Chapter 6: Conflict Management and Negotiation in Organization

6.0 Objectives

After this chapter is completed, students will be able to:

 Define conflict and understand the cause of conflict in the organization

 Explain the meaning of conflict in the organization
 Understand how to reduce and prevent conflict
 Explain the types of negotiation and negotiation process

6.1 The Nature of Conflict in Organization

Conflict is natural; it exists everywhere, wherever there is a diverse interest, perception,

resource limitation, group work, even with one self-there is a possibility for conflicts to
exist yet

What is conflict? “Conflict can be a disagreement, the presence of tension, or some other
difficulty within or between two or more parties.” Conflict is common occurrence in
organization.

Conflict is a process resulting in the perceptions of two parties that they are working in
opposition to each other in ways that result in feelings of discomfort.

From this simple definition one can understand as: Conflict is a process, not a singular
event. Conflict may also result from the anticipation of future problems. In the organization,
conflict could also occur at different levels i.e. to say it could occur between individuals or
groups in the organization. In general the basic forms of conflict exist in an organization
could be:

Task conflict- refers to the conflict regarding the goals and content of the work. For-
instance, there could be possible disagreement between managers and employees over
priority of goals so that conflict could occur.

Process conflict- this occurs when the parties agree on the goals and content of work, but
disagree on how to achieve the goals and actually do the work.

Relationship conflict- Occurs when the parties have interpersonal issues.

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Cognitive conflict- It can result when one person or group holds ideas or opinions that are
inconsistent with those of others. It is usually evident in a political debate.

Affective conflict- This type of conflict emerges when one person’s or group’s feelings or
emotions (attitude) are incompatible with those of other.

Intrapersonal conflict: - Conflict within one person. It is self-conflict or a conflict with

oneself. When conflict occurs within an individual, it is called intrapersonal conflict. It
occurs in three ways.

a) Approach-Approach Conflict-Here an individual must choose between two alternatives

which have expected positive outcome.

b) Avoidance-Avoidance Conflict- Here, an individual must choose between two

alternatives which have expected negative outcome.

c) Approach-Avoidance Conflict- Here an individual must decide whether to do something

that is expected to have both positive and negative outcome.

Interpersonal conflict: - it is conflict between two individual disagree on some matters.

When conflict occurs in between individual to individual, it is called interpersonal conflict.

 Intragroup Conflict: When conflict occurs within one group, it is called intragroup
conflict.

Intergroup conflict: - Conflict can be found between groups. When conflict occurs amongst
different groups, it is called intergroup conflict. It occurs in three ways.

a) Vertical Conflict-It refers to conflicts that occur between individuals at different levels.
Conflict between the superior and subordinate is an example of vertical conflict.

b) Horizontal conflict-It refers to tensions between employees or groups at the same

hierarchical level. Horizontal conflict occurs because of interdependence among the parties
concerned in the work situation.

c) Line & Staff Conflict- It refers to the conflicts that arise between those who assist or act
in an advisory capacity (staff) and those who have direct authority to create the products,
process, and services of the organizing (line).

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Inter organizational conflict: - Is the possible occurrence of dispute between two companies
in the same industry.

6.2. Cause of Conflict in Organization

Why organization has conflict? What really causes a conflict? A number of factors are
known to facilitate organizational conflict under certain circumstances. Some of the possible
reasons are:

Tasks interdependencies: - the greater the extent of task interdependence among individuals
or groups, the greater is the likelihood of conflict, if different expectations or goals exist
among entities. This occurs in part because high task interdependency heightens the intensit y
of relationships. Hence, a small disagreement can very quickly get blown up into a major
issue.

Status inconsistencies: - this is due to status inconsistencies among the parties involved. The
prerogative of manager and employees are different due to status, sometimes these difference
might be the possible sources of conflict.

Jurisdictional Ambiguities: - conflict can also emerge from jurisdictional ambiguities-

situations. It could be common in promotion, transfer and other related human resource
management issues where personnel department and other level management found
responsible and difficult to attribute any single unit.

Communication problems: - the various communication problems or ambiguities in the

communication process can facilitate conflict. When one misunderstands a message or when
information is withheld, someone often respond with frustration and anger.

