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SECTION I: INTRODUCTION
Real-Life Negotiation Situations
You feel you’ve been had. Sucker-punched. Taken for a ride. Why? You’ve been talking to your next-door neighbors about their cell phone service, and you find out that they are paying roughly half the monthly rate that you are paying! To make matters worse, you learn that their phone has text-messaging, a camera, no roaming charges, AND e-mail capability! Your cell phone does not have these functions. And the final insult? They didn’t have to sign a contract— and you still have 18 months left on yours. At first you get mad, thinking the phone company made a mistake that is costing you money. After all, you pride yourself on being an informed consumer— how else could this have happened? Then you ask your neighbor how he got such a good deal. He tells you that he and his wife simply negotiated the agreement when they switched providers. Boy, do you feel frustrated and foolish. You realize how easy if would have been for you to have negotiated the same deal, if only you had tried. The fact is that most people miss many opportunities to negotiate in their professional and personal lives. Negotiating is a critical ability that many of us lack, yet anyone can become a competent negotiator. It simply requires (1) knowing when a particular situation is ripe for negotiation; (2) knowing who is able to make a decision for the other party (you often need to ask to speak with the supervisor or manager in charge); and (3) knowing how to negotiate. Read this easy-to-follow book, and learn how to negotiate by practicing a few tactics presented here. As you read, you’ll be amazed at all the everyday situations in which having the ability to negotiate effectively can enrich your life.
Practical Tactics for Work and Life
In this book, we provide the reader with 50 proven, practical, and easy-to-apply negotiation tactics. We minimize the jargon and long-winded stories so you can quickly learn how to use each tactic (usually in less than a day!). You do not need to wade through hundreds of pages to find a single useful tactic. In fact, most people find a few interesting tactics right away, and try them out immediately. Each tactic is briefly defined and used in work and life examples—no lengthy anecdotes and no wordy theoretical discussions. Each is written to stand alone; the reader does not have to read and retain many pages of discussion just to understand how to use the tactic.
50 Practical Negotiation Tactics
Tips on Getting the Most Out of This Book
Read the book through, from start to finish. It only takes about two hours. Read all 50 tactics and flag the ones you believe you can use immediately and in what situations. (Or use the Notes pages in the back). For example: • Nickel and Diming (Tactic #43) – Use with copier vendor to reduce toner cost. • Commit the Offer to Paper! (Tactic #50) – Use with kids for household chores and driving privileges. Keep it handy. This book, as the title states, is a resource book. After you have familiarized yourself with the content, keep the book on your desk or shelf next to the dictionary, encyclopedia, and other reference books. Use the tactics! Practice makes perfect. Start with the ones you flagged or recorded in the Notes section. The next time you are about to enter a negotiation situation, refer to the notes you made, and try the tactic. It won’t cost you anything to prepare ahead, and the experience of trying it out will build your confidence. Everyone can negotiate, once they know the tactics and practice them. The first time you realize that using a tactic gave you a significant gain, you will be ready to try more of them. Develop your own style. The fifty tactics presented in this book are not intended to be recipes for success in any negotiation situation. Instead, they are general methods that should be adapted to fit one’s personal style or negotiation circumstance. As you use a tactic, record the results in the back of the book so you can recall how it worked the next time a similar situation comes up. Use the exercise forms in Section IV. They will help you think about how you can use these tactics. On the form, briefly describe the situation; list the parties involved (including the people who can make a decision); describe the issue to be negotiated; and finally, list the tactics that you believe might be especially helpful. Take the Quiz! Can this book help you? Circle yes or no next to each of the ten quiz questions on page 7. Score your answers: one point for each “no” on questions 1, 6, 7, and 10 and one point for each “yes” on questions 2, 3, 4, 5, 8, and 9. Total your points. If your total score is a 9 or 10, you are already a successful
But if you scored 8 or less. some will in retrospect even remember being the victim of one or two of them. 4 50 Practical Negotiation Tactics . or engage in an unproductive argument. with neighbors. This book is designed to give the reader an understanding of the negotiation process by presenting fifty proven. with family members. they pay the sticker price. • A child wants a new toy now. Unfortunately. Instead. practical tactics useful in real-life situations at work or at home. start reading! Most people come face-to-face with a negotiation situation of one type or another on a daily basis: on the job. such as these: • You receive the wrong order at a restaurant. accept what is given. at a flea market. • A co-worker asks for volunteers for a new project.negotiator! Pass this book on to someone else who needs it. Who. 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. Most readers will no doubt recognize some of these strategies. exactly. few people understand that normal interactions represent bargaining opportunities. are the negotiators most people deal with each week in their work and personal life? The list will be long: • • • • • • • • a neighbor a spouse a child other family members a supervisor a co-worker a salesperson a boyfriend/girlfriend • • • • • • a home builder a hotel clerk an electrician/plumber a lawyer a vendor/buyer a human resource director (who might make a job offer) • a manager Most people expect to have to negotiate when buying a car or purchasing a home. but many of us miss the opportunity to bargain in other situations.
What are my alternatives?” During an employee evaluation. Flexibility. Interdependency. There must be a conflict in the sense that what one wants is not what the other wants. one party is only allowed to follow policy or must wait “until the manager arrives. There are flexible elements to the situation. Two or more sides are involved. perhaps you can say to a hotel clerk. what can you do for me?” Or this to a restaurant manager: “This food order is wrong. A teenager wants to buy his/her first car. All of these situations are opportunities to negotiate. and I don’t have time to wait for another.” When you recognize that something can be negotiated. you must advise the other party of your intention to negotiate. or items of value. Mutual goals. some resolution must be negotiated. In some situations. Decision-making ability. time.• • • • • • • A hotel clerk tells you that your reservation was lost. 3. 2. “I’d like Introduction 5 . condition. 5. Your spouse wants to buy new furniture. Your boss reviews your past year’s performance. For example. Therefore. “Well. In some circumstances. and each side can involve one person or several people (each representing one “side” of the issue). such as price. The parties are interdependent: what one party does affects the other. The parties involved can make a decision by themselves. The parties involved are interested in reaching a common goal. since you lost my reservation. perhaps the employee can say. A service repair person gives you an estimate on some work. be prepared to bargain. Each one has the five key characteristics necessary for bargaining: 1. Multiple parties. 4. A neighbor wants to remove an old tree on your property line. that can be negotiated. A friend is about to select the movie he/she wants everyone else to see. Both sides want a settlement.
6 50 Practical Negotiation Tactics . and meet with you again. 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. but I believe it adds value to our house. the parties and their interests. the facts. negotiations can be concluded with a written or oral agreement. How can you compensate us for our loss?” Once you’ve suggested that you see the situation as something to be negotiated. 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. “I see why you want to cut down the tree. Choosing and applying the appropriate tactic to a particular situation will become easier as you begin to use them.” To a neighbor you can say. Keep this book handy when preparing for any type of negotiation. and the tactics that might move the negotiations along. the other party will realize that you intend to negotiate and do not accept the situation. and use the forms in the back to identify the issues. Scenarios based on actual real-life situations are used to show how each tactic can be used in business or everyday situations.time to look over this performance review and respond point-by-point.
Do you wish you could negotiate a change in your job duties or salary? 7. spouse. allowance. The last time you received sub-par service or food in a restaurant. do you believe that you negotiated the best possible deal? 4. but you did not? 8. When you purchased your last home or car. have you routinely resolved differences with a neighbor or a friend through a negotiated agreement? 5. Do you routinely negotiate for better accommodations when you check into a hotel? 3. Yes No Self-Assessment Quiz 1. When making a major purchase. In the past. did you request appropriate compensation? 6. Do you often refrain from negotiating a better price or service because you believe that you do not have good negotiating skills? Introduction 7 . etc. have you ever felt that you were not adequately prepared to negotiate a job offer? 2. have you ever required a written agreement covering chores. or division of household duties.? 10. or child. Have you ever found yourself in a negotiation situation in which your best alternative was to walk away. As a parent.How good are your negotiation skills? Place a check in the box that applies to you. In the past. do you routinely negotiate a last add-on before you close the deal? 9.
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etc. They’re referred to as “win-win” because each side can achieve their goal. if the situation involves a number of detailed or complicated issues or the stakes are relatively high. including those that are less obvious. Then classify each one into one of three categories: Compatible (Integrative or Win-Win) Issues: Those issues for which both parties might have the same desirable outcomes. decide how complicated the issue is. the process will probably take several weeks or months as the parties move through all the stages. the process will be fairly straightforward.SECTION II: THE NEGOTIATION PROCESS Before you begin the process of negotiation. one for another.) • primary sales territory • a starting date Exchange Issues: Those issues that might be traded. On the other hand. Examples: • a signing bonus (employee goal) traded for an annual travel budget (employer goal). • an allocation for moving expenses (employee goal) traded for a set number of travel days per month (employer goal). state. The “Quick Model” approach outlined below is good for simple negotiations. thus allowing each side to achieve one of their goals. If it is a relatively informal situation. Examples: • office location (city. The Quick Model The easiest way to prepare for a simple negotiation is to identify all the issues. The Negotiation Process 9 .
Examples: • an item sold by one party and bought by the other • wage increases won by one side. Depending on the situation and the parties involved. rearranged. stages can be combined. but feel free to try them when they seem most appropriate to your specific circumstance. What one side gains. or even skipped altogether. the other side loses. The Comprehensive Model Negotiation is more of an art than a science. 10 50 Practical Negotiation Tactics .Distributive (Win-Lose) Issues: Those issues that the parties are directly at odds with. The most typical stages are Preparing to Negotiate Planning a Strategy Exchanging Initial Offers Making Counteroffers (the Give and Take) Applying Pressure Making Progress Reaching Agreement The tactics are organized according to the stage at which they can be used to best advantage and listed as such in the Table of Contents at the front of the book.
The Negotiation Process Table 1: The Negotiation Process: Seven Basic Stages Stage 1 Identify situation as one for negotiation Preparation: Key Factors – Time. Power #1– #6 Stage 2 Strategy: Choose Overall Approach to the Process #7– #14 Stage 3 Initial Offer: Getting Started Stage 4 Counter Offer: The "Give & Take" Stage 5 Pressure Bargaining: Striving for Conclusion Stage 6 Key Methods: Achieving Progress Stage 7 Reaching Agreement: Settlement of Impasse Tactics to Consider #15– #21 #22– #31 Negotiation Phase #32– #38 #39– #46 #47– #50 Initiation Phase Resolution Phase 11 . Information.
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SECTION III: 50 TACTICS FOR SUCCESS
Stage 1: Preparing to Negotiate
n many negotiation situations, the parties have time to prepare for the actual bargaining. In other situations, such as when you’ve been served something at a restaurant that you did not order, there is no time to deliberate. You have to be prepared to instantly recognize that the situation can be negotiated, and begin to bargain. You can have time to prepare if you simply ask for it. For example, at the end of an employment interview for a management position, the candidate was surprised to receive a job offer on the spot. The candidate wanted the job, but wisely recognized that she could negotiate the contract. She said that she was very interested, but needed forty-eight hours to make up her mind. She used the time to talk to current employees, and developed a list of perks and conditions that she then negotiated, before accepting the position. To prepare for a negotiation, do as many of the following activities as you can: 1. Have realistic objectives. Identify everything that can be negotiated, and set realistic objectives for each item. If, for example, price is a factor, determine the desired outcome and set a minimum (or maximum) acceptable outcome, beyond which you will walk away and choose another alternative (see Tactic #1: Know Your BATNA). Also determine your opening offer in light of your desired and your minimum outcomes. It is often helpful to list each specific item to be negotiated and your minimum acceptable offer for it, as well as your desired goal and an acceptable opening offer (see Tactic #5: Listing Items). Thus, for each factor, write down and stick to three figures:
1. An opening offer. 2. The desired “best” offer. 3. A minimum (or maximum) “worst” offer. 2. Learn about your opponent. By whatever legal and ethical means possible, learn everything you can about your opponent. Talk with friends, neighbors, co-workers, past negotiation foes, even family members. If you are able to guess or find out about your opponent’s real objectives and/or limitations, you can gain an invaluable edge (see Tactic #2: Know Your Opponent’s Real Objectives). 3. Gather all the facts. During the heat of negotiations, presenting critical facts or objective criteria can turn the tide in your favor. You can usually anticipate and collect this critical information in advance during the preparation phase (see Tactic #4: Use Objective Criteria). 4. Set ground rules. In labor negotiations, the parties first agree to ground rules such as where, when, who, and how often the negotiation sessions will occur. Detailed ground rules are not needed in most everyday negotiation situations, but there are times when they help people come to agreement. Agreeing in advance on the location for discussions can give one side an advantage (see Tactic #3: Control the Setting), but in other situations, the critical ground rule will be about timing (see Tactic #6: Timing is Everything), forcing both sides to reach agreement faster. In negotiating with family members, friends, or neighbors, one well-advised ground rule is to stop the talks as soon as anyone raises his/her voice, curses, or makes a threatening comment.
50 Practical Negotiation Tactics
Tactic 1: Know Your BATNA
At what point will you walk away from the negotiation? You improve your position in any negotiation if you can walk in already knowing your BATNA—your best alternative to a negotiated agreement. The BATNA is the outcome you prefer over what the other party has proposed; if you define it at the outset, you are less likely to agree on something during an emotionally charged discussion and regret it afterward.
Harvey Huff bought a new 1956 Chevrolet from a local dealer. After forty years, he finally decided to sell the car he had loved and carefully maintained in original condition. Harvey did not need the money, but he intended to move three thousand miles away, to a condo in Arizona. The ad he placed in the local newspaper produced only one potential buyer: Patrick Knight. Harvey: Mr. Knight: Harvey: Mr. Knight: Harvey: Mr. Knight: Harvey: Mr. Knight: Harvey: Mr. Knight: Harvey: Well, now that you’ve checked it out, how do you like it? It’s in great condition, just as you described it. Any questions? Will you take less? No. It’s easily worth at least $20,000. That’s the price. $18,000, tops! No thanks. Okay. $20,000. I need it for a new restaurant. Restaurant? Yes. We cut off the top of the vehicle and people sit in it and get served their meals in our “oldies dream car!” Never mind, I’ll keep it. I haven’t maintained it for all these years just so you can destroy it.
The owners. but rather what the buyer planned to do with the car. providing them with a very good income for life.Conclusion Harvey’s best alternative—his BATNA—was simply to hold on to the car for the moment. and final offer. For the past two months. which the Jaggers believe will cause them to increase prices to the point where they will no longer be competitive with other West Coast firms. The $56 million dollar business took them 30 years to grow. selling became an attractive alternative to a strike or prolonged battle. When negotiations with the union became hopeless. The Jaggers gave the union their “last. The union negotiators convinced the employees that this too. and either move it with him to Arizona or find another classic car collector who might buy it (perhaps for less) and preserve it. Conclusion Selling their business was the Jaggers’ BATNA. 16 50 Practical Negotiation Tactics . 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. as a last resort. was a power play. the Jaggers decided to seek buyers for their land. notified all the employees of their intentions. and it now employs 230 craftsmen. as Harvey had for many years. his BATNA was not to hold out for more money. Example 2 Shari and Jim Jaggers own a successful West Coast pottery company. In this case. best. inventory. The threatened strike became a reality. The union negotiators thought the Jaggers were bluffing. The union is demanding wage and benefit increases. They learned that their assets would be easy to sell and were worth more than originally estimated. and equipment.” which was refused. labor contract negotiations between the Jaggers and a local labor union representing the pottery’s craftsmen have stalled. With only two weeks remaining before a threatened strike. and the Jaggers decided once and for all to sell their business assets and invest the proceeds conservatively.
it’s to your advantage to know what is behind a seller’s decision to put it on the market. Are you finally ready to sell it? Yes. for example. What changed your mind about getting rid of it? It is still in perfect condition. sure. John assured Tom that this would never happen. you still interested in my rifle? Of course. It is extremely rare—one of only 100 made with that bore and handle. If you are the party making the offer on the house. it’s still perfect. she might have to take a lower offer just to be able to move. Just as important is the why. This is a good thing to know. at some point. Make me an offer. Preparation 17 . How much are you thinking it’s worth? John: Well. Example 1 Tom had always admired John’s 1861 Confederate rifle. so Tom was surprised when John called him out of the blue one day with a proposal. what the other party’s desired outcome is. John: Tom: John: Tom: Tom. I’ll have to think about that.000. I guess I couldn’t take less than $20. right? John: Sure. and told John several times to let him know if he ever wanted to get rid of it. You have an advantage and are in a position to produce a better agreement if you understand what motivates your opponent and what “hidden” interests lie behind their position. A person who has to sell her home because her company is relocating her. because if the company does not provide relocation benefits. Gosh. might not be willing to lower her asking price because she knows that her company has agreed to buy the house if she can’t sell it. Just running out of space. Tom: $20.Tactic 2: Know Your Opponent’s Real Objective Each party in a negotiation will know. I think so.000? That’s more than I planned. I’ve been thinking of getting rid of it for a while. you know.
However. we really want to buy your company. One of them mentioned that someone who is negotiating with him to buy a restored Winchester rifle for $18. fearing that this will put all of his employees out of work.500 had an 1861 for sale. Without some trust. I’ve been thinking about your offer. John: Well. let me think about it and I’ll get back to you. but I could get the money to you right away. Well.Tom: Okay.500—we’d have a deal. it made the negotiations easier. let’s do it. Was Tom interested? Tom declined.) Tom: John. He is two years away from retiring and does not want his business to fail before he does. if you could come up a little—say $18. and we’re committed to keeping it open as a major division of our company. Tom now felt comfortable negotiating the price.000. the owner of a small manufacturing company. The sale price for the company has not yet been agreed to. Conclusion Tom entered into the negotiations suspicious of John’s motives. Example 2 Rick. Rick needs to remain president of the company for the next two years. Tom: Okay. we 18 50 Practical Negotiation Tactics . When Tom found out why John decided to sell his rifle. and now the two-year requirement has become a stumbling block in the negotiations. but thought this might explain John’s sudden interest in selling the rifle. but then he will be happy to retire. I don’t think I can go higher than $18. No longer worried about John’s motives. BigManu: Rick. He doesn’t want BigManu to know this because he thinks it will hurt his negotiating position. parties to a negotiation are not likely to reach agreement. so he is making it a condition of the sale that ALL current employees must be retained for a minimum of two years. has begun negotiations to sell his firm to BigManu Company. (Tom investigated the “market” for a restored 1861 Confederate rifle by calling a few other collectors.
let’s talk about the job guarantee you wanted. Without this commitment. BigManu’s negotiating team concluded that they were in the dark as to why this two-year requirement was so important to Rick. Working as a division of your company. Rick: I built this business from the ground up. I need to give them some sense of comfort if this deal goes through. BigManu: You know we want you to stay on and manage this division for us. they decided to put their price on the table and revisit the issue after a price was agreed upon. You’ll be in place to participate in our employment decisions.cannot guarantee to you that ALL of your employees will be retained for two years. and we think it’s an odd request anyway. Within the parameters of efficiency and effectiveness. The price they gave Rick was actually more than he had expected.) BigManu: Okay. Let’s talk later. Preparation 19 . I just want them to have a real chance to show you how good they are. they will make you plenty of money and more than make up for any “operational” difficulties it might cause you. We just can’t make good operational decisions with our hands tied. you will have a say in how the employees are treated. We still can’t find a way to do it. BigManu: We just don’t see a way to give you what you want on this. What is it you’re afraid is going to happen? Rick: I am convinced that with a two-year time frame. In hopes of pushing the deal forward. and he accepted it subject to agreement on the two-year employment guarantee clause. (Between negotiating sessions. and I hired every one of these people. I just can’t go through with this sale. I just don’t want it to change after I’m gone. Rick: These people are the best at what they do. my employees will prove to you that they are uniquely able to run this place.
Conclusion By masking his real objective (giving himself two more years as president before retiring). that might work. Rick: Well. would it? Rick: Well. 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.BigManu: We intend for you to stay and become a big part of our company. he agreed to allow BigManu to accommodate him without limiting their ability to make business decisions. I’m hoping to retire in two years. Once Rick realized that he no longer risked anything at the negotiating table by making his need known. Surely you’ll be able to “protect” your people if they are as good as you say. to tell you the truth. I certainly want to do all I can until then to protect my people. 20 50 Practical Negotiation Tactics . but we won’t be completely tied to operations as they are now. Let me get back to you. Rich almost lost the deal. This wouldn’t have anything to do with your own plans for the future.
Tactic 3: Control the Setting There is a logical reason why professional negotiators setting ground rules agree to conduct the talks at a neutral site. how can you trade the frog—he’s your best one! Dede: (Bailey’s other sister) Yeah. girls. Inexperienced negotiators fail to realize that the other side has an advantage if the meeting is held on their home turf: they are more comfortable. and so on. Cybil. Bailey: Cybil: Preparation 21 .) Let’s take all our Beanie Babies to my house to trade! Okay. (Think of the showroom tactics used by car dealers. but never to THEIR advantage! Example 1 (Two ten-year-old girls are talking. Make up your minds. such as a hotel conference room. they control the breaks and environmental factors. I like the frog. they have the information they need at their fingertips. Mother: Hush. I’ll give you my duck and frog for your whale and horse! Cybil: I already told you that I don’t really like that frog much! Jenny: (Bailey’s sister) What? Bailey. too. (thirty minutes later) Bailey: So. the frog is everybody’s favorite.) Prepare for the negotiations by controlling the setting—to your advantage or to mutual advantage. it’s a deal. and go play somewhere! Cybil: Well … Okay.
non-stop negotiations wore down the members of Team A. The chief negotiator for Team A publicly challenged Team B to “negotiate non-stop. Example 2 Two five-person negotiating teams had been trying to work out a deal for over a month. Team B. They had all been replaced after their decision to negotiate “around the clock” in Team B’s boardroom became known.Conclusion Bailey. That’s why she wanted to go to her house. Team A agreed to change the meeting place. About thirty-six hours later. and other conveniences in the adjoining room. although only ten years old. Team B had clearly used its home turf to gain a substantial advantage.” The chief negotiator for Team B agreed. while members of Team B were able to stay fresh. The physical and emotional demands of 24-hour. The firm deadline was only four days away. having set up beds. around the clock. Both sides desperately needed to settle a property dispute. Conclusion Team A did not realize the practical advantage they gave Team B when they agreed to negotiate in B’s boardroom. 22 50 Practical Negotiation Tactics . not one member of Team A was chosen to return to the table. until we have a settlement. Team A was whipped physically and emotionally. in their own familiar setting. When negotiations resumed in two months over another piece of property. After forty hours of negotiating. as long as they met in the boardroom of Team B. They were blamed for accepting the same deal that had been rejected only days earlier. knew that her sisters liked the frog best and that they would help convince Cybil of its “value” and help Bailey make the trade. Team A agreed to a settlement almost identical to the one rejected days before. was still going strong. meals.
Prepare for the negotiations by having an outside authority measure or weigh in on each side’s position. I would have charged anyone else much more. Things turned sour. and they were much lower than this. Let’s get the guys back in who gave you estimates. Believe me. It was twice as high as the estimates Larry received from other plumbers before they started the project. when Will presented Larry with his bill.Tactic 4: Use Objective Criteria Use objective criteria to judge the quality of each side’s proposals—you will probably improve your chances of coming away satisfied. these plumbers certainly acted like they understood the work when they gave me their estimates! Will: Tell you what. about your bill. and show them the actual work that got done. and he and Larry have always gotten along.” This can hold up an agreement and cost you in the end. I was kind of surprised at how high it was. Will is a licensed plumber. Larry: But Will. Larry: Just make sure you’re comparing apples to apples. but was shocked at the amount of the bill. I did get some estimates from plumbers. I gave you my “family” rate. based on objective criteria (think property appraisals in real estate). After all. Larry was thrilled. Example 1 When Larry’s cousin offered to help Larry finish the renovation on his bathroom. If you think that the other party knows more than you do. Will: Larry. If they tell us that they either Preparation 23 . though. Larry: Well. When we got into it. I anticipated much less work. This uncomfortable negotiation followed: Larry: Will. you are likely to resent them for it and hold out. it became clear that all of those pipes had to be pulled and new ones put in. rather than give them the “advantage. When you first told me about your project. Larry had expected to pay him for his time.
she had been investing the college’s endowment funds for many years. The college’s budget officer was understandably offended. and no one had ever questioned her performance. The estimates would have been higher than what cousin Will charged. He was disappointed in the performance of the fund. they would have had to revise the figures. Comparing the estimates to Will’s actual costs would have been counterproductive. Settling on the right objective criteria upon which to base a negotiation requires that both parties think through their options. I have been very diligent about making sure that the fund makes the most money it can without putting us at risk.disagree on the need for that work or that they would have done it for less. Budget Officer: I don’t know what your problem is. Larry: That sounds fair. I find your suggestion to the Board that I haven’t been doing my job right to be very insulting! Stuart: I’m sorry. Example 2 After Stuart was appointed to the college’s Board of Trustees. I’ll revise my bill to meet the lowest estimate you get. Had they actually prepared bids on the work. they said. they had to agree that their early estimates were low. I certainly didn’t mean to offend you. my first reaction was that some of the investments 24 50 Practical Negotiation Tactics . he used his financial expertise to analyze the investments of the college’s endowment fund. The chairman of the Board suggested that Stuart and the budget officer meet to discuss the investment policies and practices as they relate to the endowment funds. while she wasn’t an expert. Conclusion When the other plumbers looked at the work. From a look at the portfolio. because (as Will pointed out) it wasn’t an apples-to-apples comparison. and decided to bring the matter up at a Board meeting.
because she did not have the background in investments necessary to trust such advice. We just can’t make up losses to the endowment fund without considerable impact on our annual budget. considering commissions and all. In this situation. and its resources are limited. Budget Officer: Yes. Stuart: Yes. but I think they more than offset the gains. there might be increased risk and some expenses for commissions. I have a suggestion. Why don’t we ask two investment advisors who have some alumni ties to the college to do a mock investment of the endowment fund for a month or two? We won’t tell them about each other and they won’t actually do any real trades. At the end of two months. I find that a more aggressive investment strategy produces a better return. Now. Okay? Budget Officer: Okay.were stale. I don’t want you directing how they’re going to go. I don’t question that they were sound at one time. Stuart: No problem. but we can ask them to plan and cost out each move. but some of these stocks have really lost their value. how can we identify the right parties? Conclusion The two-month experiment did produce the results Stuart had anticipated. if both of them demonstrate a similar strategy and produce better results after expenses. Stuart realized that the budget officer needed very-specific “criteria” (such as the actual experience of investing the school’s endowment fund) rather than relying on an investor’s experience. but I want to be involved in the discussions with them about what we’re asking. Preparation 25 . and the budget officer was comfortable that the risk and expense of such a strategy was small and worth the effort. but such a strategy also increases risk and costs more money to administer. then you and I can talk about changing our investment strategy. the college is a private institution. As you know.
(2) a later curfew. Shari: Well. This strategy can build trust in the negotiation process itself. you should each put together a “package” of several items on the list and work out a win–win agreement for these things. Once you both agree on the list of things to be negotiated.Tactic 5: List All Items to Be Negotiated Break down the issues to be worked out into separate items ahead of time. Mother: That’s a large increase—and we just raised it last year! Shari: Well. Mother: But your allowance is based on what you earn in your weekly chores. besides washing the dishes every night and cleaning my room? Mother: You could cook dinners. your little sisters will want equal treatment. cut the grass. not just an allowance increase! There is: (1) a $10 increase. (3) more chores. if I give you an increase. Shari: I’m four years older than the next-oldest. It will cost me more than $10—about $35 per week. a sixteen-year-old who lives with her parents and three younger sisters. not on what you want to spend. what else can I do. and ask the other party to add to the list. You can’t treat me the same! Mother: Well—so we’re talking about several issues. baby-sit your sisters. I need more money for clothes and CDs. has asked her mother for a $10/week increase in her allowance. 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. and (4) different treatment from your sisters! 26 50 Practical Negotiation Tactics . Example 1 Shari. and for going out with my friends. wash the cars.
