Channel Conflict

Neeraj Agarwal
 Defining Conflict

• Behavior by a channel member that is in

opposition to its channel counterpart
• Channel conflict occurs when one member
views its upstream or downstream partner
as an adversary or an opponent
 Conflict v/s competition

• Competition is behavior in which a channel

member is working for a goal or object
controlled by a third party (customer,
regulator, competitor)

• Competing parties struggle against

obstacles in their environment, Conflicting
parties struggle against each other
 Reasons for Conflict
• Competing Goals
– Channel members have inherently conflicting objectives
– Tend to focus on their own profitability, rather than the systemic
profitability

• Differing Perceptions of Reality

– Regarding product attributes, competition, application, etc.
– Manufacturer has a product focus, and is at a remove from the
customer; retailer has a consumer focus, and is at a remove
from the product

• Clash of Domains
– Downstream members promoting competitors products,
divulging trade secrets
– Multiple channels
 Types of Conflicts

• Latent Conflict
– Parties involved may not be aware of the possible
conflict
• Perceived conflict
– Organisations aware, but emotionless and mental
– “all in the days work” is how it gets defined
• Felt conflict
– Organisational members start experiencing
detrimental emotions – tensions, anxiety, hostility, etc.
• Manifest Conflict
– Opposition is visible as it is expressed in behaviour
 Measuring Conflicts
n
• Conflict = ∑ Importancei x Frequencyi x Intensityi
i=1

– How important is the issue

– How frequently do the parties disagree
– How intense is the disagreement
– How many issues

• Conflict is a STATE – it is really about the level of

conflict in a channel
• Conflict is also a process – made up of incidents,
episodes, and interpreted by both parties differently
 Consequences of Conflict

• Conflicts may be desirable

– Committed channel members, coordinating tightly
bound to generate disputes
– May help raise performance
• Lack of conflicts (peaceful channels) may mean
indifference / neglect
• Increasing conflict leads to
– Conflicting party deriving less from the relationship
– Lesser satisfaction from the rewards the relationship
generates
– Damages channel coordination and performance
 Conflict Resolution Strategies

• Information Intensive approach

• Third party route
• Building relational Norms
– Encouraging an atmosphere of flexibility,
information exchange and solidarity in the
channel
 Conflict Resolution Styles
Hi Cooperativeness

Collaboration
Accommodation Or
Problem Solving

Compromise
Lo Assertiveness Hi Assertiveness

Competition
Avoidance Or
Aggression

Lo Cooperativeness