1 Conflict and Negotiation at HBL:

Conflict and Negotiation at HBL:

Conflict: A process that begins when one party perceives that another party has
negatively affected, or is about to negatively affects some thing that the first party cares
about. There are three views about conflicts; traditional view, human relations view and
Interactionist view.

Traditional view: The belief that all conflict is harmful and must be avoided.
Human Relation view: the belief that conflict is a natural and inevitable outcome
in any group.

Interactionist view: The belief that conflict is not only a positive force in a group
but that it is also an absolute necessity for a group to perform effectively.

MAJOR TYPE OF CONFLICT IN HBL:

Most of the major conflicts in HBL belong to the category of policy driven conflicts. After
privatization of HBL, it had a major change in its structure and policies. This change was
necessary to overcome key problems associated with the structure of the public owed
company such as:

Over-staffing:
HBL before privatization had more than 31000 employees, management and non-
management, they aimed to reduce this number to 27000 employees with the help of its
new policies.

Political Pressure:
Before privatization HBL was highly influenced by the governmental policies as it was
the largest financial institute under government control. The economic policies of the
country were also affecting the bank’s policies. The problem occurred mainly because of
the unstable political situation in Pakistan which was causing the huge fluctuations in
governmental policies resulting in the inconsistency of HBL’s policies which led to the

M. Ismail (L1F07BBAM0001) UNIVERSITY OF CENTRAL PUNJAB

2 MAJOR TYPE OF CONFLICT IN HBL:

inefficient results. The motive of privatization was to make HBL as independent as

possible.

DISPUTE RESOLUTION PROCESS:

Negotiation:
The Senior Vice President of Human Resource Management and Head of disciplinary
department undertake the negotiation process. The representatives of the affected
department approach VP of HR department and put forward their point of view that
usually is against the management. VP uses his experience and expertise to minimize
the conflict and to achieve the BATNA (Best Alternative To a Negotiated Agreement). He
makes the employees agree to most of his demands if not all he drags the employee to
agree on two or three points at least by making employees compromise on most of the
issues. His preference remains that management by any means should not compromise
and if incase he fails to do this he moves to the next phase that is of mediation.

Mediation:
Despite trying hard, when the negotiation process fails HBL goes for the mediation
process, where the role of an effective, neutral mediator comes in who acts as a
communication bridge between the management and the employees. Usually the
mediator is in HBL is a trusted manager popular amongst both employees and
managers HBL’s mediation process can be broadly divided into the following three
stages:
Stage 1: Introduction and establishment of credibility
Stage 2: Steering the negotiation process

M. Ismail (L1F07BBAM0001) UNIVERSITY OF CENTRAL PUNJAB

3 DISPUTE RESOLUTION PROCESS:

Stage 3: Movement towards a final settlement

M. Ismail (L1F07BBAM0001) UNIVERSITY OF CENTRAL PUNJAB