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Man org session 8 org conflict power and politics 19th july 2012


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Man org session 8 org conflict power and politics 19th july 2012

  1. 1. MANAGING ORGANIZATIONS Session 8: Organization Conflict, Power & Politics Sourav MukherjiPGP 2012-14 Section C & E Associate Professor of Organization & StrategyTerm 1:June-September 2012 Indian Institute of Management Bangalore, India
  2. 2. 2CASE DISCUSSION: MERGER (MIS)MANAGEMENT What went wrong in the merger between Fraser Dow (Dow) and Burnett & Stone (B&S)? Who were the key players and what roles were they playing? Were there mistakes committed by different players and organizations? Why did they commit such mistakes? What would you have done differently if you were in their positions? © S Mukherji
  3. 3. 3TALE OF TWO MERGERS AND SOMETHING IN BETWEEN Merger between GFI Rapid decline in B&S takes over, drives & KW failed Dow’s business rapid integration performance Mismatch of expectation Assumption that B&S taking over a troubled arising out of difference “international size company with a history of in size and nature of was irrelevant” resisting merger business turned out to be wrong Commitment to business advisory GFI India independent services questionable. Greater and successful business, Expectations that formalization necessary for audit not taken into confidence clients will stick to firm, ambition to scale during merger decision Dow was belied Strikes deal with Wadhwa, gets Roots of apprehension Billing loss and Dinshaw to put the house in order, about large international employee attrition take-it-or-leave-it for Dow audit firm sown in GFI employees (India) psyche Wadhwa desperate to be bailed out, changes GFI India declares tactics independence, becomes Dow Fraser © S Mukherji
  4. 4. 4PLAYERS: WHAT THEY DID AND WHAT THEY COULD HAVE Over-dependence on Wadhwa Establish credibility and confidence before partners from B&S. Utilize goodwill from Failed to anticipate realities both within customers to prove his utility to the company and outside the organization R Maitra Make efforts to establish rapport with Dinshaw Did not play politics or make any effort to establish communication with new Set clients’ expectation about potential changes partners Mistake in anticipating the power of an Could have acknowledged mistake and explained international brand - overestimated own realities of business to other employees. capability in client retention R Wadhwa Maintained transparency Did not take into confidence others during deal with B&S. Left others in the lurch Centralized operations, assumed complete Could have taken a more humane approach to charge of the integration process integration in order to retain committed and talented individuals Dinshaw Exuded a “could not care less” attitude that alienated Dow employees © S Mukherji
  5. 5. 5 Why do conflicts happen in organizations?  Are conflicts desirable?  Are conflicts inevitable ?  Are conflicts structural or are they behavioral? What is the relationship between conflict, power and politics in organizations?Conflicts are inherent in organization design.When conflicts are not / cannot be resolved rationally, but are dealtwith by overt or covert usage of power, a political process is said to be operating.In common parlance, politics refers to self serving behaviour that often involvesdeception and dishonesty.In organization theory, politics is an organizational process that involves usage of powerto obtain preferred outcome when there is uncertainty or disagreement about choices © S Mukherji
  6. 6. 6ORGANIZATION DESIGN INHERES SITUATIONS FOR CONFLICT Organizations distribute authority and responsibilities  Goal incompatibility  Differences over purpose of the organization  Differences over means to achieve the stated purpose  Specialization and differentiation  Departments are created to leverage benefits of specialization  Departments carry sub-goals  Sub-goals can be incompatible  Resource limitation and interdependencies All the above are likely to increase under conditions of uncertainty or when the organization is going through major changes © S Mukherji
  7. 7. THERE ARE SEVERAL SOURCES OF POWER IN ORGANIZATIONS 7 Potential / ability of an individual or organizational unit to make another individual or another organizational unit to do something that they would not have otherwise done Power typically arises in situations of resource dependency Source of resource dependency …or they may be a result of can be hierarchical… individual competencies or characteristics Formal position / authority to take decisions, reward or punish Expert power / non-substitutability people Referent power – respect , Control of key resources – finance, admiration information, people Building networks, maintaining Proximity to powerful people relationships Network centrality Ability to cope with uncertainty / Strategic contingencies control of critical information © S Mukherji
  8. 8. THERE ARE FIVE KEY DRIVERS OF POLITICAL 8PROCESSES IN ORGANIZATIONS Uncertainty Pressures of time Incomplete information Hierarchy & Opportunistic differentiation behaviour Conflict Self serving behaviour Exercise of power Biases Resource Bounded dependency rationality / predictive irrationality © S Mukherji
  9. 9. 9Should you enhance the politicalprocess in organizations, orshould you try to reduce it ?When, why and how will you increasethe political process?When, why and how will you reduce thepolitical process ? © S Mukherji
  10. 10. 10Should you enhance the political You might not be in a position toprocess in organizations, or control the political processshould you try to reduce it ? Yet, you cannot avoid beingWhen, why and how will you increase part of it in organizationsthe political process? Being aware of the process andWhen, why and how will you reduce the its potential levers will ensurepolitical process ? that you are not adversely impacted by it Even if you do not play the game, be aware of the rules of the game and who are the players © S Mukherji
  11. 11. 11Should you enhance the political When chances to arrive at decisionsprocess in organizations, or through rational processes are lowshould you try to reduce it ? because of uncertainty & complexityWhen, why and how will you increase Build coalitions, co-opt, reach outthe political process? to people through informal networksWhen, why and how will you reduce thepolitical process ? Increase expertise, legitimacy to improve your position of power, gather approval Bargain, negotiate, make direct appeals – make needs and goals explicit © S Mukherji
  12. 12. 12Should you enhance the political Always! If you have a choice – itprocess in organizations, or benefits organizations in the mediumshould you try to reduce it ? to long term, make majority of employees satisfiedWhen, why and how will you increasethe political process? Increase transparencyWhen, why and how will you reduce the Bring out conflict in the open,political process ? encourage dissent and debate Practice member rotation Focus on integration devices, shared mission, superordinate goals, cross functional tasks © S Mukherji