Negotiation is a strategic discussion that involves two or more parties with the goal of reaching a mutually acceptable agreement. In project management, it is a fundamental communication skill used to resolve disputes, agree on contracts, define scope, and secure resources.
Key Aspects of Negotiation
- Preparation is Crucial – Effective negotiation requires understanding your goals, the other party’s potential goals, and your Best Alternative to a Negotiated Agreement (BATNA).
- Focus on Interests, Not Positions – Aims to uncover the underlying needs (“why”) behind the stated wants (“what”) to find more creative and satisfying solutions.
- Objective Criteria – Uses fair standards and objective data to support your position and evaluate options.
- Separates People from the Problem – Focuses on the issue at hand while maintaining a professional and respectful relationship with the other party.
- Aims for Agreement – The primary objective is to conclude the discussion with a clear, workable agreement.
Two Main Negotiation Styles
| Style | Alternate Name | Outcome | Description |
|---|---|---|---|
| Distributive Negotiation | Haggling / Zero-Sum | Win-Lose | Views the negotiation as a “fixed pie” where one party’s gain is the other’s loss. It is often competitive and focuses on a single issue, like price. |
| Integrative Negotiation | Principled / Collaborative | Win-Win | Views the negotiation as an opportunity to “expand the pie.” It is collaborative and focuses on finding creative solutions that satisfy the interests of all parties. |
Example Scenarios
Procurement Management
A project manager negotiates with a vendor to finalize a contract. They use an integrative approach, agreeing to a slightly higher price (a win for the vendor) in exchange for an earlier delivery date and extended support (a win for the project).
Resource Management
The project manager negotiates with a functional manager to get access to a key engineer. The functional manager is concerned about their own department’s deadlines. They agree that the engineer will be allocated to the project for 50% of their time for the next three months.
Conflict Resolution
Two team members are in conflict over the project’s technical direction. The project manager acts as a facilitator, helping them negotiate a hybrid solution that incorporates the best elements of both of their proposed approaches.
Why Negotiation Matters
- Secures Project Resources – Essential for acquiring the people, funding, and materials needed for the project.
- Manages Stakeholder Expectations – Helps align stakeholders and the project team on scope, schedule, and budget.
- Resolves Conflict Constructively – Provides a structured way to resolve disagreements without damaging relationships.
- Achieves Favorable Outcomes – A skilled negotiator can achieve better contract terms, more realistic deadlines, and stronger commitments.
See also: Conflict Resolution, BATNA, Stakeholder Management, Procurement Management.