Chapter 15: Conflict Management and Negotiation (CAIIB – Paper 1)

1. Which of the following best defines a conflict in an organization?

• A. A situation where everyone agrees on objectives and methods
• B. A temporary misunderstanding that does not affect work
• C. A situation where two or more parties perceive incompatible goals or interests
• D. A friendly discussion about work allocation

Conflict arises when individuals or groups perceive incompatible goals, scarce resources, or interference from others in achieving objectives.

2. Which of the following is NOT a characteristic of organizational conflict?

• A. It involves at least two parties
• B. It always leads to negative outcomes
• C. It can be based on differing interests or values
• D. It may be functional or dysfunctional

Organizational conflict does not always produce negative outcomes; it can be functional if managed constructively.

3. Which statement correctly describes functional conflict?

• A. Conflict that supports organizational goals and improves performance
• B. Conflict that always leads to employee dissatisfaction
• C. Conflict that results from personal animosity only
• D. Conflict that is unresolved and harmful to the organization

Functional conflict promotes constructive discussion, innovation, and better decision-making within an organization.

4. Which of the following is a key source of conflict in organizations?

• A. Common goals among team members
• B. Clear role definitions
• C. Ample resources available
• D. Differences in values, interests, or objectives

Conflict often arises due to differences in values, goals, interests, or competition for limited resources among employees.

5. Which of the following is TRUE about the characteristics of conflict?

• A. Conflict occurs only between individuals at the same hierarchical level
• B. Conflict is inevitable in organizations and can be managed constructively
• C. Conflict always leads to reduced productivity
• D. Conflict is only based on personal differences, not work-related issues

Conflict is a natural part of organizations; when managed properly, it can lead to innovation, better decisions, and improved relationships.

6. Which of the following is an example of an **interpersonal conflict**?

• A. Disagreement between two departments over resource allocation
• B. Conflict between a company and a supplier
• C. Dispute between two employees over work methods
• D. Competition between two firms in the market

Interpersonal conflict occurs between individual employees due to differences in personality, work style, or opinions.

7. Which type of conflict arises between different groups or departments within an organization?

• A. Intergroup conflict
• B. Intrapersonal conflict
• C. Organizational conflict
• D. Inter-organizational conflict

Intergroup conflict occurs between teams, departments, or groups within the same organization due to differences in goals, resources, or priorities.

8. Which of the following is a common **reason for conflict** in organizations?

• A. Clear communication of roles
• B. Cooperation among team members
• C. Availability of sufficient resources
• D. Competition for limited resources or goals

Conflict often arises due to competition for scarce resources, differing goals, or incompatible interests among employees or teams.

9. Which type of conflict occurs within an individual, often due to contradictory demands or choices?

• A. Intergroup conflict
• B. Intrapersonal conflict
• C. Inter-organizational conflict
• D. Interpersonal conflict

Intrapersonal conflict occurs within an individual when faced with conflicting demands, values, or goals, causing stress or indecision.

10. Which of the following is NOT typically a reason for organizational conflict?

• A. Clear understanding of responsibilities and roles
• B. Differences in goals or priorities
• C. Scarcity of resources
• D. Differences in perception or values

A clear understanding of responsibilities and roles generally prevents conflict, rather than causing it.

11. Which of the following correctly represents the first phase of conflict?

• A. Behavioural phase where actions are taken to resolve conflict
• B. Latent phase where potential for conflict exists but is not yet visible
• C. Perceived phase where parties recognize differences
• D. Felt phase where emotions are expressed

The latent phase is the initial stage of conflict where conditions exist that could lead to conflict, but it has not yet surfaced.

12. In which phase of conflict do parties become aware of the existence of conflict and differences?

• A. Latent phase
• B. Behavioural phase
• C. Perceived phase
• D. Resolution phase

The perceived phase occurs when the parties recognize the conflict and understand the nature of the disagreement.

13. Which phase of conflict involves emotional responses such as tension, anxiety, or hostility?

• A. Latent phase
• B. Perceived phase
• C. Resolution phase
• D. Felt phase

The felt phase is when conflict is experienced emotionally, often leading to stress, frustration, or anxiety.

14. Which of the following is a common **conflict resolution strategy** in organizations?

• A. Avoidance – ignoring all conflicts permanently
• B. Collaboration – working together to find a mutually beneficial solution
• C. Escalation – involving higher authorities immediately
• D. Suppression – forcing one party to accept the other’s view

Collaboration is a conflict resolution strategy where parties work together to find solutions that satisfy all stakeholders.

