William goldman

C. The Nature of Power

Having defined power and having narrowed our inquiry to social interactions, we now advance several principles that are critical to a proper understanding of power differentials in negotiation.

1. Power is complex and situational

If one observed two individuals negotiating in a room and then attempted to calculate the precise power of each, one would find the task daunting. Given the numerous factors, both subtle and obvious, required for the calculation, the task may prove impossible. For example, the computation might include such factors as the physical strength, intelligence, organizational authority, confidence, deadlines, attractiveness, focus, instructions, group represented, stubbornness, and financial stake of each of the parties.28 Moreover, even if one quantified the respective power of the parties, it is likely that *11 another observer might well draw a different conclusion based on different criteria or differing weights. In short, the analysis of power can be extremely complex.29

This complexity has led one researcher to describe the concept as a “bottomless swamp”30 that renders impossible the creation of easily studied operational models.31 Power’s complexity stems no doubt from its highly situational nature-even slight changes in a setting may substantially affect the underlying power dynamics.32 For example, the chief executive officer of a large multinational corporation will likely have little power over a state trooper who has stopped the CEO for speeding. Similarly, even the President of the United States *12 will generally defer to directives concerning his health from his doctor.33 We cannot overemphasize this point. Parties who fail to understand the situational nature of power will perform poorly when they negotiate because they will look only to which side has greater strength and resources in an absolute sense. Instead, the critical test should be which party controls more of what the other party wants or needs34 at any given moment.35

2. Perceptions play a key role in power dynamics

During the Civil War, Confederate Major General John Bankhead Magruder, a well-known amateur actor, used his dramatic skills to thwart a threatened Union advance at Yorktown, Virginia.36 Despite having only 15,000 troops arrayed against 90,000 troops commanded by Union General George McLellan, Magruder boldly paraded his men before the advancing army in such a visible and *13 menacing manner that he convinced McLellan that a large force awaited him. Thoroughly intimidated, McLellan halted and prepared to lay siege, unnecessarily losing a month’s time in his campaign. In this case, perceptions played a greater role than the underlying reality.

Perceptions play a similar role in more traditional negotiations.37 The critical test of one’s effectiveness in a negotiation is what one has convinced an opponent that one can do, whether or not one can actually do it. Unless exposed as bluffers, parties that convince their opponents that they have more power than they really do will generally be able to exercise the power they have asserted.38 As a practical matter, the successful bluffer has the power that his or her opponent cedes in the negotiation. This phenomenon extends to an almost infinite number of settings: from the “poker-faced” card player who defeats a full house with a hand that holds a mere pair to the timid soul who manages to convince the playground bully that he has studied a lethal form of karate and will not hesitate to use it.

Why is negotiation power such a matter of perceptions? We believe it is because negotiation substitutes for the actual exercise of power,39 leaving each party to calculate, without knowing, the other’s *14 resources, determination, skill, and endurance. Absent the actual contest, each side must guess about the other’s power. This “guess,” mistaken though it may be, becomes the reality in each negotiator’s mind. Thus, power becomes a perception “game.”40 Depending on the situation, this can either work for or against a party. If one has successfully bluffed, one gains leverage in the situation, while if the other party has successfully bluffed, one loses leverage.41

Perceptions can also play a critical and confounding role even when no bluffing occurs. One of the most common and deadly perception traps is what we call a “negotiator’s bias” in bargaining situations.42 By this, we mean that the natural tendency of negotiators to enter deliberations with trepidation often leads to judgments, based on little or no evidence, that their opponents are negotiating aggressively and competitively, despite the negotiators’ sincere efforts to bargain cooperatively.43 These judgments, in turn, may be used to *15 rationalize combative behavior against an opponent that would otherwise not be justifiable.44

In a similar fashion, negotiators too often perceive, without good reason, that their opponents enter into a deliberation with substantially more power than the opponents actually have.45 Effective negotiators must learn to avoid these common perception traps and instead substitute clear and rational assessments. One must always seek to determine in as accurate a manner as possible the strength of the other side and whether the other side understands and appreciates its strength.46

*16 3. To have effective power, one must be willing to use it or be able to convince an opponent that one will use it

Given the fact that during the Vietnam War, the United States possessed a formidable nuclear arsenal and could have annihilated North Vietnam, one might ask why this greater “power” did not result in a U.S. victory.47 The answer is that the use of such awesomely destructive weaponry would have triggered a world-wide backlash and would have threatened international order. Indeed, the United States never seriously entertained using its nuclear arsenal. This unwillingness to use superior weaponry, coupled with the opponent’s recognition of such unwillingness, effectively neutralized this particular power advantage.

