6.2 Rules of Power – Explanation (OBN-VL)

6.2 Rules of Power – Explanation

Power comes from many sources. Power is defined as the ability to influence a person or a group and help drive toward a mutually profitable, sustainable agreement. We need to understand what gives us Power and what gives power to our negotiating partners.

Types of Power

Planning Power  The more prepared a negotiator, the more confident and successful he/she will be. Effective Planning requires research about the customer, its competitors, the marketplace, industry, performance, as well as key differentiators. Effective planning provides a road map for how to begin, execute and close successfully so that a sustainable agreement is reached. 

Positional Power  One’s formal position in an organization determines his/her power. Typically the more senior the person in the organizational hierarchy the more potential power he/she yields. Those who can bestow reward or punishment have positional power, as do those who control resources. 

Informational Power  Having the information to support a position, as well as to challenge or undermine a seller’s position, provides a high level of power. Up to 75% of a negotiation process should be spent in research and preparation prior to beginning a negotiation. 

Personal Power  Individuals who are seen as trustworthy and reliable are seen as powerful. Those who are seen as confident and assertive are often perceived to have more power. 

<>Relationship Power  >The more interdependent goal achievement is, the more the relational power exists. Often the ability to appeal to common experiences, pasts, fates, or membership in the same groups or networks improves negotiation success.

Rules of Power

  1. Seldom, if ever, does one side have all of the power, and the balance of power rarely remains consistent throughout the entire negotiation.
  2. Power may be real or perceived, but perception of power is the same as real power.
  3. Power exists only to the point it is accepted. Often power is granted when it does not actually exist, but the extent to which others believe a person has power determines his/her actual power.
  4. The more alternatives that exist, the more power one has. Having alternatives allows you to have a BATNA – Best Alternative to a Negotiated Agreement.

Instructions: Rank your sources of power and answer the questions pertaining to the deal you brought with you as a part of the pre-work in the submission form below.