Management Of Workplace Conflicts In Business Environment Using Alternative Dispute Resolution

Project and Seminar Material for Business Administration and Management BAM

Management Of Workplace Conflicts In Business Environment Using Alternative Dispute Resolution


In today’s business atmosphere, conflict in the workplace is a noteworthy issue; therefore, handling conflicts in organizations is essentially very important as organizations that fail to address conflicts properly are likely to run into problems because conflict is integral in organizational life and has both likely benefits and costs. To address the situation of conflicts, lately since 1970s organizations have turned to the use of alternative dispute resolution (ADR), in resolving workplace conflicts. This article therefore presents the authors’ thoughts on why organizations should use ADR to manage workplace conflicts; as effective conflict management has the prospective to play a key role in the success of organizations goals.

Chapter One


1.1 Background of the Study

Nowadays workplace conflict does not receive much attention in the people management literature but, to the extent that it does, a strong consensus exists that organizations are likely to pay a high price if workplace problems are not solved effectively (Ury et al. 1988). At the extreme, days can be lost due to some form of industrial action but, more plausibly, sickness and absenteeism rates may increase, and management-employee relations may become strained if not embittered. Disharmony at the workplace may even impede organizations from creating adaptable structures to succeed in today’s challenging business environment. While there is wide agreement on the potentially damaging effects of conflict, there is no one view on what constitutes an effective conflict management system (Bingham & Chachere 1999).

Conflict is associated to the central processes of people and their association with the surroundings and is, therefore, an unavoidable part of organizational life (Jones & George, 2003). Conflicts in organization have been attributed to several factors. Dealing with conflicts in organizations has over the years been seen as the sole responsibility of the managers who often times took a rigid stand how to deal with it; organizations that address conflicts in this manner failed to recognize that conflict is natural in organizational life and has its own both benefits and costs. Conflicts have been said to occur in organizations, when normal activities are disrupted to the extent that it becomes difficult to achieve the organizational goals and objectives (More & Wegener, 1992).

More precisely, organizations are confronted with many forms of interpersonal conflicts which can be disrupting to achieving organizational goals. Additionally as a result of diversity in the workplace, conflict is on the increase. Dumaine (1991) and Nohria (1991) posit that as companies’ try out with flatter – more decentralized organizational structures, their workers become more and more interdependent and responsible for more decision making. These changes mean new types of conflicts will arise among different groups of workers relative to those experienced in bureaucratically structured organizations (Morrill, 1995). As more minorities, women, foreign nationals, and employees with different experience and educational backgrounds are entering the workforce. This diversity unescapably leads to conflicts different from those experienced by a more standardized workforce (Fiol, 1994; Williams & O’Riley, 1998).

If not properly managed, conflict in the workplace can become a complex matter having damaging effects on the organization’s employees’ physical, emotional, and mental wellbeing escalating into unmanageable heights, thus harming the mission and goals of an organization (Caudron, 1998). However, conflict does not have to be a destructive element; when handled properly, conflict can be of immense benefit to both the employees and the organization as well. In an attempt to explain the nature of conflict, many scholars have postulated theories to guide in the understanding of conflict. Among the theories postulated is the traditional theory which sees conflict as bad – not good for the organization and as such should be avoided.

Contemporary theory; however, recognizes that conflicts between human beings are inevitable and if well managed can bring positive results to the organization. Tillett and French (2006) believe that conflict encourages communication dialogue and help with individual and organizational growth as it provide opportunities for problems to be solved and help the organization to advance; while Eunson (2007) opines that conflict can help change complacency through productive means.

Unresolved workplace conflicts can sometimes led to litigation with its attendant problems and the willingness of employees to sue their employer have exposed almost all employers to an increasing volume of litigation related to work-place conduct or the human resource decisions made on daily basis. Understanding conflict and how to manage or resolve it should be an integral part of what and how managers should learn; such understanding is essential for the personal well-being and success of individuals as well as the long-term success of organizations (Singleton, Toombs, Taneja, Larkin, & Pryor, 2011). Over the years, there have been significant changes in the ways organizations manage conflict which have led to efforts developed strategies aimed at more efficient, less costly, and more satisfying resolution of conflict; thus this paper examined the use of these less expensive and appropriate methods such as alternative dispute resolution (ADR) approaches in managing workplace conflicts.

