How The Collaborative Nature Of Mediation Can Help To Minimise Animosity In Business Relationships?
Most small businesses are started amongst friends or family and often if there is no clarity or agreement as to how the business will be managed or developed, disagreements can arise. If the differences are not resolved, tensions can continue and have an impact on the development of the business and relationship.
No matter what the type, size and nature of business, running a business smoothly is really demanding. Business owners need to think, plan and implement strategies that can help them best meet their business needs as well as sustain growth for the long term. Without well-planned partnership strategies and agreements, businesses of any size and type may fail and your objectives may not be achieved successfully.
Mediation to Resolve Partnership Disputes
Regardless of the nature and seriousness of business disputes, a few effective and constructive approaches like “mediation” can help overcome such challenges. According to facts and figures, a qualified and well-trained mediator can help settle over 75% of business partnership disputes successfully. In addition to that, the very best mediator has closure rates approaching around 95% success in resolving business partnership disputes.
Mediation is of utmost importance today. Since the business landscape is consciously evolving and demands emerging solutions to meet the needs it is essential to identify business complications beforehand to reduce further disasters.
Major Types of Conflict in Business Partnership!
According to the OTS review of partnership interim report – with approximately 414,000 in total, around 10 percent of UK businesses are based on partnerships. This is a noteworthy percentage of business partnerships, still above 70% of partnerships end up failing over time.
A few major factors affecting the business partnerships include mismanagement, lack of clarity of expectations of both of the partners, inability to differentiate between business and personal interest, wrong decision making, unequal commitment among partners, personality clashes and many more…
Delve into the article to take a closer look at a few of the most common factors why business partnerships fail in most cases.
1. Unequal Commitment Among Partners or Conflict of Interest
As a sole proprietor, there is only one owner of a business that is responsible for the success and failure of the business. However, in a partnership, there is more than one partner and each partner is dependent on the other fulfilling their role, this is often not in writing and is presumed, without clear communication of expectations, matters can often result in conflict. Being in a business partnership can be complex and if there are no clear guidelines on how the partnership responsibilities will be divided misunderstandings and conflict can arise.
Moreover, if your partner is unwilling or unable to make the same level of financial and personal sacrifices for the business, it may result in a conflict or resentment ultimately. Also, another most important thing to keep in mind is that all partners in a partnership are legally liable for the partnership. Hence, it means that actions and decisions made by a partner may have impacts on other partners (s) as well. Thus imbalanced contribution either mentally, monetary or in terms of time may result in a huge dispute eventually.
2. Inability to Differentiate Between Personal and Business Relationships
It is said that business partnerships between friends and family are likely to remain successful since both parties know each other and are on good terms. However, with business pressures, the management of the business, customers and financial management everything can change in the relationship or a friendship. When partnerships are based on relationships then issues or disputes can affect personal and business relationships and the two can become intertwined causing a damaging effect on many levels in a conflict compared to other types of disputes, there is a double whammy in the breakdown of the business and personal relationship where many emotions, resentments and expectations can be built up over a period of time.
In order to have a healthy business partnership make sure to maintain a balanced separation between personal and business relationships, ensure you take time to ensure you look after your mental wellbeing and put in place a legal agreement where there is a mechanism in place in the event there is a deadlock to manage and safeguard the business and personal relationship.
3. Personality Conflicts or Clashes
The benefit of being in a partnership is to bring together different skills, experiences, networks, and finances. Having an outstanding skillset and sharing risks are a few of the amazing benefits that the partnership can bring for you. However, what if the personalities of partners don’t match? Imagine partnering with a friend or a family member that you get along with on a personal level, but being in business together brings a whole new dimension to your relationship that leads to personality clashes and you don’t mesh sufficiently. Troubles, troubles and serious disputes are in a row to go through.
Disagreements and conflicts due to personality differences often lead to conflict and resentment. Hence, assessing your expected partners’ personality, how they work with others, manage finances is beneficial. Obtaining references can assist also. Get to get to know the person prior to partnering with them as this can help resolve so many unexpected complications and the obvious way to resolve any differences is through mediation.