Dependence on common Resource pool: - Whenever several departments must compete for
scarce resources, conflict is almost inevitable. When resources are limited, a zero sum game
exists, in which someone wins and, invariably someone loses.

Lack of common performance standards: - Differences in performance criteria and reward

systems provide more potential for organizational conflict. This condition enforces different
units within the organization to meet their own particular criteria probably ignoring
interdependence among units.

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Individual differences:- A variety of individual differences such as personal abilities, traits
and skills can influence greatly the nature of interpersonal relations. Individual dominance,
aggressiveness, authoritarianism and tolerance for ambiguity all seem to influence how an
individual deal with potential conflict.

6.2.1 Views on Conflict

What comes to your mind when you hear the term conflict, negative or positive, favorable or
unfavorable? This could lead us to state there are differing/ contradicting views on conflict.
According to the management literature, views on conflict are classified into the following:

a. The traditional View- The early approach to conflict assumes that all conflict was bad;
conflict was viewed negatively, and it was used synonymously with such terms as violence,
destruction, and irrationality to reinforce its negative connotation. Conflict, by definition,
was harmful and was to be avoided. The traditional view was consistent with the attitudes
that prevailed about group behavior in the 1930s and d1940s.

Conflict was seen as a dysfunctional outcome resulting from poor communication, lack of
openness and trust between people, and the failure of managers to be responsible to the needs
and aspirations of their employees. Since all conflict is to be avoided, we need merely direct
out attention and to the causes of conflict and correct these malfunctioning in order to
improve group and organizational performance.

b. The human relations view - The human relations position argued that conflict was a
natural occurrence in all groups and organization. Since conflict was inevitable, the human
relations school advocated acceptance of conflict proponents rationalized its existence. It
cannot be eliminated, and there are even times when conflict may benefit a group’s
performance. It was dominant theory from 1940 through the mid-1970s.

c. The interactions approach - While the human relations approach accepted conflict, the
interactions approach encourages conflicts on the grounds that a harmonious, peaceful and
cooperative group is prone to becoming static, apathetic, and non-responsive to needs for
change and innovation. The major contribution of the interactions approach, therefore, is
encouraging group leaders to maintain ongoing minimum level of conflict enough to keep the
group viable, self-critical and creative.

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From these facts we understand that conflict has some positive and negative elements in it. In
technical term these could be referred to as functional and dysfunctional conflict.

Functional conflict is constructive form of conflict. In other words, conflict that supports the
goals of the group and improves its performance, for instance, conflict can lead to the search
for new ideas and new mechanisms as solutions to organizational problems. Conflict can
stimulate innovation and change. It can also facilitate employee motivation in cases where
employees feel a need to excel and as a result, push them in order to meet performance
objectives. Or even conflict can at times help individuals and group members grow and
develop self-identities.

Dysfunctional conflict is destructive form of conflict, that is to say conflict can have
negative consequences for both individuals and organizations. When people divert energies
away from performance and goal attainment and direct them toward resolving conflict. The
intensity and duration of conflict can determine the magnitude of the impacts of conflict.

6.2.2. The Conflict Process

According to Robbins, the conflict process can be seen as comprising of five stages: potential
opposition or incompatibility, cognition and personalization, intentions, behavior and
outcomes.

Stage 1 Potential opposition or incompatibility

The first step in the conflict process is the presence of conditions that create opportunities for
conflict to arise i.e. the existence of conditions for the conflict. The major sources of conflict
can be further categorized as communication, structure and personal variables.

Communication involves word connotations, jargon, insufficient exchange of information

and noise in the communication channel are all barriers to communication and potential
antecedent conditions to conflict.

Stage 2 Cognition and personalization

The antecedent conditions can only lead to conflict when one or more of the parties are
affected by and aware of the conflict. At this stage, conflict must be felt and perceived. It is
the felt level when individuals become emotionally involved, that parties experience anxiety,
tension. Felt conflict is defined as emotional involvement in a conflict creating anxiety,

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tensions, frustrations or hostility. Negative emotions have been found to produce over
simplification of issues, reductions in trust, and negative interpretations of the other party’s
behavior.

