Tag: Advanced Accounting Notes

The process of negotiation starts the moment an employee gets a selection call from an organization. It is essential that the individual responsible for hiring employees negotiates well with the candidate and offers him the best salary. Every organization runs for earning profits and thus the HR Professional must try to make the person join at the lowest possible salary but make sure you do not offer him anything less than his previous salary. He will never be interested to join. Even if he joins, he will not take his work seriously and the results would be zero. Discussions are important. Make him realize that money is not the only criteria for selecting a job. Other things like one’s job responsibilities, job security as well as the brand name should also be considered.

The negotiation style plays an important role in corporate. Do not offer anything exceptionally high as it would again create a problem among the existing employees. Ensure that you are little tactful and do flash your trillion dollar smile. It helps. No way can you annoy the individual.

Negotiation is also important when you are dealing with vendors. An organization needs money to survive and take care of the employees as well. It can’t afford to spend money as it is. A single penny saved will help you and the organization later. The person dealing with the external parties must be a good negotiator else he will end up paying more amount than required. Always sit with the vendor and quote a price little lower than you intend to pay. He will definitely ask you to increase it and probably then you will reach to a figure well within your organization’s budget. Don’t be rude with your vendor but be very confident and convincing. Remember you are not dealing with him just once; you need to maintain a healthy relationship with him for future business as well. Try to convince the vendor at such a rate which would benefit your organization and save money. Quote realistic figures and do take care of the vendor’s profits as well. Try your level best to close the deal.

One should never accept terms and conditions verbally, it’s always better to have something in black and white probably a contract as it is more reliable. The terms and conditions must be discussed on an open forum and should be signed in presence of both the parties so that no body backs out later.

One should also learn to negotiate with one’s superiors. Remember negotiation does not mean you have to shout on others, you need to be polite. Don’t accept responsibilities just because your boss wants it. If you are not comfortable with any role, its better to decline it, rather than accepting something you are not familiar with and losing interest later. After all there are other employees as well, they can accept the same and you can do something else which suits your profile. If you know you will not be able to submit the project within the stipulated time frame, tell your boss. Never hide things from him. Be straightforward. If you want to go for a leave, try to negotiate with him that probably you will attend office the coming weekend or sit for some more time in the coming days to compensate for the loss. Be a little patient.

Conflict must be avoided at the work place as it only leads to negativity all around. Negotiations help to reduce conflicts at the work place. Conflicts arise when individuals are too rigid and are just not willing to compromise with each other. Negotiations help in finding an alternative which benefits all.

Let us understand the importance of negotiation in corporates with the help of a simple example:

Ted was working with a leading organization. He was a smart negotiator. He always negotiated well with his superiors as well as his fellow workers and thus a enjoyed his work. He only accepted those responsibilities he knew he was capable of doing. No doubts his work was error free, and he was his boss’s favourite. He was always well informed before going for any negotiation with vendors, never lost his temper and always closed the deal in favour of the organization. Good negotiation skills helped Ted be the most appreciated employee among all.

Elements affecting Negotiation

The actual negotiation process depends on the following factors:

(i) The goals and interests of the parties

(ii) The extent to which the negotiating parties are interdependent

(iii) The past relations which exist between the two negotiating parties

(iv) The nature, temperament, and personalities of the parties

(v) The persuasive ability of each party

Factors

Subjective Factors

Often the outcome of the discussion does not depend wholly on the objective factors of logic and the facts of matter under consideration. The final outcome of the negotiation is also determined by the subjective factors of influence and persuasion.

Mutual Obligation: The memories of well done in the past by the other party also act as an influence on us.

Personal relationship: The conduct of negotiation is influenced not only by the real situation of the matter but also by the relationship between the two persons or parties involved in the process of discussion.

Future Considerations: When personal relationships are at stake we may not wish to win the argument, especially when good relations between the two parties are likely to be affected.

Practical Wisdom: Fear of losing good opportunities in the future is a strong factor in our bargaining and negotiation positions and power.

Fear: Often our bargaining power is conditioned by our fear of the other party’s authority, power, higher connections and the capacity to harm.

Time

• The choice of time for holding discussions should be fixed according to mutual convenience.
• The time should be adequate for the smooth exchange of ideas through different stages of negotiation
• Exchanging initial views
• Exploring possible compromise
• Searching for common ground
• Securing agreement
• The time to prepare for negotiation and the time for implementing the agreement should also be carefully fixed for action before and after the meeting.
• To be effective, negotiations should be timely. This means that the negotiation should be done before it is too late so as to secure an agreement.

Place

The place of meeting for negotiation influences one’s level of confidence. Choosing a place like your own office has many advantages:

• You are in your area of strength.
• You can extend social courtesies as a token of goodwill; this would move the negotiation towards an agreement.
• You can get whatever information or material that is needed during the course of the discussion.

Labour courts

Labour is a subject in the Concurrent Listunder the Constitution of India where both the Central and State Governments are competent to enact legislation subject, however, to reservation of certain matters for the Central Government.

The Ministry of Labour and Employment seeks to protect and safeguard the interests of workers in general and those who constitute the poor, deprived and disadvantaged sections of the society, in particular, with due regard to creating a healthy work environment for higher production and productivity, and developing and coordinating vocational skill training and employment services.

