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SECTION I: INTRODUCTION
Real-Life Negotiation Situations
You feel you’ve been had. Sucker-punched. Taken for a ride. Why? You’ve been talking to your next-door neighbors about their cell phone service, and you find out that they are paying roughly half the monthly rate that you are paying! To make matters worse, you learn that their phone has text-messaging, a camera, no roaming charges, AND e-mail capability! Your cell phone does not have these functions. And the final insult? They didn’t have to sign a contract— and you still have 18 months left on yours. At first you get mad, thinking the phone company made a mistake that is costing you money. After all, you pride yourself on being an informed consumer— how else could this have happened? Then you ask your neighbor how he got such a good deal. He tells you that he and his wife simply negotiated the agreement when they switched providers. Boy, do you feel frustrated and foolish. You realize how easy if would have been for you to have negotiated the same deal, if only you had tried. The fact is that most people miss many opportunities to negotiate in their professional and personal lives. Negotiating is a critical ability that many of us lack, yet anyone can become a competent negotiator. It simply requires (1) knowing when a particular situation is ripe for negotiation; (2) knowing who is able to make a decision for the other party (you often need to ask to speak with the supervisor or manager in charge); and (3) knowing how to negotiate. Read this easy-to-follow book, and learn how to negotiate by practicing a few tactics presented here. As you read, you’ll be amazed at all the everyday situations in which having the ability to negotiate effectively can enrich your life.
Practical Tactics for Work and Life
In this book, we provide the reader with 50 proven, practical, and easy-to-apply negotiation tactics. We minimize the jargon and long-winded stories so you can quickly learn how to use each tactic (usually in less than a day!). You do not need to wade through hundreds of pages to find a single useful tactic. In fact, most people find a few interesting tactics right away, and try them out immediately. Each tactic is briefly defined and used in work and life examples—no lengthy anecdotes and no wordy theoretical discussions. Each is written to stand alone; the reader does not have to read and retain many pages of discussion just to understand how to use the tactic.
50 Practical Negotiation Tactics
Tips on Getting the Most Out of This Book
Read the book through, from start to finish. It only takes about two hours. Read all 50 tactics and flag the ones you believe you can use immediately and in what situations. (Or use the Notes pages in the back). For example: • Nickel and Diming (Tactic #43) – Use with copier vendor to reduce toner cost. • Commit the Offer to Paper! (Tactic #50) – Use with kids for household chores and driving privileges. Keep it handy. This book, as the title states, is a resource book. After you have familiarized yourself with the content, keep the book on your desk or shelf next to the dictionary, encyclopedia, and other reference books. Use the tactics! Practice makes perfect. Start with the ones you flagged or recorded in the Notes section. The next time you are about to enter a negotiation situation, refer to the notes you made, and try the tactic. It won’t cost you anything to prepare ahead, and the experience of trying it out will build your confidence. Everyone can negotiate, once they know the tactics and practice them. The first time you realize that using a tactic gave you a significant gain, you will be ready to try more of them. Develop your own style. The fifty tactics presented in this book are not intended to be recipes for success in any negotiation situation. Instead, they are general methods that should be adapted to fit one’s personal style or negotiation circumstance. As you use a tactic, record the results in the back of the book so you can recall how it worked the next time a similar situation comes up. Use the exercise forms in Section IV. They will help you think about how you can use these tactics. On the form, briefly describe the situation; list the parties involved (including the people who can make a decision); describe the issue to be negotiated; and finally, list the tactics that you believe might be especially helpful. Take the Quiz! Can this book help you? Circle yes or no next to each of the ten quiz questions on page 7. Score your answers: one point for each “no” on questions 1, 6, 7, and 10 and one point for each “yes” on questions 2, 3, 4, 5, 8, and 9. Total your points. If your total score is a 9 or 10, you are already a successful
negotiator! Pass this book on to someone else who needs it. But if you scored 8 or less. Unfortunately. with neighbors. such as these: • You receive the wrong order at a restaurant. Instead. • A child wants a new toy now. Who. some will in retrospect even remember being the victim of one or two of them. This book is designed to give the reader an understanding of the negotiation process by presenting fifty proven. with family members. few people understand that normal interactions represent bargaining opportunities. accept what is given. 4 50 Practical Negotiation Tactics . • A co-worker asks for volunteers for a new project. 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. they pay the sticker price. at a flea market. exactly. practical tactics useful in real-life situations at work or at home. or engage in an unproductive argument. but many of us miss the opportunity to bargain in other situations. start reading! Most people come face-to-face with a negotiation situation of one type or another on a daily basis: on the job. Most readers will no doubt recognize some of these strategies. 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.
4. one party is only allowed to follow policy or must wait “until the manager arrives. Both sides want a settlement. Each one has the five key characteristics necessary for bargaining: 1. The parties involved are interested in reaching a common goal. A service repair person gives you an estimate on some work. “I’d like Introduction 5 .” When you recognize that something can be negotiated. What are my alternatives?” During an employee evaluation. and each side can involve one person or several people (each representing one “side” of the issue). 3. perhaps you can say to a hotel clerk. Your boss reviews your past year’s performance. A neighbor wants to remove an old tree on your property line. A teenager wants to buy his/her first car. Two or more sides are involved. Your spouse wants to buy new furniture. Multiple parties. be prepared to bargain. The parties involved can make a decision by themselves.• • • • • • • A hotel clerk tells you that your reservation was lost. Flexibility. Therefore. Decision-making ability. condition. In some situations. what can you do for me?” Or this to a restaurant manager: “This food order is wrong. “Well. The parties are interdependent: what one party does affects the other. Interdependency. In some circumstances. All of these situations are opportunities to negotiate. perhaps the employee can say. that can be negotiated. time. you must advise the other party of your intention to negotiate. There are flexible elements to the situation. or items of value. and I don’t have time to wait for another. There must be a conflict in the sense that what one wants is not what the other wants. Mutual goals. 2. some resolution must be negotiated. since you lost my reservation. 5. For example. such as price. A friend is about to select the movie he/she wants everyone else to see.
Once a settlement is reached. and use the forms in the back to identify the issues. “I see why you want to cut down the tree. Choosing and applying the appropriate tactic to a particular situation will become easier as you begin to use them.time to look over this performance review and respond point-by-point. negotiations can be concluded with a written or oral agreement. the other party will realize that you intend to negotiate and do not accept the situation. and the tactics that might move the negotiations along. 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. but I believe it adds value to our house. 6 50 Practical Negotiation Tactics . You can then use one or more of the tactics presented in this book to achieve the best possible settlement. the parties and their interests. Scenarios based on actual real-life situations are used to show how each tactic can be used in business or everyday situations.” To a neighbor you can say. How can you compensate us for our loss?” Once you’ve suggested that you see the situation as something to be negotiated. Keep this book handy when preparing for any type of negotiation. and meet with you again.
allowance. but you did not? 8. In the past. When making a major purchase. Do you often refrain from negotiating a better price or service because you believe that you do not have good negotiating skills? Introduction 7 . Yes No Self-Assessment Quiz 1. spouse. or child. have you ever felt that you were not adequately prepared to negotiate a job offer? 2. As a parent. or division of household duties. Do you wish you could negotiate a change in your job duties or salary? 7. etc. do you routinely negotiate a last add-on before you close the deal? 9. When you purchased your last home or car. have you ever required a written agreement covering chores. have you routinely resolved differences with a neighbor or a friend through a negotiated agreement? 5.How good are your negotiation skills? Place a check in the box that applies to you. Have you ever found yourself in a negotiation situation in which your best alternative was to walk away.? 10. Do you routinely negotiate for better accommodations when you check into a hotel? 3. do you believe that you negotiated the best possible deal? 4. did you request appropriate compensation? 6. In the past. The last time you received sub-par service or food in a restaurant.
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thus allowing each side to achieve one of their goals. state. On the other hand.) • primary sales territory • a starting date Exchange Issues: Those issues that might be traded. the process will probably take several weeks or months as the parties move through all the stages. the process will be fairly straightforward. The “Quick Model” approach outlined below is good for simple negotiations. one for another. They’re referred to as “win-win” because each side can achieve their goal. including those that are less obvious. 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. etc. The Negotiation Process 9 . Examples: • office location (city. decide how complicated the issue is. Then classify each one into one of three categories: Compatible (Integrative or Win-Win) Issues: Those issues for which both parties might have the same desirable outcomes. If it is a relatively informal situation. The Quick Model The easiest way to prepare for a simple negotiation is to identify all the issues. • an allocation for moving expenses (employee goal) traded for a set number of travel days per month (employer goal).SECTION II: THE NEGOTIATION PROCESS Before you begin the process of negotiation.
The most typical stages are Preparing to Negotiate Planning a Strategy Exchanging Initial Offers Making Counteroffers (the Give and Take) Applying Pressure Making Progress Reaching Agreement The tactics are organized according to the stage at which they can be used to best advantage and listed as such in the Table of Contents at the front of the book. 10 50 Practical Negotiation Tactics .Distributive (Win-Lose) Issues: Those issues that the parties are directly at odds with. rearranged. Examples: • an item sold by one party and bought by the other • wage increases won by one side. but feel free to try them when they seem most appropriate to your specific circumstance. What one side gains. or even skipped altogether. The Comprehensive Model Negotiation is more of an art than a science. the other side loses. stages can be combined. Depending on the situation and the parties involved.
The Negotiation Process Table 1: The Negotiation Process: Seven Basic Stages Stage 1 Identify situation as one for negotiation Preparation: Key Factors – Time. Information. Power #1– #6 Stage 2 Strategy: Choose Overall Approach to the Process #7– #14 Stage 3 Initial Offer: Getting Started Stage 4 Counter Offer: The "Give & Take" Stage 5 Pressure Bargaining: Striving for Conclusion Stage 6 Key Methods: Achieving Progress Stage 7 Reaching Agreement: Settlement of Impasse Tactics to Consider #15– #21 #22– #31 Negotiation Phase #32– #38 #39– #46 #47– #50 Initiation Phase Resolution Phase 11 .
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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.
With only two weeks remaining before a threatened strike. In this case. When negotiations with the union became hopeless. 16 50 Practical Negotiation Tactics .Conclusion Harvey’s best alternative—his BATNA—was simply to hold on to the car for the moment. The union negotiators convinced the employees that this too. The Jaggers gave the union their “last. his BATNA was not to hold out for more money. Example 2 Shari and Jim Jaggers own a successful West Coast pottery company. and it now employs 230 craftsmen.” which was refused. The union negotiators thought the Jaggers were bluffing. the Jaggers decided to seek buyers for their land. The owners. and final offer. but rather what the buyer planned to do with the car. Conclusion Selling their business was the Jaggers’ BATNA. as a last resort. For the past two months. and either move it with him to Arizona or find another classic car collector who might buy it (perhaps for less) and preserve it. as Harvey had for many years. 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. The union is demanding wage and benefit increases. and the Jaggers decided once and for all to sell their business assets and invest the proceeds conservatively. 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. selling became an attractive alternative to a strike or prolonged battle. The $56 million dollar business took them 30 years to grow. and equipment. The threatened strike became a reality. best. was a power play. notified all the employees of their intentions. labor contract negotiations between the Jaggers and a local labor union representing the pottery’s craftsmen have stalled. providing them with a very good income for life. inventory. They learned that their assets would be easy to sell and were worth more than originally estimated.
How much are you thinking it’s worth? John: Well. for example. she might have to take a lower offer just to be able to move. What changed your mind about getting rid of it? It is still in perfect condition. I think so. Make me an offer. Are you finally ready to sell it? Yes.000. I’ve been thinking of getting rid of it for a while. Gosh. Tom: $20. John: Tom: John: Tom: Tom. so Tom was surprised when John called him out of the blue one day with a proposal. I guess I couldn’t take less than $20. you still interested in my rifle? Of course. A person who has to sell her home because her company is relocating her. John assured Tom that this would never happen. Just running out of space.000? That’s more than I planned. and told John several times to let him know if he ever wanted to get rid of it. what the other party’s desired outcome is. you know.Tactic 2: Know Your Opponent’s Real Objective Each party in a negotiation will know. 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. If you are the party making the offer on the house. I’ll have to think about that. sure. Just as important is the why. This is a good thing to know. Example 1 Tom had always admired John’s 1861 Confederate rifle. it’s still perfect. it’s to your advantage to know what is behind a seller’s decision to put it on the market. at some point. Preparation 17 . right? John: Sure. because if the company does not provide relocation benefits. 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. It is extremely rare—one of only 100 made with that bore and handle.
we 18 50 Practical Negotiation Tactics . and now the two-year requirement has become a stumbling block in the negotiations.500—we’d have a deal. Tom now felt comfortable negotiating the price. However. but thought this might explain John’s sudden interest in selling the rifle. Example 2 Rick. No longer worried about John’s motives.) Tom: John. John: Well. I’ve been thinking about your offer. (Tom investigated the “market” for a restored 1861 Confederate rifle by calling a few other collectors. let me think about it and I’ll get back to you. if you could come up a little—say $18. let’s do it. 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. Was Tom interested? Tom declined. I don’t think I can go higher than $18. When Tom found out why John decided to sell his rifle. Well. He doesn’t want BigManu to know this because he thinks it will hurt his negotiating position. fearing that this will put all of his employees out of work. Tom: Okay. Without some trust. the owner of a small manufacturing company. Rick needs to remain president of the company for the next two years.500 had an 1861 for sale. but then he will be happy to retire. but I could get the money to you right away. He is two years away from retiring and does not want his business to fail before he does. One of them mentioned that someone who is negotiating with him to buy a restored Winchester rifle for $18. we really want to buy your company.000. The sale price for the company has not yet been agreed to. it made the negotiations easier. Conclusion Tom entered into the negotiations suspicious of John’s motives. parties to a negotiation are not likely to reach agreement. BigManu: Rick. has begun negotiations to sell his firm to BigManu Company. and we’re committed to keeping it open as a major division of our company.
they will make you plenty of money and more than make up for any “operational” difficulties it might cause you. BigManu: You know we want you to stay on and manage this division for us. (Between negotiating sessions. Working as a division of your company. What is it you’re afraid is going to happen? Rick: I am convinced that with a two-year time frame. 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. and he accepted it subject to agreement on the two-year employment guarantee clause. Preparation 19 . I just can’t go through with this sale. Rick: I built this business from the ground up. Without this commitment. The price they gave Rick was actually more than he had expected. they decided to put their price on the table and revisit the issue after a price was agreed upon.cannot guarantee to you that ALL of your employees will be retained for two years. my employees will prove to you that they are uniquely able to run this place. Let’s talk later. and we think it’s an odd request anyway. I just don’t want it to change after I’m gone. I just want them to have a real chance to show you how good they are. We just can’t make good operational decisions with our hands tied. you will have a say in how the employees are treated. and I hired every one of these people. In hopes of pushing the deal forward. We still can’t find a way to do it.) BigManu: Okay. I need to give them some sense of comfort if this deal goes through. Within the parameters of efficiency and effectiveness. You’ll be in place to participate in our employment decisions. Rick: These people are the best at what they do. BigManu’s negotiating team concluded that they were in the dark as to why this two-year requirement was so important to Rick.
would it? Rick: Well. Conclusion By masking his real objective (giving himself two more years as president before retiring). I certainly want to do all I can until then to protect my people. you’ll have a guaranteed “in” to protect your people. Let me get back to you. Rich almost lost the deal. This wouldn’t have anything to do with your own plans for the future. but we won’t be completely tied to operations as they are now. that might work. I’m hoping to retire in two years. Once Rick realized that he no longer risked anything at the negotiating table by making his need known. to tell you the truth. Surely you’ll be able to “protect” your people if they are as good as you say.BigManu: We intend for you to stay and become a big part of our company. he agreed to allow BigManu to accommodate him without limiting their ability to make business decisions. Rick: Well. 20 50 Practical Negotiation Tactics . BigManu: Why don’t we guarantee to you that you will stay for two years? That way.
they control the breaks and environmental factors. Mother: Hush. I like the frog. Bailey: Cybil: Preparation 21 .) Let’s take all our Beanie Babies to my house to trade! Okay. but never to THEIR advantage! Example 1 (Two ten-year-old girls are talking. too. 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.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. Make up your minds. the frog is everybody’s favorite. it’s a deal. (Think of the showroom tactics used by car dealers. and go play somewhere! Cybil: Well … Okay. Cybil. girls. and so on. such as a hotel conference room. (thirty minutes later) Bailey: So. they have the information they need at their fingertips. how can you trade the frog—he’s your best one! Dede: (Bailey’s other sister) Yeah. 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.) Prepare for the negotiations by controlling the setting—to your advantage or to mutual advantage.
knew that her sisters liked the frog best and that they would help convince Cybil of its “value” and help Bailey make the trade. non-stop negotiations wore down the members of Team A. 22 50 Practical Negotiation Tactics . and other conveniences in the adjoining room. About thirty-six hours later. until we have a settlement. They had all been replaced after their decision to negotiate “around the clock” in Team B’s boardroom became known. After forty hours of negotiating. as long as they met in the boardroom of Team B. Example 2 Two five-person negotiating teams had been trying to work out a deal for over a month. Team B. Team A agreed to change the meeting place. while members of Team B were able to stay fresh. The chief negotiator for Team A publicly challenged Team B to “negotiate non-stop. That’s why she wanted to go to her house. Both sides desperately needed to settle a property dispute. The firm deadline was only four days away. meals. not one member of Team A was chosen to return to the table. having set up beds. The physical and emotional demands of 24-hour. was still going strong. Team A was whipped physically and emotionally. Conclusion Team A did not realize the practical advantage they gave Team B when they agreed to negotiate in B’s boardroom.Conclusion Bailey. although only ten years old. When negotiations resumed in two months over another piece of property. Team A agreed to a settlement almost identical to the one rejected days before. in their own familiar setting.” The chief negotiator for Team B agreed. They were blamed for accepting the same deal that had been rejected only days earlier. around the clock. Team B had clearly used its home turf to gain a substantial advantage.
Larry: Well. Larry had expected to pay him for his time. but was shocked at the amount of the bill. these plumbers certainly acted like they understood the work when they gave me their estimates! Will: Tell you what. I gave you my “family” rate. based on objective criteria (think property appraisals in real estate). I did get some estimates from plumbers. Will: Larry.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. when Will presented Larry with his bill. about your bill. and he and Larry have always gotten along.” This can hold up an agreement and cost you in the end. Prepare for the negotiations by having an outside authority measure or weigh in on each side’s position. This uncomfortable negotiation followed: Larry: Will. it became clear that all of those pipes had to be pulled and new ones put in. Believe me. and they were much lower than this. It was twice as high as the estimates Larry received from other plumbers before they started the project. Larry: But Will. and show them the actual work that got done. Things turned sour. you are likely to resent them for it and hold out. Larry: Just make sure you’re comparing apples to apples. though. Example 1 When Larry’s cousin offered to help Larry finish the renovation on his bathroom. Larry was thrilled. When you first told me about your project. rather than give them the “advantage. After all. I was kind of surprised at how high it was. When we got into it. I anticipated much less work. If you think that the other party knows more than you do. Will is a licensed plumber. I would have charged anyone else much more. Let’s get the guys back in who gave you estimates. If they tell us that they either Preparation 23 .
Budget Officer: I don’t know what your problem is. Settling on the right objective criteria upon which to base a negotiation requires that both parties think through their options. 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. The estimates would have been higher than what cousin Will charged. he used his financial expertise to analyze the investments of the college’s endowment fund. I’ll revise my bill to meet the lowest estimate you get. I find your suggestion to the Board that I haven’t been doing my job right to be very insulting! Stuart: I’m sorry. The college’s budget officer was understandably offended. Conclusion When the other plumbers looked at the work. they would have had to revise the figures. I have been very diligent about making sure that the fund makes the most money it can without putting us at risk. Larry: That sounds fair. Comparing the estimates to Will’s actual costs would have been counterproductive. 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. while she wasn’t an expert.disagree on the need for that work or that they would have done it for less. they said. she had been investing the college’s endowment funds for many years. He was disappointed in the performance of the fund. I certainly didn’t mean to offend you. they had to agree that their early estimates were low. and decided to bring the matter up at a Board meeting. and no one had ever questioned her performance. From a look at the portfolio. Had they actually prepared bids on the work. my first reaction was that some of the investments 24 50 Practical Negotiation Tactics .
and the budget officer was comfortable that the risk and expense of such a strategy was small and worth the effort. In this situation. there might be increased risk and some expenses for commissions. As you know. 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. Now. but we can ask them to plan and cost out each move. how can we identify the right parties? Conclusion The two-month experiment did produce the results Stuart had anticipated. but I think they more than offset the gains. because she did not have the background in investments necessary to trust such advice. and its resources are limited.were stale. considering commissions and all. if both of them demonstrate a similar strategy and produce better results after expenses. the college is a private institution. We just can’t make up losses to the endowment fund without considerable impact on our annual budget. but such a strategy also increases risk and costs more money to administer. Budget Officer: Yes. then you and I can talk about changing our investment strategy. 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. At the end of two months. Okay? Budget Officer: Okay. Preparation 25 . I don’t want you directing how they’re going to go. I don’t question that they were sound at one time. Stuart: Yes. Stuart: No problem. but some of these stocks have really lost their value. I find that a more aggressive investment strategy produces a better return. I have a suggestion.
if I give you an increase. You can’t treat me the same! Mother: Well—so we’re talking about several issues.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. and ask the other party to add to the list. not on what you want to spend. 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. Example 1 Shari. and (4) different treatment from your sisters! 26 50 Practical Negotiation Tactics . Shari: Well. has asked her mother for a $10/week increase in her allowance. Once you both agree on the list of things to be negotiated. cut the grass. your little sisters will want equal treatment. not just an allowance increase! There is: (1) a $10 increase. Mother: That’s a large increase—and we just raised it last year! Shari: Well. Mother: But your allowance is based on what you earn in your weekly chores. and for going out with my friends. I need more money for clothes and CDs. (3) more chores. It will cost me more than $10—about $35 per week. you should each put together a “package” of several items on the list and work out a win–win agreement for these things. wash the cars. (2) a later curfew. Shari: I’m four years older than the next-oldest. a sixteen-year-old who lives with her parents and three younger sisters. baby-sit your sisters. what else can I do. besides washing the dishes every night and cleaning my room? Mother: You could cook dinners.
Example 2 The union and management negotiating teams opened discussions with a list of 48 demands. Then a “win-win” solution could be determined. and item #23 (the wellness program voucher). but unlike your sisters. opens by proposing the list of items. in the first session. I’ll pay you $10 to babysit every Wednesday night. Shari: (pause) I like it! Conclusion Shari’s mother helped negotiations along by listing all of the items being discussed. Management agrees. The trading of items (where initial demands are discussed and agreed upon) begins. An allowance increase.Shari: Right! Mother: So … I suggest no allowance increase. since all of their items were included as requested. item #11 (the clothing allowance). And if you clean the whole house on Saturday. Union: We will agree to your proposal on item #6 (the number of paid holidays) and item #14 (the new overtime hourly rate). Now it is time for each side to list their desired outcome for each item. while the mother won a Saturday house-cleaning and a night out each week. you get to stay out an hour later that night. Management: (after calculating the total value of the five items during a break period) We agree to your package of five items. Shari got the $10 she wanted and a later curfew. The union’s chief negotiator. if you agree to our proposals on item #3 (the paid vacation schedule). Now we have a package deal to propose … Preparation 27 . while your Dad and I go out. which the other children would have requested as well. was avoided.
the two sides will at this point sign and date the list of proposed items.Conclusion In most labor negotiations. Then negotiations can resume on the remaining 43 items. thus removing them from the discussion table. other trade-offs are proposed and agreed to until only a few items remain. 28 50 Practical Negotiation Tactics .
) Preparation 29 . Hi! What can I do for you? I’ve admired your ‘63 Impala for years. say. and do your homework.Tactic 6: Timing Is Everything The exact month. That’s a generous offer. Prepare carefully. I love this car—restored it myself. and general circumstances under which negotiations take place can substantially impact the outcome. Not even for.000? No. Bob made it a point about once a month to go out of his way and drive by the man’s house. he saw an elderly man get in his dream car and drive away. Bob followed the man home. he noticed a FOR SALE sign in the yard. $12. As the man got out of his car. just out of curiosity. on Briarwood Road. but money doesn’t mean anything to me at this point in my life … Well. It was nice meeting you. The external pressures put on the parties involved (which might not be related to the issues under negotiation) can sometimes be used to advantage if you know about them. One day. He stopped and knocked on the door. day. which turned out to be only a few blocks from his own house. (For the next three years. thanks. as he left the supermarket. Would you possibly be interested in selling it? No. my name is Bob Hillard. One day. Timing is everything! Example 1 Bob Hillard had been coveting a turquoise 1963 Chevrolet Impala Supersport convertible for several years. time of day. I live a few blocks from here. the following conversation occurred: Bob: Car owner: Bob: Car owner: Bob: Car owner: Bob: Hello.
if a seventh vote could not be found by the pro-agreement side. for tax reasons. The partner organization. the proposal would die at midnight. and I promise to take good care of it. I’m moving to California to live with my daughter. I can’t take it with me. to seal the agreement at the courthouse? Sure. so I guess I will be selling it. and wondered if your ‘63 Impala might also be for sale … (obviously not remembering Bob) Well. 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. resulted in another 6-6 30 50 Practical Negotiation Tactics .Bob: Car owner: Bob: Car owner: Bob: Car owner: Bob: Car owner: Hello! I noticed your FOR SALE sign.000. Can I see it? Sure. (after a careful inspection) It’s a very nice car! I’ll give you $12. 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.m. Then it’s a deal? Yes. Example 2 It was Sunday.m. beyond which the project would have to be abandoned. Conclusion While Bob did not achieve his goal during his first negotiation effort. Can you come back on Monday at 10:00 a. as a matter of fact. I’ll see you on Monday. Well. A third vote at 3:00 p. that’s a fair price. and the vote was a 6-6 tie each time. A majority was needed to pass the partnership agreement. had issued a deadline of December 31st. December 31st. Follow me.
