The Power Balance in Negotiations
People weigh the costs of negotiating against the alternatives. Negotiation involves compromise and so most prefer the status quo. Those who wish to change the status quo do so by raising the costs of doing nothing. Of course rarely do the costs fall solely on the other party.
These may be financial costs; as I write we see the EU planning to ban landings of mackerel from Iceland and the Faroes in protest against those countries’ unilateral increase in the amount of fish they allow their fishermen to land. The loss to one Faroese skipper was put at £400,000 when his boat was turned away from a Scottish port; however the fish processing plant in the town was left with nothing to process.
They could be social or political costs; in Egypt the people are protesting on the streets demanding the overthrow of President Mubarak; so far all he has done is to fire his cabinet. In the UK the trade unions are threatening strike action in protest against the government’s austerity measures in the (vain?) hope of getting them to do a U turn. Strikes cause the strikers to lose wages.
They could involve time as a means of pressuring the other party. “Talks between Aer Lingus and its cabin crew ended in deadlock last night. The industrial dispute escalated this week with 288 cabin crew being taken off the payroll. A number of flights have been canceled every day, with staff refusing to work what they called ‘anti-family’ rosters. It is said that a deep gulf still remains between the two parties and it may be some time before the issues are resolved.” Canceled flights mean loss of revenue to the airline.
Strikes, lockouts, blockades, demonstrations and riots are all attempts to increase the cost of doing nothing and are usually a response to lack of flexibility in the other party. It used to be said