Ministry of Education and Youth of Moldova

Academy of Economic Studies of Moldova

Department of International Economic Relations

Chair of International Economic Relations 
 
 
 
 
 
 

Project in IER

Theme: “Conflict and stress in the activity of enterprise. Methods of resolution.

Case study.” 
 
 
 

                                                                                                     Author: Țurcan (Varsan) Liudmila

                                                                               3^rd year student

                                                                               Group EMREI-287 
 

                                                                                Scientific advisor:

                                                                                Şişcan Zorina

                                                                                 Associated professor,  
 

                                    

                                              Chisinau 2010

Plan

Introduction……………………………………………………………...  3

Chapter 1. Theoretical aspects regarding conflict and stress

1. The essence and types of conflict…………………………………… 5
2. Basic styles of a manager behavior in conflict situation……………. 9
3. Stress: Concept and causes…………………………………………...12

1.4 Stress management. How to deal with pressure on the workplace…...14

Chapter 2. Analysis of conflict and stress on the basis of case study

(“ENTEH” JSC).

2.1 General characteristic of “ENTEH” JSC…………………………….16

2.2 Analysis of conflict and stressful situations in the “ENTEH” JSC ….18

Conclusion………………………………………………………………...22

Bibliography 
 
 
 
 
 
 
 
 
 
 
 
 
 

Introduction.

     The foundation of any organization is a labor collective. The labor collective – is a formal community of people united by a common activity for achieving certain goals. Environment, in which people find themselves in the process of joint activity, predetermines and limits the ways of their interaction. Numbers of needs that can be satisfied during the communication process also become limited by the actual circumstances. In such cases there often arise contradictions between people on a wide range of issues. By themselves, these differences and contradictions can act as a positive factor, movement of creative thought. However, becoming a sharp, they can impede successful collaboration and lead to conflicts.

     This work is relevant in our time because people working in the organization differ one from another, actually, they have a different perception of the situation in which they find themselves due to their individual characteristics. The difference in perception often leads to the fact that people do not agree with each other solving some problem. This disagreement arises when the situation really conflict by nature. The conflict is determined by the fact that conscious behavior of one of the parties enters in contradiction with the interests of the other party. Most conflicts arise in addition to the desire of the participants. This is due to the fact that most people do not have an elementary understanding of conflicts, or does not give them value.

Head of the organization, according to his role, is usually in the middle of the conflict and is intended to settle the matter by all available means. Conflict control is one of the most important functions of the manager.

In organizations conflicts can have constructive and destructive beginning. The destructive effects arise when the conflict is either very small or very strong. When the conflict is small, it often remains unnoticed and does not find the adequate solution. The conflict that has reached the maximum point leads to the growth of stress for the members of group. Decisions are taken in terms of concealing or distorting information and do not have sufficiently motivating force.

Constructive party appears when the conflict is enough to motivate people. The development of such conflict is accompanied by an active information exchange and the desire to understand each other. In this case in the discussion process produces the compromise solution based on creative and innovative approach to the problem. This decision leads to more effective work in the organization. Depending on how the conflict management is effective, its consequences will be constructive or destructive, affecting the ability of future conflicts, eliminate the causes of conflict, or create them. The aim of this work is to study conflict and stress in the activity of the enterprise. Proceeding from the purpose of the work we can set following objectives:

- Identify specific features and types of conflict situations in contemporary public organizations.

- Analyze causes of conflict situations.

- Consider basic styles manager behavior in conflict situations.

- Analyze the causes of stress.

- Analyze methods of dealing with pressure on the workplace.

For methodological and theoretical base of this project were chosen scientific works of such well-known authors as: K.W. Thomas, R.H. Kilmann, G.G. Scot, C. Bonciu, I.Moraru the main objective of their research was conflicts in activity of an enterprise. As concerning Hans Selye, A. Deaconu, S. Podgoreanu, L. Rasca were analyzing stress management.

  Structurally work consists from introduction, two chapter and conclusion.

