The Nature Of Negotiation

The favored technique for resolving conflict is negotiation. What is negotiation? Wall 133, Preface) defines negotiation as "the process through which two or more parties seek an acceptable rate of exchange for items they own or control." Dissatisfied with this definition, he spends part of a chapter extending and discussing the concept (33, Chapter 1), without a great deal of improvement. Cohen |9, p. 151 says that "Negotiation is a field of knowledge and endeavor that focuses on gaining the favor of people from whom we want things." Other authors define negotiation differently, but do not appreciably extend Cohen's definition. Even if no single definition neatly fits all the activities we label "negotiation," we do recognize that such terms as "mediate," "conciliate,"" make peace," "bring to agreement," "settle differences," "moderate," "arbitrate," "adjust differences," "compromise," "bargain," "dicker," and "haggle," |27, pp. 504-505, 534, 545] are synonyms for" negotiate" in some instances.

Most of the conflicts that involve the organization and outsiders have to do with property rights and contractual obligations. In these cases, the parties to negotiation see themselves as opponents. Conflicts arising inside the organization may also appear to involve property rights and obligations, but they typically differ from conflicts with outsiders in one important way: As far as the firm is concerned, they are conflicts between allies, not opponents. Wall (33, pp. 149-50) makes this point neatly:

Organizations, like groups, consist of interdependent parts that have their own values, interests, perceptions, and goals. Each unit seeks to fulfill its particular goal . . . and the effectiveness of the organization depends on the success of each unit's fulfillment of its specialized task. )ust as important as the fulfillment of the separate tasks is the integration of the unit activities such that each unit's activities aid or at least do not conflict with those of the others.

One of the ways in which organizations facilitate this integration is to establish "lateral relations (which | allow decisions to be made horizontally across lines of authority" (33, p. 150). Because each unit will have its own goals, integrating the activities of two or more units is certain to produce the conflicts that Wall says should not take place. The conflicts may, however, be resolved by negotiating a solution, if one exists, that produces gains (or minimizes losses) for all parties. Raiffa (25, p. 139] defines a Pareto optimal solution to the two-party conflict and discusses the nature of the bargaining process required to reach optimality, a difficult and time-consuming process. While it is not likely that the conflicting parties will know and understand the complex tradeoffs in a real world, project management, many-persons/many-issues conflict (see 25, Chapters 17-23), the general objective is to find a solution such that no party can be made better off without making another party worse off by the same amount or more—i.e., a Pareto optimal solution.

Approaching intraproject conflicts with a desire to win a victory over other parties is inappropriate. The proper outcome of this type of negotiation should be to optimize the outcome in terms of overall organizational goals. Although it is not always obvious how to do this, negotiation is clearly the correct approach.

During the negotiation process, an ethical situation often arises that is worth mentioning. Consider the situation where a firm requests an outside contractor to develop a software package to achieve some function. When the firm asks for a specific objective to be accomplished, it frequently does not know if that is a major job or a trivial task because it lacks technical competence in that area. Thus, the con-

tractor has the opportunity to misrepresent the task to its customer, either inflating the cost for a trivial task or minimizing the impact of a significant task in order to acquire the contract and then boosting the cost later. The ethics of the situation require that each party in the negotiation be honest with the other, even in situations where it is clear there will not be further work between the two.

Project Management Made Easy

Project Management Made Easy

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.

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