Food Merchandising Corporation’s Conflict Management Report (Assessment)

Establishing a business is never going to be an easy task. Everyone is aware of the high rate of failure of start-up and first time entrepreneurs are always fired up to start a business only to declare bankruptcy later on due to many unforeseen problems or the lack of capability on the part of the management to operate the said the company. If the enterprise survives the first five years in operation then there is a great chance of a good return of investment and the possibility that the company will thrive for a long time.

Still, there are many pitfalls along the way and it is not uncommon to hear of a ten year old company suddenly on the auction block because it is no longer viable to operate the business. As mentioned, there are many factors. The most important is to ensure the profitability of the enterprise and this means continuous production and then selling the product to earn a profit. The profitability of the company on the other hand is determined by the ability of the company’s leadership to effectively manage personnel and resources to sustain the profitable run of the company.

In the case of the Food Merchandising Corporation the company has had success in the meat processing business for a long period of time. But in recent times it encountered problems in personnel management. There was friction between two major groups the Butchers and the Luggers. The problem concerns job satisfaction that in turn can be traced to the following elements:

• Job status;
• Earnings;
• Workload;
• Overtime.

But a closer examination of the facts of the case will reveal that the complaint is rooted in the ill-feelings harbored by the Butchers group against management because they feel that their foreman and manager are not helping them sort out their problem against the Luggers and as a result they also feel that perhaps management did not really care about their plight. Thus, the Butchers demand change and they threatened to disrupt the operations of Food Merchandising Corporation by staging a massive walkout.

The solution calls for a quick intervention from management before the problem gets out of hand. Ideally the manager in-charge of the warehouse in Northern New Jersey should be able to reduce the tension and find ways for the Butchers and Luggers to come into some form of a compromise – a deal which will benefit both parties. But if this is not possible, if the manager is also part of the problem then it is time to go above him and this may now require the CEO of the company to intervene.

When the CEO initiates the process of resolving the issue he will have to do the following:

• Gather all pertinent facts and this should include not only the hard data but also the soft facts such as the kind of relationship that exist between the employees and between the management and staff of the said warehouse;
• Create a strategy that will resolve the issue;
• Ensure a successful implementation of the plan.

The following pages will describe in detail how the CEO will gather information, create a system that will enable him to listen to all parties and then come up with a strategy that will increase job satisfaction of all the workers in the warehouse. The CEOs decisions and actions will in turn be guided by sound management principles gleaned from the study of numerous scholarly works pertaining to conflict resolution.

The Issue

The work of the Luggers used to be a backbreaking job but not anymore. The ingenious use of portable rails allowed them to do more work at half the time. This gave them plenty of opportunity to earn more as they found a way to earn extra income by doing work outside the scope of their duties and responsibilities. This initiated a chain reaction of events that left the Butchers feeling left out, unappreciated and underpaid.

A knee-jerk reaction to this issue can result in creating solutions that are temporary such as in giving more money to the Butchers, and come across as some sort of bribery to keep them quiet. But after a long time the extra money will not make them happy because management did not deal with the root of the problem which is that the group felt unappreciated by administrators of the warehouse. They also have to deal with the issue of Mr. Abrams micro-managing the warehouse and creating the idea that he is always peering over their shoulders and castigating the Butchers for minor infractions such as frequently going to the bathroom and engaging in small talk.

It all begins with the top management. Top management must act to diffuse tension between the two groups. This is because, “In traditional organizations, top management typically has the most governance over the Purpose, Principles, and Processes with an organization” (Pryor, White, & Toombs, 2007, 16). This can be done by creating a framework, a non-negotiable framework that will help establish principles by which the company will operate (Pryor, White, & Toombs, 2007, 16). This framework will allow freedom but at the same provide a system of controls.

Factors in Favor of Management

The Butchers threatened to disrupt operations and they wanted to the union so they can air their grievances and at the same time allow the union to come in and intervene. There is no company in the whole world who would like the union to come in and create a mountain out of a molehill; the union can easily blow this problem out of proportion. The leadership of Food Merchandising Corporation could not allow that to happen. Besides that there are so many factors in favor of management that will allow it to resolve this issue internally.

