Northeast Business & Economics Association (NBEA) Established in 1973

Effects of Unresolved Conflict on Organizational Health and Performance and Conflict Resolution Training for Developing Leaders and Improving Business Success
Katrina Patterson Dowling College Rpatter944@aol.com ABSTRACT This paper focuses on the effect of unresolved conflicts on the health and performance of organizations and conflict resolution training as a strategy for developing leaders and improving business success. This paper shows how the unresolved personal and professional conflicts, alike, of employees can negatively impact the health and success of the organizations within which they are employed. The paper proposes using conflict resolution training as a leadership development strategy as well as a strategy for improving organizational business success. In this paper, the author will identify the primary benefits that organizations can experience by implementing and aggressively using conflict resolution training as a means for developing its leaders. Specifically, the author will explain how organizations, by strategically employing conflict resolution training, particularly during the current economic recovery, can: (1) establish and maintain a healthy workplace environment where employees feel valued, respected, and secure; (2) develop and retain loyal employees by instilling within their hearts and minds organizational values, trust, and credibility; (3) create winwin scenarios for the organization and its employees by pursuing mutual interests, goals, and visions; and (4) develop effective leadership skills on all levels within the organization by training both managers and subordinates. Keywords Unresolved conflict, organizational health, organizational performance, conflict resolution training, leaders, leadership development, strategy, business success, bottom line 1 INTRODUCTION among organizations. No matter the size, geographic location, management style, organizational philosophies, creativity, innovation, marketing techniques, or financial prowess (or lack thereof), all organizations share one common ingredient: people. Therefore, in attempting to understand root causes of the current financial crisis and what remedial resources to prescribe as a response, let us temporarily turn away from the obviously-overt factors traditionally believed to drive business performance innovative products and services, creative ways of doing business, competitive pricing, and manufacturing for less but selling for more, to name just a few. Instead, let us consider the most common denominator underneath it allthe peopleand how the people themselves, the employees of any given organization, directly impact the bottom line. Specifically, however, what about the people should we consider? Exactly what concerning the employees should garner our attention? Well, lets start with this proposition: where there are people, there will be problems (Carbonell, 2003, p. 217; Cloke & Goldsmith). While people-problems come in all shapes and sizes, let us look, specifically, at the underlying root cause of the problems experienced among the people of any organization. Organizational problems begin with conflict, and unresolved conflicts manifest themselves as problems within organizations where conflicting or conflicted individuals reside, often negatively affecting the health and performance of the organization (Kinicki & Kreitner, 2008). The great reality about problems and conflicts, however, is that, if handled properly, they can produce favorable business results (Bagshaw, 1998). The more adept one is at managing and resolving conflicts, the more effective that person can be as a leader in achieving business success and positively impacting the bottom line (Kinicki & Kreitner, 2008; Maxwell, 1999, pp. 103-110). 2 WHAT IS CONFLICT, AND WHERE DOES IT COME FROM? Daniel Dana (2001), mediation pioneer, defines workplace Page542

Over the past several years, many American businesses have experienced unprecedented financial crisis, the causes and effects of which remain the focus of potentially infinite research, discussion, and debate. While it is rare that an organizations demise is attributable to just one factor, there is one factor that prevails as the most common denominator Management

