Management Accounting Strategy 2B (E2)

Managing organizational relationships

20 September 2022
 Lecture Outline: Term 3 & 4
UNIT Unit Title Chapter Chapter Title

TERM 4
Chapter 7 Building, leading and managing
Managing people teams
UNIT 2 performance Chapter 8 Managing organizational relationships

Chapter 9 The concept of project management

UNIT 3 Project Management Chapter Project management – Tools &

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Techniques
Chapter Project Leadership
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 CHAPTER 8
Managing organisational relationships
Chapter 8: Outline & Outcomes

At the end of this chapter you should be

able to:
Explain how to manage relationships

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Chapter 8: What to expect?

 Communication process
 Digital tools for communication
 Negotiation process
 Strategies for negotiation
 Sources and types of conflicts
 Strategies for managing conflict
 Leadership and ethics

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Content Diagram
Communication

Negotiation Conflict

Techniques
for managing
organizational
relationships

Influence and
Meetings
persuasion

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Why are communication skills important?
• All organisations have conflicting demands on time, different opinions or
attitudes
• Communication skills are essential in ensuring that all parties are happy
and are able to work together to attain organizational goals

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Importance of communication for CGMAs
CGMAs are an integral part of any business and hold a variety of positions within an
organization (Their roles are varied)
They often work within multi-skilled management teams
They will be required to deal with employees at different levels and external parties
(customers, suppliers, contractors and advisors)
Thus communication skills are very important when dealing with a variety of people

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Communication
 Most organisations depend on the speed and accuracy of communication to maintain
their competitive edge

 The management function depends on effective communication

 Good communication skills are often included as an essential management

competence

 Effective and regular personal communication is vital to ensure coordination and to

identify problems quickly

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V

Types of communication

Formal communication Informal communication

• Planned and intentional • More casual in nature

• Tends to have a more professional tone • Generally unplanned
• Is generally used within a work context • Less structured with a more relaxed tone
• Generally used between family and
friends

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V

The communication process

• Communication process is defined as a process that’s used to transmit a message from
sender to a receiver
• Message can be words, numbers, gestures or non-verbal cues (body language)

Noise

Sender Encode Channel Decode Receiver

Feedback

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V

The communication process

Stages in the process

1. Sender: The entity that conveys or sends the message

2. Encoding: Process through which the message is symbolized
3. Channel: The medium through which the message is being sent (Email, Phone calls etc)
4. Receiver: Entity that receives the message
5. Decoding: Process in which the message is translated and meaning is generated out of it
6. Feedback: Process through which receiver sends their response

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Feedback and Noise
Importance of feedback

• Feedback gives the sender the knowledge that the message has been received as intended
• It can allow the sender to clarify the message if the receiver is confused/doesn’t understand the
message
• Feedback can be verbal (comments) or non-verbal (a smile/nod)

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Feedback and Noise cont…
Noise
Anything that interferes with the communication process and prevents that message from being
received/understood
Types of noise
1. Environmental/Physical noise: Physically disrupts communication and prevents receiver
from hearing/seeing message clearly
2. Physiological noise: Actual physical barriers within the sender or receiver that cause
message to have trouble getting through (Hearing loss, poor eyesight etc)
3. Semantic noise: Occurs when the sender and receiver have a different understanding of
words
4. Psychological noise: Attitude of both sender and receiver can make communication
difficult

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Barriers to communication
Sender
• Not being clear as to what has to be communicated
• Omitting information
• Choosing words that provoke an emotional response
• Using technical jargon

Receiver
• Not in an appropriate state to receive the message
• Not wishing to receive the message
• Filtering out elements that they don’t want to deal with
• Information overload
• Mindset that does not admit the substance of the message
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Ways to overcome barriers to communication
Sender should:
• Have a definite clear objective
• Plan the communication
• Consider the receiver and their situation
• Seek and work with feedback
• Anticipate reactions to the message and cater to these

Receiver should:
• Consider their contribution
• Listen attentively
• Check out anything that is vague
• Give feedback
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Non-verbal communication
“The most important thing in communication is hearing what isn’t said” – Drucker

Body language is about:

• Appearance
• Eye contact
• Facial expression
• Posture and distance
• Tone
Non-verbal actions vary across countries and cultures.

