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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
negotiator! Pass this book on to someone else who needs it. with family members. Who. at a flea market. Learning how to use these tactics and knowing when to apply them will make you a more skilled negotiator when you are faced with the opportunity to strike a favorable agreement. Most readers will no doubt recognize some of these strategies. with neighbors. accept what is given. some will in retrospect even remember being the victim of one or two of them. practical tactics useful in real-life situations at work or at home. or engage in an unproductive argument. Unfortunately. they pay the sticker price. but many of us miss the opportunity to bargain in other situations. such as these: • You receive the wrong order at a restaurant. This book is designed to give the reader an understanding of the negotiation process by presenting fifty proven. • A co-worker asks for volunteers for a new project. But if you scored 8 or less. 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. Instead. few people understand that normal interactions represent bargaining opportunities. • A child wants a new toy now. start reading! Most people come face-to-face with a negotiation situation of one type or another on a daily basis: on the job. exactly. 4 50 Practical Negotiation Tactics .
Your boss reviews your past year’s performance. A neighbor wants to remove an old tree on your property line. For example. There must be a conflict in the sense that what one wants is not what the other wants. Interdependency. Your spouse wants to buy new furniture. The parties involved are interested in reaching a common goal. Multiple parties. There are flexible elements to the situation. 2. condition.• • • • • • • A hotel clerk tells you that your reservation was lost. What are my alternatives?” During an employee evaluation. since you lost my reservation. such as price. Decision-making ability. be prepared to bargain. and I don’t have time to wait for another.” When you recognize that something can be negotiated. A service repair person gives you an estimate on some work. In some circumstances. The parties are interdependent: what one party does affects the other. that can be negotiated. Each one has the five key characteristics necessary for bargaining: 1. “Well. Both sides want a settlement. The parties involved can make a decision by themselves. In some situations. perhaps you can say to a hotel clerk. what can you do for me?” Or this to a restaurant manager: “This food order is wrong. perhaps the employee can say. “I’d like Introduction 5 . Therefore. All of these situations are opportunities to negotiate. 3. 4. one party is only allowed to follow policy or must wait “until the manager arrives. Two or more sides are involved. and each side can involve one person or several people (each representing one “side” of the issue). you must advise the other party of your intention to negotiate. time. Flexibility. or items of value. 5. A friend is about to select the movie he/she wants everyone else to see. A teenager wants to buy his/her first car. some resolution must be negotiated. Mutual goals.
You can then use one or more of the tactics presented in this book to achieve the best possible settlement. the other party will realize that you intend to negotiate and do not accept the situation.time to look over this performance review and respond point-by-point. the parties and their interests. Choosing and applying the appropriate tactic to a particular situation will become easier as you begin to use them. You might need to follow with a statement that clarifies your desire for a settlement but indicates that you are flexible and you do intend to negotiate. the facts. How can you compensate us for our loss?” Once you’ve suggested that you see the situation as something to be negotiated. Scenarios based on actual real-life situations are used to show how each tactic can be used in business or everyday situations. “I see why you want to cut down the tree. 6 50 Practical Negotiation Tactics . and meet with you again. negotiations can be concluded with a written or oral agreement. and use the forms in the back to identify the issues. and the tactics that might move the negotiations along.” To a neighbor you can say. Keep this book handy when preparing for any type of negotiation. Once a settlement is reached. but I believe it adds value to our house.
When making a major purchase. When you purchased your last home or car. did you request appropriate compensation? 6.? 10. Yes No Self-Assessment Quiz 1. spouse. As a parent. or child. In the past.How good are your negotiation skills? Place a check in the box that applies to you. but you did not? 8. Do you wish you could negotiate a change in your job duties or salary? 7. Do you routinely negotiate for better accommodations when you check into a hotel? 3. In the past. have you ever felt that you were not adequately prepared to negotiate a job offer? 2. do you routinely negotiate a last add-on before you close the deal? 9. The last time you received sub-par service or food in a restaurant. Do you often refrain from negotiating a better price or service because you believe that you do not have good negotiating skills? Introduction 7 . have you ever required a written agreement covering chores. have you routinely resolved differences with a neighbor or a friend through a negotiated agreement? 5. allowance. etc. 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. or division of household duties.
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the process will be fairly straightforward. if the situation involves a number of detailed or complicated issues or the stakes are relatively high. 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. Examples: • office location (city. • an allocation for moving expenses (employee goal) traded for a set number of travel days per month (employer goal). etc. If it is a relatively informal situation.) • primary sales territory • a starting date Exchange Issues: Those issues that might be traded. including those that are less obvious. The Quick Model The easiest way to prepare for a simple negotiation is to identify all the issues.SECTION II: THE NEGOTIATION PROCESS Before you begin the process of negotiation. state. On the other hand. thus allowing each side to achieve one of their goals. The “Quick Model” approach outlined below is good for simple negotiations. The Negotiation Process 9 . the process will probably take several weeks or months as the parties move through all the stages. Examples: • a signing bonus (employee goal) traded for an annual travel budget (employer goal). decide how complicated the issue is. one for another. They’re referred to as “win-win” because each side can achieve their goal.
stages can be combined. Examples: • an item sold by one party and bought by the other • wage increases won by one side. 10 50 Practical Negotiation Tactics .Distributive (Win-Lose) Issues: Those issues that the parties are directly at odds with. or even skipped altogether. the other side loses. 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. The Comprehensive Model Negotiation is more of an art than a science. rearranged. What one side gains. Depending on the situation and the parties involved.
Information.The Negotiation Process Table 1: The Negotiation Process: Seven Basic Stages Stage 1 Identify situation as one for negotiation Preparation: Key Factors – Time. Power #1– #6 Stage 2 Strategy: Choose Overall Approach to the Process #7– #14 Stage 3 Initial Offer: Getting Started Stage 4 Counter Offer: The "Give & Take" Stage 5 Pressure Bargaining: Striving for Conclusion Stage 6 Key Methods: Achieving Progress Stage 7 Reaching Agreement: Settlement of Impasse Tactics to Consider #15– #21 #22– #31 Negotiation Phase #32– #38 #39– #46 #47– #50 Initiation Phase Resolution Phase 11 .
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SECTION III: 50 TACTICS FOR SUCCESS
Stage 1: Preparing to Negotiate
n many negotiation situations, the parties have time to prepare for the actual bargaining. In other situations, such as when you’ve been served something at a restaurant that you did not order, there is no time to deliberate. You have to be prepared to instantly recognize that the situation can be negotiated, and begin to bargain. You can have time to prepare if you simply ask for it. For example, at the end of an employment interview for a management position, the candidate was surprised to receive a job offer on the spot. The candidate wanted the job, but wisely recognized that she could negotiate the contract. She said that she was very interested, but needed forty-eight hours to make up her mind. She used the time to talk to current employees, and developed a list of perks and conditions that she then negotiated, before accepting the position. To prepare for a negotiation, do as many of the following activities as you can: 1. Have realistic objectives. Identify everything that can be negotiated, and set realistic objectives for each item. If, for example, price is a factor, determine the desired outcome and set a minimum (or maximum) acceptable outcome, beyond which you will walk away and choose another alternative (see Tactic #1: Know Your BATNA). Also determine your opening offer in light of your desired and your minimum outcomes. It is often helpful to list each specific item to be negotiated and your minimum acceptable offer for it, as well as your desired goal and an acceptable opening offer (see Tactic #5: Listing Items). Thus, for each factor, write down and stick to three figures:
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.
notified all the employees of their intentions. 16 50 Practical Negotiation Tactics . Example 2 Shari and Jim Jaggers own a successful West Coast pottery company. inventory. 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. labor contract negotiations between the Jaggers and a local labor union representing the pottery’s craftsmen have stalled. and final offer. For the past two months. The owners. the Jaggers decided to seek buyers for their land. best.Conclusion Harvey’s best alternative—his BATNA—was simply to hold on to the car for the moment. Conclusion Selling their business was the Jaggers’ BATNA. providing them with a very good income for life. The Jaggers gave the union their “last. The union is demanding wage and benefit increases. In this case. and it now employs 230 craftsmen.” which was refused. which the Jaggers believe will cause them to increase prices to the point where they will no longer be competitive with other West Coast firms. as a last resort. When negotiations with the union became hopeless. was a power play. The threatened strike became a reality. as Harvey had for many years. They learned that their assets would be easy to sell and were worth more than originally estimated. but rather what the buyer planned to do with the car. and equipment. The union negotiators convinced the employees that this too. The union negotiators thought the Jaggers were bluffing. selling became an attractive alternative to a strike or prolonged battle. With only two weeks remaining before a threatened strike. his BATNA was not to hold out for more money. 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.
Gosh. it’s to your advantage to know what is behind a seller’s decision to put it on the market. If you are the party making the offer on the house. It is extremely rare—one of only 100 made with that bore and handle. John assured Tom that this would never happen. Are you finally ready to sell it? Yes. A person who has to sell her home because her company is relocating her. what the other party’s desired outcome is. Tom: $20. I’ve been thinking of getting rid of it for a while. it’s still perfect. How much are you thinking it’s worth? John: Well. Just running out of space. for example. at some point. Make me an offer. 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. and told John several times to let him know if he ever wanted to get rid of it. Just as important is the why. What changed your mind about getting rid of it? It is still in perfect condition. right? John: Sure. Preparation 17 . I guess I couldn’t take less than $20. I think so.000? That’s more than I planned.Tactic 2: Know Your Opponent’s Real Objective Each party in a negotiation will know. you know. Example 1 Tom had always admired John’s 1861 Confederate rifle. John: Tom: John: Tom: Tom. I’ll have to think about that. so Tom was surprised when John called him out of the blue one day with a proposal. you still interested in my rifle? Of course. This is a good thing to know. because if the company does not provide relocation benefits.000. 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. she might have to take a lower offer just to be able to move. sure.
Without some trust.500 had an 1861 for sale. the owner of a small manufacturing company. let’s do it.) Tom: John. we really want to buy your company. John: Well. and now the two-year requirement has become a stumbling block in the negotiations. The sale price for the company has not yet been agreed to.500—we’d have a deal. When Tom found out why John decided to sell his rifle. (Tom investigated the “market” for a restored 1861 Confederate rifle by calling a few other collectors. so he is making it a condition of the sale that ALL current employees must be retained for a minimum of two years. parties to a negotiation are not likely to reach agreement. He is two years away from retiring and does not want his business to fail before he does.000. and we’re committed to keeping it open as a major division of our company. Was Tom interested? Tom declined. but then he will be happy to retire. Tom now felt comfortable negotiating the price. we 18 50 Practical Negotiation Tactics . fearing that this will put all of his employees out of work. He doesn’t want BigManu to know this because he thinks it will hurt his negotiating position. Tom: Okay. it made the negotiations easier. has begun negotiations to sell his firm to BigManu Company. I don’t think I can go higher than $18. One of them mentioned that someone who is negotiating with him to buy a restored Winchester rifle for $18. but I could get the money to you right away. I’ve been thinking about your offer. but thought this might explain John’s sudden interest in selling the rifle. Well. if you could come up a little—say $18.Tom: Okay. No longer worried about John’s motives. Rick needs to remain president of the company for the next two years. let me think about it and I’ll get back to you. However. BigManu: Rick. Example 2 Rick. Conclusion Tom entered into the negotiations suspicious of John’s motives.
let’s talk about the job guarantee you wanted. you will have a say in how the employees are treated. Preparation 19 . Working as a division of your company. Rick: I built this business from the ground up. Within the parameters of efficiency and effectiveness.) BigManu: Okay. BigManu: We just don’t see a way to give you what you want on this. The price they gave Rick was actually more than he had expected. and I hired every one of these people. In hopes of pushing the deal forward. I just want them to have a real chance to show you how good they are. they decided to put their price on the table and revisit the issue after a price was agreed upon.cannot guarantee to you that ALL of your employees will be retained for two years. Without this commitment. I just don’t want it to change after I’m gone. they will make you plenty of money and more than make up for any “operational” difficulties it might cause you. BigManu: You know we want you to stay on and manage this division for us. and we think it’s an odd request anyway. Let’s talk later. and he accepted it subject to agreement on the two-year employment guarantee clause. I need to give them some sense of comfort if this deal goes through. We still can’t find a way to do it. What is it you’re afraid is going to happen? Rick: I am convinced that with a two-year time frame. my employees will prove to you that they are uniquely able to run this place. I just can’t go through with this sale. (Between negotiating sessions. BigManu’s negotiating team concluded that they were in the dark as to why this two-year requirement was so important to Rick. Rick: These people are the best at what they do. We just can’t make good operational decisions with our hands tied. You’ll be in place to participate in our employment decisions.
I’m hoping to retire in two years. Rick: Well. to tell you the truth. Rich almost lost the deal.BigManu: We intend for you to stay and become a big part of our company. but we won’t be completely tied to operations as they are now. BigManu: Why don’t we guarantee to you that you will stay for two years? That way. I certainly want to do all I can until then to protect my people. would it? Rick: Well. 20 50 Practical Negotiation Tactics . you’ll have a guaranteed “in” to protect your people. Conclusion By masking his real objective (giving himself two more years as president before retiring). he agreed to allow BigManu to accommodate him without limiting their ability to make business decisions. Surely you’ll be able to “protect” your people if they are as good as you say. Once Rick realized that he no longer risked anything at the negotiating table by making his need known. This wouldn’t have anything to do with your own plans for the future. that might work. Let me get back to you.
the frog is everybody’s favorite. (Think of the showroom tactics used by car dealers. Cybil. such as a hotel conference room.Tactic 3: Control the Setting There is a logical reason why professional negotiators setting ground rules agree to conduct the talks at a neutral site. how can you trade the frog—he’s your best one! Dede: (Bailey’s other sister) Yeah. 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. Bailey: Cybil: Preparation 21 . (thirty minutes later) Bailey: So. they control the breaks and environmental factors. Make up your minds. girls. too. it’s a deal. but never to THEIR advantage! Example 1 (Two ten-year-old girls are talking. I like the frog. 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.) Let’s take all our Beanie Babies to my house to trade! Okay. and so on. they have the information they need at their fingertips.) Prepare for the negotiations by controlling the setting—to your advantage or to mutual advantage. Mother: Hush. and go play somewhere! Cybil: Well … Okay.
Team B had clearly used its home turf to gain a substantial advantage.” The chief negotiator for Team B agreed. Team A was whipped physically and emotionally. The physical and emotional demands of 24-hour. meals. When negotiations resumed in two months over another piece of property. They had all been replaced after their decision to negotiate “around the clock” in Team B’s boardroom became known. knew that her sisters liked the frog best and that they would help convince Cybil of its “value” and help Bailey make the trade. Team B.Conclusion Bailey. not one member of Team A was chosen to return to the table. Team A agreed to change the meeting place. 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. After forty hours of negotiating. The chief negotiator for Team A publicly challenged Team B to “negotiate non-stop. Example 2 Two five-person negotiating teams had been trying to work out a deal for over a month. About thirty-six hours later. Team A agreed to a settlement almost identical to the one rejected days before. in their own familiar setting. 22 50 Practical Negotiation Tactics . The firm deadline was only four days away. around the clock. until we have a settlement. That’s why she wanted to go to her house. Both sides desperately needed to settle a property dispute. as long as they met in the boardroom of Team B. non-stop negotiations wore down the members of Team A. having set up beds. and other conveniences in the adjoining room. while members of Team B were able to stay fresh. They were blamed for accepting the same deal that had been rejected only days earlier. was still going strong.
Larry was thrilled. I would have charged anyone else much more. I was kind of surprised at how high it was. I did get some estimates from plumbers. When we got into it. it became clear that all of those pipes had to be pulled and new ones put in. This uncomfortable negotiation followed: Larry: Will. about your bill. Will: Larry. these plumbers certainly acted like they understood the work when they gave me their estimates! Will: Tell you what.Tactic 4: Use Objective Criteria Use objective criteria to judge the quality of each side’s proposals—you will probably improve your chances of coming away satisfied. Larry had expected to pay him for his time. and show them the actual work that got done. When you first told me about your project. Things turned sour. Believe me. It was twice as high as the estimates Larry received from other plumbers before they started the project. Larry: Well. I anticipated much less work. though. If they tell us that they either Preparation 23 . After all. you are likely to resent them for it and hold out. Example 1 When Larry’s cousin offered to help Larry finish the renovation on his bathroom. Prepare for the negotiations by having an outside authority measure or weigh in on each side’s position.” This can hold up an agreement and cost you in the end. and they were much lower than this. Will is a licensed plumber. but was shocked at the amount of the bill. Larry: But Will. If you think that the other party knows more than you do. when Will presented Larry with his bill. rather than give them the “advantage. Let’s get the guys back in who gave you estimates. I gave you my “family” rate. Larry: Just make sure you’re comparing apples to apples. and he and Larry have always gotten along. based on objective criteria (think property appraisals in real estate).
The college’s budget officer was understandably offended. The estimates would have been higher than what cousin Will charged. I’ll revise my bill to meet the lowest estimate you get. Comparing the estimates to Will’s actual costs would have been counterproductive. Example 2 After Stuart was appointed to the college’s Board of Trustees. I have been very diligent about making sure that the fund makes the most money it can without putting us at risk. Conclusion When the other plumbers looked at the work. while she wasn’t an expert.disagree on the need for that work or that they would have done it for less. my first reaction was that some of the investments 24 50 Practical Negotiation Tactics . she had been investing the college’s endowment funds for many years. Had they actually prepared bids on the work. he used his financial expertise to analyze the investments of the college’s endowment fund. I find your suggestion to the Board that I haven’t been doing my job right to be very insulting! Stuart: I’m sorry. Larry: That sounds fair. I certainly didn’t mean to offend you. He was disappointed in the performance of the fund. Settling on the right objective criteria upon which to base a negotiation requires that both parties think through their options. From a look at the portfolio. because (as Will pointed out) it wasn’t an apples-to-apples comparison. Budget Officer: I don’t know what your problem is. and no one had ever questioned her performance. and decided to bring the matter up at a Board meeting. they would have had to revise the figures. they said. The chairman of the Board suggested that Stuart and the budget officer meet to discuss the investment policies and practices as they relate to the endowment funds. they had to agree that their early estimates were low.
if both of them demonstrate a similar strategy and produce better results after expenses. but I think they more than offset the gains. Stuart: No problem. Now. Preparation 25 . but we can ask them to plan and cost out each move. and its resources are limited.were stale. 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. the college is a private institution. Okay? Budget Officer: Okay. how can we identify the right parties? Conclusion The two-month experiment did produce the results Stuart had anticipated. In this situation. Budget Officer: Yes. At the end of two months. considering commissions and all. I don’t want you directing how they’re going to go. I don’t question that they were sound at one time. and the budget officer was comfortable that the risk and expense of such a strategy was small and worth the effort. then you and I can talk about changing our investment strategy. I have a suggestion. but such a strategy also increases risk and costs more money to administer. Stuart: Yes. I find that a more aggressive investment strategy produces a better return. 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. We just can’t make up losses to the endowment fund without considerable impact on our annual budget. but some of these stocks have really lost their value. because she did not have the background in investments necessary to trust such advice. As you know. but I want to be involved in the discussions with them about what we’re asking.
(2) a later curfew. (3) more chores. It will cost me more than $10—about $35 per week. what else can I do. wash the cars. and for going out with my friends. besides washing the dishes every night and cleaning my room? Mother: You could cook dinners. Example 1 Shari. Once you both agree on the list of things to be negotiated.Tactic 5: List All Items to Be Negotiated Break down the issues to be worked out into separate items ahead of time. and (4) different treatment from your sisters! 26 50 Practical Negotiation Tactics . you should each put together a “package” of several items on the list and work out a win–win agreement for these things. You can’t treat me the same! Mother: Well—so we’re talking about several issues. not on what you want to spend. This strategy can build trust in the negotiation process itself. Shari: Well. baby-sit your sisters. a sixteen-year-old who lives with her parents and three younger sisters. cut the grass. your little sisters will want equal treatment. and ask the other party to add to the list. not just an allowance increase! There is: (1) a $10 increase. Shari: I’m four years older than the next-oldest. 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. I need more money for clothes and CDs. if I give you an increase. Mother: That’s a large increase—and we just raised it last year! Shari: Well. has asked her mother for a $10/week increase in her allowance. Mother: But your allowance is based on what you earn in your weekly chores.
while your Dad and I go out. I’ll pay you $10 to babysit every Wednesday night. and item #23 (the wellness program voucher). Now we have a package deal to propose … Preparation 27 . The union’s chief negotiator. was avoided. while the mother won a Saturday house-cleaning and a night out each week. Shari got the $10 she wanted and a later curfew. The trading of items (where initial demands are discussed and agreed upon) begins. if you agree to our proposals on item #3 (the paid vacation schedule). which the other children would have requested as well. 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. Example 2 The union and management negotiating teams opened discussions with a list of 48 demands. you get to stay out an hour later that night. An allowance increase. Management: (after calculating the total value of the five items during a break period) We agree to your package of five items. Then a “win-win” solution could be determined. opens by proposing the list of items. Management agrees. in the first session. Now it is time for each side to list their desired outcome for each item. Union: We will agree to your proposal on item #6 (the number of paid holidays) and item #14 (the new overtime hourly rate). item #11 (the clothing allowance).Shari: Right! Mother: So … I suggest no allowance increase. but unlike your sisters. since all of their items were included as requested.
28 50 Practical Negotiation Tactics . other trade-offs are proposed and agreed to until only a few items remain. Then negotiations can resume on the remaining 43 items. thus removing them from the discussion table. the two sides will at this point sign and date the list of proposed items.Conclusion In most labor negotiations.
I love this car—restored it myself. It was nice meeting you. just out of curiosity. as he left the supermarket. Not even for. say. Bob made it a point about once a month to go out of his way and drive by the man’s house. 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.Tactic 6: Timing Is Everything The exact month. Hi! What can I do for you? I’ve admired your ‘63 Impala for years. $12.000? No. He stopped and knocked on the door. and do your homework. Timing is everything! Example 1 Bob Hillard had been coveting a turquoise 1963 Chevrolet Impala Supersport convertible for several years. As the man got out of his car. One day. That’s a generous offer. Would you possibly be interested in selling it? No. One day. my name is Bob Hillard.) Preparation 29 . he saw an elderly man get in his dream car and drive away. on Briarwood Road. he noticed a FOR SALE sign in the yard. Bob followed the man home. I live a few blocks from here. day. (For the next three years. Prepare carefully. time of day. thanks. and general circumstances under which negotiations take place can substantially impact the outcome. but money doesn’t mean anything to me at this point in my life … Well. which turned out to be only a few blocks from his own house. the following conversation occurred: Bob: Car owner: Bob: Car owner: Bob: Car owner: Bob: Hello.
and I promise to take good care of it. 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. Can you come back on Monday at 10:00 a. and the vote was a 6-6 tie each time. resulted in another 6-6 30 50 Practical Negotiation Tactics . A majority was needed to pass the partnership agreement. 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. the timing of his second effort was perfect and it enabled him to negotiate for the car of his dreams. that’s a fair price. and wondered if your ‘63 Impala might also be for sale … (obviously not remembering Bob) Well. I can’t take it with me. I’ll see you on Monday.m. Example 2 It was Sunday. as a matter of fact.000. (after a careful inspection) It’s a very nice car! I’ll give you $12. had issued a deadline of December 31st. if a seventh vote could not be found by the pro-agreement side. Then it’s a deal? Yes. the proposal would die at midnight. December 31st. to seal the agreement at the courthouse? Sure. The partner organization. for tax reasons.m. The board members had met twice before. I’m moving to California to live with my daughter. Well. beyond which the project would have to be abandoned. Can I see it? Sure. Follow me. so I guess I will be selling it. Conclusion While Bob did not achieve his goal during his first negotiation effort.
Preparation 31 . and the meeting was adjourned. At 5:30 p.m. in the end..m. The measure passed 6–5 at 5:45 p. during an hour break in the meeting. That effort failed. the leader of the pro-partnership side heard someone say that the meeting needed to end by 5:30 p. the project had been stalled by 6–6 votes... timing was everything.m. He planned for it accordingly. 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. Then.deadlock.m. and it worked. Both sides caucused: The leaders on each side met to negotiate a compromise. Conclusion The leader of the pro-project group recognized that they might have a unique timing advantage. For weeks. A member of the pro-project group quickly called for a vote after the leader gave a signal. as predicted.. the pro-project leader told his members to filibuster until he gave a signal and called for another vote.
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In some cases. such as Tactic #19 (Make a First and Best Offer). Look at the personalities of each negotiator and see which side will be more vulnerable to pressure bargaining (Stage 5). cooperative manner. Tactic #12: Find Common Interests can be helpful. Be sure you are aware of this at the beginning. you must first evaluate your needs and those of your opponent. A neutral. and Tactic #48 (Walk Away). If you prefer to take a firm and direct approach. if you want to begin in a friendly. uncaring approach (Tactic #9: Control Your Emotions. Some of the tactics listed in this book are only suitable for single-session negotiations. Identify all outside influences and hidden agendas before you develop your strategy. might step in and help settle negotiations between a union and administration negotiators. such as a third-party negotiator. Are there any outside people who might influence the process. for example. or one-time-only. then Tactic #13: Set a Deadline or Tactic #11: Have an Expert Witness might be helpful. such as a buyer and a seller or a city and its union. After you have evaluated these factors. Tactic #33 (Bluff). Third parties sometimes have their own hidden agendas. but in practice it will likely influence the whole process. Tactic #43 (Nickel and Diming). decide whether the negotiations should be continuous. as it can substantially alter the negotiations between two primary parties. 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. 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 . For example. as well as their bargaining history and financial and political positions. 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. Before you can do this. and Tactic #10: Make a Reciprocal Buy-Sell Offer) are also useful alternative strategies. a third party can serve as a mediator (a legislative body.Stage 2: Planning a Strategy he next stage is critical: Choosing a strategy. The overall strategy chosen does not limit the use of other tactics.