Preparation 31 .m. Then.. A member of the pro-project group quickly called for a vote after the leader gave a signal. and it worked. as predicted.. When the meeting resumed at 4:00 p. For weeks. Conclusion The leader of the pro-project group recognized that they might have a unique timing advantage. a member of the anti-project group left the room. timing was everything. That effort failed.m.. the leader of the pro-partnership side heard someone say that the meeting needed to end by 5:30 p. He planned for it accordingly. during an hour break in the meeting. the pro-project leader told his members to filibuster until he gave a signal and called for another vote. the project had been stalled by 6–6 votes.m.. The measure passed 6–5 at 5:45 p. Both sides caucused: The leaders on each side met to negotiate a compromise. At 5:30 p. and the meeting was adjourned. 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.deadlock.m. in the end.
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or one-time-only. cooperative manner. 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. but in practice it will likely influence the whole process. Tactic #33 (Bluff). such as a third-party negotiator. For example. as well as their bargaining history and financial and political positions. for example. a third party can serve as a mediator (a legislative body. After you have evaluated these factors. Some of the tactics listed in this book are only suitable for single-session negotiations. and Tactic #48 (Walk Away). then Tactic #13: Set a Deadline or Tactic #11: Have an Expert Witness might be helpful. A neutral. you must first evaluate your needs and those of your opponent. A favorite strategy of some successful negotiators is to start with an extremely low or high offer (Tactic #7: Decide How “High” is High) in the hope that the other T Planning a Strategy 33 . such as Tactic #19 (Make a First and Best Offer). Third parties sometimes have their own hidden agendas. as it can substantially alter the negotiations between two primary parties. decide whether the negotiations should be continuous. if you want to begin in a friendly. The overall strategy chosen does not limit the use of other tactics. Tactic #43 (Nickel and Diming). might step in and help settle negotiations between a union and administration negotiators. 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. Are there any outside people who might influence the process. Identify all outside influences and hidden agendas before you develop your strategy. Look at the personalities of each negotiator and see which side will be more vulnerable to pressure bargaining (Stage 5). In some cases.Stage 2: Planning a Strategy he next stage is critical: Choosing a strategy. uncaring approach (Tactic #9: Control Your Emotions. Before you can do this. If you prefer to take a firm and direct approach. such as a buyer and a seller or a city and its union. and Tactic #10: Make a Reciprocal Buy-Sell Offer) are also useful alternative strategies. Be sure you are aware of this at the beginning. Tactic #12: Find Common Interests can be helpful.
The agent explained that the seller was desperate. The desperate owner agreed. The buyer said he wasn’t interested. I offer half the asking price. the seller’s agent called the buyer about the property. Another strategy often employed by parents with their children (and investigators with suspects) can be easily used when one side has two negotiators (see Tactic #8: Use the Good Guy/Bad Guy Routine). two people on the team will be more successful because they evoke different emotions from the other side.” The agent took the offer to the seller. 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 buyer loved the location. 34 50 Practical Negotiation Tactics .side is either caught off-guard or (in some rare cases) a negotiator will be able to achieve an unexpected fantastic settlement. By assuming opposing roles. let’s say a homebuyer new to an area is shown a house that was owned by someone who had been transferred to another country. 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). half-serious. Weeks later. If there is a significant weakness in your position. with “All right. but the inside was a complete turnoff. His teenage sons had “trashed” the house. For example.
Be realistic. and then look at the demand from your opponent’s perspective. as well. one buyer shows some interest. and just refuses to reduce it. so do not underestimate what you might be able to achieve. After all. She has had it on and off the market for the last five years. but certainly not exceptional in any way. First. The market hasn’t gone up that much in six years. Example 1 Carol has been unhappy with the house she and her husband bought six years ago. However. so think this through well ahead of time.000. Surely there’s some flexibility in your asking price. Your demand should be high enough to give you room to compromise. her real estate agent told her that they were probably not going to get a buyer because she is asking too much.Tactic 7: Decide How “High” Is High Your first demand in the negotiation process is the most important decision you will make. We also think that the neighborhood has improved over the last few years. we’ve put a considerable amount of money into a new air-conditioning system and in redecorating. but the house has increased in value. six years ago you bought it for $60. but we simply can’t take less than $160. Each time.000. Planning a Strategy 35 . it is likely that your opponent will. but the redecorating is of little value. your request must not be so low that the other party concludes that you are not negotiating in good faith. Anyone buying the house would want to change wall colors or add new carpets. Carol: We really want to sell. but quite frankly. Buyer: We really like the house. but not so high as to end the negotiations before they begin. If you consider the demand ridiculous. Carol wants $160. Buyer: The air conditioning might have increased the value of the house. You are not likely to get more than you request. with no success.000. we think $160. It’s a good neighborhood.000 is very high. Finally. Carol: Maybe not. And I don’t see a lot of difference in the neighborhood.
the transaction also included some degree of consolidation of the law firms involved—not just the use of the firm’s name. 36 50 Practical Negotiation Tactics . When Carol refused to budge. The other law firm was prepared to pay $100.000 immediately. Example 2 The law firm of Bits & Bites was a Sioux City institution.000 offer by coming down in price at least a little.000? Carol: We really can’t take less than $160.000. We’re curious. the founders of the firm. and then $10. Carol drove off a potential buyer by setting an asking price that was just too high. we are certainly interested in your request to “buy” our firm name to use in your city. as to how you think the name is going to benefit you. Buyer: Good luck!! Conclusion The buyer expected Carol to counter the $100. A new law partnership from a nearby city contacted Bits & Bites and offered to “buy” the rights to the name to use in their law office in their city. Inquiries to other law firms were not very helpful because in almost all of the instances. enjoying a statewide reputation for quality representation. were still alive. the buyer took it as a signal that either Carol didn’t want to sell. 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. though.Buyer: What if we offered you $100. but they have no idea what the value of their firm’s name might be in this nearby city. Here’s how the initial negotiations went: Partners: Well. The partners are interested in selling the name. or she has unreal expectations. In any event.000 or 1% of profits (whichever is less) over the next ten years in order to use the name. Neither Edward Bits nor Edmund Bites.
(concerned about loosing the opportunity) Wait. If at any time we feel that you have “harmed” our name. then.New law firm: We are establishing a partnership of ten lawyers—the top two moneymaking attorneys in each of five local firms. And we. Partners: New law firm: Partners: New law firm: Partners: New law firm: Partners: New law firm: Planning a Strategy 37 . We should assume. I guess this is just not something we’ll be able to pursue. one of these two attorneys carries the surname of the firm they are leaving. starting with the ten partners you describe. I’m kind of embarrassed now. and then 10% of your profits each year for as long as you use the name. we do. but we get to keep all of the money we’ve received up to that point. we want $500. Well. you have a very solid reputation there. Let’s just pretend this didn’t happen. because we were not even close to that number. We weren’t really thinking about that amount of money. Thanks so much for meeting with me. expect to pay for that. What number were you thinking about? Well. I really don’t feel comfortable doing that now. We probably won’t be insulted. Yes. that’s just our initial figure. because you are in the state capital and your firm has handled a lot of high-profile political cases. In every instance. Give us some range.000 initially. we reserve the right to withdraw our permission. To offer it now would be an insult. that is a very high number. of course. it would be impossible to create a new name out of the names of our key partners. And even though you don’t have an office in our city. So. Using the Bits & Bites name can only enhance our profitability. that you anticipate to build a very profitable law firm. (surprised) Well.
since they had initiated the contact. It immediately dropped the idea. Both parties were probably at a disadvantage.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. 38 50 Practical Negotiation Tactics . because there was no “objective” criteria available to help them set a reasonable price. rather than negotiate. The price they were willing to pay would have indicated what the naming rights were worth. Either side could have asked for too much. Bits and Bites should have let the prospective firm make the first offer. In this situation.
Andy: I want them… Paula: Go ahead and take them. Peggy: Planning a Strategy 39 . Peggy: I’m hearing one thing from Paula and another from Andy. you’re really moving! I hate to see you leave. (bad guy) and implies that his or her side will hold firm on their demands. angry. I heard that you want to sell your riding mower. I’ll go home and you can call me if you two can reach an agreement. since they are sitting out in the driveway with it. 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. I want to keep those. etc. Peggy: I assumed they went with the mower. we won’t need it at the new condo. Peggy: That’s fair. Half what it cost us new. only three years ago.200! We should get $1. Peggy. Andy: No. Andy: No. while another acts difficult. Peggy: So. One member of your team acts friendly to people on the other side (the good guy) in order to gain their trust and support. They cost about $300. I don’t know what the deal is now. what’s your price? Andy: $1. Example 1 So. Andy and Paula. not for $1.200.400 if the catcher and can are included. threatening. Paula: Go ahead and ride it home. and I know how you take care of things. I can use them.Tactic 8: The Good Guy/Bad Guy Routine The “good guy/bad guy” routine is a useful one. And take the leaf-catcher attachment and the gas can. so I’ll take it.
the quality of the technicians’ work. You are located outside our primary service area. causing our reps to spend hours on the road.200 will be about right… Sandy: I can’t begin to pay that! Liz: Calm down. firm offer if they decided to continue negotiations. And cut the training hours from 55 to 20. She realized that it put her in an impossible negotiating position. your account has taken too much time. 40 50 Practical Negotiation Tactics .000 in service calls last year alone because your damn people don’t take care of the equipment. Example 2 Sandy (business owner): Miguel and Liz (representatives of a computer firm). we’re here to negotiate a new service agreement. Miguel: Well. Sandy. And we want to change the 24-hour service response time to 48 hours. We estimated that it has cost us more than $50.Conclusion Peggy thought she was getting the old “good guy/bad guy” routine. your rate of $3. She very wisely recognized the routine and forced Andy and Paula to give her a clear. Sandy. And we need to add a clause that holds your company responsible for machine damages. Miguel: But not at this ridiculous rate. Let’s talk.000 per month is one of the highest in town. we’ve been fairly happy with your responsiveness. Sandy: What? First of all. Liz: But we still want to renew your contract. Miguel: I’ve figured $4. perhaps even unintentionally. For the past three years. and your training programs.
Miguel: Sandy: Liz: Sandy: Liz: Miguel: Liz: No. Liz. I’ll stop back about 2:00 p. Sandy. What can I do? Let’s try to negotiate something reasonable before Miguel gets back. Planning a Strategy 41 . Sandy. Conclusion Miguel and Liz used the good guy/bad guy tactic in the classic form: Miguel scared and threatened their opponent. If not. I’m afraid our relationship is over. you two? Good news. Then he left so Liz could convince Sandy that they needed to quietly reach an agreement she could “sell” to Miguel later. Miguel! We’ve worked out a deal I think you can live with. Sandy believed that she was able to avoid a terrible deal and negotiate a fairly good one. and it’s not efficient enough anymore for us to handle smaller firms—especially those outside our region.m. I’ll explain on the way back to the office. I hope you can meet my terms. Any luck. these terms will put me out of business—I’m a small 20-person operation. I’m going on to lunch. Sandy. even though it was far above the previous contract. with a position he knew was unreasonable. I want to keep you as a customer. but Miguel’s right. Our customer base has grown. (Three hours later) I’m back.
such as deals on computer packages and phone services. but I recently was sold a $. He had. 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. It seems that the rate you are charging me on my home phone is $1. Here’s how the phone conversation went: Customer representative: Mike: Over-the-Air Long Distance. He decided that the best approach was to act indignant when he spoke to the company representative. I have a problem with my recent bill and my billing rate. and might even harden your opponent into an unfavorable position (for you or for both of you). when he discovered that the long-distance company serving his home phone was charging him four times the rate currently being marketed by that company. 42 50 Practical Negotiation Tactics .00 a minute. How may I help you? Hello.Tactic 9: Control Your Emotions Stay cool. 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.10 a minute rate at my office location. because we have had a sick relative out of town and we used long distance a lot this past month. made some very good purchase decisions for his small business. So. 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. The fault was partly his because he did not stay on top of changes. in fact. Control your emotions and use them to your advantage! Example 1 Mike prided himself on being an informed and educated consumer. he was very unhappy.
to begin now. But I am able to offer you a $. I see that the rate you are being charged is the rate we offer for the type of service you have with us. The company might have had any number of different introductory rates and incentives for people to buy our service over the course of eight years. I realize that that might be the rate I started paying when I first took your service over eight years ago. how would anyone who might only have residential service even know to ask? Well. we certainly would have discussed your options. and I also realize that if I had examined my bill closely. Had you brought this to our attention before. I would have known I was paying too much. Mike: Customer representative: Mike: Customer representative: Planning a Strategy 43 . Customer representative: Let me pull up your account. 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. But as a very good customer of yours. It hasn’t been increased at any time. of course it is not always possible to give existing customers some of the “offers” we have out. (beginning to sound irritated.I expected the bill to be higher than usual. I would think you would have given me the best rate you offer new customers. but this was quite a shock. Mike.10 per minute rate on your long-distance service. Well.
after all. But I’m looking at a $500 longdistance bill. (with a much angrier tone) Madam. 44 50 Practical Negotiation Tactics . 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 $. however. Wait—I’ll get my supervisor. which should rightly be $50. I would hope that you would credit my account for this better rate for past service. controlled voice) I need to talk to someone who can do it immediately. but I am very angry with Over-the-Air Company. she kept Mike as a residential customer as well as a business customer. either. and I want to speak to someone in authority so I can terminate my service. and I should be treated with more respect! I’m sorry. He was walking a thin line. but I can’t do that.10 per minute. In doing so. I … (interrupting and in a stern. Is your supervisor there? I’m certain that he cannot adjust your account retroactively. The latter would not have produced the desired results.Mike: I would imagine so. Mike’s willingness to show a measured “flare of temper” brought results. If you can’t get me someone to talk to. I am. between controlled. strategic anger and abusive behavior. don’t think this is directed at you personally. a long-time customer of your company. The best we can do is fix the rate for the future. We certainly don’t want to lose you as a customer.
The most-senior employees want to have the right to refuse overtime and have those less-senior employees take the overtime. Owner: I’m just not willing to let my best people refuse to work the extra shifts during our busy season. and it’s getting old. 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. I’ve got to have the employees with the most experience to protect this place. and that they should be asking for a fairer base wage for the work they do for you. The employees’ negotiator finally decided to use “indignation” to break the stalemate. On those overtime shifts. Where are your managers? Where is the training necessary to make Planning a Strategy 45 . that’s just not fair. and you just can’t be too careful. The owner was afraid that if the mostsenior employees routinely passed up the overtime and the overtime pay. Owner: Now. They will be putting the plant AND their fellow workers at risk by not being here. Employees’ negotiator: (with a stern voice) You have been saying this for three weeks. Working with fireworks is working with explosives. The owner told the employees that he was worried that during the overtime shifts.Example 2 The contract negotiations between the employees of a fireworks plant and its owner had been stalled for about three weeks over the issue of mandatory overtime. lesssenior employees might be at greater risk of injury because they have to handle explosives. Negotiator: (now beginning to get irate) You talk about the risk to your plant if the less-experienced workers are there on overtime shifts without the senior employees. and it’s not what we’re even talking about. they would become dissatisfied with their pay and want their base pay increased.
Either they are properly protected. or they’re not. Until you’re ready to talk about that. That’s all. most of them continued to take all the overtime they could get. But the fireworks business is a business that involves risk.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. The negotiator was also running a risk with his flare of temper. In practice. he became more reasonable. 46 50 Practical Negotiation Tactics . Had the owner let him leave. All I’m saying is that the most-senior employees have to be on the overtime shifts. You are not addressing the real issue for you: money. Then you can’t have it both ways. not at all. But we protect our people. the negotiator would have had to find a way back into the negotiations without losing ground. either the employees are properly trained. The end result was that the most-senior employees did win the right to refuse overtime. but not all? Conclusion The owner was on shaky ground with this one. The safety of the plant demands it! (standing up to leave) This is just ridiculous. though. now. don’t be so hasty. After the employees’ negotiator threatened to walk out. No one who takes a job with us can be unaware of that. (He begins to walk out. sit down. What if we were to agree that the senior employees could refuse half of the overtime offered to them. Sit down. I’m not coming back. or they’re not.) Now.
I’ll give you 48 hours to decide the price. (two days later) Mary Anne: Well. with the highest bidder paying the amount to the other side in compensation for their loss. called the “Reciprocal Buy-Sell Offer. Both sisters covet it. Planning a Strategy 47 . you will decide if you want to buy it for that price or receive that amount from Mary Anne (but lose the grinder). All the rest of the estate has been divided among the family. so you set a price at which you agree to buy or sell the coffee grinder. with winner taking all.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. you’re the oldest. 3) They can agree to sell the object to a third party. or sell it to the first party and consequently receive the full amount from the first party—thus giving up the object. and split the proceeds. Mike: Mary Anne.” is the recommendation of Howard Raiffa. Susan. The first party decides on a price for which he or she will either buy or sell the object to the second party. I’m willing to pay or let it go for $800. The second party then decides to either buy it at that price and pay the first party. Then Susan. a well-known negotiations professor from Harvard University. since this one is in perfect shape and it was Mother’s. Mike. However. 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 executor of the estate. my kids and I looked on eBay and everywhere else and found out that coffee grinders in perfect condition sell for about $500. 2) They can flip a coin. A fourth option. has decided to use the “reciprocal buy/sell offer” process to settle this last piece of the estate.
(sixty days later) 48 50 Practical Negotiation Tactics . but each partner had grown to dislike the other and wanted to end the partnership (but continue to own the business without a partner). the lower bidder must agree to sell his half-interest to the higher bidder at a price that evenly splits the difference between the two bids. You will both agree. Both came to Raiffa to help negotiate a settlement. I’ll pick it up tonight. Both sisters felt that the process enabled them to resolve the issue fairly. I choose to buy it. Here is my check for $800. Conclusion The “reciprocal buy-sell offer” process caused both Mary Anne and Susan to research the market value of the coffee grinder. Agreed? Abe and Bobby: Sounds good! Let’s draft and sign a written agreement detailing the process. Thanks for making this last step as easy as possible. which will bind us to the outcome. Two business partners had been working together for ten years to build a successful business. in writing. They thus were able to determine the highest price each was willing to pay for it or receive for it. After I open the bids. to submit a sealed offer to buy/sell the business sixty days from today. and then decide how much more “emotional value” it held.Susan: Mike: Well. Lectures on Negotiation Analysis. I suggest a slight modification to the process. They accepted his suggestion to use the “reciprocal buy-sell strategy.” Howard: Since in this case you are talking about a multi-million-dollar business. Example 2 Howard Raiffa described a consulting situation in which he used the “reciprocal buy-sell offer” process in his book.
Planning a Strategy 49 . Conclusion Both parties wanted to keep the business. 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. The partner who was out-bid in a fair process received a fair settlement: $10 million above what he was willing to pay. you agree to sell your half-interest to Bobby for $180 million. Bobby. Abe. And I will arrange financing to pay you $180 million to become sole owner. and we close by July 1st. Bobby was willing to pay more than Abe to remain sole owner. and both men had carefully estimated the market value of half the business. your bid is $190 million. and to close within ninety days. your bid is $170 million.Howard: Abe: Bobby: Abe. Agreed. but only if they could become the sole owner.
she glanced at it and immediately deferred to his opinion. the one that was the most expensive was superior. and created a spreadsheet to compare the five best-rated couches on their list. the one he wanted (one of the least-expensive) was superior. Conclusion The husband became the “expert” in this situation by doing the homework. Based on seating capacity. 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. Example 1 A young couple were discussing a possible purchase of new furniture for their living room. and the husband felt like he saved them hundreds of dollars. so when the husband wants them to make an 50 50 Practical Negotiation Tactics . The husband found the dimensions of the couches in the brochures and Web sites. He thus ended up having greater negotiating power. Looking at these statistics. This strategy worked.” but there were substantial differences in price—differences that the wife did not see as a problem.” and then argue for the frugal alternative. The couple decided to limit their selection to those rated “excellent. It can also work in reverse: establishing the other person as the expert. This approach can also be reversed: The wife in this situation is a banker. The wife was determined to buy the least-expensive brand rated excellent by consumer publications. When he showed his wife the detailed spreadsheet.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. and forcing him or her to control the discussion of the issue. When it came to comfort. They both expressed an interest in finding a couch that offered the most “interior” space. he decided upon a strategy: First establish himself as the “dimension expert.
investment decision or deal with an error in a bill. 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. a negotiator in a similar situation was able to get the other side to agree to include a plan that they had opposed only days before! Planning a Strategy 51 . He claims to lack the knowledge or insight to do the work—which he is then able to avoid! Example 2 A negotiator can often gain a valuable advantage on issues such as medical insurance or labor contracts by doing the homework and becoming an “expert. and Point of Service (POS) plans.” If you spend many hours learning about Health Maintenance Organizations (HMOs). Preferred Provider Organizations (PPOs). he argues that she is the expert. you gain an edge when negotiating a new plan for your company. and should therefore handle the problem.
particularly when things seem to be at a standstill. That simply rewards your continual squabbling. Russ: 52 50 Practical Negotiation Tactics . The two boys fought over the last piece of everything. and neither boy was very happy. she decided to try something different. This is done by deciding at the outset what you both have in common: You both want to reach an agreement. They immediately began to fight over it. because I am so conscientious about my paper route. I wouldn’t care so much. she made them share whatever it was. This time. and I really love the banana/butternut/ sour cream frosting on this cake. These positive things are part of your goals and objectives. here’s what they said to her: I think I should be rewarded with the piece of cake. I missed dessert the other night because I had to get to baseball practice. and then asked their mom for a chance to negotiate with each other. If this was chocolate icing. and so on. Be clear on what you have in common at the start. you both want to complete negotiations by a certain date. point them out at the very beginning of negotiations and refer to them throughout the process. When they boys returned. I also took out the garbage last week without being asked twice. the last piece of cake will get thrown away. The boys quickly huddled. and their mother was tired of it. Example 1 When Russ and Bill got home from school. Unless you can convince me otherwise. you want to reach an agreement that is favorable to an outside party. Mom: I’ve decided that I’m not going to cut this piece of cake in half and give you both some. Usually.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. neither of you want to be embarrassed at the outcome. they saw that there was one piece of cake left over from their mom’s bridge party. like we usually have.
m. Now that her children are in college. This cake is white cake. Planning a Strategy 53 . Example 2 Marilyn’s Memorabilia Store was located along the main commercial street of a residential neighborhood. to 3:00 p. and I really like white cake. We really want you to go back to your original times. 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. because there is no parking along the street during morning and evening rush hours. I helped with the bags without being asked twice. your new shop hours have caused your customers to park in our parking spaces.m. and keeps it open longer so she can attract customers on their way to and from work.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. she got a visit from some of the residents. That sounds like a wonderful solution. and her children were in school. It was the type of shop the nearby residents preferred. The last cake we had was chocolate cake. so these hours worked out well. Marilyn originally set her shop’s hours for 10:00 a. We realized that if we cut the cake lengthwise. she opens her shop at 7:30 a. and that’s not my favorite either. I can have the part with the icing and Bill can have the part with the cake and filling. Customers have started to park in nearby apartment lots. and better than a fast-food restaurant with late-night hours and a drive-through window.m. Residents: Marilyn. One day. so that your customers can park on the street. 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.
we have to be willing to tow the cars that violate it. 54 50 Practical Negotiation Tactics . and is probably empty in the afternoon if they haven’t gotten home yet..m. and see if it works.m. my customers can’t park on the street.00 a.m. But I really am increasing my sales by being open longer hours. Between 7:30 a. I don’t think that would be very good for business. if I go ahead and open the shop at 7:30 a. and I close at 4:00 p. Okay.m. The shared parking arrangement did work out for Marilyn. and 6:00 p. I really need that extra income to stay in business.m. and between 4:00 p.m.m. Most of our residents are gone by 8:00 a.? Residents: We certainly want you to stay in business here. and usually the car is gone by the time a tow truck shows up anyway. Lets try it. The parking lot used for apartment residents is probably full from 7:30– 9. 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. If you need to have the shop open more hours. or so anyway. and the residents needed Marilyn’s shop.m... So. if residents haven’t left for work yet. 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. rather than after work. the off-street lots probably won’t be used by my customers. I have to convince them to come before work. Do you? Marilyn: No. and 9:00 a. We think they’ll be agreeable to the morning parking. let’s see what the options are. But in order to keep my new customers.I’m sorry this is happening.m. then we’ll try and accommodate you. It is very costly to have cars towed. And we don’t think you want your customers’ cars towed. and 9:00 a.m. Marilyn: Conclusion Marilyn needed the extra parking. Identifying their shared interests caused the nearby residents and the customers to reach agreement.
