Conflict Management in Organizations: A case of Procter and Gamble and Chrysler

Author: Iloka Benneth Chiemelie
Published: 30th August 2015

Introduction

In the organizational settings, growth and sustainability is the desire of any firm that has opened business for its customers. The essence of this is because it is the only way that the firm will be able to make returns on investment and subsequently support further investment, and without growth, the company will not be able to survive for a long time. On that account, it becomes important that companies must ensure that they look into issues surrounding their organization, which can potentially influence their business growth negatively.

However, some of these issues cannot entirely be eliminated in the system, instead the company must look for a way to live by these issues and manage them to ensure a reduction in negative influence. Conflict is one of those issues that cannot be entirely eliminated but must only be managed. As such, this paper looks to understand the conflict issues in Procter and Gamble and in Chrysler, as well as how these companies manage conflict within their system.

What is conflict?

Conflict is no longer a new topic in the business management literature and it has for long gained high interest from both researchers and managers For instance, Lipsky and Seeber (2006) stated that organizations have changed their view of conflict management in the course of the pas 25 years. On a particular note, it was made known that organizations are now more proactive and strategic in the way they manage conflict (ibid: 360).

The presence of conflict as an issue that cannot be eliminated in the organization has not been easy for managers to handle and even these managers acknowledge spending approximately 42 percent of their time on conflict management (Watson & Hoffman 1996). This issue has now become more prominent as researches have known that conflict can decrease organizational performance through a subsequent decrease in the understanding of the system amongst people within the system (Meyer 2004), as well as having the power to debilitate the health and well-being of individuals (De Dreu et al. 2004). While it can easily be misconceived that conflict is all about negative impact, a number of researches have actually linked conflict to increase in creativity, innovation and business development (Nemeth et al. 2004).

Conflict has been defined by researchers to be in a broad form (e.g., Rahim 2002; Lipsky & Seeber 2006). Rahim (2002) defined conflict to be a form of interaction which is born through incompatibility, disagreement, or dissonance either within or between social entities (for instance: individuals, groups or organizations). According to Lipsky and Seeber (2006), three types of organization conflict exist as: Latent and manifest disagreement – this is a form of conflict in which the employees function in a different way than is expected of them and as such result in conflicts between the employees, groups or organization; Workplace dispute – this is more of an informal complaints, grievances of misunderstanding between people in the workplace; or Litigations – which is used to describe any lawsuits and charges that have been filed with a regulatory agencies (Lipsky and Seeber 2006: 363). Conflict is generally conceived to be field; incompatibilities, struggles in its expressed form and interdependence existing between two or more parties (Putnam 2006).

How to manage conflict

From the conventional view, conflict has been linked to negative outcomes in the organization. From that point, it is clear that conflict needs to be managed in order to ensure that they don’t result of these negative influences (Bush & Folger 2005: 247). However, opposite arguments exist that conflict can be linked to organization growth because of its influence in creativity and innovation as employees learn to define their own approaches to conducting their business activities and the outcome can be an increase in business growth due to adoption of new and innovative approach (Ruben 1978: 206).

Models used in the management of organizational conflict have been very prevalent in communication literatures (Putnam 2006), and this has helped to create a number of concepts that can be used to manage conflict. The first of such model is the integrative and distributive negotiation model that is primarily based on the works of Walton and McKersie’s (1965) on labor negotiation, which examined the formal approaches used in conflict management. Secondly, mediation competency model is another conflict management tool that is used to refer to third party interventions on conflicts. On the final ground, the dual concern model is another tool, which focuses on individual level conflict management in organizations. A number of researchers (e.g., Guetzkow & Gyr 1954; Pinkley 1990; Jehn 1997; Amason 1996) have made the suggestions that there are two dimensions that are very relevant in terms of conflict management and they are: disagreements related to substantive issues and disagreements related to affective issues (Jehn 1997). The substantive dimension refers to disagreements that are related to tasks, policies and other issues in the organization (Rahim 2002), while the affective dimension refers to issues that are generally created due to negative reaction of members in the organizational system (e.g. personal attacks of group members, racial disharmony, sexual harassment) (Rahim 2002: 208).

The argument presented is that substantive is more effective than affective approach because it is based on predefined polices and rules (Rahim 2002). However, a number of literatures suggest that they cannot be adopted individual but must be based on a combined approach (e.g., Tjosvold 2008). The general consensus is that the decision to adopt any dimension is based on the situation faced by the company and the company’s view on which is the best approach to solve its conflict issue.

Company identification

In the case of this paper, the two companies that will be analyzed are:

1.      Procter and Gamble

2.      Chrysler

Company background

Chrysler (Daimler AG)

Previously known as DaimlerChrysler, Daimler AG is a Stuttgart based German manufacturer that is known across the globe with its famous Marque, Mercedes-Benz (Lee and Carter, 2012). The company manufactures luxury cars, coaches and trucks. It also offers financial services through its Daimler Financial Services. The origin of the company can be traced back with the invention of the world’s first car by Karl Benz and it is the world’s oldest company.