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Digital tools for communication
The workforce is more flexible and isn’t confined to a single office environment
Thus the need for team-based, collaborative and digitally connected work environments has been
critical to business efficiency and future growth
Examples of communication tools:
• Intranet: A private hub that can be accessed by any authorized personnel within a business
organization, which is mainly used for effective internal communication and collaboration.
• Chat and private messaging: Collaborative spaces which provide private/group messaging and
chat functions are viewed as an effective form of communication
• Discussion forums: Allows for an open discussion on any topic between management and
employees. Forums can assist in archiving organizational knowledge
• Tracking and case software: Online help desk with case tracking system enables employees and
customers to submit a case. This ensures it is assigned to the right employee and to keep track

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Digital tools for communication (cont…)
• Internal blogs: A place where employees can share ideas and experiences fast and in an
informal fashion.
Advantages of internal blogs:

1. Broadcasting and highlighting employees knowledge of certain topics or areas

2. Creating a searchable and permanent archive of articles, knowledge and expertise
3. Promotes open discussion and collaboration among the workforce
4. It connects employees across departments
5. It keeps the staff up-to-date on important information and company updates

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Data visualization
• Data visualization allows large volumes of complex data to be displayed in a visually appealing
and accessible way that facilitates the understanding and use of the underlying data
• The growing significance of data has seen a rise in the importance of being able to access and
understand the data in a clear and concise manner
• Central to data visualization is understanding and ease of use
• It puts the ability to find data in the hands of the end user through user friendly interfaces
• Most common use of data visualization is in the creation of dashboards to display the KPIs of a
business

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Meetings
• Can be an effective communication method for the manager
• Steps to ensure meetings are effective and useful:
1. Determine the purpose of the meeting
2. Establish who needs to attend
3. Determine the agenda in advance
4. Make suitable arrangements for location and time
5. Facilitate discussion
6. Manage the plan of action
7. Summarize publish results/minutes

Rule of thumb for successful meetings: 80% preparation and 20% execution

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Meetings
Roles of team members in meetings:

• Chairperson/Facilitators set the agenda and ensure the meeting achieves its objectives.
• Secretary/Administrator takes the minutes of the meeting
• Team members play various roles – Protagonist (positive supporters) & Antagonists
(Challenging and disruptive)

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Meetings
Problems with meetings Actions to avoid problem
Inappropriate chairperson Selection should be based on someone with the requisite
range of communication skills
The objectives of the meeting are undefined and Ensure agenda is produced and circulated prior to the
unclear meeting. Chairperson should state objectives and return
focus of meeting to the points on the agenda
Lack of enthusiasm or interest in the meeting Ensure that only those with an interest in the meeting are
actually invited. Stress the need to reach a conclusion
Attendees talk too much without regard to the Chairperson must impose some order on the meeting.
chairperson’s requests Asking participants to speak in accordance with meeting
protocols
Attendees cannot reach an agreement concerning Chairperson should exercise negotiation skills to try to
issues on the agenda bring some agreement. If not possible members should
agree to disagree
Action points from previous meetings have not been Chairperson should obtain reason why actions aren’t
carried out completed. In future ensure that each point has someone
responsible to complete it
Minutes are either too long or too brief Ensure minutes are either minutes of resolution or if
minutes of narration they are edited sufficiently
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V

Influence, persuasion and negotiation skills

Influence
• The ability to change others’ attitudes, opinions or behavior
• Direct influence: The person attempting to change the attitude of another speaks directly to the other
person
• Indirect influence : The message attempts to reach its target via third party

Six principles of influence by Ciadini

1. Reciprocity: Humans are likely to be influenced support someone who has supported them in the past
2. Commitment: Humans are likely to be influenced to follow through with their support for something if
they had shown initial interest in it
3. Social proof: Humans are likely to be influenced into acting a certain way if they see others acting in the
same way
4. Liking: Humans are likely to be influenced by the people they like or people who are friendly towards
them
5. Authority: Humans are more likely to be influenced by people in positions of authority
6. Scarcity: Humans are more likely to support something if they fear losing out
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V

