Relationship between organizational conflict and performance of organization

Conflict is a force that must be managed rather than avoided. Managers should never try to avoid all organizational conflicts but they must try to keep the conflict at a functional and moderate level. It helps to contribute altering efforts which profit the organization. Additionally managers must compete to keep the organizational conflict focused on consistent task based problems. Managers can achieve it by minimizing conflict relying on personal animosities and disagreements.

Managing organizational conflicts

To manage an organizational conflict effectively, managers should perceive the sources and types of conflict present in an organization and formulate strategies accordingly (Deutsch and Coleman, 2000; Hatch, 1997). For managers it is necessary to create the skills that are important to effectively manage the conflicts arising in an organization since performance of an organization is highly related to the conflict occurring in an organization. The below figure shows the relationship between conflict and performance of organization:

Relationship between organizational conflict and performance of organization

Figure 1: Relationship between organizational conflict and performance of organization (Source: Brett, Goldberg and Urey (1994), Managing Conflict, Business Week Executive Briefing Service, UK).

At point A, there is small or no organizational conflict and the performance of the organization suffers. In an organization, lack of conflict often indicate that the managers put conformity at the new ideas’ expense. This impervious to strive and change for agreement rather than making the decision process effective. As the organizational conflict level increases from point A to B, organizational effectiveness is likely to increase. When an organization has a desirable conflict level (point B):

  1. Managers are probable to be open and encourage different perspectives.
  2. Look for ways to improve the effectiveness and functioning of organization.
  3. And they view disagreements and debates as an important part for making effective decisions (Constantine and Merchant, 1996).

As the conflict level increases from point B to C, conflict escalating to the point where the performance of organization suffers. Managers are likely to waste resources of the organization for personal gains. To be keener about winning the battles of politics when an organization has a dysfunction ally or high level of conflict, it is denoted in point C.

From the figure it is very clear that an optimum level of organizational conflict is necessary for every organization to make effective decisions and exhibit excellent performance. Also, it is understood that an organization with zero conflict fail to exhibit good performance. Hence, conflict is important for an organization to attain success.


  • Blake R and Mouton J S (1984), Solving Costly Organizational Conflicts: Achieving Intergroup Trust, Cooperation, and Teamwork, Jossey Bass, San Francisco.
  • Brett J M, Goldberg S B and Urey W L (1994), Managing Conflict, Business Week Executive Briefing Service, UK.
  • Constantine C A and Merchant C S (1996), Designing Conflict Management Systems, Jossey Bass, San Francisco.
  • Deutsch, M and Coleman P T (2000), The Handbook of Conflict Resolution: Theory and Practice, Jossey-Bass, San Francisco.

Priya Chetty

Partner at Project Guru
Priya is a master in business administration with majors in marketing and finance. She is fluent with data modelling, time series analysis, various regression models, forecasting and interpretation of the data. She has assisted data scientists, corporates, scholars in the field of finance, banking, economics and marketing.

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  1. Hello,

    What companies have been able to use the positive aspects of conflicts in order to attain effective organisational change?

  2. Prof James Ibe, Ph.D., CAE, CAM

    Please note the team conflicts as well as organizational conflicts may be functional or dysfunctional. Functional level of conflict may be productive and performance-enhancing while dysfunctional level of conflict may be unproductive and indeed performance-reducing. The optimal level of conflict is where organizational or team performance is maximized.


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