A full understanding of organizational and group effectiveness must take into account the causes and contexts that exacerbate and reduce tension between groups, and the individual psychological mechanisms involved. This chapter attempts to analyze intergroup behavior through a phenomenological lens: examining how people perceive groups, their own and others, and how these perceptions shape subsequent behavior. Two individually based processes, categorization and egocentrism, and two group-based processes, competition over scarce recourses and strivings for positive social identities, allow intergroup hostilities and biases to flourish. Two strategies for reducing intergroup tension, both of which involve transforming representations of the out-group, are discussed. One is a group-based strategy, which involves structurally altering the relationship between groups by increasing their interdependence. The other strategy, perspective-taking, is individually based. Perspective-taking increases out-group evaluations, decreases stereotyping, and decreases the selection of expectancy-consistent information, all through activation and application of the self-concept. Because many intergroup biases are rooted in individual psychological processes, such as categorization and egocentrism, it is suggested that strategies designed to reduce intergroup tensions that build off these biases might be particularly effective. Implications of intergroup conflict and perspective-taking for organizations are discussed.