How the Principle of Least Interest Applies to Business graphic

In any personal or business relationship, it’s ideal to have two parties who are equally invested in each other. Even if that’s not necessarily the case, both sides should treat other fairly.

Unfortunately, things don’t always go as they should. In a dating relationship or during a business negotiation, people can sense weakness and prey upon it. That type of leverage is the general idea behind the principle of least interest.

What is the Principle of Least Interest?

American sociologist Willard Waller coined “principle of least interest” in 1937 when his article in the American Sociological Review examined courtship. He argued that, as moral codes were loosened in the conduct of dating and courtship, there was an increased potential for exploitative relationships. Exploitation can occur when two people in a relationship don’t share the same level of emotional investment.

The result is the principle of least interest, which means that the person who is least interested in the relationship can easily walk away from it. If both partners aren’t equally emotionally invested, there’s a power dynamic, according to Rhonda Buckley in the Encyclopedia of Family Studies. “The person who is least emotionally invested in the relationship (with the least to lose if the relationship ends) has the most power and control in the relationship,” she wrote. “With that power comes the potential to exploit the deeper emotional connection of the more invested partner.”

It’s not difficult to imagine a wide range of scenarios for relationships and the principle of least interest. For instance, some people may believe they have the upper hand if they didn’t make the first move in asking for a date, or by waiting a few extra days to call the other person following a date. Long-term partners may have an explicit or implicit power dynamic that allows one person to exercise control whenever he or she wants.

According to Buckley, Waller’s ideas have been integrated as a key component to social control theory, which studies social behavior in the context of a cost-benefit analysis. That began in the 1960s when sociologists examined the measurement and exploitation of family power. Tradition was viewed as a major base of family power. At that time, men often held more power since they contributed more economic resources to the marriage.

Exploiting power in relationships is not confined to dating and family contexts, however. The business world is another major area where the principle of least interest comes into play.

What Does it Have to Do with Business?

The principle of least interest is tailor-made for the business world. In his book “Business Brilliant: Surprising Lessons from the Greatest Self-Made Business Icons,” Lewis Schiff applied the principle to business. He wrote:

In any relationship, especially a business relationship, the person with the least interest in continuing the relationship is the one with the greatest power for setting its terms. The weaker your interest, the stronger your leverage.

Schiff argued that leverage is a key in negotiations. He conducted a survey for the book and found an obvious difference in how business professionals approach deals. If a deal wasn’t right, 7 out of 10 self-made millionaires would walk away from a business deal. However, 8 out of 10 middle-class participants thought that win-win negotiations are the better strategy.

Critics of win-win negotiations argue that the least interested party use the “win-win” concept as leverage against the other party. Those parties often cite the benefits of a win-win deal in an effort to take advantage of the party that needs the deal more. That’s why many authors advocate for being ready to walk away. Schiff noted how “hundreds of books” have been written on the topic, and “most include some variation on the same essential three-step negotiation preparation process.”

  • Identify a specific goal or set of goals
  • Study the other party and its bargaining position
  • Determine the point when you’ll walk away

Entertainment lawyer and negotiation expert Michael Donaldson sums up those three steps in the title of his book, “Fearless Negotiating: The Wish, Want, Walk Method to Reaching Solutions That Work.” He said, “You set the goal for winning, determine what you want to know to get it, and then draw the line at which you’ll walk.”

In other words, business professionals who may be taken advantage of by the principle of least interest may be able to use it to their own advantage. Or, at the very least, they can establish firm guidelines by which they won’t be leveraged as the least interested party.

Note that while negotiation may be the major way in which the principle of least interest applies to business, it’s not the only one. A Fortune article depicted how it can relate to large business decisions, such as when Netflix engaged in a power struggle by spinning off of its DVD-by-mail service. That 2011 decision came with a great deal of debate. Consumers can represent the least interested party, and companies need to pay attention. The article reported:

Just as healthy individual relationships require constant monitoring and care, the new paradigm for company and customer relationships values greater symmetry of power and dialogue between groups over issues that matter, and the willingness to reconsider things when results or reactions are not as expected. Like any love affair you want to last, it requires patient, hard work and the willingness to put power games aside to have real conversations.

Learning Strategies for Negotiating and Relationship Building

Mastering the dynamics of relationships in the business world is vital for a successful career. Whether you’re pursuing an entry-level, management, or executive-level position, those interpersonal skills can help you add value to organizations. It can also make a critical difference if you own or would like to own your own business.

Develop those skills with an online bachelor’s in business administration or in the online MBA program at Husson University. Our bachelor’s program has produced a worldwide network of entrepreneurs, corporate executives, organizational leaders, and consultants for more than 100 years. The master’s program offers a strong advanced study in traditional business concentrations (accounting, finance, and marketing) combined with skills development (communication, leadership and interpersonal relations). There are also additional opportunities for specialized knowledge with the MBA’s four concentration options.

Both programs take place completely online. Husson University’s College of Business is still the largest school of its kind in the state, with over 1,375 students enrolled. Additionally, Husson University produces more MBA graduates than any other business school in Maine.