Prof. Kamal Jain, IIM I: Threats Are Not Your Best Bet in Negotiation

By Kamal K. Jain

Take it or leave it. Now or never. My way or highway. If you have ever been involved in any negotiation, these statements will not sound alien to you.  Reflect and the memories of numerous occasions when you received a threat from your counterpart or you gave a threat to your counterpart will unfold in front of you like a flash. Threats and ultimatums are common words in negotiators’ dictionary.  We are not sure how the game ‘if you…then I…’ or ‘do this else’ a widely played game in negotiation escaped the attention of Eric Burn, the author of ‘Games people play’.

Donald G. Gifford in his book Legal Negotiation: Theory and Applications describes a threat as “a conditional commitment by a negotiator to act in a way that appears detrimental to the other party unless the other party complies with the request”.  The threatener thus attempts to induce concession from the other party.  A threat puts the burden of proper action or behavior on the person being threatened. The other person becomes the master of his own fate. A threat may be explicit or implicit. Its purpose remains the same – to get something from the other person which he/she will not otherwise give. However, threats are over utilized but often under rewarded tactics in negotiation.

Aleksander Solzhenitsyn said, “You only have power over people so long as you don’t take everything away from them. But when you’ve robbed a man of everything, he’s no longer in your power – he’s free again”

Threats are under rewarded tactics in negotiation: first, because people may not have a fair idea of their counterpart’s strength or may use threats without having an appropriate alternative. Consider a situation, for example, when an employee goes to his/her boss and threatens him to increase his/her salary by 10 percent else he/she will quit. And the boss said, “OK, quit.”  The employee is likely to be in a serious problem if he/she used the threat without considering the options if the other party did not succumb to threat.

Second, the person influenced by a threat has a feeling of loss and will often look for an opportunity to retaliate – and preferably retaliate in subtle ways. A threatened seller may take revenge later by overcharging for any additional service or in case buyer needs some specification changes.

Third, a threat may result into one time win but may spoil the relationship that may be important for future transactions/business. “Restoring relationship after a threat may be like putting Humpty Dumpty back together after his fall”, observed  Karrass on Negotiation Space.

Fourth, threats have a way of getting out of control. Threats may push a person to the wall. Russian poet and philosopher, Aleksander Solzhenitsyn said, “You only have power over people so long as you don’t take everything away from them. But when you’ve robbed a man of everything, he’s no longer in your power – he’s free again.” Shahrukh Khan in the movie Chennai Express gives a succinct message, “don’t underestimate the power of a common man.”

If as a negotiator you still feel the use of threat in your best interest, use threats without mixing it with anger. A research revealed that “threats were more effective than anger because threatening negotiators were perceived as more poised. Whereas anger was seen as heated and emotional, threats were seen as more intentional and credible.

Being aware of the downside of using threats, if as a negotiator you still feel the use of threat in your best interest, use threats without mixing it with anger. A research study published in the Journal of Applied Psychology (Vol. 96, 5) finds that anger isn’t as effective as a simple threat in getting people to concede.  

Digging deeper into the results, the research revealed that “threats were more effective than anger because threatening negotiators were perceived as more poised. Whereas anger was seen as heated and emotional, threats were seen as more intentional and credible. The threatening negotiator who shows poise and control is far more likely to follow through.”

You also need to assess your own credibility as well as the credibility of the threat itself. Your credibility depends upon a reputation of not bluffing, the history of using threats in the past and your own personality. 

If you have a reputation for staying true to your word or for being willing to sacrifice anything for your principles, your threat may sound to be more credible. “A threat may damage your reputation, your company, and the deal if you make empty threats in negotiation”, says HBS professor Deepak Malhotra in his article in Negotiation. Your threat will be credible only if the other side believes it’s in your best interest to follow through.”

Among many other strategies to make your threats credible, Deepak Malhotra suggests the use of increasing your cost of not following through. For example, before the management threatens the union to withdraw the strike or else they will move the production facilities to other location, it actually ships a part of the plant to other existing plant location involving a transportation cost. 

Among many other strategies to make your threats credible, Deepak Malhotra suggests the use of increasing your cost of not following through. For example, before the management threatens the union to withdraw the strike or else they will move the production facilities to other location, it actually ships a part of the plant to other existing plant location involving a transportation cost. The seriousness of the threat is now more visible to the union. The other person should also believe that you have the resources to follow through. If it is in the organizational context, your opponent should know that the organization would be willing to support you in taking the necessary action.

In order to make your threats credible let your opponent know your BATNA (Best Alternative to a Negotiated Agreement). Once your opponent realizes that you have other options, your threat sounds credible. However the way you frame your threat can make a huge impact on the outcome. Consider a scenario where you go to your boss and tell him that unless your salary is matched with the other offer that you have, you will quit your job verses going to your boss and saying that you would love to stay with the company but considering the other offer that you have it would be quite fair if your salary is matched with the offer.  

The best option for a person who receives a threat is to stay calm. “Much of your opponent’s power lies in his capability to make you react. Just as takes two to tango, it takes two to tangle”, says William Ury in the book Getting Past No. Don’t get panicky. The following situation explains it.

Subway Sandwich Shop –  a Man walks in and orders a sandwich. Then he takes out a gun and points it at the cashier. “Give me all the money that is in the cash register”

Cashier Responds: “How about $10 and the sandwich?”

They eventually agree on $20 and the sandwich.

The Moral of the story: “Trained Negotiators (and stupid cashiers) don’t have to worry.”

Besides keeping your calm, assess the credibility of the threat, assess your options, and remain focused on your interest.

Let us remind you of the advice offered by Paulo Coelho in his book The devil and Miss Prym: “There are two kinds of idiots – those who don’t take action because they have received a threat, and those who think they are taking action because they have issued a threat.” 

The author is Professor of Organizational Behavior and Human Resource Management at Indian Institute of Management, Indore. He can be reached at [email protected]. (A modified version of this article was published in the Hindu Business Line dated February 3, 2015 with the title “Why threats are not your best bet in Negotiation”.) Images courtesy morganmckinley, newsworks)