Exam 7: Negotiating and Resolving Conflict

Describe an example (real or fictional) of accommodating as a conflict management approach. Diagnose whether the use of accommodating was appropriate to the situation and, if not, what approach would have been preferable.

Educational Pension Investments Educational Pension Investments (EPI), located in New York, invests pension funds for educational institutions. It employs approximately 75 people, 25 of whom are responsible for actual investment activities. The company manages about $5 billion of assets and derived an income of about $10 million. The firm was incorporated almost 30 years ago by a group of academic professionals who wanted to control the destiny of their retirement years by pursuing investments that would be consistent and safe. The firm has weathered rapid technological change and economic volatility. Leadership has consistently resisted opportunities to "make it big" and instead stayed with less profitable but relatively secure investments. Dan Richardson has an MBA from Wharton and is one of the founders of EPI. He started out working in the research department and has worked in every department since then. The other partners, comfortable with Dan's conservative yet flexible nature, elected him to the position of CEO 13 years ago. After that, Dan became known as "the great equalizer." He works hard to make sure that all the partners are included in decisions. Over the years, he has become the confidant of the other seniors and the mentor of the next generation. EPI's employees look to Dan for leadership and direction. Dan's management philosophy is built on the concept of loyalty. As he is fond of saying, "My dad was a small town banker. He told me, 'Look out for the other guys and they'll look out for you.' Sounds corny, I know, but I firmly believe in this philosophy." Given Dan's practice of consistent and safe investing, EPI's growth has not kept pace with other investment opportunities. As a result, Dan has reluctantly begun to consider the merits of a more aggressive investment approach. Part of Dan's reconsideration is that several of the younger analysts are beginning to refer to EPI as "stodgy." Some are leaving EPI for positions in more aggressive firms. One evening, Dan talked about his concern with his racquetball partner and longtime friend, Mike Roth. Mike also happened to be an investment broker in another firm. An MBA graduate from the University of Illinois, Mike's accomplishments in research had brought him widespread recognition. Everyone respected him for his knowledge, his work ethic, and his uncanny ability to predict trends. When Mike heard Dan's concerns about EPI's image and need for an aggressive approach, he suggested to his friend that what EPI needed was some fresh blood, someone who could infuse enthusiasm into the organization-someone like him. He told Dan, "I can help you get things moving. In fact, I've been developing some concepts that would be perfect for EPI." Dan brought up the idea of hiring Mike at the next staff meeting, but the idea was met with caution and skepticism. "Sure, he's had a brilliant career on paper," said one senior partner. "But he's never stayed in one place long enough to really validate his success. Look at his résumé. During the past seven years, he's been with four different firms, in four different positions." "That's true," said Dan, "but his references all check out. In fact, he's been described as a rising star, aggressive, productive. He's just what we need to help us explore new opportunities." Another partner responded, "A friend of mine worked with Mike a while back and said that while he is definitely good, he's a real maverick-in terms of both investment philosophy and lifestyle. Is that what we really want at EPI?" Throughout the discussion, Dan defended Mike's work record. He repeatedly pointed out Mike's impressive performance. He deflected concerns about Mike's reputation by saying that he was a loyal and trusted friend. Largely on Dan's recommendation, the other partners agreed, although somewhat reluctantly, to hire Mike. When Dan offered Mike the job, he promised Mike the freedom and flexibility to operate a segment of the fund as he desired. Mike took the job and performed his responsibilities at EPI in a superior manner. Indeed, he was largely responsible for increasing the managed assets of the company by 150 percent. However, this increase came at a price. From the day Mike moved in, junior analysts enjoyed working with him very much. They liked his fresh, new approach, and were encouraged by the spectacular results. This caused jealousy among the other partners, who thought Mike was pushing too hard to change the tried-and-true traditions of the firm. It was not uncommon for sharp disagreements to erupt in staff meetings, with one or another partner coming close to storming out of the room. Throughout this time, Dan tried to soothe ruffled feathers and maintain an atmosphere of trust and loyalty. Mike seemed oblivious to all the turmoil he was causing. He was optimistic about potential growth opportunities. He believed that voice-activated technology, 3-D printing, and cloud databases were the "waves of the future." Because of this belief, he wanted to direct the focus of his portfolio toward these emerging technologies. "Investments in small firm stocks in these industries, coupled with an aggressive market timing strategy, should yield a 50 percent increase in performance." He rallied support for this idea not only among the younger members of EPI, but also with the pension fund managers who invested with EPI. Mike championed his position and openly questioned the traditional philosophy. "We should compromise on conservatism and achieve some real growth while we can," Mike argued. "If we don't, we'll lose the investors' confidence and ultimately lose them." Most of the senior partners disagreed with Mike, stating that the majority of their investors emphasized security above all else. They also disagreed with the projected profits, stating that "We could go from 8 to 12 percent return on investment (ROI); then again, we could drop to 4 percent. A lot depends on whose data you use." They reminded Mike, "The fundamental approach of the corporation is to provide safe and moderate-income mutual funds for academic pension funds to invest in. That's the philosophy we used to solicit the investments originally, and that's the approach we are obligated to maintain." Months passed, and dissension among the managers grew. Mike began to criticize his detractors openly as he talked with younger EPI employees. In addition, he assigned research department employees to focus on high-tech investments, distracting them from investigating more traditional investments. This disrupted the operations of other EPI managers because their funds relied on timely input from