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Conflict Management in Buyer-Seller Relationships

lionel BOBOT

Given differing organizational needs and goals, underlying conflicts and tensions are an inherent part of buyer-seller relationships. This research presents and tests a conceptual framework examining the effect of the type of conflict (dysfunctional and functional) in the relationship, the conflict management approaches used by the salesperson, and the subsequent quality of the buyer-seller relationship. The framework is tested using surveys completed by 109 salespeople. The findings of this study are relevant to marketing practitioners and managers, particu- larly salespeople, sales managers, and purchasing managers. First, the most straightforward and obvious finding is that dysfunctional conflict is detrimental to relationship quality. Conversely, functional conflict showed no significant association with either trust or satisfaction. The only conflict management strategy that had a significant association with both functional and dysfunctional conflicts in this study was the confronting strategy.

Buyer-seller relationships have long been of intense interest to market-ing academics and practitioners, most particularly within the domain of business-to-business markets (Beetles and Crane, 2005).

Buyer-seller relationships have been modeled for a long time from a purely transactional perspective. Early textbooks, such as Alexander, Cross, and Hill (1967), though alluding to longer-term relationships, treated buying and selling as a short-term transactional phenomenon. More recently, researchers have realized that business-to-business relationships are often complex and long-lasting. For these relationships to be enduring, both parties need to make adaptations.

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Organizational success depends on cooperative efforts between firms. Organizations are moving away from discrete transactions and toward cooperative relational exchanges, with the ultimate end state being vertical integration: long-term continuous relationships built on mutual depen- dence and based on quality, delivery, and technical support rather than price. Between discrete transactions and vertical integration on either end of the relationship spectrum, organizations may develop long-term rela- tionships, partnerships, strategic alliances, and networks (Webster, 1992).

The relationship marketing perspective holds that to be competitive it is critical that relationships between companies be actively maintained and nurtured by all of the parties involved. Many variables (for example, trust, commitment, communication, cooperation, power, satisfaction, and con- flict) have been identified in the literature as being critical to development and continuance of marketing relationships between buyers and sellers (see Anderson and Narus, 1990; Bradford, Stringfellow, and Weitz, 2005; Dwyer, Schurr, and Oh, 1987).

The selling literature has focused on the nature of buyer-seller rela- tionships and the relationship development process (Beetles and Crane, 2005), but little research has been done on specific conflict management behaviors used by salespeople that lead to effective buyer-seller relation- ships (Ganesan, 1993; Bradford and Weitz, 2009). On top of that, by studying the two dimensions of conflict, dysfunctional conflict and func- tional conflict, we differ from the vast majority of traditional research, which has focused solely on dysfunctional conflict.

The research presented here develops and tests a framework that examines a key aspect of relationship building: management of conflict. Prior research on conflict management in buyer-seller and channel rela- tionships describes how factors such as power, dependency, depth and breadth of conflict, and relational norms are related to the use of various conflict management approaches and negotiation strategies (Bradford and Weitz, 2009; Ganesan, 1993). In contrast, we examine how use of conflict management approaches in dealing with different types of con- flict can improve buyer-seller relationships. The focus of this research is appropriate use of conflict management behavior in response to conflict type, not on the direct effects of conflict and conflict management behavior on relationship quality.

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Conflict in Buyer-Seller Relationships

Like all relationships, buyers and sellers are likely to encounter conflicts. How those conflicts are managed will determine whether a positive, and possibly a long-term, relationship is established for their mutual benefit.

Functional and Dysfunctional Conflicts in Buyer-Seller Relationships

Considerable research has supported the benefits of strong buyer-seller relationships (see Dwyer, Schurr, and Oh, 1987; Wagner, Klein, and Keith, 2003), but it also comes with some unexpected costs, as conflicts are likely to arise from increased interdependence (Lewin, 1947; Thomas and Kilmann, 1974).

Contemporary definitions of conflict focus on interdependence instead of unalterable opposition: “A situation in which interdependent people express differences in satisfying their individual needs and interests, and they experience interference from each other in accomplishing these goals” (Donohue and Kolt, 1992). Conflict refers to a process that begins when one party perceives that the other has frustrated, or is about to frustrate, some concern (Plank, Newell, and Reid, 2006).

A contemporary view among various streams of literature examining conflict is that it has two underlying dimensions, one dysfunctional and the other functional. Guetzkow and Gyr (1954) were among the first to investigate conflict in organizations. The terms for forms of conflict have varied with the author (Amason and Sapienza, 1997; Jehn and Mannix, 2001), but in essence they describe conflict as either dysfunctional (affective)- based conflict or functional (cognitive)-based conflict. Jehn (1995) demonstrated, through in-depth interviews, that both of these dimensions often occur in business contexts. Functional conflict involves disagreement over how to accomplish the tasks undertaken by two parties (see, for exam- ple, Jehn, 1997).

Many studies have reported evidence of the negative impact of conflict on various aspects of buyer-seller relationships, such as trust (Kwon and Suh, 2004), loyalty (Plank and Newell, 2007), and relationship develop- ment (Plank, Newell, and Reid, 2006). Conflict is a multidimensional concept (Jehn, 1997; Litterer, 1966), with various conflict attributes, among them the frequency, intensity, cognitiveness (work-related disagree- ment), and affectiveness (interpersonal incompatibilities or problems

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among persons). In addition, dysfunctional conflict is believed to reduce team performance and member satisfaction, because it produces tension and antagonism, and it distracts people from their task performance (De Dreu and Weingart, 2003). Accordingly, we define dysfunctional con- flict in the conventional sense: it is unhealthy, and associated with dysfunc- tional behaviors, dissatisfaction, and poor individual or group performance.

