Which term describes the process where a neutral third party listens and reviews facts and makes a decision to settle a conflict?

• A. Action item
• B. Benchmark
• C. Arbitration
• D. Authority

Answer: (C)

Arbitation is a dispute resolution approach where a neutral third party listens to both sides, reviews the facts, and renders a decision to settle the conflict. The key idea is that the arbitrator’s decision is typically binding, meaning all parties must accept it much like a court judgment. This differs from mediation, where the mediator helps the sides negotiate a mutual agreement but does not issue a binding decision. The other terms don’t fit because an action item is simply a task to be completed, a benchmark is a standard used for comparing performance, and authority refers to the power to enforce rules or decisions. Arbitration is commonly used in business and labor contexts because it can be faster and more private than going to court.