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Conflict Resolution in Business


Conflicts prove to be an inevitable element of one’s social life. In many cases, disagreements between individuals and their groups are not destructive; moreover, they can actually contribute to the development and prosperity of the whole community. The function of a conflict is drawing attention to the problems that exist within a group of people and catalyze its resolving. The business environment is not an exception: due to strong competition, high rate of companies’ operation and their intensive interaction, it is characterized with high probability of occurrence of various challenging situations. Analogically to the other fields of our life, conflicts in business identify problematic areas and trigger making corresponding managerial decisions. However, if they are left unresolved or are managed in a wrong way, they may negatively impact on a company’s performance. To develop an effective approach to dealing with conflicts at the workplace, one may need both theoretical background in the given field and substantial experience in managing contradictive situations of disagreement. In the course of my professional activity, I have faced a number of situations of disagreement and confrontation that needed to be solved constructively for the wellbeing of the whole organization. In this paper, I review some specific examples of these problems and provide the analysis of their causes and threats. I also describe my approach to managing the mentioned situations.

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Conflict Resolution Cases

You’ -The Spa Conflict: Overcoming Resistance to Changes

In 2006 I founded my own business, “You- The Spa” New York. As the CEO of the company the range of my responsibilities included development of the business plan and ensuring that the firm stayed competitive in the industry. I also attended presentations relevant to the health and beauty industry as well as made purchase decisions and orders for the company. One of the efforts that I undertook was modernization of our activity through the use of new software and computerization of the spa’s operations. Unexpectedly for me and the colleagues who supported my initiative, this decision resulted in a conflict within the team. While some of the employees supported the implementation of the new software system and computerization, most of the staff did not favor the idea. As the CEO and the founder of the company, I had the right to make a final decision in this contradictive situation.

Having analyzed the conflict, I realized that little could be gained from forcing the employees to accept the new system by threatening to terminate their contracts: many of the staff members had worked in the spa for a long time, and their value for the company was substantial. On the one hand, I understood that introduction of the new software and complete computerization of business operations was the way to provide good services to our clients and, consequently, the means of gaining a new competitive advantage in the industry. On the other hand, I recognized the validity of staff’s fears, and to make the innovation successful, I needed their agreement and support – otherwise, the new approach would become a serious obstacle and make the employees’ work less effective. As a manager, I remembered that an important component of one’s effective leadership is the ability to ensure that every subordinate comprehends and shares the ideas and concepts that the leader is trying to advance.

Understanding that the company really needs the offered innovation in order to take a new step in its operation, I decided to analyze the causes of the conflict. Having listened to the opponents of computerization, I found out that most of them were not advanced computer users, which meant their professional activity would become more complicated for them in case the new system is implemented. In addition, I realized that the problem had certain psychological background: many staff members argued that they did not see the reason for computerization, as they got used to work in the traditional way. My question about the advantages of the new system demonstrated that the employees had poor knowledge about the benefits the new approach would bring.

To resolve the conflict, I had to develop a solution that would address each of these factors. I decided to offer the staff members a compromise: the new computerized system was implemented in a trial mode, and the employees who supported the innovation could try to use it in their operation. The conflict management style that I applied was therefore accommodative since I gave the employees an opportunity to follow their individual way as opposed to forcing the new system. In addition to overcome the resistance to changes, I organized the trainings for the staff members who needed more practice to cope with the new software. The first training was devoted to the advantages of computerization – I considered this information crucial for gaining the employee’s loyalty.

The developed approach proved to be optimal in the given situation. The employees who needed time to get used to computerization were not challenged by the changes. Moreover, the trial mode implied computerization of separate departments so that unforeseen troubles with the new system were discovered and eliminated. On the whole, this conflict made positive contribution to the organization: we avoided the difficulties and errors that might occur in case our operation was computerized immediately. Moreover, the employees who attended the trainings improved their computer skills thus become more valuable specialists for the company.

Millennium Homes Investment: Learning the Essence of Negotiation

As the founder and the CEO of Millennium Homes Investment Company, I was responsible for managing the office with twenty employees. Most of these specialists were agents who had been trained on speculation and sale of properties. The conflict arose over the payment issues as some of the employees argued that their commission should be significantly increased. Having listened to their argumentation and estimated all pros and cons, I came to the conclusion that their condition was not reasonable. Considering that some of the agents threatened to terminate their contracts, I knew that losing people involved into the conflict would be a failure: significant efforts were invested into their training in order to build a strong team willing to cooperate.

