Wiggins Lowry Chapter 11 POWER IN NEGOTIATION ACTUAL AND PERCIEVED Ewha Womans University GSIS International Negotiation and Strategy Professor: Jasper Kim Presenter: Vilaysone LEUANG 142SIS79 Arlette N. Iyakaremye 142SIS76 Catherine Guivalu 142SIS75

Presentation Outline 1. Negotiation Power: Getting and Using Influence (Noot) 2. Breakthrough Business Negotiation: A toolbox for managers(Arlette) 3. When David Meets Goliath: Dealing with Power Differentials in negotiations. (Cathy) 4. Conclusion

What Is Power? 1. Potential or capability to influence the opponent 2. As a process in which tactical actions (effective or not) seek to influence an opponent 3. A result or outcome of an influence process that is, as actual or realized power Source: (1992) Lawler J, Power Process in Bargaining

1. Getting and Using Influence 6 kinds of power The power of Skill and Knowledge The power of a good relationship The power of a good alternative to negotiation The power of an elegant solution The power of legitimacy The power of commitment

Skills and Knowledge: People, Interests, facts etc.

A Good Relationship Trust & Communication

A good alternative to negotiation Increase power by increasing your BATNA Sets the floor for the negotiation The worse their BATNA is the power for yourself.

The power of elegant solution The power of a mediator By brainstorming

The power of Legitimacy “ You can use standards of legitimacy as a sword to persuade others” Roger Fisher Getting to YES “Being open to persuasion itself is persuasive”.

The power of commitment Affirmative Commitment Negative Commitment An offer of what you are willing to agree to A commitment of what you will not do.

2. BREAKTHROUGH BUSINESS NEGOTIATION How to overcome power imbalances?

a. DANCING WITH ELEPHANTS: The 10 principles 1. Never do All-or Nothing Deals 2. Make them smaller 3. Make yourself bigger 4. Built momentum through a sequence of deals 5. Harness the Power of competition 6. Constraint yourself 7. Hold the Informational High Ground 8. Take control of the process 9. Negotiate with Implementation in Mind 10. Build Superior Organizational Capabilities

The 10 Principles 4. Built momentum through a sequence of deals 1. Never do All-or Nothing Deals 2. Make them smaller 3. Make yourself bigger 4. Built momentum through a sequence of deals

The 10 Principles 5. Harness the Power of competition 6. Constraint yourself 7. Hold the Informational High Ground 8. Take control of the process

The 10 Principles 10. Build Superior Organizational Capabilities 9. Negotiate with Implementation in Mind 10. Build Superior Organizational Capabilities

b. How to negotiate as an “ELEPHANT” Be the elephant in negotiation E.g: Maintain a company wide perspective when negotiating with many small companies Two(2) options: Employ your power to extract very favorable agreements Work to overcome the tactics of the 10 principles. Position yourself as the partner of choice for smaller players. Build reputation and capabilities to sustain deals with smaller partners.

Where does Power Come From? Sources of Power Organizational Power TBT or SPS? (II)

When David Meets Goliath: Bargaining with More Powerful Parties What do you do ?

Bargaining with More Powerful Parties A. Determine whether the other side Really is more Powerful? B. Determine whether Adversaries Understand and will Use their Power C. Use Opening Moves to Set the Tone and to Deflect Power Ploys Whether opponent has power over us Aware of power & willing to use it! “Primacy Effect”

Bargaining with More Powerful Parties cont. Use information Strategically to Increase Power Develop Additional Alternatives to Improve Ones “Walkaway Point” Research Available Legal Protections Information = Great opportunity BATNA

Bargaining with More Powerful Parties cont. Explore Interests As Alternative to Power Ploys Avoid Unnecessary Conflict, But Retaliate If Necessary Identify & Counter Plays

Bargaining with More Powerful Parties cont. Involve Mediators to Balance Power Differentials Form an Alliance Against the More Powerful Party Appeal to a Powerful Adversary’s Sense of Justice and Fairness Use weakness as a source of Strength Facilitated negotiation Strength in numbers

Conclusion Negotiation Power is the ability to influence in an adversary’s perception into believing in what you want them to believe and agree to it. Use of the 10 powerful principles can increase effectiveness in negotiating with Bigger entrepreneurs. Understanding the different Power Sources and mastering the approaches allows negotiators to ask the right questions and focus on the right issues in complex negotiations

Additional Extract: To have effective power, one must be willing to use it or be able to convince an opponent that one will use it Power in negotiations typically arises from the dependence that each party has on the other Negotiation power depends less on the other side's strength than on one's own needs, fears, and available options Having greater power does not guarantee successful bargaining outcomes Source: (2013) https://litigation- essentials.lexisnexis.com/ 2000 Harvard Negotiation Law Review, Robert S. Adler+, Elliot M. Silverstein