Authority Limits

Authority limits is where a negotiator says that they don’t have the authority to make a deal and must first check with someone else. Of course, sometimes that is true. It only is a tactic if they don’t really need to check with someone about the negotiation or if checking with someone else is just pro forma.

Authority limits is a tactic that can be used in lots of different ways. Probably the most common way to use it is to get a delay. Frequently in a negotiation, you would just simply be able to say, "we need to think about this. Can I get back to you tomorrow?" You would only use the authority limit tactic if for some reason you felt that directly asking for a delay would in some way be to your disadvantage.

The authority limit tactic can also be used in a number of other ways as well. For example, you might use it to cement a win-win feeling and manage their perception of your walk-away position, a key point that we emphasize in negotiation training programs.

How would you do that? Let's say you had been negotiating with a buyer and you finally got the buyer to stop playing that “you'll have to do better game,” and they have actually put an offer on the table. You continued negotiating and you have now gotten the buyer up to a point where you believe you are either at or very close to their L.A.S.. And let's say that what they have offered to you is above your L.A.S. So you can close the deal here.

You could simply say, "yes we can accept that." But maybe your feel for the situation and the buyer tells you that if you jump on it that way, they may think that they left money on the table. That is not going to produce a win-win situation. Remember, they are only really going to be happy about the deal that they make if they are convinced that they reached your L.A.S., a key focus in our negotiation seminars (Continued on page 28)