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My decision was to negotiate on their salaries in order to find a compromise. Negotiation is defined as communication for the purpose of persuasion; it implies that the involved parties make proposals or conditions and discuss them until an acceptable solution is elaborated or a “deadlock” is reached. A negotiator may follow one of the following approaches: competition and collaboration. Competition is based on opposing interests and ends up in a win-lose scenario while collaborative is based on common interests therefore yielding to a win-win outcome. Collaborative negotiations are aimed at safeguarding the future relationship with the other party; that is why it is considered to be more effective in the business environment. Correspondingly, I decided to apply collaborative style since my future relationship with my agents was important and I did not wish to take risk of losing them.

The notion of negotiation implies that the parties’ efforts are directed towards resolution of conflicts around particular resources: each of them introduces its demands, requirements and conditions to be met. In the course of discussion, the parties aim at reaching their goals. A negotiation goal can be defined as the known or presumed commercial or personal interest that sets the ground for the conversation. The particular goals for the parties involved may be well defined or vague and confusing. In my particular case, the core of disagreement was the agents’ salary, and the goal was to come up with terms that would be favorable for both the employees and me as an employer. I requested my colleagues to come up with their initial requirements on pay and benefits that they wanted to obtain from the company.

At the same time, I came up with my counteroffer which was obviously lower than the figure that the staff demanded. Thus, the basis for the negotiation was established, and we had to develop a compromise. The next step was aimed at understanding each other’s readiness to make concession. I used a lot of open-ended questions and thus gave the employees an opportunity to deepen my comprehension of the issue. At this stage, I got familiarized with the grounds for the agents’ requirements: in particular, they argued that the cost of living had increased significantly while their salaries remained constant. They also highlighted the fact that they had created the loyal clientele and thus increased the profitability of the company. By the end of the session, I had a better understanding of their point of view and could propose solutions that they would find suitable. Once it had been clearly established what each party wanted, I put effort into reaching a solution that would be beneficial to me.

“Concession trading”, the important element of any negotiation, is the situation when the parties are expected to reduce their demands or requirements in order to meet each other’s expectations and interests; the process goes until the agreement is reached. I admitted that the cost of living indeed had gone up and, consequently, the salaries should be increased. However, we also agreed that the percentage of the increase the employees required would not be sustainable. Consequently, we agreed on reducing the requested amount by 50%. We also decided that for the increase to be possible, the employees were to reach a certain sales quota per month. The sales agent found my offer agreeable and I also evaluated the result as that beneficial for both parties.

At the onset of the conflict, my employees and I were at loggerheads; however, at the end of the process, we were able to reach consensus by making concessions. Thus, while each party made some gains and some loses, we were both content with the developed solution. The business benefited from this resolution since the sales agents were now more motivated to work harder and on top of that, I did not have to fear that my key personnel would desert my company.

Superior Homes Real Estate Agent: Solving an Ethical Dilemma

Another conflict I faced in the course of my professional activity took place at Superior Homes, Jamaica, NY where I occupied the position of a real estate agent. In this company, my responsibilities included location of properties for investment and finding potential buyers. I also attended multi-listing appointments and gave presentations on behalf of the firm. As a real estate agent, every day I had to negotiate with people whose decisions and activity were important for Superior Homes for instance customers, banks, layers and builders. This time, the conflict occurred between two of my subordinates. One of them had found a piece of real estate with the aim of reselling it to one of our clients.

The deal seemed to be very good; however, after further inspection, it became clear that the condition of the house he had bought was not satisfactory. The employee therefore realized that he had made a mistake and had charged a price that exceeded the real value of the object. However, a customer was still willing to purchase the house, so the agent intended to complete the deal and leave the problem to the client. This became the ground for a conflict since head manager did not consider it possible to let any of our company’s customers purchase the dilapidated building under false pretense. The two agents approached me for a solution as I clearly understood the positions of both of them. While one of them was concerned about driving the company at a loss, the second one did not want to lose a client. As their manager, I had to find the balance between the interest of our customer and the whole company. Moreover, it was obvious that the situation overgrew a usual conflict at the workplace and turned into an ethical dilemma.

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To effectively manage this case, I had to look for a solution that would not affect the reputation of the company and at the same time would not cause significant loss. My task was also to bring both agents to an agreement. I therefore decided to apply the collaborative style of conflict resolution which implies working with the parties in order to find an alternative that suits both of them. My first step first was to talk to the agent who intended to undertake the risky venture in order to avoid a loss knowing that risk is not unusual in the real estate industry. Seeing that the employee put effort into the bargain for the good of the whole firm, I nevertheless explained him that it would bring positive effect only in the short run; as for the long run, we would lose since the client would be unsatisfied with our service, and this case would influence the credibility of our company.

