This action might not be possible to undo. Are you sure you want to continue?
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
Most readers will no doubt recognize some of these strategies. with neighbors. some will in retrospect even remember being the victim of one or two of them. 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. This book is designed to give the reader an understanding of the negotiation process by presenting fifty proven. 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. • A co-worker asks for volunteers for a new project. such as these: • You receive the wrong order at a restaurant. Who. few people understand that normal interactions represent bargaining opportunities. at a flea market. with family members. accept what is given. But if you scored 8 or less. • A child wants a new toy now. they pay the sticker price. but many of us miss the opportunity to bargain in other situations. practical tactics useful in real-life situations at work or at home. Instead.negotiator! Pass this book on to someone else who needs it. 4 50 Practical Negotiation Tactics . Unfortunately. 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. or engage in an unproductive argument.
some resolution must be negotiated. A service repair person gives you an estimate on some work. Flexibility. All of these situations are opportunities to negotiate. Mutual goals. For example. A teenager wants to buy his/her first car. such as price. Your spouse wants to buy new furniture. you must advise the other party of your intention to negotiate. and I don’t have time to wait for another. perhaps you can say to a hotel clerk. There are flexible elements to the situation. Each one has the five key characteristics necessary for bargaining: 1. since you lost my reservation. and each side can involve one person or several people (each representing one “side” of the issue). Interdependency. There must be a conflict in the sense that what one wants is not what the other wants. Decision-making ability. be prepared to bargain. what can you do for me?” Or this to a restaurant manager: “This food order is wrong. one party is only allowed to follow policy or must wait “until the manager arrives. In some circumstances. The parties involved can make a decision by themselves. 4. 2. The parties involved are interested in reaching a common goal. Therefore. Two or more sides are involved. Your boss reviews your past year’s performance. Both sides want a settlement. 5. A friend is about to select the movie he/she wants everyone else to see. condition. The parties are interdependent: what one party does affects the other. or items of value.” When you recognize that something can be negotiated. “Well. perhaps the employee can say.• • • • • • • A hotel clerk tells you that your reservation was lost. that can be negotiated. In some situations. 3. time. Multiple parties. What are my alternatives?” During an employee evaluation. “I’d like Introduction 5 . A neighbor wants to remove an old tree on your property line.
Scenarios based on actual real-life situations are used to show how each tactic can be used in business or everyday situations. and meet with you again. the other party will realize that you intend to negotiate and do not accept the situation. and use the forms in the back to identify the issues. How can you compensate us for our loss?” Once you’ve suggested that you see the situation as something to be negotiated. the parties and their interests.” To a neighbor you can say. the facts. 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. negotiations can be concluded with a written or oral agreement. 6 50 Practical Negotiation Tactics . and the tactics that might move the negotiations along. Choosing and applying the appropriate tactic to a particular situation will become easier as you begin to use them. “I see why you want to cut down the tree. Once a settlement is reached.time to look over this performance review and respond point-by-point. You can then use one or more of the tactics presented in this book to achieve the best possible settlement. Keep this book handy when preparing for any type of negotiation. but I believe it adds value to our house.
have you routinely resolved differences with a neighbor or a friend through a negotiated agreement? 5. have you ever required a written agreement covering chores. When making a major purchase. In the past.How good are your negotiation skills? Place a check in the box that applies to you. Do you routinely negotiate for better accommodations when you check into a hotel? 3. The last time you received sub-par service or food in a restaurant. allowance. spouse. As a parent. or child. do you routinely negotiate a last add-on before you close the deal? 9. Do you wish you could negotiate a change in your job duties or salary? 7. Have you ever found yourself in a negotiation situation in which your best alternative was to walk away. did you request appropriate compensation? 6. etc. In the past. but you did not? 8. have you ever felt that you were not adequately prepared to negotiate a job offer? 2. Yes No Self-Assessment Quiz 1.? 10. Do you often refrain from negotiating a better price or service because you believe that you do not have good negotiating skills? Introduction 7 . When you purchased your last home or car. do you believe that you negotiated the best possible deal? 4. or division of household duties.
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The Quick Model The easiest way to prepare for a simple negotiation is to identify all the issues. Then classify each one into one of three categories: Compatible (Integrative or Win-Win) Issues: Those issues for which both parties might have the same desirable outcomes. • an allocation for moving expenses (employee goal) traded for a set number of travel days per month (employer goal). one for another. decide how complicated the issue is. etc. On the other hand. Examples: • office location (city. The Negotiation Process 9 . Examples: • a signing bonus (employee goal) traded for an annual travel budget (employer goal). if the situation involves a number of detailed or complicated issues or the stakes are relatively high. If it is a relatively informal situation.SECTION II: THE NEGOTIATION PROCESS Before you begin the process of negotiation.) • primary sales territory • a starting date Exchange Issues: Those issues that might be traded. thus allowing each side to achieve one of their goals. the process will be fairly straightforward. state. including those that are less obvious. They’re referred to as “win-win” because each side can achieve their goal. the process will probably take several weeks or months as the parties move through all the stages. The “Quick Model” approach outlined below is good for simple negotiations.
the other side loses. rearranged. but feel free to try them when they seem most appropriate to your specific circumstance. What one side gains. Depending on the situation and the parties involved. Examples: • an item sold by one party and bought by the other • wage increases won by one side. 10 50 Practical Negotiation Tactics . stages can be combined. The Comprehensive Model Negotiation is more of an art than a science. 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. or even skipped altogether.Distributive (Win-Lose) Issues: Those issues that the parties are directly at odds with.
Power #1– #6 Stage 2 Strategy: Choose Overall Approach to the Process #7– #14 Stage 3 Initial Offer: Getting Started Stage 4 Counter Offer: The "Give & Take" Stage 5 Pressure Bargaining: Striving for Conclusion Stage 6 Key Methods: Achieving Progress Stage 7 Reaching Agreement: Settlement of Impasse Tactics to Consider #15– #21 #22– #31 Negotiation Phase #32– #38 #39– #46 #47– #50 Initiation Phase Resolution Phase 11 . Information.The Negotiation Process Table 1: The Negotiation Process: Seven Basic Stages Stage 1 Identify situation as one for negotiation Preparation: Key Factors – Time.
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SECTION III: 50 TACTICS FOR SUCCESS
Stage 1: Preparing to Negotiate
n many negotiation situations, the parties have time to prepare for the actual bargaining. In other situations, such as when you’ve been served something at a restaurant that you did not order, there is no time to deliberate. You have to be prepared to instantly recognize that the situation can be negotiated, and begin to bargain. You can have time to prepare if you simply ask for it. For example, at the end of an employment interview for a management position, the candidate was surprised to receive a job offer on the spot. The candidate wanted the job, but wisely recognized that she could negotiate the contract. She said that she was very interested, but needed forty-eight hours to make up her mind. She used the time to talk to current employees, and developed a list of perks and conditions that she then negotiated, before accepting the position. To prepare for a negotiation, do as many of the following activities as you can: 1. Have realistic objectives. Identify everything that can be negotiated, and set realistic objectives for each item. If, for example, price is a factor, determine the desired outcome and set a minimum (or maximum) acceptable outcome, beyond which you will walk away and choose another alternative (see Tactic #1: Know Your BATNA). Also determine your opening offer in light of your desired and your minimum outcomes. It is often helpful to list each specific item to be negotiated and your minimum acceptable offer for it, as well as your desired goal and an acceptable opening offer (see Tactic #5: Listing Items). Thus, for each factor, write down and stick to three figures:
1. An opening offer. 2. The desired “best” offer. 3. A minimum (or maximum) “worst” offer. 2. Learn about your opponent. By whatever legal and ethical means possible, learn everything you can about your opponent. Talk with friends, neighbors, co-workers, past negotiation foes, even family members. If you are able to guess or find out about your opponent’s real objectives and/or limitations, you can gain an invaluable edge (see Tactic #2: Know Your Opponent’s Real Objectives). 3. Gather all the facts. During the heat of negotiations, presenting critical facts or objective criteria can turn the tide in your favor. You can usually anticipate and collect this critical information in advance during the preparation phase (see Tactic #4: Use Objective Criteria). 4. Set ground rules. In labor negotiations, the parties first agree to ground rules such as where, when, who, and how often the negotiation sessions will occur. Detailed ground rules are not needed in most everyday negotiation situations, but there are times when they help people come to agreement. Agreeing in advance on the location for discussions can give one side an advantage (see Tactic #3: Control the Setting), but in other situations, the critical ground rule will be about timing (see Tactic #6: Timing is Everything), forcing both sides to reach agreement faster. In negotiating with family members, friends, or neighbors, one well-advised ground rule is to stop the talks as soon as anyone raises his/her voice, curses, or makes a threatening comment.
50 Practical Negotiation Tactics
Tactic 1: Know Your BATNA
At what point will you walk away from the negotiation? You improve your position in any negotiation if you can walk in already knowing your BATNA—your best alternative to a negotiated agreement. The BATNA is the outcome you prefer over what the other party has proposed; if you define it at the outset, you are less likely to agree on something during an emotionally charged discussion and regret it afterward.
Harvey Huff bought a new 1956 Chevrolet from a local dealer. After forty years, he finally decided to sell the car he had loved and carefully maintained in original condition. Harvey did not need the money, but he intended to move three thousand miles away, to a condo in Arizona. The ad he placed in the local newspaper produced only one potential buyer: Patrick Knight. Harvey: Mr. Knight: Harvey: Mr. Knight: Harvey: Mr. Knight: Harvey: Mr. Knight: Harvey: Mr. Knight: Harvey: Well, now that you’ve checked it out, how do you like it? It’s in great condition, just as you described it. Any questions? Will you take less? No. It’s easily worth at least $20,000. That’s the price. $18,000, tops! No thanks. Okay. $20,000. I need it for a new restaurant. Restaurant? Yes. We cut off the top of the vehicle and people sit in it and get served their meals in our “oldies dream car!” Never mind, I’ll keep it. I haven’t maintained it for all these years just so you can destroy it.
as Harvey had for many years. Conclusion Selling their business was the Jaggers’ BATNA. was a power play. and equipment. They told the union that their age and the fact that they had no heirs to carry on the business was leading them to seriously consider selling out and permanently closing the doors. and it now employs 230 craftsmen. In this case. which the Jaggers believe will cause them to increase prices to the point where they will no longer be competitive with other West Coast firms.” which was refused. The Jaggers gave the union their “last. but rather what the buyer planned to do with the car. as a last resort. For the past two months. notified all the employees of their intentions. and final offer. They learned that their assets would be easy to sell and were worth more than originally estimated. labor contract negotiations between the Jaggers and a local labor union representing the pottery’s craftsmen have stalled. The union negotiators convinced the employees that this too. The union negotiators thought the Jaggers were bluffing. inventory. When negotiations with the union became hopeless. providing them with a very good income for life. The $56 million dollar business took them 30 years to grow. and the Jaggers decided once and for all to sell their business assets and invest the proceeds conservatively.Conclusion Harvey’s best alternative—his BATNA—was simply to hold on to the car for the moment. Example 2 Shari and Jim Jaggers own a successful West Coast pottery company. 16 50 Practical Negotiation Tactics . The threatened strike became a reality. and either move it with him to Arizona or find another classic car collector who might buy it (perhaps for less) and preserve it. best. selling became an attractive alternative to a strike or prolonged battle. the Jaggers decided to seek buyers for their land. With only two weeks remaining before a threatened strike. The union is demanding wage and benefit increases. The owners. his BATNA was not to hold out for more money.
what the other party’s desired outcome is. Gosh. she might have to take a lower offer just to be able to move. sure. right? John: Sure. you still interested in my rifle? Of course. at some point. it’s to your advantage to know what is behind a seller’s decision to put it on the market.000? That’s more than I planned. 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. A person who has to sell her home because her company is relocating her. I’ll have to think about that. Just running out of space. I think so. What changed your mind about getting rid of it? It is still in perfect condition.000. Just as important is the why.Tactic 2: Know Your Opponent’s Real Objective Each party in a negotiation will know. John assured Tom that this would never happen. John: Tom: John: Tom: Tom. for example. This is a good thing to know. Preparation 17 . I guess I couldn’t take less than $20. If you are the party making the offer on the house. because if the company does not provide relocation benefits. I’ve been thinking of getting rid of it for a while. it’s still perfect. It is extremely rare—one of only 100 made with that bore and handle. Tom: $20. might not be willing to lower her asking price because she knows that her company has agreed to buy the house if she can’t sell it. and told John several times to let him know if he ever wanted to get rid of it. Are you finally ready to sell it? Yes. Example 1 Tom had always admired John’s 1861 Confederate rifle. How much are you thinking it’s worth? John: Well. so Tom was surprised when John called him out of the blue one day with a proposal. Make me an offer. you know.
(Tom investigated the “market” for a restored 1861 Confederate rifle by calling a few other collectors. and we’re committed to keeping it open as a major division of our company.500—we’d have a deal. The sale price for the company has not yet been agreed to. He doesn’t want BigManu to know this because he thinks it will hurt his negotiating position. Rick needs to remain president of the company for the next two years. if you could come up a little—say $18. but then he will be happy to retire. He is two years away from retiring and does not want his business to fail before he does. Without some trust. we 18 50 Practical Negotiation Tactics . fearing that this will put all of his employees out of work. John: Well. so he is making it a condition of the sale that ALL current employees must be retained for a minimum of two years. Tom: Okay. Well. However. Conclusion Tom entered into the negotiations suspicious of John’s motives. but thought this might explain John’s sudden interest in selling the rifle. let me think about it and I’ll get back to you. Tom now felt comfortable negotiating the price. the owner of a small manufacturing company.000. No longer worried about John’s motives.Tom: Okay. BigManu: Rick. and now the two-year requirement has become a stumbling block in the negotiations. let’s do it. Example 2 Rick.) Tom: John. it made the negotiations easier. but I could get the money to you right away. When Tom found out why John decided to sell his rifle. I don’t think I can go higher than $18. has begun negotiations to sell his firm to BigManu Company. we really want to buy your company. One of them mentioned that someone who is negotiating with him to buy a restored Winchester rifle for $18.500 had an 1861 for sale. I’ve been thinking about your offer. Was Tom interested? Tom declined. parties to a negotiation are not likely to reach agreement.
Let’s talk later. Preparation 19 . I just want them to have a real chance to show you how good they are.) BigManu: Okay. Working as a division of your company. they will make you plenty of money and more than make up for any “operational” difficulties it might cause you. The price they gave Rick was actually more than he had expected. Within the parameters of efficiency and effectiveness. and I hired every one of these people. (Between negotiating sessions. they decided to put their price on the table and revisit the issue after a price was agreed upon. We just can’t make good operational decisions with our hands tied. I need to give them some sense of comfort if this deal goes through. I just don’t want it to change after I’m gone. Rick: I built this business from the ground up. BigManu: You know we want you to stay on and manage this division for us. 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. you will have a say in how the employees are treated. In hopes of pushing the deal forward. Without this commitment. let’s talk about the job guarantee you wanted. BigManu: We just don’t see a way to give you what you want on this. I just can’t go through with this sale. Rick: These people are the best at what they do.cannot guarantee to you that ALL of your employees will be retained for two years. We still can’t find a way to do it. You’ll be in place to participate in our employment decisions. and we think it’s an odd request anyway. and he accepted it subject to agreement on the two-year employment guarantee clause. BigManu’s negotiating team concluded that they were in the dark as to why this two-year requirement was so important to Rick.
Surely you’ll be able to “protect” your people if they are as good as you say. to tell you the truth. I certainly want to do all I can until then to protect my people. would it? Rick: Well. Once Rick realized that he no longer risked anything at the negotiating table by making his need known. that might work. but we won’t be completely tied to operations as they are now. This wouldn’t have anything to do with your own plans for the future. Let me get back to you.BigManu: We intend for you to stay and become a big part of our company. Rich almost lost the deal. BigManu: Why don’t we guarantee to you that you will stay for two years? That way. you’ll have a guaranteed “in” to protect your people. he agreed to allow BigManu to accommodate him without limiting their ability to make business decisions. I’m hoping to retire in two years. Rick: Well. 20 50 Practical Negotiation Tactics . Conclusion By masking his real objective (giving himself two more years as president before retiring).
but never to THEIR advantage! Example 1 (Two ten-year-old girls are talking. Mother: Hush. the frog is everybody’s favorite. 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. they have the information they need at their fingertips. girls. it’s a deal. Make up your minds.) Let’s take all our Beanie Babies to my house to trade! Okay. they control the breaks and environmental factors. (thirty minutes later) Bailey: So. and go play somewhere! Cybil: Well … Okay.) Prepare for the negotiations by controlling the setting—to your advantage or to mutual advantage. 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. I like the frog. (Think of the showroom tactics used by car dealers. Bailey: Cybil: Preparation 21 . too. and so on. Cybil.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. such as a hotel conference room.
as long as they met in the boardroom of Team B. was still going strong. in their own familiar setting. Team A agreed to change the meeting place. although only ten years old. Team A agreed to a settlement almost identical to the one rejected days before. not one member of Team A was chosen to return to the table.Conclusion Bailey. while members of Team B were able to stay fresh. until we have a settlement. Conclusion Team A did not realize the practical advantage they gave Team B when they agreed to negotiate in B’s boardroom.” The chief negotiator for Team B agreed. having set up beds. The chief negotiator for Team A publicly challenged Team B to “negotiate non-stop. meals. around the clock. They had all been replaced after their decision to negotiate “around the clock” in Team B’s boardroom became known. 22 50 Practical Negotiation Tactics . That’s why she wanted to go to her house. non-stop negotiations wore down the members of Team A. They were blamed for accepting the same deal that had been rejected only days earlier. Example 2 Two five-person negotiating teams had been trying to work out a deal for over a month. and other conveniences in the adjoining room. Both sides desperately needed to settle a property dispute. Team B had clearly used its home turf to gain a substantial advantage. Team B. knew that her sisters liked the frog best and that they would help convince Cybil of its “value” and help Bailey make the trade. About thirty-six hours later. Team A was whipped physically and emotionally. When negotiations resumed in two months over another piece of property. After forty hours of negotiating. The physical and emotional demands of 24-hour. The firm deadline was only four days away.
I was kind of surprised at how high it was. based on objective criteria (think property appraisals in real estate). it became clear that all of those pipes had to be pulled and new ones put in. though. Larry: Well. Larry: Just make sure you’re comparing apples to apples. I anticipated much less work. I would have charged anyone else much more. When you first told me about your project. I gave you my “family” rate. Will: Larry. Believe me. Will is a licensed plumber. I did get some estimates from plumbers. rather than give them the “advantage. but was shocked at the amount of the bill. and they were much lower than this. After all. these plumbers certainly acted like they understood the work when they gave me their estimates! Will: Tell you what. when Will presented Larry with his bill. and he and Larry have always gotten along. and show them the actual work that got done. about your bill. Larry: But Will. This uncomfortable negotiation followed: Larry: Will.” This can hold up an agreement and cost you in the end. If they tell us that they either Preparation 23 . Example 1 When Larry’s cousin offered to help Larry finish the renovation on his bathroom. Prepare for the negotiations by having an outside authority measure or weigh in on each side’s position. Things turned sour.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. It was twice as high as the estimates Larry received from other plumbers before they started the project. you are likely to resent them for it and hold out. Larry had expected to pay him for his time. When we got into it. If you think that the other party knows more than you do. Larry was thrilled. Let’s get the guys back in who gave you estimates.
I’ll revise my bill to meet the lowest estimate you get. she had been investing the college’s endowment funds for many years. Comparing the estimates to Will’s actual costs would have been counterproductive. From a look at the portfolio. they said. Larry: That sounds fair. and no one had ever questioned her performance.disagree on the need for that work or that they would have done it for less. Example 2 After Stuart was appointed to the college’s Board of Trustees. because (as Will pointed out) it wasn’t an apples-to-apples comparison. and decided to bring the matter up at a Board meeting. my first reaction was that some of the investments 24 50 Practical Negotiation Tactics . they had to agree that their early estimates were low. The chairman of the Board suggested that Stuart and the budget officer meet to discuss the investment policies and practices as they relate to the endowment funds. I have been very diligent about making sure that the fund makes the most money it can without putting us at risk. Settling on the right objective criteria upon which to base a negotiation requires that both parties think through their options. Conclusion When the other plumbers looked at the work. I find your suggestion to the Board that I haven’t been doing my job right to be very insulting! Stuart: I’m sorry. while she wasn’t an expert. He was disappointed in the performance of the fund. they would have had to revise the figures. Budget Officer: I don’t know what your problem is. Had they actually prepared bids on the work. The estimates would have been higher than what cousin Will charged. The college’s budget officer was understandably offended. he used his financial expertise to analyze the investments of the college’s endowment fund. I certainly didn’t mean to offend you.
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. then you and I can talk about changing our investment strategy. but some of these stocks have really lost their value. I find that a more aggressive investment strategy produces a better return. considering commissions and all. 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. but I want to be involved in the discussions with them about what we’re asking. Stuart: No problem. Budget Officer: Yes. As you know. there might be increased risk and some expenses for commissions. Stuart: Yes. but such a strategy also increases risk and costs more money to administer. I have a suggestion. In this situation.were stale. but we can ask them to plan and cost out each move. We just can’t make up losses to the endowment fund without considerable impact on our annual budget. how can we identify the right parties? Conclusion The two-month experiment did produce the results Stuart had anticipated. and its resources are limited. the college is a private institution. Okay? Budget Officer: Okay. but I think they more than offset the gains. Preparation 25 . Now. At the end of two months. and the budget officer was comfortable that the risk and expense of such a strategy was small and worth the effort. if both of them demonstrate a similar strategy and produce better results after expenses. I don’t want you directing how they’re going to go. I don’t question that they were sound at one time. because she did not have the background in investments necessary to trust such advice.
not just an allowance increase! There is: (1) a $10 increase. Once you both agree on the list of things to be negotiated. and for going out with my friends. cut the grass. a sixteen-year-old who lives with her parents and three younger sisters. your little sisters will want equal treatment. Shari: Well. baby-sit your sisters. Example 1 Shari. Shari: I’m four years older than the next-oldest. wash the cars. has asked her mother for a $10/week increase in her allowance. (2) a later curfew. Mother: That’s a large increase—and we just raised it last year! Shari: Well. besides washing the dishes every night and cleaning my room? Mother: You could cook dinners. and ask the other party to add to the list. if I give you an increase.Tactic 5: List All Items to Be Negotiated Break down the issues to be worked out into separate items ahead of time. This strategy can build trust in the negotiation process itself. you should each put together a “package” of several items on the list and work out a win–win agreement for these things. Mother: But your allowance is based on what you earn in your weekly chores. 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. what else can I do. not on what you want to spend. I need more money for clothes and CDs. It will cost me more than $10—about $35 per week. and (4) different treatment from your sisters! 26 50 Practical Negotiation Tactics . (3) more chores. You can’t treat me the same! Mother: Well—so we’re talking about several issues.
in the first session. Shari: (pause) I like it! Conclusion Shari’s mother helped negotiations along by listing all of the items being discussed. Management agrees. Shari got the $10 she wanted and a later curfew. Union: We will agree to your proposal on item #6 (the number of paid holidays) and item #14 (the new overtime hourly rate). you get to stay out an hour later that night. Now we have a package deal to propose … Preparation 27 . since all of their items were included as requested. An allowance increase. while the mother won a Saturday house-cleaning and a night out each week. and item #23 (the wellness program voucher). The trading of items (where initial demands are discussed and agreed upon) begins. but unlike your sisters. The union’s chief negotiator. if you agree to our proposals on item #3 (the paid vacation schedule). was avoided. I’ll pay you $10 to babysit every Wednesday night. item #11 (the clothing allowance). while your Dad and I go out. Now it is time for each side to list their desired outcome for each item.Shari: Right! Mother: So … I suggest no allowance increase. opens by proposing the list of items. Then a “win-win” solution could be determined. which the other children would have requested as well. 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. Management: (after calculating the total value of the five items during a break period) We agree to your package of five items.
28 50 Practical Negotiation Tactics . other trade-offs are proposed and agreed to until only a few items remain.Conclusion In most labor negotiations. thus removing them from the discussion table. Then negotiations can resume on the remaining 43 items. the two sides will at this point sign and date the list of proposed items.
say. As the man got out of his car. time of day. thanks. my name is Bob Hillard.Tactic 6: Timing Is Everything The exact month. the following conversation occurred: Bob: Car owner: Bob: Car owner: Bob: Car owner: Bob: Hello. Not even for. but money doesn’t mean anything to me at this point in my life … Well.000? No. 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. (For the next three years. One day. on Briarwood Road. and general circumstances under which negotiations take place can substantially impact the outcome. I live a few blocks from here. Prepare carefully. I love this car—restored it myself. day. Would you possibly be interested in selling it? No. as he left the supermarket. He stopped and knocked on the door. Hi! What can I do for you? I’ve admired your ‘63 Impala for years. Bob made it a point about once a month to go out of his way and drive by the man’s house. One day. just out of curiosity. Bob followed the man home. he noticed a FOR SALE sign in the yard. That’s a generous offer. which turned out to be only a few blocks from his own house.) Preparation 29 . and do your homework. he saw an elderly man get in his dream car and drive away. $12. It was nice meeting you. Timing is everything! Example 1 Bob Hillard had been coveting a turquoise 1963 Chevrolet Impala Supersport convertible for several years.
The partner organization. the timing of his second effort was perfect and it enabled him to negotiate for the car of his dreams. The board members had met twice before. that’s a fair price.Bob: Car owner: Bob: Car owner: Bob: Car owner: Bob: Car owner: Hello! I noticed your FOR SALE sign. and a twelve-member board of a large non-profit organization was holding a special meeting to decide whether or not to enter into a multi-million dollar capital project with a partner organization. beyond which the project would have to be abandoned. had issued a deadline of December 31st. Then it’s a deal? Yes. I can’t take it with me. and I promise to take good care of it. (after a careful inspection) It’s a very nice car! I’ll give you $12. and wondered if your ‘63 Impala might also be for sale … (obviously not remembering Bob) Well. and the vote was a 6-6 tie each time.m. as a matter of fact. so I guess I will be selling it. Example 2 It was Sunday. Conclusion While Bob did not achieve his goal during his first negotiation effort. resulted in another 6-6 30 50 Practical Negotiation Tactics . Well. Can you come back on Monday at 10:00 a.m.000. A third vote at 3:00 p. the proposal would die at midnight. for tax reasons. Follow me. I’m moving to California to live with my daughter. I’ll see you on Monday. December 31st. to seal the agreement at the courthouse? Sure. A majority was needed to pass the partnership agreement. if a seventh vote could not be found by the pro-agreement side. Can I see it? Sure.
as predicted.. and it worked.m.m. in the end. Both sides caucused: The leaders on each side met to negotiate a compromise. the pro-project leader told his members to filibuster until he gave a signal and called for another vote. Conclusion The leader of the pro-project group recognized that they might have a unique timing advantage. because one member of the anti-partnership side had to leave at that time to attend a church service he had not missed in 27 years. a member of the anti-project group left the room. the project had been stalled by 6–6 votes. For weeks.m. The measure passed 6–5 at 5:45 p. He planned for it accordingly. At 5:30 p. When the meeting resumed at 4:00 p.deadlock. and the meeting was adjourned. A member of the pro-project group quickly called for a vote after the leader gave a signal..m. timing was everything.. Then. during an hour break in the meeting. That effort failed. Preparation 31 .. the leader of the pro-partnership side heard someone say that the meeting needed to end by 5:30 p.
