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50 Practical Negotiation Tactics
50 Practical Negotiation Tactics
INTRODUCTION
Introduction 1
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 under-
stand how to use the tactic.
Introduction 3
negotiator! Pass this book on to someone else who needs it. But if you scored 8 or
less, start reading!
Most people come face-to-face with a negotiation situation of one type or
another on a daily basis: on the job, with family members, with neighbors, at a flea
market. Unfortunately, few people understand that normal interactions represent
bargaining opportunities. Instead, they pay the sticker price, accept what is given,
or engage in an unproductive argument.
This book is designed to give the reader an understanding of the negotiation
process by presenting fifty proven, practical tactics useful in real-life situations at
work or at home. Most readers will no doubt recognize some of these strategies;
some will in retrospect even remember being the victim of one or two of them.
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.
Who, exactly, are the negotiators most people deal with each week in their
work and personal life? The list will be long:
• a neighbor • a home builder
• a spouse • a hotel clerk
• a child • an electrician/plumber
• other family members • a lawyer
• a supervisor • a vendor/buyer
• a co-worker • a human resource director (who
• a salesperson might make a job offer)
• a boyfriend/girlfriend • a manager
Most people expect to have to negotiate when buying a car or purchasing a
home, but many of us miss the opportunity to bargain in other situations, such as
these:
• You receive the wrong order at a restaurant.
• A co-worker asks for volunteers for a new project.
• A child wants a new toy now.
Introduction 5
time to look over this performance review and respond point-by-point, and meet
with you again.” To a neighbor you can say, “I see why you want to cut down the
tree, but I believe it adds value to our house. How can you compensate us for our
loss?”
Once you’ve suggested that you see the situation as something to be negoti-
ated, the other party will realize that you intend to negotiate and do not accept the
situation. 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. You
can then use one or more of the tactics presented in this book to achieve the best
possible settlement. Once a settlement is reached, negotiations can be concluded
with a written or oral agreement.
Scenarios based on actual real-life situations are used to show how
each tactic can be used in business or everyday situations. Choosing and
applying the appropriate tactic to a particular situation will become easier as
you begin to use them. Keep this book handy when preparing for any type of
negotiation, and use the forms in the back to identify the issues, the parties
and their interests, the facts, and the tactics that might move the negotiations
along.
Yes No
Self-Assessment Quiz
1. In the past, have you ever felt that you were not adequately
prepared to negotiate a job offer?
2. Do you routinely negotiate for better accommodations when
you check into a hotel?
3. When you purchased your last home or car, do you believe
that you negotiated the best possible deal?
4. In the past, have you routinely resolved differences with a
neighbor or a friend through a negotiated agreement?
5. The last time you received sub-par service or food in a restau-
rant, did you request appropriate compensation?
6. 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, but you did not?
8. When making a major purchase, do you routinely negotiate a
last add-on before you close the deal?
9. As a parent, spouse, or child, have you ever required a written
agreement covering chores, allowance, or division of house-
hold duties, etc.?
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
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SECTION II:
THE NEGOTIATION PROCESS
Before you begin the process of negotiation, decide how complicated the issue is.
If it is a relatively informal situation, the process will be fairly straightforward. The
“Quick Model” approach outlined below is good for simple negotiations. On the
other hand, if the situation involves a number of detailed or complicated issues
or the stakes are relatively high, the process will probably take several weeks or
months as the parties move through all the stages.
I 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:
Preparation 13
1. An opening offer.
2. The desired “best” offer.
3. A minimum (or maximum) “worst” offer.
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 thou-
sand miles away, to a condo in Arizona. The ad he placed in the local newspaper
produced only one potential buyer: Patrick Knight.
Harvey: Well, now that you’ve checked it out, how do you like it?
Mr. Knight: It’s in great condition, just as you described it.
Harvey: Any questions?
Mr. Knight: Will you take less?
Harvey: No. It’s easily worth at least $20,000. That’s the price.
Mr. Knight: $18,000, tops!
Harvey: No thanks.
Mr. Knight: Okay. $20,000. I need it for a new restaurant.
Harvey: Restaurant?
Mr. Knight: Yes. We cut off the top of the vehicle and people sit in it and get
served their meals in our “oldies dream car!”
Harvey: Never mind, I’ll keep it. I haven’t maintained it for all these years just
so you can destroy it.
Preparation 15
Conclusion
Harvey’s best alternative—his BATNA—was simply to hold on to the car for the
moment, and either move it with him to Arizona or find another classic car col-
lector who might buy it (perhaps for less) and preserve it, as Harvey had for many
years. In this case, his BATNA was not to hold out for more money, but rather
what the buyer planned to do with the car.
Example 2
Shari and Jim Jaggers own a successful West Coast pottery company. The $56 million
dollar business took them 30 years to grow, and it now employs 230 craftsmen. For
the past two months, labor contract negotiations between the Jaggers and a local labor
union representing the pottery’s craftsmen have stalled. The union is demanding wage
and benefit increases, 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.
With only two weeks remaining before a threatened strike, the Jaggers decided
to seek buyers for their land, inventory, and equipment. They learned that their
assets would be easy to sell and were worth more than originally estimated. The Jag-
gers gave the union their “last, best, and final offer,” which was refused. 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 thought the Jaggers were bluffing. The owners, as a last resort,
notified all the employees of their intentions. The union negotiators convinced the
employees that this too, was a power play. The threatened strike became a reality,
and the Jaggers decided once and for all to sell their business assets and invest the
proceeds conservatively, providing them with a very good income for life.
Conclusion
Selling their business was the Jaggers’ BATNA. When negotiations with the union became
hopeless, selling became an attractive alternative to a strike or prolonged battle.
Example 1
Tom had always admired John’s 1861 Confederate rifle, and told John several
times to let him know if he ever wanted to get rid of it. 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.
John: Tom, you still interested in my rifle?
Tom: Of course. Are you finally ready to sell it?
John: Yes, I think so. Make me an offer.
Tom: Gosh, I’ll have to think about that. How much are you thinking it’s
worth?
John: Well, I guess I couldn’t take less than $20,000. It is extremely rare—one of
only 100 made with that bore and handle.
Tom: $20,000? That’s more than I planned. What changed your mind about get-
ting rid of it? It is still in perfect condition, right?
John: Sure, sure, it’s still perfect. I’ve been thinking of getting rid of it for a while.
Just running out of space, you know.
Preparation 17
Tom: Okay. Well, let me think about it and I’ll get back to you.
(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 $18,500 had an
1861 for sale. Was Tom interested? Tom declined, but thought this might
explain John’s sudden interest in selling the rifle.)
Tom: John, I’ve been thinking about your offer. I don’t think I can go higher than
$18,000, but I could get the money to you right away.
John: Well, if you could come up a little—say $18,500—we’d have a deal.
Tom: Okay, let’s do it.
Conclusion
Tom entered into the negotiations suspicious of John’s motives. Without some
trust, parties to a negotiation are not likely to reach agreement. When Tom found
out why John decided to sell his rifle, it made the negotiations easier. No longer
worried about John’s motives, Tom now felt comfortable negotiating the price.
Example 2
Rick, the owner of a small manufacturing company, has begun negotiations to sell
his firm to BigManu Company. He is two years away from retiring and does not
want his business to fail before he does, fearing that this will put all of his employees
out of work. Rick needs to remain president of the company for the next two years,
but then he will be happy to retire. He doesn’t want BigManu to know this because
he thinks it will hurt his negotiating position, so he is making it a condition of the
sale that ALL current employees must be retained for a minimum of two years.
The sale price for the company has not yet been agreed to, and now the two-year
requirement has become a stumbling block in the negotiations.
BigManu: Rick, we really want to buy your company, and we’re committed to
keeping it open as a major division of our company. However, we
Preparation 19
BigManu: We intend for you to stay and become a big part of our company.
Surely you’ll be able to “protect” your people if they are as good as you
say. This wouldn’t have anything to do with your own plans for the
future, would it?
Rick: Well, to tell you the truth, I’m hoping to retire in two years. I certainly
want to do all I can until then to protect my people.
BigManu: Why don’t we guarantee to you that you will stay for two years? That
way, you’ll have a guaranteed “in” to protect your people, but we won’t
be completely tied to operations as they are now.
Rick: Well, that might work. Let me get back to you.
Conclusion
By masking his real objective (giving himself two more years as president before
retiring), Rich almost lost the deal. Once Rick realized that he no longer risked
anything at the negotiating table by making his need known, he agreed to allow
BigManu to accommodate him without limiting their ability to make business
decisions.
Example 1
(Two ten-year-old girls are talking.)
Preparation 21
Conclusion
Bailey, 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.
Example 2
Two five-person negotiating teams had been trying to work out a deal for over a
month. The firm deadline was only four days away. Both sides desperately needed
to settle a property dispute. The chief negotiator for Team A publicly challenged
Team B to “negotiate non-stop, around the clock, until we have a settlement.”
The chief negotiator for Team B agreed, as long as they met in the boardroom of
Team B. Team A agreed to change the meeting place.
About thirty-six hours later, Team A was whipped physically and emotion-
ally. Team B, having set up beds, meals, and other conveniences in the adjoining
room, was still going strong. After forty hours of negotiating, Team A agreed to
a settlement almost identical to the one rejected days before. Team B had clearly
used its home turf to gain a substantial advantage. When negotiations resumed in
two months over another piece of property, not one member of Team A was cho-
sen to return to the table. They had all been replaced after their decision to negoti-
ate “around the clock” in Team B’s boardroom became known. They were blamed
for accepting the same deal that had been rejected only days earlier.
Conclusion
Team A did not realize the practical advantage they gave Team B when they agreed
to negotiate in B’s boardroom. The physical and emotional demands of 24-hour,
non-stop negotiations wore down the members of Team A, while members of
Team B were able to stay fresh, in their own familiar setting.
Example 1
When Larry’s cousin offered to help Larry finish the renovation on his bathroom,
Larry was thrilled. After all, Will is a licensed plumber, and he and Larry have
always gotten along. Things turned sour, though, when Will presented Larry with
his bill. Larry had expected to pay him for his time, but was shocked at the amount
of the bill. It was twice as high as the estimates Larry received from other plumbers
before they started the project. This uncomfortable negotiation followed:
Larry: Will, about your bill. I was kind of surprised at how high it was.
Will: Larry, I gave you my “family” rate. Believe me, I would have charged any-
one else much more.
Larry: But Will, I did get some estimates from plumbers, and they were much
lower than this.
Larry: Just make sure you’re comparing apples to apples. When you first told me
about your project, I anticipated much less work. When we got into it, it
became clear that all of those pipes had to be pulled and new ones put in.
Larry: Well, these plumbers certainly acted like they understood the work when
they gave me their estimates!
Will: Tell you what. Let’s get the guys back in who gave you estimates, and
show them the actual work that got done. If they tell us that they either
Preparation 23
disagree on the need for that work or that they would have done it for less,
I’ll revise my bill to meet the lowest estimate you get.
Larry: That sounds fair.
Conclusion
When the other plumbers looked at the work, they had to agree that their early
estimates were low. Had they actually prepared bids on the work, they said, they
would have had to revise the figures. The estimates would have been higher than
what cousin Will charged.
Settling on the right objective criteria upon which to base a negotiation
requires that both parties think through their options. Comparing the estimates to
Will’s actual costs would have been counterproductive, because (as Will pointed
out) it wasn’t an apples-to-apples comparison.
Example 2
After Stuart was appointed to the college’s Board of Trustees, he used his financial
expertise to analyze the investments of the college’s endowment fund. He was dis-
appointed in the performance of the fund, and decided to bring the matter up at
a Board meeting. The college’s budget officer was understandably offended; while
she wasn’t an expert, she had been investing the college’s endowment funds for
many years, and no one had ever questioned her performance. The chairman of
the Board suggested that Stuart and the budget officer meet to discuss the invest-
ment policies and practices as they relate to the endowment funds.
Budget Officer: I don’t know what your problem is. I have been very diligent
about making sure that the fund makes the most money it can
without putting us at risk. I find your suggestion to the Board
that I haven’t been doing my job right to be very insulting!
Stuart: I’m sorry. I certainly didn’t mean to offend you. From a look at
the portfolio, my first reaction was that some of the investments
Conclusion
The two-month experiment did produce the results Stuart had anticipated, and
the budget officer was comfortable that the risk and expense of such a strategy was
small and worth the effort. In this situation, Stuart realized that the budget offi-
cer needed very-specific “criteria” (such as the actual experience of investing the
school’s endowment fund) rather than relying on an investor’s experience, because
she did not have the background in investments necessary to trust such advice.
Preparation 25
Tactic 5: List All Items to Be Negotiated
Break down the issues to be worked out into separate items ahead of time, and ask
the other party to add to the list. Once you both agree on the list of things to be
negotiated, you should each put together a “package” of several items on the list
and work out a win–win agreement for these things. This strategy can build trust
in the negotiation process itself.
Example 1
Shari, a sixteen-year-old who lives with her parents and three younger sisters, has
asked her mother for a $10/week increase in her allowance.
Mother: That’s a large increase—and we just raised it last year!
Shari: Well, I need more money for clothes and CDs, and for going out with
my friends.
Mother: But your allowance is based on what you earn in your weekly chores,
not on what you want to spend.