The agent explained that the seller was desperate. 34 50 Practical Negotiation Tactics . with “All right. and the buyer was able to completely renovate the house and still have a great deal. I offer half the asking price. 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). By assuming opposing roles. half-serious. If there is a significant weakness in your position. His teenage sons had “trashed” the house.side is either caught off-guard or (in some rare cases) a negotiator will be able to achieve an unexpected fantastic settlement. but the inside was a complete turnoff. two people on the team will be more successful because they evoke different emotions from the other side.” The agent took the offer to the seller. The desperate owner agreed. The buyer loved the location. The buyer said he wasn’t interested. 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. you should consider disarming the other party by acknowledging the weakness at the start so that you can reduce the impact of the weakness if it is used by your opponent (see Tactic #14: Don’t Always Hide Your Weakness). the seller’s agent called the buyer about the property. For example. “Please make any offer—they are motivated!” The buyer responded. Weeks later.
Tactic 7: Decide How “High” Is High Your first demand in the negotiation process is the most important decision you will make. but certainly not exceptional in any way. First. Buyer: The air conditioning might have increased the value of the house. We also think that the neighborhood has improved over the last few years. After all. as well. but the redecorating is of little value. but we simply can’t take less than $160. Carol: We really want to sell. She has had it on and off the market for the last five years. Carol: Maybe not. one buyer shows some interest. Anyone buying the house would want to change wall colors or add new carpets. we’ve put a considerable amount of money into a new air-conditioning system and in redecorating.000. Finally. it is likely that your opponent will. The market hasn’t gone up that much in six years. but the house has increased in value. your request must not be so low that the other party concludes that you are not negotiating in good faith. Be realistic.000. Planning a Strategy 35 . we think $160. but not so high as to end the negotiations before they begin. with no success. If you consider the demand ridiculous. and just refuses to reduce it. and then look at the demand from your opponent’s perspective. You are not likely to get more than you request. Carol wants $160. so think this through well ahead of time. Your demand should be high enough to give you room to compromise. And I don’t see a lot of difference in the neighborhood.000. so do not underestimate what you might be able to achieve. but quite frankly. Example 1 Carol has been unhappy with the house she and her husband bought six years ago. Buyer: We really like the house. It’s a good neighborhood. Each time. Surely there’s some flexibility in your asking price. her real estate agent told her that they were probably not going to get a buyer because she is asking too much.000 is very high. six years ago you bought it for $60. However.
though.000. Inquiries to other law firms were not very helpful because in almost all of the instances.Buyer: What if we offered you $100. Neither Edward Bits nor Edmund Bites. 36 50 Practical Negotiation Tactics . or she has unreal expectations. but they have no idea what the value of their firm’s name might be in this nearby city.000? Carol: We really can’t take less than $160. the transaction also included some degree of consolidation of the law firms involved—not just the use of the firm’s name. The partners are interested in selling the name. as to how you think the name is going to benefit you.000 offer by coming down in price at least a little. Buyer: Good luck!! Conclusion The buyer expected Carol to counter the $100. 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. In any event. We’re curious. The firm now had over twenty-five law partners who owned the firm and continued to benefit from the reputation and name recognition of Bits & Bites. we are certainly interested in your request to “buy” our firm name to use in your city. the founders of the firm. When Carol refused to budge. The other law firm was prepared to pay $100. Here’s how the initial negotiations went: Partners: Well. were still alive. and then $10. Carol drove off a potential buyer by setting an asking price that was just too high.000 immediately. Example 2 The law firm of Bits & Bites was a Sioux City institution.000 or 1% of profits (whichever is less) over the next ten years in order to use the name. enjoying a statewide reputation for quality representation. the buyer took it as a signal that either Carol didn’t want to sell.
we do. that’s just our initial figure. then. Yes. expect to pay for that. And we. I guess this is just not something we’ll be able to pursue. starting with the ten partners you describe. that is a very high number. We should assume. because we were not even close to that number. and then 10% of your profits each year for as long as you use the name. What number were you thinking about? Well. (concerned about loosing the opportunity) Wait. Let’s just pretend this didn’t happen. Thanks so much for meeting with me. we reserve the right to withdraw our permission. (surprised) Well. you have a very solid reputation there. Partners: New law firm: Partners: New law firm: Partners: New law firm: Partners: New law firm: Planning a Strategy 37 . And even though you don’t have an office in our city. Well. one of these two attorneys carries the surname of the firm they are leaving. I’m kind of embarrassed now.New law firm: We are establishing a partnership of ten lawyers—the top two moneymaking attorneys in each of five local firms. So. If at any time we feel that you have “harmed” our name.000 initially. We probably won’t be insulted. I really don’t feel comfortable doing that now. Give us some range. To offer it now would be an insult. Using the Bits & Bites name can only enhance our profitability. it would be impossible to create a new name out of the names of our key partners. that you anticipate to build a very profitable law firm. We weren’t really thinking about that amount of money. but we get to keep all of the money we’ve received up to that point. because you are in the state capital and your firm has handled a lot of high-profile political cases. of course. we want $500. In every instance.
In this situation. The price they were willing to pay would have indicated what the naming rights were worth. Both parties were probably at a disadvantage. 38 50 Practical Negotiation Tactics . since they had initiated the contact. Either side could have asked for too much. because there was no “objective” criteria available to help them set a reasonable price. Bits and Bites should have let the prospective firm make the first offer.Conclusion Bits & Bites lost an opportunity here because their initial demand was so unrealistic with what the prospective firm thought the “naming rights” should cost. It immediately dropped the idea. rather than negotiate.
etc.200! We should get $1. Peggy: Planning a Strategy 39 . I heard that you want to sell your riding mower. while another acts difficult. I don’t know what the deal is now. only three years ago. Andy and Paula. I’ll go home and you can call me if you two can reach an agreement. And take the leaf-catcher attachment and the gas can. Peggy: So.400 if the catcher and can are included. and I know how you take care of things. you’re really moving! I hate to see you leave. (bad guy) and implies that his or her side will hold firm on their demands. One member of your team acts friendly to people on the other side (the good guy) in order to gain their trust and support. They cost about $300.Tactic 8: The Good Guy/Bad Guy Routine The “good guy/bad guy” routine is a useful one. I want to keep those. Half what it cost us new. so I’ll take it. threatening. I can use them. what’s your price? Andy: $1. Example 1 So. Peggy: That’s fair. Andy: No. Peggy. not for $1. since they are sitting out in the driveway with it. Andy: No.200. 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. angry. Paula: Go ahead and ride it home. Peggy: I assumed they went with the mower. we won’t need it at the new condo. Andy: I want them… Paula: Go ahead and take them. Andy and Paula: Yes.
And we need to add a clause that holds your company responsible for machine damages. the quality of the technicians’ work.000 in service calls last year alone because your damn people don’t take care of the equipment. 40 50 Practical Negotiation Tactics . Liz: But we still want to renew your contract. She very wisely recognized the routine and forced Andy and Paula to give her a clear. Sandy. She realized that it put her in an impossible negotiating position. we’ve been fairly happy with your responsiveness. firm offer if they decided to continue negotiations.200 will be about right… Sandy: I can’t begin to pay that! Liz: Calm down. Example 2 Sandy (business owner): Miguel and Liz (representatives of a computer firm). perhaps even unintentionally.Conclusion Peggy thought she was getting the old “good guy/bad guy” routine. Sandy: What? First of all. Sandy.000 per month is one of the highest in town. we’re here to negotiate a new service agreement. causing our reps to spend hours on the road. Miguel: I’ve figured $4. your account has taken too much time. You are located outside our primary service area. Let’s talk. For the past three years. Miguel: Well. and your training programs. We estimated that it has cost us more than $50. And cut the training hours from 55 to 20. Miguel: But not at this ridiculous rate. And we want to change the 24-hour service response time to 48 hours. your rate of $3.
(Three hours later) I’m back. I want to keep you as a customer. these terms will put me out of business—I’m a small 20-person operation. What can I do? Let’s try to negotiate something reasonable before Miguel gets back. Planning a Strategy 41 . Sandy. Any luck. If not. you two? Good news. Conclusion Miguel and Liz used the good guy/bad guy tactic in the classic form: Miguel scared and threatened their opponent. I hope you can meet my terms. Then he left so Liz could convince Sandy that they needed to quietly reach an agreement she could “sell” to Miguel later. Sandy. I’ll stop back about 2:00 p.Miguel: Sandy: Liz: Sandy: Liz: Miguel: Liz: No. Sandy. Miguel! We’ve worked out a deal I think you can live with. Our customer base has grown. Sandy believed that she was able to avoid a terrible deal and negotiate a fairly good one. I’ll explain on the way back to the office. and it’s not efficient enough anymore for us to handle smaller firms—especially those outside our region. I’m afraid our relationship is over. I’m going on to lunch. Liz. but Miguel’s right.m. even though it was far above the previous contract. with a position he knew was unreasonable.
So.10 a minute rate at my office location. 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. 42 50 Practical Negotiation Tactics . He decided that the best approach was to act indignant when he spoke to the company representative. such as deals on computer packages and phone services. This will put you at a distinct disadvantage from this point on. Here’s how the phone conversation went: Customer representative: Mike: Over-the-Air Long Distance. The fault was partly his because he did not stay on top of changes. I noticed this. made some very good purchase decisions for his small business. but I recently was sold a $. Control your emotions and use them to your advantage! Example 1 Mike prided himself on being an informed and educated consumer. in fact. It seems that the rate you are charging me on my home phone is $1. he was very unhappy. because we have had a sick relative out of town and we used long distance a lot this past month. He had. 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.Tactic 9: Control Your Emotions Stay cool. I have a problem with my recent bill and my billing rate.00 a minute. 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. 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. and might even harden your opponent into an unfavorable position (for you or for both of you). How may I help you? Hello.
I realize that that might be the rate I started paying when I first took your service over eight years ago. of course it is not always possible to give existing customers some of the “offers” we have out. although he wasn’t really angry) Are you suggesting that it was my responsibility to advise you when one of your “offers” was available to lower my rates? How would such information even come to my attention? More importantly. Well. I would have known I was paying too much. 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. I would think you would have given me the best rate you offer new customers. Mike: Customer representative: Mike: Customer representative: Planning a Strategy 43 . Customer representative: Let me pull up your account. It hasn’t been increased at any time. (beginning to sound irritated.I expected the bill to be higher than usual.10 per minute rate on your long-distance service. and I also realize that if I had examined my bill closely. we certainly would have discussed your options. to begin now. Mike. how would anyone who might only have residential service even know to ask? Well. I see that the rate you are being charged is the rate we offer for the type of service you have with us. Had you brought this to our attention before. But as a very good customer of yours. But I am able to offer you a $. but this was quite a shock.
don’t think this is directed at you personally. she kept Mike as a residential customer as well as a business customer. In doing so. I am. Is your supervisor there? I’m certain that he cannot adjust your account retroactively. which should rightly be $50. He was walking a thin line. 44 50 Practical Negotiation Tactics . The latter would not have produced the desired results. We certainly don’t want to lose you as a customer. (with a much angrier tone) Madam. however. Wait—I’ll get my supervisor. The best we can do is fix the rate for the future. after all. but I can’t do that. Customer representative: Mike: Customer representative: Mike: Customer representative: Conclusion The supervisor waived the long-distance charges for the $500 bill and adjusted Mike’s rate to $. But I’m looking at a $500 longdistance bill. a long-time customer of your company. I … (interrupting and in a stern.10 per minute. and I should be treated with more respect! I’m sorry. If you can’t get me someone to talk to. I would hope that you would credit my account for this better rate for past service. between controlled. Mike’s willingness to show a measured “flare of temper” brought results. controlled voice) I need to talk to someone who can do it immediately. there’s no reason for this conversation to continue. and I want to speak to someone in authority so I can terminate my service. but I am very angry with Over-the-Air Company. either. strategic anger and abusive behavior.Mike: I would imagine so.
Employees’ negotiator: (with a stern voice) You have been saying this for three weeks. The employees’ negotiator finally decided to use “indignation” to break the stalemate. and it’s not what we’re even talking about. and you just can’t be too careful. Where are your managers? Where is the training necessary to make Planning a Strategy 45 . The owner told the employees that he was worried that during the overtime shifts. Owner: Now. Negotiator: (now beginning to get irate) You talk about the risk to your plant if the less-experienced workers are there on overtime shifts without the senior employees. I’ve got to have the employees with the most experience to protect this place. The most-senior employees want to have the right to refuse overtime and have those less-senior employees take the overtime.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. On those overtime shifts. they would become dissatisfied with their pay and want their base pay increased. lesssenior employees might be at greater risk of injury because they have to handle explosives. Working with fireworks is working with explosives. Owner: I’m just not willing to let my best people refuse to work the extra shifts during our busy season. that’s just not fair. The owner was afraid that if the mostsenior employees routinely passed up the overtime and the overtime pay. 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 that they should be asking for a fairer base wage for the work they do for you. and it’s getting old. They will be putting the plant AND their fellow workers at risk by not being here.
Then you can’t have it both ways. In practice. not at all.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. Had the owner let him leave. or they’re not. 46 50 Practical Negotiation Tactics . sit down. Either they are properly protected. (He begins to walk out. The end result was that the most-senior employees did win the right to refuse overtime. No one who takes a job with us can be unaware of that. I’m not coming back. After the employees’ negotiator threatened to walk out. Sit down. though. the negotiator would have had to find a way back into the negotiations without losing ground. Until you’re ready to talk about that. don’t be so hasty. But the fireworks business is a business that involves risk. That’s all.) Now. The safety of the plant demands it! (standing up to leave) This is just ridiculous. The negotiator was also running a risk with his flare of temper. either the employees are properly trained. All I’m saying is that the most-senior employees have to be on the overtime shifts. he became more reasonable. most of them continued to take all the overtime they could get. but not all? Conclusion The owner was on shaky ground with this one. What if we were to agree that the senior employees could refuse half of the overtime offered to them. You are not addressing the real issue for you: money. now. But we protect our people. or they’re not.
Planning a Strategy 47 . 3) They can agree to sell the object to a third party. with winner taking all. The second party then decides to either buy it at that price and pay the first party. I’ll give you 48 hours to decide the price. 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. However. a well-known negotiations professor from Harvard University. Mike: Mary Anne. A fourth option. the executor of the estate. called the “Reciprocal Buy-Sell Offer. or sell it to the first party and consequently receive the full amount from the first party—thus giving up the object. Susan. Both sisters covet it. Mike. The first party decides on a price for which he or she will either buy or sell the object to the second party. 2) They can flip a coin. since this one is in perfect shape and it was Mother’s. you will decide if you want to buy it for that price or receive that amount from Mary Anne (but lose the grinder).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. Then Susan. and split the proceeds. so you set a price at which you agree to buy or sell the coffee grinder. (two days later) Mary Anne: Well. my kids and I looked on eBay and everywhere else and found out that coffee grinders in perfect condition sell for about $500. has decided to use the “reciprocal buy/sell offer” process to settle this last piece of the estate.” is the recommendation of Howard Raiffa. with the highest bidder paying the amount to the other side in compensation for their loss. I’m willing to pay or let it go for $800. All the rest of the estate has been divided among the family. you’re the oldest.
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. Here is my check for $800. but each partner had grown to dislike the other and wanted to end the partnership (but continue to own the business without a partner). I suggest a slight modification to the process. to submit a sealed offer to buy/sell the business sixty days from today. in writing. Conclusion The “reciprocal buy-sell offer” process caused both Mary Anne and Susan to research the market value of the coffee grinder. Example 2 Howard Raiffa described a consulting situation in which he used the “reciprocal buy-sell offer” process in his book. You will both agree. I’ll pick it up tonight. Agreed? Abe and Bobby: Sounds good! Let’s draft and sign a written agreement detailing the process. (sixty days later) 48 50 Practical Negotiation Tactics . Both came to Raiffa to help negotiate a settlement. Lectures on Negotiation Analysis. which will bind us to the outcome. Thanks for making this last step as easy as possible. Two business partners had been working together for ten years to build a successful business. They accepted his suggestion to use the “reciprocal buy-sell strategy.” Howard: Since in this case you are talking about a multi-million-dollar business.Susan: Mike: Well. I choose to buy it. After I open the bids. They thus were able to determine the highest price each was willing to pay for it or receive for it. and then decide how much more “emotional value” it held. Both sisters felt that the process enabled them to resolve the issue fairly.
Agreed. but only if they could become the sole owner. you agree to sell your half-interest to Bobby 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. Bobby was willing to pay more than Abe to remain sole owner. Abe. and we close by July 1st. and both men had carefully estimated the market value of half the business. And I will arrange financing to pay you $180 million to become sole owner. Conclusion Both parties wanted to keep the business.Howard: Abe: Bobby: Abe. I will arrange to sell him my half-interest for $180 million. your bid is $190 million. Bobby. Planning a Strategy 49 . The partner who was out-bid in a fair process received a fair settlement: $10 million above what he was willing to pay. and to close within ninety days. your bid is $170 million.
Based on seating capacity.” and then argue for the frugal alternative. the one that was the most expensive was superior. so when the husband wants them to make an 50 50 Practical Negotiation Tactics . Looking at these statistics. They both expressed an interest in finding a couch that offered the most “interior” space. and created a spreadsheet to compare the five best-rated couches on their list. he decided upon a strategy: First establish himself as the “dimension expert.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. When it came to comfort. and the husband felt like he saved them hundreds of dollars. 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. When he showed his wife the detailed spreadsheet. This strategy worked. It can also work in reverse: establishing the other person as the expert. The wife was determined to buy the least-expensive brand rated excellent by consumer publications. He thus ended up having greater negotiating power. Conclusion The husband became the “expert” in this situation by doing the homework.” but there were substantial differences in price—differences that the wife did not see as a problem. Example 1 A young couple were discussing a possible purchase of new furniture for their living room. the one he wanted (one of the least-expensive) was superior. and forcing him or her to control the discussion of the issue. she glanced at it and immediately deferred to his opinion. The husband found the dimensions of the couches in the brochures and Web sites. The couple decided to limit their selection to those rated “excellent. This approach can also be reversed: The wife in this situation is a banker.
” If you spend many hours learning about Health Maintenance Organizations (HMOs).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. Preferred Provider Organizations (PPOs). Many bargainers on the other side will not know their HMOs from their PPOs or their POSs and are likely to leave important details up to “the expert” to decide—just as the negotiator planned! After explaining in some detail what each of these three types of insurance plans are. you gain an edge when negotiating a new plan for your company. he argues that she is the expert. and should therefore handle the problem. a negotiator in a similar situation was able to get the other side to agree to include a plan that they had opposed only days before! Planning a Strategy 51 . and Point of Service (POS) plans.
and their mother was tired of it. because I am so conscientious about my paper route. you both want to complete negotiations by a certain date. The two boys fought over the last piece of everything. That simply rewards your continual squabbling. particularly when things seem to be at a standstill. Be clear on what you have in common at the start. and neither boy was very happy. she made them share whatever it was. she decided to try something different. Russ: 52 50 Practical Negotiation Tactics . This time. I wouldn’t care so much. Unless you can convince me otherwise. you want to reach an agreement that is favorable to an outside party. Mom: I’ve decided that I’m not going to cut this piece of cake in half and give you both some. point them out at the very beginning of negotiations and refer to them throughout the process. Example 1 When Russ and Bill got home from school. I missed dessert the other night because I had to get to baseball practice. The boys quickly huddled. like we usually have. the last piece of cake will get thrown away. They immediately began to fight over it. and then asked their mom for a chance to negotiate with each other. neither of you want to be embarrassed at the outcome. I also took out the garbage last week without being asked twice. These positive things are part of your goals and objectives. If this was chocolate icing. Usually. and I really love the banana/butternut/ sour cream frosting on this cake. This is done by deciding at the outset what you both have in common: You both want to reach an agreement. When they boys returned. they saw that there was one piece of cake left over from their mom’s bridge party. and so on. here’s what they said to her: I think I should be rewarded with the piece of cake.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.
to 3:00 p. That sounds like a wonderful solution. We realized that if we cut the cake lengthwise. Customers have started to park in nearby apartment lots. It was the type of shop the nearby residents preferred. Planning a Strategy 53 . and her children were in school. so these hours worked out well. The last cake we had was chocolate cake. I can have the part with the icing and Bill can have the part with the cake and filling.m. Marilyn originally set her shop’s hours for 10:00 a. so that your customers can park on the street. because there is no parking along the street during morning and evening rush hours. she got a visit from some of the residents.m. I got an “A” on my book report that I really had to work hard on and when you got home from the store last week. This cake is white cake. Residents: Marilyn. and that’s not my favorite either. and keeps it open longer so she can attract customers on their way to and from work. Example 2 Marilyn’s Memorabilia Store was located along the main commercial street of a residential neighborhood. and better than a fast-food restaurant with late-night hours and a drive-through window. Now that her children are in college. We really want you to go back to your original times.Bill: Russ: Mother: I think I should be rewarded because I cleared the table for Russ the other night when he had to get to baseball practice. I helped with the bags without being asked twice. and I really like white cake. your new shop hours have caused your customers to park in our parking spaces.m. she opens her shop at 7:30 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. One day.
It is very costly to have cars towed. Most of our residents are gone by 8:00 a. Identifying their shared interests caused the nearby residents and the customers to reach agreement.? Residents: We certainly want you to stay in business here. or so anyway. rather than after work. Marilyn: Conclusion Marilyn needed the extra parking. We think they’ll be agreeable to the morning parking. and see if it works. and 9:00 a. Okay. But I really am increasing my sales by being open longer hours. then we’ll try and accommodate you. If you need to have the shop open more hours.m.m. and the residents needed Marilyn’s shop.. and usually the car is gone by the time a tow truck shows up anyway. Lets try it. my customers can’t park on the street.. if residents haven’t left for work yet. But in order to keep my new customers.00 a. And we don’t think you want your customers’ cars towed. if I go ahead and open the shop at 7:30 a.m.m.m. Can’t you post signs that tell non-residents not to park in the lots? Residents: The problem is that for the signs to be very effective. and 9:00 a. and between 4:00 p.m. I really need that extra income to stay in business.m. and is probably empty in the afternoon if they haven’t gotten home yet. The parking lot used for apartment residents is probably full from 7:30– 9.I’m sorry this is happening.m. 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. we have to be willing to tow the cars that violate it. and I close at 4:00 p. let’s see what the options are. The shared parking arrangement did work out for Marilyn. 54 50 Practical Negotiation Tactics . I have to convince them to come before work.m. and 6:00 p. Between 7:30 a..m. So. I don’t think that would be very good for business. the off-street lots probably won’t be used by my customers.
how should we go about dividing up the furniture and possessions? I can’t talk about it. we can each take turns selecting things … Like each tool or dish. Jenny: Everett: Sue: Everett: Mary: Sue: Everett: Mary: Jenny: Everett: Okay. the first.Tactic 13: Set a Deadline Be sure you know well ahead of time what the deadline is for completion of negotiations.m. A deadline can help you make the best possible agreement in the shortest amount of time. How can I do that? You all live in this town and you know this house. We just don’t have the time … We’ve got to do this—the house is sold! Okay. 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. That will take days! I haven’t been in this house for twelve years. Well. Then we can sit down at this table at 3:00 p. one at a time: the youngest. A few hours? I can’t—I’ve got to leave shortly for the drive home. I don’t. but it can also work against you if you set one that is unrealistic or you fail to plan for it adequately. Well. and start choosing things. Example 1 Four adult children have gathered at the home of their recently deceased mother. let’s all take a few hours to look around. let’s all take two hours to look around and make a list of things we might want. 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). etc. Deadlines can be imposed externally (such as the government’s deadline to get a tax break) or internally (set by one side. But at Planning a Strategy 55 .
David: I understand your concern. And besides. Example 2 Allan: As the negotiating team for the city.Sue: Mary: Jenny: 5:00 p. if I cannot carry a negotiated and signed deal to my board by noon on December 31. this is December 29.m. Allan: Let me confer with the city attorneys. All of us must come back before Saturday to take what is ours—agreed? Okay. we cannot agree to these development plans submitted by your company until we have reviewed how they will affect the historic buildings. your attorneys know the tax laws. and I appreciate your interest in the historic structure.. 56 50 Practical Negotiation Tactics . being the oldest. Okay. if we are not finished. 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. December 31. However. can sell or give away what is left. Sue. Allan: What! Why did you not tell us this before? David: We never thought you would take three months to get to this point. we all leave. Agreed. then the whole deal is lost because my company will lose $10 million in tax benefits under a federal law that expires on midnight.
) I understand the December 31 deadline. Obviously.Allan: (One hour later. and I don’t like it. He waited to bring it up until it was clear that doing so would help him get the settlement his side desired. Conclusion Knowing the external deadline gave David a significant negotiating edge. Let’s continue. Planning a Strategy 57 . we can’t get the reports we wanted in 48 hours.