• In first chapter “theoretical aspects regarding conflict and stress” are considered theoretical aspects regarding conflict and stress, specifically: the essence and types of conflicts, styles of managers’ behavior in conflict situation, the essence of stress and organizational programs to deal with stress. 
• In the second chapter “Analysis of conflict and stress on the basis of case study (“ENTEH” JSC).” are analyzed conflict and stressful situations in the “ENTEH” JSC. For determination of stressful and conflict situation in the analyzed company, was done interviewing on the question of satisfaction with their work and the types of conflict which appear more frequently in organization.

 
 
 
 
 
 
 
 
 
 

Chapter1

Theoretical aspects regarding conflict and stress

1. The essence and types of conflict.

When cooperation and collaboration are low, effects are seen in productivity, customer service, organizational and individual stress, unscheduled absences, sick leave use, medical claims, retention, and recruitment ability.  
Here are some statistics that reflect the cost of conflict in organizations: 30-42% of managers' time is spent reaching agreement with others when conflicts occur. It is estimated that more than 65% of performance problems result from strained relationships between employees -- not from deficits in individual employees' skill or motivation. It costs 1.5 times the position salary to replace the employee in it. Recent studies find that more than two-thirds of managers spend more than 10% of their time handling workplace conflict and 44% of managers spend more than 20% of their time in conflict-related issues. A number of surveys indicate that people in all occupations report the most uncomfortable, stress-producing parts of their jobs are the interpersonal conflicts that they experience on a daily basis between themselves and co-workers or supervisors.

   The possibility of conflict inherent in human life itself. The causes of conflict are rooted in the anomalies of the social life and imperfections of man himself. Among the causes of conflicts, we should mention, above all, socio-economic, political and moral.

   A man who never thought about the nature and essence of the conflict seems that conflicts spoil relations between people, make harm for business, health, cause stress, tension. That is why most of  people do not like conflict, and partly afraid of them. So it is at the level of perception of conflict in a person's identity. However, this statement indicates, about complexity of the conflict relations and their diversity. Conflict is a kind of tool for managing social medium, defining the quality and levels of the organization.

Can you live without conflict? You may not use the word conflict, but can not live without conflict. Conflicts occur wherever there are people. Conflicts occur under certain conditions. Conflict is norm for the existence of society.

  What is conflict? How does it affect management? There are several definitions of conflict; they proceed from the common traditions and existing doctrines in the society. Generalizing approaches to understanding the conflict can be said that the conflicts are explained as:

• Contradictions and collisions of positions in society.
• Differences in the interests of members of society.
• Absence agreed positions in the society.

A fundamental for understanding a conflict is the selection of key concepts - contradiction and interest. But not every contradiction leads to conflict, but only those which make a person (or group) to realize the antagonism of interests that cause the discrepancy.

It should be noted an important term in any conflict, which represents a significant share- the presence of the irrational component which greatly enhances the action of the components of conflict. Let’s formulate a generalized definition of the conflict. So: Conflict is actual or perceived opposition of needs, values and interests. Conflict as a concept can help explain many aspects of social life such as social disagreement, conflicts of interests, and fights between individuals, groups, or organizations. Without proper social arrangement or resolution, conflicts in social settings can result in stress or tensions among shareholders. When an interpersonal conflict does occur, its effect is often broader than two individuals involved, and can affect many associate individuals and relationships, in more or less adverse and sometimes even way.

  Every person especially a manager should know:

- What is a conflict?

- Why does it appear and how it develops?

- Who is involved in a conflict?

- What are the results and the aims of a conflict?

In addition, a specialist should orient in a conflict situation and take an effective decision. Conflict should not have a negative role in a society; it should be a tool for managing, optimization and mobilization of real production, social, creative and other relations between people. That is why the real specialist should be able to:

- To prevent a conflict correctly

- Have an adequate behavior in a conflict situation, to reduce the destructive effect and intense harmonizing effect of a conflict.

- Terminate a conflict with minimal loses for both parts and have a benefit from its rational solution.

It’s obvious that a conflict can only destroy, disturb and disorganize but also help, create and organize. The specialist in management should not only study conflicts but also the ways of settlement.

What are the negative functions of the conflict?

