Conflict Analysis Case Study: Nestlé

Business is a never ending race and in the fast running world of business, there is variety of products and shops, showrooms, setups and etc. The main purpose of this report concerns the research managing conflicts in organization. The organization that is chosen for our research report is ‘Nestlé’. Data and observation analysis, recommendations for managing conflicts is also discussed. The methods used for collecting data for this report are surveys, questionnaires, personal observations, personal interviews, newspapers, internet etc.

In the first section, we had given an introduction about the chosen organization ‘Nestlé” and then a brief description about nature of conflict in the organization and its various types and causes of conflict.

The second section is consists of literature review, in which we had discussed the theories and research papers of different researchers where they explain about conflicts and its causes in an organization and moreover how an organization can prevent those conflicts with best possible solution.

The third section comprises of research methodology, research nature, data collection techniques and sampling method.

In section forth we have scrutinized the primary data by different graphical and statistical tools.

In final section we have given possible conclusions along with recommendations.

CHAPTER # 1

1.1: INTRODUCTION TO NESTLÉ

Nestlé was founded in 1866 by Henri Nestlé with headquarters in Vevey, Switzerland. It has employed around 250,000 people and has factories or operations in almost every country in the world. It is one of the world’s biggest food and Beverage Companies. The Company’s priority is to bring the best and most relevant products to people, wherever they are, whatever their needs, throughout their lives.

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1.2: PURPOSE OF RESEARCH

The purpose of the research is to find the variable which has leads towards conflicts in Nestlé Organization. The main purpose of the research is, firstly, to identify the causes of conflicts in Nestlé and, secondly, to manage conflicts in Nestlé organization.

1.3: BACKGROUND OF THE STUDY

All of us experience some type of conflicts in our daily lives. Tensions, antagonisms, and frustrations always occur when people work together. There are disagreements, perhaps even fights, between employees and the supervisor or between co-workers. Aside from personality clashes, people simply have different viewpoints about the way things should be done.

The main purpose of conducting the research is to find out the conflicts, and finding the ways to manage and solve them in an organisation. In this context we have got the opportunity to conduct our research on one of the top organization’s (Nestlé).

1.4: DEFINITION OF CONFLICT

Conflict is defined as the state of discord caused by perceived or actual opposition of needs, interests and values. A conflict can be internal or external. The concept of conflict can help to explain many social aspects of life such as social disagreement, fights between individuals, groups, or organizations and conflict of interests.

Conflict as taught for graduate and professional work in conflict resolution which is defined as “when two or more parties, with perceived incompatible goals, seek to undermine each other’s goal seeking capability”.

However, conflict can also occur in cooperative situations, in which two or more individuals or parties have consistent goals, because the manner in which individuals or party tries to reach their goal can still undermine the other individuals or party.

1.5: NATURE OF CONFLICT

Conflict may constructively be viewed as resulting from differing belief systems, varied perspectives on the situation and values resulting from participant’s accumulated life experience and conditioning, differing interests and objectives. Effectively dealing with conflict requires the expression and management of participants’ varying interests, belief systems, perspectives and values.

Through the integration of participants’ perspectives, belief systems, interests and values, conflict and conflict resolution play important roles in individual and social evolution and development. Conflict arises when one or more participants view the current system as not working. At least one party is adequately unhappy with the position, that they are willing to own the conflict and speak with the hope of being able to influence the situation to arrive at an improved condition. Conflict may be sight as a process we put ourselves through to attain a new condition and self definition.

Through conflict we have opportunities to be artistically self-defining. If nothing else, conflict allows us in future to do things differently. Through the resolution of conflict, we can evolve and redefine ourselves, our community, our relationships our society and our world.

1.6: LEVELS OF CONFLICT

1.6.1: Inter divisional conflict

Inter divisional conflicts exists between the perceiver and another individual within the organization. Although the other person does not need to be aware of the conflict, the perceiver of the conflict situation recognizes the present or future impact conflict can have on job performance.

