Resolving stakeholder conflict

Stakeholder conflict happens when groups want different things, so pleasing one means another loses out. Because money, time and resources are limited, a business cannot give every group everything it wants, so it tries to settle disagreements before they damage performance.

Approaches a business can use

• Negotiation — talking a disagreement through with employee representatives, such as a union rep, until both sides agree. This is usually far cheaper than a strike that stops production.
• Consultation — asking stakeholders for their views before a big decision is made, so people feel involved rather than simply told what is happening.
• Clear communication — explaining why a change is needed. Staff who understand the reason for a new shift pattern or a price rise are less likely to resist it.
• Compromise — each side gives something up so that a workable middle position is reached.
• Changing policies, pay or working conditions — for example raising pay or improving conditions to keep employees on side.
• Engaging regularly — meeting stakeholders, listening and taking their views seriously rather than ignoring them.

Turning opposition into support

A chain of garden centres wants to open on Sundays to catch weekend shoppers, but its staff oppose losing their day off. The manager meets the staff representative, explains the extra sales that protect jobs, and agrees a rota where each person works one Sunday in four with extra pay. Employees accept the plan, the centres trade seven days a week and customers get the opening hours they wanted. Handling the disagreement well turned opposition into support. Listening in the same way to a pressure group worried about packaging can cut waste and improve environmental impact.

What it cannot always fix

Some conflict has no answer. A coach company that loses a school contract may have to cut drivers' hours to survive, and those drivers still lose out whatever is discussed. Reducing conflict also uses management time and money — meetings, higher pay, new equipment — so a business has to weigh up what it can afford to give up. Conflict left unresolved can disrupt performance and damage stakeholder relationships for a long time.