There is a growing awareness among the industry players that this process is time consuming, costly and could lead to irreparable damage to the employer-employees’ relationships. In other words, it is in the best overall interests of the disputants to resolve the conflicts as soon as possible before they escalate to formal litigation, as this can lead to unfavorable financial and non-financial repercussion such as stoppage of work, increased operational cost, negative image, loss of goodwill and negative employee-employer relationship (Gibbons, 2007). Alternative Dispute Resolution (ADR) is a way to avoid this by resolving disputes in a non-adversarial way, without recourse to courts, and its adoption has been on the increase, especially in non-union workplaces (Colvin, Klaas & Mahony, 2006). Nations have shown that ADR have been a successful as a first step to resolve disputes (Van Gramberg, 2006). Bearing this in mind, the techniques of Alternative Dispute Resolution (ADR) have become increasingly popular as an alternative to litigation (Eden, 2011). According to Mackie, (1995) ADR is a dispute resolution involving a structured process with third party intervention that does not lead to a legally binding outcome imposed on the parties.

1.2 Statement of the Problem

Workplace conflict (organizational) can trigger negative consequences affecting relationships (individual and group). It can lead to a serious loss of time and energy when there is a failure to address it competently. However, it can sometimes open up new opportunities for relationship-building if it is handled honestly, impartially, and smoothly. Moreover, conflict management strengthens relationships among groups and individuals in their workplaces and indeed, other arenas of life (Eunson, 2007).

Conflicts in workplace may lead to organizational and institutional failure. It can have long term consequences that are dangerous for maintaining a productive work environment. This research attempts to explain causes of organizational, institutional, and workplace conflicts. It also tries to focus on conflict management strategies (Colvin, Klaas & Mahony, 2006).

Alternative Dispute Resolution (ADR) is a mechanism designed to resolve disputes in a non-adversarial manner. In a typical workplace, disagreements are inevitable due to the diversity of the workforce, not just demographically, but also in terms of their work behavior, career goals, etc. Nonetheless, as long as disagreements are kept subtle and do not jeopardize working relationship, they are manageable. The key is to understand the cause of disputes and find ways for quick resolution in a peaceful and win-win manner. When disputes are left unresolved, they tend to escalate, leading to a hostile working environment and ultimately affecting performance.

1.3 Objectives of the Study

The general objective of this study is to examine the management of workplace conflicts in business environment using alternative dispute resolution.

The specific objectives of the study include the following:

  1. To ascertain the prevalence of workplace conflict among staffs in Delins insurance company Ikeja.
  2. To find out the causes of workplace conflict in Delins insurance company Ikeja.
  3. To determine the consequences of workplace conflict in Delins insurance company Ikeja.
  4. To investigate the impact of workplace conflict on job satisfaction.
  5. To examine the approaches of using alternative dispute resolution in the management of workplace conflicts.

1.4 Research Questions

  1. What is prevalence of workplace conflict among staffs in Delins insurance company Ikeja?
  2. What are the causes of workplace conflict in Delins insurance company Ikeja?
  3. What is the impact of workplace conflict on job satisfaction?

1.5 Significance of the Study

The following are the significance of this study:

  1. Findings from this study will educate the business managers and the general public on the effect of dispute management.
  2. This research will be a contribution to the body of literature in the area of the effect of personality trait on student’s academic performance, thereby constituting the empirical literature for future research in the subject area.

1.6 Scope / Limitations of the Study

This study will cover the management of workplace conflicts in business environment using alternative dispute resolution. It will also cover the relationship between workplace conflict and job satisfaction.

Limitation of Study
  • Financial constraint– Insufficient fund tends to impede the efficiency of the researcher in sourcing for the relevant materials, literature or information and in the process of data collection (internet, questionnaire and interview).
  • Time constraint– The researcher will simultaneously engage in this study with other academic work. This consequently will cut down on the time devoted for the research work on dispute management.

Chapter Five

Conclusion and Recommendation

5.1 Conclusion

We believe that in the designing of conflict management systems, managers need to move away from a “one size fits all” tactic. Organizations vary intensely in their structure and culture, as well as in their objectives; therefore, they have very diverse conflict management needs. Addressing these needs necessitates managers to develop conflict management practices that are compatible with their organization’s objectives, existing culture and structure. ADR, we strongly believe that designing and implementing conflict management systems in a strategically aligned manner will provide organizations with a competitive advantage and cause many of the criticisms of such systems to lose their appeal. Therefore, we would like to suggest an empirical studies should be embarked upon in order to ascertain the potency of ADR in managing workplace conflicts, which are inevitable.

5.2 Recommendation

The study focused only on three aspects of workplace conflict and alternative conflict resolution; it is recommended that other studies be done to unearth more on the subject. This will ensure increased reliability of the statistics and effects for generalization. The study covered only one company, this shows that the results of this study are skewed towards the perceptions and data from only one organization. It is suggested that such a study be done in other firms in other sectors to increase the statistical power of the study and more reliable results.

One of the distinct challenges faced in the section of literature review was the absence of comparative studies across the ethnic groups in Nigeria. In short, there are not many studies that have focused on how organizations perform in the different ethno-cultural and geographical locations in Nigeria. There is therefore a tremendous potential for research in this direction.

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