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



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

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

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

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

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one for another. including those that are less obvious. decide how complicated the issue is. thus allowing each side to achieve one of their goals. if the situation involves a number of detailed or complicated issues or the stakes are relatively high. They’re referred to as “win-win” because each side can achieve their goal. Examples: • a signing bonus (employee goal) traded for an annual travel budget (employer goal).SECTION II: THE NEGOTIATION PROCESS Before you begin the process of negotiation. etc. state. The “Quick Model” approach outlined below is good for simple negotiations. the process will be fairly straightforward. 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. • an allocation for moving expenses (employee goal) traded for a set number of travel days per month (employer goal). On the other hand. the process will probably take several weeks or months as the parties move through all the stages. The Negotiation Process 9 .) • primary sales territory • a starting date Exchange Issues: Those issues that might be traded. The Quick Model The easiest way to prepare for a simple negotiation is to identify all the issues. If it is a relatively informal situation. Examples: • office location (city.

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

The Negotiation Process Table 1: The Negotiation Process: Seven Basic Stages Stage 1 Identify situation as one for negotiation Preparation: Key Factors – Time. Information. Power #1– #6 Stage 2 Strategy: Choose Overall Approach to the Process #7– #14 Stage 3 Initial Offer: Getting Started Stage 4 Counter Offer: The "Give & Take" Stage 5 Pressure Bargaining: Striving for Conclusion Stage 6 Key Methods: Achieving Progress Stage 7 Reaching Agreement: Settlement of Impasse Tactics to Consider #15– #21 #22– #31 Negotiation Phase #32– #38 #39– #46 #47– #50 Initiation Phase Resolution Phase 11 .

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Stage 1: Preparing to Negotiate
n many negotiation situations, the parties have time to prepare for the actual bargaining. In other situations, such as when you’ve been served something at a restaurant that you did not order, there is no time to deliberate. You have to be prepared to instantly recognize that the situation can be negotiated, and begin to bargain. You can have time to prepare if you simply ask for it. For example, at the end of an employment interview for a management position, the candidate was surprised to receive a job offer on the spot. The candidate wanted the job, but wisely recognized that she could negotiate the contract. She said that she was very interested, but needed forty-eight hours to make up her mind. She used the time to talk to current employees, and developed a list of perks and conditions that she then negotiated, before accepting the position. To prepare for a negotiation, do as many of the following activities as you can: 1. Have realistic objectives. Identify everything that can be negotiated, and set realistic objectives for each item. If, for example, price is a factor, determine the desired outcome and set a minimum (or maximum) acceptable outcome, beyond which you will walk away and choose another alternative (see Tactic #1: Know Your BATNA). Also determine your opening offer in light of your desired and your minimum outcomes. It is often helpful to list each specific item to be negotiated and your minimum acceptable offer for it, as well as your desired goal and an acceptable opening offer (see Tactic #5: Listing Items). Thus, for each factor, write down and stick to three figures:




1. An opening offer. 2. The desired “best” offer. 3. A minimum (or maximum) “worst” offer. 2. Learn about your opponent. By whatever legal and ethical means possible, learn everything you can about your opponent. Talk with friends, neighbors, co-workers, past negotiation foes, even family members. If you are able to guess or find out about your opponent’s real objectives and/or limitations, you can gain an invaluable edge (see Tactic #2: Know Your Opponent’s Real Objectives). 3. Gather all the facts. During the heat of negotiations, presenting critical facts or objective criteria can turn the tide in your favor. You can usually anticipate and collect this critical information in advance during the preparation phase (see Tactic #4: Use Objective Criteria). 4. Set ground rules. In labor negotiations, the parties first agree to ground rules such as where, when, who, and how often the negotiation sessions will occur. Detailed ground rules are not needed in most everyday negotiation situations, but there are times when they help people come to agreement. Agreeing in advance on the location for discussions can give one side an advantage (see Tactic #3: Control the Setting), but in other situations, the critical ground rule will be about timing (see Tactic #6: Timing is Everything), forcing both sides to reach agreement faster. In negotiating with family members, friends, or neighbors, one well-advised ground rule is to stop the talks as soon as anyone raises his/her voice, curses, or makes a threatening comment.


50 Practical Negotiation Tactics

Tactic 1: Know Your BATNA
At what point will you walk away from the negotiation? You improve your position in any negotiation if you can walk in already knowing your BATNA—your best alternative to a negotiated agreement. The BATNA is the outcome you prefer over what the other party has proposed; if you define it at the outset, you are less likely to agree on something during an emotionally charged discussion and regret it afterward.

Example 1
Harvey Huff bought a new 1956 Chevrolet from a local dealer. After forty years, he finally decided to sell the car he had loved and carefully maintained in original condition. Harvey did not need the money, but he intended to move three thousand miles away, to a condo in Arizona. The ad he placed in the local newspaper produced only one potential buyer: Patrick Knight. Harvey: Mr. Knight: Harvey: Mr. Knight: Harvey: Mr. Knight: Harvey: Mr. Knight: Harvey: Mr. Knight: Harvey: Well, now that you’ve checked it out, how do you like it? It’s in great condition, just as you described it. Any questions? Will you take less? No. It’s easily worth at least $20,000. That’s the price. $18,000, tops! No thanks. Okay. $20,000. I need it for a new restaurant. Restaurant? Yes. We cut off the top of the vehicle and people sit in it and get served their meals in our “oldies dream car!” Never mind, I’ll keep it. I haven’t maintained it for all these years just so you can destroy it.



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

This is a good thing to know.000. A person who has to sell her home because her company is relocating her. Preparation 17 . it’s still perfect. and told John several times to let him know if he ever wanted to get rid of it. Just as important is the why. Just running out of space. for example. How much are you thinking it’s worth? John: Well. what the other party’s desired outcome is. you know. you still interested in my rifle? Of course. so Tom was surprised when John called him out of the blue one day with a proposal. Are you finally ready to sell it? Yes. I guess I couldn’t take less than $20. Gosh. You have an advantage and are in a position to produce a better agreement if you understand what motivates your opponent and what “hidden” interests lie behind their position. Make me an offer. I think so. John assured Tom that this would never happen. If you are the party making the offer on the house. it’s to your advantage to know what is behind a seller’s decision to put it on the market.Tactic 2: Know Your Opponent’s Real Objective Each party in a negotiation will know. Tom: $20.000? That’s more than I planned. I’ve been thinking of getting rid of it for a while. 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. Example 1 Tom had always admired John’s 1861 Confederate rifle. she might have to take a lower offer just to be able to move. What changed your mind about getting rid of it? It is still in perfect condition. sure. right? John: Sure. at some point. I’ll have to think about that. It is extremely rare—one of only 100 made with that bore and handle. John: Tom: John: Tom: Tom. because if the company does not provide relocation benefits.

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

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

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

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

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

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

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

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

Example 1 Shari. You can’t treat me the same! Mother: Well—so we’re talking about several issues. and (4) different treatment from your sisters! 26 50 Practical Negotiation Tactics . has asked her mother for a $10/week increase in her allowance. what else can I do. Shari: I’m four years older than the next-oldest. not just an allowance increase! There is: (1) a $10 increase. not on what you want to spend.Tactic 5: List All Items to Be Negotiated Break down the issues to be worked out into separate items ahead of time. Shari: Well. your little sisters will want equal treatment. 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. you should each put together a “package” of several items on the list and work out a win–win agreement for these things. I need more money for clothes and CDs. baby-sit your sisters. Mother: That’s a large increase—and we just raised it last year! Shari: Well. (2) a later curfew. and ask the other party to add to the list. This strategy can build trust in the negotiation process itself. (3) more chores. besides washing the dishes every night and cleaning my room? Mother: You could cook dinners. Once you both agree on the list of things to be negotiated. a sixteen-year-old who lives with her parents and three younger sisters. Mother: But your allowance is based on what you earn in your weekly chores. wash the cars. It will cost me more than $10—about $35 per week. if I give you an increase. and for going out with my friends. cut the grass.

while your Dad and I go out. Now we have a package deal to propose … Preparation 27 . The trading of items (where initial demands are discussed and agreed upon) begins. while the mother won a Saturday house-cleaning and a night out each week. which the other children would have requested as well. Union: We will agree to your proposal on item #6 (the number of paid holidays) and item #14 (the new overtime hourly rate). Example 2 The union and management negotiating teams opened discussions with a list of 48 demands. I’ll pay you $10 to babysit every Wednesday night. And if you clean the whole house on Saturday. since all of their items were included as requested. Shari: (pause) I like it! Conclusion Shari’s mother helped negotiations along by listing all of the items being discussed. The union’s chief negotiator. opens by proposing the list of items. An allowance increase. if you agree to our proposals on item #3 (the paid vacation schedule). Now it is time for each side to list their desired outcome for each item. Then a “win-win” solution could be determined. Management agrees.Shari: Right! Mother: So … I suggest no allowance increase. was avoided. and item #23 (the wellness program voucher). Management: (after calculating the total value of the five items during a break period) We agree to your package of five items. in the first session. item #11 (the clothing allowance). you get to stay out an hour later that night. Shari got the $10 she wanted and a later curfew. but unlike your sisters.

