As people in their daily life, organizations are forced to face different conflicts. It is not surprisingly, since an organization it is an institution that is based on people’s cooperation and communication. These cooperation and communication are usually associated with different conflicts. The reason for it is the fact that people are different, with different characters and interests, in the end. That is why conflicts are just inevitable. Like any person, an organization should now what to do in conflict situations.
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They should know it, because such conflicts can cause the great costs for the organizations. Among these negative consequences we may differentiate the following ones: tension in relations between the employees of an organization; possibility of losses of qualified labor force; negative image in the employment context etc. In general, all the consequences eventually lead to the financial losses of an organization. That is why they should be avoided.
Alas only a few organization use standardized and universal approach to the conflict management. Majority of organization try handle every separate conflict, while they do not have a developed system of conflict management. Such approach is a simple waste of time and money. That is why any organization should implement an effective system of conflict management. Conflict audit is an integral element of such system.
First of all, we would like to provide definition of the term “conflict audit”. In our opinion, one of the most appropriate definitions is the following. “The conflict audit uses a collection of data to measure the cost of conflict to your organization” (Conflict Audit).
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Thus, this cost of audit measures the costs of the conflicts for an organization. As we have already mentioned, these costs in the end are reflected in an organization’s financial results. The main reason for it is that the employees’ productivity goes down because of the conflicts. However, they can have direct and indirect influence on the financial result of an organization.
For example, a person can make a mistake that causes direct financial losses because of the conflict. On the other hand, as we have already said conflicts lead to lower productivity of employees. This lower productivity results in lower output and, respectively, lower financial result. In this case we are talking about indirect consequences.
It only proves the fact that conflict audit is really useful managerial tool for any organization, because it provides essential information for organizational leaders, including top-managers and informal leaders. Of course, it is prerogative of formal leaders – managers – to use this information. Formal managers are responsible for the final results of an organization. That is why they are interested in normal performance of an organization and absence of conflict and that is why they stimulate conducting of conflict audit procedures.
In our opinion, this information should include three main elements – reasons for a conflict; costs for an organization, because of the conflict; the ways of improving situation and avoiding similar conflicts in the future.
Among the most common questions in the conflict audit we may differentiate the following ones:
- What is the organizations cost of stress related sickness? Once again we are forced to talk about the declined productivity, caused by a conflict. The conflict situations are usually a stressful situations, and stress is not a good sign for an employee’s productivity;
- What is the role of formal and informal leaders in an organization? Existence of informal leaders should be stimulated, because such leaders are able to unite people and settle conflicts?
- Whether employees or other members of an organization are able to compensate for the costs, caused by a conflict?
- How much time does staffs spend rumoring and gossiping? We have mentioned this question, because it is not surprise that rumors are among the most common reasons for conflicts among the employees;
- How are negative behaviors rewarded and how positive one is stimulated? It is important to find an optimal punishment for behavior that causes the conflicts;
Answering these questions is not only going to identify the financial measures of the conflicts, but also the reasons for the conflicts. We believe that exploring the most common reasons for the conflicts should become an integral part of conflict audit. In fact, it is quite natural process, because analyzing the consequences of the conflicts we are forced to learn their reasons.
Also conflict audit should show the ways of improving the situation and corporate climate in an organization. Among the most common ways of reduction the number and severity of conflicts that are based on the conflict audit we may differentiate the following ones:
- Stimulating of the leadership in team, because, as we have already mentioned, informal leaders have an ability to resolve the conflicts without formal procedures;
- Development of the principles of accountability and responsibility inside an organization;
- Stimulating of effective communication between the employees and other members of an organization;
- Development and improvement of mediation philosophy inside an organization. Special professionals can be invited to realize this goal;
- Rewarding behaviors that support conflict prevention. Mediation and negotiations should be stimulated.
These are the most common ways of preventing conflicts in an organization. However, we should understand that conflict is an integral pert of an organization’s daily life and that is why it is impossible to avoid it totally. That is why the main attention should be paid to minimizing the number of conflicts and their negative impact on an organization’s performance.
Thus, we can claim that the main goal of conflict audit is preventing of the conflicts, basing on analysis of their reasons and consequences. That is why we can claim that the final result of conflict audit and conflict management, in general, should be conflict resolution.
Conflict resolution is the process of resolving a dispute or a conflict, by providing each side’s needs, and adequately addressing their interests so that they are satisfied with the outcome” (Conflict Resolution Definition). Thus, simply speaking conflict resolution is resolving of a conflict.
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The organizations usually use information got from conflict audit in the system of the so-called conflict management. There are a lot of instruments and tools of conflict management. The first task is to identify the reasons and immediate consequences of a conflict. For this purpose organizations can use the so-called conflict resolution tables or different questionnaires to provide the general description of a conflict. Some examples of these tools are provided in the appendix to this research paper.
An organization can use its own knowledge and experience of conflict management in the process of development of its system. On the other hand, an organization can hire a special firm to perform conflict audit and conflict management, in general. These organizations have become very popular recently, especially in the circumstances of the global financial crisis. These circumstances are characterized with uncertainty and economic instability that create the best conditions for conflicts.
To conclude we would like to say the following. Any organization is forced to face different conflicts in its daily life. It is caused by the fact that organizations’ performance is based on people’s cooperation and communication. As we know, people have different characters and interests and that is why conflicts sometimes occur.
These conflicts are able to cause negative outcomes for an organization, direct and indirect financial losses. In general, they influence people’s mood, mental conditions and productivity. Lower productivity leads to lower output and, respectively, lower financial results of a company. That is why any organization should be interested in decreasing the numbers and severity of conflicts. Conflict audit as a managerial tool is able to provide such opportunity for an organization.
In our opinion, the main task of conflict audit is to provide an organization’s formal and informal leaders with information, needed to prevent the similar situations in the future, minimize the number of conflicts and their negative impact on an organization’s performance.
Conflict audit is an integral part of so-called conflict management. The conflict management system can be implemented by an organization itself or by special firms that have become very popular in recent years. As for us, it is caused by the global financial crisis that is associated with economic volatility and uncertainty.