The phenomenon of conflict is as old as humanity. For the first time, the Greeks in the person of Plato and Aristotle, a teacher and a student, who represented two opposing schools, tried to describe him. The conflict itself, and not its attendant phenomena, was really studied, around the beginning of the twentieth century. As a result of this, a new science has emerged that has its origins in philosophy - conflictology.
Conflict is defined as a clash of parties that are aware of their incompatibility over interests, values, resources, and so on. A new round of human development has given conflict experts new material for research - because where people are involved, it is impossible to avoid clashes. Corporations that became an important social institution as a result of globalization were no exception.
Globalization?
Globalization is the process of the emergence of world-wide ties: cultural, social, economic and political. It began in the late XIX - early XX century. Economic globalization appears in the phenomenon of the division of labor, when one country produces a certain number of goods for export, purchasing other goods on the world market. She has many supporters and opponents, but it is no longer possible to cancel or at least somehow influence globalization at this stage.
TNCs - transnational corporations operating in many countries of the world, have long become a part of the lives of billions of people. The moral side remains a big question - many of them transfer their harmful production to third world countries, poisoning the environment there, but, on the other hand, providing people with jobs. However, this article will not discuss this.
What is a corporate conflict?
So, we turn to authoritative sources. The concept of corporate conflict is given, for example, by Yu. Sizov and A. Semenov. The definition given by these researchers is given below.
Yu. Sizov and A. Semenov define corporate conflict as disagreements and disputes arising between the shareholders of the company, shareholders and the management of the company, the investor (potential shareholder) and the company, which lead or may lead to one of the following consequences: violation of applicable law, the charter or internal documents of a company, rights of a shareholder or group of shareholders; claims against the company, its governing bodies or the substance of the decisions they make; early termination of powers of existing governing bodies; significant changes in the composition of shareholders.
Let's try to formulate it more capaciously. In other words, corporate conflict is often understood as raider seizure or other illegal (or semi-legal - finding a loophole in the laws, but socially unacceptable and socially condemned) form of activity related to managing a corporation, leading to the alienation of property in favor of the perpetrator of these actions.
This, however, is not the only definition. In addition to criminal variation, there is a less extreme interpretation of the concept of corporate conflict - a clash between employees, different branches of management. This variation will be discussed in the article.
Classification
There are several classifications of types of corporate conflicts. Let us dwell on the most common. It distinguishes two types of conflict: internal corporate conflict in a joint-stock company and corporate blackmail (greenmail).
In addition, it can be typed for the reason that caused it:
- Conflict over infringement of the rights of shareholders by the actions of the corporation.
- The conflict that arose in the process of absorption of society.
- Conflict of shareholders with company managers (or corporate conflict of interest).
- The conflict of shareholders among themselves.
Is it possible to understand what the conflict is brewing?
As already mentioned, since the time of Ancient Greece, there are two traditions of attitude to the phenomenon under consideration. If the first calls for ignoring the root causes and suppressing contentious situations, the second believes that the conflict may indicate problems that must be resolved in order to avoid shocks. Modern science believes that the second way is more productive.
It is extremely difficult to determine the latent stage of a corporate conflict of interest. This clash over values, and, as already mentioned, interests. Due to the changing business environment, it is almost impossible to determine the moment when the values or interests of the subjects of the dispute change and become opposite.
For this reason, corporate conflict is most likely to show up at the stage of tension - it is then that the subjects of the conflict recognize their interests as irreconcilable. Then comes the stage of open confrontation, and then the stage of attenuation, or the post-conflict stage.
Thus, the moment for the easiest resolution of the dispute was missed due to the very essence of the corporate conflict: early analysis is almost impossible here without the involvement of specialists in the market environment.
What if the conflict is in progress?
Little can be done when the conflict goes to its open stage, because at this moment the subjects are heated to the limit and are not able to heed the arguments. An important role in resolving the dispute is played by the mediator - a professional mediator between the parties to the conflict. He differs from the arbiter in that he has no right to impose his decision on the participants - only to offer it. A mediator will help resolve the conflict and its consequences.
