The CEO of Personal Investments - Case Study Example

HUMAN RESOURCE MANAGEMENT Analysis of HRM Situation at Personal Investments Pty Ltd Name Course Instructor 21 September 2012 Executive Summary Conflicts in organisations are inevitable, especially in the dynamic business environment in modern world. Dan Richardson, CEO at Personal Investments Pty Ltd, where conflicts emerge after Tabitha Rose is hired as a manager in the organisation. Tabitha Rose is keen on implementing an aggressive investment approach as compared to traditional investment model in the organisation that favours low-risk, but secure investments. Different approaches of conflict management are discussed in relation to the PI case. Notably, it is established that successful conflict management strategies are those that facilitate discussion and debate over the conflict, open communication, compromise or consensus and rotational of responsibilities. On the other hand, less successful are the ones that avoid, ignore or underestimate the conflict. Further analysis of conflicts at PI shows that the conflicts are complex and precipitated by dynamic situations. A contingency theory of conflict management is seen to be appropriate in the pi case. Specifically, it is it is recommended that PI adopts an integrated and compromised conflict management approach. The use of this strategy involves concerned parties being open to the issue at hand, exchanging information, looking for the appropriate alternatives they can use to solve the issue, and examination of their existing differences that enable both parties to reach an effective solution that is acceptable to both parties. Besides, conflict management plan has to be developed that encourages clear and continuous participative communication among stakeholders to avoid conflicts in the future. Table of Contents Executive Summary 1 Table of Contents 2 Introduction 3 Situation Analysis at Personal Investments Pty Ltd 3 Sources of conflict 5 Types of conflicts evident at Personal Investments Pty Ltd 5 Approaches to conflict management 6 Strategies to conflict management at PI 7 Specific strategy for PI 9 Recommendations 9 Conclusion 10 List of References 11 Introduction It is not strange to witness individuals conflicting due to their differences in terms of attitudes, values, beliefs and skills. In other words, people when in social relationships tend to have divergence of interest that escalates conflicts (Cloke and Goldsmith 2011, p.2). Therefore, the discussion looks at how conflict at Personal Investments (PI) can be effectively managed. Situation Analysis at Personal Investments Pty Ltd Since, 1975, Dan Richardson, has been CEO at Personal Investments Pty Ltd, where the CEO has favoured a leadership approach centred on conservative, but with levels of flexibility. In addition, the leadership has cultivated a culture of inclusive decision making that also maintains strong relationships. This has enabled Richardson earns confidence of many stakeholders in the organisation, whereby, in most instances, Richardson is trusted with providing leadership and direction for the organisation. Richardson sees a more aggressive investment approach is required in order for the organisation to keep pace with its competitors. The need for aggressive investment approach is an idea that Richardson discusses with a long-time friend, who happens to be acclaimed investment broker, Tabitha Rose. It is an idea Tabitha Rose accepts and encourages Richardson to pursue. Subsequently, Richardson brings up the idea of hiring Tabitha Rose, to the other partners during the next meeting they hold. Entrance of Tabitha Rose in PI becomes the turning pointing for the organisation as conflicts becomes the order of the day. Obvious, it becomes clear that Tabitha’s aggressive approach to investments parallels that of PI, which emphasis low-risk but secure investments. Conflict manifests in the hiring process of Tabitha, where other partners remain skeptical and cautious, given the work history of Tabitha that is marked with little loyalty and patience to previous employers. Tabitha causes discomfort and anxiety among the partners in the organisation due to her aggressive approach that belittles the firm’s long-term approach to investments. It is a situation the investment guru, Tabitha Rose, does not want to hear especially after Richardson granted her powers of freedom and flexibility. Tabitha, is convinced her strategy and change direction is the ‘perfect’ and anyone opposed to it is an enemy of the positive change and growth in the organisation. Apart from causing anxiety among the partners, Tabitha has also created another conflict with fellow managers who are alarmed by the activities of Tabitha to shift research employees and support staff from investigating traditional investment alternatives to her portfolio in technological investments. This causes discomfort and uneasiness among other managers thereby distracting operations at the firm. Besides, Richardson tends to have a conflicting position to that of Susan Watson, one of the partners in the firm, when Susan brings the issue of Tabitha to Richardson. Although Richardson is worried about the developments of Tabitha, he brushes the opinions, complains and suggestions by other partners in the firm about the disorganization being experienced due to new arrangements being initiated by Tabitha. Bombarded by concerns in the organisation, Richardson, initiates conversation with Tabitha, but as usual, Tabitha’s emotions betray her and become impatient. She does not buy into Richardson’s advice and suggestions, insisting that her position and vision for the firm are appropriate. Not even the calmness, composure and assurance from