Commercial Project Negotiation: Importance of Stakeholder Involvement

This article discusses the importance of stakeholder involvement in commercial project negotiation. It covers the impact of communication, conflicting agendas, and vague objectives on project success. The article provides evidence from the Queensland Health project failure and highlights the role of suitable ICT models and project management tools in facilitating negotiations with stakeholders.

Running head: COMMERCIAL PROJECT NEGOTATION
COMMERCIAL PROJECT NEGOTATION
Name of the student
Name of the university
Author note

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1. Introduction
Negotiation plays a major role in maintaining the efficacy of the projects through
assurance of active involvement of the relevant stakeholders. Establishment of effective
communication channels with the stakeholders helps the project management team in enhancing
the performance of the same. The discussion will be emphasizing on the complex government
and non-government project contractual arrangements. It will also illustrate the manner in which
the persuasion and negotiations with the chief stakeholders through agreements and contracts
helps in the successful implementation of projects.
2. Discussion of each learning outcome with evidence
LO1
Summary
The classification of the different roles that are required to be played by the stakeholders
through the contracts helps in the smooth functioning of the project. The complex project
agreements outlines the scopes, costs, scheduling and the different other aspects of the project
which helps in making the stakeholders aware of the different roles that might be played by the
same. The complexity of the project design is simplified by the implementation of suitable
Information and communications technology (ICT) which assists the project management teams
in maintaining the efficacy of negotiations with the relevant stakeholders (Srivastava and Teo
2012).

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Evidence
Queensland Health, the public sector health care provider of Queensland aimed at
implementing Shared Services Initiative (SSI) in place of LATTICE and ESP (Environment for
Scheduling Personnel) in order to roster and payoff their employees. Nevertheless, lack of proper
coordination between the chief stakeholders IBM and CorpTech, the project failed through cost
and schedule overruns (Eden and Sedera 2014).
LO2
Summary
The interests of the stakeholders play a major role in the execution of the project as per
the outline. Conflicting agendas affect the involvement of the stakeholders in the projects that are
planned by the businesses. Too and Weaver (2014) stated that persuasion is one of the driving
factors that influence the engagement of the stakeholders in the different project contexts.
However, Eriksson (2013) stated that the involvement of the stakeholders is affected through
different conflicting agendas which might result to cost and schedule overruns in the project.
Evidence
IBM and CorpTech faced conflicting interest in the context of Queensland Health
project failure. The vague objectives of the organization and the unclear definitions of job
responsibilities resulted to the conflicts resulting to deliberate issues in the project execution
(Eden and Sedera 2014).

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LO3
Summary
The implementation of suitable ICT models in the project helps the managers to
encourage the involvement of the relevant stakeholders. The active involvement of the relevant
stakeholders in the project helps in undertaking the smooth functioning of the tasks and thereby
preventing cost and schedule overruns (Too and Weaver 2014). However, undertaking suitable
communication assists the project managers in understanding the issues that are faced by the
stakeholders and thereby mitigate the conflicts for supporting the stakeholders interests. It helps
the project managers in undertaking suitable functioning of the project.
Evidence
Lack of proper communicational models affected Queensland Health project as it
resulted to an intense communication gap between the stakeholders. It affected coordination
among the stakeholders that resulted to poor performance of the project models. The resultant of
the lack was portrayed through the issues that were faced by the organization while
implementing the automated payroll systems in the business applications.
LO4
Summary
Vague objectives of projects affect the capability of the project managers in allocating
different resources as per the capabilities of the organizations. However, it also helped the

