Conscious conflict management improves business performance

In a professional article, the International Mediation Institute highlights the benefits of alternative dispute resolution for corporate disputes.

In 2006, the American Arbitration Association published a study of companies that consciously manage their conflicts using a so-called portfolio approach. This means that in these companies, conflicts are viewed from a broader perspective, each dispute is analysed in relation to the others, with the aim of minimising the costs, time and risk involved and preserving valuable business relationships. Companies that manage their conflicts consciously also engage in conflict prevention programmes and develop operating conditions that help prevent conflicts from arising and escalating.

Firms that make every effort to manage their conflicts consciously have a 281TTP2T higher price-to-earnings ratio than the average for public companies, and 681TTP2T higher than the least conscious firms. The results reflect the interest behind the high level of awareness to maintain good relations with all stakeholders as much as possible.

The main benefits of conscious corporate conflict management are:

• Better, stronger relationships with customers, suppliers, employees. Business partners perceive the relationship with the company as excellent.
• They value the importance of alternative dispute resolution, including its speed and clarity of process, and prefer this form of conflict resolution to litigation.
• Lower lawyer costs and greater internal efficiency.
• Better use of the resources of the corporate legal department.

In 2010, a European study was carried out on the subject, funded by the European Commission, to assess the state of alternative dispute resolution in the European Union. The study is intended to help implement the EU Mediation Directive, which has the ultimate goal of increasing the number of cross-border commercial transactions. Compared to litigation, arbitration takes less time, but still takes on average about a year. Mediation is much faster and more cost-effective.

Full article in English HERE read at

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