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SECTION I: INTRODUCTION
Real-Life Negotiation Situations
You feel you’ve been had. Sucker-punched. Taken for a ride. Why? You’ve been talking to your next-door neighbors about their cell phone service, and you find out that they are paying roughly half the monthly rate that you are paying! To make matters worse, you learn that their phone has text-messaging, a camera, no roaming charges, AND e-mail capability! Your cell phone does not have these functions. And the final insult? They didn’t have to sign a contract— and you still have 18 months left on yours. At first you get mad, thinking the phone company made a mistake that is costing you money. After all, you pride yourself on being an informed consumer— how else could this have happened? Then you ask your neighbor how he got such a good deal. He tells you that he and his wife simply negotiated the agreement when they switched providers. Boy, do you feel frustrated and foolish. You realize how easy if would have been for you to have negotiated the same deal, if only you had tried. The fact is that most people miss many opportunities to negotiate in their professional and personal lives. Negotiating is a critical ability that many of us lack, yet anyone can become a competent negotiator. It simply requires (1) knowing when a particular situation is ripe for negotiation; (2) knowing who is able to make a decision for the other party (you often need to ask to speak with the supervisor or manager in charge); and (3) knowing how to negotiate. Read this easy-to-follow book, and learn how to negotiate by practicing a few tactics presented here. As you read, you’ll be amazed at all the everyday situations in which having the ability to negotiate effectively can enrich your life.
Practical Tactics for Work and Life
In this book, we provide the reader with 50 proven, practical, and easy-to-apply negotiation tactics. We minimize the jargon and long-winded stories so you can quickly learn how to use each tactic (usually in less than a day!). You do not need to wade through hundreds of pages to find a single useful tactic. In fact, most people find a few interesting tactics right away, and try them out immediately. Each tactic is briefly defined and used in work and life examples—no lengthy anecdotes and no wordy theoretical discussions. Each is written to stand alone; the reader does not have to read and retain many pages of discussion just to understand how to use the tactic.
50 Practical Negotiation Tactics
Tips on Getting the Most Out of This Book
Read the book through, from start to finish. It only takes about two hours. Read all 50 tactics and flag the ones you believe you can use immediately and in what situations. (Or use the Notes pages in the back). For example: • Nickel and Diming (Tactic #43) – Use with copier vendor to reduce toner cost. • Commit the Offer to Paper! (Tactic #50) – Use with kids for household chores and driving privileges. Keep it handy. This book, as the title states, is a resource book. After you have familiarized yourself with the content, keep the book on your desk or shelf next to the dictionary, encyclopedia, and other reference books. Use the tactics! Practice makes perfect. Start with the ones you flagged or recorded in the Notes section. The next time you are about to enter a negotiation situation, refer to the notes you made, and try the tactic. It won’t cost you anything to prepare ahead, and the experience of trying it out will build your confidence. Everyone can negotiate, once they know the tactics and practice them. The first time you realize that using a tactic gave you a significant gain, you will be ready to try more of them. Develop your own style. The fifty tactics presented in this book are not intended to be recipes for success in any negotiation situation. Instead, they are general methods that should be adapted to fit one’s personal style or negotiation circumstance. As you use a tactic, record the results in the back of the book so you can recall how it worked the next time a similar situation comes up. Use the exercise forms in Section IV. They will help you think about how you can use these tactics. On the form, briefly describe the situation; list the parties involved (including the people who can make a decision); describe the issue to be negotiated; and finally, list the tactics that you believe might be especially helpful. Take the Quiz! Can this book help you? Circle yes or no next to each of the ten quiz questions on page 7. Score your answers: one point for each “no” on questions 1, 6, 7, and 10 and one point for each “yes” on questions 2, 3, 4, 5, 8, and 9. Total your points. If your total score is a 9 or 10, you are already a successful
But if you scored 8 or less. or engage in an unproductive argument. start reading! Most people come face-to-face with a negotiation situation of one type or another on a daily basis: on the job. 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. few people understand that normal interactions represent bargaining opportunities. practical tactics useful in real-life situations at work or at home. exactly.negotiator! Pass this book on to someone else who needs it. with family members. This book is designed to give the reader an understanding of the negotiation process by presenting fifty proven. accept what is given. they pay the sticker price. such as these: • You receive the wrong order at a restaurant. but many of us miss the opportunity to bargain in other situations. 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. Instead. Who. • A child wants a new toy now. some will in retrospect even remember being the victim of one or two of them. Unfortunately. at a flea market. 4 50 Practical Negotiation Tactics . • A co-worker asks for volunteers for a new project. with neighbors. Most readers will no doubt recognize some of these strategies.
A friend is about to select the movie he/she wants everyone else to see. Decision-making ability. “I’d like Introduction 5 . A teenager wants to buy his/her first car. Interdependency. some resolution must be negotiated. 3. perhaps you can say to a hotel clerk. A neighbor wants to remove an old tree on your property line. Both sides want a settlement. There are flexible elements to the situation. Two or more sides are involved. since you lost my reservation.” When you recognize that something can be negotiated. Flexibility. Your spouse wants to buy new furniture. 5. Each one has the five key characteristics necessary for bargaining: 1. Mutual goals. A service repair person gives you an estimate on some work. 2. be prepared to bargain. In some circumstances. time. Multiple parties. 4. “Well. perhaps the employee can say. Your boss reviews your past year’s performance. one party is only allowed to follow policy or must wait “until the manager arrives. In some situations. The parties are interdependent: what one party does affects the other. that can be negotiated. and I don’t have time to wait for another.• • • • • • • A hotel clerk tells you that your reservation was lost. what can you do for me?” Or this to a restaurant manager: “This food order is wrong. you must advise the other party of your intention to negotiate. condition. All of these situations are opportunities to negotiate. For example. The parties involved can make a decision by themselves. What are my alternatives?” During an employee evaluation. There must be a conflict in the sense that what one wants is not what the other wants. Therefore. or items of value. The parties involved are interested in reaching a common goal. such as price. and each side can involve one person or several people (each representing one “side” of the issue).
” To a neighbor you can say. and meet with you again. “I see why you want to cut down the tree. Choosing and applying the appropriate tactic to a particular situation will become easier as you begin to use them. the facts. You can then use one or more of the tactics presented in this book to achieve the best possible settlement. and the tactics that might move the negotiations along. the parties and their interests. negotiations can be concluded with a written or oral agreement. the other party will realize that you intend to negotiate and do not accept the situation. and use the forms in the back to identify the issues. 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. Once a settlement is reached. but I believe it adds value to our house. Keep this book handy when preparing for any type of negotiation.time to look over this performance review and respond point-by-point. How can you compensate us for our loss?” Once you’ve suggested that you see the situation as something to be negotiated. 6 50 Practical Negotiation Tactics . Scenarios based on actual real-life situations are used to show how each tactic can be used in business or everyday situations.
etc. When you purchased your last home or car. When making a major purchase. Do you routinely negotiate for better accommodations when you check into a hotel? 3.? 10. Do you wish you could negotiate a change in your job duties or salary? 7. have you ever felt that you were not adequately prepared to negotiate a job offer? 2. Have you ever found yourself in a negotiation situation in which your best alternative was to walk away. Yes No Self-Assessment Quiz 1. but you did not? 8. As a parent. did you request appropriate compensation? 6. The last time you received sub-par service or food in a restaurant. do you believe that you negotiated the best possible deal? 4. allowance. have you ever required a written agreement covering chores. In the past. spouse. or division of household duties. In the past.How good are your negotiation skills? Place a check in the box that applies to you. or child. 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 routinely resolved differences with a neighbor or a friend through a negotiated agreement? 5. do you routinely negotiate a last add-on before you close the deal? 9.
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decide how complicated the issue is. On the other hand.SECTION II: THE NEGOTIATION PROCESS Before you begin the process of negotiation. the process will probably take several weeks or months as the parties move through all the stages. if the situation involves a number of detailed or complicated issues or the stakes are relatively high. Examples: • a signing bonus (employee goal) traded for an annual travel budget (employer goal).) • primary sales territory • a starting date Exchange Issues: Those issues that might be traded. Examples: • office location (city. thus allowing each side to achieve one of their goals. state. the process will be fairly straightforward. If it is a relatively informal situation. They’re referred to as “win-win” because each side can achieve their goal. The “Quick Model” approach outlined below is good for simple negotiations. etc. • an allocation for moving expenses (employee goal) traded for a set number of travel days per month (employer goal). one for another. including those that are less obvious. The Quick Model The easiest way to prepare for a simple negotiation is to identify all the issues. The Negotiation Process 9 . 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 other side loses. What one side gains. rearranged. or even skipped altogether. The Comprehensive Model Negotiation is more of an art than a science. but feel free to try them when they seem most appropriate to your specific circumstance. 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. 10 50 Practical Negotiation Tactics . Depending on the situation and the parties involved. stages can be combined. Examples: • an item sold by one party and bought by the other • wage increases won by one side.Distributive (Win-Lose) Issues: Those issues that the parties are directly at odds with.
Information. Power #1– #6 Stage 2 Strategy: Choose Overall Approach to the Process #7– #14 Stage 3 Initial Offer: Getting Started Stage 4 Counter Offer: The "Give & Take" Stage 5 Pressure Bargaining: Striving for Conclusion Stage 6 Key Methods: Achieving Progress Stage 7 Reaching Agreement: Settlement of Impasse Tactics to Consider #15– #21 #22– #31 Negotiation Phase #32– #38 #39– #46 #47– #50 Initiation Phase Resolution Phase 11 .The Negotiation Process Table 1: The Negotiation Process: Seven Basic Stages Stage 1 Identify situation as one for negotiation Preparation: Key Factors – Time.
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SECTION III: 50 TACTICS FOR SUCCESS
Stage 1: Preparing to Negotiate
n many negotiation situations, the parties have time to prepare for the actual bargaining. In other situations, such as when you’ve been served something at a restaurant that you did not order, there is no time to deliberate. You have to be prepared to instantly recognize that the situation can be negotiated, and begin to bargain. You can have time to prepare if you simply ask for it. For example, at the end of an employment interview for a management position, the candidate was surprised to receive a job offer on the spot. The candidate wanted the job, but wisely recognized that she could negotiate the contract. She said that she was very interested, but needed forty-eight hours to make up her mind. She used the time to talk to current employees, and developed a list of perks and conditions that she then negotiated, before accepting the position. To prepare for a negotiation, do as many of the following activities as you can: 1. Have realistic objectives. Identify everything that can be negotiated, and set realistic objectives for each item. If, for example, price is a factor, determine the desired outcome and set a minimum (or maximum) acceptable outcome, beyond which you will walk away and choose another alternative (see Tactic #1: Know Your BATNA). Also determine your opening offer in light of your desired and your minimum outcomes. It is often helpful to list each specific item to be negotiated and your minimum acceptable offer for it, as well as your desired goal and an acceptable opening offer (see Tactic #5: Listing Items). Thus, for each factor, write down and stick to three figures:
1. An opening offer. 2. The desired “best” offer. 3. A minimum (or maximum) “worst” offer. 2. Learn about your opponent. By whatever legal and ethical means possible, learn everything you can about your opponent. Talk with friends, neighbors, co-workers, past negotiation foes, even family members. If you are able to guess or find out about your opponent’s real objectives and/or limitations, you can gain an invaluable edge (see Tactic #2: Know Your Opponent’s Real Objectives). 3. Gather all the facts. During the heat of negotiations, presenting critical facts or objective criteria can turn the tide in your favor. You can usually anticipate and collect this critical information in advance during the preparation phase (see Tactic #4: Use Objective Criteria). 4. Set ground rules. In labor negotiations, the parties first agree to ground rules such as where, when, who, and how often the negotiation sessions will occur. Detailed ground rules are not needed in most everyday negotiation situations, but there are times when they help people come to agreement. Agreeing in advance on the location for discussions can give one side an advantage (see Tactic #3: Control the Setting), but in other situations, the critical ground rule will be about timing (see Tactic #6: Timing is Everything), forcing both sides to reach agreement faster. In negotiating with family members, friends, or neighbors, one well-advised ground rule is to stop the talks as soon as anyone raises his/her voice, curses, or makes a threatening comment.
50 Practical Negotiation Tactics
Tactic 1: Know Your BATNA
At what point will you walk away from the negotiation? You improve your position in any negotiation if you can walk in already knowing your BATNA—your best alternative to a negotiated agreement. The BATNA is the outcome you prefer over what the other party has proposed; if you define it at the outset, you are less likely to agree on something during an emotionally charged discussion and regret it afterward.
Harvey Huff bought a new 1956 Chevrolet from a local dealer. After forty years, he finally decided to sell the car he had loved and carefully maintained in original condition. Harvey did not need the money, but he intended to move three thousand miles away, to a condo in Arizona. The ad he placed in the local newspaper produced only one potential buyer: Patrick Knight. Harvey: Mr. Knight: Harvey: Mr. Knight: Harvey: Mr. Knight: Harvey: Mr. Knight: Harvey: Mr. Knight: Harvey: Well, now that you’ve checked it out, how do you like it? It’s in great condition, just as you described it. Any questions? Will you take less? No. It’s easily worth at least $20,000. That’s the price. $18,000, tops! No thanks. Okay. $20,000. I need it for a new restaurant. Restaurant? Yes. We cut off the top of the vehicle and people sit in it and get served their meals in our “oldies dream car!” Never mind, I’ll keep it. I haven’t maintained it for all these years just so you can destroy it.
” which was refused. The union negotiators convinced the employees that this too. and the Jaggers decided once and for all to sell their business assets and invest the proceeds conservatively. The union negotiators thought the Jaggers were bluffing. Conclusion Selling their business was the Jaggers’ BATNA. The Jaggers gave the union their “last. best. With only two weeks remaining before a threatened strike. 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. providing them with a very good income for life. The threatened strike became a reality. the Jaggers decided to seek buyers for their land. The union is demanding wage and benefit increases. and final offer. The $56 million dollar business took them 30 years to grow. as a last resort. In this case. 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. as Harvey had for many years. The owners. 16 50 Practical Negotiation Tactics . and equipment.Conclusion Harvey’s best alternative—his BATNA—was simply to hold on to the car for the moment. selling became an attractive alternative to a strike or prolonged battle. and it now employs 230 craftsmen. was a power play. and either move it with him to Arizona or find another classic car collector who might buy it (perhaps for less) and preserve it. When negotiations with the union became hopeless. inventory. They learned that their assets would be easy to sell and were worth more than originally estimated. For the past two months. Example 2 Shari and Jim Jaggers own a successful West Coast pottery company. notified all the employees of their intentions. his BATNA was not to hold out for more money.
What changed your mind about getting rid of it? It is still in perfect condition. it’s to your advantage to know what is behind a seller’s decision to put it on the market. I’ll have to think about that.Tactic 2: Know Your Opponent’s Real Objective Each party in a negotiation will know. John assured Tom that this would never happen. it’s still perfect. Example 1 Tom had always admired John’s 1861 Confederate rifle. If you are the party making the offer on the house.000. This is a good thing to know. I think so. A person who has to sell her home because her company is relocating her. you know. I guess I couldn’t take less than $20. and told John several times to let him know if he ever wanted to get rid of it. 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. so Tom was surprised when John called him out of the blue one day with a proposal. what the other party’s desired outcome is. for example. she might have to take a lower offer just to be able to move. I’ve been thinking of getting rid of it for a while. Are you finally ready to sell it? Yes. Gosh. Just as important is the why. because if the company does not provide relocation benefits. Make me an offer. John: Tom: John: Tom: Tom. right? John: Sure.000? That’s more than I planned. Tom: $20. How much are you thinking it’s worth? John: Well. you still interested in my rifle? Of course. at some point. 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. sure. Just running out of space. Preparation 17 . It is extremely rare—one of only 100 made with that bore and handle.
One of them mentioned that someone who is negotiating with him to buy a restored Winchester rifle for $18. has begun negotiations to sell his firm to BigManu Company. When Tom found out why John decided to sell his rifle.) Tom: John.000. Rick needs to remain president of the company for the next two years.500 had an 1861 for sale. He is two years away from retiring and does not want his business to fail before he does. and we’re committed to keeping it open as a major division of our company. Well. but then he will be happy to retire. we really want to buy your company. Was Tom interested? Tom declined. BigManu: Rick. if you could come up a little—say $18. Conclusion Tom entered into the negotiations suspicious of John’s motives. and now the two-year requirement has become a stumbling block in the negotiations. but I could get the money to you right away. Without some trust. fearing that this will put all of his employees out of work. parties to a negotiation are not likely to reach agreement. so he is making it a condition of the sale that ALL current employees must be retained for a minimum of two years. Tom: Okay.500—we’d have a deal.Tom: Okay. but thought this might explain John’s sudden interest in selling the rifle. (Tom investigated the “market” for a restored 1861 Confederate rifle by calling a few other collectors. The sale price for the company has not yet been agreed to. Example 2 Rick. He doesn’t want BigManu to know this because he thinks it will hurt his negotiating position. the owner of a small manufacturing company. we 18 50 Practical Negotiation Tactics . I’ve been thinking about your offer. However. I don’t think I can go higher than $18. let’s do it. John: Well. let me think about it and I’ll get back to you. it made the negotiations easier. Tom now felt comfortable negotiating the price. No longer worried about John’s motives.
BigManu’s negotiating team concluded that they were in the dark as to why this two-year requirement was so important to Rick. you will have a say in how the employees are treated. I just can’t go through with this sale. Within the parameters of efficiency and effectiveness. In hopes of pushing the deal forward. 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. Let’s talk later. We still can’t find a way to do it. We just can’t make good operational decisions with our hands tied. Preparation 19 .) BigManu: Okay. let’s talk about the job guarantee you wanted. they decided to put their price on the table and revisit the issue after a price was agreed upon. my employees will prove to you that they are uniquely able to run this place. Rick: These people are the best at what they do. Without this commitment. and we think it’s an odd request anyway. I just want them to have a real chance to show you how good they are. The price they gave Rick was actually more than he had expected. You’ll be in place to participate in our employment decisions. and I hired every one of these people. Working as a division of your company. and he accepted it subject to agreement on the two-year employment guarantee clause. What is it you’re afraid is going to happen? Rick: I am convinced that with a two-year time frame. I just don’t want it to change after I’m gone. (Between negotiating sessions. they will make you plenty of money and more than make up for any “operational” difficulties it might cause you.cannot guarantee to you that ALL of your employees will be retained for two years. BigManu: We just don’t see a way to give you what you want on this. Rick: I built this business from the ground up.
This wouldn’t have anything to do with your own plans for the future. BigManu: Why don’t we guarantee to you that you will stay for two years? That way. he agreed to allow BigManu to accommodate him without limiting their ability to make business decisions. I’m hoping to retire in two years. 20 50 Practical Negotiation Tactics .BigManu: We intend for you to stay and become a big part of our company. would it? Rick: Well. you’ll have a guaranteed “in” to protect your people. Let me get back to you. to tell you the truth. Once Rick realized that he no longer risked anything at the negotiating table by making his need known. Rich almost lost the deal. Surely you’ll be able to “protect” your people if they are as good as you say. I certainly want to do all I can until then to protect my people. but we won’t be completely tied to operations as they are now. that might work. Conclusion By masking his real objective (giving himself two more years as president before retiring). Rick: Well.
and go play somewhere! Cybil: Well … Okay. Bailey: Cybil: Preparation 21 . too. the frog is everybody’s favorite. it’s a deal. I like the frog.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. 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. they have the information they need at their fingertips. they control the breaks and environmental factors.) Let’s take all our Beanie Babies to my house to trade! Okay. girls. such as a hotel conference room.) Prepare for the negotiations by controlling the setting—to your advantage or to mutual advantage. Inexperienced negotiators fail to realize that the other side has an advantage if the meeting is held on their home turf: they are more comfortable. Mother: Hush. Make up your minds. and so on. (thirty minutes later) Bailey: So. (Think of the showroom tactics used by car dealers. Cybil. how can you trade the frog—he’s your best one! Dede: (Bailey’s other sister) Yeah. but never to THEIR advantage! Example 1 (Two ten-year-old girls are talking.
non-stop negotiations wore down the members of Team A.Conclusion Bailey. and other conveniences in the adjoining room. not one member of Team A was chosen to return to the table. until we have a settlement. around the clock. Team B. The physical and emotional demands of 24-hour. as long as they met in the boardroom of Team B.” The chief negotiator for Team B agreed. in their own familiar setting. After forty hours of negotiating. When negotiations resumed in two months over another piece of property. Both sides desperately needed to settle a property dispute. The firm deadline was only four days away. They were blamed for accepting the same deal that had been rejected only days earlier. That’s why she wanted to go to her house. About thirty-six hours later. meals. was still going strong. Team B had clearly used its home turf to gain a substantial advantage. 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. Team A agreed to change the meeting place. having set up beds. Team A was whipped physically and emotionally. although only ten years old. They had all been replaced after their decision to negotiate “around the clock” in Team B’s boardroom became known. while members of Team B were able to stay fresh. The chief negotiator for Team A publicly challenged Team B to “negotiate non-stop. Conclusion Team A did not realize the practical advantage they gave Team B when they agreed to negotiate in B’s boardroom. 22 50 Practical Negotiation Tactics . Example 2 Two five-person negotiating teams had been trying to work out a deal for over a month.
If they tell us that they either Preparation 23 . It was twice as high as the estimates Larry received from other plumbers before they started the project. and show them the actual work that got done. but was shocked at the amount of the bill. Will is a licensed plumber. Example 1 When Larry’s cousin offered to help Larry finish the renovation on his bathroom. Things turned sour. I would have charged anyone else much more. you are likely to resent them for it and hold out. After all. Larry was thrilled. This uncomfortable negotiation followed: Larry: Will. I was kind of surprised at how high it was. rather than give them the “advantage. Larry: Well. I gave you my “family” rate. these plumbers certainly acted like they understood the work when they gave me their estimates! Will: Tell you what. Believe me. Larry: But Will. If you think that the other party knows more than you do. Will: Larry. Larry had expected to pay him for his time. when Will presented Larry with his bill. When we got into it. and he and Larry have always gotten along. based on objective criteria (think property appraisals in real estate). I anticipated much less work. Prepare for the negotiations by having an outside authority measure or weigh in on each side’s position.” This can hold up an agreement and cost you in the end.Tactic 4: Use Objective Criteria Use objective criteria to judge the quality of each side’s proposals—you will probably improve your chances of coming away satisfied. Larry: Just make sure you’re comparing apples to apples. and they were much lower than this. about your bill. it became clear that all of those pipes had to be pulled and new ones put in. When you first told me about your project. though. Let’s get the guys back in who gave you estimates. I did get some estimates from plumbers.
disagree on the need for that work or that they would have done it for less. Larry: That sounds fair. I certainly didn’t mean to offend you. From a look at the portfolio. and decided to bring the matter up at a Board meeting. The college’s budget officer was understandably offended. and no one had ever questioned her performance. The estimates would have been higher than what cousin Will charged. he used his financial expertise to analyze the investments of the college’s endowment fund. she had been investing the college’s endowment funds for many years. they would have had to revise the figures. Example 2 After Stuart was appointed to the college’s Board of Trustees. Had they actually prepared bids on the work. I find your suggestion to the Board that I haven’t been doing my job right to be very insulting! Stuart: I’m sorry. they said. 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. because (as Will pointed out) it wasn’t an apples-to-apples comparison. Settling on the right objective criteria upon which to base a negotiation requires that both parties think through their options. Conclusion When the other plumbers looked at the work. while she wasn’t an expert. Comparing the estimates to Will’s actual costs would have been counterproductive. I’ll revise my bill to meet the lowest estimate you get. He was disappointed in the performance of the fund. Budget Officer: I don’t know what your problem is. they had to agree that their early estimates were low. I have been very diligent about making sure that the fund makes the most money it can without putting us at risk. my first reaction was that some of the investments 24 50 Practical Negotiation Tactics .
and the budget officer was comfortable that the risk and expense of such a strategy was small and worth the effort. Budget Officer: Yes. I don’t question that they were sound at one time. As you know. if both of them demonstrate a similar strategy and produce better results after expenses. 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. the college is a private institution. considering commissions and all. Okay? Budget Officer: Okay. 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. I find that a more aggressive investment strategy produces a better return. Preparation 25 . At the end of two months. but such a strategy also increases risk and costs more money to administer. Stuart: No problem. and its resources are limited. but I think they more than offset the gains. there might be increased risk and some expenses for commissions.were stale. 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. because she did not have the background in investments necessary to trust such advice. Now. but we can ask them to plan and cost out each move. Stuart: Yes. how can we identify the right parties? Conclusion The two-month experiment did produce the results Stuart had anticipated. then you and I can talk about changing our investment strategy. We just can’t make up losses to the endowment fund without considerable impact on our annual budget. I don’t want you directing how they’re going to go. I have a suggestion. In this situation.
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. Once you both agree on the list of things to be negotiated. not on what you want to spend. It will cost me more than $10—about $35 per week. (3) more chores. Mother: That’s a large increase—and we just raised it last year! Shari: Well. Example 1 Shari. This strategy can build trust in the negotiation process itself. has asked her mother for a $10/week increase in her allowance. and for going out with my friends. Mother: But your allowance is based on what you earn in your weekly chores. cut the grass. Shari: Well. and (4) different treatment from your sisters! 26 50 Practical Negotiation Tactics . your little sisters will want equal treatment. baby-sit your sisters.Tactic 5: List All Items to Be Negotiated Break down the issues to be worked out into separate items ahead of time. what else can I do. you should each put together a “package” of several items on the list and work out a win–win agreement for these things. wash the cars. if I give you an increase. not just an allowance increase! There is: (1) a $10 increase. a sixteen-year-old who lives with her parents and three younger sisters. Shari: I’m four years older than the next-oldest. and ask the other party to add to the list. You can’t treat me the same! Mother: Well—so we’re talking about several issues. (2) a later curfew. I need more money for clothes and CDs. besides washing the dishes every night and cleaning my room? Mother: You could cook dinners.
Union: We will agree to your proposal on item #6 (the number of paid holidays) and item #14 (the new overtime hourly rate). Example 2 The union and management negotiating teams opened discussions with a list of 48 demands. while your Dad and I go out. Shari: (pause) I like it! Conclusion Shari’s mother helped negotiations along by listing all of the items being discussed. while the mother won a Saturday house-cleaning and a night out each week. The union’s chief negotiator. Then a “win-win” solution could be determined. And if you clean the whole house on Saturday. and item #23 (the wellness program voucher). An allowance increase.Shari: Right! Mother: So … I suggest no allowance increase. Shari got the $10 she wanted and a later curfew. item #11 (the clothing allowance). Now it is time for each side to list their desired outcome for each item. which the other children would have requested as well. but unlike your sisters. Management agrees. if you agree to our proposals on item #3 (the paid vacation schedule). since all of their items were included as requested. in the first session. I’ll pay you $10 to babysit every Wednesday night. The trading of items (where initial demands are discussed and agreed upon) begins. Management: (after calculating the total value of the five items during a break period) We agree to your package of five items. was avoided. opens by proposing the list of items. Now we have a package deal to propose … Preparation 27 . you get to stay out an hour later that night.