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for example. In some cases. Identify all outside influences and hidden agendas before you develop your strategy. as well as their bargaining history and financial and political positions. you must first evaluate your needs and those of your opponent. 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. such as actively trying to keep one of the two parties from winning a contract or influencing a colleague or spouse to accept an offer for personal reasons. After you have evaluated these factors. decide whether the negotiations should be continuous. If you prefer to take a firm and direct approach. Some of the tactics listed in this book are only suitable for single-session negotiations. but in practice it will likely influence the whole process. Look at the personalities of each negotiator and see which side will be more vulnerable to pressure bargaining (Stage 5). Before you can do this. Third parties sometimes have their own hidden agendas. A favorite strategy of some successful negotiators is to start with an extremely low or high offer (Tactic #7: Decide How “High” is High) in the hope that the other T Planning a Strategy 33 . uncaring approach (Tactic #9: Control Your Emotions. as it can substantially alter the negotiations between two primary parties.Stage 2: Planning a Strategy he next stage is critical: Choosing a strategy. Tactic #12: Find Common Interests can be helpful. The overall strategy chosen does not limit the use of other tactics. might step in and help settle negotiations between a union and administration negotiators. and Tactic #48 (Walk Away). For example. Are there any outside people who might influence the process. Tactic #43 (Nickel and Diming). a third party can serve as a mediator (a legislative body. Be sure you are aware of this at the beginning. and Tactic #10: Make a Reciprocal Buy-Sell Offer) are also useful alternative strategies. such as a buyer and a seller or a city and its union. such as a third-party negotiator. then Tactic #13: Set a Deadline or Tactic #11: Have an Expert Witness might be helpful. if you want to begin in a friendly. such as Tactic #19 (Make a First and Best Offer). A neutral. Tactic #33 (Bluff). or one-time-only. cooperative manner.
His teenage sons had “trashed” the house. The desperate owner agreed. The agent explained that the seller was desperate.” The agent took the offer to the seller.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. If there is a significant weakness in your position. and the buyer was able to completely renovate the house and still have a great deal. “Please make any offer—they are motivated!” The buyer responded. the seller’s agent called the buyer about the property. I offer half the asking price. 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). 34 50 Practical Negotiation Tactics . The buyer loved the location. Weeks later. half-serious. with “All right. By assuming opposing roles. For example. 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. two people on the team will be more successful because they evoke different emotions from the other side. The buyer said he wasn’t interested. 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).
with no success. Buyer: The air conditioning might have increased the value of the house. And I don’t see a lot of difference in the neighborhood. Each time. her real estate agent told her that they were probably not going to get a buyer because she is asking too much. one buyer shows some interest. we’ve put a considerable amount of money into a new air-conditioning system and in redecorating. but the house has increased in value.000. but certainly not exceptional in any way. The market hasn’t gone up that much in six years. Buyer: We really like the house. Carol wants $160. We also think that the neighborhood has improved over the last few years. Finally.000 is very high. Carol: Maybe not.Tactic 7: Decide How “High” Is High Your first demand in the negotiation process is the most important decision you will make. your request must not be so low that the other party concludes that you are not negotiating in good faith. Your demand should be high enough to give you room to compromise. Anyone buying the house would want to change wall colors or add new carpets. Example 1 Carol has been unhappy with the house she and her husband bought six years ago. However.000. but not so high as to end the negotiations before they begin. You are not likely to get more than you request. we think $160. It’s a good neighborhood. it is likely that your opponent will. Planning a Strategy 35 . so do not underestimate what you might be able to achieve. and just refuses to reduce it. She has had it on and off the market for the last five years. Carol: We really want to sell. Be realistic. and then look at the demand from your opponent’s perspective. but the redecorating is of little value. After all. Surely there’s some flexibility in your asking price. but we simply can’t take less than $160. but quite frankly.000. First. If you consider the demand ridiculous. six years ago you bought it for $60. as well. so think this through well ahead of time.
we are certainly interested in your request to “buy” our firm name to use in your city. were still alive. enjoying a statewide reputation for quality representation. The other law firm was prepared to pay $100. though. In any event. When Carol refused to budge. the founders of the firm. The firm now had over twenty-five law partners who owned the firm and continued to benefit from the reputation and name recognition of Bits & Bites.000? Carol: We really can’t take less than $160. Example 2 The law firm of Bits & Bites was a Sioux City institution. Neither Edward Bits nor Edmund Bites.Buyer: What if we offered you $100. the buyer took it as a signal that either Carol didn’t want to sell.000 or 1% of profits (whichever is less) over the next ten years in order to use the name. as to how you think the name is going to benefit you. but they have no idea what the value of their firm’s name might be in this nearby city. Buyer: Good luck!! Conclusion The buyer expected Carol to counter the $100. Carol drove off a potential buyer by setting an asking price that was just too high. Inquiries to other law firms were not very helpful because in almost all of the instances. 36 50 Practical Negotiation Tactics . and then $10. or she has unreal expectations.000. 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. Here’s how the initial negotiations went: Partners: Well. 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.000 offer by coming down in price at least a little.000 immediately. We’re curious.
I’m kind of embarrassed now. Using the Bits & Bites name can only enhance our profitability. we do. that is a very high number. We should assume. Yes. Give us some range. of course.New law firm: We are establishing a partnership of ten lawyers—the top two moneymaking attorneys in each of five local firms. So. (concerned about loosing the opportunity) Wait. one of these two attorneys carries the surname of the firm they are leaving. And we. but we get to keep all of the money we’ve received up to that point. And even though you don’t have an office in our city. you have a very solid reputation there. expect to pay for that. that you anticipate to build a very profitable law firm. Let’s just pretend this didn’t happen. we want $500. then. we reserve the right to withdraw our permission. (surprised) Well. What number were you thinking about? Well. I guess this is just not something we’ll be able to pursue. Well. that’s just our initial figure. because we were not even close to that number. it would be impossible to create a new name out of the names of our key partners. We probably won’t be insulted. To offer it now would be an insult. We weren’t really thinking about that amount of money. because you are in the state capital and your firm has handled a lot of high-profile political cases. starting with the ten partners you describe. Partners: New law firm: Partners: New law firm: Partners: New law firm: Partners: New law firm: Planning a Strategy 37 . and then 10% of your profits each year for as long as you use the name. In every instance.000 initially. If at any time we feel that you have “harmed” our name. I really don’t feel comfortable doing that now. Thanks so much for meeting with me.
It immediately dropped the idea. In this situation.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. Bits and Bites should have let the prospective firm make the first offer. 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 . rather than negotiate. Either side could have asked for too much. because there was no “objective” criteria available to help them set a reasonable price. since they had initiated the contact.
And take the leaf-catcher attachment and the gas can. I heard that you want to sell your riding mower. Half what it cost us new. and I know how you take care of things.400 if the catcher and can are included. not for $1. They cost about $300. I can use them. what’s your price? Andy: $1. so I’ll take it. One member of your team acts friendly to people on the other side (the good guy) in order to gain their trust and support.Tactic 8: The Good Guy/Bad Guy Routine The “good guy/bad guy” routine is a useful one. we won’t need it at the new condo. Andy: No. I don’t know what the deal is now. Peggy: I’m hearing one thing from Paula and another from Andy. since they are sitting out in the driveway with it. you’re really moving! I hate to see you leave. Your opponents will want to avoid confrontation and unpleasantness with the “bad guy” and are likely to be more willing to cooperate with you. Andy and Paula: Yes. (bad guy) and implies that his or her side will hold firm on their demands. threatening. Andy: I want them… Paula: Go ahead and take them. angry. Peggy: That’s fair. Andy and Paula. Peggy: Planning a Strategy 39 . only three years ago. Andy: No. Peggy: I assumed they went with the mower. while another acts difficult. etc. I want to keep those.200.200! We should get $1. I’ll go home and you can call me if you two can reach an agreement. Example 1 So. Peggy. Paula: Go ahead and ride it home. Peggy: So.
causing our reps to spend hours on the road. Let’s talk. For the past three years. Sandy: What? First of all. Sandy. perhaps even unintentionally.000 in service calls last year alone because your damn people don’t take care of the equipment. Liz: But we still want to renew your contract. the quality of the technicians’ work. we’ve been fairly happy with your responsiveness. and your training programs. She realized that it put her in an impossible negotiating position. And we want to change the 24-hour service response time to 48 hours. Miguel: I’ve figured $4. your rate of $3. your account has taken too much time. firm offer if they decided to continue negotiations. She very wisely recognized the routine and forced Andy and Paula to give her a clear. Example 2 Sandy (business owner): Miguel and Liz (representatives of a computer firm). And we need to add a clause that holds your company responsible for machine damages. Sandy. You are located outside our primary service area. Miguel: But not at this ridiculous rate. We estimated that it has cost us more than $50. Miguel: Well. 40 50 Practical Negotiation Tactics .Conclusion Peggy thought she was getting the old “good guy/bad guy” routine.000 per month is one of the highest in town. And cut the training hours from 55 to 20. we’re here to negotiate a new service agreement.200 will be about right… Sandy: I can’t begin to pay that! Liz: Calm down.
Sandy believed that she was able to avoid a terrible deal and negotiate a fairly good one. I want to keep you as a customer. Sandy. 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. Sandy. 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. Any luck. with a position he knew was unreasonable. Planning a Strategy 41 . these terms will put me out of business—I’m a small 20-person operation. but Miguel’s right. What can I do? Let’s try to negotiate something reasonable before Miguel gets back. (Three hours later) I’m back. Liz. I’m afraid our relationship is over. Sandy. I’ll explain on the way back to the office. I’m going on to lunch. I’ll stop back about 2:00 p. and it’s not efficient enough anymore for us to handle smaller firms—especially those outside our region. Our customer base has grown. even though it was far above the previous contract.m.Miguel: Sandy: Liz: Sandy: Liz: Miguel: Liz: No. Miguel! We’ve worked out a deal I think you can live with.
Control your emotions and use them to your advantage! Example 1 Mike prided himself on being an informed and educated consumer. in fact. 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.10 a minute rate at my office location. I have a problem with my recent bill and my billing rate. made some very good purchase decisions for his small business. He had. He decided that the best approach was to act indignant when he spoke to the company representative. So. and might even harden your opponent into an unfavorable position (for you or for both of you). It seems that the rate you are charging me on my home phone is $1. 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. The fault was partly his because he did not stay on top of changes. How may I help you? Hello. 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. 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.Tactic 9: Control Your Emotions Stay cool. he was very unhappy. such as deals on computer packages and phone services. but I recently was sold a $. 42 50 Practical Negotiation Tactics . because we have had a sick relative out of town and we used long distance a lot this past month. Be sure that the emotion you display is calculated and strategic: A strategic flare of temper at an “insulting” offer made by your opponent can buy you time because you can make an abrupt exit from the room without having to respond to it in any substantial way. I noticed this.00 a minute.
It hasn’t been increased at any time. but this was quite a shock. I see that the rate you are being charged is the rate we offer for the type of service you have with us. I would think you would have given me the best rate you offer new customers. 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. to begin now. (beginning to sound irritated. I would have known I was paying too much. I realize that that might be the rate I started paying when I first took your service over eight years ago. we certainly would have discussed your options. Customer representative: Let me pull up your account. Had you brought this to our attention before. Well. Mike. and I also realize that if I had examined my bill closely.I expected the bill to be higher than usual. how would anyone who might only have residential service even know to ask? Well. But I am able to offer you a $.10 per minute rate on your long-distance service. But as a very good customer of yours. 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. Mike: Customer representative: Mike: Customer representative: Planning a Strategy 43 .
she kept Mike as a residential customer as well as a business customer. controlled voice) I need to talk to someone who can do it immediately. however. strategic anger and abusive behavior. The latter would not have produced the desired results. either. 44 50 Practical Negotiation Tactics . Mike’s willingness to show a measured “flare of temper” brought results. I … (interrupting and in a stern. but I can’t do that. (with a much angrier tone) Madam. I am. Is your supervisor there? I’m certain that he cannot adjust your account retroactively. which should rightly be $50. If you can’t get me someone to talk to.10 per minute. In doing so. between controlled. and I should be treated with more respect! I’m sorry. there’s no reason for this conversation to continue. 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 $. Wait—I’ll get my supervisor. but I am very angry with Over-the-Air Company. don’t think this is directed at you personally. But I’m looking at a $500 longdistance bill. a long-time customer of your company. The best we can do is fix the rate for the future. He was walking a thin line. We certainly don’t want to lose you as a customer. I would hope that you would credit my account for this better rate for past service.Mike: I would imagine so. and I want to speak to someone in authority so I can terminate my service. after all.
The most-senior employees want to have the right to refuse overtime and have those less-senior employees take the overtime. that’s just not fair. The employees’ negotiator finally decided to use “indignation” to break the stalemate. Owner: I’m just not willing to let my best people refuse to work the extra shifts during our busy season. lesssenior employees might be at greater risk of injury because they have to handle explosives. and you just can’t be too careful. On those overtime shifts. Negotiator: (now beginning to get irate) You talk about the risk to your plant if the less-experienced workers are there on overtime shifts without the senior employees. The owner told the employees that he was worried that during the overtime shifts. Employees’ negotiator: (with a stern voice) You have been saying this for three weeks. Just admit that what you really don’t want is for your best employees to realize how much of their pay is from the overtime they work. Owner: Now.Example 2 The contract negotiations between the employees of a fireworks plant and its owner had been stalled for about three weeks over the issue of mandatory overtime. and it’s getting old. Working with fireworks is working with explosives. I’ve got to have the employees with the most experience to protect this place. they would become dissatisfied with their pay and want their base pay increased. and it’s not what we’re even talking about. The owner was afraid that if the mostsenior employees routinely passed up the overtime and the overtime pay. Where are your managers? Where is the training necessary to make Planning a Strategy 45 . They will be putting the plant AND their fellow workers at risk by not being here. and that they should be asking for a fairer base wage for the work they do for you.
now. What if we were to agree that the senior employees could refuse half of the overtime offered to them.Owner: Negotiator: Owner: Negotiator: Owner: sure these employees can protect themselves? Are you telling me that your employees are being put in dangerous conditions without adequate training and safeguards? No.) Now. In practice. I’m not coming back. Either they are properly protected. or they’re not. But we protect our people. But the fireworks business is a business that involves risk. No one who takes a job with us can be unaware of that. Then you can’t have it both ways. either the employees are properly trained. You are not addressing the real issue for you: money. All I’m saying is that the most-senior employees have to be on the overtime shifts. Until you’re ready to talk about that. The negotiator was also running a risk with his flare of temper. The end result was that the most-senior employees did win the right to refuse overtime. he became more reasonable. sit down. but not all? Conclusion The owner was on shaky ground with this one. or they’re not. not at all. The safety of the plant demands it! (standing up to leave) This is just ridiculous. don’t be so hasty. most of them continued to take all the overtime they could get. Had the owner let him leave. That’s all. the negotiator would have had to find a way back into the negotiations without losing ground. After the employees’ negotiator threatened to walk out. 46 50 Practical Negotiation Tactics . Sit down. (He begins to walk out. though.
with the highest bidder paying the amount to the other side in compensation for their loss. my kids and I looked on eBay and everywhere else and found out that coffee grinders in perfect condition sell for about $500. Planning a Strategy 47 . since this one is in perfect shape and it was Mother’s. Mike: Mary Anne. Mike. you’re the oldest. However.” is the recommendation of Howard Raiffa. called the “Reciprocal Buy-Sell Offer. so you set a price at which you agree to buy or sell the coffee grinder. with winner taking all. you will decide if you want to buy it for that price or receive that amount from Mary Anne (but lose the grinder). Susan. and split the proceeds. Then Susan. (two days later) Mary Anne: Well.Tactic 10: The Reciprocal Buy-Sell Offer What do you do when both sides seek to own something when there is only one and it can’t be divided equally? You have three options: 1) Both parties can “bid” to own it. A fourth option. or sell it to the first party and consequently receive the full amount from the first party—thus giving up the object. 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. The first party decides on a price for which he or she will either buy or sell the object to the second party. 3) They can agree to sell the object to a third party. the executor of the estate. a well-known negotiations professor from Harvard University. I’m willing to pay or let it go for $800. All the rest of the estate has been divided among the family. has decided to use the “reciprocal buy/sell offer” process to settle this last piece of the estate. I’ll give you 48 hours to decide the price. 2) They can flip a coin. Both sisters covet it. The second party then decides to either buy it at that price and pay the first party.
to submit a sealed offer to buy/sell the business sixty days from today. Thanks for making this last step as easy as possible. I’ll pick it up tonight. They accepted his suggestion to use the “reciprocal buy-sell strategy. Here is my check for $800. (sixty days later) 48 50 Practical Negotiation Tactics . 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. Two business partners had been working together for ten years to build a successful business. I choose to buy it. I suggest a slight modification to the process. and then decide how much more “emotional value” it held. Agreed? Abe and Bobby: Sounds good! Let’s draft and sign a written agreement detailing the process. You will both agree. They thus were able to determine the highest price each was willing to pay for it or receive for it. Both sisters felt that the process enabled them to resolve the issue fairly. Lectures on Negotiation Analysis. Conclusion The “reciprocal buy-sell offer” process caused both Mary Anne and Susan to research the market value of the coffee grinder. After I open the bids. in writing.Susan: Mike: Well. Example 2 Howard Raiffa described a consulting situation in which he used the “reciprocal buy-sell offer” process in his book. but each partner had grown to dislike the other and wanted to end the partnership (but continue to own the business without a partner). which will bind us to the outcome. Both came to Raiffa to help negotiate a settlement.” Howard: Since in this case you are talking about a multi-million-dollar business.
And I will arrange financing to pay you $180 million to become sole owner. Bobby was willing to pay more than Abe to remain sole owner. 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 $190 million. Planning a Strategy 49 . but only if they could become the sole owner. you agree to sell your half-interest to Bobby for $180 million. Bobby.Howard: Abe: Bobby: Abe. your bid is $170 million. and we close by July 1st. I will arrange to sell him my half-interest for $180 million. The reciprocal buy-sell tactic enabled one of them to achieve his goal of sole ownership and allowed the other to feel that he had an opportunity to purchase sole ownership. Abe. Agreed. and both men had carefully estimated the market value of half the business. Conclusion Both parties wanted to keep the business.
she glanced at it and immediately deferred to his opinion. he decided upon a strategy: First establish himself as the “dimension expert. The couple decided to limit their selection to those rated “excellent. Looking at these statistics. It can also work in reverse: establishing the other person as the 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. He thus ended up having greater negotiating power. and created a spreadsheet to compare the five best-rated couches on their list. They both expressed an interest in finding a couch that offered the most “interior” space. When he showed his wife the detailed spreadsheet. so when the husband wants them to make an 50 50 Practical Negotiation Tactics . When it came to comfort. the one that was the most expensive was superior.” but there were substantial differences in price—differences that the wife did not see as a problem. Conclusion The husband became the “expert” in this situation by doing the homework. and the husband felt like he saved them hundreds of dollars. The husband found the dimensions of the couches in the brochures and Web sites. This approach can also be reversed: The wife in this situation is a banker. and forcing him or her to control the discussion of the issue. the one he wanted (one of the least-expensive) was superior. Example 1 A young couple were discussing a possible purchase of new furniture for their living room. Based on seating capacity. The wife was determined to buy the least-expensive brand rated excellent by consumer publications. This strategy worked. 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.” and then argue for the frugal alternative.
he argues that she is the expert. and Point of Service (POS) plans. a negotiator in a similar situation was able to get the other side to agree to include a plan that they had opposed only days before! Planning a Strategy 51 . you gain an edge when negotiating a new plan for your company.” If you spend many hours learning about Health Maintenance Organizations (HMOs). Preferred Provider Organizations (PPOs). and should therefore handle the problem.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. 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.
This is done by deciding at the outset what you both have in common: You both want to reach an agreement. she made them share whatever it was. neither of you want to be embarrassed at the outcome. Mom: I’ve decided that I’m not going to cut this piece of cake in half and give you both some. The two boys fought over the last piece of everything. These positive things are part of your goals and objectives. This time. That simply rewards your continual squabbling. and I really love the banana/butternut/ sour cream frosting on this cake. and neither boy was very happy. the last piece of cake will get thrown away.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. When they boys returned. point them out at the very beginning of negotiations and refer to them throughout the process. If this was chocolate icing. you both want to complete negotiations by a certain date. because I am so conscientious about my paper route. Usually. she decided to try something different. Example 1 When Russ and Bill got home from school. Unless you can convince me otherwise. particularly when things seem to be at a standstill. Russ: 52 50 Practical Negotiation Tactics . I wouldn’t care so much. I also took out the garbage last week without being asked twice. and then asked their mom for a chance to negotiate with each other. here’s what they said to her: I think I should be rewarded with the piece of cake. and so on. I missed dessert the other night because I had to get to baseball practice. and their mother was tired of it. Be clear on what you have in common at the start. They immediately began to fight over it. like we usually have. they saw that there was one piece of cake left over from their mom’s bridge party. The boys quickly huddled. you want to reach an agreement that is favorable to an outside party.
Customers have started to park in nearby apartment lots. Now that her children are in college. It was the type of shop the nearby residents preferred. I got an “A” on my book report that I really had to work hard on and when you got home from the store last week. We realized that if we cut the cake lengthwise. Example 2 Marilyn’s Memorabilia Store was located along the main commercial street of a residential neighborhood. Planning a Strategy 53 . That sounds like a wonderful solution. she opens her shop at 7:30 a. Residents: Marilyn. and better than a fast-food restaurant with late-night hours and a drive-through window. because there is no parking along the street during morning and evening rush hours. I can have the part with the icing and Bill can have the part with the cake and filling. so that your customers can park on the street. she got a visit from some of the residents. to 3:00 p. Marilyn originally set her shop’s hours for 10:00 a. and keeps it open longer so she can attract customers on their way to and from work. and that’s not my favorite either. One day.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. We really want you to go back to your original times. 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. and I really like white cake. and her children were in school. so these hours worked out well. This cake is white cake. your new shop hours have caused your customers to park in our parking spaces. The last cake we had was chocolate cake.m.m.m.
m.00 a. or so anyway. and 9:00 a. Identifying their shared interests caused the nearby residents and the customers to reach agreement. and 9:00 a. I have to convince them to come before work. my customers can’t park on the street. Marilyn: Conclusion Marilyn needed the extra parking.m. and see if it works. and 6:00 p. if I go ahead and open the shop at 7:30 a. But I really am increasing my sales by being open longer hours.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.? Residents: We certainly want you to stay in business here. and the residents needed Marilyn’s shop.. So. It is very costly to have cars towed. We think they’ll be agreeable to the morning parking. let’s see what the options are. I really need that extra income to stay in business. Lets try it.. Do you? Marilyn: No. The shared parking arrangement did work out for Marilyn. Okay.m. we have to be willing to tow the cars that violate it. the off-street lots probably won’t be used by my customers.I’m sorry this is happening..m. rather than after work. Between 7:30 a. and is probably empty in the afternoon if they haven’t gotten home yet. and between 4:00 p. I don’t think that would be very good for business. and I close at 4:00 p. And we don’t think you want your customers’ cars towed. if residents haven’t left for work yet. But in order to keep my new customers.m. If you need to have the shop open more hours. Most of our residents are gone by 8:00 a. 54 50 Practical Negotiation Tactics .m. and usually the car is gone by the time a tow truck shows up anyway. Can’t you post signs that tell non-residents not to park in the lots? Residents: The problem is that for the signs to be very effective.m. The parking lot used for apartment residents is probably full from 7:30– 9.m.m. then we’ll try and accommodate you.
and start choosing things. Well. one at a time: the youngest. Deadlines can also be set by both parties to a negotiation when they want to put some pressure on themselves to come to agreement as quickly as possible. 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. How can I do that? You all live in this town and you know this house. the first.Tactic 13: Set a Deadline Be sure you know well ahead of time what the deadline is for completion of negotiations. I don’t. Example 1 Four adult children have gathered at the home of their recently deceased mother. We just don’t have the time … We’ve got to do this—the house is sold! Okay. That will take days! I haven’t been in this house for twelve years. let’s all take a few hours to look around. how should we go about dividing up the furniture and possessions? I can’t talk about it.m. let’s all take two hours to look around and make a list of things we might want. but it can also work against you if you set one that is unrealistic or you fail to plan for it adequately. 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 . we can each take turns selecting things … Like each tool or dish. Then we can sit down at this table at 3:00 p. Jenny: Everett: Sue: Everett: Mary: Sue: Everett: Mary: Jenny: Everett: Okay. Well. A deadline can help you make the best possible agreement in the shortest amount of time. A few hours? I can’t—I’ve got to leave shortly for the drive home.
Allan: Let me confer with the city attorneys. your attorneys know the tax laws.m. if we are not finished. we all leave. Conclusion The mutually agreed-to process and self-imposed deadline was a fair method of negotiating—a lot better than the four of them arguing over their mother’s possessions. we cannot agree to these development plans submitted by your company until we have reviewed how they will affect the historic buildings. Sue. Example 2 Allan: As the negotiating team for the city. then the whole deal is lost because my company will lose $10 million in tax benefits under a federal law that expires on midnight. and I appreciate your interest in the historic structure. However. Okay.Sue: Mary: Jenny: 5:00 p. David: I understand your concern. Agreed. this is December 29.. being the oldest. Allan: What! Why did you not tell us this before? David: We never thought you would take three months to get to this point. can sell or give away what is left. 56 50 Practical Negotiation Tactics . December 31. And besides. if I cannot carry a negotiated and signed deal to my board by noon on December 31. All of us must come back before Saturday to take what is ours—agreed? Okay.
He waited to bring it up until it was clear that doing so would help him get the settlement his side desired. we can’t get the reports we wanted in 48 hours. Conclusion Knowing the external deadline gave David a significant negotiating edge. and I don’t like it.Allan: (One hour later. Planning a Strategy 57 . Obviously.) I understand the December 31 deadline. Let’s continue.
