Background Information
Disputes have become common issues in all segments of human life, including in the corporate world. Business organizations are facing great exposure to conflicts in today’s challenging business environment where every player appears to be fighting for its survival in the market through whichever means that appeals to them. There are many things taking place in the global business environment nowadays as enterprises all over the world try to outdo one another in the market.
The complex mix of factors that have dramatically increased the level of dispute in the current corporate world includes, but are not limited to, conflicting operating measures or policies, business competition, demand for a review of existing working conditions, demand for higher wages, and benefits, poor business or personnel management, and demand for improved welfare conditions in the workplace.
In most cases, corporate disputes are unpredictable and will tend to pose serious threats to businesses if they occur. In this regard, players in the business world have come up with appropriate measures aimed at addressing those issues whenever they occur. This paper uses the example of Majid Al Futtaim in Dubai to examine some of the means of dispute resolution that are used by business organizations in the United Arab Emirates to settle corporate disputes.
Overview of Majid Al Futtaim
Majid Al Futtaim is a leading group of companies that operates across the UAE and North Africa regions. The company, which is based in Dubai, was established 22 years ago by renowned businessman, Majid Al Futtaim. Currently, the company has established roots in about 12 countries in the above regions, with a much greater emphasis being in UAE. The company manages several key operating subsidiaries that include properties, retail, and ventures. The group owns a fleet of shopping malls, supermarkets and hypermarkets, hotels, movie theatre zones, and fashion stores, among other businesses.
Means of Dispute Resolution Used by the Company
Corporate or industrial disputes are inseparable elements of all business organizations in the world. These disputes or conflicts usually involve different aspects of interactions between companies and their employees, among the workers, and between organizations. These disputes are likely to arise from any form of disagreement which may show up within an industrial relation regarding the above aspects of interactions.
Whenever there is a disagreement within organizations, it can result in dissatisfaction for either of the parties involved, thus contributing to corporate dispute.1 Corporate conflicts can take various forms of actions such as a dismissal of employees, demonstrations, and protests, among other approaches that are likely to bring serious implications on businesses. Just like any other modern corporation, Majid Al Futtaim applies the approach of Alternative Dispute Resolution (ADR) on top of the civil litigation process in addressing the various disputes that tend to arise from its subsidiaries all over UAE and North African regions. However, the ADR approach has always proved to be effective in solving corporate disputes within the company compared with the judicial process. Some of the ADR methodologies used by the company would include negotiation, conciliation, mediation, arbitration, ombuds, and expert appraisal.
Negotiation
This is the most common ADR approach used to solve corporate disputes in contemporary society. This kind of approach involves a back-and-forth negotiation of the conflict aspects between the parties to dispute to try to come up with a perfect resolution. Majid Al Futtaim uses this approach to handle most of the corporate disputes arising from its subsidiaries all over the UAE and Northern Africa region.
Here, the company’s human resource department communicates directly with the parties involved in a conflict. In some cases, especially where the company finds itself in conflict with another organization, an attorney is hired to conduct the talks directly with the other party on behalf of the organization. Even though there is no set procedure for this conflict resolution methodology, some tactics used in the approach would tend to work better than others.
This form of dispute resolution provides the parties to a conflict with the opportunity to directly take part in the resolution process where they would come up with decisions affecting them. This form of approach has proven to have immense benefits when it comes to dispute resolution where the wishes of the parties involved are normally put into consideration before a final decision is declared. One of the main advantages associated with this methodology is that the parties to a conflict take full control of the process, and in that case, they come up with their own decisions about the matter is resolved.
This way, the approach triggers a mutually acceptable agreement between the parties, thus ensuring that permanent resolutions to disagreements are attained. More importantly, the approach is informal and unstructured, and this makes it an inexpensive way of addressing disputes in the company. As a matter of fact, this is the first option of conflict resolution for the company, considering its effectiveness in addressing corporate disputes within a short period.
Conciliation
Conciliation is another effective approach used by Majid Al Futtaim in resolving its industrial disputes. This is a conflict resolution approach whereby a conciliator meets the parties to a conflict separately in an attempt to help them resolve their differences. This third party is often a recognized professional in the field of the conflict, and therefore, has the authority to offer suggestions or opinions on likely reconciliation terms.
Through their persuasive nature which enables them to achieve their goals in the field of conflict, conciliators will tend to assess cases wisely and give suggestions they deem suitable in resolving conflict matters. Even though conciliators have no powers to make a final decision to a conflict, they play a significant role in ensuring that disputes between persons or corporations are amicably resolved.
Mediation
This refers to a process whereby a neutral third party comes in between the conflicting parties to help them resolve their differences more reasonably.2 Just like negotiators, mediators lack determinative powers in a case, and will therefore not make any final decisions about disputes or force an agreement to the parties to a conflict. This would have the meaning that the key role of mediators in dispute resolution is to help in facilitating and controlling the entire negotiation process.
For purposes of credibility and fairness, these people are expected to maintain scrupulous neutrality throughout. When conflicting parties cannot resolve their disagreements by themselves, the company seeks the help of third parties who will help them explore ways of settling their disputes amicably. In this case, the business uses its attorneys as well as other professionals who are knowledgeable in legal matters to address disputes arising from its subsidiaries in UAE and North Africa.
