Managing conflict betweenmarketing and other functionswithin charitable organisations

Roger BennettLondon Metropolitan University, London, UK, and

Sharmila SavaniHarrow College, London, UK

Keywords Marketing, Psychological research, Charities

Abstract Extensive research has been undertaken into the proposition that certain organisationalarrangements and working methods (e.g. centralisation, functional specialisation, multi-disciplinaryteamworking and training, organisation-wide reward systems) influence the levels of dysfunctionalconflict in businesses. The present study assessed the relevance of these variables for explaining theexistence of conflict between marketing and other departments within non-profit organisations.Additionally the investigation examined the role of psychological distance (a construct borrowedfrom the international marketing literature) as a possible determinant of conflict. A total of 148marketing managers of large UK charities completed a questionnaire exploring these matters. Itemerged that several of the factors known to mitigate dysfunctional conflict in the commercial worldexerted similar effects in many of the sample charities. Psychological distance was significantlyassociated with both the presence of dysfunctional conflict within a charity and the manners wherebyconflict resulted in adverse organisational consequences.

IntroductionA charitys ability to fulfil its mission depends critically on its fundraisingcapacities, for without a steady stream of income a charity cannot continue tocomplete its philanthropic work. Moreover charities that are heavily involvedin raising public awareness of social issues (child abuse or domestic violencefor example) need to possess excellent advertising and other marketingcommunications competencies in order to put their message across, and musttherefore apply the highest levels of professionalism to the creation andimplementation of their campaigns. It follows that charities have to employ topcalibre people to undertake specialist marketing tasks, and that the marketingfunction should occupy a key organisational role (see Bond, 1996; Cervi, 1996;Bennett and Gabriel, 1998). Examples of the consequences of marketingorientation within charities abound. Numerous charitable organisations nowmerchandise wide ranges of charity branded products not directly connectedwith their philanthropic activities (e.g. credit and retail loyalty cards, insurancepolicies, foreign holidays, confectionery, sun tan lotion, CDs, bank accounts,burglar alarms (see Bennett and Gabriel, 1999)), and non-profit fundraisers areat the forefront of developments in direct and database marketing, in the

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Received August 2002Revised January 2003Accepted July 2003

The Leadership & OrganizationDevelopment JournalVol. 25 No. 2, 2004pp. 180-200q Emerald Group Publishing Limited0143-7739DOI 10.1108/1437730410521840

application of market segmentation software and techniques, and in theprofitable utilisation of emotive advertising imagery (Bennett, 1998; Bennettand Gabriel, 1998). It follows that a key function of the leadership of afundraising charity is the effective integration into the wider organisation of avariety of marketing tasks.

There is evidence to suggest, however, that marketing departments do notalways fit comfortably into organisations motivated primarily by valuesrather than by wealth creation or the phenomenon of power (Lewis et al., 1997,p. 279), and where the main focus is on helping the needy rather than on raisingfunds. Indeed, anti-marketing bias has been observed in a number of the UKsleading charities (see Burnett, 1986; Clutterbuck and Dearlove, 1996; Bennett,1998). Charities have numerous and diverse stakeholders (beneficiaries, donors,volunteers, government agencies, politicians, trustees, programme managers,employees, funding bodies, etc.), some of whom may believe emphatically thata charity should devote virtually all its donor income to purely philanthropicactivities, not to marketing and public relations. Often, individuals join acharitable organisation because of the compatibility of their beliefs with thevalues of the organisation (Catano et al., 2001, p. 257), and competence atmarketing might not be among the characteristics of an organisation that theperson most admires. In particular, volunteers (especially those occupyingleadership positions) have been found to be heavily involved psychologicallywith their organisations (Catano et al., 2001). Such involvement is mainly withthe philanthropic operations of the charity concerned, not with the ways inwhich it presents itself to the outside world.

Hence a marketing department might be seen by detractors as a cost (asopposed to a revenue generating) centre that, through its glossy promotions,expensive advertising and public relations (PR) stunts, drains resources fromcharitable programmes and inhibits the pursuit of philanthropic goals. Furtherobjections to charity marketing could derive from the assumptions that anythinggained by one charity from a successful campaign is necessarily lost by othersand that high-profile promotions create among potential donors feelings thattheir contributions will merely be spent on additional advertising, not onbeneficiaries. The latter conviction might be widely held. OSullivan (1993)reported survey data indicating that 40 per cent of a sample of 1,312 peoplethought that charities wasted money on advertising. It is relevant to note inthis context how the UK press has routinely attacked charities for havingrelatively large fundraising to total expenditure ratios (see Omisakin, 1997;Paton, 2002). Margolis (2001), for instance, noted the furore surrounding the pressexpose of the fact that in 1999 the National Society for the Prevention of Crueltyto Children (NSPCC) spent more on administration and marketing than onhelping children in need. (This pattern of expenditure was in fact fully justifiedbecause the NSPCC is quintessentially an awareness-raising institution that, ipsofacto, spends large amounts on public education campaigns.)

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Clearly, conflict between the marketing function and other areas of acharitys operations can arise. Marketing staff may themselves feel alienated.For example, they might perceive the marketing department to lack status andto be regarded as little more than a cash cow which finances the rest of theorganisation but is not given the resources necessary to perform its dutiessatisfactorily (see Barclay, 1991). A charitys marketing department requiresmoney, information and properly paid personnel, yet it may have to seek thesefrom people who are not sympathetic to marketings role. Hence, intensenegotiations may be needed to secure funds for the proper discharge of themarketing function (see Srivastava et al., 1998), and to prioritise and implementmarketing activities (Hudson, 1995).

