Issues of Conflict and its Impact on Business in Construction Industry

This study examines the issues of conflict in the construction industry and its impact on business. It discusses strategies for conflict resolution and negotiation. The research findings highlight the importance of conflict management and negotiation in improving business performance.

IDENTIFY THE ISSUES OF CONFLICT AND ITS IMPACT ON THE BUSINESS IN
CONSTRUCTION INDUSTRY
Abstract
In this study it has been described about how entrepreneurs negotiate conflict and what is
the impact of conflict on business. Also, there are various strategies and methods of conflict
management has been discussed. In article it has been explained on causes of conflict in
business. Moreover, what is the impact of conflict on business performance and on interest of
stakeholders has bene discussed. It has also been discussed that negotiation benefit in resolving
conflict. In addition, it has been discussed that there is positive impact of negotiation on
business.
For research, focus groups have been taken as sample size. The results described that
entrepreneur use persuasion and integrative negotiation strategies for solving conflicts. In this,
the researcher has used the mixed methods that have included the aspects of both qualitative and
quantitative data. The data has been gathered through survey. It has been found that the main
root cause of conflict is misunderstanding. Also, the impact of conflict depend on what is the
reason behind it. Moreover, negotiation is suitable way of resolving conflict. The interest of
stakeholder impact on business in both positive or negative way. However, implication is that in
future research include how conflict impact on employee behavior and interrelationship between
productivity.
1

Introduction
Background
Conflicts are common part of business. It occurs due to differences between employees and
management. Beside this, conflict can occur due to certain misunderstandings as well. There are
many issues due to conflict occur in organization (Cascio, 2018). It can be either personal or
professional. It is important for business to identify reason that why conflict has occurred.
Moreover, there is a great negative impact of conflict on business. Furthermore, the relation
between staff and management is affected. In addition, this leads to absenteeism and impact on
organizational culture. Absenteeism happens when conflicts are not resolved in time then it
becomes difficult for management to negotiate. Thus, manager resolve conflict as soon as
possible so that productivity is not hampered. In order to solve conflicts, relevant skills are
required to solve conflicts.
In this study it will be analyzed about issues of conflict and how it impacts on business. Also,
the reason behind why conflict occurs will be identified. The research focus on areas from where
business is affected (Kerzner, 2017)
Significance of study
This study will help in identifying issue due to which conflict occurs. Also, it will be
useful in finding out how conflict impact on construction business. the study will help in
identifying strategies that how conflict can be solved. They will develop and implement
strategies to resolve conflict.
Aim of the Study
2

The aim is to identify the issues of conflict and its impact on business. A case study on
construction industry.
Objectives
 To investigate issues of conflict in construction business.
 To analyze the impact of conflict on business.
 To recommend strategies of negotiation that how conflicts are resolved
Research Questions
The research questions of the study have been mentioned below that are aimed to be answered in
the following study.
Q1. What are the major issues of conflicts in the industry?
Q2. What is the impact of conflict on business?
Q3. What strategies can be followed to resolve conflict?
3

Literature review
Conflict Management
Conflicts occurs when there are differences between opinions of people. There are multiple
reasons of conflicts in a workplace which includes alterations of views, different beliefs,
communication gap, etc. (Caputo, Ayoko, & Amoo, 2018).
(Masuda & Kostopoulos, 2016) stated that conflict can be prevented by taking prompt actions
by addressing the issues. The negotiation that help for organization to improve conflict between
people because they are properly communicate with other to resolve the issues between them.
Conflicts can be managed and avoided by taking necessary steps. Such practice of
identifying and handling the issues fairly is called conflict management.
It is said that issues occurs if different minds are working together. People who know how to
resolve conflict are required in an organization. There are basically five styles presented by
(Caputo, Ayoko, & Amoo, 2018) to manage conflict that are: accommodating, avoiding,
collaborating, competing, and compromising.
In accommodating strategy, a manager needs to cooperate with team. In avoiding one must
simply avoid the main issue for the conflict. In this strategy manager or the employee who is
having a conflict just suppose that issues will resolve on their own. This strategy might be
effective if the employees want space, but it can also be defective as the issue can escalate if not
discussed (Maiti & Choi, 2018). Collaborative strategy refers to integrate ideas and use them
effectively to resolve an issue. The aim is to find an optimal solution for the issue. Competing
strategy is a win-lose situation in which one party loses and other wins. This can be effective in
emergency situations. In compromising either side have to let go of the issue and put aside their
4