Now we have a package deal to propose … Preparation 27 . item #11 (the clothing allowance). Example 2 The union and management negotiating teams opened discussions with a list of 48 demands.Shari: Right! Mother: So … I suggest no allowance increase. you get to stay out an hour later that night. And if you clean the whole house on Saturday. Union: We will agree to your proposal on item #6 (the number of paid holidays) and item #14 (the new overtime hourly rate). opens by proposing the list of items. Management: (after calculating the total value of the five items during a break period) We agree to your package of five items. Shari got the $10 she wanted and a later curfew. was avoided. The union’s chief negotiator. I’ll pay you $10 to babysit every Wednesday night. Shari: (pause) I like it! Conclusion Shari’s mother helped negotiations along by listing all of the items being discussed. if you agree to our proposals on item #3 (the paid vacation schedule). Then a “win-win” solution could be determined. since all of their items were included as requested. Now it is time for each side to list their desired outcome for each item. in the first session. while the mother won a Saturday house-cleaning and a night out each week. while your Dad and I go out. The trading of items (where initial demands are discussed and agreed upon) begins. and item #23 (the wellness program voucher). Management agrees. but unlike your sisters. which the other children would have requested as well. An allowance increase.
the two sides will at this point sign and date the list of proposed items.Conclusion In most labor negotiations. thus removing them from the discussion table. 28 50 Practical Negotiation Tactics . Then negotiations can resume on the remaining 43 items. other trade-offs are proposed and agreed to until only a few items remain.
and general circumstances under which negotiations take place can substantially impact the outcome. and do your homework. day. Bob made it a point about once a month to go out of his way and drive by the man’s house. $12. Bob followed the man home. just out of curiosity. It was nice meeting you. Hi! What can I do for you? I’ve admired your ‘63 Impala for years.) Preparation 29 . I love this car—restored it myself.000? No. thanks. As the man got out of his car. my name is Bob Hillard. as he left the supermarket. The external pressures put on the parties involved (which might not be related to the issues under negotiation) can sometimes be used to advantage if you know about them. One day. Would you possibly be interested in selling it? No. Not even for. That’s a generous offer. One day. he saw an elderly man get in his dream car and drive away. the following conversation occurred: Bob: Car owner: Bob: Car owner: Bob: Car owner: Bob: Hello. Timing is everything! Example 1 Bob Hillard had been coveting a turquoise 1963 Chevrolet Impala Supersport convertible for several years.Tactic 6: Timing Is Everything The exact month. (For the next three years. I live a few blocks from here. say. on Briarwood Road. he noticed a FOR SALE sign in the yard. Prepare carefully. but money doesn’t mean anything to me at this point in my life … Well. which turned out to be only a few blocks from his own house. He stopped and knocked on the door. time of day.
Well. the timing of his second effort was perfect and it enabled him to negotiate for the car of his dreams. The board members had met twice before. Can I see it? Sure. I’m moving to California to live with my daughter. for tax reasons. so I guess I will be selling it.m. (after a careful inspection) It’s a very nice car! I’ll give you $12. if a seventh vote could not be found by the pro-agreement side. I can’t take it with me. Conclusion While Bob did not achieve his goal during his first negotiation effort. and I promise to take good care of it.m. Example 2 It was Sunday. Follow me. that’s a fair price. as a matter of fact. Then it’s a deal? Yes.000. had issued a deadline of December 31st. December 31st. and the vote was a 6-6 tie each time. Can you come back on Monday at 10:00 a. the proposal would die at midnight. resulted in another 6-6 30 50 Practical Negotiation Tactics . A majority was needed to pass the partnership agreement. 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. A third vote at 3:00 p. I’ll see you on Monday.Bob: Car owner: Bob: Car owner: Bob: Car owner: Bob: Car owner: Hello! I noticed your FOR SALE sign. beyond which the project would have to be abandoned. The partner organization. to seal the agreement at the courthouse? Sure. and wondered if your ‘63 Impala might also be for sale … (obviously not remembering Bob) Well.
The measure passed 6–5 at 5:45 p. When the meeting resumed at 4:00 p. A member of the pro-project group quickly called for a vote after the leader gave a signal. the pro-project leader told his members to filibuster until he gave a signal and called for another vote. Conclusion The leader of the pro-project group recognized that they might have a unique timing advantage. and the meeting was adjourned. For weeks. in the end.m. Both sides caucused: The leaders on each side met to negotiate a compromise.m. the leader of the pro-partnership side heard someone say that the meeting needed to end by 5:30 p. Then. Preparation 31 .deadlock. timing was everything.m. during an hour break in the meeting..m. as predicted. At 5:30 p. because one member of the anti-partnership side had to leave at that time to attend a church service he had not missed in 27 years. the project had been stalled by 6–6 votes.... a member of the anti-project group left the room. He planned for it accordingly. That effort failed. and it worked.
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as it can substantially alter the negotiations between two primary parties. if you want to begin in a friendly. Be sure you are aware of this at the beginning. In some cases. then Tactic #13: Set a Deadline or Tactic #11: Have an Expert Witness might be helpful. as well as their bargaining history and financial and political positions. and Tactic #48 (Walk Away). 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. cooperative manner. such as actively trying to keep one of the two parties from winning a contract or influencing a colleague or spouse to accept an offer for personal reasons. After you have evaluated these factors. 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 process. you must first evaluate your needs and those of your opponent. for example. but in practice it will likely influence the whole process. A favorite strategy of some successful negotiators is to start with an extremely low or high offer (Tactic #7: Decide How “High” is High) in the hope that the other T Planning a Strategy 33 . Tactic #12: Find Common Interests can be helpful. and Tactic #10: Make a Reciprocal Buy-Sell Offer) are also useful alternative strategies. uncaring approach (Tactic #9: Control Your Emotions. a third party can serve as a mediator (a legislative body. If you prefer to take a firm and direct approach. might step in and help settle negotiations between a union and administration negotiators. or one-time-only. For example. Third parties sometimes have their own hidden agendas. such as a third-party negotiator. Before you can do this. The overall strategy chosen does not limit the use of other tactics. Tactic #33 (Bluff).Stage 2: Planning a Strategy he next stage is critical: Choosing a strategy. decide whether the negotiations should be continuous. A neutral. such as Tactic #19 (Make a First and Best Offer). Identify all outside influences and hidden agendas before you develop your strategy. Some of the tactics listed in this book are only suitable for single-session negotiations. Tactic #43 (Nickel and Diming). such as a buyer and a seller or a city and its union.
let’s say a homebuyer new to an area is shown a house that was owned by someone who had been transferred to another country. By assuming opposing roles. His teenage sons had “trashed” the house. For example. and the buyer was able to completely renovate the house and still have a great deal. I offer half the asking price. Weeks later. The desperate owner agreed. Another strategy often employed by parents with their children (and investigators with suspects) can be easily used when one side has two negotiators (see Tactic #8: Use the Good Guy/Bad Guy Routine). The buyer said he wasn’t interested. 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). The buyer loved the location. but the inside was a complete turnoff. If there is a significant weakness in your position. the seller’s agent called the buyer about the property. The agent explained that the seller was desperate. two people on the team will be more successful because they evoke different emotions from the other side. “Please make any offer—they are motivated!” The buyer responded. 34 50 Practical Negotiation Tactics .side is either caught off-guard or (in some rare cases) a negotiator will be able to achieve an unexpected fantastic settlement. half-serious.” The agent took the offer to the seller. with “All right.
Buyer: We really like the house. Each time. Carol wants $160. but quite frankly. her real estate agent told her that they were probably not going to get a buyer because she is asking too much. with no success.000 is very high. six years ago you bought it for $60. It’s a good neighborhood. And I don’t see a lot of difference in the neighborhood. Carol: Maybe not.000. it is likely that your opponent will. First. Your demand should be high enough to give you room to compromise. The market hasn’t gone up that much in six years. and then look at the demand from your opponent’s perspective. After all. and just refuses to reduce it. However. one buyer shows some interest. Buyer: The air conditioning might have increased the value of the house. Surely there’s some flexibility in your asking price. Finally. Planning a Strategy 35 . If you consider the demand ridiculous. but the house has increased in value. Example 1 Carol has been unhappy with the house she and her husband bought six years ago. your request must not be so low that the other party concludes that you are not negotiating in good faith. so think this through well ahead of time. She has had it on and off the market for the last five years.000. we think $160. You are not likely to get more than you request. We also think that the neighborhood has improved over the last few years. Anyone buying the house would want to change wall colors or add new carpets.000. but we simply can’t take less than $160. as well. but not so high as to end the negotiations before they begin. but the redecorating is of little value.Tactic 7: Decide How “High” Is High Your first demand in the negotiation process is the most important decision you will make. so do not underestimate what you might be able to achieve. we’ve put a considerable amount of money into a new air-conditioning system and in redecorating. Carol: We really want to sell. Be realistic. but certainly not exceptional in any way.
The firm now had over twenty-five law partners who owned the firm and continued to benefit from the reputation and name recognition of Bits & Bites. Buyer: Good luck!! Conclusion The buyer expected Carol to counter the $100.000.Buyer: What if we offered you $100. In any event. the transaction also included some degree of consolidation of the law firms involved—not just the use of the firm’s name. and then $10. 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. though. the founders of the firm. the buyer took it as a signal that either Carol didn’t want to sell. The partners are interested in selling the name.000 immediately. Example 2 The law firm of Bits & Bites was a Sioux City institution. or she has unreal expectations. Carol drove off a potential buyer by setting an asking price that was just too high. enjoying a statewide reputation for quality representation.000 or 1% of profits (whichever is less) over the next ten years in order to use the name. but they have no idea what the value of their firm’s name might be in this nearby city. The other law firm was prepared to pay $100.000? Carol: We really can’t take less than $160. We’re curious.000 offer by coming down in price at least a little. Inquiries to other law firms were not very helpful because in almost all of the instances. were still alive. Neither Edward Bits nor Edmund Bites. as to how you think the name is going to benefit you. we are certainly interested in your request to “buy” our firm name to use in your city. Here’s how the initial negotiations went: Partners: Well. When Carol refused to budge. 36 50 Practical Negotiation Tactics .
New law firm: We are establishing a partnership of ten lawyers—the top two moneymaking attorneys in each of five local firms. and then 10% of your profits each year for as long as you use the name. If at any time we feel that you have “harmed” our name. I’m kind of embarrassed now. starting with the ten partners you describe. that’s just our initial figure. Let’s just pretend this didn’t happen. I guess this is just not something we’ll be able to pursue. that you anticipate to build a very profitable law firm. then. (surprised) Well. We should assume. And we.000 initially. Partners: New law firm: Partners: New law firm: Partners: New law firm: Partners: New law firm: Planning a Strategy 37 . of course. because you are in the state capital and your firm has handled a lot of high-profile political cases. Yes. it would be impossible to create a new name out of the names of our key partners. In every instance. you have a very solid reputation there. To offer it now would be an insult. because we were not even close to that number. but we get to keep all of the money we’ve received up to that point. We probably won’t be insulted. Give us some range. I really don’t feel comfortable doing that now. Using the Bits & Bites name can only enhance our profitability. And even though you don’t have an office in our city. we do. Thanks so much for meeting with me. we want $500. Well. (concerned about loosing the opportunity) Wait. one of these two attorneys carries the surname of the firm they are leaving. we reserve the right to withdraw our permission. that is a very high number. What number were you thinking about? Well. We weren’t really thinking about that amount of money. So. expect to pay for that.
because there was no “objective” criteria available to help them set a reasonable price. 38 50 Practical Negotiation Tactics . It immediately dropped the idea. Either side could have asked for too much. In this situation. Both parties were probably at a disadvantage. The price they were willing to pay would have indicated what the naming rights were worth. rather than negotiate.Conclusion Bits & Bites lost an opportunity here because their initial demand was so unrealistic with what the prospective firm thought the “naming rights” should cost. since they had initiated the contact. Bits and Bites should have let the prospective firm make the first offer.
while another acts difficult. Half what it cost us new. what’s your price? Andy: $1. Andy: No. not for $1. I want to keep those. Peggy: Planning a Strategy 39 . They cost about $300. Peggy: That’s fair.200. Your opponents will want to avoid confrontation and unpleasantness with the “bad guy” and are likely to be more willing to cooperate with you. I heard that you want to sell your riding mower. and I know how you take care of things. Peggy: I’m hearing one thing from Paula and another from Andy. One member of your team acts friendly to people on the other side (the good guy) in order to gain their trust and support. threatening. Peggy. so I’ll take it. And take the leaf-catcher attachment and the gas can. Peggy: I assumed they went with the mower.200! We should get $1. Andy and Paula. Andy: No. etc. you’re really moving! I hate to see you leave. only three years ago. I’ll go home and you can call me if you two can reach an agreement. Paula: Go ahead and ride it home. since they are sitting out in the driveway with it. angry. Peggy: So. Example 1 So. I can use them.Tactic 8: The Good Guy/Bad Guy Routine The “good guy/bad guy” routine is a useful one. (bad guy) and implies that his or her side will hold firm on their demands.400 if the catcher and can are included. we won’t need it at the new condo. Andy and Paula: Yes. Andy: I want them… Paula: Go ahead and take them. I don’t know what the deal is now.
perhaps even unintentionally. And cut the training hours from 55 to 20. Miguel: I’ve figured $4. You are located outside our primary service area. firm offer if they decided to continue negotiations. Sandy: What? First of all. the quality of the technicians’ work. She realized that it put her in an impossible negotiating position.000 per month is one of the highest in town. Sandy. Example 2 Sandy (business owner): Miguel and Liz (representatives of a computer firm).000 in service calls last year alone because your damn people don’t take care of the equipment. causing our reps to spend hours on the road. She very wisely recognized the routine and forced Andy and Paula to give her a clear. For the past three years. your account has taken too much time. And we want to change the 24-hour service response time to 48 hours. your rate of $3. Liz: But we still want to renew your contract.Conclusion Peggy thought she was getting the old “good guy/bad guy” routine.200 will be about right… Sandy: I can’t begin to pay that! Liz: Calm down. Miguel: Well. Sandy. and your training programs. Miguel: But not at this ridiculous rate. 40 50 Practical Negotiation Tactics . we’re here to negotiate a new service agreement. We estimated that it has cost us more than $50. we’ve been fairly happy with your responsiveness. And we need to add a clause that holds your company responsible for machine damages. Let’s talk.
I hope you can meet my terms. Miguel! We’ve worked out a deal I think you can live with. I want to keep you as a customer. Sandy. (Three hours later) I’m back. Any luck. but Miguel’s right.Miguel: Sandy: Liz: Sandy: Liz: Miguel: Liz: No. I’ll explain on the way back to the office. Sandy. these terms will put me out of business—I’m a small 20-person operation.m. Sandy believed that she was able to avoid a terrible deal and negotiate a fairly good one. I’m going on to lunch. I’m afraid our relationship is over. with a position he knew was unreasonable. and it’s not efficient enough anymore for us to handle smaller firms—especially those outside our region. Then he left so Liz could convince Sandy that they needed to quietly reach an agreement she could “sell” to Miguel later. What can I do? Let’s try to negotiate something reasonable before Miguel gets back. Planning a Strategy 41 . Liz. Sandy. even though it was far above the previous contract. Our customer base has grown. If not. I’ll stop back about 2:00 p. Conclusion Miguel and Liz used the good guy/bad guy tactic in the classic form: Miguel scared and threatened their opponent. you two? Good news.
The fault was partly his because he did not stay on top of changes. I noticed this. 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. I have a problem with my recent bill and my billing rate. such as deals on computer packages and phone services. Here’s how the phone conversation went: Customer representative: Mike: Over-the-Air Long Distance. 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.00 a minute. and might even harden your opponent into an unfavorable position (for you or for both of you). This will put you at a distinct disadvantage from this point on. because we have had a sick relative out of town and we used long distance a lot this past month. How may I help you? Hello.10 a minute rate at my office location. He decided that the best approach was to act indignant when he spoke to the company representative. 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. but I recently was sold a $.Tactic 9: Control Your Emotions Stay cool. 42 50 Practical Negotiation Tactics . he was very unhappy. Control your emotions and use them to your advantage! Example 1 Mike prided himself on being an informed and educated consumer. He had. made some very good purchase decisions for his small business. It seems that the rate you are charging me on my home phone is $1. in fact.
(beginning to sound irritated. I would think you would have given me the best rate you offer new customers. Had you brought this to our attention before. But as a very good customer of yours. to begin now. although he wasn’t really angry) Are you suggesting that it was my responsibility to advise you when one of your “offers” was available to lower my rates? How would such information even come to my attention? More importantly. Mike. It hasn’t been increased at any time. I see that the rate you are being charged is the rate we offer for the type of service you have with us. how would anyone who might only have residential service even know to ask? Well. The company might have had any number of different introductory rates and incentives for people to buy our service over the course of eight years. Customer representative: Let me pull up your account. I would have known I was paying too much.10 per minute rate on your long-distance service. of course it is not always possible to give existing customers some of the “offers” we have out. But I am able to offer you a $. and I also realize that if I had examined my bill closely. but this was quite a shock. I realize that that might be the rate I started paying when I first took your service over eight years ago. Mike: Customer representative: Mike: Customer representative: Planning a Strategy 43 . we certainly would have discussed your options. Well.I expected the bill to be higher than usual.
The best we can do is fix the rate for the future. 44 50 Practical Negotiation Tactics . In doing so. either. I am. and I want to speak to someone in authority so I can terminate my service. Wait—I’ll get my supervisor.10 per minute. The latter would not have produced the desired results. Mike’s willingness to show a measured “flare of temper” brought results. He was walking a thin line. (with a much angrier tone) Madam. If you can’t get me someone to talk to. a long-time customer of your company. Is your supervisor there? I’m certain that he cannot adjust your account retroactively. which should rightly be $50. controlled voice) I need to talk to someone who can do it immediately. she kept Mike as a residential customer as well as a business customer. there’s no reason for this conversation to continue. I would hope that you would credit my account for this better rate for past service. strategic anger and abusive behavior. We certainly don’t want to lose you as a customer. but I am very angry with Over-the-Air Company. Customer representative: Mike: Customer representative: Mike: Customer representative: Conclusion The supervisor waived the long-distance charges for the $500 bill and adjusted Mike’s rate to $. and I should be treated with more respect! I’m sorry. don’t think this is directed at you personally. I … (interrupting and in a stern. between controlled. however.Mike: I would imagine so. after all. but I can’t do that. But I’m looking at a $500 longdistance bill.
Employees’ negotiator: (with a stern voice) You have been saying this for three weeks. Owner: I’m just not willing to let my best people refuse to work the extra shifts during our busy season. Owner: Now. Negotiator: (now beginning to get irate) You talk about the risk to your plant if the less-experienced workers are there on overtime shifts without the senior employees. and that they should be asking for a fairer base wage for the work they do for you.Example 2 The contract negotiations between the employees of a fireworks plant and its owner had been stalled for about three weeks over the issue of mandatory overtime. Just admit that what you really don’t want is for your best employees to realize how much of their pay is from the overtime they work. and it’s getting old. The owner was afraid that if the mostsenior employees routinely passed up the overtime and the overtime pay. The employees’ negotiator finally decided to use “indignation” to break the stalemate. The owner told the employees that he was worried that during the overtime shifts. that’s just not fair. lesssenior employees might be at greater risk of injury because they have to handle explosives. I’ve got to have the employees with the most experience to protect this place. Where are your managers? Where is the training necessary to make Planning a Strategy 45 . They will be putting the plant AND their fellow workers at risk by not being here. they would become dissatisfied with their pay and want their base pay increased. and it’s not what we’re even talking about. On those overtime shifts. The most-senior employees want to have the right to refuse overtime and have those less-senior employees take the overtime. Working with fireworks is working with explosives. and you just can’t be too careful.
Then you can’t have it both ways. Had the owner let him leave. Sit down. or they’re not. In practice. either the employees are properly trained. don’t be so hasty. The end result was that the most-senior employees did win the right to refuse overtime. though. Either they are properly protected. Until you’re ready to talk about that. or they’re not. What if we were to agree that the senior employees could refuse half of the overtime offered to them. After the employees’ negotiator threatened to walk out. the negotiator would have had to find a way back into the negotiations without losing ground.Owner: Negotiator: Owner: Negotiator: Owner: sure these employees can protect themselves? Are you telling me that your employees are being put in dangerous conditions without adequate training and safeguards? No. The safety of the plant demands it! (standing up to leave) This is just ridiculous. No one who takes a job with us can be unaware of that. he became more reasonable. But we protect our people. (He begins to walk out. The negotiator was also running a risk with his flare of temper. I’m not coming back. That’s all. But the fireworks business is a business that involves risk. but not all? Conclusion The owner was on shaky ground with this one. most of them continued to take all the overtime they could get. 46 50 Practical Negotiation Tactics .) Now. You are not addressing the real issue for you: money. not at all. sit down. All I’m saying is that the most-senior employees have to be on the overtime shifts. now.
The second party then decides to either buy it at that price and pay the first party. the executor of the estate. I’ll give you 48 hours to decide the price. and split the proceeds. with the highest bidder paying the amount to the other side in compensation for their loss. Susan. you’re the oldest.Tactic 10: The Reciprocal Buy-Sell Offer What do you do when both sides seek to own something when there is only one and it can’t be divided equally? You have three options: 1) Both parties can “bid” to own it. Mike: Mary Anne. since this one is in perfect shape and it was Mother’s. 2) They can flip a coin. so you set a price at which you agree to buy or sell the coffee grinder. (two days later) Mary Anne: Well. my kids and I looked on eBay and everywhere else and found out that coffee grinders in perfect condition sell for about $500.” is the recommendation of Howard Raiffa. A fourth option. 3) They can agree to sell the object to a third party. Mike. The first party decides on a price for which he or she will either buy or sell the object to the second party. Both sisters covet it. or sell it to the first party and consequently receive the full amount from the first party—thus giving up the object. All the rest of the estate has been divided among the family. has decided to use the “reciprocal buy/sell offer” process to settle this last piece of the estate. called the “Reciprocal Buy-Sell Offer. a well-known negotiations professor from Harvard University. The following examples explain how it works: Example 1 Susan and Mary Anne learned from their brother Mike that their recently departed parents’ estate included a somewhat valuable antique coffee grinder. I’m willing to pay or let it go for $800. However. Planning a Strategy 47 . 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). with winner taking all.
I choose to buy it. Here is my check for $800. 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. Example 2 Howard Raiffa described a consulting situation in which he used the “reciprocal buy-sell offer” process in his book. 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 sisters felt that the process enabled them to resolve the issue fairly. Lectures on Negotiation Analysis. Thanks for making this last step as easy as possible.Susan: Mike: Well. I’ll pick it up tonight. and then decide how much more “emotional value” it held. (sixty days later) 48 50 Practical Negotiation Tactics . They thus were able to determine the highest price each was willing to pay for it or receive for it.” Howard: Since in this case you are talking about a multi-million-dollar business. in writing. They accepted his suggestion to use the “reciprocal buy-sell strategy. to submit a sealed offer to buy/sell the business sixty days from today. Both came to Raiffa to help negotiate a settlement. which will bind us to the outcome. Conclusion The “reciprocal buy-sell offer” process caused both Mary Anne and Susan to research the market value of the coffee grinder. Agreed? Abe and Bobby: Sounds good! Let’s draft and sign a written agreement detailing the process. Two business partners had been working together for ten years to build a successful business. You will both agree. I suggest a slight modification to the process.
you agree to sell your half-interest to Bobby for $180 million. Agreed. Conclusion Both parties wanted to keep the business. and to close within ninety days. Bobby was willing to pay more than Abe to remain sole owner. Bobby. and we close by July 1st. I will arrange to sell him my half-interest for $180 million. your bid is $170 million. Abe. but only if they could become the sole owner. your bid is $190 million. and both men had carefully estimated the market value of half the business. The partner who was out-bid in a fair process received a fair settlement: $10 million above what he was willing to pay. Planning a Strategy 49 . And I will arrange financing to pay you $180 million to become sole owner. The reciprocal buy-sell tactic enabled one of them to achieve his goal of sole ownership and allowed the other to feel that he had an opportunity to purchase sole ownership.Howard: Abe: Bobby: Abe.
and forcing him or her to control the discussion of the issue. Conclusion The husband became the “expert” in this situation by doing the homework. It can also work in reverse: establishing the other person as the expert. and created a spreadsheet to compare the five best-rated couches on their list. so when the husband wants them to make an 50 50 Practical Negotiation Tactics . 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. he decided upon a strategy: First establish himself as the “dimension expert. They both expressed an interest in finding a couch that offered the most “interior” space. The husband found the dimensions of the couches in the brochures and Web sites. This strategy worked. Looking at these statistics. They knew that sitting on dozens of couches in a single day would be confusing and would make it difficult to determine which one is the most comfortable and roomy. and the husband felt like he saved them hundreds of dollars. This approach can also be reversed: The wife in this situation is a banker.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. Example 1 A young couple were discussing a possible purchase of new furniture for their living room. Based on seating capacity.” and then argue for the frugal alternative. He thus ended up having greater negotiating power. she glanced at it and immediately deferred to his opinion. The wife was determined to buy the least-expensive brand rated excellent by consumer publications. When he showed his wife the detailed spreadsheet.” but there were substantial differences in price—differences that the wife did not see as a problem. The couple decided to limit their selection to those rated “excellent.
Many bargainers on the other side will not know their HMOs from their PPOs or their POSs and are likely to leave important details up to “the expert” to decide—just as the negotiator planned! After explaining in some detail what each of these three types of insurance plans are. and should therefore handle the problem. and Point of Service (POS) plans. he argues that she is the expert. Preferred Provider Organizations (PPOs).investment decision or deal with an error in a bill. He claims to lack the knowledge or insight to do the work—which he is then able to avoid! Example 2 A negotiator can often gain a valuable advantage on issues such as medical insurance or labor contracts by doing the homework and becoming an “expert. a negotiator in a similar situation was able to get the other side to agree to include a plan that they had opposed only days before! Planning a Strategy 51 .” If you spend many hours learning about Health Maintenance Organizations (HMOs). you gain an edge when negotiating a new plan for your company.
because I am so conscientious about my paper route. The two boys fought over the last piece of everything. That simply rewards your continual squabbling. you both want to complete negotiations by a certain date. When they boys returned. They immediately began to fight over it. This is done by deciding at the outset what you both have in common: You both want to reach an agreement. The boys quickly huddled. This time. Unless you can convince me otherwise. I wouldn’t care so much. Be clear on what you have in common at the start. and then asked their mom for a chance to negotiate with each other. here’s what they said to her: I think I should be rewarded with the piece of cake. Russ: 52 50 Practical Negotiation Tactics . neither of you want to be embarrassed at the outcome. Usually. and neither boy was very happy. I also took out the garbage last week without being asked twice. If this was chocolate icing. and their mother was tired of it. point them out at the very beginning of negotiations and refer to them throughout the process.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. Example 1 When Russ and Bill got home from school. 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. she made them share whatever it was. like we usually have. and so on. you want to reach an agreement that is favorable to an outside party. Mom: I’ve decided that I’m not going to cut this piece of cake in half and give you both some. she decided to try something different. they saw that there was one piece of cake left over from their mom’s bridge party. These positive things are part of your goals and objectives. particularly when things seem to be at a standstill. the last piece of cake will get thrown away.
and her children were in school. It was the type of shop the nearby residents preferred. your new shop hours have caused your customers to park in our parking spaces.m. That sounds like a wonderful solution. The last cake we had was chocolate cake. because there is no parking along the street during morning and evening rush hours. she opens her shop at 7:30 a. Now that her children are in college. and keeps it open longer so she can attract customers on their way to and from work.m. Customers have started to park in nearby apartment lots. and that’s not my favorite either. We realized that if we cut the cake lengthwise. We really want you to go back to your original times.Bill: Russ: Mother: I think I should be rewarded because I cleared the table for Russ the other night when he had to get to baseball practice. I got an “A” on my book report that I really had to work hard on and when you got home from the store last week. This cake is white cake. I helped with the bags without being asked twice. 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. Planning a Strategy 53 . to 3:00 p. so these hours worked out well. One day. Residents: Marilyn. she got a visit from some of the residents. and better than a fast-food restaurant with late-night hours and a drive-through window. Example 2 Marilyn’s Memorabilia Store was located along the main commercial street of a residential neighborhood. so that your customers can park on the street. and I really like white cake.m. I can have the part with the icing and Bill can have the part with the cake and filling. Marilyn originally set her shop’s hours for 10:00 a.
The parking lot used for apartment residents is probably full from 7:30– 9. and the residents needed Marilyn’s shop. Marilyn: Conclusion Marilyn needed the extra parking. and I close at 4:00 p. The shared parking arrangement did work out for Marilyn.m. So. 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. I have to convince them to come before work. my customers can’t park on the street. if residents haven’t left for work yet. But I really am increasing my sales by being open longer hours.? Residents: We certainly want you to stay in business here. But in order to keep my new customers. 54 50 Practical Negotiation Tactics . and 6:00 p. 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. Between 7:30 a. and usually the car is gone by the time a tow truck shows up anyway. and between 4:00 p. If you need to have the shop open more hours.m.00 a. and is probably empty in the afternoon if they haven’t gotten home yet. or so anyway.m. We think they’ll be agreeable to the morning parking. Do you? Marilyn: No. rather than after work. Lets try it. It is very costly to have cars towed.m. I really need that extra income to stay in business.. let’s see what the options are. if I go ahead and open the shop at 7:30 a.m. and see if it works. and 9:00 a.m. then we’ll try and accommodate you. And we don’t think you want your customers’ cars towed. Okay.I’m sorry this is happening.. and 9:00 a.. the off-street lots probably won’t be used by my customers. Most of our residents are gone by 8:00 a. we have to be willing to tow the cars that violate it.m. Identifying their shared interests caused the nearby residents and the customers to reach agreement.m.m.m. I don’t think that would be very good for business.
