Project negotiation analysis

Although it is widely admitted that the client and contractor face significant difficulties in negotiating major projects, project negotiations have not attracted much attention in the academia. Negotiations have not been studied very systematically in the project context, research lacks a common abstraction of the subject and there exists a serious gap in knowledge, for instance as to what frames of thought can assist project practitioners in crafting better agreements. This study proposes a systematic, logically consistent and theoretically well-founded approach to the study of project negotiations. The basic idea of the approach is to embrace both the buyer and seller perspectives in a single continuum of recurring negotiations, oriented around the zone of possible agreement. Evidence for the validity and relevance of the approach is developed through an empirical inquiry into the negotiations surrounding the construction of a World Trade Center complex. The results of the study suggest that the approach allows documentation and communication of descriptive and explanatory insights from past project negotiations, including profound efficiency and fairness considerations. Finally, as the next logical step on the research agenda and an attractive venue for future research, the study proposes to expand the scope of application to prescriptive uses, i.e., the development of advice to project practitioners in on-going negotiations.