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SECTION I: INTRODUCTION
Real-Life Negotiation Situations
You feel you’ve been had. Sucker-punched. Taken for a ride. Why? You’ve been talking to your next-door neighbors about their cell phone service, and you find out that they are paying roughly half the monthly rate that you are paying! To make matters worse, you learn that their phone has text-messaging, a camera, no roaming charges, AND e-mail capability! Your cell phone does not have these functions. And the final insult? They didn’t have to sign a contract— and you still have 18 months left on yours. At first you get mad, thinking the phone company made a mistake that is costing you money. After all, you pride yourself on being an informed consumer— how else could this have happened? Then you ask your neighbor how he got such a good deal. He tells you that he and his wife simply negotiated the agreement when they switched providers. Boy, do you feel frustrated and foolish. You realize how easy if would have been for you to have negotiated the same deal, if only you had tried. The fact is that most people miss many opportunities to negotiate in their professional and personal lives. Negotiating is a critical ability that many of us lack, yet anyone can become a competent negotiator. It simply requires (1) knowing when a particular situation is ripe for negotiation; (2) knowing who is able to make a decision for the other party (you often need to ask to speak with the supervisor or manager in charge); and (3) knowing how to negotiate. Read this easy-to-follow book, and learn how to negotiate by practicing a few tactics presented here. As you read, you’ll be amazed at all the everyday situations in which having the ability to negotiate effectively can enrich your life.
Practical Tactics for Work and Life
In this book, we provide the reader with 50 proven, practical, and easy-to-apply negotiation tactics. We minimize the jargon and long-winded stories so you can quickly learn how to use each tactic (usually in less than a day!). You do not need to wade through hundreds of pages to find a single useful tactic. In fact, most people find a few interesting tactics right away, and try them out immediately. Each tactic is briefly defined and used in work and life examples—no lengthy anecdotes and no wordy theoretical discussions. Each is written to stand alone; the reader does not have to read and retain many pages of discussion just to understand how to use the tactic.
50 Practical Negotiation Tactics
Tips on Getting the Most Out of This Book
Read the book through, from start to finish. It only takes about two hours. Read all 50 tactics and flag the ones you believe you can use immediately and in what situations. (Or use the Notes pages in the back). For example: • Nickel and Diming (Tactic #43) – Use with copier vendor to reduce toner cost. • Commit the Offer to Paper! (Tactic #50) – Use with kids for household chores and driving privileges. Keep it handy. This book, as the title states, is a resource book. After you have familiarized yourself with the content, keep the book on your desk or shelf next to the dictionary, encyclopedia, and other reference books. Use the tactics! Practice makes perfect. Start with the ones you flagged or recorded in the Notes section. The next time you are about to enter a negotiation situation, refer to the notes you made, and try the tactic. It won’t cost you anything to prepare ahead, and the experience of trying it out will build your confidence. Everyone can negotiate, once they know the tactics and practice them. The first time you realize that using a tactic gave you a significant gain, you will be ready to try more of them. Develop your own style. The fifty tactics presented in this book are not intended to be recipes for success in any negotiation situation. Instead, they are general methods that should be adapted to fit one’s personal style or negotiation circumstance. As you use a tactic, record the results in the back of the book so you can recall how it worked the next time a similar situation comes up. Use the exercise forms in Section IV. They will help you think about how you can use these tactics. On the form, briefly describe the situation; list the parties involved (including the people who can make a decision); describe the issue to be negotiated; and finally, list the tactics that you believe might be especially helpful. Take the Quiz! Can this book help you? Circle yes or no next to each of the ten quiz questions on page 7. Score your answers: one point for each “no” on questions 1, 6, 7, and 10 and one point for each “yes” on questions 2, 3, 4, 5, 8, and 9. Total your points. If your total score is a 9 or 10, you are already a successful
are the negotiators most people deal with each week in their work and personal life? The list will be long: • • • • • • • • a neighbor a spouse a child other family members a supervisor a co-worker a salesperson a boyfriend/girlfriend • • • • • • a home builder a hotel clerk an electrician/plumber a lawyer a vendor/buyer a human resource director (who might make a job offer) • a manager Most people expect to have to negotiate when buying a car or purchasing a home. at a flea market. few people understand that normal interactions represent bargaining opportunities. Most readers will no doubt recognize some of these strategies. This book is designed to give the reader an understanding of the negotiation process by presenting fifty proven. practical tactics useful in real-life situations at work or at home. start reading! Most people come face-to-face with a negotiation situation of one type or another on a daily basis: on the job. Unfortunately. some will in retrospect even remember being the victim of one or two of them. Who. such as these: • You receive the wrong order at a restaurant. 4 50 Practical Negotiation Tactics . Instead. But if you scored 8 or less. they pay the sticker price. exactly. Learning how to use these tactics and knowing when to apply them will make you a more skilled negotiator when you are faced with the opportunity to strike a favorable agreement.negotiator! Pass this book on to someone else who needs it. • A child wants a new toy now. but many of us miss the opportunity to bargain in other situations. or engage in an unproductive argument. with neighbors. with family members. • A co-worker asks for volunteers for a new project. accept what is given.
and I don’t have time to wait for another. be prepared to bargain. Flexibility. condition. 2. perhaps the employee can say. time. What are my alternatives?” During an employee evaluation. Decision-making ability. There are flexible elements to the situation. Your boss reviews your past year’s performance. Therefore. 5. A friend is about to select the movie he/she wants everyone else to see. “I’d like Introduction 5 . that can be negotiated. such as price. some resolution must be negotiated. In some circumstances.• • • • • • • A hotel clerk tells you that your reservation was lost. Interdependency.” When you recognize that something can be negotiated. since you lost my reservation. Both sides want a settlement. perhaps you can say to a hotel clerk. The parties involved can make a decision by themselves. or items of value. There must be a conflict in the sense that what one wants is not what the other wants. Multiple parties. 4. Each one has the five key characteristics necessary for bargaining: 1. The parties are interdependent: what one party does affects the other. Two or more sides are involved. All of these situations are opportunities to negotiate. A service repair person gives you an estimate on some work. and each side can involve one person or several people (each representing one “side” of the issue). A neighbor wants to remove an old tree on your property line. In some situations. Mutual goals. you must advise the other party of your intention to negotiate. Your spouse wants to buy new furniture. For example. what can you do for me?” Or this to a restaurant manager: “This food order is wrong. The parties involved are interested in reaching a common goal. one party is only allowed to follow policy or must wait “until the manager arrives. 3. “Well. A teenager wants to buy his/her first car.
the facts. Choosing and applying the appropriate tactic to a particular situation will become easier as you begin to use them.time to look over this performance review and respond point-by-point. Keep this book handy when preparing for any type of negotiation. You might need to follow with a statement that clarifies your desire for a settlement but indicates that you are flexible and you do intend to negotiate. the parties and their interests. “I see why you want to cut down the tree. How can you compensate us for our loss?” Once you’ve suggested that you see the situation as something to be negotiated. and the tactics that might move the negotiations along. Once a settlement is reached. 6 50 Practical Negotiation Tactics . You can then use one or more of the tactics presented in this book to achieve the best possible settlement. and meet with you again. the other party will realize that you intend to negotiate and do not accept the situation. negotiations can be concluded with a written or oral agreement. but I believe it adds value to our house. and use the forms in the back to identify the issues.” To a neighbor you can say. Scenarios based on actual real-life situations are used to show how each tactic can be used in business or everyday situations.
or division of household duties. Do you wish you could negotiate a change in your job duties or salary? 7. When making a major purchase. Have you ever found yourself in a negotiation situation in which your best alternative was to walk away. have you ever required a written agreement covering chores. but you did not? 8. do you routinely negotiate a last add-on before you close the deal? 9. or child. The last time you received sub-par service or food in a restaurant. Yes No Self-Assessment Quiz 1. As a parent. have you ever felt that you were not adequately prepared to negotiate a job offer? 2. In the past. allowance. Do you often refrain from negotiating a better price or service because you believe that you do not have good negotiating skills? Introduction 7 . do you believe that you negotiated the best possible deal? 4.How good are your negotiation skills? Place a check in the box that applies to you. etc. In the past. When you purchased your last home or car. spouse. have you routinely resolved differences with a neighbor or a friend through a negotiated agreement? 5. Do you routinely negotiate for better accommodations when you check into a hotel? 3. did you request appropriate compensation? 6.? 10.
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etc. If it is a relatively informal situation. On the other hand. decide how complicated the issue is. The Quick Model The easiest way to prepare for a simple negotiation is to identify all the issues. Examples: • office location (city. including those that are less obvious. The “Quick Model” approach outlined below is good for simple negotiations. Examples: • a signing bonus (employee goal) traded for an annual travel budget (employer goal). Then classify each one into one of three categories: Compatible (Integrative or Win-Win) Issues: Those issues for which both parties might have the same desirable outcomes. They’re referred to as “win-win” because each side can achieve their goal.) • primary sales territory • a starting date Exchange Issues: Those issues that might be traded. The Negotiation Process 9 . state. one for another. • an allocation for moving expenses (employee goal) traded for a set number of travel days per month (employer goal).SECTION II: THE NEGOTIATION PROCESS Before you begin the process of negotiation. if the situation involves a number of detailed or complicated issues or the stakes are relatively high. thus allowing each side to achieve one of their goals. the process will be fairly straightforward. the process will probably take several weeks or months as the parties move through all the stages.
The most typical stages are Preparing to Negotiate Planning a Strategy Exchanging Initial Offers Making Counteroffers (the Give and Take) Applying Pressure Making Progress Reaching Agreement The tactics are organized according to the stage at which they can be used to best advantage and listed as such in the Table of Contents at the front of the book. The Comprehensive Model Negotiation is more of an art than a science. Examples: • an item sold by one party and bought by the other • wage increases won by one side. Depending on the situation and the parties involved. but feel free to try them when they seem most appropriate to your specific circumstance. What one side gains. 10 50 Practical Negotiation Tactics .Distributive (Win-Lose) Issues: Those issues that the parties are directly at odds with. the other side loses. stages can be combined. or even skipped altogether. rearranged.
The Negotiation Process Table 1: The Negotiation Process: Seven Basic Stages Stage 1 Identify situation as one for negotiation Preparation: Key Factors – Time. Information. Power #1– #6 Stage 2 Strategy: Choose Overall Approach to the Process #7– #14 Stage 3 Initial Offer: Getting Started Stage 4 Counter Offer: The "Give & Take" Stage 5 Pressure Bargaining: Striving for Conclusion Stage 6 Key Methods: Achieving Progress Stage 7 Reaching Agreement: Settlement of Impasse Tactics to Consider #15– #21 #22– #31 Negotiation Phase #32– #38 #39– #46 #47– #50 Initiation Phase Resolution Phase 11 .
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SECTION III: 50 TACTICS FOR SUCCESS
Stage 1: Preparing to Negotiate
n many negotiation situations, the parties have time to prepare for the actual bargaining. In other situations, such as when you’ve been served something at a restaurant that you did not order, there is no time to deliberate. You have to be prepared to instantly recognize that the situation can be negotiated, and begin to bargain. You can have time to prepare if you simply ask for it. For example, at the end of an employment interview for a management position, the candidate was surprised to receive a job offer on the spot. The candidate wanted the job, but wisely recognized that she could negotiate the contract. She said that she was very interested, but needed forty-eight hours to make up her mind. She used the time to talk to current employees, and developed a list of perks and conditions that she then negotiated, before accepting the position. To prepare for a negotiation, do as many of the following activities as you can: 1. Have realistic objectives. Identify everything that can be negotiated, and set realistic objectives for each item. If, for example, price is a factor, determine the desired outcome and set a minimum (or maximum) acceptable outcome, beyond which you will walk away and choose another alternative (see Tactic #1: Know Your BATNA). Also determine your opening offer in light of your desired and your minimum outcomes. It is often helpful to list each specific item to be negotiated and your minimum acceptable offer for it, as well as your desired goal and an acceptable opening offer (see Tactic #5: Listing Items). Thus, for each factor, write down and stick to three figures:
1. An opening offer. 2. The desired “best” offer. 3. A minimum (or maximum) “worst” offer. 2. Learn about your opponent. By whatever legal and ethical means possible, learn everything you can about your opponent. Talk with friends, neighbors, co-workers, past negotiation foes, even family members. If you are able to guess or find out about your opponent’s real objectives and/or limitations, you can gain an invaluable edge (see Tactic #2: Know Your Opponent’s Real Objectives). 3. Gather all the facts. During the heat of negotiations, presenting critical facts or objective criteria can turn the tide in your favor. You can usually anticipate and collect this critical information in advance during the preparation phase (see Tactic #4: Use Objective Criteria). 4. Set ground rules. In labor negotiations, the parties first agree to ground rules such as where, when, who, and how often the negotiation sessions will occur. Detailed ground rules are not needed in most everyday negotiation situations, but there are times when they help people come to agreement. Agreeing in advance on the location for discussions can give one side an advantage (see Tactic #3: Control the Setting), but in other situations, the critical ground rule will be about timing (see Tactic #6: Timing is Everything), forcing both sides to reach agreement faster. In negotiating with family members, friends, or neighbors, one well-advised ground rule is to stop the talks as soon as anyone raises his/her voice, curses, or makes a threatening comment.
50 Practical Negotiation Tactics
Tactic 1: Know Your BATNA
At what point will you walk away from the negotiation? You improve your position in any negotiation if you can walk in already knowing your BATNA—your best alternative to a negotiated agreement. The BATNA is the outcome you prefer over what the other party has proposed; if you define it at the outset, you are less likely to agree on something during an emotionally charged discussion and regret it afterward.
Harvey Huff bought a new 1956 Chevrolet from a local dealer. After forty years, he finally decided to sell the car he had loved and carefully maintained in original condition. Harvey did not need the money, but he intended to move three thousand miles away, to a condo in Arizona. The ad he placed in the local newspaper produced only one potential buyer: Patrick Knight. Harvey: Mr. Knight: Harvey: Mr. Knight: Harvey: Mr. Knight: Harvey: Mr. Knight: Harvey: Mr. Knight: Harvey: Well, now that you’ve checked it out, how do you like it? It’s in great condition, just as you described it. Any questions? Will you take less? No. It’s easily worth at least $20,000. That’s the price. $18,000, tops! No thanks. Okay. $20,000. I need it for a new restaurant. Restaurant? Yes. We cut off the top of the vehicle and people sit in it and get served their meals in our “oldies dream car!” Never mind, I’ll keep it. I haven’t maintained it for all these years just so you can destroy it.
notified all the employees of their intentions. which the Jaggers believe will cause them to increase prices to the point where they will no longer be competitive with other West Coast firms. The Jaggers gave the union their “last. selling became an attractive alternative to a strike or prolonged battle. the Jaggers decided to seek buyers for their land. labor contract negotiations between the Jaggers and a local labor union representing the pottery’s craftsmen have stalled. his BATNA was not to hold out for more money. The union negotiators thought the Jaggers were bluffing. but rather what the buyer planned to do with the car. The owners. The union negotiators convinced the employees that this too. The threatened strike became a reality. They learned that their assets would be easy to sell and were worth more than originally estimated. The $56 million dollar business took them 30 years to grow. When negotiations with the union became hopeless. and it now employs 230 craftsmen. and equipment. For the past two months.” which was refused. and either move it with him to Arizona or find another classic car collector who might buy it (perhaps for less) and preserve it. and final offer. Example 2 Shari and Jim Jaggers own a successful West Coast pottery company. as Harvey had for many years. inventory. The union is demanding wage and benefit increases. and the Jaggers decided once and for all to sell their business assets and invest the proceeds conservatively. as a last resort. In this case. best. 16 50 Practical Negotiation Tactics . With only two weeks remaining before a threatened strike.Conclusion Harvey’s best alternative—his BATNA—was simply to hold on to the car for the moment. providing them with a very good income for life. was a power play. Conclusion Selling their business was the Jaggers’ BATNA. They told the union that their age and the fact that they had no heirs to carry on the business was leading them to seriously consider selling out and permanently closing the doors.
right? John: Sure. I think so. How much are you thinking it’s worth? John: Well. so Tom was surprised when John called him out of the blue one day with a proposal. Just as important is the why. Preparation 17 . Make me an offer. You have an advantage and are in a position to produce a better agreement if you understand what motivates your opponent and what “hidden” interests lie behind their position. John: Tom: John: Tom: Tom. A person who has to sell her home because her company is relocating her. might not be willing to lower her asking price because she knows that her company has agreed to buy the house if she can’t sell it. you still interested in my rifle? Of course. for example. Tom: $20. It is extremely rare—one of only 100 made with that bore and handle. Are you finally ready to sell it? Yes. Gosh. at some point. because if the company does not provide relocation benefits. If you are the party making the offer on the house. it’s to your advantage to know what is behind a seller’s decision to put it on the market. it’s still perfect. she might have to take a lower offer just to be able to move. you know. Example 1 Tom had always admired John’s 1861 Confederate rifle.Tactic 2: Know Your Opponent’s Real Objective Each party in a negotiation will know. and told John several times to let him know if he ever wanted to get rid of it.000? That’s more than I planned. I’ll have to think about that. Just running out of space. What changed your mind about getting rid of it? It is still in perfect condition. what the other party’s desired outcome is. I’ve been thinking of getting rid of it for a while.000. This is a good thing to know. I guess I couldn’t take less than $20. John assured Tom that this would never happen. sure.
Conclusion Tom entered into the negotiations suspicious of John’s motives. When Tom found out why John decided to sell his rifle. Without some trust.Tom: Okay. Was Tom interested? Tom declined. John: Well.) Tom: John. One of them mentioned that someone who is negotiating with him to buy a restored Winchester rifle for $18. let me think about it and I’ll get back to you. Example 2 Rick. I don’t think I can go higher than $18. it made the negotiations easier. and we’re committed to keeping it open as a major division of our company. we 18 50 Practical Negotiation Tactics . Rick needs to remain president of the company for the next two years. fearing that this will put all of his employees out of work. He doesn’t want BigManu to know this because he thinks it will hurt his negotiating position. so he is making it a condition of the sale that ALL current employees must be retained for a minimum of two years. but I could get the money to you right away. and now the two-year requirement has become a stumbling block in the negotiations. He is two years away from retiring and does not want his business to fail before he does. The sale price for the company has not yet been agreed to. has begun negotiations to sell his firm to BigManu Company. but then he will be happy to retire.500—we’d have a deal. Well. let’s do it. BigManu: Rick. However.000. we really want to buy your company. I’ve been thinking about your offer. but thought this might explain John’s sudden interest in selling the rifle. Tom now felt comfortable negotiating the price. parties to a negotiation are not likely to reach agreement.500 had an 1861 for sale. (Tom investigated the “market” for a restored 1861 Confederate rifle by calling a few other collectors. No longer worried about John’s motives. Tom: Okay. if you could come up a little—say $18. the owner of a small manufacturing company.
Without this commitment. and he accepted it subject to agreement on the two-year employment guarantee clause.cannot guarantee to you that ALL of your employees will be retained for two years. Rick: I built this business from the ground up. I just want them to have a real chance to show you how good they are. Let’s talk later. We still can’t find a way to do it. let’s talk about the job guarantee you wanted.) BigManu: Okay. you will have a say in how the employees are treated. Within the parameters of efficiency and effectiveness. BigManu: You know we want you to stay on and manage this division for us. We just can’t make good operational decisions with our hands tied. BigManu: We just don’t see a way to give you what you want on this. BigManu’s negotiating team concluded that they were in the dark as to why this two-year requirement was so important to Rick. I need to give them some sense of comfort if this deal goes through. I just can’t go through with this sale. Working as a division of your company. The price they gave Rick was actually more than he had expected. and I hired every one of these people. they decided to put their price on the table and revisit the issue after a price was agreed upon. they will make you plenty of money and more than make up for any “operational” difficulties it might cause you. In hopes of pushing the deal forward. (Between negotiating sessions. Rick: These people are the best at what they do. Preparation 19 . my employees will prove to you that they are uniquely able to run this place. You’ll be in place to participate in our employment decisions. What is it you’re afraid is going to happen? Rick: I am convinced that with a two-year time frame. and we think it’s an odd request anyway. I just don’t want it to change after I’m gone.
to tell you the truth. but we won’t be completely tied to operations as they are now. BigManu: Why don’t we guarantee to you that you will stay for two years? That way. you’ll have a guaranteed “in” to protect your people. Once Rick realized that he no longer risked anything at the negotiating table by making his need known. I certainly want to do all I can until then to protect my people. Let me get back to you. Surely you’ll be able to “protect” your people if they are as good as you say. Conclusion By masking his real objective (giving himself two more years as president before retiring). This wouldn’t have anything to do with your own plans for the future. he agreed to allow BigManu to accommodate him without limiting their ability to make business decisions. I’m hoping to retire in two years. Rick: Well. that might work. 20 50 Practical Negotiation Tactics . would it? Rick: Well. Rich almost lost the deal.BigManu: We intend for you to stay and become a big part of our company.
(Think of the showroom tactics used by car dealers. I’ll give you my duck and frog for your whale and horse! Cybil: I already told you that I don’t really like that frog much! Jenny: (Bailey’s sister) What? Bailey. and so on.) Prepare for the negotiations by controlling the setting—to your advantage or to mutual advantage. how can you trade the frog—he’s your best one! Dede: (Bailey’s other sister) Yeah. too.Tactic 3: Control the Setting There is a logical reason why professional negotiators setting ground rules agree to conduct the talks at a neutral site.) Let’s take all our Beanie Babies to my house to trade! Okay. Mother: Hush. but never to THEIR advantage! Example 1 (Two ten-year-old girls are talking. Bailey: Cybil: Preparation 21 . Make up your minds. they have the information they need at their fingertips. Inexperienced negotiators fail to realize that the other side has an advantage if the meeting is held on their home turf: they are more comfortable. girls. Cybil. such as a hotel conference room. I like the frog. the frog is everybody’s favorite. (thirty minutes later) Bailey: So. it’s a deal. and go play somewhere! Cybil: Well … Okay. they control the breaks and environmental factors.
” The chief negotiator for Team B agreed. The firm deadline was only four days away. The chief negotiator for Team A publicly challenged Team B to “negotiate non-stop. They were blamed for accepting the same deal that had been rejected only days earlier. The physical and emotional demands of 24-hour. Team B had clearly used its home turf to gain a substantial advantage. non-stop negotiations wore down the members of Team A. meals. Conclusion Team A did not realize the practical advantage they gave Team B when they agreed to negotiate in B’s boardroom. and other conveniences in the adjoining room. 22 50 Practical Negotiation Tactics . in their own familiar setting. although only ten years old. knew that her sisters liked the frog best and that they would help convince Cybil of its “value” and help Bailey make the trade. while members of Team B were able to stay fresh. around the clock. Both sides desperately needed to settle a property dispute. Team A agreed to change the meeting place. Team A agreed to a settlement almost identical to the one rejected days before. until we have a settlement. That’s why she wanted to go to her house. About thirty-six hours later. Team B. as long as they met in the boardroom of Team B. After forty hours of negotiating. not one member of Team A was chosen to return to the table. When negotiations resumed in two months over another piece of property. Example 2 Two five-person negotiating teams had been trying to work out a deal for over a month.Conclusion Bailey. They had all been replaced after their decision to negotiate “around the clock” in Team B’s boardroom became known. Team A was whipped physically and emotionally. was still going strong. having set up beds.
when Will presented Larry with his bill. Let’s get the guys back in who gave you estimates. Things turned sour. This uncomfortable negotiation followed: Larry: Will. After all. Believe me. Larry had expected to pay him for his time. When you first told me about your project. Larry: Well. Will: Larry. I did get some estimates from plumbers.Tactic 4: Use Objective Criteria Use objective criteria to judge the quality of each side’s proposals—you will probably improve your chances of coming away satisfied. If you think that the other party knows more than you do. you are likely to resent them for it and hold out. Will is a licensed plumber. I gave you my “family” rate. though. rather than give them the “advantage. Larry: But Will. Example 1 When Larry’s cousin offered to help Larry finish the renovation on his bathroom. it became clear that all of those pipes had to be pulled and new ones put in. I would have charged anyone else much more. I anticipated much less work. If they tell us that they either Preparation 23 . these plumbers certainly acted like they understood the work when they gave me their estimates! Will: Tell you what. and he and Larry have always gotten along.” This can hold up an agreement and cost you in the end. based on objective criteria (think property appraisals in real estate). Larry was thrilled. Larry: Just make sure you’re comparing apples to apples. and show them the actual work that got done. but was shocked at the amount of the bill. It was twice as high as the estimates Larry received from other plumbers before they started the project. I was kind of surprised at how high it was. about your bill. Prepare for the negotiations by having an outside authority measure or weigh in on each side’s position. and they were much lower than this. When we got into it.
I have been very diligent about making sure that the fund makes the most money it can without putting us at risk. my first reaction was that some of the investments 24 50 Practical Negotiation Tactics . and no one had ever questioned her performance. The chairman of the Board suggested that Stuart and the budget officer meet to discuss the investment policies and practices as they relate to the endowment funds. From a look at the portfolio. and decided to bring the matter up at a Board meeting. He was disappointed in the performance of the fund. they would have had to revise the figures. Larry: That sounds fair. he used his financial expertise to analyze the investments of the college’s endowment fund. Comparing the estimates to Will’s actual costs would have been counterproductive. I find your suggestion to the Board that I haven’t been doing my job right to be very insulting! Stuart: I’m sorry.disagree on the need for that work or that they would have done it for less. she had been investing the college’s endowment funds for many years. Example 2 After Stuart was appointed to the college’s Board of Trustees. Budget Officer: I don’t know what your problem is. because (as Will pointed out) it wasn’t an apples-to-apples comparison. Conclusion When the other plumbers looked at the work. they said. they had to agree that their early estimates were low. The college’s budget officer was understandably offended. I’ll revise my bill to meet the lowest estimate you get. while she wasn’t an expert. Settling on the right objective criteria upon which to base a negotiation requires that both parties think through their options. I certainly didn’t mean to offend you. The estimates would have been higher than what cousin Will charged. Had they actually prepared bids on the work.
if both of them demonstrate a similar strategy and produce better results after expenses. Stuart: Yes. but such a strategy also increases risk and costs more money to administer. and its resources are limited. considering commissions and all. I have a suggestion. I don’t question that they were sound at one time. because she did not have the background in investments necessary to trust such advice. the college is a private institution. In this situation. Okay? Budget Officer: Okay.were stale. but I want to be involved in the discussions with them about what we’re asking. and the budget officer was comfortable that the risk and expense of such a strategy was small and worth the effort. I find that a more aggressive investment strategy produces a better return. but we can ask them to plan and cost out each move. how can we identify the right parties? Conclusion The two-month experiment did produce the results Stuart had anticipated. but some of these stocks have really lost their value. Stuart: No problem. there might be increased risk and some expenses for commissions. We just can’t make up losses to the endowment fund without considerable impact on our annual budget. As you know. Budget Officer: Yes. then you and I can talk about changing our investment strategy. Preparation 25 . I don’t want you directing how they’re going to go. At the end of two months. Now. Why don’t we ask two investment advisors who have some alumni ties to the college to do a mock investment of the endowment fund for a month or two? We won’t tell them about each other and they won’t actually do any real trades. but I think they more than offset the gains. Stuart realized that the budget officer needed very-specific “criteria” (such as the actual experience of investing the school’s endowment fund) rather than relying on an investor’s experience.
and ask the other party to add to the list.Tactic 5: List All Items to Be Negotiated Break down the issues to be worked out into separate items ahead of time. besides washing the dishes every night and cleaning my room? Mother: You could cook dinners. clean the whole house—should I continue? Shari: Whoa! I want to stay out longer—past my curfew of 10:00—not work more! Mother: Well. Mother: But your allowance is based on what you earn in your weekly chores. It will cost me more than $10—about $35 per week. and (4) different treatment from your sisters! 26 50 Practical Negotiation Tactics . and for going out with my friends. not on what you want to spend. (3) more chores. You can’t treat me the same! Mother: Well—so we’re talking about several issues. This strategy can build trust in the negotiation process itself. has asked her mother for a $10/week increase in her allowance. Shari: Well. Shari: I’m four years older than the next-oldest. cut the grass. a sixteen-year-old who lives with her parents and three younger sisters. Mother: That’s a large increase—and we just raised it last year! Shari: Well. if I give you an increase. not just an allowance increase! There is: (1) a $10 increase. (2) a later curfew. wash the cars. baby-sit your sisters. I need more money for clothes and CDs. you should each put together a “package” of several items on the list and work out a win–win agreement for these things. what else can I do. Once you both agree on the list of things to be negotiated. your little sisters will want equal treatment. Example 1 Shari.
item #11 (the clothing allowance). Example 2 The union and management negotiating teams opened discussions with a list of 48 demands. Union: We will agree to your proposal on item #6 (the number of paid holidays) and item #14 (the new overtime hourly rate). but unlike your sisters.Shari: Right! Mother: So … I suggest no allowance increase. if you agree to our proposals on item #3 (the paid vacation schedule). Now it is time for each side to list their desired outcome for each item. And if you clean the whole house on Saturday. I’ll pay you $10 to babysit every Wednesday night. Shari got the $10 she wanted and a later curfew. while your Dad and I go out. An allowance increase. and item #23 (the wellness program voucher). Then a “win-win” solution could be determined. in the first session. you get to stay out an hour later that night. Management: (after calculating the total value of the five items during a break period) We agree to your package of five items. The trading of items (where initial demands are discussed and agreed upon) begins. since all of their items were included as requested. Now we have a package deal to propose … Preparation 27 . Management agrees. opens by proposing the list of items. was avoided. which the other children would have requested as well. while the mother won a Saturday house-cleaning and a night out each week. Shari: (pause) I like it! Conclusion Shari’s mother helped negotiations along by listing all of the items being discussed. The union’s chief negotiator.
28 50 Practical Negotiation Tactics .Conclusion In most labor negotiations. other trade-offs are proposed and agreed to until only a few items remain. the two sides will at this point sign and date the list of proposed items. Then negotiations can resume on the remaining 43 items. thus removing them from the discussion table.