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

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

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

Conclusion The leader of the pro-project group recognized that they might have a unique timing advantage. because one member of the anti-partnership side had to leave at that time to attend a church service he had not missed in 27 years.m.. A member of the pro-project group quickly called for a vote after the leader gave a signal.m. and it worked.m.deadlock. When the meeting resumed at 4:00 p. At 5:30 p. Both sides caucused: The leaders on each side met to negotiate a compromise. during an hour break in the meeting. the pro-project leader told his members to filibuster until he gave a signal and called for another vote. The measure passed 6–5 at 5:45 p.. For weeks.m. and the meeting was adjourned. He planned for it accordingly. the project had been stalled by 6–6 votes. Preparation 31 . Then. timing was everything. a member of the anti-project group left the room. That effort failed... as predicted. in the end. the leader of the pro-partnership side heard someone say that the meeting needed to end by 5:30 p.

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

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

If you consider the demand ridiculous. but not so high as to end the negotiations before they begin. her real estate agent told her that they were probably not going to get a buyer because she is asking too much. so do not underestimate what you might be able to achieve. Planning a Strategy 35 . your request must not be so low that the other party concludes that you are not negotiating in good faith. but the house has increased in value. and then look at the demand from your opponent’s perspective. so think this through well ahead of time. And I don’t see a lot of difference in the neighborhood. However.Tactic 7: Decide How “High” Is High Your first demand in the negotiation process is the most important decision you will make. Carol wants $160. Example 1 Carol has been unhappy with the house she and her husband bought six years ago. Surely there’s some flexibility in your asking price. Anyone buying the house would want to change wall colors or add new carpets. six years ago you bought it for $60. You are not likely to get more than you request. but certainly not exceptional in any way. but the redecorating is of little value. and just refuses to reduce it. with no success. as well. we’ve put a considerable amount of money into a new air-conditioning system and in redecorating. we think $160. It’s a good neighborhood. Carol: We really want to sell.000. Buyer: We really like the house. Finally. First. We also think that the neighborhood has improved over the last few years. but we simply can’t take less than $160.000. Be realistic.000. The market hasn’t gone up that much in six years. Your demand should be high enough to give you room to compromise.000 is very high. but quite frankly. it is likely that your opponent will. Buyer: The air conditioning might have increased the value of the house. She has had it on and off the market for the last five years. After all. one buyer shows some interest. Carol: Maybe not. Each time.

Buyer: Good luck!! Conclusion The buyer expected Carol to counter the $100. Example 2 The law firm of Bits & Bites was a Sioux City institution. Inquiries to other law firms were not very helpful because in almost all of the instances. but they have no idea what the value of their firm’s name might be in this nearby city. Neither Edward Bits nor Edmund Bites. In any event. Carol drove off a potential buyer by setting an asking price that was just too high. and then $10. When Carol refused to budge. the buyer took it as a signal that either Carol didn’t want to sell.000. the transaction also included some degree of consolidation of the law firms involved—not just the use of the firm’s name.000 offer by coming down in price at least a little.000? Carol: We really can’t take less than $160.000 or 1% of profits (whichever is less) over the next ten years in order to use the name. 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. as to how you think the name is going to benefit you. We’re curious. we are certainly interested in your request to “buy” our firm name to use in your city. the founders of the firm. enjoying a statewide reputation for quality representation. though. were still alive.000 immediately. The partners are interested in selling the name.Buyer: What if we offered you $100. The other law firm was prepared to pay $100. 36 50 Practical Negotiation Tactics . 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. or she has unreal expectations. Here’s how the initial negotiations went: Partners: Well.

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

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

Your opponents will want to avoid confrontation and unpleasantness with the “bad guy” and are likely to be more willing to cooperate with you. since they are sitting out in the driveway with it. Andy: No. (bad guy) and implies that his or her side will hold firm on their demands. Andy: I want them… Paula: Go ahead and take them. threatening. One member of your team acts friendly to people on the other side (the good guy) in order to gain their trust and support. Andy and Paula: Yes. And take the leaf-catcher attachment and the gas can.400 if the catcher and can are included. Peggy. so I’ll take it. Example 1 So.200. not for $1.200! We should get $1. Half what it cost us new. angry. I heard that you want to sell your riding mower. what’s your price? Andy: $1. I don’t know what the deal is now. you’re really moving! I hate to see you leave. Paula: Go ahead and ride it home. Peggy: I assumed they went with the mower. I can use them. and I know how you take care of things. we won’t need it at the new condo. Andy and Paula. They cost about $300. etc. only three years ago. Andy: No. I’ll go home and you can call me if you two can reach an agreement. while another acts difficult. Peggy: So. I want to keep those. Peggy: Planning a Strategy 39 .Tactic 8: The Good Guy/Bad Guy Routine The “good guy/bad guy” routine is a useful one. Peggy: I’m hearing one thing from Paula and another from Andy. Peggy: That’s fair.

Miguel: I’ve figured $4. Let’s talk. causing our reps to spend hours on the road. Example 2 Sandy (business owner): Miguel and Liz (representatives of a computer firm). 40 50 Practical Negotiation Tactics . and your training programs. Miguel: But not at this ridiculous rate. We estimated that it has cost us more than $50. the quality of the technicians’ work. perhaps even unintentionally.200 will be about right… Sandy: I can’t begin to pay that! Liz: Calm down. Sandy: What? First of all. your rate of $3.000 per month is one of the highest in town.000 in service calls last year alone because your damn people don’t take care of the equipment. And cut the training hours from 55 to 20. And we want to change the 24-hour service response time to 48 hours. firm offer if they decided to continue negotiations. your account has taken too much time. And we need to add a clause that holds your company responsible for machine damages. Sandy. She very wisely recognized the routine and forced Andy and Paula to give her a clear. we’re here to negotiate a new service agreement.Conclusion Peggy thought she was getting the old “good guy/bad guy” routine. She realized that it put her in an impossible negotiating position. Miguel: Well. You are located outside our primary service area. we’ve been fairly happy with your responsiveness. For the past three years. Sandy. Liz: But we still want to renew your contract.

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

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

I expected the bill to be higher than usual. (beginning to sound irritated. I would think you would have given me the best rate you offer new customers. of course it is not always possible to give existing customers some of the “offers” we have out. It hasn’t been increased at any time. I realize that that might be the rate I started paying when I first took your service over eight years ago. Mike. although he wasn’t really angry) Are you suggesting that it was my responsibility to advise you when one of your “offers” was available to lower my rates? How would such information even come to my attention? More importantly. Had you brought this to our attention before. 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. Well.10 per minute rate on your long-distance service. But as a very good customer of yours. Customer representative: Let me pull up your account. Mike: Customer representative: Mike: Customer representative: Planning a Strategy 43 . I would have known I was paying too much. but this was quite a shock. to begin now. But I am able to offer you a $. and I also realize that if I had examined my bill closely. 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. we certainly would have discussed your options.

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

The most-senior employees want to have the right to refuse overtime and have those less-senior employees take the overtime. and it’s not what we’re even talking about. lesssenior employees might be at greater risk of injury because they have to handle explosives. Where are your managers? Where is the training necessary to make Planning a Strategy 45 . Owner: I’m just not willing to let my best people refuse to work the extra shifts during our busy season. and it’s getting old. They will be putting the plant AND their fellow workers at risk by not being here. Working with fireworks is working with explosives. The owner was afraid that if the mostsenior employees routinely passed up the overtime and the overtime pay. The owner told the employees that he was worried that during the overtime shifts. I’ve got to have the employees with the most experience to protect this place. Employees’ negotiator: (with a stern voice) You have been saying this for three weeks. 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. The employees’ negotiator finally decided to use “indignation” to break the stalemate. On those overtime shifts. 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. that’s just not fair. Owner: Now. 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. and you just can’t be too careful. they would become dissatisfied with their pay and want their base pay increased.

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

called the “Reciprocal Buy-Sell Offer. A fourth option. All the rest of the estate has been divided among the family. or sell it to the first party and consequently receive the full amount from the first party—thus giving up the object. I’m willing to pay or let it go for $800. Mike: Mary Anne. The second party then decides to either buy it at that price and pay the first party.Tactic 10: The Reciprocal Buy-Sell Offer What do you do when both sides seek to own something when there is only one and it can’t be divided equally? You have three options: 1) Both parties can “bid” to own it. However. you’re the oldest. and split the proceeds. Susan. since this one is in perfect shape and it was Mother’s. you will decide if you want to buy it for that price or receive that amount from Mary Anne (but lose the grinder). so you set a price at which you agree to buy or sell the coffee grinder. 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. my kids and I looked on eBay and everywhere else and found out that coffee grinders in perfect condition sell for about $500. the executor of the estate. Then Susan. I’ll give you 48 hours to decide the price. 2) They can flip a coin. (two days later) Mary Anne: Well. Both sisters covet it. with the highest bidder paying the amount to the other side in compensation for their loss. Mike. has decided to use the “reciprocal buy/sell offer” process to settle this last piece of the estate. a well-known negotiations professor from Harvard University. Planning a Strategy 47 .” is the recommendation of Howard Raiffa. with winner taking all. 3) They can agree to sell the object to a third party. The first party decides on a price for which he or she will either buy or sell the object to the second party.

