Power Dynamics in Negotiation

Part A

Introduction

Negotiation is a means to structure and strengthen a relationship. According to negotiation theories, there are two forms of negotiation. They are position-based and interest-based negotiation. The compromise that parties achieved and agreed upon would, however, depend on the parties’ power. This can mean that a party can use its power to push forward its interest and its position. It has also been observed that there is a weighing approach adopted by parties, when they are in several numbers, in a negotiation that have strong interests to pursue a decision considering the intensities of the respective interest and degree of power they power. The elements of interest and power and their intensities define the decisions arising out of negotiation. This essay will explore the role of positions, interests and power and their extent of their ability to influence a negotiation decision. This essay proposes that power is the ultimate tool that a party uses to validate and secure its interests as well its positions.

Understanding the conflict is necessary to succeed in negotiation.

In a negotiation parties analyse the issues at stake and the solutions that the parties desire, individually and jointly. Parties must understand the kind of conflict to negotiate a decision. For example they must understand whether the conflict is a veridical conflict where the interests are different, but the resources to achieve the interest are the same; a contingent conflict where more resources will enable the parties achieved their respective interests; or displaced conflict where parties are negotiating on subjects that are different from the real interests. The conflict processes become complex when parties interact to resolve the conflict. Such strategic interaction may differ from one party to another that may create more competition. This is a “mirroring effect” where there is impossibility of achieving a resolution. In a conflict situation or the processes involved in a conflict interaction or attempt to resolution, negotiation becomes a tool for parties to influence each other towards an agreement or understanding.

1. Jennifer Landau and Elio Borgonovi, Relationship Competence for Healthcare Management Peer to Peer (Palgrave Macmillan 2008).
2. Robert A. Ullrich and George F. Wieland, Organization Theory and Design (R. D. Irwin 1980).

Focus on interests versus focus on positions.

There are arguments in favour of interests that parties must focus instead of the positions. Parties must come up with multiple options that they can look at for mutual gains before they come to a decision. There must be some objective standard that the parties must set before analysing the available options. This approach may not be better when one could focus on positions rather than interests where it could persuade the parties to break down their opposing positions and give them up bit by bit until both the parties are converge at one point, which is an understanding. However, negotiating over position has the potential of yielding to unwise outcomes. Parties can bargain over their respective positions and may lock themselves with their increase commitment to their positions that they clarify and defend during the negotiation. In such circumstance, it may not be right to see position and interest independent of power or bargaining powers of the parties in a negotiation. It is a good area to question the role of power in different types of phases of a negotiation or a conflict between parties. In other words, what will be the extent that power could stretched when there is a negotiation or a conflict, whether veridical conflict, contingent or displaced conflict.

1. Carrie J Menkel-Meadow; Andrea Kupfer Schneider and Lela Porter Love, Negotiation Processes for Problem Solving (Wolters Kluwer 2020).
2. Ibid.
3. Ibid.
4. Carrie J Menkel-Meadow; Andrea Kupfer Schneider and Lela Porter Love, Negotiation Processes for Problem Solving (Wolters Kluwer 2020).

The extent power can influence negotiation

In a political negotiation, a mediator that is a great power with military, political and economic resources may influence parties to minimise risks and uncertainties by acting as a guarantor and sponsor of a negotiation process. It can bride and generate trust between parties. It can, alternatively use coercive bargaining and alter or affect the structure and distribution of power. Thus, a party with power can shape the structure and distribution of powers between the parties. However, it role must be more than just a party to a negotiation, but a sponsor and a guarantor of the desired outcome with minimal risks and uncertainties. This may require a continuous process of attempting to gain more control over the other. Such a process of entrapment shifts the power between the parties with visible effects. This does not mean that the party with more control has absolute power. Such exercise of control must be organised with thorough decision making, treat reduction, minimum goal setting and accountability of decision processes and outcome. In this whole process, power should not be used to control the outcome of the negotiations if a party desires to avoid entrapment. It should be used to control the environment of the negotiations to avoid entrapment. Thus, the exercise of power has a limit. It should not be used to the extent that it controls the outcome. It should be reasonably used to control the negotiation environment in order to achieve the desired structure and distribution of powers, which is the interests the parties desire. Power must be used to achieve the desired interest, but the positions of the parties must not be to have absolute control of power. Positions are changeable. They correspond to the current bargaining stance in regard to its or the other party’s demands, which can pressed extreme depending on the extent of control that a party can exercise.