The controversial situation itself has several possible outcomes: competition, avoidance, adaptation, cooperation and compromise. Only cooperation is regarded as positive - this is the situation of the “victory-victory” model, as a result, both sides find favorable positions for reconciliation. It is this model, as a rule, that the mediator chooses to achieve if the parties are approximately equal in strength: the external and internal resources that they can spend to achieve their goal in the conflict.
The mediator provides services to create a safe zone for negotiations (a zone in which not a single participant in the negotiations will annoy anything and run into destructive thoughts) and develop a joint solution that suits all parties as much as possible. Thus, the mediator will be an indispensable assistant in resolving corporate conflicts.
Determinants or premises of occurrence
In the above typology of corporate conflicts, their main causes were named, in this section they will be discussed in more detail.
- The conflict that began due to the violation of the rights of shareholders by the actions of the corporation. In philistine language, a controversial situation of this type occurs when the actions of a corporation in any way violate the sovereignty of the board of shareholders and put it at risk. For example, the corporation decides to expand the production area and begins to develop plans for the purchase and further slaughter of cattle, which harms the image of some shareholders who are known for animal protection performances.
- Conflict of shareholders with company managers (or corporate conflict of interest). A good shareholder wants to get more profit, and a good manager wants to redirect the flow of this profit into the corporation to get even more profit next year. Or hide in your pocket. At least that's what shareholders sometimes think.
- The conflict of shareholders among themselves. The reasons are very different, the consequences are always unpredictable.
Conflict management process
There are not as many variations of conflict management as one might think. The main ways to manage disputes include coordination, integrative problem solving and confrontation.
In the case when it comes to corporate conflict management, these paths can be described as follows:
- Coordination - it was determined that if the clashes between the board of shareholders and the management of the corporation do not stop, then this threatens the general well-being of all parties to the conflict. A plan was developed to achieve a harmonious state, during the implementation of which the most acute elements of the cause of contradictions were overcome.
- An integrative solution to a problem is a hypothetical approach in this context, which suggests that there is a way to solve the problem that would satisfy all parties at once.
- Confrontation - an announcement at a general meeting about an existing problem with an attempt to discuss and minimize the conflict through its open speaking.
The first type of action in a corporate conflict most often leads to its successful resolution.
Settlement specifics
Strictly speaking, the specifics of corporate conflict settlement are mainly related to the resources owned by shareholders and corporations themselves. Such resources include power, money, authority, and so on. The more the subject (by the way, the parties to the conflict refers directly to him, besides them there are other participants in the dispute - instigators, accomplices) stock of resources, the more dangerous the situation becomes not only for himself and his opponent, but also for others. At least the consumers of their products, and in some cases the state, are drawn into the trade wars organized by the shareholders of large corporations (it is no coincidence that appeals to protectionist trade policies are often heard from the tycoons of China).
But the protracted conflicts are disadvantageous to all parties, because the stronger the enemy, the larger the bet. Coca Cola spends millions of dollars a year on the advertising war with the PepsiCo brand. In their case, reconciliation is hindered by the fact that they are actually monopolies in the beverage market, but companies with a lower status are much more maneuverable in matters of reconciliation and quarrels.
Total
Depending on the decisions made by all parties to the dispute in the course of attempts to resolve it, the outcome of a corporate conflict can be both successful and unsuccessful. A situation is considered favorable when resolving which the interests of all parties are satisfied. Dysfunctional - if all parties lose. The options lying between them are more or less desirable. From compromise to avoidance.
Speaking of corporate conflict, it is worth noting that it can end either with the strengthening of the internal structure of the corporation, or its complete destruction due to the destabilization of the internal environment, or an intermediate state - a crisis, the way out of which is directly related to the passage of the post-conflict state.