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Together Into The Abyss?

It is all but certain that Freidrich Glasl has never met Arthur T. or Arthur S. Demoulas. Glasl is the Austrian social scientist, well-known in conflict resolution field, who modeled nine stages of conflict escalation and grouped these stages into three phases. The Demoulas’ are cousins and partners in a third-generation New England supermarket dynasty that employs 25,000, has annual revenue of $4.5 billion and a total of nine (yes, only nine) shareholders.

But the story of the Demoulas’ decades-long conflict illustrates Glasl’s model in a way that few business disputes have. Though a private company, the Demoulas’ legal disputes have been very public. Their saga cannot be summarized in a blog post; it is epic. It began in 1971 with the unexpected death of one of the founder’s sons. “Highlights” since then include courtroom fistfights, jury tampering, disbarred attorneys, covert operations in Nova Scotia and tens of millions of dollars in legal fees. After relative harmony in recent years and strong business growth, a new chapter in the conflict has begun as the board, led by Arthur S. Demoulas has ousted CEO Arthur T. Demoulas.

For all its drama, the Demoulas’ conflict has followed a fairly predictable path, one described by Glasl in 1997 and used as a model in assessing how far a conflict has progressed and possible approaches to resolution. His three phases coincided with likely outcomes, moving from “win-win” to “win-lose” to “lose-lose” as conflict grows more destructive.

The board had the legal right to fire the CEO; that is not in dispute. But CEO Arthur T. Demoulas was a revered figure among employees, many of whom have walked off the job in support of him. They are picketing the company headquarters and stores carrying demanding his reinstatement. Many store shelves are empty. The public seems inspired by the employee loyalty and is also boycotting the stores until the CEO is reinstated.

In terms of Glasl’s model, this conflict appears to be late in stage 6: public threats and ultimatums have been issued on both sides. The board-appointed acting CEO has threatened to fire and replace boycotting workers. Those seeking to replace workers report being threatened by current employees. In the meantime, shoppers in neighborhoods without alternative markets and suppliers (especially of perishable items) are collateral damage.

This puts the Demoulas conflict at a very critical stage. There is an offer on the table for Arthur T. to buy out the other shareholders. This may be the only way for them to prevent moving in to Glasl’s 7th stage, where intervention is unlikely to prevent a “lose-lose” outcome. Here the communication that is present in Stage 6, though mostly in the form of threats and public pronouncements, breaks down almost entirely. By stages 8 and 9 there is no limit on the damage each side is willing to inflict on the other and they are willing to risk great loss to themselves as long as it hurts the other in the process. Glasl calls his final stage “together into the abyss.” Although reputations have already been harmed and financial losses have already occurred, there is still value to be maintained and protected, and still time to disrupt the dynamic that threatens so much.

TAGS: Facilitation, Mediation

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