Conflict is an inevitable aspect of organisational life because individuals and groups differ in their goals, values, perceptions, interests, personalities, and approaches to work. Organisations consist of people with diverse backgrounds, experiences, and responsibilities, making disagreements natural. Earlier organisational theorists viewed conflict as harmful and believed that it should be eliminated to achieve organisational effectiveness. Modern organisational theory, however, recognises that conflict is not always negative. A moderate level of conflict can encourage innovation, improve decision-making, stimulate creativity, and enhance organisational performance. The key challenge for managers is not to eliminate conflict entirely but to manage it effectively so that it remains at a productive level. This understanding forms the basis of the Inverted U-shaped relationship between conflict and performance. The Inverted U-shaped relationship explains that organisational performance varies according to the intensity of conflict. At very low levels of conflict, organisational performance tends to be poor because employees become complacent, resistant to change, and less motivated to improve existing processes. At moderate levels of conflict, performance reaches its highest point because healthy disagreements encourage critical thinking, innovation, problem-solving, and continuous improvement. However, when conflict becomes excessive or intense, performance declines sharply due to stress, poor communication, hostility, reduced cooperation, and decreased employee morale. The first stage of the Inverted U-shaped curve represents a situation where conflict is minimal or absent. Although this may appear desirable, an organisation with no conflict often suffers from stagnation. Employees may avoid questioning existing practices, innovative ideas may not emerge, and decisions may go unchallenged. Groupthink becomes common as individuals hesitate to express alternative viewpoints. Such an environment reduces adaptability and weakens the organisation's ability to respond to external changes. Employees become satisfied with maintaining the status quo rather than seeking better methods of performing tasks. Consequently, organisational effectiveness declines despite the apparent harmony. For example, a manufacturing company where employees never question production methods may continue using outdated technology even when competitors adopt more efficient systems. The absence of constructive conflict prevents improvement and reduces competitiveness. The second stage represents moderate or functional conflict, where organisational performance reaches its optimum level. Functional conflict encourages employees to challenge assumptions, share different perspectives, and explore creative alternatives. Such conflict promotes healthy competition, better communication, critical evaluation of decisions, and continuous learning. Employees become actively involved in solving organisational problems instead of merely accepting existing practices. Moderate conflict stimulates innovation because different viewpoints encourage creative thinking. Teams examine problems from multiple angles and develop better solutions. Decision-making quality improves because managers receive diverse opinions before making important choices. Employees become more engaged in discussions, increasing their commitment to organisational objectives. Moderate conflict also enhances adaptability by encouraging organisations to identify weaknesses and