This article analyzes the effects of conflict using a non-linear model and relies heavily on economic theory to define the relationship between conflict and profitability. This research builds on the model of Kretchmer and Puranam (2008), an effort-based model that captures the effects of employee collaboration. We expand upon this model and derive and test two main hypotheses. The first deals with the convexity of the relationship between conflict and profitability. The second analyzes the effect family business structure has on conflict and profitability.