Ted Waitt founded Gateway in a barn on his family's South Dakota cattle farm, making personal computers to order and selling them directly to consumers. Within 15 years, he had built Gateway into the country's fourth-largest PC manufacturer. However, he was concerned about the need for an experienced professional to lead his now-mature company. So Waitt hired Jeff Weitzen, a senior AT&T executive, to take his place.

Waitt and Weitzen got along well at first, socializing together and agreeing on new strategies for the business. As Weitzen settled in the CEO role, he hired a new team of executives from other companies and shifted Waitt's former management team to new assignment. He also made changes that took the company far from its informal roots under Waitt, such as calling more frequent meetings and instituting new performance measurement policies - changes that prompted some longtime managers to quit. Meanwhile, Waitt stayed out of the way, saying, "I had to give Jeff his space, to let him be CEO." Yet Waitt didn't agree with some of the new CEO's key decisions, such as shifting the old management team and changing an employee-centered ad campaign that the founder had approved. Waitt noted, "Jeff was executing differently than I would have executed as CEO."

Finally, when Gateway's holiday sales fell well below plans amid increasingly intense competition, Waitt and the board of directors confronted Weitzen about his plans for the company. Afterward, the founder and his handpicked successor met privately to discuss how they might divide up the firm's operation. The founder wanted to take a more hands-on role, but the new CEO didn't agree and said he would leave if Waitt became more active - which is exactly what happened, less than a week later.

Answer the following questions

1. What was the focus of the conflict at Gateway: Issues or people? Explain your answer.
2. What do you think is the specific source(s) of the conflict? Refer to the definitions in Table 7.1 to help you answer this.
3. Consider how each of the five conflict management approaches might have affected Waitt and Weitzen personally and Gateway as a company.
4. What conflict management response did the founder use to resolve this situation? Do you agree with the way Waitt resolved this conflict? Why?