Shari: Well, what else can I do, besides washing the dishes every night and
cleaning my room?
Mother: You could cook dinners, baby-sit your sisters, cut the grass, wash the
cars, 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, if I give you an increase, your little sisters will want equal treat-
ment. It will cost me more than $10—about $35 per week.
Shari: I’m four years older than the next-oldest. You can’t treat me the same!
Mother: Well—so we’re talking about several issues, not just an allowance
increase! There is: (1) a $10 increase; (2) a later curfew; (3) more chores;
and (4) different treatment from your sisters!
Conclusion
Shari’s mother helped negotiations along by listing all of the items being discussed.
Then a “win-win” solution could be determined. 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, which the other children would have requested
as well, was avoided.
Example 2
The union and management negotiating teams opened discussions with a list of 48
demands. The union’s chief negotiator, in the first session, opens by proposing the
list of items. Management agrees, since all of their items were included as requested.
Now it is time for each side to list their desired outcome for each item. The trading
of items (where initial demands are discussed and agreed upon) begins.
Union: We will agree to your proposal on item #6 (the number of paid
holidays) and item #14 (the new overtime hourly rate), if you agree
to our proposals on item #3 (the paid vacation schedule), item
#11 (the clothing allowance), and item #23 (the wellness program
voucher).
Management: (after calculating the total value of the five items during a break period)
We agree to your package of five items. Now we have a package
deal to propose …
Preparation 27
Conclusion
In most labor negotiations, the two sides will at this point sign and date the list of
proposed items, thus removing them from the discussion table. Then negotiations
can resume on the remaining 43 items; other trade-offs are proposed and agreed
to until only a few items remain.
Example 1
Bob Hillard had been coveting a turquoise 1963 Chevrolet Impala Supersport con-
vertible for several years. One day, as he left the supermarket, he saw an elderly
man get in his dream car and drive away. Bob followed the man home, which
turned out to be only a few blocks from his own house. As the man got out of his
car, the following conversation occurred:
Bob: Hello, my name is Bob Hillard. I live a few blocks from here, on Bri-
arwood Road.
Car owner: Hi! What can I do for you?
Bob: I’ve admired your ‘63 Impala for years. Would you possibly be inter-
ested in selling it?
Car owner: No, I love this car—restored it myself.
Bob: Not even for, say, $12,000?
Car owner: No. That’s a generous offer, but money doesn’t mean anything to me
at this point in my life …
Bob: Well, thanks. It was nice meeting you.
(For the next three years, Bob made it a point about once a month to go
out of his way and drive by the man’s house, just out of curiosity. One day,
he noticed a FOR SALE sign in the yard. He stopped and knocked on the
door.)
Preparation 29
Bob: Hello! I noticed your FOR SALE sign, and wondered if your ‘63
Impala might also be for sale …
Car owner: (obviously not remembering Bob) Well, as a matter of fact, I’m moving
to California to live with my daughter. I can’t take it with me, so I
guess I will be selling it.
Bob: Can I see it?
Car owner: Sure. Follow me.
Bob: (after a careful inspection) It’s a very nice car! I’ll give you $12,000,
and I promise to take good care of it.
Car owner: Well, that’s a fair price. Can you come back on Monday at
10:00 a.m. to seal the agreement at the courthouse?
Bob: Sure. Then it’s a deal?
Car owner: Yes. I’ll see you on Monday.
Conclusion
While Bob did not achieve his goal during his first negotiation effort, the timing
of his second effort was perfect and it enabled him to negotiate for the car of his
dreams.
Example 2
It was Sunday, December 31st, 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. The partner organi-
zation, for tax reasons, had issued a deadline of December 31st, beyond which the
project would have to be abandoned. The board members had met twice before,
and the vote was a 6-6 tie each time. A majority was needed to pass the partnership
agreement; if a seventh vote could not be found by the pro-agreement side, the
proposal would die at midnight. A third vote at 3:00 p.m. resulted in another 6-6
Conclusion
The leader of the pro-project group recognized that they might have a unique
timing advantage. He planned for it accordingly, and it worked. For weeks, the
project had been stalled by 6–6 votes; in the end, timing was everything.
Preparation 31
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Stage 2: Planning a Strategy
T he next stage is critical: Choosing a strategy. Before you can do this, you
must first evaluate your needs and those of your opponent, as well as their bar-
gaining history and financial and political positions. Look at the personalities
of each negotiator and see which side will be more vulnerable to pressure
bargaining (Stage 5). Are there any outside people who might influence the pro-
cess, such as a third-party negotiator, 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. Be sure you are aware of this at the beginning,
as it can substantially alter the negotiations between two primary parties, such as
a buyer and a seller or a city and its union. In some cases, a third party can serve
as a mediator (a legislative body, for example, might step in and help settle nego-
tiations between a union and administration negotiators. Third parties sometimes
have their own hidden agendas, such as actively trying to keep one of the two par-
ties from winning a contract or influencing a colleague or spouse to accept an offer
for personal reasons. Identify all outside influences and hidden agendas before you
develop your strategy.
After you have evaluated these factors, decide whether the negotiations should
be continuous, or one-time-only. Some of the tactics listed in this book are only
suitable for single-session negotiations, such as Tactic #19 (Make a First and Best
Offer); Tactic #33 (Bluff); Tactic #43 (Nickel and Diming); and Tactic #48 (Walk
Away).
The overall strategy chosen does not limit the use of other tactics, but in prac-
tice it will likely influence the whole process. For example, if you want to begin in
a friendly, cooperative manner, Tactic #12: Find Common Interests can be helpful.
If you prefer to take a firm and direct approach, then Tactic #13: Set a Deadline or
Tactic #11: Have an Expert Witness might be helpful. A neutral, uncaring approach
(Tactic #9: Control Your Emotions; and Tactic #10: Make a Reciprocal Buy-Sell Offer)
are also useful alternative strategies.
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
Planning a Strategy 33
side is either caught off-guard or (in some rare cases) a negotiator will be able to
achieve an unexpected fantastic settlement. For example, let’s say a homebuyer
new to an area is shown a house that was owned by someone who had been trans-
ferred to another country. His teenage sons had “trashed” the house. The buyer
loved the location, but the inside was a complete turnoff. Weeks later, the seller’s
agent called the buyer about the property. The buyer said he wasn’t interested.
The agent explained that the seller was desperate. “Please make any offer—they
are motivated!” The buyer responded, half-serious, with “All right. I offer half the
asking price.” The agent took the offer to the seller. The desperate owner agreed,
and the buyer was able to completely renovate the house and still have a great
deal.
Another strategy often employed by parents with their children (and inves-
tigators with suspects) can be easily used when one side has two negotiators (see
Tactic #8: Use the Good Guy/Bad Guy Routine). By assuming opposing roles, two
people on the team will be more successful because they evoke different emotions
from the other side. If there is a significant weakness in your position, you should
consider disarming the other party by acknowledging the weakness at the start so
that you can reduce the impact of the weakness if it is used by your opponent (see
Tactic #14: Don’t Always Hide Your Weakness).
Example 1
Carol has been unhappy with the house she and her husband bought six years ago.
She has had it on and off the market for the last five years, with no success. Each
time, her real estate agent told her that they were probably not going to get a buyer
because she is asking too much. Carol wants $160,000, and just refuses to reduce
it. Finally, one buyer shows some interest.
Buyer: We really like the house, but quite frankly, we think $160,000 is very
high. After all, six years ago you bought it for $60,000. The market hasn’t
gone up that much in six years.
Carol: Maybe not, but the house has increased in value. First, we’ve put a con-
siderable amount of money into a new air-conditioning system and in
redecorating. We also think that the neighborhood has improved over the
last few years.
Buyer: The air conditioning might have increased the value of the house, but the
redecorating is of little value. Anyone buying the house would want to
change wall colors or add new carpets. And I don’t see a lot of difference in
the neighborhood. It’s a good neighborhood, but certainly not exceptional
in any way. Surely there’s some flexibility in your asking price.
Carol: We really want to sell, but we simply can’t take less than $160,000.
Planning a Strategy 35
Buyer: What if we offered you $100,000?
Carol: We really can’t take less than $160,000.
Buyer: Good luck!!
Conclusion
The buyer expected Carol to counter the $100,000 offer by coming down in price
at least a little. When Carol refused to budge, the buyer took it as a signal that
either Carol didn’t want to sell, or she has unreal expectations. In any event, Carol
drove off a potential buyer by setting an asking price that was just too high.
Example 2
The law firm of Bits & Bites was a Sioux City institution, enjoying a statewide
reputation for quality representation. Neither Edward Bits nor Edmund Bites, the
founders of the firm, were still alive. The firm now had over twenty-five law part-
ners who owned the firm and continued to benefit from the reputation and name
recognition of Bits & Bites. 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 partners are interested in selling the name, but they have no
idea what the value of their firm’s name might be in this nearby city. Inquiries
to other law firms were not very helpful because in almost all of the instances,
the transaction also included some degree of consolidation of the law firms
involved—not just the use of the firm’s name. The other law firm was prepared
to pay $100,000 immediately, and then $10,000 or 1% of profits (whichever
is less) over the next ten years in order to use the name. Here’s how the initial
negotiations went:
Planning a Strategy 37
Conclusion
Bits & Bites lost an opportunity here because their initial demand was so unreal-
istic with what the prospective firm thought the “naming rights” should cost. It
immediately dropped the idea, rather than negotiate. Both parties were probably
at a disadvantage, because there was no “objective” criteria available to help them
set a reasonable price. Either side could have asked for too much. In this situation,
Bits and Bites should have let the prospective firm make the first offer, since they
had initiated the contact. The price they were willing to pay would have indicated
what the naming rights were worth.
Example 1
Peggy: So, Andy and Paula, you’re really moving! I hate to see you leave.
I heard that you want to sell your riding mower.
Andy and Paula: Yes, we won’t need it at the new condo.
Peggy: So, what’s your price?
Andy: $1,200. Half what it cost us new, only three years ago.
Peggy: That’s fair, and I know how you take care of things, so I’ll take it.
Paula: Go ahead and ride it home. And take the leaf-catcher
attachment and the gas can.
Andy: No, I want to keep those. I can use them.
Peggy: I assumed they went with the mower, since they are sitting out
in the driveway with it.
Andy: I want them…
Paula: Go ahead and take them, Peggy.
Andy: No, not for $1,200! We should get $1,400 if the catcher and
can are included. They cost about $300.
Peggy: I’m hearing one thing from Paula and another from Andy. I
don’t know what the deal is now. I’ll go home and you can call
me if you two can reach an agreement.
Planning a Strategy 39
Conclusion
Peggy thought she was getting the old “good guy/bad guy” routine, perhaps even
unintentionally. She realized that it put her in an impossible negotiating position.
She very wisely recognized the routine and forced Andy and Paula to give her a
clear, firm offer if they decided to continue negotiations.
Example 2
Sandy (business owner): Miguel and Liz (representatives of a computer firm), we’re
here to negotiate a new service agreement. For the past
three years, we’ve been fairly happy with your respon-
siveness, the quality of the technicians’ work, and your
training programs.
Miguel: Well, Sandy, your account has taken too much time. You
are located outside our primary service area, causing our
reps to spend hours on the road.
Liz: But we still want to renew your contract.
Miguel: But not at this ridiculous rate. And we need to add a clause
that holds your company responsible for machine dam-
ages. We estimated that it has cost us more than $50,000
in service calls last year alone because your damn people
don’t take care of the equipment. And we want to change
the 24-hour service response time to 48 hours. And cut
the training hours from 55 to 20.
Sandy: What? First of all, your rate of $3,000 per month is one
of the highest in town.
Miguel: I’ve figured $4,200 will be about right…
Sandy: I can’t begin to pay that!
Liz: Calm down, Sandy. Let’s talk.
Conclusion
Miguel and Liz used the good guy/bad guy tactic in the classic form: Miguel
scared and threatened their opponent, Sandy, with a position he knew was
unreasonable. Then he left so Liz could convince Sandy that they needed to
quietly reach an agreement she could “sell” to Miguel later. Sandy believed that she
was able to avoid a terrible deal and negotiate a fairly good one, even though it was
far above the previous contract.
Planning a Strategy 41
Tactic 9: Control Your Emotions
Stay cool. 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. This will put you at a distinct disadvantage from this point on, and
might even harden your opponent into an unfavorable position (for you or for both
of you). 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. 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. Control your emotions and use them to your advantage!
Example 1
Mike prided himself on being an informed and educated consumer. He had, in
fact, made some very good purchase decisions for his small business, such as
deals on computer packages and phone services. So, 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, he was very unhappy. The fault
was partly his because he did not stay on top of changes. He decided that the best
approach was to act indignant when he spoke to the company representative.
Here’s how the phone conversation went:
Customer representative: Over-the-Air Long Distance. How may I help you?
Mike: Hello. I have a problem with my recent bill and my
billing rate. It seems that the rate you are charging
me on my home phone is $1.00 a minute, but I recently
was sold a $.10 a minute rate at my office location. I
noticed this, because we have had a sick relative out of
town and we used long distance a lot this past month.
Planning a Strategy 43
Mike: I would imagine so. But I’m looking at a $500 long-
distance bill, which should rightly be $50. I would
hope that you would credit my account for this bet-
ter rate for past service. I am, after all, a long-time
customer of your company, and I should be treated
with more respect!