the researchers and other support staff. Amidst a rapidly spreading undercurrent of tension, one of the founding partners, Tom Watson, approached Dan one day. Conservative in his ways, Watson was the partner who walks the office and always has time to stop and chat. He began the conversation. "Dan, I speak for most of the senior staff when I say that we are very troubled by Mike's approach. We've expressed ourselves well enough for Mike to understand, but his actions defy everything we've said. He's a catastrophe just waiting to happen." "I can understand your concern, Tom," replied Dan. "I'm troubled, too. We have an opportunity to attract new business with some of Mike's new ideas. And the younger staff love working on his projects. But he has stirred up a lot of turmoil." Tom agreed. "The real issue is that EPI is no longer presenting a unified image. Mike is willfully defying the stated objectives of our organization. And some of our oldest clients don't like that." "That's true, Tom. On the other hand, some of our newer clients are really encouraged by Mike's approach-and his track record is extremely impressive." "Come on, Dan. You and I both know that many experts feel the market is overheating. Mike's paper profits could quickly be incinerated if the budget and trade deficits don't turn around. We can't stake the reputation of the firm on a few high-flying technology stocks. Dan, the other senior partners agree. Mike must either conform to the philosophy and management practices of this organization or else resign." Reflecting on the situation, Dan realized he faced the most difficult challenge of his career. He felt a strong personal investment in helping Mike succeed. Not only had he hired Mike over the objections of several colleagues; he had personally helped him "learn the ropes" at EPI. Beyond that, Dan was haunted by his promise to Mike that he would have the freedom and flexibility to perform the requirements of the position as he pleased. However, this flexibility had clearly caused problems within EPI. Finally, bowing to the pressure of his peers, Dan called Mike in for a meeting, hoping to find some basis for compromise. Their conversation proceeded as follows: Dan: I gather you know the kinds of concerns the senior partners have expressed regarding your approach. Mike: I guess you've talked with Tom. Well, we did have a small disagreement earlier this week. Dan: The way Tom tells it, you're willfully defying corporate objectives and being insubordinate. Mike: Well, it's just like Watson to see progressive change as an attempt to take away his power. Dan: It's not quite that simple, Mike. When we founded EPI, we all agreed that a conservative stance was best. And right now, with the economic indicators looking soft, many experts agree that it may still be the best alternative. Mike: Dan, what are you going to rely on-predictions or performance? These concerns are just smokescreens to deflect attention away from the sub-par records of other portfolio managers. Old views need to be challenged and ultimately discarded. How else are we going to progress and keep up with our competitors? Dan: I agree we need to change, Mike-but gradually. You have great ideas and terrific instincts, but you can't change a 30-year-old firm overnight. You can help me promote change, but you're pushing so fast, others are digging in their heels. The rate of change is just as important as the direction. Mike: You're telling me. And at this rate, it doesn't make much difference which direction we're headed in. Dan: Come on, Mike. Don't be so cynical. If you'd just stop rubbing people's noses in your performance record and try to see things from their perspective, we could calm things down around here. Then maybe we could start building consensus. Mike's emotions betray his impatience with the pace of the organization; he becomes agitated. Mike: I've always admired your judgment, and I value your friendship, but I honestly think you're kidding yourself. You seem to think you can get this firm to look like it's progressive-shrugging off its stodgy image-without taking any risks or ruffling any feathers. Are you interested in appearance or substance? If you want appearance, then hire a good PR person. If you want substance, then back me up and we'll rewrite the record book. Get off the fence, Dan, before your butt's full of slivers. Dan: Mike, it simply isn't that easy. I'm not EPI, I'm simply its caretaker. You know we make decisions around here by consensus; that's the backbone of this organization. To move ahead, the confidence of the others has to be won, especially the confidence of the seniors. Frankly, your reputation as a maverick makes it hard to foster confidence in, and loyalty to, your plans. Mike: You knew my style when you hired me. Remember how you made it a point to promise me flexibility and autonomy? I'm not getting that any more, Dan. All I'm getting is grief, even though I'm running circles around your conservative cronies. Dan: Well, that may be true. But your flamboyance... Mike: Oh, yeah. The sports car, the singles lifestyle, the messy office. But, again, that's appearance, Dan, not substance. Performance is what counts. That's what got me this far, and that's my ticket out. You know I could walk into any firm in town and write my own plan. Dan: Well, there's no reason to be hasty. Mike: Do you honestly believe this can be salvaged? I think not. Maybe it's time for me to be moving on. Isn't that why you called me in here anyway? Dan, feeling uncomfortable, breaks eye contact and shifts his gaze to the New York skyline. After a long pause, he continues, still gazing out of the window. Dan: I don't know, Mike. I feel I've failed. My grand experiment in change has polarized the office; we've got two armies at war out there. On the other hand, you really have done a good job here. EPI will no doubt lose a good part of its customer base if you leave. You have a loyal following, with both customers and staff. If you go, so do they-along with our shot at changing our image. Mike: It's just like you, Dan, to take this problem personally. Blast it, you take everything personally. Even when I beat you at racquetball. Your heart's in the right place-you just can't ever seem to make the cutthroat hit. You know and I know that EPI needs a change in image. But it doesn't appear to be ready for it yet. And I'm certainly not willing to move slowly. Dan: Yeah. Maybe. It's just hard to give up... [long pause]. Well, why don't we talk more about this after the reception tonight? Come on over and see Joanie and the kids. Besides, I'm dying to show off my new boat. Mike: What you see in sailing is beyond me. It's a waste of time, lazily drifting on gentle breezes. Dan: Save it for later, "Speed King." I've got to get ready for tonight. -What would you do to generate a solution? What might the solution be?

