Organizational Conflict Management

Organizational Conflict Module 4

Sreenath B. Roll No.45

Organizational Conflict • The clash that occurs when the goal-directed behavior of one group blocks the goals of another. • Stakeholders compete for the resources that an organization produces. • Shareholders want dividends, employees want raises. • An organization must manage both cooperation and competition among stakeholders to grow and survive. • All stakeholders have a common goal of organizational survival, but not all goals are identical. • Organizational conflict occurs when a stakeholder group pursues its interests at the expense of other stakeholders.

Organizational Conflict • Given the different goals of stakeholders, organizational conflict is inevitable. • Conflict is associated with negative images, such as unions getting angry and violent, but some conflict can improve effectiveness. • When conflict passes a certain point, it hurts an organization.

The Relationship Between Conflict & Organizational Effectiveness A

Organizational effectiveness

High

Low Low

High Level of conflict

How can conflict improve effectiveness?

• Conflict can overcome inertia and introduce change, because conflict requires an organization to re-assess its views. • Different views are considered, and the quality of decision-making is improved. • Beyond a certain point, conflict hurts the organization and causes decline. • Managers spend time bargaining, rather than making decisions. • An organization in decline cannot afford to spend time on decision-making, because it needs a quick response to recover its position. • Groups battle for their interests, no agreement is reached, and the organization floats along, falling prey to inertia.

Pondy’s Model of Organizational Conflict

• Pondy’s model shows conflict as a process of five sequential stages. i.e. latent conflict, perceived conflict, felt conflict, manifest conflict, and conflict aftermath. • Stage 1: Latent conflict – no outright conflict exists, but there is a potential for conflict because of several factors. – According to Pondy, all conflict arises because differentiation leads to the establishment of subunits that have different goals and perceptions.

• Sources of Latent conflict: 1.Interdependence 2.Differences in goals and priorities 3.Bureaucratic factors 3.Incompatible performance criteria 5.Competition for resources

Sources of Latent conflict 1. Interdependence: • As organizations grow and differentiate, subunits want autonomy. Marketing wants to design advertising. • Desires for autonomy conflict with the organization’s aspirations for cooperation. • As task interdependence increases—that is, moves from pooled to sequential to reciprocal—the potential for conflict increases. • Conflict occurs at the individual, functional, and divisional levels. • If functions were not interdependent, conflict would not exist. Functions would simply perform their tasks. • Eg: Manufacturing would not care what engineering did.

Sources of Latent conflict 2. Differences in goals and priorities exist among different functions. • Manufacturing wants to lower costs. Marketing wants to increase sales. • Incompatible goals create conflict. 3. Bureaucratic factors: Status inconsistencies can result in conflict. Line functions often clash with staff functions. 4. Incompatible performance criteria for subunits lead to conflict. • If an organization rewards cost control, engineering does not comply with marketing’s request for a new product design.

Sources of Latent conflict 5. Competition for scarce resources leads to conflict. Subunits compete for their share of resources. • Increased funding allows a division to grow.

Pondy’s Model of Organizational Conflict

• Stage 2: Perceived conflict —subunits become aware of conflict and begin to analyze it. • Conflict escalates as groups battle over the cause of conflict. • When a subunit perceives its goals to be obstructed, conflict enters the second stage. • Each group seeks the source of the conflict and finds reasons for problems. • Marketing blames poor sales on poor manufacturing quality. • Manufacturing says that marketing is not advertising effectively. Conflict escalates as subunits fight over the origin of the problem.

Pondy’s Model of Organizational Conflict

• Stage 3: Felt conflict—subunits respond emotionally to each other, and attitudes polarize. • Subunits develop polarized attitudes of us-versus-them. Cooperation between subunits declines as well as organizational effectiveness. • Conflict escalates as subunits argue, and small problems escalate to huge, difficult-to-manage, conflicts. • Stage 4: Manifest Conflict—subunits try to get back at each other. • Subunits deliberately impede other subunits. People aggressively promote their own interests at the expense of others. • Fighting and open aggression are common, and organizational effectiveness suffers.

Pondy’s Model of Organizational Conflict

• Once conflict is manifest, coordination between managers and subunits deteriorates, resulting in a decline in effectiveness. • Managers should prevent conflict from reaching the manifest stage to avoid a communication breakdown and a poor conflict aftermath. resolved in a way • Stage 5: Conflict aftermath—conflict is that leaves subunits feeling combative or cooperative. • Every conflict has a conflict aftermath that influences conflict resolution in the future. • If resolved before the manifest stage, conflict will result in a positive aftermath. • If conflict resolution takes a long time or doesn’t occur, future relationships and the culture will be damaged.

Managing Conflict: Conflict Resolution Strategies • Managing conflict is a priority, because conflict impairs organizational culture. • Culture is an important way to control behavior. • Organizations must balance the need for conflict to overcome inertia and promote learning with the prevention and escalation of harmful conflict. • Conflict management techniques depend on problem source. • An organization reduces conflict by structural and attitudinal changes.

Acting at the Level of Structures • Managers can resolve conflict by changing task relationships: 1. An organization may change organizational structures. – – –

A functional structure causes problems, such as communication and measurability problems. A product structure assigns overhead costs more accurately. A functional structure does not reflect the contributions of various functions to a product. A product team structure speeds up product development.

2. Increasing integration can overcome conflicts over resources & subunit orientations. Integrating mechanisms include task forces, teams, and integrating roles. 3. Flattening the hierarchy and decentralizing authority give employees decision-making power and makes them accountable. • Authority relationships must be defined. Conflict is reduced because employees know their superiors.

Acting at the Level of Attitudes & Individuals • Different divisions and functions have different ideas about accomplishing organizational goals. • They can establish procedures to voice complaints. Procedures play a large role in managing conflicts between managers and unions. • Bargaining consists of attitudinal structuring, a process to convince management and labor they have much in common. • A third-party negotiator, such as a senior manager in an integrating role or an outside consultant, can mediate. • Rotating employees, a tool used by the Japanese, manages conflict by changing attitudes.

Acting at the Level of Attitudes & Individuals • Long held attitudes may necessitate a change in those mired in conflict through transfer, promotion, or firing. • Top-management may be replaced to overcome inertia and change attitudes. • The CEO influences attitudes by setting the values and culture, influencing the attitudes of other managers, and having the power to resolve subunit conflict. • Strong CEOs listen to opinions and build consensus. • Weak CEOs fail to manage conflict, so strong coalitions fight for their goals at the expense of the weaker subunits. • As fighting escalates, conflict becomes harmful.

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