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CONFLICT MANAGEMENT

AGREEMENT CAUSING DISAGREEMENT
CONFLICT MANAGEMENT
(ORIGINAL CASE STUDY)

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PREFACE
This is the first time I am writing a Case-study myself. This is an original document. All the information is presented in the best possible way; and is correct according to my limited knowledge. If there are any corrections regarding the information, grammar, spelling or typing I may kindly be informed. I would like to thank my teacher: Prof. Manzoor Iqbal Awan Visiting Faculty Member * USQ (Australia), COMSATS & NUML * Bahria, Air & Preston Universities * University of Lahore Cell: +92 321 850 0732 Emails: awan9ff@gmail.com & integrated.consult@yahoo.com Profile: www.linkedin.com/in/manzooriqbawan Mr. Shaikh Muhammed Ali Project Director (HRD) Higher Education Commission (HEC) H-9, Islamabad, Pakistan Tel: 92-51-90408030 IP: 92-51-90408031 Fax: 92-51-90408003 E-mail: mashaikh@hec.gov.pk URL: www.hec.gov.pk For providing me with this opportunity to think and create original effort, I would also like to thank my respected instructor Ms. Waheeda Memon, Ms. Sarwat Rizwan and Ms. Saima Altaf who always appreciated my work and made me able to think and write.

This case-study is present in the Bahria University Library and on Scribd.com Danish Sultan mrk56@live.com +92 312 51100 56

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ABSTRACT
y y Last year we (me and my family) purchased a house for residential use and sold our two previous houses to purchase a new one. We faced many difficulties in this process as the person who bought (purchased) our previous houses was a business man and the person from whom we were buying was also a business man, and both of them knew each other very well. Both of them were running low on the working capital for the business and needed hard cash to continue with their daily business transactions. We were stuck between them and acted as a medium, when starting this process of shifting the residence. I had the idea that we would just take money from one party and give it to the other. We had to sign two different contracts with, two different parties. But there was a difference between the payment date of one party and the receipt date of other party. We were then forced to make the payment from our pocket but this made the conditions worse and raised a conflict.

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PARTIES INVOLVED
Danish Sultan (1) owned three houses in the city of Rawalpindi (Pakistan). Two of these houses were situated in Ghosia Street and shared a common separation wall, later the separation wall was removed and the joined houses were used by Danish and his family as a residence; whereas the third house was situated on distance and therefore it was rent out. Mr. Khurram Jillani, owner of Jillani Foods (situated near NUST campus, Tariqabad, Rawalpindi) lived in the same street and wanted a place near his food outlets for storage purposes as Khurram incurred a lot of cost on purchasing the material (supplies/ inventory) for his food outlets from the market as large amount of goods were required. So Khurram directly bought the goods from the farmers, producers and manufacturers at comparatively lower prices. But there was a problem since there was no suitable place to store huge amount of goods. If he stores them in his food outlets, the space to serve the food to his customers would be disbanded and if he rented out any place near his food outlet then he would have to pay huge amount of rent as the rental area would be commercial and then there would not benefit of buying goods from the primary source of production. The only and best option in the mind of
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Khurram was to obtain a residential place huge enough to accommodate the inventory at the closest distance to the outlets possible. (There is no tax or law in Pakistan against using the residential area for storing purpose of commercial purposes). Mr. Mustaquim (50% owner of M/S Al-Hasseb; office situated near Askari VII, Adyala Road, Rawalpindi) was a real estate business-man; not just acting a property consultant the principal operations of the business included purchasing plots (place to construct a structure/building) and after constructing a well designed luxurious residential or commercial place sold it for the profits.