A deadline can help you make the best possible agreement in the shortest amount of time. how should we go about dividing up the furniture and possessions? I can’t talk about it. etc.Tactic 13: Set a Deadline Be sure you know well ahead of time what the deadline is for completion of negotiations. Then we can sit down at this table at 3:00 p. the first. one at a time: the youngest. A few hours? I can’t—I’ve got to leave shortly for the drive home. let’s all take two hours to look around and make a list of things we might want. Deadlines can also be set by both parties to a negotiation when they want to put some pressure on themselves to come to agreement as quickly as possible. We just don’t have the time … We’ve got to do this—the house is sold! Okay. and start choosing things. Deadlines can be imposed externally (such as the government’s deadline to get a tax break) or internally (set by one side. Well. Jenny: Everett: Sue: Everett: Mary: Sue: Everett: Mary: Jenny: Everett: Okay. But at Planning a Strategy 55 . Well. we can each take turns selecting things … Like each tool or dish. Example 1 Four adult children have gathered at the home of their recently deceased mother. such as a deadline beyond which the union will strike or the date that an outside party has set to withdraw an offer that is in both your interests). How can I do that? You all live in this town and you know this house. I don’t. but it can also work against you if you set one that is unrealistic or you fail to plan for it adequately. let’s all take a few hours to look around.m. That will take days! I haven’t been in this house for twelve years.
your attorneys know the tax laws. Conclusion The mutually agreed-to process and self-imposed deadline was a fair method of negotiating—a lot better than the four of them arguing over their mother’s possessions. and I appreciate your interest in the historic structure. we cannot agree to these development plans submitted by your company until we have reviewed how they will affect the historic buildings. Agreed. Sue. And besides. Okay. if we are not finished. this is December 29. However. Allan: Let me confer with the city attorneys. being the oldest. we all leave. December 31. can sell or give away what is left.m. then the whole deal is lost because my company will lose $10 million in tax benefits under a federal law that expires on midnight. 56 50 Practical Negotiation Tactics . All of us must come back before Saturday to take what is ours—agreed? Okay. Example 2 Allan: As the negotiating team for the city.. Allan: What! Why did you not tell us this before? David: We never thought you would take three months to get to this point.Sue: Mary: Jenny: 5:00 p. if I cannot carry a negotiated and signed deal to my board by noon on December 31. David: I understand your concern.
we can’t get the reports we wanted in 48 hours. Conclusion Knowing the external deadline gave David a significant negotiating edge.) I understand the December 31 deadline. Planning a Strategy 57 . Let’s continue. and I don’t like it. He waited to bring it up until it was clear that doing so would help him get the settlement his side desired.Allan: (One hour later. Obviously.
first-quarter grades are coming out at the end of the week. and this usually means having all the right information. Unfortunately. and you can neutralize its effect on the negotiations. so he was able to prevail upon her to let him continue. Mom: What’s that? Jason: A few weeks ago I lost my workbook. Have a clear goal in mind AND all the information you need to make your points. I’ll give you money for it. as well as those of the other side. but I have a problem in my Spanish class. before your opponent tries to catch you off-guard. Control the use of the information. Then the teacher went back to the first one. 58 50 Practical Negotiation Tactics . but that was actually a different workbook. but his grades are good. as well as strengths. and one of the ways to do that is to reveal a weakness at the beginning. don’t get mad. I’ll need to buy it again. but remember that both sides have weaknesses. Mom: I gave you money to buy a workbook a few weeks ago. Example 1 Jason likes to play video games as soon as he gets home from school and do his homework later. We had one at the beginning of the semester that we were using pretty often. Did you buy it? Jason: Yes.Tactic 14: Don’t Always Hide Your Weaknesses Be sure you know what your strengths and weaknesses are. while watching TV. Jason: Mom. There will be times during a negotiation when you will want to catch your opponent off-guard. The objective is to negotiate from a position of strength. and we used it a couple of times. and Jason knows he is getting a D in Spanish. One day mine disappeared. But don’t lose it again. His mother disapproves of his study habits. Mom: All right. we need to talk. He knows that a D will mean that he will have to change the way he studies. I bought the second one. He decided to preempt the discussion in order to make the best deal. and I missed some assignments. Now.
Its owners found out that at least three other buyers had been in contact with Jane. she trusted it more. I think I can do that. so there’s no reason to think I need to change my study habits. The location was ideal for a convenience store or a fast-food restaurant. but all three deals Planning a Strategy 59 . I’m sorry. I’ll give you more time. It’s because I didn’t have the book. Jason’s decision to warn his Mom ahead of time rather than have her see the D on his report card gave him an advantage in the negotiations about study time. and the D is directly related to my losing the book. I’m getting a D in Spanish for the first quarter—but it’s not because I’m studying in front of the TV. English. Mom: Well. all right. And I know I have to be better about getting in all of my assignments. And those are hard classes—Algebra. and since he offered her the information up front.Jason: Another thing. B. I don’t think you’re taking your schoolwork seriously enough. Example 2 Jane once owned a piece of property she wanted very much to sell. I think you need to give me the rest of the semester before making me change the way I do my schoolwork. Thanks. Mom. Jason: Spanish is just one class. Mom: Well. he was able to continue to study the way he wanted to. If I don’t pull the D up to a C or better. Conclusion All of Jason’s grades did improve over the next quarter. All of my other classes are A. my study habits are okay. Although his Spanish grade was only a C+. Since I missed some assignments. But that Spanish grade needs to come up to a B!! Jason: Okay. His explanation made sense. but I think you do need to change your study habits. Pizza Boy was interested and had even made inquiries about the property. Environmental Science. or borderline B.(maybe C+). Obviously. then I’ll agree to make changes. The work I did turn in was fine.
there were no unpleasant surprises to stop the deal. I’m very happy you’re interested in my property. Pizza Boy: We’ve checked the property out. Pizza Boy: Well. Jane: Oh. she will want you to think it’s the whole neighborhood. Actually. Jane’s up-front disclosure of a potential problem allowed Pizza Boy to weigh the negatives with the positives. Furthermore. When the neighbor heard about the new buyer. and was able to politely ignore her. since they were well aware of the negatives. I think you’ll find that this is only one person. When she contacts you. was that Jane’s neighbor had contacted each of the previous potential buyers and complained about their plans to use the property. the other interested buyers already have businesses in the neighborhood. Pizza Boy: Well. really. we’re not interested in neighborhood fights. This is how the negotiations went: Jane: Pizza Boy. let’s assume that you are right. however. I know. I’ve got to warn you—you might hear that there is neighborhood resistance to your putting in a pizza restaurant. A tentative deal was signed. The neighbor’s attitude suggested that there would be major resistance in the neighborhood if Pizza Boy tried to put in a commercial establishment. however. it’s only the neighbor to the right of the property who has a problem. she started her campaign to keep them from closing the deal. The Pizza Boy people figured that Jane’s asking price must be too high or that she is unwilling to negotiate. either.had fallen through. The real problem. which was way below the price they were actually willing to pay. 60 50 Practical Negotiation Tactics . Pizza Boy was prepared for her call. You are a big enough corporation to withstand her objections. What are you asking for the property? Conclusion Jane told them her asking price. though. What are her grounds for complaining? Jane: She doesn’t have any. I’m sure. They decided not to fight a disgruntled neighbor. But unlike your company. and it’s zoned for commercial use.
500) M $21.Stage 3: Exchanging Initial Offers any offers and counteroffers are made during a typical negotiation—sometimes even hundreds.000) Settlement Range ($22.500) Fig. None is as important as the first one. such as proposing to continue at the current rate or price. Another common strategy is to start with the status quo. Experienced negotiators often view negotiations as a process in which the goals of one party are in direct conflict with the goals of the other party. The initial offers of both parties are usually set reasonably above or below what each believes to be the settlement range.500) Resistance Point ($25.000 Buyer Initial Offer ($21. in negotiating a labor agreement or the price of goods or services: The monetary gain realized by one party is also the monetary loss of the other party. (2004).000 22 23 24 25 26 27 Initial Offer $28.000) Target Point ($23.750) Target Point ($24. by Michael R. This is a practical starting point that will not anger the other side (and might even be expected). Adapted from Labor Relations and Collective Bargaining. Perhaps the worst-case scenario with initial offers is when a negotiator has his or her initial offer immediately accepted and ends up feeling that he or she could have negotiated a better settlement if the initial offer had been lower or higher—the so-called winner’s curse. quick agreement. The negotiator firmly states that it is their best offer in an attempt to gain a nice. for example. Carrell and Christina Heavrin. “Distributive” bargaining (“win-lose” or “zero sum”) is used. Many negotiators make their initial offer the highest acceptable offer (Tactic #19: Make a First and Best Offer). The initial offer sets the tone of the negotiations and reveals something about the strategy of each side. 190–192.750–$25. 2: Distributive Bargaining Process. as illustrated in the following figure: Seller Resistance Point ($22. Exchanging Initial Offers 61 .
the seller would immediately accept it because it is greater than the target point and the buyer would suffer a winner’s curse.In this example.000) is reasonable.000 and $28. 62 50 Practical Negotiation Tactics . The settlement range is the distance between the resistance points. include others that are actually of no value to you in your initial offer (Tactic #16: Use Throwaway Items) to hide the true items of interest and show that you are willing to give in on some items. yet is positioned well above or below what the party believes to be the opponent’s resistance point (thus avoiding the so-called winner’s curse).” but the settlement price. the process quickly narrows to the range between the initial offers.000. The most common method of negotiating more than one issue or item is to combine two or more in a deal that gives each side something (Tactic #17: Package Items). usually. See Tactic #18: Agree on Something As Soon As You Can. it is termed the settlement point – not the “right price” or “fair price. if the buyer’s initial offer was $25. and is the range in which most negotiations actually occur. A target point is the desired settlement value a party has set as a goal when negotiations begin. You can use a tactic in making your initial offer that will give you an advantage: When multiple items or issues are on the table. thus producing a true “win-win” negotiation. When the two parties agree to a price within the range. Resistance points are the maximum or minimum beyond which a negotiator is likely to consider an offer unacceptable (and possibly walk out). After initial offers are exchanged. In the example. Experienced negotiators will begin the negotiation of several items by quickly proposing such a package. thus starting out on a positive note. Both of these tactics give experienced negotiators an edge when they face novice negotiators who are more likely to rush the process and expose their position. each initial offer ($21. Two extremely helpful tactics to be used immediately after initial offers are made are Tactic #15: Caucus and Tactic #20: Posturing. these points have set the outer limits. the other side does not agree to this value).
Her mom and dad had already talked about it privately. Example 1 Shelly’s “Sweet Sixteen” party was coming up. Unfortunately. You can invite up to 20 of your friends. A caucus gives you an opportunity to work out problems with your own team in private. A caucus is when a negotiating team calls for a break and leaves the negotiating table to confer in private. without revealing their ideas to the other side. To do so in front of your opponent would obviously undermine your team’s position in the negotiations.m. and I already have 25 names.–10:00 p. so we’ll have the party from 7:00 p. because it might disturb the neighbors. so her parents sat down with their daughter to discuss the details. If the team is feeling pressure to concede on certain items. We don’t want it to be a late evening. make use of the opportunity to call for a caucus. it gives the parties an opportunity to reassess where they are and determine if everyone involved agrees that they should be heading in this direction. If the negotiations have suddenly gone in an unanticipated direction. If the negotiations are heated. a caucus can be used as a break to calm the situation down. or if a member takes on a role in the negotiations that has not been assigned to them. and presumably had an agreement.m. Mom: We’re planning on having your party here on Saturday night. We’ll just have chips and soda. If negotiations seem stalled. A caucus is certainly called for if individual members of the team become agitated or express frustration with the progress of the negotiations. calling for a caucus gives you a chance to get your team to recommit to a particular course of action.Tactic 15: Caucus If you are part of a negotiating team. There are many ways to use this strategy. Shelly. the negotiations got out of hand when Shelly’s dad forgot what had been decided. And that’s just my friends from school! I haven’t started Exchanging Initial Offers 63 . call a caucus so both sides can brainstorm new solutions to keep the negotiations going. Shelly: Twenty friends? You’re kidding! I’ve just started on my list.
we need to talk.—that’s so “baby. we could rent the VFW hall. (excited) That would be so cool. We’ll get a band—everyone does. I guess the VFW will work. And midnight is definitely too late. okay. Time out! Dad.” They would never expect a party to end before midnight. (During the caucus. Your dad and I already talked about this and agreed that 20 guests would be the limit. alone. Shelly’s parents reviewed their first planning discussion and went over what Shelly’s mom thought they had already 64 50 Practical Negotiation Tactics . I think the band would be fine. Jerry from down the street is in a really good band that all of the crowd likes. That sounds like too many for here at the house. (with some irritation) I’m not sure. we’ll call you when we’re ready. Shelly. Mom! This is my “Sweet Sixteen” party. It’s special!!! Well. and then the number of kids won’t matter. That would be great! It would keep everyone entertained. In fact. I’m sure we can ask them to tone it down a little. We could play records and you guys could dance. (shocked) Jerry’s band from down the street? They’re a punk rock band! Their music is totally inappropriate for sixteen year-olds. Dad. And can we bring in pizza? Or maybe one of those “mile-long” hero sandwiches? I like those—let’s do the hero sandwiches. Oh. And they can’t go home at 10:00 p. I could invite everyone!! Hold on! I thought we agreed that this was to be a simple party. I think we can handle a few more kids—how about 35? And midnight sounds okay. Actually.m.Dad: Mom: Dad: Shelly: Mom: Shelly: Mom: Shelly: Dad: Mom: Dad: Shelly: Dad: Mom: on the friends I’ve made over the summer at the pool.
too? No way!! I want presents!! Conclusion In spite of their prior planning. But we can have the band. Dad. but your dad and I agree on getting a DJ to play. to 11:00 p. A DJ? I guess that’s okay.m.m. When they called Shelly back in.Mom: Shelly: Mom: Shelly: Mom: Shelly: Dad: Shelly: Mom: Shelly: decided. please!! 11:00 p. which was to make sure Shelly’s Sweet Sixteen party was a fun and safe evening. Okay. midnight. And we’re serving chips and sodas. her mom presented the revised proposal.) Okay. Does that mean no presents. we’re going to rent the VFW hall.m. All right. and not a huge production. sorry. can’t we? No band. but no Sweet Sixteen birthday party decorations. causing them to lose control and make compromises they hadn’t intended to make.m. Mom’s call for a caucus gave them a chance to regroup and re-state their original objective. and you can invite more friends. Agreed. and we will need to approve the list. this mom-and-dad negotiating team became unglued during the negotiations. but we’ll schedule the party for 8:00 p. That’s so lame. we will be better able to chaperone. Example 2 The contract negotiations between the company and the union had been going on for days. But you are limited to 40. That way. The item currently on the table was the company’s offer to give each Exchanging Initial Offers 65 . is for little kids!! No. Your mom and I agree—11:00 p.
some attempt to undermine me with my members? Company: I don’t know what you’re so worked up about—we’re willing to spend the same amount of money!! Union negotiator #2: Can we take a break? Union: We don’t need a break—we’re not discussing this stupid proposal. Tuition in place of health insurances? They’ll think I’ve lost my mind. 66 50 Practical Negotiation Tactics . Union: You’re offering a choice between health insurance and tuition payments? What kind of a deal is this? Company: Hey. A lot of employees have spouses who can get health insurance coverage through their work. it’s a good proposal. The union’s lead negotiator misunderstood the proposal. Union: Why are you so concerned about new job opportunities? Are you holding out on us? Company: No. Union negotiator #2: Please—just a moment outside. What is this. The tuition benefits will encourage the workers to be prepared for new job opportunities. I’m just saying that tuition benefits are sometimes a good substitute for health insurance. Union: (angrily) I’m not presenting this proposal to my people. and thought he was being asked to choose between a health insurance plan and a tuition benefit plan for all members. With the cost of college educations so high.individual member of the bargaining unit the option of being in the health insurance plan offered in the contract or receiving the same amount of money the company pays for health coverage as a tuition reimbursement benefit for the employee or any member of his or her immediate family. many will want to use it for their children’s education. The company’s negotiator didn’t recognize the misunderstanding. and the following conversation occurred.
Union: Union: Company: Okay. I think that what you’re proposing is a really good idea. (After Negotiator #2 explained that the choice of tuition or health insurance benefits would be an individual choice for each unit member and not a change in the contract for everyone. Exchanging Initial Offers 67 . and the parties were able to complete their negotiations. Negotiator #1 regained his footing. I thought that the contract would cover one or the other for everyone. let’s move on. Good. Conclusion Negotiator #2’s timely call for a caucus so she could explain the miscommunication in private saved the session. we’ll be back in 5 minutes. Now. the parties returned to the room.) I’m sorry. I didn’t understand that your proposal was to allow each individual member to choose between the health coverage or the tuition benefit. and I apologize for explaining it poorly.
However. At a point late in the negotiations. according to my figures. I can go to another dealer and get a green exterior—the color I like best. you are making $200 profit over the true dealer’s cost. you don’t want your opponent to know what these things are. He doesn’t really care about the color of the new vehicle. Mr. But for this price. when the two sides are only a few dollars apart. so be sure you present them in a way that suggests importance. Salesman: Let me talk to my manager. we’ve got expenses and we need to make some profit. A has gained something of true value and given up nothing he values in return. but he makes a mental note to use color as a “throwaway” item.” Throwaway items are those things that hold little or no value to you. but the key to making it work is to include the throwaways in an initial list of demands OR add it in at a strategic time.Tactic 16: Use Throwaway Items Identify ahead of time what you place a high value on and what you are willing to give up easily—your “throwaways. (Salesman returns with manager) 68 50 Practical Negotiation Tactics . but in reality. not revealing that the item exchanged is a “throwaway. but … Salesman: But what? Hobbs: Well. Here’s how it works: Party A exchanges the item for something of true value. and noticed that none of the vehicles have a green exterior. I know.” Party B thinks that A has sacrificed one important objective to gain another. Example 1 The buyer. quickly checked the dealer’s inventory of sport utility vehicles in stock. this conversation takes place: Hobbs: Yes. according to the Consumer Reports listing of the cost of the vehicle. Hobbs: Yes. It is a useful tactic in any negotiations. I’ll go get him. Hobbs. Salesman: Well. it’s a great car and a fair deal.
Miguel. Then we have a deal. All three employees must agree to the schedule. so I might as well get the color I want! What if we offer you the red one for $100 less? Is the color worth $100? I . 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. and seniority will be used to determine who gets to choose the first day.Manager: Hobbs: Manager: Hobbs: Manager: Hobbs: Manager: We are offering you a great deal. Example 2 The office supervisor told the three internal sales representatives (Jenny. I’ll take the red one for $100 less. Conclusion Mr. he brought it up and convinced the salesman and manager that it was an important item to him—possibly even a deal-breaker. The days in question are: Exchanging Initial Offers 69 . At the very end of the negotiations. The manager was convinced enough to sacrifice a final $100 for the throwaway. but you’ve made me a fair offer and you have been pleasant to negotiate with … Then why not buy the red one you drove—the one we based the figures on? I keep cars 8–10 years. The three are sitting at a lunch table to discuss the schedule..no it’s not. Hobbs successfully chose color as a throwaway item. Employees will be paid time-and-a half for each of these days. Why didn’t you mention the color before? I didn’t expect to actually buy a new car today (note: not the truth)...
27. 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. 31 January 1. December 24 Conclusion Carolyn has achieved her objective: She will be off December 24 and 26. 30. January 1 Carolyn: December 24. She got what she wanted by giving up something she did not value: the two other days. A second and third round produced the following allocation: Jenny: December 23. and each chooses their days to work: Carolyn: December 27. She would actually prefer to work the extra days and get paid time-and-a half. They agree. This would allow Jenny and Miguel to each work only two days. She proposes to work five days. 26 Miguel: November 25. 2 In the first round of negotiation. They have decided to start over.November 25 (the day after Thanksgiving) December 23. 30. January 1. They all agreed to their schedules. December 27. January 2 None of the three are totally happy with the results. if they let her choose the two days she will be off and the five days she will work. December 30. it was assumed that each would work three) in order to have December 24 and 26 off to be at home with her children. 2 Jenny: December 23. 31. but that is a secondary consideration. 70 50 Practical Negotiation Tactics . Carolyn has decided to use as a “throwaway” the number of days she will work (previously. each made a first choice of days they will work. December 31 Miguel: November 25. 24. 26. December 26.
The estate’s assets included a checking and savings account totaling $450. were faced with the task of selling the house and disposing of their mom’s personal belongings. for example. along with the cash. it is often helpful to package the items in distinct groups and then deal with each package separately.Tactic 17: Package Items In a negotiation where there are multiple issues or items to be negotiated. Anne: As I see it. three ways. In addition. the antiques. Autumn and Angela. 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. The house and much of the furniture has been in the Exchanging Initial Offers 71 . The process of grouping items can be an educational exercise because the response to one party’s suggested packaging of items might reveal how the other party views the various items on the table. Autumn: I don’t have any objection to selling the stock and distributing the proceeds and the cash three ways. their mom left specific pieces of jewelry and art in the will to each of the girls. and a collection of antique furniture. When the girls decided it was time to talk about the estate. a house valued at $250. they met at the house. Example 1 When their mother died at age 82. one might package all of the financial issues in one group and negotiate on that package as one issue. For example. Their mother’s will was very clear: the three daughters were to all have an equal share of her estate. Anne and her sisters.000. A reluctance to include one particular financial item with other financial issues.000 with no mortgage on it. and the stock and distribute the proceeds. 300 shares of stock in a pharmaceutical company. we need to sell the house. but I’d like to talk about the house and the furniture. realizing that the total cost of a deal might make or break the agreement. can indicate that something you think is minor is really a major concern to your opponent.
don’t you think? Angela: Maybe. Mother was born here and grew up here. we can sell ours. In fact. It’s a buyer’s market now. it’s a magnet for vandals. Angela: Now’s not a good time to sell either the stock or the house and antiques. we’ll discuss again what happens to the house and the antiques. so I will be able to keep tabs on it. Frankly.family for years. Why don’t we leave some of the cash in the bank. I’d like it all to stay in the family. and use it to fix the house up? Then when we make a decision. Soon. So we agree: We’ll leave $30. but the operative word is “give. Anne: But that means we have to continue to take care of the house and its contents. Autumn: I think its awfully soon to be making these kinds of decisions. We’ll split the stock three ways. Angela: And we can talk about the art and jewelry? 72 50 Practical Negotiation Tactics . there’s a lot of work that needs to be done to get it ready to sell or to make it livable for one of us. we’re really free to do with them what we want.000 in the bank and distribute the remainder three ways. Anne: I’m not sure I’m comfortable talking about trading the jewelry and art Mom left to each of us. With no one living here. What would you think about agreeing today to distribute the cash and stock three ways. If we want. she’s free to do so. Autumn: Sounds good to me. and now that we have them. There was a reason why she gave us what she did. I’d really be interested in talking a trade for some of them. If Angela wants to hold on to her stock. I’d like to talk about the art works Mom left each of us. we will have a more valuable asset. and if we wait a couple of years. and letting everything else wait for another discussion. Anne: Okay. And we’ll fix the house up. we’d get a lot more for them. Angela: I live close by.” She gave those things to us.
and the art works—will be more difficult. The second: working conditions (work schedules and promotional opportunities). including benefits for partners in non-traditional relationships. and deal with one area at a time? The first: Wage issues (pay schedules and the annual and merit raise issues). The negotiations on the other items—the house. health benefits. The following tasks needed to be a accomplished: establishing basic pay schedules. and establishing a work schedule to accommodate evening and weekend clients. the antiques.). Example 2 The attorneys and staff of the local Legal Aid Society formed a union and were about to negotiate their first contract with the executive director. sick. deciding whether there would be annual wage increases as well as merit increases. but I’m making no commitment to trade. funeral. Waiting to make decisions on those items until some time has passed gives the women an opportunity to look at a number of options. the jewelry. Several issues also needed to be addressed: the ability of employees to move up through the organization. Employees: We’ve got a lot of items to cover. vacation. and the assignment of the limited number of parking spaces. Conclusion Autumn’s suggestion to package the money and stock because they can be easily divided by three made agreement on those items possible. Angela: That’s fine. Anne: Same with me. May I suggest that we divide the items into three areas. deciding to base the increases on a percentage or equally distribute the funds for increases among the professional and clerical staff. what kind of paid leaves there will be (personal.Autumn: I can agree not to do anything with the jewelry and art Mom left me before we talk. etc. The third: Ben- Exchanging Initial Offers 73 . tuition benefits.
That’s a program that can have a lot to do with how employees are able to increase their worth to the organization. as well. 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. There is more flexibility to use non-public money sources to reward employees who will cover night or weekend hours or who qualify for merit increases. tuition benefits. Wages should not include merit pay raises. so there’s not going to be a lot of discussion on what our pay schedules and annual increases can be. Employees: I’m surprised that you would take merit increases out of a general discussion of wages. Executive Director: Well. paid leave times. Executive Director: I think it’s a good idea to group items together. 74 50 Practical Negotiation Tactics . that makes sense. I would include that under the Working Conditions category. So I’d like to see us get through the wage issues quickly and then move on.efits (health insurance. because they’re really an incentive for better performance. but the parties were able to come to agreement because the wage issue had been resolved. to be honest with you. Let’s get started. Employees: Okay. and the parking spaces). I think it also makes sense to include tuition benefits in the Working Conditions category. Also. Later negotiations were difficult. And paid leave clearly belongs with Wage issues and should be discussed with the pay schedules. but I’d change your list. the paid leave categories are pretty clearly defined. we are an agency supported generally by public funding. Executive Director: Sounds like a good agenda.
You signed those papers. Tim began working right after graduation. They have no children. Exchanging Initial Offers 75 . Example 1 Tim and Kathy. and they were making payments on school loans (for his undergraduate degree and her undergraduate and graduate degree) and on two cars. Kathy’s first job paid more than Tim’s because she had a graduate degree. because Tim felt that Kathy had taken advantage of him during the marriage. They met and married in college. without suggesting any changes or modifications.Tactic 18: Agree on Something As Soon As You Can Negotiations are more successful if both sides can agree on something—anything—almost immediately. but don’t think you’re going to stick me with all of the mortgage and credit-card payments. and might not even be able to keep the house. and that you are entering into the negotiations with the intent to reach agreement. It indicates to your opponent that you are a reasonable negotiator. Their “property division” was mostly about dividing their debts. and both have good jobs. You can also make an effort to agree on something your opponent offers early in the negotiations. too. Tim worried that he would be stuck with all of the debt. after a brief marriage. and she agreed. Kathy borrowed more money to go to graduate school full-time. sets the stage for mutual respect and communication. Consider starting things off by presenting your opponent with a proposal you feel confident can be agreed upon without argument. are divorcing. Tim: You might be leaving town. Kathy was asked by her employer to relocate to another city. Now. They were in the middle of buying a house. no matter how insignificant. rather than disposing of assets. The discussion might become very heated. It was her idea to buy the house and go into debt to furnish it. They had also furnished their house on credit. with her promotion sending her out of town. An initial agreement. The couple hoped to do the divorce without involving lawyers in order to save money.
I think it only fair that I take over repayment of all the school loans. yes.. I got my convertible. a wholesale art dealer. Frankly. hold on. even though the convertible is being paid for through a 48-month loan and the sports car through a 36-month loan. The monthly payments are about the same. Kathy: I suppose we should look at the school loans next. Example 2 ABC Company. ABC usually uses UPS 76 50 Practical Negotiation Tactics . about the house and furnishings. The first thing I’d like to talk about is what we are going to do about the cars. When we bought them two years ago. an art gallery. Okay. I can hardly argue with that.Kathy: Hey. If both of us had been working the year I went to graduate school. Kathy: Now. as you remember. They also agreed that Tim wouldn’t have to pay her that amount for five years. 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. I think that makes sense. we would have paid down our school loans more. Tim: Well. 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. I say we agree to transfer the convertible loan to me and you take over the loan on the sports car. and he could pay it in annual installments over a five-year period. What do you want to do about them? Conclusion Having agreed to two items very quickly. as long as the cost was approximately the same. and XYZ Co. Tim: Okay. and you got your sports car. I don’t intend to “stick” you with anything. we decided to each pick out our “dream car” and that we would not overrule the other’s choice.
You can get the three new artworks here so that we can hold the sale as scheduled? Yes. water from the gallery’s air conditioning unit pooled on some of the surfaces of the warehouse area. XYZ’s manager failed to open the boxes or remove the artworks. ABC: Before we begin. XYZ decided to cancel the promotional sale that was to start on Wednesday. Holiday weekend storms caused the electricity to go off for different periods in different parts of the city. XYZ: ABC: Exchanging Initial Offers 77 .to ship artwork. but XYZ asked specifically that a little-known company specializing in shipping art known as WeCanShipArt be the shipper. and that XYZ needed to either go to the shipping company or its own employees for compensation for the damage. and began preparing to return all of the artwork to ABC. Unfortunately. when the boxes were opened on Monday. ABC refused to pay WeCanShipArt until it received payment from XYZ. and the boxes showed no external damage. They arrived right before the holiday weekend began. The other times this happened. and put the company on notice that it was not going to accept the order because the planned sale needed a dozen works of art to make it profitable. let me make XYZ an offer: We will deliver three additional artworks to you by the end of the day tomorrow so you can conduct your promotional sale as advertised. but only if you let us ship it UPS. WeCanShipArt claimed that the boxes were not damaged in shipment—the artwork was already water damaged. XYZ contacted ABC immediately. it was obvious that the art in one of the boxes had suffered considerable water damage. The three parties agreed to hold a conference call late Monday afternoon to try and resolve the dispute. We’ll expect you to pay for the 12 works that will be in your show. The artworks filled four boxes. and we will continue to discuss who is liable for the three water-damaged works. ABC’s position was that the artwork was fine when it left their location. There was no indication that the gallery’s electricity had gone out over the weekend. or else the box was damaged in XYZ’s warehouse. and arrived on time and apparently in good condition. However.
the three companies were able to agree to undertake an investigation within each company to determine when the artworks were damaged.m. If we don’t make the deadline. WeCanShipArt: Wait a minute. we’re ruined. they will split the cost of the three damaged pieces three ways. You can’t just ignore us. They also agreed that if the investigations are not conclusive. regardless of where the original three artworks were damaged.XYZ: Agreed. ABC: Well. we’ll take responsibility for all of the consequences: the lost sale to ABC and the lost promotional sale by XYZ. and if word gets out that you think it was. that’s okay with me if it’s okay with XYZ. 78 50 Practical Negotiation Tactics . And we’ll eat the cost of shipping. tomorrow and we’ll wait for payment on both shipments until we resolve how the artworks were damaged. at its financial risk. how do we resolve the issue of the damaged artworks? Conclusion ABC’s decision to offer a solution to XYZ’s immediate problem. The artwork was not damaged while in our control. I can’t see how I can refuse that. XYZ: Okay. Having reached an amiable solution to the immediate problem. We can guarantee that we will deliver the new order in perfect condition by 5:00 p. generated a like offer from WeCanShipArt and a reasonable response from XYZ. Now.
