Seminar 13: Exchange Power and Negotiation 

Kenneth Boulding wrote that there were "Three Faces of Power."  He called them "threats, exchange, and love."  Exchange is simply the power you get through trades--getting something you want by giving someone else something they want.  This is simple negotiation, but it isn't always seen as a sources of power.  This section starts with an article that explains how negotiation does, indeed, give you power. We follow that with some basic ideas about different styles of negotiation and key negotiation concepts.

  • Exchange Power  -- Simply, exchange power means that I do something for you in order to get you to do something for me. However, this simple concept has formed the basis for very complex human interactions, for example our economic system.
  • Negotiation -- Negotiation is bargaining -- it is the process of discussion and give-and-take between two or more disputants, who seek to find a solution to a common problem. 
  • Win-Win / Win-Lose / Lose-Lose Situations -- The terms, "Win-Win," "Win-Lose," and "Lose-Lose" are basic concepts in dispute resolution. They are game theory terms that refer to the possible outcomes of a game or dispute involving two sides, and more importantly, what the implications of those outcomes are.
  • BATNA -- BATNA is a term invented by Roger Fisher and William Ury which stands for "best alternative to a negotiated agreement." Any negotiator should determine his or her BATNA before agreeing to any negotiated settlement.
  • ZOPA  -- The ZOPA is the common ground between two disputing parties. The ZOPA is critical to the successful outcome of negotiation, but it may take some time to determine whether a ZOPA exists.
  • Ripeness -- A conflict is said to be ripe once both parties realize they cannot win, and the conflict is costing them too much to continue. This tends to be a good time to open negotiations.
  • Ripeness-Promoting Strategies -- A conflict is said to be ripe once both parties realize they cannot win, and the conflict is costing them too much to continue. However, if the parties have not yet reached that stage, steps can be taken to encourage them to consider negotiating.
  • Distributive (positional) bargaining  -- In distributive bargaining the parties assume that there is not enough to go around. Thus, the more one side gets, the less the other side gets.
  • Interest-based (integrative) bargaining -- In integrative bargaining, the parties attempt to "enlarge the pie" or allocate resources in a way that everyone gets what they want.
  • Capacity Building -- In order to negotiate effectively, parties sometimes need to build their own or others' capacity to respond to their situation effectively by building knowledge, providing resources, or both.