Negotiations are often seen as an exercise of power between parties; one party’s power relative to the other can more likely than not influence what outcome both can expect from the negotiation table.
How then should a negotiator approach the negotiating table with a party that appears to be more resourced, more connected or otherwise in a more powerful position?
This article provides some background to power in negotiations and briefly explores the concept of principled negotiations.
The powers of a negotiator
Roger Fisher identifies six categories of power that can be used to enhance a negotiator’s strategy, regardless of the relative power of the other party.
The categories of power are as follows (see Roger Fisher, ‘Negotiating Power: Getting and Using Influence’, The American Behavioural Scientist, 27(2) (1983), 153):
the skill and knowledge to understand what we and the other party want out of the agreement and what opportunities are available to us;
relationships that provide us a positive rapport with the other party;
knowledge of the best alternative to a negotiated agreement (BATNA), or what opportunities we have to look forward to if we walk away from the negotiation table;
an elegant solution that provides options to satisfy the interests of both parties;
legitimacy in our proposals, so that they are perceived as ‘fair’; and
an affirmative commitment to do positive things for the other party.
Principled negotiation
These categories of power become essential elements of a negotiation strategy in what Fisher and Ury refer to as principled negotiation (see Roger Fisher and William Ury, Getting to Yes: Negotiating an Agreement without giving in, UK: Randmon House, 1992, xiv), also known as interest-based negotiation. It could also be referred to as a win-win negotiation. Principled negotiation is conceived in contrast to more adversarial modes of negotiation, in which parties compete in a zero-sum game to acquire a larger slice of the same pie. Instead, principled negotiation aspires to find situations of mutual gain, where both parties can cooperate to identify solutions that meet their respective interests.
In a principled negotiation, a skilled negotiator can use the categories of power identified above to improve the position of their client (or their own position), and better prepare themselves against perceived power imbalances that may exist between the parties. The ability to make optimal use of these categories is particularly important where relations of power are dynamic, and skilled negotiators should be prepared to make the most out of opportunities that arise from these changeable relations of power.
A skilled negotiator should particularly be prepared to approach the negotiation table with a clear sense of their client’s BATNA. Fisher and Ury emphasise that a good foreknowledge of your client’s BATNA is important in understanding your client’s position, opportunities and limitations (see Fisher and Ury, 110). In other words, preparation is key. These opportunities and limitations will in turn inform what you want. Clear objectives are essential. If there are generous opportunities for you or your client outside of the negotiation, you are unlikely to accept an unfavourable offer. Likewise, if you or your client is unlikely to find their interests met elsewhere, you will not be so quick to walk away from the negotiation table.
Be mindful, however, not to underestimate your power in negotiations. Any party that has an opportunity for a benefit or a risk of an adverse consequence has a vested interest in negotiations. A negotiators role is to identify and test that interest, to explore possible win-win solutions.
Of course, power is just one factor in negotiations. Complex negotiations are dynamic and a good negotiator will help you prepare by identifying opportunities in your negotiation process.
MPS Law provides expert negotiation services to clients in a wide range of matters, including in relation to commercial matters and native title. More information about native title negotiations is available here.
For more information, contact Michael Pagsanjan (michael@mpslaw.com.au).