Dealing with Conflicts in Project Management

Presented by : • Ie Ignatius Eric Cahya Saputra• Jessica Gunawan

Agenda

• Introduction

• Problem Issues

• Environmental Scanning

• Alternatives Course of Actions

• Key Success Factors

• Selection of Best Alternatives

• Recommendation

INTRODUCTION

- Jessica Gunawan -

Introduction

• “Project Management is premised on performance, cost, and

time as its main goals wherein the focus is to meet customers’

expectation, deliver projects within budget and complete

projects on time” (Muigua, 2011)

• “Conflict is a situation that exist when persons pursue goals

that are incompatible and end up compromising or

contradicting the interest of another” (Odhiambo, 2003)

PROBLEM ISSUE

- Jessica Gunawan -

Problem Issue

• Conflicts & disputes are inevitable from a project :

• Additional cost, fees, penalties, and other charges

• Disputes disrupt teamwork

• Challenges in facing conflicts management in Kenya :

• Doesn’t have comprehensive and integrated legal framework

• Mediation resolution is adopted from international law

• Rigid Legal Framework (Arbitration and Litigation)

• Ineffectiveness of dispute settlement process – Litigation

• Implies on Kenyan characteristics and willingness to solve disputes in

the more effective ways

• Leads to high court fees, complexity of rules and procedures, years

dispute settlements

ENVIRONMENTAL SCANNING

- Jessica Gunawan -

Environmental Scanning

DISPUTE SETTLEMENT OPTIONS

1 Negotiations • Between involved parties

2 Mediation • Neutral third party is required to reach the

negotiated solution

3 Conciliation • Third party can propose a solution

4 Med – Arb • Combination of Mediation and Arbitration

• Failing in settling the disputes leads to

arbitration

5 Arb – Med • Starting with Arbitration and solve the

disputes through mediation

6 Dispute Review

Board

• An external party that assist in resolving

disagreement arise in the course of contract

and make recommendation regarding disputes

resolution decisions

Environmental Scanning

DISPUTE SETTLEMENT OPTIONS

7 Early Neutral

Evaluation

• Private and non binding

• Third party provide opinions as a basis for

settlement discussions

8 Expert

Determination

• Parties submit disputes to an expert for

determination

9 Mini Trial • Executive Tribunal

• Voluntary non binding in which parties present

cases to a panel supported by neutral third

party

10 Adjudication • Informal disputes resolution mechanisms

where third party neutral (adjudicator) is

needed in decisions making process

11 Arbitration • Third party neutral is selected by the parties or

authority to give a final and binding awards

Environmental Scanning

DISPUTE SETTLEMENT OPTIONS

12 Litigation • The judges or magistrate provide a final

judgment which is binding on the parties

subject to rights of appeal

13 Conflict

Avoidance

• Clear wording contract

• Monitoring for early detection of problems

• Contract expiring management

ALTERNATIVES COURSE OF ACTIONS

- Ie Ignatius Eric Cahya Saputra -

Alternatives Course of Actions

SUGGESTED COURSE OF ACTION

NEGOTIATION MEDIATION ADJUDICATION

• Most efficient

conflict management

• Techniques being

used :

• Concessions

• Compromise

• Coercion

• Confrontation

• Voluntary

• Non binding

• Requires a neutral

third party to reach

negotiated solution

• Requires third party

to become

adjudicator

• Suitable for very

tight time scales

• Reached within

28 days

• Flexible and

inexpensive

KEY SUCCESS FACTORS

- Ie Ignatius Eric Cahya Saputra -

Key Success FactorsDISPUTE SETTLEMENT OPTIONS

NEGOTIATION MEDIATION ADJUDICATION

• Requires goodwill

of the parties

• Fast, cost saving,

confidential,

preserve

relationship,

provide range of

possible solutions

• Involvement of

neutral third party

affect the

effectiveness of the

dispute settlement

process

• Alternatives of

slow progress

dispute resolution

process

• Third party should make a fair,

rapid, and inexpensive

decisions

• Able to deal with power

imbalance between contractors

and sub contractors

• Adjudicator characteristics :

• Not involved in

implementation or

administration of the

contract

• Knowledgeable

• Experience

SELECTION OF THE BEST ALTERNATIVES

- Ie Ignatius Eric Cahya Saputra -

Selection of the Best Alternatives

The most efficient conflict resolution mechanism in term of

• Time management,

• Cost

• Preservation of relationship

is

NEGOTIATION

Selection of the Best Alternatives

• Considering Kenya :

• Applies a very rigid legal framework since years ago

• Is categorized as developing country

HOWEVER

• We foreseen that the most suitable ways for dispute resolution

in Kenya is :

ADJUDICATION

• WHY??

• Flexible, fast, expeditious, cost effective and informal.

• Used adjudicators to deal with power imbalance

RECOMMENDATIONS

- Ie Ignatius Eric Cahya Saputra -

Recommendations

RECOMMENDED SOLUTIONS

1 Constructing Dispute

Clause

• Allows more effective and efficient

process

2 Improving the Legal and

Institutional Framework

for Managing Conflicts

in Project Management

• Kenya does not have an act dealing

with Construction Adjudication

• Kenya is able to restore speed,

flexibility, and public confidence

3 Working as Team to

Achieve Project

• Transparency and open communication

Recommendations

RECOMMENDED SOLUTIONS

4 Need for Conflict

Avoidance

• Risk management technique :

• Ensure the risks are identified,

analyzed, and managed

• Good Procurement Strategy :

• Ensure risks are appropriately

allocated

5 Use of Scientific

Technology for Certainty

• Critical Path (Gantt Chart)

• Help and predict the project

completion on track

• Ensure deliverables ready on time