Nov 24, 2017 in Research

Approaches to Relative Bargaining Power

The key features of Chamberlain and Kuhn’s approach to power

According to several scholars and analysts in the in labor relations do view bargaining power as the ability that a person has to influence the amounts of wages that they receive, more so where there are limits in place. Both Chamberlain and Kuhn’s came with an approach that was based on the model by Professor A. C Pigou. Through this approach, we can visit and look deeper into the concept of bargaining power. In this approach to power, there are some features that are explicitly evident as explained below.

The first feature is the power that is carried by collective bargaining. This is usually the most and the blanket feature that carries in it almost all the other features. That is, all the other features should at least involve collective bargaining since it is through this that people’s voice is hard, rather than where there is solo effort (Chamberlain & Kuhn). Where people are united in one voice, their plight is often looked into. Through this concept, then unions are able to bargain and negotiate on behalf of their members where the leaders will negotiate for and agree other people’s terms as if they were theirs.

Another approach that they emphasized was the issue of agreeing and disagreeing. In most cases, when people are discussing terms of employment there are usually hills and valleys in such discussions. Either of the parties will agree or differ with the demands or opinions of the other party.  Therefore, each of the parties will weigh their costs of disagreeing, and if they are too much to bear then they will opt to subject (Chamberlain & Kuhn). This is not the only possibility however, in some cases; the party that thinks that they have a higher cost of disagreement could opt to change the cost of the opposite party of agreeing to the terms or change their own costs of agreeing to these terms. For example, in a union vs. service commission discussion, the cost of disagreement for the service commission could be a strike, while the same on the union could be sack for their members.

The key features of Bacharach and Lawler’s approach to power

The major feature in the approach by both Bacharach and Lawler is the stakes that the people who are bargaining hold in the relationship. Where the matter under discussion is of a high stake, then the party that views so will be more aggressive and careful when bargaining rather than when the opposite is true. This then will mean that the parties that are negotiation will not only take much attention on the issues that are being discussed, but also how they relate among themselves. They could not risk their relationship even if they could want their opinion to be looked at, in the bargain.

Another feature that is explicit in this approach is the ability of one of the bargainers to manipulate how the other person will behave, and their coercion (Bacharach & Lawler, p. 80). This could at times be influenced by the tactics that they apply when bargaining that could overshadow those from the opposing side.  By doing this, the party that has more bargaining power is able to influence the other to give in to their opinion, or demands. Commitment in bargaining is also another factor that could give one party an edge over the other when it comes to bargaining power. In most cases, the issue at hand could be held as of high stake by one party, more than the other.  This would make him more committed than the other is which then also leads to then convincing then to give in into their demands. For example, a union bargaining for tea served in the office could get their bargain if the company views the issue as being very small such that they are less committed when bargaining, while the union on their side does hold the issue with high regards. 

Do the two approaches emphasize the subjective element of bargaining power? How? 

Yes they do. In both approaches, it is explicitly evident that there is room for subjection. In the first approach by Chamberlain and Kuhn, the parties will look at their cost of disagreeing to the terms of the other party hence giving room for subjection. When a party views it as if they stand to lose more when they do not heed to the demands of the other party, they will subject, and the opposite is true. For example, when bargain for a salary increment, the union could warn the company that their members will go on strike until they receive the increment they are seeking. On the other side, the company could opt not to increase the same and warn that all the striking employees will be sacked. Therefore, this will create a standoff until one of the parties will subject to the demands of the other and a mutually agreeable stand is reached.

In the second approach, by Bacharach and Lawler, either the parties could subject to the demands of the other since they could not risk jeopardizing their relationship with them. In such a case, they could overlook the matter at hand and seek to protect their relationship rather the interests or the issues that were of contention. Such could be the case where one person is discussing their terms rather than doing it collectively or through another person. Also, under the same approach, the party that has a less bargaining power could be forced to subject to the demands of the other simply because they have less bargaining power and not because their point of argument is stronger.

What separates the two approaches?

The first argument, by Chamberlain and Kuhn puts more emphasis on the collective bargaining, and reducing the chances that the bargaining party will lose. This is evident by the way they recommend that people should bargain for better term in collective units such as trade unions (Chamberlain & Kuhn). It also gives an approach where the parties that are bargaining will work to ensure that they not lose or incur much costs of disagreeing than it could have been necessary. When one of the parties organizes themselves in collective units, they increase the cost of disagreement of the other party. On the other hand, the approach by Bacharach and Lawler seeks to look into how the people who are bargaining must maximize on their ability to bargain. This is done through tactics and ensuring that the relationship between the parties is not compromised. This is where the parties will use tactics that will ensure that the relationship is still good, in fact, it can be viewed as a tactical advantage where one uses their position in the relationship to get a bargaining edge over the other. 

Despite the two approaches having a common goal, that is to achieve better terms from any of the party’s point of view, they are very different from how they are executed. Whereas in one the main aim is to reduce the cost of disagreement, the other seeks to utilize the tactical advantage to gain a bargaining edge. The similarity both approaches is that each party will try to utilize the weakness of the other so as to get an edge in the bargain. 

Related essays