Table of Contents
Introduction and Reference
1. Definitions
1.1 War and negotiation
1.2 Strategy and tactic
2. The elements of strategy
3. Strategic reserve or holding back information
4. The surprise
4.1 The surprise in war
4.2 Surprise in negotiation
5. Negotiation is the continuity of company policy
Introduction:
Carl von Clausewitz, born on the 1. June of 1780, ranks as one of the greatest war-philosophers in history. His policy-making say of war as the continuing of policy with other methods changed the looking at war fundamentally.
In the last two decades, the studying of his main work From War (orig. Vom Kriege) became popular for managers because of it´s basic strategic statements and the idea of seeing business as a war.
I want to say that I don´t really like the idea to see business or a negotiation as a war, but the still existing relevance of Clausewitz´s theories should be out of question.
Being a business student, a detailed study of this strategic classic is not a part of my university education and so this work is just based on my private study of the German written original book, without having further reading.
This work tries to discuss similarities and differences of some strategic statements of Clausewitz with common opinions in the business-negotiations field. As the second reference after From War (Rowohlt Taschenbuch Verlag, 12th run, November 2003), The Negotiator´s Handbook, written by George Fuller, is used.
Dominikus Plaschg, 29.03.2004
1. Definitions:
1.1 War and negotiation
Clausewitz defines war as
an act of violence, to force the adversary to fulfil our will , while www.wordiq.com defines negotiating as the process whereby interested parties resolve disputes, agree upon courses of action, bargain for individual or collective advantage and/or attempt to craft outcomes which serve their mutual interests.
The qualified question is: Is it useful to compare a general field like war, with a more detailed aspect of business like a negotiation?
The answer is this: It´s not in my interest to put both terms on the same level, but to show that war has the idea of violence and using power in all it´s aspects, while negotiating without a common interest is unthinkable.
But still, negotiations are done in a certain war style: you hold back information (if possible), you have hidden agendas, you maybe use distraction tactics and so on
Also, war needs, like a negotiation, two parties. Without confrontation a war is just a possession of land.
1.2 Strategy and tactic:
In general it can be said, that a strategy is a long term plan, while tactic is short term orientated. In this sense, a business plan follows a certain strategy, while a negotiation deals with immediate problems and is tactic. The problem is, of course, that also a negotiation must have it´s concrete plan, a strategy. Clausewitz itself notes that parts of strategy planning must continue in tactic. Not to be lost in useless hair splitting, a negotiation must have a concrete strategy and deals with tactic at the very point of bargaining.
2. The elements of strategy:
Clausewitz divides strategy into following elements: the moral, the physical, the mathematical, the geographical and the statistical.
In a negotiation sense, these categories can be interpreted as the spirit of the negotiators (the moral), the technical abilities of the negotiating team (the physical), the interplay of both negotiating parties (the mathematical), the business environment in which the negotiation takes place (the geographical) and finally the background and support of the company (the statistical).
These elements are, in my opinion, still relevant and should be regarded in every strategy development. While the common war-philosophy in Clausewitz´ days made the mistake, either to eliminate the moral aspects and making strategy mathematically calculable or to give everything into the genius of the commander and so eliminating a science of strategy itself, Clausewitz combined both elements logically and opened the way for realistic strategy-thinking.
3. Strategic reserve or holding back information:
A strategic reserve in an act of war means holding back soldiers for 1. the extension and renewal the fight, and 2. to be prepared for unexpected situations.
In an act of war, this reserve was essential in the strategic plan and therefore for the success of war itself. In business, a strategic reserve can be understood as a holding back of relevant information for known problems to have a significant advantage against your negotiating partner. But is this holding back still relevant in business negotiations? All the Clausewitz followers and win-loose thinkers will agree immediately. But Clausewitz can easily be misinterpreted he doesn´t advocate a strategic reserve at all costs, but is admitting that it should be build only if there is free capacity.
In our days, information is quite fluent and usually the negotiation parties are very well informed about each other. Because of this, holding back and protecting information became a more and more time intensive activity. Similar to Clausewitz, the advantage of an information reserve will be abrogated always then, when therefore a focus on the negotiation itself is neglected. A competitive edge of information is always compensated with the personal abilities of the negotiators. The only reasonable reason for having information reserves is then, when you want to have it to tackle deadlock situations. But this is still a two-edged sword when you are able to solve deadlock problems with this information, why haven´t you used it before? It might create further mistrust
4. The surprise:
4.1 The surprise in war:
The surprise is the basis of all war activities, she is the medium to gain dominance . The difference between strategy and tactic comes into the focus, because Clausewitz give the effectiveness of surprise in strategy more importance, because it succeed in an siginificant way much harder. This is in business practice still true the examples where a surprise in a general business activity are hard to find (but then much more important, those cases are often used as examples in business study). Clausewitz also admitted that surprise must be pandered through other circumstances, so the weaknesses of the adversary, and is not just based on the brilliance of the commander.
4.2 Using surprise as a negotiation tool:
The elements of surprise can be an extremely effective weapon in your arsenal of negotiating tools if it´s proberly employed. Besides that it can be used once, you should use it only when there is a stalemate and the prospects are bleak for making further progress.
Here is major difference: While it is in war a basis of all activities, the negotiation literature knows about the problematic of using this tool. It is the general problem of misusing power: The negotiation partner can close the negotiation and the deal is cancelled, or de just can be mistrustful and the communication between the teams is disturbed.
But Clausewitz realized that surprise is not just because of one´s brilliance. Having enough and very careful preparations, almost nothing could be a surprise. Without having the risk of shoot backwards, a good surprise can be used with information you also haven´t known time before (an unexpected offer from an other company for example).
A still open question is: What is the difference between using a strategic reserve (in a business sense) and a surprise? A strategic reserve is a part of your surprise tools. But a good surprise is often caused by good timing. Having other offers from different companies is the normal way, using experts for detail questions are common
But it is the timing which makes the difference. To start a diversionary tactic (or what ever) in the unexpected moment can give you time, better control or just more power in a negotiation.
5. Negotiation is the continuity of company policy
Clausewitz´ culture historical output was it, to bring war into the position where it is (or should be) nowadays, an integral part of policy. Interestingly he was often misunderstood, into the exact other direction of his meaning: To give war the power of policy.
But policy has to destine the aim of war war can never act independent from these aims or should not try to reach everything technically possible. Furthermore is war not an affair which begins with declaration of war and ends with the capitulation or the peace treaty of a country. Business relationships between two nations must be still possible after a war, always, there must be a place for further communication.
Many of these things can be said similar for negotiations. A negotiation is never an independent act, never should it act independently from company policy, never try to get all technically possible but to reach long-term effects. Always, there must be place for further communication. Sometimes it´s even better to loose one negotiation in order to keep business in contact. As you give and get within a negotiation, you give and get in negotiations. The simple formula we want the best (e.g. product) for the cheapest price at all costs is neither practically appropriable nor target-oriented.
[Eine Seminararbeit aus meinem Auslandsemester in Finnland 2004.]
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