He decided to preempt the discussion in order to make the best deal. while watching TV. I bought the second one. so he was able to prevail upon her to let him continue. and I missed some assignments. but his grades are good. we need to talk. and we used it a couple of times. and this usually means having all the right information. I’ll need to buy it again. and you can neutralize its effect on the negotiations. 58 50 Practical Negotiation Tactics . first-quarter grades are coming out at the end of the week. Jason: Mom. There will be times during a negotiation when you will want to catch your opponent off-guard. before your opponent tries to catch you off-guard. Control the use of the information. don’t get mad. Did you buy it? Jason: Yes. Mom: What’s that? Jason: A few weeks ago I lost my workbook. His mother disapproves of his study habits. He knows that a D will mean that he will have to change the way he studies. Unfortunately.Tactic 14: Don’t Always Hide Your Weaknesses Be sure you know what your strengths and weaknesses are. but I have a problem in my Spanish class. but that was actually a different workbook. The objective is to negotiate from a position of strength. Have a clear goal in mind AND all the information you need to make your points. We had one at the beginning of the semester that we were using pretty often. Mom: All right. but remember that both sides have weaknesses. and one of the ways to do that is to reveal a weakness at the beginning. Mom: I gave you money to buy a workbook a few weeks ago. Then the teacher went back to the first one. I’ll give you money for it. and Jason knows he is getting a D in Spanish. But don’t lose it again. as well as strengths. One day mine disappeared. Example 1 Jason likes to play video games as soon as he gets home from school and do his homework later. as well as those of the other side. Now.
Since I missed some assignments. Its owners found out that at least three other buyers had been in contact with Jane. His explanation made sense. The location was ideal for a convenience store or a fast-food restaurant. I’m getting a D in Spanish for the first quarter—but it’s not because I’m studying in front of the TV. I think I can do that. All of my other classes are A. so there’s no reason to think I need to change my study habits.(maybe C+). I don’t think you’re taking your schoolwork seriously enough. Mom: Well. then I’ll agree to make changes. he was able to continue to study the way he wanted to. And I know I have to be better about getting in all of my assignments. B. and since he offered her the information up front. The work I did turn in was fine. I’ll give you more time. Example 2 Jane once owned a piece of property she wanted very much to sell. Obviously. But that Spanish grade needs to come up to a B!! Jason: Okay. I think you need to give me the rest of the semester before making me change the way I do my schoolwork. It’s because I didn’t have the book. all right. or borderline B. but I think you do need to change your study habits. Thanks. Jason: Spanish is just one class. Mom: Well. Mom. English. Environmental Science. but all three deals Planning a Strategy 59 . I’m sorry. Conclusion All of Jason’s grades did improve over the next quarter. Although his Spanish grade was only a C+. 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. my study habits are okay. and the D is directly related to my losing the book. If I don’t pull the D up to a C or better. And those are hard classes—Algebra.Jason: Another thing. Pizza Boy was interested and had even made inquiries about the property. she trusted it more.
let’s assume that you are right. and was able to politely ignore her. the other interested buyers already have businesses in the neighborhood. Pizza Boy was prepared for her call. The real problem. was that Jane’s neighbor had contacted each of the previous potential buyers and complained about their plans to use the property. which was way below the price they were actually willing to pay. however. What are you asking for the property? Conclusion Jane told them her asking price. When the neighbor heard about the new buyer. it’s only the neighbor to the right of the property who has a problem.had fallen through. This is how the negotiations went: Jane: Pizza Boy. But unlike your company. I think you’ll find that this is only one person. Pizza Boy: We’ve checked the property out. either. however. Jane: Oh. though. A tentative deal was signed. Pizza Boy: Well. When she contacts you. there were no unpleasant surprises to stop the deal. I know. You are a big enough corporation to withstand her objections. What are her grounds for complaining? Jane: She doesn’t have any. I’m very happy you’re interested in my property. I’ve got to warn you—you might hear that there is neighborhood resistance to your putting in a pizza restaurant. The Pizza Boy people figured that Jane’s asking price must be too high or that she is unwilling to negotiate. and it’s zoned for commercial use. Jane’s up-front disclosure of a potential problem allowed Pizza Boy to weigh the negatives with the positives. I’m sure. They decided not to fight a disgruntled neighbor. Furthermore. we’re not interested in neighborhood fights. since they were well aware of the negatives. really. 60 50 Practical Negotiation Tactics . Pizza Boy: Well. she will want you to think it’s the whole neighborhood. Actually. she started her campaign to keep them from closing the deal. The neighbor’s attitude suggested that there would be major resistance in the neighborhood if Pizza Boy tried to put in a commercial establishment.
190–192.750–$25. in negotiating a labor agreement or the price of goods or services: The monetary gain realized by one party is also the monetary loss of the other party. quick agreement. for example. None is as important as the first one. 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.000 22 23 24 25 26 27 Initial Offer $28. as illustrated in the following figure: Seller Resistance Point ($22.Stage 3: Exchanging Initial Offers any offers and counteroffers are made during a typical negotiation—sometimes even hundreds. by Michael R.500) M $21. Another common strategy is to start with the status quo. Experienced negotiators often view negotiations as a process in which the goals of one party are in direct conflict with the goals of the other party. such as proposing to continue at the current rate or price.500) Resistance Point ($25.000 Buyer Initial Offer ($21. Many negotiators make their initial offer the highest acceptable offer (Tactic #19: Make a First and Best Offer). The negotiator firmly states that it is their best offer in an attempt to gain a nice.750) Target Point ($24. This is a practical starting point that will not anger the other side (and might even be expected). “Distributive” bargaining (“win-lose” or “zero sum”) is used. (2004). The initial offers of both parties are usually set reasonably above or below what each believes to be the settlement range.500) Fig. Exchanging Initial Offers 61 . Adapted from Labor Relations and Collective Bargaining. 2: Distributive Bargaining Process. Carrell and Christina Heavrin.000) Target Point ($23. The initial offer sets the tone of the negotiations and reveals something about the strategy of each side.000) Settlement Range ($22.
the process quickly narrows to the range between the initial offers. Experienced negotiators will begin the negotiation of several items by quickly proposing such a package. When the two parties agree to a price within the range. A target point is the desired settlement value a party has set as a goal when negotiations begin.In this example. Two extremely helpful tactics to be used immediately after initial offers are made are Tactic #15: Caucus and Tactic #20: Posturing. In the example. 62 50 Practical Negotiation Tactics . it is termed the settlement point – not the “right price” or “fair price. 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). 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. 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. if the buyer’s initial offer was $25. Resistance points are the maximum or minimum beyond which a negotiator is likely to consider an offer unacceptable (and possibly walk out). See Tactic #18: Agree on Something As Soon As You Can.000. The settlement range is the distance between the resistance points. thus starting out on a positive note. the other side does not agree to this value).000) is reasonable. 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. Both of these tactics give experienced negotiators an edge when they face novice negotiators who are more likely to rush the process and expose their position. each initial offer ($21. After initial offers are exchanged. thus producing a true “win-win” negotiation. usually. these points have set the outer limits.000 and $28. the seller would immediately accept it because it is greater than the target point and the buyer would suffer a winner’s curse.” but the settlement price.
calling for a caucus gives you a chance to get your team to recommit to a particular course of action. Shelly: Twenty friends? You’re kidding! I’ve just started on my list. A caucus is certainly called for if individual members of the team become agitated or express frustration with the progress of the negotiations. Shelly. A caucus is when a negotiating team calls for a break and leaves the negotiating table to confer in private.Tactic 15: Caucus If you are part of a negotiating team. so we’ll have the party from 7:00 p.m. 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. We’ll just have chips and soda.m. If the team is feeling pressure to concede on certain items. You can invite up to 20 of your friends. call a caucus so both sides can brainstorm new solutions to keep the negotiations going. To do so in front of your opponent would obviously undermine your team’s position in the negotiations. without revealing their ideas to the other side.–10:00 p. Mom: We’re planning on having your party here on Saturday night. If the negotiations have suddenly gone in an unanticipated direction. And that’s just my friends from school! I haven’t started Exchanging Initial Offers 63 . Her mom and dad had already talked about it privately. We don’t want it to be a late evening. Example 1 Shelly’s “Sweet Sixteen” party was coming up. A caucus gives you an opportunity to work out problems with your own team in private. so her parents sat down with their daughter to discuss the details. because it might disturb the neighbors. There are many ways to use this strategy. make use of the opportunity to call for a caucus. If the negotiations are heated. Unfortunately. a caucus can be used as a break to calm the situation down. and presumably had an agreement. the negotiations got out of hand when Shelly’s dad forgot what had been decided. or if a member takes on a role in the negotiations that has not been assigned to them. and I already have 25 names. If negotiations seem stalled.
We could play records and you guys could dance. and then the number of kids won’t matter. And they can’t go home at 10:00 p. We’ll get a band—everyone does. Shelly’s parents reviewed their first planning discussion and went over what Shelly’s mom thought they had already 64 50 Practical Negotiation Tactics . In fact. we need to talk. we could rent the VFW hall. And midnight is definitely too late. Actually. (During the caucus.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. we’ll call you when we’re ready. I’m sure we can ask them to tone it down a little.m. Jerry from down the street is in a really good band that all of the crowd likes. (with some irritation) I’m not sure. That sounds like too many for here at the house.—that’s so “baby. I think the band would be fine. (shocked) Jerry’s band from down the street? They’re a punk rock band! Their music is totally inappropriate for sixteen year-olds. Time out! Dad. I could invite everyone!! Hold on! I thought we agreed that this was to be a simple party. Dad. Oh. (excited) That would be so cool. I guess the VFW will work. It’s special!!! Well. That would be great! It would keep everyone entertained. And can we bring in pizza? Or maybe one of those “mile-long” hero sandwiches? I like those—let’s do the hero sandwiches. Mom! This is my “Sweet Sixteen” party.” They would never expect a party to end before midnight. Shelly. alone. I think we can handle a few more kids—how about 35? And midnight sounds okay. Your dad and I already talked about this and agreed that 20 guests would be the limit. okay.
m. but no Sweet Sixteen birthday party decorations. and we will need to approve the list. and you can invite more friends.m. The item currently on the table was the company’s offer to give each Exchanging Initial Offers 65 . too? No way!! I want presents!! Conclusion In spite of their prior planning. That’s so lame. to 11:00 p.) Okay. And we’re serving chips and sodas. But we can have the band. But you are limited to 40.Mom: Shelly: Mom: Shelly: Mom: Shelly: Dad: Shelly: Mom: Shelly: decided. her mom presented the revised proposal.m. but we’ll schedule the party for 8:00 p.m. this mom-and-dad negotiating team became unglued during the negotiations. Your mom and I agree—11:00 p. That way. Example 2 The contract negotiations between the company and the union had been going on for days. Dad. A DJ? I guess that’s okay. When they called Shelly back in. midnight. Mom’s call for a caucus gave them a chance to regroup and re-state their original objective. All right. please!! 11:00 p. Does that mean no presents. is for little kids!! No. we’re going to rent the VFW hall. Agreed. can’t we? No band. causing them to lose control and make compromises they hadn’t intended to make. and not a huge production. sorry. which was to make sure Shelly’s Sweet Sixteen party was a fun and safe evening. we will be better able to chaperone. but your dad and I agree on getting a DJ to play. Okay.
Union: Why are you so concerned about new job opportunities? Are you holding out on us? Company: No. Tuition in place of health insurances? They’ll think I’ve lost my mind. A lot of employees have spouses who can get health insurance coverage through their work. I’m just saying that tuition benefits are sometimes a good substitute for health insurance. it’s a good proposal. some attempt to undermine me with my members? Company: I don’t know what you’re so worked up about—we’re willing to spend the same amount of money!! Union negotiator #2: Can we take a break? Union: We don’t need a break—we’re not discussing this stupid proposal. With the cost of college educations so high. The union’s lead negotiator misunderstood the proposal. Union: You’re offering a choice between health insurance and tuition payments? What kind of a deal is this? Company: Hey. and the following conversation occurred. The tuition benefits will encourage the workers to be prepared for new job opportunities. The company’s negotiator didn’t recognize the misunderstanding. Union: (angrily) I’m not presenting this proposal to my people. What is this. Union negotiator #2: Please—just a moment outside. and thought he was being asked to choose between a health insurance plan and a tuition benefit plan for all members.individual member of the bargaining unit the option of being in the health insurance plan offered in the contract or receiving the same amount of money the company pays for health coverage as a tuition reimbursement benefit for the employee or any member of his or her immediate family. many will want to use it for their children’s education. 66 50 Practical Negotiation Tactics .
we’ll be back in 5 minutes. Exchanging Initial Offers 67 . I thought that the contract would cover one or the other for everyone. Negotiator #1 regained his footing. Good. I didn’t understand that your proposal was to allow each individual member to choose between the health coverage or the tuition benefit. and I apologize for explaining it poorly. (After Negotiator #2 explained that the choice of tuition or health insurance benefits would be an individual choice for each unit member and not a change in the contract for everyone.Union: Union: Company: Okay. the parties returned to the room. Now. and the parties were able to complete their negotiations.) I’m sorry. Conclusion Negotiator #2’s timely call for a caucus so she could explain the miscommunication in private saved the session. I think that what you’re proposing is a really good idea. let’s move on.
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. but in reality. At a point late in the negotiations.” Party B thinks that A has sacrificed one important objective to gain another. but … Salesman: But what? Hobbs: Well. Mr. 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. this conversation takes place: Hobbs: Yes. according to my figures. A has gained something of true value and given up nothing he values in return. you are making $200 profit over the true dealer’s cost. you don’t want your opponent to know what these things are. Example 1 The buyer. not revealing that the item exchanged is a “throwaway. according to the Consumer Reports listing of the cost of the vehicle. Hobbs. (Salesman returns with manager) 68 50 Practical Negotiation Tactics . Salesman: Well. I’ll go get him. He doesn’t really care about the color of the new vehicle. so be sure you present them in a way that suggests importance. I know. Salesman: Let me talk to my manager. But for this price. It is a useful tactic in any negotiations. we’ve got expenses and we need to make some profit. I can go to another dealer and get a green exterior—the color I like best. but he makes a mental note to use color as a “throwaway” item. and noticed that none of the vehicles have a green exterior. Hobbs: Yes. However. quickly checked the dealer’s inventory of sport utility vehicles in stock. it’s a great car and a fair deal. Here’s how it works: Party A exchanges the item for something of true value.” Throwaway items are those things that hold little or no value to you. when the two sides are only a few dollars apart.
.no it’s not. Hobbs successfully chose color as a throwaway item.. At the very end of the negotiations. Employees will be paid time-and-a half for each of these days. The days in question are: Exchanging Initial Offers 69 . 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. 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. Miguel. so I might as well get the color I want! What if we offer you the red one for $100 less? Is the color worth $100? I .Manager: Hobbs: Manager: Hobbs: Manager: Hobbs: Manager: We are offering you a great deal. I’ll take the red one for $100 less. The three are sitting at a lunch table to discuss the schedule. Why didn’t you mention the color before? I didn’t expect to actually buy a new car today (note: not the truth). The manager was convinced enough to sacrifice a final $100 for the throwaway. and seniority will be used to determine who gets to choose the first day. 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. Then we have a deal. Conclusion Mr. All three employees must agree to the schedule..
January 1. 30. 31. but that is a secondary consideration. 24. 2 Jenny: December 23. January 2 None of the three are totally happy with the results. Carolyn has decided to use as a “throwaway” the number of days she will work (previously. December 24 Conclusion Carolyn has achieved her objective: She will be off December 24 and 26.November 25 (the day after Thanksgiving) December 23. 27. They agree. 31 January 1. January 1 Carolyn: December 24. She proposes to work five days. She got what she wanted by giving up something she did not value: the two other days. and each chooses their days to work: Carolyn: December 27. They all agreed to their schedules. December 26. December 31 Miguel: November 25. December 27. They have decided to start over. Jenny and Miguel feel that they received something of value from Carolyn: She must work two more days than they must work. This would allow Jenny and Miguel to each work only two days. A second and third round produced the following allocation: Jenny: December 23. 70 50 Practical Negotiation Tactics . 26 Miguel: November 25. She would actually prefer to work the extra days and get paid time-and-a half. 2 In the first round of negotiation. in exchange for giving up earlier choices due to seniority. December 30. 30. each made a first choice of days they will work. 26. if they let her choose the two days she will be off and the five days she will work. it was assumed that each would work three) in order to have December 24 and 26 off to be at home with her children.
Tactic 17: Package Items In a negotiation where there are multiple issues or items to be negotiated. one might package all of the financial issues in one group and negotiate on that package as one issue. we need to sell the house. but I’d like to talk about the house and the furniture. Anne: As I see it. their mom left specific pieces of jewelry and art in the will to each of the girls. and a collection of antique furniture. In addition. Autumn: I don’t have any objection to selling the stock and distributing the proceeds and the cash three ways. they met at the house. the antiques. and the stock and distribute the proceeds. realizing that the total cost of a deal might make or break the agreement. were faced with the task of selling the house and disposing of their mom’s personal belongings. 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. a house valued at $250. Anne and her sisters. for example. When the girls decided it was time to talk about the estate. three ways.000. The estate’s assets included a checking and savings account totaling $450. Example 1 When their mother died at age 82. it is often helpful to package the items in distinct groups and then deal with each package separately. The house and much of the furniture has been in the Exchanging Initial Offers 71 .000 with no mortgage on it. along with the cash. can indicate that something you think is minor is really a major concern to your opponent. 300 shares of stock in a pharmaceutical company. For example. A reluctance to include one particular financial item with other financial issues. Autumn and Angela. Their mother’s will was very clear: the three daughters were to all have an equal share of her estate. 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.
In fact. Angela: Now’s not a good time to sell either the stock or the house and antiques. If Angela wants to hold on to her stock. we will have a more valuable asset. she’s free to do so. I’d really be interested in talking a trade for some of them. If we want. we’d get a lot more for them.family for years. and use it to fix the house up? Then when we make a decision. Anne: But that means we have to continue to take care of the house and its contents. And we’ll fix the house up. Mother was born here and grew up here. and letting everything else wait for another discussion. Angela: And we can talk about the art and jewelry? 72 50 Practical Negotiation Tactics . So we agree: We’ll leave $30. we can sell ours. With no one living here. Angela: I live close by.” She gave those things to us. and if we wait a couple of years. Why don’t we leave some of the cash in the bank. Frankly. but the operative word is “give. we’ll discuss again what happens to the house and the antiques. There was a reason why she gave us what she did. Soon. it’s a magnet for vandals. so I will be able to keep tabs on it. We’ll split the stock three ways. Autumn: I think its awfully soon to be making these kinds of decisions. Autumn: Sounds good to me. I’d like to talk about the art works Mom left each of us. we’re really free to do with them what we want. It’s a buyer’s market now. 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.000 in the bank and distribute the remainder three ways. What would you think about agreeing today to distribute the cash and stock three ways. and now that we have them. Anne: I’m not sure I’m comfortable talking about trading the jewelry and art Mom left to each of us. Anne: Okay. I’d like it all to stay in the family. don’t you think? Angela: Maybe.
and deal with one area at a time? The first: Wage issues (pay schedules and the annual and merit raise issues). health benefits. including benefits for partners in non-traditional relationships. etc. The negotiations on the other items—the house.Autumn: I can agree not to do anything with the jewelry and art Mom left me before we talk. and establishing a work schedule to accommodate evening and weekend clients.). the antiques. but I’m making no commitment to trade. deciding whether there would be annual wage increases as well as merit increases. the jewelry. sick. The following tasks needed to be a accomplished: establishing basic pay schedules. Several issues also needed to be addressed: the ability of employees to move up through the organization. funeral. vacation. 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. deciding to base the increases on a percentage or equally distribute the funds for increases among the professional and clerical staff. Angela: That’s fine. and the art works—will be more difficult. Employees: We’ve got a lot of items to cover. Waiting to make decisions on those items until some time has passed gives the women an opportunity to look at a number of options. tuition benefits. May I suggest that we divide the items into three areas. Anne: Same with me. what kind of paid leaves there will be (personal. and the assignment of the limited number of parking spaces. Conclusion Autumn’s suggestion to package the money and stock because they can be easily divided by three made agreement on those items possible. The third: Ben- Exchanging Initial Offers 73 . The second: working conditions (work schedules and promotional opportunities).
but the parties were able to come to agreement because the wage issue had been resolved. as well. that makes sense. because they’re really an incentive for better performance. Executive Director: I think it’s a good idea to group items together. tuition benefits. 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. to be honest with you. so there’s not going to be a lot of discussion on what our pay schedules and annual increases can be. 74 50 Practical Negotiation Tactics . Later negotiations were difficult. Conclusion The executive director’s request to move merit raises out of the Wage category and move paid leave into that category because there is little flexibility to finance those areas allowed the parties to resolve the wage issue first. but I’d change your list. we are an agency supported generally by public funding. Wages should not include merit pay raises. the paid leave categories are pretty clearly defined. So I’d like to see us get through the wage issues quickly and then move on. That’s a program that can have a lot to do with how employees are able to increase their worth to the organization. Also. and the parking spaces). And paid leave clearly belongs with Wage issues and should be discussed with the pay schedules. Let’s get started. Executive Director: Well.efits (health insurance. Employees: I’m surprised that you would take merit increases out of a general discussion of wages. Executive Director: Sounds like a good agenda. I think it also makes sense to include tuition benefits in the Working Conditions category. I would include that under the Working Conditions category. Employees: Okay. paid leave times.
They met and married in college. Kathy borrowed more money to go to graduate school full-time. It was her idea to buy the house and go into debt to furnish it. Example 1 Tim and Kathy. They had also furnished their house on credit. An initial agreement. Tim: You might be leaving town. no matter how insignificant. are divorcing. It indicates to your opponent that you are a reasonable negotiator. Kathy was asked by her employer to relocate to another city. Kathy’s first job paid more than Tim’s because she had a graduate degree. and she agreed. Tim began working right after graduation. You signed those papers. sets the stage for mutual respect and communication. because Tim felt that Kathy had taken advantage of him during the marriage. but don’t think you’re going to stick me with all of the mortgage and credit-card payments. after a brief marriage. Their “property division” was mostly about dividing their debts. Exchanging Initial Offers 75 .Tactic 18: Agree on Something As Soon As You Can Negotiations are more successful if both sides can agree on something—anything—almost immediately. and might not even be able to keep the house. with her promotion sending her out of town. Consider starting things off by presenting your opponent with a proposal you feel confident can be agreed upon without argument. and both have good jobs. too. You can also make an effort to agree on something your opponent offers early in the negotiations. Tim worried that he would be stuck with all of the debt. and that you are entering into the negotiations with the intent to reach agreement. Now. They were in the middle of buying a house. They have no children. without suggesting any changes or modifications. The discussion might become very heated. The couple hoped to do the divorce without involving lawyers in order to save money. rather than disposing of assets. and they were making payments on school loans (for his undergraduate degree and her undergraduate and graduate degree) and on two cars.
a wholesale art dealer. and you got your sports car. I don’t intend to “stick” you with anything. If both of us had been working the year I went to graduate school. The monthly payments are about the same. Kathy: I suppose we should look at the school loans next. and XYZ Co. 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. hold on. Tim: Well. I got my convertible. 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. as you remember. Okay. and he could pay it in annual installments over a five-year period. I think it only fair that I take over repayment of all the school loans. we decided to each pick out our “dream car” and that we would not overrule the other’s choice. we would have paid down our school loans more. even though the convertible is being paid for through a 48-month loan and the sports car through a 36-month loan. What do you want to do about them? Conclusion Having agreed to two items very quickly.Kathy: Hey. Tim: Okay. ABC usually uses UPS 76 50 Practical Negotiation Tactics . an art gallery. The first thing I’d like to talk about is what we are going to do about the cars. yes. about the house and furnishings. Example 2 ABC Company. I say we agree to transfer the convertible loan to me and you take over the loan on the sports car.. as long as the cost was approximately the same. Frankly. They also agreed that Tim wouldn’t have to pay her that amount for five years. When we bought them two years ago. I think that makes sense. Kathy: Now.
and the boxes showed no external damage. or else the box was damaged in XYZ’s warehouse. XYZ: ABC: Exchanging Initial Offers 77 . WeCanShipArt claimed that the boxes were not damaged in shipment—the artwork was already water damaged. and we will continue to discuss who is liable for the three water-damaged works. water from the gallery’s air conditioning unit pooled on some of the surfaces of the warehouse area. it was obvious that the art in one of the boxes had suffered considerable water damage. The artworks filled four boxes. XYZ contacted ABC immediately. and began preparing to return all of the artwork to ABC. and that XYZ needed to either go to the shipping company or its own employees for compensation for the damage. There was no indication that the gallery’s electricity had gone out over the weekend. when the boxes were opened on Monday. ABC’s position was that the artwork was fine when it left their location. ABC: Before we begin. and arrived on time and apparently in good condition. XYZ’s manager failed to open the boxes or remove the artworks. They arrived right before the holiday weekend began.to ship artwork. The three parties agreed to hold a conference call late Monday afternoon to try and resolve the dispute. XYZ decided to cancel the promotional sale that was to start on Wednesday. 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. However. You can get the three new artworks here so that we can hold the sale as scheduled? Yes. ABC refused to pay WeCanShipArt until it received payment from XYZ. Unfortunately. The other times this happened. let me make XYZ an offer: We will deliver three additional artworks to you by the end of the day tomorrow so you can conduct your promotional sale as advertised. but only if you let us ship it UPS. Holiday weekend storms caused the electricity to go off for different periods in different parts of the city. We’ll expect you to pay for the 12 works that will be in your show. but XYZ asked specifically that a little-known company specializing in shipping art known as WeCanShipArt be the shipper.
generated a like offer from WeCanShipArt and a reasonable response from XYZ. Now. 78 50 Practical Negotiation Tactics . The artwork was not damaged while in our control. at its financial risk.XYZ: Agreed. And we’ll eat the cost of shipping. 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. we’re ruined. they will split the cost of the three damaged pieces three ways. and if word gets out that you think it was. They also agreed that if the investigations are not conclusive. Having reached an amiable solution to the immediate problem. that’s okay with me if it’s okay with XYZ. If we don’t make the deadline. I can’t see how I can refuse that.m. we’ll take responsibility for all of the consequences: the lost sale to ABC and the lost promotional sale by XYZ. how do we resolve the issue of the damaged artworks? Conclusion ABC’s decision to offer a solution to XYZ’s immediate problem. You can’t just ignore us. ABC: Well. We can guarantee that we will deliver the new order in perfect condition by 5:00 p. WeCanShipArt: Wait a minute. tomorrow and we’ll wait for payment on both shipments until we resolve how the artworks were damaged.