Then we can sit down at this table at 3:00 p. I don’t. etc. How can I do that? You all live in this town and you know this house. but it can also work against you if you set one that is unrealistic or you fail to plan for it adequately. But at Planning a Strategy 55 . Example 1 Four adult children have gathered at the home of their recently deceased mother. Well. Deadlines can also be set by both parties to a negotiation when they want to put some pressure on themselves to come to agreement as quickly as possible. 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. one at a time: the youngest. the first.Tactic 13: Set a Deadline Be sure you know well ahead of time what the deadline is for completion of negotiations. we can each take turns selecting things … Like each tool or dish. and start choosing things. Deadlines can be imposed externally (such as the government’s deadline to get a tax break) or internally (set by one side. A deadline can help you make the best possible agreement in the shortest amount of time.m. We just don’t have the time … We’ve got to do this—the house is sold! Okay. let’s all take two hours to look around and make a list of things we might want. such as a deadline beyond which the union will strike or the date that an outside party has set to withdraw an offer that is in both your interests). A few hours? I can’t—I’ve got to leave shortly for the drive home. Well. Jenny: Everett: Sue: Everett: Mary: Sue: Everett: Mary: Jenny: Everett: Okay.
then the whole deal is lost because my company will lose $10 million in tax benefits under a federal law that expires on midnight.. Conclusion The mutually agreed-to process and self-imposed deadline was a fair method of negotiating—a lot better than the four of them arguing over their mother’s possessions. Agreed. can sell or give away what is left. your attorneys know the tax laws. David: I understand your concern. All of us must come back before Saturday to take what is ours—agreed? Okay. and I appreciate your interest in the historic structure. this is December 29. if I cannot carry a negotiated and signed deal to my board by noon on December 31. if we are not finished. we cannot agree to these development plans submitted by your company until we have reviewed how they will affect the historic buildings.m. Okay. However. Sue. Example 2 Allan: As the negotiating team for the city. 56 50 Practical Negotiation Tactics . Allan: What! Why did you not tell us this before? David: We never thought you would take three months to get to this point. Allan: Let me confer with the city attorneys. being the oldest.Sue: Mary: Jenny: 5:00 p. we all leave. December 31. And besides.
we can’t get the reports we wanted in 48 hours.) I understand the December 31 deadline. Let’s continue. and I don’t like it.Allan: (One hour later. Planning a Strategy 57 . He waited to bring it up until it was clear that doing so would help him get the settlement his side desired. Conclusion Knowing the external deadline gave David a significant negotiating edge. Obviously.
but I have a problem in my Spanish class. Then the teacher went back to the first one. but his grades are good. and you can neutralize its effect on the negotiations. Mom: I gave you money to buy a workbook a few weeks ago. Now. He knows that a D will mean that he will have to change the way he studies. His mother disapproves of his study habits. I’ll give you money for it. But don’t lose it again. but remember that both sides have weaknesses. I’ll need to buy it again. He decided to preempt the discussion in order to make the best deal. Control the use of the information. as well as strengths. I bought the second one. while watching TV. before your opponent tries to catch you off-guard. and Jason knows he is getting a D in Spanish. 58 50 Practical Negotiation Tactics . Mom: What’s that? Jason: A few weeks ago I lost my workbook. One day mine disappeared. Jason: Mom. and we used it a couple of times. Did you buy it? Jason: Yes.Tactic 14: Don’t Always Hide Your Weaknesses Be sure you know what your strengths and weaknesses are. Example 1 Jason likes to play video games as soon as he gets home from school and do his homework later. Unfortunately. and I missed some assignments. and one of the ways to do that is to reveal a weakness at the beginning. we need to talk. so he was able to prevail upon her to let him continue. as well as those of the other side. We had one at the beginning of the semester that we were using pretty often. but that was actually a different workbook. don’t get mad. Have a clear goal in mind AND all the information you need to make your points. Mom: All right. first-quarter grades are coming out at the end of the week. The objective is to negotiate from a position of strength. There will be times during a negotiation when you will want to catch your opponent off-guard. and this usually means having all the right information.
Example 2 Jane once owned a piece of property she wanted very much to sell. And I know I have to be better about getting in all of my assignments. Its owners found out that at least three other buyers had been in contact with Jane. he was able to continue to study the way he wanted to. Mom: Well. Mom. Although his Spanish grade was only a C+. and the D is directly related to my losing the book. Mom: Well. Environmental Science. His explanation made sense. I think I can do that. so there’s no reason to think I need to change my 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. my study habits are okay. I don’t think you’re taking your schoolwork seriously enough. but I think you do need to change your study habits. Jason’s decision to warn his Mom ahead of time rather than have her see the D on his report card gave him an advantage in the negotiations about study time. she trusted it more. and since he offered her the information up front. Jason: Spanish is just one class. Pizza Boy was interested and had even made inquiries about the property. English. The location was ideal for a convenience store or a fast-food restaurant. And those are hard classes—Algebra. B. It’s because I didn’t have the book. then I’ll agree to make changes. I think you need to give me the rest of the semester before making me change the way I do my schoolwork. Thanks. or borderline B. I’ll give you more time.(maybe C+). If I don’t pull the D up to a C or better. All of my other classes are A. but all three deals Planning a Strategy 59 .Jason: Another thing. all right. The work I did turn in was fine. Obviously. Since I missed some assignments. Conclusion All of Jason’s grades did improve over the next quarter. I’m sorry. But that Spanish grade needs to come up to a B!! Jason: Okay.
it’s only the neighbor to the right of the property who has a problem. Pizza Boy was prepared for her call. I’ve got to warn you—you might hear that there is neighborhood resistance to your putting in a pizza restaurant. the other interested buyers already have businesses in the neighborhood. really. They decided not to fight a disgruntled neighbor. Jane’s up-front disclosure of a potential problem allowed Pizza Boy to weigh the negatives with the positives. Pizza Boy: We’ve checked the property out. Actually. Furthermore. 60 50 Practical Negotiation Tactics . The Pizza Boy people figured that Jane’s asking price must be too high or that she is unwilling to negotiate. Pizza Boy: Well. When she contacts you. Pizza Boy: Well. we’re not interested in neighborhood fights. since they were well aware of the negatives. and it’s zoned for commercial use. though. however. I’m very happy you’re interested in my property. What are you asking for the property? Conclusion Jane told them her asking price. But unlike your company. was that Jane’s neighbor had contacted each of the previous potential buyers and complained about their plans to use the property. let’s assume that you are right. she started her campaign to keep them from closing the deal. which was way below the price they were actually willing to pay. When the neighbor heard about the new buyer. I think you’ll find that this is only one person. either. and was able to politely ignore her. What are her grounds for complaining? Jane: She doesn’t have any. The real problem. You are a big enough corporation to withstand her objections.had fallen through. The neighbor’s attitude suggested that there would be major resistance in the neighborhood if Pizza Boy tried to put in a commercial establishment. I know. there were no unpleasant surprises to stop the deal. A tentative deal was signed. however. Jane: Oh. she will want you to think it’s the whole neighborhood. I’m sure. This is how the negotiations went: Jane: Pizza Boy.
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. as illustrated in the following figure: Seller Resistance Point ($22.500) M $21. Carrell and Christina Heavrin. None is as important as the first one.000 Buyer Initial Offer ($21. The initial offer sets the tone of the negotiations and reveals something about the strategy of each side. 2: Distributive Bargaining Process. Many negotiators make their initial offer the highest acceptable offer (Tactic #19: Make a First and Best Offer).500) Resistance Point ($25. 190–192.000 22 23 24 25 26 27 Initial Offer $28. (2004).750) Target Point ($24. Exchanging Initial Offers 61 .500) Fig. for example.750–$25. The negotiator firmly states that it is their best offer in an attempt to gain a nice. by Michael R.Stage 3: Exchanging Initial Offers any offers and counteroffers are made during a typical negotiation—sometimes even hundreds. quick agreement. 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 offers of both parties are usually set reasonably above or below what each believes to be the settlement range. “Distributive” bargaining (“win-lose” or “zero sum”) is used.000) Target Point ($23.000) Settlement Range ($22. This is a practical starting point that will not anger the other side (and might even be expected). such as proposing to continue at the current rate or price. Experienced negotiators often view negotiations as a process in which the goals of one party are in direct conflict with the goals of the other party. Another common strategy is to start with the status quo. Adapted from Labor Relations and Collective Bargaining.
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). thus starting out on a positive note. usually. Experienced negotiators will begin the negotiation of several items by quickly proposing such a package. The settlement range is the distance between the resistance points. 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.000) is reasonable. 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. When the two parties agree to a price within the range.000. After initial offers are exchanged. Two extremely helpful tactics to be used immediately after initial offers are made are Tactic #15: Caucus and Tactic #20: Posturing. 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. See Tactic #18: Agree on Something As Soon As You Can. the other side does not agree to this value).In this example. 62 50 Practical Negotiation Tactics . the seller would immediately accept it because it is greater than the target point and the buyer would suffer a winner’s curse.” but the settlement price. the process quickly narrows to the range between the initial offers. Resistance points are the maximum or minimum beyond which a negotiator is likely to consider an offer unacceptable (and possibly walk out).000 and $28. yet is positioned well above or below what the party believes to be the opponent’s resistance point (thus avoiding the so-called winner’s curse). thus producing a true “win-win” negotiation. these points have set the outer limits. and is the range in which most negotiations actually occur. it is termed the settlement point – not the “right price” or “fair price. each initial offer ($21. A target point is the desired settlement value a party has set as a goal when negotiations begin. if the buyer’s initial offer was $25. In the example.
calling for a caucus gives you a chance to get your team to recommit to a particular course of action. because it might disturb the neighbors.m. A caucus is when a negotiating team calls for a break and leaves the negotiating table to confer in private. Unfortunately. You can invite up to 20 of your friends. 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.–10:00 p. so we’ll have the party from 7:00 p. If the negotiations have suddenly gone in an unanticipated direction. Her mom and dad had already talked about it privately. and presumably had an agreement. There are many ways to use this strategy. call a caucus so both sides can brainstorm new solutions to keep the negotiations going. We don’t want it to be a late evening. If negotiations seem stalled. Shelly: Twenty friends? You’re kidding! I’ve just started on my list. We’ll just have chips and soda. Example 1 Shelly’s “Sweet Sixteen” party was coming up. A caucus is certainly called for if individual members of the team become agitated or express frustration with the progress of the negotiations. If the team is feeling pressure to concede on certain items.m. the negotiations got out of hand when Shelly’s dad forgot what had been decided. a caucus can be used as a break to calm the situation down. A caucus gives you an opportunity to work out problems with your own team in private. or if a member takes on a role in the negotiations that has not been assigned to them. If the negotiations are heated. without revealing their ideas to the other side.Tactic 15: Caucus If you are part of a negotiating team. Mom: We’re planning on having your party here on Saturday night. To do so in front of your opponent would obviously undermine your team’s position in the negotiations. Shelly. make use of the opportunity to call for a caucus. and I already have 25 names. so her parents sat down with their daughter to discuss the details. And that’s just my friends from school! I haven’t started Exchanging Initial Offers 63 .
—that’s so “baby. I think the band would be fine. Oh. alone. (During the caucus. It’s special!!! Well. Mom! This is my “Sweet Sixteen” party. I’m sure we can ask them to tone it down a little. In fact. we’ll call you when we’re ready. Shelly.” They would never expect a party to end before midnight. Time out! Dad. (with some irritation) I’m not sure. Your dad and I already talked about this and agreed that 20 guests would be the limit. I guess the VFW will work. (excited) That would be so cool. And can we bring in pizza? Or maybe one of those “mile-long” hero sandwiches? I like those—let’s do the hero sandwiches. and then the number of kids won’t matter. Jerry from down the street is in a really good band that all of the crowd likes.m. okay. Actually. And they can’t go home at 10:00 p. I could invite everyone!! Hold on! I thought we agreed that this was to be a simple party. (shocked) Jerry’s band from down the street? They’re a punk rock band! Their music is totally inappropriate for sixteen year-olds.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. And midnight is definitely too late. I think we can handle a few more kids—how about 35? And midnight sounds okay. We’ll get a band—everyone does. That would be great! It would keep everyone entertained. we could rent the VFW hall. We could play records and you guys could dance. That sounds like too many for here at the house. Dad. we need to talk. Shelly’s parents reviewed their first planning discussion and went over what Shelly’s mom thought they had already 64 50 Practical Negotiation Tactics .
m. to 11:00 p. can’t we? No band. but your dad and I agree on getting a DJ to play. please!! 11:00 p.m. causing them to lose control and make compromises they hadn’t intended to make. too? No way!! I want presents!! Conclusion In spite of their prior planning. Mom’s call for a caucus gave them a chance to regroup and re-state their original objective.m. Your mom and I agree—11:00 p.) Okay. Agreed. That way.m. Dad. But you are limited to 40. but we’ll schedule the party for 8:00 p. That’s so lame. When they called Shelly back in. A DJ? I guess that’s okay. this mom-and-dad negotiating team became unglued during the negotiations. midnight. All right. Example 2 The contract negotiations between the company and the union had been going on for days. her mom presented the revised proposal. And we’re serving chips and sodas. but no Sweet Sixteen birthday party decorations. and not a huge production.Mom: Shelly: Mom: Shelly: Mom: Shelly: Dad: Shelly: Mom: Shelly: decided. and we will need to approve the list. which was to make sure Shelly’s Sweet Sixteen party was a fun and safe evening. Okay. But we can have the band. sorry. Does that mean no presents. is for little kids!! No. and you can invite more friends. we will be better able to chaperone. we’re going to rent the VFW hall. The item currently on the table was the company’s offer to give each Exchanging Initial Offers 65 .
Union: Why are you so concerned about new job opportunities? Are you holding out on us? Company: No. With the cost of college educations so high. The company’s negotiator didn’t recognize the misunderstanding. Union: You’re offering a choice between health insurance and tuition payments? What kind of a deal is this? Company: Hey. it’s a good proposal. Tuition in place of health insurances? They’ll think I’ve lost my mind. and the following conversation occurred. 66 50 Practical Negotiation Tactics .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: (angrily) I’m not presenting this proposal to my people. many will want to use it for their children’s education. 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. A lot of employees have spouses who can get health insurance coverage through their work. The union’s lead negotiator misunderstood the proposal. What is this. The tuition benefits will encourage the workers to be prepared for new job opportunities. I’m just saying that tuition benefits are sometimes a good substitute for health insurance. Union negotiator #2: Please—just a moment outside. and thought he was being asked to choose between a health insurance plan and a tuition benefit plan for all members.
Exchanging Initial Offers 67 . I think that what you’re proposing is a really good idea. Conclusion Negotiator #2’s timely call for a caucus so she could explain the miscommunication in private saved the session. and the parties were able to complete their negotiations. I didn’t understand that your proposal was to allow each individual member to choose between the health coverage or the tuition benefit. the parties returned to the room. (After Negotiator #2 explained that the choice of tuition or health insurance benefits would be an individual choice for each unit member and not a change in the contract for everyone.) I’m sorry. Now. Negotiator #1 regained his footing. let’s move on. and I apologize for explaining it poorly. we’ll be back in 5 minutes.Union: Union: Company: Okay. Good. I thought that the contract would cover one or the other for everyone.
Salesman: Well. we’ve got expenses and we need to make some profit. according to the Consumer Reports listing of the cost of the vehicle. At a point late in the negotiations. not revealing that the item exchanged is a “throwaway. Hobbs: Yes. 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. It is a useful tactic in any negotiations.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. 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. But for this price.” Throwaway items are those things that hold little or no value to you. Mr. However. you don’t want your opponent to know what these things are. Hobbs. it’s a great car and a fair deal. (Salesman returns with manager) 68 50 Practical Negotiation Tactics . when the two sides are only a few dollars apart. but … Salesman: But what? Hobbs: Well. but in reality. but he makes a mental note to use color as a “throwaway” item. Example 1 The buyer. quickly checked the dealer’s inventory of sport utility vehicles in stock. so be sure you present them in a way that suggests importance. I can go to another dealer and get a green exterior—the color I like best. I know. He doesn’t really care about the color of the new vehicle. I’ll go get him.” Party B thinks that A has sacrificed one important objective to gain another. Salesman: Let me talk to my manager. A has gained something of true value and given up nothing he values in return. you are making $200 profit over the true dealer’s cost. this conversation takes place: Hobbs: Yes.
no it’s not. Then we have a deal. All three employees must agree to the schedule. Employees will be paid time-and-a half for each of these days. he brought it up and convinced the salesman and manager that it was an important item to him—possibly even a deal-breaker. 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 . Miguel. and seniority will be used to determine who gets to choose the first day.. and Carolyn) to develop a mutually acceptable (to the three of them) holiday schedule in which at least one person will cover the office on each of nine “slow” days. The days in question are: Exchanging Initial Offers 69 .. 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. The three are sitting at a lunch table to discuss the schedule. Hobbs successfully chose color as a throwaway item. At the very end of the negotiations. Conclusion Mr. Example 2 The office supervisor told the three internal sales representatives (Jenny.. Why didn’t you mention the color before? I didn’t expect to actually buy a new car today (note: not the truth). The manager was convinced enough to sacrifice a final $100 for the throwaway. I’ll take the red one for $100 less.Manager: Hobbs: Manager: Hobbs: Manager: Hobbs: Manager: We are offering you a great deal.
it was assumed that each would work three) in order to have December 24 and 26 off to be at home with her children. This would allow Jenny and Miguel to each work only two days. 2 Jenny: December 23. each made a first choice of days they will work. Carolyn has decided to use as a “throwaway” the number of days she will work (previously. 24.November 25 (the day after Thanksgiving) December 23. January 1 Carolyn: December 24. 31. in exchange for giving up earlier choices due to seniority. They agree. December 27. Jenny and Miguel feel that they received something of value from Carolyn: She must work two more days than they must work. January 2 None of the three are totally happy with the results. She got what she wanted by giving up something she did not value: the two other days. December 31 Miguel: November 25. 27. January 1. 26. and each chooses their days to work: Carolyn: December 27. They all agreed to their schedules. December 26. 31 January 1. 30. 30. December 30. 26 Miguel: November 25. but that is a secondary consideration. A second and third round produced the following allocation: Jenny: December 23. if they let her choose the two days she will be off and the five days she will work. 2 In the first round of negotiation. She proposes to work five days. December 24 Conclusion Carolyn has achieved her objective: She will be off December 24 and 26. 70 50 Practical Negotiation Tactics . They have decided to start over. She would actually prefer to work the extra days and get paid time-and-a half.
and a collection of antique furniture. we need to sell the house. but I’d like to talk about the house and the furniture. 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. realizing that the total cost of a deal might make or break the agreement. 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. along with the cash. their mom left specific pieces of jewelry and art in the will to each of the girls. When the girls decided it was time to talk about the estate. Their mother’s will was very clear: the three daughters were to all have an equal share of her estate. Anne: As I see it. 300 shares of stock in a pharmaceutical company. for example. and the stock and distribute the proceeds. were faced with the task of selling the house and disposing of their mom’s personal belongings. Autumn: I don’t have any objection to selling the stock and distributing the proceeds and the cash three ways. The estate’s assets included a checking and savings account totaling $450.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. Example 1 When their mother died at age 82.000. A reluctance to include one particular financial item with other financial issues. The house and much of the furniture has been in the Exchanging Initial Offers 71 . Autumn and Angela. a house valued at $250. one might package all of the financial issues in one group and negotiate on that package as one issue. In addition. Anne and her sisters. they met at the house. three ways.000 with no mortgage on it. For example. the antiques. it is often helpful to package the items in distinct groups and then deal with each package separately.
we can sell ours. I’d like to talk about the art works Mom left each of us. there’s a lot of work that needs to be done to get it ready to sell or to make it livable for one of us. Anne: Okay. What would you think about agreeing today to distribute the cash and stock three ways. Autumn: Sounds good to me. don’t you think? Angela: Maybe. it’s a magnet for vandals. I’d really be interested in talking a trade for some of them. If we want. So we agree: We’ll leave $30. and if we wait a couple of years. so I will be able to keep tabs on it. There was a reason why she gave us what she did. we’ll discuss again what happens to the house and the antiques. Why don’t we leave some of the cash in the bank. Frankly.family for years. and use it to fix the house up? Then when we make a decision. Autumn: I think its awfully soon to be making these kinds of decisions. Angela: I live close by. It’s a buyer’s market now. Mother was born here and grew up here. we’re really free to do with them what we want. I’d like it all to stay in the family. and now that we have them. If Angela wants to hold on to her stock. We’ll split the stock three ways. In fact.” She gave those things to us. but the operative word is “give.000 in the bank and distribute the remainder three ways. With no one living here. Anne: I’m not sure I’m comfortable talking about trading the jewelry and art Mom left to each of us. And we’ll fix the house up. we’d get a lot more for them. we will have a more valuable asset. she’s free to do so. and letting everything else wait for another discussion. Soon. Anne: But that means we have to continue to take care of the house and its contents. Angela: And we can talk about the art and jewelry? 72 50 Practical Negotiation Tactics . Angela: Now’s not a good time to sell either the stock or the house and antiques.
what kind of paid leaves there will be (personal. The second: working conditions (work schedules and promotional opportunities). etc. deciding whether there would be annual wage increases as well as merit increases. health benefits.). the antiques. and deal with one area at a time? The first: Wage issues (pay schedules and the annual and merit raise issues). funeral. including benefits for partners in non-traditional relationships. and the assignment of the limited number of parking spaces. Conclusion Autumn’s suggestion to package the money and stock because they can be easily divided by three made agreement on those items possible. Employees: We’ve got a lot of items to cover. and establishing a work schedule to accommodate evening and weekend clients. the jewelry. The third: Ben- Exchanging Initial Offers 73 .Autumn: I can agree not to do anything with the jewelry and art Mom left me before we talk. The following tasks needed to be a accomplished: establishing basic pay schedules. deciding to base the increases on a percentage or equally distribute the funds for increases among the professional and clerical staff. vacation. The negotiations on the other items—the house. Angela: That’s fine. Waiting to make decisions on those items until some time has passed gives the women an opportunity to look at a number of options. 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. Anne: Same with me. tuition benefits. Several issues also needed to be addressed: the ability of employees to move up through the organization. and the art works—will be more difficult. sick. May I suggest that we divide the items into three areas. but I’m making no commitment to trade.
that makes sense. Also. Employees: Okay. That’s a program that can have a lot to do with how employees are able to increase their worth to the organization. but I’d change your list. 74 50 Practical Negotiation Tactics . I think it also makes sense to include tuition benefits in the Working Conditions category. And paid leave clearly belongs with Wage issues and should be discussed with the pay schedules. tuition benefits. paid leave times. 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. Employees: I’m surprised that you would take merit increases out of a general discussion of wages. the paid leave categories are pretty clearly defined. Executive Director: Well. Wages should not include merit pay raises. because they’re really an incentive for better performance. Later negotiations were difficult. so there’s not going to be a lot of discussion on what our pay schedules and annual increases can be. Executive Director: Sounds like a good agenda. but the parties were able to come to agreement because the wage issue had been resolved.efits (health insurance. and the parking spaces). to be honest with you. I would include that under the Working Conditions category. Executive Director: I think it’s a good idea to group items together. we are an agency supported generally by public funding. So I’d like to see us get through the wage issues quickly and then move on. 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. as well. Let’s get started.
no matter how insignificant. because Tim felt that Kathy had taken advantage of him during the marriage. Their “property division” was mostly about dividing their debts. It indicates to your opponent that you are a reasonable negotiator. sets the stage for mutual respect and communication. too. and both have good jobs. The couple hoped to do the divorce without involving lawyers in order to save money. Tim worried that he would be stuck with all of the debt. and she agreed. Tim: You might be leaving town. Now.Tactic 18: Agree on Something As Soon As You Can Negotiations are more successful if both sides can agree on something—anything—almost immediately. are divorcing. with her promotion sending her out of town. You signed those papers. They had also furnished their house on credit. They were in the middle of buying a house. rather than disposing of assets. and that you are entering into the negotiations with the intent to reach agreement. You can also make an effort to agree on something your opponent offers early in the negotiations. The discussion might become very heated. Tim began working right after graduation. and they were making payments on school loans (for his undergraduate degree and her undergraduate and graduate degree) and on two cars. after a brief marriage. Kathy was asked by her employer to relocate to another city. It was her idea to buy the house and go into debt to furnish it. Kathy borrowed more money to go to graduate school full-time. Consider starting things off by presenting your opponent with a proposal you feel confident can be agreed upon without argument. Kathy’s first job paid more than Tim’s because she had a graduate degree. An initial agreement. They met and married in college. Example 1 Tim and Kathy. but don’t think you’re going to stick me with all of the mortgage and credit-card payments. without suggesting any changes or modifications. and might not even be able to keep the house. They have no children. Exchanging Initial Offers 75 .
a wholesale art dealer. The first thing I’d like to talk about is what we are going to do about the cars.. I got my convertible. hold on. They also agreed that Tim wouldn’t have to pay her that amount for five years. we would have paid down our school loans more. as long as the cost was approximately the same. 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. I think it only fair that I take over repayment of all the school loans. If both of us had been working the year I went to graduate school. and he could pay it in annual installments over a five-year period. I say we agree to transfer the convertible loan to me and you take over the loan on the sports car. Tim: Okay. Tim: Well.Kathy: Hey. I don’t intend to “stick” you with anything. The monthly payments are about the same. we decided to each pick out our “dream car” and that we would not overrule the other’s choice. about the house and furnishings. When we bought them two years ago. and you got your sports car. Okay. I think that makes sense. Frankly. ABC usually uses UPS 76 50 Practical Negotiation Tactics . Kathy: I suppose we should look at the school loans next. Kathy: Now. an art gallery. 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. Example 2 ABC Company. 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. and XYZ Co. yes. as you remember. What do you want to do about them? Conclusion Having agreed to two items very quickly.
