number of items. The average correlation within each factor was .30 (p < .001), while the average correlation between each factor was .03 (ns). Analyses below focus only on those factors related to our hypotheses.

Messages Sent by Disputants

All messages were classified by five trained assistants and subsequently placed into categories of influence tactics identified by Kipnis et al. (1980). Examples of messages provided to and sent by disputants appear in Table 3. Interrater comparisons revealed a 70% level of agreement in categorization, which appears adequate for research purposes (Nunnally, 1978).

Proportion data for each subject’s use of the seven message types were constructed for messages sent to the third party, the opponent, or to both and were analyzed in separate analyses of variance.3 Data reported below are mean proportions for the seven message types.

3Subjects were not forced to send messages, the degrees of freedom vary. Messages sent to the third party have 187 degrees of freedom; messages sent to the opponent have 212 degrees of freedom; messages sent to both parties have 137 degrees of freedom.

Tabl

e 4

0

0

0 0

Man

ipul

atio

n C

heck

s for

the

Inde

pend

ent

Var

iabl

es Lo

w

Hig

h F oz rn

Po

wer

po

wer

po

wer

F(

1, 2

26)

Exte

nt th

ird p

arty

can

impo

se o

utco

me

on y

ou

1.93

3.

55

134.

02

Am

ount

of c

ontro

l thi

rd p

arty

has

in n

egot

iatio

n 1.

93

3.45

13

1.06

H

ow p

ower

ful i

s th

ird p

arty

1.

86

3.50

12

7.84

D

!-

Unf

avor

- U

nint

e-

Com

- In

te-

Favo

r-

Sugg

estio

ns

able

gr

ativ

e pr

omis

e gr

ativ

e ab

le

Non

e F

(5, 2

26)

Third

par

ty f

avor

s sub

ject

1.

73,

3.67

b 3.

97bc

4.

38,

6.10

d 3.

75b

56.6

5 Th

ird p

arty

impr

oves

Satis

fact

ion

with

third

su

bjec

t’s p

ayof

f 2.

61,

3.74

b 3.

97b

4.24

b 5.

40,

4.25

b 18

.29

party

’s o

ffer

s 1.

68d

2.46

, 2.

89,

3.671

, 5.

08,

1.25

d 44

.95

Not

e. A

ll F

valu

es a

re s

igni

fican

t at p

< .0

01. M

eans

for t

he s

ugge

stio

n m

ain

effe

cts

in th

e sa

me

row

w

ith d

iffer

ent s

ubsc

ripts

diff

er si

gnifi

cant

ly a

tp <

.05

usin

g N

ewm

an-K

uels

sim

ulta

neou

s com

paris

ons.

Ite

ms

chec

king

the

pow

er m

anip

ulat

ion

are

all 5

-poi

nt s

cale

s; th

e fir

st tw

o ite

ms

chec

king

the

sugg

es-

tions

man

ipul

atio

n ar

e 7-

poin

t sca

les,

and

the

last

item

is a

6-p

oint

scal

e.

Tabl

e 5

Diff

eren

ces D

ue to

Third P

arty

Sug

gest

ions

a

Unf

avor

- U

nint

e-

Com

- In

te-

Favo

r-

Mea

sure

ab

le

grat

ive

prom

ise

grat

ive

able

N

one

P

Dis

puta

nt’s

per

ceiv

ed p

ower

A

ccep

tabi

lity

of th

e th

ird p

arty

W

ant t

hird

par

ty in

volv

ed

Third

par

ty b

iase

d A

sser

tive

mes

sage

s se

nt to

third

par

ty

Upw

ard

appe

als

sent

to th

ird p

arty

Ex

chan

ge m

essa

ges

sent

to th

ird p

arty

C

oalit

ion

mes

sage

s se

nt to

third

par

ty

Rat

iona

lity

mes

sage

s se

nt to

opp

onen

t R

educ

tion

in v

alue

of o

ffer

to s

elf

Impr

ovem

ent i

n va

lue

of o

ffer

to

from

firs

t to

last

off

er

oppo

nent

from

firs

t to

last

off

er

1.34

2.17

1.

