{"id":441,"date":"2009-10-21T18:29:28","date_gmt":"2009-10-22T01:29:28","guid":{"rendered":"http:\/\/journals.law.harvard.edu\/hnlr\/?p=441"},"modified":"2013-11-23T18:29:22","modified_gmt":"2013-11-24T01:29:22","slug":"addressing-power-differentials-in-negotiation-dont-let-em-push-you-around","status":"publish","type":"post","link":"https:\/\/journals.law.harvard.edu\/hnlr\/2009\/10\/addressing-power-differentials-in-negotiation-dont-let-em-push-you-around\/","title":{"rendered":"Power Differentials in Negotiation: Don’t Let ’em Push You Around"},"content":{"rendered":"

\"knight-queen\"By<\/em> Stephen Frenkel<\/p>\n

Participants in MWI\u2019s Collaborative Negotiation Trainings often ask how they should handle significant power differentials. <\/span>Most frequently, this question is asked by those who perceive themselves to be in a position of lower power. \u201cA collaborative approach is all well and good,\u201d they say, \u201cbut what happens when the other side doesn\u2019t need to buy into that approach because they have the upper hand?\u201d <\/span><\/p>\n

<\/span><\/p>\n

My first approach is to challenge them on the assumption that they have little or no power in their negotiations. Negotiators often see the \u201cgrass as greener on the other side\u201d and, in our experience (having worked with both sides of the table), we find negotiators most often buy into the false assumption that they are the more vulnerable party. <\/span><\/p>\n

<\/span><\/p>\n

It\u2019s essential to point out that, even if one party has less power by certain standards (resources, level of influence, etc.) they still have some<\/em> power which can be leveraged. When we consider that the entire purpose of a negotiation is to create and extract as much value as possible from the combined<\/em> experience or resources of all players, this becomes more apparent. After all, if either party could go it alone, why would they be negotiating with each other in the first place? They\u2019re negotiating because they need each other (or could at least see the possibility of benefiting from each other) in some form or fashion. In other words, they\u2019re already aware that the value that can be created between them is greater than the value they can create on their own. <\/span><\/p>\n

<\/span><\/p>\n

Our challenge is to make this understanding explicit. <\/span>We must confirm that both parties recognize the value of taking a collaborative approach to negotiating and, through this confirmation, incentivize them to continue conversations in a productive manner that enables both parties to benefit from the interaction. <\/span>We build our capacity to do this through systematic pre-negotiation preparation that takes the following into account:<\/span><\/p>\n

<\/span><\/p>\n

Effective preparation begins with an analysis of your and their Interests (i.e., their needs, concerns, goals, and fears). Define what\u2019s important to them and ask yourself – how does working with you meet those needs better than working with any of your competitors? Though many choose to focus on price, I\u2019d caution you against this. <\/span>Price wars tend to do little but drive down the bottom line for your entire industry and train your negotiating counterpart to threaten to walk so you\u2019ll give in. Rather, shift the focus to the other matters that are important to them: customer service, access, time to market, quality of product or services, payment terms, and other tangible or intangible aspects of the deal that make up the total value of the arrangement.<\/span><\/p>\n

<\/span><\/p>\n

It\u2019s vital to find out what\u2019s important to your counterpart and to articulate, however you can, how you meet those needs better than anyone else they might work with. <\/span>This is essentially your value proposition<\/em>. In this way, you make yourself as indispensable as possible and limit their power as they realize that they need you as much as you need them or that they benefit more from your involvement and contribution than from anyone else\u2019s. You\u2019re no longer a \u201ccommodity;\u201d you\u2019re a rare exception that brings more value to the partnership than anyone else in the field.<\/span><\/p>\n

<\/span><\/p>\n

Second, at the same time that you\u2019re articulating your value proposition to them and therefore limiting the attraction of their Alternatives (i.e. what they\u2019ll do to meet their needs if they don\u2019t come to agreement with you), you should be researching and improving your own Alternatives. Who else could you meet with and work with that would satisfy your Interests as well as your counterpart can? Unfortunately, in instances such as business development in which you\u2019re already pursuing other business regardless, Alternatives seem limited. <\/span>In these instances, you can\u2019t necessarily find a replacement (as you could in a negotiation over a car). <\/span>Admittedly, however, should you happen to win all other business pursuits, you become much less \u201cdesperate\u201d for theirs.<\/span><\/p>\n