When the problem is complex, the initiator should initially focus on a simple problem and build up from there.

In a conflict situation, if the issue is extremely critical and time-sensitive, you are in a position of power, but the relationship is not critical, which conflict response is probably most appropriate?

Which of the following is not a guideline provided by the general framework of collaborative problem-solving?

You have been told that each department's budget is to be cut by 6 percent for the next fiscal quarter. Top management stated this was the fairest approach, given declining sales. Top management is using a compromising approach to resolve potential conflicts.

What does repeated use of the avoiding response to conflict management lead to?

In managing conflict, a manager must be able to understand how cultural differences and other diversity issues may affect the situation.

Describe an example (real or fictional) of avoiding as a conflict management approach. Diagnose whether the use of avoiding was appropriate to the situation and, if not, what approach would have been preferable.

If you care more about the relationship than the issue, what conflict response would you most likely use?

Your boss is very upset with you. She screams at you and calls you all kinds of names. What should you do?

The relevant situational factors to be used in selecting the most appropriate conflict management approach include the importance of the issue and the relationship, the relative power of the parties, and time constraints.

Compare and contrast the four responses to interpersonal conflict other than collaborating. Also, briefly identify the situation where each response would be most appropriate.

Reorganization of the manufacturing operations in a pet food company resulted in the addition of a new third shift and a reallocation of responsibilities among the managers. Conflict ensued based on the uncertainty of who was going to have to work the third shift. The most likely source of the conflict in this situation is role incompatibility.