I love this car—restored it myself. One day. Timing is everything! Example 1 Bob Hillard had been coveting a turquoise 1963 Chevrolet Impala Supersport convertible for several years.Tactic 6: Timing Is Everything The exact month. which turned out to be only a few blocks from his own house. but money doesn’t mean anything to me at this point in my life … Well. the following conversation occurred: Bob: Car owner: Bob: Car owner: Bob: Car owner: Bob: Hello. thanks. It was nice meeting you. That’s a generous offer. as he left the supermarket. Bob made it a point about once a month to go out of his way and drive by the man’s house. As the man got out of his car. time of day. I live a few blocks from here. Prepare carefully. on Briarwood Road. he noticed a FOR SALE sign in the yard. day. my name is Bob Hillard.000? No. say. Hi! What can I do for you? I’ve admired your ‘63 Impala for years. $12. He stopped and knocked on the door. Would you possibly be interested in selling it? No. Not even for. just out of curiosity.) Preparation 29 . Bob followed the man home. and do your homework. (For the next three years. The external pressures put on the parties involved (which might not be related to the issues under negotiation) can sometimes be used to advantage if you know about them. and general circumstances under which negotiations take place can substantially impact the outcome. he saw an elderly man get in his dream car and drive away. One day.
Can I see it? Sure. resulted in another 6-6 30 50 Practical Negotiation Tactics . Well. and a twelve-member board of a large non-profit organization was holding a special meeting to decide whether or not to enter into a multi-million dollar capital project with a partner organization. December 31st.000. if a seventh vote could not be found by the pro-agreement side. that’s a fair price. Follow me. for tax reasons. I’m moving to California to live with my daughter. as a matter of fact. beyond which the project would have to be abandoned. Conclusion While Bob did not achieve his goal during his first negotiation effort. to seal the agreement at the courthouse? Sure. and wondered if your ‘63 Impala might also be for sale … (obviously not remembering Bob) Well. I’ll see you on Monday. Then it’s a deal? Yes. and I promise to take good care of it.m.Bob: Car owner: Bob: Car owner: Bob: Car owner: Bob: Car owner: Hello! I noticed your FOR SALE sign. the timing of his second effort was perfect and it enabled him to negotiate for the car of his dreams. Example 2 It was Sunday. (after a careful inspection) It’s a very nice car! I’ll give you $12. so I guess I will be selling it. I can’t take it with me. had issued a deadline of December 31st. Can you come back on Monday at 10:00 a. and the vote was a 6-6 tie each time. A majority was needed to pass the partnership agreement. The partner organization. A third vote at 3:00 p. the proposal would die at midnight. The board members had met twice before.m.
. a member of the anti-project group left the room.m. in the end. At 5:30 p. the leader of the pro-partnership side heard someone say that the meeting needed to end by 5:30 p. the project had been stalled by 6–6 votes. Preparation 31 . and the meeting was adjourned. When the meeting resumed at 4:00 p. the pro-project leader told his members to filibuster until he gave a signal and called for another vote. That effort failed. because one member of the anti-partnership side had to leave at that time to attend a church service he had not missed in 27 years..m... Both sides caucused: The leaders on each side met to negotiate a compromise. The measure passed 6–5 at 5:45 p. and it worked. as predicted. Conclusion The leader of the pro-project group recognized that they might have a unique timing advantage.deadlock.m. Then. He planned for it accordingly. For weeks. during an hour break in the meeting. timing was everything.m. A member of the pro-project group quickly called for a vote after the leader gave a signal.
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such as a buyer and a seller or a city and its union. Third parties sometimes have their own hidden agendas. Look at the personalities of each negotiator and see which side will be more vulnerable to pressure bargaining (Stage 5). such as actively trying to keep one of the two parties from winning a contract or influencing a colleague or spouse to accept an offer for personal reasons. After you have evaluated these factors. if you want to begin in a friendly. Identify all outside influences and hidden agendas before you develop your strategy. and Tactic #10: Make a Reciprocal Buy-Sell Offer) are also useful alternative strategies. or one-time-only. A neutral. Tactic #33 (Bluff). as well as their bargaining history and financial and political positions. If you prefer to take a firm and direct approach. Are there any outside people who might influence the process. The overall strategy chosen does not limit the use of other tactics. for example. A favorite strategy of some successful negotiators is to start with an extremely low or high offer (Tactic #7: Decide How “High” is High) in the hope that the other T Planning a Strategy 33 . or someone’s colleague or spouse? Third parties such as other buyers or governmental agencies might have to approve the agreement before it becomes final. uncaring approach (Tactic #9: Control Your Emotions. such as Tactic #19 (Make a First and Best Offer). Tactic #12: Find Common Interests can be helpful. you must first evaluate your needs and those of your opponent.Stage 2: Planning a Strategy he next stage is critical: Choosing a strategy. might step in and help settle negotiations between a union and administration negotiators. Tactic #43 (Nickel and Diming). such as a third-party negotiator. cooperative manner. Some of the tactics listed in this book are only suitable for single-session negotiations. a third party can serve as a mediator (a legislative body. Before you can do this. For example. but in practice it will likely influence the whole process. then Tactic #13: Set a Deadline or Tactic #11: Have an Expert Witness might be helpful. decide whether the negotiations should be continuous. Be sure you are aware of this at the beginning. In some cases. and Tactic #48 (Walk Away). as it can substantially alter the negotiations between two primary parties.
The buyer said he wasn’t interested. and the buyer was able to completely renovate the house and still have a great deal.side is either caught off-guard or (in some rare cases) a negotiator will be able to achieve an unexpected fantastic settlement. 34 50 Practical Negotiation Tactics . For example. let’s say a homebuyer new to an area is shown a house that was owned by someone who had been transferred to another country. By assuming opposing roles. The buyer loved the location. The agent explained that the seller was desperate. If there is a significant weakness in your position. you should consider disarming the other party by acknowledging the weakness at the start so that you can reduce the impact of the weakness if it is used by your opponent (see Tactic #14: Don’t Always Hide Your Weakness). Another strategy often employed by parents with their children (and investigators with suspects) can be easily used when one side has two negotiators (see Tactic #8: Use the Good Guy/Bad Guy Routine). Weeks later.” The agent took the offer to the seller. the seller’s agent called the buyer about the property. “Please make any offer—they are motivated!” The buyer responded. I offer half the asking price. two people on the team will be more successful because they evoke different emotions from the other side. with “All right. half-serious. but the inside was a complete turnoff. His teenage sons had “trashed” the house. The desperate owner agreed.
First. so do not underestimate what you might be able to achieve. it is likely that your opponent will. as well. we’ve put a considerable amount of money into a new air-conditioning system and in redecorating. Finally. Each time. and then look at the demand from your opponent’s perspective.000.000 is very high.Tactic 7: Decide How “High” Is High Your first demand in the negotiation process is the most important decision you will make. one buyer shows some interest. but the redecorating is of little value. Anyone buying the house would want to change wall colors or add new carpets. If you consider the demand ridiculous. Buyer: We really like the house. but certainly not exceptional in any way. and just refuses to reduce it. She has had it on and off the market for the last five years. We also think that the neighborhood has improved over the last few years. but we simply can’t take less than $160. so think this through well ahead of time. but the house has increased in value. your request must not be so low that the other party concludes that you are not negotiating in good faith. And I don’t see a lot of difference in the neighborhood. Carol wants $160. It’s a good neighborhood. However. After all. but not so high as to end the negotiations before they begin.000. Planning a Strategy 35 .000. Carol: We really want to sell. Your demand should be high enough to give you room to compromise. The market hasn’t gone up that much in six years. Carol: Maybe not. six years ago you bought it for $60. Example 1 Carol has been unhappy with the house she and her husband bought six years ago. her real estate agent told her that they were probably not going to get a buyer because she is asking too much. Surely there’s some flexibility in your asking price. Buyer: The air conditioning might have increased the value of the house. with no success. we think $160. You are not likely to get more than you request. but quite frankly. Be realistic.
In any event. or she has unreal expectations.000 or 1% of profits (whichever is less) over the next ten years in order to use the name.000 offer by coming down in price at least a little. The partners are interested in selling the name. enjoying a statewide reputation for quality representation.Buyer: What if we offered you $100. were still alive. A new law partnership from a nearby city contacted Bits & Bites and offered to “buy” the rights to the name to use in their law office in their city. Buyer: Good luck!! Conclusion The buyer expected Carol to counter the $100. the founders of the firm. Here’s how the initial negotiations went: Partners: Well. Neither Edward Bits nor Edmund Bites.000. We’re curious.000 immediately.000? Carol: We really can’t take less than $160. Inquiries to other law firms were not very helpful because in almost all of the instances. 36 50 Practical Negotiation Tactics . Carol drove off a potential buyer by setting an asking price that was just too high. The other law firm was prepared to pay $100. as to how you think the name is going to benefit you. but they have no idea what the value of their firm’s name might be in this nearby city. we are certainly interested in your request to “buy” our firm name to use in your city. When Carol refused to budge. the buyer took it as a signal that either Carol didn’t want to sell. though. Example 2 The law firm of Bits & Bites was a Sioux City institution. the transaction also included some degree of consolidation of the law firms involved—not just the use of the firm’s name. The firm now had over twenty-five law partners who owned the firm and continued to benefit from the reputation and name recognition of Bits & Bites. and then $10.
it would be impossible to create a new name out of the names of our key partners. Partners: New law firm: Partners: New law firm: Partners: New law firm: Partners: New law firm: Planning a Strategy 37 . I guess this is just not something we’ll be able to pursue. In every instance. Thanks so much for meeting with me. Give us some range. that is a very high number. Well. If at any time we feel that you have “harmed” our name. So. you have a very solid reputation there. To offer it now would be an insult.000 initially. because you are in the state capital and your firm has handled a lot of high-profile political cases. What number were you thinking about? Well. we reserve the right to withdraw our permission. that you anticipate to build a very profitable law firm. And we. I really don’t feel comfortable doing that now. (surprised) Well. then. We probably won’t be insulted. we want $500. but we get to keep all of the money we’ve received up to that point. we do. (concerned about loosing the opportunity) Wait. We weren’t really thinking about that amount of money. expect to pay for that. Yes. and then 10% of your profits each year for as long as you use the name.New law firm: We are establishing a partnership of ten lawyers—the top two moneymaking attorneys in each of five local firms. that’s just our initial figure. Using the Bits & Bites name can only enhance our profitability. And even though you don’t have an office in our city. We should assume. of course. Let’s just pretend this didn’t happen. starting with the ten partners you describe. one of these two attorneys carries the surname of the firm they are leaving. I’m kind of embarrassed now. because we were not even close to that number.
Either side could have asked for too much. Bits and Bites should have let the prospective firm make the first offer.Conclusion Bits & Bites lost an opportunity here because their initial demand was so unrealistic with what the prospective firm thought the “naming rights” should cost. The price they were willing to pay would have indicated what the naming rights were worth. It immediately dropped the idea. Both parties were probably at a disadvantage. because there was no “objective” criteria available to help them set a reasonable price. since they had initiated the contact. 38 50 Practical Negotiation Tactics . In this situation. rather than negotiate.
Andy: No. Peggy: I’m hearing one thing from Paula and another from Andy. (bad guy) and implies that his or her side will hold firm on their demands. what’s your price? Andy: $1. threatening. so I’ll take it. They cost about $300.400 if the catcher and can are included.200. I want to keep those. Half what it cost us new. One member of your team acts friendly to people on the other side (the good guy) in order to gain their trust and support. not for $1. Example 1 So.Tactic 8: The Good Guy/Bad Guy Routine The “good guy/bad guy” routine is a useful one. Peggy: So. Paula: Go ahead and ride it home. Andy: I want them… Paula: Go ahead and take them. etc. only three years ago. I heard that you want to sell your riding mower. I can use them. I’ll go home and you can call me if you two can reach an agreement. And take the leaf-catcher attachment and the gas can. angry. since they are sitting out in the driveway with it. Andy: No. Your opponents will want to avoid confrontation and unpleasantness with the “bad guy” and are likely to be more willing to cooperate with you. Peggy: That’s fair.200! We should get $1. while another acts difficult. you’re really moving! I hate to see you leave. Peggy: I assumed they went with the mower. Peggy: Planning a Strategy 39 . Andy and Paula: Yes. Peggy. Andy and Paula. I don’t know what the deal is now. and I know how you take care of things. we won’t need it at the new condo.
200 will be about right… Sandy: I can’t begin to pay that! Liz: Calm down. Let’s talk. your rate of $3.000 per month is one of the highest in town. Sandy. Sandy. And cut the training hours from 55 to 20. firm offer if they decided to continue negotiations. Miguel: Well. Miguel: But not at this ridiculous rate. perhaps even unintentionally. She very wisely recognized the routine and forced Andy and Paula to give her a clear. Miguel: I’ve figured $4.000 in service calls last year alone because your damn people don’t take care of the equipment. we’ve been fairly happy with your responsiveness. She realized that it put her in an impossible negotiating position. For the past three years.Conclusion Peggy thought she was getting the old “good guy/bad guy” routine. Sandy: What? First of all. We estimated that it has cost us more than $50. the quality of the technicians’ work. And we need to add a clause that holds your company responsible for machine damages. Example 2 Sandy (business owner): Miguel and Liz (representatives of a computer firm). You are located outside our primary service area. and your training programs. And we want to change the 24-hour service response time to 48 hours. your account has taken too much time. Liz: But we still want to renew your contract. 40 50 Practical Negotiation Tactics . causing our reps to spend hours on the road. we’re here to negotiate a new service agreement.
Planning a Strategy 41 . Sandy believed that she was able to avoid a terrible deal and negotiate a fairly good one. If not. Our customer base has grown. (Three hours later) I’m back. Sandy. I want to keep you as a customer. you two? Good news. I’m going on to lunch.m. and it’s not efficient enough anymore for us to handle smaller firms—especially those outside our region. Miguel! We’ve worked out a deal I think you can live with. Any luck. Sandy. with a position he knew was unreasonable. Then he left so Liz could convince Sandy that they needed to quietly reach an agreement she could “sell” to Miguel later. these terms will put me out of business—I’m a small 20-person operation. even though it was far above the previous contract. I’ll stop back about 2:00 p. Liz. I’m afraid our relationship is over. What can I do? Let’s try to negotiate something reasonable before Miguel gets back. I hope you can meet my terms. but Miguel’s right.Miguel: Sandy: Liz: Sandy: Liz: Miguel: Liz: No. Sandy. I’ll explain on the way back to the office. Conclusion Miguel and Liz used the good guy/bad guy tactic in the classic form: Miguel scared and threatened their opponent.
I noticed this.10 a minute rate at my office location. Be sure that the emotion you display is calculated and strategic: A strategic flare of temper at an “insulting” offer made by your opponent can buy you time because you can make an abrupt exit from the room without having to respond to it in any substantial way. because we have had a sick relative out of town and we used long distance a lot this past month.00 a minute. such as deals on computer packages and phone services. This will put you at a distinct disadvantage from this point on. The fault was partly his because he did not stay on top of changes. in fact.Tactic 9: Control Your Emotions Stay cool. He had. 42 50 Practical Negotiation Tactics . made some very good purchase decisions for his small business. but I recently was sold a $. Your opponent might conclude that they have made a serious misjudgment and want to make a conciliatory move to get you back to the bargaining table. and might even harden your opponent into an unfavorable position (for you or for both of you). How may I help you? Hello. A display of temper or frustration can indicate to your opponent that you are uncomfortable with your side’s negotiating position and they will assume that it is weak. So. he was very unhappy. when he discovered that the long-distance company serving his home phone was charging him four times the rate currently being marketed by that company. Control your emotions and use them to your advantage! Example 1 Mike prided himself on being an informed and educated consumer. It seems that the rate you are charging me on my home phone is $1. I have a problem with my recent bill and my billing rate. He decided that the best approach was to act indignant when he spoke to the company representative. Here’s how the phone conversation went: Customer representative: Mike: Over-the-Air Long Distance.
and I also realize that if I had examined my bill closely. Well. (beginning to sound irritated. Customer representative: Let me pull up your account. But I am able to offer you a $. Had you brought this to our attention before. although he wasn’t really angry) Are you suggesting that it was my responsibility to advise you when one of your “offers” was available to lower my rates? How would such information even come to my attention? More importantly. to begin now. The company might have had any number of different introductory rates and incentives for people to buy our service over the course of eight years. I realize that that might be the rate I started paying when I first took your service over eight years ago.I expected the bill to be higher than usual. I see that the rate you are being charged is the rate we offer for the type of service you have with us. we certainly would have discussed your options. Mike: Customer representative: Mike: Customer representative: Planning a Strategy 43 . But as a very good customer of yours.10 per minute rate on your long-distance service. how would anyone who might only have residential service even know to ask? Well. Mike. of course it is not always possible to give existing customers some of the “offers” we have out. but this was quite a shock. I would think you would have given me the best rate you offer new customers. It hasn’t been increased at any time. I would have known I was paying too much.
The best we can do is fix the rate for the future. don’t think this is directed at you personally. In doing so. but I can’t do that. a long-time customer of your company. If you can’t get me someone to talk to. but I am very angry with Over-the-Air Company. But I’m looking at a $500 longdistance bill. controlled voice) I need to talk to someone who can do it immediately. strategic anger and abusive behavior. The latter would not have produced the desired results. and I should be treated with more respect! I’m sorry. and I want to speak to someone in authority so I can terminate my service. either. We certainly don’t want to lose you as a customer. which should rightly be $50. I am. 44 50 Practical Negotiation Tactics . I … (interrupting and in a stern. after all. between controlled. He was walking a thin line. she kept Mike as a residential customer as well as a business customer.Mike: I would imagine so.10 per minute. Wait—I’ll get my supervisor. (with a much angrier tone) Madam. there’s no reason for this conversation to continue. Customer representative: Mike: Customer representative: Mike: Customer representative: Conclusion The supervisor waived the long-distance charges for the $500 bill and adjusted Mike’s rate to $. however. I would hope that you would credit my account for this better rate for past service. Mike’s willingness to show a measured “flare of temper” brought results. Is your supervisor there? I’m certain that he cannot adjust your account retroactively.
Owner: I’m just not willing to let my best people refuse to work the extra shifts during our busy season. Owner: Now. and it’s getting old. and you just can’t be too careful. The employees’ negotiator finally decided to use “indignation” to break the stalemate. I’ve got to have the employees with the most experience to protect this place. Negotiator: (now beginning to get irate) You talk about the risk to your plant if the less-experienced workers are there on overtime shifts without the senior employees.Example 2 The contract negotiations between the employees of a fireworks plant and its owner had been stalled for about three weeks over the issue of mandatory overtime. Where are your managers? Where is the training necessary to make Planning a Strategy 45 . The owner told the employees that he was worried that during the overtime shifts. lesssenior employees might be at greater risk of injury because they have to handle explosives. The most-senior employees want to have the right to refuse overtime and have those less-senior employees take the overtime. and it’s not what we’re even talking about. The owner was afraid that if the mostsenior employees routinely passed up the overtime and the overtime pay. On those overtime shifts. They will be putting the plant AND their fellow workers at risk by not being here. Working with fireworks is working with explosives. they would become dissatisfied with their pay and want their base pay increased. that’s just not fair. and that they should be asking for a fairer base wage for the work they do for you. Just admit that what you really don’t want is for your best employees to realize how much of their pay is from the overtime they work. Employees’ negotiator: (with a stern voice) You have been saying this for three weeks.
not at all. 46 50 Practical Negotiation Tactics . What if we were to agree that the senior employees could refuse half of the overtime offered to them. I’m not coming back. Either they are properly protected. But the fireworks business is a business that involves risk. he became more reasonable. Then you can’t have it both ways. Sit down. The safety of the plant demands it! (standing up to leave) This is just ridiculous. In practice. You are not addressing the real issue for you: money. No one who takes a job with us can be unaware of that. Until you’re ready to talk about that. the negotiator would have had to find a way back into the negotiations without losing ground. don’t be so hasty.) Now. now. sit down. The negotiator was also running a risk with his flare of temper. After the employees’ negotiator threatened to walk out. but not all? Conclusion The owner was on shaky ground with this one. Had the owner let him leave. But we protect our people. or they’re not. either the employees are properly trained. (He begins to walk out. or they’re not.Owner: Negotiator: Owner: Negotiator: Owner: sure these employees can protect themselves? Are you telling me that your employees are being put in dangerous conditions without adequate training and safeguards? No. most of them continued to take all the overtime they could get. That’s all. All I’m saying is that the most-senior employees have to be on the overtime shifts. The end result was that the most-senior employees did win the right to refuse overtime. though.
2) They can flip a coin. A fourth option. Mike: Mary Anne. called the “Reciprocal Buy-Sell Offer. Susan. with winner taking all. The second party then decides to either buy it at that price and pay the first party. The following examples explain how it works: Example 1 Susan and Mary Anne learned from their brother Mike that their recently departed parents’ estate included a somewhat valuable antique coffee grinder. All the rest of the estate has been divided among the family. The first party decides on a price for which he or she will either buy or sell the object to the second party.Tactic 10: The Reciprocal Buy-Sell Offer What do you do when both sides seek to own something when there is only one and it can’t be divided equally? You have three options: 1) Both parties can “bid” to own it. you will decide if you want to buy it for that price or receive that amount from Mary Anne (but lose the grinder). Planning a Strategy 47 . you’re the oldest. (two days later) Mary Anne: Well. Both sisters covet it. with the highest bidder paying the amount to the other side in compensation for their loss. Mike. and split the proceeds. I’m willing to pay or let it go for $800. the executor of the estate.” is the recommendation of Howard Raiffa. so you set a price at which you agree to buy or sell the coffee grinder. 3) They can agree to sell the object to a third party. Then Susan. I’ll give you 48 hours to decide the price. a well-known negotiations professor from Harvard University. since this one is in perfect shape and it was Mother’s. has decided to use the “reciprocal buy/sell offer” process to settle this last piece of the estate. or sell it to the first party and consequently receive the full amount from the first party—thus giving up the object. my kids and I looked on eBay and everywhere else and found out that coffee grinders in perfect condition sell for about $500. However.
After I open the bids. the lower bidder must agree to sell his half-interest to the higher bidder at a price that evenly splits the difference between the two bids. You will both agree. I suggest a slight modification to the process. in writing. Both came to Raiffa to help negotiate a settlement. I choose to buy it. They accepted his suggestion to use the “reciprocal buy-sell strategy. Conclusion The “reciprocal buy-sell offer” process caused both Mary Anne and Susan to research the market value of the coffee grinder. Lectures on Negotiation Analysis. Both sisters felt that the process enabled them to resolve the issue fairly. and then decide how much more “emotional value” it held. which will bind us to the outcome. Example 2 Howard Raiffa described a consulting situation in which he used the “reciprocal buy-sell offer” process in his book. Agreed? Abe and Bobby: Sounds good! Let’s draft and sign a written agreement detailing the process. I’ll pick it up tonight. (sixty days later) 48 50 Practical Negotiation Tactics . but each partner had grown to dislike the other and wanted to end the partnership (but continue to own the business without a partner).” Howard: Since in this case you are talking about a multi-million-dollar business. Two business partners had been working together for ten years to build a successful business. to submit a sealed offer to buy/sell the business sixty days from today. They thus were able to determine the highest price each was willing to pay for it or receive for it.Susan: Mike: Well. Thanks for making this last step as easy as possible. Here is my check for $800.
I will arrange to sell him my half-interest for $180 million. Abe. and we close by July 1st. Bobby was willing to pay more than Abe to remain sole owner. you agree to sell your half-interest to Bobby for $180 million. and both men had carefully estimated the market value of half the business. Agreed. Planning a Strategy 49 . The partner who was out-bid in a fair process received a fair settlement: $10 million above what he was willing to pay. The reciprocal buy-sell tactic enabled one of them to achieve his goal of sole ownership and allowed the other to feel that he had an opportunity to purchase sole ownership. but only if they could become the sole owner. and to close within ninety days. Conclusion Both parties wanted to keep the business. Bobby. your bid is $190 million. your bid is $170 million.Howard: Abe: Bobby: Abe. And I will arrange financing to pay you $180 million to become sole owner.
” and then argue for the frugal alternative. Example 1 A young couple were discussing a possible purchase of new furniture for their living room. the one that was the most expensive was superior. and forcing him or her to control the discussion of the issue.” but there were substantial differences in price—differences that the wife did not see as a problem. The wife was determined to buy the least-expensive brand rated excellent by consumer publications. It can also work in reverse: establishing the other person as the expert. This approach can also be reversed: The wife in this situation is a banker. He thus ended up having greater negotiating power. Based on seating capacity. When he showed his wife the detailed spreadsheet. Looking at these statistics. he decided upon a strategy: First establish himself as the “dimension expert. They both expressed an interest in finding a couch that offered the most “interior” space. This strategy worked.Tactic 11: Use an “Expert Witness” Establishing yourself as the expert on a certain topic in order to get what you want can be an effective tactic in the appropriate situation. Conclusion The husband became the “expert” in this situation by doing the homework. The couple decided to limit their selection to those rated “excellent. so when the husband wants them to make an 50 50 Practical Negotiation Tactics . The husband found the dimensions of the couches in the brochures and Web sites. They knew that sitting on dozens of couches in a single day would be confusing and would make it difficult to determine which one is the most comfortable and roomy. When it came to comfort. and created a spreadsheet to compare the five best-rated couches on their list. and the husband felt like he saved them hundreds of dollars. she glanced at it and immediately deferred to his opinion. the one he wanted (one of the least-expensive) was superior.
and should therefore handle the problem.investment decision or deal with an error in a bill. He claims to lack the knowledge or insight to do the work—which he is then able to avoid! Example 2 A negotiator can often gain a valuable advantage on issues such as medical insurance or labor contracts by doing the homework and becoming an “expert. you gain an edge when negotiating a new plan for your company. he argues that she is the expert.” If you spend many hours learning about Health Maintenance Organizations (HMOs). Many bargainers on the other side will not know their HMOs from their PPOs or their POSs and are likely to leave important details up to “the expert” to decide—just as the negotiator planned! After explaining in some detail what each of these three types of insurance plans are. a negotiator in a similar situation was able to get the other side to agree to include a plan that they had opposed only days before! Planning a Strategy 51 . Preferred Provider Organizations (PPOs). and Point of Service (POS) plans.
When they boys returned. neither of you want to be embarrassed at the outcome. Usually. Unless you can convince me otherwise. particularly when things seem to be at a standstill. like we usually have. That simply rewards your continual squabbling. Russ: 52 50 Practical Negotiation Tactics . This time. I missed dessert the other night because I had to get to baseball practice. The boys quickly huddled. she decided to try something different. she made them share whatever it was. These positive things are part of your goals and objectives. If this was chocolate icing. and so on. here’s what they said to her: I think I should be rewarded with the piece of cake. and I really love the banana/butternut/ sour cream frosting on this cake. and their mother was tired of it. you both want to complete negotiations by a certain date. point them out at the very beginning of negotiations and refer to them throughout the process. they saw that there was one piece of cake left over from their mom’s bridge party. The two boys fought over the last piece of everything. I wouldn’t care so much. the last piece of cake will get thrown away. They immediately began to fight over it. and then asked their mom for a chance to negotiate with each other. and neither boy was very happy. because I am so conscientious about my paper route. Mom: I’ve decided that I’m not going to cut this piece of cake in half and give you both some.Tactic 12: Find Common Interests You are more likely to come away with a satisfying outcome if you and the other party set the stage for agreement. you want to reach an agreement that is favorable to an outside party. Example 1 When Russ and Bill got home from school. This is done by deciding at the outset what you both have in common: You both want to reach an agreement. Be clear on what you have in common at the start. I also took out the garbage last week without being asked twice.
she opens her shop at 7:30 a. It was the type of shop the nearby residents preferred. We really want you to go back to your original times.Bill: Russ: Mother: I think I should be rewarded because I cleared the table for Russ the other night when he had to get to baseball practice.m. and that’s not my favorite either. I can have the part with the icing and Bill can have the part with the cake and filling. The last cake we had was chocolate cake. I helped with the bags without being asked twice. and keeps it open longer so she can attract customers on their way to and from work. This cake is white cake. One day. Residents: Marilyn. Now that her children are in college. so these hours worked out well. and I really like white cake. and her children were in school. your new shop hours have caused your customers to park in our parking spaces. Customers have started to park in nearby apartment lots. and better than a fast-food restaurant with late-night hours and a drive-through window. I got an “A” on my book report that I really had to work hard on and when you got home from the store last week. she got a visit from some of the residents. Marilyn originally set her shop’s hours for 10:00 a. so that your customers can park on the street. to 3:00 p.m. We realized that if we cut the cake lengthwise.m. because there is no parking along the street during morning and evening rush hours. Example 2 Marilyn’s Memorabilia Store was located along the main commercial street of a residential neighborhood. Planning a Strategy 53 . Conclusion Once the boys realized that they had a common interest—not letting the cake get thrown away—they were able to negotiate a solution both of them could live with. That sounds like a wonderful solution.
00 a.m. and see if it works. and 9:00 a. and I close at 4:00 p. Marilyn: Conclusion Marilyn needed the extra parking. I have to convince them to come before work.m. and between 4:00 p. Okay.? Residents: We certainly want you to stay in business here. But I really am increasing my sales by being open longer hours. then we’ll try and accommodate you. So. and 9:00 a.m.I’m sorry this is happening.. It is very costly to have cars towed. Between 7:30 a. Lets try it. And we don’t think you want your customers’ cars towed. I really need that extra income to stay in business. and usually the car is gone by the time a tow truck shows up anyway. The parking lot used for apartment residents is probably full from 7:30– 9.m. But in order to keep my new customers. 54 50 Practical Negotiation Tactics . If you need to have the shop open more hours. and is probably empty in the afternoon if they haven’t gotten home yet. Do you think the residents of the apartment house would agree to let me advertise that my customers can park in their lots between 7:30 a.m. The shared parking arrangement did work out for Marilyn. my customers can’t park on the street.m. Can’t you post signs that tell non-residents not to park in the lots? Residents: The problem is that for the signs to be very effective.m. I don’t think that would be very good for business. Do you? Marilyn: No. or so anyway.m. the off-street lots probably won’t be used by my customers. Most of our residents are gone by 8:00 a.m. We think they’ll be agreeable to the morning parking.m. Identifying their shared interests caused the nearby residents and the customers to reach agreement. if I go ahead and open the shop at 7:30 a. we have to be willing to tow the cars that violate it.. if residents haven’t left for work yet.. and 6:00 p. let’s see what the options are. and the residents needed Marilyn’s shop. rather than after work.
