Jan 12, 2018 in Management

Facilitating the Conflict

Introduction

All organizations in the contemporary world always try hard to make sufficient amounts of profit that would ensure they remain a going concern. They always aim at minimizing costs and increasing the amounts of revenues to perform significantly in the ever-changing competitive market. Salaries to employees and executives form a large part of expenses within every company and must be moderated effectively to ensure that the organization derives profits from its operations. It is vital to note that an executive team is always in charge of overseeing vital aspects of an organization such as human resources, ecommerce, retail/sales, general counsel, international operations, and supply chain. Due to the performance of these duties, the executive team demands higher salaries because of the feeling that it runs all the affairs of the company. Shareholder-management conflicts are likely to arise because of the demand for higher salaries, which limit the profitability of the company. For instance, in the Fortune 500 Company, that has an international office with 15 years of operation, each Executive Officer is entitled to $300,000 per year and each of them has an opportunity to earn a bonus amounting to half their salaries. More so, the company employs 33,000 retail associates and 2,000 corporate officers, implying that it spends heavily on salaries and provision of the affairs of employees. The company envisages an increment in sales and profitability, and this would be achieved only if the executive team agrees to cut down the annual $3 billion budget by 20%. Therefore, it is vital to negotiate this move with the team to avert any doubts and fears. Effective communication with the executive team and junior employees would lead to effective understanding, which would help eliminate the existing conflict.

Significant steps would have to be followed in the process of trying to gain a buy-in for change first from executives and then from lower-level employees. This would save much money for the organization and would ensure that it realizes its dream of increasing sales; reduced expenditures would transform to increased profitability. The steps to be followed include assessment, design, contracting, implementation, and follow up. These steps would play an instrumental role in saving the company and ensuring that it is able to perform effectively like other Fortune 500 companies. It would be better placed to earn more revenues from its operations due to the reduced costs of operations. In the resolution of the conflict existing within the organization, some decision dilemmas would automatically arise. One of the key decision dilemmas would lie in convincing of executives to accept a reduction in their salaries despite their significant performance. It would appear unethical to demand a reduction in the salary of executives especially when the company is deemed to perform better. Again, it would be difficult to convince the executive team to cut down its costs since the company is among the top businesses.  According to Alberta Human Services (2007), the company is among the Fortune 500, indicating that it operates effectively. It is vital to gain consensus amongst the executive team in order to ensure that everything planned runs as smoothly as possible. Therefore, consensus could be gained through organization of meetings where they can share their views. Executives will feel more appreciated if they are involved in discussions, and this will help in the building of a consensus. Conflicts may also arise between the executives and shareholders because of the feeling that shareholders are plotting to make enormous gains at the expense of the executives who would be earning lower amounts.

This paper explicates significant steps that could be used to reach a consensus with the executive team at the Fortune 500 Company, hence ensuring that the goal of increased sales is realized effectively and the company competes with others significantly.

Effective Steps to Convince Executives and Other Employees

Assessment is the first step that could be used to save the company and gain a buy-in from the executive team and other lower-level employees. Notably, assessment entails asking of a wide range of questions with the aim of getting adequate understanding of the entire situation. It is vital to make a thorough analysis of the client’s situation as this will facilitate understanding of each party’s interest in the desired matter. Assessment must involve in-depth inquiries to ensure that every aspect is covered adequately and past conflicts and hidden interests are eliminated. Effective assessment would play a vital role in the creation of a design that would ensure that the entire situation is comprehended properly. For this purpose, a face-to-face meeting with shareholders and the executive team should be organized to ensure that adequate information is gathered and any form of misunderstanding is eliminated. Notably, assessment would play a key role in uncovering the history of the company and its potential. For instance, it is noted that the company is ranked among the Fortune 500 and has the potential to earn more revenues through increased sales in its operations.  Hayes (2008) asserts that assessment would also present vital information, such as the large number of employees working for the company and the large amounts of annual salaries for each of the member in the executive team. It is the company’s desire that the current budget of $3 billion is cut down by at least 20% to increase sales and ensure that the company earns adequate profits that would maintain its relevancy as a Fortune 500 Company. In this step, executive and lower level employees would be involved through interviews, which should entail asking of numerous questions to find out how they perceive the company’s desired action of cutting down operating costs. They would be involved in discussions, and this is a significant step toward ensuring that efficient communication is established in the course of the facilitation. They would feel that they are involved and their ideas are welcome in overall discussions pertaining to their situation.  Therefore, assessment would be completed effectively and would present the background information that would enhance the facilitation exercise.

