Know Your Limits and How to Protect Yourself

Mediation Minute

It often happens that one party appears to have greater bargaining power than the other. They may be bigger, have more money, have a history of fighting and you may feel overwhelmed.    How to handle an imbalance in power in negotiations is an important consideration in taking control and working toward a resolution. Factors to evaluate are:

  • Best Alternative to a Negotiated Agreement (BANTA). This can protect you from making an agreement you should reject and help you make the most of the assets you do have;.  Also, explore what is the worst alternative to a negotiated agreement.  Ask yourself “If I don’t settle today, what are the possible bad outcomes?”
  • Protecting yourself
    • Sometimes the fear of failing to reach an agreement will lead you to accept an unfair agreement.
      • Some negotiators establish a “bottom line” to protect against such an outcome.
      • The costs of using a bottom line are:
  • It limits your ability to benefit from what you learn during a negotiation
    • It inhibits imagination
    • It is often times set to high
    • It can put you in a “take it or leave it” mode
  • Know your BATNA
    • Standard against which any proposed agreement should be measured.
    • It is more flexible than a bottom line because it allows for comparison with imaginative solutions.
    • How to develop:
      • Invent a list of actions you might conceivably take if no agreement is reached
      • Improve some of the more promising ideas and convert them into practical options
      • Tentatively select the single best option
  • Should you disclose your BATNA?
    • If your BATNA is extremely attractive, yes.
    • If your BATNA is worse than the other side imagines, disclosure will weaken your position.
  • The easier and happier you can walk away from a negotiation, the greater your capacity to affect its outcome and shift the power in a negotiation. 

Despite your best efforts, a party may be stubborn or even aggressive in dealing with you. A better approach is to refuse to react to their behavior. When they assert their positions, do not reject them, when they attack your ideas, don’t defend them, when they attack you, don’t counterattack. With this approach, you may be able to break the cycle of positional bargaining.

In addition, look at the interests behind their position. Seek out the principles which the position reflects and think about ways to improve the position.  Consider asking them how they think their approach addresses the problem at hand. Discuss the principles underlying the other side’s position. Ask them what’s wrong with your proposal and consider asking them what they would do in your situation. Be sure to ask questions and then pause. Let them answer you. In mediation, encourage the mediator to follow your approach. This method of working with someone who is trying to exert their power may shift the balance and result in a settlement.