MGMT 483 Week 4. Negotiation and the management of conflict The nature of negotiation Dealing...

MGMT 483 Week 4

Negotiation and the management of conflict The nature of negotiation Dealing with outside partners /subcontractors The role of the project charter Dealing with scope creep and scope change Some requirements and principles of negotiation

The project in the organizational structure The project as part of the functional organization The pure project organization The matrix organization Virtual projects Mixed organizational systems The project team

Meredith & Mantel (2009) Project management: a managerial approach. 7th ed. Wiley.

Conflict is a natural and necessary part of projects, so PMs must learn to deal with it.

Negotiation is one process used to resolve conflict.

Goal: to come up with solutions that are mutually agreeable to the parties involved. “such that no party can be made better off

without making another party worse off by the same amount or more.” (known as a Pareto-optimal solution).


Dealing with outside partners /subcontractors

The role of the project charter

Dealing with scope creep and scope change


Project firm and subcontractors are at odds on a project – the relationship is basically adversarial Project firm wants the deliverable at the highest quality

and lowest cost, ASAP Subcontractors want to produce the deliverable at the

highest profit with the least amount of effort The concept of “partnering”: designed to replace

this with cooperation and mutual helpfulness Joint evaluation of project progress A method for solving conflicts and disagreements Acceptance of a goal of continuous improvement (TQM) Continuous high level support for the concept of

partneringMeredith & Mantel (2009) Project management: a managerial approach. 7th ed. Wiley.

The Project Charter includes the expected deliverables, budgets, & resource commitments

The charter constitutes the written agreement between the parties

Very important where subcontractors are involved

All projects should have some form of Charter – at least can act as evidence that the parties agreed at some point!


Reasons for scope change The initial assessment was wrong –

technological uncertainty is a big factor Project team or the client learns more about

the project as it proceeds Change is mandated – in other words,

something happens in the external environment that can’t be controlled

The Project Charter and partnering can also help the PM deal with conflicts over scope change – but these are not yet widely or fully adopted


Pritchard Soap Company page 181 Work in small groups to answer the

question


Must always try to negotiate towards a “win-win” situation – it is the key to conflict resolution in project management

What does “win-win” mean? “It is a requirement of all conflicting parties

to seek solutions to the conflict that not only satisfy their own individual needs, but also satisfy the needs of the other parties to the conflict, as well as the needs of the parent organization”


1. Separate the people from the problem

2. Focus on interests, not positions3. Before trying to reach agreement,

invent options for mutual gain4. Insist on using objective criteria

The Quad Sensor project – page 178 Questions on page 181


Huge growth in project-based work1. Need for speed, market responsiveness, and product

flexibility2. Need for broader areas of knowledge in developing

new products and services3. Rapid expansion of technology4. Management inability to understand and control large

numbers of activities Switching to a project environment is difficult and time

consuming Requires the full commitment of upper management Generally causes a lot of “concern” among employees As a result, organizations may have multiple structures


1. How to tie project to parent firm

2. How to organize the project

3. How to organize activities common to multiple projects


1. The project as part of the functional organization

2. The pure project organization3. The matrix organization

Virtual projects4. Mixed organizational systems


Organization is divided into functional sub-units Integration between sub-units handled

by rules, procedures Management chain handles problems Works well in stable environment


1. Flexible use of staff Experts assigned to functional units Assigned to projects as needed

2. Staff can easily be assigned to multiple projects Experts can be switched between projects easily Functional manager picks best expert for each

project

3. Specialists can share knowledge and experience


4. Functional units provide technological/knowledge continuity

Also provide continuity of policies and procedures

Functional manager can train and inspect5. Functional areas provide for a career

path within a knowledge area Engineers can become supervisors or VP’s Does not require movement into project

management to advanceMeredith & Mantel (2009) Project management: a managerial approach. 7th ed. Wiley.

1. Client is not the focus Function unit has its own work outside the project Functional manager not likely to be accountable for

project and therefore client2. Functional units not focused on project

Function unit sees success in its area as most important Project seen as secondary, or worse, an interruption

3. Project manager may not have adequate authority Must share authority with functional managers May be several managers responsible for various parts of

project Client may not have a single point of contact at project This can make response to the client slow or non-existent


4. Slow response Functional managers manage their part to

benefit their functional unit Interests outside their area may not be fully

considered5. Motivation is weak

Project is not the worker’s “home” Project manager most likely does not do their

performance evaluations May not receive additional pay for difficulties

of working on projectMeredith & Mantel (2009) Project management: a managerial approach. 7th ed. Wiley.

Figure 5-2Meredith & Mantel (2009) Project management: a managerial approach. 7th ed. Wiley.