43,

3.321

1 .4

1a

.26b

.l

lab

.05a

b .0

4b

5 1.4

6

5 8.2

9ab

1.34

2.12

2.

33,

2.01

,d

.15b

.6

4a

.03b

.0

3 ab

.04b

55.5

1

60.3

8ab

1.47

2.

17c

2.12

1.

81d

.04b

.5O

a .2

6a

.06a

b .2

8a

56.3

5

64.7

3,

1.44

1.

49

2.65

b 2.

99,

2.29

2.

38

2.11

, 2.

731,

.1

2b

.04b

.5

2a

.52,

.1

4ab

.08a

b .o

ob

.15a

.0

8b

.06b

35.6

0 27

.13

67.7

4,

33.3

81,

1.38

1.

76d

2.26

2.

23c

.07b

* 1o

ab

.06a

b ga

b

.64a

43.0

0

0.54

25

.03 *

* *

1.44

31

.47*

**

9.57

***

3.58

**

2.44

* 2.

45*

-I A 0

3.33

**

E 9 2 2.

24*

4

W

rl

54.0

0ab

2.35

*

z rn A

aMea

ns in

the

sam

e ro

w w

ith d

iffer

ent s

ubsc

ripts

diff

er s

igni

fican

tly a

tp <

.05

usin

g N

ewm

an-K

uels

sim

ulta

neou

s co

mpa

rison

s. b

Mes

sage

s sen

t to

the

third

par

ty h

ave

five,

187

degr

ees o

f fre

edom

; mes

sage

s se

nt to

the

oppo

nent

ha

ve fi

ve, 2

12 d

egre

es o

f fre

edom

. All

othe

r mea

sure

s ha

ve fi

ve, 2

26 d

egre

es o

f fre

edom

. -L

-L

*p

< .0

5. *

*p <

.01.

***

p < .0

01.

2

11 02 CONLON ET AL.

Disputant Offer Proposals

The settlement offers proposed by subjects were analyzed in several ways. The total value of the offer, the value to the subject, and the value to the opponent4 were examined for each round of negotiation. In addition, the averages for these three measures across all rounds of bargaining were com- puted. Finally, we subtracted the “value to self” of the last proposal made by the subject from the “value to self” of the first proposal made by the subject to determine the degree to which disputants demanded less of the resources for themselves over time. We subtracted the “value to opponent” of the first offer made by the subject from the “value to opponent” of the last offer made by the subject to determine the degree to which disputants improved their offer to their opponent over time.

Manipulation Checks

Examination of the manipulation checks for third party power and suggestions indicated that the manipulations were successful (Table 4). Subjects with a high power third party believed that the third party was more capable of imposing an outcome, had more control in the negotiation, and was more powerful than did subjects with a low power third party.

Regarding the manipulation of third party suggestions, one can see that as point values from third party suggestions increase, satisfaction with the third party’s offer increases, beliefs that the third party favors the subject increase, and beliefs that the third party improves the subject’s payoffs increase.

Tests of the Hypotheses

Thirdpartypower. Subjects involved with a high power third party believed they had less power in the negotiation than subjects involved with a low power third party ( M = 1.28 and 1.54), respectively, F( 1, 227) = 13.47, p <.001. This supports our first hypothesis.

Hypothesis 2a predicted that disputants with a high power third party would demand less in negotiation and offer more to their opponent than disputants with a low power third party. Unfortunately, there was no evidence from the offer data to support this prediction.

