Conflict and Dispute

1. INTRODUCTION

The two key terms conflict and dispute are interchangeable, as this was supported by dictionary meanings of these terms which are as follows: conflict is a fight, struggle and disagreement and dispute is debate, argue and quarrel. Conflict is a natural and unpleasant disagreement between parties who want to achieve their independent goals. Dispute is a time consuming, expensive and unpleasant circumstance in which the claim is rejected as particularly or entirely or simply disregarded by the other party. Claim is a demand of one’s right, but disagreement is the difference in opinions of the parties. The contrasts between conflicts and disputes are useful for investigating the fact whether conflict is only inevitable or both conflict and dispute are inevitable.

Conflicts are categorized into two which are functional and dysfunctional conflicts. Functional conflicts are the positive, manageable and productive ones which have outcome, but dysfunctional conflicts are non progressive, destructive and insufficiently managed ones which will lead to disputes. According to this perception conflict refers to disturbance of the human interactions. Conflicts must be managed whether they become functional or dysfunctional by the methods of domination, compromise and integration. These methods used can also be defined as avoidance of disputes.

Disputes need third party resolving actions in other words an independent third party should accomplish to identify and contemplate main aspects and be able to affirm that a dispute is present, but it may not be as obvious as this especially in commercial projects where one party can cautiously prevent rejecting the claim, as the party may inquire supportive information about the claim. If the parties do not agree the claimant will hold right to arbitration which this will help the claimants who aimed to proceed their claims against the other party’s delay strategy. As arbitration the other dispute resolution techniques are employed to bring disputes to a concluded and resolved status.

2. CONFLICT AND DISPUTES ARE INEVITABLE ON COMMERCIAL PROJECTS

2.1 Causes of Conflicts and Disputes

Causes of conflict were analyzed by Thamhain and Wileman. According to their view three main sources of conflict are project priorities, project schedules and workforce where on these extents project managers have limited control. Furthermore, technical estimations, performance trade offs and administrative and organizational contention, cost and interpersonal disparities are other sources. From one stage to another in a project life cycle the causes of conflict change. Sources of conflict in each phase of the project life cycle were summarized by Thamhain et al. on the table below.

In the beginning stage of the project, the ambiguity may be high. A successful commercial project relies upon the good communication between the client and the lender which is the project sponsor. The sponsor or client in the beginning phase whether may not have definite confidence of the project or they may have the certainty, but not sufficient communication is available. Subsequently, this sort of ambiguity will contribute conflict to emerge in the initiating phase. The uncertainty and risk in a project will lead to conflict, if these circumstances come into existence: Firstly if one of the probable events of risk develops and parties are affected through the consequence of this. Secondly, when a condition emerges in which either the risk applicable for the project had not been determined by the suffering party or risk had been characterized, but inadequate proceedings were achieved to reduce its effects. Thirdly, if there is a condition which the risk distribution between the parties was not certainly set up as a primary issue.

During the time in which ambiguity characterizes the initiating phase, negotiation and communication constitute the planning process. According to the table above, priority conflicts expand from the previous phase and additional to the priorities, technical requirement issues, schedule pressures and procedures are other sources of conflict in the planning phase. Good communication between project manager and resource manager is vital at this point, as conflicts normally emerge form the underestimation of project managers.

Execution and Control stages in a commercial project lifecycle are interconnected with each other. During these phases, deadlines for delivering the services become more difficult to handle and labor demands and pressures from stakeholders increase. Conflict emerges in case which the expectations from the stakeholders are not operated suitably.

Lastly, in the close out phase, schedules persist to be the principal factor for conflict, because pressure meeting the goals on time increases. Besides, concerns for a new project intensifies the personality associated conflicts, as oncoming new projects and incorporation of the personal back into factional divisions generate conflicts of labor force.

The causes of disputes were analyzed by Groton et al. and according to his analyses cause of disputes are under one of these headings:

1. Project Uncertainty: Uncertainty arising from pre-existing conditions, outside forces and the complexity which cause change beyond the expectations of the parties.
2. Process Problems: Problems in the contracting process including contracts, incomplete scope definition, unrealistic expectations with regard to cost or completion date, and poor performance in the execution of the work.
3. People issues: Issues and problems arising between people as a result of poor inter-personal skills, poor communication, lack of responsiveness and unethical or opportunist behavior.

Taking lead from the analysis of Groton et al., it is seen that conflicts lie under the main causes of disputes. When the whole process of conflict and disputes are concerned, both arise from project uncertainty and during the project lifecycle both have similar sources in causing them to emerge. Accordingly, it is necessary to mention that disputes are the combinations of dysfunctional conflicts.

2.2 Functional and Dysfunctional Conflicts

Functional and dysfunctional conflicts were described by Smith. Functional conflict was named by him as “conflict (with a small c)” and he continued that “One party contends one thing, the other something else. It requires work by both parties to resolve. This inescapable consequence of a contract is therefore a functional conflict”. Furthermore, he named dysfunctional conflict as “conflict (with a capital C)” and commented that “if two parties are in ditch having a fight and one is on top of the other, they are both in ditch and they are both suffering. Some would define this as a dysfunctional conflict”.

Conflict can create two possibilities in a project which it can either develop confidence, creativity, team cohesiveness or as a second possibility it can harm personal relationships and professional relationships and increase employee turnover. Functional or dysfunctional conflicts arise from these possibilities.

In the early theory, conflict was designated as a disruptive matter of fact which should be prevented. Three systems of dealing with conflict which are domination, compromise and integration were analyzed by Mary Parker Follett and supported by Glasl (1999). Domination is a win- lose situation where one party have more superiority than the other. Secondly, compromise is a lose-lose situation where both parties lose things without recording gains at the end of the process. Lastly integration which can be named as positive-sum is a win-win situation where both parties gain something without losing. Domination and compromise can cause further conflict, but integration is suggested by Follett as the best method in managing functional conflict.

According to Gray et al. (2002), the management of dysfunctional conflict is much more challenging assignment than stimulating the functional conflict, because uncertain, unmanageable and unsettled conflicts (dysfunctional conflicts) give rise to disputes as stated by Robbins (2008).

The contrast between conflict and dispute was explained by Burton (1993) by which disputes are disagreements which are able to be solved in a short period of time and conflicts are long term non negotiable issues which oppose against resolution. Moreover, it was stated that conflicts and disputes can be formed either interdependently or independently. In short, during the project lifecycle disputes which are short term disagreements can be present in the long term conflict process which demonstrated in the diagram below.

Respectively, conflicts are inevitable and disputes should be avoided in a project. This was supported by De Bono (1985) who specified that conflict is inevitable but dispute is not. Furthermore, disputes appear in such a circumstance where conflicts can not be managed.

Conforming to the diagram above, the whole process starts before the disagreements come into existence. The conflicts should be avoided in order to prevent disputes from emerging by using number of interconnected techniques which are risk analysis, procurement plans and contractual arrangements. The risk involved in a commercial project can be listed as technical, schedule, organizational and financial risks. The risks in these areas should be identified and allocated properly so that conflict will be avoided.