SCRIPT

Subject: Management
Chapter 8: COMMUNICATION IN MANAGEMENT
Topic 2: Conflict Management and Negotiation
Slide Content

Hello everyone,
I am delighted to welcome you back to the topic of "Conflict Management and
Negotiation". Developing skills in managing organizational conflict and negotiation is
crucial for managers to effectively achieve their goals. Conflict is a natural part of
organizational life; managers need strategies to resolve it effectively. As a major conflict
resolution technique, negotiation requires managers to understand its steps and become
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proficient negotiators.
In this lecture, we will cover the following learning outcomes to gain a comprehensive
understanding:
✓ Explain the reasons why conflict arises.
✓ Identify the types and sources of conflict in organizations.
✓ Describe the ways that managers can use to resolve conflict.
To achieve these learning outcomes, we will cover the following contents:
1. Organizational conflict
3 2. Type and sources of conflict in organizations
3. Conflict management strategies
4. Negotiation and types of negotiation
Let's begin by exploring the concept of organizational conflict and the underlying causes
that give rise to conflicts within organizations. Organizational conflict refers to
disagreements or disputes that arise within an organization when individuals or groups
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have contrasting goals, interests, values, or approaches. It occurs when there is a clash
between the needs, preferences, or perspectives of different individuals or groups within
the organizational structure. Organizational conflict can manifest in various forms,
 including interpersonal conflicts, intergroup conflicts, or conflicts between employees
and management.
Conflicts within an organization may arise due to a variety of factors, such as differences
in communication styles, competing priorities, resource allocation, power struggles, role
ambiguity, organizational change, or incompatible goals. These conflicts can have both
positive and negative effects on the organization.
On one hand, organizational conflict can stimulate creativity and innovation, promote
diverse perspectives and problem-solving approaches, challenge the status quo, and
encourage healthy competition. When managed effectively, conflicts can lead to
improved decision-making and increased organizational learning.
On the other hand, if conflicts are not adequately addressed, they can have detrimental
effects on the organization. Negative consequences may include decreased productivity,
reduced employee morale and satisfaction, increased absenteeism and turnover,
damaged relationships, and a toxic work environment. Therefore, it is crucial for
organizations to recognize and manage conflicts in a constructive manner to minimize their
negative impact and harness their potential benefits.
Next, let's delve into the types and sources of conflict in organizations. Conflict is an
inherent part of organizational life, and being able to identify its various forms and
underlying sources is crucial for effective conflict management. We will explore different
types of organizational conflicts and examine the sources that contribute to their
occurrence.
Types of Organizational Conflict:
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Interpersonal Conflict:
Interpersonal conflict arises between individuals within an organization. It occurs due to
differences in goals, values, or personal preferences. For instance, imagine two managers
in an organization with conflicting views on environmental protection measures. This
disagreement can result in interpersonal conflict, affecting their working relationship and
potentially hindering collaborative efforts.
 Intragroup Conflict:
Intragroup conflict occurs within a group, team, or department. It arises when members
within the same group hold differing opinions, preferences, or perspectives. For example,
consider a marketing department tasked with allocating the advertising budget for a new
product line. Conflicting ideas and priorities within the department can lead to intragroup
conflict, making reaching a consensus on resource allocation challenging.
Intergroup Conflict:
Intergroup conflict arises between different groups, teams, or departments within an
organization. It occurs when there is competition for resources, authority, or recognition.
Let's take the example of research and development (R&D) departments and production
departments in a manufacturing company. Conflicts can emerge between these groups
regarding product feasibility, cost implications, or timelines, leading to intergroup conflict.
Interorganizational Conflict:
Interorganizational conflict occurs between different organizations. It arises when
organizations have conflicting interests, ethics, or strategies that impact each other's well-
being. For instance, conflicts may arise between corporations and government agencies
over ethical concerns related to environmental practices, labor standards, or regulatory
compliance.
Sources of Conflict in Organizations:
Different Goals and Time Horizons:
Conflict can arise when organizational departments or divisions have divergent goals or
time horizons. For example, production managers prioritize efficiency and cost-cutting
6 while marketing managers focus on sales and long-term customer loyalty which can lead
to conflicts as departments pursue their distinct objectives.
Overlapping Authority:
Conflict can arise when multiple managers, departments, or functions claim authority over
the same activities or tasks. Disagreements between managers from different departments
 vying for decision-making power or conflicting opinions on resource allocation can result
in power struggles, lack of clarity in decision-making, and compromised collaboration.
Task Interdependencies:
Conflicts can arise when individuals or departments are interdependent on each other's
work. Delays, mistakes, or failures from one party can impact the productivity or success
of others, leading to frustration and conflict. For instance, if the production department
fails to deliver the required components on time, it can impede the progress of the assembly
department, resulting in interdepartmental conflicts.
Different Evaluation or Reward Systems:
Conflict can occur when different groups or departments are evaluated and rewarded based
on different criteria. Varying performance measures or incentives can create tension and
competition between departments, leading to conflicts over perceived fairness or resource
allocation. Conflicting performance metrics between sales and customer service
departments, for example, can cause friction between them.
Scarce Resources:
Conflict is likely to arise when resources are limited, and different individuals or groups
compete for their allocation. Limited budget availability can lead to conflicts over
departmental funding or the distribution of bonuses and incentives, among other valuable
resources.
Status Inconsistencies:
Conflict can occur due to disparities in status or perceived importance within the
organization. Conflicts may arise when certain teams or individuals feel undervalued or
overlooked in decision-making processes or recognition programs, leading to strained
relationships and conflicts.
