11

Project Management: A Project Management: A Managerial ApproachManagerial Approach

Chapter 6 – Conflict and Chapter 6 – Conflict and NegotiationNegotiation

22

OverviewOverview

• Operational DefinitionsOperational Definitions

• NegotiationNegotiation

• Facilitating PMFacilitating PM

• PartneringPartnering

• ConflictConflict

33

Conflict and NegotiationConflict and Negotiation

• Conflict has been defined as “the process which begins Conflict has been defined as “the process which begins when one party perceives that the other has frustrated, when one party perceives that the other has frustrated, or is about to frustrate, some concern of his”or is about to frustrate, some concern of his”

• Conflict can play a creative role in the planning processConflict can play a creative role in the planning process

• Debate over the proper technical approach to a problem Debate over the proper technical approach to a problem often generates a collaborative solution that is superior often generates a collaborative solution that is superior to any solution originally proposedto any solution originally proposed

• Conflict often educates individuals and groups about the Conflict often educates individuals and groups about the goals/objectives of other individuals and groupsgoals/objectives of other individuals and groups

44

The Nature of NegotiationThe Nature of Negotiation

• The favored technique for resolving The favored technique for resolving conflict is conflict is negotiationnegotiation

• Negotiation is “the process through Negotiation is “the process through which two or more parties seek an which two or more parties seek an acceptable rate of exchangeacceptable rate of exchange for for items they own or control”items they own or control”

• Firms should view conflicts within Firms should view conflicts within the organization as conflicts the organization as conflicts between allies, not opponentsbetween allies, not opponents

55

Facilitating the Integration of Facilitating the Integration of ActivitiesActivities

• Lateral RelationsLateral Relations allow decisions to be allow decisions to be made horizontally across lines of made horizontally across lines of authorityauthority

• Because each area has its own goals, Because each area has its own goals, integrating activities of two or more integrating activities of two or more units is certain to produce conflictsunits is certain to produce conflicts

• These conflicts may be resolved by These conflicts may be resolved by negotiating a solution, if one exists, that negotiating a solution, if one exists, that produces gains (or minimizes losses) for produces gains (or minimizes losses) for all partiesall parties

66

Negotiating a ResolutionNegotiating a Resolution

• Approaching intraproject conflicts with a Approaching intraproject conflicts with a desire to win a victory over the other desire to win a victory over the other parties is inappropriate.parties is inappropriate.

• The project manager should remember The project manager should remember that he will be negotiating with project that he will be negotiating with project stakeholders many times in the futurestakeholders many times in the future

• The proper objective should be to The proper objective should be to optimize the outcome in terms of overall optimize the outcome in terms of overall organizational goalsorganizational goals

77

Partnering, Chartering, and Partnering, Chartering, and ChangeChange

• Three situations commonly arise during Three situations commonly arise during projects that require the highest level of projects that require the highest level of negotiating skill the project manager negotiating skill the project manager can muster:can muster:– The use of subcontractorsThe use of subcontractors– The use of input from two or more The use of input from two or more

functional units to design and develop the functional units to design and develop the project’s missionproject’s mission

– The management of changes ordered in the The management of changes ordered in the project’s deliverables and/or priorities after project’s deliverables and/or priorities after the project is underwaythe project is underway

88

PartneringPartnering

• In recent years there has been a steady In recent years there has been a steady growth in the frequency of outsourcing parts growth in the frequency of outsourcing parts of projectsof projects

• There are many reasons for this trendThere are many reasons for this trend::– Avoidance of litigationAvoidance of litigation– Diversification of technical riskDiversification of technical risk– Avoidance of capital investmentAvoidance of capital investment– Reducing political risk on multinational projectsReducing political risk on multinational projects– Shortening the duration of the projectShortening the duration of the project– Pooling of complimentary knowledgePooling of complimentary knowledge

