Leader Analysis

Conflict with the external environment is inevitable for any organization. Whether with regulators, competitors, unions, or even founders, conflict can either destroy value or, when managed well, strengthen the company. The ability of business leaders to handle conflict constructively often determines the long-term health of their organizations.

Conflict with Regulators and Governments

One of the most visible conflicts businesses face comes from regulators. Google offers a prime example. The Justice Department continues to target Google because of its dominance in search, where it accounts for 90% of global market share, and in browsers, where Chrome controls 60%. Regulators have floated drastic measures such as forcing Google to sell Chrome. In the midst of this, an AI startup even offered to buy Chrome.

Google’s CEO highlighted the danger of sharing sensitive data with competitors, arguing it would harm the company’s technology. Whether or not the argument convinces regulators, the case shows that CEOs must remain calm, constructive, and solutions-oriented in such conflicts. Their role is to meet regulatory demands without undermining the business’s long-term viability.

Pharmaceutical company Eli Lilly offers another lesson. Pressured by the U.S. government to reduce drug prices, it countered by negotiating with European governments to increase prices instead. Leaders must be willing to negotiate with governments and regulators on all sides, protecting their organizations without surrendering ground unnecessarily.

Conflict with Competitors

Competition is another unavoidable source of conflict. Some of this conflict is productive. For example, Google and OpenAI compete for top AI talent, spurring both to innovate faster. This type of competitive conflict strengthens industries and organizations.

But not all competition is healthy. JD.com’s recent price war with Meituan and Alibaba in the food delivery sector reduced profits significantly in Q2 2025. Leaders must ask themselves whether destructive conflicts like price wars are worth it. Walmart provides a contrasting example: instead of chasing competitors’ aggressive employee discount policies, it maintained discipline by offering smaller, delayed discounts. This strategy allowed Walmart to compete sustainably without harming profitability.

Patent disputes also illustrate competitive conflict. Masimo, a small medical technology firm, engaged Apple in a decade-long legal fight over oxygen-monitoring technology. Despite Apple’s vast resources, Masimo persisted until a resolution in 2025. This case highlights the courage leaders need to defend their organizations’ intellectual property, even against giants.

Conflict with Unions and Employees

Labor unions remain a consistent area of conflict. Air Canada recently faced a strike notice from CUPE, representing 10,000 flight attendants. Negotiations broke down, forcing the airline to prepare for reduced operations. Leaders must understand that in certain countries and industries, strong unions wield significant power. The most effective CEOs engage unions with firmness—negotiating vigorously, refusing to concede everything, and showing a willingness to slow operations if necessary. This balanced approach protects the organization’s long-term stability while acknowledging worker concerns.

Self-Inflicted Conflict

Not all conflict comes from outside. Sometimes leaders create conflict through poor decisions or lack of discipline.

Venture Global, for instance, abandoned its long-term contracts during the Russia–Ukraine war to sell natural gas on the spot market at higher prices. Though profitable in the short term, the decision damaged its reputation. Since its IPO in January, the company’s share price has dropped by 50%. This shows how sacrificing trust for short-term gains can backfire.

Similarly, U.S. Steel’s neglect of its Mon Valley facilities caused repeated explosions and environmental hazards, drawing conflict with regulators and activists. Publishers Clearing House offers another example: once disciplined in securing sweepstakes winnings through annuities, it abandoned the practice, later collapsing and leaving winners unpaid. Leaders who abandon discipline invite unnecessary conflict.

The Discipline to Lead Through Conflict

At the heart of conflict management is discipline. Leaders must avoid knee-jerk compromises, short-term profiteering, and unnecessary risks. They must uphold a clear doctrine of what their organization stands for and consistently act in line with that vision. Discipline in hiring, decision-making, operations, and negotiations prevents destructive conflict and strengthens the organization.

Ultimately, leaders cannot avoid conflict—but they can choose how to handle it. The best leaders engage conflicts with courage, clarity, and discipline. They know when to negotiate, when to resist, and when to compromise. In doing so, they not only protect their organizations but also preserve trust, reputation, and long-term value