Then the teacher went back to the first one. we need to talk. We had one at the beginning of the semester that we were using pretty often. I bought the second one. while watching TV. 58 50 Practical Negotiation Tactics . first-quarter grades are coming out at the end of the week. He knows that a D will mean that he will have to change the way he studies. but remember that both sides have weaknesses. Mom: What’s that? Jason: A few weeks ago I lost my workbook. Did you buy it? Jason: Yes. His mother disapproves of his study habits. Mom: All right. Have a clear goal in mind AND all the information you need to make your points. don’t get mad. The objective is to negotiate from a position of strength. Jason: Mom. Example 1 Jason likes to play video games as soon as he gets home from school and do his homework later. Now. and Jason knows he is getting a D in Spanish. and one of the ways to do that is to reveal a weakness at the beginning. as well as those of the other side. But don’t lose it again. so he was able to prevail upon her to let him continue. and we used it a couple of times. but that was actually a different workbook.Tactic 14: Don’t Always Hide Your Weaknesses Be sure you know what your strengths and weaknesses are. One day mine disappeared. Unfortunately. I’ll need to buy it again. and you can neutralize its effect on the negotiations. Mom: I gave you money to buy a workbook a few weeks ago. as well as strengths. and this usually means having all the right information. and I missed some assignments. but his grades are good. There will be times during a negotiation when you will want to catch your opponent off-guard. but I have a problem in my Spanish class. He decided to preempt the discussion in order to make the best deal. before your opponent tries to catch you off-guard. I’ll give you money for it. Control the use of the information.
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. It’s because I didn’t have the book. The work I did turn in was fine. And I know I have to be better about getting in all of my assignments. and the D is directly related to my losing the book. B. I’m sorry.(maybe C+). I’ll give you more time. but all three deals Planning a Strategy 59 . I think you need to give me the rest of the semester before making me change the way I do my schoolwork. she trusted it more. Although his Spanish grade was only a C+. my study habits are okay. All of my other classes are A. But that Spanish grade needs to come up to a B!! Jason: Okay. Its owners found out that at least three other buyers had been in contact with Jane. or borderline B. he was able to continue to study the way he wanted to. and since he offered her the information up front. Mom. And those are hard classes—Algebra. Mom: Well. then I’ll agree to make changes.Jason: Another thing. Thanks. The location was ideal for a convenience store or a fast-food restaurant. Example 2 Jane once owned a piece of property she wanted very much to sell. Since I missed some assignments. I don’t think you’re taking your schoolwork seriously enough. If I don’t pull the D up to a C or better. English. Conclusion All of Jason’s grades did improve over the next quarter. Pizza Boy was interested and had even made inquiries about the property. all right. His explanation made sense. but I think you do need to change your study habits. I’m getting a D in Spanish for the first quarter—but it’s not because I’m studying in front of the TV. Obviously. Jason: Spanish is just one class. I think I can do that. so there’s no reason to think I need to change my study habits. Mom: Well. Environmental Science.
Jane: Oh. she started her campaign to keep them from closing the deal. A tentative deal was signed. The real problem. it’s only the neighbor to the right of the property who has a problem. 60 50 Practical Negotiation Tactics . You are a big enough corporation to withstand her objections. the other interested buyers already have businesses in the neighborhood. Pizza Boy: We’ve checked the property out. and it’s zoned for commercial use. I’m very happy you’re interested in my property. I’m sure. The Pizza Boy people figured that Jane’s asking price must be too high or that she is unwilling to negotiate. we’re not interested in neighborhood fights. Actually. Pizza Boy was prepared for her call. however. which was way below the price they were actually willing to pay. Furthermore. This is how the negotiations went: Jane: Pizza Boy. since they were well aware of the negatives. let’s assume that you are right. Pizza Boy: Well. there were no unpleasant surprises to stop the deal. When she contacts you. What are her grounds for complaining? Jane: She doesn’t have any.had fallen through. though. The neighbor’s attitude suggested that there would be major resistance in the neighborhood if Pizza Boy tried to put in a commercial establishment. she will want you to think it’s the whole neighborhood. Jane’s up-front disclosure of a potential problem allowed Pizza Boy to weigh the negatives with the positives. and was able to politely ignore her. But unlike your company. They decided not to fight a disgruntled neighbor. however. either. I think you’ll find that this is only one person. I’ve got to warn you—you might hear that there is neighborhood resistance to your putting in a pizza restaurant. really. was that Jane’s neighbor had contacted each of the previous potential buyers and complained about their plans to use the property. What are you asking for the property? Conclusion Jane told them her asking price. When the neighbor heard about the new buyer. I know. Pizza Boy: Well.
500) Fig. 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.000 Buyer Initial Offer ($21. The negotiator firmly states that it is their best offer in an attempt to gain a nice. as illustrated in the following figure: Seller Resistance Point ($22. This is a practical starting point that will not anger the other side (and might even be expected). (2004). Exchanging Initial Offers 61 . Another common strategy is to start with the status quo. for example.500) Resistance Point ($25. Many negotiators make their initial offer the highest acceptable offer (Tactic #19: Make a First and Best Offer).500) M $21.000 22 23 24 25 26 27 Initial Offer $28. “Distributive” bargaining (“win-lose” or “zero sum”) is used. quick agreement. None is as important as the first one. Carrell and Christina Heavrin.750–$25.750) Target Point ($24. The initial offers of both parties are usually set reasonably above or below what each believes to be the settlement range. 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. The initial offer sets the tone of the negotiations and reveals something about the strategy of each side. by Michael R. Adapted from Labor Relations and Collective Bargaining. 2: Distributive Bargaining Process. Experienced negotiators often view negotiations as a process in which the goals of one party are in direct conflict with the goals of the other party.000) Settlement Range ($22.000) Target Point ($23. such as proposing to continue at the current rate or price. 190–192.Stage 3: Exchanging Initial Offers any offers and counteroffers are made during a typical negotiation—sometimes even hundreds.
In this example. it is termed the settlement point – not the “right price” or “fair price. 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). thus producing a true “win-win” negotiation. the other side does not agree to this value). 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. if the buyer’s initial offer was $25. The settlement range is the distance between the resistance points. usually.” but the settlement price. In the example. thus starting out on a positive note. Resistance points are the maximum or minimum beyond which a negotiator is likely to consider an offer unacceptable (and possibly walk out). 62 50 Practical Negotiation Tactics .000 and $28. these points have set the outer limits. When the two parties agree to a price within the range. Both of these tactics give experienced negotiators an edge when they face novice negotiators who are more likely to rush the process and expose their position. the seller would immediately accept it because it is greater than the target point and the buyer would suffer a winner’s curse. Two extremely helpful tactics to be used immediately after initial offers are made are Tactic #15: Caucus and Tactic #20: Posturing. Experienced negotiators will begin the negotiation of several items by quickly proposing such a package. and is the range in which most negotiations actually occur. 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.000. The most common method of negotiating more than one issue or item is to combine two or more in a deal that gives each side something (Tactic #17: Package Items). A target point is the desired settlement value a party has set as a goal when negotiations begin.000) is reasonable. each initial offer ($21. See Tactic #18: Agree on Something As Soon As You Can. the process quickly narrows to the range between the initial offers. After initial offers are exchanged.
m. a caucus can be used as a break to calm the situation down. it gives the parties an opportunity to reassess where they are and determine if everyone involved agrees that they should be heading in this direction. And that’s just my friends from school! I haven’t started Exchanging Initial Offers 63 . without revealing their ideas to the other side. A caucus is when a negotiating team calls for a break and leaves the negotiating table to confer in private. call a caucus so both sides can brainstorm new solutions to keep the negotiations going. If the negotiations have suddenly gone in an unanticipated direction. We don’t want it to be a late evening. A caucus is certainly called for if individual members of the team become agitated or express frustration with the progress of the negotiations. the negotiations got out of hand when Shelly’s dad forgot what had been decided. We’ll just have chips and soda. so her parents sat down with their daughter to discuss the details.–10:00 p. Mom: We’re planning on having your party here on Saturday night. If the negotiations are heated. A caucus gives you an opportunity to work out problems with your own team in private. and I already have 25 names. To do so in front of your opponent would obviously undermine your team’s position in the negotiations.m. Shelly. If negotiations seem stalled. You can invite up to 20 of your friends. and presumably had an agreement. Example 1 Shelly’s “Sweet Sixteen” party was coming up. Her mom and dad had already talked about it privately. calling for a caucus gives you a chance to get your team to recommit to a particular course of action. or if a member takes on a role in the negotiations that has not been assigned to them. so we’ll have the party from 7:00 p. Shelly: Twenty friends? You’re kidding! I’ve just started on my list.Tactic 15: Caucus If you are part of a negotiating team. Unfortunately. make use of the opportunity to call for a caucus. If the team is feeling pressure to concede on certain items. There are many ways to use this strategy. because it might disturb the neighbors.
Mom! This is my “Sweet Sixteen” party. we’ll call you when we’re ready. That sounds like too many for here at the house.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 get a band—everyone does. I could invite everyone!! Hold on! I thought we agreed that this was to be a simple party. (with some irritation) I’m not sure. alone. Your dad and I already talked about this and agreed that 20 guests would be the limit. We could play records and you guys could dance. I think we can handle a few more kids—how about 35? And midnight sounds okay. And they can’t go home at 10:00 p. I guess the VFW will work. And can we bring in pizza? Or maybe one of those “mile-long” hero sandwiches? I like those—let’s do the hero sandwiches. Jerry from down the street is in a really good band that all of the crowd likes. Oh. It’s special!!! Well.m. (excited) That would be so cool. And midnight is definitely too late. okay. I think the band would be fine. In fact. Dad. (During the caucus.—that’s so “baby. Actually. Shelly. and then the number of kids won’t matter. That would be great! It would keep everyone entertained. we need to talk. I’m sure we can ask them to tone it down a little.” They would never expect a party to end before midnight. Time out! Dad. Shelly’s parents reviewed their first planning discussion and went over what Shelly’s mom thought they had already 64 50 Practical Negotiation Tactics . (shocked) Jerry’s band from down the street? They’re a punk rock band! Their music is totally inappropriate for sixteen year-olds. we could rent the VFW hall.
m. Dad. The item currently on the table was the company’s offer to give each Exchanging Initial Offers 65 . When they called Shelly back in.m. Agreed. we will be better able to chaperone. and you can invite more friends.) Okay. please!! 11:00 p. can’t we? No band. we’re going to rent the VFW hall. That way. this mom-and-dad negotiating team became unglued during the negotiations. is for little kids!! No. causing them to lose control and make compromises they hadn’t intended to make.m. Your mom and I agree—11:00 p. Okay. Does that mean no presents. Mom’s call for a caucus gave them a chance to regroup and re-state their original objective. to 11:00 p. All right. but we’ll schedule the party for 8:00 p. midnight. and we will need to approve the list. And we’re serving chips and sodas. too? No way!! I want presents!! Conclusion In spite of their prior planning. and not a huge production. A DJ? I guess that’s okay.Mom: Shelly: Mom: Shelly: Mom: Shelly: Dad: Shelly: Mom: Shelly: decided. but no Sweet Sixteen birthday party decorations. Example 2 The contract negotiations between the company and the union had been going on for days.m. but your dad and I agree on getting a DJ to play. But you are limited to 40. her mom presented the revised proposal. sorry. That’s so lame. which was to make sure Shelly’s Sweet Sixteen party was a fun and safe evening. But we can have the band.
many will want to use it for their children’s education. Union negotiator #2: Please—just a moment outside. The union’s lead negotiator misunderstood the proposal. Union: Why are you so concerned about new job opportunities? Are you holding out on us? Company: No. and thought he was being asked to choose between a health insurance plan and a tuition benefit plan for all members. 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. The company’s negotiator didn’t recognize the misunderstanding. 66 50 Practical Negotiation Tactics . and the following conversation occurred. With the cost of college educations so high. The tuition benefits will encourage the workers to be prepared for new job opportunities. A lot of employees have spouses who can get health insurance coverage through their work.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. Union: You’re offering a choice between health insurance and tuition payments? What kind of a deal is this? Company: Hey. What is this. Union: (angrily) I’m not presenting this proposal to my people. I’m just saying that tuition benefits are sometimes a good substitute for health insurance. Tuition in place of health insurances? They’ll think I’ve lost my mind.
I thought that the contract would cover one or the other for everyone. we’ll be back in 5 minutes. I didn’t understand that your proposal was to allow each individual member to choose between the health coverage or the tuition benefit. let’s move on. and the parties were able to complete their negotiations. Exchanging Initial Offers 67 .) I’m sorry. I think that what you’re proposing is a really good idea. (After Negotiator #2 explained that the choice of tuition or health insurance benefits would be an individual choice for each unit member and not a change in the contract for everyone. Negotiator #1 regained his footing. and I apologize for explaining it poorly. the parties returned to the room. Now. Good. Conclusion Negotiator #2’s timely call for a caucus so she could explain the miscommunication in private saved the session.Union: Union: Company: Okay.
but in reality. Mr. I’ll go get him.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. However. according to the Consumer Reports listing of the cost of the vehicle. you are making $200 profit over the true dealer’s cost.” Party B thinks that A has sacrificed one important objective to gain another. Example 1 The buyer. Salesman: Well. it’s a great car and a fair deal. you don’t want your opponent to know what these things are. we’ve got expenses and we need to make some profit. But for this price. according to my figures. 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. A has gained something of true value and given up nothing he values in return. I can go to another dealer and get a green exterior—the color I like best. It is a useful tactic in any negotiations. He doesn’t really care about the color of the new vehicle. Hobbs. but … Salesman: But what? Hobbs: Well. Salesman: Let me talk to my manager. when the two sides are only a few dollars apart. (Salesman returns with manager) 68 50 Practical Negotiation Tactics . this conversation takes place: Hobbs: Yes. At a point late in the negotiations. quickly checked the dealer’s inventory of sport utility vehicles in stock. not revealing that the item exchanged is a “throwaway. Here’s how it works: Party A exchanges the item for something of true value. and noticed that none of the vehicles have a green exterior.” Throwaway items are those things that hold little or no value to you. but he makes a mental note to use color as a “throwaway” item. Hobbs: Yes. I know. so be sure you present them in a way that suggests importance.
The days in question are: Exchanging Initial Offers 69 . Hobbs successfully chose color as a throwaway item. At the very end of the negotiations. The manager was convinced enough to sacrifice a final $100 for the throwaway. 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.. All three employees must agree to the schedule. he brought it up and convinced the salesman and manager that it was an important item to him—possibly even a deal-breaker. Employees will be paid time-and-a half for each of these days. Then we have a deal. Conclusion Mr.Manager: Hobbs: Manager: Hobbs: Manager: Hobbs: Manager: We are offering you a great deal. but you’ve made me a fair offer and you have been pleasant to negotiate with … Then why not buy the red one you drove—the one we based the figures on? I keep cars 8–10 years..no it’s not. Why didn’t you mention the color before? I didn’t expect to actually buy a new car today (note: not the truth). 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. Miguel. I’ll take the red one for $100 less. The three are sitting at a lunch table to discuss the schedule.. so I might as well get the color I want! What if we offer you the red one for $100 less? Is the color worth $100? I .
and each chooses their days to work: Carolyn: December 27. They have decided to start over. She would actually prefer to work the extra days and get paid time-and-a half. 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. January 1 Carolyn: December 24. 26. Jenny and Miguel feel that they received something of value from Carolyn: She must work two more days than they must work. December 24 Conclusion Carolyn has achieved her objective: She will be off December 24 and 26. They all agreed to their schedules. December 31 Miguel: November 25. 30. 24. They agree. 31 January 1. 30. This would allow Jenny and Miguel to each work only two days. She got what she wanted by giving up something she did not value: the two other days. 2 In the first round of negotiation. Carolyn has decided to use as a “throwaway” the number of days she will work (previously.November 25 (the day after Thanksgiving) December 23. in exchange for giving up earlier choices due to seniority. 27. December 27. December 26. January 1. January 2 None of the three are totally happy with the results. A second and third round produced the following allocation: Jenny: December 23. 31. but that is a secondary consideration. 2 Jenny: December 23. 26 Miguel: November 25. December 30. 70 50 Practical Negotiation Tactics . each made a first choice of days they will work. She proposes to work five days.
In addition.000. for example. three ways. realizing that the total cost of a deal might make or break the agreement. Anne and her sisters. and the stock and distribute the proceeds. and a collection of antique furniture. A reluctance to include one particular financial item with other financial issues.000 with no mortgage on it. The estate’s assets included a checking and savings account totaling $450. the antiques. we need to sell the house. 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. but I’d like to talk about the house and the furniture. Example 1 When their mother died at age 82. Their mother’s will was very clear: the three daughters were to all have an equal share of her estate. along with the cash. their mom left specific pieces of jewelry and art in the will to each of the girls. they met at the house. Autumn: I don’t have any objection to selling the stock and distributing the proceeds and the cash three ways. The process of grouping items can be an educational exercise because the response to one party’s suggested packaging of items might reveal how the other party views the various items on the table. one might package all of the financial issues in one group and negotiate on that package as one issue. it is often helpful to package the items in distinct groups and then deal with each package separately. When the girls decided it was time to talk about the estate. were faced with the task of selling the house and disposing of their mom’s personal belongings. Autumn and Angela. Anne: As I see it. a house valued at $250. 300 shares of stock in a pharmaceutical company. The house and much of the furniture has been in the Exchanging Initial Offers 71 .Tactic 17: Package Items In a negotiation where there are multiple issues or items to be negotiated. can indicate that something you think is minor is really a major concern to your opponent. For example.
Anne: But that means we have to continue to take care of the house and its contents.family for years. Angela: I live close by. If we want. we can sell ours. don’t you think? Angela: Maybe. So we agree: We’ll leave $30. Anne: I’m not sure I’m comfortable talking about trading the jewelry and art Mom left to each of us. she’s free to do so. Angela: Now’s not a good time to sell either the stock or the house and antiques. it’s a magnet for vandals. In fact. We’ll split the stock three ways. It’s a buyer’s market now. I’d like to talk about the art works Mom left each of us. we’d get a lot more for them. there’s a lot of work that needs to be done to get it ready to sell or to make it livable for one of us. Frankly.000 in the bank and distribute the remainder three ways. With no one living here. so I will be able to keep tabs on it. Anne: Okay. Autumn: Sounds good to me.” She gave those things to us. Mother was born here and grew up here. and letting everything else wait for another discussion. If Angela wants to hold on to her stock. but the operative word is “give. Angela: And we can talk about the art and jewelry? 72 50 Practical Negotiation Tactics . we will have a more valuable asset. Autumn: I think its awfully soon to be making these kinds of decisions. I’d really be interested in talking a trade for some of them. Why don’t we leave some of the cash in the bank. What would you think about agreeing today to distribute the cash and stock three ways. And we’ll fix the house up. and now that we have them. and use it to fix the house up? Then when we make a decision. I’d like it all to stay in the family. There was a reason why she gave us what she did. and if we wait a couple of years. we’ll discuss again what happens to the house and the antiques. we’re really free to do with them what we want. Soon.
and establishing a work schedule to accommodate evening and weekend clients. including benefits for partners in non-traditional relationships. and deal with one area at a time? The first: Wage issues (pay schedules and the annual and merit raise issues). and the art works—will be more difficult. the jewelry. tuition benefits. sick. funeral. vacation.Autumn: I can agree not to do anything with the jewelry and art Mom left me before we talk.). deciding whether there would be annual wage increases as well as merit increases. Employees: We’ve got a lot of items to cover. Anne: Same with me. 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. what kind of paid leaves there will be (personal. deciding to base the increases on a percentage or equally distribute the funds for increases among the professional and clerical staff. Example 2 The attorneys and staff of the local Legal Aid Society formed a union and were about to negotiate their first contract with the executive director. The second: working conditions (work schedules and promotional opportunities). health benefits. Waiting to make decisions on those items until some time has passed gives the women an opportunity to look at a number of options. the antiques. and the assignment of the limited number of parking spaces. Angela: That’s fine. but I’m making no commitment to trade. Conclusion Autumn’s suggestion to package the money and stock because they can be easily divided by three made agreement on those items possible. etc. May I suggest that we divide the items into three areas. The third: Ben- Exchanging Initial Offers 73 . The negotiations on the other items—the house.
Executive Director: I think it’s a good idea to group items together. There is more flexibility to use non-public money sources to reward employees who will cover night or weekend hours or who qualify for merit increases. Executive Director: Sounds like a good agenda. Executive Director: Well. as well. And paid leave clearly belongs with Wage issues and should be discussed with the pay schedules. Employees: I’m surprised that you would take merit increases out of a general discussion of wages. 74 50 Practical Negotiation Tactics . That’s a program that can have a lot to do with how employees are able to increase their worth to the organization. paid leave times. So I’d like to see us get through the wage issues quickly and then move on.efits (health insurance. I would include that under the Working Conditions category. Wages should not include merit pay raises. tuition benefits. so there’s not going to be a lot of discussion on what our pay schedules and annual increases can be. Later negotiations were difficult. to be honest with you. Let’s get started. Conclusion The executive director’s request to move merit raises out of the Wage category and move paid leave into that category because there is little flexibility to finance those areas allowed the parties to resolve the wage issue first. the paid leave categories are pretty clearly defined. that makes sense. Also. because they’re really an incentive for better performance. I think it also makes sense to include tuition benefits in the Working Conditions category. but I’d change your list. and the parking spaces). we are an agency supported generally by public funding. Employees: Okay. but the parties were able to come to agreement because the wage issue had been resolved.
Now. Example 1 Tim and Kathy.Tactic 18: Agree on Something As Soon As You Can Negotiations are more successful if both sides can agree on something—anything—almost immediately. after a brief marriage. but don’t think you’re going to stick me with all of the mortgage and credit-card payments. sets the stage for mutual respect and communication. Exchanging Initial Offers 75 . without suggesting any changes or modifications. are divorcing. Kathy was asked by her employer to relocate to another city. Kathy borrowed more money to go to graduate school full-time. rather than disposing of assets. too. They met and married in college. They were in the middle of buying a house. It indicates to your opponent that you are a reasonable negotiator. and that you are entering into the negotiations with the intent to reach agreement. They have no children. Tim began working right after graduation. and might not even be able to keep the house. The couple hoped to do the divorce without involving lawyers in order to save money. Consider starting things off by presenting your opponent with a proposal you feel confident can be agreed upon without argument. Tim: You might be leaving town. An initial agreement. and both have good jobs. Tim worried that he would be stuck with all of the debt. because Tim felt that Kathy had taken advantage of him during the marriage. Kathy’s first job paid more than Tim’s because she had a graduate degree. It was her idea to buy the house and go into debt to furnish it. They had also furnished their house on credit. You can also make an effort to agree on something your opponent offers early in the negotiations. and she agreed. You signed those papers. and they were making payments on school loans (for his undergraduate degree and her undergraduate and graduate degree) and on two cars. Their “property division” was mostly about dividing their debts. with her promotion sending her out of town. no matter how insignificant. The discussion might become very heated.
ABC usually uses UPS 76 50 Practical Negotiation Tactics . 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. Okay. Kathy: Now. Example 2 ABC Company. They also agreed that Tim wouldn’t have to pay her that amount for five years. and XYZ Co. as long as the cost was approximately the same. Kathy: I suppose we should look at the school loans next. Tim: Well. and he could pay it in annual installments over a five-year period.Kathy: Hey. Frankly. I don’t intend to “stick” you with anything. I say we agree to transfer the convertible loan to me and you take over the loan on the sports car. Tim: Okay. I think that makes sense. about the house and furnishings. we decided to each pick out our “dream car” and that we would not overrule the other’s choice. as you remember. we would have paid down our school loans more. yes. 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. even though the convertible is being paid for through a 48-month loan and the sports car through a 36-month loan. I can hardly argue with that. hold on. an art gallery. The monthly payments are about the same. I got my convertible. and you got your sports car. I think it only fair that I take over repayment of all the school loans. The first thing I’d like to talk about is what we are going to do about the cars. What do you want to do about them? Conclusion Having agreed to two items very quickly.. When we bought them two years ago. If both of us had been working the year I went to graduate school. a wholesale art dealer.
when the boxes were opened on Monday. They arrived right before the holiday weekend began. The artworks filled four boxes. it was obvious that the art in one of the boxes had suffered considerable water damage. There was no indication that the gallery’s electricity had gone out over the weekend. and we will continue to discuss who is liable for the three water-damaged works. Unfortunately. but only if you let us ship it UPS. We’ll expect you to pay for the 12 works that will be in your show. and that XYZ needed to either go to the shipping company or its own employees for compensation for the damage. XYZ’s manager failed to open the boxes or remove the artworks. XYZ contacted ABC immediately. water from the gallery’s air conditioning unit pooled on some of the surfaces of the warehouse area. 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. ABC: Before we begin. The three parties agreed to hold a conference call late Monday afternoon to try and resolve the dispute. However. ABC’s position was that the artwork was fine when it left their location. ABC refused to pay WeCanShipArt until it received payment from XYZ. and arrived on time and apparently in good condition. 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. You can get the three new artworks here so that we can hold the sale as scheduled? Yes. and the boxes showed no external damage.to ship artwork. The other times this happened. XYZ decided to cancel the promotional sale that was to start on Wednesday. or else the box was damaged in XYZ’s warehouse. but XYZ asked specifically that a little-known company specializing in shipping art known as WeCanShipArt be the shipper. Holiday weekend storms caused the electricity to go off for different periods in different parts of the city. WeCanShipArt claimed that the boxes were not damaged in shipment—the artwork was already water damaged. XYZ: ABC: Exchanging Initial Offers 77 . and began preparing to return all of the artwork to ABC.
XYZ: Agreed. If we don’t make the deadline. and if word gets out that you think it was. how do we resolve the issue of the damaged artworks? Conclusion ABC’s decision to offer a solution to XYZ’s immediate problem. You can’t just ignore us. They also agreed that if the investigations are not conclusive. Having reached an amiable solution to the immediate problem. they will split the cost of the three damaged pieces three ways. ABC: Well. XYZ: Okay. the three companies were able to agree to undertake an investigation within each company to determine when the artworks were damaged. The artwork was not damaged while in our control. at its financial risk. generated a like offer from WeCanShipArt and a reasonable response from XYZ. we’re ruined. And we’ll eat the cost of shipping. Now. 78 50 Practical Negotiation Tactics . we’ll take responsibility for all of the consequences: the lost sale to ABC and the lost promotional sale by XYZ. regardless of where the original three artworks were damaged. I can’t see how I can refuse that. tomorrow and we’ll wait for payment on both shipments until we resolve how the artworks were damaged. WeCanShipArt: Wait a minute.m. that’s okay with me if it’s okay with XYZ. We can guarantee that we will deliver the new order in perfect condition by 5:00 p.
