CHAPTER FIVE

5. MANAGEMENT OF ORGANIZATIONAL CONFLICT

Conflict refers to a situation in which two or more parties perceive incompatible interests, goals,
values, or actions. It arises when individuals or groups feel that their needs, desires, or expectations
cannot coexist, leading to tension or disagreement.
It is a process that begins when one party Perceives that another party has negatively affected or
is about to affect negatively something that the first party cares about. It is a process in which one
party perceives that another party has taken or will take actions that are incompatible with one’s
interest. It occurs quite commonly in every organization with different levels of magnitude due to
various reasons. Research has shown that managers spend 20 percent of their time dealing with
conflict. Conflict is a perception, so it exists whenever someone believes or feels that another
person or group might hinder their efforts.
5.2. Functional Vs dysfunctional conflict
Any conflict can be good or bad. Some conflicts support the goal of the group and improve their
performance; this type of conflict is called functional conflict or constructive conflict.
▪ It encourages open communication and problem-solving.
▪ Helps in clarifying roles, responsibilities, and expectations.
▪ Stimulates creativity by challenging conventional ideas.
▪ Enhance decision-making by considering diverse viewpoints.
Outcomes:
o Strengthening relationships and teamwork.
o Increased organizational effectiveness and adaptability.
o Motivation for individuals to improve and grow.

Department of Management When two people always agree, one of them is unnecessary, William Wrigley Jr.
There are also conflicts that hinder group performance, and these are called dysfunctional or
destructive form of conflicts.
It causes hostility, mistrust, and resentment.
This leads to miscommunication and lack of cooperation.
It wastes time and resources on resolving disputes rather than achieving objectives.
Lowers morale and increases stress.
Outcomes:
o Reduced productivity and creativity.
o High turnover rates and absenteeism.
o Breakdown of team cohesion and trust.
There are three types of conflict: task conflict (conflict relates to the content and goals of the work),
relationship conflict (conflict due to interpersonal relationship) and process conflict (conflict
relates how the work gets done). Research showed that all relationship conflicts are almost always
dysfunctional because it appears that the friction and interpersonal hostilities inherent in
relationship conflict increase personality clashes and decrease mutual understanding. Low levels
of process conflict and low to moderate level task conflict are functional because they are sources
of change and creativity. So, the role of managers is to maintain low level process and moderate
and below moderate level of task conflict because others are dysfunctional
5.3. Nature of conflict in an organization
Conflict is an inherent part of human interaction and organizational life. Its nature can be described
through the following characteristics:
1. Inevitable: Conflict arises naturally wherever individuals or groups interact due to
differing perspectives, needs, and goals.
2. Dynamic: Conflicts evolve over time, potentially escalating or resolving depending on
how they are managed.
3. Neutral: Conflict itself is neither inherently good nor bad—it can lead to positive outcomes
like growth and innovation or negative outcomes like tension and division, depending on
its resolution.
4. Perceptual: The presence of conflict often depends on how individuals perceives their
differences. Misunderstandings or miscommunications can amplify conflict.

Department of Management When two people always agree, one of them is unnecessary, William Wrigley Jr.
 5. Interactive: Conflict involves interaction between parties, where actions and reactions
contribute to its development.
6. Contextual: The nature of conflict depends on the environment, including personal,
organizational, social, or cultural contexts.
5.4.Causes of Organizational conflict
Conflict within organizations can arise from various factors that stem from individual differences,
structural challenges, and environmental conditions. Here are some of the primary causes:
Ambiguity in goal/role (whenever there is no clear boarder of role, people may practice
conflict).
Difference in culture:(existence of different culture in an organization may create
problems in work environment)
Difference in power (Existence of power difference may be source of conflict, if it is not
well managed).
Because of performance criteria (a Performance criterion which is not agreed by all the
staff may create conflict between people in the organization).
Perceptual distortions (when people understand other people badly, there will be
conflict).
Feeling of hostility or ill will against somebody (whenever there is enmity between
people, there may exist conflict).
Absences of trust between co-workers or between their leaders.
Competition over scarce resources (Absence of sufficient resources is also one source of
conflict).
Destructive criticism (Giving negative criticism may be another source of conflict).
5.5.Consequences of organizational conflict
Organizational conflict, depending on how it is managed, can lead to both positive and
negative outcomes. Here's an overview of its consequences:
5.5.1. Positive Consequences (When Conflict Is Managed Constructively)
1. Encourage Innovation: Conflict can inspire creative solutions and new approaches to
problems. It challenges the status quo, fostering organizational growth and adaptability.

