Hidden Costs and Benefits of Conflict Management

Conflict is a serious disagreement over needs or goals.  It results from differences in interests, perceptions or values.  The dictionary definition of conflict uses negative metaphors such as hostility, aggression and war.   Negative aspects of conflict include weakened relationships and organizations, low morale, tension and reduced cooperation and commitment.  However, conflict has positive connotations as well. Opportunity, journey, understanding and peace portray the positive side of the term conflict.  In this context conflict can create energy, growth, insight and stronger relationships.  

Sometime conflicts are clearly visible in disagreements, defensiveness or uncooperative behavior.  However, most of the time it is hidden below the surface and is evident from symptoms such as resentment, low morale, high turnover, and apathy. 

Direct costs of conflict include legal fees and opportunity costs. When conflicts occur, managers spend 42% of their time helping the parties reach agreement. The cost of defending a litigated employment claim can exceed $100,000. If you are busy trying to work out a dispute with a vendor you are not available to focus on long term strategic goals.  In all of these instances you are losing money even though it may not be reflected in your balance sheet. 

Conflicts inevitably arise between and among individuals or teams within an organization.  It is part of our everyday life.  However, it doesn't have to cause damage to your company or your bottom line.  Increased productivity, improved morale, reduced absenteeism are clear benefits of systematic conflict management.

A conflict management system helps ensure that disputes are handled early and at the lowest level in an organization. With appropriate dispute resolution language in your contracts as well as your employee manual many conflicts can be avoided.