Influence, persuasion and negotiation skills

Persuasion

• A stronger form of influence

• The attempt to deliberately get others to change and attitude, opinion or behavior
• It is always direct and intentional
• The aim is to change a person’s attitude or behavior towards something or someone
• Persuasion may use coercion as it gets the other person to agree, albeit perhaps under
duress
• Person using persuasion has a clear objective

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V

Influence, persuasion and negotiation skills

Negotiation
• The ability to discuss an issue with one or more other people in the attempt to establish ways to reach
agreement
• Negotiation can be used by managers in their relationships with subordinates and other stakeholders (Suppliers
and customers)
• Aim of negotiation is to settle differences between groups and to allow them to come to an agreement which
both parties accept
3 characteristics of negotiations:
1. Conflict of interest between two or more parties
2. No established set of rules for managing conflict/Parties choose to work outside of established rules to find a
solution
3. Parties prefer to search for an agreement rather than to fight openly
Examples of negotiations managers might need to undertake
1. On its own terms
2. On behalf if a department or functional area
3. With the external environment on behalf of the organization
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V

Influence, persuasion and negotiation skills

Skills require by a negotiator

Interpersonal skills
Negotiator requires good communicating techniques such as influence and persuasion

Analytical skills
Negotiator requires the ability to analyse information, diagnose problems, to plan and set
objectives, and the exercise of good judgement in interpreting results

Technical skills
Negotiator requires attention to detail and thorough case preparation

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V

Influence, persuasion and negotiation skills

The process of negotiation

Preparation Preparation

Opening Opening

Bargaining

Closing

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V

Influence, persuasion and negotiation skills

The four stages of negotiation

1. Preparation: Stage involves gathering of information. Its important to know the background of the
problem and the likely constraints acting on each participant
2. Opening: Both sides present their starting positions. This is a good opportunity to influence the
other party
3. Bargaining: Purpose of this stage is to narrow the gap between the two initial positions and to
persuade the other party of the strength of the case.
4. Closing: Agreement is reached and mutually beneficial outcome has been found

Guidance for successful negotiation

1. Place initial focus on each sides primary objective
2. Be prepared to settle for what is fair
3. Listen to what the other side wants and make efforts to compromise on the main issues
4. Seek to trade-off wins and losses
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V

Influence, persuasion and negotiation skills

Types of negotiation

1. Win-Win approach: Both sides attempt to reconcile their positions so that the end result is
an agreement where both will benefit
2. Win-Lose: Each of the parties seek maximum gains and therefor seeks to impose
maximum losses on the other side
3. Lose-Lose: Both parties concede more that intended or no agreement is reached

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V

Conflict
Conflict is a disagreement
It is when one party is perceived as preventing or interfering with the goals or actions of another

Causes of conflict as identified by Mainwaring (include but not limited to):

• History: Conflicts have a tendency for being self-perpetuating
• Differences: Mainly of interest, objectives and priorities
• Limited resources: There is a battle for what is available due to scarcity
• Win/Lose situations: Success for one group often involves failure for another
• Interdependencies: Relationships/boundaries not clearly defined
• Misunderstandings: Include communication failures
• Conviction beliefs: One group is convinced of their essential rightness and might want to
enlighten others thus resulting in resistance
• Change: Individual, group, organizational change creates new relationships, objectives, problems
and possibilities
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V

Conflict
Symptoms of conflict

• Problems being passed up the hierarchy because no one wants to take responsibility for them
• Hostility and jealousy between groups
• Poor communications up and down the hierarchy and between departments
• Widespread frustration and dissatisfaction because it is difficult to get things done efficiently
• Problems constantly being polarized around people and personalities rather than issues

Consequences of conflict as identified by Daft

• Diversion of energy resulting in time and effort wasted

• Altered judgement
• Loser effects
• Poor co-ordination
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V

