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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
• A child wants a new toy now. with neighbors. 4 50 Practical Negotiation Tactics . Unfortunately. practical tactics useful in real-life situations at work or at home. but many of us miss the opportunity to bargain in other situations. such as these: • You receive the wrong order at a restaurant. Instead. Who. at a flea market. But if you scored 8 or less. they pay the sticker price. Most readers will no doubt recognize some of these strategies. with family members. or engage in an unproductive argument. exactly. 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. accept what is given.negotiator! Pass this book on to someone else who needs it. 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. 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. few people understand that normal interactions represent bargaining opportunities. start reading! Most people come face-to-face with a negotiation situation of one type or another on a daily basis: on the job. • A co-worker asks for volunteers for a new project.
“I’d like Introduction 5 . or items of value. The parties involved can make a decision by themselves. There must be a conflict in the sense that what one wants is not what the other wants. that can be negotiated. 5. condition. and I don’t have time to wait for another. since you lost my reservation. be prepared to bargain. Flexibility. A friend is about to select the movie he/she wants everyone else to see. Each one has the five key characteristics necessary for bargaining: 1. one party is only allowed to follow policy or must wait “until the manager arrives. Therefore. In some circumstances. some resolution must be negotiated. Mutual goals. such as price. 3. and each side can involve one person or several people (each representing one “side” of the issue). Your spouse wants to buy new furniture. A teenager wants to buy his/her first car.• • • • • • • A hotel clerk tells you that your reservation was lost. In some situations. The parties are interdependent: what one party does affects the other. All of these situations are opportunities to negotiate. time. Two or more sides are involved. Your boss reviews your past year’s performance. Decision-making ability. The parties involved are interested in reaching a common goal. For example. you must advise the other party of your intention to negotiate. What are my alternatives?” During an employee evaluation. 2. “Well. perhaps you can say to a hotel clerk. Interdependency. Multiple parties. A neighbor wants to remove an old tree on your property line. 4. what can you do for me?” Or this to a restaurant manager: “This food order is wrong. Both sides want a settlement. A service repair person gives you an estimate on some work.” When you recognize that something can be negotiated. There are flexible elements to the situation. perhaps the employee can say.
How can you compensate us for our loss?” Once you’ve suggested that you see the situation as something to be negotiated. 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. Choosing and applying the appropriate tactic to a particular situation will become easier as you begin to use them. Keep this book handy when preparing for any type of negotiation. and meet with you again.” To a neighbor you can say. 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. Scenarios based on actual real-life situations are used to show how each tactic can be used in business or everyday situations. the facts. and the tactics that might move the negotiations along. You can then use one or more of the tactics presented in this book to achieve the best possible settlement. 6 50 Practical Negotiation Tactics . but I believe it adds value to our house.time to look over this performance review and respond point-by-point. and use the forms in the back to identify the issues. Once a settlement is reached. the parties and their interests. “I see why you want to cut down the tree.
or child. did you request appropriate compensation? 6. Do you often refrain from negotiating a better price or service because you believe that you do not have good negotiating skills? Introduction 7 . have you ever felt that you were not adequately prepared to negotiate a job offer? 2. etc. spouse. have you ever required a written agreement covering chores. allowance. When making a major purchase. Do you wish you could negotiate a change in your job duties or salary? 7. do you believe that you negotiated the best possible deal? 4. The last time you received sub-par service or food in a restaurant. but you did not? 8. or division of household duties.? 10. Do you routinely negotiate for better accommodations when you check into a hotel? 3. In the past. Have you ever found yourself in a negotiation situation in which your best alternative was to walk away. When you purchased your last home or car. In the past. have you routinely resolved differences with a neighbor or a friend through a negotiated agreement? 5. Yes No Self-Assessment Quiz 1. do you routinely negotiate a last add-on before you close the deal? 9. As a parent.How good are your negotiation skills? Place a check in the box that applies to you.
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thus allowing each side to achieve one of their goals. If it is a relatively informal situation. • an allocation for moving expenses (employee goal) traded for a set number of travel days per month (employer goal).) • 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 “Quick Model” approach outlined below is good for simple negotiations. The Quick Model The easiest way to prepare for a simple negotiation is to identify all the issues. including those that are less obvious. etc. On the other hand.SECTION II: THE NEGOTIATION PROCESS Before you begin the process of negotiation. state. one for another. the process will be fairly straightforward. Examples: • a signing bonus (employee goal) traded for an annual travel budget (employer goal). They’re referred to as “win-win” because each side can achieve their goal. if the situation involves a number of detailed or complicated issues or the stakes are relatively high. decide how complicated the issue is. Examples: • office location (city. The Negotiation Process 9 . Then classify each one into one of three categories: Compatible (Integrative or Win-Win) Issues: Those issues for which both parties might have the same desirable outcomes.
Distributive (Win-Lose) Issues: Those issues that the parties are directly at odds with. The Comprehensive Model Negotiation is more of an art than a science. Examples: • an item sold by one party and bought by the other • wage increases won by one side. rearranged. stages can be combined. the other side loses. but feel free to try them when they seem most appropriate to your specific circumstance. The most typical stages are Preparing to Negotiate Planning a Strategy Exchanging Initial Offers Making Counteroffers (the Give and Take) Applying Pressure Making Progress Reaching Agreement The tactics are organized according to the stage at which they can be used to best advantage and listed as such in the Table of Contents at the front of the book. What one side gains. 10 50 Practical Negotiation Tactics . Depending on the situation and the parties involved. or even skipped altogether.
Power #1– #6 Stage 2 Strategy: Choose Overall Approach to the Process #7– #14 Stage 3 Initial Offer: Getting Started Stage 4 Counter Offer: The "Give & Take" Stage 5 Pressure Bargaining: Striving for Conclusion Stage 6 Key Methods: Achieving Progress Stage 7 Reaching Agreement: Settlement of Impasse Tactics to Consider #15– #21 #22– #31 Negotiation Phase #32– #38 #39– #46 #47– #50 Initiation Phase Resolution Phase 11 .The Negotiation Process Table 1: The Negotiation Process: Seven Basic Stages Stage 1 Identify situation as one for negotiation Preparation: Key Factors – Time. Information.
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SECTION III: 50 TACTICS FOR SUCCESS
Stage 1: Preparing to Negotiate
n many negotiation situations, the parties have time to prepare for the actual bargaining. In other situations, such as when you’ve been served something at a restaurant that you did not order, there is no time to deliberate. You have to be prepared to instantly recognize that the situation can be negotiated, and begin to bargain. You can have time to prepare if you simply ask for it. For example, at the end of an employment interview for a management position, the candidate was surprised to receive a job offer on the spot. The candidate wanted the job, but wisely recognized that she could negotiate the contract. She said that she was very interested, but needed forty-eight hours to make up her mind. She used the time to talk to current employees, and developed a list of perks and conditions that she then negotiated, before accepting the position. To prepare for a negotiation, do as many of the following activities as you can: 1. Have realistic objectives. Identify everything that can be negotiated, and set realistic objectives for each item. If, for example, price is a factor, determine the desired outcome and set a minimum (or maximum) acceptable outcome, beyond which you will walk away and choose another alternative (see Tactic #1: Know Your BATNA). Also determine your opening offer in light of your desired and your minimum outcomes. It is often helpful to list each specific item to be negotiated and your minimum acceptable offer for it, as well as your desired goal and an acceptable opening offer (see Tactic #5: Listing Items). Thus, for each factor, write down and stick to three figures:
1. An opening offer. 2. The desired “best” offer. 3. A minimum (or maximum) “worst” offer. 2. Learn about your opponent. By whatever legal and ethical means possible, learn everything you can about your opponent. Talk with friends, neighbors, co-workers, past negotiation foes, even family members. If you are able to guess or find out about your opponent’s real objectives and/or limitations, you can gain an invaluable edge (see Tactic #2: Know Your Opponent’s Real Objectives). 3. Gather all the facts. During the heat of negotiations, presenting critical facts or objective criteria can turn the tide in your favor. You can usually anticipate and collect this critical information in advance during the preparation phase (see Tactic #4: Use Objective Criteria). 4. Set ground rules. In labor negotiations, the parties first agree to ground rules such as where, when, who, and how often the negotiation sessions will occur. Detailed ground rules are not needed in most everyday negotiation situations, but there are times when they help people come to agreement. Agreeing in advance on the location for discussions can give one side an advantage (see Tactic #3: Control the Setting), but in other situations, the critical ground rule will be about timing (see Tactic #6: Timing is Everything), forcing both sides to reach agreement faster. In negotiating with family members, friends, or neighbors, one well-advised ground rule is to stop the talks as soon as anyone raises his/her voice, curses, or makes a threatening comment.
50 Practical Negotiation Tactics
Tactic 1: Know Your BATNA
At what point will you walk away from the negotiation? You improve your position in any negotiation if you can walk in already knowing your BATNA—your best alternative to a negotiated agreement. The BATNA is the outcome you prefer over what the other party has proposed; if you define it at the outset, you are less likely to agree on something during an emotionally charged discussion and regret it afterward.
Harvey Huff bought a new 1956 Chevrolet from a local dealer. After forty years, he finally decided to sell the car he had loved and carefully maintained in original condition. Harvey did not need the money, but he intended to move three thousand miles away, to a condo in Arizona. The ad he placed in the local newspaper produced only one potential buyer: Patrick Knight. Harvey: Mr. Knight: Harvey: Mr. Knight: Harvey: Mr. Knight: Harvey: Mr. Knight: Harvey: Mr. Knight: Harvey: Well, now that you’ve checked it out, how do you like it? It’s in great condition, just as you described it. Any questions? Will you take less? No. It’s easily worth at least $20,000. That’s the price. $18,000, tops! No thanks. Okay. $20,000. I need it for a new restaurant. Restaurant? Yes. We cut off the top of the vehicle and people sit in it and get served their meals in our “oldies dream car!” Never mind, I’ll keep it. I haven’t maintained it for all these years just so you can destroy it.
16 50 Practical Negotiation Tactics . For the past two months. as a last resort.Conclusion Harvey’s best alternative—his BATNA—was simply to hold on to the car for the moment. With only two weeks remaining before a threatened strike. providing them with a very good income for life. 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. and final offer. and either move it with him to Arizona or find another classic car collector who might buy it (perhaps for less) and preserve it. Example 2 Shari and Jim Jaggers own a successful West Coast pottery company. notified all the employees of their intentions. the Jaggers decided to seek buyers for their land. as Harvey had for many years. was a power play. The threatened strike became a reality. They learned that their assets would be easy to sell and were worth more than originally estimated. selling became an attractive alternative to a strike or prolonged battle. The union negotiators convinced the employees that this too. In this case. and equipment. but rather what the buyer planned to do with the car. and the Jaggers decided once and for all to sell their business assets and invest the proceeds conservatively. The union negotiators thought the Jaggers were bluffing. Conclusion Selling their business was the Jaggers’ BATNA. best. The Jaggers gave the union their “last. 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. inventory.” which was refused. The $56 million dollar business took them 30 years to grow. labor contract negotiations between the Jaggers and a local labor union representing the pottery’s craftsmen have stalled. The owners. When negotiations with the union became hopeless. his BATNA was not to hold out for more money. and it now employs 230 craftsmen. The union is demanding wage and benefit increases.
Tactic 2: Know Your Opponent’s Real Objective Each party in a negotiation will know.000. it’s still perfect. If you are the party making the offer on the house. 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. at some point. what the other party’s desired outcome is. and told John several times to let him know if he ever wanted to get rid of it. I guess I couldn’t take less than $20. How much are you thinking it’s worth? John: Well. A person who has to sell her home because her company is relocating her. for example. Example 1 Tom had always admired John’s 1861 Confederate rifle. because if the company does not provide relocation benefits. she might have to take a lower offer just to be able to move. Preparation 17 . you know. Just as important is the why. so Tom was surprised when John called him out of the blue one day with a proposal. Just running out of space. It is extremely rare—one of only 100 made with that bore and handle.000? That’s more than I planned. John: Tom: John: Tom: Tom. 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. What changed your mind about getting rid of it? It is still in perfect condition. This is a good thing to know. I’ve been thinking of getting rid of it for a while. you still interested in my rifle? Of course. Make me an offer. I’ll have to think about that. John assured Tom that this would never happen. sure. Tom: $20. right? John: Sure. Gosh. Are you finally ready to sell it? Yes. I think so. it’s to your advantage to know what is behind a seller’s decision to put it on the market.
He doesn’t want BigManu to know this because he thinks it will hurt his negotiating position. we 18 50 Practical Negotiation Tactics . Was Tom interested? Tom declined. if you could come up a little—say $18. we really want to buy your company. Tom: Okay. One of them mentioned that someone who is negotiating with him to buy a restored Winchester rifle for $18. Well. but thought this might explain John’s sudden interest in selling the rifle. let me think about it and I’ll get back to you. No longer worried about John’s motives. Rick needs to remain president of the company for the next two years. but I could get the money to you right away. so he is making it a condition of the sale that ALL current employees must be retained for a minimum of two years. has begun negotiations to sell his firm to BigManu Company.Tom: Okay. When Tom found out why John decided to sell his rifle. the owner of a small manufacturing company.000. I don’t think I can go higher than $18.500—we’d have a deal. Conclusion Tom entered into the negotiations suspicious of John’s motives. fearing that this will put all of his employees out of work. BigManu: Rick. but then he will be happy to retire. Tom now felt comfortable negotiating the price. Without some trust. let’s do it. However.500 had an 1861 for sale.) Tom: John. The sale price for the company has not yet been agreed to. (Tom investigated the “market” for a restored 1861 Confederate rifle by calling a few other collectors. and now the two-year requirement has become a stumbling block in the negotiations. Example 2 Rick. John: Well. He is two years away from retiring and does not want his business to fail before he does. parties to a negotiation are not likely to reach agreement. and we’re committed to keeping it open as a major division of our company. I’ve been thinking about your offer. it made the negotiations easier.
they will make you plenty of money and more than make up for any “operational” difficulties it might cause you.cannot guarantee to you that ALL of your employees will be retained for two years. and I hired every one of these people. you will have a say in how the employees are treated. In hopes of pushing the deal forward. BigManu’s negotiating team concluded that they were in the dark as to why this two-year requirement was so important to Rick. You’ll be in place to participate in our employment decisions. and he accepted it subject to agreement on the two-year employment guarantee clause. The price they gave Rick was actually more than he had expected. Rick: These people are the best at what they do. We still can’t find a way to do it. they decided to put their price on the table and revisit the issue after a price was agreed upon. my employees will prove to you that they are uniquely able to run this place. Within the parameters of efficiency and effectiveness. Let’s talk later. Rick: I built this business from the ground up. I just don’t want it to change after I’m gone. Working as a division of your company. We just can’t make good operational decisions with our hands tied. What is it you’re afraid is going to happen? Rick: I am convinced that with a two-year time frame. I just can’t go through with this sale. I need to give them some sense of comfort if this deal goes through. BigManu: We just don’t see a way to give you what you want on this. let’s talk about the job guarantee you wanted. Preparation 19 . (Between negotiating sessions.) BigManu: Okay. Without this commitment. BigManu: You know we want you to stay on and manage this division for us. and we think it’s an odd request anyway. I just want them to have a real chance to show you how good they are.
Rick: Well. would it? Rick: Well. Conclusion By masking his real objective (giving himself two more years as president before retiring). but we won’t be completely tied to operations as they are now. 20 50 Practical Negotiation Tactics . This wouldn’t have anything to do with your own plans for the future. that might work. to tell you the truth. Once Rick realized that he no longer risked anything at the negotiating table by making his need known. Surely you’ll be able to “protect” your people if they are as good as you say. Rich almost lost the deal. he agreed to allow BigManu to accommodate him without limiting their ability to make business decisions. I’m hoping to retire in two years. I certainly want to do all I can until then to protect my people. you’ll have a guaranteed “in” to protect your people.BigManu: We intend for you to stay and become a big part of our company. BigManu: Why don’t we guarantee to you that you will stay for two years? That way. Let me get back to you.
it’s a deal.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.) Prepare for the negotiations by controlling the setting—to your advantage or to mutual advantage. how can you trade the frog—he’s your best one! Dede: (Bailey’s other sister) Yeah. I like the frog. they control the breaks and environmental factors. 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. Cybil. (thirty minutes later) Bailey: So. Bailey: Cybil: Preparation 21 . I’ll give you my duck and frog for your whale and horse! Cybil: I already told you that I don’t really like that frog much! Jenny: (Bailey’s sister) What? Bailey. and go play somewhere! Cybil: Well … Okay. the frog is everybody’s favorite. they have the information they need at their fingertips. Make up your minds.) 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. such as a hotel conference room. Mother: Hush. and so on. (Think of the showroom tactics used by car dealers. girls.
That’s why she wanted to go to her house. The chief negotiator for Team A publicly challenged Team B to “negotiate non-stop. They had all been replaced after their decision to negotiate “around the clock” in Team B’s boardroom became known. Team A was whipped physically and emotionally. knew that her sisters liked the frog best and that they would help convince Cybil of its “value” and help Bailey make the trade.Conclusion Bailey. meals. The physical and emotional demands of 24-hour. as long as they met in the boardroom of Team B. When negotiations resumed in two months over another piece of property. Example 2 Two five-person negotiating teams had been trying to work out a deal for over a month. non-stop negotiations wore down the members of Team A. in their own familiar setting. Team A agreed to a settlement almost identical to the one rejected days before. Both sides desperately needed to settle a property dispute. while members of Team B were able to stay fresh. They were blamed for accepting the same deal that had been rejected only days earlier. About thirty-six hours later. 22 50 Practical Negotiation Tactics . Team A agreed to change the meeting place. having set up beds. was still going strong. around the clock. until we have a settlement. After forty hours of negotiating.” The chief negotiator for Team B agreed. The firm deadline was only four days away. Team B. Conclusion Team A did not realize the practical advantage they gave Team B when they agreed to negotiate in B’s boardroom. although only ten years old. not one member of Team A was chosen to return to the table. and other conveniences in the adjoining room. Team B had clearly used its home turf to gain a substantial advantage.
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. This uncomfortable negotiation followed: Larry: Will. When we got into it. though. Larry: Just make sure you’re comparing apples to apples. and he and Larry have always gotten along. I was kind of surprised at how high it was. but was shocked at the amount of the bill. I would have charged anyone else much more. I did get some estimates from plumbers.” This can hold up an agreement and cost you in the end. based on objective criteria (think property appraisals in real estate). about your bill. I gave you my “family” rate. and they were much lower than this. Example 1 When Larry’s cousin offered to help Larry finish the renovation on his bathroom. I anticipated much less work. Prepare for the negotiations by having an outside authority measure or weigh in on each side’s position. Let’s get the guys back in who gave you estimates. After all. and show them the actual work that got done. when Will presented Larry with his bill. If you think that the other party knows more than you do. Believe me. Larry: But Will. it became clear that all of those pipes had to be pulled and new ones put in. rather than give them the “advantage. When you first told me about your project. Will is a licensed plumber. Larry: Well. these plumbers certainly acted like they understood the work when they gave me their estimates! Will: Tell you what. If they tell us that they either Preparation 23 . Things turned sour. Larry had expected to pay him for his time. It was twice as high as the estimates Larry received from other plumbers before they started the project. Will: Larry. Larry was thrilled. you are likely to resent them for it and hold out.
From a look at the portfolio. Comparing the estimates to Will’s actual costs would have been counterproductive. I have been very diligent about making sure that the fund makes the most money it can without putting us at risk. they would have had to revise the figures. because (as Will pointed out) it wasn’t an apples-to-apples comparison. Example 2 After Stuart was appointed to the college’s Board of Trustees. I certainly didn’t mean to offend you. The estimates would have been higher than what cousin Will charged. and no one had ever questioned her performance. and decided to bring the matter up at a Board meeting. Conclusion When the other plumbers looked at the work. He was disappointed in the performance of the fund. while she wasn’t an expert. 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. 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. Larry: That sounds fair. Budget Officer: I don’t know what your problem is. they said. she had been investing the college’s endowment funds for many years. they had to agree that their early estimates were low. Had they actually prepared bids on the work.disagree on the need for that work or that they would have done it for less. my first reaction was that some of the investments 24 50 Practical Negotiation Tactics . I’ll revise my bill to meet the lowest estimate you get. he used his financial expertise to analyze the investments of the college’s endowment fund. Settling on the right objective criteria upon which to base a negotiation requires that both parties think through their options.
Now. and the budget officer was comfortable that the risk and expense of such a strategy was small and worth the effort. In this situation. but we can ask them to plan and cost out each move. but I think they more than offset the gains. I find that a more aggressive investment strategy produces a better return. I don’t want you directing how they’re going to go. how can we identify the right parties? Conclusion The two-month experiment did produce the results Stuart had anticipated. Stuart: No problem. I don’t question that they were sound at one time. then you and I can talk about changing our investment strategy. but such a strategy also increases risk and costs more money to administer. Okay? Budget Officer: Okay. because she did not have the background in investments necessary to trust such advice. there might be increased risk and some expenses for commissions. At the end of two months. Budget Officer: Yes. Stuart: Yes.were stale. considering commissions and all. but some of these stocks have really lost their value. We just can’t make up losses to the endowment fund without considerable impact on our annual budget. but I want to be involved in the discussions with them about what we’re asking. Preparation 25 . 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. Why don’t we ask two investment advisors who have some alumni ties to the college to do a mock investment of the endowment fund for a month or two? We won’t tell them about each other and they won’t actually do any real trades. the college is a private institution. As you know. if both of them demonstrate a similar strategy and produce better results after expenses. and its resources are limited. I have a suggestion.
and ask the other party to add to the list. not on what you want to spend. I need more money for clothes and CDs. wash the cars.Tactic 5: List All Items to Be Negotiated Break down the issues to be worked out into separate items ahead of time. you should each put together a “package” of several items on the list and work out a win–win agreement for these things. and for going out with my friends. if I give you an increase. This strategy can build trust in the negotiation process itself. (2) a later curfew. a sixteen-year-old who lives with her parents and three younger sisters. not just an allowance increase! There is: (1) a $10 increase. Example 1 Shari. and (4) different treatment from your sisters! 26 50 Practical Negotiation Tactics . Mother: That’s a large increase—and we just raised it last year! Shari: Well. Once you both agree on the list of things to be negotiated. besides washing the dishes every night and cleaning my room? Mother: You could cook dinners. (3) more chores. baby-sit your sisters. Mother: But your allowance is based on what you earn in your weekly chores. what else can I do. Shari: I’m four years older than the next-oldest. has asked her mother for a $10/week increase in her allowance. It will cost me more than $10—about $35 per week. Shari: Well. You can’t treat me the same! Mother: Well—so we’re talking about several issues. your little sisters will want equal treatment. cut the grass. 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.
Shari got the $10 she wanted and a later curfew. Now we have a package deal to propose … Preparation 27 . while your Dad and I go out. was avoided. item #11 (the clothing allowance). in the first session. An allowance increase. which the other children would have requested as well.Shari: Right! Mother: So … I suggest no allowance increase. while the mother won a Saturday house-cleaning and a night out each week. Management: (after calculating the total value of the five items during a break period) We agree to your package of five items. Union: We will agree to your proposal on item #6 (the number of paid holidays) and item #14 (the new overtime hourly rate). and item #23 (the wellness program voucher). And if you clean the whole house on Saturday. Then a “win-win” solution could be determined. I’ll pay you $10 to babysit every Wednesday night. if you agree to our proposals on item #3 (the paid vacation schedule). since all of their items were included as requested. The trading of items (where initial demands are discussed and agreed upon) begins. Now it is time for each side to list their desired outcome for each item. you get to stay out an hour later that night. opens by proposing the list of items. The union’s chief negotiator. but unlike your sisters. Management agrees. Shari: (pause) I like it! Conclusion Shari’s mother helped negotiations along by listing all of the items being discussed. Example 2 The union and management negotiating teams opened discussions with a list of 48 demands.
Then negotiations can resume on the remaining 43 items. thus removing them from the discussion table.Conclusion In most labor negotiations. other trade-offs are proposed and agreed to until only a few items remain. the two sides will at this point sign and date the list of proposed items. 28 50 Practical Negotiation Tactics .
$12. It was nice meeting you. Timing is everything! Example 1 Bob Hillard had been coveting a turquoise 1963 Chevrolet Impala Supersport convertible for several years. One day. I live a few blocks from here. 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. day. on Briarwood Road. Hi! What can I do for you? I’ve admired your ‘63 Impala for years.) Preparation 29 . the following conversation occurred: Bob: Car owner: Bob: Car owner: Bob: Car owner: Bob: Hello. That’s a generous offer. he saw an elderly man get in his dream car and drive away. thanks. say. Bob followed the man home. Bob made it a point about once a month to go out of his way and drive by the man’s house. One day. Not even for. Prepare carefully. Would you possibly be interested in selling it? No.000? No. which turned out to be only a few blocks from his own house. I love this car—restored it myself. time of day. He stopped and knocked on the door.Tactic 6: Timing Is Everything The exact month. just out of curiosity. (For the next three years. but money doesn’t mean anything to me at this point in my life … Well. As the man got out of his car. as he left the supermarket. and general circumstances under which negotiations take place can substantially impact the outcome. he noticed a FOR SALE sign in the yard. my name is Bob Hillard. and do your homework.
had issued a deadline of December 31st. as a matter of fact. and I promise to take good care of it. to seal the agreement at the courthouse? Sure. if a seventh vote could not be found by the pro-agreement side. December 31st. Well. Example 2 It was Sunday.Bob: Car owner: Bob: Car owner: Bob: Car owner: Bob: Car owner: Hello! I noticed your FOR SALE sign. The partner organization. I’ll see you on Monday. A third vote at 3:00 p. Follow me. so I guess I will be selling it.000. resulted in another 6-6 30 50 Practical Negotiation Tactics . The board members had met twice before. A majority was needed to pass the partnership agreement. (after a careful inspection) It’s a very nice car! I’ll give you $12. I’m moving to California to live with my daughter. the timing of his second effort was perfect and it enabled him to negotiate for the car of his dreams. for tax reasons. that’s a fair price. I can’t take it with me. and the vote was a 6-6 tie each time. and wondered if your ‘63 Impala might also be for sale … (obviously not remembering Bob) Well. the proposal would die at midnight. beyond which the project would have to be abandoned. Can I see it? Sure. Then it’s a deal? Yes. Conclusion While Bob did not achieve his goal during his first negotiation effort. and a twelve-member board of a large non-profit organization was holding a special meeting to decide whether or not to enter into a multi-million dollar capital project with a partner organization. Can you come back on Monday at 10:00 a.m.m.