In contrast, functional conflict is believed to have beneficial effects that flow from the consultative interactions occurring when functional conflict is present (Amason, 1996; Bradford, Stringfellow, and Weitz, 2005). Where functional conflict is present, people feel free to express their opin- ions and challenge others’ ideas, beliefs, and assumptions (Bradford, Stringfellow, and Weitz, 2009; Johanson and Mattsson, 1987). Functional conflict can therefore be viewed as an antidote to groupthink, in which feelings of solidarity and loyalty to a decision-making group may override the imperative to logically and realistically evaluate all possible options (see Filley, 1970). For example, conflict can serve as a medium through which problems are aired and solutions derived (Coser, 1956; Deutsch, 1973; Simmel, 1955). It can serve integrative functions through voicing each party’s perspectives (Coser, 1956) and can enhance the ability to work together in the future. Stern, El-Ansary, and Coughlan (1996) posit that conflict motivates parties to adapt, grow, and seize new opportunities. Fun- damental to the positive effect(s) of conflict is that “creative action on the part of some party to the conflict is needed if the conflict is to be success- fully resolved” (Rosenbloom, 1987, p. 121). Accordingly, we define func- tional conflict as a constructive challenging of ideas, beliefs, and assumptions; respect for others’ viewpoints even when parties disagree; and consultative interactions involving useful give and take.

Conflict Resolution Strategies

A large number of conflict management publications have sprung up in various forms (Bradford, Stringfellow, and Weitz, 2005; Rahim and Bonoma, 1979). Follett (1940) suggested three main ways to handle con- flict: domination, compromise, and integration; she found others as well (avoidance, suppression). Blake and Mouton (1964) were the first to present a conceptualization of the five conflict styles for managing interper- sonal conflict: problem solving, smoothing, forcing, withdrawal, and sharing based on the dual-concern model. This model focuses on the atti- tudes of the manager, namely, concern for production and concern for people.

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Using the ideas of Blake and Mouton, Thomas and Kilmann (1974) identified five styles of conflict management: (1) collaborating, (2) com- promising, (3) avoiding, (4) accommodating, and (5) confronting (see Figure 1).

The style identified as collaborating is both assertive and cooperative, on the two behavioral dimensions. This style is typically characterized as win- win. Those working with this style attempt to work with the other person to find some solution that fully satisfies the concerns of both persons. This style is often called integrative in that the solution to the conflict is a gen- uine integration of the desires of both sides to win.

Compromising style is intermediate in both assertiveness and coopera- tiveness. The objective is to find some quick, mutually agreeable solution that partially satisfies everyone. Typically, behavior that is compromising is identified with statements such as “splitting the difference,” “exchanging concessions,” or “seeking the middle ground.”

The third style is avoiding, marked by unassertive and uncooperative on the behavioral dimensions. Individuals expressing this style do not immediately pursue their own concerns or those of the other person. In effect, they avoid conflict. Typical behavior might include sidestepping an issue, postponing it, or simply withdrawing from a threatening situation. This behavior does not eliminate conflict; rather, the conflict remains latent and must be dealt with another time.

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Figure 1. Conflict Resolution Strategies, Adapted from Thomas (1992)

Assertiveness (Attempting to satisfy

one’s own concerns)

Confronting (win-lose)

Collaborating (win-win)

Uncooperative Compromise

Cooperative

Avoiding (lose-lose)

Accommodating (lose-win)

Cooperativeness (Attempting to satisfy

other’s concerns)

The accommodating style is unassertive and cooperative on the behav- ioral dimensions. In this style the individual neglects his or her own con- cerns to satisfy those of the other person. This style might take the form of selfless generosity, obeying another person’s order, or yielding to another’s point of view.

A person using a confronting style of conflict management is assertive and uncooperative on the two dimensions of behavior. This is a power- oriented style, in which one uses whatever power seems appropriate to win one’s position. This style lends itself to the classic win-lose view of conflict.

The use of the various styles is not considered exclusive. According to Thomas and Kilmann (1974):

Each of us is capable of using all five conflict-handling modes; none of us can be characterized as having a single, rigid style of dealing with conflict. However, any given individual uses some modes better than oth- ers and therefore tends to rely upon those modes more heavily than others, whether because of temperament or practice [p. 11].

Since the inception of the work of Thomas and Kilmann (1974), Thomas (1992) has further defined what the modes best describe. Previ- ously the modes of conflict management were variously interpreted as ori- entations, behaviors, strategies, and other constructs. Thomas now posits “that they are best described as intentions, more precisely, the strategic intention of a party in conflict, what the party is attempting to accomplish in satisfying own and other’s goals” (1992, p. 269). Thus the terms under- lying the basis of the model, assertiveness and cooperativeness, are now viewed as intentional, attempting to satisfy one’s own and the other’s con- cerns. Aside from the foundational Blake and Mouton Managerial Grid (1964), Hall (1969), Lawrence and Lorsch (1967), and Thomas and Kilmann (1974) all produced conflict management style studies using the two dimensional conflict behaviors previously described.

