Business and Technology · Sources of conflict and techniques for conflict resolution

Conflict Management, Negotiation and Ethical Dealing in the Workplace

Updated 11 October 2026 · Fact-checked

Conflict management is the manager's job of preventing disputes and resolving them fairly. You do it through open communication, early action, negotiation (the parties bargain directly), mediation (a neutral third party helps) and ethical handling. In BT questions, match the technique to the situation and aim for outcomes both sides can accept.

Understand Conflict Management, Negotiation and Ethical Dealing

Conflict is a disagreement where people or groups see their goals, interests or values as opposed. It occurs between individuals, within teams, between departments and between the organisation and outsiders. It is not always bad. Handled well, it can bring new ideas. Handled badly, it harms morale, productivity and relationships.

The manager has two jobs. The first is prevention: set clear roles and objectives, share information openly, be fair in allocating resources and rewards, and spot early warning signs such as withdrawal, gossip or rising tension. The second is management and resolution: step in at the right time, understand each side's real interests, and choose a suitable approach.

There are several approaches. Negotiation is where the parties discuss and bargain to reach an agreement. In win-lose (distributive) bargaining, one side's gain is the other's loss. In win-win (integrative) bargaining, the parties look for solutions that meet the key interests of both. Mediation brings in a neutral third party who helps the parties talk and reach their own agreement but does not impose a decision. Arbitration is different: the third party decides, and the decision is usually binding. A manager may also simply use authority and decide, which is quick but can leave resentment.

How the manager acts matters as much as the technique chosen. Ethical dealing means being honest, impartial and respectful, listening to all sides, keeping appropriate confidentiality, avoiding favouritism and following company policy and the law. This links to the ACCA fundamental principles of integrity, objectivity, professional competence and due care, confidentiality and professional behaviour. Unfair or secretive handling can create new conflict and legal risk.

Good communication runs through everything. Active listening, clear and calm language, focusing on the issue rather than the person, and recording agreed actions all help prevent a disagreement from escalating.

Key formulas to remember

Win-win (integrative) negotiation: Focus on interests, not positions → generate options → agree using fair criteria; Use this when the relationship matters and there is room for joint gain.
Win-lose (distributive) negotiation: Fixed resource: one side's gain = other side's loss; Typical for one-off price haggling. It can damage long-term relationships.
Mediation vs arbitration: Mediator helps parties agree; arbitrator decides; Mediation is usually voluntary and non-binding in its outcome unless the parties agree. Arbitration decisions are usually binding.
Manager's conflict process: Identify → understand causes → choose approach → agree actions → follow up; A simple structure for any scenario question.
Ethical handling checklist: Honest, impartial, confidential, fair, documented; Link to integrity, objectivity and confidentiality.

How to solve Conflict Management, Negotiation and Ethical Dealing questions

Use this method for scenario questions on managing a conflict or choosing a resolution technique.

1Read the scenario and identify who is in conflict: individuals, team members, departments or outside parties.
2Find the likely cause, such as unclear roles, scarce resources, personality clash or poor communication.
3Note the key facts: how serious it is, whether the relationship must continue, and how urgent a decision is.
4Match the technique: direct discussion or negotiation for minor issues, mediation where talks have stalled, arbitration or authority where a decision is needed.
5Check the options for ethical problems such as favouritism, breach of confidentiality or pressure on one side.
6Choose the option that deals with the cause, protects the relationship and is fair, then check it against the exact wording of the question.

Quickest way: Cause, relationship, fairness check

When to use it: Multiple choice and multiple response questions where you have under two minutes.

Underline the type of conflict and the key word, such as neutral, binding, relationship or confidential.
Eliminate options that are unfair, one-sided or ignore the cause.
If the question says neutral third party helping the parties agree, think mediation. If the third party decides, think arbitration.
If both sides' interests are met, think win-win. If one gains at the other's expense, think win-lose.
For multiple response, select exactly the stated number and avoid options that are extreme.

Common mistakes in Conflict Management, Negotiation and Ethical Dealing

Confusing mediation with arbitration
Both involve a third party, so they sound alike.
Fix: Remember: the mediator helps, the arbitrator decides.
Assuming all conflict is harmful
Everyday use of the word is negative.
Fix: Recognise that conflict can be functional when it leads to better ideas, but needs managing.
Treating negotiation as always win-lose
Students think of price haggling only.
Fix: Distinguish distributive from integrative bargaining and link win-win to continuing relationships.
Recommending that the manager simply uses authority
It looks fast and decisive.
Fix: Say it may resolve the issue quickly but may not address the cause and can cause resentment.
Ignoring ethics in the answer
Students focus only on technique.
Fix: Add impartiality, confidentiality and fair process, and avoid favouritism.
Giving general advice that ignores the scenario
Rushing to write learned lists.
Fix: Tie each point to the facts given, such as the cause and who is involved.

Worked examples

Example 1

Two team members dispute who should lead a client project. They have stopped speaking to each other and the deadline is close. Their manager wants a solution that helps them continue to work together and wants them to own the outcome. Which approach is most suitable? Options: A) Mediation by a neutral person; B) Dismissing both; C) Giving the lead to the more senior person without discussion; D) Ignoring it until the deadline passes.

Show the solution

The cause is a disagreement over roles and the communication has broken down.
The manager wants the relationship to continue and wants the parties to own the outcome.
Mediation uses a neutral person to help the parties reach their own agreement, so it fits.
Dismissal is extreme, imposing a decision gives no ownership, and ignoring the problem lets it escalate.

Answer: A) Mediation by a neutral person.

Example 2

A manager is resolving a dispute between two departments over a shared budget. Describe two ways the manager can negotiate a win-win outcome and one ethical point to observe.

Show the solution

Win-win means finding a solution that meets the key interests of both departments.
Method one: ask each department to explain its real needs, such as essential projects, rather than just demanding a larger share. This reveals where trade-offs are possible.
Method two: generate options together, for example phasing spending or sharing some resources, then agree using fair criteria such as business priority.
Ethical point: the manager must be impartial and treat both departments openly, without favouring a friend or hiding information.
Record the agreement and follow up so that both sides know what was decided.

Answer: Explore underlying interests, generate joint options and agree on fair criteria. The manager must act impartially and honestly.

Exam tips

Know the exact definitions of negotiation, mediation and arbitration, as objective tests often rely on the difference.
Read for clues such as neutral, binding, relationship or urgent, as these point to the technique.
Pick the option that addresses the cause and is fair, not the harshest or fastest.
In multiple response questions, select exactly the number stated and check each option separately.
Link conflict handling to ethics: impartiality, honesty and confidentiality.

Practice questions from Sources of conflict and techniques for conflict resolution

Conflict Management, Negotiation and Ethical Dealing: frequently asked questions

What is the manager's role in conflict management?

The manager prevents conflict by setting clear roles, communicating openly and treating people fairly. When conflict occurs, the manager identifies causes, chooses a suitable approach and follows up. The manager must act ethically throughout.

What is win-win negotiation?

It is an approach where both parties look for a solution that meets their key interests. It focuses on needs rather than fixed positions and works best when the relationship will continue.

What is the difference between mediation and arbitration?

In mediation, a neutral person helps the parties reach their own agreement. In arbitration, the neutral person makes a decision, which is usually binding.

How should a manager handle conflict between team members?

Listen to each person separately, find the cause, and then bring them together to discuss it calmly. Agree actions, record them and follow up. If talks stall, use mediation or escalate.