Mike of Mikes Marketing Magic and Lisa of Lisas Computer Cave have been doing business with one another for over 10 years. Initially Lisa was quite happy with the relationship and found Mikes service to be excellent. Over the past year and a half, however, the pamphlets and advertising materials from Mikes Marketing Magic have been late with increasing, and alarming, frequency. Lisa has spoken to Mike about this, and while the problem was solved for a short time, it has recently begun to be a problem again. On the other hand, Mikes prices are the lowest that Lisa has managed to find.

From Mikes perspective, the relationship also began as prosperous. Recently, however, Lisa has hired a new accounts payable clerk, who regularly misses the due dates for payment and sends the money late. Mike also has suppliers and finds this inconvenient and that his relationships with his suppliers are deteriorating. As was the case with Lisa, Mike has called and spoken to the clerk, which improved things briefly, but they shortly reverted to late payments.

Last week Lisa ordered a shipment of brochures from Mike in preparation for a trade show sale that she had a table at this past Saturday. She had paid to be sponsor of the trade show to have a prominent table at the show. Without the brochures and advertising materials, Lisa was forced to give use her old advertisements to the people who came by her table. She believes that she lost significant business. When she called Mike, he told her that he was still waiting for payment from the last shipment, which was overdue, and was not at all sympathetic.

In light of the foregoing, and assuming that direct discussions between the parties has not been successful, answer the following questions:

a. List, and briefly explain, the dispute resolution mechanisms available to Mike and Lisa and provide three advantages and disadvantages for each (please explain your answers thoroughly and you may set it up in chart form). (24 marks)

b. If you were advising Lisa as to how to proceed, which one of the available mechanisms would you suggest she select and why, and which ones would you reject and why? (6 marks)