Table of Contents
Conflict can be stressful and disruptive within any business. Various kinds of disputes could arise within a small business. Triggers could involve issues with employees, suppliers, clients or shareholders. Managing conflict within a small business is crucial for maintaining a healthy work environment and ensuring smooth operations. This article will explain how you can manage conflict within your small business and best practices for conflict prevention.
Small Business Conflict
In the business context, conflicts are often inevitable. They can arise from simple differences in goals, opinions, personalities and understandings. However, it is crucial to remember that conflicts are manageable.
Take a small marketing agency, for example. The project manager insists on a collaborative approach to a new campaign, but the creative director thinks that creative control should sit solely with the agency’s design team. The root cause of this conflict is a lack of clearly defined roles and responsibilities. There is too much ambiguity regarding who holds the decision-making power for the campaign. This disagreement can cause decreased productivity, increased tension and frustration. To resolve the dispute, the agency’s owner called for a team meeting to redefine the roles and responsibilities of the decision-making process for client campaigns, establishing a clear protocol to prevent similar conflicts in future.
Small Business Conflict Management
1. Identify the Cause
The first step is to take time to understand the conflict and identify its root cause. Identifying the cause is essential for effective resolution. Gather information and actively listen. Meet with the conflicting parties separately to understand their perspectives.
2. Seek Professional Advice
You may need to seek professional legal advice, especially if you exhaust your internal conflict resolution options when attempting to manage a particular conflict. An experienced lawyer can:
- help you navigate the conflict resolution landscape;
- advise you on your next steps; and
- protect your business interests.
3. Alternative Dispute Resolution
An unresolved dispute can grow out of control, and you may need to bring in external assistance. Alternative dispute resolution (ADR) is an alternative to legal action, as resolving a dispute in court can prove very costly. ADR provides several methods to resolve a dispute without pursuing litigation. A solicitor can also guide you through this process.
The following table outlines some key ADR methods.
| Method | Explanation |
| Negotiation | Parties work together to come to an agreement, taking turns to express their viewpoints. |
| Mediation | An independent mediator works with the parties, helping them to reach agreement. |
| Arbitration | The parties appoint an independent third party. The third-party considers the dispute and generates an agreement on their behalf. |
If your employee is not performing at the expected level, you may need to implement a performance improvement plan (PIP) to get them back on track. Download our free PIP template.
Call 0808 196 8584 for urgent assistance.
Otherwise, complete this form and we will contact you within one business day.
Conflict Prevention Within a Small Business
1. Take a Proactive Approach
Pay attention to the type of conflict that arises within your business, however small. You can decrease the chance of similar disputes arising by fixing the root causes of frequent conflict. It is also important that small business owners foster a culture of teamwork, respect and understanding. Your company culture can impact how frequently disputes arise.
2. Draft Clear Contracts
You should share clear contracts with your employees, suppliers and clients. Common causes of conflict within any business are employee grievances and mismanaged expectations with suppliers and clients. An experienced lawyer can draft these for you, protecting your business’s interests.
3. Have a Conflict Resolution Plan
It is best practice to have a dispute resolution plan in place. Create a framework that you can follow if conflict arises. Your plan should include the steps you will take to navigate disputes.
You may set the first stage as a peaceful, constructive conversation. If the conflict continues, you can follow the plan to the next stages. The next stage might involve another conversation but with a neutral moderator, such as a management staff member with no involvement in the conflict.
You can also set out the conflict resolution steps within your employment contracts. This way, employees can look back on them and clearly understand the protocol they can follow. Providing them with this knowledge can prevent further unnecessary frustrations should a complaint arise.
Key Takeaways
Conflict can significantly impact small businesses, especially if it escalates. However, there are steps small business owners can take to manage conflict. These include the following:
- identifying the cause of the conflict;
- seeking professional legal advice; and
- using alternative dispute resolution.
You can also take steps to mitigate the risk of conflict arising. These include:
- taking a proactive approach and taking action when the same issue occurs more than once;
- sharing clear employment contracts with employees, suppliers and clients; and
- having a conflict resolution framework.
If you need legal assistance to resolve conflict within your small business, our experienced disputes lawyers can assist as part of our LegalVision membership. For a low monthly fee, you will have unlimited access to lawyers to answer your questions and draft and review your documents. Call us today on 0808 196 8584 or visit our membership page.
We appreciate your feedback – your submission has been successfully received.
