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Conflict in the workplace: the ripple effect on small businesses

Conflict in the workplace: the ripple effect on small businesses

4 Minute Read

Conflict in the workplace can impact small businesses, affecting team dynamics, productivity, and company culture. This article uncovers:

  • What are the consequences of workplace conflict?
  • Why you shouldn’t ignore unresolved conflict in the workplace
  • What are the unique challenges for small businesses?
  • What actionable steps need to be taken to address conflict effectively?
  • How can MNP help?

Conflict in the workplace is inevitable. It’s also a force that can wreak havoc on your small business.

The reach of unresolved workplace conflict extends beyond the direct players. The domino effect of this tension can tarnish team dynamics, productivity, and chip away at your company culture.

Unaddressed conflict in the workplace isn’t just a risk, it can be a full-on threat to your productivity, reputation, and ability to retain employees who expect to thrive in a safe and healthy work environment.

What causes conflict in the workplace?

Workplace conflict encompasses any situation where there’s disagreement, tension, discrimination, or harassment amongst employees, teams, clients, or even leaders.

In small businesses, these conflicts can have unique characteristics due to the close-knit nature of the teams and the limited resources available. Tensions can arise over things like role ambiguity, resource constraints, informal processes, and emotional investment in the small company’s success.

If your small business is family run, be on the lookout for tension caused by family dynamics.

What impact does conflict in the workplace have on small businesses?

Your small business relies heavily on a tight-knit team where collaboration and camaraderie are vital for success. Conflict can cast a shadow over a business. The atmosphere becomes tense. Team morale can take a nosedive.

When left unresolved, conflict in the workplace can have an even greater effect on a small business. Unchecked tensions can fester and create a workplace rife with toxic behaviour like harassment or bullying. This puts the well-being of your employees at risk, as well as exposes your business to legal and reputational repercussions.

For employees, the impact of conflict in the workplace can be detrimental to productivity and fulfillment. Even those who aren’t directly involved in the conflict can be impacted by the negativity, leading to increased stress and decreased job satisfaction.

Your top talent, often the backbone of a small business, can become disillusioned if conflict remains unaddressed. Unresolved conflict can be perceived as a lack of action from leadership, sending the message that employee concerns aren’t a priority. Before long, your top performers may choose to look for a healthier and happier place to work.

How to resolve conflict in the workplace

If you’re experiencing tension in your small business, the time to resolve it is now.

Addressing concerns quickly and effectively is critical to maintaining a positive work environment and culture. Here are eight key steps to help your business resolve conflict:

Understand conflict happens

Workplace conflict is inevitable. Recognizing this is critical for you to effectively manage any tensions that arise. Clear communication and processes can help treat conflict as a regular occurrence, not something peculiar to ignore.


The best kind of conflict in the workplace is the conflict you can quash before it starts. By outlining proactive measures like open communication, offering conflict resolution training, and establishing grievance processes, you can address issues before they escalate.

Reflect on the conflict

There are different sides to every story. When looking for a resolution, actively listen to all the parties involved, determine what the issues mean to yourself and to them, and consider what’s on the line for everyone.

Encourage open communication

Ask questions to everyone involved and consider their answers. This will help you understand and address the issue at the core of the conflict.

Enlist a neutral third party

Sometimes a fresh set of eyes and ears can make all the difference. A neutral party can help clarify the core conflict and prevent any escalation. If there are any conflicts that need deeper attention, there are people who can help, like a conflict management practitioner.

Consider how to handle the conflict

There are many ways to deal with conflict in the workplace, like facilitated discussions, mediation, conflict coaching, arbitration, and litigation. Figure out which one works best to manage each specific issue.

Make a call

Use the knowledge you’ve gained in the previous steps to take action. This will address the conflict at hand, as well as show your employees that you prioritize their concerns and well-being.

Do a post-mortem

With the conflict resolved, take the time to reflect and examine how it was handled. What did you learn? Would you do anything differently? How can you prevent this issue moving forward?

Know you’re not alone

Meeting conflict in the workplace head-on is more than good practice — it’s integral to the success of your small business. By prioritizing conflict resolution and building a culture of open dialogue, your business can protect your team dynamics, retain your talent, and maintain a healthy work environment.

Our Consulting Services team is equipped to help you address challenges and ensure the long-term success of your business. To learn more about how your small business can address conflict in the workplace, reach out to Hali Van Vliet, Partner, Consulting, at [email protected].


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