Conflict Resolution in International Companies (1)

8/8/2019 Conflict Resolution in International Companies (1)

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Conflict is defined as a difference of wants, needs, orConflict is defined as a difference of wants, needs, orexpectations.expectations. The workplaceThe workplace is filled with people whois filled with people whohave differences of wants, needs, and expectations. So,have differences of wants, needs, and expectations. So,

of course, conflicts will occur. These conflicts can be anof course, conflicts will occur. These conflicts can be anasset to the organization. They may be opportunitiesasset to the organization. They may be opportunitiesfor creativity, collaboration, and improvement.for creativity, collaboration, and improvement.

But conflict can also be costly to an organization. TheBut conflict can also be costly to an organization. Thetrouble isn't necessarily the fact that conflict exists. It'strouble isn't necessarily the fact that conflict exists. It's

how we deal with those conflicts or what happenshow we deal with those conflicts or what happenswhen they aren't resolved. The impact of conflict in thewhen they aren't resolved. The impact of conflict in theworkplace can be devastatingworkplace can be devastating -- to the parties involved,to the parties involved,to colleagues and teams, to clients, and to the businessto colleagues and teams, to clients, and to the business

as a whole.as a whole.


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Some of the results of unresolved conflict in the workplaceinclude:

o Stress, frustration, and anxiety

o Loss of sleep

o Strained relationships

o Grievances and litigation

o

Presenteeismo Employee turnover

o Loss of productivity

o Increased client complaints

o Absenteeismo Sabotage

o Injury and accidents

o Disability claims

o Sick leave


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These symptoms of unresolved conflict are a significantcost factor in organizations. Take a look at some of thefacts and figures below. How much is conflict costing

your organization? Mental Health / Stress

o "Unresolved conflict represents

the largest reducible cost in many

businesses, yet it remains largely

unrecognized."

o "Employees in high pressure/low control situationsor high effort/low reward situations have much

greater risks to their physical and mental well being.o "The number of employees seeking help for work-

related conflict has increased from 23 percent in 1999 toclose to 30 percent in 2001.

o A 2005 UK survey by Roffey Park found that "78% of


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managers are suffering from work-related stress, 52%have experienced harassment, 46% have seen anincrease in conflict at work.

o "The total value of lost work time due to stress isestimated to be $1.7 billion.

o An estimated 16% of employees feel that poorinterpersonal relations are a source of stress at work.

o "Employees who rate their managers as "sensitive"miss an estimated 3.7 days of work, wheras employeeswhose managers are rates as "non-sensitive" missapproximately 6.2 days of work.

Grievances/Litigation

o

"The math isn't complicated.A complaint that escalates to a

lawsuit can easily cost $50 000

t $100 000 and take three to five

years to settle. It doesn't stop there.


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o A 2005 UK survey of managers by Roffey Park found that"52% have experienced harassment."

o "Corporations that have developed collaborative conflict

management systems report significant litigation costsavings: Brown and Root reported and 80% reduction inoutside litigation costs, Motorola reported a 75% reductionover a period of six years, NCR reported a 50% reductionand a drop of pending lawsuits from 263 in 1984 to 28 in1993

Presenteeismo "Another set of problems may occur when

employees with high intent to turnover do

not leave the organization. Such employees

tend to have lower commitment, be moredissatisfied with their jobs and reduce morale in the area inwhich they work. Many such employees" retire on the job"(ie. Do not do their share of the work) which causesworkload problems for others in their area."


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o "The rate of 'presenteesim' is estimated to be as much asthree time higher than absenteeism.

Employee loss / turnover

o "Chronic unresolved conflict acts as a

decisive factor in at least 50% of departures.

Conflict accounts for up to 90% of

involuntary departures, with the possible

exception of staff reductions due to downsizingand restructuring.

o The turnover costs for an employee is anywhere between75% and 150% of the annual salary.

o

"A team-member's commitment to the team and the teammission can decrease if intra-team conflict remainsunresolved. ...if unhealthy conflict goes unresolved for toolong, team members are likely to leave the company or usevaluable time to search for alternatives."


