1. 12-1 McGraw-Hill/Irwin ©2006 The McGraw-Hill Companies, Inc., All Rights Reserved CHAPTER TWELVE Coalitions

2. 12-2 McGraw-Hill/Irwin ©2006 The McGraw-Hill Companies, Inc., All Rights Reserved Situations with More than Two Parties Variations on a three-party negotiation: 1.One buyer is representing the other and two negotiations are occurring 2.The seller is conducting a sequenced series of one-on-one transactions 3.The seller is about to unwittingly compromised by the buyers (this happens when the parties form coalitions or subgroups in order to strengthen their bargaining position through collection action).

3. 12-3 McGraw-Hill/Irwin ©2006 The McGraw-Hill Companies, Inc., All Rights Reserved A Seller and Two Buyers

4. 12-4 McGraw-Hill/Irwin ©2006 The McGraw-Hill Companies, Inc., All Rights Reserved What Is a Coalition? Interacting groups of individuals Deliberately constructed and issue oriented Exist independent of formal structure Lack formal structure Focus goal external to the coalition Require collective action to achieve goals Members are trying to achieve outcomes that satisfy the interests of the coalition

5. 12-5 McGraw-Hill/Irwin ©2006 The McGraw-Hill Companies, Inc., All Rights Reserved Types of Coalitions Potential coalition: an emergent interest group that has the potential to become a coalition by taking collective action but has not yet done so. –Two forms: Latent coalitions –Emergent interest group that has not yet formed Dormant coalitions –Interest group that previously formed, but is currently inactive

6. 12-6 McGraw-Hill/Irwin ©2006 The McGraw-Hill Companies, Inc., All Rights Reserved Types of Coalitions Operating coalition: one that is currently operating, active, and in place. –Two forms: Established coalition –Relatively stable, active, and ongoing across an indefinite time and space –Members represent a broad range of interests Temporary coalition –Operates for a short time –Focused on a single issue or problem

7. 12-7 McGraw-Hill/Irwin ©2006 The McGraw-Hill Companies, Inc., All Rights Reserved Types of Coalitions Recurring coalitions: may have started as temporary, but then determined that the issue or problem does not remain resolved –Members need to remobilize themselves every time the presenting issue requires collective attention

8. 12-8 McGraw-Hill/Irwin ©2006 The McGraw-Hill Companies, Inc., All Rights Reserved How and Why Coalitions Form and Develop When coalitions form: Parties come together to pool efforts and resources in pursuit of common or overlapping goals Control over resources becomes the basis for two critical pieces of the coalition formation process: –What each member brings to the coalition –What each member should receive if the coalition forms

9. 12-9 McGraw-Hill/Irwin ©2006 The McGraw-Hill Companies, Inc., All Rights Reserved How and Why Coalitions Form and Develop Coalition formation is studied by: –A classic coalition game: The 4–3–2 game –Real world examples: The European Economic Community (EEC) Coalitions form to preserve or increase resources Coalitions form in order to avoid a poor outcome that will occur if individuals acts alone (a “social dilemma”)

10. 12-10 McGraw-Hill/Irwin ©2006 The McGraw-Hill Companies, Inc., All Rights Reserved How and Why Coalitions Form and Develop How coalitions develop: Coalitions start with a founder –Successful founders have extensive networks –Founders’ benefits from early coalitions are likely to be small Coalitions build by adding one member at a time –The founder finds an ally; –The founder can benefit if he or she understands the others’ interests

11. 12-11 McGraw-Hill/Irwin ©2006 The McGraw-Hill Companies, Inc., All Rights Reserved How and Why Coalitions Form and Develop Coalitions need to achieve critical mass –Find their “ joining threshold” A minimum number of people get on board Others join because friends and associates are members Coalitions exclude weaker members who can’t contribute

12. 12-12 McGraw-Hill/Irwin ©2006 The McGraw-Hill Companies, Inc., All Rights Reserved How and Why Coalitions Form and Develop Linking new members—“ties”—become critical: –Strong ties: a new member who can bring a lot to the coalition, but demands a lot in return; –Weak ties: a new member who only brings a small amount to the table—enough to leverage the coalition to a “win”—but will not demand as much in return. Hence, weak ties can create strength for coalition founders: –Founders who have a large, diverse network of weak ties are often in a better situation to form a coalition than those who have a small, tightly organized network of strong ties

13. 12-13 McGraw-Hill/Irwin ©2006 The McGraw-Hill Companies, Inc., All Rights Reserved How and Why Coalitions Form and Develop Many successful coalitions form quietly and disband quickly –Revenge of the vanquished: pits coalitions against each other so that each one’s sole objective is to keep the other side from succeeding –Turmoil within: public acknowledgment of the coalition could damage future coalition activity –Desire for anonymity: the more publicly identified members become with the coalition, the more others may see their future actions as motivated by coalition membership and not by their own interests.

