NEGOTIATING POWER
Negotiation may be understood as a process of conferring and communicating with two or more parties for the purpose of influencing their decisions for an agreement. However, the concept of negotiating power is a little difficult to comprehend – it is one‟s ability to influence others‟ decisions and depends upon others‟ perception of one‟s capability and not what he actually has. In essence, negotiation power is all a matter of perception!
(1) Myths about negotiating power
Two popular myths that must be overcome are:
(i) Negotiating power is the physical force
Physical force is considered to be both necessary and sufficient element of negotiating power. It must be understood that the total negotiating power depends upon many factors and enhancing the total power is building up the combined potential of all of them. Effective negotiating power is orchestrating all the factors so as to maximize their cumulative effect.
(ii) Start tough as one can always go soft later
It is also influenced by the concept of physical power and leads to the belief that starting the negotiations with the threat of consequences of non-agreement is preferable. It is true that if other things are equal, a more extreme initial position of either demanding high price or offering a low price, the final outcome is likely to be more favorable. However, opening with a low offer is quite different than opening with the threat of painful consequences if an offer is not accepted because if one is committed to threat at an early stage of negotiations, it can severely damage one‟s negotiating power,
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