2. Why Is Power Important to Negotiators?
Seeking power in negotiation arises from one of two
perceptions:
1. The negotiator believes he or she currently has less
power than the other party.
2. The negotiator believes he or she needs more power
than the other party.
Can the party with less power ever be at an advantage?
3. A Definition of Power
• “an actor…has power in a given situation (situational power)
to the degree that he can satisfy the purposes (goals,
desires, or wants) that he is attempting to fulfill in that
situation”
• Two perspectives on power:
– Power used to dominate and control the other– “power
over”
– Power used to work together with the other–“power with”
4. SOURCES OF POWER
• Information and expert power
– BATNA is most important weapon.
– Stress your expert power
• Legitimate power: authority, reputation,
performance
• Location in the structure: centrality,
criticality & relevance, flexibility, visibility
• Personal power: attractiveness &
friendliness, integrity, patience & tenacity,
emotion
5. • 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.
6. What Is a Best Alternative to a
Negotiated Agreement (BATNA)?
• A best alternative to a negotiated agreement
(BATNA) is a course of action that a party
engaged in negotiations has determined
should be taken if talks fail and no agreement
can be reached.
• BATNA, developed by Harvard University
negotiation experts Roger Fisher and William
Ury
• It is an exercise that helps you
determine what you’re aiming for in a
given scenario and how to leverage the
next-best thing (in case your number-
one wish doesn’t work out).
7. In the case of salary negotiation, knowing your
BATNA ahead of time will help you to:
• Determine your ideal salary and prepare to
make the ask.
• Decide what you’d be willing to accept (or
what you can work with) if your ideal situation
doesn’t pan out.
• Resist settling for something less desirable
than your bottom line.
8. Know your bottom line
• After you’ve done your research and decided
on your ideal salary, it’s time to consider your
bottom line.
• This is the absolute lowest amount you would
be willing to accept.
• To help you arrive at a value, take into account
factors such as:
• Commute. If you have considerable travel
time and there is no pre-tax transportation
program in place, consider what your
commuting costs would include.
9. Know your bottom line
• Cost of living. Even though you’re pursuing a
social-impact role, it’s okay to consider your
financial obligations and to push for a higher
number if you think you’re worth it.
• Prior salary. While there are instances when
a pay cut may be worth it—if you’re a sector-
switcher and moving into an entry level role,
for example—keep your salary history in mind
as you finalize your figure.
10. • This means that if a hiring manager gives a certain
amount as the highest he/she can offer, but it’s
actually lower than your baseline, you could
reiterate your ideal salary and say, “I really do feel
that Rs.X amount is more appropriate given my
skill level and the value I’ll bring to the position
and organization.
• Can we work toward getting closer to that
number?”
11. 6 Bargaining Tips and BATNA
Essentials
1. Two (or More) BATNAs Are Better than
One.
• You may think you’ve identified a strong
BATNA, but keep in mind that it’s subject to
change.
• For example, you may have a good job offer in
your back pocket, but what if the person who
offered it leaves the firm?
12. 2. Don’t Reveal a Weak BATNA:
• No matter how hard you try to develop a
strong BATNA, you may be unable to do so.
• For instance, maybe you can’t find a job that
seems half as appealing as the one you’re
negotiating for.
• In such cases, be careful not to reveal a weak
BATNA your counterpart,
13. 3. Don’t Let Them Diminish Your BATNA
• If your counterpart does have a sense of your
BATNA, don’t be surprised if he tries to diminish
its value, even if it’s very strong.
• For example, if a recruiter finds out that you have
an offer from a rival firm, he might disparage the
firm in an attempt to make your BATNA less
appealing to you and get you to agree to a deal.
• Remember that your counterpart has a vested
interest in seeing you think poorly of your
BATNA—and don’t fall for such tricks.
14. 4. Research the Other Party’s BATNA.
• In negotiation, your knowledge of your own
BATNA will only take you so far; you should also
try to identify your counterpart’s BATNA.
• For example, research hiring trends in your field to
get a general sense of whether a firm is likely to
have lots of good candidates or very few.
• Any connections you have at the hiring firm might
also help you identify the firm’s BATNA.
• Of course, you can also ask the recruiter directly
how many candidates the firm is considering, but
expect her to exaggerate the strength of the firm’s
BATNA.
15. 5. Assess “Two-level” BATNA
• Keep in mind that in most business
negotiations, you face two counterparts:
• the person seated across the table from you
and the organization he or she represents.
• An organization may want its recruiter to
conduct an exhaustive search for the best
candidate for a position, but the recruiter may
be motivated to hire someone before he goes
on vacation in a week.
• For this reason, it’s important to think about the
incentives of the person across the table,
including how the person is compensated and
his or her long-term goals.
16. 6. Beware a Sense of Entitlement. It’s smart
to invest time and resources in developing a
strong BATNA, but that investment can have a
dark side
• When negotiators work hard to cultivate good
alternatives, they may feel as if they wasted
their time and money if they don’t have to
turn to their BATNA.
• “This perceived loss creates a desire for a
counterbalancing gain,” according to Gino.
• Negotiators who forego a strong BATNA tend
to feel a sense of entitlement that can lead
them to have high aspirations—and it can also
lead them to engage in unethical behavior,
such as lying or misrepresenting information
to their counterpart
17. SOURCES OF POWER
• Information and expert power
– BATNA is most important weapon.
– Stress your expert power
• Legitimate power: authority, reputation,
performance
• Location in the structure: centrality,
criticality & relevance, flexibility, visibility
• Personal power: attractiveness &
friendliness, integrity, patience & tenacity,
emotion
• Resource control: What would these
include?
18. Power Based on
Resource Control
• Some of the most important resources:
– Money
– Supplies
– Human capital
– Time
– Equipment
– Critical services
– Interpersonal support
19. Power Based on
Position in an Organization
Two major sources of power in an organization:
• Legitimate power which is grounded in the title, duties, and
responsibilities of a job description and “level” within an
organization hierarchy
• Power based on the control of resources associated with that
position
20. Power Based on Relationships
• Goal interdependence
– How parties view their goals
• Referent power
– Based on an appeal to common experiences, common past,
common fate, or membership in the same groups.
• Networks
– Power is derived from whatever flows through that particular
location in the structure (usually information and resources)
21. Power Based on Relationships
• Key aspects of networks:
– Tie strength
• An indication of the strength or quality of relationships with others
– Tie content
• The resource that passes along the tie with the other person
– Network structure
• The overall set of relationships within a social system
22. Power Based on Relationships
Aspects of network structure that determine power include:
• Centrality
• Criticality and relevance
• Flexibility
• Visibility
• Coalitions
23. Power Based on Personality
and Individual Differences
• Personal orientation
• Cognitive orientation
– Ideologies about power
• Motivational orientation
– Specific motives to use power
• Disposition and skills
– Orientation to cooperation/competition
• Moral orientation
– Philosophical orientation to power use
24. Contextual Sources of Power
Power is based in the context, situation or environment in
which negotiations take place.
• BATNAs
– An alternative deal that a negotiator might pursue if she or he does not
come to agreement with the current other party
• Culture
– Often contains implicit “rules” about use of power
• Agents, constituencies and external audiences
25. Dealing with Others
Who Have More
Power
• Never do an all-or-nothing deal
• Make the other party smaller
• Make yourself bigger
• Build momentum through doing deals in
sequence
• Use the power of competition to leverage
power
• Constrain yourself
• Good information is always a source of power
• Do what you can to manage the process
