Planning for Negotiations May 25, 2012

Determining Bargaining Power in Negotiation

Power is the most important factor in determining negotiation outcome. Experienced negotiators are aware of this and experiments confirm it.

Power is the ability of one person to control the resources and benefits of another. To the extent the one person can control something another needs, that person has power over the other.

The key is to learn how to build your base of power and limit the leverage of the other side.

Power is rarely what it appears to be. People have more power than they think because they are more aware of their own limitations than those of the other side.

They recognize the losses they would suffer if agreement cannot be reached. What they cannot do is look into the mind of the other party and accurately assess how worried they are about losing the deal if deadlock occurs.

Additionally, both parties always have some constraints upon their action, even when they are in a strong position.

These limits may be legal or moral, economic or physical, geographic or organizational, imagined or real. These constraints limit the negotiator’s capacity to use all the power they have.

Examining and understanding your own base of bargaining power, along with accurately assessing the power limitations of the other party puts you in a stronger position to negotiate with bargaining power.