Exchanging Initial Offers 79 . Conclusion Ann and Colleen did not feel like negotiating over the tractor and running the risk that it might affect their friendship. and it came with the bush hog and the leaf pick-up. The “first and best” tactic enabled them to settle the matter easily.Tactic 19: Make a First and Best Offer If you want to cut a deal but you don’t like the “give-and-take” negotiation process. Okay? No quibbling. consider using the “First and Best” tactic. we’ll sell it to you. We plan to put an ad in the paper next week. Jeff spends many hours mowing the yard every week. I know you and Jeff said you’d like one because you have about five acres. Example 1 Colleen: Ann. but if you’re interested. period. It is important that both sides know that there is no negotiating beyond the single “best offer”—that the first offer will either be accepted or rejected. What do you want for it? Colleen: Well. Ann: Well. Why don’t you give me a price? Colleen: Oh. Ann: Thanks! We really need one. You must mean what you say and be prepared to walk away from an unacceptable offer.000 for it six years ago. but ONLY if you have a bottom line or definite point at which you will accept an agreement and you believe the other party will make a reasonable offer. I don’t want to quibble. and even more hours in the fall picking up leaves. 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. no hard feelings either way. we paid $5. Ann: That sounds great! I don’t want this to affect our friendship. we plan on selling our Ford tractor when we move.
as we agreed. I don’t like negotiating over salary either. I want the job. Okay? Vernon: That sounds good. but I don’t want to start off in a new job by negotiating with my boss! So. and you know my current salary. I think we have agreed to all aspects of the job offer. Archie: Thanks. 80 50 Practical Negotiation Tactics . So. on this slip of paper. who admired the way Archie negotiated his starting salary. and I’ll take 48 hours to consider it. because it was several thousand dollars above what he decided was the minimum it would take for him to change employers.Example 2 Archie: Well. (three days later) Vernon: Archie. Here it is. He also started the job with a positive working relationship with Vernon. We want you. I came up with the best salary offer I can make. I’ll get back to you in three days. I’ll either accept it or reject it. I expect a fair increase. except salary. I’ll discuss it with my wife and get back to you in 48 hours. but we have internal budget considerations and we must consider equity with other employees. Conclusion Archie accepted the job offer. how about you making your first salary offer your best one. no questions asked.
Present your position and demands as if yours is the only logical position. Sally’s Senior Prom is coming up. curfew would be okay. Exchanging Initial Offers 81 . He knew his parents would not agree to let him stay out all night.” but it is also a source of valuable information that can help the negotiations proceed to a successful conclusion. Posturing is indeed “acting.” As you know. then the prom. and it really wouldn’t be fair if I wasn’t able to go along with the rest of the group. so the prom is a pretty big deal to both of us. and then to breakfast at “Timothy’s. He and his date had decided that as long as they could join their friends for breakfast after the prom. Third. you will probably have to modify some of your positions if you are to reach agreement. look for indications from your opponent as to what he or she believes is their best position. First.m. since Sally is going away to college next year. Fourth. First we’re going to dinner. we’re not going to be dating exclusively after this summer. a 4:00 a. 17 years old and a junior in high school. It might be your only opportunity to explain your position without interruption. we’re all meeting at Donna’s so we can share a limousine. This is called posturing—presenting your position strongly and completely.m. (Once negotiations get underway. His girl friend’s Senior Prom was coming up and Kevin obviously wanted to stay out beyond his usual curfew time of 1:00 a. Kevin: Mom and Dad. so he knew that he would have to sell them very quickly. and we’ve made a lot of plans with our friends that I need to talk to you about. and in a favorable light. Example 1 Kevin. you only have one Senior Prom in your life.Tactic 20: Posturing You might have to do a little acting at the beginning of the negotiations. you know that Sally is really looking forward to this. I’m the only junior in the crowd. was dating a senior. and ignore or deny any weaknesses in it.) During the posturing phase. Kevin had “negotiated” with his parents before. Second. but he figured “all night” was relative.
And. We’re just not convinced that your entire group has been alcohol. We think that after the breakfast. However. happy about your plans to use a limousine so you kids aren’t driving. of course. Second. So. I believe you can pay a little more and have the limousine bring you both home. From where we sit.Mom: Kevin: Mom: Kevin: Timothy’s usually isn’t open early in the morning. and we’re just not happy about that. which could be dangerous. remember that when you started dating Sally and hanging out with an older crowd. And if we don’t spend the night. but to use that as a reason to stay overnight doesn’t make sense.or drug-free. Fifth. we told you that we would not be changing our rules to accommodate that older group. you have been fairly good about making your curfew—most of the time. this prom is a one-night thing—a dance that is dressier than you’re used to. you will have another Senior Prom—yours—so we don’t think you will be “missing” that much if you don’t stay out all night. 82 50 Practical Negotiation Tactics . Donna’s parents are not as strict as they could be when a bunch of you are there. we’ll have to get in our car and drive home very early in the morning. Also. Yes. but it should not be oversold. yes. That’s the deal then? Okay. I’ve never missed my curfew. You realize that this could be as late as 4:00 a. you and Sally need to call it a night (or really a morning). and the crowd we hang with doesn’t either. I think I ought to be able to stay out all night. Sally’s parents trust us and have already said yes to her. we know. We are. I know you trust me and that I’ve earned the trust. Donna’s parents will be there. so there will be plenty of chaperoning. We’ve heard that they allow kids to drink. Finally. they will be open for the Prom crowd only. I don’t drink or do drugs. Things can happen on a night like that that adversely affect you for the rest of your life. You make some good points. the limousine will take us back to Donna’s house to spend the night. but because the owner’s daughter goes to Sally’s school. for sure. That’s asking us to believe a lot.m.
It currently employs 800 people. regardless of the incentives. and it does not really need any help. Nevertheless. but we’re getting a lot of interest from other states willing to help us relocate. we’re of course interested in keeping you here.m. but it could easily add another 500 if it had the space on its assembly line. EDO: Well. one-floor operation would be very profitable. our Exchanging Initial Offers 83 . and it will grow—everything from sub-parts manufacturing to the shipping business we generate. the state can do to help the company expand and rebuild. because his parents could not disagree with such wellthought-out ideas. we are one of the largest employers in this county. but there are limited options available. and had this conversation: Tencro: We really want to keep our company here and expand it. Tencro: Let me just remind you of what our company means to this state. Tencro approached the state’s Economic Development Officer. we’d be adding at least 500 new jobs. and a new. Tencro has approached the state’s Office for Business Incentives to see what. The company approached other states to see what incentives they might offer Tencro to locate in their state. The assembly plant is out-of-date. other companies have received incentives and Tencro certainly wants all it can get. but was disappointed to learn that they offer very few incentives.Conclusion Kevin’s strategy to hit his parents with all of his very good arguments at the outset gave him an advantage. Also. Sally and Kevin had a wonderful night and were quite happy to have the evening end at 4:00 a. Example 2 Tencro Company decided to modernize and expand its business. if anything. We need to find out what you’re willing to do to keep us here. With 800 employees. If we can expand here. The spin-off business from our operations is huge. Tencro is not going to leave the state.
And we’ve been offered land practically free in the neighboring state. We do want you to expand your plant. or else it will not be cost-effective for us to stay here. That might involve the state building housing for them at a reduced cost and providing them with some retraining. and we are willing to offer some training dollars for the new workers. There are more residents in the state demanding more public services: road improvements. etc. Just increasing the workforce by 500 will pull new people into the community and cause housing costs to rise—something our citizens on fixed incomes are very much against. Certainly. We need certain incentives. We think that we’re the reason XYZ and ABC companies located here and we believe they are likely to leave if we do. We need a rebate on the local income taxes to help pay off the loan to build our new building.. we will need the two-lane entrance expanded to four lanes.employees pump money into the economy by buying houses and cars. And. any plan by the state to build housing that is subsidized by tax dollars will draw a great deal of criticism. etc. EDO: The state has very limited resources to pay for economic development incentives. We need help in the cost of attracting and training the new 500 employees. Also. what do you have to have? Tencro: We need a new location—20 acres or so—to build our new plant. We 84 50 Practical Negotiation Tactics . so we’d have to have it free here. The industrial park land can’t be “free” because we have agreements with other companies that had to buy the land. We can’t possibly give it away to other companies coming in behind them. moving to a new location will raise a lot of questions from neighbors about the increase in traffic and pollution that might be generated by your plant. and we’ve had to divert funds from business incentive programs over to basic services. additional police. EDO: Well. now that the economy has improved. paying taxes. and traffic signals. schools. if the new location is at the local industrial park. while we value your company as a long-time corporate citizen.
Exchanging Initial Offers 85 . but for the fact that each party did its homework and was aware of the true facts. The new set-up was so profitable. and the state did end up participating in a housing subdivision in order to keep the purchase price down for the new employees. and hired 500 new employees. Tencro was able to pay off the borrowed money in half the time. Tencro bought land in the industrial park.agree that the road into the industrial park must be widened and a traffic light installed at our expense. However. we’re just not in a position to offer more than that at this time. Future negotiations continued. the training and the new road improvements were all the incentives offered to Tencro. Other than that. Tencro: Well. let us go back and take another look at our options. borrowed money for the new building. Conclusion The posturing by both sides could have caused the whole negotiation process to bog down. EDO: Get back to us as soon as you can.
and houses in this area sell fast. of course. That’s a fair price.000 two years ago. Their realtor told them that it sold for $290.” (You have won a settlement.. at minimum cost. Sue: Let’s offer $325. and that two similar ones on the same street sold for $330. such as last year’s price.000.) To prevent this from happening. particularly if you don’t know the other party’s “settlement range. or 3) Make an unrealistic offer (i. either: 1) Let the other party make the first offer (this means that you will be giving up the chance to focus the negotiations on your figure. but you feel cursed because you gave away too much.e. The worst first offer is the one that is so high or so low that the other party jumps on it immediately—known as the “Winner’s Curse.000. never give them their asking price. The other party will probably come back with an equally ridiculous offer. Let’s low-ball them and offer $290. The sellers must be willing to come down a few thousand … Sue: Well. We don’t know how anxious they are to sell or if they know the market. 2) Start out with an old number. They found one they both like that lists for $325. before someone else does.000. think things through before you make or accept the first offer. Jay: No. Example 1 Jay and Sue are looking to buy a house in a specific neighborhood because it has a good school system.000 for a house that sold for $185. because you have settled quickly. Avoid giving away too much at the outset.000 three years ago). then $320.Tactic 21: Avoid the “Winner’s Curse” It is often quite difficult to make the first offer. thus requiring greater concessions on both sides.000—what they paid for it.000 this year. offer $150.000 and $337.” The perfect first offer. is the most (or least) the other side will accept. and you cannot withdraw it in good faith. 86 50 Practical Negotiation Tactics . which can be very useful). Jay: No.
as requested by the human resource director. If. (Bob and Frank meet privately to discuss the situation.500—half the difference! Sue: Great.000 total.000 for each of us—$6. Lyle: So what’s your price? Bob: Can you tell us what you have budgeted for this project? Lyle: No.000. Frank: Me too. but who knows what they are planning on offering. Give us your lowest price. Both parties felt that they made a good deal. 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. since they had already bought another house. Let’s accept it! Conclusion Jay and Sue avoided the so-called winner’s curse by making a low (but reasonable) first offer. Exchanging Initial Offers 87 . the company president. was very impressed with their presentation. That’s an insult! Jay: Well. Lyle Foxworthy. realizing they offered too much. as Sue had first suggested. the sellers obviously would have accepted and Jay and Sue.000. they had offered $325.Sue: Don’t be crazy. then let them make a counteroffer. The buyers were very motivated to sell.) Bob: I’d do it for $3. (the next day …) Jay: They made us a counteroffer of $307. Sue: Then you do it. and the offer was based on fact: the prior negotiated price. I can’t tell our realtor $290. They outlined how they would develop a new employee performance-appraisal system.
and you two come highly recommended. Conclusion Bob and Frank avoided the winner’s curse by forcing Lyle to make the first offer. That is all that’s left in this year’s training budget. I’m out of time.000) their minimum price of $6. They also ended up getting three times ($18. 88 50 Practical Negotiation Tactics . What’s the cost? Bob: We want the job. Lyle: Okay. but we can’t pay more than $18.) Lyle: Okay.Bob: Lets make them give us a price! (Bob and Frank return to the meeting room.000. We’ve waited long enough. but we know you must have an amount budgeted for this and we are willing to do it for that amount.000. Bob: That’s fair. What is it? Lyle: Why don’t you give us a price? Bob: We can’t use our daily rate because it might be too high for this work. and it would not apply. We’ll do the job.
and attorneys use tried and true tactics in giving and receiving offers. in fact. One or more parts might be acceptable or indicate movement from their previous positions. seeing no common ground. because if you do not at least appear to be flexible. Expect that the “total pie” will be different from what it was at the outset. Experienced negotiators seldom reveal their exact priorities and objectives. but possibly of different values to your opponent. Experienced negotiators also know that proposing multiple options (see Tactic #22) and offering a tradeoff (see Tactic #23) are useful when more than one issue or item is to be negotiated. When the other party makes an offer. and remain open to offers and options that you did not originally expect (see Tactic #30: Always Leave Room for Dessert). Skilled negotiators such as salespeople. Instead. which would most likely weaken their position (see Tactic #26: Keeping Secrets). Also.Stage 4: Making Counteroffers he heart of the negotiation process is the give-and-take. Wait to counter (see Tactic #24) because this will give the opponent the sense that you are serious about bargaining. and do not flatly reject it because it is not your offer. labor negotiators. be enlarged (see Tactic #27: Expanding the Pie). is likely to pull away from the table. the other party. which is often the case. Use a prolonged period of silence (see Tactic #29) to convey something at a strategic moment. In some negotiation situations. It has often been said that the key to negotiations is to be flexible (see Tactic #25). carefully evaluate an opponent’s offer. do not dismiss it because it is not all you want. T Making Counteroffers (The “Give and Take”) 89 . This can produce a negotiated solution without giving up your priorities (see Tactic #28: Fixed Alternatives). what appears to be an outer limit of the settlement range when the process starts can. be prepared to divide an offer into smaller ones to make it appear to be more reasonable to the other party (see Tactic #31: Cut Salami Slices) or offer two or more alternative proposals of equal value to you.
We have four options. 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. what say you. I don’t want to give up on a family vacation that quickly. their parents began discussing a family summer vacation. 90 50 Practical Negotiation Tactics . 15.Tactic 22: Propose Multiple Options The shortest distance between two points is a straight line. it looks like we can’t really plan a vacation for all four of us. gives your opponent little maneuvering room and might even prolong or damage the negotiations. His brother Sydney. 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. Jerry will be here. Proposing only one solution to a problem. The week he would be home would be the first week of school for Sydney. The effort it takes to come up with multiple options (all of which are acceptable to you) reveals additional ways in which you see yourself “winning” in the negotiations. Jerry had already started his summer job. Dad: Wait a minute. Jerry pointed out that he is expected to work until July 31st. completed his first year of college and came home for the summer around the middle of May. Here’s the discussion that followed: Mom: Well. while it may be your best option. The reciprocal opportunity to review and select among options rather than accept one (“take it or leave it”) also gives your opponent a way to win. Option 2: Mom and I go before Jerry leaves on August 1. Option 1: No family vacation. Proposing multiple ways to reach your goal can get you to the same place. In mid-June. finished his freshman year of high school at the beginning of June. Example 1 Jerry. Let’s see what we can work out. Dad. Sydney. 19. so you can go without me. and quicker. except when you’re negotiating.
Option 3: Mom. Andrea considers Making Counteroffers (The “Give and Take”) 91 . Jerry: My friends and I have plans through Saturday of that week. and Sydney go to South Carolina before his school starts. Sydney: So what you’re suggesting is that the three of us are on vacation from Thursday to Sunday. if it’s okay with Jerry. they were able to make that happen and not interfere with or argue about the merits of each other’s individual goals. one paralegal. we could return home on Thursday and still get a week’s vacation. Bob. It’s not perfect. Jerry: Okay with me. Sydney: Okay. and one secretary in his litigation unit. Classes don’t start until Friday. and Carl). Mom: Well. Joe has no say in who was hired by the corporate legal office to work in his unit. actually. we meet up with him that week for vacation. Conclusion The goal was to have a family vacation. but it should work out all right. Mom? Mom: Let’s do it. me. Option 4: Jerry doesn’t return home the week between his visit to the Northeast and returning to school. If we started the vacation on a Thursday. By proposing numerous options. but he can discharge employees for poor performance. And I miss orientation and start school the next day? Dad: That’s an option. Then Jerry joins us until Thursday. when we come home. Sydney: Don’t I start school that week? I don’t want to miss school. so I won’t be able to meet up with you until Sunday. you have a half-day orientation on Wednesday. Example 2 Joe is an attorney whose job responsibilities include managing three other attorneys (Andrea.
rather than to put it off on someone else or for some time in the future. which forced Joe to take action. you know that wasn’t an okay to settle. Andrea: Well. Andrea: Wait Joe. If you don’t like the way I do my job. she made a two glaring errors in judgment. Joe: Andrea. Andrea: We’re hired for our expertise. isn’t it? But I don’t think just moving you really solves the problem. why don’t you just move me to another unit? I’m certain Bill thinks I do good work and would be happy to have me in his group. Andrea: You didn’t list moving to another unit as an option. or you can work out a “supervision” agreement with me so that I can better monitor your performance. Before you start. and resents any attempt by Joe to supervise her work. 92 50 Practical Negotiation Tactics . It is to the corporation’s benefit to address that problem here and now. you have a job-performance problem. I thought I had cleared it with you when I told you what I thought they ought to offer and you said that sounded too good to be true. so Joe took a “hands off” approach. you can agree to a demotion so that your areas of responsibility are lessened to that of a paralegal. It was just a comment. You had no authority to agree to settle the Stites case without clearing it with me. and I don’t see why we don’t have more independence. Joe: Come on. I really see your options as follows: You can leave the corporation. The attorney for the other side has agreed to give me the additional time to file it. Andrea. however. To put it as bluntly as I can. Joe: That is certainly an option. let me say that I’m handling the missed deadline on the pleading.herself to be a professional. Joe: That’s all well and good. we have a very big problem. Her job performance was acceptable. but it doesn’t solve the problem—nor is it the only problem. We have a formal procedure that you just don’t like to follow. In the last month.
or I would advise your next supervisor to put you on a very formal approval program.Joe: That could be an option. by Leigh Thompson. I hope we can work it out. It also changed her attitude about being both a professional and a team player in a corporate office. rather than my staying here. lets talk to Bill about the move. improve her work performance. (Adapted from The Mind and The Heart of the Negotiator. in fact. but it would still require some change in the way you work: either a demotion. Believe it or not. the needs of the corporation have to come first. If you are convinced that I have to undertake an “approval” program. then it would save face for me if it comes with a move to another unit. I want to stay with the firm. and propose an acceptable alternative. Andrea’s move and subsequent “approval” regime did. Conclusion Joe’s willingness to offer more than one solution gave Andrea a way to look at this unfortunate situation as an opportunity. If that option is okay with you. Andrea: Well. my goal is the same is yours: to create an environment where you can perform to your full potential. Joe: That’s fine with me. But in fairness to our mutual employer.) Making Counteroffers (The “Give and Take”) 93 .
Let’s agree to those things. It is used only when each side has several demands. 2) exchange items (those that can be easily traded off—one item for another item of equal value. then the contractor has lost $500 in revenue. 3) distributive items (those items for which the two parties have exactly opposite interests. three strategies are used. we both want the sod. if a buyer negotiates a $500 reduction of a contractor’s bill. then those which can be easily traded. This approach is an important tactic. only those with polar-opposite interests that must be divided. Maureen: First.).000. or Distributive) The “win-win” approach to negotiations is a basic tradeoff strategy of seeking maximum gains for both sides. Exchange. that’s $9. thus making it necessary to find a middle ground on each. and a home theatre. Wow! We are off to a good start. They each agreed to list the items they want and then to negotiate whether or not they will be purchased. Example 1 Brooks and Maureen Wilson have just finished building a new home. 94 50 Practical Negotiation Tactics . Avoid assuming that you both differ on every issue (in which case you might be making unnecessary sacrifices) by first identifying items for which both sides have similar desires. Brooks: Right. They both agreed that this is the maximum they will spend on “extras” before moving in. They have a fixed amount of money—$14. (She looks over the list.Tactic 23: The “Win-Win” Approach (Identify Issues as Compatible. and finally. because it can speed up negotiations and produce a more desirable outcome. With distributive items. For example. the fencing. Let’s see. These items often involve money). It goes like this: Organize the joint list of demands into three categories: 1) compatible items (those items that both parties can quickly agree on because they share the same desired outcome). let’s see if there are any items we both want.500. one person’s gain is another’s loss—zero-sum. In essence.) Yes. etc.
000! Brooks: Good. We have $1. Making Counteroffers (The “Give and Take”) 95 . Can we split it evenly? Brooks: Okay.000 $5. I’d like to spend some of it on lighting upgrades. These are all permanent immediate needs.000 $500 $1. and we both get things we want.000 $3.000 $1.# 1 Sod Item Cost $1.500 $500 $1.500 left.200 $200–$2.000 $2. $750 for lighting and $750 in the bank.500 $5. that makes sense. which I’d like to keep in the bank.500 $2. which takes another $3.000 Brooks X X Maureen X “Win-Win” Category Compatible Exchange 2 Trees (3) 3 Berber carpeting 4 Lighting upgrades 5 Third garage 6 Tile entry 7 Designer drapes 8 Deluxe home theatre 9 Extra sidewalk 10 Custom chandelier 11 Whirlpool bath 12 Fencing X X X X X X X X X X X Exchange Compatible X Compatible Exchange Distributive Maureen: Well. Maureen: No. I’ll trade your sidewalk and trees for my whirlpool bath.
This year. finally agreeing to split the difference on the remaining amount (distributive items). Drug-Testing Program 96 50 Practical Negotiation Tactics . Pension Increase 3. During that time. 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. Profit-Sharing 5. Item Management 3 years None 1% 10% of net For cause only Union 3 years 2% 5% 12% of net For cause only Win-Win Category Compatible Exchange Distributive Exchange Compatible 1. management and union negotiators found that a “winwin” approach to negotiations worked well.Conclusion By taking the time to list all the items each person wanted and their cost estimates. All items to be negotiated and their desired outcome for each item were put in writing for review. even in difficult years. both sides exchanged lists of initial demands at their first meeting. Maureen and Brooks were able to identify those things they both wanted (the compatible items) and then trade some items of equal value (the exchange items). Length of Contract 2. The combined lists total thirteen different items: Desired Outcome No. Wage Increase 4.
Shift Differential 11. Overtime Assignment 8. and (#9) to continue the often-discussed no strike/no lockout provision. At this point. and the union clothing allowance proposal (#13) for the management funeral leave proposal (#8).Voluntary ity 2 days Continue current provision 10% 10% No provision $50/month 3 days Continue cur. the negotiators agreed that they had compatible positions on three items: (#1) length of contract. Finally.6. the management profit sharing plan (#4) was exchanged for the union overtime assignment plan (#7). They proceeded to draft the language to settle these issues. they began to trade off the exchange issues of similar value and nature. Subcontracting 12. Next. they exchanged the economic issues of approximately equal cost: the union pension increase proposal (#2) for the management shift differential (#10). Health Insurance Employees pay 20% Continue cur. Paid Funeral Leave 9. Job Security 13. First. No Strike/No Lockout 10. (#5) a new drug testing program. This gave members of both sides a sense of accomplishment as they began to discuss the remaining two issues for which they must find a middle ground.Distributive rent program co-pay Exchange Exchange 7. Clothing Allowance Based on senior. Because they held opposite positions on these issues. eleven of the thirteen original issues to be negotiated had been agreed to. and removed from the table. signed. one Making Counteroffers (The “Give and Take”) 97 .Compatible rent provision 15% Exchange 15% No layoff provision $100/month Exchange Exchange Exchange In their second meeting. they accepted the union job security proposal (#12) in exchange for the management subcontracting proposal (#11). Next.
you can use the process to settle many of the other issues on the table. Sometimes the classic “split-the-difference” method is helpful in locating a middle ground. A middle ground often must be found on each of these distributive issues if you are to reach an agreement. These two distributive issues—wages (#1) and health insurance (#6)—were the most challenging to settle. or distributive so that the negotiations can begin in an organized manner.side’s gain is the other’s loss. if both parties start from reasonable positions. when you exchange items so that each party achieves their desired outcome on one of the two. exchange. the most difficult issues (often involving price or some other economic measure) can be negotiated because you know that most items have been settled successfully and only a few remain. 98 50 Practical Negotiation Tactics . Second. when you agree on the items where both parties have similar desired outcomes. negotiations begin on a positive “win-win” note. but it can be very effective when a negotiation situation involves several issues. They then identify each as compatible. Third. but a middle ground was eventually found on each and negotiations ended. The tactic offers several advantages: First. Both sides first agree that all issues to be discussed will indeed be listed and openly discussed. Conclusion This tactic is simple.
Waiting a respectful amount of time to counter. even if you aren’t going to accept their offer. The final issue had to do with “lights out” and quiet times for studying. Rob: Wait a minute. Here is how the last issue was handled: Okay. Mutual respect must be part of the negotiation process. Example 1 Jasper and Rob met when they were assigned to the same dorm room their freshman year in college. Jasper: Finish or not. and looks like you are belittling them. Jasper studies during the day and early evening and likes to stay up very late watching TV and visiting with friends. stereo. and on what would be considered acceptable “sharing” of each other’s junk food supplies. Rob: Making Counteroffers (The “Give and Take”) 99 . they decided to establish “room rules” so that they would both be comfortable with the room assignment. do not offer a counterproposal right away. Let me finish. each side is expected to put an offer on the table. Since they didn’t know each other well. and from a strategic standpoint. So when’s a good time? Jasper: (without hesitation) No way. and refrigerator. and can help you reach your goal. so he wants a quiet room late at night. you know. will make your opponent feel good about the process. I’m not interested in a curfew. last item: I’d like it quiet in the room at night. It is especially important that you do two things: take your time before rejecting any offer from the other side. Rob stays busy all day and evening with other activities. so I can study. the location of the TV. You can reject the offer and offer a counterproposal after it is obvious that you have taken the time to consider the merits of it. and studies late into the night. This isn’t high school. A counterproposal delivered too quickly tells the other side that you haven’t or won’t even seriously consider their offer. They agreed on which part of the room each would have.Tactic 24: Wait to Counter As the negotiations begin.
m. and d) a hearing with company owner if the matter is not resolved in 20 days. Rob: (there is no hesitation in this voice) No. midnight during the week is the only thing I’ll consider. Under ABC ‘s contract with the union. Jasper: Midnight. Jasper: (without taking a breath) At best. b) written complaint to a floor manager if the matter is not resolved in 5 days. Rob: I’m going to look for a new roommate!! Jasper: Fine!! Conclusion It was clear that neither Rob nor Jasper was seriously considering the requests and suggestions of the other person. Under the restructuring. the positions of non-union crew leader and floor manager would both be eliminated. Neither side anticipates that there would be 100 50 Practical Negotiation Tactics . The union contract required that management renegotiate this change in the grievance procedure with the union. employee grievances had to go through four levels of supervisory review and appeal: a) verbal complaint to the non-union crew leader. No agreement was reached. Example 2 ABC Company’s management was being restructured and compressed in order to facilitate its new “just-in-time” manufacturing philosophy. is all I’ll consider. curfew on TV and other noise every night.m. 10:30 p. and that’s it. c) a formal “meeting” with plant manager if the matter is not resolved in 10 days. Failure of both young men to allow one another to have their proposal considered caused the relationship to break down.Rob: (Rob was about to suggest midnight on Mondays through Thursdays. and the union foreman would report directly to the plant manager. but changed his mind when he saw Jasper’s attitude.) Listen. I want a 10:30 p. and that’s not negotiable. The appeals procedure would have to be altered to reflect the restructuring.
