The study conducted by the Chartered Institute of Personnel and Development (CIPD) and business psychology firm OPP has revealed that, on average, an individual spends two hours a week dealing with some form of conflict, which may cost millions of lost working days a year.
According to the study, conflict is an "inevitable" part of the workplace, but has now grown to such an extent that it is deteriorating British business because it is so poorly managed.
The survey of thousands of workers and hundreds of managers demonstrated that a large number of employees believed bosses should deal with underlying tensions in the workplace much before they grown into full-blown conflict.
"Workplace conflict is nothing new, but in the context of the current economic downturn, businesses could see steep rises in conflict as workloads increase, budgets shrink and stress levels rise," the Telegraph quoted Robert McHenry, chief executive of OPP, as saying.
He added: "The fact that there are too few managers in British business with the insight to handle it effectively could cost us dearly.
"When dealt with in the right way, conflict can actually lead to positive outcomes such as more effective teamwork and greater innovation. Training is vital because it allows managers to understand and deal with the underlying causes."
Linda Holbeche, director of research and policy at the CIPD, added: "Managers must be able to identify the early signs of conflict and intervene and diffuse situations before they escalate if teams are to work productively and harmoniously.
"Managers must also manage under-performance firmly and fairly, as well as pick up on when banter starts to become bullying or when workloads become excessive."