Quality of Relationship Defined

In the buyer-seller arena, the quality of the relationship has been measured using many of the same constructs as in the channels literature. Some of these are trust and satisfaction (Crosby, Evans, and Cowles, 1990; Boles, Johnson, and Barksdale, 2000), age of the relationship and increasing or decreasing importance of the relationship (Steinman, Deshpande, and Farley, 2000), frequency of contact with salesperson, extent of social

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interaction with salesperson, and trust of the salesperson (Doney and Cannon, 1997). Narayandas and Rangan (2004) found that trust in buyer- seller relationships led to long-term relationships, regardless of asymmetry in power structures. This was attributed to interorganizational commit- ment, which was a product of the higher level of trust. Trust and satisfac- tion have been used both as separate constructs and combined to measure relationship quality in interorganizational studies and buyer-seller studies more than any other constructs. The two constructs together combine an emotional state that represents historical, present, and anticipated interac- tions between the buyer and the seller and therefore represents relationship quality.

Conceptual Framework

A conceptual framework specifying the relationships between the con- structs discussed in the previous section is shown in Figure 2. Hypotheses related to the principal contribution of this research—the moderating effects of conflict management approaches—are outlined following discus- sion of potential direct effects of the type of conflict and conflict manage- ment behavior.

For added ease in understanding the conflict management styles pre- sented here, the original party responding within the conflict incident will be referred to as the seller, with the party reacting to the first response being referred to as the buyer. This is not meant to insinuate in any way that this is always the case, but it illustrates what seems most likely to happen.

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Figure 2. Conceptual Framework

Type of Conflict Quality of Relationship

Conflict Management Approaches

• Collaborating • Compromising • Avoiding • Accommodating • Confronting

• Dysfunctional • Functional

• Trust • Satisfaction

Collaborating Management Strategy and Functional and Dysfunc- tional Conflicts. As discussed previously, a collaboration conflict manage- ment approach involves exploring and developing integrative, win-win solutions to conflict issues. In a buyer-seller environment, the nature of the sales process, as well as the other stimuli mentioned above, quickly and easily lead to active conflict. However, if the seller desires for the incident to be concluded in such a way that both parties are satisfied with the outcome, he or she may look for and offer suggestions or recommendations that would lead to that outcome. Integrative-like behaviors have been proposed to reduce role conflict, increase profit, increase satisfaction (Dabholkar, Johnston, and Cathey, 1994), decrease misperceptions, and improve com- munication (Thomas, 1992). Thus, as the collaborative style is used and reciprocated, communication should become more open, and it is likely those innovative solutions will be discovered. This constructive interaction should cause the buyer and seller to have a positive perception of the out- come of the conflict incident. Consequently, two hypotheses are offered:

H1a: A collaborating conflict management strategy is positively associated with functional conflict in a buyer-seller environment.

H1b: A collaborating conflict management strategy is negatively associated with dysfunctional conflict in a buyer-seller environment.

Compromising Management Strategy and Functional and Dysfunctional Conflicts. The compromise approach seeks solutions that consider both par- ties’ needs, typically by “splitting the difference” and “meeting the partner halfway” (Hocker and Wilmot, 1998). Both the buyer and the seller should eventually gain something of value, while giving up some other ele- ment that may have been of equal or lesser value. Because of these gains, both parties should exit the conflict incident having a positive perception of the outcome. Therefore:

H2a: A compromising management strategy is positively associated with func- tional conflict in a buyer-seller environment.

H2b: A compromising management strategy is negatively associated with dysfunctional conflict in a buyer-seller environment.

Avoiding Management Strategy and Functional and Dysfunctional Conflicts. The avoiding management style is one in which a party exhibits

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no concern for either oneself or the other party (Rahim and Magner, 1995). An individual may avoid conflict instinctively or deliberately. Instinctive withdrawal may come because an individual has an aversion to confrontation. Deliberate withdrawal may be an effort to maintain the relationship by avoiding conflict, or it may be quiet rebellion demonstrated by refusal to communicate with the relationship partner.

When relationship partners feel that they are powerless to change any- thing in the relationship, frustration often builds (Deutsch, 1973). Avoid- ing behavior usually stems from this frustration, an emotion that is unlikely to disappear. As the conditions surrounding the conflict incident continue or intensify, the frustration grows and eventually erupts, often in an emotional outburst. This outburst would not seem conducive to posi- tive outcomes associated with functional conflict but is instead more likely to lead to dysfunctional conflict. Therefore two hypotheses are offered:

H3a: An avoiding conflict management strategy is negatively associated with functional conflict in a buyer-seller environment.

H3b: An avoiding conflict management strategy is positively associated with dysfunctional conflict in a buyer-seller environment.

Accommodating Management Strategy and Functional and Dysfunctional Conflicts. The accommodating conflict management strategy occurs when one party has little concern for their own interests but high concern for the other party’s interests (Rahim and Magner, 1995). A conflict incident in which the accommodating strategy is used is a win-lose situation, with the understanding that one party has an “I let you win because I need you” attitude. If the buyer is a key account because of large volume or the firm the buyer represents is an industry leader, the seller may make continuing concessions to the buyer. This could cause the seller to resent the buyer’s attitude, as well as resent that his or her earnings may be reduced because price cuts have eaten into commissions. Also, the seller may receive pres- sure from the firm to satisfy the customer yet keep the price as listed. As the buyer receives the concession from the seller, he or she may remember past reductions the salesperson has made or compare the current concession with offers from other salespeople. The buyer may push for even larger concessions. This could cause additional stress on the salesperson and resentment from the buyer if the concessions are not made. As the conflict incident concludes, communication may be strained, and both parties may

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be wishing for other outcomes. Therefore, two additional hypotheses are offered:

H4a: An accommodating conflict management strategy is negatively associated with functional conflict in a buyer-seller environment.

