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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
4 50 Practical Negotiation Tactics . at a flea market. 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. accept what is given. Who. practical tactics useful in real-life situations at work or at home. But if you scored 8 or less. • A child wants a new toy now. Instead. 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. but many of us miss the opportunity to bargain in other situations. few people understand that normal interactions represent bargaining opportunities. • A co-worker asks for volunteers for a new project. some will in retrospect even remember being the victim of one or two of them. with family members. 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.negotiator! Pass this book on to someone else who needs it. they pay the sticker price. such as these: • You receive the wrong order at a restaurant. Most readers will no doubt recognize some of these strategies. This book is designed to give the reader an understanding of the negotiation process by presenting fifty proven. with neighbors. exactly. Unfortunately.
The parties involved can make a decision by themselves. Decision-making ability. All of these situations are opportunities to negotiate. 4. 3. be prepared to bargain. some resolution must be negotiated. A neighbor wants to remove an old tree on your property line. A friend is about to select the movie he/she wants everyone else to see. For example. time. “I’d like Introduction 5 . “Well. and I don’t have time to wait for another. 2.” When you recognize that something can be negotiated. perhaps you can say to a hotel clerk.• • • • • • • A hotel clerk tells you that your reservation was lost. such as price. A service repair person gives you an estimate on some work. that can be negotiated. What are my alternatives?” During an employee evaluation. you must advise the other party of your intention to negotiate. 5. There are flexible elements to the situation. Mutual goals. Interdependency. or items of value. The parties are interdependent: what one party does affects the other. Both sides want a settlement. Each one has the five key characteristics necessary for bargaining: 1. Your spouse wants to buy new furniture. and each side can involve one person or several people (each representing one “side” of the issue). A teenager wants to buy his/her first car. since you lost my reservation. The parties involved are interested in reaching a common goal. Flexibility. There must be a conflict in the sense that what one wants is not what the other wants. condition. In some circumstances. In some situations. what can you do for me?” Or this to a restaurant manager: “This food order is wrong. Multiple parties. perhaps the employee can say. Therefore. Two or more sides are involved. one party is only allowed to follow policy or must wait “until the manager arrives. Your boss reviews your past year’s performance.
You can then use one or more of the tactics presented in this book to achieve the best possible settlement. Scenarios based on actual real-life situations are used to show how each tactic can be used in business or everyday situations. negotiations can be concluded with a written or oral agreement. and use the forms in the back to identify the issues.” To a neighbor you can say. Choosing and applying the appropriate tactic to a particular situation will become easier as you begin to use them. Keep this book handy when preparing for any type of negotiation. but I believe it adds value to our house. How can you compensate us for our loss?” Once you’ve suggested that you see the situation as something to be negotiated. the other party will realize that you intend to negotiate and do not accept the situation. “I see why you want to cut down the tree. 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. and meet with you again. and the tactics that might move the negotiations along. the facts. 6 50 Practical Negotiation Tactics .time to look over this performance review and respond point-by-point. the parties and their interests.
How good are your negotiation skills? Place a check in the box that applies to you. Do you routinely negotiate for better accommodations when you check into a hotel? 3. Do you often refrain from negotiating a better price or service because you believe that you do not have good negotiating skills? Introduction 7 . have you routinely resolved differences with a neighbor or a friend through a negotiated agreement? 5. or child. Have you ever found yourself in a negotiation situation in which your best alternative was to walk away. do you believe that you negotiated the best possible deal? 4. As a parent. When you purchased your last home or car. Yes No Self-Assessment Quiz 1. do you routinely negotiate a last add-on before you close the deal? 9. but you did not? 8. In the past. or division of household duties. allowance. did you request appropriate compensation? 6. Do you wish you could negotiate a change in your job duties or salary? 7. The last time you received sub-par service or food in a restaurant. spouse. have you ever required a written agreement covering chores. In the past. have you ever felt that you were not adequately prepared to negotiate a job offer? 2.? 10. When making a major purchase. etc.
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one for another. 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. On the other hand. The “Quick Model” approach outlined below is good for simple negotiations. • an allocation for moving expenses (employee goal) traded for a set number of travel days per month (employer goal). etc.) • primary sales territory • a starting date Exchange Issues: Those issues that might be traded. the process will be fairly straightforward. thus allowing each side to achieve one of their goals. Examples: • office location (city. Examples: • a signing bonus (employee goal) traded for an annual travel budget (employer goal). state. the process will probably take several weeks or months as the parties move through all the stages. If it is a relatively informal situation. The Negotiation Process 9 . if the situation involves a number of detailed or complicated issues or the stakes are relatively high. decide how complicated the issue is. They’re referred to as “win-win” because each side can achieve their goal.SECTION II: THE NEGOTIATION PROCESS Before you begin the process of negotiation. The Quick Model The easiest way to prepare for a simple negotiation is to identify all the issues. including those that are less obvious.
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. Depending on the situation and the parties involved. rearranged. What one side gains. stages can be combined. The Comprehensive Model Negotiation is more of an art than a science.Distributive (Win-Lose) Issues: Those issues that the parties are directly at odds with. the other side loses. 10 50 Practical Negotiation Tactics . Examples: • an item sold by one party and bought by the other • wage increases won by one side. or even skipped altogether.
The Negotiation Process Table 1: The Negotiation Process: Seven Basic Stages Stage 1 Identify situation as one for negotiation Preparation: Key Factors – Time. Power #1– #6 Stage 2 Strategy: Choose Overall Approach to the Process #7– #14 Stage 3 Initial Offer: Getting Started Stage 4 Counter Offer: The "Give & Take" Stage 5 Pressure Bargaining: Striving for Conclusion Stage 6 Key Methods: Achieving Progress Stage 7 Reaching Agreement: Settlement of Impasse Tactics to Consider #15– #21 #22– #31 Negotiation Phase #32– #38 #39– #46 #47– #50 Initiation Phase Resolution Phase 11 . Information.
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SECTION III: 50 TACTICS FOR SUCCESS
Stage 1: Preparing to Negotiate
n many negotiation situations, the parties have time to prepare for the actual bargaining. In other situations, such as when you’ve been served something at a restaurant that you did not order, there is no time to deliberate. You have to be prepared to instantly recognize that the situation can be negotiated, and begin to bargain. You can have time to prepare if you simply ask for it. For example, at the end of an employment interview for a management position, the candidate was surprised to receive a job offer on the spot. The candidate wanted the job, but wisely recognized that she could negotiate the contract. She said that she was very interested, but needed forty-eight hours to make up her mind. She used the time to talk to current employees, and developed a list of perks and conditions that she then negotiated, before accepting the position. To prepare for a negotiation, do as many of the following activities as you can: 1. Have realistic objectives. Identify everything that can be negotiated, and set realistic objectives for each item. If, for example, price is a factor, determine the desired outcome and set a minimum (or maximum) acceptable outcome, beyond which you will walk away and choose another alternative (see Tactic #1: Know Your BATNA). Also determine your opening offer in light of your desired and your minimum outcomes. It is often helpful to list each specific item to be negotiated and your minimum acceptable offer for it, as well as your desired goal and an acceptable opening offer (see Tactic #5: Listing Items). Thus, for each factor, write down and stick to three figures:
1. An opening offer. 2. The desired “best” offer. 3. A minimum (or maximum) “worst” offer. 2. Learn about your opponent. By whatever legal and ethical means possible, learn everything you can about your opponent. Talk with friends, neighbors, co-workers, past negotiation foes, even family members. If you are able to guess or find out about your opponent’s real objectives and/or limitations, you can gain an invaluable edge (see Tactic #2: Know Your Opponent’s Real Objectives). 3. Gather all the facts. During the heat of negotiations, presenting critical facts or objective criteria can turn the tide in your favor. You can usually anticipate and collect this critical information in advance during the preparation phase (see Tactic #4: Use Objective Criteria). 4. Set ground rules. In labor negotiations, the parties first agree to ground rules such as where, when, who, and how often the negotiation sessions will occur. Detailed ground rules are not needed in most everyday negotiation situations, but there are times when they help people come to agreement. Agreeing in advance on the location for discussions can give one side an advantage (see Tactic #3: Control the Setting), but in other situations, the critical ground rule will be about timing (see Tactic #6: Timing is Everything), forcing both sides to reach agreement faster. In negotiating with family members, friends, or neighbors, one well-advised ground rule is to stop the talks as soon as anyone raises his/her voice, curses, or makes a threatening comment.
50 Practical Negotiation Tactics
Tactic 1: Know Your BATNA
At what point will you walk away from the negotiation? You improve your position in any negotiation if you can walk in already knowing your BATNA—your best alternative to a negotiated agreement. The BATNA is the outcome you prefer over what the other party has proposed; if you define it at the outset, you are less likely to agree on something during an emotionally charged discussion and regret it afterward.
Harvey Huff bought a new 1956 Chevrolet from a local dealer. After forty years, he finally decided to sell the car he had loved and carefully maintained in original condition. Harvey did not need the money, but he intended to move three thousand miles away, to a condo in Arizona. The ad he placed in the local newspaper produced only one potential buyer: Patrick Knight. Harvey: Mr. Knight: Harvey: Mr. Knight: Harvey: Mr. Knight: Harvey: Mr. Knight: Harvey: Mr. Knight: Harvey: Well, now that you’ve checked it out, how do you like it? It’s in great condition, just as you described it. Any questions? Will you take less? No. It’s easily worth at least $20,000. That’s the price. $18,000, tops! No thanks. Okay. $20,000. I need it for a new restaurant. Restaurant? Yes. We cut off the top of the vehicle and people sit in it and get served their meals in our “oldies dream car!” Never mind, I’ll keep it. I haven’t maintained it for all these years just so you can destroy it.
best. For the past two months. The union negotiators convinced the employees that this too.Conclusion Harvey’s best alternative—his BATNA—was simply to hold on to the car for the moment. Example 2 Shari and Jim Jaggers own a successful West Coast pottery company. The union is demanding wage and benefit increases. The threatened strike became a reality. 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. labor contract negotiations between the Jaggers and a local labor union representing the pottery’s craftsmen have stalled. 16 50 Practical Negotiation Tactics . When negotiations with the union became hopeless. and final offer. notified all the employees of their intentions. his BATNA was not to hold out for more money.” which was refused. as Harvey had for many years. Conclusion Selling their business was the Jaggers’ BATNA. the Jaggers decided to seek buyers for their land. They learned that their assets would be easy to sell and were worth more than originally estimated. With only two weeks remaining before a threatened strike. The Jaggers gave the union their “last. but rather what the buyer planned to do with the car. inventory. In this case. and equipment. 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 owners. and the Jaggers decided once and for all to sell their business assets and invest the proceeds conservatively. and either move it with him to Arizona or find another classic car collector who might buy it (perhaps for less) and preserve it. The $56 million dollar business took them 30 years to grow. was a power play. as a last resort. and it now employs 230 craftsmen. selling became an attractive alternative to a strike or prolonged battle. The union negotiators thought the Jaggers were bluffing.
she might have to take a lower offer just to be able to move. it’s to your advantage to know what is behind a seller’s decision to put it on the market. I think so. I’ll have to think about that. Gosh. I’ve been thinking of getting rid of it for a while. It is extremely rare—one of only 100 made with that bore and handle. 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. A person who has to sell her home because her company is relocating her.000? That’s more than I planned. sure. 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. John: Tom: John: Tom: Tom. because if the company does not provide relocation benefits. it’s still perfect. This is a good thing to know. I guess I couldn’t take less than $20. you still interested in my rifle? Of course. If you are the party making the offer on the house. and told John several times to let him know if he ever wanted to get rid of it. Just as important is the why.000.Tactic 2: Know Your Opponent’s Real Objective Each party in a negotiation will know. Example 1 Tom had always admired John’s 1861 Confederate rifle. what the other party’s desired outcome is. How much are you thinking it’s worth? John: Well. Tom: $20. for example. at some point. Are you finally ready to sell it? Yes. right? John: Sure. you know. Preparation 17 . John assured Tom that this would never happen. Make me an offer. so Tom was surprised when John called him out of the blue one day with a proposal. Just running out of space. What changed your mind about getting rid of it? It is still in perfect condition.
(Tom investigated the “market” for a restored 1861 Confederate rifle by calling a few other collectors.000. When Tom found out why John decided to sell his rifle. and we’re committed to keeping it open as a major division of our company. Tom: Okay. Conclusion Tom entered into the negotiations suspicious of John’s motives.500—we’d have a deal. I’ve been thinking about your offer. but thought this might explain John’s sudden interest in selling the rifle. One of them mentioned that someone who is negotiating with him to buy a restored Winchester rifle for $18. He doesn’t want BigManu to know this because he thinks it will hurt his negotiating position. but I could get the money to you right away. The sale price for the company has not yet been agreed to. Well. I don’t think I can go higher than $18. let me think about it and I’ll get back to you. but then he will be happy to retire. it made the negotiations easier. John: Well. Example 2 Rick. we really want to buy your company. let’s do it. Rick needs to remain president of the company for the next two years. the owner of a small manufacturing company.500 had an 1861 for sale.) Tom: John. parties to a negotiation are not likely to reach agreement. However. has begun negotiations to sell his firm to BigManu Company. Tom now felt comfortable negotiating the price. if you could come up a little—say $18. No longer worried about John’s motives. BigManu: Rick. Without some trust. fearing that this will put all of his employees out of work. and now the two-year requirement has become a stumbling block in the negotiations. Was Tom interested? Tom declined. He is two years away from retiring and does not want his business to fail before he does.Tom: Okay. so he is making it a condition of the sale that ALL current employees must be retained for a minimum of two years. we 18 50 Practical Negotiation Tactics .
Within the parameters of efficiency and effectiveness. they will make you plenty of money and more than make up for any “operational” difficulties it might cause you. You’ll be in place to participate in our employment decisions. The price they gave Rick was actually more than he had expected. and we think it’s an odd request anyway. We just can’t make good operational decisions with our hands tied. I just don’t want it to change after I’m gone. and he accepted it subject to agreement on the two-year employment guarantee clause. We still can’t find a way to do it. let’s talk about the job guarantee you wanted. In hopes of pushing the deal forward. I need to give them some sense of comfort if this deal goes through.cannot guarantee to you that ALL of your employees will be retained for two years. and I hired every one of these people. BigManu: We just don’t see a way to give you what you want on this. my employees will prove to you that they are uniquely able to run this place. BigManu: You know we want you to stay on and manage this division for us.) BigManu: Okay. Preparation 19 . they decided to put their price on the table and revisit the issue after a price was agreed upon. Let’s talk later. you will have a say in how the employees are treated. Working as a division of your company. I just can’t go through with this sale. BigManu’s negotiating team concluded that they were in the dark as to why this two-year requirement was so important to Rick. What is it you’re afraid is going to happen? Rick: I am convinced that with a two-year time frame. Rick: I built this business from the ground up. Rick: These people are the best at what they do. Without this commitment. I just want them to have a real chance to show you how good they are. (Between negotiating sessions.
to tell you the truth. I’m hoping to retire in two years. Rich almost lost the deal.BigManu: We intend for you to stay and become a big part of our company. I certainly want to do all I can until then to protect my people. BigManu: Why don’t we guarantee to you that you will stay for two years? That way. 20 50 Practical Negotiation Tactics . 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). would it? Rick: Well. Once Rick realized that he no longer risked anything at the negotiating table by making his need known. Surely you’ll be able to “protect” your people if they are as good as you say. This wouldn’t have anything to do with your own plans for the future. Let me get back to you. he agreed to allow BigManu to accommodate him without limiting their ability to make business decisions. Rick: Well. you’ll have a guaranteed “in” to protect your people.
Make up your minds.) Let’s take all our Beanie Babies to my house to trade! Okay. girls. (thirty minutes later) Bailey: So. Cybil. and go play somewhere! Cybil: Well … Okay. they have the information they need at their fingertips. Bailey: Cybil: Preparation 21 .Tactic 3: Control the Setting There is a logical reason why professional negotiators setting ground rules agree to conduct the talks at a neutral site. too. such as a hotel conference room. it’s a deal. 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. 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. and so on. the frog is everybody’s favorite. I like the frog. how can you trade the frog—he’s your best one! Dede: (Bailey’s other sister) Yeah. they control the breaks and environmental factors.) Prepare for the negotiations by controlling the setting—to your advantage or to mutual advantage. but never to THEIR advantage! Example 1 (Two ten-year-old girls are talking. (Think of the showroom tactics used by car dealers.
Both sides desperately needed to settle a property dispute. non-stop negotiations wore down the members of Team A. The chief negotiator for Team A publicly challenged Team B to “negotiate non-stop. knew that her sisters liked the frog best and that they would help convince Cybil of its “value” and help Bailey make the trade. in their own familiar setting. having set up beds. Team B. meals. Team A agreed to change the meeting place. That’s why she wanted to go to her house. until we have a settlement. and other conveniences in the adjoining room. When negotiations resumed in two months over another piece of property. After forty hours of negotiating. They were blamed for accepting the same deal that had been rejected only days earlier. not one member of Team A was chosen to return to the table. as long as they met in the boardroom of Team B. was still going strong. They had all been replaced after their decision to negotiate “around the clock” in Team B’s boardroom became known. Team A was whipped physically and emotionally. Team B had clearly used its home turf to gain a substantial advantage. Team A agreed to a settlement almost identical to the one rejected days before.” The chief negotiator for Team B agreed. around the clock. 22 50 Practical Negotiation Tactics . About thirty-six hours later. while members of Team B were able to stay fresh. The firm deadline was only four days away. Example 2 Two five-person negotiating teams had been trying to work out a deal for over a month. The physical and emotional demands of 24-hour.Conclusion Bailey. Conclusion Team A did not realize the practical advantage they gave Team B when they agreed to negotiate in B’s boardroom. although only ten years old.
I anticipated much less work. and they were much lower than this. you are likely to resent them for it and hold out. When you first told me about your project. when Will presented Larry with his bill. based on objective criteria (think property appraisals in real estate). If they tell us that they either Preparation 23 . Example 1 When Larry’s cousin offered to help Larry finish the renovation on his bathroom. I was kind of surprised at how high it was. It was twice as high as the estimates Larry received from other plumbers before they started the project.Tactic 4: Use Objective Criteria Use objective criteria to judge the quality of each side’s proposals—you will probably improve your chances of coming away satisfied. I would have charged anyone else much more. After all. This uncomfortable negotiation followed: Larry: Will. Let’s get the guys back in who gave you estimates. but was shocked at the amount of the bill. Larry had expected to pay him for his time. I did get some estimates from plumbers. Will is a licensed plumber. If you think that the other party knows more than you do. though. Things turned sour. and he and Larry have always gotten along. Larry: But Will. rather than give them the “advantage.” This can hold up an agreement and cost you in the end. it became clear that all of those pipes had to be pulled and new ones put in. When we got into it. I gave you my “family” rate. Will: Larry. Prepare for the negotiations by having an outside authority measure or weigh in on each side’s position. Larry: Well. Larry: Just make sure you’re comparing apples to apples. these plumbers certainly acted like they understood the work when they gave me their estimates! Will: Tell you what. Believe me. and show them the actual work that got done. about your bill. Larry was thrilled.
Conclusion When the other plumbers looked at the work. Example 2 After Stuart was appointed to the college’s Board of Trustees. I find your suggestion to the Board that I haven’t been doing my job right to be very insulting! Stuart: I’m sorry. Budget Officer: I don’t know what your problem is. and no one had ever questioned her performance. Settling on the right objective criteria upon which to base a negotiation requires that both parties think through their options. my first reaction was that some of the investments 24 50 Practical Negotiation Tactics . they would have had to revise the figures. Had they actually prepared bids on the work. I have been very diligent about making sure that the fund makes the most money it can without putting us at risk. 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. I certainly didn’t mean to offend you. I’ll revise my bill to meet the lowest estimate you get. Comparing the estimates to Will’s actual costs would have been counterproductive. and decided to bring the matter up at a Board meeting. he used his financial expertise to analyze the investments of the college’s endowment fund. The college’s budget officer was understandably offended.disagree on the need for that work or that they would have done it for less. He was disappointed in the performance of the fund. Larry: That sounds fair. she had been investing the college’s endowment funds for many years. they had to agree that their early estimates were low. while she wasn’t an expert. they said. From a look at the portfolio. The estimates would have been higher than what cousin Will charged.
Stuart: Yes. because she did not have the background in investments necessary to trust such advice.were stale. I find that a more aggressive investment strategy produces a better return. and the budget officer was comfortable that the risk and expense of such a strategy was small and worth the effort. the college is a private institution. but some of these stocks have really lost their value. I don’t want you directing how they’re going to go. but we can ask them to plan and cost out each move. In this situation. but I want to be involved in the discussions with them about what we’re asking. Now. how can we identify the right parties? Conclusion The two-month experiment did produce the results Stuart had anticipated. and its resources are limited. I don’t question that they were sound at one time. considering commissions and all. Budget Officer: Yes. As you know. Stuart: No problem. At the end of two months. Why don’t we ask two investment advisors who have some alumni ties to the college to do a mock investment of the endowment fund for a month or two? We won’t tell them about each other and they won’t actually do any real trades. if both of them demonstrate a similar strategy and produce better results after expenses. but such a strategy also increases risk and costs more money to administer. I have a suggestion. there might be increased risk and some expenses for commissions. 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. Okay? Budget Officer: Okay. Preparation 25 . We just can’t make up losses to the endowment fund without considerable impact on our annual budget. then you and I can talk about changing our investment strategy. but I think they more than offset the gains.
wash the cars. This strategy can build trust in the negotiation process itself. 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. It will cost me more than $10—about $35 per week.Tactic 5: List All Items to Be Negotiated Break down the issues to be worked out into separate items ahead of time. you should each put together a “package” of several items on the list and work out a win–win agreement for these things. your little sisters will want equal treatment. cut the grass. and for going out with my friends. Once you both agree on the list of things to be negotiated. not on what you want to spend. and (4) different treatment from your sisters! 26 50 Practical Negotiation Tactics . (3) more chores. has asked her mother for a $10/week increase in her allowance. Shari: Well. I need more money for clothes and CDs. Shari: I’m four years older than the next-oldest. Example 1 Shari. Mother: That’s a large increase—and we just raised it last year! Shari: Well. (2) a later curfew. what else can I do. if I give you an increase. baby-sit your sisters. besides washing the dishes every night and cleaning my room? Mother: You could cook dinners. You can’t treat me the same! Mother: Well—so we’re talking about several issues. not just an allowance increase! There is: (1) a $10 increase. Mother: But your allowance is based on what you earn in your weekly chores. and ask the other party to add to the list. a sixteen-year-old who lives with her parents and three younger sisters.
The union’s chief negotiator. which the other children would have requested as well. was avoided. Then a “win-win” solution could be determined. The trading of items (where initial demands are discussed and agreed upon) begins. and item #23 (the wellness program voucher). opens by proposing the list of items. while the mother won a Saturday house-cleaning and a night out each week. in the first session. while your Dad and I go out. Union: We will agree to your proposal on item #6 (the number of paid holidays) and item #14 (the new overtime hourly rate). Example 2 The union and management negotiating teams opened discussions with a list of 48 demands. Management: (after calculating the total value of the five items during a break period) We agree to your package of five items.Shari: Right! Mother: So … I suggest no allowance increase. but unlike your sisters. Now it is time for each side to list their desired outcome for each item. I’ll pay you $10 to babysit every Wednesday night. you get to stay out an hour later that night. Shari got the $10 she wanted and a later curfew. item #11 (the clothing allowance). Now we have a package deal to propose … Preparation 27 . Management agrees. Shari: (pause) I like it! Conclusion Shari’s mother helped negotiations along by listing all of the items being discussed. And if you clean the whole house on Saturday. if you agree to our proposals on item #3 (the paid vacation schedule). since all of their items were included as requested. An allowance increase.
Then negotiations can resume on the remaining 43 items. 28 50 Practical Negotiation Tactics . thus removing them from the discussion table. other trade-offs are proposed and agreed to until only a few items remain. the two sides will at this point sign and date the list of proposed items.Conclusion In most labor negotiations.
One day. my name is Bob Hillard. on Briarwood Road. he saw an elderly man get in his dream car and drive away. He stopped and knocked on the door. 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. and do your homework. I love this car—restored it myself. Would you possibly be interested in selling it? No. Not even for. Hi! What can I do for you? I’ve admired your ‘63 Impala for years. Bob made it a point about once a month to go out of his way and drive by the man’s house. Timing is everything! Example 1 Bob Hillard had been coveting a turquoise 1963 Chevrolet Impala Supersport convertible for several years. Prepare carefully. the following conversation occurred: Bob: Car owner: Bob: Car owner: Bob: Car owner: Bob: Hello. as he left the supermarket. (For the next three years.Tactic 6: Timing Is Everything The exact month. day.) Preparation 29 . It was nice meeting you. time of day. which turned out to be only a few blocks from his own house. but money doesn’t mean anything to me at this point in my life … Well. just out of curiosity. and general circumstances under which negotiations take place can substantially impact the outcome. One day. say. $12. Bob followed the man home. That’s a generous offer. As the man got out of his car.000? No. he noticed a FOR SALE sign in the yard. thanks. I live a few blocks from here.
