POWER

NEGOTIATION POWER“The ability to bring about outcomes to your desire”

Power in action

Potential

influence

Power

Interests

Pressure

Rights

• Expert power / unique in-depth information

• Reward power / being able to reward others

• Coercive power/ being able to punish others

• Legitimate power/ holding an office or formal title

• Referent power/ respect or admiration because of attributes like personality, integrity, interpersonal style

Types of Power

POWER

RELATIONSHIP - BASED Referent power

• Legitimate power
• Reward power
• Coercive power

POSITION IN A ORGANIZATION

PERSONAL

Expert Power

INFORMATIONAL

CONTEXTUAL

Interrelated Perspectives of Power

• Never do an all-or-nothing deal
• Make the other party smaller (“Divide and conquer”)
• Make yourself bigger
• Build momentum through doing deals in sequence
• Use the power of competition to leverage power
• Good information is always a source of power
• Ask lots of questions to gain more information
• Do what you can to manage the process

Dealing with others power

CREATE A NEW SUPPLIER

POWERFUL SUPPLIERS

PLAY HARDBALL

CHANGE HOW YOU BUY

BRING NEW VALUE

• Can we afford to withhold or cancel orders?
• Do we have grounds for litigation?

• Are there potential entrants in adjacent markets?
• Can we vertically integrate to become our own supplier?

• Can we gain leverage by consolidating orders or by bundling or unbundling product or service packages?
• Do we really need everything we’re buying?

• Can we help the supplier enter new markets or industries?
• Can we help it reduce its business risk?

PLAY HARDBALL

CREATE A NEW SUPPLIER

CHANGE HOW WE BUY

BRING NEW VALUE TO THE SUPPLIER

HIGH

LOW

RISK GRID