Negotiation and Conflict

Management in Project

Management

Dr I C Stewart

• Identify conflict and negotiation in project work

• Identify some causes of and differentiate between

conflict and dispute in projects

• Describe the differences between Positional and

Principled negotiation

• Evaluate personal conflict handling/negotiation

style

Objectives For

This Session

We all want a fair

share, but don’t we

also want the biggest

fair share?

“Of conduct, actions, arguments, methods:

…Equitable; not taking undue advantage; disposed to

concede every reasonable claim…”

“Of conditions, position, etc.: Affording an equal

chance of success; not unduly favourable or adverse

to either side.”

OED

What is ‘fair’?

• Is any profit-oriented exchange situation ever really

capable of producing this? Legitimated inequality…

• We naturally pursue or seek to restore equity

• If we can get more than equity, we will.

• This will lead to conflict

All conflicts in project work emanate from the fact that the

work requires us to deal with other people…

• Exactly what do we exchange, why and how?

• Uncertainty

• Frequency

• Level and kind of investment

• Opportunism

• Profit maximisation

• Trust

What happens when things go wrong?

To what degree can this be planned for?

Drivers for

Conflicts

With the Customer/Clients and

Subs/Suppliers:

Price/Price Changes

Scope and Goals

Limitation of Liability

Liquidated Damages/Penalties

Payments

Intellectual Property

Responsibilities of stakeholders

Stakeholder requirements

Changes/change management

Warranties

Termination

Also with:

Project staff

The PMO

Other PMs within/outside

your organisation

Your bosses

Ourselves

Where in Project Work is

there Conflict or

Negotiation?

Why Negotiate?

• We can’t always get things ‘our way’…

• Other people have their own priorities which may or may not

reflect our own and access to information which we may not

have.

• In the process, new and useful information might be

revealed.

• Therefore, we negotiate because it gives an opportunity to

improve our present situation and create alignment between

the different minds involved in our work.

• Transaction negotiation – reaching agreements for the future

• Dispute negotiation - resolving things that have occurred in

the past

Good Conflict?

“A normal process whereby socially valuable

differences register themselves for the enrichment of

all concerned…

“Consider it without ethical prejudgment; to think of it

not as warfare, but as the appearance of difference,

difference of opinions, of interests. For that is what

conflict means—difference. … As conflict is here in

the world, as we cannot avoid it, we should, I think,

use it. Instead of condemning it, we should set it to

work for us.”

Mary Parker-Follet

“Conflict is necessary and inevitable but… disputes are to be avoided.”

Fenn, P. (2012) Commercial Conflict Management and Dispute Resolution

When does a conflict become a dispute?

Dispute may emerge from conflict, but not

conflict from dispute.

Dispute ends projects and damages reputations

and relationships

Dispute

Fisher & Ury

• Separate the people from the

problem

• Focus on interests, not

positions

• Invent options for mutual gain

• Insist on using objective

criteria

• Know your BATNA

Positional

Negotiation A manipulative approach to cause the other party to lose

faith in their case and accept terms – negotiated to remain

close to opening position or an outcome that is better than

fair - gain through an opponent’s loss

• High opening demands

• Threats, tension, pressure

• Stretching the facts

• Desire to out manoeuvre the other side

• Desire for clear victory

• Emphasis on rights

• Predictable negotiating positions

The losing side may work to restore a sense of equity, to

get back what was lost at negotiation.

Principled

Negotiation Also known as ‘Integrative Negotiation’. This is done

through separating people from the problem, focusing on

interests not positions, inventing options for mutual gain,

selecting options using objective criteria.

• Makes things less ‘personal’

• Maintains relationships

• Achieves satisfactory agreements

• Can redress power imbalances

Search for objective criteria can take time, but prevents

dirty tricks or passive aggressive resistance. Converting

positions to positive interests can be complex, but results in

getting all concerns clear.

BATNA and WATNA

Best Alternative to Negotiated Agreement

Worst Alternative to Negotiated Agreement

Identify course of action that would have the highest

expected value for you if negotiation fails. This is your

BATNA.

