Resolving Intra-Organization Conflicts
A look at using mediation/arbitration techniques for resolving intra-organization disputes.
Intra-organization disputes are certainly not a new phenomenon. However, the manner in which some organizations are resolving them represents both a marked departure from how such disputes have been traditionally addressed and certainly a novel application of some established mediation/arbitration techniques. It is widely acknowledged that intra-organization disputes can negatively impact an organization in significant ways. These disputes can reduce productivity, harm morale, and diminish an organization’s stated goal of hiring and retaining the best qualified and most competent employees. Often used in litigation, mediation/arbitration techniques are increasingly being utilized by organizations to manage the challenges presented by intra-organizational disputes. This article provides an overview of some of these mediation/arbitration techniques.
Disputes in the Workplace
The very nature of many business activities breeds disputes. In many instances an employee will avoid actual or perceived conflict until the situation seems to be unmanageable. Something akin to an obsession as to how to resolve the conflict may lead to an inability to focus upon one’s job duties and responsibilities. Such an impasse certainly negatively impacts productivity and can increase absenteeism as well as employee turnover.
Business organizations increasingly rely upon established, but modified dispute resolution techniques to provide a structured approach to identify and resolve workplace conflicts that have become disputes. Sandra Gleason notes that conflict between employees is oftentimes the result of social interaction. Workplace interdependence and such things as job frustration, personality characteristics, differences in culture, race, values, gender, personal preferences, and social status can cause conflicts.
One study that focused upon sources of interpersonal conflicts in the workplace found approximately 62 percent of the primary issues that result in “conflict between subordinates and supervisors” derived from issues such as goal conflict, rejection of employee input, vague task assignments, performance evaluations, work scheduling, and workloads. The same study found that approximately 61 percent of the primary issues that generated “conflict between co-workers” concerned personalities, workload allocation, goal conflicts and ethics concerns.  An employee who is in conflict with a supervisor is generally inclined to discuss the conflict with the supervisor. However, an employee who is in conflict with a co-worker is more likely to avoid the co-worker and not address the conflict.
For example, at Company A, Mary Smith, an accounts payable clerk, has the responsibility of reviewing and reimbursing John Brown, a sales representative. Brown must provide Smith with properly documented reasonable business expenses he incurs on behalf of the company. Ms. Smith recently did not reimburse Mr. Brown for all of the business expenses that he had incurred. She took the position that he had not properly documented some of the expenses for which he was seeking reimbursement. Mr. Brown became angry at her refusal to reimburse him for all his incurred business expenses and confronted her in the presence of some of her co-workers. After the unpleasant experience and in an effort to avoid any further unpleasant experiences, Smith routinely reimbursed Brown for any and all of his business expenses submitted. Reimbursement was provided regardless of whether or not the submittals were properly documented.
In this example, Company A may be reimbursing John Brown for business expenses that are not properly documented, perhaps not even incurred. Hurt and embarrassed by the confrontation with Brown, Mary Smith may be less effective in her job of reviewing expense report submittals and inclined to allow John Brown to engage in conduct that violates company policy. If the company had an intra-organization dispute resolution policy that encouraged or required the resolution of disputes such as that between Smith and Brown, the avoidance strategy adopted by Ms. Smith could be replaced by a cost effective application of mediation or arbitration techniques that would resolve the conflict.
Alternative Dispute Resolution (ADR)
In a Harvard Business Review article regarding alternative dispute resolution, Todd Carver and Albert Vondra explore the application of mediation and arbitration techniques to inter-organization disputes. They state that “Back in the 1980’s experts and executives alike heralded alternative dispute resolution (ADR) as a sensible cost-effective way to keep corporations out of court and away from the kind of litigation that devastates winners almost as much as losers.” The way to resolve inter-organizational disputes had traditionally been to litigate. The authors go on to point out “…but the great hopes for ADR faded quickly.” 
It is interesting that what some argue has been less than a success in resolving “inter-organization” disputes in a cost-effective manner is viewed as a significant success in resolving “intra-organization” disputes in a cost-effective manner. Unfortunately, ADR far too often simply replicates the litigation process. ADR is cost-effective because it generally takes less time to resolve disputes than does traditional litigation. Arbitration is often characterized as an adjudicated procedure that allows the parties to put forth formal legal arguments and engage in discovery such as interrogatories and depositions in an effort to develop factual evidence. There are costs associated with such efforts.