Example 2 It was Sunday. The partner organization. (after a careful inspection) It’s a very nice car! I’ll give you $12. A majority was needed to pass the partnership agreement. Then it’s a deal? Yes. Conclusion While Bob did not achieve his goal during his first negotiation effort. Can I see it? Sure. Can you come back on Monday at 10:00 a. The board members had met twice before. I’ll see you on Monday. so I guess I will be selling it. the timing of his second effort was perfect and it enabled him to negotiate for the car of his dreams. I can’t take it with me. beyond which the project would have to be abandoned. A third vote at 3:00 p.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. and wondered if your ‘63 Impala might also be for sale … (obviously not remembering Bob) Well. the proposal would die at midnight. for tax reasons.m.000. 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. and I promise to take good care of it. Follow me. that’s a fair price. as a matter of fact. if a seventh vote could not be found by the pro-agreement side. to seal the agreement at the courthouse? Sure. December 31st. resulted in another 6-6 30 50 Practical Negotiation Tactics .m. had issued a deadline of December 31st. I’m moving to California to live with my daughter. Well.
and it worked. Conclusion The leader of the pro-project group recognized that they might have a unique timing advantage. The measure passed 6–5 at 5:45 p. A member of the pro-project group quickly called for a vote after the leader gave a signal. and the meeting was adjourned.deadlock. He planned for it accordingly. the pro-project leader told his members to filibuster until he gave a signal and called for another vote.m. the leader of the pro-partnership side heard someone say that the meeting needed to end by 5:30 p. in the end. the project had been stalled by 6–6 votes. as predicted. Then. during an hour break in the meeting. Both sides caucused: The leaders on each side met to negotiate a compromise. For weeks. a member of the anti-project group left the room. When the meeting resumed at 4:00 p. because one member of the anti-partnership side had to leave at that time to attend a church service he had not missed in 27 years. At 5:30 p...m.m. That effort failed. Preparation 31 ...m. timing was everything.
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A neutral. as well as their bargaining history and financial and political positions. as it can substantially alter the negotiations between two primary parties. a third party can serve as a mediator (a legislative body. Be sure you are aware of this at the beginning. Look at the personalities of each negotiator and see which side will be more vulnerable to pressure bargaining (Stage 5). Before you can do this. then Tactic #13: Set a Deadline or Tactic #11: Have an Expert Witness might be helpful. Tactic #12: Find Common Interests can be helpful. decide whether the negotiations should be continuous. For example. and Tactic #48 (Walk Away). The overall strategy chosen does not limit the use of other tactics. might step in and help settle negotiations between a union and administration negotiators. uncaring approach (Tactic #9: Control Your Emotions. cooperative manner. If you prefer to take a firm and direct approach. Identify all outside influences and hidden agendas before you develop your strategy. Tactic #43 (Nickel and Diming). for example. and Tactic #10: Make a Reciprocal Buy-Sell Offer) are also useful alternative strategies. such as a third-party negotiator. Third parties sometimes have their own hidden agendas.Stage 2: Planning a Strategy he next stage is critical: Choosing a strategy. such as a buyer and a seller or a city and its union. but in practice it will likely influence the whole process. 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. In some cases. Some of the tactics listed in this book are only suitable for single-session negotiations. you must first evaluate your needs and those of your opponent. After you have evaluated these factors. Are there any outside people who might influence the process. or one-time-only. A favorite strategy of some successful negotiators is to start with an extremely low or high offer (Tactic #7: Decide How “High” is High) in the hope that the other T Planning a Strategy 33 . or someone’s colleague or spouse? Third parties such as other buyers or governmental agencies might have to approve the agreement before it becomes final. if you want to begin in a friendly. Tactic #33 (Bluff). such as Tactic #19 (Make a First and Best Offer).
The agent explained that the seller was desperate. 34 50 Practical Negotiation Tactics . 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. with “All right. 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). and the buyer was able to completely renovate the house and still have a great deal. half-serious. His teenage sons had “trashed” the house. The buyer said he wasn’t interested.side is either caught off-guard or (in some rare cases) a negotiator will be able to achieve an unexpected fantastic settlement. two people on the team will be more successful because they evoke different emotions from the other side. By assuming opposing roles. For example. but the inside was a complete turnoff. The buyer loved the location.” The agent took the offer to the seller. Weeks later. the seller’s agent called the buyer about the property. 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). If there is a significant weakness in your position. I offer half the asking price. The desperate owner agreed.
We also think that the neighborhood has improved over the last few years. Buyer: We really like the house. If you consider the demand ridiculous. we think $160. However. so think this through well ahead of time. The market hasn’t gone up that much in six years. Carol: Maybe not. Your demand should be high enough to give you room to compromise. Example 1 Carol has been unhappy with the house she and her husband bought six years ago. Each time.000. It’s a good neighborhood. with no success. we’ve put a considerable amount of money into a new air-conditioning system and in redecorating. Carol wants $160. but certainly not exceptional in any way. as well. Buyer: The air conditioning might have increased the value of the house. six years ago you bought it for $60. but not so high as to end the negotiations before they begin. and then look at the demand from your opponent’s perspective. and just refuses to reduce it. one buyer shows some interest. it is likely that your opponent will.000 is very high. Be realistic. After all. your request must not be so low that the other party concludes that you are not negotiating in good faith. but the house has increased in value. Finally. You are not likely to get more than you request. but we simply can’t take less than $160. First. She has had it on and off the market for the last five years. Anyone buying the house would want to change wall colors or add new carpets. but the redecorating is of little value. so do not underestimate what you might be able to achieve. And I don’t see a lot of difference in the neighborhood. but quite frankly.000. her real estate agent told her that they were probably not going to get a buyer because she is asking too much. Planning a Strategy 35 . Surely there’s some flexibility in your asking price. Carol: We really want to sell.000.Tactic 7: Decide How “High” Is High Your first demand in the negotiation process is the most important decision you will make.
as to how you think the name is going to benefit you. Buyer: Good luck!! Conclusion The buyer expected Carol to counter the $100. were still alive.Buyer: What if we offered you $100. When Carol refused to budge. enjoying a statewide reputation for quality representation. Here’s how the initial negotiations went: Partners: Well. and then $10. Neither Edward Bits nor Edmund Bites. but they have no idea what the value of their firm’s name might be in this nearby city. 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. Inquiries to other law firms were not very helpful because in almost all of the instances. the founders of the firm.000 or 1% of profits (whichever is less) over the next ten years in order to use the name. though. Example 2 The law firm of Bits & Bites was a Sioux City institution. 36 50 Practical Negotiation Tactics . The partners are interested in selling the name. In any event.000 immediately. the buyer took it as a signal that either Carol didn’t want to sell. We’re curious. The other law firm was prepared to pay $100. Carol drove off a potential buyer by setting an asking price that was just too high. we are certainly interested in your request to “buy” our firm name to use in your city. 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.000. or she has unreal expectations.000? Carol: We really can’t take less than $160.000 offer by coming down in price at least a little. the transaction also included some degree of consolidation of the law firms involved—not just the use of the firm’s name.
we want $500.000 initially. And even though you don’t have an office in our city. but we get to keep all of the money we’ve received up to that point. We probably won’t be insulted. (concerned about loosing the opportunity) Wait. Give us some range. Using the Bits & Bites name can only enhance our profitability. To offer it now would be an insult. expect to pay for that. Well. of course. Let’s just pretend this didn’t happen. it would be impossible to create a new name out of the names of our key partners. that’s just our initial figure.New law firm: We are establishing a partnership of ten lawyers—the top two moneymaking attorneys in each of five local firms. we reserve the right to withdraw our permission. I really don’t feel comfortable doing that now. and then 10% of your profits each year for as long as you use the name. What number were you thinking about? Well. We weren’t really thinking about that amount of money. because you are in the state capital and your firm has handled a lot of high-profile political cases. one of these two attorneys carries the surname of the firm they are leaving. because we were not even close to that number. we do. And we. you have a very solid reputation there. (surprised) Well. that you anticipate to build a very profitable law firm. starting with the ten partners you describe. I’m kind of embarrassed now. that is a very high number. Partners: New law firm: Partners: New law firm: Partners: New law firm: Partners: New law firm: Planning a Strategy 37 . In every instance. then. So. Yes. I guess this is just not something we’ll be able to pursue. Thanks so much for meeting with me. If at any time we feel that you have “harmed” our name. We should assume.
38 50 Practical Negotiation Tactics . rather than negotiate. since they had initiated the contact. Bits and Bites should have let the prospective firm make the first offer. In this situation. because there was no “objective” criteria available to help them set a reasonable price. Both parties were probably at a disadvantage. The price they were willing to pay would have indicated what the naming rights were worth. Either side could have asked for too much. It immediately dropped the idea.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.
etc. Peggy: I assumed they went with the mower. Peggy: Planning a Strategy 39 . only three years ago. Peggy: That’s fair. Andy: No. while another acts difficult. Peggy: So. I’ll go home and you can call me if you two can reach an agreement. Half what it cost us new. since they are sitting out in the driveway with it.Tactic 8: The Good Guy/Bad Guy Routine The “good guy/bad guy” routine is a useful one. Paula: Go ahead and ride it home. I don’t know what the deal is now. 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: I’m hearing one thing from Paula and another from Andy. Your opponents will want to avoid confrontation and unpleasantness with the “bad guy” and are likely to be more willing to cooperate with you. not for $1. threatening. angry.200! We should get $1. what’s your price? Andy: $1. we won’t need it at the new condo. I heard that you want to sell your riding mower. Andy and Paula.200.400 if the catcher and can are included. Andy and Paula: Yes. Andy: I want them… Paula: Go ahead and take them. (bad guy) and implies that his or her side will hold firm on their demands. I want to keep those. and I know how you take care of things. And take the leaf-catcher attachment and the gas can. Peggy. you’re really moving! I hate to see you leave. Andy: No. so I’ll take it. They cost about $300. Example 1 So. I can use them.
Conclusion Peggy thought she was getting the old “good guy/bad guy” routine. firm offer if they decided to continue negotiations.200 will be about right… Sandy: I can’t begin to pay that! Liz: Calm down. the quality of the technicians’ work. causing our reps to spend hours on the road. Miguel: But not at this ridiculous rate. For the past three years. we’re here to negotiate a new service agreement. Let’s talk. we’ve been fairly happy with your responsiveness.000 per month is one of the highest in town. She realized that it put her in an impossible negotiating position. Example 2 Sandy (business owner): Miguel and Liz (representatives of a computer firm).000 in service calls last year alone because your damn people don’t take care of the equipment. and your training programs. Sandy: What? First of all. And we need to add a clause that holds your company responsible for machine damages. We estimated that it has cost us more than $50. Miguel: I’ve figured $4. your rate of $3. Sandy. And we want to change the 24-hour service response time to 48 hours. your account has taken too much time. 40 50 Practical Negotiation Tactics . Liz: But we still want to renew your contract. perhaps even unintentionally. Miguel: Well. She very wisely recognized the routine and forced Andy and Paula to give her a clear. You are located outside our primary service area. And cut the training hours from 55 to 20. Sandy.
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 hope you can meet my terms.m. What can I do? Let’s try to negotiate something reasonable before Miguel gets back. with a position he knew was unreasonable. Any luck. these terms will put me out of business—I’m a small 20-person operation. I’ll explain on the way back to the office. (Three hours later) I’m back. Our customer base has grown. Sandy. Conclusion Miguel and Liz used the good guy/bad guy tactic in the classic form: Miguel scared and threatened their opponent. and it’s not efficient enough anymore for us to handle smaller firms—especially those outside our region. If not. I’m going on to lunch. Miguel! We’ve worked out a deal I think you can live with. I’ll stop back about 2:00 p. Liz. Planning a Strategy 41 .Miguel: Sandy: Liz: Sandy: Liz: Miguel: Liz: No. even though it was far above the previous contract. but Miguel’s right. I want to keep you as a customer. I’m afraid our relationship is over. Sandy. Sandy. you two? Good news.
he was very unhappy. made some very good purchase decisions for his small business. It seems that the rate you are charging me on my home phone is $1. This will put you at a distinct disadvantage from this point on. I have a problem with my recent bill and my billing rate. such as deals on computer packages and phone services. He had. in fact. The fault was partly his because he did not stay on top of changes. He decided that the best approach was to act indignant when he spoke to the company representative. Here’s how the phone conversation went: Customer representative: Mike: Over-the-Air Long Distance. How may I help you? Hello.Tactic 9: Control Your Emotions Stay cool. A display of temper or frustration can indicate to your opponent that you are uncomfortable with your side’s negotiating position and they will assume that it is weak. So. when he discovered that the long-distance company serving his home phone was charging him four times the rate currently being marketed by that company.10 a minute rate at my office location. 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. Control your emotions and use them to your advantage! Example 1 Mike prided himself on being an informed and educated consumer. 42 50 Practical Negotiation Tactics . Your opponent might conclude that they have made a serious misjudgment and want to make a conciliatory move to get you back to the bargaining table. I noticed this.00 a minute. because we have had a sick relative out of town and we used long distance a lot this past month. and might even harden your opponent into an unfavorable position (for you or for both of you). but I recently was sold a $.
Mike. although he wasn’t really angry) Are you suggesting that it was my responsibility to advise you when one of your “offers” was available to lower my rates? How would such information even come to my attention? More importantly. Had you brought this to our attention before. Mike: Customer representative: Mike: Customer representative: Planning a Strategy 43 . Customer representative: Let me pull up your account. 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. how would anyone who might only have residential service even know to ask? Well. I would have known I was paying too much. to begin now. I would think you would have given me the best rate you offer new customers. but this was quite a shock.10 per minute rate on your long-distance service. But as a very good customer of yours. I see that the rate you are being charged is the rate we offer for the type of service you have with us. But I am able to offer you a $.I expected the bill to be higher than usual. (beginning to sound irritated. we certainly would have discussed your options. I realize that that might be the rate I started paying when I first took your service over eight years ago. It hasn’t been increased at any time. of course it is not always possible to give existing customers some of the “offers” we have out. and I also realize that if I had examined my bill closely. Well.
44 50 Practical Negotiation Tactics . after all. We certainly don’t want to lose you as a customer. If you can’t get me someone to talk to. strategic anger and abusive behavior. I would hope that you would credit my account for this better rate for past service. and I should be treated with more respect! I’m sorry. In doing so. Is your supervisor there? I’m certain that he cannot adjust your account retroactively. either.10 per minute. I … (interrupting and in a stern. Wait—I’ll get my supervisor. He was walking a thin line. however. don’t think this is directed at you personally. Customer representative: Mike: Customer representative: Mike: Customer representative: Conclusion The supervisor waived the long-distance charges for the $500 bill and adjusted Mike’s rate to $. she kept Mike as a residential customer as well as a business customer. but I can’t do that. (with a much angrier tone) Madam. between controlled. and I want to speak to someone in authority so I can terminate my service. The latter would not have produced the desired results. which should rightly be $50. Mike’s willingness to show a measured “flare of temper” brought results. The best we can do is fix the rate for the future. but I am very angry with Over-the-Air Company. controlled voice) I need to talk to someone who can do it immediately. there’s no reason for this conversation to continue.Mike: I would imagine so. But I’m looking at a $500 longdistance bill. I am. a long-time customer of your company.
lesssenior employees might be at greater risk of injury because they have to handle explosives.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 owner was afraid that if the mostsenior employees routinely passed up the overtime and the overtime pay. Where are your managers? Where is the training necessary to make Planning a Strategy 45 . The employees’ negotiator finally decided to use “indignation” to break the stalemate. Owner: Now. They will be putting the plant AND their fellow workers at risk by not being here. The owner told the employees that he was worried that during the overtime shifts. Just admit that what you really don’t want is for your best employees to realize how much of their pay is from the overtime they work. and it’s getting old. and that they should be asking for a fairer base wage for the work they do for you. The most-senior employees want to have the right to refuse overtime and have those less-senior employees take the overtime. I’ve got to have the employees with the most experience to protect this place. Working with fireworks is working with explosives. 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. Owner: I’m just not willing to let my best people refuse to work the extra shifts during our busy season. and it’s not what we’re even talking about. they would become dissatisfied with their pay and want their base pay increased. that’s just not fair. Employees’ negotiator: (with a stern voice) You have been saying this for three weeks. On those overtime shifts. and you just can’t be too careful.
In practice. Then you can’t have it both ways. After the employees’ negotiator threatened to walk out. The safety of the plant demands it! (standing up to leave) This is just ridiculous. but not all? Conclusion The owner was on shaky ground with this one. The end result was that the most-senior employees did win the right to refuse overtime. Either they are properly protected. You are not addressing the real issue for you: money. But the fireworks business is a business that involves risk. I’m not coming back. either the employees are properly trained. All I’m saying is that the most-senior employees have to be on the overtime shifts. What if we were to agree that the senior employees could refuse half of the overtime offered to them. Had the owner let him leave. he became more reasonable.Owner: Negotiator: Owner: Negotiator: Owner: sure these employees can protect themselves? Are you telling me that your employees are being put in dangerous conditions without adequate training and safeguards? No. (He begins to walk out. though. Until you’re ready to talk about that. the negotiator would have had to find a way back into the negotiations without losing ground. or they’re not. most of them continued to take all the overtime they could get. sit down. now. But we protect our people.) Now. No one who takes a job with us can be unaware of that. Sit down. The negotiator was also running a risk with his flare of temper. don’t be so hasty. or they’re not. 46 50 Practical Negotiation Tactics . That’s all. not at all.
called the “Reciprocal Buy-Sell Offer. Mike. Both sisters covet it. you will decide if you want to buy it for that price or receive that amount from Mary Anne (but lose the grinder). All the rest of the estate has been divided among the family. Mike: Mary Anne. has decided to use the “reciprocal buy/sell offer” process to settle this last piece of the estate.” is the recommendation of Howard Raiffa. Planning a Strategy 47 . The first party decides on a price for which he or she will either buy or sell the object to the second party. you’re the oldest. However. The second party then decides to either buy it at that price and pay the first party. (two days later) Mary Anne: Well.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. I’ll give you 48 hours to decide the price. a well-known negotiations professor from Harvard University. The following examples explain how it works: Example 1 Susan and Mary Anne learned from their brother Mike that their recently departed parents’ estate included a somewhat valuable antique coffee grinder. Susan. A fourth option. 2) They can flip a coin. with winner taking all. or sell it to the first party and consequently receive the full amount from the first party—thus giving up the object. I’m willing to pay or let it go for $800. with the highest bidder paying the amount to the other side in compensation for their loss. and split the proceeds. my kids and I looked on eBay and everywhere else and found out that coffee grinders in perfect condition sell for about $500. Then Susan. since this one is in perfect shape and it was Mother’s. the executor of the estate. 3) They can agree to sell the object to a third party.
to submit a sealed offer to buy/sell the business sixty days from today. Two business partners had been working together for ten years to build a successful business.” Howard: Since in this case you are talking about a multi-million-dollar business. Both sisters felt that the process enabled them to resolve the issue fairly. Thanks for making this last step as easy as possible. They thus were able to determine the highest price each was willing to pay for it or receive for it. but each partner had grown to dislike the other and wanted to end the partnership (but continue to own the business without a partner). the lower bidder must agree to sell his half-interest to the higher bidder at a price that evenly splits the difference between the two bids. Agreed? Abe and Bobby: Sounds good! Let’s draft and sign a written agreement detailing the process. Conclusion The “reciprocal buy-sell offer” process caused both Mary Anne and Susan to research the market value of the coffee grinder. (sixty days later) 48 50 Practical Negotiation Tactics . Both came to Raiffa to help negotiate a settlement. Lectures on Negotiation Analysis. I choose to buy it. in writing. I’ll pick it up tonight. You will both agree. Example 2 Howard Raiffa described a consulting situation in which he used the “reciprocal buy-sell offer” process in his book. Here is my check for $800. and then decide how much more “emotional value” it held. They accepted his suggestion to use the “reciprocal buy-sell strategy. After I open the bids.Susan: Mike: Well. I suggest a slight modification to the process. which will bind us to the outcome.
and both men had carefully estimated the market value of half the business. Bobby. Planning a Strategy 49 .Howard: Abe: Bobby: Abe. but only if they could become the sole owner. and we close by July 1st. Bobby was willing to pay more than Abe to remain sole owner. you agree to sell your half-interest to Bobby for $180 million. and to close within ninety days. I will arrange to sell him my half-interest for $180 million. 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. your bid is $170 million. Agreed. Abe. your bid is $190 million. Conclusion Both parties wanted to keep the business. The partner who was out-bid in a fair process received a fair settlement: $10 million above what he was willing to pay.
Example 1 A young couple were discussing a possible purchase of new furniture for their living room. and forcing him or her to control the discussion of the issue. It can also work in reverse: establishing the other person as the expert. the one that was the most expensive was superior. so when the husband wants them to make an 50 50 Practical Negotiation Tactics . Conclusion The husband became the “expert” in this situation by doing the homework.” and then argue for the frugal alternative. Based on seating capacity. The wife was determined to buy the least-expensive brand rated excellent by consumer publications. he decided upon a strategy: First establish himself as the “dimension expert.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. They both expressed an interest in finding a couch that offered the most “interior” space.” but there were substantial differences in price—differences that the wife did not see as a problem. This approach can also be reversed: The wife in this situation is a banker. He thus ended up having greater negotiating power. she glanced at it and immediately deferred to his opinion. The couple decided to limit their selection to those rated “excellent. They knew that sitting on dozens of couches in a single day would be confusing and would make it difficult to determine which one is the most comfortable and roomy. This strategy worked. the one he wanted (one of the least-expensive) was superior. Looking at these statistics. and the husband felt like he saved them hundreds of dollars. When he showed his wife the detailed spreadsheet. The husband found the dimensions of the couches in the brochures and Web sites. and created a spreadsheet to compare the five best-rated couches on their list. When it came to comfort.
Preferred Provider Organizations (PPOs). you gain an edge when negotiating a new plan for your company. he argues that she is the expert.” If you spend many hours learning about Health Maintenance Organizations (HMOs). a negotiator in a similar situation was able to get the other side to agree to include a plan that they had opposed only days before! Planning a Strategy 51 . and should therefore handle the problem. 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. He claims to lack the knowledge or insight to do the work—which he is then able to avoid! Example 2 A negotiator can often gain a valuable advantage on issues such as medical insurance or labor contracts by doing the homework and becoming an “expert. and Point of Service (POS) plans.
here’s what they said to her: I think I should be rewarded with the piece of cake. The boys quickly huddled. you want to reach an agreement that is favorable to an outside party. because I am so conscientious about my paper route. and so on. neither of you want to be embarrassed at the outcome. and I really love the banana/butternut/ sour cream frosting on this cake. I wouldn’t care so much. I also took out the garbage last week without being asked twice. These positive things are part of your goals and objectives. Russ: 52 50 Practical Negotiation Tactics .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 missed dessert the other night because I had to get to baseball practice. The two boys fought over the last piece of everything. and then asked their mom for a chance to negotiate with each other. Example 1 When Russ and Bill got home from school. That simply rewards your continual squabbling. This time. and neither boy was very happy. When they boys returned. Mom: I’ve decided that I’m not going to cut this piece of cake in half and give you both some. particularly when things seem to be at a standstill. like we usually have. they saw that there was one piece of cake left over from their mom’s bridge party. They immediately began to fight over it. she made them share whatever it was. point them out at the very beginning of negotiations and refer to them throughout the process. Be clear on what you have in common at the start. If this was chocolate icing. you both want to complete negotiations by a certain date. the last piece of cake will get thrown away. Unless you can convince me otherwise. and their mother was tired of it. she decided to try something different. This is done by deciding at the outset what you both have in common: You both want to reach an agreement. Usually.
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. and I really like white cake.m. so that your customers can park on the street. I can have the part with the icing and Bill can have the part with the cake and filling. The last cake we had was chocolate cake. and that’s not my favorite either.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. so these hours worked out well. and keeps it open longer so she can attract customers on their way to and from work. she got a visit from some of the residents.m. Planning a Strategy 53 . One day. We really want you to go back to your original times. Example 2 Marilyn’s Memorabilia Store was located along the main commercial street of a residential neighborhood.m. We realized that if we cut the cake lengthwise. and better than a fast-food restaurant with late-night hours and a drive-through window. Customers have started to park in nearby apartment lots. your new shop hours have caused your customers to park in our parking spaces. I helped with the bags without being asked twice. Residents: Marilyn. and her children were in school. This cake is white cake. she opens her shop at 7:30 a. Now that her children are in college. because there is no parking along the street during morning and evening rush hours. That sounds like a wonderful solution. to 3:00 p. It was the type of shop the nearby residents preferred. Marilyn originally set her shop’s hours for 10:00 a. 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.