Deadlines can also be set by both parties to a negotiation when they want to put some pressure on themselves to come to agreement as quickly as possible. such as a deadline beyond which the union will strike or the date that an outside party has set to withdraw an offer that is in both your interests).Tactic 13: Set a Deadline Be sure you know well ahead of time what the deadline is for completion of negotiations. and start choosing things. How can I do that? You all live in this town and you know this house. Jenny: Everett: Sue: Everett: Mary: Sue: Everett: Mary: Jenny: Everett: Okay. Well. But at Planning a Strategy 55 . we can each take turns selecting things … Like each tool or dish. Deadlines can be imposed externally (such as the government’s deadline to get a tax break) or internally (set by one side. let’s all take two hours to look around and make a list of things we might want. That will take days! I haven’t been in this house for twelve years. A deadline can help you make the best possible agreement in the shortest amount of time. Example 1 Four adult children have gathered at the home of their recently deceased mother. how should we go about dividing up the furniture and possessions? I can’t talk about it. the first. A few hours? I can’t—I’ve got to leave shortly for the drive home.m. one at a time: the youngest. but it can also work against you if you set one that is unrealistic or you fail to plan for it adequately. let’s all take a few hours to look around. I don’t. etc. Well. We just don’t have the time … We’ve got to do this—the house is sold! Okay. Then we can sit down at this table at 3:00 p.
we all leave. And besides. December 31. Conclusion The mutually agreed-to process and self-imposed deadline was a fair method of negotiating—a lot better than the four of them arguing over their mother’s possessions. and I appreciate your interest in the historic structure. this is December 29.m. However. David: I understand your concern. Example 2 Allan: As the negotiating team for the city. 56 50 Practical Negotiation Tactics . Allan: Let me confer with the city attorneys. All of us must come back before Saturday to take what is ours—agreed? Okay.. if I cannot carry a negotiated and signed deal to my board by noon on December 31. if we are not finished.Sue: Mary: Jenny: 5:00 p. Agreed. we cannot agree to these development plans submitted by your company until we have reviewed how they will affect the historic buildings. your attorneys know the tax laws. then the whole deal is lost because my company will lose $10 million in tax benefits under a federal law that expires on midnight. can sell or give away what is left. Okay. Allan: What! Why did you not tell us this before? David: We never thought you would take three months to get to this point. being the oldest. Sue.
Obviously. and I don’t like it.Allan: (One hour later. Planning a Strategy 57 .) I understand the December 31 deadline. Conclusion Knowing the external deadline gave David a significant negotiating edge. we can’t get the reports we wanted in 48 hours. He waited to bring it up until it was clear that doing so would help him get the settlement his side desired. Let’s continue.
Then the teacher went back to the first one. but remember that both sides have weaknesses. He knows that a D will mean that he will have to change the way he studies. His mother disapproves of his study habits. and you can neutralize its effect on the negotiations. Unfortunately. first-quarter grades are coming out at the end of the week. The objective is to negotiate from a position of strength. Mom: All right. Did you buy it? Jason: Yes. and Jason knows he is getting a D in Spanish. and we used it a couple of times. There will be times during a negotiation when you will want to catch your opponent off-guard. but that was actually a different workbook. as well as strengths. I bought the second one. and one of the ways to do that is to reveal a weakness at the beginning. and this usually means having all the right information. Have a clear goal in mind AND all the information you need to make your points. while watching TV. One day mine disappeared. We had one at the beginning of the semester that we were using pretty often. I’ll need to buy it again. Now. I’ll give you money for it. Mom: What’s that? Jason: A few weeks ago I lost my workbook. but his grades are good. but I have a problem in my Spanish class. But don’t lose it again. He decided to preempt the discussion in order to make the best deal. Example 1 Jason likes to play video games as soon as he gets home from school and do his homework later. 58 50 Practical Negotiation Tactics . we need to talk. and I missed some assignments. Mom: I gave you money to buy a workbook a few weeks ago. Jason: Mom.Tactic 14: Don’t Always Hide Your Weaknesses Be sure you know what your strengths and weaknesses are. before your opponent tries to catch you off-guard. as well as those of the other side. Control the use of the information. so he was able to prevail upon her to let him continue. don’t get mad.
I’ll give you more time. English. Example 2 Jane once owned a piece of property she wanted very much to sell. then I’ll agree to make changes. The work I did turn in was fine. Pizza Boy was interested and had even made inquiries about the property. or borderline B. Thanks. Since I missed some assignments. my study habits are okay. It’s because I didn’t have the book. Jason’s decision to warn his Mom ahead of time rather than have her see the D on his report card gave him an advantage in the negotiations about study time. All of my other classes are A. and the D is directly related to my losing the book. His explanation made sense. Conclusion All of Jason’s grades did improve over the next quarter. Mom. Mom: Well. and since he offered her the information up front. Its owners found out that at least three other buyers had been in contact with Jane. Obviously. I’m getting a D in Spanish for the first quarter—but it’s not because I’m studying in front of the TV. Environmental Science. I think you need to give me the rest of the semester before making me change the way I do my schoolwork. but I think you do need to change your study habits. I don’t think you’re taking your schoolwork seriously enough. Jason: Spanish is just one class. Although his Spanish grade was only a C+. but all three deals Planning a Strategy 59 . all right. If I don’t pull the D up to a C or better. The location was ideal for a convenience store or a fast-food restaurant. so there’s no reason to think I need to change my study habits. But that Spanish grade needs to come up to a B!! Jason: Okay. And those are hard classes—Algebra.Jason: Another thing. B. And I know I have to be better about getting in all of my assignments. Mom: Well.(maybe C+). I think I can do that. he was able to continue to study the way he wanted to. she trusted it more. I’m sorry.
had fallen through. But unlike your company. I’m very happy you’re interested in my property. What are her grounds for complaining? Jane: She doesn’t have any. either. really. I’m sure. Pizza Boy was prepared for her call. When she contacts you. The real problem. Pizza Boy: We’ve checked the property out. The Pizza Boy people figured that Jane’s asking price must be too high or that she is unwilling to negotiate. we’re not interested in neighborhood fights. Jane: Oh. however. What are you asking for the property? Conclusion Jane told them her asking price. though. she will want you to think it’s the whole neighborhood. A tentative deal was signed. Pizza Boy: Well. When the neighbor heard about the new buyer. however. was that Jane’s neighbor had contacted each of the previous potential buyers and complained about their plans to use the property. I think you’ll find that this is only one person. and was able to politely ignore her. Jane’s up-front disclosure of a potential problem allowed Pizza Boy to weigh the negatives with the positives. 60 50 Practical Negotiation Tactics . Furthermore. Actually. You are a big enough corporation to withstand her objections. I know. Pizza Boy: Well. They decided not to fight a disgruntled neighbor. which was way below the price they were actually willing to pay. and it’s zoned for commercial use. it’s only the neighbor to the right of the property who has a problem. there were no unpleasant surprises to stop the deal. This is how the negotiations went: Jane: Pizza Boy. the other interested buyers already have businesses in the neighborhood. The neighbor’s attitude suggested that there would be major resistance in the neighborhood if Pizza Boy tried to put in a commercial establishment. since they were well aware of the negatives. she started her campaign to keep them from closing the deal. I’ve got to warn you—you might hear that there is neighborhood resistance to your putting in a pizza restaurant. let’s assume that you are right.
Another common strategy is to start with the status quo. “Distributive” bargaining (“win-lose” or “zero sum”) is used. 190–192. Perhaps the worst-case scenario with initial offers is when a negotiator has his or her initial offer immediately accepted and ends up feeling that he or she could have negotiated a better settlement if the initial offer had been lower or higher—the so-called winner’s curse. by Michael R. such as proposing to continue at the current rate or price. as illustrated in the following figure: Seller Resistance Point ($22. in negotiating a labor agreement or the price of goods or services: The monetary gain realized by one party is also the monetary loss of the other party. Many negotiators make their initial offer the highest acceptable offer (Tactic #19: Make a First and Best Offer).000) Target Point ($23. Exchanging Initial Offers 61 . quick agreement. (2004). The initial offers of both parties are usually set reasonably above or below what each believes to be the settlement range. Carrell and Christina Heavrin.500) M $21. for example. Experienced negotiators often view negotiations as a process in which the goals of one party are in direct conflict with the goals of the other party.000 22 23 24 25 26 27 Initial Offer $28. The negotiator firmly states that it is their best offer in an attempt to gain a nice.750–$25.500) Fig.500) Resistance Point ($25.000) Settlement Range ($22.Stage 3: Exchanging Initial Offers any offers and counteroffers are made during a typical negotiation—sometimes even hundreds. This is a practical starting point that will not anger the other side (and might even be expected).750) Target Point ($24. 2: Distributive Bargaining Process. Adapted from Labor Relations and Collective Bargaining.000 Buyer Initial Offer ($21. None is as important as the first one. The initial offer sets the tone of the negotiations and reveals something about the strategy of each side.
In the example. 62 50 Practical Negotiation Tactics . these points have set the outer limits. each initial offer ($21.000) is reasonable.000 and $28.” but the settlement price.In this example. After initial offers are exchanged. Experienced negotiators will begin the negotiation of several items by quickly proposing such a package. yet is positioned well above or below what the party believes to be the opponent’s resistance point (thus avoiding the so-called winner’s curse). the other side does not agree to this value). Two extremely helpful tactics to be used immediately after initial offers are made are Tactic #15: Caucus and Tactic #20: Posturing. the process quickly narrows to the range between the initial offers. You can use a tactic in making your initial offer that will give you an advantage: When multiple items or issues are on the table. See Tactic #18: Agree on Something As Soon As You Can. if the buyer’s initial offer was $25. Resistance points are the maximum or minimum beyond which a negotiator is likely to consider an offer unacceptable (and possibly walk out). include others that are actually of no value to you in your initial offer (Tactic #16: Use Throwaway Items) to hide the true items of interest and show that you are willing to give in on some items. Both of these tactics give experienced negotiators an edge when they face novice negotiators who are more likely to rush the process and expose their position. the seller would immediately accept it because it is greater than the target point and the buyer would suffer a winner’s curse. When the two parties agree to a price within the range.000. The most common method of negotiating more than one issue or item is to combine two or more in a deal that gives each side something (Tactic #17: Package Items). it is termed the settlement point – not the “right price” or “fair price. A target point is the desired settlement value a party has set as a goal when negotiations begin. and is the range in which most negotiations actually occur. usually. The settlement range is the distance between the resistance points. thus starting out on a positive note. thus producing a true “win-win” negotiation.
If the team is feeling pressure to concede on certain items. A caucus is certainly called for if individual members of the team become agitated or express frustration with the progress of the negotiations. Example 1 Shelly’s “Sweet Sixteen” party was coming up. Shelly. To do so in front of your opponent would obviously undermine your team’s position in the negotiations. There are many ways to use this strategy. a caucus can be used as a break to calm the situation down.–10:00 p. Unfortunately. A caucus is when a negotiating team calls for a break and leaves the negotiating table to confer in private. Shelly: Twenty friends? You’re kidding! I’ve just started on my list. If negotiations seem stalled. Her mom and dad had already talked about it privately. so we’ll have the party from 7:00 p. calling for a caucus gives you a chance to get your team to recommit to a particular course of action. so her parents sat down with their daughter to discuss the details. it gives the parties an opportunity to reassess where they are and determine if everyone involved agrees that they should be heading in this direction.m. You can invite up to 20 of your friends. because it might disturb the neighbors. call a caucus so both sides can brainstorm new solutions to keep the negotiations going.Tactic 15: Caucus If you are part of a negotiating team. If the negotiations have suddenly gone in an unanticipated direction. and presumably had an agreement. and I already have 25 names. make use of the opportunity to call for a caucus. without revealing their ideas to the other side. or if a member takes on a role in the negotiations that has not been assigned to them. If the negotiations are heated. We’ll just have chips and soda.m. the negotiations got out of hand when Shelly’s dad forgot what had been decided. And that’s just my friends from school! I haven’t started Exchanging Initial Offers 63 . A caucus gives you an opportunity to work out problems with your own team in private. We don’t want it to be a late evening. Mom: We’re planning on having your party here on Saturday night.
We’ll get a band—everyone does. (excited) That would be so cool.Dad: Mom: Dad: Shelly: Mom: Shelly: Mom: Shelly: Dad: Mom: Dad: Shelly: Dad: Mom: on the friends I’ve made over the summer at the pool.—that’s so “baby. It’s special!!! Well. we’ll call you when we’re ready. Oh. Time out! Dad.m. (During the caucus. I think the band would be fine. Shelly. And midnight is definitely too late.” They would never expect a party to end before midnight. I think we can handle a few more kids—how about 35? And midnight sounds okay. and then the number of kids won’t matter. Actually. And can we bring in pizza? Or maybe one of those “mile-long” hero sandwiches? I like those—let’s do the hero sandwiches. That sounds like too many for here at the house. okay. I could invite everyone!! Hold on! I thought we agreed that this was to be a simple party. That would be great! It would keep everyone entertained. I guess the VFW will work. I’m sure we can ask them to tone it down a little. And they can’t go home at 10:00 p. (with some irritation) I’m not sure. In fact. we could rent the VFW hall. Jerry from down the street is in a really good band that all of the crowd likes. we need to talk. We could play records and you guys could dance. Mom! This is my “Sweet Sixteen” party. (shocked) Jerry’s band from down the street? They’re a punk rock band! Their music is totally inappropriate for sixteen year-olds. alone. Shelly’s parents reviewed their first planning discussion and went over what Shelly’s mom thought they had already 64 50 Practical Negotiation Tactics . Dad. Your dad and I already talked about this and agreed that 20 guests would be the limit.
m. That’s so lame. but no Sweet Sixteen birthday party decorations. sorry. All right. Okay. Mom’s call for a caucus gave them a chance to regroup and re-state their original objective. midnight. Agreed. A DJ? I guess that’s okay. When they called Shelly back in.m. but we’ll schedule the party for 8:00 p. which was to make sure Shelly’s Sweet Sixteen party was a fun and safe evening. and not a huge production.m. can’t we? No band.) Okay. Does that mean no presents. her mom presented the revised proposal. That way. but your dad and I agree on getting a DJ to play. The item currently on the table was the company’s offer to give each Exchanging Initial Offers 65 . this mom-and-dad negotiating team became unglued during the negotiations. Dad. we will be better able to chaperone. and we will need to approve the list. and you can invite more friends. But we can have the band. causing them to lose control and make compromises they hadn’t intended to make. But you are limited to 40.m. Example 2 The contract negotiations between the company and the union had been going on for days. And we’re serving chips and sodas. too? No way!! I want presents!! Conclusion In spite of their prior planning. to 11:00 p. please!! 11:00 p. we’re going to rent the VFW hall. Your mom and I agree—11:00 p. is for little kids!! No.Mom: Shelly: Mom: Shelly: Mom: Shelly: Dad: Shelly: Mom: Shelly: decided.
The company’s negotiator didn’t recognize the misunderstanding. and the following conversation occurred. some attempt to undermine me with my members? Company: I don’t know what you’re so worked up about—we’re willing to spend the same amount of money!! Union negotiator #2: Can we take a break? Union: We don’t need a break—we’re not discussing this stupid proposal. Union: Why are you so concerned about new job opportunities? Are you holding out on us? Company: No. Tuition in place of health insurances? They’ll think I’ve lost my mind. it’s a good proposal. many will want to use it for their children’s education. I’m just saying that tuition benefits are sometimes a good substitute for health insurance.individual member of the bargaining unit the option of being in the health insurance plan offered in the contract or receiving the same amount of money the company pays for health coverage as a tuition reimbursement benefit for the employee or any member of his or her immediate family. A lot of employees have spouses who can get health insurance coverage through their work. The union’s lead negotiator misunderstood the proposal. With the cost of college educations so high. 66 50 Practical Negotiation Tactics . The tuition benefits will encourage the workers to be prepared for new job opportunities. Union negotiator #2: Please—just a moment outside. Union: (angrily) I’m not presenting this proposal to my people. What is this. and thought he was being asked to choose between a health insurance plan and a tuition benefit plan for all members. Union: You’re offering a choice between health insurance and tuition payments? What kind of a deal is this? Company: Hey.
and the parties were able to complete their negotiations. I think that what you’re proposing is a really good idea. Good. Exchanging Initial Offers 67 . Conclusion Negotiator #2’s timely call for a caucus so she could explain the miscommunication in private saved the session. let’s move on. I thought that the contract would cover one or the other for everyone. I didn’t understand that your proposal was to allow each individual member to choose between the health coverage or the tuition benefit.) I’m sorry. (After Negotiator #2 explained that the choice of tuition or health insurance benefits would be an individual choice for each unit member and not a change in the contract for everyone. Now. Negotiator #1 regained his footing. the parties returned to the room. and I apologize for explaining it poorly.Union: Union: Company: Okay. we’ll be back in 5 minutes.
but … Salesman: But what? Hobbs: Well. Hobbs: Yes. It is a useful tactic in any negotiations. but the key to making it work is to include the throwaways in an initial list of demands OR add it in at a strategic time. Mr. I’ll go get him. Hobbs. we’ve got expenses and we need to make some profit. and noticed that none of the vehicles have a green exterior. But for this price. (Salesman returns with manager) 68 50 Practical Negotiation Tactics . Here’s how it works: Party A exchanges the item for something of true value.Tactic 16: Use Throwaway Items Identify ahead of time what you place a high value on and what you are willing to give up easily—your “throwaways. this conversation takes place: Hobbs: Yes. it’s a great car and a fair deal. Salesman: Well. A has gained something of true value and given up nothing he values in return. when the two sides are only a few dollars apart. I can go to another dealer and get a green exterior—the color I like best. However. according to the Consumer Reports listing of the cost of the vehicle. but he makes a mental note to use color as a “throwaway” item. you don’t want your opponent to know what these things are. I know. At a point late in the negotiations. you are making $200 profit over the true dealer’s cost. so be sure you present them in a way that suggests importance. quickly checked the dealer’s inventory of sport utility vehicles in stock. Example 1 The buyer. but in reality. Salesman: Let me talk to my manager. according to my figures.” Party B thinks that A has sacrificed one important objective to gain another. He doesn’t really care about the color of the new vehicle.” Throwaway items are those things that hold little or no value to you. not revealing that the item exchanged is a “throwaway.
. and Carolyn) to develop a mutually acceptable (to the three of them) holiday schedule in which at least one person will cover the office on each of nine “slow” days. but you’ve made me a fair offer and you have been pleasant to negotiate with … Then why not buy the red one you drove—the one we based the figures on? I keep cars 8–10 years. Why didn’t you mention the color before? I didn’t expect to actually buy a new car today (note: not the truth). Example 2 The office supervisor told the three internal sales representatives (Jenny. The days in question are: Exchanging Initial Offers 69 . All three employees must agree to the schedule. At the very end of the negotiations.Manager: Hobbs: Manager: Hobbs: Manager: Hobbs: Manager: We are offering you a great deal.. he brought it up and convinced the salesman and manager that it was an important item to him—possibly even a deal-breaker. Employees will be paid time-and-a half for each of these days. I’ll take the red one for $100 less. so I might as well get the color I want! What if we offer you the red one for $100 less? Is the color worth $100? I . Miguel. Hobbs successfully chose color as a throwaway item. Then we have a deal. and seniority will be used to determine who gets to choose the first day. Conclusion Mr.. The three are sitting at a lunch table to discuss the schedule.no it’s not. The manager was convinced enough to sacrifice a final $100 for the throwaway.
They agree. 31. 70 50 Practical Negotiation Tactics . 30. in exchange for giving up earlier choices due to seniority. and each chooses their days to work: Carolyn: December 27. She got what she wanted by giving up something she did not value: the two other days. This would allow Jenny and Miguel to each work only two days. 2 In the first round of negotiation. January 1. December 27. She would actually prefer to work the extra days and get paid time-and-a half. January 2 None of the three are totally happy with the results. it was assumed that each would work three) in order to have December 24 and 26 off to be at home with her children. 30. January 1 Carolyn: December 24. December 24 Conclusion Carolyn has achieved her objective: She will be off December 24 and 26. 27.November 25 (the day after Thanksgiving) December 23. Jenny and Miguel feel that they received something of value from Carolyn: She must work two more days than they must work. They have decided to start over. A second and third round produced the following allocation: Jenny: December 23. Carolyn has decided to use as a “throwaway” the number of days she will work (previously. each made a first choice of days they will work. if they let her choose the two days she will be off and the five days she will work. They all agreed to their schedules. She proposes to work five days. 31 January 1. December 30. 24. December 31 Miguel: November 25. but that is a secondary consideration. 2 Jenny: December 23. 26. 26 Miguel: November 25. December 26.
the antiques. A reluctance to include one particular financial item with other financial issues. a house valued at $250. When the girls decided it was time to talk about the estate. The process of grouping items can be an educational exercise because the response to one party’s suggested packaging of items might reveal how the other party views the various items on the table. Their mother’s will was very clear: the three daughters were to all have an equal share of her estate. we need to sell the house. In addition.000. for example. but I’d like to talk about the house and the furniture. The house and much of the furniture has been in the Exchanging Initial Offers 71 . Example 1 When their mother died at age 82. along with the cash. three ways.000 with no mortgage on it. can indicate that something you think is minor is really a major concern to your opponent. For example. their mom left specific pieces of jewelry and art in the will to each of the girls. they met at the house. The estate’s assets included a checking and savings account totaling $450. and the stock and distribute the proceeds. Autumn: I don’t have any objection to selling the stock and distributing the proceeds and the cash three ways. Anne and her sisters. were faced with the task of selling the house and disposing of their mom’s personal belongings. The house was closed up at the time of their mother’s death because she had been in a nursing facility for a couple of months. 300 shares of stock in a pharmaceutical company. and a collection of antique furniture. realizing that the total cost of a deal might make or break the agreement. one might package all of the financial issues in one group and negotiate on that package as one issue. it is often helpful to package the items in distinct groups and then deal with each package separately. Autumn and Angela.Tactic 17: Package Items In a negotiation where there are multiple issues or items to be negotiated. Anne: As I see it.
Autumn: I think its awfully soon to be making these kinds of decisions. so I will be able to keep tabs on it. Autumn: Sounds good to me. I’d like to talk about the art works Mom left each of us. Why don’t we leave some of the cash in the bank. Frankly. we’re really free to do with them what we want. Soon. What would you think about agreeing today to distribute the cash and stock three ways. we can sell ours. Angela: Now’s not a good time to sell either the stock or the house and antiques. Angela: And we can talk about the art and jewelry? 72 50 Practical Negotiation Tactics . Mother was born here and grew up here. she’s free to do so. don’t you think? Angela: Maybe. I’d like it all to stay in the family. we will have a more valuable asset. but the operative word is “give. and if we wait a couple of years. Angela: I live close by. We’ll split the stock three ways. we’ll discuss again what happens to the house and the antiques.000 in the bank and distribute the remainder three ways. So we agree: We’ll leave $30. it’s a magnet for vandals. Anne: But that means we have to continue to take care of the house and its contents. and now that we have them. With no one living here. If Angela wants to hold on to her stock. and use it to fix the house up? Then when we make a decision.family for years. and letting everything else wait for another discussion. Anne: I’m not sure I’m comfortable talking about trading the jewelry and art Mom left to each of us. we’d get a lot more for them. If we want. Anne: Okay. In fact. there’s a lot of work that needs to be done to get it ready to sell or to make it livable for one of us. And we’ll fix the house up. It’s a buyer’s market now.” She gave those things to us. I’d really be interested in talking a trade for some of them. There was a reason why she gave us what she did.
the jewelry. tuition benefits. sick. but I’m making no commitment to trade. Angela: That’s fine. Waiting to make decisions on those items until some time has passed gives the women an opportunity to look at a number of options. Conclusion Autumn’s suggestion to package the money and stock because they can be easily divided by three made agreement on those items possible. etc. The following tasks needed to be a accomplished: establishing basic pay schedules. May I suggest that we divide the items into three areas. The third: Ben- Exchanging Initial Offers 73 . the antiques. deciding whether there would be annual wage increases as well as merit increases. Anne: Same with me. funeral.Autumn: I can agree not to do anything with the jewelry and art Mom left me before we talk. vacation. Example 2 The attorneys and staff of the local Legal Aid Society formed a union and were about to negotiate their first contract with the executive director. Several issues also needed to be addressed: the ability of employees to move up through the organization. and the assignment of the limited number of parking spaces. The second: working conditions (work schedules and promotional opportunities). and the art works—will be more difficult. The negotiations on the other items—the house. and deal with one area at a time? The first: Wage issues (pay schedules and the annual and merit raise issues). health benefits. Employees: We’ve got a lot of items to cover. including benefits for partners in non-traditional relationships. what kind of paid leaves there will be (personal. deciding to base the increases on a percentage or equally distribute the funds for increases among the professional and clerical staff.). and establishing a work schedule to accommodate evening and weekend clients.
but the parties were able to come to agreement because the wage issue had been resolved. Employees: I’m surprised that you would take merit increases out of a general discussion of wages.efits (health insurance. we are an agency supported generally by public funding. Later negotiations were difficult. as well. There is more flexibility to use non-public money sources to reward employees who will cover night or weekend hours or who qualify for merit increases. so there’s not going to be a lot of discussion on what our pay schedules and annual increases can be. tuition benefits. 74 50 Practical Negotiation Tactics . So I’d like to see us get through the wage issues quickly and then move on. but I’d change your list. I think it also makes sense to include tuition benefits in the Working Conditions category. and the parking spaces). that makes sense. Wages should not include merit pay raises. Also. And paid leave clearly belongs with Wage issues and should be discussed with the pay schedules. Let’s get started. paid leave times. That’s a program that can have a lot to do with how employees are able to increase their worth to the organization. Executive Director: I think it’s a good idea to group items together. Executive Director: Sounds like a good agenda. because they’re really an incentive for better performance. the paid leave categories are pretty clearly defined. to be honest with you. Executive Director: Well. Employees: Okay. I would include that under the Working Conditions category. Conclusion The executive director’s request to move merit raises out of the Wage category and move paid leave into that category because there is little flexibility to finance those areas allowed the parties to resolve the wage issue first.
Their “property division” was mostly about dividing their debts. They had also furnished their house on credit. They met and married in college. Consider starting things off by presenting your opponent with a proposal you feel confident can be agreed upon without argument. They were in the middle of buying a house. and that you are entering into the negotiations with the intent to reach agreement. but don’t think you’re going to stick me with all of the mortgage and credit-card payments. The couple hoped to do the divorce without involving lawyers in order to save money.Tactic 18: Agree on Something As Soon As You Can Negotiations are more successful if both sides can agree on something—anything—almost immediately. without suggesting any changes or modifications. Tim: You might be leaving town. Kathy’s first job paid more than Tim’s because she had a graduate degree. You signed those papers. too. and might not even be able to keep the house. with her promotion sending her out of town. You can also make an effort to agree on something your opponent offers early in the negotiations. are divorcing. Tim began working right after graduation. because Tim felt that Kathy had taken advantage of him during the marriage. Example 1 Tim and Kathy. and she agreed. Now. They have no children. The discussion might become very heated. It indicates to your opponent that you are a reasonable negotiator. rather than disposing of assets. Tim worried that he would be stuck with all of the debt. It was her idea to buy the house and go into debt to furnish it. no matter how insignificant. and both have good jobs. Kathy was asked by her employer to relocate to another city. and they were making payments on school loans (for his undergraduate degree and her undergraduate and graduate degree) and on two cars. after a brief marriage. An initial agreement. sets the stage for mutual respect and communication. Exchanging Initial Offers 75 . Kathy borrowed more money to go to graduate school full-time.
If both of us had been working the year I went to graduate school. yes. and he could pay it in annual installments over a five-year period. Kathy and Tim were able to agree that Tim would take over paying for the house and furnishings and Kathy would get 50% of the equity accrued by the time of the divorce. even though the convertible is being paid for through a 48-month loan and the sports car through a 36-month loan. I don’t intend to “stick” you with anything.. we decided to each pick out our “dream car” and that we would not overrule the other’s choice. The monthly payments are about the same. Tim: Well. When we bought them two years ago. a wholesale art dealer. Frankly. I say we agree to transfer the convertible loan to me and you take over the loan on the sports car. I can hardly argue with that. as long as the cost was approximately the same. and XYZ Co. I got my convertible. an art gallery. as you remember. hold on. ABC usually uses UPS 76 50 Practical Negotiation Tactics .Kathy: Hey. Example 2 ABC Company. They also agreed that Tim wouldn’t have to pay her that amount for five years. Kathy: Now. entered into a contract through which ABC sold to XYZ twelve works of art by 19th century American painters of modest talent for a post–July 4th sale. Okay. The first thing I’d like to talk about is what we are going to do about the cars. Kathy: I suppose we should look at the school loans next. and you got your sports car. What do you want to do about them? Conclusion Having agreed to two items very quickly. about the house and furnishings. I think it only fair that I take over repayment of all the school loans. we would have paid down our school loans more. Tim: Okay. I think that makes sense.
XYZ: ABC: Exchanging Initial Offers 77 . They arrived right before the holiday weekend began. water from the gallery’s air conditioning unit pooled on some of the surfaces of the warehouse area. or else the box was damaged in XYZ’s warehouse. let me make XYZ an offer: We will deliver three additional artworks to you by the end of the day tomorrow so you can conduct your promotional sale as advertised. ABC’s position was that the artwork was fine when it left their location. Unfortunately. However. and the boxes showed no external damage. There was no indication that the gallery’s electricity had gone out over the weekend. XYZ decided to cancel the promotional sale that was to start on Wednesday. WeCanShipArt claimed that the boxes were not damaged in shipment—the artwork was already water damaged. and put the company on notice that it was not going to accept the order because the planned sale needed a dozen works of art to make it profitable. and that XYZ needed to either go to the shipping company or its own employees for compensation for the damage. when the boxes were opened on Monday. ABC refused to pay WeCanShipArt until it received payment from XYZ. ABC: Before we begin. You can get the three new artworks here so that we can hold the sale as scheduled? Yes. it was obvious that the art in one of the boxes had suffered considerable water damage.to ship artwork. and began preparing to return all of the artwork to ABC. XYZ’s manager failed to open the boxes or remove the artworks. The three parties agreed to hold a conference call late Monday afternoon to try and resolve the dispute. Holiday weekend storms caused the electricity to go off for different periods in different parts of the city. but XYZ asked specifically that a little-known company specializing in shipping art known as WeCanShipArt be the shipper. We’ll expect you to pay for the 12 works that will be in your show. The other times this happened. but only if you let us ship it UPS. and we will continue to discuss who is liable for the three water-damaged works. and arrived on time and apparently in good condition. The artworks filled four boxes. XYZ contacted ABC immediately.