differences. This can be effective if both the sides have an equally important issue but
collaborating is still the efficient way.
Negotiation
Negotiation is a technique through which people solve conflict (Pauly, Scherer, & Palazzo,
2015). Negotiations are an essential part of the organization. In this process arguments and
disputes are avoided by compromising and mutual agreement. In any conflict or disagreement,
the entrepreneur wants the best possible outcome. Since the aim is to reach a constructive
outcome, entrepreneur must negotiate and reach a mutual agreement that is beneficial for the
company. It involves a sensible discussion on which both the parties accept the results (Zhu &
David, 2018). In this method both the parties try to persuade each other to accept their solutions
and come on the same page to find an optimal solution on which everyone agrees. The method of
negotiation involves various stages which include: preparations, clarification of goals,
discussion, negotiate to achieve a win-win result, agreement on a mutual decision and
implementation. It is the responsibility of the higher management to resolve issues of employees
working in the lower levels. (Lu, Kong, Ferrin, & Dirks, 2017) Resolving issues by negotiation
proves helpful as negotiation is a win-win proposal and employees often wants to put their
demands and claims forward.
Importance of Negotiation and Conflict Management for Business
Conflicts is a part of the working environment. Conflict arises when there are employees with
different state of minds are working together and this happens in every organization. The conflict
management is required in all organizations as conflicts can happen anywhere in any situation
even on small things like borrowing a pen and not returning it afterwards. Resolving issues is not
5

an easy task, the person resolving the issue have an open mind and must not be biased.
Understanding the issue and communicating it effectively is the key to solve a conflict (Broome
B. J., 2017). Negotiations can be used to solve a conflict as negotiations include mutual
agreement on which both the parties will agree and proceeds towards a productive outcome.
Conflict management and negotiations go hand in hand as both the techniques try to solve an
issue among employees. Conflicts can arise at any level and it needs to be resolved as to avoid
any quarrel. Managers need to resolve issues by negotiation.
Impact of Negotiation and Conflict Management on the Business
Conflict can have a negative impact on the organization, especially on its productivity. Managers
need to be trained to resolve conflict as it is important for the productivity. Conflict management
have a positive impact on the organization as it increases the productivity by resolving issues of
the employees. When issues are resolved, it strengthens the relationship between the employees
and the organization (Wong, Wei, Wang, & Tjosvold, 2018) . Negotiation is also technique to
resolve issues. Negotiations are often made on a higher level and coming to a mutual decision to
have a win-win situation. Negotiation and conflict management are two important factors of the
organization which can satisfy the employees and management. Any organization which has
conflict issue needs to work on their management as those issues.
It has been stated that conflict is intra organization issue. This means it occurs between
management, employees, teams, etc. Generally, this type of conflict occurs due to mis
communication. Thus, in this managers and employees are highly involved.
6

Research Method
Introduction
The research methodology is an important part of the study that highlights the method that has
been used in the following study in hand. The succeeding section of the study has highlighted the
research design, philosophy, and approach of the study. Moreover, the section has also identified
the tools of analysis for following study. The focus group interview has identified that conflict
management has been regarded as highly essential for organization due to the fact the conflict is
inevitable and organization.
Research Design
The research design refers to the data extraction method that has been used in the study. The
following study has been designed to collect the responses from the respondents through survey
questionnaire whereas, the study has also been carried out using the secondary sources of
literature and other major sources for gaining the qualitative data. Hence, the following study has
used the mixed methods that have included the aspects of both qualitative and quantitative data.
Data Collection Method
This method is process of collecting data and information through reliable and authentic
sources. It enables in obtaining precise and accurate info. Basically, there two common methods
that are primary and secondary. In primary first time data is gathered through survey,
questionnaire, etc. In secondary, data is gathered from sources like previous articles, journals,
etc. Here, primary method is used to gather data through questionnaire (Creswell & Creswell,
2017).
7

Sample Size and Target Population
For present study the population selected is employees who are working in construction
companies. The sample size taken is 50 employees working in construction companies and the
data has been collected from them through questionnaire.
Results from Focus Groups
The researcher has carried out interviews with 3 managers representing different professionals.
The researcher has not disclosed the identity of the respondents to maintain anonymity. Thematic
analysis has been used by the researcher for analyzing the responses that has been received from
the professionals.
8

