Conflict-Compromise Methodology as an Innovative Method of Adopting Managerial Decisions

Abstract:

One of the major managerial tasks is the adoption of managerial decisions in the event that it is known in advance that an optimal solution is impossible, moreover, there is a conflict between several participants in the management process. Such tasks can arise both in strategic and financial management, when it is impossible to achieve an absolute optimum in principle, in this situation one can speak only about quasi-optimal solutions. The purpose of this article is to describe the innovative technology for making managerial decisions based on the conflict-compromise methodology. The theoretical concepts of similarities and differences of the author's vision with the theory of Goldratt constrains are developed in the work, the emergence of contradictions and conflicts in the regional economic system as a consequence of the emergence of managerial dysfunctions is justified. As a method of leveling managerial dysfunctions, a local compromise between conflicting subjects is proposed as the only possible method for making quasi-optimal managerial decisions to achieve a balance of interests of stakeholders. The article is illustrated by two examples of the application of the methodology of conflict-compromise management. The first example is from the regional economy, namely: the causes of conflict and imbalance of economic interests at the micro, mezzo- and mega-levels are shown. The second example is from the insurance area where the contradictions that often lead to conflict arise between the insured and the insurer. In both cases, the conflict-compromise methodology demonstrates its effectiveness for making managerial decisions and smoothing negative situations.

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