Conflict must be perceived by the parties to it. No awareness of conflicts means conflict does not exist. Conflict involves opposition or incompatibility and some form of interaction between parties. Conflict: a process that begins when one party perceives that another party has negatively affected, or is about to negatively affect, something that the first party cares about. The definition is broad: describes point when an interaction crosses over to become an interparty conflict. Encompasses wide range of conflicts experienced in groups and organizations. Incompatibility of goals, differences over interpretations of facts, disagreements based on behavioural expectations, etc. Covers subtle forms of disagreement to overt violent acts. Some conflict supports the goals of the group and improves performance. Functional conflict: conflict that supports the goals of the group and improves its performance. The criterion that differentiates functional from dysfunctional is group performance. If group can"t accomplish goal then it is dysfunctional.