MGT 550: Introduction to Project Management MGT 550 Introduction to Project Management Chapter 6: Conflict and Negotiation Wesley

J. Howe School of Technology Management Course Development Team Members: Michael Poli Celia Desmond, PMP David Keeney, P MP, CQM, CPDT March 31, 2002 For academic use only. 1

MGT 550: Introduction to Project Management Copyright Information The slides in this file are provided to faculty instructing MGT 500 on behalf of the Stevens Institute of Technology. Use is restricted to academic endeavors as sociated with the delivery of MGT 550 to students properly enrolled at the Steve ns Institute of Technology. All other rights are reserved by the original owners of materials contained in this program. The slides contain copyrighted material that has been reproduced and/or adapted to the course syllabus under the doctri ne of fair use for academic purposes. All slides in this course are copyrighted by the original source. Requests to reproduce materials for other purposes should be directed to the copyright owner identified in the bibliography that will be m ade available to faculty. March 31, 2002 For academic use only. 2

MGT 550: Introduction to Project Management Module 6: Conflict & Negotiation Purpose: prepare students to identify potential strategies for dealing with conf lict and to recognize that negotiation can be used to resolve many problems asso ciated with conflict among stakeholders. March 31, 2002 For academic use only. 3

MGT 550: Introduction to Project Management Module 6 Objectives Conflict Strategies Describe five possible methods for dealing with conflict Present the advantages and disadvantages of each method for dealing with conflict Explain that each met hod can be an appropriate response to conflict Introduce the concept of situatio nal leadership Explain that the nature of conflict will usually change over the project lifecycle March 31, 2002 For academic use only. 4

MGT 550: Introduction to Project Management Conflict Conflict process which begins when one party perceives that the other has frustrated, or i s about to frustrate, some concern of his Can play creative role in planning proc ess Debate over proper technical approach to problem often generates collaborative s olution that is superior to solution originally proposed Conflict often educates individuals and groups about goals/objectives of other individuals and groups March 31, 2002 For academic use only. M&M Text, Chpt. 6 5

MGT 550: Introduction to Project Management Constructive Results of Conflicts Stimulation of a search for new facts or resolutions Improved communication Diff usion of more serious conflict Increase in group cohesion and performance Develo pment of problem solving techniques March 31, 2002 For academic use only. Desmond, 2001 6

MGT 550: Introduction to Project Management Conflict Coping Styles Withdraw/Avoid Accommodate/Smooth-over Dominate/Confront Compromise Problem-Solve Each style has appropriate and inappropriate uses. March 31, 2002 For academic use only. 7

MGT 550: Introduction to Project Management Withdrawing (Avoiding) Appropriate: Trivial issue Costs > benefits Need to cool-off first Not Appropria te: Important issue You are responsible Not willing to defer Prompt action is ne eded March 31, 2002 For academic use only. 8

MGT 550: Introduction to Project Management Accommodating (Smoothing) Appropriate: I might be wrong Issue important to other person but not to you My position is weak The relationship is important Gain future leverage March 31, 2002 Inappropriate: I am right Issue important for me As temporary solution to be ren egotiated later For academic use only. 9

MGT 550: Introduction to Project Management Dominate/Confront Appropriate: Speed is needed Overcome assertive subordinates that lack expertise on issue Issue is important to me March 31, 2002 Inappropriate: Issue is complex Issue not important to me Both parties have equa l power For academic use only. 10

MGT 550: Introduction to Project Management Compromise Appropriate: Both parties have equal power and goals are mutually exclusive Cons ensus not attained and better methods have not worked March 31, 2002 Inappropriate: One party is more powerful Problem is too complex Win-win can be attained For academic use only. 11

MGT 550: Introduction to Project Management Problem-Solve Appropriate: Complex issue Need synthesis to get solution Time is available Team work needed Inappropriate: Simple problem Immediate decision needed Other partie s are not concerned about problem March 31, 2002 For academic use only. 12

MGT 550: Introduction to Project Management Conflict Management Techniques HIGH SMOOTHING (ACCOMMODATING) PROBLEM SOLVING (COLLABORATING) RELATIONSHIPS ORIENTATION COMPROMISE WITHDRAWAL LOW FORCING (COMPETING) OBJECTIVE ORIENTATION HIGH Desmond, 2001 13 (AVOIDING) LOW March 31, 2002 For academic use only.

MGT 550: Introduction to Project Management Module 6 Objectives Tuckmans Model of Group Dynamics Describe the stages of group development Apply Tuckmans Model to team development over the project lifecycle March 31, 2002 For academic use only. 14

MGT 550: Introduction to Project Management Tuckmans Model of Group Dynamics Forming Storming Norming Performing Disbanding March 31, 2002 For academic use only. 15

MGT 550: Introduction to Project Management Module 6 Objectives Basic Negotiation Describe the basic principles of negotiation Emphasize the role and importance o f a BATNA Emphasize the importance of learning from differences Give examples of how to negotiate for resources with functional managers Explain the natural ant agonism that exists between a buyer and a seller. Explain the role of contracts in documenting a negotiated meeting of the minds March 31, 2002 For academic use only. 16

MGT 550: Introduction to Project Management Nature of Negotiation Negotiation the process through which two or more parties seek an acceptable rate of exchange for items they own or control Favored technique for resolving conflict Firms should view conflicts within organization as conflicts between allies, not opponents March 31, 2002 For academic use only. M&M Text, Chpt. 6 17