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managers in defining the job roles to the relevant stakeholders. Lack of clarity in the defined
objectives affects the involvement of the stakeholders in the processes (Guo et al. 2014). The
application of different technologies is also based on the clarity of the objectives that are set by
the project management team. The vague objectives of projects create an impact on the
communicability of the organization with the chief stakeholders that might result to lack of
involvement of the same in the different pre- designed processes.
Evidence
The vague objectives of the Queensland Health project affected the suitable definition of
roles and responsibilities to the chief stakeholders- IBM and CorpTech. It has affected the
project parameters and thereby resulted to the failure of the project (Eden and Sedera 2014).
LO5
Summary
Project delays are specifically based on different factors relating to miscommunication
within the stakeholders and ill- definition of the responsibilities. However, the lack of proper
project planning affects the smooth functioning of the project due to misstatements. The project
delays due to cost and schedule overruns might result to the failure of the project to achieve the
objective. However, Lahdenperä (2012) stated that the choice of methodologies play a major role
in identifying the success of the project design. The utilization of waterfall methodology restricts
the dynamic changes in the project design in different stages. The rigidity of the structure affects
the disruptions in the project design, which affects the proper functioning of the project as per
the changing situations. It affects the outcome of the project vividly as the management is unable
to change the cost and schedule structure. Contract entitlements and arbitration helps in

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establishing suitable relations with the stakeholders, which helps the managers in undertaking an
effective project (Lloyd-Walker and Walker 2015).
Evidence
The project that was undertaken by Queensland Health was affected by the cost and
schedule overruns due to miscommunication and lack of proper definition of job roles to the
relevant stakeholders. However, the vague objective of the project has affected the agreement
that was held by the project manager with the stakeholders- IBM and Corptech respectively. It
affected the proper functioning of the stakeholders as per the requirements of the organization
(Eden and Sedera 2014).
LO6
Summary
The utilization of Proofhub and Basecamp assists the managers in assigning different
roles of the stakeholders and thereby create a platform of continuous discussion on the project. It
has helped the managers in facilitating continuous interactions with the relevant stakeholders,
which will be helping the managers in resolving the conflicts. The key changes in the
organizational capabilities are based on the functioning of the systems as per the objectives of
the project initiations (Doloi 2012). However, the application of the different tools will be
helping the project managers in undertaking negotiated solutions to the issues that are faced by
the stakeholders and thereby facilitate the smooth functioning of the project.
Evidence

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Lack of suitable utilization of project management tools in the context of the Queensland
Health project has affected the proper functioning of the systems of the business while operating
on the diverse objectives. However, the lack of suitable project management tools affected the
coordinated approach of the stakeholders as per the project requirements.
3. Conclusion
Therefore, from the above analysis it might be stated that negotiation and communication
with the chief stakeholders helps the project managers in allocating the diverse roles as per the
priority of the tasks. Understanding the needs and concerns of the stakeholders will b assisting
the project managers in undertaking suitable negotiations with the same, which will help in
preventing cost and schedule overruns.

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References
Doloi, H., 2012. Cost overruns and failure in project management: Understanding the roles of
key stakeholders in construction projects. Journal of construction engineering and
management, 139(3), pp.267-279.
Eden, R. and Sedera, D., 2014. The largest admitted IT project failure in the Southern
Hemisphere: a teaching case. In Proceedings of the 35th International Conference on
Information Systems: Building a Better World Through Information Systems. AISeL.
Eriksson, P.E., 2013. Exploration and exploitation in project-based organizations: Development
and diffusion of knowledge at different organizational levels in construction
companies. International Journal of Project Management, 31(3), pp.333-341.
Guo, F., Chang-Richards, Y., Wilkinson, S. and Li, T.C., 2014. Effects of project governance
structures on the management of risks in major infrastructure projects: A comparative
analysis. International Journal of Project Management, 32(5), pp.815-826.
Lahdenperä, P., 2012. Making sense of the multi-party contractual arrangements of project
partnering, project alliancing and integrated project delivery. Construction Management and
Economics, 30(1), pp.57-79.
Lloyd-Walker, B. and Walker, D., 2015, April. Collaborative project procurement arrangements.
Project Management Institute.
Srivastava, S.C. and Teo, T.S., 2012. Contract performance in offshore systems development:
Role of control mechanisms. Journal of Management Information Systems, 29(1), pp.115-158.

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Too, E.G. and Weaver, P., 2014. The management of project management: A conceptual
framework for project governance. International Journal of Project Management, 32(8),
pp.1382-1394.