Susan: Mike: Well. Both came to Raiffa to help negotiate a settlement. I suggest a slight modification to the process. Two business partners had been working together for ten years to build a successful business. You will both agree. Thanks for making this last step as easy as possible. I choose to buy it.” Howard: Since in this case you are talking about a multi-million-dollar business. Agreed? Abe and Bobby: Sounds good! Let’s draft and sign a written agreement detailing the process. in writing. 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. 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. Lectures on Negotiation Analysis. After I open the bids. Example 2 Howard Raiffa described a consulting situation in which he used the “reciprocal buy-sell offer” process in his book. Here is my check for $800. They thus were able to determine the highest price each was willing to pay for it or receive for it. 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. and then decide how much more “emotional value” it held. I’ll pick it up tonight. Conclusion The “reciprocal buy-sell offer” process caused both Mary Anne and Susan to research the market value of the coffee grinder. (sixty days later) 48 50 Practical Negotiation Tactics . which will bind us to the outcome.

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

Looking at these statistics. Example 1 A young couple were discussing a possible purchase of new furniture for their living room. and forcing him or her to control the discussion of the issue. It can also work in reverse: establishing the other person as the expert. the one that was the most expensive was superior. The husband found the dimensions of the couches in the brochures and Web sites.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. The couple decided to limit their selection to those rated “excellent. He thus ended up having greater negotiating power. he decided upon a strategy: First establish himself as the “dimension expert. This strategy worked. she glanced at it and immediately deferred to his opinion. Based on seating capacity. When it came to comfort. and the husband felt like he saved them hundreds of dollars.” and then argue for the frugal alternative. so when the husband wants them to make an 50 50 Practical Negotiation Tactics . 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. This approach can also be reversed: The wife in this situation is a banker. and created a spreadsheet to compare the five best-rated couches on their list. Conclusion The husband became the “expert” in this situation by doing the homework. When he showed his wife the detailed spreadsheet. The wife was determined to buy the least-expensive brand rated excellent by consumer publications.” but there were substantial differences in price—differences that the wife did not see as a problem. They both expressed an interest in finding a couch that offered the most “interior” space. the one he wanted (one of the least-expensive) was superior.

a negotiator in a similar situation was able to get the other side to agree to include a plan that they had opposed only days before! Planning a Strategy 51 . and should therefore handle the problem. 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. he argues that she is the expert.investment decision or deal with an error in a bill.” If you spend many hours learning about Health Maintenance Organizations (HMOs). and Point of Service (POS) plans. 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. you gain an edge when negotiating a new plan for your company. Preferred Provider Organizations (PPOs).

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

The last cake we had was chocolate cake. so these hours worked out well. to 3:00 p. One day. and I really like white cake. Residents: Marilyn. and better than a fast-food restaurant with late-night hours and a drive-through window. This cake is white cake. We realized that if we cut the cake lengthwise. she opens her shop at 7:30 a. she got a visit from some of the residents. We really want you to go back to your original times. 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. 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. I can have the part with the icing and Bill can have the part with the cake and filling. your new shop hours have caused your customers to park in our parking spaces. That sounds like a wonderful solution. Now that her children are in college.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. Customers have started to park in nearby apartment lots. I helped with the bags without being asked twice. It was the type of shop the nearby residents preferred. and her children were in school.m. and keeps it open longer so she can attract customers on their way to and from work. so that your customers can park on the street. Example 2 Marilyn’s Memorabilia Store was located along the main commercial street of a residential neighborhood.m. because there is no parking along the street during morning and evening rush hours. and that’s not my favorite either. Marilyn originally set her shop’s hours for 10:00 a. Planning a Strategy 53 .m.

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

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

if I cannot carry a negotiated and signed deal to my board by noon on December 31.. Okay. Sue. we cannot agree to these development plans submitted by your company until we have reviewed how they will affect the historic buildings. can sell or give away what is left. your attorneys know the tax laws. if we are not finished. David: I understand your concern. being the oldest. 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. then the whole deal is lost because my company will lose $10 million in tax benefits under a federal law that expires on midnight. Allan: Let me confer with the city attorneys. All of us must come back before Saturday to take what is ours—agreed? Okay.m. However. 56 50 Practical Negotiation Tactics . this is December 29. Example 2 Allan: As the negotiating team for the city. we all leave. 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. Agreed. And besides. and I appreciate your interest in the historic structure. December 31.

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

and one of the ways to do that is to reveal a weakness at the beginning. Mom: I gave you money to buy a workbook a few weeks ago. His mother disapproves of his study habits. 58 50 Practical Negotiation Tactics . Unfortunately. and you can neutralize its effect on the negotiations. Mom: All right. but I have a problem in my Spanish class. as well as those of the other side. before your opponent tries to catch you off-guard. The objective is to negotiate from a position of strength. He knows that a D will mean that he will have to change the way he studies. Have a clear goal in mind AND all the information you need to make your points. we need to talk. We had one at the beginning of the semester that we were using pretty often. and I missed some assignments. but that was actually a different workbook. as well as strengths. and Jason knows he is getting a D in Spanish. while watching TV. I bought the second one. and we used it a couple of times.Tactic 14: Don’t Always Hide Your Weaknesses Be sure you know what your strengths and weaknesses are. first-quarter grades are coming out at the end of the week. He decided to preempt the discussion in order to make the best deal. Now. But don’t lose it again. don’t get mad. There will be times during a negotiation when you will want to catch your opponent off-guard. so he was able to prevail upon her to let him continue. Example 1 Jason likes to play video games as soon as he gets home from school and do his homework later. but his grades are good. One day mine disappeared. but remember that both sides have weaknesses. Control the use of the information. Did you buy it? Jason: Yes. Then the teacher went back to the first one. I’ll give you money for it. Mom: What’s that? Jason: A few weeks ago I lost my workbook. I’ll need to buy it again. and this usually means having all the right information. Jason: Mom.

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

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

750–$25. as illustrated in the following figure: Seller Resistance Point ($22. The initial offer sets the tone of the negotiations and reveals something about the strategy of each side.000) Settlement Range ($22. for example.000 Buyer Initial Offer ($21. Carrell and Christina Heavrin.750) Target Point ($24. 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. such as proposing to continue at the current rate or price.000) Target Point ($23.500) M $21. “Distributive” bargaining (“win-lose” or “zero sum”) is used. Adapted from Labor Relations and Collective Bargaining. by Michael R. Many negotiators make their initial offer the highest acceptable offer (Tactic #19: Make a First and Best Offer).500) Fig. 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. 2: Distributive Bargaining Process. 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. (2004). This is a practical starting point that will not anger the other side (and might even be expected). 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. Exchanging Initial Offers 61 . quick agreement. 190–192.000 22 23 24 25 26 27 Initial Offer $28. The negotiator firmly states that it is their best offer in an attempt to gain a nice. None is as important as the first one. Another common strategy is to start with the status quo.Stage 3: Exchanging Initial Offers any offers and counteroffers are made during a typical negotiation—sometimes even hundreds.

In this example. the other side does not agree to this value).000) is reasonable. the process quickly narrows to the range between the initial offers. thus producing a true “win-win” negotiation. the seller would immediately accept it because it is greater than the target point and the buyer would suffer a winner’s curse. 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. The settlement range is the distance between the resistance points. Two extremely helpful tactics to be used immediately after initial offers are made are Tactic #15: Caucus and Tactic #20: Posturing. Resistance points are the maximum or minimum beyond which a negotiator is likely to consider an offer unacceptable (and possibly walk out). these points have set the outer limits. Experienced negotiators will begin the negotiation of several items by quickly proposing such a package. See Tactic #18: Agree on Something As Soon As You Can. if the buyer’s initial offer was $25. each initial offer ($21. 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).000. and is the range in which most negotiations actually occur. it is termed the settlement point – not the “right price” or “fair price. 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. 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. After initial offers are exchanged. When the two parties agree to a price within the range.000 and $28. In the example. 62 50 Practical Negotiation Tactics . usually.” but the settlement price. A target point is the desired settlement value a party has set as a goal when negotiations begin. 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).

call a caucus so both sides can brainstorm new solutions to keep the negotiations going. and I already have 25 names.–10:00 p. We’ll just have chips and soda. the negotiations got out of hand when Shelly’s dad forgot what had been decided. or if a member takes on a role in the negotiations that has not been assigned to them. If the team is feeling pressure to concede on certain items. If the negotiations are heated. Unfortunately. 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. calling for a caucus gives you a chance to get your team to recommit to a particular course of action. We don’t want it to be a late evening. And that’s just my friends from school! I haven’t started Exchanging Initial Offers 63 . so we’ll have the party from 7:00 p.m. There are many ways to use this strategy. Shelly: Twenty friends? You’re kidding! I’ve just started on my list.m. Shelly. because it might disturb the neighbors. If the negotiations have suddenly gone in an unanticipated direction. Example 1 Shelly’s “Sweet Sixteen” party was coming up. and presumably had an agreement.Tactic 15: Caucus If you are part of a negotiating team. Her mom and dad had already talked about it privately. A caucus is certainly called for if individual members of the team become agitated or express frustration with the progress of the negotiations. a caucus can be used as a break to calm the situation down. make use of the opportunity to call for a caucus. A caucus is when a negotiating team calls for a break and leaves the negotiating table to confer in private. 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. so her parents sat down with their daughter to discuss the details. 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. Mom: We’re planning on having your party here on Saturday night. If negotiations seem stalled.

