CEO leadership strategies for managing organizational conflict and change

¶ … job of the CEO of a company is to show leadership not just when everything is going smoothly but when there is conflict, when there is uncertainty, and when the organizational situation enters into a situation with complexities that are new and unsettling. This paper references the existing scholarly literature in terms of providing ideas, strategies -- to be used as organizational tools -- that are available to the alert, competent CEO.

"Organizations are increasingly subject to conflicting demands imposed by their institutional environments. This makes compliance impossible to achieve, because satisfying some demands requires defying others… [what is needed is a] more precise model of organizational response that takes into account intraorganizational political processes…"

(Pache Essec, et al., 2010, p. 455).

Conflict Resolution Strategies and Organizational Citizenship Behavior

Samuel O. Salami (University of Ibadan, Nigeria) explains that in order to resolve conflicts, some organizations need counseling by organizational psychologists in order that the proper role of Emotional Intelligence (EI) has a presence. The story that Salami tells is that due to the restructuring and reorganization of public projects in Nigeria -- and the organizational changes that resulted from those projects -- a "retrenchment" of "many workers" took place (Salami, 76). The retrenchment had what Salami calls "…grave psychological consequences" for the workers that were laid off and those who survived the "restructuring" (think downsizing).

The author provides five potential strategies for resolving this conflict: confronting or collaborating; withdrawing/avoiding; forcing/competing; smoothing; and compromising (77). The two strategies that offer the most hope for a positive outcome are confronting/collaborating and compromising, Salami reports, but what must not be left behind is the concept of emotional intelligence. Trait EI, as a tool for a CEO, is: a) the "ability to perceive accurately, appraise, and express emotion"; b) the ability to "access and/or generate feelings when they facilitate thought"; c) the ability to "understand emotion and emotional knowledge"; and the ability to "regulate emotions" in order to promote intellectual and emotional growth (Salami, 78). Hence, if the CEO is property trained (along with qualified managers) in EI tools, he or she can certainly help individuals adjust to the conflicts resulting from the disruption and negative emotions from downsizing (whether it be in Nigeria or Norfolk, Virginia.

The Influence of Relational Maintenance Strategies Among Coworkers

This study references the phrase "relational maintenance behaviors," which refers not just to the behaviors between coworkers but to the maintenance of positive dynamics therein (Madlock, et al., 2012, p. 22). One of the salient points here is that workers "interpersonal needs" can be provided simply through good communication at work. In fact there are some scholars who believe relational maintenance "messages" are exchanged by some workers in order to "fulfill interpersonal needs" (Madlock, 22).

Given the right tools to understand and encourage positive relational maintenance behaviors among his or her employees, a CEO will have a leg up on a better work culture. Madlock asserts that the relational maintenance in the workplace "…needs to be expanded beyond the supervisor-subordinate" to include all workers. All this is based on the "theory of interpersonal needs (Shutz, 1958, 1966), which posits that: a) workers need to include others in activities, and to be included themselves; b) workers have the need to "control others and be controlled"; and c) workers need to give affection to others, and in return they expect and need to get affection from others (Madlock, 24-25). Managers who understand those dynamics are likely to be more helpful in fostering those rational maintenance strategies for the health of the company.

Organized Justice and Perceptions of Conflict Management

In the journal Educational Sciences: Theory & Practice, researcher Habib Ozgan discusses a study using 212 teachers from 46 high schools in Gaziantep, Turkey; the purpose of the study was to determine the organizational confidence that the teachers had for their managers. A key element in the results of the survey involved whether a sense of "organizational justice" was present in the schools. The succinct results of this survey are as follows: a) the organizational commitment of the teachers relates directly to the strategies teachers see used in "…conflict management, organizational justice, organizational confidence," and the positive or negative evaluation of the manager in charge; and b) the organizational confidence of the teachers depended upon the evaluation of the manager and the manager's strategies of conflict management, organizational justice, organizational commitment and organizational confidence (Ozgan, 2011, p. 243).

The bottom line in terms of tools that need to be available for a supervisor: when the rules are applied fairly, and when trust is established (through organizational commitment to honesty and openness), a positive relationship exists between teachers and their supervisors.