Conclusion In most labor negotiations. the two sides will at this point sign and date the list of proposed items. 28 50 Practical Negotiation Tactics . Then negotiations can resume on the remaining 43 items. thus removing them from the discussion table. other trade-offs are proposed and agreed to until only a few items remain.
thanks. Would you possibly be interested in selling it? No. It was nice meeting you. but money doesn’t mean anything to me at this point in my life … Well. the following conversation occurred: Bob: Car owner: Bob: Car owner: Bob: Car owner: Bob: Hello. Bob followed the man home. Not even for. Prepare carefully. he saw an elderly man get in his dream car and drive away. Timing is everything! Example 1 Bob Hillard had been coveting a turquoise 1963 Chevrolet Impala Supersport convertible for several years. He stopped and knocked on the door. time of day. As the man got out of his car. as he left the supermarket.000? No. That’s a generous offer. he noticed a FOR SALE sign in the yard. $12. I live a few blocks from here. day. and general circumstances under which negotiations take place can substantially impact the outcome. Bob made it a point about once a month to go out of his way and drive by the man’s house.) Preparation 29 . Hi! What can I do for you? I’ve admired your ‘63 Impala for years. on Briarwood Road. One day. and do your homework. my name is Bob Hillard. One day. (For the next three years. just out of curiosity. 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. say. which turned out to be only a few blocks from his own house. I love this car—restored it myself.Tactic 6: Timing Is Everything The exact month.
the proposal would die at midnight. Can you come back on Monday at 10:00 a. Conclusion While Bob did not achieve his goal during his first negotiation effort. resulted in another 6-6 30 50 Practical Negotiation Tactics . A third vote at 3:00 p. so I guess I will be selling it. and I promise to take good care of it. had issued a deadline of December 31st.000. Then it’s a deal? Yes. and wondered if your ‘63 Impala might also be for sale … (obviously not remembering Bob) Well. I’ll see you on Monday.Bob: Car owner: Bob: Car owner: Bob: Car owner: Bob: Car owner: Hello! I noticed your FOR SALE sign. and the vote was a 6-6 tie each time. The partner organization. Follow me. for tax reasons. Can I see it? Sure. I’m moving to California to live with my daughter. 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. beyond which the project would have to be abandoned. Well. the timing of his second effort was perfect and it enabled him to negotiate for the car of his dreams. if a seventh vote could not be found by the pro-agreement side. A majority was needed to pass the partnership agreement. I can’t take it with me. to seal the agreement at the courthouse? Sure. that’s a fair price. December 31st. (after a careful inspection) It’s a very nice car! I’ll give you $12. Example 2 It was Sunday. as a matter of fact.m. The board members had met twice before.m.
Preparation 31 .m. Conclusion The leader of the pro-project group recognized that they might have a unique timing advantage. in the end. That effort failed. A member of the pro-project group quickly called for a vote after the leader gave a signal.m. He planned for it accordingly. At 5:30 p. Then.deadlock. the leader of the pro-partnership side heard someone say that the meeting needed to end by 5:30 p. Both sides caucused: The leaders on each side met to negotiate a compromise. the project had been stalled by 6–6 votes.. When the meeting resumed at 4:00 p. during an hour break in the meeting.m. timing was everything.. For weeks. The measure passed 6–5 at 5:45 p. and the meeting was adjourned. the pro-project leader told his members to filibuster until he gave a signal and called for another vote.. as predicted.m.. and it worked. 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. a member of the anti-project group left the room.
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such as Tactic #19 (Make a First and Best Offer). if you want to begin in a friendly. such as a third-party negotiator. might step in and help settle negotiations between a union and administration negotiators.Stage 2: Planning a Strategy he next stage is critical: Choosing a strategy. Look at the personalities of each negotiator and see which side will be more vulnerable to pressure bargaining (Stage 5). The overall strategy chosen does not limit the use of other tactics. but in practice it will likely influence the whole process. and Tactic #10: Make a Reciprocal Buy-Sell Offer) are also useful alternative strategies. Tactic #12: Find Common Interests can be helpful. such as a buyer and a seller or a city and its union. and Tactic #48 (Walk Away). Are there any outside people who might influence the process. or one-time-only. decide whether the negotiations should be continuous. 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 . uncaring approach (Tactic #9: Control Your Emotions. or someone’s colleague or spouse? Third parties such as other buyers or governmental agencies might have to approve the agreement before it becomes final. cooperative manner. Identify all outside influences and hidden agendas before you develop your strategy. Tactic #33 (Bluff). After you have evaluated these factors. For example. Be sure you are aware of this at the beginning. Third parties sometimes have their own hidden agendas. for example. then Tactic #13: Set a Deadline or Tactic #11: Have an Expert Witness might be helpful. 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. as it can substantially alter the negotiations between two primary parties. as well as their bargaining history and financial and political positions. you must first evaluate your needs and those of your opponent. In some cases. A neutral. Some of the tactics listed in this book are only suitable for single-session negotiations. If you prefer to take a firm and direct approach. a third party can serve as a mediator (a legislative body. Before you can do this. Tactic #43 (Nickel and Diming).
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).side is either caught off-guard or (in some rare cases) a negotiator will be able to achieve an unexpected fantastic settlement. I offer half the asking price. By assuming opposing roles. and the buyer was able to completely renovate the house and still have a great deal. but the inside was a complete turnoff. the seller’s agent called the buyer about the property. If there is a significant weakness in your position. Weeks later. 34 50 Practical Negotiation Tactics . The desperate owner agreed. The buyer said he wasn’t interested. two people on the team will be more successful because they evoke different emotions from the other side.” The agent took the offer to the seller. The agent explained that the seller was desperate. 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. “Please make any offer—they are motivated!” The buyer responded. His teenage sons had “trashed” the house. 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). with “All right. half-serious. For example. The buyer loved the location.
Example 1 Carol has been unhappy with the house she and her husband bought six years ago. so do not underestimate what you might be able to achieve. it is likely that your opponent will.000. but quite frankly. but the house has increased in value. and just refuses to reduce it.000 is very high. Carol: We really want to sell.Tactic 7: Decide How “High” Is High Your first demand in the negotiation process is the most important decision you will make. Surely there’s some flexibility in your asking price.000. After all. but not so high as to end the negotiations before they begin. but the redecorating is of little value. Be realistic. Buyer: The air conditioning might have increased the value of the house. Anyone buying the house would want to change wall colors or add new carpets. However. You are not likely to get more than you request. Each time. Buyer: We really like the house. The market hasn’t gone up that much in six years. Planning a Strategy 35 .000. six years ago you bought it for $60. And I don’t see a lot of difference in the neighborhood. her real estate agent told her that they were probably not going to get a buyer because she is asking too much. one buyer shows some interest. but certainly not exceptional in any way. Carol wants $160. She has had it on and off the market for the last five years. and then look at the demand from your opponent’s perspective. First. If you consider the demand ridiculous. Finally. with no success. so think this through well ahead of time. It’s a good neighborhood. we think $160. We also think that the neighborhood has improved over the last few years. but we simply can’t take less than $160. as well. we’ve put a considerable amount of money into a new air-conditioning system and in redecorating. Carol: Maybe not. Your demand should be high enough to give you room to compromise. your request must not be so low that the other party concludes that you are not negotiating in good faith.
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 buyer took it as a signal that either Carol didn’t want to sell. Carol drove off a potential buyer by setting an asking price that was just too high. or she has unreal expectations. Inquiries to other law firms were not very helpful because in almost all of the instances. and then $10. Neither Edward Bits nor Edmund Bites. The other law firm was prepared to pay $100. Example 2 The law firm of Bits & Bites was a Sioux City institution.000 immediately.Buyer: What if we offered you $100. The partners are interested in selling the name. We’re curious.000 offer by coming down in price at least a little. When Carol refused to budge.000? Carol: We really can’t take less than $160. 36 50 Practical Negotiation Tactics . Buyer: Good luck!! Conclusion The buyer expected Carol to counter the $100.000. as to how you think the name is going to benefit you. the founders of the firm. The firm now had over twenty-five law partners who owned the firm and continued to benefit from the reputation and name recognition of Bits & Bites. enjoying a statewide reputation for quality representation. Here’s how the initial negotiations went: Partners: Well. In any event. we are certainly interested in your request to “buy” our firm name to use in your city. though.000 or 1% of profits (whichever is less) over the next ten years in order to use the name. but they have no idea what the value of their firm’s name might be in this nearby city. the transaction also included some degree of consolidation of the law firms involved—not just the use of the firm’s name. were still alive.
(surprised) Well. starting with the ten partners you describe. Yes. I’m kind of embarrassed now. In every instance. expect to pay for that. that is a very high number. And even though you don’t have an office in our city. we reserve the right to withdraw our permission. that’s just our initial figure. it would be impossible to create a new name out of the names of our key partners. Give us some range.000 initially. (concerned about loosing the opportunity) Wait. We probably won’t be insulted. but we get to keep all of the money we’ve received up to that point. Partners: New law firm: Partners: New law firm: Partners: New law firm: Partners: New law firm: Planning a Strategy 37 .New law firm: We are establishing a partnership of ten lawyers—the top two moneymaking attorneys in each of five local firms. Using the Bits & Bites name can only enhance our profitability. because you are in the state capital and your firm has handled a lot of high-profile political cases. If at any time we feel that you have “harmed” our name. To offer it now would be an insult. one of these two attorneys carries the surname of the firm they are leaving. of course. Let’s just pretend this didn’t happen. you have a very solid reputation there. I guess this is just not something we’ll be able to pursue. that you anticipate to build a very profitable law firm. So. Well. We should assume. What number were you thinking about? Well. we want $500. We weren’t really thinking about that amount of money. we do. and then 10% of your profits each year for as long as you use the name. because we were not even close to that number. Thanks so much for meeting with me. And we. then. I really don’t feel comfortable doing that now.
Both parties were probably at a disadvantage. The price they were willing to pay would have indicated what the naming rights were worth. since they had initiated the contact. because there was no “objective” criteria available to help them set a reasonable price. Bits and Bites should have let the prospective firm make the first offer.Conclusion Bits & Bites lost an opportunity here because their initial demand was so unrealistic with what the prospective firm thought the “naming rights” should cost. It immediately dropped the idea. 38 50 Practical Negotiation Tactics . In this situation. rather than negotiate. Either side could have asked for too much.
I heard that you want to sell your riding mower. what’s your price? Andy: $1. One member of your team acts friendly to people on the other side (the good guy) in order to gain their trust and support. Peggy. Half what it cost us new. Peggy: That’s fair. Peggy: I assumed they went with the mower. etc. you’re really moving! I hate to see you leave. Peggy: So. I want to keep those. Andy and Paula. Your opponents will want to avoid confrontation and unpleasantness with the “bad guy” and are likely to be more willing to cooperate with you. I can use them. Example 1 So. not for $1. Peggy: Planning a Strategy 39 . while another acts difficult. Andy and Paula: Yes.200. (bad guy) and implies that his or her side will hold firm on their demands. angry. I don’t know what the deal is now. And take the leaf-catcher attachment and the gas can. Andy: No. since they are sitting out in the driveway with it. Andy: No. we won’t need it at the new condo. so I’ll take it. threatening. Peggy: I’m hearing one thing from Paula and another from Andy. Paula: Go ahead and ride it home. They cost about $300. and I know how you take care of things. Andy: I want them… Paula: Go ahead and take them. only three years ago.400 if the catcher and can are included. I’ll go home and you can call me if you two can reach an agreement.200! We should get $1.Tactic 8: The Good Guy/Bad Guy Routine The “good guy/bad guy” routine is a useful one.
perhaps even unintentionally. Sandy. we’re here to negotiate a new service agreement. And we want to change the 24-hour service response time to 48 hours. Example 2 Sandy (business owner): Miguel and Liz (representatives of a computer firm). Miguel: I’ve figured $4. Miguel: Well. 40 50 Practical Negotiation Tactics . And cut the training hours from 55 to 20. Sandy: What? First of all. we’ve been fairly happy with your responsiveness.000 in service calls last year alone because your damn people don’t take care of the equipment. and your training programs. She very wisely recognized the routine and forced Andy and Paula to give her a clear. causing our reps to spend hours on the road. Liz: But we still want to renew your contract. And we need to add a clause that holds your company responsible for machine damages. firm offer if they decided to continue negotiations. the quality of the technicians’ work. You are located outside our primary service area.Conclusion Peggy thought she was getting the old “good guy/bad guy” routine. We estimated that it has cost us more than $50. your rate of $3. Let’s talk. She realized that it put her in an impossible negotiating position.000 per month is one of the highest in town. Miguel: But not at this ridiculous rate.200 will be about right… Sandy: I can’t begin to pay that! Liz: Calm down. your account has taken too much time. For the past three years. Sandy.
Sandy. and it’s not efficient enough anymore for us to handle smaller firms—especially those outside our region. Any luck. If not. Planning a Strategy 41 . I’m going on to lunch. Sandy believed that she was able to avoid a terrible deal and negotiate a fairly good one. Then he left so Liz could convince Sandy that they needed to quietly reach an agreement she could “sell” to Miguel later. I want to keep you as a customer. you two? Good news. Sandy. Conclusion Miguel and Liz used the good guy/bad guy tactic in the classic form: Miguel scared and threatened their opponent. Sandy. I’m afraid our relationship is over. (Three hours later) I’m back. with a position he knew was unreasonable. Our customer base has grown. Miguel! We’ve worked out a deal I think you can live with.Miguel: Sandy: Liz: Sandy: Liz: Miguel: Liz: No.m. even though it was far above the previous contract. I hope you can meet my terms. these terms will put me out of business—I’m a small 20-person operation. but Miguel’s right. Liz. I’ll stop back about 2:00 p. What can I do? Let’s try to negotiate something reasonable before Miguel gets back. I’ll explain on the way back to the office.
I have a problem with my recent bill and my billing rate.Tactic 9: Control Your Emotions Stay cool. 42 50 Practical Negotiation Tactics . and might even harden your opponent into an unfavorable position (for you or for both of you). How may I help you? Hello. when he discovered that the long-distance company serving his home phone was charging him four times the rate currently being marketed by that company. He decided that the best approach was to act indignant when he spoke to the company representative. The fault was partly his because he did not stay on top of changes. he was very unhappy. made some very good purchase decisions for his small business. such as deals on computer packages and phone services. because we have had a sick relative out of town and we used long distance a lot this past month. So. but I recently was sold a $. 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. It seems that the rate you are charging me on my home phone is $1.00 a minute. Here’s how the phone conversation went: Customer representative: Mike: Over-the-Air Long Distance. He had.10 a minute rate at my office location. in fact. Control your emotions and use them to your advantage! Example 1 Mike prided himself on being an informed and educated consumer. This will put you at a distinct disadvantage from this point on. A display of temper or frustration can indicate to your opponent that you are uncomfortable with your side’s negotiating position and they will assume that it is weak. I noticed this. 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.
Well. Had you brought this to our attention before. Customer representative: Let me pull up your account. (beginning to sound irritated. we certainly would have discussed your options. But as a very good customer of yours. But I am able to offer you a $.I expected the bill to be higher than usual. 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. and I also realize that if I had examined my bill closely. It hasn’t been increased at any time. I would think you would have given me the best rate you offer new customers. Mike. I see that the rate you are being charged is the rate we offer for the type of service you have with us. I would have known I was paying too much. to begin now. of course it is not always possible to give existing customers some of the “offers” we have out. how would anyone who might only have residential service even know to ask? Well. I realize that that might be the rate I started paying when I first took your service over eight years ago. Mike: Customer representative: Mike: Customer representative: Planning a Strategy 43 . 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.10 per minute rate on your long-distance service. but this was quite a shock.
We certainly don’t want to lose you as a customer. I … (interrupting and in a stern.10 per minute. however. and I should be treated with more respect! I’m sorry. there’s no reason for this conversation to continue. He was walking a thin line. which should rightly be $50. (with a much angrier tone) Madam. The latter would not have produced the desired results. Wait—I’ll get my supervisor. and I want to speak to someone in authority so I can terminate my service. Mike’s willingness to show a measured “flare of temper” brought results.Mike: I would imagine so. But I’m looking at a $500 longdistance bill. but I can’t do that. I would hope that you would credit my account for this better rate for past service. In doing so. either. she kept Mike as a residential customer as well as a business customer. The best we can do is fix the rate for the future. between controlled. 44 50 Practical Negotiation Tactics . controlled voice) I need to talk to someone who can do it immediately. Is your supervisor there? I’m certain that he cannot adjust your account retroactively. but I am very angry with Over-the-Air Company. a long-time customer of your company. If you can’t get me someone to talk to. 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 $. strategic anger and abusive behavior. I am. after all. don’t think this is directed at you personally.
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. that’s just not fair. Working with fireworks is working with explosives. The owner told the employees that he was worried that during the overtime shifts. The most-senior employees want to have the right to refuse overtime and have those less-senior employees take the overtime. They will be putting the plant AND their fellow workers at risk by not being here. they would become dissatisfied with their pay and want their base pay increased. Where are your managers? Where is the training necessary to make Planning a Strategy 45 . and it’s getting old. On those overtime shifts. I’ve got to have the employees with the most experience to protect this place. The owner was afraid that if the mostsenior employees routinely passed up the overtime and the overtime pay. Negotiator: (now beginning to get irate) You talk about the risk to your plant if the less-experienced workers are there on overtime shifts without the senior employees.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. The employees’ negotiator finally decided to use “indignation” to break the stalemate. and it’s not what we’re even talking about. 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. and that they should be asking for a fairer base wage for the work they do for you. Owner: Now. and you just can’t be too careful. lesssenior employees might be at greater risk of injury because they have to handle explosives.
he became more reasonable. don’t be so hasty. The safety of the plant demands it! (standing up to leave) This is just ridiculous. though. But we protect our people. In practice. Then you can’t have it both ways. or they’re not. The end result was that the most-senior employees did win the right to refuse overtime. No one who takes a job with us can be unaware of that. but not all? Conclusion The owner was on shaky ground with this one. You are not addressing the real issue for you: money. But the fireworks business is a business that involves risk. most of them continued to take all the overtime they could get. Sit down. The negotiator was also running a risk with his flare of temper. All I’m saying is that the most-senior employees have to be on the overtime shifts. or they’re not. (He begins to walk out.) Now. not at all. the negotiator would have had to find a way back into the negotiations without losing ground. 46 50 Practical Negotiation Tactics . What if we were to agree that the senior employees could refuse half of the overtime offered to them.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. I’m not coming back. either the employees are properly trained. Had the owner let him leave. After the employees’ negotiator threatened to walk out. now. Either they are properly protected. That’s all. Until you’re ready to talk about that. sit down.
called the “Reciprocal Buy-Sell Offer. a well-known negotiations professor from Harvard University. has decided to use the “reciprocal buy/sell offer” process to settle this last piece of the estate. However.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. so you set a price at which you agree to buy or sell the coffee grinder. with the highest bidder paying the amount to the other side in compensation for their loss. Susan. Then Susan. you’re the oldest. you will decide if you want to buy it for that price or receive that amount from Mary Anne (but lose the grinder). with winner taking all. I’m willing to pay or let it go for $800. The second party then decides to either buy it at that price and pay the first party. my kids and I looked on eBay and everywhere else and found out that coffee grinders in perfect condition sell for about $500. 2) They can flip a coin. 3) They can agree to sell the object to a third party.” is the recommendation of Howard Raiffa. The first party decides on a price for which he or she will either buy or sell the object to the second party. 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. since this one is in perfect shape and it was Mother’s. Mike. I’ll give you 48 hours to decide the price. Both sisters covet it. the executor of the estate. Mike: Mary Anne. and split the proceeds. All the rest of the estate has been divided among the family. A fourth option. 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. (two days later) Mary Anne: Well.
Agreed? Abe and Bobby: Sounds good! Let’s draft and sign a written agreement detailing the process. Example 2 Howard Raiffa described a consulting situation in which he used the “reciprocal buy-sell offer” process in his book. which will bind us to the outcome. to submit a sealed offer to buy/sell the business sixty days from today. I’ll pick it up tonight. 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. but each partner had grown to dislike the other and wanted to end the partnership (but continue to own the business without a partner). Two business partners had been working together for ten years to build a successful business. Here is my check for $800. Thanks for making this last step as easy as possible. in writing. After I open the bids. Both came to Raiffa to help negotiate a settlement. I choose to buy it. I suggest a slight modification to the process. (sixty days later) 48 50 Practical Negotiation Tactics . Lectures on Negotiation Analysis.” Howard: Since in this case you are talking about a multi-million-dollar business. They thus were able to determine the highest price each was willing to pay for it or receive for it. You will both agree. They accepted his suggestion to use the “reciprocal buy-sell strategy. Conclusion The “reciprocal buy-sell offer” process caused both Mary Anne and Susan to research the market value of the coffee grinder. Both sisters felt that the process enabled them to resolve the issue fairly.Susan: Mike: Well. and then decide how much more “emotional value” it held.
Bobby. 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. And I will arrange financing to pay you $180 million to become sole owner. and both men had carefully estimated the market value of half the business. Abe. I will arrange to sell him my half-interest for $180 million. Conclusion Both parties wanted to keep the business. but only if they could become the sole owner. you agree to sell your half-interest to Bobby for $180 million. Bobby was willing to pay more than Abe to remain sole owner. your bid is $170 million. and we close by July 1st. The partner who was out-bid in a fair process received a fair settlement: $10 million above what he was willing to pay. Agreed. Planning a Strategy 49 . and to close within ninety days.Howard: Abe: Bobby: Abe. your bid is $190 million.
Looking at these statistics. This strategy worked. Based on seating capacity. and created a spreadsheet to compare the five best-rated couches on their list.” and then argue for the frugal alternative. so when the husband wants them to make an 50 50 Practical Negotiation Tactics . and the husband felt like he saved them hundreds of dollars. When he showed his wife the detailed spreadsheet. The wife was determined to buy the least-expensive brand rated excellent by consumer publications. Example 1 A young couple were discussing a possible purchase of new furniture for their living room. and forcing him or her to control the discussion of the issue. 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. Conclusion The husband became the “expert” in this situation by doing the homework.” but there were substantial differences in price—differences that the wife did not see as a problem. she glanced at it and immediately deferred to his opinion.Tactic 11: Use an “Expert Witness” Establishing yourself as the expert on a certain topic in order to get what you want can be an effective tactic in the appropriate situation. the one he wanted (one of the least-expensive) was superior. 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. The husband found the dimensions of the couches in the brochures and Web sites. the one that was the most expensive was superior. This approach can also be reversed: The wife in this situation is a banker. They both expressed an interest in finding a couch that offered the most “interior” space. When it came to comfort. He thus ended up having greater negotiating power. The couple decided to limit their selection to those rated “excellent.
and Point of Service (POS) plans. Preferred Provider Organizations (PPOs). 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.investment decision or deal with an error in a bill. you gain an edge when negotiating a new plan for your company. and should therefore handle the problem. 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 . 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.” If you spend many hours learning about Health Maintenance Organizations (HMOs). he argues that she is the expert.
and then asked their mom for a chance to negotiate with each other. and neither boy was very happy. and so on. Russ: 52 50 Practical Negotiation Tactics . because I am so conscientious about my paper route. particularly when things seem to be at a standstill. This is done by deciding at the outset what you both have in common: You both want to reach an agreement. Unless you can convince me otherwise. and I really love the banana/butternut/ sour cream frosting on this cake. neither of you want to be embarrassed at the outcome. here’s what they said to her: I think I should be rewarded with the piece of cake. Usually. she made them share whatever it was. The boys quickly huddled. and their mother was tired of it. The two boys fought over the last piece of everything. point them out at the very beginning of negotiations and refer to them throughout the process. she decided to try something different. Example 1 When Russ and Bill got home from school. When they boys returned. like we usually have. This time. the last piece of cake will get thrown away. If this was chocolate icing. I wouldn’t care so much.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. I also took out the garbage last week without being asked twice. Be clear on what you have in common at the start. Mom: I’ve decided that I’m not going to cut this piece of cake in half and give you both some. These positive things are part of your goals and objectives. They immediately began to fight over it. you both want to complete negotiations by a certain date. I missed dessert the other night because I had to get to baseball practice. That simply rewards your continual squabbling. you want to reach an agreement that is favorable to an outside party. they saw that there was one piece of cake left over from their mom’s bridge party.
so that your customers can park on the street. and that’s not my favorite either. your new shop hours have caused your customers to park in our parking spaces. and her children were in school. and keeps it open longer so she can attract customers on their way to and from work. to 3:00 p. 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.m. The last cake we had was chocolate cake. she got a visit from some of the residents. she opens her shop at 7:30 a. It was the type of shop the nearby residents preferred. I can have the part with the icing and Bill can have the part with the cake and filling. and better than a fast-food restaurant with late-night hours and a drive-through window.m. We realized that if we cut the cake lengthwise.m.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. That sounds like a wonderful solution. and I really like white cake. so these hours worked out well. One day. Example 2 Marilyn’s Memorabilia Store was located along the main commercial street of a residential neighborhood. Residents: Marilyn. This cake is white cake. Now that her children are in college. Planning a Strategy 53 . 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. We really want you to go back to your original times. Customers have started to park in nearby apartment lots. I helped with the bags without being asked twice. because there is no parking along the street during morning and evening rush hours. Marilyn originally set her shop’s hours for 10:00 a.
The parking lot used for apartment residents is probably full from 7:30– 9. 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.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.? Residents: We certainly want you to stay in business here. Between 7:30 a.. We think they’ll be agreeable to the morning parking. and the residents needed Marilyn’s shop. Okay. I don’t think that would be very good for business. The shared parking arrangement did work out for Marilyn. If you need to have the shop open more hours.I’m sorry this is happening.m. then we’ll try and accommodate you.m. if residents haven’t left for work yet. and see if it works. Marilyn: Conclusion Marilyn needed the extra parking. if I go ahead and open the shop at 7:30 a.m.m. But in order to keep my new customers.m. I have to convince them to come before work.m. Most of our residents are gone by 8:00 a. And we don’t think you want your customers’ cars towed. So. Identifying their shared interests caused the nearby residents and the customers to reach agreement.m. and 9:00 a. Do you think the residents of the apartment house would agree to let me advertise that my customers can park in their lots between 7:30 a. my customers can’t park on the street.m. or so anyway. the off-street lots probably won’t be used by my customers. Lets try it. let’s see what the options are.m. and I close at 4:00 p.m. and between 4:00 p. rather than after work. It is very costly to have cars towed. and 9:00 a. But I really am increasing my sales by being open longer hours. and 6:00 p. we have to be willing to tow the cars that violate it. 54 50 Practical Negotiation Tactics . and is probably empty in the afternoon if they haven’t gotten home yet.