In an HR Focus article, Peter Philips considers reasons to mediate intra-organization disputes. He cites a panel of 71 employment law practitioners and experts who at an Institute for Dispute Resolution meeting prepared and released a report urging that mediation be utilized by business organizations to resolve employment or intra-organization disputes. The panel’s conclusion was that “When effectively communicated to employees and properly managed, a procedure of mediating workplace claims can yield quick, inexpensive, and just resolutions in a confidential and respectful manner.” 
An increasing number of business organizations are opting to resolve intra-organization disputes by mediation. Cost is one factor. Mediation is far less costly than arbitration or litigation. Philips references a study that found the median cost of intra-organization mediation was $2,750 while the median cost of intra-organization arbitration was $11,800. However, mediation cost savings are not solely monetary.
Mediation generally requires significantly less time than does arbitration. Intra-organization disputes are often emotionally charged. Mediation is regularly referred to as the least hostile and most effective way to resolve intra-organization disputes. This claim is reflected in a 1998 study by the Cornell/PERC Institute on Conflict Resolution that surveyed 600 of the Fortune 1000 companies and found that 87 percent of those companies responding had used mediation and that 63 percent of corporate counsels surveyed preferred mediation.
Mediation is a cost effective measure that utilizes proven methods. The mediator serves as an objective, neutral third party in the dispute resolution efforts. The mediator is not delegated the authority to render a judgment or otherwise resolve the dispute. In general terms, the mediator facilitates discussions between the parties that address their respective needs and concerns.
Established mediation techniques require all employees embroiled in a dispute be responsible for making a meaningful contribution to the resolution of the dispute without addressing fault. The employees must be coached and trained relative to using appropriate and effective language and the requisite skills necessary to communicate clearly and to discover viable solutions. Such training is generally provided by an experienced mediator.
Arbitration of disputes is somewhat different. The arbitrator is delegated the authority to render a judgment or otherwise resolve the dispute. In some business organizations arbitration follows an unsuccessful mediation. In other business organizations there may be no mediation effort, and intra-organization disputes are resolved by relying solely upon arbitration techniques.
Arbitration of intra-organization disputes is generally a more formal process than mediation. The outcome of arbitration can be binding upon one or both of the parties. Furthermore, there may be no opportunity to appeal an arbitrator’s decision, including its merits. For these reasons as well as others to be considered later, arbitration is often viewed as less attractive than is mediation as a means for resolving intra-organization disputes.
Dispute Resolution Practices
In any event, a conflict must be understood to be a dispute before any appropriate resolution measures can be implemented and the dispute resolved. Business organizations that have adopted mediation/arbitration techniques for the resolution of intra-organization disputes generally include an agreement to take part in dispute resolution practices in the event of disputes as something akin to a condition of employment. These techniques are often referenced in the offer of employment, and a new employee must acknowledge their understanding that intra-organization disputes will be addressed by utilization of mediation/arbitration techniques and agree to participate in all such efforts. Use of such dispute resolution techniques is also often presented to existing employees as a condition of continuing employment.
Companies are more frequently providing training for employees relative to intra-organization disputes. The training is comprised of two components. First, employees are trained how to identify conflicts that are appropriate for mediation/arbitration. Such conflicts generally involve ethical issues, violation of company policy, and/or conduct that interferes with one’s abilities to meet one’s job duties and responsibilities. Second, employees are advised of the requisite procedures to follow—i.e., whom to advise of the conflict.
Many employers are learning from sexual harassment cases that it is imperative that employees have a clear understanding of conflict reporting procedures. Company policy may require that the employee report the conflict to their immediate supervisor or manager. However, if the conflict in question is between the employee and an immediate supervisor or manager, as can be the case in sexual harassment policies, there must be alternatives.
About the Author(s)
Jeffrey Schieberl, JD, has several years of senior management experience. He has served as president/CEO of a California corporation, vice president of Law/Government Relations of another California corporation, gubernatorial appointee to an Interstate Energy Commission and as executive director of an industry association. Dr. Schieberl has been a member of the Pepperdine University practitioner faculty for more than fifteen years. He earned his BA degree at the University of Southern California, received his MBA degree from Pepperdine University, and was granted a JD degree by Southwestern University School of Law. For further information go to www.lsconsultancy.com. His consulting practice provides his expertise to clients relative to a variety of issues.