Northeast Business & Economics Association (NBEA) Established in 1973 conflict as, a condition between or among workers whose jobs are interdependent, who feel angry, who perceive the other(s) as being at fault, and who act in ways that cause a business problem. (p. 5). As Dana points out, conflict not only causes business and organizational problems; conflict also involves emotions, thoughts, and behaviors. Therefore, practical solutions should not solely be born out of and comprised of traditional business practices, but should also consider and address the thoughts, emotions, and behaviors attendant to conflict. A multi-discipline approach provides for more holistic solutions to conflict management and resolution that are designed to improve organizational health and performance. Notwithstanding Danas definition of conflict, which he restricted to the workplace, what about an instance where an employee is involved in an interdependent relationshipa marriage, for example, and the employee feels angry with his or her spouse, perceives the spouse as being at fault, and behaves in ways that cause business problems within the organization where employed? Is this non-workplacerelated, or personal, conflict any different from the workplace-related, or professional, type of conflict previously defined? Incidentally, the employees spouse may, very likely, share mutual feelings of anger and perceived fault towards the employee, in which case, the spouse may, likewise, exhibit workplace behaviors that also cause business problems for his or her respective organization of employment, negatively affecting performance, stifling success, and impacting the bottom line. While it is true that one kind of conflict, perceivably, originates at work, and the other kind originates outside of work, the end result is still the same: both conflicts cause a business problem, which, in some way, somehow, has the potential to impact the health of the organization, its performance and, ultimately, the bottom line. Though, the results are the same, the two conflicts are distinguishable based upon where each conflict originated, but the distinctions presume that the workplace conflict is truly rooted in job interdependency between or among the apparent employees involved in the conflict. It is very possible, however, that even though any business problems can be traced to the interdependent relationship between or among employees, at least one employee may be involved in a non-workplace-related conflict that feeds and fuels that employees emotions, thoughts, and behaviors that manifest as or contribute to the workplace conflict hat causes a business problem and negatively impacts the bottom line. In other words, unresolved conflict, whether on the job or off the job, can have a domino effect on the health and performance of any organization and on that organizations ability to achieve and maintain success (Peck, 1978, p. 166; Scazzero, 2003, pp. 20, 39-41). Management 3 WHY DO CONFLICTS GO UNRESOLVED?

Regardless of where conflict beginsin the workplace or outside of the workplace, once it exists, what do the parties involved in the conflict do about it? Common responses to conflict fall into three categories: Escape, where people runaway and never truly deal with the issues causing tension; Attack, designed to eliminate or demolish others involved in the conflict, often viewed as enemies; and Peacemaking (Kinicki & Kreitner, 2008; Sande, 2004, pp. 23-27). Many conflicts go unresolved because peacemaking, the only true remedy for genuine resolution, can be hard work, requiring a personal investment of vulnerability and emotional and psychological resources, rooted in soft individualism, which for many is no natural or easy task (Peck, 1987, p. 95; Townsend, 2007). Escape or attack becomes the preferred path of least resistance and least personal expenditure, leaving many personal and professional conflicts unresolved (Bagshaw, 1998). 4 THE EFFECTS OF UNRESOLVED CONFLICT ON ORGANIZATIONAL HEALTH AND PERFORMANCE Whether a line item on the annual budget or not listed at all, unresolved conflict costs money and can, therefore, undoubtedly, affect the success of any organization, as expressed in dollars and cents (Dana, 2001). For a business that experiences a net loss, uncovering the monetary value associated with unresolved conflict may just be the key discovery that turns the income statement from negative to positive. Likewise, for businesses experiencing profits each year, profits could be even greater but for outstanding conflict and the related hidden dollars nestled within unresolved disputes that work against the bottom line. Whether we believe and accept the quantifiable realities of workplace conflict or not, the fact remains: conflict costs money. Regardless of how conflict makes its way into the workplace, its costs to an organization are most significantly expressed in unproductive time, salaries, impaired decisionmaking, employee morale, and employee turnover (Dana, 2001). Managers may contend that, even if employees do not like each other or do not get along, they are at work to do a job, so employee conflict is viewed merely as a personal matter and of no consequence to the business at-hand, so long as the work gets done (Bagshaw, 1998; Kinicki & Kreitner, 2008). Are employees, however, really doing their jobs and being as productive and as efficient as possible if they feel anger towards a person with whom their position is interdependent? If an employee is angry with a colleague or a manager, whom they perceive as being at fault, that employee is likely to engage in behaviors that translate into Page543

