Page 120 - DMGT519_Conflict Management and Negotiation Skills

Conflict Management and Negotiation Skills

Notes

Task Elucidate the following statements:

1. Good information is always a source of power
2. The exercise of power entails costs and risks.

5.4 Dealing with Others who have more Power

Watkins (2002) specifically addresses the problem of “dancing with elephants” (Striking a deal
with an opponent much bigger than you) and highlights ways that lower power parties can deal
with the big players in business deals and partnerships. These ways are as follows:

1. Never do an all-or-nothing deal: Relying on a single party and creating a make – or brake
deal with them leaves the low-power party highly vulnerable. For example, a small
business that agrees to let a Wal-Mart be its only customer runs the risk of being completely
controlled by Wal-Mart. Low-power parties should attempt to diversify their risk by
entering into deals with several other partners so that no single high – power player could
wipe the low-power partner out.

2. Make the other party smaller: In dealing with a high-power party, particularly if it is a
group or organization, one should attempt to establish multiple relationships and engage
in multiple negotiations. By dealing with a variety of different individuals and departments
in the high-power party, one diversifies the relationships and the multiple interests that
may be served in working with these different sub-groups.
3. Make yourself bigger: Similarly, low–power players should attempt to build coalitions
with other low-power players to increase their collective bargaining power.
4. Build momentum through doing deals in sequence: Early deals can be done to build
relationships, strengthen the relationship with the high-power party, and perhaps acquire
resources (information, technology, seed capital, etc.). Select those high power targets that
have the most to gain, and maximum visibility of those deals to other parties.

5. Use the power of competition to leverage power: This is a variation on the power of
BATNA. If you have something to offer, make sure you offer it to more than one high-
power party. If you can get them competing against each other for what you want, some
may actually do a deal with you simply to keep you from doing a deal with one of their
competitors.
6. Constrain yourself: Tie your hands by limiting the ways that you can do business or who
you can do business with. However, while these constraints might drive away your
competition, they also have the liability of constraining you as well.

7. Good information is always a source of power: Seek out information that strengthens
your negotiating position and case. Anticipate the information that would be most
compelling or persuasive to the other side; organize it so that you can draw on it quickly
and assemble it to be maximally persuasive.

8. Do what you can to manage the process: If the high-power party controls the negotiation
process (the agenda, the cadence, the timing, and the location), they will do it in a way to
assure outcomes they want. If the low-power party controls the process, they are more
likely to be able to steer the deal in an advantageous direction (Watkins, 2002).

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