Conflict Management - Ironing out Creases

Nipping it in the bud….

Stop conflict before it starts. Manage differences before they become conflicts. Prevent small conflicts from growing into costly large ones. Manage conflict strategically, rather than wait until a crisis develops. This is the new mantra of corporates trying to pour oil over troubled waters whenever there is the remote possibility of a spark. Companies worldwide are waking up to the concept of conflict management. Organisations comprise of humans, and the human brain is more susceptible to anger, in these times of stress riding high.

Train managers and staff to resolve conflicts early, rather than pay attorneys and other expensive professionals to deal with them later.80% of workplace conflicts that reach the formal dispute resolution system could have been resolved early, quickly, and inexpensively . . . if the employees directly involved had known how.

The bottom line is: Save money. Reduce risk. Improve decision quality.

Clash of the Titans… 

The recent family dispute that seeped out of the Ambani residence had both the brothers up in arms and the nation watched as the $22.5 billion Reliance Group cake was sliced up. A declaration came from the matriarch Kokilaben that an “amicable resolution had been brokered among her two sons. Thereafter, Anil announced his plans for his share of the empire. “For us -- for me especially -- this is a new beginning,” he said. “This is a car without a reverse gear; we are only going forward.”

The deal involves some staggering numbers. Mukesh, 48, will keep the group's petrochemicals flagship, Reliance Industries Ltd., and the smaller Indian Petrochemicals Corp., which together bring in close to $19 billion a year in revenue. Anil, 46, will get power company Reliance Energy, telecom and broadband purveyor Reliance Infocomm, and finance company Reliance Capital. In a complex handoff whose details haven't been confirmed, the are expected to swap their existing shareholdings in each other's companies, with Anil getting an estimated $1 billion in cash to equalize the division.

Line of Control… 

Following the settlement, everyone from the Finance Minister down to the smallest customer was happy the battle had not torn Reliance Industries -- the keystone of the group -- apart. Reliance is India's most influential business, with 3.3 million shareholders. About 30% of shares in the group's companies are held by foreigners. Its revenues make up 3.5% of the economy.

The resolution of the conflict is certainly cause for celebration in India's markets. But a larger question hangs over the deal: Now that they have their own companies to run, what direction will the take?

Ironically, the latest accusations against Reliance have come from the family itself. During the feud with his brother, Anil Ambani hurled allegations of corporate-governance violations against Reliance Industries and Reliance Infocomm Ltd., then run by Mukesh. Among them: charges that funds were fudged. Mukesh denied any impropriety. But the accusations emboldened the Department of Telecommunications and the two state-owned telecom operators to take Infocomm to court, charging that the company had improperly routed international calls as local, costing them $100 million. Reliance Infocomm settled the case by agreeing to pay the missing tariffs, plus a $30 million penalty.

Now, Anil, the prime accuser, is the new owner of Infocomm. Will the government get to the bottom of his accusations? Apparently not. The day after the settlement was made public, India's Finance Minister, P. Chidambaram, said that in such family situations, statements are made in the heat of the moment. Consequently, he added: “If there is any specific violation or complaint, we can look into it. [But] after this settlement, I don't think there is any need for an inquiry.”

Signing the Peace Treaty

The government's decision means it's up to the Ambanis themselves to honor the new rules of corporate behavior. First the brothers have to disentangle their respective pieces of the empire. Mukesh Ambani's petroleum business, comprising oil, gas, and petrochemicals such as polyester, is hugely profitable, spewing out $3 billion in cash every year. Anil has the smaller share of the business -- but the parts with greater growth prospects, say analysts.

To accomplish their goals, the brothers have to attract the best professional talent available and keep shareholders' faith. The vast majority of Reliance stakeholders still remember Dhirubhai Ambani, who created billions in wealth for them. For now these investors are willing to extend their goodwill to his sons. It's an opportunity too great to be squandered.

Managing Conflict…. 

Personal bickerings set aside, the need of the hour is to iron out all the creases, respect individual domain and dish out the best to the customer.

The infamous Ambani feud has left an ugly scar on the corporate canvas of bilateral and consensual resolving of disputes.

 Companies spend millions of dollars every year in insurance costs and legal expenses to resolve disputes with employees, clients and business partners. Productivity, retention of employees and customers, and protection of key business initiatives are all at risk if there is no internal system for early, collaborative resolution of conflict. 

We all encounter professional conflict - but whether it's owner disagreements, personnel issues, vendor matters, client concerns or competitive situations, our professional lives are filled with opportunities to manage it.

However, most of us, given the choice, will shy away or ignore conflict rather than deal with it. Why? More than likely, it's because conflict isn't fun - or even comfortable. Perhaps it's also because we might think that managing conflict is expected to be an innate skill - one that we don't have. But if that were the case, there would not be a plethora of business courses, Web sites, books and other content available to help us develop our conflict management abilities. Most of us feel that professional conflict is negative; we see it as draining our energy, reducing our focus, causing discomfort and hostility

Harnessing energy in the right direction…

Conflicts are a natural and inevitable part of people working together, sharing diverse thoughts, concerns, perspectives, and goals. A manager will have to deal with conflict situations both as a mediator (to help resolve conflicts between others) and as a participant (when in conflict with someone). These situations can be complex and difficult to manage—such as an ongoing personality clash with a coworker—or simple and easy to manage—such as two associates disagreeing over a meeting agenda.

Unfortunately, most conflicts are treated as destructive confrontations that should be avoided or resolved as quickly as possible. In reality many provide an important opportunity to improve business results.

Hard to believe….conflict a good thing? Yes. Disagreements and differing points of view, when managed properly, are essential to an innovative workplace. 

For the most part, conflicts are not big, emotional blowouts or scenes of physical violence—although these can and do occur, especially in workplaces in which conflict is not managed well. They are simply creases on the corporate work fabric and need to be ironed into smoothness…before the creases crumple any further.