Costs of Conflicts and Dispute


 Costs of Unresolved Conflicts and Disputes

It goes without saying that conflict has many costs. The loss of human life is the most obvious one. The twentieth century was the deadliest in all of human history–and the 21st seems to be starting off just as badly. But conflict exacts costs at all levels of society: within businesses and other organizations (schools, churches, government agencies, clubs), within communities, and within families. Although these costs are evident if one pays attention, they are often considered « unavoidable » or « normal, » and are thus overlooked.

One can account for organizational costs in a number of ways.[1] First are the direct costs, including such things as fees paid to lawyers and other professionals for their intervention in the conflict. Second, conflict often has significant productivity costs in terms of the value of lost time to the organization. It diverts worker attention from normal duties. Absenteeism often increases due to conflict. What is more, conflict often reduces motivation and increases turnover. Third, conflict can have continuity costs — namely, it can cause damage to ongoing relationships that wrecks the feeling of community in organizations. Fourth, conflict has emotional costs for those involved.

Despite this, businesses often do not highly value the time necessary to resolve conflict because, at best, it indirectly shows up in the financials. The costs, however, are very real. It is estimated that senior human resource people in Fortune 500 companies spend 20% of their time on litigation and managers spend upwards of 30% of their time dealing with workplace conflict.[2] A more recent study found that managers spend upwards of 42% of their time negotiating agreements to end conflict.[3]

The cost of conflicts and disputes in families is also significant, although it is seldom measured in financial terms. Rather the costs are emotional–damaged relationships, a lost sense of security, fear, anger, and distrust. These costs can be extremely painful in their own right, and they can damage people’s ability to function in other areas of their lives–work, school, and community. When the conflict ends in divorce, the costs can, of course, become monetary as well, as they can if they lead to the need for counseling.

Similarly, disputes and conflicts within communities cause damage to relationships, anger, distrust, lack of a sense of belonging (and hence identity) in the community, stress on community members, and often, poor decisions (or lack of decisions) because the dispute prevents effective decisionmaking from taking place. It can also greatly increase costs of community projects, as actions get delayed, and costs rise.

So Why Not Quit?

Given that the costs of conflict are so high, why do people engage in conflict? Why don’t they say, « enough is enough, » and resolve the conflict as best they can? There are many reasons, which are covered in many of the other essays in this knowledge base. Fundamentally, however, most can be attributed to three reasons:

People underestimate the costs of continuing the conflict, and overestimate their chances of winning.

People know that the conflict is doing harm, but they see no way out.

People know that the conflict is doing harm, but they fear that the costs of resolving the conflict will be even higher (including, perhaps, admitting that you were wrong.)

These problems are all ones that need to be addressed if disputes and conflicts are to be successfully resolved and the costs of those conflicts and disputes controlled.


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