Project Management: A
Managerial Approach
Chapter 6 – Conflict and
Negotiation
Overview
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Operational Definitions
Negotiation
Facilitating PM
Partnering
Conflict
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The Nature of Negotiation - Concepts
Concepts
• (Goal) conflicts: Occur when an individual or group pursues
goals different from those of other individuals or groups.
• Negotiation: The process through which two or more parties
seek an acceptable rate of exchange for items they own or
control.
• Objective of negotiation: To reduce or resolve conflict.
• “Reduce” means no further action against another party is
contemplated. “Resolve” means all parties are satisfied to a
point below the level of frustration.
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Facilitating the Integration of Activities
• Lateral Relations allow decisions to be made
horizontally across lines of authority
• Because each area has its own goals, integrating
activities of two or more units is certain to
produce conflicts
• These conflicts may be resolved by negotiating a
solution, if one exists, that produces gains (or
minimizes losses) for all parties
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Negotiating a Resolution
• Approaching intraproject conflicts with a desire to
win a victory over the other parties is inappropriate
• The project manager should remember that he will
be negotiating with project stakeholders many times
in the future
• The proper objective should be to optimize the
outcome in terms of overall organizational goals
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Partnering, Chartering, and Change
• Three situations commonly arise during projects
that require the highest level of negotiating skill
the project manager can muster:
– The use of subcontractors
– The use of input from two or more functional units to
design and develop the project’s mission
– The management of changes ordered in the project’s
deliverables and/or priorities after the project is
underway
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Sources of Conflicts: (1) Partnering
• In recent years there has been a steady growth in the
frequency of outsourcing parts of projects
• There are many reasons for this trend:
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Avoidance of litigation
Diversification of technical risk
Avoidance of capital investment
Reducing political risk on multinational projects
Shortening the duration of the project
Pooling of complimentary knowledge
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Sources of Conflicts: (1) Partnering
• Generally, relations between the organization
carrying out a project and a subcontractor working
on the project are at best characterized as
adversarial
• Conflicting interests tend to lead both parties to
work in an atmosphere of mutual suspicion and
antagonism
• To reduce this conflict, a process for building
partnered projects can be used
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Process for Building Partnered Projects
• 1. The parent firm must make a commitment to
partnering, select subcontractors who will do the
same, and develop a “charter”
• 2. Both parties must implement the partnering
process with agreement on:
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Joint evaluation of the project’s progress
A method for resolving problems or disagreements
Acceptance of a goal for continuous improvement
Support for the process of partnering from senior management of both
parties
• 3. Both parties commit to a joint review of “project
execution” when the project is completed
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Sources of Conflicts: (2) Chartering
• A project charter is a written agreement between the project
manager, senior management, and the functional managers
who are committing resources to the project. The charter also
often includes the client.
• The charter may take many different forms
• Typically it details the project deliverables, often including the
project’s schedule and budget
• Most projects do not have charters
– Which is one reason for observing that most projects are not
completed on specification, on time, and on budget
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Sources of Conflicts: (2) Chartering
Chartering
(use of input from two or more functional units to
carry out project’s mission)
A written agreement between the PM, senior
management and the functional departments for a
commitment to
i. meet design intent,
ii. complete contract without need for litigation,
iii. finish project on schedule, and
iv.keep the cost growth to a percentage.
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Sources of Conflicts: (3) Scope Change
Scope change (management of changes, after
the project is underway)
Sources for change:
i. technological uncertainty,
ii. change in the environment in which the
project/product is to be used, and
iii. other needs for change identified when the
project is under way.
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Categories of Conflicts
• Goals: (Different goals & expectations)
– Groups working on the project may have different goals
and expectations
• Authority
– There is considerable uncertainty about who has the
authority to make decisions
• Interpersonal (conflicts)
– There are interpersonal conflicts between people who are
parties-at-interest in the project
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Parties at Interest
- Project team
- Client
- Functional Management
- Senior management
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Types of Conflicts
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Over schedules
Over priorities
Over labor
Over tech. opinions
Over procedures
Over costs
Over personality
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Issues/Types of likely conflicts during a Project
Project Formation Stage
Four fundamental issues:
– Technical objectives must be clear enough to allow detailed planning
• The breakdown structure
– The organizational structure of the project must be established to an
extent sufficient for the action plan, WBS, responsibility chart, and
network activity diagram to be prepared
• Top management support
– Commitment of resources to the project must be forthcoming from
senior management and functional managers
• Project’s level of priority
– The priority of the project relative to the priorities of the parent
organization’s other projects, must be set and communicated
• Organizational Structure
– (Who will do what…)
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Issues/Types of likely conflicts during a Project
Project Buildup Stage
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Project priorities
Schedules
Administrative procedures
Technical issues (between the project &
functional managers)
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Issues/Types of likely conflicts during a Project
Main Program Stage
Schedules & resource redistribution
– (when something got delayed and additional
resources are needed to catch up.)
– Perceived Competition for Scarce Resources
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Issues/Types of likely conflicts during a Project
Phase-out Stage (Implementation to Delivery Transition)
• Schedules and recovery from Schedule Slippage
(to meet the due date)
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Personality clashes
Resource distribution and Cost Overruns
Lack of Documentation (Change Orders)
Anxiety
– Potential for Litigation
– About Team Dissolution / What’s Next?
• Redistribution of Remaining Resources
– Rewards and Recognition
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Issues/Types of likely conflicts during a Project
• Figure 6.1 to see the intensity of each conflict type at
different stages
• Table 6.1 to see project conflicts by categories and
parties.
• If the above issues are not well defined or worked
out, conflicts are more likely to occur, and with
higher intensity.
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PLC and Conflict Intensity
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Project Conflict Categories
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Three main requirements of project negotiation
• Conflicts must be settled without irreparable
harm to the project’s objectives
• The methods must foster honesty between
negotiators
• The solution must satisfy not only the needs of
the negotiating parties but also other parties to
the conflict, including their parent
organizations.
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Principled Negotiation
A process of reaching agreement by following
the four guidelines:
• Separate the people from the problem
• Focus on interests not positions
• Invent options for mutual gain
• Insist on using objective criteria
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