We think that this is an opportunity to eliminate some of the adversarial aspects of the grievance procedure. An aggrieved employee can make a request for a meeting with the plant manager. We’ve got a couple of alternative models for you to consider. Company: Here’s the new draft of the grievance procedure. rather than as a judge on the merits of the grievance. but to dictate. Certainly. the employee and the foreman would meet with the plant manager and attempt to resolve it. and began the negotiation session concerning the grievance procedure. Union: You obviously didn’t come here to negotiate. In fact. and everything else stays the same. Company: (rather abruptly) Let’s not drag this out. our grievances often signal to management that there are real problems on the shop floor. this redraft is a very simple change to the contract.) We’re just not happy that you are proposing a Making Counteroffers (The “Give and Take”) 101 . the union arrived at the meeting prepared to support a streamlined process that called for the employee with a grievance to discuss it first with the union foreman. The union was prepared to accept the plant manager’s position as final. rather than go on to appeal it to the company owner. and I’m certain your members will be okay with it. Our guys are prepared to accept a shorter grievance procedure if we can find a way to ensure that you’ll take our grievance issues seriously. Union: As you know. We’ve simply eliminated the first two steps. We just cut out two steps. If in 20 days he/she has not been satisfied. he/she can take the grievance to the plant owner for a hearing. ABC Company’s negotiator explained the management changes soon to be implemented. We’d like you to consider the plant manager’s role as a problem-solver. The redraft is simple and straightforward. Company: (no hesitating) Trust me. If the union foreman felt that the grievance had merit. no one can complain about that. Union: Hold on. (Note: An attitude change sets in.any objection to the change. After initial pleasantries were exchanged. because those management layers are gone.
the two parties did meet again. and we’ll strike if we have to.two-step grievance procedure instead of a four-step procedure. Union: We’re very serious. to prevent any change! Company: (surprised) What? Why would you object to this? Your guys will get a final decision in 20 days. This time. 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. We’ll see you on the picket line. rather than in the 35 days the current system provides. and actually accepted a three-step procedure. You can’t be serious. 102 50 Practical Negotiation Tactics . the company entertained the ideas the union had tried to propose before. After a cooling off period.
m. Bill. and now have a new baby girl. we’ll get to our side. you can adjust your demands or goals to include such new ideas. Making Counteroffers (The “Give and Take”) 103 . They flipped a coin to see who “got” them and the new baby this year. Sue: Yes. two brothers. their spouses. If you are flexible. four brothers. They’ve done the research. two sisters. Mom says you. Be open minded.m. 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). successful negotiators remain flexible because new solutions to old problems often surface during a negotiation. and at least five aunts and uncles) ate around 7:00 p.Tactic 25: Be Flexible A negotiation begins with both parties having some idea of where they hope to end up. and do not dismiss something said by your opponent just because it came from the opponent. Sue’s sister Nancy called her to talk her into coming anyway. But after the negotiation gets started. Bill’s family won. Nancy: Sue. established goals. Bill’s family (parents. and Sue called her mother to let her know that they would not be coming for Thanksgiving dinner this year. Sue and Bill decided that they had to begin alternating their Thanksgiving Day visits between the two families. and we’re really not able to enjoy either one. Next year. Example 1 Sue and Bill have been married four years. Even before the baby’s arrival. and ten nieces and nephews) always ate around 5:00 p. one sister. and the baby aren’t coming for Thanksgiving dinner this year—that you’re going to Bill’s parents’ house. it’s just too much to do both. Sue’s family (parents. 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). and identified the range of options they feel comfortable with negotiating. The couple used to have Thanksgiving dinner at both families’ homes.
Isn’t that what Thanksgiving is about—taking a day to give thanks for our blessings with the people we love? We’ll just arrange it so we do it two days in a row! Sue: Well. Conclusion Nancy’s goal when she called Sue was to talk her into coming to their Mom’s Thanksgiving Dinner on Thursday. Nancy: What if we did Thanksgiving on Friday? Sue: What? Nobody does Thanksgiving on Friday—that’s un-American! Anyway. Bill won the coin toss for this year. When that goal looked out of reach. but then I realized that the rest of you already go to your in-laws earlier in the day. we’ll come to Mom’s..Nancy: It just won’t be right without you guys. Nancy was able to accomplish the real goal of the negotiations—to make sure that the holiday would be celebrated with the whole family present. Sue: I don’t know. By being flexible. it’s okay with me if you can sell it to everyone else. either. I mean.m. There’s nothing “special” about Friday. some people have to work on the Friday after Thanksgiving. and it became the family’s new tradition. she suggested a unique alternative. I bet everyone could make it on Friday. Sue: Next year. Mom’s very upset. So that doesn’t work. but she won’t tell you. Nancy: I’ll let you know. 104 50 Practical Negotiation Tactics . Nancy: We’d make it special by all of us being together. I know that I would rather not do two Thanksgiving dinners on Thursday. Everyone in Sue’s family liked the idea of celebrating on the Friday after Thanksgiving. Thanksgiving is Thursday. Nancy: If we keep the time at 5:00 p. I thought of asking Mom if she could move dinner up to noon or so. Celebrating the next day seems odd. the holiday will be over.
Kids’ Home: That’s why we brought the foundation’s officials with us. Kids’ Home and the foundation have decided that a parcel of city-owned land would be ideal as a site for the new building.5 million is available for distribution to numerous charities. Kids’ Home is also hoping to get the city to encourage the foundation to commit to full funding of the building project. a non-profit organization for orphaned children.000 a year for operations. City officals: We can probably give you the land for free. Kids’ Home: As you know. They are meeting with the city to ask that the land be donated by the city for the project. and raise the money to pay it back? And can’t the foundation grant you money on an annual basis? Making Counteroffers (The “Give and Take”) 105 . Foundation officals: Oh. we hope to break ground early next year for the new orphan home. we’re committed in theory. but the principal of the fund can’t be touched. The foundation has a substantial endowment fund. Each year. Unfortunately (for Kids’ Home). We’re hoping to get a commitment from them to build and help fund the operations of a new facility. Kids’ Home hoped to get $500. but we can’t fund all of the $12 or $15 million. We only have maybe $2 million a year to put toward this charity.Example 2 Kids’ Home. the interest income of around $6. the foundation’s regular annual grants come to roughly half of their available funds. We need the city’s help by allowing us to get the city land donated to us (for free). had been negotiating with a foundation to become its major benefactor for a new building and to supplement the organization’s annual operating budget. Estimates for building a new orphan home ranged from $12–$15 million. but we need some assurance that you will be able to build and operate the orphan home at that location. depending on the cost of the land. City: Can’t you borrow the money from a bank to build the facility.
We’re a nonprofit group. and really taxes our ability to raise funds. Why not ask the state to issue no-interest bonds? It can do that for non-profit organizations. I’ll contact the state tomorrow.Kids’ Home: Borrowing the money gets very expensive. We probably would not be able to participate. We’re not familiar with that program. 106 50 Practical Negotiation Tactics . We’ve never committed our funds to pay back a bank loan. it could end up costing double that amount. Foundation: City: Foundation: Kids’ Home: Conclusion By exploring alternative financing plans suggested by the city. but we’re willing to look at it. We wouldn’t want to make such a commitment to a bank. 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. And “donations” aren’t a very safe collateral for any bank that wants to loan us money. The commitment by the foundation to make the annual bond payment debt backed by the foundation’s endowment fund should be sufficient collateral to get such bonds issued and purchased. If we borrowed $15 million at 10% interest.
Mr. it is not acceptable to lie. In order for a negotiation to be successful. and you probably won’t identify your throwaway items or tell your opponent your bottom-line. The Jones’ two younger children—boys in their mid-teens—hit baseballs into the Smiths’ yard and scared the Smiths’ dog. At the same time. you might not want to reveal all of your priorities at first. These parties could get rather loud. The Jones family suspected that the Smiths called the police. and often took up all the space along the street in front of the two houses. Before the Jones family moved into the neighborhood. Example 1 Soon after the Jones family moved in next door to the Smiths. and often lasted until 2:00 or 3:00 a. It is perfectly acceptable to say that you are not ready to reveal certain things. Making Counteroffers (The “Give and Take”) 107 . The Jones family let their tree branches hang over the Smiths’ back fence and rub against the Smiths’ garage roof. However. you should be careful not to misrepresent your position to such an extent that your opponent will feel that you have lied. 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. each side has to know generally what each other wants to accomplish. But the Jones clan had four cars altogether. and asked the officers to cite the Jones kids for parking too close to a corner. the Smiths could count on parking their car directly in front of their house. Successful negotiations depend on trust. Mr.Tactic 26: Keep Few Secrets One of the most difficult skills to master in a negotiation is how to be candid. yet not reveal all of your goals and objectives. Smith: We don’t know what you’re talking about. The Jones’ two older children—girls in their early 20’s—often had friends over on Friday and Saturday nights. the neighbors began to have problems. and trust can only be established if all parties interact truthfully. They asked to meet with the Smiths to talk about these disagreements. The Smiths called the police to complain about a late-night party.m.
Muffin. Mr. And the music is to be off at midnight. Jones: Well. since you’ve asked. At our age. we thought you might have called the police about our kids’ party and our cars. the next time the boys were out playing and the ball came into the Smiths’ yard. we’re good now? Mr. Smith: You know that your boys are causing our dog.Mr. yes. Smith: Yes. It is really very disturbing. So. Mr. they’re hitting baseballs into our yard. and was met with the following: Mr. Mr. Smith: Well. then they’ll need to come in at midnight so that their talking doesn’t disturb you. Mr. If you can tell us all the things that we have done or are doing that have caused you to be inconvenienced. Jones came to see what the problem was. (A week later. I’ll talk to the boys and we’ll make sure they play baseball in the park. we have a problem walking long distances in bad weather. Also. In spite of the Smiths’ assurances. and they won’t be having friends over more than one night a weekend from now on. they kept it. Mr. Smith: No. Jones: I wish you had mentioned that the last time we talked.) 108 50 Practical Negotiation Tactics . I guess. a lot of problems. fine. Jones: Okay. the Jones were visited by a city inspector because of a complaint from the Smiths about the tree branches hanging over the fence and brushing against the garage roof. and not in the back yard. And we’ll make sure none of our cars are parked in front of your house. the late-night parties are a problem. we would like to work out some solution. that wasn’t us. Smith: Well. if they are outside. Jones: We’ve already talked to the girls about the parties. Is that everything now? Mr. but we do know that someone has complained. In good weather. we’d like to be able to park our car in front of our house. Almost every day.
the British firm will walk away from the deal. The union knows that the company is up for sale. Union officials are afraid that a Japanese company might purchase it. but Neno cannot tell the union this. The British insist that a very strict confidentiality provision be part of the negotiating process. You obviously don’t want to be “good neighbors.Mr. Its local headquarters has a union to handle its international shipping. you’ve said that before. You could have seen that yourself. and the deal is close to being final. although none of the facilities outside the U. The Jones’ effort to sit down and negotiate the problems with the Smiths were thwarted by the Smiths’ reluctance to put all of their concerns on the table and their failure to admit that they were the ones who made the formal complaints. or the deal is off. Making Counteroffers (The “Give and Take”) 109 . Jones: Sure. Unless Neno can get the Union members back to work on Monday. Example 2 Neno Enterprises is a shipping company with extensive global operations.S. irate) I can’t believe you people called an inspector on us. Neno has been negotiating the sale of its business to a British company. have labor unions. Smith: Well. because they didn’t like a grievance decision. Why didn’t you tell us? We can’t read what’s on your mind! Mr.” Forget all we’ve agreed to do—we’ll just enjoy the use of our property. or European companies do. and too bad for you! Conclusion The disagreements and unpleasantness continued until the Smiths finally sold their house and moved into a condominium. We would have fixed the tree if you had asked.S. But we didn’t call the inspector. the tree was clearly over the fence. The union laborers walked off the job on Friday. Jones: (at the Smiths’ door. Neno’s president and the Union representative met to discuss the walkout. Japanese companies often do not “recognize” labor unions the same way U. Mr.
whether it’s for one weekend or a week. You really don’t want to do that. Anyone who buys the company will have to honor the contract we have. it will impact our marketability. You don’t want to mess up our negotiations. we will resolve it to your satisfaction by the end of the day. do you? Union: No. Neno: Look. I think it already has. this is a legal strike under the contract. Therefore. I promise you. then there’s probably no harm done. If that’s going to have a bad effect on your being able to sell the business. But we also need to make it clear that we expect you and whoever might buy your company to take our contract seriously. I’m certain that if we can sit down and talk next week. We can’t put up with the kind of decision we got on our grievance. Neno: All I’m saying is that there is a difference. so the union won’t be hurt by the buyout. If everyone is back on Monday. I’ll forget all about the strike. And one company that is interested has a really good track record on expanding the businesses they buy. We’ll meet with all of the parties on the grievance first thing Monday. is still a labor shutdown. But if your guys are out past Sunday. Have the guys back on Monday. It’s not the time to have one. we don’t. We’ve not had a labor shutdown in 20 years. Our guys are prepared to stay out a lot longer than Monday. Neno: Look. If they do come back. the slowdown as a result of no one working Saturday and Sunday won’t be noticeable. no harm-no foul. I can’t really be more explicit than that at this time. I know it’s not news to you that this business is up for sale. any interruption in our shipping could affect how these buyers look at our business. Union: We think that the grievance decision affects our wages. Union: What aren’t you telling me? A labor shutdown. I need your guys to come back to work on Monday. But I have to have everyone back on Monday. 110 50 Practical Negotiation Tactics . maybe by next Friday or the week after that we’ll have our guys back to work. and if the guys are back on Monday.Neno: You know this is a wildcat strike and that it is in violation of our contract.
I would be more specific. If I could. the union was willing to trust Neno—even though he couldn’t tell them everything. But I can’t. Union: Okay. I can. the sale was finalized. was the right decision to make. Neno called the union negotiator in and briefed him on the sale. but the British firm will allow them to organize at their foreign locations. Making Counteroffers (The “Give and Take”) 111 . Because the parties had dealt honestly with each other in the past. But I need to tell my guys that this is important to them as well. rather than make up reasons. He told him that it would mean that the union would not only keep its jobs here. Union: Okay. Can you assure me of that? Neno: Yes.Union: It’s that important to you? Neno: Yes. we’ll be back to work on Monday. and it’s that important to you as well. while the grievance was being resolved. as well. Conclusion On Monday. Neno’s decision to respect his confidentiality agreement and simply tell the union that he couldn’t disclose all the information. I’m going to go along with you because you’ve always dealt straight with me.
Tactic 27: Expand the Pie
In some negotiation situations, agreement can be reached by increasing the total pool of resources available to all the parties involved. While this is not practical in every situation, a relatively minor increase in the resources available might allow both parties to reach a solution. Resources should be as broadly defined as possible—money, people, time, etc.—when considering how a “fixed pie” might be expanded.
Alexis, age 7, did not want to practice her violin for an hour today, but she promised her parents that she would practice an hour each day if they bought her the instrument. She really wants to visit her friend Michelle and spend the night.
Mother: Alexis, our agreement was one hour a day, every day! Alexis: I know, but if I’m going to play with Michelle, I’ve got to go with her now! She only has two hours before her game and then her mother is taking us shopping. Mother: That’s too bad. Alexis: Can’t I miss one day? Mother: No, you promised to practice every day to learn to play. Alexis: Could I practice two hours tomorrow when I get home? Mother: One in the morning and one at night? Alexis: Yeah. That would be easy. And I would still get in three hours of practice this weekend. Mother: Okay. Then you can go with Michele.
Alexis’s proposal expanded the resource of time to find a solution, and her mother agreed to it because her objective (for her daughter to get in enough practice time) was met.
50 Practical Negotiation Tactics
Supervisor: Peggy and Kim, you’ve both had a great sales month and you both earned that trip to Hawaii, according to the promotion program. The cost to send both of you and your spouses exceeds the budget by $1,200, however, so we’ll need to negotiate something. Peggy: Like what? Supervisor: Well … I could send one couple this year and the other next year, since I’ll have a new travel budget by then. Kim: That doesn’t seem fair. We both earned it this year, and we want to take it this summer! Peggy: That’s right! Supervisor: I’m sorry. We never expected to have six people qualify for the trip this year, and the budget is simply not large enough. Peggy: Well, that is your problem. What other ideas do you have? Supervisor: You can each pay half the cost of the flights. Kim: Why should we pay for part of a bonus we earned? Supervisor: Let me talk to the department head about this … (The next day) Supervisor: I spoke with the department head, who explained that if we keep spending the office-supply budget at the current rate, there should be enough left over for me to transfer some money to the travel account to cover the trip for you and your spouses. Will you both help me control supply expenses? Kim: Sure we will, and thank you for finding a solution so we can all go on the trip! Peggy: Yes, we can keep supply expenses down. Thanks for thinking creatively.
Making Counteroffers (The “Give and Take”)
The supervisor in this situation quickly recognized that no negotiated settlement would satisfy Kim and Peggy. Their morale was important to her, so she sought to “expand the pie.” She did so without increasing the total annual budget, which was why the department head agreed to the one-time budget transfer.
50 Practical Negotiation Tactics
Tactic 28: Offer Fixed Alternatives
You might be more successful if you present several alternative positions to the other side. One party can present to the second party two or more proposals of equal value to the first party. This gives the second party the option of choosing one of the multiple offers. The second party is more likely to respond positively to this strategy because (1) people generally prefer having more choices; (2) one of the offers might be of greater perceived value to the second party; and (3) most people prefer to have input into a decision—even if it’s only choosing one proposal out of two.
Colleen’s fifteen year-old daughter hates cleaning her room. She usually lets it get quite messy, like most teenagers. On Friday afternoon, the following negotiation takes place when Amber arrives home from school: Colleen: Amber, you must clean up your room. We are having an open house on Sunday, and the house will never sell with your room like it is now! Amber: Oh, Mom … Tonight’s the big sleepover at Chelsea’s house and tomorrow (Saturday) I have a basketball game. Colleen: Amber, I’ve been telling you for three days to clean your room! This is it! You are not leaving this house until it’s clean. Amber: That’s not fair! Last Saturday, you said I could go to Chelsea’s sleepover! Colleen: That was before you kept putting off cleaning your room. Amber: All my friends are going … (pause) Colleen: Okay, Amber, here are your choices: One. Clean your room right now and I’ll take you to her house after you finish. Two. Come home tomor-
Making Counteroffers (The “Give and Take”)
I can accept B. she chose the one she most preferred. but I will cut your staff by one part-time person (or $15.000). I’ll approve $15. I’ll find a way to do without one part-time person.000 for advertising. but the company president does not share your optimism on this program.000 budget! I need at least $20. I can’t help. Felipe: Well. Roberto: Well. I have three hours. Use the $5. or C. Roberto: But it will never generate enough interest if no one knows about it. or we lose a whole year. I’ll approve $15.000.Amber: row before your basketball game.000 in the budget. Take it or leave it. I’ll do it now. At least this way the program will have a chance to succeed! 116 50 Practical Negotiation Tactics . Felipe: Sorry. B. Amber resisted the chore she hated. Felipe: (Roberto’s supervisor) Sorry. Example 2 Roberto: I can’t properly advertise this new program with a $5. and clean it. but I will cut your travel budget out completely.000 for advertising. Clean it after your game. Three. but no TV or anything until it’s done! (pause) Okay. Conclusion At first. keeping her Saturday free. that is enough time. I’m not going back to him again to discuss this program. (long pause) Felipe: Let me give you three options: A. Roberto: But I need to start the direct mail and newspaper ads within two weeks. But when her mother laid out the schedule and gave her alternatives.
One alternative. would enable him to adequately promote the program. Making Counteroffers (The “Give and Take”) 117 . Roberto believed. thus achieving his goal of not having to ask for a larger budget.” He offered Roberto three alternatives of equal cost.Conclusion Felipe was willing to think “outside the box. which was his goal.
Here’s how the negotiations went. Jones. It was 16% less than she had been led to believe she would be getting. but one side comes back with a non-negotiable demand. Susan: Mr. inviting a response. Susan knew that she was considered a valued employee and that her boss would want to do the best he could for her. he can make an open-ended statement. You know my commitment to this company. I think you would agree with me that I have performed well above expectations this past year. Jones: I certainly do. But she also knew he would have to be willing to go to bat for her with his superiors if she was to get her advancement. The negotiator for the other side says nothing. Unfortunately. Example 1 Susan. and the annual merit raise she was getting from the company was the same 3% other employees were receiving. you are a valued employee. and 118 50 Practical Negotiation Tactics . I very much appreciated the fair job performance review you gave me. received a glowing report from her boss on her job performance. I have to tell you that while I appreciate what you have done for me. After a few minutes of silence. This should have resulted in an automatic promotion and a sizable pay increase. If his opponent cannot agree to the demand but does not want to end the negotiations. one of the wisest things you can do is to keep silent—particularly when the parties have met several times and identified many areas of agreement. I am very disappointed in the company’s decision not to promote me and to limit my merit increase to 3%. Susan: I hope so. the negotiator who feels the most uncomfortable with the silence will fill the gap and most likely make a concession in order to get the other party to speak. nearing her third year with the company. the promotion had not yet been approved. She was determined to hold her ground for at least a 13% pay increase and a promotion.Tactic 29: Prolonged Silence When negotiations have hit a critical stage.
Making Counteroffers (The “Give and Take”) 119 . the company’s refusal to grant them now was a harder position to support. but a pay increase of that size might be more difficult. (says nothing) Or. if management can see their way to giving you the pay increase now.or three-year period. and sell it to management that way.Jones: Susan: Jones: Susan: Jones: Susan: Jones: Susan: Jones: that I deserve more consideration. but I don’t think management will be willing to give you an additional 10% pay raise AND a promotion. because I feel my future with the company might be at stake here. of course I will be glad to do that. Once he acknowledged that both items might be awarded sometime in the future. I suppose I could get the promotion approved with the proper presentation. I would very much appreciate it if you could ask the company to reconsider. Well. Conclusion Mr. Jones to continue to offer solutions. Okay? (says nothing) Let me check it out and I’ll get back to you. Jones went to management and convinced them that they should give Susan the promotion and the 13% raise. I could probably find a way to phase it in over a two. I must ask you to try to get both. If there is some flexibility in your request. and I think that I really haven’t been dealt with fairly. (says nothing) If I can’t get that pay increase approved right now. it could help. and I’m sure management will agree. Susan’s silence prompted Mr. maybe we can talk about the promotion later in the year. I really want you to stay with the company. Promotions of this type are all but automatic around here.
Town Council Chair’s representative believed that the ability to expand on the agreement was critically wounded by the uncertainty as to which office the mayor might seek. Town Council Chair). Also. I think you’ll agree with me that the announcement your boss made about maybe running for Town Council Chair has dealt our negotiations to expand the agreement a fatal blow. Town Council Representative: I think you’re wrong. her plans really don’t have any bearing on these negotiations. has colored these negotiations. and representatives of the elected officials of the two towns were meeting to renew and possibly expand the agreement. He decided to push for a simple renewal of the original terms. Mr. Mayor) said that she was considering running for office. and were trying to settle on new and expanded areas when one of the elected officials (Ms. She has not decided what she’s running for. The mayor’s negotiating representative wanted to complete the negotiations on the expanded agreement. by saying that she might run for Chair. The office she was thinking about was the office held by her counterpart in the neighboring community (Mr. the people Madame Mayor currently 120 50 Practical Negotiation Tactics . Mayor’s representative: No. and until she does. The term of the original agreement was nearing its end. but the officials had hoped to complete the negotiations prior to anyone involved announcing for office. but now they’ve got to ask what Madame Mayor’s motivations are. I don’t think it’s a problem. The mayor. The parties agreed to continue the previous terms of the agreement. My bosses might not have been inclined to expand the agreement anyway. This is how the negotiations went: Town Council Representative: Well. The end of the agreement coincided with the election cycle for the two towns.Example 2 Two local governments entered into a tax-sharing arrangement in order to provide joint services to citizens in a more efficient manner.
and the agreement was renewed with no new provisions. I’ll go back and tell Madame Mayor your position. I don’t know what her reaction will be. Town Council Representative: (silence) Mayor’s representative: I would think that at least the proposals that don’t involve budget changes could be pursued. Town Council Representative: (silence) Mayor’s representative: I think it would look very bad for both of us if we spent all of this time negotiating and we don’t end up with anything new. Making Counteroffers (The “Give and Take”) 121 . I hate not to attempt to add some additional areas to the agreement. Conclusion By remaining silent. the Town Council’s representative left the mayor’s representative with no room to maneuver. In the end. I think we really have to drop back and just propose a renewal of the tax sharing agreement without adding any new items.represents have to worry that her desire to switch governments might taint the negotiations. the Town Council representative’s position prevailed. Mayor’s representative: Well. He either had to end the session or figure out what to say to reengage the other side. Town Council Representative: (long silence) Mayor’s representative: (after an uncomfortably long silence) Well.
You are more likely to be successful if you identify a range of options that fall within your comfort zone than if you have a fixed bottom line with little wiggle room. The brook 122 50 Practical Negotiation Tactics . the brook and rock barrier are on my property. She went to discuss this problem with the upstream neighbor and had every intention of demanding that the barrier be removed immediately. Your rock barrier has sent the brook onto my property and it is too close to my gazebo. Madeline: Hi. As was sometimes the case in these parts.” Avoid making that “necessary concession” too narrow: It should be large enough for both of you to step into comfortably. Joe. “I have to have this. which an upstream neighbor had built. had redirected the brook further into her property. the brook was the property line separating her property from a neighboring farm. Neighbor: Well. after the gazebo had been there for about five months.Tactic 30: Always Leave Room for Dessert Negotiating is the art of give-and-take. It calls for compromise. Madeline. One day. she noticed that the brook came within 100 yards of it. in a small clearing. She traced the brook back along its course to see why and where it had changed its path. Madeline built a gazebo about 500 yards from the brook. The property came with three acres of forest alongside a meandering brook. She discovered that a rock barrier. and began to renovate it as a home and a pottery shop. This range for maneuvering is not the same thing as the list of items you make at the outset—it’s the last space separating you and your opponent. I have a problem. or we will be at an impasse. You will have to remove the rock barrier. Example 1 Madeline bought an old farmhouse outside of a small town. Obviously. you should always enter the talks with a good idea of what you are willing to agree to. when one of you might say. The reason I built it was so that I could protect my patio. Having an iron-clad demand probably won’t give you enough room to reach an agreement.
When she found out that this was not going to solve her neighbor’s problem. By expanding the range of options available to resolve the dispute. Neighbor: I can do both of these things. Also. at least I’ve maintained my property line. which enabled her to achieve her goals. restore her property line. I couldn’t have that.extended right up to my back door when the rain was heavy. Then. Neighbor: I’m sorry. What if you removed the barrier for a short time. She left room for a compromise. This will put these houses right next to me. you have not only threatened my gazebo. she widened her range of options. and allow the neighbor to protect his home. I won’t remove the rock barrier. and return everything as it was. Madeline: Yes. Madeline was able to protect her gazebo. Madeline: Well. Madeline: But by diverting the brook. I ask that you allow an expert to suggest the best way to provide for the diversion of the brook to protect your house and my patio. I’ve lost 400 yards of property on my three acres. but only if I have a clear understanding with you that the barrier will be rebuilt to protect my house. and allowed me to have a survey done so that my deed can be corrected to describe the “existing brook” boundary line by other landmarks. It might not be necessary to make such a dramatic change. if the brook is redirected. Making Counteroffers (The “Give and Take”) 123 . but I don’t know what I can do about it. what I need is to protect my property line and my gazebo. I can’t have the brook in my house. but you’ve changed the boundary line of my property. Conclusion Madeline’s objective when she met with her neighbor was simple: Have the rock barrier removed. My neighbor on the adjacent farm wants to sell part of his property for a housing development. I understand that.
the airline paid a total of $200.000. The pilots want dependent coverage paid for by the company. But only a few of our people are close to retirement age.000.000. The airline industry is in a slump. If we invest the $200. 124 50 Practical Negotiation Tactics . Everyone was afraid that the dispute would cause an impasse and a possible strike.000. And we cannot afford that $1. and the premiums for health care just keep going up.Example 2 The contract negotiations between the pilots and the airline had been going pretty well.000 figure. Over the next five years. This is just a cash-flow problem that your members have to understand. This would be a better benefit in the long run. dependent coverage could cost us $1. you are taking a risk on the costs increasing. However. and we know that with this new contract term of five years. the discussions of the employee benefits package bogged down on the issue of health insurance costs and pension benefits. Pilots: Look.000. the company can make your pensions much better.000 to cover the premiums for dependent coverage. The projections for the next five years were that these costs would increase to about $1. Company: This could not come at a worst time for us. As best as we can tell.000. Over the last five years. then the pension benefits overall will increase by $10. Pilots: So you are projecting that the increase in dependent coverage premiums will average $200. With long-term planning and investments. what they really need is for you to cover the costs of dependent coverage. The company wants to trade paying for dependent coverage for better pension benefits. as it has always been. and are willing to keep pension benefits the same. with all wage and operations issues resolved fairly early.000 a year over the next five years? Company: Yes.000. we know that health insurance premiums might skyrocket.000 (which we reasonably should have expected to pay in premiums) in the pension account now. that would be the minimum increase.
by agreeing to let the company cap its exposure for dependent health coverage.000? Once the cap is met.000 actually carried them through four years. The health insurance market stabilized. and the pilots knew what to ask for when the contract expired. The pilots expanded the range of options. if they were that high. we are. however. Company: Then it’s okay with us. The dependent coverage is more important to us now than the pension benefits. can we agree to a year-to-year agreement on dependent coverage.Pilots: But you do have the $200. with a cap of $200. It initially believed that the only option was to put that money into pension benefits. that would be worth it. so the decision to be flexible was a good one. The $200. Conclusion The company was committed to limiting its exposure to $200. Pilots: Since the concern is about agreeing to a 5-year commitment without knowing the increases we might have in health insurance costs.000. If we can get two or even three years out of the $200.000 available. Are you willing to risk not having an opportunity to increase pension benefits? Pilots: Yes. Company: If the company spends the $200. Making Counteroffers (The “Give and Take”) 125 .000 to either pay one year of the premiums. or invest in the pension plan? Company: Yes. then those funds will not be available to invest in the pension plan.000 the first year on the premiums. the company will not be expected to give us this benefit.
