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



or engage in an unproductive argument. 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. 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. Who. they pay the sticker price. This book is designed to give the reader an understanding of the negotiation process by presenting fifty proven.negotiator! Pass this book on to someone else who needs it. exactly. with family members. few people understand that normal interactions represent bargaining opportunities. • A co-worker asks for volunteers for a new project. Instead. Most readers will no doubt recognize some of these strategies. • A child wants a new toy now. practical tactics useful in real-life situations at work or at home. But if you scored 8 or less. Unfortunately. at a flea market. but many of us miss the opportunity to bargain in other situations. such as these: • You receive the wrong order at a restaurant. some will in retrospect even remember being the victim of one or two of them. accept what is given. with neighbors. 4 50 Practical Negotiation Tactics . start reading! Most people come face-to-face with a negotiation situation of one type or another on a daily basis: on the job.

The parties involved can make a decision by themselves. All of these situations are opportunities to negotiate. Decision-making ability. 2.” When you recognize that something can be negotiated.• • • • • • • A hotel clerk tells you that your reservation was lost. and I don’t have time to wait for another. A neighbor wants to remove an old tree on your property line. 5. what can you do for me?” Or this to a restaurant manager: “This food order is wrong. and each side can involve one person or several people (each representing one “side” of the issue). “I’d like Introduction 5 . Multiple parties. one party is only allowed to follow policy or must wait “until the manager arrives. Interdependency. The parties involved are interested in reaching a common goal. some resolution must be negotiated. Each one has the five key characteristics necessary for bargaining: 1. 4. 3. There must be a conflict in the sense that what one wants is not what the other wants. you must advise the other party of your intention to negotiate. In some situations. perhaps you can say to a hotel clerk. Your boss reviews your past year’s performance. condition. Flexibility. In some circumstances. or items of value. such as price. Mutual goals. There are flexible elements to the situation. Two or more sides are involved. The parties are interdependent: what one party does affects the other. Therefore. A teenager wants to buy his/her first car. Your spouse wants to buy new furniture. What are my alternatives?” During an employee evaluation. that can be negotiated. Both sides want a settlement. since you lost my reservation. “Well. time. perhaps the employee can say. be prepared to bargain. For example. A friend is about to select the movie he/she wants everyone else to see. A service repair person gives you an estimate on some work.

Choosing and applying the appropriate tactic to a particular situation will become easier as you begin to use them. the parties and their interests. 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. How can you compensate us for our loss?” Once you’ve suggested that you see the situation as something to be negotiated. the other party will realize that you intend to negotiate and do not accept the situation. and use the forms in the back to identify the issues. and the tactics that might move the negotiations along. Once a settlement is reached. “I see why you want to cut down the tree. Scenarios based on actual real-life situations are used to show how each tactic can be used in business or everyday situations. negotiations can be concluded with a written or oral agreement. but I believe it adds value to our house. Keep this book handy when preparing for any type of negotiation. 6 50 Practical Negotiation Tactics . and meet with you again. the facts.time to look over this performance review and respond point-by-point.” To a neighbor you can say. You can then use one or more of the tactics presented in this book to achieve the best possible settlement.

but you did not? 8.? 10. Do you often refrain from negotiating a better price or service because you believe that you do not have good negotiating skills? Introduction 7 .How good are your negotiation skills? Place a check in the box that applies to you. In the past. have you ever felt that you were not adequately prepared to negotiate a job offer? 2. allowance. As a parent. have you ever required a written agreement covering chores. The last time you received sub-par service or food in a restaurant. or division of household duties. Do you wish you could negotiate a change in your job duties or salary? 7. Have you ever found yourself in a negotiation situation in which your best alternative was to walk away. In the past. did you request appropriate compensation? 6. spouse. do you believe that you negotiated the best possible deal? 4. etc. When making a major purchase. Yes No Self-Assessment Quiz 1. When you purchased your last home or car. or child. do you routinely negotiate a last add-on before you close the deal? 9. Do you routinely negotiate for better accommodations when you check into a hotel? 3. have you routinely resolved differences with a neighbor or a friend through a negotiated agreement? 5.

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Examples: • a signing bonus (employee goal) traded for an annual travel budget (employer goal). If it is a relatively informal situation. decide how complicated the issue is. 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. 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. The Quick Model The easiest way to prepare for a simple negotiation is to identify all the issues. The “Quick Model” approach outlined below is good for simple negotiations.) • primary sales territory • a starting date Exchange Issues: Those issues that might be traded. etc. • an allocation for moving expenses (employee goal) traded for a set number of travel days per month (employer goal). including those that are less obvious.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. The Negotiation Process 9 . state. one for another. Examples: • office location (city. They’re referred to as “win-win” because each side can achieve their goal. On the other hand.

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. What one side gains. the other side loses. 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. stages can be combined. or even skipped altogether. but feel free to try them when they seem most appropriate to your specific circumstance.Distributive (Win-Lose) Issues: Those issues that the parties are directly at odds with. The Comprehensive Model Negotiation is more of an art than a science. rearranged. 10 50 Practical Negotiation Tactics .

Information.The Negotiation Process Table 1: The Negotiation Process: Seven Basic Stages Stage 1 Identify situation as one for negotiation Preparation: Key Factors – Time. 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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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.

Example 1
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.



The Jaggers gave the union their “last. When negotiations with the union became hopeless. inventory. but rather what the buyer planned to do with the car.” which was refused.Conclusion Harvey’s best alternative—his BATNA—was simply to hold on to the car for the moment. and it now employs 230 craftsmen. Example 2 Shari and Jim Jaggers own a successful West Coast pottery company. best. and the Jaggers decided once and for all to sell their business assets and invest the proceeds conservatively. the Jaggers decided to seek buyers for their land. providing them with a very good income for life. In this case. The union negotiators thought the Jaggers were bluffing. and final offer. 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. his BATNA was not to hold out for more money. was a power play. and either move it with him to Arizona or find another classic car collector who might buy it (perhaps for less) and preserve it. With only two weeks remaining before a threatened strike. The threatened strike became a reality. They learned that their assets would be easy to sell and were worth more than originally estimated. and equipment. The $56 million dollar business took them 30 years to grow. 16 50 Practical Negotiation Tactics . labor contract negotiations between the Jaggers and a local labor union representing the pottery’s craftsmen have stalled. notified all the employees of their intentions. as a last resort. as Harvey had for many years. Conclusion Selling their business was the Jaggers’ BATNA. The owners. selling became an attractive alternative to a strike or prolonged battle. For the past two months. The union is demanding wage and benefit increases. 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. The union negotiators convinced the employees that this too.

sure.Tactic 2: Know Your Opponent’s Real Objective Each party in a negotiation will know. How much are you thinking it’s worth? John: Well. John: Tom: John: Tom: Tom. she might have to take a lower offer just to be able to move. Gosh. 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. and told John several times to let him know if he ever wanted to get rid of it. This is a good thing to know. you still interested in my rifle? Of course. John assured Tom that this would never happen. so Tom was surprised when John called him out of the blue one day with a proposal. It is extremely rare—one of only 100 made with that bore and handle. it’s to your advantage to know what is behind a seller’s decision to put it on the market. Make me an offer. A person who has to sell her home because her company is relocating her. Just as important is the why. 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. at some point. I guess I couldn’t take less than $20. Are you finally ready to sell it? Yes.000. I’ll have to think about that.000? That’s more than I planned. I think so. what the other party’s desired outcome is. If you are the party making the offer on the house. I’ve been thinking of getting rid of it for a while. What changed your mind about getting rid of it? It is still in perfect condition. for example. Just running out of space. Preparation 17 . Tom: $20. it’s still perfect. because if the company does not provide relocation benefits. right? John: Sure. you know. Example 1 Tom had always admired John’s 1861 Confederate rifle.

He is two years away from retiring and does not want his business to fail before he does. if you could come up a little—say $18. (Tom investigated the “market” for a restored 1861 Confederate rifle by calling a few other collectors. One of them mentioned that someone who is negotiating with him to buy a restored Winchester rifle for $18. BigManu: Rick.Tom: Okay. and we’re committed to keeping it open as a major division of our company. let me think about it and I’ll get back to you. we really want to buy your company. Was Tom interested? Tom declined. Rick needs to remain president of the company for the next two years. When Tom found out why John decided to sell his rifle. has begun negotiations to sell his firm to BigManu Company. it made the negotiations easier. The sale price for the company has not yet been agreed to. but I could get the money to you right away. but then he will be happy to retire.) Tom: John. fearing that this will put all of his employees out of work. but thought this might explain John’s sudden interest in selling the rifle. Tom: Okay. let’s do it. the owner of a small manufacturing company. I don’t think I can go higher than $18. I’ve been thinking about your offer. parties to a negotiation are not likely to reach agreement. He doesn’t want BigManu to know this because he thinks it will hurt his negotiating position.500—we’d have a deal. Conclusion Tom entered into the negotiations suspicious of John’s motives. John: Well. Without some trust. we 18 50 Practical Negotiation Tactics . No longer worried about John’s motives. However. Example 2 Rick. so he is making it a condition of the sale that ALL current employees must be retained for a minimum of two years. Tom now felt comfortable negotiating the price.500 had an 1861 for sale. and now the two-year requirement has become a stumbling block in the negotiations.000. Well.

BigManu’s negotiating team concluded that they were in the dark as to why this two-year requirement was so important to Rick. Within the parameters of efficiency and effectiveness. We just can’t make good operational decisions with our hands tied. and we think it’s an odd request anyway. Rick: These people are the best at what they do. You’ll be in place to participate in our employment decisions. Without this commitment. let’s talk about the job guarantee you wanted. I just don’t want it to change after I’m gone. my employees will prove to you that they are uniquely able to run this place. Preparation 19 . Let’s talk later. you will have a say in how the employees are treated. they decided to put their price on the table and revisit the issue after a price was agreed upon. and I hired every one of these people. BigManu: We just don’t see a way to give you what you want on this. and he accepted it subject to agreement on the two-year employment guarantee clause. In hopes of pushing the deal forward. Rick: I built this business from the ground up. We still can’t find a way to do it. they will make you plenty of money and more than make up for any “operational” difficulties it might cause you.) BigManu: Okay. What is it you’re afraid is going to happen? Rick: I am convinced that with a two-year time frame. The price they gave Rick was actually more than he had expected. I need to give them some sense of comfort if this deal goes through. (Between negotiating sessions. Working as a division of your company.cannot guarantee to you that ALL of your employees will be retained for two years. I just want them to have a real chance to show you how good they are. BigManu: You know we want you to stay on and manage this division for us. I just can’t go through with this sale.

BigManu: Why don’t we guarantee to you that you will stay for two years? That way. he agreed to allow BigManu to accommodate him without limiting their ability to make business decisions. Rich almost lost the deal. that might work. I certainly want to do all I can until then to protect my people. This wouldn’t have anything to do with your own plans for the future. but we won’t be completely tied to operations as they are now. I’m hoping to retire in two years. to tell you the truth. Let me get back to you.BigManu: We intend for you to stay and become a big part of our company. 20 50 Practical Negotiation Tactics . Surely you’ll be able to “protect” your people if they are as good as you say. Rick: Well. Conclusion By masking his real objective (giving himself two more years as president before retiring). would it? Rick: Well. Once Rick realized that he no longer risked anything at the negotiating table by making his need known. you’ll have a guaranteed “in” to protect your people.

(Think of the showroom tactics used by car dealers. they have the information they need at their fingertips. and go play somewhere! Cybil: Well … Okay. girls. but never to THEIR advantage! Example 1 (Two ten-year-old girls are talking.) Prepare for the negotiations by controlling the setting—to your advantage or to mutual advantage.) Let’s take all our Beanie Babies to my house to trade! Okay. it’s a deal. (thirty minutes later) Bailey: So. such as a hotel conference room. Bailey: Cybil: Preparation 21 . 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. I like the frog. and so on. 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. how can you trade the frog—he’s your best one! Dede: (Bailey’s other sister) Yeah. too. Mother: Hush. they control the breaks and environmental factors. Make up your minds. the frog is everybody’s favorite. Cybil.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.

and other conveniences in the adjoining room. having set up beds. while members of Team B were able to stay fresh. 22 50 Practical Negotiation Tactics . in their own familiar setting. Example 2 Two five-person negotiating teams had been trying to work out a deal for over a month. meals. Both sides desperately needed to settle a property dispute. Conclusion Team A did not realize the practical advantage they gave Team B when they agreed to negotiate in B’s boardroom. non-stop negotiations wore down the members of Team A. After forty hours of negotiating. 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. Team A agreed to a settlement almost identical to the one rejected days before. Team B.Conclusion Bailey. was still going strong. 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. That’s why she wanted to go to her house. They were blamed for accepting the same deal that had been rejected only days earlier. The physical and emotional demands of 24-hour. The chief negotiator for Team A publicly challenged Team B to “negotiate non-stop. The firm deadline was only four days away. until we have a settlement. around the clock. not one member of Team A was chosen to return to the table. About thirty-six hours later. Team A agreed to change the meeting place. Team B had clearly used its home turf to gain a substantial advantage.” The chief negotiator for Team B agreed. as long as they met in the boardroom of Team B. When negotiations resumed in two months over another piece of property.

and they were much lower than this. rather than give them the “advantage. Larry: Just make sure you’re comparing apples to apples. When we got into it. I anticipated much less work. but was shocked at the amount of the bill. Prepare for the negotiations by having an outside authority measure or weigh in on each side’s position. It was twice as high as the estimates Larry received from other plumbers before they started the project. If they tell us that they either Preparation 23 . This uncomfortable negotiation followed: Larry: Will. you are likely to resent them for it and hold out. Larry: Well. and he and Larry have always gotten along. If you think that the other party knows more than you do. Believe me. though. Will: Larry. I did get some estimates from plumbers. Let’s get the guys back in who gave you estimates. these plumbers certainly acted like they understood the work when they gave me their estimates! Will: Tell you what. I would have charged anyone else much more. Larry: But Will. Will is a licensed plumber. and show them the actual work that got done.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. I was kind of surprised at how high it was. Larry had expected to pay him for his time. Example 1 When Larry’s cousin offered to help Larry finish the renovation on his bathroom. When you first told me about your project. based on objective criteria (think property appraisals in real estate). it became clear that all of those pipes had to be pulled and new ones put in. Things turned sour. Larry was thrilled. about your bill. when Will presented Larry with his bill.” This can hold up an agreement and cost you in the end. After all. I gave you my “family” rate.

my first reaction was that some of the investments 24 50 Practical Negotiation Tactics . Had they actually prepared bids on the work. Comparing the estimates to Will’s actual costs would have been counterproductive. and decided to bring the matter up at a Board meeting. because (as Will pointed out) it wasn’t an apples-to-apples comparison. they said. he used his financial expertise to analyze the investments of the college’s endowment fund. The college’s budget officer was understandably offended.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. I have been very diligent about making sure that the fund makes the most money it can without putting us at risk. 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. I find your suggestion to the Board that I haven’t been doing my job right to be very insulting! Stuart: I’m sorry. The estimates would have been higher than what cousin Will charged. Budget Officer: I don’t know what your problem is. they would have had to revise the figures. I certainly didn’t mean to offend you. From a look at the portfolio. while she wasn’t an expert. Conclusion When the other plumbers looked at the work. Larry: That sounds fair. He was disappointed in the performance of the fund. I’ll revise my bill to meet the lowest estimate you get. they had to agree that their early estimates were low. and no one had ever questioned her performance. Settling on the right objective criteria upon which to base a negotiation requires that both parties think through their options. Example 2 After Stuart was appointed to the college’s Board of Trustees.

because she did not have the background in investments necessary to trust such advice. and its resources are limited. Stuart: No problem. how can we identify the right parties? Conclusion The two-month experiment did produce the results Stuart had anticipated.were stale. Now. I have a suggestion. As you know. I don’t question that they were sound at one time. At the end of two months. Preparation 25 . if both of them demonstrate a similar strategy and produce better results after expenses. the college is a private institution. 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. there might be increased risk and some expenses for commissions. In this situation. Stuart: Yes. Okay? Budget Officer: Okay. I find that a more aggressive investment strategy produces a better return. considering commissions and all. and the budget officer was comfortable that the risk and expense of such a strategy was small and worth the effort. I don’t want you directing how they’re going to go. but I want to be involved in the discussions with them about what we’re asking. then you and I can talk about changing our investment strategy. but I think they more than offset the gains. but such a strategy also increases risk and costs more money to administer. but some of these stocks have really lost their value. We just can’t make up losses to the endowment fund without considerable impact on our annual budget. but we can ask them to plan and cost out each move. 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. Budget Officer: Yes.

and (4) different treatment from your sisters! 26 50 Practical Negotiation Tactics . Once you both agree on the list of things to be negotiated. 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. Example 1 Shari. a sixteen-year-old who lives with her parents and three younger sisters. besides washing the dishes every night and cleaning my room? Mother: You could cook dinners. if I give you an increase. not on what you want to spend. baby-sit your sisters. you should each put together a “package” of several items on the list and work out a win–win agreement for these things. not just an allowance increase! There is: (1) a $10 increase. wash the cars. has asked her mother for a $10/week increase in her allowance. Shari: Well. your little sisters will want equal treatment. It will cost me more than $10—about $35 per week. You can’t treat me the same! Mother: Well—so we’re talking about several issues. cut the grass. Shari: I’m four years older than the next-oldest. Mother: That’s a large increase—and we just raised it last year! Shari: Well. (2) a later curfew. and for going out with my friends. Mother: But your allowance is based on what you earn in your weekly chores. (3) more chores. I need more money for clothes and CDs. 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. This strategy can build trust in the negotiation process itself. what else can I do.

Example 2 The union and management negotiating teams opened discussions with a list of 48 demands. but unlike your sisters. which the other children would have requested as well.Shari: Right! Mother: So … I suggest no allowance increase. Shari got the $10 she wanted and a later curfew. while the mother won a Saturday house-cleaning and a night out each week. An allowance increase. The trading of items (where initial demands are discussed and agreed upon) begins. in the first session. you get to stay out an hour later that night. and item #23 (the wellness program voucher). item #11 (the clothing allowance). I’ll pay you $10 to babysit every Wednesday night. And if you clean the whole house on Saturday. The union’s chief negotiator. Union: We will agree to your proposal on item #6 (the number of paid holidays) and item #14 (the new overtime hourly rate). while your Dad and I go out. Shari: (pause) I like it! Conclusion Shari’s mother helped negotiations along by listing all of the items being discussed. Now we have a package deal to propose … Preparation 27 . 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. was avoided. since all of their items were included as requested. Then a “win-win” solution could be determined. opens by proposing the list of items. Management agrees. Management: (after calculating the total value of the five items during a break period) We agree to your package of five items.

thus removing them from the discussion table.Conclusion In most labor negotiations. other trade-offs are proposed and agreed to until only a few items remain. 28 50 Practical Negotiation Tactics . Then negotiations can resume on the remaining 43 items. the two sides will at this point sign and date the list of proposed items.

and do your homework. Would you possibly be interested in selling it? No. Prepare carefully. Bob made it a point about once a month to go out of his way and drive by the man’s house. which turned out to be only a few blocks from his own house. I love this car—restored it myself. (For the next three years. as he left the supermarket. he saw an elderly man get in his dream car and drive away. thanks. and general circumstances under which negotiations take place can substantially impact the outcome. He stopped and knocked on the door. It was nice meeting you. but money doesn’t mean anything to me at this point in my life … Well. That’s a generous offer. Timing is everything! Example 1 Bob Hillard had been coveting a turquoise 1963 Chevrolet Impala Supersport convertible for several years. on Briarwood Road. he noticed a FOR SALE sign in the yard. 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.000? No. say. I live a few blocks from here. One day. just out of curiosity. One day.Tactic 6: Timing Is Everything The exact month. Hi! What can I do for you? I’ve admired your ‘63 Impala for years. my name is Bob Hillard. time of day. the following conversation occurred: Bob: Car owner: Bob: Car owner: Bob: Car owner: Bob: Hello.) Preparation 29 . Not even for. day. Bob followed the man home. As the man got out of his car. $12.

if a seventh vote could not be found by the pro-agreement side. Follow me. resulted in another 6-6 30 50 Practical Negotiation Tactics . as a matter of fact. Well. The board members had met twice before. so I guess I will be selling it. the proposal would die at midnight.Bob: Car owner: Bob: Car owner: Bob: Car owner: Bob: Car owner: Hello! I noticed your FOR SALE sign. and the vote was a 6-6 tie each time. Conclusion While Bob did not achieve his goal during his first negotiation effort. I’ll see you on Monday. A majority was needed to pass the partnership agreement. and wondered if your ‘63 Impala might also be for sale … (obviously not remembering Bob) Well. for tax reasons. (after a careful inspection) It’s a very nice car! I’ll give you $12. had issued a deadline of December 31st. The partner organization.000. Can you come back on Monday at 10:00 a. I can’t take it with me. December 31st.m. that’s a fair price. Then it’s a deal? Yes. Example 2 It was Sunday. Can I see it? Sure.m. beyond which the project would have to be abandoned. 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. and I promise to take good care of it. A third vote at 3:00 p. the timing of his second effort was perfect and it enabled him to negotiate for the car of his dreams. to seal the agreement at the courthouse? Sure. I’m moving to California to live with my daughter.

He planned for it accordingly. in the end.m. the project had been stalled by 6–6 votes. and it worked.. At 5:30 p. Preparation 31 . Then. That effort failed. When the meeting resumed at 4:00 p. The measure passed 6–5 at 5:45 p. timing was everything. the leader of the pro-partnership side heard someone say that the meeting needed to end by 5:30 p.m. 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. during an hour break in the meeting. a member of the anti-project group left the room.deadlock... and the meeting was adjourned.. as predicted. For weeks. Conclusion The leader of the pro-project group recognized that they might have a unique timing advantage.m. A member of the pro-project group quickly called for a vote after the leader gave a signal. Both sides caucused: The leaders on each side met to negotiate a compromise. the pro-project leader told his members to filibuster until he gave a signal and called for another vote.m.

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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 . might step in and help settle negotiations between a union and administration negotiators. Look at the personalities of each negotiator and see which side will be more vulnerable to pressure bargaining (Stage 5). A neutral. as well as their bargaining history and financial and political positions. Before you can do this. cooperative manner. Third parties sometimes have their own hidden agendas. but in practice it will likely influence the whole process. such as Tactic #19 (Make a First and Best Offer). Tactic #43 (Nickel and Diming). and Tactic #10: Make a Reciprocal Buy-Sell Offer) are also useful alternative strategies. decide whether the negotiations should be continuous. 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. if you want to begin in a friendly. The overall strategy chosen does not limit the use of other tactics. After you have evaluated these factors. Identify all outside influences and hidden agendas before you develop your strategy. as it can substantially alter the negotiations between two primary parties. such as a buyer and a seller or a city and its union. then Tactic #13: Set a Deadline or Tactic #11: Have an Expert Witness might be helpful. If you prefer to take a firm and direct approach. for example. Some of the tactics listed in this book are only suitable for single-session negotiations. 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. a third party can serve as a mediator (a legislative body. Tactic #12: Find Common Interests can be helpful. you must first evaluate your needs and those of your opponent. or one-time-only. For example. such as a third-party negotiator. Tactic #33 (Bluff). In some cases.Stage 2: Planning a Strategy he next stage is critical: Choosing a strategy. and Tactic #48 (Walk Away). Be sure you are aware of this at the beginning. uncaring approach (Tactic #9: Control Your Emotions. Are there any outside people who might influence the process.

If there is a significant weakness in your position. “Please make any offer—they are motivated!” The buyer responded. but the inside was a complete turnoff. with “All right. The agent explained that the seller was desperate. The buyer said he wasn’t interested. the seller’s agent called the buyer about the property. 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. The desperate owner agreed. 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). His teenage sons had “trashed” the house. half-serious. By assuming opposing roles.” The agent took the offer to the seller. The buyer loved the location. I offer half the asking price. Weeks later. two people on the team will be more successful because they evoke different emotions from the other side.side is either caught off-guard or (in some rare cases) a negotiator will be able to achieve an unexpected fantastic settlement. 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). and the buyer was able to completely renovate the house and still have a great deal. For example. 34 50 Practical Negotiation Tactics .

