This study investigated how managers resolve disputes in organizations, comparing a typology of managerial third-party dispute-resolution behavior drawn from prior research to the behavior of management students playing third parties in dispute-resolution simulations. We evaluated the third parties' behavior against standard measures of procedural and distributive justice, making this the first study of managerial dispute-resolution behavior that investigates the relationships among third-party behavior, the type of resolution achieved, and perceptions of justice.

Using a simulated organizational dispute, we contrasted the behavior of intervening third parties who had formal authority over the disputants to that of third parties who had no authority over them and examined the effect on third-party behavior of actual supervisory experience. The study also tested the relationships among third-party behavior, the outcome of the dispute and disputants' perceptions of fairness. Subjects were M.B.A. candidates and executive program participants; 99 percent had full-time work experience and 30 percent had more than five years of supervisory experience. Both the manipulated role and actual supervisory experience affected third-party behavior, which in turn affected outcome and fairness judgments.