Government’s attention is also focused on promotion of welfare activities and providing social security to the labour force both in the organised and unorganised sectors, in tandem with the process of liberalisation. These objectives are sought to be achieved through enactment and implementation of various labour laws, which regulate the terms and conditions of service and employment of workers.

Individual workmen raise Industrial dispute Under Section7 of Industria Dispute Act 1947. Which says:

The appropriate government is empowered to establish one or more Labor Courts. Its function is to settle industrial disputes concerning any matter specified in the second schedule.

Qualification for the appointment of a Presiding Officer of the Court

(i) He is or has been a judge of high court

(ii) He has for a period of not less than 3 years, been a district judge or an additional judge

(iii) He has held any judicial office in India for not less than 7 years

(iv) He has been the presiding officer of labor Court constituted under any Provision Act for not less than 5 years

Disqualifications:

Section 7-C of the Industrial Dispute Act,1947 prescribes Disqualifications for the presiding officer to be appointed to the Labor Court. It provides that no person shall be appointed to or continue in office if:

(a) He is not an independent person; or

(b) he has attained the age of 65 years

Matters within The Jurisdiction of Labour court

Second Schedule

1. The propriety or legality of an order passed by an employer under the standing orders;
2. The application and interpretation of standing orders;
3. Discharge or dismissal of workmen including reinstatement of, or grant of relief to, workmen wrongfully dismissed;
4. Withdrawal of any customary concession or privilege;
5. illegality or otherwise of a strike or lock-out; and

According to [Sec 10 (1) (c)] matters specified in THIRD SCHEDULE, dispute not effecting more than 100 workers can be referred to labour court.

According to [Sec 10 (2)] when parties in the industrial dispute apply to the government to refer dispute to the labour court and if government satisfies it shall make the reference to the labour courts.

According to [Sec 10 (6)] no Labour Court or Tribunal shall have jurisdiction to adjudicate upon any matter which is under adjudication before the National Tribunal.

Power and status of the labour court in trying offences:

Section 215 and 216 of the code provides the procedure and powers of labour court which is may be of two types;

(1) Power and status in trying offences

(2) Power and status in civil maters

(a) The labour court shall follow as nearly as possible summary procedure as prescribed under the code of criminal procedure 1898 (Act V of 1898)

(b) A labour court shall for the purpose of trying an offence under the code have the same powers as are vested in the court of a magistrate of the first class under the code of criminal procedure.

(c) The labour court shall for the purpose of inflicting punishment have the same powers as are vested in Court of Session under that code.

(d) A labour court shall while trying an offence hear the case without the members.

Industrial Tribunals

Industrial Tribunal [Sec. 7A]: The appropriate Government may, by notification in the Official Gazette, constitute one or more Industrial Tribunals for the adjudication of industrial disputes relating to any matter, whether specified in the Second Schedule or the Third Schedule and for performing such other functions as may be assigned to them under this Act.

Second Schedule

1. The propriety or legality of an order passed by an employer under the standing orders;
2. The application and interpretation of standing orders;
3. Discharge or dismissal of workmen including reinstatement of, or grant of relief to, workmen wrongfully dismissed;
4. Withdrawal of any customary concession or privilege;
5. Illegality or otherwise of a strike or lock-out; and

Third Schedule

1. Wages, including the period and mode of payment;
2. Compensatory and other allowances;
3. Hours of work and rest intervals;
4. Leave with wages and holidays;
5. Bonus, profit sharing, provident fund and gratuity;
6. Shift working otherwise than in accordance with standing orders;
7. Classification by grades;
8. Rules of discipline;
9. Rationalisation;
10. Retrenchment of workmen and closure of establishment; and
11. Any other matter that may be prescribed.

According to [Sec 10 (2)] when parties in the industrial dispute apply to the government to refer dispute to the industrial tribunal and if government satisfies it shall make the reference to the industrial tribunal.

According to [Sec 10 (6)] no Labour Court or Tribunal shall have jurisdiction to adjudicate upon any matter which is under adjudication before the National Tribunal.

A Tribunal consists of one person only.

For appointment as the presiding officer of a Tribunal

• He is, or has been, a Judge of a High Court; or
• He has, for a period of not less than 3 years, been a District Judge or an Additional District Judge;
• He is or has been a Deputy Chief Labour Commissioner (Central) or Joint Commissioner of the State Labour Department, having a degree in law and at 7 seven years’ experience in the labour department after having acquired degree in law including three years of experience as Conciliation Officer:

Provided that no such Deputy Chief Labour Commissioner or Joint Labour Commissioner shall be appointed unless he resigns from the service of the Central Government or State Government, as the case may he, before being appointed as the presiding officer; or he is an officer of Indian Legal Service in Grade III with three years’ experience in the grade.

Role of Industrial Tribunal

The Industrial Tribunal is a juridical Tribunal made up of a Chairman and two members (one representing Workers interests and the other Employers interests) drawn up from separate panels in the case of an Industrial Dispute whilst of a chairman alone in the case of alleged unfair dismissal. It is regulated by the Employment and Industrial Relations Act 2002.

The tribunal hears disputes in the public but it may hold private sittings. Statements of Cases are asked of the parties who are then given an opportunity to support their cases by oral pleading.