Customer representative: I’m sorry, but I can’t do that. I …
Mike: (interrupting and in a stern, controlled voice) I need
to talk to someone who can do it immediately. Is your
supervisor there?
Customer representative: I’m certain that he cannot adjust your account retroac-
tively, either. The best we can do is fix the rate for the
future.
Mike: (with a much angrier tone) Madam, don’t think this is
directed at you personally, but I am very angry with
Over-the-Air Company, and I want to speak to some-
one in authority so I can terminate my service. If you
can’t get me someone to talk to, there’s no reason for
this conversation to continue.
Customer representative: Wait—I’ll get my supervisor. We certainly don’t want
to lose you as a customer.
Conclusion
The supervisor waived the long-distance charges for the $500 bill and adjusted
Mike’s rate to $.10 per minute. In doing so, she kept Mike as a residential cus-
tomer as well as a business customer. Mike’s willingness to show a measured
“flare of temper” brought results. He was walking a thin line, however, between
controlled, strategic anger and abusive behavior. The latter would not have
produced the desired results.
Planning a Strategy 45
sure these employees can protect themselves? Are you
telling me that your employees are being put in dangerous
conditions without adequate training and safeguards?
Owner: No, not at all. But the fireworks business is a business
that involves risk. No one who takes a job with us can be
unaware of that. But we protect our people.
Negotiator: Then you can’t have it both ways; either the employees
are properly trained, or they’re not. Either they are prop-
erly protected, or they’re not.
Owner: All I’m saying is that the most-senior employees have to
be on the overtime shifts. That’s all. The safety of the
plant demands it!
Negotiator: (standing up to leave) This is just ridiculous. You are not
addressing the real issue for you: money. Until you’re
ready to talk about that, I’m not coming back. (He begins
to walk out.)
Owner: Now, now, don’t be so hasty. Sit down, sit down. What if
we were to agree that the senior employees could refuse
half of the overtime offered to them, but not all?
Conclusion
The owner was on shaky ground with this one. After the employees’ negotia-
tor threatened to walk out, he became more reasonable. The negotiator was also
running a risk with his flare of temper. Had the owner let him leave, the
negotiator would have had to find a way back into the negotiations without
losing ground. The end result was that the most-senior employees did win the
right to refuse overtime. In practice, though, most of them continued to take all
the overtime they could get.
Example 1
Susan and Mary Anne learned from their brother Mike that their recently departed
parents’ estate included a somewhat valuable antique coffee grinder. Both sisters
covet it. All the rest of the estate has been divided among the family. Mike, the
executor of the estate, has decided to use the “reciprocal buy/sell offer” process to
settle this last piece of the estate.
Mike: Mary Anne, you’re the oldest, so you set a price at which you agree
to buy or sell the coffee grinder. I’ll give you 48 hours to decide the
price. Then Susan, 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, Susan, my kids and I looked on eBay and everywhere else and
found out that coffee grinders in perfect condition sell for about
$500. However, since this one is in perfect shape and it was Moth-
er’s, I’m willing to pay or let it go for $800.
Planning a Strategy 47
Susan: Well, I choose to buy it. Here is my check for $800. I’ll pick it up
tonight.
Mike: Thanks for making this last step as easy as possible.
Conclusion
The “reciprocal buy-sell offer” process caused both Mary Anne and Susan to
research the market value of the coffee grinder, and then decide how much more
“emotional value” it held. They thus were able to determine the highest price each
was willing to pay for it or receive for it. Both sisters felt that the process enabled
them to resolve the issue fairly.
Example 2
Howard Raiffa described a consulting situation in which he used the “reciprocal
buy-sell offer” process in his book, Lectures on Negotiation Analysis. Two business
partners had been working together for ten years to build a successful business,
but each partner had grown to dislike the other and wanted to end the partnership
(but continue to own the business without a partner). Both came to Raiffa to help
negotiate a settlement. They accepted his suggestion to use the “reciprocal buy-sell
strategy.”
Howard: Since in this case you are talking about a multi-million-dollar
business, I suggest a slight modification to the process. You will
both agree, in writing, to submit a sealed offer to buy/sell the
business sixty days from today. After I open the bids, the lower
bidder must agree to sell his half-interest to the higher bidder
at a price that evenly splits the difference between the two bids.
Agreed?
Abe and Bobby: Sounds good! Let’s draft and sign a written agreement detailing
the process, which will bind us to the outcome.
(sixty days later)
Conclusion
Both parties wanted to keep the business, but only if they could become the sole
owner, and both men had carefully estimated the market value of half the busi-
ness. Bobby was willing to pay more than Abe to remain sole owner. The recipro-
cal 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.
The partner who was out-bid in a fair process received a fair settlement: $10 mil-
lion above what he was willing to pay.
Planning a Strategy 49
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. It can also work in reverse:
establishing the other person as the expert, and forcing him or her to control the
discussion of the issue.
Example 1
A young couple were discussing a possible purchase of new furniture for their
living room. They both expressed an interest in finding a couch that offered the
most “interior” space. The wife was determined to buy the least-expensive brand
rated excellent by consumer publications.
They knew that sitting on dozens of couches in a single day would be confus-
ing and would make it difficult to determine which one is the most comfortable
and roomy. The couple decided to limit their selection to those rated “excellent,”
but there were substantial differences in price—differences that the wife did not
see as a problem. The husband found the dimensions of the couches in the bro-
chures and Web sites, and created a spreadsheet to compare the five best-rated
couches on their list. Based on seating capacity, the one he wanted (one of the
least-expensive) was superior. When it came to comfort, the one that was the most
expensive was superior. Looking at these statistics, he decided upon a strategy:
First establish himself as the “dimension expert,” and then argue for the frugal
alternative. When he showed his wife the detailed spreadsheet, she glanced at it
and immediately deferred to his opinion. This strategy worked, and the husband
felt like he saved them hundreds of dollars.
Conclusion
The husband became the “expert” in this situation by doing the homework. He thus
ended up having greater negotiating power. This approach can also be reversed:
The wife in this situation is a banker, so when the husband wants them to make an
Example 2
A negotiator can often gain a valuable advantage on issues such as medical insur-
ance or labor contracts by doing the homework and becoming an “expert.” If you
spend many hours learning about Health Maintenance Organizations (HMOs),
Preferred Provider Organizations (PPOs), and Point of Service (POS) plans, you
gain an edge when negotiating a new plan for your company. 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 insur-
ance plans are, a negotiator in a similar situation was able to get the other side to
agree to include a plan that they had opposed only days before!
Planning a Strategy 51
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. This is done by deciding at the outset what you
both have in common: You both want to reach an agreement; you both want
to complete negotiations by a certain date; neither of you want to be embar-
rassed at the outcome; you want to reach an agreement that is favorable to an
outside party; and so on. These positive things are part of your goals and objec-
tives; point them out at the very beginning of negotiations and refer to them
throughout the process, particularly when things seem to be at a standstill. Be clear
on what you have in common at the start.
Example 1
When Russ and Bill got home from school, they saw that there was one piece of
cake left over from their mom’s bridge party. They immediately began to fight over
it. The two boys fought over the last piece of everything, and their mother was
tired of it. Usually, she made them share whatever it was, and neither boy was very
happy. This time, she decided to try something different.
Mom: I’ve decided that I’m not going to cut this piece of cake in half and give you
both some. That simply rewards your continual squabbling. Unless you
can convince me otherwise, the last piece of cake will get thrown away.
The boys quickly huddled, and then asked their mom for a chance to
negotiate with each other. When they boys returned, here’s what they
said to her:
Russ: I think I should be rewarded with the piece of cake, because I am so con-
scientious about my paper route. I also took out the garbage last week
without being asked twice, I missed dessert the other night because I
had to get to baseball practice, and I really love the banana/butternut/
sour cream frosting on this cake. If this was chocolate icing, like we
usually have, I wouldn’t care so much.
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.
Example 2
Marilyn’s Memorabilia Store was located along the main commercial street of a res-
idential neighborhood. It was the type of shop the nearby residents preferred, and
better than a fast-food restaurant with late-night hours and a drive-through win-
dow. Marilyn originally set her shop’s hours for 10:00 a.m. to 3:00 p.m. because
there is no parking along the street during morning and evening rush hours, and
her children were in school, so these hours worked out well. Now that her children
are in college, she opens her shop at 7:30 a.m. and keeps it open longer so she can
attract customers on their way to and from work. Customers have started to park
in nearby apartment lots. One day, she got a visit from some of the residents.
Residents: Marilyn, your new shop hours have caused your customers to park
in our parking spaces. We really want you to go back to your original
times, so that your customers can park on the street.
Planning a Strategy 53
Marilyn: I’m sorry this is happening. But I really am increasing my sales by
being open longer hours. I really need that extra income to stay in
business. 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, we have to be
willing to tow the cars that violate it. It is very costly to have cars
towed, and usually the car is gone by the time a tow truck shows up
anyway. And we don’t think you want your customers’ cars towed. Do
you?
Marilyn: No, I don’t think that would be very good for business. Okay, let’s see
what the options are. Between 7:30 a.m. and 9:00 a.m., and between
4:00 p.m. and 6:00 p.m., my customers can’t park on the street. The
parking lot used for apartment residents is probably full from 7:30–
9.00 a.m. if residents haven’t left for work yet, and is probably empty
in the afternoon if they haven’t gotten home yet. So, if I go ahead and
open the shop at 7:30 a.m. and I close at 4:00 p.m., the off-street lots
probably won’t be used by my customers. But in order to keep my
new customers, I have to convince them to come before work, rather
than after work. 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. and 9:00 a.m.?
Residents: We certainly want you to stay in business here. If you need to have the
shop open more hours, then we’ll try and accommodate you. Most of
our residents are gone by 8:00 a.m. or so anyway. We think they’ll be
agreeable to the morning parking. Lets try it, and see if it works.
Conclusion
Marilyn needed the extra parking, and the residents needed Marilyn’s shop. Iden-
tifying their shared interests caused the nearby residents and the customers to
reach agreement. The shared parking arrangement did work out for Marilyn.
Example 1
Four adult children have gathered at the home of their recently deceased mother.
Jenny: Okay, how should we go about dividing up the furniture and
possessions?
Everett: I can’t talk about it.
Sue: Well, we can each take turns selecting things …
Everett: Like each tool or dish. That will take days!
Mary: I haven’t been in this house for twelve years. How can I do that? You all
live in this town and you know this house. I don’t.
Sue: Well, let’s all take a few hours to look around.
Everett: A few hours? I can’t—I’ve got to leave shortly for the drive home.
Mary: We just don’t have the time …
Jenny: We’ve got to do this—the house is sold!
Everett: Okay, let’s all take two hours to look around and make a list of things
we might want. Then we can sit down at this table at 3:00 p.m. and
start choosing things, one at a time: the youngest, the first, etc. But at
Planning a Strategy 55
5:00 p.m., if we are not finished, we all leave. Sue, being the oldest, can
sell or give away what is left. All of us must come back before Saturday
to take what is ours—agreed?
Sue: Okay.
Mary: Agreed.
Jenny: Okay.
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.
Example 2
Allan: As the negotiating team for the city, we cannot agree to these develop-
ment plans submitted by your company until we have reviewed how they
will affect the historic buildings.
David: I understand your concern, and I appreciate your interest in the historic
structure. However, this is December 29; if I cannot carry a negotiated
and signed deal to my board by noon on December 31, then the whole
deal is lost because my company will lose $10 million in tax benefits
under a federal law that expires on midnight, December 31.
Allan: What! Why did you not tell us this before?
David: We never thought you would take three months to get to this point. And
besides, your attorneys know the tax laws.
Allan: Let me confer with the city attorneys.
Conclusion
Knowing the external deadline gave David a significant negotiating edge. He waited
to bring it up until it was clear that doing so would help him get the settlement
his side desired.
Planning a Strategy 57
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. The objective is to negotiate from a position of strength, and this usually
means having all the right information. Have a clear goal in mind AND all the informa-
tion you need to make your points, but remember that both sides have weaknesses,
as well as strengths. There will be times during a negotiation when you will want to
catch your opponent off-guard, and one of the ways to do that is to reveal a weak-
ness at the beginning, before your opponent tries to catch you off-guard. Control
the use of the information, and you can neutralize its effect on the negotiations.
Example 1
Jason likes to play video games as soon as he gets home from school and do his
homework later, while watching TV. His mother disapproves of his study habits,
but his grades are good, so he was able to prevail upon her to let him continue.
Unfortunately, first-quarter grades are coming out at the end of the week, and
Jason knows he is getting a D in Spanish. He knows that a D will mean that he will
have to change the way he studies. He decided to preempt the discussion in order
to make the best deal.
Jason: Mom, we need to talk. Now, don’t get mad, but I have a problem in my
Spanish class.
Mom: What’s that?
Jason: A few weeks ago I lost my workbook, and I missed some assignments.
Mom: I gave you money to buy a workbook a few weeks ago. Did you buy it?
Jason: Yes, but that was actually a different workbook. We had one at the begin-
ning of the semester that we were using pretty often. One day mine disap-
peared. I bought the second one, and we used it a couple of times. Then
the teacher went back to the first one. I’ll need to buy it again.