What do you want for it? Colleen: Well. Example 1 Colleen: Ann. Conclusion Ann and Colleen did not feel like negotiating over the tractor and running the risk that it might affect their friendship. Exchanging Initial Offers 79 . Ann: Well. consider using the “First and Best” tactic. It is important that both sides know that there is no negotiating beyond the single “best offer”—that the first offer will either be accepted or rejected. we plan on selling our Ford tractor when we move.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. 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. We plan to put an ad in the paper next week. You must mean what you say and be prepared to walk away from an unacceptable offer. Okay? No quibbling. period. Why don’t you give me a price? Colleen: Oh. but if you’re interested. we’ll sell it to you. no hard feelings either way. I don’t want to quibble.000 for it six years ago. The “first and best” tactic enabled them to settle the matter easily. we paid $5. I don’t have any idea. Jeff spends many hours mowing the yard every week. Ann: Thanks! We really need one. 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. and even more hours in the fall picking up leaves. and it came with the bush hog and the leaf pick-up. Ann: That sounds great! I don’t want this to affect our friendship. I know you and Jeff said you’d like one because you have about five acres.
I think we have agreed to all aspects of the job offer. I expect a fair increase. I’ll get back to you in three days. as we agreed. (three days later) Vernon: Archie. Archie: Thanks. how about you making your first salary offer your best one. I came up with the best salary offer I can make. I’ll either accept it or reject it. Here it is. but we have internal budget considerations and we must consider equity with other employees. and I’ll take 48 hours to consider it. Okay? Vernon: That sounds good. because it was several thousand dollars above what he decided was the minimum it would take for him to change employers. I don’t like negotiating over salary either. He also started the job with a positive working relationship with Vernon. We want you. except salary. on this slip of paper. I want the job. and you know my current salary. So. I’ll discuss it with my wife and get back to you in 48 hours. Conclusion Archie accepted the job offer. but I don’t want to start off in a new job by negotiating with my boss! So. who admired the way Archie negotiated his starting salary. 80 50 Practical Negotiation Tactics . no questions asked.Example 2 Archie: Well.
Posturing is indeed “acting. then the prom. you will probably have to modify some of your positions if you are to reach agreement. Fourth. Third. you only have one Senior Prom in your life. you know that Sally is really looking forward to this. and then to breakfast at “Timothy’s. This is called posturing—presenting your position strongly and completely. but he figured “all night” was relative. and in a favorable light. was dating a senior.Tactic 20: Posturing You might have to do a little acting at the beginning of the negotiations. First we’re going to dinner.” As you know. Second. so he knew that he would have to sell them very quickly. Example 1 Kevin. and ignore or deny any weaknesses in it. 17 years old and a junior in high school. Sally’s Senior Prom is coming up. we’re not going to be dating exclusively after this summer. curfew would be okay.) During the posturing phase. we’re all meeting at Donna’s so we can share a limousine. and we’ve made a lot of plans with our friends that I need to talk to you about. Kevin: Mom and Dad.m. He knew his parents would not agree to let him stay out all night. Kevin had “negotiated” with his parents before. Present your position and demands as if yours is the only logical position. (Once negotiations get underway.m. 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. It might be your only opportunity to explain your position without interruption. First.” but it is also a source of valuable information that can help the negotiations proceed to a successful conclusion. look for indications from your opponent as to what he or she believes is their best position. so the prom is a pretty big deal to both of us. a 4:00 a. since Sally is going away to college next year. I’m the only junior in the crowd. and it really wouldn’t be fair if I wasn’t able to go along with the rest of the group. He and his date had decided that as long as they could join their friends for breakfast after the prom. Exchanging Initial Offers 81 .
and we’re just not happy about that. of course. Donna’s parents will be there. the limousine will take us back to Donna’s house to spend the night. And if we don’t spend the night. I think I ought to be able to stay out all night. we’ll have to get in our car and drive home very early in the morning. From where we sit.Mom: Kevin: Mom: Kevin: Timothy’s usually isn’t open early in the morning. Yes. I don’t drink or do drugs. this prom is a one-night thing—a dance that is dressier than you’re used to. And. you and Sally need to call it a night (or really a morning). but to use that as a reason to stay overnight doesn’t make sense. which could be dangerous. We’re just not convinced that your entire group has been alcohol. and the crowd we hang with doesn’t either. Finally. they will be open for the Prom crowd only. However. Donna’s parents are not as strict as they could be when a bunch of you are there. That’s the deal then? Okay. remember that when you started dating Sally and hanging out with an older crowd. Sally’s parents trust us and have already said yes to her. happy about your plans to use a limousine so you kids aren’t driving. We’ve heard that they allow kids to drink. Fifth. yes.m. Things can happen on a night like that that adversely affect you for the rest of your life. for sure. we know. we told you that we would not be changing our rules to accommodate that older group. you will have another Senior Prom—yours—so we don’t think you will be “missing” that much if you don’t stay out all night. but because the owner’s daughter goes to Sally’s school. You make some good points. I know you trust me and that I’ve earned the trust. We think that after the breakfast. So. That’s asking us to believe a lot. but it should not be oversold.or drug-free. Second. you have been fairly good about making your curfew—most of the time. I’ve never missed my curfew. so there will be plenty of chaperoning. You realize that this could be as late as 4:00 a. I believe you can pay a little more and have the limousine bring you both home. Also. We are. 82 50 Practical Negotiation Tactics .
Also. Tencro approached the state’s Economic Development Officer. If we can expand here. The company approached other states to see what incentives they might offer Tencro to locate in their state. but there are limited options available. we are one of the largest employers in this county. but it could easily add another 500 if it had the space on its assembly line. other companies have received incentives and Tencro certainly wants all it can get. Example 2 Tencro Company decided to modernize and expand its business. We need to find out what you’re willing to do to keep us here. EDO: Well. and it will grow—everything from sub-parts manufacturing to the shipping business we generate. and a new. Tencro: Let me just remind you of what our company means to this state. one-floor operation would be very profitable. Nevertheless.Conclusion Kevin’s strategy to hit his parents with all of his very good arguments at the outset gave him an advantage. we’d be adding at least 500 new jobs.m. our Exchanging Initial Offers 83 . The assembly plant is out-of-date. With 800 employees. but we’re getting a lot of interest from other states willing to help us relocate. but was disappointed to learn that they offer very few incentives. if anything. It currently employs 800 people. regardless of the incentives. we’re of course interested in keeping you here. Tencro has approached the state’s Office for Business Incentives to see what. because his parents could not disagree with such wellthought-out ideas. Sally and Kevin had a wonderful night and were quite happy to have the evening end at 4:00 a. and it does not really need any help. Tencro is not going to leave the state. The spin-off business from our operations is huge. the state can do to help the company expand and rebuild. and had this conversation: Tencro: We really want to keep our company here and expand it.
if the new location is at the local industrial park. We need help in the cost of attracting and training the new 500 employees. Certainly. and traffic signals. and we’ve had to divert funds from business incentive programs over to basic services. That might involve the state building housing for them at a reduced cost and providing them with some retraining. moving to a new location will raise a lot of questions from neighbors about the increase in traffic and pollution that might be generated by your plant. We need a rebate on the local income taxes to help pay off the loan to build our new building. etc. additional police. what do you have to have? Tencro: We need a new location—20 acres or so—to build our new plant. And. 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. We 84 50 Practical Negotiation Tactics . EDO: The state has very limited resources to pay for economic development incentives. etc. schools. EDO: Well. We think that we’re the reason XYZ and ABC companies located here and we believe they are likely to leave if we do. And we’ve been offered land practically free in the neighboring state. or else it will not be cost-effective for us to stay here. We can’t possibly give it away to other companies coming in behind them..employees pump money into the economy by buying houses and cars. so we’d have to have it free here. now that the economy has improved. The industrial park land can’t be “free” because we have agreements with other companies that had to buy the land. We need certain incentives. we will need the two-lane entrance expanded to four lanes. There are more residents in the state demanding more public services: road improvements. paying taxes. any plan by the state to build housing that is subsidized by tax dollars will draw a great deal of criticism. We do want you to expand your plant. and we are willing to offer some training dollars for the new workers. Also. while we value your company as a long-time corporate citizen.
Tencro was able to pay off the borrowed money in half the time. let us go back and take another look at our options. Conclusion The posturing by both sides could have caused the whole negotiation process to bog down. Future negotiations continued. and hired 500 new employees. but for the fact that each party did its homework and was aware of the true facts. The new set-up was so profitable. Exchanging Initial Offers 85 . borrowed money for the new building. and the state did end up participating in a housing subdivision in order to keep the purchase price down for the new employees. 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. Other than that. However. we’re just not in a position to offer more than that at this time. Tencro bought land in the industrial park. the training and the new road improvements were all the incentives offered to Tencro. Tencro: Well.
000—what they paid for it. or 3) Make an unrealistic offer (i. Sue: Let’s offer $325. They found one they both like that lists for $325.000 three years ago). Avoid giving away too much at the outset. 2) Start out with an old number.000 this year.. The other party will probably come back with an equally ridiculous offer. which can be very useful).000. Jay: No. 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. is the most (or least) the other side will accept. Example 1 Jay and Sue are looking to buy a house in a specific neighborhood because it has a good school system. particularly if you don’t know the other party’s “settlement range. and that two similar ones on the same street sold for $330.e. and houses in this area sell fast. before someone else does. Their realtor told them that it sold for $290. offer $150.” The perfect first offer.) To prevent this from happening. such as last year’s price. Let’s low-ball them and offer $290.000. 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. Jay: No. then $320. We don’t know how anxious they are to sell or if they know the market. thus requiring greater concessions on both sides.Tactic 21: Avoid the “Winner’s Curse” It is often quite difficult to make the first offer.” (You have won a settlement. That’s a fair price. of course. The sellers must be willing to come down a few thousand … Sue: Well.000. at minimum cost. 86 50 Practical Negotiation Tactics . but you feel cursed because you gave away too much.000 two years ago. think things through before you make or accept the first offer.000 for a house that sold for $185.000 and $337. never give them their asking price. and you cannot withdraw it in good faith. because you have settled quickly.
(the next day …) Jay: They made us a counteroffer of $307. the company president. Give us your lowest price. I can’t tell our realtor $290. realizing they offered too much. (Bob and Frank meet privately to discuss the situation. Frank: Me too. then let them make a counteroffer. Sue: Then you do it. Let’s accept it! Conclusion Jay and Sue avoided the so-called winner’s curse by making a low (but reasonable) first offer. and the offer was based on fact: the prior negotiated price.) Bob: I’d do it for $3. Exchanging Initial Offers 87 .500—half the difference! Sue: Great. The buyers were very motivated to sell. but who knows what they are planning on offering. Lyle: So what’s your price? Bob: Can you tell us what you have budgeted for this project? Lyle: No.000 total. They outlined how they would develop a new employee performance-appraisal system. the sellers obviously would have accepted and Jay and Sue.000. Both parties felt that they made a good deal. 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. was very impressed with their presentation. they had offered $325. Lyle Foxworthy. That’s an insult! Jay: Well.000. as requested by the human resource director.000 for each of us—$6. If. as Sue had first suggested.Sue: Don’t be crazy. since they had already bought another house.
88 50 Practical Negotiation Tactics . Bob: That’s fair. What’s the cost? Bob: We want the job. Lyle: Okay. What is it? Lyle: Why don’t you give us a price? Bob: We can’t use our daily rate because it might be too high for this work.Bob: Lets make them give us a price! (Bob and Frank return to the meeting room. and you two come highly recommended. Conclusion Bob and Frank avoided the winner’s curse by forcing Lyle to make the first offer. We’ll do the job. but we know you must have an amount budgeted for this and we are willing to do it for that amount.000. They also ended up getting three times ($18.000) their minimum price of $6. I’m out of time. That is all that’s left in this year’s training budget. and it would not apply. We’ve waited long enough.000. but we can’t pay more than $18.) Lyle: Okay.
but possibly of different values to your opponent. what appears to be an outer limit of the settlement range when the process starts can. It has often been said that the key to negotiations is to be flexible (see Tactic #25). which is often the case. because if you do not at least appear to be flexible.Stage 4: Making Counteroffers he heart of the negotiation process is the give-and-take. seeing no common ground. labor negotiators. and remain open to offers and options that you did not originally expect (see Tactic #30: Always Leave Room for Dessert). Instead. Wait to counter (see Tactic #24) because this will give the opponent the sense that you are serious about bargaining. and attorneys use tried and true tactics in giving and receiving offers. When the other party makes an offer. the other party. which would most likely weaken their position (see Tactic #26: Keeping Secrets). be prepared to divide an offer into smaller ones to make it appear to be more reasonable to the other party (see Tactic #31: Cut Salami Slices) or offer two or more alternative proposals of equal value to you. is likely to pull away from the table. Experienced negotiators seldom reveal their exact priorities and objectives. be enlarged (see Tactic #27: Expanding the Pie). Use a prolonged period of silence (see Tactic #29) to convey something at a strategic moment. In some negotiation situations. T Making Counteroffers (The “Give and Take”) 89 . One or more parts might be acceptable or indicate movement from their previous positions. Skilled negotiators such as salespeople. Expect that the “total pie” will be different from what it was at the outset. 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. Also. do not dismiss it because it is not all you want. This can produce a negotiated solution without giving up your priorities (see Tactic #28: Fixed Alternatives). in fact. carefully evaluate an opponent’s offer. and do not flatly reject it because it is not your offer.
their parents began discussing a family summer vacation. 19. Proposing only one solution to a problem. 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. Jerry will be here. 15. His brother Sydney. Let’s see what we can work out. Jerry had already started his summer job. while it may be your best option. it looks like we can’t really plan a vacation for all four of us. 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. Dad. except when you’re negotiating. Dad: Wait a minute. Option 1: No family vacation.Tactic 22: Propose Multiple Options The shortest distance between two points is a straight line. In mid-June. and that he already made plans to visit with college friends on the East Coast for the two weeks after that. He planned on being home for one last week before having to pack up and go back to college. Here’s the discussion that followed: Mom: Well. Jerry pointed out that he is expected to work until July 31st. gives your opponent little maneuvering room and might even prolong or damage the negotiations. The reciprocal opportunity to review and select among options rather than accept one (“take it or leave it”) also gives your opponent a way to win. so you can go without me. completed his first year of college and came home for the summer around the middle of May. Proposing multiple ways to reach your goal can get you to the same place. Example 1 Jerry. 90 50 Practical Negotiation Tactics . We have four options. and quicker. The week he would be home would be the first week of school for Sydney. what say you. Option 2: Mom and I go before Jerry leaves on August 1. I don’t want to give up on a family vacation that quickly. finished his freshman year of high school at the beginning of June. Sydney.
Sydney: Don’t I start school that week? I don’t want to miss school. Mom: Well. Andrea considers Making Counteroffers (The “Give and Take”) 91 . Then Jerry joins us until Thursday. It’s not perfect. one paralegal. me. you have a half-day orientation on Wednesday. Classes don’t start until Friday. but he can discharge employees for poor performance. Example 2 Joe is an attorney whose job responsibilities include managing three other attorneys (Andrea. Mom? Mom: Let’s do it. if it’s okay with Jerry. we could return home on Thursday and still get a week’s vacation. we meet up with him that week for vacation.Option 3: Mom. and Sydney go to South Carolina before his school starts. but it should work out all right. Sydney: Okay. so I won’t be able to meet up with you until Sunday. Jerry: Okay with me. actually. Bob. Option 4: Jerry doesn’t return home the week between his visit to the Northeast and returning to school. and one secretary in his litigation unit. and Carl). when we come home. Conclusion The goal was to have a family vacation. Joe has no say in who was hired by the corporate legal office to work in his unit. By proposing numerous options. Jerry: My friends and I have plans through Saturday of that week. they were able to make that happen and not interfere with or argue about the merits of each other’s individual goals. Sydney: So what you’re suggesting is that the three of us are on vacation from Thursday to Sunday. And I miss orientation and start school the next day? Dad: That’s an option. If we started the vacation on a Thursday.
rather than to put it off on someone else or for some time in the future. The attorney for the other side has agreed to give me the additional time to file it. 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. Her job performance was acceptable. It was just a comment. I really see your options as follows: You can leave the corporation. isn’t it? But I don’t think just moving you really solves the problem. You had no authority to agree to settle the Stites case without clearing it with me. you can agree to a demotion so that your areas of responsibility are lessened to that of a paralegal. so Joe took a “hands off” approach. To put it as bluntly as I can. we have a very big problem. you have a job-performance problem. Joe: Come on. you know that wasn’t an okay to settle. In the last month. or you can work out a “supervision” agreement with me so that I can better monitor your performance. 92 50 Practical Negotiation Tactics . let me say that I’m handling the missed deadline on the pleading. she made a two glaring errors in judgment. Andrea: You didn’t list moving to another unit as an option. We have a formal procedure that you just don’t like to follow. Joe: Andrea. Joe: That’s all well and good. Andrea: Well. 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. however. 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. Andrea: Wait Joe. Andrea. If you don’t like the way I do my job. and resents any attempt by Joe to supervise her work.herself to be a professional. which forced Joe to take action. Andrea: We’re hired for our expertise. Joe: That is certainly an option. and I don’t see why we don’t have more independence. Before you start.
I hope we can work it out. If you are convinced that I have to undertake an “approval” program. rather than my staying here. Joe: That’s fine with me. (Adapted from The Mind and The Heart of the Negotiator. by Leigh Thompson. If that option is okay with you. and propose an acceptable alternative. the needs of the corporation have to come first.) Making Counteroffers (The “Give and Take”) 93 . Andrea: Well. It also changed her attitude about being both a professional and a team player in a corporate office. in fact. Conclusion Joe’s willingness to offer more than one solution gave Andrea a way to look at this unfortunate situation as an opportunity. Believe it or not. I want to stay with the firm. improve her work performance. Andrea’s move and subsequent “approval” regime did.Joe: That could be an option. lets talk to Bill about the move. then it would save face for me if it comes with a move to another unit. but it would still require some change in the way you work: either a demotion. or I would advise your next supervisor to put you on a very formal approval program. my goal is the same is yours: to create an environment where you can perform to your full potential. But in fairness to our mutual employer.
that’s $9. Wow! We are off to a good start. only those with polar-opposite interests that must be divided. and a home theatre. then those which can be easily traded. the fencing. (She looks over the list. Exchange. This approach is an important tactic. or Distributive) The “win-win” approach to negotiations is a basic tradeoff strategy of seeking maximum gains for both sides. It is used only when each side has several demands. if a buyer negotiates a $500 reduction of a contractor’s bill. 94 50 Practical Negotiation Tactics . thus making it necessary to find a middle ground on each. 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. It goes like this: Organize the joint list of demands into three categories: 1) compatible items (those items that both parties can quickly agree on because they share the same desired outcome). These items often involve money). we both want the sod. let’s see if there are any items we both want. Brooks: Right. Let’s see. because it can speed up negotiations and produce a more desirable outcome.500. Example 1 Brooks and Maureen Wilson have just finished building a new home. three strategies are used.). etc. Let’s agree to those things. They have a fixed amount of money—$14. They each agreed to list the items they want and then to negotiate whether or not they will be purchased. They both agreed that this is the maximum they will spend on “extras” before moving in. For example. 2) exchange items (those that can be easily traded off—one item for another item of equal value.) Yes. 3) distributive items (those items for which the two parties have exactly opposite interests.Tactic 23: The “Win-Win” Approach (Identify Issues as Compatible. With distributive items. one person’s gain is another’s loss—zero-sum. Maureen: First. In essence. then the contractor has lost $500 in revenue. and finally.000.
200 $200–$2. Can we split it evenly? Brooks: Okay. I’ll trade your sidewalk and trees for my whirlpool bath.000! Brooks: Good. that makes sense.# 1 Sod Item Cost $1.000 $500 $1.500 $2. We have $1. and we both get things we want. I’d like to spend some of it on lighting upgrades.500 $5. Making Counteroffers (The “Give and Take”) 95 . which takes another $3.500 left.000 $5.000 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. $750 for lighting and $750 in the bank. These are all permanent immediate needs.000 $3. which I’d like to keep in the bank.000 $1. Maureen: No.000 $2.500 $500 $1.
Pension Increase 3. Drug-Testing Program 96 50 Practical Negotiation Tactics . Profit-Sharing 5. During that time. management and union negotiators found that a “winwin” approach to negotiations worked well. 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. The combined lists total thirteen different items: Desired Outcome No. finally agreeing to split the difference on the remaining amount (distributive items). Length of Contract 2. This year. 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. both sides exchanged lists of initial demands at their first meeting.Conclusion By taking the time to list all the items each person wanted and their cost estimates. 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). Wage Increase 4. even in difficult years. All items to be negotiated and their desired outcome for each item were put in writing for review.
Distributive rent program co-pay Exchange Exchange 7.6. Finally. one Making Counteroffers (The “Give and Take”) 97 . Next. At this point. and (#9) to continue the often-discussed no strike/no lockout provision.Compatible rent provision 15% Exchange 15% No layoff provision $100/month Exchange Exchange Exchange In their second meeting. and the union clothing allowance proposal (#13) for the management funeral leave proposal (#8). Clothing Allowance Based on senior. 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. Subcontracting 12. Overtime Assignment 8. they exchanged the economic issues of approximately equal cost: the union pension increase proposal (#2) for the management shift differential (#10). Paid Funeral Leave 9. (#5) a new drug testing program. This gave members of both sides a sense of accomplishment as they began to discuss the remaining two issues for which they must find a middle ground. they accepted the union job security proposal (#12) in exchange for the management subcontracting proposal (#11). No Strike/No Lockout 10. Because they held opposite positions on these issues. Shift Differential 11. the management profit sharing plan (#4) was exchanged for the union overtime assignment plan (#7). First. Health Insurance Employees pay 20% Continue cur. They proceeded to draft the language to settle these issues. they began to trade off the exchange issues of similar value and nature. Next. signed. Job Security 13.Voluntary ity 2 days Continue current provision 10% 10% No provision $50/month 3 days Continue cur.
negotiations begin on a positive “win-win” note. but it can be very effective when a negotiation situation involves several issues. Third. Sometimes the classic “split-the-difference” method is helpful in locating a middle ground. 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. A middle ground often must be found on each of these distributive issues if you are to reach an agreement. exchange. Second. you can use the process to settle many of the other issues on the table. when you exchange items so that each party achieves their desired outcome on one of the two. or distributive so that the negotiations can begin in an organized manner.side’s gain is the other’s loss. when you agree on the items where both parties have similar desired outcomes. Both sides first agree that all issues to be discussed will indeed be listed and openly discussed. Conclusion This tactic is simple. 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. if both parties start from reasonable positions. 98 50 Practical Negotiation Tactics . They then identify each as compatible.
and from a strategic standpoint. and on what would be considered acceptable “sharing” of each other’s junk food supplies. Rob: Wait a minute. and can help you reach your goal. last item: I’d like it quiet in the room at night. Example 1 Jasper and Rob met when they were assigned to the same dorm room their freshman year in college. 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. Rob stays busy all day and evening with other activities. Rob: Making Counteroffers (The “Give and Take”) 99 . So when’s a good time? Jasper: (without hesitation) No way. Here is how the last issue was handled: Okay. It is especially important that you do two things: take your time before rejecting any offer from the other side. They agreed on which part of the room each would have. Since they didn’t know each other well. and looks like you are belittling them. Waiting a respectful amount of time to counter. so he wants a quiet room late at night. and studies late into the night. Let me finish. Mutual respect must be part of the negotiation process. Jasper studies during the day and early evening and likes to stay up very late watching TV and visiting with friends. the location of the TV. so I can study. A counterproposal delivered too quickly tells the other side that you haven’t or won’t even seriously consider their offer.Tactic 24: Wait to Counter As the negotiations begin. Jasper: Finish or not. they decided to establish “room rules” so that they would both be comfortable with the room assignment. each side is expected to put an offer on the table. even if you aren’t going to accept their offer. I’m not interested in a curfew. and refrigerator. This isn’t high school. The final issue had to do with “lights out” and quiet times for studying. you know. will make your opponent feel good about the process. stereo. do not offer a counterproposal right away.
10:30 p. Neither side anticipates that there would be 100 50 Practical Negotiation Tactics .) Listen. Jasper: (without taking a breath) At best. and that’s it. and the union foreman would report directly to the plant manager. No agreement was reached.m. Rob: (there is no hesitation in this voice) No. I want a 10:30 p. Under ABC ‘s contract with the union. 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. 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. midnight during the week is the only thing I’ll consider. Under the restructuring.Rob: (Rob was about to suggest midnight on Mondays through Thursdays. and that’s not negotiable. 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. The union contract required that management renegotiate this change in the grievance procedure with the union. b) written complaint to a floor manager if the matter is not resolved in 5 days. but changed his mind when he saw Jasper’s attitude.m. curfew on TV and other noise every night. c) a formal “meeting” with plant manager if the matter is not resolved in 10 days. and d) a hearing with company owner if the matter is not resolved in 20 days. employee grievances had to go through four levels of supervisory review and appeal: a) verbal complaint to the non-union crew leader. Jasper: Midnight. Failure of both young men to allow one another to have their proposal considered caused the relationship to break down.
The union was prepared to accept the plant manager’s position as final. An aggrieved employee can make a request for a meeting with the plant manager. this redraft is a very simple change to the contract. because those management layers are gone. Union: Hold on. Company: (rather abruptly) Let’s not drag this out. rather than go on to appeal it to the company owner. and I’m certain your members will be okay with it. If the union foreman felt that the grievance had merit. and everything else stays the same. The redraft is simple and straightforward. We’d like you to consider the plant manager’s role as a problem-solver. he/she can take the grievance to the plant owner for a hearing. and began the negotiation session concerning the grievance procedure. rather than as a judge on the merits of the grievance. In fact. We just cut out two steps.any objection to the change.) We’re just not happy that you are proposing a Making Counteroffers (The “Give and Take”) 101 . Union: As you know. We think that this is an opportunity to eliminate some of the adversarial aspects of the grievance procedure. our grievances often signal to management that there are real problems on the shop floor. (Note: An attitude change sets in. If in 20 days he/she has not been satisfied. no one can complain about that. ABC Company’s negotiator explained the management changes soon to be implemented. the employee and the foreman would meet with the plant manager and attempt to resolve it. We’ve got a couple of alternative models for you to consider. 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. but to dictate. Certainly. After initial pleasantries were exchanged. We’ve simply eliminated the first two steps. Company: (no hesitating) Trust me. 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. Company: Here’s the new draft of the grievance procedure.
