Bargaining power

Now, I need to caveat everything I’ve just said by acknowledging that the bargaining power between parties to a negotiation will have a significant influence on what each party can get away with. A party with all the leverage, who knows that the counterparty is hopelessly dependent on them, will likely be able to get away with being far more aggressive and resistant to compromise than they would if the counterparty had equal or greater bargaining power. 

Taking an aggressive approach likely won’t help to strengthen the relationship between the parties, but parties with bargaining power simply might not care. They may just want the best result possible. So when preparing for a negotiation, it’s worth bearing in mind who has the greater bargaining power. 

Consider questions such as: 

• Who is more desperate to get the deal over the line? 
• Who has other viable options? 
• Who can afford to walk away? 

If the other side has more bargaining power, think about whether there is anything you can do or say to mitigate this, for example seeking out other viable options as a backup.