Mom: All right, I’ll give you money for it. But don’t lose it again.
Conclusion
All of Jason’s grades did improve over the next quarter. Although his Spanish grade
was only a C+, he was able to continue to study the way he wanted to. Jason’s deci-
sion 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. His explanation
made sense, and since he offered her the information up front, she trusted it more.
Example 2
Jane once owned a piece of property she wanted very much to sell. The loca-
tion was ideal for a convenience store or a fast-food restaurant. Pizza Boy was
interested and had even made inquiries about the property. Its owners found out
that at least three other buyers had been in contact with Jane, but all three deals
Planning a Strategy 59
had fallen through. The Pizza Boy people figured that Jane’s asking price must
be too high or that she is unwilling to negotiate. The real problem, however, was
that Jane’s neighbor had contacted each of the previous potential buyers and com-
plained about their plans to use the property. The neighbor’s attitude suggested that
there would be major resistance in the neighborhood if Pizza Boy tried to put in a
commercial establishment. This is how the negotiations went:
Jane: Pizza Boy, I’m very happy you’re interested in my property. I’ve got to
warn you—you might hear that there is neighborhood resistance to
your putting in a pizza restaurant. Actually, it’s only the neighbor to
the right of the property who has a problem. When she contacts you,
though, she will want you to think it’s the whole neighborhood.
Pizza Boy: We’ve checked the property out, and it’s zoned for commercial use.
What are her grounds for complaining?
Jane: She doesn’t have any, really. But unlike your company, the other
interested buyers already have businesses in the neighborhood. They
decided not to fight a disgruntled neighbor.
Pizza Boy: Well, we’re not interested in neighborhood fights, either.
Jane: Oh, I know. I think you’ll find that this is only one person, however. You
are a big enough corporation to withstand her objections, I’m sure.
Pizza Boy: Well, let’s assume that you are right. What are you asking for the
property?
Conclusion
Jane told them her asking price, which was way below the price they were actually
willing to pay. A tentative deal was signed. When the neighbor heard about the
new buyer, she started her campaign to keep them from closing the deal. Pizza
Boy was prepared for her call, and was able to politely ignore her. Jane’s up-front
disclosure of a potential problem allowed Pizza Boy to weigh the negatives with
the positives. Furthermore, since they were well aware of the negatives, there were
no unpleasant surprises to stop the deal.
Initial
Offer
$21,000 22 23 24 25 26 27 $28,000
Settlement Range
Buyer Initial Offer ($22,750–$25,500)
($21,000) Target Point Resistance Point
($23,000) ($25,500)
Fig. 2: Distributive Bargaining Process. Adapted from Labor Relations and Collective
Bargaining, by Michael R. Carrell and Christina Heavrin. (2004), 190–192.
Example 1
Shelly’s “Sweet Sixteen” party was coming up, so her parents sat down with their
daughter to discuss the details. Her mom and dad had already talked about it pri-
vately, and presumably had an agreement. Unfortunately, the negotiations got out
of hand when Shelly’s dad forgot what had been decided.
Mom: We’re planning on having your party here on Saturday night, Shelly. You
can invite up to 20 of your friends. We’ll just have chips and soda. We
don’t want it to be a late evening, because it might disturb the neighbors,
so we’ll have the party from 7:00 p.m.–10:00 p.m.
Shelly: Twenty friends? You’re kidding! I’ve just started on my list, and I already
have 25 names. And that’s just my friends from school! I haven’t started
Conclusion
In spite of their prior planning, this mom-and-dad negotiating team became
unglued during the negotiations, causing them to lose control and make
compromises they hadn’t intended to make. Mom’s call for a caucus gave
them a chance to regroup and re-state their original objective, which was to make
sure Shelly’s Sweet Sixteen party was a fun and safe evening, and not a huge pro-
duction.
Example 2
The contract negotiations between the company and the union had been going
on for days. The item currently on the table was the company’s offer to give each
Conclusion
Negotiator #2’s timely call for a caucus so she could explain the miscommunica-
tion in private saved the session. Negotiator #1 regained his footing, and the par-
ties were able to complete their negotiations.
Example 1
The buyer, Mr. Hobbs, quickly checked the dealer’s inventory of sport utility
vehicles in stock, and noticed that none of the vehicles have a green exterior. He
doesn’t really care about the color of the new vehicle, but he makes a mental note
to use color as a “throwaway” item. At a point late in the negotiations, when the
two sides are only a few dollars apart, this conversation takes place:
Hobbs: Yes, it’s a great car and a fair deal, but …
Salesman: But what?
Hobbs: Well, according to my figures, you are making $200 profit over the
true dealer’s cost, according to the Consumer Reports listing of the
cost of the vehicle.
Salesman: Well, we’ve got expenses and we need to make some profit.
Hobbs: Yes, I know. But for this price, I can go to another dealer and get a
green exterior—the color I like best.
Salesman: Let me talk to my manager. I’ll go get him.
(Salesman returns with manager)
Conclusion
Mr. Hobbs successfully chose color as a throwaway item. At the very end of the
negotiations, he brought it up and convinced the salesman and manager that it
was an important item to him—possibly even a deal-breaker. The manager was
convinced enough to sacrifice a final $100 for the throwaway.
Example 2
The office supervisor told the three internal sales representatives (Jenny, 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”
days. Employees will be paid time-and-a half for each of these days, and seniority
will be used to determine who gets to choose the first day. All three employees
must agree to the schedule. The three are sitting at a lunch table to discuss the
schedule. The days in question are:
Conclusion
Carolyn has achieved her objective: She will be off December 24 and 26. She got
what she wanted by giving up something she did not value: the two other days.
Jenny and Miguel feel that they received something of value from Carolyn: She
must work two more days than they must work, in exchange for giving up earlier
choices due to seniority. They all agreed to their schedules.
Example 1
When their mother died at age 82, Anne and her sisters, Autumn and Angela, were
faced with the task of selling the house and disposing of their mom’s personal
belongings. Their mother’s will was very clear: the three daughters were to all have
an equal share of her estate. The estate’s assets included a checking and savings
account totaling $450,000; 300 shares of stock in a pharmaceutical company;
a house valued at $250,000 with no mortgage on it; and a collection of antique
furniture. In addition, their mom left specific pieces of jewelry and art in the will
to each of the girls. 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. When the girls
decided it was time to talk about the estate, they met at the house.
Anne: As I see it, we need to sell the house, the antiques, and the stock and
distribute the proceeds, along with the cash, three ways.
Autumn: I don’t have any objection to selling the stock and distributing the pro-
ceeds and the cash three ways, but I’d like to talk about the house and
the furniture. The house and much of the furniture has been in the
Conclusion
Autumn’s suggestion to package the money and stock because they can be easily
divided by three made agreement on those items possible. The negotiations on
the other items—the house, the antiques, the jewelry, and the art works—will
be more difficult. Waiting to make decisions on those items until some time has
passed gives the women an opportunity to look at a number of options.
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; deciding whether
there would be annual wage increases as well as merit increases; deciding to base
the increases on a percentage or equally distribute the funds for increases among
the professional and clerical staff; and establishing a work schedule to accommo-
date evening and weekend clients. Several issues also needed to be addressed: the
ability of employees to move up through the organization; tuition benefits; health
benefits, including benefits for partners in non-traditional relationships; what kind
of paid leaves there will be (personal, vacation, sick, funeral, etc.); and the assign-
ment of the limited number of parking spaces.
Employees: We’ve got a lot of items to cover. May I suggest that we divide
the items into three areas, and deal with one area at a time?
The first: Wage issues (pay schedules and the annual and
merit raise issues). The second: working conditions (work
schedules and promotional opportunities). The third: Ben-
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. Later negotiations were
difficult, but the parties were able to come to agreement because the wage issue
had been resolved.
Example 1
Tim and Kathy, after a brief marriage, are divorcing. They have no children, and
both have good jobs. Kathy was asked by her employer to relocate to another city,
and she agreed. The couple hoped to do the divorce without involving lawyers in
order to save money. They were in the middle of buying a house, and they were
making payments on school loans (for his undergraduate degree and her under-
graduate and graduate degree) and on two cars. They had also furnished their
house on credit. Their “property division” was mostly about dividing their debts,
rather than disposing of assets.
The discussion might become very heated, because Tim felt that Kathy had
taken advantage of him during the marriage. They met and married in college.
Tim began working right after graduation. Kathy borrowed more money to go to
graduate school full-time. Kathy’s first job paid more than Tim’s because she had
a graduate degree. It was her idea to buy the house and go into debt to furnish it.
Now, with her promotion sending her out of town, Tim worried that he would be
stuck with all of the debt, and might not even be able to keep the house.
Tim: You might be leaving town, but don’t think you’re going to stick me with
all of the mortgage and credit-card payments. You signed those papers,
too.
Conclusion
Having agreed to two items very quickly, 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. They also agreed that Tim
wouldn’t have to pay her that amount for five years, and he could pay it in annual
installments over a five-year period.
Example 2
ABC Company, a wholesale art dealer, and XYZ Co., an art gallery, 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. ABC usually uses UPS
Conclusion
ABC’s decision to offer a solution to XYZ’s immediate problem, at its financial
risk, generated a like offer from WeCanShipArt and a reasonable response from
XYZ. Having reached an amiable solution to the immediate problem, the three
companies were able to agree to undertake an investigation within each company
to determine when the artworks were damaged. They also agreed that if the inves-
tigations are not conclusive, they will split the cost of the three damaged pieces
three ways.
Example 1
Colleen: Ann, we plan on selling our Ford tractor when we move. I know you and
Jeff said you’d like one because you have about five acres. We plan to put
an ad in the paper next week, but if you’re interested, we’ll sell it to you.
Ann: Thanks! We really need one. Jeff spends many hours mowing the yard
every week, and even more hours in the fall picking up leaves. What do
you want for it?
Colleen: Well, we paid $5,000 for it six years ago, and it came with the bush hog
and the leaf pick-up.
Ann: Well, I don’t want to quibble. Why don’t you give me a price?
Colleen: Oh, I don’t have any idea. 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. Okay? No quibbling, no hard feelings either way.
Ann: That sounds great! I don’t want this to affect our friendship.
Conclusion
Ann and Colleen did not feel like negotiating over the tractor and running the
risk that it might affect their friendship. The “first and best” tactic enabled them to
settle the matter easily.
Archie: Well, I think we have agreed to all aspects of the job offer, except salary.
I want the job, and you know my current salary. I expect a fair increase,
but I don’t want to start off in a new job by negotiating with my boss!
So, how about you making your first salary offer your best one, and I’ll
take 48 hours to consider it. I’ll either accept it or reject it, no questions
asked. Okay?
Vernon: That sounds good. I don’t like negotiating over salary either. We want
you, but we have internal budget considerations and we must consider
equity with other employees. So, I’ll get back to you in three days.
(three days later)
Vernon: Archie, as we agreed, I came up with the best salary offer I can make.
Here it is, on this slip of paper.
Archie: Thanks. I’ll discuss it with my wife and get back to you in 48 hours.
Conclusion
Archie accepted the job offer, 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, who admired the
way Archie negotiated his starting salary.
Example 1
Kevin, 17 years old and a junior in high school, was dating a senior. 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.m. He knew his parents would not agree to let him stay
out all night, but he figured “all night” was relative. He and his date had decided
that as long as they could join their friends for breakfast after the prom, a 4:00 a.m.
curfew would be okay. Kevin had “negotiated” with his parents before, so he knew
that he would have to sell them very quickly.
Kevin: Mom and Dad, Sally’s Senior Prom is coming up, and we’ve made a lot of
plans with our friends that I need to talk to you about. First, you know that
Sally is really looking forward to this; you only have one Senior Prom in your
life. Second, since Sally is going away to college next year, we’re not going
to be dating exclusively after this summer, so the prom is a pretty big deal
to both of us. Third, I’m the only junior in the crowd, and it really wouldn’t
be fair if I wasn’t able to go along with the rest of the group. Fourth, we’re
all meeting at Donna’s so we can share a limousine. First we’re going to
dinner, then the prom, and then to breakfast at “Timothy’s.” As you know,
Example 2
Tencro Company decided to modernize and expand its business. It currently
employs 800 people, but it could easily add another 500 if it had the space
on its assembly line. The assembly plant is out-of-date, and a new, one-floor
operation would be very profitable. Tencro has approached the state’s Office for
Business Incentives to see what, if anything, the state can do to help the company
expand and rebuild. Tencro is not going to leave the state, regardless of the
incentives, and it does not really need any help. Nevertheless, other companies
have received incentives and Tencro certainly wants all it can get. The company
approached other states to see what incentives they might offer Tencro to locate
in their state, but was disappointed to learn that they offer very few incentives.
Tencro approached the state’s Economic Development Officer, and had this
conversation:
Tencro: We really want to keep our company here and expand it, but we’re get-
ting a lot of interest from other states willing to help us relocate. We
need to find out what you’re willing to do to keep us here.
EDO: Well, we’re of course interested in keeping you here, but there are lim-
ited options available.
