Negotiation

TCM 710 Project Leadership Overview of Chapter 5 Volume 2

From:
Verma, Vijay . The Human Aspects of Project Management Human Resource Skills for the Project Manager, Volume Two. Upper Darby, PA: Project Management Institute.

About Negotiation
Principles of Negotiation
Separate the people from the problem
Helps avoid the endless cycle of actions and reactions Put yourself if the other persons shoes

Focus on common interests

Acknowledge the interest of the other party, be flexible in the ideas offered, be open and honest

Generate options that advance shared interest

Evaluate options and choose the best one

Results based on standard criteria

Must based on project objectives and success criteria
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About Negotiation
Common Methods of Negotiating
Negotiation Process
Pre-negotiation planning Actual negotiations or agreement Post-negotiation critique

Soft Negotiation
Negotiators are friendly, with a special emphasis on avoiding personal conflict, sensitive to personal feelings

Hard Negotiation
Negotiators consider a situation a contest in which both parties take strong positions and are seen as adversaries

Principle Negotiation
emphasizes resolving the issues based on merits rather than through a haggling process focused on what each side says it will and wont do

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About Negotiation
Impact of Culture on Negotiating
Material Culture Language
The physical objects or technologies created by people
A mirror of any culture, primary medium of communication Refers to art, music, dance, literary traditions and other related customs and artifacts Transmission of knowledge

Aesthetics

Education

Religion, Beliefs, and Attitudes Social Organization Political Life

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Religion is mainspring of a culture, beliefs and attitudes effect daily life such as dress, eating habits, etc The organization of negotiators into groups and the they structure their activities to accomplish goals Important when governments are involved in joint ventures

About Negotiation
Impact of Culture on Negotiating
The Pre-Negotiation Planning Phase
PMs develop a plan or an approach to the negotiations

The Negotiation Meeting Phase (five stages)

Protocol participants get acquainted Probing communication begins Rough bargaining going after what you want Closure issues of cost, schedule and performance are settled Agreement final goal of negotiations

The Post-Negotiation Analysis

Provides feedback about how well the planning and negotiating was carried out
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Negotiation Strategies
Types of Negotiations
Distributive Negotiations (win-lose)
Integrative Negotiations (win-win) Lose-Lose Negotiations Attitudinal Structuring
Occurs during intense conflicts over economic issues such as negotiating cost overruns or schedule delays Used when both parties show flexibility and trust and are strongly motivated to solve problems and explore new ideas Both parties take an extreme position and consequently no satisfactory agreement can be reached

Intra-organizational Negotiations
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Process by which the parties seek to establish desired attitudes and relationships
Negotiations are carried out be representative of each group by obtaining the agreements of their respective groups

Negotiation Strategies
Basic Negotiation Model
Unilateral Negotiation Strategies
Trusting Collaboration use when both relationships and substantive outcomes are important Open Subordination negotiators are more concerned about positive relationships than about substantive outcomes Firm Competition used when substantive outcomes are important and relationships are not Active Avoidance used when neither the substantive outcomes nor the relationships are important to them or to their organization
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Negotiation Strategies
Basic Negotiation Model
Interactive Negotiation Strategies
Principled collaboration both parties discuss openly Focused subordination open subordination can be modified by discovering and then agreeing to those key needs that are of interest to the other party Soft competition PM should soften strategy to avoid destroying relationships with people he/she may need later Passive avoidance avoid negotiation by delegating someone else to explore outcomes Responsive avoidance avoid negotiations by applying standard operating procedures or by developing new policies that address the other partys concerns
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Negotiation Strategies
Basic Negotiation Model
Combining Unilateral & Interactive Strategies
Core Outcome conditions
One party values the relationship but the other party does not One party does not value the relationship but the other party does Both parties value the relationship, but one party does not values substantive outcomes

Intergroup Confrontation Technique

Each group meets separately and prepares two lists The two groups come together and share their perceptions The groups separately look deeper into the issues The groups meet together to share their new insights

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Practical Guidelines for Negotiation

Commit to Negotiate for Mutual Gain
Use principled negotiation to achieve win-win outcomes This approach not only makes negotiating process easier, but also ensures positive outcomes
It produces unwise agreements It is inefficient It endangers an ongoing relationship Positional bargaining is worse when many parties are involved

Avoid Bargaining Over Positions

Separate the People from the Problem

Negotiators are people first Negotiators interest both in the substance and relationship

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Practical Guidelines for Negotiation

Separate the Relationships from the Substance
Perceptions understanding things from another persons point of view Emotions dampen negative impact of emotions Communication key to successful negotiation Prevention

Focus on Interests, not positions

Reconciling interests leads to a wise solution
Interests define the problem Shared and compatible interests lie behind opposing positions Identifying interests Communicating interests
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Practical Guidelines for Negotiation

Generate Options for Mutual Gain
Diagnosis
Premature judgment Searching for the single answer The assumption of a fixed pie Inability to address other partys interests Separate inventing from deciding Broaden your options Multiply options by shuttling between specific and general Look for mutual gain Make their decision easy

Prescription

Insist on using object criteria Develop objective criteria Negotiate with objective criteria
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