Conflict prevention and resolution in the corporate context

Conflict prevention and resolution in the corporate context

Estimated reading time: 8 minutes
Conflict prevention is of crucial importance for companies

Conflicts within the corporate context can lead to serious problems. Would you like to find out more about different types of conflict and how conflicts can be prevented? But if the conflict has already arisen - which method can help?

More information on the issues raised will be considered in this blog post. This article addresses the impact of conflicts on companies, presents different types of conflict and introduces mediation as a suitable conflict resolution method.

How do conflicts affect companies?

Conflicts in companies can have serious social as well as economic consequences. In a large-scale study, the auditing firm KPMG found that 10-15% of employees' working time in companies is wasted on friction, conflict or the consequences of conflict. The annual economic burden on companies caused by conflict costs amounts to several billion euros. These include direct costs such as legal fees and court costs. There are also indirect costs that can arise for various reasons:

  • Reduced efficiency of employees affected by the conflict
  • Value not created during the conflict period (opportunity costs)
  • Demotivation and the associated reduced motivation of the affected employees
  • Conflict-related staff turnover and the associated costs for staff selection procedures, training and lower productivity of new employees
  • Increased absenteeism - either as a ‘pretended’ reason or due to illness caused by mental stress

As it is becoming increasingly important for companies to minimise frictional losses caused by conflicts and the resulting costs due to globalisation, the associated greater competition and increasing complexity and uncertainty (see VUCA), particular attention should be paid to good conflict prevention and management in the corporate environment

What is a conflict and what are the different types of conflict?

A conflict is a situation in which at least two individuals cannot simultaneously realise the best or most satisfactory alternative in their view. In principle, conflict is a clash of opposing points of view or different interests. This increases the emotional strain, the conflict gains power over the thoughts, behaviour and feelings of the conflict parties and may even involve uninvolved third parties.

The different causes of conflict result in different types of conflict:

  • Icon: Factual conflicts

    Factual conflicts

    Factual conflicts involve different opinions, goals and perspectives, resulting in conflicts of objectives, among other things. For example, two managing directors of a company may have different ideas about the company's objectives.

  • Icon Distribution conflicts

    Distribution conflicts

    Distribution conflicts are about the allocation of limited resources. For example, there could be a conflict between colleagues regarding a certain holiday period.

  • Icon: Relationship conflicts

    Relationship conflicts

    A relationship conflict goes hand in hand with injuries and offence between the parties involved. For example, a relationship conflict can arise between colleagues who have to share an office but have different ideas about cleanliness.

  • Icon Conflicts of values

    Conflicts of values

    In conflicts of values, cultural norms and basic attitudes clash. For example, a company's refusal to wear a headscarf at work may not be in line with the values and norms of a Muslim woman.

  • Icon Role conflicts

    Role conflicts

    A role conflict can arise if a person has different roles. For example, an employee could be given tasks in their new role as project manager that conflict with their parallel activity as a project member in another team.

  • Icon Personal conflicts

    Personal conflicts

    A personal conflict exists when people feel different decision-making or behavioural tendencies within themselves or when their personal behaviour, such as clumsiness or destructive behaviour, triggers a conflict.

How can conflicts be prevented?

Considering the possible consequences of conflicts emphasises the importance of conflict prevention. In principle, the aim here is to counteract a conflict in advance, i.e. to eliminate the potential for conflict and thus minimise the likelihood of a conflict arising. This depends in part on the type of potential conflict:

  • In the case of impending distribution conflicts in shortage situations, a transparent presentation of the chosen distribution criteria can create an understanding between both parties to the conflict, which can reduce the potential for conflict
  • Structural conflicts in companies can be avoided in particular by creating an awareness of the system logic and reflecting on organisational processes

However, there are also very general approaches that support conflict prevention:Conflict-avoiding management behaviour, e.g. through a ‘living culture of justice’, avoiding winner-loser situations, creating transparency and verifiable targets.

  • Regular appraisal interviews, which include personal dialogue in addition to assessment and performance-oriented aspects, can help to prevent conflicts and also strengthen motivation and loyalty to superiors.
  • Targeted personal development of all those involved, e.g. with regard to self-management and stress management in the form of workshops
  • Team development measures to build effective teamwork and promote team skills
  • Creating good structural conditions such as good work organisation and creative work design ensure a good working atmosphere and an open culture of conflict.
  • Maintaining working relationships, approaching colleagues openly and expressing appreciation
Mediation as a conflict resolution method

What should be done if conflicts have already arisen?
Mediation as a conflict resolution method

Should conflicts nevertheless arise, there are various approaches to dealing with and resolving them. One method of conflict resolution is mediation.

Mediation is a holistic approach to conflict resolution that goes beyond problem-centred, focused moderation. Its aim is to find a solution that benefits all parties (win-win solution). It is a non-violent method that attempts to explore the needs behind the positions of the parties and thus enables mutual understanding and new approaches to solutions.

Mediation is a verbal method that encourages mutual communication of needs and feelings as well as listening, which can lead to insight and a constructive style of dialogue. It therefore aims to achieve an amicable solution in which the parties are encouraged to make new constructive contributions and the mediator, as a neutral party uninvolved in the conflict, keeps an eye on the process as an authority. Mediation is a method and not an institution, such as a court of arbitration.

Mediation follows the following principles, among others:

  • Principle of disclosure: In order to be able to make an independent decision, the parties need all the information relevant to resolving the conflict. This requires a mutual willingness to disclose all relevant facts and data.
  • Creation of a secure framework: Mediation can only be effective if it is based on clear agreements. Security is needed for open and honest interaction. This is created, for example, by agreeing on rules of dialogue.
  • Principle of confidentiality: Serves to protect the parties and ensures a good negotiating climate. Confidentiality gives the parties the certainty that information disclosed during mediation will not be misused.

Mediation can be a very good way of successfully resolving conflicts in companies. The mediator's task here is to work out the core of the conflict and help the mediants to communicate better with the help of active listening, summarising and reframing. The mediator can thus encourage the mediants to negotiate and work out various options that can ultimately lead to a solution that is developed not only on a factual level but also on a personal level and can therefore be very helpful for the further organisation of the collaboration, for example.

Overview of different mediation principles
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