WeCanShipArt: Wait a minute. at its financial risk. that’s okay with me if it’s okay with XYZ. regardless of where the original three artworks were damaged. the three companies were able to agree to undertake an investigation within each company to determine when the artworks were damaged. XYZ: Okay. And we’ll eat the cost of shipping. The artwork was not damaged while in our control. they will split the cost of the three damaged pieces three ways. If we don’t make the deadline.XYZ: Agreed.m. ABC: Well. We can guarantee that we will deliver the new order in perfect condition by 5:00 p. Having reached an amiable solution to the immediate problem. generated a like offer from WeCanShipArt and a reasonable response from XYZ. tomorrow and we’ll wait for payment on both shipments until we resolve how the artworks were damaged. we’ll take responsibility for all of the consequences: the lost sale to ABC and the lost promotional sale by XYZ. how do we resolve the issue of the damaged artworks? Conclusion ABC’s decision to offer a solution to XYZ’s immediate problem. You can’t just ignore us. and if word gets out that you think it was. Now. They also agreed that if the investigations are not conclusive. 78 50 Practical Negotiation Tactics . we’re ruined. I can’t see how I can refuse that.
and it came with the bush hog and the leaf pick-up. we’ll sell it to you. I don’t have any idea. Ann: Well. Ann: That sounds great! I don’t want this to affect our friendship. Can you check others in the paper and just give us your best price? We will either take it or advertise the tractor in the paper. no hard feelings either way. but if you’re interested. What do you want for it? Colleen: Well. Example 1 Colleen: Ann. and even more hours in the fall picking up leaves. period. You must mean what you say and be prepared to walk away from an unacceptable offer. Jeff spends many hours mowing the yard every week. The “first and best” tactic enabled them to settle the matter easily. Okay? No quibbling. but ONLY if you have a bottom line or definite point at which you will accept an agreement and you believe the other party will make a reasonable offer.Tactic 19: Make a First and Best Offer If you want to cut a deal but you don’t like the “give-and-take” negotiation process.000 for it six years ago. I don’t want to quibble. Exchanging Initial Offers 79 . Why don’t you give me a price? Colleen: Oh. I know you and Jeff said you’d like one because you have about five acres. Conclusion Ann and Colleen did not feel like negotiating over the tractor and running the risk that it might affect their friendship. Ann: Thanks! We really need one. we paid $5. We plan to put an ad in the paper next week. consider using the “First and Best” tactic. It is important that both sides know that there is no negotiating beyond the single “best offer”—that the first offer will either be accepted or rejected. we plan on selling our Ford tractor when we move.
I’ll discuss it with my wife and get back to you in 48 hours. I want the job.Example 2 Archie: Well. on this slip of paper. We want you. I don’t like negotiating over salary either. Archie: Thanks. but I don’t want to start off in a new job by negotiating with my boss! So. Here it is. So. I expect a fair increase. how about you making your first salary offer your best one. Okay? Vernon: That sounds good. Conclusion Archie accepted the job offer. I think we have agreed to all aspects of the job offer. as we agreed. but we have internal budget considerations and we must consider equity with other employees. because it was several thousand dollars above what he decided was the minimum it would take for him to change employers. 80 50 Practical Negotiation Tactics . I’ll either accept it or reject it. and I’ll take 48 hours to consider it. (three days later) Vernon: Archie. I’ll get back to you in three days. no questions asked. and you know my current salary. except salary. I came up with the best salary offer I can make. He also started the job with a positive working relationship with Vernon. who admired the way Archie negotiated his starting salary.
you will probably have to modify some of your positions if you are to reach agreement. so he knew that he would have to sell them very quickly. a 4:00 a. Fourth.m. This is called posturing—presenting your position strongly and completely. Sally’s Senior Prom is coming up. we’re not going to be dating exclusively after this summer. and it really wouldn’t be fair if I wasn’t able to go along with the rest of the group. and we’ve made a lot of plans with our friends that I need to talk to you about. He knew his parents would not agree to let him stay out all night. look for indications from your opponent as to what he or she believes is their best position. First. and in a favorable light.m. It might be your only opportunity to explain your position without interruption. Posturing is indeed “acting. Kevin had “negotiated” with his parents before. and ignore or deny any weaknesses in it. was dating a senior. Exchanging Initial Offers 81 . Example 1 Kevin.) During the posturing phase. curfew would be okay. Second.” As you know. and then to breakfast at “Timothy’s. we’re all meeting at Donna’s so we can share a limousine.Tactic 20: Posturing You might have to do a little acting at the beginning of the negotiations. (Once negotiations get underway. His girl friend’s Senior Prom was coming up and Kevin obviously wanted to stay out beyond his usual curfew time of 1:00 a. you know that Sally is really looking forward to this. 17 years old and a junior in high school. you only have one Senior Prom in your life. Kevin: Mom and Dad. He and his date had decided that as long as they could join their friends for breakfast after the prom. First we’re going to dinner. Third. so the prom is a pretty big deal to both of us. then the prom. since Sally is going away to college next year. Present your position and demands as if yours is the only logical position.” but it is also a source of valuable information that can help the negotiations proceed to a successful conclusion. I’m the only junior in the crowd. but he figured “all night” was relative.
and the crowd we hang with doesn’t either. they will be open for the Prom crowd only. but it should not be oversold. And if we don’t spend the night. happy about your plans to use a limousine so you kids aren’t driving. the limousine will take us back to Donna’s house to spend the night. so there will be plenty of chaperoning. Yes. Finally. Donna’s parents are not as strict as they could be when a bunch of you are there. We are. Also. We’re just not convinced that your entire group has been alcohol. I know you trust me and that I’ve earned the trust. of course. Fifth. That’s the deal then? Okay. I’ve never missed my curfew. We’ve heard that they allow kids to drink. You realize that this could be as late as 4:00 a.Mom: Kevin: Mom: Kevin: Timothy’s usually isn’t open early in the morning. That’s asking us to believe a lot. 82 50 Practical Negotiation Tactics . we’ll have to get in our car and drive home very early in the morning. yes. this prom is a one-night thing—a dance that is dressier than you’re used to. you and Sally need to call it a night (or really a morning). and we’re just not happy about that. I believe you can pay a little more and have the limousine bring you both home. but to use that as a reason to stay overnight doesn’t make sense. for sure. we know. However. remember that when you started dating Sally and hanging out with an older crowd. And. From where we sit.or drug-free. Donna’s parents will be there. Things can happen on a night like that that adversely affect you for the rest of your life. Second. So. I think I ought to be able to stay out all night. You make some good points. which could be dangerous.m. you have been fairly good about making your curfew—most of the time. Sally’s parents trust us and have already said yes to her. We think that after the breakfast. you will have another Senior Prom—yours—so we don’t think you will be “missing” that much if you don’t stay out all night. we told you that we would not be changing our rules to accommodate that older group. but because the owner’s daughter goes to Sally’s school. I don’t drink or do drugs.
but was disappointed to learn that they offer very few incentives. The assembly plant is out-of-date. Tencro is not going to leave the state. we’d be adding at least 500 new jobs. our Exchanging Initial Offers 83 . We need to find out what you’re willing to do to keep us here. Example 2 Tencro Company decided to modernize and expand its business. Also. and it does not really need any help. and it will grow—everything from sub-parts manufacturing to the shipping business we generate.m. the state can do to help the company expand and rebuild. Tencro: Let me just remind you of what our company means to this state. but we’re getting a lot of interest from other states willing to help us relocate. we are one of the largest employers in this county. other companies have received incentives and Tencro certainly wants all it can get. but it could easily add another 500 if it had the space on its assembly line. but there are limited options available. we’re of course interested in keeping you here.Conclusion Kevin’s strategy to hit his parents with all of his very good arguments at the outset gave him an advantage. and had this conversation: Tencro: We really want to keep our company here and expand it. Tencro has approached the state’s Office for Business Incentives to see what. The company approached other states to see what incentives they might offer Tencro to locate in their state. one-floor operation would be very profitable. It currently employs 800 people. Tencro approached the state’s Economic Development Officer. With 800 employees. Nevertheless. regardless of the incentives. The spin-off business from our operations is huge. if anything. If we can expand here. EDO: Well. and a new. Sally and Kevin had a wonderful night and were quite happy to have the evening end at 4:00 a. because his parents could not disagree with such wellthought-out ideas.
and traffic signals. EDO: The state has very limited resources to pay for economic development incentives. now that the economy has improved. And. and we are willing to offer some training dollars for the new workers. We need certain incentives. We think that we’re the reason XYZ and ABC companies located here and we believe they are likely to leave if we do. any plan by the state to build housing that is subsidized by tax dollars will draw a great deal of criticism. etc. Just increasing the workforce by 500 will pull new people into the community and cause housing costs to rise—something our citizens on fixed incomes are very much against. Certainly. Also. while we value your company as a long-time corporate citizen. That might involve the state building housing for them at a reduced cost and providing them with some retraining. We need a rebate on the local income taxes to help pay off the loan to build our new building. And we’ve been offered land practically free in the neighboring state. We can’t possibly give it away to other companies coming in behind them. moving to a new location will raise a lot of questions from neighbors about the increase in traffic and pollution that might be generated by your plant.employees pump money into the economy by buying houses and cars.. We need help in the cost of attracting and training the new 500 employees. paying taxes. or else it will not be cost-effective for us to stay here. what do you have to have? Tencro: We need a new location—20 acres or so—to build our new plant. EDO: Well. if the new location is at the local industrial park. additional police. so we’d have to have it free here. etc. we will need the two-lane entrance expanded to four lanes. and we’ve had to divert funds from business incentive programs over to basic services. We do want you to expand your plant. We 84 50 Practical Negotiation Tactics . The industrial park land can’t be “free” because we have agreements with other companies that had to buy the land. schools. There are more residents in the state demanding more public services: road improvements.
but for the fact that each party did its homework and was aware of the true facts. Conclusion The posturing by both sides could have caused the whole negotiation process to bog down. The new set-up was so profitable. and hired 500 new employees. Other than that. EDO: Get back to us as soon as you can. the training and the new road improvements were all the incentives offered to Tencro.agree that the road into the industrial park must be widened and a traffic light installed at our expense. Tencro bought land in the industrial park. we’re just not in a position to offer more than that at this time. let us go back and take another look at our options. Tencro was able to pay off the borrowed money in half the time. borrowed money for the new building. However. and the state did end up participating in a housing subdivision in order to keep the purchase price down for the new employees. Tencro: Well. Future negotiations continued. Exchanging Initial Offers 85 .
thus requiring greater concessions on both sides. 86 50 Practical Negotiation Tactics . Jay: No.” (You have won a settlement. think things through before you make or accept the first offer. 2) Start out with an old number. either: 1) Let the other party make the first offer (this means that you will be giving up the chance to focus the negotiations on your figure. and you cannot withdraw it in good faith. and houses in this area sell fast. because you have settled quickly.000—what they paid for it.000. The other party will probably come back with an equally ridiculous offer. or 3) Make an unrealistic offer (i. particularly if you don’t know the other party’s “settlement range.000.e. The worst first offer is the one that is so high or so low that the other party jumps on it immediately—known as the “Winner’s Curse. They found one they both like that lists for $325. Example 1 Jay and Sue are looking to buy a house in a specific neighborhood because it has a good school system.Tactic 21: Avoid the “Winner’s Curse” It is often quite difficult to make the first offer.000 this year. offer $150.000. The sellers must be willing to come down a few thousand … Sue: Well.” The perfect first offer. then $320. and that two similar ones on the same street sold for $330..000 for a house that sold for $185. Their realtor told them that it sold for $290.000 three years ago). Jay: No.) To prevent this from happening. such as last year’s price. That’s a fair price. but you feel cursed because you gave away too much. of course. before someone else does. at minimum cost. which can be very useful). We don’t know how anxious they are to sell or if they know the market.000 and $337.000 two years ago. never give them their asking price. Let’s low-ball them and offer $290. is the most (or least) the other side will accept. Sue: Let’s offer $325. Avoid giving away too much at the outset.
Let’s accept it! Conclusion Jay and Sue avoided the so-called winner’s curse by making a low (but reasonable) first offer. (Bob and Frank meet privately to discuss the situation. Lyle Foxworthy. would have suffered the winner’s curse! Example 2 Bob Myers and Frank Costello made a presentation to the top management of a paint company.000 for each of us—$6.500—half the difference! Sue: Great.) Bob: I’d do it for $3. the sellers obviously would have accepted and Jay and Sue. Frank: Me too. then let them make a counteroffer. Lyle: So what’s your price? Bob: Can you tell us what you have budgeted for this project? Lyle: No. They outlined how they would develop a new employee performance-appraisal system. realizing they offered too much.000. If. was very impressed with their presentation.Sue: Don’t be crazy.000. Both parties felt that they made a good deal. since they had already bought another house. they had offered $325. Give us your lowest price. and the offer was based on fact: the prior negotiated price. The buyers were very motivated to sell. as requested by the human resource director. That’s an insult! Jay: Well. the company president. Exchanging Initial Offers 87 . as Sue had first suggested. I can’t tell our realtor $290. (the next day …) Jay: They made us a counteroffer of $307. Sue: Then you do it.000 total. but who knows what they are planning on offering.
) Lyle: Okay. I’m out of time.Bob: Lets make them give us a price! (Bob and Frank return to the meeting room. They also ended up getting three times ($18. We’ve waited long enough.000) their minimum price of $6. but we can’t pay more than $18. and you two come highly recommended. 88 50 Practical Negotiation Tactics .000. but we know you must have an amount budgeted for this and we are willing to do it for that amount. What is it? Lyle: Why don’t you give us a price? Bob: We can’t use our daily rate because it might be too high for this work. What’s the cost? Bob: We want the job.000. Bob: That’s fair. That is all that’s left in this year’s training budget. Conclusion Bob and Frank avoided the winner’s curse by forcing Lyle to make the first offer. and it would not apply. Lyle: Okay. We’ll do the job.
and remain open to offers and options that you did not originally expect (see Tactic #30: Always Leave Room for Dessert). In some negotiation situations. be prepared to divide an offer into smaller ones to make it appear to be more reasonable to the other party (see Tactic #31: Cut Salami Slices) or offer two or more alternative proposals of equal value to you. When the other party makes an offer. Skilled negotiators such as salespeople. Experienced negotiators also know that proposing multiple options (see Tactic #22) and offering a tradeoff (see Tactic #23) are useful when more than one issue or item is to be negotiated. T Making Counteroffers (The “Give and Take”) 89 . in fact.Stage 4: Making Counteroffers he heart of the negotiation process is the give-and-take. One or more parts might be acceptable or indicate movement from their previous positions. Experienced negotiators seldom reveal their exact priorities and objectives. because if you do not at least appear to be flexible. which is often the case. labor negotiators. Use a prolonged period of silence (see Tactic #29) to convey something at a strategic moment. which would most likely weaken their position (see Tactic #26: Keeping Secrets). is likely to pull away from the table. This can produce a negotiated solution without giving up your priorities (see Tactic #28: Fixed Alternatives). Expect that the “total pie” will be different from what it was at the outset. and do not flatly reject it because it is not your offer. Wait to counter (see Tactic #24) because this will give the opponent the sense that you are serious about bargaining. be enlarged (see Tactic #27: Expanding the Pie). what appears to be an outer limit of the settlement range when the process starts can. and attorneys use tried and true tactics in giving and receiving offers. but possibly of different values to your opponent. seeing no common ground. Instead. do not dismiss it because it is not all you want. the other party. Also. carefully evaluate an opponent’s offer. It has often been said that the key to negotiations is to be flexible (see Tactic #25).
Dad. 15. We have four options. He planned on being home for one last week before having to pack up and go back to college. and that he already made plans to visit with college friends on the East Coast for the two weeks after that. 19. while it may be your best option. except when you’re negotiating. In mid-June. and I try to get to the South Carolina beach for a week in July? Sydney: I’m not going to the beach with my parents! I’ll just stay home. Here’s the discussion that followed: Mom: Well. I don’t want to give up on a family vacation that quickly.Tactic 22: Propose Multiple Options The shortest distance between two points is a straight line. so you can go without me. Jerry will be here. The week he would be home would be the first week of school for Sydney. completed his first year of college and came home for the summer around the middle of May. Sydney. Dad: Wait a minute. what say you. Option 1: No family vacation. His brother Sydney. 90 50 Practical Negotiation Tactics . Proposing only one solution to a problem. The reciprocal opportunity to review and select among options rather than accept one (“take it or leave it”) also gives your opponent a way to win. Jerry pointed out that he is expected to work until July 31st. Proposing multiple ways to reach your goal can get you to the same place. The effort it takes to come up with multiple options (all of which are acceptable to you) reveals additional ways in which you see yourself “winning” in the negotiations. Option 2: Mom and I go before Jerry leaves on August 1. Let’s see what we can work out. Jerry had already started his summer job. Example 1 Jerry. it looks like we can’t really plan a vacation for all four of us. and quicker. their parents began discussing a family summer vacation. gives your opponent little maneuvering room and might even prolong or damage the negotiations. finished his freshman year of high school at the beginning of June.
but it should work out all right. Mom? Mom: Let’s do it. we could return home on Thursday and still get a week’s vacation. Option 4: Jerry doesn’t return home the week between his visit to the Northeast and returning to school. actually.Option 3: Mom. Jerry: My friends and I have plans through Saturday of that week. but he can discharge employees for poor performance. Sydney: Okay. By proposing numerous options. Andrea considers Making Counteroffers (The “Give and Take”) 91 . Jerry: Okay with me. Joe has no say in who was hired by the corporate legal office to work in his unit. me. Then Jerry joins us until Thursday. you have a half-day orientation on Wednesday. Classes don’t start until Friday. Bob. Sydney: Don’t I start school that week? I don’t want to miss school. If we started the vacation on a Thursday. It’s not perfect. they were able to make that happen and not interfere with or argue about the merits of each other’s individual goals. and Sydney go to South Carolina before his school starts. when we come home. And I miss orientation and start school the next day? Dad: That’s an option. Example 2 Joe is an attorney whose job responsibilities include managing three other attorneys (Andrea. Mom: Well. Sydney: So what you’re suggesting is that the three of us are on vacation from Thursday to Sunday. if it’s okay with Jerry. Conclusion The goal was to have a family vacation. one paralegal. we meet up with him that week for vacation. so I won’t be able to meet up with you until Sunday. and one secretary in his litigation unit. and Carl).
she made a two glaring errors in judgment. It was just a comment. You had no authority to agree to settle the Stites case without clearing it with me. If you don’t like the way I do my job. Andrea: Wait Joe. Joe: Come on. and resents any attempt by Joe to supervise her work. we have a very big problem. Joe: That’s all well and good. Before you start. To put it as bluntly as I can. Andrea: You didn’t list moving to another unit as an option. I really see your options as follows: You can leave the corporation. and I don’t see why we don’t have more independence. you know that wasn’t an okay to settle. let me say that I’m handling the missed deadline on the pleading. It is to the corporation’s benefit to address that problem here and now. why don’t you just move me to another unit? I’m certain Bill thinks I do good work and would be happy to have me in his group. Her job performance was acceptable. Andrea: We’re hired for our expertise. 92 50 Practical Negotiation Tactics .herself to be a professional. or you can work out a “supervision” agreement with me so that I can better monitor your performance. you can agree to a demotion so that your areas of responsibility are lessened to that of a paralegal. isn’t it? But I don’t think just moving you really solves the problem. but it doesn’t solve the problem—nor is it the only problem. however. The attorney for the other side has agreed to give me the additional time to file it. you have a job-performance problem. Andrea. Joe: That is certainly an option. so Joe took a “hands off” approach. rather than to put it off on someone else or for some time in the future. Andrea: Well. In the last month. I thought I had cleared it with you when I told you what I thought they ought to offer and you said that sounded too good to be true. We have a formal procedure that you just don’t like to follow. which forced Joe to take action. Joe: Andrea.
rather than my staying here. Joe: That’s fine with me. If you are convinced that I have to undertake an “approval” program. I hope we can work it out.Joe: That could be an option. my goal is the same is yours: to create an environment where you can perform to your full potential. Andrea’s move and subsequent “approval” regime did.) Making Counteroffers (The “Give and Take”) 93 . It also changed her attitude about being both a professional and a team player in a corporate office. Believe it or not. (Adapted from The Mind and The Heart of the Negotiator. but it would still require some change in the way you work: either a demotion. lets talk to Bill about the move. If that option is okay with you. then it would save face for me if it comes with a move to another unit. Conclusion Joe’s willingness to offer more than one solution gave Andrea a way to look at this unfortunate situation as an opportunity. or I would advise your next supervisor to put you on a very formal approval program. But in fairness to our mutual employer. Andrea: Well. by Leigh Thompson. I want to stay with the firm. and propose an acceptable alternative. improve her work performance. the needs of the corporation have to come first. in fact.
For example. etc. let’s see if there are any items we both want. They have a fixed amount of money—$14. Let’s agree to those things. 2) exchange items (those that can be easily traded off—one item for another item of equal value.500. Example 1 Brooks and Maureen Wilson have just finished building a new home. 3) distributive items (those items for which the two parties have exactly opposite interests. (She looks over the list. It goes like this: Organize the joint list of demands into three categories: 1) compatible items (those items that both parties can quickly agree on because they share the same desired outcome). In essence.) Yes. and a home theatre. Wow! We are off to a good start. thus making it necessary to find a middle ground on each. This approach is an important tactic. These items often involve money). then the contractor has lost $500 in revenue. Avoid assuming that you both differ on every issue (in which case you might be making unnecessary sacrifices) by first identifying items for which both sides have similar desires. only those with polar-opposite interests that must be divided. Let’s see. Brooks: Right. 94 50 Practical Negotiation Tactics . one person’s gain is another’s loss—zero-sum. the fencing. They each agreed to list the items they want and then to negotiate whether or not they will be purchased. because it can speed up negotiations and produce a more desirable outcome.000. if a buyer negotiates a $500 reduction of a contractor’s bill. Exchange. Maureen: First. three strategies are used. With distributive items. then those which can be easily traded. that’s $9.).Tactic 23: The “Win-Win” Approach (Identify Issues as Compatible. or Distributive) The “win-win” approach to negotiations is a basic tradeoff strategy of seeking maximum gains for both sides. It is used only when each side has several demands. we both want the sod. They both agreed that this is the maximum they will spend on “extras” before moving in. and finally.
000! Brooks: Good.500 $500 $1. $750 for lighting and $750 in the bank.000 $2.500 $5.# 1 Sod Item Cost $1.500 left.000 $5. I’d like to spend some of it on lighting upgrades.500 $2.000 $3.000 $1. and we both get things we want.000 Brooks X X Maureen X “Win-Win” Category Compatible Exchange 2 Trees (3) 3 Berber carpeting 4 Lighting upgrades 5 Third garage 6 Tile entry 7 Designer drapes 8 Deluxe home theatre 9 Extra sidewalk 10 Custom chandelier 11 Whirlpool bath 12 Fencing X X X X X X X X X X X Exchange Compatible X Compatible Exchange Distributive Maureen: Well. I’ll trade your sidewalk and trees for my whirlpool bath.200 $200–$2. Can we split it evenly? Brooks: Okay. Making Counteroffers (The “Give and Take”) 95 . which takes another $3.000 $500 $1. that makes sense. These are all permanent immediate needs. which I’d like to keep in the bank. Maureen: No. We have $1.
Maureen and Brooks were able to identify those things they both wanted (the compatible items) and then trade some items of equal value (the exchange items). Example 2 Ohio Metals Company and Local 56 of the Primary and Sheet Metal Workers of America-AFL-CIO have had a generally positive labor relationship for over fifty years. During that time. Drug-Testing Program 96 50 Practical Negotiation Tactics . All items to be negotiated and their desired outcome for each item were put in writing for review. Item Management 3 years None 1% 10% of net For cause only Union 3 years 2% 5% 12% of net For cause only Win-Win Category Compatible Exchange Distributive Exchange Compatible 1. The combined lists total thirteen different items: Desired Outcome No. Wage Increase 4. Pension Increase 3.Conclusion By taking the time to list all the items each person wanted and their cost estimates. finally agreeing to split the difference on the remaining amount (distributive items). Length of Contract 2. both sides exchanged lists of initial demands at their first meeting. Profit-Sharing 5. management and union negotiators found that a “winwin” approach to negotiations worked well. even in difficult years. This year.
Health Insurance Employees pay 20% Continue cur. Job Security 13. Next. and the union clothing allowance proposal (#13) for the management funeral leave proposal (#8). Paid Funeral Leave 9. Shift Differential 11. eleven of the thirteen original issues to be negotiated had been agreed to. No Strike/No Lockout 10. and (#9) to continue the often-discussed no strike/no lockout provision. they accepted the union job security proposal (#12) in exchange for the management subcontracting proposal (#11).6.Distributive rent program co-pay Exchange Exchange 7. and removed from the table. Subcontracting 12. the management profit sharing plan (#4) was exchanged for the union overtime assignment plan (#7). the negotiators agreed that they had compatible positions on three items: (#1) length of contract. (#5) a new drug testing program. Next. one Making Counteroffers (The “Give and Take”) 97 . signed.Voluntary ity 2 days Continue current provision 10% 10% No provision $50/month 3 days Continue cur. they began to trade off the exchange issues of similar value and nature. First. Clothing Allowance Based on senior. At this point. Finally. This gave members of both sides a sense of accomplishment as they began to discuss the remaining two issues for which they must find a middle ground.Compatible rent provision 15% Exchange 15% No layoff provision $100/month Exchange Exchange Exchange In their second meeting. Overtime Assignment 8. they exchanged the economic issues of approximately equal cost: the union pension increase proposal (#2) for the management shift differential (#10). Because they held opposite positions on these issues. They proceeded to draft the language to settle these issues.
you can use the process to settle many of the other issues on the table. They then identify each as compatible. when you exchange items so that each party achieves their desired outcome on one of the two. the most difficult issues (often involving price or some other economic measure) can be negotiated because you know that most items have been settled successfully and only a few remain. These two distributive issues—wages (#1) and health insurance (#6)—were the most challenging to settle. Sometimes the classic “split-the-difference” method is helpful in locating a middle ground. Second. Conclusion This tactic is simple. but a middle ground was eventually found on each and negotiations ended. negotiations begin on a positive “win-win” note.side’s gain is the other’s loss. A middle ground often must be found on each of these distributive issues if you are to reach an agreement. The tactic offers several advantages: First. exchange. Third. when you agree on the items where both parties have similar desired outcomes. 98 50 Practical Negotiation Tactics . or distributive so that the negotiations can begin in an organized manner. if both parties start from reasonable positions. Both sides first agree that all issues to be discussed will indeed be listed and openly discussed. but it can be very effective when a negotiation situation involves several issues.
Let me finish. They agreed on which part of the room each would have. will make your opponent feel good about the process. The final issue had to do with “lights out” and quiet times for studying. the location of the TV. and can help you reach your goal. So when’s a good time? Jasper: (without hesitation) No way. stereo. A counterproposal delivered too quickly tells the other side that you haven’t or won’t even seriously consider their offer. and from a strategic standpoint. each side is expected to put an offer on the table. Mutual respect must be part of the negotiation process. and on what would be considered acceptable “sharing” of each other’s junk food supplies. Example 1 Jasper and Rob met when they were assigned to the same dorm room their freshman year in college. Here is how the last issue was handled: Okay. Rob: Making Counteroffers (The “Give and Take”) 99 . so I can study. It is especially important that you do two things: take your time before rejecting any offer from the other side. This isn’t high school. and studies late into the night. Rob stays busy all day and evening with other activities. and refrigerator. so he wants a quiet room late at night. last item: I’d like it quiet in the room at night. Since they didn’t know each other well.Tactic 24: Wait to Counter As the negotiations begin. and looks like you are belittling them. they decided to establish “room rules” so that they would both be comfortable with the room assignment. Jasper studies during the day and early evening and likes to stay up very late watching TV and visiting with friends. Rob: Wait a minute. I’m not interested in a curfew. Waiting a respectful amount of time to counter. do not offer a counterproposal right away. Jasper: Finish or not. You can reject the offer and offer a counterproposal after it is obvious that you have taken the time to consider the merits of it. you know. even if you aren’t going to accept their offer.
and d) a hearing with company owner if the matter is not resolved in 20 days. c) a formal “meeting” with plant manager if the matter is not resolved in 10 days. Neither side anticipates that there would be 100 50 Practical Negotiation Tactics . The union contract required that management renegotiate this change in the grievance procedure with the union. and that’s not negotiable. I want a 10:30 p. Jasper: (without taking a breath) At best. Jasper: Midnight. and that’s it.m. but changed his mind when he saw Jasper’s attitude. b) written complaint to a floor manager if the matter is not resolved in 5 days. 10:30 p. employee grievances had to go through four levels of supervisory review and appeal: a) verbal complaint to the non-union crew leader. curfew on TV and other noise every night. the positions of non-union crew leader and floor manager would both be eliminated.m.) Listen. midnight during the week is the only thing I’ll consider. Failure of both young men to allow one another to have their proposal considered caused the relationship to break down. is all I’ll consider.Rob: (Rob was about to suggest midnight on Mondays through Thursdays. Under ABC ‘s contract with the union. No agreement was reached. Under the restructuring. Example 2 ABC Company’s management was being restructured and compressed in order to facilitate its new “just-in-time” manufacturing philosophy. The appeals procedure would have to be altered to reflect the restructuring. Rob: (there is no hesitation in this voice) No. and the union foreman would report directly to the plant manager. Rob: I’m going to look for a new roommate!! Jasper: Fine!! Conclusion It was clear that neither Rob nor Jasper was seriously considering the requests and suggestions of the other person.
