CHAPTER 2 LITERATURE REVIEW
2.4. Conflict Management and Dispute Resolution
Over-optimistic forecasts of revenue have led to failure of some economic infrastructure PPPs especially where the financing structure of the SPV was not robust enough to absorb the revenue shortfalls (Roumboutsos and Pantelias 2015).
The public sector comparator (PSC) that is often used in many PPP markets to evaluate a PPP project’s VfM prior to its approval has been criticised as prone to manipulation depending on one’s desired outcome (Iossa and Martimort 2013).
Finally, conflict and dispute are a recurrent issue in infrastructure PPPs (Sinha and Jha 2020).
Most conflicts and disputes on infrastructure PPPs arise from claims that are initiated by one of the SPV’s contractors (Levitt and Eriksson 2016). In some instances, the government has been hesitant to engage with contractors or sub-contractors because they do not have a direct contractual relationship with them (Warsen, Klijn and Koppenjan 2019).
it is neither bad nor good whereas the fundamentalist perspective believes that conflict should be avoided because it is destructive (Rollinson and Broadfield 2002). Fenn, Lowe and Speck (1997) also presented two academic viewpoints on conflicts – one that sees it as a chronic state and recommends that its causes should be identified and treated; and another that ‘takes it for granted’ and seeks to understand it better. The latter was proposed as more plausible.
2.4.2. Concept of conflict management and dispute resolution
Dispute resolution can be defined as involving elimination, termination, and reduction of conflict while conflict management can involve containment, avoidance and resolution of issues (Ury 1999). Hence, some researchers reason that conflict management encompasses both conflict and dispute resolution (Lynch 2001). For this research, however, the term ‘dispute resolution’ was mostly used in order to align the research terminology with what is commonly used in the construction industry. Conflict management has also been used in some instances.
2.4.3. Key conflict theories
There are a number of conflict theories such as the Realist Theory of Conflict (McKenzie and Gabriel 2017), Constructive Controversy theory (Vollmer and Seyr 2013), Mary Parker Follett Model (Giritli, Balci and Sertyesilisik 2014), Hall’s Win-Lose Approach (Vu and Carmichael 2009), and the Dual Concern Theory (Pruitt and Rubin 1986; Rahim 2002).
The Realist Theory of Conflict suggests that intrinsic characteristics of human beings such as selfish interests, aggressiveness and violence are the primary causes of conflict and insecurity (Cozette 2008; Glaser 2010). The theory is divided into three parts – explanatory realism, descriptive realism and prescriptive realism. Explanatory realism asserts the presence of genetic defects in human beings that drive them towards negative behaviour; this makes conflict inevitable (Williams 2007). Williams (2007) adds that descriptive realism views the world as a ring of conflicts while prescriptive realism builds on the viewpoints of explanatory and descriptive realism to suggest that decision makers are morally justified to protect and preserve
their interests using any possible means. The Realist Theory of Conflict has been faulted for elevating inter-party competition and power while neglecting the role of multi-layered interaction between individuals during conflicts (McKenzie and Gabriel 2017).
Hall’s Win-Lose Approach proposes that conflicts can be resolved through concern for personal goals and concern for relationships (Vu and Carmichael 2009). It further suggests that DR is based on losing and winning (Atteya 2012) – a style that is said to promote competition.
Competitive styles are not effective for resolving conflicts (Tjosvold, Wong and Chen 2014).
Also, Hall’s Win-Lose Approach is said to advocate for a common approach to conflict management, and not a behavioural one, despite the latter being considered more suitable for resolving disputes (Vu and Carmichael 2009; Giritli, Balci and Sertyesilisik 2014).
The Mary Parker Follett Model suggests that existence of conflicts is fuelled by differing opinions of the involved parties and that conflict management approaches should utilise these differences (Giritli, Balci and Sertyesilisik 2014). Consequently, they introduce five DR styles (suppression, domination, evasion, integration, and compromise). One of the main shortfalls of the Mary Parker Follett Model is that it does not recognise obliging as a DR approach despite it being known as a standard flexible style for managing conflicts (Al-Sedairy 1994).
Constructive Controversy proposes that effective DR is achieved through open-minded discussions (Mitchell, Parker and Giles 2012). Earlier studies (Isen and Levin 1972; Deutsch 1973; Clark and Mills 1979; Rahim and Bonoma 1979; Pruitt and Rubin 1986; De Dreu, Weingart and Kwon 2000) that sought to understand the nature of relationships that are conducive for open-minded discussions during conflicts pointed to mutual benefit relationships.
Consequently, Tjosvold, Wong and Chen (2014) concluded that Constructive Controversy is founded on the Dual Concern Theory (DCT) given that DCT is premised on mutual benefit relationships.
The concepts and application of DCT are presented in the subsequent section.
2.4.4. DCT and its application
The Dual Concern Theory (DCT) illustrates how the behaviour of people guides the way they manage conflicts (Rahim 2002). It is said to have been founded on the managerial grid developed by Mouton and Blake in 1964 (DeChurch, Hamilton and Haas 2007). It is also said to be an expansion of the Theory of Cooperation and Competition that was invented by Deutsch (1973). Blake and Mouton (1964) suggested that managerial behaviour is influenced by concern for people and concern for production. On this basis, they proposed five interaction styles – withdrawing, forcing, compromising, problem-solving, and smoothing. The managerial grid by Blake and Mouton (1964) has been adopted by many conflict management researchers. The grid was interpreted by Thomas (1976) in their Conflict Mode Instrument to propose that conflict can be managed through assertiveness and cooperativeness. Subsequently, five conflict management styles were introduced i.e. competing, avoiding, collaborating, compromising and accommodating. Pruitt and Rubin (1986) are said to have evolved the concepts of Thomas (1976) to introduce a version of DCT with four DR strategies i.e. problem-solving, contending, inaction and yielding – motivated by concern for their own outcomes and concern for other people’s outcomes. Compromising was not recognised as a distinct conflict management style arguing that it was a ‘lazy form of problem solving’. To date, DCT has had several variations some of which acknowledge compromising as a conflict management style (De Dreu et al.
