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BUS403 Study Guide

Unit 4: Conflict Resolution Strategies

4a. Compare the five styles for handling conflict: competing, collaborating, compromising, avoiding, and accommodating

  • What is the definition of a collaborative and competitive negotiation style?
  • What are the benefits and drawbacks of negotiating with conflict avoidance, accommodation, competition, and compromise in mind?
  • How can the causes of workplace conflict, such as organizational structure, limited resources, task interdependence, incompatible goals, personality differences, and communication problems, be overcome?

Review the five modes of the Thomas Killmann Conflict-Handling Mode Instrument (TKI) – avoiding, accommodating, competing, collaborating, and compromising – in learning outcome 3d. What does it mean to be collaborative or competitive during a negotiation? When choosing a negotiation approach, each party must assess the relative importance of their long-term relationship and how much they value the desired outcome.

For example, is winning an argument with a work colleague more important than retaining a friendly, collaborative partnership? Are you concerned that obtaining a lower price for the car you want to buy will decrease the commission the salesperson receives from the sale? If you emphasize preserving or creating a good relationship, you may decide to be more collaborative and pursue a win-win outcome. If the outcome of your negotiation takes precedence (you want a lower price for the car you buy), you may decide to be more competitive.

Conflict-Handling Styles

Conflict-Handling Styles

Many people use the terms conflict management and conflict resolution interchangeably. However, conflict management is when you contain or manage conflict rather than remove it. Conflict resolution is when you improve or resolve a conflict situation. All parties are satisfied or agree to pursue a win-win solution. Resolving conflicts may require third-party intervention, such as diplomacy, mediation, or arbitration.

For example, when resolving a business conflict, managers try to determine the best outcome for their company. What is more important – keeping an employee who did shoddy work or keeping a client unhappy with their poor performance?

To review, see:


4b. Compare the ADR strategies of negotiation, mediation, and arbitration

  • What are negotiation, mediation, and arbitration, and how do they compare?

Steps to a successful negotiation include formulating a clear outcome or goal, deciding on an approach or strategy, defining obstacles or issues that may preclude mutual agreement, and planning or specifying steps to obtain a desired outcome.

Mediation is a formal process of alternative dispute resolution (ADR) that includes a neutral and impartial third-party mediator who is agreeable to all parties involved in the dispute. The mediator's objective is to facilitate mutual understanding, foster common ground, develop an action plan for resolving the issue, and follow up with the parties to ensure that peace is maintained.

Mediators are expected to maintain their impartiality throughout the mediation discussions, allowing each party to present their case and arguments fairly and accurately without displaying bias towards one side. In a workplace context, a professional from the human resources department may serve as the third-party mediator. Although their role involves resolving conflicts with the company's interests in mind, they may not be entirely impartial due to their affiliation with the organization.

Arbitration is an even more formal method of ADR where parties vest authority in a third-party neutral decision maker (an arbitrator) they hire who will hear their case and issue a decision or arbitration award. Arbitrators are neutral decision-makers who are often experts in the law and the subject matter of the dispute. The nature of the settlement is typically determined by state laws, which dictate whether the parties are legally obliged to adhere to the arbitrator's decision or ruling.

A Continuum of Different ADR Methods

A Continuum of Different ADR Methods

To review, see:


4c. Explain the role of unions and collective bargaining in conflict resolution

  • What is collective bargaining?
  • Which legislation defines and regulates collective bargaining in the United States?

Collective bargaining is the negotiation process between the company or employer and an employee union. Resolving collective bargaining disputes often involves arbitration. The ultimate goal is for the employer and the union to reach a contractual agreement outlining union members' rights and responsibilities for a specified period. Non-union employees also tend to benefit from the negotiated agreement. Once the agreed-upon period expires, the parties engage in new negotiations to establish a fresh contract.

Throughout history, workers worldwide have formed guilds, coalitions, or unions to negotiate for increased pay and better working conditions. Unions step in to negotiate for workers who threaten to strike or refuse to work until the employer agrees to meet their terms. Employers threaten to fire the striking workers and hire new ones amenable to the current work conditions. Politicians often get involved when the country's economy or lack of public services is at stake. Unions have pushed employers to create healthier work environments by reducing child labor, paying workers overtime pay, providing healthcare and retirement benefits, and supplying special safety or protective gear.

