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Current Employee

Negotiating Scenarios game

1

You know you are good at what you do and that there are a limited number of readily available candidates who could step into your shoes. The company however has made it clear that this is a year for pay restraint because of the recession and has indicated that they may have to entertain job cuts in order to remain competitive. How would you say that the bargaining power is distributed between you?

  • A 1 You have most of the bargaining power

    ANSWER COMMENTARY
    It’s always very easy to overestimate the bargaining power on the other side and under-estimate your own. There are 9 sources of bargaining power and they are rarely arranged 9-0 in favour of anybody. The company may have some scale, authority and some market power, all of which are sources of bargaining power, but you have your personal expertise, your skill as a negotiator and the fact that you might not be easy to replace (niche market power). So, you get most points here for (b) or (c).

    If you answered (d) you are underselling yourself. If you answered (a), well done for being confident but don’t overdo it - you may be exaggerating your strength.
  • B 3 It's about equal

    ANSWER COMMENTARY
    It’s always very easy to overestimate the bargaining power on the other side and under-estimate your own. There are 9 sources of bargaining power and they are rarely arranged 9-0 in favour of anybody. The company may have some scale, authority and some market power, all of which are sources of bargaining power, but you have your personal expertise, your skill as a negotiator and the fact that you might not be easy to replace (niche market power). So, you get most points here for (b) or (c).

    If you answered (d) you are underselling yourself. If you answered (a), well done for being confident but don’t overdo it - you may be exaggerating your strength.
  • C 4 Slightly more in favour of the company, but only just

    ANSWER COMMENTARY
    It’s always very easy to overestimate the bargaining power on the other side and under-estimate your own. There are 9 sources of bargaining power and they are rarely arranged 9-0 in favour of anybody. The company may have some scale, authority and some market power, all of which are sources of bargaining power, but you have your personal expertise, your skill as a negotiator and the fact that you might not be easy to replace (niche market power). So, you get most points here for (b) or (c).

    If you answered (d) you are underselling yourself. If you answered (a), well done for being confident but don’t overdo it - you may be exaggerating your strength.
  • D 1 The company has most of the bargaining power

    ANSWER COMMENTARY
    It’s always very easy to overestimate the bargaining power on the other side and under-estimate your own. There are 9 sources of bargaining power and they are rarely arranged 9-0 in favour of anybody. The company may have some scale, authority and some market power, all of which are sources of bargaining power, but you have your personal expertise, your skill as a negotiator and the fact that you might not be easy to replace (niche market power). So, you get most points here for (b) or (c).

    If you answered (d) you are underselling yourself. If you answered (a), well done for being confident but don’t overdo it - you may be exaggerating your strength.
It’s always very easy to overestimate the bargaining power on the other side and under-estimate your own. There are 9 sources of bargaining power and they are rarely arranged 9-0 in favour of anybody. The company may have some scale, authority and some market power, all of which are sources of bargaining power, but you have your personal expertise, your skill as a negotiator and the fact that you might not be easy to replace (niche market power). So, you get most points here for (b) or (c).

If you answered (d) you are underselling yourself. If you answered (a), well done for being confident but don’t overdo it - you may be exaggerating your strength.

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