The Role of Conflict Resolution Strategies and Power in the Conflict-Export Performance Relationship

Abstract

The rationale for this study lies in the mixed viewpoints on the conflict and thus its consequences. Traditionally, conflicts have been viewed as negative whereas the interactionist viewpoint perceives conflict as energizing by pointing out problems and unifying a group (Banner, 1995). Thus, the relationship between conflicts and export performance should depend on the type of these conflicts. On one hand, task conflict as perceived or recognized disagreements within groups about the tasks to be performed (Amason, 1996), reflects the positive aspect of conflicts and should motivate managers to actively review the issues and indicate a need for change (Rosenberg, 1974). However, if conflict resolution strategies are not in place to resolve such conflicts, they could escalate into emotional conflict and harm export performance. On the other hand, emotional conflict is defined as perceived or recognized interpersonal incompatibilities within groups that are based on friction and personality clashes (Rose & Shoham, 2004). Here, we observe the negative aspect of conflicts, leading to the resistance to resolve future conflicts and emotional disruptions and the damage created through subjectivity and distorted judgments (Rosenberg, 1974). We believe that the latter is closely connected to partner’s power. High levels of power should encourage the channel member holding them to behave opportunistically and exploit the weaker party through coercive influence strategies (Frazier & Rody, 1991), which in turn impact the (emotional) conflicts and performance. In sum, the research’s intended contribution is to study power and conflict resolution strategies as moderators of the conflict—export performance relationship. Data were gathered by a structured questionnaire among 105 Slovene exporters. We found a positive impact of task conflict on emotional conflict, which reduced export performance relative to the expectations of the owners and representatives on foreign markets, but not relative to the company’s plan for the current year or relative to the previous three years. The relationship between task conflicts and export performance was not supported. Thus, the impact of task conflict on export performance is fully mediated by emotional conflict. The important implication of this study is that task conflict can also be perceived with negative outcomes and not necessarily just improve work processes by abolishing problems that arise, but also hinders the productivity and inflicts possible delays. However, this result also confirms Rose and Shoham’s findings (2004) that international channels of distribution are more prone to negative conflict, because cultural differences decrease the amount of opportunities for interactions to resolve task conflicts. This study takes the discussion a step further, explaining that conflict resolution strategies have an important effect on the relationship between conflicts and performance. We argue that the passive aggressive strategy is more like the active avoiding strategy, which is characterized by low assertiveness and low cooperative integrative style. The reason for these findings may be the long-term orientation of the firms, according to which firms prefer to engage in stable long-term relationships, where any type of aggression and divergence from win-win solutions may harm that relationship. In sum, these results are contributing to the development of the theory on conflict resolution strategies and offer a fresh view on practical implications.