June 23, 2024

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Negotiation – Understanding Your Sources Of Power

One of the main differences between negotiators is how confident they feel when
negotiating. Typically, the more confident we feel, and the better we are prepared,
the more successful will be the outcome of our negotiations.

Personal power comes from many sources. To build up and increase our confidence
as negotiators we need to step back and analyse the sources of our personal power
and compare them with those of the people with whom we are negotiating.

Power is not absolute. In most negotiating relationships the power balance moves
with time as the negotiation progresses.

Here are just a few examples of sources of power:

Information Power:

Information power comes from having knowledge that will influence the outcome of
the negotiation. Planning and research can increase our information power, as can
asking the right questions before we reach the bargaining phase of the negotiation.

Reward Power:

Reward power comes from having the ability to reward the other party in the
negotiation. It could be the power a buyer has to place an order for goods and
services or the power a salesperson has to give good service and solve problems

Coercive Power:

Coercive power is the power to punish. This is seen most commonly in the buyer-
seller relationship, but can be a feature of other types of negotiation.

Situation Power:

Situation power is the power that comes from being in the right place at the right
time. A customer is desperate to place an order and you are the only source of
supply in the short term. Having an effective network and keeping in touch with
what is happening can increase your situation power.

Expertise Power:

Expertise power comes from having a particular skill which you can apply and which
can influence the outcome of the negotiation. Improving negotiation skills helps you
win better deals. Other areas of expertise could also help the outcome of the

And Finally – Referent Power:

Referent power comes from being consistent over time. If people see you as having a clear, consistent strategy as a negotiator, you will increase your referent power.
Having standards that you stick to and being consistent will help to increase your
referent power. In the eighties, Margaret Thatcher wasn’t universally popular, but
was respected by many for being consistent in her views and behaviour. In the end
she failed because her approach was too rigid and she was unable to adapt to
changing circumstances.

Copyright © 2007 Jonathan Farrington. All rights reserved