Last Saturday night, having absorbed the pain of West Ham sinking deeper into the mire after they had lost that afternoon to his once beloved Chelsea, Gianfranco Zola loosened his tie and stretched out his legs. He relaxed and, in his engaging way, reflected on "the passion and suffering of managing a football club". Zola said those heavy words lightly, his famous jaw-cracking smile proving he had lost none of his warmth or understanding of real life.

Fifteen minutes earlier the West Ham manager had been announced as this year's Man of Peace – an award decided by former recipients of the Nobel Peace Prize and given to an individual who has made "an outstanding contribution to international social justice and peace". Former winners, in a blurring of showbiz entertainment and liberal sentiment, include Bob Geldof, George Clooney and Bono.

Zola is more self-effacing so it was not surprising that, rather than bask in the adulation, he should turn to this interview instead. It allowed him to talk at length about football and the addictive agonies of managing West Ham. But first, away from the gaze of all those who came to honour him, Zola shook his head. "You know," he said, "my father is not alive but he would have been very proud tonight. And my mum, who still lives in Sardinia, is obviously delighted."

Zola seemed touchingly confused by his elevation to the great and the good. He had transformed many British suspicions of the 'foreign footballer' when he played for Chelsea, and become a cherished figure, while he now works quietly and occasionally for Unicef. But, for the most part, the 43-year-old is immersed in the solemn trials of management. "I got this call telling me I had won and I thought it was a joke. I'm just a simple footballer and people who have received the prize before have done really great things."

None of them, however, has had to cope with the maddening vagaries of life at Upton Park or a new chairman like David Sullivan who, soon after taking over the club, questioned whether Zola was "too nice" and "too soft" to succeed as a manager. And no other Man of Peace has been embroiled in a relegation dog-fight which, after West Ham visit Arsenal today, sees decisive home fixtures, next Tuesday and Saturday, against Wolves and Stoke.

These eight days will tell us much about Zola's merits as a manager and go a significant way to determining whether West Ham are relegated. Portsmouth look doomed but Hull and Burnley, currently in the drop zone, are only three points behind West Ham. "This has been a troubled season and we are still looking for a way to get out. But in this country they say what doesn't kill you makes you stronger."

Zola paused and patted his heart. "I'm still breathing, so I still have hope. But it has been difficult. I came to West Ham with a specific project – to develop a strong team and a top club. But 10 days after I arrived [in September 2008] the club experienced a very big financial problem. Our chairman [Björgólfur Guðmundsson] went bankrupt."

The Italian still enjoyed a productive first season. "It was brilliant. We nearly qualified for Europe. This season we thought the financial situation would be better but other problems came up like a Matryoshka – the Russian doll where you open up one to find another and another. We are still opening and finding more problems. Some people said most managers don't go through the same things in 10 years."

Zola shrugged. Even his Man of Peace prize could bolster Sullivan's accusation that Zola might be closer to Ossie Ardiles, a decent human being but a failed manager, than a footballing man of war like the scheming José Mourinho. "The chairman is the chairman. He is entitled to his opinion. People think because I'm a nice person I'm a weak person. But I don't think being nice means you don't know how to take tough decisions. I have coped with that before and I'll cope with it again. The chairman and I spoke and clarified things. Now there is no problem."

Yet Sullivan also angered Zola when, just before West Ham played Birmingham last month, he suggested the players and staff would have to accept a 25% wage cut next season. Zola nodded wryly. "He said he did that because he wanted to motivate the players. It's OK. We won and we spoke after the game. We came out having made clear our position to each other. And since then the situation has become better."

Zola is compassionate and sensitive – not always the best attributes for a manager. "It is a job where you have to make decisions that affect other people. That's the part I found most difficult – when you pick a team and you have to leave out a young player or someone who has suffered all week. He would be willing to die for you but you have to pick the players you believe will win that game. So you leave him out. That's not easy – trust me. But it's becoming easier because you have a duty."

West Ham were still overwhelmed at Stamford Bridge last week. Zola received a rapturous welcome but his popularity could not mask his team's deficiencies as they lost 4-1. "At 1-1 we were doing OK. Then Chelsea took advantage of every mistake. When I go to bed tonight the award will sweeten the pain but I will lie there thinking why things didn't work. As a footballer I was focused 90 minutes of a match – and then I went home and switched off. But in this job the hour-and-a-half of the match is the relaxing bit."

As for other great former footballers, management provides a test in how to convey seemingly simple tasks to lesser players. "When you are a talented footballer you rely on your abilities to win games. You use your skills without thinking. But in management that doesn't work."

Zola cited his friend Diego Maradona, whom he played with at Napoli, to pinpoint an extreme case of a footballing genius struggling in management. "With Diego at Argentina it's similar to my situation. Up and down. Inside of him there is so much football knowledge. If he is able to get it out and pass it on to his players it will be fantastic. He has to find a way to do that because, for him, it came so easily on the pitch." Despite Argentina's chaotic World Cup qualification campaign, Zola said: "With Diego you never know and, looking at their quality, I put them alongside Brazil and England to win it."

That name-checking of England seemed another example of Zola's cursed "niceness". Why else would he look to England, ahead of Spain, as Brazil's likeliest challengers? "I'm not just saying that. England have a real chance because they are a strong team with a very good manager. I always had the impression England never came to competitions with freedom of mind. They are so afraid of mistakes. In football you need freedom to try things. But [Fabio] Capello will help. He will give them a lot of belief and motivation."

Before Zola went to West Ham there were persistent rumours that Capello would offer him a coaching role with England. "There was a lot of talk but I never spoke to Fabio. It would have been a big honour because Capello is one of the best. In that period I was having a good time working with [Pierluigi] Casiraghi and Italy U-21s. "

Even Capello's famed decisiveness has been undermined by England's ongoing soap-opera. "The English love this sort of thing," Zola said. "They like the gossip. In Italy we don't like it. But here it's constant and in my opinion it doesn't help England." Had Zola spoken to John Terry, his disgraced former Chelsea team-mate? "We had a good chat [last Saturday]. He's OK. He's a strong boy."

Zola and Terry could hardly be more different, a fact which the Italian acknowledged even while arguing that his more rounded and altruistic perspective was not unusual in football.

Today's opponent, Arsène Wenger, is a more suitable contemporary. "We do talk," Zola said of Wenger. "The last time he came to West Ham to watch a reserve game we spoke a lot. He's a manager I really like. I like his style of football and his management."

Despite his urbanity, Wenger has an edge which allows him to compete avidly at the highest level. "They have a real chance of winning the title," Zola acknowledged. "And, against Porto, they were great. It's a long time since I saw a team playing such good football."

His Saturday night was almost over but the Man of Peace was not quite done. To bolster the iron in his soul, Zola recalled the last time he had taken West Ham to the Emirates. Wenger then hailed West Ham, in January 2009, as the best team in the Premier League after they continued a long unbeaten run with a 0-0 draw at Arsenal. "It was a very good spell," Zola said. "Arsenal were passing the ball around, as they do, but we defended really well. We need to do the same [today]."

Zola looked up, his eyes flashing. And then he smiled more sweetly again. "It's difficult to know what will happen. But I like what I'm doing at West Ham and the fans are great. I hope I can pay them back – and show them all that I'm nice but strong."