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MGT 550: Introduction to Project Management

March 31, 2002

1

For academic use only.

MGT 550

Introduction to

Project Management

Chapter 6:

Conflict and 

Negotiation

Wesley J. Howe School of Technology Management

Course Development Team Members:

Michael Poli

Celia Desmond, PMP

David Keeney, PMP, CQM, CPDT

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MGT 550: Introduction to Project Management

March 31, 2002

2

For academic use only.

Copyright Information

The slides in this file are provided to faculty instructing MGT 500 on behalf of the 
Stevens Institute of Technology.  Use is restricted to academic endeavors 
associated with the delivery of MGT 550 to students properly enrolled at the 
Stevens Institute of Technology.  All other rights are reserved by the original owners 
of materials contained in this program.

The slides contain copyrighted material that has been reproduced and/or adapted to 
the course syllabus under the doctrine of “fair use for academic purposes”.  All 
slides in this course are copyrighted by the original source.  Requests to reproduce 
materials for other purposes should be directed to the copyright owner identified in 
the bibliography that will be made available to faculty.

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MGT 550: Introduction to Project Management

March 31, 2002

3

For academic use only.

Module 6: Conflict & Negotiation

Purpose: prepare students to identify 

potential strategies for dealing with conflict 

and to recognize that negotiation can be 

used to resolve many problems associated 

with conflict among stakeholders.

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MGT 550: Introduction to Project Management

March 31, 2002

4

For academic use only.

Module 6 Objectives

• Conflict Strategies

– Describe five possible methods for dealing with conflict
– Present the advantages and disadvantages of each 

method for dealing with conflict

– Explain that each method can be an appropriate 

response to conflict

– Introduce the concept of situational leadership
– Explain that the nature of conflict will usually change 

over the project lifecycle

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MGT 550: Introduction to Project Management

March 31, 2002

5

For academic use only.

Conflict

• Conflict 

– “process which begins when one party perceives that 

the other has frustrated, or is about to frustrate, some 
concern of his”

– Can play creative role in planning process

• Debate over proper technical approach to 

problem often generates collaborative solution 
that is superior to solution originally proposed

• Conflict often educates individuals and groups 

about goals/objectives of other individuals and 
groups

M&M Text, Chpt. 6

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MGT 550: Introduction to Project Management

March 31, 2002

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For academic use only.

Constructive Results of Conflicts

• Stimulation of a search for new facts or 

resolutions

• Improved communication
• Diffusion of more serious conflict
• Increase in group cohesion and 

performance

• Development of problem solving 

techniques

Desmond, 2001

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MGT 550: Introduction to Project Management

March 31, 2002

7

For academic use only.

Conflict Coping Styles

• Withdraw/Avoid

• Accommodate/Smooth-over

• Dominate/Confront

• Compromise

• Problem-Solve

Each style has 

appropriate

and inappropriate uses.

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MGT 550: Introduction to Project Management

March 31, 2002

8

For academic use only.

Withdrawing (Avoiding)

Appropriate:
• Trivial issue
• Costs > benefits
• Need to cool-off 

first

Not Appropriate:
• Important issue
• You are 

responsible

• Not willing to defer
• Prompt action is 

needed

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MGT 550: Introduction to Project Management

March 31, 2002

9

For academic use only.

Accommodating (Smoothing)

Appropriate:
• I might be wrong
• Issue important to 

other person but not 

to you

• My position is weak
• The relationship is 

important

• Gain future leverage

Inappropriate:
• I am right
• Issue important for 

me

• As temporary 

solution to be 
renegotiated later

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MGT 550: Introduction to Project Management

March 31, 2002

10

For academic use only.

Dominate/Confront

Appropriate:
• Speed is needed
• Overcome assertive 

subordinates that 
lack expertise on 
issue

• Issue is important to 

me

Inappropriate:
• Issue is complex
• Issue not 

important to me

• Both parties have 

equal power

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MGT 550: Introduction to Project Management

March 31, 2002

11

For academic use only.

Compromise

Appropriate:
• Both parties have 

equal power and 
goals are mutually 
exclusive

• Consensus not 

attained and better 
methods have not 
worked

Inappropriate:
• One party is more 

powerful

• Problem is too 

complex

• Win-win can be 

attained

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MGT 550: Introduction to Project Management

March 31, 2002

12

For academic use only.