Both sides caucused: The leaders on each side met to negotiate a compromise. Then. When the meeting resumed at 4:00 p.. That effort failed. Conclusion The leader of the pro-project group recognized that they might have a unique timing advantage..m. At 5:30 p. during an hour break in the meeting. as predicted. A member of the pro-project group quickly called for a vote after the leader gave a signal..m. timing was everything. the leader of the pro-partnership side heard someone say that the meeting needed to end by 5:30 p.. and it worked. For weeks. in the end.deadlock.m. the project had been stalled by 6–6 votes. Preparation 31 . because one member of the anti-partnership side had to leave at that time to attend a church service he had not missed in 27 years. a member of the anti-project group left the room. and the meeting was adjourned.m. the pro-project leader told his members to filibuster until he gave a signal and called for another vote. The measure passed 6–5 at 5:45 p. He planned for it accordingly.
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if you want to begin in a friendly. For example. Before you can do this. such as a third-party negotiator. a third party can serve as a mediator (a legislative body. for example. or one-time-only. as it can substantially alter the negotiations between two primary parties. Are there any outside people who might influence the process.Stage 2: Planning a Strategy he next stage is critical: Choosing a strategy. and Tactic #48 (Walk Away). 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. uncaring approach (Tactic #9: Control Your Emotions. In some cases. Third parties sometimes have their own hidden agendas. The overall strategy chosen does not limit the use of other tactics. decide whether the negotiations should be continuous. such as a buyer and a seller or a city and its union. such as Tactic #19 (Make a First and Best Offer). 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. After you have evaluated these factors. Tactic #33 (Bluff). and Tactic #10: Make a Reciprocal Buy-Sell Offer) are also useful alternative strategies. you must first evaluate your needs and those of your opponent. Identify all outside influences and hidden agendas before you develop your strategy. If you prefer to take a firm and direct approach. then Tactic #13: Set a Deadline or Tactic #11: Have an Expert Witness might be helpful. Tactic #43 (Nickel and Diming). Some of the tactics listed in this book are only suitable for single-session negotiations. Tactic #12: Find Common Interests can be helpful. 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 . as well as their bargaining history and financial and political positions. but in practice it will likely influence the whole process. might step in and help settle negotiations between a union and administration negotiators. Look at the personalities of each negotiator and see which side will be more vulnerable to pressure bargaining (Stage 5). A neutral. cooperative manner. Be sure you are aware of this at the beginning.
By assuming opposing roles. If there is a significant weakness in your position. For example.” The agent took the offer to the seller. Weeks later. “Please make any offer—they are motivated!” The buyer responded. I offer half the asking price. but the inside was a complete turnoff. 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). 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. The buyer loved the location. half-serious.side is either caught off-guard or (in some rare cases) a negotiator will be able to achieve an unexpected fantastic settlement. with “All right. The desperate owner agreed. The buyer said he wasn’t interested. 34 50 Practical Negotiation Tactics . His teenage sons had “trashed” the house. The agent explained that the seller was desperate. the seller’s agent called the buyer about the property. and the buyer was able to completely renovate the house and still have a great deal. 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.
Planning a Strategy 35 . so do not underestimate what you might be able to achieve. Surely there’s some flexibility in your asking price. Buyer: The air conditioning might have increased the value of the house. Carol wants $160.000. one buyer shows some interest. but quite frankly.000. Your demand should be high enough to give you room to compromise.000. First. Finally. but not so high as to end the negotiations before they begin. it is likely that your opponent will. Be realistic. her real estate agent told her that they were probably not going to get a buyer because she is asking too much. Buyer: We really like the house. Each time. but we simply can’t take less than $160. She has had it on and off the market for the last five years. your request must not be so low that the other party concludes that you are not negotiating in good faith. but the redecorating is of little value. but certainly not exceptional in any way. but the house has increased in value.Tactic 7: Decide How “High” Is High Your first demand in the negotiation process is the most important decision you will make. and just refuses to reduce it. with no success. If you consider the demand ridiculous. as well. Carol: We really want to sell. We also think that the neighborhood has improved over the last few years. we think $160. The market hasn’t gone up that much in six years.000 is very high. Example 1 Carol has been unhappy with the house she and her husband bought six years ago. Carol: Maybe not. It’s a good neighborhood. we’ve put a considerable amount of money into a new air-conditioning system and in redecorating. so think this through well ahead of time. And I don’t see a lot of difference in the neighborhood. and then look at the demand from your opponent’s perspective. You are not likely to get more than you request. After all. However. Anyone buying the house would want to change wall colors or add new carpets. six years ago you bought it for $60.
Example 2 The law firm of Bits & Bites was a Sioux City institution. Carol drove off a potential buyer by setting an asking price that was just too high. were still alive.000? Carol: We really can’t take less than $160. We’re curious.000 or 1% of profits (whichever is less) over the next ten years in order to use the name. The other law firm was prepared to pay $100. or she has unreal expectations. The firm now had over twenty-five law partners who owned the firm and continued to benefit from the reputation and name recognition of Bits & Bites.000 immediately. but they have no idea what the value of their firm’s name might be in this nearby city. though. Neither Edward Bits nor Edmund Bites. the founders of the firm. we are certainly interested in your request to “buy” our firm name to use in your city. When Carol refused to budge. the transaction also included some degree of consolidation of the law firms involved—not just the use of the firm’s name.000. A new law partnership from a nearby city contacted Bits & Bites and offered to “buy” the rights to the name to use in their law office in their city. and then $10. enjoying a statewide reputation for quality representation.Buyer: What if we offered you $100. 36 50 Practical Negotiation Tactics . the buyer took it as a signal that either Carol didn’t want to sell. Buyer: Good luck!! Conclusion The buyer expected Carol to counter the $100. Here’s how the initial negotiations went: Partners: Well.000 offer by coming down in price at least a little. as to how you think the name is going to benefit you. Inquiries to other law firms were not very helpful because in almost all of the instances. The partners are interested in selling the name. In any event.
we want $500. Partners: New law firm: Partners: New law firm: Partners: New law firm: Partners: New law firm: Planning a Strategy 37 . Well. We weren’t really thinking about that amount of money. you have a very solid reputation there. I really don’t feel comfortable doing that now.000 initially. Using the Bits & Bites name can only enhance our profitability. Yes. To offer it now would be an insult. I’m kind of embarrassed now. So. Thanks so much for meeting with me. In every instance. we do. What number were you thinking about? Well. that is a very high number. but we get to keep all of the money we’ve received up to that point. And we. We should assume. I guess this is just not something we’ll be able to pursue. If at any time we feel that you have “harmed” our name. We probably won’t be insulted. Let’s just pretend this didn’t happen. Give us some range. And even though you don’t have an office in our city. (surprised) Well. because you are in the state capital and your firm has handled a lot of high-profile political cases. (concerned about loosing the opportunity) Wait. one of these two attorneys carries the surname of the firm they are leaving. starting with the ten partners you describe. that’s just our initial figure. we reserve the right to withdraw our permission. expect to pay for that.New law firm: We are establishing a partnership of ten lawyers—the top two moneymaking attorneys in each of five local firms. and then 10% of your profits each year for as long as you use the name. that you anticipate to build a very profitable law firm. then. of course. it would be impossible to create a new name out of the names of our key partners. because we were not even close to that number.
The price they were willing to pay would have indicated what the naming rights were worth. In this situation. since they had initiated the contact. 38 50 Practical Negotiation Tactics .Conclusion Bits & Bites lost an opportunity here because their initial demand was so unrealistic with what the prospective firm thought the “naming rights” should cost. It immediately dropped the idea. Both parties were probably at a disadvantage. Either side could have asked for too much. because there was no “objective” criteria available to help them set a reasonable price. rather than negotiate. Bits and Bites should have let the prospective firm make the first offer.
They cost about $300.400 if the catcher and can are included. Peggy: I’m hearing one thing from Paula and another from Andy. not for $1. while another acts difficult. Example 1 So. and I know how you take care of things. Peggy: So. etc. Peggy: That’s fair. I don’t know what the deal is now. Peggy: Planning a Strategy 39 . angry. Peggy: I assumed they went with the mower. Andy: No. Paula: Go ahead and ride it home. I want to keep those.Tactic 8: The Good Guy/Bad Guy Routine The “good guy/bad guy” routine is a useful one.200! We should get $1. I can use them. Andy: No. Andy and Paula: Yes. Andy and Paula.200. One member of your team acts friendly to people on the other side (the good guy) in order to gain their trust and support. Andy: I want them… Paula: Go ahead and take them. what’s your price? Andy: $1. only three years ago. I heard that you want to sell your riding mower. we won’t need it at the new condo. Your opponents will want to avoid confrontation and unpleasantness with the “bad guy” and are likely to be more willing to cooperate with you. since they are sitting out in the driveway with it. 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. Peggy. I’ll go home and you can call me if you two can reach an agreement. threatening. Half what it cost us new. And take the leaf-catcher attachment and the gas can. so I’ll take it.
firm offer if they decided to continue negotiations.Conclusion Peggy thought she was getting the old “good guy/bad guy” routine. You are located outside our primary service area. She realized that it put her in an impossible negotiating position. perhaps even unintentionally.200 will be about right… Sandy: I can’t begin to pay that! Liz: Calm down. Example 2 Sandy (business owner): Miguel and Liz (representatives of a computer firm). Sandy: What? First of all. we’ve been fairly happy with your responsiveness. Miguel: I’ve figured $4. 40 50 Practical Negotiation Tactics . we’re here to negotiate a new service agreement. And we need to add a clause that holds your company responsible for machine damages. your rate of $3. Sandy.000 in service calls last year alone because your damn people don’t take care of the equipment. the quality of the technicians’ work. and your training programs. And we want to change the 24-hour service response time to 48 hours. Miguel: Well. She very wisely recognized the routine and forced Andy and Paula to give her a clear. Sandy. And cut the training hours from 55 to 20. We estimated that it has cost us more than $50. your account has taken too much time. causing our reps to spend hours on the road. Let’s talk. For the past three years. Miguel: But not at this ridiculous rate. Liz: But we still want to renew your contract.000 per month is one of the highest in town.
I’m afraid our relationship is over. I’m going on to lunch. (Three hours later) I’m back. Our customer base has grown. Sandy. Any luck. these terms will put me out of business—I’m a small 20-person operation. I hope you can meet my terms. Sandy believed that she was able to avoid a terrible deal and negotiate a fairly good one. I’ll stop back about 2:00 p. I want to keep you as a customer.Miguel: Sandy: Liz: Sandy: Liz: Miguel: Liz: No. I’ll explain on the way back to the office. you two? Good news. Miguel! We’ve worked out a deal I think you can live with. but Miguel’s right. and it’s not efficient enough anymore for us to handle smaller firms—especially those outside our region. Sandy. even though it was far above the previous contract. Then he left so Liz could convince Sandy that they needed to quietly reach an agreement she could “sell” to Miguel later.m. with a position he knew was unreasonable. If not. Conclusion Miguel and Liz used the good guy/bad guy tactic in the classic form: Miguel scared and threatened their opponent. What can I do? Let’s try to negotiate something reasonable before Miguel gets back. Liz. Planning a Strategy 41 . Sandy.
He decided that the best approach was to act indignant when he spoke to the company representative. but I recently was sold a $. It seems that the rate you are charging me on my home phone is $1.Tactic 9: Control Your Emotions Stay cool. Here’s how the phone conversation went: Customer representative: Mike: Over-the-Air Long Distance. 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. such as deals on computer packages and phone services. 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. and might even harden your opponent into an unfavorable position (for you or for both of you). made some very good purchase decisions for his small business. How may I help you? Hello. he was very unhappy. 42 50 Practical Negotiation Tactics .10 a minute rate at my office location.00 a minute. He had. because we have had a sick relative out of town and we used long distance a lot this past month. Control your emotions and use them to your advantage! Example 1 Mike prided himself on being an informed and educated consumer. I have a problem with my recent bill and my billing rate. This will put you at a distinct disadvantage from this point on. 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. in fact. The fault was partly his because he did not stay on top of changes. So. when he discovered that the long-distance company serving his home phone was charging him four times the rate currently being marketed by that company.
I expected the bill to be higher than usual.10 per minute rate on your long-distance service. 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. how would anyone who might only have residential service even know to ask? Well. But as a very good customer of yours. but this was quite a shock. of course it is not always possible to give existing customers some of the “offers” we have out. Mike: Customer representative: Mike: Customer representative: Planning a Strategy 43 . I realize that that might be the rate I started paying when I first took your service over eight years ago. Customer representative: Let me pull up your account. I would have known I was paying too much. and I also realize that if I had examined my bill closely. we certainly would have discussed your options. It hasn’t been increased at any time. But I am able to offer you a $. Well. (beginning to sound irritated. I would think you would have given me the best rate you offer new customers. to begin now. 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. Had you brought this to our attention before. I see that the rate you are being charged is the rate we offer for the type of service you have with us. Mike.
I am. but I can’t do that. (with a much angrier tone) Madam. I would hope that you would credit my account for this better rate for past service. a long-time customer of your company. If you can’t get me someone to talk to. Customer representative: Mike: Customer representative: Mike: Customer representative: Conclusion The supervisor waived the long-distance charges for the $500 bill and adjusted Mike’s rate to $. The latter would not have produced the desired results. Is your supervisor there? I’m certain that he cannot adjust your account retroactively. however. controlled voice) I need to talk to someone who can do it immediately. there’s no reason for this conversation to continue. and I want to speak to someone in authority so I can terminate my service. He was walking a thin line. But I’m looking at a $500 longdistance bill. but I am very angry with Over-the-Air Company. and I should be treated with more respect! I’m sorry. don’t think this is directed at you personally. I … (interrupting and in a stern. between controlled.10 per minute. either.Mike: I would imagine so. The best we can do is fix the rate for the future. after all. 44 50 Practical Negotiation Tactics . Wait—I’ll get my supervisor. which should rightly be $50. she kept Mike as a residential customer as well as a business customer. Mike’s willingness to show a measured “flare of temper” brought results. We certainly don’t want to lose you as a customer. In doing so. strategic anger and abusive behavior.
they would become dissatisfied with their pay and want their base pay increased. and that they should be asking for a fairer base wage for the work they do for you. and you just can’t be too careful. The most-senior employees want to have the right to refuse overtime and have those less-senior employees take the overtime. The employees’ negotiator finally decided to use “indignation” to break the stalemate. and it’s not what we’re even talking about. The owner was afraid that if the mostsenior employees routinely passed up the overtime and the overtime pay. On those overtime shifts. The owner told the employees that he was worried that during the overtime shifts. Working with fireworks is working with explosives. Owner: I’m just not willing to let my best people refuse to work the extra shifts during our busy season. Employees’ negotiator: (with a stern voice) You have been saying this for three weeks.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. 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. They will be putting the plant AND their fellow workers at risk by not being here. and it’s getting old. Owner: Now. lesssenior employees might be at greater risk of injury because they have to handle explosives. that’s just not fair. Where are your managers? Where is the training necessary to make Planning a Strategy 45 . Negotiator: (now beginning to get irate) You talk about the risk to your plant if the less-experienced workers are there on overtime shifts without the senior employees. I’ve got to have the employees with the most experience to protect this place.
Then you can’t have it both ways. (He begins to walk out. No one who takes a job with us can be unaware of that. What if we were to agree that the senior employees could refuse half of the overtime offered to them. All I’m saying is that the most-senior employees have to be on the overtime shifts. That’s all. don’t be so hasty. not at all. Had the owner let him leave. Either they are properly protected. You are not addressing the real issue for you: money. The safety of the plant demands it! (standing up to leave) This is just ridiculous. But we protect our people. Sit down. or they’re not. I’m not coming back. either the employees are properly trained. most of them continued to take all the overtime they could get.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. but not all? Conclusion The owner was on shaky ground with this one. The negotiator was also running a risk with his flare of temper. After the employees’ negotiator threatened to walk out.) Now. sit down. he became more reasonable. or they’re not. The end result was that the most-senior employees did win the right to refuse overtime. But the fireworks business is a business that involves risk. Until you’re ready to talk about that. though. the negotiator would have had to find a way back into the negotiations without losing ground. In practice. 46 50 Practical Negotiation Tactics . now.
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. 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. Mike: Mary Anne. I’m willing to pay or let it go for $800. However. Susan. Both sisters covet it. or sell it to the first party and consequently receive the full amount from the first party—thus giving up the object. a well-known negotiations professor from Harvard University. All the rest of the estate has been divided among the family. with the highest bidder paying the amount to the other side in compensation for their loss. Then Susan. has decided to use the “reciprocal buy/sell offer” process to settle this last piece of the estate. called the “Reciprocal Buy-Sell Offer. with winner taking all. 3) They can agree to sell the object to a third party. 2) They can flip a coin. so you set a price at which you agree to buy or sell the coffee grinder. my kids and I looked on eBay and everywhere else and found out that coffee grinders in perfect condition sell for about $500. and split the proceeds. A fourth option. since this one is in perfect shape and it was Mother’s. Planning a Strategy 47 .” is the recommendation of Howard Raiffa. Mike. The second party then decides to either buy it at that price and pay the first party. you will decide if you want to buy it for that price or receive that amount from Mary Anne (but lose the grinder). (two days later) Mary Anne: Well. I’ll give you 48 hours to decide the price. The first party decides on a price for which he or she will either buy or sell the object to the second party.
Both came to Raiffa to help negotiate a settlement. Lectures on Negotiation Analysis. I’ll pick it up tonight. Conclusion The “reciprocal buy-sell offer” process caused both Mary Anne and Susan to research the market value of the coffee grinder. Example 2 Howard Raiffa described a consulting situation in which he used the “reciprocal buy-sell offer” process in his book. They accepted his suggestion to use the “reciprocal buy-sell strategy.Susan: Mike: Well. which will bind us to the outcome. the lower bidder must agree to sell his half-interest to the higher bidder at a price that evenly splits the difference between the two bids. Here is my check for $800. They thus were able to determine the highest price each was willing to pay for it or receive for it. I choose to buy it. (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). to submit a sealed offer to buy/sell the business sixty days from today. in writing. Agreed? Abe and Bobby: Sounds good! Let’s draft and sign a written agreement detailing the process. Both sisters felt that the process enabled them to resolve the issue fairly. I suggest a slight modification to the process. Thanks for making this last step as easy as possible. You will both agree. After I open the bids. and then decide how much more “emotional value” it held.” Howard: Since in this case you are talking about a multi-million-dollar business. Two business partners had been working together for ten years to build a successful business.
Bobby. and we close by July 1st. Agreed. Conclusion Both parties wanted to keep the business. Abe.Howard: Abe: Bobby: Abe. your bid is $190 million. And I will arrange financing to pay you $180 million to become sole owner. 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. Planning a Strategy 49 . your bid is $170 million. I will arrange to sell him my half-interest for $180 million. and to close within ninety days. but only if they could become the sole owner. you agree to sell your half-interest to Bobby for $180 million. and both men had carefully estimated the market value of half the business. Bobby was willing to pay more than Abe to remain sole owner.
Based on seating capacity. This approach can also be reversed: The wife in this situation is a banker.” and then argue for the frugal alternative.” but there were substantial differences in price—differences that the wife did not see as a problem. This strategy worked. The wife was determined to buy the least-expensive brand rated excellent by consumer publications. the one he wanted (one of the least-expensive) was superior. she glanced at it and immediately deferred to his opinion. he decided upon a strategy: First establish himself as the “dimension expert. It can also work in reverse: establishing the other person as the expert. Looking at these statistics. Conclusion The husband became the “expert” in this situation by doing the homework. They both expressed an interest in finding a couch that offered the most “interior” space. They knew that sitting on dozens of couches in a single day would be confusing and would make it difficult to determine which one is the most comfortable and roomy. and created a spreadsheet to compare the five best-rated couches on their list. so when the husband wants them to make an 50 50 Practical Negotiation Tactics . When it came to comfort. the one that was the most expensive was superior. He thus ended up having greater negotiating power. When he showed his wife the detailed spreadsheet. The husband found the dimensions of the couches in the brochures and Web sites. 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.Tactic 11: Use an “Expert Witness” Establishing yourself as the expert on a certain topic in order to get what you want can be an effective tactic in the appropriate situation. The couple decided to limit their selection to those rated “excellent. and forcing him or her to control the discussion of the issue.
you gain an edge when negotiating a new plan for your company. and should therefore handle the problem. he argues that she is the expert. and Point of Service (POS) plans. He claims to lack the knowledge or insight to do the work—which he is then able to avoid! Example 2 A negotiator can often gain a valuable advantage on issues such as medical insurance or labor contracts by doing the homework and becoming an “expert.” If you spend many hours learning about Health Maintenance Organizations (HMOs).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 . Preferred Provider Organizations (PPOs).
The boys quickly huddled.Tactic 12: Find Common Interests You are more likely to come away with a satisfying outcome if you and the other party set the stage for agreement. I wouldn’t care so much. she decided to try something different. The two boys fought over the last piece of everything. These positive things are part of your goals and objectives. When they boys returned. and I really love the banana/butternut/ sour cream frosting on this cake. neither of you want to be embarrassed at the outcome. I also took out the garbage last week without being asked twice. particularly when things seem to be at a standstill. they saw that there was one piece of cake left over from their mom’s bridge party. and then asked their mom for a chance to negotiate with each other. because I am so conscientious about my paper route. They immediately began to fight over it. Example 1 When Russ and Bill got home from school. and their mother was tired of it. If this was chocolate icing. you want to reach an agreement that is favorable to an outside party. Usually. This is done by deciding at the outset what you both have in common: You both want to reach an agreement. Mom: I’ve decided that I’m not going to cut this piece of cake in half and give you both some. here’s what they said to her: I think I should be rewarded with the piece of cake. she made them share whatever it was. Be clear on what you have in common at the start. I missed dessert the other night because I had to get to baseball practice. This time. and neither boy was very happy. Russ: 52 50 Practical Negotiation Tactics . and so on. point them out at the very beginning of negotiations and refer to them throughout the process. the last piece of cake will get thrown away. That simply rewards your continual squabbling. you both want to complete negotiations by a certain date. like we usually have. Unless you can convince me otherwise.
Marilyn originally set her shop’s hours for 10:00 a. Planning a Strategy 53 . and I really like white cake. she opens her shop at 7:30 a.m. she got a visit from some of the residents.Bill: Russ: Mother: I think I should be rewarded because I cleared the table for Russ the other night when he had to get to baseball practice. so these hours worked out well. Now that her children are in college.m. Residents: Marilyn. 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. so that your customers can park on the street. and better than a fast-food restaurant with late-night hours and a drive-through window. I helped with the bags without being asked twice. It was the type of shop the nearby residents preferred. and that’s not my favorite either. to 3:00 p. This cake is white cake. and keeps it open longer so she can attract customers on their way to and from work. One day. We really want you to go back to your original times. The last cake we had was chocolate cake. Customers have started to park in nearby apartment lots. I can have the part with the icing and Bill can have the part with the cake and filling. That sounds like a wonderful solution.m. your new shop hours have caused your customers to park in our parking spaces. and her children were in school. Example 2 Marilyn’s Memorabilia Store was located along the main commercial street of a residential neighborhood. 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. We realized that if we cut the cake lengthwise.
and 6:00 p. We think they’ll be agreeable to the morning parking.m. or so anyway. Between 7:30 a. I really need that extra income to stay in business. my customers can’t park on the street.m. let’s see what the options are.m. Lets try it.m. and 9:00 a. The shared parking arrangement did work out for Marilyn.m. and I close at 4:00 p. And we don’t think you want your customers’ cars towed.m. But in order to keep my new customers. if residents haven’t left for work yet... The parking lot used for apartment residents is probably full from 7:30– 9.m. and see if it works. Most of our residents are gone by 8:00 a. I don’t think that would be very good for business. Identifying their shared interests caused the nearby residents and the customers to reach agreement.m.I’m sorry this is happening. and 9:00 a. rather than after work. 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. So.00 a. the off-street lots probably won’t be used by my customers. and usually the car is gone by the time a tow truck shows up anyway. if I go ahead and open the shop at 7:30 a. It is very costly to have cars towed. and is probably empty in the afternoon if they haven’t gotten home yet. I have to convince them to come before work. and the residents needed Marilyn’s shop.m. If you need to have the shop open more hours.. we have to be willing to tow the cars that violate it. Okay. Do you? Marilyn: No. 54 50 Practical Negotiation Tactics .? Residents: We certainly want you to stay in business here. Marilyn: Conclusion Marilyn needed the extra parking. But I really am increasing my sales by being open longer hours. and between 4:00 p.m. Do you think the residents of the apartment house would agree to let me advertise that my customers can park in their lots between 7:30 a. then we’ll try and accommodate you.
A few hours? I can’t—I’ve got to leave shortly for the drive home. I don’t. such as a deadline beyond which the union will strike or the date that an outside party has set to withdraw an offer that is in both your interests). How can I do that? You all live in this town and you know this house. That will take days! I haven’t been in this house for twelve years. the first. 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. let’s all take two hours to look around and make a list of things we might want. but it can also work against you if you set one that is unrealistic or you fail to plan for it adequately. Deadlines can be imposed externally (such as the government’s deadline to get a tax break) or internally (set by one side. But at Planning a Strategy 55 . let’s all take a few hours to look around. Well. one at a time: the youngest. Well. we can each take turns selecting things … Like each tool or dish. Jenny: Everett: Sue: Everett: Mary: Sue: Everett: Mary: Jenny: Everett: Okay. A deadline can help you make the best possible agreement in the shortest amount of time. etc.Tactic 13: Set a Deadline Be sure you know well ahead of time what the deadline is for completion of negotiations. Then we can sit down at this table at 3:00 p.m. how should we go about dividing up the furniture and possessions? I can’t talk about it. and start choosing things. We just don’t have the time … We’ve got to do this—the house is sold! Okay. Example 1 Four adult children have gathered at the home of their recently deceased mother.
