Management Theory Essay – Conflict is a state of mind. It has to be perceived by the parties involved. If two or more parties are not aware of a conflict, then no conflict exists. This broad definition encompasses conflicts at different levels within an organisation. Conflicts are based upon differences in interest and values, when the interests of one party come up against the different interest of another. Parties may include shareholders, managers, departments, professionals and groups; while conflict issues can include dividends, control and wage levels.