It is important that both sides know that there is no negotiating beyond the single “best offer”—that the first offer will either be accepted or rejected. What do you want for it? Colleen: Well. Ann: That sounds great! I don’t want this to affect our friendship. and even more hours in the fall picking up leaves. I don’t have any idea. The “first and best” tactic enabled them to settle the matter easily. 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. We plan to put an ad in the paper next week. we’ll sell it to you. I don’t want to quibble. You must mean what you say and be prepared to walk away from an unacceptable offer. Exchanging Initial Offers 79 . Why don’t you give me a price? Colleen: Oh. we plan on selling our Ford tractor when we move. 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. Jeff spends many hours mowing the yard every week. Okay? No quibbling. Ann: Thanks! We really need one. Ann: Well. 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. Conclusion Ann and Colleen did not feel like negotiating over the tractor and running the risk that it might affect their friendship. I know you and Jeff said you’d like one because you have about five acres.000 for it six years ago. Example 1 Colleen: Ann. no hard feelings either way. and it came with the bush hog and the leaf pick-up. consider using the “First and Best” tactic. we paid $5. period.
He also started the job with a positive working relationship with Vernon. Okay? Vernon: That sounds good. on this slip of paper. I’ll discuss it with my wife and get back to you in 48 hours. Conclusion Archie accepted the job offer. I came up with the best salary offer I can make. but we have internal budget considerations and we must consider equity with other employees.Example 2 Archie: Well. Here it is. We want you. So. except salary. no questions asked. I expect a fair increase. I’ll get back to you in three days. and you know my current salary. I think we have agreed to all aspects of the job offer. how about you making your first salary offer your best one. but I don’t want to start off in a new job by negotiating with my boss! So. 80 50 Practical Negotiation Tactics . and I’ll take 48 hours to consider it. I don’t like negotiating over salary either. as we agreed. Archie: Thanks. I’ll either accept it or reject it. who admired the way Archie negotiated his starting salary. because it was several thousand dollars above what he decided was the minimum it would take for him to change employers. I want the job. (three days later) Vernon: Archie.
Sally’s Senior Prom is coming up. Kevin: Mom and Dad. He knew his parents would not agree to let him stay out all night. we’re not going to be dating exclusively after this summer.” As you know. we’re all meeting at Donna’s so we can share a limousine. 17 years old and a junior in high school. Example 1 Kevin. 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. then the prom. since Sally is going away to college next year. Exchanging Initial Offers 81 . Second. was dating a senior. Present your position and demands as if yours is the only logical position. (Once negotiations get underway.Tactic 20: Posturing You might have to do a little acting at the beginning of the negotiations. and it really wouldn’t be fair if I wasn’t able to go along with the rest of the group. so he knew that he would have to sell them very quickly. so the prom is a pretty big deal to both of us. you know that Sally is really looking forward to this. and in a favorable light. Kevin had “negotiated” with his parents before.m. It might be your only opportunity to explain your position without interruption. and ignore or deny any weaknesses in it. He and his date had decided that as long as they could join their friends for breakfast after the prom.” but it is also a source of valuable information that can help the negotiations proceed to a successful conclusion. and we’ve made a lot of plans with our friends that I need to talk to you about. Posturing is indeed “acting. I’m the only junior in the crowd. This is called posturing—presenting your position strongly and completely. curfew would be okay.m. First we’re going to dinner. look for indications from your opponent as to what he or she believes is their best position. you will probably have to modify some of your positions if you are to reach agreement. you only have one Senior Prom in your life. a 4:00 a.) During the posturing phase. Third. and then to breakfast at “Timothy’s. First. Fourth. but he figured “all night” was relative.
So. We’re just not convinced that your entire group has been alcohol. And if we don’t spend the night. I think I ought to be able to stay out all night. you will have another Senior Prom—yours—so we don’t think you will be “missing” that much if you don’t stay out all night. You realize that this could be as late as 4:00 a. Second. We are. That’s the deal then? Okay. which could be dangerous. Things can happen on a night like that that adversely affect you for the rest of your life. Donna’s parents are not as strict as they could be when a bunch of you are there. the limousine will take us back to Donna’s house to spend the night. However. Sally’s parents trust us and have already said yes to her. Also. of course. I don’t drink or do drugs. this prom is a one-night thing—a dance that is dressier than you’re used to. Fifth. Yes. but because the owner’s daughter goes to Sally’s school. and we’re just not happy about that. 82 50 Practical Negotiation Tactics . remember that when you started dating Sally and hanging out with an older crowd. I believe you can pay a little more and have the limousine bring you both home. Finally. I’ve never missed my curfew. but to use that as a reason to stay overnight doesn’t make sense. and the crowd we hang with doesn’t either. You make some good points.m. for sure. I know you trust me and that I’ve earned the trust. but it should not be oversold. We think that after the breakfast. they will be open for the Prom crowd only. Donna’s parents will be there. And.or drug-free. yes. That’s asking us to believe a lot. you have been fairly good about making your curfew—most of the time. we know. so there will be plenty of chaperoning. happy about your plans to use a limousine so you kids aren’t driving.Mom: Kevin: Mom: Kevin: Timothy’s usually isn’t open early in the morning. We’ve heard that they allow kids to drink. you and Sally need to call it a night (or really a morning). From where we sit. 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.
one-floor operation would be very profitable. The spin-off business from our operations is huge. The company approached other states to see what incentives they might offer Tencro to locate in their state. and had this conversation: Tencro: We really want to keep our company here and expand it. The assembly plant is out-of-date. 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. We need to find out what you’re willing to do to keep us here. 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. our Exchanging Initial Offers 83 . Nevertheless. Example 2 Tencro Company decided to modernize and expand its business. EDO: Well. and a new. If we can expand here. and it does not really need any help. we’d be adding at least 500 new jobs. With 800 employees. the state can do to help the company expand and rebuild. Tencro is not going to leave the state. but was disappointed to learn that they offer very few incentives. Also. Tencro approached the state’s Economic Development Officer. other companies have received incentives and Tencro certainly wants all it can get. Tencro: Let me just remind you of what our company means to this state. It currently employs 800 people. regardless of the incentives.m. but there are limited options available. if anything. Tencro has approached the state’s Office for Business Incentives to see what. and it will grow—everything from sub-parts manufacturing to the shipping business we generate. we are one of the largest employers in this county. because his parents could not disagree with such wellthought-out ideas.Conclusion Kevin’s strategy to hit his parents with all of his very good arguments at the outset gave him an advantage.
employees pump money into the economy by buying houses and cars. The industrial park land can’t be “free” because we have agreements with other companies that had to buy the land. while we value your company as a long-time corporate citizen. There are more residents in the state demanding more public services: road improvements. and we are willing to offer some training dollars for the new workers. moving to a new location will raise a lot of questions from neighbors about the increase in traffic and pollution that might be generated by your plant. 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. additional police. etc. if the new location is at the local industrial park. We 84 50 Practical Negotiation Tactics . we will need the two-lane entrance expanded to four lanes. EDO: The state has very limited resources to pay for economic development incentives. 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. Also. any plan by the state to build housing that is subsidized by tax dollars will draw a great deal of criticism. what do you have to have? Tencro: We need a new location—20 acres or so—to build our new plant. so we’d have to have it free here. We think that we’re the reason XYZ and ABC companies located here and we believe they are likely to leave if we do. Certainly.. We need certain incentives. And. etc. EDO: Well. And we’ve been offered land practically free in the neighboring state. We do want you to expand your plant. We need help in the cost of attracting and training the new 500 employees. and traffic signals. schools. We can’t possibly give it away to other companies coming in behind them. That might involve the state building housing for them at a reduced cost and providing them with some retraining. We need a rebate on the local income taxes to help pay off the loan to build our new building. now that the economy has improved. paying taxes.
EDO: Get back to us as soon as you can.agree that the road into the industrial park must be widened and a traffic light installed at our expense. but for the fact that each party did its homework and was aware of the true facts. Tencro: Well. the training and the new road improvements were all the incentives offered to Tencro. However. The new set-up was so profitable. Exchanging Initial Offers 85 . we’re just not in a position to offer more than that at this time. Tencro was able to pay off the borrowed money in half the time. let us go back and take another look at our options. Future negotiations continued. borrowed money for the new building. Conclusion The posturing by both sides could have caused the whole negotiation process to bog down. and hired 500 new employees. and the state did end up participating in a housing subdivision in order to keep the purchase price down for the new employees. Other than that. Tencro bought land in the industrial park.
000. never give them their asking price.000 this year. 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. 86 50 Practical Negotiation Tactics . and houses in this area sell fast.” The perfect first offer. because you have settled quickly. 2) Start out with an old number. Sue: Let’s offer $325. think things through before you make or accept the first offer. 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. Their realtor told them that it sold for $290. and you cannot withdraw it in good faith.000 for a house that sold for $185. The other party will probably come back with an equally ridiculous offer. and that two similar ones on the same street sold for $330.. We don’t know how anxious they are to sell or if they know the market. Avoid giving away too much at the outset.) To prevent this from happening.000 two years ago. but you feel cursed because you gave away too much. The sellers must be willing to come down a few thousand … Sue: Well. thus requiring greater concessions on both sides. of course. at minimum cost. Jay: No. They found one they both like that lists for $325. which can be very useful). Jay: No.000.000. Example 1 Jay and Sue are looking to buy a house in a specific neighborhood because it has a good school system. before someone else does. or 3) Make an unrealistic offer (i.000 three years ago). offer $150. is the most (or least) the other side will accept. such as last year’s price.000 and $337. Let’s low-ball them and offer $290.000—what they paid for it. then $320.” (You have won a settlement.e. particularly if you don’t know the other party’s “settlement range. That’s a fair price.Tactic 21: Avoid the “Winner’s Curse” It is often quite difficult to make the first offer.
000. was very impressed with their presentation.Sue: Don’t be crazy. they had offered $325. and the offer was based on fact: the prior negotiated price.000 for each of us—$6.500—half the difference! Sue: Great. as Sue had first suggested. the company president. Frank: Me too. Give us your lowest price. Lyle Foxworthy. Both parties felt that they made a good deal.) Bob: I’d do it for $3. Lyle: So what’s your price? Bob: Can you tell us what you have budgeted for this project? Lyle: No. would have suffered the winner’s curse! Example 2 Bob Myers and Frank Costello made a presentation to the top management of a paint company. (the next day …) Jay: They made us a counteroffer of $307. Exchanging Initial Offers 87 . They outlined how they would develop a new employee performance-appraisal system. since they had already bought another house. Sue: Then you do it.000. If. as requested by the human resource director. the sellers obviously would have accepted and Jay and Sue. (Bob and Frank meet privately to discuss the situation. That’s an insult! Jay: Well. The buyers were very motivated to sell. Let’s accept it! Conclusion Jay and Sue avoided the so-called winner’s curse by making a low (but reasonable) first offer. I can’t tell our realtor $290. then let them make a counteroffer. but who knows what they are planning on offering.000 total. realizing they offered too much.
000.Bob: Lets make them give us a price! (Bob and Frank return to the meeting room. What’s the cost? Bob: We want the job.) Lyle: Okay. but we can’t pay more than $18. I’m out of time. Bob: That’s fair. Lyle: Okay. That is all that’s left in this year’s training budget. 88 50 Practical Negotiation Tactics . They also ended up getting three times ($18. but we know you must have an amount budgeted for this and we are willing to do it for that amount.000) their minimum price of $6. and you two come highly recommended. What is it? Lyle: Why don’t you give us a price? Bob: We can’t use our daily rate because it might be too high for this work. and it would not apply. Conclusion Bob and Frank avoided the winner’s curse by forcing Lyle to make the first offer. We’ve waited long enough. We’ll do the job.000.
Skilled negotiators such as salespeople. be enlarged (see Tactic #27: Expanding the Pie). carefully evaluate an opponent’s offer. and do not flatly reject it because it is not your offer. Instead. Use a prolonged period of silence (see Tactic #29) to convey something at a strategic moment. and attorneys use tried and true tactics in giving and receiving offers. seeing no common ground. When the other party makes an offer. which is often the case.Stage 4: Making Counteroffers he heart of the negotiation process is the give-and-take. because if you do not at least appear to be flexible. but possibly of different values to your opponent. Also. T Making Counteroffers (The “Give and Take”) 89 . do not dismiss it because it is not all you want. labor negotiators. 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. and remain open to offers and options that you did not originally expect (see Tactic #30: Always Leave Room for Dessert). the other party. One or more parts might be acceptable or indicate movement from their previous positions. what appears to be an outer limit of the settlement range when the process starts can. This can produce a negotiated solution without giving up your priorities (see Tactic #28: Fixed Alternatives). In some negotiation situations. 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. Wait to counter (see Tactic #24) because this will give the opponent the sense that you are serious about bargaining. It has often been said that the key to negotiations is to be flexible (see Tactic #25). which would most likely weaken their position (see Tactic #26: Keeping Secrets). is likely to pull away from the table. Expect that the “total pie” will be different from what it was at the outset. Experienced negotiators seldom reveal their exact priorities and objectives. in fact.
finished his freshman year of high school at the beginning of June. and that he already made plans to visit with college friends on the East Coast for the two weeks after that. His brother Sydney. 19. gives your opponent little maneuvering room and might even prolong or damage the negotiations. 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. Option 1: No family vacation. Sydney. and quicker. Proposing only one solution to a problem. Jerry pointed out that he is expected to work until July 31st. The week he would be home would be the first week of school for Sydney. what say you. it looks like we can’t really plan a vacation for all four of us. In mid-June. 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. We have four options. I don’t want to give up on a family vacation that quickly. Dad: Wait a minute. except when you’re negotiating. 90 50 Practical Negotiation Tactics . Option 2: Mom and I go before Jerry leaves on August 1. so you can go without me. their parents began discussing a family summer vacation. Dad.Tactic 22: Propose Multiple Options The shortest distance between two points is a straight line. Jerry had already started his summer job. Example 1 Jerry. while it may be your best option. Jerry will be here. He planned on being home for one last week before having to pack up and go back to college. 15. Here’s the discussion that followed: Mom: Well. completed his first year of college and came home for the summer around the middle of May. Let’s see what we can work out. 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. Proposing multiple ways to reach your goal can get you to the same place.
And I miss orientation and start school the next day? Dad: That’s an option. but it should work out all right. Option 4: Jerry doesn’t return home the week between his visit to the Northeast and returning to school. It’s not perfect. Example 2 Joe is an attorney whose job responsibilities include managing three other attorneys (Andrea. Mom? Mom: Let’s do it. Sydney: Don’t I start school that week? I don’t want to miss school. so I won’t be able to meet up with you until Sunday. when we come home. but he can discharge employees for poor performance. Bob. Andrea considers Making Counteroffers (The “Give and Take”) 91 . actually. if it’s okay with Jerry. and Carl). we meet up with him that week for vacation. By proposing numerous options.Option 3: Mom. Then Jerry joins us until Thursday. and Sydney go to South Carolina before his school starts. Mom: Well. we could return home on Thursday and still get a week’s vacation. and one secretary in his litigation unit. me. If we started the vacation on a Thursday. Classes don’t start until Friday. Sydney: So what you’re suggesting is that the three of us are on vacation from Thursday to Sunday. they were able to make that happen and not interfere with or argue about the merits of each other’s individual goals. Sydney: Okay. Jerry: My friends and I have plans through Saturday of that week. one paralegal. you have a half-day orientation on Wednesday. Conclusion The goal was to have a family vacation. Jerry: Okay with me. Joe has no say in who was hired by the corporate legal office to work in his unit.
The attorney for the other side has agreed to give me the additional time to file it. we have a very big problem. which forced Joe to take action. Joe: Andrea. but it doesn’t solve the problem—nor is it the only problem. It is to the corporation’s benefit to address that problem here and now. If you don’t like the way I do my job. 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. 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. Andrea: You didn’t list moving to another unit as an option. Joe: That is certainly an option. I really see your options as follows: You can leave the corporation. you know that wasn’t an okay to settle. or you can work out a “supervision” agreement with me so that I can better monitor your performance. Andrea: Well. let me say that I’m handling the missed deadline on the pleading. Joe: Come on. so Joe took a “hands off” approach. you can agree to a demotion so that your areas of responsibility are lessened to that of a paralegal. In the last month. isn’t it? But I don’t think just moving you really solves the problem. Joe: That’s all well and good. 92 50 Practical Negotiation Tactics . and I don’t see why we don’t have more independence. Andrea: Wait Joe. Her job performance was acceptable. rather than to put it off on someone else or for some time in the future. Andrea. however. she made a two glaring errors in judgment. and resents any attempt by Joe to supervise her work. Andrea: We’re hired for our expertise.herself to be a professional. Before you start. You had no authority to agree to settle the Stites case without clearing it with me. To put it as bluntly as I can. you have a job-performance problem. We have a formal procedure that you just don’t like to follow. It was just a comment.
Joe: That could be an option. It also changed her attitude about being both a professional and a team player in a corporate office. But in fairness to our mutual employer. by Leigh Thompson. Andrea: Well. or I would advise your next supervisor to put you on a very formal approval program. lets talk to Bill about the move. Joe: That’s fine with me. in fact. and propose an acceptable alternative. If you are convinced that I have to undertake an “approval” program. I hope we can work it out. the needs of the corporation have to come first. Believe it or not. I want to stay with the firm. Andrea’s move and subsequent “approval” regime did. but it would still require some change in the way you work: either a demotion. then it would save face for me if it comes with a move to another unit. rather than my staying here. (Adapted from The Mind and The Heart of the Negotiator. improve her work performance. my goal is the same is yours: to create an environment where you can perform to your full potential. Conclusion Joe’s willingness to offer more than one solution gave Andrea a way to look at this unfortunate situation as an opportunity.) Making Counteroffers (The “Give and Take”) 93 . If that option is okay with you.
000. that’s $9. With distributive items. only those with polar-opposite interests that must be divided. if a buyer negotiates a $500 reduction of a contractor’s bill. Maureen: First. They have a fixed amount of money—$14.) Yes. It is used only when each side has several demands. we both want the sod. then the contractor has lost $500 in revenue. and a home theatre. thus making it necessary to find a middle ground on each. 94 50 Practical Negotiation Tactics . etc. Exchange. 3) distributive items (those items for which the two parties have exactly opposite interests. let’s see if there are any items we both want. Brooks: Right. This approach is an important tactic. They each agreed to list the items they want and then to negotiate whether or not they will be purchased. because it can speed up negotiations and produce a more desirable outcome. These items often involve money). (She looks over the list. Avoid assuming that you both differ on every issue (in which case you might be making unnecessary sacrifices) by first identifying items for which both sides have similar desires. Wow! We are off to a good start. For example. one person’s gain is another’s loss—zero-sum.). 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). and finally. Example 1 Brooks and Maureen Wilson have just finished building a new home. 2) exchange items (those that can be easily traded off—one item for another item of equal value.500. In essence. three strategies are used. They both agreed that this is the maximum they will spend on “extras” before moving in. Let’s agree to those things.Tactic 23: The “Win-Win” Approach (Identify Issues as Compatible. then those which can be easily traded. Let’s see. or Distributive) The “win-win” approach to negotiations is a basic tradeoff strategy of seeking maximum gains for both sides. the fencing.
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.# 1 Sod Item Cost $1.000 $500 $1. and we both get things we want.500 $2. I’ll trade your sidewalk and trees for my whirlpool bath.500 $500 $1. We have $1. Making Counteroffers (The “Give and Take”) 95 .000! Brooks: Good. which I’d like to keep in the bank.000 $1.000 $5. which takes another $3.000 $2. I’d like to spend some of it on lighting upgrades. These are all permanent immediate needs.200 $200–$2.000 $3.500 $5. that makes sense. Maureen: No. Can we split it evenly? Brooks: Okay. $750 for lighting and $750 in the bank.500 left.
Length of Contract 2. 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. This year. both sides exchanged lists of initial demands at their first meeting. 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 . management and union negotiators found that a “winwin” approach to negotiations worked well. Maureen and Brooks were able to identify those things they both wanted (the compatible items) and then trade some items of equal value (the exchange items). even in difficult years.Conclusion By taking the time to list all the items each person wanted and their cost estimates. finally agreeing to split the difference on the remaining amount (distributive items). Profit-Sharing 5. All items to be negotiated and their desired outcome for each item were put in writing for review. Wage Increase 4. During that time.
Subcontracting 12.6. Clothing Allowance Based on senior. Finally. signed. Paid Funeral Leave 9. Next. Next. one Making Counteroffers (The “Give and Take”) 97 . and the union clothing allowance proposal (#13) for the management funeral leave proposal (#8). and (#9) to continue the often-discussed no strike/no lockout provision.Voluntary ity 2 days Continue current provision 10% 10% No provision $50/month 3 days Continue cur. they began to trade off the exchange issues of similar value and nature. First. they accepted the union job security proposal (#12) in exchange for the management subcontracting proposal (#11). 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. They proceeded to draft the language to settle these issues. Because they held opposite positions on these issues. (#5) a new drug testing program. the management profit sharing plan (#4) was exchanged for the union overtime assignment plan (#7). they exchanged the economic issues of approximately equal cost: the union pension increase proposal (#2) for the management shift differential (#10).Compatible rent provision 15% Exchange 15% No layoff provision $100/month Exchange Exchange Exchange In their second meeting. At this point. Health Insurance Employees pay 20% Continue cur. Job Security 13. eleven of the thirteen original issues to be negotiated had been agreed to. and removed from the table. the negotiators agreed that they had compatible positions on three items: (#1) length of contract. Shift Differential 11. No Strike/No Lockout 10. Overtime Assignment 8.Distributive rent program co-pay Exchange Exchange 7.
98 50 Practical Negotiation Tactics . or distributive so that the negotiations can begin in an organized manner. Second. when you agree on the items where both parties have similar desired outcomes. if both parties start from reasonable positions. 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. you can use the process to settle many of the other issues on the table. They then identify each as compatible. when you exchange items so that each party achieves their desired outcome on one of the two. Sometimes the classic “split-the-difference” method is helpful in locating a middle ground. Both sides first agree that all issues to be discussed will indeed be listed and openly discussed. Conclusion This tactic is simple. exchange. 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. The tactic offers several advantages: First. A middle ground often must be found on each of these distributive issues if you are to reach an agreement. negotiations begin on a positive “win-win” note.side’s gain is the other’s loss. Third. but it can be very effective when a negotiation situation involves several issues.
I’m not interested in a curfew. you know. They agreed on which part of the room each would have. Example 1 Jasper and Rob met when they were assigned to the same dorm room their freshman year in college.Tactic 24: Wait to Counter As the negotiations begin. they decided to establish “room rules” so that they would both be comfortable with the room assignment. and from a strategic standpoint. It is especially important that you do two things: take your time before rejecting any offer from the other side. The final issue had to do with “lights out” and quiet times for studying. so he wants a quiet room late at night. Waiting a respectful amount of time to counter. and can help you reach your goal. This isn’t high school. and refrigerator. Since they didn’t know each other well. each side is expected to put an offer on the table. Rob: Wait a minute. 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. so I can study. do not offer a counterproposal right away. Let me finish. and studies late into the night. and on what would be considered acceptable “sharing” of each other’s junk food supplies. Jasper studies during the day and early evening and likes to stay up very late watching TV and visiting with friends. last item: I’d like it quiet in the room at night. even if you aren’t going to accept their offer. Mutual respect must be part of the negotiation process. stereo. the location of the TV. So when’s a good time? Jasper: (without hesitation) No way. and looks like you are belittling them. Rob: Making Counteroffers (The “Give and Take”) 99 . Here is how the last issue was handled: Okay. Jasper: Finish or not. will make your opponent feel good about the process. A counterproposal delivered too quickly tells the other side that you haven’t or won’t even seriously consider their offer. Rob stays busy all day and evening with other activities.
Example 2 ABC Company’s management was being restructured and compressed in order to facilitate its new “just-in-time” manufacturing philosophy. is all I’ll consider. c) a formal “meeting” with plant manager if the matter is not resolved in 10 days. curfew on TV and other noise every night. and that’s not negotiable. but changed his mind when he saw Jasper’s attitude. and that’s it. b) written complaint to a floor manager if the matter is not resolved in 5 days. and d) a hearing with company owner if the matter is not resolved in 20 days. Failure of both young men to allow one another to have their proposal considered caused the relationship to break down. Under the restructuring.m. Jasper: (without taking a breath) At best. No agreement was reached.) Listen. Rob: (there is no hesitation in this voice) No. The union contract required that management renegotiate this change in the grievance procedure with the union. The appeals procedure would have to be altered to reflect the restructuring. the positions of non-union crew leader and floor manager would both be eliminated. midnight during the week is the only thing I’ll consider. 10:30 p. Neither side anticipates that there would be 100 50 Practical Negotiation Tactics .Rob: (Rob was about to suggest midnight on Mondays through Thursdays. employee grievances had to go through four levels of supervisory review and appeal: a) verbal complaint to the non-union crew leader. Rob: I’m going to look for a new roommate!! Jasper: Fine!! Conclusion It was clear that neither Rob nor Jasper was seriously considering the requests and suggestions of the other person. Jasper: Midnight. and the union foreman would report directly to the plant manager.m. Under ABC ‘s contract with the union. I want a 10:30 p.