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Loss of Productivity/Wasted Timeo "Tension and stress reduce motivation and

disturb concentration. A loss of simpleproductivity of 25% (doing things other than

work related activities, such as discussing thedispute, playing computer games, findingreasons to get out of the area) reduces anaverage work week to fewer than 20 hours...)"

o "Fortune 500 Senior Executives spend 20% of their time in litigation relatedactivities."

o "Over 65% of performance problems result from strained relationships

between employees, not from deficits in individual employee's skill ormotivation." Absenteeismo In a study of 50 000 Canadianemployees nationwide HealthCanada found that "the greaterthe number of sources of stress

reported in the social environmentat work, the greater the likelihood ofreporting more than 10 days off as aresult of ill health."


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o The cost of employee absence alone [in Canada] is approximately$8.6 billion.

o "Employees who report the following sources of stress are morelikely than others to be absent for six or more days...interpersonalrelations; job control; and management practices

Sabotage

o "Studies reveal a direct correlation between

prevalence of employee conflict and the

amount of damage and theft of inventory

and equipment. And, covert sabotage ofwork processes and of management's

efforts usually occurs when employees

are angry at their employer."

Physical Injury /Accidents

o "There is increasing evidence that psychosocialfactors relating to the job and work

environment play a role in the development

of work-related musculoskeletal disorder of the

upper extremity and back."


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Disability Costs

o "...depression and high stress were found to have thegreatest impact on worker health care costs., increasingthese costs more than obesity, smoking or high bloodpressure. In fact, these cost were 46% higher forworkers who felt they were under a lot of stress.

o "Workplace stress and work-

related conflict are among thetop eight reasons why employees

request counseling assistance."

o "Job stress is a key driver of health care costs.

According to the Journal of OccupationalEnvironmental Medicine, health care expenditures arenearly 50 percent greater for workers reporting highlevels of stress."


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In many cases, conflict in the workplace just seems to be afact of life. We've all seen situations where differentpeople with different goals and needs have come intoconflict. And we've all seen the often-intense personalanimosity that can result. The fact that conflict exists,however, is not necessarily a bad thing: As long as it isresolved effectively, it can lead to personal and

professional growth. In many cases, effective conflictresolution skills can make the difference betweenpositive and negative outcomes.

The good news is that by resolving conflict successfully,you can solve many of the problems that it has broughtto the surface, as well as getting benefits that youmight not at first expect:

o Increased understanding: The discussion needed toresolve conflict expands people's awareness of the


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situation, giving them an insight into how they canachieve their own goals without undermining those ofother people.

o Increased group cohesion: When conflict is resolvedeffectively, team members can develop strongermutual respect, and a renewed faith in their ability towork together.

o Improved self-knowledge: Conflict pushes individualsto examine their goals in close detail, helping themunderstand the things that are most important to them,sharpening their focus, and enhancing theireffectiveness.


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However, if conflict is not handled effectively, the resultscan be damaging. Conflicting

goals can quickly turn into personal

dislike. Teamwork breaks down.Talent is wasted as people disengage

from their work. And it's easy to end

up in a vicious downward spiral of

negativity and recrimination.Conflict is bad for business, but good for international

institutions. It gives them a role, keeps plenty of peoplenegotiating and drafting UN resolutions... But Conflict, of course, fundamentally undermines the work of

international institutions. The costs of violent conflictare enormous:

o The average cost of one conflict is nearly equivalent tothe value of annual development aid worldwide;


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o Of the 34 countries furthest from reaching theMillenium Development Goals - rightly the focus ofmuch discussion in New York this week - 22 are in the

midst of - or emerging from - violent conflict;o For every year of civil war, a country's growth rate falls

by an estimated 2.2%

And, if more recent examples were needed, just look at

the Caucasus. In the wake of the Georgia conflict,investors have pulled money out of Russia at thefastest rate since the 1998 ruble crisis and the Russianstock market has collapsed. So there is a widecommonality of interests between Business andInternational Institutions in trying to prevent ormitigate the effects of Conflict.

Documents

Conflict Resolution in International Companies (1)