Power and Strategic Orientation in Negotiations

Cite this article as:"Power and Strategic Orientation in Negotiations," in The Business Professor, updated October 2, 2017, last accessed July 13, 2020, https://thebusinessprofessor.com/lesson/power-and-strategic-orientation-in-negotiations/.

Next Article: What is a “strategic objective” in a negotiation?


How does power in a negotiation affect the selection of a strategic orientation”?

An overarching theme that guides the selection of a strategic orientation in a negotiation. Power in a negotiation is used to dominate and control the other party. This tactic generally aligns with a competitive or distributive marketing strategy. A power tactic can be benign and supportive or oppressive and abusive. It can also be used to work together with the other if the power holder jointly develops and shares power with the other. That is, a tactic may be designed to enhance the negotiator’s own power or to diminish the other’s power, and to create a state of either power equalization or power difference. Seeking power in negotiation usually arises from a negotiator believing she currently has less power or needs more power than the other party to increase the probability of securing a desired outcome. Conversely, a negotiator may employ tactics designed to create power equalization or minimize the other party’s ability to dominate the relationship.

  • Note: Individuals have a tendency to view power as an attribute of the actor only and ignore elements of power that are derived from the situation or context in which the actor operates.

The major sources of power are embedded into five different groupings:

  • Informational power – derived from the negotiator’s ability to assemble and organize facts and data to support his or her position, arguments, or desired outcomes.
  • Personality-based power  Personality is made up of personal, cognitive, and motivational orientation.  “Personal orientation” is the “cognitive, motivational and moral orientations to a given situation that serve to guide one’s behavior and responses to that situation.” “Cognitive orientation”  is made up of three ideological perspectives – unitary, radical, and pluralist — each of which operates as a frame, shaping expectations about what one should pay attention to, how events will evolve, and how one should engage situations of power. “Motivation orientation” focuses on differences rooted more in needs and “energizing elements” of the personality, such as disposition and skills, moral orientation, and moods.
  • Positional (structural) power – This type of power is divided into “legitimacy” and “resources”. Legitimate power relates to social structure, such as occupying a particular job, office, or position in an organizational hierarchy. People can acquire legitimate power through birth, election, appointment or promotion to some organizational position (legitimate authority). This power structure derives from the willingness of others to acknowledge the legitimacy of the organizational structure and the system of rules and regulations that empowers its leaders. Resource power the control of resources and the capacity to give them to someone who will do what they want and withhold them (or take them away) from someone who doesn’t do what they want. The power is greater in environments where resources are aggregated in the face of scarcity. Resources may include money (or other assets), supplies, human capital, time, critical services, etc.
    • Note: It is also possible to apply the notion of legitimacy to certain social norms or conventions that exert strong control over people, such as reciprocity, equity, and responsibility or dependence.
  • Network location power – This type of structural power comes from location in an organizational structure, but not necessarily a hierarchical one. In this case, power is derived from critical resources that flow through a particular location. The particular location in the structure allows individuals to become powerful because of the way that their actions and responsibilities are embedded in the flows of information, goods and services, or contacts. “Tie strength” is an indication of the strength or quality of relationships with others. “Tie content” reflects that the more content, the stronger the relationship, and the more trust and respect created for each other. “Network structure” is the overall set of relationships (centrality, criticality or relevance, flexibility, visibility, and coalitions) within a social system.
  • Relationship Power – This regards the level of dependence between the negotiations. “Goal interdependence” refers to how the parties view their goals and how much achievement of their goal depends on the behavior of the other party and how likely parties will be to constructively use power. “Referent power” is often based on an appeal to common experiences, common past, common fate, or membership in the same groups.  It is made salient when one party identifies the dimension of commonality in an effort to increase their power (usually persuasiveness) over the other.
  • Power through Context – This is power based in the context, situation, or environment in which negotiations take place. The availability of a “Best Alliterative to a Negotiated Agreement” (BATNA) offers a negotiator significant power because she now has a choice between accepting the other party’s proposal or the alternative deal. “Culture” is a system of basic assumptions, norms, and/or common values that individuals in a group or organization share about how to interact with each other, work together, deal with the external environment, and move the organization into the future. Culture often shapes what kinds of power are seen as legitimate and illegitimate or how people use influence and react to influence. Culture—both organizational and national—often translates into deeply embedded structural inequalities in a society. “Agents, constituencies and external audiences” can give rise to contextual power discrepancies. Negotiations become significantly more complex when negotiators are representing others’ views.

Any form of power can be further classified as follows:

  • Potential power – Power that an individual has the ability to bring forward or exercise in the negotiation. The underlying capacity of the negotiator to obtain benefits from one’s agreement.
  • Perceived power – This is the power that a negotiators believes she and the counter-party they have. The source of this perceived power may not be real, but it still provides a point of influence in the negotiation. A negotiator’s assessment of each party’s potential power, which may or may not square with reality.
  • Realized power – Power that has been employed or exercised to influence the other party. The extent to which negotiators have claimed benefits from the interaction.
  • Power tactics – Measures used to demonstrate potential power, cause perception of power, or the realization (or exercise of) actual power to influence the other party. Refers to the behaviors designed to use or change the power relationship.

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