Conflict Management and Negotiation Strategies in Entrepreneurship

This report investigates the crucial role of negotiation and conflict management in entrepreneurial ventures, focusing on their impact on business performance. Employing a mixed research design, including focus group interviews, the study identifies the significance of conflict management for organizations. The research reveals a positive relationship between organizational performance and conflict management strategies such as compromise, collective bargaining, and accommodation, while strategies like domination and avoidance have negative impacts. The report recommends that managers develop effective conflict resolution strategies. It examines negotiation behavior, major conflict causes, negotiation methods, and appropriate conflict management strategies, particularly within the construction industry. The literature review covers conflict management styles and negotiation techniques, emphasizing the importance of effective communication and mutual agreement in resolving disputes and achieving optimal outcomes for businesses. The study aims to assist managers in enhancing negotiation skills and developing effective conflict resolution strategies, ultimately improving organizational performance.

HOW ENTREPRENEURS NEGOTIATE AND THE IMPACT OF NEGOTIATION AND
CONFLICT MANAGEMENT ON THE BUSINESS
Abstract
Despite of remarkable improvement on conflict management through the implementation
of various approaches across the world, conflicts issues on business are still significant in term of
a consistent high number of work-related conflicts in the business sector according to recent
statistics from the industries. The conflicts are inevitable part of an organization but what is
important is how the organization determines the root cause of the conflicts and manages them
effectively. The study investigates the negotiation behaviour of the entrepreneurs with focusing
on how negotiation and conflicts influence the business. A mixed research design adopted for
this research. 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.
Study objectives - Conflicts are inevitable part of an organisation. The way an organisation
determines the root cause of the conflicts and manages them is more important. This study aims
to investigate the implementation of conflict management strategies to minimise conflicts in the
construction industry.
Methodology/approach- A qualitative research design adopted for this research. 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.
Findings - The research results of Spearman analysis show that the there is a positive relationship
between organisational performance and conflict management strategies such as compromise,
collective bargaining, and accommodation, whereas other conflict management strategies such as
domination, competition, and avoidance have the negative impact on the organisational
performance.
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Recommendations – This study recommend that managers must resolve conflict in order to work
in effective way. For this they must develop strategies to resolve conflict in proper way.
Originality/value
The program of research described and extended in this paper is an attempt to develop an
integrative model of adaptive mediation, which can ultimately enhance the critical link between
mediation research on the one hand and mediation practice on the other.
Practical Implication – The findings of the paper can contribute to the body of knowledge by
providing the conceptual approach for conflict management in construction industries to inform
future practice and research at a strategic and tactical level.
Keywords: Conflict management, Business, negotiation, Impact, Analysis
Introduction
The concept of conflict management has been observed in the business world for a long time and
the managers are working to reduce the impact of conflicts on the overall project or the business.
The conflicts in the team arise with the presence of two or more individuals working in an
organization. The research is aimed to identify the impact of conflicts on the overall business
within the entrepreneurship. Several researchers have explored the impact of conflict
management on the businesses that may damage the reputation of the organization as a whole
(Cascio, 2018). The study in hand has observed the impact of negotiation and conflict
management on the business with respect to the overall organizational performance and the
business profitability. It is necessary for the managers to carry out the conflict management and
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to have the good negotiation skills that may reduce the chances of conflicts and resolve the
emerging issues in the real time.
The following study has mainly highlighted the aspects of conflicts in the construction
industry that may cause a disturbance in the overall project. Moreover, it has provided with the
relationship between conflict management strategies that could secure and improve the
organizational performance. Additionally, the study has emphasized on developing the strategies
that can resolve the conflicts in the business. The study of (Kerzner, 2017) as highlighted some
of the various ways in terms of interactive and non-interactive conflict management strategies
that can assist the managers to resolve the conflict management issues and resolve the issues
within the team members of any project in the business.
Conceptual Background
Conflict among the employees is very common and develops the complex issues within the
business and its operations. (Lu, Kong, Ferrin, & Dirks, 2017) provided with the arguments that
the conflicts between the employees can be increased at a higher level if they are not resolved
within the current time. The study of (Caputo, Ayoko, & Amoo, 2018) has provided with the
significance of the issues and conflicts in the employees in the organization that requires
effective techniques and procedures for the resolution of these issues. Additionally, (Nicholas &
Steyn, 2017) have argued that the conflicts have a high negative impact on the employees in
terms of their satisfaction and organizational performance. It is essential for the management to
resolve the issues and develop effective techniques for the higher job satisfaction of the
employees that can increase the organizational performance as a whole according to the study of
(Bryson, 2016).