Tencro: Let me just remind you of what our company means to this state. With
800 employees, we are one of the largest employers in this county. If
we can expand here, we’d be adding at least 500 new jobs. The spin-off
business from our operations is huge, and it will grow—everything from
sub-parts manufacturing to the shipping business we generate. Also, our
Conclusion
The posturing by both sides could have caused the whole negotiation process to
bog down, but for the fact that each party did its homework and was aware of the
true facts. Future negotiations continued, and the state did end up participating
in a housing subdivision in order to keep the purchase price down for the new
employees. Other than that, the training and the new road improvements were
all the incentives offered to Tencro. Tencro bought land in the industrial park,
borrowed money for the new building, and hired 500 new employees. The new
set-up was so profitable, Tencro was able to pay off the borrowed money in half
the time.
Example 1
Jay and Sue are looking to buy a house in a specific neighborhood because it has a
good school system. They found one they both like that lists for $325,000. Their
realtor told them that it sold for $290,000 two years ago, and that two similar ones
on the same street sold for $330,000 and $337,000 this year.
Sue: Let’s offer $325,000, before someone else does. That’s a fair price, and
houses in this area sell fast.
Jay: No, never give them their asking price. The sellers must be willing to come
down a few thousand …
Sue: Well, then $320,000.
Jay: No. We don’t know how anxious they are to sell or if they know the market.
Let’s low-ball them and offer $290,000—what they paid for it.
Conclusion
Jay and Sue avoided the so-called winner’s curse by making a low (but reason-
able) first offer, and the offer was based on fact: the prior negotiated price. The
buyers were very motivated to sell, since they had already bought another house.
Both parties felt that they made a good deal. If, as Sue had first suggested, they
had offered $325,000, the sellers obviously would have accepted and Jay and Sue,
realizing they offered too much, 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. They outlined how they would develop a new employee perfor-
mance-appraisal system, as requested by the human resource director. Lyle Fox-
worthy, the company president, was very impressed with their presentation.
Lyle: So what’s your price?
Bob: Can you tell us what you have budgeted for this project?
Lyle: No. Give us your lowest price.
(Bob and Frank meet privately to discuss the situation.)
Bob: I’d do it for $3,000 for each of us—$6,000 total.
Frank: Me too, but who knows what they are planning on offering.
Conclusion
Bob and Frank avoided the winner’s curse by forcing Lyle to make the first
offer. They also ended up getting three times ($18,000) their minimum price of
$6,000.
Example 1
Jerry, 19, completed his first year of college and came home for the summer around
the middle of May. His brother Sydney, 15, finished his freshman year of high school
at the beginning of June. Jerry had already started his summer job. In mid-June,
their parents began discussing a family summer vacation. Jerry pointed out that he is
expected to work until July 31st, and that he already made plans to visit with college
friends on the East Coast for the two weeks after that. He planned on being home for
one last week before having to pack up and go back to college. The week he would
be home would be the first week of school for Sydney. Here’s the discussion that
followed:
Mom: Well, it looks like we can’t really plan a vacation for all four of us. Dad,
what say you, Sydney, 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. Jerry will
be here, so you can go without me.
Dad: Wait a minute. I don’t want to give up on a family vacation that quickly.
Let’s see what we can work out. We have four options. Option 1: No
family vacation. Option 2: Mom and I go before Jerry leaves on August 1.
Conclusion
The goal was to have a family vacation. By proposing numerous options, they were
able to make that happen and not interfere with or argue about the merits of each
other’s individual goals.
Example 2
Joe is an attorney whose job responsibilities include managing three other attor-
neys (Andrea, Bob, and Carl); one paralegal; 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, but he can discharge employees for poor performance. Andrea considers
Conclusion
Joe’s willingness to offer more than one solution gave Andrea a way to look at this
unfortunate situation as an opportunity, and propose an acceptable alternative.
Andrea’s move and subsequent “approval” regime did, in fact, improve her work
performance. It also changed her attitude about being both a professional and a
team player in a corporate office. (Adapted from The Mind and The Heart of the Negotiator,
by Leigh Thompson.)
Example 1
Brooks and Maureen Wilson have just finished building a new home. They have
a fixed amount of money—$14,000. They both agreed that this is the maximum
they will spend on “extras” before moving in. They each agreed to list the items
they want and then to negotiate whether or not they will be purchased.
Maureen: First, let’s see if there are any items we both want. (She looks over the
list.) Yes, we both want the sod, the fencing, and a home theatre. Let’s
agree to those things.
Brooks: Right. Let’s see, that’s $9,500. Wow! We are off to a good start.
Maureen: Well, I’ll trade your sidewalk and trees for my whirlpool bath, which
takes another $3,000!
Brooks: Good, that makes sense. These are all permanent immediate needs, and
we both get things we want. We have $1,500 left, which I’d like to keep
in the bank.
Maureen: No, I’d like to spend some of it on lighting upgrades. Can we split it
evenly?
Brooks: Okay. $750 for lighting and $750 in the bank.
Example 2
Ohio Metals Company and Local 56 of the Primary and Sheet Metal Workers of
America-AFL-CIO have had a generally positive labor relationship for over fifty
years. During that time, management and union negotiators found that a “win-
win” approach to negotiations worked well, even in difficult years. This year, both
sides exchanged lists of initial demands at their first meeting. All items to be nego-
tiated and their desired outcome for each item were put in writing for review. The
combined lists total thirteen different items:
Desired Outcome
Win-Win
No. Item Management Union
Category
1. Length of Contract 3 years 3 years Compatible
In their second meeting, the negotiators agreed that they had compatible
positions on three items: (#1) length of contract, (#5) a new drug testing pro-
gram, and (#9) to continue the often-discussed no strike/no lockout provision.
They proceeded to draft the language to settle these issues. Next, they began
to trade off the exchange issues of similar value and nature. First, they accepted the
union job security proposal (#12) in exchange for the management subcontract-
ing proposal (#11). Next, they exchanged the economic issues of approximately
equal cost: the union pension increase proposal (#2) for the management shift
differential (#10); and the union clothing allowance proposal (#13) for the man-
agement funeral leave proposal (#8). Finally, the management profit sharing plan
(#4) was exchanged for the union overtime assignment plan (#7). At this point,
eleven of the thirteen original issues to be negotiated had been agreed to, signed,
and removed from the table. This gave members of both sides a sense of accom-
plishment as they began to discuss the remaining two issues for which they must
find a middle ground. Because they held opposite positions on these issues, one
Conclusion
This tactic is simple, but it can be very effective when a negotiation situation involves
several issues. Both sides first agree that all issues to be discussed will indeed be listed
and openly discussed. They then identify each as compatible, exchange, or distributive
so that the negotiations can begin in an organized manner. The tactic offers sev-
eral advantages: First, when you agree on the items where both parties have similar
desired outcomes, negotiations begin on a positive “win-win” note. Second, when you
exchange items so that each party achieves their desired outcome on one of the two,
you can use the process to settle many of the other issues on the table. Third, the most
difficult issues (often involving price or some other economic measure) can be negoti-
ated because you know that most items have been settled successfully and only a few
remain. A middle ground often must be found on each of these distributive issues if
you are to reach an agreement. Sometimes the classic “split-the-difference” method is
helpful in locating a middle ground, if both parties start from reasonable positions.
Example 1
Jasper and Rob met when they were assigned to the same dorm room their
freshman year in college. Since they didn’t know each other well, they decided
to establish “room rules” so that they would both be comfortable with the room
assignment. They agreed on which part of the room each would have; the loca-
tion of the TV, stereo, and refrigerator; and on what would be considered accept-
able “sharing” of each other’s junk food supplies. The final issue had to do with
“lights out” and quiet times for studying. Jasper studies during the day and early
evening and likes to stay up very late watching TV and visiting with friends.
Rob stays busy all day and evening with other activities, and studies late into
the night, so he wants a quiet room late at night. Here is how the last issue was
handled:
Rob: Okay, last item: I’d like it quiet in the room at night, so I can study. So
when’s a good time?
Jasper: (without hesitation) No way. This isn’t high school, you know.
Rob: Wait a minute. Let me finish.
Jasper: Finish or not, I’m not interested in a curfew.
Conclusion
It was clear that neither Rob nor Jasper was seriously considering the requests and
suggestions of the other person. Failure of both young men to allow one another to
have their proposal considered caused the relationship to break down. No agree-
ment was reached.
Example 2
ABC Company’s management was being restructured and compressed in order to
facilitate its new “just-in-time” manufacturing philosophy. Under ABC ‘s contract
with the union, employee grievances had to go through four levels of supervisory
review and appeal: a) verbal complaint to the non-union crew leader; b) written
complaint to a floor manager if the matter is not resolved in 5 days; c) a for-
mal “meeting” with plant manager if the matter is not resolved in 10 days; and
d) a hearing with company owner if the matter is not resolved in 20 days. Under
the restructuring, the positions of non-union crew leader and floor manager would
both be eliminated, and the union foreman would report directly to the plant man-
ager. The appeals procedure would have to be altered to reflect the restructuring.
The union contract required that management renegotiate this change in the
grievance procedure with the union. Neither side anticipates that there would be
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. After a
cooling off period, the two parties did meet again. This time, the company entertained
the ideas the union had tried to propose before, and actually accepted a three-step
procedure.
Example 1
Sue and Bill have been married four years, and now have a new baby girl. The couple
used to have Thanksgiving dinner at both families’ homes. Sue’s family (parents, four
brothers, one sister, their spouses, and ten nieces and nephews) always ate around
5:00 p.m. Bill’s family (parents, two brothers, two sisters, and at least five aunts
and uncles) ate around 7:00 p.m. Even before the baby’s arrival, 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). 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 and Bill decided that they had to begin alternating their Thanksgiving
Day visits between the two families. They flipped a coin to see who “got” them
and the new baby this year. Bill’s family won, and Sue called her mother to let
her know that they would not be coming for Thanksgiving dinner this year. Sue’s
sister Nancy called her to talk her into coming anyway.
Nancy: Sue, Mom says you, Bill, and the baby aren’t coming for Thanksgiving
dinner this year—that you’re going to Bill’s parents’ house.
Sue: Yes, it’s just too much to do both, and we’re really not able to enjoy either
one. Next year, we’ll get to our side.
Conclusion
Nancy’s goal when she called Sue was to talk her into coming to their
Mom’s Thanksgiving Dinner on Thursday. When that goal looked out of reach,
she suggested a unique alternative. By being flexible, Nancy was able to accom-
plish the real goal of the negotiations—to make sure that the holiday would be
celebrated with the whole family present. Everyone in Sue’s family liked the idea
of celebrating on the Friday after Thanksgiving, and it became the family’s new
tradition.
Conclusion
By exploring alternative financing plans suggested by the city, 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.
Example 1
Soon after the Jones family moved in next door to the Smiths, the neighbors began
to have problems. The Jones’ two younger children—boys in their mid-teens—hit
baseballs into the Smiths’ yard and scared the Smiths’ dog. The Jones family let
their tree branches hang over the Smiths’ back fence and rub against the Smiths’
garage roof. The Jones’ two older children—girls in their early 20’s—often had
friends over on Friday and Saturday nights. These parties could get rather loud,
and often lasted until 2:00 or 3:00 a.m. Before the Jones family moved into the
neighborhood, the Smiths could count on parking their car directly in front of
their house. But the Jones clan had four cars altogether, and often took up all the
space along the street in front of the two houses.
The Smiths called the police to complain about a late-night party, and asked
the officers to cite the Jones kids for parking too close to a corner. The Jones family
suspected that the Smiths called the police. They asked to meet with the Smiths to
talk about these disagreements.
Mr. Jones: We’ve obviously gotten off on the wrong foot, and we would very
much like to talk about how we can resolve these issues.
Mr. Smith: We don’t know what you’re talking about.
Conclusion
The disagreements and unpleasantness continued until the Smiths finally sold their
house and moved into a condominium. 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.
Example 2
Neno Enterprises is a shipping company with extensive global operations. Its local
headquarters has a union to handle its international shipping, although none of
the facilities outside the U.S. have labor unions. Neno has been negotiating the sale
of its business to a British company, and the deal is close to being final. The British
insist that a very strict confidentiality provision be part of the negotiating process.
The union laborers walked off the job on Friday, because they didn’t like a griev-
ance decision. Unless Neno can get the Union members back to work on Monday,
the British firm will walk away from the deal, but Neno cannot tell the union this,
or the deal is off. The union knows that the company is up for sale. Union officials
are afraid that a Japanese company might purchase it. Japanese companies often
do not “recognize” labor unions the same way U.S. or European companies do.
Neno’s president and the Union representative met to discuss the walkout.
Conclusion
On Monday, while the grievance was being resolved, the sale was finalized. Neno
called the union negotiator in and briefed him on the sale. He told him that it
would mean that the union would not only keep its jobs here, but the British firm
will allow them to organize at their foreign locations, as well. Because the par-
ties had dealt honestly with each other in the past, the union was willing to trust
Neno—even though he couldn’t tell them everything. Neno’s decision to respect
his confidentiality agreement and simply tell the union that he couldn’t disclose all
the information, rather than make up reasons, was the right decision to make.
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 prac-
tice this weekend.
Mother: Okay. Then you can go with Michele.
Conclusion
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.
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 tomor-
row (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-
Conclusion
At first, Amber resisted the chore she hated. But when her mother laid out the schedule and
gave her alternatives, she chose the one she most preferred, keeping her Saturday free.