ABC: Before we begin. There was no indication that the gallery’s electricity had gone out over the weekend. However. and the boxes showed no external damage. and arrived on time and apparently in good condition. Unfortunately. 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. ABC refused to pay WeCanShipArt until it received payment from XYZ. They arrived right before the holiday weekend began. The three parties agreed to hold a conference call late Monday afternoon to try and resolve the dispute. WeCanShipArt claimed that the boxes were not damaged in shipment—the artwork was already water damaged.to ship artwork. and we will continue to discuss who is liable for the three water-damaged works. XYZ contacted ABC immediately. water from the gallery’s air conditioning unit pooled on some of the surfaces of the warehouse area. You can get the three new artworks here so that we can hold the sale as scheduled? Yes. ABC’s position was that the artwork was fine when it left their location. XYZ’s manager failed to open the boxes or remove the artworks. and that XYZ needed to either go to the shipping company or its own employees for compensation for the damage. We’ll expect you to pay for the 12 works that will be in your show. 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. The artworks filled four boxes. but only if you let us ship it UPS. when the boxes were opened on Monday. but XYZ asked specifically that a little-known company specializing in shipping art known as WeCanShipArt be the shipper. or else the box was damaged in XYZ’s warehouse. and began preparing to return all of the artwork to ABC. XYZ decided to cancel the promotional sale that was to start on Wednesday. Holiday weekend storms caused the electricity to go off for different periods in different parts of the city. XYZ: ABC: Exchanging Initial Offers 77 . it was obvious that the art in one of the boxes had suffered considerable water damage. The other times this happened.
Having reached an amiable solution to the immediate problem. WeCanShipArt: Wait a minute. tomorrow and we’ll wait for payment on both shipments until we resolve how the artworks were damaged. they will split the cost of the three damaged pieces three ways. we’ll take responsibility for all of the consequences: the lost sale to ABC and the lost promotional sale by XYZ. how do we resolve the issue of the damaged artworks? Conclusion ABC’s decision to offer a solution to XYZ’s immediate problem. and if word gets out that you think it was. I can’t see how I can refuse that. They also agreed that if the investigations are not conclusive. that’s okay with me if it’s okay with XYZ. If we don’t make the deadline. XYZ: Okay. 78 50 Practical Negotiation Tactics . The artwork was not damaged while in our control. we’re ruined.m. And we’ll eat the cost of shipping. at its financial risk. We can guarantee that we will deliver the new order in perfect condition by 5:00 p. Now. ABC: Well. generated a like offer from WeCanShipArt and a reasonable response from XYZ. You can’t just ignore us. regardless of where the original three artworks were damaged.XYZ: Agreed. the three companies were able to agree to undertake an investigation within each company to determine when the artworks were damaged.
I don’t have any idea. We plan to put an ad in the paper next week. Example 1 Colleen: Ann.000 for it six years ago. period. Conclusion Ann and Colleen did not feel like negotiating over the tractor and running the risk that it might affect their friendship. Okay? No quibbling. I know you and Jeff said you’d like one because you have about five acres. and even more hours in the fall picking up leaves. we paid $5. I don’t want to quibble. You must mean what you say and be prepared to walk away from an unacceptable offer. Exchanging Initial Offers 79 . Jeff spends many hours mowing the yard every week. Ann: Well. we plan on selling our Ford tractor when we move. but if you’re interested. we’ll sell it to you. 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. Ann: That sounds great! I don’t want this to affect our friendship. It is important that both sides know that there is no negotiating beyond the single “best offer”—that the first offer will either be accepted or rejected. What do you want for it? Colleen: Well. Why don’t you give me a price? Colleen: Oh.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. no hard feelings either way. consider using the “First and Best” tactic. The “first and best” tactic enabled them to settle the matter easily. 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. Ann: Thanks! We really need one. and it came with the bush hog and the leaf pick-up.
I think we have agreed to all aspects of the job offer. except salary. how about you making your first salary offer your best one. He also started the job with a positive working relationship with Vernon. on this slip of paper. who admired the way Archie negotiated his starting salary. Here it is. Okay? Vernon: That sounds good. Conclusion Archie accepted the job offer. and I’ll take 48 hours to consider it. and you know my current salary. I’ll get back to you in three days. because it was several thousand dollars above what he decided was the minimum it would take for him to change employers. as we agreed. I came up with the best salary offer I can make. I’ll discuss it with my wife and get back to you in 48 hours. but we have internal budget considerations and we must consider equity with other employees. 80 50 Practical Negotiation Tactics . I want the job.Example 2 Archie: Well. Archie: Thanks. I don’t like negotiating over salary either. I’ll either accept it or reject it. I expect a fair increase. We want you. So. but I don’t want to start off in a new job by negotiating with my boss! So. no questions asked. (three days later) Vernon: Archie.
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. Third. then the prom.” but it is also a source of valuable information that can help the negotiations proceed to a successful conclusion. but he figured “all night” was relative. This is called posturing—presenting your position strongly and completely. you only have one Senior Prom in your life. Kevin had “negotiated” with his parents before. Exchanging Initial Offers 81 . you know that Sally is really looking forward to this. and we’ve made a lot of plans with our friends that I need to talk to you about. Kevin: Mom and Dad.Tactic 20: Posturing You might have to do a little acting at the beginning of the negotiations. First we’re going to dinner. Present your position and demands as if yours is the only logical position. (Once negotiations get underway. you will probably have to modify some of your positions if you are to reach agreement. and in a favorable light. look for indications from your opponent as to what he or she believes is their best position. Sally’s Senior Prom is coming up. Fourth. I’m the only junior in the crowd. Second.) During the posturing phase. we’re not going to be dating exclusively after this summer. so he knew that he would have to sell them very quickly. and ignore or deny any weaknesses in it.m. He and his date had decided that as long as they could join their friends for breakfast after the prom.m. Posturing is indeed “acting. and it really wouldn’t be fair if I wasn’t able to go along with the rest of the group. It might be your only opportunity to explain your position without interruption. was dating a senior. First. a 4:00 a. and then to breakfast at “Timothy’s. 17 years old and a junior in high school.” As you know. since Sally is going away to college next year. curfew would be okay. we’re all meeting at Donna’s so we can share a limousine. so the prom is a pretty big deal to both of us. He knew his parents would not agree to let him stay out all night. Example 1 Kevin.
Donna’s parents will be there. Yes. You make some good points. You realize that this could be as late as 4:00 a. you have been fairly good about making your curfew—most of the time. Sally’s parents trust us and have already said yes to her. From where we sit. you will have another Senior Prom—yours—so we don’t think you will be “missing” that much if you don’t stay out all night. I don’t drink or do drugs. they will be open for the Prom crowd only. However. yes. That’s asking us to believe a lot.m. We think that after the breakfast. We’ve heard that they allow kids to drink. 82 50 Practical Negotiation Tactics . We’re just not convinced that your entire group has been alcohol. we told you that we would not be changing our rules to accommodate that older group. we’ll have to get in our car and drive home very early in the morning. And if we don’t spend the night.or drug-free. So. so there will be plenty of chaperoning. the limousine will take us back to Donna’s house to spend the night. remember that when you started dating Sally and hanging out with an older crowd. That’s the deal then? Okay.Mom: Kevin: Mom: Kevin: Timothy’s usually isn’t open early in the morning. Also. of course. for sure. Things can happen on a night like that that adversely affect you for the rest of your life. Fifth. We are. but to use that as a reason to stay overnight doesn’t make sense. which could be dangerous. I believe you can pay a little more and have the limousine bring you both home. this prom is a one-night thing—a dance that is dressier than you’re used to. And. and the crowd we hang with doesn’t either. Finally. and we’re just not happy about that. you and Sally need to call it a night (or really a morning). but because the owner’s daughter goes to Sally’s school. I think I ought to be able to stay out all night. I’ve never missed my curfew. but it should not be oversold. I know you trust me and that I’ve earned the trust. happy about your plans to use a limousine so you kids aren’t driving. we know. Second. Donna’s parents are not as strict as they could be when a bunch of you are there.
and it will grow—everything from sub-parts manufacturing to the shipping business we generate. one-floor operation would be very profitable. and had this conversation: Tencro: We really want to keep our company here and expand it.Conclusion Kevin’s strategy to hit his parents with all of his very good arguments at the outset gave him an advantage. The company approached other states to see what incentives they might offer Tencro to locate in their state. With 800 employees.m. Tencro is not going to leave the state. Tencro: Let me just remind you of what our company means to this state. Example 2 Tencro Company decided to modernize and expand its business. EDO: Well. The spin-off business from our operations is huge. our Exchanging Initial Offers 83 . Sally and Kevin had a wonderful night and were quite happy to have the evening end at 4:00 a. and a new. other companies have received incentives and Tencro certainly wants all it can get. If we can expand here. but we’re getting a lot of interest from other states willing to help us relocate. but there are limited options available. but it could easily add another 500 if it had the space on its assembly line. we are one of the largest employers in this county. We need to find out what you’re willing to do to keep us here. It currently employs 800 people. Tencro has approached the state’s Office for Business Incentives to see what. if anything. regardless of the incentives. Nevertheless. The assembly plant is out-of-date. and it does not really need any help. because his parents could not disagree with such wellthought-out ideas. the state can do to help the company expand and rebuild. Tencro approached the state’s Economic Development Officer. we’d be adding at least 500 new jobs. we’re of course interested in keeping you here. Also. but was disappointed to learn that they offer very few incentives.
EDO: The state has very limited resources to pay for economic development incentives. We can’t possibly give it away to other companies coming in behind them. And we’ve been offered land practically free in the neighboring state. so we’d have to have it free here. There are more residents in the state demanding more public services: road improvements. paying taxes. That might involve the state building housing for them at a reduced cost and providing them with some retraining. etc. We do want you to expand your plant. We need a rebate on the local income taxes to help pay off the loan to build our new building. EDO: Well. We need help in the cost of attracting and training the new 500 employees. The industrial park land can’t be “free” because we have agreements with other companies that had to buy the land. now that the economy has improved. schools. We think that we’re the reason XYZ and ABC companies located here and we believe they are likely to leave if we do.. Certainly. while we value your company as a long-time corporate citizen. etc. if the new location is at the local industrial park. And. We 84 50 Practical Negotiation Tactics . We need certain incentives. we will need the two-lane entrance expanded to four lanes. or else it will not be cost-effective for us to stay here. additional police. any plan by the state to build housing that is subsidized by tax dollars will draw a great deal of criticism. and we are willing to offer some training dollars for the new workers. what do you have to have? Tencro: We need a new location—20 acres or so—to build our new plant. Just increasing the workforce by 500 will pull new people into the community and cause housing costs to rise—something our citizens on fixed incomes are very much against. and traffic signals. 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. and we’ve had to divert funds from business incentive programs over to basic services.employees pump money into the economy by buying houses and cars. Also.
we’re just not in a position to offer more than that at this time. Other than that. but for the fact that each party did its homework and was aware of the true facts. Tencro: Well. Tencro was able to pay off the borrowed money in half the time. and hired 500 new employees. borrowed money for the new building. Exchanging Initial Offers 85 . Conclusion The posturing by both sides could have caused the whole negotiation process to bog down.agree that the road into the industrial park must be widened and a traffic light installed at our expense. Tencro bought land in the industrial park. the training and the new road improvements were all the incentives offered to Tencro. EDO: Get back to us as soon as you can. However. let us go back and take another look at our options. and the state did end up participating in a housing subdivision in order to keep the purchase price down for the new employees. The new set-up was so profitable. Future negotiations continued.
Avoid giving away too much at the outset. Sue: Let’s offer $325. but you feel cursed because you gave away too much. Jay: No. or 3) Make an unrealistic offer (i.. and you cannot withdraw it in good faith. The other party will probably come back with an equally ridiculous offer.” The perfect first offer. such as last year’s price. never give them their asking price. before someone else does. 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.000. They found one they both like that lists for $325.e.000 and $337.000. 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. at minimum cost. is the most (or least) the other side will accept. thus requiring greater concessions on both sides. The sellers must be willing to come down a few thousand … Sue: Well. We don’t know how anxious they are to sell or if they know the market. think things through before you make or accept the first offer. 86 50 Practical Negotiation Tactics . Let’s low-ball them and offer $290. Jay: No.” (You have won a settlement.) To prevent this from happening. That’s a fair price.000 for a house that sold for $185. 2) Start out with an old number.000—what they paid for it. particularly if you don’t know the other party’s “settlement range.000. because you have settled quickly. Example 1 Jay and Sue are looking to buy a house in a specific neighborhood because it has a good school system. then $320.000 two years ago. and that two similar ones on the same street sold for $330. and houses in this area sell fast. offer $150. of course. which can be very useful).Tactic 21: Avoid the “Winner’s Curse” It is often quite difficult to make the first offer. Their realtor told them that it sold for $290.000 three years ago).000 this year.
Lyle: So what’s your price? Bob: Can you tell us what you have budgeted for this project? Lyle: No. (Bob and Frank meet privately to discuss the situation.500—half the difference! Sue: Great. then let them make a counteroffer.) Bob: I’d do it for $3. Both parties felt that they made a good deal. they had offered $325. I can’t tell our realtor $290. Exchanging Initial Offers 87 . Give us your lowest price. since they had already bought another house. (the next day …) Jay: They made us a counteroffer of $307. 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. as Sue had first suggested.000 total. Lyle Foxworthy.000 for each of us—$6. realizing they offered too much. but who knows what they are planning on offering. That’s an insult! Jay: Well. the company president. Sue: Then you do it. Frank: Me too. If.000. The buyers were very motivated to sell. as requested by the human resource director. the sellers obviously would have accepted and Jay and Sue. They outlined how they would develop a new employee performance-appraisal system. Let’s accept it! Conclusion Jay and Sue avoided the so-called winner’s curse by making a low (but reasonable) first offer.Sue: Don’t be crazy.000. was very impressed with their presentation. and the offer was based on fact: the prior negotiated price.
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: That’s fair. Lyle: Okay. 88 50 Practical Negotiation Tactics .000. We’ll do the job. We’ve waited long enough. and you two come highly recommended. That is all that’s left in this year’s training budget.) Lyle: Okay. but we know you must have an amount budgeted for this and we are willing to do it for that amount. Conclusion Bob and Frank avoided the winner’s curse by forcing Lyle to make the first offer. They also ended up getting three times ($18.000. What’s the cost? Bob: We want the job.000) their minimum price of $6. I’m out of time.Bob: Lets make them give us a price! (Bob and Frank return to the meeting room. but we can’t pay more than $18. and it would not apply.
carefully evaluate an opponent’s offer. Also. be enlarged (see Tactic #27: Expanding the Pie). One or more parts might be acceptable or indicate movement from their previous positions. 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. and remain open to offers and options that you did not originally expect (see Tactic #30: Always Leave Room for Dessert). and do not flatly reject it because it is not your offer.Stage 4: Making Counteroffers he heart of the negotiation process is the give-and-take. Expect that the “total pie” will be different from what it was at the outset. 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. Experienced negotiators seldom reveal their exact priorities and objectives. labor negotiators. Wait to counter (see Tactic #24) because this will give the opponent the sense that you are serious about bargaining. This can produce a negotiated solution without giving up your priorities (see Tactic #28: Fixed Alternatives). seeing no common ground. the other party. in fact. Instead. It has often been said that the key to negotiations is to be flexible (see Tactic #25). Use a prolonged period of silence (see Tactic #29) to convey something at a strategic moment. Skilled negotiators such as salespeople. T Making Counteroffers (The “Give and Take”) 89 . In some negotiation situations. which would most likely weaken their position (see Tactic #26: Keeping Secrets). is likely to pull away from the table. because if you do not at least appear to be flexible. and attorneys use tried and true tactics in giving and receiving offers. do not dismiss it because it is not all you want. When the other party makes an offer. what appears to be an outer limit of the settlement range when the process starts can. which is often the case. but possibly of different values to your opponent.
I don’t want to give up on a family vacation that quickly. Jerry had already started his summer job. so you can go without me. Dad: Wait a minute. Let’s see what we can work out. Example 1 Jerry. His brother Sydney. and quicker. Dad. 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. Jerry pointed out that he is expected to work until July 31st. 15. their parents began discussing a family summer vacation. Option 1: No family vacation. Proposing multiple ways to reach your goal can get you to the same place. The week he would be home would be the first week of school for Sydney. what say you. 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. 90 50 Practical Negotiation Tactics . 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. while it may be your best option. finished his freshman year of high school at the beginning of June. except when you’re negotiating. 19. Proposing only one solution to a problem. Jerry will be here. and that he already made plans to visit with college friends on the East Coast for the two weeks after that. completed his first year of college and came home for the summer around the middle of May. In mid-June. Sydney. We have four options. gives your opponent little maneuvering room and might even prolong or damage the negotiations. He planned on being home for one last week before having to pack up and go back to college. Option 2: Mom and I go before Jerry leaves on August 1. Here’s the discussion that followed: Mom: Well.Tactic 22: Propose Multiple Options The shortest distance between two points is a straight line. it looks like we can’t really plan a vacation for all four of us.
Classes don’t start until Friday. and Carl). if it’s okay with Jerry. Mom: Well. Sydney: Don’t I start school that week? I don’t want to miss school. but he can discharge employees for poor performance. when we come home. Andrea considers Making Counteroffers (The “Give and Take”) 91 . so I won’t be able to meet up with you until Sunday. we could return home on Thursday and still get a week’s vacation. but it should work out all right. and one secretary in his litigation unit. one paralegal. Conclusion The goal was to have a family vacation. you have a half-day orientation on Wednesday. Jerry: My friends and I have plans through Saturday of that week. actually. Sydney: Okay. If we started the vacation on a Thursday. Mom? Mom: Let’s do it. Example 2 Joe is an attorney whose job responsibilities include managing three other attorneys (Andrea. Joe has no say in who was hired by the corporate legal office to work in his unit. they were able to make that happen and not interfere with or argue about the merits of each other’s individual goals. Then Jerry joins us until Thursday. By proposing numerous options. Option 4: Jerry doesn’t return home the week between his visit to the Northeast and returning to school. we meet up with him that week for vacation. and Sydney go to South Carolina before his school starts. Jerry: Okay with me. It’s not perfect. 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. Bob. me.Option 3: Mom.
isn’t it? But I don’t think just moving you really solves the problem. Andrea: We’re hired for our expertise. Joe: Andrea. Andrea: Well. Joe: Come on. I really see your options as follows: You can leave the corporation. Joe: That’s all well and good. Before you start. 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. 92 50 Practical Negotiation Tactics . and I don’t see why we don’t have more independence. The attorney for the other side has agreed to give me the additional time to file it. but it doesn’t solve the problem—nor is it the only problem. It was just a comment. Andrea: Wait Joe. Andrea. It is to the corporation’s benefit to address that problem here and now. Andrea: You didn’t list moving to another unit as an option. or you can work out a “supervision” agreement with me so that I can better monitor your performance. we have a very big problem.herself to be a professional. To put it as bluntly as I can. You had no authority to agree to settle the Stites case without clearing it with me. and resents any attempt by Joe to supervise her work. which forced Joe to take action. you have a job-performance problem. In the last month. you know that wasn’t an okay to settle. rather than to put it off on someone else or for some time in the future. you can agree to a demotion so that your areas of responsibility are lessened to that of a paralegal. 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. so Joe took a “hands off” approach. Joe: That is certainly an option. let me say that I’m handling the missed deadline on the pleading. she made a two glaring errors in judgment. We have a formal procedure that you just don’t like to follow. Her job performance was acceptable. however. If you don’t like the way I do my job.
or I would advise your next supervisor to put you on a very formal approval program.Joe: That could be an option. improve her work performance.) Making Counteroffers (The “Give and Take”) 93 . the needs of the corporation have to come first. then it would save face for me if it comes with a move to another unit. I want to stay with the firm. Joe: That’s fine with me. But in fairness to our mutual employer. rather than my staying here. but it would still require some change in the way you work: either a demotion. lets talk to Bill about the move. my goal is the same is yours: to create an environment where you can perform to your full potential. Andrea: Well. I hope we can work it out. and propose an acceptable alternative. by Leigh Thompson. 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. If you are convinced that I have to undertake an “approval” program. If that option is okay with you. Andrea’s move and subsequent “approval” regime did. (Adapted from The Mind and The Heart of the Negotiator. It also changed her attitude about being both a professional and a team player in a corporate office. Believe it or not.
and a home theatre. that’s $9.) Yes. three strategies are used. etc.500. let’s see if there are any items we both want. It is used only when each side has several demands. because it can speed up negotiations and produce a more desirable outcome. In essence. Wow! We are off to a good start. thus making it necessary to find a middle ground on each. then those which can be easily traded. This approach is an important tactic. if a buyer negotiates a $500 reduction of a contractor’s bill. Let’s agree to those things. one person’s gain is another’s loss—zero-sum. the fencing. These items often involve money). we both want the sod. Example 1 Brooks and Maureen Wilson have just finished building a new home. 2) exchange items (those that can be easily traded off—one item for another item of equal value. Let’s see.Tactic 23: The “Win-Win” Approach (Identify Issues as Compatible. then the contractor has lost $500 in revenue. 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. or Distributive) The “win-win” approach to negotiations is a basic tradeoff strategy of seeking maximum gains for both sides. Maureen: First.000. 3) distributive items (those items for which the two parties have exactly opposite interests. Brooks: Right. 94 50 Practical Negotiation Tactics . 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). With distributive items. (She looks over the list. For example. They both agreed that this is the maximum they will spend on “extras” before moving in. They each agreed to list the items they want and then to negotiate whether or not they will be purchased. only those with polar-opposite interests that must be divided. Exchange. and finally.). They have a fixed amount of money—$14.
500 left. which I’d like to keep in the bank. Making Counteroffers (The “Give and Take”) 95 . I’d like to spend some of it on lighting upgrades.000 $1. that makes sense.500 $2.200 $200–$2.# 1 Sod Item Cost $1.000! Brooks: Good. which takes another $3.500 $500 $1. Can we split it evenly? Brooks: Okay. and we both get things we want.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. Maureen: No.500 $5. These are all permanent immediate needs.000 $3. $750 for lighting and $750 in the bank.000 $2.000 $5. We have $1. I’ll trade your sidewalk and trees for my whirlpool bath.000 $500 $1.
even in difficult years. Profit-Sharing 5. During that time. Wage Increase 4. both sides exchanged lists of initial demands at their first meeting. 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). The combined lists total thirteen different items: Desired Outcome No. finally agreeing to split the difference on the remaining amount (distributive items). Item Management 3 years None 1% 10% of net For cause only Union 3 years 2% 5% 12% of net For cause only Win-Win Category Compatible Exchange Distributive Exchange Compatible 1. management and union negotiators found that a “winwin” approach to negotiations worked well.Conclusion By taking the time to list all the items each person wanted and their cost estimates. This year. Length of Contract 2. Drug-Testing Program 96 50 Practical Negotiation Tactics . All items to be negotiated and their desired outcome for each item were put in writing for review. Pension Increase 3. 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.
eleven of the thirteen original issues to be negotiated had been agreed to. Next. the negotiators agreed that they had compatible positions on three items: (#1) length of contract. First. Overtime Assignment 8. Shift Differential 11. Because they held opposite positions on these issues. and removed from the table. Finally. signed. Health Insurance Employees pay 20% Continue cur. This gave members of both sides a sense of accomplishment as they began to discuss the remaining two issues for which they must find a middle ground. and the union clothing allowance proposal (#13) for the management funeral leave proposal (#8).Voluntary ity 2 days Continue current provision 10% 10% No provision $50/month 3 days Continue cur. one Making Counteroffers (The “Give and Take”) 97 . they exchanged the economic issues of approximately equal cost: the union pension increase proposal (#2) for the management shift differential (#10).Distributive rent program co-pay Exchange Exchange 7. and (#9) to continue the often-discussed no strike/no lockout provision. (#5) a new drug testing program. the management profit sharing plan (#4) was exchanged for the union overtime assignment plan (#7). They proceeded to draft the language to settle these issues. At this point. Paid Funeral Leave 9. they accepted the union job security proposal (#12) in exchange for the management subcontracting proposal (#11). No Strike/No Lockout 10. Next.6. they began to trade off the exchange issues of similar value and nature.Compatible rent provision 15% Exchange 15% No layoff provision $100/month Exchange Exchange Exchange In their second meeting. Subcontracting 12. Job Security 13. Clothing Allowance Based on senior.
negotiations begin on a positive “win-win” note. 98 50 Practical Negotiation Tactics . 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. or distributive so that the negotiations can begin in an organized manner. exchange. but a middle ground was eventually found on each and negotiations ended. Sometimes the classic “split-the-difference” method is helpful in locating a middle ground. These two distributive issues—wages (#1) and health insurance (#6)—were the most challenging to settle.side’s gain is the other’s loss. A middle ground often must be found on each of these distributive issues if you are to reach an agreement. Both sides first agree that all issues to be discussed will indeed be listed and openly discussed. The tactic offers several advantages: First. when you agree on the items where both parties have similar desired outcomes. but it can be very effective when a negotiation situation involves several issues. when you exchange items so that each party achieves their desired outcome on one of the two. Conclusion This tactic is simple. They then identify each as compatible. if both parties start from reasonable positions. you can use the process to settle many of the other issues on the table. Third. Second.
do not offer a counterproposal right away. Rob: Wait a minute. Mutual respect must be part of the negotiation process. I’m not interested in a curfew. Here is how the last issue was handled: Okay. each side is expected to put an offer on the table. even if you aren’t going to accept their offer. will make your opponent feel good about the process. They agreed on which part of the room each would have. Rob stays busy all day and evening with other activities. and refrigerator. stereo. Rob: Making Counteroffers (The “Give and Take”) 99 .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. and can help you reach your goal. and studies late into the night. last item: I’d like it quiet in the room at night. and on what would be considered acceptable “sharing” of each other’s junk food supplies. 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. Jasper studies during the day and early evening and likes to stay up very late watching TV and visiting with friends. Let me finish. the location of the TV. so he wants a quiet room late at night. This isn’t high school. and from a strategic standpoint. Example 1 Jasper and Rob met when they were assigned to the same dorm room their freshman year in college. and looks like you are belittling them. Since they didn’t know each other well. So when’s a good time? Jasper: (without hesitation) No way. 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. Waiting a respectful amount of time to counter. you know. The final issue had to do with “lights out” and quiet times for studying. It is especially important that you do two things: take your time before rejecting any offer from the other side.