14. 12-14 McGraw-Hill/Irwin ©2006 The McGraw-Hill Companies, Inc., All Rights Reserved Standards for Coalition Decision Making Coalition decision rules –Three criteria to determine who receives what from the results of the coalition’s efforts Equity standard –Anyone who contributed more should receive more (in proportion to the contribution made) Equality standard –Everyone should receive the same Need standard –Parties should receive more in proportion to some demonstrated need for a larger share of the outcome

15. 12-15 McGraw-Hill/Irwin ©2006 The McGraw-Hill Companies, Inc., All Rights Reserved Standards for Coalition Decision Making Where is the strength in coalitions? When is “strength is weakness” true? –Any winning coalition obtains the same payoff –Actors are interchangeable –Contribute fewest resources, have least power or exert the least influence When is “strength is strength” true? –The more resources a party holds or controls, the more likely he or she will a critical coalition member

16. 12-16 McGraw-Hill/Irwin ©2006 The McGraw-Hill Companies, Inc., All Rights Reserved Power and Leverage in Coalitions How is power related to coalition formation? Strategic power –Emerges from the availability of alternative coalition partners Normative power –Derives from what parties consider to be a fair or just distribution of the outcomes Relationship-based power –Shaped by the compatibility of preferences between parties

17. 12-17 McGraw-Hill/Irwin ©2006 The McGraw-Hill Companies, Inc., All Rights Reserved How to Build Coalitions – Practical Advice Say no when you mean no Share as much information as possible Use language that describes reality Avoid repositioning for the sake of acceptance

18. 12-18 McGraw-Hill/Irwin ©2006 The McGraw-Hill Companies, Inc., All Rights Reserved Prospective Coalition Member Roles

19. 12-19 McGraw-Hill/Irwin ©2006 The McGraw-Hill Companies, Inc., All Rights Reserved Prospective Coalition Member Roles Allies –Parties who are in agreement with a negotiator’s goals and vision, and whom the negotiator trusts Opponents –People with whom a negotiator has conflicting goals and objectives, but who can be trusted to be principled and candid in their opposition Bedfellows –Parties with whom a negotiator has high agreement on the vision or objectives, but low to moderate levels of trust

20. 12-20 McGraw-Hill/Irwin ©2006 The McGraw-Hill Companies, Inc., All Rights Reserved Prospective Coalition Member Roles Fence Sitters –Parties who will not take a stand one way or the other –Fear taking a position because it could lock them in, be politically dangerous, or expose them to risk Adversaries –Adversaries are low in agreement and cannot be trusted.

21. 12-21 McGraw-Hill/Irwin ©2006 The McGraw-Hill Companies, Inc., All Rights Reserved Action Strategies for Building Relationships in Coalitions With allies –Affirm agreement on collective vision or objective –Reaffirm quality of the relationship –Acknowledge doubt and vulnerability with respect to achieving vision and collective goal With opponents –Reaffirm relationship based in trust –State vision or position in a neutral manner –Engage in problem solving

22. 12-22 McGraw-Hill/Irwin ©2006 The McGraw-Hill Companies, Inc., All Rights Reserved Action Strategies for Building Relationships in Coalitions With bedfellows –Reaffirm the agreement; acknowledge caution exists –Be clear about expectations in terms of support –Reach agreement on how to work together With fence sitters –State your position; find out where they stand –Apply gentle pressure –Focus on issue; have them tell you what it would take to gain their support

23. 12-23 McGraw-Hill/Irwin ©2006 The McGraw-Hill Companies, Inc., All Rights Reserved Action Strategies for Building Relationships in Coalitions With adversaries –State your vision or goals –State your understanding of your adversary’s position in a neutral way –Identify your own contributions to the poor relationship –End the meeting by restating your plan but without making demands