Unlike what many people tend to believe, managing conflicts is a very important part of business management skills. Given the close interactions among commercial parties, as well as their interactions will workers, regulators and other stakeholders, conflicts with any of them pose significant risk and a potential to cause significant harm. Dealing with this risk requires appreciation of what can work and a skill to convert objectives into action.
Conflicts are part and parcel of all social activities and organizations. Often, the ability to manage conflict can be the difference between a functional and a dysfunctional unit. There are different approaches that may suit different situations. It is equally important to understand and appreciate the origins of conflict, and attempt to take care of them even before they arise.
Conflicts can exist at different levels and in different forms. We not only need to resolve them, we also need to prevent the damage arising from them, and lastly, we need to learn to live with them. This is why we need Conflict Management skills.
In our own sphere of work, each one of us has to find ways and means for managing conflict.
Especially, when the stakes are high, as in case of a business organization, while dealing with important stakeholders or at the international level, those responsible for managing these conflicts need to know the pros and cons of adopting different strategies for conflict management.
Conflicts arise because of differences in interests of two or more agents, irrespective of whether these agents are individuals, organizations, groups of people or nations. As interests of one party can never be absolutely same as that of another, conflicts are inevitable. The same is also true of an organization, where differences will always be there between the managers and the workers, the directors and the shareholders and the organization and its business partners and agents. Differences can also be there between different sections of the same organization, as can be present among managers or even workers. Each of these differences leads to a 'conflict' which needs to be managed, with the aim of preventing it from becoming an obstacle in the functioning of the organization.
It is important to remember that conflict management does not necessarily mean resolution of conflict. In fact, while at some times it is not possible to resolve a conflict, at other times, it is not desirable to resolve the conflict because of the cost involved in terms of time, effort and attention. Thus, the first basic principle of conflict management is that there are many alternative ways for managing a conflict, and selecting the appropriate alternative is perhaps one of the most important steps in conflict management.
Different approaches to managing a conflict include:
1. FORCING: using an authority or power available for forcing a solution that satisfies your concerns without regard to the concern of the other party. This approach may be appropriate when it is impossible to satisfy the concerns of the other party, e.g.. in case of a legal dispute with a party threatening illegal use of force.
2. ACCOMMODATING: satisfying the concerns of other party while neglecting your own concerns. This may be the best approach when the cost of satisfying other's concerns is far smaller than the loss that may result from the continuation of the conflict. e.g.. minor modification of services on the request of a very important client.
3. AVOIDING: not giving any attention to the conflict and continuing the normal functioning as if the conflict does not exist. This is a common approach, which is frequently adopted by organizations as well as managers, but is appropriate only for minor and inconsequential conflicts which pose little threat of escalation.
4. COMPROMISING: it is an approach that aims to partly satisfy the concerns of both parties, but does not fully satisfy any of the parties. It is the preferable approach for resolving conflicts between two equal partners, or two parties of equivalent strength where persistence of conflict can lead to recurrent losses for both parties.
5. COLLABORATING: it is an approach which consists of expressing a clear intention of resolving the conflict, keeping the channels of communication open and working together to find a mutually acceptable solution, while continuing to work with that party. 'Listening with an understanding' is a form of this very approach, applicable in case of managing conflicts with individuals when frustration and emotions of the other person need to be calmed down first before finding the actual solution.
It is important to remember that the solution for each conflict needs to be selected on the basis of several factors. These include the power equation between the two parties, comparative importance of each party for the other, their respective dependence on each other, as well as the importance of issues and values involved. The cost of satisfying the concerns of the other party needs to be balanced against the costs that may be saved by resolving the conflict. While taking a decision for approaching the conflict, one also needs to take into account the message that it will send to other parties and how it may impact their approach towards managing conflict with you.
Negotiation is a very important tool in conflict management, and it is one art that needs to be mastered to keep the cost of conflict management down, especially while adopting the 'compromise' approach, which is one of the most common approaches adopted among equal partners. It is an art that keeps the expectations down while keeping the various options open, thereby leading to the best possible compromise deal for the party.
Conflicts can be minor or major. They can be legal or violent. Irrespective of the form in which one faces them, the basic principle of managing them remains the same. However, knowing the principles is the easiest part. Applying them effectively in a given situation is the real art!
One of the most important challenges in all human institutions is to ensure that the individuals, teams and institutions put in place are optimizing their effort to produce desired output. In commercial concerns, the tool used for this end is Corporate Performance Management, which not just reflects the outputs and outcomes, but also the overall level of corporate efficiency..
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Commission or brokerage is percentage or an allowance that a person gets for doing his business. It may be related to selling or buying of goods etc.