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7 Methods of Dispute Resolution for Future Business Leaders

Conflicts are bound to happen, especially when it comes to the office environment and business dealings. Understanding the various methods of dispute resolution will better equip future business leaders to navigate conflicts – saving time, effort, money, and stress.

boardroom businessmen negotiation

Negotiation

Among the most straightforward approaches to dispute resolution, negotiation is the process of communication and compromise between conflicting parties. Since negotiation does not require any outside influence, time and financial costs are typically minimal. However, because it is not as robust as other forms of dispute resolution, it can sometimes be proven ineffective.

Negotiation is only effective when both parties are willing to find a mutually acceptable compromise. If one or both parties are unwilling to participate, or there is bitterness between the groups, negotiation would not be a viable option to reach a resolution.

Mediation

Mediation is the involvement of an external professional, or mediator, to establish an environment conducive to communication and problem solving between conflicting parties. Including a trained professional to conduct and lead negotiations creates not only a forum for better communication, but also fosters a greater understanding on both sides.

Mediation requires a lot of time, with emotional tensions and strong opinions from one or both parties potentially slowing the process even more.

To produce the best outcome, mediators must have a comprehensive grasp on every aspect and possible ramification of the conflict. This obligates them to build a rapport with all parties involved, instilling a shared belief among everyone that the resolution can be reached through the mediation process.

Neutral Evaluation

Neutral evaluation works to settle disputes by bringing in an uninvolved individual to assess the situation and provide an unbiased course of resolution. By allowing an outside perspective to enter a dispute, it opens the door to new ideas that might not have been previously considered.

While a neutral evaluator’s perspective can be helpful, any recommendations made are non-binding and do not necessarily force action or ensure a resolution.

Settlement Conference

Through a settlement conference, a judge is appointed to preside over negotiation proceedings. Having an esteemed moderator handling the conflict is more likely to be respected by both parties involved.

However, no matter how respectable, the judge’s recommendation is also non-binding and can be disregarded. Settlement conferences require more time and financial resources than other dispute settlement options, especially costly if the proceeding drag on.

Conditionally Binding Arbitration

During conditionally binding arbitration, both parties present their case and all pertinent evidence to an arbitrator, who renders a legally binding verdict. However, if either party is dissatisfied with the decision, they are allowed to go to court to pursue further legal action.

While this type of conflict resolution settles disputes at a faster pace, the results are more rigid and limit possible alterations once the verdict is delivered.

Binding Arbitration

During binding arbitration, cases are presented and verdicts given, following the same procedures of conditionally binding arbitration. However, the arbitrator’s decision in binding arbitration is final and cannot be taken to court for further review except in rare circumstances. While more time efficient, this method of dispute resolution eliminates any opportunity possible recourse if one or more involved parties are dissatisfied with the outcome.

Informal Dispute Resolution

Similar to neutral evaluation, the facts of the case are reviewed by a hearing officer who, in turn, issues a non-binding decision. Essentially, the hearing officer offers recommendations after considering the pertinent facts, but neither party is required to take the suggested course of action.

Prior to the hearing, both parties submit written statements detailing the facts of the case from which the hearing officer will reach a verdict. This allows for a non-threatening resolution option, which is especially useful when there are clashing parties involved. However, because the verdict is non-binding, one or both parties can reject the officer’s recommendation and the conflict may end up back where it started.

Understanding the pros and cons of the various forms of dispute resolution allows for business leaders to easily resolve conflicts and focus on the future of their firm. By approaching disputes with any of these methods, all involved parties will save valuable resources and increase the chance of reaching an acceptable compromise.

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Sources

http://www.americanbar.org/publications/gp_solo/2016/may-june/dispute_resolution_public_policy_mediation_best_practices.html

http://www.bbb.org/bbb-dispute-handling-and-resolution/dispute-resolution-rules-and-brochures/dispute-resolution-processes-and-guides/

https://www.ferc.gov/legal/adr/continuum/com-dra.asp