Educational Pension Investments Educational Pension Investments (EPI), located in New York, invests pension funds for educational institutions. It employs approximately 75 people, 25 of whom are responsible for actual investment activities. The company manages about $5 billion of assets and derived an income of about $10 million. The firm was incorporated almost 30 years ago by a group of academic professionals who wanted to control the destiny of their retirement years by pursuing investments that would be consistent and safe. The firm has weathered rapid technological change and economic volatility. Leadership has consistently resisted opportunities to "make it big" and instead stayed with less profitable but relatively secure investments. Dan Richardson has an MBA from Wharton and is one of the founders of EPI. He started out working in the research department and has worked in every department since then. The other partners, comfortable with Dan's conservative yet flexible nature, elected him to the position of CEO 13 years ago. After that, Dan became known as "the great equalizer." He works hard to make sure that all the partners are included in decisions. Over the years, he has become the confidant of the other seniors and the mentor of the next generation. EPI's employees look to Dan for leadership and direction. Dan's management philosophy is built on the concept of loyalty. As he is fond of saying, "My dad was a small town banker. He told me, 'Look out for the other guys and they'll look out for you.' Sounds corny, I know, but I firmly believe in this philosophy." Given Dan's practice of consistent and safe investing, EPI's growth has not kept pace with other investment opportunities. As a result, Dan has reluctantly begun to consider the merits of a more aggressive investment approach. Part of Dan's reconsideration is that several of the younger analysts are beginning to refer to EPI as "stodgy." Some are leaving EPI for positions in more aggressive firms. One evening, Dan talked about his concern with his racquetball partner and longtime friend, Mike Roth. Mike also happened to be an investment broker in another firm. An MBA graduate from the University of Illinois, Mike's accomplishments in research had brought him widespread recognition. Everyone respected him for his knowledge, his work ethic, and his uncanny ability to predict trends. When Mike heard Dan's concerns about EPI's image and need for an aggressive approach, he suggested to his friend that what EPI needed was some fresh blood, someone who could infuse enthusiasm into the organization-someone like him. He told Dan, "I can help you get things moving. In fact, I've been developing some concepts that would be perfect for EPI." Dan brought up the idea of hiring Mike at the next staff meeting, but the idea was met with caution and skepticism. "Sure, he's had a brilliant career on paper," said one senior partner. "But he's never stayed in one place long enough to really validate his success. Look at his résumé. During the past seven years, he's been with four different firms, in four different positions." "That's true," said Dan, "but his references all check out. In fact, he's been described as a rising star, aggressive, productive. He's just what we need to help us explore new opportunities." Another partner responded, "A friend of mine worked with Mike a while back and said that while he is definitely good, he's a real maverick-in terms of both investment philosophy and lifestyle. Is that what we really want at EPI?" Throughout the discussion, Dan defended Mike's work record. He repeatedly pointed out Mike's impressive performance. He deflected concerns about Mike's reputation by saying that he was a loyal and trusted friend. Largely on Dan's recommendation, the other partners agreed, although somewhat reluctantly, to hire Mike. When Dan offered Mike the job, he promised Mike the freedom and flexibility to operate a segment of the fund as he desired. Mike took the job and performed his responsibilities at EPI in a superior manner. Indeed, he was largely responsible for increasing the managed assets of the company by 150 percent. However, this increase came at a price. From the day Mike moved in, junior analysts enjoyed working with him very much. They liked his fresh, new approach, and were encouraged by the spectacular results. This caused jealousy among the other partners, who thought Mike was pushing too hard to change the tried-and-true traditions of the firm. It was not uncommon for sharp disagreements to erupt in staff meetings, with one or another partner coming close to storming out of the room. Throughout this time, Dan tried to soothe ruffled feathers and maintain an atmosphere of trust and loyalty. Mike seemed oblivious to all the turmoil he was causing. He was optimistic about potential growth opportunities. He believed that voice-activated technology, 3-D printing, and cloud databases were the "waves of the future." Because of this belief, he wanted to direct the focus of his portfolio toward these emerging technologies. "Investments in small firm stocks in these industries, coupled with an aggressive market timing strategy, should yield a 50 percent increase in performance." He rallied support for this idea not only among the younger members of EPI, but also with the pension fund managers who invested with EPI. Mike championed his position and openly questioned the traditional philosophy. "We should compromise on conservatism and achieve some real growth while we can," Mike argued. "If we don't, we'll lose the investors' confidence and ultimately lose them." Most of the senior partners disagreed with Mike, stating that the majority of their investors emphasized security above all else. They also disagreed with the projected profits, stating that "We could go from 8 to 12 percent return on investment (ROI); then again, we could drop to 4 percent. A lot depends on whose data you use." They reminded Mike, "The fundamental approach of the corporation is to provide safe and moderate-income mutual funds for academic pension funds to invest in. That's the philosophy we used to solicit the investments originally, and that's the approach we are obligated to maintain." Months passed, and dissension among the managers grew. Mike began to criticize his detractors openly as he talked with younger EPI employees. In addition, he assigned research department employees to focus on high-tech investments, distracting them from investigating more traditional investments. This disrupted the operations of other EPI managers because their funds relied on timely input from the researchers and other support staff. Amidst a rapidly spreading undercurrent of tension, one of the founding partners, Tom Watson, approached Dan