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. but it can also work against you if you set one that is unrealistic or you fail to plan for it adequately. Well. Example 1 Four adult children have gathered at the home of their recently deceased mother. we can each take turns selecting things … Like each tool or dish. and start choosing things. Jenny: Everett: Sue: Everett: Mary: Sue: Everett: Mary: Jenny: Everett: Okay. Well. A deadline can help you make the best possible agreement in the shortest amount of time. A few hours? I can’t—I’ve got to leave shortly for the drive home. We just don’t have the time … We’ve got to do this—the house is sold! Okay. But at Planning a Strategy 55 . I don’t. such as a deadline beyond which the union will strike or the date that an outside party has set to withdraw an offer that is in both your interests). How can I do that? You all live in this town and you know this house. Then we can sit down at this table at 3:00 p. etc. how should we go about dividing up the furniture and possessions? I can’t talk about it. let’s all take two hours to look around and make a list of things we might want. let’s all take a few hours to look around.Tactic 13: Set a Deadline Be sure you know well ahead of time what the deadline is for completion of negotiations. That will take days! I haven’t been in this house for twelve years.m. Deadlines can be imposed externally (such as the government’s deadline to get a tax break) or internally (set by one side. the first. one at a time: the youngest.
m. Allan: Let me confer with the city attorneys.. and I appreciate your interest in the historic structure. if I cannot carry a negotiated and signed deal to my board by noon on December 31. your attorneys know the tax laws. Okay. David: I understand your concern. Agreed. if we are not finished. And besides. we cannot agree to these development plans submitted by your company until we have reviewed how they will affect the historic buildings. Sue. can sell or give away what is left. All of us must come back before Saturday to take what is ours—agreed? Okay. However. 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. 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. this is December 29.Sue: Mary: Jenny: 5:00 p. Example 2 Allan: As the negotiating team for the city. December 31. 56 50 Practical Negotiation Tactics . we all leave. being the oldest.
He waited to bring it up until it was clear that doing so would help him get the settlement his side desired. Conclusion Knowing the external deadline gave David a significant negotiating edge.) I understand the December 31 deadline. and I don’t like it. Let’s continue.Allan: (One hour later. we can’t get the reports we wanted in 48 hours. Planning a Strategy 57 . Obviously.
Have a clear goal in mind AND all the information you need to make your points. But don’t lose it again. so he was able to prevail upon her to let him continue. There will be times during a negotiation when you will want to catch your opponent off-guard. while watching TV. He knows that a D will mean that he will have to change the way he studies. I’ll give you money for it. and you can neutralize its effect on the negotiations. Example 1 Jason likes to play video games as soon as he gets home from school and do his homework later. We had one at the beginning of the semester that we were using pretty often. and I missed some assignments. Mom: I gave you money to buy a workbook a few weeks ago. One day mine disappeared. I’ll need to buy it again.Tactic 14: Don’t Always Hide Your Weaknesses Be sure you know what your strengths and weaknesses are. but his grades are good. as well as those of the other side. and Jason knows he is getting a D in Spanish. I bought the second one. don’t get mad. Now. before your opponent tries to catch you off-guard. but that was actually a different workbook. and one of the ways to do that is to reveal a weakness at the beginning. His mother disapproves of his study habits. we need to talk. The objective is to negotiate from a position of strength. first-quarter grades are coming out at the end of the week. Did you buy it? Jason: Yes. but I have a problem in my Spanish class. He decided to preempt the discussion in order to make the best deal. 58 50 Practical Negotiation Tactics . Jason: Mom. and this usually means having all the right information. Control the use of the information. Unfortunately. Then the teacher went back to the first one. and we used it a couple of times. but remember that both sides have weaknesses. Mom: What’s that? Jason: A few weeks ago I lost my workbook. as well as strengths. Mom: All right.
English. Its owners found out that at least three other buyers had been in contact with Jane. And those are hard classes—Algebra. B. I’m getting a D in Spanish for the first quarter—but it’s not because I’m studying in front of the TV. Jason: Spanish is just one class. my study habits are okay. and the D is directly related to my losing the book. Conclusion All of Jason’s grades did improve over the next quarter. she trusted it more. I don’t think you’re taking your schoolwork seriously enough. Obviously. The work I did turn in was fine. The location was ideal for a convenience store or a fast-food restaurant. he was able to continue to study the way he wanted to. I’m sorry. but I think you do need to change your study habits. but all three deals Planning a Strategy 59 . or borderline B. I’ll give you more time. All of my other classes are A. And I know I have to be better about getting in all of my assignments. His explanation made sense. all right. so there’s no reason to think I need to change my study habits. 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. Mom: Well. Since I missed some assignments. and since he offered her the information up front. Example 2 Jane once owned a piece of property she wanted very much to sell. Although his Spanish grade was only a C+. I think I can do that. then I’ll agree to make changes.(maybe C+). I think you need to give me the rest of the semester before making me change the way I do my schoolwork. Mom: Well. Environmental Science. Mom. It’s because I didn’t have the book. Thanks. Pizza Boy was interested and had even made inquiries about the property.Jason: Another thing. If I don’t pull the D up to a C or better. But that Spanish grade needs to come up to a B!! Jason: Okay.
however. I know. The real problem. and was able to politely ignore her. 60 50 Practical Negotiation Tactics . which was way below the price they were actually willing to pay. When she contacts you. This is how the negotiations went: Jane: Pizza Boy. though. They decided not to fight a disgruntled neighbor. either. I’m sure. I think you’ll find that this is only one person. Actually. there were no unpleasant surprises to stop the deal. however. Pizza Boy: Well. she will want you to think it’s the whole neighborhood. I’m very happy you’re interested in my property. What are her grounds for complaining? Jane: She doesn’t have any. Jane: Oh. But unlike your company. When the neighbor heard about the new buyer. was that Jane’s neighbor had contacted each of the previous potential buyers and complained about their plans to use the property. we’re not interested in neighborhood fights. The Pizza Boy people figured that Jane’s asking price must be too high or that she is unwilling to negotiate. Pizza Boy: We’ve checked the property out. it’s only the neighbor to the right of the property who has a problem. she started her campaign to keep them from closing the deal. Jane’s up-front disclosure of a potential problem allowed Pizza Boy to weigh the negatives with the positives. Furthermore. The neighbor’s attitude suggested that there would be major resistance in the neighborhood if Pizza Boy tried to put in a commercial establishment. the other interested buyers already have businesses in the neighborhood. I’ve got to warn you—you might hear that there is neighborhood resistance to your putting in a pizza restaurant. since they were well aware of the negatives. You are a big enough corporation to withstand her objections. A tentative deal was signed. let’s assume that you are right. Pizza Boy was prepared for her call. and it’s zoned for commercial use. Pizza Boy: Well. really. What are you asking for the property? Conclusion Jane told them her asking price.had fallen through.
The initial offers of both parties are usually set reasonably above or below what each believes to be the settlement range. Many negotiators make their initial offer the highest acceptable offer (Tactic #19: Make a First and Best Offer). This is a practical starting point that will not anger the other side (and might even be expected).500) Resistance Point ($25. (2004).500) M $21. The initial offer sets the tone of the negotiations and reveals something about the strategy of each side. 190–192. None is as important as the first one. 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. Another common strategy is to start with the status quo. for example. in negotiating a labor agreement or the price of goods or services: The monetary gain realized by one party is also the monetary loss of the other party. quick agreement.500) Fig.000) Target Point ($23. 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. Adapted from Labor Relations and Collective Bargaining. Exchanging Initial Offers 61 . 2: Distributive Bargaining Process. Carrell and Christina Heavrin.750) Target Point ($24.750–$25. by Michael R.Stage 3: Exchanging Initial Offers any offers and counteroffers are made during a typical negotiation—sometimes even hundreds. The negotiator firmly states that it is their best offer in an attempt to gain a nice.000) Settlement Range ($22.000 Buyer Initial Offer ($21. “Distributive” bargaining (“win-lose” or “zero sum”) is used. as illustrated in the following figure: Seller Resistance Point ($22. such as proposing to continue at the current rate or price.000 22 23 24 25 26 27 Initial Offer $28.
and is the range in which most negotiations actually occur. thus starting out on a positive note.In this example. The settlement range is the distance between the resistance points. each initial offer ($21. Experienced negotiators will begin the negotiation of several items by quickly proposing such a package.” but the settlement price. A target point is the desired settlement value a party has set as a goal when negotiations begin. the seller would immediately accept it because it is greater than the target point and the buyer would suffer a winner’s curse. When the two parties agree to a price within the range. 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. the other side does not agree to this value). 62 50 Practical Negotiation Tactics . You can use a tactic in making your initial offer that will give you an advantage: When multiple items or issues are on the table. these points have set the outer limits. thus producing a true “win-win” negotiation. In the example. 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. After initial offers are exchanged. it is termed the settlement point – not the “right price” or “fair price. Resistance points are the maximum or minimum beyond which a negotiator is likely to consider an offer unacceptable (and possibly walk out).000) is reasonable. See Tactic #18: Agree on Something As Soon As You Can. Two extremely helpful tactics to be used immediately after initial offers are made are Tactic #15: Caucus and Tactic #20: Posturing.000. the process quickly narrows to the range between the initial offers. 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). if the buyer’s initial offer was $25.000 and $28. 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).
the negotiations got out of hand when Shelly’s dad forgot what had been decided. and I already have 25 names. so we’ll have the party from 7:00 p. call a caucus so both sides can brainstorm new solutions to keep the negotiations going. We don’t want it to be a late evening. Mom: We’re planning on having your party here on Saturday night. A caucus gives you an opportunity to work out problems with your own team in private. And that’s just my friends from school! I haven’t started Exchanging Initial Offers 63 . a caucus can be used as a break to calm the situation down.m. Shelly: Twenty friends? You’re kidding! I’ve just started on my list. If the negotiations have suddenly gone in an unanticipated direction. or if a member takes on a role in the negotiations that has not been assigned to them. Her mom and dad had already talked about it privately.–10:00 p. You can invite up to 20 of your friends.Tactic 15: Caucus If you are part of a negotiating team. so her parents sat down with their daughter to discuss the details. and presumably had an agreement. Unfortunately.m. If the negotiations are heated. calling for a caucus gives you a chance to get your team to recommit to a particular course of action. make use of the opportunity to call for a caucus. We’ll just have chips and soda. If negotiations seem stalled. because it might disturb the neighbors. If the team is feeling pressure to concede on certain items. Shelly. There are many ways to use this strategy. A caucus is when a negotiating team calls for a break and leaves the negotiating table to confer in private. it gives the parties an opportunity to reassess where they are and determine if everyone involved agrees that they should be heading in this direction. To do so in front of your opponent would obviously undermine your team’s position in the negotiations. A caucus is certainly called for if individual members of the team become agitated or express frustration with the progress of the negotiations. without revealing their ideas to the other side. Example 1 Shelly’s “Sweet Sixteen” party was coming up.
Time out! Dad. We could play records and you guys could dance. Oh. Mom! This is my “Sweet Sixteen” party.m. Shelly’s parents reviewed their first planning discussion and went over what Shelly’s mom thought they had already 64 50 Practical Negotiation Tactics .—that’s so “baby.Dad: Mom: Dad: Shelly: Mom: Shelly: Mom: Shelly: Dad: Mom: Dad: Shelly: Dad: Mom: on the friends I’ve made over the summer at the pool. Your dad and I already talked about this and agreed that 20 guests would be the limit. (with some irritation) I’m not sure. we need to talk. and then the number of kids won’t matter. I think the band would be fine. I guess the VFW will work. we could rent the VFW hall. And can we bring in pizza? Or maybe one of those “mile-long” hero sandwiches? I like those—let’s do the hero sandwiches. Shelly. That would be great! It would keep everyone entertained. I could invite everyone!! Hold on! I thought we agreed that this was to be a simple party. Actually. I think we can handle a few more kids—how about 35? And midnight sounds okay. And they can’t go home at 10:00 p. okay. It’s special!!! Well. I’m sure we can ask them to tone it down a little. Dad. In fact.” They would never expect a party to end before midnight. (excited) That would be so cool. (During the caucus. (shocked) Jerry’s band from down the street? They’re a punk rock band! Their music is totally inappropriate for sixteen year-olds. we’ll call you when we’re ready. Jerry from down the street is in a really good band that all of the crowd likes. We’ll get a band—everyone does. That sounds like too many for here at the house. alone. And midnight is definitely too late.
m.Mom: Shelly: Mom: Shelly: Mom: Shelly: Dad: Shelly: Mom: Shelly: decided. But we can have the band. Okay.m. causing them to lose control and make compromises they hadn’t intended to make.m. is for little kids!! No. can’t we? No band.) Okay. but no Sweet Sixteen birthday party decorations. and you can invite more friends. please!! 11:00 p. Agreed. which was to make sure Shelly’s Sweet Sixteen party was a fun and safe evening. Dad. But you are limited to 40. And we’re serving chips and sodas. too? No way!! I want presents!! Conclusion In spite of their prior planning. but we’ll schedule the party for 8:00 p. and not a huge production. That way. Mom’s call for a caucus gave them a chance to regroup and re-state their original objective.m. A DJ? I guess that’s okay. When they called Shelly back in. All right. midnight. we’re going to rent the VFW hall. Does that mean no presents. Your mom and I agree—11:00 p. we will be better able to chaperone. That’s so lame. her mom presented the revised proposal. this mom-and-dad negotiating team became unglued during the negotiations. but your dad and I agree on getting a DJ to play. Example 2 The contract negotiations between the company and the union had been going on for days. sorry. and we will need to approve the list. The item currently on the table was the company’s offer to give each Exchanging Initial Offers 65 . to 11:00 p.
66 50 Practical Negotiation Tactics . Union negotiator #2: Please—just a moment outside. I’m just saying that tuition benefits are sometimes a good substitute for health insurance. 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. Union: Why are you so concerned about new job opportunities? Are you holding out on us? Company: No. Union: You’re offering a choice between health insurance and tuition payments? What kind of a deal is this? Company: Hey. A lot of employees have spouses who can get health insurance coverage through their work. The company’s negotiator didn’t recognize the misunderstanding. Union: (angrily) I’m not presenting this proposal to my people. and thought he was being asked to choose between a health insurance plan and a tuition benefit plan for all members. The tuition benefits will encourage the workers to be prepared for new job opportunities. Tuition in place of health insurances? They’ll think I’ve lost my mind. many will want to use it for their children’s education. The union’s lead negotiator misunderstood the proposal. and the following conversation occurred. What is this. With the cost of college educations so high.individual member of the bargaining unit the option of being in the health insurance plan offered in the contract or receiving the same amount of money the company pays for health coverage as a tuition reimbursement benefit for the employee or any member of his or her immediate family.
and I apologize for explaining it poorly. the parties returned to the room.) I’m sorry. Exchanging Initial Offers 67 . I thought that the contract would cover one or the other for everyone. I didn’t understand that your proposal was to allow each individual member to choose between the health coverage or the tuition benefit. Conclusion Negotiator #2’s timely call for a caucus so she could explain the miscommunication in private saved the session. Negotiator #1 regained his footing. and the parties were able to complete their negotiations. (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.Union: Union: Company: Okay. I think that what you’re proposing is a really good idea. let’s move on. Now. Good. we’ll be back in 5 minutes.
Hobbs. But for this price. Mr. not revealing that the item exchanged is a “throwaway. Hobbs: Yes. At a point late in the negotiations. it’s a great car and a fair deal. 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. quickly checked the dealer’s inventory of sport utility vehicles in stock.” Throwaway items are those things that hold little or no value to you. you are making $200 profit over the true dealer’s cost. (Salesman returns with manager) 68 50 Practical Negotiation Tactics . we’ve got expenses and we need to make some profit. Salesman: Let me talk to my manager. but in reality. but he makes a mental note to use color as a “throwaway” item. It is a useful tactic in any negotiations. Here’s how it works: Party A exchanges the item for something of true value.” Party B thinks that A has sacrificed one important objective to gain another. but … Salesman: But what? Hobbs: Well. this conversation takes place: Hobbs: Yes. I know. I can go to another dealer and get a green exterior—the color I like best. according to my figures. you don’t want your opponent to know what these things are. He doesn’t really care about the color of the new vehicle. Example 1 The buyer. and noticed that none of the vehicles have a green exterior. Salesman: Well. when the two sides are only a few dollars apart. according to the Consumer Reports listing of the cost of the vehicle. so be sure you present them in a way that suggests importance. A has gained something of true value and given up nothing he values in return. However.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. I’ll go get him.
Example 2 The office supervisor told the three internal sales representatives (Jenny. The three are sitting at a lunch table to discuss the schedule. At the very end of the negotiations. Hobbs successfully chose color as a throwaway item.no it’s not. 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. The days in question are: Exchanging Initial Offers 69 .. The manager was convinced enough to sacrifice a final $100 for the throwaway. Conclusion Mr. Employees will be paid time-and-a half for each of these days. 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. 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 .Manager: Hobbs: Manager: Hobbs: Manager: Hobbs: Manager: We are offering you a great deal. Miguel. All three employees must agree to the schedule.. he brought it up and convinced the salesman and manager that it was an important item to him—possibly even a deal-breaker.. I’ll take the red one for $100 less. Then we have a deal. Why didn’t you mention the color before? I didn’t expect to actually buy a new car today (note: not the truth).
A second and third round produced the following allocation: Jenny: December 23. She proposes to work five days. each made a first choice of days they will work. December 24 Conclusion Carolyn has achieved her objective: She will be off December 24 and 26. 27. They all agreed to their schedules. 2 Jenny: December 23. January 2 None of the three are totally happy with the results. 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. December 31 Miguel: November 25. it was assumed that each would work three) in order to have December 24 and 26 off to be at home with her children. January 1. 24. December 27. They agree. 26 Miguel: November 25. Carolyn has decided to use as a “throwaway” the number of days she will work (previously. December 26. January 1 Carolyn: December 24. 30. 31 January 1. This would allow Jenny and Miguel to each work only two days. 30. 2 In the first round of negotiation. They have decided to start over. and each chooses their days to work: Carolyn: December 27.November 25 (the day after Thanksgiving) December 23. 70 50 Practical Negotiation Tactics . in exchange for giving up earlier choices due to seniority. 26. December 30. 31. She got what she wanted by giving up something she did not value: the two other days. Jenny and Miguel feel that they received something of value from Carolyn: She must work two more days than they must work. She would actually prefer to work the extra days and get paid time-and-a half.
three ways. it is often helpful to package the items in distinct groups and then deal with each package separately. Autumn and Angela. Anne: As I see it. they met at the house. their mom left specific pieces of jewelry and art in the will to each of the girls. we need to sell the house. Autumn: I don’t have any objection to selling the stock and distributing the proceeds and the cash three ways. realizing that the total cost of a deal might make or break the agreement. but I’d like to talk about the house and the furniture. can indicate that something you think is minor is really a major concern to your opponent. and a collection of antique furniture. For example. the antiques.000. Their mother’s will was very clear: the three daughters were to all have an equal share of her estate. Anne and her sisters. A reluctance to include one particular financial item with other financial issues. 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. a house valued at $250. along with the cash. When the girls decided it was time to talk about the estate. The estate’s assets included a checking and savings account totaling $450. 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. In addition. and the stock and distribute the proceeds.000 with no mortgage on it. 300 shares of stock in a pharmaceutical company. were faced with the task of selling the house and disposing of their mom’s personal belongings. for example. The house and much of the furniture has been in the Exchanging Initial Offers 71 .Tactic 17: Package Items In a negotiation where there are multiple issues or items to be negotiated. one might package all of the financial issues in one group and negotiate on that package as one issue. Example 1 When their mother died at age 82.
we’ll discuss again what happens to the house and the antiques. Why don’t we leave some of the cash in the bank. Angela: And we can talk about the art and jewelry? 72 50 Practical Negotiation Tactics . Anne: I’m not sure I’m comfortable talking about trading the jewelry and art Mom left to each of us. There was a reason why she gave us what she did.family for years. With no one living here. 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. Frankly. it’s a magnet for vandals. and if we wait a couple of years. we’d get a lot more for them. It’s a buyer’s market now. and now that we have them. Anne: But that means we have to continue to take care of the house and its contents. Autumn: I think its awfully soon to be making these kinds of decisions. Anne: Okay. but the operative word is “give.” She gave those things to us. If we want. I’d like it all to stay in the family. So we agree: We’ll leave $30. Soon. so I will be able to keep tabs on it. and use it to fix the house up? Then when we make a decision. we’re really free to do with them what we want. In fact. don’t you think? Angela: Maybe. And we’ll fix the house up. Autumn: Sounds good to me. and letting everything else wait for another discussion. I’d like to talk about the art works Mom left each of us. We’ll split the stock three ways.000 in the bank and distribute the remainder three ways. Angela: I live close by. I’d really be interested in talking a trade for some of them. Mother was born here and grew up here. she’s free to do so. Angela: Now’s not a good time to sell either the stock or the house and antiques. we will have a more valuable asset. If Angela wants to hold on to her stock. What would you think about agreeing today to distribute the cash and stock three ways. we can sell ours.
Several issues also needed to be addressed: the ability of employees to move up through the organization. and deal with one area at a time? The first: Wage issues (pay schedules and the annual and merit raise issues). the jewelry. May I suggest that we divide the items into three areas. Angela: That’s fine.Autumn: I can agree not to do anything with the jewelry and art Mom left me before we talk. health benefits. the antiques. The second: working conditions (work schedules and promotional opportunities).). and establishing a work schedule to accommodate evening and weekend clients. Waiting to make decisions on those items until some time has passed gives the women an opportunity to look at a number of options. tuition benefits. deciding to base the increases on a percentage or equally distribute the funds for increases among the professional and clerical staff. Anne: Same with me. and the art works—will be more difficult. Employees: We’ve got a lot of items to cover. what kind of paid leaves there will be (personal. The third: Ben- Exchanging Initial Offers 73 . Example 2 The attorneys and staff of the local Legal Aid Society formed a union and were about to negotiate their first contract with the executive director. The following tasks needed to be a accomplished: establishing basic pay schedules. Conclusion Autumn’s suggestion to package the money and stock because they can be easily divided by three made agreement on those items possible. vacation. funeral. etc. sick. but I’m making no commitment to trade. deciding whether there would be annual wage increases as well as merit increases. The negotiations on the other items—the house. and the assignment of the limited number of parking spaces. including benefits for partners in non-traditional relationships.
paid leave times. That’s a program that can have a lot to do with how employees are able to increase their worth to the organization. Employees: I’m surprised that you would take merit increases out of a general discussion of wages. 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. as well. we are an agency supported generally by public funding. I would include that under the Working Conditions category. 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.efits (health insurance. because they’re really an incentive for better performance. that makes sense. Later negotiations were difficult. and the parking spaces). 74 50 Practical Negotiation Tactics . Also. so there’s not going to be a lot of discussion on what our pay schedules and annual increases can be. I think it also makes sense to include tuition benefits in the Working Conditions category. Executive Director: Well. Wages should not include merit pay raises. tuition benefits. the paid leave categories are pretty clearly defined. but the parties were able to come to agreement because the wage issue had been resolved. So I’d like to see us get through the wage issues quickly and then move on. Employees: Okay. Let’s get started. Executive Director: Sounds like a good agenda. to be honest with you. but I’d change your list. 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.
but don’t think you’re going to stick me with all of the mortgage and credit-card payments.Tactic 18: Agree on Something As Soon As You Can Negotiations are more successful if both sides can agree on something—anything—almost immediately. You can also make an effort to agree on something your opponent offers early in the negotiations. Exchanging Initial Offers 75 . Now. with her promotion sending her out of town. They had also furnished their house on credit. They met and married in college. and both have good jobs. sets the stage for mutual respect and communication. too. Example 1 Tim and Kathy. Tim worried that he would be stuck with all of the debt. They have no children. Their “property division” was mostly about dividing their debts. rather than disposing of assets. after a brief marriage. The couple hoped to do the divorce without involving lawyers in order to save money. and she agreed. It was her idea to buy the house and go into debt to furnish it. The discussion might become very heated. because Tim felt that Kathy had taken advantage of him during the marriage. It indicates to your opponent that you are a reasonable negotiator. Tim: You might be leaving town. Kathy borrowed more money to go to graduate school full-time. You signed those papers. without suggesting any changes or modifications. An initial agreement. and might not even be able to keep the house. and that you are entering into the negotiations with the intent to reach agreement. and they were making payments on school loans (for his undergraduate degree and her undergraduate and graduate degree) and on two cars. no matter how insignificant. They were in the middle of buying a house. are divorcing. Consider starting things off by presenting your opponent with a proposal you feel confident can be agreed upon without argument. Kathy’s first job paid more than Tim’s because she had a graduate degree. Kathy was asked by her employer to relocate to another city. Tim began working right after graduation.
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. The monthly payments are about the same. yes. I think that makes sense. Okay. What do you want to do about them? Conclusion Having agreed to two items very quickly. Kathy: I suppose we should look at the school loans next. hold on.Kathy: Hey. as long as the cost was approximately the same. and XYZ Co. Example 2 ABC Company. If both of us had been working the year I went to graduate school. Frankly. When we bought them two years ago. I can hardly argue with that. an art gallery. even though the convertible is being paid for through a 48-month loan and the sports car through a 36-month loan. I got my convertible. we decided to each pick out our “dream car” and that we would not overrule the other’s choice. They also agreed that Tim wouldn’t have to pay her that amount for five years. The first thing I’d like to talk about is what we are going to do about the cars. as you remember. Kathy: Now.. I think it only fair that I take over repayment of all the school loans. I say we agree to transfer the convertible loan to me and you take over the loan on the sports car. Tim: Well. and you got your sports car. 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. a wholesale art dealer. I don’t intend to “stick” you with anything. Tim: Okay. we would have paid down our school loans more. ABC usually uses UPS 76 50 Practical Negotiation Tactics . and he could pay it in annual installments over a five-year period. about the house and furnishings.
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. However.to ship artwork. water from the gallery’s air conditioning unit pooled on some of the surfaces of the warehouse area. We’ll expect you to pay for the 12 works that will be in your show. They arrived right before the holiday weekend began. XYZ contacted ABC immediately. but only if you let us ship it UPS. The other times this happened. The three parties agreed to hold a conference call late Monday afternoon to try and resolve the dispute. XYZ: ABC: Exchanging Initial Offers 77 . 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. Unfortunately. Holiday weekend storms caused the electricity to go off for different periods in different parts of the city. XYZ’s manager failed to open the boxes or remove the artworks. or else the box was damaged in XYZ’s warehouse. and we will continue to discuss who is liable for the three water-damaged works. and began preparing to return all of the artwork to ABC. and that XYZ needed to either go to the shipping company or its own employees for compensation for the damage. and arrived on time and apparently in good condition. ABC’s position was that the artwork was fine when it left their location. it was obvious that the art in one of the boxes had suffered considerable water damage. The artworks filled four boxes. when the boxes were opened on Monday. There was no indication that the gallery’s electricity had gone out over the weekend. 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. WeCanShipArt claimed that the boxes were not damaged in shipment—the artwork was already water damaged. and the boxes showed no external damage. ABC refused to pay WeCanShipArt until it received payment from XYZ. ABC: Before we begin. but XYZ asked specifically that a little-known company specializing in shipping art known as WeCanShipArt be the shipper.
ABC: Well. how do we resolve the issue of the damaged artworks? Conclusion ABC’s decision to offer a solution to XYZ’s immediate problem. If we don’t make the deadline. They also agreed that if the investigations are not conclusive. Now.m. The artwork was not damaged while in our control. they will split the cost of the three damaged pieces three ways. tomorrow and we’ll wait for payment on both shipments until we resolve how the artworks were damaged. XYZ: Okay. the three companies were able to agree to undertake an investigation within each company to determine when the artworks were damaged. Having reached an amiable solution to the immediate problem. that’s okay with me if it’s okay with XYZ. and if word gets out that you think it was. we’ll take responsibility for all of the consequences: the lost sale to ABC and the lost promotional sale by XYZ. WeCanShipArt: Wait a minute. generated a like offer from WeCanShipArt and a reasonable response from XYZ.XYZ: Agreed. we’re ruined. at its financial risk. We can guarantee that we will deliver the new order in perfect condition by 5:00 p. I can’t see how I can refuse that. 78 50 Practical Negotiation Tactics . regardless of where the original three artworks were damaged. And we’ll eat the cost of shipping. You can’t just ignore us.
