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Project ManagementA Managerial Approach
Chapter 6
Conflict and Negotiation
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Conflict and Negotiation
Conflict has been defined as the process which begins whenone party perceives that the other has frustrated, or is about tofrustrate, some concern of his
Conflict can play a creative role in the planning process
Debate over the proper technical approach to a problem often
generates a collaborative solution that is superior to anysolution originally proposed
Conflict often educates individuals and groups about the
goals/objectives of other individuals and groups
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The Nature of Negotiation
The favored technique for resolvingconflict is negotiation
Negotiation is the process through whichtwo or more parties seek an acceptablerate of exchange for items they own orcontrol
Firms should view conflicts within theorganization as conflicts between allies,not opponents
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Facilitating the Integration
of Activities
Lateral Relationsallow decisions to be madehorizontally across lines of authority
Because each area has its own goals,integrating activities of two or more units iscertain to produce conflicts
These conflicts may be resolved bynegotiating a solution, if one exists, thatproduces gains (or minimizes losses) for all
parties
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Negotiating a Resolution
Approaching intraproject conflicts with adesire to win a victory over the other partiesis inappropriate.
The project manager should remember thathe will be negotiating with projectstakeholders many times in the future
The proper objective should be to optimizethe outcome in terms of overall organizationalgoals
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Partnering,Chartering, and
Change
Three situations commonly arise duringprojects that require the highest level ofnegotiating skill the project manager can
muster:The use of subcontractors
The use of input from two or more functional
units to design and develop the projects missionThe management of changes ordered in the
projects deliverables and/or priorities after theproject is underway
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Partnering
In recent years there has been a steady growth inthe frequency of outsourcing parts of projects
There are many reasons for this trend:Avoidance of litigation
Diversification of technical risk
Avoidance of capital investment
Reducing political risk on multinational projectsShortening the duration of the project
Pooling of complimentary knowledge
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Partnering
Generally, relations between the organizationcarrying out a project and a subcontractorworking on the project are at best
characterized as adversarialConflicting interests tend to lead both parties
to work in an atmosphere of mutual suspicion
and antagonismTo reduce this conflict, a process for building
partnered projects can be used
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Process for Building
Partnered Projects
1. The parent firm must make a commitment topartnering, select subcontractors who will do thesame, and develop a charter
2. Both parties must implement the partneringprocess with agreement on:Joint evaluation of the projects progressA method for resolving problems or disagreementsAcceptance of a goal for continuous improvementSupport for the process of partnering from senior management of
both parties
3. Both parties commit to a joint review of projectexecution when the project is completed
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Chartering
A project charter is a written agreement between theproject manager, senior management, and the functionalmanagers who are committing resources to the project.
The charter also often includes the client. The charter may take many different forms
Typically it details the project deliverables, oftenincluding the projects schedule and budget
Most projects do not have chartersWhich is one reason for observing that most projects are
not completed on specification, on time, and on budget
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Scope Change
There are three basic causes for change inprojects:
Planners erred in their initial assessment about
how to achieve a given end or erred in theirchoice of the proper goal for the project
The client/user or project team learns more
about the nature of the project deliverable orabout the setting in which it is to be used
A mandate is a change in the environment inwhich the project is being conducted
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Priorities
Most firms actually have only three levels ofpriority:
High priority projects- the set of projectscurrently being supported
Low priority projects- the projects we wouldlike to do when we have the time and money
Urgent projects or Mandates- occasionallythere are those projects that must be doneimmediately
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Conflict and the Project
Life Cycle
Certain patterns of conflict are associated with thedifferent periods in the life of a project
Conflict appears to fall into three fundamentally
different categories:1. Groups working on the project may have different
goals and expectations
2. There is considerable uncertainty about who has the
authority to make decisions
3. There are interpersonal conflicts between people who
are parties-at-interest in the project
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Settling Conflicts About
Priorities
There are methods for settling conflicts about
priorities between projects:
The project selection model used to approve
projects for funding often generates a set of
projects ranked by some measure of value
It is common for senior management to
determine interproject priorities
The relative importance of the various tasks in an
individual project is set by the project manager
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Settling Conflicts About
Priorities
These methods are irrelevant if project andfunctional managers attempt to optimize theirindividual interests over the total organization
The conflict-resolution potential of partneringand project charters should be clear