Positive and negative interdepartmental conflictPositive aspects of conflictConflict between functions within an organisation, according to Lewis et al. (1997),is inevitable consequent to the boundaries arising within any organisationalstructure and the need for the organisations members to compete for scarceresources. In the words of Appelbaum et al. (1999, p. 62), conflict is a process ofsocial interaction that involves a struggle over claims to resources, power andstatus, beliefs, preferences and desires. Accordingly, Appelbaum et al. (1999, p. 62)continued, conflict is a natural phenomenon in social relations, as natural asharmony. Nevertheless, conflict within organisations can be managed (seeAmason et al., 1995; Menon et al., 1996; Lee, 1998; Darling and Walker, 2001; forreviews of the academic literature on conflict management within organisations),and may have positive as well as negative consequences. Thus conflict can be ahealthy incentive for action and competition when present in some forms anddegrees (Lewis et al., 1997, p. 275). Ideas, beliefs and pre-assumptions arechallenged vigorously (Bagshaw, 1998), innovation and the willingness to considerfresh approaches are encouraged, information exchange and the free and frankexpression of opinions and feelings are stimulated (see Menon et al., 1996).Arguments about how best to complete tasks and/or attain objectives allegedlyfacilitate individual and group learning (Senge, 1990), increase critical vigilanceand self-appraisal (Darling and Walker, 2001, p. 232) and, according to Lee (1998)represent a necessary and inevitable aspect of organisational change. Moreover theconsideration of a wider range of options resulting from helpful conflict arguablyimproves decision-making and generates stronger commitment to chosenstrategies (Amason, 1996; Menon et al., 1996; Lewis et al., 1997).

Dysfunctional conflictOn the other hand, interdepartmental conflict can be dysfunctional andfrustrate initiatives in other departments (Maltz and Kohli, 2000, p. 479).Dysfunctional conflict is said to be emotional in nature and, typically, toinvolve personal disputes (Amason, 1996). Disagreements are seen as personalcriticism; debates as political gamesmanship. Manifestations of

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dysfunctional conflict include interference with another functions work,exaggeration of a persons influence, withholding and/or distorting information(Barclay, 1991), the creation of coalitions to block certain proposals,non-response to requests for information, rigid adherence to procedures, andgenerally apathetic behaviour (Mechanic, 1964; Lewis et al., 1997). Individualreactions to dysfunctional conflict may differ substantially. Some people mightrespond by withdrawing from situations, sulking and becoming resentful.Others may seek to compromise and accommodate (McKenna and Richardson,1995). In extreme cases conflict of this type can result in stress, hostility,dissatisfaction, ill-feelings and greatly reduced co-operation (Pondy, 1967).

In the specific context of non-profits, Lewis et al. (1997, p. 275) observed howdysfunctional conflict could cripple their ability to function in goal setting,staffing, the conduct of meetings, problem-solving and decision-making, theidentification and utilisation of individual skills, and writing submissions forgovernment funding. Dartington (1996, p. 12) concluded that typically theaccountability of the leadership of a non-profit organisation is complex, andhence that criticisms and support are likely to come from any and allquarters. This had the potential to destabilise a charity and generate conflictscapable of destroying its main aims and objectives. As accountability within acharity is so complex, Dartington (1996) continued, the design of anorganisation so as to avoid dysfunctional conflict represented a majorleadership task. It is relevant to note however that a number of studies havefound that leaders of non-profits need not adopt particular approaches toleadership in order to succeed. Thus, for instance, Egri and Hermans (2000)study of the leadership styles of leaders of North American non-profitenvironmentalist organisations concluded that, although the leaders in thesample differed from leaders of for-profit green businesses in relation to theirlevels of emotional maturity, there were few actual differences in leadershipbehaviour. Similarly, a survey of 29 non-profit organisations completed byAdeyemi-Bello (2001) found that effective leadership style did not depend onwhether an organisation was for-profit or not-for-profit. Similar genres ofleadership behaviour were associated with successful outcomes in both sectors.Johnson (1999, p. 21) argued that the competent leadership of UK charitablehospices depended not on charismatic leadership styles, but rather on ashared, clear corporate vision.

Origins of conflicts between departmentsInterdepartmental conflict can arise from, inter alia, differences in aims, values,expectations, intended courses of actions, and ideas about how best to handlesituations (Darling and Walker, 2001). Differences of this nature have beenvariously attributed to dissimilarities in organisational demography (interms of cultural diversity, work relevant expectations, and employeeseducation and technological levels), to the ways in which organisations aredesigned, and to personality factors. Allegedly, demographically dissimilar

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people approach and solve problems in divergent manners (Chatman et al.,1998) and perceive the characteristics of their jobs and organisational rolesdifferently (see Pearson and Chatterjee (1997) for details of relevant literature).Individual demographic dissimilarity has been found to impact on both taskconflict and emotional conflict between departments (see Pearson andChatterjee, 1997; Pelled et al., 2001).

