CAIIB ABM Module B Unit 6 : Conflict Management and Negotiation

CAIIB ABM Module B Unit 6 : Conflict Management and Negotiation (New Syllabus) 

IIBF has released the New Syllabus Exam Pattern for CAIIB Exam 2023. Following the format of the current exam, CAIIB 2023 will have now four papers. The CAIIB Paper 1 (Advanced Bank Management) includes an important topic called “Conflict Management and Negotiation”. Every candidate who are appearing for the CAIIB Certification Examination 2023 must understand each unit included in the syllabus.

In this article, we are going to cover all the necessary details of CAIIB Paper 1 (ABM) Module B (HUMAN RESOURCE MANAGEMENT) Unit 6 : Conflict Management and Negotiation, Aspirants must go through this article to better understand the topic, Conflict Management and Negotiation and practice using our Online Mock Test Series to strengthen their knowledge of Conflict Management and Negotiation. Unit 6 : Conflict Management and Negotiation

“Conflict’: Concept & Definition

  • ‘Conflict’ may appear to be a sense of anxiety for most of the people but truly speaking, it is a normal part of any healthy relationship.
  • It is part of the human experience.
  • Conflict occurs when individuals or groups are not obtaining what they need or want and are seeking their own self-interest.
  • Conflict is nothing more than a sharp disagreement or opposition of interests or ideas.
  • Whenever two individuals opine in different ways, a conflict arises.
  • In a layman’s language conflict is nothing but a fight either between two individuals or among group members.
  • No two individuals can think alike and there is definitely a difference in their thought process as well as their understanding.
  • Disagreements among individuals lead to conflicts and fights.
  • Conflict arises whenever individuals have different values, opinions, needs, interests and are unable to find a middle way.
  • As per the Oxford Learners Dictionary, Conflict is a situation in which people, groups or countries disagree strongly or are involved in a serious argument.
  • McLean (2005) defines Conflict as the physical or psychological struggle associated with the perception of opposing incompatible goals, desires, demands, wants or needs.
  • Conflict is defined as a clash between individuals arising out of a difference in thought process, attitudes, understanding, interests, requirements and even sometimes perceptions.
  • A conflict results in heated arguments, physical abuses and definitely loss of peace and harmony.
  • A conflict can actually change relationships.
  • Friends can become foes as a result of conflict
  • Conflicts are natural for a person or a group of individuals.
  • They can happen within the family or with the friends for any person. Conflicts are also possible at the workplace.
  • After all, two people can’t be expected to agree on everything, all the time.
  • The key is not to fear or try to avoid conflict but to learn how to resolve it in a healthy way.
  • When relationships pass through some conflict, good collaboration is required.
  • The way, we handle the Conflict influences, reinforces or destroys the relationship.

Conflicts at the Workplace 

  • At any workplace, where a number of people are working together, Conflict is a normal and natural occurrence.
  • Workplace conflict tends to lower the team morale and increase absenteeism, which normally results in the decrease in productivity.
  • Conflict also leads to disruption of desirable state of harmony and stability in an organisation.
  • In simple words, Conflict at the workplace, is the struggle that happens when people feel they have incompatible goals, wants, demands or needs.
  • It causes a massive degree of frustration, pain, discomfort, sadness as well as anger.
  • It has been estimated that Managers spend at least 25 per cent of their time resolving workplace conflicts.
  • The most common response to any situation of conflict is the flight-or-fight response; some prefer run away or avoid the situation at all costs and others prefer to battle it out.
  • In either case, people feel uncomfortable and dissatisfied with the outcome because no resolution is achieved.
  • Conflict is inevitable at the workplace, but it can be managed by handling of disagreements, misunderstandings and struggles.
  • An open mind and a positive approach, definitely makes it easier to manage any Conflict, when it occurs.
  • Conflicts lead to disrespect and unnecessary tensions in organisations.
  • Individuals talk ill about others and spoil the environment;
  • You might be an excellent performer, a diligent worker, but if you keep on fighting with your fellow workers, you would definitely earn a bad name.
  • You will be in the limelight but for all the wrong reasons.
  • It is always wise to do your work sincerely, pack your bags, go home and come fresh the next day.
  • Nobody loves to carry unnecessary tensions; thus it is always advised not to fight at workplaces.