one day. Conservative in his ways, Watson was the partner who walks the office and always has time to stop and chat. He began the conversation. "Dan, I speak for most of the senior staff when I say that we are very troubled by Mike's approach. We've expressed ourselves well enough for Mike to understand, but his actions defy everything we've said. He's a catastrophe just waiting to happen." "I can understand your concern, Tom," replied Dan. "I'm troubled, too. We have an opportunity to attract new business with some of Mike's new ideas. And the younger staff love working on his projects. But he has stirred up a lot of turmoil." Tom agreed. "The real issue is that EPI is no longer presenting a unified image. Mike is willfully defying the stated objectives of our organization. And some of our oldest clients don't like that." "That's true, Tom. On the other hand, some of our newer clients are really encouraged by Mike's approach-and his track record is extremely impressive." "Come on, Dan. You and I both know that many experts feel the market is overheating. Mike's paper profits could quickly be incinerated if the budget and trade deficits don't turn around. We can't stake the reputation of the firm on a few high-flying technology stocks. Dan, the other senior partners agree. Mike must either conform to the philosophy and management practices of this organization or else resign." Reflecting on the situation, Dan realized he faced the most difficult challenge of his career. He felt a strong personal investment in helping Mike succeed. Not only had he hired Mike over the objections of several colleagues; he had personally helped him "learn the ropes" at EPI. Beyond that, Dan was haunted by his promise to Mike that he would have the freedom and flexibility to perform the requirements of the position as he pleased. However, this flexibility had clearly caused problems within EPI. Finally, bowing to the pressure of his peers, Dan called Mike in for a meeting, hoping to find some basis for compromise. Their conversation proceeded as follows: Dan: I gather you know the kinds of concerns the senior partners have expressed regarding your approach. Mike: I guess you've talked with Tom. Well, we did have a small disagreement earlier this week. Dan: The way Tom tells it, you're willfully defying corporate objectives and being insubordinate. Mike: Well, it's just like Watson to see progressive change as an attempt to take away his power. Dan: It's not quite that simple, Mike. When we founded EPI, we all agreed that a conservative stance was best. And right now, with the economic indicators looking soft, many experts agree that it may still be the best alternative. Mike: Dan, what are you going to rely on-predictions or performance? These concerns are just smokescreens to deflect attention away from the sub-par records of other portfolio managers. Old views need to be challenged and ultimately discarded. How else are we going to progress and keep up with our competitors? Dan: I agree we need to change, Mike-but gradually. You have great ideas and terrific instincts, but you can't change a 30-year-old firm overnight. You can help me promote change, but you're pushing so fast, others are digging in their heels. The rate of change is just as important as the direction. Mike: You're telling me. And at this rate, it doesn't make much difference which direction we're headed in. Dan: Come on, Mike. Don't be so cynical. If you'd just stop rubbing people's noses in your performance record and try to see things from their perspective, we could calm things down around here. Then maybe we could start building consensus. Mike's emotions betray his impatience with the pace of the organization; he becomes agitated. Mike: I've always admired your judgment, and I value your friendship, but I honestly think you're kidding yourself. You seem to think you can get this firm to look like it's progressive-shrugging off its stodgy image-without taking any risks or ruffling any feathers. Are you interested in appearance or substance? If you want appearance, then hire a good PR person. If you want substance, then back me up and we'll rewrite the record book. Get off the fence, Dan, before your butt's full of slivers. Dan: Mike, it simply isn't that easy. I'm not EPI, I'm simply its caretaker. You know we make decisions around here by consensus; that's the backbone of this organization. To move ahead, the confidence of the others has to be won, especially the confidence of the seniors. Frankly, your reputation as a maverick makes it hard to foster confidence in, and loyalty to, your plans. Mike: You knew my style when you hired me. Remember how you made it a point to promise me flexibility and autonomy? I'm not getting that any more, Dan. All I'm getting is grief, even though I'm running circles around your conservative cronies. Dan: Well, that may be true. But your flamboyance... Mike: Oh, yeah. The sports car, the singles lifestyle, the messy office. But, again, that's appearance, Dan, not substance. Performance is what counts. That's what got me this far, and that's my ticket out. You know I could walk into any firm in town and write my own plan. Dan: Well, there's no reason to be hasty. Mike: Do you honestly believe this can be salvaged? I think not. Maybe it's time for me to be moving on. Isn't that why you called me in here anyway? Dan, feeling uncomfortable, breaks eye contact and shifts his gaze to the New York skyline. After a long pause, he continues, still gazing out of the window. Dan: I don't know, Mike. I feel I've failed. My grand experiment in change has polarized the office; we've got two armies at war out there. On the other hand, you really have done a good job here. EPI will no doubt lose a good part of its customer base if you leave. You have a loyal following, with both customers and staff. If you go, so do they-along with our shot at changing our image. Mike: It's just like you, Dan, to take this problem personally. Blast it, you take everything personally. Even when I beat you at racquetball. Your heart's in the right place-you just can't ever seem to make the cutthroat hit. You know and I know that EPI needs a change in image. But it doesn't appear to be ready for it yet. And I'm certainly not willing to move slowly. Dan: Yeah. Maybe. It's just hard to give up... [long pause]. Well, why don't we talk more about this after the reception tonight? Come on over and see Joanie and the kids. Besides, I'm dying to show off my new boat. Mike: What you see in sailing is beyond me. It's a waste of time, lazily drifting on gentle breezes. Dan: Save it for later, "Speed King." I've got to get ready for tonight. -What approaches to conflict management are used by the actors in this situation? How effective was each?