Some of the common forms of mediation used by the company to address most of its industrial disputes are preventive mediation and grievance mediation. Preventive mediation mainly aims at keeping off differences that may arise between the management and the workforce.
This program incorporates approaches that would play a key role in improving labor-management relations in the workplace such as consultation, training, and review of past union-management conflicts. On the other hand, grievance mediation encompasses approaches aimed at promoting negotiation talks between two conflicting parties. The mediation approach has proved to be an effective tool for solving conflicts in the company without tarnishing business relationships since it allows the parties to a conflict reach a consensus away from the public glare.
The use of a mediator is associated with several characteristics that make it more suitable in addressing industrial conflicts compared to other Alternative Dispute Resolution methodologies. For instance, the approach offers a basis for the conflicting parties to resolve matters on their own without involving people from outside. This makes the practice more private and confidential, thus avoiding disclosure of corporate issues to the public. Another important advantage of this conflict resolution methodology is that it promotes communication and cooperation among the parties involved in a conflict, thus facilitating good interpersonal relationships in the workplace. Apart from preserving existing relationships, this flexible approach also helps to reduce hostility in the workplace by offering a win-win solution between the parties to a conflict.
Arbitration
This refers to a dispute resolution approach in which the conflicting parties submit the facts revolving around their case to a third party who will, in turn, determine the outcome of the matter. In this particular method, an arbitrator is chosen by the parties involved in a conflict to help them reach an appropriate outcome to their dispute. The arbitration process is conducted similarly to the litigation process in a court of law in a number of ways.
For example, just like in the judicial system, the parties to a conflict are allowed to submit their evidence before an arbitrator. The arbitrator will then take time to review the provided information and use it to come up with a final judgment based on the principles of arbitration. Generally, arbitrators can give their decision on cases within a matter of two months. As it would be observed, there is no formal process in this form of dispute resolution, and in that case, parties to a conflict can introduce their ways of carrying out the activity.
In an attempt to solve its corporate disputes, Majid Al Futtaim relies on the services of its attorneys and other professionals in the field of dispute who serve as neutral evaluators of disputes in the company. However, the arbitrators are identified and chosen based on the type of dispute being addressed. To ensure that cases in the company are well resolved, knowledgeable arbitrators would be drawn for complex and highly technical matters.
Over the years, arbitration has proved to be an effective method of resolving disputes in the company for a number of reasons. For example, the process is faster and less costly than the normal litigation process, and in that case, it comes as a better option for the company which needs to address its disputes quickly and more confidentially. More importantly, the parties to a conflict are allowed to submit all their claims to the arbitrator and this ensures that the right decision is reached based on the facts presented.
Ombuds
This refers to a dispute resolution approach whereby a senior person in an organization is used to enhance peaceful outcomes for conflicts arising within the organization, especially to conflicts involving the business and its workforce. Majid Al Futtaim relies on the service of ombudsmen in addressing most of its internal disputes. Generally, these people are high-ranking personnel who possess great skills and training in dispute matters within the company.
As it would be observed, this mechanism has its benefits when it comes to conflict resolution. For example, the intervention is confined within the company premises, thus providing room for confidential conflict resolution approaches that would aid in protecting business or personal matters from being exposed to the outside world. More importantly, the approach provides a safe avenue through which workers can seek redress whenever they feel that the company has wronged them.
Expert Appraisal
An expert appraisal is also applied in the company when it comes to dispute resolution between employees. In this case, the parties to a dispute choose a neutral third party who is knowledgeable in the field of their conflict and seek his/her advice regarding the probable outcome of the matter if it were to proceed to the litigation process. Even though these people have no power to give final judgment on disagreements, their suggestions are often welcomed by the conflicting parties who acknowledge their status in the area of conflict. This way, the parties to a conflict may be persuaded to resolve their differences in a different manner that will enable them to reach a mutual agreement on the issue.
Litigation Process
This is the use of the civil justice system to resolve disputes or disagreements between parties. This is arguably the most common approach to conflict resolution all over the world. Majid Al Futtaim Group seeks judicial decisions where the alternative dispute resolution approaches have failed to provide a solution to their corporate disputes. As it would be observed, this is the only conflict resolution process where the neutral third party possesses greater determinative power than the parties to a conflict. The judge or magistrate serves as an arbitrator in the case, and his/her decision is often final based on the evidence presented by the parties involved in a conflict.
Conclusion
As it has been shown in this report, the current business environment presents a lot of challenges to enterprises through corporate disputes and other issues that are likely to pose serious threats to business success. In this regard, business organizations need to come up with reliable dispute resolution approaches that would enable them to address corporate conflicts effectively. There is no doubt that the means of dispute resolution used by Majid Al Futtaim, as it is shown in this report, have been instrumental to the company’s great success in the UAE and Northern Africa region. In this regard, other businesses aiming at making a difference in the global market should emulate the same model in addressing their corporate disputes.
Bibliography
Bingham, Lisa. “Employment dispute resolution: The case for mediation.” Conflict Resolution Quarterly 22, no. 1‐2 (2004): 145-174.
Fort, Timothy and Cindy, Schipani. “An action plan for the role of business in fostering peace.” American Business Law Journal 44, no. 2 (2007): 359-377.