Characteristics Of ‘Conflict’

Hocker and Wilmot (1991) have offered several principles on Conflict which are good indicators of the characteristics of Conflict. Such principles are:

  • Conflict is universal.
  • Conflict is associated with incompatible goals.
  • Conflict is associated with scarce resources.
  • Conflict is associated with interference.
  • Conflict is not a sign of a poor relationship.
  • Conflict cannot be avoided.
  • Conflict cannot always be resolved.
  • Conflict is not always bad.

 

However, the main characteristics of Conflict can be summarised as under: 

Conflict involves opposition 

  • Conflict is a normal part of any healthy relationship. After all, any person or a group of people cannot be expected to agree on everything, all the time. When an individual or a group of individuals is in disagreement with the other, it leads to Conflict. Thus, conflict takes its course only when opposition is there.

A conflict is more than just a disagreement 

  • Conflict is not only a disagreement but it is a situation in which one or both the parties perceive a threat. The threat is may be real or just an imagination.

Response to Conflicts is based on perceptions

  • Normally, the response to Conflicts is not an objective review of the facts. It is based on the perceptions of the situation, which are influenced by the life-experiences, cultures, values and beliefs of the concerned person or the group.

Conflict is inevitable 

  • Conflicts are part of all relationships between individuals who work together. Conflict is internal discord that occurs because of a difference in ideas, values or perceptions or in the interpretation of a situation. (Marquid, cited by Kelley, 2006).
  • In the world of today, organisations hire employees from diverse geographical locations with dissimilar cultural and intellectual backgrounds, as well as various viewpoints. People of various backgrounds and different work styles are brought together to work for a shared business purpose. In such a working environment where people have disparate outlooks toward the same problems, disagreements are bound to happen and workplace conflict is inevitable.

Conflict will always remain among humans 

  • Conflict is an inevitable and unavoidable element of our personal and professional lives and one should not try to avoid it. There is a proverb that says, ‘if you always see two friends smiling all the time, it shows that they haven’t been telling each other the truth.’ Since there will always be differences between human due to the compatibility factor, Conflict will continue to stay in life for everyone.

Conflict cannot be avoided 

  • Two or more people or groups are different in educational level, family background, organisational training, etc., so conflicts cannot be avoided. Sometimes the end goal can make parties evolve stronger and better.

Conflicts are an opportunity for growth 

  • Conflicts, once resolved, help to build trust among one-another. They give confidence and strength to believe that relationship can survive challenges and disagreements. Many times, Conflict can also be called a process because it begins with one party perceiving the other to oppose or negatively affect its interests and ends with competing, collaborating, compromising or avoiding.

Are Conflicts Bad and/or Undesirable? 

There are three viewpoints:

  • Traditionalists believe that Conflict is bad and should be avoided.
  • Human relations experts feel that Conflict is natural. It provides an avenue to know the opinions and also, an opportunity for creativity and persuasion. Thus, it calls for an open approach to Conflict.
  • Integrationists view Conflict as inevitable and helpful. Conflict is viewed as a positive force except that when it is misdiagnosed, mismanaged or improperly avoided.

Types Of ‘Conflicts’

Organisational conflict is disagreement between groups or employees regarding work-related issues. The three main types of conflict that we find in the workplace are related to task, relationship and values.

Task Conflict 

  • Task conflict involves differences based on work details and goals. Task conflict isrelated to the concrete issues related to employees’ duties and expectations at work.
  • It also includes assignments given to employees and also disputes about sharing of resources, differences of opinion on procedures and policies and in some cases, even interpretation of facts.

Relationship Conflict 

  • Relationship conflict is a type of personal conflict that develops over disagreements and differences between individuals or groups. This type of conflict is over personal issues and not work-related.
  • Due to its peculiar nature, this type of conflict can be the most difficult to diffuse and resolve in an organisation. Relationship conflicts can be long lasting and hurt overall employee job commitment, productivity, trust and work performance.

Value Conflict 

Value conflict arises from fundamental differences in the life experiences, cultures, identities, values and beliefs. This can include even differences in politics, religion, ethics, norms, etc. Disputes about values can also arise in the context of work decisions and policies also.