1. Institut international pour l'analyse des systèmes de haut niveau (Laxenburg), International Institute for Applied Systems Analysis, Escalation and Negotiation in International Conflicts (Cambridge University Press 2005) 280.
2. Ibid, 133.
3. Ibid
4. Ibid

Will power play a key role if parties adopt a problem-solving negotiation approach? If parties could identify underlying needs and interests, they can understand that if they are complementary and not identical value systems, they can achieve joint gains, without either of them giving up any interests. This may work whether parties do not have strong opposite interests or positions. However, such approach may deviate parties from resolving disputes regarding important legal and political principles or that such approach may legitimise all needs of the parties. Thus, parties may not opt for this approach and every needs will not be legitimise, which again will lead to exercise of power to control the bargaining processes.

Interest is the ultimate objective. Positions act as the standard for parties to start negotiating or the apparent cause of conflict. Power is the ultimate tool to pursue interest and it uses positions to that effect. The reason why power is the ultimate tool is that even a weaker party also attempts to source its power from other third parties to push the stronger party to its desired direction or counter the stronger party. It comes up with its own action or counter action. It appeals to common interests, solutions to common problems, conditional exchange of promises, building relationships, or use of rules. If it were only positions and interest, weaker parties do not have any holding in a negotiation and they would not try these options of deriving power to shape other parties positions.

1. Ibid, 232.
2. Carrie Menkel-Meadow, ‘Lawyer Negotiations : Theories and Realities -What We Learn From Mediation’ 56(3) (1993) Lawyer Negotiations: Theories and Realities 361-379, 367.
3. Carrie Menkel-Meadow, ‘Lawyer Negotiations : Theories and Realities -What We Learn From Mediation’ 56(3) (1993) Lawyer Negotiations: Theories and Realities 361-379, 367.
4. I. William Zartman, Negotiation and Conflict Management: Essays on Theory and Practice (Routledge 2008) 113 -114.
5. Ibid.

Conclusion

Negotiation is driven by positions, but ultimately by interests. Power enables the achievement of interests. A continuous bargain of interests is not only a negotiation process but a power struggle. Only focusing on positions will lead to unwise outcomes. It cannot be independent of interest, which is the main driver. A good outcome of a negotiation would be when parties use their power, strong or weak, to shape the negotiation environment tin order to guarantee the desired outcome. Power is what it matters in a negotiation.

Part B

BHI must understand the key points in a negotiation, the approaches to adopt and the strategic planning to address the conflict and resolve it.

Four key points. While entering into a negotiation, a party must know four points. The first point is it should know its BATNA, which is the best alternative to a negotiated agreement. The current conflict has multiple parties where the concerned respective interests are strong with parties exercising higher level of powers. The current case has BHI, retailers and the NGO with stakeholders belonging to these parties. The conflict is a contingent conflict that needs more resources to achieve their respective interests given that BHI may need to look at stem cell that are not from aborted human foetuses, but donated aborted foetus or donated stem cells under regulatory compliance and donors consent.

1. Richard Luecke, Harvard Business Essentials Negotiation (Harvard Business School Press 2003) 13.
2. Robert A. Ullrich and George F. Wieland, Organization Theory and Design (R. D. Irwin 1980).
3. Carrie J Menkel-Meadow; Andrea Kupfer Schneider and Lela Porter Love, Negotiation Processes for Problem Solving (Wolters Kluwer 2020).

Negotiation occurs when a party do not generally have the power, but it gives them an advantage. Thus, getting these bargaining positions will help a party negotiate better. The second point is thus reservation price that BHI must set in order. For example, if the party know the walk away or reservation price, which is the least favourable point at which a party will accept a deal, this can serve as BATNA. For example, if the deal is about compensating the donors of aborted foetuses or some tax or contribution to health care or compliance with a particular law, this is the BATNA of BHI. BHI will have a minimum to maximum reservation price or options that could be laid out in the negotiation with the Group. If Group does not agree to any of the options, BHI can take legal actions against them. This can lead to ZOPA, where the parties have a possible agreement. Knowing the range of reservation price, BHI can settle the conflict with the Group. This can lead to the third point, which is a possible agreement with the Group. The fourth point is it is the value creation through trades. If parties could create values for each other by trading its positions, for example BHI complies with regulatory requirement or compensation to donors and the Group instead of protesting promote BHI and the social good that BHI is doing, they could get an integrated negotiations. Thus, this exchange and integration of each other value system benefits the parties mutually.