Hypothesis 2b predicted that disputants involved with a more powerful

4The value of the subject’s offer to the opponent (which can be seen in Table 1) was the sum of the points to the other on the three issues for every offer, based on the a priori assumption that the other bargainer had the complementary integrative bargaining table (cf. Pruitt, 1981a; Bazerman, Magliozzi, & Neale, 1985).


third party would rely on ingratiation, rationality, exchange, and upward appeal messages to a greater extent than those involved with a low power third party. Significant differences among some of the message types sent by subjects provide some support for this hypothesis. Subjects involved with more powerful third parties sent the third party a greater proportion of ingratiation messages (M = .10 and .04), respectively, F(1, 187) = 6.38, p <.01, and a greater proportion of upward appeal messages (M = .62 and .43), respectively, F(1, 187) = 11.65, p < .001, than did subjects involved with less powerful third parties. Subjects with low power third parties sent more upward appeal messages when the message was sent to both the third party and their opponent ( M = .1 1 and .02), respectively, F(1,137) = 6 . 2 5 , ~ < .05. However, proportions of exchange and rationality messages did not differ.

Our manipulation of third party power affected several other perceptual measures. Disputants with more powerful third parties perceived the third party to be more acceptable ( M = 2.1 1 and 1.93), respectively, F( 1,226) = 4.48, p < .05, and wanted the third party involved more so than disputants with less powerful third parties ( M = 2.36 and 2.05), respectively, F(1,226) = 19.14,

Third party suggestions (Table 5). Subjects who received integrative suggestions reported that the third party was more acceptable than subjects who received compromise or unintegrative suggestions. However, disputants who received compromise suggestions perceived the third party to be less biased than subjects who received integrative or unintegrative suggestions. In fact, subjects who received compromise suggestions perceived their third party to be less biased than did all other subjects. These two patterns provide strong support for our third hypothesis.

While not predicted, several other advantages appeared to accrue from having a third party propose compromises. Subjects who received compromise suggestions from the third party also responded by sending more messages that indicated a witlingness to bargain in good faith; they sent the third party a greater proportion of exchange messages than did subjects who received unintegrative suggestions, and they sent their opponent more rationality messages than did subjects in the unintegrative or integrative conditions (or any condition where the third party made a suggestion).

Hypotheses 4 and 5 concern comparisons between favorable and unfavorable suggestions. We predicted that disputants who received favorable third party suggestions would (4a) perceive that they had more power in the negotiation, (4b) find the third party to be more acceptable, and (4c) desire third party involvement more so than disputants who receive unfavorable suggestions. A priori contrasts of the means in these two conditions showed support for two of the three measures: Favorable suggestions did lead to greater ratings

p -= .001.

11 04 CONLON ET AL

232

226

220

214

208

202

196

190

184

178

172

166

c 0 P)

3 rn F

- -

-

- -

-

- -

-

-

- -

NO THIRD PARTY

FAVORABLE

UNFAVORABLE

NO SUGGESTIONS

INTEGR ATlVE

UNINTEGRATIVE

COMPROMISE

160 ’ 1 2 3 4 5 6 7

Negotiation Round

Figure 1. The value of the disputant’s offer proposal to self by round as a function of the third party’s suggestion.

of acceptability, F( 1, 226)= 7 1.59, p < .OO 1, and marginally greater desire for third party involvement, F( 1, 226) = 3.28, p < .07, but there was no difference in ratings of perceived power in the negotiation, F( 1, 226) = 1.39, p < .23.

Hypothesis 5a predicted that subjects receiving favorable suggestions would propose offers worth more to themselves and less to their opponents than subjects who received unfavorable suggestions. Figures 1 and 2 document the decrease in demands made by subjects, and the improvement in offers made to


104

96

88

80

72 C m c o 64 Q Q 0

c

0 56 c

a 2 48 Q >

40

32

24

16

8

... 0 iNTEGRATiVE

COMPROMISE

UNINTEGRATIVE

NO SUGGESTIONS

UNFAVORABLE

FAVORABLE

NO THIRD PARTY

1 2 3 4 5 6 7

Negotiation Round

Figure 2. The value of the disputant’s offer proposal to the opponent by round as a function of the third party’s suggestion.

opponents, respectively, for the various suggestions conditions. As can be seen in Figure 1, subjects whose third party made favorable suggestions reduced their own demands by considerably less than did subjects who received unfavorable suggestions (Mean reduction = 27.13 and 5 1.46 points, respectively), F( 1,226) = 4 . 9 1 , ~ < .03. Also, as seen in Figure 2, subjects whose third party made unfavorable suggestions improved the value of their offer to their opponent far more than did subjects who received favorable suggestions,

11 06 CONLON ET AL.

