This article throws light upon the top three methods adopted for managing conflict in an organisation. The methods are: 1. Collective Bargaining 2. Conciliation and Mediation 3. Arbitration.

Method # 1. Collective Bargaining:

It is the process of direct negotiation on a collective or group basis between the representatives of employers and their employees for the settlement of dis­putes. The mutual rights and obligations of both parties that are agreed by them through nego­tiation are written down in the form of an agreement or contract, which is legally binding on them.

Collective bargaining can also be defined as:

(а) Negotiations between the management and the union for agreeing on as written agree­ment covering the terms and conditions of settlement of the disputed issues.


(b) A give-and-take process involving proposals and counter proposals.

(c) Introduction of an element of democracy in the field of Industrial Relations.

Collective bargaining prevents unilateral actions related to employees, and it imposes cer­tain restrictions upon the employer.

Method # 2. Conciliation and Mediation:

If collective bargaining fails, then this may be adopted.


Conciliation consists of a series of conferences, including informal sitting between represen­tatives of the two parties, which are designed to create a friendly atmosphere, give and take attitude with a view to ultimately smooth out the differences.

When the conferences are held with an outsider as Chairman, the process is known as ‘Mediation’. In this method, the presence of a third party acts as a moderating influence on the two contending parties. What they themselves cannot settle, may be solved under the influence and with the suggestions of an outsider.

Method # 3. Arbitration:

When above two methods fail, then this can be adopted. In this, a third person is chosen as the Arbitrator by agreement between the employers and employees. He gives a hearing to both parties and then offers his own solution of the dispute.

In case of ‘Voluntary Arbitration’, the obligation to abide by his decision is moral one. Under ‘Compulsory Arbitration’, the parties have to abide by it under compulsion of law.


In India, a legal provision for Conciliation and Arbitration has been made in the Industrial Disputes Act, 1947.

Unfortunately, it has been experienced that both the procedures are not popular either with the workers or the management. However, these have been found useful in removing industrial disputes. The Whitley Commission has recommended the establishment of such councils for the industries in India.

In pursuance of this, Government of India established Indian Labour Con­ference, Standing Labour Committee and Industrial Committees for plantations, coal, mining and cotton textile industries. In the same manner, joint committees for factories are being established.