Northeast Business & Economics Association (NBEA) Established in 1973 business problems even if those problems are not immediately evident? Businesses experiencing financial hardships may be unpleasantly surprised at how much money may be going down the drainmoney that could, potentially, turn business aroundif the organization were to dig more deeply beyond the traditional impediments to turning a profit and the historical causes of business failure. Businesses experiencing success, however, are also vulnerable. Even if a business is profitable and its employees are doing their fair share, they may just be doing only enough to meet the requirements of their respective job descriptions. Employees experiencing conflict on the job may not slack off from doing what is required, but they may hold back on making creative contributions that could, potentially, take the organization to a new level of success (Bagshaw, 1998).. Unproductive Time and Salaries If up to 42% of an employees time at work is spent on dealing with conflict in some kind of way (Dana, 2001, p. 19), then, realistically, how much time is that employee putting towards doing what they are actually receiving a salary to do? If an organizations average employee-salary is $60,000, annually, the organization may only be receiving $35,000 worth of productivity, while paying out an annual salary of $60,000. So, $25,000 is being unproductively consumed, not to complete tasks that accomplish business goals, but, rather, by the presence of unresolved conflict. This scenario depicts the effect of one employee, but if we multiply this rationale to apply to multiple employees dealing with conflict in the workplace, the quantitative results could be staggering. Impaired Decision-making Decision-making is at the crux of distinguishing successful businesses from failing ones (Brewer, Garrison & Norren, 2010; Liker, 2004). If ongoing conflict exists between an employee and a manager, is it not possible, or even probable, that the employees role in contributing to decisions the manager must make, particularly based on information the employee is responsible for providing, might very well be compromised by a brewing conflict that has not yet been resolved? Common is the case that people tend not to be all that eager to help and cooperate with those with whom they feel angry (Maxwell, 1999). If managers are making decisions predicated upon information that may not be fully credible, the underlying conflict, in actuality, is of greater consequence and accounts for far more than an employee and a manager, simply, not getting along. The effects of impaired decision-making can be stifling to the bottom line (Hughes, Ginnett, & Curphy, 2009, p. 580). Employee Morale and Employee Turnover Management Let us, though, not minimize, however, anger among employees. Anger accompanied by a perception of fault towards those with whom an employees job is interdependent, may, likely, dampen employee morale (Dana, 2001; Sande & Kober, 2005, p. 3). The correlation between employee morale and employee turnover is evident but still worth articulating. The lower the morale of an organizations employees, the higher the likelihood for employee turnover; the higher the rate of employee turnover, the greater the impact on the organizations health, performance, and bottom line success (Deming, 1986; Kinicki & Kreitner, 2008). 5 CONFLICT RESOLUTION TRAINING FOR DEVELOPING LEADERS AND IMPROVING BUSINESS SUCCESS The costs of workplace conflict can be grave and can remain camouflaged and unrecognized amidst traditional itemized business expenses. The good news, nevertheless, is that organizations and their employees can mutually benefit from the inevitable conflicts that manifest in the workplace, regardless of whether they stem from personal or professional interdependent relationships (Cloud, 1992, p. 338; Kinicki & Kreitner, 2008). Conflicts, though accompanied by hidden costs, can serve as hidden treasures, providing managers and subordinates with opportunities to work through issues, to gain greater understanding of each others values, interests, and