Now that we have explored the types and sources of conflict, let's discuss effective conflict
7 resolution strategies that managers can employ:
Compromise:
Finding a middle ground through give-and-take exchanges where both parties make
concessions. This approach promotes cooperation and seeks to reach a reasonable
agreement that satisfies the interests of all parties involved.
For example, imagine a conflict between two departments within an organization: the
marketing department and the finance department. The marketing department believes that
allocating a significant budget towards a new advertising campaign is crucial for promoting
the company's brand and increasing sales. On the other hand, the finance department is
concerned about the budgetary constraints and the potential impact on the company's
financial stability. To reach a compromise, the marketing department may agree to scale
down the campaign's scope or explore cost-saving measures, while the finance department
may allocate a slightly larger budget to accommodate the marketing needs. Through
compromise, both departments make concessions to find a middle ground that addresses
their respective concerns.
Collaboration:
Fostering collaboration and seeking mutually beneficial solutions by engaging in open
communication and understanding the underlying concerns and perspectives of all parties.
Collaboration emphasizes teamwork, creativity, and finding win-win outcomes.
For example, consider a conflict within a cross-functional team working on a project. The
team comprises members from different departments, each with their own priorities and
perspectives. Conflict arises when team members disagree on the project's direction and
approach. Instead of resorting to win-lose scenarios, the team embraces collaboration. They
engage in open discussions, actively listen to one another, and combine their diverse
expertise and viewpoints to find a solution that satisfies everyone. By fostering
collaboration, the team promotes synergy and maximizes the collective talents and insights
of its members, leading to a stronger project outcome.
Communication:
Encouraging open and honest dialogue among conflicting parties to facilitate
understanding, clarify misconceptions, and address underlying issues. Effective
communication helps to build trust, improve relationships, and find common ground for
resolving conflicts.
For example, in a conflict between an employee and their supervisor, effective
communication plays a pivotal role in resolution. The employee may feel unappreciated
and undervalued due to a lack of recognition for their contributions. Instead of harboring
resentment, they initiate a conversation with their supervisor to express their concerns and
discuss their achievements and aspirations. Through open and honest dialogue, the
employee can help the supervisor understand their perspective, and the supervisor can
provide feedback and insights. By fostering clear and transparent communication, both
parties can address any misconceptions, build trust, and work towards a resolution that
values the employee's contributions while aligning with the organization's goals.
Mediation:
Involving a neutral third party, such as a trained mediator, facilitates communication,
guides the conflict resolution process, and helps parties find mutually acceptable solutions.
Mediation can provide a structured and impartial approach to resolving conflicts.
For example, in a conflict between two managers from different departments, the
organization may decide to bring in a neutral third party mediator to facilitate the resolution
process. The mediator, trained in conflict resolution techniques, listens to the concerns of
both managers, helps them explore their underlying interests, and guides them toward
finding a mutually acceptable solution. The mediator may facilitate a structured discussion,
encourage active listening, and provide a safe space for both managers to express their
perspectives. Through the mediation process, the neutral third party helps the conflicting
parties identify common ground and develop a resolution that respects their individual
needs while promoting organizational harmony.
In summary, conflicts are an inevitable aspect of organizational life. Understanding the
various types of organizational conflicts and their sources allows us to recognize and better
manage them. Organizations can foster a healthy work environment, enhance productivity,
 and achieve organizational success by implementing effective conflict resolution strategies
such as compromise, collaboration, communication, and mediation.
Now that we have covered conflict management strategies, we will move on to negotiation
and its different types. Negotiation is a significant conflict resolution technique,
particularly when parties have equal power. Negotiation involves parties trying to reach a
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mutually acceptable solution by considering different ways to allocate resources. It can be
conducted directly between the conflicting parties or facilitated by a neutral third-party
negotiator, such as a mediator.
The role of a mediator is to facilitate effective negotiation without forcing concessions or
agreements. In contrast, arbitrators are third-party negotiators who can impose a solution
that both parties must adhere to. Two major types of negotiation are discussed:
Distributive Negotiation: Parties perceive a fixed pie of resources to divide and adopt a
competitive stance. They aim to secure the most advantageous outcome for themselves and
may not consider the future relationship or interpersonal damage caused by their
negotiation.
Integrative Bargaining: Parties perceive the potential to increase the resource pie by
finding creative solutions. They view the conflict cooperatively and seek win-win
outcomes. Trust, information sharing, and a desire for a satisfactory resolution characterize
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integrative bargaining, which often involves collaboration and compromise.
The example of Adrian Hofbeck and Joseph Steinberg, partners in a restaurant,
demonstrates the use of integrative bargaining to resolve their conflict. Strategies to
encourage integrative bargaining include emphasizing superordinate goals, focusing on the
problem rather than the people, focusing on interests rather than demands, creating new
options for joint gain, and considering fairness and distributive justice.
By employing these strategies, managers and organizational members can enhance the
likelihood of effectively resolving conflicts through integrative bargaining, fostering
positive outcomes while maintaining relationships. Awareness of biases that can affect
decision-making is also important throughout the negotiation process.
In conclusion, conflict management and negotiation skills are essential for managers to
navigate the complexities of organizational life. By understanding the reasons why
conflicts arise, identifying the types and sources of conflict, and employing effective
conflict resolution strategies, managers can promote a positive work environment and
foster collaboration, ultimately leading to organizational success. Moreover, managers also
identify the types of negotiation and the strategies they can utilize to reach mutually
acceptable solutions.
Thank you for your attention, and I look forward to continuing to explore the next chapter
"Managing Teamwork".