I guess it would be around $600 per month. if I can give you this car with a $300 monthly payment. Buyer: Way too much! Saleswoman: Well.500! Saleswoman: Yes. $45.000 car. do you want to look at something else? Buyer: No. what monthly payment did you have in mind? Buyer: More like $300 per month.” Salesmen use this standard tactic with “big ticket” items: They present the total cost in small enough pieces to sound reasonable to the other party. be sure to add up the total cost.” “affordable weekly payments.Tactic 31: Cut Salami Slices One way to overcome anticipated or exhibited resistance to a proposed cost is to cut it into smaller units or “slices of salami.000 for a Volvo? I bought the one I’m driving for $19. but that was several years ago. Saleswoman: I’ll be right back. Buyer: Yes. Example 1 Car buyer: What. I recall the day you drove it out of here.” and “low monthly rates” are examples of the salami tactic. I just can’t imagine the monthly payment on a $45. Saleswoman: With your 740 in trade. Phrases such as “for only pennies a day. but the Consumer Price Index has not gone up 150%—nor has my paycheck! Saleswoman: So.… (20 minutes later) Saleswoman: So. and compare it to your strategic objective. I love this car. If you are on the receiving end of such a tactic. it’s a deal? 126 50 Practical Negotiation Tactics .
Saleswoman: Simple. can’t you? Buyer: Yes. do you want Disney? Yes. Once the buyer volunteered that $300 was an affordable “slice. Sure. do you want HBO? How much? $5. Making Counteroffers (The “Give and Take”) 127 . down payment.00 per month.000 down and $300 a month! Conclusion The saleswoman knew the buyer was suffering from “sticker shock. You can do that. and payout slices to reach the total price she wanted. with your car and $6. but what else must I buy? Only the basic service for $8. as promised.Buyer: I don’t see how you can do that.00 per month.000 down. you can get the Disney channel for only $5. Instead of a three-year lease. Great! So. But my neighbor pays $39. I can’t afford that much.00 per month for your service. (looks at the numbers) That looks good.99 per month. and added the trade-in.” she had him—she worked around the $300 slices. it will be a five-year lease. I can afford $6. I can’t discuss another client’s account.” She decided to cut the $45. but let me see the numbers. Example 2 Cable representative: Owner: Cable representative: Owner: Cable representative: Owner: Cable representative: Owner: Cable representative: Owner: Yes. Let’s see.000 price into “slices” the buyer thought reasonable.
2? How much? $8. they asked about the Cartoon Network. What about the music package? Yes. and probably felt much better about the total negotiated package because it was presented in modest individual slices. That’s another $5. That’s $5. but he agreed to six “salami slices” for a total of $38. Okay.00 per month.00.99 per month.00 a month. Great. we had that before. I really want the sports channels.00! Why? Because he judged the per-slice price to be reasonable. Disney is for the kids! The sports channels are for me.00 per month was far too much. Yeah. instead of one total amount. Any other kids’ channels? Yes. 2. and my wife wants the old movies. 128 50 Practical Negotiation Tactics . Thanks. But that’s all! Then we’ll hook you up on Monday.Cable representative: Owner: Cable representative: Owner: Cable representative: Owner: Cable representative: Owner: Cable representative: Owner: Cable representative: Owner: The Sports Combo–ESPN 1. The total is $38. Conclusion The owner thought his neighbor’s service at $39. 3. and SI 1.
“I can only guarantee this price until 6:00 p.m. and the use of humor. It should be used with caution: It can end negotiations immediately. but in tense. Some less-obvious and more easily accepted pressure tactics are to use visuals to control the negotiation talks by focusing discussion on subjects that favor your side (Tactic # 34). When both sides believe that each has equally strong positions. the traditional car salesperson might tell the buyer. today.Stage 5: Applying Pressure P ressure tactics are generally used in situations where one side firmly believes that it holds the upper hand or simply convinces the other side that it does. For example. Tactic #33 (The Bluff) is a classic pressure tactic. Humor might not look like pressure. Tactic #35 (Applying Excessive Pressure) is a similar tactic that should also be used with caution. however. it is effective. which can be successful if the opposing team has two or more members who hold different views of an issue. an unexpected element of humor can break the tension and encourage a person to calmly get back to the issues. Other less-obvious pressure tactics include Tactic #37 (Divide and Conquer). and it can destroy your credibility. 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. angry negotiations. but others will walk out the door. turned off by the tactic. Tactic #36 (The Element of Surprise) can catch an opponent off-guard and cause stalled negotiations to move forward. Applying Pressure 129 . so are you ready to make a deal? This might convince a few buyers. pressure tactics should probably be avoided. but it can be used effectively when one party clearly has an edge. In some cases.
and they will weaken your credibility. The two couples used the sailboat a lot the first couple of years. and we need to talk to you about how we can buy you guys out. And we don’t want to be unfair. When Lacey found out that his employer was transferring him to another city farther down the coast. but it is not a good idea to exaggerate what you are offering or what you are giving up. big news! I’ve been promoted. I think Chloe and I would be willing to pay more than just the money you guys put into it. boat prices have really gone up. Abby really loves that boat. in fact. Such exaggerations are easily revealed or uncovered. he and Chloe wanted to buy out Don’s and Abby’s interest. We’d hate to give it up. In the last couple of years. Lacey: Don. 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. Don: Wow. Lacey: I know. and we’ll be moving south in the next month or so. Example 1 Don and Abby went in on the purchase of a sailboat with their friends Lacey and Chloe. but Don. Lacey and Chloe didn’t know that Don and Abby were. Lacey. getting a divorce and each moving away (and would have no more use for the sailboat). Don and Abby now use it less and less. Although I do think there ought to be some consideration for the two years you had use of the boat.Tactic 32: Don’t Exaggerate It’s always acceptable in negotiations to put your best case forward and present your position vigorously. Chloe and I would like to take the sailboat with us. Don: Absolutely. Your opponent will consider you untrustworthy and might even be insulted by your attitude. together and separately. It 130 50 Practical Negotiation Tactics . I don’t know. I can’t tell you how many times Abby has said how happy she is that we have the sailboat.
which you would have to share if you want to retain half-ownership. Abby: That boat. Abby: Well. I’ll be glad never to see it again. I have big news too. I was afraid something was going on when you all-butstopped joining us on the boat. Lacey: Cut it out. Abby is having this conversation with Chloe) Chloe: Abby. Abby told Chloe about the divorce and about how she never wants to see the boat again. but separately. and we’re moving farther south. Lacey and Don’s negotiations changed considerably. I’m sorry. We’ll be leaving here for the Midwest. big news!! Don got his promotion. I’ve been thinking. (After Lacey and Chloe had a chance to talk. Conclusion Don got a lot less than he could have from Lacey because he found out that Don exaggerated the importance of giving up the boat. Don. It’s about time now for some major investment.is just about the most important thing we own. Chloe: Oh. he likely would have found himself in a stronger negotiating position. and neither of us put much in for upkeep. Don: Lacey. Applying Pressure 131 . I’m surprised by your attitude. If Don had not exaggerated the importance of the boat and dealt with Lacey honestly. Don and I are getting a divorce. though it’s not so happy. It just reminds me of how happy Don and I used to be. After all. I think it would be fair to pay you and Abby half of what you originally put into the boat for your 50% share. the boat has depreciated. Let me talk to her.) Lacey: Don. and I’ll get back to you. (Around the same time. I thought you understood how important this boat is to Abby.
And while these fluctuations have little to do with the health of the company itself. they will make their decision based on a review of the stock price that day. but this has been such a crazy situation. When I go to the bank for the Letter of Credit to keep our cash flow uniform while we switch from one type of production line to the other. I can’t see how today’s numbers really impact the long-term profitability of this company. I read in the papers every day that the market is still strong. in fact. I’ll have to show them 132 50 Practical Negotiation Tactics . we will need to make drastic cuts in our operating costs just to survive. Here’s how these negotiations went: Company president: Well. Telling me there’ll be no wage increase and asking for wage concessions now is a little premature. And as you know. the company president decided to use the stock price as a negotiating tool during the current union contract talks. the situation in the stock market is not good. and that the economy is strong. I think you’ll have to agree with me that wage increases in this next contract will not be available. I’ll be going back to them as soon as next week. in this global market. I’m telling you the stock price is having a huge impact on us already. I’m afraid that with this current information. The current stock price is the lowest it has ever been. Union negotiator: The stock price might be down right now.Example 2 Aimes Manufacturing had experienced major ups and downs in the price of its stock for the last two years. Company president: Well. our production line changes at least three times a year. I’ll be looking to you to make some major wage concessions on this upcoming contract.
When the market took a swing up during the negotiations. no concessions! In fact. Give me your proposal for wage concessions. this week’s price would have little or no effect on your ability to get a Letter of Credit from the bank. Company president: What? I thought you understood that it is essential that we get concessions on this if we want to stay afloat. When negotiations resumed.) Union negotiator: I’m sorry. here’s what happened. (In the interim.that we’ve cut expenses to counter the losses in the stock market. but your proposal to cut wages is just not going to fly. We think this company is very healthy and can withstand the temporary downturn. and the union ended up with a substantial increase in their contract. let’s talk about it. and I’ll have our people look at it. Applying Pressure 133 . we’d like to reopen talks on next year’s pay increase. They told union officials that it would be very rare for a bank to make its decision solely on stock price. Company president: All right. he lost the trust of the union. the union checked into the Letter of Credit transaction with some experts in banking. Conclusion Because the company’s president over-emphasized the impact of the market on the company. Union negotiator: Well. but I checked it out and it’s not totally true. okay. they would do a thorough analysis and look at the health of the company over the long haul. Union negotiator: I know that’s what you told me. If the stock goes up next week. So. the company’s position was weakened even more. Let’s get back together next week. If you put it that way. The union became hardened in its position that the employees needed wage increases in the new contract.
either. I really hate it that you chose to see the movie with Charlene. but I really am. it might backfire. Charlene. Christy thought that their relationship was exclusive: She hadn’t gone out with anyone else. The couple had not discussed marriage. and I really wanted to see the new Lenny Bruce movie. you will have lost credibility with your opponent. You’re not upset about that. Christy was surprised and hurt when a friend of hers mentioned that she had seen Tom at the movies with his former girlfriend. Both of them were still in graduate school and worked full-time. Tom: Oh. I knew you had a class. We don’t have that much free time together. There is a chance that the tactic will work and that both sides will agree to the proposal on the table. 134 50 Practical Negotiation Tactics . yeah. Poker players know all-too-well-that bluffing can be very costly. If you subsequently agree to begin talks again. and they really have no intentions of doing so. Sara said she saw you at the movies with Charlene yesterday. I guess I’m just surprised. but Christy thought the relationship was heading in that direction. I called Charlene and she was available. and she didn’t think Tom had. Here’s how the discussion went: Christy: Tom. but you always run the risk of having the opposing party call your bluff and end the negotiations without reaching agreement. so their “free” time was very limited. This can come back to haunt you. Example 1 Christy and Tom had been dating for about a year. are you? Christy: I don’t want to be. She knew that if she made such a demand and threatened to leave him unless he made a commitment. Christy realized that asking for a commitment from Tom at this stage would be a very serious discussion. they are bluffing.Tactic 33: Bluff! Bluff with caution. If one party threatens to walk out of the negotiations if a demand isn’t agreed to.
Since he wasn’t sure about that. I’m willing to risk losing you. She convinced Tom that her feelings were strong. Christy would have had to decide whether or not she was indeed bluffing or if she would really end their relationship. Tom: Okay. then I’m afraid I want us to stop seeing each other. Example 2 Nexon and its union had been negotiating a new contract for the past couple of weeks. If that’s not possible. Tom: You’re serious? It’s that important to you? Christy: Yes. and at first he thought she might bluffing. if you can’t make that kind of commitment. she paid her own way. Applying Pressure 135 .Tom: She’s a friend who happens to be a girl. Christy: What I’m saying is that I can’t accept that you are going out with a “friend” who is a woman—not at this stage of our relationship. I certainly don’t want to lose you. Going to a movie with one of them to me is the same as going to the movies with one of my male buddies. Christy: I just can’t see it that way. It is. but very little progress had been made. Actually. I won’t go out with any woman friend. I just thought of her because I knew you weren’t available. Conclusion Tom didn’t want to lose Christy. It’s made me realize that I want us to have an exclusive relationship. Tom: I have friends of long standing who are women. so he didn’t call her bluff. It really wasn’t a “date”—we just saw the same movie together. he had to make a commitment or risk losing her. The union negotiators. I’m not “dating” anyone else. He believed she was sincere. If Tom had “called” Christy’s bluff. I need to have your commitment that you won’t do that.
then all of our other demands will change. We’re not going to reach agreement on this at all. but the company cannot offer the same benefits to the parttime workers as it offers to the full-time workers. Nexon: I’m just not prepared to give you one. we’re really prepared to go the distance on this benefits issue. or else we’ll be asking the membership to strike. Second.believing that Nexon would not risk a strike. Nexon: We’ve got lots of issues to discuss. decided to threaten to walk out of the negotiations and have the membership vote on a strike unless Nexon made some concessions at the next meeting. We need an answer today. And I don’t believe you’re going to go call for a strike over this. First. The union members ended up voting not to strike at this time. Nexon negotiators did not believe that the workers would actually strike this early in the negotiations. Another bargaining session was scheduled. Union: You don’t seem to understand. This is a critical issue to us. Nexon: I’m sorry.) 136 50 Practical Negotiation Tactics . This is something we just have to have. and try and reach agreement on the cost-of-living increase you’re proposing? Union: No. Why don’t we put this one aside for now. If we’re not able to reach agreement on this. it will cost too much. Here is what happened at the next negotiations session: Nexon: I’m sorry. but working without benefits is simply not acceptable. (The union negotiating team left the bargaining session and called for an emergency meeting with all union members. We need some agreement on this today. Many of our union members who are working part-time hope to work full-time. we want the part-time workers to apply for and fill fulltime positions as they become available. much less today. Union: You’re wrong.
Union: Okay, we’ve decided to put aside the part-time benefits issue for now. We’d like to discuss the cost-of-living request today. We’re looking for a 5% increase for all employees—full-time and part-time. Nexon: I’m afraid that a 5% increase is out of the question. Inflation has been very low this year, and we’ve certainly not increased our prices by 5%. We’re only in a position to offer a 2% increase, and we believe your membership will accept that. Union: 2%?? Are you crazy? Our people will never accept that!! They’d sooner strike!! Nexon: Fine. Ask for another strike vote and get back to me. Union: Wait, wait. Let’s be reasonable.
Negotiators for the company knew the threat of a strike was only a bluff, because the union did not have member backing. When they tried to bluff the first time and failed to convince the members to strike, their ability to successfully bluff again was lost. They had a very difficult time in the subsequent negotiations, because Nexon was able to call their bluff numerous times.
Tactic 34: Control the Forum with Visuals
Some tried-and-true strategies used for meetings and presentations can also be effective during negotiations—particularly those that help you get your points across to the other party. Even the best negotiators have trouble keeping a discussion focused, which is why they make good use of visual aids. In many situations, including negotiation sessions, a person or team is trying to communicate ideas and persuade others to accept their position. Maintaining control of a lengthy discussion and keeping everyone focused on one’s presentation is often difficult, but it is critical to successful communication and persuasion. This control of the “forum” or general discussion, if attempted solely by dialogue or handouts, can be difficult for the best negotiators. Thus, a tactic that will help keep the discussion focused on one’s arguments and presentation can be extremely helpful. An easel and flipchart, a chalkboard, or a PowerPoint presentation can be very effective in controlling a forum. By only showing one part of a presentation at a time, you can focus everybody’s attention on one page of a flipchart or one slide (or even just one line of text). People won’t be able to flip through pages or discuss other parts of a handout (this often occurs when the entire proposal is given out at the start of a session), and the presenter won’t lose the audience’s attention. It is also more difficult for people to go back to earlier parts of the presentation, because the text no longer appears on the screen or flipchart. A negotiator who presents new proposals or information with well-developed visuals can more easily control the forum or focus of the group discussion.
Dinnertime at the Gronefeld house was usually loud and chaotic. The parents and six children had dinner together most evenings, but it was understandably hectic; multiple conversations were going on at the same time. One night, Aime (age fourteen) tried to present an argument about allowances and the division of chores among the children. Constant interruptions from other children and a general inability of all eight people to follow one dialogue simply caused her to give up her
50 Practical Negotiation Tactics
idea. The next night, however, Aime came prepared with a piece of construction paper and a gavel she had removed from a plaque in her father’s office. On the construction paper were three columns: Person; Chores; Allowance. The written specifics were covered up with pieces of construction paper. After everyone took their seats at the dinner table, she banged the table with the gavel until all were silent. “I have a proposal for a new division of chores and new allowances,” she began. “Please let me explain this one person at a time, so we can agree on that person’s chores and allowance, and then move on to the next person.” Aime now had everyone’s full attention, because they were curious about what was covered up on the chart. Aime had sucessfully focused everyones attention on her chart. The parents, impressed by her work and specific proposals, agreed to her suggestions with only one change. Person Chores Allowance
Aime realized that she would never achieve her goal unless she could command everyone’s attention and focus the dinner-table talk on her concerns. She was able to control the dinner forum with a gavel and a chart. The key to her success was that she unveiled only one line at a time, thus focusing the discussion and reaching agreement on each child. This stopped the confusion.
A committee of three members of a governing board of twelve people is responsible for developing and presenting the annual budget recommendation for
the organization. A majority of the board members must vote for the proposed budget for it to become effective. Past committee meetings dealing with the proposed budget have been chaotic, long, and usually heated. The typical format for the meeting is for the chair to hand out a copy of the entire proposed budget at the start of the meeting, quickly provide an overview, field questions, and then try to negotiate for the seven needed votes for passage. Steve, one of the budget committee members, has decided to try a new approach: focusing discussion on one budget at a time to prevent people from discussing several items at once. Steve: Ladies and gentlemen, to help us review this budget proposal in an organized fashion, I have outlined it on the pages of this flipchart. Each section of the budget appears on a single page. I’ll go through it one page at a time. Please ask questions only on that section or page. This will keep all of us discussing the same budget issue. Agreed? Board chair: Does everyone agree to this proposed budget-review process? All in favor say agree, opposed no. Seeing no opposition, it passes. Steve: Let’s begin with the capital budget for the Fifth Ward … Allan: Steve, I have a question about this year’s budget for health insurance … Steve: That’s Section 7 on page 7 of the flipchart. Allan, please hold your question until we get there. We will review and discuss all of these items one at a time, in the order they appear on the chart.
Although several sections of the budget proposal sparked spirited debate, Steve was able to control the discussion and focus the meeting on one issue at a time by effectively using a visual aid. The meeting was much shorter, more productive, and less acrimonious than in prior years.
50 Practical Negotiation Tactics
while the other is not—that is. for example. It’s easy to prediet the outcome in collective bargaining talks if one side is clearly in a very favorable position. when one side has “leverage” over the other. the guy was in no position to dicker over the price of the repair. They are more flexible on price and service when they know the consumer is not under any pressure to buy the service being offered. If the employer is a shipping and express mail company.Tactic 35: Apply Pressure (when you have the leverage) Analyzing a situation and applying pressure in order to achieve your goals when you have leverage over the other party is a commonly used tactic in negotiations. his air-conditioning unit went out. there were times when there was no pressure and no emergency. Since the heating and air conditioning company held no leverage over him. Since his toilet had overflowed and water was continuing to run all over the floor. he was able to successfully bargain for other services. Try bargaining with a plumber! This homeowner. Example 2 Let’s face it: Sometimes one party holds all the cards. its union has the advantage in the weeks just before Christmas. Many companies sell “tune ups” and routine seasonal checks to keep their people busy all year. Unions can strike at any time to achieve their goals if they have some leverage. because this is the busiest time for that industry. He was at the mercy of the company that could install an appropriate unit the fastest. such as the advantage of time. once had to call a plumber in for emergency repairs. It is sometimes referred to as “pressure bargaining. and was forced to pay whatever they demanded. The same kind of thing happened a couple of years before that: In the middle of August.” Example 1 We have all been at the mercy of someone who uses pressure bargaining. not blessed with many household repair skills. The owners of professional sports Applying Pressure 141 . On the other hand.
if the unemployment rate is high and jobs are few. A note of caution: Circumstances in one round of negotiations might give one side an advantage. unemployment is low and jobs are plentiful. Other employers find themselves in situations that actually reverse the leverage (when. If so. for example. however. then you are in a position where you can set reasonable demands on wages. etc. (Team owners are notoriously unpredictable. she has leverage and can more likely hold firm on her price. benefits. On the other hand. Conclusion “Pressure bargaining” is a way to achieve objectives that are greater than what is deserved or desired by the other side. but they are less willing to negotiate several months ahead. consider whether or not the two parties will likely meet again in the future to negotiate. he didn’t have to be flexible because the employees believed that they had no alternatives. If you have a special skill that an employer needs and few others have that skill. When one side places undue pressure on the other side. The employees had no power to resist the demands of the employer.teams are generally more vulnerable to pressure from the players’ union several days before the season begins. This gives it the upper hand in negotiating with employees. What goes around comes around. despite strong resistance. When the employer proposed adding duties to the job classifications. Employers who refuse to give in on issues of high importance to employees and exert pressure on unions to accept their terms. it is the union’s turn to hold firm on its demand). there are likely to be long-term repercussions. can suffer repercussions in the form of sabotage. but before you choose such a tactic. either individually or through collective bargaining. the employer has the advantage: a supply of jobs. will what goes around come around? 142 50 Practical Negotiation Tactics . low employee motivation.) The leverage of supply is also very powerful: If a jeweler has an exclusive contract to sell a ring everyone wants. and other undesired outcomes. Many labor contracts were agreed to when unemployment and inflation were high and employees felt pressured to accept the demands of the employer.
Almost from the beginning of the three-hour drive. the little girls began to fight over the doll. and here’s how the “negotiations” went: Dad: You two stop fighting.) Applying Pressure 143 . but use this tactic judiciously. you have it this part of the trip. and Susie. Susie: Okay. the girls had been fussy. We’ve got a long ride ahead of us. (In a few minutes. Just because you saw it first doesn’t make it yours. you have it when we drive home. (Their dad pulls to the side of the road and turns to face them in the back seat. I took it out of the box. Why? A sudden surprise can disrupt the dynamics of a negotiation. This time. and Susie hid them under the seat. and I can’t stand it. Their dad tried to reason with them. Susie: The doll belongs to both of us. Andrea: Okay. Example 1 A father and his two daughters were on their way to visit the grandparents. The doll can be shared. Mom said so. Andrea: The doll is mine. About an hour into the drive.Tactic 36: Surprise! Never underestimate the power of surprise—particularly when things have bogged down and both sides are simply repeating their positions without making any headway. I can’t drive if you keep this up. because you will probably only get to use it once. the fighting starts up again. Consider making a suggestion or a proposal that completely surprises your opponent. Andrea.) Dad: Stop it right now. Just share the doll. Tell Susie to let me have it. You’re driving me nuts. They stopped for lunch at a fast-food restaurant and shared a children’s meal that came with a small doll. the argument is over the doll’s shoes. Andrea had taken them off the doll.
The litigation itself had been going on for more than three years. Conclusion Dad’s use of a “surprise” tactic was extreme. (They continued to argue and whine and pinch each other. he slowed down. The local newspaper was prepared to urge the auditor to end the litigation. and reached back for the doll. The defendants contended that the auditor’s actions were politically motivated. Dolly doesn’t need shoes on in the car. at great expense to the auditor’s office and the school board. 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. in fact. Here’s how the meeting went: Auditor: I appreciate a chance to talk to you about this litigation.) Dad: Now there’s no more fighting over the doll. they didn’t say another word.Andrea: Give me the shoes back. He grabbed it and threw it out the window. I want the shoes. I think I have acted properly. charging that they breached their duty in their handling these funds. to no avail. and that they had invested and spent the tax dollars wisely. but nothing else up to that point was working. 144 50 Practical Negotiation Tactics . so it was worth the risk. He initiated the litigation against the local school board members and several banks that invested the money for the board. Susie: Daddy didn’t say anything about the shoes. The tactic was so successful. Finally. The auditor’s job was to make sure that tax dollars collected for the local education system were appropriately handled. The auditor asked to meet with the editor to explain his position. and I hope I can convince you of that. She can have them later. Both Andrea and Susie were so shocked by their dad’s action. Daddy said I got the doll on the way to Grandma’s house. Dolly has to have her shoes. Dad tried correcting them a few more times.
but I have to warn you that from what I’ve seen and heard so far. the bank would not have done that had we not proven our case. This morning. We believe the other defendants will soon follow suit. They are very persuasive that this is just a political battle. The school board members make a very good argument that their practices regarding how the funds were expended are not just adequate. I think I have something here that will convince you otherwise. Editor: (surprised) Really? They settled? This is public information? Auditor: Yes. but actually superior to some other entities you supervise. Here are the papers. as a matter of fact. My frustration is that they have refused to provide our office with sufficient information to back up their contention that what they are doing is best for the schools. That’s really the reason this has gone on so long. but recommended that the parties reach a settlement. rather than drop the case. Auditor: I appreciate their arguments. perhaps you should just cut your losses—and just drop the suit. I guess we’re finished here. Editor: Well.Editor: I’m certainly willing to listen. They’ve been making that same argument from the beginning. one of the banks settled with my office. Obviously. Conclusion The editor wrote an editorial urging a resolution for the good of the community. Thank you for coming in. Your reporters will probably want to follow up on it. and a significant amount of money will go toward the tax fund. From what I can see. and it is costing your office money and good will. I really think the community would be better off. Editor: Well. this case needs to be dropped. Auditor: Well. The auditor successfully used the element of surprise in announcing the settlement and thus changed the direction of the editorial. Applying Pressure 145 . there’s just nothing to back up your allegations.
Tina: I’m really against this pool table idea. I want to talk about a car! Mike: It’s really not one or the other. Tina: What do you mean? Mike: When Kevin and his friends get their licenses. If the negotiating team sitting across the table from you seems to be divided on a subject or one of the team members seems to be more sympathetic to your arguments. I can remember spending hours playing with my friends and family when I was growing up. Kevin is against it because he is turning 16 years-old soon. I know we’ll all enjoy it. If the other side involves more than one person. they’ll be mobile! The last thing I want is for them to be out cruising around. Tina and their son Kevin are against the idea. Mike: I know. you might be able to dilute their power by identifying their different interests and addressing them separately. Example 1 Tina’s husband Mike wants to buy a pool table for their family room. try to focus on that subject or address that member directly to get them to be more amenable to your proposal. night after night. and a car is more important to him than a pool table. I’d 146 50 Practical Negotiation Tactics . especially Kevin. Kevin: I don’t really care about a pool table. although getting your license and getting a pool table are connected. Kevin: So am I. Dad. Tina is against it because she doesn’t think it will be used that much and it will take up a majority of the floor space in the family room. Mike knows he needs to get either his wife or his son on his side.Tactic 37: Divide and Conquer Certain negotiations lend themselves to a divide-and-conquer tactic. but I think it will get a lot of use.
Conclusion Mike found an argument that divided Tina and Kevin. Tom. I thought we were making real progress. She noticed that Jim (another member of the union’s negotiating team. has just presented the company’s initial wage offer. only Kevin did. the head of the union negotiating team.like them to hang out here more. and Kevin and his friends use it often. Kevin. received it without comment. she joined his side of the debate. And I really do need a car! Tina: Do you really think the guys would use it? I would rather have them here than out getting into trouble. Mike: I really do. Tina: Well. Instead of both opposing the idea. I’m surprised. then maybe it’s not such a bad idea. Here’s how the negotiations went. Wylma: Tom. But I’m not going to hang out here all the time. Once Mike convinced Tina of the idea’s merits. don’t you think you guys would use it? Kevin: I guess so. Example 2 Negotiations on a new union contract seemed to be going quite smoothly. some. the chief negotiator for the company. 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. What happened? Applying Pressure 147 . A pool table could attract them here. who was studying the company’s financial records for the team) became uncomfortable when he heard Tom’s demand. A number of contract changes have already been worked out and Wylma. They bought the pool table.
these are accurate. Right. Wylma distributed copies of financial data that showed the company’s current condition.) Wylma: Now Tom. Conclusion Wylma’s appeal to Jim’s knowledge of the actual financial situation of the company worked to divide the union’s negotiating team. But Tom. 148 50 Practical Negotiation Tactics . Wylma: Let’s take a break. I think you need to rethink your demand. This is just what we think is fair. Wylma: Tom. you certainly are aware of our financial situation. you’ve heard our demand. Tom had reduced his wage demand significantly. but he added some workplace changes that Wylma was comfortable negotiating. Your demand is totally unreasonable. you’ve seen our sales projections and production costs. as Jim can point out to you. Let’s start again tomorrow morning. Do you think this is reasonable? Jim: (looking uncomfortable) Well. (When they resumed. these are our actual accounting figures.Tom: Wylma: Nothing happened. Jim? Jim: Yes. When the negotiations began again. Wylma: Jim. Tom: We don’t think so. forcing them to reconsider their demand.
