Purpose: The purpose of this paper is to understand how task conflict and relationship conflict influence teams' transactive memory systems (TMS) and by extension team performance. Design/methodology/approach: Leveraging experiential learning theory and a popular operations management simulation tool, survey data from 341 students, who worked on 117 simulation teams, are collected. To examine the present hypotheses bootstrapping analysis and SPSS were used. Findings: Both task and relationship conflict can significantly diminish TMS development, which in turn, inhibits team performance. Thus, when teams disagree on how to approach a task, conflict could diminish TMS formation. In addition, when one team member has a personal conflict with one or more members that it further amplifies the influence of task conflict. To address the negative influence of both task and relationship conflict, teams should develop processes to better utilize members' specialized knowledge and work together in a coordinated manner. Research limitations/implications: The research adds to the literature by articulating the mediating influence that relationship conflict has on task conflict. Furthermore, it highlights how teams can develop TMS as a means to improve team performance when using simulation tools as a teaching device. Originality/value: This work broadens our understanding of the conditions under which educators can teach students about teams and teamwork capabilities. In addition, the authors expand the use of simulations as an experiential learning tool.