Department of Management When two people always agree, one of them is unnecessary, William Wrigley Jr.
 2. Improve Communication: Addressing conflict promotes dialogue and transparency
among employees. It can enhance mutual understanding and strengthen relationships.
3. Clarifies Roles and Goals: Conflict often reveals areas of ambiguity in roles, tasks, and
objectives, leading to clearer structures and expectations.
4. Strengthens Team Cohesion: Resolving conflicts collaboratively helps build trust and a
sense of unity within teams.
5. Drives Personal and Professional Growth: Employees learn to navigate differences,
develop emotional intelligence, and improve conflict resolution skills.
5.5.2. Negative Consequences (When Conflict Is Poorly Managed or Left Unresolved)
1. Lower Productivity: Prolonged disputes distract employees and consume time and
resources that could otherwise be directed toward organizational goals.
2. Poor Morale and Job Satisfaction: Tensions can create a hostile or toxic work
environment, leading to stress, burnout, and dissatisfaction.
3. Damaged Relationships: Unresolved conflict leads to mistrust and resentment among
coworkers, supervisors, and subordinates.
4. Increased Turnover: Employees may leave an organization if conflicts create an
unbearable working atmosphere.
5. Reduced Collaboration: Conflict can hinder teamwork, compromise decision-making
processes, and disrupt group dynamics.
6. Financial Losses: Mismanagement of conflict may result in legal disputes, operational
inefficiencies, or poor customer service, impacting an organization's profitability.
7. Negative Health Outcomes: Stress from unresolved conflict can lead to physical and
mental health issues among employees, affecting overall well-being and performance.
5.6.Thought in conflict.
There are three different types of school of thought in conflict, Traditional view, The Human
relations and The Interactionist views.
1. The traditional view: (in the 1930s-1940s) It is the early approach to conflict assumed that all
conflicts are bad. Conflict was viewed negatively, and it was used synonymously with terms such
as violence, destruction and irrationality to reinforce its negative connotation. This school of

Department of Management When two people always agree, one of them is unnecessary, William Wrigley Jr.
thought view conflict as harmful and was to be avoided. It was seen as a dysfunctional outcome
resulting from poor communication, lack of openness and trust between people.
2. The human relations view: It argued that conflict was a natural occurrence in all groups and
organizations, since conflict was inventible the human relations school advocated acceptance of
conflict. According to this thought, conflict can’t be eliminated and there is time when conflict
may benefit a group’s or organizational performance. It was a dominant conflict theory from the
late 1940s, through the mid of 1970.
3. Interactionists view: The human relation school of thought accepts the existence of conflict
and the interactionist school of thought not only accepts the existence of conflict but also
encourages it on the grounds that harmonious, peaceful and cooperatives groups are prone to
become static, apathetic and non-responsive to need for change and innovation. This thought
encouraged the group to maintain a minimum level of conflict enough to keep the group viable
and creative. It doesn’t propose that all conflicts are good, but some are good, and others are
destructive.
5.7. Managing organizational conflict

