A Study on the Positive and Negative Effects of Conflict in Financial Performance of Channel Partners with Work Relationship As A Mediator

Abstract

Conflict in the workplace is usually viewed with a negative connotation. Though there are different classifications of conflict depending on its nature, managers generalize that conflict hampers the working relationship and financial performance of the organization. This research paper focuses on grouping various types of conflict and their relative impacts on financial performance in B2B channel environment. The study also focused on assessing the role of work relationship as a mediating variable using SPSS process macros. A sample of 262 respondents was recruited via online and field visits among industrial pump distributors across India. Industrial pump distributors have been considered in this study, as they have their vested interest which is different from the manufacturer's objective, leaving a potential conflict environment. The findings of the study conclude that cognitive conflict results in positive financial outcomes, whereas affective conflict results in a negative financial outcome. Process conflict on its own does not have either positive or negative impacts. Moreover, work relationship acts as a full mediator between cognitive conflict and financial performance, whereas it acts as a partial mediator between affective conflict and financial performance. Hence, managers of channel partners need to encourage cognitive conflict and discourage affective conflict in their workplaces to have a constructive financial output. They also need to give special attention to the work relationship between the channel partners to have healthier conflict.