Example 2
Roberto: I can’t properly advertise this new program with a $5,000 budget! I
need at least $20,000.
Felipe: (Roberto’s supervisor) Sorry, but the company president does not share
your optimism on this program.
Roberto: But it will never generate enough interest if no one knows about it.
Felipe: Well, I’m not going back to him again to discuss this program. Take it
or leave it.
Roberto: But I need to start the direct mail and newspaper ads within two weeks,
or we lose a whole year.
Felipe: Sorry, I can’t help.
(long pause)
Felipe: Let me give you three options: A. Use the $5,000 in the budget; B. I’ll
approve $15,000 for advertising, but I will cut your staff by one part-time
person (or $15,000); or C. I’ll approve $15,000 for advertising, but I will
cut your travel budget out completely.
Roberto: Well, I can accept B. I’ll find a way to do without one part-time person.
At least this way the program will have a chance to succeed!
Example 1
Susan, nearing her third year with the company, received a glowing report from
her boss on her job performance. This should have resulted in an automatic
promotion and a sizable pay increase. Unfortunately, the promotion had not yet
been approved, and the annual merit raise she was getting from the company
was the same 3% other employees were receiving. It was 16% less than she had
been led to believe she would be getting. Susan knew that she was considered a
valued employee and that her boss would want to do the best he could for her.
But she also knew he would have to be willing to go to bat for her with his supe-
riors if she was to get her advancement. She was determined to hold her ground
for at least a 13% pay increase and a promotion. Here’s how the negotiations
went.
Susan: Mr. Jones, I very much appreciated the fair job performance review you
gave me. You know my commitment to this company.
Jones: I certainly do; you are a valued employee.
Susan: I hope so. I have to tell you that while I appreciate what you have done
for me, I am very disappointed in the company’s decision not to promote
me and to limit my merit increase to 3%. I think you would agree with
me that I have performed well above expectations this past year, and
Conclusion
Mr. Jones went to management and convinced them that they should give Susan
the promotion and the 13% raise. Susan’s silence prompted Mr. Jones to continue
to offer solutions. Once he acknowledged that both items might be awarded some-
time in the future, the company’s refusal to grant them now was a harder position
to support.
Conclusion
By remaining silent, the Town Council’s representative left the mayor’s representative
with no room to maneuver. He either had to end the session or figure out what to
say to reengage the other side. In the end, the Town Council representative’s position
prevailed, and the agreement was renewed with no new provisions.
Example 1
Madeline bought an old farmhouse outside of a small town, and began to reno-
vate it as a home and a pottery shop. The property came with three acres of for-
est alongside a meandering brook. As was sometimes the case in these parts, the
brook was the property line separating her property from a neighboring farm.
Madeline built a gazebo about 500 yards from the brook, in a small clearing. One
day, after the gazebo had been there for about five months, she noticed that the
brook came within 100 yards of it. She traced the brook back along its course to
see why and where it had changed its path. She discovered that a rock barrier,
which an upstream neighbor had built, had redirected the brook further into her
property. She went to discuss this problem with the upstream neighbor and had
every intention of demanding that the barrier be removed immediately.
Madeline: Hi, Joe. I have a problem. Your rock barrier has sent the brook onto
my property and it is too close to my gazebo. You will have to remove
the rock barrier.
Neighbor: Well, Madeline, the brook and rock barrier are on my property.
The reason I built it was so that I could protect my patio. The brook
Conclusion
Madeline’s objective when she met with her neighbor was simple: Have the rock
barrier removed, and return everything as it was. When she found out that this
was not going to solve her neighbor’s problem, she widened her range of options.
By expanding the range of options available to resolve the dispute, Madeline was
able to protect her gazebo, restore her property line, and allow the neighbor to pro-
tect his home. She left room for a compromise, which enabled her to achieve her
goals.
Conclusion
The company was committed to limiting its exposure to $200,000. It initially believed
that the only option was to put that money into pension benefits. The pilots expanded
the range of options, however, by agreeing to let the company cap its exposure for
dependent health coverage. The $200,000 actually carried them through four years,
so the decision to be flexible was a good one. The health insurance market stabilized,
and the pilots knew what to ask for when the contract expired.
Example 1
Car buyer: What, $45,000 for a Volvo? I bought the one I’m driving for
$19,500!
Saleswoman: Yes, I recall the day you drove it out of here, but that was several
years ago.
Buyer: Yes, but the Consumer Price Index has not gone up 150%—nor
has my paycheck!
Saleswoman: So, do you want to look at something else?
Buyer: No, I love this car. I just can’t imagine the monthly payment on a
$45,000 car.
Saleswoman: With your 740 in trade, I guess it would be around $600 per month.
Buyer: Way too much!
Saleswoman: Well, what monthly payment did you have in mind?
Buyer: More like $300 per month.
Saleswoman: I’ll be right back.…
(20 minutes later)
Saleswoman: So, if I can give you this car with a $300 monthly payment, it’s a
deal?
Conclusion
The saleswoman knew the buyer was suffering from “sticker shock.” She decided to
cut the $45,000 price into “slices” the buyer thought reasonable. Once the buyer vol-
unteered that $300 was an affordable “slice,” she had him—she worked around the
$300 slices, and added the trade-in, down payment, and payout slices to reach the
total price she wanted.
Example 2
Cable representative: Yes, you can get the Disney channel for only $5.00 per
month, as promised.
Owner: But my neighbor pays $39.00 per month for your service.
I can’t afford that much.
Cable representative: I can’t discuss another client’s account. Let’s see, do you
want Disney?
Owner: Yes, but what else must I buy?
Cable representative: Only the basic service for $8.99 per month.
Owner: Great!
Cable representative: So, do you want HBO?
Owner: How much?
Cable representative: $5.00 per month.
Owner: Sure.
Conclusion
The owner thought his neighbor’s service at $39.00 per month was far too much,
but he agreed to six “salami slices” for a total of $38.00! Why? Because he judged
the per-slice price to be reasonable, and probably felt much better about the total
negotiated package because it was presented in modest individual slices, instead
of one total amount.
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. When
both sides believe that each has equally strong positions, pressure tactics should
probably be avoided. 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. For example, the traditional car salesperson might tell the
buyer, “I can only guarantee this price until 6:00 p.m. today, so are you ready to
make a deal? This might convince a few buyers, but others will walk out the door,
turned off by the tactic. Tactic #33 (The Bluff) is a classic pressure tactic. It should
be used with caution: It can end negotiations immediately, and it can destroy your
credibility. In some cases, however, it is effective. Tactic #35 (Applying Excessive
Pressure) is a similar tactic that should also be used with caution, but it can be used
effectively when one party clearly has an edge.
Some less-obvious and more easily accepted pressure tactics are to use visu-
als to control the negotiation talks by focusing discussion on subjects that favor
your side (Tactic # 34). Tactic #36 (The Element of Surprise) can catch an opponent
off-guard and cause stalled negotiations to move forward. Other less-obvious pres-
sure tactics include Tactic #37 (Divide and Conquer), which can be successful if the
opposing team has two or more members who hold different views of an issue, and
the use of humor. Humor might not look like pressure, but in tense, angry nego-
tiations, an unexpected element of humor can break the tension and encourage a
person to calmly get back to the issues.
Example 1
Don and Abby went in on the purchase of a sailboat with their friends
Lacey and Chloe. The two couples used the sailboat a lot the first couple of
years, together and separately. Don and Abby now use it less and less. Lacey
and Chloe didn’t know that Don and Abby were, in fact, getting a divorce
and each moving away (and would have no more use for the sailboat). When
Lacey found out that his employer was transferring him to another city
farther down the coast, he and Chloe wanted to buy out Don’s and Abby’s
interest.
Lacey: Don, big news! I’ve been promoted, and we’ll be moving south in the next
month or so. Chloe and I would like to take the sailboat with us, and we
need to talk to you about how we can buy you guys out.
Don: Wow, Lacey. I don’t know. Abby really loves that boat. We’d hate to give
it up. In the last couple of years, boat prices have really gone up. 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.
Lacey: I know. I think Chloe and I would be willing to pay more than just the
money you guys put into it. Although I do think there ought to be some
consideration for the two years you had use of the boat.
Don: Absolutely. And we don’t want to be unfair, but Don, I can’t tell you how
many times Abby has said how happy she is that we have the sailboat. It
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. If Don had not exaggerated the
importance of the boat and dealt with Lacey honestly, he likely would have found
himself in a stronger negotiating position.
Conclusion
Because the company’s president over-emphasized the impact of the market on the
company, he lost the trust of the union. The union became hardened in its position
that the employees needed wage increases in the new contract. When the market
took a swing up during the negotiations, the company’s position was weakened even
more, and the union ended up with a substantial increase in their contract.
Example 1
Christy and Tom had been dating for about a year. Christy thought that their rela-
tionship was exclusive: She hadn’t gone out with anyone else, and she didn’t think
Tom had, either. The couple had not discussed marriage, but Christy thought
the relationship was heading in that direction. Both of them were still in graduate
school and worked full-time, so their “free” time was very limited. Christy was
surprised and hurt when a friend of hers mentioned that she had seen Tom at the
movies with his former girlfriend, Charlene. Christy realized that asking for a com-
mitment from Tom at this stage would be a very serious discussion. She knew that
if she made such a demand and threatened to leave him unless he made a commit-
ment, it might backfire. Here’s how the discussion went:
Christy: Tom, Sara said she saw you at the movies with Charlene yesterday.
Tom: Oh, yeah. I knew you had a class, and I really wanted to see the new
Lenny Bruce movie. I called Charlene and she was available. You’re not
upset about that, are you?
Christy: I don’t want to be, but I really am. I guess I’m just surprised. We don’t
have that much free time together. I really hate it that you chose to see
the movie with Charlene.
Conclusion
Tom didn’t want to lose Christy, and at first he thought she might bluffing. Since he
wasn’t sure about that, he had to make a commitment or risk losing her. If Tom had
“called” Christy’s bluff, Christy would have had to decide whether or not she was
indeed bluffing or if she would really end their relationship. She convinced Tom that
her feelings were strong. He believed she was sincere, so he didn’t call her bluff.
Example 2
Nexon and its union had been negotiating a new contract for the past cou-
ple of weeks, but very little progress had been made. The union negotiators,
Conclusion
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.
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 hec-
tic; 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
Conclusion
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 respon-
sible for developing and presenting the annual budget recommendation for
Conclusion
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.
Example 1
We have all been at the mercy of someone who uses pressure bargaining. Try
bargaining with a plumber! This homeowner, not blessed with many household
repair skills, once had to call a plumber in for emergency repairs. Since his toilet
had overflowed and water was continuing to run all over the floor, the guy was in
no position to dicker over the price of the repair. The same kind of thing happened
a couple of years before that: In the middle of August, his air-conditioning unit
went out. He was at the mercy of the company that could install an appropriate
unit the fastest, and was forced to pay whatever they demanded.
On the other hand, there were times when there was no pressure and no
emergency. Since the heating and air conditioning company held no leverage over
him, he was able to successfully bargain for other services. Many companies sell
“tune ups” and routine seasonal checks to keep their people busy all year. They are
more flexible on price and service when they know the consumer is not under any
pressure to buy the service being offered.
Example 2
Let’s face it: Sometimes one party holds all the cards. It’s easy to prediet the out-
come in collective bargaining talks if one side is clearly in a very favorable posi-
tion, while the other is not—that is, when one side has “leverage” over the other.
Unions can strike at any time to achieve their goals if they have some leverage,
such as the advantage of time. If the employer is a shipping and express mail com-
pany, for example, its union has the advantage in the weeks just before Christmas,
because this is the busiest time for that industry. The owners of professional sports
Conclusion
“Pressure bargaining” is a way to achieve objectives that are greater than what is
deserved or desired by the other side. A note of caution: Circumstances in one
round of negotiations might give one side an advantage, but before you choose
such a tactic, consider whether or not the two parties will likely meet again in the
future to negotiate. If so, will what goes around come around?
Example 1
A father and his two daughters were on their way to visit the grandparents.
Almost from the beginning of the three-hour drive, the girls had been fussy. They
stopped for lunch at a fast-food restaurant and shared a children’s meal that came
with a small doll. About an hour into the drive, the little girls began to fight over
the doll. Their dad tried to reason with them, and here’s how the “negotiations”
went:
Dad: You two stop fighting. We’ve got a long ride ahead of us, and I can’t
stand it. The doll can be shared. You’re driving me nuts.
Andrea: The doll is mine; I took it out of the box. Tell Susie to let me have it.
Susie: The doll belongs to both of us. Mom said so. Just because you saw it first
doesn’t make it yours.
(Their dad pulls to the side of the road and turns to face them in the back seat.)
Dad: Stop it right now. I can’t drive if you keep this up. Just share the doll.
Andrea, you have it this part of the trip, and Susie, you have it when we
drive home.
Andrea: Okay.
Susie: Okay.
(In a few minutes, the fighting starts up again. This time, the argument is over the
doll’s shoes; Andrea had taken them off the doll, and Susie hid them under the
seat.)
