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Conflict can be pretty much inevitable when you work with others. People have different viewpoints and under the right set of circumstances, those differences escalate to conflict. How you handle that conflict determines whether it works to the team's advantage or contributes to its demise.
You can choose to ignore it, complain about it, blame someone for it, or try to deal with it through hints and suggestions; or you can be direct, clarify what is going on, and attempt to reach a resolution through common techniques like negotiation or compromise. It's clear that conflict has to be dealt with, but the question is how: It has to be dealt with constructively and with a plan, otherwise it's too easy to get pulled into the argument and create an even larger mess.
Conflict isn't necessarily a bad thing, though. Healthy and constructive conflict is a component of high functioning teams. Conflict arises from differences between people; the same differences that often make diverse teams more effective than those made up of people with similar experience. When people with varying viewpoints, experiences, skills, and opinions are tasked with a project or challenge, the combined effort can far surpass what any group of similar individual could achieve. Team members must be open to these differences and not let them rise into full-blown disputes.
Understanding and appreciating the various viewpoints involved in conflict are key factors in its resolution. These are key skills for all team members to develop. The important thing is to maintain a healthy balance of constructive difference of opinion, and avoid negative conflict that's destructive and disruptive.
Getting to, and maintaining, that balance requires well-developed team skills, particularly the ability to resolve conflict when it does happens, and the ability to keep it healthy and avoid conflict in the day-to-day course of team working. Let's look at conflict resolution first, then at preventing it.

Resolving Conflict

When a team oversteps the mark of healthy difference of opinion, resolving conflict requires respect and patience. The human experience of conflict involves our emotions, perceptions, and actions; we experience it on all three levels, and we need to address all three levels to resolve it. We must replace the negative experiences with positive ones.
The three-stage process below is a form of mediation process, which helps team members to do this:

Step 1: Prepare for resolution

• Acknowledge the conflict – The conflict has to be acknowledged before it can be managed and resolved. The tendency is for people to ignore the first signs of conflict, perhaps as it seems trivial, or is difficult to differentiate from the normal, healthy debate that teams can thrive on. If you are concerned about the conflict in your team, discuss it with other members. Once the team recognizes the issue, it can start the process of resolution.
• Discuss the impact – As a team, discuss the impact the conflict is having on team dynamics and performance.
• Agree to a cooperative process – Everyone involved must agree to cooperate in to resolve the conflict. This means putting the team first, and may involve setting aside your opinion or ideas for the time being. If someone wants to win more than he or she wants to resolve the conflict, you may find yourself at a stalemate.
• Agree to communicate – The most important thing throughout the resolution process is for everyone to keep communications open. The people involved need to talk about the issue and discuss their strong feelings. Active listening is essential here because to move on you need to really understand where the other person is coming from.

Step 2: Understand the Situation

Once the team is ready to resolve the conflict, the next stage is to understand the situation, and each team member's point of view. Take time to make sure that each person's position is heard and understood. Remember that strong emotions are at work here so you have to get through the emotion and reveal the true nature of the conflict.

• Clarify positions – Whatever the conflict or disagreement, it's important to clarify people's positions. Whether there are obvious factions within the team who support a particular option, approach or idea, or each team member holds their own unique view, each position needs to be clearly identified and articulated by those involved.
• This step alone can go a long way to resolve the conflict, as it helps the team see the facts more objectively and with less emotion.

Sally and Tom believe the best way to market the new product is through a TV campaign. Mary and Beth are adamant that internet advertising is the way to go; whilst Josh supports a store-lead campaign.

• List facts, assumptions and beliefs underlying each position – What does each group or person believe? What do they value? What information are they using as a basis for these beliefs? What decision-making criteria and processes have they employed?

Sally and Tom believe that TV advertising is best because it has worked very well in the past. They are motivated by the saying, "If it ain't broke, don't fix it."

