SECTION I: INTRODUCTION

Real-Life Negotiation Situations
You feel you’ve been had. Sucker-punched. Taken for a ride. Why? You’ve been talking to your next-door neighbors about their cell phone service, and you find out that they are paying roughly half the monthly rate that you are paying! To make matters worse, you learn that their phone has text-messaging, a camera, no roaming charges, AND e-mail capability! Your cell phone does not have these functions. And the final insult? They didn’t have to sign a contract— and you still have 18 months left on yours. At first you get mad, thinking the phone company made a mistake that is costing you money. After all, you pride yourself on being an informed consumer— how else could this have happened? Then you ask your neighbor how he got such a good deal. He tells you that he and his wife simply negotiated the agreement when they switched providers. Boy, do you feel frustrated and foolish. You realize how easy if would have been for you to have negotiated the same deal, if only you had tried. The fact is that most people miss many opportunities to negotiate in their professional and personal lives. Negotiating is a critical ability that many of us lack, yet anyone can become a competent negotiator. It simply requires (1) knowing when a particular situation is ripe for negotiation; (2) knowing who is able to make a decision for the other party (you often need to ask to speak with the supervisor or manager in charge); and (3) knowing how to negotiate. Read this easy-to-follow book, and learn how to negotiate by practicing a few tactics presented here. As you read, you’ll be amazed at all the everyday situations in which having the ability to negotiate effectively can enrich your life.

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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.

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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

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practical tactics useful in real-life situations at work or at home. such as these: • You receive the wrong order at a restaurant. • A child wants a new toy now. with neighbors. But if you scored 8 or less. Most readers will no doubt recognize some of these strategies. Unfortunately. Instead. This book is designed to give the reader an understanding of the negotiation process by presenting fifty proven. start reading! Most people come face-to-face with a negotiation situation of one type or another on a daily basis: on the job. accept what is given. few people understand that normal interactions represent bargaining opportunities. 4 50 Practical Negotiation Tactics . with family members. but many of us miss the opportunity to bargain in other situations. or engage in an unproductive argument. exactly. • A co-worker asks for volunteers for a new project. Who. at a flea market.negotiator! Pass this book on to someone else who needs it. they pay the sticker price. Learning how to use these tactics and knowing when to apply them will make you a more skilled negotiator when you are faced with the opportunity to strike a favorable agreement. are the negotiators most people deal with each week in their work and personal life? The list will be long: • • • • • • • • a neighbor a spouse a child other family members a supervisor a co-worker a salesperson a boyfriend/girlfriend • • • • • • a home builder a hotel clerk an electrician/plumber a lawyer a vendor/buyer a human resource director (who might make a job offer) • a manager Most people expect to have to negotiate when buying a car or purchasing a home. some will in retrospect even remember being the victim of one or two of them.

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

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

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

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

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

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

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SECTION III: 50 TACTICS FOR SUCCESS

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

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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.

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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.

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Conclusion Selling their business was the Jaggers’ BATNA. and final offer. In this case. For the past two months. They learned that their assets would be easy to sell and were worth more than originally estimated. When negotiations with the union became hopeless. With only two weeks remaining before a threatened strike. The $56 million dollar business took them 30 years to grow. The threatened strike became a reality. his BATNA was not to hold out for more money. the Jaggers decided to seek buyers for their land. 16 50 Practical Negotiation Tactics .Conclusion Harvey’s best alternative—his BATNA—was simply to hold on to the car for the moment. The Jaggers gave the union their “last. notified all the employees of their intentions. The union negotiators convinced the employees that this too. Example 2 Shari and Jim Jaggers own a successful West Coast pottery company. selling became an attractive alternative to a strike or prolonged battle. and either move it with him to Arizona or find another classic car collector who might buy it (perhaps for less) and preserve it. but rather what the buyer planned to do with the car. labor contract negotiations between the Jaggers and a local labor union representing the pottery’s craftsmen have stalled. They told the union that their age and the fact that they had no heirs to carry on the business was leading them to seriously consider selling out and permanently closing the doors. as Harvey had for many years.” which was refused. The union is demanding wage and benefit increases. was a power play. The union negotiators thought the Jaggers were bluffing. and it now employs 230 craftsmen. The owners. best. as a last resort. inventory. providing them with a very good income for life. and equipment. and the Jaggers decided once and for all to sell their business assets and invest the proceeds conservatively. 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.