Challenging the Norm of Self-Interest

Adam M. Grant and Shefali V. Patil -- professors at the University of Pennsylvania -- present a scholarly article related to the tendency of some work units to develop "…norms of self-interest" that can inhibit cooperation (Grant, et al., 2012, p. 547). These norms of self-interest may come about because "task interdependence is low," which is to say there is an absence of "helping behaviors" between employees (Grant, 547). Helping in the workplace after all is a way in which many positive things take place: "interpersonal harmony"; the building and maintaining of positive relationships; cooperative efforts that lead to task completion (Grant, 547). And the helping behaviors include: "offering care and support to coworkers with personal problems"; "performing favors"; "expressing compassion in response to pain and suffering"; and simply "cooperating with peers" (Grant, 547). But, when these helping behaviors decline or are gone for any reason, the norm of self-interest creeps in, according to Grant.

It is difficult to break down the self-interest norm when it takes hold, Grant continues on page 548. It becomes a matter of "I'm looking out for me," rather than the altruism that had existed before. How does a work group break out of the self-interest mode? Grant asserts that the best possible outcome is for group members to handle the repair themselves. After all, uncertainty leads bright group members to "search for explanations, make attributions, and resolve doubt" (Grant, 550). This in turn leads to challenging other group members to "develop a new logic of appropriateness," Grant continues.

People in groups feel guilty vicariously due to the actions of others in their group; and when members do feel guilty they are very likely to "avoid future feelings of guilt by increasing their levels of helping" (Grant, 552). Hence, by modeling those increased levels of helping (whether deliberate or unintentional) shows others what to do to get out of the present stall. CEOs need to be thoroughly familiar with the dynamics behind the self-interest slump that any group can fall into, in order to understand the need for more leadership (helping) within that group.

Group-Level Organizational Citizenship Behavior

A scholarly article in the Journal of Organizational Behavior references a study on organizational citizenship behavior (OCB) that was based on the data from 62 work groups that represented a "variety of industries" (Choi, et al., 2010). The findings from this research showed that relationship conflict and conflict during the performances of tasks were related to negative group level behavior and performance (GOCB); however, "task conflict increased GOCB" but relationship conflict decreased it (Choi, 1032). .

The bottom line in terms of understanding this research boils down to the fact that there is a difference between people-to-people conflict ("relationship-based" conflict) and task-related conflict. The authors use "faultlines" to describe differences that are potential conflicts. In the research, the authors report that subgroups in a workplace that have "strong faultlines" -- based on "…age, gender, and race" -- are likely to "stimulate social cognitive processes" such as stereotyping, that can produce "hostility" and "anxiety," that can produce relationship conflict (Choi, 1036). On the other hand, subgroups that have "strong faultlines involving task-related characteristics" -- like the amount of time a person has worked there (tenure), basic experience or expertise -- have the opportunity to promote "information seeking" and "sharing" and even "learning" among other members of the subgroup (Choi, 1036).

To put it succinctly, faultlines that are set in motion by "different demographic attributes" can be expected to create or increase different kinds of conflict. The tools that a CEO needs in order to deal with these variations in conflict styles are related to an understanding of the concepts that Choi and colleague have presented. In other words, understand and be fully aware of the demographics of the subgroups that are working in the organization.

Furthering Organizational Priorities with Less Than Truthful Behavior

An article in the Journal of Business Ethics (Keep, 2009) the author points to the fact that notwithstanding codes of ethics that businesses attempt to practice, employees still view "less than truthful behaviors to be a significant problem" in organizations. In other words, companies can create codes of ethics and wholeheartedly intend to live by them, but studies show that unethical behavior is present in many organizations notwithstanding codes of ethics. First of all, it is clear that employees are aware of their company's ethical guidelines. For example, one study showed that 77% of respondents in an American organization reported "that their organization had a well-communicated code of ethics" (Keep, 81).

But another study in the U.S. found that 76% of the participants in a survey "…knew of a colleague or manager who had violated the law or a company standard within the past 12 months" (Keep, 82). Hence, no matter that a code of ethics is publicized within an organization, employees apparently witness unethical behaviors routinely, if the research by Keep is to be believed. So, why to people lie in the workplace -- and what is their motivation? Keep asserts that employees (including managers) lie because "it often goes undetected"; and they lie because they are trying to reach "ambitious goals" and they are under great pressure to "perform" (Keep, 83). In this research Keep sent out 266 surveys to working adults in the northeastern United States (64 came back completed). The data showed that the "…overwhelming percentage of stories reported…[that] lies were told to subordinates (14 of 20)" and lies were told to "superiors" (4 of 20); lies were also told to "peers" (3 of 20) (Keep, 84). This evidence shows the author that employees are aware of unethical behaviors in the organization.