1.6.2: Intra group conflict

Intra group conflicts occur between perceiver and his or her immediate group within the organization. The immediate group can consist of work team, department or union. Whether fully or only superficially aware of the conflict issue, the perceiver realizes that the conflict can directly or indirectly affect job performance.

1.6.3: Inter group conflict

It arises between the perceiver’s immediate group and another group within the organization. Again, the perceiver’s involvement may not be critical, but he or she must be aware of the situation and the potential impact the conflict can have on work performance.

1.6.4: Organizational conflict

Organizational conflict is a state of disagreement caused by the actual or perceived opposition of needs, values and interests between people working together.

1.7: TYPES OF CONFLICT

A conceptual conflict can rise into a verbal exchange or result in fighting.Conflict can exist at a variety of types. These are

• Community conflict
• Diplomatic conflict
• Emotional conflict
• Environmental resources conflict
• Group conflict
• Ideological conflict
• Interpersonal conflict
• Inter-societal conflict
• Intrapersonal conflict
• Organizational conflict
• Religious-based conflict and Workplace conflict.

1.8: CAUSES OF CONFLICTS

1.8.1: Authority relationship

Authority Relationship conflicts occur because of the existence of strong pessimistic emotions, misperceptions or stereotypes, poor communication or miscommunication, or repetitive negative behaviors. Authority relationship problems often increase disputes and lead to an unnecessary rising spiral of destructive conflict. Supporting the secure and balanced expression of perspectives and emotions for acknowledgment (not agreement) is one effective approach to managing relational conflict.

1.8.2: Management style

For any organization to be effectual and efficient in achieving its goals, the people in the organization need to have a common vision of what they are determined to achieve, as well as clear objectives for each individual, group/ team and department. Management style also needs ways of recognizing and resolving conflict between people, so that conflict does not become so serious that collaboration becomes impossible. The management of any organization needs to have ways of keeping conflict to a minimum and of solving problems caused by conflict, before conflict becomes a major obstruction to work.

Management style helps to avoid conflict where probable and organizing to resolve conflict where it does happen, as rapidly and smoothly as possible.

1.8.3: Communication barriers:

Conflict will be greater when barriers to communication exist. If parties are separated from each other physically or by time e.g.; the day shift versus the night shift-the opportunity for conflict is increased. To illustrate suppose a company employs only one plant supervisor, who works the day shift and leaves orders at the beginning of each week for the workers on the night shift. By the end of the week, how ever, these orders have been only partially carried out. The supervisor cannot figure out why. Obviously, the supervisor absence from the night shift has posed a communication barrier, which in turn causes decreased output. As Bryans, P, Cronin argued in 1984 that Space or time separations could promote isolated group interests rather than advance a common effort towards joint goals.

1.8.4: Personal factor

1.8.4.1: Behavioral

The way emotional experience gets expressed which can be verbal or non-verbal and intentional or un-intentional.

1.8.4.2: Physiological

It’s defined as the bodily experience of emotion. The way emotions make us feel in comparison to our identity.

1.8.4.3: Cultural values

Culture tells people who are a part of it, “Which emotions ought to be expressed in particular situations” and “what emotions are to be felt.”

1.8.4.4: Physical

This escalation results from “anger or frustration.”

1.8.4.5: Verbal

This escalation results from “negative perceptions of the annoyer’s character.”

1.9: WAYS OF ADRESSING CONFLICTS

There are basically five ways of addressing conflicts which were identified by Thomas and Kilman in 1976. These are

1.9.1: Accommodation

One’s party surrenders its own needs and wishes to accommodate the other party.

1.9.2: Avoidance

Avoid conflict by ignoring it, changing the subject, etc. As an expedient means of dealing with very minor, non-recurring conflicts or Avoidance can be useful as a temporary measure to buy time. In many cases, conflict avoidance involves severing a relationship.

