Tips to Avoid (or Resolve) a Contentious Business Dispute
Posted June 17, 2016 in Articles
In business negotiations, it is not uncommon for disputes to arise. Each party has its own interests; and, while their ultimate goal may be the same (i.e. closing the deal), conflicting interests and even discordant negotiation strategies will often threaten deals that can – and should – close with the right approach and willingness to compromise. When possible, avoiding contentious disputes will often be in everyone’s best interests. This can be particularly true in intercultural transactions. However, if a dispute becomes unavoidable, there are proven strategies for resolving the parties’ differences as well.
How to Avoid and Resolve Disputes in Business Negotiations:
1. Create Value Out of Conflict
While the concept of a “dispute” tends to have a negative connotation (and often conjures negative emotions), one strategy is to view a dispute as an opportunity to bring the parties closer together. While disputes can – and do – lead to litigation, with the right approach they can also be used as springboards for tackling issues collaboratively and exploring previously-unconsidered means for satisfying both parties’ interests. From figuring out ways to align the parties’ priorities to looking ahead to implementation, turning a potential dispute into an opportunity for frank and open discussions can add significant value for all parties involved.
2. Open the Lines of Communication
Particularly in cross-border negotiations, figuring out the most-effective means of communication can be a challenge. While it may not make practical sense to travel for in-person negotiations, leading up to the closing, email and phone negotiations have many limitations of their own. Communication challenges can end up creating issues even when the parties are substantively aligned.
To avoid this, developing a sound communication plan is critical. While email may be most efficient (and also help deal with significant time differences), establishing rapport over email can be difficult, and written commentary can easily be misconstrued. By setting expectations and agreeing on communications methods up front, negotiation partners can often avoid conflicts that might otherwise jeopardize their closing.
3. Suggest Mediation
When it becomes clear that the parties are approaching an impasse, proposing a form of alternative dispute resolution (ADR) instead of resorting to litigation can save time, money and, in many cases, the parties’ relationship. Recommending ADR – even in the face of a warning shot from the other side – can often signal both strength and commitment to the deal.
In business negotiations, mediation can be a particularly effective tool for resolving differences outside of the adversarial process. By engaging a neutral third party, each party can often gain a clearer understanding of the other side’s interests while also better expressing its own. When a dispute appears to be on the horizon, taking this type of proactive approach to conflict resolution can help the parties stay on course and conclude their negotiations with a mutually-favorable outcome.
Contact Mithras Investments | Strategic Solutions for Global Business
At Mithras Investments, we provide consulting solutions for global transactions in a wide array of industries and markets. Our consultants offer deep insights and practical solutions for all stages of the negotiation process. For more information about our services, contact us online or call (305) 517-7911 today.