Conclusion ABC Company’s failure to take adequate time to consider the union’s offer or even act as if it was considering the offer prolonged the negotiations unnecessarily. the two parties did meet again. After a cooling off period. We’ll see you on the picket line. rather than in the 35 days the current system provides. You can’t be serious. This time. to prevent any change! Company: (surprised) What? Why would you object to this? Your guys will get a final decision in 20 days. 102 50 Practical Negotiation Tactics . and we’ll strike if we have to. and actually accepted a three-step procedure.two-step grievance procedure instead of a four-step procedure. the company entertained the ideas the union had tried to propose before. Union: We’re very serious.
four brothers. They flipped a coin to see who “got” them and the new baby this year.Tactic 25: Be Flexible A negotiation begins with both parties having some idea of where they hope to end up. Be open minded. and at least five aunts and uncles) ate around 7:00 p. and now have a new baby girl. one sister. Sue: Yes. Bill’s family won. Example 1 Sue and Bill have been married four years. Nancy: Sue. Bill’s family (parents.m. They’ve done the research. Sue’s sister Nancy called her to talk her into coming anyway. two brothers. Sue’s family (parents. If you are flexible. 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). Mom says you. Bill. and identified the range of options they feel comfortable with negotiating. 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). Next year. you can adjust your demands or goals to include such new ideas. successful negotiators remain flexible because new solutions to old problems often surface during a negotiation. But after the negotiation gets started. and we’re really not able to enjoy either one. their spouses. and Sue called her mother to let her know that they would not be coming for Thanksgiving dinner this year. Sue and Bill decided that they had to begin alternating their Thanksgiving Day visits between the two families. established goals. Even before the baby’s arrival.m. and ten nieces and nephews) always ate around 5:00 p. two sisters. it’s just too much to do both. and the baby aren’t coming for Thanksgiving dinner this year—that you’re going to Bill’s parents’ house. and do not dismiss something said by your opponent just because it came from the opponent. Making Counteroffers (The “Give and Take”) 103 . we’ll get to our side. The couple used to have Thanksgiving dinner at both families’ homes.
m. we’ll come to Mom’s. either. some people have to work on the Friday after Thanksgiving. 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. 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 know that I would rather not do two Thanksgiving dinners on Thursday. So that doesn’t work. Nancy: If we keep the time at 5:00 p. Conclusion Nancy’s goal when she called Sue was to talk her into coming to their Mom’s Thanksgiving Dinner on Thursday. but she won’t tell you. When that goal looked out of reach. Mom’s very upset. Sue: I don’t know. Thanksgiving is Thursday. it’s okay with me if you can sell it to everyone else. I thought of asking Mom if she could move dinner up to noon or so. the holiday will be over. I mean. but then I realized that the rest of you already go to your in-laws earlier in the day. By being flexible. There’s nothing “special” about Friday. Sue: Next year. Celebrating the next day seems odd. Nancy: We’d make it special by all of us being together. Everyone in Sue’s family liked the idea of celebrating on the Friday after Thanksgiving. she suggested a unique alternative. Nancy: What if we did Thanksgiving on Friday? Sue: What? Nobody does Thanksgiving on Friday—that’s un-American! Anyway. Nancy: I’ll let you know. and it became the family’s new tradition.Nancy: It just won’t be right without you guys. 104 50 Practical Negotiation Tactics . I bet everyone could make it on Friday. Bill won the coin toss for this year.
we hope to break ground early next year for the new orphan home. the foundation’s regular annual grants come to roughly half of their available funds. but we need some assurance that you will be able to build and operate the orphan home at that location. Kids’ Home and the foundation have decided that a parcel of city-owned land would be ideal as a site for the new building. We only have maybe $2 million a year to put toward this charity. Kids’ Home: That’s why we brought the foundation’s officials with us. but the principal of the fund can’t be touched. the interest income of around $6. but we can’t fund all of the $12 or $15 million. City: Can’t you borrow the money from a bank to build the facility. Kids’ Home hoped to get $500. We’re hoping to get a commitment from them to build and help fund the operations of a new facility.000 a year for operations. had been negotiating with a foundation to become its major benefactor for a new building and to supplement the organization’s annual operating budget. depending on the cost of the land. we’re committed in theory. Estimates for building a new orphan home ranged from $12–$15 million.5 million is available for distribution to numerous charities. City officals: We can probably give you the land for free. and raise the money to pay it back? And can’t the foundation grant you money on an annual basis? Making Counteroffers (The “Give and Take”) 105 . The foundation has a substantial endowment fund. We need the city’s help by allowing us to get the city land donated to us (for free). Unfortunately (for Kids’ Home). Foundation officals: Oh. Kids’ Home is also hoping to get the city to encourage the foundation to commit to full funding of the building project. Each year. Kids’ Home: As you know. They are meeting with the city to ask that the land be donated by the city for the project. a non-profit organization for orphaned children.Example 2 Kids’ Home.
We’re a nonprofit group. and really taxes our ability to raise funds. but we’re willing to look at it. it could end up costing double that amount. 106 50 Practical Negotiation Tactics .Kids’ Home: Borrowing the money gets very expensive. We wouldn’t want to make such a commitment to a bank. Why not ask the state to issue no-interest bonds? It can do that for non-profit organizations. I’ll contact the state tomorrow. The commitment by the foundation to make the annual bond payment debt backed by the foundation’s endowment fund should be sufficient collateral to get such bonds issued and purchased. We’ve never committed our funds to pay back a bank loan. Foundation: City: Foundation: Kids’ Home: Conclusion By exploring alternative financing plans suggested by the city. 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. And “donations” aren’t a very safe collateral for any bank that wants to loan us money. We probably would not be able to participate. We’re not familiar with that program. If we borrowed $15 million at 10% interest.
yet not reveal all of your goals and objectives. Smith: We don’t know what you’re talking about. The Jones family suspected that the Smiths called the police. it is not acceptable to lie. These parties could get rather loud. Example 1 Soon after the Jones family moved in next door to the Smiths. The Jones’ two older children—girls in their early 20’s—often had friends over on Friday and Saturday nights. each side has to know generally what each other wants to accomplish. Mr. Making Counteroffers (The “Give and Take”) 107 . Mr. and you probably won’t identify your throwaway items or tell your opponent your bottom-line. But the Jones clan had four cars altogether. At the same time. you might not want to reveal all of your priorities at first. and asked the officers to cite the Jones kids for parking too close to a corner. the neighbors began to have problems. Jones: We’ve obviously gotten off on the wrong foot.Tactic 26: Keep Few Secrets One of the most difficult skills to master in a negotiation is how to be candid.m. Successful negotiations depend on trust. It is perfectly acceptable to say that you are not ready to reveal certain things. and we would very much like to talk about how we can resolve these issues. you should be careful not to misrepresent your position to such an extent that your opponent will feel that you have lied. The Jones’ two younger children—boys in their mid-teens—hit baseballs into the Smiths’ yard and scared the Smiths’ dog. However. They asked to meet with the Smiths to talk about these disagreements. and often took up all the space along the street in front of the two houses. The Smiths called the police to complain about a late-night party. and trust can only be established if all parties interact truthfully. Before the Jones family moved into the neighborhood. and often lasted until 2:00 or 3:00 a. the Smiths could count on parking their car directly in front of their house. The Jones family let their tree branches hang over the Smiths’ back fence and rub against the Smiths’ garage roof. In order for a negotiation to be successful.
If you can tell us all the things that we have done or are doing that have caused you to be inconvenienced. Mr. since you’ve asked. and not in the back yard. Smith: Well. Mr. and they won’t be having friends over more than one night a weekend from now on. that wasn’t us. they’re hitting baseballs into our yard. I’ll talk to the boys and we’ll make sure they play baseball in the park. Mr. then they’ll need to come in at midnight so that their talking doesn’t disturb you. if they are outside. Almost every day. Mr. So. 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. we have a problem walking long distances in bad weather. Muffin. fine. And we’ll make sure none of our cars are parked in front of your house. Is that everything now? Mr. yes. and was met with the following: Mr. the late-night parties are a problem. And the music is to be off at midnight. we would like to work out some solution. Smith: Well. Jones: Well. we’d like to be able to park our car in front of our house. At our age. Smith: No. Jones came to see what the problem was. It is really very disturbing.Mr. but we do know that someone has complained. Mr.) 108 50 Practical Negotiation Tactics . a lot of problems. Also. Smith: Yes. I guess. the next time the boys were out playing and the ball came into the Smiths’ yard. Jones: We’ve already talked to the girls about the parties. In spite of the Smiths’ assurances. we’re good now? Mr. Jones: Okay. we thought you might have called the police about our kids’ party and our cars. In good weather. they kept it. Jones: I wish you had mentioned that the last time we talked. Smith: You know that your boys are causing our dog. (A week later.
although none of the facilities outside the U. you’ve said that before. and the deal is close to being final. 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.S. You obviously don’t want to be “good neighbors. The union knows that the company is up for sale. or the deal is off. the tree was clearly over the fence. because they didn’t like a grievance decision. You could have seen that yourself. Japanese companies often do not “recognize” labor unions the same way U. Mr. Smith: Well. Jones: Sure. The union laborers walked off the job on Friday. and too bad for you! Conclusion The disagreements and unpleasantness continued until the Smiths finally sold their house and moved into a condominium. But we didn’t call the inspector. Its local headquarters has a union to handle its international shipping. Making Counteroffers (The “Give and Take”) 109 . Unless Neno can get the Union members back to work on Monday. or European companies do. The British insist that a very strict confidentiality provision be part of the negotiating process.” Forget all we’ve agreed to do—we’ll just enjoy the use of our property.S.Mr. Neno has been negotiating the sale of its business to a British company. the British firm will walk away from the deal. Jones: (at the Smiths’ door. irate) I can’t believe you people called an inspector on us. Neno’s president and the Union representative met to discuss the walkout. but Neno cannot tell the union this. Union officials are afraid that a Japanese company might purchase it. We would have fixed the tree if you had asked. Why didn’t you tell us? We can’t read what’s on your mind! Mr. have labor unions. Example 2 Neno Enterprises is a shipping company with extensive global operations.
110 50 Practical Negotiation Tactics .Neno: You know this is a wildcat strike and that it is in violation of our contract. I promise you. do you? Union: No. Have the guys back on Monday. we don’t. But I have to have everyone back on Monday. I’m certain that if we can sit down and talk next week. We can’t put up with the kind of decision we got on our grievance. If everyone is back on Monday. If that’s going to have a bad effect on your being able to sell the business. If they do come back. Union: We think that the grievance decision affects our wages. this is a legal strike under the contract. is still a labor shutdown. You don’t want to mess up our negotiations. Therefore. we will resolve it to your satisfaction by the end of the day. You really don’t want to do that. I think it already has. It’s not the time to have one. And one company that is interested has a really good track record on expanding the businesses they buy. whether it’s for one weekend or a week. I can’t really be more explicit than that at this time. then there’s probably no harm done. it will impact our marketability. maybe by next Friday or the week after that we’ll have our guys back to work. I’ll forget all about the strike. We’ll meet with all of the parties on the grievance first thing Monday. I know it’s not news to you that this business is up for sale. no harm-no foul. We’ve not had a labor shutdown in 20 years. Neno: All I’m saying is that there is a difference. But if your guys are out past Sunday. Anyone who buys the company will have to honor the contract we have. any interruption in our shipping could affect how these buyers look at our business. Neno: Look. 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. Union: What aren’t you telling me? A labor shutdown. Our guys are prepared to stay out a lot longer than Monday. so the union won’t be hurt by the buyout. Neno: Look. and if the guys are back on Monday. But we also need to make it clear that we expect you and whoever might buy your company to take our contract seriously.
I can. Conclusion On Monday. as well. while the grievance was being resolved. was the right decision to make. Union: Okay. Can you assure me of that? Neno: Yes. we’ll be back to work on Monday. Making Counteroffers (The “Give and Take”) 111 . I would be more specific. If I could. Union: Okay. Neno’s decision to respect his confidentiality agreement and simply tell the union that he couldn’t disclose all the information. and it’s that important to you as well. the union was willing to trust Neno—even though he couldn’t tell them everything. But I can’t. the sale was finalized. He told him that it would mean that the union would not only keep its jobs here. Neno called the union negotiator in and briefed him on the sale. But I need to tell my guys that this is important to them as well.Union: It’s that important to you? Neno: Yes. rather than make up reasons. Because the parties had dealt honestly with each other in the past. but the British firm will allow them to organize at their foreign locations. I’m going to go along with you because you’ve always dealt straight with me.
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”)
but I will cut your staff by one part-time person (or $15. or C.000. Take it or leave it. that is enough time. I’ll do it now. Felipe: Well.Amber: row before your basketball game. I’m not going back to him again to discuss this program. Use the $5. Roberto: But I need to start the direct mail and newspaper ads within two weeks. she chose the one she most preferred. Roberto: Well. Felipe: Sorry. I have three hours. but no TV or anything until it’s done! (pause) Okay. (long pause) Felipe: Let me give you three options: A. I can accept B.000 for advertising. but the company president does not share your optimism on this program. Conclusion At first. I’ll approve $15. keeping her Saturday free. I’ll approve $15. I can’t help.000 in the budget. B. I’ll find a way to do without one part-time person. and clean it.000 for advertising. Roberto: But it will never generate enough interest if no one knows about it.000). Felipe: (Roberto’s supervisor) Sorry. Three. But when her mother laid out the schedule and gave her alternatives. Clean it after your game. or we lose a whole year. Amber resisted the chore she hated. At least this way the program will have a chance to succeed! 116 50 Practical Negotiation Tactics . Example 2 Roberto: I can’t properly advertise this new program with a $5. but I will cut your travel budget out completely.000 budget! I need at least $20.
Conclusion Felipe was willing to think “outside the box. thus achieving his goal of not having to ask for a larger budget. One alternative. Roberto believed.” He offered Roberto three alternatives of equal cost. Making Counteroffers (The “Give and Take”) 117 . would enable him to adequately promote the program. which was his goal.
and the annual merit raise she was getting from the company was the same 3% other employees were receiving. nearing her third year with the company. one of the wisest things you can do is to keep silent—particularly when the parties have met several times and identified many areas of agreement. he can make an open-ended statement. Here’s how the negotiations went. the promotion had not yet been approved. Jones: I certainly do. The negotiator for the other side says nothing. Unfortunately. It was 16% less than she had been led to believe she would be getting. I have to tell you that while I appreciate what you have done for me. but one side comes back with a non-negotiable demand. You know my commitment to this company. received a glowing report from her boss on her job performance. Jones. This should have resulted in an automatic promotion and a sizable pay increase. I am very disappointed in the company’s decision not to promote me and to limit my merit increase to 3%. But she also knew he would have to be willing to go to bat for her with his superiors if she was to get her advancement. Susan knew that she was considered a valued employee and that her boss would want to do the best he could for her. After a few minutes of silence. 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. Susan: I hope so.Tactic 29: Prolonged Silence When negotiations have hit a critical stage. She was determined to hold her ground for at least a 13% pay increase and a promotion. I think you would agree with me that I have performed well above expectations this past year. Example 1 Susan. you are a valued employee. Susan: Mr. inviting a response. and 118 50 Practical Negotiation Tactics . I very much appreciated the fair job performance review you gave me. If his opponent cannot agree to the demand but does not want to end the negotiations.
Once he acknowledged that both items might be awarded sometime in the future. if management can see their way to giving you the pay increase now. (says nothing) Or. Okay? (says nothing) Let me check it out and I’ll get back to you. Susan’s silence prompted Mr. the company’s refusal to grant them now was a harder position to support. Jones went to management and convinced them that they should give Susan the promotion and the 13% raise. I must ask you to try to get both. of course I will be glad to do that. Jones to continue to offer solutions. maybe we can talk about the promotion later in the year. because I feel my future with the company might be at stake here. If there is some flexibility in your request. and I’m sure management will agree. and I think that I really haven’t been dealt with fairly. but I don’t think management will be willing to give you an additional 10% pay raise AND a promotion. but a pay increase of that size might be more difficult. I would very much appreciate it if you could ask the company to reconsider. it could help. I could probably find a way to phase it in over a two. I suppose I could get the promotion approved with the proper presentation. Well. I really want you to stay with the company. Making Counteroffers (The “Give and Take”) 119 . Promotions of this type are all but automatic around here.Jones: Susan: Jones: Susan: Jones: Susan: Jones: Susan: Jones: that I deserve more consideration. (says nothing) If I can’t get that pay increase approved right now.or three-year period. Conclusion Mr. and sell it to management that way.
She has not decided what she’s running for. This is how the negotiations went: Town Council Representative: Well. Town Council Chair’s representative believed that the ability to expand on the agreement was critically wounded by the uncertainty as to which office the mayor might seek. Town Council Representative: I think you’re wrong. and were trying to settle on new and expanded areas when one of the elected officials (Ms.Example 2 Two local governments entered into a tax-sharing arrangement in order to provide joint services to citizens in a more efficient manner. has colored these negotiations. Town Council Chair). the people Madame Mayor currently 120 50 Practical Negotiation Tactics . The parties agreed to continue the previous terms of the agreement. and until she does. I don’t think it’s a problem. He decided to push for a simple renewal of the original terms. Also. by saying that she might run for Chair. The mayor’s negotiating representative wanted to complete the negotiations on the expanded agreement. but now they’ve got to ask what Madame Mayor’s motivations are. My bosses might not have been inclined to expand the agreement anyway. and representatives of the elected officials of the two towns were meeting to renew and possibly expand the agreement. 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 term of the original agreement was nearing its end. The mayor. Mayor’s representative: No. Mayor) said that she was considering running for office. The end of the agreement coincided with the election cycle for the two towns. but the officials had hoped to complete the negotiations prior to anyone involved announcing for office. The office she was thinking about was the office held by her counterpart in the neighboring community (Mr. her plans really don’t have any bearing on these negotiations. Mr.
represents have to worry that her desire to switch governments might taint the negotiations. Town Council Representative: (silence) Mayor’s representative: I would think that at least the proposals that don’t involve budget changes could be pursued. the Town Council’s representative left the mayor’s representative with no room to maneuver. and the agreement was renewed with no new provisions. Conclusion By remaining silent. Town Council Representative: (long silence) Mayor’s representative: (after an uncomfortably long silence) Well. I don’t know what her reaction will be. He either had to end the session or figure out what to say to reengage the other side. I’ll go back and tell Madame Mayor your position. the Town Council representative’s position prevailed. Mayor’s representative: Well. In the end. Town Council Representative: (silence) Mayor’s representative: I think it would look very bad for both of us if we spent all of this time negotiating and we don’t end up with anything new. I hate not to attempt to add some additional areas to the agreement. Making Counteroffers (The “Give and Take”) 121 . I think we really have to drop back and just propose a renewal of the tax sharing agreement without adding any new items.
As was sometimes the case in these parts. or we will be at an impasse. Your rock barrier has sent the brook onto my property and it is too close to my gazebo. Neighbor: Well. Madeline. The reason I built it was so that I could protect my patio. which an upstream neighbor had built. she noticed that the brook came within 100 yards of it. She traced the brook back along its course to see why and where it had changed its path. Joe. Example 1 Madeline bought an old farmhouse outside of a small town. Having an iron-clad demand probably won’t give you enough room to reach an agreement. She went to discuss this problem with the upstream neighbor and had every intention of demanding that the barrier be removed immediately. had redirected the brook further into her property. 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. Madeline built a gazebo about 500 yards from the brook. the brook and rock barrier are on my property.Tactic 30: Always Leave Room for Dessert Negotiating is the art of give-and-take. I have a problem. The property came with three acres of forest alongside a meandering brook. and began to renovate it as a home and a pottery shop. She discovered that a rock barrier. Obviously. you should always enter the talks with a good idea of what you are willing to agree to. One day. Madeline: Hi.” Avoid making that “necessary concession” too narrow: It should be large enough for both of you to step into comfortably. It calls for compromise. the brook was the property line separating her property from a neighboring farm. “I have to have this. when one of you might say. You will have to remove the rock barrier. The brook 122 50 Practical Negotiation Tactics . You are more likely to be successful if you identify a range of options that fall within your comfort zone than if you have a fixed bottom line with little wiggle room. in a small clearing. after the gazebo had been there for about five months.
she widened her range of options. It might not be necessary to make such a dramatic change. I can’t have the brook in my house. She left room for a compromise. My neighbor on the adjacent farm wants to sell part of his property for a housing development. Neighbor: I’m sorry. Also. This will put these houses right next to me. you have not only threatened my gazebo. Conclusion Madeline’s objective when she met with her neighbor was simple: Have the rock barrier removed. Making Counteroffers (The “Give and Take”) 123 . but you’ve changed the boundary line of my property. I understand that. Madeline: But by diverting the brook. which enabled her to achieve her goals. at least I’ve maintained my property line. I’ve lost 400 yards of property on my three acres. What if you removed the barrier for a short time. Madeline was able to protect her gazebo.extended right up to my back door when the rain was heavy. if the brook is redirected. restore her property line. Madeline: Yes. but only if I have a clear understanding with you that the barrier will be rebuilt to protect my house. When she found out that this was not going to solve her neighbor’s problem. 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. 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. and allow the neighbor to protect his home. By expanding the range of options available to resolve the dispute. Madeline: Well. and return everything as it was. Then. but I don’t know what I can do about it. Neighbor: I can do both of these things. what I need is to protect my property line and my gazebo. I couldn’t have that. I won’t remove the rock barrier.
This would be a better benefit in the long run. you are taking a risk on the costs increasing.000. the discussions of the employee benefits package bogged down on the issue of health insurance costs and pension benefits. and the premiums for health care just keep going up. But only a few of our people are close to retirement age. And we cannot afford that $1. If we invest the $200. that would be the minimum increase.000 to cover the premiums for dependent coverage. As best as we can tell. Pilots: Look.000 figure. with all wage and operations issues resolved fairly early. and we know that with this new contract term of five years.000. The company wants to trade paying for dependent coverage for better pension benefits. The airline industry is in a slump. Company: This could not come at a worst time for us.000. the airline paid a total of $200. then the pension benefits overall will increase by $10.000. This is just a cash-flow problem that your members have to understand. With long-term planning and investments. what they really need is for you to cover the costs of dependent coverage.000 a year over the next five years? Company: Yes. However. The projections for the next five years were that these costs would increase to about $1. the company can make your pensions much better.Example 2 The contract negotiations between the pilots and the airline had been going pretty well. Over the next five years. as it has always been.000.000 (which we reasonably should have expected to pay in premiums) in the pension account now.000. Everyone was afraid that the dispute would cause an impasse and a possible strike. and are willing to keep pension benefits the same. Over the last five years. dependent coverage could cost us $1. The pilots want dependent coverage paid for by the company. 124 50 Practical Negotiation Tactics . Pilots: So you are projecting that the increase in dependent coverage premiums will average $200. we know that health insurance premiums might skyrocket.000.
we are.000 available. It initially believed that the only option was to put that money into pension benefits.000 actually carried them through four years.000 to either pay one year of the premiums.000 the first year on the premiums. The $200. The dependent coverage is more important to us now than the pension benefits. The health insurance market stabilized. Are you willing to risk not having an opportunity to increase pension benefits? Pilots: Yes. Conclusion The company was committed to limiting its exposure to $200. If we can get two or even three years out of the $200. can we agree to a year-to-year agreement on dependent coverage. by agreeing to let the company cap its exposure for dependent health coverage. then those funds will not be available to invest in the pension plan. and the pilots knew what to ask for when the contract expired. or invest in the pension plan? Company: Yes.000? Once the cap is met. the company will not be expected to give us this benefit. Making Counteroffers (The “Give and Take”) 125 .Pilots: But you do have the $200. if they were that high. that would be worth it.000. Company: Then it’s okay with us. Pilots: Since the concern is about agreeing to a 5-year commitment without knowing the increases we might have in health insurance costs. so the decision to be flexible was a good one. Company: If the company spends the $200. The pilots expanded the range of options. however. with a cap of $200.
Saleswoman: I’ll be right back. Saleswoman: With your 740 in trade.500! Saleswoman: Yes. and compare it to your strategic objective. Buyer: Yes. I recall the day you drove it out of here. it’s a deal? 126 50 Practical Negotiation Tactics .” “affordable weekly payments. I guess it would be around $600 per month.000 car.000 for a Volvo? I bought the one I’m driving for $19.” 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. Phrases such as “for only pennies a day.” and “low monthly rates” are examples of the salami tactic. but the Consumer Price Index has not gone up 150%—nor has my paycheck! Saleswoman: So. what monthly payment did you have in mind? Buyer: More like $300 per month. Example 1 Car buyer: What. I just can’t imagine the monthly payment on a $45. I love this car.… (20 minutes later) Saleswoman: So. Buyer: Way too much! Saleswoman: Well. if I can give you this car with a $300 monthly payment.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. $45. If you are on the receiving end of such a tactic. but that was several years ago. do you want to look at something else? Buyer: No. be sure to add up the total cost.
as promised. But my neighbor pays $39. but let me see the numbers. Sure. it will be a five-year lease.00 per month.000 down and $300 a month! Conclusion The saleswoman knew the buyer was suffering from “sticker shock. (looks at the numbers) That looks good. Instead of a three-year lease.00 per month. do you want Disney? Yes. Example 2 Cable representative: Owner: Cable representative: Owner: Cable representative: Owner: Cable representative: Owner: Cable representative: Owner: Yes. you can get the Disney channel for only $5. Saleswoman: Simple. Great! So.000 down.Buyer: I don’t see how you can do that. I can’t afford that much. and added the trade-in.99 per month. with your car and $6.” she had him—she worked around the $300 slices.00 per month for your service. Making Counteroffers (The “Give and Take”) 127 .000 price into “slices” the buyer thought reasonable.” She decided to cut the $45. do you want HBO? How much? $5. and payout slices to reach the total price she wanted. can’t you? Buyer: Yes. but what else must I buy? Only the basic service for $8. Let’s see. Once the buyer volunteered that $300 was an affordable “slice. You can do that. I can’t discuss another client’s account. down payment. I can afford $6.
