Power in a Negotiation Influences Tactics

Cite this article as:"Power in a Negotiation Influences Tactics," in The Business Professor, updated October 22, 2017, last accessed August 8, 2020, https://thebusinessprofessor.com/lesson/power-in-a-negotiation-influences-tactics/.

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What are “power” tactics in a negotiation?

Power is an overarching theme that guides the selection of a strategic orientation, objective, plan, and tactics employed in a negotiation. As discussed in other sections, power in a negotiation may be used to dominate and control the other party. This is often referred to as a “power-use tactic”. Sometimes, power tactics are used to effect the power balance itself by enhancing the negotiator’s own power or diminishing the other’s power. This is referred to more broadly as a “power tactic”. Here we will refer to these tactics collectively as power tactics. While a power tactic most often aligns with a competitive or distributive strategy, it can also be used as leverage to further a cooperative or collaborative strategy. As such, power tactics still play an important role in integrative negotiations.

Any form of power can be classified categorically 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” can be defined as measures used to demonstrate potential power, cause perception of power, or the realization (or exercise of) actual power to influence the other party. These tactics are designed to use or change the power relationship.

The following are major types of power. (French & Raven, 1959)

• Expert Power – This refers to the influence supplied by knowledge or ability.

• Reward Power – This refers to the ability to compensate or reward others for their activity.

• Coercive Power – This refers to the ability to control individual conduct through threat of negative consequences.

• Legitimate Power – This is power exerted by an individual with a special post, title, or position in an organizational hierarchy.

• Referent Power – Is a form of social status yielding admiration and respect from others.

The following are widely accepted sources of power:

• Information – Such power is derived from the negotiator’s ability to assemble and organize facts and data to support his or her position, arguments, or desired outcomes. It may also spring from possession or awareness of facts that are unknown to the other party. Remember that all negotiations are exercises in communication. Selectively revealing facts concerning one party’s position is inherent to negotiation practice.

• Personality-based – Personality is how an individual projects outward to others and how others perceive the individual.

• Position – 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. Resource power regards 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.

• Relationship Power – This regards the level of dependence between the negotiators.

• Context – This is power based in the situation or environment in which negotiations take place, such as the time, location, method of communication, alternatives, third party involvement, and culture can be a source of power.

A party with greater power in a negotiation has a wider range of options regarding strategy.

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