Between 7:30 a.m.m. I really need that extra income to stay in business.m. So.. and see if it works. we have to be willing to tow the cars that violate it. and 6:00 p. and usually the car is gone by the time a tow truck shows up anyway. then we’ll try and accommodate you. and I close at 4:00 p.m. It is very costly to have cars towed. The parking lot used for apartment residents is probably full from 7:30– 9. We think they’ll be agreeable to the morning parking.. The shared parking arrangement did work out for Marilyn. and between 4:00 p.I’m sorry this is happening.? Residents: We certainly want you to stay in business here. Do you think the residents of the apartment house would agree to let me advertise that my customers can park in their lots between 7:30 a. Do you? Marilyn: No. Lets try it. 54 50 Practical Negotiation Tactics . my customers can’t park on the street. let’s see what the options are. If you need to have the shop open more hours. and the residents needed Marilyn’s shop. rather than after work. Identifying their shared interests caused the nearby residents and the customers to reach agreement.m. I have to convince them to come before work.. or so anyway. and is probably empty in the afternoon if they haven’t gotten home yet. if residents haven’t left for work yet.m.m.m. and 9:00 a.m. and 9:00 a. Marilyn: Conclusion Marilyn needed the extra parking.00 a. But in order to keep my new customers. I don’t think that would be very good for business. if I go ahead and open the shop at 7:30 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. Okay. But I really am increasing my sales by being open longer hours. And we don’t think you want your customers’ cars towed. Most of our residents are gone by 8:00 a.m. the off-street lots probably won’t be used by my customers.
m. I don’t. how should we go about dividing up the furniture and possessions? I can’t talk about it. etc. and start choosing things. But at Planning a Strategy 55 . we can each take turns selecting things … Like each tool or dish. one at a time: the youngest. Jenny: Everett: Sue: Everett: Mary: Sue: Everett: Mary: Jenny: Everett: Okay.Tactic 13: Set a Deadline Be sure you know well ahead of time what the deadline is for completion of negotiations. Example 1 Four adult children have gathered at the home of their recently deceased mother. Then we can sit down at this table at 3:00 p. How can I do that? You all live in this town and you know this house. A few hours? I can’t—I’ve got to leave shortly for the drive home. let’s all take two hours to look around and make a list of things we might want. Well. let’s all take a few hours to look around. but it can also work against you if you set one that is unrealistic or you fail to plan for it adequately. 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). the first. A deadline can help you make the best possible agreement in the shortest amount of time. That will take days! I haven’t been in this house for twelve years. We just don’t have the time … We’ve got to do this—the house is sold! Okay. Deadlines can be imposed externally (such as the government’s deadline to get a tax break) or internally (set by one side. Well. 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.
Agreed. and I appreciate your interest in the historic structure. Example 2 Allan: As the negotiating team for the city. Okay. can sell or give away what is left. being the oldest. Allan: What! Why did you not tell us this before? David: We never thought you would take three months to get to this point. And besides. December 31.. 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. we all leave. if I cannot carry a negotiated and signed deal to my board by noon on December 31.m. Sue. we cannot agree to these development plans submitted by your company until we have reviewed how they will affect the historic buildings. 56 50 Practical Negotiation Tactics .Sue: Mary: Jenny: 5:00 p. this is December 29. Allan: Let me confer with the city attorneys. then the whole deal is lost because my company will lose $10 million in tax benefits under a federal law that expires on midnight. All of us must come back before Saturday to take what is ours—agreed? Okay. if we are not finished. David: I understand your concern. However. your attorneys know the tax laws.
we can’t get the reports we wanted in 48 hours. Planning a Strategy 57 . Obviously. and I don’t like it.Allan: (One hour later. Conclusion Knowing the external deadline gave David a significant negotiating edge.) I understand the December 31 deadline. He waited to bring it up until it was clear that doing so would help him get the settlement his side desired. Let’s continue.
before your opponent tries to catch you off-guard. There will be times during a negotiation when you will want to catch your opponent off-guard. and you can neutralize its effect on the negotiations. 58 50 Practical Negotiation Tactics . I’ll give you money for it. I’ll need to buy it again. and Jason knows he is getting a D in Spanish. Did you buy it? Jason: Yes. Mom: All right. Control the use of the information. but remember that both sides have weaknesses. while watching TV. But don’t lose it again. but his grades are good. we need to talk. as well as those of the other side. Have a clear goal in mind AND all the information you need to make your points. Mom: I gave you money to buy a workbook a few weeks ago. and we used it a couple of times. first-quarter grades are coming out at the end of the week. Unfortunately. and one of the ways to do that is to reveal a weakness at the beginning. We had one at the beginning of the semester that we were using pretty often. as well as strengths. His mother disapproves of his study habits. He knows that a D will mean that he will have to change the way he studies. He decided to preempt the discussion in order to make the best deal. and I missed some assignments. but I have a problem in my Spanish class. I bought the second one. Jason: Mom. Example 1 Jason likes to play video games as soon as he gets home from school and do his homework later. One day mine disappeared. Then the teacher went back to the first one. The objective is to negotiate from a position of strength. and this usually means having all the right information.Tactic 14: Don’t Always Hide Your Weaknesses Be sure you know what your strengths and weaknesses are. don’t get mad. Now. Mom: What’s that? Jason: A few weeks ago I lost my workbook. so he was able to prevail upon her to let him continue. but that was actually a different workbook.
I’ll give you more time. but I think you do need to change your study habits. Conclusion All of Jason’s grades did improve over the next quarter. Since I missed some assignments. Example 2 Jane once owned a piece of property she wanted very much to sell. 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. he was able to continue to study the way he wanted to. all right. English. I’m getting a D in Spanish for the first quarter—but it’s not because I’m studying in front of the TV. His explanation made sense.Jason: Another thing. It’s because I didn’t have the book. Environmental Science. I don’t think you’re taking your schoolwork seriously enough. And those are hard classes—Algebra. Although his Spanish grade was only a C+. Mom: Well. but all three deals Planning a Strategy 59 . and since he offered her the information up front. Mom. I think you need to give me the rest of the semester before making me change the way I do my schoolwork. I’m sorry. The work I did turn in was fine. or borderline B. If I don’t pull the D up to a C or better. Thanks. B. And I know I have to be better about getting in all of my assignments. The location was ideal for a convenience store or a fast-food restaurant.(maybe C+). my study habits are okay. Mom: Well. I think I can do that. But that Spanish grade needs to come up to a B!! Jason: Okay. Pizza Boy was interested and had even made inquiries about the property. All of my other classes are A. Its owners found out that at least three other buyers had been in contact with Jane. and the D is directly related to my losing the book. Jason: Spanish is just one class. so there’s no reason to think I need to change my study habits. she trusted it more. then I’ll agree to make changes. Obviously.
They decided not to fight a disgruntled neighbor. really. The real problem. Jane’s up-front disclosure of a potential problem allowed Pizza Boy to weigh the negatives with the positives. Pizza Boy was prepared for her call. I’m very happy you’re interested in my property. which was way below the price they were actually willing to pay. What are you asking for the property? Conclusion Jane told them her asking price. The Pizza Boy people figured that Jane’s asking price must be too high or that she is unwilling to negotiate. Furthermore. When she contacts you.had fallen through. Actually. Pizza Boy: We’ve checked the property out. A tentative deal was signed. however. was that Jane’s neighbor had contacted each of the previous potential buyers and complained about their plans to use the property. and was able to politely ignore her. Jane: Oh. This is how the negotiations went: Jane: Pizza Boy. we’re not interested in neighborhood fights. The neighbor’s attitude suggested that there would be major resistance in the neighborhood if Pizza Boy tried to put in a commercial establishment. But unlike your company. however. I know. though. I’ve got to warn you—you might hear that there is neighborhood resistance to your putting in a pizza restaurant. When the neighbor heard about the new buyer. either. 60 50 Practical Negotiation Tactics . Pizza Boy: Well. since they were well aware of the negatives. I think you’ll find that this is only one person. it’s only the neighbor to the right of the property who has a problem. I’m sure. she will want you to think it’s the whole neighborhood. she started her campaign to keep them from closing the deal. Pizza Boy: Well. there were no unpleasant surprises to stop the deal. the other interested buyers already have businesses in the neighborhood. and it’s zoned for commercial use. You are a big enough corporation to withstand her objections. let’s assume that you are right. What are her grounds for complaining? Jane: She doesn’t have any.
by Michael R. “Distributive” bargaining (“win-lose” or “zero sum”) is used. 190–192. as illustrated in the following figure: Seller Resistance Point ($22. 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. Many negotiators make their initial offer the highest acceptable offer (Tactic #19: Make a First and Best Offer).750) Target Point ($24. Carrell and Christina Heavrin. quick agreement.Stage 3: Exchanging Initial Offers any offers and counteroffers are made during a typical negotiation—sometimes even hundreds.500) Fig. The initial offer sets the tone of the negotiations and reveals something about the strategy of each side. Another common strategy is to start with the status quo.000 22 23 24 25 26 27 Initial Offer $28.500) M $21. Adapted from Labor Relations and Collective Bargaining.000) Target Point ($23.500) Resistance Point ($25.000) Settlement Range ($22. This is a practical starting point that will not anger the other side (and might even be expected). such as proposing to continue at the current rate or price. 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. None is as important as the first one. for example. 2: Distributive Bargaining Process. The negotiator firmly states that it is their best offer in an attempt to gain a nice. Exchanging Initial Offers 61 .000 Buyer Initial Offer ($21. 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.750–$25. (2004). The initial offers of both parties are usually set reasonably above or below what each believes to be the settlement range.
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. the seller would immediately accept it because it is greater than the target point and the buyer would suffer a winner’s curse. Resistance points are the maximum or minimum beyond which a negotiator is likely to consider an offer unacceptable (and possibly walk out). thus starting out on a positive note. it is termed the settlement point – not the “right price” or “fair price. When the two parties agree to a price within the range. these points have set the outer limits. 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. You can use a tactic in making your initial offer that will give you an advantage: When multiple items or issues are on the table. Two extremely helpful tactics to be used immediately after initial offers are made are Tactic #15: Caucus and Tactic #20: Posturing. Experienced negotiators will begin the negotiation of several items by quickly proposing such a package. 62 50 Practical Negotiation Tactics . See Tactic #18: Agree on Something As Soon As You Can.000) is reasonable.In this example. the process quickly narrows to the range between the initial offers. usually.000 and $28. the other side does not agree to this value). The settlement range is the distance between the resistance points. After initial offers are exchanged. In the example.000. The most common method of negotiating more than one issue or item is to combine two or more in a deal that gives each side something (Tactic #17: Package Items). A target point is the desired settlement value a party has set as a goal when negotiations begin. 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). and is the range in which most negotiations actually occur. if the buyer’s initial offer was $25. thus producing a true “win-win” negotiation.” but the settlement price. each initial offer ($21.
Tactic 15: Caucus If you are part of a negotiating team. make use of the opportunity to call for a caucus. And that’s just my friends from school! I haven’t started Exchanging Initial Offers 63 . Shelly: Twenty friends? You’re kidding! I’ve just started on my list. If the negotiations are heated. A caucus is certainly called for if individual members of the team become agitated or express frustration with the progress of the negotiations. A caucus gives you an opportunity to work out problems with your own team in private. We don’t want it to be a late evening. a caucus can be used as a break to calm the situation down. You can invite up to 20 of your friends. so her parents sat down with their daughter to discuss the details.m. Mom: We’re planning on having your party here on Saturday night. and presumably had an agreement. If negotiations seem stalled. We’ll just have chips and soda. 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. and I already have 25 names. Unfortunately. A caucus is when a negotiating team calls for a break and leaves the negotiating table to confer in private. If the team is feeling pressure to concede on certain items. Example 1 Shelly’s “Sweet Sixteen” party was coming up.m. If the negotiations have suddenly gone in an unanticipated direction. so we’ll have the party from 7:00 p. calling for a caucus gives you a chance to get your team to recommit to a particular course of action. without revealing their ideas to the other side. Her mom and dad had already talked about it privately. the negotiations got out of hand when Shelly’s dad forgot what had been decided. because it might disturb the neighbors. To do so in front of your opponent would obviously undermine your team’s position in the negotiations. or if a member takes on a role in the negotiations that has not been assigned to them. call a caucus so both sides can brainstorm new solutions to keep the negotiations going. Shelly.–10:00 p. There are many ways to use this strategy.
And can we bring in pizza? Or maybe one of those “mile-long” hero sandwiches? I like those—let’s do the hero sandwiches. (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. I could invite everyone!! Hold on! I thought we agreed that this was to be a simple party. Actually. Shelly’s parents reviewed their first planning discussion and went over what Shelly’s mom thought they had already 64 50 Practical Negotiation Tactics . We’ll get a band—everyone does. That would be great! It would keep everyone entertained.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. I think the band would be fine. We could play records and you guys could dance. we’ll call you when we’re ready. alone.” They would never expect a party to end before midnight. Dad. (with some irritation) I’m not sure.m. okay. Oh. Mom! This is my “Sweet Sixteen” party. I think we can handle a few more kids—how about 35? And midnight sounds okay. In fact. I’m sure we can ask them to tone it down a little. and then the number of kids won’t matter. It’s special!!! Well. we need to talk. I guess the VFW will work. Time out! Dad.—that’s so “baby. That sounds like too many for here at the house. Shelly. And they can’t go home at 10:00 p. we could rent the VFW hall. And midnight is definitely too late. Jerry from down the street is in a really good band that all of the crowd likes. (excited) That would be so cool.
Mom: Shelly: Mom: Shelly: Mom: Shelly: Dad: Shelly: Mom: Shelly: decided. But we can have the band.m. Example 2 The contract negotiations between the company and the union had been going on for days. and we will need to approve the list. to 11:00 p.) Okay. which was to make sure Shelly’s Sweet Sixteen party was a fun and safe evening. but your dad and I agree on getting a DJ to play. midnight. but we’ll schedule the party for 8:00 p. When they called Shelly back in. please!! 11:00 p.m. Your mom and I agree—11:00 p. That’s so lame.m. The item currently on the table was the company’s offer to give each Exchanging Initial Offers 65 . this mom-and-dad negotiating team became unglued during the negotiations. Mom’s call for a caucus gave them a chance to regroup and re-state their original objective. we will be better able to chaperone. A DJ? I guess that’s okay. But you are limited to 40. All right. and not a huge production. sorry. Okay. her mom presented the revised proposal. Agreed. That way. but no Sweet Sixteen birthday party decorations. is for little kids!! No. and you can invite more friends. we’re going to rent the VFW hall. Does that mean no presents. causing them to lose control and make compromises they hadn’t intended to make. too? No way!! I want presents!! Conclusion In spite of their prior planning. And we’re serving chips and sodas. Dad. can’t we? No band.m.
The company’s negotiator didn’t recognize the misunderstanding. many will want to use it for their children’s education. I’m just saying that tuition benefits are sometimes a good substitute for health insurance. The union’s lead negotiator misunderstood the proposal. Union: Why are you so concerned about new job opportunities? Are you holding out on us? Company: No. 66 50 Practical Negotiation Tactics . A lot of employees have spouses who can get health insurance coverage through their work. it’s a good proposal. and thought he was being asked to choose between a health insurance plan and a tuition benefit plan for all members. What is this. and the following conversation occurred. Union negotiator #2: Please—just a moment outside. Tuition in place of health insurances? They’ll think I’ve lost my mind. Union: (angrily) I’m not presenting this proposal to my people. 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. 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. The tuition benefits will encourage the workers to be prepared for new job opportunities. Union: You’re offering a choice between health insurance and tuition payments? What kind of a deal is this? Company: Hey.
we’ll be back in 5 minutes. (After Negotiator #2 explained that the choice of tuition or health insurance benefits would be an individual choice for each unit member and not a change in the contract for everyone. I didn’t understand that your proposal was to allow each individual member to choose between the health coverage or the tuition benefit. and the parties were able to complete their negotiations. Negotiator #1 regained his footing.) I’m sorry. let’s move on. I thought that the contract would cover one or the other for everyone. the parties returned to the room. Good. Now.Union: Union: Company: Okay. I think that what you’re proposing is a really good idea. Conclusion Negotiator #2’s timely call for a caucus so she could explain the miscommunication in private saved the session. Exchanging Initial Offers 67 . and I apologize for explaining it poorly.
according to my figures. (Salesman returns with manager) 68 50 Practical Negotiation Tactics . Example 1 The buyer. it’s a great car and a fair deal. Hobbs. quickly checked the dealer’s inventory of sport utility vehicles in stock. Mr. and noticed that none of the vehicles have a green exterior. not revealing that the item exchanged is a “throwaway. 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.” Throwaway items are those things that hold little or no value to you. but in reality.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. you don’t want your opponent to know what these things are. Salesman: Well. we’ve got expenses and we need to make some profit. but he makes a mental note to use color as a “throwaway” item. when the two sides are only a few dollars apart. I’ll go get him. according to the Consumer Reports listing of the cost of the vehicle. However. At a point late in the negotiations. A has gained something of true value and given up nothing he values in return. but … Salesman: But what? Hobbs: Well. so be sure you present them in a way that suggests importance. Salesman: Let me talk to my manager. He doesn’t really care about the color of the new vehicle. I can go to another dealer and get a green exterior—the color I like best. It is a useful tactic in any negotiations. Hobbs: Yes. but the key to making it work is to include the throwaways in an initial list of demands OR add it in at a strategic time. I know. this conversation takes place: Hobbs: Yes. you are making $200 profit over the true dealer’s cost. But for this price.
Why didn’t you mention the color before? I didn’t expect to actually buy a new car today (note: not the truth).Manager: Hobbs: Manager: Hobbs: Manager: Hobbs: Manager: We are offering you a great deal. All three employees must agree to the schedule. The days in question are: Exchanging Initial Offers 69 . and seniority will be used to determine who gets to choose the first day. 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. Employees will be paid time-and-a half for each of these days.no it’s not. Then we have a deal. Hobbs successfully chose color as a throwaway item. and Carolyn) to develop a mutually acceptable (to the three of them) holiday schedule in which at least one person will cover the office on each of nine “slow” days. At the very end of the negotiations. Conclusion Mr. The three are sitting at a lunch table to discuss the schedule. so I might as well get the color I want! What if we offer you the red one for $100 less? Is the color worth $100? I . The manager was convinced enough to sacrifice a final $100 for the throwaway... I’ll take the red one for $100 less. Miguel.. Example 2 The office supervisor told the three internal sales representatives (Jenny. he brought it up and convinced the salesman and manager that it was an important item to him—possibly even a deal-breaker.
A second and third round produced the following allocation: Jenny: December 23. each made a first choice of days they will work. 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. January 2 None of the three are totally happy with the results. December 24 Conclusion Carolyn has achieved her objective: She will be off December 24 and 26. if they let her choose the two days she will be off and the five days she will work. 2 In the first round of negotiation. but that is a secondary consideration. 27. 2 Jenny: December 23. December 27. They have decided to start over. December 30. 31 January 1. 31. Carolyn has decided to use as a “throwaway” the number of days she will work (previously. December 26. 70 50 Practical Negotiation Tactics . She proposes to work five days. 30. January 1 Carolyn: December 24. She got what she wanted by giving up something she did not value: the two other days. January 1. December 31 Miguel: November 25. and each chooses their days to work: Carolyn: December 27. it was assumed that each would work three) in order to have December 24 and 26 off to be at home with her children. 30. in exchange for giving up earlier choices due to seniority. They agree. 26 Miguel: November 25.November 25 (the day after Thanksgiving) December 23. This would allow Jenny and Miguel to each work only two days. 26. 24. They all agreed to their schedules.
300 shares of stock in a pharmaceutical company. we need to sell the house. When the girls decided it was time to talk about the estate. and a collection of antique furniture. For example. Their mother’s will was very clear: the three daughters were to all have an equal share of her estate. were faced with the task of selling the house and disposing of their mom’s personal belongings. The house and much of the furniture has been in the Exchanging Initial Offers 71 .000. Autumn and Angela. Autumn: I don’t have any objection to selling the stock and distributing the proceeds and the cash three ways. it is often helpful to package the items in distinct groups and then deal with each package separately.000 with no mortgage on it. the antiques.Tactic 17: Package Items In a negotiation where there are multiple issues or items to be negotiated. their mom left specific pieces of jewelry and art in the will to each of the girls. and the stock and distribute the proceeds. realizing that the total cost of a deal might make or break the agreement. In addition. A reluctance to include one particular financial item with other financial issues. The house was closed up at the time of their mother’s death because she had been in a nursing facility for a couple of months. can indicate that something you think is minor is really a major concern to your opponent. a house valued at $250. they met at the house. Anne and her sisters. Anne: As I see it. 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. three ways. for example. but I’d like to talk about the house and the furniture. Example 1 When their mother died at age 82. The estate’s assets included a checking and savings account totaling $450. along with the cash. one might package all of the financial issues in one group and negotiate on that package as one issue.
don’t you think? Angela: Maybe. And we’ll fix the house up. and letting everything else wait for another discussion.000 in the bank and distribute the remainder three ways. we’d get a lot more for them. I’d like to talk about the art works Mom left each of us. In fact. so I will be able to keep tabs on it. Soon. So we agree: We’ll leave $30. we will have a more valuable asset. Anne: I’m not sure I’m comfortable talking about trading the jewelry and art Mom left to each of us. she’s free to do so. If Angela wants to hold on to her stock.” She gave those things to us. There was a reason why she gave us what she did. Autumn: I think its awfully soon to be making these kinds of decisions. it’s a magnet for vandals. Angela: Now’s not a good time to sell either the stock or the house and antiques. Mother was born here and grew up here. and now that we have them. Angela: And we can talk about the art and jewelry? 72 50 Practical Negotiation Tactics . and if we wait a couple of years. What would you think about agreeing today to distribute the cash and stock three ways. We’ll split the stock three ways. we can sell ours. Autumn: Sounds good to me. It’s a buyer’s market now. If we want. With no one living here. and use it to fix the house up? Then when we make a decision. Why don’t we leave some of the cash in the bank. Angela: I live close by. we’re really free to do with them what we want. I’d like it all to stay in the family. we’ll discuss again what happens to the house and the antiques.family for years. I’d really be interested in talking a trade for some of them. Anne: Okay. but the operative word is “give. Anne: But that means we have to continue to take care of the house and its contents. Frankly. 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.
the antiques. and establishing a work schedule to accommodate evening and weekend clients. Angela: That’s fine. including benefits for partners in non-traditional relationships. The following tasks needed to be a accomplished: establishing basic pay schedules. The negotiations on the other items—the house. and the art works—will be more difficult. what kind of paid leaves there will be (personal. Several issues also needed to be addressed: the ability of employees to move up through the organization. The second: working conditions (work schedules and promotional opportunities). vacation. May I suggest that we divide the items into three areas. and deal with one area at a time? The first: Wage issues (pay schedules and the annual and merit raise issues). health benefits. sick.Autumn: I can agree not to do anything with the jewelry and art Mom left me before we talk. funeral. tuition benefits. The third: Ben- Exchanging Initial Offers 73 .). deciding whether there would be annual wage increases as well as merit increases. Waiting to make decisions on those items until some time has passed gives the women an opportunity to look at a number of options. Employees: We’ve got a lot of items to cover. and the assignment of the limited number of parking spaces. 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 jewelry. Anne: Same with me. but I’m making no commitment to trade. deciding to base the increases on a percentage or equally distribute the funds for increases among the professional and clerical staff. etc. Conclusion Autumn’s suggestion to package the money and stock because they can be easily divided by three made agreement on those items possible.
Employees: Okay. Wages should not include merit pay raises. Later negotiations were difficult. That’s a program that can have a lot to do with how employees are able to increase their worth to the organization. Executive Director: I think it’s a good idea to group items together. Executive Director: Well. I would include that under the Working Conditions category. paid leave times. and the parking spaces). I think it also makes sense to include tuition benefits in the Working Conditions category. 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.efits (health insurance. 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. Also. 74 50 Practical Negotiation Tactics . And paid leave clearly belongs with Wage issues and should be discussed with the pay schedules. tuition benefits. we are an agency supported generally by public funding. because they’re really an incentive for better performance. as well. to be honest with you. Let’s get started. 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. so there’s not going to be a lot of discussion on what our pay schedules and annual increases can be. that makes sense. Executive Director: Sounds like a good agenda. the paid leave categories are pretty clearly defined. but I’d change your list. Employees: I’m surprised that you would take merit increases out of a general discussion of wages.
The discussion might become very heated. but don’t think you’re going to stick me with all of the mortgage and credit-card payments. too. Their “property division” was mostly about dividing their debts. no matter how insignificant. Kathy was asked by her employer to relocate to another city. and they were making payments on school loans (for his undergraduate degree and her undergraduate and graduate degree) and on two cars. and both have good jobs. It was her idea to buy the house and go into debt to furnish it. The couple hoped to do the divorce without involving lawyers in order to save money. They had also furnished their house on credit. and she agreed. It indicates to your opponent that you are a reasonable negotiator. Tim worried that he would be stuck with all of the debt.Tactic 18: Agree on Something As Soon As You Can Negotiations are more successful if both sides can agree on something—anything—almost immediately. They were in the middle of buying a house. An initial agreement. with her promotion sending her out of town. Tim: You might be leaving town. and that you are entering into the negotiations with the intent to reach agreement. after a brief marriage. Kathy borrowed more money to go to graduate school full-time. Kathy’s first job paid more than Tim’s because she had a graduate degree. Now. You signed those papers. Tim began working right after graduation. Exchanging Initial Offers 75 . Example 1 Tim and Kathy. and might not even be able to keep the house. Consider starting things off by presenting your opponent with a proposal you feel confident can be agreed upon without argument. They met and married in college. You can also make an effort to agree on something your opponent offers early in the negotiations. because Tim felt that Kathy had taken advantage of him during the marriage. rather than disposing of assets. sets the stage for mutual respect and communication. without suggesting any changes or modifications. They have no children. are divorcing.