) We’re just not happy that you are proposing a Making Counteroffers (The “Give and Take”) 101 . and everything else stays the same. Company: (rather abruptly) Let’s not drag this out. We’ve got a couple of alternative models for you to consider. An aggrieved employee can make a request for a meeting with the plant manager. The union was prepared to accept the plant manager’s position as final. If the union foreman felt that the grievance had merit. We’d like you to consider the plant manager’s role as a problem-solver. (Note: An attitude change sets in. Union: You obviously didn’t come here to negotiate. Company: (no hesitating) Trust me. our grievances often signal to management that there are real problems on the shop floor. We just cut out two steps. and I’m certain your members will be okay with it. We’ve simply eliminated the first two steps. Company: Here’s the new draft of the grievance procedure. Certainly. If in 20 days he/she has not been satisfied. and began the negotiation session concerning the grievance procedure. ABC Company’s negotiator explained the management changes soon to be implemented. The redraft is simple and straightforward. After initial pleasantries were exchanged. rather than as a judge on the merits of the grievance. but to dictate. the union arrived at the meeting prepared to support a streamlined process that called for the employee with a grievance to discuss it first with the union foreman. the employee and the foreman would meet with the plant manager and attempt to resolve it. In fact. this redraft is a very simple change to the contract. Union: Hold on. Union: As you know. rather than go on to appeal it to the company owner. because those management layers are gone. We think that this is an opportunity to eliminate some of the adversarial aspects of the grievance procedure.any objection to the change. Our guys are prepared to accept a shorter grievance procedure if we can find a way to ensure that you’ll take our grievance issues seriously. he/she can take the grievance to the plant owner for a hearing. no one can complain about that.
This time. After a cooling off period. to prevent any change! Company: (surprised) What? Why would you object to this? Your guys will get a final decision in 20 days. the two parties did meet again.two-step grievance procedure instead of a four-step procedure. the company entertained the ideas the union had tried to propose before. Conclusion ABC Company’s failure to take adequate time to consider the union’s offer or even act as if it was considering the offer prolonged the negotiations unnecessarily. 102 50 Practical Negotiation Tactics . rather than in the 35 days the current system provides. and actually accepted a three-step procedure. We’ll see you on the picket line. Union: We’re very serious. and we’ll strike if we have to. You can’t be serious.
it’s just too much to do both. and at least five aunts and uncles) ate around 7:00 p. Sue’s sister Nancy called her to talk her into coming anyway. Even before the baby’s arrival. Bill’s family (parents. But after the negotiation gets started. The couple used to have Thanksgiving dinner at both families’ homes. They’ve done the research. their spouses. we’ll get to our side. the Thanksgiving marathon caused problems: They would have to leave Sue’s family’s celebration before the “traditional” after-dinner trivia games (which Sue really enjoyed). Mom says you. Nancy: Sue. Be open minded. They flipped a coin to see who “got” them and the new baby this year. and we’re really not able to enjoy either one. Sue: Yes. and identified the range of options they feel comfortable with negotiating. and ten nieces and nephews) always ate around 5:00 p. successful negotiators remain flexible because new solutions to old problems often surface during a negotiation. established goals.Tactic 25: Be Flexible A negotiation begins with both parties having some idea of where they hope to end up. Making Counteroffers (The “Give and Take”) 103 . Sue and Bill decided that they had to begin alternating their Thanksgiving Day visits between the two families.m. Bill. and do not dismiss something said by your opponent just because it came from the opponent. you can adjust your demands or goals to include such new ideas. two brothers. Arriving late at Bill’s family gathering caused him to miss the “traditional” pre-dinner pro-football game on TV (which he had grown up believing was the real reason for thanks at Thanksgiving). Bill’s family won. and now have a new baby girl. one sister. and the baby aren’t coming for Thanksgiving dinner this year—that you’re going to Bill’s parents’ house. four brothers. Next year. Sue’s family (parents. If you are flexible. two sisters. Example 1 Sue and Bill have been married four years. and Sue called her mother to let her know that they would not be coming for Thanksgiving dinner this year.m.
Isn’t that what Thanksgiving is about—taking a day to give thanks for our blessings with the people we love? We’ll just arrange it so we do it two days in a row! Sue: Well. Celebrating the next day seems odd. Nancy: What if we did Thanksgiving on Friday? Sue: What? Nobody does Thanksgiving on Friday—that’s un-American! Anyway. I mean. Everyone in Sue’s family liked the idea of celebrating on the Friday after Thanksgiving. we’ll come to Mom’s. There’s nothing “special” about Friday. I thought of asking Mom if she could move dinner up to noon or so.. it’s okay with me if you can sell it to everyone else. Conclusion Nancy’s goal when she called Sue was to talk her into coming to their Mom’s Thanksgiving Dinner on Thursday.m. So that doesn’t work. but then I realized that the rest of you already go to your in-laws earlier in the day. I know that I would rather not do two Thanksgiving dinners on Thursday. either. Nancy was able to accomplish the real goal of the negotiations—to make sure that the holiday would be celebrated with the whole family present. and it became the family’s new tradition. Sue: I don’t know. By being flexible. I bet everyone could make it on Friday. Bill won the coin toss for this year. some people have to work on the Friday after Thanksgiving.Nancy: It just won’t be right without you guys. Thanksgiving is Thursday. Nancy: If we keep the time at 5:00 p. she suggested a unique alternative. the holiday will be over. Nancy: I’ll let you know. 104 50 Practical Negotiation Tactics . When that goal looked out of reach. Sue: Next year. Nancy: We’d make it special by all of us being together. Mom’s very upset. but she won’t tell you.
but we can’t fund all of the $12 or $15 million. Kids’ Home is also hoping to get the city to encourage the foundation to commit to full funding of the building project. Unfortunately (for Kids’ Home). a non-profit organization for orphaned children. but we need some assurance that you will be able to build and operate the orphan home at that location.000 a year for operations. Kids’ Home: As you know. but the principal of the fund can’t be touched. City officals: We can probably give you the land for free. Each year. we’re committed in theory. We need the city’s help by allowing us to get the city land donated to us (for free). Foundation officals: Oh. Estimates for building a new orphan home ranged from $12–$15 million. depending on the cost of the land.Example 2 Kids’ Home. the foundation’s regular annual grants come to roughly half of their available funds.5 million is available for distribution to numerous charities. the interest income of around $6. we hope to break ground early next year for the new orphan home. had been negotiating with a foundation to become its major benefactor for a new building and to supplement the organization’s annual operating budget. We only have maybe $2 million a year to put toward this charity. and raise the money to pay it back? And can’t the foundation grant you money on an annual basis? Making Counteroffers (The “Give and Take”) 105 . The foundation has a substantial endowment fund. They are meeting with the city to ask that the land be donated by the city for the project. Kids’ Home: That’s why we brought the foundation’s officials with us. Kids’ Home hoped to get $500. Kids’ Home and the foundation have decided that a parcel of city-owned land would be ideal as a site for the new building. City: Can’t you borrow the money from a bank to build the facility. We’re hoping to get a commitment from them to build and help fund the operations of a new facility.
If we borrowed $15 million at 10% interest. We’re not familiar with that program. 106 50 Practical Negotiation Tactics . and really taxes our ability to raise funds. it could end up costing double that amount. And “donations” aren’t a very safe collateral for any bank that wants to loan us money. We probably would not be able to participate. Why not ask the state to issue no-interest bonds? It can do that for non-profit organizations.Kids’ Home: Borrowing the money gets very expensive. Foundation: City: Foundation: Kids’ Home: Conclusion By exploring alternative financing plans suggested by the city. I’ll contact the state tomorrow. We’ve never committed our funds to pay back a bank loan. We wouldn’t want to make such a commitment to a bank. The commitment by the foundation to make the annual bond payment debt backed by the foundation’s endowment fund should be sufficient collateral to get such bonds issued and purchased. Kids’ Home was able to acquire state-issued no-interest bonds backed by the foundation’s pledge of interest income to build the new orphan home. We’re a nonprofit group. but we’re willing to look at it.
Successful negotiations depend on trust. and often took up all the space along the street in front of the two houses. They asked to meet with the Smiths to talk about these disagreements. the Smiths could count on parking their car directly in front of their house. It is perfectly acceptable to say that you are not ready to reveal certain things. and asked the officers to cite the Jones kids for parking too close to a corner. In order for a negotiation to be successful. These parties could get rather loud. Example 1 Soon after the Jones family moved in next door to the Smiths.m. you should be careful not to misrepresent your position to such an extent that your opponent will feel that you have lied. But the Jones clan had four cars altogether. Mr. and trust can only be established if all parties interact truthfully. Jones: We’ve obviously gotten off on the wrong foot. At the same time. Mr. and you probably won’t identify your throwaway items or tell your opponent your bottom-line. The Jones family let their tree branches hang over the Smiths’ back fence and rub against the Smiths’ garage roof. and often lasted until 2:00 or 3:00 a. and we would very much like to talk about how we can resolve these issues. Smith: We don’t know what you’re talking about. you might not want to reveal all of your priorities at first. The Smiths called the police to complain about a late-night party. However. The Jones’ two younger children—boys in their mid-teens—hit baseballs into the Smiths’ yard and scared the Smiths’ dog. each side has to know generally what each other wants to accomplish. The Jones family suspected that the Smiths called the police. the neighbors began to have problems. yet not reveal all of your goals and objectives. it is not acceptable to lie.Tactic 26: Keep Few Secrets One of the most difficult skills to master in a negotiation is how to be candid. The Jones’ two older children—girls in their early 20’s—often had friends over on Friday and Saturday nights. Before the Jones family moved into the neighborhood. Making Counteroffers (The “Give and Take”) 107 .
I’ll talk to the boys and we’ll make sure they play baseball in the park. Mr. Smith: Yes. Smith: No. we thought you might have called the police about our kids’ party and our cars. that wasn’t us. the next time the boys were out playing and the ball came into the Smiths’ yard. and they won’t be having friends over more than one night a weekend from now on. Almost every day. Mr. Mr. and not in the back yard. the late-night parties are a problem. Jones: Well. Smith: Well. Smith: Well. Mr. In spite of the Smiths’ assurances. if they are outside. they kept it. So. but we do know that someone has complained.) 108 50 Practical Negotiation Tactics . At our age. yes. Smith: You know that your boys are causing our dog. the Jones were visited by a city inspector because of a complaint from the Smiths about the tree branches hanging over the fence and brushing against the garage roof. Jones: Okay.Mr. Jones came to see what the problem was. I guess. Jones: I wish you had mentioned that the last time we talked. (A week later. If you can tell us all the things that we have done or are doing that have caused you to be inconvenienced. In good weather. we’re good now? Mr. Muffin. a lot of problems. And we’ll make sure none of our cars are parked in front of your house. And the music is to be off at midnight. Is that everything now? Mr. they’re hitting baseballs into our yard. then they’ll need to come in at midnight so that their talking doesn’t disturb you. It is really very disturbing. we’d like to be able to park our car in front of our house. Mr. fine. since you’ve asked. Jones: We’ve already talked to the girls about the parties. and was met with the following: Mr. Also. we would like to work out some solution. we have a problem walking long distances in bad weather.
you’ve said that before. Making Counteroffers (The “Give and Take”) 109 . Jones: Sure. and the deal is close to being final. Unless Neno can get the Union members back to work on Monday. Neno has been negotiating the sale of its business to a British company.S.S. Why didn’t you tell us? We can’t read what’s on your mind! Mr. Japanese companies often do not “recognize” labor unions the same way U. Jones: (at the Smiths’ door. irate) I can’t believe you people called an inspector on us. You obviously don’t want to be “good neighbors. although none of the facilities outside the U. The Jones’ effort to sit down and negotiate the problems with the Smiths were thwarted by the Smiths’ reluctance to put all of their concerns on the table and their failure to admit that they were the ones who made the formal complaints. We would have fixed the tree if you had asked. or the deal is off. Example 2 Neno Enterprises is a shipping company with extensive global operations. The union laborers walked off the job on Friday. the tree was clearly over the fence. But we didn’t call the inspector.” Forget all we’ve agreed to do—we’ll just enjoy the use of our property. the British firm will walk away from the deal. have labor unions. but Neno cannot tell the union this. The union knows that the company is up for sale. You could have seen that yourself. Union officials are afraid that a Japanese company might purchase it. and too bad for you! Conclusion The disagreements and unpleasantness continued until the Smiths finally sold their house and moved into a condominium. Its local headquarters has a union to handle its international shipping. or European companies do. Neno’s president and the Union representative met to discuss the walkout. The British insist that a very strict confidentiality provision be part of the negotiating process. because they didn’t like a grievance decision. Mr. Smith: Well.Mr.
the slowdown as a result of no one working Saturday and Sunday won’t be noticeable. this is a legal strike under the contract. I promise you. Therefore. If they do come back. any interruption in our shipping could affect how these buyers look at our business. I need your guys to come back to work on Monday. I can’t really be more explicit than that at this time. 110 50 Practical Negotiation Tactics . I know it’s not news to you that this business is up for sale. we don’t. But I have to have everyone back on Monday. whether it’s for one weekend or a week. It’s not the time to have one. I’ll forget all about the strike. Neno: Look. then there’s probably no harm done. it will impact our marketability. no harm-no foul. We can’t put up with the kind of decision we got on our grievance. We’ve not had a labor shutdown in 20 years. Union: What aren’t you telling me? A labor shutdown. maybe by next Friday or the week after that we’ll have our guys back to work. and if the guys are back on Monday. Have the guys back on Monday. Our guys are prepared to stay out a lot longer than Monday. so the union won’t be hurt by the buyout. We’ll meet with all of the parties on the grievance first thing Monday. Union: We think that the grievance decision affects our wages. If everyone is back on Monday. I’m certain that if we can sit down and talk next week. I think it already has. You don’t want to mess up our negotiations. If that’s going to have a bad effect on your being able to sell the business. And one company that is interested has a really good track record on expanding the businesses they buy. But if your guys are out past Sunday. do you? Union: No.Neno: You know this is a wildcat strike and that it is in violation of our contract. Neno: All I’m saying is that there is a difference. But we also need to make it clear that we expect you and whoever might buy your company to take our contract seriously. is still a labor shutdown. You really don’t want to do that. we will resolve it to your satisfaction by the end of the day. Anyone who buys the company will have to honor the contract we have. Neno: Look.
we’ll be back to work on Monday. while the grievance was being resolved. and it’s that important to you as well. I can. Union: Okay. rather than make up reasons. but the British firm will allow them to organize at their foreign locations. Can you assure me of that? Neno: Yes. He told him that it would mean that the union would not only keep its jobs here. I would be more specific. Union: Okay. If I could. Making Counteroffers (The “Give and Take”) 111 . Neno called the union negotiator in and briefed him on the sale. the union was willing to trust Neno—even though he couldn’t tell them everything. But I can’t. the sale was finalized. I’m going to go along with you because you’ve always dealt straight with me. Because the parties had dealt honestly with each other in the past.Union: It’s that important to you? Neno: Yes. But I need to tell my guys that this is important to them as well. was the right decision to make. as well. Conclusion On Monday. Neno’s decision to respect his confidentiality agreement and simply tell the union that he couldn’t disclose all the information.
Tactic 27: Expand the Pie
In some negotiation situations, agreement can be reached by increasing the total pool of resources available to all the parties involved. While this is not practical in every situation, a relatively minor increase in the resources available might allow both parties to reach a solution. Resources should be as broadly defined as possible—money, people, time, etc.—when considering how a “fixed pie” might be expanded.
Alexis, age 7, did not want to practice her violin for an hour today, but she promised her parents that she would practice an hour each day if they bought her the instrument. She really wants to visit her friend Michelle and spend the night.
Mother: Alexis, our agreement was one hour a day, every day! Alexis: I know, but if I’m going to play with Michelle, I’ve got to go with her now! She only has two hours before her game and then her mother is taking us shopping. Mother: That’s too bad. Alexis: Can’t I miss one day? Mother: No, you promised to practice every day to learn to play. Alexis: Could I practice two hours tomorrow when I get home? Mother: One in the morning and one at night? Alexis: Yeah. That would be easy. And I would still get in three hours of practice this weekend. Mother: Okay. Then you can go with Michele.
Alexis’s proposal expanded the resource of time to find a solution, and her mother agreed to it because her objective (for her daughter to get in enough practice time) was met.
50 Practical Negotiation Tactics
Supervisor: Peggy and Kim, you’ve both had a great sales month and you both earned that trip to Hawaii, according to the promotion program. The cost to send both of you and your spouses exceeds the budget by $1,200, however, so we’ll need to negotiate something. Peggy: Like what? Supervisor: Well … I could send one couple this year and the other next year, since I’ll have a new travel budget by then. Kim: That doesn’t seem fair. We both earned it this year, and we want to take it this summer! Peggy: That’s right! Supervisor: I’m sorry. We never expected to have six people qualify for the trip this year, and the budget is simply not large enough. Peggy: Well, that is your problem. What other ideas do you have? Supervisor: You can each pay half the cost of the flights. Kim: Why should we pay for part of a bonus we earned? Supervisor: Let me talk to the department head about this … (The next day) Supervisor: I spoke with the department head, who explained that if we keep spending the office-supply budget at the current rate, there should be enough left over for me to transfer some money to the travel account to cover the trip for you and your spouses. Will you both help me control supply expenses? Kim: Sure we will, and thank you for finding a solution so we can all go on the trip! Peggy: Yes, we can keep supply expenses down. Thanks for thinking creatively.
Making Counteroffers (The “Give and Take”)
The supervisor in this situation quickly recognized that no negotiated settlement would satisfy Kim and Peggy. Their morale was important to her, so she sought to “expand the pie.” She did so without increasing the total annual budget, which was why the department head agreed to the one-time budget transfer.
50 Practical Negotiation Tactics
Tactic 28: Offer Fixed Alternatives
You might be more successful if you present several alternative positions to the other side. One party can present to the second party two or more proposals of equal value to the first party. This gives the second party the option of choosing one of the multiple offers. The second party is more likely to respond positively to this strategy because (1) people generally prefer having more choices; (2) one of the offers might be of greater perceived value to the second party; and (3) most people prefer to have input into a decision—even if it’s only choosing one proposal out of two.
Colleen’s fifteen year-old daughter hates cleaning her room. She usually lets it get quite messy, like most teenagers. On Friday afternoon, the following negotiation takes place when Amber arrives home from school: Colleen: Amber, you must clean up your room. We are having an open house on Sunday, and the house will never sell with your room like it is now! Amber: Oh, Mom … Tonight’s the big sleepover at Chelsea’s house and tomorrow (Saturday) I have a basketball game. Colleen: Amber, I’ve been telling you for three days to clean your room! This is it! You are not leaving this house until it’s clean. Amber: That’s not fair! Last Saturday, you said I could go to Chelsea’s sleepover! Colleen: That was before you kept putting off cleaning your room. Amber: All my friends are going … (pause) Colleen: Okay, Amber, here are your choices: One. Clean your room right now and I’ll take you to her house after you finish. Two. Come home tomor-
Making Counteroffers (The “Give and Take”)
I can accept B. Felipe: (Roberto’s supervisor) Sorry. Amber resisted the chore she hated. I’ll do it now. Conclusion At first. Roberto: But it will never generate enough interest if no one knows about it. but I will cut your staff by one part-time person (or $15.000 budget! I need at least $20. that is enough time. Three. B. I’ll find a way to do without one part-time person. or C. I’m not going back to him again to discuss this program. Felipe: Sorry. Example 2 Roberto: I can’t properly advertise this new program with a $5. Take it or leave it. but no TV or anything until it’s done! (pause) Okay.Amber: row before your basketball game. I’ll approve $15. Clean it after your game.000). I have three hours. I’ll approve $15. I can’t help. Roberto: Well. keeping her Saturday free.000 for advertising. but the company president does not share your optimism on this program. (long pause) Felipe: Let me give you three options: A. Felipe: Well. Roberto: But I need to start the direct mail and newspaper ads within two weeks. she chose the one she most preferred. Use the $5. At least this way the program will have a chance to succeed! 116 50 Practical Negotiation Tactics . but I will cut your travel budget out completely. But when her mother laid out the schedule and gave her alternatives.000. or we lose a whole year.000 for advertising. and clean it.000 in the budget.
thus achieving his goal of not having to ask for a larger budget. Making Counteroffers (The “Give and Take”) 117 .Conclusion Felipe was willing to think “outside the box. One alternative.” He offered Roberto three alternatives of equal cost. which was his goal. Roberto believed. would enable him to adequately promote the program.
I am very disappointed in the company’s decision not to promote me and to limit my merit increase to 3%. but one side comes back with a non-negotiable demand. Example 1 Susan. Susan: I hope so. and 118 50 Practical Negotiation Tactics . She was determined to hold her ground for at least a 13% pay increase and a promotion. Jones. The negotiator for the other side says nothing. the negotiator who feels the most uncomfortable with the silence will fill the gap and most likely make a concession in order to get the other party to speak. This should have resulted in an automatic promotion and a sizable pay increase. Jones: I certainly do. the promotion had not yet been approved. Susan: Mr. But she also knew he would have to be willing to go to bat for her with his superiors if she was to get her advancement. inviting a response. you are a valued employee. he can make an open-ended statement. You know my commitment to this company. If his opponent cannot agree to the demand but does not want to end the negotiations. Susan knew that she was considered a valued employee and that her boss would want to do the best he could for her. I very much appreciated the fair job performance review you gave me. Unfortunately. I have to tell you that while I appreciate what you have done for me. nearing her third year with the company. one of the wisest things you can do is to keep silent—particularly when the parties have met several times and identified many areas of agreement. and the annual merit raise she was getting from the company was the same 3% other employees were receiving. I think you would agree with me that I have performed well above expectations this past year. It was 16% less than she had been led to believe she would be getting. Here’s how the negotiations went. received a glowing report from her boss on her job performance.Tactic 29: Prolonged Silence When negotiations have hit a critical stage. After a few minutes of silence.
(says nothing) If I can’t get that pay increase approved right now. Jones to continue to offer solutions. Promotions of this type are all but automatic around here.or three-year period. but a pay increase of that size might be more difficult. of course I will be glad to do that. Well. if management can see their way to giving you the pay increase now. and I think that I really haven’t been dealt with fairly. If there is some flexibility in your request.Jones: Susan: Jones: Susan: Jones: Susan: Jones: Susan: Jones: that I deserve more consideration. and sell it to management that way. it could help. Making Counteroffers (The “Give and Take”) 119 . and I’m sure management will agree. (says nothing) Or. maybe we can talk about the promotion later in the year. Conclusion Mr. I really want you to stay with the company. I suppose I could get the promotion approved with the proper presentation. Susan’s silence prompted Mr. Okay? (says nothing) Let me check it out and I’ll get back to you. but I don’t think management will be willing to give you an additional 10% pay raise AND a promotion. I would very much appreciate it if you could ask the company to reconsider. Once he acknowledged that both items might be awarded sometime in the future. I could probably find a way to phase it in over a two. because I feel my future with the company might be at stake here. the company’s refusal to grant them now was a harder position to support. I must ask you to try to get both. Jones went to management and convinced them that they should give Susan the promotion and the 13% raise.
The parties agreed to continue the previous terms of the agreement. Also. the people Madame Mayor currently 120 50 Practical Negotiation Tactics . Mayor) said that she was considering running for office.Example 2 Two local governments entered into a tax-sharing arrangement in order to provide joint services to citizens in a more efficient manner. My bosses might not have been inclined to expand the agreement anyway. Town Council Chair). I don’t think it’s a problem. and until she does. Mr. her plans really don’t have any bearing on these negotiations. and representatives of the elected officials of the two towns were meeting to renew and possibly expand the agreement. has colored these negotiations. but now they’ve got to ask what Madame Mayor’s motivations are. and were trying to settle on new and expanded areas when one of the elected officials (Ms. The term of the original agreement was nearing its end. The mayor. The end of the agreement coincided with the election cycle for the two towns. The mayor’s negotiating representative wanted to complete the negotiations on the expanded agreement. Town Council Representative: I think you’re wrong. She has not decided what she’s running for. Mayor’s representative: No. I think you’ll agree with me that the announcement your boss made about maybe running for Town Council Chair has dealt our negotiations to expand the agreement a fatal blow. This is how the negotiations went: Town Council Representative: Well. by saying that she might run for Chair. He decided to push for a simple renewal of the original terms. The office she was thinking about was the office held by her counterpart in the neighboring community (Mr. but the officials had hoped to complete the negotiations prior to anyone involved announcing for office. Town Council Chair’s representative believed that the ability to expand on the agreement was critically wounded by the uncertainty as to which office the mayor might seek.
represents have to worry that her desire to switch governments might taint the negotiations. In the end. the Town Council representative’s position prevailed. Town Council Representative: (silence) Mayor’s representative: I think it would look very bad for both of us if we spent all of this time negotiating and we don’t end up with anything new. He either had to end the session or figure out what to say to reengage the other side. Town Council Representative: (long silence) Mayor’s representative: (after an uncomfortably long silence) Well. Town Council Representative: (silence) Mayor’s representative: I would think that at least the proposals that don’t involve budget changes could be pursued. Mayor’s representative: Well. and the agreement was renewed with no new provisions. I’ll go back and tell Madame Mayor your position. Conclusion By remaining silent. I think we really have to drop back and just propose a renewal of the tax sharing agreement without adding any new items. I don’t know what her reaction will be. Making Counteroffers (The “Give and Take”) 121 . I hate not to attempt to add some additional areas to the agreement. the Town Council’s representative left the mayor’s representative with no room to maneuver.
You will have to remove the rock barrier. Having an iron-clad demand probably won’t give you enough room to reach an agreement. As was sometimes the case in these parts. the brook was the property line separating her property from a neighboring farm. She discovered that a rock barrier. Obviously. Madeline. the brook and rock barrier are on my property. The brook 122 50 Practical Negotiation Tactics . or we will be at an impasse. Joe. She traced the brook back along its course to see why and where it had changed its path. Neighbor: Well. and began to renovate it as a home and a pottery shop. which an upstream neighbor had built. You are more likely to be successful if you identify a range of options that fall within your comfort zone than if you have a fixed bottom line with little wiggle room. She went to discuss this problem with the upstream neighbor and had every intention of demanding that the barrier be removed immediately. Madeline built a gazebo about 500 yards from the brook. This range for maneuvering is not the same thing as the list of items you make at the outset—it’s the last space separating you and your opponent. Your rock barrier has sent the brook onto my property and it is too close to my gazebo. Example 1 Madeline bought an old farmhouse outside of a small town. Madeline: Hi. after the gazebo had been there for about five months. when one of you might say. The property came with three acres of forest alongside a meandering brook. you should always enter the talks with a good idea of what you are willing to agree to. The reason I built it was so that I could protect my patio. One day. I have a problem. had redirected the brook further into her property. she noticed that the brook came within 100 yards of it. in a small clearing.Tactic 30: Always Leave Room for Dessert Negotiating is the art of give-and-take. “I have to have this.” Avoid making that “necessary concession” too narrow: It should be large enough for both of you to step into comfortably. It calls for compromise.
which enabled her to achieve her goals. at least I’ve maintained my property line. Madeline: Yes. My neighbor on the adjacent farm wants to sell part of his property for a housing development. Neighbor: I can do both of these things. I understand that. I won’t remove the rock barrier. if the brook is redirected. Making Counteroffers (The “Give and Take”) 123 . Madeline: Well. It might not be necessary to make such a dramatic change. I can’t have the brook in my house. and allowed me to have a survey done so that my deed can be corrected to describe the “existing brook” boundary line by other landmarks. What if you removed the barrier for a short time. what I need is to protect my property line and my gazebo. but only if I have a clear understanding with you that the barrier will be rebuilt to protect my house. When she found out that this was not going to solve her neighbor’s problem. Conclusion Madeline’s objective when she met with her neighbor was simple: Have the rock barrier removed. I couldn’t have that. you have not only threatened my gazebo. but I don’t know what I can do about it. but you’ve changed the boundary line of my property.extended right up to my back door when the rain was heavy. Madeline was able to protect her gazebo. Then. Also. Neighbor: I’m sorry. Madeline: But by diverting the brook. and allow the neighbor to protect his home. By expanding the range of options available to resolve the dispute. I ask that you allow an expert to suggest the best way to provide for the diversion of the brook to protect your house and my patio. She left room for a compromise. I’ve lost 400 yards of property on my three acres. This will put these houses right next to me. and return everything as it was. she widened her range of options. restore her property line.
000. This would be a better benefit in the long run. 124 50 Practical Negotiation Tactics . The company wants to trade paying for dependent coverage for better pension benefits. Everyone was afraid that the dispute would cause an impasse and a possible strike. But only a few of our people are close to retirement age. With long-term planning and investments. The pilots want dependent coverage paid for by the company.000. and the premiums for health care just keep going up.000.000. Pilots: Look. However. Company: This could not come at a worst time for us. the airline paid a total of $200. the discussions of the employee benefits package bogged down on the issue of health insurance costs and pension benefits. The projections for the next five years were that these costs would increase to about $1. and we know that with this new contract term of five years. then the pension benefits overall will increase by $10.000 to cover the premiums for dependent coverage. you are taking a risk on the costs increasing. and are willing to keep pension benefits the same. The airline industry is in a slump. Over the next five years. As best as we can tell.000.Example 2 The contract negotiations between the pilots and the airline had been going pretty well.000. that would be the minimum increase.000. we know that health insurance premiums might skyrocket. what they really need is for you to cover the costs of dependent coverage. the company can make your pensions much better.000 a year over the next five years? Company: Yes.000 (which we reasonably should have expected to pay in premiums) in the pension account now.000 figure. And we cannot afford that $1. as it has always been. Over the last five years. If we invest the $200. with all wage and operations issues resolved fairly early. This is just a cash-flow problem that your members have to understand. dependent coverage could cost us $1. Pilots: So you are projecting that the increase in dependent coverage premiums will average $200.
