Ch. 6: Conflict and Negotiation

1. Ch. 6: Conflict and Negotiation Most Conflicts Have Their Roots in Uncertainty, and Negotiation Is a Way of Managing the Resultant Risk

2. Ch. 6.0: A Good Way to Understand Conflict Conflict is a process which begins when one party perceives that the other party has frustrated some concern of his/her

3. Ch. 6.0: When Is a Conflict Resolved? When the level of frustration has been lowered to the point where no action against the other party is being contemplated

4. Ch. 6.1: Two Definitions of Negotiation • Negotiation is a process through which the parties seek an acceptable rate of exchange for items they own or control • Negotiation is an endeavor that focuses on gaining the favor of people from whom we want things

5. Ch. 6.1: Pareto-optimal Solution A solution, such that no party can be made better without making another party worse off by the same amount or more (the antithesis of a win/win situation)

6. Ch. 6.2: Partnering Partnering is a method of transforming contractual relationships into a cohesive, cooperative project team with a single set of goals

7. Ch. 6.2: Multi-step Process for Building Partnered Projects • Commitment • Four part agreement: • Joint progress evaluation • Problem resolution method • Continuous improvement goals • Joint review at project termination

8. Ch. 6.2: Project Charter Written agreement between PM, senior management and functional managers, committing resources and people to the project

9. Ch. 6.2: A Charter Is a Signed Commitment To: • Meet design intent • Complete contract without the need for litigation • Finish the project on schedule • Keep cost growth equal or below a predetermined amount

10. Ch. 6.2: Scope Changes Are Caused By: • Technological uncertainty • When the project team learns more about the nature of the deliverable • A mandate

11. Ch. 6.2: Conflicting Priorities • High priority projects: currently supported by senior management • Lower priority projects: should be done if time and resources permit • Mandates: must be done immediately

12. Ch. 6.2: …. And Then There Is This Pearl of Wisdom This project is so important, we cannot let things that are more important interfere with it

13. Ch. 6.3: Conflict Sources • Schedules • Priorities • Staff and labor requirement • Technical factors • Administrative procedures • Cost estimate • Personality conflicts

14. Ch. 6.3: The Three Fundamental Conflict Categories • Different groups with different goals • Who makes decisions • Interpersonal conflicts

15. Ch. 6.3: Conflict and the Project Life Cycle (PLC) • The project life cycle (PLC) • Nature of conflicts in the PLC • Linkage of PLC with conflict categories

16. Ch. 6.3: Four Phases of Project Life Cycle As Seen By:

17. Ch. 6.3: Personality Clashes Senior Management  PM  Client

18. Ch. 6.3: Project Manager Vs. Functional Manager Conflicts • PM concern: project • FM concern: day-today operations

19. Ch. 6.3: Who Decides in a Matrix Organization? • PM: schedule and flow of work • FM: technical decisions, manpower

20. Ch. 6.3: When Top Management Fixes Time and Cost Too Tight • Underestimation of cost and time • PM tries to pass cost and time squeeze on to FM • FM complains to senior management that he/she cannot meet cost and time goals

21. Ch. 6.3: Conflicts by Category and Parties-at-Interest

22. Ch. 6.3: Whose Priorities are ruling? • Functional manager • Client • Project team

23. Ch. 6.3 Methods for Settling Project Priority Conflicts • Priority ranking through PS model • Priority ranking through senior management

24. Ch. 6.3: The“Who” and “What” of Matrix Organization Conflicts (*) Good example of senior management wanting to have their cake AND eat it!

25. Ch. 6.3: Conflicts in the different phases of the PLC

26. Ch. 6.3: Fundamental Issues for Conflict during Project Formation • Technical objectives • Commitment of resources • Priority • Organizational structure

27. Ch. 6.3: Questions leading to Conflict during Project Formation • Which of the functional areas will be needed to accomplish project tasks? • What will be the required level of involvement of each of the functional areas? • How will conflicts over resources/facility usage between this and other projects be settled?

28. Ch. 6.3: More Questions leading to Conflict during Project Formation • What about those resource/facility issues between the project and the routine work in the functional departments? • Who has the authority to decide the technical, scheduling, personnel and cost issues? • How will changes in the parent organizations priorities be communicated to everyone involved?

