Negotiation Skills

Abstract

Back in the 17th century Negotiation is related to a dialogue between two or more people where a compromise or an agreement is reached avoiding argument dispute, aiming to achieve a beneficial outcome. Negotiation is one of the most important factors for a business success and this is why it is one of the main qualities employers look for when recruiting staff nowadays[1]. People negotiate everyday in their life even when they do not realize it and project management is no different, for that reason this article will focus on the importance of negotiation skills for a Project Manager to achieve the best deals in the demanding business world that is changing constantly. Improved supplier relationships, sustainable competitive advantage and managing conflicts effectively are all advantages of successful negotiations [1]. Being able to negotiate opens the door to more supportive stakeholders, better relationships with your clients and a more positive working environment where everyone feels they are getting something out of the engagements [3skills for pm]. Negotiation skills can be learned but in order to do that, it is essential that the Project Manager spends time, money and energy to learn about them and practice as much as possible to sharpen their skills and get more efficient in any situation.

Introduction

Being able to negotiate opens the door to more supportive stakeholders, better relationships with your clients and a more positive working environment where everyone feels they are getting something out of the engagements [negotiation-skills-project-managers]. The process of negotiation eventuate at any time through a project, program or portfolio and can be formal of informal. A common example for formal negotiations is when providers need to agree on a contract. On the other hand informal negotiations arise when discussions are made in order to resolve conflicts or to obtain internal resources. Negotiation skills are used in many areas of P3 management such as conflict management, contract management, requirements management and stakeholder management [apm.org.uk negotiation].

Project: negotiation skills should be applied from the project manager throughout the project life cycle. Even from the very first stages of a project, the project manager may need to balance the time, cost, quality and scope requirements of it and negotiate with the stakeholders. Following, the project manager will have to show again his negotiation skills to the potential recourse providers. When conflicts arise at the progress of the project, he will again show these skills in order to find appropriate solutions to them using formal or informal negotiations.
Program: there is a big variety of negotiation scenarios within a program and this is why the program manager should know whether negotiations should take place in the project phase or in the program phase. A program includes project outputs that demand change on business-as-usual, this is when negotiation solutions are needed. Program managers and program sponsors are the visible leadership of the program and need to become personally involved to achieve a successful conclusion.
Portfolio: this encompass the broadest range of negotiation scenarios.The only gradation from the portfolio is to the organisation’s managing board that must be fully committed to the portfolio’s strategic objectives and supportive in negotiations.

Types of negotiation

There are two main types of negotiation, the distributive negotiation and the integrative negotiation. The first one is also known as “win-lose” negotiations because each party's objective is to maximize its share of the resource being allocated. If the amount of resources is fixed, the only way one party can win is if the other party loses and it is not possible for both to “win” the distributive negotiation [number2].

On the other hand, integrative negotiation is known as win-win negotiation because the expanded list of items being negotiated makes it possible for each side to claim items that have value. The expanded list of items that is being negotiated makes it possible for each side to claim items of value from that side's perspective. This type of negotiation is divided in two stages, beginning with the collaborative problem-solving activity where the people who are involved in the negotiation attempt to identify additional items that could be added to the overall mix of items that are being negotiated aiming to expand the total potential value of the negotiation. This step is vital because as the procedure continues, if the first step is successfully completed both sides will feel like winners also in the second stage. This final stage has some similarities to the distributive negotiations, as it is time for the allocation process where decisions need to be taken.

According to Lewicki, Barry, and Saunders there is also a third type of negotiation that is called accommodative negotiation [..]. This is lose-win negotiations where the project manager has planed to lose on purpose, aiming to put the other party in a relationship to “win” in order to strengthen the long-term relationship and set the stage for future integrative negotiations.

https://www.pmi.org/learning/library/negotiate-success-element-communication-managers-6504 number2 Negotiation by Lewicki, Roy, Saunders, David, Barry, Bruce 6th (sixth) Edition [Paperback(2009)]

Negotiation roles for a PM

A Project manager needs to fulfill the following three negotiation roles:

Negotiator: this is the first an obvious role for the project manager. In this case the project manager is one the parties that is being involved in the negotiation process. All parties should be prepared on what attitude they will follow if a negotiation failure occurs.

https://www.pmi.org/learning/library/negotiate-success-element-communication-managers-6504 number3

Stages of negotiation

https://www.skillsyouneed.com/ips/negotiation.html