Index IntroductionConclusionWorks CitedIntroductionConflicts are present in every individual during his daily encounters. Furthermore, they can also occur in an individual's professional and personal life. Furthermore, a conflict can be defined as a circumstance that occurs in the life of a human being that has a negative effect on the person and can negatively affect another party. Since conflicts arise in everyone's life, it is their role to ensure that concerted efforts are made in an attempt to eliminate this conflict in the workplace. Similarly, workplace conflicts are resolved to achieve harmony among employees (Booher, 2013). Conflicts tend to occur in businesses and lead to organizational problems in case the conflict is between two workers or a group of individuals in a company. Conflicts in the workplace can occur due to jealousy. An employee of a company can be jealous of the results of another worker and this can lead to the emergence of a conflict between them. Individual goals also lead to conflicts where one person's goals are different from or go against another person's goals. Personality differences can also lead to conflicts in the workplace as not all people are the same and may have personality differences. Status and cultural differences can also be sources of conflict in an organization. Say no to plagiarism. Get a tailor-made essay on "Why Violent Video Games Shouldn't Be Banned"? Get an Original Essay In a business environment, conflict exists between creditors and shareholders. In most companies it is believed that creditors are the principals while shareholders are the agents. There was a conflict of interest between shareholders and creditors and this passed through to the managers. However, conflicts of interest between creditors and shareholders can arise when a company's managers make decisions to value the company's shareholders and ignore creditors (Khan, Iqbal & Hussainy, 2016). This leads creditors to think that they should be in the place of shareholders and that the company should value them and ignore shareholders. Creditors in a company play the role of providing their capital to the company at a fixed interest rate for a certain period of time and the company uses it for the given period as per the agreed terms and conditions. Both creditors and shareholders have a similar claim on the assets and profits that a company has acquired. Priority is given to creditors through the fact that they receive the interest and principal repayments that belong to them. Furthermore, creditors then invest their capital in an attempt to earn a fixed interest and acquire the capital that will be returned to them at maturity. On the other hand, shareholders tend to invest their capital with the aim of maximizing the market price of their shares. This has therefore raised concerns among creditors who believe that their earnings are sufficient to cover fixed payments and principal repayments on time (Sharma & Mehta, 2017). Creditors are not entitled to additional returns from a company's additional risks, but must bear these risks assumed by the company. Therefore creditors oppose these high risks. Some managers of a company tend to invest in a high risk project and if the project is not successful, the creditors suffer losses and purchases may buy back the outstanding shares of the company and sometimes have to borrow funds in an attempt to raise the situation of financial leverage. This favors shareholders and creates a conflict between them and creditors. There are variousways in which conflict between shareholders and creditors can be resolved. The first is that there should be collateral where creditors should request collateral when necessary before granting credit(Terason, 2018). Furthermore, convertibility is also possible. In case the company is unable to pay its debts, it is possible to convert the debt capital into preference shares. The company may also incur monitoring costs. In a company, shareholders are the main active ones while managers are seen as the passive agents. Shareholders are the true owners of the company even if they cannot actively manage the company since they are numerous and located in different geographical locations (Booher, 2013). Furthermore, shareholders cannot actively manage a company as they are considered to lack the skills, expertise and experience required in running a company. Therefore, they participate in the election of a Board of Directors (BoD) which helps in managing the company. The Chief Executive Officer (CEO) is the head of the Board of Directors. Company managers worry about their job security, their personal wealth, their fame, and the benefits they demand from the company. This could lead to potential losses of wealth for shareholders (Terason, 2018). This is, therefore, a reason for conflict between shareholders and managers. Managers find themselves in a situation where they must choose between their personal satisfaction and maximizing shareholder wealth. Agency costs in a company can be defined as conflicts that exist between the company's management and its shareholders. The root of agency costs is believed to be shareholders. Shareholders of integrated firms may face disagreements and fear individually and this may threaten the stability of the firm (Sharma & Mehta, 2017). The agency problem can occur because the company's management achieves its goal at the expense of the company owner's goals. Because managers have more information regarding the company, they can manipulate controversial information within the company to their personal advantage. Therefore, managers may not work hard for the purpose of maximizing shareholder wealth since they only own a small portion of it. Sometimes, because managers want to maintain a good name, they may donate company earnings to charitable organizations. They might also do it for personal satisfaction. They could also take part in the poison pill, which means they could make the company unattractive to other people who could take control of it (Khan, Iqbal & Hussainy, 2016). Likewise, they can be part of Greenmail, which means they can buy shares from an individual for the purpose of trying to gain control over the company. They do all this to avoid a hostile takeover. In an effort to resolve these conflicts, shareholders should agree with the company's management on the decisions that should be made by them. Shareholders could also appoint representatives to act within the company (Booher, 2013). These representatives should always attend meetings held by the company and should provide a weekly report on the results they have obtained from the company. Please note: this is just an example. Get a custom paper from our expert writers now. Get a Custom EssayConclusionIn conclusion, it is evident that conflicts are present in the life of every individual and these conflicts should be resolved. In the workplace, conflicts are common. For example, there is conflict between shareholders and managers of companies and they also exist,.