Organisational Conflict

Anju S Roll no 9

Org conflict
• The clash that occurs when the goal directed behavior of one group blocks or thwarts the goals of another. • The goals, preferences and interests of stakeholder groups differ hence conflict is inevitable. • Beyond some point (point A in graph however extreme conflict can hurt the org performance.



Org effectiveness


Level of conflict


Why is Org conflict good
• It can overcome org inertia and lead to org learning and change • Conflict between mangers or stakeholder group can improve decision making. • Eg 1 :- Conflict at AT&T between the board of directors and top managers about the slow pace at which the top managers where restructuring the company caused a radical change in managerial attitude. • A new top mgt team was appointed to increase the pace of change and to overcome At&T’s conservative approach.

• Eg 2:- Conflict between divisional managers of IBM resulted in a major change in org focus, from a purely mainframe focus to more consult-oriented focus. • Why org conflict is bad???? • Managers spend all the time bargaining and fighting, and the org gets bogged down in decision making that org change is slow in coming. • Innovation is such a situation is impossible

Pondy’s model of organisational conflict
• Pondy views org conflict as a process that consists of five sequential stages. • Stage 1: Latent Conflict • Here no outright conflict exists; according to Pondy, all org conflict arises because vertical and horizontal differentiation lead to establishment of different organisational subunits with different goals and different perception of how best to realize those goals. • Five potential sources of conflict between subunits have been identified: subunits interdependence, subunits differing goals, bureaucratic factors, incompatible performance criteria and competition for resources.

Stage 1. Latent Conflict

Stage 2 Personal Conflict Subunits become aware of conflict and began to analyze it. Conflict escalates as group battle over the cause of conflict

Stage 3 Felt Conflict Subunits respond emotionally to each other, and attitude polarizes, ”us vs them” What began as a Small problem Escalates in huge problem

No outright conflict exists, but there is a potential for conflict because of several factors. Sources of conflict 1. Interdependence 2. Difference in goals And priorities 3. Bureaucratic factors 4.Incompatible performance and criteria 5. Competition for resources

Stage 5 Conflict Aftermath Conflict is solved in a way that leaves Subunits feeling combative or cooperative

Stage 4 Manifest Conflict Subunits try to get back At each other. Fighting and open aggression are Common and org Effectiveness suffers

• As org differentiate each sub unit develop a desire for autonomy and begin to pursue goals and interests that values over the goals of other subunits or of the org as the whole • Because the activities of different subunits are interdependent subunits desire for autonomy leads to conflict between groups. • When task interdependence are high, conflict is likely to occur at individual functional and divisional levels

Difference in goals and priorities
• Once e goal become compatible, the potential for conflict arises because the goals of one subunit may thwart the ability of the other to achieve its goals. • The way in which the CEO of Kodak fought over the plans for reorganizing the company shows how differences in goals can lead to org conflict.

Bureaucratic factors
• Conflict can occur because of status inconsistencies between different groups in the orgs bureaucratic. A classic type of b bureaucratic conflict between staff and line functions. • A line function is directly involved in the production of a n org outputs. • Staff function advise and support the line function and include functions such as personnel, accounting, and purchasing.

• Conflict arises between the subunits because the org way of monitoring, evaluating, and rewarding different units brings them to conflict. • Production and sales may come into conflict when to achieve the goal of increased sales dept ask manufacturing to respond quickly to customer orders. • If the org reward system benefits sales personnel but penalizes manufacturing then conflict arises.

Incompatible Performance Criteria

Competition for scarce resources
• Conflicts occurs due to scarcity of resources for there are always choices about resource allocation, and subunits have to compete for their share. • Divisions fight to increase their share of funding because the more funds they can obtain and invest the faster they can grow. • Similarly at the functional level there can be conflict over the amount of funds to allocate to sales, or to manufacturing or to R&D to meet org objectives.

Stage 2: Perceived Conflict
• Begins with a subunit or stakeholder group perceives that its goals are being thwarted by the actions of another group. • Each subunit begins to define why the conflict is emerging and to analyze the events that have led up to it. • E.g. the manufacturing subunit may suddenly realize the cause of many of its production problems is defective inputs.

• When production managers investigate, they discover that materials management always buys inputs from the lowest cost sources of supply and makes no attempt to develop the kind of longterm-relationships with suppliers that can raise the quality and reliability of inputs. • Materials management reduces input costs and improves this function’s bottom line, but it raises manufacturing costs and worsens that function’s bottom line. Manufacturing perceives materials management s thwarting its goals and interests. • Normally at this point the conflict escalates as the different subunits or stakeholders start to battle over the cause of the problem.

Stage 3: Felt Conflict
• Subunits in conflict quickly develop an emotional response towards each other. • Each subunit closes ranks and develops a polarized “us versus them” mentality that puts the blame for the conflict squarely on the other subunit. • As conflict escalates, cooperation between subunits falls and so does organizational effectiveness.

• As different subunits in conflict battle and argue their point of view the conflict escalates. • The original problem may be relatively minor, but if nothing is done to solve it, small problem will escalate into huge conflict that becomes increasingly difficult to manage.