Subject to the rules laid down under the Act, the Tribunal is free to regulate its own procedures but it is expected to observe the rules of natural justice and to decide on the substantive merits of the case in front of it.

Awards or decisions are binding on both parties. The parties are not free unilaterally to seek a revision within a year. They may however ask for an interpretation if the need arises.

Enforcement of the Tribunalas decisions vests in the Tribunal itself. The minister is empowered to ask the tribunal for advice in regard to matters relating to Trade Disputes.

In cases of unfair dismissal, the Tribunal may order re-instatement of the employee or award compensation.

In its awards the Tribunal is expected to refrain from any decision or consistent with any law or regulation regarding Conditions of Employment. The Tribunal is forbidden from encroaching upon the Public Service Commission.

No application fee or court fees are payable. The only real expenses are the transcripts which are obtained at a reasonable fee from the Law Courts transcribes, and the fee due to the person assisting the applicant. These fees are stipulated by L.N. 48 of 1986 – Representation Fees Regulations.

The Tribunal Office is housed at the Department of Industrial and Employment Relations and sittings are held at the Superior Courts.

Presenting a case to the Industrial Tribunal

A case before the Tribunal must be presented by means of a referral in writing consisting of a declaration stating the facts of the case. The referral must be presented in the Registry of the Tribunal at the Maltese Law Courts within four months from the effective date of the alleged breach.

National Tribunals

National Tribunal [Sec. 7 (B)]: The Central Government may, by notification in the Official Gazette, constitute one or more National Industrial Tribunals. Its main function is the adjudication of industrial disputes which involve questions of national importance or affecting the interest of two or more States.

According to [Sec 10 (1-A)] dispute involves any question of national importance or is of such a nature that industrial establishments situated in more than one State, whether it relates to any matter specified in the Second Schedule or the Third Schedule, the government will order in writing refer to National Tribunal for adjudication.

According to [Sec 10 (2)] when parties in the industrial dispute apply to the government to refer dispute to the National Tribunal and if government satisfies it shall make the reference to the National Tribunal.

The Central Government shall appoint a National Tribunal consisting of one person only.

• A person to be appointed a presiding officer of a National Tribunal must be, or
• Must have been, a judge of a High Court or
• Must have held the office of the chairman or
• Any other member of the Labour Appellate Tribunal for a period of not less than two years.

The Central Government may appoint two persons as assessors to advise the National Tribunal.

Role of National Tribunal

Central government may, by notification in the official Gazette, constitute one or more National Tribunals for the adjudication of Industrial Disputes in:

• National matters.
• Matters in which industries are more than one state, or are affected by the outcome of the dispute.
• The duty of the National Tribunal to hold its proceedings fast and submit its report to the central government within the specified time given

Tripartite bodies involve employee, employer and Government. Bipartite committee comprises of employer and employee. Tripartite committee includes committees on Conventions, steering committee on wages, central implementation and evaluation machinery, Central Board of Worker’s Education and National Productivity Council.

Workers committee is an example for Bipartite committee. This committee is represented by employer and employees. It is established through legislation. Method of constitution of this committee is specified in the enactment.

Functions of Workers Committee:

1. Promoting industrial goodwill.
2. Securing cooperation from the employer and the employees.
3. Removing causes of friction between parties to dispute.
4. Creating an atmosphere for voluntary settlement of issues like wage benefits, bonus, terms of employment, workload, welfare, training, promotion, transfer, etc. Inter-union-rivalry, union’s opposition, employee’s reluctance to use workers committee for setting dispute hinder its effective functioning.

Standing Orders

The concept of ‘Standing Orders’ is one of the recent growths in relation to Indian labour- management. Prior to 1946, there existed chaotic conditions of employment, wherein the workmen were engaged on an individual basis with uncertain and vague terms of employment. The Act was enacted as a simple measure to remedy this situation by bringing about uniformity in the terms of employment in industrial establishments so as to minimize industrial conflicts.

1. Establishment employing 20 or more should put in place standing orders or regulations.
2. Standing orders can be prepared by employer and employees/ recognized unions/federations.
3. In case of disagreement between the employer and the employee, matter would be determined by the certifying authority i.e., Labour Commissioner having jurisdiction. Once the standing order is passed, it is binding on the parties to dispute.

Section 2(g) of the Act states that “standing orders” are the rules relating to matters set out in the Schedule, i.e. with reference to:

• The classification of workmen;
• Manner of intimation to workers about work and wage-related details;
• Attendance, and conditions of granting leaves, etc.;
• Rights & liabilities of the employer/ workmen in certain circumstances;
• Conditions of ‘termination of’/‘suspension from’ employment; and
• Means of redressal for workmen, or any other matter.

Reasonableness of Standing Order

The proviso to Section 4 of the Act, as amended by Act 56 of 1956, necessitates the Certifying Officer or appellate authority to adjudicate upon the fairness or reasonableness of the contents of such Draft Standing Order in order to proceed with its certification.

