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MGT 550: Introduction to Project Management

MGT 550
Introduction to
Project Management
Chapter 6:
Conflict and
Negotiation

Wesley J. Howe School of Technology Management

Course Development Team Members:


Michael Poli
Celia Desmond, PMP
David Keeney, PMP, CQM, CPDT

March 31, 2002 For academic use only. 1


MGT 550: Introduction to Project Management

Copyright Information
The slides in this file are provided to faculty instructing MGT 500 on behalf of the
Stevens Institute of Technology. Use is restricted to academic endeavors
associated with the delivery of MGT 550 to students properly enrolled at the
Stevens Institute of Technology. All other rights are reserved by the original owners
of materials contained in this program.

The slides contain copyrighted material that has been reproduced and/or adapted to
the course syllabus under the doctrine of “fair use for academic purposes”. All
slides in this course are copyrighted by the original source. Requests to reproduce
materials for other purposes should be directed to the copyright owner identified in
the bibliography that will be made available to faculty.

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MGT 550: Introduction to Project Management

Module 6: Conflict & Negotiation

Purpose: prepare students to identify


potential strategies for dealing with conflict
and to recognize that negotiation can be
used to resolve many problems associated
with conflict among stakeholders.

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MGT 550: Introduction to Project Management

Module 6 Objectives
• Conflict Strategies
– Describe five possible methods for dealing with conflict
– Present the advantages and disadvantages of each
method for dealing with conflict
– Explain that each method can be an appropriate
response to conflict
– Introduce the concept of situational leadership
– Explain that the nature of conflict will usually change
over the project lifecycle

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MGT 550: Introduction to Project Management

Conflict

• Conflict
– “process which begins when one party perceives that
the other has frustrated, or is about to frustrate, some
concern of his”
– Can play creative role in planning process
• Debate over proper technical approach to
problem often generates collaborative solution
that is superior to solution originally proposed
• Conflict often educates individuals and groups
about goals/objectives of other individuals and
groups

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MGT 550: Introduction to Project Management

Constructive Results of Conflicts

• Stimulation of a search for new facts or


resolutions
• Improved communication
• Diffusion of more serious conflict
• Increase in group cohesion and
performance
• Development of problem solving
techniques

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MGT 550: Introduction to Project Management

Conflict Coping Styles

• Withdraw/Avoid
• Accommodate/Smooth-over
• Dominate/Confront
• Compromise
• Problem-Solve

Each style has appropriate


and inappropriate uses.
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MGT 550: Introduction to Project Management

Withdrawing (Avoiding)

Appropriate: Not Appropriate:


• Trivial issue • Important issue
• Costs > benefits • You are
• Need to cool-off responsible
first • Not willing to defer
• Prompt action is
needed

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MGT 550: Introduction to Project Management

Accommodating (Smoothing)
Appropriate: Inappropriate:
• I might be wrong • I am right
• Issue important to • Issue important for
other person but not me
to you
• My position is weak • As temporary
solution to be
• The relationship is
important renegotiated later
• Gain future leverage

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MGT 550: Introduction to Project Management

Dominate/Confront

Appropriate: Inappropriate:
• Speed is needed • Issue is complex
• Overcome assertive • Issue not
subordinates that important to me
lack expertise on • Both parties have
issue equal power
• Issue is important to
me

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MGT 550: Introduction to Project Management

Compromise

Appropriate: Inappropriate:
• Both parties have • One party is more
equal power and powerful
goals are mutually • Problem is too
exclusive complex
• Consensus not • Win-win can be
attained and better attained
methods have not
worked
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MGT 550: Introduction to Project Management

Problem-Solve
Appropriate: Inappropriate:
• Complex issue • Simple problem
• Need synthesis to • Immediate
get solution decision needed
• Time is available • Other parties are
• Teamwork needed not concerned
about problem

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MGT 550: Introduction to Project Management

Conflict Management Techniques


HIGH
SMOOTHING PROBLEM
SOLVING
(ACCOMMODATING)
RELATIONSHIPS

(COLLABORATING)
ORIENTATION

COMPROMISE

WITHDRAWAL FORCING
LOW (AVOIDING) (COMPETING)

LOW OBJECTIVE HIGH


ORIENTATION
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MGT 550: Introduction to Project Management

Module 6 Objectives
• Tuckman’s Model of Group Dynamics
– Describe the stages of group development
– Apply Tuckman’s Model to team development over the
project lifecycle

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MGT 550: Introduction to Project Management

Tuckman’s Model of
Group Dynamics
• Forming
• Storming
• Norming
• Performing
• Disbanding

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MGT 550: Introduction to Project Management

Module 6 Objectives
• Basic Negotiation
– Describe the basic principles of negotiation
– Emphasize the role and importance of a BATNA
– Emphasize the importance of learning from differences
– Give examples of how to negotiate for resources with
functional managers
– Explain the natural antagonism that exists between a
buyer and a seller.
– Explain the role of contracts in documenting a
negotiated “meeting of the minds”

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MGT 550: Introduction to Project Management

Nature of Negotiation

• Negotiation
– “the process through which two or more
parties seek an acceptable rate of exchange
for items they own or control”
– Favored technique for resolving conflict
• Firms should view conflicts within
organization as conflicts between allies,
not opponents

