Negotiations

Created by Gudrun Karitas Blomsterberg

Summary

Negations are a part of everyday life, a useful skill in both personal and professional settings. Negotiations are highly relevant to project management, as they encourage alignment with key stakeholders, play a large part in resource allocation and organizational structures, and risk management. Being skilled at negotiating can prevent conflict in projects and enable smoother project execution. It is also useful in our personal lives as it can enable us to buy our dream home, help us launch our start-up, and even give us an advantage when deciding who must do the dishes. Therefore, it is safe to conclude that the art of negotiation is a skill useful and relevant to everyone. This article will provide a review of the relevance of negotiation for project managers and explore the key factors that determine the trajectory of negotiations, such as different personality types and power. Additionally, cultural differences and their impact on negotiations are examined, a relevant topic as negotiations between parties with different cultural backgrounds become more common. Finally, this article will address the benefits and limitations of the negotiation process.

The Big Idea

Negotiations refer to discussions between two or more parties to reach an agreement. The different parties usually come to an agreement through a series of back-and-forth discussions, strategies, demands, and tactics . But what are the determining factors when it comes to the outcome – is it personality traits, a specific tactic or negotiation approach, and is there something that will ensure success every time?

The Importance of Negotiations in Project Management

Being a skilled negotiator is beneficial for everyone and especially project managers. Most projects have contracts and/or procurement - procurement can mean physical materials or products, labour, and services. These things involve negotiating and a good project manager must be a skilled negotiator or hire one. It has a great influence on the financial side of projects and is a skill that comes to great use for stakeholder relations and conflict management. Stakeholders play a large part in projects and can directly or indirectly influence the outcome of projects. Project teams are a group of stakeholders that communicates with other groups of stakeholders, they must take into consideration the interests, needs, and opinions of other stakeholders. Stakeholders must be analyzed and engaged with from the start . Conflicting interests must be addressed, addressing conflicts at a late stage often leads to disappointment and can be avoided and settled by negotiating .

Resource allocation, project budget, and timelines are often re-evaluated over the course of projects, where negotiations play a key part. Negotiations are not only a part of the first steps in projects but are repeated when needed over the project’s lifetime. Having a project manager who is a skilled negotiator can save a lot of money and time, as no outside council is needed.

The four perspectives of project management are purpose, people, complexity, and uncertainty. The most relevant to negotiations is people. For a team to perform at its best conflicts need to be addressed, as they are unavoidable - so it does not come as a surprise that conflict resolution is a tool frequently used by project managers. Conflicts emerge because of stakeholders’ different views, goals, and interests. Project managers need to develop their soft skills to interact with people, after all around 80% of their time is spent on communication, so it’s important to be able to actively listen, lead, establish a vision, prioritize, and negotiate