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Research Problem
The significance of conflicts within the organization has been observed for a very long time that
is creating hurdles and has been imposing negative results on the organizational performance.
Frequent agitation by workers for enhanced working conditions and several other interests have
resulted in a decline in performance. According to the study of (Caputo, Ayoko & Amoo, 2018)
negotiating is associated with the culture, which affects the directions in which the person
behaves during negotiations. Therefore, it is necessary to comprehend the culture of the
entrepreneurs for understanding their negotiation and conflict management strategies. Thus, this
study is set to provide empirical evidence and contribute by enhancing the quality of evidence
for a positive relationship between the impact of negotiation and conflict management skills of
entrepreneurs on business performance.
Aim of the Study
The aim of the current research is to assess the impact of negotiation and conflict management
on the business including the following objectives.
 To analyze the major causes of conflicts in the industry.
 To investigate the ways of negotiation by managers in the businesses.
 To analyze the impact of negotiation and conflict management on business.
 To identify the most appropriate conflict management strategies in the industry.
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Research Questions
The research questions of the study have been mentioned below that are aimed to be answered in
the following study.
- What are the major causes of conflicts in the industry?
- What are the ways of negotiation by managers in the businesses?
- What is the impact of negotiation and conflict management on business?
- What are the appropriate conflict management strategies in the industry?
Rationale of Study
The following study has been designed to identify the negotiation behaviour of the managers that
can assist in resolving the conflicts and issues in the business. The study has focused on the
comparison of the small and medium-sized organization for gaining the importance of conflict
management. Moreover, the study has focused on developing the strategies that can reduce the
impact of conflict management on the overall organizational performance (Salacuse, 2017). The
study has been formulated to assist the managers in developing the effective negotiation skills for
the conflict resolution. Likewise, it is aimed to identify the major causes of conflicts within the
business that could gain higher organizational performance.
Significance of Study
The study is highly significant for investigating the major causes and reasons for the conflicts
among the team of an organization that may create a hurdle for the overall organizational
performance. The strategies that have been identified in the following study for conflict
management has a huge impact towards the creation of better environment and overall
organizational performance (De Dreu, Kluwer, Euwema, & Vegt, 2017). The study is highly
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essential for the managers to develop higher negotiation skills for the effective practice of
conflict management. The collection and analysis of the primary data collected from the
entrepreneurs have added value to the overall study and has provided with their views and
remarks regarding the dependent and independent variables of the following study (Broome B.
J., 2017).
Literature Review
Conflict Management
Conflicts begin when differences between the opinions and views start leading towards
arguments and quarrels between different people with different state of mind. There can be
multiple reasons and sources for conflicts in a workplace which includes alterations of views,
different beliefs, different ideas, communication gap, dissatisfaction with the conditions of the
work, dissatisfaction with the environment of the workplace, excessive load of work, lack of
appreciations, unfair treatment with the employees, misunderstanding among employees,
differences between personalities etc. cultural gap may also serves as a reason for conflict
(Caputo, Ayoko, & Amoo, 2018) . There can be many reasons, but the conflict can be on
anything ranging from small to big incident.
The main reason conflict leads to arguments and then to quarrels is that conflict is often
hidden and it is not expressed freely in the environment. Hiding conflict is damaging as the
issues if not addressed or discussed, it may escalate the conflict. Gossiping, backbiting is some of
the factors from which the conflict may increase. According to (Masuda & Kostopoulos, 2016)
conflict can be prevented by taking prompt actions to the conflicting issues and by addressing the
issues first place.
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Conflicts can be managed and avoided by taking necessary steps. Such practice of
identifying and handling the issues sensibly, rationally, efficiently and fairly is called conflict
management. It is understandable that issues will take place if different minds are working
together and in a business or working environment conflicts are a natural part. People who
understand the issues and judge them neutrally and know how to resolve them are needed in an
organization. There are basically five styles presented by (Caputo, Ayoko, & Amoo, 2018) to
avoid and manage conflict which is: accommodating, avoiding, collaborating, competing, and
compromising.
In accommodating strategy, a manager needs to cooperate with the team to a higher degree.