No agreement was reached. Rob: I’m going to look for a new roommate!! Jasper: Fine!! Conclusion It was clear that neither Rob nor Jasper was seriously considering the requests and suggestions of the other person. Jasper: (without taking a breath) At best. curfew on TV and other noise every night. and that’s not negotiable. c) a formal “meeting” with plant manager if the matter is not resolved in 10 days. and that’s it. Under ABC ‘s contract with the union. Jasper: Midnight. Failure of both young men to allow one another to have their proposal considered caused the relationship to break down.m. The appeals procedure would have to be altered to reflect the restructuring. is all I’ll consider. I want a 10:30 p. but changed his mind when he saw Jasper’s attitude. employee grievances had to go through four levels of supervisory review and appeal: a) verbal complaint to the non-union crew leader.Rob: (Rob was about to suggest midnight on Mondays through Thursdays. Neither side anticipates that there would be 100 50 Practical Negotiation Tactics . Rob: (there is no hesitation in this voice) No. b) written complaint to a floor manager if the matter is not resolved in 5 days. 10:30 p. the positions of non-union crew leader and floor manager would both be eliminated. and the union foreman would report directly to the plant manager. and d) a hearing with company owner if the matter is not resolved in 20 days.m. Example 2 ABC Company’s management was being restructured and compressed in order to facilitate its new “just-in-time” manufacturing philosophy. midnight during the week is the only thing I’ll consider.) Listen. The union contract required that management renegotiate this change in the grievance procedure with the union. Under the restructuring.
this redraft is a very simple change to the contract. Company: Here’s the new draft of the grievance procedure. The union was prepared to accept the plant manager’s position as final. After initial pleasantries were exchanged. We think that this is an opportunity to eliminate some of the adversarial aspects of the grievance procedure. the employee and the foreman would meet with the plant manager and attempt to resolve it. but to dictate. Company: (rather abruptly) Let’s not drag this out. Union: You obviously didn’t come here to negotiate. our grievances often signal to management that there are real problems on the shop floor.) We’re just not happy that you are proposing a Making Counteroffers (The “Give and Take”) 101 . and I’m certain your members will be okay with it. because those management layers are gone. We’d like you to consider the plant manager’s role as a problem-solver. Union: As you know. no one can complain about that. rather than go on to appeal it to the company owner. and everything else stays the same.any objection to the change. he/she can take the grievance to the plant owner for a hearing. and began the negotiation session concerning the grievance procedure. We just cut out two steps. If the union foreman felt that the grievance had merit. Union: Hold on. If in 20 days he/she has not been satisfied. 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. An aggrieved employee can make a request for a meeting with the plant manager. We’ve simply eliminated the first two steps. (Note: An attitude change sets in. Our guys are prepared to accept a shorter grievance procedure if we can find a way to ensure that you’ll take our grievance issues seriously. Certainly. ABC Company’s negotiator explained the management changes soon to be implemented. The redraft is simple and straightforward. We’ve got a couple of alternative models for you to consider. rather than as a judge on the merits of the grievance. In fact.
After a cooling off period. This time. You can’t be serious. and we’ll strike if we have to.two-step grievance procedure instead of a four-step procedure. the two parties did meet again. rather than in the 35 days the current system provides. 102 50 Practical Negotiation Tactics . and actually accepted a three-step procedure. to prevent any change! Company: (surprised) What? Why would you object to this? Your guys will get a final decision in 20 days. Union: We’re very serious. We’ll see you on the picket line. Conclusion ABC Company’s failure to take adequate time to consider the union’s offer or even act as if it was considering the offer prolonged the negotiations unnecessarily. the company entertained the ideas the union had tried to propose before.
Bill’s family won. we’ll get to our side. Nancy: Sue. one sister. They flipped a coin to see who “got” them and the new baby this year. Sue’s family (parents. Example 1 Sue and Bill have been married four years. If you are flexible. you can adjust your demands or goals to include such new ideas.Tactic 25: Be Flexible A negotiation begins with both parties having some idea of where they hope to end up. Sue’s sister Nancy called her to talk her into coming anyway. Making Counteroffers (The “Give and Take”) 103 . and the baby aren’t coming for Thanksgiving dinner this year—that you’re going to Bill’s parents’ house. Bill’s family (parents. They’ve done the research. Be open minded. and identified the range of options they feel comfortable with negotiating. and at least five aunts and uncles) ate around 7:00 p. it’s just too much to do both.m. Bill.m. Sue and Bill decided that they had to begin alternating their Thanksgiving Day visits between the two families. The couple used to have Thanksgiving dinner at both families’ homes. and Sue called her mother to let her know that they would not be coming for Thanksgiving dinner this year. and we’re really not able to enjoy either one. Even before the baby’s arrival. their spouses. four brothers. and now have a new baby girl. and ten nieces and nephews) always ate around 5:00 p. Next year. 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). 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). two sisters. Mom says you. successful negotiators remain flexible because new solutions to old problems often surface during a negotiation. established goals. and do not dismiss something said by your opponent just because it came from the opponent. two brothers. Sue: Yes. But after the negotiation gets started.
she suggested a unique alternative. Celebrating the next day seems odd. either. 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. Everyone in Sue’s family liked the idea of celebrating on the Friday after Thanksgiving. Nancy: We’d make it special by all of us being together.m. When that goal looked out of reach. There’s nothing “special” about Friday. Mom’s very upset. but she won’t tell you. Sue: Next year. I thought of asking Mom if she could move dinner up to noon or so. 104 50 Practical Negotiation Tactics . it’s okay with me if you can sell it to everyone else. Conclusion Nancy’s goal when she called Sue was to talk her into coming to their Mom’s Thanksgiving Dinner on Thursday. some people have to work on the Friday after Thanksgiving. Sue: I don’t know. I know that I would rather not do two Thanksgiving dinners on Thursday. Nancy: What if we did Thanksgiving on Friday? Sue: What? Nobody does Thanksgiving on Friday—that’s un-American! Anyway. Thanksgiving is Thursday.. Nancy: If we keep the time at 5:00 p. we’ll come to Mom’s. By being flexible. So that doesn’t work. but then I realized that the rest of you already go to your in-laws earlier in the day. Nancy: I’ll let you know. I mean. the holiday will be over.Nancy: It just won’t be right without you guys. and it became the family’s new tradition. 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 bet everyone could make it on Friday. Bill won the coin toss for this year.
000 a year for operations.5 million is available for distribution to numerous charities. but the principal of the fund can’t be touched. They are meeting with the city to ask that the land be donated by the city for the project. Foundation officals: Oh. we hope to break ground early next year for the new orphan home. Kids’ Home: As you know. 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 . Each year. the foundation’s regular annual grants come to roughly half of their available funds. 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). Estimates for building a new orphan home ranged from $12–$15 million. City: Can’t you borrow the money from a bank to build the facility. the interest income of around $6. but we need some assurance that you will be able to build and operate the orphan home at that location. Kids’ Home: That’s why we brought the foundation’s officials with us. had been negotiating with a foundation to become its major benefactor for a new building and to supplement the organization’s annual operating budget. we’re committed in theory. City officals: We can probably give you the land for free. Kids’ Home is also hoping to get the city to encourage the foundation to commit to full funding of the building project. but we can’t fund all of the $12 or $15 million.Example 2 Kids’ Home. a non-profit organization for orphaned children. depending on the cost of the land. We only have maybe $2 million a year to put toward this charity. 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’re hoping to get a commitment from them to build and help fund the operations of a new facility. Unfortunately (for Kids’ Home). Kids’ Home hoped to get $500.
Why not ask the state to issue no-interest bonds? It can do that for non-profit organizations. Foundation: City: Foundation: Kids’ Home: Conclusion By exploring alternative financing plans suggested by the city. but we’re willing to look at it. We’re not familiar with that program. 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. If we borrowed $15 million at 10% interest. 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’ve never committed our funds to pay back a bank loan.Kids’ Home: Borrowing the money gets very expensive. We wouldn’t want to make such a commitment to a bank. 106 50 Practical Negotiation Tactics . I’ll contact the state tomorrow. We probably would not be able to participate. it could end up costing double that amount. We’re a nonprofit group. and really taxes our ability to raise funds.
Mr. The Jones’ two older children—girls in their early 20’s—often had friends over on Friday and Saturday nights. and trust can only be established if all parties interact truthfully. Jones: We’ve obviously gotten off on the wrong foot. Mr. and often took up all the space along the street in front of the two houses. Making Counteroffers (The “Give and Take”) 107 . However. The Jones family suspected that the Smiths called the police. Example 1 Soon after the Jones family moved in next door to the Smiths.Tactic 26: Keep Few Secrets One of the most difficult skills to master in a negotiation is how to be candid. At the same time. It is perfectly acceptable to say that you are not ready to reveal certain things.m. These parties could get rather loud. you might not want to reveal all of your priorities at first. each side has to know generally what each other wants to accomplish. and often lasted until 2:00 or 3:00 a. the Smiths could count on parking their car directly in front of their house. But the Jones clan had four cars altogether. They asked to meet with the Smiths to talk about these disagreements. and you probably won’t identify your throwaway items or tell your opponent your bottom-line. In order for a negotiation to be successful. the neighbors began to have problems. 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. Smith: We don’t know what you’re talking about. yet not reveal all of your goals and objectives. The Smiths called the police to complain about a late-night party. The Jones family let their tree branches hang over the Smiths’ back fence and rub against the Smiths’ garage roof. The Jones’ two younger children—boys in their mid-teens—hit baseballs into the Smiths’ yard and scared the Smiths’ dog. and asked the officers to cite the Jones kids for parking too close to a corner. Before the Jones family moved into the neighborhood. Successful negotiations depend on trust. it is not acceptable to lie.
they kept it. I guess. Smith: Well. It is really very disturbing. Jones: Well. And the music is to be off at midnight. we thought you might have called the police about our kids’ party and our cars. Smith: No. Muffin. If you can tell us all the things that we have done or are doing that have caused you to be inconvenienced. since you’ve asked. Jones: We’ve already talked to the girls about the parties. the Jones were visited by a city inspector because of a complaint from the Smiths about the tree branches hanging over the fence and brushing against the garage roof.Mr. Mr. yes. the next time the boys were out playing and the ball came into the Smiths’ yard. that wasn’t us. Mr. Mr. In good weather. Smith: Well. Smith: You know that your boys are causing our dog. we would like to work out some solution. we’re good now? Mr. fine. a lot of problems. Almost every day. Jones: Okay. the late-night parties are a problem. Mr. we’d like to be able to park our car in front of our house. Is that everything now? Mr. I’ll talk to the boys and we’ll make sure they play baseball in the park. if they are outside. (A week later. and they won’t be having friends over more than one night a weekend from now on. and was met with the following: Mr. And we’ll make sure none of our cars are parked in front of your house. we have a problem walking long distances in bad weather. but we do know that someone has complained. Smith: Yes. Also. they’re hitting baseballs into our yard. So. Jones came to see what the problem was. At our age. and not in the back yard. Jones: I wish you had mentioned that the last time we talked. In spite of the Smiths’ assurances. then they’ll need to come in at midnight so that their talking doesn’t disturb you. Mr.) 108 50 Practical Negotiation Tactics .
the tree was clearly over the fence. but Neno cannot tell the union this. because they didn’t like a grievance decision. and too bad for you! Conclusion The disagreements and unpleasantness continued until the Smiths finally sold their house and moved into a condominium. Neno’s president and the Union representative met to discuss the walkout. 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. Mr. The British insist that a very strict confidentiality provision be part of the negotiating process. you’ve said that before. Japanese companies often do not “recognize” labor unions the same way U. or the deal is off. You obviously don’t want to be “good neighbors. have labor unions. The union knows that the company is up for sale. Union officials are afraid that a Japanese company might purchase it. the British firm will walk away from the deal. Example 2 Neno Enterprises is a shipping company with extensive global operations. or European companies do.S. Smith: Well. Jones: Sure. Its local headquarters has a union to handle its international shipping. although none of the facilities outside the U.S. You could have seen that yourself. and the deal is close to being final. Unless Neno can get the Union members back to work on Monday. Making Counteroffers (The “Give and Take”) 109 . The union laborers walked off the job on Friday. irate) I can’t believe you people called an inspector on us. But we didn’t call the inspector.” Forget all we’ve agreed to do—we’ll just enjoy the use of our property.Mr. Neno has been negotiating the sale of its business to a British company. Why didn’t you tell us? We can’t read what’s on your mind! Mr. Jones: (at the Smiths’ door. We would have fixed the tree if you had asked.
Union: What aren’t you telling me? A labor shutdown. I’ll forget all about the strike. so the union won’t be hurt by the buyout. But we also need to make it clear that we expect you and whoever might buy your company to take our contract seriously. I need your guys to come back to work on Monday. Have the guys back on Monday. any interruption in our shipping could affect how these buyers look at our business. Our guys are prepared to stay out a lot longer than Monday. Neno: Look. If that’s going to have a bad effect on your being able to sell the business. and if the guys are back on Monday.Neno: You know this is a wildcat strike and that it is in violation of our contract. is still a labor shutdown. You don’t want to mess up our negotiations. We’ve not had a labor shutdown in 20 years. Neno: Look. Union: We think that the grievance decision affects our wages. I promise you. maybe by next Friday or the week after that we’ll have our guys back to work. You really don’t want to do that. If everyone is back on Monday. If they do come back. we will resolve it to your satisfaction by the end of the day. I can’t really be more explicit than that at this time. the slowdown as a result of no one working Saturday and Sunday won’t be noticeable. Neno: All I’m saying is that there is a difference. But if your guys are out past Sunday. I’m certain that if we can sit down and talk next week. no harm-no foul. And one company that is interested has a really good track record on expanding the businesses they buy. then there’s probably no harm done. Therefore. 110 50 Practical Negotiation Tactics . We can’t put up with the kind of decision we got on our grievance. But I have to have everyone back on Monday. it will impact our marketability. We’ll meet with all of the parties on the grievance first thing Monday. It’s not the time to have one. I know it’s not news to you that this business is up for sale. I think it already has. this is a legal strike under the contract. do you? Union: No. Anyone who buys the company will have to honor the contract we have. whether it’s for one weekend or a week. we don’t.
the sale was finalized. But I need to tell my guys that this is important to them as well. and it’s that important to you as well. I’m going to go along with you because you’ve always dealt straight with me. the union was willing to trust Neno—even though he couldn’t tell them everything. But I can’t. while the grievance was being resolved. Because the parties had dealt honestly with each other in the past. as well. Making Counteroffers (The “Give and Take”) 111 . but the British firm will allow them to organize at their foreign locations. we’ll be back to work on Monday. Conclusion On Monday. I can. was the right decision to make.Union: It’s that important to you? Neno: Yes. Neno’s decision to respect his confidentiality agreement and simply tell the union that he couldn’t disclose all the information. If I could. Neno called the union negotiator in and briefed him on the sale. Can you assure me of that? Neno: Yes. Union: Okay. I would be more specific. He told him that it would mean that the union would not only keep its jobs here. rather than make up reasons. Union: Okay.
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”)
I have three hours. (long pause) Felipe: Let me give you three options: A. I can’t help. Felipe: Sorry. B. But when her mother laid out the schedule and gave her alternatives.000 for advertising.Amber: row before your basketball game. keeping her Saturday free.000). Roberto: But it will never generate enough interest if no one knows about it. Use the $5. Roberto: But I need to start the direct mail and newspaper ads within two weeks. or we lose a whole year. I’ll approve $15. Three.000 for advertising. Felipe: Well. I can accept B. Roberto: Well. that is enough time. or C. Clean it after your game.000 in the budget. Example 2 Roberto: I can’t properly advertise this new program with a $5. but I will cut your staff by one part-time person (or $15. I’ll approve $15. Amber resisted the chore she hated. but I will cut your travel budget out completely. but the company president does not share your optimism on this program. At least this way the program will have a chance to succeed! 116 50 Practical Negotiation Tactics .000. Felipe: (Roberto’s supervisor) Sorry. Take it or leave it. but no TV or anything until it’s done! (pause) Okay. she chose the one she most preferred. I’m not going back to him again to discuss this program. and clean it. I’ll find a way to do without one part-time person. Conclusion At first.000 budget! I need at least $20. I’ll do it now.
One alternative. Making Counteroffers (The “Give and Take”) 117 . thus achieving his goal of not having to ask for a larger budget.Conclusion Felipe was willing to think “outside the box.” He offered Roberto three alternatives of equal cost. Roberto believed. which was his goal. would enable him to adequately promote the program.
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. This should have resulted in an automatic promotion and a sizable pay increase. received a glowing report from her boss on her job performance. inviting a response. I very much appreciated the fair job performance review you gave me. Susan knew that she was considered a valued employee and that her boss would want to do the best he could for her. Susan: I hope so. It was 16% less than she had been led to believe she would be getting. the promotion had not yet been approved.Tactic 29: Prolonged Silence When negotiations have hit a critical stage. but one side comes back with a non-negotiable demand. 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. nearing her third year with the company. and the annual merit raise she was getting from the company was the same 3% other employees were receiving. you are a valued employee. 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. I am very disappointed in the company’s decision not to promote me and to limit my merit increase to 3%. he can make an open-ended statement. I have to tell you that while I appreciate what you have done for me. Here’s how the negotiations went. Susan: Mr. Unfortunately. The negotiator for the other side says nothing. and 118 50 Practical Negotiation Tactics . Jones. Example 1 Susan. Jones: I certainly do. She was determined to hold her ground for at least a 13% pay increase and a promotion. You know my commitment to this company. After a few minutes of silence. I think you would agree with me that I have performed well above expectations this past year. If his opponent cannot agree to the demand but does not want to end the negotiations.
Promotions of this type are all but automatic around here. Jones to continue to offer solutions. (says nothing) Or. I must ask you to try to get both. Conclusion Mr. of course I will be glad to do that. if management can see their way to giving you the pay increase now. Once he acknowledged that both items might be awarded sometime in the future. but a pay increase of that size might be more difficult. maybe we can talk about the promotion later in the year. Well. but I don’t think management will be willing to give you an additional 10% pay raise AND a promotion.Jones: Susan: Jones: Susan: Jones: Susan: Jones: Susan: Jones: that I deserve more consideration. Susan’s silence prompted Mr. I suppose I could get the promotion approved with the proper presentation. it could help.or three-year period. I really want you to stay with the company. because I feel my future with the company might be at stake here. If there is some flexibility in your request. and sell it to management that way. I would very much appreciate it if you could ask the company to reconsider. and I think that I really haven’t been dealt with fairly. I could probably find a way to phase it in over a two. Jones went to management and convinced them that they should give Susan the promotion and the 13% raise. Okay? (says nothing) Let me check it out and I’ll get back to you. the company’s refusal to grant them now was a harder position to support. and I’m sure management will agree. Making Counteroffers (The “Give and Take”) 119 . (says nothing) If I can’t get that pay increase approved right now.
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. has colored these negotiations. The mayor’s negotiating representative wanted to complete the negotiations on the expanded agreement. This is how the negotiations went: Town Council Representative: Well. and until she does. but now they’ve got to ask what Madame Mayor’s motivations are. The end of the agreement coincided with the election cycle for the two towns. Town Council Representative: I think you’re wrong. but the officials had hoped to complete the negotiations prior to anyone involved announcing for office. The mayor. 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. her plans really don’t have any bearing on these negotiations. Mayor’s representative: No. Mayor) said that she was considering running for office. Town Council Chair). The office she was thinking about was the office held by her counterpart in the neighboring community (Mr. and were trying to settle on new and expanded areas when one of the elected officials (Ms. The term of the original agreement was nearing its end. I don’t think it’s a problem. My bosses might not have been inclined to expand the agreement anyway. Mr.Example 2 Two local governments entered into a tax-sharing arrangement in order to provide joint services to citizens in a more efficient manner. Also. She has not decided what she’s running for. the people Madame Mayor currently 120 50 Practical Negotiation Tactics . and representatives of the elected officials of the two towns were meeting to renew and possibly expand the agreement. He decided to push for a simple renewal of the original terms. The parties agreed to continue the previous terms of the agreement. by saying that she might run for Chair.
I think we really have to drop back and just propose a renewal of the tax sharing agreement without adding any new items. I’ll go back and tell Madame Mayor your position. 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. I don’t know what her reaction will be.represents have to worry that her desire to switch governments might taint the negotiations. Town Council Representative: (long silence) Mayor’s representative: (after an uncomfortably long silence) Well. and the agreement was renewed with no new provisions. Conclusion By remaining silent. He either had to end the session or figure out what to say to reengage the other side. I hate not to attempt to add some additional areas to the agreement. Mayor’s representative: Well. the Town Council representative’s position prevailed. Town Council Representative: (silence) Mayor’s representative: I think it would look very bad for both of us if we spent all of this time negotiating and we don’t end up with anything new. In the end. Making Counteroffers (The “Give and Take”) 121 .
Obviously.” Avoid making that “necessary concession” too narrow: It should be large enough for both of you to step into comfortably. Madeline. One day.Tactic 30: Always Leave Room for Dessert Negotiating is the art of give-and-take. and began to renovate it as a home and a pottery shop. I have a problem. The reason I built it was so that I could protect my patio. or we will be at an impasse. which an upstream neighbor had built. you should always enter the talks with a good idea of what you are willing to agree to. “I have to have this. the brook was the property line separating her property from a neighboring farm. The property came with three acres of forest alongside a meandering brook. The brook 122 50 Practical Negotiation Tactics . It calls for compromise. Neighbor: Well. after the gazebo had been there for about five months. Joe. 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. had redirected the brook further into her property. 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. She discovered that a rock barrier. Madeline: Hi. in a small clearing. Having an iron-clad demand probably won’t give you enough room to reach an agreement. Example 1 Madeline bought an old farmhouse outside of a small town. Your rock barrier has sent the brook onto my property and it is too close to my gazebo. when one of you might say. she noticed that the brook came within 100 yards of it. You will have to remove the rock barrier. As was sometimes the case in these parts. She went to discuss this problem with the upstream neighbor and had every intention of demanding that the barrier be removed immediately. the brook and rock barrier are on my property. Madeline built a gazebo about 500 yards from the brook. She traced the brook back along its course to see why and where it had changed its path.
My neighbor on the adjacent farm wants to sell part of his property for a housing development. Making Counteroffers (The “Give and Take”) 123 . I can’t have the brook in my house. 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. at least I’ve maintained my property line.extended right up to my back door when the rain was heavy. if the brook is redirected. It might not be necessary to make such a dramatic change. restore her property line. which enabled her to achieve her goals. but I don’t know what I can do about it. Neighbor: I’m sorry. I couldn’t have that. Conclusion Madeline’s objective when she met with her neighbor was simple: Have the rock barrier removed. She left room for a compromise. Madeline: Yes. Also. Madeline: But by diverting the brook. I won’t remove the rock barrier. I understand that. you have not only threatened my gazebo. and allow the neighbor to protect his home. Madeline: Well. 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. This will put these houses right next to me. Neighbor: I can do both of these things. what I need is to protect my property line and my gazebo. What if you removed the barrier for a short time. Then. I ask that you allow an expert to suggest the best way to provide for the diversion of the brook to protect your house and my patio. I’ve lost 400 yards of property on my three acres. By expanding the range of options available to resolve the dispute. and return everything as it was. Madeline was able to protect her gazebo. she widened her range of options. but you’ve changed the boundary line of my property.
