Wednesday, June 10, 2015

Managerial Lesson from Merkel in Keeping Tsipras Waiting.

Merkel is  reportedly keeping Tsipras waiting for an appointment to meet her  at Brussels where both are there on an international meet. 

The managerial lesson in this quiet snub (if reports are true) is  that a negotiating tactic. It depicts, nay symbolizes : bargaining power of the supplier of credit. In this case it is much more that of  the bargaining power of the buyer .  (from the 5 forces analysis of Porter).

If your counter-negotiator is weak you may well hammer down the price. You could walk all the way with your price. You know that this is a risk high game and you are bidding up the price. Take it or leave it. You are too big to care for the counter negotiator. 

The message signalled  is that Greece is not high on priorities of Germany any more. Once you send out  message that the counter party is  weak, then  publicize it to be weak. Among Greeks who are moderate, Tsipras loses further face. Thus Germany sends out public signals that they do not care.  Managers have a lesson. Weaken your potential counter party and let it be known that he is weak. You are demoralising him and driving him to a corner to give you the price you know he will ultimately give. . 

For Tsipras, on the other hand, negotiations is a continuum of essential survival dialogues for managers whose tacit aim is to further his career objectives and Greek's growth. For Merkel, , these interactions matter only to display leadership skills. Merkel is clearly sending out as they are 'leader to follower' communication. Merkel  is signalling that leadership is not just a figurehead but automatically elevated further by the snub to a higher pedestal of a leader tough. Merkel becomes effective 'liaison 'chief  but with full control   and the message to the stakeholders is the unparalleled power of the German economy.  

That is also a lesson to competitors. 

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