Okay. All of us must come back before Saturday to take what is ours—agreed? Okay. Allan: What! Why did you not tell us this before? David: We never thought you would take three months to get to this point. and I appreciate your interest in the historic structure.Sue: Mary: Jenny: 5:00 p. 56 50 Practical Negotiation Tactics . if I cannot carry a negotiated and signed deal to my board by noon on December 31. And besides. Agreed. Example 2 Allan: As the negotiating team for the city. your attorneys know the tax laws. we all leave. then the whole deal is lost because my company will lose $10 million in tax benefits under a federal law that expires on midnight.. Allan: Let me confer with the city attorneys. December 31. this is December 29. Sue.m. being the oldest. However. if we are not finished. David: I understand your concern. can sell or give away what is left. Conclusion The mutually agreed-to process and self-imposed deadline was a fair method of negotiating—a lot better than the four of them arguing over their mother’s possessions. we cannot agree to these development plans submitted by your company until we have reviewed how they will affect the historic buildings.
Obviously.Allan: (One hour later. and I don’t like it.) I understand the December 31 deadline. Conclusion Knowing the external deadline gave David a significant negotiating edge. Let’s continue. we can’t get the reports we wanted in 48 hours. 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.
first-quarter grades are coming out at the end of the week. but I have a problem in my Spanish class. I’ll give you money for it. Control the use of the information. but remember that both sides have weaknesses. I’ll need to buy it again. as well as strengths. Example 1 Jason likes to play video games as soon as he gets home from school and do his homework later. while watching TV. and you can neutralize its effect on the negotiations. Mom: I gave you money to buy a workbook a few weeks ago. I bought the second one. don’t get mad. and I missed some assignments. Unfortunately.Tactic 14: Don’t Always Hide Your Weaknesses Be sure you know what your strengths and weaknesses are. But don’t lose it again. but his grades are good. and one of the ways to do that is to reveal a weakness at the beginning. He decided to preempt the discussion in order to make the best deal. Did you buy it? Jason: Yes. Mom: What’s that? Jason: A few weeks ago I lost my workbook. Mom: All right. and Jason knows he is getting a D in Spanish. and we used it a couple of times. His mother disapproves of his study habits. We had one at the beginning of the semester that we were using pretty often. we need to talk. so he was able to prevail upon her to let him continue. There will be times during a negotiation when you will want to catch your opponent off-guard. Jason: Mom. One day mine disappeared. as well as those of the other side. Now. Have a clear goal in mind AND all the information you need to make your points. He knows that a D will mean that he will have to change the way he studies. before your opponent tries to catch you off-guard. 58 50 Practical Negotiation Tactics . but that was actually a different workbook. and this usually means having all the right information. The objective is to negotiate from a position of strength. Then the teacher went back to the first one.
Its owners found out that at least three other buyers had been in contact with Jane. And those are hard classes—Algebra. His explanation made sense. And I know I have to be better about getting in all of my assignments. Obviously. If I don’t pull the D up to a C or better. But that Spanish grade needs to come up to a B!! Jason: Okay. It’s because I didn’t have the book. Thanks. I don’t think you’re taking your schoolwork seriously enough. he was able to continue to study the way he wanted to. and since he offered her the information up front. then I’ll agree to make changes. Mom: Well. Since I missed some assignments. All of my other classes are A. Conclusion All of Jason’s grades did improve over the next quarter. Mom: Well. Mom. I’m getting a D in Spanish for the first quarter—but it’s not because I’m studying in front of the TV. but I think you do need to change your study habits. all right. or borderline B. The work I did turn in was fine. and the D is directly related to my losing the book. Environmental Science.Jason: Another thing.(maybe C+). I’m sorry. I think you need to give me the rest of the semester before making me change the way I do my schoolwork. she trusted it more. Example 2 Jane once owned a piece of property she wanted very much to sell. Pizza Boy was interested and had even made inquiries about the property. Jason: Spanish is just one class. I’ll give you more time. my study habits are okay. Although his Spanish grade was only a C+. English. 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. The location was ideal for a convenience store or a fast-food restaurant. but all three deals Planning a Strategy 59 . B. so there’s no reason to think I need to change my study habits. I think I can do that.
it’s only the neighbor to the right of the property who has a problem. I’m very happy you’re interested in my property. You are a big enough corporation to withstand her objections. and it’s zoned for commercial use. This is how the negotiations went: Jane: Pizza Boy. I’ve got to warn you—you might hear that there is neighborhood resistance to your putting in a pizza restaurant. A tentative deal was signed. really. Furthermore. I think you’ll find that this is only one person. which was way below the price they were actually willing to pay. The Pizza Boy people figured that Jane’s asking price must be too high or that she is unwilling to negotiate. Pizza Boy: Well. The real problem. was that Jane’s neighbor had contacted each of the previous potential buyers and complained about their plans to use the property. What are you asking for the property? Conclusion Jane told them her asking price. But unlike your company. The neighbor’s attitude suggested that there would be major resistance in the neighborhood if Pizza Boy tried to put in a commercial establishment. either. Pizza Boy: We’ve checked the property out. Actually. the other interested buyers already have businesses in the neighborhood.had fallen through. 60 50 Practical Negotiation Tactics . since they were well aware of the negatives. though. When she contacts you. Jane: Oh. she will want you to think it’s the whole neighborhood. When the neighbor heard about the new buyer. What are her grounds for complaining? Jane: She doesn’t have any. I know. I’m sure. she started her campaign to keep them from closing the deal. however. They decided not to fight a disgruntled neighbor. Pizza Boy: Well. let’s assume that you are right. however. Pizza Boy was prepared for her call. Jane’s up-front disclosure of a potential problem allowed Pizza Boy to weigh the negatives with the positives. there were no unpleasant surprises to stop the deal. we’re not interested in neighborhood fights. and was able to politely ignore her.
190–192.750–$25. 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. The negotiator firmly states that it is their best offer in an attempt to gain a nice.000 Buyer Initial Offer ($21. Another common strategy is to start with the status quo. 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.Stage 3: Exchanging Initial Offers any offers and counteroffers are made during a typical negotiation—sometimes even hundreds. Exchanging Initial Offers 61 . (2004).000) Target Point ($23.750) Target Point ($24.500) Fig. 2: Distributive Bargaining Process. Perhaps the worst-case scenario with initial offers is when a negotiator has his or her initial offer immediately accepted and ends up feeling that he or she could have negotiated a better settlement if the initial offer had been lower or higher—the so-called winner’s curse. Adapted from Labor Relations and Collective Bargaining.500) Resistance Point ($25.500) M $21. “Distributive” bargaining (“win-lose” or “zero sum”) is used. by Michael R. as illustrated in the following figure: Seller Resistance Point ($22.000) Settlement Range ($22. None is as important as the first one. such as proposing to continue at the current rate or price. for example. The initial offers of both parties are usually set reasonably above or below what each believes to be the settlement range. Many negotiators make their initial offer the highest acceptable offer (Tactic #19: Make a First and Best Offer). quick agreement.000 22 23 24 25 26 27 Initial Offer $28. Carrell and Christina Heavrin. This is a practical starting point that will not anger the other side (and might even be expected). The initial offer sets the tone of the negotiations and reveals something about the strategy of each side.
if the buyer’s initial offer was $25. the process quickly narrows to the range between the initial offers.000 and $28. these points have set the outer limits. The settlement range is the distance between the resistance points. it is termed the settlement point – not the “right price” or “fair price.” but the settlement price. After initial offers are exchanged. the other side does not agree to this value). You can use a tactic in making your initial offer that will give you an advantage: When multiple items or issues are on the table. In the example. 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). 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). 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. thus producing a true “win-win” negotiation.000. When the two parties agree to a price within the range. the seller would immediately accept it because it is greater than the target point and the buyer would suffer a winner’s curse. Two extremely helpful tactics to be used immediately after initial offers are made are Tactic #15: Caucus and Tactic #20: Posturing. 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.In this example. Resistance points are the maximum or minimum beyond which a negotiator is likely to consider an offer unacceptable (and possibly walk out). See Tactic #18: Agree on Something As Soon As You Can. and is the range in which most negotiations actually occur. 62 50 Practical Negotiation Tactics . Experienced negotiators will begin the negotiation of several items by quickly proposing such a package. thus starting out on a positive note. A target point is the desired settlement value a party has set as a goal when negotiations begin. usually. each initial offer ($21.000) is reasonable.
or if a member takes on a role in the negotiations that has not been assigned to them. If the negotiations have suddenly gone in an unanticipated direction. To do so in front of your opponent would obviously undermine your team’s position in the negotiations. a caucus can be used as a break to calm the situation down. We’ll just have chips and soda. A caucus gives you an opportunity to work out problems with your own team in private. so we’ll have the party from 7:00 p.m. Shelly: Twenty friends? You’re kidding! I’ve just started on my list. If negotiations seem stalled. call a caucus so both sides can brainstorm new solutions to keep the negotiations going. And that’s just my friends from school! I haven’t started Exchanging Initial Offers 63 . so her parents sat down with their daughter to discuss the details. You can invite up to 20 of your friends. and I already have 25 names. We don’t want it to be a late evening.–10:00 p. Example 1 Shelly’s “Sweet Sixteen” party was coming up.m. There are many ways to use this strategy.Tactic 15: Caucus If you are part of a negotiating team. and presumably had an agreement. If the team is feeling pressure to concede on certain items. because it might disturb the neighbors. Shelly. calling for a caucus gives you a chance to get your team to recommit to a particular course of action. A caucus is when a negotiating team calls for a break and leaves the negotiating table to confer in private. the negotiations got out of hand when Shelly’s dad forgot what had been decided. Unfortunately. A caucus is certainly called for if individual members of the team become agitated or express frustration with the progress of the negotiations. make use of the opportunity to call for a caucus. without revealing their ideas to the other side. If the negotiations are heated. 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. Mom: We’re planning on having your party here on Saturday night. Her mom and dad had already talked about it privately.
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 then the number of kids won’t matter. In fact. Oh. Shelly. Dad. we’ll call you when we’re ready. (shocked) Jerry’s band from down the street? They’re a punk rock band! Their music is totally inappropriate for sixteen year-olds.m. alone. Your dad and I already talked about this and agreed that 20 guests would be the limit. okay. Actually. we could rent the VFW hall. That would be great! It would keep everyone entertained. (During the caucus. (excited) That would be so cool.” They would never expect a party to end before midnight. I think the band would be fine. We could play records and you guys could dance. It’s special!!! Well. And midnight is definitely too late. And can we bring in pizza? Or maybe one of those “mile-long” hero sandwiches? I like those—let’s do the hero sandwiches. I’m sure we can ask them to tone it down a little. Mom! This is my “Sweet Sixteen” party.—that’s so “baby. Shelly’s parents reviewed their first planning discussion and went over what Shelly’s mom thought they had already 64 50 Practical Negotiation Tactics . Time out! Dad. I think we can handle a few more kids—how about 35? And midnight sounds okay. Jerry from down the street is in a really good band that all of the crowd likes. 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. we need to talk. We’ll get a band—everyone does. I guess the VFW will work. (with some irritation) I’m not sure. That sounds like too many for here at the house.
But we can have the band. too? No way!! I want presents!! Conclusion In spite of their prior planning. Dad. Agreed. Okay. All right. her mom presented the revised proposal. midnight. That way.) Okay. Your mom and I agree—11:00 p.m. The item currently on the table was the company’s offer to give each Exchanging Initial Offers 65 . but your dad and I agree on getting a DJ to play. sorry. But you are limited to 40. A DJ? I guess that’s okay. to 11:00 p. is for little kids!! No. but we’ll schedule the party for 8:00 p. That’s so lame. but no Sweet Sixteen birthday party decorations.m. which was to make sure Shelly’s Sweet Sixteen party was a fun and safe evening. this mom-and-dad negotiating team became unglued during the negotiations. please!! 11:00 p. When they called Shelly back in.Mom: Shelly: Mom: Shelly: Mom: Shelly: Dad: Shelly: Mom: Shelly: decided. And we’re serving chips and sodas. can’t we? No band. and we will need to approve the list. and you can invite more friends.m. causing them to lose control and make compromises they hadn’t intended to make.m. Does that mean no presents. Example 2 The contract negotiations between the company and the union had been going on for days. we’re going to rent the VFW hall. Mom’s call for a caucus gave them a chance to regroup and re-state their original objective. we will be better able to chaperone. and not a huge production.
and the following conversation occurred. Union: You’re offering a choice between health insurance and tuition payments? What kind of a deal is this? Company: Hey. With the cost of college educations so high. The tuition benefits will encourage the workers to be prepared for new job opportunities. Union negotiator #2: Please—just a moment outside. Union: (angrily) I’m not presenting this proposal to my people. A lot of employees have spouses who can get health insurance coverage through their work.individual member of the bargaining unit the option of being in the health insurance plan offered in the contract or receiving the same amount of money the company pays for health coverage as a tuition reimbursement benefit for the employee or any member of his or her immediate family. it’s a good proposal. I’m just saying that tuition benefits are sometimes a good substitute for health insurance. Tuition in place of health insurances? They’ll think I’ve lost my mind. 66 50 Practical Negotiation Tactics . 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. The union’s lead negotiator misunderstood the proposal. Union: Why are you so concerned about new job opportunities? Are you holding out on us? Company: No. What is this. and thought he was being asked to choose between a health insurance plan and a tuition benefit plan for all members. The company’s negotiator didn’t recognize the misunderstanding.
I didn’t understand that your proposal was to allow each individual member to choose between the health coverage or the tuition benefit. and the parties were able to complete their negotiations. Exchanging Initial Offers 67 . (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. Good. the parties returned to the room. Negotiator #1 regained his footing. let’s move on.Union: Union: Company: Okay. I think that what you’re proposing is a really good idea. Conclusion Negotiator #2’s timely call for a caucus so she could explain the miscommunication in private saved the session. we’ll be back in 5 minutes. I thought that the contract would cover one or the other for everyone.) I’m sorry. and I apologize for explaining it poorly. Now.
Example 1 The buyer. not revealing that the item exchanged is a “throwaway. quickly checked the dealer’s inventory of sport utility vehicles in stock. A has gained something of true value and given up nothing he values in return. I know. you are making $200 profit over the true dealer’s cost. 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. according to my figures. Salesman: Let me talk to my manager. we’ve got expenses and we need to make some profit. but he makes a mental note to use color as a “throwaway” item. He doesn’t really care about the color of the new vehicle. this conversation takes place: Hobbs: Yes. Hobbs: Yes. Mr. (Salesman returns with manager) 68 50 Practical Negotiation Tactics .” Party B thinks that A has sacrificed one important objective to gain another. according to the Consumer Reports listing of the cost of the vehicle.” Throwaway items are those things that hold little or no value to you. you don’t want your opponent to know what these things are. when the two sides are only a few dollars apart. I’ll go get him. Here’s how it works: Party A exchanges the item for something of true value. it’s a great car and a fair deal. But for this price. and noticed that none of the vehicles have a green exterior. However. Salesman: Well. but … Salesman: But what? Hobbs: Well. I can go to another dealer and get a green exterior—the color I like best. Hobbs. but in reality. so be sure you present them in a way that suggests importance.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. At a point late in the negotiations. It is a useful tactic in any negotiations.
Miguel. Why didn’t you mention the color before? I didn’t expect to actually buy a new car today (note: not the truth).no it’s not. Employees will be paid time-and-a half for each of these days. and seniority will be used to determine who gets to choose the first day.. so I might as well get the color I want! What if we offer you the red one for $100 less? Is the color worth $100? I .. The days in question are: Exchanging Initial Offers 69 . The manager was convinced enough to sacrifice a final $100 for the throwaway. Then we have a deal. Hobbs successfully chose color as a throwaway item. Conclusion Mr. 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. All three employees must agree to the schedule. he brought it up and convinced the salesman and manager that it was an important item to him—possibly even a deal-breaker. At the very end of the negotiations.. I’ll take the red one for $100 less.Manager: Hobbs: Manager: Hobbs: Manager: Hobbs: Manager: We are offering you a great deal. Example 2 The office supervisor told the three internal sales representatives (Jenny. The three are sitting at a lunch table to discuss the schedule. 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.
They all agreed to their schedules. 27. December 24 Conclusion Carolyn has achieved her objective: She will be off December 24 and 26. 26. December 26. if they let her choose the two days she will be off and the five days she will work. January 2 None of the three are totally happy with the results. December 27. They agree. January 1. A second and third round produced the following allocation: Jenny: December 23. and each chooses their days to work: Carolyn: December 27. They have decided to start over. This would allow Jenny and Miguel to each work only two days. 30. She proposes to work five days. 31. 24. 70 50 Practical Negotiation Tactics . 30. 26 Miguel: November 25. January 1 Carolyn: December 24. Jenny and Miguel feel that they received something of value from Carolyn: She must work two more days than they must work. but that is a secondary consideration. December 30. She got what she wanted by giving up something she did not value: the two other days. 2 Jenny: December 23. it was assumed that each would work three) in order to have December 24 and 26 off to be at home with her children. in exchange for giving up earlier choices due to seniority. December 31 Miguel: November 25. each made a first choice of days they will work. She would actually prefer to work the extra days and get paid time-and-a half. 2 In the first round of negotiation.November 25 (the day after Thanksgiving) December 23. 31 January 1. Carolyn has decided to use as a “throwaway” the number of days she will work (previously.
three ways. can indicate that something you think is minor is really a major concern to your opponent. for example. it is often helpful to package the items in distinct groups and then deal with each package separately. a house valued at $250. their mom left specific pieces of jewelry and art in the will to each of the girls. 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. Anne and her sisters. Example 1 When their mother died at age 82. Autumn and Angela. In addition. were faced with the task of selling the house and disposing of their mom’s personal belongings. one might package all of the financial issues in one group and negotiate on that package as one issue. For example. and the stock and distribute the proceeds. 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. they met at the house. the antiques. and a collection of antique furniture. A reluctance to include one particular financial item with other financial issues.000. The house and much of the furniture has been in the Exchanging Initial Offers 71 . realizing that the total cost of a deal might make or break the agreement.000 with no mortgage on it. Anne: As I see it. Their mother’s will was very clear: the three daughters were to all have an equal share of her estate. Autumn: I don’t have any objection to selling the stock and distributing the proceeds and the cash three ways. we need to sell the house. When the girls decided it was time to talk about the estate. along with the cash. The estate’s assets included a checking and savings account totaling $450. 300 shares of stock in a pharmaceutical company.Tactic 17: Package Items In a negotiation where there are multiple issues or items to be negotiated.
It’s a buyer’s market now. There was a reason why she gave us what she did. We’ll split the stock three ways. Anne: I’m not sure I’m comfortable talking about trading the jewelry and art Mom left to each of us. Autumn: I think its awfully soon to be making these kinds of decisions. So we agree: We’ll leave $30. I’d really be interested in talking a trade for some of them. In fact. Mother was born here and grew up here. I’d like it all to stay in the family. Frankly.000 in the bank and distribute the remainder three ways. Soon. 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. Angela: Now’s not a good time to sell either the stock or the house and antiques. If Angela wants to hold on to her stock. we’re really free to do with them what we want. With no one living here. she’s free to do so. so I will be able to keep tabs on it. it’s a magnet for vandals. Anne: But that means we have to continue to take care of the house and its contents. Anne: Okay. If we want. Autumn: Sounds good to me. we will have a more valuable asset. but the operative word is “give. Angela: I live close by. we’d get a lot more for them. don’t you think? Angela: Maybe. I’d like to talk about the art works Mom left each of us. Angela: And we can talk about the art and jewelry? 72 50 Practical Negotiation Tactics . What would you think about agreeing today to distribute the cash and stock three ways. and if we wait a couple of years.” She gave those things to us. we can sell ours. and use it to fix the house up? Then when we make a decision. And we’ll fix the house up.family for years. and now that we have them. and letting everything else wait for another discussion. we’ll discuss again what happens to the house and the antiques. Why don’t we leave some of the cash in the bank.
sick. what kind of paid leaves there will be (personal. health benefits. and establishing a work schedule to accommodate evening and weekend clients. vacation. Several issues also needed to be addressed: the ability of employees to move up through the organization. funeral. tuition benefits.). Waiting to make decisions on those items until some time has passed gives the women an opportunity to look at a number of options. including benefits for partners in non-traditional relationships. Conclusion Autumn’s suggestion to package the money and stock because they can be easily divided by three made agreement on those items possible. and the assignment of the limited number of parking spaces.Autumn: I can agree not to do anything with the jewelry and art Mom left me before we talk. deciding whether there would be annual wage increases as well as merit increases. deciding to base the increases on a percentage or equally distribute the funds for increases among the professional and clerical staff. The third: Ben- Exchanging Initial Offers 73 . and deal with one area at a time? The first: Wage issues (pay schedules and the annual and merit raise issues). The following tasks needed to be a accomplished: establishing basic pay schedules. the antiques. Employees: We’ve got a lot of items to cover. the jewelry. but I’m making no commitment to trade. etc. May I suggest that we divide the items into three areas. Anne: Same with me. Angela: That’s fine. The second: working conditions (work schedules and promotional opportunities). and the art works—will be more difficult. The negotiations on the other items—the house. 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.
And paid leave clearly belongs with Wage issues and should be discussed with the pay schedules. tuition benefits. I would include that under the Working Conditions category. but I’d change your list. Let’s get started. to be honest with you. as well. That’s a program that can have a lot to do with how employees are able to increase their worth to the organization. Later negotiations were difficult. the paid leave categories are pretty clearly defined. because they’re really an incentive for better performance. Employees: Okay. Employees: I’m surprised that you would take merit increases out of a general discussion of wages. 74 50 Practical Negotiation Tactics . and the parking spaces). Also. Executive Director: Well. 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. There is more flexibility to use non-public money sources to reward employees who will cover night or weekend hours or who qualify for merit increases. So I’d like to see us get through the wage issues quickly and then move on. so there’s not going to be a lot of discussion on what our pay schedules and annual increases can be. we are an agency supported generally by public funding. Executive Director: Sounds like a good agenda. Executive Director: I think it’s a good idea to group items together. but the parties were able to come to agreement because the wage issue had been resolved. I think it also makes sense to include tuition benefits in the Working Conditions category. Wages should not include merit pay raises.efits (health insurance. that makes sense. paid leave times.
and they were making payments on school loans (for his undergraduate degree and her undergraduate and graduate degree) and on two cars. sets the stage for mutual respect and communication. and might not even be able to keep the house. Now. rather than disposing of assets. with her promotion sending her out of town. are divorcing. They had also furnished their house on credit. because Tim felt that Kathy had taken advantage of him during the marriage. Consider starting things off by presenting your opponent with a proposal you feel confident can be agreed upon without argument. They were in the middle of buying a house. You can also make an effort to agree on something your opponent offers early in the negotiations.Tactic 18: Agree on Something As Soon As You Can Negotiations are more successful if both sides can agree on something—anything—almost immediately. too. without suggesting any changes or modifications. Example 1 Tim and Kathy. It was her idea to buy the house and go into debt to furnish it. no matter how insignificant. They have no children. Kathy was asked by her employer to relocate to another city. The couple hoped to do the divorce without involving lawyers in order to save money. It indicates to your opponent that you are a reasonable negotiator. Tim: You might be leaving town. The discussion might become very heated. They met and married in college. Kathy’s first job paid more than Tim’s because she had a graduate degree. Their “property division” was mostly about dividing their debts. and she agreed. Tim worried that he would be stuck with all of the debt. after a brief marriage. Tim began working right after graduation. An initial agreement. and that you are entering into the negotiations with the intent to reach agreement. Kathy borrowed more money to go to graduate school full-time. but don’t think you’re going to stick me with all of the mortgage and credit-card payments. Exchanging Initial Offers 75 . and both have good jobs. You signed those papers.
