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Managing Board Negotiations

 

Disciplines > Negotiation > Negotiation Styles > Managing Board Negotiations

Power and control | Together and apart | Power deals and horse trading | See also

 

Top management teams often have to negotiate amongst themselves for the limited resources in the organization, whether it is budget, people or something else. Although this pattern appears largely in companies, it also happens at national levels, where a cabinet of ministers jostle for power and budgets.

Power and control

Something that defines the people at the top of the company is that they have, by dint of their position, significant control over the working lives of many people. The cogwheels at the top of the company turn a few degrees and the wheels at the bottom spin like mad. They also may control significant budgets, which they gain through potentially quite political negotiations and often at the expense of other directors.

People who rise to the top of the pile very often are both motivated by power and are very good at acquiring it and using it. The top team thus represents the most powerful people in the company who are skilled at managing and using that power.

Together and apart

The managing board has a unique dilemma in that, while they negotiate with one another for resources and may disagree about strategy or policy, they are still a single unit with a single purpose of sustaining and growing the company. This cohesive force provides a common drive in their negotiations and decision-making that pushes them towards agreement.

The board members thus experience contradictory forces and have to manage this dilemma of being both together and apart. As board members, they must appear as a single mind to employees, investors and the public at large. Yet as heads of their own functions, they must battle for resources and, as leaders one step below the ultimate position, they may build empires and seek approval of their chief.

Power deals and horse trading

The style of negotiation of board members, then, may well be quite political and often makes use of whatever forms of power they have at their disposal.

Whilst decision-making may appear as polite (or maybe not so polite) debate in the boardroom, much of the negotiation happens in the corridors of power or on the golf course. Alliances and coalitions may form and the use (and calling in) of favors are used to gain power and achieve goals.

Conflict at the top can actually be quite healthy and is better than a back-slapping country club or a timid following of the chief's orders. Open disagreement, where the benefits of shareholders, customers and employees are balanced and debated, will help create a healthy culture. Constructive criticism of alternative strategies will lead to a better way forward.

Executive conflict fails where personal ambition overshadows the real job of creating value for shareholders and other stakeholders. When power-play is used to grab control and discredit other board members, the net result is personal gain and company loss.

Sometimes companies indirectly reward this negative activity, with bonuses based on individual performance rather than team success. Sometimes also the boost to the sense of control is sufficient to motivate dysfunctional behavior.

See also

Control, Power, Politics

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