The power in negotiations

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Negotiations happen in organizations, for example in job offers (which many of you might get soon) or between organizations, like the I-merger stimulation we had. Most often, these negotiations happen between two parties who hold different power relations. However, whether power affects these negotiations depends on which strategy is taken.

Structural approach to negotiations and it limitations

If you subscribe to the idea of “the one who has more power will win”, you are taking the structural approach to negotiation theory (Alfredson & Cungu, 2008). Power here can come from French and Raven’s five power bases: legitimate/positional power, coercive power, reward power, expert power and referent power.

Your potential boss during job offers has legitimate, reward and coercive power, he or she is of a higher authority and can be seen as having more resources than you. He/she also has ability to provide or take away potential benefits (vacation days, salary etc.). Similarly, smaller organizations in negotiations have less actual power because they have fewer resources and not as much financial capital as compared to their bigger counterparts.

The theory thus predicts that the strongest will always get what they want (in this case potential bosses/ bigger organizations) and win at the expense of the weaker party, but this of course is not always true. This theory focuses too much on hard power, and does not take into account other types of power like negotiating skills, alternatives and tactics that could be wielded by a weaker party (Alfredson & Cungu, 2008). There have been findings that show such power like resource power has no direct relationship with negotiated outcomes, and asymmetrical negotiations do not always lead to the strong exploiting the weak (Rubin & Zartman, 1995).

What can the weaker party do?

1)      Using tactics, like coercion, opening strong and even anchoring effects (aiming higher and then negotiating downwards) (Ashong, 2011). However, some of these tactics may not be recommended or effective, especially coercion (using force or threats on people is generally not a good idea).

2)      Using the other power bases, like expert power, referent power or informational power. These other sources of power are available to weaker parties since they are not fixed. One can always increase their expert and informational power (knowledge is power!), or work on their referent power to create bonds to facilitate the negotiation (Lewicki, Saunders, & Barry, 2010).

3)¬†¬†¬†¬†¬† Using alternatives, specifically the Best Alternative to a Negotiated Agreement (BATNA). As the name implies, BATNA is simply the best alternative one has in case the current negotiation does not work out, and it is one of the biggest power source for negotiators. Knowledge about everyone’s best alternatives before and during negotiations can be important, because a BATNA can be used in favour of a weaker party. For example, another job offering $3000 starting pay can be your BATNA, and the current negotiation should not be below this. A strong party can have weak BATNAs (e.g. few job candidates to choose from), rendering the strength of the party irrelevant. Knowing your own BATNA allows you a clear knowledge of what you can negotiate with and avoid mistakenly giving in to the stronger party without realising there are better alternatives, or even wrongly rejecting offers from them too (Alfredson & Cungu, 2008).

Power in negotiations does not have to be about actual power, but also perceived power, and these power relationships can change over time as well. The stronger party’s initial power may not hold out during negotiations if the weaker party uses tactics and alternatives to change their power status.

Pushing power aside

Sometimes stressing power isn’t the best for negotiations. While structural approaches are win-lose situations, integrative approaches are win-win situations. There are 4 steps to an integrative approach (Lewicki, Saunders, & Barry, 2010).

  1. Identify and define the problem
  2. Understand the problem and bring interests and needs to the surface
  3. Generate alternative solutions to the problem
  4. Evaluate those alternatives and select among them

Here the concern is not about power, but they stress working together, sharing information and creating more value for both parties (Alfredson & Cungu, 2008). I learnt about this approach during another module, where we did the ‘New Recruit’ negotiation exercise. The goal of the exercise was to get as many points as possible during a negotiation between you and another person (it’s a bit lengthy to explain, so I highly recommend trying it out/ reading about it!).

 

Although the integrative approach can create value for both parties (regardless of power), it might not work all the time. It needs cooperation, effort and time. These factors may not be present in all negotiations, which is why sometimes power still plays an important role.

 

P.s. Thanks Prof for your helpful and fast emails!
References:

Alfredson, T., & Cungu, A. (2008, January). Negotiation Theory and Practice A Review of the Literature . Retrieved from EASYPol : http://www.fao.org/docs/up/easypol/550/4-5_negotiation_background_paper_179en.pdf

Ashong, M. (2011). The Hidden Strength of a Seemingly Weaker Party: How Negotiators from Developing Countries can learn from the Negotiation between MCC and KJH. CEPMLP Annual Review.

Kellermann, K. (n.d.). Power is the essense of negotiation. Retrieved from ComCon Kathy Kellermann Communication Consulting: http://www.kkcomcon.com/doc/KPower.pdf

Lewicki, J. R., Saunders, D. M., & Barry, B. (2010). Essentials of Negotiation. McGraw-Hill.

Rubin, Z. J., & Zartman, I. W. (1995). Asymmetrical Negotiations: Some Survey Results that may Surprise. Negotiation Journal, 349-364.

 

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