Find Mediators Near You:

The Prevalence of Alternative Dispute Resolution Programs by US Small Businesses

Much has been written about the growth of ADR in the past 30 years, as well as the advantages of using ADR in our courts, schools and corporations. However, one shortcoming of existing research about corporate ADR is that much of our knowledge of how, why and when ADR is used is limited to single case studies. These cases give us a snapshot of a single company’s efforts to address conflict, but not a comprehensive understanding of the total range of ADR techniques and the scope of their use. The results described below are part of a larger research project exploring the expansion of ADR as a social movement in various institutional arenas over the last 30 years: corporations and HR departments, religious organizations, grass-root nonprofit organizations, public schools, and the legal system. This research attempts to make up for the regrettable lack of social science research measuring the extent of ADR programs in the corporate sphere, especially among small businesses.

To address this paucity in the research, my study examines the prevalence of ADR programs in small businesses in the South and Southeast regions of the U.S. The data was collected from a survey mailed to a sample of companies found in the Small Business Administration (SBA) online database. Questionnaires were mailed to 429 companies, and 376 HR officials responded to the survey, resulting in an impressive 87.6% response rate. To my knowledge, this is the largest survey done to date on how widespread the use of various dispute resolution techniques are in US small businesses (defined by the SBA to be less than 1500 employees).

The survey found that the small businesses in this sample were on average approximately 17 years old, ranging from 1 to 126 years. The size of these firms ranged from single owner/employee companies, to those having 1500 personnel, with an average of 47 employees. Many types of ADR techniques were asked about (based on a broad definition provided by Linda Singer, 1994, Settling Disputes: Conflict Resolution in Business, Families and the Legal System, Boulder: Westview Press), and then classified into two groups: traditional methods of handling workplace conflict (such as termination, leave of absence or demotion, a notation in one’s personnel file or pursing a formal or informal grievance procedure); and truly alternative methods of dispute resolution (such as an employee assistance program (EAP), a mediation or arbitration program, or a peer review or ombudsperson process).

I found that the most frequent form of dispute resolution remains termination (indicated by 24% of the sample) and notation in personnel file (approximately 22%). Following these primary methods, organizations also utilize other traditional programs such as informal (13%) and formal (11%) grievance procedures, instituting a leave of absence (11%), and demotion (5%).

While these traditional procedures remain a staple of management, more contemporary methods such as counseling (15%) are equally prevalent in dealing with conflict. Other non-traditional ADR programs have found a growing but small niche in some of the businesses employing larger numbers. Of all companies surveyed, only about 7% of organizations employ their own conflict resolution/mediation programs. An additional 3% have arbitration programs available and 2% utilize ombudspersons and peer review techniques (see the Table below).

As can be seen from the above results of this SBA survey, most companies still use what I call “traditional” methods of conflict resolution. This usually means getting rid of the employee that is the source of workplace conflict (termination or leave of absence), or shifting him/her to another part of the organization (demotion). However, my results show that alternative forms of conflict resolution are much less likely to be used by companies in our SBA sample. Only about 1 in 7 companies have an EAP or other employee counseling process, and less than half of that number has a mediation program. Fewer still use arbitration, ombudspersons, or a peer review process.

Despite its proven effectiveness, this study indicates that ADR programs are still not being incorporated wholeheartedly into small business management practices. Maybe it is because small businesses do not have the resources to train and staff a formal alternative dispute resolution program; or maybe smaller sized firms do not feel they are needed. My analysis showed that of those small businesses that do utilize ADR, they tend to have a larger number of employees, and have experienced workplace violence in the past. Further research is needed to investigate the extent and effectiveness of ADR programs in larger companies that have more resources to create and sustain them.

Table: Traditional and Alternative Methods of Conflict Resolution Used By US Small Businesses

Traditional Methods of Conflict Resolution:
Termination                                          24%
Notation in Personnel File                    22%
Informal Grievance Procedure            13%
Formal Grievance Procedure              11%
Leave of Absence                               11%
Demotion                                             5%

Truly Alternative Methods of Conflict Resolution:
Counseling/Employee Assistance Program (EAP)            15%
Mediation program                                                          7%
Arbitration                                                                       3%
Ombudspersons                                                            2%
Peer Review process                                                      2%


Mike McMullen

Dr. Mike McMullen is an associate professor of Sociology and Cross Cultural Studies at the University of Houston-Clear Lake in Houston, Texas. He received his doctorate from Emory University (Atlanta, Georgia) in 1995, and his bachelor’s degree in sociology and mathematics from the University of Kansas in 1989. His areas… MORE >

Featured Members

View all

Read these next


People with Depression Use Language Differently – Here’s How to Spot it

Empathy, clearly an important part of crisis negotiation and invetervention begins with understanding a person's perspective. From that understanding, the following I think you all will find interesting. Click the...

By Jeff Thompson

When Is the Right Time To Mediate?

Jeff Kichaven writes on mediation for the International Risk Management Institute. First published on For many years, I, like many other mediators, answered the question of when to mediate...

By Jeff Kichaven

Kitsch, Camp, “Fairly Legal” And The Selling Of Mediation

Now, two weeks after the debut of much hyped television program, “Fairly Legal,” that has stirred a remarkable amount of buzz---at least among professional mediators--- it might be a good...

By Robert Benjamin