Conflict and Dispute in Commercial Project - Coursework Example

Conflict Management and Dispute Resolution Conflict and dispute have become an inevitable part of any commercial project in every business organisation. Organisations which undertake commercial projects have to effectively curb the possible conflicts that can hinder the attainment of project objectives. This is why conflict management has attained great impetus over the years. There is a high possibility for many conflicts to take place on a commercial project. If conflict is not properly managed it would certainly affect the profitability of the organisation which has undertaken the project. Then it would be difficult for the organisations to achieve the objectives of the projects. So to safeguard against all these possibilities, conflict management and dispute resolution are very essential. Conflict and disputes are inevitable on commercial projects right from the beginning of business itself. It is quite clear that conflict and dispute are inevitable on commercial projects. To check whether the contention is right, a deep understanding of the terms like conflict, dispute, etc. are essential. Conflict: The term conflict can be defined as “Friction or opposition resulting from actual or perceived differences or incompatibilities” (Business Dictionary). Conflict can be both destructive as well as constructive. It has positive and negative aspects. Conflicts mainly arise from the difference of perception among the people. Individuals and groups perceive things in a different manner and thus difference in perception becomes the basis of conflict. The difference in perception can lead to conflict and there by the emergence of new ideas takes place. That’s why it is said that to an extent conflict should be encouraged. So conflict is good and constructive to a certain extent and after the level it is bad and destructive. It is very difficult to determine the degree to which conflict in an organisation is to be encouraged. Dispute: The term dispute is defined as “ a disagreement or difference that arises in connection with the entering into, renewing, or revising a collective agreement and in respect of which arbitration or conciliation may be requested’’ (Treasury Board of Canada Secretariat) . Disputes can be in connection with any matter concerning two or more individuals or groups. Unlike conflict, dispute is not so constructive in nature. The subject matter of a dispute can be anything related to the entering into, renewing of, or revising a collective agreement. Dispute can take place mainly among people or groups. Conflict management: In order to make use of the possible conflict in a constructive manner conflict management is essential. Conflict management is defined as “the practice of identifying and handling conflict in a sensible, fair, and efficient manner”. To handle the possible conflict situations effectively communication, problem solving and negotiation skills are necessary. Without these skills conflict management becomes a strenuous task which is quite impossible. Dispute resolution: dispute resolution is necessary to deal with the disputes effectively. Dispute resolution can be defined as “an agreement reached between two or more parties detailing the solution or settlement of an earlier problem or dispute” (Queensland Government). When a solution is sought to the dispute or point of controversy through a mutual agreement between the parties it is known as dispute resolution. Dispute resolution plays an important role in settling the disputes that took place in an earlier point of time effectively. All the above mentioned terms have wider importance in conflict management and dispute resolution. It would be difficult to make a meticulous discussion, on the argument that conflict and disputes are inevitable on commercial projects without a proper understanding of these terms. The effective use of the tools of dispute resolution and conflict management helps the organisations get rid of unnecessary conflict and dispute regarding some commercially viable projects. If dispute and conflict are not checked properly at the grass root level, the objectives of the organisation as well as the commercial projects may not be met. The inability to curb the casual conflict and dispute would result in profitability loss. In order to solve the problems, arising from conflict and disputes regarding the commercial projects, the tools of conflict management and dispute resolution are extensively used. Proper communication and negotiation skills are necessary for managing conflict and dispute effectively and attaining profitability through achieving the project objectives. Conflicts and disputes are inevitable on commercial projects. A commercial project is a planned piece of work undertaken to make profit which is more or less connected with buying and selling. Whenever there is the signing of a commercial project the possibility of conflict and dispute is very high. “On commercial projects, disputes often arise because the participants are not as willing /able to compromise and use cash to smooth over the rough spots” (Marilyn Klinger). Many of these disputes are at last to be resolved at the legal system. Matters concerning to money is the core area where the possibility of disputes and conflicts arises on commercial projects. Disputes regarding money arise very often as money is tight in the hands of the people due to economic slowdown. Most of the times such disputes reach the court of law to have a final word in the form of verdict. Thus it is clear that almost all the commercial projects are viable to conflicts and disputes and many of such conflict reach the court of law for the