All organizations have conflicts—both within themselves and with other companies—and those conflicts have a variety of origins: different values and beliefs, emotional unrest, perception of limited resources, and diverging goals, among others.

Internal conflicts involve areas within the same company (e.g., between Marketing and Finance), whereas external conflicts occur between an organization and its external stakeholders (suppliers, intermediaries, etc.). Some conflicts escalate because of a participant's personal attributes (e.g., personality) and others because of substantive differences (e.g., quality, price).

Many techniques (negotiation, lawsuits, mediation, etc.) have been developed to solve such conflicts.

Business conflicts damage relationships, which are the most relevant assets of an organization. From a traditional perspective, disagreements are perceived as a fixed pie: A participant can only get a bigger slice when it comes at the expense of the other's piece. That fear-based scarcity mentality comes in various forms, such as fear of losing resources, fear of not being right, and fear of being controlled.

The existence of conflict implies each participant's perception of separation from the other. Both parties often give preference to the "right to be right" over their duty to care for others. But most conflicts can be amicably resolved, or even avoided altogether, with proper communication and open-mindedness.

Companies that successfully solve conflicts act based on noble principles (e.g., compassion, care, forgiveness, gratitude, etc.) and give priority to the human aspects of each participant during the negotiation process, thereby preserving and strengthening their business relationships.

Businesses should use the following communication techniques to avoid disagreements.

• Express your needs in clear and simple language. Use positive vocabulary when possible, and focus on what you want: Avoid discussing what is not wanted.
• Invite others to convey their needs overtly. Acknowledge others' opinions ("I appreciate your comments; thanks for letting me know.").
• Avoid mind-reading or guessing the other's opinions and preferences. Use open questions, paraphrasing, clarifications, and recaps to understand others' comments clearly.
• Encourage your partners to elaborate on their ideas with sentences like, "Tell me more about…" Listen actively—focus on their comments, and do not interrupt them. Keep an inquisitive attitude, even during rough times.
• Look for similarities between participants. Those who mention their similarities are naturally inclined to feel regard for others.
• Don’t ignore conflicts, or hope they will resolve themselves over time. Perceive conflicts as an opportunity to learn from one another.
• Try to interpret comments from others from a positive perspective. When a person makes a detrimental comment, paraphrase it from a positive standpoint. Assume that others have the best intentions and want to reach an agreement.
• Use words that imply a connection between the participants—for example, "let's," "us," "we," and "our." When possible, eliminate words such as "I," "my," or "mine."
• Avoid using manipulative stratagems such as ultimatums and false deadlines—ploys that prevent participants from achieving a mutually profitable agreement.
• Acknowledge others' emotions; allow them to be expressed overtly. Be empathetic to others' emotional states, using sentences like "It looks like you feel…" To avoid potentially destructive escalation, suggest a break when emotions heighten.
• Avoid adopting a defensive attitude. Don't respond to aggressive comments in a reciprocal manner. Identify your emotions regularly, and express them calmly, using sentences like "I feel…" without blaming others.
• Avoid personalizing the conflict (for instance, discussing personal traits). Personal conflicts are more likely to escalate.
• Approach the conflict while in a good mood whenever possible. When participants experience positive emotions, they develop more creative solutions.

Note: This article is based on an excerpt from the book The Art of Compassionate Business: Main Principles for the Human-Oriented Enterprise (2019, Routledge—Productivity Press).