Business Conflict Management

Business conflict management is often complicated by organizational leaders’ resistance to formal dispute resolution processes. But those who embrace the principles of dispute system design are likely to find that they can resolve internal conflicts quickly and cheaply.

By on / Conflict Resolution

conflict management

In the business world, workplace disputes are all too common. Consider these real-life conflict scenarios: a group of employees who, working overtime to make up for staff shortages, complain to their manager that they aren’t getting paid enough for the extra time. A colleague confides about his boss’s verbal abuse. Two employees argue openly about which one is responsible for a work assignment.

Many organizations lacks an integrated system for business conflict management, leading to low morale and high turnover. Intervening quickly in cases of conflict can dramatically reduce the costs and time associated with dispute resolution.

One effective way to address such human-resources problems is to follow the principles of dispute system design (DSD), according to Harvard Law School professors Frank E. A. Sander and Robert C. Bordone. DSD is the process of diagnosing, designing, implementing, and evaluating an effective method for business conflict management.


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DSD, which focuses on preventing and intervening early in conflict, can generate huge savings by improving morale, reducing turnover, and preventing lawsuits, according to Sander and Bordone.

With the goal of reducing employee grievances and lawsuits, for example, Coca-Cola Enterprises set up a mandated grievance process in 2000 for all of its employees that has focused the company’s attention on internal disputes. The four-part program begins with informal discussions between employees and can progress to external mediation or arbitration in cases such as alleged harassment or discrimination.

DSD is typically grounded in conflict-solving strategies such as interest-based negotiation, in which parties share the interests that underlie their grievances and try to jointly negotiate a solution that satisfies all parties. Although outside mediators are sometimes enlisted to help parties involved in business conflict management, just about anyone in an organization who has experience in basic dispute-resolution processes, such as problem solving, active listening, and other mediation skills, can be a “DSD architect.”

Business Conflict Management: 4 Steps

If you are considering become a DSD architect in your organization, here are four steps to follow, as recommended by Sander and Bordone:

  1. Diagnose dispute symptoms. Do an assessment of the types of disputes that typically arise and how your organization handles them. Who is typically involved in the disputes? How frequently do disputes come up, and what tends to trigger them? When employees are upset, do they complain among themselves, go straight to the top, or threaten a lawsuit? Are there any interest-based structures set up in your organization to help employees resolve their disputes?
  2. Apply DSD principles. Lead your organization through the process of building a system that encourages employees to seek help with business conflict resolution before their disputes escalate. Be sure that the system begins with low-cost, interest-based approaches to conflict, such as internal discussions and internal mediation, before moving on to more extreme measures, such as arbitration or litigation. Set up safeguards that ensure that employees who use your DSD system won’t face retaliation for providing feedback on the behavior of other employees, including their bosses. In addition, ensure that management supports the DSD system by funding training programs in interest-based negotiation and hiring external, impartial mediators and facilitators who can step in to engage in business conflict resolution when needed.
  3. Implement your new DSD system. Ask members of your organization to choose representatives for a DSD committee. Be sure to involve those who may feel threatened by the new system to lessen the odds that they will try to sabotage it. Ask leaders to promote early business conflict resolution victories to others. It’s also important to ensure that whatever dispute system you create is strong enough to withstand your departure from the organization. An effective system does not depend on any one person to thrive.
  4. Evaluate the system. To give the system the time and resources it needs to thrive, introduce it gradually before rolling it out to the whole organization. Evaluate the system by examining whether disputants are more satisfied with outcomes than they were before, whether it is cost effective, whether the quality of relationships in the organization has improved, and whether fewer disputes are cropping up as a result. Note that your organization may see an increase in disputes after the new system is put in place simply because people feel more comfortable sharing their concerns.

What strategies for business conflict management have you found to be effective?

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