The second step that would assist in the acquisition of a buy-in among executives and lower-level employees is design. In this step, it is important to analyze the data collected from assessment. A keen analysis of the data collected would assist in the creation of a better design that would be used effectively in the process of trying to find a consensus. One of the key objectives of design is to interpret the data that was collected at the assessment phase, hence ensuring that it is understood. The interpretation of the collected data is vital because it ensures that no gaps are left in the process of trying to find an amicable solution to the problem at hand. Design is also purposed at creating a draft meeting design. This would ensure that every issue that is to be discussed with the executive team and lower-level employees is prepared as required and effective steps are followed when addressing these matters. Constant reviews of the data must be conducted to ensure that the data presented is more effective and would help in the resolution of the existing problem in an amicable manner. Therefore, accuracy would be achieved at this step by continued reviews of the data pertaining to the company and the large amounts of salaries to which executives are entitled each year. This would be addressed in line with the interests of the company, hence ensuring that the executive team and lower-level employees understand the situation at hand. A proper design would help them understand that the company needs to remain a going concern, and this would only be achieved if the company is given adequate space to earn profits through increased sales. The company should also be able to remain significant in the competitive market, and this could be achieved through a decrease in expenditures. Therefore, the design would be proper and would conduct a careful analysis of the data. Notably, the design would be also accurate and would be in line with the data relating to the company and its operations. Due to this, everything at the meeting would move in a smooth manner. Everyone would derive sense out of the intended discussions pertaining to cutting down the costs of operation to improve the sales of the company and ultimate profitability.

The third step that would be followed in gaining an understanding from the executive team and lower-level employees is contracting. Contracting is a vital step because it officially sanctions the assignment. A buy-in from the executive team and other employees could be achieved at this stage. A summary of the data pertaining to the operations of the company and its envisaged increment in sales would be effective. It would ensure that the executive team is convinced to change some of their interest and look forward to positive changes in the company. They should be informed that their efforts are appreciated in the company and that they should take care to ensure that the company remains relevant in the market as this would secure their jobs.  Lezhnev and Hellmuth (2012) confirm that executives and lower level employees should be allowed to participate and play a vital role in ratifying the summarized information collected through assessment. All the issues brought up by the executive team and the involved employees should be accommodated appropriately to satisfy everyone and make everyone feel that they are part of the desired change. The sharing of assessment data should be done in a proper manner in order to ensure that it reflects neutrality and the desired level of understanding. Every member involved in these negotiations must feel that he/she is appreciated and everything is being done for the good of the company. At this stage, everyone would be listened to as required and the appropriate steps would be taken into consideration to ensure that the desired responses are addressed. All the views would be taken into consideration to avoid a situation where the executive team feels that their rights are being infringed upon. They should feel secure and appreciated by the company at all times. The accommodation of their views would be a reflection of the appreciation of the company and its commitment to ensuring that all employees from the executive team to lower-level employees in the company are satisfied. All their views would be accommodated and embraced with the aim of ensuring that employees are working appropriately for the success of the company, which would secure its future and hence their job opportunities. Thus, the contracting step is vital as it would form a key stepping-stone to gaining a buy-in of executives and other employees. They would be treated accordingly and their views would be taken in through an open forum, which would ensure they work appropriately in a successful company.

The fourth step is implementation. This step would be taken after the placement of a strong contract within the company. Implementation would be geared to a successful meeting with the executive team and other lower-level employees with the aim of ensuring that a buy-in is arrived. The implementation stage would bring a lot of confidence and ensure that all parties are able to work effectively toward the success of the company. Matters relating to the common good of the company would be addressed and there would be no gaps left because of the rapport that is build within the company. Everyone would come to the meeting informed about the details of the meeting because the agenda would have been already sent as the letter of agreement. The sending of the agenda of the meeting to the interested parties is vital because it would ensure that they come to the meeting with confidence and an understanding of what is supposed to be discussed. Prior to the start of the meeting, the room would be arranged appropriately and adequate seats would be set for each person. Implementation would play a vital role in finalizing the design and ensuring that proper outcomes are attained. It is vital to share the required ideas with all individuals at the meeting to ensure that they feel part of the meeting and work toward the prosperity of the company. It is worth noting that the implementation stage would help to measure the satisfaction of members according to the raised ideas. In this case, the executive team should be made to understand that a reduction of 20% in the expenses of the company would promote the welfare of every individual. The executive team and lower level employees would be convinced that the company is looking forward to securing their future and would not limit their enjoyment of bonuses and enormous salaries. Thus, the entire meeting at this step would be conducted in the right tone and attitude. Executives would embrace this tone and would understand the need to change their salaries and the large amounts of bonuses. The level of satisfaction among all members would be determined through their appearance at the end of the meeting. They should still be happy and feel that the company still cares about their interests and positions. The promise to remain committed to performing effective duties in the organization would ensure that the level of satisfaction among these employees is high.