Okay? No quibbling. we’ll sell it to you.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. Exchanging Initial Offers 79 . The “first and best” tactic enabled them to settle the matter easily. What do you want for it? Colleen: Well. and even more hours in the fall picking up leaves. We plan to put an ad in the paper next week. Ann: Well. period. Jeff spends many hours mowing the yard every week. Ann: That sounds great! I don’t want this to affect our friendship. consider using the “First and Best” tactic. Ann: Thanks! We really need one. we plan on selling our Ford tractor when we move. no hard feelings either way. and it came with the bush hog and the leaf pick-up. I don’t want to quibble. Why don’t you give me a price? Colleen: Oh. Conclusion Ann and Colleen did not feel like negotiating over the tractor and running the risk that it might affect their friendship. I know you and Jeff said you’d like one because you have about five acres. but ONLY if you have a bottom line or definite point at which you will accept an agreement and you believe the other party will make a reasonable offer. I don’t have any idea. Can you check others in the paper and just give us your best price? We will either take it or advertise the tractor in the paper.000 for it six years ago. 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. but if you’re interested. we paid $5. You must mean what you say and be prepared to walk away from an unacceptable offer. Example 1 Colleen: Ann.
I want the job. He also started the job with a positive working relationship with Vernon.Example 2 Archie: Well. I’ll get back to you in three days. I think we have agreed to all aspects of the job offer. as we agreed. Archie: Thanks. Here it is. because it was several thousand dollars above what he decided was the minimum it would take for him to change employers. who admired the way Archie negotiated his starting salary. except salary. I’ll either accept it or reject it. So. I came up with the best salary offer I can make. no questions asked. and you know my current salary. and I’ll take 48 hours to consider it. but I don’t want to start off in a new job by negotiating with my boss! So. but we have internal budget considerations and we must consider equity with other employees. I expect a fair increase. how about you making your first salary offer your best one. I don’t like negotiating over salary either. Conclusion Archie accepted the job offer. (three days later) Vernon: Archie. 80 50 Practical Negotiation Tactics . We want you. I’ll discuss it with my wife and get back to you in 48 hours. Okay? Vernon: That sounds good. on this slip of paper.
and we’ve made a lot of plans with our friends that I need to talk to you about. and in a favorable light.) During the posturing phase. so he knew that he would have to sell them very quickly. Present your position and demands as if yours is the only logical position. a 4:00 a. 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. since Sally is going away to college next year. Exchanging Initial Offers 81 . and ignore or deny any weaknesses in it.m. then the prom. Fourth. This is called posturing—presenting your position strongly and completely. Kevin: Mom and Dad. He and his date had decided that as long as they could join their friends for breakfast after the prom. you only have one Senior Prom in your life. Kevin had “negotiated” with his parents before. curfew would be okay. you know that Sally is really looking forward to this. First. and then to breakfast at “Timothy’s. Example 1 Kevin.” As you know. but he figured “all night” was relative. you will probably have to modify some of your positions if you are to reach agreement. First we’re going to dinner. He knew his parents would not agree to let him stay out all night.m. It might be your only opportunity to explain your position without interruption. we’re all meeting at Donna’s so we can share a limousine. I’m the only junior in the crowd. so the prom is a pretty big deal to both of us. and it really wouldn’t be fair if I wasn’t able to go along with the rest of the group. Second. was dating a senior. Sally’s Senior Prom is coming up. (Once negotiations get underway. Third. 17 years old and a junior in high school. Posturing is indeed “acting. look for indications from your opponent as to what he or she believes is their best position.Tactic 20: Posturing You might have to do a little acting at the beginning of the negotiations.” but it is also a source of valuable information that can help the negotiations proceed to a successful conclusion. we’re not going to be dating exclusively after this summer.
remember that when you started dating Sally and hanging out with an older crowd. we know. the limousine will take us back to Donna’s house to spend the night. I don’t drink or do drugs. this prom is a one-night thing—a dance that is dressier than you’re used to. so there will be plenty of chaperoning. and we’re just not happy about that. And. but to use that as a reason to stay overnight doesn’t make sense. Finally. Things can happen on a night like that that adversely affect you for the rest of your life. Second. for sure. Yes. So. Donna’s parents will be there.or drug-free. which could be dangerous. Sally’s parents trust us and have already said yes to her. I believe you can pay a little more and have the limousine bring you both home. you have been fairly good about making your curfew—most of the time. We’re just not convinced that your entire group has been alcohol. That’s asking us to believe a lot. we told you that we would not be changing our rules to accommodate that older group. We are. they will be open for the Prom crowd only. I’ve never missed my curfew. happy about your plans to use a limousine so you kids aren’t driving. of course. We’ve heard that they allow kids to drink. Also.Mom: Kevin: Mom: Kevin: Timothy’s usually isn’t open early in the morning. However. we’ll have to get in our car and drive home very early in the morning. Donna’s parents are not as strict as they could be when a bunch of you are there. You make some good points. From where we sit. I think I ought to be able to stay out all night. 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. yes. 82 50 Practical Negotiation Tactics . you and Sally need to call it a night (or really a morning). You realize that this could be as late as 4:00 a. Fifth. That’s the deal then? Okay. but because the owner’s daughter goes to Sally’s school. And if we don’t spend the night.m. but it should not be oversold. We think that after the breakfast. and the crowd we hang with doesn’t either. I know you trust me and that I’ve earned the trust.
Tencro approached the state’s Economic Development Officer. because his parents could not disagree with such wellthought-out ideas. Sally and Kevin had a wonderful night and were quite happy to have the evening end at 4:00 a. regardless of the incentives. The spin-off business from our operations is huge. the state can do to help the company expand and rebuild. one-floor operation would be very profitable. and it does not really need any help. and a new. but there are limited options available. Tencro: Let me just remind you of what our company means to this state. we are one of the largest employers in this county. Nevertheless. but it could easily add another 500 if it had the space on its assembly line.Conclusion Kevin’s strategy to hit his parents with all of his very good arguments at the outset gave him an advantage. if anything. Also. The company approached other states to see what incentives they might offer Tencro to locate in their state. we’d be adding at least 500 new jobs. our Exchanging Initial Offers 83 . EDO: Well. It currently employs 800 people. we’re of course interested in keeping you here. Tencro is not going to leave the state. other companies have received incentives and Tencro certainly wants all it can get. Example 2 Tencro Company decided to modernize and expand its business. The assembly plant is out-of-date. but we’re getting a lot of interest from other states willing to help us relocate. Tencro has approached the state’s Office for Business Incentives to see what. With 800 employees. and had this conversation: Tencro: We really want to keep our company here and expand it.m. We need to find out what you’re willing to do to keep us here. and it will grow—everything from sub-parts manufacturing to the shipping business we generate. but was disappointed to learn that they offer very few incentives. If we can expand here.
We need help in the cost of attracting and training the new 500 employees. we will need the two-lane entrance expanded to four lanes. EDO: The state has very limited resources to pay for economic development incentives. We 84 50 Practical Negotiation Tactics . what do you have to have? Tencro: We need a new location—20 acres or so—to build our new plant. while we value your company as a long-time corporate citizen. and we are willing to offer some training dollars for the new workers. Also. additional police. And. The industrial park land can’t be “free” because we have agreements with other companies that had to buy the land. We need a rebate on the local income taxes to help pay off the loan to build our new building. 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.employees pump money into the economy by buying houses and cars. That might involve the state building housing for them at a reduced cost and providing them with some retraining.. We need certain incentives. so we’d have to have it free here. etc. EDO: Well. We think that we’re the reason XYZ and ABC companies located here and we believe they are likely to leave if we do. schools. if the new location is at the local industrial park. and we’ve had to divert funds from business incentive programs over to basic services. now that the economy has improved. 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. or else it will not be cost-effective for us to stay here. paying taxes. etc. any plan by the state to build housing that is subsidized by tax dollars will draw a great deal of criticism. and traffic signals. There are more residents in the state demanding more public services: road improvements. Certainly. And we’ve been offered land practically free in the neighboring state. We do want you to expand your plant. We can’t possibly give it away to other companies coming in behind them.
the training and the new road improvements were all the incentives offered to Tencro. Conclusion The posturing by both sides could have caused the whole negotiation process to bog down. However. and the state did end up participating in a housing subdivision in order to keep the purchase price down for the new employees. and hired 500 new employees. Other than that. Tencro: Well. Exchanging Initial Offers 85 . let us go back and take another look at our options. we’re just not in a position to offer more than that at this time.agree that the road into the industrial park must be widened and a traffic light installed at our expense. The new set-up was so profitable. Tencro was able to pay off the borrowed money in half the time. Tencro bought land in the industrial park. EDO: Get back to us as soon as you can. but for the fact that each party did its homework and was aware of the true facts. borrowed money for the new building. Future negotiations continued.
offer $150. 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. because you have settled quickly. The sellers must be willing to come down a few thousand … Sue: Well.000. but you feel cursed because you gave away too much.000 three years ago). Jay: No. The other party will probably come back with an equally ridiculous offer. and that two similar ones on the same street sold for $330.000 for a house that sold for $185. We don’t know how anxious they are to sell or if they know the market.000 and $337.000 two years ago. of course. 2) Start out with an old number.” (You have won a settlement. is the most (or least) the other side will accept.000. and houses in this area sell fast. or 3) Make an unrealistic offer (i. before someone else does. then $320. which can be very useful)..000 this year. such as last year’s price. Example 1 Jay and Sue are looking to buy a house in a specific neighborhood because it has a good school system. They found one they both like that lists for $325.” The perfect first offer. Jay: No.000—what they paid for it. particularly if you don’t know the other party’s “settlement range. 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.) To prevent this from happening. Sue: Let’s offer $325. thus requiring greater concessions on both sides. think things through before you make or accept the first offer. 86 50 Practical Negotiation Tactics . Their realtor told them that it sold for $290. at minimum cost. never give them their asking price.e. Let’s low-ball them and offer $290.Tactic 21: Avoid the “Winner’s Curse” It is often quite difficult to make the first offer. Avoid giving away too much at the outset. That’s a fair price.000. and you cannot withdraw it in good faith.
000 total. the sellers obviously would have accepted and Jay and Sue. If. (the next day …) Jay: They made us a counteroffer of $307. the company president.000 for each of us—$6.500—half the difference! Sue: Great. Lyle: So what’s your price? Bob: Can you tell us what you have budgeted for this project? Lyle: No.Sue: Don’t be crazy. I can’t tell our realtor $290. and the offer was based on fact: the prior negotiated price. Frank: Me too. Sue: Then you do it. since they had already bought another house. then let them make a counteroffer. 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. The buyers were very motivated to sell.) Bob: I’d do it for $3. Give us your lowest price.000. as requested by the human resource director. they had offered $325. Exchanging Initial Offers 87 . but who knows what they are planning on offering. was very impressed with their presentation. They outlined how they would develop a new employee performance-appraisal system. Lyle Foxworthy. (Bob and Frank meet privately to discuss the situation. as Sue had first suggested. Both parties felt that they made a good deal. Let’s accept it! Conclusion Jay and Sue avoided the so-called winner’s curse by making a low (but reasonable) first offer. realizing they offered too much. That’s an insult! Jay: Well.000.
) Lyle: Okay.000) their minimum price of $6. but we know you must have an amount budgeted for this and we are willing to do it for that amount. and you two come highly recommended.000. That is all that’s left in this year’s training budget. We’ve waited long enough.Bob: Lets make them give us a price! (Bob and Frank return to the meeting room. and it would not apply. What’s the cost? Bob: We want the job.000. I’m out of time. 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. Conclusion Bob and Frank avoided the winner’s curse by forcing Lyle to make the first offer. but we can’t pay more than $18. We’ll do the job. Lyle: Okay. 88 50 Practical Negotiation Tactics . Bob: That’s fair. They also ended up getting three times ($18.
Wait to counter (see Tactic #24) because this will give the opponent the sense that you are serious about bargaining. do not dismiss it because it is not all you want. and do not flatly reject it because it is not your offer. Use a prolonged period of silence (see Tactic #29) to convey something at a strategic moment. Experienced negotiators seldom reveal their exact priorities and objectives. because if you do not at least appear to be flexible. is likely to pull away from the table. and attorneys use tried and true tactics in giving and receiving offers. Skilled negotiators such as salespeople. and remain open to offers and options that you did not originally expect (see Tactic #30: Always Leave Room for Dessert). labor negotiators.Stage 4: Making Counteroffers he heart of the negotiation process is the give-and-take. which would most likely weaken their position (see Tactic #26: Keeping Secrets). but possibly of different values to your opponent. Expect that the “total pie” will be different from what it was at the outset. Also. One or more parts might be acceptable or indicate movement from their previous positions. be prepared to divide an offer into smaller ones to make it appear to be more reasonable to the other party (see Tactic #31: Cut Salami Slices) or offer two or more alternative proposals of equal value to you. the other party. 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. It has often been said that the key to negotiations is to be flexible (see Tactic #25). T Making Counteroffers (The “Give and Take”) 89 . seeing no common ground. carefully evaluate an opponent’s offer. In some negotiation situations. which is often the case. in fact. what appears to be an outer limit of the settlement range when the process starts can. When the other party makes an offer. This can produce a negotiated solution without giving up your priorities (see Tactic #28: Fixed Alternatives). be enlarged (see Tactic #27: Expanding the Pie). Instead.
and that he already made plans to visit with college friends on the East Coast for the two weeks after that. The week he would be home would be the first week of school for Sydney. completed his first year of college and came home for the summer around the middle of May. Jerry pointed out that he is expected to work until July 31st. 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. His brother Sydney. gives your opponent little maneuvering room and might even prolong or damage the negotiations. finished his freshman year of high school at the beginning of June. We have four options. Proposing only one solution to a problem. 90 50 Practical Negotiation Tactics . He planned on being home for one last week before having to pack up and go back to college. Dad. 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. Option 2: Mom and I go before Jerry leaves on August 1. Sydney. while it may be your best option. Proposing multiple ways to reach your goal can get you to the same place. what say you. 15. I don’t want to give up on a family vacation that quickly. 19. it looks like we can’t really plan a vacation for all four of us. Jerry had already started his summer job. 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. Example 1 Jerry. Jerry will be here. and quicker. In mid-June. Option 1: No family vacation. Here’s the discussion that followed: Mom: Well. except when you’re negotiating.Tactic 22: Propose Multiple Options The shortest distance between two points is a straight line. so you can go without me. Dad: Wait a minute. their parents began discussing a family summer vacation. Let’s see what we can work out.
Sydney: So what you’re suggesting is that the three of us are on vacation from Thursday to Sunday. Bob. me. It’s not perfect. If we started the vacation on a Thursday. Joe has no say in who was hired by the corporate legal office to work in his unit. Sydney: Don’t I start school that week? I don’t want to miss school. actually. Mom? Mom: Let’s do it. one paralegal. And I miss orientation and start school the next day? Dad: That’s an option. Andrea considers Making Counteroffers (The “Give and Take”) 91 . and Sydney go to South Carolina before his school starts.Option 3: Mom. Classes don’t start until Friday. and one secretary in his litigation unit. By proposing numerous options. Mom: Well. Jerry: Okay with me. we could return home on Thursday and still get a week’s vacation. when we come home. and Carl). Conclusion The goal was to have a family vacation. we meet up with him that week for vacation. but it should work out all right. you have a half-day orientation on Wednesday. they were able to make that happen and not interfere with or argue about the merits of each other’s individual goals. if it’s okay with Jerry. Sydney: Okay. Option 4: Jerry doesn’t return home the week between his visit to the Northeast and returning to school. Jerry: My friends and I have plans through Saturday of that week. so I won’t be able to meet up with you until Sunday. but he can discharge employees for poor performance. Example 2 Joe is an attorney whose job responsibilities include managing three other attorneys (Andrea. Then Jerry joins us until Thursday.
Joe: That is certainly an option. To put it as bluntly as I can. 92 50 Practical Negotiation Tactics . Andrea: Well. however. I really see your options as follows: You can leave the corporation. In the last month. You had no authority to agree to settle the Stites case without clearing it with me. and resents any attempt by Joe to supervise her work. you have a job-performance problem. so Joe took a “hands off” approach. but it doesn’t solve the problem—nor is it the only problem. Andrea: We’re hired for our expertise. Joe: Andrea. which forced Joe to take action. It is to the corporation’s benefit to address that problem here and now. you know that wasn’t an okay to settle. We have a formal procedure that you just don’t like to follow. It was just a comment. why don’t you just move me to another unit? I’m certain Bill thinks I do good work and would be happy to have me in his group. Andrea: Wait Joe. 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. If you don’t like the way I do my job. we have a very big problem. or you can work out a “supervision” agreement with me so that I can better monitor your performance. Before you start. Joe: Come on. she made a two glaring errors in judgment. Andrea: You didn’t list moving to another unit as an option. Andrea. Her job performance was acceptable. The attorney for the other side has agreed to give me the additional time to file it. isn’t it? But I don’t think just moving you really solves the problem. you can agree to a demotion so that your areas of responsibility are lessened to that of a paralegal. and I don’t see why we don’t have more independence.herself to be a professional. rather than to put it off on someone else or for some time in the future. Joe: That’s all well and good. let me say that I’m handling the missed deadline on the pleading.
But in fairness to our mutual employer. the needs of the corporation have to come first. my goal is the same is yours: to create an environment where you can perform to your full potential. in fact. rather than my staying here. Joe: That’s fine with me. Andrea: Well. 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. lets talk to Bill about the move. but it would still require some change in the way you work: either a demotion. by Leigh Thompson. Conclusion Joe’s willingness to offer more than one solution gave Andrea a way to look at this unfortunate situation as an opportunity. improve her work performance. If that option is okay with you.Joe: That could be an option. I want to stay with the firm. Believe it or not. Andrea’s move and subsequent “approval” regime did. If you are convinced that I have to undertake an “approval” program.) Making Counteroffers (The “Give and Take”) 93 . or I would advise your next supervisor to put you on a very formal approval program. and propose an acceptable alternative. I hope we can work it out.
Let’s see. or Distributive) The “win-win” approach to negotiations is a basic tradeoff strategy of seeking maximum gains for both sides. because it can speed up negotiations and produce a more desirable outcome.).) Yes. if a buyer negotiates a $500 reduction of a contractor’s bill. They each agreed to list the items they want and then to negotiate whether or not they will be purchased. then the contractor has lost $500 in revenue. It is used only when each side has several demands. They both agreed that this is the maximum they will spend on “extras” before moving in.500. Maureen: First. Example 1 Brooks and Maureen Wilson have just finished building a new home. 94 50 Practical Negotiation Tactics . 3) distributive items (those items for which the two parties have exactly opposite interests. then those which can be easily traded. Brooks: Right. With distributive items. In essence. These items often involve money). This approach is an important tactic. Let’s agree to those things. 2) exchange items (those that can be easily traded off—one item for another item of equal value. and a home theatre. and finally. that’s $9. For example. They have a fixed amount of money—$14. Exchange. etc. 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). the fencing.Tactic 23: The “Win-Win” Approach (Identify Issues as Compatible. we both want the sod. three strategies are used. let’s see if there are any items we both want. only those with polar-opposite interests that must be divided. one person’s gain is another’s loss—zero-sum. thus making it necessary to find a middle ground on each. Wow! We are off to a good start.000. (She looks over the list. 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.
000 $3.# 1 Sod Item Cost $1.500 $2. Making Counteroffers (The “Give and Take”) 95 .000! Brooks: Good.200 $200–$2. I’ll trade your sidewalk and trees for my whirlpool bath.500 $500 $1.500 $5.000 $2.000 $500 $1. Can we split it evenly? Brooks: Okay. Maureen: No.000 $5. We have $1. $750 for lighting and $750 in the bank. which I’d like to keep in the bank. and we both get things we want. which takes another $3.500 left. These are all permanent immediate needs.000 $1.000 Brooks X X Maureen X “Win-Win” Category Compatible Exchange 2 Trees (3) 3 Berber carpeting 4 Lighting upgrades 5 Third garage 6 Tile entry 7 Designer drapes 8 Deluxe home theatre 9 Extra sidewalk 10 Custom chandelier 11 Whirlpool bath 12 Fencing X X X X X X X X X X X Exchange Compatible X Compatible Exchange Distributive Maureen: Well. that makes sense. I’d like to spend some of it on lighting upgrades.
During that time. All items to be negotiated and their desired outcome for each item were put in writing for review. 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. Profit-Sharing 5. The combined lists total thirteen different items: Desired Outcome No. Wage Increase 4. Pension Increase 3. Length of Contract 2. This year. finally agreeing to split the difference on the remaining amount (distributive items).Conclusion By taking the time to list all the items each person wanted and their cost estimates. even in difficult years. both sides exchanged lists of initial demands at their first meeting. Drug-Testing Program 96 50 Practical Negotiation Tactics . management and union negotiators found that a “winwin” approach to negotiations worked well. 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. 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).
Job Security 13. Next. Finally. and removed from the table. Shift Differential 11.Compatible rent provision 15% Exchange 15% No layoff provision $100/month Exchange Exchange Exchange In their second meeting. No Strike/No Lockout 10. one Making Counteroffers (The “Give and Take”) 97 . Overtime Assignment 8. Clothing Allowance Based on senior. they exchanged the economic issues of approximately equal cost: the union pension increase proposal (#2) for the management shift differential (#10).6. signed. and the union clothing allowance proposal (#13) for the management funeral leave proposal (#8). (#5) a new drug testing program. This gave members of both sides a sense of accomplishment as they began to discuss the remaining two issues for which they must find a middle ground. Because they held opposite positions on these issues. First. they accepted the union job security proposal (#12) in exchange for the management subcontracting proposal (#11). They proceeded to draft the language to settle these issues. and (#9) to continue the often-discussed no strike/no lockout provision. eleven of the thirteen original issues to be negotiated had been agreed to. they began to trade off the exchange issues of similar value and nature. the management profit sharing plan (#4) was exchanged for the union overtime assignment plan (#7). Next. the negotiators agreed that they had compatible positions on three items: (#1) length of contract.Distributive rent program co-pay Exchange Exchange 7.Voluntary ity 2 days Continue current provision 10% 10% No provision $50/month 3 days Continue cur. Health Insurance Employees pay 20% Continue cur. At this point. Paid Funeral Leave 9. Subcontracting 12.
negotiations begin on a positive “win-win” note. but a middle ground was eventually found on each and negotiations ended. Conclusion This tactic is simple. A middle ground often must be found on each of these distributive issues if you are to reach an agreement. The tactic offers several advantages: First. 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. They then identify each as compatible. Second. These two distributive issues—wages (#1) and health insurance (#6)—were the most challenging to settle. 98 50 Practical Negotiation Tactics . when you exchange items so that each party achieves their desired outcome on one of the two. exchange. when you agree on the items where both parties have similar desired outcomes. Third. the most difficult issues (often involving price or some other economic measure) can be negotiated because you know that most items have been settled successfully and only a few remain. Both sides first agree that all issues to be discussed will indeed be listed and openly discussed.side’s gain is the other’s loss. you can use the process to settle many of the other issues on the table. if both parties start from reasonable positions. or distributive so that the negotiations can begin in an organized manner.
and on what would be considered acceptable “sharing” of each other’s junk food supplies. Mutual respect must be part of the negotiation process. Rob stays busy all day and evening with other activities. do not offer a counterproposal right away. Here is how the last issue was handled: Okay. you know. Rob: Wait a minute. Example 1 Jasper and Rob met when they were assigned to the same dorm room their freshman year in college. This isn’t high school. So when’s a good time? Jasper: (without hesitation) No way.Tactic 24: Wait to Counter As the negotiations begin. and refrigerator. The final issue had to do with “lights out” and quiet times for studying. Jasper studies during the day and early evening and likes to stay up very late watching TV and visiting with friends. even if you aren’t going to accept their offer. Rob: Making Counteroffers (The “Give and Take”) 99 . A counterproposal delivered too quickly tells the other side that you haven’t or won’t even seriously consider their offer. Waiting a respectful amount of time to counter. so I can study. and looks like you are belittling them. Since they didn’t know each other well. the location of the TV. and can help you reach your goal. they decided to establish “room rules” so that they would both be comfortable with the room assignment. each side is expected to put an offer on the table. last item: I’d like it quiet in the room at night. Jasper: Finish or not. will make your opponent feel good about the process. and studies late into the night. stereo. so he wants a quiet room late at night. They agreed on which part of the room each would have. It is especially important that you do two things: take your time before rejecting any offer from the other side. 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. and from a strategic standpoint. Let me finish.
10:30 p. and the union foreman would report directly to the plant manager. and that’s it. midnight during the week is the only thing I’ll consider. Example 2 ABC Company’s management was being restructured and compressed in order to facilitate its new “just-in-time” manufacturing philosophy. 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. but changed his mind when he saw Jasper’s attitude. Jasper: Midnight. The union contract required that management renegotiate this change in the grievance procedure with the union.Rob: (Rob was about to suggest midnight on Mondays through Thursdays.m. Under ABC ‘s contract with the union. Failure of both young men to allow one another to have their proposal considered caused the relationship to break down. Under the restructuring. I want a 10:30 p. Jasper: (without taking a breath) At best. The appeals procedure would have to be altered to reflect the restructuring. Neither side anticipates that there would be 100 50 Practical Negotiation Tactics .) Listen. b) written complaint to a floor manager if the matter is not resolved in 5 days. 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. and d) a hearing with company owner if the matter is not resolved in 20 days. Rob: (there is no hesitation in this voice) No. c) a formal “meeting” with plant manager if the matter is not resolved in 10 days.m. the positions of non-union crew leader and floor manager would both be eliminated. No agreement was reached. curfew on TV and other noise every night. and that’s not negotiable.
Company: (rather abruptly) Let’s not drag this out. If in 20 days he/she has not been satisfied. and began the negotiation session concerning the grievance procedure. no one can complain about that. he/she can take the grievance to the plant owner for a hearing. Union: Hold on. and I’m certain your members will be okay with it. rather than as a judge on the merits of the grievance. 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. this redraft is a very simple change to the contract. An aggrieved employee can make a request for a meeting with the plant manager. We’ve got a couple of alternative models for you to consider. After initial pleasantries were exchanged. Certainly. In fact. the employee and the foreman would meet with the plant manager and attempt to resolve it. If the union foreman felt that the grievance had merit. We think that this is an opportunity to eliminate some of the adversarial aspects of the grievance procedure. The union was prepared to accept the plant manager’s position as final. We just cut out two steps. Company: (no hesitating) Trust me.any objection to the change. Our guys are prepared to accept a shorter grievance procedure if we can find a way to ensure that you’ll take our grievance issues seriously. We’ve simply eliminated the first two steps. ABC Company’s negotiator explained the management changes soon to be implemented. our grievances often signal to management that there are real problems on the shop floor. and everything else stays the same. (Note: An attitude change sets in.) We’re just not happy that you are proposing a Making Counteroffers (The “Give and Take”) 101 . Union: As you know. because those management layers are gone. Company: Here’s the new draft of the grievance procedure. rather than go on to appeal it to the company owner. Union: You obviously didn’t come here to negotiate. The redraft is simple and straightforward. but to dictate. We’d like you to consider the plant manager’s role as a problem-solver.
