How to Achieve Organizational Effectiveness & Resolve Conflicts?

Organizational effectiveness can be defined as the efficiency with which an association is able to meet its objectives. This means an organization that produces a desired effect or an organization that is productive without waste. Organizational effectiveness is about each individual doing everything they know how to do and doing it well; in other words organizational efficiency is the capacity of an organization to produce the desired results with a minimum expenditure of energy, time, money, and human and material resources. Read more about the same in the blog below!

As we know conflict is a very natural part of any social and professional life. Conflict arises due to disagreement between people due to their perceived or real differences. When it comes to organizations, some of the common conflicts observed as a hindrance to achieving Organizational Effectiveness are as follows:

• The difference in the goals and priorities of stakeholders.
• Interdependence between subunits / departments / divisions.
• Democratic factors (For Ex – Line Vs Staff) – wherein one specific department/group gets more priority/ benefits than others.
• Incompatible performance criteria – Where the goal of one department/subunit blocks the goal of others. To understand this we can take a simple example: Production and sales can come into conflict when, to achieve the goal of increased sales, the sales department expect production to respond quickly to meet customer need/ orders – an action that arises in manufacturing cost and distracts them to achieve their goal to minimize production cost, the conflict will arise.
• Organization Structure – can also affect the potential of conflict. Conflict can be increased with vertical/horizontal/ spatial expansion/ proliferation of organization, a mismatch between decentralization and centralization of decision making, and in absence of the right level of balancing between standardization of process and mutual adjustment.
• Leadership – A week of leadership can also be a major reason to increase conflict in the organization.
• Culture & acceptance of new comments, openness and agility towards change have the potential to arise conflict in the organisation.
• Scare Resources – If the resources are limited and divisions are battling for them.

Is Conflict Good for an Organization?

To understand this we will refer to the graph given below, here we will understand the required level of conflict (good) to achieve organizational effectiveness to its best. Conflict can be beneficial because it can overcome organization passiveness and lead to learning and change. It boosts people to learn and reevaluate their views and can improve decision-making by revealing a new way of looking at a problem. In the short right level of conflict can improve decision-making and allow the organization to better change and adapt to its environment. However, beyond a certain point (as shown in the graph) conflict can become a serious cause of organisational decline, because in this situation managers spend all time their bargaining and fighting and the overall decision-making gets delayed. Innovation is obviously impossible in such a scenario. Individual/subunits spend more time justifying their point of view, their position and interest and the overall performance/effectiveness of the organization go down. 

How to Manage conflict in an organization?

Obviously, too much conflict can sour the organization’s culture hence managing it properly is an important priority. There is a need to have the right balance to have a good conflict (which is needed to break the inertia of the organization) and to prevent it from escalating into bad conflict (which breakdown the coordination and integration between departments and reduce the organization’s effectiveness). However, the resolution of conflict depends upon the sources of the problem. If the conflict is due to the interdependence of subunits then the organization can change its structure from functional level to divisional/ multidivisional level (where they can have self-contained independent functional resources, that will reduce their interdependence, however, this move can be costly, but can improve the communication and expedite the decision making and overall process).

The design of an organization is equally significant to manage conflict. As the organization grows is likely to lose control of its hierarchy and this loss of control can be a major source of conflict. Hence a clear line of authority is needed for better communication and decision-making. There should be a right balance between centralization and decentralization, standardization and mutual adjustment in decision making. An open forum can be organized where subunits (are in disputes) can meet face to face and can resolve and make a uniform decision. A third-party negotiator can be assigned for a fair hearing and to a moderate dispute between subunits. Another way can be role rotation of employees within subunit to encourage the group to learn each other’s point of view. When attitudes are difficult to change because they have developed over a long period of time then it can be dealt with by changing the people involved, this can be done by transferring the employee to another part of the organization.

The Inspirit Way

Organizational Effectiveness is achieved when the firm works efficiently to its full potential.  In all the above, the aim should be to fix the sources of conflict so that it will not arise again for the same issue. There are still more ways to fix the conflict in an organization and all it depends upon the sources from which it arises. To sum up, the right level of conflict is healthy for an organization’s effectiveness but the moment it increases then the organizational effectiveness falls. Hence choosing and maintaining the right level of conflict is necessary for management to manage the organization’s effectiveness.