Alternative Dispute Resolution Methods and CSR

How are Alternative Dispute Resolution Methods and Corporate Social Responsibility related?


Alternative Dispute Resolution Methods (ADR) are those alternative mechanisms to a judicial process that seek to provide an appropriate or tailor-made solution to the parties involved in a particular conflict, at the time required and in the way it best suits their needs. There is a great number of ADR, since its foundation lies in the will of the parties, with the limit of legality. All of them have a direct connection with Corporate Social Responsibility (CSR), due to their primary purpose of preserving the relationship between companies and their stakeholders.


And how can a company’s relationship with its stakeholders be preserved or even improved using ADR methods?

First, a socially responsible management requires identifying the individuals affected by the business’ activity and promoting a dialogue with them. CSR acts positively incorporating value to the company through its effect on the different stakeholders: commercial activity and consumption, environment, human rights, working conditions, community social investment, shareholder benefit, corporate ethics, among others.

Secondly, a company that cares about its employees, executives, customers, suppliers, neighbours, and its shareholders, etc., is a company that strives to make its policies and practices increasingly better for its stakeholders.

Finally, being the conflict an ever-present element, although not always wanted, it is inevitable that the company would have to confront it. At this point, the practice of ADR can be very useful in adapting the response to the company’s vision, respecting the company’s interests and the individuals with whom it is in constant relationship, with the main purpose of maintaining, and even improving these relationships, being a way of innovating, creating wealth and institutional strengthening.

ADR methods allow to resolve conflicts in a more economical and faster way than through judicial proceedings. It improves the work environment and, therefore, the relations among and with the workers and the managers. It also creates a common business strategy in which the failures or shortcomings that exist become evident, improving itself and giving a positive and unitary vision to the society.


But in practical terms, how can we implement these mechanisms in a socially responsible company?

The answer is very simple. Within an effective strategy a Protocol for conflict situations can be established and it should be known by every stakeholder. This implies a significant economic investment, but it will be rewarded in time and in judicial costs savings and improving the company’s overall quality.

This Protocol consists of plural instances to be followed in case of a conflict, identifying the action depending on the subject concerned. As mentioned before, it should be known by all stakeholders, and it should be characterized as a simple procedure, which reinforces trust in the enterprise and provides security and stability to them.

For example, through negotiation or mediation the relationship could be preserved and improved. These processes resolve the conflict without breaking the relationship, the problem is addressed, and the positions of the parties are heard. This process also makes it possible to identify whether the pretension and the underlying intentions are the same, since they do not always coincide. With this procedure the real conflict comes to light and it is solved with the contributions of the same conflicting parties, creating a stronger commitment than if it was imposed by a third party. These solutions have a positive effect on the parties and encourage their constructive side, saving the relationship, fostering trust, mutual respect and transparency.

In summary, when a company achieves the satisfaction of its stakeholders, something that cannot be universal or permanent, but through ADR can be improved, the company safeguards the internal and external relationships, creating an improvement system that increases its value.


Finally, who should incorporate the ADR culture to CSR companies?

The management of conflicts that can arise within and outside a company with its stakeholders can be done through models of internal or external management. Anyone can have the initiative, but if possible, it is convenient that their leaders commanded these proposals, innovating and distinguishing their own company with the competition, increasing their value and perception by their stakeholders.


M ª Inmaculada Rodríguez Roblero, PhD.

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