Introduction
Projects relating to constructions and contracts have greatly increased and are now recognized in the UAE over the past years. This has significantly given rise to great numbers of claims either between contractors and employers or even between contractors and sub-contractors (Hinchey and Schor 2002, 63).
These disagreements are mostly solved by conciliation or arbitration and are predominantly held in the universal language which is English, where specialist arbitrators are appointed due to the nature of the subjects involved (Ren 2011, 123).
Assessments of UAE situation and the negotiations in the construction industries
Negotiation is another important mechanism for arranging construction contracts in the construction industry. Project managers may often find themselves as participants in negotiations, either as principal negotiators or as expert advisors. These negotiations may be complicated and often present important opportunities and risks for the various parties involved.
For example, negotiation on work contracts could involve issues such as completion date, arbitration procedures, special work item compensation, contingency allowances as well as the overall price (Essam 2006, 453). However, exogenous factors such as the history of a contractor and the general economic climate in the construction industry will determine the results of negotiations.
The skill of a negotiator can affect the possibility of reaching an agreement, the profitability of the project, and the scope of any eventual disputes, and the possibility for additional work among the participants. Therefore, negotiations are an important task for many project managers.
However, even after a contract is awarded on the basis of competitive bidding, there are many occasions in which subsequent negotiations are required as conditions change over time (Fleming 2003, 13; Harmon 2004, 47).
Poor negotiating strategies adopted by one or the other party may also preclude an agreement even with the existence of a feasible agreement range.
For example, one party may be so demanding that the other party may simply decide to break off the negotiations. In this effect, negotiations are not a well behaved solution methodology for the resolution of disputes (Kumaraswamy and Chang 1998, 12; Al-Khalil and Al-Ghafly 1999, 647).
Therefore, the possibility of negotiating failures in the land sale example highlights the importance of negotiating style and strategy with respect to revealing information.
Style includes the extent to which negotiators are willing to seem reasonable, the type of arguments chosen, the forcefulness of language used, etc. Clearly, different negotiating styles can be more or less effective in one way or another.
Cultural factors are also extremely important and play a major role in negotiation processes. American and Japanese negotiating styles are very different (Cheung, Yiu and Yeung 2006, 132). For example, Revealing information is also considered as a negotiating decision.
In the land sale case, some negotiators would readily reveal their reserve or constraint prices, whereas others would conceal as much information as possible or provide misleading information (Groton 1997, 76; Kumarasamy 1998, 56).
Due to these problems, it is often beneficial to all parties to adopt objective standards in determining appropriate contract provisions. These standards would help in coming up with an agreement or a method to arrive at appropriate values in a negotiation (Ho and Liu 2004, 95; Scott 1993, 143).
When it comes to additional issues, negotiations may become more complicated both in procedure and in result. The sequence in which issues are defined or considered can be very important. Negotiations, for example, may proceed on an issue-by-issue basis, and the outcome may depend upon the exact sequence of issues considered.
Alternatively, the parties may decide to proceed by proposing complete agreement packages and then proceed to compare packages. When it comes to the outcomes, the possibility of the parties having different valuations or weights on particular issues may arise. When this happens, it is possible to trade-off the outcomes on different issues to the benefit of both parties (Brams and Lerner 1996, 59).
Key questions
Questions that are frequently asked are:
- What do you do in order to have a successful negotiation?
- What ways do you use to negotiate in the UAE construction industry?
- What types of negotiations that mostly occur in UAE construction industry?
- Have these negotiations ever occurred in the past or is this the first time they are happening?
- How have negotiations among contactors affected employer or the employee relationship in UAE construction industries?
The Literature review
This study reviews the pertinent literature on the subject of negotiations in order to attain the objectives; a thorough review is to be conducted by the use of books, referring to the journals on how disputes among contractors were solved in the past years and also by looking at conference papers to get information and find a solution to these negotiations (Kangari 1995, 65).
According to Fleming (2003, 21), the most important items to consider in ADR include; the factors that currently impede the efficient, productive, timely and cost effective performance of projects, source of disputes and practical strategies to avoid disagreements or reduce the impact of disputes in negotiation, general degree of the direct and indirect costs of disputes to clients, contractors, other industry stakeholders and the community, primary principles of conflict management in the context of commercial disputes and practical dispute resolution strategies for facilitating the equitable, certain, amicable, timely and cost effective resolution of disputes (El- Sayegh 2006, 1169).
Main reasons for study and analysis
Coming up with an analyzed alternative on negotiating methods in construction industry in the United Arab Emirates so as to identify and analyze projects in which various ADR methods were used, to analyze the responses from questionnaires and interviews, to recommend compatible methods and further research and to conduct interviews with the selected representatives (Harmon 2004, 47).
Interviews involving construction professionals
Questionnaires are prepared and distributed to contractors and their employees to fill in information about their disagreements, the main causes of these negotiations and their recommendations about these negotiations and what they think should be done to avoid these disagreements in the UAE industries.
Writing research reports
When writing research reports on negotiation in the construction industry is the main source of concern for anyone concerned with the construction process (Essex 1996, 67).Negotiation, mediation and arbitration remained the main methods for resolving the disputes but new techniques were being explored.
When writing a research report inquires the introduction, background of the study, methodology, data analysis, and the conclusion. The construction industry has greatly increased in complexity over the past decades (Essex 1996, 76).
A Proposed structure of dissertation
Introduction
This chapter talks about the construction industry in UAE and how the contractors manage to solve their disputes, talk about the construction projects and how they have increased or decreased in the last decade, introduce any complaints made by contractors or owners and employers or between contractors and sub- contractors and how they solve their disputes and lastly introduce future plans of the construction industry.
An overview of negotiations
This chapter will talk about:
- Negotiating method.
- Negotiations in the UAE construction industries.
- Institutional and legal framework for negotiating in the UAE construction industries.
- The UAE construction industries.
Negotiating methods
This chapter talks about the different types of negotiations that are there in a construction industry and these are; domestic or family, personal injuries, workers compensation, construction, bankruptcy, employee benefits and many more negotiations that arise in the UAE construction industry from the information you get from the employees through the questionnaires.
It examines the relationship between negotiating when it comes to contracts. It will demonstrate the negotiating processes and how they have affected the employees and the employer’s relationship in the construction industry.
The main causes of negotiation in the UAE construction industry
This chapter talks about the main causes of misunderstandings, lack of communication, delay in delivery of materials, shortage of labor, financial difficulties by contractors, poor site management, slowness in decision making by client and many more causes as stated by contractors in the questionnaires.
Ways of negotiating
This chapter talks about all the methods used in negotiation in contraction disputes for example, mediation, conciliation, and arbitration and dispute resolution boards.
Conclusion
It focuses on conclusions of the study according to the information that was got from the questionnaires that were distributed to the contractors and employees of the UAE contraction companies.
References
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