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

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

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

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

and so on. Bailey: Cybil: Preparation 21 .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. such as a hotel conference room. (thirty minutes later) Bailey: So. Cybil. the frog is everybody’s favorite. I like the frog. they control the breaks and environmental factors. 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.) Prepare for the negotiations by controlling the setting—to your advantage or to mutual advantage. but never to THEIR advantage! Example 1 (Two ten-year-old girls are talking.) Let’s take all our Beanie Babies to my house to trade! Okay. and go play somewhere! Cybil: Well … Okay. (Think of the showroom tactics used by car dealers. I’ll give you my duck and frog for your whale and horse! Cybil: I already told you that I don’t really like that frog much! Jenny: (Bailey’s sister) What? Bailey. Inexperienced negotiators fail to realize that the other side has an advantage if the meeting is held on their home turf: they are more comfortable. girls. Make up your minds. too. Mother: Hush. it’s a deal.

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

it became clear that all of those pipes had to be pulled and new ones put in. Larry had expected to pay him for his time. based on objective criteria (think property appraisals in real estate). I was kind of surprised at how high it was. If you think that the other party knows more than you do. though. and show them the actual work that got done. I would have charged anyone else much more.” This can hold up an agreement and cost you in the end. about your bill. I anticipated much less work. rather than give them the “advantage. Will: Larry. Larry: But Will. when Will presented Larry with his bill. Example 1 When Larry’s cousin offered to help Larry finish the renovation on his bathroom. I gave you my “family” rate. Let’s get the guys back in who gave you estimates. and they were much lower than this. these plumbers certainly acted like they understood the work when they gave me their estimates! Will: Tell you what. Larry: Well. Prepare for the negotiations by having an outside authority measure or weigh in on each side’s position. Believe me. If they tell us that they either Preparation 23 . This uncomfortable negotiation followed: Larry: Will. After all. Things turned sour. Larry was thrilled. but was shocked at the amount of the bill. It was twice as high as the estimates Larry received from other plumbers before they started the project. you are likely to resent them for it and hold out.Tactic 4: Use Objective Criteria Use objective criteria to judge the quality of each side’s proposals—you will probably improve your chances of coming away satisfied. I did get some estimates from plumbers. and he and Larry have always gotten along. Larry: Just make sure you’re comparing apples to apples. When you first told me about your project. When we got into it. Will is a licensed plumber.

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

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

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

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

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

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

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

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

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

side is either caught off-guard or (in some rare cases) a negotiator will be able to achieve an unexpected fantastic settlement. with “All right.” The agent took the offer to the seller. The agent explained that the seller was desperate. half-serious. By assuming opposing roles. 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. 34 50 Practical Negotiation Tactics . The buyer said he wasn’t interested. but the inside was a complete turnoff. The desperate owner agreed. “Please make any offer—they are motivated!” The buyer responded. The buyer loved the location. the seller’s agent called the buyer about the property. For example. Another strategy often employed by parents with their children (and investigators with suspects) can be easily used when one side has two negotiators (see Tactic #8: Use the Good Guy/Bad Guy Routine). His teenage sons had “trashed” the house. I offer half the asking price. Weeks later. If there is a significant weakness in your position. and the buyer was able to completely renovate the house and still have a great deal. 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). two people on the team will be more successful because they evoke different emotions from the other side.

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

000 or 1% of profits (whichever is less) over the next ten years in order to use the name. When Carol refused to budge. Example 2 The law firm of Bits & Bites was a Sioux City institution. In any event. Here’s how the initial negotiations went: Partners: Well. Carol drove off a potential buyer by setting an asking price that was just too high.000 immediately. The partners are interested in selling the name. and then $10.000 offer by coming down in price at least a little. but they have no idea what the value of their firm’s name might be in this nearby city.Buyer: What if we offered you $100. as to how you think the name is going to benefit you. were still alive. we are certainly interested in your request to “buy” our firm name to use in your city. 36 50 Practical Negotiation Tactics . Neither Edward Bits nor Edmund Bites.000. Inquiries to other law firms were not very helpful because in almost all of the instances. though. A new law partnership from a nearby city contacted Bits & Bites and offered to “buy” the rights to the name to use in their law office in their city. the founders of the firm.000? Carol: We really can’t take less than $160. We’re curious. 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. the transaction also included some degree of consolidation of the law firms involved—not just the use of the firm’s name. The other law firm was prepared to pay $100. or she has unreal expectations. the buyer took it as a signal that either Carol didn’t want to sell. Buyer: Good luck!! Conclusion The buyer expected Carol to counter the $100. enjoying a statewide reputation for quality representation.

