MGT504 - Organization Theory and Design - Lecture Handout 39

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Inter group conflict requires three ingredients; group identification, observable group differences, and frustration. First, employees have to perceive themselves as part of an identifiable group or department. Second, there has to be an observable group difference of some form. Groups may be located on different floors of the building, members may have gone to different school, or members may work in different departments. The ability to identify oneself as a part of one group and to observe differences in comparison with other groups is necessary for conflict.

The third ingredient is frustration. Frustration means that if one group achieves its goals, the other will not; it will be blocked. Frustration need not be server and only needs to be anticipated to set off inter-group conflict. Intergroup conflict will appear when one group tires to advance its position in relation to other groups. Inter- groups conflict can be defined as the behavior that occurs among organizational groups when participants identify with one group and perceive that other groups may block their group’s goal achievement or expectations. Conflict means that groups clash directly, that they are in fundamental opposition. Conflict is similar to competition but more severe. Competition means rivalry among groups in the pursuit of a common prize, while conflict presumes direct interference with goal achievement.

Inter-group conflict within organization can occur horizontally – across departments – or vertically – between different levels of the organization. For example, the production department of a manufacturing company may have a dispute with quality control because new quality procedures reduce production efficiency. Teammates may argue about the best way to accomplish tasks and achieve goals. Workers may clash with bosses about new work methods, reward systems, or job assignments. Another typical source of conflict is between groups such as unions and management or franchise owners and headquarters. Franchise owners for McDonald’s Taco Bell, Burger King, and KFC have clashed with headquarters because of the increase of company – owned stores in neighborhoods that compete directly with franchises. The FedEx pilots’ union has fought with the company over wage increases, working hours, and control over scheduling. Conflict can also occur between different divisions or business units. For example, a conflict emerged between the two sides of Andersen Worldwide – Andersen Consulting (Management consulting) and Arthur Andersen (Accounting services) – because the two groups found themselves going after the same business.


Some specific organizational characteristic can generate conflict. These sources of inter-group conflict are goal incompatibility, differentiation, task interdependence, and limited resources. These characteristics of organizational relationships are determined by the contextual factors of environment, size technology, strategy and goals and organizational structure, which have been discussed. These characteristics, in turn, help shape the extent to which a rational model of behavior versus a political model of behavior is used to accomplish objective.

Goal Incompatibility: Goal incompatibility is probably the greatest cause of inter-group conflict in organizations. The goals of each department reflect the specific objectives members are trying to achieve. The achievement of one department’s goals often interferes with another department’s goals University police, for example, have a goal of providing a safe and secure campus. They can achieve their goal by locking all buildings on evenings and weekends and not distributing keys. Without easy access to buildings, however, progress toward the science department’s research goals will proceed slowly. On the other hand, if scientists come and go at all hours and security is ignored, police goals for security will not be met; Goal incompatibility throws the departments into conflict with each other.

The potential for conflict is perhaps greater between marketing and manufacturing than between other departments because the goals of these two departments are frequently at odds. Marketing strives to increase the breadth of the product line to meet customer tastes for variety. A broad product line means short production runs, so manufacturing has to bear higher costs. Other areas of goal conflict are quality, cost control, and new products. Goals incompatibility exists among departments in most organization.

Differentiation: Differentiation was defined as “the differences in cognitive and emotional orientations among managers in different functional departments.” Functional specialization requires people with specific education skills, attitudes, and time horizons. For example, people may join a sales department because they have ability and aptitude consistent with sales work. After becoming members of the sales department, they are influenced by departmental norms and values.

Departments or division within an organization often differ in values, attitudes, and standards of behavior and these cultural differences lead to conflicts. Consider an encounter between a sales manager and an R&D scientist abuts a new product.

The sales manager may be outgoing and concerned with maintaining a warms, friendly relationship with the scientist. He may be put off because the scientist seems withdrawn and disinclined to talk about anything other than the problems in which he is interested. He may also be annoyed that the scientist seems to have such freedom in choosing what he will work on. Furthermore, the scientist is probably often late for appointment, which, from the salesman’s point of view, is no way to run a business. Our scientist, for his part, may feel uncomfortable because the salesman seem to be pressing for immediate answers to technical questions that will take a long time to investigate. All the discomforts are concrete manifestations of relatively wide differences between these two men in respect to their working and thinking styles.

Cultural differences can be particularly acute in the case of mergers or acquisitions. Employees in the acquired company may have completely different work styles and attitudes, and a “we against them” attitude can develop. One reason for the failure of many mergers is that although managers can integrate financial and production technologies, they have difficulty integrating the unwritten norms and values that have an even greater impact on company success. The taking the lead box describes ho GE Plastics overcame cultural difference after acquiring rival Borg- Warner Chemicals.

Task interdependence: Task interdependence refers to the dependence of one unit on another for materials, resources, or information. As described, technology, pooled interdependence means little interaction, sequential interdependence means the output of one department goes to the next department; and reciprocal interdependence means department mutually exchange materials and information.

Generally, as interdependence increases, the potential for conflict increase. In the case of pooled interdependence, units have little need to interact. Conflict is at a minimum. Sequential and reciprocal interdependence require employees to spend time coordinating and sharing information. Employees must communicate frequently, and differences in goals or attitudes will surface. Conflict is especially likely to occur when agreement is not reached about the coordination of services to each other. Greater interdependence means departments often exert pressure for a fast response because departmental work has to wait on other departments.

Limited Resources: Another major source of conflict involves competition between groups for what members perceive as limited resources. Organizations have limited money, physical facilities, staff resources, and human resources to share among department. In their desire to achieve goals, groups want to increase their resources. This throws them into conflict. Managers may develop strategies, such as inflating budget requirements or working behind the scenes, to obtain a desired level of resources. Resources also symbolize power and influence within an organization. The ability to obtain resources enhances prestige. Departments typically believe they have a legitimate claim on additional resources. However, exercising that claim results in conflict. For example, in almost every organization, conflict occurs during the annual budget exercise, often creating political activity.


The sources of inter-group conflict are listed in previously the degree of gal incompatibility, differentiation, interdependence, and conflict over limited resources determines whether a rational or political model of behavior is used within the organization to accomplish goals. When goals are in alignment, there is little differentiation, department are characterized by pooled interdependence, and resources seem abundant, managers can use a rational model of organization, as outlined. as with the rational approach to decision making described earlier, the rational model of organization is an “ideal” that is not fully achievable in the real world, though managers strive to use rational processes whenever possible. In the rational organization, behavior is not random or accidental. Goals are clear and choices are made in a logical way. When a decision is needed, the goal is defined, alternatives are identified, and the choice with the highest probability of success is selected. The rational model is also characterized by centralized power and control, extensive information systems, and an efficiency orientation. The opposite view of organizational processes is the political model, also described. When differences are great, organization groups have separate interests, goals and values. Disagreement and conflict are normal, so power and influence are needed to reach decision. Groups will engage in the push and pull of debate to decide goals and reach decisions. Information is ambiguous and incomplete. The political model particularly describes organizations that strive for democracy and participation in decision making by empowering workers .Purely rational procedure do not work in democratic organizations, such as learning organizations.

Both rational and political processes are normally used in organizations. In most organizations, neither the rational model nor the political model characterizes things fully, but each will be used some of the time. Mangers may strive to adopt rational procedures but will find that politics is needed to accomplish objective. The political model means managers learn to acquire, develop, and use power to accomplish objectives.

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