First of all the eight butchers had been with the company for a long time. They are loyal to the company and they would go to management first to air their grievances before they will consider going to the union. Secondly, they are known not to participate in union affairs. This is probably the reason why the group did not earn the favor of Josh the union representative and the same reason why their path to the union was blocked when they tried to approach them after the issue with the Luggers became unbearable.

If the Butchers succeeded in working with the union then it will mean that the situation has gone from bad to worse and after this stage even if the union can force the company to make reforms the damage has been done. According to many experts there is more downside than upside to dealing with union and it is imperative that “Employers must handle issues before unions do” (Ballard & Wakefield, 2006, 22). There is the temptation to ignore the issues and hope that it will go away. But there are many who warned that, “Unresolved conflicts don’t disappear on their own and may be more costly when they are not resolved promptly” moreover it is important to resolve issues because “…successful conflict resolution is good for building confidence to help in more difficult situations that may surface later on” (Cottringer, 2003, p.3). The management must be committed to act now and resolve the issue concerning the complaint of the Butchers.

Resolving the Issue

After creating the strategy that will solve the problem management should focus on implementation. The strategy may be sound but if it could not be implemented correctly then it is useless. It will stay on the drawing board and will never take off. Experts agree that, “…in the dynamic hypercompetitive environment of today, savvy executives realize implementation is just as critical, if not more so, than the development of effective strategies” (Pryor et al., 2007, p. 3). This is easy to understand because if the company will spend a great deal of time and resources in developing strategy and yet at the end of the planning stage is unable to pull the trigger then they are not only wasting their valuable resources they are creating a signal to the group that the company will never improve and will be mired in the same problem year after year after year.

So how does one come up with an implementation plan? In answer to that question, the ideas of Galbraith and Nathanson will prove beneficial and they wrote:

Ideally, an implementation effort … doesn’t concentrate on implications of only one component such as the organizational structure. When implementing a new strategy, it’s dangerous to ignore the other components because strategy implementation requires an integrative point of view. You need to consider not only the organizational structure but the soft facts as well – the cultural aspects and human resources perspectives (Pryor, et al., 2007, p. 6).

In the case of the Food Merchandising Corporation management has to be well aware of statistics and other components of organizational structure. This means that management should not only look at the numbers like for instance the number of employees working in the meat processing facilities, the number of workers working in loading and unloading the meat products coming in and out of the company premises. They must not limit their knowledge to who is the foreman, the manager etc. They have to be well aware of the different groups and sub-groups that exist within the organization.

If the CEO and his team will simply take an overview of the annual company reports and not get involved with the day-to-day operations he will not be aware of the fact that over the years two distinct groups had emerged inside the company. This is due to the fact that there are two main job descriptions within the Food Merchandising Corporation organization. If the CEO will take great pains in knowing what is happening beneath the surface then he will realize that over the years there are now two tightly knit groups the Luggers and the Butchers.

In this regard it must be noted that it is better to focus on the impact of group dynamics rather than to focus on individual problems. As pointed out by experts, “…various aspects of group process and group dynamics serve to ameliorate and exacerbate the impact of conflict has on group outcomes generally” (Behfar, K. et al., 2008, 170). There is a need to find out more about the impact of group dynamics in the way that the Butchers will come up with a solution to solve their problem. For instance it must be determined correctly if there is a leader among the group and that if management will be able to have a dialogue with that particular leader and if he in turn can convince his team to step down and allow management to resolve the issue without having to see them walk out from the factory.

It could not be stressed enough that in order to establish an open line of communication with the company there is a need to first ensure that the union will not be able to gain a beachhead and muddle the issue with their tactics. According to one analyst, “Most people in America don’t know that labor law in this country has been so twisted that it is now virtually impossible for workers to form a union without running the risk of employer harassment and even termination” (Lucy, 2007, 13). This means that employers have the advantage and they have to use this card effectively. They cannot bully the workers in the manner that Mr. Abram had been doing for the past two years. They cannot use this advantage to increase the suffering of the workers because at the end, inefficiency will add up and will cost them significantly in the long run.

