American business context. Joe in manufacturing is in conflict with Judy in supply management. Perhaps they made an attempt to resolve their differences. Perhaps not. Either way, the conflict for Joe is serious. He’s way behind schedule.

Joe could go directly to Judy’s boss, Rich. They’ve always worked well together. He declines, however, to go this route. Instead, he goes to his boss, Anne, explaining the problem and requesting that she speak with Rich.

Anne and Rich know each other well from past projects. Their children attend the same high school. Anne gets Joe’s side of the story. Rich gets Judy’s.

The two managers then work out a compromise quickly, after which they call in Joe and Judy to discuss. The two conflict parties listen carefully. They like the compromise, tweak it a bit, accept it. The deal is done. They both get back to work.

Joe in conflict with Judy. Joe up to Anne. Anne over to Rich. Rich down to Judy. Anne back down to Joe. Up, over and down. Another day, another conflict resolved. In an American company.

Questions
Is this brief and simple story representative of the American approach to conflict resolution? If it is, would it work in the German business context? In other words, what is the German approach?

But wait. A second scenario. What happens if they’re working cross-Atlantic? Joe is Joe. Anne is Anne. Both are in Houston. But, Judy is Ingrid. And Rich is Manfred. Both work in Dortmund. How does up, over and down play out?

Joe has little patience with Ingrid. Joe escalates up to Anne. Anne reaches out to Manfred.

Stop! How does Manfred react? Does he engage with Anne? Does he call in Ingrid? Does he allow Anne to speak directly with Ingrid? Would he speak directly with Joe?

What if Anne corresponds with Manfred by email, putting both Joe and Ingrid in cc:?

Questions
How will Manfred react if Anne contacts him? If the German approach to resolving such conflicts is different than the American approach, what will be the consequences in this scenario?

Up, over and down is about just one fundamental difference in how conflict is resolved in the American and in the German business contexts. Stated simply: Americans escalate conflict rather quickly. The next management level gets directly involved. In Germany it is the opposite.

If you work in the USA-Germany business space, this little story should ring a bell. It will be familiar to you. You most likely will have experienced or observed some version of it in your work.

And this difference – escalation – is just one fundamental difference. There are more: How the two business cultures handle a hearing of the conflict parties; which types of evidence are considered; how quickly they attempt to resolve conflict; and finally what is necessary so that the resolution is accepted by both parties, and therefore lasting.

Resolving conflicts within and between organizations is absolutely critical to success. If there are fundamental differences between business cultures, and these are neither known nor understood, overall success is threatened.

Let’s try to estimate that threat to success. Let’s put some numbers on it.

Conflict Not Resolved
You know your organization. Think of a recent major conflict either within the organization or between it and another organization. Or imagine such a conflict. What would be the negative finanical impact – in dollars or in euros – if the conflict goes unresolved?

Resolution Rejected
Another calculation. What would occur if a resolution to the major conflict above was considered by the one side to be unjust, unworkable, or simply bad for the company? Surely they would do everything in their power to have the resolution overturned, to fight it secretly, or to ignore it.

What would any of those scenarios cost the organization?

Productivity
Let’s assume again that the one side considers the resolution to be unjust, unworkable, or simply bad for the company. But they are forced to live with it, and it impacts negatively motivation, productivity, and the willingness to collaborate across the Atlantic.

What would a 5% loss in productivity cost the organization – in dollars or in euros?