If you consider the demand ridiculous. You are not likely to get more than you request. However. so do not underestimate what you might be able to achieve. Anyone buying the house would want to change wall colors or add new carpets. as well. but not so high as to end the negotiations before they begin. and then look at the demand from your opponent’s perspective. it is likely that your opponent will. we’ve put a considerable amount of money into a new air-conditioning system and in redecorating. one buyer shows some interest. but the redecorating is of little value. and just refuses to reduce it. Surely there’s some flexibility in your asking price.Tactic 7: Decide How “High” Is High Your first demand in the negotiation process is the most important decision you will make. It’s a good neighborhood. Your demand should be high enough to give you room to compromise. Buyer: We really like the house. but we simply can’t take less than $160. And I don’t see a lot of difference in the neighborhood. Carol: We really want to sell. so think this through well ahead of time. She has had it on and off the market for the last five years. but quite frankly. Each time. Planning a Strategy 35 . After all. Carol wants $160.000. your request must not be so low that the other party concludes that you are not negotiating in good faith. but certainly not exceptional in any way. with no success. Buyer: The air conditioning might have increased the value of the house. Be realistic. we think $160. but the house has increased in value. Finally. The market hasn’t gone up that much in six years. We also think that the neighborhood has improved over the last few years. six years ago you bought it for $60.000. First.000. Example 1 Carol has been unhappy with the house she and her husband bought six years ago. Carol: Maybe not. her real estate agent told her that they were probably not going to get a buyer because she is asking too much.000 is very high.

Example 2 The law firm of Bits & Bites was a Sioux City institution.000. 36 50 Practical Negotiation Tactics . but they have no idea what the value of their firm’s name might be in this nearby city. The other law firm was prepared to pay $100. or she has unreal expectations. enjoying a statewide reputation for quality representation. In any event.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. Neither Edward Bits nor Edmund Bites. and then $10. The partners are interested in selling the name. as to how you think the name is going to benefit you. We’re curious. though.Buyer: What if we offered you $100. Here’s how the initial negotiations went: Partners: Well.000? Carol: We really can’t take less than $160. the buyer took it as a signal that either Carol didn’t want to sell. When Carol refused to budge.000 immediately. 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. the founders of the firm. 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. we are certainly interested in your request to “buy” our firm name to use in your city. Buyer: Good luck!! Conclusion The buyer expected Carol to counter the $100. the transaction also included some degree of consolidation of the law firms involved—not just the use of the firm’s name. Inquiries to other law firms were not very helpful because in almost all of the instances. Carol drove off a potential buyer by setting an asking price that was just too high. were still alive.

that you anticipate to build a very profitable law firm. Let’s just pretend this didn’t happen. but we get to keep all of the money we’ve received up to that point. Give us some range. Thanks so much for meeting with me.New law firm: We are establishing a partnership of ten lawyers—the top two moneymaking attorneys in each of five local firms. we do. So. that’s just our initial figure. Partners: New law firm: Partners: New law firm: Partners: New law firm: Partners: New law firm: Planning a Strategy 37 . To offer it now would be an insult. Well. we reserve the right to withdraw our permission. We weren’t really thinking about that amount of money. And even though you don’t have an office in our city. it would be impossible to create a new name out of the names of our key partners. then. I’m kind of embarrassed now. we want $500. I guess this is just not something we’ll be able to pursue. I really don’t feel comfortable doing that now. If at any time we feel that you have “harmed” our name. one of these two attorneys carries the surname of the firm they are leaving. starting with the ten partners you describe. Yes. And we. What number were you thinking about? Well. Using the Bits & Bites name can only enhance our profitability. of course. because you are in the state capital and your firm has handled a lot of high-profile political cases. We should assume. (concerned about loosing the opportunity) Wait. In every instance. that is a very high number. We probably won’t be insulted.000 initially. and then 10% of your profits each year for as long as you use the name. expect to pay for that. you have a very solid reputation there. (surprised) Well. because we were not even close to that number.

It immediately dropped the idea. because there was no “objective” criteria available to help them set a reasonable price. Both parties were probably at a disadvantage. since they had initiated the contact. Bits and Bites should have let the prospective firm make the first offer. Either side could have asked for too much. The price they were willing to pay would have indicated what the naming rights were worth. 38 50 Practical Negotiation Tactics . In this situation.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. rather than negotiate.

what’s your price? Andy: $1. Andy: No.400 if the catcher and can are included. Peggy: So. I’ll go home and you can call me if you two can reach an agreement. Peggy: That’s fair. One member of your team acts friendly to people on the other side (the good guy) in order to gain their trust and support. Peggy: I assumed they went with the mower. you’re really moving! I hate to see you leave. And take the leaf-catcher attachment and the gas can. Example 1 So. Andy: I want them… Paula: Go ahead and take them. so I’ll take it. we won’t need it at the new condo. Paula: Go ahead and ride it home. Peggy. while another acts difficult. and I know how you take care of things. only three years ago. Andy and Paula: Yes. I can use them. Peggy: Planning a Strategy 39 . angry. Andy: No. I want to keep those. threatening. since they are sitting out in the driveway with it. etc.200. They cost about $300. I heard that you want to sell your riding mower. Andy and Paula. (bad guy) and implies that his or her side will hold firm on their demands.200! We should get $1. Half what it cost us new. I don’t know what the deal is now. not for $1.Tactic 8: The Good Guy/Bad Guy Routine The “good guy/bad guy” routine is a useful one. Peggy: I’m hearing one thing from Paula and another from Andy. Your opponents will want to avoid confrontation and unpleasantness with the “bad guy” and are likely to be more willing to cooperate with you.

Liz: But we still want to renew your contract.200 will be about right… Sandy: I can’t begin to pay that! Liz: Calm down. causing our reps to spend hours on the road. and your training programs. Sandy. You are located outside our primary service area. And we need to add a clause that holds your company responsible for machine damages. She realized that it put her in an impossible negotiating position. Sandy. we’ve been fairly happy with your responsiveness. Let’s talk. Miguel: Well. We estimated that it has cost us more than $50. firm offer if they decided to continue negotiations.000 in service calls last year alone because your damn people don’t take care of the equipment. the quality of the technicians’ work. your account has taken too much time. Miguel: But not at this ridiculous rate. your rate of $3.Conclusion Peggy thought she was getting the old “good guy/bad guy” routine. Sandy: What? First of all. For the past three years.000 per month is one of the highest in town. And we want to change the 24-hour service response time to 48 hours. we’re here to negotiate a new service agreement. She very wisely recognized the routine and forced Andy and Paula to give her a clear. And cut the training hours from 55 to 20. perhaps even unintentionally. Miguel: I’ve figured $4. 40 50 Practical Negotiation Tactics . Example 2 Sandy (business owner): Miguel and Liz (representatives of a computer firm).

(Three hours later) I’m back. I’m afraid our relationship is over. but Miguel’s right. I’m going on to lunch. and it’s not efficient enough anymore for us to handle smaller firms—especially those outside our region. I’ll explain on the way back to the office. I want to keep you as a customer. with a position he knew was unreasonable. I’ll stop back about 2:00 p.m. Liz.Miguel: Sandy: Liz: Sandy: Liz: Miguel: Liz: No. I hope you can meet my terms. you two? Good news. Conclusion Miguel and Liz used the good guy/bad guy tactic in the classic form: Miguel scared and threatened their opponent. If not. Sandy believed that she was able to avoid a terrible deal and negotiate a fairly good one. Sandy. even though it was far above the previous contract. Planning a Strategy 41 . Our customer base has grown. What can I do? Let’s try to negotiate something reasonable before Miguel gets back. Any luck. Sandy. these terms will put me out of business—I’m a small 20-person operation. Then he left so Liz could convince Sandy that they needed to quietly reach an agreement she could “sell” to Miguel later. Sandy. Miguel! We’ve worked out a deal I think you can live with.

It seems that the rate you are charging me on my home phone is $1. He had. He decided that the best approach was to act indignant when he spoke to the company representative.10 a minute rate at my office location. This will put you at a distinct disadvantage from this point on. 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. but I recently was sold a $.Tactic 9: Control Your Emotions Stay cool. Here’s how the phone conversation went: Customer representative: Mike: Over-the-Air Long Distance. because we have had a sick relative out of town and we used long distance a lot this past month. in fact.00 a minute. 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. 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. Control your emotions and use them to your advantage! Example 1 Mike prided himself on being an informed and educated consumer. he was very unhappy. How may I help you? Hello. The fault was partly his because he did not stay on top of changes. made some very good purchase decisions for his small business. 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. 42 50 Practical Negotiation Tactics . So. such as deals on computer packages and phone services. and might even harden your opponent into an unfavorable position (for you or for both of you). I have a problem with my recent bill and my billing rate. I noticed this.

Customer representative: Let me pull up your account. Mike.I expected the bill to be higher than usual. (beginning to sound irritated. of course it is not always possible to give existing customers some of the “offers” we have out. how would anyone who might only have residential service even know to ask? Well. and I also realize that if I had examined my bill closely. we certainly would have discussed your options. I would have known I was paying too much. But I am able to offer you a $. 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. to begin now. Well. I realize that that might be the rate I started paying when I first took your service over eight years ago. But as a very good customer of yours. 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. Had you brought this to our attention before. Mike: Customer representative: Mike: Customer representative: Planning a Strategy 43 .10 per minute rate on your long-distance service. I would think you would have given me the best rate you offer new customers. I see that the rate you are being charged is the rate we offer for the type of service you have with us. It hasn’t been increased at any time. but this was quite a shock.

Mike: I would imagine so. But I’m looking at a $500 longdistance bill. and I should be treated with more respect! I’m sorry. but I am very angry with Over-the-Air Company. she kept Mike as a residential customer as well as a business customer. I am. there’s no reason for this conversation to continue. a long-time customer of your company. We certainly don’t want to lose you as a customer. after all. controlled voice) I need to talk to someone who can do it immediately. and I want to speak to someone in authority so I can terminate my service. Is your supervisor there? I’m certain that he cannot adjust your account retroactively. don’t think this is directed at you personally. but I can’t do that. 44 50 Practical Negotiation Tactics .10 per minute. In doing so. If you can’t get me someone to talk to. (with a much angrier tone) Madam. 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 $. The latter would not have produced the desired results. I would hope that you would credit my account for this better rate for past service. either. I … (interrupting and in a stern. The best we can do is fix the rate for the future. strategic anger and abusive behavior. between controlled. however. Wait—I’ll get my supervisor. Mike’s willingness to show a measured “flare of temper” brought results. He was walking a thin line. which should rightly be $50.

they would become dissatisfied with their pay and want their base pay increased. Working with fireworks is working with explosives. The owner was afraid that if the mostsenior employees routinely passed up the overtime and the overtime pay. 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. Owner: Now. The most-senior employees want to have the right to refuse overtime and have those less-senior employees take the overtime. Employees’ negotiator: (with a stern voice) You have been saying this for three weeks. Owner: I’m just not willing to let my best people refuse to work the extra shifts during our busy season. lesssenior employees might be at greater risk of injury because they have to handle explosives. The employees’ negotiator finally decided to use “indignation” to break the stalemate. They will be putting the plant AND their fellow workers at risk by not being here. On those overtime shifts. 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. and it’s getting old. 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. that’s just not fair. and you just can’t be too careful. I’ve got to have the employees with the most experience to protect this place.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. and it’s not what we’re even talking about.

he became more reasonable. either the employees are properly trained. or they’re not. (He begins to walk out. Either they are properly protected. The negotiator was also running a risk with his flare of temper. Then you can’t have it both ways. Sit down. though. Until you’re ready to talk about that. After the employees’ negotiator threatened to walk out. No one who takes a job with us can be unaware of that.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. now. Had the owner let him leave. That’s all. What if we were to agree that the senior employees could refuse half of the overtime offered to them. most of them continued to take all the overtime they could get. not at all. The end result was that the most-senior employees did win the right to refuse overtime. But the fireworks business is a business that involves risk. In practice. sit down. You are not addressing the real issue for you: money. or they’re not. the negotiator would have had to find a way back into the negotiations without losing ground. I’m not coming back. But we protect our people. The safety of the plant demands it! (standing up to leave) This is just ridiculous. don’t be so hasty. 46 50 Practical Negotiation Tactics .) Now. All I’m saying is that the most-senior employees have to be on the overtime shifts. but not all? Conclusion The owner was on shaky ground with this one.

3) They can agree to sell the object to a third party. with the highest bidder paying the amount to the other side in compensation for their loss. However. Planning a Strategy 47 . Both sisters covet it. The second party then decides to either buy it at that price and pay the first party. with winner taking all. a well-known negotiations professor from Harvard University. and split the proceeds. I’ll give you 48 hours to decide the price.” is the recommendation of Howard Raiffa. you’re the oldest. 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. A fourth option. has decided to use the “reciprocal buy/sell offer” process to settle this last piece of the estate. the executor of the estate. The first party decides on a price for which he or she will either buy or sell the object to the second party. Susan. I’m willing to pay or let it go for $800. my kids and I looked on eBay and everywhere else and found out that coffee grinders in perfect condition sell for about $500.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. 2) They can flip a coin. called the “Reciprocal Buy-Sell Offer. Mike: Mary Anne. since this one is in perfect shape and it was Mother’s. All the rest of the estate has been divided among the family. you will decide if you want to buy it for that price or receive that amount from Mary Anne (but lose the grinder). (two days later) Mary Anne: Well. Then Susan. or sell it to the first party and consequently receive the full amount from the first party—thus giving up the object. so you set a price at which you agree to buy or sell the coffee grinder. Mike.

I suggest a slight modification to the process. in writing. Two business partners had been working together for ten years to build a successful business. which will bind us to the outcome. They thus were able to determine the highest price each was willing to pay for it or receive for it. Conclusion The “reciprocal buy-sell offer” process caused both Mary Anne and Susan to research the market value of the coffee grinder. to submit a sealed offer to buy/sell the business sixty days from today. Agreed? Abe and Bobby: Sounds good! Let’s draft and sign a written agreement detailing the process. (sixty days later) 48 50 Practical Negotiation Tactics . Thanks for making this last step as easy as possible.Susan: Mike: Well. and then decide how much more “emotional value” it held.” Howard: Since in this case you are talking about a multi-million-dollar business. Both sisters felt that the process enabled them to resolve the issue fairly. After I open the bids. Example 2 Howard Raiffa described a consulting situation in which he used the “reciprocal buy-sell offer” process in his book. 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. I’ll pick it up tonight. Here is my check for $800. Lectures on Negotiation Analysis. You will both agree. I choose to buy it. Both came to Raiffa to help negotiate a settlement. but each partner had grown to dislike the other and wanted to end the partnership (but continue to own the business without a partner). They accepted his suggestion to use the “reciprocal buy-sell strategy.

Bobby. Agreed. 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.Howard: Abe: Bobby: Abe. and we close by July 1st. And I will arrange financing to pay you $180 million to become sole owner. your bid is $190 million. but only if they could become the sole owner. and to close within ninety days. I will arrange to sell him my half-interest for $180 million. Conclusion Both parties wanted to keep the business. Planning a Strategy 49 . Bobby was willing to pay more than Abe to remain sole owner. your bid is $170 million. and both men had carefully estimated the market value of half the business. you agree to sell your half-interest to Bobby for $180 million. Abe. The partner who was out-bid in a fair process received a fair settlement: $10 million above what he was willing to pay.

Based on seating capacity. she glanced at it and immediately deferred to his opinion. It can also work in reverse: establishing the other person as the expert. and the husband felt like he saved them hundreds of dollars. When it came to comfort. and created a spreadsheet to compare the five best-rated couches on their list. The couple decided to limit their selection to those rated “excellent. and forcing him or her to control the discussion of the issue.” and then argue for the frugal alternative.” but there were substantial differences in price—differences that the wife did not see as a problem. the one he wanted (one of the least-expensive) was superior. When he showed his wife the detailed spreadsheet. Looking at these statistics. He thus ended up having greater negotiating power. he decided upon a strategy: First establish himself as the “dimension expert. 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 both expressed an interest in finding a couch that offered the most “interior” space. Conclusion The husband became the “expert” in this situation by doing the homework. 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. 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. 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. This approach can also be reversed: The wife in this situation is a banker. The wife was determined to buy the least-expensive brand rated excellent by consumer publications.

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.” If you spend many hours learning about Health Maintenance Organizations (HMOs). and should therefore handle the problem. you gain an edge when negotiating a new plan for your company.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. 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 . and Point of Service (POS) plans. Preferred Provider Organizations (PPOs). he argues that she is the expert.

Russ: 52 50 Practical Negotiation Tactics . particularly when things seem to be at a standstill. This is done by deciding at the outset what you both have in common: You both want to reach an agreement. That simply rewards your continual squabbling. and so on. and I really love the banana/butternut/ sour cream frosting on this cake. I missed dessert the other night because I had to get to baseball practice. The two boys fought over the last piece of everything. This time. Usually. Example 1 When Russ and Bill got home from school. Be clear on what you have in common at the start.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. 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. she decided to try something different. point them out at the very beginning of negotiations and refer to them throughout the process. and their mother was tired of it. These positive things are part of your goals and objectives. here’s what they said to her: I think I should be rewarded with the piece of cake. and then asked their mom for a chance to negotiate with each other. you both want to complete negotiations by a certain date. like we usually have. and neither boy was very happy. They immediately began to fight over it. the last piece of cake will get thrown away. neither of you want to be embarrassed at the outcome. If this was chocolate icing. I also took out the garbage last week without being asked twice. I wouldn’t care so much. The boys quickly huddled. Unless you can convince me otherwise. you want to reach an agreement that is favorable to an outside party. she made them share whatever it was. When they boys returned. they saw that there was one piece of cake left over from their mom’s bridge party.

m. Residents: Marilyn. The last cake we had was chocolate cake. and better than a fast-food restaurant with late-night hours and a drive-through window. Customers have started to park in nearby apartment lots. We really want you to go back to your original times. your new shop hours have caused your customers to park in our parking spaces. 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 opens her shop at 7:30 a. and her children were in school. That sounds like a wonderful solution. It was the type of shop the nearby residents preferred. and that’s not my favorite either. because there is no parking along the street during morning and evening rush hours. 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. This cake is white cake.m. One day. she got a visit from some of the residents. Now that her children are in college. I helped with the bags without being asked twice. to 3:00 p. so these hours worked out well. and I really like white cake. We realized that if we cut the cake lengthwise. Example 2 Marilyn’s Memorabilia Store was located along the main commercial street of a residential neighborhood. Marilyn originally set her shop’s hours for 10:00 a.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 keeps it open longer so she can attract customers on their way to and from work. I can have the part with the icing and Bill can have the part with the cake and filling. so that your customers can park on the street.

The shared parking arrangement did work out for Marilyn.m. Okay. or so anyway.m.? Residents: We certainly want you to stay in business here. Marilyn: Conclusion Marilyn needed the extra parking. and see if it works. my customers can’t park on the street. It is very costly to have cars towed. I don’t think that would be very good for business. and 6:00 p. I really need that extra income to stay in business.m. I have to convince them to come before work.I’m sorry this is happening. Between 7:30 a. we have to be willing to tow the cars that violate it. rather than after work. If you need to have the shop open more hours. But in order to keep my new customers. if residents haven’t left for work yet. Identifying their shared interests caused the nearby residents and the customers to reach agreement. and I close at 4:00 p. and usually the car is gone by the time a tow truck shows up anyway.00 a.m. and 9:00 a. and is probably empty in the afternoon if they haven’t gotten home yet. and between 4:00 p. if I go ahead and open the shop at 7:30 a. Lets try it. Do you? Marilyn: No. and the residents needed Marilyn’s shop. then we’ll try and accommodate you..m.m.. the off-street lots probably won’t be used by my customers. Most of our residents are gone by 8:00 a. 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. let’s see what the options are..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. The parking lot used for apartment residents is probably full from 7:30– 9. We think they’ll be agreeable to the morning parking.m.m. So. 54 50 Practical Negotiation Tactics . and 9:00 a. But I really am increasing my sales by being open longer hours. And we don’t think you want your customers’ cars towed.

Example 1 Four adult children have gathered at the home of their recently deceased mother. Jenny: Everett: Sue: Everett: Mary: Sue: Everett: Mary: Jenny: Everett: Okay. A few hours? I can’t—I’ve got to leave shortly for the drive home. Then we can sit down at this table at 3:00 p. Deadlines can be imposed externally (such as the government’s deadline to get a tax break) or internally (set by one side. but it can also work against you if you set one that is unrealistic or you fail to plan for it adequately. Well. how should we go about dividing up the furniture and possessions? I can’t talk about it. We just don’t have the time … We’ve got to do this—the house is sold! Okay. Well. and start choosing things. 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). But at Planning a Strategy 55 . I don’t. How can I do that? You all live in this town and you know this house. That will take days! I haven’t been in this house for twelve years. one at a time: the youngest. let’s all take two hours to look around and make a list of things we might want. let’s all take a few hours to look around. 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.Tactic 13: Set a Deadline Be sure you know well ahead of time what the deadline is for completion of negotiations.m. the first. we can each take turns selecting things … Like each tool or dish. etc. A deadline can help you make the best possible agreement in the shortest amount of time.

m. 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. 56 50 Practical Negotiation Tactics . then the whole deal is lost because my company will lose $10 million in tax benefits under a federal law that expires on midnight. David: I understand your concern. can sell or give away what is left. Agreed.. your attorneys know the tax laws. And besides. we all leave. we cannot agree to these development plans submitted by your company until we have reviewed how they will affect the historic buildings. being the oldest. Allan: What! Why did you not tell us this before? David: We never thought you would take three months to get to this point. Okay. Sue. However. and I appreciate your interest in the historic structure. if I cannot carry a negotiated and signed deal to my board by noon on December 31. Example 2 Allan: As the negotiating team for the city. if we are not finished. this is December 29. Allan: Let me confer with the city attorneys.Sue: Mary: Jenny: 5:00 p. All of us must come back before Saturday to take what is ours—agreed? Okay. December 31.

Let’s continue.) I understand the December 31 deadline. we can’t get the reports we wanted in 48 hours. Conclusion Knowing the external deadline gave David a significant negotiating edge.Allan: (One hour later. Planning a Strategy 57 . Obviously. and I don’t like it. He waited to bring it up until it was clear that doing so would help him get the settlement his side desired.

His mother disapproves of his study habits. Unfortunately. Mom: What’s that? Jason: A few weeks ago I lost my workbook. and this usually means having all the right information. and Jason knows he is getting a D in Spanish.Tactic 14: Don’t Always Hide Your Weaknesses Be sure you know what your strengths and weaknesses are. as well as those of the other side. but his grades are good. One day mine disappeared. The objective is to negotiate from a position of strength. I’ll need to buy it again. Now. Have a clear goal in mind AND all the information you need to make your points. Did you buy it? Jason: Yes. so he was able to prevail upon her to let him continue. I bought the second one. Then the teacher went back to the first one. while watching TV. and I missed some assignments. Jason: Mom. I’ll give you money for it. He knows that a D will mean that he will have to change the way he studies. as well as strengths. Control the use of the information. and we used it a couple of times. don’t get mad. but that was actually a different workbook. 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. But don’t lose it again. but remember that both sides have weaknesses. we need to talk. but I have a problem in my Spanish class. There will be times during a negotiation when you will want to catch your opponent off-guard. Mom: I gave you money to buy a workbook a few weeks ago. first-quarter grades are coming out at the end of the week. Mom: All right. and one of the ways to do that is to reveal a weakness at the beginning. before your opponent tries to catch you off-guard. and you can neutralize its effect on the negotiations. We had one at the beginning of the semester that we were using pretty often. 58 50 Practical Negotiation Tactics .