Organisational design involves such matters as the mechanisms wherebyemployees share tasks, the degree of centralisation, extent of formal rules andprocedures, and the intensity of the division of labour (see Barclay, 1991).Inappropriate organisational design can lead to differences in departmentalgoals, communications breakdowns, anxieties emerging from organisationalchange, competition for resources, and unattainable desires for departmentalautonomy (Pondy, 1967). The design of the team structures and procedures thatgovern the ways through which employees work can also affect the level ofconflict (positive or dysfunctional) within an organisation. For example, Erezet al. (2002) found that teams which rotated leadership among their membersexperienced less conflict than teams with appointed leaders. If conflict did arisewithin a team that rotated its leadership, the teams members were more likelyto offer constructive suggestions for change.

The central argumentWhereas all of the above-mentioned issues have been researched extensively inthe context of commercial businesses (for reviews see, for example, Ruekert andWalker, 1987; Barclay, 1991; Amason, 1996; Menon et al., 1996; Maltz andKohli, 2000), they have not (to the very best of the authors knowledge) beeninvestigated in relation to charitable organisations. Yet, a priori, conflictsbetween certain departments within a charity might reasonably be expected tooccur. The aim of the research reported in the present paper was therefore toadd to what is known about both charity management and the antecedents ofinterdepartmental conflict via an empirical study of these matters in thenon-profit sector. In particular, the investigation assessed the influence onconflict of a variable well-known in other areas of marketing research, butwhich has not been fully explored in the context of interdepartmental relations,i.e. psychological distance. The central argument underlying the work wasthat organisational factors have the capacity: to determine whetherdysfunctional interdepartmental conflict exists within a charity; and if itexists, to influence the level of intensity of such conflict.

It is suggested moreover that the forces known to be relevant to these mattersin the commercial sector apply equally to fundraising non-profits. A priori, it isposited that conflicts between marketing and other functions within a charity areto be expected as a matter of course, for the reasons previously outlined. A factornot previously considered by the organisational conflict literature is examined,namely psychological distance. It is hypothesised that the presence of a

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substantial degree of psychological distance leads to dysfunctional conflict andthat thereafter dysfunctional conflict impairs organisational performance.

Development of the hypothesesPsychological distance as a source of interdepartmental conflictThe term psychological (or psychic) distance was coined by researchers inthe field of international marketing to describe differences in language,behaviour and culture that deter business people from wanting to enter certainforeign markets. It is a perceptual state arising from disparities in norms andvalues and which depends, therefore, on experiences and differences in thecultural backgrounds of the people involved in the process of interaction.Psychological distance does not imply dislike (Swift, 1998), but it does makeindividuals feel less at ease with others they perceive to be different. Also thehigher the level of psychological distance the greater the effort required tounderstand and effectively communicate with the other party and hence form aclose working relationship (Conway and Swift, 2000, p. 1391). Psychologicalnearness, conversely, enables managers to notice (and appreciate) subtle yetcritical aspects of other peoples behaviour, hence facilitating learning (Evanset al., 2000).

A number of variables can contribute to the level of psychological distancebetween groups including, according to Fisher et al. (1997) and Swift (1998),differences in education, values and attitudes, ethical and moral positions,status, management style and working practices, decision-making processes,tolerance for risk and, above all, language. Fisher et al. (1997, p. 57) observedhow language is the principal means whereby people access culture andcommunicate. Language misunderstandings can impair communicationtherefore even if the volume of communication is extensive. Marketingprofessionals employed by charities frequently possess business qualificationsand experience (Bond, 1996; Bennett and Gabriel, 1998) and are likely to speakabout revenue surpluses, efficiency and performance. Their world viewmight focus on market orientation, communications techniques andtechnologies, the development of corporate image and identify, etc.Conversely, managers in charge of a charitys operational programmes maycome from a wide range of backgrounds, possess non-business relatedqualifications, and have been attracted to charity work by heavily altruistic aswell as employment motives. Operational programme performance is rarelymeasured in purely financial terms (Hudson, 1995), but rather againstsuccesses achieved in relation to helping and caring.

It is suggested here that a positive connection may exist between thepresence of dysfunctional conflict and the extent to which charity marketingmanagers are psychologically apart from the rest of the organisation. Therationale for such a proposition is that functions that are psychologically closeshould in principle be easier to learn about and understand (see Evans et al.,2000); thus engendering trust, empathy, the formation of mutual

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understandings and appreciation of the other partys work (Swift, 1998). Eachside might be better able to comprehend the value systems and priorities of theother, resulting in common perceptions of reality and uniform approaches toproblems (Barclay, 1991). Accordingly, the first substantive hypothesis testedin the course of the investigation was that:

H1. The greater the degree of psychological distance between marketingand other departments within a charity the more likely thatdysfunctional conflict will occur.

Co-ordinating mechanismsStudies that have examined relationships between marketing and otherfunctions in commercial organisations (see Pinto et al. (1993) for details) haveidentified a number of factors which seemingly affect levels of co-operation.These factors include the presence of co-ordinating mechanisms (e.g. formalrules and procedures), the degree of interfunctional interaction and thesimilarities of the duties undertaken by various departments, physicalproximity of staff from disparate functions, and compensation systems thatreward the attainment of interfunctional (rather than departmental) goals.Barclay (1991) noted how the existence within an organisation of competitivereward systems might encourage employees to relate more to their functionalspecialisms than to the attainment of superordinate goals. If people are paidsubstantially on the basis of the achievement of organisation-wide rather thanfunctional objectives then, arguably, dysfunctional interdepartmental conflictswill be less likely because managers have material incentives to co-operate andinteract harmoniously with their colleagues (see Fisher et al. (1997, p. 57) fordetails of relevant literature concerning this matter).