Stage 3 Intentions

Intentions intervene between people’s perceptions and emotions and their overt behavior.
These intentions are decisions to act in a given way. Why are intentions separated out as a
distinct stage? You have to infer the other’s intent in order to know how to respond to other
behavior. A lot of conflicts are escalated merely by one party attributing the wrong intentions
to the other party.

Stage 4 Behavior

This is where conflict becomes visible. The behavior stage includes the statement, actions,
and reactions made by the conflicting parties. These conflicting behaviors are usually overt
attempts to implement each party’s intentions.

Stage 5 outcomes

The action-reaction interplay between the conflicting parties results in consequences. The
outcomes of a conflict could be functional or dysfunctional. Conflict is constructive when it
improves the quality of decision, stimulates creativity and innovation, encourages interest and
curiosity among group members and fosters an environment of self-evaluation and change.
Or

Obliviously conflict could also have destructive consequences. A reasonable summary might
state uncontrolled opposition breeds discontent which acts to dissolve common ties. And
eventually leads to the destruction of the group.

6.3. Managing Conflict

From the previous discussion, one can understand that conflict is not something totally
undesirable or to be avoided. Besides, its occurrence in organization is inevitable. If so, what
should be done? What managerial options are available?

Conflict management involves both the stimulation and resolving conflict.

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Managers must know when to stimulate conflict and when to resolve it if they are to avoid its
potentially disruptive effects. The discussion will be presented as follows:

1. Stimulating conflict

A complete absence of conflict may indicate that the organization is stagnant and that
employees are content with the status quo. It may also suggest that workgroups are not
motivated to challenge traditional and well accepted ideas.

Conflict stimulation is the creation and constructive use of conflict by a manager. Its
purpose is to bring about situations in which differences of opinion are exposed for
examination by all. For example, if competing organizations are making significant changes
in products, markets, or technologies, it may be time for a manager to stimulate innovation
and opportunity to reveal differences of opinion that they previously kept to themselves.

What are the possible techniques used to stimulate conflict under controlled conditions?
Some of them are:

Altering the physical location of groups to stimulate more interactions and force resource
sharing.

Communication- using ambiguous or threatening messages to increase conflict levels.

Bringing in outsiders- it is adding/ employing employees to a group whose backgrounds

values, attitudes or managerial style differ from those of present members.

Restructuring the organization- this could include realigning workgroups, altering rules
and regulations, increasing interdependence and making similar structural changes to disrupt
the status quo.

Appointing a „devil‟s advocate‟ designation; a critic to purposely argue against the

majority positions held by the group.

2. Resolving Conflict

As it was previously stated conflict could have both desirable and undesirable outcomes.
Hence, it has to be properly managed. What is conflict resolution?

When a potentially harmful conflict situation exists, a manager needs to engage in a conflict
resolution. Conflict needs to be resolved when it causes major disruptions in the organization

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and absorbs time and effort that could be used more productively. Conflict should also be
resolved when its focus is on the groups’ internal goals rather than on organization goals.

When attempting to resolve conflict, managers should first attempt to determine the source of
the conflict. If the source of destructive conflict is particular person or two, it might be
appropriate to alter the membership of one or both groups. Thus, depending on the nature of
conflict different conflict resolution techniques could be used. The followings are identified
as conflict resolution techniques.

 Problem solving: It could involve face to face meeting of the conflicting parties for
the purpose of identifying the problem and resolving it through open discussion.

 Set Super ordinate goals: Creating a shared goal that can’t be attained without the
cooperation of each of the conflicting parties.

 Expansion of Resources: when a conflict is caused by the scarcity of resource say

money, promotion opportunities, office space – expansion of the resource can create a
win-win solution.

 Smoothing- playing down differences while emphasizing common interests between

the conflicting parties.

 Authoritative command: Some state as forcing – this is when management uses its
formal authority to resolve the conflict and then communicates its desires to the
parties involved.

6.3.1 Using structure to manage conflict:

This is where managers rely heavily on elements of organization structure to manage conflict.
Among the more common methods are the hierarchy, rules and procedures, liaison roles, and
task forces. The facts further explained as follow:

•The managerial hierarchy – organizations that use the hierarchy to manage conflict place
one manager in charge of people, groups, or departments in conflict.