H4b: An accommodating conflict management strategy is positively associated with dysfunctional conflict in a buyer-seller environment.

Confronting Management Strategy and Functional and Dysfunctional Conflicts. The confronting conflict management strategy is one in which one party attempts to force its wishes or will on the other party in the con- flict incident (Bradford and Weitz, 2009). The party using the confronting strategy has low concern for others and high concern for self (Rahim and Magner, 1995).

A confronting strategy may emerge if a seller enters a conflict incident with a need to satisfy his or her ego, with anger over a previous conflict incident or over something totally unrelated to the current situation, or with pressure from a manager to resolve this situation in a given way. The communication used by the seller may be abrupt or rude, or the salesper- son may even resort to lying to the buyer to ensure that the conflict is set- tled in the seller’s best interest. If the buyer perceives the communication as negative, he or she could respond first with reason but then dissolve into angry terms in reciprocation to the seller. As it becomes obvious that the conflict issues will not be resolved, previously latent conflict issues may erupt into active conflict. Personal feelings and accusations may soon be involved (Thomas, 1992). Therefore these hypotheses are offered:

H5a: A confronting conflict management strategy is negatively associated with functional conflict.

H5b: A confronting conflict management strategy is positively associated with dysfunctional conflict.

Functional Conflict and Relationship Quality. Functional conflict is defined as members having different viewpoints (Jehn and Mannix, 2001). Functional conflict produces positive outcomes in management teams (Jehn, 1997; Jehn and Mannix, 2001). These positive outcomes arise because functional conflict is a means for buyers and sellers to identify and discuss alternative perspectives and remove impediments to effectively

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working together. Functional conflict can also stimulate interest and curiosity, be the catalyst for understanding, and let problems be aired and solutions be arrived at (Coser, 1956; Deutsch, 1973; Simmel, 1955). Thus it is anticipated that functional conflict will have a positive effect on the quality of buyer-seller relationships:

H6: Functional conflict will have a positive association with relationship quality in a buyer-seller environment.

Dysfunctional Conflict and Relationship Quality. Past social conflict literature has continually demonstrated that dysfunctional (affective) con- flict has negative repercussions on a number of relationship-focused vari- ables (Guetzkow and Gyr, 1954; Jehn, 1995). In addition, dysfunctional conflict limits processing of new information, gives rise to hostile attribu- tion concerning one another’s intentions and behaviors, decreases willing- ness to tolerate opposition, and disturbs effective communication and cooperation within the network (e.g., Amason, 1996; Bradford and Weitz, 2009). Thus we posit that dysfunctional conflict will also have an impact on the buyer’s rating of the quality of a relationship:

H7: Dysfunctional conflict will have a negative association with relationship quality in a buyer-seller environment.

Methods

This section of the paper will describe the methods used for this research, including sampling information, pretests, measures, and analytical tools.

Research Setting and Sample

The respondents in this research were business-to-business salespeople from a number of industries. Multiple industries were used in this research to increase the generalizability of the results. These salespeople are consid- ered the primary marketing boundary spanners and are cognizant of the conflicts encountered in business relationships with their customers, as well as of their own conflict management behaviors. Members of upper management from the respondent companies were contacted in order to obtain the final sample of salespeople used in this research. From these ini- tial conversations with top management, a list of salespeople was obtained.

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The survey investigated:

• Salespeople’s perception of the sources of conflict in the focal buyer- seller relationship

• The types of conflict management behavior used in the relationship

• Their assessment of the quality of the buyer-seller relationship

Questionnaires were mailed to salespeople along with a cover letter explaining the purpose of the study and a postage-paid return envelope. All salespeople responding were guaranteed confidentiality. Each company was offered a summary report of the results in exchange for its participa- tion. The salespeople-respondents were instructed to complete the entire questionnaire in reference to a specific customer on whom they were asked to provide information. Some respondents were asked to choose a cus- tomer with whom they had a good, long-standing relationship, while oth- ers were asked to choose a customer with whom their relationship was in the early stages of development.

The sample size was 320 salespeople; 109 completed and returned the survey, for a response rate of 34 percent. The study’s respondents were experienced and knowledgeable. The salespeople in this sample have been working an average of seventeen years in this occupation and have worked, on average, ten years for their current company. They spend about 25 per- cent of their time selling to their customers. The average length of time the salespersons have been doing business with their respective customers is 5.4 years, and the average time these customers have been doing business with their company is eleven years.

To obtain addition variance in the types of relationships, we randomly asked some respondents to choose a customer with whom they had a good, long-standing relationship, and others were asked to choose a customer with whom their relationship was in the early stages of development. There were 109 salespeople who answered with regard to good, long-standing relationships and 93 in the early relationship stages. A Chow test using the regression model for testing the hypotheses indicates that responses from salespeople about customers in different relationships could be pooled, F(17, 201) � 1.61, p � 0.10.

Efforts to overcome nonresponse bias were accomplished through attempting to increase the response rate by soliciting the respondents who did not answer in the first wave of mailings, with a second mailing (two weeks later) accompanied by a telephone call. The expectation is that there

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would be more conflict reported by salespeople who reported on relation- ships in the second wave of mailings.

