Finding out how much authority the negotiator has is a critical piece of information to obtain very early in the process. The last thing you want to do is to make a deal, shake hands, and then have the person say, “I’ll get back to you in a week.” If you know ahead of time the limits of the negotiator’s authority, you can handle matters differently. For example:
- Present some of your information in writing so the person has a document to add to the presentation they will make to the ultimate decision maker. Then information they present is more in line with your presentation.
- Be willing to accept a slightly lesser deal within the authority of your opposite number rather than delay matters while higher approval is obtained.
The easiest and most comfortable way to find out how much authority someone has is just to inquire at the top of the first negotiating session. “Do you have to check with anyone else in order to close this deal?” is a comfortable way of asking.
Some people like to hide the limits of their authority and act as though they have sole decision-making power when, in fact, they have to get the approval of a lot of other, more-important people before they can act. In large organizations, the limits of authority are generally pretty well spelled out, so you can find out pretty specifically what the other person’s authority is. But you have to ask. It’s worth the effort to keep probing on this subject until you know.
Keep in mind that the limits on authority can be about a lot of things other than just the dollar limit that can be negotiated. Limits on authority can cover any aspect of the deal. Anything that commits another department or an affiliated company almost always involves getting approval from that other department or company.
In a large corporation, even people with a great deal of authority to enter business agreements can’t alter the corporate policy on whether disputes are settled by arbitration or litigation. That decision is made in the legal department for the entire corporation. So you want to find out the limits to authority that are important to you and to closing the particular deal that you’re working on.
Some people like to hide the limits of their authority and act as though they have sole decision-making power when, in fact, they have to get the approval of a lot of other, more-important people before they can act. In large organizations, the limits of authority are generally pretty well spelled out, so you can find out pretty specifically what the other person’s authority is. But you have to ask. It’s worth the effort to keep probing on this subject until you know.
Keep in mind that the limits on authority can be about a lot of things other than just the dollar limit that can be negotiated. Limits on authority can cover any aspect of the deal. Anything that commits another department or an affiliated company almost always involves getting approval from that other department or company.
In a large corporation, even people with a great deal of authority to enter business agreements can’t alter the corporate policy on whether disputes are settled by arbitration or litigation. That decision is made in the legal department for the entire corporation. So you want to find out the limits to authority that are important to you and to closing the particular deal that you’re working on.
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