ISE 440 Ch. 4 Project Management Conflict Negotiation PDF

Chapter 4: Managing Conflict and the Art of Negotiation Project Management: A Managerial Approach, Wiley, 9th Ed. By Meredith, J.R., Mantel, S.J., and Shafer, S.M. Slides are modified by Dr. Yasser Almoghathawi ISE 440 - Term 231 Dr. Yasser Almoghathawi, KFUPM 1 Outline ▪ Conflicts and Negotiat...

Chapter 4: Managing Conflict and the Art of Negotiation Project Management: A Managerial Approach, Wiley, 9th Ed. By Meredith, J.R., Mantel, S.J., and Shafer, S.M. Slides are modified by Dr. Yasser Almoghathawi ISE 440 - Term 231 Dr. Yasser Almoghathawi, KFUPM 1 Outline ▪ Conflicts and Negotiations ▪ Categories of Conflict ▪ Conflicts and the Project Life Cycle ▪ Conflict Resolution Strategies ▪ Partnering, Chartering, and Scope Change ▪ Requirements and Principles of Negotiation ISE 440 - Term 231 Dr. Yasser Almoghathawi, KFUPM 2 Conflict and Negotiation ▪ Conflict is a serious disagreement or argument, typically a protracted one • a process which begins when one person/party perceives that the other has prevented some of his concern from progressing or being fulfilled ▪ Negotiation is a process of conferring to arrive at a settlement of some matter • a process through which two or more parties seek an acceptable rate of exchange for items they own or control ISE 440 - Term 231 Dr. Yasser Almoghathawi, KFUPM 3 Categories of Conflict ▪ Conflicts fall into three fundamentally different categories: • Groups working on the project may have different goals and expectations • There is significant uncertainty about who has the authority to make decisions • There are interpersonal conflicts between people who are partiesat-interest in the project ISE 440 - Term 231 Dr. Yasser Almoghathawi, KFUPM 4 Conflict and the Project Life Cycle ▪ Four stages of the project life cycle: • Formation • Conceptualization • Buildup • Planning • Main program • Execution • Phase-out • Termination ISE 440 - Term 231 Dr. Yasser Almoghathawi, KFUPM 5 Project Formation Stage ▪ Four fundamental issues must be handled: 1. Technical objectives must be set 2. Senior management and functional managers must commit to the project 3. The priority for the project must be set 4. Organizational structure of the project must be established ISE 440 - Term 231 Dr. Yasser Almoghathawi, KFUPM 6 Project Formation Stage ▪ Conflict centers around the confusion of starting a new project • Many of the policies and procedures have not yet been formed • The objectives of the project are not yet finalized ▪ In fact, much of this conflict is good conflict ISE 440 - Term 231 Dr. Yasser Almoghathawi, KFUPM 7 Project Buildup Stage ▪ Conflicts tend to be technical in nature ▪ Conflicts between the PM and the functional areas could predominate ISE 440 - Term 231 Dr. Yasser Almoghathawi, KFUPM 8 Main program Stage ▪ Schedules and priorities are a major source of conflict • Some tasks might be late, and the schedule should be adjusted, or the time made up • The more complex the project, ▪ the more difficult to trace and estimate the impact of all the delays, and ▪ the more resources that must be consumed to get things back on track ▪ Conflicts between stakeholders and the PM ▪There are also technical conflicts ISE 440 - Term 231 Dr. Yasser Almoghathawi, KFUPM 9 Project Phase-out Stage ▪ Deadlines are a major source of conflict ▪ Personality conflicts will be a big deal due to time pressures ▪ Technical problems are rare ▪ The distribution of the project’s capital equipment and supplies when the project is completed ▪ Conflict also arises between projects phasing out and those just starting • particularly if the latter need resources or personnel with scarce talents being used by the former ISE 440 - Term 231 Dr. Yasser Almoghathawi, KFUPM 10 Categories of Conflict during Project Life Cycle ISE 440 - Term 231 Dr. Yasser Almoghathawi, KFUPM 11 Conflict Resolution Strategies ▪ People deal with conflict along two dimensions: • Assertive → Unassertive • Cooperative → Uncooperative ▪ Five strategies to deal with conflict: • Competing • Avoiding • Collaborating • Accommodating • Compromising ISE 440 - Term 231 Dr. Yasser Almoghathawi, KFUPM 12 Conflict Resolution Strategies ISE 440 - Term 231 Dr. Yasser Almoghathawi, KFUPM 13 Partnering, Chartering, & Scope Change ▪ Three situations commonly arising during projects that require a high level of negotiation skills by the PM: • Use of sub-contractors • Use of input from two or more functional units to