Pilots: Look.000.000 (which we reasonably should have expected to pay in premiums) in the pension account now. we know that health insurance premiums might skyrocket. The airline industry is in a slump. then the pension benefits overall will increase by $10. But only a few of our people are close to retirement age. If we invest the $200.000. what they really need is for you to cover the costs of dependent coverage. However. as it has always been.000. Everyone was afraid that the dispute would cause an impasse and a possible strike.000. that would be the minimum increase.000 a year over the next five years? Company: Yes. As best as we can tell. Company: This could not come at a worst time for us. Pilots: So you are projecting that the increase in dependent coverage premiums will average $200. And we cannot afford that $1. 124 50 Practical Negotiation Tactics . the airline paid a total of $200. you are taking a risk on the costs increasing. with all wage and operations issues resolved fairly early. With long-term planning and investments. This is just a cash-flow problem that your members have to understand. This would be a better benefit in the long run.000. and we know that with this new contract term of five years. The company wants to trade paying for dependent coverage for better pension benefits.000. and are willing to keep pension benefits the same.Example 2 The contract negotiations between the pilots and the airline had been going pretty well.000. Over the last five years. Over the next five years. and the premiums for health care just keep going up.000 to cover the premiums for dependent coverage. The pilots want dependent coverage paid for by the company. The projections for the next five years were that these costs would increase to about $1.000 figure. the company can make your pensions much better. dependent coverage could cost us $1. the discussions of the employee benefits package bogged down on the issue of health insurance costs and pension benefits.
however. then those funds will not be available to invest in the pension plan. The health insurance market stabilized. that would be worth it. Pilots: Since the concern is about agreeing to a 5-year commitment without knowing the increases we might have in health insurance costs. The $200. The pilots expanded the range of options. Are you willing to risk not having an opportunity to increase pension benefits? Pilots: Yes. so the decision to be flexible was a good one.000? Once the cap is met. Conclusion The company was committed to limiting its exposure to $200. the company will not be expected to give us this benefit.000. and the pilots knew what to ask for when the contract expired. if they were that high. by agreeing to let the company cap its exposure for dependent health coverage. can we agree to a year-to-year agreement on dependent coverage.000 the first year on the premiums. If we can get two or even three years out of the $200. The dependent coverage is more important to us now than the pension benefits. with a cap of $200. we are.000 available. or invest in the pension plan? Company: Yes.000 actually carried them through four years.000 to either pay one year of the premiums.Pilots: But you do have the $200. Company: Then it’s okay with us. Company: If the company spends the $200. It initially believed that the only option was to put that money into pension benefits. Making Counteroffers (The “Give and Take”) 125 .
and compare it to your strategic objective. if I can give you this car with a $300 monthly payment. If you are on the receiving end of such a tactic. it’s a deal? 126 50 Practical Negotiation Tactics . but the Consumer Price Index has not gone up 150%—nor has my paycheck! Saleswoman: So. Buyer: Way too much! Saleswoman: Well.” and “low monthly rates” are examples of the salami tactic. Phrases such as “for only pennies a day. $45. I recall the day you drove it out of here. I love this car. I guess it would be around $600 per month.” “affordable weekly payments. what monthly payment did you have in mind? Buyer: More like $300 per month. Saleswoman: With your 740 in trade. be sure to add up the total cost.500! Saleswoman: Yes. do you want to look at something else? Buyer: No. Example 1 Car buyer: What. I just can’t imagine the monthly payment on a $45. but that was several years ago.” Salesmen use this standard tactic with “big ticket” items: They present the total cost in small enough pieces to sound reasonable to the other party.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. Saleswoman: I’ll be right back.… (20 minutes later) Saleswoman: So. Buyer: Yes.000 car.000 for a Volvo? I bought the one I’m driving for $19.
Sure. But my neighbor pays $39. Saleswoman: Simple. I can’t discuss another client’s account. with your car and $6. I can’t afford that much.00 per month.00 per month for your service.” she had him—she worked around the $300 slices. Great! So. You can do that. Example 2 Cable representative: Owner: Cable representative: Owner: Cable representative: Owner: Cable representative: Owner: Cable representative: Owner: Yes. do you want HBO? How much? $5. Making Counteroffers (The “Give and Take”) 127 . but let me see the numbers. I can afford $6. down payment. as promised.000 down and $300 a month! Conclusion The saleswoman knew the buyer was suffering from “sticker shock. Instead of a three-year lease.000 down. Once the buyer volunteered that $300 was an affordable “slice.00 per month. Let’s see.” She decided to cut the $45. and added the trade-in. do you want Disney? Yes. (looks at the numbers) That looks good.Buyer: I don’t see how you can do that. and payout slices to reach the total price she wanted.000 price into “slices” the buyer thought reasonable. you can get the Disney channel for only $5. it will be a five-year lease. can’t you? Buyer: Yes.99 per month. but what else must I buy? Only the basic service for $8.
00 per month was far too much. 128 50 Practical Negotiation Tactics . 2.00! Why? Because he judged the per-slice price to be reasonable. Any other kids’ channels? Yes. But that’s all! Then we’ll hook you up on Monday. I really want the sports channels. and my wife wants the old movies. The total is $38. 2? How much? $8.99 per month. What about the music package? Yes. That’s $5. Disney is for the kids! The sports channels are for me. instead of one total amount. and probably felt much better about the total negotiated package because it was presented in modest individual slices. That’s another $5.00 a month. and SI 1. 3. but he agreed to six “salami slices” for a total of $38. Thanks.Cable representative: Owner: Cable representative: Owner: Cable representative: Owner: Cable representative: Owner: Cable representative: Owner: Cable representative: Owner: The Sports Combo–ESPN 1. they asked about the Cartoon Network. Conclusion The owner thought his neighbor’s service at $39.00. Yeah.00 per month. we had that before. Okay. Great.
today. and the use of humor. Tactic #33 (The Bluff) is a classic pressure tactic. Applying Pressure 129 . an unexpected element of humor can break the tension and encourage a person to calmly get back to the issues. In some cases. When both sides believe that each has equally strong positions. but others will walk out the door. Other less-obvious pressure tactics include Tactic #37 (Divide and Conquer). It should be used with caution: It can end negotiations immediately. so are you ready to make a deal? This might convince a few buyers. “I can only guarantee this price until 6:00 p. For example.m. however. 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. but in tense. it is effective. Tactic #36 (The Element of Surprise) can catch an opponent off-guard and cause stalled negotiations to move forward. but it can be used effectively when one party clearly has an edge. and it can destroy your credibility. which can be successful if the opposing team has two or more members who hold different views of an issue. Tactic #35 (Applying Excessive Pressure) is a similar tactic that should also be used with caution.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. angry negotiations. 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). the traditional car salesperson might tell the buyer. turned off by the tactic. Humor might not look like pressure.
Lacey: I know. together and separately. I don’t know. he and Chloe wanted to buy out Don’s and Abby’s interest. and we’ll be moving south in the next month or so. but it is not a good idea to exaggerate what you are offering or what you are giving up. We’d hate to give it up. and we need to talk to you about how we can buy you guys out. Such exaggerations are easily revealed or uncovered. Example 1 Don and Abby went in on the purchase of a sailboat with their friends Lacey and Chloe. I can’t tell you how many times Abby has said how happy she is that we have the sailboat. big news! I’ve been promoted. And we don’t want to be unfair. Lacey and Chloe didn’t know that Don and Abby were. Don: Wow. When Lacey found out that his employer was transferring him to another city farther down the coast. Lacey. Chloe and I would like to take the sailboat with us. getting a divorce and each moving away (and would have no more use for the sailboat). Abby really loves that boat. Don and Abby now use it less and less. but Don. in fact. In the last couple of years. 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.Tactic 32: Don’t Exaggerate It’s always acceptable in negotiations to put your best case forward and present your position vigorously. boat prices have really gone up. I think Chloe and I would be willing to pay more than just the money you guys put into it. Don: Absolutely. Lacey: Don. and they will weaken your credibility. Your opponent will consider you untrustworthy and might even be insulted by your attitude. Although I do think there ought to be some consideration for the two years you had use of the boat. The two couples used the sailboat a lot the first couple of years. It 130 50 Practical Negotiation Tactics .
Let me talk to her. Don: Lacey. We’ll be leaving here for the Midwest. Abby is having this conversation with Chloe) Chloe: Abby. and I’ll get back to you. I think it would be fair to pay you and Abby half of what you originally put into the boat for your 50% share. though it’s not so happy. I’ll be glad never to see it again. the boat has depreciated. and neither of us put much in for upkeep. Chloe: Oh. It’s about time now for some major investment. Lacey: Cut it out. It just reminds me of how happy Don and I used to be. (Around the same time. but separately. and we’re moving farther south. I’ve been thinking. I’m surprised by your attitude. If Don had not exaggerated the importance of the boat and dealt with Lacey honestly. Abby: Well. I was afraid something was going on when you all-butstopped joining us on the boat.is just about the most important thing we own. Don. I’m sorry. Abby: That boat. Don and I are getting a divorce. I thought you understood how important this boat is to Abby.) Lacey: Don. After all. Abby told Chloe about the divorce and about how she never wants to see the boat again. which you would have to share if you want to retain half-ownership. Lacey and Don’s negotiations changed considerably. I have big news too. 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. (After Lacey and Chloe had a chance to talk. Applying Pressure 131 . big news!! Don got his promotion. he likely would have found himself in a stronger negotiating position.
I’ll be looking to you to make some major wage concessions on this upcoming contract. I’m afraid that with this current information. our production line changes at least three times a year. Union negotiator: The stock price might be down right now.Example 2 Aimes Manufacturing had experienced major ups and downs in the price of its stock for the last two years. and that the economy is strong. in this global market. we will need to make drastic cuts in our operating costs just to survive. 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 can’t see how today’s numbers really impact the long-term profitability of this company. Here’s how these negotiations went: Company president: Well. Company president: Well. but this has been such a crazy situation. I’ll have to show them 132 50 Practical Negotiation Tactics . The current stock price is the lowest it has ever been. I’ll be going back to them as soon as next week. 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. I’m telling you the stock price is having a huge impact on us already. And as you know. I read in the papers every day that the market is still strong. in fact. I think you’ll have to agree with me that wage increases in this next contract will not be available. the situation in the stock market is not good. they will make their decision based on a review of the stock price that day. Telling me there’ll be no wage increase and asking for wage concessions now is a little premature.
let’s talk about it. here’s what happened. So. Applying Pressure 133 . When negotiations resumed. okay. We think this company is very healthy and can withstand the temporary downturn. Union negotiator: I know that’s what you told me. Give me your proposal for wage concessions. 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. no concessions! In fact. but I checked it out and it’s not totally true. this week’s price would have little or no effect on your ability to get a Letter of Credit from the bank. The union became hardened in its position that the employees needed wage increases in the new contract. (In the interim. and the union ended up with a substantial increase in their contract. Company president: What? I thought you understood that it is essential that we get concessions on this if we want to stay afloat. but your proposal to cut wages is just not going to fly. If the stock goes up next week. we’d like to reopen talks on next year’s pay increase. the union checked into the Letter of Credit transaction with some experts in banking. Let’s get back together next week.that we’ve cut expenses to counter the losses in the stock market. Union negotiator: Well. When the market took a swing up during the negotiations.) Union negotiator: I’m sorry. They told union officials that it would be very rare for a bank to make its decision solely on stock price. the company’s position was weakened even more. he lost the trust of the union. Conclusion Because the company’s president over-emphasized the impact of the market on the company. Company president: All right. If you put it that way.
I guess I’m just surprised. 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. Charlene. yeah. and I really wanted to see the new Lenny Bruce movie. If one party threatens to walk out of the negotiations if a demand isn’t agreed to. I called Charlene and she was available. She knew that if she made such a demand and threatened to leave him unless he made a commitment. and they really have no intentions of doing so. you will have lost credibility with your opponent. but I really am. Poker players know all-too-well-that bluffing can be very costly. There is a chance that the tactic will work and that both sides will agree to the proposal on the table. I knew you had a class. I really hate it that you chose to see the movie with Charlene. but Christy thought the relationship was heading in that direction. Christy realized that asking for a commitment from Tom at this stage would be a very serious discussion. are you? Christy: I don’t want to be. Tom: Oh.Tactic 33: Bluff! Bluff with caution. You’re not upset about that. Sara said she saw you at the movies with Charlene yesterday. either. Example 1 Christy and Tom had been dating for about a year. and she didn’t think Tom had. The couple had not discussed marriage. Christy was surprised and hurt when a friend of hers mentioned that she had seen Tom at the movies with his former girlfriend. it might backfire. This can come back to haunt you. 134 50 Practical Negotiation Tactics . Here’s how the discussion went: Christy: Tom. Christy thought that their relationship was exclusive: She hadn’t gone out with anyone else. they are bluffing. We don’t have that much free time together. Both of them were still in graduate school and worked full-time. If you subsequently agree to begin talks again.
Applying Pressure 135 . Christy would have had to decide whether or not she was indeed bluffing or if she would really end their relationship. I’m willing to risk losing you.Tom: She’s a friend who happens to be a girl. It’s made me realize that I want us to have an exclusive relationship. Tom: You’re serious? It’s that important to you? Christy: Yes. Tom: Okay. but very little progress had been made. I need to have your commitment that you won’t do that. Example 2 Nexon and its union had been negotiating a new contract for the past couple of weeks. if you can’t make that kind of commitment. he had to make a commitment or risk losing her. and at first he thought she might bluffing. It really wasn’t a “date”—we just saw the same movie together. Actually. I won’t go out with any woman friend. I just thought of her because I knew you weren’t available. Conclusion Tom didn’t want to lose Christy. Christy: I just can’t see it that way. I certainly don’t want to lose you. She convinced Tom that her feelings were strong. 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. Going to a movie with one of them to me is the same as going to the movies with one of my male buddies. she paid her own way. so he didn’t call her bluff. I’m not “dating” anyone else. He believed she was sincere. Tom: I have friends of long standing who are women. Since he wasn’t sure about that. If Tom had “called” Christy’s bluff. then I’m afraid I want us to stop seeing each other. If that’s not possible. The union negotiators. It is.
Here is what happened at the next negotiations session: Nexon: I’m sorry. but the company cannot offer the same benefits to the parttime workers as it offers to the full-time workers. much less today. Second. Union: You don’t seem to understand. it will cost too much. Nexon: We’ve got lots of issues to discuss. then all of our other demands will change. 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. We need some agreement on this today. This is a critical issue to us. Nexon: I’m sorry. If we’re not able to reach agreement on this. First. or else we’ll be asking the membership to strike. We’re not going to reach agreement on this at all. and try and reach agreement on the cost-of-living increase you’re proposing? Union: No.believing that Nexon would not risk a strike. The union members ended up voting not to strike at this time. but working without benefits is simply not acceptable. This is something we just have to have. Union: You’re wrong. Another bargaining session was scheduled. And I don’t believe you’re going to go call for a strike over this. Nexon negotiators did not believe that the workers would actually strike this early in the negotiations. 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 need an answer today.) 136 50 Practical Negotiation Tactics . Why don’t we put this one aside for now. we’re really prepared to go the distance on this benefits issue. (The union negotiating team left the bargaining session and called for an emergency meeting with all union members. we want the part-time workers to apply for and fill fulltime positions as they become available.
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
It’s easy to prediet the outcome in collective bargaining talks if one side is clearly in a very favorable position. because this is the busiest time for that industry.” Example 1 We have all been at the mercy of someone who uses pressure bargaining. when one side has “leverage” over the other. for example. and was forced to pay whatever they demanded. while the other is not—that is. the guy was in no position to dicker over the price of the repair. Many companies sell “tune ups” and routine seasonal checks to keep their people busy all year. The same kind of thing happened a couple of years before that: In the middle of August. Example 2 Let’s face it: Sometimes one party holds all the cards. its union has the advantage in the weeks just before Christmas. If the employer is a shipping and express mail company. once had to call a plumber in for emergency repairs. his air-conditioning unit went out. On the other hand.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. not blessed with many household repair skills. Since his toilet had overflowed and water was continuing to run all over the floor. He was at the mercy of the company that could install an appropriate unit the fastest. there were times when there was no pressure and no emergency. Since the heating and air conditioning company held no leverage over him. It is sometimes referred to as “pressure bargaining. he was able to successfully bargain for other services. such as the advantage of time. The owners of professional sports Applying Pressure 141 . Try bargaining with a plumber! This homeowner. Unions can strike at any time to achieve their goals if they have some leverage. They are more flexible on price and service when they know the consumer is not under any pressure to buy the service being offered.
This gives it the upper hand in negotiating with employees. it is the union’s turn to hold firm on its demand). Many labor contracts were agreed to when unemployment and inflation were high and employees felt pressured to accept the demands of the employer. Other employers find themselves in situations that actually reverse the leverage (when. for example. 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. she has leverage and can more likely hold firm on her price. there are likely to be long-term repercussions.teams are generally more vulnerable to pressure from the players’ union several days before the season begins. What goes around comes around. then you are in a position where you can set reasonable demands on wages. The employees had no power to resist the demands of the employer. If you have a special skill that an employer needs and few others have that skill. benefits. can suffer repercussions in the form of sabotage. either individually or through collective bargaining. but before you choose such a tactic. the employer has the advantage: a supply of jobs. A note of caution: Circumstances in one round of negotiations might give one side an advantage. despite strong resistance. If so. unemployment is low and jobs are plentiful. When the employer proposed adding duties to the job classifications. however. but they are less willing to negotiate several months ahead. Employers who refuse to give in on issues of high importance to employees and exert pressure on unions to accept their terms. low employee motivation.) The leverage of supply is also very powerful: If a jeweler has an exclusive contract to sell a ring everyone wants. he didn’t have to be flexible because the employees believed that they had no alternatives. etc. and other undesired outcomes. (Team owners are notoriously unpredictable. will what goes around come around? 142 50 Practical Negotiation Tactics . When one side places undue pressure on the other side. consider whether or not the two parties will likely meet again in the future to negotiate. if the unemployment rate is high and jobs are few.
The doll can be shared. and I can’t stand it. Susie: Okay. the fighting starts up again. Andrea: Okay. I can’t drive if you keep this up. Consider making a suggestion or a proposal that completely surprises your opponent. but use this tactic judiciously. Why? A sudden surprise can disrupt the dynamics of a negotiation.) Applying Pressure 143 . Susie: The doll belongs to both of us.Tactic 36: Surprise! Never underestimate the power of surprise—particularly when things have bogged down and both sides are simply repeating their positions without making any headway. the argument is over the doll’s shoes. and here’s how the “negotiations” went: Dad: You two stop fighting. Almost from the beginning of the three-hour drive. Andrea had taken them off the doll. the girls had been fussy. You’re driving me nuts. you have it this part of the trip. I took it out of the box. (Their dad pulls to the side of the road and turns to face them in the back seat. Andrea. About an hour into the drive. Tell Susie to let me have it. Just share the doll. Their dad tried to reason with them. Andrea: The doll is mine. They stopped for lunch at a fast-food restaurant and shared a children’s meal that came with a small doll. (In a few minutes. because you will probably only get to use it once. This time. the little girls began to fight over the doll. you have it when we drive home. Example 1 A father and his two daughters were on their way to visit the grandparents. and Susie.) Dad: Stop it right now. We’ve got a long ride ahead of us. Mom said so. Just because you saw it first doesn’t make it yours. and Susie hid them under the seat.
but nothing else up to that point was working. Here’s how the meeting went: Auditor: I appreciate a chance to talk to you about this litigation. charging that they breached their duty in their handling these funds. Conclusion Dad’s use of a “surprise” tactic was extreme. to no avail. Susie: Daddy didn’t say anything about the shoes. I want the shoes. Dolly has to have her shoes. I think I have acted properly. The litigation itself had been going on for more than three years. He initiated the litigation against the local school board members and several banks that invested the money for the board. Daddy said I got the doll on the way to Grandma’s house. 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. so it was worth the risk. and that they had invested and spent the tax dollars wisely. Finally. Both Andrea and Susie were so shocked by their dad’s action. they didn’t say another word. and I hope I can convince you of that. The defendants contended that the auditor’s actions were politically motivated. 144 50 Practical Negotiation Tactics . at great expense to the auditor’s office and the school board. Dad tried correcting them a few more times. in fact. The local newspaper was prepared to urge the auditor to end the litigation. Dolly doesn’t need shoes on in the car. (They continued to argue and whine and pinch each other. The tactic was so successful. He grabbed it and threw it out the window. The auditor’s job was to make sure that tax dollars collected for the local education system were appropriately handled. She can have them later.) Dad: Now there’s no more fighting over the doll. and reached back for the doll. The auditor asked to meet with the editor to explain his position. he slowed down.Andrea: Give me the shoes back.
Applying Pressure 145 . This morning. Editor: Well. I guess we’re finished here. but recommended that the parties reach a settlement. the bank would not have done that had we not proven our case. and a significant amount of money will go toward the tax fund. one of the banks settled with my office. Here are the papers. The school board members make a very good argument that their practices regarding how the funds were expended are not just adequate. That’s really the reason this has gone on so long. but actually superior to some other entities you supervise. They’ve been making that same argument from the beginning. but I have to warn you that from what I’ve seen and heard so far. and it is costing your office money and good will. They are very persuasive that this is just a political battle. From what I can see. 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. Obviously. Thank you for coming in. Auditor: Well. Editor: (surprised) Really? They settled? This is public information? Auditor: Yes. I think I have something here that will convince you otherwise. Conclusion The editor wrote an editorial urging a resolution for the good of the community. perhaps you should just cut your losses—and just drop the suit. I really think the community would be better off. We believe the other defendants will soon follow suit. as a matter of fact. Auditor: I appreciate their arguments. rather than drop the case. The auditor successfully used the element of surprise in announcing the settlement and thus changed the direction of the editorial. there’s just nothing to back up your allegations. Your reporters will probably want to follow up on it.Editor: I’m certainly willing to listen. Editor: Well. this case needs to be dropped.
If the negotiating team sitting across the table from you seems to be divided on a subject or one of the team members seems to be more sympathetic to your arguments. you might be able to dilute their power by identifying their different interests and addressing them separately. I’d 146 50 Practical Negotiation Tactics . Dad. Example 1 Tina’s husband Mike wants to buy a pool table for their family room. and a car is more important to him than a pool table. Kevin: I don’t really care about a pool table. Tina: What do you mean? Mike: When Kevin and his friends get their licenses. Tina and their son Kevin are against the idea. Mike: I know. try to focus on that subject or address that member directly to get them to be more amenable to your proposal. Mike knows he needs to get either his wife or his son on his side. If the other side involves more than one person. I can remember spending hours playing with my friends and family when I was growing up. night after night. 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. but I think it will get a lot of use. Kevin is against it because he is turning 16 years-old soon.Tactic 37: Divide and Conquer Certain negotiations lend themselves to a divide-and-conquer tactic. I know we’ll all enjoy it. especially Kevin. Tina: I’m really against this pool table idea. I want to talk about a car! Mike: It’s really not one or the other. although getting your license and getting a pool table are connected. they’ll be mobile! The last thing I want is for them to be out cruising around. Kevin: So am I.
some. 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. They bought the pool table. then maybe it’s not such a bad idea.like them to hang out here more. Wylma: Tom. received it without comment. But I’m not going to hang out here all the time. who was studying the company’s financial records for the team) became uncomfortable when he heard Tom’s demand. Tom. I thought we were making real progress. Instead of both opposing the idea. only Kevin did. she joined his side of the debate. the head of the union negotiating team. Once Mike convinced Tina of the idea’s merits. Here’s how the negotiations went. and Kevin and his friends use it often. A pool table could attract them here. I’m surprised. Kevin. A number of contract changes have already been worked out and Wylma. Conclusion Mike found an argument that divided Tina and Kevin. She noticed that Jim (another member of the union’s negotiating team. Tina: Well. Mike: I really do. What happened? Applying Pressure 147 . Example 2 Negotiations on a new union contract seemed to be going quite smoothly. has just presented the company’s initial wage offer. the chief negotiator for the company. 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. don’t you think you guys would use it? Kevin: I guess so.
but he added some workplace changes that Wylma was comfortable negotiating. Wylma: Let’s take a break. This is just what we think is fair. forcing them to reconsider their demand. But Tom. these are our actual accounting figures. (When they resumed. you’ve seen our sales projections and production costs. these are accurate. Jim? Jim: Yes. When the negotiations began again. Right. as Jim can point out to you.) Wylma: Now Tom. Wylma: Jim. I think you need to rethink your demand. Tom: We don’t think so. Wylma: Tom. you’ve heard our demand.Tom: Wylma: Nothing happened. Do you think this is reasonable? Jim: (looking uncomfortable) Well. Your demand is totally unreasonable. Let’s start again tomorrow morning. Tom had reduced his wage demand significantly. Conclusion Wylma’s appeal to Jim’s knowledge of the actual financial situation of the company worked to divide the union’s negotiating team. 148 50 Practical Negotiation Tactics . Wylma distributed copies of financial data that showed the company’s current condition. you certainly are aware of our financial situation.
married. but it is really important to me. You are almost 40 years old. That will just make a bad situation worse. and it makes me very sad. but as the children grew up and had families of their own. I don’t feel Christmas in the way I used to. and had children. Sometimes the argument got heated. Ever since Mom and Dad died. especially between Madison and Cory. get over it. Applying Pressure 149 . Stay alert and watch for clues that a negotiation is about to get out of hand. When are you going to grow up? Madison: (very emotional) I can’t believe you can say that to me! Christmas should mean something! Cory: It’s just silly for adults to exchange presents. Madison: Okay. so pressure grew to draw names and exchange gifts. I want to say something. some of the siblings decided they liked giving presents to one another. Tempers flare and people say things they shouldn’t out of anger or frustration. it was easy to agree on just giving presents to the children. Cory: Madison. so you can find a way to quickly neutralize it.Tactic 38: Break the Tension Tension is inevitable in most negotiations. It was a tradition in the Jones family to spend Thanksgiving dinner arguing about how the family wanted to celebrate Christmas. Example 1 The four Jones kids grew up. but the thought that matters. the oldest and youngest Jones children. so what’s the point? I don’t need another tie! Madison: It’s not the gift. We can’t afford to buy each other things we really need. Humor often works to break the tension of the room. When all of their children were small. but it should never be at anybody’s personal expense. 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.