Richardson can convince Tabitha to have an accommodative approach that gives partners and stakeholders’ confidence and sense of security. Tabitha becomes clear and candid in her decision: the firm sits cool and let her run the aggressive strategy for the growth of the firm or back off and let the firm concentrate on its image and traditional investment approach. Sources of conflict Sources of conflict in this case can be identified to originate from a number of sources. First, the firm has established a comfort zone regard to pursue of traditional investment approach in low-risk investments that guarantee security. Senior partners in the firm and some long-term investors are unwilling to do away with this strategy. Another source of conflict erupts when Tabitha Rose is hired and comes in the organisation with an imported-aggressive investment approach that does not resonate well with senior partners. Another conflict is evident in the way Dan Richardson defies opinions and suggestions of other partners with regard to choice of Tabitha as a manager in the firm and goes to hire her. Lastly, Tabitha conflicts with other managers in the firm by unilaterally shifting researchers and support staff to her portfolio without consulting them. Types of conflicts evident at Personal Investments Pty Ltd Analysis of the conflict at the firm, it becomes clear that different forms and nature of conflicts exist. Interest conflict is evident in the organisation. The conflict originates from the different interests stakeholders in the organisation have and pursue. For example, different interests are exhibited between the need to implement the traditional investment strategy that favours low-risk and secure opportunities and the desire to adopt a new aggressive investment strategy that competes favourably in the market. Dan Richardson, the firm’s CEO, develops a sense that a new approach is required; a situation that majority of senior partners are not fully convinced is appropriate. Structural conflict on the other hand, manifests in the way organisational structures at PI interacts especially with regard to how different units in the organisation interacts and depends on each other in carrying out activities. Departments at PI depend on each other especially where managers in different portfolios depend on the research department in order to investment decisions and related strategies. Therefore, conflict occurs when Tabitha Rose, unilaterally shifts researchers and support staff to her portfolio, thereby denying other managers opportunity to have accurate information to make their investment decisions. The other managers disagree with this decision by Tabitha. Another type of conflict is the value conflict that is vividly manifested in the way Tabitha Rose, Dan Richardson, and investors exhibit different values about investment and strategy in the organisation. Tabitha Rose believes her values about aggressive investment approach, with less distraction from clumsy old investment approaches, are the best for the firm. Subsequently, Tabitha believes there is no room or reason to have debate on this; either yes to it and she stays or no to it and takes a walk. At the same time, Richardson exhibit different values about the direction of the firm to that of other partners, and this is evident in the way he is convinced at all odds, about the suitability of Tabitha’s candidature. Approaches to conflict management Conflict resolution and management to the identified events at PI can be said to be largely invisible, since there is no outright formal strategy that is exhibited in the organisation being used to manage the conflict. In fact, it can be observed that initially before Tabitha Rose is hired, management of conflicts at the organisation is largely conducted indirectly using some conflict management strategies such as compromise and accommodation (Thomas 1992, p. 266). When Dan Richardson decides to suggest Tabitha Rose to other partners, disagreements erupts but in the end, the other partners decide to compromise on the idea and accommodate CEO’s choice for Tabitha Rose. On the other hands, Richardson is able to accommodate Tabitha’s strategy and direction even when other partners and investors express their sceptism and reservations to the strategy adopted by the manager. This is evidenced when Richardson gives Tabitha powers to have freedom and flexibility in her strategic initiatives. In fact, it can argued that, the current situation PI finds itself in relation to the conflict escalated by Tabitha Rose, can be connected to inability of Tabitha to be accommodative and compromising in some of the situations that her ideas, goal, vision, attitudes, aspirations, and targets conflict and contradicts that of other stakeholders. At the same time, the problem is precipitated by the inability of CEO, Dan Richardson, to consolidate and involve key stakeholders and necessary tools that can be used to resolve the conflict in a professional and sustainable manner, in order to salvage the firm from its current vulnerability due to lack of proper way of managing conflicts. Strategies to conflict management at PI Conflicts, irrespective of their nature, presents organisations and concerned parties with challenging situations that when inappropriately dealt with may become catastrophic to the organisation (Rahim, 2010, p.1). This has prompted an enthusiasm for the study of the best conflict management strategies in difficulty situations like the one PI finds itself. At earliest time, Follett (1940) identified three methods of conflict management: domination, compromise, and integration (Martinko and Wallace 2004, p.228). Later, the author suggested other strategies such as avoidance