I got my convertible. The first thing I’d like to talk about is what we are going to do about the cars. If both of us had been working the year I went to graduate school. Kathy: I suppose we should look at the school loans next. Frankly. I think it only fair that I take over repayment of all the school loans. 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. What do you want to do about them? Conclusion Having agreed to two items very quickly. They also agreed that Tim wouldn’t have to pay her that amount for five years. Tim: Well. as long as the cost was approximately the same. Okay. Tim: Okay. as you remember. ABC usually uses UPS 76 50 Practical Negotiation Tactics . a wholesale art dealer. 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. I can hardly argue with that. hold on. yes. I don’t intend to “stick” you with anything. an art gallery. I think that makes sense. and you got your sports car. I say we agree to transfer the convertible loan to me and you take over the loan on the sports car. When we bought them two years ago. we would have paid down our school loans more. Example 2 ABC Company. we decided to each pick out our “dream car” and that we would not overrule the other’s choice. The monthly payments are about the same. Kathy: Now.Kathy: Hey. even though the convertible is being paid for through a 48-month loan and the sports car through a 36-month loan.. and XYZ Co. and he could pay it in annual installments over a five-year period. about the house and furnishings.
and arrived on time and apparently in good condition. XYZ: ABC: Exchanging Initial Offers 77 . WeCanShipArt claimed that the boxes were not damaged in shipment—the artwork was already water damaged. XYZ’s manager failed to open the boxes or remove the artworks. There was no indication that the gallery’s electricity had gone out over the weekend. when the boxes were opened on Monday. XYZ contacted ABC immediately. water from the gallery’s air conditioning unit pooled on some of the surfaces of the warehouse area. The other times this happened. We’ll expect you to pay for the 12 works that will be in your show. ABC’s position was that the artwork was fine when it left their location. but XYZ asked specifically that a little-known company specializing in shipping art known as WeCanShipArt be the shipper. and that XYZ needed to either go to the shipping company or its own employees for compensation for the damage. and we will continue to discuss who is liable for the three water-damaged works. Unfortunately. ABC refused to pay WeCanShipArt until it received payment from XYZ. 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. and the boxes showed no external damage. or else the box was damaged in XYZ’s warehouse.to ship artwork. The three parties agreed to hold a conference call late Monday afternoon to try and resolve the dispute. it was obvious that the art in one of the boxes had suffered considerable water damage. ABC: Before we begin. but only if you let us ship it UPS. You can get the three new artworks here so that we can hold the sale as scheduled? Yes. and began preparing to return all of the artwork to ABC. 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. XYZ decided to cancel the promotional sale that was to start on Wednesday. However. They arrived right before the holiday weekend began. Holiday weekend storms caused the electricity to go off for different periods in different parts of the city.
we’ll take responsibility for all of the consequences: the lost sale to ABC and the lost promotional sale by XYZ. They also agreed that if the investigations are not conclusive. at its financial risk. and if word gets out that you think it was. they will split the cost of the three damaged pieces three ways. Now. how do we resolve the issue of the damaged artworks? Conclusion ABC’s decision to offer a solution to XYZ’s immediate problem. You can’t just ignore us. Having reached an amiable solution to the immediate problem. XYZ: Okay.m. the three companies were able to agree to undertake an investigation within each company to determine when the artworks were damaged. tomorrow and we’ll wait for payment on both shipments until we resolve how the artworks were damaged. regardless of where the original three artworks were damaged. We can guarantee that we will deliver the new order in perfect condition by 5:00 p. 78 50 Practical Negotiation Tactics . WeCanShipArt: Wait a minute. that’s okay with me if it’s okay with XYZ. If we don’t make the deadline.XYZ: Agreed. The artwork was not damaged while in our control. we’re ruined. ABC: Well. generated a like offer from WeCanShipArt and a reasonable response from XYZ. I can’t see how I can refuse that. And we’ll eat the cost of shipping.
consider using the “First and Best” tactic. we paid $5. we plan on selling our Ford tractor when we move. no hard feelings either way. I know you and Jeff said you’d like one because you have about five acres. The “first and best” tactic enabled them to settle the matter easily. Ann: Thanks! We really need one. but if you’re interested.Tactic 19: Make a First and Best Offer If you want to cut a deal but you don’t like the “give-and-take” negotiation process. Exchanging Initial Offers 79 . 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. we’ll sell it to you.000 for it six years ago. and even more hours in the fall picking up leaves. and it came with the bush hog and the leaf pick-up. Okay? No quibbling. Conclusion Ann and Colleen did not feel like negotiating over the tractor and running the risk that it might affect their friendship. 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. You must mean what you say and be prepared to walk away from an unacceptable offer. Jeff spends many hours mowing the yard every week. I don’t want to quibble. 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. period. We plan to put an ad in the paper next week. I don’t have any idea. Why don’t you give me a price? Colleen: Oh. What do you want for it? Colleen: Well. Example 1 Colleen: Ann. Ann: Well.
I came up with the best salary offer I can make. We want you. So. except salary. Here it is. I’ll either accept it or reject it. Okay? Vernon: That sounds good. and you know my current salary. and I’ll take 48 hours to consider it. 80 50 Practical Negotiation Tactics . (three days later) Vernon: Archie. I think we have agreed to all aspects of the job offer. I don’t like negotiating over salary either. I expect a fair increase. because it was several thousand dollars above what he decided was the minimum it would take for him to change employers. but I don’t want to start off in a new job by negotiating with my boss! So. who admired the way Archie negotiated his starting salary.Example 2 Archie: Well. as we agreed. I’ll get back to you in three days. I’ll discuss it with my wife and get back to you in 48 hours. on this slip of paper. I want the job. Conclusion Archie accepted the job offer. He also started the job with a positive working relationship with Vernon. Archie: Thanks. no questions asked. but we have internal budget considerations and we must consider equity with other employees. how about you making your first salary offer your best one.
m. First we’re going to dinner. and it really wouldn’t be fair if I wasn’t able to go along with the rest of the group.m. so he knew that he would have to sell them very quickly. so the prom is a pretty big deal to both of us. He and his date had decided that as long as they could join their friends for breakfast after the prom. curfew would be okay.” but it is also a source of valuable information that can help the negotiations proceed to a successful conclusion. you will probably have to modify some of your positions if you are to reach agreement. Exchanging Initial Offers 81 . He knew his parents would not agree to let him stay out all night. Fourth. then the prom. we’re all meeting at Donna’s so we can share a limousine. look for indications from your opponent as to what he or she believes is their best position. Posturing is indeed “acting. we’re not going to be dating exclusively after this summer.) During the posturing phase. 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. Sally’s Senior Prom is coming up. and ignore or deny any weaknesses in it. Kevin had “negotiated” with his parents before.” As you know. First. (Once negotiations get underway. 17 years old and a junior in high school. and we’ve made a lot of plans with our friends that I need to talk to you about. Present your position and demands as if yours is the only logical position. and in a favorable light. I’m the only junior in the crowd. since Sally is going away to college next year. This is called posturing—presenting your position strongly and completely. Kevin: Mom and Dad.Tactic 20: Posturing You might have to do a little acting at the beginning of the negotiations. Example 1 Kevin. It might be your only opportunity to explain your position without interruption. and then to breakfast at “Timothy’s. you know that Sally is really looking forward to this. Third. but he figured “all night” was relative. you only have one Senior Prom in your life. Second. was dating a senior. a 4:00 a.
I know you trust me and that I’ve earned the trust. we’ll have to get in our car and drive home very early in the morning. you have been fairly good about making your curfew—most of the time. happy about your plans to use a limousine so you kids aren’t driving. We’ve heard that they allow kids to drink. Sally’s parents trust us and have already said yes to her. of course. this prom is a one-night thing—a dance that is dressier than you’re used to. Donna’s parents are not as strict as they could be when a bunch of you are there. we know. However. From where we sit. You realize that this could be as late as 4:00 a. we told you that we would not be changing our rules to accommodate that older group. Also. We are. 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. We’re just not convinced that your entire group has been alcohol. And if we don’t spend the night. which could be dangerous. remember that when you started dating Sally and hanging out with an older crowd. they will be open for the Prom crowd only.Mom: Kevin: Mom: Kevin: Timothy’s usually isn’t open early in the morning. Finally. but it should not be oversold. Fifth. for sure. You make some good points. That’s the deal then? Okay. you and Sally need to call it a night (or really a morning). Donna’s parents will be there.or drug-free. Things can happen on a night like that that adversely affect you for the rest of your life. but to use that as a reason to stay overnight doesn’t make sense. That’s asking us to believe a lot.m. and the crowd we hang with doesn’t either. So. I believe you can pay a little more and have the limousine bring you both home. yes. the limousine will take us back to Donna’s house to spend the night. Second. and we’re just not happy about that. but because the owner’s daughter goes to Sally’s school. I’ve never missed my curfew. And. 82 50 Practical Negotiation Tactics . I think I ought to be able to stay out all night. so there will be plenty of chaperoning. We think that after the breakfast. Yes.
The spin-off business from our operations is huge. but there are limited options available. Also. and it will grow—everything from sub-parts manufacturing to the shipping business we generate. and a new. our Exchanging Initial Offers 83 . We need to find out what you’re willing to do to keep us here. but was disappointed to learn that they offer very few incentives. but we’re getting a lot of interest from other states willing to help us relocate. Tencro has approached the state’s Office for Business Incentives to see what. The assembly plant is out-of-date. one-floor operation would be very profitable. The company approached other states to see what incentives they might offer Tencro to locate in their state. because his parents could not disagree with such wellthought-out ideas. and it does not really need any help. With 800 employees. Tencro approached the state’s Economic Development Officer. other companies have received incentives and Tencro certainly wants all it can get. we’re of course interested in keeping you here.m. Sally and Kevin had a wonderful night and were quite happy to have the evening end at 4:00 a. regardless of the incentives. but it could easily add another 500 if it had the space on its assembly line. Tencro is not going to leave the state. and had this conversation: Tencro: We really want to keep our company here and expand it. EDO: Well. Example 2 Tencro Company decided to modernize and expand its business. If we can expand here. if anything. Tencro: Let me just remind you of what our company means to this state. It currently employs 800 people. we are one of the largest employers in this county. the state can do to help the company expand and rebuild. we’d be adding at least 500 new jobs.Conclusion Kevin’s strategy to hit his parents with all of his very good arguments at the outset gave him an advantage. Nevertheless.
if the new location is at the local industrial park. The industrial park land can’t be “free” because we have agreements with other companies that had to buy the land. and we’ve had to divert funds from business incentive programs over to basic services. and traffic signals. and we are willing to offer some training dollars for the new workers. schools. That might involve the state building housing for them at a reduced cost and providing them with some retraining. any plan by the state to build housing that is subsidized by tax dollars will draw a great deal of criticism. what do you have to have? Tencro: We need a new location—20 acres or so—to build our new plant. we will need the two-lane entrance expanded to four lanes. We need help in the cost of attracting and training the new 500 employees. 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. EDO: The state has very limited resources to pay for economic development incentives. now that the economy has improved.employees pump money into the economy by buying houses and cars.. Certainly. And we’ve been offered land practically free in the neighboring state. or else it will not be cost-effective for us to stay here. etc. We need a rebate on the local income taxes to help pay off the loan to build our new building. Just increasing the workforce by 500 will pull new people into the community and cause housing costs to rise—something our citizens on fixed incomes are very much against. Also. We need certain incentives. We can’t possibly give it away to other companies coming in behind them. There are more residents in the state demanding more public services: road improvements. We do want you to expand your plant. We 84 50 Practical Negotiation Tactics . etc. additional police. And. paying taxes. so we’d have to have it free here. We think that we’re the reason XYZ and ABC companies located here and we believe they are likely to leave if we do. while we value your company as a long-time corporate citizen. EDO: Well.
EDO: Get back to us as soon as you can. Tencro: Well. let us go back and take another look at our options.agree that the road into the industrial park must be widened and a traffic light installed at our expense. However. The new set-up was so profitable. we’re just not in a position to offer more than that at this time. Exchanging Initial Offers 85 . borrowed money for the new building. Other than that. Tencro was able to pay off the borrowed money in half the time. and the state did end up participating in a housing subdivision in order to keep the purchase price down for the new employees. and hired 500 new employees. Tencro bought land in the industrial park. but for the fact that each party did its homework and was aware of the true facts. the training and the new road improvements were all the incentives offered to Tencro. Conclusion The posturing by both sides could have caused the whole negotiation process to bog down. Future negotiations continued.
e. and you cannot withdraw it in good faith.” The perfect first offer. is the most (or least) the other side will accept. Example 1 Jay and Sue are looking to buy a house in a specific neighborhood because it has a good school system. particularly if you don’t know the other party’s “settlement range. They found one they both like that lists for $325. Let’s low-ball them and offer $290. which can be very useful). and that two similar ones on the same street sold for $330. think things through before you make or accept the first offer.000. such as last year’s price.000 and $337. Avoid giving away too much at the outset. Jay: No.000 this year.000.000—what they paid for it.) To prevent this from happening.000. never give them their asking price. then $320. The other party will probably come back with an equally ridiculous offer. and houses in this area sell fast. before someone else does. but you feel cursed because you gave away too much.Tactic 21: Avoid the “Winner’s Curse” It is often quite difficult to make the first offer. of course. Their realtor told them that it sold for $290.000 for a house that sold for $185. thus requiring greater concessions on both sides. We don’t know how anxious they are to sell or if they know the market. 86 50 Practical Negotiation Tactics .000 two years ago.000 three years ago). at minimum cost. That’s a fair price. offer $150. 2) Start out with an old number. The sellers must be willing to come down a few thousand … Sue: Well. or 3) Make an unrealistic offer (i. Sue: Let’s offer $325. because you have settled quickly.. 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. 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. Jay: No.” (You have won a settlement.
000 for each of us—$6. the sellers obviously would have accepted and Jay and Sue. I can’t tell our realtor $290. was very impressed with their presentation. They outlined how they would develop a new employee performance-appraisal system.500—half the difference! Sue: Great. the company president. Give us your lowest price. Frank: Me too. That’s an insult! Jay: Well. and the offer was based on fact: the prior negotiated price.000 total. Both parties felt that they made a good deal.) Bob: I’d do it for $3. 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.000. Sue: Then you do it. Lyle Foxworthy. If. realizing they offered too much. as Sue had first suggested. Let’s accept it! Conclusion Jay and Sue avoided the so-called winner’s curse by making a low (but reasonable) first offer. since they had already bought another house. (Bob and Frank meet privately to discuss the situation. Lyle: So what’s your price? Bob: Can you tell us what you have budgeted for this project? Lyle: No.000. (the next day …) Jay: They made us a counteroffer of $307. The buyers were very motivated to sell. then let them make a counteroffer. Exchanging Initial Offers 87 . as requested by the human resource director.Sue: Don’t be crazy. but who knows what they are planning on offering. they had offered $325.
88 50 Practical Negotiation Tactics . We’ve waited long enough. Conclusion Bob and Frank avoided the winner’s curse by forcing Lyle to make the first offer. Bob: That’s fair. I’m out of time. We’ll do the job.) Lyle: Okay.Bob: Lets make them give us a price! (Bob and Frank return to the meeting room. 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. What’s the cost? Bob: We want the job. That is all that’s left in this year’s training budget. but we know you must have an amount budgeted for this and we are willing to do it for that amount. but we can’t pay more than $18.000) their minimum price of $6. Lyle: Okay. They also ended up getting three times ($18. and you two come highly recommended. and it would not apply.000.000.
Skilled negotiators such as salespeople. which is often the case. and do not flatly reject it because it is not your offer. and attorneys use tried and true tactics in giving and receiving offers. the other party. Expect that the “total pie” will be different from what it was at the outset. In some negotiation situations. carefully evaluate an opponent’s offer. seeing no common ground. do not dismiss it because it is not all you want. 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). T Making Counteroffers (The “Give and Take”) 89 . but possibly of different values to your opponent. what appears to be an outer limit of the settlement range when the process starts can. because if you do not at least appear to be flexible. When the other party makes an offer. be enlarged (see Tactic #27: Expanding the Pie). This can produce a negotiated solution without giving up your priorities (see Tactic #28: Fixed Alternatives). Instead. Experienced negotiators seldom reveal their exact priorities and objectives. labor negotiators. It has often been said that the key to negotiations is to be flexible (see Tactic #25). One or more parts might be acceptable or indicate movement from their previous positions. is likely to pull away from the table. in fact. which would most likely weaken their position (see Tactic #26: Keeping Secrets). Use a prolonged period of silence (see Tactic #29) to convey something at a strategic moment. Wait to counter (see Tactic #24) because this will give the opponent the sense that you are serious about bargaining.Stage 4: Making Counteroffers he heart of the negotiation process is the give-and-take. Also. 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.
it looks like we can’t really plan a vacation for all four of us. so you can go without me. gives your opponent little maneuvering room and might even prolong or damage the negotiations. Jerry pointed out that he is expected to work until July 31st. Proposing only one solution to a problem. while it may be your best option. and quicker. 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. I don’t want to give up on a family vacation that quickly. His brother Sydney. Sydney. Option 1: No family vacation. The reciprocal opportunity to review and select among options rather than accept one (“take it or leave it”) also gives your opponent a way to win. We have four options. 15. In mid-June. finished his freshman year of high school at the beginning of June. Proposing multiple ways to reach your goal can get you to the same place. Dad: Wait a minute. and that he already made plans to visit with college friends on the East Coast for the two weeks after that. Here’s the discussion that followed: Mom: Well. except when you’re negotiating. Jerry had already started his summer job. 19. The week he would be home would be the first week of school for Sydney. Example 1 Jerry. Dad. completed his first year of college and came home for the summer around the middle of May. 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 . what say you. Option 2: Mom and I go before Jerry leaves on August 1. Let’s see what we can work out. He planned on being home for one last week before having to pack up and go back to college. their parents began discussing a family summer vacation.Tactic 22: Propose Multiple Options The shortest distance between two points is a straight line. Jerry will be here.
Then Jerry joins us until Thursday. Option 4: Jerry doesn’t return home the week between his visit to the Northeast and returning to school. you have a half-day orientation on Wednesday. and Carl). Example 2 Joe is an attorney whose job responsibilities include managing three other attorneys (Andrea. when we come home. so I won’t be able to meet up with you until Sunday. If we started the vacation on a Thursday. Sydney: Okay. Jerry: My friends and I have plans through Saturday of that week. Classes don’t start until Friday. but he can discharge employees for poor performance. we meet up with him that week for vacation. we could return home on Thursday and still get a week’s vacation. Bob. they were able to make that happen and not interfere with or argue about the merits of each other’s individual goals. Mom? Mom: Let’s do it. And I miss orientation and start school the next day? Dad: That’s an option. and one secretary in his litigation unit. one paralegal. actually. Joe has no say in who was hired by the corporate legal office to work in his unit. but it should work out all right. me. Conclusion The goal was to have a family vacation. It’s not perfect. By proposing numerous options. Sydney: Don’t I start school that week? I don’t want to miss school. Mom: Well. Jerry: Okay with me. and Sydney go to South Carolina before his school starts. Sydney: So what you’re suggesting is that the three of us are on vacation from Thursday to Sunday. if it’s okay with Jerry. Andrea considers Making Counteroffers (The “Give and Take”) 91 .Option 3: Mom.
or you can work out a “supervision” agreement with me so that I can better monitor your performance. Her job performance was acceptable. Joe: That’s all well and good. Andrea: We’re hired for our expertise. you can agree to a demotion so that your areas of responsibility are lessened to that of a paralegal. and resents any attempt by Joe to supervise her work. she made a two glaring errors in judgment. If you don’t like the way I do my job. The attorney for the other side has agreed to give me the additional time to file it. let me say that I’m handling the missed deadline on the pleading. which forced Joe to take action. isn’t it? But I don’t think just moving you really solves the problem. Andrea: You didn’t list moving to another unit as an option. 92 50 Practical Negotiation Tactics . but it doesn’t solve the problem—nor is it the only problem. 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. Joe: That is certainly an option. I thought I had cleared it with you when I told you what I thought they ought to offer and you said that sounded too good to be true. you know that wasn’t an okay to settle. It was just a comment. Andrea: Wait Joe. Andrea. so Joe took a “hands off” approach. rather than to put it off on someone else or for some time in the future. and I don’t see why we don’t have more independence. Joe: Andrea. To put it as bluntly as I can. In the last month. Before you start. You had no authority to agree to settle the Stites case without clearing it with me. you have a job-performance problem. we have a very big problem. however. I really see your options as follows: You can leave the corporation. It is to the corporation’s benefit to address that problem here and now. We have a formal procedure that you just don’t like to follow. Andrea: Well.herself to be a professional. Joe: Come on.
) Making Counteroffers (The “Give and Take”) 93 . Joe: That’s fine with me.Joe: That could be an option. in fact. If you are convinced that I have to undertake an “approval” program. lets talk to Bill about the move. or I would advise your next supervisor to put you on a very formal approval program. But in fairness to our mutual employer. Andrea’s move and subsequent “approval” regime did. Andrea: Well. my goal is the same is yours: to create an environment where you can perform to your full potential. and propose an acceptable alternative. rather than my staying here. the needs of the corporation have to come first. I want to stay with the firm. I hope we can work it out. It also changed her attitude about being both a professional and a team player in a corporate office. by Leigh Thompson. If that option is okay with you. but it would still require some change in the way you work: either a demotion. Conclusion Joe’s willingness to offer more than one solution gave Andrea a way to look at this unfortunate situation as an opportunity. improve her work performance. (Adapted from The Mind and The Heart of the Negotiator. Believe it or not. then it would save face for me if it comes with a move to another unit.
2) exchange items (those that can be easily traded off—one item for another item of equal value. only those with polar-opposite interests that must be divided. one person’s gain is another’s loss—zero-sum. then those which can be easily traded. three strategies are used. It is used only when each side has several demands. Exchange. because it can speed up negotiations and produce a more desirable outcome. Brooks: Right. Wow! We are off to a good start.500.Tactic 23: The “Win-Win” Approach (Identify Issues as Compatible. 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). Maureen: First. For example. we both want the sod. Let’s agree to those things.000. let’s see if there are any items we both want. Example 1 Brooks and Maureen Wilson have just finished building a new home.) Yes. With distributive items.). and finally. if a buyer negotiates a $500 reduction of a contractor’s bill. or Distributive) The “win-win” approach to negotiations is a basic tradeoff strategy of seeking maximum gains for both sides. They both agreed that this is the maximum they will spend on “extras” before moving in. Let’s see. 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. In essence. and a home theatre. 94 50 Practical Negotiation Tactics . that’s $9. These items often involve money). (She looks over the list. They have a fixed amount of money—$14. This approach is an important tactic. They each agreed to list the items they want and then to negotiate whether or not they will be purchased. the fencing. 3) distributive items (those items for which the two parties have exactly opposite interests. etc. thus making it necessary to find a middle ground on each.
We have $1. I’ll trade your sidewalk and trees for my whirlpool bath.# 1 Sod Item Cost $1. which takes another $3.500 $2. which I’d like to keep in the bank. Maureen: No.000 $1. that makes sense.500 $500 $1.500 left.000! Brooks: Good.000 $3. I’d like to spend some of it on lighting upgrades.500 $5. and we both get things we want.000 $2.000 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. Can we split it evenly? Brooks: Okay.000 $5.200 $200–$2. These are all permanent immediate needs. $750 for lighting and $750 in the bank.000 $500 $1. Making Counteroffers (The “Give and Take”) 95 .
management and union negotiators found that a “winwin” approach to negotiations worked well. Drug-Testing Program 96 50 Practical Negotiation Tactics . 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. Pension Increase 3. This year. The combined lists total thirteen different items: Desired Outcome No. finally agreeing to split the difference on the remaining amount (distributive items). even in difficult years. 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. Profit-Sharing 5. Length of Contract 2. both sides exchanged lists of initial demands at their first meeting.Conclusion By taking the time to list all the items each person wanted and their cost estimates. During that time. Wage Increase 4. 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). All items to be negotiated and their desired outcome for each item were put in writing for review.
signed. Job Security 13. First. No Strike/No Lockout 10. At this point. Next. Health Insurance Employees pay 20% Continue cur. Finally. Clothing Allowance Based on senior. Overtime Assignment 8. they accepted the union job security proposal (#12) in exchange for the management subcontracting proposal (#11). and the union clothing allowance proposal (#13) for the management funeral leave proposal (#8). one Making Counteroffers (The “Give and Take”) 97 . Subcontracting 12. and (#9) to continue the often-discussed no strike/no lockout provision. They proceeded to draft the language to settle these issues. Next.6.Distributive rent program co-pay Exchange Exchange 7. the management profit sharing plan (#4) was exchanged for the union overtime assignment plan (#7). 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. Paid Funeral Leave 9. they began to trade off the exchange issues of similar value and nature.Voluntary ity 2 days Continue current provision 10% 10% No provision $50/month 3 days Continue cur. (#5) a new drug testing program. eleven of the thirteen original issues to be negotiated had been agreed to. the negotiators agreed that they had compatible positions on three items: (#1) length of contract. and removed from the table.Compatible rent provision 15% Exchange 15% No layoff provision $100/month Exchange Exchange Exchange In their second meeting. Shift Differential 11. they exchanged the economic issues of approximately equal cost: the union pension increase proposal (#2) for the management shift differential (#10). Because they held opposite positions on these issues.
if both parties start from reasonable positions. Sometimes the classic “split-the-difference” method is helpful in locating a middle ground. Both sides first agree that all issues to be discussed will indeed be listed and openly discussed. The tactic offers several advantages: First. or distributive so that the negotiations can begin in an organized manner.side’s gain is the other’s loss. but it can be very effective when a negotiation situation involves several issues. They then identify each as compatible. you can use the process to settle many of the other issues on the table. when you exchange items so that each party achieves their desired outcome on one of the two. negotiations begin on a positive “win-win” note. Conclusion This tactic is simple. exchange. Second. These two distributive issues—wages (#1) and health insurance (#6)—were the most challenging to settle. but a middle ground was eventually found on each and negotiations ended. 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. 98 50 Practical Negotiation Tactics . A middle ground often must be found on each of these distributive issues if you are to reach an agreement. Third. when you agree on the items where both parties have similar desired outcomes.
and looks like you are belittling them. Rob stays busy all day and evening with other activities. It is especially important that you do two things: take your time before rejecting any offer from the other side. you know. Rob: Making Counteroffers (The “Give and Take”) 99 . the location of the TV. So when’s a good time? Jasper: (without hesitation) No way. Let me finish. and refrigerator. This isn’t high school. Example 1 Jasper and Rob met when they were assigned to the same dorm room their freshman year in college. so he wants a quiet room late at night. and on what would be considered acceptable “sharing” of each other’s junk food supplies. and studies late into the night. 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.Tactic 24: Wait to Counter As the negotiations begin. and from a strategic standpoint. Mutual respect must be part of the negotiation process. Jasper studies during the day and early evening and likes to stay up very late watching TV and visiting with friends. Waiting a respectful amount of time to counter. stereo. Jasper: Finish or not. A counterproposal delivered too quickly tells the other side that you haven’t or won’t even seriously consider their offer. do not offer a counterproposal right away. they decided to establish “room rules” so that they would both be comfortable with the room assignment. The final issue had to do with “lights out” and quiet times for studying. Here is how the last issue was handled: Okay. Rob: Wait a minute. Since they didn’t know each other well. even if you aren’t going to accept their offer. last item: I’d like it quiet in the room at night. and can help you reach your goal. each side is expected to put an offer on the table. They agreed on which part of the room each would have. will make your opponent feel good about the process. I’m not interested in a curfew. so I can study.