2001). Of these variations, the most used one for conflict research in the construction sector is by Rahim (2002) – (Lee 2008; Akiner 2014; Gunarathna, Yang and Fernando 2018). This could in part be attributed to the evidence that supports it empirically (Rahim and Magner 1995) and the wide research on which its conceptualisation was based (Rahim and Bonoma 1979; Rahim 1983, 1997, 2001).
Rahim (2002) presented the DCT with five DR styles grounded on two motives: concern for others and concern for self. The DR styles included obliging, integrating, avoiding, dominating, and compromising (Figure 2.2).
Figure 2.2: DR styles according to the Dual Concern Theory (Rahim 2002, p.217)
The “integrating” style involves high concern for others and high concern for self. It is concerned with problem-solving and collaboration through openness and information exchange, examining differences and exploring acceptable solutions to all parties involved in a conflict (Tsai and Chi 2009).
The “obliging” style (also sometimes known as “yielding” or “accommodating”) is characterised by high concern for others and low concern for self (Gunarathna, Yang and Fernando 2018). Obliging parties often exhibit selflessness and obedience to other parties.
Consequently, differences are downplayed and the concerns of more powerful parties or parties to whom the issue at hand is more important are often prioritised (Rahim 2002).
The “dominating” style typically involves low concern for others and high concern for self. It is linked to a controlling win-lose approach that ignores the viewpoints and needs of other parties (Oetzel and Ting-Toomey 2003).
The “avoiding” style (sometimes referred to as “withdrawing” or “ignoring”) applies to situations where parties have low concern for both their own and others’ concerns. Parties normally withdraw from a conflict without addressing the concerns of any of the parties involved (De Dreu et al. 2001). Parties could also show disinterest – sometimes presenting inadequate information to other parties involved in the conflict or dispute (Musenero, Baroudi and Gunawan 2021).
Integrating Obliging
Dominating Avoiding
Compromising
HIGH LOW
HIGH
LOW
CONCERN FOR OTHERS
CONCERN FOR SELF
Finally, the “compromising” style is an intersection between concern for other parties and concern for self with the hope of achieving mutually suitable outcomes for all parties (Holt and DeVore 2005). It could involve parties letting go of a need in order to reach an agreement; it mostly manifests when the demands of the parties in conflict or dispute are mutually exclusive (Cai and Fink 2002).
Rahim (2002) further classified the above DR approaches into distributive and integrative DR dimensions (Figure 2.3).
The integrative DR dimension typifies a problem-solving style which represents one’s concern for others’ and own outcomes while the distributive DR dimension embodies a bargaining approach which is representative of one’s concern for others’ or their own outcome (Rahim 2002). The intersection point of the two dimensions is at “compromising” where parties tend to have intermediate concern for others’ and/or own outcomes.
The distributive dimension (DD) and integrative dimension (ID) can be determined using Equations 2.1 and 2.2 (Tsai and Chi 2009).
Integrative Dimension (ID) = Integrating style – Avoiding style (2.1) Distributive Dimension (DD) = Dominating style – Obliging style (2.2)
Figure 2.3: Integrative and distributive dimensions of DR styles in DCT (Rahim 2002, p.221)
Integrating Obliging
Distributive (Bargaining) Dimension
Integrative (Problem solving) Dimension
Dominating Avoiding
Compromising
HIGH LOW
HIGH
LOW
CONCERN FOR OTHERS
CONCERN FOR SELF
A high ID implies that the tendency for the “integrating” DR style is high while a low ID shows that the tendency for the “avoiding” style is high. In the same way, a high DD signifies a high tendency for “dominating” while a low DD shows a high tendency for “obliging” (Tsai and Chi 2009).
DCT researchers reason that choice of any given DR style is influenced by either directness or cooperation. While directness focusses on the desire of parties to either evade or discuss conflicts and disputes, cooperation looks at individuals’ concern for outcomes that are either personal or mutual (Putnam 2006; Guerrero, Anderson and Afifi 2007). Additionally, DCT assumes that the two main behavioural orientations it proposes (concern for others and concern for self) are not dependent on each other. This is backed by practical evidence that did not present any correlation between them (Butler 1994; Van Lange 1999).
Despite the strengths and versatility of DCT, critics of DCT argue that it does not account for situations where the parties affected by a conflict or dispute seek to deliberately destroy or harm themselves and/or others (Kim and Koo 2020).
DCT has been applied in some conflict studies in several fields including religion (Dunaetz and Greenham 2018), social and organisational psychology (De Dreu et al. 2001; Özkalp, Sungur and Özdemir 2009; Zhang, Chen and Sun 2015), mining (Lee 2008), manufacturing (Lee 2008;
Özkalp, Sungur and Özdemir 2009), banking and aviation (Özkalp, Sungur and Özdemir 2009) as well as construction of non-PPP projects (Yiu and Cheung 2006; Lee 2008; Tsai and Chi 2009; Akiner 2014; Tabassi et al. 2017; Gunarathna, Yang and Fernando 2018). However, it appears that DCT has not been used in DR research for infrastructure PPP projects. Through assessment of the infrastructure PPP dispute and conflict environment, a relationship between DR in infrastructure PPPs and DCT is presented in Section 2.5 of this thesis.