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Organizational Conflict

Module 4

Sreenath B.
Roll No.45
Organizational Conflict
• The clash that occurs when the goal-directed behavior of one
group blocks the goals of another.
• Stakeholders compete for the resources that an organization
• Shareholders want dividends, employees want raises.
• An organization must manage both cooperation and
competition among stakeholders to grow and survive.
• All stakeholders have a common goal of organizational
survival, but not all goals are identical.
• Organizational conflict occurs when a stakeholder group
pursues its interests at the expense of other stakeholders.
Organizational Conflict
• Given the different goals of stakeholders,
organizational conflict is inevitable.
• Conflict is associated with negative images,
such as unions getting angry and violent, but
some conflict can improve effectiveness.
• When conflict passes a certain point, it hurts an
The Relationship Between Conflict &
Organizational Effectiveness

Organizational effectiveness A

Low High
Level of conflict
How can conflict improve
• Conflict can overcome inertia and introduce change,
because conflict requires an organization to re-assess
its views.
• Different views are considered, and the quality of
decision-making is improved.
• Beyond a certain point, conflict hurts the organization
and causes decline.
• Managers spend time bargaining, rather than making
• An organization in decline cannot afford to spend time
on decision-making, because it needs a quick response
to recover its position.
• Groups battle for their interests, no agreement is
reached, and the organization floats along, falling prey
to inertia.
Pondy’s Model of Organizational
• Pondy’s model shows conflict as a process of five sequential
stages. i.e. latent conflict, perceived conflict, felt conflict,
manifest conflict, and conflict aftermath.
• Stage 1: Latent conflict
– no outright conflict exists, but there is a potential for conflict
because of several factors.
– According to Pondy, all conflict arises because differentiation leads
to the establishment of subunits that have different goals and
• Sources of Latent conflict:
1.Interdependence 2.Differences in goals and priorities
3.Bureaucratic factors 3.Incompatible performance criteria
5.Competition for resources
Sources of Latent conflict
1. Interdependence:
• As organizations grow and differentiate, subunits want
autonomy. Marketing wants to design advertising.
• Desires for autonomy conflict with the organization’s
aspirations for cooperation.
• As task interdependence increases—that is, moves from
pooled to sequential to reciprocal—the potential for conflict
• Conflict occurs at the individual, functional, and divisional
• If functions were not interdependent, conflict would not exist.
Functions would simply perform their tasks.
• Eg: Manufacturing would not care what engineering did.
Sources of Latent conflict
2. Differences in goals and priorities exist among
different functions.
• Manufacturing wants to lower costs. Marketing
wants to increase sales.
• Incompatible goals create conflict.
3. Bureaucratic factors:
Status inconsistencies can result in conflict. Line
functions often clash with staff functions.
4. Incompatible performance criteria for subunits lead
to conflict.
• If an organization rewards cost control, engineering
does not comply with marketing’s request for a
new product design.
Sources of Latent conflict
5. Competition for scarce resources leads to
conflict. Subunits compete for their share of
• Increased funding allows a division to grow.
Pondy’s Model of Organizational
• Stage 2: Perceived conflict —subunits become aware
of conflict and begin to analyze it.
• Conflict escalates as groups battle over the cause of
• When a subunit perceives its goals to be obstructed,
conflict enters the second stage.
• Each group seeks the source of the conflict and finds
reasons for problems.
• Marketing blames poor sales on poor manufacturing
• Manufacturing says that marketing is not advertising
effectively. Conflict escalates as subunits fight over
the origin of the problem.
Pondy’s Model of Organizational
• Stage 3: Felt conflict—subunits respond emotionally to
each other, and attitudes polarize.
• Subunits develop polarized attitudes of us-versus-them.
Cooperation between subunits declines as well as
organizational effectiveness.
• Conflict escalates as subunits argue, and small problems
escalate to huge, difficult-to-manage, conflicts.
• Stage 4: Manifest Conflict—subunits try to get back at
each other.
• Subunits deliberately impede other subunits. People
aggressively promote their own interests at the expense
of others.
• Fighting and open aggression are common, and
organizational effectiveness suffers.
Pondy’s Model of Organizational
• Once conflict is manifest, coordination between managers and
subunits deteriorates, resulting in a decline in effectiveness.
• Managers should prevent conflict from reaching the manifest
stage to avoid a communication breakdown and a poor conflict
• Stage 5: Conflict aftermath—conflict is resolved in a way
that leaves subunits feeling combative or cooperative.
• Every conflict has a conflict aftermath that influences conflict
resolution in the future.
• If resolved before the manifest stage, conflict will result in a
positive aftermath.
• If conflict resolution takes a long time or doesn’t occur, future
relationships and the culture will be damaged.
Managing Conflict: Conflict Resolution
• Managing conflict is a priority, because conflict
impairs organizational culture.
• Culture is an important way to control behavior.
• Organizations must balance the need for conflict
to overcome inertia and promote learning with
the prevention and escalation of harmful conflict.
• Conflict management techniques depend on
problem source.
• An organization reduces conflict by structural and
attitudinal changes.
Acting at the Level of Structures
• Managers can resolve conflict by changing task relationships:
1. An organization may change organizational structures.
– A functional structure causes problems, such as communication and
measurability problems.
– A product structure assigns overhead costs more accurately. A functional
structure does not reflect the contributions of various functions to a product.
– A product team structure speeds up product development.
2. Increasing integration can overcome conflicts over resources & subunit
orientations. Integrating mechanisms include task forces, teams, and
integrating roles.
3. Flattening the hierarchy and decentralizing authority give employees
decision-making power and makes them accountable.
• Authority relationships must be defined. Conflict is reduced because
employees know their superiors.
Acting at the Level of Attitudes &
• Different divisions and functions have different
ideas about accomplishing organizational goals.
• They can establish procedures to voice
complaints. Procedures play a large role in
managing conflicts between managers and unions.
• Bargaining consists of attitudinal structuring, a
process to convince management and labor they
have much in common.
• A third-party negotiator, such as a senior manager
in an integrating role or an outside consultant, can
• Rotating employees, a tool used by the Japanese,
manages conflict by changing attitudes.
Acting at the Level of Attitudes &
• Long held attitudes may necessitate a change in those
mired in conflict through transfer, promotion, or firing.
• Top-management may be replaced to overcome inertia
and change attitudes.
• The CEO influences attitudes by setting the values and
culture, influencing the attitudes of other managers, and
having the power to resolve subunit conflict.
• Strong CEOs listen to opinions and build consensus.
• Weak CEOs fail to manage conflict, so strong coalitions
fight for their goals at the expense of the weaker subunits.
• As fighting escalates, conflict becomes harmful.
Thank You