Data presentation
Conflict issues and its Impact on Business
One of the respondents answered,
“In my opinion conflicts reasons has to be identified so that root cause of problem is determined
and solved. Thus, it is necessary to find out those reasons.
The focus group interview has identified that conflict management has been regarded as
highly essential for the organization due to the fact the conflict is inevitable and organizations
must have a mechanism through which conflicts can be de-escalated. The literature has also
supported this notion. The organizations must have an effective management process for
pertaining conflicts due to the fact that conflicts cannot be avoided and lack of conflict
management might hinder business performance (Welford, 2016). Therefore, the findings of the
research have been justified by the existed literature.
One of the respondents said,
“Conflicts may occur due to misunderstanding or any other reason. It helps in solving that issue
and finding out area of impact.”
The findings of the focus group interview have also determined that the organizations are
highly required to have an ability to understand the concerns of the parties. It can also impact the
overall business performance as if the conflicting parties are employees of the organization, the
management must have to ensure that their concerns are being equally addressed. It has been
supported by the literature as well. It has been identified that conflict management is highly
significant as the employees and other organizational members often have a difference of
opinions which can lead towards conflict; therefore, the conflict management is essential to fairly
consider the concerns and managing them by a channel of communication, dialogue, and
9

discourse (Mamic, 2017). Therefore, the findings of the research have been justified by the
literature found.
One respondent said,
“By identifying issue strategies can be developed to solve it. Also, it enables in minimizing its
impact and increasing employee performance.”
It is analyzed from interview that companies need to identify reason for issue so that accordingly
strategy is developed. With this impact is minimized and business efficiency is maintained.
There is effective communication between staff and manager.
Negotiation and Stakeholders’ Interest and Impact on Business
One of the participants from the focus group stated,
“Negotiation is the major factor which is associated with influencing other people to do what we
want them to do with effective dialogue. in my opinion, is essential for the organization to
demonstrate that the final decision will be in their best interest” (Pauly, Scherer, & Palazzo,
2015)
The negotiation is the art of influencing the stakeholder by stating their best interest in any
decision making process. It is also significant for making the stakeholders understand their
interest while keeping organizations’ own strategic objectives intact (Grant, 2016). In this way,
the management is responsible for stating that the stakeholders’ interest of the conflicting parties
in a manner that leads towards higher performance. The primary findings from the focus group
interview have also provided the notion that if stakeholders’ interest is being mentioned by the
management; they will tend to perform better and in the best interest of the organization.
One of the respondents said,
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“The business performance is highly dependent upon how we manage to negotiate with not only
our internal stakeholders but also our external stakeholders. Like our customers, our suppliers
or even other external parties and while engaged in that dialogue we have to consider their
interests and it can then ultimately impact the outcomes of our action and business
performance”
The focus group findings have identified that the performance of the organization is
dependent upon effective negotiation with both the internal and external stakeholders of the
organization. It has been due to the fact that the businesses are in constant dialogue with not only
its internal stakeholders but also external stakeholders which requires an efficient and persuasive
way of dealing at times of decision making or when the conflict arises. It has been supported by
the previous research conducted. It has been identified that organizations must have to have an
ability to negotiate with all the external and internal stakeholders in order to make sure that they
perform in the best interest of the organization (Hunger, Hoffman, & Bamford, 2018). Therefore,
the findings of the research have been justified by the literature findings.
One of respondent said
“If there is low interest of stakeholder on negotiation it highly impact business performance.
This is because stakeholder support in decision making.”
This is analyzed from focus group that stakeholders are closely related to business. They identify
conflict reason and help in solving it.
The main findings of the focus group have revealed that conflict issues have to be identified
so that root cause of problem is evaluated. This enable manager to analyze why conflict has
occurred. Moreover, if reasons are determined that it becomes easy to solve conflict. Moreover,
there is great impact of conflict on business. It results in decrease in employee productivity and
11

affect their behavior. The negotiation is best strategy through which conflict can be solved. Here,
both parties opinions are listened and solved.
Quantitative Analysis
The researcher has carried out survey among the employees who are part of the companies. The
survey has been carried out among 50 survey participants. The survey questionnaire comprises of
two parts as in demographic details and questions linked with the research topic
Correlation Analysis
Correlation analysis is described as the method or the statistical technique for determining the
association between two variables. Different statistical techniques are used to identify how one
variable is associated with another one. It has also been identified in the previously conducted
study that it was found that correlation analysis is commonly used by researchers while
validating their study through statistical tests (Chatfield, 2018). The following study has used
correlation analysis in order to determine the impact of conflict management and negotiations on
business performance.
< Table 3>
The table 4 shows correlation between four variables. By analyzing table, it is identified
that there is significant relationship between conflict arise due to misunderstanding and its
negative impact on business. The P = .659 and .566 which is more than P= 0.05. Moreover, it is
identified that there is no relation in decrease in employee productivity and conflict leads to
absenteeism. This is because significant value obtained is P= .283 that is less than P= 0.05.
Hence, conflict decrease employee productivity but it does not lead to absenteeism.
12

