Conflict arises from incompatible goals, interests or behaviors between interdependent parties. It can be functional in spurring innovation, or dysfunctional in hindering performance. There are multiple levels of conflict from latent tensions to active disagreements. Conflict evolves through stages from potential issues to outcomes, and can be managed constructively through stimulating productive task conflicts, using interest-based negotiation or third-party mediation to resolve disputes, and reducing negative relationship conflicts. The key is managing the level and type of conflict for optimal group performance and outcomes.