Conclusion
Dad’s use of a “surprise” tactic was extreme, but nothing else up to that point was
working, so it was worth the risk. Both Andrea and Susie were so shocked by their
dad’s action, they didn’t say another word. The tactic was so successful, in fact,
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. The auditor asked to meet
with the editor to explain his position. The auditor’s job was to make sure that tax
dollars collected for the local education system were appropriately handled. He ini-
tiated the litigation against the local school board members and several banks that
invested the money for the board, charging that they breached their duty in their
handling these funds. The defendants contended that the auditor’s actions were
politically motivated, and that they had invested and spent the tax dollars wisely.
The litigation itself had been going on for more than three years, at great expense to
the auditor’s office and the school board. The local newspaper was prepared to urge
the auditor to end the litigation. Here’s how the meeting went:
Auditor: I appreciate a chance to talk to you about this litigation. I think I have
acted properly, and I hope I can convince you of that.
Conclusion
The editor wrote an editorial urging a resolution for the good of the community,
but recommended that the parties reach a settlement, rather than drop the case.
The auditor successfully used the element of surprise in announcing the settle-
ment and thus changed the direction of the editorial.
Example 1
Tina’s husband Mike wants to buy a pool table for their family room. Tina and
their son Kevin are against the idea. 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 fam-
ily room. Kevin is against it because he is turning 16 years-old soon, and a car is
more important to him than a pool table. Mike knows he needs to get either his
wife or his son on his side.
Tina: I’m really against this pool table idea.
Kevin: So am I.
Mike: I know, but I think it will get a lot of use. I can remember spending hours
playing with my friends and family when I was growing up. I know we’ll
all enjoy it, especially Kevin.
Kevin: I don’t really care about a pool table, Dad. I want to talk about a car!
Mike: It’s really not one or the other, although getting your license and getting
a pool table are connected.
Tina: What do you mean?
Mike: When Kevin and his friends get their licenses, they’ll be mobile! The last
thing I want is for them to be out cruising around, night after night. I’d
Conclusion
Mike found an argument that divided Tina and Kevin. Instead of both opposing
the idea, only Kevin did. Once Mike convinced Tina of the idea’s merits, she joined
his side of the debate. They bought the pool table, and Kevin and his friends use
it often.
Example 2
Negotiations on a new union contract seemed to be going quite smoothly. A num-
ber of contract changes have already been worked out and Wylma, the chief nego-
tiator for the company, has just presented the company’s initial wage offer. Tom,
the head of the union negotiating team, received it without comment. Wylma was
surprised the next day when Tom started the meeting off with an out-and-out
rejection of the wage offer and made a demand for a wage increase of four times
the company’s offer. She noticed that Jim (another member of the union’s negotiat-
ing team, who was studying the company’s financial records for the team) became
uncomfortable when he heard Tom’s demand. Here’s how the negotiations went.
Wylma: Tom, I’m surprised. I thought we were making real progress. What hap-
pened?
Conclusion
Wylma’s appeal to Jim’s knowledge of the actual financial situation of the company
worked to divide the union’s negotiating team, forcing them to reconsider their
demand. When the negotiations began again, Tom had reduced his wage demand
significantly, but he added some workplace changes that Wylma was comfortable
negotiating.
Example 1
The four Jones kids grew up, married, and had children. It was a tradition in the
Jones family to spend Thanksgiving dinner arguing about how the family wanted
to celebrate Christmas. When all of their children were small, it was easy to agree
on just giving presents to the children, but as the children grew up and had fami-
lies of their own, some of the siblings decided they liked giving presents to one
another, so pressure grew to draw names and exchange gifts. Sometimes the argu-
ment got heated, especially between Madison and Cory, the oldest and youngest
Jones children.
Madison: Okay, I want to say something. I know that you all think I’m silly
about wanting to exchange Christmas presents among the adults, but
it is really important to me. Ever since Mom and Dad died, I don’t feel
Christmas in the way I used to, and it makes me very sad.
Cory: Madison, get over it. You are almost 40 years old. 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. We can’t afford to buy
each other things we really need, so what’s the point? I don’t need
another tie!
Madison: It’s not the gift, but the thought that matters.
Conclusion
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 par-
ticipate 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 techni-
cian 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.
Conclusion
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.
M 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.
Example 1
Julie and Dara both attend a local preschool. One day, they were the last children
left in the playroom for the remaining two hours of the day. Julie wanted to play
“dress-up,” but she needed Dara to play with her. Dara, however, was ready to
color. The day-care worker wanted to take them outside for a while so that he
could visit with his friend, who was outside with older children. Both of the little
girls liked to play ball when they were outside, but since the other children in their
room were not there, they would have to play ball with older children.
Mr. C.: Girls, how about going out to the yard for a while? You can swing or
play ball.
Julie: I want to play “Princess” and I want Dara to be the “Prince.”
Dara: Can I color now? You said we would color later. Isn’t it “later” yet?
Mr. C.: Right now would be a good time to go outside.
Julie: I want to play “Prince and Princess.” Dara, don’t you want to play? We
could color before your mom comes, or maybe tomorrow.
Dara: If I can be the Princess, not the Prince. Then we can color.
Julie: Okay.
Conclusion
The children stayed inside and played dress-up, and they still had time to color.
They did all the compromising they were willing to do. Mr. C. failed to offer the
children something that was as important as the plans they had made.
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. The
existing parking lot didn’t meet the current parking standards for that size theater,
however. According to the city’s zoning laws, the owner had to supply additional
parking, or apply for a variance. The owner decided to try for a variance. When
his variance application was made public, 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. 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 owner and a small group of neighbors met to
talk about these problems.
The neighbors: The neighborhood has four concerns: Theater patrons will be
taking up scarce on-street parking spaces; there will be an over-
all increase in traffic coming through the neighborhood and
vehicles will be turning into and leaving the parking lot; the
parking lot will start to look trashy; and teenagers attracted by
Conclusion
Both sides had to give up something on certain items in order to reach agreement.
The compromises were what everybody could live with, however. And a year after
the theater opened, the neighbors reported that they were very happy with the way
it all worked out. The fences created a buffer from the lights and noise, and they
discouraged patrons from parking on neighborhood streets.
Example 1
Joan was new to the neighborhood, so her neighbor’s barking dog came as
an unpleasant surprise. Joan had a new baby, and sleeping at night was already
a difficult proposition! When the neighbor’s dog began to bark at 3:00 a.m.
and didn’t stop until 6:00 a.m., Joan was already pretty tired, and started to
get upset. She sought advice from the family on the other side of the neigh-
bor with the barking dog to see whether this 3:00 a.m. incident was usual
or unusual, and what kind of complaints might have already been made. She
learned that everyone in the neighborhood had complained at least once, and
that as angry as they were, they had gotten nowhere. The dog was Mrs. Lone-
ly’s only companionship, and because she was hard of hearing, she just didn’t
think it was a serious problem. She didn’t believe her neighbors ought to
complain about the barking. Joan decided to at least try and talk to the
neighbor.
Joan: Hi, Mrs. Lonely. I’m Joan, and I just moved in next door.
Mrs. Lonely: If you’re here to complain about my Rocky, just forget it. Close your
windows at night and don’t listen.
Example 2
Company ZZZ planned to close its manufacturing plant and lay off 300 union
employees. Under its new corporate structure, its 150 management and sales
employees could continue to work in Happy City, U.S.A., overseeing a factory
in Mexico and selling products in the states. 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 employ-
ees. When he heard the news on the radio, the mayor called and asked for a
meeting with Company ZZZ officials. Company ZZZ, recognizing that the layoffs
would be an issue in upcoming local elections, agreed to meet with the mayor.
They anticipated that it would be an unpleasant meeting. Here’s how the meeting
went:
Company ZZZ: We’re very sorry, of course, that the press got hold of the story
of our company’s activities before we could call you to let you
know. Hearing about this from the press obviously puts you in a
very embarrassing situation.
Mayor: (very friendly) I understand how these things happen. 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, you
would have.
Company ZZZ: (surprised) Well, that’s very understanding of you.
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 ques-
tion. This strategy worked. The mayor was able to broker a deal for the “disad-
vantaged business” to buy the plant and convert it to a different widget maker.
Many laid-off employees did indeed find new jobs at the plant, and the mayor
was reelected. Unfortunately, the 150 management/sales jobs did end up moving
to Mexico.
Example 1
Susan, age 15, and Alexis, age 14, were on vacation with their parents in Myrtle
Beach, South Carolina. The two sisters had saved up a little money so that they could
buy souvenirs. Alexis, the younger sister, had $40.00 to spend, but Susan had only
$20.00. Susan wanted to negotiate with Alexis to “pool” their money so they could
buy something together. Alexis agreed, until Susan said they would evenly split what
they bought. Somehow, Alexis knew this was not fair. She borrowed a tape recorder
so she could ask her father if this was a fair deal. Susan repeated her demand, this
time in front of a hidden recorder. Alexis then played the tape for her father, who
was disappointed to hear that she might propose such a deal. He asked his elder
daughter about the arrangement. Susan denied it. Then he played the tape.
Conclusion
For the first time in her life, Susan understood the impact a tape recording can
have when it reveals a lie. She agreed that her proposal was not fair and that she
had tried to take advantage of her younger sister.
Example 2
Three men were meeting to discuss a charge of sexual harassment that had been made
against Stuart Jones. Fred Adams, the investigator, Michael Wood, Jones’s supervi-
sor, and Jones, the accused, are talking about a possible settlement of the issue.
Conclusion
Jones had knowingly lied when he denied the charges. He failed to think about
what might be the next step. When Adams set the tape recorder on the table and
revealed that he had witnesses, Jones suddenly realized that his strategy would not
work. But by refusing to repeat his answers, he also lost his negotiating position.
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. Their dad instructed them to share
the candy bar, which certainly is large enough (he naively thought) for two young
children to easily share.
Example 2
Two friends and business partners, Clarence and Archie, jointly purchased four-
teen acres of lakefront property several years ago. Archie is ready to build a retire-
ment home on the property, and wants to divide it into two separate parcels.
Clarence agrees to divide it, but is not sure how to arrive at a fair split. They have
a recent appraisal that values the property at $150,000, 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.
Archie: Here is the map. There is only one place for an access road that must
serve all lots.
Clarence: Right. I don’t really care which lakefront lots I keep. They all have a
great view and are equally desirable to build on.
Archie: I really don’t care either. 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. That makes them more desirable.
Archie: That’s true, so we should be able to divide the property fairly. 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. The remaining lots should be distrib-
uted between the two parcels to make each parcel as equal in value as
possible. Then I will choose which parcel I want. Deal?
Clarence: Sure, that sounds fair. Give me the map and a pencil.
Example 1
Brenda Davis is always thinking about the repairs that might be required on an
item. Her husband Jason, supposedly the bargainer in the household, is expected
to dicker over the price. They recently purchased a new bedroom suite after they
carefully priced comparable furniture all over town. The suite they liked best was
already at the lowest price in town (the retailer was having a real sale). Jason was
having a hard time getting the salesman to lower the price. However, Brenda did
her part when she said, “Okay, we’ll take the suite if you’ll throw in free deliv-
ery and set up the furniture.” Under store policy, delivery was limited to a small
geographical area, miles from their home, and the delivery carrier doesn’t set up
mirrors, attach legs, etc.
Conclusion
The amount the couple spent was fairly large, so the salesperson delivered the
suite himself. With a great deal of effort, he also set up all of the furniture in a sec-
ond-floor bedroom. His tactic was to throw in a “nickel” in order to make lots of
“dollars.” Many people have witnessed or used this effective negotiating tactic.
Example 2
An experienced and skillful union organizer liked to tack on a tiny less-sig-
nificant item each time a company and its union negotiated on a large and
Conclusion
The nickel and diming tactic is a classic negotiation tactic used successfully in a
variety of situations. If used correctly—at the very end of a negotiation—the tactic
can usually provide a small gain. If one party misjudges the situation, it can be a
dealbreaker, so be prepared to withdraw the nickel and dime item at the hint of
trouble.
Example 1
Donna: Mom said to take what we want from the old house and toss out the
rest.
Kathy: I suggest we take turns choosing which of these things we want. You can
go first.
Donna: Okay. I’ll take the color TV.
Kathy: I’ll take the pool table.
Donna: I’ll take the bar with stools.
Kathy: Then I’ll take the couch and love seat.
Donna: No way! These are the last two pieces of furniture, and all the rest is
small junk.
Kathy: But they are a matched set.
Donna: They match, but they are two pieces of furniture.
Kathy: Well you took the bar and four stools as one item!
Donna: They are part of one set.
Kathy: Not if you accept your logic!
(Pause)
Donna: You’re not being fair…
Conclusion
Kathy and Donna needed an arbitrator to settle their disagreement. Johnny had the
“halo” of an honest person. He might or might not have also been a good arbitra-
tor, but Kathy and Donna assumed that one positive quality (honesty) would carry
over to other areas.
Example 2
During a heated labor negotiation, 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. The union
negotiators, with a record of labor involvement that included three recent strikes,
Conclusion
The union leaders gave Boston a great deal of respect (even in areas such as budget-
ing and actuarial tables) because of his former position. They might have stretched
his halo farther than his expertise and experience warranted, but the power of the
so-called halo effect was great.
Example 1
Henry and Maria Lopez are interested in a house that lists for $275,000.
They believe it is overpriced. The owner, Sam Jones, has owned the house for
24 years and is downsizing to a condo.
Henry Lopez: We love the house and have made a written offer of $240,000.