MGT 550: Introduction to Project Management Principled Negotiation Separate people from the problem - Emotions and fact can be confused - Define pr oblem Focus on interests, not positions - Bargaining, haggling (may have cultura l linkages) - Never focuses on real Issues - Determine other partys interests Inv ent options for mutual gain - Enter knowing outcome they would like - Blind to o ther outcomes - Find options that produce mutual gain Insist on using objective criteria - Find standards, use to determine quality outcome - Make less a contes t of wills March 31, 2002 For academic use only. M&M Text, p 244-245 18

MGT 550: Introduction to Project Management BATNA Best Alternative To a Negotiated Agreement March 31, 2002 For academic use only. Fisher & Ury, Getting to Yes 19

MGT 550: Introduction to Project Management Dr. Stephen Coveys 7 Habits of Highly Effective People 1. 2. 3. 4. 5. Be proactive Begin with the end in mind Put first things first Th ink win/win Seek first to understand, then to be understood 6. Synergize 7. Shar pen the saw March 31, 2002 For academic use only. 20

MGT 550: Introduction to Project Management Conflict and Project Lifecycle Certain patterns of conflict are associated with different periods in life of pr oject 1. Groups working on project may have different goals and expectations 2. There is considerable uncertainty about who has authority to make decisions 3. There a re interpersonal conflicts between people who are parties-at-interest in project March 31, 2002 For academic use only. M&M Text, Chpt. 6 21

MGT 550: Introduction to Project Management Conflict in Projects Initially, most conflict centers around inherent confusion of setting up project in environment of matrix management Almost nothing about project or its governance has been decided Moving from this chaotic environment to buildup stage can be difficult March 31, 2002 For academic use only. M&M Text, Chpt. 6 22

MGT 550: Introduction to Project Management Conflict in Projects To make transition from project formation to buildup, 4 issues should be address ed: Technical objectives of project should be specified to degree that will allow de tailed planning of build up stage to be accomplished Commitment of resources to project should be forthcoming from senior management and functional managers Pri ority of project relative to priorities of parent organizations other projects sh ould be set and communicated Organizational structure of project should be estab lished to extent sufficient for WBS and linear responsibility chart preparation March 31, 2002 For academic use only. M&M Text, Chpt. 6 23

MGT 550: Introduction to Project Management Conflict in Projects Formation is period during which project moves from general concept to highly de tailed set of plans As plans become detailed, conflicts over technical issues build Conflicts betwee n project manager and functional areas tend to predominate Usually, functional areas can claim more technical expertise than project manage r who is usually a generalist March 31, 2002 For academic use only. M&M Text, Chpt. 6 24

MGT 550: Introduction to Project Management Conflict in Projects Schedules are Still a major source of conflict in main program Proximate cause of schedule-rel ated conflict is usually different than in earlier stages Catching up Requires extra resources that functional groups will demand Project manager may not have extra resources Technical conflicts are frequent and serious during main program stage March 31, 2002 For academic use only. M&M Text, Chpt. 6 25

MGT 550: Introduction to Project Management Conflict in Projects During main phase, many parts must be linked properly These linkages are known as interfaces Number of interfaces increases rapidly as project gets larger System gets more complex Need to manage these interfaces and correct incompatibilities is key to technica l conflicts in main program phase March 31, 2002 For academic use only. M&M Text, Chpt. 6 26

MGT 550: Introduction to Project Management Conflict in Projects Schedule is major source of conflict during project phaseout Technical problems are comparatively rare because most have been solved or bypas sed Personality conflicts are second ranked source of conflict during phaseout Pressure to complete project Anxiety about leaving the project Primary tool to accomplish conflict resolution and reduction is negotiation March 31, 2002 For academic use only. M&M Text, Chpt. 6 27

MGT 550: Introduction to Project Management Conflict in Projects Few conflicts arising in projects have to do with whether or not task will be un dertaken Instead, they have to do with Precise design of deliverable How design will be achieved By whom and at what co st Implication is clear: Work of project will be done March 31, 2002 For academic use only. M&M Text, Chpt. 6 28

MGT 550: Introduction to Project Management Conflict Reduction/Resolution One requirement for conflict reduction/resolution by project manager is that PM should allow conflict to be settled without irreparable harm to projects objectiv es To do this, project manager should: Allow (and foster) honesty between negotiators Employ only ethical tactics durin g negotiation Understand that any behavior that breeds mistrust will make future negotiations difficult, perhaps impossible Emphasize that conflicting parties a re members of alliance with strong common interests March 31, 2002 For academic use only. M&M Text, Chpt. 6 29

MGT 550: Introduction to Project Management Legal Obligations Contracts create enforceable obligations related to the natural antagonism that exists between the buyer and the seller Allocation of resources Assignment of ri sk The contract formalizes the relationship between the buyer and the seller March 31, 2002 For academic use only. 30

MGT 550: Introduction to Project Management Procurement Processes Procurement Solicitation Planning Planning Bidders List Solicitation Source Cont ract Contract Selection Administration Closeout Bid Analysis Issue IFB RFI RFQ RFP or Receive Bids Brochures Quotations Proposals Negotiation and Selection Contract Execution Contract Closeout Requisition March 31, 2002 Time For academic use only. Keeney, 2001 31

MGT 550: Introduction to Project Management

Typical Contract Clauses Payment Free will Whole agreement Notification Termination Damages Assign risdiction Disputes Government flowdown clauses include: Termination for conveni ence Privity March 31, 2002 For academic use only. 32

MGT 550: Introduction to Project Management Reading Assignments From Chapter 6 Text Pp 226 248 Pp 252 257 For Chapter 7 Text Pp 261 292 Pp 295 301 March 31, 2002 For academic use only. 33