•Rules and procedures – routine conflict management can be handled via rules and standard
procedures. Priority is specifically stated in a rule. But, as useful as rules and procedures
often are in routine situations, they are not particularly effective when coordination problems
and conflict are complex or unusual.
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•Taskforces: this is about to form a taskforce to handle conflict. The members in the
taskforces should be representative from each group.

6.3.2 Using Interpersonal Techniques to Manage Conflict:

There are also other techniques that focus on interpersonal process that can be used to
manage conflict. Some of the techniques include:

Team building- team building activities are intended to enhance the effectiveness and
satisfaction of individuals who work in groups or teams and to promote over all group
effectiveness; consequently there should be less conflict among members of the team.

Survey feedback – each employee responds to a questionnaire intended to measure

perceptions and attitudes. The aim of this approach is usually to change the behavior of
supervisors by showing them how their subordinates viewed them. After the feedback has
been provided, workshops may be conducted to evaluate results and suggests constructive
changes.

Use of third party: A third party, usually a trained external facilitator uses a variety of
mediation or negotiation techniques to resolve problems or conflicts between individuals or
groups

6.3.3. Other techniques for conflict management

Avoidance: Withdrawal from suppression of the conflict. It occurs when an interaction is

relatively unimportant to either party’s goals, and the goals are incompatible. In other words,
because the parties to the conflict are not striving toward compatible goals, and the issues in
question seem unimportant, the parties simply try to avoid interacting with one another.
Avoiding mode is used when the individual is both unassertive and uncooperative – that is,
the person has a very low concern for his own and his opponent‟s needs. The outcome is
“lose/lose “strategy.

Competition: Competition occurs when one party negotiates to maximize its results at the
expense of the other party’s needs. Competition leads to one party gaining the advantage over
the other. One party wins while the other party loses. Although it is quick and can be used as
counter against another person, this option usually produces a win-lose result. Competing is
a power oriented mode of resolving tensions and one uses whatever power one has or skills,
knowledge, abilities etc. to win.

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Collaboration: Collaboration occurs when people cooperate to produce a solution
satisfactory to both. Collaborating involves an attempt to work with the other person to find
solutions that would be satisfying to both parties.

A creative solution usually emerges because of the joint efforts of both the parties who are
keen on both gaining from the situation without hurting the other. The strategy gives high
concern for its own group interest and high concern for the other group interest. The strategy
results in “win/win” outcome.

Compromise: Compromise is the settlement of differences through concessions of one or

both parties. In compromising, the party tries to find some expedient, mutually acceptable
solutions with partially satisfies both parties, though neither is fully satisfied.

Each party to the conflict gives up something of value. The parties need to accommodate and
give up some of their needs. In compromise, often each party gives up something, but
because the interactions are only moderately important, they do not regret what they have
given up. It gives high concern for its own interest and moderate concern for the other
interest. The outcome is “win/some lose” outcome. Contract negotiations between union
and management are examples of compromise.

Accommodation: Accommodation is a negotiation style where one party is willing to oblige

or adapt to meet the needs of the other party.

The party that accommodates loses and the other party wins i.e. giving low concern for
oneself and high concern for the other party. It is a “lose/win” strategy.

Accommodation is useful for negotiation on minor matters. The negotiation parties may not
look for creative, new solutions. Accommodation might take the form of selfless generosity,
or obeying another’s order rather unwillingly or giving into another person’s point of view. In
all these cases, the individual neglects his/her own concern to satisfy the concerns of their
other party. There is an element of self-sacrifice.

6.3.4 Ineffective Conflict Management Practices

Some organizations deal with the practice of ineffective conflict management practices. Some
public or business firms usually practice the following ineffective strategies to deal with
conflict: These are:

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Non - action – this is when a manager response to conflict is doing nothing and ignoring the
problem. It may be felt that if the problem is ignored, it will go away. But in most instances,
ignoring the problem may serve only to increase the frustration and anger of the parties
involved.

Administrative orbiting: This is about when managers acknowledge a problem exists but
then take little serious actions. Instead, they continually report that a problem is
“Understudy” or that” more information is needed”. This is when no tangible actions are
taken to address the problem identified.

Due process Non-action: this is to set up a recognized procedure for redressing grievances
but at the same time to ensure that the procedure is long, complicated, costly, and perhaps
even risky. The due process non action strategy is to wear down the dis- satisfied employee
while at the same time claiming that resolution procedures are open and available.