Rights-based and interests-based negotiation. Interaction between corporations, like BHI, and non-profits like the Group are increasing due to corporate interest in establishing credentials for its corporate social responsibility (CSR). BHI must embrace a political notion of CSR. BHI must actively encourage non-profits to strengthen their ‘downward accountability’ mechanisms. BHI must not see the Group as a tool for a comparative advantage in a market place. It must actively support the Group’s independence and critical capacity. In this context, BHI must start its negotiation process by analysing the ‘rights-based’ strengths of its position and weaknesses. BHI must analyse whether or not research based on stem cells taken from aborted human foetuses comply with all necessary rules and ethics and whether or not their products signify BHI’s commercialisation of aborted foetus. In that context, BHI can assert its rights while in negotiation. Its weaknesses will be only when BHI does comply with regulatory compliance and social consensus. In respect to the Group, BHI has the dossier of the conduct of the Group in Canada, the witnesses and the names of members of the Group who caused the harm. BHI can use this weakness to plan its bargaining strategy.

1. Richard Luecke, Harvard Business Essentials Negotiation (Harvard Business School Press 2003) 23.
2. Richard Luecke, Harvard Business Essentials Negotiation (Harvard Business School Press 2003) 13.
3. Ibid, 23.
4. Ibid, 24.
5. Ibid, 13.
6. Ibid.
7. Ibid, 26.
8. Barbara S. Barron and Lawrence W. Kessler, Slovin V. Slovin: Case File (Wolters Kluwer 2015) 69.

Moving on to the next negotiation phases, BHI must identify its interest-based issues. BHI’s interest lies in producing pharmaceutical products out of the research findings from the aborted foetus for the social good. BHI must evaluate the degree of this issue whether or not it is shared with the Group. It must evaluate its strength of commitment of the value out of its research and the supply of pharmaceutical products. On the opposite, the Group will also evaluate the degree of issue they have against BHI and determine whether BHI is truly committed to social good or not commercialising the use of aborted foetus.

1. Dorothea Baur and Hans Peter Schmitz, ‘Corporations and NGOs: When accountability leads to co-optation’ (2012 106(1) Journal of Business Ethics 9-21.
2. Ibid.
3. Ibid.
4. Ibid.
5. Barbara S. Barron and Lawrence W. Kessler, Slovin V. Slovin: Case File (Wolters Kluwer 2015) 69.

Strategic planning. In a negotiation, BHI must have a strategic planning based on their rights and a planning based on interests. In the former, BHI must assess how much the Group will modify its demands or offers. In the latter, BHI must assess the different positions and then analyse them to arrive at a mutually agreeable accommodation. The point to remember is to set potential alternatives to cope with any future changes during the negotiation, and areas of compromise and exchanges. The focus should be that the other party, which is the Group always intends to reach an agreement. Thus, BHI must visualise potential justifications from the Group and its responses to such justification. In all these regard, BHI can use the dossier to modify any demands of the Group and shape the agreeable compromise.

Having a map or a plan incite confidences to take actions. Taking actions is more important that trying to head the right direction. However, negotiation needs wit and initiative towards the desired interest. A plan provides a platform and it sharpens awareness as to what part of the negotiation has specific characteristics that enables reconsidering positions. There has to be constant vigilance to improve the negotiation strategies. What is important is the BHI must focus on an interactive conflict resolution (ICR) approach. It should focus on communication and positive social interactions. ICR is considered efficient from a social and an economic perspective. It is considered the greatest potential to realise socially optimal outcomes.

To conclude, BHI must understand the conflict is a contingent conflict that can be resolve by meeting certain condition. It must identify such conditions, whether it be potential ethical or regulatory compliances. As it does not have power currently to stop the protest, BHI should use this negotiation to its advantage by setting a walk away or reservation price, including meeting the conditions or using the option of taking legal actions against the Group. Knowing the bargaining positions will enable a possible agreement where parties can benefit each other by trading values. BHI can employ the dossier to get this agreement in its advantage. While doing so, it must employ its rights as a company that can manufacture and trade in the products using the research results from using the aborted foetus. Its interest lies in continuing the research and manufacturing the trade. Thus, it can find evaluate its commitment to the value of this interest against the interest that the Group has in protesting against BHI. During the implementation of the strategic planning, BHI must have alternatives and options based on the rights, interests and the value that they could trade with the Group. Simultaneously, it should employ its knowledge of weaknesses of the Group (the dossier), their rights and their interests. An advantageous negotiation could be achieved if BHI can create an environment of interactive conflict resolution. BHI commits to legally allowed amendments meeting social commitments and at the same time it prevents the Group from causing them harm by using options of rights, interest based approach and using legal actions based on the dossier information.