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.two-step grievance procedure instead of a four-step procedure. Union: We’re very serious. and we’ll strike if we have to. This time. the two parties did meet again. After a cooling off period. 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. We’ll see you on the picket line. the company entertained the ideas the union had tried to propose before. and actually accepted a three-step procedure. 102 50 Practical Negotiation Tactics .
Nancy: Sue. If you are flexible. Even before the baby’s arrival. two sisters. Sue: Yes. and Sue called her mother to let her know that they would not be coming for Thanksgiving dinner this year. Be open minded.m. The couple used to have Thanksgiving dinner at both families’ homes. successful negotiators remain flexible because new solutions to old problems often surface during a negotiation. But after the negotiation gets started. four brothers. 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). Bill. They’ve done the research. Next year. and the baby aren’t coming for Thanksgiving dinner this year—that you’re going to Bill’s parents’ house. one sister. and now have a new baby girl. and ten nieces and nephews) always ate around 5:00 p. Making Counteroffers (The “Give and Take”) 103 .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’s sister Nancy called her to talk her into coming anyway. you can adjust your demands or goals to include such new ideas. we’ll get to our side.m. Bill’s family (parents. established goals. and at least five aunts and uncles) ate around 7:00 p. their spouses. Sue’s family (parents. and we’re really not able to enjoy either one. Mom says you. and do not dismiss something said by your opponent just because it came from the opponent. They flipped a coin to see who “got” them and the new baby this year. Bill’s family won. Sue and Bill decided that they had to begin alternating their Thanksgiving Day visits between the two families. 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). two brothers. it’s just too much to do both. Example 1 Sue and Bill have been married four years.
. and it became the family’s new tradition. Nancy: I’ll let you 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. but she won’t tell you. I thought of asking Mom if she could move dinner up to noon or so. she suggested a unique alternative. Thanksgiving is Thursday. Nancy: What if we did Thanksgiving on Friday? Sue: What? Nobody does Thanksgiving on Friday—that’s un-American! Anyway. Nancy: If we keep the time at 5:00 p. Sue: I don’t know. some people have to work on the Friday after Thanksgiving. Isn’t that what Thanksgiving is about—taking a day to give thanks for our blessings with the people we love? We’ll just arrange it so we do it two days in a row! Sue: Well. the holiday will be over. I know that I would rather not do two Thanksgiving dinners on Thursday. we’ll come to Mom’s. There’s nothing “special” about Friday. Celebrating the next day seems odd. Mom’s very upset. When that goal looked out of reach. but then I realized that the rest of you already go to your in-laws earlier in the day. I bet everyone could make it on Friday. So that doesn’t work.Nancy: It just won’t be right without you guys. By being flexible. either. Everyone in Sue’s family liked the idea of celebrating on the Friday after Thanksgiving. 104 50 Practical Negotiation Tactics . Conclusion Nancy’s goal when she called Sue was to talk her into coming to their Mom’s Thanksgiving Dinner on Thursday. Bill won the coin toss for this year. I mean. Nancy: We’d make it special by all of us being together. Sue: Next year.m. it’s okay with me if you can sell it to everyone else.
had been negotiating with a foundation to become its major benefactor for a new building and to supplement the organization’s annual operating budget. Kids’ Home hoped to get $500. Estimates for building a new orphan home ranged from $12–$15 million. the interest income of around $6. City: Can’t you borrow the money from a bank to build the facility. but we need some assurance that you will be able to build and operate the orphan home at that location. City officals: We can probably give you the land for free. we’re committed in theory.5 million is available for distribution to numerous charities. but the principal of the fund can’t be touched. the foundation’s regular annual grants come to roughly half of their available funds.000 a year for operations. We’re hoping to get a commitment from them to build and help fund the operations of a new facility. Foundation officals: Oh. 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 . The foundation has a substantial endowment fund. we hope to break ground early next year for the new orphan home.Example 2 Kids’ Home. Kids’ Home is also hoping to get the city to encourage the foundation to commit to full funding of the building project. depending on the cost of the land. Kids’ Home: As you know. Kids’ Home: That’s why we brought the foundation’s officials with us. Kids’ Home and the foundation have decided that a parcel of city-owned land would be ideal as a site for the new building. We need the city’s help by allowing us to get the city land donated to us (for free). a non-profit organization for orphaned children. We only have maybe $2 million a year to put toward this charity. Unfortunately (for Kids’ Home). but we can’t fund all of the $12 or $15 million.
I’ll contact the state tomorrow. Foundation: City: Foundation: Kids’ Home: Conclusion By exploring alternative financing plans suggested by the city. The commitment by the foundation to make the annual bond payment debt backed by the foundation’s endowment fund should be sufficient collateral to get such bonds issued and purchased. Kids’ Home was able to acquire state-issued no-interest bonds backed by the foundation’s pledge of interest income to build the new orphan home. Why not ask the state to issue no-interest bonds? It can do that for non-profit organizations. it could end up costing double that amount. We’re a nonprofit group. We wouldn’t want to make such a commitment to a bank. but we’re willing to look at it. We’ve never committed our funds to pay back a bank loan. 106 50 Practical Negotiation Tactics .Kids’ Home: Borrowing the money gets very expensive. And “donations” aren’t a very safe collateral for any bank that wants to loan us money. If we borrowed $15 million at 10% interest. and really taxes our ability to raise funds. We’re not familiar with that program. We probably would not be able to participate.
Mr. and you probably won’t identify your throwaway items or tell your opponent your bottom-line. each side has to know generally what each other wants to accomplish. it is not acceptable to lie. The Jones’ two older children—girls in their early 20’s—often had friends over on Friday and Saturday nights. These parties could get rather loud. The Jones family suspected that the Smiths called the police. At the same time. Smith: We don’t know what you’re talking about. Successful negotiations depend on trust. 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. and asked the officers to cite the Jones kids for parking too close to a corner. the Smiths could count on parking their car directly in front of their house. and often lasted until 2:00 or 3:00 a.m. you should be careful not to misrepresent your position to such an extent that your opponent will feel that you have lied. Jones: We’ve obviously gotten off on the wrong foot. the neighbors began to have problems. Making Counteroffers (The “Give and Take”) 107 . Mr. yet not reveal all of your goals and objectives. and trust can only be established if all parties interact truthfully.Tactic 26: Keep Few Secrets One of the most difficult skills to master in a negotiation is how to be candid. and often took up all the space along the street in front of the two houses. But the Jones clan had four cars altogether. The Smiths called the police to complain about a late-night party. The Jones’ two younger children—boys in their mid-teens—hit baseballs into the Smiths’ yard and scared the Smiths’ dog. Before the Jones family moved into the neighborhood. Example 1 Soon after the Jones family moved in next door to the Smiths. However. It is perfectly acceptable to say that you are not ready to reveal certain things. you might not want to reveal all of your priorities at first. In order for a negotiation to be successful. They asked to meet with the Smiths to talk about these disagreements.
Jones: I wish you had mentioned that the last time we talked. It is really very disturbing. Smith: You know that your boys are causing our dog. Almost every day. 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.Mr. Mr. but we do know that someone has complained. Mr. and they won’t be having friends over more than one night a weekend from now on. we’re good now? Mr. In good weather. we would like to work out some solution. they’re hitting baseballs into our yard. Also. yes. and was met with the following: Mr. Mr. and not in the back yard. Smith: Well. In spite of the Smiths’ assurances. Mr. we have a problem walking long distances in bad weather. since you’ve asked. that wasn’t us. And we’ll make sure none of our cars are parked in front of your house. Smith: No. fine. And the music is to be off at midnight. Mr. If you can tell us all the things that we have done or are doing that have caused you to be inconvenienced. Smith: Yes. So. they kept it. Jones: We’ve already talked to the girls about the parties. we’d like to be able to park our car in front of our house. I guess. we thought you might have called the police about our kids’ party and our cars. a lot of problems. (A week later. Jones: Okay.) 108 50 Practical Negotiation Tactics . Smith: Well. At our age. Is that everything now? Mr. then they’ll need to come in at midnight so that their talking doesn’t disturb you. Muffin. Jones came to see what the problem was. I’ll talk to the boys and we’ll make sure they play baseball in the park. the next time the boys were out playing and the ball came into the Smiths’ yard. if they are outside. the late-night parties are a problem. Jones: Well.
Jones: Sure. have labor unions.Mr. Mr. but Neno cannot tell the union this. irate) I can’t believe you people called an inspector on us. and too bad for you! Conclusion The disagreements and unpleasantness continued until the Smiths finally sold their house and moved into a condominium. Unless Neno can get the Union members back to work on Monday.” Forget all we’ve agreed to do—we’ll just enjoy the use of our property. and the deal is close to being final. You could have seen that yourself. The British insist that a very strict confidentiality provision be part of the negotiating process. Jones: (at the Smiths’ door. Neno has been negotiating the sale of its business to a British company. Smith: Well. But we didn’t call the inspector. Japanese companies often do not “recognize” labor unions the same way U. Why didn’t you tell us? We can’t read what’s on your mind! Mr. or European companies do. Union officials are afraid that a Japanese company might purchase it. Neno’s president and the Union representative met to discuss the walkout.S. You obviously don’t want to be “good neighbors. The union laborers walked off the job on Friday.S. because they didn’t like a grievance decision. the British firm will walk away from the deal. or the deal is off. Making Counteroffers (The “Give and Take”) 109 . Its local headquarters has a union to handle its international shipping. although none of the facilities outside the U. The union knows that the company is up for sale. the tree was clearly over the fence. Example 2 Neno Enterprises is a shipping company with extensive global operations. 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. We would have fixed the tree if you had asked. you’ve said that before.
is still a labor shutdown. I can’t really be more explicit than that at this time. it will impact our marketability. we don’t. If that’s going to have a bad effect on your being able to sell the business. Neno: Look. But I have to have everyone back on Monday. no harm-no foul. and if the guys are back on Monday. Union: What aren’t you telling me? A labor shutdown. any interruption in our shipping could affect how these buyers look at our business. Have the guys back on Monday. If everyone is back on Monday. Neno: All I’m saying is that there is a difference. Anyone who buys the company will have to honor the contract we have. the slowdown as a result of no one working Saturday and Sunday won’t be noticeable. We’ve not had a labor shutdown in 20 years. Our guys are prepared to stay out a lot longer than Monday. But if your guys are out past Sunday. You really don’t want to do that. You don’t want to mess up our negotiations. whether it’s for one weekend or a week. Union: We think that the grievance decision affects our wages. we will resolve it to your satisfaction by the end of the day. We can’t put up with the kind of decision we got on our grievance. I’m certain that if we can sit down and talk next week. so the union won’t be hurt by the buyout. then there’s probably no harm done. We’ll meet with all of the parties on the grievance first thing Monday. But we also need to make it clear that we expect you and whoever might buy your company to take our contract seriously. It’s not the time to have one. do you? Union: No. I need your guys to come back to work on Monday. And one company that is interested has a really good track record on expanding the businesses they buy. I think it already has. Therefore. I promise you. I’ll forget all about the strike. 110 50 Practical Negotiation Tactics . this is a legal strike under the contract. If they do come back. maybe by next Friday or the week after that we’ll have our guys back to work. Neno: Look. I know it’s not news to you that this business is up for sale.Neno: You know this is a wildcat strike and that it is in violation of our contract.
I would be more specific. while the grievance was being resolved. Neno called the union negotiator in and briefed him on the sale. Union: Okay. as well.Union: It’s that important to you? Neno: Yes. but the British firm will allow them to organize at their foreign locations. I can. If I could. we’ll be back to work on Monday. and it’s that important to you as well. Conclusion On Monday. the union was willing to trust Neno—even though he couldn’t tell them everything. But I can’t. Union: Okay. the sale was finalized. was the right decision to make. But I need to tell my guys that this is important to them as well. 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. Neno’s decision to respect his confidentiality agreement and simply tell the union that he couldn’t disclose all the information. He told him that it would mean that the union would not only keep its jobs here. rather than make up reasons. Can you assure me of that? Neno: Yes. Making Counteroffers (The “Give and Take”) 111 .
Tactic 27: Expand the Pie
In some negotiation situations, agreement can be reached by increasing the total pool of resources available to all the parties involved. While this is not practical in every situation, a relatively minor increase in the resources available might allow both parties to reach a solution. Resources should be as broadly defined as possible—money, people, time, etc.—when considering how a “fixed pie” might be expanded.
Alexis, age 7, did not want to practice her violin for an hour today, but she promised her parents that she would practice an hour each day if they bought her the instrument. She really wants to visit her friend Michelle and spend the night.
Mother: Alexis, our agreement was one hour a day, every day! Alexis: I know, but if I’m going to play with Michelle, I’ve got to go with her now! She only has two hours before her game and then her mother is taking us shopping. Mother: That’s too bad. Alexis: Can’t I miss one day? Mother: No, you promised to practice every day to learn to play. Alexis: Could I practice two hours tomorrow when I get home? Mother: One in the morning and one at night? Alexis: Yeah. That would be easy. And I would still get in three hours of practice this weekend. Mother: Okay. Then you can go with Michele.
Alexis’s proposal expanded the resource of time to find a solution, and her mother agreed to it because her objective (for her daughter to get in enough practice time) was met.
50 Practical Negotiation Tactics
Supervisor: Peggy and Kim, you’ve both had a great sales month and you both earned that trip to Hawaii, according to the promotion program. The cost to send both of you and your spouses exceeds the budget by $1,200, however, so we’ll need to negotiate something. Peggy: Like what? Supervisor: Well … I could send one couple this year and the other next year, since I’ll have a new travel budget by then. Kim: That doesn’t seem fair. We both earned it this year, and we want to take it this summer! Peggy: That’s right! Supervisor: I’m sorry. We never expected to have six people qualify for the trip this year, and the budget is simply not large enough. Peggy: Well, that is your problem. What other ideas do you have? Supervisor: You can each pay half the cost of the flights. Kim: Why should we pay for part of a bonus we earned? Supervisor: Let me talk to the department head about this … (The next day) Supervisor: I spoke with the department head, who explained that if we keep spending the office-supply budget at the current rate, there should be enough left over for me to transfer some money to the travel account to cover the trip for you and your spouses. Will you both help me control supply expenses? Kim: Sure we will, and thank you for finding a solution so we can all go on the trip! Peggy: Yes, we can keep supply expenses down. Thanks for thinking creatively.
Making Counteroffers (The “Give and Take”)
The supervisor in this situation quickly recognized that no negotiated settlement would satisfy Kim and Peggy. Their morale was important to her, so she sought to “expand the pie.” She did so without increasing the total annual budget, which was why the department head agreed to the one-time budget transfer.
50 Practical Negotiation Tactics
Tactic 28: Offer Fixed Alternatives
You might be more successful if you present several alternative positions to the other side. One party can present to the second party two or more proposals of equal value to the first party. This gives the second party the option of choosing one of the multiple offers. The second party is more likely to respond positively to this strategy because (1) people generally prefer having more choices; (2) one of the offers might be of greater perceived value to the second party; and (3) most people prefer to have input into a decision—even if it’s only choosing one proposal out of two.
Colleen’s fifteen year-old daughter hates cleaning her room. She usually lets it get quite messy, like most teenagers. On Friday afternoon, the following negotiation takes place when Amber arrives home from school: Colleen: Amber, you must clean up your room. We are having an open house on Sunday, and the house will never sell with your room like it is now! Amber: Oh, Mom … Tonight’s the big sleepover at Chelsea’s house and tomorrow (Saturday) I have a basketball game. Colleen: Amber, I’ve been telling you for three days to clean your room! This is it! You are not leaving this house until it’s clean. Amber: That’s not fair! Last Saturday, you said I could go to Chelsea’s sleepover! Colleen: That was before you kept putting off cleaning your room. Amber: All my friends are going … (pause) Colleen: Okay, Amber, here are your choices: One. Clean your room right now and I’ll take you to her house after you finish. Two. Come home tomor-
Making Counteroffers (The “Give and Take”)
(long pause) Felipe: Let me give you three options: A. Roberto: Well. I can accept B. Amber resisted the chore she hated. I’ll approve $15. but no TV or anything until it’s done! (pause) Okay. Felipe: Sorry. Three. I’ll find a way to do without one part-time person. keeping her Saturday free. I’m not going back to him again to discuss this program. Felipe: Well. Roberto: But it will never generate enough interest if no one knows about it. Use the $5. but I will cut your travel budget out completely.000 in the budget. but the company president does not share your optimism on this program. Conclusion At first. I’ll do it now. Example 2 Roberto: I can’t properly advertise this new program with a $5. she chose the one she most preferred. but I will cut your staff by one part-time person (or $15.000. Clean it after your game. I can’t help. I’ll approve $15. But when her mother laid out the schedule and gave her alternatives. B.000 for advertising. that is enough time.000). Roberto: But I need to start the direct mail and newspaper ads within two weeks.000 for advertising.Amber: row before your basketball game. or we lose a whole year. At least this way the program will have a chance to succeed! 116 50 Practical Negotiation Tactics . or C. Take it or leave it. Felipe: (Roberto’s supervisor) Sorry. and clean it. I have three hours.000 budget! I need at least $20.
Conclusion Felipe was willing to think “outside the box. would enable him to adequately promote the program. thus achieving his goal of not having to ask for a larger budget. which was his goal.” He offered Roberto three alternatives of equal cost. Roberto believed. Making Counteroffers (The “Give and Take”) 117 . One alternative.
It was 16% less than she had been led to believe she would be getting. I very much appreciated the fair job performance review you gave me. The negotiator for the other side says nothing. She was determined to hold her ground for at least a 13% pay increase and a promotion. inviting a response. If his opponent cannot agree to the demand but does not want to end the negotiations. I have to tell you that while I appreciate what you have done for me. I think you would agree with me that I have performed well above expectations this past year. he can make an open-ended statement. but one side comes back with a non-negotiable demand. You know my commitment to this company. 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.Tactic 29: Prolonged Silence When negotiations have hit a critical stage. Susan: Mr. nearing her third year with the company. Unfortunately. Susan knew that she was considered a valued employee and that her boss would want to do the best he could for her. Susan: I hope so. After a few minutes of silence. I am very disappointed in the company’s decision not to promote me and to limit my merit increase to 3%. 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. Here’s how the negotiations went. the promotion had not yet been approved. This should have resulted in an automatic promotion and a sizable pay increase. and the annual merit raise she was getting from the company was the same 3% other employees were receiving. 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. you are a valued employee. Example 1 Susan. Jones: I certainly do. received a glowing report from her boss on her job performance. and 118 50 Practical Negotiation Tactics . Jones.
(says nothing) If I can’t get that pay increase approved right now. Promotions of this type are all but automatic around here. Once he acknowledged that both items might be awarded sometime in the future. but I don’t think management will be willing to give you an additional 10% pay raise AND a promotion. the company’s refusal to grant them now was a harder position to support. I would very much appreciate it if you could ask the company to reconsider. and sell it to management that way. Well. I really want you to stay with the company. Conclusion Mr. and I’m sure management will agree.or three-year period. maybe we can talk about the promotion later in the year. If there is some flexibility in your request. it could help. Okay? (says nothing) Let me check it out and I’ll get back to you. Susan’s silence prompted Mr. I must ask you to try to get both. Jones to continue to offer solutions. Making Counteroffers (The “Give and Take”) 119 . I could probably find a way to phase it in over a two. if management can see their way to giving you the pay increase now. Jones went to management and convinced them that they should give Susan the promotion and the 13% raise. (says nothing) Or.Jones: Susan: Jones: Susan: Jones: Susan: Jones: Susan: Jones: that I deserve more consideration. but a pay increase of that size might be more difficult. because I feel my future with the company might be at stake here. of course I will be glad to do that. and I think that I really haven’t been dealt with fairly. I suppose I could get the promotion approved with the proper presentation.
The mayor’s negotiating representative wanted to complete the negotiations on the expanded agreement. the people Madame Mayor currently 120 50 Practical Negotiation Tactics . by saying that she might run for Chair. Mayor) said that she was considering running for office. The end of the agreement coincided with the election cycle for the two towns. Also. Town Council Chair). The office she was thinking about was the office held by her counterpart in the neighboring community (Mr. Mayor’s representative: No. has colored these negotiations. I don’t think it’s a problem. The parties agreed to continue the previous terms of the agreement. and until she does. and were trying to settle on new and expanded areas when one of the elected officials (Ms. The mayor. Town Council Representative: I think you’re wrong. Mr. and representatives of the elected officials of the two towns were meeting to renew and possibly expand the agreement.Example 2 Two local governments entered into a tax-sharing arrangement in order to provide joint services to citizens in a more efficient manner. My bosses might not have been inclined to expand the agreement anyway. her plans really don’t have any bearing on these negotiations. She has not decided what she’s running for. I think you’ll agree with me that the announcement your boss made about maybe running for Town Council Chair has dealt our negotiations to expand the agreement a fatal blow. Town Council Chair’s representative believed that the ability to expand on the agreement was critically wounded by the uncertainty as to which office the mayor might seek. The term of the original agreement was nearing its end. He decided to push for a simple renewal of the original terms. This is how the negotiations went: Town Council Representative: Well. but the officials had hoped to complete the negotiations prior to anyone involved announcing for office. but now they’ve got to ask what Madame Mayor’s motivations are.
Making Counteroffers (The “Give and Take”) 121 . He either had to end the session or figure out what to say to reengage the other side. Mayor’s representative: Well. I’ll go back and tell Madame Mayor your position. Town Council Representative: (silence) Mayor’s representative: I would think that at least the proposals that don’t involve budget changes could be pursued. the Town Council representative’s position prevailed. 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 don’t know what her reaction will be. and the agreement was renewed with no new provisions. Conclusion By remaining silent. I think we really have to drop back and just propose a renewal of the tax sharing agreement without adding any new items. I hate not to attempt to add some additional areas to the agreement. Town Council Representative: (long silence) Mayor’s representative: (after an uncomfortably long silence) Well.represents have to worry that her desire to switch governments might taint the negotiations. the Town Council’s representative left the mayor’s representative with no room to maneuver. In the end.
Madeline built a gazebo about 500 yards from the brook. She traced the brook back along its course to see why and where it had changed its path. or we will be at an impasse. She went to discuss this problem with the upstream neighbor and had every intention of demanding that the barrier be removed immediately. which an upstream neighbor had built. after the gazebo had been there for about five months. Your rock barrier has sent the brook onto my property and it is too close to my gazebo. Having an iron-clad demand probably won’t give you enough room to reach an agreement. when one of you might say. As was sometimes the case in these parts. Obviously. she noticed that the brook came within 100 yards of it. One day.Tactic 30: Always Leave Room for Dessert Negotiating is the art of give-and-take. the brook and rock barrier are on my property. you should always enter the talks with a good idea of what you are willing to agree to. I have a problem. The property came with three acres of forest alongside a meandering brook. and began to renovate it as a home and a pottery shop. It calls for compromise. Neighbor: Well. Madeline: Hi. had redirected the brook further into her property. You will have to remove the rock barrier.” Avoid making that “necessary concession” too narrow: It should be large enough for both of you to step into comfortably. Joe. She discovered that a rock barrier. 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. The reason I built it was so that I could protect my patio. in a small clearing. Madeline. “I have to have this. You are more likely to be successful if you identify a range of options that fall within your comfort zone than if you have a fixed bottom line with little wiggle room. Example 1 Madeline bought an old farmhouse outside of a small town. the brook was the property line separating her property from a neighboring farm. The brook 122 50 Practical Negotiation Tactics .
what I need is to protect my property line and my gazebo. I understand that. It might not be necessary to make such a dramatic change. if the brook is redirected. Madeline was able to protect her gazebo. Madeline: But by diverting the brook. and allowed me to have a survey done so that my deed can be corrected to describe the “existing brook” boundary line by other landmarks. Making Counteroffers (The “Give and Take”) 123 . restore her property line. Madeline: Yes. Neighbor: I’m sorry. Madeline: Well.extended right up to my back door when the rain was heavy. but you’ve changed the boundary line of my property. she widened her range of options. and return everything as it was. but I don’t know what I can do about it. When she found out that this was not going to solve her neighbor’s problem. you have not only threatened my gazebo. at least I’ve maintained my property line. Conclusion Madeline’s objective when she met with her neighbor was simple: Have the rock barrier removed. 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. She left room for a compromise. My neighbor on the adjacent farm wants to sell part of his property for a housing development. Then. Also. I’ve lost 400 yards of property on my three acres. which enabled her to achieve her goals. This will put these houses right next to me. but only if I have a clear understanding with you that the barrier will be rebuilt to protect my house. I couldn’t have that. and allow the neighbor to protect his home. I won’t remove the rock barrier. By expanding the range of options available to resolve the dispute. What if you removed the barrier for a short time. Neighbor: I can do both of these things. I can’t have the brook in my house.
you are taking a risk on the costs increasing.000. then the pension benefits overall will increase by $10. Over the next five years. and are willing to keep pension benefits the same. This is just a cash-flow problem that your members have to understand. Company: This could not come at a worst time for us.Example 2 The contract negotiations between the pilots and the airline had been going pretty well. and we know that with this new contract term of five years. This would be a better benefit in the long run.000 to cover the premiums for dependent coverage. However. And we cannot afford that $1. As best as we can tell.000. the airline paid a total of $200. Pilots: Look. we know that health insurance premiums might skyrocket.000 a year over the next five years? Company: Yes.000. The airline industry is in a slump. But only a few of our people are close to retirement age.000.000 (which we reasonably should have expected to pay in premiums) in the pension account now. what they really need is for you to cover the costs of dependent coverage.000. Over the last five years. The projections for the next five years were that these costs would increase to about $1.000 figure. the company can make your pensions much better. 124 50 Practical Negotiation Tactics . The pilots want dependent coverage paid for by the company.000. that would be the minimum increase. as it has always been. with all wage and operations issues resolved fairly early.000. the discussions of the employee benefits package bogged down on the issue of health insurance costs and pension benefits. and the premiums for health care just keep going up. Everyone was afraid that the dispute would cause an impasse and a possible strike. Pilots: So you are projecting that the increase in dependent coverage premiums will average $200. With long-term planning and investments. dependent coverage could cost us $1. If we invest the $200. The company wants to trade paying for dependent coverage for better pension benefits.
The $200.000. The health insurance market stabilized. It initially believed that the only option was to put that money into pension benefits. so the decision to be flexible was a good one. with a cap of $200. If we can get two or even three years out of the $200. the company will not be expected to give us this benefit.000 to either pay one year of the premiums. or invest in the pension plan? Company: Yes. can we agree to a year-to-year agreement on dependent coverage. Are you willing to risk not having an opportunity to increase pension benefits? Pilots: Yes. if they were that high. Pilots: Since the concern is about agreeing to a 5-year commitment without knowing the increases we might have in health insurance costs. Company: Then it’s okay with us. by agreeing to let the company cap its exposure for dependent health coverage.Pilots: But you do have the $200. and the pilots knew what to ask for when the contract expired.000 actually carried them through four years.000 the first year on the premiums. The dependent coverage is more important to us now than the pension benefits. however. that would be worth it. Making Counteroffers (The “Give and Take”) 125 . then those funds will not be available to invest in the pension plan.000? Once the cap is met. Conclusion The company was committed to limiting its exposure to $200. we are. The pilots expanded the range of options.000 available. Company: If the company spends the $200.