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

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

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

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

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

.. 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. and seniority will be used to determine who gets to choose the first day. Then we have a deal. Why didn’t you mention the color before? I didn’t expect to actually buy a new car today (note: not the truth). All three employees must agree to the schedule.Manager: Hobbs: Manager: Hobbs: Manager: Hobbs: Manager: We are offering you a great deal. 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. I’ll take the red one for $100 less. The three are sitting at a lunch table to discuss the schedule. The manager was convinced enough to sacrifice a final $100 for the throwaway. Hobbs successfully chose color as a throwaway item. Example 2 The office supervisor told the three internal sales representatives (Jenny. Employees will be paid time-and-a half for each of these days. Miguel. 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 .. The days in question are: Exchanging Initial Offers 69 .no it’s not. At the very end of the negotiations. 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.

They have decided to start over. January 2 None of the three are totally happy with the results. They agree. December 26. December 31 Miguel: November 25. but that is a secondary consideration. 24. 31 January 1. 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. January 1. A second and third round produced the following allocation: Jenny: December 23. December 24 Conclusion Carolyn has achieved her objective: She will be off December 24 and 26. and each chooses their days to work: Carolyn: December 27. Jenny and Miguel feel that they received something of value from Carolyn: She must work two more days than they must work. They all agreed to their schedules. January 1 Carolyn: December 24. if they let her choose the two days she will be off and the five days she will work. 26. 30. each made a first choice of days they will work. 27. in exchange for giving up earlier choices due to seniority. 31. This would allow Jenny and Miguel to each work only two days. Carolyn has decided to use as a “throwaway” the number of days she will work (previously. She proposes to work five days. 2 In the first round of negotiation. 70 50 Practical Negotiation Tactics . 26 Miguel: November 25. She got what she wanted by giving up something she did not value: the two other days.November 25 (the day after Thanksgiving) December 23. She would actually prefer to work the extra days and get paid time-and-a half. 2 Jenny: December 23. December 27. 30.

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

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

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

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

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

and he could pay it in annual installments over a five-year period. I think it only fair that I take over repayment of all the school loans. Frankly. we would have paid down our school loans more. I think that makes sense. Tim: Well. When we bought them two years ago. about the house and furnishings. an art gallery.Kathy: Hey. What do you want to do about them? Conclusion Having agreed to two items very quickly. Tim: Okay. hold on. as you remember. Kathy: I suppose we should look at the school loans next.. I got my convertible. Example 2 ABC Company. Okay. as long as the cost was approximately the same. entered into a contract through which ABC sold to XYZ twelve works of art by 19th century American painters of modest talent for a post–July 4th sale. we decided to each pick out our “dream car” and that we would not overrule the other’s choice. I don’t intend to “stick” you with anything. and you got your sports car. Kathy: Now. The monthly payments are about the same. 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. They also agreed that Tim wouldn’t have to pay her that amount for five years. even though the convertible is being paid for through a 48-month loan and the sports car through a 36-month loan. If both of us had been working the year I went to graduate school. I can hardly argue with that. and XYZ Co. yes. a wholesale art dealer. The first thing I’d like to talk about is what we are going to do about the cars. ABC usually uses UPS 76 50 Practical Negotiation Tactics .

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

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

Exchanging Initial Offers 79 . but ONLY if you have a bottom line or definite point at which you will accept an agreement and you believe the other party will make a reasonable offer. Ann: Well. Okay? No quibbling. but if you’re interested. Ann: That sounds great! I don’t want this to affect our friendship. and even more hours in the fall picking up leaves. Example 1 Colleen: Ann. I don’t want to quibble. we paid $5. I don’t have any idea. I know you and Jeff said you’d like one because you have about five acres. The “first and best” tactic enabled them to settle the matter easily. What do you want for it? Colleen: Well. Why don’t you give me a price? Colleen: Oh. Jeff spends many hours mowing the yard every week.Tactic 19: Make a First and Best Offer If you want to cut a deal but you don’t like the “give-and-take” negotiation process.000 for it six years ago. and it came with the bush hog and the leaf pick-up. 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. Conclusion Ann and Colleen did not feel like negotiating over the tractor and running the risk that it might affect their friendship. no hard feelings either way. Ann: Thanks! We really need one. You must mean what you say and be prepared to walk away from an unacceptable offer. we plan on selling our Ford tractor when we move. period. consider using the “First and Best” tactic. It is important that both sides know that there is no negotiating beyond the single “best offer”—that the first offer will either be accepted or rejected. We plan to put an ad in the paper next week. we’ll sell it to you.

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

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

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

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

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

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

Jay: No. before someone else does. 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.” (You have won a settlement. The sellers must be willing to come down a few thousand … Sue: Well. Example 1 Jay and Sue are looking to buy a house in a specific neighborhood because it has a good school system. That’s a fair price. and that two similar ones on the same street sold for $330.000. 86 50 Practical Negotiation Tactics . Let’s low-ball them and offer $290.000 three years ago). think things through before you make or accept the first offer.e. Their realtor told them that it sold for $290. thus requiring greater concessions on both sides..000 this year. 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 two years ago. never give them their asking price.000 and $337. Sue: Let’s offer $325. such as last year’s price.000 for a house that sold for $185. which can be very useful). 2) Start out with an old number. of course. or 3) Make an unrealistic offer (i. The other party will probably come back with an equally ridiculous offer. Avoid giving away too much at the outset. because you have settled quickly.) To prevent this from happening.Tactic 21: Avoid the “Winner’s Curse” It is often quite difficult to make the first offer. particularly if you don’t know the other party’s “settlement range. Jay: No. and you cannot withdraw it in good faith. They found one they both like that lists for $325. at minimum cost. We don’t know how anxious they are to sell or if they know the market. but you feel cursed because you gave away too much.000. offer $150. then $320. is the most (or least) the other side will accept. and houses in this area sell fast.000.” The perfect first offer.000—what they paid for it.

000. Exchanging Initial Offers 87 . Lyle: So what’s your price? Bob: Can you tell us what you have budgeted for this project? Lyle: No. the company president.000. That’s an insult! Jay: Well.Sue: Don’t be crazy. Let’s accept it! Conclusion Jay and Sue avoided the so-called winner’s curse by making a low (but reasonable) first offer. Lyle Foxworthy. since they had already bought another house. the sellers obviously would have accepted and Jay and Sue. They outlined how they would develop a new employee performance-appraisal system. as requested by the human resource director. and the offer was based on fact: the prior negotiated price. then let them make a counteroffer. If. Give us your lowest price. Sue: Then you do it. was very impressed with their presentation. (the next day …) Jay: They made us a counteroffer of $307. Frank: Me too. 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.500—half the difference! Sue: Great.) Bob: I’d do it for $3. Both parties felt that they made a good deal. I can’t tell our realtor $290.000 total. as Sue had first suggested. but who knows what they are planning on offering. they had offered $325. The buyers were very motivated to sell. (Bob and Frank meet privately to discuss the situation.000 for each of us—$6. realizing they offered too much.

and you two come highly recommended. What is it? Lyle: Why don’t you give us a price? Bob: We can’t use our daily rate because it might be too high for this work.000) their minimum price of $6. 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.) Lyle: Okay. Lyle: Okay. 88 50 Practical Negotiation Tactics . We’ll do the job. They also ended up getting three times ($18. Bob: That’s fair.000. What’s the cost? Bob: We want the job. and it would not apply.000. That is all that’s left in this year’s training budget.Bob: Lets make them give us a price! (Bob and Frank return to the meeting room. but we can’t pay more than $18. I’m out of time. Conclusion Bob and Frank avoided the winner’s curse by forcing Lyle to make the first offer.

In some negotiation situations. seeing no common ground. This can produce a negotiated solution without giving up your priorities (see Tactic #28: Fixed Alternatives). Use a prolonged period of silence (see Tactic #29) to convey something at a strategic moment. what appears to be an outer limit of the settlement range when the process starts can. Skilled negotiators such as salespeople. It has often been said that the key to negotiations is to be flexible (see Tactic #25). T Making Counteroffers (The “Give and Take”) 89 . and attorneys use tried and true tactics in giving and receiving offers. Instead. which is often the case. and do not flatly reject it because it is not your offer. 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. do not dismiss it because it is not all you want. labor negotiators. because if you do not at least appear to be flexible. Wait to counter (see Tactic #24) because this will give the opponent the sense that you are serious about bargaining. which would most likely weaken their position (see Tactic #26: Keeping Secrets). the other party. is likely to pull away from the table. 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. Experienced negotiators seldom reveal their exact priorities and objectives. Also. One or more parts might be acceptable or indicate movement from their previous positions. Expect that the “total pie” will be different from what it was at the outset. carefully evaluate an opponent’s offer. but possibly of different values to your opponent. be enlarged (see Tactic #27: Expanding the Pie). in fact. 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).Stage 4: Making Counteroffers he heart of the negotiation process is the give-and-take.

