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For a manager the ability to effectively resolve and prevent industrial and labour disputes is the professional competence and skill in leading companies; it makes the constructive, but not destructive and it is the corporate value. Manager is much more effective when coping with complex management problems if he/she knows the features of a conflict resolution, the patterns of conflict, identifies the reasons and aims of the conflict, understands everyone’s true interests in a particular situation, knows conflict analysis methods and the organization of joint search for solutions.

Many people associate the conflict in the organization with the violation of relationships, loss of mental equilibrium and emotional imbalance. However, the conflict may be useful both for the conflicting parties and for the company. Conflict is a situation in which the goals and interests of some people are contrary to the purposes and interests of other people. Conflict arises in the collision of incompatible activities. Conflict takes place whenever mutually dependent parties strive to reach incompatible aims. Since organizations were labelled as systems of co-dependent units with conflicting interests, conflict is an inescapable part of organizational life.

The conflict in the organization is a conscious contradiction between communicating members of the team, which is accompanied by attempts to resolve it within the organization space. Group structural feature of the conflict is manifested in promoting the prevention of stagnation, and can be a source of innovation and development (emergence of new goals, norms, and values). Conflict detects and eliminates the objective contradictions that exist between the members of the team, and it contributes to the group stabilisation. Distractive essence of conflict can be shown in the abusing of the system, in communication, relationships, reducing the value-orientation of unity, lower group cohesion and as a result a decrease in the level of the group functioning as a whole. Usually conflict carries both constructive and destructive sides, and with the development of the conflict its functionality may vary.

The main purpose of the conflict is to find the desirable outcome for the conflicting sides. The term desired outcome means the situation when the result of conflict satisfies all participants and can prevent the emergence of the same conflict again. In order to determine how to manage a conflicting situation, it is necessary to consider a variety of desired outcomes. Lots of researches, for example, Mandelbaum and Pomerantz (1991), referred to the searching of the desired outcomes as the primary aim of conflict solving process. The goal of the first stage of model development was to identify the desired outcomes expected to be the most relevant to disputants as well as to the third parties involved in intra organizational conflicts. Research has shown that when managers step into conflict resolution, they tend to choose from the range of criteria for evaluating the effectiveness or their interventions. These criteria may encompass some aspects of effectiveness, efficiency, satisfaction or fairness. The efficiency criteria means that the action taken will resolve the conflict with a minimal amount of resources, for instance, employees’ and manager’s time, expenses, work. The effectiveness means that the action will insure the conflict is solved well and remains solved, for instance, using the resolutions that mean listening to all disputers’ views and then during the discussion the appropriate solution minimizes the conflict effect and reappearance of it. When the third criteria participant satisfaction is the solution, it means that the action will insure that parties are satisfied with the outcome – the only way to join satisfaction is letting disputers present their points of view and then to think of the solution that would satisfy both parties. The last criteria is fairness, which means that whether the action will solve the dispute in a way that the parties believe is fair according to some external standards. Research has shown that when choosing which actions to take, managers typically weight efficiency and effectiveness higher than the other criteria.

 The three major conflict resolution strategies are: interest-based, rights-based, and power-based strategies. Interest-based strategy is the win-win strategy, the solution of which is acceptable to the every part of conflict. It is called a win-win strategy, because interests are the needs, concerns and desires of individuals or groups. During the conflict solving process the problem-solving techniques such as negotiation can be used, and they are arbitration and mediation. The power-based strategy can only be effective when one party is superior in resources, or possesses the resources that the other party needs or desires, because power represents one party's ability to impose its decisions about the outcome of disputes upon others.

Conflicts are normal occurrences in any kind of social communications and they take place when people disagree with one another, or with a society. Conflicts can have positive and negative effect on the organisation activity, and the conflict result depends on the managers’ knowledge how to deal and cope with the problems within the organisation.

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