MGT 550: Introduction to Project Management

March 31, 2002

1

For academic use only.

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, PMP, CQM, CPDT

MGT 550: Introduction to Project Management

March 31, 2002

2

For academic use only.

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
associated with the delivery of MGT 550 to students properly enrolled at the
Stevens 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 doctrine 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 made available to faculty.

MGT 550: Introduction to Project Management

March 31, 2002

3

For academic use only.

Module 6: Conflict & Negotiation

Purpose: prepare students to identify

potential strategies for dealing with conflict

and to recognize that negotiation can be

used to resolve many problems associated

with conflict among stakeholders.

MGT 550: Introduction to Project Management

March 31, 2002

4

For academic use only.

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 method can be an appropriate

response to conflict

– Introduce the concept of situational leadership
– Explain that the nature of conflict will usually change

over the project lifecycle

MGT 550: Introduction to Project Management

March 31, 2002

5

For academic use only.

Conflict

• Conflict

– “process which begins when one party perceives that

the other has frustrated, or is about to frustrate, some
concern of his”

– Can play creative role in planning process

• Debate over proper technical approach to

problem often generates collaborative solution
that is superior to solution originally proposed

• Conflict often educates individuals and groups

about goals/objectives of other individuals and
groups

M&M Text, Chpt. 6

MGT 550: Introduction to Project Management

March 31, 2002

6

For academic use only.

Constructive Results of Conflicts

• Stimulation of a search for new facts or

resolutions

• Improved communication
• Diffusion of more serious conflict
• Increase in group cohesion and

performance

• Development of problem solving

techniques

Desmond, 2001

MGT 550: Introduction to Project Management

March 31, 2002

7

For academic use only.

Conflict Coping Styles

• Withdraw/Avoid

• Accommodate/Smooth-over

• Dominate/Confront

• Compromise

• Problem-Solve

Each style has

appropriate

and inappropriate uses.

MGT 550: Introduction to Project Management

March 31, 2002

8

For academic use only.

Withdrawing (Avoiding)

Appropriate:
• Trivial issue
• Costs > benefits
• Need to cool-off

first

Not Appropriate:
• Important issue
• You are

responsible

• Not willing to defer
• Prompt action is

needed

MGT 550: Introduction to Project Management

March 31, 2002

9

For academic use only.

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

Inappropriate:
• I am right
• Issue important for

me

• As temporary

solution to be
renegotiated later

MGT 550: Introduction to Project Management

March 31, 2002

10

For academic use only.

Dominate/Confront

Appropriate:
• Speed is needed
• Overcome assertive

subordinates that
lack expertise on
issue

• Issue is important to

me

Inappropriate:
• Issue is complex
• Issue not

important to me

• Both parties have

equal power

MGT 550: Introduction to Project Management

March 31, 2002

11

For academic use only.

Compromise

Appropriate:
• Both parties have

equal power and
goals are mutually
exclusive

• Consensus not

attained and better
methods have not
worked

Inappropriate:
• One party is more

powerful

• Problem is too

complex

• Win-win can be

attained

MGT 550: Introduction to Project Management

March 31, 2002

12

For academic use only.

Problem-Solve

Appropriate:
• Complex issue
• Need synthesis to

get solution

• Time is available
• Teamwork needed

Inappropriate:
• Simple problem
• Immediate

decision needed

• Other parties are

not concerned
about problem

MGT 550: Introduction to Project Management

March 31, 2002

13

For academic use only.

Conflict Management Techniques

COMPROMISE

SMOOTHING

(ACCOMMODATING)

PROBLEM

SOLVING

(COLLABORATING)

WITHDRAWAL

(AVOIDING)

FORCING

(COMPETING)

HIGH

LOW

LOW

HIGH

OBJECTIVE

ORIENTATION

R

E

L

A

T

IO

N

S

H

IP

S

O

R

IE

N

T

A

T

IO

N

Desmond, 2001

MGT 550: Introduction to Project Management

March 31, 2002

14

For academic use only.

Module 6 Objectives

• Tuckman’s Model of Group Dynamics

– Describe the stages of group development
– Apply Tuckman’s Model to team development over the

project lifecycle

MGT 550: Introduction to Project Management

March 31, 2002

15

For academic use only.

Tuckman’s Model of

Group Dynamics

• Forming
• Storming
• Norming
• Performing
• Disbanding

MGT 550: Introduction to Project Management

March 31, 2002

16

For academic use only.

Module 6 Objectives

• Basic Negotiation

– Describe the basic principles of negotiation
– Emphasize the role and importance of a BATNA
– Emphasize the importance of learning from differences
– Give examples of how to negotiate for resources with

functional managers

– Explain the natural antagonism that exists between a

buyer and a seller.

– Explain the role of contracts in documenting a

negotiated “meeting of the minds”

MGT 550: Introduction to Project Management

March 31, 2002

17

For academic use only.

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

M&M Text, Chpt. 6

MGT 550: Introduction to Project Management

March 31, 2002

18

For academic use only.