CIRCUMSTANCES
Danish and family were living in two combined houses, so in May 2009 they started to look for a new and bigger place to live as such huge space was very inappropriate for a family of 5, (a small example to show the incompatibly of the residence was that there were 2 huge kitchens for a family of 5 family members). Danish had family ties with Mustaquim and as soon as the news reached the ears of Mustaquim he took Danish and his father to show them the sights some of which were under construction while some were completed. But Mustaquim wanted to sell the houses which were completed to Danish as this would give his business the dual advantage. First the sales of the completed house would bring in circulation to the money which was blocked by the construction of that house and secondly the income which will be achieved as a result of sales would be utilized to finance the ongoing projects of the firm. One of the houses shown by Mustaquim had an opening in two streets, so that is why there were two entrance gates and two porches of the house, the flooring was made entirely of expensive stone, a vast terrace/balcony and four furnished bed-rooms with attach bath, and a location near the main road/market made this house an ideal living place for the family. Danish intended to sell his current residence to gain the cash required to purchase the new house. The news reached Khurram and he hurried to meet Danish and buy the house to use as a store. Danish required nearly Pakistan Rupees (Pak. Rs.) 70, 00,000 (2) (Seventy lakh/Seventy million) for the new house and the price which Khurram offered for the present residence of Danish was Pak Rs: 55, 00, and 000. Keeping this idea in mind that I would add remaining Pak Rs: 15, 00, 000 from my pocket to make full payment to Mustaquim, Danish accepted. This idea was unintentionally became the sparking factor of the conflict.

AGREEMENT
All the three parties involved (Danish, Khurram and Mustaquim) agreed and began the transaction process. First of all Khurram approached Danish with a contract stating that
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Khurram would pay Rs: 2, 00, 000 as down payment (3) and the remaining amount would be paid in ± 4 months. Danish had doubts in mind that the time period is a bit more than expected but Khurram argued that he was not an investor and didn t possess such huge amount of cash to make payment in such a short period, he earned income on daily bases from his food outlets and paid daily wages to the workers depending on sales figures. These facts convinced Danish to agree and sign the agreement. (In Pakistan contact papers for any property are composed, paid for and held by the party, buying the property). Two days later Mustaquim arrived to discuss the matters; Danish informed and presented the copy of the contract previously signed. Then Mustaquim and Danish formed the new contract for the new house. Some significant terms and conditions were Danish will pay Rs: 20, 00, 000 as down-payment (3) (known as token money/ Biana in Pakistan and is about 1% of the total amount), Mustaquim reasoned that the payment period is too long for the down-payment must be exaggerated. Then the payment time was only 3 months in the contract; Mustaquim said that he was not the only owner of the house which was being purchased by Danish, there were other stake holders and he was just 50% owner of the business. But he assured that this term of making the complete payment in 3 months was just to show other stake holders, he reassured that he will provide the more than 4 months for the payment. Both the parties signed.

CONFLICT (CHAOS)
On July 16th, 2009 Danish moved from his previous house to the new house. He thought that as Khurram will transfer money to him he will forward it to Mustaquim. On 18th, two days later Mustaquim found that a man was willing to pay a commercial area (plot) for a low price from the market current rate, as that man was going abroad and needed immediate cash. Mustaquim signed (on behalf of M/S Al-Hasseb) to acquire that piece of land not even thinking how to pay, it was located on the main road and was perfect for building a commercial plaza/mall and no doubt giving huge amount of profits. One day later Mustaquim approached Danish and demanded money; Danish was alarmed to hear this. As he already paid Rs: 18, 00, and 000 from his pocket for the down-payment and still did not recover. Now Danish was apprehensive. As Mustaquim was demanding money on daily bases, arguing that Danish had signed the contract to pay before the completion of time period which is 3 months and on other hand Khurram assumed that he will collect money penny by penny and will pay at the completion of time period to Danish which was ±4 months . Danish was now seriously stuck. The difference in perception created a situation which leads toward a conflict between the three parties involved.

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CONCLUSION OF THE CONFLICT
Danish had a discussion with Mustaquim and informed about the entire situation. As both the parties were in need of money it was decided that Danish will arrange at least 50% of money required by Mustaquim and Mustaquim would allow 1 more month to Danish to clear the remaining dues. And so the new deal was formed and followed. Khurram also paid in small chunks. And so at last the transaction was complete; difference of opinion, clash of the perception and the abrupt need of cash to maintain the business were the major factors which lead to this situation.