Conflict
Types of conflict

Horizontal conflict (Occurs at same level in hierarchy) main sources:

• Environment: Each department/group is tailored to fit its domain, thus is differentiated from other
groups
• Size: As organization grows, members of departments begin to think of themselves as separate
• Technology: Interdependency creates opportunity for conflict as technology determines task
allocation
• Structure: Divisionalization and departmentalization creates competition which leads to conflict
• Goal incompatibility: Achievement of goals by one department might block achievement of goals by
another
• Task interdependence: Interdependence increases the potential for conflict
• Reward systems: Departments only rewarded for departmental performance might cause managers
to aspire to excel at the expense of the rest of the organization
• Differentiation: Functional specialization causes differences in cognitive and emotional orientations
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V

Conflict
Types of conflict (cont…)
Vertical conflict (Occurs at different levels in the hierarchy) main sources:
• Power and status: Workers at the bottom of the hierarchy often feel alienated
• Ideology: Different values held by individuals can cause conflict
• Psychological distance: Workers can feel isolated from the organization
• Scarce resources: Financial resources affecting remuneration and working conditions

Constructive conflict
• Is considered useful and beneficial to the organization
• Creates an environment of innovation and change
• Settles and defines boundaries of authority and responsibility

Destructive conflict
• Tends to be ad hoc and personal
• Harmful for the organization
• Can be demoralizing
• Causes alienation
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V

Managing conflict
The Thomas-Kilmann conflict mode instrument
5 conflict handling strategies

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V

Managing conflict
Strategies for managing conflict as suggested by Mainwaring

• Conflict stimulation and orchestration: Approach actively encourages conflict as a means of

generating new ideas and new approaches of stimulating change
• Conflict suppression: Involves the threatened use of authority or the avoidance of
recognition that a conflict situation exists
• Conflict reduction: Involves building on areas of agreement and common objectives
• Conflict resolution: Seeks to eliminate the root causes of conflict by establishing a consensus

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V

Managing conflict
Dealing with industrial relations conflict

• Conflict stimulation and orchestration: Approach actively encourages conflict as a means of

generating new ideas and new approaches of stimulating change
• Conflict suppression: Involves the threatened use of authority or the avoidance of
recognition that a conflict situation exists
• Conflict reduction: Involves building on areas of agreement and common objectives
• Conflict resolution: Seeks to eliminate the root causes of conflict by establishing a consensus

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Belbin’s team roles
Success of a group can depend significantly upon the balance of individual skills and
personality types within the group
Belbins 9 character types
Character types Role
Co-ordinator Mature & Confident. Ensures team focuses on objectives. Delegates well
Shaper Challenging & Dynamic. Promotes activity. Keeps the team moving
Plant Thoughtful and creative. Generates original ideas
Monitor/Evaluator Logical & Analytical. Evaluates options in an impartial manner
Resource Investigator Enthusiastic & inquisitive. Finds external ideas to bring to the team
Implementer Practical & Reliable. Deals with planning and scheduling. Drives efficiency
Teamworker Co-operative & Diplomatic. Concerned with relationships within the team
Completer/Finisher Anxious & Conscientious. Does quality control. Scrutinizes everyone's work
Specialist Single-minded & Dedicated. Brings in-depth specialist knowledge
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Belbin’s team roles
Role Theory
Assists in the understanding of how productive teams are formed and operated
The following are terms associated with role theory:
• Role ambiguity: Individuals are unsure what role they play, thus they hold back co-operation
• Role conflict: Individuals find a clash between differing roles that they’ve adopted.
• Role incompatibility: Individuals experience expectations from outside groups, about their roles, that are
different from their own
• Role signs: Visible indications of the role eg. Style of dress & uniform
• Role set: People who support a lead person in a major role
• Role behavior: Certain types of behaviors can be associated with a role in an office

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High performing teams
Vaill – High performance teams
“High-performing teams may be defined as human systems that are doing dramatically better
than other systems”
Characteristics of high-performance teams:
• Clarification of broad purposes and near-term objectives
• Commitment to purposes
• Teamwork focused on the task at hand
• Strong and clear leadership
• Generation of inventions

