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<xTITLE>Fundamentals of Conflict for Business Organizations</xTITLE>

Fundamentals of Conflict for Business Organizations

by Lawrence Kahn
January 2003

"In the middle of difficulty lies opportunity."
Albert Einstein

Lawrence Kahn
Every conflict holds the opportunity for creating improved processes and developing innovative procedures. We are all familiar with the negative attributes of conflict—avoidance, immobility, violence, inertia, and maintenance of the status quo. However, conflict has a positive side brimming with opportunities. Conflict has the ability to foster creativity, higher thinking, better listening skills, and change. These, in turn, provide management with the tools for significant improvement. It is inevitable that we will run into conflict. How we can choose to deal with it, in a negative or positive manner, is key to long-term growth and success.

Successful organizations generally deal with conflict in a positive, proactive manner. Superior conflict management skills can develop into a core competence, enabling organizations to gain a continuing competitive advantage in its industry. If operating units focus their response to internal conflicts towards finding creative, productive solutions, the organization will function at an accelerated level of efficiency. If the focus is antagonism and/or avoidance, efficiency suffers.

Understanding the nature of conflict is invaluable to dealing effectively with organizational conflict. Understanding the fundamental causes of conflict, makes it significantly easier to find creative solutions. For instance, during baseball’s early days a situation arose that led to great hostility among teammates of a certain club over one of the players failure to hear signals. The player was hearing impaired. Tempers became raw and pressure built to get rid of the player in question. The coach realized this was not a personality problem, but a communications problem. His creative solution was to teach the entire team American Sign Language. The partially deaf player ultimately became an integral part of the team’s subsequent success. The offshoot of this creative solution was the development of hand signaling used today between coaches and players.

Conflict arises for several reasons. As with the hearing impaired baseball player, conflict can arise out of misunderstandings. Erroneous interpretations of communications and emotions form the basis of many conflicts. Accounting terms such as "liabilities" may translate to sales personnel as "stale product lines." Similarly, frustration over a problem many be interpreted by someone else as anger or scorn. Their response may be to avoid working with the person, which aggravates the situation and increases to the level of ongoing conflict. Diagnosing the root cause as a misinterpretation of emotions can lead to effective resolution. Dealing with the conflict as a personality problem between the two workers is not likely to produce the same positive result.

Different views of values, organizational structural limitations, and historical events are core issues frequently serving as the basis for conflict. For instance, individuals may perceive differences in the chain of command under the corporate organizational structure. Someone may understand that they can only accept assignments from a certain individual. However, the informal managerial structure allows for the individual to perform functions for several managers. Serious conflicts can arise which could be misconstrued as personality issues rather than structural issues. Challenging the individual’s ability to get along with others or their ability to be a team player may be counterproductive.

The other major basis for conflict is competition for limited resources. Competition arises over tangible resources (e.g., land, money, food, and water) and intangible assets (e.g., power, appreciation, stature, or companionship). The nature of the competition is further affected by the values, structure, and history in which the players find themselves. Money can be redirected from one department to another to increase productivity. In a competitive marketplace, scare resources may be allocated to marketing instead of product development or quality assurance. Accounting systems may place a higher value on production levels than on cost efficiency in determining bonuses. The resulting conflicts between departments can only be effectively resolved if management understands that the problem lies in the structure of the accounting system, not in the personalities of the department heads.

Too often the response to conflict is to deal with the symptoms. We see the strife between individuals or departments, but fail to focus on the underlying dilemma. As a result, we attack the problem by seeking ways to make the participants play together nicely, while leaving the core issue unresolved. These solutions become patches that often don’t hold. Locating the core conflict helps management begin looking for resolutions that work. When the spotlight is put on the core issue, opportunities become apparent. Management can concentrate on developing innovative structural and procedural changes that encourage communications and a broad corporate focus.


Lawrence Kahn is a highly experienced mediator, arbitrator, and instructor. A former trial attorney with a degree in Business Administration, Larry teaches graduate level courses and lectures in Conflict Management, Mediation, Negotiation, and Strategic Planning. Memberships: Association for Conflict Resolution, National Arbitration Forum, Strategic Management Society, Wisconsin Association of Mediators (Board Member), and Wisconsin Bar Association Alternative Dispute Resolution Section (Past Chair and Board Member).

Larry has over 15 years of experience as a mediator in the areas of divorce, marital, business, real estate, and commercial disputes. He has over 30 years of experience as a trial attorney and negotiator.  He has conducted workshops and trainings in a wide area of mediation and negotiation subjects and a frequent guest lecturer and keynote speaker. Larry combines in his mediations the best aspects of mediation, negotiation skills, strategic planning principles and collaborate crisis management techniques.


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