Negotiation is a search for agreement, seeking acceptance, consensus and alignment of views. Negotiation in a project may take place on an informal basis throughout the project life cycle or on a formal basis such as during procurement and between signatories to a contract (APM Body of Knowledge, 2006: 110).
Negotiation involves conferring with others to come to terms with stakeholders or reach an agreement. In construction, negotiation occurs around many issues.
87
Modifications to the contract and negotiating the proposal costs are examples of negotiation (PMI, 2008: 11). The fundamental element of negotiation is to create an environment in which those who are in conflict may work together towards a resolution (Elder, 1994: 106). Wysocki (2007: 117) argues that negotiation is the process of resolving conflict in requirements and reaching agreement with the stakeholders. It is a persuasive process and is an important skill needed to manage projects successfully (Steyn, 2008: 266). The standard negotiable issues are for instance contracts, rates and deadlines (Morris, 2008: 232). Redmond and Gorse (in Emmitt & Gorse, 2007: 73) identify persuasion techniques that may be used during negotiation, which may give a positive result.
Negotiation is a process of bargaining aimed at reaching an agreement with project stakeholders to obtain specific resources, subcontractor prices, vendor delivery schedules, generating information and accomplishing tasks (Clements & Gido, 2012: 312).
Negotiation as a skill may come into play at various stages of the communication process during the construction project, and may be useful in making numerous agreements with parties.
Two methods of negotiation can be identified, namely soft or hard. Soft negotiations are friendly and make concessions readily to avoid conflict and the risk of spoiling future relationships. Hard negotiators take strong positions and try to win, even at the cost of relationships (Steyn, 2008: 266).
The following are negotiation strategies that may, according to Burke and Barron (2007: 301-102), be used to enhance the process of communication. If the project manager adopts a win-lose strategy it means the project manager is trying to win a negotiation against an opponent who loses; a winner takes it all strategy. It is a competitive bargaining approach where each party tries to capitalise on the other party‟s weaknesses. A win-win strategy entails a collaborative approach where each party, the project manager and the other party, are trying to achieve the best deal for both parties; a mutually agreeable solution. Information is openly shared between
88
parties and in order to improve understanding, honesty, and trust, it is important to make it possible to solve the differences. This enhances the development of a long- term work relationship. A lose-lose strategy occurs when the one party loses, making sure that the other party loses as well. It is a spiteful strategy, making unnecessary enemies and may be to the disadvantage of future negotiations.
If negotiation is not working and no agreement can be reached, stop talking and take a break, or use a neutral third party to solve the problem (Morris, 2008: 233). Steyn (2008: 226) suggests separating the people from the problem and focussing on the action.
The win-lose and win-win strategies may be the best strategies to use in the negotiation process. In the negotiation process, there are a few tactics to help the project manager to negotiate effectively, such as not offering too much at first, giving room to build in the negotiation process.
The negotiation process may consist of stages, such as the pre-negotiation planning, the actual negotiation and the post-negotiation analysis. The process is as important as the outcome. Project managers should be sensitive to human feelings and to the importance of maintaining good working relationships. Successful negotiations are based on basic principles that involve focusing on real issues, problems and common interests rather than on people, generating options that advance shared interests and then negotiating based on objective criteria (Steyn, 2008: 266).
If the differences with the other party cannot be resolved by negotiation, there are a number of dispute resolution processes to consider, such as arbitration, mediation and conciliation (Burke & Barron, 2007: 305).
The strategy that is applied as a tactic, may give the project manager an advantage during the negotiation with the parties involved, if the correct process is used.
The sequence of events for negotiation is to start with setting the correct climate and willingness to participate by the parties involved, analysing the images and collecting
89
the information, then defining the problem and sharing the information with the parties involved. This is followed by setting appropriate priorities, organising the group and start to solve the problem by obtaining involvement, developing action plans by getting commitments, implementing the work by taking action and finally, doing follow-ups to obtain feedback on the implementation of the action plan (Kerzner, 2009: 303-304).
Burke and Barron (2007: 301, 103) state that, to be a successful project manager, negotiation techniques must be developed and used to achieve the best deals with functional managers, clients and suppliers. As the project coordinator gains respect from the functional managers, the project coordinator can start to negotiate project staffing, schedules and changes of plans with the functional departments.
To enhance communication, negotiation skills might be required from the construction project manager, to be aware of the logical steps and sequence of events that should be taken into consideration during the negotiation process.
It is important that the construction project manager communicates successfully and apply negotiation by using the most effective strategy thereby, according to the process and as communicator, solve problems and negotiate to the advantage of the project and the stakeholders.