settlement. The conflicts and disputes on the commercial project affect the profitability of the project adversely. There is a high impact of conflict on productivity and profitability of a company. Due to a variety of unmanaged conflicts many business opportunities are lost for many companies. . Apart from the work place conflicts, disputes can put the productivity of the company down and thereby business incurs loss. It happens so due to the decline in productivity of the business. In order to put an end to such situations, business organisations should educate the employees through the use of the technique and tools of the conflict management. It is the only practical solution to the problems of non profitability due to conflicts and disputes on large scale commercial projects. Thus, it is evident from the discussion that conflicts and disputes are inevitable on commercial projects. Companies bear additional loss when the matter of dispute is drawn to the court of law for settlement. Because they will have to wait for a long period of time to get the court verdict on the matter. During the time there is the possibility that an injunction may fall on the project work and it causes high rate of loss for the companies. Chances for disputes are comparatively high on commercial projects. In this context, the relevance of conflict management and dispute resolution are revealed. If organisation makes use of these powerful tools namely conflict management and dispute resolution, they can easily come out form such setbacks of conflict and dispute with in a short span of time. It helps the organisation save a lot of time and money and also they can proceed with the commercial projects planned and undertaken without any further delay. Even though, conflicts and disputes are viable on a commercial project they can be effectively overcome by the proper use and application of the powerful tools such as dispute resolution and conflict management. In order to best achieve the goals of any organisation it should effectively use conflict management tools to solve the disputes and conflicts that possibly arise in the organisation. The people in the organisation need to share their vision to achieve the organisational and individual objectives rightly. The objectives of each department have to be systematically defined for the efficient achievement of the same. Apart from all these, resolving conflict among people is very essential to attain the objective of the projects undertaken. Where there is a small room for conflict among the employees towards the organisation or the project, the productivity of the employees is clearly affected. Because cooperation is impossible due to the conflict among employees and when cooperation is lacking the productivity of the organisation comes down and thereby profitability too. This can happen to every organisation and to any project. So the management should pay adequate attention to understand and resolve the possible conflict in order to achieve the objectives of any of the commercially viable project. (Conflict Management) In standard forms of commercial contracts, a number of dispute resolution techniques are included for the effective management of conflicts and disputes on a commercially viable project. The term commercial contract refers to “a legally binding agreement between parties in which they are obligated to do or not do certain things” (Commercial Contracts). The commercial contract makes the parties, who are engaged in the contract mutually binding to do or to abstain from doing something. Almost all businesses organisations make written contract with the parties to make the terms and conditions of agreement clear and comprehensible for getting legal validity. The legality provides for the enforcement of the subject matter of a contract if it is violated. Contracts clearly reveal all the aspects of the agreement without leaving any room for further explanation. A variety of dispute resolution techniques are used when a commercial contract is reached between different parties. It is for the purpose of the smooth and effective performance of the terms and conditions of the subject matter of the contract, or agreement. A number of Dispute resolution techniques are included in the standard forms of commercial contract. The important among them include mediations, arbitrations, Cooperative problem-solving, conciliation , fact-finding, conflict strategies, dispute management, negotiation techniques, ADR consulting and neutral fact finding etc. . Mediation: Mediation is an important dispute resolution technique which is included in the standard forms of a commercial contract. “Mediation is the intervention into a dispute or negotiation of an acceptable, impartial and neutral third party who has no decision-making authority” (U.S. Office of Personnel Management). The main objective behind these interventions is to help the parties reach an acceptable voluntary resolution regarding the dispute. The resolution technique namely mediation is applicable in highly polarised disputes in which parties are either unable to instigate a dialogue or in an insoluble deadlock. In mediation, an active participation of a mediator or facilitator is inevitable. The mediator facilitates an environment in which the parties can initiate their conversation and reach an acceptable resolution or conclusion. Arbitration: In arbitration, the disagreement between two or more parties is put to an end with the help of a third person who is known as the arbitrator. Arbitration is defined as “a process in which a disagreement between two or more parties is resolved by impartial individuals, called arbitrators” . It is mainly done to avoid the lengthy and costly