Co-ordinating mechanisms have been investigated extensively. Pondy (1967,p. 299) for example noted how, by the 1960s, there existed a substantial body ofevidence recognising the desirability of institutionalisation, programming andmaking routine of procedures for dealing with recurrent conflict.Bureaucratic rules and procedures offer a convenient mechanism forintegrating or co-ordinating activities, particularly those that cut acrossdepartmental boundaries (Pinto et al., 1993). They make relationshipspredictable, reduce the need for arbitrary decisions and clearly delineatedepartmental responsibilities. On the other hand, they could rob people of theirautonomy and cause frustration that leads to aggressive behaviour towardsother departments. Likewise, specialisation allegedly carries the potential toremove sources of disagreement through stipulating who does what and how(Amason, 1996; Menon et al., 1996). Typically, staff working in a specialiseddepartmental structure will report to a single functional manager and willbecome trained, experienced and competent in a particular functional area.This competence may be recognised and valued by people in other departments(Mechanic, 1964; Pinto et al., 1993). Specialised organisation systems arelogical, easy to understand, and have transparent chains of command that

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clearly define personal obligations and departmental activities. Thus,interdepartmental conflicts may be less likely to arise in these conditions. Onthe other hand, specialisation might stimulate conflict by encouragingdepartments to develop their own objectives, values and working methods andnot to communicate with others (Barclay, 1991). Managers could becomeinflexible and believe that their own function is more important than others(Bennett, 1991), and conflicts of interest between specialised departments mightemerge (Stoner and Wankel, 1986). For research purposes, however, the currentpaper follows the greater part of the previous academic literature in the field(see Maltz and Kohli (2000) for details) in proposing that the impact ofspecialisation on conflict should be beneficial.

The centralisation of authority within an organisation might also reduceconflict. Centralisation means that senior management takes all the mostimportant decisions. Departments do not determine the problems they are toaddress, nor the methods to be used to overcome them. Employees are bound byfixed decision making protocols and exercise little discretion in the course of theirwork. There is no question of decentralised units competing against each otherfor resources or to undertake similar tasks (Bennett, 1991). The activities of allsections can be related to the objectives of the organisation as a whole. Inprinciple, therefore, fewer opportunities for conflict should arise (Bagshaw, 1998).

The above mentioned considerations imply:

H2. The closer the physical proximity of the staff in marketing and otherdepartments the less likely that dysfunctional conflict will occur.

H3. The greater the degree to which compensation systems reward theachievement of organisational rather than departmental goals the lesslikely that dysfunctional conflict will occur.

H4. The presence of co-ordinating mechanisms involving: (a) largenumbers of bureaucratic rules and procedures; (b) high levels ofspecialisation; and (c) the centralisation of authority, will reduce theoccurrence of dysfunctional conflict.

Training and teamworkOther integrating factors that have been substantially researched aremultifunctional training and multidisciplinary teamworking (see Amason,1996; Maltz and Kohli, 2000; Mollenkopf et al., 2000). Multifunctional training issaid to help managers to understand the:

. jargon of other functions (thus reducing language barriers betweenspecialisations); and

. aims, priorities and perspectives of other departments.

Similar outcomes allegedly emerge from having people work incross-functional teams. A substantial literature supports the proposition thatgroups take decisions more effectively when composed of individuals

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possessing a variety of skills, knowledge bases, abilities, points of view andattitudes (see Amason, 1996). Team members interact (socially as well asformally) and gain experience of other functions that facilitates learning andunderstanding (Swift, 1998).

Ruekert and Walker (1987) suggested that a further benefit ofcross-functional teamworking was its encouragement of managers to focuson organisation-wide superordinate goals rather than functional targets. Asuperordinate goal, according to Pinto et al. (1993) is one that is urgent andcompelling for all the groups in an organisation but which requires the effortsand resources of all the organisations groups for its attainment. A high level ofidentification with the superordinate goals of the wider organisationsupposedly motivates interaction between functions (Ruekert and Walker,1987). Additionally it might strengthen the impacts of various managerialdevices introduced to minimise dysfunctional conflict (Fisher et al., 1997).These comments suggest:

H5. The greater the amounts of: (a) multifunctional training; (b)cross-functional teamworking; and (c) communication andinformation sharing within a charity the less likely thatdysfunctional conflict will occur.

The investigationThe above-mentioned matters were examined in the charity context through asurvey of the views of charity marketing managers. Although it would havebeen desirable to compare the responses of marketing managers with those ofcharity employees responsible for specific charity operational programmes,this was not feasible in the context of the present study in consequence of thediverse range of the activities in which the sample charities were involved.There is no generic job title of field operations manager within charities.Rather, the humanitarian and/or philanthropic tasks undertaken by eachcharity are unique to that organisation and the job titles within the charity willreflect those particular duties. Third World assistance charities, for instance,have managers in charge of disaster relief and food distribution; whereashealth care charities have people responsible for providing medical facilities.Animal charities build veterinary hospitals and rehoming units, employ policeliaison inspectorates, and so on. Hence, it was not possible to mail thequestionnaire to a single meaningful job title reflecting the operationalcharitable programmes of all the sample organisations.

