Whenever two or more people interact, there is a potential for disagreements to occur.  This is true if the association between individuals is related to work or if the association is social. Leonard Neubauer defined conflict or an argument as "a discussion which has two sides and no end."  While conflicts are inevitable, the extent of the consequences of the conflict will be determined to a large degree by the manner in which the individuals cope with the conflict.  Conflict may be defined as lightly as individuals having a difference of opinion. If individuals have a mutual respect of each other's opinions, it would appear that the matter will be resolved with little difficulty.  However, conflict in which tempers flare may not be resolved as smoothly.

Obviously, there are two aspects of conflicts that should be understood in order for the resultant consequences to be minimized.  The first is to understand the causes of conflict. If the causes of conflict are understood, it is possible, in some instances, to avoid the conflict altogether.  Further, if the causes are understood, it is easier to mediate the conflict and minimize any adverse impacts of the conflict.  The second aspect is to deal with the conflict in a mature and sensitive manner.

Before discussing views on the sources of conflict, it should be stressed that conflict in an of itself is not always unavoidable.  Neither is conflict necessarily bad.  In fact, conflict can be the source of personal growth.  It is only when conflict is not handled properly that personal injury or damage (physical or mental) can result.  The objective is then to avoid conflict that gets out of control.

TRANSACTIONAL ANALYSIS

Transactional analysis has been utilized to explain conflict in a variety of settings. Transactional analysis is based on the assumption that individuals act in different ways in different situations.  It is this inner self image that leads one to act in a given manner. Transactional analysis states that there are three types of identification that one can have when relating to others.  These three types of identity are child, adult, and parent.  That is, one can relate to another individual as a child, as an adult, or as a parent.  All individuals, regardless of age, possess these three identities.

The parent identity is one of responsibility.  When acting or relating as a parent, either a critical or nurturing role might be assumed.  The adult identity is more closely aligned with an intellectual being.  When acting or relating as an adult, a more mental, logical, or cerebral level of communication takes place.  The child identity is associated with feelings. Similar to a typical child, actions might be regarded as being either grizzling or free.  Keep in mind that all three identities exist in all beings and that all identities present themselves at different times.

It should be apparent with the existence of all three identities that individuals will act or respond differently in different settings.  A child could very well act as an adult under a variety of circumstances.  Likewise, an adult may encounter situations in which the child within will surface.  It might even be suggested that one is not normal unless all three identities are permitted to present themselves.  Of course, it is also important that the appropriate identity be utilized in the appropriate situation.  The description of the three identities are shown graphically below.
 
 
 
 
 
 
 
 

 
The above diagram illustrates the three identities that one possesses.  One will assume one of these identities when relating to another individual.  It is important that the appropriate identity be used in these interactions.  If one is addressed as a child but responds as an adult, the potential for conflict exists.  One person may talk to another as a parent talking to a child, while the other individual perceives the relationship as being one of one adult talking to another adult.  Again, this presents a strong chance for conflict to result.  In fact, conflict is a strong possibility whenever the perception of the identities of two individuals is not the same for both of the individuals.

According to transactional analysis, conflict generally arises when one party assumes the wrong identity when interacting with another person or persons.  The figure, shown on the following page, is a graphical presentation of how transactional analysis describes relationships between individuals.  As shown in the figure, no conflicts should result when the identities assumed are consistent for both interacting individuals.  Conflict results when the individuals do not have the same perception of their identities.

Transactional analysis can be used quite successfully to understand the source of conflicts in relationships.  In a marriage counseling session, it might be discovered that the husband relates to the wife as a parent relates to a child while the wife relates to her husband as one adult to another.  Conflict in such a scenario appears inevitable.  In a family setting, the oldest child might be addressed as an adult while responding as a child.  Again, conflict will result.  A young boss might be addressed by an older worker as a nurturing parent addresses an adult while the boss might address the same worker as a critical parent addresses an adult.  Conflict is a likely result.  Whenever conflict results, it might be possible to explain it by transactional analysis.
 