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

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

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

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). For the past three years. Miguel: I’ve figured $4.200 will be about right… Sandy: I can’t begin to pay that! Liz: Calm down. perhaps even unintentionally. we’ve been fairly happy with your responsiveness. the quality of the technicians’ work. She realized that it put her in an impossible negotiating position. your account has taken too much time. 40 50 Practical Negotiation Tactics .000 in service calls last year alone because your damn people don’t take care of the equipment. And we want to change the 24-hour service response time to 48 hours. Sandy. And cut the training hours from 55 to 20. your rate of $3. and your training programs. You are located outside our primary service area. Miguel: Well. firm offer if they decided to continue negotiations. We estimated that it has cost us more than $50. we’re here to negotiate a new service agreement. She very wisely recognized the routine and forced Andy and Paula to give her a clear. Liz: But we still want to renew your contract. Miguel: But not at this ridiculous rate. And we need to add a clause that holds your company responsible for machine damages. Sandy.000 per month is one of the highest in town. Sandy: What? First of all.Conclusion Peggy thought she was getting the old “good guy/bad guy” routine.

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

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

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

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

On those overtime shifts.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. Working with fireworks is working with explosives. and that they should be asking for a fairer base wage for the work they do for you. and it’s getting old. The most-senior employees want to have the right to refuse overtime and have those less-senior employees take the overtime. The owner told the employees that he was worried that during the overtime shifts. Owner: Now. Where are your managers? Where is the training necessary to make Planning a Strategy 45 . 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. they would become dissatisfied with their pay and want their base pay increased. lesssenior employees might be at greater risk of injury because they have to handle explosives. and it’s not what we’re even talking about. that’s just not fair. The employees’ negotiator finally decided to use “indignation” to break the stalemate. I’ve got to have the employees with the most experience to protect this place. They will be putting the plant AND their fellow workers at risk by not being here. Negotiator: (now beginning to get irate) You talk about the risk to your plant if the less-experienced workers are there on overtime shifts without the senior employees. and you just can’t be too careful. Owner: I’m just not willing to let my best people refuse to work the extra shifts during our busy season. Employees’ negotiator: (with a stern voice) You have been saying this for three weeks. The owner was afraid that if the mostsenior employees routinely passed up the overtime and the overtime pay.

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

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

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

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

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

and should therefore handle the problem. you gain an edge when negotiating a new plan for your company.” If you spend many hours learning about Health Maintenance Organizations (HMOs). Many bargainers on the other side will not know their HMOs from their PPOs or their POSs and are likely to leave important details up to “the expert” to decide—just as the negotiator planned! After explaining in some detail what each of these three types of insurance plans are. he argues that she is the expert. 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. and Point of Service (POS) plans. a negotiator in a similar situation was able to get the other side to agree to include a plan that they had opposed only days before! Planning a Strategy 51 . Preferred Provider Organizations (PPOs).investment decision or deal with an error in a bill.

These positive things are part of your goals and objectives. particularly when things seem to be at a standstill. like we usually have. she decided to try something different. This is done by deciding at the outset what you both have in common: You both want to reach an agreement. Usually. If this was chocolate icing. Russ: 52 50 Practical Negotiation Tactics . you both want to complete negotiations by a certain date. the last piece of cake will get thrown away. The two boys fought over the last piece of everything. 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. When they boys returned. and then asked their mom for a chance to negotiate with each other. Example 1 When Russ and Bill got home from school. They immediately began to fight over it. and neither boy was very happy. I wouldn’t care so much. I also took out the garbage last week without being asked twice. Mom: I’ve decided that I’m not going to cut this piece of cake in half and give you both some. Be clear on what you have in common at the start.Tactic 12: Find Common Interests You are more likely to come away with a satisfying outcome if you and the other party set the stage for agreement. because I am so conscientious about my paper route. she made them share whatever it was. This time. neither of you want to be embarrassed at the outcome. That simply rewards your continual squabbling. point them out at the very beginning of negotiations and refer to them throughout the process. The boys quickly huddled. I missed dessert the other night because I had to get to baseball practice. you want to reach an agreement that is favorable to an outside party. Unless you can convince me otherwise. and I really love the banana/butternut/ sour cream frosting on this cake. and so on. and their mother was tired of it.