Per Armstrong and Overton (1977), one indicator of potential responses is difference between early and later respondents. A Chow test of the regression model used to test the hypotheses comparing early and later respondents indicated no difference in the estimated coefficients, F(17, 201) � 0.74, p � 0.10.

Pretests

Three pretests were undertaken. The goal of the first pretest was to assist in instrument and measure development. A preliminary instrument was developed and tested on ten groups of MBA students, assessing conflict management behavior, type of conflict, and quality of the relationship in a mixed-motive exercise. Item analysis and exploratory factor analyses were used to assess and purify the measures. Items with high loadings on the intended factor and no substantial cross-loadings were retained.

The second and third pretests were used in tandem to assess the revised survey with regard to feasibility of respondent completion and return, time requirement, and clarity of specific items. In this instance, a survey con- taining the measures of conflict, conflict management approaches, and relationship quality was sent to forty-three salespeople from a major med- ical equipment company. In addition to analyses of the survey responses, debriefings were conducted with these salespeople, members of sales man- agement, and their customers. On the basis of this extensive feedback, the questionnaire was shortened and streamlined. All responses from the pretest stages were then discarded and not included in the study reported here. In addition to analyses of the survey responses, debriefings were con- ducted with these salespeople, members of sales management, and their customers.

Measures

To study the research questions posed in this study, three separate scales were chosen to measure the constructs of the proposed model. Each scale repli- cates one of the prior studies related to conflict management. To measure conflict management strategies, Rahim (1983) developed a scale of twenty- eight items to measure the five conflict management strategies that are based on Thomas’s work (1974), which explained 89.3 percent of the variance in all five styles. To measure functional and dysfunctional conflict, Jehn (1995)

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developed a scale in which four items attempt to measure dysfunctional con- flict and reflect the understanding that dysfunctional conflict becomes per- sonal and negative very quickly; three items attempt to measure functional conflict and indicate the awareness that functional conflict involves disagree- ment about the conflict issue and remains impersonal. Crosby, Evans, and Cowles (1990) developed a scale to specifically measure relationship quality in a buyer-seller environment through items measuring levels of satisfaction and trust. From all of this developmental work, a questionnaire was devel- oped to survey the sample selected for this study. Twenty-eight items from the Rahim scale, seven items from the Jehn scale, and eleven items from the Crosby, Evans, and Cowles scale were included. The survey instrument is seen in the Appendix.

Method of Analysis

This study seeks to examine the relationship between the independent variables and one dependent variable at a time. A statistical technique that fits testing of the proposed hypotheses is multiple regression analysis. There were four separate regression models.

Results

The results reveal new information about various strategies and their impacts on conflict.

Functional and Dysfunctional Conflicts

The first five hypotheses of the proposed model predicted the effect of con- flict management strategies on functional and dysfunctional conflicts. As stated, H1(a) and H2(a) proposed a positive relationship between the col- laborating strategy and functional conflict and between the compromising strategy and functional conflict. As shown in Table 1, the direction of the collaborating strategy with functional conflict was positive as predicted, but these findings were not significant. The direction of the compromising strategy with functional conflict was negative, which was not as predicted but was not significant. Thus H1(a) and H2(a) are not supported. As stated, H1(b) and H2(b) proposed negative relationships between the collaborat- ing and compromising strategies and dysfunctional conflict. As shown in Table 2, the direction of collaborating strategy with dysfunctional conflict was negative, as predicted, but these findings were not significant.

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The direction of compromising strategy with dysfunctional conflict was also negative, as predicted, but these findings were not significant; neither H1(b) nor H2(b) is supported.

Given the constructive nature of the collaborating conflict manage- ment strategy, sellers might not perceive what occurs in the interaction between buyer and seller as conflict at all. It might be perceived as only positive communication. This would explain the direction in both H1(a)

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Table 1. Results of Regression Analysis for Functional Conflict and Conflict Management Strategies

Unstandardized Coefficient Standardized Coefficient (Beta)

Constant 2.229* —

Collaborating 9.606 0.367

Compromising �8.926 �0.81

Avoiding 3.626 0.035

Accommodating �1.562 �0.012

Confronting 0.315 0.312*

F change — �6.775*

R2 — 0.113

Adjusted R 2 — 0.096

Note: *p � 0.01; **p � 0.05; ***p � 0.1.

Table 2. Results of Regression Analysis for Dysfunctional Conflict and Conflict Management Strategies

Unstandardized Coefficient Standardized Coefficient (Beta)

Constant 2.237* —

Collaborating �6.713 �0.045

Compromising �4.225 �0.004

Avoiding 2.801 �0.025

Accommodating �3.243 �0.012

Confronting 0.203 0.193*

F change — 2.011***

R2 — 0.036

Adjusted R2 — 0.018

Note: *p � 0.01; **p � 0.05; ***p � 0.1

and H1(b) being correct but insignificant. In a study considering the mar- keting channel relationships in the specialty tools and fasteners industry, Payan and McFarland (2005) found that only the influence strategy rationality—which has a definition nearly identical to that of integration— was likely to produce channel member compliance. Similarly, in the Payan and McFarland study, the influence strategy recommendations was not as likely to produce compliance. Although recommendations and the com- promising conflict management strategy are not identical, they are similar in that a party in a discussion is being asked to do something he or she does not wish to do. Even if the other party in the discussion is willing to give and take, it would seem logical that one or both parties would perceive the discussion as negative communication. This perception would explain the unexpected direction of the relationship between the compromising strat- egy and functional conflict, as well as the expected direction between the compromising strategy and dysfunctional conflict, even though both were statistically insignificant associations.

