Organizational Conflicts © Ivana Načinović Braje & Sanda Rašić Jelavić

Context for conflicts Organizations are complex mix of individuals and groups pursuing various goals and interests Conflict is a natural and inevitable outcome of the close interaction of people or parties who may have diverse opinions, values, objectives etc. Individuals and groups will use power and political activity to handle differences and manage conflict

Organization theory and conflicts 3 Classic organization theory Neoclassic organization theory (human relations school) Modern organization theory Conflicts are a negative force and need to be avoided In case they occur need to be resolved immediately Conflict is a normal and unavoidable phenomenon among individuals, groups and organizations In case they occur they should be acknowledged and resolved Conflict is a normal, unavoidable and even desirable phenomenon In case they occur they can be useful and improve performance

Possibilities for conflict.... Organizational subcultures Different departments pursue different goals Collaboration among functional departments Teams within organization Headquarters and subsidiary Unions vs management... 4

Definition of a conflict Conflict is defined as involving a perceived or real incompatibility of goals, values, expectations, process, or outcomes between two or more interdependent individuals or groups Conflict occurs when participants perceive that others may block their goal achievement or expectations 5

Organizational characteristics as sources of conflict Goal Incompatibility – In case achievement of one department’s goals interferes with another’s (e.g. Marketing and Manufacturing dept) Differentiation – Functional specialization requires people with specific education, skills, attitudes and time horizons thus departments might differ in terms of values, attitudes and standards of behavior Task Interdependence – Dependence of one unit on another for materials, resources or information; the interdependence increases the potential for conflicts (e.g. Sequential or reciprocal task interpependence due to technology) Limited Resources – Competititon among groups for limited resources (financial, physical facilities, staff etc.) causes conflicts 6

Poor and insufficient communication Change of roles (of authority and status) - individuals and groups lose their power and authority in favor of some other individuals Organizational overlapping - if a specific job is done by two people or two organizational units and the tasks are not precisely assigned Different organizational cultures Inadequate reward system - employees are being inadequately rewarded in relation to their performance or in relation to others 7

Individual characteristics as sources of conflict The differences in perceptions, paradigms and values Personal style and education Personal intolerance and former personal private affairs (should be avoided) 8

Areas of potential goal conflict Goal conflictMARKETING Operative goal is customer satisfaction MANUFACTURING Operative goal is production efficiency Conflict areaTypical Comment 1. Breadth of product line„Our customers demand variety” „The product line is too broad – all we get are short, uneconomical runs.” 2. New product introduction„New products are lifeblood”„Unnecessary design changes are prohibitively expensive.” 3. Product scheduling„We need faster response. Our lead times are too long.” „We need realistic customer commitments that don’t change like wind direction” 4. Physical distribution„Why don’t we ever have the right merchandise in inventory” „We can’t afford to keep huge inventories” 5. Quality„Why can’t we have reasonable quality at lower cost?” „Why must we always offer options that are too expensive and offer little customer utility” 9

Types of conflicts Conflicts differ in terms of: 1.Consequences they cause (positive-constructive or negative-destructive) 2.Causes of conflict or the subject of conflict (cognitive and affective) 3.Entities involved in conflict 4.Costs (conflicts that generate considerable high costs - should be avoided or conflicts that don’t generate high costs) 10

Types of conflict (1, 2) Causes of conflicts: Cognitive conflicts – thoughts, ideas or objectives between parties are incompatible –Issue focused, not personal –Characteristic of high performing groups Affective conflicts – incompatible feelings or emotions among parties or within individuals –Personal antagonism –Destructive to group performance and cohesion

Intrapersonal Interpersonal Intragroup Intergroup Intraorganizational Interorganizational Conflicts can occur horizontally across depts or vertically between different levels of organization. According to entities involved conflict can be seen as: Types of conflict (3)

Intrapersonal (within an individual) – it may occur in matrix structure due to dual responsibility or in inadequate organization (a person cannot make a decision, cannot do what is required, cannot do two things at the same time) Interpersonal – among individuals; can be simulative in case it is not a large conflict Intergroup – among organizational groups due to organizational characteristics; can be caused by failures in the organization, by the inability to satisfy the needs of groups, by the lack of resources, by the lack of rules and procedures, by an informal organization 13

Intragroup – among members of the same group: (a) a conflict of roles - a person does a work which should be performed by another person in the group; an individual receives orders to do two jobs at the same time; (b) a conflict of results - the members of the group have different views on decision to make or how to solve the problems and achieve results; (c) a conflict of interactions - arising from interactions, e.g. members of the group blame others for the failure and take the credit for success etc. Interorganizational conflict (among companies) 14

Sources of conflict and use of rational versus political model of behaviour Rational Political

The influence of conflict on performance The small and large conflicts have relatively negative influence on performance; Small conflict - individuals may be unmotivated and uncooperative (conflicts should be encouraged). Large conflict - usually generated by uncooperative, exhausted and hostile individuals (the effects are: deterioration of human relationships, cost growth, productivity drop) Optimal conflict situation - individuals are productive and cooperative. The positive effects are: atmosphere and dynamism which boost ideas, creativity in solution makings, a possibility of different insights into solving a problem, release of creative energy, improvement of relationships after the conflict, a constructive competition to earn most valuable investment of limited resources. 16

Factors that determine a conflict outcome -a process (a tactic that is used) -former relationships between the parties in a conflict (often determine the outcome of a conflict) -the nature of the conflict (small or heavy conflict) -characteristics of the parties in a conflict (affecting the way of resolving a conflict) -consequence estimation (indicating whether to be involved into a conflict or not) -the involvement of a third party (if the conflict cannot be resolved other way) 17

A conflict can be solved by: -Adjusting one side to another -Withdrawing one party from a conflict -Avoiding relationship with the conflicting party -Mutual persuasion between the parties in the conflict -Forcing a conflict solution -Negotiation between the parties -Competition between the parties -Compromise between the parties -Cooperation between the parties 18

Negotiating Strategies

Managing conflicts Depends on the source of the problem Organizationaly based conflicts – changing the organizational structure Individualy based conflicts – changing attitudes, values or changing employees Different tactics: forum, third party negotiator, procedural system, job-rotation, power system 20