Stress and conflict are two major issues any organisation faces. They are inevitable in all facets of life, be individual or organisational. If not handled well they can be a hindrance for the company performance. Conflict and stress both varies according to the organisation and its culture. But both need to be managed well to avoid unnecessary problems.
Conflict is a perception. Surveys show that employees spend as much as 42% of their time engaging in or attempting to resolve conflicts and 20% of managers’ time is taken up by conflict related issues (Gupta, Boyd, Kuzmits, 2011). This valuable time can be utilised in making the organisation a more efficient and an effective one. Organisations which fail to address conflict have the risk of losing their competitive advantage. Conflict can be viewed in many ways and there are different management styles which can deal with conflict. The leadership of the organisation must be involved in dealing with conflict as they would have to negotiate and bargain in order to overcome conflict.
Stress is a major concern with today’s working people. This is because the world is developing in a faster pace which requires constant adaptation. Stress not only affects ones work-life balance, but also their personal life which creates chaos for individuals. According to some estimation, humankind losses 100 million workdays every year due to the aftermath of stress (Treven & Potocan, 2005). Work stress needs to be managed well so it can actually improve the well being of the individuals as well as the organisation.
Both of these factors will be viewed in the context of Nippon Lanka and will be analysed thoroughly on how they overcome these issues to maintain a healthy relationship with employees. Improvements and recommendations for the current methods will also be discussed.
Nippon Lanka Pvt Ltd (NPLK) is a joint venture (JV) between the Nippon PLC Japan (NPJ) and Silicone Coatings Pvt Ltd (SC) Sri Lanka where the NPJ brought over 60% of Silicone’s shares. This joint venture is advantageous to both parties where NPJ is able to use this as an entry method and SC as an opportunity to be a part of a global industry.
Formation of this JV took almost a year where Nippon Lanka studied SC and the relevant industry as whole to get an idea of the present market conditions. It was found that there was no better time to enter the Sri Lankan market due to the post war era development. Therefore SC was considered due to their strong presence in the market.
Today after about three months from successfully forming the JV the company is going through a transition period. There aren’t any major changes to positions in the hierarchy but there are role changes and employees are finding it difficult to adapt to their new roles. Example: – The Managing Director (MD) of the company who was the owner of the company still is the MD how ever to day the person is a salaried employee. – The General Manager who was reporting directly to MD today has to report to the Board of directors where MD is just one out of the five directors.
When examining the company culture towards conflict, the company culture and the value system which has been there for 35 years from the date of the establishment is now being changed. SC was established in 1979, as a small scale manufacture and a distributer of paint related ancillaries. By the time Nippon approached SC it had grown into the largest local player in the market where it was second only to the global giant Akzonobal by a 3% margin.
It is evident that SC has been a one man show up to the time of the JV, the full value system and the operational procedures were laid down by the founder himself and not most of the managers found it enticing to be part of. Therefore the HR turnover was such that on average about six key resources left the company. In this back ground let’s see how the conflict and stress management function takes place within the organization.
3.0 CONFLICT AND CONFLICT MANAGEMENT
3.1 Conflict Management Styles
Conflict can be defined as the 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 (Robbins S., Judge T. & Vohra N., 2011:441). It is that point in an ongoing activity when an interaction crosses over to become an interparty conflict. Conflict can be seen as good and bad with corresponding positive and negative outcomes where this would all depend on how one views conflict.
There are three basics views of conflict. These are the Traditional view, the Interactionist view and Managed conflict view. The traditional view sees conflict as bad and something that must be eliminated through the use of authority. Poor communication, lack of openness and failure to respond to employee needs could be seen as few of the causes. The interactionist view is that conflict is desirable, necessary for high performance teams and should be encouraged. The contemporary view is that conflict is inevitable and it may be positive or negative but it must be managed to be beneficial.