We can mention several of them:

1. Reduced productivity of workers, dismissal of employees for the conflict resolution.
2. Reduction of cooperation between people who are in conflict.
3. Are created imaginary problems in the relations between people (group) at the expense of solving the real problem.
4. Increase material, emotional and system costs for achieving the goal of the enterprise.

As positive functions of conflict we can mention:

1. Has a diagnostic function, it shows the real relations between people in a group.
2. Reduction of stress, which becomes a stimulus for the production.
3. Makes a group more unite and organized.
4. Has an informational and communicational function, because in conflict situation people try to learn more about each other.

Table 1: The functions of conflicts 

 

Source: elaborated by author on base of sources (Willem F. G. Mastenbroek Conflict Management and Organization Development) 

There are several types of conflicts in the organization.

1. Interpersonal conflict. This type of conflict is perhaps the most vide spread.  Most often this is a manager struggle for limited resources, manpower, finance, etc. Everyone feels that if resources are limited, he must convince their superiors to allocate resources to his department. Interpersonal conflict can also occur as a clash of personalities, people with different characters, different temperaments are simply unable to work with each other.
2. The conflict between the individual and the group. Due to the fact that the group set standards of behavior, it happens that the expectations of the group are at variance with expectations of individual. In this case a conflict arises. In other words, between the individual and the group appears a conflict if this person takes a position different from the position of the group.
3. Intergroup conflict. As it known every organization consist from many groups both formal and informal. Even in the best organization among this groups can raise a conflict.

 

 
 

Figure 1: Causes of intergroup conflict

Source: elaborated by author on base of sources (Bazarov T.Y, Eremin B.L,  Aksenova E.A, Malinovskaya P.V. Human resources management.)

           Also conflicts are classified at the degree of manifestation: they can be hidden and open. Hidden conflicts usually involve two people who try not to show anybody that there is a conflict between that as long as it possible. But as soon as one of them gives up the conflict become opened.

1.2 Basic styles of behavior of manager in a conflict situation.

There are a lot of recommendations developed by expert concerning different aspects of people behavior in conflict situations, choosing the convenient strategy of behavior and resources of resolving the conflict.

    For a manager is very helpful to know, what character features and particularity of people behavior are typical for the conflict personality. Summarizing the research of psychologists we can mention several features of character:

• Inappropriate assessment of his capabilities which can be as overvalued and undervalued.
• Desire to dominate, where it is possible and impossible.
• Conservative thinking, attitudes, beliefs, unwillingness to overcome old traditions.
• Excessive adherence to principle and linearity in the statements and opinions, commitment by all means tell the truth straight line.
• A certain set of emotional qualities of the person: anxiety, aggressive, stubbornness, irritability.

By K.W. Thomas and R.H. Kilmann where developed the basic styles of behavior in conflict situation. They show that there are five basic types on behavior in conflict situations: accommodation, compromise, collaboration, avoiding and competition.

The style of behavior in certain situation is determined by the measure in which you want to satisfy your own interests, acting passive or active, and interests of other party acting jointly or individually.

1. Competition style can be used by a person with a strong will, which has enough of authority, power who is not interested in collaboration with other party aspiring to meet his own interests.it can be used when:

• Outcome of the conflict is very important for you, and you think your solution of the problem is better than anyone else.

• Have sufficient power and authority.
• Feel that you have no choice and you have nothing to lose.
• Have to make decision that no one will accept, but you have enough power to this.

But also should be mentioned it’s not the style to be used in personal relations, it can cause only the sense of alienation. It also can’t be used in a situation when you don’t have enough authority and your point o view is different from the point of view of your chief.

2) Collaboration style you can use when defending your own interest you should take into consideration the needs and wants of other party. This is the most difficult style, because it need more work. Its aim is to elaborate long-term mutually beneficial solutions. This style requires the ability to explain you want, to hear and understand each other, restrain your emotions. Lack of one of this factors make this style non effective. For solution of the conflict this style can be used if:

- Need to find a common solution, If each of the approaches is important and does not allow compromise.

- You have a long, strong relationship with other party.

- Main objective is to gain work experience jointly.

- Parties can listen to each other and express the essence of their interests.

