Phelps, Inc Case

Phelps, Inc Case

Several situational factors are brought out in the Phelps, Inc case. One of the factors is increased pressure to increase sale. The new president of the firm is demanding to see increased volume of sales from the head of sales services. Another situational factor is the presence of obstacle in the firm’s credit policies. Phelps credit policy requires customers to fill extensive forms before obtaining credit. The policy has also limited the firms lending capabilities by blocking high risk customers. The third situational factor is the presence of competitors that offer lenient conditions for credit. Phelps competitors offer favorable credit terms and favorable collection rules. This has made extremely difficult for Phelps to compete with these other financial institutions. The final situational factor is that the company’s president has not clearly indicated his position on whether to make the credit policy lenient or reduce the sales targets.

The best conflict management strategy is Phelps case is collaboration. Collaboration strategy involves engaging the party with the conflicting interest at equal terms so as to arrive at a solution that benefits both parties (Beebe & Masterson, 2010). Collaboration strategy demands that the sales manager considers the interest of his group and give equal consideration for the interest of the credit manager’s side. It is clear that the conflict originate because both parties have equally significant but conflicting interest. Philip is responsible for the company’s sales and is under great pressure to increase sales volume. However, in order to achieve higher sales volume, credit policy must be made lenient. On the other hand, Celeste is the credit manager and is, therefore, responsible for managing the institution’s credit risks. Therefore, she would be reluctant to allow the idea of introducing a lenient credit policy. Collaboration strategy would help Celeste and Phillip to identify a middle ground that will result in a win-win situation for everyone (Beebe & Masterson, 2010).

Reference

Masterson J. & Beebe S.  (2010). Communication in Small Groups. USA.  Pearson Allyn & Bacon

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