Connect with us

Business

The Four Horsemen of Negotiator Power

Avatar

Published

on

To maximise their success at the bargaining table, negotiators should maximise their power.

At the bargaining table, a negotiator’s primary objective is to reach the best possible outcome, be it a higher salary, additional accessories when purchasing a car, or acquiring a company at a lower price.

No matter what one negotiates about, the single most reliable predictor of the outcome is the amount of power one has. Although having power is important for many reasons, there are two fundamental ways in which power benefits negotiators.

Power transforms people into bold negotiators

The first benefit of power is that it emboldens individuals, making them more confident, optimistic and proactive.

Power increases the probability that people consider negotiating in the first place due to higher feelings of entitlement and confidence that a positive result can be achieved.

Those who have power also set higher aspiration prices, make more ambitious first offers and claim more value from their opponents. This is important because the size of the first offer and which party moves first or second in a negotiation both influence the quality of the outcome. Indeed, research has shown that those who have more power are more likely to make the first offer in a negotiation and end up with better deals.

Power shields negotiators from the tactics of the other side

The second way power benefits negotiators is by protecting or shielding them from attempts by others to influence them. Power can increase personal resilience towards what is going on in the environment. For example, those who have more power are less likely to conform to the opinions of others than those who have less power.

Having power also makes negotiators less susceptible to the strategic influence tactics of the other side.

Research suggests that, for instance, having power reduces the likelihood that facing an angry counterpart (as opposed to a happy one) would lead to larger concessions, or that a negotiator would fall prey to deliberate sympathy appeals of those with less power.

The four horsemen of negotiator power

Given the vast benefits of having power in a negotiation, knowing how to acquire it is crucial. In our article, “The four horsemen of power at the bargaining table” in the Journal of Business & Industrial Marketing, we identified four important sources of power, where they come from, and how they help (and sometimes hurt) negotiators at the bargaining table.

In our article, we define power in negotiations as the probability that an individual will influence the negotiation towards his or her ideal outcome. The four most important sources of power that can increase a negotiator’s chance of reaching his or her ideal outcome are alternatives, information, status and social capital.

The first horseman of power: alternatives

The strength of one’s alternative, or best alternative to a negotiated agreement (BATNA), is probably the most important source of power. When negotiators have an attractive outside offer going into a negotiation, they are less dependent on the other party to reach their objectives than when they have an unattractive alternative or no alternative at all. A valuable alternative offer allows a negotiator…

Read More

INSEAD Knowledge is the expert opinion and management insights portal of INSEAD, The Business School for the World. Knowledge showcases the latest business thinking and views from award-winning faculty and global contributors

Comments

Business

Thailand’s automotive sector expected to produce 1.4m cars this year

This increase in output is a result of the recovery of domestic and export markets, with the annual output for 2021 expected to be around 1.4 million.

National News Bureau of Thailand

Published

on

Thailand Automotive Institute (TAI) anticipates the overall output from Thailand’s automotive sector this year to be around 1.4 million cars. They are, however, still cautious over automobile exports until at least March this year, due to the resurgence of COVID-19 cases around the world.

(more…)
Continue Reading

Banking

Can Fintech drive a strong post-COVID-19 recovery in Asia?

The pandemic has highlighted the power of digital technology. Now is the time to harness this power for inclusive growth so that communities, especially in poor and remote areas, can survive the crisis and thrive.

Asian Development Bank

Published

on

To say 2020 has been a challenging year is a massive understatement. The COVID-19 pandemic has quickly undermined development gains from recent decades and slowed growth in many Asian economies.

(more…)
Continue Reading

Business

Asia’s supply chains to be tested by COVID-19 vaccine delivery

The global logistics company DHL estimates that global vaccine coverage will take around 200,000 pallet shipments and 15 million deliveries in cooling boxes as well as 15,000 flights.

Asian Development Bank

Published

on

The enormous logistical challenge of vaccine distribution will be aided by trade and supply chain finance guarantees.

(more…)
Continue Reading

Latest

Most Viewed

Subscribe via Email

Enter your email address to subscribe and receive notifications of new posts by email.

Join 13,632 other subscribers

Trending