CONFLICT MANAGEMENT DURING ORGANISATIONAL CHANGE

Conflict is defined as a process that begins when one party perceives that another party has negatively affected, or is about to negatively affect, something the first party cares about. For conflict to exist, it must be perceived by those involved.¹⁰ The conflict process as discussed by Robbins and Judge⁸ has five stages:

• potential opposition or incompatibility,
• cognition and personalisation,
• intentions,
• behaviour, and
• outcomes.

While conflict can be perceived as a normal consequence of daily interactions at work, there are seminal events in the life of organisations on which conflict can be anticipated and must be especially well managed. One such area is conflict that is associated with organisational development and change.

Although change comes to organisations in many ways, an area of particular interest to this discussion is conflict associated with mergers and acquisitions, the integration of two distinct and separate organisations. The ability to manage this conflict effectively is crucial to the success of the merger or acquisition.

Mergers can have a traumatic effect on employees.³ Maintaining employee morale during the integration process has been found to be one of the most essential factors contributing to the success of mergers and acquisitions.² When an acquisition occurs, numerous potential conflict catalysts result from the complex work adjustments and personal concerns that come with the integration of the new entity.

The financial consequences of acquisitions are potential sources of conflict. These include layoffs, changes in reward systems, pay referents, and available resources.¹ How employees respond to these potential conflicts shapes their behaviour during the integration phase.

A power element that can create conflict is the change in leadership. An “us versus them” mentality can develop when the management team of “one” of the organisation is removed and replaced by managers from the “other” organisation.

When two companies merge or is acquired by another, the cultures of the two companies are often not the same. How employees make sense of these cultural differences and the changes that ensue can often affect the level of conflict that results. When mergers and acquisition occur, emotions tend to run high. Anxiety can lead to hostility and/or suspicion when employees are concerned about what the future holds for them.¹

There are several ways in which the organisation can manage potential conflicts following the merger. These include in “all-hands meeting”, where open communication and assurances may blunt the fear and uncertainty that preceded it. Perhaps the chief area of concern is the rapidly changing organisational culture. Adaptation to a new culture is a significant aspect of most mergers and acquisition. It can be particular difficult when there is a lack of congruence between the cultures of the two organisations.⁵

According to conflict specialist Afzahur Rahim’s⁷ model, five different conflict-handling styles can be plotted on a 2x2 grid. High to low concern for self is found on the horizontal axis of the grid, while low to high concern for others forms the vertical axis. Various combinations of these variables produce the five different conflict-handling styles:

• integrating,
• obliging,
• dominating,
• avoiding, and
• compromising⁶ 

There is no single best style; each has strengths and limitations and is subject to situational constraint. In studies by Weider-Hatfield⁹ on assessment of Rahim’s diagnostic model, findings suggest that subordinates could benefit by using an integrating style rather than an obliging style and supervisors may do better to take charge than to use an integrative approach, even though subordinates use of an integrative approach with supervisors can reduce conflict.

In order to determine how to manage a conflict situation, it is necessary to consider a variety of desired outcomes.⁴ Conflicts may result in outcomes that is dysfunctional in that it hinders group performance or functional in that the conflict results in an improvement in the group’s performance. Conflict is constructive when it improves the quality of decisions, stimulates creativity and innovation, encourages interest and curiosity among group members, provides the medium through which problems can be aired and tensions released, and fosters an environment of self-evaluation and change.⁸

 

Next topic: Role of the Organisation's Culture and Design in the Change Process

Reference:

1. Cohen, CF, Birkin, SJ, Cohen, ME, Garfield, MJ & Webb, HW 2006,’Managing conflict during an organizational acquisition’, Conflict Resolution Quarterly, Spring, vol. 23, issue 3, pp. 317-331

2. Gutknecht, JE, & Keys, JB 1993,’Mergers, Acquisitions, and Takeovers: Maintaining Morale of Survivors and Protecting Employees, Academy of Management Executive, vol. 7, issue 3,pp. 26–36

3. Imberman, AJ 1985,’The Human Element of Mergers’, Management Review, June, pp. 35–37

4.Jameson, JK 1999,’ Toward a Comprehensive model for the Assessment and Management of Intraorganisational Conflict: Developing the Framework’, International Journal of Conflict Management,vol. 10, issue 3, pp. 268-294

5. Nahavandi, A & Malekzadeh, AR 1988,’Acculturation in Mergers and Acquisitions’, Academy of Management Review, vol. 13, issue 1, pp. 79–90

6. Rahim, MA 2001, Managing Conflict in Organizations, Greenwood Publishing Group

7. Rahim, MA 1985,’A Strategy for Managing Conflict in Complex Organizations’, Human Relations, January, pp. 84

8. Robbins, SP & Judge, TA 2009, Organizational Behaviour:13^th Edition, Pearson Prentice Hall, New Jersey.

9. Weider-Hatfield, D & Hatfield, JD 1995,’Relationships Among Conflict Management Styles, Levels of Conflict, and Reactions to Work’, Journal of Social Psychology, Dec, vol. 135, issue 6, pp. 687-698

10. Yukongdi, V 2009, MGT5000 Management and Organisational Behaviour: Study Book, University of Southern Queensland, Toowoomba

 

Conflict Management During Organisational Change, written by Christopher Lim