Review the Wagner Act or National Labor Relations Act of 1935, the Taft-Hartley Act of 1947, which restricted labor union practices, and the Landrum-Friffling Act of 1959, which imposed several additional limitations on unions.

To review, see The Nature of Unions and Collective Bargaining.


4d. Discuss the pros and cons of mandatory arbitration agreements

  • What is mandatory arbitration?
  • What are the pros and cons of mandatory arbitration?

Many business contracts (rental, vendor, and employee agreements) include a clause that requires signers to participate in mandatory arbitration rather than go to a court of law should any complaints or disputes arise for the reasons we explore below. The results of arbitration may be binding or non-binding. In binding arbitration, the arbitrator's decision is final, and neither party can appeal the decision through the courts except in rare circumstances. In non-binding arbitration, the arbitrator's decision or award is a recommendation.

Individuals frequently use arbitration to resolve family law issues such as divorce, custody, and child support issues. Companies use arbitration to settle labor disagreements, business transactions, and property disputes according to business law.

Arbitration rules differ by state. Arbitration rules are more formal than mediation but less formal and restrictive for presenting evidence than in a trial (see learning outcome 4e). Arbitrators decide which evidence to allow, and they are not required to follow precedents or provide their reasoning in the final award. Regardless of the rules followed, arbitrations proceed according to external rules known to all parties involved.

Businesses insert these clauses into their contracts because they do not want to litigate disputes in court. The legal process is in the public eye, it may cost millions of dollars, it takes a long time, and the outcome is particularly risky because you may be forced to abide by the decision of an unsympathetic judge or jury. Mediation and arbitration are more private, less time-consuming, less costly, and less risky.

Many employees unwittingly sign forced arbitration clauses as part of their employment contracts in which they waive their right to sue their employer in court and must settle disputes through arbitration. These agreements benefit companies that prefer to keep these disputes and settlements private and out of the court system. Still, they stymie employees who seek damages from sexual harassment, workplace injuries, anti-discrimination, and similar lawsuits.

Public Citizen, a nonprofit organization representing consumer interests in Congress, reports that consumers usually fare better in litigation than arbitration. Issues of fairness are magnified in these disputes where the parties have unequal levels of wealth and power. Forced arbitration clauses may cause the injured party to forfeit their right to appeal an arbitration decision or participate in any kind of class action lawsuit, in which individuals with a similar issue sue as one collective group.

To review, see Arbitration and Argument Analysis: An Epic Day for Employers in Arbitration.


4e. Compare formal and informal conflict resolution strategies

  • What are some examples of informal conflict resolution strategies?

The common dispute resolution methods we have discussed – negotiation, mediation, arbitration, and litigation – range from informal to formal with increasing amounts of time, effort, and costs. You can negotiate a disagreement among friends over dinner, mediate a work dispute with the help of a work colleague or human resource professional, resolve a disagreement about your lease with your landlord or contractor with a hired professional arbiter or panel of arbitrators, or file a lawsuit in a court of law to seek monetary damages in the courtroom.

Negotiation and mediation offer more flexibility, whereas the arbitration process can involve many of the formal procedures observed in a courtroom trial. This includes the presentation of evidence, witness testimonies, discussion of relevant local laws or ordinances, and examination of signed legal documents, such as contracts, damage receipts, and other forms of evidence. The parties typically meet to discuss and present their arguments and evidence before the arbitrator, who then delivers their judgment, determines the amount of damages owed, and provides a specific course of action within a defined timeframe.

Companies seeking to keep disputes private often opt for arbitration instead of a courtroom trial, as the proceedings and settlement outcomes do not become part of the public record accessible to journalists, potential clients, and other interested parties. The arbitration process tends to be less time-consuming and costly than a courtroom trial, although it can still involve significant expenses for the participants.

To review, see:


4f. Explain the importance of legal standing in litigation

  • What is legal standing?

Anyone who pays the court filing fee and hires an attorney can bring a lawsuit, but the court may decide not to hear their case. There may be no case or controversy, no law supporting the plaintiff's claim, the wrong court, too much time has lapsed (a statute of limitations problem), or the plaintiff may lack legal standing. Only people whose interests are directly affected have the legal right to bring a lawsuit. Similarly, you cannot sue on another person's behalf because you cannot demonstrate that your legal interests or rights have been violated.

To review, see When to Bring a Lawsuit.


4g. Explain how class action lawsuits affect corporations

  • What are some legal risk management strategies?
  • What is reputational risk?