) We’re just not happy that you are proposing a Making Counteroffers (The “Give and Take”) 101 . rather than go on to appeal it to the company owner. After initial pleasantries were exchanged. he/she can take the grievance to the plant owner for a hearing. If the union foreman felt that the grievance had merit. and began the negotiation session concerning the grievance procedure. We’ve got a couple of alternative models for you to consider. the employee and the foreman would meet with the plant manager and attempt to resolve it. An aggrieved employee can make a request for a meeting with the plant manager. this redraft is a very simple change to the contract. The redraft is simple and straightforward. We think that this is an opportunity to eliminate some of the adversarial aspects of the grievance procedure. Company: (rather abruptly) Let’s not drag this out. no one can complain about that. Union: As you know. Union: Hold on. We’ve simply eliminated the first two steps. We’d like you to consider the plant manager’s role as a problem-solver. Company: (no hesitating) Trust me. but to dictate. (Note: An attitude change sets in. rather than as a judge on the merits of the grievance. The union was prepared to accept the plant manager’s position as final. 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. Union: You obviously didn’t come here to negotiate. 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. Certainly. and everything else stays the same. In fact. and I’m certain your members will be okay with it. ABC Company’s negotiator explained the management changes soon to be implemented. Company: Here’s the new draft of the grievance procedure.any objection to the change. because those management layers are gone. We just cut out two steps. our grievances often signal to management that there are real problems on the shop floor. If in 20 days he/she has not been satisfied.
and actually accepted a three-step procedure. the two parties did meet again. 102 50 Practical Negotiation Tactics .two-step grievance procedure instead of a four-step procedure. rather than in the 35 days the current system provides. and we’ll strike if we have to. to prevent any change! Company: (surprised) What? Why would you object to this? Your guys will get a final decision in 20 days. Union: We’re very serious. After a cooling off period. This time. You can’t be serious. We’ll see you on the picket line. Conclusion ABC Company’s failure to take adequate time to consider the union’s offer or even act as if it was considering the offer prolonged the negotiations unnecessarily. the company entertained the ideas the union had tried to propose before.
and now have a new baby girl. Making Counteroffers (The “Give and Take”) 103 . The couple used to have Thanksgiving dinner at both families’ homes. Sue’s family (parents. Next year. They’ve done the research. Nancy: Sue. you can adjust your demands or goals to include such new ideas. Be open minded. If you are flexible. Sue and Bill decided that they had to begin alternating their Thanksgiving Day visits between the two families. their spouses.m. Mom says you. Even before the baby’s arrival. and the baby aren’t coming for Thanksgiving dinner this year—that you’re going to Bill’s parents’ house. the Thanksgiving marathon caused problems: They would have to leave Sue’s family’s celebration before the “traditional” after-dinner trivia games (which Sue really enjoyed). Example 1 Sue and Bill have been married four years. and we’re really not able to enjoy either one. established goals. Sue’s sister Nancy called her to talk her into coming anyway. Sue: Yes. 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). one sister. successful negotiators remain flexible because new solutions to old problems often surface during a negotiation.Tactic 25: Be Flexible A negotiation begins with both parties having some idea of where they hope to end up. Bill. and do not dismiss something said by your opponent just because it came from the opponent. Bill’s family (parents. Bill’s family won. But after the negotiation gets started. four brothers.m. 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. and at least five aunts and uncles) ate around 7:00 p. two brothers. and identified the range of options they feel comfortable with negotiating. and Sue called her mother to let her know that they would not be coming for Thanksgiving dinner this year. it’s just too much to do both. two sisters. we’ll get to our side.
Everyone in Sue’s family liked the idea of celebrating on the Friday after Thanksgiving. we’ll come to Mom’s. 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. I thought of asking Mom if she could move dinner up to noon or so. either. it’s okay with me if you can sell it to everyone else. Nancy was able to accomplish the real goal of the negotiations—to make sure that the holiday would be celebrated with the whole family present. Sue: Next year. Conclusion Nancy’s goal when she called Sue was to talk her into coming to their Mom’s Thanksgiving Dinner on Thursday.Nancy: It just won’t be right without you guys. but then I realized that the rest of you already go to your in-laws earlier in the day. By being flexible. Nancy: If we keep the time at 5:00 p. but she won’t tell you. Nancy: We’d make it special by all of us being together. she suggested a unique alternative. When that goal looked out of reach. Thanksgiving is Thursday. I know that I would rather not do two Thanksgiving dinners on Thursday. I mean. and it became the family’s new tradition. Mom’s very upset. Sue: I don’t know. the holiday will be over. Bill won the coin toss for this year. Nancy: I’ll let you know. There’s nothing “special” about Friday. Celebrating the next day seems odd.. I bet everyone could make it on Friday. So that doesn’t work. 104 50 Practical Negotiation Tactics . Nancy: What if we did Thanksgiving on Friday? Sue: What? Nobody does Thanksgiving on Friday—that’s un-American! Anyway.m. some people have to work on the Friday after Thanksgiving.
a non-profit organization for orphaned children. They are meeting with the city to ask that the land be donated by the city for the project. but we need some assurance that you will be able to build and operate the orphan home at that location. Estimates for building a new orphan home ranged from $12–$15 million. we’re committed in theory. Each year.Example 2 Kids’ Home. City: Can’t you borrow the money from a bank to build the facility. and raise the money to pay it back? And can’t the foundation grant you money on an annual basis? Making Counteroffers (The “Give and Take”) 105 .000 a year for operations. We’re hoping to get a commitment from them to build and help fund the operations of a new facility. we hope to break ground early next year for the new orphan home. Unfortunately (for Kids’ Home). City officals: We can probably give you the land for free. Kids’ Home: That’s why we brought the foundation’s officials with us. Kids’ Home hoped to get $500. but the principal of the fund can’t be touched. 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. had been negotiating with a foundation to become its major benefactor for a new building and to supplement the organization’s annual operating budget. Foundation officals: Oh. 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: As you know.5 million is available for distribution to numerous charities. The foundation has a substantial endowment fund. We only have maybe $2 million a year to put toward this charity. the interest income of around $6. depending on the cost of the land. We need the city’s help by allowing us to get the city land donated to us (for free). Kids’ Home is also hoping to get the city to encourage the foundation to commit to full funding of the building project.
If we borrowed $15 million at 10% interest. Foundation: City: Foundation: Kids’ Home: Conclusion By exploring alternative financing plans suggested by the city. but we’re willing to look at it. 106 50 Practical Negotiation Tactics . 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. We’re a nonprofit group. We probably would not be able to participate. and really taxes our ability to raise funds. it could end up costing double that amount. We’re not familiar with that program. And “donations” aren’t a very safe collateral for any bank that wants to loan us money. I’ll contact the state tomorrow. Why not ask the state to issue no-interest bonds? It can do that for non-profit organizations. We wouldn’t want to make such a commitment to a bank.Kids’ Home: Borrowing the money gets very expensive. We’ve never committed our funds to pay back a bank loan. 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.
The Jones’ two older children—girls in their early 20’s—often had friends over on Friday and Saturday nights. However. Successful negotiations depend on trust. you should be careful not to misrepresent your position to such an extent that your opponent will feel that you have lied. each side has to know generally what each other wants to accomplish. you might not want to reveal all of your priorities at first. Example 1 Soon after the Jones family moved in next door to the Smiths. it is not acceptable to lie. The Jones’ two younger children—boys in their mid-teens—hit baseballs into the Smiths’ yard and scared the Smiths’ dog. and asked the officers to cite the Jones kids for parking too close to a corner. the neighbors began to have problems. and we would very much like to talk about how we can resolve these issues. and often took up all the space along the street in front of the two houses. They asked to meet with the Smiths to talk about these disagreements. Mr. and often lasted until 2:00 or 3:00 a. the Smiths could count on parking their car directly in front of their house. yet not reveal all of your goals and objectives. It is perfectly acceptable to say that you are not ready to reveal certain things. The Jones family suspected that the Smiths called the police. But the Jones clan had four cars altogether. Making Counteroffers (The “Give and Take”) 107 .Tactic 26: Keep Few Secrets One of the most difficult skills to master in a negotiation is how to be candid. Smith: We don’t know what you’re talking about. and you probably won’t identify your throwaway items or tell your opponent your bottom-line. In order for a negotiation to be successful. These parties could get rather loud. The Jones family let their tree branches hang over the Smiths’ back fence and rub against the Smiths’ garage roof. At the same time. Before the Jones family moved into the neighborhood. Jones: We’ve obviously gotten off on the wrong foot. Mr. The Smiths called the police to complain about a late-night party.m. and trust can only be established if all parties interact truthfully.
Almost every day. And the music is to be off at midnight. the late-night parties are a problem. a lot of problems. I guess. Mr. And we’ll make sure none of our cars are parked in front of your house. (A week later. Jones: I wish you had mentioned that the last time we talked. In good weather. and not in the back yard. Smith: Yes. the Jones were visited by a city inspector because of a complaint from the Smiths about the tree branches hanging over the fence and brushing against the garage roof. Jones: Well. fine. they kept it. It is really very disturbing. At our age. If you can tell us all the things that we have done or are doing that have caused you to be inconvenienced. Smith: No. Smith: Well. since you’ve asked. we would like to work out some solution. we’re good now? Mr. Mr. So. Smith: You know that your boys are causing our dog. Jones: Okay. Mr. Smith: Well. we thought you might have called the police about our kids’ party and our cars. that wasn’t us. but we do know that someone has complained. if they are outside.) 108 50 Practical Negotiation Tactics . Is that everything now? Mr. the next time the boys were out playing and the ball came into the Smiths’ yard. Mr. Jones: We’ve already talked to the girls about the parties. In spite of the Smiths’ assurances. we’d like to be able to park our car in front of our house.Mr. yes. I’ll talk to the boys and we’ll make sure they play baseball in the park. they’re hitting baseballs into our yard. then they’ll need to come in at midnight so that their talking doesn’t disturb you. Also. Muffin. we have a problem walking long distances in bad weather. and they won’t be having friends over more than one night a weekend from now on. and was met with the following: Mr. Jones came to see what the problem was. Mr.
S. Neno has been negotiating the sale of its business to a British company. the British firm will walk away from the deal. and the deal is close to being final. the tree was clearly over the fence. The union knows that the company is up for sale. Making Counteroffers (The “Give and Take”) 109 . The union laborers walked off the job on Friday. Example 2 Neno Enterprises is a shipping company with extensive global operations. Jones: (at the Smiths’ door. Japanese companies often do not “recognize” labor unions the same way U. but Neno cannot tell the union this. Union officials are afraid that a Japanese company might purchase it. You could have seen that yourself. have labor unions. But we didn’t call the inspector. You obviously don’t want to be “good neighbors. Its local headquarters has a union to handle its international shipping.Mr. The Jones’ effort to sit down and negotiate the problems with the Smiths were thwarted by the Smiths’ reluctance to put all of their concerns on the table and their failure to admit that they were the ones who made the formal complaints. or European companies do. although none of the facilities outside the U.” Forget all we’ve agreed to do—we’ll just enjoy the use of our property. Why didn’t you tell us? We can’t read what’s on your mind! Mr. Smith: Well. Mr. irate) I can’t believe you people called an inspector on us.S. Neno’s president and the Union representative met to discuss the walkout. Unless Neno can get the Union members back to work on Monday. Jones: Sure. you’ve said that before. because they didn’t like a grievance decision. The British insist that a very strict confidentiality provision be part of the negotiating process. or the deal is off. and too bad for you! Conclusion The disagreements and unpleasantness continued until the Smiths finally sold their house and moved into a condominium. We would have fixed the tree if you had asked.
do you? Union: No. this is a legal strike under the contract. And one company that is interested has a really good track record on expanding the businesses they buy.Neno: You know this is a wildcat strike and that it is in violation of our contract. But I have to have everyone back on Monday. I can’t really be more explicit than that at this time. no harm-no foul. Our guys are prepared to stay out a lot longer than Monday. Therefore. Neno: Look. Have the guys back on Monday. If everyone is back on Monday. If that’s going to have a bad effect on your being able to sell the business. we will resolve it to your satisfaction by the end of the day. Neno: Look. I know it’s not news to you that this business is up for sale. it will impact our marketability. is still a labor shutdown. We’ll meet with all of the parties on the grievance first thing Monday. 110 50 Practical Negotiation Tactics . I’ll forget all about the strike. whether it’s for one weekend or a week. Neno: All I’m saying is that there is a difference. You really don’t want to do that. any interruption in our shipping could affect how these buyers look at our business. Union: We think that the grievance decision affects our wages. I’m certain that if we can sit down and talk next week. But if your guys are out past Sunday. and if the guys are back on Monday. we don’t. We can’t put up with the kind of decision we got on our grievance. Union: What aren’t you telling me? A labor shutdown. maybe by next Friday or the week after that we’ll have our guys back to work. I promise you. I think it already has. so the union won’t be hurt by the buyout. Anyone who buys the company will have to honor the contract we have. But we also need to make it clear that we expect you and whoever might buy your company to take our contract seriously. If they do come back. We’ve not had a labor shutdown in 20 years. You don’t want to mess up our negotiations. the slowdown as a result of no one working Saturday and Sunday won’t be noticeable. I need your guys to come back to work on Monday. It’s not the time to have one. then there’s probably no harm done.
But I need to tell my guys that this is important to them as well. I’m going to go along with you because you’ve always dealt straight with me. while the grievance was being resolved.Union: It’s that important to you? Neno: Yes. but the British firm will allow them to organize at their foreign locations. Making Counteroffers (The “Give and Take”) 111 . as well. If I could. He told him that it would mean that the union would not only keep its jobs here. I can. the sale was finalized. Union: Okay. I would be more specific. Because the parties had dealt honestly with each other in the past. Union: Okay. we’ll be back to work on Monday. and it’s that important to you as well. Neno called the union negotiator in and briefed him on the sale. But I can’t. Can you assure me of that? Neno: Yes. was the right decision to make. Neno’s decision to respect his confidentiality agreement and simply tell the union that he couldn’t disclose all the information. Conclusion On Monday. the union was willing to trust Neno—even though he couldn’t tell them everything. rather than make up reasons.
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 for advertising. I’ll approve $15. but the company president does not share your optimism on this program. that is enough time. I’m not going back to him again to discuss this program. B.Amber: row before your basketball game. Amber resisted the chore she hated.000 budget! I need at least $20. Roberto: But I need to start the direct mail and newspaper ads within two weeks. But when her mother laid out the schedule and gave her alternatives. but I will cut your travel budget out completely. keeping her Saturday free. I have three hours.000 for advertising. she chose the one she most preferred. but no TV or anything until it’s done! (pause) Okay. Felipe: (Roberto’s supervisor) Sorry. Roberto: Well.000. I can accept B. Take it or leave it. Felipe: Sorry. or C. I can’t help. I’ll approve $15.000 in the budget. or we lose a whole year.000). Three. Clean it after your game. Felipe: Well. At least this way the program will have a chance to succeed! 116 50 Practical Negotiation Tactics . and clean it. I’ll find a way to do without one part-time person. Example 2 Roberto: I can’t properly advertise this new program with a $5. (long pause) Felipe: Let me give you three options: A. Use the $5. Roberto: But it will never generate enough interest if no one knows about it. Conclusion At first. but I will cut your staff by one part-time person (or $15. I’ll do it now.
would enable him to adequately promote the program.Conclusion Felipe was willing to think “outside the box. which was his goal. thus achieving his goal of not having to ask for a larger budget.” He offered Roberto three alternatives of equal cost. Roberto believed. Making Counteroffers (The “Give and Take”) 117 . One alternative.
After a few minutes of silence. received a glowing report from her boss on her job performance. I think you would agree with me that I have performed well above expectations this past year. Example 1 Susan. I have to tell you that while I appreciate what you have done for me. Susan knew that she was considered a valued employee and that her boss would want to do the best he could for her. She was determined to hold her ground for at least a 13% pay increase and a promotion. If his opponent cannot agree to the demand but does not want to end the negotiations.Tactic 29: Prolonged Silence When negotiations have hit a critical stage. I very much appreciated the fair job performance review you gave me. and 118 50 Practical Negotiation Tactics . I am very disappointed in the company’s decision not to promote me and to limit my merit increase to 3%. and the annual merit raise she was getting from the company was the same 3% other employees were receiving. You know my commitment to this company. inviting a response. Susan: Mr. he can make an open-ended statement. Here’s how the negotiations went. Jones. the promotion had not yet been approved. Jones: I certainly do. but one side comes back with a non-negotiable demand. Susan: I hope so. This should have resulted in an automatic promotion and a sizable pay increase. 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. nearing her third year with the company. Unfortunately. The negotiator for the other side says nothing. the negotiator who feels the most uncomfortable with the silence will fill the gap and most likely make a concession in order to get the other party to speak. you are a valued employee. 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. It was 16% less than she had been led to believe she would be getting.
and I’m sure management will agree. (says nothing) If I can’t get that pay increase approved right now. because I feel my future with the company might be at stake here. Once he acknowledged that both items might be awarded sometime in the future. it could help. but a pay increase of that size might be more difficult. but I don’t think management will be willing to give you an additional 10% pay raise AND a promotion. Conclusion Mr. of course I will be glad to do that. (says nothing) Or. Well. maybe we can talk about the promotion later in the year.or three-year period. the company’s refusal to grant them now was a harder position to support. and I think that I really haven’t been dealt with fairly. I could probably find a way to phase it in over a two. I really want you to stay with the company. Jones to continue to offer solutions. and sell it to management that way.Jones: Susan: Jones: Susan: Jones: Susan: Jones: Susan: Jones: that I deserve more consideration. if management can see their way to giving you the pay increase now. Promotions of this type are all but automatic around here. Making Counteroffers (The “Give and Take”) 119 . I must ask you to try to get both. Susan’s silence prompted Mr. Jones went to management and convinced them that they should give Susan the promotion and the 13% raise. Okay? (says nothing) Let me check it out and I’ll get back to you. If there is some flexibility in your request. I suppose I could get the promotion approved with the proper presentation. I would very much appreciate it if you could ask the company to reconsider.
and until she does. Mr. The term of the original agreement was nearing its end. her plans really don’t have any bearing on these negotiations. and representatives of the elected officials of the two towns were meeting to renew and possibly expand the agreement. Mayor) said that she was considering running for office. The office she was thinking about was the office held by her counterpart in the neighboring community (Mr. by saying that she might run for Chair. My bosses might not have been inclined to expand the agreement anyway. This is how the negotiations went: Town Council Representative: Well. Also. the people Madame Mayor currently 120 50 Practical Negotiation Tactics . I don’t think it’s a problem.Example 2 Two local governments entered into a tax-sharing arrangement in order to provide joint services to citizens in a more efficient manner. Town Council Chair’s representative believed that the ability to expand on the agreement was critically wounded by the uncertainty as to which office the mayor might seek. The parties agreed to continue the previous terms of the agreement. The mayor. He decided to push for a simple renewal of the original terms. Town Council Chair). but now they’ve got to ask what Madame Mayor’s motivations are. She has not decided what she’s running for. Town Council Representative: I think you’re wrong. and were trying to settle on new and expanded areas when one of the elected officials (Ms. has colored these negotiations. 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 end of the agreement coincided with the election cycle for the two towns. The mayor’s negotiating representative wanted to complete the negotiations on the expanded agreement. but the officials had hoped to complete the negotiations prior to anyone involved announcing for office. Mayor’s representative: No.
represents have to worry that her desire to switch governments might taint the negotiations. and the agreement was renewed with no new provisions. He either had to end the session or figure out what to say to reengage the other side. the Town Council representative’s position prevailed. Mayor’s representative: Well. I don’t know what her reaction will be. I’ll go back and tell Madame Mayor your position. I think we really have to drop back and just propose a renewal of the tax sharing agreement without adding any new items. Making Counteroffers (The “Give and Take”) 121 . Town Council Representative: (silence) Mayor’s representative: I would think that at least the proposals that don’t involve budget changes could be pursued. In the end. the Town Council’s representative left the mayor’s representative with no room to maneuver. Conclusion By remaining silent. Town Council Representative: (silence) Mayor’s representative: I think it would look very bad for both of us if we spent all of this time negotiating and we don’t end up with anything new. Town Council Representative: (long silence) Mayor’s representative: (after an uncomfortably long silence) Well. I hate not to attempt to add some additional areas to the agreement.
had redirected the brook further into her property. Madeline. One day. The brook 122 50 Practical Negotiation Tactics . I have a problem. She discovered that a rock barrier. Madeline built a gazebo about 500 yards from the brook. Your rock barrier has sent the brook onto my property and it is too close to my gazebo.” Avoid making that “necessary concession” too narrow: It should be large enough for both of you to step into comfortably. in a small clearing. The reason I built it was so that I could protect my patio. and began to renovate it as a home and a pottery shop. You will have to remove the rock barrier. Having an iron-clad demand probably won’t give you enough room to reach an agreement.Tactic 30: Always Leave Room for Dessert Negotiating is the art of give-and-take. Example 1 Madeline bought an old farmhouse outside of a small town. or we will be at an impasse. Obviously. when one of you might say. Madeline: Hi. you should always enter the talks with a good idea of what you are willing to agree to. She traced the brook back along its course to see why and where it had changed its path. which an upstream neighbor had built. after the gazebo had been there for about five months. she noticed that the brook came within 100 yards of it. Joe. As was sometimes the case in these parts. She went to discuss this problem with the upstream neighbor and had every intention of demanding that the barrier be removed immediately. “I have to have this. Neighbor: Well. the brook was the property line separating her property from a neighboring farm. the brook and rock barrier are on my property. The property came with three acres of forest alongside a meandering 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. 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. It calls for compromise.
Madeline: Well. and allow the neighbor to protect his home. It might not be necessary to make such a dramatic change. if the brook is redirected. By expanding the range of options available to resolve the dispute. Madeline: But by diverting the brook. I’ve lost 400 yards of property on my three acres. what I need is to protect my property line and my gazebo. I couldn’t have that. you have not only threatened my gazebo. and return everything as it was. I can’t have the brook in my house. Then. restore her property line. but I don’t know what I can do about it. Making Counteroffers (The “Give and Take”) 123 . Conclusion Madeline’s objective when she met with her neighbor was simple: Have the rock barrier removed. Madeline was able to protect her gazebo. What if you removed the barrier for a short time. This will put these houses right next to me. When she found out that this was not going to solve her neighbor’s problem. but you’ve changed the boundary line of my property. I won’t remove the rock barrier. I ask that you allow an expert to suggest the best way to provide for the diversion of the brook to protect your house and my patio. I understand that. she widened her range of options. 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. She left room for a compromise. at least I’ve maintained my property line. 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. Also. Neighbor: I can do both of these things. Madeline: Yes. but only if I have a clear understanding with you that the barrier will be rebuilt to protect my house. Neighbor: I’m sorry. which enabled her to achieve her goals.
000 (which we reasonably should have expected to pay in premiums) in the pension account now. This would be a better benefit in the long run.000 figure. As best as we can tell. 124 50 Practical Negotiation Tactics .000 to cover the premiums for dependent coverage.000. the discussions of the employee benefits package bogged down on the issue of health insurance costs and pension benefits. Over the next five years.000. Everyone was afraid that the dispute would cause an impasse and a possible strike. Over the last five years.000. The airline industry is in a slump.000.000. as it has always been. The projections for the next five years were that these costs would increase to about $1. Pilots: So you are projecting that the increase in dependent coverage premiums will average $200.Example 2 The contract negotiations between the pilots and the airline had been going pretty well. This is just a cash-flow problem that your members have to understand. The pilots want dependent coverage paid for by the company.000 a year over the next five years? Company: Yes. With long-term planning and investments. The company wants to trade paying for dependent coverage for better pension benefits. we know that health insurance premiums might skyrocket. you are taking a risk on the costs increasing. and we know that with this new contract term of five years. the company can make your pensions much better. with all wage and operations issues resolved fairly early. And we cannot afford that $1.000. However. and are willing to keep pension benefits the same. what they really need is for you to cover the costs of dependent coverage. then the pension benefits overall will increase by $10. that would be the minimum increase.000. Pilots: Look. the airline paid a total of $200. and the premiums for health care just keep going up. Company: This could not come at a worst time for us. dependent coverage could cost us $1. But only a few of our people are close to retirement age. If we invest the $200.