The facade is that this conflict response style appears to accomplish a great deal; however, in the long run, the hostility and resentment this approach creates quickly reverses what was accomplished in the short term. Which conflict style is this?

Marla's co-worker, Peter, has failed to meet a deadline of providing her with information for a presentation. Marla's first step in discussing this problem with Peter should be to encourage a two-way discussion.

A manager remarks, "In the problem-solving climate, it is important for the initiator's comment to be brief and to the point. The longer the opening statement, the longer it will take the two parties to work through their problem." What should you do?

When mediating a conflict, when is meeting separately with the parties useful?

Educational Pension Investments Educational Pension Investments (EPI), located in New York, invests pension funds for educational institutions. It employs approximately 75 people, 25 of whom are responsible for actual investment activities. The company manages about $5 billion of assets and derived an income of about $10 million. The firm was incorporated almost 30 years ago by a group of academic professionals who wanted to control the destiny of their retirement years by pursuing investments that would be consistent and safe. The firm has weathered rapid technological change and economic volatility. Leadership has consistently resisted opportunities to "make it big" and instead stayed with less profitable but relatively secure investments. Dan Richardson has an MBA from Wharton and is one of the founders of EPI. He started out working in the research department and has worked in every department since then. The other partners, comfortable with Dan's conservative yet flexible nature, elected him to the position of CEO 13 years ago. After that, Dan became known as "the great equalizer." He works hard to make sure that all the partners are included in decisions. Over the years, he has become the confidant of the other seniors and the mentor of the next generation. EPI's employees look to Dan for leadership and direction. Dan's management philosophy is built on the concept of loyalty. As he is fond of saying, "My dad was a small town banker. He told me, 'Look out for the other guys and they'll look out for you.' Sounds corny, I know, but I firmly believe in this philosophy." Given Dan's practice of consistent and safe investing, EPI's growth has not kept pace with other investment opportunities. As a result, Dan has reluctantly begun to consider the merits of a more aggressive investment approach. Part of Dan's reconsideration is that several of the younger analysts are beginning to refer to EPI as "stodgy." Some are leaving EPI for positions in more aggressive firms. One evening, Dan talked about his concern with his racquetball partner and longtime friend, Mike Roth. Mike also happened to be an investment broker in another firm. An MBA graduate from the University of Illinois, Mike's accomplishments in research had brought him widespread recognition. Everyone respected him for his knowledge, his work ethic, and his uncanny ability to predict trends. When Mike heard Dan's concerns about EPI's image and need for an aggressive approach, he suggested to his friend that what EPI needed was some fresh blood, someone who could infuse enthusiasm into the organization-someone like him. He told Dan, "I can help you get things moving. In fact, I've been developing some concepts that would be perfect for EPI." Dan brought up the idea of hiring Mike at the next staff meeting, but the idea was met with caution and skepticism. "Sure, he's had a brilliant career on paper," said one senior partner. "But he's never stayed in one place long enough to really validate his success. Look at his résumé. During the past seven years, he's been with four different firms, in four different positions." "That's true," said Dan, "but his references all check out. In fact, he's been described as a rising star, aggressive, productive. He's just what we need to help us explore new opportunities." Another partner responded, "A friend of mine worked with Mike a while back and said that while he is definitely good, he's a real maverick-in terms of both investment philosophy and lifestyle. Is that what we really want at EPI?" Throughout the discussion, Dan defended Mike's work record. He repeatedly pointed out Mike's impressive performance. He deflected concerns about Mike's reputation by saying that he was a loyal and trusted friend. Largely on Dan's recommendation, the other partners agreed, although somewhat reluctantly, to hire Mike. When Dan offered Mike the job, he promised Mike the freedom and flexibility to operate a segment of the fund as he desired. Mike took the job and