10. Negotiation and Conflict Management in Project Management, 12th Oct 2015
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The document covers conflict and negotiation in project management, highlighting the causes of conflict, the difference between positional and principled negotiation, and the importance of understanding personal negotiation styles. It emphasizes the necessity of negotiation for alignment and resolution of disputes, and outlines various conflict handling styles such as integrating, obliging, dominating, avoiding, and compromising. Additionally, it stresses preparation for negotiation, understanding the parties' needs, and the emotional aspects involved in the negotiation process.
10. Negotiation and Conflict Management in Project Management, 12th Oct 2015
- 1. Negotiation and Conflict Management in Project Management Dr I C Stewart
- 2. • 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
- 3. We all want a fair share, but don’t we also want the biggest fair share?
- 4. “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
- 5. 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
- 6. 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?
- 7. 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
- 8. 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
- 9. “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
- 10. 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
- 11. 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.
- 12. 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.
- 13. 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.
- 14. 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?
- 15. 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
- 16. 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
- 17. 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
- 18. “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…
- 19. 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
- 20. 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
- 21. 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
- 22. Peter Fenn Fisher & Ury Harvard PoN