99 per month. Okay. The total is $38. Any other kids’ channels? Yes. I really want the sports channels. they asked about the Cartoon Network. 128 50 Practical Negotiation Tactics . Thanks. 2.00 per month. Conclusion The owner thought his neighbor’s service at $39. Great. instead of one total amount. That’s $5. That’s another $5. and probably felt much better about the total negotiated package because it was presented in modest individual slices.00 per month was far too much. 2? How much? $8. Disney is for the kids! The sports channels are for me. Yeah.00. and SI 1. we had that before. But that’s all! Then we’ll hook you up on Monday.00! Why? Because he judged the per-slice price to be reasonable. but he agreed to six “salami slices” for a total of $38. and my wife wants the old movies. 3.Cable representative: Owner: Cable representative: Owner: Cable representative: Owner: Cable representative: Owner: Cable representative: Owner: Cable representative: Owner: The Sports Combo–ESPN 1.00 a month. What about the music package? Yes.
so are you ready to make a deal? This might convince a few buyers. Applying Pressure 129 . Tactic #36 (The Element of Surprise) can catch an opponent off-guard and cause stalled negotiations to move forward. Tactic #35 (Applying Excessive Pressure) is a similar tactic that should also be used with caution. “I can only guarantee this price until 6:00 p. today. Humor might not look like pressure. but others will walk out the door.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.m. and it can destroy your credibility. pressure tactics should probably be avoided. 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. an unexpected element of humor can break the tension and encourage a person to calmly get back to the issues. but it can be used effectively when one party clearly has an edge. but in tense. It should be used with caution: It can end negotiations immediately. In some cases. however. angry negotiations. turned off by the tactic. Tactic #33 (The Bluff) is a classic pressure tactic. When both sides believe that each has equally strong positions. 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). which can be successful if the opposing team has two or more members who hold different views of an issue. it is effective. and the use of humor. Other less-obvious pressure tactics include Tactic #37 (Divide and Conquer). the traditional car salesperson might tell the buyer. For example.
Don: Absolutely. he and Chloe wanted to buy out Don’s and Abby’s interest. but it is not a good idea to exaggerate what you are offering or what you are giving up. Abby really loves that boat. In the last couple of years. and we’ll be moving south in the next month or so.Tactic 32: Don’t Exaggerate It’s always acceptable in negotiations to put your best case forward and present your position vigorously. together and separately. Lacey and Chloe didn’t know that Don and Abby were. Although I do think there ought to be some consideration for the two years you had use of the boat. I think Chloe and I would be willing to pay more than just the money you guys put into it. Lacey: I know. Lacey. Don: Wow. in fact. Example 1 Don and Abby went in on the purchase of a sailboat with their friends Lacey and Chloe. getting a divorce and each moving away (and would have no more use for the sailboat). and they will weaken your credibility. 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. Your opponent will consider you untrustworthy and might even be insulted by your attitude. Lacey: Don. I don’t know. and we need to talk to you about how we can buy you guys out. And we don’t want to be unfair. The two couples used the sailboat a lot the first couple of years. It 130 50 Practical Negotiation Tactics . I can’t tell you how many times Abby has said how happy she is that we have the sailboat. We’d hate to give it up. When Lacey found out that his employer was transferring him to another city farther down the coast. boat prices have really gone up. but Don. Chloe and I would like to take the sailboat with us. big news! I’ve been promoted. Such exaggerations are easily revealed or uncovered. Don and Abby now use it less and less.
big news!! Don got his promotion. If Don had not exaggerated the importance of the boat and dealt with Lacey honestly. (After Lacey and Chloe had a chance to talk. Lacey and Don’s negotiations changed considerably. the boat has depreciated. I’m sorry. Applying Pressure 131 . but separately. 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. Don: Lacey. (Around the same time. After all.is just about the most important thing we own. Abby: That boat. Abby told Chloe about the divorce and about how she never wants to see the boat again. It just reminds me of how happy Don and I used to be. We’ll be leaving here for the Midwest. Lacey: Cut it out. I’m surprised by your attitude. which you would have to share if you want to retain half-ownership. It’s about time now for some major investment. Don and I are getting a divorce.) Lacey: Don. I think it would be fair to pay you and Abby half of what you originally put into the boat for your 50% share. Abby is having this conversation with Chloe) Chloe: Abby. I’ve been thinking. I was afraid something was going on when you all-butstopped joining us on the boat. Don. I have big news too. Chloe: Oh. Let me talk to her. Abby: Well. and I’ll get back to you. I’ll be glad never to see it again. and neither of us put much in for upkeep. and we’re moving farther south. though it’s not so happy. he likely would have found himself in a stronger negotiating position.
in this global market. I’m telling you the stock price is having a huge impact on us already. the situation in the stock market is not good. I’m afraid that with this current information. I’ll be going back to them as soon as next week. I can’t see how today’s numbers really impact the long-term profitability of this company. we will need to make drastic cuts in our operating costs just to survive. Company president: Well. When I go to the bank for the Letter of Credit to keep our cash flow uniform while we switch from one type of production line to the other. I’ll be looking to you to make some major wage concessions on this upcoming contract. but this has been such a crazy situation.Example 2 Aimes Manufacturing had experienced major ups and downs in the price of its stock for the last two years. Union negotiator: The stock price might be down right now. I read in the papers every day that the market is still strong. The current stock price is the lowest it has ever been. and that the economy is strong. I think you’ll have to agree with me that wage increases in this next contract will not be available. I’ll have to show them 132 50 Practical Negotiation Tactics . And as you know. the company president decided to use the stock price as a negotiating tool during the current union contract talks. And while these fluctuations have little to do with the health of the company itself. Telling me there’ll be no wage increase and asking for wage concessions now is a little premature. they will make their decision based on a review of the stock price that day. Here’s how these negotiations went: Company president: Well. our production line changes at least three times a year. in fact.
we’d like to reopen talks on next year’s pay increase.that we’ve cut expenses to counter the losses in the stock market. Let’s get back together next week. So. okay. the union checked into the Letter of Credit transaction with some experts in banking. Conclusion Because the company’s president over-emphasized the impact of the market on the company. (In the interim. let’s talk about it.) Union negotiator: I’m sorry. If the stock goes up next week. but I checked it out and it’s not totally true. Union negotiator: Well. The union became hardened in its position that the employees needed wage increases in the new contract. here’s what happened. the company’s position was weakened even more. Give me your proposal for wage concessions. 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. but your proposal to cut wages is just not going to fly. this week’s price would have little or no effect on your ability to get a Letter of Credit from the bank. Applying Pressure 133 . Union negotiator: I know that’s what you told me. When negotiations resumed. no concessions! In fact. and the union ended up with a substantial increase in their contract. he lost the trust of the union. When the market took a swing up during the negotiations. Company president: All right. If you put it that way. they would do a thorough analysis and look at the health of the company over the long haul. and I’ll have our people look at it. Company president: What? I thought you understood that it is essential that we get concessions on this if we want to stay afloat.
Christy was surprised and hurt when a friend of hers mentioned that she had seen Tom at the movies with his former girlfriend. Christy realized that asking for a commitment from Tom at this stage would be a very serious discussion. We don’t have that much free time together. Poker players know all-too-well-that bluffing can be very costly. but I really am. you will have lost credibility with your opponent. Example 1 Christy and Tom had been dating for about a year. and she didn’t think Tom had. either. it might backfire. and I really wanted to see the new Lenny Bruce movie. Tom: Oh. The couple had not discussed marriage. but Christy thought the relationship was heading in that direction. If you subsequently agree to begin talks again. and they really have no intentions of doing so. Sara said she saw you at the movies with Charlene yesterday.Tactic 33: Bluff! Bluff with caution. Here’s how the discussion went: Christy: Tom. This can come back to haunt you. so their “free” time was very limited. but you always run the risk of having the opposing party call your bluff and end the negotiations without reaching agreement. I called Charlene and she was available. You’re not upset about that. I really hate it that you chose to see the movie with Charlene. Christy thought that their relationship was exclusive: She hadn’t gone out with anyone else. I knew you had a class. Both of them were still in graduate school and worked full-time. There is a chance that the tactic will work and that both sides will agree to the proposal on the table. I guess I’m just surprised. Charlene. are you? Christy: I don’t want to be. If one party threatens to walk out of the negotiations if a demand isn’t agreed to. 134 50 Practical Negotiation Tactics . they are bluffing. yeah. She knew that if she made such a demand and threatened to leave him unless he made a commitment.
Since he wasn’t sure about that. I certainly don’t want to lose you. and at first he thought she might bluffing. The union negotiators. so he didn’t call her bluff. he had to make a commitment or risk losing her. If that’s not possible. I’m not “dating” anyone else. Applying Pressure 135 . Tom: Okay. Christy would have had to decide whether or not she was indeed bluffing or if she would really end their relationship. She convinced Tom that her feelings were strong. Conclusion Tom didn’t want to lose Christy. Tom: You’re serious? It’s that important to you? Christy: Yes. Christy: What I’m saying is that I can’t accept that you are going out with a “friend” who is a woman—not at this stage of our relationship. It’s made me realize that I want us to have an exclusive relationship. I’m willing to risk losing you.Tom: She’s a friend who happens to be a girl. I need to have your commitment that you won’t do that. It is. then I’m afraid I want us to stop seeing each other. It really wasn’t a “date”—we just saw the same movie together. Actually. if you can’t make that kind of commitment. If Tom had “called” Christy’s bluff. Tom: I have friends of long standing who are women. she paid her own way. He believed she was sincere. but very little progress had been made. Example 2 Nexon and its union had been negotiating a new contract for the past couple of weeks. I just thought of her because I knew you weren’t available. I won’t go out with any woman friend. Going to a movie with one of them to me is the same as going to the movies with one of my male buddies. Christy: I just can’t see it that way.
but working without benefits is simply not acceptable. 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. We’re not going to reach agreement on this at all. And I don’t believe you’re going to go call for a strike over this. Union: You don’t seem to understand. This is something we just have to have. Nexon negotiators did not believe that the workers would actually strike this early in the negotiations. Here is what happened at the next negotiations session: Nexon: I’m sorry. we want the part-time workers to apply for and fill fulltime positions as they become available. we’re really prepared to go the distance on this benefits issue. but the company cannot offer the same benefits to the parttime workers as it offers to the full-time workers. Nexon: I’m sorry. First. or else we’ll be asking the membership to strike. Many of our union members who are working part-time hope to work full-time. Nexon: I’m just not prepared to give you one. Second. Why don’t we put this one aside for now. This is a critical issue to us. much less today. and try and reach agreement on the cost-of-living increase you’re proposing? Union: No. We need some agreement on this today. Another bargaining session was scheduled. it will cost too much. Nexon: We’ve got lots of issues to discuss.) 136 50 Practical Negotiation Tactics . then all of our other demands will change. The union members ended up voting not to strike at this time.believing that Nexon would not risk a strike. Union: You’re wrong. (The union negotiating team left the bargaining session and called for an emergency meeting with all union members. If we’re not able to reach agreement on this. We need an answer today.
Union: Okay, we’ve decided to put aside the part-time benefits issue for now. We’d like to discuss the cost-of-living request today. We’re looking for a 5% increase for all employees—full-time and part-time. Nexon: I’m afraid that a 5% increase is out of the question. Inflation has been very low this year, and we’ve certainly not increased our prices by 5%. We’re only in a position to offer a 2% increase, and we believe your membership will accept that. Union: 2%?? Are you crazy? Our people will never accept that!! They’d sooner strike!! Nexon: Fine. Ask for another strike vote and get back to me. Union: Wait, wait. Let’s be reasonable.
Negotiators for the company knew the threat of a strike was only a bluff, because the union did not have member backing. When they tried to bluff the first time and failed to convince the members to strike, their ability to successfully bluff again was lost. They had a very difficult time in the subsequent negotiations, because Nexon was able to call their bluff numerous times.
Tactic 34: Control the Forum with Visuals
Some tried-and-true strategies used for meetings and presentations can also be effective during negotiations—particularly those that help you get your points across to the other party. Even the best negotiators have trouble keeping a discussion focused, which is why they make good use of visual aids. In many situations, including negotiation sessions, a person or team is trying to communicate ideas and persuade others to accept their position. Maintaining control of a lengthy discussion and keeping everyone focused on one’s presentation is often difficult, but it is critical to successful communication and persuasion. This control of the “forum” or general discussion, if attempted solely by dialogue or handouts, can be difficult for the best negotiators. Thus, a tactic that will help keep the discussion focused on one’s arguments and presentation can be extremely helpful. An easel and flipchart, a chalkboard, or a PowerPoint presentation can be very effective in controlling a forum. By only showing one part of a presentation at a time, you can focus everybody’s attention on one page of a flipchart or one slide (or even just one line of text). People won’t be able to flip through pages or discuss other parts of a handout (this often occurs when the entire proposal is given out at the start of a session), and the presenter won’t lose the audience’s attention. It is also more difficult for people to go back to earlier parts of the presentation, because the text no longer appears on the screen or flipchart. A negotiator who presents new proposals or information with well-developed visuals can more easily control the forum or focus of the group discussion.
Dinnertime at the Gronefeld house was usually loud and chaotic. The parents and six children had dinner together most evenings, but it was understandably hectic; multiple conversations were going on at the same time. One night, Aime (age fourteen) tried to present an argument about allowances and the division of chores among the children. Constant interruptions from other children and a general inability of all eight people to follow one dialogue simply caused her to give up her
50 Practical Negotiation Tactics
idea. The next night, however, Aime came prepared with a piece of construction paper and a gavel she had removed from a plaque in her father’s office. On the construction paper were three columns: Person; Chores; Allowance. The written specifics were covered up with pieces of construction paper. After everyone took their seats at the dinner table, she banged the table with the gavel until all were silent. “I have a proposal for a new division of chores and new allowances,” she began. “Please let me explain this one person at a time, so we can agree on that person’s chores and allowance, and then move on to the next person.” Aime now had everyone’s full attention, because they were curious about what was covered up on the chart. Aime had sucessfully focused everyones attention on her chart. The parents, impressed by her work and specific proposals, agreed to her suggestions with only one change. Person Chores Allowance
Aime realized that she would never achieve her goal unless she could command everyone’s attention and focus the dinner-table talk on her concerns. She was able to control the dinner forum with a gavel and a chart. The key to her success was that she unveiled only one line at a time, thus focusing the discussion and reaching agreement on each child. This stopped the confusion.
A committee of three members of a governing board of twelve people is responsible for developing and presenting the annual budget recommendation for
the organization. A majority of the board members must vote for the proposed budget for it to become effective. Past committee meetings dealing with the proposed budget have been chaotic, long, and usually heated. The typical format for the meeting is for the chair to hand out a copy of the entire proposed budget at the start of the meeting, quickly provide an overview, field questions, and then try to negotiate for the seven needed votes for passage. Steve, one of the budget committee members, has decided to try a new approach: focusing discussion on one budget at a time to prevent people from discussing several items at once. Steve: Ladies and gentlemen, to help us review this budget proposal in an organized fashion, I have outlined it on the pages of this flipchart. Each section of the budget appears on a single page. I’ll go through it one page at a time. Please ask questions only on that section or page. This will keep all of us discussing the same budget issue. Agreed? Board chair: Does everyone agree to this proposed budget-review process? All in favor say agree, opposed no. Seeing no opposition, it passes. Steve: Let’s begin with the capital budget for the Fifth Ward … Allan: Steve, I have a question about this year’s budget for health insurance … Steve: That’s Section 7 on page 7 of the flipchart. Allan, please hold your question until we get there. We will review and discuss all of these items one at a time, in the order they appear on the chart.
Although several sections of the budget proposal sparked spirited debate, Steve was able to control the discussion and focus the meeting on one issue at a time by effectively using a visual aid. The meeting was much shorter, more productive, and less acrimonious than in prior years.
50 Practical Negotiation Tactics
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. such as the advantage of time. once had to call a plumber in for emergency repairs. Since his toilet had overflowed and water was continuing to run all over the floor. The owners of professional sports Applying Pressure 141 . It is sometimes referred to as “pressure bargaining. It’s easy to prediet the outcome in collective bargaining talks if one side is clearly in a very favorable position. On the other hand. for example. he was able to successfully bargain for other services. Try bargaining with a plumber! This homeowner. there were times when there was no pressure and no emergency. Many companies sell “tune ups” and routine seasonal checks to keep their people busy all year. Since the heating and air conditioning company held no leverage over him. when one side has “leverage” over the other. They are more flexible on price and service when they know the consumer is not under any pressure to buy the service being offered. 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. If the employer is a shipping and express mail company. and was forced to pay whatever they demanded.” Example 1 We have all been at the mercy of someone who uses pressure bargaining. his air-conditioning unit went out. while the other is not—that is. Example 2 Let’s face it: Sometimes one party holds all the cards. not blessed with many household repair skills. its union has the advantage in the weeks just before Christmas. because this is the busiest time for that industry. He was at the mercy of the company that could install an appropriate unit the fastest. the guy was in no position to dicker over the price of the repair.
there are likely to be long-term repercussions. if the unemployment rate is high and jobs are few.) The leverage of supply is also very powerful: If a jeweler has an exclusive contract to sell a ring everyone wants. either individually or through collective bargaining.teams are generally more vulnerable to pressure from the players’ union several days before the season begins. When one side places undue pressure on the other side. however. it is the union’s turn to hold firm on its demand). etc. If you have a special skill that an employer needs and few others have that skill. consider whether or not the two parties will likely meet again in the future to negotiate. but they are less willing to negotiate several months ahead. benefits. (Team owners are notoriously unpredictable. but before you choose such a tactic. the employer has the advantage: a supply of jobs. can suffer repercussions in the form of sabotage. and other undesired outcomes. he didn’t have to be flexible because the employees believed that they had no alternatives. Many labor contracts were agreed to when unemployment and inflation were high and employees felt pressured to accept the demands of the employer. for example. unemployment is low and jobs are plentiful. Other employers find themselves in situations that actually reverse the leverage (when. Employers who refuse to give in on issues of high importance to employees and exert pressure on unions to accept their terms. then you are in a position where you can set reasonable demands on wages. This gives it the upper hand in negotiating with employees. A note of caution: Circumstances in one round of negotiations might give one side an advantage. low employee motivation. The employees had no power to resist the demands of the employer. will what goes around come around? 142 50 Practical Negotiation Tactics . If so. When the employer proposed adding duties to the job classifications. despite strong resistance. What goes around comes around. she has leverage and can more likely hold firm on her price. Conclusion “Pressure bargaining” is a way to achieve objectives that are greater than what is deserved or desired by the other side. On the other hand.
About an hour into the drive. because you will probably only get to use it once. Andrea. Their dad tried to reason with them. the little girls began to fight over the doll. Andrea: Okay. and here’s how the “negotiations” went: Dad: You two stop fighting. Example 1 A father and his two daughters were on their way to visit the grandparents. you have it this part of the trip.) Dad: Stop it right now. the girls had been fussy. Just share the doll. This time. Andrea: The doll is mine. Almost from the beginning of the three-hour drive. I can’t drive if you keep this up. and Susie. They stopped for lunch at a fast-food restaurant and shared a children’s meal that came with a small doll. You’re driving me nuts. Consider making a suggestion or a proposal that completely surprises your opponent. and I can’t stand it. We’ve got a long ride ahead of us. Just because you saw it first doesn’t make it yours. but use this tactic judiciously. I took it out of the box. and Susie hid them under the seat. Tell Susie to let me have it. Mom said so. the argument is over the doll’s shoes. you have it when we drive home.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.) Applying Pressure 143 . (In a few minutes. Why? A sudden surprise can disrupt the dynamics of a negotiation. Susie: The doll belongs to both of us. Andrea had taken them off the doll. the fighting starts up again. Susie: Okay. The doll can be shared. (Their dad pulls to the side of the road and turns to face them in the back seat.
I want the shoes. The litigation itself had been going on for more than three years. Conclusion Dad’s use of a “surprise” tactic was extreme. at great expense to the auditor’s office and the school board. Finally. He grabbed it and threw it out the window. The defendants contended that the auditor’s actions were politically motivated. Dolly doesn’t need shoes on in the car. he slowed down.Andrea: Give me the shoes back. Susie: Daddy didn’t say anything about the shoes. He initiated the litigation against the local school board members and several banks that invested the money for the board. and I hope I can convince you of that. I think I have acted properly. charging that they breached their duty in their handling these funds. Both Andrea and Susie were so shocked by their dad’s action. to no avail.) Dad: Now there’s no more fighting over the doll. in fact. and reached back for the doll. but nothing else up to that point was working. Dolly has to have her shoes. Dad tried correcting them a few more times. 144 50 Practical Negotiation Tactics . The tactic was so successful. The auditor asked to meet with the editor to explain his position. She can have them later. 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. (They continued to argue and whine and pinch each other. Daddy said I got the doll on the way to Grandma’s house. they didn’t say another word. The auditor’s job was to make sure that tax dollars collected for the local education system were appropriately handled. so it was worth the risk. and that they had invested and spent the tax dollars wisely. The local newspaper was prepared to urge the auditor to end the litigation. Here’s how the meeting went: Auditor: I appreciate a chance to talk to you about this litigation.
Auditor: Well. I guess we’re finished here. Conclusion The editor wrote an editorial urging a resolution for the good of the community. one of the banks settled with my office. perhaps you should just cut your losses—and just drop the suit. The auditor successfully used the element of surprise in announcing the settlement and thus changed the direction of the editorial. They’ve been making that same argument from the beginning. but actually superior to some other entities you supervise. The school board members make a very good argument that their practices regarding how the funds were expended are not just adequate. Applying Pressure 145 . Editor: Well. Here are the papers. Auditor: I appreciate their arguments. Editor: (surprised) Really? They settled? This is public information? Auditor: Yes. the bank would not have done that had we not proven our case. Obviously. This morning. there’s just nothing to back up your allegations. That’s really the reason this has gone on so long. Editor: Well. Thank you for coming in. They are very persuasive that this is just a political battle. I really think the community would be better off. as a matter of fact. and a significant amount of money will go toward the tax fund. Your reporters will probably want to follow up on it.Editor: I’m certainly willing to listen. but recommended that the parties reach a settlement. but I have to warn you that from what I’ve seen and heard so far. 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. rather than drop the case. this case needs to be dropped. We believe the other defendants will soon follow suit. and it is costing your office money and good will. From what I can see. I think I have something here that will convince you otherwise.
Kevin: So am I. they’ll be mobile! The last thing I want is for them to be out cruising around. try to focus on that subject or address that member directly to get them to be more amenable to your proposal. If the other side involves more than one person. although getting your license and getting a pool table are connected. especially Kevin. I want to talk about a car! Mike: It’s really not one or the other. Tina: I’m really against this pool table idea. Tina: What do you mean? Mike: When Kevin and his friends get their licenses.Tactic 37: Divide and Conquer Certain negotiations lend themselves to a divide-and-conquer tactic. you might be able to dilute their power by identifying their different interests and addressing them separately. I know we’ll all enjoy it. 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. and a car is more important to him than a pool table. I can remember spending hours playing with my friends and family when I was growing up. Example 1 Tina’s husband Mike wants to buy a pool table for their family room. Mike knows he needs to get either his wife or his son on his side. Tina and their son Kevin are against the idea. night after night. I’d 146 50 Practical Negotiation Tactics . Kevin: I don’t really care about a pool table. but I think it will get a lot of use. Kevin is against it because he is turning 16 years-old soon. 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. Dad. Mike: I know.
don’t you think you guys would use it? Kevin: I guess so. Wylma: Tom. I thought we were making real progress. A pool table could attract them here. I’m surprised. then maybe it’s not such a bad idea. she joined his side of the debate.like them to hang out here more. But I’m not going to hang out here all the time. the head of the union negotiating team. 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. Example 2 Negotiations on a new union contract seemed to be going quite smoothly. the chief negotiator for the company. has just presented the company’s initial wage offer. Tina: Well. 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. Here’s how the negotiations went. and Kevin and his friends use it often. Instead of both opposing the idea. They bought the pool table. some. only Kevin did. A number of contract changes have already been worked out and Wylma. Once Mike convinced Tina of the idea’s merits. Conclusion Mike found an argument that divided Tina and Kevin. Mike: I really do. She noticed that Jim (another member of the union’s negotiating team. Tom. who was studying the company’s financial records for the team) became uncomfortable when he heard Tom’s demand. received it without comment. Kevin. What happened? Applying Pressure 147 .
you’ve heard our demand.) Wylma: Now Tom. forcing them to reconsider their demand. Wylma distributed copies of financial data that showed the company’s current condition. as Jim can point out to you. (When they resumed. Tom had reduced his wage demand significantly. When the negotiations began again. you certainly are aware of our financial situation. you’ve seen our sales projections and production costs. these are accurate. Conclusion Wylma’s appeal to Jim’s knowledge of the actual financial situation of the company worked to divide the union’s negotiating team. I think you need to rethink your demand. This is just what we think is fair. Wylma: Jim. but he added some workplace changes that Wylma was comfortable negotiating. these are our actual accounting figures.Tom: Wylma: Nothing happened. Let’s start again tomorrow morning. Right. 148 50 Practical Negotiation Tactics . But Tom. Your demand is totally unreasonable. Wylma: Tom. Tom: We don’t think so. Do you think this is reasonable? Jim: (looking uncomfortable) Well. Jim? Jim: Yes. Wylma: Let’s take a break.
so pressure grew to draw names and exchange gifts. When all of their children were small. Madison: Okay. but it is really important to me. so you can find a way to quickly neutralize it. especially between Madison and Cory. married. Stay alert and watch for clues that a negotiation is about to get out of hand. Applying Pressure 149 . but as the children grew up and had families of their own. and it makes me very sad. Example 1 The four Jones kids grew up. 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. Humor often works to break the tension of the room. so what’s the point? I don’t need another tie! Madison: It’s not the gift. but it should never be at anybody’s personal expense. it was easy to agree on just giving presents to the children. Sometimes the argument got heated. Cory: Madison. get over it. We can’t afford to buy each other things we really need. Tempers flare and people say things they shouldn’t out of anger or frustration. and had children. That will just make a bad situation worse. I don’t feel Christmas in the way I used to. but the thought that matters. I want to say something.Tactic 38: Break the Tension Tension is inevitable in most negotiations. Ever since Mom and Dad died. the oldest and youngest Jones children. It was a tradition in the Jones family to spend Thanksgiving dinner arguing about how the family wanted to celebrate Christmas. You are almost 40 years old. some of the siblings decided they liked giving presents to one another. I know that you all think I’m silly about wanting to exchange Christmas presents among the adults.
You can say that, but everyone is disappointed when they receive a cheap gift, even if they won’t admit it! Madison: Why are you being so stubborn? You’re just ruining everything! Cory: (also emotional) Look, if you have to receive presents in order to feel that it’s Christmas, we can all just give you presents! Madison: (without hesitation) Okay! I can live with that!! (Everyone laughs.)
Madison’s quip diffused the emotions of the parties. Cory, while very angry, was surprised by Madison’s answer, and was able to laugh. With that, other family members joined in the discussion and they agreed that those who wanted to participate in the gift exchange would. Those who didn’t, wouldn’t.
Jay believed that the new home-theater system he bought was a lemon, but he had very little success in getting the salesman to take responsibility. The salesman agreed to have every complaint looked at by a service technician, but the technician always gave the system a clean bill of health, which infuriated Jay. Jay finally asked for a meeting with the store’s owner, fully intending to leave the meeting with a full refund. Jay: Mr. Owner, I’m very serious when I say that I will not keep this system. It is a lemon, and you know it. Either the sound or the DVD or the picture is always off. Owner: Now Jay, there are some problems with the system, but nothing we can’t fix. Let me turn it over to my best technician, and he’ll be right over to fix it. Jay: We’ve been down that road already. The system has been on the blink 20 out of the last 30 days.