Mary and Beth are very tuned-in to the latest in technology and believe that to stay ahead in the market, the company has to continue to try new things. They seek challenges and find change exhilarating and motivating. Josh believes a store-lead campaign is the most cost-effective. He's cautious, and feels this is the best way to test the market at launch, before committing the marketing spend.

• Analyze in smaller groups – Break the team into smaller groups, separating people who are in alliance. In these smaller groups, analyze and dissect each position, and the associated facts, assumptions and beliefs.
• Which facts and assumptions are true? Which are the more important to the outcome? Is there additional, objective information that needs to be brought into the discussion to clarify points of uncertainly or contention? Is additional analysis or evaluation required?

Consider using formal evaluation and decision-making processes where appropriate. Techniques such as PMI, Forcefield Analysis, Paired Comparison Analysis and Cost/Benefit Analysis are among those that could help.
If such techniques have not been used already, they may help make a much more objective decision or evaluation. Gain agreement within the team about which techniques to use, and how to go about the further analysis and evaluation.

• By considering the facts, assumptions, beliefs and decision making that lead to other people's positions, the group will gain a better understanding of those positions. Not only can this reveal new areas of agreement, it can also reveal new ideas and solutions that make the best of each position and perspective.
• Take care to remain open, rather than criticize or judge the perceptions and assumptions of other people. Listen to all solutions and ideas presented by the various sides of the conflict. Everyone needs to feel heard and acknowledged if a workable solution is to be reached.

• Convene back as a team – After the group dialogue, each side is likely to be much closer to reaching agreement. The process of uncovering facts and assumptions allows people to step away from their emotional attachments and see the issue more objectively. When you separate alliances, the fire of conflict can burn out quickly, and it is much easier to see the issue and facts laid bare.

Step 3: Reach agreement

Now that all parties understand the others' positions, the team must decide what decision or course of action to take. With the facts and assumptions considered, it's easier to see the best of action and reach agreement.

In our example, the team agrees that TV advertising is the best approach. It has had undeniably great results in the past and there is no data to show that will change. The message of the advertising will promote the website and direct consumers there. This meets Mary and Beth's concern about using the website for promotions: they assumed that TV advertising would disregard it.

If further analysis and evaluation is required, agree what needs to be done, by when and by whom, and so plan to reach agreement within a particular timescale. If appropriate, define which decision making and evaluation tools are to be employed.
If such additional work is required, the agreement at this stage is to the approach itself: Make sure the team is committed to work with the outcome of the proposed analysis and evaluation.

If the team is still not able to reach agreement, you may need to use a techniques like Win-Win Negotiation, Nominal Group Technique or Multi-Voting to find a solution that everyone is happy to move the team ahead.

When conflict is resolved take time to celebrate and acknowledge the contributions everyone made toward reaching a solution. This can build team cohesion and confidence in their problem solving skills, and can help avert further conflict.
This three-step process can help solve team conflict efficiently and effectively. The basis of the approach is gaining understanding of the different perspectives and using that understanding to expand your own thoughts and beliefs about the issue.

Preventing Conflict

As well as being able to handle conflict when it arises, teams need to develop ways of preventing conflict from becoming damaging. Team members can learn skills and behavior to help this. Here are some of the key ones to work on:

• Dealing with conflict immediately – avoid the temptation to ignore it.
• Being open – if people have issues, they need to be expressed immediately and not allowed to fester.
• Practicing clear communication – articulate thoughts and ideas clearly.
• Practicing active listening – paraphrasing, clarifying, questioning.
• Practicing identifying assumptions – asking yourself "why" on a regular basis.
• Not letting conflict get personal – stick to facts and issues, not personalities.
• Focusing on actionable solutions – don't belabor what can't be changed.
• Encouraging different points of view – insist on honest dialogue and expressing feelings.
• Not looking for blame – encourage ownership of the problem and solution.
• Demonstrating respect – if the situation escalates, take a break and wait for emotions to subside.
• Keeping team issues within the team – talking outside allows conflict to build and fester, without being dealt with directly.

Source : mindtool.com