The questionnaireA questionnaire was developed to explore relevant issues and pre-tested viadiscussions with 18 senior employees within three leading UK charities plus aninitial mailing to 75 charities drawn at random from the sampling frame (seebelow for further details). This pre-test facilitated the refinement of the wordingsof the questions and the removal of excessively overlapping items. The

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document itself opened with a general section querying the respondentsbackground (business, helping and caring or other), the persons experience andqualifications), the charity sector involved, the number of years the charity hadoperated a marketing department, and the size of the charity. Thereafter thequestionnaire (which is summarised in the Appendix) contained sectionsconcerning organisation design, communication and information sharing amongdepartments, compensation and training systems, perceptions of psychologicaldistance between marketing and other functions, and the possible presence andconsequences of dysfunctional conflict. A new inventory was developed to assessinterdepartmental psychological distance. The other constructs were measuredusing instruments adapted from pre-existing literature in the organisationalconflict area.

Items concerning organisational design were based on those employed byMcCabe (1987) and Barclay (1991) in earlier studies (see Appendix, Section A).The extent of cross-functional teamworking was explored via items modifiedfrom Bennett and Koudelova (2002) (Appendix, items A8 and A9); the degree ofcommunication and information sharing was examined through items adaptedfrom Ruekert and Walker (1987) and Fisher et al. (1997) (Appendix, items A15and A16). Items based on instruments previously used by Fisher et al. (1997),Maltz and Kohli (2000) and Bennett (2002) investigated the charitys employeecompensation systems (Appendix, items A13 and A14) and whether it engagedin multifunctional training (Appendix, items A10, A11 and A12). The presence ofdysfunctional conflict was assessed by items modified from Ruekert and Walker(1987), Barclay (1991), and Maltz and Kohli (2000) (Appendix, section C).

An inventory to measure psychological distance[1] was developed inaccordance with the procedures recommended by Churchill (1979).Accordingly, an initial pool of 12 items was generated from the applicationsof the construct reported in the previously mentioned empirical literature in thefield of international marketing. The 12 items were discussed with two seniormarketing managers, two finance directors and two operational programmemanagers in each of three charities, and were circulated for comment via e-mailto a marketing manager and a programme manager in each of six furthercharities with which the authors had a direct relationship. Each interviewee ore-mail respondent was presented with a definition of the psychological distanceconstruct and required to assess the 12 items on scales of one to five in terms oftheir appropriateness and clarity vis-a`-vis the measurement of the construct.Only those items scoring four or five were retained. Open-ended commentsabout each item were also invited. Subsequent to the feedback received, certainitems were combined, reworded or deleted, resulting in the eight-item inventoryshown in the Appendix, section B. All the items in the questionnaire other thanfactual queries were measured on five-point scales: 5 strongly agree,1 strongly disagree.

The questionnaire together with a covering letter and stamped addressed replyenvelope, was mailed to the heads of marketing of the UKs top 500 fundraising

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charities listed (by order of annual income) in the Charity Commission register(www.charity-commission.gov.uk). After a follow-up, 148 replies were received(29 per cent of the sampling frame). The replies of the first 30 and the last 30respondents were compared, no meaningful differences emerging.

Analysis of the dataAn earlier section developed five hypotheses concerning the central propositionthat organisational considerations influence the presence of dysfunctionalinterdepartmental conflict within a charity. To test these hypotheses it wasnecessary to create from the questionnaire items (see the Appendix) a handfulof composite variables (each reflecting a particular construct relevant to one ormore of the hypotheses covered by the investigation) that could be manipulatedin an orderly manner. This was done by factor analysing each of the groups ofitems listed in the Appendix that contained four or more items, and examiningthe correlations within the item groupings with just two or three items.Consequently it was possible to form composite variables (i.e. averages of allthe items belonging to a specific group) for the following: psychologicaldistance, presence of dysfunctional conflict, adverse consequences ofdysfunctional conflict, centralisation, specialisation, degree of bureaucracy,multifunctional training, interdepartmental communication, teamworking, andthe existence of collective reward systems. (Details of the procedures employedare provided in [2], which also explains how the absence of common methodbias (i.e. problems possibly arising from the fact that the same person in eachcharity had answered all the questions) was confirmed.)

The sample charitiesThe charities in the sample had a median of 101 full-time and 61 part-timeemployees. Hence it is reasonable to suppose that issues concerningorganisational design, departmental structure and interfunctionalcommunications were of major concern to the managements of theseorganisations. A total 87 per cent of the charities had operated a dedicatedmarketing department or section for more than 15 years. Thus marketingactivities would be well-entrenched within the sample charities, themanagements of which would have extensive experience of overseeingrelationships between marketing and other functions. A total of 58 per cent ofthe respondents had marketing backgrounds, 18 per cent described their priorexperience as being mainly concerned with their charitys philanthropicoperations. The sample covered a wide range of types of charity (healthcare,animal welfare, disaster relief, etc.) with no single sector predominating. Therewere no differences in response patterns between people with marketingbackgrounds and other backgrounds, or with respect to:

. the individuals level of education (i.e. his or her highest qualification onleaving school or college);

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. charity age or size; or

. how long the organisation had operated a marketing department.

