Win-win settlement : applicability of negotiation principles for dispute negotiations in construction projects

Abstract

Negotiation is identified as most appropriate dispute resolution mechanism for achieve settlement to construction disputes. As well as, negotiation is the most preferred dispute resolution mechanism selected by parties to construction contracts. However, it is experienced that parties continuously failing to reach settlements in an effective and efficient manner. Although many researches and authors write on how to carryout negotiations successfully those concepts hardly adopted in claims based dispute negotiations in construction projects. Construction dispute negotiations are different to other business negotiations due to some unique features inherited such as complexity, regulated by very sophisticatedly prepared conditions of contract, and tendency of discouraging claims. Therefore, it is identified that new theories and principles need to be developed and applied in claims based dispute negotiations. Thus, the study was focused on improvement of fundamental principles of negotiation to address characteristics of claim based disputes in construction projects. The study was approached through a multiple case study and in-depth study was carried out on two selected cases which claims based dispute negotiation successfully concluded. Success factors of claims based dispute negotiation identified through literature review compared with actual setting of selected cases. Further, identified how parties have addressed special characteristics of claims based disputes in construction projects in conducting negotiations. Analysis reveals that, how far theory can be explained through research findings and which theory should be extended based on knowledge explored in respect of claims based dispute negotiation in construction projects. Accordingly conceptual framework has developed and it is concluded that the negotiation process shall be merged with characteristics of construction disputes in order to achieve win-win settlement through negotiation. Major deviation from existing theory when applying to claims based dispute negotiation is negotiation shall be based on both position and interest of the parties.