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12<br />
Institute of Leadership & Management<br />
Anchoring<br />
Anchoring (Tversky and Kahneman, 1974) is the first offer presented and is<br />
important because it influences the final outcome. Your offer should be realistic but<br />
aggressive. You may well need to do plenty of background research to collect the<br />
information to help you decide on an appropriate and realistic anchor. Then, if your<br />
counterpart offers first, try to reanchor using objective information you collected in<br />
your research.<br />
Power in negotiating<br />
According to Spangle and Isenhart (2003), power is the degree of leverage or<br />
influence a party has during negotiation. It can come from many different sources<br />
such as their position or role in their organisation, their knowledge about the topic<br />
of negotiation or their counterpart’s needs and wants, or it may come from the<br />
strength of their BATNA. Power may be real or perceived. The relative power a party<br />
possesses influences the outcome of negotiation and so you should assess the<br />
power held by both parties prior to negotiating.<br />
Be aware of the extent of your authority when negotiating. What are you allowed to<br />
agree or commit to before you need to seek higher authority from your manager?<br />
Are you authorised to make agreements with customers or colleagues from other<br />
departments? Are you allowed to spend money or commit people or time, including<br />
your own, on behalf of your organisation? If so, to what extent?<br />
Copyright © The Institute of Leadership and Management 2015. These materials may not, in whole or part,<br />
be copied, reproduced, communicated, or otherwise distributed without the prior written permission of ILM.
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