1. Ibid
2. Ibid, 70.
3. Michael Wheeler, The Art of Negotiation: How to Improvise Agreement in a Chaotic World (Simon & Schuster 2013) 19-21.
4. Ibid
5. Lorne Owen, Wayne Howard and Mark Waldron, ‘Conflicts over farming practices in Canada: the role of interactive conflict resolution approaches’ (2000) 16(4) Journal of Rural Studies 475-483.

Part C

Part A is limited in its analyses between the interaction between positions, interests and power. It reflects on the weighing approach that parties adopt in a negotiation considering the degree of parties’ interests and power. Part A focuses on the close link between interest and power and their intensities that define parties’ negotiation decisions. Part B also analyses the degree of interests and power that BHI and the Group hold. In that respect, both the parts considers the power elements while laying out the negotiation process.

Part A identified different kinds of conflicts to understand the issues at stake and the solutions that the parties desire. One of the conflicts is contingent conflict, which is identified in Part B as the applicable form of conflict. As such, the structure of the advise that BHI must undertake is based on meeting reasonable and advantageous contingents. Part A shows that if the negotiation has a “mirroring effect”, there cannot be any resolution. The answer to addressing this problem is reflected in the four points discussed in Part B, including BATNA, ZOPA, reservation price and the value trading. Part B show more practical application of negotiation techniques where Part A is focus more on the higher role of power in negotiation.

Part A undervalues negotiating over positions in respect to wise outcome. Position is more or less seen as giving them up to come to an agreement or all positions may be legitimise. However, Part B focuses on all available options and approach that are strategically analyse and place in order to be used when necessary. One thin common is that Part and Part B focuses on interest. Part A says that position and interests cannot be independent. In one way, Part A also state similar stand as Part B, which is all elements in negotiation cannot be ignored. However, Part A shows that negotiation is driven by power in order to pursue the interest whereas Part B focuses more on the weighing approach with all negotiation tools handy.

What is interesting is that power is a continuous exercise of control over the negotiation. This is shown by Part A. Part B shows the same although in a more strategic manner. Part A shows that power must be exercise not to control the outcome as there would be deadlock of negotiation, but to reduce goal setting, accountability of decision processes and outcome. Positions are changeable and its limited use of power can have the desired effect of beneficial distribution of powers. As power is changeable, so does is the bargaining elements. Part B shows this when it talks about flexible reservation price and exchange of value system. Rights-based and interests-based negotiation is a sign of use of limited power that does not control the outcome. Weighing of strengths and weakness related to BHI and the Group is a sign of limited exercise of power. BHI’s strategic planning based on their rights and a planning based on interests is weighing its rights, interests and positions and having access to the dossier is trying to gain more control over the Group. Part A points out resolution-based approach that should be avoided. This is found in the interactive conflict resolution in Part B. Negotiation is not only about what power one has, but considering all elements step by step in a strategical order with continuous gauging of what power could be used to push one’s interest over another. The last point is the one common point between the two parts.

Books

Barron BS and Lawrence W. Kessler, Slovin V. Slovin: Case File (Wolters Kluwer 2015)

Institut international pour l'analyse des systèmes de haut niveau (Laxenburg), International Institute for Applied Systems Analysis, Escalation and Negotiation in International Conflicts (Cambridge University Press 2005)

Landau J and Elio Borgonovi, Relationship Competence for Healthcare Management Peer to Peer (Palgrave Macmillan 2008)

Luecke R, Harvard Business Essentials Negotiation (Harvard Business School Press 2003)

Menkel-Meadow CJ, Andrea Kupfer Schneider and Lela Porter Love, Negotiation Processes for Problem Solving (Wolters Kluwer 2020)

Ullrich RA and George F. Wieland, Organization Theory and Design (R. D. Irwin 1980)

Wheeler M, The Art of Negotiation: How to Improvise Agreement in a Chaotic World (Simon & Schuster 2013)

Zartman IW, Negotiation and Conflict Management: Essays on Theory and Practice (Routledge 2008)

Journals

Baur D and Hans Peter Schmitz, ‘Corporations and NGOs: When accountability leads to co-optation’ (2012 106(1) Journal of Business Ethics 9-21

Menkel-Meadow C, ‘Lawyer Negotiations : Theories and Realities -What We Learn From Mediation’ 56(3) (1993) Lawyer Negotiations: Theories and Realities 361-379.

Owen L, Wayne Howard and Mark Waldron, ‘Conflicts over farming practices in Canada: the role of interactive conflict resolution approaches’ (2000) 16(4) Journal of Rural Studies 475-483

Continue your exploration of Post Brexit labour shortages effecting businesses in area of logistics with our related content.