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

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

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

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

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

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

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

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

None is as important as the first one.500) Fig. for example. 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.500) M $21. Exchanging Initial Offers 61 . This is a practical starting point that will not anger the other side (and might even be expected). 2: Distributive Bargaining Process. as illustrated in the following figure: Seller Resistance Point ($22.000) Target Point ($23. Many negotiators make their initial offer the highest acceptable offer (Tactic #19: Make a First and Best Offer). The initial offer sets the tone of the negotiations and reveals something about the strategy of each side.Stage 3: Exchanging Initial Offers any offers and counteroffers are made during a typical negotiation—sometimes even hundreds. Another common strategy is to start with the status quo.500) Resistance Point ($25. by Michael R.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. Adapted from Labor Relations and Collective Bargaining.750–$25. 190–192. 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.750) Target Point ($24. “Distributive” bargaining (“win-lose” or “zero sum”) is used. 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). such as proposing to continue at the current rate or price. quick agreement. Carrell and Christina Heavrin.000) Settlement Range ($22.000 Buyer Initial Offer ($21. The initial offers of both parties are usually set reasonably above or below what each believes to be the settlement range.

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

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

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

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

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

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

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

Example 2 The office supervisor told the three internal sales representatives (Jenny. he brought it up and convinced the salesman and manager that it was an important item to him—possibly even a deal-breaker.Manager: Hobbs: Manager: Hobbs: Manager: Hobbs: Manager: We are offering you a great deal. All three employees must agree to the schedule. Then we have a deal. 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. The days in question are: Exchanging Initial Offers 69 . The three are sitting at a lunch table to discuss the schedule. I’ll take the red one for $100 less. so I might as well get the color I want! What if we offer you the red one for $100 less? Is the color worth $100? I .. The manager was convinced enough to sacrifice a final $100 for the throwaway. At the very end of the negotiations. Hobbs successfully chose color as a throwaway item. 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. Why didn’t you mention the color before? I didn’t expect to actually buy a new car today (note: not the truth)... Miguel. Employees will be paid time-and-a half for each of these days. Conclusion Mr.no it’s not.

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

000 this year. but you feel cursed because you gave away too much.) To prevent this from happening. or 3) Make an unrealistic offer (i. and that two similar ones on the same street sold for $330. 86 50 Practical Negotiation Tactics . 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.” The perfect first offer.000 three years ago).000. because you have settled quickly. Sue: Let’s offer $325.. particularly if you don’t know the other party’s “settlement range. The other party will probably come back with an equally ridiculous offer. 2) Start out with an old number. never give them their asking price. such as last year’s price. Jay: No. then $320. think things through before you make or accept the first offer. Jay: No. at minimum cost.Tactic 21: Avoid the “Winner’s Curse” It is often quite difficult to make the first offer. offer $150.e. before someone else does. and you cannot withdraw it in good faith. They found one they both like that lists for $325. Avoid giving away too much at the outset.” (You have won a settlement. and houses in this area sell fast. Their realtor told them that it sold for $290. is the most (or least) the other side will accept. which can be very useful).000 two years ago. That’s a fair price. thus requiring greater concessions on both sides. 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.000. Let’s low-ball them and offer $290. Example 1 Jay and Sue are looking to buy a house in a specific neighborhood because it has a good school system.000 for a house that sold for $185.000. We don’t know how anxious they are to sell or if they know the market.000—what they paid for it. of course. The sellers must be willing to come down a few thousand … Sue: Well.000 and $337.

000. was very impressed with their presentation. Give us your lowest price. Frank: Me too. Exchanging Initial Offers 87 . (the next day …) Jay: They made us a counteroffer of $307. as requested by the human resource director. Lyle Foxworthy. The buyers were very motivated to sell. That’s an insult! Jay: Well. the sellers obviously would have accepted and Jay and Sue.000 total. realizing they offered too much. since they had already bought another house. I can’t tell our realtor $290. they had offered $325. would have suffered the winner’s curse! Example 2 Bob Myers and Frank Costello made a presentation to the top management of a paint company.000. then let them make a counteroffer. as Sue had first suggested. Both parties felt that they made a good deal. the company president. Let’s accept it! Conclusion Jay and Sue avoided the so-called winner’s curse by making a low (but reasonable) first offer. but who knows what they are planning on offering. Lyle: So what’s your price? Bob: Can you tell us what you have budgeted for this project? Lyle: No. Sue: Then you do it. and the offer was based on fact: the prior negotiated price. If.000 for each of us—$6. (Bob and Frank meet privately to discuss the situation. They outlined how they would develop a new employee performance-appraisal system.) Bob: I’d do it for $3.Sue: Don’t be crazy.500—half the difference! Sue: Great.