15. Which conflict resolution style is characterized by one party giving in to satisfy the other?

• A. Collaboration
• B. Compromise
• C. Accommodation
• D. Competition

Accommodation involves one party yielding to the wishes or demands of another to maintain harmony.

16. Which conflict resolution approach involves both parties giving up something to reach an agreement?

• A. Avoidance
• B. Accommodation
• C. Collaboration
• D. Compromise

Compromise involves each party giving up something to reach a mutually acceptable solution.

17. Which of the following BEST describes conflict management?

• A. Ignoring conflict until it resolves itself
• B. The process of identifying and handling conflicts in a constructive manner
• C. Ensuring one party always wins over the other
• D. Eliminating all differences among team members

Conflict management involves proactively addressing disagreements and disputes to minimize negative impact and promote positive outcomes.

18. Which skill is most essential for effective negotiation in conflict resolution?

• A. Technical expertise only
• B. Authority to enforce decisions unilaterally
• C. Communication, active listening, and empathy
• D. Avoidance of all disputes

Effective negotiation requires strong communication skills, active listening, empathy, and the ability to understand the interests of all parties involved.

19. Which of the following negotiation styles focuses on finding a win-win solution?

• A. Collaborative negotiation
• B. Competitive negotiation
• C. Avoidance
• D. Accommodation

Collaborative negotiation seeks mutually beneficial solutions where all parties achieve their core objectives.

20. Which of the following is a key step in conflict negotiation?

• A. Ignoring the other party’s concerns
• B. Imposing a solution without discussion
• C. Waiting for conflict to escalate
• D. Identifying interests, exploring options, and agreeing on solutions

Effective negotiation involves understanding each party’s interests, generating options for mutual gain, and reaching a consensual agreement.

21. Which approach in conflict management emphasizes maintaining relationships while resolving disagreements?

• A. Competitive approach
• B. Integrative approach
• C. Avoidance approach
• D. Accommodation approach

The integrative approach focuses on resolving conflicts in a way that addresses both parties’ interests, preserving and enhancing relationships.

22. Which of the following is NOT a benefit of effective conflict negotiation?

• A. Increased employee turnover due to dissatisfaction
• B. Better decision-making through diverse perspectives
• C. Improved team collaboration
• D. Enhanced organizational performance

Effective conflict negotiation improves collaboration, decision-making, and overall performance; it does not increase turnover.

23. What does BATNA stand for in negotiation?

• A. Best Agreement To Negotiate Again
• B. Basic Agreement to New Approach
• C. Best Alternative to a Negotiated Agreement
• D. Balanced Approach to Negotiation Actions

BATNA is the best alternative course of action if a negotiated agreement cannot be reached; it is a key concept in negotiation strategy.

24. Which negotiation technique focuses on understanding the underlying interests of both parties rather than positions?

• A. Positional bargaining
• B. Interest-based negotiation
• C. Competitive negotiation
• D. Avoidance strategy

Interest-based negotiation focuses on identifying and addressing the actual needs and concerns of both parties to find mutually acceptable solutions.

25. Which of the following is a common mistake during negotiation?

• A. Preparing alternatives before negotiation
• B. Understanding the other party’s interests
• C. Listening actively to the other party
• D. Focusing only on winning rather than mutual benefit

Focusing solely on winning can damage relationships and reduce the chances of reaching a sustainable, mutually beneficial agreement.

26. Which negotiation approach is suitable when a long-term relationship is important?

• A. Competitive negotiation
• B. Collaborative negotiation
• C. Avoidance negotiation
• D. Accommodation negotiation

Collaborative negotiation is appropriate for maintaining long-term relationships, as it seeks mutually beneficial solutions and trust-building.

27. Which of the following strategies can help avoid deadlock in negotiation?

• A. Ignoring the other party’s needs
• B. Insisting on a single solution
• C. Exploring multiple options and alternatives
• D. Delaying discussion indefinitely

Exploring multiple alternatives increases flexibility and improves the likelihood of finding an acceptable solution for all parties.

28. Which of the following is an example of a distributive negotiation approach?

• A. Problem-solving to meet both parties’ interests
• B. Collaborative brainstorming for joint gain
• C. Developing BATNA before negotiation
• D. Claiming the maximum share of a fixed resource

Distributive negotiation focuses on dividing a fixed resource where one party’s gain is another’s loss, also called win-lose negotiation.