It initially believed that the only option was to put that money into pension benefits. Are you willing to risk not having an opportunity to increase pension benefits? Pilots: Yes. we are.000 to either pay one year of the premiums. that would be worth it.000 actually carried them through four years. however. and the pilots knew what to ask for when the contract expired. Pilots: Since the concern is about agreeing to a 5-year commitment without knowing the increases we might have in health insurance costs.000 available. The dependent coverage is more important to us now than the pension benefits. or invest in the pension plan? Company: Yes.000? Once the cap is met.Pilots: But you do have the $200. The pilots expanded the range of options. with a cap of $200. If we can get two or even three years out of the $200. then those funds will not be available to invest in the pension plan. The health insurance market stabilized. by agreeing to let the company cap its exposure for dependent health coverage. can we agree to a year-to-year agreement on dependent coverage.000 the first year on the premiums. so the decision to be flexible was a good one. Company: Then it’s okay with us. the company will not be expected to give us this benefit.000. Making Counteroffers (The “Give and Take”) 125 . Company: If the company spends the $200. The $200. if they were that high. Conclusion The company was committed to limiting its exposure to $200.
Buyer: Yes.Tactic 31: Cut Salami Slices One way to overcome anticipated or exhibited resistance to a proposed cost is to cut it into smaller units or “slices of salami.000 for a Volvo? I bought the one I’m driving for $19. Phrases such as “for only pennies a day.” “affordable weekly payments.000 car. but the Consumer Price Index has not gone up 150%—nor has my paycheck! Saleswoman: So. Saleswoman: I’ll be right back. if I can give you this car with a $300 monthly payment. what monthly payment did you have in mind? Buyer: More like $300 per month. and compare it to your strategic objective. do you want to look at something else? Buyer: No. $45. I love this car. Buyer: Way too much! Saleswoman: Well. I guess it would be around $600 per month. I recall the day you drove it out of here.… (20 minutes later) Saleswoman: So.” 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. Saleswoman: With your 740 in trade. it’s a deal? 126 50 Practical Negotiation Tactics .” and “low monthly rates” are examples of the salami tactic. If you are on the receiving end of such a tactic.500! Saleswoman: Yes. I just can’t imagine the monthly payment on a $45. Example 1 Car buyer: What. but that was several years ago. be sure to add up the total cost.
do you want Disney? Yes. (looks at the numbers) That looks good. it will be a five-year lease. and payout slices to reach the total price she wanted.000 price into “slices” the buyer thought reasonable. as promised.00 per month for your service.99 per month. I can’t afford that much.Buyer: I don’t see how you can do that. You can do that. Sure. Instead of a three-year lease. Example 2 Cable representative: Owner: Cable representative: Owner: Cable representative: Owner: Cable representative: Owner: Cable representative: Owner: Yes. but let me see the numbers.” She decided to cut the $45. Saleswoman: Simple.00 per month.” she had him—she worked around the $300 slices. Great! So.00 per month. and added the trade-in. I can’t discuss another client’s account. Let’s see. Making Counteroffers (The “Give and Take”) 127 . But my neighbor pays $39.000 down and $300 a month! Conclusion The saleswoman knew the buyer was suffering from “sticker shock. can’t you? Buyer: Yes. down payment. Once the buyer volunteered that $300 was an affordable “slice. you can get the Disney channel for only $5. I can afford $6. do you want HBO? How much? $5.000 down. but what else must I buy? Only the basic service for $8. with your car and $6.
Conclusion The owner thought his neighbor’s service at $39. 3. and SI 1.00 per month. What about the music package? Yes.Cable representative: Owner: Cable representative: Owner: Cable representative: Owner: Cable representative: Owner: Cable representative: Owner: Cable representative: Owner: The Sports Combo–ESPN 1. Any other kids’ channels? Yes. Disney is for the kids! The sports channels are for me. Yeah. I really want the sports channels. 2. and probably felt much better about the total negotiated package because it was presented in modest individual slices.00 a month.00! Why? Because he judged the per-slice price to be reasonable. The total is $38. 2? How much? $8. they asked about the Cartoon Network. Great. Okay. we had that before. That’s another $5. Thanks. That’s $5. instead of one total amount. 128 50 Practical Negotiation Tactics .99 per month. but he agreed to six “salami slices” for a total of $38.00 per month was far too much.00. and my wife wants the old movies. But that’s all! Then we’ll hook you up on Monday.
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). angry negotiations. Humor might not look like pressure. but in tense. and the use of humor.Stage 5: Applying Pressure P ressure tactics are generally used in situations where one side firmly believes that it holds the upper hand or simply convinces the other side that it does. the traditional car salesperson might tell the buyer. so are you ready to make a deal? This might convince a few buyers. today. In some cases. Tactic #36 (The Element of Surprise) can catch an opponent off-guard and cause stalled negotiations to move forward.m. “I can only guarantee this price until 6:00 p. Tactic #35 (Applying Excessive Pressure) is a similar tactic that should also be used with caution. Tactic #33 (The Bluff) is a classic pressure tactic. an unexpected element of humor can break the tension and encourage a person to calmly get back to the issues. turned off by the tactic. it is effective. which can be successful if the opposing team has two or more members who hold different views of an issue. and it can destroy your credibility. For example. 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. but it can be used effectively when one party clearly has an edge. Applying Pressure 129 . but others will walk out the door. It should be used with caution: It can end negotiations immediately. Other less-obvious pressure tactics include Tactic #37 (Divide and Conquer). When both sides believe that each has equally strong positions. pressure tactics should probably be avoided. however.
Lacey: I know. The two couples used the sailboat a lot the first couple of years. big news! I’ve been promoted. in fact. And we don’t want to be unfair. Example 1 Don and Abby went in on the purchase of a sailboat with their friends Lacey and Chloe. but Don. We’d hate to give it up. but it is not a good idea to exaggerate what you are offering or what you are giving up. he and Chloe wanted to buy out Don’s and Abby’s interest. Abby really loves that boat. and we need to talk to you about how we can buy you guys out. Lacey: Don. and they will weaken your credibility. together and separately. In the last couple of years. getting a divorce and each moving away (and would have no more use for the sailboat). 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. I don’t know. Chloe and I would like to take the sailboat with us. When Lacey found out that his employer was transferring him to another city farther down the coast. Lacey and Chloe didn’t know that Don and Abby were. and we’ll be moving south in the next month or so. It 130 50 Practical Negotiation Tactics . Don and Abby now use it less and less. Your opponent will consider you untrustworthy and might even be insulted by your attitude. boat prices have really gone up. Although I do think there ought to be some consideration for the two years you had use of the boat. Don: Wow. I think Chloe and I would be willing to pay more than just the money you guys put into it. I can’t tell you how many times Abby has said how happy she is that we have the sailboat. Lacey. Such exaggerations are easily revealed or uncovered. Don: Absolutely.Tactic 32: Don’t Exaggerate It’s always acceptable in negotiations to put your best case forward and present your position vigorously.
and I’ll get back to you. I’ve been thinking. I have big news too. (Around the same time. and we’re moving farther south. the boat has depreciated. which you would have to share if you want to retain half-ownership.) Lacey: Don. Abby told Chloe about the divorce and about how she never wants to see the boat again. I think it would be fair to pay you and Abby half of what you originally put into the boat for your 50% share. though it’s not so happy. (After Lacey and Chloe had a chance to talk. Applying Pressure 131 . Don: Lacey. big news!! Don got his promotion. Lacey and Don’s negotiations changed considerably.is just about the most important thing we own. After all. We’ll be leaving here for the Midwest. Let me talk to her. he likely would have found himself in a stronger negotiating position. but separately. I was afraid something was going on when you all-butstopped joining us on the boat. It just reminds me of how happy Don and I used to be. I’m sorry. If Don had not exaggerated the importance of the boat and dealt with Lacey honestly. I thought you understood how important this boat is to Abby. Conclusion Don got a lot less than he could have from Lacey because he found out that Don exaggerated the importance of giving up the boat. Abby: Well. Lacey: Cut it out. Don and I are getting a divorce. I’ll be glad never to see it again. and neither of us put much in for upkeep. Don. It’s about time now for some major investment. I’m surprised by your attitude. Abby: That boat. Abby is having this conversation with Chloe) Chloe: Abby. Chloe: Oh.
I think you’ll have to agree with me that wage increases in this next contract will not be available. When I go to the bank for the Letter of Credit to keep our cash flow uniform while we switch from one type of production line to the other. The current stock price is the lowest it has ever been. I’ll be looking to you to make some major wage concessions on this upcoming contract. I’m afraid that with this current information. And as you know. Here’s how these negotiations went: Company president: Well. we will need to make drastic cuts in our operating costs just to survive. and that the economy is strong. Telling me there’ll be no wage increase and asking for wage concessions now is a little premature. the company president decided to use the stock price as a negotiating tool during the current union contract talks. but this has been such a crazy situation. the situation in the stock market is not good. our production line changes at least three times a year. I’ll be going back to them as soon as next week. they will make their decision based on a review of the stock price that day. I can’t see how today’s numbers really impact the long-term profitability of this company. Company president: Well. I’m telling you the stock price is having a huge impact on us already.Example 2 Aimes Manufacturing had experienced major ups and downs in the price of its stock for the last two years. And while these fluctuations have little to do with the health of the company itself. in this global market. I read in the papers every day that the market is still strong. Union negotiator: The stock price might be down right now. I’ll have to show them 132 50 Practical Negotiation Tactics . in fact.
the union checked into the Letter of Credit transaction with some experts in banking. Give me your proposal for wage concessions. If the stock goes up next week.) Union negotiator: I’m sorry. okay. Union negotiator: I know that’s what you told me. If you put it that way. The union became hardened in its position that the employees needed wage increases in the new contract. So. they would do a thorough analysis and look at the health of the company over the long haul. Company president: What? I thought you understood that it is essential that we get concessions on this if we want to stay afloat. he lost the trust of the union. here’s what happened. this week’s price would have little or no effect on your ability to get a Letter of Credit from the bank. (In the interim. and I’ll have our people look at it. Applying Pressure 133 . Conclusion Because the company’s president over-emphasized the impact of the market on the company. They told union officials that it would be very rare for a bank to make its decision solely on stock price. We think this company is very healthy and can withstand the temporary downturn. and the union ended up with a substantial increase in their contract. but your proposal to cut wages is just not going to fly. Let’s get back together next week. we’d like to reopen talks on next year’s pay increase. When negotiations resumed. Company president: All right. but I checked it out and it’s not totally true.that we’ve cut expenses to counter the losses in the stock market. Union negotiator: Well. When the market took a swing up during the negotiations. let’s talk about it. no concessions! In fact. the company’s position was weakened even more.
and I really wanted to see the new Lenny Bruce movie. Charlene. I guess I’m just surprised. it might backfire. Tom: Oh. Christy was surprised and hurt when a friend of hers mentioned that she had seen Tom at the movies with his former girlfriend. Sara said she saw you at the movies with Charlene yesterday. This can come back to haunt you. Here’s how the discussion went: Christy: Tom.Tactic 33: Bluff! Bluff with caution. I knew you had a class. Poker players know all-too-well-that bluffing can be very costly. and they really have no intentions of doing so. so their “free” time was very limited. Christy thought that their relationship was exclusive: She hadn’t gone out with anyone else. you will have lost credibility with your opponent. 134 50 Practical Negotiation Tactics . Both of them were still in graduate school and worked full-time. they are bluffing. but Christy thought the relationship was heading in that direction. I called Charlene and she was available. The couple had not discussed marriage. She knew that if she made such a demand and threatened to leave him unless he made a commitment. There is a chance that the tactic will work and that both sides will agree to the proposal on the table. but I really am. but you always run the risk of having the opposing party call your bluff and end the negotiations without reaching agreement. and she didn’t think Tom had. yeah. We don’t have that much free time together. If one party threatens to walk out of the negotiations if a demand isn’t agreed to. If you subsequently agree to begin talks again. Christy realized that asking for a commitment from Tom at this stage would be a very serious discussion. either. are you? Christy: I don’t want to be. You’re not upset about that. I really hate it that you chose to see the movie with Charlene. Example 1 Christy and Tom had been dating for about a year.
Example 2 Nexon and its union had been negotiating a new contract for the past couple of weeks. then I’m afraid I want us to stop seeing each other. Applying Pressure 135 . Tom: You’re serious? It’s that important to you? Christy: Yes. Tom: Okay. I’m not “dating” anyone else. Christy: What I’m saying is that I can’t accept that you are going out with a “friend” who is a woman—not at this stage of our relationship. If that’s not possible. If Tom had “called” Christy’s bluff. It really wasn’t a “date”—we just saw the same movie together. and at first he thought she might bluffing.Tom: She’s a friend who happens to be a girl. if you can’t make that kind of commitment. he had to make a commitment or risk losing her. I’m willing to risk losing you. Christy would have had to decide whether or not she was indeed bluffing or if she would really end their relationship. Going to a movie with one of them to me is the same as going to the movies with one of my male buddies. The union negotiators. Conclusion Tom didn’t want to lose Christy. I certainly don’t want to lose you. She convinced Tom that her feelings were strong. so he didn’t call her bluff. but very little progress had been made. Actually. Tom: I have friends of long standing who are women. It’s made me realize that I want us to have an exclusive relationship. I need to have your commitment that you won’t do that. I just thought of her because I knew you weren’t available. I won’t go out with any woman friend. He believed she was sincere. Christy: I just can’t see it that way. she paid her own way. It is. Since he wasn’t sure about that.
This is something we just have to have. we’re really prepared to go the distance on this benefits issue. Nexon: I’m just not prepared to give you one. Union: You don’t seem to understand. or else we’ll be asking the membership to strike. but working without benefits is simply not acceptable. This is a critical issue to us. Union: You’re wrong. The union members ended up voting not to strike at this time. decided to threaten to walk out of the negotiations and have the membership vote on a strike unless Nexon made some concessions at the next meeting. Nexon negotiators did not believe that the workers would actually strike this early in the negotiations.) 136 50 Practical Negotiation Tactics . We need an answer today. Second. but the company cannot offer the same benefits to the parttime workers as it offers to the full-time workers. Why don’t we put this one aside for now. Another bargaining session was scheduled. it will cost too much. then all of our other demands will change. we want the part-time workers to apply for and fill fulltime positions as they become available. Many of our union members who are working part-time hope to work full-time. Nexon: I’m sorry. much less today. First. If we’re not able to reach agreement on this. We need some agreement on this today. We’re not going to reach agreement on this at all. 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 I don’t believe you’re going to go call for a strike over this. and try and reach agreement on the cost-of-living increase you’re proposing? Union: No.believing that Nexon would not risk a strike. Nexon: We’ve got lots of issues to discuss.
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.
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his air-conditioning unit went out. the guy was in no position to dicker over the price of the repair. If the employer is a shipping and express mail company.” Example 1 We have all been at the mercy of someone who uses pressure bargaining. its union has the advantage in the weeks just before Christmas. Since his toilet had overflowed and water was continuing to run all over the floor. not blessed with many household repair skills. for example. It is sometimes referred to as “pressure bargaining. while the other is not—that is. Since the heating and air conditioning company held no leverage over him. The same kind of thing happened a couple of years before that: In the middle of August. Unions can strike at any time to achieve their goals if they have some leverage. such as the advantage of time. and was forced to pay whatever they demanded. Example 2 Let’s face it: Sometimes one party holds all the cards. once had to call a plumber in for emergency repairs. there were times when there was no pressure and no emergency. because this is the busiest time for that industry. On the other hand. The owners of professional sports Applying Pressure 141 . They are more flexible on price and service when they know the consumer is not under any pressure to buy the service being offered.Tactic 35: Apply Pressure (when you have the leverage) Analyzing a situation and applying pressure in order to achieve your goals when you have leverage over the other party is a commonly used tactic in negotiations. he was able to successfully bargain for other services. It’s easy to prediet the outcome in collective bargaining talks if one side is clearly in a very favorable position. when one side has “leverage” over the other. Many companies sell “tune ups” and routine seasonal checks to keep their people busy all year. He was at the mercy of the company that could install an appropriate unit the fastest. Try bargaining with a plumber! This homeowner.
however. Other employers find themselves in situations that actually reverse the leverage (when.teams are generally more vulnerable to pressure from the players’ union several days before the season begins. Employers who refuse to give in on issues of high importance to employees and exert pressure on unions to accept their terms. etc. If so. What goes around comes around. it is the union’s turn to hold firm on its demand). Many labor contracts were agreed to when unemployment and inflation were high and employees felt pressured to accept the demands of the employer. When one side places undue pressure on the other side. On the other hand. This gives it the upper hand in negotiating with employees. if the unemployment rate is high and jobs are few. benefits. either individually or through collective bargaining. he didn’t have to be flexible because the employees believed that they had no alternatives. she has leverage and can more likely hold firm on her price. consider whether or not the two parties will likely meet again in the future to negotiate. The employees had no power to resist the demands of the employer. If you have a special skill that an employer needs and few others have that skill. for example. (Team owners are notoriously unpredictable. then you are in a position where you can set reasonable demands on wages. despite strong resistance. but they are less willing to negotiate several months ahead. but before you choose such a tactic. and other undesired outcomes. there are likely to be long-term repercussions. can suffer repercussions in the form of sabotage. When the employer proposed adding duties to the job classifications. unemployment is low and jobs are plentiful. the employer has the advantage: a supply of jobs. A note of caution: Circumstances in one round of negotiations might give one side an advantage.) The leverage of supply is also very powerful: If a jeweler has an exclusive contract to sell a ring everyone wants. Conclusion “Pressure bargaining” is a way to achieve objectives that are greater than what is deserved or desired by the other side. low employee motivation. will what goes around come around? 142 50 Practical Negotiation Tactics .
This time. (Their dad pulls to the side of the road and turns to face them in the back seat. you have it this part of the trip. the little girls began to fight over the doll. the fighting starts up again. We’ve got a long ride ahead of us. I can’t drive if you keep this up. Mom said so. you have it when we drive home. Susie: Okay. Why? A sudden surprise can disrupt the dynamics of a negotiation.) Applying Pressure 143 . I took it out of the box. The doll can be shared. Susie: The doll belongs to both of us. Consider making a suggestion or a proposal that completely surprises your opponent. (In a few minutes. and Susie. Andrea had taken them off the doll. the girls had been fussy. Andrea: The doll is mine. Example 1 A father and his two daughters were on their way to visit the grandparents. and here’s how the “negotiations” went: Dad: You two stop fighting. Just share the doll. Almost from the beginning of the three-hour drive. and I can’t stand it. because you will probably only get to use it once. Just because you saw it first doesn’t make it yours. but use this tactic judiciously. Andrea: Okay. and Susie hid them under the seat.Tactic 36: Surprise! Never underestimate the power of surprise—particularly when things have bogged down and both sides are simply repeating their positions without making any headway. Andrea. the argument is over the doll’s shoes. Tell Susie to let me have it. You’re driving me nuts. Their dad tried to reason with them. They stopped for lunch at a fast-food restaurant and shared a children’s meal that came with a small doll.) Dad: Stop it right now. About an hour into the drive.
Finally. I think I have acted properly. at great expense to the auditor’s office and the school board. The litigation itself had been going on for more than three years. Here’s how the meeting went: Auditor: I appreciate a chance to talk to you about this litigation. and I hope I can convince you of that.Andrea: Give me the shoes back. to no avail. Conclusion Dad’s use of a “surprise” tactic was extreme. Dolly doesn’t need shoes on in the car. The auditor’s job was to make sure that tax dollars collected for the local education system were appropriately handled. they didn’t say another word. Dolly has to have her shoes. and that they had invested and spent the tax dollars wisely. but nothing else up to that point was working. Daddy said I got the doll on the way to Grandma’s house. 144 50 Practical Negotiation Tactics . 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. Susie: Daddy didn’t say anything about the shoes. charging that they breached their duty in their handling these funds. in fact. The local newspaper was prepared to urge the auditor to end the litigation. (They continued to argue and whine and pinch each other. He initiated the litigation against the local school board members and several banks that invested the money for the board. and reached back for the doll. The defendants contended that the auditor’s actions were politically motivated. The tactic was so successful. The auditor asked to meet with the editor to explain his position.) Dad: Now there’s no more fighting over the doll. I want the shoes. he slowed down. She can have them later. Both Andrea and Susie were so shocked by their dad’s action. He grabbed it and threw it out the window. Dad tried correcting them a few more times. so it was worth the risk.
I think I have something here that will convince you otherwise. The auditor successfully used the element of surprise in announcing the settlement and thus changed the direction of the editorial. Auditor: Well. They are very persuasive that this is just a political battle. That’s really the reason this has gone on so long. I really think the community would be better off. one of the banks settled with my office. Conclusion The editor wrote an editorial urging a resolution for the good of the community. rather than drop the case.Editor: I’m certainly willing to listen. and it is costing your office money and good will. Your reporters will probably want to follow up on it. They’ve been making that same argument from the beginning. Editor: Well. this case needs to be dropped. 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. Editor: (surprised) Really? They settled? This is public information? Auditor: Yes. perhaps you should just cut your losses—and just drop the suit. but recommended that the parties reach a settlement. but actually superior to some other entities you supervise. as a matter of fact. Thank you for coming in. The school board members make a very good argument that their practices regarding how the funds were expended are not just adequate. Editor: Well. Here are the papers. We believe the other defendants will soon follow suit. Obviously. but I have to warn you that from what I’ve seen and heard so far. the bank would not have done that had we not proven our case. From what I can see. and a significant amount of money will go toward the tax fund. Applying Pressure 145 . I guess we’re finished here. Auditor: I appreciate their arguments. there’s just nothing to back up your allegations. This morning.
but I think it will get a lot of use. although getting your license and getting a pool table are connected. Kevin: I don’t really care about a pool table. Mike: I know. Tina and their son Kevin are against the idea. Example 1 Tina’s husband Mike wants to buy a pool table for their family room. Tina: What do you mean? Mike: When Kevin and his friends get their licenses. I’d 146 50 Practical Negotiation Tactics . especially Kevin. If the other side involves more than one person. and a car is more important to him than a pool table. they’ll be mobile! The last thing I want is for them to be out cruising around.Tactic 37: Divide and Conquer Certain negotiations lend themselves to a divide-and-conquer tactic. Kevin is against it because he is turning 16 years-old soon. I know we’ll all enjoy it. night after night. Dad. If the negotiating team sitting across the table from you seems to be divided on a subject or one of the team members seems to be more sympathetic to your arguments. try to focus on that subject or address that member directly to get them to be more amenable to your proposal. 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. I can remember spending hours playing with my friends and family when I was growing up. you might be able to dilute their power by identifying their different interests and addressing them separately. I want to talk about a car! Mike: It’s really not one or the other. Kevin: So am I. Tina: I’m really against this pool table idea. Mike knows he needs to get either his wife or his son on his side.
the head of the union negotiating team. I thought we were making real progress. A pool table could attract them here. Tina: Well. Here’s how the negotiations went. What happened? Applying Pressure 147 . only Kevin did. A number of contract changes have already been worked out and Wylma. she joined his side of the debate. who was studying the company’s financial records for the team) became uncomfortable when he heard Tom’s demand. Conclusion Mike found an argument that divided Tina and Kevin. Example 2 Negotiations on a new union contract seemed to be going quite smoothly. has just presented the company’s initial wage offer. I’m surprised. Wylma: Tom. Once Mike convinced Tina of the idea’s merits. received it without comment. the chief negotiator for the company. Kevin. She noticed that Jim (another member of the union’s negotiating team. Instead of both opposing the idea. They bought the pool table. don’t you think you guys would use it? Kevin: I guess so. some. 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. then maybe it’s not such a bad idea. But I’m not going to hang out here all the time. and Kevin and his friends use it often. Mike: I really do. Tom. 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.like them to hang out here more.
But Tom. Let’s start again tomorrow morning. 148 50 Practical Negotiation Tactics . Tom: We don’t think so. Conclusion Wylma’s appeal to Jim’s knowledge of the actual financial situation of the company worked to divide the union’s negotiating team. Wylma: Jim. Right. forcing them to reconsider their demand. these are our actual accounting figures. Tom had reduced his wage demand significantly. Do you think this is reasonable? Jim: (looking uncomfortable) Well.) Wylma: Now Tom. I think you need to rethink your demand. these are accurate.Tom: Wylma: Nothing happened. as Jim can point out to you. (When they resumed. you’ve heard our demand. Wylma distributed copies of financial data that showed the company’s current condition. Jim? Jim: Yes. you certainly are aware of our financial situation. This is just what we think is fair. you’ve seen our sales projections and production costs. Wylma: Tom. Your demand is totally unreasonable. When the negotiations began again. Wylma: Let’s take a break. but he added some workplace changes that Wylma was comfortable negotiating.
We can’t afford to buy each other things we really need. especially between Madison and Cory. Tempers flare and people say things they shouldn’t out of anger or frustration. That will just make a bad situation worse. You are almost 40 years old. 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. Madison: Okay. I don’t feel Christmas in the way I used to. some of the siblings decided they liked giving presents to one another. Humor often works to break the tension of the room. Sometimes the argument got heated. so pressure grew to draw names and exchange gifts. Cory: Madison. Applying Pressure 149 . It was a tradition in the Jones family to spend Thanksgiving dinner arguing about how the family wanted to celebrate Christmas. I want to say something. get over it. but it is really important to me. but the thought that matters. so what’s the point? I don’t need another tie! Madison: It’s not the gift. so you can find a way to quickly neutralize it. Stay alert and watch for clues that a negotiation is about to get out of hand. the oldest and youngest Jones children. Ever since Mom and Dad died. When all of their children were small. but as the children grew up and had families of their own. it was easy to agree on just giving presents to the children. married.Tactic 38: Break the Tension Tension is inevitable in most negotiations. I know that you all think I’m silly about wanting to exchange Christmas presents among the adults. and it makes me very sad. and had children. Example 1 The four Jones kids grew up. but it should never be at anybody’s personal expense.
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.