Tim: Okay.Kathy: Hey. even though the convertible is being paid for through a 48-month loan and the sports car through a 36-month loan. Kathy: I suppose we should look at the school loans next. and you got your sports car.. Example 2 ABC Company. ABC usually uses UPS 76 50 Practical Negotiation Tactics . I think it only fair that I take over repayment of all the school loans. as long as the cost was approximately the same. I think that makes sense. I don’t intend to “stick” you with anything. The monthly payments are about the same. about the house and furnishings. The first thing I’d like to talk about is what we are going to do about the cars. an art gallery. Tim: Well. we decided to each pick out our “dream car” and that we would not overrule the other’s choice. hold on. They also agreed that Tim wouldn’t have to pay her that amount for five years. Okay. Frankly. I can hardly argue with that. 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. and XYZ Co. What do you want to do about them? Conclusion Having agreed to two items very quickly. as you remember. yes. and he could pay it in annual installments over a five-year period. I got my convertible. we would have paid down our school loans more. I say we agree to transfer the convertible loan to me and you take over the loan on the sports car. a wholesale art dealer. If both of us had been working the year I went to graduate school. When we bought them two years ago. Kathy: Now. 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.
XYZ decided to cancel the promotional sale that was to start on Wednesday. water from the gallery’s air conditioning unit pooled on some of the surfaces of the warehouse area. ABC’s position was that the artwork was fine when it left their location. and arrived on time and apparently in good condition. it was obvious that the art in one of the boxes had suffered considerable water damage. 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. when the boxes were opened on Monday. 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. XYZ’s manager failed to open the boxes or remove the artworks. and began preparing to return all of the artwork to ABC. WeCanShipArt claimed that the boxes were not damaged in shipment—the artwork was already water damaged. However. You can get the three new artworks here so that we can hold the sale as scheduled? Yes. but only if you let us ship it UPS.to ship artwork. We’ll expect you to pay for the 12 works that will be in your show. They arrived right before the holiday weekend began. ABC refused to pay WeCanShipArt until it received payment from XYZ. XYZ: ABC: Exchanging Initial Offers 77 . The other times this happened. ABC: Before we begin. There was no indication that the gallery’s electricity had gone out over the weekend. and the boxes showed no external damage. but XYZ asked specifically that a little-known company specializing in shipping art known as WeCanShipArt be the shipper. The three parties agreed to hold a conference call late Monday afternoon to try and resolve the dispute. The artworks filled four boxes. and that XYZ needed to either go to the shipping company or its own employees for compensation for the damage. Holiday weekend storms caused the electricity to go off for different periods in different parts of the city. Unfortunately. XYZ contacted ABC immediately. 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.
m. ABC: Well. You can’t just ignore us. The artwork was not damaged while in our control. 78 50 Practical Negotiation Tactics . And we’ll eat the cost of shipping. tomorrow and we’ll wait for payment on both shipments until we resolve how the artworks were damaged. WeCanShipArt: Wait a minute. Now. that’s okay with me if it’s okay with XYZ. Having reached an amiable solution to the immediate problem. generated a like offer from WeCanShipArt and a reasonable response from XYZ. If we don’t make the deadline. they will split the cost of the three damaged pieces three ways. regardless of where the original three artworks were damaged. the three companies were able to agree to undertake an investigation within each company to determine when the artworks were damaged. XYZ: Okay.XYZ: Agreed. They also agreed that if the investigations are not conclusive. and if word gets out that you think it was. we’re ruined. 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. how do we resolve the issue of the damaged artworks? Conclusion ABC’s decision to offer a solution to XYZ’s immediate problem. at its financial risk. we’ll take responsibility for all of the consequences: the lost sale to ABC and the lost promotional sale by XYZ.
We plan to put an ad in the paper next week.000 for it six years ago. Can you check others in the paper and just give us your best price? We will either take it or advertise the tractor in the paper. but ONLY if you have a bottom line or definite point at which you will accept an agreement and you believe the other party will make a reasonable offer. The “first and best” tactic enabled them to settle the matter easily. What do you want for it? Colleen: Well. period. Conclusion Ann and Colleen did not feel like negotiating over the tractor and running the risk that it might affect their friendship. and it came with the bush hog and the leaf pick-up. but if you’re interested.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. consider using the “First and Best” tactic. Ann: That sounds great! I don’t want this to affect our friendship. I don’t have any idea. no hard feelings either way. Exchanging Initial Offers 79 . we’ll sell it to you. You must mean what you say and be prepared to walk away from an unacceptable offer. we plan on selling our Ford tractor when we move. and even more hours in the fall picking up leaves. Ann: Thanks! We really need one. Why don’t you give me a price? Colleen: Oh. Okay? No quibbling. I don’t want to quibble. Example 1 Colleen: Ann. we paid $5. Ann: Well. I know you and Jeff said you’d like one because you have about five acres. Jeff spends many hours mowing the yard every week. 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.
Here it is. but we have internal budget considerations and we must consider equity with other employees. I don’t like negotiating over salary either. 80 50 Practical Negotiation Tactics . So. no questions asked. but I don’t want to start off in a new job by negotiating with my boss! So. (three days later) Vernon: Archie. Okay? Vernon: That sounds good. I think we have agreed to all aspects of the job offer. because it was several thousand dollars above what he decided was the minimum it would take for him to change employers. I’ll either accept it or reject it. I’ll get back to you in three days. Archie: Thanks. I’ll discuss it with my wife and get back to you in 48 hours. I came up with the best salary offer I can make. as we agreed. Conclusion Archie accepted the job offer. and I’ll take 48 hours to consider it. on this slip of paper. I want the job. He also started the job with a positive working relationship with Vernon. I expect a fair increase. We want you. who admired the way Archie negotiated his starting salary.Example 2 Archie: Well. how about you making your first salary offer your best one. except salary. and you know my current salary.
and ignore or deny any weaknesses in it. but he figured “all night” was relative. Kevin: Mom and Dad. and we’ve made a lot of plans with our friends that I need to talk to you about. (Once negotiations get underway.m. and then to breakfast at “Timothy’s. look for indications from your opponent as to what he or she believes is their best position. a 4:00 a. Exchanging Initial Offers 81 . and in a favorable light. then the prom. and it really wouldn’t be fair if I wasn’t able to go along with the rest of the group. we’re all meeting at Donna’s so we can share a limousine. curfew would be okay. Second. Kevin had “negotiated” with his parents before. It might be your only opportunity to explain your position without interruption.m. He and his date had decided that as long as they could join their friends for breakfast after the prom. Sally’s Senior Prom is coming up. you know that Sally is really looking forward to this.Tactic 20: Posturing You might have to do a little acting at the beginning of the negotiations. He knew his parents would not agree to let him stay out all night. 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. 17 years old and a junior in high school. was dating a senior. Posturing is indeed “acting. Fourth.” but it is also a source of valuable information that can help the negotiations proceed to a successful conclusion.” As you know. you will probably have to modify some of your positions if you are to reach agreement. This is called posturing—presenting your position strongly and completely. Third. First. so the prom is a pretty big deal to both of us. First we’re going to dinner. so he knew that he would have to sell them very quickly. you only have one Senior Prom in your life. we’re not going to be dating exclusively after this summer. Present your position and demands as if yours is the only logical position. Example 1 Kevin.) During the posturing phase. I’m the only junior in the crowd.
we told you that we would not be changing our rules to accommodate that older group. we’ll have to get in our car and drive home very early in the morning.or drug-free. this prom is a one-night thing—a dance that is dressier than you’re used to. and the crowd we hang with doesn’t either. Second. And if we don’t spend the night. I know you trust me and that I’ve earned the trust. And. Also.Mom: Kevin: Mom: Kevin: Timothy’s usually isn’t open early in the morning. From where we sit. you will have another Senior Prom—yours—so we don’t think you will be “missing” that much if you don’t stay out all night. for sure. you and Sally need to call it a night (or really a morning). you have been fairly good about making your curfew—most of the time. Things can happen on a night like that that adversely affect you for the rest of your life. Finally. which could be dangerous. Yes. Sally’s parents trust us and have already said yes to her. We’ve heard that they allow kids to drink. Donna’s parents are not as strict as they could be when a bunch of you are there. 82 50 Practical Negotiation Tactics . the limousine will take us back to Donna’s house to spend the night. I think I ought to be able to stay out all night. but it should not be oversold. but because the owner’s daughter goes to Sally’s school. That’s asking us to believe a lot. I don’t drink or do drugs. but to use that as a reason to stay overnight doesn’t make sense. However. Fifth. That’s the deal then? Okay. I’ve never missed my curfew. I believe you can pay a little more and have the limousine bring you both home. of course. so there will be plenty of chaperoning. We’re just not convinced that your entire group has been alcohol. We are. they will be open for the Prom crowd only. You realize that this could be as late as 4:00 a. remember that when you started dating Sally and hanging out with an older crowd. You make some good points. and we’re just not happy about that. So. we know. Donna’s parents will be there.m. We think that after the breakfast. happy about your plans to use a limousine so you kids aren’t driving. yes.
Example 2 Tencro Company decided to modernize and expand its business. Tencro is not going to leave the state. and it will grow—everything from sub-parts manufacturing to the shipping business we generate. EDO: Well. The spin-off business from our operations is huge. Tencro: Let me just remind you of what our company means to this state. and it does not really need any help.m. if anything. and had this conversation: Tencro: We really want to keep our company here and expand it.Conclusion Kevin’s strategy to hit his parents with all of his very good arguments at the outset gave him an advantage. we are one of the largest employers in this county. and a new. we’d be adding at least 500 new jobs. one-floor operation would be very profitable. but was disappointed to learn that they offer very few incentives. regardless of the incentives. Tencro approached the state’s Economic Development Officer. other companies have received incentives and Tencro certainly wants all it can get. the state can do to help the company expand and rebuild. It currently employs 800 people. Also. We need to find out what you’re willing to do to keep us here. we’re of course interested in keeping you here. Sally and Kevin had a wonderful night and were quite happy to have the evening end at 4:00 a. The company approached other states to see what incentives they might offer Tencro to locate in their state. because his parents could not disagree with such wellthought-out ideas. but we’re getting a lot of interest from other states willing to help us relocate. but it could easily add another 500 if it had the space on its assembly line. but there are limited options available. our Exchanging Initial Offers 83 . If we can expand here. Nevertheless. The assembly plant is out-of-date. Tencro has approached the state’s Office for Business Incentives to see what. With 800 employees.
we will need the two-lane entrance expanded to four lanes. 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. We do want you to expand your plant.. We can’t possibly give it away to other companies coming in behind them. additional police. or else it will not be cost-effective for us to stay here. and we’ve had to divert funds from business incentive programs over to basic services. and we are willing to offer some training dollars for the new workers. any plan by the state to build housing that is subsidized by tax dollars will draw a great deal of criticism. Also.employees pump money into the economy by buying houses and cars. And. There are more residents in the state demanding more public services: road improvements. paying taxes. 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. 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. etc. what do you have to have? Tencro: We need a new location—20 acres or so—to build our new plant. Certainly. We need a rebate on the local income taxes to help pay off the loan to build our new building. We 84 50 Practical Negotiation Tactics . so we’d have to have it free here. EDO: The state has very limited resources to pay for economic development incentives. We need certain incentives. now that the economy has improved. and traffic signals. if the new location is at the local industrial park. The industrial park land can’t be “free” because we have agreements with other companies that had to buy the land. etc. That might involve the state building housing for them at a reduced cost and providing them with some retraining. And we’ve been offered land practically free in the neighboring state. while we value your company as a long-time corporate citizen. We need help in the cost of attracting and training the new 500 employees.
Tencro: Well. The new set-up was so profitable. and the state did end up participating in a housing subdivision in order to keep the purchase price down for the new employees. Conclusion The posturing by both sides could have caused the whole negotiation process to bog down. the training and the new road improvements were all the incentives offered to Tencro. However.agree that the road into the industrial park must be widened and a traffic light installed at our expense. EDO: Get back to us as soon as you can. Tencro bought land in the industrial park. Future negotiations continued. borrowed money for the new building. Exchanging Initial Offers 85 . Tencro was able to pay off the borrowed money in half the time. we’re just not in a position to offer more than that at this time. let us go back and take another look at our options. Other than that. but for the fact that each party did its homework and was aware of the true facts. and hired 500 new employees.
Jay: No. Avoid giving away too much at the outset.000—what they paid for it. The other party will probably come back with an equally ridiculous offer. think things through before you make or accept the first offer. at minimum cost.” The perfect first offer. because you have settled quickly.000. Their realtor told them that it sold for $290.. They found one they both like that lists for $325. That’s a fair price. Jay: No. Example 1 Jay and Sue are looking to buy a house in a specific neighborhood because it has a good school system. and houses in this area sell fast. The sellers must be willing to come down a few thousand … Sue: Well. of course.000.000 this year. We don’t know how anxious they are to sell or if they know the market.000 three years ago). Sue: Let’s offer $325. particularly if you don’t know the other party’s “settlement range. before someone else does. which can be very useful). but you feel cursed because you gave away too much. 2) Start out with an old number.” (You have won a settlement.) To prevent this from happening.000.000 two years ago. never give them their asking price. 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. is the most (or least) the other side will accept. Let’s low-ball them and offer $290. and you cannot withdraw it in good faith.e. such as last year’s price. thus requiring greater concessions on both sides. 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. offer $150.000 and $337. and that two similar ones on the same street sold for $330. then $320. 86 50 Practical Negotiation Tactics .Tactic 21: Avoid the “Winner’s Curse” It is often quite difficult to make the first offer.000 for a house that sold for $185. or 3) Make an unrealistic offer (i.
000 total. as requested by the human resource director. 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. realizing they offered too much. If.000 for each of us—$6. Let’s accept it! Conclusion Jay and Sue avoided the so-called winner’s curse by making a low (but reasonable) first offer. but who knows what they are planning on offering. Frank: Me too. (Bob and Frank meet privately to discuss the situation.000. since they had already bought another house. Both parties felt that they made a good deal. Exchanging Initial Offers 87 . That’s an insult! Jay: Well. Sue: Then you do it. Lyle Foxworthy. (the next day …) Jay: They made us a counteroffer of $307. The buyers were very motivated to sell.000.Sue: Don’t be crazy. as Sue had first suggested. Lyle: So what’s your price? Bob: Can you tell us what you have budgeted for this project? Lyle: No. They outlined how they would develop a new employee performance-appraisal system.500—half the difference! Sue: Great. Give us your lowest price. they had offered $325. I can’t tell our realtor $290. was very impressed with their presentation. the sellers obviously would have accepted and Jay and Sue.) Bob: I’d do it for $3. then let them make a counteroffer. and the offer was based on fact: the prior negotiated price. the company president.
) Lyle: Okay. 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. They also ended up getting three times ($18. but we can’t pay more than $18. and it would not apply. What’s the cost? Bob: We want the job. I’m out of time.Bob: Lets make them give us a price! (Bob and Frank return to the meeting room. and you two come highly recommended.000) their minimum price of $6. Bob: That’s fair. That is all that’s left in this year’s training budget. We’ll do the job. Conclusion Bob and Frank avoided the winner’s curse by forcing Lyle to make the first offer. 88 50 Practical Negotiation Tactics .000. Lyle: Okay. We’ve waited long enough. but we know you must have an amount budgeted for this and we are willing to do it for that amount.000.
Wait to counter (see Tactic #24) because this will give the opponent the sense that you are serious about bargaining. One or more parts might be acceptable or indicate movement from their previous positions. be enlarged (see Tactic #27: Expanding the Pie). Use a prolonged period of silence (see Tactic #29) to convey something at a strategic moment. but possibly of different values to your opponent. carefully evaluate an opponent’s offer. what appears to be an outer limit of the settlement range when the process starts can. In some negotiation situations. Experienced negotiators seldom reveal their exact priorities and objectives. and attorneys use tried and true tactics in giving and receiving offers. This can produce a negotiated solution without giving up your priorities (see Tactic #28: Fixed Alternatives). It has often been said that the key to negotiations is to be flexible (see Tactic #25). 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. labor negotiators. When the other party makes an offer. T Making Counteroffers (The “Give and Take”) 89 . Also. Instead.Stage 4: Making Counteroffers he heart of the negotiation process is the give-and-take. and remain open to offers and options that you did not originally expect (see Tactic #30: Always Leave Room for Dessert). seeing no common ground. in fact. Skilled negotiators such as salespeople. do not dismiss it because it is not all you want. Expect that the “total pie” will be different from what it was at the outset. is likely to pull away from the table. which is often the case. the other party. and do not flatly reject it because it is not your offer. which would most likely weaken their position (see Tactic #26: Keeping Secrets). 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. because if you do not at least appear to be flexible.
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. Dad. it looks like we can’t really plan a vacation for all four of us.Tactic 22: Propose Multiple Options The shortest distance between two points is a straight line. Jerry will be here. Let’s see what we can work out. I don’t want to give up on a family vacation that quickly. 90 50 Practical Negotiation Tactics . His brother Sydney. and that he already made plans to visit with college friends on the East Coast for the two weeks after that. finished his freshman year of high school at the beginning of June. We have four options. their parents began discussing a family summer vacation. Sydney. In mid-June. Jerry had already started his summer job. Here’s the discussion that followed: Mom: Well. 15. Option 2: Mom and I go before Jerry leaves on August 1. 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. 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. 19. what say you. Proposing only one solution to a problem. and quicker. except when you’re negotiating. The week he would be home would be the first week of school for Sydney. Proposing multiple ways to reach your goal can get you to the same place. He planned on being home for one last week before having to pack up and go back to college. Jerry pointed out that he is expected to work until July 31st. so you can go without me. Example 1 Jerry. Option 1: No family vacation. while it may be your best option. gives your opponent little maneuvering room and might even prolong or damage the negotiations. Dad: Wait a minute. completed his first year of college and came home for the summer around the middle of May.
if it’s okay with Jerry. Andrea considers Making Counteroffers (The “Give and Take”) 91 . Mom: Well. but it should work out all right. and one secretary in his litigation unit. Then Jerry joins us until Thursday. when we come home. It’s not perfect. but he can discharge employees for poor performance. If we started the vacation on a Thursday. and Carl). one paralegal. and Sydney go to South Carolina before his school starts. Example 2 Joe is an attorney whose job responsibilities include managing three other attorneys (Andrea. Joe has no say in who was hired by the corporate legal office to work in his unit. And I miss orientation and start school the next day? Dad: That’s an option. they were able to make that happen and not interfere with or argue about the merits of each other’s individual goals. so I won’t be able to meet up with you until Sunday. Bob. Sydney: Don’t I start school that week? I don’t want to miss school. Mom? Mom: Let’s do it. you have a half-day orientation on Wednesday. Option 4: Jerry doesn’t return home the week between his visit to the Northeast and returning to school. actually. we meet up with him that week for vacation. Sydney: So what you’re suggesting is that the three of us are on vacation from Thursday to Sunday. we could return home on Thursday and still get a week’s vacation. Jerry: My friends and I have plans through Saturday of that week. Conclusion The goal was to have a family vacation. Sydney: Okay. me.Option 3: Mom. By proposing numerous options. Classes don’t start until Friday. Jerry: Okay with me.
We have a formal procedure that you just don’t like to follow. Her job performance was acceptable. The attorney for the other side has agreed to give me the additional time to file it. Joe: Come on. If you don’t like the way I do my job. Andrea: Wait Joe. and I don’t see why we don’t have more independence. Andrea: We’re hired for our expertise. you know that wasn’t an okay to settle. which forced Joe to take action. Joe: That’s all well and good. however. but it doesn’t solve the problem—nor is it the only problem. 92 50 Practical Negotiation Tactics . To put it as bluntly as I can. we have a very big problem. It was just a comment. I really see your options as follows: You can leave the corporation. you can agree to a demotion so that your areas of responsibility are lessened to that of a paralegal. Andrea: You didn’t list moving to another unit as an option. 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. Before you start. You had no authority to agree to settle the Stites case without clearing it with me. It is to the corporation’s benefit to address that problem here and now. Andrea: Well. In the last month. Andrea. Joe: Andrea. rather than to put it off on someone else or for some time in the future. isn’t it? But I don’t think just moving you really solves the problem. let me say that I’m handling the missed deadline on the pleading. or you can work out a “supervision” agreement with me so that I can better monitor your performance. Joe: That is certainly an option. 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.herself to be a professional. she made a two glaring errors in judgment. so Joe took a “hands off” approach. you have a job-performance problem. and resents any attempt by Joe to supervise her work.
Conclusion Joe’s willingness to offer more than one solution gave Andrea a way to look at this unfortunate situation as an opportunity. by Leigh Thompson. my goal is the same is yours: to create an environment where you can perform to your full potential. Joe: That’s fine with me. But in fairness to our mutual employer. lets talk to Bill about the move. Andrea’s move and subsequent “approval” regime did. I want to stay with the firm. and propose an acceptable alternative. If you are convinced that I have to undertake an “approval” program. then it would save face for me if it comes with a move to another unit. the needs of the corporation have to come first. If that option is okay with you. Andrea: Well. Believe it or not. I hope we can work it out.) Making Counteroffers (The “Give and Take”) 93 . or I would advise your next supervisor to put you on a very formal approval program.Joe: That could be an option. in fact. It also changed her attitude about being both a professional and a team player in a corporate office. improve her work performance. but it would still require some change in the way you work: either a demotion. rather than my staying here. (Adapted from The Mind and The Heart of the Negotiator.
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).Tactic 23: The “Win-Win” Approach (Identify Issues as Compatible. 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.). etc. thus making it necessary to find a middle ground on each. Brooks: Right. then those which can be easily traded.500. Exchange. Maureen: First. 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. the fencing. 2) exchange items (those that can be easily traded off—one item for another item of equal value. For example. It is used only when each side has several demands. This approach is an important tactic. and a home theatre.) Yes. They have a fixed amount of money—$14. then the contractor has lost $500 in revenue. that’s $9. three strategies are used. or Distributive) The “win-win” approach to negotiations is a basic tradeoff strategy of seeking maximum gains for both sides. In essence. and finally. Wow! We are off to a good start. one person’s gain is another’s loss—zero-sum. let’s see if there are any items we both want. Let’s see.000. These items often involve money). 3) distributive items (those items for which the two parties have exactly opposite interests. With distributive items. because it can speed up negotiations and produce a more desirable outcome. only those with polar-opposite interests that must be divided. we both want the sod. Let’s agree to those things. (She looks over the list. Example 1 Brooks and Maureen Wilson have just finished building a new home. They both agreed that this is the maximum they will spend on “extras” before moving in. 94 50 Practical Negotiation Tactics .
I’ll trade your sidewalk and trees for my whirlpool bath.000 $3.000 $500 $1.500 $500 $1. I’d like to spend some of it on lighting upgrades. These are all permanent immediate needs. Can we split it evenly? Brooks: Okay. $750 for lighting and $750 in the bank.500 $5.000 $1.000 $5. We have $1.500 left.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. which I’d like to keep in the bank. Making Counteroffers (The “Give and Take”) 95 .000! Brooks: Good.500 $2.000 $2.# 1 Sod Item Cost $1. which takes another $3. Maureen: No.200 $200–$2. and we both get things we want.
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. Wage Increase 4. All items to be negotiated and their desired outcome for each item were put in writing for review. Length of Contract 2. Profit-Sharing 5. This year. During that time. The combined lists total thirteen different items: Desired Outcome No. 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. Drug-Testing Program 96 50 Practical Negotiation Tactics . 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). finally agreeing to split the difference on the remaining amount (distributive items). Pension Increase 3. Item Management 3 years None 1% 10% of net For cause only Union 3 years 2% 5% 12% of net For cause only Win-Win Category Compatible Exchange Distributive Exchange Compatible 1. management and union negotiators found that a “winwin” approach to negotiations worked well.
they accepted the union job security proposal (#12) in exchange for the management subcontracting proposal (#11). the management profit sharing plan (#4) was exchanged for the union overtime assignment plan (#7). they began to trade off the exchange issues of similar value and nature. First. and (#9) to continue the often-discussed no strike/no lockout provision. No Strike/No Lockout 10. Next.Voluntary ity 2 days Continue current provision 10% 10% No provision $50/month 3 days Continue cur. Subcontracting 12. At this point. Overtime Assignment 8. Clothing Allowance Based on senior. signed. Job Security 13. Next. and the union clothing allowance proposal (#13) for the management funeral leave proposal (#8). one Making Counteroffers (The “Give and Take”) 97 .Distributive rent program co-pay Exchange Exchange 7. Because they held opposite positions on these issues. Finally. They proceeded to draft the language to settle these issues. they exchanged the economic issues of approximately equal cost: the union pension increase proposal (#2) for the management shift differential (#10).Compatible rent provision 15% Exchange 15% No layoff provision $100/month Exchange Exchange Exchange In their second meeting. Paid Funeral Leave 9. and removed from the table.6. Health Insurance Employees pay 20% Continue cur. the negotiators agreed that they had compatible positions on three items: (#1) length of contract. Shift Differential 11. (#5) a new drug testing program. eleven of the thirteen original issues to be negotiated had been agreed to. 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.
or distributive so that the negotiations can begin in an organized manner. 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. Conclusion This tactic is simple. but it can be very effective when a negotiation situation involves several issues. They then identify each as compatible. Both sides first agree that all issues to be discussed will indeed be listed and openly discussed. Second. Sometimes the classic “split-the-difference” method is helpful in locating a middle ground. when you agree on the items where both parties have similar desired outcomes. but a middle ground was eventually found on each and negotiations ended. These two distributive issues—wages (#1) and health insurance (#6)—were the most challenging to settle. when you exchange items so that each party achieves their desired outcome on one of the two.side’s gain is the other’s loss. negotiations begin on a positive “win-win” note. 98 50 Practical Negotiation Tactics . Third. The tactic offers several advantages: First. exchange. A middle ground often must be found on each of these distributive issues if you are to reach an agreement. you can use the process to settle many of the other issues on the table. if both parties start from reasonable positions.