Certification Process: Section 5

The procedure for certification of Standing Order, as prescribed under Section 5 of the Act, is threefold:

• The Certifying Officer to send a copy of the Draft Standing Order to the workmen or trade union, along with a notice calling for objections, that shall be submitted to him within 15 days of receiving such notice.
• Upon receipt of such objections, the employer and workmen to be given an opportunity of being heard, after which the Certifying Officer shall decide and pass an order for modification of the Standing Order.
• Finally, the Certifying Officer shall certify such Standing Order, and thereby, within seven days, send a copy of it annexed with his order for modification passed under Section 5(2).

Appeals: Section 6

Any related party aggrieved by the order of the Certifying Officer may appeal to the ‘appellate authority’ within 30 days, provided that its decision, of confirming such Standing Order or amending it, shall be final. The appellate authority shall thereafter send copies of the Standing Order, if amended, to the related parties within seven days.

Organizational conflict, or workplace conflict, is a state of discord caused by the actual or perceived opposition of needs, values and interests between people working together. Conflict takes many forms in organizations. There is the inevitable clash between formal authority and power and those individuals and groups affected. There are disputes over how revenues should be divided, how the work should be done, and how long and hard people should work. There are jurisdictional disagreements among individuals, departments, and between unions and management. There are subtler forms of conflict involving rivalries, jealousies, personality clashes, role definitions, and struggles for power and favor. There is also conflict within individuals between competing needs and demands to which individuals respond in different ways.

Roy and Judy Eidelson (2003) investigated some of the important roles that beliefs may play in triggering or constraining conflict between groups. On the basis of a review of relevant literature, five belief domains stand out as especially noteworthy: Superiority, injustice, vulnerability, distrust and helplessness.

Superiority

Individual-level core belief: This is a belief that an individual is better than anyone else and therefore many of the social constructs because the individual sees their own thoughts as “privileged” and therefore do not get along well with others. People with this belief often have attitudes of “specialness, deservingness, and entitlement.”

Group-level worldview: When moving from the individual-level core belief to the Group-level worldview most of the concepts stay the same. The major difference is that these attitudes apply to large groups instead of individuals. One example of this is “ethnocentric monoculturalism,” a term meaning that one sees their own cultural heritage as better than another’s.

Injustice

Individual-level core belief: This belief is that an individual has been mistreated in a way that affects them in a major way. This mistreatment is most often an interpretation of “disappointment and betrayal”.

Group-level worldview: This is the receiving end of the superiority group-level. This group takes grievance at another group for the same reasons an individual takes grievance at another. For perceived injustices from disappointment, betrayal, and mistreatment.

Vulnerability

Individual-level core belief: This is a constant anxiety. It is when a person feels that he/she is not in control and feel as though they are living “perpetually in harm’s way”.

Group-level worldview: A group that feels vulnerability due to an imagined threat in the future. This strengthens the group’s ties and allows them to “focus group behavior in specific directions that include hostility.”

Distrust

Individual-level core belief: This is based on a “presumed hostility and malignant intent seen in others”. It drives one to act in hostile ways and prevents the creation of healthy relationships.

Group-level worldview: This separates the in-group from the out-group in a way that is not easily rectified, as the in-group forms a lasting stereotype that is applied to the out-group and must be disproven by the out-group.

Helplessness

Individual-level core belief: A deep set belief that no matter what an individual does the outcome will be unfavourable. As though the individual is “lacking the necessary ability” or a belief the individual did not have sufficient help or the environment is against them.

Group-level worldview: When a group has those same beliefs of dependency and powerlessness. This also reflects how much growth the environment has to offer.

Functional Conflicts:

Positive Effects

Functional conflict is also known as constructive conflict. Such conflict will have positive effects on individuals, groups and organizations. Such conflict is useful in order to solve problems related to individuals and groups. Functional conflict is important for effective performance due to the following reasons:

• It ventilates tension from the organization.
• It increases individual’s efforts at work.
• It helps thinking analytically.
• It provides foundation for organizational change and development.
• It provides an individual a chance to think again, undertake self introspection and have a second look at the existing things, like procedures, policies, equipment, behaviors etc.
• It leads to innovation and at times to new direction. It is, therefore, even necessary for the survival and growth organizations.
• It helps to seek classification and generate search behavior.
• When conflict is developed, attention is immediately drawn to the malfunctioning parts of a system. It is an indication that the situation calls for improvement. Conflict is, therefore, an essential portion of a cybernetic system.
• At times, it is also used as a means to certain ends and to create confusion or set subordinates against each other in order to maintain the interested parties own position. It may not be a positive outcome in the strict sense of the term from the organizational point of view, but it is certainly a management strategy toward of problems temporarily. It may be viewed as an unavoidable cost of the pursuit of one’s aspirations.
• Long standing problems, which continue to agitate people’s mind in surface, they are able to release their tensions and unburden themselves. They display creativity in identifying solutions and dealing with problems.
• It serves as a cementing force in a group and incredible unity is witnessed even in a heterogeneous group at times of tension.
• It energizes people, leads to mild stimulation and one is at one’s best in times of crisis. It helps them test their capacities.

1. Release of Tension:

Conflict when expressed can clear the air and reduce the tension which might otherwise remain suppressed. Suppression of tension can lead to imaginative distortion of truth, sense of frustration and tension, high mental exaggerations and biased opinions resulting in fear and distrust. When members express themselves, they get some psychological satisfaction. This also leads to reduction of stress among the involved members.