(Mean improvement = 58.29 and 33.38 points, respectively), F(1,226) = 4.93, p < .03. Thus, we have considerable support for this hypothesis.

Hypothesis 5b predicted that disputants who received favorable suggestions would send greater proportions of coalition messages to the third party. While subjects who received favorable suggestions did send coalition messages in greatest proportion, the difference was not significant when contrasted with subjects who received unfavorable suggestions.

We also predicted an interaction between our power manipulation and favorablelunfavorable suggestions on perceptions of power and the bargaining behavior of negotiators. Unfortunately, there were no interactions between our two manipulations on these measures.

Hypothesis 7 , which stated that the offers made by subjects who bargained with no third party would differ significantly from the offers made by subjects whose third party made no suggestions, was not supported. Thus, Rubin and Brown’s (1975) contention that the mere presence of a third party should positively influence negotiations was not affirmed in this study. However, Figures 1 and 2 show that subjects with no third party behaved more selfishly than subjects involved with active third parties. The value of their offers to themselves remained the highest throughout the negotiation. Their offers on round 4, F(6,258) = 3.22, p < .O 1, round 5, F(6,249) = 3.00, p < .O 1 , and round 6, F(6,254) = 2 . 4 9 , ~ < .05, were worth more to themselves than were the offers made by all subjects who received symmetrical (integrative, compromise, or unintegrative) suggestions. These effects attenuate over time however, and disappear on the last round.

Supplementary Analyses

Offer proposals. An analysis of the joint benefit of subjects’ offers to both parties demonstrates that integrative suggestions from the third party do improve the total value of the offers proposed by the disputants. Beginning with the third round (the onset of the suggestions manipulation), the total value of the offers made by subjects who received the integrative suggestion increased dramatically (contrasts mentioned below are significantly different at the .05 level using Newman-Kuels comparisons). In the third round, subjects who received integrative suggestions proposed more valuable offers than subjects in all other conditions, F(6, 255) = 7.31, p < .001. The same is true for round 4 , F(6, 258) = 4.84, p < .001; round 6 , F(6, 254) = 6.23, p < .001; and round 7 , F(6,246) = 7 . 6 3 , ~ < .001. The value of the offers proposed on round 5 by subjects in the integrative condition declined slightly, though this can be explained by the fact that third parties made no offer proposals by this round.

Figure 2 illustrates the process by which an integrative suggestion results


in offers of greatest total value (subjects who received integrative suggestions consistently proposed offers worth more to their opponents than did other subjects. On round 3, F(6,255) = 5 . 2 6 , ~ < .001; round 4, F(6,258) = 5.12, p < .001; round 5, F(6, 249) = 3 . 6 7 , ~ < .01; round 6, F(6, 254) = 5 . 1 0 , ~ < .001; and round 7, F(6, 246) = 4.61, p < .001 (Subjects who received integrative suggestions proposed offers of greater value to their opponent than did subjects who received unfavorable, favorable, or no offers, as well as subjects who bargained without a third party in the control condition).

Discussion

Two interesting conclusions can be drawn from this study: (a) The amount of power third parties possess appears to matter less than what third parties do; and (b) when third parties suggest a compromise solution, a number of benefits occur for both third parties and negotiators. We begin with a discussion of the muted role of power, and then focus on the role of third party suggestions on negotiation.

