Ch 2: Project Selection

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
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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

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Ch. 6.2 Scope Changes Are Caused By

• Technological uncertainty
• When the project team learns more about the
  nature of the deliverable
• A mandate

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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

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Ch. 6.3 Conflict Sources

• Schedules
• Priorities
• Staff and labor requirement
• Technical factors
• Administrative procedures
• Cost estimate
• Personality conflicts

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Ch. 6.3 The Three Fundamental Conflict Categories

• Different groups with different goals
• Who makes decisions
• Interpersonal conflicts

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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

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Ch. 6.3 Four Phases of Project Life Cycle As
Seen By
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Ch. 6.3 Personality Clashes
Senior Management ?? PM ?? Client
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Ch. 6.3 Project Manager Vs. Functional Manager
Conflicts

• PM concern project
• FM concern day-to-day operations

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Ch. 6.3 Who Decides in a Matrix Organization?

• PM schedule and flow of work
• FM technical decisions, manpower

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Ch. 6.3 When Top Management Fixes Time and Cost
Too Tightly

• 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

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Ch. 6.3 Whose Priorities are Ruling?

• Functional manager
• Client
• Project team

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Ch. 6.3 Methods for Settling Project Priority
Conflicts

• Priority ranking through PS model
• Priority ranking through senior management

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Ch. 6.3 TheWho and What of Matrix
Organization Conflicts
() Good example of senior management wanting to
have their cake AND eat it!
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Ch. 6.3 Conflicts in the Different Phases of the
PLC
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Ch. 6.3 Fundamental Issues for Conflict during
Project Formation

• Technical objectives
• Commitment of resources
• Priority
• Organizational structure

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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?

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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?

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Ch. 6.3 Who Will Win the Argument?
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Ch. 6.3 The Height of Conflict during Project
Buildup
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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 the FM
• PM vs. FM

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Ch. 6.3Environment for Conflict during Phaseout

• 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

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Ch. 6.3 Personality Conflicts During Project
Phaseout

• Pressure to complete project
• Anxiety to leave project
• Distribution of project resources at project
  termination
• Fresh starting projects Vs. Phasing out projects

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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
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Ch. 6.3 Successful Handling of Conflicts by PM
Ability to reduce and resolve conflict in ways to
support achievement of projects goals
Primary tool Negotiation
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Ch. 6.3 Preview and Reading for Ch. 6.4
Similarities between the confrontation-problem
solving technique and win-win negotiation

• 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

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Ch. 6.4 Negotiations NOT covered in Section 6.4

• President and Congress
• NFL players agent and team
• Real-estate buyer and seller
• Divorce
• Collective bargaining agreement
• Tourist and peddler

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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
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Ch. 6.4 Main Requirement for Conflict
Reduction/Resolution
Conflict is to be settled without irreparable
harm to the projects objectives
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Ch. 6.4 Second Requirement for Conflict
Reduction/Resolution
Honesty between negotiators
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Ch. 6.4 The Win/Win Solution
Seek solutions to the conflict that not only
satisfy an individuals own needs, but also
satisfy the needs of other parties-at-interest
and the parent organization
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Ch. 6.4 Principled Negotiation

• Separate people from problem
• Focus on interests, not positions
• Before trying to reach agreement, invent options
  for mutual gain
• Insist on using objective criteria

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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
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Ch. 6.4 How to Focus on Interest, not Position
WRONG Focus on position PM I need this
subassembly by November 15FM I cant deliver
it before February 1 next year
RIGHT Focus on interest FM and PM Lets talk
about the schedule for this subassembly.
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Ch. 6.4 Two Examples of Negotiating Positions
1. Real estate bidder, assuming a future property
valueI will not pay more than 1 million for
that property.
2. Assume that a workgroups current workload
will not change, PM statesWe cannot deliver
this subassembly before February 1.
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Ch. 6.4 Shifting Focus from Position to Interest
Real estate bidders true interest Earn a certain
return on investment in the property
Workgroup PMs true interest Not to commit to
delivery of work if delivery on the due date
cannot be guaranteed
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Ch. 6.4 An Interest Negotiators Knowledge and
Purpose
KnowledgeThe parties-at-interests interests
Purpose Suggesting solutions that satisfy the
conflicting partys interests without agreeing
with either sides position
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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

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Ch. 6.4 Four Steps to Move from
Parties-at-Conflict to Win/Win

• Parties-at-conflict (pac) enter negotiations
  knowing what they want
• The negotiator spells out the substantive
  problem
• As the negotiator presents a variety of possible
  solutions that advance their mutual interests,
  the pacs converge in their positions
• 4. A win/win situation emerges

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Ch. 6.4 Key to Finding a Negotiators Interests
and Concerns
Ask WHY? when he or she states a position
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Ch. 6.4 Insist on Using Objective Criteria
Instead of bargaining on positions, try to find a
standard Example Our friend, the FM, wants to
use an expensive process to test a part The cost
conscious PM then asks if there is not a less
expensive test to achieve the same result
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Ch. 6.4 Short Bibliography on Negotiating for
the PM

• Wall, J.A., jr. Negotiation Theory and
  Practice Glenview, Il. Scott, Foresman, 1985
  Excellent academic treatment of the subject
• Fisher, R., and Ury, W. Getting to Yes
  Harmondsworth, Middlesex, G.B. Penguin Books,
  1983 clear presentation of principled
  negotiations
• Cohen, H. You Can Negotiate Anything Secaucus,
  N.J. Lyle Stuart Inc., 1980 outstanding guide
  to win-win negotiation

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Ch. 6.4 Tactical Issues Covered by Most Books on
Negotiations

• What to do if you want win-win but the other
  party wants win-lose
• What to do if the other party is seating you so
  that bright lights shine into your eyes
• What to do if the other party drags their feet so
  as to put you into a situation of extreme time
  pressure to accept whatever solution they
  offer(continued on next slide)

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Ch. 6.4 Tactical Issues ..(continued)

• How to settle purely technical disputes
• How to handle threats
• The FM tries to go over your head and attempts to
  enlist the aid of your boss to get you to accept
  an unsatisfactory solution
• How to deal with a person that dislikes you