As stated, hypotheses 3(a) and 4(a) proposed negative relationships between the avoiding and accommodating strategies and functional con- flict. As shown in Table 1, the direction of the avoiding strategy with func- tional conflict was positive, which is not as predicted. The direction of the accommodating strategy with functional conflict was negative, as pre- dicted, but these findings were not significant. Therefore, H3(a) and H4(a) are not supported.

As shown in Table 2, the direction of both the avoiding strategy with dys- functional conflict and the accommodating strategy with dysfunctional con- flict was positive, as predicted. Since neither of these findings was significant, neither H3(b) nor H4(b) is supported. In a study of conflict within teams, Dixon, Gassenheimer, and Barr (2003) proposed that individuals can exhibit “non-voice behaviours” for different reasons in a conflict situation.

Some individuals remain quiet in response to a conflict situation out of loyalty to the team. If this occurs, the overriding concern for the other indi- viduals of the team may lead to the team being effective in spite of the con- flict. Other individuals may choose to avoid the conflict or oblige others on their team from lack of concern. This “I don’t care” attitude may allow oth- ers on the team who are more conscientious to deal with the conflict and make good decisions for the team. However, some individuals may choose to avoid conflict out of intentional neglect, thinking to cause harm to the team out of spite. This passive-aggressive behavior may or may not lead to dysfunctional conflict, depending on the general make-up of the team’s

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membership. None of these factors were considered in this study and may have contributed to the unexpected direction of the avoidance/functional conflict relationship. The lack of significance in the relationships may also be attributed to how differently individuals perceive avoidance and oblig- ing, according to their own personality. In terms of functional and dys- functional conflict, the study’s only significant findings relate to the confronting management strategy. As stated, hypothesis 5(a) proposed a negative relationship between the confronting strategy and functional con- flict; hypothesis 5(b) proposed a positive relationship between the con- fronting strategy and dysfunctional conflict. As shown in Tables 1 and 2, the direction of the confronting strategy with functional conflict was posi- tive, which was not as predicted. These findings were significant at the p � 0.01 level. The direction of the confronting strategy with dysfunc- tional conflict was also positive, as predicted and significant at the p � 0.01 level. Therefore the study does not support H5(a) and but does support H5(b).

Functional and Dysfunctional Conflicts and Trust

The sixth and seventh hypotheses proposed an association between func- tional and dysfunctional conflicts and relationship quality in the buyer- seller environment. Trust and satisfaction were the constructs chosen to measure relationship quality. In the proposed model, functional conflict was projected to have a positive association with relationship quality. As indicated in Table 3, the results indicate that the association of functional conflict with both trust and satisfaction was negative, but not significant. Therefore, hypothesis 6 is not supported. The F statistic for the regression model of functional and dysfunctional conflicts with trust was 11.273 and the change in the F value when manifest conflict was added to the model was 20.668; both were significant at the p � 0.001 level. It can be induced, therefore, that the presence of functional and dysfunctional conflicts can be useful in predicting trust in a buyer-seller environment.

Dysfunctional conflict was projected to have a negative association with relationship quality in the proposed model. As shown in Table 4, there was, in fact, a negative association of dysfunctional conflict with both trust and satisfaction, and all associations were significant at the p � 0.01 level. Thus hypothesis 7 is supported. There is a significant, negative asso- ciation between dysfunctional conflict and trust.

The F statistic was 12.620 and the change in the F value when func- tional and dysfunctional conflicts were added to the model was 23.988;

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Table 4. Results of Regression Analysis for Relationship Quality/Satisfaction with Functional and Dysfunctional Conflicts

Unstandardized Coefficient Standardized Coefficient (Beta)

Constant 4.011* —

Collaborating 0.370 0.256**

Compromising 0.3818 0.034

Avoiding �9.076 �0.087

Accommodating 0.126 0.099***

Confronting �0.1 �0.098***

Functional conflict �4.488 �0.044

Dysfunctional conflict �0.344 �0.354*

F model — 12.620*

F change — 23.988*

R2 — 0.250

Adjusted R2 — 0.230

Note: *p � 0.01; **p � 0.05; ***p � 0.1.

Table 3. Results of Regression Analysis for Relationship Quality/Trust with Functional and Dysfunctional Conflicts

Unstandardized Coefficient Standardized Coefficient (Beta)

Constant 4.689 —

Collaborating 0.273 0.199**

Compromising 9.178 �0.086***

Avoiding �0.139 �0.140**

Accommodating 4.750 0.039

Confronting �0.105 �0.108***

Functional conflict �5.763 �0.060

Dysfunctional conflict �0.298 �0.323*

F model — 11.273

F change — 20.668*

R2 — 0.293

Adjusted R2 — 0.293

Note: *p � 0.01; **p � 0.05; ***p � 0.1.

both were significant at the p � .001 level. It can be induced, therefore, that the presence of functional and dysfunctional conflicts is useful in pre- dicting satisfaction in a buyer-seller environment.

Discussion and Managerial Implications

Little research in marketing has hitherto explored the prevalence, nature, and management of conflict between buyer and seller.