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High performing teams
Peters and Waterman – Successful teams
5 key aspects of successful teams:
• Numbers should be small; larger teams would be slower and harder to manage
• Team should be of limited duration and exist only to achieve a particular task
• Membership should be voluntary. Members are more unlikely to participate fully if they
don’t want to be part of the group
• Communication should be informal and unstructured, with little documentation and no
status barriers
• Should be action-oriented. Team must create a plan for action

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High performing teams
Building the team and improving effectiveness
Outside intervention/Support from management is necessary to assist teams in achieving their goals
Managers use team building exercises to develop the team in several areas that include:
• Improved communication: Activities such as problem solving exercises force all team members to discuss
problems being faced by the group
• Building trust: Trust built between members assists the individuals to work as a group
• Social interaction: Can result in an increase in cohesion of the group and may result in a reduction in conflict
Measuring team effectiveness
Ways of possibly measuring team effectiveness:
• The quality of the teams output and the extent at which the team achieves its stated objectives
• Team member satisfaction
• Measuring the efficiency of the team through the measurement of resources used to achieve team objectives

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Distributive leadership
• Perspective of distributed leadership recognizes that there are multiple leaders
• It is also known as shared or collective leadership
• It involves the sharing of the power base between several individuals
• It is more horizontal in nature, in comparison to traditional leadership which is more vertical/hierarchical
• Individuals are encouraged to manage their own work and working practices

Three dimensions the facilitate shared leadership as proposed by Carson et al

• Shared purpose: Team members have a similar understanding of their teams main objectives & take steps
to ensure a focus on collective goals
• Social support: Extent to which team members actively provide emotional and psychological strength to
one another
• Voice: Degree to which members of a team have input into how the team carries out its purpose
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Inter-group and Intra-group conflict
• Inter-group conflict is described as the behavior that occurs between organizational groups when
participants identify with one group and perceive that other groups may block their group’s goal
achievement
• Intra-group conflict occurs when there are disagreements or misunderstandings between members of a
team
Three ingredients of Inter-group conflict
1. Group identification: Employees have to perceive themselves as part of an identifiable group or
department
2. Observable group difference: Ability to observe oneself as a part of one group and to observe differences
in comparison with other groups
3. Frustration: The idea that if one group achieves its goals the other will not. Inter-group conflict appears
when one group tries to advance its position in relation to other groups

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Inter-group and Intra-group conflict
Approaches to manage Inter-group conflict:
• Confrontation: Parties in conflict directly engage one another and try to work out their differences.
Negotiation occurs during the confrontation and enables parties to reach a solution.
• Third-party consultants: An expert 3rd party from outside the organization can be brought in to meet
with representatives from conflicting departments if the conflict is intense and enduring.
• Inter-group training: Inter-group training is a strong intervention that can reduce conflict. Special
training can be used if other techniques fail to reduce conflict to an appropriate level
• Member rotation: Individuals from one department may be asked to work in another department on
a temporary or permanent basis. This enables a frank, accurate exchange of views and information.
• Superordinate goals: Top management establish superordinate goals that require cooperation
between departments. Conflicting departments share the same goal and should depend on one
another to achieve it.
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Inter-group and Intra-group conflict
Using training to manage inter-group conflict
Steps associated with inter-group training sessions:
• Conflicting groups are brought into a training setting with the goal of exploring mutual perceptions and relationships
• Conflicting groups are then separated and each group is invited to discuss and make a list of its perceptions of itself and the
other group
• A representative from each group then reports back to the other group the images that each group has developed of the
other. Groups are obligated to remain silent when report about them is being presented
• Groups then return to private sessions to digest and analyse what they have heard
• Groups then have another public session where representatives share what discrepancies they have found and possible
reasons for these discrepancies. The focus is on actual, observable behavior.
• After the mutual exposure the two groups must now have a shared goal of identifying possible reasons for perceptual
distortions
• Joint exploration is conducted of how to manage future relations in a manner that encourages cooperation between groups

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End of Chapter 8