1. When there is an intercultural conflict
In today’s increasingly globalized world, working with people from different cultures is a daily reality for many businesses. And with these differences comes the potential for conflict, from issues of fluency and language to differences in decision-making.
Failure to recognize such cultural differences can be costly.
“Misunderstanding can lead to high emotions that prevent the team from doing their job … and you lose jobs,” he says Jean Brettemeritus professor of management and organizations at Kellogg and expert in dispute resolution.
It exemplifies a tense moment between an American business and a French hotel. The two sides settled on a week of wine tasting at the hotel, after which the American company sent a 15-page contract to the hotel owner.
For Americans, it was just a pro forma part of doing business. But the French hotelier was furious. He had taken it personally that they did not trust him to deliver what he had promised in their verbal agreement.
Being able to recognize something as a culture clash when it arises requires a certain mindset. And it’s something leaders would be wise to develop or hire, Brett says.
Cultural sensitivity is being able to say, “I see that you’re not just trying to be difficult, but rather acting as you normally would, given your culture,” she explains. “So if you can label it as ‘cultural,’ then you can start to say, ‘Okay, now I understand where they’re coming from, let’s see how I can deal with it.’
2. When people feel slighted
Some of the most intractable conflicts in the workplace involve bad behavior between two or more people.
Cynthia Wangclinical professor of management and organizations at Kellogg, and her colleagues reviewed hundreds of studies on workplace misconduct that showed how people responded to negative behavior.
What stood out most to Wang and her colleagues was a marked trend toward mutual, adversarial forms of retaliation across the different aspects of misconduct they studied. This surprised her.
“I expected an eye for an eye to some degree, but I also expected more escalation or de-escalation, depending on the context,” he says.
Since negative workplace behavior is relational, punishing individuals may not break the cycle. Instead, Wang suggests that it might be more effective to focus on helping conflicting parties work together to de-escalate conflicts. And because negative workplace behavior begets further negative workplace behavior, the most important thing leaders can do is prevent people from becoming instigators in the first place.
“If a person gossips about someone else, or sabotages other people in minor ways, if they take their resources or steal their ideas, there will be a response,” Wang says. “If you stop one, though, you might as well stop the other.”
3. When bosses overlook inequality
People in positions of structural power report less inequality in their organizations than other workers, according to a series of studies led by Mariam Kouhakiprofessor of management and organizations at Kellogg.
But there is a way to get them to look past their own biases and take steps to address potential discriminatory conflicts.
In one of the studies, more than 700 managers and supervisors were asked to allocate $50,000 of their workplace budget to one of six task forces, including one designed to review and improve practices to reduce discrimination and bias. Before the allocation of resources, some of the respondents were asked to recall an occasion when a person in their workplace experienced bias or inequality.
Those prompted to think about past inequality allocated 30 percent more funding to anti-discrimination initiatives than those not prompted. In other words, exposure to the idea of inequality in the workplace increased managers’ recognition of inequality—and their willingness to take action to address it.
Koutsaki advises leaders to actively seek out processes that could perpetuate inequalities—and sow conflict. Pay may be equal for both men and women, for example, but bonuses may not be.
“Make sure you’re intentional and gather information about potential disparities,” he says.
4. When bad news breeds bad behavior
In the first quarter after Donald F. Hastings took over as CEO of welding supply maker Lincoln Electric in July 1992, the company reported a disastrous $12 million plunge in assets.
One of the key tensions Hastings recalls was figuring out how to handle workers’ compensation in light of those losses. The company was known for offering hefty year-end bonuses, which, in part, was why many of its workers signed up for life and the company dominated its market. So Hastings had to decide: Set a potentially dangerous new precedent by borrowing to pay the bonuses, or not pay them and undermine employee motivation?
Niko Matusekprofessor of strategy at Kellogg, and his colleague developed a model to study this kind of dilemma.
They found that workers were most productive after being paid a bonus—and assured of another bonus. But when they were denied a bonus, they punished their managers by gradually reducing productivity. When companies were cash-strapped, managers found it particularly difficult to deal with the conflict and sometimes lost their workers.
But, the researchers write, managers could turn the tables by being transparent about the situation and helping “the worker understand that more effort relaxes the company’s liquidity constraint, which, in turn, allows the manager to pay him a bigger bonus.”
In the American workplace, trust between workers and management is key, researchers say. Otherwise, workers are likely to punish businesses with reduced productivity or even abandonment, just when their efforts are most needed.
5. When you compete against your former team
In competitive markets, companies are often willing to go to great lengths to come out on top.
To understand what happens when people compete against their old teams or former teammates, Brian Uzzi and Contractor Noshirprofessors of management and organizations at Kellogg, along with their colleagues, analyzed data from more than eight seasons of Indian Premier League cricket players, teams and match results.
They found that when a team was familiar with more players on the opposing team, it was much more likely to win a match against that team. Additionally, a team’s familiarity with opposing team players proved far more critical to its success than the team’s overall ability or the past collective success of its players.
“It shows that winning isn’t just driven by individual talent or team spirit,” says Uzzi. “It also has to do with how much experience the players have with the teams they are playing against.”
The same could be said for academic, business and other types of organizations seeking competitive advantage.
At a university, for example, “you’re fighting to get the best students and funding,” says Uzzi. “That could come from taking top talent from another school and finding out how those schools competed for those things, and then maybe adopting some new practices based on what you learn.”
That line of thinking may be what motivated Apple to hire many employees from Tesla’s electric car team years ago when Apple was looking to get into the business, Uzzi says, “and they were trying to get those kinds of secrets.”
