What is the significance of understanding the “resistance point” of both parties?
A negotiator should seek to understand the themselves, their counterparty, and the negotiation situation. Understanding one’s own position is accomplished through self assessment. Then, the negotiator must seek to understand the other party’s position. Any factors that may provide useful information in the negotiation or influence a counterparty’s negotiation strategy are relevant to the negotiator. Understanding the other party’s interests, objectives, and resistance point allows a negotiator to development a strategy and select tactics to achieve that strategy. Specifically, it allows an individual to establish a reservation point and proceed with the negotiation process. The reservation point may affect the negotiation process, and it is strengthen by an understanding of:
- The nature and strength of each party’s interests,
- Each party’s BATNA,
- Each party’s cost of delay or non-agreement.
Conversely, a party’s lack of understanding of any of these issues will weaken her reservation point. This is particularly true for the BATNA, which is a primary source of a party’s negotiating power. Each party to the distributive negotiation is advised to guard or conceal information about themselves while trying to find out as much information as possible about the other party. The question becomes, how much should you disclose about the reservation point and what are the limitations on such disclosure. Generally, parties will seek to make concessions and selective reveal information to determine the other party’s reservation point or other useful information. Some tactics, such as appealing to logic, emotion, etc., may be used to manipulate the counterparty’s reservation point. Lying is unethical and can destroy the negotiation. Further, it hurts your reputation going forward.
- Strategy Note: Be aware of the “goal-setting paradox”. Pursuant to this theory, a negotiator who focuses on her ideas or principles in the negotiation rather than the reservation point may feel less satisfied in an outcome than a negotiator who focuses on her own reservation point.