Four Ways To Work Out Business Disputes

Business owners have four options to resolve disputes with partners, vendors or customers. Each option is based on different assumptions, and entails a different cost. Therefore, it pays to understand them better.

Option #1 ? Direct negotiation

Direct negotiation is certainly the cheapest - but not necessarily the easiest ? way to resolve a conflict. A good place to start, is to get clear about what one wants, why, and how much one cares for the future relationship with the other person. The next step, is finding out how the situation looks from the other person's perspective. This task requires effective questioning, listening, and observing. The final negotiation step, is crafting an agreement that both parties believe to be better than all other alternatives.

To negotiate successfully one needs some planning, communication and negotiation skills. Without them, it is easy to end up with no deal, or a bad deal, or even a personal war.

Option #2 - Mediation

The goal of mediation is not to find who is right or wrong, but how the problem at hand can best be resolved. Mediation is a process in which parties who disagree meet with a neutral third-party, who facilitates their negotiations. The mediator doesn't have any decision-making authority. The parties decide how to resolve their problem, in a way that is mutually acceptable.

Since mediation is confidential, mediation discussions and materials are not admissible in court. In a sense, when people mediate they have everything to gain and nothing to lose. If they are able to reach a mutually acceptable agreement with the mediator's assistance, that's great. Otherwise, they can still use the remaining two options. And in that case, whatever they have said or heard, offered or counter-offered during mediation, doesn't matter.

Option #3 ? Arbitration

The business dispute is submitted to a neutral arbitrator, who examines the evidence, listens to the parties and renders a binding decision. The conflicting parties must accept the arbitrator's decision, no matter whether they like it or not. Arbitration is past-oriented, and requires a certain amount of fact-finding. Therefore, generally it takes more time (and money) than mediation, but less than litigation.

Option #4 ? Litigation

The fourth option is to let the judge decide which party is right or wrong, based on the facts and the law. In actuality, though, the vast majority of civil cases never get that far (some statistics say up to 90%). They settle out of court. A few days ? or even hours ? before the trial, the two conflicting parties, assisted by their respective attorneys, prefer to negotiate their own agreement, rather than running the risk of losing in court.

For business owners ? as well as for anyone else - litigation has two major drawbacks. First, it inevitably has a detrimental effect on the future relationship between the parties. Second, it can be quite expensive in terms of time, money and stress. Nonetheless, when a business dispute cannot be resolved any other way, litigation is a valid option.

About The Author

Giuseppe Leone is a Business and Workplace Mediator. Past President of SPIDR (Society of Professionals in Dispute Resolution) Hawaii Chapter. Mediator for Hawaii District Courts. Email: mediationplus@yahoo.com

How to Change Somebody?s Mind

Believe me, it's not easy! And sometimes, it doesn't work... Read More

7 Tips for Bartering Products and Services

What better way to gain a new customer than by... Read More

A One Stop Financial Solution

Amy Wright, 34, was extatic when her realtor showed her... Read More

Barter and Its Benefits

What is Barter? Barter involves 2 parties. Each party wants... Read More

Win-Win Power Negotiating

Let's talk about win-win negotiating. Instead of trying to dominate... Read More

Do You Want a Paycheck or a Passion? 10 Qualities Managers are Looking for in Hiring You

Based upon my research of over 300 managers in the... Read More

Negotiating Tactics: Don?t Let ?Good Guy ? Bad Guy? Control the Sales Negotiation

Counter one of the classic negotiating gambits by addressing it... Read More

How Barter Can Help Your Business Online or Offline

How Barter Can Help Your BusinessBarter trade is a powerful... Read More

Communicating Across Time Horizons

There was a time in my life when I sold... Read More

Can a Service Be a Commodity

Well Enron dealt with this a little for instance an... Read More