Negotiating Power: Excessive Dedication to Closure: Case Studies
Negotiation can sometimes feel like a tricky dance, especially when the stakes are high and the pressure is on. One common pitfall in this dance is the escalation of commitment, a situation where parties become so invested in a disappointing deal that they find it difficult to back out, even when it would be in their best interest to do so.
In such situations, it's essential to remember that if your answers suggest a higher level of commitment to the potential deal than your counterpart, it doesn't necessarily mean they are trying to take advantage of you. Instead, it could be a sign that clearer communication and a more balanced commitment are needed.
So, how can you ensure a balanced commitment between parties and avoid escalation of commitment? Here are some strategies to employ:
- Define Clear, Multi-Step Processes: Establish distinct stages in the negotiation or dispute resolution process, such as negotiation, mediation, and arbitration, with specific rules for each stage. This prevents premature escalation by requiring parties to adhere to agreed protocols and re-evaluate their positions at each stage.
- Single Channel Communication: Designate lead negotiators and insist that all communications pass through them to prevent preemptive or backdoor pressure tactics. This controls escalation and keeps discussions balanced and transparent.
- Share Only Strategic Information: Disclose information that strengthens your negotiation position while withholding internal projections or demands that could be used to pressure you into over-commitment. This reduces the risk of one party feeling locked into unfavorable terms based on incomplete or asymmetric information.
- Mutual Negotiation of Commitment Provisions: Collaboratively design provisions for alternative dispute resolution or contract terms that reflect both parties’ risk tolerance and desired level of commitment. This ensures balanced, enforceable commitments rather than one-sided pressure to escalate.
- Set Realistic Limits and Verification Mechanisms: When using clauses such as escalation clauses, establish realistic maximum limits and require verification of competing demands to avoid unnecessary, costly escalation driven by guesswork or bluff.
- Focus on Non-Price Factors: Understand and use non-price factors such as timeline flexibility, contingency limits, and earnest money to build balanced offers that reflect mutual commitment rather than pushing purely on price or financial terms, which can trigger escalation.
By implementing these strategies, negotiators maintain control over the pace and depth of commitment, allowing for reassessment at each step and avoiding the common trap of escalating commitment beyond rational limits or shared agreement.
These insights come primarily from dispute resolution frameworks, contract negotiation best practices, and real estate negotiation tactics tailored to maintain balanced engagement and prevent pressure-driven escalation.
Remember, it's up to you to negotiate a more balanced deal and to be prepared to walk away if your counterpart won't cooperate. As Harvard Business School and Harvard Law School professor Guhan Subramanian advises, play "What if..." before negotiating to reduce the potential for escalation.
In the end, a successful negotiation is one where both parties feel they have achieved a fair and balanced outcome, rather than one where either party feels trapped or taken advantage of.
- In the realm of university faculty negotiations, applying strategies like defining clear, multi-step processes and sharing only strategic information can foster balanced commitments and prevent escalation of commitment.
- Leadership in the business sector can employ research-backed negotiation tactics, such as single channel communication and focusing on non-price factors, to ensure negotiations result in balanced commitments and avoid escalation of commitment.
- When business careers involve contract negotiation or real estate deals, understanding the potential risks of escalation of commitment and employing strategies like setting realistic limits and mutual negotiation of commitment provisions can help maintain a balanced engagement.
- For law professionals, understanding the role of leadership, clear communication, and commitments in negotiations can lead to more equitable resolutions in disputes and prevent the escalation of commitment.