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

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

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

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

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

200 $200–$2.000 $500 $1.000 $2.000! Brooks: Good. Making Counteroffers (The “Give and Take”) 95 .000 Brooks X X Maureen X “Win-Win” Category Compatible Exchange 2 Trees (3) 3 Berber carpeting 4 Lighting upgrades 5 Third garage 6 Tile entry 7 Designer drapes 8 Deluxe home theatre 9 Extra sidewalk 10 Custom chandelier 11 Whirlpool bath 12 Fencing X X X X X X X X X X X Exchange Compatible X Compatible Exchange Distributive Maureen: Well. which I’d like to keep in the bank.000 $1. $750 for lighting and $750 in the bank.500 $5. which takes another $3.# 1 Sod Item Cost $1. I’ll trade your sidewalk and trees for my whirlpool bath. Maureen: No.500 left. These are all permanent immediate needs.500 $500 $1. We have $1. Can we split it evenly? Brooks: Okay.000 $3.000 $5. that makes sense. I’d like to spend some of it on lighting upgrades. and we both get things we want.500 $2.

management and union negotiators found that a “winwin” approach to negotiations worked well. Maureen and Brooks were able to identify those things they both wanted (the compatible items) and then trade some items of equal value (the exchange items). even in difficult years. 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. finally agreeing to split the difference on the remaining amount (distributive items). Item Management 3 years None 1% 10% of net For cause only Union 3 years 2% 5% 12% of net For cause only Win-Win Category Compatible Exchange Distributive Exchange Compatible 1. All items to be negotiated and their desired outcome for each item were put in writing for review. Drug-Testing Program 96 50 Practical Negotiation Tactics . Profit-Sharing 5. Pension Increase 3. The combined lists total thirteen different items: Desired Outcome No. both sides exchanged lists of initial demands at their first meeting. During that time. This year.Conclusion By taking the time to list all the items each person wanted and their cost estimates. Length of Contract 2. Wage Increase 4.

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

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

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

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

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

This time. 102 50 Practical Negotiation Tactics . the company entertained the ideas the union had tried to propose before.two-step grievance procedure instead of a four-step procedure. 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. the two parties did meet again. to prevent any change! Company: (surprised) What? Why would you object to this? Your guys will get a final decision in 20 days. After a cooling off period. You can’t be serious. rather than in the 35 days the current system provides. Union: We’re very serious. and actually accepted a three-step procedure. We’ll see you on the picket line. and we’ll strike if we have to.

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

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

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

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

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

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

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

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

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

Tactic 27: Expand the Pie
In some negotiation situations, agreement can be reached by increasing the total pool of resources available to all the parties involved. While this is not practical in every situation, a relatively minor increase in the resources available might allow both parties to reach a solution. Resources should be as broadly defined as possible—money, people, time, etc.—when considering how a “fixed pie” might be expanded.

Example 1
Alexis, age 7, did not want to practice her violin for an hour today, but she promised her parents that she would practice an hour each day if they bought her the instrument. She really wants to visit her friend Michelle and spend the night.

Mother: Alexis, our agreement was one hour a day, every day! Alexis: I know, but if I’m going to play with Michelle, I’ve got to go with her now! She only has two hours before her game and then her mother is taking us shopping. Mother: That’s too bad. Alexis: Can’t I miss one day? Mother: No, you promised to practice every day to learn to play. Alexis: Could I practice two hours tomorrow when I get home? Mother: One in the morning and one at night? Alexis: Yeah. That would be easy. And I would still get in three hours of practice this weekend. Mother: Okay. Then you can go with Michele.

Alexis’s proposal expanded the resource of time to find a solution, and her mother agreed to it because her objective (for her daughter to get in enough practice time) was met.


50 Practical Negotiation Tactics

Example 2
Supervisor: Peggy and Kim, you’ve both had a great sales month and you both earned that trip to Hawaii, according to the promotion program. The cost to send both of you and your spouses exceeds the budget by $1,200, however, so we’ll need to negotiate something. Peggy: Like what? Supervisor: Well … I could send one couple this year and the other next year, since I’ll have a new travel budget by then. Kim: That doesn’t seem fair. We both earned it this year, and we want to take it this summer! Peggy: That’s right! Supervisor: I’m sorry. We never expected to have six people qualify for the trip this year, and the budget is simply not large enough. Peggy: Well, that is your problem. What other ideas do you have? Supervisor: You can each pay half the cost of the flights. Kim: Why should we pay for part of a bonus we earned? Supervisor: Let me talk to the department head about this … (The next day) Supervisor: I spoke with the department head, who explained that if we keep spending the office-supply budget at the current rate, there should be enough left over for me to transfer some money to the travel account to cover the trip for you and your spouses. Will you both help me control supply expenses? Kim: Sure we will, and thank you for finding a solution so we can all go on the trip! Peggy: Yes, we can keep supply expenses down. Thanks for thinking creatively.

Making Counteroffers (The “Give and Take”)


The supervisor in this situation quickly recognized that no negotiated settlement would satisfy Kim and Peggy. Their morale was important to her, so she sought to “expand the pie.” She did so without increasing the total annual budget, which was why the department head agreed to the one-time budget transfer.


50 Practical Negotiation Tactics

Tactic 28: Offer Fixed Alternatives
You might be more successful if you present several alternative positions to the other side. One party can present to the second party two or more proposals of equal value to the first party. This gives the second party the option of choosing one of the multiple offers. The second party is more likely to respond positively to this strategy because (1) people generally prefer having more choices; (2) one of the offers might be of greater perceived value to the second party; and (3) most people prefer to have input into a decision—even if it’s only choosing one proposal out of two.

Example 1
Colleen’s fifteen year-old daughter hates cleaning her room. She usually lets it get quite messy, like most teenagers. On Friday afternoon, the following negotiation takes place when Amber arrives home from school: Colleen: Amber, you must clean up your room. We are having an open house on Sunday, and the house will never sell with your room like it is now! Amber: Oh, Mom … Tonight’s the big sleepover at Chelsea’s house and tomorrow (Saturday) I have a basketball game. Colleen: Amber, I’ve been telling you for three days to clean your room! This is it! You are not leaving this house until it’s clean. Amber: That’s not fair! Last Saturday, you said I could go to Chelsea’s sleepover! Colleen: That was before you kept putting off cleaning your room. Amber: All my friends are going … (pause) Colleen: Okay, Amber, here are your choices: One. Clean your room right now and I’ll take you to her house after you finish. Two. Come home tomor-

Making Counteroffers (The “Give and Take”)


I’ll approve $15. I’ll find a way to do without one part-time person. Use the $5. At least this way the program will have a chance to succeed! 116 50 Practical Negotiation Tactics . Felipe: Well. Roberto: Well.000 budget! I need at least $20. I can accept B. that is enough time. I have three hours. Example 2 Roberto: I can’t properly advertise this new program with a $5.000 for advertising. and clean it. but no TV or anything until it’s done! (pause) Okay. Roberto: But I need to start the direct mail and newspaper ads within two weeks.000 in the budget. But when her mother laid out the schedule and gave her alternatives. I’ll do it now. I can’t help. keeping her Saturday free. Roberto: But it will never generate enough interest if no one knows about it. but I will cut your staff by one part-time person (or $15. but the company president does not share your optimism on this program. Three. B. Felipe: (Roberto’s supervisor) Sorry. but I will cut your travel budget out completely.000. Conclusion At first.Amber: row before your basketball game. (long pause) Felipe: Let me give you three options: A. Felipe: Sorry.000). I’m not going back to him again to discuss this program. or we lose a whole year. she chose the one she most preferred.000 for advertising. Clean it after your game. I’ll approve $15. or C. Take it or leave it. Amber resisted the chore she hated.

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

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

I really want you to stay with the company. it could help. (says nothing) If I can’t get that pay increase approved right now. I suppose I could get the promotion approved with the proper presentation. Well. but I don’t think management will be willing to give you an additional 10% pay raise AND a promotion. I must ask you to try to get both. and I think that I really haven’t been dealt with fairly. because I feel my future with the company might be at stake here. and sell it to management that way. Conclusion Mr. Jones to continue to offer solutions. Making Counteroffers (The “Give and Take”) 119 . of course I will be glad to do that. I could probably find a way to phase it in over a two. and I’m sure management will agree. (says nothing) Or. Okay? (says nothing) Let me check it out and I’ll get back to you.Jones: Susan: Jones: Susan: Jones: Susan: Jones: Susan: Jones: that I deserve more consideration. Susan’s silence prompted Mr. I would very much appreciate it if you could ask the company to reconsider. if management can see their way to giving you the pay increase now. If there is some flexibility in your request. maybe we can talk about the promotion later in the year. Promotions of this type are all but automatic around here.or three-year period. Jones went to management and convinced them that they should give Susan the promotion and the 13% raise. Once he acknowledged that both items might be awarded sometime in the future. 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.

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

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

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

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

000 a year over the next five years? Company: Yes.000. Everyone was afraid that the dispute would cause an impasse and a possible strike. The airline industry is in a slump. we know that health insurance premiums might skyrocket. However. dependent coverage could cost us $1.000 to cover the premiums for dependent coverage. the discussions of the employee benefits package bogged down on the issue of health insurance costs and pension benefits.000.000.Example 2 The contract negotiations between the pilots and the airline had been going pretty well. and are willing to keep pension benefits the same. what they really need is for you to cover the costs of dependent coverage. that would be the minimum increase.000 figure. As best as we can tell. the airline paid a total of $200. with all wage and operations issues resolved fairly early. The company wants to trade paying for dependent coverage for better pension benefits. Pilots: Look.000.000 (which we reasonably should have expected to pay in premiums) in the pension account now. Pilots: So you are projecting that the increase in dependent coverage premiums will average $200. and the premiums for health care just keep going up. and we know that with this new contract term of five years. you are taking a risk on the costs increasing. as it has always been. 124 50 Practical Negotiation Tactics . Company: This could not come at a worst time for us. The projections for the next five years were that these costs would increase to about $1. And we cannot afford that $1. The pilots want dependent coverage paid for by the company.000. With long-term planning and investments. But only a few of our people are close to retirement age. This would be a better benefit in the long run. then the pension benefits overall will increase by $10. the company can make your pensions much better. Over the last five years.000. If we invest the $200. This is just a cash-flow problem that your members have to understand.000. Over the next five years.