Jasper: Midnight. Example 2 ABC Company’s management was being restructured and compressed in order to facilitate its new “just-in-time” manufacturing philosophy. b) written complaint to a floor manager if the matter is not resolved in 5 days. and that’s not negotiable. and d) a hearing with company owner if the matter is not resolved in 20 days. Neither side anticipates that there would be 100 50 Practical Negotiation Tactics . midnight during the week is the only thing I’ll consider. c) a formal “meeting” with plant manager if the matter is not resolved in 10 days.m. is all I’ll consider. Failure of both young men to allow one another to have their proposal considered caused the relationship to break down. 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. curfew on TV and other noise every night. the positions of non-union crew leader and floor manager would both be eliminated. Rob: (there is no hesitation in this voice) No.m. employee grievances had to go through four levels of supervisory review and appeal: a) verbal complaint to the non-union crew leader. No agreement was reached.Rob: (Rob was about to suggest midnight on Mondays through Thursdays.) Listen. Under the restructuring. The union contract required that management renegotiate this change in the grievance procedure with the union. The appeals procedure would have to be altered to reflect the restructuring. 10:30 p. Under ABC ‘s contract with the union. I want a 10:30 p. and that’s it. but changed his mind when he saw Jasper’s attitude. Jasper: (without taking a breath) At best. and the union foreman would report directly to the plant manager.
and I’m certain your members will be okay with it. and began the negotiation session concerning the grievance procedure. Certainly. Union: You obviously didn’t come here to negotiate. Our guys are prepared to accept a shorter grievance procedure if we can find a way to ensure that you’ll take our grievance issues seriously.any objection to the change. We think that this is an opportunity to eliminate some of the adversarial aspects of the grievance procedure. The redraft is simple and straightforward. Union: Hold on. We just cut out two steps. In fact. Company: (rather abruptly) Let’s not drag this out. because those management layers are gone. Union: As you know. this redraft is a very simple change to the contract. rather than go on to appeal it to the company owner. After initial pleasantries were exchanged.) We’re just not happy that you are proposing a Making Counteroffers (The “Give and Take”) 101 . If in 20 days he/she has not been satisfied. Company: (no hesitating) Trust me. The union was prepared to accept the plant manager’s position as final. An aggrieved employee can make a request for a meeting with the plant manager. We’ve simply eliminated the first two steps. rather than as a judge on the merits of the grievance. our grievances often signal to management that there are real problems on the shop floor. ABC Company’s negotiator explained the management changes soon to be implemented. but to dictate. no one can complain about that. he/she can take the grievance to the plant owner for a hearing. the employee and the foreman would meet with the plant manager and attempt to resolve it. Company: Here’s the new draft of the grievance procedure. (Note: An attitude change sets in. and everything else stays the same. the union arrived at the meeting prepared to support a streamlined process that called for the employee with a grievance to discuss it first with the union foreman. If the union foreman felt that the grievance had merit. We’ve got a couple of alternative models for you to consider. We’d like you to consider the plant manager’s role as a problem-solver.
This time. After a cooling off period. 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.two-step grievance procedure instead of a four-step procedure. and actually accepted a three-step procedure. 102 50 Practical Negotiation Tactics . rather than in the 35 days the current system provides. Union: We’re very serious. to prevent any change! Company: (surprised) What? Why would you object to this? Your guys will get a final decision in 20 days. the two parties did meet again. You can’t be serious. the company entertained the ideas the union had tried to propose before. and we’ll strike if we have to.
Making Counteroffers (The “Give and Take”) 103 .m. If you are flexible. Bill’s family (parents. two sisters. successful negotiators remain flexible because new solutions to old problems often surface during a negotiation. Nancy: Sue. 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). Be open minded. Sue’s family (parents. Mom says you. and we’re really not able to enjoy either one. The couple used to have Thanksgiving dinner at both families’ homes. and identified the range of options they feel comfortable with negotiating. we’ll get to our side. They flipped a coin to see who “got” them and the new baby this year. and ten nieces and nephews) always ate around 5:00 p. established goals. and the baby aren’t coming for Thanksgiving dinner this year—that you’re going to Bill’s parents’ house. and now have a new baby girl. But after the negotiation gets started. and at least five aunts and uncles) ate around 7:00 p. Even before the baby’s arrival. one sister.m. 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 brothers. They’ve done the research. and Sue called her mother to let her know that they would not be coming for Thanksgiving dinner this year. you can adjust your demands or goals to include such new ideas. it’s just too much to do both. Sue: Yes. Next year.Tactic 25: Be Flexible A negotiation begins with both parties having some idea of where they hope to end up. and do not dismiss something said by your opponent just because it came from the opponent. Sue and Bill decided that they had to begin alternating their Thanksgiving Day visits between the two families. Sue’s sister Nancy called her to talk her into coming anyway. four brothers. their spouses. Bill’s family won. Bill. Example 1 Sue and Bill have been married four years.
but she won’t tell you. So that doesn’t work.. some people have to work on the Friday after Thanksgiving. I know that I would rather not do two Thanksgiving dinners on Thursday. I mean. I thought of asking Mom if she could move dinner up to noon or so. Nancy: I’ll let you know. Nancy: What if we did Thanksgiving on Friday? Sue: What? Nobody does Thanksgiving on Friday—that’s un-American! Anyway. Mom’s very upset. Celebrating the next day seems odd. 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. we’ll come to Mom’s. There’s nothing “special” about Friday. By being flexible. 104 50 Practical Negotiation Tactics .Nancy: It just won’t be right without you guys. Conclusion Nancy’s goal when she called Sue was to talk her into coming to their Mom’s Thanksgiving Dinner on Thursday. she suggested a unique alternative. I bet everyone could make it on Friday. it’s okay with me if you can sell it to everyone else. Nancy was able to accomplish the real goal of the negotiations—to make sure that the holiday would be celebrated with the whole family present. Sue: I don’t know. either. Nancy: If we keep the time at 5:00 p. and it became the family’s new tradition. the holiday will be over.m. Sue: Next year. When that goal looked out of reach. Everyone in Sue’s family liked the idea of celebrating on the Friday after Thanksgiving. but then I realized that the rest of you already go to your in-laws earlier in the day. Thanksgiving is Thursday. Nancy: We’d make it special by all of us being together. Bill won the coin toss for this year.
Kids’ Home: As you know. Unfortunately (for Kids’ Home). Estimates for building a new orphan home ranged from $12–$15 million. but the principal of the fund can’t be touched. We only have maybe $2 million a year to put toward this charity. They are meeting with the city to ask that the land be donated by the city for the project. The foundation has a substantial endowment fund. a non-profit organization for orphaned children. but we need some assurance that you will be able to build and operate the orphan home at that location. City: Can’t you borrow the money from a bank to build the facility. Kids’ Home: That’s why we brought the foundation’s officials with us. we’re committed in theory. but we can’t fund all of the $12 or $15 million. we hope to break ground early next year for the new orphan home. We’re hoping to get a commitment from them to build and help fund the operations of a new facility. Kids’ Home hoped to get $500.5 million is available for distribution to numerous charities. 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 need the city’s help by allowing us to get the city land donated to us (for free). and raise the money to pay it back? And can’t the foundation grant you money on an annual basis? Making Counteroffers (The “Give and Take”) 105 . Foundation officals: Oh. the foundation’s regular annual grants come to roughly half of their available funds.000 a year for operations. Each year. the interest income of around $6. City officals: We can probably give you the land for free. Kids’ Home and the foundation have decided that a parcel of city-owned land would be ideal as a site for the new building. depending on the cost of the land. Kids’ Home is also hoping to get the city to encourage the foundation to commit to full funding of the building project.Example 2 Kids’ Home.
We wouldn’t want to make such a commitment to a bank. and really taxes our ability to raise funds. 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. but we’re willing to look at it. And “donations” aren’t a very safe collateral for any bank that wants to loan us money. Why not ask the state to issue no-interest bonds? It can do that for non-profit organizations. We probably would not be able to participate. We’re a nonprofit group. I’ll contact the state tomorrow. 106 50 Practical Negotiation Tactics . Kids’ Home was able to acquire state-issued no-interest bonds backed by the foundation’s pledge of interest income to build the new orphan home. We’ve never committed our funds to pay back a bank loan. If we borrowed $15 million at 10% interest. Foundation: City: Foundation: Kids’ Home: Conclusion By exploring alternative financing plans suggested by the city.Kids’ Home: Borrowing the money gets very expensive. it could end up costing double that amount.
Smith: We don’t know what you’re talking about. and often lasted until 2:00 or 3:00 a. the Smiths could count on parking their car directly in front of their house. each side has to know generally what each other wants to accomplish. and trust can only be established if all parties interact truthfully. and we would very much like to talk about how we can resolve these issues. Jones: We’ve obviously gotten off on the wrong foot. At the same time. These parties could get rather loud. In order for a negotiation to be successful. The Jones’ two older children—girls in their early 20’s—often had friends over on Friday and Saturday nights. However. But the Jones clan had four cars altogether. the neighbors began to have problems. Successful negotiations depend on trust. Mr. Before the Jones family moved into the neighborhood. Mr. Example 1 Soon after the Jones family moved in next door to the Smiths. The Jones family let their tree branches hang over the Smiths’ back fence and rub against the Smiths’ garage roof. They asked to meet with the Smiths to talk about these disagreements. yet not reveal all of your goals and objectives. and asked the officers to cite the Jones kids for parking too close to a corner.Tactic 26: Keep Few Secrets One of the most difficult skills to master in a negotiation is how to be candid. it is not acceptable to lie. and often took up all the space along the street in front of the two houses. you might not want to reveal all of your priorities at first. The Smiths called the police to complain about a late-night party.m. Making Counteroffers (The “Give and Take”) 107 . you should be careful not to misrepresent your position to such an extent that your opponent will feel that you have lied. It is perfectly acceptable to say that you are not ready to reveal certain things. and you probably won’t identify your throwaway items or tell your opponent your bottom-line. The Jones’ two younger children—boys in their mid-teens—hit baseballs into the Smiths’ yard and scared the Smiths’ dog. The Jones family suspected that the Smiths called the police.
we’re good now? Mr. we thought you might have called the police about our kids’ party and our cars. and was met with the following: Mr. they’re hitting baseballs into our yard.) 108 50 Practical Negotiation Tactics . Mr. In good weather. we have a problem walking long distances in bad weather. the late-night parties are a problem. that wasn’t us. I’ll talk to the boys and we’ll make sure they play baseball in the park. and they won’t be having friends over more than one night a weekend from now on. Mr. the next time the boys were out playing and the ball came into the Smiths’ yard. then they’ll need to come in at midnight so that their talking doesn’t disturb you. we would like to work out some solution. Mr. a lot of problems. Also. Jones: Okay. And the music is to be off at midnight. Almost every day. Jones: We’ve already talked to the girls about the parties. and not in the back yard. Jones came to see what the problem was. Muffin.Mr. they kept it. fine. Is that everything now? Mr. I guess. but we do know that someone has complained. yes. (A week later. Jones: Well. we’d like to be able to park our car in front of our house. 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. So. Smith: Well. And we’ll make sure none of our cars are parked in front of your house. Mr. if they are outside. If you can tell us all the things that we have done or are doing that have caused you to be inconvenienced. It is really very disturbing. At our age. Smith: No. Mr. Jones: I wish you had mentioned that the last time we talked. since you’ve asked. Smith: Yes. In spite of the Smiths’ assurances. Smith: Well. Smith: You know that your boys are causing our dog.
The union laborers walked off the job on Friday. the tree was clearly over the fence.” Forget all we’ve agreed to do—we’ll just enjoy the use of our property. Its local headquarters has a union to handle its international shipping. Neno has been negotiating the sale of its business to a British company. But we didn’t call the inspector. you’ve said that before. Jones: (at the Smiths’ door. Jones: Sure. Unless Neno can get the Union members back to work on Monday. have labor unions. Union officials are afraid that a Japanese company might purchase it. or European companies do. The British insist that a very strict confidentiality provision be part of the negotiating process. and too bad for you! Conclusion The disagreements and unpleasantness continued until the Smiths finally sold their house and moved into a condominium. and the deal is close to being final. You obviously don’t want to be “good neighbors. but Neno cannot tell the union this. Example 2 Neno Enterprises is a shipping company with extensive global operations. although none of the facilities outside the U.Mr. or the deal is off. Japanese companies often do not “recognize” labor unions the same way U. 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. Neno’s president and the Union representative met to discuss the walkout. Mr. because they didn’t like a grievance decision. Making Counteroffers (The “Give and Take”) 109 . You could have seen that yourself. Why didn’t you tell us? We can’t read what’s on your mind! Mr. The union knows that the company is up for sale.S. the British firm will walk away from the deal. Smith: Well.S. irate) I can’t believe you people called an inspector on us. We would have fixed the tree if you had asked.
I know it’s not news to you that this business is up for sale. then there’s probably no harm done. It’s not the time to have one. Union: We think that the grievance decision affects our wages. is still a labor shutdown. Neno: All I’m saying is that there is a difference. If everyone is back on Monday. and if the guys are back on Monday. we don’t. I think it already has. Neno: Look. But I have to have everyone back on Monday. Our guys are prepared to stay out a lot longer than Monday. Neno: Look. the slowdown as a result of no one working Saturday and Sunday won’t be noticeable.Neno: You know this is a wildcat strike and that it is in violation of our contract. I’ll forget all about the strike. But if your guys are out past Sunday. no harm-no foul. this is a legal strike under the contract. Have the guys back on Monday. I need your guys to come back to work on Monday. I can’t really be more explicit than that at this time. Therefore. do you? Union: No. We can’t put up with the kind of decision we got on our grievance. You really don’t want to do that. But we also need to make it clear that we expect you and whoever might buy your company to take our contract seriously. I promise you. we will resolve it to your satisfaction by the end of the day. Anyone who buys the company will have to honor the contract we have. maybe by next Friday or the week after that we’ll have our guys back to work. We’ve not had a labor shutdown in 20 years. You don’t want to mess up our negotiations. so the union won’t be hurt by the buyout. We’ll meet with all of the parties on the grievance first thing Monday. If they do come back. 110 50 Practical Negotiation Tactics . If that’s going to have a bad effect on your being able to sell the business. it will impact our marketability. Union: What aren’t you telling me? A labor shutdown. I’m certain that if we can sit down and talk next week. whether it’s for one weekend or a week. any interruption in our shipping could affect how these buyers look at our business. And one company that is interested has a really good track record on expanding the businesses they buy.
the union was willing to trust Neno—even though he couldn’t tell them everything. But I need to tell my guys that this is important to them as well. as well. I can. the sale was finalized. Can you assure me of that? Neno: Yes. Because the parties had dealt honestly with each other in the past. If I could. rather than make up reasons. I would be more specific. Making Counteroffers (The “Give and Take”) 111 . But I can’t. Conclusion On Monday. Union: Okay. but the British firm will allow them to organize at their foreign locations. Union: Okay. I’m going to go along with you because you’ve always dealt straight with me. He told him that it would mean that the union would not only keep its jobs here. was the right decision to make. while the grievance was being resolved. Neno’s decision to respect his confidentiality agreement and simply tell the union that he couldn’t disclose all the information. we’ll be back to work on Monday. and it’s that important to you as well. Neno called the union negotiator in and briefed him on the sale.Union: It’s that important to you? Neno: Yes.
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”)
keeping her Saturday free. or we lose a whole year. Roberto: But I need to start the direct mail and newspaper ads within two weeks. I’ll do it now. Example 2 Roberto: I can’t properly advertise this new program with a $5. I’ll find a way to do without one part-time person. Roberto: Well. B.000 for advertising. that is enough time. but the company president does not share your optimism on this program. Felipe: Sorry. (long pause) Felipe: Let me give you three options: A. and clean it.000. I’ll approve $15.Amber: row before your basketball game. Conclusion At first. I have three hours. I can’t help. I can accept B. Take it or leave it. Felipe: (Roberto’s supervisor) Sorry. Amber resisted the chore she hated. At least this way the program will have a chance to succeed! 116 50 Practical Negotiation Tactics .000). Use the $5. Three. but no TV or anything until it’s done! (pause) Okay. I’m not going back to him again to discuss this program. she chose the one she most preferred. I’ll approve $15. but I will cut your staff by one part-time person (or $15.000 for advertising. But when her mother laid out the schedule and gave her alternatives. Clean it after your game. but I will cut your travel budget out completely.000 in the budget.000 budget! I need at least $20. or C. Felipe: Well. Roberto: But it will never generate enough interest if no one knows about it.
would enable him to adequately promote the program. which was his goal.” He offered Roberto three alternatives of equal cost.Conclusion Felipe was willing to think “outside the box. Making Counteroffers (The “Give and Take”) 117 . thus achieving his goal of not having to ask for a larger budget. One alternative. Roberto believed.
Jones. 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. 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. and the annual merit raise she was getting from the company was the same 3% other employees were receiving. I have to tell you that while I appreciate what you have done for me. you are a valued employee. After a few minutes of silence.Tactic 29: Prolonged Silence When negotiations have hit a critical stage. but one side comes back with a non-negotiable demand. Example 1 Susan. Susan: I hope so. This should have resulted in an automatic promotion and a sizable pay increase. he can make an open-ended statement. inviting a response. Susan knew that she was considered a valued employee and that her boss would want to do the best he could for her. and 118 50 Practical Negotiation Tactics . received a glowing report from her boss on her job performance. You know my commitment to this company. Here’s how the negotiations went. Jones: I certainly do. I think you would agree with me that I have performed well above expectations this past year. I very much appreciated the fair job performance review you gave me. It was 16% less than she had been led to believe she would be getting. the promotion had not yet been approved. I am very disappointed in the company’s decision not to promote me and to limit my merit increase to 3%. The negotiator for the other side says nothing. Susan: Mr. nearing her third year with the company. If his opponent cannot agree to the demand but does not want to end the negotiations. She was determined to hold her ground for at least a 13% pay increase and a promotion. Unfortunately. 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 must ask you to try to get both. Jones to continue to offer solutions. I would very much appreciate it if you could ask the company to reconsider. Well. of course I will be glad to do that. maybe we can talk about the promotion later in the year. Conclusion Mr. the company’s refusal to grant them now was a harder position to support. if management can see their way to giving you the pay increase now. it could help. Making Counteroffers (The “Give and Take”) 119 . Jones went to management and convinced them that they should give Susan the promotion and the 13% raise. If there is some flexibility in your request. Susan’s silence prompted Mr. 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. Once he acknowledged that both items might be awarded sometime in the future. and I think that I really haven’t been dealt with fairly. because I feel my future with the company might be at stake here. Promotions of this type are all but automatic around here. Okay? (says nothing) Let me check it out and I’ll get back to you.or three-year period. I really want you to stay with the company. (says nothing) Or. and I’m sure management will agree. I suppose I could get the promotion approved with the proper presentation. and sell it to management that way. but a pay increase of that size might be more difficult. I could probably find a way to phase it in over a two. (says nothing) If I can’t get that pay increase approved right now.
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. My bosses might not have been inclined to expand the agreement anyway. The parties agreed to continue the previous terms of the agreement. Mr. Mayor) said that she was considering running for office. The mayor. Town Council Representative: I think you’re wrong. but now they’ve got to ask what Madame Mayor’s motivations are.Example 2 Two local governments entered into a tax-sharing arrangement in order to provide joint services to citizens in a more efficient manner. 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. and were trying to settle on new and expanded areas when one of the elected officials (Ms. and representatives of the elected officials of the two towns were meeting to renew and possibly expand the agreement. The term of the original agreement was nearing its end. The mayor’s negotiating representative wanted to complete the negotiations on the expanded agreement. and until she does. has colored these negotiations. the people Madame Mayor currently 120 50 Practical Negotiation Tactics . by saying that she might run for Chair. She has not decided what she’s running for. Also. The end of the agreement coincided with the election cycle for the two towns. This is how the negotiations went: Town Council Representative: Well. but the officials had hoped to complete the negotiations prior to anyone involved announcing for office. He decided to push for a simple renewal of the original terms. The office she was thinking about was the office held by her counterpart in the neighboring community (Mr. Town Council Chair). Mayor’s representative: No. I don’t think it’s a problem.
Making Counteroffers (The “Give and Take”) 121 . and the agreement was renewed with no new provisions. He either had to end the session or figure out what to say to reengage the other side. Conclusion By remaining silent. Town Council Representative: (silence) Mayor’s representative: I would think that at least the proposals that don’t involve budget changes could be pursued. the Town Council representative’s position prevailed. Mayor’s representative: Well. I don’t know what her reaction will be. I hate not to attempt to add some additional areas to the agreement. I’ll go back and tell Madame Mayor your position. Town Council Representative: (long silence) Mayor’s representative: (after an uncomfortably long silence) Well. Town Council Representative: (silence) Mayor’s representative: I think it would look very bad for both of us if we spent all of this time negotiating and we don’t end up with anything new. I think we really have to drop back and just propose a renewal of the tax sharing agreement without adding any new items. the Town Council’s representative left the mayor’s representative with no room to maneuver. In the end.represents have to worry that her desire to switch governments might taint the negotiations.
the brook was the property line separating her property from a neighboring farm. Joe. You are more likely to be successful if you identify a range of options that fall within your comfort zone than if you have a fixed bottom line with little wiggle room. Example 1 Madeline bought an old farmhouse outside of a small town. I have a problem. had redirected the brook further into her property. Neighbor: Well. As was sometimes the case in these parts. Obviously. which an upstream neighbor had built. She discovered that a rock barrier. Your rock barrier has sent the brook onto my property and it is too close to my gazebo. when one of you might say. the brook and rock barrier are on my property.Tactic 30: Always Leave Room for Dessert Negotiating is the art of give-and-take. You will have to remove the rock barrier. or we will be at an impasse. Madeline: Hi. The property came with three acres of forest alongside a meandering brook. She traced the brook back along its course to see why and where it had changed its path. you should always enter the talks with a good idea of what you are willing to agree to. One day. Madeline built a gazebo about 500 yards from the brook. The reason I built it was so that I could protect my patio. It calls for compromise. Having an iron-clad demand probably won’t give you enough room to reach an agreement. after the gazebo had been there for about five months. Madeline. 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. she noticed that the brook came within 100 yards of it. in a small clearing.” Avoid making that “necessary concession” too narrow: It should be large enough for both of you to step into comfortably. “I have to have this. She went to discuss this problem with the upstream neighbor and had every intention of demanding that the barrier be removed immediately. and began to renovate it as a home and a pottery shop. The brook 122 50 Practical Negotiation Tactics .
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. Madeline was able to protect her gazebo. at least I’ve maintained my property line. When she found out that this was not going to solve her neighbor’s problem. This will put these houses right next to me. restore her property line. I won’t remove the rock barrier. she widened her range of options. What if you removed the barrier for a short time.extended right up to my back door when the rain was heavy. if the brook is redirected. but I don’t know what I can do about it. I’ve lost 400 yards of property on my three acres. Making Counteroffers (The “Give and Take”) 123 . Madeline: Yes. 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. you have not only threatened my gazebo. what I need is to protect my property line and my gazebo. My neighbor on the adjacent farm wants to sell part of his property for a housing development. but you’ve changed the boundary line of my property. She left room for a compromise. and return everything as it was. Conclusion Madeline’s objective when she met with her neighbor was simple: Have the rock barrier removed. and allow the neighbor to protect his home. Also. which enabled her to achieve her goals. but only if I have a clear understanding with you that the barrier will be rebuilt to protect my house. I understand that. By expanding the range of options available to resolve the dispute. Neighbor: I’m sorry. Madeline: Well. Neighbor: I can do both of these things. Madeline: But by diverting the brook. It might not be necessary to make such a dramatic change. I couldn’t have that. I can’t have the brook in my house.
000.000. what they really need is for you to cover the costs of dependent coverage.000.000. the company can make your pensions much better. But only a few of our people are close to retirement age. Pilots: Look. and the premiums for health care just keep going up.000. Company: This could not come at a worst time for us. However. The pilots want dependent coverage paid for by the company. Pilots: So you are projecting that the increase in dependent coverage premiums will average $200. that would be the minimum increase. then the pension benefits overall will increase by $10.000.Example 2 The contract negotiations between the pilots and the airline had been going pretty well. With long-term planning and investments. The airline industry is in a slump. we know that health insurance premiums might skyrocket. and we know that with this new contract term of five years. as it has always been. The company wants to trade paying for dependent coverage for better pension benefits.000 a year over the next five years? Company: Yes. you are taking a risk on the costs increasing.000 (which we reasonably should have expected to pay in premiums) in the pension account now. with all wage and operations issues resolved fairly early. This is just a cash-flow problem that your members have to understand. And we cannot afford that $1. The projections for the next five years were that these costs would increase to about $1. Over the next five years. If we invest the $200. As best as we can tell.000 figure. 124 50 Practical Negotiation Tactics . the discussions of the employee benefits package bogged down on the issue of health insurance costs and pension benefits. the airline paid a total of $200. This would be a better benefit in the long run.000.000 to cover the premiums for dependent coverage. Everyone was afraid that the dispute would cause an impasse and a possible strike. dependent coverage could cost us $1. and are willing to keep pension benefits the same. Over the last five years.
can we agree to a year-to-year agreement on dependent coverage. or invest in the pension plan? Company: Yes.000 to either pay one year of the premiums.000 actually carried them through four years. Conclusion The company was committed to limiting its exposure to $200. Pilots: Since the concern is about agreeing to a 5-year commitment without knowing the increases we might have in health insurance costs. we are. Making Counteroffers (The “Give and Take”) 125 . so the decision to be flexible was a good one. however. The health insurance market stabilized. If we can get two or even three years out of the $200. with a cap of $200. then those funds will not be available to invest in the pension plan. by agreeing to let the company cap its exposure for dependent health coverage. that would be worth it. and the pilots knew what to ask for when the contract expired. if they were that high.000. Company: If the company spends the $200. Company: Then it’s okay with us. Are you willing to risk not having an opportunity to increase pension benefits? Pilots: Yes.000 the first year on the premiums.000 available. The $200.Pilots: But you do have the $200. The dependent coverage is more important to us now than the pension benefits. It initially believed that the only option was to put that money into pension benefits. The pilots expanded the range of options. the company will not be expected to give us this benefit.000? Once the cap is met.
Buyer: Way too much! Saleswoman: Well. Example 1 Car buyer: What. $45. be sure to add up the total cost. I recall the day you drove it out of here. do you want to look at something else? Buyer: No.000 car.Tactic 31: Cut Salami Slices One way to overcome anticipated or exhibited resistance to a proposed cost is to cut it into smaller units or “slices of salami. and compare it to your strategic objective.000 for a Volvo? I bought the one I’m driving for $19. if I can give you this car with a $300 monthly payment. If you are on the receiving end of such a tactic. Saleswoman: I’ll be right back. I love this car. I guess it would be around $600 per month.” and “low monthly rates” are examples of the salami tactic.” Salesmen use this standard tactic with “big ticket” items: They present the total cost in small enough pieces to sound reasonable to the other party.500! Saleswoman: Yes. it’s a deal? 126 50 Practical Negotiation Tactics . I just can’t imagine the monthly payment on a $45. Buyer: Yes.… (20 minutes later) Saleswoman: So. but the Consumer Price Index has not gone up 150%—nor has my paycheck! Saleswoman: So.” “affordable weekly payments. but that was several years ago. what monthly payment did you have in mind? Buyer: More like $300 per month. Saleswoman: With your 740 in trade. Phrases such as “for only pennies a day.
