Conflict and the Arbitration Process

High-performing Directors and Team Leaders think conflict is a part of life or people working together, they get involved to resolve conflicts without becoming judgemental towards either party, always to the satisfaction of everyone involved. They believe that conflict is unavoidable.

Low performing Directors and Team Leaders believe that conflict must at all costs be avoided, that it may be best if they do not get involved, and that any conflict issues would be better left in the hands of the Human Resources team to resolve.

A lack of conflict management skills decreases organisational, team and staff cohesion and will invariably increase costs. Conflicts in the workplace can snowball out of control, causing people to avoid them to escape the problems presented where a conflict exists.

For example, a disagreement at work can cause two team members to start verbally attacking one another. Eventually, to avoid this daily conflict, one or both team members may not show up for work, preferring to take time off to prevent the stress symptoms of conflict.

However, if conflict issues are not dealt with properly, the situation can only go from bad to worse. The financial costs of poor conflict management can be staggering as team members start to involve others in the conflict rather than concentrating on the organisation's needs.

To start discussing methods of dealing with conflict, we must first look at the types of conflict disputes to identify them. In conflict management, there are, in general, only two types of conflict:

• Positive conflict: this is where most conflict starts, as a difference of opinion about a subject that leads to an active disagreement with another person.
• Negative conflict: where conflict becomes personal, and the difference of opinion becomes embroiled in personality clashes and the will to win at all costs, rather than resolving an issue of organisational importance.

Positive conflict is what many Directors and Team Leaders strive for, as it is not a personal attack on another team member. Instead, it is a disagreement that challenges the idea put forth by someone else that uses conflict management to achieve opportunities for an agreement to be reached through negotiation or mediation.

Positive conflict is productive as it generates ideas and conversation. Without conflict management, disagreements can become a negative conflict where a team member feels that their views are being attacked personally.

Harmful conflicts are not progressive and usually originate from missed opportunities when the discussion of a subject turns into insults. Conflict management may prevent the conflict from becoming negative. The following are examples of conflict resolution strategies:

Compromise (Win/Win): The compromise method calls for both team members to set their differences aside to reach a common ground where both sides agree. Usually, this strategy is used when both team members have equal status within an organisation but are willing to work together. The issue with this method is that after agreements are met, both team members can be left dissatisfied with the outcome. Compromise, if applied to all conflicts, can be highly time-consuming.

Accommodation (Lose/Win): With this method of conflict management, one team member takes a passive role. They essentially give up their side of a disagreement for the other team member to win. Sometimes keeping the peace is better, but it does have its drawbacks. Over usage of the accommodation method can lead to team members feeling “accommodating” and put a real drag on productivity within an organisation due to their feeling unimportant.

Avoiding (Lose/Lose): When a conflict is presented to a Director or Team Leader who does not want to deal with it, they choose the “avoiding” conflict management style. By sidestepping the conflict, they try not to step on anyone's toes diplomatically or want to postpone a mediation process to rethink the situation. By preventing the conflict, nobody wins because nothing is resolved. If overused to deal with conflicts, the dispute can worsen or even backfire, with one or the other team member leaving the organisation.

Competition (Win/Lose): This method of conflict resolution pits two team members against one another and is heavily competitive. Team members who use this conflict resolution strategy are typically highly power-driven individuals. These conflicts can be won by several methods, such as an argument of ideas, pulling rank or using leverage against each other.

Though competition breeds problems, it must be considered more deeply before use. While competing can be productive, it can also cause problems when used excessively or inappropriately. It can lead to misuse of power, fraudulent acts and unethical or illegal methods being used to “win” the conflict.

Collaboration (Win/Win): Collaboration is what every Director or Team Leader should strive for in conflict resolution as it is the opposite of avoiding. Collaboration takes the conflict head-on to combine the two ideas to utilise the strengths of both team members involved. However, this technique requires interpersonal communication skills to get both team members on the same page.

Trying to collaborate within conflict turns an argument into teamwork, increasing cohesion, meaning that both team members end in a win-win situation. However, one of the drawbacks of using this method is that it is time - and resource-consuming and unrealistic for every conflict.

Where conflict occurs outside of an organisation, perhaps with trading partners such as customers or suppliers, arbitration is a form of Alternative Dispute Resolution (ADR). It is commonly used to resolve disputes outside the courts.

The dispute will be decided by one or more persons known as the "Arbitrator", "Arbiter", or “Arbitral Tribunal”, who renders the “Arbitration award”. An arbitration award is legally binding on both sides and enforceable in the courts.

Arbitration is often used for the resolution of commercial disputes, particularly in the context of international commercial transactions. In specific countries such as the US and the UK, arbitration is frequently employed in consumer and employment matters where it may be mandated by the terms of an employment or commercial contract.

The arbitration clause in a contract may include a waiver of the right to bring a class action claim. However, mandatory consumer and employment arbitration should be distinguished from consensual arbitration, particularly in commercial arbitration.

Arbitration can be either voluntary or mandatory. Mandatory arbitration is enacted through statute or a contract that one Party imposes on the other. The Parties agree to put all existing or future disputes to arbitration which can be either binding or non-binding.

Non-binding arbitration is similar to mediation, as an award cannot be imposed on either Party. However, the principal distinction is that whereas a Mediator will try to help the Parties find a middle ground on which to compromise, the non-binding Arbiter remains removed from the settlement process.

It will only give a determination of liability and, if appropriate, an indication of the quantum of damages payable. By one definition, arbitration is binding, and non-binding arbitration is technically not arbitration but a form of mediation.

Arbitration is a procedure in which a dispute is resolved by an impartial Adjudicator upon which the Parties to the conflict have agreed or that legislation has decreed will be final and binding. There are limited rights to review and appeal against an Arbitration ward, in choosing arbitration, the Parties to the dispute opt for a private dispute resolution procedure instead of going to court. Its principal characteristics are:

• Arbitration is consensual: arbitration can only occur if both Parties have agreed to it. In the case of future disputes arising under a contract, the Parties usually insert an arbitration clause into the relevant contract. However, an existing dispute can be referred to arbitration using a submission agreement between the Parties. In contrast to mediation, either Party cannot unilaterally withdraw from arbitration.
• The Parties to the dispute choose the Arbitrator(s): Under general Arbitration protocol, the team members can select a sole Arbitrator together. However, if they decide to have a three-member Arbitral Tribunal, each Party may appoint one of the Arbitrators. Those two individuals then agree on the presiding Arbitrator.
• Arbitration is neutral: In addition to selecting neutrals of appropriate nationality, the parties to the dispute can choose such essential elements as the applicable law, language, and venue of the arbitration.
• Arbitration is a confidential procedure: arbitration protocol specifically protects the confidentiality of the existence of the arbitration, any disclosures made during that procedure and the award. In certain circumstances, arbitration protocol allows one Party to restrict access to trade secrets or confidential information submitted to the Arbitral Tribunal or an advisor to the Tribunal.
• The decision of the Arbitral Tribunal is final and easy to enforce as, under arbitration protocol, the Parties agree to carry out the conclusion of the Arbitral Tribunal without delay.

More articles can be found at?Procurement and Supply Chain Management Made Simple. A look at procurement and supply chain management issues to assist organisations and people in increasing the quality, efficiency, and effectiveness in the supply of their products and services to customers' delight. ??? Simon Callier. All rights reserved.

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