In the project environment, conflicts are inevitable. However, as described in Chapter 5, conflicts and their resolution can be planned for. For example, con-
flicts can easily develop out of a situation where members of a group have a misunderstanding of each other's roles and responsibilities. Through documentation, such as linear responsibility charts, it is possible to establish formal organizational procedures (either at the project level or company-wide). Resolution means collaboration in which people must rely on one another. Without this, mistrust will prevail and activity documentation can be expected to increase.
The most common types of conflicts involve:
• Manpower resources
• Equipment and facilities
• Capital expenditures
• Technical opinions and trade-offs
• Administrative procedures
• Personality clashes
Each of these conflicts can vary in relative intensity over the life cycle of a project. The relative intensity can vary as a function of:
• Getting closer to project constraints
• Having only two constraints instead of three (i.e., time and performance, but not cost)
• The project life cycle itself
• The person with whom the conflict occurs
Sometimes conflict is "meaningful" and produces beneficial results. These meaningful conflicts should be permitted to continue as long as project constraints are not violated and beneficial results are being received. An example of this would be two technical specialists arguing that each has a better way of solving a problem, and each trying to find additional supporting data for his hypothesis.
Some conflicts are inevitable and continually reoccur. As an example, let us consider the raw material and finished goods inventory. Manufacturing wants the largest possible inventory of raw materials on hand so as not to shut down production; sales and marketing want the largest finished goods inventory so that customer demands will be met; and, finally, finance and accounting want the smallest raw material and finished goods inventory so the books will look better and no cash flow problems will occur.
Conflicts appear differently depending on the organizational structure. In the traditional structure, conflict should be avoided; in the project structure, conflict is part of change and therefore inevitable. In the traditional structure, conflict is the result of troublemakers and egoists; in the project structure, conflict is deter mined by the structure of the system and relationship among components. In the traditional structure, conflict is bad; in the project structure, conflict may be beneficial.
Conflicts can occur with anyone and over anything. Some people contend that personality conflicts are the most difficult to resolve. Below are several situations. The reader might consider what he or she would do if placed in the situations.
• Two of your functional team members appear to have personality clashes and almost always assume opposite points of view during decision making. They are both from the same line organization. Conflicts are inevitable.
• Two of your line managers continuously argue as to who should perform a certain test. You know that this situation exists, and that the department managers are trying to work it out themselves, often with great pain. However, you are not sure for how long they will be able to resolve the problem themselves.
• Manufacturing says that they cannot produce the end-item according to engineering specifications.
• R&D quality control and manufacturing operations quality control argue as to who should perform a certain test on an R&D project. R&D postulates that it is their project, and manufacturing argues that it will eventually go into production and that they wish to be involved as early as possible.
• During contract negotiations, a disagreement occurs. The vice president of company A orders his director of finance, the contract negotiator, to break off negotiations with company B because the contract negotiator for company B does not report directly to a vice president.
• Mr. X is the project manager of a $65 million project of which $1 million is subcontracted out to another company in which Mr. Y is the project manager. Mr. X does not consider Mr. Y as his counterpart and continually communicates with the director of engineering in Mr. Y's company.
Ideally, the project manager should report high enough so that he can get timely assistance in resolving conflicts. Unfortunately, this is easier said than done. Therefore, project managers must plan for conflict resolution. As examples of this:
• The project manager might wish to concede on a low-intensity conflict if he knows that a high-intensity conflict is expected to occur at a later point in the project.
• Jones Construction Company has recently won a $120 million effort for a local company. The effort includes three separate construction projects, each one beginning at the same time. Two of the projects are twenty-four months in duration, and the third is thirty-six months. Each project has its own project manager. When resource conflicts occur between the projects, the customer is usually called in.
• Richard is a department manager who must supply resources to four different projects. Although each project has an established priority, the project managers continually argue that departmental resources are not being allocated effectively. Richard now holds a monthly meeting with all four of the project managers and lets them determine how the resources should be allocated.
Many executives feel that the best way of resolving conflicts is by establishing priorities. This may be true as long as priorities are not continually shifted around. As an example, Minnesota Power and Light establishes priorities as:
• Level 0: no completion date
• Level 1: to be completed on or before a specific date
• Level 2: to be completed in or before a given fiscal quarter
• Level 3: to be completed within a given year
This type of technique will work as long as we do not have a large number of projects in any one group, say level 1. How would we then distinguish between projects?
Executives are responsible for establishing priorities and often make the mistake of not telling the project managers the reasons for the priority level. There may be sound reasons for concealing this information, but this practice should be avoided whenever possible.
The most common factors influencing the establishment of project priorities include:
• The technical risks in development
• The risks that the company will incur, financially or competitively
• The nearness of the delivery date and the urgency
• The penalties that can accompany late delivery dates
• The expected savings, profit increase, and return on investment
• The amount of influence that the customer possesses, possibly due to the size of the project
• The impact on other projects
• The impact on affiliated organizations
• The impact on a particular product line
The ultimate responsibility for establishing priorities rests with top-level management. Yet even with priority establishment, conflicts still develop. David Wilemon has identified several reasons why conflicts still occur:1
1 David L. Wilemon, "Managing Conflict in Temporary Management Situations," The Journal of Management Studies, 1973, pp. 282-296.
• The greater the diversity of disciplinary expertise among the participants of a project team, the greater the potential for conflict to develop among members of the team.
• The lower the project manager's degree of authority, reward, and punishment power over those individuals and organizational units supporting his project, the greater the potential for conflict to develop.
• The less the specific objectives of a project (cost, schedule, and technical performance) are understood by the project team members, the more likely it is that conflict will develop.
• The greater the role of ambiguity among the participants of a project team, the more likely it is that conflict will develop.
• The greater the agreement on superordinate goals by project team participants, the lower the potential for detrimental conflict.
• The more the members of functional areas perceive that the implementation of a project management system will adversely usurp their traditional roles, the greater the potential for conflict.
• The lower the percent need for interdependence among organizational units supporting a project, the greater the potential for dysfunctional conflict.
• The higher the managerial level within a project or functional area, the more likely it is that conflicts will be based upon deep-seated parochial resentments. By contrast, at the project or task level, it is more likely that cooperation will be facilitated by the task orientation and professionalism that a project requires for completion.
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What you need to know about… Project Management Made Easy! Project management consists of more than just a large building project and can encompass small projects as well. No matter what the size of your project, you need to have some sort of project management. How you manage your project has everything to do with its outcome.