<\/span><\/p>\n

Knowing how you define success, and what you\u2019d do if you don\u2019t reach agreement, can prepare you to walk away if the proposed outcome does not meet your needs. Furthermore, if they\u2019re pushing unfavorable terms (such as unreasonable risk or liability without appropriate rewards), knowing you have the Alternative of walking away and turning down business that\u2019s potentially harmful to you can be empowering in and of itself. <\/span><\/p>\n

<\/span><\/p>\n

This brings us to our third source of power in negotiation \u2013 Objective Standards. Objective Standards are benchmarks, industry norms, precedents, and other ways that negotiators determine if an idea or potential resolution is fair. <\/span>Researching Objective Standards and raising them at appropriate times can protect you from susceptibility to unreasonable requests. You should know what\u2019s fair \u2013 as determined not by you or your counterpart, but by others \u2013 your industry, laws, expert opinions, and other facts aren\u2019t capable of being manipulated by either you or your counterpart. Understanding what\u2019s fair and reasonable and having the capability to inform yourself and your counterpart on what\u2019s \u201creasonable\u201d is a source of power.<\/span><\/p>\n

<\/span><\/p>\n

In conjunction with the Objective Standards you raise, it\u2019s important to Communicate your level of Commitment and the consequences for them and for your Relationship should they try to coerce you to accept unfavorable terms. Help your counterpart take a long-term view, pointing out the short-term benefits of their taking advantage of their power as well as the long term consequences \u2013 which can include but are not limited to: a damaged relationship, your looking to extract value elsewhere in the process, both of you developing a damaged reputation for business in your industry, etc. It\u2019s important for your counterpart to realize that a bad deal for you is essentially a bad deal for them.<\/span><\/p>\n

<\/span><\/p>\n

Once it\u2019s clear that you\u2019re interested in a deal that\u2019s fair, reasonable, durable and sustainable, together you can generate the Options that satisfy both of your needs. Your success depends not only on your ability to prepare for the negotiation and to execute it effectively, but also on your ability to engage with your counterparts and to educate them on the value of taking a collaborative approach. <\/span>Securing a commitment from your counterpart to negotiate collaboratively is a critical first step in dealing with perceived power imbalances. <\/span>Negotiations should be viewed as an opportunity for sustained partnership generation and long-term value creation. <\/span>Failing to persuade your counterpart to negotiate collaboratively with you will result in outcomes that are based not on the strength of your combined ideas, but rather on who can exert more power over the other. <\/span>Whether either of you realize it at the time or not ,this results in multiple casualties over the long-term.<\/span><\/p>\n

\n

<\/em><\/p>\n

\n
\n
\n

Stephen Frenkel is the Director of Negotiation Programs at MWI, a negotiation training and consulting firm based in <\/em>Boston<\/em>, <\/em>Massachusetts<\/em>. Stephen can be reached at <\/em>sfrenkel@mwi.org<\/span><\/em><\/a> or at 800-348-4888 x24. More information about MWI can be found at <\/em>www.mwi.org\/negotiation<\/a><\/span><\/em>.<\/em> <\/span><\/p>\n<\/div>\n<\/div>\n

Originally published to HNLR Online on Oct. 21, 2009.<\/em><\/p>\n","protected":false},"excerpt":{"rendered":"