performed his responsibilities at EPI in a superior manner. Indeed, he was largely responsible for increasing the managed assets of the company by 150 percent. However, this increase came at a price. From the day Mike moved in, junior analysts enjoyed working with him very much. They liked his fresh, new approach, and were encouraged by the spectacular results. This caused jealousy among the other partners, who thought Mike was pushing too hard to change the tried-and-true traditions of the firm. It was not uncommon for sharp disagreements to erupt in staff meetings, with one or another partner coming close to storming out of the room. Throughout this time, Dan tried to soothe ruffled feathers and maintain an atmosphere of trust and loyalty. Mike seemed oblivious to all the turmoil he was causing. He was optimistic about potential growth opportunities. He believed that voice-activated technology, 3-D printing, and cloud databases were the "waves of the future." Because of this belief, he wanted to direct the focus of his portfolio toward these emerging technologies. "Investments in small firm stocks in these industries, coupled with an aggressive market timing strategy, should yield a 50 percent increase in performance." He rallied support for this idea not only among the younger members of EPI, but also with the pension fund managers who invested with EPI. Mike championed his position and openly questioned the traditional philosophy. "We should compromise on conservatism and achieve some real growth while we can," Mike argued. "If we don't, we'll lose the investors' confidence and ultimately lose them." Most of the senior partners disagreed with Mike, stating that the majority of their investors emphasized security above all else. They also disagreed with the projected profits, stating that "We could go from 8 to 12 percent return on investment (ROI); then again, we could drop to 4 percent. A lot depends on whose data you use." They reminded Mike, "The fundamental approach of the corporation is to provide safe and moderate-income mutual funds for academic pension funds to invest in. That's the philosophy we used to solicit the investments originally, and that's the approach we are obligated to maintain." Months passed, and dissension among the managers grew. Mike began to criticize his detractors openly as he talked with younger EPI employees. In addition, he assigned research department employees to focus on high-tech investments, distracting them from investigating more traditional investments. This disrupted the operations of other EPI managers because their funds relied on timely input from the researchers and other support staff. Amidst a rapidly spreading undercurrent of tension, one of the founding partners, Tom Watson, approached Dan one day. Conservative in his ways, Watson was the partner who walks the office and always has time to stop and chat. He began the conversation. "Dan, I speak for most of the senior staff when I say that we are very troubled by Mike's approach. We've expressed ourselves well enough for Mike to understand, but his actions defy everything we've said. He's a catastrophe just waiting to happen." "I can understand your concern, Tom," replied Dan. "I'm troubled, too. We have an opportunity to attract new business with some of Mike's new ideas. And the younger staff love working on his projects. But he has stirred up a lot of turmoil." Tom agreed. "The real issue is that EPI is no longer presenting a unified image. Mike is willfully defying the stated objectives of our organization. And some of our oldest clients don't like that." "That's true, Tom. On the other hand, some of our newer clients are really encouraged by Mike's approach-and his track record is extremely impressive." "Come on, Dan. You and I both know that many experts feel the market is overheating. Mike's paper profits could quickly be incinerated if the budget and trade deficits don't turn around. We can't stake the reputation of the firm on a few high-flying technology stocks. Dan, the other senior partners agree. Mike must either conform to the philosophy and management practices of this organization or else resign." Reflecting on the situation, Dan realized he faced the most difficult challenge of his career. He felt a strong personal investment in helping Mike succeed. Not only had he hired Mike over the objections of several colleagues; he had personally helped him "learn the ropes" at EPI. Beyond that, Dan was haunted by his promise to Mike that he would have the freedom and flexibility to perform the requirements of the position as he pleased. However, this flexibility had clearly caused problems within EPI. Finally, bowing to the pressure of his peers, Dan called Mike in for a meeting, hoping to find some basis for