Buyer: Way too much! Saleswoman: Well. Saleswoman: I’ll be right back. do you want to look at something else? Buyer: No. what monthly payment did you have in mind? Buyer: More like $300 per month. if I can give you this car with a $300 monthly payment.… (20 minutes later) Saleswoman: So. I recall the day you drove it out of here. it’s a deal? 126 50 Practical Negotiation Tactics .” “affordable weekly payments.” and “low monthly rates” are examples of the salami tactic.” 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. Example 1 Car buyer: What. but that was several years ago. Buyer: Yes. I guess it would be around $600 per month. I just can’t imagine the monthly payment on a $45. Phrases such as “for only pennies a day. but the Consumer Price Index has not gone up 150%—nor has my paycheck! Saleswoman: So.000 car. and compare it to your strategic objective. be sure to add up the total cost. $45. If you are on the receiving end of such a tactic.500! Saleswoman: Yes. Saleswoman: With your 740 in trade. I love this car.Tactic 31: Cut Salami Slices One way to overcome anticipated or exhibited resistance to a proposed cost is to cut it into smaller units or “slices of salami.000 for a Volvo? I bought the one I’m driving for $19.
Instead of a three-year lease. You can do that. I can afford $6.00 per month for your service. it will be a five-year lease. I can’t discuss another client’s account. you can get the Disney channel for only $5. Once the buyer volunteered that $300 was an affordable “slice.00 per month. but what else must I buy? Only the basic service for $8. Sure. down payment. with your car and $6. (looks at the numbers) That looks good. and added the trade-in.000 down and $300 a month! Conclusion The saleswoman knew the buyer was suffering from “sticker shock. as promised. Great! So. I can’t afford that much.99 per month.00 per month.Buyer: I don’t see how you can do that. But my neighbor pays $39. Making Counteroffers (The “Give and Take”) 127 . Let’s see. and payout slices to reach the total price she wanted.000 down. Example 2 Cable representative: Owner: Cable representative: Owner: Cable representative: Owner: Cable representative: Owner: Cable representative: Owner: Yes.000 price into “slices” the buyer thought reasonable. but let me see the numbers. Saleswoman: Simple.” she had him—she worked around the $300 slices. do you want Disney? Yes.” She decided to cut the $45. do you want HBO? How much? $5. can’t you? Buyer: Yes.
Yeah. That’s another $5. But that’s all! Then we’ll hook you up on Monday. they asked about the Cartoon Network.00 per month was far too much. 2. and my wife wants the old movies. Any other kids’ channels? Yes.00! Why? Because he judged the per-slice price to be reasonable. but he agreed to six “salami slices” for a total of $38. What about the music package? Yes. The total is $38. and SI 1.00 a month.00 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. Great. Okay. 128 50 Practical Negotiation Tactics . Conclusion The owner thought his neighbor’s service at $39. That’s $5. Thanks. instead of one total amount. 3. we had that before. I really want the sports channels. Disney is for the kids! The sports channels are for me.00. 2? How much? $8.99 per month.
which can be successful if the opposing team has two or more members who hold different views of an issue. It should be used with caution: It can end negotiations immediately. turned off by the tactic. pressure tactics should probably be avoided. so are you ready to make a deal? This might convince a few buyers. and it can destroy your credibility. and the use of humor.m. but in tense. Humor might not look like pressure. Tactic #36 (The Element of Surprise) can catch an opponent off-guard and cause stalled negotiations to move forward. Other less-obvious pressure tactics include Tactic #37 (Divide and Conquer). “I can only guarantee this price until 6:00 p. 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). Applying Pressure 129 . Tactic #35 (Applying Excessive Pressure) is a similar tactic that should also be used with caution. 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. In some cases. angry negotiations. but others will walk out the door. the traditional car salesperson might tell the buyer. however. For example. today. Tactic #33 (The Bluff) is a classic pressure tactic. When both sides believe that each has equally strong positions. it is effective. but it can be used effectively when one party clearly has an edge.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.
And we don’t want to be unfair. Your opponent will consider you untrustworthy and might even be insulted by your attitude. big news! I’ve been promoted. and we’ll be moving south in the next month or so. Lacey: I know. I can’t tell you how many times Abby has said how happy she is that we have the sailboat. getting a divorce and each moving away (and would have no more use for the sailboat). We’d hate to give it up. In the last couple of years. Although I do think there ought to be some consideration for the two years you had use of the boat. Abby really loves that boat. I don’t see how we could buy a boat or even a half-interest in a boat for what we put in on this one. Don: Wow. Chloe and I would like to take the sailboat with us. When Lacey found out that his employer was transferring him to another city farther down the coast. It 130 50 Practical Negotiation Tactics . I think Chloe and I would be willing to pay more than just the money you guys put into it. Lacey and Chloe didn’t know that Don and Abby were. I don’t know. The two couples used the sailboat a lot the first couple of years. and we need to talk to you about how we can buy you guys out. Don and Abby now use it less and less. Lacey: Don. but it is not a good idea to exaggerate what you are offering or what you are giving up. Lacey. Example 1 Don and Abby went in on the purchase of a sailboat with their friends Lacey and Chloe. boat prices have really gone up. he and Chloe wanted to buy out Don’s and Abby’s interest.Tactic 32: Don’t Exaggerate It’s always acceptable in negotiations to put your best case forward and present your position vigorously. Such exaggerations are easily revealed or uncovered. and they will weaken your credibility. Don: Absolutely. in fact. but Don. together and separately.
and I’ll get back to you. 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. Abby: That boat. Let me talk to her. Abby: Well. It’s about time now for some major investment. After all. It just reminds me of how happy Don and I used to be. and neither of us put much in for upkeep. If Don had not exaggerated the importance of the boat and dealt with Lacey honestly. Don. and we’re moving farther south. (After Lacey and Chloe had a chance to talk. Chloe: Oh. We’ll be leaving here for the Midwest. I’m surprised by your attitude. Lacey: Cut it out. which you would have to share if you want to retain half-ownership. Abby is having this conversation with Chloe) Chloe: Abby. I was afraid something was going on when you all-butstopped joining us on the boat. Don and I are getting a divorce. (Around the same time. big news!! Don got his promotion. Abby told Chloe about the divorce and about how she never wants to see the boat again. Don: Lacey.) Lacey: Don. though it’s not so happy. the boat has depreciated.is just about the most important thing we own. I think it would be fair to pay you and Abby half of what you originally put into the boat for your 50% share. I’m sorry. I thought you understood how important this boat is to Abby. but separately. I have big news too. Applying Pressure 131 . he likely would have found himself in a stronger negotiating position. I’ve been thinking. Lacey and Don’s negotiations changed considerably. I’ll be glad never to see it again.
but this has been such a crazy situation.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. they will make their decision based on a review of the stock price that day. we will need to make drastic cuts in our operating costs just to survive. the company president decided to use the stock price as a negotiating tool during the current union contract talks. I’ll have to show them 132 50 Practical Negotiation Tactics . I’m telling you the stock price is having a huge impact on us already. I think you’ll have to agree with me that wage increases in this next contract will not be available. 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. Company president: Well. I’ll be looking to you to make some major wage concessions on this upcoming contract. Here’s how these negotiations went: Company president: Well. I read in the papers every day that the market is still strong. And as you know. and that the economy is strong. in fact. And while these fluctuations have little to do with the health of the company itself. in this global market. the situation in the stock market is not good. Telling me there’ll be no wage increase and asking for wage concessions now is a little premature. I’ll be going back to them as soon as next week. I can’t see how today’s numbers really impact the long-term profitability of this company. Union negotiator: The stock price might be down right now. The current stock price is the lowest it has ever been. I’m afraid that with this current information.
So. If you put it that way. Company president: All right. and the union ended up with a substantial increase in their contract. Union negotiator: Well. Company president: What? I thought you understood that it is essential that we get concessions on this if we want to stay afloat. the union checked into the Letter of Credit transaction with some experts in banking.that we’ve cut expenses to counter the losses in the stock market. but your proposal to cut wages is just not going to fly. the company’s position was weakened even more. but I checked it out and it’s not totally true. Conclusion Because the company’s president over-emphasized the impact of the market on the company. okay. we’d like to reopen talks on next year’s pay increase. (In the interim. they would do a thorough analysis and look at the health of the company over the long haul. and I’ll have our people look at it. Applying Pressure 133 . he lost the trust of the union. The union became hardened in its position that the employees needed wage increases in the new contract. We think this company is very healthy and can withstand the temporary downturn. If the stock goes up next week. Union negotiator: I know that’s what you told me. here’s what happened. When the market took a swing up during the negotiations. Let’s get back together next week. Give me your proposal for wage concessions. no concessions! In fact. They told union officials that it would be very rare for a bank to make its decision solely on stock price.) Union negotiator: I’m sorry. this week’s price would have little or no effect on your ability to get a Letter of Credit from the bank. let’s talk about it. When negotiations resumed.
I called Charlene and she was available. but you always run the risk of having the opposing party call your bluff and end the negotiations without reaching agreement. She knew that if she made such a demand and threatened to leave him unless he made a commitment.Tactic 33: Bluff! Bluff with caution. either. you will have lost credibility with your opponent. Christy thought that their relationship was exclusive: She hadn’t gone out with anyone else. and I really wanted to see the new Lenny Bruce movie. yeah. so their “free” time was very limited. I guess I’m just surprised. Here’s how the discussion went: Christy: Tom. Example 1 Christy and Tom had been dating for about a year. 134 50 Practical Negotiation Tactics . but I really am. are you? Christy: I don’t want to be. I really hate it that you chose to see the movie with Charlene. You’re not upset about that. I knew you had a class. If one party threatens to walk out of the negotiations if a demand isn’t agreed to. Charlene. they are bluffing. Sara said she saw you at the movies with Charlene yesterday. and they really have no intentions of doing so. Christy was surprised and hurt when a friend of hers mentioned that she had seen Tom at the movies with his former girlfriend. Tom: Oh. Poker players know all-too-well-that bluffing can be very costly. but Christy thought the relationship was heading in that direction. We don’t have that much free time together. This can come back to haunt you. and she didn’t think Tom had. it might backfire. The couple had not discussed marriage. There is a chance that the tactic will work and that both sides will agree to the proposal on the table. If you subsequently agree to begin talks again. Christy realized that asking for a commitment from Tom at this stage would be a very serious discussion. Both of them were still in graduate school and worked full-time.
Actually. Tom: I have friends of long standing who are women. I won’t go out with any woman friend. Christy: I just can’t see it that way. I’m not “dating” anyone else. She convinced Tom that her feelings were strong. Tom: You’re serious? It’s that important to you? Christy: Yes. Tom: Okay. so he didn’t call her bluff. Applying Pressure 135 . It really wasn’t a “date”—we just saw the same movie together. Christy would have had to decide whether or not she was indeed bluffing or if she would really end their relationship. he had to make a commitment or risk losing her.Tom: She’s a friend who happens to be a girl. I just thought of her because I knew you weren’t available. If that’s not possible. He believed she was sincere. The union negotiators. Since he wasn’t sure about that. then I’m afraid I want us to stop seeing each other. I need to have your commitment that you won’t do that. and at first he thought she might bluffing. if you can’t make that kind of commitment. I’m willing to risk losing you. It’s made me realize that I want us to have an exclusive relationship. Example 2 Nexon and its union had been negotiating a new contract for the past couple of weeks. Going to a movie with one of them to me is the same as going to the movies with one of my male buddies. she paid her own way. but very little progress had been made. It is. Conclusion Tom didn’t want to lose Christy. If Tom had “called” Christy’s bluff. 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.
This is something we just have to have. Second. Nexon: I’m just not prepared to give you one. Union: You don’t seem to understand. Nexon negotiators did not believe that the workers would actually strike this early in the negotiations. First. then all of our other demands will change.believing that Nexon would not risk a strike. We need some agreement on this today. Here is what happened at the next negotiations session: Nexon: I’m sorry.) 136 50 Practical Negotiation Tactics . Nexon: I’m sorry. Nexon: We’ve got lots of issues to discuss. Many of our union members who are working part-time hope to work full-time. We need an answer today. but working without benefits is simply not acceptable. or else we’ll be asking the membership to strike. Why don’t we put this one aside for now. The union members ended up voting not to strike at this time. 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. This is a critical issue to us. we’re really prepared to go the distance on this benefits issue. (The union negotiating team left the bargaining session and called for an emergency meeting with all union members. much less today. and try and reach agreement on the cost-of-living increase you’re proposing? Union: No. it will cost too much. If we’re not able to reach agreement on this. Union: You’re wrong. but the company cannot offer the same benefits to the parttime workers as it offers to the full-time workers. And I don’t believe you’re going to go call for a strike over this. we want the part-time workers to apply for and fill fulltime positions as they become available. Another bargaining session was scheduled. We’re not going to reach agreement on this at all.
Union: Okay, we’ve decided to put aside the part-time benefits issue for now. We’d like to discuss the cost-of-living request today. We’re looking for a 5% increase for all employees—full-time and part-time. Nexon: I’m afraid that a 5% increase is out of the question. Inflation has been very low this year, and we’ve certainly not increased our prices by 5%. We’re only in a position to offer a 2% increase, and we believe your membership will accept that. Union: 2%?? Are you crazy? Our people will never accept that!! They’d sooner strike!! Nexon: Fine. Ask for another strike vote and get back to me. Union: Wait, wait. Let’s be reasonable.
Negotiators for the company knew the threat of a strike was only a bluff, because the union did not have member backing. When they tried to bluff the first time and failed to convince the members to strike, their ability to successfully bluff again was lost. They had a very difficult time in the subsequent negotiations, because Nexon was able to call their bluff numerous times.
Tactic 34: Control the Forum with Visuals
Some tried-and-true strategies used for meetings and presentations can also be effective during negotiations—particularly those that help you get your points across to the other party. Even the best negotiators have trouble keeping a discussion focused, which is why they make good use of visual aids. In many situations, including negotiation sessions, a person or team is trying to communicate ideas and persuade others to accept their position. Maintaining control of a lengthy discussion and keeping everyone focused on one’s presentation is often difficult, but it is critical to successful communication and persuasion. This control of the “forum” or general discussion, if attempted solely by dialogue or handouts, can be difficult for the best negotiators. Thus, a tactic that will help keep the discussion focused on one’s arguments and presentation can be extremely helpful. An easel and flipchart, a chalkboard, or a PowerPoint presentation can be very effective in controlling a forum. By only showing one part of a presentation at a time, you can focus everybody’s attention on one page of a flipchart or one slide (or even just one line of text). People won’t be able to flip through pages or discuss other parts of a handout (this often occurs when the entire proposal is given out at the start of a session), and the presenter won’t lose the audience’s attention. It is also more difficult for people to go back to earlier parts of the presentation, because the text no longer appears on the screen or flipchart. A negotiator who presents new proposals or information with well-developed visuals can more easily control the forum or focus of the group discussion.
Dinnertime at the Gronefeld house was usually loud and chaotic. The parents and six children had dinner together most evenings, but it was understandably hectic; multiple conversations were going on at the same time. One night, Aime (age fourteen) tried to present an argument about allowances and the division of chores among the children. Constant interruptions from other children and a general inability of all eight people to follow one dialogue simply caused her to give up her
50 Practical Negotiation Tactics
idea. The next night, however, Aime came prepared with a piece of construction paper and a gavel she had removed from a plaque in her father’s office. On the construction paper were three columns: Person; Chores; Allowance. The written specifics were covered up with pieces of construction paper. After everyone took their seats at the dinner table, she banged the table with the gavel until all were silent. “I have a proposal for a new division of chores and new allowances,” she began. “Please let me explain this one person at a time, so we can agree on that person’s chores and allowance, and then move on to the next person.” Aime now had everyone’s full attention, because they were curious about what was covered up on the chart. Aime had sucessfully focused everyones attention on her chart. The parents, impressed by her work and specific proposals, agreed to her suggestions with only one change. Person Chores Allowance
Aime realized that she would never achieve her goal unless she could command everyone’s attention and focus the dinner-table talk on her concerns. She was able to control the dinner forum with a gavel and a chart. The key to her success was that she unveiled only one line at a time, thus focusing the discussion and reaching agreement on each child. This stopped the confusion.
A committee of three members of a governing board of twelve people is responsible for developing and presenting the annual budget recommendation for
the organization. A majority of the board members must vote for the proposed budget for it to become effective. Past committee meetings dealing with the proposed budget have been chaotic, long, and usually heated. The typical format for the meeting is for the chair to hand out a copy of the entire proposed budget at the start of the meeting, quickly provide an overview, field questions, and then try to negotiate for the seven needed votes for passage. Steve, one of the budget committee members, has decided to try a new approach: focusing discussion on one budget at a time to prevent people from discussing several items at once. Steve: Ladies and gentlemen, to help us review this budget proposal in an organized fashion, I have outlined it on the pages of this flipchart. Each section of the budget appears on a single page. I’ll go through it one page at a time. Please ask questions only on that section or page. This will keep all of us discussing the same budget issue. Agreed? Board chair: Does everyone agree to this proposed budget-review process? All in favor say agree, opposed no. Seeing no opposition, it passes. Steve: Let’s begin with the capital budget for the Fifth Ward … Allan: Steve, I have a question about this year’s budget for health insurance … Steve: That’s Section 7 on page 7 of the flipchart. Allan, please hold your question until we get there. We will review and discuss all of these items one at a time, in the order they appear on the chart.
Although several sections of the budget proposal sparked spirited debate, Steve was able to control the discussion and focus the meeting on one issue at a time by effectively using a visual aid. The meeting was much shorter, more productive, and less acrimonious than in prior years.
50 Practical Negotiation Tactics
Since the heating and air conditioning company held no leverage over him. his air-conditioning unit went out. If the employer is a shipping and express mail company. its union has the advantage in the weeks just before Christmas. Since his toilet had overflowed and water was continuing to run all over the floor. The same kind of thing happened a couple of years before that: In the middle of August. because this is the busiest time for that industry. there were times when there was no pressure and no emergency. Try bargaining with a plumber! This homeowner. 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’s easy to prediet the outcome in collective bargaining talks if one side is clearly in a very favorable position. He was at the mercy of the company that could install an appropriate unit the fastest. The owners of professional sports Applying Pressure 141 . not blessed with many household repair skills. Many companies sell “tune ups” and routine seasonal checks to keep their people busy all year. It is sometimes referred to as “pressure bargaining.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. he was able to successfully bargain for other services. while the other is not—that is. when one side has “leverage” over the other.” Example 1 We have all been at the mercy of someone who uses pressure bargaining. for example. Unions can strike at any time to achieve their goals if they have some leverage. On the other hand. once had to call a plumber in for emergency repairs. such as the advantage of time. the guy was in no position to dicker over the price of the repair. and was forced to pay whatever they demanded. Example 2 Let’s face it: Sometimes one party holds all the cards.
she has leverage and can more likely hold firm on her price. can suffer repercussions in the form of sabotage. then you are in a position where you can set reasonable demands on wages. Many labor contracts were agreed to when unemployment and inflation were high and employees felt pressured to accept the demands of the employer. either individually or through collective bargaining. This gives it the upper hand in negotiating with employees. but they are less willing to negotiate several months ahead. however. he didn’t have to be flexible because the employees believed that they had no alternatives. If you have a special skill that an employer needs and few others have that skill. (Team owners are notoriously unpredictable. Other employers find themselves in situations that actually reverse the leverage (when. low employee motivation. for example. if the unemployment rate is high and jobs are few.) The leverage of supply is also very powerful: If a jeweler has an exclusive contract to sell a ring everyone wants. What goes around comes around. consider whether or not the two parties will likely meet again in the future to negotiate. The employees had no power to resist the demands of the employer. unemployment is low and jobs are plentiful. it is the union’s turn to hold firm on its demand). If so. will what goes around come around? 142 50 Practical Negotiation Tactics . etc. When one side places undue pressure on the other side. benefits.teams are generally more vulnerable to pressure from the players’ union several days before the season begins. the employer has the advantage: a supply of jobs. there are likely to be long-term repercussions. 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. When the employer proposed adding duties to the job classifications. Employers who refuse to give in on issues of high importance to employees and exert pressure on unions to accept their terms. and other undesired outcomes. On the other hand. but before you choose such a tactic. despite strong resistance.
This time.) Applying Pressure 143 . Their dad tried to reason with them. but use this tactic judiciously. Just share the doll. Consider making a suggestion or a proposal that completely surprises your opponent. They stopped for lunch at a fast-food restaurant and shared a children’s meal that came with a small doll. the fighting starts up again. Andrea: Okay. Susie: Okay. and I can’t stand it. Tell Susie to let me have it. the girls had been fussy.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. The doll can be shared. I took it out of the box. Just because you saw it first doesn’t make it yours. Susie: The doll belongs to both of us. You’re driving me nuts. Almost from the beginning of the three-hour drive. the argument is over the doll’s shoes. and here’s how the “negotiations” went: Dad: You two stop fighting. (Their dad pulls to the side of the road and turns to face them in the back seat. Andrea. Example 1 A father and his two daughters were on their way to visit the grandparents. About an hour into the drive. I can’t drive if you keep this up. and Susie. and Susie hid them under the seat.) Dad: Stop it right now. Why? A sudden surprise can disrupt the dynamics of a negotiation. Mom said so. (In a few minutes. We’ve got a long ride ahead of us. you have it when we drive home. Andrea: The doll is mine. the little girls began to fight over the doll. you have it this part of the trip. because you will probably only get to use it once. Andrea had taken them off the doll.
She can have them later. Both Andrea and Susie were so shocked by their dad’s action. Dolly doesn’t need shoes on in the car. Dolly has to have her shoes. The auditor’s job was to make sure that tax dollars collected for the local education system were appropriately handled. I want the shoes. The auditor asked to meet with the editor to explain his position. to no avail. The tactic was so successful. Dad tried correcting them a few more times.Andrea: Give me the shoes back. I think I have acted properly. Finally. He initiated the litigation against the local school board members and several banks that invested the money for the board. and reached back for the doll. 144 50 Practical Negotiation Tactics . Conclusion Dad’s use of a “surprise” tactic was extreme. he slowed down. The litigation itself had been going on for more than three years. they didn’t say another word. that they never fought over a toy in the back seat of the car again!! Example 2 The editor of a local newspaper was planning on writing an editorial critical of a locally elected auditor who had filed a very nasty lawsuit. The local newspaper was prepared to urge the auditor to end the litigation. Susie: Daddy didn’t say anything about the shoes. (They continued to argue and whine and pinch each other. in fact. and that they had invested and spent the tax dollars wisely. Here’s how the meeting went: Auditor: I appreciate a chance to talk to you about this litigation. so it was worth the risk. The defendants contended that the auditor’s actions were politically motivated. Daddy said I got the doll on the way to Grandma’s house. He grabbed it and threw it out the window. at great expense to the auditor’s office and the school board. but nothing else up to that point was working.) Dad: Now there’s no more fighting over the doll. charging that they breached their duty in their handling these funds. and I hope I can convince you of that.
From what I can see. this case needs to be dropped. perhaps you should just cut your losses—and just drop the suit. but actually superior to some other entities you supervise. the bank would not have done that had we not proven our case. We believe the other defendants will soon follow suit. 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. Auditor: I appreciate their arguments. Editor: Well. rather than drop the case. I guess we’re finished here. there’s just nothing to back up your allegations. They are very persuasive that this is just a political battle. Here are the papers. Thank you for coming in. Your reporters will probably want to follow up on it. They’ve been making that same argument from the beginning. This morning. Editor: (surprised) Really? They settled? This is public information? Auditor: Yes. Obviously. one of the banks settled with my office. The school board members make a very good argument that their practices regarding how the funds were expended are not just adequate. but recommended that the parties reach a settlement. and it is costing your office money and good will. Applying Pressure 145 . That’s really the reason this has gone on so long. Auditor: Well. The auditor successfully used the element of surprise in announcing the settlement and thus changed the direction of the editorial.Editor: I’m certainly willing to listen. Conclusion The editor wrote an editorial urging a resolution for the good of the community. I really think the community would be better off. as a matter of fact. and a significant amount of money will go toward the tax fund. I think I have something here that will convince you otherwise. but I have to warn you that from what I’ve seen and heard so far. Editor: Well.
night after night. Mike knows he needs to get either his wife or his son on his side. although getting your license and getting a pool table are connected. 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. Dad. 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.Tactic 37: Divide and Conquer Certain negotiations lend themselves to a divide-and-conquer tactic. Example 1 Tina’s husband Mike wants to buy a pool table for their family room. but I think it will get a lot of use. they’ll be mobile! The last thing I want is for them to be out cruising around. Kevin is against it because he is turning 16 years-old soon. try to focus on that subject or address that member directly to get them to be more amenable to your proposal. Tina: I’m really against this pool table idea. I can remember spending hours playing with my friends and family when I was growing up. and a car is more important to him than a pool table. Kevin: I don’t really care about a pool table. If the other side involves more than one person. I want to talk about a car! Mike: It’s really not one or the other. especially Kevin. you might be able to dilute their power by identifying their different interests and addressing them separately. Mike: I know. Kevin: So am I. Tina and their son Kevin are against the idea. I’d 146 50 Practical Negotiation Tactics . Tina: What do you mean? Mike: When Kevin and his friends get their licenses. I know we’ll all enjoy it.
only Kevin did. the head of the union negotiating team. don’t you think you guys would use it? Kevin: I guess so. received it without comment. who was studying the company’s financial records for the team) became uncomfortable when he heard Tom’s demand. A pool table could attract them here. Tina: Well.like them to hang out here more. she joined his side of the debate. Instead of both opposing the idea. and Kevin and his friends use it often. They bought the pool table. Once Mike convinced Tina of the idea’s merits. Wylma: Tom. She noticed that Jim (another member of the union’s negotiating team. What happened? Applying Pressure 147 . And I really do need a car! Tina: Do you really think the guys would use it? I would rather have them here than out getting into trouble. Mike: I really do. then maybe it’s not such a bad idea. Example 2 Negotiations on a new union contract seemed to be going quite smoothly. has just presented the company’s initial wage offer. I’m surprised. the chief negotiator for the company. Kevin. 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. A number of contract changes have already been worked out and Wylma. But I’m not going to hang out here all the time. Conclusion Mike found an argument that divided Tina and Kevin. some. Tom. Here’s how the negotiations went. I thought we were making real progress.
Tom: We don’t think so. I think you need to rethink your demand. But Tom. This is just what we think is fair. Tom had reduced his wage demand significantly. 148 50 Practical Negotiation Tactics . forcing them to reconsider their demand. Wylma: Tom. Your demand is totally unreasonable. you’ve seen our sales projections and production costs. Do you think this is reasonable? Jim: (looking uncomfortable) Well. Right. you certainly are aware of our financial situation. Conclusion Wylma’s appeal to Jim’s knowledge of the actual financial situation of the company worked to divide the union’s negotiating team. as Jim can point out to you. Wylma: Jim.) Wylma: Now Tom. these are our actual accounting figures. Jim? Jim: Yes.Tom: Wylma: Nothing happened. Wylma: Let’s take a break. Wylma distributed copies of financial data that showed the company’s current condition. these are accurate. When the negotiations began again. (When they resumed. but he added some workplace changes that Wylma was comfortable negotiating. you’ve heard our demand. Let’s start again tomorrow morning.