Problem-Solve

Appropriate:
• Complex issue
• Need synthesis to 

get solution

• Time is available
• Teamwork needed

Inappropriate:
• Simple problem
• Immediate 

decision needed

• Other parties are 

not concerned 
about problem

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MGT 550: Introduction to Project Management

March 31, 2002

13

For academic use only.

Conflict Management Techniques

COMPROMISE

SMOOTHING

(ACCOMMODATING)

PROBLEM 

SOLVING

(COLLABORATING)

WITHDRAWAL

(AVOIDING)

FORCING

(COMPETING)

HIGH

LOW

LOW

HIGH

OBJECTIVE 

ORIENTATION

R

E

L

A

T

IO

N

S

H

IP

S

 

O

R

IE

N

T

A

T

IO

N

Desmond, 2001

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MGT 550: Introduction to Project Management

March 31, 2002

14

For academic use only.

Module 6 Objectives

• Tuckman’s Model of Group Dynamics

– Describe the stages of group development
– Apply Tuckman’s Model to team development over the 

project lifecycle

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MGT 550: Introduction to Project Management

March 31, 2002

15

For academic use only.

Tuckman’s Model of

Group Dynamics

• Forming
• Storming
• Norming
• Performing
• Disbanding

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MGT 550: Introduction to Project Management

March 31, 2002

16

For academic use only.

Module 6 Objectives

• Basic Negotiation

– Describe the basic principles of negotiation
– Emphasize the role and importance of a BATNA
– Emphasize the importance of learning from differences
– Give examples of how to negotiate for resources with 

functional managers

– Explain the natural antagonism that exists between a 

buyer and a seller.

– Explain the role of contracts in documenting a 

negotiated “meeting of the minds”

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MGT 550: Introduction to Project Management

March 31, 2002

17

For academic use only.

Nature of Negotiation

• Negotiation 

– “the process through which two or more 

parties seek an acceptable rate of exchange 
for items they own or control”

– Favored technique for resolving conflict

• Firms should view conflicts within 

organization as conflicts between allies, 
not opponents

M&M Text, Chpt. 6

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MGT 550: Introduction to Project Management

March 31, 2002

18

For academic use only.

Principled Negotiation

• Separate people from the problem

- Emotions and fact can be confused
- Define problem

• Focus on interests, not positions

- Bargaining, haggling (may have cultural linkages)
- Never focuses on real Issues
- Determine other party’s interests

• Invent options for mutual gain

- Enter knowing outcome they would like
- Blind to other outcomes
- Find options that produce mutual gain

• Insist on using objective criteria

- Find standards, use to determine quality outcome
- Make less a contest of wills 

M&M Text, p 244-245

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MGT 550: Introduction to Project Management

March 31, 2002

19

For academic use only.

BATNA

• B

est

• A

lternative

• T

o a

• N

egotiated

• A

greement

Fisher & Ury,

Getting to Yes

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MGT 550: Introduction to Project Management

March 31, 2002

20

For academic use only.

Dr. Stephen Covey’s 7 Habits of 

Highly Effective People

1. Be proactive
2. Begin with the end in mind
3. Put first things first
4. Think win/win
5. Seek first to understand, then to be 

understood

6. Synergize
7. Sharpen the saw

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MGT 550: Introduction to Project Management

March 31, 2002

21

For academic use only.

Conflict and Project Lifecycle

• Certain patterns of conflict are associated 

with different periods in life of project

1. Groups working on project may have different 

goals and expectations

2. There is considerable uncertainty about who 

has authority to make decisions

3. There are interpersonal conflicts between 

people who are parties-at-interest in project

M&M Text, Chpt. 6

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MGT 550: Introduction to Project Management

March 31, 2002

22

For academic use only.

Conflict in Projects

• Initially, most conflict centers around 

inherent confusion of setting up project in 
environment of matrix management

– Almost nothing about project or its 

governance has been decided

– Moving from this chaotic environment to 

buildup stage can be difficult

M&M Text, Chpt. 6

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MGT 550: Introduction to Project Management

March 31, 2002

23

For academic use only.