29. Ch. 6.3: Who Will Win the Argument?

30. Ch. 6.3: The “Height” of Conflict During Project Buildup

31. Ch. 6.3: How a Main Phase Scheduling Conflict Develops • Some project activity runs into trouble • Some tasks dependent on (1) will be delayed • (2) will delay the entire project • PM tries to prevent (3) from happening by requesting resources from his dear buddy, the FM • PM Vs. FM (looks like deja vue!)

32. Ch. 6.3:Environment for Conflict during Phase out • Schedule slippage consequences from main phase felt strongly during phase out • Firm deadlines  hectic environment • Substantial cost overruns ignored to meet deadline  potential conflict with senior management • Functional groups needed to support project team to meet deadlines  potential conflict with FM (outch! Not again!)

33. Ch. 6.3: Personality Conflicts During Project Phase out • Pressure to complete project • Anxiety to leave project • Distribution of project resources at project termination • Fresh starting projects Vs. Phasing out projects

34. Ch. 6.3: Discipline Oriented Vs. Problem Oriented Individual “He/she will do whatever he/she thinks is right to get his/her own job done, whether or not it is good for the company or anyone else” Pelled and Adler, 1994

35. Ch. 6.3: Successful Handling of Conflicts by PM Ability to reduce and resolve conflict in ways to support achievement of project’s goals Primary tool: Negotiation

36. Ch. 6.3: Preview and Reading for Ch. 6.4 • Pinto and Kharbanda (1995) – conflict resolution in the spirit of win-win negotiation • Dyer (1987) – focus on conflict between team members • Afzalur (1992) – general work on win-win negotiating Similarities between the confrontation-problem solving technique and win-win negotiation:

37. Ch. 6.4 Negotiations NOT covered in Section 6.4 • President and Congress • NFL player’s agent and team • Real-estate buyer and seller • Divorce • Collective bargaining agreement • Tourist and peddler

38. Ch. 6.4: Key to Understanding the Nature of Negotiating NOT: whether or not a task will be undertaken or a deliverable produced BUT: project design of the deliverable and/or how the design will be achieved, by whom, and at what cost

39. Ch. 6.4: Main Requirement for Conflict Reduction/Resolution Conflict is to be settled without irreparable harm to the project’s objectives

40. Ch. 6.4: Second Requirement for Conflict Reduction/Resolution Honesty between negotiators

41. Ch. 6.4: The Win/Win Solution Seek solutions to the conflict that not only satisfy an individual’s own needs, but also satisfy the needs of other parties-at-interest and the parent organization

42. Ch. 6.4: Principled Negotiation • Separate people from problem • Focus on interest, not position • Before trying to reach agreement, invent options for mutual gain • Insist on using objective criteria

43. Ch. 6.4: How to Separate People from Problems Carefully define the substantive problem Then, let everyone work on the problem – not on the person

44. Ch. 6.4: How to Focus on Interest, not Position WRONG: Focus on position PM: “I need this subassembly by November 15”FM:” I will not deliver it before February 1 next year” RIGHT: Focus on interest FM and PM: “Let’s talk about the schedule for this subassembly.”

45. Ch. 6.4: Two Examples of Negotiating Positions 1. Real estate bidder, assuming a future property value:“I will not pay more than 1 Million for that property” 2. Assume that a workgroups current workload will not change, PM states:“We cannot deliver this subassembly before February 1”

46. Ch. 6.4: Shifting Focus from Position to Interest Real estate bidders true interest: Earn a certain return on investment in the property Workgroup PM’s true interest: Not to commit to delivery of work if delivery on the due date cannot be guaranteed

47. Ch. 6.4: An Interest Negotiator’s Knowledge and Purpose Knowledge:The parties-at-interests interests Purpose: Suggesting solutions that satisfy the conflicting parties interests without agreeing with either sides position

48. Ch. 6.4: Before Reaching Agreement, Invent Options for Mutual Gain Marital conflict: Joe wants to go to the mountains Sue wants to go to the shore WIN/WIN solution: Go to lake Tahoe

49. Ch. 6.4: Four Steps to Move from Parties-at-Conflict to Win/Win • Parties-at-conflict (p-a-c’s) enter negotiations knowing what they want • The interest negotiator spells out the “Substantive problem” • As the interest negotiator presents a variety of possible solutions that advance the mutual interest of the p-a-c’s, the p-a-c’s converge in their positions • 4. A win/win situation emerges

50. Ch. 6.4: Key to Finding a Negotiator’s Interests and Concerns Ask “WHY?” when he or she states a position