I’m sorry. B. Although his Spanish grade was only a C+. my study habits are okay. he was able to continue to study the way he wanted to. It’s because I didn’t have the book. I think you need to give me the rest of the semester before making me change the way I do my schoolwork. And I know I have to be better about getting in all of my assignments. If I don’t pull the D up to a C or better. And those are hard classes—Algebra. all right. and the D is directly related to my losing the book. Its owners found out that at least three other buyers had been in contact with Jane. or borderline B. Mom: Well. then I’ll agree to make changes. Jason: Spanish is just one class. she trusted it more. Thanks. The work I did turn in was fine. But that Spanish grade needs to come up to a B!! Jason: Okay. His explanation made sense. Conclusion All of Jason’s grades did improve over the next quarter. Example 2 Jane once owned a piece of property she wanted very much to sell. I think I can do that. Pizza Boy was interested and had even made inquiries about the property. Since I missed some assignments. Environmental Science. English. so there’s no reason to think I need to change my study habits. The location was ideal for a convenience store or a fast-food restaurant. I’ll give you more time. All of my other classes are A.(maybe C+). I don’t think you’re taking your schoolwork seriously enough. 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. and since he offered her the information up front. but I think you do need to change your study habits. Obviously. but all three deals Planning a Strategy 59 . I’m getting a D in Spanish for the first quarter—but it’s not because I’m studying in front of the TV. Mom. Mom: Well.Jason: Another thing.

I think you’ll find that this is only one person. I know. What are her grounds for complaining? Jane: She doesn’t have any. Jane: Oh. was that Jane’s neighbor had contacted each of the previous potential buyers and complained about their plans to use the property. The real problem. however.had fallen through. Pizza Boy was prepared for her call. though. Furthermore. which was way below the price they were actually willing to pay. They decided not to fight a disgruntled neighbor. Jane’s up-front disclosure of a potential problem allowed Pizza Boy to weigh the negatives with the positives. there were no unpleasant surprises to stop the deal. But unlike your company. Pizza Boy: Well. A tentative deal was signed. since they were well aware of the negatives. really. she started her campaign to keep them from closing the deal. either. Actually. This is how the negotiations went: Jane: Pizza Boy. and was able to politely ignore her. it’s only the neighbor to the right of the property who has a problem. and it’s zoned for commercial use. The Pizza Boy people figured that Jane’s asking price must be too high or that she is unwilling to negotiate. Pizza Boy: Well. You are a big enough corporation to withstand her objections. the other interested buyers already have businesses in the neighborhood. When she contacts you. Pizza Boy: We’ve checked the property out. let’s assume that you are right. however. I’m very happy you’re interested in my property. we’re not interested in neighborhood fights. I’ve got to warn you—you might hear that there is neighborhood resistance to your putting in a pizza restaurant. When the neighbor heard about the new buyer. The neighbor’s attitude suggested that there would be major resistance in the neighborhood if Pizza Boy tried to put in a commercial establishment. she will want you to think it’s the whole neighborhood. 60 50 Practical Negotiation Tactics . I’m sure. What are you asking for the property? Conclusion Jane told them her asking price.

None is as important as the first one.750–$25.500) M $21.000) Settlement Range ($22. 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.Stage 3: Exchanging Initial Offers any offers and counteroffers are made during a typical negotiation—sometimes even hundreds.750) Target Point ($24.500) Fig.500) Resistance Point ($25. Many negotiators make their initial offer the highest acceptable offer (Tactic #19: Make a First and Best Offer). by Michael R. “Distributive” bargaining (“win-lose” or “zero sum”) is used. as illustrated in the following figure: Seller Resistance Point ($22. 2: Distributive Bargaining Process. such as proposing to continue at the current rate or price. Another common strategy is to start with the status quo. The initial offers of both parties are usually set reasonably above or below what each believes to be the settlement range. 190–192. The negotiator firmly states that it is their best offer in an attempt to gain a nice.000) Target Point ($23. Exchanging Initial Offers 61 . 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. This is a practical starting point that will not anger the other side (and might even be expected). Adapted from Labor Relations and Collective Bargaining. Carrell and Christina Heavrin.000 Buyer Initial Offer ($21. The initial offer sets the tone of the negotiations and reveals something about the strategy of each side. (2004). 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. quick agreement.000 22 23 24 25 26 27 Initial Offer $28.

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. 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). After initial offers are exchanged. usually. 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. these points have set the outer limits. each initial offer ($21. See Tactic #18: Agree on Something As Soon As You Can. and is the range in which most negotiations actually occur. it is termed the settlement point – not the “right price” or “fair price. When the two parties agree to a price within the range.” but the settlement price. the other side does not agree to this value).000. if the buyer’s initial offer was $25.000 and $28. A target point is the desired settlement value a party has set as a goal when negotiations begin. 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. 62 50 Practical Negotiation Tactics . the process quickly narrows to the range between the initial offers. The settlement range is the distance between the resistance points. Two extremely helpful tactics to be used immediately after initial offers are made are Tactic #15: Caucus and Tactic #20: Posturing. Experienced negotiators will begin the negotiation of several items by quickly proposing such a package.In this example.000) is reasonable. thus producing a true “win-win” negotiation. In the example. Resistance points are the maximum or minimum beyond which a negotiator is likely to consider an offer unacceptable (and possibly walk out). thus starting out on a positive note. 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).

the negotiations got out of hand when Shelly’s dad forgot what had been decided. Shelly. Unfortunately. and presumably had an agreement.m. We’ll just have chips and soda. And that’s just my friends from school! I haven’t started Exchanging Initial Offers 63 . Mom: We’re planning on having your party here on Saturday night. call a caucus so both sides can brainstorm new solutions to keep the negotiations going. make use of the opportunity to call for a caucus. so her parents sat down with their daughter to discuss the details.–10:00 p. because it might disturb the neighbors. 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. and I already have 25 names. calling for a caucus gives you a chance to get your team to recommit to a particular course of action. If the negotiations are heated. If the negotiations have suddenly gone in an unanticipated direction. To do so in front of your opponent would obviously undermine your team’s position in the negotiations. A caucus is when a negotiating team calls for a break and leaves the negotiating table to confer in private. If the team is feeling pressure to concede on certain items. so we’ll have the party from 7:00 p. A caucus is certainly called for if individual members of the team become agitated or express frustration with the progress of the negotiations.m. or if a member takes on a role in the negotiations that has not been assigned to them. There are many ways to use this strategy.Tactic 15: Caucus If you are part of a negotiating team. Shelly: Twenty friends? You’re kidding! I’ve just started on my list. Example 1 Shelly’s “Sweet Sixteen” party was coming up. without revealing their ideas to the other side. You can invite up to 20 of your friends. A caucus gives you an opportunity to work out problems with your own team in private. If negotiations seem stalled. a caucus can be used as a break to calm the situation down. We don’t want it to be a late evening. Her mom and dad had already talked about it privately.

we could rent the VFW hall. alone. I guess the VFW will work. I think we can handle a few more kids—how about 35? And midnight sounds okay. In fact. okay.—that’s so “baby. and then the number of kids won’t matter. Shelly. Jerry from down the street is in a really good band that all of the crowd likes. Shelly’s parents reviewed their first planning discussion and went over what Shelly’s mom thought they had already 64 50 Practical Negotiation Tactics . I could invite everyone!! Hold on! I thought we agreed that this was to be a simple party. And they can’t go home at 10:00 p. We’ll get a band—everyone does. Mom! This is my “Sweet Sixteen” party. we’ll call you when we’re ready. That would be great! It would keep everyone entertained. We could play records and you guys could dance. And midnight is definitely too late. (excited) That would be so cool. Your dad and I already talked about this and agreed that 20 guests would be the limit. (with some irritation) I’m not sure. I think the band would be fine.m. That sounds like too many for here at the house. we need to talk.” They would never expect a party to end before midnight. I’m sure we can ask them to tone it down a little. Dad. Time out! Dad. And can we bring in pizza? Or maybe one of those “mile-long” hero sandwiches? I like those—let’s do the hero sandwiches. Oh. (shocked) Jerry’s band from down the street? They’re a punk rock band! Their music is totally inappropriate for sixteen year-olds. It’s special!!! Well.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. (During the caucus. Actually.

and not a huge production. to 11:00 p. and we will need to approve the list.m. Does that mean no presents. is for little kids!! No. but no Sweet Sixteen birthday party decorations. can’t we? No band. causing them to lose control and make compromises they hadn’t intended to make. midnight. Mom’s call for a caucus gave them a chance to regroup and re-state their original objective. That way. That’s so lame. please!! 11:00 p.m. A DJ? I guess that’s okay. When they called Shelly back in.Mom: Shelly: Mom: Shelly: Mom: Shelly: Dad: Shelly: Mom: Shelly: decided. Okay.m.m. But you are limited to 40. But we can have the band. And we’re serving chips and sodas. but your dad and I agree on getting a DJ to play. but we’ll schedule the party for 8:00 p. too? No way!! I want presents!! Conclusion In spite of their prior planning. Example 2 The contract negotiations between the company and the union had been going on for days.) Okay. Agreed. Dad. Your mom and I agree—11:00 p. sorry. All right. we’re going to rent the VFW hall. which was to make sure Shelly’s Sweet Sixteen party was a fun and safe evening. this mom-and-dad negotiating team became unglued during the negotiations. and you can invite more friends. we will be better able to chaperone. her mom presented the revised proposal. The item currently on the table was the company’s offer to give each Exchanging Initial Offers 65 .

Union: (angrily) I’m not presenting this proposal to my people. A lot of employees have spouses who can get health insurance coverage through their work. Union: You’re offering a choice between health insurance and tuition payments? What kind of a deal is this? Company: Hey. and the following conversation occurred. I’m just saying that tuition benefits are sometimes a good substitute for health insurance. 66 50 Practical Negotiation Tactics . Tuition in place of health insurances? They’ll think I’ve lost my mind. What is this. The tuition benefits will encourage the workers to be prepared for new job opportunities. With the cost of college educations so high. many will want to use it for their children’s education. 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 negotiator #2: Please—just a moment outside. Union: Why are you so concerned about new job opportunities? Are you holding out on us? Company: No. it’s a good proposal. The union’s lead negotiator misunderstood the proposal. and thought he was being asked to choose between a health insurance plan and a tuition benefit plan for all members. The company’s negotiator didn’t recognize the misunderstanding.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.

(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. we’ll be back in 5 minutes. the parties returned to the room. Conclusion Negotiator #2’s timely call for a caucus so she could explain the miscommunication in private saved the session. I thought that the contract would cover one or the other for everyone. Exchanging Initial Offers 67 . and the parties were able to complete their negotiations.) I’m sorry.Union: Union: Company: Okay. and I apologize for explaining it poorly. I think that what you’re proposing is a really good idea. Good. Now. Negotiator #1 regained his footing. let’s move on. I didn’t understand that your proposal was to allow each individual member to choose between the health coverage or the tuition benefit.

At a point late in the negotiations. A has gained something of true value and given up nothing he values in return. quickly checked the dealer’s inventory of sport utility vehicles in stock. Salesman: Well. It is a useful tactic in any negotiations. I can go to another dealer and get a green exterior—the color I like best. it’s a great car and a fair deal. when the two sides are only a few dollars apart. we’ve got expenses and we need to make some profit. However. according to the Consumer Reports listing of the cost of the vehicle. and noticed that none of the vehicles have a green exterior. but in reality.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. Salesman: Let me talk to my manager. Hobbs: Yes. you are making $200 profit over the true dealer’s cost. Example 1 The buyer. I know. (Salesman returns with manager) 68 50 Practical Negotiation Tactics . but he makes a mental note to use color as a “throwaway” item. Mr. but … Salesman: But what? Hobbs: Well.” Throwaway items are those things that hold little or no value to you. I’ll go get him. But for this price. you don’t want your opponent to know what these things are. 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. so be sure you present them in a way that suggests importance. not revealing that the item exchanged is a “throwaway. according to my figures.” Party B thinks that A has sacrificed one important objective to gain another. Hobbs. He doesn’t really care about the color of the new vehicle. Here’s how it works: Party A exchanges the item for something of true value.

Example 2 The office supervisor told the three internal sales representatives (Jenny. At the very end of the negotiations.. The three are sitting at a lunch table to discuss the schedule. Conclusion Mr. he brought it up and convinced the salesman and manager that it was an important item to him—possibly even a deal-breaker. All three employees must agree to the schedule. Miguel. 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” it’s not. and seniority will be used to determine who gets to choose the first day. Why didn’t you mention the color before? I didn’t expect to actually buy a new car today (note: not the truth).Manager: Hobbs: Manager: Hobbs: Manager: Hobbs: Manager: We are offering you a great deal. I’ll take the red one for $100 less. Employees will be paid time-and-a half for each of these days. The manager was convinced enough to sacrifice a final $100 for the throwaway. Then we have a deal. The days in question are: Exchanging Initial Offers 69 .. Hobbs successfully chose color as a throwaway item. 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. 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 ..

A second and third round produced the following allocation: Jenny: December 23. 70 50 Practical Negotiation Tactics . each made a first choice of days they will work. They all agreed to their schedules. if they let her choose the two days she will be off and the five days she will work. 27. January 1 Carolyn: December 24. 2 In the first round of negotiation. 30. December 24 Conclusion Carolyn has achieved her objective: She will be off December 24 and 26. December 27. 30. Jenny and Miguel feel that they received something of value from Carolyn: She must work two more days than they must work. it was assumed that each would work three) in order to have December 24 and 26 off to be at home with her children. 26 Miguel: November 25. Carolyn has decided to use as a “throwaway” the number of days she will work (previously. January 2 None of the three are totally happy with the results. and each chooses their days to work: Carolyn: December 27.November 25 (the day after Thanksgiving) December 23. 31. They agree. December 26. December 31 Miguel: November 25. 24. 31 January 1. 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 Jenny: December 23. January 1. but that is a secondary consideration. She proposes to work five days. in exchange for giving up earlier choices due to seniority. December 30. They have decided to start over. She would actually prefer to work the extra days and get paid time-and-a half. 26.

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. can indicate that something you think is minor is really a major concern to your opponent. When the girls decided it was time to talk about the estate. a house valued at $250. along with the cash. Anne: As I see it. it is often helpful to package the items in distinct groups and then deal with each package separately. A reluctance to include one particular financial item with other financial issues. 300 shares of stock in a pharmaceutical company. and a collection of antique furniture. their mom left specific pieces of jewelry and art in the will to each of the girls. 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. three ways. the antiques.000. Anne and her sisters. and the stock and distribute the proceeds. for example. Autumn: I don’t have any objection to selling the stock and distributing the proceeds and the cash three ways. one might package all of the financial issues in one group and negotiate on that package as one issue. The house and much of the furniture has been in the Exchanging Initial Offers 71 . but I’d like to talk about the house and the furniture. The estate’s assets included a checking and savings account totaling $450.Tactic 17: Package Items In a negotiation where there are multiple issues or items to be negotiated.000 with no mortgage on it. we need to sell the house. were faced with the task of selling the house and disposing of their mom’s personal belongings. realizing that the total cost of a deal might make or break the agreement. In addition. Example 1 When their mother died at age 82. For example. Autumn and Angela. they met at the house. Their mother’s will was very clear: the three daughters were to all have an equal share of her estate.

” She gave those things to us. And we’ll fix the house up. 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. It’s a buyer’s market now. In fact. we will have a more valuable asset. we’d get a lot more for them. it’s a magnet for vandals. Autumn: I think its awfully soon to be making these kinds of decisions. Frankly. Anne: Okay. Angela: I live close by. and use it to fix the house up? Then when we make a decision. and if we wait a couple of years.000 in the bank and distribute the remainder three ways. What would you think about agreeing today to distribute the cash and stock three ways. Autumn: Sounds good to me. I’d like to talk about the art works Mom left each of us. for years. I’d really be interested in talking a trade for some of them. we’ll discuss again what happens to the house and the antiques. Why don’t we leave some of the cash in the bank. We’ll split the stock three ways. Angela: And we can talk about the art and jewelry? 72 50 Practical Negotiation Tactics . I’d like it all to stay in the family. Anne: But that means we have to continue to take care of the house and its contents. she’s free to do so. and letting everything else wait for another discussion. Angela: Now’s not a good time to sell either the stock or the house and antiques. Anne: I’m not sure I’m comfortable talking about trading the jewelry and art Mom left to each of us. If we want. There was a reason why she gave us what she did. don’t you think? Angela: Maybe. but the operative word is “give. So we agree: We’ll leave $30. we’re really free to do with them what we want. and now that we have them. With no one living here. we can sell ours. Mother was born here and grew up here. so I will be able to keep tabs on it. If Angela wants to hold on to her stock.

the antiques. 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. The following tasks needed to be a accomplished: establishing basic pay schedules. but I’m making no commitment to trade.Autumn: I can agree not to do anything with the jewelry and art Mom left me before we talk. Angela: That’s fine. sick. health benefits. deciding whether there would be annual wage increases as well as merit increases. tuition benefits. Conclusion Autumn’s suggestion to package the money and stock because they can be easily divided by three made agreement on those items possible. Employees: We’ve got a lot of items to cover. vacation. and the art works—will be more difficult. The third: Ben- Exchanging Initial Offers 73 . Several issues also needed to be addressed: the ability of employees to move up through the organization. funeral. including benefits for partners in non-traditional relationships.). The second: working conditions (work schedules and promotional opportunities). May I suggest that we divide the items into three areas. what kind of paid leaves there will be (personal. etc. the jewelry. The negotiations on the other items—the house. and the assignment of the limited number of parking spaces. and deal with one area at a time? The first: Wage issues (pay schedules and the annual and merit raise issues). deciding to base the increases on a percentage or equally distribute the funds for increases among the professional and clerical staff. Anne: Same with me. and establishing a work schedule to accommodate evening and weekend clients. Waiting to make decisions on those items until some time has passed gives the women an opportunity to look at a number of options.

And paid leave clearly belongs with Wage issues and should be discussed with the pay schedules. Later negotiations were difficult. Executive Director: Sounds like a good agenda. tuition benefits. I think it also makes sense to include tuition benefits in the Working Conditions category. 74 50 Practical Negotiation Tactics . and the parking spaces). Executive Director: I think it’s a good idea to group items together. but I’d change your list. 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. That’s a program that can have a lot to do with how employees are able to increase their worth to the organization. that makes sense. as well. Also. Employees: I’m surprised that you would take merit increases out of a general discussion of wages. Employees: Okay. So I’d like to see us get through the wage issues quickly and then move on. to be honest with you. we are an agency supported generally by public funding. 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. the paid leave categories are pretty clearly defined. paid leave times. Wages should not include merit pay raises. Let’s get started. Executive Director: Well. I would include that under the Working Conditions category. so there’s not going to be a lot of discussion on what our pay schedules and annual increases can be. because they’re really an incentive for better performance. but the parties were able to come to agreement because the wage issue had been resolved.efits (health insurance.

Kathy borrowed more money to go to graduate school full-time. and she agreed. An initial agreement. You can also make an effort to agree on something your opponent offers early in the negotiations. It was her idea to buy the house and go into debt to furnish it. Example 1 Tim and Kathy. and both have good jobs.Tactic 18: Agree on Something As Soon As You Can Negotiations are more successful if both sides can agree on something—anything—almost immediately. Kathy was asked by her employer to relocate to another city. but don’t think you’re going to stick me with all of the mortgage and credit-card payments. too. Kathy’s first job paid more than Tim’s because she had a graduate degree. Exchanging Initial Offers 75 . It indicates to your opponent that you are a reasonable negotiator. without suggesting any changes or modifications. and might not even be able to keep the house. They met and married in college. They have no children. rather than disposing of assets. The couple hoped to do the divorce without involving lawyers in order to save money. The discussion might become very heated. They were in the middle of buying a house. Their “property division” was mostly about dividing their debts. Tim worried that he would be stuck with all of the debt. because Tim felt that Kathy had taken advantage of him during the marriage. Now. They had also furnished their house on credit. after a brief marriage. You signed those papers. Tim: You might be leaving town. Tim began working right after graduation. and they were making payments on school loans (for his undergraduate degree and her undergraduate and graduate degree) and on two cars. and that you are entering into the negotiations with the intent to reach agreement. Consider starting things off by presenting your opponent with a proposal you feel confident can be agreed upon without argument. no matter how insignificant. sets the stage for mutual respect and communication. with her promotion sending her out of town. are divorcing.

we would have paid down our school loans more. and you got your sports car. a wholesale art dealer. Example 2 ABC Company. I got my convertible. yes. I don’t intend to “stick” you with anything. hold on. as you remember. They also agreed that Tim wouldn’t have to pay her that amount for five years.Kathy: Hey. The first thing I’d like to talk about is what we are going to do about the cars. I can hardly argue with that. If both of us had been working the year I went to graduate school. I think that makes sense. I say we agree to transfer the convertible loan to me and you take over the loan on the sports car. The monthly payments are about the same. 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. Kathy: Now. we decided to each pick out our “dream car” and that we would not overrule the other’s choice. Tim: Okay. Frankly. What do you want to do about them? Conclusion Having agreed to two items very quickly. When we bought them two years ago. Tim: Well. about the house and furnishings.. Kathy: I suppose we should look at the school loans next. an art gallery. 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. and he could pay it in annual installments over a five-year period. Okay. as long as the cost was approximately the same. and XYZ Co. ABC usually uses UPS 76 50 Practical Negotiation Tactics . I think it only fair that I take over repayment of all the school loans. even though the convertible is being paid for through a 48-month loan and the sports car through a 36-month loan.

ABC’s position was that the artwork was fine when it left their location. The artworks filled four boxes. However. There was no indication that the gallery’s electricity had gone out over the weekend. The three parties agreed to hold a conference call late Monday afternoon to try and resolve the ship artwork. and the boxes showed no external damage. and we will continue to discuss who is liable for the three water-damaged works. it was obvious that the art in one of the boxes had suffered considerable water damage. We’ll expect you to pay for the 12 works that will be in your show. and arrived on time and apparently in good condition. or else the box was damaged in XYZ’s warehouse. Unfortunately. ABC refused to pay WeCanShipArt until it received payment from XYZ. but XYZ asked specifically that a little-known company specializing in shipping art known as WeCanShipArt be the shipper. The other times this happened. 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. XYZ’s manager failed to open the boxes or remove the artworks. water from the gallery’s air conditioning unit pooled on some of the surfaces of the warehouse area. WeCanShipArt claimed that the boxes were not damaged in shipment—the artwork was already water damaged. and that XYZ needed to either go to the shipping company or its own employees for compensation for the damage. but only if you let us ship it UPS. 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. XYZ: ABC: Exchanging Initial Offers 77 . XYZ decided to cancel the promotional sale that was to start on Wednesday. ABC: Before we begin. and began preparing to return all of the artwork to ABC. They arrived right before the holiday weekend began. Holiday weekend storms caused the electricity to go off for different periods in different parts of the city. when the boxes were opened on Monday. You can get the three new artworks here so that we can hold the sale as scheduled? Yes. XYZ contacted ABC immediately.