Conflict in Projects

• To make transition from project formation to 

buildup, 4 issues should be addressed:

– Technical objectives of project should be specified to 

degree that will allow detailed planning of build up stage 

to be accomplished

– Commitment of resources to project should be 

forthcoming from senior management and functional 

managers

– Priority of project relative to priorities of parent 

organization’s other projects should be set and 

communicated

– Organizational structure of project should be 

established to extent sufficient for WBS and linear 

responsibility chart preparation

M&M Text, Chpt. 6

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MGT 550: Introduction to Project Management

March 31, 2002

24

For academic use only.

Conflict in Projects

• Formation is period during which project 

moves from general concept to highly 

detailed set of plans

– As plans become detailed, conflicts over 

technical issues build

– Conflicts between project manager and 

functional areas tend to predominate

• Usually, functional areas can claim more 

technical expertise than project manager 

who is usually a “generalist”

M&M Text, Chpt. 6

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MGT 550: Introduction to Project Management

March 31, 2002

25

For academic use only.

Conflict in Projects

• Schedules are 

– Still a major source of conflict in main program
– Proximate cause of schedule-related conflict is 

usually different than in earlier stages

• “Catching up” 

– Requires extra resources that functional 

groups will demand

– Project manager may not have extra resources

• Technical conflicts are frequent and 

serious during main program stage

M&M Text, Chpt. 6

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MGT 550: Introduction to Project Management

March 31, 2002

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For academic use only.

Conflict in Projects

• During main phase, many parts must be 

linked properly

– These linkages are known as interfaces
– Number of interfaces increases rapidly as 

project gets larger 

– System gets more complex

• Need to manage these interfaces and 

correct incompatibilities is key to 
technical conflicts in main program phase

M&M Text, Chpt. 6

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MGT 550: Introduction to Project Management

March 31, 2002

27

For academic use only.

Conflict in Projects

• Schedule is major source of conflict 

during project phaseout

– Technical problems are comparatively rare 

because most have been solved or bypassed

– Personality conflicts are second ranked source 

of conflict during phaseout

• Pressure to complete project
• Anxiety about leaving the project

• Primary tool to accomplish conflict 

resolution and reduction is negotiation

M&M Text, Chpt. 6

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MGT 550: Introduction to Project Management

March 31, 2002

28

For academic use only.

Conflict in Projects

• Few conflicts arising in projects have to 

do with whether or not task will be 
undertaken

– Instead, they have to do with

• Precise design of deliverable
• How design will be achieved
• By whom and at what cost

• Implication is clear: Work of project will be 

done

M&M Text, Chpt. 6

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MGT 550: Introduction to Project Management

March 31, 2002

29

For academic use only.

Conflict Reduction/Resolution

• One requirement for conflict reduction/resolution 

by project manager is that PM should allow 
conflict to be settled without irreparable harm to 
project’s objectives

• To do this, project manager should:

– Allow (and foster) honesty between negotiators
– Employ only ethical tactics during negotiation
– Understand that any behavior that breeds mistrust will 

make future negotiations difficult, perhaps impossible

– Emphasize that conflicting parties are members of 

alliance with strong common interests

M&M Text, Chpt. 6

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MGT 550: Introduction to Project Management

March 31, 2002

30

For academic use only.

Legal Obligations

• Contracts create enforceable obligations 

related to the natural antagonism that 
exists between the buyer and the seller

– Allocation of resources
– Assignment of risk

• The contract formalizes the relationship 

between the buyer and the seller

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MGT 550: Introduction to Project Management

March 31, 2002

31

For academic use only.

Procurement Processes

Procurement

Planning

Solicitation

Planning

Solicitation

Source

Selection

Contract

Closeout

Bidders

List

Negotiation 

and

Selection

Contract

Execution

Contract

Closeout

Time

Requisition

RFI

IFB

RFP

RFQ

Quotations

Brochures

Bids

Proposals

Receive

Issue

Contract

Administration

Bid

Analysis

or

Keeney, 2001

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MGT 550: Introduction to Project Management

March 31, 2002

32

For academic use only.

Typical Contract Clauses

• Government flow-

down clauses 
include:

– Termination for 

convenience

– Privity

• Payment
• Free will
• Whole agreement
• Notification
• Termination
• Damages
• Assignment
• Jurisdiction
• Disputes

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MGT 550: Introduction to Project Management

March 31, 2002

33

For academic use only.

Reading Assignments

• From Chapter 6

– Text

• Pp 226 – 248
• Pp 252 – 257

• For Chapter 7

– Text

• Pp 261 – 292
• Pp 295 – 301


Document Outline