Abstract
This article examines the strategic underpinnings of firms’ use of alternative dispute resolution (ADR) practices. The authors argue that a firm’s strategic orientation and commitment to ADR shape its adoption of dispute resolution techniques—such as mediation and arbitration. Firms vary in the benefits they seek to gain from adopting ADR practices, and firm-level use is affected by these anticipated benefits. The authors also propose a link between a firm’s commitment to the diffusion, access, and their use of ADR, on the one hand, and employee usage on the other. They test their theory using survey data from Fortune 1000 corporations and identify four distinct strategic orientations toward ADR, which in turn help to explain use of ADR within firms. Finally, they also find that a firm’s commitment to ADR is also shown to affect the firm’s use of mediation and arbitration.
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