Week 9 - The Dynamics of Disputes and Third-Party Help

Question 1

Define disputes

Answer 1

When one person or party makes a claim or demand on another person or party, and that claim is rejected

BATNAs are usually linked in a dispute situation

Not everything is a dispute, somethings are just a transaction

Question 2

Ways to resolve a dispute

Answer 2

• Work out a solution by themselves
• Use an outside party
• Impose a solution based on power
• Dropping the claim

Question 3

Approaches available to resolve a dispute (three)

Answer 3

• Interests
• Rights
• Power

Question 4

Interest-based perspective

Answer 4

People talk about their position but often what is at stake is their underlying interests

Parties who focus on the various interests in a dispute are often able to find ways to resolve that dispute.

Question 5

Rights-based perspective

Answer 5

People may be concerned about who is “right” - that is, who has legitimacy, who is correct, and what is fair

Disputes about rights are often resolved by helping the parties find a fair way to determine who is right or that they can both be right.

This resolution often requires the use of some standard or rule, such as taking turns, splitting it down the middle, or first come, first served, to settle the dispute.

Disputes over rights are often referred to formal or informal arbitrators to decide whose standards or rights are more appropriate.

Question 6

Power-based perspective

Answer 6

People may wish to resolve a conflict on the basis of who is stronger, is able to coerce the other, but more often, it is about imposing other types of costs—economic pressures, expertise, authority, and so on.

Disputes settled by power usually create clear winners and losers, with all the consequences that come from polarizing

Question 7

Four criteria for analyzing which approach to use

Answer 7

• Transaction costs: costs associated with each approach (tend to underestimate the
  costs associated with exercising a rights-based or power-based approach)

-Satisfaction with outcomes: how parties feel about possible settlements under each type of approach (In general, people are more satisfied with outcomes that use an interests-based approach than a rights or power approach)

• Effect on the relationship: impact or the effect each approach will have on how the parties feel about each other (affected by outcomes and also processes used)
• Likelihood of recurrence: ill resolution of the dispute be more or less likely to occur under one of the three approaches?

Question 8

General rule

Answer 8

As a general rule, resolving disputes based on interests will be less costly than using rights or power. In addition, resolving disputes based on rights is less costly than using power. When we say costly, we mean the extent to which the approach is measured against the four criteria

Although we generally advocate the use of an interests-based approach for resolving disputes, in many situations this is not possible or desirable. When interests are diametrically opposed, such as the situation between loggers and environmental groups, lawsuits or attempts at disruption might be the
costs associated with imposing one side’s will on another party can be high. A rights-based approach is often required in matters of public importance.

Using both rights and power to resolve disputes generally results in winners and losers. This can have long-term negative consequences for existing relationships.

Winning with power can lead to hollow victories, especially when the parties must continue working together.

Question 9

Third party help a.k.a alternative dispute resolution (ADR)

Answer 9

A third party is someone who isn’t directly involved in the dispute or negotiation, but who can help in resolving it

Two most common types are arbitration and mediation

Question 10

Warning signs that a third-party might be appropriate

Answer 10

• The emotional level between the parties is high
• Communication between the parties is poor or has completely broken down, or the parties appear to be talking “past” eachother
• Behaviour is negative (e.g. name calling)
• The parties strongly disagree about what information is necessary, available, or required
• Negotiations have broken down and there is an impasse

Question 11

Arbitration

Answer 11

An arbitrator is a third- party who takes control of shaping and determining an outcome

Question 12

Traditional arbitration

Answer 12

Each side presents their case and the arbitrator makes a final decisioni

Question 13

Final offer arbitration

Answer 13

The arbitrator must choose one of the proposals put forth by a disputant (chooses one of the two offers - parties’ best offers)

Tends to produce less extreme positions when cases are being presented

Question 14

Major advantages of arbitration

Answer 14

• The negotiation or dispute ends with a final solution
• The solution is usually binding, meaning that parties usually cannot choose whether to follow solution or not
• The solution is often seen as credible because arbitrators tend to be perceived as wise, fair, and impartial
• The costs of prolonging the dispute are avoided

Question 15

Major disadvantages to arbitration

Answer 15

• By putting control over the outcome in another person’s hands, each party takes a risk that the solution is one that they can live with - they can’t create their own outcome
• Parties may not like the outcome and issues may remain outstanding
• In comparison to mediation, there is less commitment to an arbitrator decision. When parties feel less committed to a decision, they will be less likely to implement it or be more resentful and so the resolution may not be permanent

Question 16

Mediation

Answer 16

A mediator is a third-party who works towards helping disputing parties create a solution themselves by facilitating communication and dispute resolution techniques amongst the parties

Question 17

A mediator’s opening statement includes…

Answer 17

• An explanation of the mediator’s role
• An explanation of the parties role (work with the mediator to develop an acceptable settlement)
• Some expectations about process, such as whether or not the parties will remain in the same room
• Some expectations about ground rules, including things like interruptions and whether the settlement is binding

Question 18

Mediation success factors

Answer 18

Mediation is more often successful under the following circumstances:

• the level of conflict is moderate and not excessively high
• the positions of the parties are understood by both parties
• both parties are motivated to settle
• the issues do not involve a basic conflict of values
• the level of power is relatively equal between the parties, or the power differential is appreciated by both parties

Question 19

Hybrid approaches

Answer 19

Med-Arb:
- First, the parties attempt traditional mediation
- If unsuccessful, the mediator will act as an arbitrator and make a binding decision on the parties after the parties have made their final submissions

Arb-Med:
- The arbitrator hold a hearing, but does not disclose their findings/decision
- The parties then attempt mediation
- If unsuccessful, the arbitrator will disclose the binding outcome

Question 20

Managerial third-party intervention styles

Answer 20

Managers handle disputes between subordinates and colleagues. Managers appear to think they mediate, but when observed in actual situations they typically exert far more control over the outcome than mediators (like an inquisitor)

1. Inquisitorial intervention: This was the most common style. A manager using an inquisitorial intervention exerts high control over both the process and the decision.
2. Adversarial intervention. Managers who use adversarial intervention exert high control over the decision but not the process (passively listens and says how to solve)
3. Provision of impetus. Managers who provide impetus typically do not exert control over the decision, and they exert only a small amount of control over the process (“what’s going on? you better solve this or I will for you”)

Mediational intervention, is the same as formal mediation but is not a style commonly observed among managers.

Question 21

Summary and key points

Answer 21

If possible, begin using an interest-based approach

Remember that in disputes, the BATNAs of the parties are usually linked. This is much less common in other negotiation situations

There is a time and a place for using either a rights-based or power-based approach, However, we suggest you carefully consider the possible costs, in a broad sense, before proceeding

When deciding whether or not to involve a third-party, consider how their role is likely to affect the process and the outcome