"How to Solve Problems in the Workplace" (Mediator Select.com)
The workplace is rife with conflict, yet most business owners don’t take into consideration just how much it costs their businesses. According to Workplace Wisdom. How to Resolve Interpersonal Conflicts in the Workplace: by Liz Kislik, “One large, seminal study estimated that U.S. businesses spend $359 billion annually on a combination of time waste, absenteeism, avoidance, and general disengagement caused by workplace conflict.” (page 3) This number is an insane amount to be spending on conflict-related issues and illustrates just how important it is for companies to find ways to efficiently handle any problems that might come up.
"Starbucks vs. Kraft negociation" (Valentine Jhn)
One example of where a company lost a considerable amount of money due to a conflict was the conflict between Starbucks and Kraft’s coffee. In this conflict, there was a dispute for three years over how Starbucks coffee was distributed in grocery stores. “The company’s agreement with Kraft limited Starbucks to selling pods that worked in Kraft’s Tassimo machines. Starbucks was in danger of being left behind in a race for market share against Green Mountain Coffee’s Keurig system and K-Cup single-serving packs.” (Harvard Law, “Negotiation in Business: Starbucks and Kraft’s Coffee Conflict.”) As Starbucks emerged as the leading coffee company in the world they tried to end their agreement with Kraft but they were denied. Nevertheless, they ended up selling K-Cup packs. They were later sued for $2.75 billion.
"Starbucks vs. Kraft negociation" (Valentine Jhn)
The public actually viewed this amount to have been lucky for Starbucks. Some felt that Starbucks deserved to get an injunction. Many did not see why there was not a mandatory renegotiation of the fee within the contract and felt that Starbucks did not do a good job in foreseeing possible market changes. There were several key things that these two companies could have done differently to avoid this conflict and the eventual suing that followed. The article by Harvard Law addresses some of the things that would have been smart to do. “The business dispute illustrates how fluid marketplace trends can be, which can cause negotiated business agreements to become undesirable over time. In their original agreement, Kraft and Starbucks would have been wise to agree upon set times for renegotiation, during which they would have had leeway to revisit existing deal terms in the face of changed economic and industry conditions.” This conflict resulted from how profitable Starbucks became and how they essentially outgrew working with Kraft. Making a mandatory date for the renegotiating of the terms of their contract such as the fee would have prevented this big of a conflict and might have even been able to solve it altogether eliminating the need for the separation of companies.
"Samsung, Apple Both Guilty of Patent Infringement, South Korea Court Rules" (Industryweek.com
According to another Harvard Law article, another conflict between companies was that between Apple and Samsung. “Back in April 2011, Apple had filed a lawsuit accusing Samsung of copying the “look and feel” of the iPhone when the Korean company created its Galaxy line of phones... Samsung countersued Apple for not paying royalties for using its wireless transmission technology.” Since then the two companies repeatedly have claimed the other to be copying the appearance and function of their phones and tablets. “Given that Samsung is one of Apple’s biggest suppliers, the companies had a strong incentive to move beyond their dispute and build on their ongoing partnership.” They intended to avoid a legal battle but ended up going to court and Apple winning over $400 million.
This conflict ended up costing Samsung quite a bit of money and also put a strain on the relationship that the two companies have with each other. One of the things that could have been done in order to prevent the conflict from reaching this point was to negotiate a solution before taking it to the courts. The article says, “mediation as a dispute resolution technique between business negotiators is far less likely to succeed when the parties are grudging participants than when they are actively engaged in finding a solution.” In order to mediate successfully both parties must be willing to compromise and want to find a solution.
"Conflict mediation: innovative approaches to teaching" (csinfol.it)
One of the things that these two conflicts have in common is that they both ended up taking legal actions instead of dealing with the issue out of court and trying to actively find a solution. Another thing that these conflicts have in common is that in both, companies ended up getting sued for tons of money serving as cautionary tales for other companies in their wake. A difference in these conflicts is that Apple continued to depend on Samsung as their supplier despite the conflict while Starbucks went completely seperate ways with Kraft. Depending on a company that just sued you definitely puts a strain on the relationship and creates a need for further mediation to prevent conflicts in the future.
"The 5 'Cs' Approach to Conflict Resolution in the Workplace" (Entrepreneur.com)
Based on the outcomes of the above conflicts, it is important to remember various things when managing a business or negotiating a contract. One of which based on the Starbucks case is to set a mandatory renegotiation of a contract due to possible market changes that could come up in the future. If either party is unhappy being stuck in a contract this can easily lead to bigger issues and often ends up costing at least one company money they wouldn’t want to be spending. Another thing that is important to keep in mind based on the Apple-Samsung case is to try to actively seek a solution to a problem before going to court. Solving an issue directly and out of court is the best way for both parties to truly get what they want by compromising instead of having the court decide for them. When doing this it is very important to show respect to the other person or party by showing you are listening and demonstrating understanding. Conflicts in the workplace are natural and can actually be beneficial to relationships and an overall better understanding of others. Companies therefore must learn to work on conflicts instead of avoiding them altogether.
"Communication and Negotiation" (Stan Christensen)