Third party power. The fact that disputants believed they had more power under mediation is consistent with Brett and Goldberg’s (1983) assertion that mediation takes away less power (in the form of decision control) from disputants. Disputants with more powerful third parties found these third parties to be more acceptable, and they were more receptive to third party involvement. While these last two findings may simply reflect frustration with the progress of negotiations (no agreement yet after seven rounds of negotiation), it may also reflect pressures to acquiesce to the greater power this intervenor could wield relative to a mediator. Such an explanation is consistent with the greater use of ingratiation messages sent to powerful third parties. Ingratiation is commonly seen as a tactic used to gain favor from those with more power, and a mechanism by which to achieve status as a member of an ingroup which includes one’s manager (Wagner & Hollenbeck, 1992, p. 475).

While the perceptual and message data suggest that disputants with powerful third parties were less powerful and open to concession-making, there is no evidence of third party power affecting disputant offer proposals. Thus, the link between feeling less powerful and behaving in a conciliatory manner toward one’s opponent appears to be weak. Perhaps if subjects knew that the third party had to impose a settlement, perhaps they would have behaved more coopera- tively. In fact, knowing with certainty that the third party would impose a settlement (as in an arbitration procedure), may have reserved the predicted interaction between the power and suggestions manipulations. A stronger test of our sixth hypothesis would compare mediation to an arbitration procedure, where disputants would know that the arbitrator would impose an outcome.

11 08 CONLON ET AL.

Unintegrative, compromise, and integrative suggestions. While subjects who received integrative suggestions perceived the third party to be more acceptable and proposed offers of greater joint benefit than did subjects who received unintegrative or compromise suggestions, these offers did not provide more points to their opponent than did the offers of subjects who received unintegrative or compromise suggestions. In fact, there is considerable evidence to suggest that compromise suggestions provide the most benefits toward a successful negotiation.

The appearance of third party fairness is crucial for mediators because their suggestions must be voluntarily accepted by the disputants. From the third party’s perspective, compromise suggestions are beneficial because negotiators perceive third parties who make such suggestions as less biased. Thus, one advantage that a compromise suggestion may have over other settlements (even more valuable integrative suggestions) is a symbolic advantage accrued by the third party: A compromise suggestion (where each disputant “won” half of every issue) makes a third party appear to be more fair than does an integrative suggestion (where entire issues were traded).

Others have recognized the importance of third party fairness. Greenberg (1988, 1990) suggests that managers perform some actions in an effort to “look fair” (as opposed to “be fair”). Tyler (1 989) reports that an important task for third parties is to create an appearance of fairness (e.g., “make a level playing field”). It may be that third party suggestions for compromise accomplish both of these objectives. Third parties might be best served by strategically propos- ing compromise suggestions in organizational disputes as part of an attempt to appear fair and unbiased. After their unbiasedness has been displayed for both sides to see, they may then be more successful in lobbying for other types of settlements.

In fact, third parties may want to initially propose compromise settlements even when they perceive that an integrative solution is possible. In this way, third parties can also reap the positive benefits compromise suggestions have on disputant communication processes. Compromise suggestions were associated with greater use of rationality and exchange messages by negotiators: Such messages are likely to lead to a more productive negotiation and future relationship among the disputants than are negotiations characterized by high levels of assertiveness messages, for example.

Our findings suggest that third party suggestions can have a “surface- value” perceptual effect such as apparent fairness, bias, and so forth, and an objective value, the worth in points from a payoff table. This study supports this distinction, and shows that a higher value on one dimension (e.g., points from the integrative suggestion) need not correspond with a higher value on the other (perceived bias of the third party). Thus, there appear to be situations

THIRD PARTY POWER 11 09

where suboptimizing can in fact be a more effective third party strategy than optimizing.

Of course, it is possible that other features of the dispute may explain the favorable effects of compromise suggestions. For instance, the tradeoff of the cutoff money and promotion issues in the integrative suggestion may involve counternormative exchanges on two issues that do not seem to go together. Research by Foa and Foa (1975) on resource types and exchange suggests that some tradeoffs may seem more appropriate than others. Thus, third parties who suggest tradeoffs on two issues that seem unrelated may appear biased. Or, the construction of the outcome may have violated disputants’ expectations about what a fair outcome would be. For example, in a single issue dispute, Conlon et al. (1989) found that compared to subjects who received all-or-nothing outcomes, those who received “split” outcomes (where the disputant lost either one or two thirds of the resource in dispute) from a third party rated the third party less favorably. Future research that examines the impact of these types of tradeoffs on judgments of impartiality would shed some light on the validity of these alternative explanations.