Customers can join forces to create a more powerful entity than if they were to sue individually. For example, during a class action suit, customers can pool their resources to hire a more experienced attorney and divide the damages among themselves once the jury has reached a verdict. Attorneys may agree to work on the case for no charge if they lose, but they will receive a percentage of the damages if they win the case. These damages can drain a business' financial resources and ruin its reputation due to media exposure.

Ford Motor Company knowingly endangered its customers in the Ford Pinto case. During their legal risk analysis, they identified the risk (the gas tanks exploded, but the car met minimum federal safety standards), evaluated the financial impact of lawsuits on the company ($49.5 million annually), and the annual cost to fix the vehicle defect ($137 million – adding $11 to the cost of each car). However, Ford's reputational risk was in jeopardy during this case. Quantitative risk evaluation in dollars and cents does not tell the whole story. Ford lost many more lawsuits and their damaged reputation, which money cannot buy!

To review, see When to Bring a Lawsuit and Law and Legal Risk Management.


4h. Describe the jury trial process

  • What are the steps in a jury trial?

The first step in a trial is selecting a jury. The judge and attorneys for each side question potential jurors during voir dire to ensure they are unbiased. Depending on the type of trial, juries can include 6-12 people with at least two alternate jurors. The judge's main responsibility is to ensure the trial is fair to both sides, such as when the judge rules on the admissibility of certain evidence.

The second step is the opening statement from the plaintiff's lawyer (and from the defendant's lawyer, depending on the type of trial). The lawyer for the plaintiff calls witnesses and presents relevant physical evidence as proof. After direct testimony from each witness ends, the defendant's lawyer may cross-examine the witness. After cross-examination, the plaintiff may re-examine the witness, followed by re-cross-examination.

After the plaintiff has made their case, the defendant presents their side using the same procedure described above. The plaintiff can present rebuttal witnesses, and the defendant can present surrebuttal witnesses. After all of the testimony has been introduced, either party can ask the judge for a directed verdict.

If the judge refuses to grant a directed verdict, the attorney for each side presents closing arguments to the jury. The judge instructs the jury on the meaning of the law as it relates to this case and tells them what facts they must use to determine a verdict for one party or the other. After the judge gives their instructions, the jury retires to a private room to reach a verdict. Depending on the type of case, the jury must reach a unanimous decision or a majority verdict. If they cannot decide, the outcome is a hung jury. The plaintiff will decide whether to retry the case at a later date. Once the jury delivers their verdict, the judge dismisses them and regains control of the case.

The trial process is clear, but there are many variables, and the outcome is unpredictable. There are many disruptions. The judge may accept or overrule a lawyer's objections. Witnesses' testimony can favor either side. Attorneys may be more or less skillful, and jurors may need to be replaced. Have you ever been called for jury duty? Were you chosen to hear a case? What is the most difficult part of jury duty?

To review, see The Trial.


4i. Identify risks companies face when they use litigation to resolve conflicts rather than ADR strategies

  • What types of risks do companies face when they rely on litigation instead of ADR strategies?

Corporations should conduct a risk analysis to determine their risk exposure when resolving disputes. Their options include risk avoidance, reduction, shifting, and acceptance. In every scenario, businesses should also consider their reputational risk.

They should be especially cognizant of these factors when deciding whether to proceed with a trial or do everything they can to avoid it at all costs. As we have discussed throughout this unit, a trial may cost millions of dollars to pay attorney fees and any damages awarded, the process takes a long time, and the outcome is particularly risky because you may be forced to abide by the decision of an unsympathetic judge or jury. The legal process often occurs in the public eye.

For example, customers can bring a class action lawsuit for sub-par service or defective products. The media usually report on these class-action lawsuits, which can damage the company's reputation. It can be difficult for a business to recover from public exposure that deems its business practices, products, or services unethical, overpriced, inferior, or dangerous.

To review, see Law and Legal Risk Management and The Trial.


4j. Discuss methods managers can use to understand the perspective of their employees

  • What are some techniques that can be used to open lines of communication between managers and employees?
  • What are some strategies for understanding the perspective of team members?
  • How can teams in conflict achieve a win-win outcome through integration?

Team leaders can remedy problems with team dynamics. The first step is to work with the team to develop a shared understanding of why members are not collaborating effectively. Tools available include team surveys, interviews with team members, and 360-degree evaluations. Coaching for this intervention focuses on helping team members have unemotional conversations. Intervention should not be a personal attack or criticism but an essential dialogue to help the organization perform better.