99

PartneringPartnering

• Generally, relations between the Generally, relations between the organization carrying out a project and organization carrying out a project and a subcontractor working on the project a subcontractor working on the project are at best characterized as adversarialare at best characterized as adversarial

• Conflicting interests tend to lead both Conflicting interests tend to lead both parties to work in an atmosphere of parties to work in an atmosphere of mutual suspicion and antagonismmutual suspicion and antagonism

• To reduce this conflict, a process for To reduce this conflict, a process for building partnered projects can be usedbuilding partnered projects can be used

1010

Process for Building Partnered Process for Building Partnered ProjectsProjects

• 1.1. The parent firm must make a commitment to The parent firm must make a commitment to partnering, select subcontractors who will partnering, select subcontractors who will

do the do the same, and develop a “charter”same, and develop a “charter”

• 2. Both parties must implement the partnering 2. Both parties must implement the partnering process with agreement on:process with agreement on:

• Joint evaluation of the project’s progressJoint evaluation of the project’s progress• A method for resolving problems or disagreementsA method for resolving problems or disagreements• Acceptance of a goal for continuous improvementAcceptance of a goal for continuous improvement• Support for the process of partnering from senior Support for the process of partnering from senior

management of both partiesmanagement of both parties

• 3. Both parties commit to a joint review of “project 3. Both parties commit to a joint review of “project execution” when the project is completedexecution” when the project is completed

1111

CharteringChartering

• A project charter is a written agreement between A project charter is a written agreement between the project manager, senior management, and the project manager, senior management, and the functional managers who are committing the functional managers who are committing resources to the project. The charter also often resources to the project. The charter also often includes the client.includes the client.

• The charter may take many different forms The charter may take many different forms

• Typically it details the project deliverables, often Typically it details the project deliverables, often including the project’s schedule and budgetincluding the project’s schedule and budget

• Most projects do not have chartersMost projects do not have charters – Which is one reason for observing that most Which is one reason for observing that most

projects are not completed on specification, on projects are not completed on specification, on time, and on budgettime, and on budget

1212

Scope ChangeScope Change

• There are three basic causes for change in There are three basic causes for change in projects:projects:– Planners made a mistake in their initial Planners made a mistake in their initial

assessment about how to achieve a given end or assessment about how to achieve a given end or in their choice of the proper goal for the projectin their choice of the proper goal for the project

– The client/user or project team extends its The client/user or project team extends its perspective on the nature of the project perspective on the nature of the project deliverable or on the setting in which it is to be deliverable or on the setting in which it is to be usedused

– There is a change in the environment in which the There is a change in the environment in which the project is being conducted forcing a mandatory project is being conducted forcing a mandatory changechange

1313

PrioritiesPriorities

• Most firms actually have only three Most firms actually have only three levels of priority:levels of priority:– High priority projectsHigh priority projects - the “set” of - the “set” of

projects currently being supportedprojects currently being supported– Low priority projectsLow priority projects - the projects “we - the projects “we

would like to do when we have the time would like to do when we have the time and money”and money”

– Urgent projects or MandatesUrgent projects or Mandates - - occasionally there are those projects that occasionally there are those projects that must be done immediatelymust be done immediately

1414

PLC and Conflict IntensityPLC and Conflict Intensity

1515

Project Conflict CategoriesProject Conflict Categories

1616

Conflict and the Project Life Conflict and the Project Life CycleCycle

• Certain patterns of conflict are associated with Certain patterns of conflict are associated with the different periods in the life of a projectthe different periods in the life of a project

• Conflict appears to fall into three Conflict appears to fall into three fundamentally different categories:fundamentally different categories:– 1. Groups working on the project may have 1. Groups working on the project may have

different goals different goals and expectations and expectations

– 2. There is considerable uncertainty about who has 2. There is considerable uncertainty about who has the the authority to make decisions authority to make decisions

– 3. There are interpersonal conflicts between 3. There are interpersonal conflicts between people who people who are parties-at-interest in the are parties-at-interest in the projectproject