XYZ: Agreed. that’s okay with me if it’s okay with XYZ. we’re ruined. If we don’t make the deadline. and if word gets out that you think it was. the three companies were able to agree to undertake an investigation within each company to determine when the artworks were damaged. XYZ: Okay. The artwork was not damaged while in our control. 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. They also agreed that if the investigations are not conclusive.m. how do we resolve the issue of the damaged artworks? Conclusion ABC’s decision to offer a solution to XYZ’s immediate problem. regardless of where the original three artworks were damaged. ABC: Well. they will split the cost of the three damaged pieces three ways. at its financial risk. WeCanShipArt: Wait a minute. Having reached an amiable solution to the immediate problem. generated a like offer from WeCanShipArt and a reasonable response from XYZ. And we’ll eat the cost of shipping. You can’t just ignore us. I can’t see how I can refuse that. 78 50 Practical Negotiation Tactics . Now. We can guarantee that we will deliver the new order in perfect condition by 5:00 p.

but if you’re interested. Ann: That sounds great! I don’t want this to affect our friendship. no hard feelings either way.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. I know you and Jeff said you’d like one because you have about five acres. Exchanging Initial Offers 79 .000 for it six years ago. period. Why don’t you give me a price? Colleen: Oh. Conclusion Ann and Colleen did not feel like negotiating over the tractor and running the risk that it might affect their friendship. I don’t want to quibble. consider using the “First and Best” tactic. we’ll sell it to you. we plan on selling our Ford tractor when we move. What do you want for it? Colleen: Well. and it came with the bush hog and the leaf pick-up. 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. Ann: Well. Okay? No quibbling. we paid $5. You must mean what you say and be prepared to walk away from an unacceptable offer. I don’t have any idea. Jeff spends many hours mowing the yard every week. Ann: Thanks! We really need one. 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. Example 1 Colleen: Ann. 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. The “first and best” tactic enabled them to settle the matter easily. We plan to put an ad in the paper next week. and even more hours in the fall picking up leaves.

because it was several thousand dollars above what he decided was the minimum it would take for him to change employers. He also started the job with a positive working relationship with Vernon. I’ll get back to you in three days.Example 2 Archie: Well. on this slip of paper. and I’ll take 48 hours to consider it. Okay? Vernon: That sounds good. I expect a fair increase. (three days later) Vernon: Archie. and you know my current salary. no questions asked. I think we have agreed to all aspects of the job offer. I’ll discuss it with my wife and get back to you in 48 hours. how about you making your first salary offer your best one. I came up with the best salary offer I can make. as we agreed. Archie: Thanks. We want you. who admired the way Archie negotiated his starting salary. So. 80 50 Practical Negotiation Tactics . I’ll either accept it or reject it. but I don’t want to start off in a new job by negotiating with my boss! So. except salary. Here it is. I don’t like negotiating over salary either. but we have internal budget considerations and we must consider equity with other employees. I want the job. Conclusion Archie accepted the job offer.

you know that Sally is really looking forward to this. Present your position and demands as if yours is the only logical position. since Sally is going away to college next year. Sally’s Senior Prom is coming up. I’m the only junior in the crowd.) During the posturing phase. It might be your only opportunity to explain your position without interruption.” As you know. 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.” but it is also a source of valuable information that can help the negotiations proceed to a successful conclusion. This is called posturing—presenting your position strongly and completely.m. First we’re going to dinner. and we’ve made a lot of plans with our friends that I need to talk to you about. then the prom. but he figured “all night” was relative. we’re not going to be dating exclusively after this summer. Fourth. curfew would be okay. look for indications from your opponent as to what he or she believes is their best position.m. you only have one Senior Prom in your life. and in a favorable light. Second. He and his date had decided that as long as they could join their friends for breakfast after the prom. First. we’re all meeting at Donna’s so we can share a limousine. you will probably have to modify some of your positions if you are to reach agreement. Example 1 Kevin. Exchanging Initial Offers 81 . Third.Tactic 20: Posturing You might have to do a little acting at the beginning of the negotiations. (Once negotiations get underway. Posturing is indeed “acting. so he knew that he would have to sell them very quickly. and then to breakfast at “Timothy’s. Kevin had “negotiated” with his parents before. so the prom is a pretty big deal to both of us. and ignore or deny any weaknesses in it. He knew his parents would not agree to let him stay out all night. 17 years old and a junior in high school. Kevin: Mom and Dad. and it really wouldn’t be fair if I wasn’t able to go along with the rest of the group. a 4:00 a. was dating a senior.

From where we sit. the limousine will take us back to Donna’s house to spend the night. this prom is a one-night thing—a dance that is dressier than you’re used to. 82 50 Practical Negotiation Tactics . we’ll have to get in our car and drive home very early in the morning. you have been fairly good about making your curfew—most of the time. We’ve heard that they allow kids to drink. remember that when you started dating Sally and hanging out with an older crowd. I don’t drink or do drugs. Second. We think that after the breakfast. and we’re just not happy about that.Mom: Kevin: Mom: Kevin: Timothy’s usually isn’t open early in the morning. so there will be plenty of chaperoning. and the crowd we hang with doesn’t either. We are. Donna’s parents will be there. 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. That’s asking us to believe a lot. You realize that this could be as late as 4:00 a. but it should not be oversold. they will be open for the Prom crowd only. we know. You make some good points. Things can happen on a night like that that adversely affect you for the rest of your life. I’ve never missed my curfew. Donna’s parents are not as strict as they could be when a bunch of you are there. but because the owner’s daughter goes to Sally’s school. happy about your plans to use a limousine so you kids aren’t driving. That’s the deal then? Okay. So. Also. And. Yes. of course. We’re just not convinced that your entire group has been alcohol. which could be dangerous. I think I ought to be able to stay out all night.or drug-free.m. I know you trust me and that I’ve earned the trust. I believe you can pay a little more and have the limousine bring you both home. you and Sally need to call it a night (or really a morning). And if we don’t spend the night. However. yes. but to use that as a reason to stay overnight doesn’t make sense. we told you that we would not be changing our rules to accommodate that older group. Sally’s parents trust us and have already said yes to her. Fifth. for sure. Finally.

Sally and Kevin had a wonderful night and were quite happy to have the evening end at 4:00 a. Tencro has approached the state’s Office for Business Incentives to see what. and had this conversation: Tencro: We really want to keep our company here and expand it. one-floor operation would be very profitable. If we can expand here. because his parents could not disagree with such wellthought-out ideas. Tencro: Let me just remind you of what our company means to this state. other companies have received incentives and Tencro certainly wants all it can get. Nevertheless. The assembly plant is out-of-date. but was disappointed to learn that they offer very few incentives.m. we’re of course interested in keeping you here. Tencro is not going to leave the state. Example 2 Tencro Company decided to modernize and expand its business. the state can do to help the company expand and rebuild. we’d be adding at least 500 new jobs. With 800 employees. and a new. We need to find out what you’re willing to do to keep us here. and it will grow—everything from sub-parts manufacturing to the shipping business we generate. regardless of the incentives. The spin-off business from our operations is huge. but it could easily add another 500 if it had the space on its assembly line. Also. but there are limited options available. Tencro approached the state’s Economic Development Officer. The company approached other states to see what incentives they might offer Tencro to locate in their state. EDO: Well. we are one of the largest employers in this county. our Exchanging Initial Offers 83 .Conclusion Kevin’s strategy to hit his parents with all of his very good arguments at the outset gave him an advantage. if anything. It currently employs 800 people. and it does not really need any help. but we’re getting a lot of interest from other states willing to help us relocate.

We think that we’re the reason XYZ and ABC companies located here and we believe they are likely to leave if we do. We do want you to expand your plant. additional police. There are more residents in the state demanding more public services: road improvements. and traffic signals. We need help in the cost of attracting and training the new 500 employees.employees pump money into the economy by buying houses and cars. we will need the two-lane entrance expanded to four lanes. while we value your company as a long-time corporate citizen. etc. We need a rebate on the local income taxes to help pay off the loan to build our new building. We can’t possibly give it away to other companies coming in behind them. or else it will not be cost-effective for us to stay here. EDO: The state has very limited resources to pay for economic development incentives. And. Also. We need certain incentives. paying taxes. and we’ve had to divert funds from business incentive programs over to basic services. so we’d have to have it free here. 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. now that the economy has improved. And we’ve been offered land practically free in the neighboring state. 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. schools. We 84 50 Practical Negotiation Tactics . any plan by the state to build housing that is subsidized by tax dollars will draw a great deal of criticism. etc. what do you have to have? Tencro: We need a new location—20 acres or so—to build our new plant. The industrial park land can’t be “free” because we have agreements with other companies that had to buy the land. if the new location is at the local industrial park. and we are willing to offer some training dollars for the new workers. That might involve the state building housing for them at a reduced cost and providing them with some retraining.. EDO: Well. Certainly.

let us go back and take another look at our options. Tencro was able to pay off the borrowed money in half the time. the training and the new road improvements were all the incentives offered to Tencro. Other than that. Tencro bought land in the industrial park. borrowed money for the new building. The new set-up was so profitable. and the state did end up participating in a housing subdivision in order to keep the purchase price down for the new employees. and hired 500 new employees. EDO: Get back to us as soon as you can. but for the fact that each party did its homework and was aware of the true facts. However. Tencro: Well. we’re just not in a position to offer more than that at this time.agree that the road into the industrial park must be widened and a traffic light installed at our expense. Exchanging Initial Offers 85 . Future negotiations continued. Conclusion The posturing by both sides could have caused the whole negotiation process to bog down.

thus requiring greater concessions on both sides. never give them their asking price. Sue: Let’s offer $325.. That’s a fair price.000—what they paid for it.000 this year. of course. 2) Start out with an old number. Their realtor told them that it sold for $290. Example 1 Jay and Sue are looking to buy a house in a specific neighborhood because it has a good school system.000 two years ago. then $320. Avoid giving away too much at the outset. Jay: No.000. or 3) Make an unrealistic offer (i. The sellers must be willing to come down a few thousand … Sue: Well. and that two similar ones on the same street sold for $330. think things through before you make or accept the first offer. is the most (or least) the other side will accept.000 three years ago). offer $150. and you cannot withdraw it in good faith. We don’t know how anxious they are to sell or if they know the market. which can be very useful). but you feel cursed because you gave away too much. and houses in this area sell fast.” The perfect first offer. at minimum cost.) To prevent this from happening. Jay: No. particularly if you don’t know the other party’s “settlement range. before someone else does.Tactic 21: Avoid the “Winner’s Curse” It is often quite difficult to make the first offer.000 and $337.e. The other party will probably come back with an equally ridiculous offer. 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.000 for a house that sold for $185. 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. They found one they both like that lists for $325. 86 50 Practical Negotiation Tactics .” (You have won a settlement.000.000. such as last year’s price. because you have settled quickly. Let’s low-ball them and offer $290.

realizing they offered too much.Sue: Don’t be crazy. Lyle Foxworthy. (Bob and Frank meet privately to discuss the situation. Frank: Me too. then let them make a counteroffer. was very impressed with their presentation. If. They outlined how they would develop a new employee performance-appraisal system. the sellers obviously would have accepted and Jay and Sue.) Bob: I’d do it for $3. That’s an insult! Jay: Well. but who knows what they are planning on offering. as requested by the human resource director. Exchanging Initial Offers 87 . Sue: Then you do it.000. since they had already bought another house.000 total. 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. I can’t tell our realtor $290. Both parties felt that they made a good deal. as Sue had first suggested. the company president.000 for each of us—$6.500—half the difference! Sue: Great. Lyle: So what’s your price? Bob: Can you tell us what you have budgeted for this project? Lyle: No. Let’s accept it! Conclusion Jay and Sue avoided the so-called winner’s curse by making a low (but reasonable) first offer. (the next day …) Jay: They made us a counteroffer of $307. they had offered $325.000. Give us your lowest price. and the offer was based on fact: the prior negotiated price. The buyers were very motivated to sell.

Lyle: Okay. I’m out of time.000) their minimum price of $6. Conclusion Bob and Frank avoided the winner’s curse by forcing Lyle to make the first offer.Bob: Lets make them give us a price! (Bob and Frank return to the meeting room. What’s the cost? Bob: We want the job. 88 50 Practical Negotiation Tactics . and it would not apply. That is all that’s left in this year’s training budget.000. but we can’t pay more than $18. We’ll do the job. We’ve waited long enough. and you two come highly recommended. but we know you must have an amount budgeted for this and we are willing to do it for that amount. They also ended up getting three times ($18. 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.000.) Lyle: Okay. Bob: That’s fair.

T Making Counteroffers (The “Give and Take”) 89 . Wait to counter (see Tactic #24) because this will give the opponent the sense that you are serious about bargaining. In some negotiation situations. but possibly of different values to your opponent. which is often the case. do not dismiss it because it is not all you want. Also.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. which would most likely weaken their position (see Tactic #26: Keeping Secrets). in fact. is likely to pull away from the table. labor negotiators. and remain open to offers and options that you did not originally expect (see Tactic #30: Always Leave Room for Dessert). and do not flatly reject it because it is not your offer. Skilled negotiators such as salespeople. carefully evaluate an opponent’s offer. It has often been said that the key to negotiations is to be flexible (see Tactic #25). what appears to be an outer limit of the settlement range when the process starts can. Instead. 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. the other party. Expect that the “total pie” will be different from what it was at the outset. Use a prolonged period of silence (see Tactic #29) to convey something at a strategic moment. be enlarged (see Tactic #27: Expanding the Pie). and attorneys use tried and true tactics in giving and receiving offers. because if you do not at least appear to be flexible. 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. seeing no common ground. Experienced negotiators seldom reveal their exact priorities and objectives. This can produce a negotiated solution without giving up your priorities (see Tactic #28: Fixed Alternatives). When the other party makes an offer.

The week he would be home would be the first week of school for Sydney. while it may be your best option. completed his first year of college and came home for the summer around the middle of May. and quicker. 19. Option 1: No family vacation. Option 2: Mom and I go before Jerry leaves on August 1. what say you. and that he already made plans to visit with college friends on the East Coast for the two weeks after that. so you can go without me. finished his freshman year of high school at the beginning of June. Example 1 Jerry. 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. His brother Sydney. He planned on being home for one last week before having to pack up and go back to college. Dad.Tactic 22: Propose Multiple Options The shortest distance between two points is a straight line. it looks like we can’t really plan a vacation for all four of us. 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. In mid-June. gives your opponent little maneuvering room and might even prolong or damage the negotiations. Proposing multiple ways to reach your goal can get you to the same place. Here’s the discussion that followed: Mom: Well. Jerry had already started his summer job. Jerry will be here. We have four options. except when you’re negotiating. 15. 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. Let’s see what we can work out. Sydney. Dad: Wait a minute. Proposing only one solution to a problem. their parents began discussing a family summer vacation. 90 50 Practical Negotiation Tactics . Jerry pointed out that he is expected to work until July 31st. I don’t want to give up on a family vacation that quickly.

Example 2 Joe is an attorney whose job responsibilities include managing three other attorneys (Andrea. but it should work out all right. And I miss orientation and start school the next day? Dad: That’s an option. we meet up with him that week for vacation. Andrea considers Making Counteroffers (The “Give and Take”) 91 . one paralegal. Sydney: Don’t I start school that week? I don’t want to miss school. but he can discharge employees for poor performance. Classes don’t start until Friday. Bob. Jerry: My friends and I have plans through Saturday of that week. when we come home. you have a half-day orientation on Wednesday. we could return home on Thursday and still get a week’s vacation. actually. Mom? Mom: Let’s do it. Then Jerry joins us until Thursday. Mom: Well. Sydney: So what you’re suggesting is that the three of us are on vacation from Thursday to Sunday. Conclusion The goal was to have a family vacation. and one secretary in his litigation unit. Joe has no say in who was hired by the corporate legal office to work in his unit. Option 4: Jerry doesn’t return home the week between his visit to the Northeast and returning to school. they were able to make that happen and not interfere with or argue about the merits of each other’s individual goals. and Carl). By proposing numerous options. if it’s okay with Jerry. It’s not perfect. If we started the vacation on a Thursday. Jerry: Okay with me. so I won’t be able to meet up with you until Sunday.Option 3: Mom. and Sydney go to South Carolina before his school starts. Sydney: Okay. me.

Joe: Andrea. 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. Before you start. isn’t it? But I don’t think just moving you really solves the problem. It was just a comment. Andrea: You didn’t list moving to another unit as an option. Joe: That’s all well and good. let me say that I’m handling the missed deadline on the pleading. Joe: That is certainly an option. and resents any attempt by Joe to supervise her work. Her job performance was acceptable. so Joe took a “hands off” approach. Joe: Come on. 92 50 Practical Negotiation Tactics . We have a formal procedure that you just don’t like to follow. however. I really see your options as follows: You can leave the corporation. You had no authority to agree to settle the Stites case without clearing it with me. she made a two glaring errors in judgment. Andrea: Wait Joe. 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. Andrea: Well. we have a very big problem. In the last month. It is to the corporation’s benefit to address that problem here and now.herself to be a professional. you have a job-performance problem. and I don’t see why we don’t have more independence. but it doesn’t solve the problem—nor is it the only problem. Andrea. To put it as bluntly as I can. rather than to put it off on someone else or for some time in the future. The attorney for the other side has agreed to give me the additional time to file it. If you don’t like the way I do my job. you know that wasn’t an okay to settle. which forced Joe to take action. 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. Andrea: We’re hired for our expertise.

my goal is the same is yours: to create an environment where you can perform to your full potential. by Leigh Thompson.Joe: That could be an option.) Making Counteroffers (The “Give and Take”) 93 . (Adapted from The Mind and The Heart of the Negotiator. I hope we can work it out. and propose an acceptable alternative. then it would save face for me if it comes with a move to another unit. But in fairness to our mutual employer. rather than my staying here. the needs of the corporation have to come first. or I would advise your next supervisor to put you on a very formal approval program. in fact. Believe it or not. If that option is okay with you. lets talk to Bill about the move. improve her work performance. Andrea’s move and subsequent “approval” regime did. I want to stay with the firm. If you are convinced that I have to undertake an “approval” program. but it would still require some change in the way you work: either a demotion. Joe: That’s fine with me. Conclusion Joe’s willingness to offer more than one solution gave Andrea a way to look at this unfortunate situation as an opportunity. Andrea: Well. It also changed her attitude about being both a professional and a team player in a corporate office.

then the contractor has lost $500 in revenue. 94 50 Practical Negotiation Tactics . This approach is an important tactic. then those which can be easily traded.) Yes. and a home theatre. if a buyer negotiates a $500 reduction of a contractor’s bill. They each agreed to list the items they want and then to negotiate whether or not they will be purchased.Tactic 23: The “Win-Win” Approach (Identify Issues as Compatible. let’s see if there are any items we both want. Exchange. (She looks over the list. or Distributive) The “win-win” approach to negotiations is a basic tradeoff strategy of seeking maximum gains for both sides.000. Let’s agree to those things. These items often involve money). we both want the sod.500. With distributive items. because it can speed up negotiations and produce a more desirable outcome. 2) exchange items (those that can be easily traded off—one item for another item of equal value. the fencing. Brooks: Right. etc. that’s $9. Let’s see. only those with polar-opposite interests that must be divided. Maureen: First. In essence. They have a fixed amount of money—$14. Wow! We are off to a good start. Example 1 Brooks and Maureen Wilson have just finished building a new home.). For example. 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). and finally. three strategies are used. thus making it necessary to find a middle ground on each. It is used only when each side has several demands. one person’s gain is another’s loss—zero-sum. 3) distributive items (those items for which the two parties have exactly opposite interests. 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. They both agreed that this is the maximum they will spend on “extras” before moving in.

Can we split it evenly? Brooks: Okay.# 1 Sod Item Cost $1. I’d like to spend some of it on lighting upgrades.500 $2.000 $5. that makes sense. I’ll trade your sidewalk and trees for my whirlpool bath.000 $1.200 $200–$2.000 $2. Maureen: No. We have $1. and we both get things we want. These are all permanent immediate needs. Making Counteroffers (The “Give and Take”) 95 . $750 for lighting and $750 in the bank.000 $3.000 $500 $1.000 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. which takes another $3.000! Brooks: Good. which I’d like to keep in the bank.500 $5.500 $500 $1.500 left.

even in difficult years. The combined lists total thirteen different items: Desired Outcome No. 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. Wage Increase 4. both sides exchanged lists of initial demands at their first meeting. This year.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). Profit-Sharing 5. 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. Length of Contract 2. Pension Increase 3. During that time. management and union negotiators found that a “winwin” approach to negotiations worked well. 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). 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.

and removed from the table. No Strike/No Lockout 10.Compatible rent provision 15% Exchange 15% No layoff provision $100/month Exchange Exchange Exchange In their second meeting. Clothing Allowance Based on senior. (#5) a new drug testing program. they began to trade off the exchange issues of similar value and nature. Shift Differential 11. Next. and the union clothing allowance proposal (#13) for the management funeral leave proposal (#8). 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.Voluntary ity 2 days Continue current provision 10% 10% No provision $50/month 3 days Continue cur.6. Job Security 13. one Making Counteroffers (The “Give and Take”) 97 . Finally. eleven of the thirteen original issues to be negotiated had been agreed to.Distributive rent program co-pay Exchange Exchange 7. Overtime Assignment 8. Health Insurance Employees pay 20% Continue cur. the negotiators agreed that they had compatible positions on three items: (#1) length of contract. Paid Funeral Leave 9. First. They proceeded to draft the language to settle these issues. the management profit sharing plan (#4) was exchanged for the union overtime assignment plan (#7). they exchanged the economic issues of approximately equal cost: the union pension increase proposal (#2) for the management shift differential (#10). Next. signed. Because they held opposite positions on these issues. At this point. they accepted the union job security proposal (#12) in exchange for the management subcontracting proposal (#11). and (#9) to continue the often-discussed no strike/no lockout provision. Subcontracting 12.

Third. The tactic offers several advantages: First. They then identify each as compatible. you can use the process to settle many of the other issues on the table. negotiations begin on a positive “win-win” note. if both parties start from reasonable positions. or distributive so that the negotiations can begin in an organized manner. These two distributive issues—wages (#1) and health insurance (#6)—were the most challenging to settle. A middle ground often must be found on each of these distributive issues if you are to reach an agreement. when you agree on the items where both parties have similar desired outcomes. Conclusion This tactic is simple. 98 50 Practical Negotiation Tactics . when you exchange items so that each party achieves their desired outcome on one of the two. Sometimes the classic “split-the-difference” method is helpful in locating a middle ground. exchange. but it can be very effective when a negotiation situation involves several issues.side’s gain is the other’s loss. Both sides first agree that all issues to be discussed will indeed be listed and openly discussed. 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. Second. but a middle ground was eventually found on each and negotiations ended.

Let me finish. This isn’t high school. they decided to establish “room rules” so that they would both be comfortable with the room assignment. will make your opponent feel good about the process. Example 1 Jasper and Rob met when they were assigned to the same dorm room their freshman year in college. so I can study. do not offer a counterproposal right away. Jasper: Finish or not. A counterproposal delivered too quickly tells the other side that you haven’t or won’t even seriously consider their offer. Rob: Making Counteroffers (The “Give and Take”) 99 . It is especially important that you do two things: take your time before rejecting any offer from the other side. last item: I’d like it quiet in the room at night. So when’s a good time? Jasper: (without hesitation) No way. They agreed on which part of the room each would have. 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. and studies late into the night. even if you aren’t going to accept their offer. and on what would be considered acceptable “sharing” of each other’s junk food supplies. each side is expected to put an offer on the table. Mutual respect must be part of the negotiation process. Jasper studies during the day and early evening and likes to stay up very late watching TV and visiting with friends. stereo. Here is how the last issue was handled: Okay. and refrigerator. Rob: Wait a minute. and can help you reach your goal. The final issue had to do with “lights out” and quiet times for studying. and from a strategic standpoint. the location of the TV.Tactic 24: Wait to Counter As the negotiations begin. and looks like you are belittling them. you know. Since they didn’t know each other well. Rob stays busy all day and evening with other activities. so he wants a quiet room late at night. I’m not interested in a curfew. Waiting a respectful amount of time to counter.

Jasper: Midnight. is all I’ll consider.Rob: (Rob was about to suggest midnight on Mondays through Thursdays. and d) a hearing with company owner if the matter is not resolved in 20 days.m. but changed his mind when he saw Jasper’s attitude.) Listen. midnight during the week is the only thing I’ll consider. the positions of non-union crew leader and floor manager would both be eliminated. b) written complaint to a floor manager if the matter is not resolved in 5 days. Rob: (there is no hesitation in this voice) No. Jasper: (without taking a breath) At best. Neither side anticipates that there would be 100 50 Practical Negotiation Tactics . Failure of both young men to allow one another to have their proposal considered caused the relationship to break down. I want a 10:30 p. and that’s not negotiable. 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.m. Under the restructuring. Under ABC ‘s contract with the union. No agreement was reached. curfew on TV and other noise every night. employee grievances had to go through four levels of supervisory review and appeal: a) verbal complaint to the non-union crew leader. The appeals procedure would have to be altered to reflect the restructuring. and the union foreman would report directly to the plant manager. Example 2 ABC Company’s management was being restructured and compressed in order to facilitate its new “just-in-time” manufacturing philosophy. 10:30 p. and that’s it. c) a formal “meeting” with plant manager if the matter is not resolved in 10 days. The union contract required that management renegotiate this change in the grievance procedure with the union.