1.9.3: Collaboration

Working together can find a mutually beneficial solution. Collaboration can also be inappropriate and time-intensive. When there is not enough respect, trust or communication among participants for collaboration to occur.

1.9.4: Compromise

Finding a centre point where each party is partially satisfied.

1.9.5: Competition

Take the one’s point of view at the potential expense of another. It can be more useful when achieving the one’s objectives outweighs one’s concern for the relationship

CHAPTER # 2

2.1: LITERATURE REVIEW

Different researchers have published their reviews on conflicts in the organization. We are viewing two best reviews of the researcher’s articles.

Mr. Philips in 1982 threw light on some of key conditions, which may lead to serious organizational conflicts; he gave his views in the book named as “Community in Organization”. According to M Phillips certain social relationships characterized various kinds of conflict behavior. Each one could occur in your work area. The more aware the managers are of these conflict settings, the better are the chances of correcting them and running a smooth operation. Mr. Philip identified communication as problem in his research. The causes of conflicts are structural factors, authority relationships, common resources, goal differences interdependence, jurisdictional ambiguities, specialization, status-inconsistencies, personal factors, communication, conflict management style, cultural differences, emotions, perception, personalities, skills and abilities, values and ethics. The researcher found a possible solution; it is obvious that a perfect communication system is unlikely. But also perfection like rationality will not be achieved; organizations do have mechanism by which they can attempt the communication system as clear as they can. Philips also suggested that there are such devices available which can reduce the distortion and complications in communication process and suggested that communication recipients should be aware of the biases of the message senders and protect their own counter biases as protection devices.

James M Leif & John M Penrose in 1997 in the book Business Strategies & Skills 5th Edition explained the nature of organizational conflicts identify the causes of conflicts i.e. Structural Factors, Common Resources , Goal Differences , Interdependence ,   Jurisdictional Ambiguities, Inconsistencies ,Personal Factors Communication barriers, Conflict management style ,Cultural differences ,Emotions Perception, Personalities, Skills and abilities, Values and Ethics, Behavioral and Physiological Cognitive. The researchers say that it is possible to avoid conflict by having mechanism such as voting to make decision without the disagreement of consensus. They also find that behavioral regulation fail to match the individual need of employee, conflict is bound to occur.

In 1995 B R Siwal in his research “Resolution Strategies to Conflict” describes that conflict is a necessary and integral part of effective problem solving and realistic discussions. It is core sound of decision making because disagreement is the best vehicle for enlargement the perspective, discovering alternatives, and motivating creative interaction among each member. The effects of disagreement, though, depend on how it is administer by team members. Conflict can be integrative and constructive or it can be distributive and disruptive. When mismanagement occur, conflict can demolish team effectiveness, when handled well it can deeply enhance the quality of team work and make members sense proud of their work in the team. Training in the nature of conflict and the ways of managing it is an imperative need of all the people who participates in problem solving groups, such as those that make up work teams. The negative association of conflicts wants to be dispelled and substitute with more practical conceptions that made the justifiable distinction between disruptive and constructive conflict. When team members see that conflict can be a positive strength in conversation, they are better prepared to take up effective proposal attitudes and behaviors in trouble solving situations. Further more the differences between integrative and distributive conflict can help them learn how their own behavior contributes to the atmosphere of the team which they belong.

Davor Dujak in 2008 describes in his research that in every organization conflict encounters on a daily basis. The conflict cannot be avoided but it is probable to mange them in a way that we identify them on time. It is essential to constantly track the organizational signals which position to their existence. If Organization does not respond accordingly, this can lead to the condition that conflict itself manages the organization. One of the more important determinants of productivity, performance and efficiency and finally the job satisfaction is also the conflict as an independent variable of organizational behavior. By systematic research of organizational behavior we want to make a positive influence on the dependents variables, but first we have to realize and get a good approaching to the individual elements of organizational behavior.