Principled Negotiation

• Separate people from the problem

- Emotions and fact can be confused
- Define problem

• Focus on interests, not positions

- Bargaining, haggling (may have cultural linkages)
- Never focuses on real Issues
- Determine other party’s interests

• Invent options for mutual gain

- Enter knowing outcome they would like
- Blind to other outcomes
- Find options that produce mutual gain

• Insist on using objective criteria

- Find standards, use to determine quality outcome
- Make less a contest of wills

M&M Text, p 244-245

MGT 550: Introduction to Project Management

March 31, 2002

19

For academic use only.

BATNA

• B

est

• A

lternative

• T

o a

• N

egotiated

• A

greement

Fisher & Ury,

Getting to Yes

MGT 550: Introduction to Project Management

March 31, 2002

20

For academic use only.

Dr. Stephen Covey’s 7 Habits of

Highly Effective People

1. Be proactive
2. Begin with the end in mind
3. Put first things first
4. Think win/win
5. Seek first to understand, then to be

understood

6. Synergize
7. Sharpen the saw

MGT 550: Introduction to Project Management

March 31, 2002

21

For academic use only.

Conflict and Project Lifecycle

• Certain patterns of conflict are associated

with different periods in life of project

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 are interpersonal conflicts between

people who are parties-at-interest in project

M&M Text, Chpt. 6

MGT 550: Introduction to Project Management

March 31, 2002

22

For academic use only.

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

M&M Text, Chpt. 6

MGT 550: Introduction to Project Management

March 31, 2002

23

For academic use only.

Conflict in Projects

• To make transition from project formation to

buildup, 4 issues should be addressed:

– Technical objectives of project should be specified to

degree that will allow detailed planning of build up stage

to be accomplished

– Commitment of resources to project should be

forthcoming from senior management and functional

managers

– Priority of project relative to priorities of parent

organization’s other projects should be set and

communicated

– Organizational structure of project should be

established to extent sufficient for WBS and linear

responsibility chart preparation

M&M Text, Chpt. 6

MGT 550: Introduction to Project Management

March 31, 2002

24

For academic use only.

Conflict in Projects

• Formation is period during which project

moves from general concept to highly

detailed set of plans

– As plans become detailed, conflicts over

technical issues build

– Conflicts between project manager and

functional areas tend to predominate

• Usually, functional areas can claim more

technical expertise than project manager

who is usually a “generalist”

M&M Text, Chpt. 6

MGT 550: Introduction to Project Management

March 31, 2002

25

For academic use only.

Conflict in Projects

• Schedules are

– Still a major source of conflict in main program
– Proximate cause of schedule-related 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

M&M Text, Chpt. 6

MGT 550: Introduction to Project Management

March 31, 2002

26

For academic use only.

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
technical conflicts in main program phase

M&M Text, Chpt. 6

MGT 550: Introduction to Project Management

March 31, 2002

27

For academic use only.

Conflict in Projects

• Schedule is major source of conflict

during project phaseout

– Technical problems are comparatively rare

because most have been solved or bypassed

– 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

M&M Text, Chpt. 6

MGT 550: Introduction to Project Management

March 31, 2002

28

For academic use only.

Conflict in Projects

• Few conflicts arising in projects have to

do with whether or not task will be
undertaken

– Instead, they have to do with

• Precise design of deliverable
• How design will be achieved
• By whom and at what cost

• Implication is clear: Work of project will be

done

M&M Text, Chpt. 6

MGT 550: Introduction to Project Management

March 31, 2002

29

For academic use only.

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
project’s objectives

• To do this, project manager should:

– Allow (and foster) honesty between negotiators
– Employ only ethical tactics during negotiation
– Understand that any behavior that breeds mistrust will

make future negotiations difficult, perhaps impossible

– Emphasize that conflicting parties are members of

alliance with strong common interests

M&M Text, Chpt. 6

MGT 550: Introduction to Project Management

March 31, 2002

30

For academic use only.

Legal Obligations

• Contracts create enforceable obligations

related to the natural antagonism that
exists between the buyer and the seller

– Allocation of resources
– Assignment of risk

• The contract formalizes the relationship

between the buyer and the seller

MGT 550: Introduction to Project Management

March 31, 2002

31

For academic use only.

Procurement Processes

Procurement

Planning

Solicitation

Planning

Solicitation

Source

Selection

Contract

Closeout

Bidders

List

Negotiation

and

Selection

Contract

Execution

Contract

Closeout

Time

Requisition

RFI

IFB

RFP

RFQ

Quotations

Brochures

Bids

Proposals

Receive

Issue

Contract

Administration

Bid

Analysis

or

Keeney, 2001

MGT 550: Introduction to Project Management

March 31, 2002

32

For academic use only.

Typical Contract Clauses

• Government flow-

down clauses
include:

– Termination for

convenience

– Privity

• Payment
• Free will
• Whole agreement
• Notification
• Termination
• Damages
• Assignment
• Jurisdiction
• Disputes

MGT 550: Introduction to Project Management

March 31, 2002

33

For academic use only.

Reading Assignments

• From Chapter 6

– Text

• Pp 226 – 248
• Pp 252 – 257

• For Chapter 7

– Text

• Pp 261 – 292
• Pp 295 – 301