How Businesses Can Handle Internal Disputes
Internal disputes can happen at any business, from SMEs and startups to international organisations with thousands of staff members.
Whether the conflict stems from competing visions among the senior leadership team or simmering frustrations on the office floor, disputes can have a negative effect. They drain time, damage reputations, and disrupt operations.
If you run or manage a business, knowing how to spot problems early and respond constructively could protect the stability of your company and ensure its future growth.
Identifying common internal disputes
Disputes can take many forms. Some can start with an overlooked opinion in a board meeting or a missed payment. Others erupt quickly, especially when values clash or trust breaks down.
Some common issues include:
- Shareholder disputes: These often revolve around issues like share valuations or exit strategies. These can hold up decision-making and affect the growth of the business.
- Employee grievances: Whether due to poor communication, perceived unfair treatment, or management style, these can lead to formal complaints and rising turnover.
- Power struggles: If it’s unclear who is in charge, there can be conflict around decisions that must be made. Alternatively, there may be team members who don’t agree with decisions made by management, and it may be perceived that other people might be a better fit for the leadership role.
Recognising early signs of conflict is vital. Watch for defensive emails or sudden drops in performance. Keeping up with events before anything can escalate means you’ll have more room to resolve matters informally and rebuild relationships.
Implementing effective resolution strategies
When a dispute arises, the way you handle it shapes the outcome. Start by creating space for open, respectful dialogue. Invite each person to explain their view without interruption. Listen carefully and focus on interests rather than positions. This alone can lower tensions and make compromise easier.
If direct conversation stalls or emotions run high, mediation often helps. A trained neutral third party can help everyone understand each other’s concerns and identify shared goals. Mediation works best when both sides want to stay engaged and reach a solution without airing their conflict in court. For example, back in 2021, shoe retailer Clarks called in mediators over strike action taken by staff. This helped avoid legal teams being called in.
Arbitration offers a more structured approach. Here, an independent arbitrator hears both sides and makes a binding decision. It’s faster and less costly than legal proceedings, while still giving a clear outcome. Many businesses now include dispute resolution clauses in shareholder agreements and employment contracts to steer conflicts away from court.
Seeking professional legal assistance
Sometimes, legal guidance becomes unavoidable, especially when disputes grow complex or when you’ve exhausted internal options. If you’re facing deadlock at board level, or if a disagreement involves legal duties under the Companies Act 2006, you should speak with dispute resolution lawyers.
These professionals specialise in resolving commercial conflict. They’ll help you assess your legal position, clarify risks, and choose the right process for resolution. Legal support also ensures you comply with relevant UK laws, such as directors’ fiduciary duties or employment legislation, reducing exposure to claims or penalties.
By handling internal disputes with clarity and professionalism in a calm way, you protect more than just your business’ peace; you secure its future viability and reputation.