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

Saleswoman: I’ll be right back. it’s a deal? 126 50 Practical Negotiation Tactics . but the Consumer Price Index has not gone up 150%—nor has my paycheck! Saleswoman: So. I guess it would be around $600 per month. do you want to look at something else? Buyer: No. I recall the day you drove it out of here. Saleswoman: With your 740 in trade. I love this car. if I can give you this car with a $300 monthly payment. Phrases such as “for only pennies a day. what monthly payment did you have in mind? Buyer: More like $300 per month. $45.000 for a Volvo? I bought the one I’m driving for $19. Buyer: Way too much! Saleswoman: Well. Buyer: Yes. If you are on the receiving end of such a tactic.” and “low monthly rates” are examples of the salami tactic.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. be sure to add up the total cost.000 car.” “affordable weekly payments. but that was several years ago. Example 1 Car buyer: What. I just can’t imagine the monthly payment on a $45.” 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.… (20 minutes later) Saleswoman: So.500! Saleswoman: Yes. and compare it to your strategic objective.

I can afford $6. Saleswoman: Simple.00 per month for your service.000 down and $300 a month! Conclusion The saleswoman knew the buyer was suffering from “sticker shock. you can get the Disney channel for only $5. Making Counteroffers (The “Give and Take”) 127 . do you want Disney? Yes. Sure.00 per month. Let’s see. Example 2 Cable representative: Owner: Cable representative: Owner: Cable representative: Owner: Cable representative: Owner: Cable representative: Owner: Yes. and payout slices to reach the total price she wanted. I can’t discuss another client’s account. but let me see the numbers. You can do that. with your car and $6.00 per month.000 price into “slices” the buyer thought reasonable.Buyer: I don’t see how you can do that. do you want HBO? How much? $5.000 down. But my neighbor pays $39. Once the buyer volunteered that $300 was an affordable “slice.” she had him—she worked around the $300 slices. Great! So. can’t you? Buyer: Yes.” She decided to cut the $45. as promised. Instead of a three-year lease. down payment. it will be a five-year lease. but what else must I buy? Only the basic service for $8.99 per month. I can’t afford that much. (looks at the numbers) That looks good. and added the trade-in.

and my wife wants the old movies. Thanks. That’s $5. and SI 1. Disney is for the kids! The sports channels are for me. 2? How much? $8. Great. but he agreed to six “salami slices” for a total of $38.00! Why? Because he judged the per-slice price to be reasonable. That’s another $5. 2. What about the music package? Yes. we had that before. But that’s all! Then we’ll hook you up on Monday.99 per month. Yeah. Any other kids’ channels? Yes. Conclusion The owner thought his neighbor’s service at $39.Cable representative: Owner: Cable representative: Owner: Cable representative: Owner: Cable representative: Owner: Cable representative: Owner: Cable representative: Owner: The Sports Combo–ESPN 1.00 per month. 128 50 Practical Negotiation Tactics . The total is $38. Okay. 3. and probably felt much better about the total negotiated package because it was presented in modest individual slices. instead of one total amount.00 per month was far too much. they asked about the Cartoon Network.00 a month. I really want the sports channels.00.

In some cases. but others will walk out the door. It should be used with caution: It can end negotiations immediately. “I can only guarantee this price until 6:00 p. Tactic #35 (Applying Excessive Pressure) is a similar tactic that should also be used with caution. which can be successful if the opposing team has two or more members who hold different views of an issue. and the use of humor. For example. turned off by the tactic. Tactic #33 (The Bluff) is a classic pressure tactic.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. the traditional car salesperson might tell the buyer. it is effective.m. but it can be used effectively when one party clearly has an edge. an unexpected element of humor can break the tension and encourage a person to calmly get back to the issues. but in tense. Humor might not look like pressure. angry negotiations. so are you ready to make a deal? This might convince a few buyers. today. Other less-obvious pressure tactics include Tactic #37 (Divide and Conquer). 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. however. Some less-obvious and more easily accepted pressure tactics are to use visuals to control the negotiation talks by focusing discussion on subjects that favor your side (Tactic # 34). and it can destroy your credibility. Applying Pressure 129 . pressure tactics should probably be avoided. Tactic #36 (The Element of Surprise) can catch an opponent off-guard and cause stalled negotiations to move forward. When both sides believe that each has equally strong positions.

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

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

I’ll be looking to you to make some major wage concessions on this upcoming contract. 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’ll be going back to them as soon as next week. but this has been such a crazy situation. our production line changes at least three times a year. Company president: Well. I can’t see how today’s numbers really impact the long-term profitability of this company. in this global market. and that the economy is strong. I’m afraid that with this current information. they will make their decision based on a review of the stock price that day. Union negotiator: The stock price might be down right now. And as you know. I’ll have to show them 132 50 Practical Negotiation Tactics . the situation in the stock market is not good.Example 2 Aimes Manufacturing had experienced major ups and downs in the price of its stock for the last two years. the company president decided to use the stock price as a negotiating tool during the current union contract talks. The current stock price is the lowest it has ever been. Telling me there’ll be no wage increase and asking for wage concessions now is a little premature. And while these fluctuations have little to do with the health of the company itself. we will need to make drastic cuts in our operating costs just to survive. I read in the papers every day that the market is still strong. I think you’ll have to agree with me that wage increases in this next contract will not be available. I’m telling you the stock price is having a huge impact on us already. Here’s how these negotiations went: Company president: Well. in fact.

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

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

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

If we’re not able to reach agreement on this. Here is what happened at the next negotiations session: Nexon: I’m sorry. Union: You’re wrong. Why don’t we put this one aside for now. Nexon: We’ve got lots of issues to discuss. We’re not going to reach agreement on this at all. This is a critical issue to us. much less today.) 136 50 Practical Negotiation Tactics . 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. Another bargaining session was scheduled. we’re really prepared to go the distance on this benefits issue. Many of our union members who are working part-time hope to work full-time. it will cost too much. Second. Nexon negotiators did not believe that the workers would actually strike this early in the negotiations. First. Nexon: I’m sorry. We need an answer today. This is something we just have to have. but the company cannot offer the same benefits to the parttime workers as it offers to the full-time workers.believing that Nexon would not risk a strike. or else we’ll be asking the membership to strike. Union: You don’t seem to understand. and try and reach agreement on the cost-of-living increase you’re proposing? Union: No. Nexon: I’m just not prepared to give you one. And I don’t believe you’re going to go call for a strike over this. we want the part-time workers to apply for and fill fulltime positions as they become available. We need some agreement on this today. 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. then all of our other demands will change. The union members ended up voting not to strike at this time.

Union: Okay, we’ve decided to put aside the part-time benefits issue for now. We’d like to discuss the cost-of-living request today. We’re looking for a 5% increase for all employees—full-time and part-time. Nexon: I’m afraid that a 5% increase is out of the question. Inflation has been very low this year, and we’ve certainly not increased our prices by 5%. We’re only in a position to offer a 2% increase, and we believe your membership will accept that. Union: 2%?? Are you crazy? Our people will never accept that!! They’d sooner strike!! Nexon: Fine. Ask for another strike vote and get back to me. Union: Wait, wait. Let’s be reasonable.

Negotiators for the company knew the threat of a strike was only a bluff, because the union did not have member backing. When they tried to bluff the first time and failed to convince the members to strike, their ability to successfully bluff again was lost. They had a very difficult time in the subsequent negotiations, because Nexon was able to call their bluff numerous times.

Applying Pressure


Tactic 34: Control the Forum with Visuals
Some tried-and-true strategies used for meetings and presentations can also be effective during negotiations—particularly those that help you get your points across to the other party. Even the best negotiators have trouble keeping a discussion focused, which is why they make good use of visual aids. In many situations, including negotiation sessions, a person or team is trying to communicate ideas and persuade others to accept their position. Maintaining control of a lengthy discussion and keeping everyone focused on one’s presentation is often difficult, but it is critical to successful communication and persuasion. This control of the “forum” or general discussion, if attempted solely by dialogue or handouts, can be difficult for the best negotiators. Thus, a tactic that will help keep the discussion focused on one’s arguments and presentation can be extremely helpful. An easel and flipchart, a chalkboard, or a PowerPoint presentation can be very effective in controlling a forum. By only showing one part of a presentation at a time, you can focus everybody’s attention on one page of a flipchart or one slide (or even just one line of text). People won’t be able to flip through pages or discuss other parts of a handout (this often occurs when the entire proposal is given out at the start of a session), and the presenter won’t lose the audience’s attention. It is also more difficult for people to go back to earlier parts of the presentation, because the text no longer appears on the screen or flipchart. A negotiator who presents new proposals or information with well-developed visuals can more easily control the forum or focus of the group discussion.