The findings of this study are relevant to marketing practitioners and managers, particularly salespeople, sales managers, and purchasing man- agers. First, the most straightforward and obvious finding is that dysfunc- tional conflict is detrimental to relationship quality. As has been indicated, there was significant support for the proposal that dysfunctional conflict has a negative effect on relationship quality. Conversely, functional conflict showed no significant association with either trust or satisfaction. Even though the coefficients of functional conflict were not significant, they were relatively small and negative in direction (� 0.060 with trust and � 0.044 with satisfaction). This might be attributed to the possible negative perception of even functional conflict. Another possible explana- tion for this might be one comparable to measuring customer satisfaction, which is done by measuring the difference between expectation and expe- rience. Functional conflict may be considered an expected behavior from salespeople and experiencing it would have little effect on relationship quality, similar to hygiene factors. Dysfunctional conflict, however, would be an experience falling below expectation and therefore leading to a dete- rioration of relationship quality. Given this fact, senior managers and sales managers need to understand that there are two separate but important factors contributing to conflict between buyers and sellers. These two fac- tors, organizational structure and individual salesperson training, are dis- cussed below. The first factor that affects conflict in a buyer-seller relationship is the underlying structure of the sales organization. These cir- cumstances are assumed to be somewhat fixed or slow to change (Thomas, 1992). The two types of conditions can be classified as structural and atti- tudinal in nature.

Structural antecedents is the term chosen to describe all relationship, organizational, and interorganizational structural conditions that may con- tribute to some level of conflict. One structural cause of conflict is goal divergence. Parties in a buyer-seller relationship, as well as those in an

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intraorganizational or interorganizational relationship, will almost cer- tainly have some differences in the goals they choose to pursue. These dif- fering goals are often used as criteria for decisions (Rosenberg and Stern, 1971), and those decisions can adversely affect achievement of another party’s goals, thus increasing the chance of conflict (Frazier, 1983). Rosenberg and Stern (1971) found that goal incompatibility was a cause of conflict between the manufacturers and distributors of a household durable good. Given this understanding, senior managers should strive to structure their organizations according to the marketing concept. Keeping in mind that because all organizations must meet their goals—both profit and other- wise—these managers must design systems within the organization that encourage and reward a customer orientation. This is not necessarily the old “the customer is always right” attitude, but an attitude of seeking what is best for each customer and educating the customer regarding the best course of action. Some of the most highly examined structural antecedents of conflict are theories of power, sources of power or influence strategies, and balance of power. Many studies have tested these theories, but the most recent (Kim, 2000; Narayandas and Rangan, 2004) have shown that appropriate communication and personal trust can sustain and grow rela- tionships between buyers and sellers, with even the most unbalanced power structure. Although it is not recommended that managers ignore power struc- tures, it is recommended that long-term relationships between buyers and sellers be allowed to develop.

Attitudinal antecedents is the term used to describe the attitudes, predis- positions, outlooks, and reactions of the individuals and organizations involved in a relationship in which there is conflict. Attitudinal antecedents are the second type of organizational antecedent to conflict. One attitudinal source of conflict has to do with the roles played by the relationship members, including organizations or firms involved in an alliance. A role is a set of expected behaviors each member should exhibit (Etgar, 1979). Conflict may occur if conduct or activities transpire that are incongruent with the role expectations (Rosenberg and Stern, 1971; Etgar, 1979), if the relationship participants are not certain of their roles (Etgar, 1979), or if one or more participants are not satisfied with their roles (Frazier, 1983). To minimize this organizational source of conflict, managers should define very clearly the roles, job descriptions, and activi- ties of their salespeople. These definitions should flow from the mission

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and culture of the organization and should be supported from top manage- ment down. If a salesperson knows what his organization’s expectations are, he or she is free to make appropriate decisions in dealing with cus- tomers and have those decisions honored by the organization. This removes another potential cause of dysfunctional conflict: a salesperson or organization going back on its word to a customer.

Other attitudinal antecedents that contribute to conflict are the incen- tive structure, policies, and procedures that govern the behavior of the salesperson (Thomas, 1992). These antecedents may seem more structural than attitudinal, but they communicate the attitude of the organization to the salesperson. A commission-only pay structure may communicate that the firm values the closed sale above customer satisfaction. A prohibi- tive return policy may communicate lack of concern for the customer’s welfare. Managers should be certain that the incentive structure, policies, and procedures all communicate the same message, and that the message is the one that it should be.

The second factor that contributes to conflict in a buyer-seller environ- ment is the actions of the individual salespeople and their customers. The only conflict management strategy that had a significant association with both functional and dysfunctional conflicts in this study was the confronting strat- egy. Further research may be warranted to understand why most of the pro- posed associations between conflict management strategies and functional and dysfunctional conflicts were not supported. There are several possible rationales, which managers should consider in interpreting the results of this study. The first rationale might be that conflict management strategies are not, as proposed, antecedents of manifest conflict. Instead, the strategies may be symptoms of functional or dysfunctional conflict, or evidence of communica- tion styles, which are chosen within the stage of functional and dysfunctional conflicts to exhibit the perceptions of the parties in the incident.

Another rationale may be that managers have a negative perception of con- flict in general. Although functional conflict and dysfunctional conflict were operationalized as two separate constructs, and factor analysis indicated they were perceived as such, managers might view even the “disagreement over con- tent” that characterizes functional conflict as a negative event. This would explain the positive association between confronting and functional conflict. If this were true, it would also seem that the positive communication styles of collaborating and compromising might not necessarily be perceived as being

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associated with even functional conflict. Given these rationales, managers should strive to recruit salespeople who have a cooperative attitude and train salespeople in collaborative communication skills. These recommendations are not new advice, but they continue to be relevant in today’s sales organization.

