Copyright 2009 John Wiley & Sons, Inc.

Chapter 4
Negotiation and the
Management of Conflict
The Nature of Negotiation
The process through which two or more
parties seek an acceptable rate of exchange
for items they own or control.
Parties to a negotiation often see themselves
as opponents
If they win, I lose
Project manager must avoid this on projects
as all stakeholders are interrelated
Ch #-2
Principles of Negotiation
Negotiation skills are the biggest skills
needed by project managers
Must negotiate to get the project
Must negotiate with line managers to
get the work done
Must negotiate to solve conflicts
Ch #-3
Project Negotiation Must
Must resolve conflict without major
damage to project objectives
Must foster honesty between the
negotiators
Since negotiators are not enemies,
must seek a mutually-agreeable
solution
Ch #-4
Partnering, Chartering, and
Change
1. Use of subcontractors
2. Use of input from two or more
functional units
3. Management of change
Ch #-5
Partnering
Project firm and subcontractors are at
odds on a project
Project firm wants high quality and low
cost
Subcontractors want high profits and
maximum flexibility
Ch #-6
Project Partnering
A method of transforming contractual
relationships into a cohesive,
cooperative project team with a single
set of goals and established
procedures for resolving disputes in a
timely and effective manner.
Ch #-7
Steps to Project Partnering
1. Project firm must commit to partnering
2. All parties must implement the
process
3. Joint review when finished
Ch #-8
Project Firm Commit to Partnering
Select subcontractors to include
Joint team-building exercises
Project charter
Ch #-9
Four-Part Agreement
1. Joint evaluation of project progress
2. A method for resolving disagreements
3. Continuous improvement
4. Support from senior management
Ch #-10
Joint Review
Setting this up requires a lot of
negotiation
This negotiation cannot be adversarial
in nature
It has worked well in some settings
Ch #-11
Chartering
Project Charter - A written agreement that
outlines the specifics of the project
Usually between all of the groups providing
people or other resources to the project
Agreeing to a charter implies members will
not make changes without consulting the
others

Ch #-12
Scope Change
The initial assessment was wrong
Project team learns more about the
project
Change is mandated
Client ask for changes
Ch #-13
Changes Imply Changes
Budget
Schedule
Performance
Priorities

Ch #-14
Conflict and the Project Life Cycle
1. R&D
2. Market introduction
3. Growth
4. Maturity
5. Deterioration
6. Death
Ch #-15
Project Life Cycle
1. Formulation
2. Buildup
3. Main program
4. Phase-out
1. Conceptualization
2. Planning
3. Execution
4. Termination
Ch #-16
Sources of Conflict
1. Different goals and expectations
2. Uncertainty about authority
3. Interpersonal conflict
Ch #-17
Project Formation
Conflict centers around the confusion of
starting a new project
Many of the policies and procedures have not yet
been formed
The objectives of the project are not yet finalized
Conflict cannot be avoided at this phase
In fact, much of this conflict is good conflict
Ch #-18
Handling Project Formation
Conflict
1. Technical objectives must be set
2. Senior management and line
managers must commit to the project
3. The priority for the project must be set
4. Organizational structure of project
must be established
Ch #-19
Project Buildup
Conflicts tend to be technical in nature
Conflicts tend to be between project
manager and line managers
Ch #-20
Main Program
Many conflicts are over schedules
Some tasks will be late and the
schedule will have to be adjusted or the
time made up
The more complex the project, the
more sources of conflict there are
There are also technical conflicts
Ch #-21
Project Phase-Out
Deadlines are a major source of conflict
Technical problems are rare
Personality conflicts will be a big deal
due to time pressures
Ch #-22
Project Negotiation Must
Must resolve conflict without major
damage to project objectives
Must foster honesty between the
negotiators
Since negotiators are not enemies,
must seek a mutually-agreeable
solution
Ch #-23
Principled Negotiations
1. Separate the people from the problem
2. Focus on interests, not positions
3. Before trying to reach agreement,
invent options for mutual gain
4. Insist on using objective criteria
Ch #-24