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MGT 550: Introduction to Project Management

Principled Negotiation
• Separate people from the problem
- Emotions and fact can be confused
- Define problem
• Focus on interests, not positions
- Bargaining, haggling (may have cultural linkages)
- Never focuses on real Issues
- Determine other party’s interests
• Invent options for mutual gain
- Enter knowing outcome they would like
- Blind to other outcomes
- Find options that produce mutual gain
• Insist on using objective criteria
- Find standards, use to determine quality outcome
- Make less a contest of wills

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MGT 550: Introduction to Project Management

BATNA

• Best
• Alternative
• To a
• Negotiated
• Agreement
Fisher & Ury,
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MGT 550: Introduction to Project Management

Dr. Stephen Covey’s 7 Habits of


Highly Effective People
1. Be proactive
2. Begin with the end in mind
3. Put first things first
4. Think win/win
5. Seek first to understand, then to be
understood
6. Synergize
7. Sharpen the saw

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MGT 550: Introduction to Project Management

Conflict and Project Lifecycle

• Certain patterns of conflict are associated


with different periods in life of project
1. Groups working on project may have different
goals and expectations
2. There is considerable uncertainty about who
has authority to make decisions
3. There are interpersonal conflicts between
people who are parties-at-interest in project

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MGT 550: Introduction to Project Management

Conflict in Projects

• Initially, most conflict centers around


inherent confusion of setting up project in
environment of matrix management
– Almost nothing about project or its
governance has been decided
– Moving from this chaotic environment to
buildup stage can be difficult

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MGT 550: Introduction to Project Management

Conflict in Projects
• To make transition from project formation to
buildup, 4 issues should be addressed:
– Technical objectives of project should be specified to
degree that will allow detailed planning of build up stage
to be accomplished
– Commitment of resources to project should be
forthcoming from senior management and functional
managers
– Priority of project relative to priorities of parent
organization’s other projects should be set and
communicated
– Organizational structure of project should be
established to extent sufficient for WBS and linear
responsibility chart preparation
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MGT 550: Introduction to Project Management

Conflict in Projects

• Formation is period during which project


moves from general concept to highly
detailed set of plans
– As plans become detailed, conflicts over
technical issues build
– Conflicts between project manager and
functional areas tend to predominate
• Usually, functional areas can claim more
technical expertise than project manager
who is usually a “generalist”

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MGT 550: Introduction to Project Management

Conflict in Projects

• Schedules are
– Still a major source of conflict in main program
– Proximate cause of schedule-related conflict is
usually different than in earlier stages
• “Catching up”
– Requires extra resources that functional
groups will demand
– Project manager may not have extra resources
• Technical conflicts are frequent and
serious during main program stage
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MGT 550: Introduction to Project Management

Conflict in Projects

• During main phase, many parts must be


linked properly
– These linkages are known as interfaces
– Number of interfaces increases rapidly as
project gets larger
– System gets more complex
• Need to manage these interfaces and
correct incompatibilities is key to
technical conflicts in main program phase

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MGT 550: Introduction to Project Management

Conflict in Projects

• Schedule is major source of conflict


during project phaseout
– Technical problems are comparatively rare
because most have been solved or bypassed
– Personality conflicts are second ranked source
of conflict during phaseout
• Pressure to complete project
• Anxiety about leaving the project
• Primary tool to accomplish conflict
resolution and reduction is negotiation

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MGT 550: Introduction to Project Management

Conflict in Projects

• Few conflicts arising in projects have to


do with whether or not task will be
undertaken
– Instead, they have to do with
• Precise design of deliverable
• How design will be achieved
• By whom and at what cost
• Implication is clear: Work of project will be
done

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MGT 550: Introduction to Project Management

Conflict Reduction/Resolution

• One requirement for conflict reduction/resolution


by project manager is that PM should allow
conflict to be settled without irreparable harm to
project’s objectives
• To do this, project manager should:
– Allow (and foster) honesty between negotiators
– Employ only ethical tactics during negotiation
– Understand that any behavior that breeds mistrust will
make future negotiations difficult, perhaps impossible
– Emphasize that conflicting parties are members of
alliance with strong common interests

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MGT 550: Introduction to Project Management

Legal Obligations

• Contracts create enforceable obligations


related to the natural antagonism that
exists between the buyer and the seller
– Allocation of resources
– Assignment of risk
• The contract formalizes the relationship
between the buyer and the seller

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MGT 550: Introduction to Project Management

Procurement Processes
Procurement Solicitation Solicitation Source Contract Contract
Planning Planning Selection Administration Closeout
Bid
Bidders Issue Receive Analysis
List
IFB Bids

RFI Brochures Negotiation


and Contract Contract
RFQ Quotations Selection Execution Closeout

RFP Proposals
or
Requisition
Time
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MGT 550: Introduction to Project Management

Typical Contract Clauses


• Payment • Government flow-
• Free will down clauses
• Whole agreement include:
• Notification – Termination for
• Termination convenience
• Damages – Privity
• Assignment
• Jurisdiction
• Disputes
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MGT 550: Introduction to Project Management

Reading Assignments

• From Chapter 6 • For Chapter 7


– Text – Text
• Pp 226 – 248 • Pp 261 – 292
• Pp 252 – 257 • Pp 295 – 301

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