1. Finding and Using Negotiation Power
CHAPTER SEVEN
Finding and Using Negotiation Power
INB 350 Lecture
By: Ms. Adina Malik (ALK)

2. Learning Objectives What is power? Why is it important to negotiators?
‘Power over’ vs. ‘power with’
Types of power
Sources of power
Dealing with others who have more power
Relation between ‘power and influence’

3. Introduction
Power:
The capabilities negotiators can assemble to give themselves an advantage or to increase the probability of achieving their objectives.
The potential to alter the attitudes and behaviors of others that an individual brings to a given situation.
All negotiators want power.
Power is the ability of one person or group to cause another person or group to do something that they otherwise might not have done.
All negotiators want power. They want to know what they can do to put pressure on the other party, persuade the other party to see it their way, get the other to give them what they want, or change the other party’s mind.

4. 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.
Most negotiators believe that power is important in negotiation as it gives one negotiator an advantage over the other party.
Negotiators who have this advantage usually want to use it to secure a greater share of the outcomes or achieve their preferred solution.
In this situation, a negotiator believes the other party already has some advantages that can and will be used, so he or she seeks power to offset or counterbalance that advantage.
In this situation, a negotiator believes he or she needs more power than the other party to increase the probability of securing a desired outcome. (added power is necessary to gain or sustain an advantage in the upcoming negotiation).

5. 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” (more likely in a distributive context)
Power used to work together with the other–“power with” – to level the playing field (more likely in an integrative context)
People have power when they have ‘the ability to bring about outcomes they desire’ or ‘they have the ability to get things done the way they want them to be done’.
Power is fundamentally dominating and coercive (relating to or using force or threats) in nature.
Power with-the power holder jointly develops and shares power with the other.
Negotiators focus on power when they use threats or other means to try to coerce the other party into making concessions.

6. A Definition of Power
Not only actors but context and situation in which actor operates can also be the source of power:
Environmental power
Relationship power
Personal power

7. Types of Power Raven(1959) identified five major source of power:
Formal or Positional Power:
Legitimate power: power invested in a role
Reward power: is the extent to which managers can use rewards to influence others
Coercive power: power to force someone to do something against their will
Legitimate power stems from the manager’s position in an organization and the authority that lies in that position. Subordinates acknowledge that legitimate power that lies in that leadership role or position in an organization. They believe that the manager has the power to direct actions and they willingly comply with those requests. For e.g. Kelly asking her manager for leave. Manager has the legitimate power to wither approve or deny, and Kelly must comply.
Reward power is the extent to which managers can use rewards to influence others. Managers have power to reward subordinates for their actions when those behavior meet or exceed performances. For e.g. bonus, pay rise, performance appraisal, recognition, promotion, more autonomy and responsibility, etc.
Coercive power is opposite to reward power and it is used by managers to punish subordinates for not meeting performance expectations. For example, the VP of Sales who threatens sales folks to meet their goals or get replaced.

8. Types of Power Personal Power:
Referent power: power from another person liking you or wanting to be like you. It is the power of charisma and fame and is wielded by all celebrities (by definition) as well as more local social leaders.
Referent power comes from being trusted and respected.  We can gain referent power when others trust what we do and respect us for how we handle situations.

9. Types of Power Personal Power:
Expert power: power of the specialist R&D Engineer when they threaten to leave unless they get an exorbitant pay rise
Expert power comes from one’s experiences, skills or knowledge.

10. Sources of Power – How People Acquire Power
Informational sources of power
Personal sources of power
Power based on position in an organization
Relationship-based sources of power
Contextual sources of power

11. Informational Sources of Power
Information is the most common source of power
Derived from the negotiator’s ability to assemble and organize data to support his or her position, arguments, or desired outcomes
A tool to challenge the other party’s position or desired outcomes, or to undermine the effectiveness of the other’s negotiating arguments
E.g. The power of information, now available through the internet, has changed the ways people buy cars.
Parties take a position and then present arguments and facts to support that position.

12. Informational Sources of Power
The exchange of information in negotiation is also at the heart of concession making process.
As each side presents information (amount and kind of information shared), a common definition (hopefully, realistic picture) of the situation emerges.
The information may not be 100% accurate to be effective: bluffs, exaggeration, omission and outright lies may work just as well.
Therefore, information exchange in negotiation serve as primary medium for creating a common view of situation-
by justifying one’s own and other’s perspective
by making concessions
and eventually explaining one’s feeling about the agreement achieved.

13. 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
Individuals have different psychological orientations to social situations. Cognitive, motivational and moral orientations to a given situation serve to guide one’s behavior and responses to a given situation. These are stable individual differences-personality traits that affect how individuals use power.
Cognitive orientation: communal societies and culture where power can be largely ignored or when needed, used by kind authorities for the benefit of all; or, power is inherently and structurally imbalanced due to continual clash of social, political or class interests; or, power is distributed relatively equally.
Motivational orientation: disposition of some people to have needs to influence and control others and to seek out positions of power and authority.
Disposition and skills: individual differences to be competitive or cooperative.
Moral orientation: people differ in their moral views about power and its use.