Consider the following example:  Jayne is the only child of George Wallet.  Jayne and her father always had a good relationship.  George had a small construction firm and hoped that someday Jayne would help him with the business.  Jayne enrolled at the local university and pursued a degree in civil engineering.  After she graduated, Jayne decided to work for a large construction firm.  She felt that this would broaden her perspectives of how a business might be run.  She was quite successful in the company, but at the age of 34 was convinced by her father to join him.  Since her father would retire in 5 or 6 years, she felt that she had the confidence and experience to take over the family business.  She joined her father's firm and spent the first few months trying to understand the inner workings of the company. Soon she felt comfortable with the situation and started to suggest changes to her father. His response was that "Hey, you learned a lot while working for that big contractor, but this is a small company and we do things different here.  Besides, why change things?  We have always done things this way."  Jayne made several suggestions to her father that she felt would be helpful to the firm.  She invariably got the same response.  Conflict was certain under these circumstances.  George continued to address Jayne as the daughter he had raised.  Jayne thought she should be addressed as the adult she had become.  Furthermore, She felt that her father, where business matters were concerned, should not address her as a father but as another adult.
 EQUITY THEORY

Another explanation of the source of some conflict is presented by equity theory.  We seek equity, but when equity does not exist, conflict will result.  Equity theory, or more properly inequity theory, was advanced by J. Stacy Adams (source: "Toward an Understanding of Inequity", Journal of Abnormal Psychology, Vol. 67, No. 5 (1963), pp. 422-436).  This theory contends that equity for an employee is not a matter of simply receiving an honest day's wage for an honest day's work.   The basis of establishing equity is on a psychological plane and therefore cannot be resolved in as simple terms as wages.

The theory of equity can be applied to any situation in which an exchange takes place.  The exchange need not be in monetary terms, or even in physical or material terms, i.e., the exchange may be on an emotional level.  Whenever any exchange of any type takes place, the perception of inequity by one of the parties is always a possibility.  This inequity will lead to conflict.  The conflict may be minor and present no difficulty in the exchange that takes place, but the conflict could also be of such magnitude that the exchange process comes to a complete halt.

Exchanges take place at all levels in many settings.  In fact, whenever two or more individuals interact some type of exchange takes place.  It could be an exchange that takes place between employer-employee, parent-child, teacher-student, wife-husband, friend-friend, or even a personal exchange with God.  In each exchange, there is a chance for inequity. In very simple terms, equity theory can be explained with the following equation:
 

Where:
 REWARDS self  relates to the benefit received by "self"
 REWARDS other  relates to the benefit received by referent "other"
 INPUTS self  relates to the contribution made by "self"
 INPUTS other  relates to the contribution made by referent "other"

While the formula may seem straight forward, the theory becomes more complex when it is realized that inputs and rewards can be broadly defined.  For example, an individual may regard an input as including the level of educational training attained, intelligence, amount or type of experience, the type of training received, skills possessed, seniority in the firm, age, sex, ethnic background, social status, physical effort expended, personal sacrifices made, inconvenience endured, personal appearance, health, type of automobile driven, etc.  These supposed inputs are regarded as "investments" in the exchange.  Individuals that perceive particular characteristics as contributions or investments will expect to reap a return as a result of that investment.

It must be emphasized that, according to equity theory, the contributions that one makes to an exchange are those which are perceived.  Suppose that two workers work the same number of hours at the same task and accomplish the same amount of production as a result of their efforts.  While we would be inclined to view quite objectively that the two workers should be entitled to the same pay, this may not be the perception of one or even both of the workers.  This inequity may arise when the workers have different perceptions of their contributions.  For example, one worker may be a Protestant and the other a Catholic.  Each worker may perceive that this, in and of itself, would justify a differential in the wages paid. A similar perception may be held by the workers if one is a man and the other a woman. What if the workers are not of the same race?  What if the workers have different ethnic backgrounds?  What if one has a university degree and the other does not?  As stated initially, our rational or objective assessment of the two workers would be that the only real issue in determining their wages should be the amount of their productivity.

Obviously, the issues of race, sex, education, ethnic background, etc. have no real part in the objective assessment.  Herein lies the problem.  The equation, as stated, seems to present the issues very succinctly, but it is the individuals perception that plays a major role in assigning values to the variables in the equation.  Thus, an individual may feel that the wages are inequitable simply because some of the contributions of that individual are viewed as justifying a higher wage.

