What do we do if the person you are negotiating with is more powerful than you are? Meaning they have more money, their position in office is higher than you or they are better connected than you.
But of course if you enter an antique store to buy a sterling silver George IV tea set worth thousands of dollar and all you have is one hundred dollar bill, you should not expect skillful negotiation to overcome the difference. In any negotiation there exist realities that are hard to change. In response to power, the most any method of negotiation can do is to meet two objectives: first, to protect you against making an agreement you should reject and second, to help you make the most of the assets you do have so that any agreement you reach will satisfy your interests as well as possible.
1. If you are protecting yourself using bottom line, it may cost you. If you are buying, a bottom line is the highest price you would pay. If you are selling, a bottom line is the lowest you will go. Having a bottom line makes it easier to resist pressure and temptations of the moment. However having a bottom line also inhibits imagination. It reduces the incentive to invent a tailor made solution that would reconcile differing interests in a way more advantageous for both you and them.
2. Know your BATNA, Best alternative to negotiated agreement. Always have careful thought about what you will do if you fail to reach an agreement.
3. The Insecurity of an unknown BATNA may cause you to be too optimistic and assume that you have many other choices, other houses for sale, other buyers for your secondhand car, other plumbers, other jobs available or other wholesaler and so on.
4. Some of us may avoid BATNA. Thinking that this buyer or the next buyer is going to give you a attractive offer. You may avoid facing the question of what you will do if no agreement is reached. You may think to yourself, “lets negotiate first and see what happens. However, having at least a tentative answer to the question is absolutely essential if you are to conduct your negotiations wisely.
5. Formulating your trip wire, “Don’t sell for less than $258,000, the price i paid plus interest, until you have talked to me.” is a trip wire. A trip wire should provide you with some margin in reserve. If after reaching the standard reflected in your trip wire you decide to call in a mediator, you have left him with something on your side to work with.
6. The better your BATNA, the greater your power.
7. We often think that negotiating power comes from wealth, political connections, physical strength, friends, and military might. In fact, the relative negotiating power of two parties depends primarily upon how attractive to each is the option of not reaching agreement.
8. Consider a wealthy tourist who wants to buy a small brass pot for a modest price from a vendor at the mumbai railroad station. The vendor may be poor, but she is likely to know the market. If she does not sell the pot to this tourist, she can sell it to another. From her experience she can estimate when and for how much she could sell it to someone else. The tourist may be wealthy and powerful but in this negotiation he will be weak indeed unless he knows approximately how much it would cost and how difficult it would be to find a comparable pot else where.
9. Think for a moment about how you would feel walking into a job interview with no other jobs offers, only some uncertain leads. Think how the talk about salary would go. Now contrast that with how you would feel walking in with two other job offers. How would that salary negotiation proceed? The difference is power.
10. Always consider the other side’s BATNA. The more you know about their BATNA the better prepared you are for negotiation.
As always thanks for reading and if you are looking for the book, it can be found in big book stall or amazon.