Let me finish. and refrigerator. This isn’t high school. They agreed on which part of the room each would have. Rob stays busy all day and evening with other activities. do not offer a counterproposal right away. I’m not interested in a curfew. each side is expected to put an offer on the table. and can help you reach your goal.Tactic 24: Wait to Counter As the negotiations begin. 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. will make your opponent feel good about the process. Since they didn’t know each other well. Rob: Making Counteroffers (The “Give and Take”) 99 . Mutual respect must be part of the negotiation process. so I can study. and on what would be considered acceptable “sharing” of each other’s junk food supplies. It is especially important that you do two things: take your time before rejecting any offer from the other side. they decided to establish “room rules” so that they would both be comfortable with the room assignment. So when’s a good time? Jasper: (without hesitation) No way. Rob: Wait a minute. Jasper studies during the day and early evening and likes to stay up very late watching TV and visiting with friends. and looks like you are belittling them. Example 1 Jasper and Rob met when they were assigned to the same dorm room their freshman year in college. even if you aren’t going to accept their offer. Jasper: Finish or not. Here is how the last issue was handled: Okay. last item: I’d like it quiet in the room at night. so he wants a quiet room late at night. you know. Waiting a respectful amount of time to counter. and studies late into the night. and from a strategic standpoint. the location of the TV. A counterproposal delivered too quickly tells the other side that you haven’t or won’t even seriously consider their offer. The final issue had to do with “lights out” and quiet times for studying. stereo.
and that’s it. and that’s not negotiable.Rob: (Rob was about to suggest midnight on Mondays through Thursdays.m. 10:30 p. curfew on TV and other noise every night. No agreement was reached. midnight during the week is the only thing I’ll consider.) Listen. employee grievances had to go through four levels of supervisory review and appeal: a) verbal complaint to the non-union crew leader. Under the restructuring. Neither side anticipates that there would be 100 50 Practical Negotiation Tactics . Example 2 ABC Company’s management was being restructured and compressed in order to facilitate its new “just-in-time” manufacturing philosophy. Failure of both young men to allow one another to have their proposal considered caused the relationship to break down. c) a formal “meeting” with plant manager if the matter is not resolved in 10 days. Jasper: (without taking a breath) At best.m. and the union foreman would report directly to the plant manager. The appeals procedure would have to be altered to reflect the restructuring. and d) a hearing with company owner if the matter is not resolved in 20 days. Under ABC ‘s contract with the union. but changed his mind when he saw Jasper’s attitude. Rob: (there is no hesitation in this voice) No. b) written complaint to a floor manager if the matter is not resolved in 5 days. I want a 10:30 p. is all I’ll consider. the positions of non-union crew leader and floor manager would both be eliminated. Jasper: Midnight. 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. The union contract required that management renegotiate this change in the grievance procedure with the union.
We’ve simply eliminated the first two steps. Company: Here’s the new draft of the grievance procedure. Union: You obviously didn’t come here to negotiate. and I’m certain your members will be okay with it. We’d like you to consider the plant manager’s role as a problem-solver. In fact. rather than as a judge on the merits of the grievance. but to dictate. Certainly. The union was prepared to accept the plant manager’s position as final.) We’re just not happy that you are proposing a Making Counteroffers (The “Give and Take”) 101 . Company: (rather abruptly) Let’s not drag this out. We’ve got a couple of alternative models for you to consider.any objection to the change. After initial pleasantries were exchanged. the employee and the foreman would meet with the plant manager and attempt to resolve it. rather than go on to appeal it to the company owner. If the union foreman felt that the grievance had merit. and everything else stays the same. 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. Union: Hold on. The redraft is simple and straightforward. Our guys are prepared to accept a shorter grievance procedure if we can find a way to ensure that you’ll take our grievance issues seriously. We just cut out two steps. Union: As you know. our grievances often signal to management that there are real problems on the shop floor. Company: (no hesitating) Trust me. ABC Company’s negotiator explained the management changes soon to be implemented. because those management layers are gone. (Note: An attitude change sets in. he/she can take the grievance to the plant owner for a hearing. We think that this is an opportunity to eliminate some of the adversarial aspects of the grievance procedure. and began the negotiation session concerning the grievance procedure. If in 20 days he/she has not been satisfied. no one can complain about that.
the company entertained the ideas the union had tried to propose before. 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. Union: We’re very serious. and actually accepted a three-step procedure. Conclusion ABC Company’s failure to take adequate time to consider the union’s offer or even act as if it was considering the offer prolonged the negotiations unnecessarily. 102 50 Practical Negotiation Tactics . and we’ll strike if we have to. the two parties did meet again. This time. After a cooling off period. You can’t be serious. We’ll see you on the picket line.two-step grievance procedure instead of a four-step procedure.
Sue and Bill decided that they had to begin alternating their Thanksgiving Day visits between the two families. and now have a new baby girl. Mom says you. Sue’s sister Nancy called her to talk her into coming anyway. and do not dismiss something said by your opponent just because it came from the opponent. and Sue called her mother to let her know that they would not be coming for Thanksgiving dinner this year. Even before the baby’s arrival. Nancy: Sue. Example 1 Sue and Bill have been married four years. They’ve done the research. their spouses. Bill’s family (parents. you can adjust your demands or goals to include such new ideas. Bill’s family won. Sue: Yes.m. Be open minded. Bill. and the baby aren’t coming for Thanksgiving dinner this year—that you’re going to Bill’s parents’ house. and at least five aunts and uncles) ate around 7:00 p.m. two sisters. it’s just too much to do both. and identified the range of options they feel comfortable with negotiating. one sister. Next year. Sue’s family (parents. They flipped a coin to see who “got” them and the new baby this year. and ten nieces and nephews) always ate around 5:00 p. Arriving late at Bill’s family gathering caused him to miss the “traditional” pre-dinner pro-football game on TV (which he had grown up believing was the real reason for thanks at Thanksgiving).Tactic 25: Be Flexible A negotiation begins with both parties having some idea of where they hope to end up. 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). and we’re really not able to enjoy either one. we’ll get to our side. The couple used to have Thanksgiving dinner at both families’ homes. two brothers. Making Counteroffers (The “Give and Take”) 103 . If you are flexible. But after the negotiation gets started. established goals. successful negotiators remain flexible because new solutions to old problems often surface during a negotiation. four brothers.
the holiday will be over. So that doesn’t work. There’s nothing “special” about Friday. but she won’t tell you. she suggested a unique alternative. Celebrating the next day seems odd. Nancy: If we keep the time at 5:00 p. it’s okay with me if you can sell it to everyone else. 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. Nancy: I’ll let you know. I know that I would rather not do two Thanksgiving dinners on Thursday. When that goal looked out of reach. either. some people have to work on the Friday after Thanksgiving. but then I realized that the rest of you already go to your in-laws earlier in the day. I thought of asking Mom if she could move dinner up to noon or so. By being flexible. Everyone in Sue’s family liked the idea of celebrating on the Friday after Thanksgiving. we’ll come to Mom’s. Thanksgiving is Thursday. Nancy: We’d make it special by all of us being together.m. Conclusion Nancy’s goal when she called Sue was to talk her into coming to their Mom’s Thanksgiving Dinner on Thursday. 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. I bet everyone could make it on Friday. and it became the family’s new tradition. 104 50 Practical Negotiation Tactics .. Sue: Next year.Nancy: It just won’t be right without you guys. Sue: I don’t know. Bill won the coin toss for this year. Mom’s very upset. I mean. Nancy: What if we did Thanksgiving on Friday? Sue: What? Nobody does Thanksgiving on Friday—that’s un-American! Anyway.
Kids’ Home: As you know. Each year.Example 2 Kids’ Home. the interest income of around $6. We need the city’s help by allowing us to get the city land donated to us (for free). had been negotiating with a foundation to become its major benefactor for a new building and to supplement the organization’s annual operating budget.5 million is available for distribution to numerous charities. The foundation has a substantial endowment fund. a non-profit organization for orphaned children. depending on the cost of the land. Foundation officals: Oh. but the principal of the fund can’t be touched. but we need some assurance that you will be able to build and operate the orphan home at that location. We only have maybe $2 million a year to put toward this charity. Kids’ Home hoped to get $500. Unfortunately (for Kids’ Home). We’re hoping to get a commitment from them to build and help fund the operations of a new facility. but we can’t fund all of the $12 or $15 million. the foundation’s regular annual grants come to roughly half of their available funds. Kids’ Home is also hoping to get the city to encourage the foundation to commit to full funding of the building project. City: Can’t you borrow the money from a bank to build the facility. Estimates for building a new orphan home ranged from $12–$15 million. Kids’ Home and the foundation have decided that a parcel of city-owned land would be ideal as a site for the new building. Kids’ Home: That’s why we brought the foundation’s officials with us. They are meeting with the city to ask that the land be donated by the city for the project. we hope to break ground early next year for the new orphan home. we’re committed in theory. and raise the money to pay it back? And can’t the foundation grant you money on an annual basis? Making Counteroffers (The “Give and Take”) 105 . City officals: We can probably give you the land for free.000 a year for operations.
We’re not familiar with that program. We’ve never committed our funds to pay back a bank loan. Why not ask the state to issue no-interest bonds? It can do that for non-profit organizations. We probably would not be able to participate. 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. We’re a nonprofit group. 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. If we borrowed $15 million at 10% interest. but we’re willing to look at it. it could end up costing double that amount. And “donations” aren’t a very safe collateral for any bank that wants to loan us money. We wouldn’t want to make such a commitment to a bank.Kids’ Home: Borrowing the money gets very expensive. Foundation: City: Foundation: Kids’ Home: Conclusion By exploring alternative financing plans suggested by the city. and really taxes our ability to raise funds. 106 50 Practical Negotiation Tactics . I’ll contact the state tomorrow.
and we would very much like to talk about how we can resolve these issues. Before the Jones family moved into the neighborhood. It is perfectly acceptable to say that you are not ready to reveal certain things. Jones: We’ve obviously gotten off on the wrong foot. The Jones family let their tree branches hang over the Smiths’ back fence and rub against the Smiths’ garage roof. and often took up all the space along the street in front of the two houses. The Jones’ two older children—girls in their early 20’s—often had friends over on Friday and Saturday nights. The Jones family suspected that the Smiths called the police. In order for a negotiation to be successful. These parties could get rather loud. yet not reveal all of your goals and objectives. and trust can only be established if all parties interact truthfully. Making Counteroffers (The “Give and Take”) 107 . the Smiths could count on parking their car directly in front of their house. and often lasted until 2:00 or 3:00 a. Mr. you might not want to reveal all of your priorities at first. The Smiths called the police to complain about a late-night party. you should be careful not to misrepresent your position to such an extent that your opponent will feel that you have lied. But the Jones clan had four cars altogether. The Jones’ two younger children—boys in their mid-teens—hit baseballs into the Smiths’ yard and scared the Smiths’ dog. Smith: We don’t know what you’re talking about. They asked to meet with the Smiths to talk about these disagreements. Mr. the neighbors began to have problems.Tactic 26: Keep Few Secrets One of the most difficult skills to master in a negotiation is how to be candid. and asked the officers to cite the Jones kids for parking too close to a corner. it is not acceptable to lie. and you probably won’t identify your throwaway items or tell your opponent your bottom-line. Successful negotiations depend on trust. At the same time. each side has to know generally what each other wants to accomplish. However. Example 1 Soon after the Jones family moved in next door to the Smiths.m.
Jones: I wish you had mentioned that the last time we talked. 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. if they are outside. and not in the back yard.Mr. Also. Mr. since you’ve asked. Smith: Well. Smith: No. the late-night parties are a problem. In good weather. Almost every day. we’re good now? Mr. Smith: Well. In spite of the Smiths’ assurances.) 108 50 Practical Negotiation Tactics . (A week later. we have a problem walking long distances in bad weather. and was met with the following: Mr. Mr. Smith: You know that your boys are causing our dog. and they won’t be having friends over more than one night a weekend from now on. we thought you might have called the police about our kids’ party and our cars. Jones: Okay. And the music is to be off at midnight. they’re hitting baseballs into our yard. Jones: Well. Muffin. At our age. fine. Jones: We’ve already talked to the girls about the parties. but we do know that someone has complained. Is that everything now? Mr. the next time the boys were out playing and the ball came into the Smiths’ yard. I’ll talk to the boys and we’ll make sure they play baseball in the park. It is really very disturbing. yes. we would like to work out some solution. a lot of problems. that wasn’t us. Mr. And we’ll make sure none of our cars are parked in front of your house. then they’ll need to come in at midnight so that their talking doesn’t disturb you. Mr. they kept it. we’d like to be able to park our car in front of our house. Jones came to see what the problem was. I guess. Mr. If you can tell us all the things that we have done or are doing that have caused you to be inconvenienced. So. Smith: Yes.
or the deal is off. Example 2 Neno Enterprises is a shipping company with extensive global operations.” Forget all we’ve agreed to do—we’ll just enjoy the use of our property. You obviously don’t want to be “good neighbors. Mr. but Neno cannot tell the union this.Mr. The union laborers walked off the job on Friday. Its local headquarters has a union to handle its international shipping. 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. Jones: Sure.S. Neno has been negotiating the sale of its business to a British company. the tree was clearly over the fence. The British insist that a very strict confidentiality provision be part of the negotiating process. you’ve said that before. because they didn’t like a grievance decision. You could have seen that yourself. or European companies do. Why didn’t you tell us? We can’t read what’s on your mind! Mr. Japanese companies often do not “recognize” labor unions the same way U. although none of the facilities outside the U. But we didn’t call the inspector. irate) I can’t believe you people called an inspector on us. We would have fixed the tree if you had asked. Smith: Well. Jones: (at the Smiths’ door. Making Counteroffers (The “Give and Take”) 109 . The union knows that the company is up for sale. have labor unions.S. 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. the British firm will walk away from the deal. Union officials are afraid that a Japanese company might purchase it. Neno’s president and the Union representative met to discuss the walkout. and the deal is close to being final.
110 50 Practical Negotiation Tactics . Union: We think that the grievance decision affects our wages. But we also need to make it clear that we expect you and whoever might buy your company to take our contract seriously. But I have to have everyone back on Monday.Neno: You know this is a wildcat strike and that it is in violation of our contract. We’ve not had a labor shutdown in 20 years. then there’s probably no harm done. I think it already has. is still a labor shutdown. Neno: All I’m saying is that there is a difference. It’s not the time to have one. If that’s going to have a bad effect on your being able to sell the business. the slowdown as a result of no one working Saturday and Sunday won’t be noticeable. Anyone who buys the company will have to honor the contract we have. We can’t put up with the kind of decision we got on our grievance. You really don’t want to do that. any interruption in our shipping could affect how these buyers look at our business. Have the guys back on Monday. it will impact our marketability. I promise you. no harm-no foul. Neno: Look. whether it’s for one weekend or a week. this is a legal strike under the contract. I’ll forget all about the strike. and if the guys are back on Monday. we don’t. I can’t really be more explicit than that at this time. I know it’s not news to you that this business is up for sale. I need your guys to come back to work on Monday. If everyone is back on Monday. do you? Union: No. Therefore. If they do come back. Union: What aren’t you telling me? A labor shutdown. We’ll meet with all of the parties on the grievance first thing Monday. Our guys are prepared to stay out a lot longer than Monday. And one company that is interested has a really good track record on expanding the businesses they buy. You don’t want to mess up our negotiations. I’m certain that if we can sit down and talk next week. maybe by next Friday or the week after that we’ll have our guys back to work. so the union won’t be hurt by the buyout. Neno: Look. we will resolve it to your satisfaction by the end of the day. But if your guys are out past Sunday.
as well. Neno’s decision to respect his confidentiality agreement and simply tell the union that he couldn’t disclose all the information. we’ll be back to work on Monday. rather than make up reasons. Can you assure me of that? Neno: Yes. Conclusion On Monday. He told him that it would mean that the union would not only keep its jobs here. I’m going to go along with you because you’ve always dealt straight with me. Union: Okay. the sale was finalized. But I need to tell my guys that this is important to them as well. and it’s that important to you as well. I would be more specific. If I could. the union was willing to trust Neno—even though he couldn’t tell them everything. Neno called the union negotiator in and briefed him on the sale. but the British firm will allow them to organize at their foreign locations. was the right decision to make. Union: Okay. Because the parties had dealt honestly with each other in the past. while the grievance was being resolved. Making Counteroffers (The “Give and Take”) 111 . I can.Union: It’s that important to you? Neno: Yes. But I can’t.
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”)
000). At least this way the program will have a chance to succeed! 116 50 Practical Negotiation Tactics . I’ll do it now. and clean it. Conclusion At first. that is enough time. but I will cut your staff by one part-time person (or $15. Three. but I will cut your travel budget out completely. I’ll approve $15. Take it or leave it. but the company president does not share your optimism on this program. I can’t help. Roberto: But I need to start the direct mail and newspaper ads within two weeks. I can accept B. Felipe: (Roberto’s supervisor) Sorry.000 in the budget. but no TV or anything until it’s done! (pause) Okay. she chose the one she most preferred. (long pause) Felipe: Let me give you three options: A. B. But when her mother laid out the schedule and gave her alternatives. or C. keeping her Saturday free. I’m not going back to him again to discuss this program. Roberto: Well. Felipe: Sorry. Amber resisted the chore she hated.000 for advertising. or we lose a whole year.Amber: row before your basketball game. I have three hours.000 budget! I need at least $20. Clean it after your game.000 for advertising. I’ll find a way to do without one part-time person. Use the $5. Roberto: But it will never generate enough interest if no one knows about it. Felipe: Well. I’ll approve $15. Example 2 Roberto: I can’t properly advertise this new program with a $5.000.
Conclusion Felipe was willing to think “outside the box. would enable him to adequately promote the program. Roberto believed. 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. One alternative. Making Counteroffers (The “Give and Take”) 117 .
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. Jones: I certainly do. I am very disappointed in the company’s decision not to promote me and to limit my merit increase to 3%. The negotiator for the other side says nothing. he can make an open-ended statement. Here’s how the negotiations went. nearing her third year with the company. It was 16% less than she had been led to believe she would be getting. After a few minutes of silence. Susan: Mr. She was determined to hold her ground for at least a 13% pay increase and a promotion. Susan: I hope so. Unfortunately. received a glowing report from her boss on her job performance. 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.Tactic 29: Prolonged Silence When negotiations have hit a critical stage. If his opponent cannot agree to the demand but does not want to end the negotiations. and the annual merit raise she was getting from the company was the same 3% other employees were receiving. inviting a response. I think you would agree with me that I have performed well above expectations this past year. I have to tell you that while I appreciate what you have done for me. Jones. the promotion had not yet been approved. Example 1 Susan. you are a valued employee. I very much appreciated the fair job performance review you gave me. This should have resulted in an automatic promotion and a sizable pay increase. Susan knew that she was considered a valued employee and that her boss would want to do the best he could for her. and 118 50 Practical Negotiation Tactics . but one side comes back with a non-negotiable demand. 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.
If there is some flexibility in your request. Once he acknowledged that both items might be awarded sometime in the future. Promotions of this type are all but automatic around here. Well. Jones went to management and convinced them that they should give Susan the promotion and the 13% raise. Making Counteroffers (The “Give and Take”) 119 . of course I will be glad to do that.Jones: Susan: Jones: Susan: Jones: Susan: Jones: Susan: Jones: that I deserve more consideration. (says nothing) Or. maybe we can talk about the promotion later in the year. Conclusion Mr. the company’s refusal to grant them now was a harder position to support. but a pay increase of that size might be more difficult. if management can see their way to giving you the pay increase now. and I’m sure management will agree. I really want you to stay with the company.or three-year period. and sell it to management that way. but I don’t think management will be willing to give you an additional 10% pay raise AND a promotion. Okay? (says nothing) Let me check it out and I’ll get back to you. and I think that I really haven’t been dealt with fairly. it could help. I must ask you to try to get both. Susan’s silence prompted Mr. I suppose I could get the promotion approved with the proper presentation. (says nothing) If I can’t get that pay increase approved right now. Jones to continue to offer solutions. I would very much appreciate it if you could ask the company to reconsider. because I feel my future with the company might be at stake here. I could probably find a way to phase it in over a two.
Example 2 Two local governments entered into a tax-sharing arrangement in order to provide joint services to citizens in a more efficient manner. by saying that she might run for Chair. The mayor’s negotiating representative wanted to complete the negotiations on the expanded agreement. The parties agreed to continue the previous terms of the agreement. her plans really don’t have any bearing on these negotiations. The term of the original agreement was nearing its end. has colored these negotiations. She has not decided what she’s running for. Mayor) said that she was considering running for office. Town Council Representative: I think you’re wrong. The mayor. and were trying to settle on new and expanded areas when one of the elected officials (Ms. This is how the negotiations went: Town Council Representative: Well. I don’t think it’s a problem. Mr. Mayor’s representative: No. Also. but the officials had hoped to complete the negotiations prior to anyone involved announcing for office. and representatives of the elected officials of the two towns were meeting to renew and possibly expand the agreement. Town Council Chair’s representative believed that the ability to expand on the agreement was critically wounded by the uncertainty as to which office the mayor might seek. but now they’ve got to ask what Madame Mayor’s motivations are. Town Council Chair). The end of the agreement coincided with the election cycle for the two towns. and until she does. The office she was thinking about was the office held by her counterpart in the neighboring community (Mr. My bosses might not have been inclined to expand the agreement anyway. He decided to push for a simple renewal of the original terms. 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. the people Madame Mayor currently 120 50 Practical Negotiation Tactics .
Making Counteroffers (The “Give and Take”) 121 . Mayor’s representative: Well. Town Council Representative: (silence) Mayor’s representative: I think it would look very bad for both of us if we spent all of this time negotiating and we don’t end up with anything new. Town Council Representative: (long silence) Mayor’s representative: (after an uncomfortably long silence) Well. In the end. and the agreement was renewed with no new provisions. I don’t know what her reaction will be. the Town Council’s representative left the mayor’s representative with no room to maneuver. the Town Council representative’s position prevailed. I think we really have to drop back and just propose a renewal of the tax sharing agreement without adding any new items. He either had to end the session or figure out what to say to reengage the other side.represents have to worry that her desire to switch governments might taint the negotiations. I hate not to attempt to add some additional areas to the agreement. Town Council Representative: (silence) Mayor’s representative: I would think that at least the proposals that don’t involve budget changes could be pursued. I’ll go back and tell Madame Mayor your position. Conclusion By remaining silent.
Your rock barrier has sent the brook onto my property and it is too close to my gazebo. The reason I built it was so that I could protect my patio. She discovered that a rock barrier. Having an iron-clad demand probably won’t give you enough room to reach an agreement. Madeline. Madeline: Hi. Joe. You will have to remove the rock barrier. you should always enter the talks with a good idea of what you are willing to agree to. when one of you might say. I have a problem. Example 1 Madeline bought an old farmhouse outside of a small town. in a small clearing.Tactic 30: Always Leave Room for Dessert Negotiating is the art of give-and-take. As was sometimes the case in these parts. Neighbor: Well. Madeline built a gazebo about 500 yards from the brook. You are more likely to be successful if you identify a range of options that fall within your comfort zone than if you have a fixed bottom line with little wiggle room. the brook and rock barrier are on my property. the brook was the property line separating her property from a neighboring farm. 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. after the gazebo had been there for about five months. and began to renovate it as a home and a pottery shop. “I have to have this. 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. which an upstream neighbor had built. One day. The brook 122 50 Practical Negotiation Tactics .” Avoid making that “necessary concession” too narrow: It should be large enough for both of you to step into comfortably. had redirected the brook further into her property. she noticed that the brook came within 100 yards of it. She went to discuss this problem with the upstream neighbor and had every intention of demanding that the barrier be removed immediately. It calls for compromise. Obviously. The property came with three acres of forest alongside a meandering brook.
By expanding the range of options available to resolve the dispute. It might not be necessary to make such a dramatic change. I understand that. 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. Neighbor: I’m sorry. I couldn’t have that. Neighbor: I can do both of these things. what I need is to protect my property line and my gazebo. restore her property line. but only if I have a clear understanding with you that the barrier will be rebuilt to protect my house. I won’t remove the rock barrier. Madeline: Well. she widened her range of options. if the brook is redirected. at least I’ve maintained my property line. Madeline: But by diverting the brook. which enabled her to achieve her goals. you have not only threatened my gazebo. but you’ve changed the boundary line of my property. Conclusion Madeline’s objective when she met with her neighbor was simple: Have the rock barrier removed. I’ve lost 400 yards of property on my three acres. This will put these houses right next to me. Madeline was able to protect her gazebo. Then. and return everything as it was. Making Counteroffers (The “Give and Take”) 123 . Also. 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. What if you removed the barrier for a short time. Madeline: Yes. She left room for a compromise. My neighbor on the adjacent farm wants to sell part of his property for a housing development.extended right up to my back door when the rain was heavy. 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. and allow the neighbor to protect his home. I can’t have the brook in my house.
and we know that with this new contract term of five years.000. Over the last five years. With long-term planning and investments. and the premiums for health care just keep going up. And we cannot afford that $1. The pilots want dependent coverage paid for by the company. the company can make your pensions much better. Company: This could not come at a worst time for us. The projections for the next five years were that these costs would increase to about $1. as it has always been. However. The airline industry is in a slump. then the pension benefits overall will increase by $10. Over the next five years.000 a year over the next five years? Company: Yes. the airline paid a total of $200. dependent coverage could cost us $1. with all wage and operations issues resolved fairly early.000 figure.000. we know that health insurance premiums might skyrocket. you are taking a risk on the costs increasing. But only a few of our people are close to retirement age. what they really need is for you to cover the costs of dependent coverage. This would be a better benefit in the long run. that would be the minimum increase.Example 2 The contract negotiations between the pilots and the airline had been going pretty well. Everyone was afraid that the dispute would cause an impasse and a possible strike.000 (which we reasonably should have expected to pay in premiums) in the pension account now. 124 50 Practical Negotiation Tactics . This is just a cash-flow problem that your members have to understand. Pilots: So you are projecting that the increase in dependent coverage premiums will average $200.000.000. If we invest the $200. the discussions of the employee benefits package bogged down on the issue of health insurance costs and pension benefits. Pilots: Look. The company wants to trade paying for dependent coverage for better pension benefits.000.000 to cover the premiums for dependent coverage.000. As best as we can tell.000. and are willing to keep pension benefits the same.