Madison: Okay. so you can find a way to quickly neutralize it. the oldest and youngest Jones children. but it should never be at anybody’s personal expense. I want to say something. You are almost 40 years old. so what’s the point? I don’t need another tie! Madison: It’s not the gift. I know that you all think I’m silly about wanting to exchange Christmas presents among the adults. get over it. especially between Madison and Cory. That will just make a bad situation worse. Humor often works to break the tension of the room. We can’t afford to buy each other things we really need. and had children. 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. When all of their children were small. so pressure grew to draw names and exchange gifts. Ever since Mom and Dad died. Cory: Madison. some of the siblings decided they liked giving presents to one another. and it makes me very sad. it was easy to agree on just giving presents to the children. but as the children grew up and had families of their own. It was a tradition in the Jones family to spend Thanksgiving dinner arguing about how the family wanted to celebrate Christmas. but the thought that matters. 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. Tempers flare and people say things they shouldn’t out of anger or frustration. I don’t feel Christmas in the way I used to. but it is really important to me. Applying Pressure 149 . Example 1 The four Jones kids grew up. Sometimes the argument got heated. married.
You can say that, but everyone is disappointed when they receive a cheap gift, even if they won’t admit it! Madison: Why are you being so stubborn? You’re just ruining everything! Cory: (also emotional) Look, if you have to receive presents in order to feel that it’s Christmas, we can all just give you presents! Madison: (without hesitation) Okay! I can live with that!! (Everyone laughs.)
Madison’s quip diffused the emotions of the parties. Cory, while very angry, was surprised by Madison’s answer, and was able to laugh. With that, other family members joined in the discussion and they agreed that those who wanted to participate in the gift exchange would. Those who didn’t, wouldn’t.
Jay believed that the new home-theater system he bought was a lemon, but he had very little success in getting the salesman to take responsibility. The salesman agreed to have every complaint looked at by a service technician, but the technician always gave the system a clean bill of health, which infuriated Jay. Jay finally asked for a meeting with the store’s owner, fully intending to leave the meeting with a full refund. Jay: Mr. Owner, I’m very serious when I say that I will not keep this system. It is a lemon, and you know it. Either the sound or the DVD or the picture is always off. Owner: Now Jay, there are some problems with the system, but nothing we can’t fix. Let me turn it over to my best technician, and he’ll be right over to fix it. Jay: We’ve been down that road already. The system has been on the blink 20 out of the last 30 days.
50 Practical Negotiation Tactics
Owner: You’ve had a loaner TV/VCR while yours was being worked on. We’ll be happy to loan you one again whenever you need it. Jay: (becoming annoyed) That’s not the point. I bought a new home theater system and I want to use it! I’m very frustrated by your attitude. Temporary fixes aren’t good enough. Owner: Well, we are attempting to fix the system. You’re the only person who’s had this kind of trouble with one of our new ones. Maybe you’re just having “buyer’s remorse” and really don’t want the system anymore! Jay: (very irate) I can’t believe you said that! This system is a lemon, and you’re trying to blame me! What a crock! What kind of business are you running here? You’re a bunch of crooks. Owner: (now also irate) Just hold on there! I run a respectable business, and I resent your attitude. We’ve bent over backwards to check out each of your complaints, none of which were found to be major defects—just things that needed adjustments. Jay: (very angry) That’s not true. The surround-sound speakers never work at the same time. You don’t call that a major defect? Owner: (realizing he needed to break the tension) Well, my 30-year old Sony TV only has one 3” speaker, but I still watch it. Jay: (pausing and calming down) Yes, my first TV was a Sony. Owner: Look, I’m sorry we’re at this point. Let me take this to my top technician and your salesman, and we’ll fix it. Give me one day. Jay: Okay, but just one day!
The owner used a joke to interrupt the angry negotiations that were going nowhere. He exchanged Jay’s surround-sound system for another new model. The system Jay rejected was sold as a “used” one and never came back in for repairs. Jay’s new system worked fine, and he ended up becoming a repeat customer.
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Stage 6: Making Progress
aking and reviewing proposals and counter proposals will not always close the gap between the two parties’ positions and gain a settlement. Progress might be made, however, by invoking a certain tactic at a critical time, particularly Tactic #39 (Compromise). Often believed to be the key to successful negotiations, compromise is not giving in; instead, it is the ability of a negotiator to prepare a settlement that represents some concessions on the part of each side, but that will also help gain a proposal that is acceptable to both parties. Other key tactics that can move the negotiations to a settlement include the presence or use of an unexpected friendly personality to disarm an opponent (Tactic #40: Be Friendly!) Bringing to the table a person who is highly respected by the opposing team is a good move; such an individual might be able to gain their confidence and support your position (Tactic #44: Make Use of a Positive ‘Halo Effect’). One tactic that never fails is the classic Split and Choose (Tactic #42), which goes like this: One side divides the item into two parts, and the other side gets to choose which part they prefer. Parents have used this tactic to divide the last piece of pie or cake between two kids for decades! Additional key methods that move things along include the chilling effect of one party unexpectedly tape-recording meetings (Tactic #41) or presenting facts (Tactic #45) that unexpectedly support their position. Experienced negotiators also achieve progress by asking probing questions (Tactic #46), which can reveal or point out flaws in their opponent’s position or by using a period of prolonged silence right after a heated exchange. Experienced negotiators often achieve a final gain in a settlement by nickel and diming (Tactic #43) over small items.
C. or maybe tomorrow.” Can I color now? You said we would color later. Julie wanted to play “dress-up. Both of the little girls liked to play ball when they were outside. If there is resistance to compromise. When that point is reached.” but she needed Dara to play with her. The day-care worker wanted to take them outside for a while so that he could visit with his friend. Isn’t it “later” yet? Right now would be a good time to go outside. but since the other children in their room were not there. was ready to color. who was outside with older children. and that doesn’t happen without compromise. they were the last children left in the playroom for the remaining two hours of the day. each side must decide whether or not one more compromise will produce an agreement that they will later regret.” Dara. Mr. At some point. Dara.: Julie: Dara: Julie: Girls. how about going out to the yard for a while? You can swing or play ball. the exchange will be between things of equal value. If I can be the Princess. Example 1 Julie and Dara both attend a local preschool. Okay.: Julie: Dara: Mr. the individual might be afraid that the exchange isn’t equitable). 154 50 Practical Negotiation Tactics . I want to play “Prince and Princess. however. I want to play “Princess” and I want Dara to be the “Prince.Tactic 39: Compromise Negotiations are successful when all parties walk away with an agreement they are satisfied with. One day. don’t you want to play? We could color before your mom comes. (In a successful negotiation. C. Then we can color. they would have to play ball with older children. 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. not the Prince. it is better not to compromise.
The owner decided to try for a variance. When his variance application was made public. They were also concerned that teenagers would congregate outside the theater at all hours and there would be more litter and trash around the mall’s parking lot. They did all the compromising they were willing to do. failed to offer the children something that was as important as the plans they had made. and teenagers attracted by Making Progress 155 . the parking lot will start to look trashy.” No. The neighbors: The neighborhood has four concerns: Theater patrons will be taking up scarce on-street parking spaces. the owner had to supply additional parking. Mr. however. 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. or apply for a variance. neighbors became concerned about the changes to the mall. The owner and a small group of neighbors met to talk about these problems. Example 2 The owner of a small strip mall in the heart of a residential neighborhood was planning to add a small movie theater to the other businesses in the mall. The existing parking lot didn’t meet the current parking standards for that size theater. Conclusion The children stayed inside and played dress-up. We want to play dress-up and then color. C. there will be an overall increase in traffic coming through the neighborhood and vehicles will be turning into and leaving the parking lot. C. you can come back in and play “Prince and Princess. wouldn’t you like to go outside first? After you swing for a while or play ball. According to the city’s zoning laws. We don’t want to go outside.Mr. and they still had time to color.: Julie: Hey.
The neighbors: Owner: 156 50 Practical Negotiation Tactics . only when that lot is full would cars come around the mall and park on the south side. driveways on the south side of the mall are along the east and west side of the parking lot. You could have all of the traffic enter from the north lot. In fact. the closest parking to it is along Elm Street. So. I could put a privacy fence along the east and west—at the backs of your yards. not having direct access to the south lot from the street would be unworkable. Many of our homes back up to that lot. and break in his door. With the Comedy Club and the grocery store on that end. Right now. The fence would shield neighbors from the lights from the vehicles and block the walking access through the alley. And. I’m afraid. We hope you’re right. All a patron has to do is park on Elm and walk beside Joe’s yard through the small alley there. Right now. We’d really like to block off that cut-through and have the theater face the south. lights in and out at night can be very annoying. Not having in and out traffic to the south of the mall is just not very practical. the north lot is used more. and we’d like to keep it that way. with your plans to put the entrance of the theater on the east side of the mall. We’re just not convinced.the theater will start to hang around and maybe wander around our yards at night. but it’s not ever full. Owner: You know that there’s always plenty of parking in the south end of the mall’s parking lot. as you said. I’m certain the lot will accommodate the theater crowd without increasing the parking on your neighborhood streets. if I agree to move the theater entrance to the south side. We’d like you to prohibit cars from entering or leaving from the south lot. What if I changed the entrance to the middle of the lot? That way. the south parking lot has not been used much. even though I’m not adding any parking.
Making Progress 157 . the neighbors reported that they were very happy with the way it all worked out. If I agree to move the theater entrance to the south. Teens can form into gangs if left unwatched. set back a driveway width. there could still be access from the street to our garages—just not to the main parking area.The neighbors: Owner: The neighbors: Owner: But we use those side drives to get to our garages. however. If the fence was set back the width of a driveway onto your property. add a new entrance into the south lot. And a year after the theater opened. Conclusion Both sides had to give up something on certain items in order to reach agreement. The fence would help with the vehicle lights and buffer this noise from the kids who hang around. The compromises were what everybody could live with. Now you’re talking about considerable expense. but the privacy fence has to be landscaped so that it doesn’t look like a ghetto wall. and make sure the parking lot is kept clean. Agreed. But you’re going to have to have some kind of security as well. then will you agree not to push for increased private security? Yes. The fences created a buffer from the lights and noise. and they discouraged patrons from parking on neighborhood streets. put a privacy fence along both the east and west sides of the south lot.
m. Joan was already pretty tired. respectful. 158 50 Practical Negotiation Tactics . Close your windows at night and don’t listen. She didn’t believe her neighbors ought to complain about the barking.Tactic 40: Be Friendly Being polite. Lonely: If you’re here to complain about my Rocky. They might even start to underestimate your negotiating skills. Joan decided to at least try and talk to the neighbor. She sought advice from the family on the other side of the neighbor with the barking dog to see whether this 3:00 a. and because she was hard of hearing. just forget it. your friendliness might disarm and relax them to the point where they begin to talk about their priorities and objectives.. they had gotten nowhere. because you are the one to set the tone for agreement. This gives you an advantage. Joan: Hi. but be friendly. If your opponent is aggressive or angry. Present your position forcefully. I’m Joan. but going out of your way to be friendly is an especially helpful tactic.m. She learned that everyone in the neighborhood had complained at least once. and started to get upset. and I just moved in next door. Mrs. Example 1 Joan was new to the neighborhood. Mrs. Your opponent might give in readily. and that as angry as they were. Lonely. The dog was Mrs. Joan had a new baby. she just didn’t think it was a serious problem. incident was usual or unusual. 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. and what kind of complaints might have already been made. professional. thinking that you will be just as easy to work with on the sticky issues.m. and sleeping at night was already a difficult proposition! When the neighbor’s dog began to bark at 3:00 a. Lonely’s only companionship. so her neighbor’s barking dog came as an unpleasant surprise. and pleasant always enhances one’s ability to reach an agreement. and didn’t stop until 6:00 a.
not at all.) Hi. Lonely: Joan: No. though. I’ve only got my Social Security. He’s a real comfort to me. How long have you had him? Almost eight years now. Lonely: Joan: Mrs. I might have to talk to you about Rocky. isn’t he cute! He’s a handful. Mikey. He’s been keeping me up at night. Here’s my little angel. I know that some of these people around here don’t like him. it’s probably because they just haven’t had the time to get to know him. Lonely: Joan: Mrs. I sure hope he starts sleeping through the night soon. Lonely again. I need to get the baby home. I guess that would be okay. Well. When he does. Making Progress 159 . I guess so. My friend wouldn’t charge anything for talking to us about Rocky and maybe giving us some advice. I’ll see you. I stopped by and visited with him over the fence this morning. then. No. Why. no.Joan: Mrs. I’ve got a friend who is a veterinarian. and I’d like to have him stop by and look at Rocky—would that be okay with you? Well. don’t worry about that. too. sure. by the way. Who. I’d like to introduce you to my new baby. (Joan’s sleep was disturbed by another night of barking. Do you think his age has contributed to some of that? You know. is a really sweet dog. The barking at night has been mentioned to me. Maybe I could come back tomorrow and bring him? Oh. but she took her baby and went to visit Mrs. I can’t pay for something like that. Well. Lonely: Joan: Mrs. I just wanted to come by and introduce myself. Lonely: Joan: Mrs.
U.Conclusion Joan’s friendly approach enabled her to understand Mrs. you would have. When he heard the news on the radio. Lonely’s needs and arrive at a workable solution to the problem.A. The barking all but stopped. its 150 management and sales employees could continue to work in Happy City. Joan took up contributions from the neighbors. Example 2 Company ZZZ planned to close its manufacturing plant and lay off 300 union employees. Here’s how the meeting went: Company ZZZ: We’re very sorry. recognizing that the layoffs would be an issue in upcoming local elections. agreed to meet with the mayor. the mayor called and asked for a meeting with Company ZZZ officials. It’s very difficult to make a move of this type without having it leak out. Lonely didn’t have to pay for the medicine she could not afford. 160 50 Practical Negotiation Tactics . that’s very understanding of you.. They anticipated that it would be an unpleasant meeting. Lonely and Rocky. I think that if you could have let me know ahead of time. he prescribed medicine that gave Rocky a more regular sleep schedule. 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. Under its new corporate structure. Company ZZZ. After Joan’s veterinarian friend visited with Mrs. Mayor: (very friendly) I understand how these things happen. that the press got hold of the story of our company’s activities before we could call you to let you know. Hearing about this from the press obviously puts you in a very embarrassing situation. of course. and Mrs. overseeing a factory in Mexico and selling products in the states.S. Company ZZZ: (surprised) Well.
Company ZZZ: I’m not sure what to tell you on that. This strategy worked. They need a really good deal on the plant price. Mayor: Great! Let me know when we can talk again. the city has a potential buyer for your plant building. Conclusion The mayor’s strategy was to disarm the company with his friendly attitude and in return get a favorable response to his proposal to buy the property in question. and I want them to know that. 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. Unfortunately. Would you be in a position to talk to me about such a deal. The buyer is a “disadvantaged business” we have been working with for some time. We recognize that your new corporate owner is a large company located in Malaysia. Making Progress 161 . or would we need to involve the Malaysia group? Company ZZZ: Certainly. You’ve been very understanding about this. so we need to understand how we can affect their decision on keeping an office here.Mayor: I wanted to meet with you so we can take the necessary steps to keep the 150 jobs here. It’s possible that some of the 300 laid-off employees will find work at this new endeavor. and the mayor was reelected. the 150 management/sales jobs did end up moving to Mexico. By the way. Many laid-off employees did indeed find new jobs at the plant. 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. The mayor was able to broker a deal for the “disadvantaged business” to buy the plant and convert it to a different widget maker. because I’d hate for us not to make an appropriate pitch to them. Mayor: Please let me know as soon as you can.
who was disappointed to hear that she might propose such a deal. They might worry that the tapes will be made public or given to others. Susan repeated her demand.00 to spend.00. The two sisters had saved up a little money so that they could buy souvenirs. and Alexis. The effect on the other party might be even more substantial if lies. this time in front of a hidden recorder. Conclusion For the first time in her life. Alexis knew this was not fair. the accused. age 15. Alexis then played the tape for her father. She agreed that her proposal was not fair and that she had tried to take advantage of her younger sister. Susan denied it. She borrowed a tape recorder so she could ask her father if this was a fair deal. 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. age 14. the younger sister. were on vacation with their parents in Myrtle Beach. 162 50 Practical Negotiation Tactics . or used to pressure the other side to agree to certain demands. until Susan said they would evenly split what they bought. Somehow. had $40. Example 1 Susan. Then he played the tape.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. threats. Jones’s supervisor. Alexis agreed. He asked his elder daughter about the arrangement. Michael Wood. Fred Adams. South Carolina. but Susan had only $20. Alexis. are talking about a possible settlement of the issue. the investigator. Susan wanted to negotiate with Alexis to “pool” their money so they could buy something together. Susan understood the impact a tape recording can have when it reveals a lie. and Jones. or simply “bad faith” methods have been used by the other party.
I’ve brought a tape recorder with me. you are aware that the next step in this process is to ask witnesses to come forth. Jones suddenly realized that his strategy would not work. And please describe your general manner. I simply asked her to make copies for me as quickly as possible. You never touched any part of her body? Not even accidentally? No.” meaning something other than copies? No. Mr. Jones. So you refuse to repeat the answers you just gave us? Yes. Making Progress 163 . Ruiz and Ms. and gestures did not have a single hint of sexual implication or innuendo? None at all. Conclusion Jones had knowingly lied when he denied the charges. and now I’ll ask you to repeat your answers—on tape. I think I can write my recommendation. he also lost his negotiating position. When Adams set the tape recorder on the table and revealed that he had witnesses. Stuart. stares. to quote you. “Do what I want. Starr. Well.Adams: Jones: Wood: Jones: Wood: Jones: Wood: Jones: Wood: Jones: Adams: Jones: Adams: Jones: Adams: Tell me again. (a long pause) I want to see my lawyer. Appleton both claim they saw the incident and will testify. exactly what you said to Ms. And you did not threaten her job if she did not. But by refusing to repeat his answers. No one could have possibly misunderstood your intentions? No reasonable person. He failed to think about what might be the next step. Your request. So. Mr.
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. Maria. Maria and Roberto: No. which certainly is large enough (he naively thought) for two young children to easily share. 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.Tactic 42: Split and Choose When two parties both desire something that can be shared or divided between them. one person is given the task of dividing the object(s) into two parts. The second person then chooses which of the two parts they will receive.” the divider. Realizing the potential of getting the “smaller half. Maria: Roberto: Maria: Father: Father: We can’t share it! It’s in one piece! I’ll eat half and give you the rest. because you did the cutting. Their dad instructed them to share the candy bar. the classic “split and choose” tactic might be the best way to settle the issue. take this knife and slice the Snickers into two halves. Roberto will get to choose which half he wants. What is it? Maria: Father: 164 50 Practical Negotiation Tactics . is usually careful about dividing the object into two equal parts.… No way! Haven’t you two heard of ‘split and choose’? It’s a fair way to divide things. Oh. Many of us learned this one from our parents: After two people agree to the strategy. of course.
Archie: I really don’t care either. 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. Lots must be at least one acre to be developed. Clarence agrees to divide it. Clarence and Archie.000. That makes them more desirable. They all have a great view and are equally desirable to build on. Archie is ready to build a retirement home on the property. The problem is that one of us will get four lakefront lots and the other will only get three lots. Then I will choose which parcel I want. Example 2 Two friends and business partners. even children.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. Deal? Clarence: Sure. Clarence: Right. Archie: That’s true. There is only one place for an access road that must serve all lots. The remaining lots should be distributed between the two parcels to make each parcel as equal in value as possible. Archie: Here is the map. Making Progress 165 . I don’t really care which lakefront lots I keep. They have a recent appraisal that values the property at $150. according to county deed restrictions. Give me the map and a pencil. but is not sure how to arrive at a fair split. jointly purchased fourteen acres of lakefront property several years ago. so we should be able to divide the property fairly. that sounds fair. but the appraiser pointed out that the seven one-acre lakefront lots are considerably more valuable than the other seven lots. Clarence: But some of the lots away from the lake have been partially cleared and are flatter than others. both parties. quickly recognize the fairness of the divideand-choose method.
Which would you have chosen? 166 50 Practical Negotiation Tactics . and both men were happy with the arrangement.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 the second parcel with four lakefront lots and one other lot.
What started out as a single issue is now a combination of a major issue and a much smaller issue. 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 . His tactic was to throw in a “nickel” in order to make lots of “dollars. so the salesperson delivered the suite himself. However. Conclusion The amount the couple spent was fairly large. delivery was limited to a small geographical area.” Many people have witnessed or used this effective negotiating tactic. we’ll take the suite if you’ll throw in free delivery and set up the furniture. Jason was having a hard time getting the salesman to lower the price.” thus extending the scope of the negotiations. Example 1 Brenda Davis is always thinking about the repairs that might be required on an item. attach legs. because a “nickel” item has been added to negotiations about a much more significant item costing “dollars.Tactic 43: Nickel and Diming Insisting on the addition of a small item (a “nickel or dime” item) as an inducement to help settle a more-important item being negotiated can change the negotiations in a significant way. Brenda did her part when she said. he also set up all of the furniture in a second-floor bedroom. is expected to dicker over the price. miles from their home.” Under store policy. The suite they liked best was already at the lowest price in town (the retailer was having a real sale). etc. With a great deal of effort. and the delivery carrier doesn’t set up mirrors. “Okay. They recently purchased a new bedroom suite after they carefully priced comparable furniture all over town. Her husband Jason. supposedly the bargainer in the household.
If used correctly—at the very end of a negotiation—the tactic can usually provide a small gain. 168 50 Practical Negotiation Tactics . so be prepared to withdraw the nickel and dime item at the hint of trouble.” The company negotiator yielded to this small-potatoes counteroffer in order to win agreement on the health plan. the two sides had been engaged in considerable bargaining over an improved medical insurance plan (“Health Plan A”) costing hundreds of thousands of dollars. If one party misjudges the situation. At the end of negotiations. one member of the management team commented on the move: “This guy has nickeled and dimed us a total of thirteen times—and for a lot of money! Next time we can’t give in on those small add-ons. In one case.important item. it can be a dealbreaker. “Okay.” Conclusion The nickel and diming tactic is a classic negotiation tactic used successfully in a variety of situations. This experienced bargainer said. we’ll agree to Health Plan A with another ½ cent on the pension fund.
Donna: No way! These are the last two pieces of furniture. decision-making meetings. Donna: They match. Kathy: Then I’ll take the couch and love seat. 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. Kathy: Not if you accept your logic! (Pause) Donna: You’re not being fair… Making Progress 169 . and all the rest is small junk. You can go first. or knowledgeable.” Having a member of a negotiating team whom the other side thinks can do no wrong might prove to be advantageous.Tactic 44: Make Use of a Positive “Halo Effect” It is common in interviews. thus creating the impression in others that the good qualities they see are present all the time. This creates what is called a “halo effect. Kathy: I suggest we take turns choosing which of these things we want. and performance evaluations for people to come across as likeable. Donna: I’ll take the bar with stools. Donna: Okay. Kathy: I’ll take the pool table. 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. but they are two pieces of furniture. trustworthy. People tend to make an effort to put their best foot forward.
Kathy: Donna: Kathy: Donna: Kathy: Kathy: Donna: Kathy: Donna: Kathy: You’re not! (Pause) Well. He might or might not have also been a good arbitrator. Let’s call Johnny Ryan. I trust his judgment. and he has always struck me as an honest person. but Kathy and Donna assumed that one positive quality (honesty) would carry over to other areas. The union negotiators. He’s our cousin. Conclusion Kathy and Donna needed an arbitrator to settle their disagreement. 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. I want the stools. I want the love seat. with a record of labor involvement that included three recent strikes. What for? Tell him the situation. (Pause) We’ve got to settle this today and get this stuff moved. and if the bar and stools should be one item or two. Good idea. Example 2 During a heated labor negotiation. 170 50 Practical Negotiation Tactics . and ask him if the couch and chair should be one item or two. Johnny had the “halo” of an honest person. what can we do? Give me the couch and love seat! No.
simply did not trust the management team. Boston was widely known as a totally honest man who speaks his mind. thus bringing the negotiations to a conclusion. During the break. The union accepted the proposal. but the power of the so-called halo effect was great. This time. The teams took a weekend break from the stalled negotiations. and that he did. He solemnly told the union negotiators that he had been hired to review it. without any reservations. 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. the city management again hired Boston. On Monday. the former union president. Making Progress 171 . Two weeks later. when negotiations again stalled on a retirement plan issue. as a consultant to review their proposal. Conclusion The union leaders gave Boston a great deal of respect (even in areas such as budgeting and actuarial tables) because of his former position. Boston went to the negotiation table with the management team. the consultant did not speak. even if the proposal appeared to be valid. They might have stretched his halo farther than his expertise and experience warranted. the management team hired Sam Boston.
$237. the other party will ignore or refuse to believe the information.500. but you’ve priced it way too high. Henry Lopez: Sam Jones: Maria Lopez: Sam Jones: Maria Lopez: We love the house and have made a written offer of $240. and $237.000. and we are countering with an offer of $250. Being able to present them at the most appropriate and critical times has made the difference in countless negotiation situations. They sold for: $225.000. (Next day) We’ve reviewed the records you’ve produced. $229. 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. This offer is for more money than any four-bedroom houses on this neighborhood list. Sam Jones: Sam Jones: 172 50 Practical Negotiation Tactics . but we feel that it’s a fair offer. Example 1 Henry and Maria Lopez are interested in a house that lists for $275.000. has owned the house for 24 years and is downsizing to a condo. but the right facts presented at the right time can chill or astound and completely turn things around.000.000.Tactic 45: Use Facts Fact-gathering must be part of the preparations for every negotiations session. $235. I’ll get back to you. Sam Jones.000. We love your house. but the key is to gather facts that you might need—not just the facts that you will need. They believe it is overpriced.000 under the listing price! We realize that. Here’s a list of the five that are about the same size as yours. Sometimes.000. What? That’s $35. The owner.
and we know that only this model will meet our needs.400 each. I asked for a list of all new PCs bought this year. I’ll be… Okay. Hatfield: My staff has done a lot of research. Conclusion The Joneses had based their asking price on the advice of a friend. Supervisor: If I okay this purchase order.000. The facts presented by Henry and Maria Lopez caused Jones to re-counter their asking and likely sale price. No one can go over $1. Supervisor: Well. let’s not worry about it. He found facts that supported his position. Conclusion Hatfield had anticipated what his supervisor’s position would be. Example 2 Supervisor: You know the policy.Henry Lopez: Sam Jones: Henry Lopez: Sam Jones: Let us discuss this for a minute.000 each. and did his homework. and wisely chose exactly when to present them in order to make his point. I’ll get called on the carpet.600 unless the company president approves. Here it is. Well… We have a written counter of $245. Order the new computers. We’ve talked with purchasing and we have the authority to buy seven for $2. if other departments have ignored the policy. That’s the bottom price. You can’t pay more than $1. We accept.600 for a computer. Making Progress 173 . who was not particularly knoledgeable about real estate. Hatfield: While I was at purchasing. The last 20 were over $2.