Similarly, individuals who possess great power, but who for one reason or another refuse to use it, lack effective power. For example, a compassionate boss who feels unable to fire a malingering employee or a timid judge who shies away from disciplining disruptive attorneys in the courtroom cannot be said to be powerful figures despite holding powerful positions. This point is particularly important in negotiation settings.48

4. Having greater power does not guarantee successful bargaining outcomes

Repeated studies confirm that power symmetry, rather than disproportionate power, is the most favorable condition for reaching agreement.49 Disproportionately greater power on the part of one *17 party in a negotiation often reduces the likelihood of a favorable outcome for the powerful party, producing what Professor William Ury calls the “power paradox”: “[t]he harder you make it for them to say no, the harder you make it for them to say yes.”50 Several reasons seem to account for this phenomenon. First, parties with greater power are often tempted to achieve their goals through coercion rather than persuasion, and this leads to resistance from those with less power.51 Second, those with less power and under pressure to acquiesce often will scuttle agreements perceived to be demeaning-even to the point of rejecting deals that give them more benefits than no agreement.52 Third, while weaker parties are initially more *18 likely to employ conciliatory tactics in negotiation,53 they may feel provoked to shore up their positions by making threats, adopting stubborn positions, or using punitive tactics in response to power plays by stronger parties.54 Finally, weaker parties may be so suspicious of the stronger parties’ intentions that they will refuse to agree even to terms that most observers would characterize as reasonable.

Why is it that interactions between parties of equal bargaining power are more likely to produce favorable outcomes than those with disparate power? In addition to removing the negative factors detailed above, symmetrical power tends to encourage good feelings between the parties,55 open parties to creative, deal-enhancing suggestions,56 and remove the temptation to use force and threats.57 Of course, there is no guarantee that power equality will result in favorable agreements, but it does tend to produce optimal conditions for such agreements.

*19 In pointing out the pitfalls associated with power disparities, we do not mean to suggest that greater power is necessarily to be eschewed or that it is undesirable. We do contend, however, that greater power is not an unmixed blessing nor is it guaranteed to produce expected results. In short, exercising greater power calls for subtle and nimble skills that are almost as demanding as those required for negotiating with less power.58

5. Power in negotiations typically arises from the dependence that each party has on the other

Most power involves the dependence of parties on one another.59 For example, one who negotiates the purchase of an automobile depends on the dealer to supply a suitable vehicle while the dealer relies on the customer to pay money for the car. Each depends on the other for a vital part of the transaction.60 In most relationships, power flows from the more dependent to the less dependent party.61 In the automobile sale example above, the price agreed upon might favor the dealer if the car is highly sought after and supplies limited, but tilt in the opposite direction if the car is widely available, especially from a nearby dealer with a large inventory. In the former case, the buyer would be highly dependent on the dealer; in the latter, just the reverse. The notion of mutual dependence is critical in negotiation. Those who focus only on their own dependence while *20 ignoring the other side’s needs and vulnerabilities should not be surprised to find that they end up in a weaker position than those who appreciate the parties’ mutual needs.62

6. Negotiation power depends less on the other side’s strength than on one’s own needs, fears, and available options

As a corollary to the previous point, we note that the essence of determining the relative power of the parties in a negotiation depends less on how powerful each party is in any absolute sense than on how badly each party needs or fears the other. This is where the concept of BATNA (Best Alternative To a Negotiated Agreement) proves useful. If one has a number of attractive alternatives to a deal with one’s opponent, one has great power regardless of the tremendous resources that the other side might have within its control.63

A full assessment of the parties’ power, however, requires a look beyond their BATNAs. Alternatives give negotiators leverage by establishing ways they can function without one another. But a proper power calculus also includes an assessment of what each party can do for and to the other. Professor Richard Shell calls the former “positive leverage” and the latter “negative leverage.”64 Positive leverage is “needs based” and negative leverage is “threat-based.” Positive leverage arises when one party can satisfy the other’s desires, especially if one has the unique ability to do so. For example, owning a particular plot of highly desired land or a record-setting homerun ball hit by a famous baseball player would make even the lowliest citizen *21 powerful in the eyes of one who desperately craves that particular item. Negative leverage arises when one can inflict damage on another or reduce his or her alternatives.65 For example, one of the ways that the Wal-Mart Department store chain has proved powerful in business is by drawing so many customers from small local stores in rural areas that the small competitors become unprofitable and go out of business. Thereafter, given the lack of convenient alternatives, even shoppers who might otherwise wish not to shop at Wal-Mart become customers out of necessity.66

In short, those who calculate the parties’ relative power by comparing one side’s strength to the other’s miss the subtleties of the power dynamic. Power in negotiation stems from what each side can do for and to each other, not from what each side can do compared to one another.

