Dick Snyder was the head of Simon & Schuster, the giant publishing house. He pushed the company to higher and higher earnings, and in that regard he was extremely successful. However, for years he was unable to keep himself from degrading and humiliating employees. Viacom eventually bought Simon & Schuster, and Frank Biondi, Viacom's CEO, fired Snyder. In explaining to an interviewer why he had done so, he said that Snyder was not a team player. What if Snyder had been able to double S&S's business? Biondi replied that he still would have axed him.

Snyder lacked what author Daniel Goleman terms "emotional intelligence" (EQ)-the power not only to control emotions but also to perceive them. EQ has five dimensions: knowing one's emotions and controlling them, recognizing emotions in others (empathy) and controlling them, and self-motivation. Goleman contends that incompetence as a manager is most likely a lack of EQ rather than IQ. EQ skills are essential in managing conflict. People who lack emotional intelligence, especially empathy or the ability to see life from another person's perspective, are more likely to be causes of conflict rather than managers of conflict.

SOURCES: A. Farnham, "Are You Smart Enough to Keep Your Job?" Fortune, January 15, 1996, 34-48; and D. Goleman, Emotional Intelligence (New York: Bantam Books, 1995).

SCIENTIFIC FOUNDATION

Structured Conflict in Groups Can Have Positive Effects

Many groups experience cognitive conflict as members try to reach solutions to complex problems. Some group decision-making techniques provide a forum for this conflict, while others are more unstructured. In dialectical inquiry, the group is divided into two subgroups that debate each other until both groups agree on a solution. In the consensus method, participants are told to treat conflict as a positive part of decision making and to try to reach consensus rather than to make a hasty decision by voting, flipping coins, or by using other simple techniques. Thus dialectical inquiry is a more structured way of introducing conflict into the decision-making process. In this study it was predicted that dialectical inquiry would strengthen group consensus, increase individuals' commitment to the group's decision, and increase members' satisfaction with the group.

Thirty-eight four-person groups of undergraduate business students participated in the study during their senior-level capstone course. The student groups were asked to work on a case exercise that involved a realistic managerial scenario. Their tasks were to develop solutions to the case. Nineteen of the groups used the consensus method and nineteen used the dialectical inquiry method. Assignments to groups and to decision-making methods were made randomly.

The results supported the hypotheses. Group consensus on the decision, individual acceptance of the decision, and member satisfaction with the group were higher in the dialectical inquiry groups than in the consensus groups. It seems that providing a structured way of introducing conflict in a group can have positive results. Acceptance of solutions, commitment to them, and member satisfaction can contribute to the long-term effectiveness of the group. The downside is that the dialectical inquiry method, because it is more structured, is more complicated and may be met with less enthusiasm by group members.

SOURCE: R. L. Priem, D. A. Harrison, and N. K. Muir, "Structured Conflict and Consensus Outcomes in Group Decision Making," Journal of Management 21 (1995): 691-710.

ORGANIZATIONAL REALITY

Employee-Owners with No Voice Stir Things Up at Kiwi

Kiwi International Airlines was started in 1992 when Robert Iverson and some of his fellow pilots pooled their money following the collapse of Eastern Airlines. Employee ownership was the theme of the venture. Pilots and other highly paid employees had to invest $50,000 and other employees had to invest $5,000. Customer service was great-pilots helped clean the planes, and employees volunteered to work at half pay to help the airline survive the fare wars. The company won top honors in quality surveys.

Kiwi is no longer one big happy family. Robert Iverson, along with several of his top executives, was dismissed and escorted out the door in the "Groundhog Day Massacre." A $24 million loss in 1994 almost led to bankruptcy. Since then, Kiwi has gone through four top executives in a single year. What caused the problems?

Many feel that conflict over employee ownership is the root of the problems. Although the company is 100 percent employee-owned, workers have no voice. Kiwi's founders gave all the decision-making power to seven pilot-directors in a "voting trust." These seven people control virtually everything the airline does. Employees who were forced to invest in the company felt that their investments entitled them to equal say in running the company. Many employees ignored the directives of management. Pilots refused to fly charter trips, and flight attendants refused to make promotional announcements. Meetings at Kiwi dragged on for hours because every "owner" wanted to have a say. Employees gave free tickets to charities without permission. Former CEO Iverson has said, "One of the stupidest things I ever did was call everybody owners . . . an owner is somebody who thinks he can exercise gratuitous control."

Kiwi is starved for capital and is struggling to gain momentum. A new CEO, the fourth in a year, was hired from outside the company. Jerry Murphy intends to instill a new degree of discipline at Kiwi. "I think one needs to recognize that this company is employee-run, but you need to run it as a business . . . I don't care who owns it. A line needs to be drawn." It remains to be seen whether drawing the line will save the airline.

SOURCES: A. Bryant, "One Big Happy Family No Longer," New York Times, March 22, 1995, D1-2; C. Quintanilla, "Kiwi's Pilots are Bailing Out of the Company Cockpit," Wall Street Journal, September 19, 1995, B4-3. Reprinted with permission of The Wall Street Journal, © 1995 Dow Jones & Company. All Rights Reserved.

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