50 Practical Negotiation Tactics
Owner: You’ve had a loaner TV/VCR while yours was being worked on. We’ll be happy to loan you one again whenever you need it. Jay: (becoming annoyed) That’s not the point. I bought a new home theater system and I want to use it! I’m very frustrated by your attitude. Temporary fixes aren’t good enough. Owner: Well, we are attempting to fix the system. You’re the only person who’s had this kind of trouble with one of our new ones. Maybe you’re just having “buyer’s remorse” and really don’t want the system anymore! Jay: (very irate) I can’t believe you said that! This system is a lemon, and you’re trying to blame me! What a crock! What kind of business are you running here? You’re a bunch of crooks. Owner: (now also irate) Just hold on there! I run a respectable business, and I resent your attitude. We’ve bent over backwards to check out each of your complaints, none of which were found to be major defects—just things that needed adjustments. Jay: (very angry) That’s not true. The surround-sound speakers never work at the same time. You don’t call that a major defect? Owner: (realizing he needed to break the tension) Well, my 30-year old Sony TV only has one 3” speaker, but I still watch it. Jay: (pausing and calming down) Yes, my first TV was a Sony. Owner: Look, I’m sorry we’re at this point. Let me take this to my top technician and your salesman, and we’ll fix it. Give me one day. Jay: Okay, but just one day!
The owner used a joke to interrupt the angry negotiations that were going nowhere. He exchanged Jay’s surround-sound system for another new model. The system Jay rejected was sold as a “used” one and never came back in for repairs. Jay’s new system worked fine, and he ended up becoming a repeat customer.
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Stage 6: Making Progress
aking and reviewing proposals and counter proposals will not always close the gap between the two parties’ positions and gain a settlement. Progress might be made, however, by invoking a certain tactic at a critical time, particularly Tactic #39 (Compromise). Often believed to be the key to successful negotiations, compromise is not giving in; instead, it is the ability of a negotiator to prepare a settlement that represents some concessions on the part of each side, but that will also help gain a proposal that is acceptable to both parties. Other key tactics that can move the negotiations to a settlement include the presence or use of an unexpected friendly personality to disarm an opponent (Tactic #40: Be Friendly!) Bringing to the table a person who is highly respected by the opposing team is a good move; such an individual might be able to gain their confidence and support your position (Tactic #44: Make Use of a Positive ‘Halo Effect’). One tactic that never fails is the classic Split and Choose (Tactic #42), which goes like this: One side divides the item into two parts, and the other side gets to choose which part they prefer. Parents have used this tactic to divide the last piece of pie or cake between two kids for decades! Additional key methods that move things along include the chilling effect of one party unexpectedly tape-recording meetings (Tactic #41) or presenting facts (Tactic #45) that unexpectedly support their position. Experienced negotiators also achieve progress by asking probing questions (Tactic #46), which can reveal or point out flaws in their opponent’s position or by using a period of prolonged silence right after a heated exchange. Experienced negotiators often achieve a final gain in a settlement by nickel and diming (Tactic #43) over small items.
C. don’t you want to play? We could color before your mom comes. The day-care worker wanted to take them outside for a while so that he could visit with his friend. If there is resistance to compromise. each side must decide whether or not one more compromise will produce an agreement that they will later regret. they would have to play ball with older children. Mr. it is better not to compromise. however. Julie wanted to play “dress-up. If I can be the Princess.Tactic 39: Compromise Negotiations are successful when all parties walk away with an agreement they are satisfied with. 154 50 Practical Negotiation Tactics .” but she needed Dara to play with her. It is the give-andtake of a negotiation: one party agrees to give up one of its demands in exchange for something of value from the other party.: Julie: Dara: Mr. Example 1 Julie and Dara both attend a local preschool.: Julie: Dara: Julie: Girls. and that doesn’t happen without compromise. Dara. the individual might be afraid that the exchange isn’t equitable). the exchange will be between things of equal value. I want to play “Prince and Princess. but since the other children in their room were not there. Isn’t it “later” yet? Right now would be a good time to go outside. When that point is reached. I want to play “Princess” and I want Dara to be the “Prince. Okay. At some point. Then we can color.” Can I color now? You said we would color later. or maybe tomorrow. who was outside with older children. how about going out to the yard for a while? You can swing or play ball.” Dara. they were the last children left in the playroom for the remaining two hours of the day. Both of the little girls liked to play ball when they were outside. was ready to color. not the Prince. C. (In a successful negotiation. One day.
C. Mr. When his variance application was made public. you can come back in and play “Prince and Princess. 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. failed to offer the children something that was as important as the plans they had made. and teenagers attracted by Making Progress 155 . The owner decided to try for a variance. and they still had time to color. Conclusion The children stayed inside and played dress-up.” No. 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. We don’t want to go outside. The owner and a small group of neighbors met to talk about these problems. or apply for a variance. The neighbors: The neighborhood has four concerns: Theater patrons will be taking up scarce on-street parking spaces. the parking lot will start to look trashy. We want to play dress-up and then color. the owner had to supply additional parking.: Julie: Hey. 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. According to the city’s zoning laws.Mr. there will be an overall increase in traffic coming through the neighborhood and vehicles will be turning into and leaving the parking lot. neighbors became concerned about the changes to the mall. They did all the compromising they were willing to do. however. wouldn’t you like to go outside first? After you swing for a while or play ball. C. The existing parking lot didn’t meet the current parking standards for that size theater.
I’m certain the lot will accommodate the theater crowd without increasing the parking on your neighborhood streets. 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 hope you’re right. lights in and out at night can be very annoying. Owner: You know that there’s always plenty of parking in the south end of the mall’s parking lot. Many of our homes back up to that lot. The fence would shield neighbors from the lights from the vehicles and block the walking access through the alley. the closest parking to it is along Elm Street. and we’d like to keep it that way. even though I’m not adding any parking. the south parking lot has not been used much. not having direct access to the south lot from the street would be unworkable. as you said. and break in his door. You could have all of the traffic enter from the north lot. So. driveways on the south side of the mall are along the east and west side of the parking lot. with your plans to put the entrance of the theater on the east side of the mall. We’re just not convinced. And. Right now. In fact. With the Comedy Club and the grocery store on that end. I could put a privacy fence along the east and west—at the backs of your yards. the north lot is used more. I’m afraid. We’d like you to prohibit cars from entering or leaving from the south lot. The neighbors: Owner: 156 50 Practical Negotiation Tactics . if I agree to move the theater entrance to the south side. Not having in and out traffic to the south of the mall is just not very practical. but it’s not ever full. Right now. only when that lot is full would cars come around the mall and park on the south side. All a patron has to do is park on Elm and walk beside Joe’s yard through the small alley there.the theater will start to hang around and maybe wander around our yards at night.
If the fence was set back the width of a driveway onto your property. Now you’re talking about considerable expense. If I agree to move the theater entrance to the south. But you’re going to have to have some kind of security as well.The neighbors: Owner: The neighbors: Owner: But we use those side drives to get to our garages. The compromises were what everybody could live with. set back a driveway width. add a new entrance into the south lot. Agreed. however. Making Progress 157 . And a year after the theater opened. there could still be access from the street to our garages—just not to the main parking area. put a privacy fence along both the east and west sides of the south lot. Teens can form into gangs if left unwatched. 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. Conclusion Both sides had to give up something on certain items in order to reach agreement. The fences created a buffer from the lights and noise. the neighbors reported that they were very happy with the way it all worked out. The fence would help with the vehicle lights and buffer this noise from the kids who hang around. and they discouraged patrons from parking on neighborhood streets. then will you agree not to push for increased private security? Yes.
158 50 Practical Negotiation Tactics .m. If your opponent is aggressive or angry.m. and I just moved in next door. They might even start to underestimate your negotiating skills. Joan was already pretty tired. she just didn’t think it was a serious problem. just forget it. Joan decided to at least try and talk to the neighbor. Lonely. Joan had a new baby. and that as angry as they were. She learned that everyone in the neighborhood had complained at least once.. your friendliness might disarm and relax them to the point where they begin to talk about their priorities and objectives. Example 1 Joan was new to the neighborhood. This gives you an advantage. and pleasant always enhances one’s ability to reach an agreement. but be friendly. and started to get upset.Tactic 40: Be Friendly Being polite. Mrs. so her neighbor’s barking dog came as an unpleasant surprise. and didn’t stop until 6:00 a. professional. respectful. incident was usual or unusual. and what kind of complaints might have already been made. Your opponent might give in readily. but going out of your way to be friendly is an especially helpful tactic. She sought advice from the family on the other side of the neighbor with the barking dog to see whether this 3:00 a. The dog was Mrs. and because she was hard of hearing. Lonely’s only companionship. Lonely: If you’re here to complain about my Rocky. because you are the one to set the tone for agreement. Mrs. Present your position forcefully. thinking that you will be just as easy to work with on the sticky issues. they had gotten nowhere. 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.m. She didn’t believe her neighbors ought to complain about the barking. and sleeping at night was already a difficult proposition! When the neighbor’s dog began to bark at 3:00 a. Close your windows at night and don’t listen. I’m Joan. Joan: Hi.
I guess that would be okay. I’ve only got my Social Security. How long have you had him? Almost eight years now.Joan: Mrs. Lonely: Joan: Mrs. Do you think his age has contributed to some of that? You know. no. I guess so. sure. Who. Here’s my little angel. (Joan’s sleep was disturbed by another night of barking. then. don’t worry about that. Well. Lonely: Joan: Mrs. I know that some of these people around here don’t like him. though. No. He’s been keeping me up at night. I sure hope he starts sleeping through the night soon. I’d like to introduce you to my new baby. I might have to talk to you about Rocky. Lonely: Joan: No. I can’t pay for something like that. Lonely again. I stopped by and visited with him over the fence this morning. too. Maybe I could come back tomorrow and bring him? Oh. Mikey. The barking at night has been mentioned to me. not at all. but she took her baby and went to visit Mrs. I’ve got a friend who is a veterinarian. When he does. by the way. He’s a real comfort to me. Lonely: Joan: Mrs. Lonely: Joan: Mrs. My friend wouldn’t charge anything for talking to us about Rocky and maybe giving us some advice. and I’d like to have him stop by and look at Rocky—would that be okay with you? Well. is a really sweet dog. it’s probably because they just haven’t had the time to get to know him.) Hi. I need to get the baby home. I’ll see you. I just wanted to come by and introduce myself. Well. isn’t he cute! He’s a handful. Why. Making Progress 159 .
Mayor: (very friendly) I understand how these things happen. overseeing a factory in Mexico and selling products in the states. When he heard the news on the radio.A. agreed to meet with the mayor. that the press got hold of the story of our company’s activities before we could call you to let you know. Here’s how the meeting went: Company ZZZ: We’re very sorry. Company ZZZ was not able to meet with local elected officials regarding the status of their operations before the press reported the layoffs and the uncertain future for the 150 white-collar employees. Under its new corporate structure. They anticipated that it would be an unpleasant meeting.. Lonely didn’t have to pay for the medicine she could not afford.S. After Joan’s veterinarian friend visited with Mrs. Company ZZZ. that’s very understanding of you. U. Hearing about this from the press obviously puts you in a very embarrassing situation. Lonely’s needs and arrive at a workable solution to the problem.Conclusion Joan’s friendly approach enabled her to understand Mrs. the mayor called and asked for a meeting with Company ZZZ officials. The barking all but stopped. its 150 management and sales employees could continue to work in Happy City. Lonely and Rocky. recognizing that the layoffs would be an issue in upcoming local elections. Company ZZZ: (surprised) Well. you would have. Joan took up contributions from the neighbors. 160 50 Practical Negotiation Tactics . he prescribed medicine that gave Rocky a more regular sleep schedule. I think that if you could have let me know ahead of time. and Mrs. of course. Example 2 Company ZZZ planned to close its manufacturing plant and lay off 300 union employees. It’s very difficult to make a move of this type without having it leak out.
Mayor: I wanted to meet with you so we can take the necessary steps to keep the 150 jobs here. I am certain that you would like that kind of “good” publicity coming quickly after the recent bad publicity. and I want them to know that. By the way. Company ZZZ: I’m not sure what to tell you on that. Conclusion The mayor’s strategy was to disarm the company with his friendly attitude and in return get a favorable response to his proposal to buy the property in question. Would you be in a position to talk to me about such a deal. or would we need to involve the Malaysia group? Company ZZZ: Certainly. They need a really good deal on the plant price. 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. Unfortunately. Making Progress 161 . 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. We recognize that your new corporate owner is a large company located in Malaysia. We just haven’t heard anything yet. the city has a potential buyer for your plant building. Many laid-off employees did indeed find new jobs at the plant. Mayor: Please let me know as soon as you can. It’s possible that some of the 300 laid-off employees will find work at this new endeavor. Mayor: Great! Let me know when we can talk again. and the mayor was reelected. The mayor was able to broker a deal for the “disadvantaged business” to buy the plant and convert it to a different widget maker. You’ve been very understanding about this. the 150 management/sales jobs did end up moving to Mexico. This strategy worked. so we need to understand how we can affect their decision on keeping an office here.
and Jones. The effect on the other party might be even more substantial if lies. Alexis. threats. age 15. Susan denied it. She agreed that her proposal was not fair and that she had tried to take advantage of her younger sister. or simply “bad faith” methods have been used by the other party. Alexis knew this was not fair. Example 2 Three men were meeting to discuss a charge of sexual harassment that had been made against Stuart Jones. Example 1 Susan. were on vacation with their parents in Myrtle Beach. until Susan said they would evenly split what they bought. the younger sister. The two sisters had saved up a little money so that they could buy souvenirs. He asked his elder daughter about the arrangement. and Alexis. Fred Adams. They might worry that the tapes will be made public or given to others. the accused. had $40. Michael Wood. but Susan had only $20. 162 50 Practical Negotiation Tactics . Alexis agreed. this time in front of a hidden recorder. Somehow. who was disappointed to hear that she might propose such a deal. South Carolina. Susan repeated her demand. thus becoming a source of embarrassment.00. She borrowed a tape recorder so she could ask her father if this was a fair deal. Jones’s supervisor. Conclusion For the first time in her life. Alexis then played the tape for her father.Tactic 41: Record the Meeting The climate of a negotiation session can be “chilled” in an instant if one side unexpectedly brings a tape recorder to the table. Susan understood the impact a tape recording can have when it reveals a lie. age 14. the investigator. or used to pressure the other side to agree to certain demands. Susan wanted to negotiate with Alexis to “pool” their money so they could buy something together. are talking about a possible settlement of the issue. Then he played the tape.00 to spend.
(a long pause) I want to see my lawyer. Making Progress 163 . “Do what I want. you are aware that the next step in this process is to ask witnesses to come forth. he also lost his negotiating position. Ruiz and Ms. I simply asked her to make copies for me as quickly as possible. So.” meaning something other than copies? No. Conclusion Jones had knowingly lied when he denied the charges. Mr. Jones. exactly what you said to Ms. You never touched any part of her body? Not even accidentally? No. I’ve brought a tape recorder with me. Mr. stares. to quote you. No one could have possibly misunderstood your intentions? No reasonable person. And you did not threaten her job if she did not. And please describe your general manner. Starr. I think I can write my recommendation.Adams: Jones: Wood: Jones: Wood: Jones: Wood: Jones: Wood: Jones: Adams: Jones: Adams: Jones: Adams: Tell me again. Stuart. Your request. He failed to think about what might be the next step. When Adams set the tape recorder on the table and revealed that he had witnesses. Appleton both claim they saw the incident and will testify. So you refuse to repeat the answers you just gave us? Yes. Well. and gestures did not have a single hint of sexual implication or innuendo? None at all. But by refusing to repeat his answers. Jones suddenly realized that his strategy would not work. and now I’ll ask you to repeat your answers—on tape.
is usually careful about dividing the object into two equal parts.… No way! Haven’t you two heard of ‘split and choose’? It’s a fair way to divide things.” the divider. because you did the cutting. Roberto will get to choose which half he wants. take this knife and slice the Snickers into two halves.Tactic 42: Split and Choose When two parties both desire something that can be shared or divided between them. 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. Oh. Maria and Roberto: No. one person is given the task of dividing the object(s) into two parts. The second person then chooses which of the two parts they will receive. of course. Maria. Many of us learned this one from our parents: After two people agree to the strategy. Maria: Roberto: Maria: Father: Father: We can’t share it! It’s in one piece! I’ll eat half and give you the rest. which certainly is large enough (he naively thought) for two young children to easily share. Their dad instructed them to share the candy bar. the classic “split and choose” tactic might be the best way to settle the issue. so I’ve got to cut it into two equal pieces or else he will choose the bigger one? Exactly. What is it? Maria: Father: 164 50 Practical Negotiation Tactics . with the remaining part going to the person who did the dividing. Realizing the potential of getting the “smaller half.
Give me the map and a pencil. Then I will choose which parcel I want. but the appraiser pointed out that the seven one-acre lakefront lots are considerably more valuable than the other seven lots. Making Progress 165 . There is only one place for an access road that must serve all lots. Clarence: Right. They have a recent appraisal that values the property at $150. Example 2 Two friends and business partners. Archie is ready to build a retirement home on the property. so we should be able to divide the property fairly. Archie: That’s true. That makes them more desirable. both parties. 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. They all have a great view and are equally desirable to build on. Archie: Here is the map. and wants to divide it into two separate parcels. jointly purchased fourteen acres of lakefront property several years ago. Clarence: But some of the lots away from the lake have been partially cleared and are flatter than others. but is not sure how to arrive at a fair split. Clarence agrees to divide it. Deal? Clarence: Sure. The remaining lots should be distributed between the two parcels to make each parcel as equal in value as possible. Lots must be at least one acre to be developed. Clarence and Archie. I don’t really care which lakefront lots I keep.Conclusion When two people desire the same object and it is something that can be divided in some way. Archie: I really don’t care either. according to county deed restrictions. even children. that sounds fair.000. The problem is that one of us will get four lakefront lots and the other will only get three lots. quickly recognize the fairness of the divideand-choose method.
and both men were happy with the arrangement. Archie chose the parcel with the three lakefront lots. and the second parcel with four lakefront lots and one other lot. Which would you have chosen? 166 50 Practical Negotiation Tactics .Conclusion Clarence divided the fourteen acres into one parcel with three lakefront lots and six other lots.
miles from their home. However. Jason was having a hard time getting the salesman to lower the price. His tactic was to throw in a “nickel” in order to make lots of “dollars. “Okay. Her husband Jason. supposedly the bargainer in the household. and the delivery carrier doesn’t set up mirrors.” thus extending the scope of the negotiations. They recently purchased a new bedroom suite after they carefully priced comparable furniture all over town. 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. The suite they liked best was already at the lowest price in town (the retailer was having a real sale).” Under store policy. 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 . attach legs.” Many people have witnessed or used this effective negotiating tactic. he also set up all of the furniture in a second-floor bedroom. etc.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. so the salesperson delivered the suite himself. because a “nickel” item has been added to negotiations about a much more significant item costing “dollars. Brenda did her part when she said. Conclusion The amount the couple spent was fairly large. With a great deal of effort. is expected to dicker over the price. Example 1 Brenda Davis is always thinking about the repairs that might be required on an item. we’ll take the suite if you’ll throw in free delivery and set up the furniture.
we’ll agree to Health Plan A with another ½ cent on the pension fund.important item. 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. it can be a dealbreaker.” Conclusion The nickel and diming tactic is a classic negotiation tactic used successfully in a variety of situations. In one case.” The company negotiator yielded to this small-potatoes counteroffer in order to win agreement on the health plan. If used correctly—at the very end of a negotiation—the tactic can usually provide a small gain. “Okay. This experienced bargainer said. the two sides had been engaged in considerable bargaining over an improved medical insurance plan (“Health Plan A”) costing hundreds of thousands of dollars. At the end of negotiations. so be prepared to withdraw the nickel and dime item at the hint of trouble. 168 50 Practical Negotiation Tactics . If one party misjudges the situation.
Kathy: I suggest we take turns choosing which of these things we want. Kathy: I’ll take the pool table. Kathy: Not if you accept your logic! (Pause) Donna: You’re not being fair… Making Progress 169 . decision-making meetings. and performance evaluations for people to come across as likeable. You can go first. but they are two pieces of furniture.Tactic 44: Make Use of a Positive “Halo Effect” It is common in interviews. I’ll take the color TV. trustworthy. thus creating the impression in others that the good qualities they see are present all the time.” Having a member of a negotiating team whom the other side thinks can do no wrong might prove to be advantageous. Donna: They match. and all the rest is small junk. Kathy: But they are a matched set. People tend to make an effort to put their best foot forward. Example 1 Donna: Mom said to take what we want from the old house and toss out the rest. Donna: Okay. or knowledgeable. 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. Donna: I’ll take the bar with stools. Donna: No way! These are the last two pieces of furniture. Kathy: Then I’ll take the couch and love seat.
and if the bar and stools should be one item or two. and he has always struck me as an honest person. the team representing the city management found itself unable to convince the union negotiators that their newly proposed staffing plan would provide adequate personnel for each firehouse. Good idea. Let’s call Johnny Ryan. He’s our cousin. Johnny had the “halo” of an honest person. and ask him if the couch and chair should be one item or two. What for? Tell him the situation. 170 50 Practical Negotiation Tactics .Kathy: Donna: Kathy: Donna: Kathy: Kathy: Donna: Kathy: Donna: Kathy: You’re not! (Pause) Well. I want the love seat. He might or might not have also been a good arbitrator. Example 2 During a heated labor negotiation. but Kathy and Donna assumed that one positive quality (honesty) would carry over to other areas. I want the stools. (Pause) We’ve got to settle this today and get this stuff moved. The union negotiators. with a record of labor involvement that included three recent strikes. what can we do? Give me the couch and love seat! No. I trust his judgment. Conclusion Kathy and Donna needed an arbitrator to settle their disagreement.
even if the proposal appeared to be valid. but the power of the so-called halo effect was great. and that he did. Making Progress 171 . Boston was widely known as a totally honest man who speaks his mind. On Monday.simply did not trust the management team. The teams took a weekend break from the stalled negotiations. without any reservations. Two weeks later. when negotiations again stalled on a retirement plan issue. the consultant did not speak. He said he believed that it would work as presented by management. During the break. thus bringing the negotiations to a conclusion. He solemnly told the union negotiators that he had been hired to review it. the former union president. the city management again hired Boston. Boston went to the negotiation table with the management team. This time. They might have stretched his halo farther than his expertise and experience warranted. 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 management team hired Sam Boston. but his mere presence caused the union leaders to accept a management point as valid. as a consultant to review their proposal. The union accepted the proposal.
000.Tactic 45: Use Facts Fact-gathering must be part of the preparations for every negotiations session. $235. but we feel that it’s a fair offer. $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.000.000. but the right facts presented at the right time can chill or astound and completely turn things around. and we are countering with an offer of $250. but the key is to gather facts that you might need—not just the facts that you will need. and $237.000.000.000.000 under the listing price! We realize that. $229. They believe it is overpriced. Sam Jones. The owner. They sold for: $225. has owned the house for 24 years and is downsizing to a condo. What? That’s $35. Sam Jones: Sam Jones: 172 50 Practical Negotiation Tactics . Here’s a list of the five that are about the same size as yours. the other party will ignore or refuse to believe the information. Sometimes. (Next day) We’ve reviewed the records you’ve produced. Example 1 Henry and Maria Lopez are interested in a house that lists for $275.500. but you’ve priced it way too high.000. I’ll get back to you. We love your house. Henry Lopez: Sam Jones: Maria Lopez: Sam Jones: Maria Lopez: We love the house and have made a written offer of $240. Being able to present them at the most appropriate and critical times has made the difference in countless negotiation situations. This offer is for more money than any four-bedroom houses on this neighborhood list.
Henry Lopez: Sam Jones: Henry Lopez: Sam Jones: Let us discuss this for a minute. let’s not worry about it. Order the new computers. You can’t pay more than $1. The facts presented by Henry and Maria Lopez caused Jones to re-counter their asking and likely sale price. and wisely chose exactly when to present them in order to make his point.400 each. The last 20 were over $2. Example 2 Supervisor: You know the policy. Well… We have a written counter of $245. That’s the bottom price. Supervisor: Well.000 each. We accept. Supervisor: If I okay this purchase order. I asked for a list of all new PCs bought this year. I’ll get called on the carpet. and we know that only this model will meet our needs. Hatfield: My staff has done a lot of research. and did his homework. Hatfield: While I was at purchasing. We’ve talked with purchasing and we have the authority to buy seven for $2.000.600 unless the company president approves. No one can go over $1. Conclusion The Joneses had based their asking price on the advice of a friend. I’ll be… Okay. who was not particularly knoledgeable about real estate. He found facts that supported his position. Conclusion Hatfield had anticipated what his supervisor’s position would be. if other departments have ignored the policy. Here it is. Making Progress 173 .600 for a computer.
and two are for my husband. Maureen: Well. Otherwise. But I can’t break the limit rule—it is an absolute rule here. I can’t check out these four books? Jenny (Librarian): That’s the policy. and help you point out inconsistencies in a position that might “lead” the other side to change theirs. Maureen: Well. Would I do that? Jenny: Maureen. reveal misperceptions or lack of knowledge about positions that can be corrected. They can help you identify or better understand what the other side really wants. I’m sure you would not. I can do that within the rules. you know me. A maximum of three books can be checked out to a person at any one time. Maureen. I trust you. I want two of these.Tactic 46: Ask Probing Questions Ask probing questions and follow-up questions. 174 50 Practical Negotiation Tactics . yes. some people would have forty or fifty books out at the same time. can you check out two on a card for him? Jenny: Well. Example 1 Maureen: What. Maureen: So you trust me with the books. and they would all be unavailable to others. The effective use of probing questions can help achieve a favorable settlement. If you trust me. Maureen: The policy limits a person to only take out three books at the same time? Jenny: Yes. but I don’t set the policy and I can’t make exceptions. but you don’t want to jeopardize your job? Jenny: Yes.
Example 2 Jack: Mark: Jack: Mark: Jack: Mark: Jack: Mark: Jack: Mark: Jack: Mark: Jack: Mark: Jack: Mark: Jack: Mark. What’s the policy number or date of approval? I don’t know. and Kenzie. but it’s because you don’t have access clearance. Why? Some policy? Yes. Sue. Making Progress 175 . we can’t do that. Babu. Mary. Security? Right. I couldn’t find anyone who knew it. Jay. it could kill us. (Next day) Do you have the policy about giving out product sales information? No. Brooks. They say it’s a security issue. Can you get me the number? Sure. Who does have access clearance? Mike. Mary and Kenzie? They are 2-3 pay grades below us. But this forces us to make decisions without complete information! Yes. are you sure I can’t get your information technology people to give us direct information on product sales? No. and they don’t even have a use for the sales data.Conclusion Maureen used probing questions to uncover a way to solve her problem and make it easy for Jenny to stay within the library rules. If that data ended up in the wrong hands.
