Table of ContentsIntroductionConclusionWorks CitedIntroductionConflicts are present in every individual during their daily encounters. In addition to this, they can also arise in an individual's professional and personal life. Additionally, 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 lives, it is their role to ensure that they make concerted efforts to try to eliminate this conflict in their workplace. Similarly, workplace conflicts are resolved to achieve harmony among employees (Booher, 2013). Conflicts tend to arise in businesses and lead to organizational problems in cases where the conflict is between two workers or a group of individuals in a business. Workplace conflicts can arise because of jealousy. An employee of a company may be jealous of the accomplishments of another worker, which can lead to conflict between them. Individual goals have also led to conflicts in which one person's goals are different from or conflict with another person's goals. Personality differences can also lead to conflict in the workplace because not all people are the same and may have different personalities. Differences in status and culture can also be a source of conflict within an organization. Say no to plagiarism. Get a tailor-made essay on “Why Violent Video Games Should Not Be Banned”? Get an original essay In a work environment, there is a conflict between creditors and shareholders. Most businesses believe that creditors are the principals while shareholders are the agents. There was a conflict of interest between the shareholders and the creditors and this passed through the management. However, conflicts of interest can arise between creditors and shareholders when a company's managers make decisions to value the company's shareholders and ignore the creditors (Khan, Iqbal & Hussainy, 2016). This leads creditors to think that they should be in the shareholders' place and that the company should value them and ignore the shareholders. The creditors of a company play the role of providing their capital to the company at a fixed interest rate for a certain period and the company uses it during the given period according to the agreed terms and conditions. Creditors and shareholders both have a similar right to the assets and profits that a company has acquired. Creditors have priority because they receive interest and principal payments that belong to them. In addition, creditors then invest their capital with the aim of earning a fixed interest and acquiring the capital which is repaid 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 caused concern among creditors who consider their income sufficient to cover their fixed payments and repayment of principal on time (Sharma & Mehta, 2017). Creditors are not entitled to additional returns for a company's additional risks, but they must bear those risks assumed by the company. Creditors are therefore opposed to these high risks. Some managers of a company tend to invest in a project that carries high risk and if the project fails, creditors suffer losses and purchases maybuy back the company's outstanding shares and they sometimes have to borrow funds in order to raise. the leverage situation. This favors shareholders and creates conflict between them and creditors. There are different ways to resolve the conflict between shareholders and creditors. The first is that there should be collateral security whereby creditors should require security where necessary before granting credit (Térason, 2018). Additionally, convertibility can also be achieved. In case the company is unable to pay its debts, the borrowed capital can be converted into preferred shares. The company may also incur monitoring costs. In a company, the shareholders are the active managers while the managers are considered the passive agents. Shareholders are the real owners of the company, even if they cannot actively manage the company themselves because they are numerous and located in different geographical areas (Booher, 2013). Shareholders also cannot actively manage a business because it is believed that they do not have the skills, expertise and experience required to run a business. They thus participate in the election of a board of directors (BOD) which helps manage the company. The chief executive officer (CEO) is the head of the board of directors. The company's managers care about their job security, their personal wealth, their fame, and the benefits they expect from the company. This can lead to potential wealth losses for shareholders (Terason, 2018). It is therefore a cause of conflict between shareholders and managers. Managers find themselves in a situation where they must choose between personal satisfaction and maximizing shareholder wealth. Agency costs in a firm can be defined as conflicts that exist between the firm's management and its shareholders. The cause of agency costs is believed to lie with shareholders. Shareholders of integrated firms may face disagreements and scare each other, which may threaten the stability of the firm (Sharma and Mehta, 2017). The agency problem can arise when the company's management achieves its goal at the expense of those of the business owner. Since managers have more information regarding the company, they can manipulate controversial company information to their personal advantage. Therefore, managers cannot work hard in order to maximize shareholders' wealth since they only own a lesser part of it. Sometimes, because managers want to maintain a good reputation, they may donate their company's profits to charitable organizations. They may also do it for personal satisfaction. They may also participate in poison pill trading, meaning they may present the business as unattractive for other people to come and take over (Khan, Iqbal & Hussainy, 2016). Likewise, they may be part of greenmail, meaning they may purchase shares from an individual with the aim of attempting to take control of the company. They are doing all this to prevent a hostile takeover. In order to resolve these conflicts, shareholders must agree with the company's management on the decisions they should make. Shareholders could also appoint representatives working within the company (Booher, 2013). These representatives must always participate in meetings that take place in the company and must present a weekly report on the conclusions they have,.