Conflicts are almost inevitable in human life. It is also inevitable in organizations or even between nations such as Ukraine and Russia or the US and China. The conflicts in the organization or between two countries may arise due to competition, leadership styles, or even scarcity of resources such as oil. Conflicts within a company need to be well and timely managed, else it can lead to low productivity or service delivery, or worse, losing its market share. Believe it or not, conflicts can also give positive results, if managed well and be viewed as a positive opportunity. However, most people think conflicts are evil and should be avoided even though it means they have to sacrifice something. Resolving conflicts requires the causes to be understood and having high emotional intelligence. High emotional intelligence means you can understand and manage your own emotions, and those of the people around you. For leaders, having emotional intelligence is essential for success.
An Example | The Prisoner's Dilemma
According to the Game theory, a theoretical framework for conceiving social situations among competing players and the optimal decision-making of independent and competing actors in a strategic setting(Hayes, 2022), the Prisoner's Dilemma is the most well-known example of how people make their decisions. Typically, it is described as two criminals arrested for a crime. Prosecutors question each one in separate chambers and neither prisoner has the means to communicate with the other. Even though we already know that for the prisoners, the most favorable strategy is to not confess. Neither one is aware of the other's strategy and without certainty that one will not confess, both will likely confess since they both want to win the case privately.
A Story | A Price War
A long time ago, one of my friends was facing a tough situation. He runs a small hotel in an old mining area. The mine was no longer operated anymore and became a landscape. More and more hotels have been built and started operating in this area. However, the good times didn't last forever. In recent years, due to the pandemic of COVID-19 and some economic events, it was not crowded anymore and the profits of those hotels started shrinking. Now, they have to decide how to make a change in response to the shrinking tourists.
While each hotel owner wants to survive, they began to engage in a new price war. They all think the cheapest price is the only solution to attract customers. However, it was a big mistake. When they began a price war and competed viciously, they also found themselves in a vicious circle. Their revenues stopped growing and even shrinking combined with lower profit margin and lower quality of their services. The lower quality of their services will lead to bad reviews and eventually lower their revenues in the future. All these signs are showing that they are heading to an end if they don't make a radical change.
My friend decided to hire a new seasoned CEO, Eddie to handle the hot potato. Eddie started to make a radical change and avoid such a price war. He called a meeting and discussed with every hotel owner in this area. Of course, many conflicts arose. Alta, CEO of The Alexia Hotel, the biggest hotel in the area, thought they still have a tiny space to offer even more discounts. So, she was having conflicts with the other hotel owners. Eddie told him that her strategy is a suicide and also killing the whole hotel business in this area, why not do something that can save everyone including The Alexia Hotel itself? A win-win strategy that everyone can be happy? Alta asked him how to do it. Eddie encouraged those hotel owners to improve the language skills of their employees and do not lower their prices without the permission of the committee. Secondly, those hotels must focus on the quality and report their efforts regularly. The committee developed an award program to award good efforts in providing great services such as customer reviews and other supervisors' reports hired by the committee to investigate the efforts. Eddie successfully inspired them to peruse a vision that all hotels are profitable and to keep upgrading their services. Now, this area is thriving as it was. You would have to book a room for your stay at least one month earlier, or you will see “Sold Out” on every website. This story teaches me a lesson that both two sides of a conflict can be winners if we uncover the great opportunity behind the vicious argument.
References
Conflict is inevitable in the Human life essay. (n.d.). Retrieved August 6, 2022, from https://www.ipl.org/essay/Conflict-Is-Inevitable-In-Human-Life-Essay-PJQVAMHNAG
Hayes, A. (2022, June 16). What is game theory? Investopedia. Retrieved August 6, 2022, from https://www.investopedia.com/terms/g/gametheory.asp
the Mind Tools Content Team By the Mind Tools Content Team, Team, the M. T. C., wrote, M., wrote, regonzales80, & wrote, M. (n.d.). Emotional intelligence in leadership: Learning how to be more aware. from MindTools.com. Retrieved August 6, 2022, from https://www.mindtools.com/pages/article/newLDR_45.htm
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