Company: Then it’s okay with us.000 available. Pilots: Since the concern is about agreeing to a 5-year commitment without knowing the increases we might have in health insurance costs. that would be worth it. Company: If the company spends the $200.Pilots: But you do have the $200.000 to either pay one year of the premiums. Making Counteroffers (The “Give and Take”) 125 . or invest in the pension plan? Company: Yes.000 the first year on the premiums. however. Conclusion The company was committed to limiting its exposure to $200. Are you willing to risk not having an opportunity to increase pension benefits? Pilots: Yes.000? Once the cap is met. so the decision to be flexible was a good one. If we can get two or even three years out of the $200. by agreeing to let the company cap its exposure for dependent health coverage. the company will not be expected to give us this benefit. can we agree to a year-to-year agreement on dependent coverage. The health insurance market stabilized.000. and the pilots knew what to ask for when the contract expired. It initially believed that the only option was to put that money into pension benefits. if they were that high. The dependent coverage is more important to us now than the pension benefits. we are. The $200. with a cap of $200. then those funds will not be available to invest in the pension plan. The pilots expanded the range of options.000 actually carried them through four years.
Phrases such as “for only pennies a day. I just can’t imagine the monthly payment on a $45. be sure to add up the total cost. if I can give you this car with a $300 monthly payment.000 for a Volvo? I bought the one I’m driving for $19.000 car.” “affordable weekly payments.… (20 minutes later) Saleswoman: So. Saleswoman: With your 740 in trade. Buyer: Way too much! Saleswoman: Well. If you are on the receiving end of such a tactic. I love this car. $45.500! Saleswoman: Yes.” Salesmen use this standard tactic with “big ticket” items: They present the total cost in small enough pieces to sound reasonable to the other party. do you want to look at something else? Buyer: No. it’s a deal? 126 50 Practical Negotiation Tactics . what monthly payment did you have in mind? Buyer: More like $300 per month. but that was several years ago. I guess it would be around $600 per month. but the Consumer Price Index has not gone up 150%—nor has my paycheck! Saleswoman: So. Saleswoman: I’ll be right back. Example 1 Car buyer: What.” and “low monthly rates” are examples of the salami tactic. and compare it to your strategic objective.Tactic 31: Cut Salami Slices One way to overcome anticipated or exhibited resistance to a proposed cost is to cut it into smaller units or “slices of salami. I recall the day you drove it out of here. Buyer: Yes.
can’t you? Buyer: Yes. You can do that. Let’s see. and added the trade-in. Example 2 Cable representative: Owner: Cable representative: Owner: Cable representative: Owner: Cable representative: Owner: Cable representative: Owner: Yes. with your car and $6. but what else must I buy? Only the basic service for $8.000 down. it will be a five-year lease. and payout slices to reach the total price she wanted. do you want Disney? Yes. Great! So. Once the buyer volunteered that $300 was an affordable “slice.00 per month. Making Counteroffers (The “Give and Take”) 127 . you can get the Disney channel for only $5. (looks at the numbers) That looks good.” She decided to cut the $45. Saleswoman: Simple. do you want HBO? How much? $5.00 per month. Sure. I can afford $6.” she had him—she worked around the $300 slices. Instead of a three-year lease. as promised. down payment. but let me see the numbers. But my neighbor pays $39.Buyer: I don’t see how you can do that.00 per month for your service. I can’t discuss another client’s account.99 per month.000 price into “slices” the buyer thought reasonable.000 down and $300 a month! Conclusion The saleswoman knew the buyer was suffering from “sticker shock. I can’t afford that much.
we had that before.99 per month. 128 50 Practical Negotiation Tactics . That’s $5. But that’s all! Then we’ll hook you up on Monday. That’s another $5. Conclusion The owner thought his neighbor’s service at $39.Cable representative: Owner: Cable representative: Owner: Cable representative: Owner: Cable representative: Owner: Cable representative: Owner: Cable representative: Owner: The Sports Combo–ESPN 1. I really want the sports channels. they asked about the Cartoon Network. and my wife wants the old movies. and probably felt much better about the total negotiated package because it was presented in modest individual slices. Yeah.00. 3. and SI 1.00 per month was far too much.00 a month.00 per month. instead of one total amount. but he agreed to six “salami slices” for a total of $38. Thanks. Great. Okay. 2. What about the music package? Yes. Disney is for the kids! The sports channels are for me. The total is $38. 2? How much? $8. Any other kids’ channels? Yes.00! Why? Because he judged the per-slice price to be reasonable.
In some cases. Applying Pressure 129 . A negotiator who contemplates using pressure tactics must first realize that he/she has increased the probability that negotiations will end without an agreement because the other side objects to the excessive pressure and simply walks away. Humor might not look like pressure.Stage 5: Applying Pressure P ressure tactics are generally used in situations where one side firmly believes that it holds the upper hand or simply convinces the other side that it does. which can be successful if the opposing team has two or more members who hold different views of an issue. “I can only guarantee this price until 6:00 p. but it can be used effectively when one party clearly has an edge.m. but others will walk out the door. an unexpected element of humor can break the tension and encourage a person to calmly get back to the issues. Tactic #33 (The Bluff) is a classic pressure tactic. For example. pressure tactics should probably be avoided. and the use of humor. angry negotiations. so are you ready to make a deal? This might convince a few buyers. It should be used with caution: It can end negotiations immediately. it is effective. today. turned off by the tactic. Tactic #36 (The Element of Surprise) can catch an opponent off-guard and cause stalled negotiations to move forward. Other less-obvious pressure tactics include Tactic #37 (Divide and Conquer). the traditional car salesperson might tell the buyer. and it can destroy your credibility. Some less-obvious and more easily accepted pressure tactics are to use visuals to control the negotiation talks by focusing discussion on subjects that favor your side (Tactic # 34). however. Tactic #35 (Applying Excessive Pressure) is a similar tactic that should also be used with caution. When both sides believe that each has equally strong positions. but in tense.
and we’ll be moving south in the next month or so. Chloe and I would like to take the sailboat with us. We’d hate to give it up. but it is not a good idea to exaggerate what you are offering or what you are giving up. he and Chloe wanted to buy out Don’s and Abby’s interest. It 130 50 Practical Negotiation Tactics . and we need to talk to you about how we can buy you guys out. but Don. together and separately. Abby really loves that boat. Don: Absolutely. Don: Wow. Although I do think there ought to be some consideration for the two years you had use of the boat. When Lacey found out that his employer was transferring him to another city farther down the coast.Tactic 32: Don’t Exaggerate It’s always acceptable in negotiations to put your best case forward and present your position vigorously. Lacey and Chloe didn’t know that Don and Abby were. I don’t know. getting a divorce and each moving away (and would have no more use for the sailboat). Lacey: Don. I can’t tell you how many times Abby has said how happy she is that we have the sailboat. big news! I’ve been promoted. in fact. And we don’t want to be unfair. Lacey: I know. In the last couple of years. I think Chloe and I would be willing to pay more than just the money you guys put into it. Lacey. Such exaggerations are easily revealed or uncovered. Don and Abby now use it less and less. and they will weaken your credibility. I don’t see how we could buy a boat or even a half-interest in a boat for what we put in on this one. The two couples used the sailboat a lot the first couple of years. boat prices have really gone up. Your opponent will consider you untrustworthy and might even be insulted by your attitude. Example 1 Don and Abby went in on the purchase of a sailboat with their friends Lacey and Chloe.
It’s about time now for some major investment. Applying Pressure 131 . big news!! Don got his promotion. which you would have to share if you want to retain half-ownership. Abby: Well.) Lacey: Don. Don: Lacey. I have big news too. and we’re moving farther south. Let me talk to her. If Don had not exaggerated the importance of the boat and dealt with Lacey honestly. and neither of us put much in for upkeep. (Around the same time. the boat has depreciated. Abby told Chloe about the divorce and about how she never wants to see the boat again. (After Lacey and Chloe had a chance to talk. Lacey: Cut it out. I thought you understood how important this boat is to Abby. Don and I are getting a divorce. I was afraid something was going on when you all-butstopped joining us on the boat. I’m sorry. he likely would have found himself in a stronger negotiating position. Abby is having this conversation with Chloe) Chloe: Abby. We’ll be leaving here for the Midwest. I’ll be glad never to see it again. Don. I’m surprised by your attitude. Abby: That boat. but separately. Conclusion Don got a lot less than he could have from Lacey because he found out that Don exaggerated the importance of giving up the boat. After all. I think it would be fair to pay you and Abby half of what you originally put into the boat for your 50% share. and I’ll get back to you.is just about the most important thing we own. It just reminds me of how happy Don and I used to be. Lacey and Don’s negotiations changed considerably. I’ve been thinking. Chloe: Oh. though it’s not so happy.
And as you know. and that the economy is strong. I read in the papers every day that the market is still strong. we will need to make drastic cuts in our operating costs just to survive. the situation in the stock market is not good. Company president: Well. Here’s how these negotiations went: Company president: Well. I’ll have to show them 132 50 Practical Negotiation Tactics . our production line changes at least three times a year. I’m afraid that with this current information. but this has been such a crazy situation. The current stock price is the lowest it has ever been. Telling me there’ll be no wage increase and asking for wage concessions now is a little premature. I can’t see how today’s numbers really impact the long-term profitability of this company. they will make their decision based on a review of the stock price that day. in fact. I’ll be going back to them as soon as next week. Union negotiator: The stock price might be down right now. in this global market. When I go to the bank for the Letter of Credit to keep our cash flow uniform while we switch from one type of production line to the other. I’m telling you the stock price is having a huge impact on us already. the company president decided to use the stock price as a negotiating tool during the current union contract talks. I’ll be looking to you to make some major wage concessions on this upcoming contract. And while these fluctuations have little to do with the health of the company itself.Example 2 Aimes Manufacturing had experienced major ups and downs in the price of its stock for the last two years. I think you’ll have to agree with me that wage increases in this next contract will not be available.
Union negotiator: Well. We think this company is very healthy and can withstand the temporary downturn. and I’ll have our people look at it. Give me your proposal for wage concessions.that we’ve cut expenses to counter the losses in the stock market. and the union ended up with a substantial increase in their contract. he lost the trust of the union. When negotiations resumed. They told union officials that it would be very rare for a bank to make its decision solely on stock price. (In the interim. the company’s position was weakened even more. Let’s get back together next week. If you put it that way. they would do a thorough analysis and look at the health of the company over the long haul. no concessions! In fact. Company president: What? I thought you understood that it is essential that we get concessions on this if we want to stay afloat. Company president: All right. this week’s price would have little or no effect on your ability to get a Letter of Credit from the bank. let’s talk about it. here’s what happened. So. Union negotiator: I know that’s what you told me. Applying Pressure 133 . The union became hardened in its position that the employees needed wage increases in the new contract. we’d like to reopen talks on next year’s pay increase. When the market took a swing up during the negotiations. the union checked into the Letter of Credit transaction with some experts in banking. but your proposal to cut wages is just not going to fly.) Union negotiator: I’m sorry. but I checked it out and it’s not totally true. okay. If the stock goes up next week. Conclusion Because the company’s president over-emphasized the impact of the market on the company.
Tactic 33: Bluff! Bluff with caution. Here’s how the discussion went: Christy: Tom. and she didn’t think Tom had. yeah. 134 50 Practical Negotiation Tactics . but Christy thought the relationship was heading in that direction. but I really am. but you always run the risk of having the opposing party call your bluff and end the negotiations without reaching agreement. Sara said she saw you at the movies with Charlene yesterday. I knew you had a class. This can come back to haunt you. Charlene. You’re not upset about that. are you? Christy: I don’t want to be. I really hate it that you chose to see the movie with Charlene. Tom: Oh. Example 1 Christy and Tom had been dating for about a year. so their “free” time was very limited. you will have lost credibility with your opponent. We don’t have that much free time together. Poker players know all-too-well-that bluffing can be very costly. Christy was surprised and hurt when a friend of hers mentioned that she had seen Tom at the movies with his former girlfriend. it might backfire. If you subsequently agree to begin talks again. I called Charlene and she was available. and I really wanted to see the new Lenny Bruce movie. they are bluffing. The couple had not discussed marriage. If one party threatens to walk out of the negotiations if a demand isn’t agreed to. Christy realized that asking for a commitment from Tom at this stage would be a very serious discussion. She knew that if she made such a demand and threatened to leave him unless he made a commitment. Both of them were still in graduate school and worked full-time. Christy thought that their relationship was exclusive: She hadn’t gone out with anyone else. There is a chance that the tactic will work and that both sides will agree to the proposal on the table. and they really have no intentions of doing so. either. I guess I’m just surprised.
so he didn’t call her bluff.Tom: She’s a friend who happens to be a girl. If Tom had “called” Christy’s bluff. It really wasn’t a “date”—we just saw the same movie together. I’m not “dating” anyone else. I’m willing to risk losing you. Tom: Okay. and at first he thought she might bluffing. I just thought of her because I knew you weren’t available. she paid her own way. Tom: You’re serious? It’s that important to you? Christy: Yes. It is. Christy: I just can’t see it that way. She convinced Tom that her feelings were strong. It’s made me realize that I want us to have an exclusive relationship. Applying Pressure 135 . I won’t go out with any woman friend. Conclusion Tom didn’t want to lose Christy. Actually. but very little progress had been made. if you can’t make that kind of commitment. Christy would have had to decide whether or not she was indeed bluffing or if she would really end their relationship. If that’s not possible. The union negotiators. I need to have your commitment that you won’t do that. He believed she was sincere. Christy: What I’m saying is that I can’t accept that you are going out with a “friend” who is a woman—not at this stage of our relationship. Since he wasn’t sure about that. Tom: I have friends of long standing who are women. I certainly don’t want to lose you. he had to make a commitment or risk losing her. then I’m afraid I want us to stop seeing each other. Going to a movie with one of them to me is the same as going to the movies with one of my male buddies. Example 2 Nexon and its union had been negotiating a new contract for the past couple of weeks.
and try and reach agreement on the cost-of-living increase you’re proposing? Union: No. Nexon: We’ve got lots of issues to discuss. but working without benefits is simply not acceptable. Nexon negotiators did not believe that the workers would actually strike this early in the negotiations. (The union negotiating team left the bargaining session and called for an emergency meeting with all union members. but the company cannot offer the same benefits to the parttime workers as it offers to the full-time workers.believing that Nexon would not risk a strike. it will cost too much. We need an answer today. The union members ended up voting not to strike at this time. Many of our union members who are working part-time hope to work full-time. we’re really prepared to go the distance on this benefits issue. Second. And I don’t believe you’re going to go call for a strike over this. This is something we just have to have. Union: You’re wrong. Why don’t we put this one aside for now. decided to threaten to walk out of the negotiations and have the membership vote on a strike unless Nexon made some concessions at the next meeting. This is a critical issue to us. First. Union: You don’t seem to understand. then all of our other demands will change.) 136 50 Practical Negotiation Tactics . Another bargaining session was scheduled. we want the part-time workers to apply for and fill fulltime positions as they become available. Nexon: I’m just not prepared to give you one. much less today. or else we’ll be asking the membership to strike. We need some agreement on this today. We’re not going to reach agreement on this at all. Nexon: I’m sorry. If we’re not able to reach agreement on this. Here is what happened at the next negotiations session: Nexon: I’m sorry.
Union: Okay, we’ve decided to put aside the part-time benefits issue for now. We’d like to discuss the cost-of-living request today. We’re looking for a 5% increase for all employees—full-time and part-time. Nexon: I’m afraid that a 5% increase is out of the question. Inflation has been very low this year, and we’ve certainly not increased our prices by 5%. We’re only in a position to offer a 2% increase, and we believe your membership will accept that. Union: 2%?? Are you crazy? Our people will never accept that!! They’d sooner strike!! Nexon: Fine. Ask for another strike vote and get back to me. Union: Wait, wait. Let’s be reasonable.
Negotiators for the company knew the threat of a strike was only a bluff, because the union did not have member backing. When they tried to bluff the first time and failed to convince the members to strike, their ability to successfully bluff again was lost. They had a very difficult time in the subsequent negotiations, because Nexon was able to call their bluff numerous times.
Tactic 34: Control the Forum with Visuals
Some tried-and-true strategies used for meetings and presentations can also be effective during negotiations—particularly those that help you get your points across to the other party. Even the best negotiators have trouble keeping a discussion focused, which is why they make good use of visual aids. In many situations, including negotiation sessions, a person or team is trying to communicate ideas and persuade others to accept their position. Maintaining control of a lengthy discussion and keeping everyone focused on one’s presentation is often difficult, but it is critical to successful communication and persuasion. This control of the “forum” or general discussion, if attempted solely by dialogue or handouts, can be difficult for the best negotiators. Thus, a tactic that will help keep the discussion focused on one’s arguments and presentation can be extremely helpful. An easel and flipchart, a chalkboard, or a PowerPoint presentation can be very effective in controlling a forum. By only showing one part of a presentation at a time, you can focus everybody’s attention on one page of a flipchart or one slide (or even just one line of text). People won’t be able to flip through pages or discuss other parts of a handout (this often occurs when the entire proposal is given out at the start of a session), and the presenter won’t lose the audience’s attention. It is also more difficult for people to go back to earlier parts of the presentation, because the text no longer appears on the screen or flipchart. A negotiator who presents new proposals or information with well-developed visuals can more easily control the forum or focus of the group discussion.
Dinnertime at the Gronefeld house was usually loud and chaotic. The parents and six children had dinner together most evenings, but it was understandably hectic; multiple conversations were going on at the same time. One night, Aime (age fourteen) tried to present an argument about allowances and the division of chores among the children. Constant interruptions from other children and a general inability of all eight people to follow one dialogue simply caused her to give up her
50 Practical Negotiation Tactics
idea. The next night, however, Aime came prepared with a piece of construction paper and a gavel she had removed from a plaque in her father’s office. On the construction paper were three columns: Person; Chores; Allowance. The written specifics were covered up with pieces of construction paper. After everyone took their seats at the dinner table, she banged the table with the gavel until all were silent. “I have a proposal for a new division of chores and new allowances,” she began. “Please let me explain this one person at a time, so we can agree on that person’s chores and allowance, and then move on to the next person.” Aime now had everyone’s full attention, because they were curious about what was covered up on the chart. Aime had sucessfully focused everyones attention on her chart. The parents, impressed by her work and specific proposals, agreed to her suggestions with only one change. Person Chores Allowance
Aime realized that she would never achieve her goal unless she could command everyone’s attention and focus the dinner-table talk on her concerns. She was able to control the dinner forum with a gavel and a chart. The key to her success was that she unveiled only one line at a time, thus focusing the discussion and reaching agreement on each child. This stopped the confusion.
A committee of three members of a governing board of twelve people is responsible for developing and presenting the annual budget recommendation for
the organization. A majority of the board members must vote for the proposed budget for it to become effective. Past committee meetings dealing with the proposed budget have been chaotic, long, and usually heated. The typical format for the meeting is for the chair to hand out a copy of the entire proposed budget at the start of the meeting, quickly provide an overview, field questions, and then try to negotiate for the seven needed votes for passage. Steve, one of the budget committee members, has decided to try a new approach: focusing discussion on one budget at a time to prevent people from discussing several items at once. Steve: Ladies and gentlemen, to help us review this budget proposal in an organized fashion, I have outlined it on the pages of this flipchart. Each section of the budget appears on a single page. I’ll go through it one page at a time. Please ask questions only on that section or page. This will keep all of us discussing the same budget issue. Agreed? Board chair: Does everyone agree to this proposed budget-review process? All in favor say agree, opposed no. Seeing no opposition, it passes. Steve: Let’s begin with the capital budget for the Fifth Ward … Allan: Steve, I have a question about this year’s budget for health insurance … Steve: That’s Section 7 on page 7 of the flipchart. Allan, please hold your question until we get there. We will review and discuss all of these items one at a time, in the order they appear on the chart.
Although several sections of the budget proposal sparked spirited debate, Steve was able to control the discussion and focus the meeting on one issue at a time by effectively using a visual aid. The meeting was much shorter, more productive, and less acrimonious than in prior years.
50 Practical Negotiation Tactics
its union has the advantage in the weeks just before Christmas. his air-conditioning unit went out. Many companies sell “tune ups” and routine seasonal checks to keep their people busy all year. such as the advantage of time. He was at the mercy of the company that could install an appropriate unit the fastest. It is sometimes referred to as “pressure bargaining. he was able to successfully bargain for other services. Since the heating and air conditioning company held no leverage over him. The same kind of thing happened a couple of years before that: In the middle of August.Tactic 35: Apply Pressure (when you have the leverage) Analyzing a situation and applying pressure in order to achieve your goals when you have leverage over the other party is a commonly used tactic in negotiations. not blessed with many household repair skills. They are more flexible on price and service when they know the consumer is not under any pressure to buy the service being offered. Try bargaining with a plumber! This homeowner. because this is the busiest time for that industry.” Example 1 We have all been at the mercy of someone who uses pressure bargaining. while the other is not—that is. once had to call a plumber in for emergency repairs. and was forced to pay whatever they demanded. Example 2 Let’s face it: Sometimes one party holds all the cards. the guy was in no position to dicker over the price of the repair. Since his toilet had overflowed and water was continuing to run all over the floor. On the other hand. when one side has “leverage” over the other. for example. Unions can strike at any time to achieve their goals if they have some leverage. If the employer is a shipping and express mail company. It’s easy to prediet the outcome in collective bargaining talks if one side is clearly in a very favorable position. there were times when there was no pressure and no emergency. The owners of professional sports Applying Pressure 141 .
Other employers find themselves in situations that actually reverse the leverage (when. then you are in a position where you can set reasonable demands on wages. for example. Conclusion “Pressure bargaining” is a way to achieve objectives that are greater than what is deserved or desired by the other side. Employers who refuse to give in on issues of high importance to employees and exert pressure on unions to accept their terms. When one side places undue pressure on the other side. but before you choose such a tactic. will what goes around come around? 142 50 Practical Negotiation Tactics . if the unemployment rate is high and jobs are few. but they are less willing to negotiate several months ahead. The employees had no power to resist the demands of the employer. there are likely to be long-term repercussions. When the employer proposed adding duties to the job classifications. he didn’t have to be flexible because the employees believed that they had no alternatives. the employer has the advantage: a supply of jobs. consider whether or not the two parties will likely meet again in the future to negotiate.) The leverage of supply is also very powerful: If a jeweler has an exclusive contract to sell a ring everyone wants.teams are generally more vulnerable to pressure from the players’ union several days before the season begins. benefits. low employee motivation. A note of caution: Circumstances in one round of negotiations might give one side an advantage. If you have a special skill that an employer needs and few others have that skill. What goes around comes around. On the other hand. despite strong resistance. If so. either individually or through collective bargaining. This gives it the upper hand in negotiating with employees. can suffer repercussions in the form of sabotage. and other undesired outcomes. (Team owners are notoriously unpredictable. it is the union’s turn to hold firm on its demand). etc. Many labor contracts were agreed to when unemployment and inflation were high and employees felt pressured to accept the demands of the employer. however. she has leverage and can more likely hold firm on her price. unemployment is low and jobs are plentiful.
Mom said so. Andrea: Okay. but use this tactic judiciously. Example 1 A father and his two daughters were on their way to visit the grandparents. Andrea had taken them off the doll. (Their dad pulls to the side of the road and turns to face them in the back seat. The doll can be shared. you have it when we drive home. They stopped for lunch at a fast-food restaurant and shared a children’s meal that came with a small doll. I can’t drive if you keep this up. and Susie. Susie: The doll belongs to both of us. Why? A sudden surprise can disrupt the dynamics of a negotiation. Just share the doll. Andrea: The doll is mine. Andrea. and I can’t stand it. because you will probably only get to use it once. the argument is over the doll’s shoes. and here’s how the “negotiations” went: Dad: You two stop fighting. you have it this part of the trip.) Dad: Stop it right now. Consider making a suggestion or a proposal that completely surprises your opponent. This time. Tell Susie to let me have it. the fighting starts up again. Their dad tried to reason with them. Almost from the beginning of the three-hour drive.) Applying Pressure 143 . We’ve got a long ride ahead of us. (In a few minutes. and Susie hid them under the seat. Just because you saw it first doesn’t make it yours. About an hour into the drive.Tactic 36: Surprise! Never underestimate the power of surprise—particularly when things have bogged down and both sides are simply repeating their positions without making any headway. the little girls began to fight over the doll. Susie: Okay. I took it out of the box. the girls had been fussy. You’re driving me nuts.
at great expense to the auditor’s office and the school board. Susie: Daddy didn’t say anything about the shoes. but nothing else up to that point was working. I want the shoes. The local newspaper was prepared to urge the auditor to end the litigation. The tactic was so successful. She can have them later. Finally. The litigation itself had been going on for more than three years.) Dad: Now there’s no more fighting over the doll. The defendants contended that the auditor’s actions were politically motivated. He initiated the litigation against the local school board members and several banks that invested the money for the board. they didn’t say another word. charging that they breached their duty in their handling these funds. so it was worth the risk. The auditor asked to meet with the editor to explain his position. he slowed down. to no avail. Dolly doesn’t need shoes on in the car. that they never fought over a toy in the back seat of the car again!! Example 2 The editor of a local newspaper was planning on writing an editorial critical of a locally elected auditor who had filed a very nasty lawsuit.Andrea: Give me the shoes back. Daddy said I got the doll on the way to Grandma’s house. 144 50 Practical Negotiation Tactics . and that they had invested and spent the tax dollars wisely. in fact. Both Andrea and Susie were so shocked by their dad’s action. (They continued to argue and whine and pinch each other. He grabbed it and threw it out the window. Dolly has to have her shoes. The auditor’s job was to make sure that tax dollars collected for the local education system were appropriately handled. and I hope I can convince you of that. and reached back for the doll. Dad tried correcting them a few more times. Here’s how the meeting went: Auditor: I appreciate a chance to talk to you about this litigation. I think I have acted properly. Conclusion Dad’s use of a “surprise” tactic was extreme.
Your reporters will probably want to follow up on it. I really think the community would be better off. as a matter of fact. Editor: Well. My frustration is that they have refused to provide our office with sufficient information to back up their contention that what they are doing is best for the schools. I think I have something here that will convince you otherwise. Conclusion The editor wrote an editorial urging a resolution for the good of the community. We believe the other defendants will soon follow suit. The school board members make a very good argument that their practices regarding how the funds were expended are not just adequate. one of the banks settled with my office. and a significant amount of money will go toward the tax fund. Editor: Well. They’ve been making that same argument from the beginning. They are very persuasive that this is just a political battle. From what I can see. and it is costing your office money and good will. Applying Pressure 145 . Obviously. this case needs to be dropped. the bank would not have done that had we not proven our case. That’s really the reason this has gone on so long. but actually superior to some other entities you supervise. This morning. The auditor successfully used the element of surprise in announcing the settlement and thus changed the direction of the editorial. Auditor: I appreciate their arguments. but I have to warn you that from what I’ve seen and heard so far. I guess we’re finished here. perhaps you should just cut your losses—and just drop the suit. Thank you for coming in. but recommended that the parties reach a settlement. Auditor: Well. there’s just nothing to back up your allegations. rather than drop the case. Here are the papers. Editor: (surprised) Really? They settled? This is public information? Auditor: Yes.Editor: I’m certainly willing to listen.
I know we’ll all enjoy it. Tina and their son Kevin are against the idea. Kevin: So am I. Mike knows he needs to get either his wife or his son on his side. If the other side involves more than one person. I’d 146 50 Practical Negotiation Tactics . Mike: I know. Kevin is against it because he is turning 16 years-old soon. and a car is more important to him than a pool table. Kevin: I don’t really care about a pool table. I want to talk about a car! Mike: It’s really not one or the other. Tina: I’m really against this pool table idea. Tina: What do you mean? Mike: When Kevin and his friends get their licenses.Tactic 37: Divide and Conquer Certain negotiations lend themselves to a divide-and-conquer tactic. I can remember spending hours playing with my friends and family when I was growing up. you might be able to dilute their power by identifying their different interests and addressing them separately. If the negotiating team sitting across the table from you seems to be divided on a subject or one of the team members seems to be more sympathetic to your arguments. try to focus on that subject or address that member directly to get them to be more amenable to your proposal. although getting your license and getting a pool table are connected. night after night. but I think it will get a lot of use. Dad. Tina is against it because she doesn’t think it will be used that much and it will take up a majority of the floor space in the family room. especially Kevin. they’ll be mobile! The last thing I want is for them to be out cruising around. Example 1 Tina’s husband Mike wants to buy a pool table for their family room.
I thought we were making real progress. Wylma: Tom. What happened? Applying Pressure 147 . don’t you think you guys would use it? Kevin: I guess so. A pool table could attract them here. She noticed that Jim (another member of the union’s negotiating team. Example 2 Negotiations on a new union contract seemed to be going quite smoothly. has just presented the company’s initial wage offer. A number of contract changes have already been worked out and Wylma. But I’m not going to hang out here all the time. then maybe it’s not such a bad idea. and Kevin and his friends use it often. who was studying the company’s financial records for the team) became uncomfortable when he heard Tom’s demand. Instead of both opposing the idea. And I really do need a car! Tina: Do you really think the guys would use it? I would rather have them here than out getting into trouble. the chief negotiator for the company. Mike: I really do. the head of the union negotiating team. Here’s how the negotiations went. some. she joined his side of the debate. They bought the pool table. only Kevin did. Once Mike convinced Tina of the idea’s merits. Tina: Well. Tom.like them to hang out here more. received it without comment. Wylma was surprised the next day when Tom started the meeting off with an out-and-out rejection of the wage offer and made a demand for a wage increase of four times the company’s offer. Conclusion Mike found an argument that divided Tina and Kevin. Kevin. I’m surprised.