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

Experienced negotiators seldom reveal their exact priorities and objectives. and do not flatly reject it because it is not your offer. seeing no common ground. which would most likely weaken their position (see Tactic #26: Keeping Secrets). and attorneys use tried and true tactics in giving and receiving offers. It has often been said that the key to negotiations is to be flexible (see Tactic #25). Instead. do not dismiss it because it is not all you want. the other party. Use a prolonged period of silence (see Tactic #29) to convey something at a strategic moment. When the other party makes an offer. carefully evaluate an opponent’s offer. 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. be enlarged (see Tactic #27: Expanding the Pie). which is often the case. Expect that the “total pie” will be different from what it was at the outset. in fact. because if you do not at least appear to be flexible. In some negotiation situations. Wait to counter (see Tactic #24) because this will give the opponent the sense that you are serious about bargaining. Also. and remain open to offers and options that you did not originally expect (see Tactic #30: Always Leave Room for Dessert). but possibly of different values to your opponent. One or more parts might be acceptable or indicate movement from their previous positions. is likely to pull away from the table. labor negotiators. This can produce a negotiated solution without giving up your priorities (see Tactic #28: Fixed Alternatives).Stage 4: Making Counteroffers he heart of the negotiation process is the give-and-take. 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. what appears to be an outer limit of the settlement range when the process starts can. Skilled negotiators such as salespeople. T Making Counteroffers (The “Give and Take”) 89 .

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

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

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

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

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

000 $500 $1.500 $500 $1.000! Brooks: Good. which I’d like to keep in the bank. We have $1. Can we split it evenly? Brooks: Okay.000 $1.000 $3. which takes another $3.# 1 Sod Item Cost $1.000 $2.000 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. that makes sense. and we both get things we want.500 $2. These are all permanent immediate needs. I’d like to spend some of it on lighting upgrades. Making Counteroffers (The “Give and Take”) 95 .200 $200–$2. $750 for lighting and $750 in the bank.500 $5. I’ll trade your sidewalk and trees for my whirlpool bath. Maureen: No.500 left.000 $5.

All items to be negotiated and their desired outcome for each item were put in writing for review. even in difficult years. Drug-Testing Program 96 50 Practical Negotiation Tactics .Conclusion By taking the time to list all the items each person wanted and their cost estimates. This year. 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. Length of Contract 2. 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). During that time. Profit-Sharing 5. management and union negotiators found that a “winwin” approach to negotiations worked well. The combined lists total thirteen different items: Desired Outcome No. Pension Increase 3. both sides exchanged lists of initial demands at their first meeting. 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. Wage Increase 4. finally agreeing to split the difference on the remaining amount (distributive items).

First. No Strike/No Lockout 10. one Making Counteroffers (The “Give and Take”) 97 . Health Insurance Employees pay 20% Continue cur. and (#9) to continue the often-discussed no strike/no lockout provision. the negotiators agreed that they had compatible positions on three items: (#1) length of contract. they accepted the union job security proposal (#12) in exchange for the management subcontracting proposal (#11). Overtime Assignment 8. Clothing Allowance Based on senior. they began to trade off the exchange issues of similar value and nature. Finally. Paid Funeral Leave 9.Compatible rent provision 15% Exchange 15% No layoff provision $100/month Exchange Exchange Exchange In their second meeting. eleven of the thirteen original issues to be negotiated had been agreed to. (#5) a new drug testing program. They proceeded to draft the language to settle these issues. Subcontracting 12. At this point.Distributive rent program co-pay Exchange Exchange 7.6. Job Security 13. 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. and removed from the table. Next. Because they held opposite positions on these issues. Shift Differential 11.Voluntary ity 2 days Continue current provision 10% 10% No provision $50/month 3 days Continue cur. the management profit sharing plan (#4) was exchanged for the union overtime assignment plan (#7). they exchanged the economic issues of approximately equal cost: the union pension increase proposal (#2) for the management shift differential (#10). signed. Next. and the union clothing allowance proposal (#13) for the management funeral leave proposal (#8).