Nippon Lanka follows a more interactionist view where conflict is encouraged and the company is of the view that a perfectly cooperative, harmonious group would hinder dynamism, creativity and innovation where a minimal level of conflict is needed to prevent a lacklustre, uninterested attitude among the group.
As mentioned earlier, not all conflicts are good, and this view only supports functional conflict. Functional conflict is a constructive form of conflict that supports the goals of the group and improves performance. The type of conflict at hand would distinguish a functional conflict from a dysfunctional conflict. Although these are distinct types of conflict, the occurrence of one type of conflict can lead to a conflict of another type taking place. For example, the process of costing has been kept confidential, and this has led to the tension between the sales team and the costing team.
3.2TYPES OF CONFLICT PRESENT IN NIPPON LANKA
Conflicts between two people are known as relationship conflicts. These conflicts arise as a result of miscommunication, disagreements or misunderstandings between people.
One such situation at Nippon Lanka arose between the Brand Manager and the Marketing Manager. The Brand manager has been with the company for 5 years and has previously worked with two Heads of marketing. Once the new marketing manager was appointed, it was found that the latter was less experienced and was not willing to corporate with the Marketing Head. This triggered huge problems for the new comer. The management was aware of this, but wasn’t able to remove him from the position due to the valuable connections the customers. However, the Marketing Manager understood this inferiority complex of the Brand Manager. Having gone through the initial hardships the new marketing manager somehow managed to win the trust of the Brand manager. Now they are working harmoniously, directing all their efforts towards the benefit of the company.
This occurs when decisions are made without adequate information. At Nippon Lanka, the costing department works in isolation. They do not consult the sales and marketing team when arriving at the costs, so more often than not, the cost of the product is either too high, depriving them of valuable orders and potential growth, or at times its too low depriving the opportunity for the company to charge a premium price on an innovative product or to achieve efficiency through specialisation.
Conflicts of interest mainly deal with psychological issues, where an individual or organisation behaves in a certain manner, with the aim of meeting a particular interest which is not shared by everyone else. The JV with the Japanese company was not disclosed or made public, even though doing so would have been acting in the best interests of the company. The MD did not like the idea of publicising the 60:40 JV that was taking place, as it would be viewed as a takeover. However, the rest of the company felt that some amount of public awareness would have positively impacted the company’s future performance.
Another example would be when the HR department wanted to minimise the over time cost they imposed a rule where all sales vehicle needs to be back at the HO by 5 pm. As an example what the Sales representatives would do is when they need to deliver goods up to Negombo, covering Wattala, Ja-ela, Seeduwa and Negombo. They would turn back from Seeduwa at 3.30 pm in order to make it back to office by 5 pm, without covering their full distance to Negombo. What followed was a delay in the delivery and travelling additional mileage, having to revisit incomplete routes taking the same path.
3.2.4 Structural Conflict
Structural conflict arises from unclear and undefined roles and reporting lines. The R&D and the production manger are directly reporting to the MD. The other managers report to the GM, where the GM reports to the MD. Currently when a sales representative needs to develop a sample for a particular customer, the sales representative will not have the adequate support since the request from the sales rep will not be taken seriously from the R&D manager and the GM cannot question them for not doing it right. Only 10 out of 1 samples are successful and yet the R&D manager has managed to survive, distracting the control and supervisory system of the top management since there is no clear reporting structure.
3.2.5 Value Conflict
A value conflict comes about when two people or groups have dissenting views on morality–that basic understanding of what is naturally right or wrong. As mentioned earlier, the cost manager considered himself and his department superior than the other departments, with the notion that the information handled need not be disclosed to anyone else. At present, the cost manager is in prison, facing charges of fraud. Although the environment helped the person to carry out fraud, this is a clear example of conflicting values.
