Negotiation Power — The Ultimate Guide of 2023

Negotiation power is the predictor of the outcome of the negotiation. However, where does power in negotiation come from?

For this article, we will discuss what negotiation is. We will tell you the main source of power in negotiation and tips to become an effective negotiator in your profession and everyday life. 

Once you are done reading this article, you will have a better understanding of where power comes from in negotiation. Thus, enabling you to position yourself in the negotiation effectively. 

Negotiation: What is it?

Negotiation is part of everyday life. From purchasing your needs to finding a job, you are negotiating frequently without even noticing. 

You negotiate your needs, feelings, desires, what you want to eat, where you want to live, what movie to watch, and many more. Our life is made up of a constant rush of small negotiations. 

However, there is also a formal negotiation which consists of lawyers and other professionals that spend a lot of time negotiating for their clients daily. 

In this article, we will talk about the formal side of the negotiation. Negotiation refers to the approach between parties that seek to reach a concession by finding a solution that they can both agree with. 

In negotiation, the dispute does not necessarily mean disruption or quarrels. Rather, it implies disagreement between parties regarding their interests or rights. 

In negotiation, there are also three possible outcomes which are:

• • One party gains and the other loses a benefit in the outcome;
  • Both parties benefited from the outcome; and
  • The outcome is shared equally by both parties.

Where Does Power in Negotiation Come From?

As we told you earlier, the power in a negotiation is the predictor of the outcome. Thus, it is important to know where it comes from.

Having power in the negotiation means you have the upper hand. The following are the sources of power in negotiation:

1. Your BATNA

The strength of your BATNA is the most important source of power in negotiation. Having a robust outside alternative can give you the power to walk away from unappealing deals. 

Your BATNA enables you to put pressure on the other party. An example would be by threatening to leave the negotiation table if the other party cannot meet your requirements or expectations. 

You can also use it as a reference point when you are making an offer to the other party. Hence, a strong BATNA can provide you with a more ambitious reference point and gain more from the negotiation. 

2. Status

Another source of power in a negotiation is status or the extent to which you are respected by other people. Status plays a big part in negotiation. Demands made by those who have higher status are most likely to be granted. This is due to the fact that they are viewed as more competent and as an advantage to be partnered with. 

However, status is relatively fixed and can only be accumulated slowly through years of training and experience. Thus, you should aim to build status in the negotiation by gaining a reputation for being a competent and trustworthy player in the negotiation. 

3. Information relevant to the negotiation

Power in negotiation may also come from the information you have gathered or collected about the other party. If you learned the other party’s preferences or reservation price, you can simply make an offer that is slightly better than that price. 

Information about the other party in the negotiation may also include knowledge of their culture. You can avoid the possibility of them walking out of the negotiation if you know what may be offensive or worrisome on their part. 

4. Social/Profesional connection

Being influential is not just a source of power but it also acts as a facilitator of the three sources which we previously discussed. 

Connections do not mean that you need to be close friends or allies with all the networks that you have for them to be valuable. Just having an interaction or a low level of closeness can be useful to gain power in the negotiation. 

Your connection with your colleagues or distant friends requires less maintenance yet you can activate it when you need it in your upcoming negotiation.

5. Preparation

Being prepared in a negotiation is crucial to its success. In preparation, you collect and gather all the important information about the other party to know what will make them interested in doing business with you. 

Additionally, preparation can make you a confident negotiator as you know where to steer the discussion and allows you to make a favorable outcome more possible.

6. Empathy

You might think that empathy cannot be a source of power in negotiation and that we must be joking. However, empathy can really be a source of negotiation power. Without empathy in the negotiation process, you can easily reach an impasse with the other party. 

Empathy allows you to understand the feelings and interests of the other party. Thus, they are willing to understand your side. This will lead you to suggest bargains that will appeal to what they want which will lead to success in negotiation.