Neither technique will stop conflict from
arising, but can sharply lower the intensity ofthe conflicts as well as provide a frameworkfor resolving conflict
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Conflict During Project
Formation
In the initial stage of the project life cycle,most of the conflict centers around the
inherent confusion of setting up a project inthe environment of matrix management
At this point, almost nothing about the
project or its governance has been decidedMoving from this chaotic environment to the
buildup stage can be difficult
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To make the transition from project formation tobuildup, four fundamental issues must be addressed:
The technical objectives of the project must be specified to a
degree that will allow the detailed planning of the build upstage to be accomplished
Commitment of resources to the project must be forthcomingfrom senior management and functional managers
The priority of the project relative to the priorities of the parentorganizations other projects, must be set and communicated
The organizational structure of the project must be establishedto an extent sufficient for the action plan, WBS and linearresponsibility chart to be prepared
Conflict During Project
Formation
C fli t D i P j t
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This is the period during which the project movesfrom a general concept to a highly detailed set ofplans
As the plans become detailed, conflicts overtechnical issues build
Conflicts between the project manager and the
functional areas tend to predominateUsually, the functional areas can claim more
technical expertise than the project manager who isa generalist
Conflict During Project
Formation
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Schedules are still a major source of conflict in the
main program, though the proximate cause of
schedule-related conflict is usually different than in
earlier stagesCatching up requires extra resources that the
functional groups will demand, but which the
project manager may not haveTechnical conflicts are frequent and serious during
the main program stage
Conflict During Project
Formation
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During this phase of the project the many parts must
be linked properly
These linkages are known as interfaces
The number of interfaces increases rapidly as the
project gets larger, which is to say that the system
gets more complex
The need to manage these interfaces and correct
incompatibilities is the key to the technical conflicts
in the main program phase
Conflict During Project
Formation
C fli t D i P j t
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Schedule is the major source of conflict during projectphaseout
Technical problems are comparatively rare because most
have been solved or bypassed Personality conflicts are the second ranked source of conflict
during phaseout
These conflicts can be caused by pressure to complete the
project and to the anxiety about leaving the project The primary tool to accomplish conflict resolution and
reduction is negotiation
Conflict During Project
Formation
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Few of the conflicts arising in projects haveto do with whetheror not a task will be
undertakenInstead, they have to do with
The precise designof the deliverable
Howthe design will be achievedBy whomand at whatcost
The implication is clear: The work of theproject will be done
Conflict During Project
Formation
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One requirement for conflict reduction/resolution by theproject manager is that they must allow conflict to be settledwithout irreparable harm to the projects objectives
To do this, the project manager must:
Allow (and foster) honesty between the negotiators
Employ only ethical tactics during the negotiation
Understand that any behavior that breeds mistrust will make futurenegotiations difficult, perhaps impossible
Emphasize that the conflicting parties-at-interest are not enemies butrather allies - members of an alliance with strong common interests
Conflict During Project
Formation
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A technique called principled negotiationtends to maintain these requirements of
negotiation and is defined by four points:1. Separate the people from the problem
2. Focus on interests, not positions
3. Before trying to reach an agreement, inventoptions for mutual gain
4. Insist on using objective criteria
Conflict During Project
Formation
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Summary
Negotiation within the firm should be directed atobtaining the best outcome for the organization, notwinning
There are three traditional categories of conflict:goal-oriented, authority-based, and interpersonal
There are three traditional sources of conflict:
The project team itselfThe client
Functional and senior management
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Summary
Critical issues to handle in the project formation stages aredelimiting technical objectives, getting managementcommitment, setting the projects relative priority, andselecting the project organizational structure
The total level of conflict is highest during the project buildupstage
Scheduling and technical conflicts are most frequent andserious in the project buildup and main program stages, andscheduling conflicts, in particular, during the phaseout stage
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Summary
Project negotiation requirements
Conflicts must be settled without permanent damage
The methodology must foster honesty
The solution must satisfy both individuals and the
organizations needs
One promising approach to meeting the
requirements of project negotiation is calledprincipled negotiation
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Conflict and Negotiation
Questions?
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Conflict and Negotiation
Picture Files
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Conflict and Negotiation
Figure 6-1
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Conflict and Negotiation
Table Files
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Conflict and Negotiation
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Conflict and Negotiation