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The service-profit chain model (Heskett, Jones, Loverman, Sasser, & Schlesinger, 1994) highlights the well-documented relationship between employee and customer attitudes suggesting that employees who are satisfied and engaged with their work provide better customer service resulting in higher levels of customer satisfaction and, ultimately, driving firm revenue. The authors propose an expansion of the service-profit margin identifying the leadership behaviors that create positive employee attitudes and engagement. Specifically, the authors suggest that leaders who focus on recognition, involvement, growth and development, health and safety, and teamwork (Kelloway, Nielsen, & Dimoff, 2017) create a psychologically healthy workplace for customer service providers and, ultimately, an enhanced customer experience.

Purpose – Negotiations can be stressful, yet are unavoidable in many organizations. Members of organizational workgroups for instance need to negotiate about issues such as task division and different ideas on how to complete a project. Until recently little research effort has been directed to understanding negotiators' stress responses. Similarly, little is known about the consequences that these stress responses may have on negotiation outcomes. In this chapter we argue that group members' physiological stress responses are a key determinant of the outcomes of intragroup negotiations.

Design/Methodology/Approach – We focus on two distinct physiological responses (i.e., threat and challenge) and argue that relative to threat responses, challenge responses will be related to superior information sharing, information processing, and decision-making quality. Moving beyond a uniform relationship between physiological reactions and negotiators' behaviors and outcomes, we also focus on two moderating characteristics: the relative power of group members, and whether the negotiation is purely task related, or co-occurs with relationship issues. We discuss effects on both the individual and the group level, extend our ideas to other forms of negotiations, and end with practical and theoretical implications.

Originality/Value – A better understanding of psychophysiological processes during intragroup negotiations may help to explain when intragroup disagreements help or hinder group outcomes and, therefore, may help to solve the paradox of intragroup conflict.