APM North West 2015 conference Negotiation and Conflict Management in Project Management by Dr Ian Stewart 12th October 2015

1. Negotiation and Conflict
Management in Project
Management
Dr I C Stewart

2. • Identify conflict and negotiation in project work
• Identify some causes of and differentiate between
conflict and dispute in projects
• Describe the differences between Positional and
Principled negotiation
• Evaluate personal conflict handling/negotiation
style
Objectives For
This Session

3. We all want a fair
share, but don’t we
also want the biggest
fair share?

4. “Of conduct, actions, arguments, methods:
…Equitable; not taking undue advantage; disposed to
concede every reasonable claim…”
“Of conditions, position, etc.: Affording an equal
chance of success; not unduly favourable or adverse
to either side.”
OED
What is ‘fair’?
• Is any profit-oriented exchange situation ever really
capable of producing this? Legitimated inequality…
• We naturally pursue or seek to restore equity
• If we can get more than equity, we will.
• This will lead to conflict

5. All conflicts in project work emanate from the fact that the
work requires us to deal with other people…
• Exactly what do we exchange, why and how?
• Uncertainty
• Frequency
• Level and kind of investment
• Opportunism
• Profit maximisation
• Trust
What happens when things go wrong?
To what degree can this be planned for?
Drivers for
Conflicts

6. With the Customer/Clients and
Subs/Suppliers:
Price/Price Changes
Scope and Goals
Limitation of Liability
Liquidated Damages/Penalties
Payments
Intellectual Property
Responsibilities of stakeholders
Stakeholder requirements
Changes/change management
Warranties
Termination
Also with:
Project staff
The PMO
Other PMs within/outside
your organisation
Your bosses
Ourselves
Where in Project Work is
there Conflict or
Negotiation?

7. Why Negotiate?
• We can’t always get things ‘our way’…
• Other people have their own priorities which may or may not
reflect our own and access to information which we may not
have.
• In the process, new and useful information might be
revealed.
• Therefore, we negotiate because it gives an opportunity to
improve our present situation and create alignment between
the different minds involved in our work.
• Transaction negotiation – reaching agreements for the future
• Dispute negotiation - resolving things that have occurred in
the past

8. Good Conflict?
“A normal process whereby socially valuable
differences register themselves for the enrichment of
all concerned…
“Consider it without ethical prejudgment; to think of it
not as warfare, but as the appearance of difference,
difference of opinions, of interests. For that is what
conflict means—difference. … As conflict is here in
the world, as we cannot avoid it, we should, I think,
use it. Instead of condemning it, we should set it to
work for us.”
Mary Parker-Follet

9. “Conflict is necessary and inevitable
but… disputes are to be avoided.”
Fenn, P. (2012) Commercial Conflict Management and Dispute Resolution
When does a conflict become a dispute?
Dispute may emerge from conflict, but not
conflict from dispute.
Dispute ends projects and damages reputations
and relationships
Dispute

10. Fisher & Ury
• Separate the people from the
problem
• Focus on interests, not
positions
• Invent options for mutual gain
• Insist on using objective
criteria
• Know your BATNA

11. Positional
Negotiation
A manipulative approach to cause the other party to lose
faith in their case and accept terms – negotiated to remain
close to opening position or an outcome that is better than
fair - gain through an opponent’s loss
• High opening demands
• Threats, tension, pressure
• Stretching the facts
• Desire to out manoeuvre the other side
• Desire for clear victory
• Emphasis on rights
• Predictable negotiating positions
The losing side may work to restore a sense of equity, to
get back what was lost at negotiation.

12. Principled
Negotiation
Also known as ‘Integrative Negotiation’. This is done
through separating people from the problem, focusing on
interests not positions, inventing options for mutual gain,
selecting options using objective criteria.
• Makes things less ‘personal’
• Maintains relationships
• Achieves satisfactory agreements
• Can redress power imbalances
Search for objective criteria can take time, but prevents
dirty tricks or passive aggressive resistance. Converting
positions to positive interests can be complex, but results in
getting all concerns clear.