3. Compromise style. Its essence is that parties seek to resolve disagreements by reciprocal concessions. In this plan it recalls with collaboration style, but it is carried out at a superficial level, because parties concede to each other. This style is more effective. Both parties want the same thing, but understand that this can be achieved simultaneously. This approach to conflict resolution can be used in the following situations:

- Both sides have equally convincing arguments and have the same power.

- Satisfaction of your needs is not very important for you.

- Temporary solution is enough for you, as there is no time to develop another one, or other approaches for solving the problem where nor efficient.

- Compromise will help you to get something than lose everything.

4) Avoiding style is realized when considering problem is not very important to you, you do not assert your rights, do not collaborate with anyone, and don’t want to waste your time and effort for resolving it. This style is also recommended when one of the parties has bigger authority or feels that it’s not right, or consider that there are no serious grounds to continue contacts. You should not think that this style is an escape from the problem or avoidance of duty. In real life the escape or avoidance can be appropriate response to conflict situation, because during this time the situation can resolve itself, or you can resolve it later, when you will have enough information and desire to do it. The ignoring style of behavior can be recommended in the following cases:

- Case of disagreement is not important for you, in comparison with other more important questions, that is why, you don’t want to waste your time on it.

- Know that you cannot or even don’t want to resolve the issue in your favor.

- You don’t have enough power to resolve the problem the way you want it.

- Want to gain some time to consider the situation properly and get additional information, before making a decision.

-Try to resolve this problem immediately is dangerous, as the open discussion of the conflict can only make the situation worse.

-  Subordinate by themselves, can resolve the conflict.

5) Accommodation style means that you will work with other party but will not try to defend your interests in order to smooth the atmosphere and the restoration of the normal working environment. Thomas and Kilmann think that this style is the most effective when the outcome is very important for other party and is not very important for you or when you sacrifice their own interests in favor of the other. The adoption style can be used in the following conditions:

• The most important task is to restore of calm and stability, not to resolve the problem.
• Subject of disagreement is not very important for you or you do not particularly care what had happened.
• Believe that it is better to maintain good relationships with other people than to defend your point of view.
• Understand that your point of view is not wright.
• Feel that you don’t have enough chances and power to win.

In this way none of these styles of management can be effective in all situations without exception because none of these styles can be selected as the best. We should learn to use effectively every of this styles, meaningly do the right choice, considering specific circumstances.

High

 Person interest 

Low 

Figure  2: Styles of conflict resolution

Source: elaborated by author on base of sources (Bazarov T.Y, Eremin B.L,  Aksenova E.A, Malinovskaya P.V. Human resources management.) 

1.3 Stress: Concept and causes

Workplace stress is the harmful physical and emotional response that occurs when there is a poor match between job demands and the capabilities, resources, or needs of the worker. 
Psychosocial factors at work represent the set of perceptions and experiences of workers, some are individual, and others refer to economic expectations or personal development and more to human relationships and emotional aspects. The most common approach to address the relationship between the psychological working environment and health of workers has been through the concept of stress. Both developing countries and industrialized states in the working environment in conjunction with lifestyle factors cause the action of psychological and social impacts. The importance of the study from the professional point of view has been increasing day by day. Current trends in the promotion of safety and health at work includes not only the physical, chemical and biological work environments, but also the many and various psychosocial factors relating to the business and how you influence the physical and mental health worker. These factors include interactions between workers, their working environment, and job satisfaction, organizational conditions on the one hand and on the other hand, the worker's personal characteristics, their needs, their culture, their experiences and their perception of the world. The major psychosocial stressors present in the working environment involve issues of organization, administration and systems of work and certainly the quality of human relationships. Therefore, the organizational climate of a company is linked not only to its structure and living conditions of the collective work, but also its historical context with all its population problems, economic and social. Thus, economic growth the company, technical progress, increased productivity and stability of the organization depends in addition to media production, working conditions, life styles and levels of health and welfare of its workers. Currently there are rapid technological changes in production methods that consequently affect workers in their work routines by changing their working environment and increase the onset or development of chronic stress. Other factors outside the workplace but that are closely related to workers' concerns stem from family circumstances or his private life, its cultural elements, nutrition, facilities of transport, housing, health and safety in employment. Some of the major psychosocial factors that can cause a stress are indicated below:

A) Professional Performance: working high degree of difficulty, working with high demand for care, activities of great responsibility, contradictory functions, restricted creativity and initiative, requirement for complex decisions, sudden technological changes, lack of work-life plan, threat of job demands

B) Address: inadequate leadership, misuse of worker skills, poor delegation of responsibility, industrial relations ambivalent, manipulation or coercion of workers, poor motivation lack of training and staff development, lack of awareness, lack of incentives, unequal pay, random job promotions.

