Who Holds The Power In A Negotiation?

Several types of power can influence the outcome of a negotiation. The use of the word “can” in the previous statement is emphasised because if power is held but not used then the power adds nothing to the value of the negotiation.

Position. The formal position we hold in an organisation gives us power. This may be considerable if we are the Managing Director but if we are the Finance Manager we only have influence over the financial matters for the organisation and we have no say or control over production or human resources.

Knowledge or expertise. Knowledge gives strong power as long as it is actually used in the negotiation. Silence cancels out any knowledge power. You can be very bright indeed and still be powerless.

Character or ethics. The more trustworthy an individual is the more power they wield in negotiations. The focus here is whether or not people do what they say they will even if they do not feel like doing it or even agree with the action itself.

Rewards. People who can give rewards or just perceived rewards hold power. Money can have power; I can give staff a pay rise but the power of money only works well if it is evenly distributed across the organisation.

Punishment. Creating a negative outcome for a counterpart means delivering the power of punishment. Being able to reprimand and fire staff gives tremendous power.

Gender. Dealing with someone of the opposite sex can confer power. This can be in non verbal gestures or in the manner in which the sexes interact and work together.

Powerlessness. In some circumstances giving up power can be a powerful move in itself. In a kidnap scenario repeated threats by the kidnapper to kill the hostage lose power if they are made too often until the hostage challenges the kidnapper to actually carry out the deed.  If nothing happens then the kidnapper has lost all of their power which has now passed to the hostage!

Charisma and personal power. These are a complex mix of traits influencing power and leadership. A passion and confidence in what we believe in are key factors here.

Lack of interest or desire.  In common with most things in life the side with least interest in what is being negotiated holds the most power. If you are buying a house and are not totally convinced in the house that you are currently viewing then you hold the upper hand.

Irrational behaviour. Those people who in a negotiation scenario act in a bizarre manner or irrationally when faced with problems or unplanned events. Such people are difficult to read and to understand in terms of both behaviour and approach. This is a good tactic if you want to unsettle your opposition!

Try dabbling with all or some of the above at some point in your own negotiations but remember to measure their success/failure and learn from the process!

Good Luck!