Example 1
Dinnertime at the Gronefeld house was usually loud and chaotic. The parents and six children had dinner together most evenings, but it was understandably hectic; multiple conversations were going on at the same time. One night, Aime (age fourteen) tried to present an argument about allowances and the division of chores among the children. Constant interruptions from other children and a general inability of all eight people to follow one dialogue simply caused her to give up her


50 Practical Negotiation Tactics

idea. The next night, however, Aime came prepared with a piece of construction paper and a gavel she had removed from a plaque in her father’s office. On the construction paper were three columns: Person; Chores; Allowance. The written specifics were covered up with pieces of construction paper. After everyone took their seats at the dinner table, she banged the table with the gavel until all were silent. “I have a proposal for a new division of chores and new allowances,” she began. “Please let me explain this one person at a time, so we can agree on that person’s chores and allowance, and then move on to the next person.” Aime now had everyone’s full attention, because they were curious about what was covered up on the chart. Aime had sucessfully focused everyones attention on her chart. The parents, impressed by her work and specific proposals, agreed to her suggestions with only one change. Person Chores Allowance

Aime realized that she would never achieve her goal unless she could command everyone’s attention and focus the dinner-table talk on her concerns. She was able to control the dinner forum with a gavel and a chart. The key to her success was that she unveiled only one line at a time, thus focusing the discussion and reaching agreement on each child. This stopped the confusion.

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

Applying Pressure


the organization. A majority of the board members must vote for the proposed budget for it to become effective. Past committee meetings dealing with the proposed budget have been chaotic, long, and usually heated. The typical format for the meeting is for the chair to hand out a copy of the entire proposed budget at the start of the meeting, quickly provide an overview, field questions, and then try to negotiate for the seven needed votes for passage. Steve, one of the budget committee members, has decided to try a new approach: focusing discussion on one budget at a time to prevent people from discussing several items at once. Steve: Ladies and gentlemen, to help us review this budget proposal in an organized fashion, I have outlined it on the pages of this flipchart. Each section of the budget appears on a single page. I’ll go through it one page at a time. Please ask questions only on that section or page. This will keep all of us discussing the same budget issue. Agreed? Board chair: Does everyone agree to this proposed budget-review process? All in favor say agree, opposed no. Seeing no opposition, it passes. Steve: Let’s begin with the capital budget for the Fifth Ward … Allan: Steve, I have a question about this year’s budget for health insurance … Steve: That’s Section 7 on page 7 of the flipchart. Allan, please hold your question until we get there. We will review and discuss all of these items one at a time, in the order they appear on the chart.

Although several sections of the budget proposal sparked spirited debate, Steve was able to control the discussion and focus the meeting on one issue at a time by effectively using a visual aid. The meeting was much shorter, more productive, and less acrimonious than in prior years.


50 Practical Negotiation Tactics

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

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

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

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

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

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

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

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

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


You can say that, but everyone is disappointed when they receive a cheap gift, even if they won’t admit it! Madison: Why are you being so stubborn? You’re just ruining everything! Cory: (also emotional) Look, if you have to receive presents in order to feel that it’s Christmas, we can all just give you presents! Madison: (without hesitation) Okay! I can live with that!! (Everyone laughs.)

Madison’s quip diffused the emotions of the parties. Cory, while very angry, was surprised by Madison’s answer, and was able to laugh. With that, other family members joined in the discussion and they agreed that those who wanted to participate in the gift exchange would. Those who didn’t, wouldn’t.

Example 2
Jay believed that the new home-theater system he bought was a lemon, but he had very little success in getting the salesman to take responsibility. The salesman agreed to have every complaint looked at by a service technician, but the technician always gave the system a clean bill of health, which infuriated Jay. Jay finally asked for a meeting with the store’s owner, fully intending to leave the meeting with a full refund. Jay: Mr. Owner, I’m very serious when I say that I will not keep this system. It is a lemon, and you know it. Either the sound or the DVD or the picture is always off. Owner: Now Jay, there are some problems with the system, but nothing we can’t fix. Let me turn it over to my best technician, and he’ll be right over to fix it. Jay: We’ve been down that road already. The system has been on the blink 20 out of the last 30 days.


50 Practical Negotiation Tactics

Owner: You’ve had a loaner TV/VCR while yours was being worked on. We’ll be happy to loan you one again whenever you need it. Jay: (becoming annoyed) That’s not the point. I bought a new home theater system and I want to use it! I’m very frustrated by your attitude. Temporary fixes aren’t good enough. Owner: Well, we are attempting to fix the system. You’re the only person who’s had this kind of trouble with one of our new ones. Maybe you’re just having “buyer’s remorse” and really don’t want the system anymore! Jay: (very irate) I can’t believe you said that! This system is a lemon, and you’re trying to blame me! What a crock! What kind of business are you running here? You’re a bunch of crooks. Owner: (now also irate) Just hold on there! I run a respectable business, and I resent your attitude. We’ve bent over backwards to check out each of your complaints, none of which were found to be major defects—just things that needed adjustments. Jay: (very angry) That’s not true. The surround-sound speakers never work at the same time. You don’t call that a major defect? Owner: (realizing he needed to break the tension) Well, my 30-year old Sony TV only has one 3” speaker, but I still watch it. Jay: (pausing and calming down) Yes, my first TV was a Sony. Owner: Look, I’m sorry we’re at this point. Let me take this to my top technician and your salesman, and we’ll fix it. Give me one day. Jay: Okay, but just one day!

The owner used a joke to interrupt the angry negotiations that were going nowhere. He exchanged Jay’s surround-sound system for another new model. The system Jay rejected was sold as a “used” one and never came back in for repairs. Jay’s new system worked fine, and he ended up becoming a repeat customer.

Applying Pressure


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Stage 6: Making Progress
aking and reviewing proposals and counter proposals will not always close the gap between the two parties’ positions and gain a settlement. Progress might be made, however, by invoking a certain tactic at a critical time, particularly Tactic #39 (Compromise). Often believed to be the key to successful negotiations, compromise is not giving in; instead, it is the ability of a negotiator to prepare a settlement that represents some concessions on the part of each side, but that will also help gain a proposal that is acceptable to both parties. Other key tactics that can move the negotiations to a settlement include the presence or use of an unexpected friendly personality to disarm an opponent (Tactic #40: Be Friendly!) Bringing to the table a person who is highly respected by the opposing team is a good move; such an individual might be able to gain their confidence and support your position (Tactic #44: Make Use of a Positive ‘Halo Effect’). One tactic that never fails is the classic Split and Choose (Tactic #42), which goes like this: One side divides the item into two parts, and the other side gets to choose which part they prefer. Parents have used this tactic to divide the last piece of pie or cake between two kids for decades! Additional key methods that move things along include the chilling effect of one party unexpectedly tape-recording meetings (Tactic #41) or presenting facts (Tactic #45) that unexpectedly support their position. Experienced negotiators also achieve progress by asking probing questions (Tactic #46), which can reveal or point out flaws in their opponent’s position or by using a period of prolonged silence right after a heated exchange. Experienced negotiators often achieve a final gain in a settlement by nickel and diming (Tactic #43) over small items.


Making Progress


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

C.” No. 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. We want to play dress-up and then color. however. wouldn’t you like to go outside first? After you swing for a while or play ball. According to the city’s zoning laws. there will be an overall increase in traffic coming through the neighborhood and vehicles will be turning into and leaving the parking lot. They did all the compromising they were willing to do. or apply for a variance. Example 2 The owner of a small strip mall in the heart of a residential neighborhood was planning to add a small movie theater to the other businesses in the mall. The existing parking lot didn’t meet the current parking standards for that size theater. The owner decided to try for a variance. 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. When his variance application was made public. you can come back in and play “Prince and Princess. the parking lot will start to look trashy. We don’t want to go outside. failed to offer the children something that was as important as the plans they had made. The neighbors: The neighborhood has four concerns: Theater patrons will be taking up scarce on-street parking spaces. neighbors became concerned about the changes to the mall.: Julie: Hey. C. The owner and a small group of neighbors met to talk about these problems. Mr. Conclusion The children stayed inside and played dress-up.Mr. the owner had to supply additional parking. and teenagers attracted by Making Progress 155 . and they still had time to color.

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

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

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

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

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

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

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

he also lost his negotiating position. Jones. Your request. Jones suddenly realized that his strategy would not work. And you did not threaten her job if she did not. stares. you are aware that the next step in this process is to ask witnesses to come forth. So. and now I’ll ask you to repeat your answers—on tape. Ruiz and Ms. Conclusion Jones had knowingly lied when he denied the charges.” meaning something other than copies? No. I simply asked her to make copies for me as quickly as possible. Making Progress 163 . But by refusing to repeat his answers. Starr. (a long pause) I want to see my lawyer. You never touched any part of her body? Not even accidentally? No. He failed to think about what might be the next step. “Do what I want. When Adams set the tape recorder on the table and revealed that he had witnesses. to quote you. I think I can write my recommendation. Mr. And please describe your general manner. No one could have possibly misunderstood your intentions? No reasonable person. Mr. 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. Well.Adams: Jones: Wood: Jones: Wood: Jones: Wood: Jones: Wood: Jones: Adams: Jones: Adams: Jones: Adams: Tell me again. I’ve brought a tape recorder with me. Stuart. exactly what you said to Ms. Appleton both claim they saw the incident and will testify.