In fact. because those management layers are gone. and everything else stays the same. Company: (rather abruptly) Let’s not drag this out. Union: Hold on. ABC Company’s negotiator explained the management changes soon to be implemented. (Note: An attitude change sets in.) We’re just not happy that you are proposing a Making Counteroffers (The “Give and Take”) 101 . 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. this redraft is a very simple change to the contract. We think that this is an opportunity to eliminate some of the adversarial aspects of the grievance procedure. An aggrieved employee can make a request for a meeting with the plant manager. and began the negotiation session concerning the grievance procedure. no one can complain about that.any objection to the change. and I’m certain your members will be okay with it. Union: As you know. but to dictate. our grievances often signal to management that there are real problems on the shop floor. Company: Here’s the new draft of the grievance procedure. We just cut out two steps. the employee and the foreman would meet with the plant manager and attempt to resolve it. Certainly. Company: (no hesitating) Trust me. After initial pleasantries were exchanged. he/she can take the grievance to the plant owner for a hearing. 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. We’d like you to consider the plant manager’s role as a problem-solver. rather than as a judge on the merits of the grievance. The redraft is simple and straightforward. We’ve got a couple of alternative models for you to consider. rather than go on to appeal it to the company owner. Union: You obviously didn’t come here to negotiate. If in 20 days he/she has not been satisfied. If the union foreman felt that the grievance had merit. We’ve simply eliminated the first two steps. The union was prepared to accept the plant manager’s position as final.

the company entertained the ideas the union had tried to propose before. rather than in the 35 days the current system provides. You can’t be serious. This time. We’ll see you on the picket line. the two parties did meet again. to prevent any change! Company: (surprised) What? Why would you object to this? Your guys will get a final decision in 20 days. 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 . Union: We’re very serious. and we’ll strike if we have to.two-step grievance procedure instead of a four-step procedure. After a cooling off period. and actually accepted a three-step procedure.

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). Sue: Yes. it’s just too much to do both. established goals. and Sue called her mother to let her know that they would not be coming for Thanksgiving dinner this year. Mom says you. and ten nieces and nephews) always ate around 5:00 p. Sue’s family (parents.m. They flipped a coin to see who “got” them and the new baby this year. Example 1 Sue and Bill have been married four years. you can adjust your demands or goals to include such new ideas. and now have a new baby girl. If you are flexible. Nancy: Sue. we’ll get to our side.Tactic 25: Be Flexible A negotiation begins with both parties having some idea of where they hope to end up. Be open minded. Bill’s family (parents. Even before the baby’s arrival. Sue’s sister Nancy called her to talk her into coming anyway. and do not dismiss something said by your opponent just because it came from the opponent. and at least five aunts and uncles) ate around 7:00 p. They’ve done the research. 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). and identified the range of options they feel comfortable with negotiating. The couple used to have Thanksgiving dinner at both families’ homes. But after the negotiation gets started. Bill. Bill’s family won. Next year.m. two brothers. and the baby aren’t coming for Thanksgiving dinner this year—that you’re going to Bill’s parents’ house. their spouses. successful negotiators remain flexible because new solutions to old problems often surface during a negotiation. and we’re really not able to enjoy either one. Making Counteroffers (The “Give and Take”) 103 . four brothers. Sue and Bill decided that they had to begin alternating their Thanksgiving Day visits between the two families. one sister. two sisters.

Sue: Next year. Thanksgiving is Thursday. we’ll come to Mom’s. When that goal looked out of reach. either. There’s nothing “special” about Friday. but then I realized that the rest of you already go to your in-laws earlier in the day. Conclusion Nancy’s goal when she called Sue was to talk her into coming to their Mom’s Thanksgiving Dinner on Thursday. some people have to work on the Friday after Thanksgiving. Bill won the coin toss for this year. 104 50 Practical Negotiation Tactics . 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. it’s okay with me if you can sell it to everyone else. Everyone in Sue’s family liked the idea of celebrating on the Friday after Thanksgiving. and it became the family’s new tradition. 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. the holiday will be over. I know that I would rather not do two Thanksgiving dinners on Thursday. Nancy: I’ll let you know. By being flexible. I mean. but she won’t tell you. she suggested a unique alternative. Nancy: What if we did Thanksgiving on Friday? Sue: What? Nobody does Thanksgiving on Friday—that’s un-American! Anyway..Nancy: It just won’t be right without you guys. Celebrating the next day seems odd.m. I thought of asking Mom if she could move dinner up to noon or so. Sue: I don’t know. Nancy: We’d make it special by all of us being together. Nancy: If we keep the time at 5:00 p. Mom’s very upset. So that doesn’t work. I bet everyone could make it on Friday.

Kids’ Home hoped to get $500. Kids’ Home: As you know.5 million is available for distribution to numerous charities. The foundation has a substantial endowment fund. we’re committed in theory. but we can’t fund all of the $12 or $15 million. We only have maybe $2 million a year to put toward this charity. a non-profit organization for orphaned children. 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 . We’re hoping to get a commitment from them to build and help fund the operations of a new facility. Estimates for building a new orphan home ranged from $12–$15 million. Unfortunately (for Kids’ Home).Example 2 Kids’ Home. City: Can’t you borrow the money from a bank to build the facility. We need the city’s help by allowing us to get the city land donated to us (for free). we hope to break ground early next year for the new orphan home. Foundation officals: Oh. had been negotiating with a foundation to become its major benefactor for a new building and to supplement the organization’s annual operating budget. but we need some assurance that you will be able to build and operate the orphan home at that location. the foundation’s regular annual grants come to roughly half of their available funds. Each year. depending on the cost of the land. Kids’ Home: That’s why we brought the foundation’s officials with us. City officals: We can probably give you the land for free.000 a year for operations. They are meeting with the city to ask that the land be donated by the city for the project. but the principal of the fund can’t be touched. the interest income of around $6. Kids’ Home is also hoping to get the city to encourage the foundation to commit to full funding of the building project. Kids’ Home and the foundation have decided that a parcel of city-owned land would be ideal as a site for the new building.

it could end up costing double that amount. Foundation: City: Foundation: Kids’ Home: Conclusion By exploring alternative financing plans suggested by the city. 106 50 Practical Negotiation Tactics . We wouldn’t want to make such a commitment to a bank. but we’re willing to look at it. We’re a nonprofit group. and really taxes our ability to raise funds. We probably would not be able to participate. I’ll contact the state tomorrow. Why not ask the state to issue no-interest bonds? It can do that for non-profit organizations. If we borrowed $15 million at 10% interest. 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. We’re not familiar with that program. We’ve never committed our funds to pay back a bank loan.Kids’ Home: Borrowing the money gets very expensive. And “donations” aren’t a very safe collateral for any bank that wants to loan us money. 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.

Jones: We’ve obviously gotten off on the wrong foot.m. The Jones family suspected that the Smiths called the police. In order for a negotiation to be successful. and you probably won’t identify your throwaway items or tell your opponent your bottom-line. Mr. These parties could get rather loud. The Jones’ two older children—girls in their early 20’s—often had friends over on Friday and Saturday nights. and trust can only be established if all parties interact truthfully. it is not acceptable to lie. Before the Jones family moved into the neighborhood. Smith: We don’t know what you’re talking about. and often lasted until 2:00 or 3:00 a. At the same time. yet not reveal all of your goals and objectives. The Jones family let their tree branches hang over the Smiths’ back fence and rub against the Smiths’ garage roof. Successful negotiations depend on trust. and we would very much like to talk about how we can resolve these issues. They asked to meet with the Smiths to talk about these disagreements. you might not want to reveal all of your priorities at first. and asked the officers to cite the Jones kids for parking too close to a corner. Example 1 Soon after the Jones family moved in next door to the Smiths. The Smiths called the police to complain about a late-night party. The Jones’ two younger children—boys in their mid-teens—hit baseballs into the Smiths’ yard and scared the Smiths’ dog.Tactic 26: Keep Few Secrets One of the most difficult skills to master in a negotiation is how to be candid. Mr. But the Jones clan had four cars altogether. However. the neighbors began to have problems. 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. each side has to know generally what each other wants to accomplish. Making Counteroffers (The “Give and Take”) 107 . you should be careful not to misrepresent your position to such an extent that your opponent will feel that you have lied. and often took up all the space along the street in front of the two houses.

Muffin. Mr. Smith: Well. Smith: No. So. Mr. Jones: Well. then they’ll need to come in at midnight so that their talking doesn’t disturb you. if they are outside. Is that everything now? Mr. the next time the boys were out playing and the ball came into the Smiths’ yard.Mr. we have a problem walking long distances in bad weather. Smith: Yes. Mr. Almost every day. Jones: Okay. we’d like to be able to park our car in front of our house. we’re good now? Mr. Jones: I wish you had mentioned that the last time we talked. they kept it. (A week later. And the music is to be off at midnight. If you can tell us all the things that we have done or are doing that have caused you to be inconvenienced. that wasn’t us. It is really very disturbing. And we’ll make sure none of our cars are parked in front of your house. Mr. I guess. Jones: We’ve already talked to the girls about the parties. At our age. Smith: Well. I’ll talk to the boys and we’ll make sure they play baseball in the park. In good weather. since you’ve asked. we thought you might have called the police about our kids’ party and our cars. 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. they’re hitting baseballs into our yard.) 108 50 Practical Negotiation Tactics . fine. Smith: You know that your boys are causing our dog. yes. Mr. and not in the back yard. In spite of the Smiths’ assurances. Also. and was met with the following: Mr. but we do know that someone has complained. a lot of problems. Jones came to see what the problem was. and they won’t be having friends over more than one night a weekend from now on. we would like to work out some solution. the late-night parties are a problem.

Its local headquarters has a union to handle its international shipping. Mr. But we didn’t call the inspector. Jones: (at the Smiths’ door. The union laborers walked off the job on Friday. although none of the facilities outside the U.Mr. have labor unions. because they didn’t like a grievance decision. you’ve said that before. but Neno cannot tell the union this. irate) I can’t believe you people called an inspector on us. the tree was clearly over the fence. Why didn’t you tell us? We can’t read what’s on your mind! Mr. Example 2 Neno Enterprises is a shipping company with extensive global operations. You could have seen that yourself. Making Counteroffers (The “Give and Take”) 109 . and the deal is close to being final. The union knows that the company is up for sale.S.S. and too bad for you! Conclusion The disagreements and unpleasantness continued until the Smiths finally sold their house and moved into a condominium. Japanese companies often do not “recognize” labor unions the same way U. or European companies do. Neno has been negotiating the sale of its business to a British company.” Forget all we’ve agreed to do—we’ll just enjoy the use of our property. 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. or the deal is off. the British firm will walk away from the deal. Unless Neno can get the Union members back to work on Monday. Smith: Well. Neno’s president and the Union representative met to discuss the walkout. Jones: Sure. Union officials are afraid that a Japanese company might purchase it. The British insist that a very strict confidentiality provision be part of the negotiating process. We would have fixed the tree if you had asked. You obviously don’t want to be “good neighbors.

You really don’t want to do that. Have the guys back on Monday. We’ll meet with all of the parties on the grievance first thing Monday. the slowdown as a result of no one working Saturday and Sunday won’t be noticeable. I’m certain that if we can sit down and talk next week. But if your guys are out past Sunday. I think it already has. We’ve not had a labor shutdown in 20 years. is still a labor shutdown. no harm-no foul. it will impact our marketability. Neno: Look. we don’t. But we also need to make it clear that we expect you and whoever might buy your company to take our contract seriously. Union: We think that the grievance decision affects our wages. And one company that is interested has a really good track record on expanding the businesses they buy. do you? Union: No. 110 50 Practical Negotiation Tactics . But I have to have everyone back on Monday. Neno: Look. we will resolve it to your satisfaction by the end of the day. 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. I promise you. any interruption in our shipping could affect how these buyers look at our business. Therefore. You don’t want to mess up our negotiations. then there’s probably no harm done. I’ll forget all about the strike. If everyone is back on Monday. I can’t really be more explicit than that at this time. Anyone who buys the company will have to honor the contract we have. It’s not the time to have one. so the union won’t be hurt by the buyout. If they do come back. whether it’s for one weekend or a week. I know it’s not news to you that this business is up for sale. Our guys are prepared to stay out a lot longer than Monday. We can’t put up with the kind of decision we got on our grievance. this is a legal strike under the contract.Neno: You know this is a wildcat strike and that it is in violation of our contract. I need your guys to come back to work on Monday. and if the guys are back on Monday. Neno: All I’m saying is that there is a difference. If that’s going to have a bad effect on your being able to sell the business.

Neno’s decision to respect his confidentiality agreement and simply tell the union that he couldn’t disclose all the information. Union: Okay. If I could. I would be more specific. I can. rather than make up reasons.Union: It’s that important to you? Neno: Yes. Conclusion On Monday. But I can’t. But I need to tell my guys that this is important to them as well. Because the parties had dealt honestly with each other in the past. Neno called the union negotiator in and briefed him on the sale. we’ll be back to work on Monday. the sale was finalized. while the grievance was being resolved. Union: Okay. was the right decision to make. I’m going to go along with you because you’ve always dealt straight with me. He told him that it would mean that the union would not only keep its jobs here. and it’s that important to you as well. as well. Can you assure me of that? Neno: Yes. Making Counteroffers (The “Give and Take”) 111 . the union was willing to trust Neno—even though he couldn’t tell them everything. but the British firm will allow them to organize at their foreign locations.

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.

Example 1
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

Example 2
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.

Example 1
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”)


000). but the company president does not share your optimism on this program. (long pause) Felipe: Let me give you three options: A. I’ll approve $15. and clean it. keeping her Saturday free. she chose the one she most preferred. Felipe: (Roberto’s supervisor) Sorry. Clean it after your game. At least this way the program will have a chance to succeed! 116 50 Practical Negotiation Tactics .000 budget! I need at least $20. that is enough time. I can accept B. I’ll find a way to do without one part-time person. Three.000 for advertising. I’ll approve $15. or we lose a whole year. Conclusion At first. I can’t help. Example 2 Roberto: I can’t properly advertise this new program with a $5. Roberto: Well. but I will cut your travel budget out completely. Felipe: Well.000 in the budget.000.000 for advertising. Use the $5. Take it or leave it. But when her mother laid out the schedule and gave her alternatives. I’ll do it now. but no TV or anything until it’s done! (pause) Okay. Felipe: Sorry. B. but I will cut your staff by one part-time person (or $15. Roberto: But I need to start the direct mail and newspaper ads within two weeks.Amber: row before your basketball game. or C. Amber resisted the chore she hated. I have three hours. I’m not going back to him again to discuss this program. Roberto: But it will never generate enough interest if no one knows about it.

would enable him to adequately promote the program.” He offered Roberto three alternatives of equal cost. which was his goal. Making Counteroffers (The “Give and Take”) 117 . thus achieving his goal of not having to ask for a larger budget. Roberto believed. One alternative.Conclusion Felipe was willing to think “outside the box.

Jones. Susan: Mr. the promotion had not yet been approved. 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. You know my commitment to this company. I am very disappointed in the company’s decision not to promote me and to limit my merit increase to 3%. This should have resulted in an automatic promotion and a sizable pay increase. After a few minutes of silence. I have to tell you that while I appreciate what you have done for me. and 118 50 Practical Negotiation Tactics . inviting a response. but one side comes back with a non-negotiable demand. I very much appreciated the fair job performance review you gave me. Jones: I certainly do. nearing her third year with the company. I think you would agree with me that I have performed well above expectations this past year. Unfortunately. 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. It was 16% less than she had been led to believe she would be getting. received a glowing report from her boss on her job performance. Susan: I hope so. Here’s how the negotiations went. She was determined to hold her ground for at least a 13% pay increase and a promotion. 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. Example 1 Susan. and the annual merit raise she was getting from the company was the same 3% other employees were receiving. 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. he can make an open-ended statement. you are a valued employee. The negotiator for the other side says nothing.Tactic 29: Prolonged Silence When negotiations have hit a critical stage.

it could help. but a pay increase of that size might be more difficult. 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. Once he acknowledged that both items might be awarded sometime in the future. I would very much appreciate it if you could ask the company to reconsider.or three-year period. the company’s refusal to grant them now was a harder position to support. of course I will be glad to do that. Conclusion Mr. (says nothing) Or. Promotions of this type are all but automatic around here. Making Counteroffers (The “Give and Take”) 119 . Jones to continue to offer solutions. and I’m sure management will agree. because I feel my future with the company might be at stake here. I could probably find a way to phase it in over a two. Well. I suppose I could get the promotion approved with the proper presentation. maybe we can talk about the promotion later in the year. (says nothing) If I can’t get that pay increase approved right now. I really want you to stay with the company.Jones: Susan: Jones: Susan: Jones: Susan: Jones: Susan: Jones: that I deserve more consideration. If there is some flexibility in your request. I must ask you to try to get both. and I think that I really haven’t been dealt with fairly. Susan’s silence prompted Mr. and sell it to management that way. Jones went to management and convinced them that they should give Susan the promotion and the 13% raise. if management can see their way to giving you the pay increase now.

I don’t think it’s a problem. has colored these negotiations. My bosses might not have been inclined to expand the agreement anyway. The parties agreed to continue the previous terms of the agreement. her plans really don’t have any bearing on these negotiations. This is how the negotiations went: Town Council Representative: Well. and were trying to settle on new and expanded areas when one of the elected officials (Ms. The office she was thinking about was the office held by her counterpart in the neighboring community (Mr. The mayor.Example 2 Two local governments entered into a tax-sharing arrangement in order to provide joint services to citizens in a more efficient manner. The mayor’s negotiating representative wanted to complete the negotiations on the expanded agreement. The end of the agreement coincided with the election cycle for the two towns. Town Council Chair). the people Madame Mayor currently 120 50 Practical Negotiation Tactics . Mayor) said that she was considering running for office. Mayor’s representative: No. The term of the original agreement was nearing its end. He decided to push for a simple renewal of the original terms. Also. Town Council Representative: I think you’re wrong. and until she does. Mr. but the officials had hoped to complete the negotiations prior to anyone involved announcing for office. She has not decided what she’s running for. 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. 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. by saying that she might run for Chair. but now they’ve got to ask what Madame Mayor’s motivations are. and representatives of the elected officials of the two towns were meeting to renew and possibly expand the agreement.

Town Council Representative: (silence) Mayor’s representative: I would think that at least the proposals that don’t involve budget changes could be pursued. I don’t know what her reaction will be. Making Counteroffers (The “Give and Take”) 121 . In the end. I’ll go back and tell Madame Mayor your position. the Town Council representative’s position prevailed. I hate not to attempt to add some additional areas to the agreement.represents have to worry that her desire to switch governments might taint the negotiations. He either had to end the session or figure out what to say to reengage the other side. 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. and the agreement was renewed with no new provisions. the Town Council’s representative left the mayor’s representative with no room to maneuver. Conclusion By remaining silent. Town Council Representative: (long silence) Mayor’s representative: (after an uncomfortably long silence) Well. I think we really have to drop back and just propose a renewal of the tax sharing agreement without adding any new items. Mayor’s representative: Well.

“I have to have this. the brook and rock barrier are on my property. Example 1 Madeline bought an old farmhouse outside of a small town. As was sometimes the case in these parts. and began to renovate it as a home and a pottery shop. She discovered that a rock barrier.” Avoid making that “necessary concession” too narrow: It should be large enough for both of you to step into comfortably. It calls for compromise. The property came with three acres of forest alongside a meandering brook. The reason I built it was so that I could protect my patio. after the gazebo had been there for about five months. Having an iron-clad demand probably won’t give you enough room to reach an agreement. 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. she noticed that the brook came within 100 yards of it. Obviously. Neighbor: Well.Tactic 30: Always Leave Room for Dessert Negotiating is the art of give-and-take. I have a problem. Madeline: Hi. Joe. Madeline built a gazebo about 500 yards from the brook. you should always enter the talks with a good idea of what you are willing to agree to. when one of you might say. One day. You will have to remove the rock barrier. Madeline. She traced the brook back along its course to see why and where it had changed its path. or we will be at an impasse. in a small clearing. Your rock barrier has sent the brook onto my property and it is too close to my gazebo. the brook was the property line separating her property from a neighboring farm. had redirected the brook further into her property. The brook 122 50 Practical Negotiation Tactics . 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. which an upstream neighbor had built. She went to discuss this problem with the upstream neighbor and had every intention of demanding that the barrier be removed immediately.

She left room for a compromise. Madeline: Well. Then. but only if I have a clear understanding with you that the barrier will be rebuilt to protect my house. Madeline: But by diverting the brook. you have not only threatened my gazebo. 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. and return everything as it was. Neighbor: I’m sorry. What if you removed the barrier for a short time. I’ve lost 400 yards of property on my three acres. I won’t remove the rock barrier. Also. This will put these houses right next to me. what I need is to protect my property line and my gazebo. By expanding the range of options available to resolve the dispute. Making Counteroffers (The “Give and Take”) 123 . Madeline: Yes. When she found out that this was not going to solve her neighbor’s problem. I understand that. Madeline was able to protect her gazebo.extended right up to my back door when the rain was heavy. but I don’t know what I can do about it. It might not be necessary to make such a dramatic change. restore her property line. My neighbor on the adjacent farm wants to sell part of his property for a housing development. but you’ve changed the boundary line of my property. I can’t have the brook in my house. Neighbor: I can do both of these things. Conclusion Madeline’s objective when she met with her neighbor was simple: Have the rock barrier removed. at least I’ve maintained my property line. if the brook is redirected. which enabled her to achieve her goals. I couldn’t have that. she widened her range of options. and allow the neighbor to protect his home. 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.

000 to cover the premiums for dependent coverage. If we invest the $200. that would be the minimum increase. the airline paid a total of $200.000. as it has always been.000 figure.000. 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. Pilots: So you are projecting that the increase in dependent coverage premiums will average $200. dependent coverage could cost us $1. But only a few of our people are close to retirement age.000. you are taking a risk on the costs increasing. Over the last five years. As best as we can tell. and the premiums for health care just keep going up. 124 50 Practical Negotiation Tactics .000. what they really need is for you to cover the costs of dependent coverage. and are willing to keep pension benefits the same. Over the next five years. And we cannot afford that $1. The projections for the next five years were that these costs would increase to about $1. This is just a cash-flow problem that your members have to understand.000. then the pension benefits overall will increase by $10. Pilots: Look.000.000. and we know that with this new contract term of five years. the discussions of the employee benefits package bogged down on the issue of health insurance costs and pension benefits.Example 2 The contract negotiations between the pilots and the airline had been going pretty well. The airline industry is in a slump. the company can make your pensions much better. Company: This could not come at a worst time for us. However. we know that health insurance premiums might skyrocket. With long-term planning and investments. The pilots want dependent coverage paid for by the company.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. This would be a better benefit in the long run. with all wage and operations issues resolved fairly early.

000 available. If we can get two or even three years out of the $200. that would be worth it. Conclusion The company was committed to limiting its exposure to $200. The health insurance market stabilized.000 to either pay one year of the premiums.Pilots: But you do have the $200. with a cap of $200. we are.000. and the pilots knew what to ask for when the contract expired. Company: Then it’s okay with us. then those funds will not be available to invest in the pension plan. Making Counteroffers (The “Give and Take”) 125 . by agreeing to let the company cap its exposure for dependent health coverage. can we agree to a year-to-year agreement on dependent coverage. the company will not be expected to give us this benefit.000 actually carried them through four years. It initially believed that the only option was to put that money into pension benefits. Pilots: Since the concern is about agreeing to a 5-year commitment without knowing the increases we might have in health insurance costs.000? Once the cap is met. Are you willing to risk not having an opportunity to increase pension benefits? Pilots: Yes. The dependent coverage is more important to us now than the pension benefits. Company: If the company spends the $200. so the decision to be flexible was a good one. The $200. however.000 the first year on the premiums. or invest in the pension plan? Company: Yes. The pilots expanded the range of options. if they were that high.

