Conflict Resolution: What is it and How Does It Work?

Conflict resolution is the process —either formal or informal— used by two or more parties to achieve a peaceful, stable and perceived fair solution to a dispute. This process is crucial in navigating the numerous cognitive and emotional pitfalls that can deepen conflicts, many of which we might not even consciously recognize.

Self-Serving Fairness Interpretations: Often, individuals assess fairness not from a neutral standpoint, but based on what most benefits them. For instance, it’s common for department heads to believe they deserve a major portion of the annual budget. This biased view of fairness can lead to intense disputes as each party justifies their skewed perceptions as equitable.

Overconfidence: There’s a common tendency to overestimate one’s judgment accuracy, leading to unrealistic expectations about the outcomes of disputes. Such overconfidence can be seen when parties assume favorable outcomes in legal battles, potentially dismissing settlement offers that might otherwise save time and money.

Escalation of Commitment: In situations ranging from labor strikes to corporate mergers or even everyday workplace disagreements, there is a tendency to irrationally escalate commitment to a chosen path, often quite well beyond its utility. This can manifest as an attempt to recover past investments (like money spent on legal fees), without recognizing that these sunk costs should not influence future decisions.

Conflict Avoidance: The discomfort and distress from so-called “negative emotions” might lead some to suppress these feelings, hoping they will subside over time. However, this often results in the conflict becoming more entrenched, necessitating even greater need for effective conflict resolution strategies as the emotional stakes rise.

Understanding these dynamics is essential in setting up a constructive conflict resolution framework. Effective resolution can take several forms, depending on the context and needs of the parties involved:

Negotiation: Drawing on collaborative negotiation principles similar to those used in dealmaking can be highly effective. Key strategies include exploring the underlying interests behind the parties’ positions, such as the desire to avoid negative publicity or to mend a business relationship. It is also critical to determine your Best Alternative to a Negotiated Agreement (BATNA) —which is your Course of Action should negotiations fail, like partnering with someone else or pursuing legal action. Through creative brainstorming and seeking mutual, fair concessions, it’s often possible to reach a satisfactory resolution without external intervention, anyhow, there are:

External Negotiation Benefits: From own experience, here are three stressable reasons to employ an external:

Objective Insight and Fresh Perspective: External negotiators come without the “baggage” of internal politics or prior engagements with the involved parties. This fresh perspective enables them to see the heart of the conflict more clearly and propose unique, innovative solutions that internal parties might overlook. Their objectivity helps in identifying the true interests and needs of each party, leading to more sustainable and satisfactory resolutions.

Emotional Detachment: One of the major advantages of an external negotiator is their emotional detachment from the conflict. Internal stakeholders often have emotional investments that can cloud judgment and exacerbate conflicts. An external negotiator handles the situation without any personal stakes, allowing for a more rational and calm approach to negotiation, reducing the risk of decisions driven by emotions rather than hard facts.

Expertise and Experience: External negotiators often bring specialized knowledge and skills honed through handling a variety of conflicts across different industries. This expertise enables them to employ proven strategies and tactics that internal parties may not be aware of or skilled in. Additionally, their experience with similar disputes can provide valuable insights into what strategies might be most effective in a given situation, including knowledge of legal implications, which can be crucial for complex cases.

One Real-World Example: Consider the case of a large corporation facing a potential strike from its workforce. By bringing in an external mediator, the company was able to negotiate a compromise that addressed the workers’ key concerns while also maintaining operational efficiency, showcasing the value of external expertise in resolving conflicts that have both: Immediate and long-term implications.

Final Offer Arbitration (FOA): FOA presents a unique and high-stakes challenge for negotiators, especially when tasked with finding a resolution that not only satisfies immediate needs but also remains robust and adaptable over time. The core challenge in our FOA service is the requirement to select one of two proposed final offers in its entirety, which adds significant pressure! to devise a solution that anticipates and aligns with future possibilities and changes.

FOA Risks: While FOA can encourage fair and reasonable proposals by limiting the choices to the final offers submitted, it also poses risks. Its rigidity can be a drawback in situations where the dynamics are likely to change over time, making it less suitable when flexibility and adaptability are crucial. Negotiators must be extremely cautious and insightful when formulating these offers, as the decision is binding and allows little room for adjustment as future circumstances evolve.

FOA Clarifications: In Final Offer Arbitration (FOA), the role of the negotiator is generally confined to preparing the most reasonable and fair final offer, as the arbitrator chooses directly between the final offers presented by the parties involved. Typically, once these final offers are submitted, there is no provision for amendments unless both parties mutually agree to make changes before the arbitrator makes a decision.

The structure of FOA is designed to encourage both parties to submit their best possible offer initially, due to the risk associated with the arbitrator choosing the other party’s offer instead. This can lead to a more expedient resolution process but also introduces certain limitations. Namely the inflexibility of not being able to amend an offer after submission means that negotiators must be very forward-thinking and strategic in their initial proposals. They must anticipate future changes and conditions that could affect the agreement and incorporate flexible elements that can adapt over time.

Therefore, while FOA can streamline negotiations and help avoid prolonged disputes by forcing parties to make reasonable and fair proposals from the start, it also places considerable pressure on negotiators to get it right the first time, as there is little room for later adjustments unless both parties agree​.

Having a skilled negotiator engage with each participant before they submit their final offers in a Final Offer Arbitration (FOA) scenario can significantly enhance the quality and fairness of the offers made. Here are three key benefits of such pre-offer discussions:

Clarification of Interests and Priorities: A skilled negotiator can help each party clearly articulate and define their interests and priorities. This clarification process ensures that the final offers are not just about winning the immediate dispute but are aligned with long-term goals and needs. By understanding what truly matters to each side, a negotiator can guide the parties to formulate offers that are reasonable, fair and likely to be viewed more favorably by the arbitrator.

Mitigation of Emotional Decisions: Negotiations, especially high-stakes ones, can be somewhat emotionally charged, which might lead to less rational decisions. A skilled negotiator acts as a buffer, helping to temper emotions by providing an external, objective perspective. This can prevent the escalation of commitment to unwise courses of action, reduce the influence of biases like overconfidence and encourage each party to approach their final offer with a more nuanced, balanced, thoughtful and “vented” mindset.

Enhancement of Collaborative Proposals: By engaging in discussions with each party, a skilled negotiator can foster a more collaborative environment. This approach encourages parties to consider not only what they need to gain but also what the other party needs to accept the offer. Such collaboration can lead to the development of creative, mutually beneficial solutions that might otherwise be overlooked. Negotiators can help identify potential trade-offs and integrative solutions that maximize value for all involved, making the final offers more appealing and sustainable.

Arbitration Process: In arbitration, which sometimes involves a retired judge acting as an arbitrator, decisions are typically binding and confidential, and faster than traditional litigation. Although generally, there is no allowance for appeals, parties can sometimes negotiate limited appeal rights within their arbitration agreement, enhancing the fairness and robustness of the process.

Call to Action: As we explore these conflict resolution strategies, I encourage you to reflect on your current approach and consider whether integrating new methods like FOA or external negotiation could enhance your resolution outcomes. Are there areas in your conflict resolution strategy that could benefit from a fresh perspective or specialized expertise?

By considering these insights and examples, you can better deal with the complexities of conflict resolution and enhance your ability to steer professional relationships in a cooperative, trustful environments.