00 per month. do you want Disney? Yes.99 per month.” She decided to cut the $45. Great! So. do you want HBO? How much? $5. Making Counteroffers (The “Give and Take”) 127 . but let me see the numbers. (looks at the numbers) That looks good. with your car and $6.000 down and $300 a month! Conclusion The saleswoman knew the buyer was suffering from “sticker shock.00 per month for your service. Example 2 Cable representative: Owner: Cable representative: Owner: Cable representative: Owner: Cable representative: Owner: Cable representative: Owner: Yes. I can afford $6. But my neighbor pays $39.000 down. Instead of a three-year lease. I can’t afford that much.” she had him—she worked around the $300 slices.000 price into “slices” the buyer thought reasonable. I can’t discuss another client’s account. and added the trade-in. Let’s see. down payment. but what else must I buy? Only the basic service for $8. Once the buyer volunteered that $300 was an affordable “slice. it will be a five-year lease. can’t you? Buyer: Yes. Sure. you can get the Disney channel for only $5.00 per month. and payout slices to reach the total price she wanted. You can do that. as promised. Saleswoman: Simple.Buyer: I don’t see how you can do that.
Conclusion The owner thought his neighbor’s service at $39. 3. But that’s all! Then we’ll hook you up on Monday. That’s $5. we had that before. they asked about the Cartoon Network. Any other kids’ channels? Yes. Okay. I really want the sports channels. and probably felt much better about the total negotiated package because it was presented in modest individual slices. What about the music package? Yes. 2? How much? $8. instead of one total amount. Great. Disney is for the kids! The sports channels are for me. 128 50 Practical Negotiation Tactics . The total is $38. and SI 1. That’s another $5. Thanks.00! Why? Because he judged the per-slice price to be reasonable.00 per month was far too much. 2. Yeah. and my wife wants the old movies.99 per month. but he agreed to six “salami slices” for a total of $38.00 per month.00 a month.Cable representative: Owner: Cable representative: Owner: Cable representative: Owner: Cable representative: Owner: Cable representative: Owner: Cable representative: Owner: The Sports Combo–ESPN 1.00.
Humor might not look like pressure.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. however. Tactic #36 (The Element of Surprise) can catch an opponent off-guard and cause stalled negotiations to move forward. it is effective. For example. and the use of humor. but in tense. an unexpected element of humor can break the tension and encourage a person to calmly get back to the issues. Tactic #35 (Applying Excessive Pressure) is a similar tactic that should also be used with caution. When both sides believe that each has equally strong positions. In some cases. and it can destroy your credibility. 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. which can be successful if the opposing team has two or more members who hold different views of an issue. pressure tactics should probably be avoided. the traditional car salesperson might tell the buyer. today. turned off by the tactic. but others will walk out the door. but it can be used effectively when one party clearly has an edge. 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). It should be used with caution: It can end negotiations immediately. “I can only guarantee this price until 6:00 p. Applying Pressure 129 . Other less-obvious pressure tactics include Tactic #37 (Divide and Conquer).m. so are you ready to make a deal? This might convince a few buyers. Tactic #33 (The Bluff) is a classic pressure tactic.
The two couples used the sailboat a lot the first couple of years. and we’ll be moving south in the next month or so. And we don’t want to be unfair. I don’t see how we could buy a boat or even a half-interest in a boat for what we put in on this one. Your opponent will consider you untrustworthy and might even be insulted by your attitude. When Lacey found out that his employer was transferring him to another city farther down the coast. big news! I’ve been promoted. Lacey: I know. together and separately. I can’t tell you how many times Abby has said how happy she is that we have the sailboat. Chloe and I would like to take the sailboat with us. Don and Abby now use it less and less. Don: Wow.Tactic 32: Don’t Exaggerate It’s always acceptable in negotiations to put your best case forward and present your position vigorously. Although I do think there ought to be some consideration for the two years you had use of the boat. I think Chloe and I would be willing to pay more than just the money you guys put into it. he and Chloe wanted to buy out Don’s and Abby’s interest. Don: Absolutely. 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. getting a divorce and each moving away (and would have no more use for the sailboat). boat prices have really gone up. and they will weaken your credibility. Lacey. In the last couple of years. It 130 50 Practical Negotiation Tactics . Abby really loves that boat. Example 1 Don and Abby went in on the purchase of a sailboat with their friends Lacey and Chloe. but Don. Lacey and Chloe didn’t know that Don and Abby were. in fact. Such exaggerations are easily revealed or uncovered. Lacey: Don. I don’t know. and we need to talk to you about how we can buy you guys out.
I’m surprised by your attitude. I’ll be glad never to see it again.) Lacey: Don. which you would have to share if you want to retain half-ownership. It just reminds me of how happy Don and I used to be.is just about the most important thing we own. Don: Lacey. Applying Pressure 131 . and neither of us put much in for upkeep. Abby is having this conversation with Chloe) Chloe: Abby. I think it would be fair to pay you and Abby half of what you originally put into the boat for your 50% share. and I’ll get back to you. Abby told Chloe about the divorce and about how she never wants to see the boat again. I have big news too. the boat has depreciated. though it’s not so happy. I’ve been thinking. I’m sorry. Chloe: Oh. Abby: That boat. If Don had not exaggerated the importance of the boat and dealt with Lacey honestly. I thought you understood how important this boat is to Abby. After all. Let me talk to her. but separately. (Around the same time. he likely would have found himself in a stronger negotiating position. I was afraid something was going on when you all-butstopped joining us on the boat. (After Lacey and Chloe had a chance to talk. Lacey and Don’s negotiations changed considerably. Don. Lacey: Cut it out. Abby: Well. Don and I are getting a divorce. 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. big news!! Don got his promotion. We’ll be leaving here for the Midwest. and we’re moving farther south. It’s about time now for some major investment.
Company president: Well. but this has been such a crazy situation. I’m afraid that with this current information. we will need to make drastic cuts in our operating costs just to survive. and that the economy is strong. 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. in fact. I can’t see how today’s numbers really impact the long-term profitability of this company. I’ll be looking to you to make some major wage concessions on this upcoming contract. Here’s how these negotiations went: Company president: Well. I’m telling you the stock price is having a huge impact on us already. 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’ll be going back to them as soon as next week. I think you’ll have to agree with me that wage increases in this next contract will not be available. The current stock price is the lowest it has ever been. they will make their decision based on a review of the stock price that day. the situation in the stock market is not good. I read in the papers every day that the market is still strong. I’ll have to show them 132 50 Practical Negotiation Tactics . our production line changes at least three times a year.Example 2 Aimes Manufacturing had experienced major ups and downs in the price of its stock for the last two years. in this global market. And as you know. Telling me there’ll be no wage increase and asking for wage concessions now is a little premature. Union negotiator: The stock price might be down right now.
(In the interim. he lost the trust of the union. they would do a thorough analysis and look at the health of the company over the long haul. Company president: All right. They told union officials that it would be very rare for a bank to make its decision solely on stock price.) Union negotiator: I’m sorry. Applying Pressure 133 . When the market took a swing up during the negotiations. The union became hardened in its position that the employees needed wage increases in the new contract. this week’s price would have little or no effect on your ability to get a Letter of Credit from the bank. the company’s position was weakened even more. okay. and the union ended up with a substantial increase in their contract.that we’ve cut expenses to counter the losses in the stock market. We think this company is very healthy and can withstand the temporary downturn. Conclusion Because the company’s president over-emphasized the impact of the market on the company. here’s what happened. but I checked it out and it’s not totally true. the union checked into the Letter of Credit transaction with some experts in banking. Let’s get back together next week. When negotiations resumed. and I’ll have our people look at it. Union negotiator: I know that’s what you told me. Company president: What? I thought you understood that it is essential that we get concessions on this if we want to stay afloat. Union negotiator: Well. no concessions! In fact. So. let’s talk about it. If the stock goes up next week. we’d like to reopen talks on next year’s pay increase. If you put it that way. Give me your proposal for wage concessions. but your proposal to cut wages is just not going to fly.
and they really have no intentions of doing so. Christy realized that asking for a commitment from Tom at this stage would be a very serious discussion. either. they are bluffing. you will have lost credibility with your opponent.Tactic 33: Bluff! Bluff with caution. are you? Christy: I don’t want to be. but you always run the risk of having the opposing party call your bluff and end the negotiations without reaching agreement. She knew that if she made such a demand and threatened to leave him unless he made a commitment. If you subsequently agree to begin talks again. I called Charlene and she was available. Christy thought that their relationship was exclusive: She hadn’t gone out with anyone else. Sara said she saw you at the movies with Charlene yesterday. 134 50 Practical Negotiation Tactics . and she didn’t think Tom had. and I really wanted to see the new Lenny Bruce movie. I really hate it that you chose to see the movie with Charlene. but I really am. There is a chance that the tactic will work and that both sides will agree to the proposal on the table. Charlene. but Christy thought the relationship was heading in that direction. so their “free” time was very limited. Here’s how the discussion went: Christy: Tom. I guess I’m just surprised. Christy was surprised and hurt when a friend of hers mentioned that she had seen Tom at the movies with his former girlfriend. We don’t have that much free time together. If one party threatens to walk out of the negotiations if a demand isn’t agreed to. This can come back to haunt you. Both of them were still in graduate school and worked full-time. it might backfire. Example 1 Christy and Tom had been dating for about a year. Tom: Oh. I knew you had a class. You’re not upset about that. yeah. Poker players know all-too-well-that bluffing can be very costly. The couple had not discussed marriage.
but very little progress had been made. Tom: I have friends of long standing who are women. Christy: I just can’t see it that way. then I’m afraid I want us to stop seeing each other. It’s made me realize that I want us to have an exclusive relationship. He believed she was sincere. It really wasn’t a “date”—we just saw the same movie together. The union negotiators. I certainly don’t want to lose you. Since he wasn’t sure about that. She convinced Tom that her feelings were strong. Tom: Okay. I need to have your commitment that you won’t do that. Actually. Tom: You’re serious? It’s that important to you? Christy: Yes. Christy would have had to decide whether or not she was indeed bluffing or if she would really end their relationship. Example 2 Nexon and its union had been negotiating a new contract for the past couple of weeks. she paid her own way. Applying Pressure 135 . I just thought of her because I knew you weren’t available. Conclusion Tom didn’t want to lose Christy. If Tom had “called” Christy’s bluff.Tom: She’s a friend who happens to be a girl. It is. I won’t go out with any woman friend. he had to make a commitment or risk losing her. If that’s not possible. I’m willing to risk losing you. if you can’t make that kind of commitment. so he didn’t call her bluff. I’m not “dating” anyone else. and at first he thought she might bluffing. Going to a movie with one of them to me is the same as going to the movies with one of my male buddies. Christy: 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.
And I don’t believe you’re going to go call for a strike over this. we’re really prepared to go the distance on this benefits issue. Nexon: I’m sorry. we want the part-time workers to apply for and fill fulltime positions as they become available. 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. Union: You don’t seem to understand. it will cost too much. We need an answer today. This is a critical issue to us. If we’re not able to reach agreement on this.believing that Nexon would not risk a strike. First. Why don’t we put this one aside for now. then all of our other demands will change. or else we’ll be asking the membership to strike. This is something we just have to have. We’re not going to reach agreement on this at all. Nexon: I’m just not prepared to give you one. Another bargaining session was scheduled. Nexon: We’ve got lots of issues to discuss. The union members ended up voting not to strike at this time. Second. but working without benefits is simply not acceptable. and try and reach agreement on the cost-of-living increase you’re proposing? Union: No. We need some agreement on this today. (The union negotiating team left the bargaining session and called for an emergency meeting with all union members. but the company cannot offer the same benefits to the parttime workers as it offers to the full-time workers. Nexon negotiators did not believe that the workers would actually strike this early in the negotiations. Many of our union members who are working part-time hope to work full-time. much less today. Here is what happened at the next negotiations session: Nexon: I’m sorry. Union: You’re wrong.) 136 50 Practical Negotiation Tactics .
Union: Okay, we’ve decided to put aside the part-time benefits issue for now. We’d like to discuss the cost-of-living request today. We’re looking for a 5% increase for all employees—full-time and part-time. Nexon: I’m afraid that a 5% increase is out of the question. Inflation has been very low this year, and we’ve certainly not increased our prices by 5%. We’re only in a position to offer a 2% increase, and we believe your membership will accept that. Union: 2%?? Are you crazy? Our people will never accept that!! They’d sooner strike!! Nexon: Fine. Ask for another strike vote and get back to me. Union: Wait, wait. Let’s be reasonable.
Negotiators for the company knew the threat of a strike was only a bluff, because the union did not have member backing. When they tried to bluff the first time and failed to convince the members to strike, their ability to successfully bluff again was lost. They had a very difficult time in the subsequent negotiations, because Nexon was able to call their bluff numerous times.
Tactic 34: Control the Forum with Visuals
Some tried-and-true strategies used for meetings and presentations can also be effective during negotiations—particularly those that help you get your points across to the other party. Even the best negotiators have trouble keeping a discussion focused, which is why they make good use of visual aids. In many situations, including negotiation sessions, a person or team is trying to communicate ideas and persuade others to accept their position. Maintaining control of a lengthy discussion and keeping everyone focused on one’s presentation is often difficult, but it is critical to successful communication and persuasion. This control of the “forum” or general discussion, if attempted solely by dialogue or handouts, can be difficult for the best negotiators. Thus, a tactic that will help keep the discussion focused on one’s arguments and presentation can be extremely helpful. An easel and flipchart, a chalkboard, or a PowerPoint presentation can be very effective in controlling a forum. By only showing one part of a presentation at a time, you can focus everybody’s attention on one page of a flipchart or one slide (or even just one line of text). People won’t be able to flip through pages or discuss other parts of a handout (this often occurs when the entire proposal is given out at the start of a session), and the presenter won’t lose the audience’s attention. It is also more difficult for people to go back to earlier parts of the presentation, because the text no longer appears on the screen or flipchart. A negotiator who presents new proposals or information with well-developed visuals can more easily control the forum or focus of the group discussion.
Dinnertime at the Gronefeld house was usually loud and chaotic. The parents and six children had dinner together most evenings, but it was understandably hectic; multiple conversations were going on at the same time. One night, Aime (age fourteen) tried to present an argument about allowances and the division of chores among the children. Constant interruptions from other children and a general inability of all eight people to follow one dialogue simply caused her to give up her
50 Practical Negotiation Tactics
idea. The next night, however, Aime came prepared with a piece of construction paper and a gavel she had removed from a plaque in her father’s office. On the construction paper were three columns: Person; Chores; Allowance. The written specifics were covered up with pieces of construction paper. After everyone took their seats at the dinner table, she banged the table with the gavel until all were silent. “I have a proposal for a new division of chores and new allowances,” she began. “Please let me explain this one person at a time, so we can agree on that person’s chores and allowance, and then move on to the next person.” Aime now had everyone’s full attention, because they were curious about what was covered up on the chart. Aime had sucessfully focused everyones attention on her chart. The parents, impressed by her work and specific proposals, agreed to her suggestions with only one change. Person Chores Allowance
Aime realized that she would never achieve her goal unless she could command everyone’s attention and focus the dinner-table talk on her concerns. She was able to control the dinner forum with a gavel and a chart. The key to her success was that she unveiled only one line at a time, thus focusing the discussion and reaching agreement on each child. This stopped the confusion.
A committee of three members of a governing board of twelve people is responsible for developing and presenting the annual budget recommendation for
the organization. A majority of the board members must vote for the proposed budget for it to become effective. Past committee meetings dealing with the proposed budget have been chaotic, long, and usually heated. The typical format for the meeting is for the chair to hand out a copy of the entire proposed budget at the start of the meeting, quickly provide an overview, field questions, and then try to negotiate for the seven needed votes for passage. Steve, one of the budget committee members, has decided to try a new approach: focusing discussion on one budget at a time to prevent people from discussing several items at once. Steve: Ladies and gentlemen, to help us review this budget proposal in an organized fashion, I have outlined it on the pages of this flipchart. Each section of the budget appears on a single page. I’ll go through it one page at a time. Please ask questions only on that section or page. This will keep all of us discussing the same budget issue. Agreed? Board chair: Does everyone agree to this proposed budget-review process? All in favor say agree, opposed no. Seeing no opposition, it passes. Steve: Let’s begin with the capital budget for the Fifth Ward … Allan: Steve, I have a question about this year’s budget for health insurance … Steve: That’s Section 7 on page 7 of the flipchart. Allan, please hold your question until we get there. We will review and discuss all of these items one at a time, in the order they appear on the chart.
Although several sections of the budget proposal sparked spirited debate, Steve was able to control the discussion and focus the meeting on one issue at a time by effectively using a visual aid. The meeting was much shorter, more productive, and less acrimonious than in prior years.
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its union has the advantage in the weeks just before Christmas. and was forced to pay whatever they demanded.” Example 1 We have all been at the mercy of someone who uses pressure bargaining. On the other hand. It’s easy to prediet the outcome in collective bargaining talks if one side is clearly in a very favorable position.Tactic 35: Apply Pressure (when you have the leverage) Analyzing a situation and applying pressure in order to achieve your goals when you have leverage over the other party is a commonly used tactic in negotiations. such as the advantage of time. because this is the busiest time for that industry. while the other is not—that is. Since his toilet had overflowed and water was continuing to run all over the floor. The same kind of thing happened a couple of years before that: In the middle of August. Example 2 Let’s face it: Sometimes one party holds all the cards. Since the heating and air conditioning company held no leverage over him. If the employer is a shipping and express mail company. there were times when there was no pressure and no emergency. They are more flexible on price and service when they know the consumer is not under any pressure to buy the service being offered. once had to call a plumber in for emergency repairs. his air-conditioning unit went out. Try bargaining with a plumber! This homeowner. He was at the mercy of the company that could install an appropriate unit the fastest. The owners of professional sports Applying Pressure 141 . for example. he was able to successfully bargain for other services. when one side has “leverage” over the other. the guy was in no position to dicker over the price of the repair. It is sometimes referred to as “pressure bargaining. not blessed with many household repair skills. Many companies sell “tune ups” and routine seasonal checks to keep their people busy all year. Unions can strike at any time to achieve their goals if they have some leverage.
however. When one side places undue pressure on the other side. Employers who refuse to give in on issues of high importance to employees and exert pressure on unions to accept their terms. benefits. unemployment is low and jobs are plentiful. etc. but before you choose such a tactic. can suffer repercussions in the form of sabotage. If so. it is the union’s turn to hold firm on its demand).teams are generally more vulnerable to pressure from the players’ union several days before the season begins. there are likely to be long-term repercussions. but they are less willing to negotiate several months ahead. The employees had no power to resist the demands of the employer. either individually or through collective bargaining. Conclusion “Pressure bargaining” is a way to achieve objectives that are greater than what is deserved or desired by the other side. despite strong resistance. If you have a special skill that an employer needs and few others have that skill. When the employer proposed adding duties to the job classifications. he didn’t have to be flexible because the employees believed that they had no alternatives. if the unemployment rate is high and jobs are few. will what goes around come around? 142 50 Practical Negotiation Tactics . and other undesired outcomes.) The leverage of supply is also very powerful: If a jeweler has an exclusive contract to sell a ring everyone wants. On the other hand. consider whether or not the two parties will likely meet again in the future to negotiate. for example. (Team owners are notoriously unpredictable. Many labor contracts were agreed to when unemployment and inflation were high and employees felt pressured to accept the demands of the employer. 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. Other employers find themselves in situations that actually reverse the leverage (when. What goes around comes around. low employee motivation. she has leverage and can more likely hold firm on her price. This gives it the upper hand in negotiating with employees. then you are in a position where you can set reasonable demands on wages.
I took it out of the box. but use this tactic judiciously.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. Just share the doll. Susie: The doll belongs to both of us. and I can’t stand it. Susie: Okay. the fighting starts up again. Just because you saw it first doesn’t make it yours. You’re driving me nuts. and here’s how the “negotiations” went: Dad: You two stop fighting. the little girls began to fight over the doll. They stopped for lunch at a fast-food restaurant and shared a children’s meal that came with a small doll. This time. Tell Susie to let me have it. the girls had been fussy. The doll can be shared. Example 1 A father and his two daughters were on their way to visit the grandparents. and Susie. Mom said so.) Applying Pressure 143 . Consider making a suggestion or a proposal that completely surprises your opponent. you have it when we drive home. Andrea had taken them off the doll. Andrea: The doll is mine. Why? A sudden surprise can disrupt the dynamics of a negotiation. (Their dad pulls to the side of the road and turns to face them in the back seat. Almost from the beginning of the three-hour drive. and Susie hid them under the seat. I can’t drive if you keep this up. (In a few minutes. About an hour into the drive. We’ve got a long ride ahead of us. you have it this part of the trip.) Dad: Stop it right now. Their dad tried to reason with them. Andrea. because you will probably only get to use it once. Andrea: Okay.
and I hope I can convince you of that. but nothing else up to that point was working. I think I have acted properly. (They continued to argue and whine and pinch each other. I want the shoes. She can have them later. they didn’t say another word. Daddy said I got the doll on the way to Grandma’s house. Dad tried correcting them a few more times. The auditor’s job was to make sure that tax dollars collected for the local education system were appropriately handled. and reached back for the doll. to no avail.) Dad: Now there’s no more fighting over the doll. at great expense to the auditor’s office and the school board. The local newspaper was prepared to urge the auditor to end the litigation.Andrea: Give me the shoes back. Dolly has to have her shoes. The defendants contended that the auditor’s actions were politically motivated. he slowed down. so it was worth the risk. He initiated the litigation against the local school board members and several banks that invested the money for the board. The auditor asked to meet with the editor to explain his position. Dolly doesn’t need shoes on in the car. The tactic was so successful. 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. charging that they breached their duty in their handling these funds. He grabbed it and threw it out the window. Susie: Daddy didn’t say anything about the shoes. Here’s how the meeting went: Auditor: I appreciate a chance to talk to you about this litigation. Finally. 144 50 Practical Negotiation Tactics . in fact. The litigation itself had been going on for more than three years. and that they had invested and spent the tax dollars wisely. Conclusion Dad’s use of a “surprise” tactic was extreme. Both Andrea and Susie were so shocked by their dad’s action.
Applying Pressure 145 . Editor: (surprised) Really? They settled? This is public information? Auditor: Yes. They’ve been making that same argument from the beginning. Obviously. there’s just nothing to back up your allegations. the bank would not have done that had we not proven our case. and it is costing your office money and good will. rather than drop the case. That’s really the reason this has gone on so long. and a significant amount of money will go toward the tax fund. I think I have something here that will convince you otherwise. From what I can see. This morning. Editor: Well. They are very persuasive that this is just a political battle. Editor: Well. perhaps you should just cut your losses—and just drop the suit. but I have to warn you that from what I’ve seen and heard so far. this case needs to be dropped. My frustration is that they have refused to provide our office with sufficient information to back up their contention that what they are doing is best for the schools. I really think the community would be better off. The school board members make a very good argument that their practices regarding how the funds were expended are not just adequate. We believe the other defendants will soon follow suit. Your reporters will probably want to follow up on it. Here are the papers. Conclusion The editor wrote an editorial urging a resolution for the good of the community.Editor: I’m certainly willing to listen. Auditor: Well. Thank you for coming in. but actually superior to some other entities you supervise. as a matter of fact. Auditor: I appreciate their arguments. I guess we’re finished here. one of the banks settled with my office. but recommended that the parties reach a settlement. The auditor successfully used the element of surprise in announcing the settlement and thus changed the direction of the editorial.
Tina and their son Kevin are against the idea. Tina: What do you mean? Mike: When Kevin and his friends get their licenses. Tina: I’m really against this pool table idea. Kevin: I don’t really care about a pool table. Dad. I want to talk about a car! Mike: It’s really not one or the other. Kevin is against it because he is turning 16 years-old soon. Kevin: So am I. Mike: I know. you might be able to dilute their power by identifying their different interests and addressing them separately. I’d 146 50 Practical Negotiation Tactics . try to focus on that subject or address that member directly to get them to be more amenable to your proposal. I know we’ll all enjoy it. night after night. and a car is more important to him than a pool table. I can remember spending hours playing with my friends and family when I was growing up. they’ll be mobile! The last thing I want is for them to be out cruising around. Mike knows he needs to get either his wife or his son on his side. If the other side involves more than one person. but I think it will get a lot of use. although getting your license and getting a pool table are connected. especially Kevin.Tactic 37: Divide and Conquer Certain negotiations lend themselves to a divide-and-conquer tactic. 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. 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. Example 1 Tina’s husband Mike wants to buy a pool table for their family room.
Wylma: Tom. Tom. received it without comment. Once Mike convinced Tina of the idea’s merits. and Kevin and his friends use it often. I thought we were making real progress. A number of contract changes have already been worked out and Wylma. Conclusion Mike found an argument that divided Tina and Kevin. the head of the union negotiating team. They bought the pool table.like them to hang out here more. I’m surprised. don’t you think you guys would use it? Kevin: I guess so. A pool table could attract them here. then maybe it’s not such a bad idea. has just presented the company’s initial wage offer. Kevin. 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. She noticed that Jim (another member of the union’s negotiating team. the chief negotiator for the company. Here’s how the negotiations went. But I’m not going to hang out here all the time. she joined his side of the debate. some. who was studying the company’s financial records for the team) became uncomfortable when he heard Tom’s demand. Tina: Well. What happened? Applying Pressure 147 . only Kevin did. 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. Instead of both opposing the idea. Example 2 Negotiations on a new union contract seemed to be going quite smoothly. Mike: I really do.
