Disputes arise for all organizations. Dealing with a dispute constructively can enable the organization to achieve its ultimate objectives, save on resources, avoid financial exposure, and protect its reputation. In contrast, failing to effectively manage a dispute can negatively impact an organization and risks damaging internal and external relationships and morale.
It is beneficial for an organization to have an effective dispute resolution strategy to ensure that it consistently uses the most appropriate forms of dispute resolution. In order to add value the strategy needs to reflect the organization’s mind-set, be flexible, and outcome-focused. The ultimate goal of such a strategy is to ensure that disputes are managed in a way that is in the best interests of the organization whilst also being cost- effective and protecting the organization’s reputation.
The default dispute resolution processes within many organizations are negotiation, litigation and arbitration. The drawbacks of litigation and arbitration are that they can be time-consuming and expensive. ADR encompasses a range of options, falling between litigation and arbitration on the one hand and negotiation on the other, for the effective resolution of disputes. These include mediation, expert determination, adjudication and early neutral evaluation; mediation is the most frequently used option.