This work focuses on the conflicts and conflict management mechanisms that arise at the levels of plants and workplaces. Traditionally, this type of dispute resolution has been a major area of interest for scholars in industrial relations, so much research has been done on this topic (Halpern 1992). But major changes have been occurring in the basic characteristics of business relations in the United States because of efforts directed at increasing cooperation between labor and management. This changing context for dispute resolution requires a reexamination of our understanding of how business relations systems now operate.
One purpose of this work is to discuss the broad nature of multi-criteria conflict resolution, rather than focus on the litigation and legal policy conflicts that are usually emphasized. Another purpose is to compare different types of conflict resolution, including negotiation, mediation, empathy, and other skills of conflicts resolution. The conflict discussed here provides insights into significant model cases occurring in the management by reviewing the developments of interacting of a buyer with a seller.
A significant and growing minority of the more sophisticated managers and their lawyers is coming to recognize that, for many conflicts, various alternatives offer the possibility of producing better results than do trials. Judges are constrained by the need to respond to the issues as they are presented by the litigants’ attorneys and to follow legal precedents. They often lack the technical or managerial expertise that may be required to understand technical conflicts. These straightjackets need not confine private mediators, neutral experts, or arbitrators.
As they become more personally involved in the business of resolving conflicts, some managers are recognizing that they can apply their own business knowledge and creativity to developing solutions better suited to their needs than courts and lawyers alone could devise.Disputes between business firms are mainly consumer disputes in the sense that one business firm is a seller and the other is a buyer. This is a very different kind of dispute than the kinds of disputes covered under the consumer dispute category, which mainly involve retail stores and individual buyers. These two kinds of consumer disputes raise an interesting equity question.
If the individual buyer is cheated by a retail store, the individual buyer may have to wait months to obtain justice in a traditional courtroom or small claims court, assuming the consumer pursues the matter through the legal process. On the other hand, the business firm as a consumer may arrange to hire a judge as part of the modern commercial arbitration process. At first glance, this practice might seem unfair, and perhaps should be a stimulus to some kind of restrictive legislation.
At second glance, commercial arbitration may be socially desirable. The types and complexity of cases going to court also have increased (Mills 1990). Claims for injuries to consumers by products manufactured or sold by business, for workers’ exposure to occupational hazards, and for damage to the environment, all of which have grown in number, involve complicated causal relationships and scientific uncertainty.A conflict between two business firms usually involves a buyer-seller relation.
Suppose a seller sells a buyer some bad upholstery or upholstery contrary to specifications. Both sides might have a fair chance of winning in court. A buyer could argue that it was seller’s fault and that the specifications were not sufficiently clear. The seller could argue that the specifications were clear but the buyer did not comply. They could spend a lot of money fighting each other. The seller then loses what may have been a good source of upholstery. The buyer loses a good customer, and everybody winds up substantially worse off than before.
When the seller and the buyer affirmatively attempt to resolve conflicts (rather than walk away), the most typical way to do so is through negotiation, through which people try to settle their own disputes (Vayrynen 1991). As attempts at settlement progress along the spectrum, outsiders become involved in increasingly active ways, through mediation or some hybrid involving elements of predicting outcome. As outside participation increases, the disputing parties surrender more and more power to resolve their own disputes. Their surrender reaches its ultimate at the far right of the spectrum with adjudication, where outsiders are given the power to make binding decisions for the parties.
Arbitration most often is conducted in private, through private decisionmakers. In other forms of adjudication, those decisions are public and are made by public bodies, namely courts or administrative agencies. (Legislatures also make binding, publicly enforceable decisions.) People who use one or more of the various techniques for set ling disputes generally attempt to preempt such decision-making through their own agreement. The basic processes for settling disputes are negotiation, mediation, and adjudication.The commercial arbitration approach seeks to work out traditional compromises that are better, but not necessarily super-optimum solutions.
A super-optimum solution in the business would might involve some kind of a merger of interests that go beyond the immediate sale. The seller would perhaps like to own a company that makes upholstery, and thereby cut out the middleman and the profits that go to some other company. The buyer would perhaps like to own a company that makes cars, thereby having a large market for its auto upholstery.In negotiation, one side is probably going to win and the other side is going to lose. The loser is likely to be bitter. The winner may feel guilty or disrespectful to the loser.
