POWER

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

Power

Potential

influence

Power in action

Rights

Interests

Pressure

Types of Power

• 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

Interrelated Perspectives of Power

INFORMATIONAL

Expert Power

CONTEXTUAL

PERSONAL

POWER

POSITION IN A ORGANIZATION

RELATIONSHIP - BASED Referent power

• Legitimate power
• Reward power
• Coercive power

Dealing with others 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

BRING NEW VALUE

POWERFUL SUPPLIERS

CREATE A NEW SUPPLIER

CHANGE HOW YOU BUY

PLAY HARDBALL

RISK GRID

BRING NEW VALUE TO THE SUPPLIER

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

LOW

CHANGE HOW WE BUY

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

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

CREATE A NEW SUPPLIER

PLAY HARDBALL

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

HIGH