This may result in going against manager’s own beliefs and views but this style is effective if
cooperation and effective solution are presented. 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. 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 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 settle their differences (Pauly, Scherer, &
Palazzo, 2015). Negotiations are an essential part of the organization. In this process arguments
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and disputes are avoided by compromising and mutual agreement. In any conflict or
disagreement, the employee or the individual wants the best possible outcome for the issue or for
the company or organization they represent. Since the aim is to reach a constructive outcome,
individuals must negotiate and may reach a mutual agreement that leads to a certain outcome
which can be 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. Resolving issues by negotiation proves
helpful as negotiation is a win-win proposal and employees often wants to put their demands and
claims forward. By negotiating among the employees, management also fulfils their
requirements and also satisfy the employees.
Importance of Negotiation and Conflict Management for Business
Conflict can be in any workplace or organization as it the 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. Conflicts are good in a way as when an individual is having a
conflict with someone or with something; it means that individual contains an opinion of his/her
own which is a good thing but it can escalate and result in a bad situation if not discussed or
addressed properly. The practice of conflict management is necessarily 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. Companies need managers who can understand
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the situations and acts accordingly. Resolving issues is not an easy task, the person resolving the
issue have a neutral mind and must not be biased. Understanding the issue sensibly and
communicating it effectively is the key to solve a conflict (Broome B. J., 2017). Negotiations can
be made to avoid or to solve a conflict as negotiations include mutual agreement on which both
the parties will agree and proceeds towards a productive outcome. Negotiation can prove
effective if both the parties listen to the situation with open minds and act to resolve the issue and
not try to prove themselves right. 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 very bad impact on the organization, especially on its productivity as by
having conflicts, employees may feel disturbed and might not work effectively. Managers need
to be trained in resolving the conflict as it is important for the productivity. Conflict management
can 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 (Grant, 2016) As employees may feel confident and it also
increases their job performance (Wong, Wei, Wang, & Tjosvold, 2018) and they develop a state
of trust in the organization that the organization is paying attention to their issues and problems.
Negotiation serves as another factor to resolve issues and affect the employees positively and
indirectly having an impact on the productivity. Negotiations are often made on a higher level
like finalizing business deals and coming to a mutual decision to have a win-win situation. But
negotiations can be made on the lower level as well when discussing the contradicting views and
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beliefs of the employees. Negotiation and conflict management are two important factors of the
organization which can satisfy the employees and management and can have a win-win situation.
Any organization which has conflict management issue needs to work on their management as
those issues will prove damaging concerning the development of the company. Employees feel
satisfied when their issues are being addressed and they feel as a part of the organization and this
result in the increment in the confidence level and this increases their efficiency and
effectiveness. Hence, negotiation and conflict management is very much needed especially when
the workforce is diverse relating to different social and ethical backgrounds. It is the need in
today’s time of globalization that companies have to have diverse workforce but it brings various
conflicts regarding their backgrounds. Therefore, the management of the company should be
considerable and sensible enough to cater all those issues.
< Figure 1>
Methodology
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.
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Research Philosophy
The research philosophy represents the philosophical framework of the following study
according to (Veal, 2017). Since the study has been designed on the basis of the mixed
methodology to identify the impact of impact of negotiation and conflict management on the
business the most suitable philosophy to be used is pragmatism.
Research Approach
The research approach refers to the flow of investigation of the study according to
(Giacomantonio, Femke, & Carsten, 2018). Hence, the study has been formulated to investigate
the impact of conflict management and has developed the hypothesis of the study; the researcher
has used the deductive approach for carrying out the following study.
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
The data collection method refers to the medium of collecting data that has been used in the
following study (Creswell & Creswell, 2017). The qualitative data collection methodology is
applied. In this data will be collected from focus groups whereas the study has also gained the
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secondary data for the analysis and meeting the study objectives to assess the impact of
negotiation and conflict management on the business.
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 respondents and the data has been collected from them
through questionnaire.
Research Instruments
The research instrument that has been used in the following study is correlation and regression
using SPSS tool to determine the nature of the relationship and gauge the impact of negotiation
and conflict management on business performance. The analysis has been performed through the
SPSS software for getting the most significant results of the following study. Moreover, the
analysis of qualitative data has been done through the process of thematic analysis. If SPSS was
used in other studies it would have been reliable in generating precise results.
Limitation of Study
The researcher has faced limitation to get the access to the managers in the industry and to
persuade them to take part in the research process by giving their valuable responses. Moreover,
the biggest limitations were that of the cost and time of the study that has been allocated for the
study.
Ethical Consideration
The study that has been carried out is ensured to be unique and includes the most appropriate
information that has been collected from the primary and secondary sources. Moreover, the data
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