Business Conflict of Interest Between Partners: How to Handle It?
Joint ownership of a business, apart from obvious advantages, often has a negative side. Damaged relations between partners can devalue all efforts if the problem is not resolved to escalate into a business conflict of interest.
Having been working in the hospitality management industry in the Dominican Republic for a lot of years, business conflicts often arose between me and my partners. Especially their number has increased now, during COVID-19. Having analyzed them I can say that most often, business conflict of interest arises because of misunderstanding, understatement, when there are no accurately registered functional obligations of each of the partners. The contract is difficult to control in words.
Common mistakes with a business conflict resolution
- Defending one’s point of view without addressing the issue;
- Lack of flexibility, inability to resort to new tactics and switch to anything else;
- Distraction from the first priority task to the second one, and from the main issue;
- Activities only in the substantive plane, inability adequately to analyze the problem and move towards mutual interaction and cooperation;
- Intolerance of other positions, failure to look at the situation from a different perspective and to meet with the aim of finding a compromise;
- Stereotypical thinking and the desire to fit the resolution of the problem into the boundaries of specific patterns, traditions, and norms;
- Inability or unwillingness to take risks;
- A vision of only one way or one alternative solution to the problem and failure to see other options;
- Creating obstacles for free creative discussion of the issue and generation of ideas, as well as excessive criticism, pressure, threats;
- Unwarranted agreement with the point of view of the other party if it makes concessions, avoids solving the problem, or adaptations.
However, people involved in the business conflict of interest in many cases not only make these ten most common mistakes but also do a lot of other things that exacerbate the conflict and have an extremely negative impact on the very possibility of its peaceful and acceptable solution to the business partners.
How to prevent business conflicts
In order to avoid misunderstandings during such situations, co-owners have to understand the degree of responsibility of each of them, and interests have to coincide as much as possible:
- Fix any changes. It is clear that the situation will constantly heat up, so any changes in contracts are possible. It is very important not to leave everything on to chance and to agree on words, but really to sign new documents and notarize them.
- Try to be polite. During the crisis every company, every person will try to survive and keep their finances or even earn more. Any inaccuracies can cause a business conflict of interest and disagreement and further lead to trials and showdowns.
- Don’t answer rudeness to rudeness. Due to the instability of everything that is happening, the emotional state of any person is now extremely unpredictable. And no matter how much your partner tries to insult you during a conversation or some dispute that has arisen, do not give in and refrain from insults and switching to identities.
- Resolve any conflict peacefully. The crisis will pass, and it will be necessary to work together further somehow. The fewer business relationships you destroy, the more successful you will be in the future because it is very difficult to find a new and good partner. Try to defend your rights, but at the same time do it with the utmost care.
All business conflicts of interest are a challenge
Any crisis is a test of the strength of both person and the relationships between partners in business. Whatever the situation and however much you want to say everything you have, never part at each other’s throats. In business you always meet people twice: once at the peak of your career, the other on the decline. And since people remember their grievances and insults for a long time, it is better to resolve the business conflict of interest which has arisen in a calm and good way.
In any case, resolving conflicts between business partners is a complex task that requires equal attention and participation from both sides. Only a constructive solution can be achieved through joint efforts. Remember that each person perceives everything that happens differently, and perhaps for your partner, the same crisis can be a strong emotional blow. If he is important to you and your business, consider the reasons for his behavior. This may be the case.
Four positive consequences of conflicts between business partners
- Defusing tensions between conflicting business partners;
- New information about your business partner;
- Incentives for a change and development, material compensation;
- Diagnostics of opportunities of the partner.
Four negative consequences of conflicts between business partners
- High emotional, material costs of participating in the conflict;
- Employee dismissal, reduction of discipline, bad social and psychological climate in the collective;
- Excessive fascination with the process of conflict interaction to the detriment of work;
- Complicated restoration of business relationships (“conflict loop”).
- Disagreements between partners are natural and normal;
- Any disagreement can and should be resolved in a timely manner without bringing it to the conflict;
- Unresolved differences lead to the waste of time, money and relationships;
- Knowing the simple technology of creating agreements, you can avoid most possible differences with your business partners in the future;
- And most important! Even if you trust your potential partner for the full 100%, do not continue your joint business without a written partnership agreement.
In a business partnership such business conflicts are inevitable. People change, or simply manifest their previously hidden needs. They may no longer match the thoughts of business partners. At the same time in business conflicts few really win: they are always destructive and expensive for each of the participants. It’s possible to prevent most conflicts, to reduce their destructive force. Especially when you know exactly what to pay special attention to.
The main thing is not to be afraid of moving forward, leaving past failures in the past.
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