In 2004 Melanie Lewis describes in her research that if conflict managed poorly or avoided, it can be very costly to an organization. If managed well, conflict presents an opportunity to uncover significance and promote a healthy work place. Many organizations are finding that their conflicts management systems have been good by financial investments, generating a healthy return. In additional they are recognizing the value of many less substantial benefits (lower turnover, increased efficiencies, improved morale and improve public relations). A precise four phased process assessment, design, implementation, operation and evaluation helps organizations design effective conflict management systems to gather the maximum benefit of conflict system. Moreover this four phased approach strongly encourages the team actually to seek to understand and incorporate the needs and interests of all affected constituency, and creates an environment in which the benefits of the system can be effectively communicated, implemented and administered.

In 2010 De Dreu C.K describes in his research that conflict is a multidimensional with both relationship and task forms. Hence it is expected that if they change the managing type of conflicts, it will plays an important role in organizational performance. While if organization did not manage good, the conflict will plays a negative role. However the researcher discussed only two types of conflicts in his research namely affective and task conflict in order to play better role in organizational performance.

After studying the reviews of different researchers our group decided that we will follow the research methodology of “M Philip” because they dictate information about factors which are important for identifying conflicts and understanding the meaning of conflict and how it influences the organizations internal environment in solving problems.

CHAPTER # 3

RESEARCH METHODOLOGY

3.1: Research type:

The type of research that we are conducting is applied research because it is conducted for a particular organization. Applied research is practical applicability of research tools on a particular organizational situation.

3.2: Data collection

We will be collecting our data by using two sources which are as follows.

3.2.1: Primary data

Our primary data is collected through conducting interviews and designed questionnaires from managers and employees of Nestlé.

3.2.2: Secondary data

The secondary data is collected from past records of Nestlé and books along with business articles to support our recommendations and suggestions.

3.3: Sample size

During this survey we have taken responses from a Sample size of 30 which is further divided into two groups. We also conducted survey from 10 managers and 20 employees. The sampling type that we used is non random sampling technique because we want to get information from every third employee and manager of Nestlé organization. Our survey is in questionnaire and interview form, so our questionnaires consist of open ended and close ended questions. We have conducted unstructured interviews, asked from the respondents to get more information.

CHAPTER # 4

ANALYSIS

4.0: INTRODUCTION TO DATA ANALYSIS

Data analysis is a practice in which the raw data is ordered and organized in order to extract useful information from it. The process of organizing and thinking about data is the key to understand what the data does and does not contain. There are varieties of ways in which people can approach data analysis, and it is infamously easy to manipulate data during the analysis phase to push certain conclusions. There are different methods for analyzing the data for example surveys, charts, frequency tables, graphs and personal observations etc.

We have analyzed our data through frequency tables and bar charts.

4.1: FREQUENCY TABLE

Frequency table is one of the important concepts in mathematical statistics and a good analyzing tool. A table divided into cells by category with counts for each category in each cell. It is a kind of display of a given data, in which the frequency of each data item is found. The frequency of a data item is the number of times it occurs in the data set.

4.2: BAR GRAPH

A graph consisting of parallel, usually vertical bars or rectangles with lengths proportional to the frequency with which specified quantities occur in a set of data. A bar graph is a pictographic version of statistical data in which the independent variable can attain only certain discrete values. The dependent variable may be discrete or continuous. The most common form of bar graph is the vertical bar graph, also called a column graph. This type of display allows us to:

• Compare groups of data, and
• To make generalizations about the data quickly.

4.3: ANALYSIS OF QUESTIONNAIRES

4.3.1: FROM MANAGEMENT

1) More than the desired output of the employees make can be harmful to the organization?

a) YES b) NO

Variables

Codes

Frequency

Yes

01

9

No

02

1

Table: 4.3.1.

