Managing Conflict in Business Relationships

Conflict is inevitable in human relationships, both personal and business. Conflict occurs when two parties disagree over a particular issue, which results in separation and a lack of common ground to resolve that issue. Conflict can be seen as unfavourable in relationships and to be avoided. However, it can also develop growth in relationships; by addressing and resolving the dispute in question it can renew a previously damaged relationship.

In business relationships, salespeople are confronted with various daily conflicts that need to be resolved and managed for the benefit of both parties. If left unresolved, conflicts tend to grow in intensity from a temporary conflict to a more permanent one that can jeopardise relationship continuity.

The nature and type of conflict can be viewed as temporary, permanent, or imaginary. Let me explore each type from a business perspective.

Temporary Conflicts

If addressed early, temporary conflicts, such as disagreements over pricing, payment terms, back orders, or product quality, can be resolved. There is a need to adopt a proactive approach to temporary conflict resolution in order to maintain healthy business relationships.

Permanent Conflicts

On the other hand, permanent conflicts are more challenging to resolve and require a higher degree of communication frequency. Permanent conflicts can relate to overdistribution, personality conflict between business partners, relationship neglect, or manufacturers selling directly and bypassing their authorised distributors.

Imaginary conflicts

Imaginary conflicts are difficult to detect. They involve one party in the conflict, believing the other party is plotting against them. The conflict can be real or imaginary. For example, a distributor might imagine a vendor is showing favouritism to another distributor when the vendor is not. The distributor is imagining the worst-case scenario.

Strategies for Managing Conflict

Conflict needs to be managed between partners. If you are managing essential business relationships, it is necessary to:

1. Classify the intensity of conflict as temporary, permanent, or imaginary. Remember, conflict needs to be resolved expediently before it becomes problematic.
2. Ensure regular and frequent communication to discuss and resolve differences. Communication skills, including good listening and problem-solving skills, are essential.
3. Make sure your salespeople are trained in identifying and resolving conflicts.
4. See conflict as a way of resolving pending issues that can revitalise and reboot damaged relationships,

If left unresolved, permanent conflicts can often lead to the termination of the business relationship; this is best avoided because finding new customers or distributors is costly. Finding a new customer is five times more expensive than retaining one. Exhausting all avenues of conflict resolution before we terminate a relationship is essential.

Key-Takeaway

Recognise that conflict is inevitable in business relationships and that the key is to identify, manage, and resolve disputes.

Your salespeople are the key interface with customers and distributors. They must build strong collaborative relationships and be trained in conflict-resolution skills.

Lastly, conflict can lead to a revitalised relationship and clearer expectations, or it can lead to relationship termination.