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OTHER POSSIBLE SOLUTION
a. As Mustaquim was aware of whole situation that Danish would forward the money from Khurram to him, and Mustaquim and Khurram knew each other very well. Danish could have moved a side (by only paying the difference in the amount which was Rs: 15, 00,000 (4) and asked Mustaquim to directly collect the money from Khurram. b. All the three parties were in need of immediate cash, they could have utilized shortterm Bank loans to facilitate the ongoing transaction. c. Mutual consensus, by sitting to gather (all three parties) and discussing a solution to avoid the conflict can helped a lot, three parties never assembled together at a common point to discuss the matter. As conversation is one of the key factor which prevents the conflict.

ANALYSIS
y First of all there was difference of personality between all the three parties; one was a business owner (Khurram), the second one was a partner in business (Mustaquim) and the third party has never been involved in any business (Danish and family). So this difference of personality amongst the parties affected the ability to make decision. Emotional stability played a vital role, as the monetary need lead to loss emotional instability. One more major reason for the conflict was the difference of the level of Conscientiousness in and amongst the parties; like in this case Khurram and Danish both had to make payments, but Danish was more conscientious about making the payment than Khurram. Lack of Competencies that enhance emotional intelligence, was also a factor which took a controllable situation towards a conflict. Moral Philosophy, presents guidelines for determining how to settle conflicts in human interests; and in this case we can clearly see that there was a collision of moral philosophies of parties involved in the conflict, as everyone positioned his own need on the top most priority. The concept of Utilitarianism (greatest good for greatest number of people) can help if the parties didn t only took steps for their own benefit, instead took those steps which provided maximum benefit to all parties involved. Deontology (focuses on means and morally analysis of each action) can help a lot in moving away from the road towards conflict. Empathy could have acted as a barrier on the path of conflict. Conflict of Interests/benefits was also paving way towards conflict of parties, as payment of one party was to be treated as the receipt of another party. Most of all, Virtues that support business transactions (Trust, Fairness, Truthfulness Learning, Gratitude, Civility, Moral leadership etc.) always provide a vision to resolve and avoid conflicts if they are taken into consideration.

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STYLES OF CONFLICT MANAGEMENT
3 other possible solutions in the terms of the Styles of Conflict Management are presented.

OPTION # 1
As Mustaquim was aware of whole situation that Danish would forward the money from Khurram to him, and Mustaquim and Khurram knew each other very well. Danish could have moved a side (by only paying the difference in the amount which was Rs: 15, 00,000 (4) and asked Mustaquim to directly collect the money from Khurram.

As in this case we can clearly see that Danish is paying no importance to his relationship in this situation the only importance is given to the issue so it clearly falls in the Competitor section.

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OPTION # 2
All the three parties were in need of immediate cash, they could have utilized short-term Bank loans to facilitate the ongoing transaction.

While following this option there is no significance given to relationship or the issue, and all the parties have to pay a cost (bank interest in this case) to resolve the matter, it follows in Compromise .

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OPTION # 3
Mutual consensus, by sitting together (all three parties) and discussing a solution to Avoid the conflict can helped a lot, three parties never assembled together at a common point to discuss the matter. As conversation is one of the key factor which prevents the conflict.

If this solution would have been utilized then importance would be given to both issues and the relationship, this is Collaborate .

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APPENDIX
1. Danish Sultan was a University student in 2009, but is presented as the owner in this case-study because the owner in the deeds of property was Danish, and had the decision making power. 2. International method $ 1,000,000 (million)---Pakistani Method Rs: 10,00,000 (lakh) 3. According to Pakistan Business trend, when a deal/contract is made to purchase a property nearly 1% of the total amount is paid from the buyer to the seller at the time of contract signing. This down-payment is termed as Biana or Token Money in Pakistan. 4. Danish sold his previous property for Rs:55,00,000 and purchased the new for Rs:70,00,000 the difference in the payment was Rs:15,00,000 which was to be paid by Danish.

mrk56 is used by Danish in the documents written originally by him.

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