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Updated: 12 Nov 2020

Negotiating with a Power Imbalance

integrative power imbalanc

Question

Can integrative bargaining be effective when parties have unequal power?

Matthew from Australia

Answer

Whilst integrative negotiation will be generally less effective where there is a significant imbalance in negotiation power between the parties, this does not necessarily mean that the situation cannot be remedied.

Accepting the fact that the balance of negotiation power is a dynamic concept, the weaker party in this situation has a number of strategic options:

  1. Having assessed the power balance between your side and the other, consider ways and means of:
  • improving your BATNA / alternative options
  • increasing your information base
  • structuring the expectations of the other party
  • creating negotiation value
  • understand the other party’s negotiation interests or drivers.
  • decreasing the power base of the other side by identifying any weaknesses, constraints etc that they may have. e.g. are they pressed for time? Do they see you as being their best choice?
  1. Decide whether it would be in your interests to negotiate at all, in the circumstances, or withdraw from the negotiation and postpone to a more advantageous time (if possible).
  2. Finally if 1. and 2. above are not feasible options consider preparing for a competitive or distributive negotiation. Consider first if you are likely to be thoroughly outclassed by the other side's level of negotiation skills. i.e. to step into the ring with a prize fighter if you're an amateur is asking for punishment. This is your final option, as with a power imbalance, positional / competitive / distributive negotiation is not to your advantage.

Remember, power is both real and perceived. So work at the power game by improving your real power, and if possible reducing theirs - whilst at the same time boosting your perceived power as much as possible, and seeing your reality through as realistic a lens as possible.

We have not considered building a relationship or the long term goals of each party. So have a good think about your and their longer term intentions towards each other, and how this negotiation fits with your longer term plans. It may not be all about the money or exchange of immediate value.
Finally, remember that you negotiate far more with people than you do with companies.

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Whether you're aware of it or not, you've been negotiating your whole life. We negotiate with our colleagues, customers, suppliers, bosses, family and friends. We negotiate for business agreements, higher pay, a better job, our home or car. We only get to choose whether we negotiate better or worse than others. Read More
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