2. Analytical Thinking:

When a group is faced with a conflict, the members display analytical thinking in identifying various alternatives. In absence of conflict, they might not have been creative or even might have been lethargic. The conflicts may induce challenge to such views, opinions, rules, policies, goals and plans which would require a critical analysis in order to justify these as they are or make such changes that may be required.

3. Group Cohesiveness:

Inter group conflict brings about closeness and solidarity among the group members. It develops group loyalty and greater sense of group identity in order to compete with the outsiders. This increases the degree of group cohesiveness which can be utilized by the management for the attainment of organisational goals in an effective manner. As cohesiveness increases, differences are forgotten.

4. Competition:

Conflicts promote competition and hence it results in increased efforts. Some persons are highly motivated by conflict and severe competition. Such conflict and competition, thus, lead to high level of effort and output.

5. Challenge:

Conflicts test the abilities and capacities of the individuals and groups. It creates challenges for them for which they have to be dynamic and creative. If they are able to overcome the challenge, it will lead to search for alternatives to existing patterns which leads to organisational change and development.

6. Stimulation for Change:

Sometimes, conflict stimulates change among the people. When they are faced with a conflict, they might change their attitudes and be ready to change themselves to meet the requirements of the situation.

7. Identification of Weaknesses:

When a conflict arises, it may help in identifying the weaknesses in the system. Once the management comes to know about the weaknesses, if can always take the steps to remove them.

8. Awareness:

Conflict creates awareness of what problems exist, who is involved and how to solve the problem. Taking cue from this, management can take the necessary action.

9. High Quality Decisions:

When conflicting, persons express their opposing views and perspectives, high quality decisions result. The people share their information and check each other reasoning to develop new decisions.

10. Enjoyment:

Conflict adds to the fun of working with others when not taken seriously. Many people find conflict enjoyable to competitive sports, games, movies, plays and books.

Dysfunctional Conflicts:

Negative Effects

Dysfunctional conflict is also known as destructive conflict. Many times conflict may be detrimental and disastrous. Such conflict has negative effect on individuals, groups and the organizational levels. The effects might be diverting energies, hurting group cohesion, promoting interpersonal hostilities and creating negative working environment. Due to the dysfunctional conflict and its negative effects, employees become dissatisfied with the working environment and as a result, absenteeism will increase and productivity will decline. A few dysfunctional effects of rising conflict include:

• Increasing conflict will result in delays in meeting schedules, decrease in the quality of goods and services and finally will increase customer complaints.
• It is undesirable if it creates a climate of distrust and suspicion among people, if some people feel are defeated and demanded and it develops antagonism instead of spirit of cooperation.
• In the absence of smooth communication at the workplace, there will be problems in coordinating activities.
• With the increasing conflict in the organization, people start to divert themselves from the real work schedule and keep less interest and show less energy, and this will ultimately affect the achievement of organizational goals.
• The increasing negative emotions at the workplace can be quite stressful.
• When conflict does not lead to solution of a problem, it is unproductive and investment of time and effort goes waste.
• As a consequence of conflict, there may be intensification of internalization of sub-unit goals which may result in the neglect of overall organizational goals.
• It is seriously harmful if it distracts attention from basic organizational objectives and makes people work for their defeat.
• When management loses objectivity and treats disagreement as equivalent to disloyalty and rebellion, an opportunity for creativity should be deemed to have been lost. It may even pour oil over troubled waters, exploit differences to strengthen itself and weakens others, and accept resolutions capable of different interpretation.

1. High Employee Turnover:

In case of intra-individual and inter-individual conflicts particularly, some dynamic personnel may leave the organisation, if they fail to resolve the conflict in their favour. In this case, organisation will be the sufferer in the long run due to the loss of key people.

2. Tensions:

Sometimes, conflict can cause high level of tensions among the individuals and groups and a stage may come when it becomes difficult for the management to resolve the conflicts. This will result in anxiety, frustration, uncertainty and hostility among the members.

3. Dissatisfaction:

Conflict will result in discontentment to the losing party, who will wait for an opportunity to settle the score with the winning party. All this tussle will result in less concentration on the job and as a result, the productivity will suffer.

4. Climate of Distrust:

Conflict often creates a climate of distrust and suspicion among the members of the group as well the organisation. The degree of cohesiveness will be less as the discords will be more. The concerned people will have negative feelings towards each other and try to avoid interaction with each other.

5. Personal Vs. Organisational Goals:

Conflicts may distract the attention of the members of the organisation from organisational goals. They may waste their time and energy in finding ways and tactics to come out as winners in the conflict. Personal victory becomes more important than the organisational goals.

6. Conflict as a Cost:

Conflict is not necessarily a cost for the individuals. But the conflicts may weaken the organisation as a whole, if the management is not able to handle them properly. If the management tries to suppress conflicts, they may acquire gigantic proportions in the later stages. And if the management does not interfere in the earlier stages, unnecessary troubles may be invited at the later stages. It is a cost to the organisation, because resignations of personnel weaken the organisation, feeling of distrust among members have negative impact on productivity and so on.

1. Intrapersonal

This level refers to an internal dispute and involves only one individual. This conflict arises out of your own thoughts, emotions, ideas, values and predispositions. It can occur when you are struggling between what you “want to do” and what you “should do.”