Example 1 Car buyer: What.” and “low monthly rates” are examples of the salami tactic. I love this car. Buyer: Way too much! Saleswoman: Well. Phrases such as “for only pennies a day. Saleswoman: With your 740 in trade. but the Consumer Price Index has not gone up 150%—nor has my paycheck! Saleswoman: So. I guess it would be around $600 per month.” 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.500! Saleswoman: Yes. do you want to look at something else? Buyer: No. Buyer: Yes.000 car.” “affordable weekly payments. if I can give you this car with a $300 monthly payment. $45. what monthly payment did you have in mind? Buyer: More like $300 per month. If you are on the receiving end of such a tactic.… (20 minutes later) Saleswoman: So. be sure to add up the total cost.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. and compare it to your strategic objective. I recall the day you drove it out of here. but that was several years ago. it’s a deal? 126 50 Practical Negotiation Tactics . Saleswoman: I’ll be right back.000 for a Volvo? I bought the one I’m driving for $19. I just can’t imagine the monthly payment on a $45.

I can’t afford that much.Buyer: I don’t see how you can do that. do you want Disney? Yes. Saleswoman: Simple. but what else must I buy? Only the basic service for $8. Making Counteroffers (The “Give and Take”) 127 . Once the buyer volunteered that $300 was an affordable “slice. I can’t discuss another client’s account. but let me see the numbers. Great! So.” she had him—she worked around the $300 slices. and added the trade-in.00 per month. as promised. down payment. But my neighbor pays $39. with your car and $6. you can get the Disney channel for only $5.000 price into “slices” the buyer thought reasonable. Sure.99 per month.00 per month.000 down and $300 a month! Conclusion The saleswoman knew the buyer was suffering from “sticker shock. do you want HBO? How much? $5. Instead of a three-year lease. Example 2 Cable representative: Owner: Cable representative: Owner: Cable representative: Owner: Cable representative: Owner: Cable representative: Owner: Yes. can’t you? Buyer: Yes.” She decided to cut the $45. and payout slices to reach the total price she wanted. (looks at the numbers) That looks good.00 per month for your service. I can afford $6. You can do that. Let’s see.000 down. it will be a five-year lease.

I really want the sports channels. Disney is for the kids! The sports channels are for me. Thanks. 2? How much? $8.Cable representative: Owner: Cable representative: Owner: Cable representative: Owner: Cable representative: Owner: Cable representative: Owner: Cable representative: Owner: The Sports Combo–ESPN 1. That’s another $5. 2. What about the music package? Yes. The total is $38.00. 128 50 Practical Negotiation Tactics . and probably felt much better about the total negotiated package because it was presented in modest individual slices. That’s $5. 3. but he agreed to six “salami slices” for a total of $38. and SI 1. Conclusion The owner thought his neighbor’s service at $39. instead of one total amount.00 per month. Any other kids’ channels? Yes. Yeah. Okay. Great. we had that before. they asked about the Cartoon Network. But that’s all! Then we’ll hook you up on Monday.00! Why? Because he judged the per-slice price to be reasonable.99 per month.00 a month. and my wife wants the old movies.00 per month was far too much.

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. an unexpected element of humor can break the tension and encourage a person to calmly get back to the issues. and the use of humor. so are you ready to make a deal? This might convince a few buyers. Tactic #33 (The Bluff) is a classic pressure tactic. and it can destroy your credibility. it is effective. turned off by the tactic. It should be used with caution: It can end negotiations immediately. Tactic #36 (The Element of Surprise) can catch an opponent off-guard and cause stalled negotiations to move forward. Humor might not look like pressure. Tactic #35 (Applying Excessive Pressure) is a similar tactic that should also be used with caution. but others will walk out the door. but it can be used effectively when one party clearly has an edge. 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. today. the traditional car salesperson might tell the buyer. angry negotiations. Other less-obvious pressure tactics include Tactic #37 (Divide and Conquer). Applying Pressure 129 . When both sides believe that each has equally strong positions. For example. but in tense. however. 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). In some cases. “I can only guarantee this price until 6:00 p.m. pressure tactics should probably be avoided.

I can’t tell you how many times Abby has said how happy she is that we have the sailboat. Although I do think there ought to be some consideration for the two years you had use of the boat. boat prices have really gone up. Abby really loves that boat. The two couples used the sailboat a lot the first couple of years. And we don’t want to be unfair. When Lacey found out that his employer was transferring him to another city farther down the coast. Such exaggerations are easily revealed or uncovered. and they will weaken your credibility. but it is not a good idea to exaggerate what you are offering or what you are giving up. but Don. together and separately. Don: Absolutely. and we need to talk to you about how we can buy you guys out. big news! I’ve been promoted. Lacey. getting a divorce and each moving away (and would have no more use for the sailboat). Lacey: I know. Don and Abby now use it less and less. Example 1 Don and Abby went in on the purchase of a sailboat with their friends Lacey and Chloe. It 130 50 Practical Negotiation Tactics . Chloe and I would like to take the sailboat with us. in fact. I think Chloe and I would be willing to pay more than just the money you guys put into it. In the last couple of years.Tactic 32: Don’t Exaggerate It’s always acceptable in negotiations to put your best case forward and present your position vigorously. Your opponent will consider you untrustworthy and might even be insulted by your attitude. Don: Wow. We’d hate to give it up. Lacey and Chloe didn’t know that Don and Abby were. he and Chloe wanted to buy out Don’s and Abby’s interest. 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. and we’ll be moving south in the next month or so. Lacey: Don. I don’t know.

and neither of us put much in for upkeep. We’ll be leaving here for the Midwest. Lacey: Cut it out. Don and I are getting a divorce. (After Lacey and Chloe had a chance to talk. 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.) Lacey: Don. It just reminds me of how happy Don and I used to be. Don: Lacey. big news!! Don got his promotion. I’ve been thinking. he likely would have found himself in a stronger negotiating position. Chloe: Oh. It’s about time now for some major investment. I thought you understood how important this boat is to Abby. I was afraid something was going on when you all-butstopped joining us on the boat. Lacey and Don’s negotiations changed considerably. though it’s not so just about the most important thing we own. Applying Pressure 131 . I think it would be fair to pay you and Abby half of what you originally put into the boat for your 50% share. Don. which you would have to share if you want to retain half-ownership. (Around the same time. Abby: Well. I’m surprised by your attitude. and I’ll get back to you. the boat has depreciated. Abby: That boat. If Don had not exaggerated the importance of the boat and dealt with Lacey honestly. I have big news too. I’m sorry. Abby is having this conversation with Chloe) Chloe: Abby. I’ll be glad never to see it again. and we’re moving farther south. After all. Abby told Chloe about the divorce and about how she never wants to see the boat again. Let me talk to her. but separately.

I read in the papers every day that the market is still strong.Example 2 Aimes Manufacturing had experienced major ups and downs in the price of its stock for the last two years. I’m afraid that with this current information. they will make their decision based on a review of the stock price that day. 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. our production line changes at least three times a year. in this global market. 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. I think you’ll have to agree with me that wage increases in this next contract will not be available. Here’s how these negotiations went: Company president: Well. I’ll be going back to them as soon as next week. the company president decided to use the stock price as a negotiating tool during the current union contract talks. but this has been such a crazy situation. Union negotiator: The stock price might be down right now. and that the economy is strong. Company president: Well. And as you know. And while these fluctuations have little to do with the health of the company itself. I’ll be looking to you to make some major wage concessions on this upcoming contract. in fact. the situation in the stock market is not good. The current stock price is the lowest it has ever been. I’ll have to show them 132 50 Practical Negotiation Tactics . I’m telling you the stock price is having a huge impact on us already. we will need to make drastic cuts in our operating costs just to survive.

this week’s price would have little or no effect on your ability to get a Letter of Credit from the bank.) Union negotiator: I’m sorry.that we’ve cut expenses to counter the losses in the stock market. When the market took a swing up during the negotiations. They told union officials that it would be very rare for a bank to make its decision solely on stock price. We think this company is very healthy and can withstand the temporary downturn. here’s what happened. Union negotiator: I know that’s what you told me. no concessions! In fact. When negotiations resumed. Let’s get back together next week. Conclusion Because the company’s president over-emphasized the impact of the market on the company. but I checked it out and it’s not totally true. (In the interim. Company president: All right. and I’ll have our people look at it. okay. If the stock goes up next week. but your proposal to cut wages is just not going to fly. Give me your proposal for wage concessions. Applying Pressure 133 . and the union ended up with a substantial increase in their contract. Company president: What? I thought you understood that it is essential that we get concessions on this if we want to stay afloat. they would do a thorough analysis and look at the health of the company over the long haul. So. the union checked into the Letter of Credit transaction with some experts in banking. the company’s position was weakened even more. If you put it that way. he lost the trust of the union. let’s talk about it. Union negotiator: Well. 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.

She knew that if she made such a demand and threatened to leave him unless he made a commitment. Tom: Oh. Christy was surprised and hurt when a friend of hers mentioned that she had seen Tom at the movies with his former girlfriend. either. and she didn’t think Tom had. There is a chance that the tactic will work and that both sides will agree to the proposal on the table. This can come back to haunt you. so their “free” time was very limited. but you always run the risk of having the opposing party call your bluff and end the negotiations without reaching agreement. and I really wanted to see the new Lenny Bruce movie. The couple had not discussed marriage. Sara said she saw you at the movies with Charlene yesterday. Christy realized that asking for a commitment from Tom at this stage would be a very serious discussion. it might backfire. If you subsequently agree to begin talks again. I guess I’m just surprised. I called Charlene and she was available. I knew you had a class. You’re not upset about that. Charlene. 134 50 Practical Negotiation Tactics . Christy thought that their relationship was exclusive: She hadn’t gone out with anyone else. Example 1 Christy and Tom had been dating for about a year. they are bluffing. but Christy thought the relationship was heading in that direction. yeah. I really hate it that you chose to see the movie with Charlene. If one party threatens to walk out of the negotiations if a demand isn’t agreed to. Poker players know all-too-well-that bluffing can be very costly. We don’t have that much free time together. Both of them were still in graduate school and worked full-time. Here’s how the discussion went: Christy: Tom. are you? Christy: I don’t want to be. and they really have no intentions of doing so. you will have lost credibility with your opponent. but I really am.Tactic 33: Bluff! Bluff with caution.

Example 2 Nexon and its union had been negotiating a new contract for the past couple of weeks. Tom: Okay. If Tom had “called” Christy’s bluff. I certainly don’t want to lose you.Tom: She’s a friend who happens to be a girl. I need to have your commitment that you won’t do that. 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. I’m not “dating” anyone else. He believed she was sincere. and at first he thought she might bluffing. so he didn’t call her bluff. then I’m afraid I want us to stop seeing each other. She convinced Tom that her feelings were strong. but very little progress had been made. she paid her own way. Conclusion Tom didn’t want to lose Christy. It’s made me realize that I want us to have an exclusive relationship. Going to a movie with one of them to me is the same as going to the movies with one of my male buddies. Tom: I have friends of long standing who are women. Tom: You’re serious? It’s that important to you? Christy: Yes. he had to make a commitment or risk losing her. It really wasn’t a “date”—we just saw the same movie together. Applying Pressure 135 . I just thought of her because I knew you weren’t available. If that’s not possible. Actually. I won’t go out with any woman friend. The union negotiators. Christy would have had to decide whether or not she was indeed bluffing or if she would really end their relationship. It is. I’m willing to risk losing you. Since he wasn’t sure about that. if you can’t make that kind of commitment. Christy: I just can’t see it that way.

We’re not going to reach agreement on this at all. much less today. Nexon: I’m just not prepared to give you one. Nexon: I’m sorry. or else we’ll be asking the membership to strike. Here is what happened at the next negotiations session: Nexon: I’m sorry. Why don’t we put this one aside for now. We need an answer today. Nexon: We’ve got lots of issues to discuss. Second. and try and reach agreement on the cost-of-living increase you’re proposing? Union: No. but working without benefits is simply not acceptable.) 136 50 Practical Negotiation Tactics . we want the part-time workers to apply for and fill fulltime positions as they become available. The union members ended up voting not to strike at this time. Union: You’re wrong. then all of our other demands will change. Many of our union members who are working part-time hope to work full-time. it will cost too much. but the company cannot offer the same benefits to the parttime workers as it offers to the full-time workers. This is something we just have to have. (The union negotiating team left the bargaining session and called for an emergency meeting with all union members.believing that Nexon would not risk a strike. Another bargaining session was scheduled. First. This is a critical issue to us. And I don’t believe you’re going to go call for a strike over this. we’re really prepared to go the distance on this benefits issue. 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. If we’re not able to reach agreement on this. Nexon negotiators did not believe that the workers would actually strike this early in the negotiations. We need some agreement on this today. Union: You don’t seem to understand.

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.

Applying Pressure


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.

Example 1
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.

Example 2
A committee of three members of a governing board of twelve people is responsible for developing and presenting the annual budget recommendation for

Applying Pressure


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

” Example 1 We have all been at the mercy of someone who uses pressure bargaining. when one side has “leverage” over the other. He was at the mercy of the company that could install an appropriate unit the fastest. the guy was in no position to dicker over the price of the repair. It’s easy to prediet the outcome in collective bargaining talks if one side is clearly in a very favorable position. Example 2 Let’s face it: Sometimes one party holds all the cards. because this is the busiest time for that industry. Unions can strike at any time to achieve their goals if they have some leverage. his air-conditioning unit went out. he was able to successfully bargain for other services. not blessed with many household repair skills. If the employer is a shipping and express mail company. such as the advantage of time. while the other is not—that is. Since his toilet had overflowed and water was continuing to run all over the floor.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. On the other hand. They are more flexible on price and service when they know the consumer is not under any pressure to buy the service being offered. there were times when there was no pressure and no emergency. once had to call a plumber in for emergency repairs. It is sometimes referred to as “pressure bargaining. Many companies sell “tune ups” and routine seasonal checks to keep their people busy all year. Try bargaining with a plumber! This homeowner. its union has the advantage in the weeks just before Christmas. and was forced to pay whatever they demanded. for example. 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. The owners of professional sports Applying Pressure 141 .

When one side places undue pressure on the other side. benefits. What goes around comes around. Conclusion “Pressure bargaining” is a way to achieve objectives that are greater than what is deserved or desired by the other side. for example. unemployment is low and jobs are plentiful. it is the union’s turn to hold firm on its demand). but before you choose such a tactic. either individually or through collective bargaining. despite strong resistance. but they are less willing to negotiate several months ahead. On the other hand. can suffer repercussions in the form of sabotage. Many labor contracts were agreed to when unemployment and inflation were high and employees felt pressured to accept the demands of the employer. 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. however. This gives it the upper hand in negotiating with employees. he didn’t have to be flexible because the employees believed that they had no alternatives. A note of caution: Circumstances in one round of negotiations might give one side an advantage. Employers who refuse to give in on issues of high importance to employees and exert pressure on unions to accept their terms. there are likely to be long-term repercussions. she has leverage and can more likely hold firm on her price. if the unemployment rate is high and jobs are few. The employees had no power to resist the demands of the employer. etc. If you have a special skill that an employer needs and few others have that skill. (Team owners are notoriously unpredictable. low employee motivation.teams are generally more vulnerable to pressure from the players’ union several days before the season begins. 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. If so. and other undesired outcomes. When the employer proposed adding duties to the job classifications. the employer has the advantage: a supply of jobs. will what goes around come around? 142 50 Practical Negotiation Tactics .

They stopped for lunch at a fast-food restaurant and shared a children’s meal that came with a small doll. Andrea. (In a few minutes. Consider making a suggestion or a proposal that completely surprises your opponent. Mom said so. I can’t drive if you keep this up. the fighting starts up again. and I can’t stand it. You’re driving me nuts. the girls had been fussy. and here’s how the “negotiations” went: Dad: You two stop fighting. (Their dad pulls to the side of the road and turns to face them in the back seat. We’ve got a long ride ahead of us. Just because you saw it first doesn’t make it yours. I took it out of the box. Why? A sudden surprise can disrupt the dynamics of a negotiation. Susie: The doll belongs to both of us. Their dad tried to reason with them. Example 1 A father and his two daughters were on their way to visit the grandparents.) Dad: Stop it right now.) Applying Pressure 143 . Andrea had taken them off the doll. you have it when we drive home. About an hour into the drive. the argument is over the doll’s shoes. Just share the doll. and Susie. This time.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. but use this tactic judiciously. Susie: Okay. because you will probably only get to use it once. and Susie hid them under the seat. Andrea: Okay. The doll can be shared. Tell Susie to let me have it. the little girls began to fight over the doll. Almost from the beginning of the three-hour drive. Andrea: The doll is mine. you have it this part of the trip.

I want the shoes. charging that they breached their duty in their handling these funds.) Dad: Now there’s no more fighting over the doll. Both Andrea and Susie were so shocked by their dad’s action. The tactic was so successful. and reached back for the doll. Finally. in fact. Susie: Daddy didn’t say anything about the shoes. 144 50 Practical Negotiation Tactics . He initiated the litigation against the local school board members and several banks that invested the money for the board. Dolly has to have her shoes. Dad tried correcting them a few more times. and that they had invested and spent the tax dollars wisely. so it was worth the risk. Daddy said I got the doll on the way to Grandma’s house. Conclusion Dad’s use of a “surprise” tactic was extreme. at great expense to the auditor’s office and the school board. to no avail. The auditor asked to meet with the editor to explain his position. but nothing else up to that point was working. The defendants contended that the auditor’s actions were politically motivated. The litigation itself had been going on for more than three years. (They continued to argue and whine and pinch each other. Dolly doesn’t need shoes on in the car. The auditor’s job was to make sure that tax dollars collected for the local education system were appropriately handled. they didn’t say another word. Here’s how the meeting went: Auditor: I appreciate a chance to talk to you about this litigation. and I hope I can convince you of that. he slowed down. I think I have acted properly. He grabbed it and threw it out the window. 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. She can have them later. The local newspaper was prepared to urge the auditor to end the litigation.Andrea: Give me the shoes back.

Your reporters will probably want to follow up on it. perhaps you should just cut your losses—and just drop the suit.Editor: I’m certainly willing to listen. Editor: Well. They’ve been making that same argument from the beginning. this case needs to be dropped. Conclusion The editor wrote an editorial urging a resolution for the good of the community. rather than drop the case. I guess we’re finished here. The school board members make a very good argument that their practices regarding how the funds were expended are not just adequate. and it is costing your office money and good will. They are very persuasive that this is just a political battle. but I have to warn you that from what I’ve seen and heard so far. Editor: (surprised) Really? They settled? This is public information? Auditor: Yes. Thank you for coming in. From what I can see. Auditor: I appreciate their arguments. I think I have something here that will convince you otherwise. Here are the papers. as a matter of fact. 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. Editor: Well. but recommended that the parties reach a settlement. We believe the other defendants will soon follow suit. The auditor successfully used the element of surprise in announcing the settlement and thus changed the direction of the editorial. Auditor: Well. and a significant amount of money will go toward the tax fund. Obviously. one of the banks settled with my office. the bank would not have done that had we not proven our case. but actually superior to some other entities you supervise. This morning. That’s really the reason this has gone on so long. there’s just nothing to back up your allegations. I really think the community would be better off. Applying Pressure 145 .

but I think it will get a lot of use. although getting your license and getting a pool table are connected. 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. Tina: What do you mean? Mike: When Kevin and his friends get their licenses. I want to talk about a car! Mike: It’s really not one or the other. they’ll be mobile! The last thing I want is for them to be out cruising around. I know we’ll all enjoy it. I can remember spending hours playing with my friends and family when I was growing up. especially Kevin. 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. night after night. Mike knows he needs to get either his wife or his son on his side. try to focus on that subject or address that member directly to get them to be more amenable to your proposal. If the other side involves more than one person. Kevin: I don’t really care about a pool table. Kevin is against it because he is turning 16 years-old soon. Example 1 Tina’s husband Mike wants to buy a pool table for their family room. and a car is more important to him than a pool table.Tactic 37: Divide and Conquer Certain negotiations lend themselves to a divide-and-conquer tactic. Dad. Tina and their son Kevin are against the idea. I’d 146 50 Practical Negotiation Tactics . Tina: I’m really against this pool table idea. Kevin: So am I. Mike: I know. you might be able to dilute their power by identifying their different interests and addressing them separately.

What happened? Applying Pressure 147 . I’m surprised. A number of contract changes have already been worked out and Wylma. 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. then maybe it’s not such a bad idea. They bought the pool table. Mike: I really do. Example 2 Negotiations on a new union contract seemed to be going quite smoothly. who was studying the company’s financial records for the team) became uncomfortable when he heard Tom’s demand. Once Mike convinced Tina of the idea’s merits. But I’m not going to hang out here all the time. received it without comment. don’t you think you guys would use it? Kevin: I guess so. the chief negotiator for the company. Wylma: Tom. 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. has just presented the company’s initial wage offer. Conclusion Mike found an argument that divided Tina and Kevin. she joined his side of the debate. the head of the union negotiating team. A pool table could attract them here. only Kevin did. and Kevin and his friends use it often. Tina: Well. I thought we were making real progress. Instead of both opposing the idea. Kevin. She noticed that Jim (another member of the union’s negotiating team. Here’s how the negotiations went. some. them to hang out here more.

) Wylma: Now Tom. you’ve heard our demand. But Tom. Conclusion Wylma’s appeal to Jim’s knowledge of the actual financial situation of the company worked to divide the union’s negotiating team. Wylma: Jim. these are accurate. you certainly are aware of our financial situation. (When they resumed. Tom had reduced his wage demand significantly. I think you need to rethink your demand. forcing them to reconsider their demand. Wylma: Tom. Tom: We don’t think so. Do you think this is reasonable? Jim: (looking uncomfortable) Well. Your demand is totally unreasonable. Wylma: Let’s take a break. Let’s start again tomorrow morning. Jim? Jim: Yes. these are our actual accounting figures. This is just what we think is fair. Right. but he added some workplace changes that Wylma was comfortable negotiating. you’ve seen our sales projections and production costs. Wylma distributed copies of financial data that showed the company’s current condition. 148 50 Practical Negotiation Tactics . as Jim can point out to you. When the negotiations began again.Tom: Wylma: Nothing happened.

so pressure grew to draw names and exchange gifts. but it should never be at anybody’s personal expense. Sometimes the argument got heated. but it is really important to me. but as the children grew up and had families of their own. and had children. so what’s the point? I don’t need another tie! Madison: It’s not the gift. and it makes me very sad. Ever since Mom and Dad died. You are almost 40 years old. Applying Pressure 149 . I don’t feel Christmas in the way I used to. some of the siblings decided they liked giving presents to one another. married. but the thought that matters. 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. the oldest and youngest Jones children. Humor often works to break the tension of the room. I want to say something. That will just make a bad situation worse.Tactic 38: Break the Tension Tension is inevitable in most negotiations. Example 1 The four Jones kids grew up. Stay alert and watch for clues that a negotiation is about to get out of hand. get over it. especially between Madison and Cory. so you can find a way to quickly neutralize it. Tempers flare and people say things they shouldn’t out of anger or frustration. Madison: Okay. I know that you all think I’m silly about wanting to exchange Christmas presents among the adults. it was easy to agree on just giving presents to the children. When all of their children were small. Cory: Madison. It was a tradition in the Jones family to spend Thanksgiving dinner arguing about how the family wanted to celebrate Christmas. We can’t afford to buy each other things we really need.


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.

Example 2
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.

Applying Pressure


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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.


