It isn't flawed. She should have had the two parties talk out the situation with her acting as a intermediary. As a leader conflict resolution is extremely important in handling your squad.
A Leader's Role in Conflict Resolution
1. Be objective: Maintain stability in the group by quickly eliminating conflict in an objective and reasonable manner.
2. Take systematic steps: A leader can take certain steps to deal with conflict.
Explanation: Listen objectively to both sides to determine if the conflict is created by misunderstanding.
Alternatives: Offer the parties an alternative method of handling the conflict.
Negotiation: Mediate negotiations to come up with a fair solution in which both sides can agree.
Counseling: Provide follow-on counseling to each party to ensure harmony is maintained.
Investigation: Investigate accusations or indicators that continue to imply that a persistent conflict exists in a timely manner.
Authority: Maintain a position of authority over parties and hold each side accountable for their actions.
3. Maintain self-control: The leader's verbal and non-verbal communication influences how the parties accept their authority over the conflict.
Verbal: Remain calm and communicate in a normal tone of voice using words that will help de-escalate the conflict. Do not accuse or demean either party. Refrain from verbal communication that may indicate you agree with one side and not the other.
Non-verbal: Maintain equal eye contact with each party. Maintain an open posture and do not cross your arms or legs. Do not point your finger or make threatening facial or eye gestures to either party.