It has been made clear that one way of solving the issue is to empower the people in the workplace. But top management must be wary of the pitfalls, for instance, “Contradictions (such as telling the People they are empowered but maintaining organizational Processes which do not support empowerment) lead to frustration and confusion due to mixed signals, and employees do not know which behaviors are the most appropriate” (Pryor et al, 2007, 18). It is correct to establish control but not the type where the people will not be able to contribute to help in increasing the efficiency of the problem.

In the case of the Luggers the company did the right thing in encouraging two of its members to develop a solution for easing their workload. A narrow-minded manager could have prevented them from doing something that is not part of their official responsibilities but in this case they were correct in giving them the freedom to manufacture a device that will increase the ability of the Luggers to finish their jobs on time while at the same time provide an incentive for creating a new income stream.

In order to truly empower the people it is not enough to give them the freedom to help ins solving the problems existing within the warehouse they must also be given the chance and the capability to express how they feel working under the existing management. This is not going to be easy. This is similar to the problem of police brutality wherein the victim could not report the problem to the authorities because in the first place they are the problem. So the worker has this dilemma if they are working under an inefficient boss. How can they criticize the manager if the manager has the power to fire them or resist their promotion?

In this regard experts agree that in many factories and offices around the world people are prisoners of their work, “They are prisoners of work for reasons relating to processes, ineffective managers, work environment and culture and organizationally induced helplessness” (Pryor, Humphreys, & Taneja 2008, p.22). In the case of the Butchers they are suffering from organizationally induced helplessness. They cannot go to the manager, they cannot talk to the foreman, and they cannot talk to the union representative. All pathways of communications are blocked in their view.

But at the same time they should be made to understand that going to war with the company is an option that should be considered as a last resort. According to analysts and human resource experts, “The cost of employees to pursue an unfair employment claim is also high. Because the employee who charges an unfair practice is often no longer employed, the employee may face great legal expense at a time he or she can least afford to do so” (Barth, 2002, 19). The same can be true for the employers and their management team. It is costly to hire lawyers and it is costly to lose workers only to spend more money to train a new hire. Thus, it does make sense to resolve the issue internally without the aid of the union or expensive lawyers.

Conclusion

At first glance management can interpret the situation as a mere case of envy, meaning the Butchers are envious of the extra money that the Luggers are able to bring home each week. They can interpret it this way and they can just as easily dismiss it as something petty. But by doing so they will be allowing a problem to fester and as a result work performance can suffer. In the worst case scenario the Butchers will be forced to do what they have threatened to do and it is to stop working thereby creating a major problem in terms of creating shortages in the supply of meat products.

Management could easily misread the situation and make a hasty decision that the Butchers are simply acting up and that based on their past performance and their past actions the management can be fooled into thinking that the Butchers are a conservative group and pro-company that they will never walk out of the company – for no such thing had ever occurred in the long history of the company, particularly in this warehouse at the northern part of New Jersey. Yet if they will continue to ignore the Butchers then they will be in for a surprise because the Butchers are already fed up with what is happening.

The first major step that management should do is to do everything in their power to keep the union out of the issue. They cannot afford to have the union create a mountain out of a molehill and create unnecessary problems along the way. If the union is involved then the discussion can be limited to the surface issues such as more money and less work. This is not the case here. The workers are not really asking for more, they are only asking for a chance to be heard and to be appreciated. They are also asking for fairness in how they are being treated. If the union takes over then the company will not be able to understand the undercurrents of the issues and they will be forced to only focus on the business side of the issue when in fact there is a problem with how people relate to each other.

This is the time that top management should come in and intervene. Obviously, the lower level management team assigned to the company is not doing their job. No one should entirely blame Mr. Abrams the manager for the fiasco because he is new to the job. Mr. Abrams had been at the helm of the warehouse for only two years. There is not enough time for him to fully grasp the situation and thus he was unable to perceive office politics and the bickering that was happening in the said warehouse. Still, this is no excuse because as a manager it was his duty to know these things.

