3 Common Sources of Business Disputes

Ideally, business flows smoothly with minimal interruptions. Once a company establishes its presence in a certain niche, daily business operations become somewhat predictable. However, disputes can arise that complicate daily operations and raise questions about the future of an organization. 

Business conflicts can impact a company’s reputation and damage employee morale. There are many potential sources of conflict when running a company, but the three below are among the most common. 

1. Partnership Disputes

It is common practice for those with a new business concept to take on a partner. Their partner can help fund the business or provide industry contacts that make it easier to start your company. 

Partners may find themselves disagreeing about whether each partner fulfilled their promises to the other or about the future of the organization. Partnership conflicts sometimes result in buyouts, or they may result in the company closing down in other circumstances. 

Business partners often need to work assertively to reconnect with one another and improve their business relationship after a disagreement about their arrangements or the company that they run together. Clear contracts can reduce the likelihood of major partnership disputes and can provide a plan for their resolution. 

2. Shareholder Disputes

For larger organizations, taking on shareholders may be part of funding the company’s expansion. Those shareholders may then have differing opinions than entrenched leadership about the future of the organization. 

Shareholder disputes may result in lawsuits and operational disruptions. If those running an organization can’t find a way to cooperate with those who have invested in it, the organization could face complex legal issues. 

3. Disputes With Other Companies

There are many scenarios that might lead to disputes between two separate organizations. Companies may need to negotiate or litigate matters related to a contract breach. 

Other times, there might be allegations of unfair competition and even corporate espionage. Disputes with other businesses can affect a company’s reputation and its market share. Depending on the nature of the dispute, the disagreement could also affect operations. 

Clear contracts, appropriate organizational documents and an understanding of applicable regulations can all go a long way toward helping minimize and resolve business disputes. People in leadership positions may need help evaluating and responding to disputes involving their companies.