Humor often works to break the tension of the room. the oldest and youngest Jones children. so what’s the point? I don’t need another tie! Madison: It’s not the gift. it was easy to agree on just giving presents to the children. We can’t afford to buy each other things we really need. Tempers flare and people say things they shouldn’t out of anger or frustration. some of the siblings decided they liked giving presents to one another. married. but it is really important to me. and had children. That will just make a bad situation worse. Stay alert and watch for clues that a negotiation is about to get out of hand. I want to say something. It was a tradition in the Jones family to spend Thanksgiving dinner arguing about how the family wanted to celebrate Christmas.Tactic 38: Break the Tension Tension is inevitable in most negotiations. I don’t feel Christmas in the way I used to. 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. so you can find a way to quickly neutralize it. but the thought that matters. and it makes me very sad. When all of their children were small. I know that you all think I’m silly about wanting to exchange Christmas presents among the adults. Sometimes the argument got heated. Applying Pressure 149 . but it should never be at anybody’s personal expense. so pressure grew to draw names and exchange gifts. but as the children grew up and had families of their own. Example 1 The four Jones kids grew up. Madison: Okay. Cory: Madison. especially between Madison and Cory. Ever since Mom and Dad died. get over it. You are almost 40 years old.
You can say that, but everyone is disappointed when they receive a cheap gift, even if they won’t admit it! Madison: Why are you being so stubborn? You’re just ruining everything! Cory: (also emotional) Look, if you have to receive presents in order to feel that it’s Christmas, we can all just give you presents! Madison: (without hesitation) Okay! I can live with that!! (Everyone laughs.)
Madison’s quip diffused the emotions of the parties. Cory, while very angry, was surprised by Madison’s answer, and was able to laugh. With that, other family members joined in the discussion and they agreed that those who wanted to participate in the gift exchange would. Those who didn’t, wouldn’t.
Jay believed that the new home-theater system he bought was a lemon, but he had very little success in getting the salesman to take responsibility. The salesman agreed to have every complaint looked at by a service technician, but the technician always gave the system a clean bill of health, which infuriated Jay. Jay finally asked for a meeting with the store’s owner, fully intending to leave the meeting with a full refund. Jay: Mr. Owner, I’m very serious when I say that I will not keep this system. It is a lemon, and you know it. Either the sound or the DVD or the picture is always off. Owner: Now Jay, there are some problems with the system, but nothing we can’t fix. Let me turn it over to my best technician, and he’ll be right over to fix it. Jay: We’ve been down that road already. The system has been on the blink 20 out of the last 30 days.
50 Practical Negotiation Tactics
Owner: You’ve had a loaner TV/VCR while yours was being worked on. We’ll be happy to loan you one again whenever you need it. Jay: (becoming annoyed) That’s not the point. I bought a new home theater system and I want to use it! I’m very frustrated by your attitude. Temporary fixes aren’t good enough. Owner: Well, we are attempting to fix the system. You’re the only person who’s had this kind of trouble with one of our new ones. Maybe you’re just having “buyer’s remorse” and really don’t want the system anymore! Jay: (very irate) I can’t believe you said that! This system is a lemon, and you’re trying to blame me! What a crock! What kind of business are you running here? You’re a bunch of crooks. Owner: (now also irate) Just hold on there! I run a respectable business, and I resent your attitude. We’ve bent over backwards to check out each of your complaints, none of which were found to be major defects—just things that needed adjustments. Jay: (very angry) That’s not true. The surround-sound speakers never work at the same time. You don’t call that a major defect? Owner: (realizing he needed to break the tension) Well, my 30-year old Sony TV only has one 3” speaker, but I still watch it. Jay: (pausing and calming down) Yes, my first TV was a Sony. Owner: Look, I’m sorry we’re at this point. Let me take this to my top technician and your salesman, and we’ll fix it. Give me one day. Jay: Okay, but just one day!
The owner used a joke to interrupt the angry negotiations that were going nowhere. He exchanged Jay’s surround-sound system for another new model. The system Jay rejected was sold as a “used” one and never came back in for repairs. Jay’s new system worked fine, and he ended up becoming a repeat customer.
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Stage 6: Making Progress
aking and reviewing proposals and counter proposals will not always close the gap between the two parties’ positions and gain a settlement. Progress might be made, however, by invoking a certain tactic at a critical time, particularly Tactic #39 (Compromise). Often believed to be the key to successful negotiations, compromise is not giving in; instead, it is the ability of a negotiator to prepare a settlement that represents some concessions on the part of each side, but that will also help gain a proposal that is acceptable to both parties. Other key tactics that can move the negotiations to a settlement include the presence or use of an unexpected friendly personality to disarm an opponent (Tactic #40: Be Friendly!) Bringing to the table a person who is highly respected by the opposing team is a good move; such an individual might be able to gain their confidence and support your position (Tactic #44: Make Use of a Positive ‘Halo Effect’). One tactic that never fails is the classic Split and Choose (Tactic #42), which goes like this: One side divides the item into two parts, and the other side gets to choose which part they prefer. Parents have used this tactic to divide the last piece of pie or cake between two kids for decades! Additional key methods that move things along include the chilling effect of one party unexpectedly tape-recording meetings (Tactic #41) or presenting facts (Tactic #45) that unexpectedly support their position. Experienced negotiators also achieve progress by asking probing questions (Tactic #46), which can reveal or point out flaws in their opponent’s position or by using a period of prolonged silence right after a heated exchange. Experienced negotiators often achieve a final gain in a settlement by nickel and diming (Tactic #43) over small items.
Tactic 39: Compromise Negotiations are successful when all parties walk away with an agreement they are satisfied with.: Julie: Dara: Julie: Girls. C. the individual might be afraid that the exchange isn’t equitable). who was outside with older children. don’t you want to play? We could color before your mom comes. At some point. 154 50 Practical Negotiation Tactics . I want to play “Prince and Princess. they were the last children left in the playroom for the remaining two hours of the day. One day. how about going out to the yard for a while? You can swing or play ball. Dara. If I can be the Princess. The day-care worker wanted to take them outside for a while so that he could visit with his friend. Julie wanted to play “dress-up. Isn’t it “later” yet? Right now would be a good time to go outside. If there is resistance to compromise. (In a successful negotiation. Okay.” Can I color now? You said we would color later.” Dara. was ready to color. however.: Julie: Dara: Mr. Then we can color. C. but since the other children in their room were not there. they would have to play ball with older children. or maybe tomorrow. the exchange will be between things of equal value. each side must decide whether or not one more compromise will produce an agreement that they will later regret.” but she needed Dara to play with her. When that point is reached. not the Prince. Both of the little girls liked to play ball when they were outside. Example 1 Julie and Dara both attend a local preschool. it is better not to compromise. Mr. I want to play “Princess” and I want Dara to be the “Prince. It is the give-andtake of a negotiation: one party agrees to give up one of its demands in exchange for something of value from the other party. and that doesn’t happen without compromise.
When his variance application was made public. 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. and teenagers attracted by Making Progress 155 . They did all the compromising they were willing to do. you can come back in and play “Prince and Princess. or apply for a variance. wouldn’t you like to go outside first? After you swing for a while or play ball.: Julie: Hey.” No. the owner had to supply additional parking. there will be an overall increase in traffic coming through the neighborhood and vehicles will be turning into and leaving the parking lot.Mr. the parking lot will start to look trashy. failed to offer the children something that was as important as the plans they had made. We want to play dress-up and then color. 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. We don’t want to go outside. however. C. neighbors became concerned about the changes to the mall. and they still had time to color. According to the city’s zoning laws. 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. Mr. C. The existing parking lot didn’t meet the current parking standards for that size theater. Conclusion The children stayed inside and played dress-up. The owner decided to try for a variance.
the south parking lot has not been used much. Owner: You know that there’s always plenty of parking in the south end of the mall’s parking lot. and we’d like to keep it that way. With the Comedy Club and the grocery store on that end. All a patron has to do is park on Elm and walk beside Joe’s yard through the small alley there. lights in and out at night can be very annoying. The neighbors: Owner: 156 50 Practical Negotiation Tactics . You could have all of the traffic enter from the north lot. not having direct access to the south lot from the street would be unworkable. In fact. The fence would shield neighbors from the lights from the vehicles and block the walking access through the alley. We’d really like to block off that cut-through and have the theater face the south. Right now. Many of our homes back up to that lot. but it’s not ever full. Not having in and out traffic to the south of the mall is just not very practical. and break in his door. driveways on the south side of the mall are along the east and west side of the parking lot. the north lot is used more. I’m afraid. We’re just not convinced. We hope you’re right. the closest parking to it is along Elm Street. And. if I agree to move the theater entrance to the south side. even though I’m not adding any parking. with your plans to put the entrance of the theater on the east side of the mall. What if I changed the entrance to the middle of the lot? That way. as you said. I could put a privacy fence along the east and west—at the backs of your yards. Right now. So. We’d like you to prohibit cars from entering or leaving from the south lot.the theater will start to hang around and maybe wander around our yards at night. only when that lot is full would cars come around the mall and park on the south side. I’m certain the lot will accommodate the theater crowd without increasing the parking on your neighborhood streets.
Agreed. add a new entrance into the south lot. The fences created a buffer from the lights and noise. If I agree to move the theater entrance to the south.The neighbors: Owner: The neighbors: Owner: But we use those side drives to get to our garages. If the fence was set back the width of a driveway onto your property. Conclusion Both sides had to give up something on certain items in order to reach agreement. Now you’re talking about considerable expense. however. and they discouraged patrons from parking on neighborhood streets. Teens can form into gangs if left unwatched. put a privacy fence along both the east and west sides of the south lot. and make sure the parking lot is kept clean. The compromises were what everybody could live with. there could still be access from the street to our garages—just not to the main parking area. the neighbors reported that they were very happy with the way it all worked out. Making Progress 157 . The fence would help with the vehicle lights and buffer this noise from the kids who hang around. but the privacy fence has to be landscaped so that it doesn’t look like a ghetto wall. set back a driveway width. then will you agree not to push for increased private security? Yes. And a year after the theater opened. But you’re going to have to have some kind of security as well.
Mrs. your friendliness might disarm and relax them to the point where they begin to talk about their priorities and objectives.. Close your windows at night and don’t listen. so her neighbor’s barking dog came as an unpleasant surprise. Mrs. and sleeping at night was already a difficult proposition! When the neighbor’s dog began to bark at 3:00 a.Tactic 40: Be Friendly Being polite.m. Take advantage of any confusion about your friendliness to try to get them to agree to some of the easier things you have to work out. she just didn’t think it was a serious problem. 158 50 Practical Negotiation Tactics . Lonely. She didn’t believe her neighbors ought to complain about the barking. because you are the one to set the tone for agreement. and that as angry as they were. Joan had a new baby. and pleasant always enhances one’s ability to reach an agreement. but be friendly. Joan: Hi. and didn’t stop until 6:00 a. Lonely’s only companionship.m. and what kind of complaints might have already been made. Your opponent might give in readily. and because she was hard of hearing. Lonely: If you’re here to complain about my Rocky.m. Present your position forcefully. just forget it. This gives you an advantage. but going out of your way to be friendly is an especially helpful tactic. Example 1 Joan was new to the neighborhood. She learned that everyone in the neighborhood had complained at least once. and I just moved in next door. professional. Joan was already pretty tired. The dog was Mrs. incident was usual or unusual. Joan decided to at least try and talk to the neighbor. I’m Joan. thinking that you will be just as easy to work with on the sticky issues. They might even start to underestimate your negotiating skills. and started to get upset. She sought advice from the family on the other side of the neighbor with the barking dog to see whether this 3:00 a. If your opponent is aggressive or angry. they had gotten nowhere. respectful.
I need to get the baby home.Joan: Mrs. and I’d like to have him stop by and look at Rocky—would that be okay with you? Well. Why. sure. though. I guess so. Making Progress 159 . Maybe I could come back tomorrow and bring him? Oh. don’t worry about that. Mikey. Who. I know that some of these people around here don’t like him. then. I’ll see you. He’s a real comfort to me. by the way. Lonely: Joan: No. I guess that would be okay. My friend wouldn’t charge anything for talking to us about Rocky and maybe giving us some advice. isn’t he cute! He’s a handful. I stopped by and visited with him over the fence this morning.) Hi. Lonely: Joan: Mrs. but she took her baby and went to visit Mrs. it’s probably because they just haven’t had the time to get to know him. I’ve only got my Social Security. I can’t pay for something like that. I’d like to introduce you to my new baby. Lonely: Joan: Mrs. is a really sweet dog. Well. Lonely: Joan: Mrs. I might have to talk to you about Rocky. I sure hope he starts sleeping through the night soon. Here’s my little angel. The barking at night has been mentioned to me. no. Lonely: Joan: Mrs. (Joan’s sleep was disturbed by another night of barking. He’s been keeping me up at night. too. When he does. I just wanted to come by and introduce myself. Well. Do you think his age has contributed to some of that? You know. not at all. Lonely again. No. I’ve got a friend who is a veterinarian. How long have you had him? Almost eight years now.
Mayor: (very friendly) I understand how these things happen. recognizing that the layoffs would be an issue in upcoming local elections. that the press got hold of the story of our company’s activities before we could call you to let you know. that’s very understanding of you. Lonely didn’t have to pay for the medicine she could not afford. overseeing a factory in Mexico and selling products in the states. Hearing about this from the press obviously puts you in a very embarrassing situation. Lonely’s needs and arrive at a workable solution to the problem. Joan took up contributions from the neighbors.Conclusion Joan’s friendly approach enabled her to understand Mrs.S. its 150 management and sales employees could continue to work in Happy City. The barking all but stopped. Company ZZZ: (surprised) Well. he prescribed medicine that gave Rocky a more regular sleep schedule. Example 2 Company ZZZ planned to close its manufacturing plant and lay off 300 union employees. 160 50 Practical Negotiation Tactics . It’s very difficult to make a move of this type without having it leak out. When he heard the news on the radio. Company ZZZ. you would have. I think that if you could have let me know ahead of time. Lonely and Rocky.. They anticipated that it would be an unpleasant meeting. of course. U. After Joan’s veterinarian friend visited with Mrs. agreed to meet with the mayor. the mayor called and asked for a meeting with Company ZZZ officials. Company ZZZ was not able to meet with local elected officials regarding the status of their operations before the press reported the layoffs and the uncertain future for the 150 white-collar employees.A. Under its new corporate structure. and Mrs. Here’s how the meeting went: Company ZZZ: We’re very sorry.
They need a really good deal on the plant price. Would you be in a position to talk to me about such a deal. and the mayor was reelected. the city has a potential buyer for your plant building. Conclusion The mayor’s strategy was to disarm the company with his friendly attitude and in return get a favorable response to his proposal to buy the property in question. Mayor: Great! Let me know when we can talk again. Making Progress 161 . The buyer is a “disadvantaged business” we have been working with for some time. so we need to understand how we can affect their decision on keeping an office here. It’s possible that some of the 300 laid-off employees will find work at this new endeavor. Many laid-off employees did indeed find new jobs at the plant. I am certain that you would like that kind of “good” publicity coming quickly after the recent bad publicity. and I want them to know that. You’ve been very understanding about this. I think I can prevail upon the Malaysia group to let us handle the disposal of the property in such a way as to repair some of the damage our layoffs have created. By the way.Mayor: I wanted to meet with you so we can take the necessary steps to keep the 150 jobs here. We just haven’t heard anything yet. or would we need to involve the Malaysia group? Company ZZZ: Certainly. Unfortunately. This strategy worked. because I’d hate for us not to make an appropriate pitch to them. The mayor was able to broker a deal for the “disadvantaged business” to buy the plant and convert it to a different widget maker. the 150 management/sales jobs did end up moving to Mexico. Mayor: Please let me know as soon as you can. Company ZZZ: I’m not sure what to tell you on that. We recognize that your new corporate owner is a large company located in Malaysia.
the investigator. had $40. She borrowed a tape recorder so she could ask her father if this was a fair deal. Susan denied it. until Susan said they would evenly split what they bought. and Alexis. Jones’s supervisor. thus becoming a source of embarrassment. or simply “bad faith” methods have been used by the other party. She agreed that her proposal was not fair and that she had tried to take advantage of her younger sister. Alexis agreed. Alexis knew this was not fair. Alexis then played the tape for her father. 162 50 Practical Negotiation Tactics .00. Alexis. Michael Wood. Then he played the tape. and Jones. They might worry that the tapes will be made public or given to others. Susan repeated her demand. age 15. Conclusion For the first time in her life. this time in front of a hidden recorder. who was disappointed to hear that she might propose such a deal. or used to pressure the other side to agree to certain demands. the accused. Somehow. threats. Susan wanted to negotiate with Alexis to “pool” their money so they could buy something together.Tactic 41: Record the Meeting The climate of a negotiation session can be “chilled” in an instant if one side unexpectedly brings a tape recorder to the table.00 to spend. Fred Adams. The two sisters had saved up a little money so that they could buy souvenirs. the younger sister. He asked his elder daughter about the arrangement. age 14. Susan understood the impact a tape recording can have when it reveals a lie. Example 2 Three men were meeting to discuss a charge of sexual harassment that had been made against Stuart Jones. were on vacation with their parents in Myrtle Beach. but Susan had only $20. South Carolina. The effect on the other party might be even more substantial if lies. Example 1 Susan. are talking about a possible settlement of the issue.
Adams: Jones: Wood: Jones: Wood: Jones: Wood: Jones: Wood: Jones: Adams: Jones: Adams: Jones: Adams: Tell me again. Mr. But by refusing to repeat his answers. And you did not threaten her job if she did not. Jones. I’ve brought a tape recorder with me.” meaning something other than copies? No. Jones suddenly realized that his strategy would not work. No one could have possibly misunderstood your intentions? No reasonable person. Mr. He failed to think about what might be the next step. Ruiz and Ms. So you refuse to repeat the answers you just gave us? Yes. and gestures did not have a single hint of sexual implication or innuendo? None at all. Stuart. Well. Making Progress 163 . I think I can write my recommendation. you are aware that the next step in this process is to ask witnesses to come forth. he also lost his negotiating position. to quote you. stares. (a long pause) I want to see my lawyer. Your request. Conclusion Jones had knowingly lied when he denied the charges. And please describe your general manner. “Do what I want. When Adams set the tape recorder on the table and revealed that he had witnesses. I simply asked her to make copies for me as quickly as possible. You never touched any part of her body? Not even accidentally? No. and now I’ll ask you to repeat your answers—on tape. So. Appleton both claim they saw the incident and will testify. Starr. exactly what you said to Ms.
” the divider. Oh. Roberto will get to choose which half he wants. What is it? Maria: Father: 164 50 Practical Negotiation Tactics . with the remaining part going to the person who did the dividing. of course. 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. which certainly is large enough (he naively thought) for two young children to easily share.… No way! Haven’t you two heard of ‘split and choose’? It’s a fair way to divide things. Maria.Tactic 42: Split and Choose When two parties both desire something that can be shared or divided between them. because you did the cutting. take this knife and slice the Snickers into two halves. Realizing the potential of getting the “smaller half. Maria and Roberto: No. Maria: Roberto: Maria: Father: Father: We can’t share it! It’s in one piece! I’ll eat half and give you the rest. is usually careful about dividing the object into two equal parts. the classic “split and choose” tactic might be the best way to settle the issue. The second person then chooses which of the two parts they will receive. Many of us learned this one from our parents: After two people agree to the strategy. so I’ve got to cut it into two equal pieces or else he will choose the bigger one? Exactly. one person is given the task of dividing the object(s) into two parts. Their dad instructed them to share the candy bar.
The remaining lots should be distributed between the two parcels to make each parcel as equal in value as possible. but is not sure how to arrive at a fair split. Clarence and Archie. Deal? Clarence: Sure. There is only one place for an access road that must serve all lots. Example 2 Two friends and business partners. quickly recognize the fairness of the divideand-choose method. Clarence: Right. 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. Archie: I really don’t care either. jointly purchased fourteen acres of lakefront property several years ago. Archie is ready to build a retirement home on the property. according to county deed restrictions. Making Progress 165 . Archie: That’s true. They have a recent appraisal that values the property at $150. They all have a great view and are equally desirable to build on. Lots must be at least one acre to be developed. both parties.000. Then I will choose which parcel I want. and wants to divide it into two separate parcels. Archie: Here is the map. that sounds fair. That makes them more desirable. but the appraiser pointed out that the seven one-acre lakefront lots are considerably more valuable than the other seven lots. I don’t really care which lakefront lots I keep. Clarence agrees to divide it. Give me the map and a pencil.Conclusion When two people desire the same object and it is something that can be divided in some way. so we should be able to divide the property fairly. even children. 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.
Conclusion Clarence divided the fourteen acres into one parcel with three lakefront lots and six other lots. and both men were happy with the arrangement. Which would you have chosen? 166 50 Practical Negotiation Tactics . and the second parcel with four lakefront lots and one other lot. Archie chose the parcel with the three lakefront lots.
What started out as a single issue is now a combination of a major issue and a much smaller issue. supposedly the bargainer in the household.Tactic 43: Nickel and Diming Insisting on the addition of a small item (a “nickel or dime” item) as an inducement to help settle a more-important item being negotiated can change the negotiations in a significant way.” Many people have witnessed or used this effective negotiating tactic. miles from their home. because a “nickel” item has been added to negotiations about a much more significant item costing “dollars. and the delivery carrier doesn’t set up mirrors. we’ll take the suite if you’ll throw in free delivery and set up the furniture. Example 1 Brenda Davis is always thinking about the repairs that might be required on an item. so the salesperson delivered the suite himself. They recently purchased a new bedroom suite after they carefully priced comparable furniture all over town. attach legs. delivery was limited to a small geographical area. Brenda did her part when she said.” thus extending the scope of the negotiations. His tactic was to throw in a “nickel” in order to make lots of “dollars. Her husband Jason. Conclusion The amount the couple spent was fairly large. The suite they liked best was already at the lowest price in town (the retailer was having a real sale). etc. However. With a great deal of effort. is expected to dicker over the price. Jason was having a hard time getting the salesman to lower the price. Example 2 An experienced and skillful union organizer liked to tack on a tiny less-significant item each time a company and its union negotiated on a large and Making Progress 167 . “Okay.” Under store policy. he also set up all of the furniture in a second-floor bedroom.
At the end of negotiations.” The company negotiator yielded to this small-potatoes counteroffer in order to win agreement on the health plan.” Conclusion The nickel and diming tactic is a classic negotiation tactic used successfully in a variety of situations.important item. one member of the management team commented on the move: “This guy has nickeled and dimed us a total of thirteen times—and for a lot of money! Next time we can’t give in on those small add-ons. In one case. If one party misjudges the situation. we’ll agree to Health Plan A with another ½ cent on the pension fund. so be prepared to withdraw the nickel and dime item at the hint of trouble. “Okay. it can be a dealbreaker. 168 50 Practical Negotiation Tactics . If used correctly—at the very end of a negotiation—the tactic can usually provide a small gain. the two sides had been engaged in considerable bargaining over an improved medical insurance plan (“Health Plan A”) costing hundreds of thousands of dollars. This experienced bargainer said.
This creates what is called a “halo effect. and performance evaluations for people to come across as likeable. but they are two pieces of furniture. Donna: They match. thus creating the impression in others that the good qualities they see are present all the time. 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. Kathy: Then I’ll take the couch and love seat. Donna: No way! These are the last two pieces of furniture. trustworthy. Donna: Okay. You can go first. or knowledgeable. Kathy: But they are a matched set. Kathy: Well you took the bar and four stools as one item! Donna: They are part of one set. and all the rest is small junk.Tactic 44: Make Use of a Positive “Halo Effect” It is common in interviews. Kathy: Not if you accept your logic! (Pause) Donna: You’re not being fair… Making Progress 169 .” Having a member of a negotiating team whom the other side thinks can do no wrong might prove to be advantageous. Donna: I’ll take the bar with stools. I’ll take the color TV. decision-making meetings. Kathy: I’ll take the pool table. People tend to make an effort to put their best foot forward.
(Pause) We’ve got to settle this today and get this stuff moved. I want the love seat. Good idea. Example 2 During a heated labor negotiation. I trust his judgment. What for? Tell him the situation. and ask him if the couch and chair should be one item or two. and if the bar and stools should be one item or two. with a record of labor involvement that included three recent strikes. Let’s call Johnny Ryan. Conclusion Kathy and Donna needed an arbitrator to settle their disagreement. but Kathy and Donna assumed that one positive quality (honesty) would carry over to other areas. Johnny had the “halo” of an honest person. what can we do? Give me the couch and love seat! No. The union negotiators.Kathy: Donna: Kathy: Donna: Kathy: Kathy: Donna: Kathy: Donna: Kathy: You’re not! (Pause) Well. and he has always struck me as an honest person. 170 50 Practical Negotiation Tactics . He might or might not have also been a good arbitrator. He’s our cousin. I want the stools. 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.
Conclusion The union leaders gave Boston a great deal of respect (even in areas such as budgeting and actuarial tables) because of his former position. but the power of the so-called halo effect was great. On Monday. as a consultant to review their proposal. when negotiations again stalled on a retirement plan issue. Boston was widely known as a totally honest man who speaks his mind. Boston went to the negotiation table with the management team. They might have stretched his halo farther than his expertise and experience warranted.simply did not trust the management team. and that he did. the former union president. the consultant did not speak. but his mere presence caused the union leaders to accept a management point as valid. He solemnly told the union negotiators that he had been hired to review it. Two weeks later. the city management again hired Boston. He said he believed that it would work as presented by management. the management team hired Sam Boston. even if the proposal appeared to be valid. The teams took a weekend break from the stalled negotiations. without any reservations. This time. Making Progress 171 . The union accepted the proposal. During the break. thus bringing the negotiations to a conclusion.
has owned the house for 24 years and is downsizing to a condo. (Next day) We’ve reviewed the records you’ve produced. and $237. They sold for: $225. Sam Jones. We love your house. This offer is for more money than any four-bedroom houses on this neighborhood list. Example 1 Henry and Maria Lopez are interested in a house that lists for $275. and we are countering with an offer of $250. I’ll get back to you. but the key is to gather facts that you might need—not just the facts that you will need.500.Tactic 45: Use Facts Fact-gathering must be part of the preparations for every negotiations session.000. $229. but you’ve priced it way too high. Sam Jones: Sam Jones: 172 50 Practical Negotiation Tactics . What? That’s $35. Being able to present them at the most appropriate and critical times has made the difference in countless negotiation situations.000. Sometimes. $237. How can you say that? We went to the county courthouse and looked up the real estate transactions for all the houses in this neighborhood that were sold over the past two years. They believe it is overpriced. The owner.000.000. Here’s a list of the five that are about the same size as yours. but the right facts presented at the right time can chill or astound and completely turn things around. Henry Lopez: Sam Jones: Maria Lopez: Sam Jones: Maria Lopez: We love the house and have made a written offer of $240. the other party will ignore or refuse to believe the information.000.000 under the listing price! We realize that. but we feel that it’s a fair offer.000.000. $235.
I’ll get called on the carpet. Hatfield: While I was at purchasing. Order the new computers. and we know that only this model will meet our needs. I asked for a list of all new PCs bought this year. I’ll be… Okay. Hatfield: My staff has done a lot of research. The facts presented by Henry and Maria Lopez caused Jones to re-counter their asking and likely sale price.000 each. The last 20 were over $2.000.600 unless the company president approves. Conclusion The Joneses had based their asking price on the advice of a friend. Supervisor: Well. Example 2 Supervisor: You know the policy. We accept. who was not particularly knoledgeable about real estate. Supervisor: If I okay this purchase order.600 for a computer. Well… We have a written counter of $245.400 each.Henry Lopez: Sam Jones: Henry Lopez: Sam Jones: Let us discuss this for a minute. and wisely chose exactly when to present them in order to make his point. Here it is. That’s the bottom price. let’s not worry about it. Making Progress 173 . You can’t pay more than $1. and did his homework. We’ve talked with purchasing and we have the authority to buy seven for $2. No one can go over $1. if other departments have ignored the policy. Conclusion Hatfield had anticipated what his supervisor’s position would be. He found facts that supported his position.
reveal misperceptions or lack of knowledge about positions that can be corrected. I want two of these. but you don’t want to jeopardize your job? Jenny: Yes. If you trust me. Maureen: The policy limits a person to only take out three books at the same time? Jenny: Yes. Maureen: So you trust me with the books. can you check out two on a card for him? Jenny: Well. They can help you identify or better understand what the other side really wants. and two are for my husband. I’m sure you would not. but I don’t set the policy and I can’t make exceptions. and they would all be unavailable to others. Maureen. But I can’t break the limit rule—it is an absolute rule here. Otherwise. Maureen: Well. A maximum of three books can be checked out to a person at any one time. you know me. and help you point out inconsistencies in a position that might “lead” the other side to change theirs. Would I do that? Jenny: Maureen. Example 1 Maureen: What.Tactic 46: Ask Probing Questions Ask probing questions and follow-up questions. The effective use of probing questions can help achieve a favorable settlement. Maureen: Well. yes. I can’t check out these four books? Jenny (Librarian): That’s the policy. some people would have forty or fifty books out at the same time. 174 50 Practical Negotiation Tactics . I can do that within the rules. I trust you.
