Project Management

CONFLICT AT AGS PRIVATE LIMITED

WHAT IS CONFLICT

Conflict is inevitable among humans. When two or more social entities (i.e., individuals, groups, organizations, and nations) come in contact with one another in attaining their objectives, their relationships may become incompatible or inconsistent. Relationships among such entities may become inconsistent when two or more of them desire a similar resource that is in short supply; when they have partially exclusive behavioral preferences regarding their joint action; or when they have different attitudes, values, beliefs, and skills. Conflict is the perception of differences of interests among people (Thompson, 1998).

THE CASE

It was a sunny Monday morning in the midst of October; Ali was on his way to the office with numerous thoughts boggling his mind. He was thinking about several things including the heated argument he had with his Manager (Exports Department Manager) and the General Manager on Saturday evening when he was leaving the office. He was thinking how to proceed with the matters from now on wards.

PROTAGONISTÐŽ¦S BACKGROUND

Ali was a graduate (Bachelors in Business Administration) from an eminent institute of Islamabad. After his graduation he worked at a local construction company for 6 months as an accounts officer and then his friend Ahmed, who was working with AGS Pvt Ltd Islamabad, informed him about an opportunity in the exports department. Ali was in search of such an opportunity and responded immediately. He forwarded his CV to Ahmed who then presented it to the Human Resource Manager. It was in a matter of days that Ali was called for an interview and after having three interviews- one with the HR Manager, second with the Exports Department Manager and last with the GM- he was selected as a Customer Relationship Officer in Exports Department (CRO). Ali was very excited about his new job.

COMPANY INTRODUCTION

AGS Pvt. Ltd. (PAL) established in 1993 is one of the largest exporters of automotive batteries from Pakistan. It is the only battery manufacturer to have been awarded the coveted Export Merit Trophy by the Federation of Pakistan Chambers of Commerce & Industry for the year 2004-2005.

AGS has been exporting automotive batteries manufactured under the ISO 9001:2000 Quality Management System certification. Major exports are made to countries such as: Afghanistan, Saudi Arabia, Sudan, Iraq, India, Dubai and Kuwait. It is still expanding its network of clientele around the globe. AGS manufactures batteries under the JIS and DIN specifications to meet the requirements of its varied clients from different parts of the world, under its strict quality management system and the most modern manufacturing processes.

POLICIES AND CULTURE OF THE ORGANIZATION

AGS has been functioning in Pakistan for several years and with the passage of time the organization has developed more of a bureaucratic culture. Polices and decisions are made at the discretion of the top management and usually the support functions/ departments are not involved in policy making. It is due to this reason that many a times the company has suffered predicaments which have lead to minor losses. It is also the company policy that forecasts for a particular quarter are made by the top management with very less or no input from the support function heads, though the nature of their business requires that forecasting should be accurate and efficient. It is also a strict policy that despite any condition Quarterly target has to be met. Another predicament is the policy that customers are offered contract on yearly basis which includes a very important obligation that the price at which the batteries are being offered will remain constant during the specified time period.

The organization has an over all closed door culture i.e. no employee is allowed to enter the managerÐŽ¦s room with out his/her permission. In addition to this a prevalent concept/culture in the company is that ÐŽ§The boss is always rightЎЁ.

PROTAGONISTÐŽ¦S JOB

Before Ali would start working, he had to under go a preliminary training session of 30 days. Once the training session was completed Ali was ready to work at the office, where he was warmly welcomed by his colleagues in the exports department. At the moment his job constituted of corresponding with existing clients, search for new clients and proper documentation of all the correspondence with the clients. Thus his job framework was based around the clients of the company, who can be also termed as companies importing Batteries from Pakistan. It was also a part of AliÐŽ¦s job to provide the clients with price quotations. Ali had to maintain a very cordial relationship with the clients since it was part of his job to keep them satisfied. Besides the correspondences he made with the clients, he and his team members were focused on attaining the exports/sales target specified by the company. The target varied from quarter to quarter, but for the current period under discussion it was 74000 batteries. In a few months time period Ali was appointed as a team lead for handling customer relations.

THE CONFLICT

The conflict can be termed as a Direct Policy Conflict since Ali directly confronted the organizational policy in terms of its applicability and fairness.

This is evident from the background and causes of the conflict which are as follows:

It had now been eight months since Ali was hired. Up till now it had been a smooth journey. Ali along with his colleagues had been able to bring ample business for the company; they had been successful in attaining the targets assigned to them. It was during the month of October that the prices of lead in the London Metal Exchange (LME) suddenly increased from 800 pounds/ton to 1500 pounds/ton. This was a sudden shock which quivered the forecasting foundations of AGS. AGS due to its crude forecasting and rigid policies had never anticipated such a huge price differential. Due to this sudden increase in lead prices the company had to increase the price of its products. The news of also reached to Ali and his colleagues, what was more shocking for them was that the company intended to increase the prices. This was a major dilemma, since the exports department team had made yearly contracts with customers on fixed price basis.

WHAT THE COMPANY WANTED

The GM wanted the