Management Magazine
management

Why too much harmony leads to performance decline

BY DR FRANCIS FONDO

The interactionist view of conflict does not propose that all conflicts are good.  Rather, some conflicts support the goals of the organisation and improve its performance.

The role of conflict in groups and organisations has been grossly misunderstood by managers.  One school of thought has argued that conflict must be avoided at all costs – that it portends a malfunctioning within teams working in organisations.  This view, is referred to as the traditional view by Robbins and Judge in their book Organisational Behaviour.

Views on workplace conflict

Traditional view was in the early 20th century and it looked upon conflict negatively and used it synonymously with violence, destruction, and irrationality to reinforce its negative connotation.  Conflict, by definition, was harmful and was to be avoided at all costs. This thinking still has many followers among managers today who believe that there should always be harmony in the organisation.  Ideas from above must be taken as sacrosanct and should not be questioned.  This harmony is reinforced further by such fallacious terms as leading from the front and the leader knows everything!

There is a second view of conflict – human relations view – which sees conflict as a natural occurrence in human beings and is therefore inevitable. This school of thought believes that conflict cannot be eliminated and there are even times when it can benefit a group’s performance.

The modern view of conflict (interactionist view) does encourage conflict. A harmonious, peaceful, tranquil and cooperative group is prone to becoming static, apathetic and non-responsive to needs for change and innovation. The major contribution of the interactionist view, therefore, is encouraging group leaders to maintain an ongoing manageable level of conflict and creativity.   

Harmony can cause corporate demise 

Consider the case of Arthur Anderson. This firm of accountants was at one time one of the global Big 5 and became well known for its insistence that its employees abide by rigid, constraining rules of behaviour and development. Its values were based on obedience to company rules and standard operating procedures. On the surface, the insistent ways in which the company demanded its employees to follow its values and norms would seem sound practice for a company whose business is to accurately measure and account for the resources used by its clients.  Accounting is a relatively precise science, the last thing an accounting company needs is for its employees to practice “creative” accounting.

In 2001, it became clear that some of Arthur Anderson’s top management had been systematically instructing their subordinates, to overlook or ignore anomalies in its client books in order to obtain large consulting fees and maintain the client business – and to shred documents that revealed its dealings with Enron before government regulators could examine them.  Apparently, Arthur Anderson’s culture was so strong it had an almost cult-like effect on its employees, who were afraid to question what was going on because of the enormous status and power the directors wielded. To cut a long story short, Arthur Anderson closed doors when it became clear that as external auditors of Enron, they had abetted the collapse of one of the biggest US conglomerates in US history.

High-level extravagance

A more recent case of excessive corporate harmony which this time resulted in near collapse of a corporate giant is that of General Motors, the US giant Auto-maker.  A lack of functional conflict among General Motors management in past decades resulted in concessions to union demands for generous health benefits and pensions. In due course, burdened by health costs that GM provided to more than 1 million employees, retirees and dependants, the automaker had to be bailed out in 2009 to avoid bankruptcy.  Such was the extravagance at a high level that even to go to Washington to obtain a financial bail-out from the American exchequer, the top Management flew in a corporate jet!  As a result of the crisis, the automaker has since eliminated thousands of jobs, as well as closing assembly plants as part of a cost-cutting strategy.

HR flop

Many of GM’s problems from the late 1960s to 2009 could be traced to a lack of functional conflict.  GM hired and promoted individuals who were ‘yes-people’, loyal to GM to the point of never questioning company actions.  Many, like GM investors Kirk Kekorian, fault GM management’s conflict aversion for its acceding to the UAW’s demands for generous health care and pension benefits (GM’s labour costs used to average USD73.26 per hour, which is much higher than that for its Japanese competitors).  

Functional and dysfunctional conflict

The issue of encouraging conflict should not be misunderstood. The interactionist view of conflict does not propose that all conflicts are good.  Rather, some conflicts support the goals of the organisation and improve its performance. These conflicts are functional, constructive forms of conflict.  A good example is the perennial conflict between the sales department and the credit controller in which sales personnel will want to sell more by giving extended credit. These are functional conflicts which are normally resolved by corporate policy. However, there are other conflicts which hinder team performance. These are dysfunctional conflicts which hover around personality differences between organisational members. Specifically, relationship conflicts are almost always dysfunctional. These relate to friction and interpersonal hostilities arising out of personality clashes resulting in the decrease of mutual trust and understanding, which in turn hinders completion of organisational tasks.   

Given the fiercely competitive global economy, organisations that don’t encourage dissent may find their survival threatened. 

Dr. Francis Kalama Fondo is a member of KIM (MKIM), ICPAK and ICPSK. Email: francisfondo@gmail.com

Related posts

An expert’s view of Kenya’s healthcare

kim_mag

How data analytics can boost businesses

Derrick Vikiru

Boards should make diversity and inclusion top priority

kim_mag