As we have said earlier, conflict has benefits and costs, the main task facing organization is to
manage it and to minimize those costs and maximize those benefits. Managing conflict involves
identifying the problem, finding a solution that is acceptable to both parties involved, this process
is called Bargaining, or Negotiation. Bargaining is the process by which two or more parties in
dispute with one another exchange offer, counteroffer and concessions in attempt to find a
commonly acceptable agreement. Negotiation is a process on which both parties get what they
want is called a win-win solution. But the result of negotiation will not be always win-win, it may
become win-lose, or lose-lose, but win-win solution is the best and the long last way conflict
resolution method. To implement a win –win solution, we must practice the followings:
Lose- lose approach
Compromise/middle ground
Both parties lose something to solve the conflicting issue.
Involve third party
Resort to bureaucratic rules/regulations

Department of Management When two people always agree, one of them is unnecessary, William Wrigley Jr.
Win-lose approach
Parties see things from their viewpoint
One party may gain while the other is losing
Conflicts are personalized
Win-Win approach
It needs creativity and innovation to solve the problem rather than beating others
Needs both parties in conflict situation are meet
1. Avoid making unnecessary offers. Extreme offer may tend to anger the opponent and sometimes
end the negotiation process.
2. Seek common ground to undertake the process.
3. Uncover the real issues. Conflict between people may have multiple sources. Finding a last
solution to a problem requires identifying all the important issues, even the hidden one, and
bringing them to the table.
4. Broaden the scope of issues considered: During negotiation, do not narrow the scope of the
discussion when the parties get to bargain across a wide array of issues. It is easier to find solutions
that are acceptable to all sides.
5.8. Conflict Handling Techniques
There are different kinds of conflict handling techniques, among them the most used are divided
into five types: competing, collaboration, Avoiding, Accommodation /smoothing, and
compromising.
A. Competing: It is conflict handling technique when one person seeks to satisfy his or her
own interests regardless of the impact on other parties to the conflict. It is sometimes called
victory by force or domination. Example: when one person attempts to convince another
that his conclusion is correct but other person’s ideas are wrong and trying to make
someone else accept blame for the problem.
B. Collaborating: It is a conflict handling technique when conflicting parties /persons desire
to fully satisfy the concern of all parties. The conflicting parties are searching for mutually
beneficial outcomes.
C. Avoiding: It is a situation when people try to just ignore a conflicting event. It is a system
that withdraws from conflict. It is a one side solution to conflict.

Department of Management When two people always agree, one of them is unnecessary, William Wrigley Jr.
 D. Accommodating or Smoothing: It is conflict handling technique when one party seeks to
appease an opponent. It is a situation when one party is willing to be self- sacrificing to
solve the conflict. It is also a one side solution to conflicting events.
E. Compromise: It is a conflict handling technique when each conflicting party to the
conflict seeks to give up something of value to the other to solve the problem. In
compromising, there is no clear winner or loser.
5.9. Alternative dispute resolution (ADR)
Alternative dispute resolution (ADR) is a set of processes in which disputing parties work together
with a neutral party that help them settle their disagreements out of court. There are two popular
forms of alternative dispute resolutions: Mediation and Arbitration.

I. Mediation: It is a process in which a neutral party (mediate) works together with two or
more parties to reach a settlement to their conflict. Mediators don’t have the power to take
any sanctions on parties in conflict, cannot impose any agreement, do not consider who is
wrong and who is right but find a resolution, their role is to facilitate to solve their
difference.
II. Arbitration: - It is the process in which a third party, known as an arbitrator, has the power
to impose or at least to recommend the terms of our agreement between two or more
conflicting parties, there are four types of arbitration:
➢ Binding arbitration: in this type of arbitration, two parties agree in advance to
accept the terms set by the arbitrator, whet ever they may be.
➢ Voluntary arbitration: in this type of arbitration the two sides agree in advance
to accept the terms set by the arbitrator, whatever they may be
➢ Conventional arbitration: The arbitrator evaluates the case and determines an
outcome based on the merits of the arguments and evidence presented. the
arbitrator can offer any package of terms he or she wishes
➢ Final offer arbitration: Also known as "last best offer arbitration," this method
involves each party presenting their final offer to the arbitrator. The arbitrator
chooses one offer in its entirety.

Department of Management When two people always agree, one of them is unnecessary, William Wrigley Jr.