176 50 Practical Negotiation Tactics .” He intended to do this until he hit a dead-end or was able to find a solution to his problem. Jack: Here.P. I’ll sign now. Jack: Can you ask your V.… (Next day) Mark: The vice president said you can have access if you sign a security card like everyone else who has access clearance. I’ll get it for you ASAP. that’s been the policy since I’ve been here.Mark: Well. if we can have access? Mark: I guess so. Conclusion Jack continued to probe by asking why and who in order to find out more about “the policy. His probing questions turned up a critical fact. Jack was able to receive clearance as well. Once he discovered that employees in lower pay grades had access clearance. When can I get the data? Mark: Today.
They bring it out when a dispute arises. 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. 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. When multiple issues are at stake and most have been agreed upon during negotiations. 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. If people are not willing to take even a few minutes to write down the terms that have been agreed upon and sign the paper.Stage 7: Reaching Agreement he final stage! It might come minutes. this process can easily result in a final settlement. When two parties believe they have an oral agreement. and the classic Walk Away (Tactic #48). Tactic #49 (Final-Offer Arbitration) should bring about a settlement. 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). If both parties desire a settlement but cannot seem to reach it through the usual give-and-take process. hours. days. this tactic can produce an agreement. 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. In this process. If friends or neighbors need to settle something but prefer to avoid the negotiation process. T Reaching Agreement 177 . or even months after the first offer is presented. and the child learns an important lesson about life.
off-again discussions. one exhausted negotiator saw that his team was equally weary and 178 50 Practical Negotiation Tactics . Let’s do go to Virginia Beach and Washington D. 3) and adds one last key demand to the congratulation sentence. Example 1 Many husbands and wives have different ideas about how they’ll spend their vacation. “I’m thinking of agreeing to your plans for vacation. Example 2 Negotiations can take a long time and incorporate many issues.” Conclusion The husband was so excited about visiting Washington. Larry Snyder gets bored staying in any one place for many days. She said. Nancy brought up the subject of vacation again after dinner. 2) allows the other side to feel the release that comes with completing the bargain. she continued to speak: “…as long as you agree to drive us to visit my mother on her birthday. Near the end of a particularly anxious bargaining session when there was little time left to negotiate. and Virginia Beach —his plan—that he let the euphoria of the moment cause him to agree to a trip he dreaded and in fact had successfully avoided all year. but his wife Nancy likes to stay put and relax. The bargainer skillfully 1) begins the congratulation sentence “I agree…”. After days and weeks of on-again. Weeks of stressful meetings cause both sides at the bargaining table to look forward to its conclusion.C. They both have stressful jobs and look forward to their annual vacation together. D.…” Larry was very pleased that his wife was agreeing to the idea he had been trying to sell. His wife had carefully planned her exact “premature” vacation agreement.C.Tactic 47: The Premature Congratulation This tactic draws its strength from timing. As he hugged her.
(This is a bad position to be in. It was so close. One of the best pieces of negotiation advice is to remain fresh. The celebration had begun. We all knew that it could come down to agreement or strike. but we agree to everything in your final proposal…” Members of my team shouted hooray. In our last offer. When the chief negotiator emerged with his team and headed toward my team. Most people didn’t notice that the negotiators had not finished their hand shake… Ted: Then Ted continued his sentence with. and rested.almost willing to accept any deal. but the other side continued to ask for 60 days. Ted said. fit. symbolizing that he was agreeing to the entire final offer. he turned on a large warm smile and extended his hand to shake.) Here’s what happened: Bob: I knew that the other side was similarly harried. There were grins and handshakes coming from the other side.” Bob: Ted timed this perfectly. However. but also that they sensed the weariness of my team. “…as long as you give us a 45-day probation period. and this skillful negotiator let them feel the happiness and security one feels when the fear vanishes. as the negotiator came closer. The old agreement specified a 30-day period. we made some small concessions on financial matters. we held firm on this and did not discuss the probation issue and many other “dead” issues for days. One operating issue involved the probation period for new employees. Therefore. “It was hard for us. Reaching Agreement 179 . I felt the tension in the room. but acceptable. because it makes you pretty vulnerable. My team had convinced me that doubling the time frame would create a real problem on the shop floor. It took only a few minutes of caucusing for my team to convince me that a 45-day probation was costly. My team was afraid we would not even come to an agreement. but held firm on remaining operating principles.
However. The negotiator makes a big show of agreeing and allows the other side to bask in the glory of a deal completed.Conclusion This “premature congratulation” tactic can only be used successfully at the very end of an unsure and shaky negotiation. the negotiator skillfully finishes his words of congratulations by inserting one last key demand. 180 50 Practical Negotiation Tactics . knowing that it will probably be agreed to in order to continue in the euphoria of the moment.
I’ve worked with you before. but his Avalon has been a good car. be sure you think this through beforehand. Your opponent will have to either let you go and run the risk that things are really over. (Vahaly drives the new Highlander home. a veteran salesperson. He stopped by Pembroke one day to look at the new models.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. all from Sue Wilson. I like it. how did you like it? Jay: Okay. and the lease on my Avalon is about to expire. Jay: Hi. or go after you and perhaps make a new concession in order to get you back to the table. but I thought I might want to try a new Highlander. if I roll over the lease to a Highlander.) Jay: Sue. Sue: Well. Sue: Let me get you the keys so you can take this one home overnight to see how you like it. what can you do on a 36-month lease? Reaching Agreement 181 . He really likes it. I don’t want to negotiate. right? Jay: Yes. Example 1 Jay Vahaly has purchased three new Toyotas from Pembroke Toyota over the past twelve years. Whether you are really bluffing or you are serious. Jay. Sue: I remember you. Jay. the following exchange occurs. too. The next morning. You bought your wife a new van just last year. My name is Jay Vahaly. but my Avalon is a good car. and he can simply buy it when the lease expires. here are your keys. You had time to assess my car.
(15 minutes later) Sue: Well.Sue: Give me a few minutes and I’ll find out … (20 minutes later) Sue: Well. at most. Sue: Sorry. He was prepared to keep his Avalon if the lease was even $1 more than his limit.) Conclusion Jay knew his BATNA (best alternative to a negotiated agreement): to go somewhere else if the deal isn’t good enough. Sue called him as soon as he walked in the door and offered another $50 break on the lease. Please go back and work out a lower lease payment. a successful musical instrument sales and rental store. Jay—wait. These Highlanders are hot items! Jay: Well. I thought I’d get a fair deal. Example 2 Larry and Judy Bizannes own the Bizannes Music Mart. Jay: I guess I’ll go to Dixie Toyota and see what they will do for me. but 182 50 Practical Negotiation Tactics . they came down to $199 more on a thirty-six month lease. Jay accepted. I’m disappointed. Jay. (Jay got in his car and drove home. Jay: What? I was thinking the lease payment would be. They’ve talked about retiring in recent months. He effectively used the walk-away tactic to let Sue know that he was firm on the price. $100 more. Jay. Let me try again. Sue: I’ll try. you can turn in the Avalon and get the Highlander for only $249 dollars more per month. (He walks away) Sue: No. That was the figure he was looking for.
Larry. you’ve already told us that. Michael: Well. so why are you here? Michael: I’ve discussed it with my partners. In reality. today.both of them love their store. but their continued walkout convinced Michael that they would hold firm.5 million. Michael: I have a check right here for 4.) 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. let’s eat lunch. What do you think? Judy: Larry. I still want to develop this block. Michael: Good morning. Michael calls on them again with a check for $5. (Judy and Larry walk into the back room and close the door. our accountant said it’s worth $6 million. come out here! (Judy comes out from the back room.) Larry: Michael is here again. and I’m prepared to offer you $4. How’s business? Larry: Great! I’m surprised to see you again. and he is offering us $4. You rejected it. Larry: Judy. Larry. Larry: Michael. which the Bizannes accept. and I only need your building to own it.0 million. go back to your office. Reaching Agreement 183 . Judy: Larry. Michael Roberts. Two months later. and we gave you our price. He met with Bizannes twice before. a local developer. visited their store. after no contact from Larry or Judy. with a certified check. and I’m not interested in less. Larry: Yes.5 million for the building.5 million.5 million. they were prepared to accept $5. One day.
Jenny told them to sell it. In most arbitrations. 184 50 Practical Negotiation Tactics . Both involve the use of third parties who are objective. the arbitrator is given the authority to make the parties comply with the ﬁnal and binding decision. I offered it to you for nothing. In ﬁnal offer arbitration. One day Lynne dropped by for a visit and the discussion turned to the old Singer. Jenny: No. In arbitration. Lynne responded that this was their intention. I won’t take it. In mediation. That was the deal. Six months later. Lynne and Gary bring the restored Singer to Jenny’s house. but they wanted to give Jenny $500 for her “share” of the machine. They inform her that they put the machine on e-Bay and have an offer of $1. The following discussion occurs: Jenny: The old machine wasn’t worth $50 when you took it. the mediator works with both sides to resolve certain issues but has no authority to make binding decisions. Lynne told Jenny that she and her husband Gary have restored two other Singers.000. which is generally voluntary. Jenny told Lynne she could take the old Singer that she has no interest in (and doubts that it is worth restoring). Keep the $1. so they generally give up some ground and try to make the offer appear as fair and reasonable as possible.000. each party submits their ﬁnal offer on each unresolved issue (usually in writing) and the arbitrator chooses one as the ﬁnal settlement as it has been submitted (no changes or compromises). Lynne: No. We have a few dollars invested in parts and we had fun working on it. Jenny has an antique Singer sewing machine.Tactic 49: Final-Offer Arbitration Mediation and arbitration are two well-known ways of resolving sticky disputes. which she has kept in a barn for over ten years. Example 1 Jenny and Lynne are sisters. Let’s split the money. and would be able to restore hers as well. Lynne: No! I suggest that we each write down our position and let Dad choose one of the two as the final decision. 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.
m.m. based Reaching Agreement 185 . first on the health insurance co-pay. Then we both submit our final offers to Judge Ryan within 48 hours. so I am invoking the finaloffer arbitration ground rule we have in place. we are down to only three unresolved items. Tina: Yes. I can’t see any way to reach an agreement. The union’s position could have run into millions of dollars. They should get the other $950. on Friday. I have chosen management’s offer to keep it as it is under the current contract. Tina. Example 2 Ralph: Well. after six weeks of negotiating. Ralph: Right! (Friday at 3:00 p. the old machine was only worth $50 when Lynne hauled it away. At best. Their father found Jenny’s position to be the most reasonable. since he could only choose one offer. but we’ve made no movement on any of them since we started. (One week later) I think Jenny’s position is the most reasonable. binding decision on the three items. My troops are getting restless.) Judge Ryan: Here is my written.” Lynne proposed a 50-50 split. Ralph: I know. I’ll buy that.Jenny: Dad: Okay. As a brief explanation. Conclusion Jenny’s final position was that she receive $50—the maximum possible value of an old “junker. and meet back here in 72 hours—3:00 p. he did not need to “haggle” with them. Any increase in value was due to the work of Gary and Lynne. Tina: Good.
Now let’s get a signed contract. Ralph. and peacefully finalize a contract that contained several important gains for both sides. No increase has been given for six years. nor why their method was superior. and an item that large should have been negotiated at the table. on the merit pool distribution method issue. and stress. Well. I have chosen management’s offer because the union did not justify why the past practice should be changed. on the clothing allowance.000—less than 1 percent of the total package. I’m not happy with your decisions.Ralph: Tina: on last year’s data. I’m sure you realize that we could have taken six more weeks to reach the same point. but we agreed to this process. I have chosen the union’s final offer. Finally. Conclusion The final-offer arbitration process enabled the parties to gain a fast. reasonable resolution to their last three unresolved issues. 186 50 Practical Negotiation Tactics . money. Second. It will only cost $120. At least we both saved time.
not the furniture. Obviously. Seller: We’re asking $152. If we shake hands on it right now. We’d like to make you an offer of $150. At the very least. They finally looked at a house they really liked. The goal of recording the precise details is to either avoid any misunderstandings or address them before the talks conclude. They were not the only couple to come to the open house. seeing the agreement in writing will force both sides to acknowledge what has been said and agreed to in the negotiations. they looked at this particular house on their own. and felt that they would have to work fast to make an offer before someone else did.000. During a discussion. Example 1 Bill and Paulette had been house-hunting for some time. The owners were selling the house without a real estate agent. we won’t be involving our real estate agent. everyone is busy grappling with the details of the negotiations. Bill and Paulette fell in love with the house. and one of the other couples looked very interested. Seller: Yes. and decided to stop by to see if they liked the house.Tactic 50: Commit the Offer to Paper You can often control the progress and direction of a negotiation by writing down the agreements or understandings as they are being reached. They saw the “For Sale” and “Open House” signs. Bill: Reaching Agreement 187 . all the usual stuff in a sale. 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. and while Bill and Paulette had been using an agent to help locate houses. however.000. Bill pulled the seller aside. 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.
Conclusion The seller had always intended to leave the garbage disposal. Let me just get the standard “offer of sale” form and fill out what I hear you saying. he left the price at $150. in fact. In her complaint. she said that her supervisor had repeatedly asked her out. the hutch. and two area rugs. Bill: (pleasantly surprised to learn that the garbage disposal. I think we can work something out. and the garbage disposal. Example 2 Monica brought a sex discrimination charge against her employer. Under the section for appliances to be left on the property. look this over. The supervisor assured the employer that there was no basis for her complaint. and the two area rugs. Sign here. and that no one would ever say that he was guilty of any type of sexual harassment or sexual discrimination. then we have a deal. he listed an attached hutch in the kitchen. the refrigerator. he began to have “problems” with her job performance. and had been prepared to drop his price to $145.000. In the section for fixtures and miscellaneous items to be left on the property. since he probably would have missed them) Yes. the hutch. and the two area rugs were specifically included. When he had the chance to put the deal in writing. he listed the stove. that’s what I meant. (The seller recorded the offer of $150. It worked. the house is yours.000 and added the additional items to “sweeten the pot” and give Bill and Paulette a deal they couldn’t refuse.000. but I’d like to make sure there are no misunderstandings. all window blinds and drapes. and when she refused. The employer’s affirmative action officer looked into the charges and determined that 188 50 Practical Negotiation Tactics . The supervisor pointed out that he had a staff of 20 or so women. Seller: Okay. real. a public agency.) Seller: So. If it’s what you meant.Seller: Just a minute. and that the problems with her job performance were.
my client is supposed to formally withdraw the complaint rather than just settle it.000.000 without actually having to prove anything. then Monica had to acknowledge that the supervisor did nothing wrong. He’s happy to prove that in court. by this time.000. Monica had. The supervisor insisted that if the employer felt he had to settle.there was little basis for the complaint. She thinks the withdrawals and the secret settlement will be seen as some kind of admission on her part that she shouldn’t have brought the claim. settling—What difference does it make to her? She’s getting her $100. but it’s not standard when a complaint is formally withdrawn. you didn’t mention in the agreement that in exchange for the $100. Why’s that? Well.000. Withdrawing.000. and must agree not to tell anyone about the $100. I’m He: She: He: Reaching Agreement 189 . The employer’s lawyer told Monica’s lawyer that the employer was ready to settle the deal for the $100. but said that fighting the charges would be a long. But the employer doesn’t want to go through the expense and publicity of a trial. the supervisor says he did nothing wrong and that Monica just misinterpreted what he said. And the confidentiality clause is standard. Look. found a new job and wanted compensation for “embarrassment” and lost wages in the amount of $100. It might be standard when there’s a settlement. even though you are paying Monica because we can prove he did do something wrong. drawn-out. Monica’s lawyer (She): Employer’s lawyer (He): She: I was surprised by your settlement documents. even though we’re certain we would prevail. and expensive matter. He offered to send settlement agreement papers to her. You’re just trying to make it seem as if your supervisor did nothing wrong.
I’ll take your offer back to her and let you know. 190 50 Practical Negotiation Tactics . 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. to his disadvantage. It was made clear that the employer had paid the additional $100.000. but that’s under the same conditions—the claim must be formally withdrawn and Monica can never reveal the amount of the settlement.000. Monica accepted the $200.000 when all that was asked for was $100. It would have been a better strategy in this situation to raise the issue of withdrawing the complaint during the actual negotiations. but word did get out that a public agency paid $200.000 just to get the employee to “withdraw” the complaint.000 and the conditions of the offer.She: authorized to pay $200. There was a confidentiality agreement.
“Oh. however. and when they agree to solve problems together. when they engage in honest “give and take” negotiations. a written document is hardly necessary. it would have been easier to resume negotiations at a later date. Certainly someone has said to you. but some of the decisions were put off for a couple of months. In Tactic #17 (Package Items). even an informal agreement benefits from some type of written documentation. If the agreement reached at the time had been put into writing with all three sisters signing it. Unfortunately. When two friends agree on what movie to see. depend on the kind of negotiations in which you are involved. A Communication Hearing is not necessarily the same as listening. but it was not what I meant. One way to help the parties abide by an agreement is to put it into written form. it is much more effective in the long run when the parties enter into “win-win” agreements. “That may be what I said. A union contract.” By the same token. of course. talking is not always the same thing as communicating. I thought you said something else. then the parties have to abide by the agreement.SECTION IV: PUTTING THE AGREEMENT IN WRITING s you can see. most certainly needs to be in written form. and contract.” Clear communication is essential if you want to reach an agreement and have it abided by. reaching an agreement is sometimes a long and difficult process. operating under an agreement after it has been reached can be even more difficult. However. The degree of detail and formality of a written document will. Putting an agreement into writing serves three purposes: communication. rather than attack each other. Putting the Agreement in Writing 191 . Think of how often you have said to someone. commitment. the three sisters reached an amiable agreement. Reaching an agreement is the first step. As these examples of personal and business negotiations show.
or express a thought or emotion through words. he can be reminded of the details because it’s all there in black and white. His mom could more easily enforce the agreement if she had it in writing. Oftentimes just seeing the agreement in black and white conveys its import as well as or better than hearing about it. sounds. pictures. The receiver has to decode the message being sent by trying to understand and interpret the words. Jason agreed to change his study habits if he couldn’t pull his grades up by the end of the semester. 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. nine hundred and forty-four dollars—$22. 192 50 Practical Negotiation Tactics . If Jason fails to live up to his side of the deal. In Tactic #4 (Use Objective Criteria). or movements being used by the sender. When communication is limited to the spoken word only. the price is spelled out in the loan document as “twenty-two thousand. the opportunity for the sender and the receiver to misinterpret is greater than if the communication is first spoken and then written. And because the sender and the receiver are two unique individuals. Negotiations are often necessary because there was a “misunderstanding” that could have been avoided if the parties had put their agreement in writing. When you create a written record of the details of an agreement. sounds. Commitment Reducing an agreement to writing often forces both sides to truly commit to the agreement. that is. Who isn’t excited about buying a brand new SUV or truck? Until. 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.” In Tactic #14 (Don’t Always Hide Your Weaknesses). you have created something tangible that can be referred to in the future when memories become fuzzy. a couple of months away. the message being conveyed and received might be understood differently. The sender wishes to convey an idea. seek information.944. pictures. or movements.Communication is a process that involves a sender and a receiver.
protect yourself by having a written. WHO? Provide of the full names the parties necessary to the agreement.Contract Finally. Both parties must receive a benefit or something they personally consider of value. Failure to do so can lead to big problems. 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. You can do this more formally by taking them to court (perhaps as a last resort). Your spouse will share some responsibility for failing to make that duty clear in the agreement if. where. pulling an agreement in writing. signed. how many. what. and so on in standard contract form. ask yourself the basic questions of who. which. WHAT? The written document should clearly describe the item(s) covered by the agreement. When you are ready to commit yourself in writing. as many people learn when they purchase a home. when. In either case. and put that information into the document. Putting the Agreement in Writing 193 . in writing. your plants die because the house-sitter wasn’t told to water them. have your spouse also agree to the details of the agreement. why. the address and description of the real property. leading to misunderstandings and contract disputes. before the trip. One party wishes to buy what the other wishes to sell. Here’s what we mean. 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. say. one party will work if the other party pays for the work. and how much. details such as what fixtures stay or what appliances go can be easily overlooked. Carefully and completely describe the subject matter of the agreement. the real estate contract includes information about the buyer and seller. Generally. dating it. If you have agreed to pay someone to house-sit while your family is on vacation. or it isn’t an agreement—it’s merely the conveying of a gift. one party will change behavior in exchange for something of value from the party who wants the behavior changed. However. which kind of. and dated agreement.
194 50 Practical Negotiation Tactics . and having all parties sign it ensures that the parties have. depending upon the deal: when or where. how much or how many. The more-specific and clear these details are. It gives the parties an opportunity to really buy into the deal. dating it. Putting an agreement in writing.The remaining questions fill in the details of the agreement. agreed to the same thing. the better. in fact. if that becomes necessary). And it can create a tangible reminder of the deal (or an enforceable agreement. which one or which kind of.
and how they can be used: Exercise Forms Putting the Agreement in Writing 195 .Personal Negotiations Negotiation situation: Parties involved: Issue: Tactics that might be helpful.
Business Negotiations Negotiation situation: Parties involved: Issue: Tactics that might be helpful. and how they can be used: 196 50 Practical Negotiation Tactics .
________________ 3. ________________ 5. ________________ 4. ________________ 10. ________________ 8. ________________ 9. ________________ 2. ________________ Tactic# How will I use this tactic? (Application) _________________ _________________ _________________ _________________ _________________ _________________ _________________ _________________ _________________ _________________ ______ ______ ______ ______ ______ ______ ______ ______ ______ ______ Notes Putting the Agreement in Writing 197 .Name of Negotiation Tactic 1. ________________ 6. ________________ 7.
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The Essentials of Negotiation. University of Missouri: Columbia Press. R. Patton. Clark. David. K. LittleJohn. Calif. and B. R. Inc. Roger. Negotiation Skills.: New Harbinger Publications. Getting to Yes: Negotiating Agreement Without Giving In. Los Altos. Labor Relations and Collective Bargaining: Cases. Roger.REFERENCES Carrell. Eshelman. E. Inc. Inc. 2nd ed. Heavrin. Sharpe. 1988. The Negotiation Handbook. Fuller. Victor. J. Inc. New York: M. Fiske. Herb. 1999. Minton. Negotiating in the Real World. Gavin. M. 2001. D. Practice. Saunders. and C. 2001. Oakland. Maddux. Inc. New York: Simon and Schuster. The Relaxation and Stress Reduction Workbook. 1987. Patrick J.: Crisp Publications. George. 1996.. Mediation. Domenici. W. Cohen. Chicago: Richard D. Fisher. Inc. Pocket Negotiator. W. Gotbaum.: Waveland Press. and S. M. Ury. New Jersey: Prentice-Hall. and Law. McKay. and J. 1991. 1988. Successful Negotiation: Effective “Win-Win” Strategies and Tactics. and S. Kennedy. 7th ed. Upper Saddle River. 1991. New York: Penguin Books. 1997. Irwin. 1980. Getting Together: Building Relationships As We Negotiate. Calif. Ill. 2004. Lewicki. C. New Jersey: Prentice-Hall. Fisher. R. Prospect Heights. and J. You Can Negotiate Anything. M. and M. Inc. The Negotiator’s Handbook. Brown. 2nd ed. New York: Basil Blackwell. Cleary.E. New York: Bantam Books.. New York: Penguin Books. 1989. Upper Saddle River. References 199 .
New York: Simon and Schuster. Inc. William. Upper Saddle River. Cambridge. J. 1994. 1999. Inc. Lexington.org 200 50 Practical Negotiation Tactics . Raiffa. 1987. Bargaining for Advantage. C. Raiffa. Getting Past No: Negotiating with Difficult People. Tsogas. 2001. 1991. Sharpe. Howard. www. Cambridge. George. L. New York: Bantam Books. 1981.E. Dudley. Inc. Gerald I. 1998. Taking Charge/Managing Conflict. The Art of Negotiating. New York: Viking Press.Nierenberg. G. 1996. New York: M. Stulberg. Howard. R. B. Weeks. The Eight Essential Steps to Conflict Resolution. Massachusetts: Harvard University Press.negotiationsources. The Mind and Heart of a Negotiator. Shell. Massachusetts: PON Books. New Jersey: PrenticeHall. New York: Penguin Putnam. Massachusetts: D. Lectures on Negotiation Analysis. 1982. Heath and Company. Inc. Labor Relations in a Global Economy. Ury. The Art and Science of Negotiation. Thompson.
and the University of Louisville. Labor Law Journal. The Personnel Administrator. which is located in the greater Cincinnati area. and Public Personnel Management. Business Forum.A. Personnel. and MBA and B. Human Resource Management. he was elected to the City of Louisville Board of Aldermen for five terms. HR Magazine. Bakersfield. In addition. Most of his professional career has been spent in the Louisville area and has included positions as a personnel director and labor negotiator. The Academy of Management Review. In addition to negotiating numerous litigation settlements and contracts. Books published by Dr. Carrell has held academic positions at California State University. has practiced law for 28 years primarily in the public sector as an attorney for local government in her hometown of Louisville Kentucky. These positions enabled him to build a sizable management consulting practice while teaching at the University of Louisville. organizational behavior. He has authored over 50 scholarly works in some of the leading management and human resource journals including The Academy of Management Journal. The University of Nebraska-Omaha. and served as President of the Board and Mayor Pro-tem for three terms. The Journal of Accountancy Training.ABOUT THE AUTHORS ichael R. Dr. she has helped negotiate a number of major agreements such as a multi-million dollar property exchange that relocated major industries and railroads from the City’s downtown wharf resulting in the development of both an award winning public About the Authors 201 . Morehead State University. He received his doctorate from the University of Kentucky. Marshall University.D. M Christina Heavrin J. Carrell is Dean of the College of Business at Northern Kentucky University. Personnel Journal. and negotiations. in Economics from the University of Louisville. Organizational Behavior and Human Performance. During his academic career he has received awards for both outstanding research and teaching. Carrell are in the fields of collective bargaining and labor relations.
park and a successful industrial park in the City’s enterprise zone. an agreement between the State of Kentucky. Ms. a multi-million dollar expansion of Waterfront Park that included a major environmental clean up and the construction of a Minor League Baseball stadium in downtown Louisville. 202 50 Practical Negotiation Tactics . the City and a for-profit hospital for guaranteed indigent health care services for city residents. 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. Jefferson County. Recently voters approved the merger of the City of Louisville and Jefferson County Governments. 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.
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