Factors of Conflict in Individuals:

• Unacceptability:

Every individual has a known acceptable alternative in terms of his own goals and perceptions. Since the alternative preferred by the organisation is not satisfactory to him, he is unable to accept it. Unacceptability is subjective because the alternative unacceptable to one may be acceptable to another individual. When the alternative is unacceptable to an individual, he will search for new alternatives. His search for acceptable alternative continues. But sometimes, repeated failure to discover acceptable alternatives leads to a redefinition of acceptable.

• Incomparability:

The individual knows the probability distribution of the alternatives but he is not able to take decision because the outcomes are incomparable. When the results are not comparable, no decision could be taken. Similarly, an individual is also unable to make proper comparison of alternatives. Comparison requires clarity, technique of comparison including assigning weights to different components, rationality in attitude and behaviour and the competence to perform the task.

The procedure of comparison depends also on the clarity and decisiveness of the individual regarding the minimum standard of achievement. If the individual does not have much clarity as to the expectancy, he will not be able to make comparison. The state of incomparability causes lot of tension and conflict to the individual.

• Uncertainty:

Individuals are uncertain about the environments within and outside the organisations. If the environment could be properly depicted, the behaviour of the people regarding acceptability of the alternative and efficacy of the alternative could be ascertained with certainty. In a state of uncertainty, the individual feels frustrated which is ultimately reflected in conflict. Within an individual there are usually a number of competing goals and roles.

2. Interpersonal

This conflict occurs between two or more people in a larger organization. It can result from different personalities or differing perspectives on how to accomplish goals. Interpersonal conflict may even occur without one party realizing there was ever conflict.

Interpersonal conflict involves conflict between two or more individuals I and is probably the most common and most recognized conflict. All conflicts are basically interpersonal conflicts because most of the conflicts involve conflict between a person in one organisation or a group and another person in other organisation or a group.

Every individual has a separate acceptable alternative course of action and different individuals prefer different alternatives. The organisation itself creates situations in which two individuals are placed in conflict situations. This may involve conflict, for example, between two managers who are competing for limited capital and manpower resources.

Another type of interpersonal conflict can relate to disagreement over goals and objectives of the organisation. These conflicts are highlighted when they are based upon opinions rather than facts. Opinions are highly personal and subjective and may lead to criticism and disagreements. These conflicts are often the result of personality clashes.

According to Whetten and Cameron there are four sources of interpersonal conflict.

(1) Personal Differences:

Personal differences can be a major source of conflict between individuals. Individual differ because of one’s upbringing, cultural and family traditions, family background, education experience and values.

(2) Information Deficiency:

Lack of information can be another source of interpersonal conflict. This type of conflict often results from communication breakdown in the organisation.

(3) Role Incompatibility:

Another source of interpersonal conflict can be role in compatibility. In today’s inter functional organisations, many managers have functions and tasks that are interdependent and the individual roles of these managers may be incompatible.

(4) Environment Stress:

The interpersonal conflict can also be due to environmental stress. Stress from environment arises because of scarce or shrinking resources, downsizing, competitive pressures and high degree of uncertainty. Interpersonal conflicts have a tendency to resolve themselves because the conflicting parties are not in a position to remain tense for a very long time. Time is the healing factor for these conflicts. In case the inter-personal conflicts are of persisting nature it can be resolved through counselling, effective communication, win negotiation and transactional analysis. Management must analyze the reasons for conflict and resolve to create an atmosphere of openness and mutual trust in the organisation.

3. Intragroup

This level of conflict occurs between members of a single group when there are multiple people with varying opinions, backgrounds and experiences working toward a common goal. Even though they may all want to achieve the same goal, they may disagree about how to reach it. Intragroup conflict can also occur when team members have differences in communication styles and personalities.

Intra group conflict arises when differences crop up between the members of the group. The individual may want to remain in the group for social needs but may disagree with the group methods. Intra-group conflict may arise in three ways.

(i) When the group faces a new problem

(ii) When new values are imported from the social environment into the group and

(iii) When a person’s extra group role comes into conflict with his intra group role.

Intra group conflict is like the interpersonal conflict with the difference that the persons involved in the conflict episode belong to a common group. The causes are similar to those of interpersonal conflicts.

4. Intergroup

This level of conflict occurs between different groups within a larger organization or those who do not have the same overarching goals.

Conflicts between different groups in the organisation are known as intergroup conflicts. Inter-group conflict may also be stated in terms of organisational conflict.

Causes of intergroup conflict may be summarized under four heads:

(i) Absence of joint decision making

(ii) Difference in goals

(iii) Difference in perception and

(iv) Difference in goals as well as perception.

(i) Absence of joint decision making:

Organisation is comprising of different groups. Each group puts its urgency for having maximum share in the limited resources and press for the acceptance of its own time schedule for the performance of a task. If the wishes of a group in respect of resources and time schedule are accepted, justice cannot be done to other groups, which will ultimately lead to organisational ineffectiveness. Joint decision making is the only solution to resolve the conflict. The conflicting parties may sit together and discuss their own needs in the overall organisational perspective.