When the negotiations began again. But Tom. you certainly are aware of our financial situation. these are our actual accounting figures. as Jim can point out to you. Conclusion Wylma’s appeal to Jim’s knowledge of the actual financial situation of the company worked to divide the union’s negotiating team.Tom: Wylma: Nothing happened. Jim? Jim: Yes. I think you need to rethink your demand. 148 50 Practical Negotiation Tactics . This is just what we think is fair. you’ve seen our sales projections and production costs. Wylma: Tom. Wylma: Jim. Let’s start again tomorrow morning. Your demand is totally unreasonable. forcing them to reconsider their demand. Tom: We don’t think so. Tom had reduced his wage demand significantly.) Wylma: Now Tom. but he added some workplace changes that Wylma was comfortable negotiating. you’ve heard our demand. Right. (When they resumed. Wylma distributed copies of financial data that showed the company’s current condition. these are accurate. Wylma: Let’s take a break. Do you think this is reasonable? Jim: (looking uncomfortable) Well.
it was easy to agree on just giving presents to the children. I know that you all think I’m silly about wanting to exchange Christmas presents among the adults. but it should never be at anybody’s personal expense. Applying Pressure 149 . You are almost 40 years old. Cory: Madison. married. Sometimes the argument got heated. get over it. We can’t afford to buy each other things we really need. Ever since Mom and Dad died. the oldest and youngest Jones children. Tempers flare and people say things they shouldn’t out of anger or frustration. Example 1 The four Jones kids grew up. When are you going to grow up? Madison: (very emotional) I can’t believe you can say that to me! Christmas should mean something! Cory: It’s just silly for adults to exchange presents.Tactic 38: Break the Tension Tension is inevitable in most negotiations. some of the siblings decided they liked giving presents to one another. so what’s the point? I don’t need another tie! Madison: It’s not the gift. especially between Madison and Cory. so you can find a way to quickly neutralize it. and it makes me very sad. Madison: Okay. I want to say something. When all of their children were small. but it is really important to me. and had children. Humor often works to break the tension of the room. Stay alert and watch for clues that a negotiation is about to get out of hand. It was a tradition in the Jones family to spend Thanksgiving dinner arguing about how the family wanted to celebrate Christmas. but the thought that matters. I don’t feel Christmas in the way I used to. but as the children grew up and had families of their own. so pressure grew to draw names and exchange gifts. That will just make a bad situation worse.
You can say that, but everyone is disappointed when they receive a cheap gift, even if they won’t admit it! Madison: Why are you being so stubborn? You’re just ruining everything! Cory: (also emotional) Look, if you have to receive presents in order to feel that it’s Christmas, we can all just give you presents! Madison: (without hesitation) Okay! I can live with that!! (Everyone laughs.)
Madison’s quip diffused the emotions of the parties. Cory, while very angry, was surprised by Madison’s answer, and was able to laugh. With that, other family members joined in the discussion and they agreed that those who wanted to participate in the gift exchange would. Those who didn’t, wouldn’t.
Jay believed that the new home-theater system he bought was a lemon, but he had very little success in getting the salesman to take responsibility. The salesman agreed to have every complaint looked at by a service technician, but the technician always gave the system a clean bill of health, which infuriated Jay. Jay finally asked for a meeting with the store’s owner, fully intending to leave the meeting with a full refund. Jay: Mr. Owner, I’m very serious when I say that I will not keep this system. It is a lemon, and you know it. Either the sound or the DVD or the picture is always off. Owner: Now Jay, there are some problems with the system, but nothing we can’t fix. Let me turn it over to my best technician, and he’ll be right over to fix it. Jay: We’ve been down that road already. The system has been on the blink 20 out of the last 30 days.
50 Practical Negotiation Tactics
Owner: You’ve had a loaner TV/VCR while yours was being worked on. We’ll be happy to loan you one again whenever you need it. Jay: (becoming annoyed) That’s not the point. I bought a new home theater system and I want to use it! I’m very frustrated by your attitude. Temporary fixes aren’t good enough. Owner: Well, we are attempting to fix the system. You’re the only person who’s had this kind of trouble with one of our new ones. Maybe you’re just having “buyer’s remorse” and really don’t want the system anymore! Jay: (very irate) I can’t believe you said that! This system is a lemon, and you’re trying to blame me! What a crock! What kind of business are you running here? You’re a bunch of crooks. Owner: (now also irate) Just hold on there! I run a respectable business, and I resent your attitude. We’ve bent over backwards to check out each of your complaints, none of which were found to be major defects—just things that needed adjustments. Jay: (very angry) That’s not true. The surround-sound speakers never work at the same time. You don’t call that a major defect? Owner: (realizing he needed to break the tension) Well, my 30-year old Sony TV only has one 3” speaker, but I still watch it. Jay: (pausing and calming down) Yes, my first TV was a Sony. Owner: Look, I’m sorry we’re at this point. Let me take this to my top technician and your salesman, and we’ll fix it. Give me one day. Jay: Okay, but just one day!
The owner used a joke to interrupt the angry negotiations that were going nowhere. He exchanged Jay’s surround-sound system for another new model. The system Jay rejected was sold as a “used” one and never came back in for repairs. Jay’s new system worked fine, and he ended up becoming a repeat customer.
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Stage 6: Making Progress
aking and reviewing proposals and counter proposals will not always close the gap between the two parties’ positions and gain a settlement. Progress might be made, however, by invoking a certain tactic at a critical time, particularly Tactic #39 (Compromise). Often believed to be the key to successful negotiations, compromise is not giving in; instead, it is the ability of a negotiator to prepare a settlement that represents some concessions on the part of each side, but that will also help gain a proposal that is acceptable to both parties. Other key tactics that can move the negotiations to a settlement include the presence or use of an unexpected friendly personality to disarm an opponent (Tactic #40: Be Friendly!) Bringing to the table a person who is highly respected by the opposing team is a good move; such an individual might be able to gain their confidence and support your position (Tactic #44: Make Use of a Positive ‘Halo Effect’). One tactic that never fails is the classic Split and Choose (Tactic #42), which goes like this: One side divides the item into two parts, and the other side gets to choose which part they prefer. Parents have used this tactic to divide the last piece of pie or cake between two kids for decades! Additional key methods that move things along include the chilling effect of one party unexpectedly tape-recording meetings (Tactic #41) or presenting facts (Tactic #45) that unexpectedly support their position. Experienced negotiators also achieve progress by asking probing questions (Tactic #46), which can reveal or point out flaws in their opponent’s position or by using a period of prolonged silence right after a heated exchange. Experienced negotiators often achieve a final gain in a settlement by nickel and diming (Tactic #43) over small items.
Mr. Example 1 Julie and Dara both attend a local preschool.Tactic 39: Compromise Negotiations are successful when all parties walk away with an agreement they are satisfied with. not the Prince. C. I want to play “Prince and Princess. (In a successful negotiation. Dara. It is the give-andtake of a negotiation: one party agrees to give up one of its demands in exchange for something of value from the other party. how about going out to the yard for a while? You can swing or play ball. Both of the little girls liked to play ball when they were outside.: Julie: Dara: Julie: Girls. 154 50 Practical Negotiation Tactics . Okay. don’t you want to play? We could color before your mom comes. If I can be the Princess. it is better not to compromise. At some point. When that point is reached. but since the other children in their room were not there. however. or maybe tomorrow. If there is resistance to compromise. they were the last children left in the playroom for the remaining two hours of the day.” Can I color now? You said we would color later. I want to play “Princess” and I want Dara to be the “Prince. The day-care worker wanted to take them outside for a while so that he could visit with his friend. who was outside with older children. Julie wanted to play “dress-up.” Dara.: Julie: Dara: Mr. was ready to color. they would have to play ball with older children. C. Isn’t it “later” yet? Right now would be a good time to go outside.” but she needed Dara to play with her. the individual might be afraid that the exchange isn’t equitable). Then we can color. the exchange will be between things of equal value. each side must decide whether or not one more compromise will produce an agreement that they will later regret. One day. and that doesn’t happen without compromise.
Mr. wouldn’t you like to go outside first? After you swing for a while or play ball. the owner had to supply additional parking. you can come back in and play “Prince and Princess. Conclusion The children stayed inside and played dress-up. the parking lot will start to look trashy. They were also concerned that teenagers would congregate outside the theater at all hours and there would be more litter and trash around the mall’s parking lot. According to the city’s zoning laws. and they still had time to color. The existing parking lot didn’t meet the current parking standards for that size theater. and teenagers attracted by Making Progress 155 . neighbors became concerned about the changes to the mall.Mr. We don’t want to go outside.” No. When his variance application was made public. failed to offer the children something that was as important as the plans they had made. The neighbors: The neighborhood has four concerns: Theater patrons will be taking up scarce on-street parking spaces. or apply for a variance. there will be an overall increase in traffic coming through the neighborhood and vehicles will be turning into and leaving the parking lot. however. The owner decided to try for a variance. C. We want to play dress-up and then color. The owner and a small group of neighbors met to talk about these problems. C. Example 2 The owner of a small strip mall in the heart of a residential neighborhood was planning to add a small movie theater to the other businesses in the mall. They were worried about the increase in traffic through their neighborhood and the possibility that the few scarce on-street parking spaces would be used by theater patrons. They did all the compromising they were willing to do.: Julie: Hey.
We hope you’re right. but it’s not ever full. Owner: You know that there’s always plenty of parking in the south end of the mall’s parking lot. You could have all of the traffic enter from the north lot. only when that lot is full would cars come around the mall and park on the south side. and we’d like to keep it that way. lights in and out at night can be very annoying.the theater will start to hang around and maybe wander around our yards at night. Many of our homes back up to that lot. the closest parking to it is along Elm Street. So. even though I’m not adding any parking. We’d like you to prohibit cars from entering or leaving from the south lot. And. the north lot is used more. With the Comedy Club and the grocery store on that end. We’re just not convinced. In fact. with your plans to put the entrance of the theater on the east side of the mall. and break in his door. Not having in and out traffic to the south of the mall is just not very practical. as you said. Right now. The neighbors: Owner: 156 50 Practical Negotiation Tactics . driveways on the south side of the mall are along the east and west side of the parking lot. Right now. if I agree to move the theater entrance to the south side. the south parking lot has not been used much. The fence would shield neighbors from the lights from the vehicles and block the walking access through the alley. not having direct access to the south lot from the street would be unworkable. All a patron has to do is park on Elm and walk beside Joe’s yard through the small alley there. I’m certain the lot will accommodate the theater crowd without increasing the parking on your neighborhood streets. I’m afraid. We’d really like to block off that cut-through and have the theater face the south. I could put a privacy fence along the east and west—at the backs of your yards. What if I changed the entrance to the middle of the lot? That way.
the neighbors reported that they were very happy with the way it all worked out. Agreed. The fences created a buffer from the lights and noise. add a new entrance into the south lot. And a year after the theater opened. But you’re going to have to have some kind of security as well. If I agree to move the theater entrance to the south. Conclusion Both sides had to give up something on certain items in order to reach agreement. set back a driveway width. but the privacy fence has to be landscaped so that it doesn’t look like a ghetto wall. and make sure the parking lot is kept clean. The fence would help with the vehicle lights and buffer this noise from the kids who hang around. Teens can form into gangs if left unwatched. however. there could still be access from the street to our garages—just not to the main parking area. put a privacy fence along both the east and west sides of the south lot. Now you’re talking about considerable expense. and they discouraged patrons from parking on neighborhood streets.The neighbors: Owner: The neighbors: Owner: But we use those side drives to get to our garages. Making Progress 157 . The compromises were what everybody could live with. then will you agree not to push for increased private security? Yes. If the fence was set back the width of a driveway onto your property.
and because she was hard of hearing. Lonely. The dog was Mrs. Joan: Hi. Joan had a new baby. but be friendly.Tactic 40: Be Friendly Being polite. If your opponent is aggressive or angry. and that as angry as they were. and what kind of complaints might have already been made. Joan decided to at least try and talk to the neighbor. Joan was already pretty tired. This gives you an advantage.. She didn’t believe her neighbors ought to complain about the barking. Present your position forcefully. so her neighbor’s barking dog came as an unpleasant surprise. and didn’t stop until 6:00 a. 158 50 Practical Negotiation Tactics . just forget it. Take advantage of any confusion about your friendliness to try to get them to agree to some of the easier things you have to work out. Close your windows at night and don’t listen. and pleasant always enhances one’s ability to reach an agreement. I’m Joan. your friendliness might disarm and relax them to the point where they begin to talk about their priorities and objectives.m. and I just moved in next door. thinking that you will be just as easy to work with on the sticky issues. Mrs. Example 1 Joan was new to the neighborhood. and sleeping at night was already a difficult proposition! When the neighbor’s dog began to bark at 3:00 a. they had gotten nowhere.m. respectful. because you are the one to set the tone for agreement. She learned that everyone in the neighborhood had complained at least once.m. incident was usual or unusual. Your opponent might give in readily. Lonely’s only companionship. she just didn’t think it was a serious problem. but going out of your way to be friendly is an especially helpful tactic. They might even start to underestimate your negotiating skills. and started to get upset. She sought advice from the family on the other side of the neighbor with the barking dog to see whether this 3:00 a. professional. Lonely: If you’re here to complain about my Rocky. Mrs.
Lonely: Joan: Mrs. I sure hope he starts sleeping through the night soon. but she took her baby and went to visit Mrs. Why. by the way. Do you think his age has contributed to some of that? You know. I’ve got a friend who is a veterinarian. How long have you had him? Almost eight years now. and I’d like to have him stop by and look at Rocky—would that be okay with you? Well. Mikey. Lonely again. Lonely: Joan: Mrs.) Hi. I’d like to introduce you to my new baby. No. sure. When he does. I can’t pay for something like that. too. though. I just wanted to come by and introduce myself. not at all. I’ll see you. no. (Joan’s sleep was disturbed by another night of barking. then. He’s been keeping me up at night. I know that some of these people around here don’t like him. My friend wouldn’t charge anything for talking to us about Rocky and maybe giving us some advice. Maybe I could come back tomorrow and bring him? Oh. Lonely: Joan: Mrs. don’t worry about that. I might have to talk to you about Rocky. Here’s my little angel. I guess that would be okay. I stopped by and visited with him over the fence this morning. it’s probably because they just haven’t had the time to get to know him. Lonely: Joan: Mrs.Joan: Mrs. I’ve only got my Social Security. Making Progress 159 . Well. Who. Lonely: Joan: No. is a really sweet dog. He’s a real comfort to me. The barking at night has been mentioned to me. isn’t he cute! He’s a handful. I guess so. I need to get the baby home. Well.
The barking all but stopped. Company ZZZ was not able to meet with local elected officials regarding the status of their operations before the press reported the layoffs and the uncertain future for the 150 white-collar employees.. recognizing that the layoffs would be an issue in upcoming local elections. Hearing about this from the press obviously puts you in a very embarrassing situation. I think that if you could have let me know ahead of time. It’s very difficult to make a move of this type without having it leak out. its 150 management and sales employees could continue to work in Happy City. Mayor: (very friendly) I understand how these things happen. that the press got hold of the story of our company’s activities before we could call you to let you know. Joan took up contributions from the neighbors. Lonely’s needs and arrive at a workable solution to the problem. overseeing a factory in Mexico and selling products in the states. They anticipated that it would be an unpleasant meeting.S. Lonely and Rocky. and Mrs. of course. After Joan’s veterinarian friend visited with Mrs. Example 2 Company ZZZ planned to close its manufacturing plant and lay off 300 union employees. U. When he heard the news on the radio. 160 50 Practical Negotiation Tactics .A. that’s very understanding of you. he prescribed medicine that gave Rocky a more regular sleep schedule.Conclusion Joan’s friendly approach enabled her to understand Mrs. agreed to meet with the mayor. Here’s how the meeting went: Company ZZZ: We’re very sorry. Company ZZZ: (surprised) Well. you would have. Company ZZZ. Lonely didn’t have to pay for the medicine she could not afford. the mayor called and asked for a meeting with Company ZZZ officials. Under its new corporate structure.
and the mayor was reelected. and I want them to know that. This strategy worked. We just haven’t heard anything yet. Conclusion The mayor’s strategy was to disarm the company with his friendly attitude and in return get a favorable response to his proposal to buy the property in question. the city has a potential buyer for your plant building. By the way. It’s possible that some of the 300 laid-off employees will find work at this new endeavor.Mayor: I wanted to meet with you so we can take the necessary steps to keep the 150 jobs here. The mayor was able to broker a deal for the “disadvantaged business” to buy the plant and convert it to a different widget maker. Would you be in a position to talk to me about such a deal. We recognize that your new corporate owner is a large company located in Malaysia. You’ve been very understanding about this. Unfortunately. The buyer is a “disadvantaged business” we have been working with for some time. because I’d hate for us not to make an appropriate pitch to them. They need a really good deal on the plant price. I am certain that you would like that kind of “good” publicity coming quickly after the recent bad publicity. Company ZZZ: I’m not sure what to tell you on that. I think I can prevail upon the Malaysia group to let us handle the disposal of the property in such a way as to repair some of the damage our layoffs have created. Making Progress 161 . so we need to understand how we can affect their decision on keeping an office here. Mayor: Great! Let me know when we can talk again. Mayor: Please let me know as soon as you can. Many laid-off employees did indeed find new jobs at the plant. the 150 management/sales jobs did end up moving to Mexico. or would we need to involve the Malaysia group? Company ZZZ: Certainly.
thus becoming a source of embarrassment. the accused. age 14. The two sisters had saved up a little money so that they could buy souvenirs. are talking about a possible settlement of the issue. who was disappointed to hear that she might propose such a deal.Tactic 41: Record the Meeting The climate of a negotiation session can be “chilled” in an instant if one side unexpectedly brings a tape recorder to the table. She agreed that her proposal was not fair and that she had tried to take advantage of her younger sister. this time in front of a hidden recorder. or simply “bad faith” methods have been used by the other party. had $40. Jones’s supervisor. Example 1 Susan. He asked his elder daughter about the arrangement. age 15. 162 50 Practical Negotiation Tactics . Susan repeated her demand. The effect on the other party might be even more substantial if lies. Example 2 Three men were meeting to discuss a charge of sexual harassment that had been made against Stuart Jones. until Susan said they would evenly split what they bought. South Carolina. Alexis agreed. and Alexis. Michael Wood. Fred Adams.00 to spend. threats. the investigator. Alexis then played the tape for her father. the younger sister. Susan denied it.00. Alexis knew this was not fair. or used to pressure the other side to agree to certain demands. and Jones. Conclusion For the first time in her life. were on vacation with their parents in Myrtle Beach. Alexis. Susan understood the impact a tape recording can have when it reveals a lie. but Susan had only $20. They might worry that the tapes will be made public or given to others. She borrowed a tape recorder so she could ask her father if this was a fair deal. Susan wanted to negotiate with Alexis to “pool” their money so they could buy something together. Then he played the tape. Somehow.
So. Jones suddenly realized that his strategy would not work. You never touched any part of her body? Not even accidentally? No. “Do what I want. he also lost his negotiating position. No one could have possibly misunderstood your intentions? No reasonable person. Your request. But by refusing to repeat his answers. I’ve brought a tape recorder with me. Well. And please describe your general manner. and gestures did not have a single hint of sexual implication or innuendo? None at all. you are aware that the next step in this process is to ask witnesses to come forth. I simply asked her to make copies for me as quickly as possible.” meaning something other than copies? No. Stuart. Appleton both claim they saw the incident and will testify. Jones.Adams: Jones: Wood: Jones: Wood: Jones: Wood: Jones: Wood: Jones: Adams: Jones: Adams: Jones: Adams: Tell me again. So you refuse to repeat the answers you just gave us? Yes. to quote you. Making Progress 163 . Mr. (a long pause) I want to see my lawyer. exactly what you said to Ms. Conclusion Jones had knowingly lied when he denied the charges. When Adams set the tape recorder on the table and revealed that he had witnesses. And you did not threaten her job if she did not. He failed to think about what might be the next step. stares. Mr. Ruiz and Ms. I think I can write my recommendation. Starr. and now I’ll ask you to repeat your answers—on tape.
What is it? Maria: Father: 164 50 Practical Negotiation Tactics . Example 1 Maria (age 8) and Roberto (age 6) are arguing over who should get the jumbo-size Snickers candy bar their father brought home. The second person then chooses which of the two parts they will receive. Many of us learned this one from our parents: After two people agree to the strategy.Tactic 42: Split and Choose When two parties both desire something that can be shared or divided between them. the classic “split and choose” tactic might be the best way to settle the issue. one person is given the task of dividing the object(s) into two parts. Realizing the potential of getting the “smaller half.” the divider. which certainly is large enough (he naively thought) for two young children to easily share. of course. because you did the cutting. Roberto will get to choose which half he wants. Maria. Oh.… No way! Haven’t you two heard of ‘split and choose’? It’s a fair way to divide things. is usually careful about dividing the object into two equal parts. Maria: Roberto: Maria: Father: Father: We can’t share it! It’s in one piece! I’ll eat half and give you the rest. Maria and Roberto: No. Their dad instructed them to share the candy bar. take this knife and slice the Snickers into two halves. with the remaining part going to the person who did the dividing. so I’ve got to cut it into two equal pieces or else he will choose the bigger one? Exactly.
quickly recognize the fairness of the divideand-choose method. even children. They have a recent appraisal that values the property at $150. Clarence agrees to divide it. Clarence: Right. that sounds fair. jointly purchased fourteen acres of lakefront property several years ago. The problem is that one of us will get four lakefront lots and the other will only get three lots. Clarence: But some of the lots away from the lake have been partially cleared and are flatter than others. They all have a great view and are equally desirable to build on. but is not sure how to arrive at a fair split. Lots must be at least one acre to be developed. Archie: That’s true. The remaining lots should be distributed between the two parcels to make each parcel as equal in value as possible. That makes them more desirable. I don’t really care which lakefront lots I keep. Archie: I really don’t care either. I propose that you divide the fourteen acres into two parcels that you believe are about equally desirable: one parcel with three lakefront lots and the other with four lakefront lots. so we should be able to divide the property fairly. Then I will choose which parcel I want. and wants to divide it into two separate parcels. Clarence and Archie. Example 2 Two friends and business partners. Give me the map and a pencil. There is only one place for an access road that must serve all lots. both parties.000. but the appraiser pointed out that the seven one-acre lakefront lots are considerably more valuable than the other seven lots. according to county deed restrictions. Making Progress 165 .Conclusion When two people desire the same object and it is something that can be divided in some way. Archie: Here is the map. Archie is ready to build a retirement home on the property. Deal? Clarence: Sure.
Archie chose the parcel with the three lakefront lots. and the second parcel with four lakefront lots and one other lot. and both men were happy with the arrangement. Which would you have chosen? 166 50 Practical Negotiation Tactics .Conclusion Clarence divided the fourteen acres into one parcel with three lakefront lots and six other lots.
However. Example 1 Brenda Davis is always thinking about the repairs that might be required on an item. attach legs. and the delivery carrier doesn’t set up mirrors. he also set up all of the furniture in a second-floor bedroom.Tactic 43: Nickel and Diming Insisting on the addition of a small item (a “nickel or dime” item) as an inducement to help settle a more-important item being negotiated can change the negotiations in a significant way.” Under store policy. so the salesperson delivered the suite himself. because a “nickel” item has been added to negotiations about a much more significant item costing “dollars. miles from their home. They recently purchased a new bedroom suite after they carefully priced comparable furniture all over town. His tactic was to throw in a “nickel” in order to make lots of “dollars.” thus extending the scope of the negotiations. Brenda did her part when she said. With a great deal of effort. “Okay. Jason was having a hard time getting the salesman to lower the price. Her husband Jason. delivery was limited to a small geographical area.” Many people have witnessed or used this effective negotiating tactic. supposedly the bargainer in the household. What started out as a single issue is now a combination of a major issue and a much smaller issue. we’ll take the suite if you’ll throw in free delivery and set up the furniture. Conclusion The amount the couple spent was fairly large. is expected to dicker over the price. etc. The suite they liked best was already at the lowest price in town (the retailer was having a real sale). Example 2 An experienced and skillful union organizer liked to tack on a tiny less-significant item each time a company and its union negotiated on a large and Making Progress 167 .
In one case. If used correctly—at the very end of a negotiation—the tactic can usually provide a small gain.important item. so be prepared to withdraw the nickel and dime item at the hint of trouble. we’ll agree to Health Plan A with another ½ cent on the pension fund. If one party misjudges the situation. 168 50 Practical Negotiation Tactics . At the end of negotiations. it can be a dealbreaker. one member of the management team commented on the move: “This guy has nickeled and dimed us a total of thirteen times—and for a lot of money! Next time we can’t give in on those small add-ons.” Conclusion The nickel and diming tactic is a classic negotiation tactic used successfully in a variety of situations. the two sides had been engaged in considerable bargaining over an improved medical insurance plan (“Health Plan A”) costing hundreds of thousands of dollars. “Okay.” The company negotiator yielded to this small-potatoes counteroffer in order to win agreement on the health plan. This experienced bargainer said.
Kathy: Then I’ll take the couch and love seat.Tactic 44: Make Use of a Positive “Halo Effect” It is common in interviews. Kathy: I suggest we take turns choosing which of these things we want. decision-making meetings. Kathy: Well you took the bar and four stools as one item! Donna: They are part of one set. thus creating the impression in others that the good qualities they see are present all the time. or knowledgeable. Example 1 Donna: Mom said to take what we want from the old house and toss out the rest. This creates what is called a “halo effect. Kathy: I’ll take the pool table. People tend to make an effort to put their best foot forward. and all the rest is small junk. Donna: I’ll take the bar with stools. I’ll take the color TV.” Having a member of a negotiating team whom the other side thinks can do no wrong might prove to be advantageous. and performance evaluations for people to come across as likeable. Donna: Okay. Donna: No way! These are the last two pieces of furniture. Kathy: Not if you accept your logic! (Pause) Donna: You’re not being fair… Making Progress 169 . but they are two pieces of furniture. Kathy: But they are a matched set. trustworthy. Donna: They match. You can go first.
and he has always struck me as an honest person. I want the stools. Let’s call Johnny Ryan. and if the bar and stools should be one item or two. Example 2 During a heated labor negotiation. (Pause) We’ve got to settle this today and get this stuff moved.Kathy: Donna: Kathy: Donna: Kathy: Kathy: Donna: Kathy: Donna: Kathy: You’re not! (Pause) Well. with a record of labor involvement that included three recent strikes. I trust his judgment. but Kathy and Donna assumed that one positive quality (honesty) would carry over to other areas. 170 50 Practical Negotiation Tactics . He’s our cousin. Johnny had the “halo” of an honest person. He might or might not have also been a good arbitrator. Good idea. Conclusion Kathy and Donna needed an arbitrator to settle their disagreement. and ask him if the couch and chair should be one item or two. The union negotiators. the team representing the city management found itself unable to convince the union negotiators that their newly proposed staffing plan would provide adequate personnel for each firehouse. What for? Tell him the situation. what can we do? Give me the couch and love seat! No. I want the love seat.
and that he did. Conclusion The union leaders gave Boston a great deal of respect (even in areas such as budgeting and actuarial tables) because of his former position. Making Progress 171 . even if the proposal appeared to be valid. the former union president. He solemnly told the union negotiators that he had been hired to review it. when negotiations again stalled on a retirement plan issue. without any reservations. They might have stretched his halo farther than his expertise and experience warranted. as a consultant to review their proposal. The teams took a weekend break from the stalled negotiations. During the break. Boston was widely known as a totally honest man who speaks his mind. but his mere presence caused the union leaders to accept a management point as valid. He said he believed that it would work as presented by management. the consultant did not speak. Boston went to the negotiation table with the management team. On Monday. Two weeks later. This time. The union accepted the proposal. the city management again hired Boston. the management team hired Sam Boston. thus bringing the negotiations to a conclusion. but the power of the so-called halo effect was great.simply did not trust the management team.
Sometimes. but the key is to gather facts that you might need—not just the facts that you will need. has owned the house for 24 years and is downsizing to a condo. We love your house. Henry Lopez: Sam Jones: Maria Lopez: Sam Jones: Maria Lopez: We love the house and have made a written offer of $240. but we feel that it’s a fair offer. I’ll get back to you.500. and we are countering with an offer of $250. Here’s a list of the five that are about the same size as yours. This offer is for more money than any four-bedroom houses on this neighborhood list. but you’ve priced it way too high. but the right facts presented at the right time can chill or astound and completely turn things around. What? That’s $35. They believe it is overpriced. How can you say that? We went to the county courthouse and looked up the real estate transactions for all the houses in this neighborhood that were sold over the past two years.000.Tactic 45: Use Facts Fact-gathering must be part of the preparations for every negotiations session. and $237. Sam Jones. (Next day) We’ve reviewed the records you’ve produced. the other party will ignore or refuse to believe the information.000. $237.000. They sold for: $225.000. $229. Example 1 Henry and Maria Lopez are interested in a house that lists for $275. Being able to present them at the most appropriate and critical times has made the difference in countless negotiation situations.000. Sam Jones: Sam Jones: 172 50 Practical Negotiation Tactics . $235.000 under the listing price! We realize that.000. The owner.000.