He should have been aware to look into the hard data as well as the soft data such as the fact that the Butchers are a tightly knit group sustained not only by the satisfaction derived from their job but also by the camaraderie enjoyed by the team. Soft data also means the information derived from talking to the workers and ascertaining what they truly feel regarding the situation (Parks, 2006, p.50). This is the reason why the group was able to endure the cold temperatures inside their work area and not only because they are paid well and perceived to have the high status jobs.

Mr. Abrams should have also known other things such as the fact that the Butchers are unhappy by the way Hank was running the show inside the warehouse. He should have been well-aware of the fact that Hank was not treating everyone fairly. And finally Mr. Abrams should have been aware that his management style of micro-managing created undue tension in the workplace because the Butchers felt that they were working under the microscope and yet the Luggers who are generally dispersed all throughout the warehouse, could not be supervised closely (Ryan, 2006, para. 7). At closer inspection the Luggers were not a highly favored team by Mr. Abrams its just that he could not monitor them as closely not unlike the Butchers who only stayed in one place so a surprise visit will really determine if they are working or not.

Mr. Abrams should also be aware that the only reason that the Butchers are not yet working with the union to air their grievances is simply because they are not in good terms with the union representative, Josh. This means that the warehouse operation is not safe from the potentially destructive intervention of the union. Still this must be viewed as temporary respite for the company and that they still have time to remedy the situation. If they will tarry, it is possible that Josh can be replaced by another union representative that will be more sympathetic to the Butchers. It is now time to act before it is too late.

Now, a knee-jerk reaction would be to authorize an increase in the salary of the Butchers. The management can come up with this solution if they would consider the fact that the Luggers were only able to bring home an extra $30-$40 a week. If the company decides to make that pay hike they can reason that it is not such a bad proposition considering that they will save more compared to the prospect of shutting down the operations of the warehouse in the event that the Butchers will stage a walk-out.

The only problem with this solution is that it is like a band-aid applied to a gaping wound, it will not be enough to cover all the problem areas. The relief that it provide to the Butchers will be temporary. This conclusion is based on the information that there was more work available for the Luggers and this could easily mean that their earnings can easily fluctuate from $30 to $60. Although the Luggers are not assured of steady pay the Butchers may wrongly perceive that they are getting much more money from doing work on the side.

If this will occur then management is back to square one. They will also come to realize soon enough that money is not the only motivator. In fact based on what mentioned in the preceding discussion, money is a poor motivator for it will only be able to keep an employee motivated for a short time. Thus, if the employee is not truly happy with what he is doing and what is going on in his workplace that employee will always feel that there is something to complain about.

Another knee-jerk reaction would be to suddenly take a keen interest on what the Luggers are doing when the activity in the warehouse is at its low point. Mr. Abrams can shift his focus on the Luggers and this would mean that instead of only having to deal with the Butchers he is now creating another problem area by creating conflict with the other group. Another knee-jerk reaction would be to issue a directive to the Luggers that they cannot work on the trucks during company hours and that they can only do extra work on the trucks before and after their shifts. This means decreasing their income potential and decreasing the efficiency of the warehouse. This will surely backfire and make the Luggers an unhappy bunch.

Based on the data presented it is obvious that Mr. Abrams is not yet experienced enough to handle the situation. Aside from the fact that his skill as a manager is suspect he is also handicapped by the fact that he does not know his workers by heart. For him they are mere statistics. He was also unable to fully utilize his foreman and his staff to provide him accurate information especially with the “soft facts.” What he is currently doing can be likened to a defective system employed in a parole system where a convicted bank robber is taken off the streets and placed behind bars. The prisoner is now unable to rob banks because the system forced him to behave while incarcerated but by the time that he is paroled and free again the same ex-convict will rob another bank, “…80% of crime are committed by repeat offenders” (Pryor, 2007, p. 16). Thus, Mr. Abrams forced his workers to behave if he is around but they will revert to their old ways when he is not around. It is a waste of time and energy for both parties. It is time for top management to come in and fix the problem.

As mentioned earlier, top management will have to send a team to help Mr. Abrams sort out his problems with his crew. The first thing that they should do is to gather pertinent information. Based on the hard and soft data they will be able to create a strategy based on the ideals of a) people empowerment and b) conflict resolution. Based on the information that they will gather they will come up with a strategy to empower the employees and this begins with creating an open communication line between the Butchers, Luggers and management.

