An organisation is made up of groups of people, and within groups of people conflicts are inevitable. Part of the measure of a good executive and management team is how they handle conflict. When conflict management is successful, there are limited negative effects and the company can move forward in a productive manner. When management does not offer conflict resolution, there can be many negative effects on the company. Understanding the negative effects of conflict on your organisation can help emphasise the importance of conflict management.
A company with weak management develops problems with conflict that continue for the long term. Employees see that management is unable to resolve conflicts within the company, and respect for the authority of management can be eroded. Insubordination develops because employees do not think management can maintain control over the company.
Drop in Productivity
Allowing a conflict to continue means that employee attention becomes more focused on the conflict and not on productivity. As a problem is allowed to linger, employees will attach more importance to resolving the issue in their favour rather than attending to worker productivity.
Lack of Direction
Conflict can sometimes arise when management is unable to communicate the direction of the company to employees. Conflict will erupt as employees are allowed to interpret change within the company in their own way.
Conflict creates rival factions. Sometimes those factions are individuals, sometimes they are groups. Unresolved conflict can create tension between groups that may normally need to work together. Such rivalries can make progress within the company difficult.
Lack of New Ideas
Groups in conflict tend not to collaborate on new ideas. When conflict goes unresolved it can be difficult to create new ideas the company needs to solve problems it is facing.
Quality of Work
If a conflict is allowed to go on long enough, the parties involved may begin to show more interest in the conflict than in doing their jobs properly. Product quality can suffer, and in some cases the safety of the employees can be in jeopardy as well.
In some companies, deadlines are very important. Groups in conflict may start to push deadline limits as the conflict becomes more important than reaching their deadlines. When both sides think they are right and the conflict is not brought in check by management, the idea that each side must think they are right before they can move on will begin to affect important deadlines.