Secrecy: This is when managers attempt to reduce conflict through secrecy. For instance, one
argument for pay secrecy is keeping employee salaries secret. Essentially, this is a “what
they don‟t know won‟t hurt them” strategy. A major problem of this approach is that, it
leads to distrust of management when managerial credibility is needed for other issues, it may
be found lacking.

Character Assassination: This is when, the person with a conflict, perhaps women claiming
sex discrimination, is labeled a “troublemaker”. Attempts are made to discredit her and
distance her from the others in the group. The implicit strategy here is that if the person is
isolated and stigmatized, he or she will either be silenced by negative group pressures or else
will leave. In either case, the problem is “solved”.

6.3.5. Strategies for Preventing & Reducing Conflict

A. Strategies for Preventing

This is a strategy to prevent dysfunctional conflict when it occurs. Preventing conflict is often
easier than reducing it once it begins. These include:

I. Emphasizing organization wide goals and effectiveness – If larger goals are emphasized,
employees are more likely to see the big picture and work together to achieve corporate
goals.

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II. Providing stable, well-structured tasks: when work activities are clearly defined,
understood, and accepted by employees, conflict should be less likely to occur. Conflict is
most likely to occur when task uncertainty is high; specifying or structuring jobs minimizes
ambiguity.

III. Facilitating inter group communication: Misperception of the abilities, goals and
motivations of others often leads to conflict; so efforts to increase the dialogue among groups
and to share information should help eliminate conflict. As groups come to know more about
one another, suspicion often diminish, and greater inter group teamwork becomes possible.

IV. Avoiding win-lose situations: If win – lose situations are avoided, less potential for
conflict exists. When resources are scarce, management can seek some form of resource
sharing to achieve organizational effectiveness. Moreover, rewards can be given for
contributions to overall corporate objectives; this will foster a climate in which groups seek
solutions acceptable to all.

B. Strategies for Reducing Conflict

Where dysfunctional conflict already exists, something must be done and managers may
pursue one of at least two general approaches: they can try to change employee attitudes, or
behaviors. In addition, the following are identified as conflict reduction strategies:

I. Physical separation- separation is useful when conflicting groups are not working on a
joint task or do not need a high degree of interaction. Though this approach does not
encourage members to change their attitudes, it does provide time to seek a better
accommodation.

II. Use of rules and regulations – conflict can also be reduced through the increasing
specification of rules, regulations, and procedures.

III. Limiting inter-group interaction – Another approach to reducing conflict is to limit

inter-group interaction to issues involving common goals.

IV. Confrontation and negotiation – In this approach, competing parties are brought
together face – to - face to discuss their basic areas of disagreement

V. Rotation of members – by rotating from one group to another, individuals come to

understand the frames of reference, values, and attitudes of other members;

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communication is thus increased. When those rotated are accepted by the receiving groups,
change in attitude as well as behavior become possible.

VI. Identification of interdependent tasks and super ordinate goals: A further strategy for
management is to establish goals that require groups to work together to achieve overall
success.

VII. Use of inter-group training- outside training experts are retained on a long – term basis
to help groups develop relatively permanent mechanisms for working together.

6.4. Negotiation

What is negotiation? What possible actions could be taken when two parties are in
disagreement or engaged in conflict?

Negotiation is what you usually practice in your life/ it is common activity. It is also a means
of settling the difference between parties.

Negotiation is the process in which two or more parties (people or groups) try to reach an
agreement on an issue even though they have different preferences regarding that issue. In
its simplest form, it is a process in which two or more parties exchange goods or services and
attempt to agree upon the exchange rate for them.

A little more complex are the negotiations that take place between employee and manager,
labor unions and the management of a company or between two companies as they negotiate
the terms of a joint venture. The key issues in such negotiations are that at least two parties
are involved, their preferences are different, and they are trying to reach an agreement.

Thus, in general negotiation is a frequent practice in an organization because one can found
managers negotiate with subordinates, peers, and bosses; sales people negotiate with
customers; purchasing agents negotiate with suppliers.