: Julie: Dara: Mr. not the Prince. they were the last children left in the playroom for the remaining two hours of the day. 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. The day-care worker wanted to take them outside for a while so that he could visit with his friend. C. Example 1 Julie and Dara both attend a local preschool.: Julie: Dara: Julie: Girls. who was outside with older children. Isn’t it “later” yet? Right now would be a good time to go outside. When that point is reached.” but she needed Dara to play with her. Both of the little girls liked to play ball when they were outside. Mr. If there is resistance to compromise. Dara.” Dara. they would have to play ball with older children. Okay. was ready to color. 154 50 Practical Negotiation Tactics . If I can be the Princess. and that doesn’t happen without compromise. One day. C. however. Then we can color. the exchange will be between things of equal value. (In a successful negotiation. At some point. each side must decide whether or not one more compromise will produce an agreement that they will later regret. Julie wanted to play “dress-up.” Can I color now? You said we would color later. it is better not to compromise. I want to play “Princess” and I want Dara to be the “Prince. or maybe tomorrow. how about going out to the yard for a while? You can swing or play ball. the individual might be afraid that the exchange isn’t equitable). but since the other children in their room were not there. I want to play “Prince and Princess.Tactic 39: Compromise Negotiations are successful when all parties walk away with an agreement they are satisfied with. don’t you want to play? We could color before your mom comes.
there will be an overall increase in traffic coming through the neighborhood and vehicles will be turning into and leaving the parking lot. Mr. The existing parking lot didn’t meet the current parking standards for that size theater. The owner decided to try for a variance. C. and teenagers attracted by Making Progress 155 . wouldn’t you like to go outside first? After you swing for a while or play ball. and they still had time to color. failed to offer the children something that was as important as the plans they had made. We don’t want to go outside. 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. C. 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. When his variance application was made public. you can come back in and play “Prince and Princess. They did all the compromising they were willing to do. The neighbors: The neighborhood has four concerns: Theater patrons will be taking up scarce on-street parking spaces. We want to play dress-up and then color. or apply for a variance.Mr.” No. Conclusion The children stayed inside and played dress-up.: Julie: Hey. however. neighbors became concerned about the changes to the mall. 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. The owner and a small group of neighbors met to talk about these problems. According to the city’s zoning laws. the owner had to supply additional parking. the parking lot will start to look trashy.
You could have all of the traffic enter from the north lot.the theater will start to hang around and maybe wander around our yards at night. Right now. With the Comedy Club and the grocery store on that end. The neighbors: Owner: 156 50 Practical Negotiation Tactics . as you said. not having direct access to the south lot from the street would be unworkable. the north lot is used more. the closest parking to it is along Elm Street. but it’s not ever full. only when that lot is full would cars come around the mall and park on the south side. I could put a privacy fence along the east and west—at the backs of your yards. Many of our homes back up to that lot. with your plans to put the entrance of the theater on the east side of the mall. And. We’d like you to prohibit cars from entering or leaving from the south lot. The fence would shield neighbors from the lights from the vehicles and block the walking access through the alley. What if I changed the entrance to the middle of the lot? That way. So. if I agree to move the theater entrance to the south side. I’m afraid. We’d really like to block off that cut-through and have the theater face the south. Not having in and out traffic to the south of the mall is just not very practical. Right now. In fact. lights in and out at night can be very annoying. and break in his door. and we’d like to keep it that way. I’m certain the lot will accommodate the theater crowd without increasing the parking on your neighborhood streets. even though I’m not adding any parking. All a patron has to do is park on Elm and walk beside Joe’s yard through the small alley there. We’re just not convinced. the south parking lot has not been used much. We hope you’re right. driveways on the south side of the mall are along the east and west side of the parking lot. Owner: You know that there’s always plenty of parking in the south end of the mall’s parking lot.
set back a driveway width. but the privacy fence has to be landscaped so that it doesn’t look like a ghetto wall. Teens can form into gangs if left unwatched. If the fence was set back the width of a driveway onto your property. And a year after the theater opened. and they discouraged patrons from parking on neighborhood streets.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. add a new entrance into the south lot. 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. and make sure the parking lot is kept clean. there could still be access from the street to our garages—just not to the main parking area. Making Progress 157 . then will you agree not to push for increased private security? Yes. The fence would help with the vehicle lights and buffer this noise from the kids who hang around. the neighbors reported that they were very happy with the way it all worked out. however. Now you’re talking about considerable expense. 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. put a privacy fence along both the east and west sides of the south lot. Agreed.
respectful. If your opponent is aggressive or angry. Joan was already pretty tired. just forget it. She didn’t believe her neighbors ought to complain about the barking. They might even start to underestimate your negotiating skills. She sought advice from the family on the other side of the neighbor with the barking dog to see whether this 3:00 a.. I’m Joan. 158 50 Practical Negotiation Tactics . and because she was hard of hearing. she just didn’t think it was a serious problem.Tactic 40: Be Friendly Being polite. Lonely’s only companionship. Example 1 Joan was new to the neighborhood.m. but be friendly. Joan: Hi. and that as angry as they were. Your opponent might give in readily. 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. because you are the one to set the tone for agreement. and sleeping at night was already a difficult proposition! When the neighbor’s dog began to bark at 3:00 a. and didn’t stop until 6:00 a. The dog was Mrs. She learned that everyone in the neighborhood had complained at least once. Close your windows at night and don’t listen. and I just moved in next door. your friendliness might disarm and relax them to the point where they begin to talk about their priorities and objectives. Joan decided to at least try and talk to the neighbor. and pleasant always enhances one’s ability to reach an agreement. This gives you an advantage. and what kind of complaints might have already been made. incident was usual or unusual. Lonely: If you’re here to complain about my Rocky. they had gotten nowhere. Present your position forcefully.m. so her neighbor’s barking dog came as an unpleasant surprise.m. professional. but going out of your way to be friendly is an especially helpful tactic. Joan had a new baby. Mrs. thinking that you will be just as easy to work with on the sticky issues. Lonely. Mrs. and started to get upset.
no. Why. I know that some of these people around here don’t like him. it’s probably because they just haven’t had the time to get to know him. though. don’t worry about that. I’ve only got my Social Security. Lonely: Joan: Mrs. sure. Well. I guess so. too. Mikey. I’d like to introduce you to my new baby. Maybe I could come back tomorrow and bring him? Oh. My friend wouldn’t charge anything for talking to us about Rocky and maybe giving us some advice. Lonely: Joan: No. I just wanted to come by and introduce myself. I need to get the baby home. He’s a real comfort to me. When he does. Making Progress 159 . How long have you had him? Almost eight years now. I sure hope he starts sleeping through the night soon. I’ve got a friend who is a veterinarian. not at all. He’s been keeping me up at night. No. I might have to talk to you about Rocky. I stopped by and visited with him over the fence this morning. but she took her baby and went to visit Mrs. I’ll see you. then. I guess that would be okay. Here’s my little angel. Who.) Hi. and I’d like to have him stop by and look at Rocky—would that be okay with you? Well. Do you think his age has contributed to some of that? You know. isn’t he cute! He’s a handful. by the way. The barking at night has been mentioned to me. Lonely: Joan: Mrs. Lonely: Joan: Mrs. Well. (Joan’s sleep was disturbed by another night of barking.Joan: Mrs. I can’t pay for something like that. Lonely again. Lonely: Joan: Mrs. is a really sweet dog.
They anticipated that it would be an unpleasant meeting. It’s very difficult to make a move of this type without having it leak out. Company ZZZ: (surprised) Well. Lonely and Rocky. and Mrs.S. the mayor called and asked for a meeting with Company ZZZ officials. that the press got hold of the story of our company’s activities before we could call you to let you know. that’s very understanding of you. Mayor: (very friendly) I understand how these things happen. Lonely didn’t have to pay for the medicine she could not afford.Conclusion Joan’s friendly approach enabled her to understand Mrs. its 150 management and sales employees could continue to work in Happy City. Lonely’s needs and arrive at a workable solution to the problem. The barking all but stopped. U. he prescribed medicine that gave Rocky a more regular sleep schedule.. overseeing a factory in Mexico and selling products in the states. Here’s how the meeting went: Company ZZZ: We’re very sorry. When he heard the news on the radio.A. 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. Joan took up contributions from the neighbors. agreed to meet with the mayor. of course. recognizing that the layoffs would be an issue in upcoming local elections. Hearing about this from the press obviously puts you in a very embarrassing situation. you would have. Company ZZZ. Under its new corporate structure. 160 50 Practical Negotiation Tactics . I think that if you could have let me know ahead of time. Example 2 Company ZZZ planned to close its manufacturing plant and lay off 300 union employees. After Joan’s veterinarian friend visited with Mrs.
Would you be in a position to talk to me about such a deal. We recognize that your new corporate owner is a large company located in Malaysia. Making Progress 161 . because I’d hate for us not to make an appropriate pitch to them. The mayor was able to broker a deal for the “disadvantaged business” to buy the plant and convert it to a different widget maker. I am certain that you would like that kind of “good” publicity coming quickly after the recent bad publicity. They need a really good deal on the plant price. or would we need to involve the Malaysia group? Company ZZZ: Certainly. Conclusion The mayor’s strategy was to disarm the company with his friendly attitude and in return get a favorable response to his proposal to buy the property in question. The buyer is a “disadvantaged business” we have been working with for some time. the 150 management/sales jobs did end up moving to Mexico.Mayor: I wanted to meet with you so we can take the necessary steps to keep the 150 jobs here. so we need to understand how we can affect their decision on keeping an office here. I think I can prevail upon the Malaysia group to let us handle the disposal of the property in such a way as to repair some of the damage our layoffs have created. It’s possible that some of the 300 laid-off employees will find work at this new endeavor. This strategy worked. Company ZZZ: I’m not sure what to tell you on that. and I want them to know that. the city has a potential buyer for your plant building. Unfortunately. Mayor: Great! Let me know when we can talk again. We just haven’t heard anything yet. Mayor: Please let me know as soon as you can. and the mayor was reelected. You’ve been very understanding about this. By the way. Many laid-off employees did indeed find new jobs at the plant.
Fred Adams. the investigator. had $40. Alexis agreed. She borrowed a tape recorder so she could ask her father if this was a fair deal. Example 1 Susan. Jones’s supervisor. Example 2 Three men were meeting to discuss a charge of sexual harassment that had been made against Stuart Jones. Somehow. Susan repeated her demand.00 to spend. and Alexis. who was disappointed to hear that she might propose such a deal.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. They might worry that the tapes will be made public or given to others. Alexis knew this was not fair. this time in front of a hidden recorder. Alexis. threats. but Susan had only $20. or simply “bad faith” methods have been used by the other party. Susan understood the impact a tape recording can have when it reveals a lie. age 14. Then he played the tape. thus becoming a source of embarrassment. 162 50 Practical Negotiation Tactics . age 15. and Jones. Susan wanted to negotiate with Alexis to “pool” their money so they could buy something together. the accused. Alexis then played the tape for her father. Conclusion For the first time in her life. are talking about a possible settlement of the issue. or used to pressure the other side to agree to certain demands. South Carolina. were on vacation with their parents in Myrtle Beach. The effect on the other party might be even more substantial if lies. She agreed that her proposal was not fair and that she had tried to take advantage of her younger sister. the younger sister. The two sisters had saved up a little money so that they could buy souvenirs. Michael Wood. until Susan said they would evenly split what they bought.00. He asked his elder daughter about the arrangement. Susan denied it.
Conclusion Jones had knowingly lied when he denied the charges. and now I’ll ask you to repeat your answers—on tape. (a long pause) I want to see my lawyer. I’ve brought a tape recorder with me. And you did not threaten her job if she did not. Making Progress 163 . Stuart. Ruiz and Ms. stares. I simply asked her to make copies for me as quickly as possible. you are aware that the next step in this process is to ask witnesses to come forth. And please describe your general manner. When Adams set the tape recorder on the table and revealed that he had witnesses. exactly what you said to Ms. You never touched any part of her body? Not even accidentally? No. Well. Jones. Appleton both claim they saw the incident and will testify. to quote you.Adams: Jones: Wood: Jones: Wood: Jones: Wood: Jones: Wood: Jones: Adams: Jones: Adams: Jones: Adams: Tell me again. he also lost his negotiating position. Your request. But by refusing to repeat his answers.” meaning something other than copies? No. Mr. So you refuse to repeat the answers you just gave us? Yes. No one could have possibly misunderstood your intentions? No reasonable person. He failed to think about what might be the next step. and gestures did not have a single hint of sexual implication or innuendo? None at all. So. “Do what I want. Mr. Starr. Jones suddenly realized that his strategy would not work. I think I can write my recommendation.
Realizing the potential of getting the “smaller half. which certainly is large enough (he naively thought) for two young children to easily share.… No way! Haven’t you two heard of ‘split and choose’? It’s a fair way to divide things. so I’ve got to cut it into two equal pieces or else he will choose the bigger one? Exactly.” the divider. The second person then chooses which of the two parts they will receive. one person is given the task of dividing the object(s) into two parts. Many of us learned this one from our parents: After two people agree to the strategy. Maria. Example 1 Maria (age 8) and Roberto (age 6) are arguing over who should get the jumbo-size Snickers candy bar their father brought home. is usually careful about dividing the object into two equal parts. Their dad instructed them to share the candy bar.Tactic 42: Split and Choose When two parties both desire something that can be shared or divided between them. Maria and Roberto: No. the classic “split and choose” tactic might be the best way to settle the issue. of course. What is it? Maria: Father: 164 50 Practical Negotiation Tactics . take this knife and slice the Snickers into two halves. with the remaining part going to the person who did the dividing. Oh. Maria: Roberto: Maria: Father: Father: We can’t share it! It’s in one piece! I’ll eat half and give you the rest. because you did the cutting. Roberto will get to choose which half he wants.
Deal? Clarence: Sure. Example 2 Two friends and business partners. and wants to divide it into two separate parcels. Archie: That’s true. Then I will choose which parcel I want. Archie: Here is the map.000. but is not sure how to arrive at a fair split. Making Progress 165 . Clarence and Archie. The remaining lots should be distributed between the two parcels to make each parcel as equal in value as possible. Archie is ready to build a retirement home on the property. I don’t really care which lakefront lots I keep. according to county deed restrictions. but the appraiser pointed out that the seven one-acre lakefront lots are considerably more valuable than the other seven lots. Clarence: But some of the lots away from the lake have been partially cleared and are flatter than others. Give me the map and a pencil. The problem is that one of us will get four lakefront lots and the other will only get three lots. That makes them more desirable. quickly recognize the fairness of the divideand-choose method. They have a recent appraisal that values the property at $150. so we should be able to divide the property fairly. I propose that you divide the fourteen acres into two parcels that you believe are about equally desirable: one parcel with three lakefront lots and the other with four lakefront lots. that sounds fair. both parties. Clarence agrees to divide it. They all have a great view and are equally desirable to build on. even children.Conclusion When two people desire the same object and it is something that can be divided in some way. Lots must be at least one acre to be developed. Clarence: Right. Archie: I really don’t care either. jointly purchased fourteen acres of lakefront property several years ago. There is only one place for an access road that must serve all lots.
Conclusion Clarence divided the fourteen acres into one parcel with three lakefront lots and six other lots. and the second parcel with four lakefront lots and one other lot. Which would you have chosen? 166 50 Practical Negotiation Tactics . Archie chose the parcel with the three lakefront lots. and both men were happy with the arrangement.
“Okay. supposedly the bargainer in the household. attach legs.” thus extending the scope of the negotiations.” Under store policy. Her husband Jason. we’ll take the suite if you’ll throw in free delivery and set up the furniture. What started out as a single issue is now a combination of a major issue and a much smaller issue.Tactic 43: Nickel and Diming Insisting on the addition of a small item (a “nickel or dime” item) as an inducement to help settle a more-important item being negotiated can change the negotiations in a significant way. Brenda did her part when she said. His tactic was to throw in a “nickel” in order to make lots of “dollars. because a “nickel” item has been added to negotiations about a much more significant item costing “dollars.” Many people have witnessed or used this effective negotiating tactic. Jason was having a hard time getting the salesman to lower the price. Example 1 Brenda Davis is always thinking about the repairs that might be required on an item. delivery was limited to a small geographical area. etc. miles from their home. so the salesperson delivered the suite himself. Conclusion The amount the couple spent was fairly large. he also set up all of the furniture in a second-floor bedroom. 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 . However. and the delivery carrier doesn’t set up mirrors. is expected to dicker over the price. They recently purchased a new bedroom suite after they carefully priced comparable furniture all over town. The suite they liked best was already at the lowest price in town (the retailer was having a real sale). With a great deal of effort.
If one party misjudges the situation. In one case. If used correctly—at the very end of a negotiation—the tactic can usually provide a small gain. it can be a dealbreaker. 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. 168 50 Practical Negotiation Tactics . 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.” Conclusion The nickel and diming tactic is a classic negotiation tactic used successfully in a variety of situations. we’ll agree to Health Plan A with another ½ cent on the pension fund. At the end of negotiations.” The company negotiator yielded to this small-potatoes counteroffer in order to win agreement on the health plan. so be prepared to withdraw the nickel and dime item at the hint of trouble. “Okay.important item.
Kathy: But they are a matched set. Example 1 Donna: Mom said to take what we want from the old house and toss out the rest. Donna: I’ll take the bar with stools. This creates what is called a “halo effect.” Having a member of a negotiating team whom the other side thinks can do no wrong might prove to be advantageous. Kathy: Then I’ll take the couch and love seat. and all the rest is small junk. Kathy: Not if you accept your logic! (Pause) Donna: You’re not being fair… Making Progress 169 . Kathy: I suggest we take turns choosing which of these things we want. I’ll take the color TV.Tactic 44: Make Use of a Positive “Halo Effect” It is common in interviews. thus creating the impression in others that the good qualities they see are present all the time. People tend to make an effort to put their best foot forward. Kathy: Well you took the bar and four stools as one item! Donna: They are part of one set. decision-making meetings. Kathy: I’ll take the pool table. Donna: They match. and performance evaluations for people to come across as likeable. but they are two pieces of furniture. or knowledgeable. You can go first. Donna: Okay. Donna: No way! These are the last two pieces of furniture. trustworthy.
The union negotiators. What for? Tell him the situation. Let’s call Johnny Ryan. I want the love seat. Conclusion Kathy and Donna needed an arbitrator to settle their disagreement. He might or might not have also been a good arbitrator. (Pause) We’ve got to settle this today and get this stuff moved. Example 2 During a heated labor negotiation.Kathy: Donna: Kathy: Donna: Kathy: Kathy: Donna: Kathy: Donna: Kathy: You’re not! (Pause) Well. I want the stools. Johnny had the “halo” of an honest person. I trust his judgment. and he has always struck me as an honest person. He’s our cousin. what can we do? Give me the couch and love seat! No. 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. with a record of labor involvement that included three recent strikes. but Kathy and Donna assumed that one positive quality (honesty) would carry over to other areas. and ask him if the couch and chair should be one item or two. 170 50 Practical Negotiation Tactics . and if the bar and stools should be one item or two.
He said he believed that it would work as presented by management. During the break. but his mere presence caused the union leaders to accept a management point as valid. Boston was widely known as a totally honest man who speaks his mind. Boston went to the negotiation table with the management team. This time. 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. thus bringing the negotiations to a conclusion. and that he did. the consultant did not speak. even if the proposal appeared to be valid. Making Progress 171 . the former union president. without any reservations. The teams took a weekend break from the stalled negotiations. as a consultant to review their proposal.simply did not trust the management team. They might have stretched his halo farther than his expertise and experience warranted. when negotiations again stalled on a retirement plan issue. He solemnly told the union negotiators that he had been hired to review it. the city management again hired Boston. but the power of the so-called halo effect was great. The union accepted the proposal. Two weeks later. On Monday.
How can you say that? We went to the county courthouse and looked up the real estate transactions for all the houses in this neighborhood that were sold over the past two years. $229.000. I’ll get back to you.000. but you’ve priced it way too high. has owned the house for 24 years and is downsizing to a condo. but we feel that it’s a fair offer.000.500. but the key is to gather facts that you might need—not just the facts that you will need. the other party will ignore or refuse to believe the information. (Next day) We’ve reviewed the records you’ve produced. They sold for: $225. Sometimes. Henry Lopez: Sam Jones: Maria Lopez: Sam Jones: Maria Lopez: We love the house and have made a written offer of $240. This offer is for more money than any four-bedroom houses on this neighborhood list. They believe it is overpriced. Here’s a list of the five that are about the same size as yours. We love your house.000 under the listing price! We realize that. and $237. The owner. Sam Jones. $235. Sam Jones: Sam Jones: 172 50 Practical Negotiation Tactics . What? That’s $35.Tactic 45: Use Facts Fact-gathering must be part of the preparations for every negotiations session.000. $237. Example 1 Henry and Maria Lopez are interested in a house that lists for $275.000.000. and we are countering with an offer of $250.000. but the right facts presented at the right time can chill or astound and completely turn things around. Being able to present them at the most appropriate and critical times has made the difference in countless negotiation situations.
let’s not worry about it.000 each. You can’t pay more than $1. The last 20 were over $2. That’s the bottom price. He found facts that supported his position. Hatfield: My staff has done a lot of research. and wisely chose exactly when to present them in order to make his point. if other departments have ignored the policy.600 unless the company president approves.000. Making Progress 173 . Supervisor: Well. I asked for a list of all new PCs bought this year. We accept. who was not particularly knoledgeable about real estate. Supervisor: If I okay this purchase order. Well… We have a written counter of $245. and we know that only this model will meet our needs. We’ve talked with purchasing and we have the authority to buy seven for $2. Order the new computers. Conclusion The Joneses had based their asking price on the advice of a friend. Example 2 Supervisor: You know the policy. Conclusion Hatfield had anticipated what his supervisor’s position would be. Here it is. I’ll get called on the carpet. I’ll be… Okay. Hatfield: While I was at purchasing.Henry Lopez: Sam Jones: Henry Lopez: Sam Jones: Let us discuss this for a minute.400 each. The facts presented by Henry and Maria Lopez caused Jones to re-counter their asking and likely sale price. and did his homework. No one can go over $1.600 for a computer.
The effective use of probing questions can help achieve a favorable settlement. If you trust me. can you check out two on a card for him? Jenny: Well. and two are for my husband. Example 1 Maureen: What. reveal misperceptions or lack of knowledge about positions that can be corrected. Maureen: So you trust me with the books. Maureen. yes. 174 50 Practical Negotiation Tactics . I trust you.Tactic 46: Ask Probing Questions Ask probing questions and follow-up questions. A maximum of three books can be checked out to a person at any one time. Maureen: The policy limits a person to only take out three books at the same time? Jenny: Yes. Otherwise. I can’t check out these four books? Jenny (Librarian): That’s the policy. and they would all be unavailable to others. some people would have forty or fifty books out at the same time. but I don’t set the policy and I can’t make exceptions. I’m sure you would not. Would I do that? Jenny: Maureen. But I can’t break the limit rule—it is an absolute rule here. you know me. Maureen: Well. but you don’t want to jeopardize your job? Jenny: Yes. They can help you identify or better understand what the other side really wants. and help you point out inconsistencies in a position that might “lead” the other side to change theirs. I want two of these. I can do that within the rules. Maureen: Well.
Security? Right. (Next day) Do you have the policy about giving out product sales information? No. Babu. and they don’t even have a use for the sales data. we can’t do that. Sue.Conclusion Maureen used probing questions to uncover a way to solve her problem and make it easy for Jenny to stay within the library rules. Mary. But this forces us to make decisions without complete information! Yes. and Kenzie. They say it’s a security issue. are you sure I can’t get your information technology people to give us direct information on product sales? No. Example 2 Jack: Mark: Jack: Mark: Jack: Mark: Jack: Mark: Jack: Mark: Jack: Mark: Jack: Mark: Jack: Mark: Jack: Mark. If that data ended up in the wrong hands. Jay. I couldn’t find anyone who knew it. Mary and Kenzie? They are 2-3 pay grades below us. Who does have access clearance? Mike. Making Progress 175 . but it’s because you don’t have access clearance. What’s the policy number or date of approval? I don’t know. Why? Some policy? Yes. Can you get me the number? Sure. it could kill us. Brooks.
if we can have access? Mark: I guess so.Mark: Well. that’s been the policy since I’ve been here. Once he discovered that employees in lower pay grades had access clearance. When can I get the data? Mark: Today.” He intended to do this until he hit a dead-end or was able to find a solution to his problem.P. I’ll get it for you ASAP. I’ll sign now.… (Next day) Mark: The vice president said you can have access if you sign a security card like everyone else who has access clearance. 176 50 Practical Negotiation Tactics . 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: Here. Jack was able to receive clearance as well. Jack: Can you ask your V.
If both parties desire a settlement but cannot seem to reach it through the usual give-and-take process. Tactic #49 (Final-Offer Arbitration) should bring about a settlement. Tactic #50 should always be used right away: Commit the Offer to Paper! Even small issues negotiated among friends can cause problems if people rely on memory and assume that both parties have “heard” the exact same conditions. 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. T Reaching Agreement 177 . this process can easily result in a final settlement. If people are not willing to take even a few minutes to write down the terms that have been agreed upon and sign the paper. and the child learns an important lesson about life. and the classic Walk Away (Tactic #48). Other final-agreement tactics include Tactic #47 (Giving Premature Congratulations) to make the other side feel good about having achieved an agreement (while you spring another condition on them). In this process. hours. If friends or neighbors need to settle something but prefer to avoid the negotiation process. They bring it out when a dispute arises.Stage 7: Reaching Agreement he final stage! It might come minutes. 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. or even months after the first offer is presented. how solid an agreement can it be? Even parents negotiating chores and other aspects of life with their teenagers have found it useful to have their children write down and sign the list. days. When two parties believe they have an oral agreement. this tactic can produce an agreement. When multiple issues are at stake and most have been agreed upon during negotiations.