Sam Jones: What? That’s $35,000 under the listing price!
Maria Lopez: We realize that, but we feel that it’s a fair offer.
Sam Jones: How can you say that?
Maria Lopez: 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. Here’s a list of the five that are about the
same size as yours. They sold for: $225,000; $229,000; $235,000;
$237,000; and $237,500. This offer is for more money than any
four-bedroom houses on this neighborhood list. We love your
house, but you’ve priced it way too high.
Sam Jones: I’ll get back to you.
(Next day)
Sam Jones: We’ve reviewed the records you’ve produced, and we are counter-
ing with an offer of $250,000.
Conclusion
The Joneses had based their asking price on the advice of a friend, who was not
particularly knoledgeable about real estate. The facts presented by Henry and
Maria Lopez caused Jones to re-counter their asking and likely sale price.
Example 2
Supervisor: You know the policy. You can’t pay more than $1,600 for a com-
puter.
Hatfield: My staff has done a lot of research, and we know that only this model
will meet our needs. We’ve talked with purchasing and we have the
authority to buy seven for $2,400 each. That’s the bottom price.
Supervisor: If I okay this purchase order, I’ll get called on the carpet. No one can
go over $1,600 unless the company president approves.
Hatfield: While I was at purchasing, I asked for a list of all new PCs bought
this year. Here it is. The last 20 were over $2,000 each.
Supervisor: Well, I’ll be… Okay, if other departments have ignored the policy,
let’s not worry about it. Order the new computers.
Conclusion
Hatfield had anticipated what his supervisor’s position would be, and did his
homework. He found facts that supported his position, and wisely chose exactly
when to present them in order to make his point.
Example 1
Example 2
Jack: Mark, are you sure I can’t get your information technology people to give
us direct information on product sales?
Mark: No, we can’t do that.
Jack: Why? Some policy?
Mark: Yes.
Jack: What’s the policy number or date of approval?
Mark: I don’t know.
Jack: Can you get me the number?
Mark: Sure.
(Next day)
Jack: Do you have the policy about giving out product sales information?
Mark: No, I couldn’t find anyone who knew it. They say it’s a security issue.
Jack: Security?
Mark: Right. If that data ended up in the wrong hands, it could kill us.
Jack: But this forces us to make decisions without complete information!
Mark: Yes, but it’s because you don’t have access clearance.
Jack: Who does have access clearance?
Mark: Mike, Brooks, Babu, Sue, Jay, Mary, and Kenzie.
Jack: Mary and Kenzie? They are 2-3 pay grades below us, and they don’t even
have a use for the sales data.
Conclusion
Jack continued to probe by asking why and who in order to find out more about
“the policy.” He intended to do this until he hit a dead-end or was able to find a
solution to his problem. Once he discovered that employees in lower pay grades
had access clearance, Jack was able to receive clearance as well. His probing ques-
tions turned up a critical fact.
T he final stage! It might come minutes, hours, days, or even months after
the first offer is presented. When two parties believe they have an oral agree-
ment, 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 condi-
tions. 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, 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.
They bring it out when a dispute arises, and the child learns an important les-
son about life. Other final-agreement tactics include Tactic #47 (Giving Premature
Congratulations) to make the other side feel good about having achieved an agree-
ment (while you spring another condition on them), and the classic Walk Away
(Tactic #48), which is used only when a negotiator is prepared to end negotiations
without an agreement and you want the other party to make a final concession to
reach a settlement.
If both parties desire a settlement but cannot seem to reach it through the
usual give-and-take process, Tactic #49 (Final-Offer Arbitration) should bring
about a settlement. In this process, the two parties agree to let a third party render
a decision on unresolved issues and agree to accept the arbitrator’s decision as final
and binding. When multiple issues are at stake and most have been agreed upon
during negotiations, this process can easily result in a final settlement. If friends
or neighbors need to settle something but prefer to avoid the negotiation process,
this tactic can produce an agreement.
Example 1
Many husbands and wives have different ideas about how they’ll spend their vaca-
tion. Larry Snyder gets bored staying in any one place for many days, but his wife
Nancy likes to stay put and relax. They both have stressful jobs and look forward
to their annual vacation together. After days and weeks of on-again, off-again dis-
cussions, Nancy brought up the subject of vacation again after dinner. She said,
“I’m thinking of agreeing to your plans for vacation. Let’s do go to Virginia Beach
and Washington D.C.…” Larry was very pleased that his wife was agreeing to the
idea he had been trying to sell. As he hugged her, she continued to speak: “…as
long as you agree to drive us to visit my mother on her birthday.”
Conclusion
The husband was so excited about visiting Washington, D.C. 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. His wife had carefully
planned her exact “premature” vacation agreement.
Example 2
Negotiations can take a long time and incorporate many issues. Weeks of stressful
meetings cause both sides at the bargaining table to look forward to its conclusion.
Near the end of a particularly anxious bargaining session when there was little time
left to negotiate, one exhausted negotiator saw that his team was equally weary and
Example 1
Jay Vahaly has purchased three new Toyotas from Pembroke Toyota over the past
twelve years, all from Sue Wilson, a veteran salesperson. He stopped by Pembroke
one day to look at the new models.
Jay: Hi. My name is Jay Vahaly. I’ve worked with you before.
Sue: I remember you, Jay. You bought your wife a new van just last year,
right?
Jay: Yes, and the lease on my Avalon is about to expire. I like it, but I thought I
might want to try a new Highlander.
Sue: Let me get you the keys so you can take this one home overnight to see how
you like it.
(Vahaly drives the new Highlander home. He really likes it, but his Avalon has
been a good car, and he can simply buy it when the lease expires. The next morn-
ing, the following exchange occurs.)
Jay: Sue, here are your keys.
Sue: Well, Jay, how did you like it?
Jay: Okay, but my Avalon is a good car, too. I don’t want to negotiate. You had
time to assess my car; if I roll over the lease to a Highlander, what can you
do on a 36-month lease?
Conclusion
Jay knew his BATNA (best alternative to a negotiated agreement): to go somewhere
else if the deal isn’t good enough. He effectively used the walk-away tactic to let
Sue know that he was firm on the price.
Example 2
Larry and Judy Bizannes own the Bizannes Music Mart, a successful musical instru-
ment sales and rental store. They’ve talked about retiring in recent months, but
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. In reality, they were pre-
pared to accept $5.0 million, but their continued walkout convinced Michael that
they would hold firm.
Example 1
Jenny and Lynne are sisters. Jenny has an antique Singer sewing machine, which
she has kept in a barn for over ten years. One day Lynne dropped by for a visit
and the discussion turned to the old Singer. Lynne told Jenny that she and her
husband Gary have restored two other Singers, and would be able to restore hers
as well. Jenny told Lynne she could take the old Singer that she has no inter-
est in (and doubts that it is worth restoring). Six months later, Lynne and Gary
bring the restored Singer to Jenny’s house. They inform her that they put the
machine on e-Bay and have an offer of $1,000. Jenny told them to sell it. Lynne
responded that this was their intention, but they wanted to give Jenny $500 for
her “share” of the machine. The following discussion occurs:
Jenny: The old machine wasn’t worth $50 when you took it. Keep the $1,000.
Lynne: No. We have a few dollars invested in parts and we had fun working on
it. Let’s split the money.
Jenny: No, I won’t take it. I offered it to you for nothing. That was the deal.
Lynne: No! I suggest that we each write down our position and let Dad choose
one of the two as the final decision. But he isn’t allowed to try to find a
“middle ground”—just to choose one position or the other.
Conclusion
Jenny’s final position was that she receive $50—the maximum possible value of
an old “junker.” Lynne proposed a 50-50 split. Their father found Jenny’s position
to be the most reasonable; he did not need to “haggle” with them, since he could
only choose one offer.
Example 2
Ralph: Well, Tina, after six weeks of negotiating, we are down to only three
unresolved items.
Tina: Yes, but we’ve made no movement on any of them since we started.
I can’t see any way to reach an agreement.
Ralph: I know. My troops are getting restless, so I am invoking the final-
offer arbitration ground rule we have in place.
Tina: Good. Then we both submit our final offers to Judge Ryan within 48
hours, and meet back here in 72 hours—3:00 p.m. on Friday.
Ralph: Right!
(Friday at 3:00 p.m.)
Judge Ryan: Here is my written, binding decision on the three items. As a brief
explanation, first on the health insurance co-pay, I have chosen
management’s offer to keep it as it is under the current contract.
The union’s position could have run into millions of dollars, based
Conclusion
The final-offer arbitration process enabled the parties to gain a fast, reasonable
resolution to their last three unresolved issues, and peacefully finalize a contract
that contained several important gains for both sides.
Example 1
Bill and Paulette had been house-hunting for some time. They finally looked at a
house they really liked. The owners were selling the house without a real estate
agent, and while Bill and Paulette had been using an agent to help locate houses,
they looked at this particular house on their own. They saw the “For Sale” and
“Open House” signs, and decided to stop by to see if they liked the house. They
were not the only couple to come to the open house, however, and one of the
other couples looked very interested. Bill and Paulette fell in love with the house,
and felt that they would have to work fast to make an offer before someone else
did. Bill pulled the seller aside.
Bill: Can we talk to you a minute? What’s your asking price?
Seller: We’re asking $152,000.
Bill: And that includes the appliances in the kitchen? And all of the drapes and
blinds?
Seller: Yes, all the usual stuff in a sale. Obviously, not the furniture.
Bill: Okay. We’d like to make you an offer of $150,000. If we shake hands on
it right now, we won’t be involving our real estate agent.
Conclusion
The seller had always intended to leave the garbage disposal, the hutch, and the
two area rugs, and had been prepared to drop his price to $145,000. When he had
the chance to put the deal in writing, he left the price at $150,000 and added the
additional items to “sweeten the pot” and give Bill and Paulette a deal they couldn’t
refuse. It worked.
Example 2
Monica brought a sex discrimination charge against her employer, a public agency.
In her complaint, she said that her supervisor had repeatedly asked her out, and
when she refused, he began to have “problems” with her job performance. The
supervisor assured the employer that there was no basis for her complaint, and
that the problems with her job performance were, in fact, real. The supervisor
pointed out that he had a staff of 20 or so women, and that no one would ever say
that he was guilty of any type of sexual harassment or sexual discrimination. The
employer’s affirmative action officer looked into the charges and determined that
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, to
his disadvantage. Monica accepted the $200,000 and the conditions of the offer.
There was a confidentiality agreement, but word did get out that a public agency
paid $200,000 when all that was asked for was $100,000. It was made clear that
the employer had paid the additional $100,000 just to get the employee to “with-
draw” the complaint. It would have been a better strategy in this situation to raise
the issue of withdrawing the complaint during the actual negotiations.
A s you can see, reaching an agreement is sometimes a long and difficult process.
Unfortunately, operating under an agreement after it has been reached can be even
more difficult. As these examples of personal and business negotiations show, it is
much more effective in the long run when the parties enter into “win-win” agree-
ments; when they engage in honest “give and take” negotiations; and when they
agree to solve problems together, rather than attack each other. Reaching an agree-
ment is the first step; then the parties have to abide by the agreement.
One way to help the parties abide by an agreement is to put it into written
form. Putting an agreement into writing serves three purposes: communication,
commitment, and contract. The degree of detail and formality of a written document
will, of course, depend on the kind of negotiations in which you are involved.
When two friends agree on what movie to see, a written document is hardly neces-
sary. A union contract, however, most certainly needs to be in written form. How-
ever, even an informal agreement benefits from some type of written documenta-
tion. In Tactic #17 (Package Items), the three sisters reached an amiable agreement,
but some of the decisions were put off for a couple of months. If the agreement
reached at the time had been put into writing with all three sisters signing it, it
would have been easier to resume negotiations at a later date.
Communication
Hearing is not necessarily the same as listening. Think of how often you have said
to someone, “Oh, I thought you said something else.” By the same token, talking
is not always the same thing as communicating. Certainly someone has said to you,
“That may be what I said, but it was not what I meant.” Clear communication is
essential if you want to reach an agreement and have it abided by.
Commitment
Reducing an agreement to writing often forces both sides to truly commit to the
agreement. When you create a written record of the details of an agreement,
you have created something tangible that can be referred to in the future when
memories become fuzzy. Oftentimes just seeing the agreement in black and white
conveys its import as well as or better than hearing about it. Who isn’t excited
about buying a brand new SUV or truck? Until, that is, the price is spelled out
in the loan document as “twenty-two thousand, nine hundred and forty-four
dollars—$22,944.”
In Tactic #14 (Don’t Always Hide Your Weaknesses), Jason agreed to change his
study habits if he couldn’t pull his grades up by the end of the semester, a couple
of months away. His mom could more easily enforce the agreement if she had it in
writing. If Jason fails to live up to his side of the deal, he can be reminded of the
details because it’s all there in black and white.
Negotiation situation:
Parties involved:
Issue:
Exercisethe
Putting Forms
Agreement in Writing 195
Business Negotiations
Negotiation situation:
Parties involved:
Issue:
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www.negotiationsources.org
Christina Heavrin J.D. has practiced law for 28 years primarily in the public sec-
tor as an attorney for local government in her hometown of Louisville Kentucky.
In addition to negotiating numerous litigation settlements and contracts, 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