3.3 THE CONFLICT PROCESS
Figure 1: The Conflict Process
(Source: Robbins S., Judge T. & Vohra N., 2005:444)
3.3.1Stage I: Potential opposition or incompatibility
The first stage talks about the conditions that are needed for conflict to arise. They may not directly lead to conflict, but they need to be present for conflict to surface. They can be referred to as the causes of conflict and can be condensed into three general categories, namely communications, structure and personal variables. Communication, either too much or too little information passed between members can result in potential opportunities for conflict to arise. At Nippon Lanka, the manner in which the costing of the products is carried out is not communicated to the members in the other dept and this has been the initiating factor for conflict to set in. Structure includes several variables such as size, degree of specialization in the tasks assigned to the group members, role clarity, member-goal compatibility, leadership styles, reward systems, and the degree of dependence among groups.
The sales and promotions manager at Nippon Paints follow an aggressive, predator style of leadership where excuses were not tolerated and was only interested in the achievement of results and targets. An example would be, the samples taken from the production team that is used for sales and promotion does not meet the required standards of quality where 9 out of 10 samples would fail. Same time, the Sales and promotions manager would also be very demanding of the sales representatives in terms of getting the desired targets. In some cases, employees have resigned due this demanding nature. Personal variables are mainly due to differences in personal traits of individuals.
Diverse issues such as prejudice and disagreements over one’s contribution to the group, as well as the rewards one deserves. For example, at Nippon Paints, the General Manager is prepared to hire new trainees at Rs. 15,000/=, whereas the Sales and Promotions Manager feels that the market rate of Rs. 30,000/= should be paid to them. The low salaries have deterred attracting the talented individuals and therefore not achieving the fullest potential.
3.3.2Stage II: Cognition and Personalization
If the conditions mentioned in stage I negatively affect something one party cares about, then the potential for opposition or incompatibility surfaces in the second stage. One or both parties must be aware and perceive that these conditions exist. However, just because it is perceived does not make the conflict personalized. It may not have an effect on either or both parties. The conflict has to be felt, for individuals become emotionally involved, leading to anxiety, tension, frustration or hostility.
3.3.3Stage III: Intentions
Intentions get in the way of people’s perceptions and emotions and act as decisions for them to react the way they do to the situation at hand. They are important, as one has to make inferences of the other party’s intentions to know and understand the reason behind that party’s behavior and to respond accordingly. Conflicts tend to escalate at this point merely because of the wrong inferences being made. Sometimes a behavior might erroneously reflect the person’s intentions. Two dimensions are used, namely cooperativeness (the degree to which one party attempts to satisfy the other party’s concerns) and assertiveness (the degree to which one party attempt to satisfy his or her own concerns) to identify five conflict handling intentions. This has been attached to Appendix 1 with the styles explained.
3.3.4Stage IV: Behavior
This stage includes actions, statements and reactions made by the conflicting parties. Intentions of each party are implemented through these behaviors and can be seen as a dynamic process of interaction. Conflicts usually start slow; characterized by indirect rather subtle forms of tension and escalate as the tension builds. At this latter stage things could become highly destructive where such conflicts are almost always dysfunctional.
3.3.5Stage V: Outcomes
Behavior would lead to outcomes, where some are functional in that the conflict results in an improvement in the group’s performance or it may also be dysfunctional in that it hinders group performance. Functional conflict can be beneficial for the company as it provides a medium through which problems can be aired and tensions released. This improves the quality of decisions, stimulates creativity and innovation, encourages interest and curiosity among group members and it forces and environment of self-evaluation and change.
Some companies discourage conflict as they prefer “yes-men”, loyal to the higher ups to the point of never questioning company actions. As for dysfunctional conflict it would reduce group effectiveness and group cohesiveness. At the extreme, conflict can bring group functioning to a halt and potentially threaten the group’s survival. Refer Appendix II for the example of a conflict Process at Nippon paints.