We accept. Hatfield: While I was at purchasing. The facts presented by Henry and Maria Lopez caused Jones to re-counter their asking and likely sale price. That’s the bottom price. Supervisor: If I okay this purchase order. Well… We have a written counter of $245. You can’t pay more than $1.000 each. Order the new computers. He found facts that supported his position.000. if other departments have ignored the policy. No one can go over $1. and we know that only this model will meet our needs. Conclusion The Joneses had based their asking price on the advice of a friend. and did his homework. Making Progress 173 . We’ve talked with purchasing and we have the authority to buy seven for $2. I asked for a list of all new PCs bought this year. Here it is. The last 20 were over $2. I’ll be… Okay. Hatfield: My staff has done a lot of research. and wisely chose exactly when to present them in order to make his point. let’s not worry about it. I’ll get called on the carpet. Conclusion Hatfield had anticipated what his supervisor’s position would be.600 for a computer.600 unless the company president approves. Example 2 Supervisor: You know the policy.Henry Lopez: Sam Jones: Henry Lopez: Sam Jones: Let us discuss this for a minute. Supervisor: Well. who was not particularly knoledgeable about real estate.400 each.
and two are for my husband. but I don’t set the policy and I can’t make exceptions. Maureen: Well. I want two of these. Maureen. They can help you identify or better understand what the other side really wants. and they would all be unavailable to others.Tactic 46: Ask Probing Questions Ask probing questions and follow-up questions. Maureen: So you trust me with the books. 174 50 Practical Negotiation Tactics . A maximum of three books can be checked out to a person at any one time. I can’t check out these four books? Jenny (Librarian): That’s the policy. and help you point out inconsistencies in a position that might “lead” the other side to change theirs. yes. can you check out two on a card for him? Jenny: Well. reveal misperceptions or lack of knowledge about positions that can be corrected. Example 1 Maureen: What. I trust you. some people would have forty or fifty books out at the same time. Otherwise. you know me. Maureen: Well. I can do that within the rules. The effective use of probing questions can help achieve a favorable settlement. Maureen: The policy limits a person to only take out three books at the same time? Jenny: Yes. If you trust me. but you don’t want to jeopardize your job? Jenny: Yes. Would I do that? Jenny: Maureen. I’m sure you would not. But I can’t break the limit rule—it is an absolute rule here.
it could kill us. and Kenzie. Example 2 Jack: Mark: Jack: Mark: Jack: Mark: Jack: Mark: Jack: Mark: Jack: Mark: Jack: Mark: Jack: Mark: Jack: Mark. They say it’s a security issue. Making Progress 175 . Sue. (Next day) Do you have the policy about giving out product sales information? No. Brooks. Babu. But this forces us to make decisions without complete information! Yes. Mary and Kenzie? They are 2-3 pay grades below us. but it’s because you don’t have access clearance. If that data ended up in the wrong hands. Security? Right. I couldn’t find anyone who knew it. are you sure I can’t get your information technology people to give us direct information on product sales? No. Why? Some policy? Yes. and they don’t even have a use for the sales data. we can’t do that. Mary. Who does have access clearance? Mike. Jay. Can you get me the number? Sure.Conclusion Maureen used probing questions to uncover a way to solve her problem and make it easy for Jenny to stay within the library rules. What’s the policy number or date of approval? I don’t know.
P. Jack: Can you ask your V. Jack was able to receive clearance as well.” He intended to do this until he hit a dead-end or was able to find a solution to his problem. that’s been the policy since I’ve been here. Once he discovered that employees in lower pay grades had access clearance. if we can have access? Mark: I guess so. I’ll sign now. Conclusion Jack continued to probe by asking why and who in order to find out more about “the policy. His probing questions turned up a critical fact. Jack: Here.… (Next day) Mark: The vice president said you can have access if you sign a security card like everyone else who has access clearance.Mark: Well. I’ll get it for you ASAP. When can I get the data? Mark: Today. 176 50 Practical Negotiation Tactics .
T Reaching Agreement 177 . In this process. days. Tactic #50 should always be used right away: Commit the Offer to Paper! Even small issues negotiated among friends can cause problems if people rely on memory and assume that both parties have “heard” the exact same conditions. If friends or neighbors need to settle something but prefer to avoid the negotiation process. and the classic Walk Away (Tactic #48). Tactic #49 (Final-Offer Arbitration) should bring about a settlement. When multiple issues are at stake and most have been agreed upon during negotiations. or even months after the first offer is presented. If both parties desire a settlement but cannot seem to reach it through the usual give-and-take process. the two parties agree to let a third party render a decision on unresolved issues and agree to accept the arbitrator’s decision as final and binding. When two parties believe they have an oral agreement. how solid an agreement can it be? Even parents negotiating chores and other aspects of life with their teenagers have found it useful to have their children write down and sign the list. which is used only when a negotiator is prepared to end negotiations without an agreement and you want the other party to make a final concession to reach a settlement. If people are not willing to take even a few minutes to write down the terms that have been agreed upon and sign the paper. They bring it out when a dispute arises. and the child learns an important lesson about life. this tactic can produce an agreement. Other final-agreement tactics include Tactic #47 (Giving Premature Congratulations) to make the other side feel good about having achieved an agreement (while you spring another condition on them).Stage 7: Reaching Agreement he final stage! It might come minutes. hours. this process can easily result in a final settlement.
and Virginia Beach —his plan—that he let the euphoria of the moment cause him to agree to a trip he dreaded and in fact had successfully avoided all year. They both have stressful jobs and look forward to their annual vacation together. D. She said. off-again discussions.Tactic 47: The Premature Congratulation This tactic draws its strength from timing. His wife had carefully planned her exact “premature” vacation agreement. Near the end of a particularly anxious bargaining session when there was little time left to negotiate. Larry Snyder gets bored staying in any one place for many days. Let’s do go to Virginia Beach and Washington D. Weeks of stressful meetings cause both sides at the bargaining table to look forward to its conclusion. As he hugged her.…” Larry was very pleased that his wife was agreeing to the idea he had been trying to sell. The bargainer skillfully 1) begins the congratulation sentence “I agree…”. 2) allows the other side to feel the release that comes with completing the bargain.C. she continued to speak: “…as long as you agree to drive us to visit my mother on her birthday. one exhausted negotiator saw that his team was equally weary and 178 50 Practical Negotiation Tactics . After days and weeks of on-again. Example 2 Negotiations can take a long time and incorporate many issues. Nancy brought up the subject of vacation again after dinner.C. but his wife Nancy likes to stay put and relax. 3) and adds one last key demand to the congratulation sentence. Example 1 Many husbands and wives have different ideas about how they’ll spend their vacation.” Conclusion The husband was so excited about visiting Washington. “I’m thinking of agreeing to your plans for vacation.
One operating issue involved the probation period for new employees. “…as long as you give us a 45-day probation period. We all knew that it could come down to agreement or strike. we made some small concessions on financial matters.almost willing to accept any deal. we held firm on this and did not discuss the probation issue and many other “dead” issues for days. he turned on a large warm smile and extended his hand to shake. and this skillful negotiator let them feel the happiness and security one feels when the fear vanishes.” Bob: Ted timed this perfectly. fit. In our last offer. Ted said. (This is a bad position to be in. and rested. My team had convinced me that doubling the time frame would create a real problem on the shop floor. Most people didn’t notice that the negotiators had not finished their hand shake… Ted: Then Ted continued his sentence with.) Here’s what happened: Bob: I knew that the other side was similarly harried. but held firm on remaining operating principles. but acceptable. symbolizing that he was agreeing to the entire final offer. “It was hard for us. When the chief negotiator emerged with his team and headed toward my team. It took only a few minutes of caucusing for my team to convince me that a 45-day probation was costly. Reaching Agreement 179 . One of the best pieces of negotiation advice is to remain fresh. because it makes you pretty vulnerable. but also that they sensed the weariness of my team. It was so close. Therefore. as the negotiator came closer. However. My team was afraid we would not even come to an agreement. but the other side continued to ask for 60 days. I felt the tension in the room. but we agree to everything in your final proposal…” Members of my team shouted hooray. The celebration had begun. The old agreement specified a 30-day period. There were grins and handshakes coming from the other side.
the negotiator skillfully finishes his words of congratulations by inserting one last key demand. However. The negotiator makes a big show of agreeing and allows the other side to bask in the glory of a deal completed.Conclusion This “premature congratulation” tactic can only be used successfully at the very end of an unsure and shaky negotiation. 180 50 Practical Negotiation Tactics . knowing that it will probably be agreed to in order to continue in the euphoria of the moment.
He stopped by Pembroke one day to look at the new models. all from Sue Wilson. You bought your wife a new van just last year. but I thought I might want to try a new Highlander. Jay. Jay: Hi. You had time to assess my car. Sue: Well. I’ve worked with you before. a veteran salesperson.) Jay: Sue. Jay. here are your keys. the following exchange occurs. Your opponent will have to either let you go and run the risk that things are really over. but my Avalon is a good car. Example 1 Jay Vahaly has purchased three new Toyotas from Pembroke Toyota over the past twelve years. too. (Vahaly drives the new Highlander home. what can you do on a 36-month lease? Reaching Agreement 181 . how did you like it? Jay: Okay. The next morning. Sue: I remember you. Whether you are really bluffing or you are serious. I don’t want to negotiate.Tactic 48: Walk Away Walking away from the table in the middle of negotiations is a risky tactic that should only be used when you know you have a good alternative to what is on the table AND you believe that the other party will think that you really are serious about quitting for good. and he can simply buy it when the lease expires. if I roll over the lease to a Highlander. or go after you and perhaps make a new concession in order to get you back to the table. My name is Jay Vahaly. and the lease on my Avalon is about to expire. He really likes it. but his Avalon has been a good car. Sue: Let me get you the keys so you can take this one home overnight to see how you like it. be sure you think this through beforehand. right? Jay: Yes. I like it.
I’m disappointed. They’ve talked about retiring in recent months. He was prepared to keep his Avalon if the lease was even $1 more than his limit. These Highlanders are hot items! Jay: Well. Jay accepted. Sue: I’ll try. at most. Please go back and work out a lower lease payment. Jay. Jay: What? I was thinking the lease payment would be. Jay: I guess I’ll go to Dixie Toyota and see what they will do for me. but 182 50 Practical Negotiation Tactics . you can turn in the Avalon and get the Highlander for only $249 dollars more per month.Sue: Give me a few minutes and I’ll find out … (20 minutes later) Sue: Well. (15 minutes later) Sue: Well. they came down to $199 more on a thirty-six month lease. Sue called him as soon as he walked in the door and offered another $50 break on the lease. (Jay got in his car and drove home. Jay—wait.) Conclusion Jay knew his BATNA (best alternative to a negotiated agreement): to go somewhere else if the deal isn’t good enough. (He walks away) Sue: No. Jay. He effectively used the walk-away tactic to let Sue know that he was firm on the price. Example 2 Larry and Judy Bizannes own the Bizannes Music Mart. Sue: Sorry. a successful musical instrument sales and rental store. Let me try again. I thought I’d get a fair deal. That was the figure he was looking for. $100 more.
with a certified check. they were prepared to accept $5.) Conclusion Larry and Judy used the walk-away tactic and stayed away for two months in order to convince Michael that they were firm on their price. Michael calls on them again with a check for $5.both of them love their store. after no contact from Larry or Judy. and I’m not interested in less. you’ve already told us that. Larry: Yes. Michael: Well. visited their store. but their continued walkout convinced Michael that they would hold firm. which the Bizannes accept. Larry.0 million. and he is offering us $4. and we gave you our price. Two months later. today. What do you think? Judy: Larry. let’s eat lunch. In reality. Larry. Reaching Agreement 183 . Michael: I have a check right here for 4. One day. Larry: Michael. come out here! (Judy comes out from the back room. You rejected it. How’s business? Larry: Great! I’m surprised to see you again. He met with Bizannes twice before. (Judy and Larry walk into the back room and close the door.5 million for the building.5 million. Michael Roberts. and I’m prepared to offer you $4. a local developer.) Larry: Michael is here again. and I only need your building to own it. our accountant said it’s worth $6 million. so why are you here? Michael: I’ve discussed it with my partners. I still want to develop this block. Michael: Good morning. Judy: Larry. go back to your office.5 million.5 million. Larry: Judy.
which is generally voluntary. the mediator works with both sides to resolve certain issues but has no authority to make binding decisions. We have a few dollars invested in parts and we had fun working on it. Lynne responded that this was their intention. But he isn’t allowed to try to find a “middle ground”—just to choose one position or the other. They inform her that they put the machine on e-Bay and have an offer of $1.Tactic 49: Final-Offer Arbitration Mediation and arbitration are two well-known ways of resolving sticky disputes. In mediation. Example 1 Jenny and Lynne are sisters. and would be able to restore hers as well. but they wanted to give Jenny $500 for her “share” of the machine. The following discussion occurs: Jenny: The old machine wasn’t worth $50 when you took it. Jenny: No. Lynne told Jenny that she and her husband Gary have restored two other Singers.000. Lynne: No. Lynne and Gary bring the restored Singer to Jenny’s house. Both involve the use of third parties who are objective. the arbitrator is given the authority to make the parties comply with the ﬁnal and binding decision. I won’t take it. Jenny told them to sell it. Jenny has an antique Singer sewing machine. That was the deal. In arbitration. which she has kept in a barn for over ten years. Keep the $1. Let’s split the money. so they generally give up some ground and try to make the offer appear as fair and reasonable as possible. In most arbitrations. Six months later. In ﬁnal offer arbitration. I offered it to you for nothing. both sides have agreed in writing to accept the arbitrator’s decision. Jenny told Lynne she could take the old Singer that she has no interest in (and doubts that it is worth restoring). each party submits their ﬁnal offer on each unresolved issue (usually in writing) and the arbitrator chooses one as the ﬁnal settlement as it has been submitted (no changes or compromises). One day Lynne dropped by for a visit and the discussion turned to the old Singer.000. Each party wants their offer chosen. 184 50 Practical Negotiation Tactics . Lynne: No! I suggest that we each write down our position and let Dad choose one of the two as the final decision.
Any increase in value was due to the work of Gary and Lynne. The union’s position could have run into millions of dollars. Tina. My troops are getting restless. Tina: Yes. As a brief explanation. we are down to only three unresolved items. They should get the other $950. Their father found Jenny’s position to be the most reasonable. I can’t see any way to reach an agreement.Jenny: Dad: Okay. after six weeks of negotiating. I have chosen management’s offer to keep it as it is under the current contract. based Reaching Agreement 185 .” Lynne proposed a 50-50 split. Conclusion Jenny’s final position was that she receive $50—the maximum possible value of an old “junker. and meet back here in 72 hours—3:00 p. (One week later) I think Jenny’s position is the most reasonable. he did not need to “haggle” with them. Ralph: Right! (Friday at 3:00 p. Ralph: I know.m. Tina: Good. but we’ve made no movement on any of them since we started.) Judge Ryan: Here is my written. I’ll buy that. Then we both submit our final offers to Judge Ryan within 48 hours.m. binding decision on the three items. At best. on Friday. since he could only choose one offer. Example 2 Ralph: Well. first on the health insurance co-pay. the old machine was only worth $50 when Lynne hauled it away. so I am invoking the finaloffer arbitration ground rule we have in place.
Now let’s get a signed contract. No increase has been given for six years. Ralph. on the merit pool distribution method issue. At least we both saved time. but we agreed to this process. I have chosen management’s offer because the union did not justify why the past practice should be changed. It will only cost $120. money. Second. reasonable resolution to their last three unresolved issues. Well. 186 50 Practical Negotiation Tactics . and peacefully finalize a contract that contained several important gains for both sides. I’m sure you realize that we could have taken six more weeks to reach the same point. and stress. I’m not happy with your decisions.000—less than 1 percent of the total package. Conclusion The final-offer arbitration process enabled the parties to gain a fast. I have chosen the union’s final offer. and an item that large should have been negotiated at the table. on the clothing allowance. Finally. nor why their method was superior.Ralph: Tina: on last year’s data.
Bill and Paulette fell in love with the house. they looked at this particular house on their own. seeing the agreement in writing will force both sides to acknowledge what has been said and agreed to in the negotiations. If we shake hands on it right now. The goal of recording the precise details is to either avoid any misunderstandings or address them before the talks conclude. Bill pulled the seller aside. Bill: Bill: Can we talk to you a minute? What’s your asking price? And that includes the appliances in the kitchen? And all of the drapes and blinds? Okay. not the furniture.000. and felt that they would have to work fast to make an offer before someone else did. Obviously. Bill: Reaching Agreement 187 . At the very least. They finally looked at a house they really liked. everyone is busy grappling with the details of the negotiations. They were not the only couple to come to the open house. we won’t be involving our real estate agent. We’d like to make you an offer of $150. During a discussion. They saw the “For Sale” and “Open House” signs. and while Bill and Paulette had been using an agent to help locate houses. however. and decided to stop by to see if they liked the house. Seller: We’re asking $152. The owners were selling the house without a real estate agent. Example 1 Bill and Paulette had been house-hunting for some time.Tactic 50: Commit the Offer to Paper You can often control the progress and direction of a negotiation by writing down the agreements or understandings as they are being reached. The party who writes down what has been agreed upon right away might have some advantage in precisely wording the agreement to that party’s advantage. and one of the other couples looked very interested. Seller: Yes.000. all the usual stuff in a sale.
In the section for fixtures and miscellaneous items to be left on the property. since he probably would have missed them) Yes. he left the price at $150.) Seller: So. he listed an attached hutch in the kitchen. Example 2 Monica brought a sex discrimination charge against her employer. the hutch. then we have a deal. the refrigerator. the hutch. Under the section for appliances to be left on the property.000 and added the additional items to “sweeten the pot” and give Bill and Paulette a deal they couldn’t refuse. real. and when she refused. a public agency.000.Seller: Just a minute. and the two area rugs were specifically included. In her complaint. Seller: Okay. I think we can work something out. and had been prepared to drop his price to $145. and the garbage disposal. Let me just get the standard “offer of sale” form and fill out what I hear you saying. If it’s what you meant. he began to have “problems” with her job performance. the house is yours. in fact. she said that her supervisor had repeatedly asked her out. and two area rugs. When he had the chance to put the deal in writing. and that the problems with her job performance were. It worked. and the two area rugs. Bill: (pleasantly surprised to learn that the garbage disposal. he listed the stove. (The seller recorded the offer of $150.000. The employer’s affirmative action officer looked into the charges and determined that 188 50 Practical Negotiation Tactics . and that no one would ever say that he was guilty of any type of sexual harassment or sexual discrimination. The supervisor pointed out that he had a staff of 20 or so women. all window blinds and drapes. Sign here. but I’d like to make sure there are no misunderstandings. The supervisor assured the employer that there was no basis for her complaint. that’s what I meant. Conclusion The seller had always intended to leave the garbage disposal. look this over.
and expensive matter. You’re just trying to make it seem as if your supervisor did nothing wrong.000.000. then Monica had to acknowledge that the supervisor did nothing wrong. Monica had. found a new job and wanted compensation for “embarrassment” and lost wages in the amount of $100. She thinks the withdrawals and the secret settlement will be seen as some kind of admission on her part that she shouldn’t have brought the claim. and must agree not to tell anyone about the $100.there was little basis for the complaint. but it’s not standard when a complaint is formally withdrawn. my client is supposed to formally withdraw the complaint rather than just settle it. you didn’t mention in the agreement that in exchange for the $100. The employer’s lawyer told Monica’s lawyer that the employer was ready to settle the deal for the $100. the supervisor says he did nothing wrong and that Monica just misinterpreted what he said. It might be standard when there’s a settlement. drawn-out. even though you are paying Monica because we can prove he did do something wrong.000. even though we’re certain we would prevail. Monica’s lawyer (She): Employer’s lawyer (He): She: I was surprised by your settlement documents.000 without actually having to prove anything. And the confidentiality clause is standard. I’m He: She: He: Reaching Agreement 189 . He offered to send settlement agreement papers to her. He’s happy to prove that in court. but said that fighting the charges would be a long.000. Look. The supervisor insisted that if the employer felt he had to settle. by this time. settling—What difference does it make to her? She’s getting her $100. Withdrawing. But the employer doesn’t want to go through the expense and publicity of a trial. Why’s that? Well.
I’ll take your offer back to her and let you know. Conclusion The decision by the employer’s lawyer to send a written agreement that did not reflect the actual agreement of the parties caused the negotiations to resume.000 and the conditions of the offer.000 just to get the employee to “withdraw” the complaint. It was made clear that the employer had paid the additional $100.000. 190 50 Practical Negotiation Tactics .000. It would have been a better strategy in this situation to raise the issue of withdrawing the complaint during the actual negotiations.000 when all that was asked for was $100. but word did get out that a public agency paid $200.She: authorized to pay $200. Monica accepted the $200. to his disadvantage. but that’s under the same conditions—the claim must be formally withdrawn and Monica can never reveal the amount of the settlement. There was a confidentiality agreement.
but it was not what I meant. A Communication Hearing is not necessarily the same as listening. commitment. Reaching an agreement is the first step.” Clear communication is essential if you want to reach an agreement and have it abided by. Think of how often you have said to someone. the three sisters reached an amiable agreement. Putting the Agreement in Writing 191 . As these examples of personal and business negotiations show. Putting an agreement into writing serves three purposes: communication. depend on the kind of negotiations in which you are involved. it is much more effective in the long run when the parties enter into “win-win” agreements.” By the same token. I thought you said something else. even an informal agreement benefits from some type of written documentation. When two friends agree on what movie to see. but some of the decisions were put off for a couple of months.SECTION IV: PUTTING THE AGREEMENT IN WRITING s you can see. In Tactic #17 (Package Items). and contract. talking is not always the same thing as communicating. “That may be what I said. of course. then the parties have to abide by the agreement. when they engage in honest “give and take” negotiations. Unfortunately. Certainly someone has said to you. most certainly needs to be in written form. One way to help the parties abide by an agreement is to put it into written form. However. The degree of detail and formality of a written document will. “Oh. rather than attack each other. If the agreement reached at the time had been put into writing with all three sisters signing it. however. operating under an agreement after it has been reached can be even more difficult. a written document is hardly necessary. it would have been easier to resume negotiations at a later date. and when they agree to solve problems together. A union contract. reaching an agreement is sometimes a long and difficult process.
a couple of months away. or movements. Commitment Reducing an agreement to writing often forces both sides to truly commit to the agreement. pictures. he can be reminded of the details because it’s all there in black and white. In Tactic #4 (Use Objective Criteria). that is. sounds. Who isn’t excited about buying a brand new SUV or truck? Until. If Jason fails to live up to his side of the deal. pictures. When you create a written record of the details of an agreement. seek information. Writing an agreement down gives the parties an opportunity to use more-specific or precise language and eliminate some of the emotion that might have accompanied the negotiations. Oftentimes just seeing the agreement in black and white conveys its import as well as or better than hearing about it. or movements being used by the sender.” In Tactic #14 (Don’t Always Hide Your Weaknesses). His mom could more easily enforce the agreement if she had it in writing.Communication is a process that involves a sender and a receiver. or express a thought or emotion through words. the message being conveyed and received might be understood differently. nine hundred and forty-four dollars—$22. And because the sender and the receiver are two unique individuals. Negotiations are often necessary because there was a “misunderstanding” that could have been avoided if the parties had put their agreement in writing. 192 50 Practical Negotiation Tactics . sounds. The receiver has to decode the message being sent by trying to understand and interpret the words. Jason agreed to change his study habits if he couldn’t pull his grades up by the end of the semester. the opportunity for the sender and the receiver to misinterpret is greater than if the communication is first spoken and then written. the price is spelled out in the loan document as “twenty-two thousand.944. Larry wouldn’t have had to argue over a bill for the plumbing work his cousin Will did if he had asked for Will’s estimate before accepting his offer to help. The sender wishes to convey an idea. you have created something tangible that can be referred to in the future when memories become fuzzy. When communication is limited to the spoken word only.
ask yourself the basic questions of who. when. Your spouse will share some responsibility for failing to make that duty clear in the agreement if. your plants die because the house-sitter wasn’t told to water them. and dated agreement. Both parties must receive a benefit or something they personally consider of value.Contract Finally. One party wishes to buy what the other wishes to sell. In either case. or it isn’t an agreement—it’s merely the conveying of a gift. and so on in standard contract form. have your spouse also agree to the details of the agreement. However. before the trip. the address and description of the real property. the real estate contract includes information about the buyer and seller. WHY? The “why” of an agreement is generally the explanation of the mutual obligations or advantages the agreement represents—the reason why the parties began negotiating in the first place. Here’s what we mean. which. say. and put that information into the document. When you are ready to commit yourself in writing. where. protect yourself by having a written. dating it. which kind of. what. Carefully and completely describe the subject matter of the agreement. If you have agreed to pay someone to house-sit while your family is on vacation. leading to misunderstandings and contract disputes. WHO? Provide of the full names the parties necessary to the agreement. and getting all the parties to sign it usually creates an enforceable contract. WHAT? The written document should clearly describe the item(s) covered by the agreement. signed. as many people learn when they purchase a home. You can informally enforce an agreement just by showing the individual(s) the signed copy as a reminder of the substance of the agreement and their commitment to it. one party will change behavior in exchange for something of value from the party who wants the behavior changed. Generally. Failure to do so can lead to big problems. Putting the Agreement in Writing 193 . how many. in writing. You can do this more formally by taking them to court (perhaps as a last resort). why. and how much. details such as what fixtures stay or what appliances go can be easily overlooked. pulling an agreement in writing. one party will work if the other party pays for the work.
Putting an agreement in writing. The more-specific and clear these details are. agreed to the same thing. which one or which kind of.The remaining questions fill in the details of the agreement. dating it. how much or how many. in fact. the better. depending upon the deal: when or where. if that becomes necessary). 194 50 Practical Negotiation Tactics . It gives the parties an opportunity to really buy into the deal. And it can create a tangible reminder of the deal (or an enforceable agreement. and having all parties sign it ensures that the parties have.
Personal Negotiations Negotiation situation: Parties involved: Issue: Tactics that might be helpful. and how they can be used: Exercise Forms Putting the Agreement in Writing 195 .
and how they can be used: 196 50 Practical Negotiation Tactics .Business Negotiations Negotiation situation: Parties involved: Issue: Tactics that might be helpful.
________________ 2. ________________ 9. ________________ 3. ________________ Tactic# How will I use this tactic? (Application) _________________ _________________ _________________ _________________ _________________ _________________ _________________ _________________ _________________ _________________ ______ ______ ______ ______ ______ ______ ______ ______ ______ ______ Notes Putting the Agreement in Writing 197 . ________________ 7. ________________ 5. ________________ 4. ________________ 6.Name of Negotiation Tactic 1. ________________ 8. ________________ 10.
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Ury. Eshelman. D. 1991. W. and Law. M. Patrick J. 1988. Inc. McKay. M. Clark. Brown. 1987. David. New Jersey: Prentice-Hall. 2nd ed.. Fisher. Practice. Herb. Lewicki. Ill. Heavrin. Oakland. Patton. 1991. 2001. The Essentials of Negotiation. Successful Negotiation: Effective “Win-Win” Strategies and Tactics. Cleary. E. Chicago: Richard D. Kennedy. C. 7th ed. Roger.. New Jersey: Prentice-Hall. Upper Saddle River. Fisher. Fiske. 1980. Fuller. 2001.: Crisp Publications. R. The Negotiation Handbook. M. You Can Negotiate Anything. University of Missouri: Columbia Press. and C. New York: Penguin Books. and B. K. Domenici. 2004. LittleJohn. and J. Cohen. Upper Saddle River. 1988. Inc. Negotiating in the Real World. Victor. Minton. Inc. Mediation. Pocket Negotiator. New York: Simon and Schuster. 2nd ed. Los Altos. New York: Bantam Books. Getting to Yes: Negotiating Agreement Without Giving In. Sharpe. 1989. Irwin. 1999. New York: Basil Blackwell. Inc. Calif. Prospect Heights.: Waveland Press. Calif.E. Maddux. The Negotiator’s Handbook. George. 1996. Saunders. New York: Penguin Books.REFERENCES Carrell. References 199 . J. Gavin. New York: M. 1997. Inc. Roger. Inc. and J. W. R. and S. Gotbaum. Labor Relations and Collective Bargaining: Cases. Inc. Negotiation Skills. R. and M. Getting Together: Building Relationships As We Negotiate. The Relaxation and Stress Reduction Workbook. and S.: New Harbinger Publications.
B. Weeks. New York: Bantam Books. Raiffa. Bargaining for Advantage. The Art of Negotiating. Sharpe. Gerald I. Inc. Raiffa. Massachusetts: PON Books. Inc. G. George. The Art and Science of Negotiation. R. L. Taking Charge/Managing Conflict. 1996. New York: M. 1994. 1982. Howard. Thompson. 1999. New York: Simon and Schuster. Tsogas. Labor Relations in a Global Economy. Massachusetts: D. Howard. 1998. Inc. Lexington. New York: Viking Press. Inc. Shell. 1981. Ury. Getting Past No: Negotiating with Difficult People. Stulberg.Nierenberg. New Jersey: PrenticeHall. The Eight Essential Steps to Conflict Resolution. Lectures on Negotiation Analysis. J.negotiationsources.E. The Mind and Heart of a Negotiator.org 200 50 Practical Negotiation Tactics . www. Heath and Company. Upper Saddle River. 1991. C. Dudley. William. Cambridge. New York: Penguin Putnam. Cambridge. 1987. 2001. Massachusetts: Harvard University Press.
Books published by Dr. organizational behavior. The Academy of Management Review. Business Forum. Personnel. Dr. and MBA and B. Human Resource Management. Labor Law Journal. These positions enabled him to build a sizable management consulting practice while teaching at the University of Louisville. she has helped negotiate a number of major agreements such as a multi-million dollar property exchange that relocated major industries and railroads from the City’s downtown wharf resulting in the development of both an award winning public About the Authors 201 .ABOUT THE AUTHORS ichael R. and served as President of the Board and Mayor Pro-tem for three terms.D. During his academic career he has received awards for both outstanding research and teaching. M Christina Heavrin J. which is located in the greater Cincinnati area. The Journal of Accountancy Training. Carrell has held academic positions at California State University. Organizational Behavior and Human Performance. The Personnel Administrator. He received his doctorate from the University of Kentucky. HR Magazine. in Economics from the University of Louisville. has practiced law for 28 years primarily in the public sector as an attorney for local government in her hometown of Louisville Kentucky. Carrell is Dean of the College of Business at Northern Kentucky University. and negotiations.A. Personnel Journal. In addition to negotiating numerous litigation settlements and contracts. and the University of Louisville. he was elected to the City of Louisville Board of Aldermen for five terms. He has authored over 50 scholarly works in some of the leading management and human resource journals including The Academy of Management Journal. Marshall University. Bakersfield. and Public Personnel Management. Morehead State University. The University of Nebraska-Omaha. In addition. Most of his professional career has been spent in the Louisville area and has included positions as a personnel director and labor negotiator. Carrell are in the fields of collective bargaining and labor relations.
202 50 Practical Negotiation Tactics . Heavrin is serving as Special Counsel to the first Mayor of the Metro Government where her duties include negotiating initial labor agreements between the Metro Government and its unionized employees. a tax sharing agreement between the City of Louisville and Jefferson County that enabled the two governments to share revenue of over two hundred million dollars and to combine their economic development programs.park and a successful industrial park in the City’s enterprise zone. Recently voters approved the merger of the City of Louisville and Jefferson County Governments. Ms. an agreement between the State of Kentucky. the City and a for-profit hospital for guaranteed indigent health care services for city residents. a multi-million dollar expansion of Waterfront Park that included a major environmental clean up and the construction of a Minor League Baseball stadium in downtown Louisville. Jefferson County.