(ii) Difference in goals:

Difference in goals arises due to the following reasons:

(a) Factors which affect the commonality within the organisation such as heterogeneity in groups

(b) Factors that affect the clarity and consistency of reward structure and

(c) Factors which affect comparability of reward structure

(iii) Difference in Perception:

Differences in perception causing intergroup conflict arise due to:

(a) Members having different sources of information

(b) Different techniques of processing the information

(c) Different time horizons and

(d) Difference in goals.

5. Organizational conflict

All the conflicts discussed in the preceding discussion relate to conflicts within the organisational settings. Inter organisational level conflict occur between organisations which are in some way or the other dependent upon each other. Conflicts at individual level, group level or inter group level are all inherent in the organisation level conflict. The organisation level conflict can be between the buyer and seller organisation, between union and organisations employing the members, between government agencies that regulate certain organisations and the organisations that are affected by them.

Managers must try to live with this type of conflict. If the conflict is properly handled it can be constructive in achieving the results. It can act as a stimulus it may be a challenge and motivational force to keep the organisation moving.

Organizational Conflict or otherwise known as workplace conflict, is described as the state of disagreement or misunderstanding, resulting from the actual or perceived dissent of needs, beliefs, resources and relationship between the members of the organization. At the workplace, whenever, two or more persons interact, conflict occurs when opinions with respect to any task or decision are in contradiction.

Causes of Organizational Conflict

• Misunderstanding: Misunderstanding of information, can also alleviate dispute in organization, in the sense that if one person misinterprets some information, it can lead to series of conflicts.
• Managerial Expectations: Every employee is expected to meet the targets, imposed by his/her superior and when these expectations are misunderstood or not fulfilled within the stipulated time, conflicts arise.
• Lack of accountability: If in a project, responsibilities are not clear and some mistake has arisen, of which no member of the team wants to take responsibility can also become a cause of conflict in the organization.
• Communication Disruption: One of the major causes of conflict at the workplace is disruption in the communication, i.e. if one employee requires certain information from another, who does not respond properly, conflict sparks in the organization.
• Competition for Scarce Resources: In an organization, anything of value (funds, personnel and valuable information) can be a competitively sought-after resource. When competition for scarce resources becomes destructive, conflict can be avoided by increasing the resource base. For example, more personnel can be hired when they are to avoid shortages in the future.
• Time Pressure: Time pressure, like deadlines, can increase the performance of an individual or reduce the performance by triggering destructive emotional reactions. Hence, while imposing deadlines, managers must understand and consider an individual’s capacity and ability to meet the set targets.
• Absence of Time Management: For smooth running of organisation and timely attainment of objectives, makes the organization profitable. If proper schedules are maintained for various activities the developmental executives may try to shift their responsibilities on one another and start blaming one another it gives rise to conflicts among departments.

Organizational conflicts Benefits

Getting Employees’ Attention

Another way that conflict can benefit your company is that it helps employees stay focused on the task at hand. In some cases, when you have meetings regularly, employees become immune to them and start to daydream. If a bit of conflict is expected in the meeting, it will keep the employees on the task at hand. When employees are encouraged to speak their minds and tell the truth, it can improve the quality of meetings overall.

Improves Ideas

Conflict can help improve the quality of ideas that are ultimately produced by the business. When you get a group of people together who are speaking freely and unafraid of conflict, their ideas can be adapted and honed to become more attractive. The company will be less likely to put out poor ideas for new products or services.

Improves Employee Morale

When employees are allowed to speak freely and not shy away from conflict, it can actually improve their morale. Workers who are allowed to speak freely tend to feel more valued overall. When an employee feels that his opinion is important, he will feel more comfortable in the company.

Improves Employee Relationships

Another way that conflict could potentially help your business is that it can help you improve your employee relationships. When you feel comfortable enough to disagree with someone, it can strengthen your relationship over the long term. After engaging in a conflict in a professional manner, you can move on and continue working together in the future. Businesses that allow conflict tend to develop stronger relationships between their employees.

Engages Employees

One of the potential ways that conflict can benefit your organization is that it creates engagement with the employees. For example, when an idea is presented at a meeting, you do not want everyone to simply agree with the presenter for fear of a conflict. Instead, you want employees to be able to speak freely. When employees disagree with an idea, they should be able to speak up and voice their opinion. If they are afraid of conflict, a bad idea could be implemented.

Organizational conflicts Limitations

Obstruct exploration of more alternatives: A conflict proceeds through the stages, resolution becomes more difficult. People become more licked into their positions and more convinced that the conflict must be a win or lose situation. That makes a situation of obstructing exploration or more alternatives.

Interfere with listening: The outward display of conflict occurs when the opposing parties plan and follow through with acts to frustrate one another. In this scenario the avoid listening to each other tries to focus on individual problems.

Derive Unaggressive committee members to the sidelines: During conflict very much active members participate in negotiation, which Drives unaggressive committee members to the sidelines making themselves non-participatory members of that group.

Create deadlocks: The parties begin to focus on differences of opinion and interests, sharpening perceived conflict, which creates deadlock while making decisions and conflict resolution.

Delay decisions: Conflict arises in groups because of the scarcity of freedom, position, and resources. People who value independence than to resist the need for interference and, to some extent, conformity within a group. It makes the group delayed during decision making.