In general, the results are likely to be increased friction. In mediation (especially super-optimum mediation), there is a good possibility of the problems being resolved to the point where new problems have to occur in order to have a dispute, rather than a reviving of the old conflict. In empathy there is also a winner and a loser. Having disputes resolved by a professional third party has been an important advance in the development of world civilization over the parties resorting to violent resolution or tactics in which the winner is determined by might or power, rather than the rule of objectively administered law. It is, however, ironic (or maybe part of normal world progress) that we now seem to be at a stage where what was considered such an advance in the past is now being substantially improved upon by the mediation perspective (Musambachime 2001). This perspective emphasizes everyone coming out ahead. It also emphasizes preventive action. It is in conformity with a quality of life in which resources are not so scarce, and there is continual economic growth.
This kind of expansion facilitates mutually beneficial solutions, even super-optimum solutions, where all sides come out ahead of their best expectations.A critical negotiating skill is the ability to identify the negotiator’s own as well as other parties’ interests. In order to do this, interests, or underlying needs, must be separated from positions, the public stands the parties take concerning the issues in dispute. Parties should ask themselves – and one another – why they care about a particular issue. The answer may well reveal their underlying needs.
For example, if an employee asks for a raise, does she need the money? Or does she believe that she currently lacks the prestige her contributions should bring? Or does she consider herself unfairly treated as compared with other employees, who she believes do work of the same or less importance? Is the employer’s position based on financial or equitable considerations? Do the parties have different views of the employee’s performance or her value to the company? Generally, each party to a negotiation will have several different interests, which need to be ranked in priority order. Once priorities are understood, it may be possible to devise trade-offs of issues that are unimportant to one party but critical to the other.If the parties can agree on standards, or neutral principles, to govern their settlement, agreement on substance will be easier. It also may seem fairer and less arbitrary.
Examples of standards parties might agree to are laws, court decisions, technical specifications, or regulations; neutral appraisals of property to determine values; “blue book” prices for automobiles; and methods such as letting the person who does not cut the pie choose the first piece.There are several important truths or truisms about the role of negotiating as a technique in dispute resolution between buyer and seller. First, it seems by far the most common dispute resolution technique in this sector of relations. This should be an unsurprising point to make in the context of a functioning social community, particularly one based largely around exchange activities of various kinds. It helps explain the plethora of instructional manuals on the topic, largely geared to the business world. However, most such manuals rightly observe in their introductions that we are in fact negotiating a great deal of the time in human encounters although we may refer to it by other labels— influencing, persuasion, argument, putting our point of view across, sorting things out, being diplomatic, and so on.Negotiating is a basic means of getting what you want from others.
It is back-and-forth communication designed to reach an agreement when you and the other side have some interests that are shared and others that are opposed. In our case the parties value the agreement or relationship more highly than they do the values embodied in relevant legal rules. Second, even in those disputes where the parties’ relationship is such that a failure of negotiation has led them to enter the adversarial system of litigation, nevertheless most such cases still end up by settling through negotiation before the forum of adjudication is reached.
Studies in the United States and the UK repeatedly demonstrate that over 90 per cent of civil actions end up as out-of-court settlements.In addition, the various parties to a dispute have a range of options in achieving their goals. These include using the legislative arena, regulatory agencies, the courts, or even a decision not to do anything (stalemate).
A choice of options is dependent upon a group’s power, resources, and a cost-benefit analysis of one option over another. The notion of countervailing power is vital. A party lacking some form of countervailing power is at the mercy of stronger groups.Successful negotiations usually include a limited number of parties. This limited number of parties is both a strength and a weakness. A small group can more easily negotiate, but those interests left out may contest this result. The limited number of parties is the basis for looking at regulatory negotiation as “corporatist” in nature.
The issue should be mature, a concrete question on which the agency is ready to issue a rule. Related to this is the criterion that the decision be inevitable: if the groups do not negotiate a recommendation, then the agency will issue a rule through traditional processes. The issue should be a non-zero-sum game, or a win-win situation: every party should be better off than if it had not participated. Otherwise, there would be no reason to participate. There should be multiple issues, so that there is something to trade. Research should not dictate a result; although research (and information in general) is important, there generally should be no fundamental research needed that would settle issues. Finally, the agreement should be implemented; the agency should use the agreement, and therefore may (but not necessarily) be part of the negotiations.
Mediation/arbitration (“med/arb”) is used by disputants who want a binding decision if they cannot agree (Avruch 1991). The third party mediates, then if an agreement is not reached, decides the dispute. The same person often is used to mediate and arbitrate so that the parties do not have to start over if they cannot resolve their dispute in mediation. A person performing both functions is not supposed to use any confidential information learned during mediation in reaching the arbitration decision. But no one knows whether such information actually can be excluded from the arbitrator’s mind or, conversely, whether the knowledge that the mediator eventually may make a decision prevents the parties from sharing confidential information in the first place. Consequently, some disputants (and many neutrals) prefer to use a different person to arbitrate if they fail to settle in mediation.The third-party techniques can be used directly to assist parties to reach their own agreement, including for example judicial settlement conferences or expert opinion.