1. Project manager has full authority Will typically report to senior management

(project sponsor) This gives project manager access to managerial

advice This centralizes authority and makes for rapid

decision making / response to client2. Everyone reports to the project manager

This gives the project manager the ability to make quick decisions

Makes it easier for project manager to motivate and reward members

May be tempered by relationship to functional unit3. Shorter communications lines


4. Can maintain project management skills Project managers can move from project to project It pays to hire, train, and promote skilled project

managers

5. Project team has its own identity Project members work for the “project” not the

functional unit This can significantly improve performance

6. Quick decisions Authority is centralized


7. Unity of command7. Each worker reports to one, and-only-one,

manager8. Project has a simple structure

8. Structurally simple and flexible Easy to implement

9. Holistic approach Everyone on project is concerned about

project, not their functional unitMeredith & Mantel (2009) Project management: a managerial approach. 7th ed. Wiley.

1. Duplicate staffing Each project has a full staff This leads to overstaffing

2. Stockpiling Project managers tend to stockpile resources so they are

available when needed They also tend to keep those resources longer than needed

just-in-case3. Experts falling behind in other areas

Experts on a project will focus on the areas essential to the project

This can lead to them falling behind in other areas It can also be difficult to feed their developing expertise

back into the organizationMeredith & Mantel (2009) Project management: a managerial approach. 7th ed. Wiley.

4. Organizational inconsistency Corner-cutting “They don’t understand our problems”

5. Life of its own Projectitis Us versus them

6. Life after the project ends Lots of uncertainty Will there be layoffs Rusty skills


Only way to do large, one-time projects

Disadvantages make it impractical for continually doing projects, e.g. construction

Matrix developed in aerospace to deal with this


Functional part provides home for workers after project

Functional part helps maintain expertise In a strong matrix, people from functional

areas are assigned to project In a weak matrix, capacity from functional

areas are assigned to project


1. The project is the focus That remains the project manager’s responsibility

2. The project has access to entire organization for labor and technology

Projects draw from functional organizations as required This reduces duplication of resources

3. Less anxiety about the end of the project Project members return to their functional

organizations4. Response to client is rapid

That remains the project manager’s responsibility With much remaining within parent organization,

response to parent is also rapidMeredith & Mantel (2009) Project management: a managerial approach. 7th ed. Wiley.

5. Consistent policies Parent organization will oversee project Project will have closer access to parent administration

6. Easier to balance organizational resources Less competition for resources Competition can be controlled by parent organization

and functional managers7. Flexibility

Many different possible structures between strong and weak

Different structures can be used for different projects Different structures can be used for different functional

areasMeredith & Mantel (2009) Project management: a managerial approach. 7th ed. Wiley.

1. Functional units make many decisions, including technology ones

Project manager has less control than in a pure project

Project manager’s control is balanced against that of the functional manager

If they disagree, it can be hard to resolve

Negotiation is the key to project success


2. Projects compete for resources This is especially true when there are

several large projects Someone above project managers

must set and enforce priorities Multiple schedules will add stress to

functional managers


3. Strong matrices mirror many disadvantages of project structure People are assigned to, and identify with,

“their” project much as in the project structure

4. Workers do not have a single manager This splits loyalty Makes performance appraisal difficult Information flow is difficult


Project team crosses time, space, organizational, or cultural boundaries

Facilitated by the Internet and modern communications media

Often organized as a matrix


Use it for challenging and interesting projects

Solicit volunteers to work on the team rather than forcing people to do so

Make sure a few people on the team already know each other

Create a resource to learn about one another and to do online collaboration and brainstorming

Encourage frequent communications Divide work into geographic modules if

possibleMeredith & Mantel (2009) Project management: a managerial approach. 7th ed. Wiley.

Firms typically do not set out to “pick” an organizational form

Rather, the structure evolves over time

The structure is not static

Rather, it changes as the organization, its goals, and its environment changes


In-depth application of a technology

Large capital investment, especially when that investment is concentrated in one functional area


Handling a large number of similar projects

Handling a one-time project that

requires much control but is not focused on one functional area


Projects that require inputs from several functional areas

Projects that use technology from several functional areas


Different project need different staffs A typical engineering project core team:

Systems Architect Development Engineer Test Engineer Field Manager Contract Administrator Project Controller Support Services Manager Additional resources would be provided from the

functional organizations as needed to accomplish all the tasks.

All team members report to the PMMeredith & Mantel (2009) Project management: a managerial approach. 7th ed. Wiley.

Some of the problems that prevent a team from performing effectively: Lack of consultation and input Internal conflict Member frustration Wasting time Poor decision making Team members more concerned with finishing

job than doing good job


The PM must be prepared to deal with the many human issues that will occur even on the most technically oriented project.

Made more challenging by the fact that the PM often does not control pay and promotion issues for his or her team members.

PM should use formal and informal team building activities to foster the morale and participation of the team.

PM should consult his / her team and use the input


“Teamwork is a lot of people doing what I say” - anon

Shaw’s Strategy page 225 Work in small groups to answer the

question


MGMT 483 Week 4. Negotiation and the management of conflict The nature of negotiation Dealing...

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