In general, negotiation or bargaining is likely to have four stages. Although the strength or
importance of each stage can vary from situation to situation or from one culture to another,
the presence and sequence of these stages are quite common across situations and cultures.
These stages are:

Non – task time – during this stage, the participants focus on getting to know and become
comfortable with each other and do not focus directly on the task or issue of the negotiation.

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Information exchange – at this stage negotiation involves the exchanges of background and
general information. During this stage, participants may, for example, provide overviews of
their company and its history.

Influence and persuade the other side- Generally, these efforts are designed to get the other
party to reduce their demands or desires and to increase their acceptance of your demands or
desires. There are a wide variety of influence tactics including promises, threats, and
questions and so on.

Closing – the final stages of any negotiation. The closing may result in an acceptable
agreement between the parties involved or it may result in failure to reach an agreement.

6.4.1 Types of negotiation

There are two general categories of negotiation – the use of specific strategies depends on the
nature of the negotiation. The commonly known negotiations types are:

A) Distributive bargaining/Competitive negotiation – It is a “win –lose” bargaining. That

is, the goals of one party are in fundamental and direct conflict with those of the other party.
Resources are fixed and limited, and each party wants to maximize his/her share of these
resources. Finally, in most cases, this situation represents a short – term relationship between
the two parties. In fact, such parties may not see one another ever again. The most identifying
– features is that distributive bargaining operates under zero – sum situations.

That is, any gain one make is at others expense, and vice versa. Probably the most widely
cited example of distributive bargaining is in labor – management negotiation over wages. In
this type of negotiation, each party has a target point that defines what he/she would like to
achieve.

B) Integrative bargaining /Cooperative negotiation: It is “win- win situation” bargaining.

With this technique, both parties try to reach a settlement that benefits both parties. Such an
approach is often predicted on the belief that if people mutually try to solve the problem it is
often referred as joint problem solving. A good example can be seen in bilateral trade
negotiations between two nations.

In terms of inter-organizational behavior, all things being equal, integrative bargaining is

preferable to distributive bargaining. Why? Because it helps to build long – term relationships
and facilitates working together in the future. It bonds negotiators and allows each to level the

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bargaining table feeling that he/she has achieved a victory. Distributive bargaining, on the
other hand, leaves one party a loser.

Table 6.1 Distributive Vs Integrative Bargaining

Bargaining characteristics Distributive Barging Integrative Bargaining

Available resources Fixed amount of resources to Variable amount of resources

be divided to be divided.

Primary motivations I win, you lose I win, you win

Primary interests Opposed to each other Convergent or congruent with

each other

Focus of relationships Short - term Long - term

6.4.2 The Negotiation Process

The negotiation process is all about the activities involved in negotiation.

Robbins identified 5 steps in the negotiation process. These are:

1. Preparation and planning – Before you start negotiating; you need to do your homework.
What is the nature of conflict? Who is involved and what are their perceptions of the conflict?
What do you want from negotiation? What are your goals? You also want to prepare an
assessment of what you think the other party to your negotiation’s goals is. What they are
likely to ask for? What intangible or hidden interests may be important to them? When you
can anticipate your opponent’s position, you are better equipped to counter his/her arguments
with the facts and figures that support your position.

2. Definition of Ground rules- Once you have done your planning and developed a strategy,
you are ready to begin defining the ground rules and procedures with the other party over the
negotiation itself. Who will do the negotiating? Where will it take place? During this phase,
the parties will also exchange their initial proposals or demands.

3. Clarification and justification – when initial positions have been exchanged, both parties
will explain, amplify, clarify, bolster, and justify your original demands. This need not be
confrontational. Rather, it is an opportunity for educating and informing each other on the

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issues, why they are important, and how each arrived at their initial demands. This is the
point where one of the parties might want to provide the other party with any documentation
that helps support your position.

4. Bargaining and problem solving- The essence of the negotiation process is the actual
give – and – take in trying to have an agreement. Concessions will undoubtedly need to be
made by both parties. In bargaining please note the following:

 Begin with a positive overture (proposal).

 Address problems, not personalities

 Pay little attention to initial offers

 Emphasize a win-win situation

 Create an open and trusting climate

Closure and implementation: The final step in the negotiation process is formalizing the
agreement that has been worked out and developing any procedures that are necessary for
implementation and monitoring

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