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ORGANIZATIONAL THEORY, DESIGN, AND CHANGE - Chapter 14

ORGANIZATIONAL THEORY, DESIGN, AND CHANGE - Chapter 14

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Lesson Plan of Chapter 14
Jones, G. R. (2007). Organizational Theory, Design, and Change (5th ed.). New Jersey: Pearson Education, Inc.
Lesson Plan of Chapter 14
Jones, G. R. (2007). Organizational Theory, Design, and Change (5th ed.). New Jersey: Pearson Education, Inc.

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CHAPTER 14: MANAGING CONFLICT, POWER, AND POLITICS
 
   P   H   A   M    H   O   A   N   G    H   I   E   N 
CHAPTER 14 MANAGING CONFLICT, POWER, AND POLITICS
TEACHING OBJECTIVES
 
1. To explain that conflict is inevitable, because stakeholders compete for resources and their goalsoften conflict. (14.1)2. To examine Pondy’s model of conflict and its five stages: latent, perceived, felt, manifest, andconflict aftermath. (14.2)3. To consider ways to manage conflict by making changes in structure, increasing integration, andclearly defining authority relationships. (14.3)4. To discuss how conflict can be managed by changing attitudes, attitudinal structuring, a proceduralsystem, a third-party negotiator, and employee rotation. (14.3)5. To explain how power enables individuals or subunits to resolve a conflict in their favor. (14.4)
6.
To examine the seven sources of power: authority, control over resources, control over information,nonsubstitutability, centrality, control over uncertainty, and control over decision-making premises.(14.5)
 
7. To consider how organizational politics can increase power. (14.6)8. To address the costs and benefits of organizational politics. (14.6)
CHAPTER SUMMARY
This chapter examines conflict, power, and politics in the organizational setting. Although stakeholderscooperate to contribute resources, they compete for resources. Conflict arises when one group pursues itsgoals at the expense of another. Research shows that some conflict is good to overcome inertia, butbeyond a certain point, conflict hurts organizational effectiveness.Pondy’s model of conflict consists of five sequential stages: latent conflict, perceived conflict, feltconflict, manifest conflict, and conflict aftermath. The potential for conflict exists due tointerdependence, subunit orientations, bureaucratic factors, incompatible performance criteria, andcompetition for scarce resources. Conflict should be managed before it reaches the manifest conflictstage. Conflict is manifest by either open or passive aggressiveness. Manifest conflict reducescommunication and leads to poor conflict aftermath. Conflict can be managed by structural changes,increasing integration, establishing a procedural system for grievances, attitudinal structuring, and usinga third-party negotiator.Power influences how conflicts are resolved. There are seven sources of organizational power: authority,control over resources, control over information, nonsubstitutability, centrality, control over uncertainty,and unobtrusive power.Organizational politics increase power. There are tactics for playing politics: increasing indispensabilityby increasing nonsubstitutability and centrality, associating with powerful managers, building andmanaging coalitions, and influencing decision-making by controlling the agenda and bringing in outsideconsultants. An organization must manage the balance of power to ensure that power and politics arebeneficial, not harmful.
 
 
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CHAPTER 14: MANAGING CONFLICT, POWER, AND POLITICS
 
   P   H   A   M    H   O   A   N   G    H   I   E   N 
CHAPTER OUTLINE14.1 What Is Organizational Conflict?
 
