Vying for control of Molson Inc
Molson Inc Company was founded in the 1786 by John Molson who was the first owner of the firm. It was a brewing company and remained family owned for several years working together with Adolph Coors Company limited since 1998. The brewing operations of the company was later sold to an Australians fosters group limited in the 1990’s. The sale was made in order to cope with the anticipated competition from U. S. The ownership of the company was passed to John Molson eldest sons, Eric Molson and Ian Molson, while the top management was given to outsiders or his relatives.
Eric Molson held most of the shares and controlled the top operating positions throughout the latter half of the 20th century. He later became the company’s chairman and inherited his father’s position (McCuddy et al, 2004). Eric’s younger brother named Ian later aspired for the chairman’s job. Ian began working in the company at his teenage in the 1970s and later after school joined the Molson board of directors. Using his deal making skills, Ian sold non core business skills and bought back control of Molson’s beer operations.
He was also responsible for the acquisition of a Brazilian brewer which turned out to be a poor decision. Further, he increased his holdings of Molson’s voting stock in the process of the management of the company. (McCuddy et al, 2004) There arose a conflict between Eric and Ian whereby Ian maintained that Eric endangered the company’s future due to his lack of business acumen. He added that Eric’s refusal to work with him had destabilized the company. However Eric’s supporters argued that Ian had destabilized the company through his impatience and aggressiveness.
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This conflict continued and brought a big problem in the company which led to the review of the Molson’s corporate finance. There was the need of good control of the company (McCuddy et al, 2004). Consequences of the conflict The case of Eric and Ian leads to a positive consequence. This is evidenced when they decided to initiate a merger talk of the two companies, the Molson Inc and the Adolph Coors Company. These two companies had been working together since 1998. They came up with a shareholder agreement which prevented either one of them from transferring or selling his voting shares without the consent of the other.
The merger was named as Molson Coors brewing company. The company was expected to make the company the world’s fifth largest brewer and deliver substantial value to shareholders. (McCuddy et al, 2004). It was important for the brothers to come up with a solution for enabling benefits for the company to be achieved. Conflict management was the best management skill which they needed to deal with the problem at hand and this is a major predictor of a managerial success. They had emotional intelligence which relates to the ability to manage conflict.
It is power to control one’s emotions and perceive emotions in others, adapting the change and managing adversity (McCuddy et al, 2004). There are two types of conflict namely functional and dysfunctional conflicts. Functional conflict This is a conflict that encourages new solutions to problems and enhances creativity in the organization. In such a case then managers will always encourage conflicts. Here the key to conflict management is to stimulate functional conflict and prevent or resolve dysfunctional conflicts.
Functional conflict is a healthy, constructive disagreement between two or more people. It can produce new ideas, learning and growth among individuals. When people engage in constructive conflict, they develop a better awareness of themselves and others. It improves working relationships when two parties work through their disagreements which the accomplishment of something is felt. This improves morale by releasing tensions and solving problems by working together. Functional conflict can lead to innovation and positive change for the organization.
This is because creativity is instilled amongst individuals and can be translated into increased productivity. Functional conflict is cognitive in origin in the sense that it arises from someone challenging old policies or thinking of new ways to approach problems (Moody, 1996, pp. 422-423). Dysfunctional conflict The dysfunctional conflict is unhealthy, destructive disagreement between two or more people. Its danger in that it takes the focus away from the work to be done and places the focus on the conflict itself and the parties involved.
Excessive conflict drains energy that could be used more productively. A dysfunctional conflict originates on a situation which is emotional or behavioural. Disagreements that involve personalized anger and resentment directed at specific individuals rather than specific ideas are dysfunctional. Here one acts before thinking and often rely on threats, deception and verbal abuse to communicate. This increases the losses between the parties involved instead of potential gains achieved (Moody, 1996, pp. 422-423). Positive consequences and negative consequences of conflict
Positive consequences lead to new ideas and stimulate creativity. They also motivate change, promote organizational vitality, and help individuals and groups establish their identities as well as serving a safety valve to indicate problems. Negative consequences divert energy from work and threaten psychological well being. The consequence leads to wastage of resources, creation of negative climate, breaking down group cohesion and increases hostility and aggressive behaviours (Moody, 1996, pp. 422-423). Structural and personal factors
Conflicts in organizations arise from different causes and managers need to understand the main sources of conflicts. There are structural and personal factors that led to the conflict between Eric and Ian. Structural factors arise from the way in which work is organized in an organization. Personal factors arise from differences among individuals in an organization (Moody, 1996, pp. 426-427). Structural factors The structural factors that led to the conflict between the two brothers include specialization, interdependence, common resources and authority relationships.
(Moody, 1996, pp. 426-427). Specialization Specialization is when employees become experts at certain tasks. Highly specialized jobs can lead to conflicts because people have little awareness of the tasks of others perform. A classic conflict of specialization may occur between sales people and engineers. Engineers are technical specialists responsible for product design and quality. Sales people are marketing experts and liaison with customers and are often accused of making delivery promises to customers that engineers cannot keep.
This is because the sales force lacks the technical knowledge necessary to develop realistic delivery deadlines. In the case of Eric and Ian, Ian had specialized in his banking career and failed to recognize Eric’s job in the company. Ian started accusing his brother for endangering the company for the lack of his business acumen. He did not recognize the effort Eric had put in the company (Moody, 1996, pp. 426-427). Interdependence Work that is interdependent requires groups or individuals to depend on one another in order to accomplish goals.
Depending on one another to get work done in an organization if fine when the process works smoothly. However, when there is a problem it becomes easy to blame the other party and life escalates. In the case of Eric and Ian, the process of working together did not go smoothly since Ian was impatient and aggressive. Eric’s supporters accused Ian of destabilizing the company because of his impatience and aggressiveness. Eric then refused to work with Ian which made Ian accuse him of destabilizing the company due to his refusal to work with him (Moody, 1996, pp.
426-427). Common resources In all organizations multiple parties have to share resources and there is a potential for conflicts to arise. The potential is even enhanced when the shared resources become scarce. For example, in many organizations there is the sharing of the secretariat support whereby one secretary serves a big number of managers. Every manager believes that his/her work is more important, this puts pressure on the secretary and leads to potential conflicts in prioritizing and scheduling work.
In Molton Inc control case there was a problem with the board to decide on who is to lead the company between Eric and Ian. There was pressure on the board to consider the qualities of each since they were sharing same resources from the company to make it successful. This was because both had a positive view for the company to succeed which finally lead to forming a merger between Molton and Coors. This was a solution to the two brothers since they had a common goal (Moody, 1996, pp. 426-427).
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