3.3 NEGOTIATING AND BARGAINING
Before the organisation starts negotiating they should be aware of the nature of the conflict. There is a certain process that needs to be followed in negotiation. Negotiation is by definition the management of crossed demands, where each one of us expresses requests hoping the other will try to fulfil them (Lempereur, A. 2012). As it is said “Everything is negotiation in life”, so every party involved in the process would like to take the best out of it.
3.3.1 Bargaining Strategies
There are two bargaining strategies that could be discussed. Distributive bargaining and integrative bargaining. In the current context what is more obvious is integrative bargaining which makes both the parties involved satisfied creating a win-win situation. An example for this was when a sales representative requests for a personal vehicle they need to achieve a certain level of sales targets. If they maintain the sales targets for a sustainable period they will be given a personal vehicle. But by any chance if they do not keep up to the said targets their salaries will be reduced in accordance with the cost of maintaining the vehicle by the company. Through a situation like this, what is created is a long term positive relationship for the company. As a company, they increase the sales levels and the employees will also be satisfied as their needs are also met.
3.3.2 Negotiation Process
Negotiation can happen in 5 steps; these are preparation and planning, definition and ground rules, clarification and justification, bargaining and problem solving and closure and implementation. Some do not have a positive ending or a closure. But negotiations that have an effect for the organisation will go through a process.
An example of this would be when the company needs to host certain function in hotels they would negotiate with them for the best bargain. As they have cost constraints, there are certain limitations and getting the best bargain with the best outcome would be the perfect scenario. Before the start of the negotiation with the relevant hoteliers the in-charge person will prepare the list of things that need to be discussed. These would be the pricing, menu items, additional services that are required and assess what the other party goals and prepare well for them.
In this instance a budget per person would be Rs. 3,000. But the relevant hotels cost was higher. Then the menus for these relevant amounts will be compared. In the Sri Lankan context rather than a 4 or 5 course meal, action stations with koththu and hoppers have a vibrant feeling and also cost less. So in the negotiation table the other alternatives will be put across. Since information is all gathered, the representative will develop a strategy. The person will also determine the Best Alternative to a Negotiated Agreement (BATNA). So here the BATNA will be to get cost per person at Rs. 3,000 having action stations with cocktail menu.
The person will determine when and where to have the appointment. The ideal place would be at hotel premises because then the ambiance where service capacity can also be viewed. The meeting would be planned in the best time where both parties are not strained with other commitments and can concentrate for a best outcome. Once the initial stance is made then there will be further clarifications and explanations. Then both parties will try to come up with concessions in order to make a decision. Once both parties are satisfied they will formalize the agreement. In this process Nippon Lanka representatives will stress on the fact that if one event is made a success; then the hotel is winning a long term corporate client. This enhances their business.
3.3.3 Third Party Negotiation
This is crucial for Nippon Lanka as they deal with lot of suppliers and customers. Advertising is a crucial part for this organisation and dealing with media is important to get a good advertising deal. Earlier they were dealing with the television and radio stations by themselves and it was quite strenuous. Getting a good deal that is worth their money was tough and time consuming, having deal with different organisations, so they decided to obtain third party involvement. The outcome was to get a consultant to act on media buying for the organisation. A consultant is a skilled and impartial third party who attempts to facilitate problem solving through communication and analysis (Robbins S., Judge T. & Vohra N., 2011:457). They are there to improve the current status and to get a win-win solution for both parties. When Nippon started using a third party advertising firm to do media buying, they were able to get good deals from media as they have a high bargaining power.
4.0 WORK STRESS & STRESS MANAGEMENT
Stress is a dynamic condition in which an individual is confronted with an opportunity, demand, or resource related to what the individual desires and for which the outcome is perceived to be both uncertain and important (Robbins, Judge & Vohrs, 554). Most of the time stress is discussed in the negative contest but this is not true at all times. Stress can be taken into the system as an advantage. In the current organisation stress factor is not talked openly even though people are put under stress levels it is not considered as value adding option for the organisation. In the organisation currently what is seen is the challenge stresses but sometimes these same factors do become hindrance stressors for the employees.
