Chapter 4-Dispute Resolution.docx

9 Pages

Marketing and Consumer Studies
Course Code
MCS 3040
Joseph Radocchia

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Chapter 4: Dispute Resolution Business organizations require a risk management plan to minimize the potentially adverse impact of the legal environment through prevention of loss to the extent possible and planned reaction to adverse events Business Activities and Legal Disputes: The Motor Vehicle Accident: COS must report the incident and possible injuries to its insurer as soon as possible. COS might experience an increase in its insurance premiums if the driver was at fault, and management should investigate to determine whether the driver had been properly trained. COSs risk management plan was successful b/c it calls for a comprehensive insurance coverage. However, prevention procedures should be reviewed in order to reduce the risk in the future The Bylaw Change: COS did not properly implement its risk management plan b/c they were unaware of the proposed amendments to the bylaw before the changes went before the municipal council. Now that the bylaw has changed, COS must comply to the policy The Delinquent Customer: Customers refusal to pay its account indicates COS failed in its procedures for extending credit management should explore possibilities for preventing recurrences. The Dissatisfied Customer: Customer may claim compensation for their business being disrupted by COS inadequate office design. COS should consult the contract b/w them and determine the extent of its liability, and avoid hasty actions that might harm its ability to resolve the conflict amicably. COS should have a form of commercial liability insurance to protect them against being sued by customers who have allege to have received substandard goods or services. The Damaged Goods: COS should review its contract with its supplier to determine who is responsible for damage to goods in transit. A legal conflict may arise if the supplier is unable or unwilling to pay compensation or does not agree that the damage was as extensive as alleged by COS. The Problem Employee: who gave discount to customer without permission internal matter for which the customer is not responsible. A risk management plan should ensure that COS policy manuals, company rules, and relevant job descriptions already specify the employees authority, as well as the consequences for exceeding that authority and being insubordinate. The matter will develop into a legal dispute if COS fires the employee with no termination pay, or with an amount that the employee considers inadequate. 1 Resolving Disputes through Negotiation Clarification of the Situation: - The first step for a managed faced with an apparent conflict is to investigate the situation to determine the nature and extent of the dispute. - Manager should contact the individuals involved in his own organization, and the appropriate people on the other side of the dispute, to clarify the situation before formulating an approach to its resolution - Managers must set priorities decide which disputes justify the use of the firms resources, and determine when professional legal advice is required - Even if the dispute escalates, the objective is still to resolve the matter as quickly as is reasonably possible - Negotiation: a process of deliberation and discussion used to reach a mutually acceptable resolution to a dispute - Negotiation is a tool that owners and managers can use effectively to assess, evaluate and develop resolutions to legal disputes on a relatively informal and inexpensive basis - The point is to reach a fair and acceptable outcome, without having to activate more formal processes (burdensome, costly and unpredictable machinery associated with formal litigation) - Negotiation is not governed by technical rules it can operate in whatever way the parties wish to solve their problems - In some cases, negotiation is not the proper way to proceed o Ex: When insurance covers the risk that is the subject of the dispute, the business is required to allow the insurer to conduct settlement negotiations. Any attempt by the business to negotiate privately might jeopardize the coverage. - Some provinces have passed apology legislation whereby apologies cannot be used in court as an admission of fault or liability or to impair insurance coverage The Negotiation Process: - Assuming there are no insurance issues, negotiation an end to the dispute should become managements focus once a good understanding of the dispute is achieved - Whether negotiations will succeeds depends on a number of factors: o The willingness of the parties to compromise and negotiate in good faith o The nature and significance of the dispute o The priority the parties give to its resolution o The effectiveness of those involved in negotiations - The parties choose their own negotiators they could be employees, lawyers, or professionals who specialize in bringing parties together The Dissatisfied Customer: COS problems with the dissatisfied customer may appear exclusively about money, owing to the unpaid account and the financial losses, present and future, that the customer may claim as a result of the allegedly 2substandard service and products COS supplied. Also at risk is the opportunity for future dealings with customers, as well as the reputation for COS in the marketplace. COS should start by assuring the dissatisfied customer that its looking into its concerns, and quickly choose the appropriate COS manager to investigate the matter internally. The investigation should involve a review of documentation, as well as consultation with the COS employee who created the office design. Customer should also be contacted for its full version of events. COS could offer to compromise by making a reduction in its account or provide assistance to make the customers system work better. The Damaged Goods: COS could use a similar approach, by first designated a COS manager to determine the background of the problem (check documentation, consult with the COS employees involved in the transaction, contact the supplier for clarification of its position). While the conflict is primarily financial, the relationship b/w the parties is important also if COS is a big customer for the supplier, they could use that as leverage. COS had a good chance of informally negotiating a settlement with the supplier. The Problem Employee: Resolving issues related to problem employee should involve less investigation, particularly if COSs general policies are documented and that the salespersons performance record and job responsibilities have been clearly established and documented. COS should give employee chance to explain their
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