A total of 27 of the 148 charities (18 per cent) fell in the top two responsecategories of the dysfunctional conflict composite; 67 (45 per cent) were in thebottom two categories. This broadly matched the numbers in the top two andbottom two categories of the adverse consequences composite. Of therespondents, 52 (35 per cent) reported the presence of substantial psychologicaldistance between the marketing function and the rest of the organisation (in thesense that their composited responses fell in the agree or strongly agreecategories of the amalgamated psychological distance scale). A total of 38 percent of the composited responses were in the disagree or strongly disagreecategories. Clearly, there existed within the sample organisations a fair spreadof circumstances pertaining to the topics under investigation. Specifically, thepresence of psychological distance and dysfunctional conflict was a fact of lifefor a substantial number of the charities in the sample.

Tests of the hypothesesThe hypotheses were tested via a regression analysis that used the presence ofdysfunctional conflict, psychological distance, and the adverse consequences ofconflict as the variables to be explained. Significant relationships among thevariables were identified through an experimental procedure whereby all thecandidate independent variables were entered in regression equations invarious combinations. An independent variable was removed if it failed toattain significance at the 0.05 level in any configuration of independentvariables. Then the composites for the presence of dysfunctional conflict andthe adverse consequences of conflict were correlated, the result (R 0:56,p , 0:001) indicating that it was indeed the case that interdepartmental conflictwithin a charity was associated with inferior performance (in terms of the itemslisted in Appendix, section C2).

The data were also examined for the possible presence of moderatinginfluences among the variables. A moderating variable is one that affects thestrength of the relationship between two other variables, hence producing aninteraction effect[3]. Accordingly, an independent variable that is moderated byanother variable will exert a high or low impact on the dependent variableaccording to the value of the third (moderating) variable. Tests for interactioneffects suggested the existence of two moderating variables. Psychologicaldistance was found to moderate downwards the influence of specialisation on theavoidance of conflict. This means that specialisation within a charity did in factlead to an overall reduction in the level of dysfunctional conflict, but that themagnitude of the reduction in the degree of conflict was lower in organisationsthat also exhibited a high degree of psychological distance between departments.In other words, the presence of psychological distance dampened the beneficialeffects of a specialised organisation structure. Similarly, centralisation appeared

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to moderate the link between the presence of dysfunctional conflict and itsadverse consequences. Respondents who reported high levels of dysfunctionalconflict in organisations that were highly centralised stated on average that theircharities experienced relatively fewer adverse consequences. Thus, thedetrimental impact of dysfunctional conflict on operational difficulties such asthe absence of co-operation, lack of trust between departments, resentment andlack of understanding, etc. (see Appendix, section C2), was lower in charities thatwere highly centralised. It seems that centralised organisation systems couldbetter accommodate and overcome some of the organisational difficulties arisingfrom the existence of dysfunctional conflict.

Consequent to the identification of significant relationships among thevariables using the experimental procedure previously described, the final modelemerging from the data analysis was estimated via the structural equationmodelling facility of the AMOS 4 package. (The degree of communication andinformation sharing between marketing and other departments was highlycorrelated with cross-functional teamworking (R 0:66) and withmultifunctional training (R 0:54) and thus was not used as a separateregressor.) The results are listed in Table I and are illustrated diagrammaticallyin Figure 1. It can be seen from Table I that several of the variables posited toexert an influence on the levels of dysfunctional conflict within commercialorganisations by the academic literature in the field (e.g. Pondy, 1967; Ruekertand Walker, 1987; Barclay, 1991; Amason, 1996; Menon et al., 1996; Maltz andKohli, 2000) had a significant impact on the occurrence of dysfunctional conflictwithin the sample charities. Accordingly, the central proposition of theinvestigation (i.e. that organisational factors have the potential to contribute tothe presence of dysfunctional conflict within charities) is substantiated so far asthis particular sample is concerned.

Beta coefficient Critical ratio

Adverse consequences of conflictPresence of dysfunctional conflict 0.401 3.667Presence of dysfunctional conflict times by

centralisationa 21.121 3.004Presence of psychological distanceCentralisation 0.386 3.904Presence of dysfunctional conflictCross-functional teamwork 20.212 2.133Multifunctional training 20.169 2.007Specialisation 20.116 1.999Presence of psychological distance 0.547 4.333Specialisation times by the presence of

psychological distancea 1.024 2.309

Note: a Moderating variables were mean centred to avoid problems of multicollinearityTable I.Parameter estimates

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Table I shows that specialisation within a charity significantly reduced thelevel of dysfunctional conflict experienced. Within a specialised structure,individuals concentrate on completing just a part of an organisations workrather than being concerned with the organisations activities as a whole. Thiscompartmentalisation of duties presumably enables people to avoid getting ineach others way and hence to side step many potentially conflict-riddensituations. The diversity of skills that employees possess in a specialised set upmight be mutually recognised by everyone concerned. Cross-functionalteamworking and multifunctional training also exerted negative influences onthe emergence of dysfunctional conflict (see Table I). Activities of this natureautomatically bring people together and can help create common perspectiveson problems and how they might be resolved. Intergroup relations are likely toimprove in consequence of the enhanced familiarity with the work of otherdepartments that these integrating mechanisms generate.