Study Limitations

The results presented here in general support the basic premises of the research, but several limitations must be noted. First, the salespeople in our sample reported on only one relationship, with one customer. This limited observation is likely to have decreased the amount of variance in our mea- sure of relationship quality and thus may have led to conservative estimates of effects. Second, the design of this research did not allow us to prescribe when it may be appropriate to use collaborative conflict management behavior. Further, although this study did include the salesperson’s percep- tions of the relationship, it would have been fruitful to investigate a dyadic measure of customer-salesperson perceptions of the quality of the relation- ship. Finally, common method variance, due to using the same person and measurement approach for assessing independent and dependent con- structs, might bias the main effect results toward significance; however, it is unlikely to bias the estimates for the moderating effects.

Suggestions for Future Research

There are several areas of future research that could be conducted using the current dataset. First, an identical instrument could be administered to a sample of professional industrial buyers. This change might give some indication of the differences in buyers’ and sellers’ perceptions of conflict management strategies and their effects on relationship quality. Another relevant addition to understanding in the buyer-seller arena might be the effect of sales teams rather than individual salespeople on manifest conflict and relationship quality. Weitz and Bradford (1999) stated that one of the major functions of a salesperson in the partnering era was to serve as a member of a sales team.

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Appendix A

Survey Questions and Scales

Measuring Manifest Conflict (Jehn, 1995)

Use a 1 to 7 scale with 1 anchoring “none,” 4 being “a little,” and 7 anchor- ing “a great deal.”

Affective conflict (dysfunctional):

• How much anger was there between you and the buyer during the course of the negotiation?

• How much personal friction was there between you and the buyer during the course of the negotiation?

• How much of a personality clash was there between you and the buyer during this negotiation?

• How much tension was there between you and the buyer during this negotiation?

Cognitive conflict (functional):

• How many disagreements over different ideas were there between you and the buyer during the negotiation?

• How many differences about the content of the decision were there between you and the buyer during the negotiation?

• How many general differences of opinion were there between you and the buyer during this negotiation?

Measuring Conflict Management Style (Rahim, 1983)

Use a 1 to 7 scale, with 1 being “strongly disagree” and 7 being “strongly agree.”

• I try to investigate an issue with my client to find a solution accept- able to us.

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• I try to integrate my ideas with those of my client to come up with a decision jointly.

• I try to work with my client to find solutions to a problem that satisfy our expectations.

• I exchange accurate information with my client to solve a problem together.

• I try to bring all our concerns out in the open so that the issues can be resolved in the best possible way.

• I collaborate with my client to come up with decisions acceptable to us.

• I try to work with my client for a proper understanding of a problem.

• I attempt to avoid being “put on the spot” and try to keep my conflict with my client to myself.

• I usually avoid open discussion of my differences with my client.

• I try to stay away from disagreement with my client.

• I avoid an encounter with my client.

• I try to keep my disagreements with my client to myself in order to avoid hard feelings.

• I try to avoid unpleasant exchanges with my client.

• I use my influence to get my ideas accepted.

• I use my authority to make a decision in my favor.

• I argue my case with my client to show the merits of my position.

• I use my expertise to make a decision in my favor.

• I sometimes use my power to win a competitive situation.

• I am generally firm in pursuing my side of the issue.

• I generally try to satisfy the needs of my client.

• I usually accommodate the wishes of my client.

• I give in to the wishes of my client.

• I usually allow concessions to my client.

• I often go along with the suggestions of my client.

• I try to find a middle course to resolve an impasse.

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• I usually propose a middle ground for breaking deadlocks.

• I negotiate with my client so that a compromise can be reached.

• I use give-and-take so that a compromise can be made.

Measuring Quality of Relationship: Trust Component (Crosby, Evans, and Cowles, 1990)

Use a 1 to 7 scale, with 1 being “strongly disagree” and 7 being “strongly agree.”

• My buyer can be relied on to keep his or her promises.

• There are times when I find my buyer to be a bit insincere.

• The buyer is trustworthy.

• My buyer and I are in competition; he is trying to buy few products and I am trying to sell a lot.

• My buyer puts the seller’s interest before his or her own.

• Some people, including this buyer, are not above “bending the facts” to create the impression they want.

• This buyer is dishonest.

• I suspect that this buyer has sometimes withheld certain pieces of crit- ical information that might have affected my decision making.

Measuring Quality of Relationship: Satisfaction Component (Crosby, Evans, and Cowles, 1990)

When I think of this buyer and my feelings about him or her, I am:

Satisfied 1 2 3 4 5 6 7 Dissatisfied

Pleased 1 2 3 4 5 6 7 Displeased

Favorable 1 2 3 4 5 6 7 Unfavorable

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Lionel Bobot is professor in negotiation and conflict resolution at NEGOCIA Business School (Paris Chamber of Commerce - CCIP). He holds a post- Ph.D. in negotiation from the Harvard University Program on Negotiation and a Ph.D. in negotiation at ESSEC Business School (France) and Marseille University in 2006. He has five years’ experience at the International Depart- ment of Yoplait and six years in consulting, in particular at Arthur Andersen Paris.

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