000 to either pay one year of the premiums.000 the first year on the premiums. Company: If the company spends the $200. that would be worth it.000. we are.000 actually carried them through four years. Company: Then it’s okay with us. Are you willing to risk not having an opportunity to increase pension benefits? Pilots: Yes. by agreeing to let the company cap its exposure for dependent health coverage. so the decision to be flexible was a good one. and the pilots knew what to ask for when the contract expired. with a cap of $200. Making Counteroffers (The “Give and Take”) 125 . The dependent coverage is more important to us now than the pension benefits. If we can get two or even three years out of the $200. or invest in the pension plan? Company: Yes.000? Once the cap is met. Pilots: Since the concern is about agreeing to a 5-year commitment without knowing the increases we might have in health insurance costs.Pilots: But you do have the $200. then those funds will not be available to invest in the pension plan. Conclusion The company was committed to limiting its exposure to $200. if they were that high. can we agree to a year-to-year agreement on dependent coverage. The $200. It initially believed that the only option was to put that money into pension benefits. The health insurance market stabilized.000 available. however. The pilots expanded the range of options. the company will not be expected to give us this benefit.
” Salesmen use this standard tactic with “big ticket” items: They present the total cost in small enough pieces to sound reasonable to the other party. be sure to add up the total cost. I recall the day you drove it out of here. Example 1 Car buyer: What. Buyer: Yes. If you are on the receiving end of such a tactic.000 for a Volvo? I bought the one I’m driving for $19. Saleswoman: With your 740 in trade.000 car. but the Consumer Price Index has not gone up 150%—nor has my paycheck! Saleswoman: So. Phrases such as “for only pennies a day. I love this car.” “affordable weekly payments.… (20 minutes later) Saleswoman: So. and compare it to your strategic objective. Saleswoman: I’ll be right back. I just can’t imagine the monthly payment on a $45. $45. do you want to look at something else? Buyer: No. if I can give you this car with a $300 monthly payment.” and “low monthly rates” are examples of the salami tactic.Tactic 31: Cut Salami Slices One way to overcome anticipated or exhibited resistance to a proposed cost is to cut it into smaller units or “slices of salami. what monthly payment did you have in mind? Buyer: More like $300 per month.500! Saleswoman: Yes. but that was several years ago. Buyer: Way too much! Saleswoman: Well. I guess it would be around $600 per month. it’s a deal? 126 50 Practical Negotiation Tactics .
Saleswoman: Simple. as promised.000 down and $300 a month! Conclusion The saleswoman knew the buyer was suffering from “sticker shock. and payout slices to reach the total price she wanted. Sure. do you want Disney? Yes.000 down. but let me see the numbers. down payment.99 per month.” she had him—she worked around the $300 slices. Once the buyer volunteered that $300 was an affordable “slice. and added the trade-in. Let’s see. but what else must I buy? Only the basic service for $8. Instead of a three-year lease. it will be a five-year lease. Example 2 Cable representative: Owner: Cable representative: Owner: Cable representative: Owner: Cable representative: Owner: Cable representative: Owner: Yes. You can do that. can’t you? Buyer: Yes. (looks at the numbers) That looks good. I can’t afford that much. Making Counteroffers (The “Give and Take”) 127 .000 price into “slices” the buyer thought reasonable. I can’t discuss another client’s account. But my neighbor pays $39. you can get the Disney channel for only $5.Buyer: I don’t see how you can do that. I can afford $6.00 per month.00 per month. Great! So. do you want HBO? How much? $5. with your car and $6.” She decided to cut the $45.00 per month for your service.
00 a month. 2? How much? $8.00 per month was far too much. 2. But that’s all! Then we’ll hook you up on Monday. 128 50 Practical Negotiation Tactics . That’s another $5. but he agreed to six “salami slices” for a total of $38. Conclusion The owner thought his neighbor’s service at $39. Thanks. and probably felt much better about the total negotiated package because it was presented in modest individual slices. That’s $5. we had that before. and my wife wants the old movies.99 per month. Great. Disney is for the kids! The sports channels are for me. they asked about the Cartoon Network. Yeah. Any other kids’ channels? Yes. 3. Okay.00! Why? Because he judged the per-slice price to be reasonable.00 per month.00. and SI 1. What about the music package? Yes. I really want the sports channels.Cable representative: Owner: Cable representative: Owner: Cable representative: Owner: Cable representative: Owner: Cable representative: Owner: Cable representative: Owner: The Sports Combo–ESPN 1. The total is $38. instead of one total amount.
When both sides believe that each has equally strong positions. Humor might not look like pressure. today. the traditional car salesperson might tell the buyer.m. but it can be used effectively when one party clearly has an edge. Tactic #35 (Applying Excessive Pressure) is a similar tactic that should also be used with caution. pressure tactics should probably be avoided. Other less-obvious pressure tactics include Tactic #37 (Divide and Conquer). but others will walk out the door. an unexpected element of humor can break the tension and encourage a person to calmly get back to the issues. 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. Tactic #33 (The Bluff) is a classic pressure tactic. it is effective. and the use of humor. angry negotiations. Applying Pressure 129 . For example. Tactic #36 (The Element of Surprise) can catch an opponent off-guard and cause stalled negotiations to move forward. “I can only guarantee this price until 6:00 p. It should be used with caution: It can end negotiations immediately. so are you ready to make a deal? This might convince a few buyers.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. In some cases. which can be successful if the opposing team has two or more members who hold different views of an issue. Some less-obvious and more easily accepted pressure tactics are to use visuals to control the negotiation talks by focusing discussion on subjects that favor your side (Tactic # 34). and it can destroy your credibility. but in tense. turned off by the tactic. however.
It 130 50 Practical Negotiation Tactics . The two couples used the sailboat a lot the first couple of years. Lacey: I know. Lacey. I think Chloe and I would be willing to pay more than just the money you guys put into it. he and Chloe wanted to buy out Don’s and Abby’s interest. getting a divorce and each moving away (and would have no more use for the sailboat). in fact. and we’ll be moving south in the next month or so. together and separately. Example 1 Don and Abby went in on the purchase of a sailboat with their friends Lacey and Chloe. And we don’t want to be unfair. and we need to talk to you about how we can buy you guys out.Tactic 32: Don’t Exaggerate It’s always acceptable in negotiations to put your best case forward and present your position vigorously. In the last couple of years. When Lacey found out that his employer was transferring him to another city farther down the coast. Such exaggerations are easily revealed or uncovered. I can’t tell you how many times Abby has said how happy she is that we have the sailboat. Lacey: Don. Although I do think there ought to be some consideration for the two years you had use of the boat. Don: Absolutely. Don: Wow. big news! I’ve been promoted. Your opponent will consider you untrustworthy and might even be insulted by your attitude. We’d hate to give it up. boat prices have really gone up. and they will weaken your credibility. Don and Abby now use it less and less. but it is not a good idea to exaggerate what you are offering or what you are giving up. I don’t know. Abby really loves that boat. Lacey and Chloe didn’t know that Don and Abby were. 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. Chloe and I would like to take the sailboat with us. but Don.
Abby told Chloe about the divorce and about how she never wants to see the boat again. It just reminds me of how happy Don and I used to be. the boat has depreciated. Chloe: Oh. Don. I’m sorry.) Lacey: Don. and neither of us put much in for upkeep. It’s about time now for some major investment. I’ve been thinking. I have big news too. and I’ll get back to you. I was afraid something was going on when you all-butstopped joining us on the boat. 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 thought you understood how important this boat is to Abby. Let me talk to her. Abby is having this conversation with Chloe) Chloe: Abby. After all. (After Lacey and Chloe had a chance to talk. (Around the same time. Don and I are getting a divorce. which you would have to share if you want to retain half-ownership. Lacey: Cut it out. big news!! Don got his promotion. he likely would have found himself in a stronger negotiating position. but separately. Abby: That boat. 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. Lacey and Don’s negotiations changed considerably. Applying Pressure 131 . We’ll be leaving here for the Midwest. If Don had not exaggerated the importance of the boat and dealt with Lacey honestly. though it’s not so happy. I’ll be glad never to see it again. and we’re moving farther south. I’m surprised by your attitude.is just about the most important thing we own. Don: Lacey. Abby: Well.
I’ll be going back to them as soon as next week. Here’s how these negotiations went: Company president: Well. I’m telling you the stock price is having a huge impact on us already. but this has been such a crazy situation. The current stock price is the lowest it has ever been. I think you’ll have to agree with me that wage increases in this next contract will not be available. Telling me there’ll be no wage increase and asking for wage concessions now is a little premature. the situation in the stock market is not good. I’m afraid that with this current information. 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. Union negotiator: The stock price might be down right now. and that the economy is strong. I’ll be looking to you to make some major wage concessions on this upcoming contract. And while these fluctuations have little to do with the health of the company itself. 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. in this global market. I’ll have to show them 132 50 Practical Negotiation Tactics . our production line changes at least three times a year.Example 2 Aimes Manufacturing had experienced major ups and downs in the price of its stock for the last two years. And as you know. I read in the papers every day that the market is still strong. Company president: Well. the company president decided to use the stock price as a negotiating tool during the current union contract talks. in fact. I can’t see how today’s numbers really impact the long-term profitability of this company.
here’s what happened. Let’s get back together next week. When negotiations resumed. The union became hardened in its position that the employees needed wage increases in the new contract. but your proposal to cut wages is just not going to fly. the company’s position was weakened even more. we’d like to reopen talks on next year’s pay increase. okay. and the union ended up with a substantial increase in their contract. Company president: What? I thought you understood that it is essential that we get concessions on this if we want to stay afloat. If the stock goes up next week.that we’ve cut expenses to counter the losses in the stock market. and I’ll have our people look at it. but I checked it out and it’s not totally true. We think this company is very healthy and can withstand the temporary downturn. So. Union negotiator: I know that’s what you told me. Applying Pressure 133 . he lost the trust of the union. (In the interim. Give me your proposal for wage concessions. Union negotiator: Well. Company president: All right. If you put it that way. no concessions! In fact. the union checked into the Letter of Credit transaction with some experts in banking. When the market took a swing up during the negotiations. this week’s price would have little or no effect on your ability to get a Letter of Credit from the bank. they would do a thorough analysis and look at the health of the company over the long haul. Conclusion Because the company’s president over-emphasized the impact of the market on the company.) Union negotiator: I’m sorry. let’s talk about it. They told union officials that it would be very rare for a bank to make its decision solely on stock price.
I really hate it that you chose to see the movie with Charlene. Christy realized that asking for a commitment from Tom at this stage would be a very serious discussion. If you subsequently agree to begin talks again. Tom: Oh. There is a chance that the tactic will work and that both sides will agree to the proposal on the table. are you? Christy: I don’t want to be. you will have lost credibility with your opponent. but I really am. it might backfire. We don’t have that much free time together. and they really have no intentions of doing so. Both of them were still in graduate school and worked full-time. Christy was surprised and hurt when a friend of hers mentioned that she had seen Tom at the movies with his former girlfriend. I knew you had a class. This can come back to haunt you. and I really wanted to see the new Lenny Bruce movie. Example 1 Christy and Tom had been dating for about a year. but you always run the risk of having the opposing party call your bluff and end the negotiations without reaching agreement. Sara said she saw you at the movies with Charlene yesterday. The couple had not discussed marriage. Poker players know all-too-well-that bluffing can be very costly. You’re not upset about that. yeah. either. but Christy thought the relationship was heading in that direction. Here’s how the discussion went: Christy: Tom. they are bluffing.Tactic 33: Bluff! Bluff with caution. If one party threatens to walk out of the negotiations if a demand isn’t agreed to. She knew that if she made such a demand and threatened to leave him unless he made a commitment. I guess I’m just surprised. 134 50 Practical Negotiation Tactics . Charlene. I called Charlene and she was available. Christy thought that their relationship was exclusive: She hadn’t gone out with anyone else. and she didn’t think Tom had. so their “free” time was very limited.
It is. Since he wasn’t sure about that. I need to have your commitment that you won’t do that. The union negotiators. I’m willing to risk losing you. Christy: I just can’t see it that way. he had to make a commitment or risk losing her. so he didn’t call her bluff. He believed she was sincere. I’m not “dating” anyone else. It’s made me realize that I want us to have an exclusive relationship. 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. It really wasn’t a “date”—we just saw the same movie together. If that’s not possible. Christy would have had to decide whether or not she was indeed bluffing or if she would really end their relationship. Tom: You’re serious? It’s that important to you? Christy: Yes.Tom: She’s a friend who happens to be a girl. but very little progress had been made. and at first he thought she might bluffing. If Tom had “called” Christy’s bluff. she paid her own way. Tom: Okay. then I’m afraid I want us to stop seeing each other. Applying Pressure 135 . I won’t go out with any woman friend. I certainly don’t want to lose you. She convinced Tom that her feelings were strong. Conclusion Tom didn’t want to lose Christy. if you can’t make that kind of commitment. I just thought of her because I knew you weren’t available. Tom: I have friends of long standing who are women. 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. Actually.
Nexon: I’m sorry.) 136 50 Practical Negotiation Tactics . We need an answer today. Another bargaining session was scheduled. we want the part-time workers to apply for and fill fulltime positions as they become available. Nexon negotiators did not believe that the workers would actually strike this early in the negotiations. We’re not going to reach agreement on this at all. Union: You don’t seem to understand. This is a critical issue to us. First.believing that Nexon would not risk a strike. we’re really prepared to go the distance on this benefits issue. Why don’t we put this one aside for now. This is something we just have to have. much less today. The union members ended up voting not to strike at this time. We need some agreement on this today. Second. or else we’ll be asking the membership to strike. Here is what happened at the next negotiations session: Nexon: I’m sorry. (The union negotiating team left the bargaining session and called for an emergency meeting with all union members. and try and reach agreement on the cost-of-living increase you’re proposing? Union: No. If we’re not able to reach agreement on this. 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. then all of our other demands will change. Many of our union members who are working part-time hope to work full-time. it will cost too much. but working without benefits is simply not acceptable. And I don’t believe you’re going to go call for a strike over this. Nexon: I’m just not prepared to give you one. Nexon: We’ve got lots of issues to discuss. Union: You’re wrong. but the company cannot offer the same benefits to the parttime workers as it offers to the full-time workers.
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
for example. not blessed with many household repair skills. Example 2 Let’s face it: Sometimes one party holds all the cards. On the other hand. Unions can strike at any time to achieve their goals if they have some leverage. there were times when there was no pressure and no emergency. Many companies sell “tune ups” and routine seasonal checks to keep their people busy all year. because this is the busiest time for that industry.” Example 1 We have all been at the mercy of someone who uses pressure bargaining. Try bargaining with a plumber! This homeowner. while the other is not—that is. The same kind of thing happened a couple of years before that: In the middle of August. Since his toilet had overflowed and water was continuing to run all over the floor. He was at the mercy of the company that could install an appropriate unit the fastest. and was forced to pay whatever they demanded. They are more flexible on price and service when they know the consumer is not under any pressure to buy the service being offered. once had to call a plumber in for emergency repairs. such as the advantage of time. he was able to successfully bargain for other services. its union has the advantage in the weeks just before Christmas. the guy was in no position to dicker over the price of the repair.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. If the employer is a shipping and express mail company. The owners of professional sports Applying Pressure 141 . when one side has “leverage” over the other. Since the heating and air conditioning company held no leverage over him. It is sometimes referred to as “pressure bargaining. It’s easy to prediet the outcome in collective bargaining talks if one side is clearly in a very favorable position. his air-conditioning unit went out.
if the unemployment rate is high and jobs are few. low employee motivation. she has leverage and can more likely hold firm on her price.teams are generally more vulnerable to pressure from the players’ union several days before the season begins. can suffer repercussions in the form of sabotage. and other undesired outcomes. Employers who refuse to give in on issues of high importance to employees and exert pressure on unions to accept their terms. but they are less willing to negotiate several months ahead. then you are in a position where you can set reasonable demands on wages. The employees had no power to resist the demands of the employer.) The leverage of supply is also very powerful: If a jeweler has an exclusive contract to sell a ring everyone wants. When one side places undue pressure on the other side. there are likely to be long-term repercussions. This gives it the upper hand in negotiating with employees. On the other hand. When the employer proposed adding duties to the job classifications. either individually or through collective bargaining. benefits. consider whether or not the two parties will likely meet again in the future to negotiate. etc. What goes around comes around. Many labor contracts were agreed to when unemployment and inflation were high and employees felt pressured to accept the demands of the employer. Other employers find themselves in situations that actually reverse the leverage (when. for example. 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. Conclusion “Pressure bargaining” is a way to achieve objectives that are greater than what is deserved or desired by the other side. the employer has the advantage: a supply of jobs. however. will what goes around come around? 142 50 Practical Negotiation Tactics . If so. but before you choose such a tactic. despite strong resistance. unemployment is low and jobs are plentiful. A note of caution: Circumstances in one round of negotiations might give one side an advantage. it is the union’s turn to hold firm on its demand).
(Their dad pulls to the side of the road and turns to face them in the back seat. but use this tactic judiciously. Andrea: The doll is mine. Example 1 A father and his two daughters were on their way to visit the grandparents. I took it out of the box. Susie: The doll belongs to both of us. (In a few minutes. Mom said so. Andrea.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 girls had been fussy. and Susie. I can’t drive if you keep this up.) Applying Pressure 143 . We’ve got a long ride ahead of us. because you will probably only get to use it once. Susie: Okay. The doll can be shared. and I can’t stand it. you have it when we drive home. Almost from the beginning of the three-hour drive. Why? A sudden surprise can disrupt the dynamics of a negotiation. the fighting starts up again. the little girls began to fight over the doll. You’re driving me nuts. the argument is over the doll’s shoes. Andrea: Okay.) Dad: Stop it right now. and Susie hid them under the seat. This time. About an hour into the drive. Just share the doll. Andrea had taken them off the doll. Consider making a suggestion or a proposal that completely surprises your opponent. you have it this part of the trip. They stopped for lunch at a fast-food restaurant and shared a children’s meal that came with a small doll. Just because you saw it first doesn’t make it yours. Tell Susie to let me have it. and here’s how the “negotiations” went: Dad: You two stop fighting. Their dad tried to reason with them.
Conclusion Dad’s use of a “surprise” tactic was extreme. Dolly has to have her shoes. charging that they breached their duty in their handling these funds. Daddy said I got the doll on the way to Grandma’s house. Dad tried correcting them a few more times.Andrea: Give me the shoes back. they didn’t say another word. I think I have acted properly. 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. but nothing else up to that point was working. He grabbed it and threw it out the window. at great expense to the auditor’s office and the school board. I want the shoes. The tactic was so successful. (They continued to argue and whine and pinch each other. and I hope I can convince you of that. and reached back for the doll. The auditor asked to meet with the editor to explain his position. and that they had invested and spent the tax dollars wisely.) Dad: Now there’s no more fighting over the doll. The litigation itself had been going on for more than three years. The local newspaper was prepared to urge the auditor to end the litigation. The defendants contended that the auditor’s actions were politically motivated. The auditor’s job was to make sure that tax dollars collected for the local education system were appropriately handled. He initiated the litigation against the local school board members and several banks that invested the money for the board. Dolly doesn’t need shoes on in the car. Both Andrea and Susie were so shocked by their dad’s action. in fact. he slowed down. Finally. so it was worth the risk. to no avail. Susie: Daddy didn’t say anything about the shoes. Here’s how the meeting went: Auditor: I appreciate a chance to talk to you about this litigation. She can have them later. 144 50 Practical Negotiation Tactics .
there’s just nothing to back up your allegations. this case needs to be dropped. They’ve been making that same argument from the beginning. Editor: (surprised) Really? They settled? This is public information? Auditor: Yes. The auditor successfully used the element of surprise in announcing the settlement and thus changed the direction of the editorial. the bank would not have done that had we not proven our case. Obviously. Here are the papers. as a matter of fact. My frustration is that they have refused to provide our office with sufficient information to back up their contention that what they are doing is best for the schools. but I have to warn you that from what I’ve seen and heard so far. and a significant amount of money will go toward the tax fund. Your reporters will probably want to follow up on it. Auditor: I appreciate their arguments. I think I have something here that will convince you otherwise. Conclusion The editor wrote an editorial urging a resolution for the good of the community. This morning. Editor: Well. They are very persuasive that this is just a political battle. Editor: Well. but actually superior to some other entities you supervise. We believe the other defendants will soon follow suit. and it is costing your office money and good will. but recommended that the parties reach a settlement.Editor: I’m certainly willing to listen. one of the banks settled with my office. perhaps you should just cut your losses—and just drop the suit. I guess we’re finished here. Auditor: Well. From what I can see. I really think the community would be better off. Thank you for coming in. That’s really the reason this has gone on so long. rather than drop the case. Applying Pressure 145 . The school board members make a very good argument that their practices regarding how the funds were expended are not just adequate.
Mike knows he needs to get either his wife or his son on his side. If the other side involves more than one person. they’ll be mobile! The last thing I want is for them to be out cruising around. although getting your license and getting a pool table are connected. Tina: I’m really against this pool table idea. Dad. and a car is more important to him than a pool table. 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. try to focus on that subject or address that member directly to get them to be more amenable to your proposal. Tina and their son Kevin are against the idea. Kevin is against it because he is turning 16 years-old soon. but I think it will get a lot of use. If the negotiating team sitting across the table from you seems to be divided on a subject or one of the team members seems to be more sympathetic to your arguments. I’d 146 50 Practical Negotiation Tactics . night after night. Example 1 Tina’s husband Mike wants to buy a pool table for their family room.Tactic 37: Divide and Conquer Certain negotiations lend themselves to a divide-and-conquer tactic. I can remember spending hours playing with my friends and family when I was growing up. Mike: I know. Tina: What do you mean? Mike: When Kevin and his friends get their licenses. I want to talk about a car! Mike: It’s really not one or the other. Kevin: I don’t really care about a pool table. I know we’ll all enjoy it. Kevin: So am I. especially Kevin. you might be able to dilute their power by identifying their different interests and addressing them separately.
Example 2 Negotiations on a new union contract seemed to be going quite smoothly. A pool table could attract them here. who was studying the company’s financial records for the team) became uncomfortable when he heard Tom’s demand. 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. I’m surprised. Here’s how the negotiations went. received it without comment. Instead of both opposing the idea. But I’m not going to hang out here all the time. Once Mike convinced Tina of the idea’s merits.like them to hang out here more. She noticed that Jim (another member of the union’s negotiating team. Tina: Well. the head of the union negotiating team. 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. Wylma: Tom. then maybe it’s not such a bad idea. only Kevin did. I thought we were making real progress. They bought the pool table. the chief negotiator for the company. Kevin. Tom. she joined his side of the debate. some. Mike: I really do. has just presented the company’s initial wage offer. and Kevin and his friends use it often. A number of contract changes have already been worked out and Wylma. Conclusion Mike found an argument that divided Tina and Kevin. don’t you think you guys would use it? Kevin: I guess so. What happened? Applying Pressure 147 .
as Jim can point out to you. Tom had reduced his wage demand significantly. forcing them to reconsider their demand. you’ve heard our demand. 148 50 Practical Negotiation Tactics . Conclusion Wylma’s appeal to Jim’s knowledge of the actual financial situation of the company worked to divide the union’s negotiating team. When the negotiations began again. Tom: We don’t think so. Wylma: Jim. Jim? Jim: Yes. Wylma distributed copies of financial data that showed the company’s current condition. Right. But Tom. Do you think this is reasonable? Jim: (looking uncomfortable) Well. Let’s start again tomorrow morning. Your demand is totally unreasonable.) Wylma: Now Tom. Wylma: Let’s take a break.Tom: Wylma: Nothing happened. but he added some workplace changes that Wylma was comfortable negotiating. (When they resumed. Wylma: Tom. you’ve seen our sales projections and production costs. these are our actual accounting figures. This is just what we think is fair. these are accurate. you certainly are aware of our financial situation. I think you need to rethink your demand.
and had children. and it makes me very sad. the oldest and youngest Jones children. so you can find a way to quickly neutralize it.Tactic 38: Break the Tension Tension is inevitable in most negotiations. but the thought that matters. especially between Madison and Cory. Cory: Madison. It was a tradition in the Jones family to spend Thanksgiving dinner arguing about how the family wanted to celebrate Christmas. We can’t afford to buy each other things we really need. Humor often works to break the tension of the room. it was easy to agree on just giving presents to the children. Tempers flare and people say things they shouldn’t out of anger or frustration. 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. Ever since Mom and Dad died. I want to say something. I don’t feel Christmas in the way I used to. You are almost 40 years old. but it is really important to me. married. Madison: Okay. Sometimes the argument got heated. That will just make a bad situation worse. Stay alert and watch for clues that a negotiation is about to get out of hand. so what’s the point? I don’t need another tie! Madison: It’s not the gift. Applying Pressure 149 . Example 1 The four Jones kids grew up. so pressure grew to draw names and exchange gifts. but it should never be at anybody’s personal expense. but as the children grew up and had families of their own. get over it. some of the siblings decided they liked giving presents to one another. I know that you all think I’m silly about wanting to exchange Christmas presents among the adults.
