It perhaps stands to reason that the culture of our workplaces plays a big role in how it behaves, but that this culture truly comes out in times of stress.  A new study from the University of Illinois illustrates this aptly by documenting how conflict resolution in the workplace, and our approach to it, is indelibly marked by the culture of the workplace.

The authors highlight the growth in use of third-party dispute resolution mechanisms, as organizations strive to both contain the costs of such disputes, and keep them out of the public eye.

“Since the 1970s, firms have tried to channel workplace conflict in such a way that it doesn’t always end up litigated in court,” they explain. “Litigation is very expensive, there’s a lot of uncertainty around the process, and it can be very damaging to relationships between employees and managers.”

Alternative disputes

Despite the growth of this field however, it remains an often understudied domain.  It’s a gap the researchers attempt to fill by exploring the link between the use of such alternative dispute resolution methods and the culture of the firm.

Several hundred general counsels and high-ranking attorneys from Fortune 1000 companies were quizzed about what drives them to use alternative dispute resolution methods.  The findings were then augmented with public data on things such as the size of the firm and its financial performance.

Four clear strategic approaches materialized from the analysis:

• When firms valued efficiency highly, then mediation was frequently used
• When firms valued satisfaction, especially in terms of dispute resolution, then mediation was also often used
• When the focus was on sustainable resolutions however, approaches tended to veer between mediation and arbitration
• Last, but not least, a litigation avoidance strategy would often have no discernible impact on the approach used during conflict resolution

The researchers believe that better understanding the motives can help to mitigate some of the controversy around conflict resolution.  They accept that arbitration is often controversial because there is a sense that companies use it to ward of lawsuits.

“Arbitration is a quasi-judicial process that is essentially a replication of the court system but is conducted by a private third-party arbitrator,” they say. “The reason you might want to use arbitration over litigation would be that it’s more efficient, cost-effective and informal; some would argue that it leads to more equitable outcomes. But others reject that idea, and argue that it allows for an unleveling of the playing field that benefits employers, so really it depends on which side of the fence you’re on.”

Mediation, which is more of a voluntary process, not only isn’t binding, but also aims to provide an outcome that is acceptable to both parties.  The data shows that both approaches are used, in no small part because companies believe in their ability to provide a satisfactory outcome better than litigation can.

“In contrast to litigation, arbitration allows employers to maintain nearly total control over the rules that lead to the outcomes of employment disputes,” the researchers conclude. “Employers can, for example, ensure the confidentiality of the proceedings, exercise significant influence on the selection of the neutral party and limit discovery. Perhaps most importantly, the cadre of experienced, neutral third-party arbitrators who specialize in employment disputes is growing, and many employers would prefer to have them decide such disputes rather than judges and juries.”