The Power of Understanding

Increasing Negotiation and Leadership Performance through the Power of Understanding

Laws of Power 32: Acquire Power and Leverage

By Karen S. Walch

An ultimate goal of classic negotiation power and leverage practices is to become completely self-reliant and autonomous from others.  Realism theories assert that a disciplined strategy designed to preserve positional advantage over others is fundamental for abundance and success in a world of fear, manipulation and competition.  Classic laws of power require negotiators to:  1. See the world exactly as it is: immutable and full of inevitable conflict and competition; and 2. Win relative to others in a conflict world. This week’s law will address the premise of these classic laws as admirable and salacious, but not very relevant for 21st century negotiators.

Contemporary laws of power continue to call for discipline and realism.  However, negotiators today can acquire leverage more realistically through laws, norms, and practices of cooperation vs. competition.  “Seeing the world exactly as it is” today means to recognize and leverage positive social relationships as a method of success and improvement of one’s own self-interests and prosperity.

A reality of the globalized political economy is that there is a high degree of complex relationships and social networks that energize the modern economy.  Cooperation among organizations, individual negotiators, and, even, nation states serves as the foundation for a functioning global economy.  Only negotiators who are not very smart continue to advance their self-interests relative to others as opposed to in consort with others in a negotiation context.  A significant negotiation trend I see is an increasing leverage practice to recognize and creatively engage social networks in order to successfully achieve negotiation goals.

Today social scientists can measure, mostly (there continues to be a scientific debate about how to do this!), this intangible factor of leverage that classic theorists could not quantify or recognize.  Unlike the court and the battlefield of the classic theorists, today’s negotiators are more aware of social capital as a source of power and leverage in their negotiations.

There is increasing evidence about cooperation behaviors and practices which foster trust and improve efficiencies and successful outcomes in negotiations.  Scientists can measure the social capital of nation states, as well as individuals, as a value like a good or service which can be accumulated, generated, and consumed.

The social capital of a nation state or an individual negotiator offers a wealth of resources and networks that facilitate engagement with others in order to accomplish one’s goals.  When negotiators leverage this source of power they are able to secure benefits for themselves because of membership in social networks or organizations.  Their leverage in a negotiation stems from their underlying ability to influence and build mutually trusting relationships with people from diverse organizations or cultures.

Recently in one of my classes of global students, several of the Chinese students tried to describe to the rest of the class how social capital is understood in Chinese society.  Guanxi, as social capital, is central to Chinese negotiation and is used to describe a basic dynamic of personal and social networks in China.  In order to accomplish any negotiated goals in China, the students pointed out, it is necessary for any negotiator to understand guanxi.  For some Chinese, guanxi is seen merely as a general understanding between two people. With this kind of understanding, the negotiators will be aware of each others’ needs and will take them into account when negotiating –even without having to make a specific request.

Guanxi can also be described as something that could be ‘measured’ as a positive feeling within an interpersonal relationship and can be counted on as a moral obligation between friends to maintain the relationship and their personal connection.  When a negotiator develops guanxi, the leverage of that negotiator increases because when someone needs something to be done; others will exert influence on their behalf. When there is a personal connection between two people, for example, one is able to prevail upon another to perform a favor or service.

Guanxi is also sometimes seen as an ‘extended family’ through which members will call upon each other to help get something done.  The relationships formed by guanxi are personal and not transferable.  Therefore, the Chinese students recommend to negotiators who work in China to increase their leverage not through coercive means, but through their guanxi.  It is intangible, needs patience, but is readily available.

In the series, we have looked at how leverage can improve every negotiator’s ability to get what they need.  This week’s law encourages you to make an assessment of your social capital as you evaluate your own leverage, what steps to take to improve it, and how to exercise that leverage.

Disciplined practices of power and leverage need not be coercive practices as classic laws have conveyed, but as a dynamic force that can engage your networks and relationships.  The more you can appeal to other negotiators based on common goals, experiences, status, and membership, the more benefits you will enjoy based on access to information and resources that you would not have access to alone.

Law 32 reflection

1. How do your counterparts view their goals?  How does the achievement of your own goals depend on your counterparts’ goals?

2. How does the relationship maximize the achievement of your own goals?

3. How does the relationship increase the flow of information about decision makers, resources, and flexibility concerning your own goals?

Extra credit

For an example of how social capital can be measured, read  Estimation of Social Capital in the World, by Francisco Perez Garcia, et al (Fundacion BBVA, 2008).

48 Laws for 21st Century Global Negotiators: Join Thunderbird Professor Karen S. Walch, Ph.D., as she explores the laws of power for 21st century global negotiators. Each Monday she discusses one law and provides an exercise to identify and enhance individual negotiation power. Go to the main menu for the series.