The domain of ‘assisted’ or ‘structured’ negotiation or settlement is of great interest because the method retains the value of a consensual settlement (therefore offering what is often a more satisfying, sophisticated and stable settlement than a ‘win-lose’ trial verdict) while smoothing the path towards such settlement by means of third-party intervention (Gleason ; Sandra 1997). Of the techniques proposed, the main category of third-party intervention is mediation, although such mediation can take a number of forms, for example voluntary or court-ordered. Sometimes the term ‘conciliation’ is also used.
The difference normally drawn between the terms—in one case, the third party seeks to encourage the parties to reach their own agreement (conciliation), in the other case the third party makes positive recommendations for settlement (mediation)—is often a little contrived and difficult to distinguish in practice (Vayrynen 1991).All this material is relevant to the more specifically focused problem of litigation mediation and to the more broadly based problem of mediating any kind of conflict. These concepts can facilitate litigation settlements or other kinds of settlements. The multi-criteria aspects are especially helpful when the settlement involves a package arrangement with one side giving on a number of matters that are not so important to it, but are important to the other side. It is the multicriteria aspect that is most important. The other concepts are basically visual or conceptual aids that enable the parties to see more clearly how the multi-criteria package is in their best interests.The mediator has the same advantage as the arbitrator as far as informality and quietness, but not the disadvantage of having to think in terms of a rightwrong dichotomy.
The mediator can try to find right on both sides and work out a settlement that can (if done well) be better than the best expectations of either side. Mediation is a popular dispute resolution process in business law cases, and has even been made mandatory in some states (Rabie 1994). Like arbitration, it is a less formal procedure than litigation and involves the activities of a neutral third party. Often the experienced mediator can help the parties create solutions that neither had thought of individually.Either type could be rated as effective. Successful negotiating, in other words, is not associated particularly with one orientation, but can be demonstrated in either mode. What distinguished the effective negotiator from the ineffective? Amongst the important qualities of the effective co-operatives are their desire to get a fair settlement, avoid litigation and at the same time maximize settlement for the client. The ineffective co-operatives, on the other hand, lack perceptiveness and are not convincing, realistic or rational.
Effective competitives are tough in negotiations, and sought to maximize settlement for the client (and their fee) and outdo or outmaneuver their opponent. They treated negotiating as a game to win by getting the better of the other side. Ineffective competitives, however, are described as irritating, headstrong, unreasonable, arrogant and obstructive, lacking the perceptiveness and realism of the effective competitiveness.In contrast to the friendly, trustworthy approach of the co-operative/effectives, effective/competitives are seen as dominating, competitive, forceful, tough, arrogant, and uncooperative. They make high opening demands, they use threats, they are willing to stretch the facts in favor of their clients’ positions, they stick to their positions, and they are parsimonious with information about the case rather than seeking an outcome that is ‘fair’ to both sides, they want to outdo the other side; to score a clear victory (Ross ; Stillinger 1991).The key qualities which effective competitives and effective co-operatives share are that both seen as experienced (hence confident), ethical and trustworthy (despite the competitive’s tough gamesmanship), observed professional customs, are in general realistic, rational and analytical, were fully prepared on facts and law, are legally astute, self-controlled, perceptive and skilled at reading their opponent’s cues (Kramer, Newton, ; Pommerenke 1993). Also both are creative, versatile and adaptable—effective competitives are apparently tough but not obstinate.The study is a major landmark in studies of legal negotiations, both for its strong empirical base, and for its capacity to deal with the complexities of ‘effectiveness’ in negotiation and the relations between negotiating styles, settlement and litigation (Burton ; John 1990).
The two orientations identified have their advantages and disadvantages, particularly if not handled effectively, and even then the effective tough negotiator may have to live with a lower settlement rate. More lawyers, however, are co-operative in orientation, and more co-operatives are ‘effective’. A major saving in trial time could be made if one were to improve the negotiating skills of ineffective negotiators.Conflict is an integral part of individual life and of intergroup and interstate relationships. Conflict can never be eliminated; it can only be managed to minimize its negative impact, reduce its intensity, and facilitate its positive role in human development. Conflict resolution or eradication is not an alternative because it translates into the elimination of choice and perceptual difference.
This goal is neither feasible nor desirable. The best we can do is to learn to live with conflict. Conflict resolution is not a process to eliminate conflict but to vastly moderate its intensity and impact, eliminating the negative and reducing conflict to a subconscious force that continues to motivate people but does not dominate their outward attitudes and intergroup relationships.