Few months after the invention, Gottlieb Daimler (the parent company was named after him as Daimler AG) and the engineer, Wilhelm Maybach, and the first Mercedes was produced in 1901. A merger between Karl Benz and Gottlieb Daimler companies resulted in the formation of the company (Daimler-Benz), which produced the first Mercedes Benz automobile. Since, Mercedes-Benz has introduced numerous technological features and safety tools that have become common in most modern cars (Lee and Carter, 2012).

Today, Mercedes-Benz is one of the most respected and largest automobile manufactures in the world, maintaining consistent appearance in the world’s top ten brand ratings.  The company also has major shares in EADS (an aerospace group), Mclaren Group, Mitsubishi Fuso Truck and Chrysler Holding, LLC (Lee and Carter, 2012).

Presently, Mercedes-Benz has different ranges of passenger, light commercial and heavy commercial vehicles. The company’s production is also on a global scale. The company’s brands include Mercedes Benz, (A, B, C, G, GL, CLK, CLS E, ML, R, S SL, SLK, SLR models), commercial vehicles, trucks, buses and component, with a financial services. The company also maintains active presence in Motorsports (Formula One, Formula Three and DTM). In formula One, the company partly owns Team Mclaren and has supplied the team with engines since 1995 (Lee and Carter, 2012). Mercedes-Benz products are available through dealership in over 130 countries.

Daimler has a unique corporate culture that is built around increased productivity through continuous improvement in all their business sectors. The company vividly understand the importance of maintaining good relationship with their employees, and this they do by empowering them to become better in their duties through training and development, as well as reward programs designed to appreciate their efforts. The corporate culture of Daimler AG can then be summarized as continuous improvement through internal growth and development.

Procter and Gamble

The company is the world’s oldest and most renowned brand when it comes to groceries and FCMGs. It is an American supper brand that now functions on a multinational scale for the purpose of serving customers all over the world and has its headquarter in Cincinnati (P&G, 2013). Its products include foods and beverages and the company recorded $83.68 billion in sales and it went on to the awarded the top brand by fortune magazine as it also served

Conflicts faced by the companies

P&G – in the case of P&G, the company has experienced a number of conflicts in its system. However, this experience can be divided into either individual based or company based. It is still in line with the substantive and affective approaches discussed in this paper. The employees experience conflicts between their fellow colleagues or managers, and there have also been case where the company experienced conflict with its workforce, reading to strike.

Chrysler – basically, the case of conflict as experienced in Chrysler is similar with what is obtainable in P&G in the sense that the company has had to deals with issues resulting from misunderstanding between its workforce and issues result from misunderstanding between the company and its workforce as well.

Techniques used by both companies to manage conflict

In terms of conflict management, the companies discussed have adopted by the substantive and affective approach. This is based on the understanding that they have both had to deal with issues relating to conflict amongst employees and issues relating to conflict between the workforce and the company. On that ground, it can be stated that these technique are very common in the business setting because the mode of conflict handled in this case are very common as well.

Relationship of companies’ techniques

Just as Tjosvold (2008) stated, it is impossible for the two terms to operate differently because the dimension of conflict management is something that revolves around the company having to deal with issues existing between employees and also issues existing between the company and its employees. As such, it can easily be viewed that the concept of both substantive and affective dimensions t conflict management is something that cannot be easily overlooked in the organization settings because companies will at some point in their business operations be forced to deal with these issues and it is expected that they will in essence adopt any or both of these dimensions – which is why the conflict management approach in the companies discussed is very much similar.

Comparison of company techniques

In terms of comparing the conflict management approach, the view will be based on effective technique design and implementation. This is because both P&G (Procter and Gamble, 2013) and Chrysler (Lee and Carter, 2013) have predefine approaches for handling conflict in their system. When the company experiences conflict in the latent, workforce or legislative view, they have a well-designed system that deals with understanding what should be done and how it should be done. This is contained in their code of business conduct in which employees are expected to undertake their business process in predefined approaches for the continued growth of the company or face the consequences of not undertaking such, as well as the expectations of companies to pay the employees for works done. On that ground, it becomes clear that conflict management is more substantive in the sense that agreements are referred back to by both parties in the process of managing conflict.

Opinion on conflict and techniques for managing conflict

The vie won conflicts is mixed in the literature contained in this paper and this is based on the understanding that some authors associates it with negativities while others link it to positive views. No matter the view, the consensus is that conflict exist in organizations and this is also what the researcher thinks in this case. The researcher also thinks that conflict can yield both positive and negative outcomes. In terms of the positive outcome, individuals in conflict can better define their business approach by limiting their dependence on people and enhance their innovative and creative skills. On the negative side, it leads to issues such as absenteeism, reduced motivation and commitment. The negative issue is what this paper seek to address and the view on that is that companies should learn to address all issues related to conflict management in their system by treating them either substantively or affectively, and the expected outcome is a subsequent increase in performance.

Recommendation and conclusion

From the above discussion, it can be seen that conflict management is something that is very common in the organizational setting and companies cannot deny that fact. As such, the focus will not be to debate on whether or not conflicts exist in the system but to determine how conflict can be properly managed in the system. On that ground, it is recommended that companies should learn to accept the fact that conflict exist everywhere and be better prepared to solve issues resulting from these conflicts in order to reduce

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