Graph: 4.3.1.0

2) There is a free flow of communication among the employees:

a) YES b) NO

Variables

Codes

Frequency

Yes

01

10

No

02

0

Table: 4.3.1.1

Graph: 4.3.1.1

3) Employees are properly informed about decision taken?

a) YES b) NO

Variables

Codes

Frequency

Yes

01

7

No

02

3

Table: 4.3.1.2

Graph: 4.3.1.2

4) There is a consistency among the management policies:

a) YES b) NO

Variables

Codes

Frequency

Yes

01

8

No

02

2

Table: 4.3.1.3

Graph: 4.3.1.3

5) Key post should be through: 

   a)   Direct Appointment                         b) Promotion

Variables

Codes

Frequency

Direct appointment

01

8

Promotion

02

2

Table: 4.3.1.4

Graph: 4.3.1.4

4.3.2: FROM EMPLOYEES

1) From how long have you been working in this organization? 

6 months

1 year

3 years

Or more than 3 years

Variables

Codes

Frequency

6 months

01

4

1 year

02

2

3 years

03

10

Or more than 3 years

04

4

Table: 4.3.2.0

Graph: 4.3.2.0

2) What kind of boss do you like to work with? 

Friendly

Competent

Leant

Difficult

Variables

Codes

Frequency

Friendly

01

17

Competent

02

3

Leant

03

0

Difficult

04

0

Table: 4.3.2.1

Graph: 4.3.2.1

3) Which type of leadership’s style do you like the most?

Autocratic

Democratic

Variables

Codes

Frequency

Autocratic

01

18

Democratic

02

2

Table: 4.3.2.2

Graph: 4.3.2.2

4) How does your management is doing the evaluation among the employees?

Performance base

Merit base

Variables

Codes

Frequency

Performance base

01

18

Merit base

02

2

Table: 4.3.2.3

Graph: 4.3.2.3

5) Which management level should be responsible for problems between employees? Choose any of the following

Top level

Middle level

Lower level

Variables

Codes

Frequency

Top level

01

2

Middle level

02

17

Lower level

03

1

Table: 4.3.2.4

Graph: 4.3.2.4

Q6: How do you communicate the unforeseen problem with your manager or general manager? 

Answer: Most of the respondents suggested that they like to meet the general managers directly for any unforeseen events.

Q7: Do you think your organization should involve the employees in decision making? And why? 

Answer: Most of employees consider that their managers are capable of taking right decisions and there is no need of involving employees. While few of them suggested that it can be a source of new and creative ideas.

Q8: What can you suggest for a better management system? 

Answer: Most of the employees have no idea about it. Few of them believe that friendly environment and better salaries can improve management system.

4.6: INTER ORGANISATIONAL CONFLICTS OF NESTLÉ

The nature conflicts in Nestlé found out through the unstructured interviews and through questionnaire with the directors & the managers of Nestlé Peshawar are as follows:

The first thing which found, was the lack of training given to the employees, managers said that in the organization, employees always have to work together in groups, and if some one feels that he/she cannot work within the group, then there is some problem with that employee, but at the same time managers said that it is the organization’s responsibility to teach the employees how to work together in groups through proper training. They mentioned that without training the organizations might face serious types of irresolvable conflicts, which are definitely not fruitful to the organization.

The second main reason mentioned by the manager of the company was the “Selection Biases”, manager said that selection biases may also lead to conflicts within the company, and these conflicts are normally personal as well. The manager said that if in cases the top management (directors) interferes in the process of hiring the employees, they might select the wrong person for the right job.

On the other hand there may be serious conflicts going on between the managers & the directors on the issues of authority and responsibility balance. Further if the manager takes big decisions like job confirmation & salary decisions then, there may be conflicts, and these must be taken by the top management (directors).

The manager of Nestlé also raised the point of communication’s problem. They believe that every information must be communicated from their tables. If in any case any employee bypasses the manger, there may be a conflict between them. Manager also said that there is no need of any employee who bypasses the manager to access to the top management (directors). Usually the organizations do have “Coordinators” who are directly answerable to the top management. He said that the manager will not be able to properly deal with him and conflicts between them will arise.