Stakeholders compete for the resources that an organization produces. Shareholders want dividends,employees want raises. An organization must manage both cooperation and competition amongstakeholders to grow and survive. All stakeholders have a common goal of organizational survival, butnot all goals are identical. (Fig. 14.1)
Organizational conflict
occurs when a stakeholder group pursues its interests at the expense of otherstakeholders. Given the different goals of stakeholders, organizational conflict is inevitable. Conflict isassociated with negative images, such as unions getting angry and violent, but some conflict can improveeffectiveness. When conflict passes a certain point, it hurts an organization. (Fig. 14.2)Q. How can conflict improve effectiveness?A. Conflict can overcome inertia and introduce change, because conflict requires an organization toreassess 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 timebargaining, rather than making decisions. An organization in decline cannot afford to spend time ondecision-making, because it needs a quick response to recover its position. Groups battle for theirinterests, no agreement is reached, and the organization floats along, falling prey to inertia.Organizations need to control conflict.Notes_______________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________
 Refer to discussion question 1 here to discuss the beneficial aspects of conflict.__________________________________________________________________________________________________________________________________________________________________
 
14.2 Pondy’s Model of Organizational Conflict
Pondy’s model shows five sequential stages of conflict: latent conflict, perceived conflict, felt conflict,manifest conflict, and conflict aftermath. (Fig. 14.3)
Stage 1: Latent Conflict
No conflict is present, but the potential for conflict exists due to the nature of operations. Pondy contendsthat all conflict emerges due to subunit orientations. There are five potential sources of conflict amongsubunits:1.
Interdependence:
As organizations grow and differentiate, subunits want autonomy. Marketingwants to design advertising. Desires for autonomy conflict with the organization’s aspirations forcooperation. As task interdependence increases—that is, moves from pooled to sequential toreciprocal—the potential for conflict increases. Conflict occurs at the individual, functional, and
 
 3
CHAPTER 14: MANAGING CONFLICT, POWER, AND POLITICS
 
   P   H   A   M    H   O   A   N   G    H   I   E   N 
divisional levels. If functions were not interdependent, conflict would not exist. Functions wouldsimply perform their tasks. Manufacturing would not care what engineering did.2.
Differences in goals and priorities
exist among different functions. Manufacturing wants to lowercosts. Marketing wants to increase sales. Incompatible goals create conflict.
 
Organizational Insight 14.1: Conflict Causes Slow Change at Kodak
Kodak experienced declining performance and hired Christopher Steffen, who had successfully turnedaround Chrysler and Honeywell, as Chief Operating Officer.Q. Why did Steffen resign from Kodak?A. Steffen resigned from Kodak because his problem-solving approach conflicted with the topmanagers’. He favored a revolutionary approach with radical changes, such as large layoffs. The CEOand his team favored an evolutionary approach and incremental changes. Kodak’s team defeated Steffen,so he resigned.3.
Bureaucratic factors:
Status inconsistencies can result in conflict. Line functions often clash withstaff functions.Q. Distinguish between line and staff functions. Why do they conflict?A. A line function, such as production, is directly responsible for producing the outputs. Staff functions,such as accounting and human resources, support the line function. Conflict arises when line employeesconsider themselves more important than staff employees, putting their own interests first.4.
Incompatible performance criteria
for subunits lead to conflict. If an organization rewards costcontrol, engineering does not comply with marketing’s request for a new product design.
 
Organizational Insight 14.2: How Rewards Produced Conflict at CS First Boston
A merger between First Boston and Credit Suisse resulted in conflict. There was no synergy to capitalizeon transatlantic investment banking. Conflict led to high management turnover.Q. Why didn’t CS First Boston manage the conflict? What caused the conflict to escalate?A. First Boston tolerated conflict, because each unit had no effect on the other. Task interdependencewas low. Conflict escalated when the American unit achieved record profits but no bonuses, because theLondon division lost money. This unfair decision prompted senior managers to leave First Boston andwork for competitors, like Merrill Lynch.5.
Competition for scarce resources
leads to conflict. Subunits compete for their share of resources.Increased funding allows a division to grow.
Stage 2: Perceived Conflict
When a subunit perceives its goals to be obstructed, conflict enters the second stage. Each group seeksthe source of the conflict and finds reasons for problems. Marketing blames poor sales on poormanufacturing quality. Manufacturing says that marketing is not advertising effectively. Conflictescalates as subunits fight over the origin of the problem.

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