Divert time and energy from the main issues: Conflict tends to divert the main issue of the objective of the organization. A struggle between groups of employees shifts the objective from the main focus.

The traditional view of conflicts has been around since late nineteenth century. According to this view, the conflicts are always bad for an organization. It always leads to failure and always has a negative impact on the performance of an organization. According to this view, a conflict is synonymous to violence, destruction and irrationality.

It was first developed in the late 1930s and early 1940s, with the most linear and simple approach towards conflict. According to the traditional view, any conflict in an organization is Outright bad, negative and harmful.

Traditional View

According to the traditional view, a conflict must always be avoided at all costs. The manager should try to reduce, suppress or eliminate it. The manager is allowed to take authoritative approach to rid the organization of conflicts. The problem with this view is that the root cause of the conflict is left undetermined.

Moreover, the traditional view on organizational conflict identifies poor communication, disagreement, lack of openness and trust among individuals and the failure of managers to be responsive to their employees’ needs as the main causes and reasons of organizational conflict

The traditional view is the early approach to conflict which assumed that all conflict was bad and to be avoided. The conflict was treated negatively and discussed with such terms as violence, destruction, and irrationality to reinforce its negative implication.

The conflict was a dysfunctional outcome; resulting from poor communication, lack of transparency and trust between people, and the failure of managers to be responsive to the necessities and aspirations of their employees.

The view that all conflict is negative certainly offers a simple approach to looking at the behavior of people who create conflict.

We simply need to direct our attention to the causes of conflict, analyzing them and take measures to correct those malfunctions for the benefit of the group and organizational performance.

Conflict was seen as a dysfunctional outcome resulting from poor communication, a lack of openness and trust between people and the failures of the managers to be responsive to the needs and aspirations of the employee. Conflict could cause losses in productivity because groups would not cooperate in getting jobs finished and would not share important information. Too much conflict could also distract managers from their work and reduce their concentration on the job.

Thus, traditional writers had a very conservative view about conflict as they considered it totally bad and advocated that conflicts must be avoided, with the result that sometimes; there is a tendency to suppress conflict and push it under the rug. By ignoring the presence of conflict, we somehow try to wish it away.

Both the scientific management approach and the administrative school of management relied heavily on developing such organisational structures that would specify task, rules, regulations procedures and authority relationships so that if a conflict develops, then these inbuilt rules will identify and correct problems of such conflict. Thus, through proper management techniques and attention to the causes of conflict, it could be eliminated and organisational performance improved.

Human Relations View

The human relations view dominated the conflict theory from the late 1940s through the mid 1970s. The human relations view argued that conflict was a natural occurrence in all groups and organisations. Since conflict was inevitable, management should accept the conflict. This theory says that conflict is avoidable by creating an environment of goodwill and trust.

Human Relations view is also referred to as managed view. While the traditional view relates the conflicts with destruction and a negative impact and tries to ensure the removal of conflict, the human relations view acknowledges the existence of conflict in an organization. According to this view, in an organization, conflict is inevitable and natural. A conflict has the potential to have a positive impact on the performance of an organization. A conflict cannot be totally eradicated and there are times when this conflict may even benefit an organization.

The managers should accept the conflict and should try to manage it effectively instead of suppressing or totally eliminating it. They should not allow the conflict to increase more than a certain level and they should also not leave the conflict unresolved. This may lead toward the decrease in performance.

But still conflicts are bound to happen due to differences in opinions, faulty policies and procedures, lack of cooperation, allocation of resources which will lead to distortion and blockage in communication. Accordingly, management should always be concerned with avoiding conflict if possible and resolving it soon if possible, in the interests of the organisation and the individuals.

Interactionist View

The third view which is also the latest view on conflict is called the interactionist view. According to this view, a conflict is mandatory for an organization’s better performance. A conflict helps an organization to cope with changes in a better way. This view encourages the conflicts based on the rationale that if there is no conflict in an organization, it may become stagnant, lethargic and non-responsive to needs for change and improvement.

Modern View Point, while the human relations view accepted conflict, the inter-actionist approach encourages conflict. This view is based on the belief that conflict is not only a positive force in a group but is also necessary for a group to perform effectively. This approach encourages conflict. According to it if the group is harmonious, peaceful and cooperative, it is prone to become static and non-responsive to the needs for change and innovation. Therefore, the group leader must allow some conflicts to happen in the group, so that the group may remain viable, self-critical and creative.

However, conflicts must be kept under control to avoid their dysfunctional consequences. The major contribution of the inter-actionist approach is encouraging group leaders to maintain an ongoing minimum level of conflict, enough to keep the group viable, self-critical and creative.

Thus, it becomes evident that to say conflict is all good or bad is in appropriate and naive. Whether a conflict is good or bad depends on the type of conflict. Specifically, it is necessary to differentiate between functional and dysfunctional aspects of conflict.

The interactionist view indicates that conflict is not only an encouraging force in a group but also an absolute necessity for a group to perform effectively.

While the human relations view accepted conflict, the interactionist view encourages conflicts because a harmonious, peaceful, tranquil, and cooperative group is prone to becoming static apathetic and non-responsive to needs for change in innovation.

So the major contribution of the interactionist view is encouraging group leaders to sustain an ongoing minimum level of conflict enough to keep the group viable, self-critical and inspired.