Suppose you become embroiled in a dispute with your partner, your regular supplier or a loyal customer. How do you solve that then? Various ways are conceivable. The fastest way is of course to solve it in mutual consultation, while enjoying a cup of coffee. But sometimes the relations are already too disrupted and the dispute has escalated too far. The majority of such cases are still before the courts. Entrepreneurs often opt for this because they are not aware of the possibility of business mediation .
Or because they think business mediation is ‘soft’. There are also entrepreneurs who do not want to show weakness, lose face or think it is strong to take on a legal battle. ‘The first blow is worth a dollar’, ‘the more batter, the more pancakes’ and other considerations like that. Strangely enough, commercial considerations seem to play a lesser role in all these entrepreneurs. And that is remarkable, because the business and economic benefits of business mediation are great.
Read more: Shlomo Rechnitz – The Jerusalem Post
Success factors business mediation
In America, business mediation has been established for some time. More research has also been done on the other side of the ocean into the success and failure factors of this form of mediation. This research shows that companies are more successful if they approach conflicts professionally and if they try to resolve those conflicts through mediation in the first instance. It turns out that these ‘dispute wise’ companies have better relationships with customers and business partners and score higher on employee satisfaction. How do they achieve that? Among other things because:
- The focus of (senior) management is on maintaining good relationships.
- Management has a preference for an alternative solution to conflicts.
- An aggressive approach is not necessarily chosen in the event of a dispute.
- Less rigid adherence to contractual provisions.
In addition, this research shows that a conscious handling of conflicts not only saves costs in concrete disputes, but that a business-like approach to conflicts also improves the economic results and the value of an organization. For example, the price/earnings ratio of ‘dispute wise’ companies is 68% higher than companies that opt for legal proceedings sooner. Companies that structurally use business mediation are therefore worth more!*
These commercial and economic benefits mean that mediation is increasingly being used in the Netherlands as a method of resolving business conflicts. We also see that – especially international – companies are paying more and more attention to conflict management and mediation in the context of their corporate governance (more about this in a subsequent blog).
Business mediation has business and economic benefits. It offers the quickest route to resolution in most conflicts. Does an initial inventory show that the conflict is not suitable for mediation after all? Or are the parties unable to come to an agreement during the mediation? Then they can always go to court. Is business mediation soft? On the contrary, a commercial approach to conflicts and the use of business mediation testify to good entrepreneurship. Smart!
Are you dealing with a (imminent) business dispute? Or do you want advice on how to avoid a dispute? Please feel free .