There are several steps for understanding employees to resolve conflict:

  1. Listen before talking. Many conflicts result from poor communication.
  2. Never use email to resolve complex issues.
  3. Pick up the phone to diffuse emotion.
  4. Never send an emotional email or make an emotional statement.
  5. Take a "walk in the woods" to discover common interests that lead to new solutions.

Another way to view this process is by considering the following:

  1. Self-interests. Participants articulate their view of key problems, issues, and options.
  2. Enlarged interests. Participants reframe their understanding of the problems and options based on integrative listening and confidence-building from step one.
  3. Enlightened interests. The group actively encourages innovative thinking and problem-solving, resulting in new ideas and perspectives that were not previously taken into account.
  4. Aligned interests. Participants build common ground perspectives, priorities, action items, agreements, or plans for moving forward.

To review, see:


4k. Define what it means to work toward a common goal to resolve conflicts

  • How can team leaders assist their team members in working together towards a shared objective to resolve conflicts?

Team members should work together toward common goals that benefit the whole organization rather than focus on individual agendas. This process can be painstaking since each party or stakeholder must know they can trust each other to speak frankly, knowing each will keep sensitive information confidential and that individuals will follow through on their promises and commitments. Working together toward a common goal can make secondary disagreements seem irrelevant or less important.

The shared goal may be to work together in ways that positively impact the organization or company for "the good of the order." Team members who work together on different projects within an organization share common goals. Resolving a simple dispute could be more important than risking discord and disruption that could hinder progress.

To review, see:


4l. List some common methods of progressive discipline

  • What is progressive discipline?

There are usually two reasons for disciplining employees: performance issues and misconduct. Poor performance is usually due to a lack of training, skills, communication, or motivation. It can often be solved with coaching and performance management. Misconduct is more serious because it is deliberate and involves acts of defiance. Misconduct requires progressive discipline and termination in extreme cases. Grounds for immediate termination include theft, fraud, embezzlement, and lack of motivation.

Progressive discipline involves employing increasingly severe steps or measures when an employee fails to correct problems after being given a reasonable opportunity. The underlying principle is to use the least severe action necessary to correct the behavior or situation. For example, these steps may include verbal counseling, a written warning, suspension without pay, and termination. Employees should be able to correct the problem or behavior after each step or risk termination.

The employer should document the steps taken during a progressive discipline program. They should have just cause for termination or provide sufficient notice or severance after a probationary period.

To review, see Have a Performance Conversation with an Employee and Progressive Discipline and Termination Processes.


4m. Discuss ways managers engage workers who are not performing according to expectations

  • What is the process for conducting a performance problem with an employee?

The purpose of a performance review should not be to punish an employee who is not meeting expectations. It is to improve their performance. This conversation gets more difficult the longer you wait because employees will assume their behavior is acceptable if no one tells them otherwise. Delaying disciplinary conversations can reduce team morale and undermine the leader's credibility.

To inform an employee that there is a problem, start by letting the employee know about your concern and sharing specific observations of their behavior. Explain how their behavior impacts the team and clarify the expected behavior. Encourage the employee to suggest solutions on how to address the situation. Communicate the potential consequences if the issue remains unresolved. Set a follow-up date that both parties agree upon and end the conversation by expressing your confidence in the employee's ability to make positive changes.

To review, see Have a Performance Conversation with an Employee and Progressive Discipline and Termination Processes.


Unit 4 Vocabulary

  • accommodation
  • aligned interests
  • alternative dispute resolution
  • arbitrator
  • arbitration
  • binding arbitration
  • child labor
  • collaborating
  • collective bargaining
  • common ground
  • competition
  • compromise
  • conflict management
  • conflict avoidance
  • conflict resolution
  • cross-examination
  • defendant
  • embezzlement
  • enlarged interests
  • enlightened interests
  • fraud
  • guild
  • jury
  • Landrum-Griffin Act of 1959
  • legal standing
  • mediation
  • mediator
  • misconduct
  • National Labor Relations Act of 1935, Wagner Act
  • non-binding arbitration
  • plaintiff
  • progressive discipline
  • rebuttal
  • risk analysis
  • self-interests
  • suspension without pay
  • Taft-Hartley Act of 1947
  • termination
  • third party
  • trial
  • union
  • verbal counseling