7. Power is neither inherently good nor bad

Although ever mindful of Lord Acton’s admonition that “[p]ower tends to corrupt, and absolute power corrupts absolutely,”67 we do not view the exercise of power as inherently bad68 or good.69 The *22 ability to do good things may require the use of power just as much as the ability to do bad things. During World War II, the Allies defeated the Nazis through their greater military and industrial might, not their superior moral standing. Similarly, those who have committed war crimes in the Balkans in recent years will face justice only if a suitably powerful force is deployed to arrest, indict, and try them. Much the same point can be made regarding negotiation. Those who lack power (or the appearance of power) in negotiation are unlikely to attain much success when they bargain.

D. Sources of Power

Before entering into a negotiation, parties to the process should always assess the power both they and their opponents bring to the table. Without a clear picture of the power dynamic, parties will either underestimate or overestimate the degree of flexibility they have in bargaining.

Given the situational nature of power, one should not be surprised to find that it flows from an almost infinite set of sources.70 Over the years, various commentators have classified the sources of power in different ways depending on the perspectives from which they have viewed it.71 In perhaps its broadest sense, power flows *23 along pleasure/pain channels. That is, those who can dispense the most desired pleasures or mete out the greatest unwanted pain are likely to be the most powerful in human interactions. In the context of negotiation power, we see at least four sources of power that bear discussion and analysis: (1) personal power, (2) organizational power, (3) informational power, and (4) moral power.72

1. Personal Power

When we refer to personal power, we mean the inherent individual traits that a person brings to a negotiation not directly associated with his or her organizational status.73 We include things such as a person’s intelligence, persistence, courage, physical strength, appearance,74 celebrity, memory, confidence, awareness, education, interpersonal skills, emotional control, intuition, friendliness, and willingness to take risks.75

In most negotiations, the parties try to “size the person up” by assessing the other’s personal power. Because personal power derives from so many sources, a proper assessment involves a complex weighing of the numerous strengths and weaknesses that each side brings to the interaction. Interestingly, brute strength-either physical or mental-may not be the key to successful negotiation. To the *24 contrary, studies of successful negotiators demonstrate that the key to favorable outcomes depends more on the ability to plan effectively, to persuade, to remain flexible, and to avoid unnecessary attacks than it does on raw displays of power.76 Recent studies of “emotional intelligence” tend to confirm that even in scientific research settings, where “brain power” would appear to be the most highly prized attribute one could possess, success attaches to those with excellent interpersonal skills as readily-if not more so-as it does to those with superior intellects.77

2. Organizational Power

Given the situational nature of power, it should surprise no one that organizations, which by their very nature are hierarchical and interactive (with power typically concentrated at the top and flowing downward), should play as large a role in power dynamics as personal power does.78 Organizations produce and enhance power for *25 fairly obvious reasons. They provide financial and human resources that vastly exceed those that can be mustered by isolated individuals. At the extreme, access to the controls of an organization or a nation can help an individual move from the position of an easily-ignored fanatic to a totalitarian dictator.79

Power flows to individuals in organizations simply by virtue of their position. A certain amount of power inheres in positions irrespective of the individual in the position,80 but motivated individuals can often increase the power of their positions by working hard and seizing available opportunities.81

Assessing power in an organization involves looking both to the formal power of a given position and to the actual control a position has within an organization. In many organizations, power is not necessarily distributed along the lines set forth in the organizational chart. This reflects the dynamic nature of these bodies, where *26 changes in the flow of information or resources may shift power from one sector to another as the organization evolves.82 For example, as information technology continues to grow in importance and to fuel productivity gains, one can foresee that information technology positions will grow in influence in most organizations.83

3. Information Power

We give special attention to information power84 because it so often tips the scales in favor of one party and because it is the power source most easily increased in negotiations. Negotiators may not change their looks, personality, job, wealth or strength overnight, but they can often obtain information that dramatically changes the negotiation dynamic in a relatively short time.85 The more information that a party has, the more likely it is that he or she can see the context of a given situation clearly and respond accordingly. This is particularly critical where decisions must be made quickly with limited resources. Warfare, where decisions carry life-or-death consequences, offers some of the most compelling examples of the strategic use of information. Two critical information sources-radar86 and the