The head manager who was the third party of the discussion sought to ensure the satisfaction of our clients and therefore provide the ground for their loyalty to the company. In the present day, the success of an organization is based on the establishment of a sustained competitive advantage over the other players in the industry. One manner in which this can be achieved is by meeting customers’ needs since they are the people who possess the power to give a company a competitive edge over its contenders in the market. Research indicates that there is a strong correlation between a client’s satisfaction that results in his/her loyalty, and increased sales for the company. Having these considerations in mind, it made sense to ensure that our customers were not dubbed into buying substandard property since this would finally affect the overall performance of the company. As I mentioned before, I decided to take the concerns of both employees into account and come up with the most reasonable solution, therefore, we all agreed that it would be undesirable for our organization to foot such a huge loss and also for the clients to be deceived into buying the property.

Consequently, the only solution was to contact the buyer and explain him the problem with the chosen house and, correspondingly, decrease the price. While this decision was not beneficial for the company in the short run, it would ensure the buyer’s satisfaction with the service. Thus, I contacted the customer and explained that the building turned out to not correspond to his initial expectations and that he might have additional expenditures for eliminating the problems. I offered the price that was reasonable for the object in the given condition and made it possible for a client to amend it in the future. The person who purchased the house was satisfied with the deal and continued to be a loyal customer to Superior Homes. In case the agent made an opposite decision and avoided informing a customer about a problem, the loss would be more substantial. Due to the effective manner in which I resolved this conflict, the relationship between the two employees who had been in disagreement at the beginning was enhanced. By working together to ensure that we lived up to our company’s longstanding record of guaranteeing customers’ satisfaction, our ability to cooperate and understand each other was greatly increased.

Air-Force, Israeli Army: Should a Conflict Be Concealed?

Another significant conflict that I faced occurred while I was working for the Israeli Army’s intelligence unit as an operations manager: this position implied that I was charged with managing the operation room of the unit.

A managerial position generally entails the effective and efficient utilization of resources that are available to an organization with an aim of achieving its goals and objectives. It involves distributing and using the mentioned resources, as well as planning and controlling of a company’s activities. I had a number of people who relied on me to keep track of their operations and report to the senior personnel in the base.

The conflict arose from one of the officers who reported to me about his suspicion: another office was involved into misappropriation of the unit’s resources. The accused person was angry that such statements were being made against him since he had been working for the unit for many years and had proved to be a reliable and honest person who did not allow himself any abuse. The two officers presented their case to me since I was in a managerial position and had to make a decision.

As an operations manager, I was responsible for the appropriate use of the resources and I therefore considered the fact that if there was a possibility of a theft, I would be responsible for it; moreover, higher officers had to be informed about a suspected person’s misdemeanor. However, the two parties asked me to handle the matter on my own since involving the higher officials would have major consequences and it could affect the careers of them both. While I believed that the accused party was indeed a loyal officer and the probability of him having engaged in the activities for which he was suspected was quite low, I still had to take some measures. I decided to adopt the controlling conflict management style. This approach is power-oriented and involves one being assertive about their point of view and not letting the other person win through compromises. I decided to apply this style since in the army as in any other organization, a theft is considered a misdemeanor of big importance that should be investigated thoroughly, and in case the information was corroborated a person would be accountable for misappropriation.

I therefore explained the matter to my superior who involved the investigative branch of the unit with the aim of solving the issue. After several months of profound examination by the special unit, it turned out that the officer was not involved into the action he was accused of, and the issue was therefore dropped. The manner I applied to resolve the conflict between the two employees of the intelligence unit was not supported by them. However, my superiors were pleased by my initiative since they admitted that I did not have the tools to effectively deal with the matter on my own.

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The examples described in this essay illustrate different causes and essence of conflicts that might occur in the workplace. Conflict of personal interests requires the parties get involved into negotiation and be ready to make concessions. Consequently, contentious situations may be especially easy to solve when all the parties involved into them have positive intentions and try to act for the benefit of an organization. The task of a decision maker is to find the optimal solution that would be beneficial for the whole community and would not affect the interests of each party.

Theoreticians of conflict management offer different approaches to resolving contradictive situations that occur in the business environment. A manager should investigate the situation and evaluate all the pros and cons in order to choose the appropriate style. The examples mentioned above demonstrate that as a decision maker, I prefer cooperative conflict management style and tend to find a compromise, as this approach helps me support good relationship within a team. At the same time, I used to face cases when a strong assertive and uncompromising position had to be taken – for example, the situation that took place in the intelligence unit. In that case, the future relationship between me and my colleagues took the secondary place. My experience also demonstrated that there is no universal approach to resolving conflicts at the workplace. A manager should investigate each case as a sum of several components, such as the parties’ interests, the threats that occur in the given situation, the ethical issues that a decision maker should take into consideration, etc. It is also very important to view the situation both in the short and the long run – in some cases, the intention to gain a hasty advantage may result in a substantial loss in the future.

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