Finally, we must remember that the structure of the task plays a role in explaining why compromise is so favorably viewed. The integrative bargaining paradigm used in this study creates conditions where bargainers have little information regarding their opponent’s payoffs. This uncertainty is likely to be an important boundary condition limiting the applicability of these findings. If disputants also knew their opponent’s payoff structure, we assume they would see integrative suggestions as equally unbiased. Of course, there are probably few negotiations in life where opponents preferences are this well understood.

Other suggestions. Turning to the other types of suggestions, we note that the consequences of receiving favorable third party suggestions were sometimes similar to the consequences of receiving unfavorable third party suggestions. Subjects who received favorable or unfavorable suggestions admitted that their third party was more biased than did disputants in other conditions. Thus, both favorable and unfavorable bias can have the same (deleterious) effect on negotiation.

Favoring one party over another can take at least two forms, both of which have obvious organizational analogs. managers may openly favor one disputant over another as in the present study when third parties proposed favorable or unfavorable suggestions. This type of “overt support” bias may make mediators particularly ineffective due to their lack of decision control. Bias may also be manifest in the prior relationship of the mediator to the disputants: For example, Touval and Zartman (1989) point out that third parties in international disputes are often more closely aligned with one disputant over

11 10 CONLON ET AL.

another (As when the United States attempted to mediate a settlement between the United Kingdom and Argentina over the Falkland Islands).

Carnevale (1986b) argues that there are a number of similarities between international disputes and organizational disputes where a manager is more closely affiliated with one party over another. This type of “structural bias” may be less problematic than the overt support bias previously mentioned. Some very recent work is now examining issues of partisanship in third party-assisted negotiations (e.g., Conlon & Ross, 1993; Arad & Carnevale, in press).

The mere presence of a third party did not facilitate larger concessions from disputants compared to bargainers with no third party. However, as suggested by one reviewer of this manuscript, “We should not anthropomor- phize the computer.” The results may have been different if disputants actually saw a person monitoring their interactions. The results do affirm the benefits emanating from third parties who propose suggestions that are even-handed and favorable to both sides, particularly in the early stages of negotiation. Certainly, more research on the dynamics of third party intervention is neces- sary.

The laboratory context of this study, the short-term relationship between the disputants, the manner in which disputants communicated with one another, the simplicity and repetitiveness of the third party’s intervention, and the use of student subjects warrant caution in generalizing these results to managers in organizational settings. Nevertheless, the dispute itself was taken from an actual conflict that occurred in a large organization, and the proliferation of networked computers with electronic mail capabilities, computer conferenc- ing, and employees who work at home rather than in the office offer natural settings for organizational conflicts that are not far removed from the environ- ment created in the laboratory.

On the other hand, we suspect that our subjects did not always act as real disputants in an organizational dispute would have. For instance, since subjects knew that their opponent and their third party were in reality their classmates, they may have behaved more contentiously than would disputants in actual organizational disputes. In addition, we would expect that the justifications given by the third party for their behavior would influence disputant reactions to these types of settlements, and the present study did not allow for such explanations to be given. Research by Bies and Shapiro (1987) indicates that the accounts used by decision makers to explain their behavior can have a powerful effect on how outcomes are perceived. Future research analyzing third party suggestions or settlements should examine what effect different types of explanations have on disputants’ post-negotiation impressions.


References

Adams, J. S . (1965). Inequity in social exchange. In L. Berkowitz (Ed.), Advances in Social Psychology, Vol. 2 (pp. 267-299). New York, NY: Academic Press.

