Business mediation is a process for resolving conflicts within or between businesses. Participation is voluntary, the sessions are confidential, and the mediator is a trained neutral who has no stake in the outcome. Mediation can be helpful at any point in the life cycle of a business, from formation to dissolution, and even in bankruptcy proceedings. In mediation, parties retain control and are able to craft an agreement that best suits their needs, instead of leaving a judge, jury, or arbitrator to decide their fate.
Mediation at the inception of a business can take the form of creative and thoughtful planning to prevent conflicts, as well as to minimize and resolve conflicts that may still occur. Simply including an agreement to mediate disputes in appropriate documents can create a framework and expectation that conflicts will be handled in a fashion that best serves the business and its owners.
At a later time, mediation can permit owners to make adjustments necessary for the business to thrive, as conditions and their own priorities evolve. If a “business divorce” is the best option, mediation can serve the interests of all of the parties involved.
In any context, mediation typically costs less in out-of-pocket expenses than protracted litigation and requires less time to reach a resolution. Mediating a business dispute also minimizes costs that are difficult to quantify. Distraction and discontent within the business caused by the ongoing conflict can lead to a lack of focus on running the business effectively. Loss of business goodwill can follow as adversaries within the business harden their positions and vendors, customers, and external partners become affected by the internal strife. Competitors may see opportunities to take advantage of the firm’s weakness.
Mediation between or among businesses offers many of the same benefits as mediation within a business, reducing both direct and indirect costs.
Not-for-profit organizations also face conflicts that mediation can help to resolve.