IE 426: Project Management
Chapter 04
Negotiation and the Management
of Conflict
Ramzi Alahmadi, Ph.D.
Industrial Engineering Department
Conflict and Negotiation
• Conflict: A process is initiated when one party perceives
that its interests or concerns have been obstructed or
undermined by the actions of another party.
• Often arises from goal differences between groups
• Can occur at any phase of the project life cycle
• Negotiation: the Skills required to resolve most
conflicts
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Stakeholders
Any individual, group, or entity who can affect or be affected
by the project process or the project outcomes
Why They Matter?
• Project may need contributions from stakeholders
• Stakeholder resistance may negatively affect the project
• The project may affect stakeholders in unanticipated ways
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Identifying and Analyzing
Stakeholders
• Identify stakeholders
o Usually through expert judgment
o Create stakeholder register
o Create stakeholder issue log
• Analyze stakeholders
o Update stakeholder register
o Power-Interest Grid
o Commitment Assessment Matrix
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Power – Interest Grid
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Commitment Assessment Matrix
C: Current Level of Commitment
D: Desired Level of Commitment
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Conflict Across the Project Life Cycle
• Project Front End (Common at project start)
- Objectives not yet finalized
- Policies and procedures have not yet been formed
- Conflict here can be constructive
• Project Execution
- Tend to be technical in nature
- PM vs. functional areas conflicts
- Schedules are a major source of conflict
• Project Closure
- Deadlines are a major source of conflict
- Technical problems are rare
- Personality conflicts will be a big deal due to time pressures
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Dealing With Conflicts
People deal with conflict along two dimensions
- Assertive Unassertive
- Cooperative Uncooperative
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Negotiation Approaches: Principled
Negotiation
1. Separate the people from the problem
2. Focus on interests, not positions
3. Invent options for mutual gain
4. Use objective criteria
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Negotiation Approaches: Principled
Negotiation Example
Scenario: Two departments at a university (Engineering and Business) are
negotiating over the use of a large lecture hall for their upcoming events.
Both want it on the same date.
Positional Approach (what often happens: leads to conflict ):
- Engineering: “We need the hall on this date, we booked first.”
- Business: “No, our event is bigger, we should get priority.”
Principled Negotiation Approach:
1. Separate the people from the problem: Both sides agree that the
conflict is not personal, it’s about scheduling.
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Negotiation Approaches: Principled
Negotiation Example
2. Focus on interests, not positions:
- Engineering’s real interest: They need good audio-visual facilities for student
presentations.
- Business’s real interest: They want a space large enough to host external
industry guests.
3. Generate options for mutual gain: They brainstorm alternatives:
- Use the same hall at different times (morning vs. evening).
- Business uses the hall, while Engineering uses a nearby theater with
upgraded AV support.
- Agree to rotate priority each semester.
4. Use objective criteria: They check university policy for fair allocation
and capacity requirements to guide the final decision.
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Negotiation Approaches: Partnering,
Chartering & Scope Creep
There are three situations that are particularly challenging for a PM’s
negotiating skills:
• Dealing with outsourced resources
• Using multiple functional units
• Managing change
1. Partnering: The relationship between a project and its subcontractors
can be adversarial or a partnership. To establish partnering the parties
must make a commitment to the success of the project and establish
mechanisms to resolve disputes.
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Negotiation Approaches: Partnering,
Chartering & Scope Creep
2. Chartering. The charter is a written part of the project plan that:
- Records agreements between the project manager, senior management, and
functional managers.
- Defines key deliverables, including schedule, budget, and resources.
- Confirms all stakeholders share the same understanding of what will be
done, when, and at what cost.
3. Scope Change:
- Causes: initial planning errors, client gaining new insights, or external
changes.
- The PM must negotiate with stakeholders to adjust the project plan and
accommodate changes
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