Right. Jim? Jim: Yes. When the negotiations began again. you’ve heard our demand. Wylma: Let’s take a break. forcing them to reconsider their demand. these are accurate.) Wylma: Now Tom. But Tom. these are our actual accounting figures. Conclusion Wylma’s appeal to Jim’s knowledge of the actual financial situation of the company worked to divide the union’s negotiating team.Tom: Wylma: Nothing happened. as Jim can point out to you. but he added some workplace changes that Wylma was comfortable negotiating. Let’s start again tomorrow morning. you certainly are aware of our financial situation. Do you think this is reasonable? Jim: (looking uncomfortable) Well. Your demand is totally unreasonable. (When they resumed. Wylma distributed copies of financial data that showed the company’s current condition. 148 50 Practical Negotiation Tactics . This is just what we think is fair. Tom: We don’t think so. Tom had reduced his wage demand significantly. you’ve seen our sales projections and production costs. I think you need to rethink your demand. Wylma: Jim. Wylma: Tom.
I want to say something. so you can find a way to quickly neutralize it. Ever since Mom and Dad died. Madison: Okay. Stay alert and watch for clues that a negotiation is about to get out of hand. and it makes me very sad. Applying Pressure 149 . 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. Cory: Madison. Sometimes the argument got heated. When are you going to grow up? Madison: (very emotional) I can’t believe you can say that to me! Christmas should mean something! Cory: It’s just silly for adults to exchange presents. When all of their children were small. get over it. so what’s the point? I don’t need another tie! Madison: It’s not the gift. and had children.Tactic 38: Break the Tension Tension is inevitable in most negotiations. the oldest and youngest Jones children. but the thought that matters. Humor often works to break the tension of the room. especially between Madison and Cory. but it should never be at anybody’s personal expense. but it is really important to me. so pressure grew to draw names and exchange gifts. married. it was easy to agree on just giving presents to the children. We can’t afford to buy each other things we really need. You are almost 40 years old. That will just make a bad situation worse. Tempers flare and people say things they shouldn’t out of anger or frustration. I don’t feel Christmas in the way I used to. but as the children grew up and had families of their own. I know that you all think I’m silly about wanting to exchange Christmas presents among the adults. some of the siblings decided they liked giving presents to one another.
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.
If there is resistance to compromise. however. the exchange will be between things of equal value. Example 1 Julie and Dara both attend a local preschool. each side must decide whether or not one more compromise will produce an agreement that they will later regret. Dara. Mr. C. Okay. don’t you want to play? We could color before your mom comes. At some point. I want to play “Princess” and I want Dara to be the “Prince. but since the other children in their room were not there.: Julie: Dara: Mr. the individual might be afraid that the exchange isn’t equitable). (In a successful negotiation.: Julie: Dara: Julie: Girls. One 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. not the Prince. and that doesn’t happen without compromise. they were the last children left in the playroom for the remaining two hours of the day. 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. When that point is reached. 154 50 Practical Negotiation Tactics . it is better not to compromise. Both of the little girls liked to play ball when they were outside.” but she needed Dara to play with her. The day-care worker wanted to take them outside for a while so that he could visit with his friend.” Can I color now? You said we would color later. was ready to color. they would have to play ball with older children. or maybe tomorrow. Then we can color. Isn’t it “later” yet? Right now would be a good time to go outside.” Dara. how about going out to the yard for a while? You can swing or play ball. Julie wanted to play “dress-up. C. If I can be the Princess. who was outside with older children.
We don’t want to go outside. We want to play dress-up and then color. C. Mr. you can come back in and play “Prince and Princess. The neighbors: The neighborhood has four concerns: Theater patrons will be taking up scarce on-street parking spaces. 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. When his variance application was made public. The owner decided to try for a variance. The owner and a small group of neighbors met to talk about these problems. the owner had to supply additional parking. Conclusion The children stayed inside and played dress-up.: Julie: Hey. neighbors became concerned about the changes to the mall. however. the parking lot will start to look trashy. They were worried about the increase in traffic through their neighborhood and the possibility that the few scarce on-street parking spaces would be used by theater patrons. or apply for a variance. They did all the compromising they were willing to do. The existing parking lot didn’t meet the current parking standards for that size theater. wouldn’t you like to go outside first? After you swing for a while or play ball. failed to offer the children something that was as important as the plans they had made. C. there will be an overall increase in traffic coming through the neighborhood and vehicles will be turning into and leaving the parking lot. According to the city’s zoning laws. and they still had time to color. and teenagers attracted by Making Progress 155 . 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.Mr.” No.
I could put a privacy fence along the east and west—at the backs of your yards. the north lot is used more. What if I changed the entrance to the middle of the lot? That way. driveways on the south side of the mall are along the east and west side of the parking lot.the theater will start to hang around and maybe wander around our yards at night. the south parking lot has not been used much. even though I’m not adding any parking. The fence would shield neighbors from the lights from the vehicles and block the walking access through the alley. You could have all of the traffic enter from the north lot. only when that lot is full would cars come around the mall and park on the south side. Many of our homes back up to that lot. I’m afraid. lights in and out at night can be very annoying. The neighbors: Owner: 156 50 Practical Negotiation Tactics . And. if I agree to move the theater entrance to the south side. I’m certain the lot will accommodate the theater crowd without increasing the parking on your neighborhood streets. and break in his door. with your plans to put the entrance of the theater on the east side of the mall. In fact. With the Comedy Club and the grocery store on that end. We’re just not convinced. Right now. All a patron has to do is park on Elm and walk beside Joe’s yard through the small alley there. So. the closest parking to it is along Elm Street. not having direct access to the south lot from the street would be unworkable. We hope you’re right. but it’s not ever full. Owner: You know that there’s always plenty of parking in the south end of the mall’s parking lot. Not having in and out traffic to the south of the mall is just not very practical. Right now. and we’d like to keep it that way. We’d really like to block off that cut-through and have the theater face the south. We’d like you to prohibit cars from entering or leaving from the south lot. as you said.
Teens can form into gangs if left unwatched. The fences created a buffer from the lights and noise. and they discouraged patrons from parking on neighborhood streets. If I agree to move the theater entrance to the south. the neighbors reported that they were very happy with the way it all worked out. then will you agree not to push for increased private security? Yes. If the fence was set back the width of a driveway onto your property. But you’re going to have to have some kind of security as well. The fence would help with the vehicle lights and buffer this noise from the kids who hang around. set back a driveway width. and make sure the parking lot is kept clean. however. but the privacy fence has to be landscaped so that it doesn’t look like a ghetto wall. And a year after the theater opened. put a privacy fence along both the east and west sides of the south lot. Conclusion Both sides had to give up something on certain items in order to reach agreement. Now you’re talking about considerable expense. The compromises were what everybody could live with. add a new entrance into the south lot. Making Progress 157 . Agreed.The neighbors: Owner: The neighbors: Owner: But we use those side drives to get to our garages. there could still be access from the street to our garages—just not to the main parking area.
but be friendly. They might even start to underestimate your negotiating skills. The dog was Mrs. I’m Joan. Joan decided to at least try and talk to the neighbor. incident was usual or unusual. and sleeping at night was already a difficult proposition! When the neighbor’s dog began to bark at 3:00 a. Lonely: If you’re here to complain about my Rocky. She learned that everyone in the neighborhood had complained at least once. Present your position forcefully. thinking that you will be just as easy to work with on the sticky issues. and pleasant always enhances one’s ability to reach an agreement.m.. because you are the one to set the tone for agreement. professional.m. and started to get upset. Your opponent might give in readily. Joan was already pretty tired. This gives you an advantage. and what kind of complaints might have already been made. Joan had a new baby. Lonely’s only companionship. Mrs. She didn’t believe her neighbors ought to complain about the barking. Mrs. Joan: Hi. but going out of your way to be friendly is an especially helpful tactic. and I just moved in next door. She sought advice from the family on the other side of the neighbor with the barking dog to see whether this 3:00 a. If your opponent is aggressive or angry. and that as angry as they were. and didn’t stop until 6:00 a. your friendliness might disarm and relax them to the point where they begin to talk about their priorities and objectives. Lonely. she just didn’t think it was a serious problem. just forget it.Tactic 40: Be Friendly Being polite. 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. so her neighbor’s barking dog came as an unpleasant surprise. they had gotten nowhere. and because she was hard of hearing. respectful.m. Example 1 Joan was new to the neighborhood. 158 50 Practical Negotiation Tactics . Close your windows at night and don’t listen.
Why. Lonely again. Mikey. I stopped by and visited with him over the fence this morning. Who. I might have to talk to you about Rocky. 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. don’t worry about that. I’d like to introduce you to my new baby. I’ve only got my Social Security. Making Progress 159 . Lonely: Joan: Mrs. I need to get the baby home. too. I can’t pay for something like that.) Hi. Lonely: Joan: Mrs. Lonely: Joan: No. isn’t he cute! He’s a handful. sure. I sure hope he starts sleeping through the night soon. I just wanted to come by and introduce myself.Joan: Mrs. He’s a real comfort to me. No. How long have you had him? Almost eight years now. I guess that would be okay. Here’s my little angel. I’ve got a friend who is a veterinarian. Well. not at all. He’s been keeping me up at night. then. by the way. no. I’ll see you. is a really sweet dog. Lonely: Joan: Mrs. (Joan’s sleep was disturbed by another night of barking. My friend wouldn’t charge anything for talking to us about Rocky and maybe giving us some advice. Maybe I could come back tomorrow and bring him? Oh. Do you think his age has contributed to some of that? You know. Lonely: Joan: Mrs. though. When he does. The barking at night has been mentioned to me. but she took her baby and went to visit Mrs. I guess so. and I’d like to have him stop by and look at Rocky—would that be okay with you? Well. Well.
Company ZZZ: (surprised) Well. Lonely didn’t have to pay for the medicine she could not afford. that the press got hold of the story of our company’s activities before we could call you to let you know. he prescribed medicine that gave Rocky a more regular sleep schedule. The barking all but stopped. Company ZZZ. you would have. 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. overseeing a factory in Mexico and selling products in the states. that’s very understanding of you. Joan took up contributions from the neighbors. the mayor called and asked for a meeting with Company ZZZ officials. its 150 management and sales employees could continue to work in Happy City.A. Example 2 Company ZZZ planned to close its manufacturing plant and lay off 300 union employees. Lonely’s needs and arrive at a workable solution to the problem. Under its new corporate structure..S. agreed to meet with the mayor. recognizing that the layoffs would be an issue in upcoming local elections. of course. 160 50 Practical Negotiation Tactics . After Joan’s veterinarian friend visited with Mrs. Hearing about this from the press obviously puts you in a very embarrassing situation. I think that if you could have let me know ahead of time. and Mrs. Mayor: (very friendly) I understand how these things happen. Lonely and Rocky.Conclusion Joan’s friendly approach enabled her to understand Mrs. They anticipated that it would be an unpleasant meeting. U. When he heard the news on the radio. It’s very difficult to make a move of this type without having it leak out. Here’s how the meeting went: Company ZZZ: We’re very sorry.
I think I can prevail upon the Malaysia group to let us handle the disposal of the property in such a way as to repair some of the damage our layoffs have created. the city has a potential buyer for your plant building. Company ZZZ: I’m not sure what to tell you on that. Making Progress 161 . Many laid-off employees did indeed find new jobs at the plant. and I want them to know that. It’s possible that some of the 300 laid-off employees will find work at this new endeavor. By the way. the 150 management/sales jobs did end up moving to Mexico. Conclusion The mayor’s strategy was to disarm the company with his friendly attitude and in return get a favorable response to his proposal to buy the property in question. Mayor: Please let me know as soon as you can. The mayor was able to broker a deal for the “disadvantaged business” to buy the plant and convert it to a different widget maker.Mayor: I wanted to meet with you so we can take the necessary steps to keep the 150 jobs here. or would we need to involve the Malaysia group? Company ZZZ: Certainly. so we need to understand how we can affect their decision on keeping an office here. This strategy worked. Unfortunately. I am certain that you would like that kind of “good” publicity coming quickly after the recent bad publicity. because I’d hate for us not to make an appropriate pitch to them. The buyer is a “disadvantaged business” we have been working with for some time. and the mayor was reelected. We recognize that your new corporate owner is a large company located in Malaysia. They need a really good deal on the plant price. We just haven’t heard anything yet. Mayor: Great! Let me know when we can talk again. Would you be in a position to talk to me about such a deal. You’ve been very understanding about this.
thus becoming a source of embarrassment. Susan repeated her demand. 162 50 Practical Negotiation Tactics . She borrowed a tape recorder so she could ask her father if this was a fair deal. Jones’s supervisor. Example 1 Susan. The effect on the other party might be even more substantial if lies. Example 2 Three men were meeting to discuss a charge of sexual harassment that had been made against Stuart Jones. age 14. They might worry that the tapes will be made public or given to others. the accused. until Susan said they would evenly split what they bought. were on vacation with their parents in Myrtle Beach. this time in front of a hidden recorder. Susan understood the impact a tape recording can have when it reveals a lie. Alexis knew this was not fair. He asked his elder daughter about the arrangement. She agreed that her proposal was not fair and that she had tried to take advantage of her younger sister. Alexis agreed.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. the younger sister. or used to pressure the other side to agree to certain demands. Susan denied it. age 15. Susan wanted to negotiate with Alexis to “pool” their money so they could buy something together. are talking about a possible settlement of the issue. Then he played the tape. Fred Adams.00. the investigator. and Jones.00 to spend. Alexis then played the tape for her father. who was disappointed to hear that she might propose such a deal. had $40. but Susan had only $20. threats. South Carolina. or simply “bad faith” methods have been used by the other party. and Alexis. Alexis. Somehow. Michael Wood. The two sisters had saved up a little money so that they could buy souvenirs. Conclusion For the first time in her life.
Stuart. Appleton both claim they saw the incident and will testify. Jones suddenly realized that his strategy would not work. (a long pause) I want to see my lawyer. Ruiz and Ms. So. Jones. Mr. exactly what you said to Ms. When Adams set the tape recorder on the table and revealed that he had witnesses. Your request.” meaning something other than copies? No.Adams: Jones: Wood: Jones: Wood: Jones: Wood: Jones: Wood: Jones: Adams: Jones: Adams: Jones: Adams: Tell me again. And you did not threaten her job if she did not. You never touched any part of her body? Not even accidentally? No. I simply asked her to make copies for me as quickly as possible. and now I’ll ask you to repeat your answers—on tape. Well. and gestures did not have a single hint of sexual implication or innuendo? None at all. you are aware that the next step in this process is to ask witnesses to come forth. But by refusing to repeat his answers. So you refuse to repeat the answers you just gave us? Yes. Starr. And please describe your general manner. I’ve brought a tape recorder with me. stares. he also lost his negotiating position. “Do what I want. Making Progress 163 . Conclusion Jones had knowingly lied when he denied the charges. Mr. No one could have possibly misunderstood your intentions? No reasonable person. I think I can write my recommendation. to quote you. He failed to think about what might be the next step.
Roberto will get to choose which half he wants.Tactic 42: Split and Choose When two parties both desire something that can be shared or divided between them. so I’ve got to cut it into two equal pieces or else he will choose the bigger one? Exactly.” the divider. The second person then chooses which of the two parts they will receive. Realizing the potential of getting the “smaller half. the classic “split and choose” tactic might be the best way to settle the issue. Maria and Roberto: No.… No way! Haven’t you two heard of ‘split and choose’? It’s a fair way to divide things. which certainly is large enough (he naively thought) for two young children to easily share. of course. with the remaining part going to the person who did the dividing. Oh. Many of us learned this one from our parents: After two people agree to the strategy. Their dad instructed them to share the candy bar. take this knife and slice the Snickers into two halves. Maria: Roberto: Maria: Father: Father: We can’t share it! It’s in one piece! I’ll eat half and give you the rest. What is it? Maria: Father: 164 50 Practical Negotiation Tactics . 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. one person is given the task of dividing the object(s) into two parts. Maria. is usually careful about dividing the object into two equal parts. because you did the cutting.
Deal? Clarence: Sure. Clarence and Archie. that sounds fair. both parties. Archie is ready to build a retirement home on the property.000. Archie: Here is the map. even children. Then I will choose which parcel I want. That makes them more desirable. I propose that you divide the fourteen acres into two parcels that you believe are about equally desirable: one parcel with three lakefront lots and the other with four lakefront lots. The problem is that one of us will get four lakefront lots and the other will only get three lots. but the appraiser pointed out that the seven one-acre lakefront lots are considerably more valuable than the other seven lots. There is only one place for an access road that must serve all lots. They all have a great view and are equally desirable to build on. so we should be able to divide the property fairly. They have a recent appraisal that values the property at $150. The remaining lots should be distributed between the two parcels to make each parcel as equal in value as possible. Archie: That’s true. but is not sure how to arrive at a fair split. Archie: I really don’t care either. Give me the map and a pencil. Example 2 Two friends and business partners. Making Progress 165 . Lots must be at least one acre to be developed. Clarence agrees to divide it. Clarence: But some of the lots away from the lake have been partially cleared and are flatter than others. and wants to divide it into two separate parcels. according to county deed restrictions. jointly purchased fourteen acres of lakefront property several years ago.Conclusion When two people desire the same object and it is something that can be divided in some way. Clarence: Right. I don’t really care which lakefront lots I keep. quickly recognize the fairness of the divideand-choose method.
Conclusion Clarence divided the fourteen acres into one parcel with three lakefront lots and six other lots. Archie chose the parcel with the three lakefront lots. and both men were happy with the arrangement. and the second parcel with four lakefront lots and one other lot. Which would you have chosen? 166 50 Practical Negotiation Tactics .
They recently purchased a new bedroom suite after they carefully priced comparable furniture all over town. However.” thus extending the scope of the negotiations. The suite they liked best was already at the lowest price in town (the retailer was having a real sale).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.” Many people have witnessed or used this effective negotiating tactic. and the delivery carrier doesn’t set up mirrors. attach legs. What started out as a single issue is now a combination of a major issue and a much smaller issue. supposedly the bargainer in the household. Her husband Jason. Brenda did her part when she said. With a great deal of effort. “Okay. etc. is expected to dicker over the price. Example 1 Brenda Davis is always thinking about the repairs that might be required on an item. miles from their home. so the salesperson delivered the suite himself. Jason was having a hard time getting the salesman to lower the price. Example 2 An experienced and skillful union organizer liked to tack on a tiny less-significant item each time a company and its union negotiated on a large and Making Progress 167 . he also set up all of the furniture in a second-floor bedroom.” Under store policy. His tactic was to throw in a “nickel” in order to make lots of “dollars. we’ll take the suite if you’ll throw in free delivery and set up the furniture. delivery was limited to a small geographical area. Conclusion The amount the couple spent was fairly large. because a “nickel” item has been added to negotiations about a much more significant item costing “dollars.
If used correctly—at the very end of a negotiation—the tactic can usually provide a small gain. “Okay. 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. the two sides had been engaged in considerable bargaining over an improved medical insurance plan (“Health Plan A”) costing hundreds of thousands of dollars. it can be a dealbreaker. 168 50 Practical Negotiation Tactics . At the end of negotiations. If one party misjudges the situation. we’ll agree to Health Plan A with another ½ cent on the pension fund.” Conclusion The nickel and diming tactic is a classic negotiation tactic used successfully in a variety of situations. In one case. so be prepared to withdraw the nickel and dime item at the hint of trouble.” The company negotiator yielded to this small-potatoes counteroffer in order to win agreement on the health plan.important item. This experienced bargainer said.
I’ll take the color TV. Donna: They match. thus creating the impression in others that the good qualities they see are present all the time. Donna: Okay. Example 1 Donna: Mom said to take what we want from the old house and toss out the rest. and performance evaluations for people to come across as likeable.” Having a member of a negotiating team whom the other side thinks can do no wrong might prove to be advantageous. Kathy: I suggest we take turns choosing which of these things we want. Kathy: Then I’ll take the couch and love seat. You can go first. trustworthy. 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. This creates what is called a “halo effect. and all the rest is small junk.Tactic 44: Make Use of a Positive “Halo Effect” It is common in interviews. or knowledgeable. Donna: I’ll take the bar with stools. Donna: No way! These are the last two pieces of furniture. decision-making meetings. Kathy: I’ll take the pool table. but they are two pieces of furniture. Kathy: Not if you accept your logic! (Pause) Donna: You’re not being fair… Making Progress 169 . Kathy: But they are a matched set.
I trust his judgment. (Pause) We’ve got to settle this today and get this stuff moved. and he has always struck me as an honest person. He’s our cousin. and if the bar and stools should be one item or two. Example 2 During a heated labor negotiation. Conclusion Kathy and Donna needed an arbitrator to settle their disagreement. what can we do? Give me the couch and love seat! No.Kathy: Donna: Kathy: Donna: Kathy: Kathy: Donna: Kathy: Donna: Kathy: You’re not! (Pause) Well. with a record of labor involvement that included three recent strikes. and ask him if the couch and chair should be one item or two. I want the love seat. What for? Tell him the situation. Johnny had the “halo” of an honest person. I want the stools. but Kathy and Donna assumed that one positive quality (honesty) would carry over to other areas. 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. He might or might not have also been a good arbitrator. The union negotiators. Let’s call Johnny Ryan. Good idea. 170 50 Practical Negotiation Tactics .
Two weeks later. Boston went to the negotiation table with the management team. The teams took a weekend break from the stalled negotiations. when negotiations again stalled on a retirement plan issue. but the power of the so-called halo effect was great. and that he did. the former union president. even if the proposal appeared to be valid. The union accepted the proposal. as a consultant to review their proposal. They might have stretched his halo farther than his expertise and experience warranted. thus bringing the negotiations to a conclusion. without any reservations. the consultant did not speak. During the break. 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 city management again hired Boston.simply did not trust the management team. Making Progress 171 . the management team hired Sam Boston. but his mere presence caused the union leaders to accept a management point as valid. He said he believed that it would work as presented by management. He solemnly told the union negotiators that he had been hired to review it. Boston was widely known as a totally honest man who speaks his mind. On Monday. This time.
$237. has owned the house for 24 years and is downsizing to a condo. and we are countering with an offer of $250.500. 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. but the key is to gather facts that you might need—not just the facts that you will need.000. (Next day) We’ve reviewed the records you’ve produced. They believe it is overpriced.000. I’ll get back to you.000. Sam Jones. but you’ve priced it way too high. What? That’s $35.Tactic 45: Use Facts Fact-gathering must be part of the preparations for every negotiations session. and $237. but we feel that it’s a fair offer. Here’s a list of the five that are about the same size as yours.000. Being able to present them at the most appropriate and critical times has made the difference in countless negotiation situations. This offer is for more money than any four-bedroom houses on this neighborhood list. Sometimes.000. $235. They sold for: $225. The owner.000 under the listing price! We realize that. We love your house. but the right facts presented at the right time can chill or astound and completely turn things around. Example 1 Henry and Maria Lopez are interested in a house that lists for $275.000. the other party will ignore or refuse to believe the information. Henry Lopez: Sam Jones: Maria Lopez: Sam Jones: Maria Lopez: We love the house and have made a written offer of $240.000. Sam Jones: Sam Jones: 172 50 Practical Negotiation Tactics . $229.
and we know that only this model will meet our needs. Here it is. The last 20 were over $2. if other departments have ignored the policy. and did his homework. You can’t pay more than $1. and wisely chose exactly when to present them in order to make his point. He found facts that supported his position. I’ll get called on the carpet. We’ve talked with purchasing and we have the authority to buy seven for $2.000 each. Supervisor: Well. Conclusion Hatfield had anticipated what his supervisor’s position would be.600 unless the company president approves. Order the new computers.Henry Lopez: Sam Jones: Henry Lopez: Sam Jones: Let us discuss this for a minute. Example 2 Supervisor: You know the policy. who was not particularly knoledgeable about real estate. Conclusion The Joneses had based their asking price on the advice of a friend. I asked for a list of all new PCs bought this year. The facts presented by Henry and Maria Lopez caused Jones to re-counter their asking and likely sale price. No one can go over $1. let’s not worry about it.600 for a computer. Well… We have a written counter of $245. We accept. Hatfield: While I was at purchasing.400 each. I’ll be… Okay.000. Supervisor: If I okay this purchase order. Hatfield: My staff has done a lot of research. That’s the bottom price. Making Progress 173 .
can you check out two on a card for him? Jenny: Well. I’m sure you would not. yes. Maureen: Well. Otherwise. Would I do that? Jenny: Maureen. The effective use of probing questions can help achieve a favorable settlement. but I don’t set the policy and I can’t make exceptions. I can’t check out these four books? Jenny (Librarian): That’s the policy. Maureen: The policy limits a person to only take out three books at the same time? Jenny: Yes. 174 50 Practical Negotiation Tactics . I trust you. Maureen: So you trust me with the books.Tactic 46: Ask Probing Questions Ask probing questions and follow-up questions. you know me. Example 1 Maureen: What. and help you point out inconsistencies in a position that might “lead” the other side to change theirs. But I can’t break the limit rule—it is an absolute rule here. A maximum of three books can be checked out to a person at any one time. and they would all be unavailable to others. Maureen. but you don’t want to jeopardize your job? Jenny: Yes. I want two of these. If you trust me. and two are for my husband. They can help you identify or better understand what the other side really wants. Maureen: Well. I can do that within the rules. reveal misperceptions or lack of knowledge about positions that can be corrected. some people would have forty or fifty books out at the same time.
Mary and Kenzie? They are 2-3 pay grades below us. Example 2 Jack: Mark: Jack: Mark: Jack: Mark: Jack: Mark: Jack: Mark: Jack: Mark: Jack: Mark: Jack: Mark: Jack: Mark. and Kenzie. it could kill us. Babu. Why? Some policy? Yes. are you sure I can’t get your information technology people to give us direct information on product sales? No. Sue. (Next day) Do you have the policy about giving out product sales information? No. If that data ended up in the wrong hands. but it’s because you don’t have access clearance. Making Progress 175 . we can’t do that. I couldn’t find anyone who knew it. Mary. What’s the policy number or date of approval? I don’t know. Can you get me the number? Sure. Security? Right. Who does have access clearance? Mike. But this forces us to make decisions without complete information! Yes. They say it’s a security issue. Jay. Brooks.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. and they don’t even have a use for the sales data.