court procedures for the settlement of a dispute. The arbitrator must be a person without any bias and he/she should be impartial too. An arbitrator is a third person who does not have any direct connection with the dispute or any of the disputing parities. Cooperative problem solving: Cooperative problem solving is one of the important techniques of dispute resolution. Under this method, the disputing parties do not seek the assistance of a third party to resolve the issue; instead they would sit together and discuss the issue giving mutual concern and respect. Cooperative problem solving looks forward to finding solution to a dispute in a collaborative way rather than in an isolated, competitive, or confrontational way (Malek). Conciliation: In conciliation, a positive relationship is built between the patties of a dispute by the help of a conciliator. A conciliator can be neutral, or non-neutral about the interest of the parities. It can be defined as “a form of alternate dispute resolution in which a neutral third-party hears both sides and then issues a non-binding suggested resolution” (Legal Definition of Conciliation). In conciliation also the help of a third party is sought to settle the dispute. Facilitation: Facilitation provides for the flow of information between the parties to a dispute with the help of a facilitator. “Facilitation is a process in which a neutral person helps a group work together more effectively” (Spangler). Unlike a mediator, the facilitator does not involve in the issues vigorously. The facilitator is concerned more with providing procedural directions to the parties to a dispute and remains impartial towards the parties and their issues. Consulting: Consulting is another important dispute resolution technique. It is a widely used technique of dispute resolution and conflict management. In consulting, the parties to a dispute seek the help of a consultant for finding a remedy for the problem. Consulting mainly focuses on giving proper advice to the parties of a dispute. In consulting, the help of a counsellor or consultant is sought by the parities to the conflict to find a way out. (Consultant) Even though, the above mentioned are some of the important dispute resolution techniques, there are a few other dispute resolution techniques that are also included in the standard forms of a commercial contract. They are conflict strategies, dispute management, negotiation techniques, ADR consulting and neutral fact finding. All these form part of the resolution techniques included in the standard forms of a commercial contract. The above discussion attempts to compare and contrast the dispute resolution techniques included in standard forms of commercial contract. Principled negotiation is an important tool relevant in dispute resolution. It focuses mainly on conflict management and conflict resolution. Principled negotiation can be defined as “an interest-based approach to negotiation that focuses primarily on conflict management and conflict resolution” (Glossary of Negotiation Definitions).  Principled negotiation is very much attached to the phrase “Win Win” as its main focus falls on the interest. Principled negotiation is an important negotiation strategy that gives more emphasis on interest and not on problems. The negotiation strategy namely principled negotiation is widely useful in Saudi Aramco, a fully integrated international petroleum company of Saudi Arabia with the world’s largest oil reserves. Principled negotiation strategy is quite useful for any industry as it contains some of the great fundamentals. These four fundamentals are 1. Separate the people from the problem 2. Focus on interests, not positions 3. Invent options for mutual gain 4. Insist on objective criteria. The four fundamentals make the principled negotiation useful for Saudi Aramco, the world’s largest international petroleum company situated in Saudi Arabia . The company makes use of the negotiation strategy namely principled negotiation in the following realms. Principled negotiation is useful for Saudi Aramco in, a) Regulating the business relationship with other companies b) Policy formulation c) Minimising conflict d) Motivating the employees e) Conflict management and f) Dispute resolution. Even if, dispute and conflict are part of any commercial project, organisations can overcome them by the prudent application of dispute resolution techniques as a part of conflict management. Conflict management has great emphasis today as conflict and disputes are inevitable part of any business organisation. Works Cited Business Dictionary. Conflict Definition. 27 November 2009 . Commercial Contracts. 30 September 2008. 27 November 2009 . Conflict Management. 27 November 2009 . CONFLICT MANAGEMENT . 27 November 2009 . Conflict Resolution. 27 November 2009 . Consultant. 27 November 2009 . Glossary of Negotiation Definitions. 27 November 2009 . Investor Words. arbitration Definition. 27 November 2009 . Legal Definition of Conciliation. 27 November 2009 . Malek, Cate. Collaborative Problem Solving and Consensus Building. 27 November 2009 . Marilyn Klinger, Sedgwick Deter Moran & Arnold LLP. Common Legal Disputes on Construction Projects. 1 March 2009. 27 November 2009 . Office Conflict. 27 November 2009 . Principled Negotiation Law & Legal Definition. 27 November 2009 . Queensland Government. Dispute resolution diagnostic definitions. 9 July 2009. 27 November 2009 . Spangler, Brad. Facilitation. July 2003. 27 November 2009 . Treasury Board of Canada Secretariat. Collective Bargaining in the Core Public Administration. 28 January 2008. 27 November 2009 . U.S. Office of Personnel Management. Alternative Dispute Resolution. 27 November 2009 . Read More