What sources of power in negotiation do you think are especially important when it comes to getting what you want and building a fruitful long-term business partnership?
Having abundant material resources is one common source of power in negotiation. So is having high status in an organization. One of the most important measures of power is a negotiator’s BATNA, or best alternative to a negotiated agreement—the ability to walk away from a disappointing offer, secure in the knowledge that you can get what you want somewhere else. A strong BATNA can be as simple as having two good job offers rather than one, or knowing you can get a better price for a similar used car down the block.
For decades, negotiation researchers have been examining how parties can increase their bargaining power and what they can do with that power once they have it. The results of two studies on power in negotiation offer useful advice to business negotiators.
More Power, Worse Results?
Interestingly, when one party is more powerful than the other in a negotiation, that knowledge leads negotiators to reach less efficient outcomes than they would if they did not know about the power asymmetry, researchers Ricky S. Wong (Hang Seng University of Hong Kong) and Susan Howard (London School of Economics and Political Science) find in a study published in Group Decision and Negotiation.
This happens because of the way more powerful parties react to the knowledge that they’re more powerful, the researchers found. Specifically, when people know they have the most power in a negotiation, they focus more on claiming value for themselves than on creating value for all the parties involved. They also reach less accurate determinations of the other party’s preferences than when they’re unaware of their power advantage. And those who know they have more power also share less information about their own preferences.
In addition, when negotiators know they’re the more powerful party, they tend to believe that a fair agreement should reflect their power advantage. By contrast, weaker negotiators tend to favor equal outcomes. These are all barriers to brainstorming, creative problem solving, and other value-creating behaviors that can expand the size of the pie for all.
The results of Wong and Howard’s study serve as a reminder to all of us that when we know we have power in a negotiation, we have to be especially vigilant about focusing on meeting both parties’ needs—and avoid falling back on win-lose thinking.
Getting the Powerful to the Bargaining Table
When two groups are embroiled in a conflict, it’s common for the party with less power to have difficulty convincing the more powerful party to sit down at the negotiating table. In such cases, the more powerful player is likely to resist the notion of shaking up the status quo—and thus avoid negotiating altogether.
This tendency can be a particular problem in international negotiation, particularly those involving a protracted conflict.
In their research, Nour Kteily of Northwestern University and his colleagues found that low-power groups may be able to persuade powerful parties to engage with them through careful framing of the proposed negotiating agenda. Specifically, across four experiments, participants in the high-power position were more willing to negotiate when a low-power group proposed negotiating less important issues before more significant areas of disagreement, rather than vice versa. This preference is the opposite of what low-power parties prefer, the researchers learned.
Power in Negotiation: Setting the Agenda
In one of the experiments, both Palestinian participants living in the West Bank and Jewish-Israeli participants judged the Jewish Israelis to be the more powerful party in their relationship. Participants in each group were presented with a hypothetical negotiating agenda from a delegation of the other group. The Palestinian participants were more willing to negotiate when the Israeli side suggested discussing the most significant and difficult issues first. Israelis, by contrast, were more open to negotiation when the agenda proposed by the Palestinians began with less contentious issues.
In the experiments, low-power disputants believed that when a more powerful would-be counterpart proposed an agenda that opened with easier issues, the more powerful party was attempting to stall change. By contrast, high-power disputants were threatened by proposed agendas that suggested less powerful parties would try to alter the status quo right from the start.
What does this mean for negotiators who are eager to engage with a counterpart who appears to have more power? To bring powerful negotiating groups to the bargaining table, you might propose an agenda that starts with minor issues. When negotiations begin, however, you would be wise to incorporate discussion of more consequential problems, to the extent possible. That’s because parties are more likely to create new forms of value for both parties when they discuss multiple issues simultaneously, rather than attempting to resolve them one at a time.
What other strategies related to power in negotiation have you found to be useful?