Example 1 Julie and Dara both attend a local preschool. it is better not to compromise.: Julie: Dara: Mr. The day-care worker wanted to take them outside for a while so that he could visit with his friend. One day. Isn’t it “later” yet? Right now would be a good time to go outside.Tactic 39: Compromise Negotiations are successful when all parties walk away with an agreement they are satisfied with.” Can I color now? You said we would color later. however. Mr. Both of the little girls liked to play ball when they were outside. they were the last children left in the playroom for the remaining two hours of the day. the individual might be afraid that the exchange isn’t equitable). I want to play “Princess” and I want Dara to be the “Prince. If I can be the Princess. was ready to color. Then we can color. I want to play “Prince and Princess. (In a successful negotiation. If there is resistance to compromise. C. At some point.: Julie: Dara: Julie: Girls.” but she needed Dara to play with her. or maybe tomorrow. Okay. don’t you want to play? We could color before your mom comes.” Dara. each side must decide whether or not one more compromise will produce an agreement that they will later regret. Julie wanted to play “dress-up. C. When that point is reached. not the Prince. and that doesn’t happen without compromise. they would have to play ball with older children. Dara. how about going out to the yard for a while? You can swing or play ball. the exchange will be between things of equal value. who was outside with older children. 154 50 Practical Negotiation Tactics . 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. but since the other children in their room were not there.
the parking lot will start to look trashy. there will be an overall increase in traffic coming through the neighborhood and vehicles will be turning into and leaving the parking lot. you can come back in and play “Prince and Princess. We want to play dress-up and then color. however. They did all the compromising they were willing to do. The neighbors: The neighborhood has four concerns: Theater patrons will be taking up scarce on-street parking spaces. 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. The owner and a small group of neighbors met to talk about these problems. They were also concerned that teenagers would congregate outside the theater at all hours and there would be more litter and trash around the mall’s parking lot. They 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. Mr. and they still had time to color. 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. or apply for a variance.” No. the owner had to supply additional parking.Mr. 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.: Julie: Hey. and teenagers attracted by Making Progress 155 . When his variance application was made public. We don’t want to go outside. C. The existing parking lot didn’t meet the current parking standards for that size theater. According to the city’s zoning laws. C. neighbors became concerned about the changes to the mall.
Not having in and out traffic to the south of the mall is just not very practical. Right now. not having direct access to the south lot from the street would be unworkable. 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. Right now. With the Comedy Club and the grocery store on that end.the theater will start to hang around and maybe wander around our yards at night. Owner: You know that there’s always plenty of parking in the south end of the mall’s parking lot. driveways on the south side of the mall are along the east and west side of the parking lot. In fact. What if I changed the entrance to the middle of the lot? That way. We’d really like to block off that cut-through and have the theater face the south. We’d like you to prohibit cars from entering or leaving from the south lot. only when that lot is full would cars come around the mall and park on the south side. and we’d like to keep it that way. The neighbors: Owner: 156 50 Practical Negotiation Tactics . You could have all of the traffic enter from the north lot. I’m certain the lot will accommodate the theater crowd without increasing the parking on your neighborhood streets. We hope you’re right. the closest parking to it is along Elm Street. even though I’m not adding any parking. the north lot is used more. The fence would shield neighbors from the lights from the vehicles and block the walking access through the alley. the south parking lot has not been used much. Many of our homes back up to that lot. but it’s not ever full. as you said. and break in his door. I’m afraid. with your plans to put the entrance of the theater on the east side of the mall. And. All a patron has to do is park on Elm and walk beside Joe’s yard through the small alley there. lights in and out at night can be very annoying. So. We’re just not convinced.
and they discouraged patrons from parking on neighborhood streets. The compromises were what everybody could live with. Teens can form into gangs if left unwatched. The fences created a buffer from the lights and noise. there could still be access from the street to our garages—just not to the main parking area. add a new entrance into the south lot. Now you’re talking about considerable expense. then will you agree not to push for increased private security? Yes. and make sure the parking lot is kept clean. but the privacy fence has to be landscaped so that it doesn’t look like a ghetto wall. Making Progress 157 . But you’re going to have to have some kind of security as well. If I agree to move the theater entrance to the south. the neighbors reported that they were very happy with the way it all worked out. Conclusion Both sides had to give up something on certain items in order to reach agreement. put a privacy fence along both the east and west sides of the south lot.The neighbors: Owner: The neighbors: Owner: But we use those side drives to get to our garages. Agreed. The fence would help with the vehicle lights and buffer this noise from the kids who hang around. set back a driveway width. And a year after the theater opened. If the fence was set back the width of a driveway onto your property. however.
just forget it. and didn’t stop until 6:00 a. so her neighbor’s barking dog came as an unpleasant surprise. and that as angry as they were. incident was usual or unusual.m.. She didn’t believe her neighbors ought to complain about the barking. If your opponent is aggressive or angry. 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. thinking that you will be just as easy to work with on the sticky issues. they had gotten nowhere. Lonely: If you’re here to complain about my Rocky. and because she was hard of hearing. Mrs. Joan was already pretty tired. I’m Joan. Close your windows at night and don’t listen. and I just moved in next door. She sought advice from the family on the other side of the neighbor with the barking dog to see whether this 3:00 a. 158 50 Practical Negotiation Tactics . and pleasant always enhances one’s ability to reach an agreement. Lonely. Your opponent might give in readily. but be friendly. respectful. Present your position forcefully. Joan had a new baby. because you are the one to set the tone for agreement. They might even start to underestimate your negotiating skills.m. and started to get upset. The dog was Mrs. Example 1 Joan was new to the neighborhood. she just didn’t think it was a serious problem. Lonely’s only companionship. professional. She learned that everyone in the neighborhood had complained at least once. and sleeping at night was already a difficult proposition! When the neighbor’s dog began to bark at 3:00 a. and what kind of complaints might have already been made. Mrs. Joan: Hi.m. your friendliness might disarm and relax them to the point where they begin to talk about their priorities and objectives. This gives you an advantage. Joan decided to at least try and talk to the neighbor. but going out of your way to be friendly is an especially helpful tactic.Tactic 40: Be Friendly Being polite.
then. Why. I can’t pay for something like that. Mikey. Lonely: Joan: Mrs. (Joan’s sleep was disturbed by another night of barking. I’d like to introduce you to my new baby. don’t worry about that. When he does. isn’t he cute! He’s a handful. but she took her baby and went to visit Mrs. it’s probably because they just haven’t had the time to get to know him. I stopped by and visited with him over the fence this morning.Joan: Mrs. Maybe I could come back tomorrow and bring him? Oh. though. He’s a real comfort to me.) Hi. I guess that would be okay. Making Progress 159 . by the way. I’ve got a friend who is a veterinarian. Lonely: Joan: Mrs. Lonely: Joan: No. I’ll see you. I sure hope he starts sleeping through the night soon. I need to get the baby home. and I’d like to have him stop by and look at Rocky—would that be okay with you? Well. My friend wouldn’t charge anything for talking to us about Rocky and maybe giving us some advice. is a really sweet dog. How long have you had him? Almost eight years now. He’s been keeping me up at night. Lonely again. I’ve only got my Social Security. Lonely: Joan: Mrs. not at all. Well. No. I guess so. sure. Well. Who. I might have to talk to you about Rocky. The barking at night has been mentioned to me. Here’s my little angel. I know that some of these people around here don’t like him. too. no. Lonely: Joan: Mrs. Do you think his age has contributed to some of that? You know. I just wanted to come by and introduce myself.
A. recognizing that the layoffs would be an issue in upcoming local elections. Under its new corporate structure. of course. Mayor: (very friendly) I understand how these things happen. U. Example 2 Company ZZZ planned to close its manufacturing plant and lay off 300 union employees. Joan took up contributions from the neighbors. I think that if you could have let me know ahead of time. The barking all but stopped. 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. It’s very difficult to make a move of this type without having it leak out. Lonely didn’t have to pay for the medicine she could not afford.Conclusion Joan’s friendly approach enabled her to understand Mrs. and Mrs. that the press got hold of the story of our company’s activities before we could call you to let you know. Company ZZZ: (surprised) Well. When he heard the news on the radio. that’s very understanding of you. the mayor called and asked for a meeting with Company ZZZ officials. overseeing a factory in Mexico and selling products in the states. you would have. its 150 management and sales employees could continue to work in Happy City. 160 50 Practical Negotiation Tactics . agreed to meet with the mayor. he prescribed medicine that gave Rocky a more regular sleep schedule. Lonely and Rocky. Hearing about this from the press obviously puts you in a very embarrassing situation.S.. Lonely’s needs and arrive at a workable solution to the problem. Company ZZZ. They anticipated that it would be an unpleasant meeting. After Joan’s veterinarian friend visited with Mrs. Here’s how the meeting went: Company ZZZ: We’re very sorry.
and I want them to know that. Mayor: Great! Let me know when we can talk again. This strategy worked. or would we need to involve the Malaysia group? Company ZZZ: Certainly.Mayor: I wanted to meet with you so we can take the necessary steps to keep the 150 jobs here. Many laid-off employees did indeed find new jobs at the plant. Unfortunately. and the mayor was reelected. We recognize that your new corporate owner is a large company located in Malaysia. The mayor was able to broker a deal for the “disadvantaged business” to buy the plant and convert it to a different widget maker. so we need to understand how we can affect their decision on keeping an office here. I think I can prevail upon the Malaysia group to let us handle the disposal of the property in such a way as to repair some of the damage our layoffs have created. Making Progress 161 . the city has a potential buyer for your plant building. The buyer is a “disadvantaged business” we have been working with for some time. because I’d hate for us not to make an appropriate pitch to them. Would you be in a position to talk to me about such a deal. You’ve been very understanding about this. Mayor: Please let me know as soon as you can. Company ZZZ: I’m not sure what to tell you on that. By the way. I am certain that you would like that kind of “good” publicity coming quickly after the recent bad publicity. the 150 management/sales jobs did end up moving to Mexico. 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. They need a really good deal on the plant price. We just haven’t heard anything yet. It’s possible that some of the 300 laid-off employees will find work at this new endeavor.
threats. Susan denied it. Jones’s supervisor. Susan understood the impact a tape recording can have when it reveals a lie. age 15. were on vacation with their parents in Myrtle Beach. She agreed that her proposal was not fair and that she had tried to take advantage of her younger sister. this time in front of a hidden recorder. the younger sister.00 to spend. South Carolina. until Susan said they would evenly split what they bought. had $40. Michael Wood. 162 50 Practical Negotiation Tactics . are talking about a possible settlement of the issue. They might worry that the tapes will be made public or given to others. She borrowed a tape recorder so she could ask her father if this was a fair deal. the investigator. Fred Adams. Alexis agreed. Example 1 Susan. Then he played the tape.00. Alexis knew this was not fair. and Jones. and Alexis. Alexis then played the tape for her father. or simply “bad faith” methods have been used by the other party. the accused. Conclusion For the first time in her life. who was disappointed to hear that she might propose such a deal. The effect on the other party might be even more substantial if lies. Susan wanted to negotiate with Alexis to “pool” their money so they could buy something together. or used to pressure the other side to agree to certain demands. Susan repeated her demand. Somehow.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. age 14. Example 2 Three men were meeting to discuss a charge of sexual harassment that had been made against Stuart Jones. Alexis. thus becoming a source of embarrassment. The two sisters had saved up a little money so that they could buy souvenirs. He asked his elder daughter about the arrangement. but Susan had only $20.
I’ve brought a tape recorder with me. Jones suddenly realized that his strategy would not work. you are aware that the next step in this process is to ask witnesses to come forth. He failed to think about what might be the next step. So you refuse to repeat the answers you just gave us? Yes. And please describe your general manner. And you did not threaten her job if she did not. I simply asked her to make copies for me as quickly as possible. Starr. Appleton both claim they saw the incident and will testify. Jones. No one could have possibly misunderstood your intentions? No reasonable person. Conclusion Jones had knowingly lied when he denied the charges. Ruiz and Ms. and gestures did not have a single hint of sexual implication or innuendo? None at all. Making Progress 163 . Your request. (a long pause) I want to see my lawyer. exactly what you said to Ms.” meaning something other than copies? No. Mr. Mr. I think I can write my recommendation. When Adams set the tape recorder on the table and revealed that he had witnesses. he also lost his negotiating position. “Do what I want. Stuart. So. stares. to quote you.Adams: Jones: Wood: Jones: Wood: Jones: Wood: Jones: Wood: Jones: Adams: Jones: Adams: Jones: Adams: Tell me again. But by refusing to repeat his answers. and now I’ll ask you to repeat your answers—on tape. You never touched any part of her body? Not even accidentally? No. Well.
The second person then chooses which of the two parts they will receive. 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. because you did the cutting. the classic “split and choose” tactic might be the best way to settle the issue.” the divider. is usually careful about dividing the object into two equal parts. of course. Realizing the potential of getting the “smaller half. Many of us learned this one from our parents: After two people agree to the strategy. take this knife and slice the Snickers into two halves. Roberto will get to choose which half he wants. one person is given the task of dividing the object(s) into two parts. Maria and Roberto: No. Maria. Oh. Maria: Roberto: Maria: Father: Father: We can’t share it! It’s in one piece! I’ll eat half and give you the rest. What is it? Maria: Father: 164 50 Practical Negotiation Tactics . with the remaining part going to the person who did the dividing.Tactic 42: Split and Choose When two parties both desire something that can be shared or divided between them. so I’ve got to cut it into two equal pieces or else he will choose the bigger one? Exactly. Their dad instructed them to share the candy bar.… No way! Haven’t you two heard of ‘split and choose’? It’s a fair way to divide things. which certainly is large enough (he naively thought) for two young children to easily share.
Archie: That’s true. Deal? Clarence: Sure. so we should be able to divide the property fairly. but the appraiser pointed out that the seven one-acre lakefront lots are considerably more valuable than the other seven lots. Then I will choose which parcel I want. Example 2 Two friends and business partners. There is only one place for an access road that must serve all lots. Archie: Here is the map. I don’t really care which lakefront lots I keep. even children. Clarence: Right. Clarence agrees to divide it. and wants to divide it into two separate parcels. Archie is ready to build a retirement home on the property. Give me the map and a pencil. Clarence and Archie. according to county deed restrictions. Making Progress 165 . Lots must be at least one acre to be developed. Archie: I really don’t care either.000. The problem is that one of us will get four lakefront lots and the other will only get three lots. that sounds fair. Clarence: But some of the lots away from the lake have been partially cleared and are flatter than others. 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. jointly purchased fourteen acres of lakefront property several years ago. They all have a great view and are equally desirable to build on. They have a recent appraisal that values the property at $150. The remaining lots should be distributed between the two parcels to make each parcel as equal in value as possible. both parties. quickly recognize the fairness of the divideand-choose method. That makes them more desirable. 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.
Which would you have chosen? 166 50 Practical Negotiation Tactics .Conclusion Clarence divided the fourteen acres into one parcel with three lakefront lots and six other lots. Archie chose the parcel with the three lakefront lots. and the second parcel with four lakefront lots and one other lot. and both men were happy with the arrangement.
Her husband Jason. “Okay. because a “nickel” item has been added to negotiations about a much more significant item costing “dollars.” Many people have witnessed or used this effective negotiating tactic. we’ll take the suite if you’ll throw in free delivery and set up the furniture. so the salesperson delivered the suite himself. Brenda did her part when she said. etc.” Under store policy. miles from their home. The suite they liked best was already at the lowest price in town (the retailer was having a real sale). attach legs. His tactic was to throw in a “nickel” in order to make lots of “dollars. Example 1 Brenda Davis is always thinking about the repairs that might be required on an item. supposedly the bargainer in the household. he also set up all of the furniture in a second-floor bedroom. They recently purchased a new bedroom suite after they carefully priced comparable furniture all over town. However. Conclusion The amount the couple spent was fairly large. is expected to dicker over the price.” thus extending the scope of the negotiations. delivery was limited to a small geographical area. What started out as a single issue is now a combination of a major issue and a much smaller issue. Jason was having a hard time getting the salesman to lower the price. Example 2 An experienced and skillful union organizer liked to tack on a tiny less-significant item each time a company and its union negotiated on a large and Making Progress 167 . With a great deal of effort.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. and the delivery carrier doesn’t set up mirrors.
“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.” Conclusion The nickel and diming tactic is a classic negotiation tactic used successfully in a variety of situations. 168 50 Practical Negotiation Tactics . so be prepared to withdraw the nickel and dime item at the hint of trouble. At the end of negotiations.important item. In one case. If used correctly—at the very end of a negotiation—the tactic can usually provide a small gain. it can be a dealbreaker.” The company negotiator yielded to this small-potatoes counteroffer in order to win agreement on the health plan. 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. This experienced bargainer said. we’ll agree to Health Plan A with another ½ cent on the pension fund.
Donna: They match. and performance evaluations for people to come across as likeable. decision-making meetings. trustworthy. thus creating the impression in others that the good qualities they see are present all the time. Donna: Okay. Kathy: I suggest we take turns choosing which of these things we want. and all the rest is small junk. People tend to make an effort to put their best foot forward. I’ll take the color TV. Donna: No way! These are the last two pieces of furniture. Donna: I’ll take the bar with stools. Kathy: But they are a matched set. or knowledgeable. but they are two pieces of furniture. This creates what is called a “halo effect. Kathy: Well you took the bar and four stools as one item! Donna: They are part of one set. Example 1 Donna: Mom said to take what we want from the old house and toss out the rest. You can go first.” Having a member of a negotiating team whom the other side thinks can do no wrong might prove to be advantageous. Kathy: Not if you accept your logic! (Pause) Donna: You’re not being fair… Making Progress 169 . Kathy: I’ll take the pool table. Kathy: Then I’ll take the couch and love seat.Tactic 44: Make Use of a Positive “Halo Effect” It is common in interviews.
I want the love seat. and if the bar and stools should be one item or two. I trust his judgment.Kathy: Donna: Kathy: Donna: Kathy: Kathy: Donna: Kathy: Donna: Kathy: You’re not! (Pause) Well. and ask him if the couch and chair should be one item or two. 170 50 Practical Negotiation Tactics . Example 2 During a heated labor negotiation. but Kathy and Donna assumed that one positive quality (honesty) would carry over to other areas. what can we do? Give me the couch and love seat! No. I want the stools. with a record of labor involvement that included three recent strikes. He’s our cousin. 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. Johnny had the “halo” of an honest person. Conclusion Kathy and Donna needed an arbitrator to settle their disagreement. and he has always struck me as an honest person. He might or might not have also been a good arbitrator. The union negotiators. Good idea. What for? Tell him the situation. (Pause) We’ve got to settle this today and get this stuff moved. Let’s call Johnny Ryan.
even if the proposal appeared to be valid. The teams took a weekend break from the stalled negotiations.simply did not trust the management team. He solemnly told the union negotiators that he had been hired to review it. Conclusion The union leaders gave Boston a great deal of respect (even in areas such as budgeting and actuarial tables) because of his former position. The union accepted the proposal. During the break. but his mere presence caused the union leaders to accept a management point as valid. Boston went to the negotiation table with the management team. as a consultant to review their proposal. when negotiations again stalled on a retirement plan issue. the city management again hired Boston. Two weeks later. the consultant did not speak. thus bringing the negotiations to a conclusion. the former union president. Making Progress 171 . This time. On Monday. He said he believed that it would work as presented by management. the management team hired Sam Boston. but the power of the so-called halo effect was great. and that he did. They might have stretched his halo farther than his expertise and experience warranted. without any reservations. Boston was widely known as a totally honest man who speaks his mind.
000. but you’ve priced it way too high. and $237. $235. Here’s a list of the five that are about the same size as yours. $237. How can you say that? We went to the county courthouse and looked up the real estate transactions for all the houses in this neighborhood that were sold over the past two years. The owner.000. has owned the house for 24 years and is downsizing to a condo.500.Tactic 45: Use Facts Fact-gathering must be part of the preparations for every negotiations session. Henry Lopez: Sam Jones: Maria Lopez: Sam Jones: Maria Lopez: We love the house and have made a written offer of $240. Being able to present them at the most appropriate and critical times has made the difference in countless negotiation situations. I’ll get back to you. but the right facts presented at the right time can chill or astound and completely turn things around.000. Sam Jones: Sam Jones: 172 50 Practical Negotiation Tactics . They sold for: $225.000. This offer is for more money than any four-bedroom houses on this neighborhood list. (Next day) We’ve reviewed the records you’ve produced.000. Sometimes. Example 1 Henry and Maria Lopez are interested in a house that lists for $275.000. the other party will ignore or refuse to believe the information. and we are countering with an offer of $250. but we feel that it’s a fair offer. $229. but the key is to gather facts that you might need—not just the facts that you will need.000.000 under the listing price! We realize that. They believe it is overpriced. Sam Jones. What? That’s $35. We love your house.
He found facts that supported his position. Hatfield: My staff has done a lot of research. We’ve talked with purchasing and we have the authority to buy seven for $2. let’s not worry about it. I asked for a list of all new PCs bought this year. if other departments have ignored the policy.600 for a computer. and did his homework.000 each. Making Progress 173 . Example 2 Supervisor: You know the policy.600 unless the company president approves. who was not particularly knoledgeable about real estate. Hatfield: While I was at purchasing. Conclusion Hatfield had anticipated what his supervisor’s position would be. Supervisor: If I okay this purchase order. I’ll be… Okay. Conclusion The Joneses had based their asking price on the advice of a friend. and we know that only this model will meet our needs.Henry Lopez: Sam Jones: Henry Lopez: Sam Jones: Let us discuss this for a minute. That’s the bottom price. No one can go over $1. Well… We have a written counter of $245.400 each. The facts presented by Henry and Maria Lopez caused Jones to re-counter their asking and likely sale price. I’ll get called on the carpet. We accept. The last 20 were over $2. and wisely chose exactly when to present them in order to make his point. You can’t pay more than $1. Order the new computers. Supervisor: Well. Here it is.000.
can you check out two on a card for him? Jenny: Well. Example 1 Maureen: What. Maureen. 174 50 Practical Negotiation Tactics . Maureen: The policy limits a person to only take out three books at the same time? Jenny: Yes. But I can’t break the limit rule—it is an absolute rule here. The effective use of probing questions can help achieve a favorable settlement.Tactic 46: Ask Probing Questions Ask probing questions and follow-up questions. I can do that within the rules. They can help you identify or better understand what the other side really wants. you know me. and help you point out inconsistencies in a position that might “lead” the other side to change theirs. Maureen: Well. and they would all be unavailable to others. I’m sure you would not. I can’t check out these four books? Jenny (Librarian): That’s the policy. reveal misperceptions or lack of knowledge about positions that can be corrected. I want two of these. some people would have forty or fifty books out at the same time. yes. If you trust me. I trust you. Would I do that? Jenny: Maureen. Otherwise. Maureen: So you trust me with the books. but I don’t set the policy and I can’t make exceptions. and two are for my husband. but you don’t want to jeopardize your job? Jenny: Yes. Maureen: Well. A maximum of three books can be checked out to a person at any one time.
(Next day) Do you have the policy about giving out product sales information? No. it could kill us. I couldn’t find anyone who knew it. Mary and Kenzie? They are 2-3 pay grades below us.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. Why? Some policy? Yes. Security? Right. Brooks. Mary. and they don’t even have a use for the sales data. Making Progress 175 . Babu. Sue. But this forces us to make decisions without complete information! Yes. What’s the policy number or date of approval? I don’t know. and Kenzie. Can you get me the number? Sure. They say it’s a security issue. Who does have access clearance? Mike. If that data ended up in the wrong hands. Jay. are you sure I can’t get your information technology people to give us direct information on product sales? No. Example 2 Jack: Mark: Jack: Mark: Jack: Mark: Jack: Mark: Jack: Mark: Jack: Mark: Jack: Mark: Jack: Mark: Jack: Mark. but it’s because you don’t have access clearance. we can’t do that.
When can I get the data? Mark: Today.P. I’ll sign now.Mark: Well.… (Next day) Mark: The vice president said you can have access if you sign a security card like everyone else who has access clearance.” He intended to do this until he hit a dead-end or was able to find a solution to his problem. that’s been the policy since I’ve been here. Once he discovered that employees in lower pay grades had access clearance. 176 50 Practical Negotiation Tactics . Jack: Can you ask your V. His probing questions turned up a critical fact. Conclusion Jack continued to probe by asking why and who in order to find out more about “the policy. I’ll get it for you ASAP. Jack: Here. if we can have access? Mark: I guess so. Jack was able to receive clearance as well.
When multiple issues are at stake and most have been agreed upon during negotiations. T Reaching Agreement 177 . days. Other final-agreement tactics include Tactic #47 (Giving Premature Congratulations) to make the other side feel good about having achieved an agreement (while you spring another condition on them). hours. 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. They bring it out when a dispute arises. 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. or even months after the first offer is presented. this process can easily result in a final settlement. If people are not willing to take even a few minutes to write down the terms that have been agreed upon and sign the paper. If both parties desire a settlement but cannot seem to reach it through the usual give-and-take process. and the classic Walk Away (Tactic #48). When two parties believe they have an oral agreement. In this process. this tactic can produce an agreement.Stage 7: Reaching Agreement he final stage! It might come minutes. If friends or neighbors need to settle something but prefer to avoid the negotiation process. 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. and the child learns an important lesson about life. Tactic #49 (Final-Offer Arbitration) should bring about a settlement. which is used only when a negotiator is prepared to end negotiations without an agreement and you want the other party to make a final concession to reach a settlement.