design and develop the project’s mission • Management of change ISE 440 - Term 231 Dr. Yasser Almoghathawi, KFUPM 14 Partnering ▪ Project firm and contractors are at odds on a project • Project firm wants high quality and low cost • Subcontractors want high profits and maximum flexibility ▪ Partnering has been developed to replace this atmosphere with one of cooperation and mutual helpfulness ▪ Project Partnering is a method of transforming contractual relationships into a cohesive, cooperative project team with a single set of goals and established procedures for resolving disputes in a timely and effective manner ISE 440 - Term 231 Dr. Yasser Almoghathawi, KFUPM 15 Partnering ▪ Three steps for project partnering: 1. Project firm must commit to partnering 2. All parties must implement the process 3. Joint review when finished ISE 440 - Term 231 Dr. Yasser Almoghathawi, KFUPM 16 Partnering ▪ Three steps for project partnering: 1. Project firm must commit to partnering ▪ Select committed subcontractors ▪ Engage in joint team-building exercises ▪ Develop a project charter 2. All parties must implement the process 3. Joint review when finished ISE 440 - Term 231 Dr. Yasser Almoghathawi, KFUPM 17 Partnering ▪ Three steps for project partnering: 1. Project firm must commit to partnering 2. All parties must implement the process: Four-Part Agreement 1. Joint evaluation of the project’s progress 2. A method for resolving disagreements 3. Continuous improvement 4. Support from the senior management 3. Joint review when finished ISE 440 - Term 231 Dr. Yasser Almoghathawi, KFUPM 18 Partnering ▪ Three steps for project partnering: 1. Project firm must commit to partnering 2. All parties must implement the process 3. Joint review when finished ▪ Setting this up requires a lot of negotiation ▪ Negotiations must be non-adversarial in nature ▪ It has worked well in some settings ISE 440 - Term 231 Dr. Yasser Almoghathawi, KFUPM 19 Partnering ▪ Problems with Partnering: • Requires strong support from senior management. • Requires continuous support of project objectives and partnering agreements • Requires open and honest communication ISE 440 - Term 231 Dr. Yasser Almoghathawi, KFUPM 20 Chartering ▪ Project Charter - A written agreement that: • Outlines the specifics of the project • Contains expected deliverables and resource commitments • Contains procedures for conflict resolution ▪ Agreeing to a charter implies that none of the parties will change the agreement unilaterally ISE 440 - Term 231 Dr. Yasser Almoghathawi, KFUPM 21 Scope Change ▪ Three major causes for change in projects: 1. The initial assessment in planning was wrong 2. Project team or client/user learn more about the nature of the project deliverable or the setting in which to be used 3. Change is mandated ▪ Negotiation will be required for new agreement between stakeholders ISE 440 - Term 231 Dr. Yasser Almoghathawi, KFUPM 22 Requirements & Principles of Negotiation ▪ Few conflicts have to do with whether or not a task will be undertaken ▪ Instead, they have to do with the design of the deliverable • How the design will be achieved • By Whom • When • What cost ▪ The work of the project should get done • If not, everyone loses ISE 440 - Term 231 Dr. Yasser Almoghathawi, KFUPM 23 Requirements & Principles of Negotiation ▪ Most of the conflicts that involve the organization and outsiders have to do with property rights and contractual obligations ▪ In such cases, parties to a negotiation often see themselves as opponents • “If they win, I lose” • PM must avoid this on projects as all stakeholders are interrelated ▪ For in-house project, focus should be organization’s goals rather than individual success ISE 440 - Term 231 Dr. Yasser Almoghathawi, KFUPM 24 Requirements & Principles of Negotiation ▪ Conflict should be settled without irreparable harm to the project’s objectives ▪ Allow and foster honesty between the negotiators ▪ Win-win situation for all parties involved • Negotiating to a win-win solution is the key to conflict resolution in project management ISE 440 - Term 231 Dr. Yasser Almoghathawi, KFUPM 25 Requirements & Principles of Negotiation ▪ Principled Negotiation ‘win-win’ • The method is straightforward; it is defined by four points: 1. Separate the people from the problem 2. Focus on interests, not positions 3. Before trying to reach agreement, invent options for mutual gain 4. Insist on using objective criteria ISE 440 - Term 231 Dr. Yasser Almoghathawi, KFUPM 26