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I don’t know if you still need the answer but the answer is A.
Direct Democracy just means that your vote isn't represented by someone else, which would be indirect democracy (like how we have representatives that vote for us in congress). Since you are voting for something in the group "directly" that would be an example of direct democracy.
Answer:
Dispute resolution at initial level injects a sense of security and belief in an individual and hence improves the relationship between the two
Explanation:
The internal conflicts between the people and institution if resolved at an earlier stage build confidence in people working in the institution. They also start respecting the institution and start believing that their voices are also heard irrespective of their post.
This also brings clarity in relation and expectations both at the institution and individual level. Once a strong bond develops through this exercise of dispute resolution at initial level, the relation between institution and people become co-ordial.