Regression Analysis
<Table 1>
From table 1 it can be analyzed that the significant value obtained is P = .875 which is
more than P= 0.05. So, null hypothesis is accepted which means there is positive relationship
between reasons to identify conflict and its negative impact on business. Thus, when conflict
occurs it highly impact on business performance. Therefore, impact of conflict depend on what is
the reason behind it.
<Table 2>
From table 2 it can be analyzed that the significant value obtained is P= .823 which is
more than P= 0.05. Thus, there is strong relationship between impact of conflict and employee
behavior. It means that due to conflict employee behavior is impacted to a great extent. Hence,
conflict impact on any particular area of business. It leads to unethical behavior among staff.
13

Discussion
Conflict management is highly significant to identify the main causes of the conflict and
managing it sensibly, efficiently and fairly so that higher business performance could be
achieved. It is due to the fact that the managers are responsible for achieving higher
organizational performance whereas their effective decision-making process can be hindered if
the conflicts within and outside the organization are escalated. Therefore, the findings of the
research paper have identified that managers need to resolve conflict so that its impact is
minimized.
The conflict in any organization is inevitable; the main causes of the conflict are
difference of opinions, ideas, knowledge and decision making approach. Therefore, for managers
working in construction industry, it is highly important to find out root cause of conflict. The
primary findings of the research article have also opined that reasons for conflicts is highly
essential for the organization to consider because it can impact the overall business performance.
From the study it is found that many employees though that conflict management is
essential for organization as it helps in identifying issues and problems faced by employees. It is
evaluated that lack of conflict hinder organization efficiency. Moreover, through correlation it is
stated that there is strong significance relationship between reasons for conflict and its negative
impact on business. Furthermore, conflict impact on particular area of business and hamper
employee behavior. The value is P= .823 that is more than P= 0.05.
As per discussion, it has been justified through literature review to understand about that
Negotiation is an essential part of the organization. In this process arguments and disputes are
avoided by compromising and mutual agreement. During confliction, Employee or individual
14

wants the best possible outcome for the issue or for the company or organization they represent.
On the other hand, it also analyzes the question data collection method to find out the accurate
results or outcome through SPSS tool which gathered information about negotiation issues that
how it impacts on the organization.
Alongside it, negative impact of conflict leads to absenteeism and decrease in employee
performance. Due to this their behavior is also impacted. The relation between management and
employee is impacted. Moreover, it affect on organization culture as well. There can be various
reason of conflict like poor communication, work culture, unfair treatment, etc. However, it may
occur between managers, staff, etc.
Empirical research- Conflict Management Methods of Managers: An Empirical Study of the
Turkish Tourism Industry: By Muharrem Tuna and Faith Turkmen 2014
15

Conclusion and recommendation
Based on the accumulated findings of the following study, it is summarized that business
in construction industry needs to identify causes of conflict. This is because it enables them to
find root cause and reduces its impact. Beside this, there is negative impact of conflict on
business. This is because it does not affect one particular area but also on employee performance.
Moreover, another impact is increase in absenteeism. A conflict can arise due to
misunderstanding or miscommunicate as well. So, it also leads to impacting employee
productivity. In addition, major reason due to which conflict occur such as poor behavior,
communication, etc. Moreover, it has resulted that the conflict issues is one of the essential parts
of the organisation that needs to be identified and solved to ensure the higher organisational
performance and productivity.
It can be recommended that the entrepreneur should evaluate entire situation and then
only take solve conflict. Also, first of all causes of conflict can be identified so that direct action
is taken to resolve it. Furthermore, policy should be made so that in future proper action can be
taken against employees.
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Appendices
Appendix 1: Questionnaire
What are the reasons for conflict and how it impacts on business?
Name:
Gender
 Male
 Female
Age
 25-30 years
 31-36 years
 37-42 years
 43 years and above
Please rate your responses by  the value that you think is more appropriate:
Strongly Disagree Disagree Neutral Agree Strongly Agree
1 2 3 4 5
Questions 1 2 3 4 5
Conflict issues
1. The reason for conflict needs to be identified to find
out root cause of problem
20