Intra-individual/Intra-personal Conflict 

Conflicts can also arise intra-personal, where an individual’s objective and vision differ from his/her company’s overall vision. This refers to a conflict within an individual.  Conflict can be Intra-individual conflict arises from frustration, numerousoles that demand equal attention but is riot always possible to devote, and goals having both negative and positive aspects.  In sum, there can be three types of Intra-individual/Intra-personal Conflict which are:

  • Goal conflict
  • Conflict from frustration
  • Role Conflict

Reasons For Conflict

Misunderstandings, lack of communication, disagreement, etc., are an integral part of the work culture but the problem is that when it escalates, it leads to conflict that often hampers the efficiency and productivity level of a company and its employees.

  • Resistance to change: In this fast-changing working environment, there is a fear of the unknown amongst the employees. It is a fact that the workforce is afraid of the management and does not see their ability to manage a change.
  • Work habits: A few work habits of the employees can be a cause of conflict in the workplace. Habits like being extra diligent in work and keep on rechecking the file may also become a cause for conflict.
  • Poor communication: Different communication styles can lead to misunderstandings between employees and supervisors or managers. Lack of communication with team members and managers drives conflict underground.
  • Personality clashes: All work environments are made up of differing personalities. Team members and managers should understand and accept each other’s approach to work and problem-solving. In the absence of such understanding, conflict may occur.
  • Poor performance: When one or more employees within an organisation are not performing well or are not meeting their potential and the issue is not addressed, conflict is inevitable.
  • Poor supervision: Sometimes, the managers or supervisors are incompetent at their job and are not smart enough to manage. They play a biased role and listen to only one side of the conversation.
  • Other reasons: Conflicts may also be caused by any one or more of the following reasons:
  • Economics: Insufficient remuneration to employees. Stress from working conditions such as functional situations.
  • Weak Leadership: When the leader/manager is less qualified and/or having less experience than the team members/employees.
  • Poor Organisational Structure and Lack of Teamwork.
  • Status: When senior position is needed for status and a “wrong” person is promoted.
  • Power struggle: When everyone wants to be a leader and nobody wants to be a follower.
  • Incongruence: An employee is required to do something that is beyond his/her liking or interests. Lack of transparency at the management level

Different Phases Of ‘Conflict’

Basically, a Conflict can have five phases, which are as under: 

  • Prelude Phase: It involves all the factors which possibly cause a conflict among individuals. Lack of coordination, differences in interests, dissimilarity in cultural, religion, educational background, etc., are vital aspects in arousing a conflict.
  • Triggering Phase: No conflict can arise on its own. There has to be an event which triggers the conflict. To illustrate, Ram and Rahim never got along well with each other. They were from different cultural backgrounds, a very strong factor for possibility of a conflict. Rahim was in the midst of a presentation when Ram stood up and criticised him for the lack of relevant content in his presentation, thus triggering the conflict between them.
  • Initiation Phase: Initiation phase is actually the phase when the conflict has already begun. Heated arguments, abuses, verbal disagreements are all warning alarms which indicate that the fight is already on.
  • Differentiation Phase: It is the phase when the individuals voice out their differences against each other. The reasons for the conflict are raised in the differentiation phase.
  • Resolution Phase: A Conflict leads to nowhere and as such, individuals must try to reconcile and compromise to some extent and resolve the conflict soon. The resolution phase explores the various options to resolve the conflict.

Conflict Resolution

  • Conflict triggers strong emotions and can lead to hurt feelings, disappointment and discomfort.
  • When handled in an unhealthy manner, it can cause irreparable rifts, resentments and disputes.
  • But when conflict is resolved in a healthy way, it increases the understanding of the other person, builds trust, strengthens relationships and thus, helps to increase productivity.
  • Key to manage conflict is not to fear or try to avoid conflict but to learn how to resolve it in a healthy way.
  • It is the duty of the management to resolve the same.
  • Resolution of conflict is not an easy job.
  • Resolving conflict in a positive manner is a skill that can be developed and practiced.
  • By resolving conflict constructively, an organisation can turn a potentially destructive situation into an opportunity for growth, creativity and enhanced performance.
  • Now the question is – what style or method should be followed to resolve a conflict? Well, the easiest three step formula is:
  • Listen
  • Talk
  • Resolve

The conflict resolution process in five steps can be framed as under: 