C) Organization and Function: inappropriate management practices, ambiguous attributions, misinformation and rumors, conflict of authority, paperwork, poor planning, punitive supervision

D) Tasks and Activities: excessive workloads, poor job autonomy, rushed work pace, excessive demands for performance, multiple work activities, obsessive work routines, excessive competition, unfair or destructive, monotonous, repetitive work, low job satisfaction

E) Work Environment: inadequate physical working conditions, restricted physical space, and constant exposure to physical risk, workplace conflict, not supportive work, contempt or disregard for worker.

F) Working Hours: rotating shifts, excessive working hours, indefinite period of time, excessive physical activity.

G) Business and Social Environment: company unstable politic, absence of corporatism, lack of legal support by the company, intervention and trade union action, inadequate wages, lack of job security, underemployment or unemployment in the community, employment options and labor market.

 

  

 

 
 

  Role ambiguity   Overload at work         Role conflict      Uninteresting job    

                                                                                                                                                                  

Figure 3: Factors that can cause stress on workplace

Source: elaborated by author on base of sources (D. Myers Social Psychology David G. Myers «Social Psychology»

1.4 Stress management. How to deal with pressure on workplace. 

Every person can have a stress regardless his position in the enterprise, social status and material wealth.   According to statistics, in the U.S. (the country that first recognized the problem of stress), 90% of the population is constantly in condition  of extreme stress,  60% of them have a stress 1-2 times a week, 30%  have it almost every day. Due to the constant stress, nearly 90% of the population earning a disease called chronic fatigue syndrome. As concerning European Union 40 million workers from 147 million suffer from stress, that cost to society 19 billion US dollars. Many people who live in European Union suffer the consequences of stressful situations such as: 13% complain on constant headaches, 17% - on muscle pain, another 30% have discomfort and pain in back.

     The main organizational programs to deal with stress are: coaching leadership, stress relieving corporate training, and organizational behavior.

1. Coaching leadership.  The most appropriate program for managing stress for company leaders is the coaching that is also called personal assistance or individual coaching. The role of a coach is to help executives to see positive and negative consequences of managerial decisions, enhance life strategies that helped to achieve success in past, reject or adjust the strategy that is ineffective in the current stressful situation.
2. Corporate Training. This is the most common way of managing stress within the department or company. To conduct anti-stress training, you must first analyze the situation, identify key issues and determine the results have to be achieved during the training. Then training program is drawn up and agreed with managers.

   For example, if it is made a decision to make anti-stress training among the sales staff or employees of a call-center, in the program should be include exercise that can help to withstand the emotional pressure from unsatisfied interlocutor and find a way out from difficult situations that arise in the course of communication. Facing "difficult" clients, it is very hard to avoid: feelings of anger, resentment, helplessness, but quite possible to learn how to manage it. We must strive to focus not on the negative emotions during the conversation, but on results has to be achieved after the implementation of the work: lucrative deal, increasing profits, creating a positive company image.

3. Organizational behavior. This is another effective way of managing stress, which increases the viability of the organization in adverse conditions. The main task of organizational behavior is to prevent loss of psychological resources and use of stress for developing and training employees. The essence of this method is that in condition of stress a person can learn through an example. For the employees a good example may be behavior of their leader. Assume that is held a meeting dedicated to methods of getting out of crisis. General Director is turning undefined problem into solved one, communicate effectively with persons present on the meeting, efficiently manages the time of the meeting, he is showing for employees the forms of organizational behavior. Thus, organizational behavior – is a behavior which is transmitted from the leader to subordinates mainly in situations of uncertainty, personal discomfort and congestion. Positive examples of organizational behavior to help employees get out of exhausting treatment of stress. We consider several types of institutional management behavior in a stressful situation.