The manager said that young unmarried employees usually indulge in office politics and make conflicts among the employees. According to him only married and experienced persons should be provided with the jobs.

Racial problems also create conflicts among the employees. Bad attitude of the manager and arrogant nature of the boss is also one reason of conflicts.

The manager said that effective person but highly cooperative person would be proffered in place of an efficient but uncooperative one.

The managers presented the following ideas to prevent conflicts:

• Contractual Jobs
• Hire & fire system.
• Authority to the managers

Some of them had a bit different views. Director held the middle management’s capabilities responsible for the conflicts within the organization. He also said that there is no relationship between the authority and reasonability with the conflicts. He proffered the autocratic style of management in the beginning, but it should be shifted to the democratic style in the later portions.

Director said that although the centralized system slows down the process of working, but it will also decrease the conflicts between the employees. They said that, if you (Employee) have to be successful in the company, then you have to become a big “YES SIR”.

One of the director also mentioned that horizontal conflicts are more common. Super seeded persons normally indulge in making conflicts. He said that super seeded persons should be terminated in place of super seeding them. Dress code can experience the anger from the employees due to Ethnic affiliations to some dresses.

Directors were strongly in favor of “Coordinator”, they said that a coordinator channels the communication process between the manager and the top management. He also gave the following ideas to prevent the possible conflicts in the organizations:

• Promotions
• Clear line of Authority

Not more than one employee from same Regional locations and same institutions/Universities.

CHAPTER # 5

5.1: CONCLUSION

“The Organizational Conflicts” is itself not a problem, but it is a serious symptom of some factors that are usually ignored while designing the organizational structures. From the literature review, taking samples (convenience) & analysis of the data gathered, some factors are identified that usually are the root cause of the conflicts. Some of these are:

• Ethnicity
• Personal Jealousy
• Arrogant behaviors (low temperament)
• Communication problems

Due to the nature of the issue the responses from the top (Directors), middle (Managers) & lower management (Employees) were totally contrary with each other. For this purpose structured questionnaires (covering both open ended and close ended questions) and unstructured interviews were conducted. That made the deductions possible by comparing the verbal and non verbal responses, rephrasing the same questions two-three times to check the consistency of the replies.

The ethnic issue is the most important. Due to ethnicity no sampled branch has been successful in implementing the dress code yet. Even though, all the respondents favoured it.

It is observed that employees belonging to KHYBER PUKHTUNKHWA are very low tempered. Their frequency of jobs switching is higher than others. It proves that they cannot work in teams and work with an arrogant manager.

To conclude, who should be held responsible for conflicts, the manager is the key person who channels the communication whether upward or down ward.

5.2: RECOMMENDATIONS

The current thinking should be for the maximum utilization of the company’s resources and to push the power and decision making authority down the hierarchy of the organization. This can create more power and flexibility within the company as a whole.

Good leaders should not have any problem in delegating power and responsibility.

Disagreement with the supervisor should be encouraged as long as it leads to productive results.

It is critical for the manager to get diverse work force to work well together and respect their differences. Diversity should be encouraged because it can help the organization in future to adapt to the changing global market.

All problems can be prevented from happening and/or rectified, if the middle management (Manager) of the company justifies its position. Middle management plays an anchor role. Manager should be able to deal with all the employees who have different cultural backgrounds, personalities & priorities. Hiring experienced and matured managers and providing them training could help the case.

On job training of the employees.

Open house discussions should be there at least one a month.

While assigning the groups to the employees for tasks, it must be assured that all the groups are properly matched.

REFERENCES

http://www.google.com.pk/

B R Siwal http://www.scribd.com/doc/19166679/Conflict-Resolution

Jeremy.Cooper.SF.FIN.http://docs.google.com/viewer?a=v&q=cache:TvBuLFIn6cIJ:www.asic.gov.au/asic/pdflib.nsf/LookupByFileName/managing_conflicts_of_interest.pdf/%24file