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Distinguish between mediation and arbitration as a means of dispute resolution - VCE - SSCE Business Management - Question 2 - 2017 - Paper 1
Question 2
Distinguish between mediation and arbitration as a means of dispute resolution. Explain a strategy that Shandra's Dairy Ltd could use to improve the efficiency and ... show full transcript
Worked Solution & Example Answer:Distinguish between mediation and arbitration as a means of dispute resolution - VCE - SSCE Business Management - Question 2 - 2017 - Paper 1
Step 1
Distinguish between mediation and arbitration as a means of dispute resolution.
Answer
Mediation and arbitration are both alternative dispute resolution techniques, but they differ significantly in their approach and outcomes.
Mediation is a collaborative process in which a neutral third party, known as the mediator, facilitates a discussion between the parties involved in a dispute. The goal is to help them reach a mutually agreeable solution. It is important to note that the mediator does not have the authority to make decisions or impose solutions; rather, they assist in communication and negotiation. This process is generally more informal, allowing the parties to maintain control over the outcome, which can lead to solutions that are satisfactory for all.
Arbitration, on the other hand, is more formal and similar to a legal proceeding. In this process, a neutral third party, called the arbitrator, hears the evidence and arguments from all parties and then makes a binding decision. Unlike mediation, the parties relinquish control over the outcome to the arbitrator, whose decision is typically final and enforceable by law. Arbitration may be faster than litigation but less flexible than mediation since it follows a more structured format.
In summary, mediation emphasizes collaboration and mutual agreement, while arbitration focuses on a binding resolution provided by an arbitrator.
Step 2
Explain a strategy that Shandra's Dairy Ltd could use to improve the efficiency and effectiveness of its operations in relation to materials.
Answer
One effective strategy that Shandra's Dairy Ltd could implement is the Just-in-Time (JIT) approach for managing materials. This strategy focuses on minimizing inventory levels by ensuring that materials arrive at the production facility just as they are needed for manufacturing.
Benefits of JIT:
- Reduced Inventory Costs: By adopting JIT, Shandra's Dairy Ltd can reduce the costs associated with maintaining large inventories, such as storage, insurance, and spoilage.
- Improved Cash Flow: Less capital tied up in inventory allows for better cash flow management, enabling the company to invest resources in other areas.
- Increased Efficiency: With materials arriving exactly when needed, the production process becomes smoother, and the likelihood of production delays due to stock shortages is minimized.
Implementation Considerations: To effectively implement JIT, Shandra's Dairy Ltd should establish strong relationships with reliable suppliers to ensure timely delivery. Additionally, they should invest in inventory management systems to monitor stock levels and forecast demand accurately.
In conclusion, using the JIT approach will not only streamline materials management for Shandra's Dairy Ltd but also enhance overall operational efficiency.