4.1 Sources of stress
The main sources of stress in the organisation comes from environmental and organisation factors. When it comes to environmental factors; the three types of uncertainties are economic, political and technological. These play a minimal role compared to organisational and personal factors.
In considering environment factors; the workers are stressed on the technological aspect. Research and development team is always under pressure in getting a new product development before their competitors. Organisation heads are concerned about the Political uncertainty. Whenever a new rule or regulation is passed by government with regard to the consumer protection or protecting environment this takes a toll in the organisation activities.
They must be aware of the new laws and how to tackle them, this adds a lot of strain in the management as they need to alter or change certain decisions according to political scenarios. Change in economic policies and recessions or booms in the economic cycle create stress on the organisation. Current economic down turn have made a toll in the sales teams as consumers are spending less and government projects have considerably reduced. At the same time government is not paying their debt and collections have become harder.
Organisational factors are the ones that are created by the organisation which creates stress on employees. Task demands such as collecting debts in 90 days have a strain on the employee. This increases the job pressure. Role demands relate to pressure that occurs due to the job role. Managers and above have high role related pressures compared to subordinates due to the heavy work load which needs to be performed in less time. Most employees complain that they are given more work than they can handle and it stresses them out a lot. At the same time many complain the targets given are not practical. There is a minimal level of interpersonal demands where other employees are not supportive.
Personal factors which increase stress are different to every individual. But this does create a hindrance in the organisation performance.
All or some of these factors create a high turnover or absenteeism, reduction in productivity and decrease in job satisfaction. Sadly Nippon Lanka has not recognised the importance of stress management in order to curb it or cure it.
The main organisational stress come comes from the current management change, this is because the task and role demands have changed and employees need to adjust to the new roles. Personal factors too trigger stress level of the employees.
4.2 Managing Stress at Nippon Lanka Pvt Ltd
Based on the study, it is visible that Nippon Lanka uses stress as a positive motivator, but at some points it goes out of hand where it depletes the collaboration and coordination amongst the teams and also inter department.
Based on the job roles, the department heads can think of the stress levels which can be imposed on the team members to get results and to meet targets. However the stress levels should be correctly managed so that it motivates results and not deplete and impede the team building and performance drive within the teams.
As it is observed, some amount of stress comes from the non-alignment of the reporting lines. Therefore the suggestion is to relook at the reporting lines so that stress does not occur due to incorrect alignment of the business structure which has a negative impact and which creates unnecessary types of stress within teams.
Together with the Job role enrichment, reporting lines should also be re-aligned so that the company will only be left with stress which causes the company to perform and not to impede.
In conclusion conflict, negotiation and stress are all visible in Nippon Paint. Conflict is unavoidable at the organisation due to the dealings they have among the departments and the third parties. To overcome conflict certain understanding among employees and stakeholders must be implemented. It can be seen that conflict, negotiation and stress are interlinked with each other on some level. Organisational conflict styles may shape an organisation’s social environment, affecting the level of ongoing conflict and thus the level of stress among employees. Nippon Lanka to a great extent follows an integrative style of conflict management which leads to lower task conflict, reducing relationship conflict, which reduces stress. However, there are many instances where the management has not come up with a solution to the conflict at hand, where they are not willing to step in and the employees are left to resolve the matter, which at most times remains unresolved.
The recommended improvements with regard to this has been discussed in Section 3.4. It is important that with the JV taking place, the new management plays an active role in resolving these long running issues so that the organisation and its performance does not get affected. The current JV could also trigger new conflicts and stress levels within the organisation where it is crucial that these issues are identified and resolved. The new management must take this opportunity to place greater prominence of recognizing the on-going stress levels within the organisation and deal with them appropriately. Improved management of conflict, negotiations and stress would benefit the individuals and the organisation in terms of high performing, content, dedicated employees who deliver results.