Stage 4: Manifest Conflict
• One subunit gets back at another subunit by attempting to thwart its goals. • Manifest conflict can take many forms. • Open aggression between people and groups is common. • Infighting in the top management team is very common as managers seek to promote their own careers at the expense of others. • E.g. when Lee Iacocca was at Ford Motor company and Henry Ford decided to bring in the head of GM as the new Ford CEO, Iacocca engineered the downfall of the new CEO within 1 year in order to promote his own rise to the top.

• Eventually, Iacocca lost the battle: Henry Ford forced Iacocca out because he feared that Iacocca would usurp his power. • A very effective form of manifest is passive aggression- frustrating the goals of the opposition by doing nothing. • E.g. Morgan Stanley suggests, once conflict is manifest, organizational effectiveness suffers because coordination and integration between managers and subunits break down. • Managers need to do all they can to prevent conflict from reaching the manifest stage: • Because of the breakdown and the aftermath of conflict.

Stage 5: Conflict Aftermath
• If the sources of the conflict have not been resolved, the disputes and problems that caused the conflict arise again in another context. • Every episode of conflict leaves a conflict aftermath that affects the way both parties perceive and react to future episodes. • If a conflict is resolved before it gets to the manifest conflict stage, then the aftermath will promote good future working relationships.

• If a conflict is not resolved until late in the process, or is not resolved at all, the aftermath will sour future working relationships, and the organizational culture will be poisoned by permanently uncooperative relationships. • John Mack’s task was to prevent this from occurring at Morgan Stanley, to find ways to get its managers to put the past behind them and cooperate to get the company back on track. • In the family-run business, as seen in the case of the Ambanis, the mother helped to reduce the conflict.



• Since task interdependence and differenced in goals are two major sources of conflict , altering the level of differentiation and integration to change task relationships is one way to resolve conflict. • An organization might change from a functional structure to a product division structure in order to remove a source of conflict between manufacturing managers who are unable to control their overhead costs associated with different kinds of products. • Moving into a product structure makes it much easier to asssign overhead costs to different product lines. • Similarly if product managers are finding it difficult to convince departments to cooperate to speed product development, the move to a product team structure, in which different functional managers are assigned permanently to a product line, will remove the source of the problem.

• Increasing the level of integration is one major way in which organizations can manage the problem of differences in subunit goals. • To solve potential conflict situations, organizations can increase their use of liaison roles, task forces, teams and integrating mechanisms. • Another way is to make sure that the design of an organization’s hierarchy of authority is in line with current needs. • As an org grows and differentiates, the chain of command lengthens. This loss of control over hierarchy can be a major source of conflict. • Flattening hierarchy and decentralizing the authority can remove a major source of org conflict.

If divisions are battling over resources, corporate managers can increase the number of integrating roles in the organization and assign top mangers the responsibility for solving conflicts between divisions and for improving the structure of working relationships.

•Good org design should result in the creation of an organizationaal structure that minimizes the potential for org conflict. •However, because of inertia, many orgs fail to manage their structures and change them to suit the needs of the changing environment. •As a result, conflict increases an org effectiveness falls.

•One way to harness conflict between subunits and prevent the polarization of attitudes that result during the stage of felt conflict in Pondy’s model is to set up a procedural system that allows parties in conflict to air their grievances and hear other group’s point of view. • in this way subunits can clarify their assumptions they are using to frame the problem, and they can develop an understanding of one other’s motives. •A procedural system is important in managing industrial conflicts between managers and unions. •When a union exists formal procedures govern the resolution of disputes to ensure that the issue receives a fair hearing. •An important component of bargaining in labour disputes is attitudinal restructuring- a process designed to influence the attitudes of the opposing party and to encourage the perception that both parties are on the same side and want to solve a dispute amicably.

•An org engages a third-party negotiator to moderate a dispute between subunits or stakeholders. •A third party negotiator can be a senior manager or an outside consultant. •The negotiator’s role is to prevent the polarization of attitudes that occrs during the felt conflict and thus prevent the escalation to manifest conflict. •Negotiators are skilled in managing org conflict and supports the weaker party in the dispute to make sure that both the sides of the argument get heard. •Another way of managing conflict through attitude change is by exchange and rotation of people between subunits to encourage groups to learn each other’s point of view. •Japanese org continuously rotate people from function to function so that they can understand the problems and issues facing the org as a whole.

•When attitudes are difficult to change because they have developed over a long period of time, the only way to resolve the problem may be to change the people involved. • this can be done by permanently transferring the employees to other parts of the org, promoting them or firing them. •An org’s CEO is an important influence in the attitudes in a conflict. •The CEO personifies the values and culture of the org, and the way the CEO acts effects the attitudes of the other managers directly. •As head of the org, the CEO also has the ultiate power to resolve conflict between conflict between subunits.

• A strong CEO actively manages organizational conflict and opens up a debate , allowing each group to express its views. • The strong CEO can then use his or her power to build a consensus for a resolution and decision and can motivate subunits o cooperate to achieve organizational goals. • A weak CEO can actually increase organizational conflict. • When CEO fails to manage the bargaining and negotiation process between subunits are encouraged or allowed to fight for their goals at the expense of other subunits

• A weak CEO produces power vacuum at the top of the org, enabling the strongest members of the org to compete for control. • As consensus is lost and infighting becomes the order of the day, conflict becomes destructive.

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