14. 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 (budget, financing, etc.) associated with that position

15. Power Based on Position in an Organization
Power Based on Resource Control
People who control resources have the capacity to give them to someone who will do what they want, and withhold them (or take them away) from someone who doesn’t do what they want.
Some of the most important resources:
Money, Supplies, Human capital, Time, Equipment, Critical services and Interpersonal support
Money: cash, salary, bonus money, budget allocation, etc.
Supplies: raw materials, components, pieces and parts.
Human capital: availability of labour supply, staff that can be allocated to a problem or task.
Time: free time, ability to control or meet deadlines.
Equipment: machines, tools, technology, computer hardware and software, vehicles.
Critical services: repair, maintenance, technical support, installation and delivery, transportation.
Interpersonal support: verbal praise and encouragement for good performance, criticism for bad performance.

16. Power Based on Position in an Organization
Legitimate power:
Legitimate power is the foundation of social structure
The effectiveness of legitimate power depends on the willingness of the followers to acknowledge the legitimacy of the system.
People can acquire power
By birth
By election
By appointment
Derived from social values
When individuals or groups organize into a social system, they almost immediately create some form of structure or hierarchy.
Social value of that person’s position or organization; people simply show respect.

17. Power Based on Relationships
Goal interdependence
How parties view their goals: how much achievement of their goal depends on the behavior of the other party will have a strong impact on how likely parties will be to constructively use power.
Cooperative goals: ‘power with’ orientation (more assistance, greater support, more persuasion, less coercive, more trusting and friendly attitude).
Competitive goals: ‘power over’ orientation (reinforce or enhance existing power differences, use power to maximize one’s goals)

18. Power Based on Relationships
Networks (personal or professional level)
Power is derived from whatever flows through that particular location in the structure (usually information and resources)
It comes from location in an organizational structure, but not necessarily a hierarchical structure.
For e.g. automobile chauffeurs in China before 1980s

19. Power Based on Relationships
Key aspects of networks that shape power:
Tie strength
An indication of the strength or quality of relationships with others
Stronger tie with another usually indicate greater power to have the other agree to requests.
Tie content
The resource that passes along the tie with the other person. E.g. money, information, support, emotion, etc.
Network structure
The overall set of relationships within a social system (workplace, department, school or other social environment)
Tie Strength: Quality may be measured by how close you are, how much personal information do you share with the other, how much one person is willing to go out of her way for the other. Strength of ties is determined by how the parties interact, how long they have known each other, how intimate one is with the other, how much reciprocity and mutuality is there in the relationship, give and take.
The more the content of the ties build a strong personal relationship, rather than just a series of transactions. The more they create trust and respect for each other, the stronger the tie will be.

20. 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
Culture often shapes what kinds of power are legitimate or illegitimate, or how people use influence and react to it.
Agents, constituencies and external audiences
They formally or informally pressure others as part of the negotiation process.
Culture: it determines the ‘meaning system’ of a social environment. Culture is a system of basic assumptions, norms, common values that individuals in a group or organization share about how to interact with each other, work together, deal with the external environment and move the organization into the future.

21. Dealing with Others Who Have More Power
When negotiators are on the receiving end of power:
Never do an all-or-nothing deal
Make the other party smaller
Make yourself bigger
Good information is always a source of power
Build momentum through doing deals in sequence
Use the power of competition to leverage power
Constrain yourself
Do what you can to manage the process
Relying on a single party and creating a make-or-break deal with them leaves the low-power party highly vulnerable. E.g. small business and Wal-Mart
In dealing with a high-power party (group/organization), one should attempt to establish multiple relationships and engage in multiple negotiations.
Low-power players should attempt to build coalition with other low-power players so as to increase their collective bargaining power.
Early deals can be done to build a relationship, strengthen the relationship with the high-power party and perhaps acquire resources (information, technology, etc).
Power of BATNA. If you have something to offer, make sure you offer it to more than one high-power party.
Tie your hands by limiting the ways that you can do business or who you can do business with.
Seek out an information that strengthen your negotiating position and case.
If high-power party controls the negotiation process (agenda, timing, location, etc), they will do it in a way to assure outcomes they want. If a low-power party controls the process, they are more likely to be able to steer the deal in an advantageous direction.

22. Power is potential influence Influence is kinetic power (power in use)
Power vs. Influence
Power is the potential to alter the attitudes and behaviors of others that an individual brings to a given situation
Influence, can be thought of, as ‘power in action’
Influence is the actual messages and tactics an individual undertakes in order to change the attitudes and behaviors of others
Power is potential influence
Influence is kinetic power (power in use)