The team will guide Mr. Abrams and enable him to learn more about the company, their policies and expectations at a faster and more efficient rate. Their help will be much appreciated in the area of interpreting and analyzing the information collated from the dialogue with both groups. This can then be incorporated into a grand strategy that will significantly reduce the bickering and enhance the efficiency of the company.

At the end of the planning stage they must be ready to implement. This is a critical stage in the process because they can be spending a lot of time, money and effort in putting together a plan but if they will be unable to implement it then both the Butchers and the Luggers will feel that not only Mr. Abram was inefficient but now the top management of the company can be perceived as ineffective as well. Thus, the second time that they will ask for their inputs it is very much possible that the two groups will less enthusiastic to participate and become cynical about the whole process.

Aside from creating a strategy to open the lines of communication that allows rank and file personnel to express their problems and complaints to the management the following concrete steps can be pursued:

1. To help the Butchers understand that although the Luggers are doing well with their ability to make extra income, they are not always assured of a steady stream of income. Even if the Luggers are finding extra work it is the Butchers who had the more prestigious job and that the company appreciates their skills and dedication to the company.
2. The company will have to train Mr. Abrams to polish his people skills so that when he deals with his people he will deal with them fairly. He must also be trained to be able to take the lead in fostering an atmosphere of open communication. Mr. Abrams should make it clear that he is accessible every working day and that the Butchers as well as the Luggers will be able to drop by and visit with him every time they feel they have to.
3. Mr. Abrams should be trained to create a more effective method of monitoring the status of the workplace and his crew. He must not employ obsolete techniques that force him to micro-manage the situation (Ryan, 2006, para. 7). He must not be perceived as someone always hovering over the shoulders of the Butchers.
4. With regards to the Luggers the company should appreciate their ingenuity when it comes to solving the problems related to their work and as a result did not only contribute to improve the efficiency of the workplace but also create an income stream that added more satisfaction to their jobs. But the company must work with them to place “controls” especially in the way they use company time to work beyond the scope of their responsibilities (Gambacorta, 2007, par. 3). This is not to punish them for being entrepreneurial and able to create extra income. This is all about fairness in the workplace. Thus, one possible solution is to reduce the amount of money they can earn from working overtime or reduce the amount of overtime that they can charge the company. This can be compromise between the Luggers and the company since they are allowed to work the trucks during company time. This will ensure fairness in the workplace
5. Another possible solution is to create a system where it is possible to rotate jobs. It will now be mandatory for Luggers to train as Butchers. In this way the company will be able to hit two birds with one stone. First of all, the company will be assured of having a steady supply of Butchers. Since it requires more skills to be butcher as opposed to being a Lugger, the work of the Butchers is a specialized skill that requires time to learn. In the event that a butcher will report in sick the operation can easily suffer from a slowdown in work efficiency (Engle, 2008, 20). Thus, it makes sense to require Luggers to train as a butcher. In the same way the Butchers can also be asked to learn how to be a Lugger although it is very obvious that this does not require extensive training only the ability to do heavy work. If a butcher is willing to be a Lugger then he will be given the chance to learn their trade. Secondly, if there is now a new batch of Butchers as a result of the “cross-training” program then the company can implement a program where some of the workers belonging to the Butchers can cross the line and work as Luggers and vice versa (Nancherla, 2008, p.83). In this way the Butchers will come to realize that the Luggers may earn a few dollars more each week but their jobs require the strength of youth. This will help the older butchers to realize that this job is not for them. This will also allow the Luggers to experience the challenges faced by the Butchers and this will result in making them feel a healthy appreciation for the work done by their colleagues (Houlihan, 2007, 4).

As mentioned earlier it is important to resolve this issue now before it will escalate into something that will cost the company more money and quite possibly the service of their most trusted men (Training & Development, 1994, p.13). The management of Food Merchandising Corporation should bear in mind that if they will be able handle this issue correctly they will increase the confidence of their people and encourage them to work out their differences in a constructive manner. This will also signal to the workers that management cares for them and thinking about their future and their welfare.

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