goals and to leverage similarities and differences that, if pooled together, can build effective teams and collaborations that positively impact the organizations health, overall success, and bottom line (Giesen, 2003; Hughes et al., 2009; Kinicki & Kreitner, 2008; Maxwell, 1999). If leadership is all about building teams and getting work done through others (Hughes et al., 2009), then those who lead must be equipped to do just that. How, however, can designated leaders be expected to build competent teams that accomplish organizational objectives through others not also be graced with the proper training in how to combat a major hindrance that conflict poses to a leaders ability to actually build a team? What a leader achieves by way of great team-building skills can swiftly be undermined by that leaders inability to effectively deal with inevitable conflict. Knowing how to adequately resolve conflicts renders benefits beyond squelching angry feelings, fault-finding, and problematic behaviors in the workplace. Tackling conflict head on, when done confidently by one, who has been trained in and understands the means and ends of a structured resolution process, not only addresses the conflict at-hand but sets the stage for building genuine, solid relationships that can, potentially, birth new worlds of innovation and creativity (Dana, 2001; Kinicki & Kreitner, Page544

Northeast Business & Economics Association (NBEA) Established in 1973 2008; Peck, 1987). Conflict resolution training on the organizational level accomplishes two results. The first and most obvious is that, through this training, organizations empower their employees, no matter where situated in the organization, to operatively manage and deal with conflict in healthy ways, thereby reducing costs associated with unresolved conflict and lessening its negative impact on the bottom line (Cloke & Goldsmith, 2000; Dana, 2001). The second and far more reaching result is that organizations equip their leaders with essential tools for success by teaching them: (1) how to build relationships; (2) how to develop and maintain rapport with others in spite of disagreement; (3) how to cultivate trust and foster a sense and spirit of community; and (4) how to maximize diversities and also capitalize on mutual interests and objectives among colleagues and between the organization and its employees (Broome, DeTurk, Kristjansdottir, Kanata, & Ganesan, 2002; Cloke & Goldsmith, 2000; Kinicki & Kreitner, 2008; Townsend, 2004). More specifically, an organization that invests in training its employees in how to work through and manage conflict rather than wander through and muddle with it, proactively counters and displaces the negative effects that conflict has in eroding the organizations bottom line with positive effects prescribed within the training itself, directed towards leadership development. The positive effects of the training should manifest in the form of the organizations ability to: (1) establish and maintain a healthy workplace environment where employees feel valued, respected, and secure (Deming, 1986; Kinicki & Kreitner, 2008); (2) develop and retain loyal employees by instilling within their hearts and minds organizational values, trust, and credibility (Cloke & Goldsmith, 2000); (3) create win-win scenarios for the organization and its employees by pursuing mutual interests, goals, and visions (Addis, 2008; Barker, 1997, 2001; Buckingham, 2005, 2006); and (4) develop effective leadership skills on all levels within the organization by training both managers and subordinates (Dana, 2001; Deming, 1986). The organizations return on its investment would be measured by the anticipated increase in employee performance, creativity, and productivity, which should directly impact the health of the organization; its performance and success, and should, ultimately, improve the bottom line. 6 CONCLUSION As we tread our way through the current economic recovery, we are challenged to come up with solutions that not only propel us past the trying times of financial crisis but solutions worthy of ongoing implementation and imbedded within the organizational fabric and philosophies of Management business, industry, and society, at-large. If, in business, our greatest asset is people, and if, where there are people, there will inevitably be problems, then it behooves us to invest in our greatest asset by equipping our people with the practical skills to effectively manage and resolve the people-problems that arise in the form of conflict that stifle performance and negatively impact the bottom line, even if not listed as a line-item expense on the income statement. The time has come