Making Progress


” Can I color now? You said we would color later. The day-care worker wanted to take them outside for a while so that he could visit with his friend.: Julie: Dara: Julie: Girls. but since the other children in their room were not there. 154 50 Practical Negotiation Tactics . how about going out to the yard for a while? You can swing or play ball. Mr. who was outside with older children. they were the last children left in the playroom for the remaining two hours of the day. and that doesn’t happen without compromise. Then we can color. Example 1 Julie and Dara both attend a local preschool. If I can be the Princess. each side must decide whether or not one more compromise will produce an agreement that they will later regret. Julie wanted to play “dress-up. Dara. I want to play “Prince and Princess. the exchange will be between things of equal value.” Dara. If there is resistance to compromise.: Julie: Dara: Mr. Okay. however. the individual might be afraid that the exchange isn’t equitable). C.” but she needed Dara to play with her. was ready to color. Both of the little girls liked to play ball when they were outside. (In a successful negotiation. 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. it is better not to compromise. or maybe tomorrow. One day. C. they would have to play ball with older children. When that point is reached.Tactic 39: Compromise Negotiations are successful when all parties walk away with an agreement they are satisfied with. Isn’t it “later” yet? Right now would be a good time to go outside. not the Prince. don’t you want to play? We could color before your mom comes. I want to play “Princess” and I want Dara to be the “Prince. At some point.

According to the city’s zoning laws. and they still had time to color. C. 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. The neighbors: The neighborhood has four concerns: Theater patrons will be taking up scarce on-street parking spaces.Mr. the parking lot will start to look trashy. and teenagers attracted by Making Progress 155 . When his variance application was made public.” No. the owner had to supply additional parking. Conclusion The children stayed inside and played dress-up. or apply for a variance. C. The existing parking lot didn’t meet the current parking standards for that size theater. The owner and a small group of neighbors met to talk about these problems. The owner decided to try for a variance. wouldn’t you like to go outside first? After you swing for a while or play ball. you can come back in and play “Prince and Princess. We want to play dress-up and then color. Mr.: Julie: Hey. 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 did all the compromising they were willing to do. however. there will be an overall increase in traffic coming through the neighborhood and vehicles will be turning into and leaving the parking lot. neighbors became concerned about the changes to 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. failed to offer the children something that was as important as the plans they had made. We don’t want to go outside.

with your plans to put the entrance of the theater on the east side of the mall. and we’d like to keep it that way. driveways on the south side of the mall are along the east and west side of the parking lot. if I agree to move the theater entrance to the south side. I’m afraid. as you said. In fact. lights in and out at night can be very annoying. I could put a privacy fence along the east and west—at the backs of your yards. The neighbors: Owner: 156 50 Practical Negotiation Tactics . and break in his door. Not having in and out traffic to the south of the mall is just not very practical. We’d like you to prohibit cars from entering or leaving from the south lot. only when that lot is full would cars come around the mall and park on the south side. not having direct access to the south lot from the street would be unworkable. You could have all of the traffic enter from the north lot.the theater will start to hang around and maybe wander around our yards at night. but it’s not ever full. Right now. We hope you’re right. We’d really like to block off that cut-through and have the theater face the south. the north lot is used more. Right now. the closest parking to it is along Elm Street. Owner: You know that there’s always plenty of parking in the south end of the mall’s parking lot. What if I changed the entrance to the middle of the lot? That way. Many of our homes back up to that lot. And. All a patron has to do is park on Elm and walk beside Joe’s yard through the small alley there. So. the south parking lot has not been used much. We’re just not convinced. The fence would shield neighbors from the lights from the vehicles and block the walking access through the alley. With the Comedy Club and the grocery store on that end. even though I’m not adding any parking. I’m certain the lot will accommodate the theater crowd without increasing the parking on your neighborhood streets.

Teens can form into gangs if left unwatched. however. Making Progress 157 .The neighbors: Owner: The neighbors: Owner: But we use those side drives to get to our garages. and make sure the parking lot is kept clean. 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. Conclusion Both sides had to give up something on certain items in order to reach agreement. But you’re going to have to have some kind of security as well. the neighbors reported that they were very happy with the way it all worked out. Now you’re talking about considerable expense. The fences created a buffer from the lights and noise. The fence would help with the vehicle lights and buffer this noise from the kids who hang around. Agreed. And a year after the theater opened. then will you agree not to push for increased private security? Yes. The compromises were what everybody could live with. set back a driveway width. and they discouraged patrons from parking on neighborhood streets. add a new entrance into the south lot. If the fence was set back the width of a driveway onto your property. but the privacy fence has to be landscaped so that it doesn’t look like a ghetto wall. If I agree to move the theater entrance to the south.

She learned that everyone in the neighborhood had complained at least once. Joan was already pretty tired.m. but be friendly. because you are the one to set the tone for agreement. The dog was Mrs. Your opponent might give in readily.Tactic 40: Be Friendly Being polite. thinking that you will be just as easy to work with on the sticky issues. Lonely. and sleeping at night was already a difficult proposition! When the neighbor’s dog began to bark at 3:00 a. She sought advice from the family on the other side of the neighbor with the barking dog to see whether this 3:00 a. they had gotten nowhere. and didn’t stop until 6:00 a. Mrs. If your opponent is aggressive or angry. just forget it. incident was usual or unusual. Lonely’s only companionship. Joan decided to at least try and talk to the neighbor. 158 50 Practical Negotiation Tactics . and what kind of complaints might have already been made. She didn’t believe her neighbors ought to complain about the barking. and I just moved in next door. professional. Example 1 Joan was new to the neighborhood. Close your windows at night and don’t listen.m.. and pleasant always enhances one’s ability to reach an agreement. 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. so her neighbor’s barking dog came as an unpleasant surprise. This gives you an advantage. Present your position forcefully. and because she was hard of hearing. Joan had a new baby.m. your friendliness might disarm and relax them to the point where they begin to talk about their priorities and objectives. Lonely: If you’re here to complain about my Rocky. but going out of your way to be friendly is an especially helpful tactic. respectful. she just didn’t think it was a serious problem. and started to get upset. and that as angry as they were. Mrs. I’m Joan. Joan: Hi. They might even start to underestimate your negotiating skills.

too. I sure hope he starts sleeping through the night soon. I stopped by and visited with him over the fence this morning. but she took her baby and went to visit Mrs. I’d like to introduce you to my new baby. is a really sweet dog. then. Lonely: Joan: Mrs. it’s probably because they just haven’t had the time to get to know him. Why. Lonely: Joan: Mrs. Lonely: Joan: No. (Joan’s sleep was disturbed by another night of barking. I can’t pay for something like that. I’ve only got my Social Security. isn’t he cute! He’s a handful. Lonely: Joan: Mrs. by the way. I know that some of these people around here don’t like him. no. Well. don’t worry about that.) Hi. and I’d like to have him stop by and look at Rocky—would that be okay with you? Well. Here’s my little angel. Who. Mikey. He’s a real comfort to me. When he does. My friend wouldn’t charge anything for talking to us about Rocky and maybe giving us some advice. Well. I’ve got a friend who is a veterinarian. Making Progress 159 . How long have you had him? Almost eight years now. Lonely: Joan: Mrs. I might have to talk to you about Rocky.Joan: Mrs. sure. I need to get the baby home. Do you think his age has contributed to some of that? You know. not at all. The barking at night has been mentioned to me. I guess so. Maybe I could come back tomorrow and bring him? Oh. Lonely again. though. I just wanted to come by and introduce myself. I guess that would be okay. He’s been keeping me up at night. I’ll see you. No.

Lonely and Rocky. its 150 management and sales employees could continue to work in Happy City. 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.S. the mayor called and asked for a meeting with Company ZZZ officials. that the press got hold of the story of our company’s activities before we could call you to let you know. When he heard the news on the radio. Lonely didn’t have to pay for the medicine she could not afford.Conclusion Joan’s friendly approach enabled her to understand Mrs. Joan took up contributions from the neighbors. recognizing that the layoffs would be an issue in upcoming local elections. that’s very understanding of you. and Mrs. It’s very difficult to make a move of this type without having it leak out. I think that if you could have let me know ahead of time. U. Company ZZZ. Under its new corporate structure. Here’s how the meeting went: Company ZZZ: We’re very sorry. you would have. They anticipated that it would be an unpleasant meeting.A. of course. Lonely’s needs and arrive at a workable solution to the problem. Example 2 Company ZZZ planned to close its manufacturing plant and lay off 300 union employees. Mayor: (very friendly) I understand how these things happen. agreed to meet with the mayor. After Joan’s veterinarian friend visited with Mrs. 160 50 Practical Negotiation Tactics . he prescribed medicine that gave Rocky a more regular sleep schedule. Hearing about this from the press obviously puts you in a very embarrassing situation. overseeing a factory in Mexico and selling products in the states. Company ZZZ: (surprised) Well. The barking all but stopped..

They need a really good deal on the plant price. the city has a potential buyer for your plant building. Would you be in a position to talk to me about such a deal. Mayor: Great! Let me know when we can talk again. We just haven’t heard anything yet. I am certain that you would like that kind of “good” publicity coming quickly after the recent bad publicity. because I’d hate for us not to make an appropriate pitch to them. 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. 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. We recognize that your new corporate owner is a large company located in Malaysia. Many laid-off employees did indeed find new jobs at the plant. the 150 management/sales jobs did end up moving to Mexico. The mayor was able to broker a deal for the “disadvantaged business” to buy the plant and convert it to a different widget maker. and the mayor was reelected. Company ZZZ: I’m not sure what to tell you on that. Mayor: Please let me know as soon as you can. or would we need to involve the Malaysia group? Company ZZZ: Certainly. The buyer is a “disadvantaged business” we have been working with for some time. This strategy worked. By the way.Mayor: I wanted to meet with you so we can take the necessary steps to keep the 150 jobs here. You’ve been very understanding about this. Unfortunately. Making Progress 161 . so we need to understand how we can affect their decision on keeping an office here. and I want them to know that. It’s possible that some of the 300 laid-off employees will find work at this new endeavor.

this time in front of a hidden recorder. Susan wanted to negotiate with Alexis to “pool” their money so they could buy something together. the investigator. Example 2 Three men were meeting to discuss a charge of sexual harassment that had been made against Stuart Jones. the accused. Susan denied it. thus becoming a source of embarrassment. and Jones. had $40. or simply “bad faith” methods have been used by the other party. are talking about a possible settlement of the issue. Alexis then played the tape for her father. Michael Wood. The effect on the other party might be even more substantial if lies. and Alexis. Conclusion For the first time in her life. Alexis. or used to pressure the other side to agree to certain demands. were on vacation with their parents in Myrtle Beach. the younger sister. but Susan had only $20. 162 50 Practical Negotiation Tactics . South Carolina. Example 1 Susan. age 15. Then he played the tape. Fred Adams. who was disappointed to hear that she might propose such a deal. She borrowed a tape recorder so she could ask her father if this was a fair deal. Somehow. age 14. The two sisters had saved up a little money so that they could buy souvenirs. until Susan said they would evenly split what they bought. Susan repeated her demand. Alexis agreed. Jones’s supervisor.00. He asked his elder daughter about the arrangement. threats. Susan understood the impact a tape recording can have when it reveals a lie. Alexis knew this was not fair.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. They might worry that the tapes will be made public or given to others.00 to spend. She agreed that her proposal was not fair and that she had tried to take advantage of her younger sister.

I’ve brought a tape recorder with me. Starr.Adams: Jones: Wood: Jones: Wood: Jones: Wood: Jones: Wood: Jones: Adams: Jones: Adams: Jones: Adams: Tell me again. and now I’ll ask you to repeat your answers—on tape. Well. you are aware that the next step in this process is to ask witnesses to come forth. Jones. stares.” meaning something other than copies? No. he also lost his negotiating position. Stuart. (a long pause) I want to see my lawyer. Mr. So. He failed to think about what might be the next step. Ruiz and Ms. I simply asked her to make copies for me as quickly as possible. Conclusion Jones had knowingly lied when he denied the charges. And please describe your general manner. You never touched any part of her body? Not even accidentally? No. Mr. When Adams set the tape recorder on the table and revealed that he had witnesses. But by refusing to repeat his answers. No one could have possibly misunderstood your intentions? No reasonable person. So you refuse to repeat the answers you just gave us? Yes. I think I can write my recommendation. and gestures did not have a single hint of sexual implication or innuendo? None at all. exactly what you said to Ms. Your request. Making Progress 163 . to quote you. Appleton both claim they saw the incident and will testify. Jones suddenly realized that his strategy would not work. And you did not threaten her job if she did not. “Do what I want.

Oh. Their dad instructed them to share the candy bar. because you did the cutting. with the remaining part going to the person who did the dividing. Realizing the potential of getting the “smaller half.Tactic 42: Split and Choose When two parties both desire something that can be shared or divided between them. What is it? Maria: Father: 164 50 Practical Negotiation Tactics . Roberto will get to choose which half he wants. Maria and Roberto: No. is usually careful about dividing the object into two equal parts. which certainly is large enough (he naively thought) for two young children to easily share. the classic “split and choose” tactic might be the best way to settle the issue. Many of us learned this one from our parents: After two people agree to the strategy. 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.… No way! Haven’t you two heard of ‘split and choose’? It’s a fair way to divide things. Maria: Roberto: Maria: Father: Father: We can’t share it! It’s in one piece! I’ll eat half and give you the rest. of course.” the divider. one person is given the task of dividing the object(s) into two parts. so I’ve got to cut it into two equal pieces or else he will choose the bigger one? Exactly. Maria. take this knife and slice the Snickers into two halves.

so we should be able to divide the property fairly. Archie: That’s true. even children. They all have a great view and are equally desirable to build on. but is not sure how to arrive at a fair split. I don’t really care which lakefront lots I keep. Archie: I really don’t care either. Clarence: Right. They have a recent appraisal that values the property at $150. Clarence agrees to divide it. Clarence and Archie. 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. but the appraiser pointed out that the seven one-acre lakefront lots are considerably more valuable than the other seven lots. Lots must be at least one acre to be developed. according to county deed restrictions. 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. Then I will choose which parcel I want. both parties. Archie is ready to build a retirement home on the property. Deal? Clarence: Sure. Making Progress 165 . Example 2 Two friends and business partners. that sounds fair.Conclusion When two people desire the same object and it is something that can be divided in some way. Archie: Here is the map.000. jointly purchased fourteen acres of lakefront property several years ago. Give me the map and a pencil. There is only one place for an access road that must serve all lots. 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. and wants to divide it into two separate parcels. quickly recognize the fairness of the divideand-choose method.

Conclusion Clarence divided the fourteen acres into one parcel with three lakefront lots and six other lots. and the second parcel with four lakefront lots and one other lot. Which would you have chosen? 166 50 Practical Negotiation Tactics . Archie chose the parcel with the three lakefront lots. and both men were happy with the arrangement.

delivery was limited to a small geographical area. With a great deal of effort.” thus extending the scope of the negotiations. 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 .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. “Okay. miles from their home. we’ll take the suite if you’ll throw in free delivery and set up the furniture. What started out as a single issue is now a combination of a major issue and a much smaller issue. However. Example 1 Brenda Davis is always thinking about the repairs that might be required on an item. and the delivery carrier doesn’t set up mirrors. he also set up all of the furniture in a second-floor bedroom. so the salesperson delivered the suite himself. Jason was having a hard time getting the salesman to lower the price. etc. Conclusion The amount the couple spent was fairly large.” Many people have witnessed or used this effective negotiating tactic. supposedly the bargainer in the household. Brenda did her part when she said. His tactic was to throw in a “nickel” in order to make lots of “dollars. attach legs. is expected to dicker over the price. because a “nickel” item has been added to negotiations about a much more significant item costing “dollars. They recently purchased a new bedroom suite after they carefully priced comparable furniture all over town. Her husband Jason.

the two sides had been engaged in considerable bargaining over an improved medical insurance plan (“Health Plan A”) costing hundreds of thousands of dollars. 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. At the end of negotiations. 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.important item. it can be a dealbreaker. If used correctly—at the very end of a negotiation—the tactic can usually provide a small gain. “Okay. In one case.” The company negotiator yielded to this small-potatoes counteroffer in order to win agreement on the health plan. 168 50 Practical Negotiation Tactics . If one party misjudges the situation. This experienced bargainer said.

decision-making meetings. People tend to make an effort to put their best foot forward. trustworthy. I’ll take the color TV. This creates what is called a “halo effect. Example 1 Donna: Mom said to take what we want from the old house and toss out the rest. Donna: Okay. Kathy: But they are a matched set.Tactic 44: Make Use of a Positive “Halo Effect” It is common in interviews. You can go first. Donna: I’ll take the bar with stools. Kathy: I suggest we take turns choosing which of these things we want. and all the rest is small junk. or knowledgeable. Kathy: I’ll take the pool table. Kathy: Then I’ll take the couch and love seat. Donna: No way! These are the last two pieces of furniture. but they are two pieces of furniture. Kathy: Not if you accept your logic! (Pause) Donna: You’re not being fair… Making Progress 169 .” Having a member of a negotiating team whom the other side thinks can do no wrong might prove to be advantageous. Donna: They match. and performance evaluations for people to come across as likeable. 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.

and he has always struck me as an honest person. what can we do? Give me the couch and love seat! No. What for? Tell him the situation. 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. (Pause) We’ve got to settle this today and get this stuff moved. Conclusion Kathy and Donna needed an arbitrator to settle their disagreement. Let’s call Johnny Ryan. I want the love seat. He’s our cousin. I want the stools. I trust his judgment.Kathy: Donna: Kathy: Donna: Kathy: Kathy: Donna: Kathy: Donna: Kathy: You’re not! (Pause) Well. Johnny had the “halo” of an honest person. 170 50 Practical Negotiation Tactics . The union negotiators. with a record of labor involvement that included three recent strikes. Example 2 During a heated labor negotiation. and ask him if the couch and chair should be one item or two. He might or might not have also been a good arbitrator. and if the bar and stools should be one item or two. Good idea. but Kathy and Donna assumed that one positive quality (honesty) would carry over to other areas.

the former union president. He solemnly told the union negotiators that he had been hired to review it. but his mere presence caused the union leaders to accept a management point as valid. Boston went to the negotiation table with the management team.simply did not trust the management team. but the power of the so-called halo effect was great. 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. They might have stretched his halo farther than his expertise and experience warranted. Boston was widely known as a totally honest man who speaks his mind. when negotiations again stalled on a retirement plan issue. without any reservations. The union accepted the proposal. Making Progress 171 . On Monday. the consultant did not speak. This time. even if the proposal appeared to be valid. the city management again hired Boston. as a consultant to review their proposal. During the break. He said he believed that it would work as presented by management. thus bringing the negotiations to a conclusion. the management team hired Sam Boston. Two weeks later. and that he did. The teams took a weekend break from the stalled negotiations.

They sold for: $225.Tactic 45: Use Facts Fact-gathering must be part of the preparations for every negotiations session. We love your house. Example 1 Henry and Maria Lopez are interested in a house that lists for $275.500. $229. but the right facts presented at the right time can chill or astound and completely turn things around. Being able to present them at the most appropriate and critical times has made the difference in countless negotiation situations. I’ll get back to you. the other party will ignore or refuse to believe the information. Here’s a list of the five that are about the same size as yours.000. $ Sam Jones: Sam Jones: 172 50 Practical Negotiation Tactics . and $237.000. 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. has owned the house for 24 years and is downsizing to a condo. The owner.000 under the listing price! We realize that. and we are countering with an offer of $250. $235. (Next day) We’ve reviewed the records you’ve produced. Sam Jones.000. Sometimes. This offer is for more money than any four-bedroom houses on this neighborhood list. but we feel that it’s a fair offer.000. but you’ve priced it way too high. but the key is to gather facts that you might need—not just the facts that you will need. What? That’s $35. They believe it is overpriced. Henry Lopez: Sam Jones: Maria Lopez: Sam Jones: Maria Lopez: We love the house and have made a written offer of $240.

and wisely chose exactly when to present them in order to make his point.600 unless the company president approves. who was not particularly knoledgeable about real estate. That’s the bottom price. Supervisor: Well. The last 20 were over $2. Well… We have a written counter of $245. We accept. He found facts that supported his position. We’ve talked with purchasing and we have the authority to buy seven for $2.000 each.000.600 for a computer. Conclusion Hatfield had anticipated what his supervisor’s position would be. Order the new computers. No one can go over $1.Henry Lopez: Sam Jones: Henry Lopez: Sam Jones: Let us discuss this for a minute. Example 2 Supervisor: You know the policy. Conclusion The Joneses had based their asking price on the advice of a friend.400 each. Here it is. Hatfield: My staff has done a lot of research. I asked for a list of all new PCs bought this year. I’ll be… Okay. Making Progress 173 . if other departments have ignored the policy. and we know that only this model will meet our needs. Supervisor: If I okay this purchase order. let’s not worry about it. I’ll get called on the carpet. Hatfield: While I was at purchasing. You can’t pay more than $1. The facts presented by Henry and Maria Lopez caused Jones to re-counter their asking and likely sale price. and did his homework.

I’m sure you would not. 174 50 Practical Negotiation Tactics . Maureen: Well. Otherwise. but I don’t set the policy and I can’t make exceptions. Maureen. you know me. The effective use of probing questions can help achieve a favorable settlement. and they would all be unavailable to others. and help you point out inconsistencies in a position that might “lead” the other side to change theirs. They can help you identify or better understand what the other side really wants. I trust you. I can do that within the rules. reveal misperceptions or lack of knowledge about positions that can be corrected. Example 1 Maureen: What. But I can’t break the limit rule—it is an absolute rule here. Maureen: The policy limits a person to only take out three books at the same time? Jenny: Yes. Maureen: Well. can you check out two on a card for him? Jenny: Well. Would I do that? Jenny: Maureen. some people would have forty or fifty books out at the same time. I can’t check out these four books? Jenny (Librarian): That’s the policy. A maximum of three books can be checked out to a person at any one time. If you trust me. and two are for my husband. but you don’t want to jeopardize your job? Jenny: Yes. I want two of these. Maureen: So you trust me with the books.Tactic 46: Ask Probing Questions Ask probing questions and follow-up questions. yes.

Babu. Why? Some policy? Yes.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. and Kenzie. Brooks. it could kill us. Mary and Kenzie? They are 2-3 pay grades below us. (Next day) Do you have the policy about giving out product sales information? No. Making Progress 175 . Who does have access clearance? Mike. They say it’s a security issue. Can you get me the number? Sure. Example 2 Jack: Mark: Jack: Mark: Jack: Mark: Jack: Mark: Jack: Mark: Jack: Mark: Jack: Mark: Jack: Mark: Jack: Mark. Mary. But this forces us to make decisions without complete information! Yes. What’s the policy number or date of approval? I don’t know. Sue. Security? Right. but it’s because you don’t have access clearance. are you sure I can’t get your information technology people to give us direct information on product sales? No. Jay. and they don’t even have a use for the sales data. If that data ended up in the wrong hands. we can’t do that. I couldn’t find anyone who knew it.

… (Next day) Mark: The vice president said you can have access if you sign a security card like everyone else who has access clearance. 176 50 Practical Negotiation Tactics . I’ll sign now. Once he discovered that employees in lower pay grades had access clearance. When can I get the data? Mark: Today. that’s been the policy since I’ve been here. if we can have access? Mark: I guess so. Jack was able to receive clearance as well.P.Mark: Well. His probing questions turned up a critical fact. Jack: Here.” He intended to do this until he hit a dead-end or was able to find a solution to his problem. I’ll get it for you ASAP. Jack: Can you ask your V. Conclusion Jack continued to probe by asking why and who in order to find out more about “the policy.

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. 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. hours. T Reaching Agreement 177 . They bring it out when a dispute arises. 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. 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. this tactic can produce an agreement. When two parties believe they have an oral agreement. Tactic #49 (Final-Offer Arbitration) should bring about a settlement. If friends or neighbors need to settle something but prefer to avoid the negotiation process. and the child learns an important lesson about life. days. 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. or even months after the first offer is presented. and the classic Walk Away (Tactic #48). If both parties desire a settlement but cannot seem to reach it through the usual give-and-take process. this process can easily result in a final 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. In this process. When multiple issues are at stake and most have been agreed upon during negotiations.

