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Updated: 8 Sep 2021

Negotiation Alliances

Negotiation Alliances

Summary

This case study shows the importance and power of forming alliances within a multi party negotiation.

Alliance Benefits

In multiparty negotiations, the negotiation power, or the position of one negotiating party, can be enhanced or weakened by making alliances. The use of alliances is a powerful technique. By utilizing alliances, any member in a multiparty negotiation can strengthen their own BATNA (Best Alternative to a Negotiated Agreement). Conversely, alliances can weaken the BATNA of an opponent.

The main advantage of forming an alliance is that it allows two or more parties to come together on one or more issues where they share a common interest. This allows the alliance to present a common front on positions of mutual interest. This includes opposing the position of another party at the negotiation table. Today, many companies send their entire negotiation team onto the best negotiation seminars in order to learn how to coordinate as a team and leverage complex alliances.

The Other Side of the Coin

There’s one key drawback to forming an alliance. If the parties reach a side agreement that addresses some other issue of importance to a member of the alliance, they may simply withdraw their support. In so doing, they can weaken the alliance at any given moment. It’s important that alliance members are fully aware of all the aims and goals of the other prospective alliance members. It’s especially important to keep in mind the most important aims of the perspective partners. Also, to be cognisant of any weak areas that can be exploited by their partners. Otherwise, you end up getting caught in their counterpart’s gambit to divide and successfully exploit your weakened position in return.

What Can Happen

Conocco, an American company, had developed plans to commence operations to drill for oil in a national park located in the rain forest of Ecuador. The government of Ecuador agreed to the Conocco’s plans. This was because the government was in great need of the oil revenue that the drilling operations would produce. However, a number of human rights groups and various environmental groups fiercely opposed the plan. These groups formed an alliance in a common cause to stop the drilling as this was their main intent.

The environmental and human rights groups initiated a very powerful and public campaign against the oil drilling plan. As a result, public opposition had swelled against Conocco and the government. To counter what the opposing groups were doing to block their drilling in the rain forest, Conocco sought to break up the alliance formed against them.

The results of the confrontation

Conocco began to hold secret negotiations with some of the more moderate members of the environmental groups. They presented these groups with what Conocco regarded as a very responsible management plan. They were using a divide and conquer tactic. Not to be outdone and perhaps realizing what Conocco was trying to achieve, the remaining environmental and human rights groups applied the same kind of divide and conquer tactic. The environmental and human rights groups took a different approach. They applied pressure directly against the government of Ecuador to withdraw their support for the project.

Conocco’s tactics were nullified as, in the end, Conocco withdrew from the drilling project.

This is a clear lesson in how effective an alliance can be in achieving a compatible objective. It also reveals how you can counter such tactics in your own dealings. Also, it demonstrates how it was necessary for the alliance members to always be on-guard for their opponent’s diversionary manoeuvres.

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    Stefany on

    Incredible how they banned together and used the same tactic on them but taking it a step further!!

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