Business Negotiation January 13, 2014

Status Intimidators

The nineteenth century writer Balzac once described a negotiation between a French nobleman and a peasant. The peasant got the best of the deal for a strange reason. The high-born nobleman felt it was demeaning to bargain with a peasant who smelled so badly. The peasant, sensing the reluctance of the nobleman, asked for a high price and stood fast. With his head held high, the nobleman acted as if all this haggling about price was of little matter to him. With as much grace as he could muster, he gave in to the peasant’s full asking price.

Social class can affect the outcome of negotiations. Even in the United States, people tend to be intimidated by those who are wellborn. In Europe this tendency is worse. Those in higher social classes are accustomed to deference, and it serves them well in business negotiations. Especially if, unlike the nobleman in Balzac’s story, they go into talks well prepared and determined to bargain.

Americans are more responsive to social status than to class. While we do not have an aristocracy as they do in Europe, we do have a status system replete with its own symbols of power and prestige.

Men and women who have achieved power and prominence carry this strength to the bargaining table, as do those who are very rich or very successful. I am reminded of Tevye, the poor milkman in “Fiddler on the Roof,” when he sings to his horse, “If I were a rich man, people would come to me asking questions that would cross a rabbi’s eyes. It wouldn’t matter if I got it right or wrong, because if you are rich, people think you know.”

Once I gave a series of negotiating seminars to bankers. I was surprised to learn that, though most of those attending were younger than thirty-five, many were vice presidents. “Why do many young vice presidents?” I asked the owner of the bank. “Good for business,” he said. “Young loan officers are always dealing with older executives in the firms we lend money to. We have found that these older executives treat our loan officers more respectfully when they carry the authority of vice president.”

In negotiation, a higher level executive- a CEO, President or Vice President-exerts more influence that those lower on the pyramid. Like status, educational level and wealth, a negotiator’s place on the organizational chart plays a hidden role at the table.

If you are apprehensive about negotiating with people more powerful, higher on the organizational chart, more educated or wealthier than you, there is a good way to cope. Recognize that you will be intimidated and compensate for it by being as well prepared as you can be. The saving grace is that these “higher types” are less likely than you to be knowledgeable about the nitty-gritty of the issues in contention.