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

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

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

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

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

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

Nancy: What if we did Thanksgiving on Friday? Sue: What? Nobody does Thanksgiving on Friday—that’s un-American! Anyway. Celebrating the next day seems odd.Nancy: It just won’t be right without you guys.m. Thanksgiving is Thursday. 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. the holiday will be over. Sue: I don’t know. 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.. Nancy: If we keep the time at 5:00 p. but then I realized that the rest of you already go to your in-laws earlier in the day. Conclusion Nancy’s goal when she called Sue was to talk her into coming to their Mom’s Thanksgiving Dinner on Thursday. Sue: Next year. Nancy: I’ll let you know. I mean. 104 50 Practical Negotiation Tactics . either. So that doesn’t work. I thought of asking Mom if she could move dinner up to noon or so. it’s okay with me if you can sell it to everyone else. we’ll come to Mom’s. Bill won the coin toss for this year. Mom’s very upset. Nancy: We’d make it special by all of us being together. and it became the family’s new tradition. I bet everyone could make it on Friday. but she won’t tell you. By being flexible. Everyone in Sue’s family liked the idea of celebrating on the Friday after Thanksgiving. she suggested a unique alternative. I know that I would rather not do two Thanksgiving dinners on Thursday. some people have to work on the Friday after Thanksgiving. When that goal looked out of reach.

We need the city’s help by allowing us to get the city land donated to us (for free). City: Can’t you borrow the money from a bank to build the facility. but we can’t fund all of the $12 or $15 million. we hope to break ground early next year for the new orphan home. but the principal of the fund can’t be touched. Kids’ Home and the foundation have decided that a parcel of city-owned land would be ideal as a site for the new building.Example 2 Kids’ Home. Kids’ Home hoped to get $500. City officals: We can probably give you the land for free. Kids’ Home: As you know. The foundation has a substantial endowment fund. Unfortunately (for Kids’ Home). had been negotiating with a foundation to become its major benefactor for a new building and to supplement the organization’s annual operating budget.5 million is available for distribution to numerous charities. Estimates for building a new orphan home ranged from $12–$15 million. Foundation officals: Oh. the foundation’s regular annual grants come to roughly half of their available funds. a non-profit organization for orphaned children. Kids’ Home: That’s why we brought the foundation’s officials with us. the interest income of around $6. we’re committed in theory. but we need some assurance that you will be able to build and operate the orphan home at that location. depending on the cost of the land. Each year. They are meeting with the city to ask that the land be donated by the city for the project. and raise the money to pay it back? And can’t the foundation grant you money on an annual basis? Making Counteroffers (The “Give and Take”) 105 .000 a year for operations. We only have maybe $2 million a year to put toward this charity. Kids’ Home is also hoping to get the city to encourage the foundation to commit to full funding of the building project. We’re hoping to get a commitment from them to build and help fund the operations of a new facility.

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

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

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

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

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

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

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

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.

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

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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.

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Conclusion
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.

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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-

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

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

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

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

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

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

she noticed that the brook came within 100 yards of it. the brook was the property line separating her property from a neighboring farm. you should always enter the talks with a good idea of what you are willing to agree to. Joe. when one of you might say. had redirected the brook further into her property. the brook and rock barrier are on my property. The reason I built it was so that I could protect my patio. One day. which an upstream neighbor had built. As was sometimes the case in these parts. “I have to have this. Madeline built a gazebo about 500 yards from the brook. 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. Madeline: Hi. The property came with three acres of forest alongside a meandering brook. Your rock barrier has sent the brook onto my property and it is too close to my gazebo. The brook 122 50 Practical Negotiation Tactics . You are more likely to be successful if you identify a range of options that fall within your comfort zone than if you have a fixed bottom line with little wiggle room. Obviously. This range for maneuvering is not the same thing as the list of items you make at the outset—it’s the last space separating you and your opponent. She traced the brook back along its course to see why and where it had changed its path. Example 1 Madeline bought an old farmhouse outside of a small town. Madeline. or we will be at an impasse. in a small clearing. She discovered that a rock barrier. and began to renovate it as a home and a pottery shop. after the gazebo had been there for about five months. Neighbor: Well.” Avoid making that “necessary concession” too narrow: It should be large enough for both of you to step into comfortably. It calls for compromise. She went to discuss this problem with the upstream neighbor and had every intention of demanding that the barrier be removed immediately. I have a problem. You will have to remove the rock barrier.