Inequity can easily arise with the broad perception of the contributions and rewards that may exist.  At the same time, it is natural for individuals to strive for equity.  In fact, this is why the perception of inequity presents problems.  Individuals do not want inequity.  If inequity is perceived to exist, the individual with that perception will try to achieve equity in some manner.  There are many ways that this can be done.  For example, in the case of the workers above, the worker that feels underpaid may try to see if wages could be increased. If this is not deemed feasible, the worker could expend less effort than previously.  The worker could even shift the referent "other" to a different worker.

Note while one of the workers perceived inequity in the exchange that this does not necessarily mean that the other worker perceived any inequity in the exchange.  In fact, the other worker may even have a different referent "other" against which comparisons are made.  For example, the other worker might make comparisons with individuals that live in the neighborhood.  The referent "other" could even be one of "self" at a different point in time.

According to equity theory, any attribute possessed by an individual may become an input, provided that the individual perceives it as being relevant to the exchange.

The rewards that one receives in an exchange can be just as diversified as are the inputs. In the above example, wages were treated as the sole reward in order to focus on inputs. In work settings, wages is often a major reward, but other types of rewards also exist.  For example, the rewards could also be related to intrinsic benefits of a job, seniority benefits, fringe benefits, job status and status symbols, and a variety of formally or informally sanctioned perks.  It may be no small reward to some individuals to have an assigned parking space with a stenciled name, to have a walnut desk and a carpeted office, to have job security as a result of seniority or tenure, etc.

Equity theory is intrinsically related to perceptions and values.  For example, if a worker receives a salary increase, dissatisfaction may still exist if the real desired reward was increased status.
 

The referent "other" may be any person with whom comparisons seem logical to that individual.  For example, a carpenter on a construction job might be expected to use other carpenters on the same project as the referent "other".  The sole superintendent on the same construction job might make comparisons with company superintendents on other projects. The company accountant might make comparisons with what are believed to be the inputs and rewards of other accountants in the community.  The project engineer might make comparisons with a former university classmate.  The lawyer for the company might make comparisons to himself or herself at an earlier age or when employed by a different company.  Comparisons could also be made with one's perception of where one should be at a certain point in life.  Comparisons could also be made with a general perception of a group of people or workers.

With the broad definitions of attributes that can be assigned to inputs and to rewards, it is obvious that accurate quantification of the quotients is not possible.  While formulas seem to lend themselves to objective computation, this is clearly not possible with the formula used for equity theory.  Since the perceptions of an individual are at the root of the theory, it is virtually impossible to guarantee equity in every exchange.  The theory relates to a psychological assessment rather than a logical one.

Note that different cultures will also present different perceptions.  In some cultures, valid inputs include age, education, length of service, and family size, i.e., rewards are not based primarily on productivity in all cultures.

In most cases, inequity is thought to exist when the referent "other" receives greater rewards in relation to the inputs.  Inequity can also exist when the referent "other" receives less rewards in relation to the inputs, i.e., inequity can occur when one feels overpaid.  Of course, it would be suspected that an individual that is overpaid might be more tolerant of the inequity than when one is underpaid.  One could even adjust one's perceptions of the inputs or change the referent "other" in order to achieve greater equity or to minimize the inequity.

It is generally felt that if inequity is perceived, the individual will have a tendency to manipulate and weigh the inputs and rewards so as to maximize that perception.  This will increase the individual's motivation to adopt behavior that will eliminate the inequity entirely.  If the inequity is small, the manipulation might be such as to achieve equity by conducting a reassessment.

If inequity exists, equity will be sought.  A worker may simply increase work effort (inputs) if it is perceived that overpayment currently exists relative to other workers.  Work efforts might be reduced (decrease inputs) if a worker feels underpaid.  The rewards may also be altered if underpayment or overpayment are perceived to exist, but the worker will have less direct control over this.  If inequity, as perceived, is severe the worker may even quit the job and seek other employment.  Of course, if the inequity is severe, the individual could also fabricate a serious distortion of the inputs and rewards so as to decrease the inequity.  This distortion could relate to either the inputs or the rewards of "self" or "other".  Changing the referent "other" will also provide a simple means of attaining equity.
 

Equity theory explains discrepancies that may be perceived between one's inputs and rewards when compared to others.  Understanding the nature of discrepancies that may result helps to provide some insights related to social conflict.  When conflict arises in a work setting, it might behoove supervisors to consider the manner in which the conflict may have arisen.  If inequity is perceived, conflict of some degree will result.  Understanding equity theory will help to address some forms of conflict.