Tactic 47: The Premature Congratulation This tactic draws its strength from timing. The bargainer skillfully 1) begins the congratulation sentence “I agree…”.C. D. she continued to speak: “…as long as you agree to drive us to visit my mother on her birthday. As he hugged her. After days and weeks of on-again. His wife had carefully planned her exact “premature” vacation agreement. 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.” Conclusion The husband was so excited about visiting Washington. Near the end of a particularly anxious bargaining session when there was little time left to negotiate. Example 2 Negotiations can take a long time and incorporate many issues. Let’s do go to Virginia Beach and Washington D.C. Larry Snyder gets bored staying in any one place for many days.…” Larry was very pleased that his wife was agreeing to the idea he had been trying to sell. one exhausted negotiator saw that his team was equally weary and 178 50 Practical Negotiation Tactics . 2) allows the other side to feel the release that comes with completing the bargain. 3) and adds one last key demand to the congratulation sentence. off-again discussions. but his wife Nancy likes to stay put and relax. Example 1 Many husbands and wives have different ideas about how they’ll spend their vacation. Nancy brought up the subject of vacation again after dinner. “I’m thinking of agreeing to your plans for vacation. They both have stressful jobs and look forward to their annual vacation together. Weeks of stressful meetings cause both sides at the bargaining table to look forward to its conclusion. She said.

he turned on a large warm smile and extended his hand to shake. One of the best pieces of negotiation advice is to remain fresh. but we agree to everything in your final proposal…” Members of my team shouted hooray. My team was afraid we would not even come to an agreement.” Bob: Ted timed this perfectly. as the negotiator came closer. There were grins and handshakes coming from the other side. I felt the tension in the room. but acceptable. but held firm on remaining operating principles. “…as long as you give us a 45-day probation period. and rested. The old agreement specified a 30-day period. (This is a bad position to be in. but the other side continued to ask for 60 days. My team had convinced me that doubling the time frame would create a real problem on the shop floor. symbolizing that he was agreeing to the entire final offer. we made some small concessions on financial matters. In our last offer. Therefore. When the chief negotiator emerged with his team and headed toward my team. We all knew that it could come down to agreement or strike. The celebration had begun. However. One operating issue involved the probation period for new employees. It took only a few minutes of caucusing for my team to convince me that a 45-day probation was costly. and this skillful negotiator let them feel the happiness and security one feels when the fear vanishes. Most people didn’t notice that the negotiators had not finished their hand shake… Ted: Then Ted continued his sentence with. fit. Ted said.) Here’s what happened: Bob: I knew that the other side was similarly harried. because it makes you pretty vulnerable. It was so close.almost willing to accept any deal. Reaching Agreement 179 . “It was hard for us. we held firm on this and did not discuss the probation issue and many other “dead” issues for days. but also that they sensed the weariness of my team.

180 50 Practical Negotiation Tactics . knowing that it will probably be agreed to in order to continue in the euphoria of the moment.Conclusion This “premature congratulation” tactic can only be used successfully at the very end of an unsure and shaky negotiation. However. The negotiator makes a big show of agreeing and allows the other side to bask in the glory of a deal completed. the negotiator skillfully finishes his words of congratulations by inserting one last key demand.

what can you do on a 36-month lease? Reaching Agreement 181 . You had time to assess my car. how did you like it? Jay: Okay. You bought your wife a new van just last year. but I thought I might want to try a new Highlander. Jay: Hi. Jay. Whether you are really bluffing or you are serious. Sue: Let me get you the keys so you can take this one home overnight to see how you like it. or go after you and perhaps make a new concession in order to get you back to the table. The next morning. a veteran salesperson. I like it.) Jay: Sue. Example 1 Jay Vahaly has purchased three new Toyotas from Pembroke Toyota over the past twelve years. and he can simply buy it when the lease expires. My name is Jay Vahaly. all from Sue Wilson. He stopped by Pembroke one day to look at the new models. I don’t want to negotiate. too.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. I’ve worked with you before. Sue: I remember you. Sue: Well. Jay. but my Avalon is a good car. if I roll over the lease to a Highlander. right? Jay: Yes. Your opponent will have to either let you go and run the risk that things are really over. and the lease on my Avalon is about to expire. He really likes it. the following exchange occurs. here are your keys. but his Avalon has been a good car. (Vahaly drives the new Highlander home. be sure you think this through beforehand.

Jay. they came down to $199 more on a thirty-six month lease. He effectively used the walk-away tactic to let Sue know that he was firm on the price. you can turn in the Avalon and get the Highlander for only $249 dollars more per month. These Highlanders are hot items! Jay: Well.) Conclusion Jay knew his BATNA (best alternative to a negotiated agreement): to go somewhere else if the deal isn’t good enough. They’ve talked about retiring in recent months. Sue: I’ll try. Sue: Sorry. (He walks away) Sue: No. Jay: What? I was thinking the lease payment would be. I thought I’d get a fair deal. Jay accepted. He was prepared to keep his Avalon if the lease was even $1 more than his limit.Sue: Give me a few minutes and I’ll find out … (20 minutes later) Sue: Well. (Jay got in his car and drove home. I’m disappointed. but 182 50 Practical Negotiation Tactics . Please go back and work out a lower lease payment. Jay—wait. at most. Jay. Sue called him as soon as he walked in the door and offered another $50 break on the lease. Example 2 Larry and Judy Bizannes own the Bizannes Music Mart. Let me try again. a successful musical instrument sales and rental store. $100 more. (15 minutes later) Sue: Well. That was the figure he was looking for. Jay: I guess I’ll go to Dixie Toyota and see what they will do for me.

and I’m prepared to offer you $4. Michael: Well. today. Two months later. Michael: I have a check right here for 4. Michael calls on them again with a check for $5.0 million. Reaching Agreement 183 . which the Bizannes accept. One day.5 million. a local developer. Michael Roberts. but their continued walkout convinced Michael that they would hold firm. and I only need your building to own it.) 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. Larry: Yes. let’s eat lunch. go back to your office. How’s business? Larry: Great! I’m surprised to see you again. He met with Bizannes twice before. Larry: Judy. Larry. Larry: Michael.) Larry: Michael is here again. after no contact from Larry or Judy. and we gave you our price. come out here! (Judy comes out from the back room. Judy: Larry. our accountant said it’s worth $6 million.5 million.5 million.5 million for the building. I still want to develop this block. they were prepared to accept $5. (Judy and Larry walk into the back room and close the door. You rejected it. Larry. and he is offering us $4. you’ve already told us that. with a certified check. so why are you here? Michael: I’ve discussed it with my partners.both of them love their store. and I’m not interested in less. In reality. visited their store. What do you think? Judy: Larry. Michael: Good morning.

I offered it to you for nothing.000. so they generally give up some ground and try to make the offer appear as fair and reasonable as possible. I won’t take it. both sides have agreed in writing to accept the arbitrator’s decision. Lynne and Gary bring the restored Singer to Jenny’s house. but they wanted to give Jenny $500 for her “share” of the machine. In final offer arbitration. One day Lynne dropped by for a visit and the discussion turned to the old Singer. 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).Tactic 49: Final-Offer Arbitration Mediation and arbitration are two well-known ways of resolving sticky disputes. Each party wants their offer chosen. The following discussion occurs: Jenny: The old machine wasn’t worth $50 when you took it. which she has kept in a barn for over ten years. Lynne told Jenny that she and her husband Gary have restored two other Singers. Lynne: No. Jenny has an antique Singer sewing machine. Keep the $1.000. We have a few dollars invested in parts and we had fun working on it. Jenny told Lynne she could take the old Singer that she has no interest in (and doubts that it is worth restoring). Jenny told them to sell it. That was the deal. Let’s split the money. In arbitration. In most arbitrations. Six months later. 184 50 Practical Negotiation Tactics . But he isn’t allowed to try to find a “middle ground”—just to choose one position or the other. Jenny: No. and would be able to restore hers as well. Lynne: No! I suggest that we each write down our position and let Dad choose one of the two as the final decision. In mediation. Both involve the use of third parties who are objective. They inform her that they put the machine on e-Bay and have an offer of $1. which is generally voluntary. the arbitrator is given the authority to make the parties comply with the final and binding decision. Lynne responded that this was their intention. the mediator works with both sides to resolve certain issues but has no authority to make binding decisions. Example 1 Jenny and Lynne are sisters.

At best. Any increase in value was due to the work of Gary and Lynne. Tina: Good. I’ll buy that. Ralph: Right! (Friday at 3:00 p.m. but we’ve made no movement on any of them since we started. Example 2 Ralph: Well. based Reaching Agreement 185 . They should get the other $950. on Friday. (One week later) I think Jenny’s position is the most reasonable. so I am invoking the finaloffer arbitration ground rule we have in place. first on the health insurance co-pay. Then we both submit our final offers to Judge Ryan within 48 hours. The union’s position could have run into millions of dollars. Conclusion Jenny’s final position was that she receive $50—the maximum possible value of an old “junker. My troops are getting restless.) Judge Ryan: Here is my written. Their father found Jenny’s position to be the most reasonable. I can’t see any way to reach an agreement. since he could only choose one offer.” Lynne proposed a 50-50 split. the old machine was only worth $50 when Lynne hauled it away. binding decision on the three items.Jenny: Dad: Okay.m. Ralph: I know. and meet back here in 72 hours—3:00 p. after six weeks of negotiating. Tina. As a brief explanation. he did not need to “haggle” with them. we are down to only three unresolved items. I have chosen management’s offer to keep it as it is under the current contract. Tina: Yes.

Well. It will only cost $120. and an item that large should have been negotiated at the table. nor why their method was superior. on the merit pool distribution method issue. I’m not happy with your decisions. but we agreed to this process. Conclusion The final-offer arbitration process enabled the parties to gain a fast. reasonable resolution to their last three unresolved issues. At least we both saved time. I’m sure you realize that we could have taken six more weeks to reach the same point. Second. Ralph.Ralph: Tina: on last year’s data. on the clothing allowance. 186 50 Practical Negotiation Tactics . Now let’s get a signed contract. I have chosen the union’s final offer. Finally. money. and stress. I have chosen management’s offer because the union did not justify why the past practice should be changed. and peacefully finalize a contract that contained several important gains for both sides.000—less than 1 percent of the total package. No increase has been given for six years.

not the furniture. we won’t be involving our real estate agent. They were not the only couple to come to the open house. and one of the other couples looked very interested. and felt that they would have to work fast to make an offer before someone else did. 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. all the usual stuff in a sale. We’d like to make you an offer of $150. and decided to stop by to see if they liked the house. seeing the agreement in writing will force both sides to acknowledge what has been said and agreed to in the negotiations. They saw the “For Sale” and “Open House” signs. At the very least.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.000. everyone is busy grappling with the details of the negotiations.000. Bill pulled the seller aside. they looked at this particular house on their own. however. Seller: We’re asking $152. The goal of recording the precise details is to either avoid any misunderstandings or address them before the talks conclude. 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. If we shake hands on it right now. Bill: Reaching Agreement 187 . Obviously. Seller: Yes. Example 1 Bill and Paulette had been house-hunting for some time. Bill and Paulette fell in love with the house. and while Bill and Paulette had been using an agent to help locate houses. During a discussion. The owners were selling the house without a real estate agent. They finally looked at a house they really liked.

and the two area rugs. The supervisor assured the employer that there was no basis for her complaint. I think we can work something out. Let me just get the standard “offer of sale” form and fill out what I hear you saying. Conclusion The seller had always intended to leave the garbage disposal. and the two area rugs were specifically included. the hutch. the refrigerator. In her complaint. If it’s what you meant. he listed an attached hutch in the kitchen. but I’d like to make sure there are no misunderstandings. then we have a deal. Bill: (pleasantly surprised to learn that the garbage disposal. and the garbage disposal. all window blinds and drapes. the house is yours. and had been prepared to drop his price to $145. he listed the stove. real. Sign here. in fact. look this over. The supervisor pointed out that he had a staff of 20 or so women. and two area rugs. The employer’s affirmative action officer looked into the charges and determined that 188 50 Practical Negotiation Tactics .Seller: Just a minute. Example 2 Monica brought a sex discrimination charge against her employer.000 and added the additional items to “sweeten the pot” and give Bill and Paulette a deal they couldn’t refuse. since he probably would have missed them) Yes. he began to have “problems” with her job performance. and that no one would ever say that he was guilty of any type of sexual harassment or sexual discrimination. that’s what I meant. Seller: Okay. and that the problems with her job performance were. a public agency. the hutch. (The seller recorded the offer of $150. and when she refused. she said that her supervisor had repeatedly asked her out. When he had the chance to put the deal in writing.) Seller: So.000.000. It worked. In the section for fixtures and miscellaneous items to be left on the property. he left the price at $150. Under the section for appliances to be left on the property.

The employer’s lawyer told Monica’s lawyer that the employer was ready to settle the deal for the $100. but it’s not standard when a complaint is formally withdrawn. He’s happy to prove that in court. the supervisor says he did nothing wrong and that Monica just misinterpreted what he said. Withdrawing. by this time. and must agree not to tell anyone about the $100.000.000.there was little basis for the complaint. But the employer doesn’t want to go through the expense and publicity of a trial. You’re just trying to make it seem as if your supervisor did nothing wrong. The supervisor insisted that if the employer felt he had to settle.000. Why’s that? Well. found a new job and wanted compensation for “embarrassment” and lost wages in the amount of $100.000. settling—What difference does it make to her? She’s getting her $100. but said that fighting the charges would be a long. my client is supposed to formally withdraw the complaint rather than just settle it. Monica had. Monica’s lawyer (She): Employer’s lawyer (He): She: I was surprised by your settlement documents. even though we’re certain we would prevail. even though you are paying Monica because we can prove he did do something wrong. He offered to send settlement agreement papers to her. then Monica had to acknowledge that the supervisor did nothing wrong. Look. you didn’t mention in the agreement that in exchange for the $100. It might be standard when there’s a settlement. and expensive matter.000 without actually having to prove anything. 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. drawn-out. And the confidentiality clause is standard. I’m He: She: He: Reaching Agreement 189 .

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 when all that was asked for was $100. I’ll take your offer back to her and let you know. but word did get out that a public agency paid $200. It would have been a better strategy in this situation to raise the issue of withdrawing the complaint during the actual negotiations. to his disadvantage. Monica accepted the $200. There was a confidentiality agreement.000 just to get the employee to “withdraw” the complaint. 190 50 Practical Negotiation Tactics .She: authorized to pay $200. but that’s under the same conditions—the claim must be formally withdrawn and Monica can never reveal the amount of the settlement.000 and the conditions of the offer.000. It was made clear that the employer had paid the additional $100.000.

If the agreement reached at the time had been put into writing with all three sisters signing it. Certainly someone has said to you. it is much more effective in the long run when the parties enter into “win-win” agreements. of course. Unfortunately. most certainly needs to be in written form. In Tactic #17 (Package Items). As these examples of personal and business negotiations show.” Clear communication is essential if you want to reach an agreement and have it abided by. a written document is hardly necessary. “Oh. However. Reaching an agreement is the first step. Think of how often you have said to someone. rather than attack each other. One way to help the parties abide by an agreement is to put it into written form.SECTION IV: PUTTING THE AGREEMENT IN WRITING s you can see. however. commitment. “That may be what I said. and when they agree to solve problems together. A Communication Hearing is not necessarily the same as listening. it would have been easier to resume negotiations at a later date. depend on the kind of negotiations in which you are involved. Putting the Agreement in Writing 191 . when they engage in honest “give and take” negotiations. A union contract.” By the same token. Putting an agreement into writing serves three purposes: communication. I thought you said something else. When two friends agree on what movie to see. even an informal agreement benefits from some type of written documentation. but it was not what I meant. but some of the decisions were put off for a couple of months. the three sisters reached an amiable agreement. reaching an agreement is sometimes a long and difficult process. operating under an agreement after it has been reached can be even more difficult. talking is not always the same thing as communicating. then the parties have to abide by the agreement. and contract. The degree of detail and formality of a written document will.

His mom could more easily enforce the agreement if she had it in writing. 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. When communication is limited to the spoken word only. pictures. If Jason fails to live up to his side of the deal. Jason agreed to change his study habits if he couldn’t pull his grades up by the end of the semester. you have created something tangible that can be referred to in the future when memories become fuzzy. or movements. the price is spelled out in the loan document as “twenty-two thousand. sounds. The receiver has to decode the message being sent by trying to understand and interpret the words. or movements being used by the sender. 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. 192 50 Practical Negotiation Tactics . Commitment Reducing an agreement to writing often forces both sides to truly commit to the agreement. Negotiations are often necessary because there was a “misunderstanding” that could have been avoided if the parties had put their agreement in writing. the opportunity for the sender and the receiver to misinterpret is greater than if the communication is first spoken and then written. And because the sender and the receiver are two unique individuals. or express a thought or emotion through words. In Tactic #4 (Use Objective Criteria). seek information. Oftentimes just seeing the agreement in black and white conveys its import as well as or better than hearing about it.” In Tactic #14 (Don’t Always Hide Your Weaknesses). nine hundred and forty-four dollars—$22. sounds. Who isn’t excited about buying a brand new SUV or truck? Until. pictures.944. he can be reminded of the details because it’s all there in black and white. a couple of months away.Communication is a process that involves a sender and a receiver. that is. the message being conveyed and received might be understood differently. The sender wishes to convey an idea. When you create a written record of the details of an agreement.

one party will work if the other party pays for the work. leading to misunderstandings and contract disputes. ask yourself the basic questions of who. Generally. which kind of. Both parties must receive a benefit or something they personally consider of value. as many people learn when they purchase a home. details such as what fixtures stay or what appliances go can be easily overlooked. In either case. before the trip. in writing. Putting the Agreement in Writing 193 . If you have agreed to pay someone to house-sit while your family is on vacation. protect yourself by having a written. say. and dated agreement. where. dating it. 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. and getting all the parties to sign it usually creates an enforceable contract. and so on in standard contract form. have your spouse also agree to the details of the agreement. Here’s what we mean. Carefully and completely describe the subject matter of the agreement.Contract Finally. and how much. WHO? Provide of the full names the parties necessary to the agreement. One party wishes to buy what the other wishes to sell. Failure to do so can lead to big problems. signed. the real estate contract includes information about the buyer and seller. or it isn’t an agreement—it’s merely the conveying of a gift. However. and put that information into the document. how many. your plants die because the house-sitter wasn’t told to water them. when. WHAT? The written document should clearly describe the item(s) covered by the agreement. You can do this more formally by taking them to court (perhaps as a last resort). one party will change behavior in exchange for something of value from the party who wants the behavior changed. the address and description of the real property. When you are ready to commit yourself in writing. Your spouse will share some responsibility for failing to make that duty clear in the agreement if. pulling an agreement in writing. which. what. 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. why.

depending upon the deal: when or where. and having all parties sign it ensures that the parties have. It gives the parties an opportunity to really buy into the deal. dating it.The remaining questions fill in the details of the agreement. which one or which kind of. The more-specific and clear these details are. in fact. how much or how many. And it can create a tangible reminder of the deal (or an enforceable agreement. 194 50 Practical Negotiation Tactics . Putting an agreement in writing. the better. if that becomes necessary). agreed to the same thing.

and how they can be used: Exercisethe Forms Putting Agreement in Writing 195 .Personal Negotiations Negotiation situation: Parties involved: Issue: Tactics that might be helpful.

Business Negotiations Negotiation situation: Parties involved: Issue: Tactics that might be helpful. and how they can be used: 196 50 Practical Negotiation Tactics .

________________ 7. ________________ 5. ________________ 3. ________________ 8. ________________ 2. ________________ 9. ________________ 10. ________________ Tactic# How will I use this tactic? (Application) _________________ _________________ _________________ _________________ _________________ _________________ _________________ _________________ _________________ _________________ ______ ______ ______ ______ ______ ______ ______ ______ ______ ______ Notes the Agreement in Writing Putting 197 . ________________ 4. ________________ 6.Name of Negotiation Tactic 1.

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W. Getting Together: Building Relationships As We Negotiate. Fiske. Patton. Domenici. David. Fisher. E. Upper Saddle River. Los Altos. and S. Fuller.REFERENCES Carrell. New York: Simon and Schuster. Negotiation Skills. 1989. University of Missouri: Columbia Press. and J. Successful Negotiation: Effective “Win-Win” Strategies and Tactics.E. and B. Pocket Negotiator. Lewicki. J. Inc. New Jersey: Prentice-Hall. W. 1988. R. Heavrin. 7th ed. Inc. Maddux. LittleJohn. Patrick J. 1987. The Essentials of Negotiation. Practice. Cohen. Fisher. M. and S. Cleary.. You Can Negotiate Anything. New York: Penguin Books. and J. Oakland. Herb. Victor. Saunders. and Law. References 199 . 1997. Gavin.: Crisp Publications. 1980. Inc. Inc. Irwin. Labor Relations and Collective Bargaining: Cases. New York: Penguin Books. 1999. Upper Saddle River. M. 1996. 1991. 1991. and C. Roger. D. 2001. and M. Brown. The Negotiation Handbook. Ill. Inc. Prospect Heights. Calif. Ury. George. Eshelman. Roger. 2nd ed. McKay. Inc. Kennedy..: New Harbinger Publications.: Waveland Press. Getting to Yes: Negotiating Agreement Without Giving In. 2001. 2nd ed. New York: M. Mediation. Inc. Chicago: Richard D. New York: Basil Blackwell. Clark. 1988. K. C. New York: Bantam Books. R. The Negotiator’s Handbook. New Jersey: Prentice-Hall. 2004. Minton. The Relaxation and Stress Reduction Workbook. M. R. Gotbaum. Negotiating in the Real World. Sharpe. Calif.

Weeks. Cambridge. The Eight Essential Steps to Conflict Resolution. 1999. C. 1998. 1994. Lectures on Negotiation Analysis. Dudley. 2001. Thompson. Inc. www. Ury. Shell.E. Cambridge. Labor Relations in a Global Economy. Inc. William. Massachusetts: PON Books. Massachusetts: D. Tsogas. The Art and Science of Negotiation. Howard. Inc. 1996. The Art of Negotiating. New York: M. The Mind and Heart of a Negotiator.negotiationsources. New York: Penguin Putnam. Raiffa. New York: Bantam Books. Gerald I. George. Inc.Nierenberg. 1991. G. J. New York: Simon and 200 50 Practical Negotiation Tactics . Getting Past No: Negotiating with Difficult People. L. Upper Saddle River. 1982. New Jersey: PrenticeHall. Taking Charge/Managing Conflict. Bargaining for Advantage. R. New York: Viking Press. 1987. Massachusetts: Harvard University Press. Lexington. 1981. B. Sharpe. Heath and Company. Howard. Raiffa. Stulberg.

He has authored over 50 scholarly works in some of the leading management and human resource journals including The Academy of Management Journal. M Christina Heavrin J. Dr. 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 . The Personnel Administrator. In addition. Books published by Dr. The Academy of Management Review. He received his doctorate from the University of Kentucky. and negotiations. These positions enabled him to build a sizable management consulting practice while teaching at the University of Louisville. and the University of Louisville. Labor Law Journal. and MBA and B. which is located in the greater Cincinnati area. Personnel Journal. he was elected to the City of Louisville Board of Aldermen for five terms. Personnel. Most of his professional career has been spent in the Louisville area and has included positions as a personnel director and labor negotiator. Human Resource Management.A. The Journal of Accountancy Training. HR Magazine. Carrell is Dean of the College of Business at Northern Kentucky University. During his academic career he has received awards for both outstanding research and teaching. Bakersfield. in Economics from the University of Louisville. In addition to negotiating numerous litigation settlements and contracts.ABOUT THE AUTHORS ichael R. and Public Personnel Management. has practiced law for 28 years primarily in the public sector as an attorney for local government in her hometown of Louisville Kentucky. organizational behavior. Organizational Behavior and Human Performance. Carrell has held academic positions at California State University.D. Carrell are in the fields of collective bargaining and labor relations. Business Forum. The University of Nebraska-Omaha. Morehead State University. Marshall University. and served as President of the Board and Mayor Pro-tem for three terms.

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. 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. the City and a for-profit hospital for guaranteed indigent health care services for city residents. 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. an agreement between the State of Kentucky. 202 50 Practical Negotiation Tactics . Jefferson County. Recently voters approved the merger of the City of Louisville and Jefferson County Governments. Ms.