The last step would be the conduction of follow-up activities. Follow-up activities help to direct the energy and efforts after the end of the meeting.  According to the Search for Common Ground (2003), follow-up activities are always aimed at ensuring that the company is effective after consultations and meetings have been completed. Follow-up activities are vital because they involve the monitoring of activities after the meeting, hence ensuring that the progress of the discussions is monitored. The follow-up step is always purposed at checking on the outcomes of the meeting. As noted earlier, the meeting is supposed to convince all individuals and measure their levels of satisfaction appropriately. It would also present an effective avenue for shareholders to get effective feedback concerning the responses of the executive team and all other employees in the company. This feedback would guide shareholders in ensuring that the company starts improving its sales as costs of operations are reduced. The future of the company would also be drawn from facilitation activities embraced at the company. It is significant to assert that the actions of the executive team and lower-level employees reflected through follow-up activities would help in determining their attitude toward the change. The meeting at the implementation step would assist in the acquisition of buy-in of the executive members and other employees. The follow-up activities coming after the implementation stage may also assist in the creation of an adaptive mechanism that would enable the executive committee and lower-level employees to adjust and work in line with the changes put in place. Follow-up activities would ensure that success is achieved in the organization. Therefore, this stage will monitor the reaction of all individuals involved in the success of the company. It would monitor the success of the entire facilitation process. Executives at the company and other lower-level employees would learn the significance of cutting down the costs, and it would lead the company to its goal of increasing sales.

At the end of the entire process, the executive team would be satisfied and everyone would be working appropriately toward implementing the new change in the company. The company would have been saved. It would be working toward ensuring that all employees are taken care of and effective measures are taken to accommodate all their needs. The continued commitment to the objectives of the company would reflect the positive change in the minds of all employees. They would understand that the company cares about them and the change is not being introduced to restrict the enjoyment of their rights in the company. They would understand that everything is taking place in good faith.

Decision Dilemmas and the Gaining of Consensus among Executives

One of the key decision dilemmas that would be experienced is the decision to reduce the salaries of the executive team and maintain the salaries of all other employees.  Schwarz (2002) opines that the executives of the company would not find the reduction of their allowances reasonable if those of other employees in the company are maintained. They would not understand that their salaries are excessive and lead to more expenses within the company. Thus, there would be a dilemma in making the decision to reduce the salaries of all executives and maintain the salaries of all other employees. Some of these executives would not be satisfied with the fact that other employees are not affected by the change.  The dilemma could make it difficult to get a buy-in from the management and it may lead to animosity even in the process of the facilitation. This implies that the facilitation process may fail if appropriate care is not taken, and there would be no successful arrival at the envisaged change, which is deemed to increase sales and the level of profitability for the company.

However, consensus from the executive team can still be achieved through exhaustive discussions and accommodation of their point of views during the meeting. It would be vital to organize a meeting with the management and ensure that exhaustive discussions take place. Their points of view would be accommodated, and there would be an assurance that the reduction in the expenses to meet new goals of the company would not affect their positions. Consensus would be gained if the executive team would be made to understand that everything is aimed at improving the significance of the company as a Fortune 500 Company. This measure would ensure that all executives derive meaning from the discussions and get an understanding of the reasons for the desired change. Therefore, consensus would be attained through exhaustive discussions and meetings with the executives and the highlighting of the significance of increased sales to the company.

Key Conflicts that May Occur and Intervention Strategy

The key conflict that may occur is the shareholder-executive team conflict. This conflict would arise because of the existence of suspicion between these two parties.  Vidal (2002) agrees that the executive team would feel that shareholders are using the opportunity to maximize their benefits and minimize the benefits of those involved in the performance of all activities in the organization. On the other hand, shareholders would be suspicious that the intention of the executive team is to swallow all the revenues generated by the company instead of working towards ensuring that the company is successful in its operations. The key intervention strategy for this conflict is settling the entire matter amicably by bringing both of these parties to the table. Each party should be allowed to raise its concerns, and there must be an assurance that the decision to change expenditures of the company is done in good faith to facilitate the success of the company. Discussions would ensure that the conflict is resolved between shareholders and the executive team, hence leading to the building of trust between these parties.

Conclusion

In conclusion, a company should always work toward profitability and provide for the welfare of all stakeholders appropriately. The company in question, a Fortune 500 Company aims at reducing the heavy expenses of $3 billion by 20% to ensure that there is an increase in sales, which could also lead to the increase in the level of profitability. Facilitation is a significant measure that would ensure that a buy-in from the executive team and lower-level employees is gained and the goals of the organization are realized. Therefore, it would be effective to adhere to vital facilitation procedures to ensure that the executive team is convinced that the change is being made in good faith and is geared toward securing the future and competitiveness of the company. The first step would be assessment; at this stage all the necessary information would be collected and used in the entire process of making the change in the company. The second step is the creation of a design, where an appropriate design for a buy-in meeting would be formulated. The third step is contracting that plays a vital role in the acquisition of a buy-in of the management. The fourth step is implementation, where a meeting aimed at convincing individuals to accept the changes is conducted. It is vital to conduct the meeting in an effective manner to ensure that its details are accepted. The last step is the conduction of follow up activities. Follow up activities are utilized to determine the success of the entire negotiation procedure through meetings and other forums.

It is vital for employees to pay attention to the interests of the company and not only be limited to their personal interests. Companies such as the one in question have goals, attainment of which would ensure that they remain relevant in the market and work toward success. Thus, the executive team should understand that excessive expenditures on salaries and bonuses would affect the financial position of the company and may make it difficult for the company to continue with its operations. 

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