• Management of uncertainty. Showing an example of organizational behavior which can help to manipulate the uncertainty, the manager must show that he is responsible for his words, and his activities and those of his subordinates has meaning. That he could organize the work so, that any problem turns into a task. In managing uncertainty is important not block the channels of reliable information and give employees feedback, the opportunity to consult on any working point.

• Relationship management. In managing the relationship chief must develop a culture of communication, which will focus on the emotions of employees not related with personal differences, but on a common goal. To be effective at creating a favorable psychological climate in the team, managers need to establish a system of communication. In particular, for promotion of relationship management may be developed corporate traditions, corporate holidays.
• Load at work management. In managing loads chief should review regime of working hours of his employees, correctly manage his time and time of his subordinates, as well as provide the ability to recover strength after a difficult and hard work - for example, season ticket in gym, fitness club, swimming pool.

 
 
 
 

 

                                   

 

 

 
 

 

                                                                                               

Figure 4: Algorithm of Stress management

Source: www.hrm21.ru/rus/stress-management 

Chapter 2

Analysis of conflict and stress on example of “ENTEH” JSC

2.1General characteristic of “ENTEH” JSC

       "ENTEH" JSC started its activity in 1994 year.  During a relatively short period of time the company managed to become one of the country's biggest tax payers. The company's personnel is distinguished by high professionalism, activity and responsibility in business and orientation towards perspective. The company's strategy provides for active investments into the production sector of the national economy. The most significant advancement in this direction has become the procurement of the control stock of shares of the “Produse Cerealiere” JSC from the state in the 2000 year (Formerly “Combinatul de Produse Cerealiere” of Balti). 
         Soon it appeared that “ENTEH” JSC is not only a powerful investor (the company development program was valued at over 45 million lei), but also a practical and professional business partner. The company has already established partnerships with many foreign commercial companies. Having considerable experience in sales and acquisitions, "ENTEH" JSC has assumed the responsibility for all the matters associated with the promotion of products. Now the investor has at disposal a developed distribution network capable for delivering the plant's products practically to any commercial point both within the country and abroad. In addition the company has assumed the responsibility for the plant's entire creative policy. The high quality of products has become the major motto and   main principle of operations. The company's geography of exports is extending continuously. In 2006 the company began the shipments of alcoholic drinks to the United States of America – another market with high standards of strong alcoholic drinks. Later in Israel, Bulgaria, France, Armenia and Poland appeared on the map of firms’ exports. The firms’ latest achievement has been the shipment of first lot of vodka under TM “Spicul de Aur” to Italy.      

Clearly, it is hard to enter new markets but it is even more difficult to maintain position there. This is why the major scope of “ENTEH” JSC for the moment is not only the maintenance of quality at the achieved level but also its maximum improvement. The company will not stop working on new products, improvement of packaging design in accordance with the modern requirements, leaving behind the competitors.

      Especially for importers the company manufactures products under names adapted for the markets of importing countries, for instance, «Русское поле» (“Spicul de Aur premium” – vodka adapted for Bulgarian market), «Старая мельница» (“Moara Veche” adapted for German market), etc.

    Despite crisis “ENTEH” JSC is expanding geography of its export. Since March 2009 Company exports its products under the TM “Spicul de Aur” to Czech Republic and Italy. Moreover company enlarges range of its products.  In March 2009   the TM «BioHleb» extends its series «Healthy Nutrition» and presents a new product – bread enriched with beta-carotene. In April 2009 TM «Spicul de Aur» surprises its admirers with «Moara Veche light» - a new vodka in the «Spicul de Aur» family. In March 2010 Company Enteh represents sauce «TAI-NA» continuation of products line of «Healthy Food» series, developed especially for the consumers who care of health. In May 2010 “ENTEH” JSC (TM “Spicul de Aur”), became the exclusive distributor of the honey of TM “Tai-Na”.

Beside all this “ENTEH” JSC produces and provides listed below services:

Production:

1. Alcoholic beverages:

• Vodka

• Tincture, schnapps, liqueurs
• Low-alcohol products.
• Wine and wine materials.