Some of the stories told by employees involved did not contain direct lies, but a lack of openness and truthfulness. For example, in order to avoid conflict or a confrontation one company did not tell employees that the company was involved in outsourcing (presumably to reduce costs). This was unethical because it was less than truthful, Keep explains, and although the outsourcing was intended to improve the bottom line (and further priorities), when employees found out they lost confidence in the company and they began to see the code of ethics was worthless. The message for managers: honesty is always a very powerful and positive tool.

Trust and Collaboration in the Aftermath of Conflict

A peer-reviewed article in the Academy of Management Journal offers tools in terms of possible issues regarding contract conflicts in interfirm relationships. In the first place, contracts can be approached from the point-of-view of strict "control" -- and they can also be approached from a position of "trust" (Malhotra, et al., 2011, p. 981). This is not news to executives familiar with organizational dynamics, but the authors of this piece have taken the time to reference 150,000 pages of specific details relating to 102 business disputes, and their findings are worthy tools for today's managers. The authors posit, based on their empirical findings that "control provisions increase competence-based trust," but control provisions reduce "good-will-based trust" and can lead to less collaboration (981). On the other hand, by using "coordination provisions" the CEO (or other managers) "…increase competence-based trust," which can lead to the "increased likelihood of continued collaboration" (Malhotra, 981).

By carefully scrutinizing the 150,000 pages of those 102 business disputes the authors discovered that the higher the number of "control provisions" in contracts, the "lower the likelihood of continuing the relationship" (Malhotra, 990). Also, the presence of good-will-based trust and competence-based trust "…positively impact the intent to continue…" in the collaborative relationship (Malhotra, 990). In other words, when CEOs enter into contracts with a vendor or other interfirm players, too many control provisions built into contracts do not tend to support continued collaboration and cooperation.

How the Chinese Deal with Inter-Organizational Conflict

A competent CEO learns the value of listening to advice from his executive peers and from the workforce in his organization -- which is an indication of moral behavior. Hence, he or she will be alert to the offer of possible solutions to tension, misunderstandings and conflict in his company -- no matter what the source of the input. The Chinese have their own way of handling workplace conflict, and it is worthy of review by executives in other nations. To wit, a peer-reviewed article in the Journal of Business Ethics reflects that indeed the network of stakeholders can be complex and require "inter-organizational collaboration" (Mo, et al., 2012, p. 121). And within that context, there can be conflict; personalities and ideas can clash, given human nature. The question is, what tools should management apply to calm the conflict before it becomes a festering corporate sore?

Mo and colleagues suggest in the first place, when Chinese management is known for "moral characteristics such as honest and trustworthiness," that leadership can help to promote, in a positive way, "ethical behavior" (121). The issue here as the authors describe it is that since the existing literature regarding "ethical leadership" is based "exclusively" on the Western culture, it doesn't always translate into other cultural contexts. For example, in the Chinese Confucian culture, the networks within an organization depend on "…reciprocity, integrity, and the highest individual ethical standards" (Mo, 122). Formal structures are bypassed in Chinese corporate responses to conflict, Mo continues, hence good information can be more efficiently shared in places where it will make the greatest impact. Part of the reason that information can bypass the bureaucratic system embraced in the West is that in the Confucian cultural milieu the CEO (and other executives) win others over "by virtue" -- not by brow-beating or punishment (Mo, 122). In summary, the Chinese belief in terms of dealing with conflict (within stakeholders) is that employees "…adjust their behavior and decision-making in accordance with the common ethical values and images set by leaders" (Mo, 127). It sounds almost too simple, given the dynamics at work in large companies, but Mo asserts that "…sound cooperating relationships" can only be maintained and nurtured with "mutual understanding and support" perceived and practiced by both sides of any interaction (Mo, 127).

In conclusion, notwithstanding all the potential solutions to workplace conflict, the one constant that any alert CEO should understand is that both management and employees need to keep an "open-minded attitude" and be "willing to ignore power issues" (Phillips, et al., 1979). Indeed these are not new ideas (note this scholarly article was published thirty-three years ago), but they are time-tested approaches to problem solving in any environment. Phillips writes that a director of the engineering department in a company faced a conflict over the "type of tracking system to be installed"; the finance director wanted a system that cost less and a third director had specifics in mind that were not part of the engineer's proposal (Phillips, 78).

How did they resolve the conflict? Each manager agreed to modifying his proposal, an open and objective discussion took place, and the work got done while the conflict was resolved. Clearly, not every company is going to be able to resolve conflicts (big or small) as simply as this group did. But it behooves management (especially CEOs) to become familiar with all the existing strategies with reference to uncertainty, conflict, and other organizational complications.