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

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

If we can get two or even three years out of the $200. then those funds will not be available to invest in the pension plan. Company: If the company spends the $200.000? Once the cap is met. with a cap of $200. the company will not be expected to give us this benefit. by agreeing to let the company cap its exposure for dependent health coverage.000 available. The pilots expanded the range of options. Conclusion The company was committed to limiting its exposure to $200. however. Are you willing to risk not having an opportunity to increase pension benefits? Pilots: Yes. It initially believed that the only option was to put that money into pension benefits. The health insurance market stabilized. Company: Then it’s okay with us.000 actually carried them through four years. can we agree to a year-to-year agreement on dependent coverage.000 the first year on the premiums. The $200. so the decision to be flexible was a good one. and the pilots knew what to ask for when the contract expired. The dependent coverage is more important to us now than the pension benefits.000 to either pay one year of the premiums. we are. if they were that high. Making Counteroffers (The “Give and Take”) 125 . Pilots: Since the concern is about agreeing to a 5-year commitment without knowing the increases we might have in health insurance costs. that would be worth it. or invest in the pension plan? Company: Yes.Pilots: But you do have the $200.000.

Buyer: Yes. I just can’t imagine the monthly payment on a $45.” “affordable weekly payments. what monthly payment did you have in mind? Buyer: More like $300 per month. Saleswoman: With your 740 in trade. Saleswoman: I’ll be right back. be sure to add up the total cost.” and “low monthly rates” are examples of the salami tactic. If you are on the receiving end of such a tactic. but that was several years ago.” Salesmen use this standard tactic with “big ticket” items: They present the total cost in small enough pieces to sound reasonable to the other party.500! Saleswoman: Yes. and compare it to your strategic objective. Phrases such as “for only pennies a day. I love this car. $45. it’s a deal? 126 50 Practical Negotiation Tactics .… (20 minutes later) Saleswoman: So. do you want to look at something else? Buyer: No.Tactic 31: Cut Salami Slices One way to overcome anticipated or exhibited resistance to a proposed cost is to cut it into smaller units or “slices of salami. I guess it would be around $600 per month. but the Consumer Price Index has not gone up 150%—nor has my paycheck! Saleswoman: So.000 car. Buyer: Way too much! Saleswoman: Well. Example 1 Car buyer: What.000 for a Volvo? I bought the one I’m driving for $19. I recall the day you drove it out of here. if I can give you this car with a $300 monthly payment.

and payout slices to reach the total price she wanted. Instead of a three-year lease. do you want HBO? How much? $5. Let’s see. I can’t discuss another client’s account.” She decided to cut the $45.00 per month.99 per month. you can get the Disney channel for only $5. Saleswoman: Simple. down payment. and added the trade-in.” she had him—she worked around the $300 slices. as promised.Buyer: I don’t see how you can do that. but let me see the numbers.000 down. But my neighbor pays $39.000 down and $300 a month! Conclusion The saleswoman knew the buyer was suffering from “sticker shock. Once the buyer volunteered that $300 was an affordable “slice. with your car and $6. Making Counteroffers (The “Give and Take”) 127 .00 per month for your service. Great! So.000 price into “slices” the buyer thought reasonable. I can’t afford that much. can’t you? Buyer: Yes. You can do that. I can afford $6. Sure.00 per month. Example 2 Cable representative: Owner: Cable representative: Owner: Cable representative: Owner: Cable representative: Owner: Cable representative: Owner: Yes. but what else must I buy? Only the basic service for $8. do you want Disney? Yes. (looks at the numbers) That looks good. it will be a five-year lease.

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

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

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

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

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

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

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

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

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

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.

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

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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

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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

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

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

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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.

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

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

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

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

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

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

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

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

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

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

Cory:

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.)

Conclusion
Madison’s quip diffused the emotions of the parties. Cory, while very angry, was surprised by Madison’s answer, and was able to laugh. With that, other family members joined in the discussion and they agreed that those who wanted to 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.

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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!

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

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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.