where we must put new wine into new wine skins (Robertson, 1992) and strategically infuse the marketplace with new ideas and new solutions that remedy existing issues affecting business results but that also confidently equip those responsible for the results and for sustaining business for the long-term (Deming, 1986). M. Scott Peck (1978) identified a road less traveled in that many people do not invest the amount of time necessary for adequately resolving issues (p. 28). The reality is that genuine conflict resolution takes time, but since time itself is what is lost (but still paid for by an employer) when conflicts go unresolved, organizations should make an affirmative business decision to invest the time and resources to deal with conflict head-on? Why not turn the accompanying time lost and the hidden costs of unresolved conflictworkplacerelated and non-workplace-relatedinto a necessary, intentional, and justifiable business expense to implement, on an ongoing basis, conflict resolution training as a strategy for developing leaders and improving business success, making this a road more traveled rather than less? ACKNOWLEDGEMENTS The author wishes to acknowledge the support and encouragement of Professor Nicole Jean Christian, Adjunct Lecturer of Management and Leadership, Townsend School of Business, Dowling College; Dr. Maureen L. MacKenzie, Associate Professor of Management and Leadership, Townsend School of Business, Dowling College; Ms. Antonia Loschiavo, Assistant Dean, Townsend School of Business, Dowling College; my husband, Rodney Patterson, and our two children, Ericka and Shane Patterson. REFERENCES Addis, S. 2008. Leading vs. managing. Rough Notes 151(9): 230. Bagshaw, M. 1998. Conflict management and mediation: Key leadership skills for the millennium. Industrial and Commercial Training 30(6): 206. Barker, R. A. 1997. How can we train leaders if we do not know what leadership is? Human Relations 50(4): 343362. Barker, R. A. 2001. The nature of leadership. Human Relations 54(4): 469-494. Page545

Northeast Business & Economics Association (NBEA) Established in 1973 Brewer, P., R. Garrison, and E. Noreen. 2010. Introduction to managerial accounting (5th ed.). New York, NY: McGraw-Hill. Broome, B. J., S. DeTurk, E.S. Kristjansdottir, T. Kanata, and P. Ganesan. 2002. Giving voice to diversity: An interactive approach to conflict management and decisionmaking in culturally diverse environments. Journal of Business and Management 8(3): 239. Buckingham, M. 2005. Great leading. Leadership Excellence 22(5): 3. Buckingham, M. 2006. Great leading. Leadership Excellence 23(6): 8. Carbonell, M. 2003. Discover your giftedness. Blue Ridge, GA: Uniquely You Resources. Cloke, K. and J. Goldsmith. 2000. Conflict resolution that reaps great rewards. Journal for Quality and Participation 23(3): 27. Cloud, H., PhD. 1992. Changes that heal: How to understand your path to ensure a healthier future. Grand Rapid, MI: Zondervan. Dana, D. 2001. Conflict resolution: Mediation tools for everyday worklife. New York, NY: McGraw-Hill. Giesen, G. 2003. From conflict to Collaboration. Executive Excellence 20 (3): 11. Hughes, R. L., R. C. Ginnett, and G. J. Curphy. 2009. Leadership: Enhancing the lessons of experience (6th ed.). New York, NY: McGraw-Hill Higher Education. Kinicki, A. and R. Kreitner. 2008. Organizational behavior: Key concepts, skills and best practices (3rd ed.). Boston, MA: McGraw-Hill/Irwin. Liker, J. K. 2004. The Toyota way: 14 Management principles from the worlds greatest manufacturer. New York, NY: McGraw-Hill. Maxwell, J. C. 1999. The 21 indispensable qualities of a leader: Becoming the person others will want to follow. Nashville, TN: Thomas Nelson Publishers. Peck, M. S., M.D. 1978. The road less traveled: A new psychology of love, traditional values and spiritual growth. New York NY: Simon & Schuster. Peck, M. S., M.D. 1987. The different drum: Community making and peace. New York, NY: Touchstone. Robertson, P. 1992. The secret kingdom: Your path to peace, love, and financial security. Dallas: Word Publishing. Sande, K. 2004. The peace maker: A biblical guide to resolving personal conflict. Grand Rapids, MI: Baker Books. Sande, K. and T. Kober. 2005. Guiding people through conflict. Billings, MT: Peacemaker Ministries. Scazzero, P. 2003. The emotionally healthy church: A strategy for discipleship that actually changes lives. Grand Rapid, MI: Zondervan. Townsend, J., PhD. 2004. Whos pushing your buttons?: Handling the difficult people in your life. Nashville, TN: Thomas Nelson. Townsend, J., PhD. 2007. Loving people: How to love & be loved. Nashville, TN: Thomas Nelson.

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