Why? Some policy? Yes. Who does have access clearance? Mike. Can you get me the number? Sure. Brooks. Example 2 Jack: Mark: Jack: Mark: Jack: Mark: Jack: Mark: Jack: Mark: Jack: Mark: Jack: Mark: Jack: Mark: Jack: Mark. Making Progress 175 . But this forces us to make decisions without complete information! Yes. Mary. Security? Right. Babu. and Kenzie. Jay. (Next day) Do you have the policy about giving out product sales information? No. What’s the policy number or date of approval? I don’t know. it could kill us. Mary and Kenzie? They are 2-3 pay grades below us. I couldn’t find anyone who knew it. They say it’s a security issue. but it’s because you don’t have access clearance. we can’t do that. Sue. If that data ended up in the wrong hands. and they don’t even have a use for the sales data.Conclusion Maureen used probing questions to uncover a way to solve her problem and make it easy for Jenny to stay within the library rules. are you sure I can’t get your information technology people to give us direct information on product sales? No.
I’ll sign now. 176 50 Practical Negotiation Tactics . Once he discovered that employees in lower pay grades had access clearance.… (Next day) Mark: The vice president said you can have access if you sign a security card like everyone else who has access clearance.Mark: Well. Jack: Here. When can I get the data? Mark: Today.” He intended to do this until he hit a dead-end or was able to find a solution to his problem. Conclusion Jack continued to probe by asking why and who in order to find out more about “the policy.P. if we can have access? Mark: I guess so. His probing questions turned up a critical fact. I’ll get it for you ASAP. Jack: Can you ask your V. Jack was able to receive clearance as well. that’s been the policy since I’ve been here.
or even months after the first offer is presented. this process can easily result in a final settlement. 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. In this process. T Reaching Agreement 177 . hours. 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. If friends or neighbors need to settle something but prefer to avoid the negotiation process. this tactic can produce an agreement. Tactic #50 should always be used right away: Commit the Offer to Paper! Even small issues negotiated among friends can cause problems if people rely on memory and assume that both parties have “heard” the exact same conditions. When two parties believe they have an oral agreement. and the classic Walk Away (Tactic #48). If both parties desire a settlement but cannot seem to reach it through the usual give-and-take process. They bring it out when a dispute arises.Stage 7: Reaching Agreement he final stage! It might come minutes. 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. Tactic #49 (Final-Offer Arbitration) should bring about a settlement. 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. days. Other final-agreement tactics include Tactic #47 (Giving Premature Congratulations) to make the other side feel good about having achieved an agreement (while you spring another condition on them). and the child learns an important lesson about life.
…” Larry was very pleased that his wife was agreeing to the idea he had been trying to sell. As he hugged her. Larry Snyder gets bored staying in any one place for many days. but his wife Nancy likes to stay put and relax. 3) and adds one last key demand to the congratulation sentence. D.Tactic 47: The Premature Congratulation This tactic draws its strength from timing. off-again discussions. “I’m thinking of agreeing to your plans for vacation. The bargainer skillfully 1) begins the congratulation sentence “I agree…”. Weeks of stressful meetings cause both sides at the bargaining table to look forward to its conclusion.C. she continued to speak: “…as long as you agree to drive us to visit my mother on her birthday. 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.C. Let’s do go to Virginia Beach and Washington D. 2) allows the other side to feel the release that comes with completing the bargain. She said. one exhausted negotiator saw that his team was equally weary and 178 50 Practical Negotiation Tactics . Example 2 Negotiations can take a long time and incorporate many issues.” Conclusion The husband was so excited about visiting Washington. They both have stressful jobs and look forward to their annual vacation together. After days and weeks of on-again. Near the end of a particularly anxious bargaining session when there was little time left to negotiate. Nancy brought up the subject of vacation again after dinner. Example 1 Many husbands and wives have different ideas about how they’ll spend their vacation. His wife had carefully planned her exact “premature” vacation agreement.
but held firm on remaining operating principles. “…as long as you give us a 45-day probation period. It took only a few minutes of caucusing for my team to convince me that a 45-day probation was costly. In our last offer. but acceptable. I felt the tension in the room. Ted said. but we agree to everything in your final proposal…” Members of my team shouted hooray. he turned on a large warm smile and extended his hand to shake. symbolizing that he was agreeing to the entire final offer. It was so close. My team had convinced me that doubling the time frame would create a real problem on the shop floor. and this skillful negotiator let them feel the happiness and security one feels when the fear vanishes. we made some small concessions on financial matters. When the chief negotiator emerged with his team and headed toward my team.almost willing to accept any deal. However.” Bob: Ted timed this perfectly. My team was afraid we would not even come to an agreement. as the negotiator came closer. The old agreement specified a 30-day period. The celebration had begun. fit. Most people didn’t notice that the negotiators had not finished their hand shake… Ted: Then Ted continued his sentence with. but the other side continued to ask for 60 days. There were grins and handshakes coming from the other side. One operating issue involved the probation period for new employees. Therefore. (This is a bad position to be in. we held firm on this and did not discuss the probation issue and many other “dead” issues for days. One of the best pieces of negotiation advice is to remain fresh. but also that they sensed the weariness of my team. because it makes you pretty vulnerable. We all knew that it could come down to agreement or strike. and rested. “It was hard for us.) Here’s what happened: Bob: I knew that the other side was similarly harried. Reaching Agreement 179 .
Conclusion This “premature congratulation” tactic can only be used successfully at the very end of an unsure and shaky negotiation. However. 180 50 Practical Negotiation Tactics . knowing that it will probably be agreed to in order to continue in the euphoria of the moment. the negotiator skillfully finishes his words of congratulations by inserting one last key demand. The negotiator makes a big show of agreeing and allows the other side to bask in the glory of a deal completed.
but I thought I might want to try a new Highlander. My name is Jay Vahaly. Jay. I like it.) Jay: Sue. Sue: Well. Jay. if I roll over the lease to a Highlander. and he can simply buy it when the lease expires. a veteran salesperson. but my Avalon is a good car. 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. Jay: Hi. Sue: I remember you.Tactic 48: Walk Away Walking away from the table in the middle of negotiations is a risky tactic that should only be used when you know you have a good alternative to what is on the table AND you believe that the other party will think that you really are serious about quitting for good. be sure you think this through beforehand. all from Sue Wilson. too. You had time to assess my car. He stopped by Pembroke one day to look at the new models. I don’t want to negotiate. You bought your wife a new van just last year. here are your keys. the following exchange occurs. and the lease on my Avalon is about to expire. but his Avalon has been a good car. Your opponent will have to either let you go and run the risk that things are really over. I’ve worked with you before. right? Jay: Yes. Whether you are really bluffing or you are serious. The next morning. how did you like it? Jay: Okay. what can you do on a 36-month lease? Reaching Agreement 181 . Example 1 Jay Vahaly has purchased three new Toyotas from Pembroke Toyota over the past twelve years. or go after you and perhaps make a new concession in order to get you back to the table. He really likes it.
They’ve talked about retiring in recent months. Sue: I’ll try. Jay: What? I was thinking the lease payment would be. they came down to $199 more on a thirty-six month lease. (15 minutes later) Sue: Well. Jay. a successful musical instrument sales and rental store. $100 more. I thought I’d get a fair deal. Sue: Sorry.) Conclusion Jay knew his BATNA (best alternative to a negotiated agreement): to go somewhere else if the deal isn’t good enough. (Jay got in his car and drove home.Sue: Give me a few minutes and I’ll find out … (20 minutes later) Sue: Well. (He walks away) Sue: No. Jay. He was prepared to keep his Avalon if the lease was even $1 more than his limit. He effectively used the walk-away tactic to let Sue know that he was firm on the price. Please go back and work out a lower lease payment. but 182 50 Practical Negotiation Tactics . Example 2 Larry and Judy Bizannes own the Bizannes Music Mart. Jay accepted. you can turn in the Avalon and get the Highlander for only $249 dollars more per month. at most. Sue called him as soon as he walked in the door and offered another $50 break on the lease. I’m disappointed. These Highlanders are hot items! Jay: Well. Jay—wait. Jay: I guess I’ll go to Dixie Toyota and see what they will do for me. Let me try again. That was the figure he was looking for.
(Judy and Larry walk into the back room and close the door. so why are you here? Michael: I’ve discussed it with my partners. today. Larry: Yes. and we gave you our price. Larry: Michael.both of them love their store. our accountant said it’s worth $6 million. and I’m not interested in less. You rejected it.) Conclusion Larry and Judy used the walk-away tactic and stayed away for two months in order to convince Michael that they were firm on their price.0 million. go back to your office. In reality. Michael calls on them again with a check for $5. One day. Judy: Larry. but their continued walkout convinced Michael that they would hold firm.5 million for the building.5 million. and I’m prepared to offer you $4. Two months later. What do you think? Judy: Larry. you’ve already told us that. Reaching Agreement 183 . Michael Roberts.5 million. come out here! (Judy comes out from the back room. and he is offering us $4. He met with Bizannes twice before. with a certified check. Michael: Well. Larry: Judy. a local developer. I still want to develop this block. which the Bizannes accept. they were prepared to accept $5. Larry.) Larry: Michael is here again.5 million. Larry. visited their store. after no contact from Larry or Judy. and I only need your building to own it. How’s business? Larry: Great! I’m surprised to see you again. Michael: I have a check right here for 4. let’s eat lunch. Michael: Good morning.
Each party wants their offer chosen. each party submits their ﬁnal offer on each unresolved issue (usually in writing) and the arbitrator chooses one as the ﬁnal settlement as it has been submitted (no changes or compromises). Six months later.000. But he isn’t allowed to try to find a “middle ground”—just to choose one position or the other. In ﬁnal offer arbitration. which she has kept in a barn for over ten years. both sides have agreed in writing to accept the arbitrator’s decision. Both involve the use of third parties who are objective. Jenny has an antique Singer sewing machine. That was the deal. Lynne and Gary bring the restored Singer to Jenny’s house. In mediation. I won’t take it. One day Lynne dropped by for a visit and the discussion turned to the old Singer. Jenny: No. We have a few dollars invested in parts and we had fun working on it. and would be able to restore hers as well.Tactic 49: Final-Offer Arbitration Mediation and arbitration are two well-known ways of resolving sticky disputes. which is generally voluntary. 184 50 Practical Negotiation Tactics . I offered it to you for nothing. In most arbitrations. Jenny told Lynne she could take the old Singer that she has no interest in (and doubts that it is worth restoring). 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. Lynne: No! I suggest that we each write down our position and let Dad choose one of the two as the final decision. Lynne: No. Lynne told Jenny that she and her husband Gary have restored two other Singers. Keep the $1. Jenny told them to sell it. Lynne responded that this was their intention. Let’s split the money. They inform her that they put the machine on e-Bay and have an offer of $1. the mediator works with both sides to resolve certain issues but has no authority to make binding decisions.000. Example 1 Jenny and Lynne are sisters. In arbitration. the arbitrator is given the authority to make the parties comply with the ﬁnal and binding decision. so they generally give up some ground and try to make the offer appear as fair and reasonable as possible.
The union’s position could have run into millions of dollars. but we’ve made no movement on any of them since we started. At best. I have chosen management’s offer to keep it as it is under the current contract. They should get the other $950. Example 2 Ralph: Well. the old machine was only worth $50 when Lynne hauled it away. I can’t see any way to reach an agreement. Tina. binding decision on the three items. Tina: Yes. Ralph: I know. we are down to only three unresolved items. he did not need to “haggle” with them. since he could only choose one offer. so I am invoking the finaloffer arbitration ground rule we have in place. on Friday. Their father found Jenny’s position to be the most reasonable. Conclusion Jenny’s final position was that she receive $50—the maximum possible value of an old “junker. first on the health insurance co-pay.) Judge Ryan: Here is my written. I’ll buy that.Jenny: Dad: Okay. Tina: Good. and meet back here in 72 hours—3:00 p. based Reaching Agreement 185 . (One week later) I think Jenny’s position is the most reasonable. Then we both submit our final offers to Judge Ryan within 48 hours. As a brief explanation. My troops are getting restless. Ralph: Right! (Friday at 3:00 p. Any increase in value was due to the work of Gary and Lynne.m.” Lynne proposed a 50-50 split.m. after six weeks of negotiating.
reasonable resolution to their last three unresolved issues. but we agreed to this process. No increase has been given for six years. It will only cost $120. 186 50 Practical Negotiation Tactics . I have chosen management’s offer because the union did not justify why the past practice should be changed. and peacefully finalize a contract that contained several important gains for both sides.Ralph: Tina: on last year’s data. Well. At least we both saved time. I’m not happy with your decisions. and stress. and an item that large should have been negotiated at the table. on the merit pool distribution method issue.000—less than 1 percent of the total package. Ralph. Conclusion The final-offer arbitration process enabled the parties to gain a fast. Second. Finally. nor why their method was superior. Now let’s get a signed contract. on the clothing allowance. I have chosen the union’s final offer. money. I’m sure you realize that we could have taken six more weeks to reach the same point.
they looked at this particular house on their own. At the very least. Seller: Yes. The owners were selling the house without a real estate agent. and decided to stop by to see if they liked the house. They finally looked at a house they really liked. Seller: We’re asking $152. Example 1 Bill and Paulette had been house-hunting for some time. The goal of recording the precise details is to either avoid any misunderstandings or address them before the talks conclude. If we shake hands on it right now. everyone is busy grappling with the details of the negotiations. They were not the only couple to come to the open house.000. Bill pulled the seller aside. seeing the agreement in writing will force both sides to acknowledge what has been said and agreed to in the negotiations. Obviously. Bill: Bill: Can we talk to you a minute? What’s your asking price? And that includes the appliances in the kitchen? And all of the drapes and blinds? Okay. not the furniture. The party who writes down what has been agreed upon right away might have some advantage in precisely wording the agreement to that party’s advantage. Bill: Reaching Agreement 187 . We’d like to make you an offer of $150. however. and felt that they would have to work fast to make an offer before someone else did.Tactic 50: Commit the Offer to Paper You can often control the progress and direction of a negotiation by writing down the agreements or understandings as they are being reached. During a discussion.000. all the usual stuff in a sale. Bill and Paulette fell in love with the house. and one of the other couples looked very interested. we won’t be involving our real estate agent. They saw the “For Sale” and “Open House” signs. and while Bill and Paulette had been using an agent to help locate houses.
but I’d like to make sure there are no misunderstandings. real.000. he began to have “problems” with her job performance. he listed the stove.Seller: Just a minute. In the section for fixtures and miscellaneous items to be left on the property. If it’s what you meant. Example 2 Monica brought a sex discrimination charge against her employer. and the two area rugs were specifically included. in fact. When he had the chance to put the deal in writing. the refrigerator. that’s what I meant. Let me just get the standard “offer of sale” form and fill out what I hear you saying. then we have a deal. Under the section for appliances to be left on the property. and the two area rugs. the house is yours.000 and added the additional items to “sweeten the pot” and give Bill and Paulette a deal they couldn’t refuse. In her complaint. Conclusion The seller had always intended to leave the garbage disposal. since he probably would have missed them) Yes. look this over. she said that her supervisor had repeatedly asked her out. the hutch. (The seller recorded the offer of $150. The supervisor assured the employer that there was no basis for her complaint. The employer’s affirmative action officer looked into the charges and determined that 188 50 Practical Negotiation Tactics . and the garbage disposal. and that the problems with her job performance were. and had been prepared to drop his price to $145. Seller: Okay. and two area rugs. all window blinds and drapes.000. I think we can work something out. and that no one would ever say that he was guilty of any type of sexual harassment or sexual discrimination. It worked. a public agency. Bill: (pleasantly surprised to learn that the garbage disposal. and when she refused. the hutch.) Seller: So. he left the price at $150. The supervisor pointed out that he had a staff of 20 or so women. he listed an attached hutch in the kitchen. Sign here.
000. Why’s that? Well. But the employer doesn’t want to go through the expense and publicity of a trial. but said that fighting the charges would be a long. by this time. drawn-out. He’s happy to prove that in court.000 without actually having to prove anything.there was little basis for the complaint. It might be standard when there’s a settlement. and expensive matter. He offered to send settlement agreement papers to her. and must agree not to tell anyone about the $100. I’m He: She: He: Reaching Agreement 189 .000. then Monica had to acknowledge that the supervisor did nothing wrong. settling—What difference does it make to her? She’s getting her $100. Look. The supervisor insisted that if the employer felt he had to settle. you didn’t mention in the agreement that in exchange for the $100. Withdrawing.000. but it’s not standard when a complaint is formally withdrawn.000. The employer’s lawyer told Monica’s lawyer that the employer was ready to settle the deal for the $100. the supervisor says he did nothing wrong and that Monica just misinterpreted what he said. even though you are paying Monica because we can prove he did do something wrong. Monica’s lawyer (She): Employer’s lawyer (He): She: I was surprised by your settlement documents. even though we’re certain we would prevail. found a new job and wanted compensation for “embarrassment” and lost wages in the amount of $100. She thinks the withdrawals and the secret settlement will be seen as some kind of admission on her part that she shouldn’t have brought the claim. my client is supposed to formally withdraw the complaint rather than just settle it. Monica had. And the confidentiality clause is standard. You’re just trying to make it seem as if your supervisor did nothing wrong.
000.She: authorized to pay $200. but word did get out that a public agency paid $200. 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. There was a confidentiality agreement.000. It was made clear that the employer had paid the additional $100.000 and the conditions of the offer. but that’s under the same conditions—the claim must be formally withdrawn and Monica can never reveal the amount of the settlement.000 just to get the employee to “withdraw” the complaint. It would have been a better strategy in this situation to raise the issue of withdrawing the complaint during the actual negotiations.000 when all that was asked for was $100. Monica accepted the $200. 190 50 Practical Negotiation Tactics . I’ll take your offer back to her and let you know.
However. commitment.SECTION IV: PUTTING THE AGREEMENT IN WRITING s you can see. As these examples of personal and business negotiations show. talking is not always the same thing as communicating. A union contract. I thought you said something else. a written document is hardly necessary. depend on the kind of negotiations in which you are involved. it would have been easier to resume negotiations at a later date. reaching an agreement is sometimes a long and difficult process. most certainly needs to be in written form. however. even an informal agreement benefits from some type of written documentation. A Communication Hearing is not necessarily the same as listening. “Oh. “That may be what I said. Putting an agreement into writing serves three purposes: communication. The degree of detail and formality of a written document will. then the parties have to abide by the agreement. the three sisters reached an amiable agreement. and contract. Certainly someone has said to you.” By the same token. rather than attack each other. If the agreement reached at the time had been put into writing with all three sisters signing it. Reaching an agreement is the first step.” Clear communication is essential if you want to reach an agreement and have it abided by. it is much more effective in the long run when the parties enter into “win-win” agreements. When two friends agree on what movie to see. Think of how often you have said to someone. of course. operating under an agreement after it has been reached can be even more difficult. Putting the Agreement in Writing 191 . but it was not what I meant. Unfortunately. In Tactic #17 (Package Items). but some of the decisions were put off for a couple of months. and when they agree to solve problems together. when they engage in honest “give and take” negotiations. One way to help the parties abide by an agreement is to put it into written form.
” In Tactic #14 (Don’t Always Hide Your Weaknesses). His mom could more easily enforce the agreement if she had it in writing. Oftentimes just seeing the agreement in black and white conveys its import as well as or better than hearing about it. he can be reminded of the details because it’s all there in black and white. seek information. sounds. that is. or movements being used by the sender. the message being conveyed and received might be understood differently. Larry wouldn’t have had to argue over a bill for the plumbing work his cousin Will did if he had asked for Will’s estimate before accepting his offer to help. you have created something tangible that can be referred to in the future when memories become fuzzy.Communication is a process that involves a sender and a receiver. 192 50 Practical Negotiation Tactics . Who isn’t excited about buying a brand new SUV or truck? Until. or express a thought or emotion through words. The sender wishes to convey an idea. nine hundred and forty-four dollars—$22.944. or movements. pictures. pictures. If Jason fails to live up to his side of the deal. Writing an agreement down gives the parties an opportunity to use more-specific or precise language and eliminate some of the emotion that might have accompanied the negotiations. the price is spelled out in the loan document as “twenty-two thousand. 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. 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. When communication is limited to the spoken word only. Negotiations are often necessary because there was a “misunderstanding” that could have been avoided if the parties had put their agreement in writing. sounds. And because the sender and the receiver are two unique individuals. The receiver has to decode the message being sent by trying to understand and interpret the words. In Tactic #4 (Use Objective Criteria). the opportunity for the sender and the receiver to misinterpret is greater than if the communication is first spoken and then written.
the address and description of the real property. which. details such as what fixtures stay or what appliances go can be easily overlooked. WHY? The “why” of an agreement is generally the explanation of the mutual obligations or advantages the agreement represents—the reason why the parties began negotiating in the first place. what. how many. why. Carefully and completely describe the subject matter of the agreement. When you are ready to commit yourself in writing. ask yourself the basic questions of who. your plants die because the house-sitter wasn’t told to water them. Your spouse will share some responsibility for failing to make that duty clear in the agreement if. Putting the Agreement in Writing 193 . one party will change behavior in exchange for something of value from the party who wants the behavior changed. protect yourself by having a written. WHAT? The written document should clearly describe the item(s) covered by the agreement. One party wishes to buy what the other wishes to sell. where. and so on in standard contract form. Both parties must receive a benefit or something they personally consider of value. Here’s what we mean.Contract Finally. which kind of. before the trip. Generally. Failure to do so can lead to big problems. and getting all the parties to sign it usually creates an enforceable contract. If you have agreed to pay someone to house-sit while your family is on vacation. say. when. and put that information into the document. as many people learn when they purchase a home. pulling an agreement in writing. signed. have your spouse also agree to the details of the agreement. in writing. leading to misunderstandings and contract disputes. and how much. dating it. You can informally enforce an agreement just by showing the individual(s) the signed copy as a reminder of the substance of the agreement and their commitment to it. or it isn’t an agreement—it’s merely the conveying of a gift. WHO? Provide of the full names the parties necessary to the agreement. and dated agreement. You can do this more formally by taking them to court (perhaps as a last resort). one party will work if the other party pays for the work. In either case. However. the real estate contract includes information about the buyer and seller.
the better. agreed to the same thing. dating it. in fact. if that becomes necessary). which one or which kind of. Putting an agreement in writing. The more-specific and clear these details are. It gives the parties an opportunity to really buy into the deal. and having all parties sign it ensures that the parties have. 194 50 Practical Negotiation Tactics . depending upon the deal: when or where. how much or how many.The remaining questions fill in the details of the agreement. And it can create a tangible reminder of the deal (or an enforceable agreement.
and how they can be used: Exercise Forms Putting the Agreement in Writing 195 .Personal Negotiations Negotiation situation: Parties involved: Issue: Tactics that might be helpful.
and how they can be used: 196 50 Practical Negotiation Tactics .Business Negotiations Negotiation situation: Parties involved: Issue: Tactics that might be helpful.
________________ 9. ________________ 4. ________________ 2. ________________ 10. ________________ 6. ________________ 8. ________________ 5. ________________ 3. ________________ 7. ________________ Tactic# How will I use this tactic? (Application) _________________ _________________ _________________ _________________ _________________ _________________ _________________ _________________ _________________ _________________ ______ ______ ______ ______ ______ ______ ______ ______ ______ ______ Notes Putting the Agreement in Writing 197 .Name of Negotiation Tactic 1.
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1991. and C. M. Calif. 1988. M. D. New Jersey: Prentice-Hall. Irwin. You Can Negotiate Anything. Ury. David. Gavin. 2004. C. The Relaxation and Stress Reduction Workbook. Roger. Successful Negotiation: Effective “Win-Win” Strategies and Tactics. and J. Inc. Inc. Los Altos. Chicago: Richard D. and J. 1980. New York: M. Inc. and S. New York: Penguin Books. K. Maddux. Oakland. 1999. Mediation. Inc. Negotiation Skills. Cleary. Saunders. 2001. 7th ed. University of Missouri: Columbia Press. Eshelman. New York: Simon and Schuster. Prospect Heights. Victor. and Law. Cohen.: Waveland Press. Getting Together: Building Relationships As We Negotiate. M. 1987. R. Fuller. Calif. Patrick J. Upper Saddle River. 1997. Sharpe. Upper Saddle River.REFERENCES Carrell. Negotiating in the Real World. Brown. Gotbaum. Roger. Domenici. Clark. George. 2nd ed. New York: Basil Blackwell. New Jersey: Prentice-Hall. Ill. and M. Fisher. 1989. 1991. LittleJohn. Inc. 1996. E. 1988. New York: Penguin Books. Fiske. The Negotiator’s Handbook.: New Harbinger Publications. The Negotiation Handbook. New York: Bantam Books. Practice. Heavrin. R. W. Inc. Getting to Yes: Negotiating Agreement Without Giving In. J.. 2001. Herb.: Crisp Publications. W. Fisher. Patton. and B. and S.E. Lewicki. Minton. 2nd ed. R.. Pocket Negotiator. Labor Relations and Collective Bargaining: Cases. The Essentials of Negotiation. Inc. McKay. Kennedy. References 199 .
Labor Relations in a Global Economy. New York: M. New York: Simon and Schuster. New York: Penguin Putnam. 1987. Thompson.E. The Eight Essential Steps to Conflict Resolution. Weeks. 2001. Howard. R. Ury. Sharpe. Lectures on Negotiation Analysis. Massachusetts: PON Books. G. Upper Saddle River. 1996. B. Inc. The Art and Science of Negotiation. Shell. William.negotiationsources. Inc. Dudley. L. Cambridge. New York: Viking Press. George. Getting Past No: Negotiating with Difficult People. 1991. Inc. Bargaining for Advantage. C. The Art of Negotiating. Raiffa. 1981. J. New Jersey: PrenticeHall. Raiffa.Nierenberg. Lexington. 1982. The Mind and Heart of a Negotiator. 1999. Taking Charge/Managing Conflict. Massachusetts: Harvard University Press.org 200 50 Practical Negotiation Tactics . Howard. New York: Bantam Books. Stulberg. Inc. Massachusetts: D. www. 1994. Heath and Company. Gerald I. Tsogas. 1998. Cambridge.
Books published by Dr. He has authored over 50 scholarly works in some of the leading management and human resource journals including The Academy of Management Journal. The Personnel Administrator. he was elected to the City of Louisville Board of Aldermen for five terms. and negotiations. and the University of Louisville. The Academy of Management Review. The Journal of Accountancy Training.D. Personnel. Human Resource Management. and Public Personnel Management. These positions enabled him to build a sizable management consulting practice while teaching at the University of Louisville. The University of Nebraska-Omaha. M Christina Heavrin J. in Economics from the University of Louisville.A. Bakersfield. In addition to negotiating numerous litigation settlements and contracts. organizational behavior. and served as President of the Board and Mayor Pro-tem for three terms. During his academic career he has received awards for both outstanding research and teaching. HR Magazine. and MBA and B. Carrell has held academic positions at California State University. Business Forum. has practiced law for 28 years primarily in the public sector as an attorney for local government in her hometown of Louisville Kentucky. In addition. Labor Law Journal. which is located in the greater Cincinnati area. Carrell are in the fields of collective bargaining and labor relations.ABOUT THE AUTHORS ichael R. Organizational Behavior and Human Performance. Morehead State University. Personnel Journal. Carrell is Dean of the College of Business at Northern Kentucky University. she has helped negotiate a number of major agreements such as a multi-million dollar property exchange that relocated major industries and railroads from the City’s downtown wharf resulting in the development of both an award winning public About the Authors 201 . Marshall University. Dr. He received his doctorate from the University of Kentucky. Most of his professional career has been spent in the Louisville area and has included positions as a personnel director and labor negotiator.
a multi-million dollar expansion of Waterfront Park that included a major environmental clean up and the construction of a Minor League Baseball stadium in downtown Louisville. the City and a for-profit hospital for guaranteed indigent health care services for city residents. Heavrin is serving as Special Counsel to the first Mayor of the Metro Government where her duties include negotiating initial labor agreements between the Metro Government and its unionized employees. Jefferson County. Ms. an agreement between the State of Kentucky.park and a successful industrial park in the City’s enterprise zone. Recently voters approved the merger of the City of Louisville and Jefferson County Governments. 202 50 Practical Negotiation Tactics . a tax sharing agreement between the City of Louisville and Jefferson County that enabled the two governments to share revenue of over two hundred million dollars and to combine their economic development programs.
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