One of the key roles of procurement is to develop and maintain co-operative working relationships in the organisation (through cross-functional consultation, consultancy and teamworking) and in the supply chain (through effective supplier, contract and relationship management).
This involves a complex, ongoing process of managing diversity and difference. ‘Diversity’, because organisations and supply chains are made up of individuals and groups with potentially very different goals, attitudes, interests, priorities and ways of working. ‘Difference’, because those areas of diversity will inevitably, from time to time, cause misunderstandings, disagreements, competition and perhaps hostility.
This is the kind of difference we generally call ‘conflict’ – although conflict itself is a complex term which can be seen from a number of different points of view.
Conflict can be highly desirable. It can energise relationships and clarify issues. John Hunt (Managing People in Organisations) suggests that conflict is constructive, when its effect is to:
Introduce different options and solutions to problems
Define power relationships more clearly
Encourage creativity and the testing of ideas
Bring emotions out into the open
Provide opportunity for the release of hostile feelings that might otherwise be repressed.
Conflict can therefore be a helpful aspect of negotiation, or a driver for negotiation.
Conflict can also be destructive, negative and damaging to relationships. Hunt suggests that conflict of this kind may:
Distract attention from the task
Polarise views and ‘dislocate’ a group or team
Act as a barrier to communication
Subvert objectives in favour of secondary goals and agendas
Encourage defensive or ‘spoiling’ behaviour
Stimulate emotional, win-lose conflicts, or hostility .
Such conflict may need to be resolved or reduced, and negotiation is one approach to doing this. However, it should be noted that destructive conflict can also derail negotiations in the above ways, and will need to be carefully managed in negotiation situations.
Further sources of conflict and negotiation techniques for conflict resolution will be discussed in Negotiating and contracting in procurement and supply unit of CIPS diploma