However, organisation-wide reward systems and the existence ofnumerous rules and procedures were not significant. Arguably,bureaucracy (in the sense of having to follow rigid rules) inhibitscreativity and free thinking within organisations. This might impactpredominantly on a persons relationship with the entire organisation asopposed to the individuals dealings with other departments. Group rewardsystems failed to affect the presence of dysfunctional conflict, possiblybecause the co-operation between departments anticipated on a priorigrounds from joint bonuses might have been counterbalanced by frictionsarising from the realisation that money would be lost if employees in otherdepartments were to underperform.

The existence of psychological distance (though not physical distance)between marketing and other departments was heavily associated with thepresence of dysfunctional conflict, confirming the critical role of thispreviously under-researched (in the organisational leadership context)variable. Psychological distance also affected the strength of the impact of

Figure 1.Significant pathways

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specialisation on the degree of dysfunctional conflict within an organisation.Centralisation did not mitigate dysfunctional conflict directly (the regressionparameter was only significant at the 0.1 level), but it did act as a moderatorin that it helped prevent the transmission of the presence of dysfunctionalconflict into adverse consequences. The greater the degree of centralisation,the higher the likelihood of psychological distance occurring betweendepartments. (There was no evidence of multicollinearity among theindependent variables explaining the presence of dysfunctional conflict[4].)Presumably there was relatively little contact between departments in highlycentralised systems, where all substantial decisions would be taken by peopleat the apex of a structure. Arguably there is less need for the sharing ofinformation, interdepartmental interaction and co-ordination in thesecircumstances.

ConclusionThe first hypothesis of the present paper, i.e. that the existence of substantialpsychological distance between the marketing department and the remainderof a charitable organisation has the potential to aggravate dysfunctionalconflict within that organisation, is supported by the outcomes to theinvestigation. Moreover, psychological distance moderated downwards thecapacity of a highly specialised organisation system to prevent the emergenceof dysfunctional conflict. These are disturbing outcomes, which suggeststrongly that the leadership of a non-profit organisation needs to pay a greatdeal of attention to the application of measures that will minimise the extent ofthe psychological distance between departments. What exactly these measuresshould involve is a matter for further research, although the literature in otherfields offers a couple of suggestions. Thus, for example, differences in personalnorms and values among people in various departments might be addressedthrough internal programmes for disseminating information about the roles,activities and (importantly) the values of the contributions of specificoperational functions. Short-term secondments and interdepartmental plannedwork experience assignments could also facilitate a sense of psychologicalnearness between sections.

H2 and H3 concerning the possible beneficial influences of close physicalproximity of marketing to other employees and of widely based compensationsystems, are rejected so far as this particular sample is concerned. Perceptionsof nearness to the work of other departments appear to have subsisted more atthe mental than the physical level. Physical closeness to the office spaceoccupied by people from a different function did not emerge as a significantconsideration. Likewise there was no evidence to support H4(a), thatbureaucratic rules and procedures help an organisation avoid dysfunctionalconflict. H4(b), conversely, is accepted: specialisation seemingly provided acharity with clear departmental boundaries, roles and duties that mitigated thedevelopment of dysfunctional conflict. It was not the case that people in

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specialised organisational structures failed to communicate or work effectivelywith others (see Barclay, 1991).

When dysfunctional conflict occurred it did indeed result in damagingconsequences. Hence the withholding of information, negative interference withthe activities of other sections, blocking other departments proposals, etc. (seeAppendix, section C, item 1) were not only annoying; but actually led to lack oftrust and co-operation, resentment, dissatisfaction, and so on (Appendix, sectionC, item 2). Thus the effects of the behaviour described in Appendix, section C, item1 were concrete and generally harmful to the organisation. The centralisation ofauthority and decision making within a charity was associated with lower levelsof conversion of dysfunctional conflict into adverse consequences. As anintegrating mechanism, however, centralisation did not of itself appear to preventdysfunctional conflict. Moreover, highly centralised charities were more prone toexhibit psychological distance between departments. Conversely, all three of theelements of hypothesis five are accepted, confirming the outcomes to priorresearch in the field. Accordingly, dysfunctional conflict between marketing andother functions within a charity is apparently less likely in organisations whereinthere is extensive cross-functional teamworking, much socialisation acrossdepartments, free and easy interdepartmental communications, andcross-functional training. In these as in other areas, organisational factorsplayed a key role in determining the extents and natures of operational problemsrelating to conflict.

Further research is needed into the non-significance of the numerous rulesand procedures variable, as this was the only organisation design factorproposed by the previous academic literature on the subject which failed toexert any sort of impact. Additional research would also be useful into therelations between charities marketing departments and specific operationalprogrammes. What, for example, are the qualities of a marketing executivethat are most admired by charity programme managers? What are the majorfactors that facilitate social bonding between marketing and other staff?What are the roles of programme managers in the process of marketingcampaign planning? Case studies of individual charities with a view toexploring in detail the characteristics of interfunctional relationships wouldbe extremely valuable. Equally useful would be a study of the antecedentsand consequences of beneficial as opposed to dysfunctional conflict innon-profit organisations.

Notes

1. The term psychological distance was employed by Fisher et al. (1997) in the course of theirexamination of the effectiveness of communications between marketing managers andengineers. Fisher et als definition of the meaning of the phrase differed radically from thatemployed in the present study however in that Fisher et al. (1997, p. 67) restricted theconstruct to decision-making time horizons, tolerance for risk and the degree of focus ontechnology.