174 50 Practical Negotiation Tactics . I want two of these. and two are for my husband. and help you point out inconsistencies in a position that might “lead” the other side to change theirs. The effective use of probing questions can help achieve a favorable settlement. I can do that within the rules. yes.Tactic 46: Ask Probing Questions Ask probing questions and follow-up questions. Example 1 Maureen: What. but I don’t set the policy and I can’t make exceptions. Maureen: Well. some people would have forty or fifty books out at the same time. I’m sure you would not. reveal misperceptions or lack of knowledge about positions that can be corrected. Would I do that? Jenny: Maureen. I trust you. Maureen. 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. Maureen: Well. A maximum of three books can be checked out to a person at any one time. Maureen: The policy limits a person to only take out three books at the same time? Jenny: Yes. but you don’t want to jeopardize your job? Jenny: Yes. and they would all be unavailable to others. I can’t check out these four books? Jenny (Librarian): That’s the policy. you know me. If you trust me. But I can’t break the limit rule—it is an absolute rule here. Otherwise. Maureen: So you trust me with the books.
What’s the policy number or date of approval? I don’t know. Mary. But this forces us to make decisions without complete information! Yes. but it’s because you don’t have access clearance. Can you get me the number? Sure.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. If that data ended up in the wrong hands. Security? Right. They say it’s a security issue. Example 2 Jack: Mark: Jack: Mark: Jack: Mark: Jack: Mark: Jack: Mark: Jack: Mark: Jack: Mark: Jack: Mark: Jack: Mark. are you sure I can’t get your information technology people to give us direct information on product sales? No. Who does have access clearance? Mike. Babu. Making Progress 175 . I couldn’t find anyone who knew it. we can’t do that. Mary and Kenzie? They are 2-3 pay grades below us. it could kill us. Jay. (Next day) Do you have the policy about giving out product sales information? No. Sue. Brooks. and they don’t even have a use for the sales data. and Kenzie. Why? Some policy? Yes.
Jack was able to receive clearance as well. 176 50 Practical Negotiation Tactics . if we can have access? Mark: I guess so. Conclusion Jack continued to probe by asking why and who in order to find out more about “the policy.” He intended to do this until he hit a dead-end or was able to find a solution to his problem. Jack: Here.Mark: Well.… (Next day) Mark: The vice president said you can have access if you sign a security card like everyone else who has access clearance.P. I’ll sign now. When can I get the data? Mark: Today. that’s been the policy since I’ve been here. Once he discovered that employees in lower pay grades had access clearance. Jack: Can you ask your V. His probing questions turned up a critical fact. I’ll get it for you ASAP.
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. hours.Stage 7: Reaching Agreement he final stage! It might come minutes. When multiple issues are at stake and most have been agreed upon during negotiations. this tactic can produce an agreement. this process can easily result in a final settlement. days. and the classic Walk Away (Tactic #48). 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. In this process. and the child learns an important lesson about life. 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. They bring it out when a dispute arises. Tactic #49 (Final-Offer Arbitration) should bring about a settlement. If people are not willing to take even a few minutes to write down the terms that have been agreed upon and sign the paper. or even months after the first offer is presented. T Reaching Agreement 177 . 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. When two parties believe they have an oral agreement. 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).
” Conclusion The husband was so excited about visiting Washington. 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. After days and weeks of on-again. As he hugged her. The bargainer skillfully 1) begins the congratulation sentence “I agree…”. off-again discussions.Tactic 47: The Premature Congratulation This tactic draws its strength from timing. They both have stressful jobs and look forward to their annual vacation together. “I’m thinking of agreeing to your plans for vacation. Larry Snyder gets bored staying in any one place for many days. She said. she continued to speak: “…as long as you agree to drive us to visit my mother on her birthday. one exhausted negotiator saw that his team was equally weary and 178 50 Practical Negotiation Tactics . D. Near the end of a particularly anxious bargaining session when there was little time left to negotiate. Example 2 Negotiations can take a long time and incorporate many issues.C. Let’s do go to Virginia Beach and Washington D. and Virginia Beach —his plan—that he let the euphoria of the moment cause him to agree to a trip he dreaded and in fact had successfully avoided all year.C. Example 1 Many husbands and wives have different ideas about how they’ll spend their vacation. but his wife Nancy likes to stay put and relax. His wife had carefully planned her exact “premature” vacation agreement.…” Larry was very pleased that his wife was agreeing to the idea he had been trying to sell. 3) and adds one last key demand to the congratulation sentence. 2) allows the other side to feel the release that comes with completing the bargain.
One of the best pieces of negotiation advice is to remain fresh. It was so close. because it makes you pretty vulnerable. The celebration had begun. as the negotiator came closer. fit. My team had convinced me that doubling the time frame would create a real problem on the shop floor. but also that they sensed the weariness of my team. Most people didn’t notice that the negotiators had not finished their hand shake… Ted: Then Ted continued his sentence with. I felt the tension in the room. The old agreement specified a 30-day period. (This is a bad position to be in. It took only a few minutes of caucusing for my team to convince me that a 45-day probation was costly.almost willing to accept any deal. When the chief negotiator emerged with his team and headed toward my team. Therefore.” Bob: Ted timed this perfectly. but we agree to everything in your final proposal…” Members of my team shouted hooray. but acceptable. “It was hard for us. and rested. we held firm on this and did not discuss the probation issue and many other “dead” issues for days. “…as long as you give us a 45-day probation period. but the other side continued to ask for 60 days. However. My team was afraid we would not even come to an agreement. symbolizing that he was agreeing to the entire final offer.) Here’s what happened: Bob: I knew that the other side was similarly harried. Ted said. and this skillful negotiator let them feel the happiness and security one feels when the fear vanishes. we made some small concessions on financial matters. There were grins and handshakes coming from the other side. but held firm on remaining operating principles. he turned on a large warm smile and extended his hand to shake. Reaching Agreement 179 . In our last offer. One operating issue involved the probation period for new employees. We all knew that it could come down to agreement or strike.
However. knowing that it will probably be agreed to in order to continue in the euphoria of the moment. 180 50 Practical Negotiation Tactics . the negotiator skillfully finishes his words of congratulations by inserting one last key demand.Conclusion This “premature congratulation” tactic can only be used successfully at the very end of an unsure and shaky negotiation. The negotiator makes a big show of agreeing and allows the other side to bask in the glory of a deal completed.
Whether you are really bluffing or you are serious. Sue: Well. He really likes it. but I thought I might want to try a new Highlander. Your opponent will have to either let you go and run the risk that things are really over. be sure you think this through beforehand. and the lease on my Avalon is about to expire. My name is Jay Vahaly. (Vahaly drives the new Highlander home. The next morning. here are your keys. Jay. right? Jay: Yes. I don’t want to negotiate. Jay. but his Avalon has been a good car. too. or go after you and perhaps make a new concession in order to get you back to the table. what can you do on a 36-month lease? Reaching Agreement 181 . I like it.) Jay: Sue. He stopped by Pembroke one day to look at the new models. Jay: Hi. Example 1 Jay Vahaly has purchased three new Toyotas from Pembroke Toyota over the past twelve years. all from Sue Wilson. You bought your wife a new van just last year. I’ve worked with you before. the following exchange occurs. a veteran salesperson. Sue: I remember you. Sue: Let me get you the keys so you can take this one home overnight to see how you like it. and he can simply buy it when the lease expires. how did you like it? Jay: Okay. if I roll over the lease to a Highlander. but my Avalon is a good car. You had time to assess my car.Tactic 48: Walk Away Walking away from the table in the middle of negotiations is a risky tactic that should only be used when you know you have a good alternative to what is on the table AND you believe that the other party will think that you really are serious about quitting for good.
I’m disappointed. 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. (He walks away) Sue: No.) Conclusion Jay knew his BATNA (best alternative to a negotiated agreement): to go somewhere else if the deal isn’t good enough. Jay—wait. He was prepared to keep his Avalon if the lease was even $1 more than his limit. I thought I’d get a fair deal. at most. (Jay got in his car and drove home. That was the figure he was looking for. He effectively used the walk-away tactic to let Sue know that he was firm on the price. they came down to $199 more on a thirty-six month lease. Jay: What? I was thinking the lease payment would be. but 182 50 Practical Negotiation Tactics . Example 2 Larry and Judy Bizannes own the Bizannes Music Mart. Let me try again. These Highlanders are hot items! Jay: Well. They’ve talked about retiring in recent months. a successful musical instrument sales and rental store. Sue: I’ll try. Jay. Jay.Sue: Give me a few minutes and I’ll find out … (20 minutes later) Sue: Well. Sue called him as soon as he walked in the door and offered another $50 break on the lease. $100 more. Sue: Sorry. (15 minutes later) Sue: Well. Jay: I guess I’ll go to Dixie Toyota and see what they will do for me. Jay accepted.
Michael: Good morning. Larry. which the Bizannes accept. How’s business? Larry: Great! I’m surprised to see you again. Michael Roberts.) 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. and I only need your building to own it. they were prepared to accept $5. Larry: Yes. Judy: Larry. Larry.5 million.both of them love their store. our accountant said it’s worth $6 million.5 million. Larry: Judy. so why are you here? Michael: I’ve discussed it with my partners. today.) Larry: Michael is here again. but their continued walkout convinced Michael that they would hold firm. Larry: Michael. Michael: I have a check right here for 4. Reaching Agreement 183 . Michael: Well.0 million. and we gave you our price. go back to your office. (Judy and Larry walk into the back room and close the door. come out here! (Judy comes out from the back room. and he is offering us $4.5 million for the building. visited their store. and I’m not interested in less. Michael calls on them again with a check for $5. One day. a local developer. with a certified check. He met with Bizannes twice before. you’ve already told us that. I still want to develop this block. and I’m prepared to offer you $4. You rejected it. let’s eat lunch. In reality. Two months later. after no contact from Larry or Judy. What do you think? Judy: Larry.5 million.
But he isn’t allowed to try to find a “middle ground”—just to choose one position or the other. Jenny: No. so they generally give up some ground and try to make the offer appear as fair and reasonable as possible. Lynne told Jenny that she and her husband Gary have restored two other Singers. Jenny told them to sell it. We have a few dollars invested in parts and we had fun working on it. In ﬁnal offer arbitration. Lynne: No. In mediation. Lynne: No! I suggest that we each write down our position and let Dad choose one of the two as the final decision. which is generally voluntary. I won’t take it. In arbitration. Lynne responded that this was their intention.Tactic 49: Final-Offer Arbitration Mediation and arbitration are two well-known ways of resolving sticky disputes. 184 50 Practical Negotiation Tactics . Let’s split the money. 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). Both involve the use of third parties who are objective. which she has kept in a barn for over ten years. The following discussion occurs: Jenny: The old machine wasn’t worth $50 when you took it. both sides have agreed in writing to accept the arbitrator’s decision. the mediator works with both sides to resolve certain issues but has no authority to make binding decisions. They inform her that they put the machine on e-Bay and have an offer of $1. the arbitrator is given the authority to make the parties comply with the ﬁnal and binding decision.000. Jenny has an antique Singer sewing machine. Each party wants their offer chosen. That was the deal. Jenny told Lynne she could take the old Singer that she has no interest in (and doubts that it is worth restoring). In most arbitrations. One day Lynne dropped by for a visit and the discussion turned to the old Singer. Example 1 Jenny and Lynne are sisters.000. Six months later. Keep the $1. Lynne and Gary bring the restored Singer to Jenny’s house. but they wanted to give Jenny $500 for her “share” of the machine. and would be able to restore hers as well. I offered it to you for nothing.
I can’t see any way to reach an agreement. Their father found Jenny’s position to be the most reasonable. Conclusion Jenny’s final position was that she receive $50—the maximum possible value of an old “junker. binding decision on the three items.m. Ralph: I know. the old machine was only worth $50 when Lynne hauled it away. Then we both submit our final offers to Judge Ryan within 48 hours.m. Tina: Yes. we are down to only three unresolved items.) Judge Ryan: Here is my written. At best. The union’s position could have run into millions of dollars. on Friday. first on the health insurance co-pay. Any increase in value was due to the work of Gary and Lynne. since he could only choose one offer. They should get the other $950.Jenny: Dad: Okay. Example 2 Ralph: Well. My troops are getting restless.” Lynne proposed a 50-50 split. and meet back here in 72 hours—3:00 p. Ralph: Right! (Friday at 3:00 p. based Reaching Agreement 185 . Tina: Good. I’ll buy that. but we’ve made no movement on any of them since we started. Tina. (One week later) I think Jenny’s position is the most reasonable. he did not need to “haggle” with them. As a brief explanation. so I am invoking the finaloffer arbitration ground rule we have in place. I have chosen management’s offer to keep it as it is under the current contract. after six weeks of negotiating.
on the clothing allowance. Finally. I’m not happy with your decisions. and an item that large should have been negotiated at the table. I have chosen management’s offer because the union did not justify why the past practice should be changed. nor why their method was superior. Conclusion The final-offer arbitration process enabled the parties to gain a fast. Second. and peacefully finalize a contract that contained several important gains for both sides. reasonable resolution to their last three unresolved issues. Well. on the merit pool distribution method issue. At least we both saved time. I’m sure you realize that we could have taken six more weeks to reach the same point. and stress. Ralph. 186 50 Practical Negotiation Tactics . Now let’s get a signed contract. It will only cost $120. but we agreed to this process.Ralph: Tina: on last year’s data.000—less than 1 percent of the total package. No increase has been given for six years. money. I have chosen the union’s final offer.
At the very least. The owners were selling the house without a real estate agent. and decided to stop by to see if they liked the house. all the usual stuff in a sale. they looked at this particular house on their own. and while Bill and Paulette had been using an agent to help locate houses. 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. and felt that they would have to work fast to make an offer before someone else did.000. They finally looked at a house they really liked. Example 1 Bill and Paulette had been house-hunting for some time.Tactic 50: Commit the Offer to Paper You can often control the progress and direction of a negotiation by writing down the agreements or understandings as they are being reached. During a discussion. If we shake hands on it right now. not the furniture. seeing the agreement in writing will force both sides to acknowledge what has been said and agreed to in the negotiations. everyone is busy grappling with the details of the negotiations. however.000. We’d like to make you an offer of $150. 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. They were not the only couple to come to the open house. The goal of recording the precise details is to either avoid any misunderstandings or address them before the talks conclude. and one of the other couples looked very interested. Bill pulled the seller aside. They saw the “For Sale” and “Open House” signs. Bill: Reaching Agreement 187 . Seller: We’re asking $152. Obviously. we won’t be involving our real estate agent. Seller: Yes. Bill and Paulette fell in love with the house.
and that the problems with her job performance were. look this over.Seller: Just a minute. the house is yours.000. Example 2 Monica brought a sex discrimination charge against her employer.000 and added the additional items to “sweeten the pot” and give Bill and Paulette a deal they couldn’t refuse. she said that her supervisor had repeatedly asked her out. he left the price at $150. It worked. the refrigerator. he listed an attached hutch in the kitchen. When he had the chance to put the deal in writing. The supervisor pointed out that he had a staff of 20 or so women. that’s what I meant. and the garbage disposal. and when she refused. I think we can work something out. (The seller recorded the offer of $150. Bill: (pleasantly surprised to learn that the garbage disposal. the hutch. Under the section for appliances to be left on the property. and two area rugs. Seller: Okay. a public agency. In the section for fixtures and miscellaneous items to be left on the property. Let me just get the standard “offer of sale” form and fill out what I hear you saying.) Seller: So. and that no one would ever say that he was guilty of any type of sexual harassment or sexual discrimination. The employer’s affirmative action officer looked into the charges and determined that 188 50 Practical Negotiation Tactics . all window blinds and drapes. he listed the stove. and had been prepared to drop his price to $145. he began to have “problems” with her job performance. Sign here. If it’s what you meant. real. since he probably would have missed them) Yes. the hutch. and the two area rugs were specifically included. The supervisor assured the employer that there was no basis for her complaint. then we have a deal. In her complaint.000. in fact. Conclusion The seller had always intended to leave the garbage disposal. and the two area rugs. but I’d like to make sure there are no misunderstandings.
even though we’re certain we would prevail. Look.000 without actually having to prove anything.000. then Monica had to acknowledge that the supervisor did nothing wrong. The employer’s lawyer told Monica’s lawyer that the employer was ready to settle the deal for the $100. I’m He: She: He: Reaching Agreement 189 . but it’s not standard when a complaint is formally withdrawn.000. It might be standard when there’s a settlement. Withdrawing. by this time. 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. the supervisor says he did nothing wrong and that Monica just misinterpreted what he said. The supervisor insisted that if the employer felt he had to settle. You’re just trying to make it seem as if your supervisor did nothing wrong. Monica’s lawyer (She): Employer’s lawyer (He): She: I was surprised by your settlement documents. Why’s that? Well. But the employer doesn’t want to go through the expense and publicity of a trial. He’s happy to prove that in court. He offered to send settlement agreement papers to her. and expensive matter. found a new job and wanted compensation for “embarrassment” and lost wages in the amount of $100. And the confidentiality clause is standard. you didn’t mention in the agreement that in exchange for the $100. drawn-out. even though you are paying Monica because we can prove he did do something wrong. settling—What difference does it make to her? She’s getting her $100.there was little basis for the complaint.000.000. but said that fighting the charges would be a long. my client is supposed to formally withdraw the complaint rather than just settle it. and must agree not to tell anyone about the $100. Monica had.
000 when all that was asked for was $100. but word did get out that a public agency paid $200. 190 50 Practical Negotiation Tactics .000.She: authorized to pay $200.000 just to get the employee to “withdraw” the complaint.000.000 and the conditions of the offer. 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. I’ll take your offer back to her and let you know. to his disadvantage. but that’s under the same conditions—the claim must be formally withdrawn and Monica can never reveal the amount of the settlement. It was made clear that the employer had paid the additional $100. It would have been a better strategy in this situation to raise the issue of withdrawing the complaint during the actual negotiations. There was a confidentiality agreement. Monica accepted the $200.
even an informal agreement benefits from some type of written documentation.” Clear communication is essential if you want to reach an agreement and have it abided by. However. then the parties have to abide by the agreement. however.SECTION IV: PUTTING THE AGREEMENT IN WRITING s you can see. I thought you said something else. and contract. reaching an agreement is sometimes a long and difficult process. “That may be what I said. When two friends agree on what movie to see. and when they agree to solve problems together. operating under an agreement after it has been reached can be even more difficult. it would have been easier to resume negotiations at a later date. commitment. A Communication Hearing is not necessarily the same as listening. Putting an agreement into writing serves three purposes: communication. The degree of detail and formality of a written document will. Certainly someone has said to you. Unfortunately. of course. As these examples of personal and business negotiations show. Reaching an agreement is the first step. Think of how often you have said to someone. most certainly needs to be in written form. depend on the kind of negotiations in which you are involved. but it was not what I meant. a written document is hardly necessary.” By the same token. If the agreement reached at the time had been put into writing with all three sisters signing it. In Tactic #17 (Package Items). talking is not always the same thing as communicating. A union contract. “Oh. One way to help the parties abide by an agreement is to put it into written form. but some of the decisions were put off for a couple of months. the three sisters reached an amiable agreement. rather than attack each other. when they engage in honest “give and take” negotiations. it is much more effective in the long run when the parties enter into “win-win” agreements. Putting the Agreement in Writing 191 .
If Jason fails to live up to his side of the deal. sounds. Who isn’t excited about buying a brand new SUV or truck? Until. Oftentimes just seeing the agreement in black and white conveys its import as well as or better than hearing about it.Communication is a process that involves a sender and a receiver. or express a thought or emotion through words. pictures. that is. The receiver has to decode the message being sent by trying to understand and interpret the words. a couple of months away. His mom could more easily enforce the agreement if she had it in writing. the price is spelled out in the loan document as “twenty-two thousand. he can be reminded of the details because it’s all there in black and white. And because the sender and the receiver are two unique individuals. pictures. Jason agreed to change his study habits if he couldn’t pull his grades up by the end of the semester. Negotiations are often necessary because there was a “misunderstanding” that could have been avoided if the parties had put their agreement in writing. When communication is limited to the spoken word only. seek information. or movements. The sender wishes to convey an idea. Larry wouldn’t have had to argue over a bill for the plumbing work his cousin Will did if he had asked for Will’s estimate before accepting his offer to help. you have created something tangible that can be referred to in the future when memories become fuzzy. nine hundred and forty-four dollars—$22. Commitment Reducing an agreement to writing often forces both sides to truly commit to the agreement. 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 opportunity for the sender and the receiver to misinterpret is greater than if the communication is first spoken and then written. the message being conveyed and received might be understood differently. 192 50 Practical Negotiation Tactics . sounds. When you create a written record of the details of an agreement.” In Tactic #14 (Don’t Always Hide Your Weaknesses). or movements being used by the sender. In Tactic #4 (Use Objective Criteria).944.
WHO? Provide of the full names the parties necessary to the agreement. or it isn’t an agreement—it’s merely the conveying of a gift. where. your plants die because the house-sitter wasn’t told to water them. one party will change behavior in exchange for something of value from the party who wants the behavior changed. dating it. ask yourself the basic questions of who. leading to misunderstandings and contract disputes. how many. in writing. which kind of.Contract Finally. Here’s what we mean. the address and description of the real property. when. Your spouse will share some responsibility for failing to make that duty clear in the agreement if. details such as what fixtures stay or what appliances go can be easily overlooked. and how much. signed. and dated agreement. pulling an agreement in writing. In either case. You can do this more formally by taking them to court (perhaps as a last resort). what. However. before the trip. which. and getting all the parties to sign it usually creates an enforceable contract. 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. say. Putting the Agreement in Writing 193 . When you are ready to commit yourself in writing. and put that information into the document. Both parties must receive a benefit or something they personally consider of value. 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. Generally. as many people learn when they purchase a home. one party will work if the other party pays for the work. why. the real estate contract includes information about the buyer and seller. Carefully and completely describe the subject matter of the agreement. WHAT? The written document should clearly describe the item(s) covered by the agreement. and so on in standard contract form. One party wishes to buy what the other wishes to sell. If you have agreed to pay someone to house-sit while your family is on vacation. have your spouse also agree to the details of the agreement. Failure to do so can lead to big problems. protect yourself by having a written.
if that becomes necessary). 194 50 Practical Negotiation Tactics . and having all parties sign it ensures that the parties have. the better.The remaining questions fill in the details of the agreement. Putting an agreement in writing. And it can create a tangible reminder of the deal (or an enforceable agreement. It gives the parties an opportunity to really buy into the deal. which one or which kind of. in fact. The more-specific and clear these details are. agreed to the same thing. how much or how many. dating it. depending upon the deal: when or where.
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 .
________________ 9. ________________ 4. ________________ 8. ________________ 10. ________________ 6.Name of Negotiation Tactic 1. ________________ 7. ________________ 2. ________________ 5. ________________ Tactic# How will I use this tactic? (Application) _________________ _________________ _________________ _________________ _________________ _________________ _________________ _________________ _________________ _________________ ______ ______ ______ ______ ______ ______ ______ ______ ______ ______ Notes Putting the Agreement in Writing 197 . ________________ 3.
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David. 1987. Oakland. Heavrin. 2001. Calif. Negotiation Skills. New Jersey: Prentice-Hall. Inc. New York: Simon and Schuster. 1989. Cleary. The Essentials of Negotiation. Clark. George. Ill. Inc. and B. New York: M. Practice. Herb. Ury. Labor Relations and Collective Bargaining: Cases. Cohen.. 1991. Brown. New Jersey: Prentice-Hall. Patrick J. Gotbaum. Getting to Yes: Negotiating Agreement Without Giving In. and Law. Getting Together: Building Relationships As We Negotiate.REFERENCES Carrell. R. Pocket Negotiator. and J. Fisher. 1996. Mediation. Roger. M. and C. 2004. The Negotiation Handbook. 1988. Fiske. 1988. Inc. Successful Negotiation: Effective “Win-Win” Strategies and Tactics. M. References 199 . Inc. 2nd ed. 2001. Inc. and S. W. Kennedy. LittleJohn. Sharpe. Domenici.: New Harbinger Publications. Roger. 1991. Gavin. Lewicki. W. Upper Saddle River. Irwin. and J. Inc. R.: Waveland Press. You Can Negotiate Anything. Fuller. University of Missouri: Columbia Press. 2nd ed. Patton. Los Altos. Upper Saddle River. McKay. The Relaxation and Stress Reduction Workbook. K. New York: Penguin Books. New York: Bantam Books. Calif. Saunders. Eshelman. E. Minton. 1997. 7th ed. C. New York: Penguin Books. D. 1980.: Crisp Publications. Prospect Heights. and S. Victor.E. Fisher. Negotiating in the Real World. Maddux. J. New York: Basil Blackwell.. Inc. The Negotiator’s Handbook. and M. 1999. R. Chicago: Richard D. M.
Lexington.org 200 50 Practical Negotiation Tactics . Upper Saddle River. Ury. 1998. G. B. Raiffa. New York: M. 1999.negotiationsources. Inc. Cambridge. New Jersey: PrenticeHall. George. The Art and Science of Negotiation. New York: Simon and Schuster. 1991. Inc. New York: Penguin Putnam. New York: Bantam Books. Inc. Shell. The Mind and Heart of a Negotiator. Thompson. www. J. R. 1982. Getting Past No: Negotiating with Difficult People. Massachusetts: D. The Art of Negotiating.E. Labor Relations in a Global Economy. Weeks.Nierenberg. Lectures on Negotiation Analysis. Taking Charge/Managing Conflict. New York: Viking Press. Howard. Bargaining for Advantage. Gerald I. Cambridge. C. William. Stulberg. 2001. Dudley. Massachusetts: Harvard University Press. 1994. 1987. 1981. The Eight Essential Steps to Conflict Resolution. Raiffa. Sharpe. Heath and Company. L. Inc. Tsogas. 1996. Howard. Massachusetts: PON Books.
Most of his professional career has been spent in the Louisville area and has included positions as a personnel director and labor negotiator. The Journal of Accountancy Training. These positions enabled him to build a sizable management consulting practice while teaching at the University of Louisville.A. Books published by Dr. and negotiations. He received his doctorate from the University of Kentucky. In addition to negotiating numerous litigation settlements and contracts. he was elected to the City of Louisville Board of Aldermen for five terms. which is located in the greater Cincinnati area. Personnel. Carrell are in the fields of collective bargaining and labor relations. Marshall University. organizational behavior. Bakersfield. and the University of Louisville. Labor Law Journal. Dr.D. and MBA and B. and served as President of the Board and Mayor Pro-tem for three terms. Personnel Journal. The University of Nebraska-Omaha. Human Resource Management. Carrell is Dean of the College of Business at Northern Kentucky University. she has helped negotiate a number of major agreements such as a multi-million dollar property exchange that relocated major industries and railroads from the City’s downtown wharf resulting in the development of both an award winning public About the Authors 201 .ABOUT THE AUTHORS ichael R. The Academy of Management Review. M Christina Heavrin J. Organizational Behavior and Human Performance. HR Magazine. has practiced law for 28 years primarily in the public sector as an attorney for local government in her hometown of Louisville Kentucky. and Public Personnel Management. Business Forum. in Economics from the University of Louisville. During his academic career he has received awards for both outstanding research and teaching. In addition. Morehead State University. The Personnel Administrator. He has authored over 50 scholarly works in some of the leading management and human resource journals including The Academy of Management Journal. Carrell has held academic positions at California State University.
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. 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. 202 50 Practical Negotiation Tactics . an agreement between the State of Kentucky. Ms. Jefferson County.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.
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