1717

Settling Conflicts About Settling Conflicts About PrioritiesPriorities

• There are methods for settling conflicts There are methods for settling conflicts about priorities between projects:about priorities between projects:– The project selection model used to approve The project selection model used to approve

projects for funding often generates a set of projects for funding often generates a set of projects ranked by some measure of valueprojects ranked by some measure of value

– It is common for senior management to It is common for senior management to determine interproject prioritiesdetermine interproject priorities

– The relative importance of the various tasks in The relative importance of the various tasks in an individual project is set by the project an individual project is set by the project managermanager

1818

Settling Conflicts About Settling Conflicts About PrioritiesPriorities

• These methods are irrelevant if project and These methods are irrelevant if project and functional managers attempt to optimize functional managers attempt to optimize their individual interests over the total their individual interests over the total organizationorganization

• The conflict-resolution potential of partnering The conflict-resolution potential of partnering and project charters should be clearand project charters should be clear

• Neither technique will stop conflict from Neither technique will stop conflict from arising, but can sharply lower the intensity of arising, but can sharply lower the intensity of the conflicts as well as provide a framework the conflicts as well as provide a framework for resolving conflictfor resolving conflict

1919

PLC and Conflict – Early StagePLC and Conflict – Early Stage

• In the initial stage of the project life cycle, In the initial stage of the project life cycle, most of the conflict centers around the most of the conflict centers around the inherent confusion of setting up a project inherent confusion of setting up a project in the environment of matrix managementin the environment of matrix management

• At this point, almost nothing about the At this point, almost nothing about the project or its governance has been project or its governance has been decideddecided

• Moving from this chaotic environment to Moving from this chaotic environment to the buildup stage can be difficultthe buildup stage can be difficult

2020

• To make the transition from project formation to To make the transition from project formation to buildup, four fundamental issues must be addressed:buildup, four fundamental issues must be addressed:– The technical objectives of the project must be specified to a The technical objectives of the project must be specified to a

degree that will allow the detailed planning of the build up degree that will allow the detailed planning of the build up stage to be accomplishedstage to be accomplished

– Commitment of resources to the project must be forthcoming Commitment of resources to the project must be forthcoming from senior management and functional managersfrom senior management and functional managers

– The priority of the project relative to the priorities of the The priority of the project relative to the priorities of the parent organization’s other projects, must be set and parent organization’s other projects, must be set and communicatedcommunicated

– The organizational structure of the project must be established The organizational structure of the project must be established to an extent sufficient for the action plan, WBS, responsibility to an extent sufficient for the action plan, WBS, responsibility chart, and network activity diagram to be preparedchart, and network activity diagram to be prepared

PLC and Conflict – Transition PLC and Conflict – Transition StageStage

2121

PLC and Conflict – High ActivityPLC and Conflict – High Activity

• Planning to Implementation TransitionPlanning to Implementation Transition– Details from Generalities Create TensionDetails from Generalities Create Tension– Perceived Competition for Scarce ResourcesPerceived Competition for Scarce Resources– Technical Issues Become More SpecificTechnical Issues Become More Specific

• ImplementationImplementation– Actual Time/Cost Exceed PlanActual Time/Cost Exceed Plan– Technical ProblemsTechnical Problems– Integration IssuesIntegration Issues– Long HoursLong Hours– Close Proximity of Team MembersClose Proximity of Team Members

2222

PLC and Conflict – Late StagesPLC and Conflict – Late Stages

• Implementation to Delivery Implementation to Delivery TransitionTransition– Recovery from Schedule SlippageRecovery from Schedule Slippage– Cost OverrunsCost Overruns

•Lack of Documentation (Change Orders)Lack of Documentation (Change Orders)

•Potential for LitigationPotential for Litigation

– Anxiety About Team DissolutionAnxiety About Team Dissolution•What’s Next?What’s Next?

•Rewards and RecognitionRewards and Recognition

– Redistribution of Remaining ResourcesRedistribution of Remaining Resources