By Stephen Frenkel Participants in MWI\u2019s Collaborative Negotiation Trainings often ask how they should handle significant power differentials. Most frequently, this question is asked by those who perceive themselves to be in a position of lower power. \u201cA collaborative approach is all well and good,\u201d they say, \u201cbut what happens when the other side doesn\u2019t need to buy into that approach because they have the upper hand?\u201d My first approach is to challenge them on […]<\/p>\n","protected":false},"author":2,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"site-sidebar-layout":"default","site-content-layout":"","ast-site-content-layout":"default","site-content-style":"default","site-sidebar-style":"default","ast-global-header-display":"","ast-banner-title-visibility":"","ast-main-header-display":"","ast-hfb-above-header-display":"","ast-hfb-below-header-display":"","ast-hfb-mobile-header-display":"","site-post-title":"","ast-breadcrumbs-content":"","ast-featured-img":"","footer-sml-layout":"","ast-disable-related-posts":"","theme-transparent-header-meta":"","adv-header-id-meta":"","stick-header-meta":"","header-above-stick-meta":"","header-main-stick-meta":"","header-below-stick-meta":"","astra-migrate-meta-layouts":"default","ast-page-background-enabled":"default","ast-page-background-meta":{"desktop":{"background-color":"var(--ast-global-color-5)","background-image":"","background-repeat":"repeat","background-position":"center center","background-size":"auto","background-attachment":"scroll","background-type":"","background-media":"","overlay-type":"","overlay-color":"","overlay-opacity":"","overlay-gradient":""},"tablet":{"background-color":"","background-image":"","background-repeat":"repeat","background-position":"center center","background-size":"auto","background-attachment":"scroll","background-type":"","background-media":"","overlay-type":"","overlay-color":"","overlay-opacity":"","overlay-gradient":""},"mobile":{"background-color":"","background-image":"","background-repeat":"repeat","background-position":"center center","background-size":"auto","background-attachment":"scroll","background-type":"","background-media":"","overlay-type":"","overlay-color":"","overlay-opacity":"","overlay-gradient":""}},"ast-content-background-meta":{"desktop":{"background-color":"var(--ast-global-color-4)","background-image":"","background-repeat":"repeat","background-position":"center center","background-size":"auto","background-attachment":"scroll","background-type":"","background-media":"","overlay-type":"","overlay-color":"","overlay-opacity":"","overlay-gradient":""},"tablet":{"background-color":"var(--ast-global-color-4)","background-image":"","background-repeat":"repeat","background-position":"center center","background-size":"auto","background-attachment":"scroll","background-type":"","background-media":"","overlay-type":"","overlay-color":"","overlay-opacity":"","overlay-gradient":""},"mobile":{"background-color":"var(--ast-global-color-4)","background-image":"","background-repeat":"repeat","background-position":"center center","background-size":"auto","background-attachment":"scroll","background-type":"","background-media":"","overlay-type":"","overlay-color":"","overlay-opacity":"","overlay-gradient":""}},"jetpack_post_was_ever_published":false,"_jetpack_newsletter_access":"","_jetpack_dont_email_post_to_subs":false,"_jetpack_newsletter_tier_id":0,"_jetpack_memberships_contains_paywalled_content":false,"_jetpack_memberships_contains_paid_content":false,"footnotes":""},"categories":[38,42],"tags":[39],"class_list":["post-441","post","type-post","status-publish","format-standard","hentry","category-hnlr-online-article","category-negotiation","tag-hnlr-online-articles"],"jetpack_featured_media_url":"","jetpack_sharing_enabled":true,"jetpack_shortlink":"https:\/\/wp.me\/peZSkE-77","_links":{"self":[{"href":"https:\/\/journals.law.harvard.edu\/hnlr\/wp-json\/wp\/v2\/posts\/441","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/journals.law.harvard.edu\/hnlr\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/journals.law.harvard.edu\/hnlr\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/journals.law.harvard.edu\/hnlr\/wp-json\/wp\/v2\/users\/2"}],"replies":[{"embeddable":true,"href":"https:\/\/journals.law.harvard.edu\/hnlr\/wp-json\/wp\/v2\/comments?post=441"}],"version-history":[{"count":0,"href":"https:\/\/journals.law.harvard.edu\/hnlr\/wp-json\/wp\/v2\/posts\/441\/revisions"}],"wp:attachment":[{"href":"https:\/\/journals.law.harvard.edu\/hnlr\/wp-json\/wp\/v2\/media?parent=441"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/journals.law.harvard.edu\/hnlr\/wp-json\/wp\/v2\/categories?post=441"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/journals.law.harvard.edu\/hnlr\/wp-json\/wp\/v2\/tags?post=441"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}