Calculate the lowest-valued deal you are willing to

accept. If the value of the deal proposed to you is lower

pursue your BATNA. If the final offer is higher than your

BATNA you should accept it.

Determining the opponents BATNA is also useful.

Here comes trouble…

Established customer at contract renegotiation

time:

“Friendly Corp. has just offered me a lower price.

Either drop your price or we will take our business

elsewhere!”

Seems like an either/or.

Or is it?

What insights do the positional and principled

perspectives give us?

1. I argue my case with my colleagues to show the merits of my position

2. I negotiate with my colleagues so that a compromise can be reached

3. I try to satisfy the expectations of my colleagues

4. I try to investigate an issue with my colleagues to find a solution acceptable to us

5. I am firm in pursing my side of the issue

6. I attempt to avoid being put on the spot and try to keep my conflicts to myself

7. I hold on to my solution to a problem

8. I use give and take so that a compromise can be made

9. I exchange accurate information with a colleague to solve a problem together

10. I avoid open discussion of my differences with colleagues

11. I accommodate the wishes of my colleagues

12. I try to bring all of our concerns out in the open so that the issues can be resolved in the best possible way

13. I propose a middle ground for breaking deadlocks

14. I go along with the suggestions of my colleagues

15. I try to keep my disagreements with my colleagues to myself in order to avoid hard feelings 1 = rarely

5 = always

Conflict Handling Style

4, 9, 12 = Integrating

3, 11, 14 = Obliging

1,5,7 = Dominating

6, 10, 15 = Avoiding

2, 8, 13 = Compromising

Rahim, M. (1985) A Strategy for Managing Conflict in Complex Organisations.

Human Relations, 38 (1) 81-89

Conflict Handling Style

Integrating - using negotiations to understand the concerns and interests

of the other parties, solving problems in creative ways. However, they can

over-complicate matters.

Obliging – play down their own interests and differences to satisfy the

other party. They can, however, feel taken advantage of in situations when

the other party places little emphasis on the relationship.

Dominating – Dominators have strong instincts for all aspects of

negotiating. This style dominates the bargaining process but often neglects

the importance of relationships. Best in a crisis or when difficult decisions

have to be enforced, poor when there is time.

Avoiding – does not like to negotiate. When negotiating, tends to defer

confrontation however, they may be perceived as tactful and diplomatic and

useful where dysfunctional affect of confronting is more costly than

resolving.

Compromising – seeks what is fair and equal for all parties involved in the

negotiation. useful when both parties are equally powerful with mutually

conflicting goals.

.

Conflict Handling Style

“One advantage of integration over compromise... If

we get only compromise, the conflict will come up

again and again in some other form, for in

compromise we give up part of our desire, and

because we shall not be content to rest there,

sometime we shall try to get the whole of our

desire.”

Follett Again…

Negotiation

Preparation

• What are the causes of the dispute?

• What are the parties needs, goals and motivating

concerns?

• What are the facts associated with the dispute?

• Determine objective criteria for assessing

solutions/BATNA

• What are the desired outcomes, possible outcomes

or resisted outcomes?

• Who should be present/absent?

• Who should make the first offer and in what form?

• Always leave a "comfort zone" for the other party

But…

• People tend to believe that they are

cooperative and trusting yet, when asked

about the counterpart, people tend to believe

that the other party is just looking to win.

• People are irrational. We tend over value

how much we like or dislike the person we’re

negotiating with, rather than objectively

looking at the deal.

• Most people simply don’t enjoy the

negotiation process! Keld Jensen

Why Negotiators Still Aren’t Getting to ‘Yes’

Forbes Magazine

Is all emotion a

problem?

“Successful negotiators must experience the

emotion of love at one point in their life, to

know what it means to have been hurt in love

at one point in their life, to know success and,

perhaps most important, to know what it

means to know failure… The very good

negotiators, I think, are the ones with the life

stories.”

Lieutenant Jack Cambria

(longest-running head of the NYPD’s hostage negotiation team)

WSJ

Peter Fenn Fisher & Ury

Harvard PoN