Roberto will get to choose which half he wants. The second person then chooses which of the two parts they will receive.” the divider.… No way! Haven’t you two heard of ‘split and choose’? It’s a fair way to divide things. with the remaining part going to the person who did the dividing. so I’ve got to cut it into two equal pieces or else he will choose the bigger one? Exactly. What is it? Maria: Father: 164 50 Practical Negotiation Tactics . Maria: Roberto: Maria: Father: Father: We can’t share it! It’s in one piece! I’ll eat half and give you the rest. the classic “split and choose” tactic might be the best way to settle the issue. Many of us learned this one from our parents: After two people agree to the strategy. Example 1 Maria (age 8) and Roberto (age 6) are arguing over who should get the jumbo-size Snickers candy bar their father brought home. which certainly is large enough (he naively thought) for two young children to easily share. Their dad instructed them to share the candy bar. of course. Maria and Roberto: No. one person is given the task of dividing the object(s) into two parts. take this knife and slice the Snickers into two halves. Oh. is usually careful about dividing the object into two equal parts. 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. Realizing the potential of getting the “smaller half.

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

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

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

we’ll agree to Health Plan A with another ½ cent on the pension fund. the two sides had been engaged in considerable bargaining over an improved medical insurance plan (“Health Plan A”) costing hundreds of thousands of dollars. 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.important item. In one case. it can be a dealbreaker.” The company negotiator yielded to this small-potatoes counteroffer in order to win agreement on the health plan. This experienced bargainer said. 168 50 Practical Negotiation Tactics . If used correctly—at the very end of a negotiation—the tactic can usually provide a small gain. At the end of negotiations. If one party misjudges the situation. so be prepared to withdraw the nickel and dime item at the hint of trouble.” Conclusion The nickel and diming tactic is a classic negotiation tactic used successfully in a variety of situations. “Okay.

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

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

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

000 under the listing price! We realize that. They believe it is overpriced. but you’ve priced it way too high. Here’s a list of the five that are about the same size as yours. $237. $235. Sam Jones. has owned the house for 24 years and is downsizing to a condo. but the key is to gather facts that you might need—not just the facts that you will need. Sometimes.500. We love your house. and we are countering with an offer of $250.000. and $237. Sam Jones: Sam Jones: 172 50 Practical Negotiation Tactics . The owner. but the right facts presented at the right time can chill or astound and completely turn things around. $229.000.000. Being able to present them at the most appropriate and critical times has made the difference in countless negotiation situations. They sold for: $225. (Next day) We’ve reviewed the records you’ve produced.000. How can you say that? We went to the county courthouse and looked up the real estate transactions for all the houses in this neighborhood that were sold over the past two years. I’ll get back to you.000. Henry Lopez: Sam Jones: Maria Lopez: Sam Jones: Maria Lopez: We love the house and have made a written offer of $240. This offer is for more money than any four-bedroom houses on this neighborhood list.000.Tactic 45: Use Facts Fact-gathering must be part of the preparations for every negotiations session. the other party will ignore or refuse to believe the information. What? That’s $35.000. Example 1 Henry and Maria Lopez are interested in a house that lists for $275. but we feel that it’s a fair offer.

Conclusion The Joneses had based their asking price on the advice of a friend. No one can go over $1. That’s the bottom price. Hatfield: My staff has done a lot of research. Supervisor: If I okay this purchase order. and did his homework.000. We’ve talked with purchasing and we have the authority to buy seven for $2. Example 2 Supervisor: You know the policy. Well… We have a written counter of $245. We accept. Order the new computers. I asked for a list of all new PCs bought this year. let’s not worry about it. The facts presented by Henry and Maria Lopez caused Jones to re-counter their asking and likely sale price. Hatfield: While I was at purchasing. Supervisor: Well.600 for a computer.400 each. who was not particularly knoledgeable about real estate. I’ll be… Okay. and wisely chose exactly when to present them in order to make his point.000 each.Henry Lopez: Sam Jones: Henry Lopez: Sam Jones: Let us discuss this for a minute. You can’t pay more than $1.600 unless the company president approves. and we know that only this model will meet our needs. The last 20 were over $2. Here it is. Making Progress 173 . Conclusion Hatfield had anticipated what his supervisor’s position would be. if other departments have ignored the policy. I’ll get called on the carpet. He found facts that supported his position.

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

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

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

and the child learns an important lesson about life. If both parties desire a settlement but cannot seem to reach it through the usual give-and-take process. 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. this process can easily result in a final 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. 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. days. They bring it out when a dispute arises. T Reaching Agreement 177 . this tactic can produce an agreement. and the classic Walk Away (Tactic #48). Tactic #49 (Final-Offer Arbitration) should bring about a settlement. 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. hours. 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. or even months after the first offer is presented. If friends or neighbors need to settle something but prefer to avoid the negotiation process.Stage 7: Reaching Agreement he final stage! It might come minutes. In this process. When two parties believe they have an oral agreement. When multiple issues are at stake and most have been agreed upon during negotiations. 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).

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

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

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

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

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

Larry. a local developer. Michael: Well. you’ve already told us that.5 million. Michael: Good morning. Michael: I have a check right here for 4. Two months later. they were prepared to accept $5. You rejected it. with a certified check. Michael Roberts.) Larry: Michael is here again. He met with Bizannes twice before. Larry. our accountant said it’s worth $6 million. come out here! (Judy comes out from the back room. after no contact from Larry or Judy. but their continued walkout convinced Michael that they would hold firm.5 million. Larry: Michael.5 million. visited their store. Reaching Agreement 183 . In reality. Michael calls on them again with a check for $5. I still want to develop this block.) Conclusion Larry and Judy used the walk-away tactic and stayed away for two months in order to convince Michael that they were firm on their price. Larry: Yes.0 million. (Judy and Larry walk into the back room and close the door.5 million for the building. so why are you here? Michael: I’ve discussed it with my partners. and we gave you our price. Judy: Larry.both of them love their store. let’s eat lunch. What do you think? Judy: Larry. One day. and I’m not interested in less. How’s business? Larry: Great! I’m surprised to see you again. today. Larry: Judy. which the Bizannes accept. and I’m prepared to offer you $4. and I only need your building to own it. and he is offering us $4. go back to your office.

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

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

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

During a discussion. everyone is busy grappling with the details of the negotiations. The owners were selling the house without a real estate agent. not the furniture. At the very least. and one of the other couples looked very interested. The goal of recording the precise details is to either avoid any misunderstandings or address them before the talks conclude. Example 1 Bill and Paulette had been house-hunting for some time. We’d like to make you an offer of $150. Bill and Paulette fell in love with the house. we won’t be involving our real estate agent. They finally looked at a house they really liked. Seller: Yes. Seller: We’re asking $152. If we shake hands on it right now. they looked at this particular house on their own. Obviously. all the usual stuff in a sale. however. and decided to stop by to see if they liked the house. and while Bill and Paulette had been using an agent to help locate houses. They saw the “For Sale” and “Open House” signs. 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.000. 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. 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. They were not the only couple to come to the open house.Tactic 50: Commit the Offer to Paper You can often control the progress and direction of a negotiation by writing down the agreements or understandings as they are being reached.000. and felt that they would have to work fast to make an offer before someone else did. Bill: Reaching Agreement 187 .

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

Monica had. but it’s not standard when a complaint is formally withdrawn. You’re just trying to make it seem as if your supervisor did nothing wrong. It might be standard when there’s a settlement. Look. Why’s that? Well. found a new job and wanted compensation for “embarrassment” and lost wages in the amount of $100. and expensive matter. then Monica had to acknowledge that the supervisor did nothing wrong. Withdrawing. and must agree not to tell anyone about the $100. my client is supposed to formally withdraw the complaint rather than just settle it. but said that fighting the charges would be a long.there was little basis for the complaint. He offered to send settlement agreement papers to her.000. 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. even though we’re certain we would prevail. I’m He: She: He: Reaching Agreement 189 . drawn-out. But the employer doesn’t want to go through the expense and publicity of a trial. He’s happy to prove that in court.000 without actually having to prove anything. the supervisor says he did nothing wrong and that Monica just misinterpreted what he said. you didn’t mention in the agreement that in exchange for the $100. And the confidentiality clause is standard. by this time.000. Monica’s lawyer (She): Employer’s lawyer (He): She: I was surprised by your settlement documents. even though you are paying Monica because we can prove he did do something wrong.000.000. The employer’s lawyer told Monica’s lawyer that the employer was ready to settle the deal for the $100. The supervisor insisted that if the employer felt he had to settle. settling—What difference does it make to her? She’s getting her $100.

There was a confidentiality agreement. Monica accepted the $200.000 when all that was asked for was $100.000. to his disadvantage. but word did get out that a public agency paid $200.000. but that’s under the same conditions—the claim must be formally withdrawn and Monica can never reveal the amount of the settlement. 190 50 Practical Negotiation Tactics .She: authorized to pay $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. It was made clear that the employer had paid the additional $100. It would have been a better strategy in this situation to raise the issue of withdrawing the complaint during the actual negotiations. I’ll take your offer back to her and let you know.000 just to get the employee to “withdraw” the complaint.000 and the conditions of the offer.

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

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

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

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

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

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

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

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

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

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

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

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