Allison, S . T., & Messick, D. M. (1990). Social decision heuristics in the use of shared resources. Journal of Behavioral Decision Making, 3,

Arad, S., & Carnevale, P. J. (in press). Partisanship effects in judgements of fairness and trust in third parties. Journal of Conflict Resolution.

Bartunek, J. M., Benton, A. A., & Keys, C. B. 1975. Third party intervention and the bargaining behavior of group representatives. Journal of Conflict Resolution, 19,532-557.

Bazerman, M., Magliozzi, T., & Neale, M. A. (1985). Integrative bargaining in a competitive market. Organizational Behavior and Human Decision Processes, 35,294-3 13.

Bazerman, M. H., and Neale, M. A. (1983). Heuristics in negotiation: Limita- tions to effective dispute resolution. In M.H. Bazerman and R. J. Lewicki (Eds.), Negotiating in Organizations (pp. 5 1-67). Beverly Hills, CA: Sage.

Bies, R. J., & Shapiro, D. L. (1987). Interactional fairness judgments: The influence of causal accounts. Social Justice Research, 1, 199-2 18.

Brett, J. M., & Goldberg, S . B. (1983). Grievance mediation in the coal industry: A field experiment. Industrial and Labor Relations Review, 37,

Carnevale, P. J. (1 986a). Strategic choice in mediation. Negotiation Journal,

Carnevale, P. J. (1986b). Mediating disputes and decisions in organizations. In M. Bazerman, R. Lewicki, & B. Sheppard (Eds.), Research on negotiation in organizations, Vol. 1 (pp.25 1-269). Greenwich, CT: JAI Press.

Carnevale, P. J., & Conlon, D. E. (1988). Time pressure and strategic choice in mediation. Organizational Behavior and Human Decision Processes, 42,

Carnevale, P. J., & Pruitt, D. G. (1992). Negotiation and mediation. Annual Review of Psychology, 43,654 1.

Conlon, D. E., Carnevale, P. J., & Murnighan, J. K. (1994). Intravention: Third party intervention with clout. Organizational Behavior and Human Deci- sion Processes, 57, 387-410.

Conlon, D. E., & Ross, W. H. (1993). The effects of partisan third parties on negotiator behavior and outcome perceptions. Journal ofApplied Psychol-

195-204.

49-69.

2, 41-56.

11 1-133.

ogy, 78,280-290.

1112 CONLON ETAL.

Conlon, D. E., Lind, E. A., & Lissak, R. I. (1989). Nonlinear and nonmonotonic effects of outcome on procedural and distributive fairness judgments. Journal of Applied Social Psychology, 19, 1085-1099.

ConIon, D. E., & Fasolo, P. M. (1990). The influence of speed of third party intervention and outcome on negotiator and constituent fairness judgments. Academy of Management Journal, 33, 833-846.

Deutsch, M. (1 975). Equity, equality and need: What determines which value will be used as the basis for distributive justice? Journal of Social Issues,

Foa, U. G., & Foa, E. B. (1975). Resource theory of social exchange. Morris- town, NJ: General Learning Press.

Greenberg, J. (1 987). A taxonomy of organizational justice theories. Academy of Management Review, 12,9-22.

Greenberg, J. (1988). Cultivating an image ofjustice: Looking fair on the job. Academy of Management Executive, 2, 155-157.

Greenberg, J. (1990). Looking fair versus being fair: Managing impressions of organizational justice. In B. M. Staw & L. L. Cummings (Eds.), Research in organizational behavior (Vol. 12, pp. 11 1-157). Greenwich, CT: JAI Press.

Hambrick, D. C., & Finkelstein, S. (1987). managerial discretion: A bridge between polar views of organizational outcomes. In L. L. Cummings & B. M. Staw (Eds.), Research in organizational behavior (Vol. 9, pp, 369- 406). Greenwich, CT: JAI Press.

Harris, R. J., & Joyce, M. A. (1980). What’s fair? It depends on how you ask the question. Journal of Personality and Social Psychology, 38, 165- 170.