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.
Then we can color. Isn’t it “later” yet? Right now would be a good time to go outside. One day. they were the last children left in the playroom for the remaining two hours of the day. C. Okay.” Can I color now? You said we would color later.Tactic 39: Compromise Negotiations are successful when all parties walk away with an agreement they are satisfied with.: Julie: Dara: Mr. 154 50 Practical Negotiation Tactics . the exchange will be between things of equal value.: Julie: Dara: Julie: Girls. When that point is reached. Dara. If I can be the Princess. don’t you want to play? We could color before your mom comes. how about going out to the yard for a while? You can swing or play ball. who was outside with older children. they would have to play ball with older children. but since the other children in their room were not there. and that doesn’t happen without compromise. was ready to color. or maybe tomorrow. it is better not to compromise. the individual might be afraid that the exchange isn’t equitable). I want to play “Princess” and I want Dara to be the “Prince.” Dara. If there is resistance to compromise. At some point. each side must decide whether or not one more compromise will produce an agreement that they will later regret. Mr. however. 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. The day-care worker wanted to take them outside for a while so that he could visit with his friend. Example 1 Julie and Dara both attend a local preschool.” but she needed Dara to play with her. Both of the little girls liked to play ball when they were outside. I want to play “Prince and Princess. (In a successful negotiation. Julie wanted to play “dress-up. C.
wouldn’t you like to go outside first? After you swing for a while or play ball. The owner decided to try for a variance. 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. Mr. you can come back in and play “Prince and Princess. the parking lot will start to look trashy.: Julie: Hey. Conclusion The children stayed inside and played dress-up. failed to offer the children something that was as important as the plans they had made. 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. and they still had time to color.” No. neighbors became concerned about the changes to the mall. C. The owner and a small group of neighbors met to talk about these problems. According to the city’s zoning laws. and teenagers attracted by Making Progress 155 . The existing parking lot didn’t meet the current parking standards for that size theater. We don’t want to go outside. the owner had to supply additional parking. They did all the compromising they were willing to do. there will be an overall increase in traffic coming through the neighborhood and vehicles will be turning into and leaving the parking lot. We want to play dress-up and then color. however.Mr. C. When his variance application was made public. or apply for a variance. Example 2 The owner of a small strip mall in the heart of a residential neighborhood was planning to add a small movie theater to the other businesses in the mall. The neighbors: The neighborhood has four concerns: Theater patrons will be taking up scarce on-street parking spaces.
We’re just not convinced.the theater will start to hang around and maybe wander around our yards at night. and break in his door. I’m certain the lot will accommodate the theater crowd without increasing the parking on your neighborhood streets. We’d really like to block off that cut-through and have the theater face the south. not having direct access to the south lot from the street would be unworkable. lights in and out at night can be very annoying. with your plans to put the entrance of the theater on the east side of the mall. With the Comedy Club and the grocery store on that end. The neighbors: Owner: 156 50 Practical Negotiation Tactics . but it’s not ever full. and we’d like to keep it that way. 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. What if I changed the entrance to the middle of the lot? That way. I’m afraid. the closest parking to it is along Elm Street. the north lot is used more. Right now. We hope you’re right. We’d like you to prohibit cars from entering or leaving from the south lot. All a patron has to do is park on Elm and walk beside Joe’s yard through the small alley there. as you said. if I agree to move the theater entrance to the south side. I could put a privacy fence along the east and west—at the backs of your yards. only when that lot is full would cars come around the mall and park on the south side. In fact. And. So. the south parking lot has not been used much. even though I’m not adding any parking. Not having in and out traffic to the south of the mall is just not very practical. The fence would shield neighbors from the lights from the vehicles and block the walking access through the alley. Right now. Many of our homes back up to that lot. Owner: You know that there’s always plenty of parking in the south end of the mall’s parking lot.
Making Progress 157 . Conclusion Both sides had to give up something on certain items in order to reach agreement.The neighbors: Owner: The neighbors: Owner: But we use those side drives to get to our garages. Agreed. The fences created a buffer from the lights and noise. however. If I agree to move the theater entrance to the south. add a new entrance into the south lot. The fence would help with the vehicle lights and buffer this noise from the kids who hang around. there could still be access from the street to our garages—just not to the main parking area. but the privacy fence has to be landscaped so that it doesn’t look like a ghetto wall. set back a driveway width. But you’re going to have to have some kind of security as well. and make sure the parking lot is kept clean. The compromises were what everybody could live with. And a year after the theater opened. If the fence was set back the width of a driveway onto your property. then will you agree not to push for increased private security? Yes. the neighbors reported that they were very happy with the way it all worked out. put a privacy fence along both the east and west sides of the south lot. Now you’re talking about considerable expense. and they discouraged patrons from parking on neighborhood streets. Teens can form into gangs if left unwatched.
Joan was already pretty tired. because you are the one to set the tone for agreement. they had gotten nowhere. Mrs.m. and that as angry as they were. Joan: Hi. and sleeping at night was already a difficult proposition! When the neighbor’s dog began to bark at 3:00 a. 158 50 Practical Negotiation Tactics . and I just moved in next door. and didn’t stop until 6:00 a. she just didn’t think it was a serious problem. but going out of your way to be friendly is an especially helpful tactic. Lonely. If your opponent is aggressive or angry.Tactic 40: Be Friendly Being polite. She sought advice from the family on the other side of the neighbor with the barking dog to see whether this 3:00 a. but be friendly. your friendliness might disarm and relax them to the point where they begin to talk about their priorities and objectives. professional. Close your windows at night and don’t listen.m. respectful. I’m Joan. so her neighbor’s barking dog came as an unpleasant surprise. Example 1 Joan was new to the neighborhood. She learned that everyone in the neighborhood had complained at least once. They might even start to underestimate your negotiating skills. Your opponent might give in readily. and started to get upset. 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. Joan had a new baby.. just forget it. and because she was hard of hearing. and pleasant always enhances one’s ability to reach an agreement. and what kind of complaints might have already been made. Lonely’s only companionship. This gives you an advantage.m. Present your position forcefully. Joan decided to at least try and talk to the neighbor. incident was usual or unusual. The dog was Mrs. Lonely: If you’re here to complain about my Rocky. She didn’t believe her neighbors ought to complain about the barking. Mrs. thinking that you will be just as easy to work with on the sticky issues.
Lonely: Joan: Mrs. Well. it’s probably because they just haven’t had the time to get to know him. I know that some of these people around here don’t like him. I might have to talk to you about Rocky. but she took her baby and went to visit Mrs. too. not at all. don’t worry about that. Why. Making Progress 159 . I guess that would be okay. Lonely: Joan: Mrs. sure. I’ll see you. Who. Here’s my little angel. I’d like to introduce you to my new baby. I’ve got a friend who is a veterinarian. Do you think his age has contributed to some of that? You know. I stopped by and visited with him over the fence this morning. Well. I sure hope he starts sleeping through the night soon. though. Maybe I could come back tomorrow and bring him? Oh. I just wanted to come by and introduce myself. Lonely again. No. When he does. then. isn’t he cute! He’s a handful.Joan: Mrs. The barking at night has been mentioned to me. no. and I’d like to have him stop by and look at Rocky—would that be okay with you? Well. I can’t pay for something like that. How long have you had him? Almost eight years now. He’s been keeping me up at night.) Hi. is a really sweet dog. I guess so. Lonely: Joan: Mrs. I need to get the baby home. by the way. I’ve only got my Social Security. Mikey. My friend wouldn’t charge anything for talking to us about Rocky and maybe giving us some advice. Lonely: Joan: No. (Joan’s sleep was disturbed by another night of barking. He’s a real comfort to me. Lonely: Joan: Mrs.
. Hearing about this from the press obviously puts you in a very embarrassing situation. you would have. overseeing a factory in Mexico and selling products in the states. its 150 management and sales employees could continue to work in Happy City. he prescribed medicine that gave Rocky a more regular sleep schedule. Here’s how the meeting went: Company ZZZ: We’re very sorry. Company ZZZ. that’s very understanding of you. 160 50 Practical Negotiation Tactics . Lonely didn’t have to pay for the medicine she could not afford. U.S. It’s very difficult to make a move of this type without having it leak out. Mayor: (very friendly) I understand how these things happen. agreed to meet with the mayor. Lonely’s needs and arrive at a workable solution to the problem. 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. The barking all but stopped. Joan took up contributions from the neighbors. recognizing that the layoffs would be an issue in upcoming local elections. After Joan’s veterinarian friend visited with Mrs.A. I think that if you could have let me know ahead of time. When he heard the news on the radio. Lonely and Rocky. of course.Conclusion Joan’s friendly approach enabled her to understand Mrs. the mayor called and asked for a meeting with Company ZZZ officials. Example 2 Company ZZZ planned to close its manufacturing plant and lay off 300 union employees. that the press got hold of the story of our company’s activities before we could call you to let you know. and Mrs. Company ZZZ: (surprised) Well. They anticipated that it would be an unpleasant meeting. Under its new corporate structure.
They need a really good deal on the plant price. Many laid-off employees did indeed find new jobs at the plant. because I’d hate for us not to make an appropriate pitch to them. Company ZZZ: I’m not sure what to tell you on that. or would we need to involve the Malaysia group? Company ZZZ: Certainly. and the mayor was reelected. This strategy worked. 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. We recognize that your new corporate owner is a large company located in Malaysia. By the way. 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. The buyer is a “disadvantaged business” we have been working with for some time. I am certain that you would like that kind of “good” publicity coming quickly after the recent bad publicity. Making Progress 161 . Mayor: Please let me know as soon as you can. so we need to understand how we can affect their decision on keeping an office here. the 150 management/sales jobs did end up moving to Mexico. Unfortunately. Mayor: Great! Let me know when we can talk again. The mayor was able to broker a deal for the “disadvantaged business” to buy the plant and convert it to a different widget maker. and I want them to know that. It’s possible that some of the 300 laid-off employees will find work at this new endeavor. You’ve been very understanding about this.Mayor: I wanted to meet with you so we can take the necessary steps to keep the 150 jobs here. the city has a potential buyer for your plant building. We just haven’t heard anything yet. Would you be in a position to talk to me about such a deal.
and Jones. had $40. Susan repeated her demand. Alexis then played the tape for her father. the accused. The effect on the other party might be even more substantial if lies. Alexis agreed. Conclusion For the first time in her life. Example 1 Susan. Jones’s supervisor. She agreed that her proposal was not fair and that she had tried to take advantage of her younger sister. age 15. Alexis. 162 50 Practical Negotiation Tactics . Susan understood the impact a tape recording can have when it reveals a lie. She borrowed a tape recorder so she could ask her father if this was a fair deal. age 14. Example 2 Three men were meeting to discuss a charge of sexual harassment that had been made against Stuart Jones. Then he played the tape. thus becoming a source of embarrassment. this time in front of a hidden recorder. were on vacation with their parents in Myrtle Beach. who was disappointed to hear that she might propose such a deal. Susan denied it. are talking about a possible settlement of the issue. until Susan said they would evenly split what they bought. South Carolina. The two sisters had saved up a little money so that they could buy souvenirs. Michael Wood. Somehow. They might worry that the tapes will be made public or given to others. or simply “bad faith” methods have been used by the other party.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. or used to pressure the other side to agree to certain demands. Alexis knew this was not fair. Susan wanted to negotiate with Alexis to “pool” their money so they could buy something together.00.00 to spend. the investigator. but Susan had only $20. the younger sister. and Alexis. He asked his elder daughter about the arrangement. Fred Adams. threats.
“Do what I want. you are aware that the next step in this process is to ask witnesses to come forth. I’ve brought a tape recorder with me. exactly what you said to Ms. he also lost his negotiating position. And please describe your general manner. Your request. You never touched any part of her body? Not even accidentally? No. So. to quote you. I think I can write my recommendation. (a long pause) I want to see my lawyer.Adams: Jones: Wood: Jones: Wood: Jones: Wood: Jones: Wood: Jones: Adams: Jones: Adams: Jones: Adams: Tell me again. Starr. Mr. and gestures did not have a single hint of sexual implication or innuendo? None at all. Jones. He failed to think about what might be the next step. Stuart. Mr. Appleton both claim they saw the incident and will testify. No one could have possibly misunderstood your intentions? No reasonable person. But by refusing to repeat his answers. And you did not threaten her job if she did not. Conclusion Jones had knowingly lied when he denied the charges.” meaning something other than copies? No. So you refuse to repeat the answers you just gave us? Yes. When Adams set the tape recorder on the table and revealed that he had witnesses. stares. I simply asked her to make copies for me as quickly as possible. Jones suddenly realized that his strategy would not work. Well. and now I’ll ask you to repeat your answers—on tape. Ruiz and Ms. Making Progress 163 .
What is it? Maria: Father: 164 50 Practical Negotiation Tactics . 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. of course. Maria: Roberto: Maria: Father: Father: We can’t share it! It’s in one piece! I’ll eat half and give you the rest.… No way! Haven’t you two heard of ‘split and choose’? It’s a fair way to divide things. so I’ve got to cut it into two equal pieces or else he will choose the bigger one? Exactly. is usually careful about dividing the object into two equal parts. take this knife and slice the Snickers into two halves. because you did the cutting. Maria and Roberto: No. Maria. with the remaining part going to the person who did the dividing. the classic “split and choose” tactic might be the best way to settle the issue. Oh.” the divider. Their dad instructed them to share the candy bar. The second person then chooses which of the two parts they will receive. one person is given the task of dividing the object(s) into two parts. which certainly is large enough (he naively thought) for two young children to easily share. Realizing the potential of getting the “smaller half.Tactic 42: Split and Choose When two parties both desire something that can be shared or divided between them. Many of us learned this one from our parents: After two people agree to the strategy. Roberto will get to choose which half he wants.
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. That makes them more desirable. Clarence: Right. but the appraiser pointed out that the seven one-acre lakefront lots are considerably more valuable than the other seven lots. They have a recent appraisal that values the property at $150. that sounds fair. Clarence and Archie. There is only one place for an access road that must serve all lots. quickly recognize the fairness of the divideand-choose method. Clarence agrees to divide it.000. Then I will choose which parcel I want. Give me the map and a pencil. but is not sure how to arrive at a fair split.Conclusion When two people desire the same object and it is something that can be divided in some way. Archie: I really don’t care either. and wants to divide it into two separate parcels. They all have a great view and are equally desirable to build on. even children. Making Progress 165 . Archie is ready to build a retirement home on the property. I don’t really care which lakefront lots I keep. Example 2 Two friends and business partners. Lots must be at least one acre to be developed. both parties. Deal? Clarence: Sure. The problem is that one of us will get four lakefront lots and the other will only get three lots. Archie: That’s true. Archie: Here is the map. so we should be able to divide the property fairly. according to county deed restrictions. jointly purchased fourteen acres of lakefront property several years ago. Clarence: But some of the lots away from the lake have been partially cleared and are flatter than others. The remaining lots should be distributed between the two parcels to make each parcel as equal in value as possible.
Archie chose the parcel with the three lakefront lots. and the second parcel with four lakefront lots and one other lot. 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.
Jason was having a hard time getting the salesman to lower the price.” Under store policy. and the delivery carrier doesn’t set up mirrors. miles from their home. Conclusion The amount the couple spent was fairly large. With a great deal of effort. he also set up all of the furniture in a second-floor bedroom.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. Her husband Jason. supposedly the bargainer in the household. is expected to dicker over the price. because a “nickel” item has been added to negotiations about a much more significant item costing “dollars. His tactic was to throw in a “nickel” in order to make lots of “dollars. we’ll take the suite if you’ll throw in free delivery and set up the furniture.” thus extending the scope of the negotiations. Brenda did her part when she said. so the salesperson delivered the suite himself. attach legs. They recently purchased a new bedroom suite after they carefully priced comparable furniture all over town. delivery was limited to a small geographical area. However. Example 1 Brenda Davis is always thinking about the repairs that might be required on an item. 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 . What started out as a single issue is now a combination of a major issue and a much smaller issue. “Okay. etc. The suite they liked best was already at the lowest price in town (the retailer was having a real sale).” Many people have witnessed or used this effective negotiating tactic.
” Conclusion The nickel and diming tactic is a classic negotiation tactic used successfully in a variety of situations. 168 50 Practical Negotiation Tactics . one member of the management team commented on the move: “This guy has nickeled and dimed us a total of thirteen times—and for a lot of money! Next time we can’t give in on those small add-ons. we’ll agree to Health Plan A with another ½ cent on the pension fund. “Okay. If one party misjudges the situation. the two sides had been engaged in considerable bargaining over an improved medical insurance plan (“Health Plan A”) costing hundreds of thousands of dollars. In one case. so be prepared to withdraw the nickel and dime item at the hint of trouble.important item.” The company negotiator yielded to this small-potatoes counteroffer in order to win agreement on the health plan. If used correctly—at the very end of a negotiation—the tactic can usually provide a small gain. At the end of negotiations. This experienced bargainer said. it can be a dealbreaker.
Tactic 44: Make Use of a Positive “Halo Effect” It is common in interviews. and performance evaluations for people to come across as likeable. People tend to make an effort to put their best foot forward. This creates what is called a “halo effect. and all the rest is small junk. Kathy: Well you took the bar and four stools as one item! Donna: They are part of one set. Donna: They match. decision-making meetings. but they are two pieces of furniture. Kathy: I’ll take the pool table. thus creating the impression in others that the good qualities they see are present all the time. You can go first. I’ll take the color TV. Kathy: Not if you accept your logic! (Pause) Donna: You’re not being fair… Making Progress 169 . Example 1 Donna: Mom said to take what we want from the old house and toss out the rest. Kathy: Then I’ll take the couch and love seat. Donna: Okay. trustworthy. Kathy: I suggest we take turns choosing which of these things we want. or knowledgeable. Donna: I’ll take the bar with stools. Donna: No way! These are the last two pieces of furniture. Kathy: But they are a matched set.” Having a member of a negotiating team whom the other side thinks can do no wrong might prove to be advantageous.
and ask him if the couch and chair should be one item or two. Johnny had the “halo” of an honest person. He’s our cousin. I trust his judgment. Let’s call Johnny Ryan. and if the bar and stools should be one item or two. I want the stools. I want the love seat. and he has always struck me as an honest person. The union negotiators. Good idea. with a record of labor involvement that included three recent strikes. 170 50 Practical Negotiation Tactics . but Kathy and Donna assumed that one positive quality (honesty) would carry over to other areas. He might or might not have also been a good arbitrator. what can we do? Give me the couch and love seat! No. (Pause) We’ve got to settle this today and get this stuff moved. Example 2 During a heated labor negotiation. Conclusion Kathy and Donna needed an arbitrator to settle their disagreement. What for? Tell him the situation. 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.Kathy: Donna: Kathy: Donna: Kathy: Kathy: Donna: Kathy: Donna: Kathy: You’re not! (Pause) Well.
even if the proposal appeared to be valid. when negotiations again stalled on a retirement plan issue. the consultant did not speak. They might have stretched his halo farther than his expertise and experience warranted. The union accepted the proposal. the city management again hired Boston. thus bringing the negotiations to a conclusion. During the break. On Monday.simply did not trust the management team. Boston went to the negotiation table with the management team. as a consultant to review their proposal. He solemnly told the union negotiators that he had been hired to review it. The teams took a weekend break from the stalled negotiations. Conclusion The union leaders gave Boston a great deal of respect (even in areas such as budgeting and actuarial tables) because of his former position. the former union president. He said he believed that it would work as presented by management. but his mere presence caused the union leaders to accept a management point as valid. Boston was widely known as a totally honest man who speaks his mind. without any reservations. Making Progress 171 . This time. but the power of the so-called halo effect was great. the management team hired Sam Boston. Two weeks later. and that he did.
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 under the listing price! We realize that.500. Sam Jones. This offer is for more money than any four-bedroom houses on this neighborhood list. They believe it is overpriced. $237. Being able to present them at the most appropriate and critical times has made the difference in countless negotiation situations. The owner. but the key is to gather facts that you might need—not just the facts that you will need. Sam Jones: Sam Jones: 172 50 Practical Negotiation Tactics .000. Here’s a list of the five that are about the same size as yours.000. (Next day) We’ve reviewed the records you’ve produced. and $237. $235.Tactic 45: Use Facts Fact-gathering must be part of the preparations for every negotiations session. 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. the other party will ignore or refuse to believe the information.000. They sold for: $225. but you’ve priced it way too high. I’ll get back to you.000. What? That’s $35. but the right facts presented at the right time can chill or astound and completely turn things around.000.000. $229. has owned the house for 24 years and is downsizing to a condo.000. Sometimes. We love your house. Henry Lopez: Sam Jones: Maria Lopez: Sam Jones: Maria Lopez: We love the house and have made a written offer of $240. and we are countering with an offer of $250.
Order the new computers. Hatfield: My staff has done a lot of research. I’ll be… Okay. Supervisor: If I okay this purchase order. We accept. Hatfield: While I was at purchasing. Conclusion The Joneses had based their asking price on the advice of a friend. He found facts that supported his position. You can’t pay more than $1.400 each. The facts presented by Henry and Maria Lopez caused Jones to re-counter their asking and likely sale price. The last 20 were over $2. let’s not worry about it. Conclusion Hatfield had anticipated what his supervisor’s position would be. Here it is. and wisely chose exactly when to present them in order to make his point. who was not particularly knoledgeable about real estate. No one can go over $1. and did his homework. Making Progress 173 . if other departments have ignored the policy.600 for a computer. I’ll get called on the carpet.Henry Lopez: Sam Jones: Henry Lopez: Sam Jones: Let us discuss this for a minute.600 unless the company president approves. Supervisor: Well. I asked for a list of all new PCs bought this year. That’s the bottom price. Example 2 Supervisor: You know the policy. We’ve talked with purchasing and we have the authority to buy seven for $2. Well… We have a written counter of $245.000. and we know that only this model will meet our needs.000 each.
They can help you identify or better understand what the other side really wants. some people would have forty or fifty books out at the same time. Maureen: Well. I’m sure you would not. Would I do that? Jenny: Maureen. I want two of these. you know me. But I can’t break the limit rule—it is an absolute rule here. Maureen: Well. can you check out two on a card for him? Jenny: Well. Maureen: The policy limits a person to only take out three books at the same time? Jenny: Yes.Tactic 46: Ask Probing Questions Ask probing questions and follow-up questions. but you don’t want to jeopardize your job? Jenny: Yes. Maureen: So you trust me with the books. The effective use of probing questions can help achieve a favorable settlement. yes. Maureen. I trust you. A maximum of three books can be checked out to a person at any one time. but I don’t set the policy and I can’t make exceptions. Otherwise. and two are for my husband. and help you point out inconsistencies in a position that might “lead” the other side to change theirs. reveal misperceptions or lack of knowledge about positions that can be corrected. Example 1 Maureen: What. I can do that within the rules. If you trust me. 174 50 Practical Negotiation Tactics . and they would all be unavailable to others. I can’t check out these four books? Jenny (Librarian): That’s the policy.
Brooks. But this forces us to make decisions without complete information! Yes. Sue. are you sure I can’t get your information technology people to give us direct information on product sales? No. (Next day) Do you have the policy about giving out product sales information? No. Example 2 Jack: Mark: Jack: Mark: Jack: Mark: Jack: Mark: Jack: Mark: Jack: Mark: Jack: Mark: Jack: Mark: Jack: Mark. Security? Right. I couldn’t find anyone who knew it. Mary and Kenzie? They are 2-3 pay grades below us. Who does have access clearance? Mike. What’s the policy number or date of approval? I don’t know. we can’t do that. it could kill us. Jay.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. but it’s because you don’t have access clearance. Mary. They say it’s a security issue. and Kenzie. Why? Some policy? Yes. Can you get me the number? Sure. and they don’t even have a use for the sales data. If that data ended up in the wrong hands. Making Progress 175 . Babu.
that’s been the policy since I’ve been here. I’ll sign now.… (Next day) Mark: The vice president said you can have access if you sign a security card like everyone else who has access clearance. When can I get the data? Mark: Today. Jack: Can you ask your V. Jack: Here.” He intended to do this until he hit a dead-end or was able to find a solution to his problem. I’ll get it for you ASAP. if we can have access? Mark: I guess so. His probing questions turned up a critical fact.Mark: Well.P. Conclusion Jack continued to probe by asking why and who in order to find out more about “the policy. Jack was able to receive clearance as well. 176 50 Practical Negotiation Tactics . Once he discovered that employees in lower pay grades had access clearance.