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2. The eight psychological distance items were factor analysed (using the facility available onSPSS 11) and the resulting factor structure confirmed via the AMOS 4 package. A single factorseven item solution emerged l 5:1, a 0:86), with Appendix, section B (h) (i.e. differentapproaches to management and decision-making) as an outlier that failed to load significantlyon the significant factor. Hence item B (h) was deleted from the inventory. The seven remainingitems were composited into a single psychological distance scale. Factor analyses of the itemsfor dysfunctional conflict (Appendix, section C, item 1) and its consequences (Appendix,section C, item 2) similarly generated univariate solutions l 4:3, a 0:79 for the formerconstruct, l 5:1, a 0:81 for the latter). Accordingly, single scales were created for each setof items. The pairs and threesomes of items relating to each of the various dimensions ofsection A of the Appendix were significantly correlated (R .0.45 in all cases). Henceamalgamated scales were created to reflect each variable (the existence of rules and procedures(A1), centralisation (A3, A4, A5), etc.). As the measures used in the study were based onself-reported data it was necessary to test for the possibility of common method variance, i.e.the inflation or suppression of the magnitudes of the relationships under investigationconsequent to the fact that both the dependent variables and the independent variables wereobtained from the same source (Feldman and Lynch, 1988). As is conventional, the issue wasaddressed via a joint factor analysis of all the variables employed in the study and anexamination of standard deviations and correlations among variables not theoretically relatedto each other (Lindell and Whitney, 2001). For the joint factor analysis, the two items withineach construct that displayed the highest factor loadings when the relevant construct had beenanalysed separately (see above), or which correlated most strongly with other items in the caseof a three-item construct, were employed in a 20-item exploratory analysis. (This reduction inthe number of items was necessary because of limited sample size.) An eight-factor solutionemerged corresponding to a priori expectations (each factor having an eigenvalue greater thanunity), and no one factor explaining more than a quarter of the total variation in the data. Theanalysis was then repeated using (where appropriate) two different items to reflect theconstruct in question. This did not lead to any substantial changes in the pattern of the results.The standard deviations of the variables indicated a wide range of response, and correlationsamong variables not theoretically connected were insignificant. Hence there was no evidence tosuggest that the results were affected by common method variance.

3. If Y a bX , where b c dZ ; then Y a cX dZX. Hence the statisticalsignificance the parameter d on the variable Z times X would indicate that the strength ofthe impact of X on Y is moderated by the value of variable Z.

4. Multicollinearity among regressors causes the standard errors on regression coefficients tobe biased downwards. The regression outputs were checked for harmful multicollinearityusing the variance inflation index facility available on SPSS 11. In all cases the hypothesisthat the standard errors were unbiased could be accepted at 0.05 level.

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Appendix. The questionnaireA. Organisational factors

(1) This charity has very many formal rules and procedures that have to be followed whenmaking decisions.

(2) Senior management is very strict with regard to following written rules and proceduresthroughout the marketing process.

(3) Decision making in this firm is very centralised.

(4) Decisions made by the marketing department are subject to extensive review by seniormanagement prior to approval.

(5) Members of the marketing department rarely have the authority to exercise their ownjudgement in relation to the charitys fundraising activities.

Specialisation/multi-functional activities

(6) There are many specialist departments and sections in this charity.

(7) Employees tend not to be involved in many duties or functions outside their ownnarrow specialism.

(8) Members of the marketing department serve on many cross-functional teams.

(9) People from many other functions participate in teams set up to undertake marketingtasks.

(10) Employees frequently participate in training programmes that acquaint them withareas outside their own specific function.

(11) People in this charity are trained to do more than one job.

(12) Training and experience in more than one functional area are considered essential foradvancement in this charity.

Reward systems

(13) Bonuses linked to the overall performance of the charity as a whole are an importantcomponent of an employees remuneration in this organisation.

(14) If people in one department under-perform, other departments will be made to suffer

financially.

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Communication and information sharing

(15) Communications between marketing and other departments are free and easy.

(16) Managers of different functions routinely and extensively share information.

(17) The marketing department is physically a long way away from other sections (e.g.

occupying its own separate offices).

(18) People in the marketing department communicate extensively with people in other

departments.

B. Psychological distance. Compared to employees in the rest of the organisation, people in themarketing department tend to:

(a) Speak a different language.

(b) Have a different World view.

(c) Have different norms and values.

(d) Have different motives for choosing to work for a charity.

(e) Have different educational backgrounds and/or work experience.

(f) Hold different ethical and moral positions.

(g) Have a different culture.

(h) Adopt different approaches to management and decision making.

C. Dysfunctional conflict(1) People in other departments frequently behave in the following ways towards the

marketing department:

(a) they block our proposals;

(b) they withhold or distort information;

(c) they see disagreements as personal criticism;

(d) they interfere with our work in negative ways;

(e) they fail to respond to requests for information;

(f) they frustrate our initiatives.

Consequences of dysfunctional conflict

(2) Our relationships with other departments may be described as involving:

(a) little co-operation;

(b) many resentments;

(c) little mutual understanding;

(d) much dissatisfaction;

(e) feelings of being ill at ease when dealing with other departments;

(f) little appreciation of the importance of our work;

(g) lack of trust.

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