Let’s do go to Virginia Beach and Washington D. 3) and adds one last key demand to the congratulation sentence. “I’m thinking of agreeing to your plans for vacation. The bargainer skillfully 1) begins the congratulation sentence “I agree…”. 2) allows the other side to feel the release that comes with completing the bargain.C.” Conclusion The husband was so excited about visiting Washington. After days and weeks of on-again.…” Larry was very pleased that his wife was agreeing to the idea he had been trying to sell. Near the end of a particularly anxious bargaining session when there was little time left to negotiate. off-again discussions.C. D. Example 1 Many husbands and wives have different ideas about how they’ll spend their vacation. one exhausted negotiator saw that his team was equally weary and 178 50 Practical Negotiation Tactics . and Virginia Beach —his plan—that he let the euphoria of the moment cause him to agree to a trip he dreaded and in fact had successfully avoided all year. she continued to speak: “…as long as you agree to drive us to visit my mother on her birthday. Larry Snyder gets bored staying in any one place for many days. Example 2 Negotiations can take a long time and incorporate many issues.Tactic 47: The Premature Congratulation This tactic draws its strength from timing. Nancy brought up the subject of vacation again after dinner. As he hugged her. Weeks of stressful meetings cause both sides at the bargaining table to look forward to its conclusion. His wife had carefully planned her exact “premature” vacation agreement. She said. They both have stressful jobs and look forward to their annual vacation together. but his wife Nancy likes to stay put and relax.
(This is a bad position to be in. The old agreement specified a 30-day period. but also that they sensed the weariness of my team. “…as long as you give us a 45-day probation period. However. It was so close. One of the best pieces of negotiation advice is to remain fresh. Reaching Agreement 179 . One operating issue involved the probation period for new employees. My team was afraid we would not even come to an agreement. symbolizing that he was agreeing to the entire final offer. We all knew that it could come down to agreement or strike. but acceptable. In our last offer. My team had convinced me that doubling the time frame would create a real problem on the shop floor. but the other side continued to ask for 60 days. and this skillful negotiator let them feel the happiness and security one feels when the fear vanishes. Ted said. as the negotiator came closer. but we agree to everything in your final proposal…” Members of my team shouted hooray. we made some small concessions on financial matters. When the chief negotiator emerged with his team and headed toward my team. but held firm on remaining operating principles.almost willing to accept any deal. 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. fit. we held firm on this and did not discuss the probation issue and many other “dead” issues for days. The celebration had begun. I felt the tension in the room.” Bob: Ted timed this perfectly. There were grins and handshakes coming from the other side. “It was hard for us. Therefore. and rested. because it makes you pretty vulnerable. It took only a few minutes of caucusing for my team to convince me that a 45-day probation was costly. Most people didn’t notice that the negotiators had not finished their hand shake… Ted: Then Ted continued his sentence with.
180 50 Practical Negotiation Tactics .Conclusion This “premature congratulation” tactic can only be used successfully at the very end of an unsure and shaky negotiation. However. The negotiator makes a big show of agreeing and allows the other side to bask in the glory of a deal completed. knowing that it will probably be agreed to in order to continue in the euphoria of the moment. the negotiator skillfully finishes his words of congratulations by inserting one last key demand.
I’ve worked with you before. The next morning. Your opponent will have to either let you go and run the risk that things are really over. He really likes it. what can you do on a 36-month lease? Reaching Agreement 181 . a veteran salesperson. too. how did you like it? Jay: Okay. Jay. and he can simply buy it when the lease expires. Jay: Hi. Jay. here are your keys. Whether you are really bluffing or you are serious. Sue: I remember you. the following exchange occurs. You bought your wife a new van just last year. Sue: Well. but his Avalon has been a good car. but my Avalon is a good car. and the lease on my Avalon is about to expire. but I thought I might want to try a new Highlander. Example 1 Jay Vahaly has purchased three new Toyotas from Pembroke Toyota over the past twelve years.) Jay: Sue. He stopped by Pembroke one day to look at the new models. (Vahaly drives the new Highlander home. You had time to assess my car. or go after you and perhaps make a new concession in order to get you back to the table. Sue: Let me get you the keys so you can take this one home overnight to see how you like it. all from Sue Wilson. if I roll over the lease to a Highlander. My name is Jay Vahaly. be sure you think this through beforehand. I don’t want to negotiate. right? Jay: Yes.Tactic 48: Walk Away Walking away from the table in the middle of negotiations is a risky tactic that should only be used when you know you have a good alternative to what is on the table AND you believe that the other party will think that you really are serious about quitting for good. I like it.
Jay. These Highlanders are hot items! Jay: Well. Jay: I guess I’ll go to Dixie Toyota and see what they will do for me. they came down to $199 more on a thirty-six month lease. Jay: What? I was thinking the lease payment would be. but 182 50 Practical Negotiation Tactics . (Jay got in his car and drove home. I thought I’d get a fair deal. Sue: Sorry.Sue: Give me a few minutes and I’ll find out … (20 minutes later) Sue: Well. Sue called him as soon as he walked in the door and offered another $50 break on the lease. Example 2 Larry and Judy Bizannes own the Bizannes Music Mart. I’m disappointed. you can turn in the Avalon and get the Highlander for only $249 dollars more per month. (He walks away) Sue: No. Let me try again. That was the figure he was looking for. Please go back and work out a lower lease payment. Sue: I’ll try. He was prepared to keep his Avalon if the lease was even $1 more than his limit. $100 more. Jay.) Conclusion Jay knew his BATNA (best alternative to a negotiated agreement): to go somewhere else if the deal isn’t good enough. They’ve talked about retiring in recent months. a successful musical instrument sales and rental store. Jay accepted. at most. He effectively used the walk-away tactic to let Sue know that he was firm on the price. Jay—wait. (15 minutes later) Sue: Well.
so why are you here? Michael: I’ve discussed it with my partners. after no contact from Larry or Judy. and I only need your building to own it. He met with Bizannes twice before. I still want to develop this block. Larry: Michael. go back to your office. and he is offering us $4.5 million for the building. Michael: I have a check right here for 4. Larry.5 million. with a certified check. You rejected it.5 million. One day. visited their store. Reaching Agreement 183 . Larry: Judy. What do you think? Judy: Larry. they were prepared to accept $5. Michael: Well. which the Bizannes accept. Larry. How’s business? Larry: Great! I’m surprised to see you again. Judy: Larry. but their continued walkout convinced Michael that they would hold firm. In reality.both of them love their store. Michael calls on them again with a check for $5. (Judy and Larry walk into the back room and close the door. and we gave you our price. and I’m prepared to offer you $4.0 million.5 million.) Conclusion Larry and Judy used the walk-away tactic and stayed away for two months in order to convince Michael that they were firm on their price.) Larry: Michael is here again. let’s eat lunch. Larry: Yes. our accountant said it’s worth $6 million. Two months later. and I’m not interested in less. come out here! (Judy comes out from the back room. you’ve already told us that. a local developer. Michael Roberts. today. Michael: Good morning.
Let’s split the money. In mediation. Six months later. The following discussion occurs: Jenny: The old machine wasn’t worth $50 when you took it. But he isn’t allowed to try to find a “middle ground”—just to choose one position or the other. but they wanted to give Jenny $500 for her “share” of the machine. That was the deal. the arbitrator is given the authority to make the parties comply with the ﬁnal and binding decision. Lynne and Gary bring the restored Singer to Jenny’s house. In ﬁnal offer arbitration. the mediator works with both sides to resolve certain issues but has no authority to make binding decisions. Jenny: No. In most arbitrations. I won’t take it. Jenny told Lynne she could take the old Singer that she has no interest in (and doubts that it is worth restoring). Lynne told Jenny that she and her husband Gary have restored two other Singers. Keep the $1.000. which she has kept in a barn for over ten years. both sides have agreed in writing to accept the arbitrator’s decision.Tactic 49: Final-Offer Arbitration Mediation and arbitration are two well-known ways of resolving sticky disputes. 184 50 Practical Negotiation Tactics . Lynne responded that this was their intention. Jenny has an antique Singer sewing machine. One day Lynne dropped by for a visit and the discussion turned to the old Singer. They inform her that they put the machine on e-Bay and have an offer of $1. so they generally give up some ground and try to make the offer appear as fair and reasonable as possible. Example 1 Jenny and Lynne are sisters. Lynne: No! I suggest that we each write down our position and let Dad choose one of the two as the final decision. which is generally voluntary. and would be able to restore hers as well. Each party wants their offer chosen. Lynne: No. Both involve the use of third parties who are objective. I offered it to you for nothing. Jenny told them to sell it.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). In arbitration. We have a few dollars invested in parts and we had fun working on it.
Tina. Tina: Good. Their father found Jenny’s position to be the most reasonable. At best. Tina: Yes. on Friday. so I am invoking the finaloffer arbitration ground rule we have in place. Then we both submit our final offers to Judge Ryan within 48 hours. binding decision on the three items. Example 2 Ralph: Well. I’ll buy that. we are down to only three unresolved items. The union’s position could have run into millions of dollars. first on the health insurance co-pay. Conclusion Jenny’s final position was that she receive $50—the maximum possible value of an old “junker. but we’ve made no movement on any of them since we started. As a brief explanation. Ralph: I know.m. since he could only choose one offer.” Lynne proposed a 50-50 split. I have chosen management’s offer to keep it as it is under the current contract. and meet back here in 72 hours—3:00 p. Any increase in value was due to the work of Gary and Lynne.m. (One week later) I think Jenny’s position is the most reasonable.Jenny: Dad: Okay. he did not need to “haggle” with them. after six weeks of negotiating. based Reaching Agreement 185 . They should get the other $950. My troops are getting restless. Ralph: Right! (Friday at 3:00 p. I can’t see any way to reach an agreement.) Judge Ryan: Here is my written. the old machine was only worth $50 when Lynne hauled it away.
At least we both saved time. I’m not happy with your decisions. on the merit pool distribution method issue. money. but we agreed to this process. 186 50 Practical Negotiation Tactics . reasonable resolution to their last three unresolved issues. and an item that large should have been negotiated at the table. nor why their method was superior. I’m sure you realize that we could have taken six more weeks to reach the same point. I have chosen management’s offer because the union did not justify why the past practice should be changed. and peacefully finalize a contract that contained several important gains for both sides. Ralph. and stress. It will only cost $120. on the clothing allowance. Finally. No increase has been given for six years. Conclusion The final-offer arbitration process enabled the parties to gain a fast. Now let’s get a signed contract.Ralph: Tina: on last year’s data.000—less than 1 percent of the total package. I have chosen the union’s final offer. Well. Second.
If we shake hands on it right now. At the very least. We’d like to make you an offer of $150. Bill: Reaching Agreement 187 . Example 1 Bill and Paulette had been house-hunting for some time. The goal of recording the precise details is to either avoid any misunderstandings or address them before the talks conclude. everyone is busy grappling with the details of the negotiations.000. all the usual stuff in a sale. They saw the “For Sale” and “Open House” signs.000. not the furniture.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. and one of the other couples looked very interested. and felt that they would have to work fast to make an offer before someone else did. During a discussion. they looked at this particular house on their own. 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. Obviously. and while Bill and Paulette had been using an agent to help locate houses. however. seeing the agreement in writing will force both sides to acknowledge what has been said and agreed to in the negotiations. Seller: We’re asking $152. we won’t be involving our real estate agent. Bill: Bill: Can we talk to you a minute? What’s your asking price? And that includes the appliances in the kitchen? And all of the drapes and blinds? Okay. Bill pulled the seller aside. The owners were selling the house without a real estate agent. Bill and Paulette fell in love with the house. Seller: Yes. They finally looked at a house they really liked. They were not the only couple to come to the open house. and decided to stop by to see if they liked the house.
If it’s what you meant.) Seller: So. The supervisor pointed out that he had a staff of 20 or so women. Seller: Okay. all window blinds and drapes. look this over. he began to have “problems” with her job performance. Let me just get the standard “offer of sale” form and fill out what I hear you saying. and the two area rugs were specifically included. The supervisor assured the employer that there was no basis for her complaint. he listed an attached hutch in the kitchen. she said that her supervisor had repeatedly asked her out. the house is yours. the refrigerator. In the section for fixtures and miscellaneous items to be left on the property. (The seller recorded the offer of $150. and had been prepared to drop his price to $145. It worked. in fact.Seller: Just a minute. Sign here. When he had the chance to put the deal in writing. Under the section for appliances to be left on the property. that’s what I meant. and that no one would ever say that he was guilty of any type of sexual harassment or sexual discrimination. and that the problems with her job performance were. I think we can work something out. Conclusion The seller had always intended to leave the garbage disposal. he listed the stove. Example 2 Monica brought a sex discrimination charge against her employer. since he probably would have missed them) Yes. and two area rugs. real. but I’d like to make sure there are no misunderstandings.000. a public agency. the hutch. In her complaint. the hutch.000 and added the additional items to “sweeten the pot” and give Bill and Paulette a deal they couldn’t refuse.000. he left the price at $150. and when she refused. and the garbage disposal. The employer’s affirmative action officer looked into the charges and determined that 188 50 Practical Negotiation Tactics . and the two area rugs. then we have a deal. Bill: (pleasantly surprised to learn that the garbage disposal.
I’m He: She: He: Reaching Agreement 189 . by this time.there was little basis for the complaint. It might be standard when there’s a settlement. you didn’t mention in the agreement that in exchange for the $100. my client is supposed to formally withdraw the complaint rather than just settle it.000. found a new job and wanted compensation for “embarrassment” and lost wages in the amount of $100. The supervisor insisted that if the employer felt he had to settle. Why’s that? Well. even though we’re certain we would prevail. And the confidentiality clause is standard. He offered to send settlement agreement papers to her. then Monica had to acknowledge that the supervisor did nothing wrong. and expensive matter. He’s happy to prove that in court. drawn-out. settling—What difference does it make to her? She’s getting her $100. You’re just trying to make it seem as if your supervisor did nothing wrong.000. But the employer doesn’t want to go through the expense and publicity of a trial. and must agree not to tell anyone about the $100. Monica’s lawyer (She): Employer’s lawyer (He): She: I was surprised by your settlement documents. but said that fighting the charges would be a long.000.000. even though you are paying Monica because we can prove he did do something wrong. but it’s not standard when a complaint is formally withdrawn. Withdrawing. Look. Monica had. She thinks the withdrawals and the secret settlement will be seen as some kind of admission on her part that she shouldn’t have brought the claim. the supervisor says he did nothing wrong and that Monica just misinterpreted what he said. The employer’s lawyer told Monica’s lawyer that the employer was ready to settle the deal for the $100.000 without actually having to prove anything.
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. but word did get out that a public agency paid $200.000 and the conditions of the offer. It was made clear that the employer had paid the additional $100. 190 50 Practical Negotiation Tactics . but that’s under the same conditions—the claim must be formally withdrawn and Monica can never reveal the amount of the settlement.000.000 when all that was asked for was $100.000. There was a confidentiality agreement. I’ll take your offer back to her and let you know. Monica accepted the $200. to his disadvantage.She: authorized to pay $200. It would have been a better strategy in this situation to raise the issue of withdrawing the complaint during the actual negotiations.000 just to get the employee to “withdraw” the complaint.
and when they agree to solve problems together. In Tactic #17 (Package Items). talking is not always the same thing as communicating. One way to help the parties abide by an agreement is to put it into written form. then the parties have to abide by the agreement. rather than attack each other. Putting the Agreement in Writing 191 . depend on the kind of negotiations in which you are involved. A union contract. even an informal agreement benefits from some type of written documentation. reaching an agreement is sometimes a long and difficult process. and contract. when they engage in honest “give and take” negotiations.SECTION IV: PUTTING THE AGREEMENT IN WRITING s you can see. it would have been easier to resume negotiations at a later date. I thought you said something else. “Oh.” By the same token. of course.” Clear communication is essential if you want to reach an agreement and have it abided by. When two friends agree on what movie to see. Reaching an agreement is the first step. but some of the decisions were put off for a couple of months. If the agreement reached at the time had been put into writing with all three sisters signing it. it is much more effective in the long run when the parties enter into “win-win” agreements. commitment. “That may be what I said. most certainly needs to be in written form. A Communication Hearing is not necessarily the same as listening. Think of how often you have said to someone. the three sisters reached an amiable agreement. The degree of detail and formality of a written document will. a written document is hardly necessary. Certainly someone has said to you. Unfortunately. Putting an agreement into writing serves three purposes: communication. However. As these examples of personal and business negotiations show. however. but it was not what I meant. operating under an agreement after it has been reached can be even more difficult.
Oftentimes just seeing the agreement in black and white conveys its import as well as or better than hearing about it. 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. When communication is limited to the spoken word only. The receiver has to decode the message being sent by trying to understand and interpret the words. the opportunity for the sender and the receiver to misinterpret is greater than if the communication is first spoken and then written. the price is spelled out in the loan document as “twenty-two thousand. the message being conveyed and received might be understood differently.” In Tactic #14 (Don’t Always Hide Your Weaknesses). or express a thought or emotion through words. 192 50 Practical Negotiation Tactics . 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. His mom could more easily enforce the agreement if she had it in writing.944. In Tactic #4 (Use Objective Criteria). Who isn’t excited about buying a brand new SUV or truck? Until. that is. Negotiations are often necessary because there was a “misunderstanding” that could have been avoided if the parties had put their agreement in writing. or movements. nine hundred and forty-four dollars—$22. pictures. you have created something tangible that can be referred to in the future when memories become fuzzy. sounds. or movements being used by the sender. The sender wishes to convey an idea. pictures. And because the sender and the receiver are two unique individuals. seek information.Communication is a process that involves a sender and a receiver. Commitment Reducing an agreement to writing often forces both sides to truly commit to the agreement. Jason agreed to change his study habits if he couldn’t pull his grades up by the end of the semester. When you create a written record of the details of an agreement. sounds. a couple of months away. he can be reminded of the details because it’s all there in black and white. If Jason fails to live up to his side of the deal.
your plants die because the house-sitter wasn’t told to water them. When you are ready to commit yourself in writing. say. Your spouse will share some responsibility for failing to make that duty clear in the agreement if. and how much. 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. the real estate contract includes information about the buyer and seller. one party will change behavior in exchange for something of value from the party who wants the behavior changed. Carefully and completely describe the subject matter of the agreement. and so on in standard contract form. and dated agreement. In either case. If you have agreed to pay someone to house-sit while your family is on vacation. WHO? Provide of the full names the parties necessary to the agreement. when. You can do this more formally by taking them to court (perhaps as a last resort). have your spouse also agree to the details of the agreement. Here’s what we mean.Contract Finally. leading to misunderstandings and contract disputes. WHAT? The written document should clearly describe the item(s) covered by the agreement. before the trip. However. pulling an agreement in writing. and put that information into the document. where. Both parties must receive a benefit or something they personally consider of value. 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. why. dating it. One party wishes to buy what the other wishes to sell. details such as what fixtures stay or what appliances go can be easily overlooked. ask yourself the basic questions of who. the address and description of the real property. signed. in writing. what. protect yourself by having a written. and getting all the parties to sign it usually creates an enforceable contract. as many people learn when they purchase a home. Generally. one party will work if the other party pays for the work. or it isn’t an agreement—it’s merely the conveying of a gift. how many. Failure to do so can lead to big problems. which. Putting the Agreement in Writing 193 . which kind of.
agreed to the same thing. in fact. And it can create a tangible reminder of the deal (or an enforceable agreement. dating it. and having all parties sign it ensures that the parties have. It gives the parties an opportunity to really buy into the deal. which one or which kind of. depending upon the deal: when or where. The more-specific and clear these details are. if that becomes necessary). how much or how many. 194 50 Practical Negotiation Tactics .The remaining questions fill in the details of the agreement. Putting an agreement in writing. the better.
Personal Negotiations Negotiation situation: Parties involved: Issue: Tactics that might be helpful. and how they can be used: Exercise Forms Putting the Agreement in Writing 195 .
and how they can be used: 196 50 Practical Negotiation Tactics .Business Negotiations Negotiation situation: Parties involved: Issue: Tactics that might be helpful.
________________ 10. ________________ 5.Name of Negotiation Tactic 1. ________________ 7. ________________ 8. ________________ 6. ________________ Tactic# How will I use this tactic? (Application) _________________ _________________ _________________ _________________ _________________ _________________ _________________ _________________ _________________ _________________ ______ ______ ______ ______ ______ ______ ______ ______ ______ ______ Notes Putting the Agreement in Writing 197 . ________________ 2. ________________ 4. ________________ 9. ________________ 3.
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and J. 1987. Patrick J. R. Lewicki.. 2004. Ill. The Relaxation and Stress Reduction Workbook. Inc. McKay. New Jersey: Prentice-Hall. Eshelman. Inc. Clark. New York: Simon and Schuster. and M. 2nd ed. D. The Negotiator’s Handbook. University of Missouri: Columbia Press. Fisher. You Can Negotiate Anything. Labor Relations and Collective Bargaining: Cases. References 199 . Maddux. W. Gavin. C. Inc. and S. Cleary. Getting Together: Building Relationships As We Negotiate. K. Herb. The Negotiation Handbook. David. Inc. Negotiation Skills. and Law. Sharpe. The Essentials of Negotiation. 1988. Los Altos. Prospect Heights. R. LittleJohn. and J. New Jersey: Prentice-Hall. 1997. Gotbaum. New York: Penguin Books. Upper Saddle River. Patton. Practice. Roger. Negotiating in the Real World. Brown. New York: M. and C. New York: Penguin Books. Heavrin. M. 2nd ed. Inc. M. Mediation. Fuller. Cohen. and S. New York: Bantam Books. Ury. 1999. R. Fiske.. W. Irwin.E. Minton. Calif. 1991. 1980. Successful Negotiation: Effective “Win-Win” Strategies and Tactics. Fisher.: Crisp Publications. 7th ed. Pocket Negotiator. Victor. 1996. George. Domenici. 1991. E. and B. Inc. Chicago: Richard D. J. Roger.REFERENCES Carrell. M. Calif. Inc. Upper Saddle River. Saunders. Getting to Yes: Negotiating Agreement Without Giving In. 2001. Kennedy. New York: Basil Blackwell. 2001.: Waveland Press.: New Harbinger Publications. 1989. 1988. Oakland.
Sharpe. Tsogas. The Eight Essential Steps to Conflict Resolution. New York: Bantam Books. Ury. Raiffa. Bargaining for Advantage. 1996. New York: Simon and Schuster. Howard. Massachusetts: PON Books. Inc. 1982.org 200 50 Practical Negotiation Tactics . 1994. George.negotiationsources. Taking Charge/Managing Conflict. C. Inc. Massachusetts: Harvard University Press. Gerald I. Massachusetts: D. B. Upper Saddle River. William. The Art and Science of Negotiation.E. R. The Art of Negotiating. J. Labor Relations in a Global Economy. 1987. Weeks.Nierenberg. 2001. 1991. Cambridge. www. Cambridge. Raiffa. The Mind and Heart of a Negotiator. Heath and Company. New York: Penguin Putnam. Dudley. Stulberg. L. Lectures on Negotiation Analysis. Shell. New York: Viking Press. 1981. Lexington. New Jersey: PrenticeHall. G. Inc. 1998. 1999. New York: M. Inc. Thompson. Howard. Getting Past No: Negotiating with Difficult People.
During his academic career he has received awards for both outstanding research and teaching. and served as President of the Board and Mayor Pro-tem for three terms. and MBA and B. Carrell are in the fields of collective bargaining and labor relations. has practiced law for 28 years primarily in the public sector as an attorney for local government in her hometown of Louisville Kentucky. and Public Personnel Management. Morehead State University. and negotiations. Dr. which is located in the greater Cincinnati area. in Economics from the University of Louisville. The Journal of Accountancy Training. Bakersfield. and the University of Louisville. Books published by Dr. Personnel. he was elected to the City of Louisville Board of Aldermen for five terms.D. Most of his professional career has been spent in the Louisville area and has included positions as a personnel director and labor negotiator. HR Magazine. In addition. Personnel Journal. organizational behavior. Marshall University.ABOUT THE AUTHORS ichael R. In addition to negotiating numerous litigation settlements and contracts. Carrell has held academic positions at California State University. Human Resource Management. The Academy of Management Review.A. These positions enabled him to build a sizable management consulting practice while teaching at the University of Louisville. Labor Law Journal. Business Forum. Organizational Behavior and Human Performance. The Personnel Administrator. Carrell is Dean of the College of Business at Northern Kentucky University. she has helped negotiate a number of major agreements such as a multi-million dollar property exchange that relocated major industries and railroads from the City’s downtown wharf resulting in the development of both an award winning public About the Authors 201 . He received his doctorate from the University of Kentucky. He has authored over 50 scholarly works in some of the leading management and human resource journals including The Academy of Management Journal. The University of Nebraska-Omaha. M Christina Heavrin J.
Jefferson County. 202 50 Practical Negotiation Tactics . 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. an agreement between the State of Kentucky. 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. the City and a for-profit hospital for guaranteed indigent health care services for city residents.park and a successful industrial park in the City’s enterprise zone. Ms. 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. Recently voters approved the merger of the City of Louisville and Jefferson County Governments.