4. Management Conflicts Among Partners
Many partnerships fail due to mismanagement of expectations by both partners as well as those that are not in alignment with the objectives or values of the organisation. Also, as the business grows there are chances that differences may become an increasing source of friction that lead to further disputes. Hence, before signing a business partnership agreement, prospective partners should schedule a meeting and evaluate their long term objectives, their potential, suggested business models, their vision for the business and more.
An efficient mediation process can be a win-win for all small, medium and large scale businesses or organisations to help them keep the business partnerships maintained and resolve disputes in case they arise at any point.
What is Mediation and How It Can Help Minimise Animosity in Business Relationships?
In the conventional litigation process, the parties bound in a business partnership have to battle through trials to get favourable outcomes. Nevertheless, many times parties lose the battle as well as end up losing money, time and effort. In such cases, effective mediation offers efficient alternatives to litigation. Meditation helps reduce the cost of achieving a resolution of a dispute and can be conducted at any location at any time and of course at the convenience of both parties.
Mediation is the emerging reality today and the rapidly developing segment of the ADR world. Many mediation experts estimate that around 85 to 95 percent of all business partnership disputes are resolved effortlessly through mediation.
Ultimate Benefits of Mediation for Businesses
Does your shareholder or partnership agreement have any defined process? No? Well, it’s all fine. No need to fret. Mediations are the strategy that can help you craft an effective business partnership agreement with your expected partner to ensure business growth and sustain success.
Some of the key benefits of mediation in a business partnership dispute are;
1. Biasness In Decision Making
Mediation is the strategic process where an independent expert mediator is appointed in order to resolve the disputes between or among partners. The mediator facilitates discussions between the parties and help the parties to evaluate each and every factor transparently. The mediation process is considered to be a highly effective and beneficial way of resolving complicated disputes among partners working in a business.
2.Partners Have Complete Control Over End Outcomes
Unlike court litigation, in mediation, the mediator doesn’t impose any decision no matter how fair or unbiased it is. The outcome is hugely within the complete control of the partners. Thus, mediation helps encourage effective and productive collaboration and decision making among partners.
3. Cost-Effective Approach To Resolve Disputes Efficiently
Mediation is a more cost effective procedure compared to litigation or arbitration. The mediation process allows for a flexible procedure that can be set up quickly, for this reason it remains the favoured choice for parties who want to avoid traditional litigation.
Mediation is much quicker than conventional litigation or court. Also, in mediation, there is more flexibility on the terms the parties can agree to conclude matters with the use of innovative and creative ideas the parties involved in a dispute can reach a settlement that works for them.
One of the most valued differences between mediation and litigation is that litigation is all about one partner vs. another partner. Meditation, on the other hand, is all about one partner working with another partner to obtain a mutually favourable result ultimately.
Why Mediation Is Unique?
Already convinced about mediation? Here is more to explore its ultimate constructive benefits for businesses.
- It is voluntary.
- It can be cheaper.
- It can be less stressful than litigation
- It is completely confidential.
- The mediator is unbiased and non-judgmental.
- Give complete control to parties.
- Resolve disputes more quickly.
- Encourages quick resolution of disputes among partners.
- Provide creative and constructive solutions based on facts.
- Mediation is highly effective based on supportive solutions that can better meet your business needs enabling you to resolve partnership complications as early as possible without any barriers.
- It helps find common ground and provides a sophisticated solution that both parties can agree upon ultimately.
Resolve Business Partnership Dispute by Hiring Minute Mediation Ltd. Now
Considering the increasing business partnership dispute in the UK’s business landscape, it is highly suggested to consult a professional conflict management consultancy that can help you effectively resolve your challenges and come to a mutual agreement.
We specialise in offering commercial and workplace mediation to all small, medium and large scale businesses. Our team of professional mediators are highly talented having years of experience under their belt have been successfully supervising businesses in numerous types of mediation including our bespoke conflict science tools, business mediation, online dispute resolution, property mediation and more according to your unique needs.
Our process of helping companies and individuals with their business challenges and issues is simple and easy to follow. We first make sure to discuss the specific issues, get an agreement to mediate signed by all the parties involved in the dispute or disagreement, talk to every party on an individual basis, and finally facilitate discussions to a mutual agreement that can best suit everyone’s interests.
Already convinced about mediation?
Why wait anymore?
Contact us today and we will connect you to an experienced mediator along with a mediation summary program to help you overcome your business challenges.