and suppression. On the other hand, Blake and Mouton (1964) established that conflict management can be realised through strategies such as forcing, withdrawing, smoothing, compromising and problem-solving (cited in Bono, Jones and Heijden 2008, p.100). Moreover, attempt to solve a conflict should be based on the ability to identify and evaluate attitudes of the manager and concerns for the production and people in the organisation (Thompson 2002, p.138). Besides, Pruitt’s (1983) developed a dual-concern model of conflict management, and identified yielding, problem solving, inaction, and contending as the appropriate strategies to use (Rahim 2010, p.31). Subsequent that have been conducted to evaluate the suitability of these strategies have largely confirmed that successful conflict management strategies are those that facilitate discussion and debate over the conflict, open communication, compromise or consensus and rotational of responsibilities (Rahim 2010, pp. 32-33). Those less successful are the ones that avoid, ignore or underestimate the conflict. This led to Rahim and Bonoma (1979) to establish conflict management strategies based on two primary dimensions: concern for self and concern for others (Rahim 2002, p.216). Combination of these two dimensions led the authors to identify five conflict management strategies: integrating, obliging, dominating and avoiding. The case at PI can be said to have far-impacting results if not adequately dealt with, although it also appears to be complex. Complexity of issues in modern organisations such as management and conflicts, have been described to be resistance to a single or particular form of solution (Rahim 2002, p.217). This has led suggestion that modern organisations require contingency approach or situational approach to management issues at hand (Rahim 2002, p.217). This is particularly informed by modern leadership theories of management such as contingency theory of leadership, path-goal theory of leadership and decision theory that posit that there is no one best style of dealing with different situations appropriately in an organisation (Rahim 2002, p.218). Therefore, adoption of any strategy depends on the situation at hand and related supportive environment to address the situation. Specific strategy for PI Motivated by the suggestion for adoption of a situational approach to addressing contemporary issues, it is recommended that PI adopts an integrated and compromised conflict management approach to its current situation. This approach can also be considered to be problem-solving approach, which is an effective approach to finding an appropriate solution to the problem at PI. The primary factors that makes this approach appropriate can be said to include need to solve problems at hand, by finding out the actual problems. Moreover, the use of this strategy involves concerned parties being open to the issue at hand, exchanging information, looking for the appropriate alternatives they can use to solve the issue, and examination of their existing differences that enable both parties to reach an effective solution that is acceptable to both parties (Rahim 2002, p.218). Recommendations The problem at PI cannot be solved by one party; it involves different stakeholders, as well as, organisation’s strategic issues, objectives, policies and long-term planning. Therefore, while, problem-solving style is appropriate strategy fit to attain an integrated conflict management solution, there is need for development of a conflict management plan in order to handle the situation. The plan should incorporate and satisfy diverse stakeholders while giving security to the objectives and policies of the organisation. Moreover, the conflict management plan should be pegged and reflect increased level of communication among stakeholders, ability of concerned parties to accommodate divergent views, desire to find a common position through consensus, and ability to identify the organisation’s vision and objectives (Gelfand and Brett 2004, pp. 179-183). Lastly, the conflict management plan should have a clear leadership strategy that develops vision, mission and achievable targets to minimise conflicts in the organisation. Conclusion Humans live and interact in a society where conflicts are inevitable. Conflicts are likely to manifest in numerous human interactions that in most cases take place when two or more social entities come together in an effort to pursue certain goals. But, what is important in all these conflicts is for the concerned parties to develop appropriate conflict management strategies based on the situation at hand and the overall goals and objectives of the organisation. List of References Bono, S. D., Jones, S., and Heijden, B. V., 2008. Managing Cultural Diversity. London: Meyer & Meyer Verlag. Cloke, K., and Goldsmith, J., 2011. Resolving Conflicts at Work: Ten Strategies for Everyone on the Job. San Francisco: John Wiley & Sons. Gelfand, M., and Brett, J., 2004. The Handbook of Negotiation and Culture. Chicago: Stanford University Press. Martinko, M. J., and Wallace, K. R., 2004. Attribution Theory in the Organizational Sciences: Theoretical and Empirical Contributions. Charlotte: Information Age Publishing. Rahim, M. A., 2010. Managing Conflict in Organizations. New Jersey: Transaction Publishers. Rahim, M., 2002. Toward A Theory of Managing Organisational Conflict. The International Journal of Conflict Management, Vol. 13, No. 3, pp. 206-235. Thomas, K. W., 1992. Conflict and Conflict Management. Journal of Organisational Behaviour, Vol. 13, pp. 265-274. Thompson, L., 2002. The Social Psychology of Organizational Behavior: Key Readings. 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