Inter-organizational conflicts can be extremely harmful. A study has revealed how Chinese firms manage and reduce their inter-organizational conflict. Ethical leadership plays a vital role in Chinese business culture, and as this study illustrates, it helps them foster more cooperative relationships – and those are the key to less inter-organizational conflict.
In traditional Chinese Confucian culture, an emphasis is placed on the development, maintenance, and exploitation of social networks, which depend on reciprocity, integrity, and the highest individual ethical standards. In China, inter-firm relationships (such as supplier/buyer relationships) cannot be well understood without recognition of this.
The research here suggests that ethical leadership not only affects employee satisfaction and performance within organizations, but also that it influences other external stakeholders’ perceptions and subsequent behaviour.
The research collected data from 81 suppliers and 45 corresponding managers of a large group company in China. The study and results support the contention that ethical leaders play an essential role in managing inter-organizational conflict and facilitating joint initiatives in which the cooperative firms are highly interdependent.
The study found that task interdependence is a key factor of inter-firm relationships, requiring mutual understanding and joint actions from both partners in order to improve the quality of cooperation.
How to Deal with Inter-Organizational Conflict the Chinese Way:
Overall ethical leadership provides a tacit commitment to achieve win–win solutions.
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