D.…” Larry was very pleased that his wife was agreeing to the idea he had been trying to sell. off-again discussions. As he hugged her. She said. but his wife Nancy likes to stay put and relax. Near the end of a particularly anxious bargaining session when there was little time left to negotiate. 2) allows the other side to feel the release that comes with completing the bargain. Larry Snyder gets bored staying in any one place for many days. After days and weeks of on-again. “I’m thinking of agreeing to your plans for vacation.C. Example 2 Negotiations can take a long time and incorporate many issues.Tactic 47: The Premature Congratulation This tactic draws its strength from timing. His wife had carefully planned her exact “premature” vacation agreement. 3) and adds one last key demand to the congratulation sentence. Weeks of stressful meetings cause both sides at the bargaining table to look forward to its conclusion. The bargainer skillfully 1) begins the congratulation sentence “I agree…”. Example 1 Many husbands and wives have different ideas about how they’ll spend their vacation. They both have stressful jobs and look forward to their annual vacation together.C. Let’s do go to Virginia Beach and Washington D. and Virginia Beach —his plan—that he let the euphoria of the moment cause him to agree to a trip he dreaded and in fact had successfully avoided all year. one exhausted negotiator saw that his team was equally weary and 178 50 Practical Negotiation Tactics . Nancy brought up the subject of vacation again after dinner. she continued to speak: “…as long as you agree to drive us to visit my mother on her birthday.” Conclusion The husband was so excited about visiting Washington.
However. but acceptable. “It was hard for us. fit. because it makes you pretty vulnerable.” Bob: Ted timed this perfectly. as the negotiator came closer. It was so close. (This is a bad position to be in. we held firm on this and did not discuss the probation issue and many other “dead” issues for days.almost willing to accept any deal. but we agree to everything in your final proposal…” Members of my team shouted hooray.) Here’s what happened: Bob: I knew that the other side was similarly harried. and rested. Therefore. Ted said. “…as long as you give us a 45-day probation period. symbolizing that he was agreeing to the entire final offer. The celebration had begun. Reaching Agreement 179 . Most people didn’t notice that the negotiators had not finished their hand shake… Ted: Then Ted continued his sentence with. It took only a few minutes of caucusing for my team to convince me that a 45-day probation was costly. When the chief negotiator emerged with his team and headed toward my team. One of the best pieces of negotiation advice is to remain fresh. I felt the tension in the room. and this skillful negotiator let them feel the happiness and security one feels when the fear vanishes. but also that they sensed the weariness of my team. There were grins and handshakes coming from the other side. The old agreement specified a 30-day period. he turned on a large warm smile and extended his hand to shake. but the other side continued to ask for 60 days. We all knew that it could come down to agreement or strike. My team had convinced me that doubling the time frame would create a real problem on the shop floor. One operating issue involved the probation period for new employees. we made some small concessions on financial matters. but held firm on remaining operating principles. In our last offer. My team was afraid we would not even come to an agreement.
the negotiator skillfully finishes his words of congratulations by inserting one last key demand.Conclusion This “premature congratulation” tactic can only be used successfully at the very end of an unsure and shaky negotiation. The negotiator makes a big show of agreeing and allows the other side to bask in the glory of a deal completed. 180 50 Practical Negotiation Tactics . However. knowing that it will probably be agreed to in order to continue in the euphoria of the moment.
and he can simply buy it when the lease expires. Sue: I remember you. The next morning.) Jay: Sue. Jay: Hi. Whether you are really bluffing or you are serious.Tactic 48: Walk Away Walking away from the table in the middle of negotiations is a risky tactic that should only be used when you know you have a good alternative to what is on the table AND you believe that the other party will think that you really are serious about quitting for good. You had time to assess my car. or go after you and perhaps make a new concession in order to get you back to the table. Your opponent will have to either let you go and run the risk that things are really over. be sure you think this through beforehand. I’ve worked with you before. Sue: Well. and the lease on my Avalon is about to expire. right? Jay: Yes. You bought your wife a new van just last year. (Vahaly drives the new Highlander home. but my Avalon is a good car. Jay. He stopped by Pembroke one day to look at the new models. too. if I roll over the lease to a Highlander. Sue: Let me get you the keys so you can take this one home overnight to see how you like it. I like it. I don’t want to negotiate. what can you do on a 36-month lease? Reaching Agreement 181 . how did you like it? Jay: Okay. all from Sue Wilson. but I thought I might want to try a new Highlander. here are your keys. the following exchange occurs. Example 1 Jay Vahaly has purchased three new Toyotas from Pembroke Toyota over the past twelve years. Jay. My name is Jay Vahaly. a veteran salesperson. He really likes it. but his Avalon has been a good car.
Sue: I’ll try. Jay: I guess I’ll go to Dixie Toyota and see what they will do for me. These Highlanders are hot items! Jay: Well. Example 2 Larry and Judy Bizannes own the Bizannes Music Mart.) Conclusion Jay knew his BATNA (best alternative to a negotiated agreement): to go somewhere else if the deal isn’t good enough. Let me try again. Jay—wait. They’ve talked about retiring in recent months. (He walks away) Sue: No. (Jay got in his car and drove home. $100 more. He was prepared to keep his Avalon if the lease was even $1 more than his limit. 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. Jay. you can turn in the Avalon and get the Highlander for only $249 dollars more per month. they came down to $199 more on a thirty-six month lease. Jay. Sue: Sorry. (15 minutes later) Sue: Well. I thought I’d get a fair deal. a successful musical instrument sales and rental store. Jay accepted. He effectively used the walk-away tactic to let Sue know that he was firm on the price. Please go back and work out a lower lease payment. Jay: What? I was thinking the lease payment would be. I’m disappointed. at most. but 182 50 Practical Negotiation Tactics .Sue: Give me a few minutes and I’ll find out … (20 minutes later) Sue: Well.
and he is offering us $4. Two months later. Larry. today. visited their store. but their continued walkout convinced Michael that they would hold firm. a local developer. Larry: Yes. How’s business? Larry: Great! I’m surprised to see you again. after no contact from Larry or Judy. our accountant said it’s worth $6 million. Reaching Agreement 183 .5 million. One day. with a certified check. He met with Bizannes twice before. Michael calls on them again with a check for $5. which the Bizannes accept.5 million for the building. What do you think? Judy: Larry. (Judy and Larry walk into the back room and close the door. go back to your office. Michael Roberts. Larry: Judy. and I only need your building to own it. Michael: I have a check right here for 4. and I’m not interested in less.) Larry: Michael is here again. Judy: Larry. they were prepared to accept $5. and we gave you our price. I still want to develop this block. you’ve already told us that. Larry: Michael. Larry. You rejected it.both of them love their store. come out here! (Judy comes out from the back room. In reality. let’s eat lunch. Michael: Well.5 million.) Conclusion Larry and Judy used the walk-away tactic and stayed away for two months in order to convince Michael that they were firm on their price. and I’m prepared to offer you $4. so why are you here? Michael: I’ve discussed it with my partners.5 million. Michael: Good morning.0 million.
The following discussion occurs: Jenny: The old machine wasn’t worth $50 when you took it. In most arbitrations.000. which is generally voluntary. Jenny told them to sell it. Keep the $1. In mediation. In ﬁnal offer arbitration. Jenny told Lynne she could take the old Singer that she has no interest in (and doubts that it is worth restoring). That was the deal. Lynne responded that this was their intention. Jenny: No. each party submits their ﬁnal offer on each unresolved issue (usually in writing) and the arbitrator chooses one as the ﬁnal settlement as it has been submitted (no changes or compromises). the arbitrator is given the authority to make the parties comply with the ﬁnal and binding decision. Example 1 Jenny and Lynne are sisters. which she has kept in a barn for over ten years. One day Lynne dropped by for a visit and the discussion turned to the old Singer.Tactic 49: Final-Offer Arbitration Mediation and arbitration are two well-known ways of resolving sticky disputes.000. Lynne: No! I suggest that we each write down our position and let Dad choose one of the two as the final decision. Lynne and Gary bring the restored Singer to Jenny’s house. Lynne told Jenny that she and her husband Gary have restored two other Singers. I offered it to you for nothing. Both involve the use of third parties who are objective. so they generally give up some ground and try to make the offer appear as fair and reasonable as possible. But he isn’t allowed to try to find a “middle ground”—just to choose one position or the other. Each party wants their offer chosen. both sides have agreed in writing to accept the arbitrator’s decision. In arbitration. Lynne: No. We have a few dollars invested in parts and we had fun working on it. but they wanted to give Jenny $500 for her “share” of the machine. 184 50 Practical Negotiation Tactics . They inform her that they put the machine on e-Bay and have an offer of $1. I won’t take it. the mediator works with both sides to resolve certain issues but has no authority to make binding decisions. Let’s split the money. Six months later. Jenny has an antique Singer sewing machine. and would be able to restore hers as well.
As a brief explanation.Jenny: Dad: Okay. Any increase in value was due to the work of Gary and Lynne. I’ll buy that. Conclusion Jenny’s final position was that she receive $50—the maximum possible value of an old “junker. based Reaching Agreement 185 . binding decision on the three items. he did not need to “haggle” with them. so I am invoking the finaloffer arbitration ground rule we have in place. Ralph: I know.m. Example 2 Ralph: Well. The union’s position could have run into millions of dollars. after six weeks of negotiating. At best. but we’ve made no movement on any of them since we started. the old machine was only worth $50 when Lynne hauled it away. Tina: Yes.m. I can’t see any way to reach an agreement. Ralph: Right! (Friday at 3:00 p. My troops are getting restless. since he could only choose one offer. first on the health insurance co-pay. and meet back here in 72 hours—3:00 p. on Friday. (One week later) I think Jenny’s position is the most reasonable. Then we both submit our final offers to Judge Ryan within 48 hours. Tina: Good. I have chosen management’s offer to keep it as it is under the current contract. we are down to only three unresolved items.) Judge Ryan: Here is my written. Tina. They should get the other $950.” Lynne proposed a 50-50 split. Their father found Jenny’s position to be the most reasonable.
and peacefully finalize a contract that contained several important gains for both sides. on the merit pool distribution method issue. No increase has been given for six years. I have chosen management’s offer because the union did not justify why the past practice should be changed. Now let’s get a signed contract. Conclusion The final-offer arbitration process enabled the parties to gain a fast. I’m sure you realize that we could have taken six more weeks to reach the same point. money. on the clothing allowance. and an item that large should have been negotiated at the table. Well. reasonable resolution to their last three unresolved issues. Ralph. At least we both saved time. but we agreed to this process. 186 50 Practical Negotiation Tactics . and stress. I have chosen the union’s final offer. Second.Ralph: Tina: on last year’s data. nor why their method was superior. It will only cost $120.000—less than 1 percent of the total package. I’m not happy with your decisions. Finally.
If we shake hands on it right now. Bill and Paulette fell in love with the house. They finally looked at a house they really liked.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. they looked at this particular house on their own. The owners were selling the house without a real estate agent. and while Bill and Paulette had been using an agent to help locate houses.000. Obviously. and felt that they would have to work fast to make an offer before someone else did. Seller: Yes. not the furniture. We’d like to make you an offer of $150. The goal of recording the precise details is to either avoid any misunderstandings or address them before the talks conclude. Bill pulled the seller aside.000. Seller: We’re asking $152. we won’t be involving our real estate agent. 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. seeing the agreement in writing will force both sides to acknowledge what has been said and agreed to in the negotiations. all the usual stuff in a sale. and one of the other couples looked very interested. During a discussion. Bill: Reaching Agreement 187 . They saw the “For Sale” and “Open House” signs. however. At the very least. everyone is busy grappling with the details of the negotiations. The party who writes down what has been agreed upon right away might have some advantage in precisely wording the agreement to that party’s advantage. and decided to stop by to see if they liked the house. Example 1 Bill and Paulette had been house-hunting for some time. They were not the only couple to come to the open house.
Sign here. and two area rugs. the refrigerator. and the garbage disposal. look this over. then we have a deal. Bill: (pleasantly surprised to learn that the garbage disposal. all window blinds and drapes. he listed the stove. he listed an attached hutch in the kitchen. (The seller recorded the offer of $150.Seller: Just a minute. he began to have “problems” with her job performance. a public agency. and the two area rugs were specifically included. in fact. When he had the chance to put the deal in writing. If it’s what you meant. the house is yours. and the two area rugs. In her complaint. the hutch. but I’d like to make sure there are no misunderstandings. Let me just get the standard “offer of sale” form and fill out what I hear you saying. Under the section for appliances to be left on the property. It worked. In the section for fixtures and miscellaneous items to be left on the property. and when she refused. she said that her supervisor had repeatedly asked her out. real.000 and added the additional items to “sweeten the pot” and give Bill and Paulette a deal they couldn’t refuse. and had been prepared to drop his price to $145. the hutch.) Seller: So.000. The supervisor assured the employer that there was no basis for her complaint. and that no one would ever say that he was guilty of any type of sexual harassment or sexual discrimination. he left the price at $150. I think we can work something out. Example 2 Monica brought a sex discrimination charge against her employer. The supervisor pointed out that he had a staff of 20 or so women. Conclusion The seller had always intended to leave the garbage disposal. that’s what I meant.000. since he probably would have missed them) Yes. Seller: Okay. and that the problems with her job performance were. The employer’s affirmative action officer looked into the charges and determined that 188 50 Practical Negotiation Tactics .
Why’s that? Well. the supervisor says he did nothing wrong and that Monica just misinterpreted what he said. by this time. drawn-out. The employer’s lawyer told Monica’s lawyer that the employer was ready to settle the deal for the $100.000. The supervisor insisted that if the employer felt he had to settle. settling—What difference does it make to her? She’s getting her $100. Monica’s lawyer (She): Employer’s lawyer (He): She: I was surprised by your settlement documents.000. you didn’t mention in the agreement that in exchange for the $100. I’m He: She: He: Reaching Agreement 189 . found a new job and wanted compensation for “embarrassment” and lost wages in the amount of $100. He offered to send settlement agreement papers to her. and expensive matter. then Monica had to acknowledge that the supervisor did nothing wrong. Withdrawing.000. She thinks the withdrawals and the secret settlement will be seen as some kind of admission on her part that she shouldn’t have brought the claim. He’s happy to prove that in court. Look. but said that fighting the charges would be a long. It might be standard when there’s a settlement.000 without actually having to prove anything. But the employer doesn’t want to go through the expense and publicity of a trial. even though we’re certain we would prevail. Monica had. but it’s not standard when a complaint is formally withdrawn. And the confidentiality clause is standard. and must agree not to tell anyone about the $100. my client is supposed to formally withdraw the complaint rather than just settle it.000. You’re just trying to make it seem as if your supervisor did nothing wrong. even though you are paying Monica because we can prove he did do something wrong.there was little basis for the complaint.
000 and the conditions of the offer. to his disadvantage. 190 50 Practical Negotiation Tactics . It was made clear that the employer had paid the additional $100. It would have been a better strategy in this situation to raise the issue of withdrawing the complaint during the actual negotiations. There was a confidentiality agreement.000 just to get the employee to “withdraw” the complaint. but that’s under the same conditions—the claim must be formally withdrawn and Monica can never reveal the amount of the settlement. Monica accepted the $200.000 when all that was asked for was $100. I’ll take your offer back to her and let you know.000. 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.She: authorized to pay $200.000.
The degree of detail and formality of a written document will. when they engage in honest “give and take” negotiations. “That may be what I said.” By the same token. Think of how often you have said to someone. of course. and contract. a written document is hardly necessary. A union contract. Unfortunately. When two friends agree on what movie to see. A Communication Hearing is not necessarily the same as listening.” Clear communication is essential if you want to reach an agreement and have it abided by. it is much more effective in the long run when the parties enter into “win-win” agreements. In Tactic #17 (Package Items). depend on the kind of negotiations in which you are involved. Certainly someone has said to you. If the agreement reached at the time had been put into writing with all three sisters signing it. Putting an agreement into writing serves three purposes: communication. As these examples of personal and business negotiations show. even an informal agreement benefits from some type of written documentation. rather than attack each other. most certainly needs to be in written form. commitment. the three sisters reached an amiable agreement. it would have been easier to resume negotiations at a later date.SECTION IV: PUTTING THE AGREEMENT IN WRITING s you can see. One way to help the parties abide by an agreement is to put it into written form. but some of the decisions were put off for a couple of months. talking is not always the same thing as communicating. operating under an agreement after it has been reached can be even more difficult. Putting the Agreement in Writing 191 . then the parties have to abide by the agreement. however. I thought you said something else. and when they agree to solve problems together. Reaching an agreement is the first step. “Oh. However. reaching an agreement is sometimes a long and difficult process. but it was not what I meant.
or movements being used by the sender.” In Tactic #14 (Don’t Always Hide Your Weaknesses). the opportunity for the sender and the receiver to misinterpret is greater than if the communication is first spoken and then written. Negotiations are often necessary because there was a “misunderstanding” that could have been avoided if the parties had put their agreement in writing. In Tactic #4 (Use Objective Criteria). he can be reminded of the details because it’s all there in black and white. 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.Communication is a process that involves a sender and a receiver. or movements. When you create a written record of the details of an agreement. And because the sender and the receiver are two unique individuals. The receiver has to decode the message being sent by trying to understand and interpret the words. seek information. 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. sounds. Commitment Reducing an agreement to writing often forces both sides to truly commit to the agreement. nine hundred and forty-four dollars—$22. pictures. Oftentimes just seeing the agreement in black and white conveys its import as well as or better than hearing about it. Who isn’t excited about buying a brand new SUV or truck? Until. His mom could more easily enforce the agreement if she had it in writing. If Jason fails to live up to his side of the deal. When communication is limited to the spoken word only. Jason agreed to change his study habits if he couldn’t pull his grades up by the end of the semester. The sender wishes to convey an idea.944. you have created something tangible that can be referred to in the future when memories become fuzzy. a couple of months away. pictures. or express a thought or emotion through words. 192 50 Practical Negotiation Tactics . sounds. the message being conveyed and received might be understood differently. the price is spelled out in the loan document as “twenty-two thousand. that is.
Contract Finally. say. WHO? Provide of the full names the parties necessary to the agreement. when. which. the address and description of the real property. and so on in standard contract form. Putting the Agreement in Writing 193 . how many. where. leading to misunderstandings and contract disputes. protect yourself by having a written. which kind of. Your spouse will share some responsibility for failing to make that duty clear in the agreement if. what. pulling an agreement in writing. the real estate contract includes information about the buyer and seller. have your spouse also agree to the details of the agreement. your plants die because the house-sitter wasn’t told to water them. However. Both parties must receive a benefit or something they personally consider of value. details such as what fixtures stay or what appliances go can be easily overlooked. why. If you have agreed to pay someone to house-sit while your family is on vacation. dating it. one party will work if the other party pays for the work. When you are ready to commit yourself in writing. as many people learn when they purchase a home. and how much. in writing. and put that information into the document. and dated agreement. Here’s what we mean. Generally. or it isn’t an agreement—it’s merely the conveying of a gift. 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. and getting all the parties to sign it usually creates an enforceable contract. signed. 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. In either case. One party wishes to buy what the other wishes to sell. one party will change behavior in exchange for something of value from the party who wants the behavior changed. Carefully and completely describe the subject matter of the agreement. ask yourself the basic questions of who. WHAT? The written document should clearly describe the item(s) covered by the agreement. before the trip. You can do this more formally by taking them to court (perhaps as a last resort). Failure to do so can lead to big problems.
how much or how many. The more-specific and clear these details are. And it can create a tangible reminder of the deal (or an enforceable agreement. Putting an agreement in writing. agreed to the same thing. dating it. which one or which kind of. in fact.The remaining questions fill in the details of the agreement. depending upon the deal: when or where. It gives the parties an opportunity to really buy into the deal. and having all parties sign it ensures that the parties have. 194 50 Practical Negotiation Tactics . the better. if that becomes necessary).
Personal Negotiations Negotiation situation: Parties involved: Issue: Tactics that might be helpful. and how they can be used: Exercise Forms Putting the Agreement in Writing 195 .
Business Negotiations Negotiation situation: Parties involved: Issue: Tactics that might be helpful. and how they can be used: 196 50 Practical Negotiation Tactics .
________________ Tactic# How will I use this tactic? (Application) _________________ _________________ _________________ _________________ _________________ _________________ _________________ _________________ _________________ _________________ ______ ______ ______ ______ ______ ______ ______ ______ ______ ______ Notes Putting the Agreement in Writing 197 .Name of Negotiation Tactic 1. ________________ 4. ________________ 9. ________________ 7. ________________ 3. ________________ 6. ________________ 10. ________________ 8. ________________ 2. ________________ 5.
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Patrick J. Fuller. Calif. C. Domenici. Roger. Inc.. and J. and C. Lewicki. Eshelman. Getting Together: Building Relationships As We Negotiate. Oakland. References 199 . Cleary. Fisher. M. 2004. McKay. 1991. Clark. Cohen. R. W. The Negotiation Handbook. Inc. 2001. Inc. 1999. Brown. New York: M. Irwin. New York: Penguin Books. M. Negotiating in the Real World. and B. R. Chicago: Richard D. Saunders. Getting to Yes: Negotiating Agreement Without Giving In.REFERENCES Carrell. and S. Practice. Victor. Maddux. Prospect Heights. 1996. David. George. Inc. W. and M. Los Altos. E. University of Missouri: Columbia Press. 1989. You Can Negotiate Anything. Inc. D. Inc. New York: Basil Blackwell. The Essentials of Negotiation. 2nd ed. Fisher. Gavin. 1997.: Waveland Press. New York: Simon and Schuster. Inc. Successful Negotiation: Effective “Win-Win” Strategies and Tactics. Gotbaum.E.: Crisp Publications. Patton. 1980. and Law. 1988. M. New York: Bantam Books. New York: Penguin Books. New Jersey: Prentice-Hall. and J. Labor Relations and Collective Bargaining: Cases. 1988. 7th ed.: New Harbinger Publications. The Relaxation and Stress Reduction Workbook. R. 2nd ed. The Negotiator’s Handbook. Roger. Heavrin. Ill. Sharpe. New Jersey: Prentice-Hall. Negotiation Skills. Upper Saddle River. 1991. LittleJohn. K.. Ury. J. Mediation. Pocket Negotiator. 1987. Calif. 2001. and S. Herb. Upper Saddle River. Kennedy. Fiske. Minton.
C.negotiationsources. Weeks. Lectures on Negotiation Analysis. New York: Simon and Schuster. Upper Saddle River. The Art and Science of Negotiation. Howard. 1981. Inc. New York: Viking Press. 1982. Labor Relations in a Global Economy. Inc. Sharpe. Howard. William. J. Shell. Stulberg. Taking Charge/Managing Conflict. 1998.E. Massachusetts: PON Books. Heath and Company. George. www. The Eight Essential Steps to Conflict Resolution.org 200 50 Practical Negotiation Tactics . 1999. Ury. 2001. Thompson. 1994. Lexington. New York: Penguin Putnam. 1991. Raiffa. New York: Bantam Books. G. The Art of Negotiating. New York: M. Inc. Raiffa. Cambridge. Massachusetts: Harvard University Press. New Jersey: PrenticeHall. Getting Past No: Negotiating with Difficult People. Tsogas. Massachusetts: D. Inc. Dudley. B. 1987. R. Cambridge. Bargaining for Advantage. The Mind and Heart of a Negotiator.Nierenberg. Gerald I. 1996. L.
Bakersfield. The Personnel Administrator. Human Resource Management. Marshall University. she has helped negotiate a number of major agreements such as a multi-million dollar property exchange that relocated major industries and railroads from the City’s downtown wharf resulting in the development of both an award winning public About the Authors 201 . and negotiations. Organizational Behavior and Human Performance. Carrell is Dean of the College of Business at Northern Kentucky University. M Christina Heavrin J. has practiced law for 28 years primarily in the public sector as an attorney for local government in her hometown of Louisville Kentucky. During his academic career he has received awards for both outstanding research and teaching. He received his doctorate from the University of Kentucky. Carrell has held academic positions at California State University. Dr. Business Forum. Books published by Dr. and served as President of the Board and Mayor Pro-tem for three terms. In addition. In addition to negotiating numerous litigation settlements and contracts. HR Magazine. and Public Personnel Management. in Economics from the University of Louisville. Personnel Journal. Labor Law Journal. organizational behavior.ABOUT THE AUTHORS ichael R. Most of his professional career has been spent in the Louisville area and has included positions as a personnel director and labor negotiator. Morehead State University. Personnel.D. The Academy of Management Review. and the University of Louisville. and MBA and B. Carrell are in the fields of collective bargaining and labor relations. He has authored over 50 scholarly works in some of the leading management and human resource journals including The Academy of Management Journal. which is located in the greater Cincinnati area.A. The University of Nebraska-Omaha. The Journal of Accountancy Training. These positions enabled him to build a sizable management consulting practice while teaching at the University of Louisville. he was elected to the City of Louisville Board of Aldermen for five terms.
Jefferson County. the City and a for-profit hospital for guaranteed indigent health care services for city residents. a tax sharing agreement between the City of Louisville and Jefferson County that enabled the two governments to share revenue of over two hundred million dollars and to combine their economic development programs. an agreement between the State of Kentucky. Ms. 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.park and a successful industrial park in the City’s enterprise zone. Recently voters approved the merger of the City of Louisville and Jefferson County Governments. a multi-million dollar expansion of Waterfront Park that included a major environmental clean up and the construction of a Minor League Baseball stadium in downtown Louisville. 202 50 Practical Negotiation Tactics .
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