NewTel is a telephone company with a policy of filling positions through promotions rather than hiring from outside.Until recently, the company had a strong engineering focus and tended to promote people into senior executive positions from the engineering areas.Consequently, almost all of the company's 14 senior executives joined the company over 20 years ago in junior engineering positions.There is increasing pressure on NewTel to become more marketing and service oriented.This resulted in four people being hired last year from consumer products and retail firms to fill new senior executive positions in marketing and service management.The external hires were necessary because current employees were not sufficiently qualified.Now there are signs of tension among senior executives, particularly during budget deliberations where there is limited discretionary spending on new corporate activities.The four new hires have been frustrated in their attempts to have the company put more money into marketing and customer services instead of technology investment.Explain why conflict has occurred among the senior executives at NewTel.

This incident is an example of conflict due to differentiation.The newly hired senior managers have significantly different backgrounds, training and experiences than the current senior managers.The new hires apparently do not have any training in engineering, they have not worked in the telephone industry and they have a strong marketing and customer service orientation whereas existing senior managers apparently have more of a technological emphasis and value system.
Another source of conflict is scarce resources.The newly hired senior managers are in dispute with the long-term managers over how much money to put into marketing and customer services.With limited discretionary spending, putting more money into these new ventures would seem to limit the amount of funds available to make other capital investments.This also relates to a third source of conflict: goal incompatibility.The goals of the newly hired managers are quite distinct from those held by long-term senior managers at NewTel.Finally, the conflict occurs because both the new and the old senior managers have an interdependent relationship.They probably have a reciprocal level of interdependence in many work activities because information is passed back and forth.However, the budget conflict is primarily a pooled interdependence situation.Even though pooled interdependence creates the lowest conflict potential, conflict is likely to occur where resources are scarce.