13. BATNA and WATNA
Best Alternative to Negotiated Agreement
Worst Alternative to Negotiated Agreement
Identify course of action that would have the highest
expected value for you if negotiation fails. This is your
BATNA.
Calculate the lowest-valued deal you are willing to
accept. If the value of the deal proposed to you is lower
pursue your BATNA. If the final offer is higher than your
BATNA you should accept it.
Determining the opponents BATNA is also useful.

14. Here comes trouble…
Established customer at contract renegotiation
time:
“Friendly Corp. has just offered me a lower price.
Either drop your price or we will take our business
elsewhere!”
Seems like an either/or.
Or is it?
What insights do the positional and principled
perspectives give us?

15. 1. I argue my case with my colleagues to show the merits of my position
2. I negotiate with my colleagues so that a compromise can be reached
3. I try to satisfy the expectations of my colleagues
4. I try to investigate an issue with my colleagues to find a solution
acceptable to us
5. I am firm in pursing my side of the issue
6. I attempt to avoid being put on the spot and try to keep my conflicts to
myself
7. I hold on to my solution to a problem
8. I use give and take so that a compromise can be made
9. I exchange accurate information with a colleague to solve a problem
together
10. I avoid open discussion of my differences with colleagues
11. I accommodate the wishes of my colleagues
12. I try to bring all of our concerns out in the open so that the issues can
be resolved in the best possible way
13. I propose a middle ground for breaking deadlocks
14. I go along with the suggestions of my colleagues
15. I try to keep my disagreements with my colleagues to myself in order to
avoid hard feelings 1 = rarely
5 = always
Conflict Handling Style

16. 4, 9, 12 = Integrating
3, 11, 14 = Obliging
1,5,7 = Dominating
6, 10, 15 = Avoiding
2, 8, 13 = Compromising
Rahim, M. (1985) A Strategy for Managing Conflict in Complex Organisations.
Human Relations, 38 (1) 81-89
Conflict Handling Style

17. Integrating - using negotiations to understand the concerns and interests
of the other parties, solving problems in creative ways. However, they can
over-complicate matters.
Obliging – play down their own interests and differences to satisfy the
other party. They can, however, feel taken advantage of in situations when
the other party places little emphasis on the relationship.
Dominating – Dominators have strong instincts for all aspects of
negotiating. This style dominates the bargaining process but often neglects
the importance of relationships. Best in a crisis or when difficult decisions
have to be enforced, poor when there is time.
Avoiding – does not like to negotiate. When negotiating, tends to defer
confrontation however, they may be perceived as tactful and diplomatic and
useful where dysfunctional affect of confronting is more costly than
resolving.
Compromising – seeks what is fair and equal for all parties involved in the
negotiation. useful when both parties are equally powerful with mutually
conflicting goals.
.
Conflict Handling Style

18. “One advantage of integration over compromise... If
we get only compromise, the conflict will come up
again and again in some other form, for in
compromise we give up part of our desire, and
because we shall not be content to rest there,
sometime we shall try to get the whole of our
desire.”
Follett Again…

19. Negotiation
Preparation
• What are the causes of the dispute?
• What are the parties needs, goals and motivating
concerns?
• What are the facts associated with the dispute?
• Determine objective criteria for assessing
solutions/BATNA
• What are the desired outcomes, possible outcomes
or resisted outcomes?
• Who should be present/absent?
• Who should make the first offer and in what form?
• Always leave a "comfort zone" for the other party

20. But…
• People tend to believe that they are
cooperative and trusting yet, when asked
about the counterpart, people tend to believe
that the other party is just looking to win.
• People are irrational. We tend over value
how much we like or dislike the person we’re
negotiating with, rather than objectively
looking at the deal.
• Most people simply don’t enjoy the
negotiation process!
Keld Jensen
Why Negotiators Still Aren’t Getting to ‘Yes’
Forbes Magazine

21. Is all emotion a
problem?
“Successful negotiators must experience the
emotion of love at one point in their life, to
know what it means to have been hurt in love
at one point in their life, to know success and,
perhaps most important, to know what it
means to know failure… The very good
negotiators, I think, are the ones with the life
stories.”
Lieutenant Jack Cambria
(longest-running head of the NYPD’s hostage negotiation team)
WSJ

22. Peter Fenn Fisher & Ury
Harvard PoN