Conflict Management

  • In most conflicts, neither party is right or wrong; instead, different perceptions collide to create disagreement.
  • Conflict is natural and it’s up to the organisation to respond to conflict situations quickly and professionally.
  • Conflict can be very positive, if one deals with it openly.
  • Thus, he/she can strengthen the organisation by correcting problems.
  • Conflicting views give a chance to learn more about the people, explore views of others and develop productive relationships.
  • Managing conflict is an area of human skills that is necessary because human beings constitute and manage an organisation.
  • This may sometimes require training in different skills that can be adopted in different situations of life.
  • Such training can be helpful in minimising unnecessary issues that lead to conflict.
  • Conflict management is a fundamental requirement for an organisation as it not only helps in resolving the conflict but also enables them to take preventive measures to reduce conflict in the organisation.
  • Hence, every organisation is required to establish a conflict management process.
  • Studies are going on for a long time to find suitable means and ways to manage conflicts.
  • Many styles of conflict management behaviours have been developed.

How to Minimise Conflicts? 

  • No manager should avoid a conflict, hoping it will go away.
  • It would be better to ask the participants to describe specific actions they want the other party to take.
  • It would be beneficial to have a third party (meaning a non-direct superior with access to the situation) involved.
  • Finally, it is advisable not to meet separately with people in conflict. A manager should take following actions to minimise conflicts:

A manager should take following actions to minimise conflicts:

  • Regular Review of Job Descriptions With the pace of change, the job description must also change. But this will be possible only when the job descriptions are regularly reviewed.
  • Establish Rapport and build Relationship with all your Subordinates For stablishing rapport, meet them at regular intervals; ask them about their achievements, problems, and challenges.
  • Regular Reports A manager must get progress report about his subordinates regularly, indicating achievements, current needs and future scenario.
  • Training Every manager needs to be provided training in interpersonal communication, conflict management and delegation of authority.
  • Mutual Development of Procedures For routine tasks, the procedures should be developed keeping in mind the inputs received from employees. If possible, encourage them to share their views in writing. Such written procedures should be distributed to all concerned. If need be, concerned employees be trained in those procedures.
  • Holding Regular Meetings The managers need to hold regular management meetings to inform subordinates about new initiatives to be taken and the progress of current programmes.
  • Suggestion Box Consider such a box in which employees can provide suggestions.

Negotiation Skills For Resolution Of Conflicts

  • Negotiation is useful when two individuals have a similar objective in mind but both of them conflict on how the objective is reached.
  • Conflict resolution is a way to quell these conflicts and ensure the objective is met.
  • Hence, conflict resolution in its many forms is an imperative tool in having productive negotiation periods that ensure an objective will be met.
  • Conflict can involve issues of power and authority.
  • Adults may resort to threats and punishments to solve problems with children.
  • Labour unions may strike and management may respond by laying off workers.
  • These are examples of using power to control, intimidate and force solutions on other people.
  • These forced outcomes only add to the grounds for future conflict.
  • Conflictre solution is the process of resolving a dispute or a conflict by meeting at least some of each side’s needs and addressing their interests.
  • Conflict resolution sometimes requires both a power-based and an interest-based approach, such as the use of legal power and attempts to reconcile each party’s interests through negotiation.
  • Negotiation holds the key to getting ahead in the workplace, resolving conflicts and creating value in contracts.
  • Especially in the resolution of conflict, negotiation can play an important role.
  • It is really easy to resolve conflict through the art of negotiation.
  • Nonetheless, it is possible to turn tense conflicts into productive negotiations and maintain strong relationships between the two parties.
  • The importance of negotiation skills in these instances is paramount.
  • The right approach to negotiation can improve the situation of multiple parties.
  • Conflict negotiation is communication focused on finding an agreement that addresses the concerns of parties who want different outcomes. Common situations that involve handling conflicts in negotiation include:

Conflicts between employees 

  • Employees may sometimes encounter conflict about responsibilities or work quality.
  • Resolving the conflict and addressing these concerns through negotiation is a primary duty of supervisors and managers.

Compensation 

  • Whether finalising salary for a new employee or entering a contract with a vendor, finding a mutually acceptable rate often requires negotiating between differing ideas of fair pay.

Disputes between a business and the public 

  • Businesses that serve the public, sometimes need to respond to a dissatisfied customer or group of concerned individuals.
  • For example, a restaurant manager could enter conflict negotiation with a dissatisfied customer to resolve an issue with a meal.

Disagreements during collaboration 

  • Project teams could encounter conflict on factors like how to use limited resources or approach a client request

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