I’ll get it for you ASAP. Conclusion Jack continued to probe by asking why and who in order to find out more about “the policy. Jack: Here.P. Jack was able to receive clearance as well. Once he discovered that employees in lower pay grades had access clearance. When can I get the data? Mark: Today. that’s been the policy since I’ve been here.… (Next day) Mark: The vice president said you can have access if you sign a security card like everyone else who has access clearance. His probing questions turned up a critical fact. 176 50 Practical Negotiation Tactics . if we can have access? Mark: I guess so.” He intended to do this until he hit a dead-end or was able to find a solution to his problem.Mark: Well. I’ll sign now. Jack: Can you ask your V.
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).Stage 7: Reaching Agreement he final stage! It might come minutes. If friends or neighbors need to settle something but prefer to avoid the negotiation process. When multiple issues are at stake and most have been agreed upon during negotiations. 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. 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. T Reaching Agreement 177 . and the child learns an important lesson about life. If both parties desire a settlement but cannot seem to reach it through the usual give-and-take process. and the classic Walk Away (Tactic #48). Tactic #49 (Final-Offer Arbitration) should bring about a settlement. hours. When two parties believe they have an oral agreement. 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. this process can easily result in a final settlement. In this process. days. or even months after the first offer is presented. 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. this tactic can produce an agreement. They bring it out when a dispute arises. 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.
2) allows the other side to feel the release that comes with completing the bargain. off-again discussions. The bargainer skillfully 1) begins the congratulation sentence “I agree…”. After days and weeks of on-again. Nancy brought up the subject of vacation again after dinner. she continued to speak: “…as long as you agree to drive us to visit my mother on her birthday. Example 2 Negotiations can take a long time and incorporate many issues. D. “I’m thinking of agreeing to your plans for vacation. Let’s do go to Virginia Beach and Washington D.C. Near the end of a particularly anxious bargaining session when there was little time left to negotiate. As he hugged her.” Conclusion The husband was so excited about visiting Washington. Example 1 Many husbands and wives have different ideas about how they’ll spend their vacation. They both have stressful jobs and look forward to their annual vacation together.Tactic 47: The Premature Congratulation This tactic draws its strength from timing. She said. 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. His wife had carefully planned her exact “premature” vacation agreement. Larry Snyder gets bored staying in any one place for many days. but his wife Nancy likes to stay put and relax. 3) and adds one last key demand to the congratulation sentence. Weeks of stressful meetings cause both sides at the bargaining table to look forward to its conclusion.C.…” Larry was very pleased that his wife was agreeing to the idea he had been trying to sell.
One operating issue involved the probation period for new employees. My team was afraid we would not even come to an agreement. (This is a bad position to be in. but we agree to everything in your final proposal…” Members of my team shouted hooray. It was so close. We all knew that it could come down to agreement or strike. but also that they sensed the weariness of my team. fit. Reaching Agreement 179 . Therefore. Most people didn’t notice that the negotiators had not finished their hand shake… Ted: Then Ted continued his sentence with. One of the best pieces of negotiation advice is to remain fresh.) Here’s what happened: Bob: I knew that the other side was similarly harried. It took only a few minutes of caucusing for my team to convince me that a 45-day probation was costly. he turned on a large warm smile and extended his hand to shake. The old agreement specified a 30-day period. but held firm on remaining operating principles. However. My team had convinced me that doubling the time frame would create a real problem on the shop floor. In our last offer. because it makes you pretty vulnerable. and this skillful negotiator let them feel the happiness and security one feels when the fear vanishes. When the chief negotiator emerged with his team and headed toward my team. “It was hard for us. and rested. we made some small concessions on financial matters. but the other side continued to ask for 60 days. Ted said. I felt the tension in the room. The celebration had begun.” Bob: Ted timed this perfectly. we held firm on this and did not discuss the probation issue and many other “dead” issues for days. There were grins and handshakes coming from the other side. but acceptable. symbolizing that he was agreeing to the entire final offer. as the negotiator came closer. “…as long as you give us a 45-day probation period.almost willing to accept any deal.
180 50 Practical Negotiation Tactics . 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.Conclusion This “premature congratulation” tactic can only be used successfully at the very end of an unsure and shaky negotiation. The negotiator makes a big show of agreeing and allows the other side to bask in the glory of a deal completed. However.
Jay. Example 1 Jay Vahaly has purchased three new Toyotas from Pembroke Toyota over the past twelve years. He really likes it. (Vahaly drives the new Highlander home. Jay: Hi. My name is Jay Vahaly. all from Sue Wilson. a veteran salesperson. but my Avalon is a good car. Sue: Well. how did you like it? Jay: Okay. the following exchange occurs. Jay. right? Jay: Yes. but I thought I might want to try a new Highlander. if I roll over the lease to a Highlander. Sue: I remember you. You had time to assess my car. but his Avalon has been a good car. be sure you think this through beforehand. here are your keys.) Jay: Sue. or go after you and perhaps make a new concession in order to get you back to the table. I don’t want to negotiate. You bought your wife a new van just last year. and the lease on my Avalon is about to expire. Whether you are really bluffing or you are serious. He stopped by Pembroke one day to look at the new models. Sue: Let me get you the keys so you can take this one home overnight to see how you like it. I like it. The next morning.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. what can you do on a 36-month lease? Reaching Agreement 181 . too. and he can simply buy it when the lease expires. Your opponent will have to either let you go and run the risk that things are really over. I’ve worked with you before.
(15 minutes later) Sue: Well. He effectively used the walk-away tactic to let Sue know that he was firm on the price. a successful musical instrument sales and rental store. That was the figure he was looking for.Sue: Give me a few minutes and I’ll find out … (20 minutes later) Sue: Well. Sue: I’ll try. (Jay got in his car and drove home. They’ve talked about retiring in recent months. Sue called him as soon as he walked in the door and offered another $50 break on the lease. Jay. at most. I thought I’d get a fair deal. you can turn in the Avalon and get the Highlander for only $249 dollars more per month. Please go back and work out a lower lease payment. Example 2 Larry and Judy Bizannes own the Bizannes Music Mart. Jay—wait. Jay accepted.) Conclusion Jay knew his BATNA (best alternative to a negotiated agreement): to go somewhere else if the deal isn’t good enough. I’m disappointed. they came down to $199 more on a thirty-six month lease. Sue: Sorry. Jay: I guess I’ll go to Dixie Toyota and see what they will do for me. but 182 50 Practical Negotiation Tactics . He was prepared to keep his Avalon if the lease was even $1 more than his limit. Let me try again. (He walks away) Sue: No. $100 more. These Highlanders are hot items! Jay: Well. Jay: What? I was thinking the lease payment would be. Jay.
come out here! (Judy comes out from the back room. they were prepared to accept $5. You rejected it. and we gave you our price. which the Bizannes accept. you’ve already told us that. Larry: Judy. Reaching Agreement 183 . Michael: Well. so why are you here? Michael: I’ve discussed it with my partners. Larry: Yes. Larry. One day. our accountant said it’s worth $6 million. Michael Roberts. He met with Bizannes twice before.) Larry: Michael is here again. go back to your office. with a certified check. and he is offering us $4.5 million. visited their store. (Judy and Larry walk into the back room and close the door.0 million. but their continued walkout convinced Michael that they would hold firm.) 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. Michael: Good morning. Larry. after no contact from Larry or Judy.5 million. What do you think? Judy: Larry. How’s business? Larry: Great! I’m surprised to see you again. Michael: I have a check right here for 4. Michael calls on them again with a check for $5.both of them love their store. Two months later. and I’m prepared to offer you $4. I still want to develop this block.5 million for the building. In reality. Judy: Larry. Larry: Michael. a local developer. and I only need your building to own it. today. let’s eat lunch. and I’m not interested in less.5 million.
I won’t take it. the arbitrator is given the authority to make the parties comply with the ﬁnal and binding decision. Jenny told them to sell it. In arbitration. Keep the $1. Jenny: No. Lynne: No. which is generally voluntary. which she has kept in a barn for over ten years. We have a few dollars invested in parts and we had fun working on it. but they wanted to give Jenny $500 for her “share” of the machine. Example 1 Jenny and Lynne are sisters. In ﬁnal offer arbitration. I offered it to you for nothing. The following discussion occurs: Jenny: The old machine wasn’t worth $50 when you took it. Lynne told Jenny that she and her husband Gary have restored two other Singers. Both involve the use of third parties who are objective. both sides have agreed in writing to accept the arbitrator’s decision. the mediator works with both sides to resolve certain issues but has no authority to make binding decisions. One day Lynne dropped by for a visit and the discussion turned to the old Singer. Lynne and Gary bring the restored Singer to Jenny’s house. In mediation. 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). and would be able to restore hers as well. Jenny has an antique Singer sewing machine.Tactic 49: Final-Offer Arbitration Mediation and arbitration are two well-known ways of resolving sticky disputes. Lynne responded that this was their intention. Jenny told Lynne she could take the old Singer that she has no interest in (and doubts that it is worth restoring). Six months later. That was the deal. Lynne: No! I suggest that we each write down our position and let Dad choose one of the two as the final decision. In most arbitrations. But he isn’t allowed to try to find a “middle ground”—just to choose one position or the other. Let’s split the money. so they generally give up some ground and try to make the offer appear as fair and reasonable as possible. 184 50 Practical Negotiation Tactics .000. Each party wants their offer chosen. They inform her that they put the machine on e-Bay and have an offer of $1.000.
My troops are getting restless. since he could only choose one offer. Ralph: Right! (Friday at 3:00 p. first on the health insurance co-pay. and meet back here in 72 hours—3:00 p.Jenny: Dad: Okay. Their father found Jenny’s position to be the most reasonable. I can’t see any way to reach an agreement. As a brief explanation. Tina: Good. binding decision on the three items.m. I’ll buy that. so I am invoking the finaloffer arbitration ground rule we have in place. Tina. Conclusion Jenny’s final position was that she receive $50—the maximum possible value of an old “junker. Any increase in value was due to the work of Gary and Lynne.m. but we’ve made no movement on any of them since we started. after six weeks of negotiating. he did not need to “haggle” with them. Example 2 Ralph: Well. we are down to only three unresolved items. I have chosen management’s offer to keep it as it is under the current contract. The union’s position could have run into millions of dollars.” Lynne proposed a 50-50 split. (One week later) I think Jenny’s position is the most reasonable. Then we both submit our final offers to Judge Ryan within 48 hours. Ralph: I know. based Reaching Agreement 185 . At best. on Friday. They should get the other $950. Tina: Yes. the old machine was only worth $50 when Lynne hauled it away.) Judge Ryan: Here is my written.
I’m sure you realize that we could have taken six more weeks to reach the same point. Conclusion The final-offer arbitration process enabled the parties to gain a fast. and an item that large should have been negotiated at the table. Well. money. and peacefully finalize a contract that contained several important gains for both sides. At least we both saved time. reasonable resolution to their last three unresolved issues. Second. It will only cost $120. 186 50 Practical Negotiation Tactics . I’m not happy with your decisions.Ralph: Tina: on last year’s data. on the clothing allowance. nor why their method was superior. and stress. I have chosen the union’s final offer. on the merit pool distribution method issue. No increase has been given for six years. Now let’s get a signed contract. but we agreed to this process. Finally.000—less than 1 percent of the total package. I have chosen management’s offer because the union did not justify why the past practice should be changed. Ralph.
Obviously. seeing the agreement in writing will force both sides to acknowledge what has been said and agreed to in the negotiations. and felt that they would have to work fast to make an offer before someone else did. During a discussion. Example 1 Bill and Paulette had been house-hunting for some time. and one of the other couples looked very interested.Tactic 50: Commit the Offer to Paper You can often control the progress and direction of a negotiation by writing down the agreements or understandings as they are being reached. They were not the only couple to come to the open house. we won’t be involving our real estate agent. If we shake hands on it right now. everyone is busy grappling with the details of the negotiations. Bill and Paulette fell in love with the house. Bill: Reaching Agreement 187 . and decided to stop by to see if they liked the house. 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. They finally looked at a house they really liked. 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. not the furniture. all the usual stuff in a sale. and while Bill and Paulette had been using an agent to help locate houses. however. At the very least. Bill pulled the seller aside. they looked at this particular house on their own.000. The owners were selling the house without a real estate agent. Seller: We’re asking $152. Seller: Yes. They saw the “For Sale” and “Open House” signs. The goal of recording the precise details is to either avoid any misunderstandings or address them before the talks conclude.000. We’d like to make you an offer of $150.
all window blinds and drapes. In the section for fixtures and miscellaneous items to be left on the property. The supervisor assured the employer that there was no basis for her complaint. and the two area rugs. but I’d like to make sure there are no misunderstandings. and when she refused. and the garbage disposal. he left the price at $150. (The seller recorded the offer of $150. When he had the chance to put the deal in writing. Example 2 Monica brought a sex discrimination charge against her employer. he began to have “problems” with her job performance. Seller: Okay. If it’s what you meant. the refrigerator. The employer’s affirmative action officer looked into the charges and determined that 188 50 Practical Negotiation Tactics . and that no one would ever say that he was guilty of any type of sexual harassment or sexual discrimination.000 and added the additional items to “sweeten the pot” and give Bill and Paulette a deal they couldn’t refuse. a public agency. In her complaint. and two area rugs. the hutch. then we have a deal. she said that her supervisor had repeatedly asked her out. Conclusion The seller had always intended to leave the garbage disposal. It worked. he listed the stove. Let me just get the standard “offer of sale” form and fill out what I hear you saying. real. and had been prepared to drop his price to $145.000.) Seller: So. I think we can work something out. Under the section for appliances to be left on the property. Sign here. and the two area rugs were specifically included. look this over. that’s what I meant. Bill: (pleasantly surprised to learn that the garbage disposal. since he probably would have missed them) Yes. in fact. the house is yours.000.Seller: Just a minute. and that the problems with her job performance were. he listed an attached hutch in the kitchen. the hutch. The supervisor pointed out that he had a staff of 20 or so women.
And the confidentiality clause is standard. but it’s not standard when a complaint is formally withdrawn. the supervisor says he did nothing wrong and that Monica just misinterpreted what he said. Why’s that? Well. You’re just trying to make it seem as if your supervisor did nothing wrong. The employer’s lawyer told Monica’s lawyer that the employer was ready to settle the deal for the $100. my client is supposed to formally withdraw the complaint rather than just settle it.000.000.000. you didn’t mention in the agreement that in exchange for the $100. and expensive matter. But the employer doesn’t want to go through the expense and publicity of a trial. Monica had.000. but said that fighting the charges would be a long. drawn-out. even though we’re certain we would prevail. by this time. Withdrawing. and must agree not to tell anyone about the $100. The supervisor insisted that if the employer felt he had to settle. I’m He: She: He: Reaching Agreement 189 . He’s happy to prove that in court.000 without actually having to prove anything.there was little basis for the complaint. Look. It might be standard when there’s a settlement. even though you are paying Monica because we can prove he did do something wrong. Monica’s lawyer (She): Employer’s lawyer (He): She: I was surprised by your settlement documents. She thinks the withdrawals and the secret settlement will be seen as some kind of admission on her part that she shouldn’t have brought the claim. He offered to send settlement agreement papers to her. found a new job and wanted compensation for “embarrassment” and lost wages in the amount of $100. settling—What difference does it make to her? She’s getting her $100. then Monica had to acknowledge that the supervisor did nothing wrong.
190 50 Practical Negotiation Tactics . There was a confidentiality agreement. but word did get out that a public agency paid $200. It was made clear that the employer had paid the additional $100. I’ll take your offer back to her and let you know. 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. It would have been a better strategy in this situation to raise the issue of withdrawing the complaint during the actual negotiations.000 and the conditions of the offer.000. to his disadvantage.000 when all that was asked for was $100. Monica accepted the $200. but that’s under the same conditions—the claim must be formally withdrawn and Monica can never reveal the amount of the settlement.000 just to get the employee to “withdraw” the complaint.000.She: authorized to pay $200.
however. a written document is hardly necessary. Certainly someone has said to you. it is much more effective in the long run when the parties enter into “win-win” agreements. When two friends agree on what movie to see. A union contract.” Clear communication is essential if you want to reach an agreement and have it abided by. most certainly needs to be in written form. The degree of detail and formality of a written document will. of course. but it was not what I meant. One way to help the parties abide by an agreement is to put it into written form. As these examples of personal and business negotiations show. depend on the kind of negotiations in which you are involved.SECTION IV: PUTTING THE AGREEMENT IN WRITING s you can see. Think of how often you have said to someone. it would have been easier to resume negotiations at a later date. rather than attack each other. Putting the Agreement in Writing 191 . In Tactic #17 (Package Items). and contract. reaching an agreement is sometimes a long and difficult process. talking is not always the same thing as communicating. commitment. even an informal agreement benefits from some type of written documentation. “That may be what I said. Reaching an agreement is the first step. the three sisters reached an amiable agreement. operating under an agreement after it has been reached can be even more difficult. Putting an agreement into writing serves three purposes: communication. and when they agree to solve problems together.” By the same token. However. then the parties have to abide by the agreement. when they engage in honest “give and take” negotiations. Unfortunately. but some of the decisions were put off for a couple of months. I thought you said something else. If the agreement reached at the time had been put into writing with all three sisters signing it. “Oh. A Communication Hearing is not necessarily the same as listening.
192 50 Practical Negotiation Tactics . or movements. or movements being used by the sender. Who isn’t excited about buying a brand new SUV or truck? Until. that is. If Jason fails to live up to his side of the deal. When you create a written record of the details of an agreement. the price is spelled out in the loan document as “twenty-two thousand. Jason agreed to change his study habits if he couldn’t pull his grades up by the end of the semester.944. sounds. the opportunity for the sender and the receiver to misinterpret is greater than if the communication is first spoken and then written. 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.Communication is a process that involves a sender and a receiver.” In Tactic #14 (Don’t Always Hide Your Weaknesses). His mom could more easily enforce the agreement if she had it in writing. you have created something tangible that can be referred to in the future when memories become fuzzy. 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. he can be reminded of the details because it’s all there in black and white. a couple of months away. pictures. the message being conveyed and received might be understood differently. The receiver has to decode the message being sent by trying to understand and interpret the words. In Tactic #4 (Use Objective Criteria). Oftentimes just seeing the agreement in black and white conveys its import as well as or better than hearing about it. nine hundred and forty-four dollars—$22. Commitment Reducing an agreement to writing often forces both sides to truly commit to the agreement. seek information. The sender wishes to convey an idea. or express a thought or emotion through words. Negotiations are often necessary because there was a “misunderstanding” that could have been avoided if the parties had put their agreement in writing. pictures. When communication is limited to the spoken word only. And because the sender and the receiver are two unique individuals. sounds.
or it isn’t an agreement—it’s merely the conveying of a gift. and put that information into the document. where. leading to misunderstandings and contract disputes. ask yourself the basic questions of who. One party wishes to buy what the other wishes to sell. before the trip. and how much. Both parties must receive a benefit or something they personally consider of value. which kind of. as many people learn when they purchase a home. 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. Failure to do so can lead to big problems. WHO? Provide of the full names the parties necessary to the agreement. which. and dated agreement.Contract Finally. Your spouse will share some responsibility for failing to make that duty clear in the agreement if. how many. If you have agreed to pay someone to house-sit while your family is on vacation. signed. the address and description of the real property. why. Generally. what. However. Carefully and completely describe the subject matter of the agreement. one party will work if the other party pays for the work. have your spouse also agree to the details of the agreement. You can do this more formally by taking them to court (perhaps as a last resort). and getting all the parties to sign it usually creates an enforceable contract. You can informally enforce an agreement just by showing the individual(s) the signed copy as a reminder of the substance of the agreement and their commitment to it. and so on in standard contract form. details such as what fixtures stay or what appliances go can be easily overlooked. Here’s what we mean. protect yourself by having a written. Putting the Agreement in Writing 193 . pulling an agreement in writing. say. When you are ready to commit yourself in writing. WHAT? The written document should clearly describe the item(s) covered by the agreement. your plants die because the house-sitter wasn’t told to water them. the real estate contract includes information about the buyer and seller. when. in writing. dating it. In either case. one party will change behavior in exchange for something of value from the party who wants the behavior changed.
which one or which kind of. dating it.The remaining questions fill in the details of the agreement. how much or how many. depending upon the deal: when or where. in fact. And it can create a tangible reminder of the deal (or an enforceable agreement. 194 50 Practical Negotiation Tactics . Putting an agreement in writing. The more-specific and clear these details are. agreed to the same thing. the better. It gives the parties an opportunity to really buy into the deal. and having all parties sign it ensures that the parties have. if that becomes necessary).
and how they can be used: Exercise Forms Putting the Agreement in Writing 195 .Personal Negotiations Negotiation situation: Parties involved: Issue: Tactics that might be helpful.
and how they can be used: 196 50 Practical Negotiation Tactics .Business Negotiations Negotiation situation: Parties involved: Issue: Tactics that might be helpful.
________________ 5. ________________ 10. ________________ 6. ________________ 8. ________________ 7. ________________ 9.Name of Negotiation Tactic 1. ________________ Tactic# How will I use this tactic? (Application) _________________ _________________ _________________ _________________ _________________ _________________ _________________ _________________ _________________ _________________ ______ ______ ______ ______ ______ ______ ______ ______ ______ ______ Notes Putting the Agreement in Writing 197 . ________________ 4. ________________ 3. ________________ 2.
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C. Lewicki. LittleJohn. and C. Domenici. Mediation. The Essentials of Negotiation. 1997. Heavrin. and S. 2nd ed. Upper Saddle River. Patrick J. Practice. Getting to Yes: Negotiating Agreement Without Giving In. Fisher. 1988. Fiske. Herb. Clark. and J. Roger. Inc. Inc. You Can Negotiate Anything. Prospect Heights. 2001. New York: Penguin Books. Gotbaum. Cleary. Kennedy. 1980. D. New York: M. Minton. George. Patton. Inc. 1999. Sharpe. Ill. The Negotiation Handbook. Negotiation Skills.E. Calif. 2001. References 199 .REFERENCES Carrell. 1989. Eshelman. New Jersey: Prentice-Hall. and Law.: Waveland Press. Gavin. New York: Penguin Books. R. Inc.: Crisp Publications. Roger. 2004. R.. Chicago: Richard D. Brown. Oakland. Irwin. McKay. University of Missouri: Columbia Press. M. J. Pocket Negotiator. 1988. M.: New Harbinger Publications. David. K. New York: Basil Blackwell. Inc. and S. and B. Upper Saddle River. Labor Relations and Collective Bargaining: Cases. 1996. M. Fisher. 2nd ed. E. R. and J. Los Altos. The Negotiator’s Handbook. Ury. Inc. Negotiating in the Real World. Victor. 1991.. W. Inc. Getting Together: Building Relationships As We Negotiate. 7th ed. W. and M. Saunders. 1987. Maddux. New York: Bantam Books. Cohen. The Relaxation and Stress Reduction Workbook. Calif. New York: Simon and Schuster. Fuller. 1991. New Jersey: Prentice-Hall. Successful Negotiation: Effective “Win-Win” Strategies and Tactics.
Heath and Company. Ury. Massachusetts: Harvard University Press. 2001. B. Inc. Cambridge. Getting Past No: Negotiating with Difficult People. Taking Charge/Managing Conflict.E.org 200 50 Practical Negotiation Tactics . Lectures on Negotiation Analysis. Labor Relations in a Global Economy. New York: Bantam Books. Inc. Gerald I. Raiffa. Massachusetts: PON Books. 1994.Nierenberg. Tsogas. Dudley. Upper Saddle River. Inc. 1982. New York: Simon and Schuster. R. 1987. G. New York: Viking Press. 1999. Stulberg. Thompson. Weeks. George. L. New York: M. 1996.negotiationsources. J. Sharpe. www. The Art of Negotiating. Howard. Lexington. 1981. Raiffa. Inc. Massachusetts: D. Bargaining for Advantage. Howard. 1991. Shell. 1998. Cambridge. New Jersey: PrenticeHall. The Eight Essential Steps to Conflict Resolution. The Mind and Heart of a Negotiator. New York: Penguin Putnam. The Art and Science of Negotiation. William. C.
He received his doctorate from the University of Kentucky. he was elected to the City of Louisville Board of Aldermen for five terms. Morehead State University. HR Magazine. Labor Law Journal. organizational behavior. M Christina Heavrin J. Carrell are in the fields of collective bargaining and labor relations. Human Resource Management. The Academy of Management Review. In addition to negotiating numerous litigation settlements and contracts. and served as President of the Board and Mayor Pro-tem for three terms. Dr. Bakersfield. In addition. These positions enabled him to build a sizable management consulting practice while teaching at the University of Louisville. Personnel Journal. Personnel. she has helped negotiate a number of major agreements such as a multi-million dollar property exchange that relocated major industries and railroads from the City’s downtown wharf resulting in the development of both an award winning public About the Authors 201 . and the University of Louisville. and negotiations. Organizational Behavior and Human Performance. in Economics from the University of Louisville. The Personnel Administrator. which is located in the greater Cincinnati area. Carrell has held academic positions at California State University. The Journal of Accountancy Training. has practiced law for 28 years primarily in the public sector as an attorney for local government in her hometown of Louisville Kentucky.ABOUT THE AUTHORS ichael R. He has authored over 50 scholarly works in some of the leading management and human resource journals including The Academy of Management Journal. and Public Personnel Management. and MBA and B.A. Carrell is Dean of the College of Business at Northern Kentucky University. Most of his professional career has been spent in the Louisville area and has included positions as a personnel director and labor negotiator. During his academic career he has received awards for both outstanding research and teaching. Marshall University. Business Forum.D. The University of Nebraska-Omaha. Books published by Dr.
Recently voters approved the merger of the City of Louisville and Jefferson County Governments. Jefferson County. 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. 202 50 Practical Negotiation Tactics . an agreement between the State of Kentucky. a multi-million dollar expansion of Waterfront Park that included a major environmental clean up and the construction of a Minor League Baseball stadium in downtown Louisville. a tax sharing agreement between the City of Louisville and Jefferson County that enabled the two governments to share revenue of over two hundred million dollars and to combine their economic development programs. 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.