Conflict is the process in which one party perceives that its interest is being opposed or negatively affected by another party. Conflict is based on perception. One party can believe they have a conflict without the other party believing this. Conflict can lead to lower performance, higher stress, dissatisfaction and turnover, less information sharing and coordination, increased organizational politics, wasted resources and weakened team cohesion. There are also benefits of conflict. The optimal conflict perspective states that organizations are most effective when employees experience some levels of conflict but become less effective with high levels of conflict. Conflict can lead to better decision making, make people more responsive to the changing environment and lead to a stronger team cohesion if the conflict is between the team and outside opponents.

There are two types of conflict:

1. Task conflict (constructive conflict)
   This is a type of conflict in which people focus their discussion around the issue while showing respect for people who have other points of view. It focusses on an issue or task.
2. Relationship conflict
   This is a type of conflict in which people focus on the characteristics of other individuals as the source of conflict. This conflict threatens self-esteem, self-enhancement and self-verification processes.

The stronger the level of debate and the more the issue is tied to our self-view, the more likely that task conflict will evolve into relationship conflict. There are three conditions that potentially minimize the level of relationship conflict during task conflict: emotional intelligence and emotional stability (1), cohesive team (2) and supportive team norms (3).

There are different sources of conflicts in organizations:

1. Incompatible goals
   This occurs when one party’s goals interfere with another party’s goals.
2. Differentiation
   This refers to differences among people and work units regarding their training, values, beliefs and experiences.
3. Interdependence
   This refers to the extent to which employees must share information, materials or expertise to perform tasks. The risk of conflict increases with the level of interdependence.
4. Scarce resources
   This refers to a scarcity in resources that two or more parties would like to acquire.
5. Ambiguous rules
   This creates uncertainty which increases the risk that one party intends to interfere with the other party’s goals.
6. Communication problems
   This refers to the lack of opportunity, ability or motivation to communicate effectively. A lack of communication leads to increased reliance on stereotypes.

Pooled interdependence occurs where individuals operate independently except for reliance on a common resource or authority. Reciprocal interdependence refers to high mutual dependence as well as higher centrality.

There are five ways of resolving conflicts:

1. Problem-solving
   This is trying to find a solution that is beneficial for both parties. This is a win-win orientation. Information sharing is important for this style of conflict handling.
2. Forcing
   This is trying to win the conflict at the other’s expense. This is a win-lose orientation. This style relies on assertiveness and hard influence tactics.
3. Avoiding
   This is trying to evade conflict situations altogether.
4. Yielding
   This is giving in completely to the other side’s wishes. This style involves making unilateral concessions and unconditional promises.
5. Compromising
   This is actively searching for a middle ground between the interests of the two parties.

The best conflict-handling style depends on the situation. Cultural differences influence the preferred conflict-handling style. Men are more likely than women to use the forcing style.

There are structural approaches to conflict management:

1. Emphasizing superordinate goals
   Superordinate goals refer to goals that the conflicting parties value and whose attainment requires the joint resources and effort of those parties. It is useful to emphasize superordinate goal and not focus on subordinate goals.
2. Reducing differentiation
   Reducing differentiation leads to a reduction in dysfunctional conflict.
3. Improving communication and mutual understanding
   Improving communication and mutual understanding leads to less dysfunctional conflict. This only helps if the differentiation is sufficiently low.
4. Reducing interdependence
   Interdependence among employees and work units can be reduced by creating buffers (1), which is any mechanism that loosens the coupling between two or more people or work units, use integrators (2), which are employees who coordinate the activities of work unites toward the completion of a shared task or project and combine jobs (3).
5. Increasing resources
   By reducing resource scarcity, conflict will reduce.
6. Clarifying rules and procedures
   By clarifying rules and procedures conflict will reduce.

Third-party conflict resolution is any attempt by a relatively neutral person to help conflicting parties resolve their differences. This includes three activities. Arbitration is someone that has a high control over the final decision, but low control over the process. Inquisition refers to people who control all discussion about the conflict. Mediation refers to people who have high control over the process, but low control over the final decision. Inquisition is usually the least effective third-party conflict resolution method. The most appropriate third-party intervention depends on the situation.

Negotiation occurs when two or more conflicting parties attempt to resolve their divergent goals by redefining the terms of their interdependence. In the distributive approach, the negotiator believes those involved in the conflict must distribute portions from a fixed pie. In the integrative or mutual gains approach the negotiator believes that the resources at stake are expandable rather than fixed if the parties work creatively together to find a solution. Distributive negotiation is most common when the parties have only one item to resolve (e.g: salary) and integrative negotiation is most common when the parties have more items to resolve.

Negotiators engage in a form of goal setting which includes what they will initially request in the negotiations (initial), what they want to achieve in the best possible situation (target) and what minimum acceptable result they will accept (resistance). The other party also has these three positions and there is an area of potential agreement, between the resistance point and the opponent's resistance point. The initial offer point is each party’s opening offer to the other side. The target point is your realistic goal or expectation for a final agreement. The resistance point is the point beyond which you will make no further concessions. The best alternative to a negotiated settlement (BATNA) is the best outcome you might achieve through some other course of action if you abandon the current negotiation.

There are several aspects of the negotiation process:

1. Gather information
   Successful negotiations require both parties to volunteer information, but information sharing is a potential pitfall because it gives the other party more power to leverage a better deal if the opportunity occurs.
2. Manage concessions
   Concessions are a form of communication because they signal to the other party the relative importance of each issue being negotiated. Concessions are necessary for the parties to move toward the area of agreement. Fewer small concessions are better than one big one.
3. Manage time
   Negotiators tend to make more concessions as the deadline gets closer. The more time someone has put into negotiations, the more committed they become to actually reaching an agreement and this can lead to the tendency to make unwarranted concessions so that the negotiations do not fail.
4. Build the relationship
   Building and maintain trust is important in all negotiations. Trust can be build by searching for common backgrounds and interests. First impressions are also important. Relationship building demands emotional intelligence.

The effectiveness of negotiating depends to some extent on the environment in which the negotiation occurs. The three key situational factors are location (1), physical setting (2) and audience (3). There is an advantage to negotiating on the home turf. The physical distance between the parties and formality of the setting can influence their orientation toward each other and the disputed issues. Negotiators tend to act differently when their audience observes the negotiation or has detailed information about the process. Direct surveillance leads to negotiators being more competitive.