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

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

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

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

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

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

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

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

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

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

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

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

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

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

At the end of negotiations. it can be a dealbreaker.important item.” The company negotiator yielded to this small-potatoes counteroffer in order to win agreement on the health plan. If one party misjudges the situation. This experienced bargainer said. 168 50 Practical Negotiation Tactics . In one case. If used correctly—at the very end of a negotiation—the tactic can usually provide a small gain. 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. 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.” Conclusion The nickel and diming tactic is a classic negotiation tactic used successfully in a variety of situations. so be prepared to withdraw the nickel and dime item at the hint of trouble. “Okay.

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

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

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

000. has owned the house for 24 years and is downsizing to a condo. 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. $229. They sold for: $225.Tactic 45: Use Facts Fact-gathering must be part of the preparations for every negotiations session. but the key is to gather facts that you might need—not just the facts that you will need. but the right facts presented at the right time can chill or astound and completely turn things around. Sometimes. Here’s a list of the five that are about the same size as yours.000. The owner. but we feel that it’s a fair offer. They believe it is overpriced. Example 1 Henry and Maria Lopez are interested in a house that lists for $275. but you’ve priced it way too high. We love your house. Henry Lopez: Sam Jones: Maria Lopez: Sam Jones: Maria Lopez: We love the house and have made a written offer of $240. This offer is for more money than any four-bedroom houses on this neighborhood list. Sam Jones: Sam Jones: 172 50 Practical Negotiation Tactics .500. $237. Sam Jones.000 under the listing price! We realize that. What? That’s $35. (Next day) We’ve reviewed the records you’ve produced.000. $235. and $237. Being able to present them at the most appropriate and critical times has made the difference in countless negotiation situations. and we are countering with an offer of $250.000.000. the other party will ignore or refuse to believe the information.000. I’ll get back to you.000.

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

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

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

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

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.Stage 7: Reaching Agreement he final stage! It might come minutes. how solid an agreement can it be? Even parents negotiating chores and other aspects of life with their teenagers have found it useful to have their children write down and sign the list. days. When two parties believe they have an oral agreement. this process can easily result in a final settlement. They bring it out when a dispute arises. T Reaching Agreement 177 . and the child learns an important lesson about life. hours. In this process. When multiple issues are at stake and most have been agreed upon during negotiations. this tactic can produce an agreement. or even months after the first offer is presented. 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 friends or neighbors need to settle something but prefer to avoid the negotiation process. If both parties desire a settlement but cannot seem to reach it through the usual give-and-take process. which is used only when a negotiator is prepared to end negotiations without an agreement and you want the other party to make a final concession to reach a settlement. Tactic #49 (Final-Offer Arbitration) should bring about a settlement. Tactic #50 should always be used right away: Commit the Offer to Paper! Even small issues negotiated among friends can cause problems if people rely on memory and assume that both parties have “heard” the exact same conditions. and the classic Walk Away (Tactic #48). 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).

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

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

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

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

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

Larry. One day. let’s eat lunch.0 million. Larry: Yes. Larry: Michael. and I’m prepared to offer you $4. I still want to develop this block. Two months later. Michael: Good morning.) 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. visited their store. come out here! (Judy comes out from the back room. which the Bizannes accept. after no contact from Larry or Judy. today. they were prepared to accept $5.both of them love their store. Larry: Judy. Larry. but their continued walkout convinced Michael that they would hold firm. Michael: I have a check right here for 4. Michael: Well. What do you think? Judy: Larry. How’s business? Larry: Great! I’m surprised to see you again. In reality. and he is offering us $4.5 million. Reaching Agreement 183 .5 million for the building.5 million.) Larry: Michael is here again. so why are you here? Michael: I’ve discussed it with my partners. Judy: Larry. our accountant said it’s worth $6 million. you’ve already told us that.5 million. Michael calls on them again with a check for $5. and I’m not interested in less. a local developer. Michael Roberts. He met with Bizannes twice before. go back to your office. with a certified check. You rejected it. and we gave you our price. and I only need your building to own it. (Judy and Larry walk into the back room and close the door.

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

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

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

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

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

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

There was a confidentiality agreement. 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 . It would have been a better strategy in this situation to raise the issue of withdrawing the complaint during the actual negotiations. to his disadvantage. I’ll take your offer back to her and let you know.000 and the conditions of the offer.000 just to get the employee to “withdraw” the complaint. Monica accepted the $200. It was made clear that the employer had paid the additional $100.000. 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.She: authorized to pay $200.000 when all that was asked for was $100.

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

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

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

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

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 .

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

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

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

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

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

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