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. They bring it out when a dispute arises. which is used only when a negotiator is prepared to end negotiations without an agreement and you want the other party to make a final concession to reach a settlement. Tactic #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. 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. 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). days. and the child learns an important lesson about life. T Reaching Agreement 177 . In this process. When multiple issues are at stake and most have been agreed upon during negotiations. this tactic can produce an agreement. Tactic #49 (Final-Offer Arbitration) should bring about a settlement.Stage 7: Reaching Agreement he final stage! It might come minutes. When two parties believe they have an oral agreement. 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. and the classic Walk Away (Tactic #48). hours. If friends or neighbors need to settle something but prefer to avoid the negotiation process. this process can easily result in a final settlement. If both parties desire a settlement but cannot seem to reach it through the usual give-and-take process.
” Conclusion The husband was so excited about visiting Washington. Example 2 Negotiations can take a long time and incorporate many issues. Larry Snyder gets bored staying in any one place for many days.…” Larry was very pleased that his wife was agreeing to the idea he had been trying to sell. 2) allows the other side to feel the release that comes with completing the bargain. 3) and adds one last key demand to the congratulation sentence.C. she continued to speak: “…as long as you agree to drive us to visit my mother on her birthday. His wife had carefully planned her exact “premature” vacation agreement. Weeks of stressful meetings cause both sides at the bargaining table to look forward to its conclusion. She said.Tactic 47: The Premature Congratulation This tactic draws its strength from timing. Near the end of a particularly anxious bargaining session when there was little time left to negotiate. After days and weeks of on-again. Nancy brought up the subject of vacation again after dinner. D. The bargainer skillfully 1) begins the congratulation sentence “I agree…”. Let’s do go to Virginia Beach and Washington D.C. As he hugged her. one exhausted negotiator saw that his team was equally weary and 178 50 Practical Negotiation Tactics . 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. 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. off-again discussions. “I’m thinking of agreeing to your plans for vacation. They both have stressful jobs and look forward to their annual vacation together.
but we agree to everything in your final proposal…” Members of my team shouted hooray. (This is a bad position to be in. fit. My team had convinced me that doubling the time frame would create a real problem on the shop floor.” Bob: Ted timed this perfectly. The old agreement specified a 30-day period. Most people didn’t notice that the negotiators had not finished their hand shake… Ted: Then Ted continued his sentence with. We all knew that it could come down to agreement or strike. One of the best pieces of negotiation advice is to remain fresh. because it makes you pretty vulnerable. In our last offer. “…as long as you give us a 45-day probation period. but held firm on remaining operating principles. My team was afraid we would not even come to an agreement. The celebration had begun. but also that they sensed the weariness of my team. One operating issue involved the probation period for new employees. as the negotiator came closer.almost willing to accept any deal. It was so close. Ted said. we held firm on this and did not discuss the probation issue and many other “dead” issues for days. Therefore. he turned on a large warm smile and extended his hand to shake. but acceptable. “It was hard for us. and rested. When the chief negotiator emerged with his team and headed toward my team. However. but the other side continued to ask for 60 days. we made some small concessions on financial matters. There were grins and handshakes coming from the other side. Reaching Agreement 179 .) Here’s what happened: Bob: I knew that the other side was similarly harried. It took only a few minutes of caucusing for my team to convince me that a 45-day probation was costly. symbolizing that he was agreeing to the entire final offer. and this skillful negotiator let them feel the happiness and security one feels when the fear vanishes. I felt the tension in the room.
The negotiator makes a big show of agreeing and allows the other side to bask in the glory of a deal completed.Conclusion This “premature congratulation” tactic can only be used successfully at the very end of an unsure and shaky negotiation. the negotiator skillfully finishes his words of congratulations by inserting one last key demand. However. 180 50 Practical Negotiation Tactics . knowing that it will probably be agreed to in order to continue in the euphoria of the moment.
You bought your wife a new van just last year. and the lease on my Avalon is about to expire. I’ve worked with you before. a veteran salesperson. Whether you are really bluffing or you are serious. The next morning. Sue: Let me get you the keys so you can take this one home overnight to see how you like it. Example 1 Jay Vahaly has purchased three new Toyotas from Pembroke Toyota over the past twelve years. and he can simply buy it when the lease expires. Sue: I remember you. He really likes it. Jay. be sure you think this through beforehand. right? Jay: Yes. too. (Vahaly drives the new Highlander home. Your opponent will have to either let you go and run the risk that things are really over. I like it. here are your keys. My name is Jay Vahaly. or go after you and perhaps make a new concession in order to get you back to the table. but his Avalon has been a good car. how did you like it? Jay: Okay. all from Sue Wilson. the following exchange occurs. Jay. I don’t want to negotiate. what can you do on a 36-month lease? Reaching Agreement 181 . Jay: Hi. You had time to assess my car. if I roll over the lease to a Highlander.) Jay: Sue. but my Avalon is a good car. Sue: Well.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. but I thought I might want to try a new Highlander. He stopped by Pembroke one day to look at the new models.
Jay. Let me try again. but 182 50 Practical Negotiation Tactics . (15 minutes later) Sue: Well. Please go back and work out a lower lease payment. (Jay got in his car and drove home. Sue: Sorry. Jay: What? I was thinking the lease payment would be. He effectively used the walk-away tactic to let Sue know that he was firm on the price. Jay. Sue: I’ll try. (He walks away) Sue: No. Example 2 Larry and Judy Bizannes own the Bizannes Music Mart. That was the figure he was looking for. Sue called him as soon as he walked in the door and offered another $50 break on the lease. a successful musical instrument sales and rental store. They’ve talked about retiring in recent months. Jay accepted. I’m disappointed.) Conclusion Jay knew his BATNA (best alternative to a negotiated agreement): to go somewhere else if the deal isn’t good enough. they came down to $199 more on a thirty-six month lease. I thought I’d get a fair deal.Sue: Give me a few minutes and I’ll find out … (20 minutes later) Sue: Well. Jay: I guess I’ll go to Dixie Toyota and see what they will do for me. These Highlanders are hot items! Jay: Well. $100 more. at most. He was prepared to keep his Avalon if the lease was even $1 more than his limit. you can turn in the Avalon and get the Highlander for only $249 dollars more per month. Jay—wait.
and I’m prepared to offer you $4. come out here! (Judy comes out from the back room. I still want to develop this block. with a certified check. Larry. Larry: Judy. You rejected it. today. and he is offering us $4. Michael: Well.5 million. and I only need your building to own it. Reaching Agreement 183 . In reality. One day. Michael: Good morning. they were prepared to accept $5. a local developer.) Larry: Michael is here again. Larry: Yes.5 million for the building. which the Bizannes accept. go back to your office. Larry. Michael calls on them again with a check for $5. but their continued walkout convinced Michael that they would hold firm. He met with Bizannes twice before.5 million. and we gave you our price. Judy: Larry. (Judy and Larry walk into the back room and close the door.both of them love their store.0 million. visited their store. What do you think? Judy: Larry. Two months later. and I’m not interested in less. Michael Roberts. you’ve already told us that. so why are you here? Michael: I’ve discussed it with my partners.) Conclusion Larry and Judy used the walk-away tactic and stayed away for two months in order to convince Michael that they were firm on their price. Larry: Michael. Michael: I have a check right here for 4.5 million. let’s eat lunch. our accountant said it’s worth $6 million. How’s business? Larry: Great! I’m surprised to see you again. after no contact from Larry or Judy.
the mediator works with both sides to resolve certain issues but has no authority to make binding decisions. Example 1 Jenny and Lynne are sisters. Keep the $1. 184 50 Practical Negotiation Tactics . But he isn’t allowed to try to find a “middle ground”—just to choose one position or the other. but they wanted to give Jenny $500 for her “share” of the machine. One day Lynne dropped by for a visit and the discussion turned to the old Singer. In mediation. Lynne responded that this was their intention. Lynne told Jenny that she and her husband Gary have restored two other Singers. I won’t take it. the arbitrator is given the authority to make the parties comply with the ﬁnal and binding decision. which she has kept in a barn for over ten years. and would be able to restore hers as well. Six months later.000. The following discussion occurs: Jenny: The old machine wasn’t worth $50 when you took it. Lynne: No. Let’s split the money. Jenny has an antique Singer sewing machine. We have a few dollars invested in parts and we had fun working on it. Lynne: No! I suggest that we each write down our position and let Dad choose one of the two as the final decision. In ﬁnal offer arbitration. Both involve the use of third parties who are objective. 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). which is generally voluntary. In most arbitrations. Jenny: No. Each party wants their offer chosen. Jenny told them to sell it. They inform her that they put the machine on e-Bay and have an offer of $1. I offered it to you for nothing. Lynne and Gary bring the restored Singer to Jenny’s house. so they generally give up some ground and try to make the offer appear as fair and reasonable as possible.Tactic 49: Final-Offer Arbitration Mediation and arbitration are two well-known ways of resolving sticky disputes. That was the deal. both sides have agreed in writing to accept the arbitrator’s decision. Jenny told Lynne she could take the old Singer that she has no interest in (and doubts that it is worth restoring).000. In arbitration.
Then we both submit our final offers to Judge Ryan within 48 hours. Their father found Jenny’s position to be the most reasonable. and meet back here in 72 hours—3:00 p. since he could only choose one offer. My troops are getting restless. I have chosen management’s offer to keep it as it is under the current contract. on Friday. based Reaching Agreement 185 . Tina: Good. They should get the other $950. I can’t see any way to reach an agreement. The union’s position could have run into millions of dollars. first on the health insurance co-pay. Tina.m. the old machine was only worth $50 when Lynne hauled it away.) Judge Ryan: Here is my written. we are down to only three unresolved items. so I am invoking the finaloffer arbitration ground rule we have in place. binding decision on the three items. As a brief explanation. but we’ve made no movement on any of them since we started. Ralph: I know. Any increase in value was due to the work of Gary and Lynne. At best. I’ll buy that. he did not need to “haggle” with them.” Lynne proposed a 50-50 split.m.Jenny: Dad: Okay. (One week later) I think Jenny’s position is the most reasonable. Ralph: Right! (Friday at 3:00 p. Conclusion Jenny’s final position was that she receive $50—the maximum possible value of an old “junker. Tina: Yes. after six weeks of negotiating. Example 2 Ralph: Well.
but we agreed to this process. 186 50 Practical Negotiation Tactics . 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. Second. Finally.Ralph: Tina: on last year’s data. and stress. I’m not happy with your decisions. on the merit pool distribution method issue. Now let’s get a signed contract. Ralph. reasonable resolution to their last three unresolved issues. Well. money. No increase has been given for six years.000—less than 1 percent of the total package. Conclusion The final-offer arbitration process enabled the parties to gain a fast. nor why their method was superior. It will only cost $120. on the clothing allowance. I have chosen the union’s final offer. and peacefully finalize a contract that contained several important gains for both sides. I’m sure you realize that we could have taken six more weeks to reach the same point. At least we both saved time.
During a discussion. Bill and Paulette fell in love with the house. they looked at this particular house on their own.000.000. and decided to stop by to see if they liked the house. 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.Tactic 50: Commit the Offer to Paper You can often control the progress and direction of a negotiation by writing down the agreements or understandings as they are being reached. Bill: Reaching Agreement 187 . seeing the agreement in writing will force both sides to acknowledge what has been said and agreed to in the negotiations. If we shake hands on it right now. The goal of recording the precise details is to either avoid any misunderstandings or address them before the talks conclude. and while Bill and Paulette had been using an agent to help locate houses. Example 1 Bill and Paulette had been house-hunting for some time. They finally looked at a house they really liked. however. everyone is busy grappling with the details of the negotiations. we won’t be involving our real estate agent. Obviously. They saw the “For Sale” and “Open House” signs. Seller: Yes. Seller: We’re asking $152. 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. At the very least. We’d like to make you an offer of $150. Bill pulled the seller aside. The owners were selling the house without a real estate agent. and felt that they would have to work fast to make an offer before someone else did. They were not the only couple to come to the open house. and one of the other couples looked very interested. all the usual stuff in a sale. not the furniture.
that’s what I meant.000. The supervisor assured the employer that there was no basis for her complaint. the hutch. and the two area rugs. but I’d like to make sure there are no misunderstandings. When he had the chance to put the deal in writing. the house is yours. Conclusion The seller had always intended to leave the garbage disposal. real. and that the problems with her job performance were. since he probably would have missed them) Yes. the hutch. he left the price at $150. It worked. In her complaint. and that no one would ever say that he was guilty of any type of sexual harassment or sexual discrimination. he listed an attached hutch in the kitchen. a public agency. all window blinds and drapes. in fact.Seller: Just a minute. the refrigerator. and two area rugs. In the section for fixtures and miscellaneous items to be left on the property.000. then we have a deal.) Seller: So. The supervisor pointed out that he had a staff of 20 or so women. he began to have “problems” with her job performance.000 and added the additional items to “sweeten the pot” and give Bill and Paulette a deal they couldn’t refuse. The employer’s affirmative action officer looked into the charges and determined that 188 50 Practical Negotiation Tactics . Let me just get the standard “offer of sale” form and fill out what I hear you saying. (The seller recorded the offer of $150. Under the section for appliances to be left on the property. and when she refused. he listed the stove. I think we can work something out. Seller: Okay. and the two area rugs were specifically included. Example 2 Monica brought a sex discrimination charge against her employer. and the garbage disposal. and had been prepared to drop his price to $145. she said that her supervisor had repeatedly asked her out. If it’s what you meant. look this over. Sign here. Bill: (pleasantly surprised to learn that the garbage disposal.
my client is supposed to formally withdraw the complaint rather than just settle it. found a new job and wanted compensation for “embarrassment” and lost wages in the amount of $100.000 without actually having to prove anything.000. Why’s that? Well. even though you are paying Monica because we can prove he did do something wrong. The supervisor insisted that if the employer felt he had to settle. but it’s not standard when a complaint is formally withdrawn.000. He offered to send settlement agreement papers to her. but said that fighting the charges would be a long. You’re just trying to make it seem as if your supervisor did nothing wrong. and must agree not to tell anyone about the $100. then Monica had to acknowledge that the supervisor did nothing wrong. Withdrawing. Monica had. The employer’s lawyer told Monica’s lawyer that the employer was ready to settle the deal for the $100. by this time. I’m He: She: He: Reaching Agreement 189 . But the employer doesn’t want to go through the expense and publicity of a trial. Look. drawn-out. 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. settling—What difference does it make to her? She’s getting her $100. And the confidentiality clause is standard.000. the supervisor says he did nothing wrong and that Monica just misinterpreted what he said. even though we’re certain we would prevail. Monica’s lawyer (She): Employer’s lawyer (He): She: I was surprised by your settlement documents.000. He’s happy to prove that in court. you didn’t mention in the agreement that in exchange for the $100. It might be standard when there’s a settlement. and expensive matter.there was little basis for the complaint.
It was made clear that the employer had paid the additional $100. but word did get out that a public agency paid $200. Conclusion The decision by the employer’s lawyer to send a written agreement that did not reflect the actual agreement of the parties caused the negotiations to resume.000 when all that was asked for was $100. I’ll take your offer back to her and let you know. Monica accepted the $200.000. but that’s under the same conditions—the claim must be formally withdrawn and Monica can never reveal the amount of the settlement.000.She: authorized to pay $200.000 and the conditions of the offer. There was a confidentiality agreement. 190 50 Practical Negotiation Tactics .000 just to get the employee to “withdraw” the complaint. It would have been a better strategy in this situation to raise the issue of withdrawing the complaint during the actual negotiations. to his disadvantage.
commitment. I thought you said something else. Think of how often you have said to someone. 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. it would have been easier to resume negotiations at a later date. and when they agree to solve problems together. Putting an agreement into writing serves three purposes: communication. even an informal agreement benefits from some type of written documentation. Unfortunately. talking is not always the same thing as communicating. then the parties have to abide by the agreement.SECTION IV: PUTTING THE AGREEMENT IN WRITING s you can see. operating under an agreement after it has been reached can be even more difficult. Reaching an agreement is the first step. A union contract. however. “That may be what I said. it is much more effective in the long run when the parties enter into “win-win” agreements. Certainly someone has said to you. depend on the kind of negotiations in which you are involved. most certainly needs to be in written form.” Clear communication is essential if you want to reach an agreement and have it abided by. A Communication Hearing is not necessarily the same as listening. of course. a written document is hardly necessary. and contract. “Oh. In Tactic #17 (Package Items). when they engage in honest “give and take” negotiations. As these examples of personal and business negotiations show. The degree of detail and formality of a written document will. but it was not what I meant. If the agreement reached at the time had been put into writing with all three sisters signing it.” By the same token. reaching an agreement is sometimes a long and difficult process. However. When two friends agree on what movie to see. Putting the Agreement in Writing 191 . One way to help the parties abide by an agreement is to put it into written form.
the message being conveyed and received might be understood differently. Commitment Reducing an agreement to writing often forces both sides to truly commit to the agreement. seek information. that is. nine hundred and forty-four dollars—$22. sounds. you have created something tangible that can be referred to in the future when memories become fuzzy. the price is spelled out in the loan document as “twenty-two thousand. pictures. Who isn’t excited about buying a brand new SUV or truck? Until. 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. he can be reminded of the details because it’s all there in black and white. Oftentimes just seeing the agreement in black and white conveys its import as well as or better than hearing about it. When communication is limited to the spoken word only. And because the sender and the receiver are two unique individuals. Negotiations are often necessary because there was a “misunderstanding” that could have been avoided if the parties had put their agreement in writing. If Jason fails to live up to his side of the deal. The receiver has to decode the message being sent by trying to understand and interpret the words. When you create a written record of the details of an agreement. or express a thought or emotion through words.” In Tactic #14 (Don’t Always Hide Your Weaknesses). Jason agreed to change his study habits if he couldn’t pull his grades up by the end of the semester. pictures.Communication is a process that involves a sender and a receiver. the opportunity for the sender and the receiver to misinterpret is greater than if the communication is first spoken and then written. His mom could more easily enforce the agreement if she had it in writing. a couple of months away. sounds. The sender wishes to convey an idea. 192 50 Practical Negotiation Tactics . In Tactic #4 (Use Objective Criteria). or movements being used by the sender. or movements.944. 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 address and description of the real property. have your spouse also agree to the details of the agreement. in writing. as many people learn when they purchase a home. If you have agreed to pay someone to house-sit while your family is on vacation. pulling an agreement in writing. and dated agreement. details such as what fixtures stay or what appliances go can be easily overlooked. say. Both parties must receive a benefit or something they personally consider of value. which. 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. protect yourself by having a written. You can do this more formally by taking them to court (perhaps as a last resort). and how much. When you are ready to commit yourself in writing. Putting the Agreement in Writing 193 . or it isn’t an agreement—it’s merely the conveying of a gift. WHAT? The written document should clearly describe the item(s) covered by the agreement. and put that information into the document. One party wishes to buy what the other wishes to sell. leading to misunderstandings and contract disputes. WHY? The “why” of an agreement is generally the explanation of the mutual obligations or advantages the agreement represents—the reason why the parties began negotiating in the first place. However. ask yourself the basic questions of who. signed. what. before the trip. which kind of. why.Contract Finally. one party will change behavior in exchange for something of value from the party who wants the behavior changed. dating it. Carefully and completely describe the subject matter of the agreement. In either case. and so on in standard contract form. and getting all the parties to sign it usually creates an enforceable contract. how many. Failure to do so can lead to big problems. Your spouse will share some responsibility for failing to make that duty clear in the agreement if. one party will work if the other party pays for the work. WHO? Provide of the full names the parties necessary to the agreement. the real estate contract includes information about the buyer and seller. Generally. when. your plants die because the house-sitter wasn’t told to water them. where. Here’s what we mean.
agreed to the same thing.The remaining questions fill in the details of the agreement. if that becomes necessary). depending upon the deal: when or where. And it can create a tangible reminder of the deal (or an enforceable agreement. the better. Putting an agreement in writing. how much or how many. The more-specific and clear these details are. which one or which kind of. in fact. It gives the parties an opportunity to really buy into the deal. and having all parties sign it ensures that the parties have. dating it. 194 50 Practical Negotiation Tactics .
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 .
and how they can be used: 196 50 Practical Negotiation Tactics .Business Negotiations Negotiation situation: Parties involved: Issue: Tactics that might be helpful.
________________ 6. ________________ 3. ________________ 10. ________________ 4. ________________ 5.Name of Negotiation Tactic 1. ________________ 7. ________________ 9. ________________ 8. ________________ Tactic# How will I use this tactic? (Application) _________________ _________________ _________________ _________________ _________________ _________________ _________________ _________________ _________________ _________________ ______ ______ ______ ______ ______ ______ ______ ______ ______ ______ Notes Putting the Agreement in Writing 197 . ________________ 2.
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McKay.E. Los Altos. C. W. Prospect Heights. Inc. Ury. E. New York: Basil Blackwell. Victor. K. Mediation. 1988. 1989.: New Harbinger Publications. R. W.: Waveland Press. M. 1991. Pocket Negotiator. New York: Penguin Books. You Can Negotiate Anything. University of Missouri: Columbia Press. New Jersey: Prentice-Hall. Chicago: Richard D. D. Irwin. Upper Saddle River. Inc.. Kennedy. Cleary. Fisher. Lewicki. 2001. New York: M. Inc. Upper Saddle River. New Jersey: Prentice-Hall. Maddux. 1987. Patrick J. Practice. Inc. J. New York: Penguin Books. and B. Herb. Brown. R. Labor Relations and Collective Bargaining: Cases. 1999. 2004. Domenici. Cohen. The Negotiator’s Handbook. Fuller. 2001. Oakland. 7th ed. M. 1996. Heavrin. George. Negotiating in the Real World. 1997.. Gotbaum. 1980. Getting Together: Building Relationships As We Negotiate. Getting to Yes: Negotiating Agreement Without Giving In. M. 2nd ed. David. and J.REFERENCES Carrell. Calif. The Negotiation Handbook. The Essentials of Negotiation. and J. 1988. Ill. and S. New York: Simon and Schuster. Negotiation Skills. Eshelman. Minton. Clark. Inc. Fisher. Successful Negotiation: Effective “Win-Win” Strategies and Tactics. Roger. Fiske. Gavin. Inc. Inc. and Law. Roger. LittleJohn. Calif. The Relaxation and Stress Reduction Workbook.: Crisp Publications. Saunders. and M. R. and S. Sharpe. Patton. 2nd ed. 1991. and C. References 199 . New York: Bantam Books.
negotiationsources. The Mind and Heart of a Negotiator. Inc. New York: Bantam Books. L. 1991. Howard. Inc. George. Gerald I. 2001. www. Getting Past No: Negotiating with Difficult People. Raiffa. New Jersey: PrenticeHall. Upper Saddle River.Nierenberg. 1998. Massachusetts: D. William. Cambridge. Cambridge. Taking Charge/Managing Conflict. Inc.org 200 50 Practical Negotiation Tactics . B. Lectures on Negotiation Analysis. Inc. Raiffa. 1994. C. Tsogas. New York: Simon and Schuster. The Eight Essential Steps to Conflict Resolution. Lexington. The Art of Negotiating. New York: M. 1982. G. Labor Relations in a Global Economy. 1981. 1987. Weeks. 1996. Bargaining for Advantage. Massachusetts: PON Books.E. R. Thompson. 1999. Heath and Company. New York: Penguin Putnam. Dudley. Ury. Massachusetts: Harvard University Press. Howard. Shell. Stulberg. The Art and Science of Negotiation. New York: Viking Press. J. Sharpe.
Carrell has held academic positions at California State University. and Public Personnel Management. HR Magazine. Personnel Journal. In addition to negotiating numerous litigation settlements and contracts. The Academy of Management Review. Carrell is Dean of the College of Business at Northern Kentucky University. M Christina Heavrin J.A.ABOUT THE AUTHORS ichael R. Bakersfield. The Journal of Accountancy Training. Books published by Dr. In addition. 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 . Most of his professional career has been spent in the Louisville area and has included positions as a personnel director and labor negotiator. organizational behavior. and negotiations. Human Resource Management. and MBA and B. Carrell are in the fields of collective bargaining and labor relations. Business Forum. Morehead State University. The University of Nebraska-Omaha. Personnel. He received his doctorate from the University of Kentucky. He has authored over 50 scholarly works in some of the leading management and human resource journals including The Academy of Management Journal. he was elected to the City of Louisville Board of Aldermen for five terms. has practiced law for 28 years primarily in the public sector as an attorney for local government in her hometown of Louisville Kentucky. which is located in the greater Cincinnati area. During his academic career he has received awards for both outstanding research and teaching. The Personnel Administrator. Labor Law Journal. and served as President of the Board and Mayor Pro-tem for three terms. Dr. Marshall University. in Economics from the University of Louisville. Organizational Behavior and Human Performance. and the University of Louisville. These positions enabled him to build a sizable management consulting practice while teaching at the University of Louisville.D.
Ms. an agreement between the State of Kentucky. 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. the City and a for-profit hospital for guaranteed indigent health care services for city residents. Jefferson County. Heavrin is serving as Special Counsel to the first Mayor of the Metro Government where her duties include negotiating initial labor agreements between the Metro Government and its unionized employees. 202 50 Practical Negotiation Tactics . Recently voters approved the merger of the City of Louisville and Jefferson County Governments.park and a successful industrial park in the City’s enterprise zone.
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