2. The conflict may arise due to misunderstanding as
well
Impact of conflict
3. There is negative impact of conflict on business
4. Conflict impact on any particular area of business
5. There is decrease in employee productivity
Business Performance
6. The conflict leads to absenteeism.
7. The conflict hamper behaviour of staff as well.
Appendix 2: Focus Group Interview Questions
- How in your opinion Conflicts impact on business?
21

- Which conflict management strategy, in your opinion, is more appropriate
and why?
- Do you think that business performance can be effectively increased by
collective bargaining? If yes, then why?
Tables
Table 1. Regression analysis
Model Summaryb
Model Change Statistics Durbin-Watson
df2 Sig. F Change
1 48a .875 1.464
a. Predictors: (Constant), reasonforconflictneedstobeidentifiedtofindrootcause
b. Dependent Variable: Thereisnegativeimpactofconflictonbusiness
ANOVAa
Model Sum of Squares df Mean Square F Sig.
1
Regression .060 1 .060 .025 .875b
Residual 115.220 48 2.400
Total 115.280 49
a. Dependent Variable: Thereisnegativeimpactofconflictonbusiness
22

b. Predictors: (Constant), reasonforconflictneedstobeidentifiedtofindrootcause
Coefficientsa
Model Unstandardized Coefficients Standardized
Coefficients
t Sig.
B Std. Error Beta
1
(Constant) 3.040 .551 5.513 .000
reasonforconflictneedstobeid
entifiedtofindrootcause .024 .155 .023 .158 .875
a. Dependent Variable: Thereisnegativeimpactofconflictonbusiness
Table 3 Regression
Model Summaryb
Model Change Statistics Durbin-Watson
df2 Sig. F Change
1 48a .823 1.581
a. Predictors: (Constant), Conflictimpactonanyparticularareaofbusiness
b. Dependent Variable: Theconflicthamperbehaviourofstaffaswell
ANOVAa
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Model Sum of Squares df Mean Square F Sig.
1
Regression .096 1 .096 .050 .823b
Residual 91.124 48 1.898
Total 91.220 49
a. Dependent Variable: Theconflicthamperbehaviourofstaffaswell
b. Predictors: (Constant), Conflictimpactonanyparticularareaofbusiness
Coefficientsa
Model Unstandardized Coefficients Standardized
Coefficients
t Sig.
B Std. Error Beta
1
(Constant) 2.756 .469 5.879 .000
Conflictimpactonanyparticula
rareaofbusiness -.032 .142 -.032 -.225 .823
a. Dependent Variable: Theconflicthamperbehaviourofstaffaswell
Table 4- Correlation analysis
Correlations
conflictmayarise
duetomisunderst
andingaswell
Thereisnegativei
mpactofconflicto
nbusiness
Thereisdecrease
inemployeeprod
uctivity
conflictmayariseduetomisund Pearson Correlation 1 -.249 .083
24

erstandingaswell
Sig. (2-tailed) .081 .566
N 50 50 50
Thereisnegativeimpactofconfl
ictonbusiness
Pearson Correlation -.249 1 .064
Sig. (2-tailed) .081 .659
N 50 50 50
Thereisdecreaseinemployee
productivity
Pearson Correlation .083 .064 1
Sig. (2-tailed) .566 .659
N 50 50 50
Theconflictleadstoabsenteeis
m
Pearson Correlation .311* -.016 .283*
Sig. (2-tailed) .028 .913 .047
N 50 50 50
Correlations
Theconflictleadstoabsentee
ism
conflictmayariseduetomisunderstandingaswell
Pearson Correlation .311
Sig. (2-tailed) .028
N 50
Thereisnegativeimpactofconflictonbusiness
Pearson Correlation -.016
Sig. (2-tailed) .913
N 50
Thereisdecreaseinemployeeproductivity
Pearson Correlation .283
Sig. (2-tailed) .047
N 50
Theconflictleadstoabsenteeism Pearson Correlation 1*
Sig. (2-tailed)
25

N 50
*. Correlation is significant at the 0.05 level (2-tailed).
26