compromise. Their conversation proceeded as follows: Dan: I gather you know the kinds of concerns the senior partners have expressed regarding your approach. Mike: I guess you've talked with Tom. Well, we did have a small disagreement earlier this week. Dan: The way Tom tells it, you're willfully defying corporate objectives and being insubordinate. Mike: Well, it's just like Watson to see progressive change as an attempt to take away his power. Dan: It's not quite that simple, Mike. When we founded EPI, we all agreed that a conservative stance was best. And right now, with the economic indicators looking soft, many experts agree that it may still be the best alternative. Mike: Dan, what are you going to rely on-predictions or performance? These concerns are just smokescreens to deflect attention away from the sub-par records of other portfolio managers. Old views need to be challenged and ultimately discarded. How else are we going to progress and keep up with our competitors? Dan: I agree we need to change, Mike-but gradually. You have great ideas and terrific instincts, but you can't change a 30-year-old firm overnight. You can help me promote change, but you're pushing so fast, others are digging in their heels. The rate of change is just as important as the direction. Mike: You're telling me. And at this rate, it doesn't make much difference which direction we're headed in. Dan: Come on, Mike. Don't be so cynical. If you'd just stop rubbing people's noses in your performance record and try to see things from their perspective, we could calm things down around here. Then maybe we could start building consensus. Mike's emotions betray his impatience with the pace of the organization; he becomes agitated. Mike: I've always admired your judgment, and I value your friendship, but I honestly think you're kidding yourself. You seem to think you can get this firm to look like it's progressive-shrugging off its stodgy image-without taking any risks or ruffling any feathers. Are you interested in appearance or substance? If you want appearance, then hire a good PR person. If you want substance, then back me up and we'll rewrite the record book. Get off the fence, Dan, before your butt's full of slivers. Dan: Mike, it simply isn't that easy. I'm not EPI, I'm simply its caretaker. You know we make decisions around here by consensus; that's the backbone of this organization. To move ahead, the confidence of the others has to be won, especially the confidence of the seniors. Frankly, your reputation as a maverick makes it hard to foster confidence in, and loyalty to, your plans. Mike: You knew my style when you hired me. Remember how you made it a point to promise me flexibility and autonomy? I'm not getting that any more, Dan. All I'm getting is grief, even though I'm running circles around your conservative cronies. Dan: Well, that may be true. But your flamboyance... Mike: Oh, yeah. The sports car, the singles lifestyle, the messy office. But, again, that's appearance, Dan, not substance. Performance is what counts. That's what got me this far, and that's my ticket out. You know I could walk into any firm in town and write my own plan. Dan: Well, there's no reason to be hasty. Mike: Do you honestly believe this can be salvaged? I think not. Maybe it's time for me to be moving on. Isn't that why you called me in here anyway? Dan, feeling uncomfortable, breaks eye contact and shifts his gaze to the New York skyline. After a long pause, he continues, still gazing out of the window. Dan: I don't know, Mike. I feel I've failed. My grand experiment in change has polarized the office; we've got two armies at war out there. On the other hand, you really have done a good job here. EPI will no doubt lose a good part of its customer base if you leave. You have a loyal following, with both customers and staff. If you go, so do they-along with our shot at changing our image. Mike: It's just like you, Dan, to take this problem personally. Blast it, you take everything personally. Even when I beat you at racquetball. Your heart's in the right place-you just can't ever seem to make the cutthroat hit. You know and I know that EPI needs a change in image. But it doesn't appear to be ready for it yet. And I'm certainly not willing to move slowly. Dan: Yeah. Maybe. It's just hard to give up... [long pause]. Well, why don't we talk more about this after the reception tonight? Come on over and see Joanie and the kids. Besides, I'm dying to show off my new boat. Mike: What you see in sailing is beyond me. It's a waste of time, lazily drifting on gentle breezes. Dan: Save it for later, "Speed King." I've got to get ready for tonight. -Based on the behavioral guidelines for the collaborative approach, how could Dan have managed this conflict more effectively?