Johnson, D., & Pruitt, D. G. (1 972). Preintervention effects of mediation versus arbitration. Journal of Applied Psychology, 56, 1 - 10.

Kipnis, D., Schmidt, S., & Wilkinson, I. (1980). Interorganizational influence tactics: Explorations in getting one’s way. Journal ofApplied Psychology,

Kolb, D. (1985). To be a mediator: Expressive tactics in mediation. Journal of Social Issues, 41, 11-26.

Kolb, D., & Sheppard, €3. (1985). Do managers mediate, or even arbitrate? Negotiation Journal, 3, 379-388.

Kressel, K., & Pruitt, D. G., Eds. (1989). Mediation research: The process and eflectiveness of third party intervention. San Francisco, CA: Jossey- Bass.

31, 137-149.

65,440-452.

Laver, M. (1981). The politics ofprivate desires. New York, NY: Penguin. Leventhal, G. S. (1976). Fairness in social relationships. Morristown, NJ:

General Learning Press.


Lowenstein, G. F., Thompson, L., & Bazerman, M. H. (1989). Social utility and decision making in interpersonal contexts. Journal of Personality and Social Psychology, 57,426-44 1.

McGillicuddy, N. B., Welton, G. L., & Pruitt, D. G. (1987). Third party intervention: A field experiment comparing three different models. Jour- nal of Personality and Social Psychology, 53, 104-1 12.

Mintzberg, H. (1973). The nature of managerial work. New York, NY: Harper & Row.

Murnighan, J. K. (1986). The structure of mediation and intravention: Com- ments on Carnevale’s strategic choice model. Negotiation Journal, 2,

Notz, W., & Starke, F. (1978). Final offer vs. conventional arbitration as modes of conflict management. Administrative Science Quarterly, 23, 189-203.

Nunnally, J. C. (1978). Psychometric theory. New York, NY: McGkaw Hill. Pruitt, D. G. (1981a). Negotiation behavior. New York, NY: Academic Press. Pruitt, D. G. (1981b). Kissinger as a traditional mediator with power. In J. Z.

Rubin (Ed.), Dynamics of third party intervention: Kissinger in the Mid- dle East (pp. 136-147). New York, NY: Praeger.

Pruitt, D. G., & Johnson, D. (1970). Mediation as an aid to face saving in negotiation. Journal of Personality and Social Psychology, 14,239-246.

Rubin, J. Z., & Brown, B. R. (1975). The social psychology of bargaining and negotiation. New York, NY: Academic Press.

Schelling, T. (1960). The strategy of conflict. Cambridge, MA: Harvard Uni- versity Press.

Tannenbaum, R., & Schmidt, W. (1973, May-June). How to choose a leader- ship pattern. Harvard Business Review, 51, 162-180.

Thompson, L., & Hastie, R. (1990). Judgment tasks and biases in negotiation. In B. H. Sheppard, M. H. Bazerman, & R. J. Lewicki (Eds.), Research in negotiation in organizations (Vol. 2, pp. 3 1-54). Greenwich, CT: JAI Press.

Touval, S . , & Zartman, I. W. (1989). Mediation in international conflicts. In K. Kressel & D. G. Pruitt (Eds.), Mediation research: The process and effectiveness of thirdparty intervention (pp. 1 1 5-137). San Francisco, CA: Jossey-Bass.

Tyler, T. (1989). The psychology of procedural justice: A test of the group value model. Journal of Personality and Social Psychology, 57, 830-838.

Wagner, J. A., & Hollenbeck, J. R. (1992). Management of organizational behavior. Englewood Cliffs, NJ: Prentice-Hall.

Zartman, I. W., & Touval, S. (1985). International mediation: Conflict resolution and power politics. Journal of Social Issues, 41,27-45.

351-356.

The Influence of Third Party Power and Suggestions on Negotiation: The Surface Value of a...

Documents

Transcript of The Influence of Third Party Power and Suggestions on Negotiation: The Surface Value of a...