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Authority Limits
Occasionally, you will negotiate
without the final authority to reach an agreement. In such a case
you will have to bring the proposed agreement back to the
individual or group with the final authority.
Often, however, a negotiator
will state that their authority is limited when in fact they
either could reach the proposed agreement or they know that the
approval of the "higher authority" is all but
automatic. In such a situation, the use of authority limits
becomes a tactic.
One of the most common uses for
the authority limit tactic is to obtain a delay without directly
asking for one. In this way, the absent authority provides an
opportunity for the negotiator to go back, think through the
positions of each side, and to evaluate the proposed agreement.
The authority limit tactic can
be used in a number of other ways as well. For example,
occasionally the negotiator will say that they do not have the
authority to reach an agreement as proposed by the other party
but must go back and check. They later return to the bargaining
table with an affirmative response. The negotiator knew all along
that he or she could have said yes, but used the authority limit
tactic instead for effect.
The negotiator might have been
trying to show the other party that he "really went to bat
for him" with the higher-ups. Alternatively he or she might
be trying to indicate that it was hard to get approval and that
the other party really can't hope for any more concessions in
this negotiation.
Another use of the tactic is to
obtain a "no" from the authority even when the
negotiator could have said no themselves. The purpose here might
be to reinforce and cement the refusal to make concessions. It
might also be an attempt to make the negotiator appear as the
good guy and the organization or the higher-ups the bad guys. (Be
careful about painting your own organization as the bad guy too
often. This tactic can tend to backfire.)
Purchasers occasionally use the
authority limit tactic by delineating a range where they can make
the deal and indicating that anything in excess of that amount
requires lengthy review and approval. Thus, the purchasing agent
might indicate that he or she could purchase the instrument for
$10,000, but if the salesperson insists on $11,000, it has to go
through an approval process.
The salesperson might use the
authority limit tactic by stating that he or she knew that the
boss would reject the offer proposed by the buyer if it were just
presented verbally. However, the boss "just might"
approve it if it were presented in the form of a signed purchase
order.
You should always be concerned
about the authority of the other party. Try to determine as early
as possible their level of authority, or at least what they state
to be their level of authority. If their authority is limited,
you can try to involve the decision maker. If this is not
possible or you feel that it is tactically inappropriate,
continue the negotiations with an acute awareness that the person
you are dealing with either does not have, or says that he or she
does not have, the final authority. One way to deal with this may
be to use the person on the other side of the table as messenger,
getting points agreed to by the person with authority step by
step.
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