Business Mediation: An Overview and Practical Tips

Updated December 12, 2022

Most businesses experience conflict at some point, and mediation can be an effective way to reach resolutions. Business mediation refers to the process of using a neutral third party to help resolve conflicts. If you're a part of a business, you might find it helpful to learn mediation skills so that you can effectively resolve disputes and maintain a positive workplace. 

In this article, we describe business mediation, explain when to use it and list tips for mediating conflicts.

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What is business mediation?

Business mediation is a way to resolve conflict in the workplace. In the mediation process, a neutral third party helps the other parties negotiate and resolve a dispute. The purpose of the third party is to add a perspective that isn't emotionally invested in the conflict. This can help the conflicting parties to communicate more logically and effectively.

Mediation can be useful for handling personal disputes among employees, negotiating contracts and resolving other work-related situations. It can also be an alternative to litigation — the mediator can help both parties reach a resolution, allowing the company to resolve conflicts and minimize legal expenditure. This technique also helps a company use its time effectively. Furthermore, reaching mutually beneficial resolutions may increase employee morale and help a company become more successful.

Related: How To Mediate Conflict in the Workplace (With 9 Tips)

When to use business mediation

Here are a few situations that business mediation could help resolve:

Personal disputes

Mediation can be useful for resolving personal disputes between employees. Often, a personal dispute involves a high level of emotion, and adding a third party who doesn't have any emotional investment can help both parties think logically. For example, if two employees in a company are in a personal argument during business hours that they cannot resolve on their own, you could act as a mediator to help them resolve the conflict.

Related: 5 Effective Strategies and Steps for Conflict Resolution

Business partner disputes

Similar to its impact on personal disputes between workers, mediation can help in resolving conflicts between business partners. If a company partners with another business, it's important to have a strong strategy for handling conflicts. Adding a mediator can help both sides reach a resolution they feel is fair and beneficial to them. This can help both businesses avoid going to court, which saves them money and time.

Contract negotiations

Having a mediator can also be helpful for contract negotiations. Business contracts typically take place between two parties, and adding a neutral third party can help ensure that the contract terms are fair for both parties and meet everyone's needs. A third party can also settle any interpersonal disputes that arise during the contract negotiation process.

Related: 15 Tips for Successfully Negotiating a Contract

Real estate issues

Businesses sometimes face real estate issues, and you can use mediation as a tool to resolve conflicts. A mediator can help create contracts and other agreements and resolve disputes related to them. This can simplify real estate issues without needing to pay for lawyers or other legal costs.

Employer-employee disputes

Mediation can also help resolve disputes between employers and employees, such as wage disputes or employee complaints. Business mediation can allow companies to resolve these disputes with the help of a third party and without the cost and time investment that litigation requires. Additionally, maintaining a reputation for managing conflicts quickly and effectively can improve a company's reputation among job seekers and build employee engagement.

Related: What Is a Mediator? Definition, Roles and Steps

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Tips for business mediation

Here are some tips to help you use business mediation successfully in a company:

Make sure both parties agree to mediation

One key factor of mediation is that it's voluntary. Before you find a mediator or offer to mediate, ensure that both parties agree to mediation as the method of conflict resolution. Keep in mind that the mediator can't force the parties to come to a resolution. Instead, the mediator can guide both parties to have a productive discussion and reach a satisfactory resolution collaboratively.

Related: 10 Types of Communication Degrees To Consider for Your Career

Find a good mediator

If you feel you can't mediate a specific conflict in the workplace, consider looking for someone who can. Finding a good mediator can help ensure that the conflict is resolved successfully and satisfactorily. Both parties must agree on the mediator, and this professional should offer a neutral perspective and inspire productive dialogue. Additionally, a mediator with experience in conflict resolution is essential.

You can also consider searching for a mediator who specializes in your industry or in certain types of business conflicts. For example, if you work in the real estate industry, you could find a mediator with experience in resolving conflicts related to real estate.

Related: How To Become a Mediator: Certifications and Training

Keep it confidential

Another important aspect of mediation is that it's confidential. For the mediation environment to feel safe, all parties involved should be comfortable and know that the process is confidential. You can also persuade the parties to sign confidentiality agreements that minimize the risks of a company's information reaching the public. Confidentiality can help keep the entire mediation process controlled.

Related: Handling Workplace Conflict (With Interview Questions)

Control emotions

It's also important to manage the emotions of all parties during mediation through techniques like maintaining a professional demeanor or using empathy to relate to each party. The role of the mediator is to offer a perspective that isn't emotionally invested, and the other parties should also try to control their emotions to think logically about the issue. This can help keep conflict resolution professional, and it can make the process smoother and more efficient.

Related: Mediator Skills: Definition and Examples

Use active listening

Active listening is an effective way to enhance communication. Active listening skills, like eye contact and giving feedback, show other people that you're paying attention to them. Whether you mediate yourself or find someone else to be a mediator, it's important to show all parties involved in a conflict that their opinions matter. This may help them reach a more effective solution.

Related: Qualities of a Good Listener and How To Be One

Be patient

Try to be patient during the process of mediation. For some conflicts, it can take time to reach a resolution, and it's important to be patient to reach a resolution that all parties can accept. Taking the time to discuss an issue thoroughly and reach a good resolution can help ensure that you fully resolve the conflict so it doesn't resurface in the future.

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