Managing Conflict Chapter 9 with Duane Weaver What is Channel Conflict? пЃЇ пЃЇ In channel distribution, conflict is not negative, rather, some conflict actually strengthen and improves a channel. вЂњChannel conflict arises when the behavior of a channel member is in opposition, to its channel counterpart. It is opponent centered and direct, in which the goal or object sought is controlled by the counterpart.вЂќ Coughlan, Anderson, Stern, Adel, p. 238 Types of Conflict пЃЇ пЃЇ пЃЇ пЃЇ Latent conflict вЂ“ norm in marketing channels вЂ¦conditions are right for contention by the organization is unaware of it (lacking perception). Perceived conflict вЂ“ cognitive, emotionless and mental вЂ¦channel member senses some sort of conflict exists; вЂњall in a days workвЂќ. Felt conflict вЂ“ affective conflict, when emotions do enter the equation. Manifest conflict вЂ“ visible, expressed in behaviour. Usually seen as blocking each otherвЂ™s initiative or withdrawing support. Measuring Conflict пЃЇ пЃЇ пЃЇ пЃЇ Count вЂ“ counting # of Issues Importance вЂ“ weighting or scale Frequency вЂ“ frequency of disagreement Intensity вЂ“ of dispute (how disparate) N CONFLICT = в€‘ Importancei X Frequencyi X Intensityi i=1 пЃЇ Index of Conflict вЂ“ can be used to compare members in a channel Calculating Conflict вЂ“ Practice Exercise (take home вЂ“ answers will be on class website) пЃЇ Analyzing 3 issues in conflict with 8 car dealers and the manufacturer: пЃ® Disagreement about volume discount programs for carrying your own inventory (small car dealers see no advantage, big dealers see lots) пЃЇ пЃЇ пЃЇ пЃ® Requirement to participate in National Advertising program пЃЇ пЃЇ пЃЇ пЃ® Importance of issue 4 small = 4/10 and the 4 big = 8/10 Frequency is monthly (every shipment) Intensity is very disparate 9/10 Importance = 2/10 Most dealers prefer their own program (especially the larger ones, however, it is seen as a necessary evil of being part of being a franchise) Frequency = 2 times a year Intensity is not too disparate 4/10 comparatively Warranty return administration requires quintuplicate forms and can take up to 90 days to receive payment on labour and parts expended. пЃЇ пЃЇ пЃЇ Importance = 10/10 for all dealers Frequency = every meeting (16 times a year) and in additional at least 2 complaints per month per 8 dealers Intensity is the same as for the National Advertising program Desirable Conflict Conflict can induce: 1. More frequent and effective communication 2. Create outlets for grievances 3. Members to critically review past actions 4. The more equitable split of resources 5. The balance of power to shift more equitably 6. Standardization for dealing with future conflict and boundary delineation Damage from Intense Conflict пЃЇ High channel conflict can create costs вЂ¦as shown in fig. 9.1 on Page 245. пЃ® Trust diminished пЃ® Commitment to relationship in jeopardy пЃ® Reduction in financial rewards пЃ® Reduction in psychosocial benefits and gratification from relationship Sources of Conflict пЃЇ Competing goals пЃ® пЃЇ Perceptions of reality пЃ® пЃ® пЃ® пЃЇ Margins, unit sales, expense control, inventory, incentives, promotions, allowances, volumes and thresholds, market penetration objectivesвЂ¦ Attributes of product or service areвЂ¦ Application served and segments served What is the competition Domain of control пЃ® More often a perception that the other channel member is not pulling their weight for a domain that should be theirs. Fueling Conflict пЃЇ пЃЇ пЃЇ The Conflict propensity is strongly correlated to the quantity of historical incidence Threats вЂ“ induction by punishments and/or sanctions (Coercion can lead to escalating conflict and ultimate channel damage) Unbalanced power is indicative of short-term relationship expectations вЂ“ propensity for conflict is increased Conflict RESOLUTION STRATEGIES пЃЇ Information-Intensive Mechanism пЃ® пЃ® пЃ® пЃ® пЃЇ Third-Party Mechanism пЃ® пЃ® пЃЇ Risk sharing sensitive information with trust and cooperation or via a diplomat Joint membership in Trade Associations Personage exchange Co-aptation (involving channel members in corporate decisions) Mediation Institutionalized Arbitration process Building Relational Norms пЃ® Flexibility, Info Exchange, and Solidarity Styles of Conflict Resolution пЃЇ пЃЇ пЃЇ пЃЇ пЃЇ пЃЇ See Fig. 9.2 on Page 269. Accommodation Avoidance Competition or Aggression Compromise Collaboration or Problem Solving Thanks пЃЇ пЃЇ Work through the Conflict Measurement Exercise and check your answers with the web Mid-Term questions?