The Role of Power in Negotiation

The word power has had a bad connotation for many years.

It has received this reputation because most people associate the word with one side dominating or overpowering the other. I define power as the ability to influence people or situations. With this definition, power is neither good nor bad. It is the abuse of power that is bad.

Types of Power

Various types of power can influence the outcome of a negotiation. I emphasize the word can because if you have power but don’t use it, your power is of no value. The following are a few types of power that can be significant in the negotiating process:

1. Position. Some measure of power is conferred based on one’s formal position in an organization. For example, if you are the marketing manager, you can influence decisions that affect the marketing department.
2. Knowledge or expertise. Knowledge in itself is not powerful; it is the application of knowledge that confers power. It’s important to take the time prior to a negotiation to research facts and statistics, find out what the other party’s goals are, and discover what areas he or she might consider negotiable–and then use this knowledge!

1. Character. Individuals who are seen as trustworthy have a great deal of power in negotiations. You are perceived as trustworthy if you have a reputation for doing what you say you are going to do.
2. Reward and punishment. Those who are able to bestow rewards or perceived rewards, such as raises or job benefits, hold power. Conversely, those who have the ability to create a negative outcome for the other party also have power.
3. Behavior style. Most people exhibit one or a combination of the following behavior styles:
   • analytical–process oriented, methodical
   • driven–task oriented, goal directed
   • supportive–relationship oriented, focused on feelings

   Which behavioral style is most appropriate depends on the situation. For example, if you were going through a divorce and wanted to maintain a good relationship with your spouse, you would want to use the supportive style. You gain real power from a knowledge of behavior styles only if you can read a situation and adapt your style to it.

Most people have more power than they think. I believe there is a link between a person’s self-esteem and the amount of power that person thinks he or she has. It has been demonstrated that people with high self-esteem feel they have more viable options (and thus more power to act) in negotiations. I believe the reverse is also true: People with low self-esteem feel powerless, and do not stand a fair chance.

Rules of Power

Knowing the following rules of power comes in handy when entering into a negotiation.

Rule #1: Seldom does one side have all the power. Even the individual who goes to a bank to ask for a loan has power–the power to decide which bank to apply to, the power to decide an acceptable interest rate, and the power to decide what to put up as collateral.

Rule #2: Power may be real or apparent. When I was a proctor in the sociology department at San Diego State University, I knew that cheating was a potential problem. As I was passing out tests, I announced that I would uphold the university’s “policy” on cheating. One bold student asked what the policy was. My response was simple: “If you need to ask, you don’t want to know.” This was the first time I had ever seen all sixty students staring at their own paper! Does the university have a policy on cheating? I don’t know. But in this situation, whether the power was real or apparent didn’t matter. The students perceived that I had the power.

Rule #3: Power exists only to the point at which it is accepted. At the airport on a return trip from Europe, I noted that all the ticketing agents for economy class had at least a twenty-minute line to check baggage. Yet the business and first-class agents had not one person in line. I boldly walked up to the business class agent and got my seat assignment. Of course, this strategy was successful only because the ticket agent was willing to work with me. But I never would have known if I hadn’t tried.

Rule #4: Power relationships can change over time. This is one of the hardest lessons I have ever learned. In my youth, I had the same girlfriend from the seventh to the eleventh grades. In the beginning, I had the power in the relationship. I chose which activities we would become involved in and who our friends would be. Then something happened that sent me into a tailspin. My girlfriend was asked out by the student body president! Overnight, I was sending roses and begging for a date.

Rule #5: In relationships, the side with the least commitment generally holds the most power. If you are negotiating to buy a car from a salesman whose boss has warned him that he had better start making sales, and you are not committed to buying this particular car from this particular dealer, you are in the driver’s seat in the negotiating process.

Testing Your Power

What is the lesson to be learned here? Power is of no value unless you take advantage of it. (Remember, power is not bad–the abuse of it is bad.) When negotiating, be willing to take a chance. Try out your ability to influence the other party and the outcome of the negotiation. You may find out you have more power than you think!