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.

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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.

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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

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exactly. accept what is given. 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. with neighbors. few people understand that normal interactions represent bargaining opportunities. Instead. with family members. are the negotiators most people deal with each week in their work and personal life? The list will be long: • • • • • • • • a neighbor a spouse a child other family members a supervisor a co-worker a salesperson a boyfriend/girlfriend • • • • • • a home builder a hotel clerk an electrician/plumber a lawyer a vendor/buyer a human resource director (who might make a job offer) • a manager Most people expect to have to negotiate when buying a car or purchasing a home. • A co-worker asks for volunteers for a new project. such as these: • You receive the wrong order at a restaurant. This book is designed to give the reader an understanding of the negotiation process by presenting fifty proven. 4 50 Practical Negotiation Tactics . they pay the sticker price. but many of us miss the opportunity to bargain in other situations. Most readers will no doubt recognize some of these strategies. some will in retrospect even remember being the victim of one or two of them. Who. at a flea market. start reading! Most people come face-to-face with a negotiation situation of one type or another on a daily basis: on the job. Unfortunately. practical tactics useful in real-life situations at work or at home. • A child wants a new toy now.negotiator! Pass this book on to someone else who needs it. or engage in an unproductive argument. But if you scored 8 or less.

what can you do for me?” Or this to a restaurant manager: “This food order is wrong. time. some resolution must be negotiated. “I’d like Introduction 5 . The parties involved are interested in reaching a common goal. and each side can involve one person or several people (each representing one “side” of the issue). condition.• • • • • • • A hotel clerk tells you that your reservation was lost. and I don’t have time to wait for another. that can be negotiated. Multiple parties. There are flexible elements to the situation. Decision-making ability. perhaps the employee can say. since you lost my reservation. A friend is about to select the movie he/she wants everyone else to see. All of these situations are opportunities to negotiate. A teenager wants to buy his/her first car. 2. Therefore. Flexibility. such as price. 3. In some situations. one party is only allowed to follow policy or must wait “until the manager arrives. The parties are interdependent: what one party does affects the other. Interdependency. be prepared to bargain. perhaps you can say to a hotel clerk. Each one has the five key characteristics necessary for bargaining: 1. The parties involved can make a decision by themselves. A service repair person gives you an estimate on some work. you must advise the other party of your intention to negotiate. “Well. 4. or items of value. Two or more sides are involved. 5. Your spouse wants to buy new furniture. A neighbor wants to remove an old tree on your property line.” When you recognize that something can be negotiated. Both sides want a settlement. What are my alternatives?” During an employee evaluation. There must be a conflict in the sense that what one wants is not what the other wants. Mutual goals. Your boss reviews your past year’s performance. In some circumstances. For example.

and the tactics that might move the negotiations along. but I believe it adds value to our house. Choosing and applying the appropriate tactic to a particular situation will become easier as you begin to use them. and use the forms in the back to identify the issues. Once a settlement is reached.” To a neighbor you can say. the parties and their interests. 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 . and meet with you again. the other party will realize that you intend to negotiate and do not accept the situation. 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. Keep this book handy when preparing for any type of negotiation. How can you compensate us for our loss?” Once you’ve suggested that you see the situation as something to be negotiated. negotiations can be concluded with a written or oral agreement. the facts. “I see why you want to cut down the tree. Scenarios based on actual real-life situations are used to show how each tactic can be used in business or everyday situations.time to look over this performance review and respond point-by-point.

Do you wish you could negotiate a change in your job duties or salary? 7. In the past. spouse. etc. have you routinely resolved differences with a neighbor or a friend through a negotiated agreement? 5.? 10. or child. When you purchased your last home or car. do you believe that you negotiated the best possible deal? 4. have you ever required a written agreement covering chores. The last time you received sub-par service or food in a restaurant. Do you often refrain from negotiating a better price or service because you believe that you do not have good negotiating skills? Introduction 7 . Have you ever found yourself in a negotiation situation in which your best alternative was to walk away. allowance. As a parent. do you routinely negotiate a last add-on before you close the deal? 9. When making a major purchase. but you did not? 8. In the past. or division of household duties. Yes No Self-Assessment Quiz 1. did you request appropriate compensation? 6. Do you routinely negotiate for better accommodations when you check into a hotel? 3. have you ever felt that you were not adequately prepared to negotiate a job offer? 2.How good are your negotiation skills? Place a check in the box that applies to you.

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decide how complicated the issue is. The Quick Model The easiest way to prepare for a simple negotiation is to identify all the issues. Examples: • office location (city. The “Quick Model” approach outlined below is good for simple negotiations. if the situation involves a number of detailed or complicated issues or the stakes are relatively high. etc. the process will probably take several weeks or months as the parties move through all the stages. Then classify each one into one of three categories: Compatible (Integrative or Win-Win) Issues: Those issues for which both parties might have the same desirable outcomes. • an allocation for moving expenses (employee goal) traded for a set number of travel days per month (employer goal). If it is a relatively informal situation.SECTION II: THE NEGOTIATION PROCESS Before you begin the process of negotiation. state. the process will be fairly straightforward. one for another. They’re referred to as “win-win” because each side can achieve their goal. On the other hand. Examples: • a signing bonus (employee goal) traded for an annual travel budget (employer goal). The Negotiation Process 9 . including those that are less obvious. thus allowing each side to achieve one of their goals.) • primary sales territory • a starting date Exchange Issues: Those issues that might be traded.

10 50 Practical Negotiation Tactics . but feel free to try them when they seem most appropriate to your specific circumstance. The Comprehensive Model Negotiation is more of an art than a science. the other side loses. What one side gains. Depending on the situation and the parties involved. stages can be combined.Distributive (Win-Lose) Issues: Those issues that the parties are directly at odds with. rearranged. or even skipped altogether. Examples: • an item sold by one party and bought by the other • wage increases won by one side. 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.

Power #1– #6 Stage 2 Strategy: Choose Overall Approach to the Process #7– #14 Stage 3 Initial Offer: Getting Started Stage 4 Counter Offer: The "Give & Take" Stage 5 Pressure Bargaining: Striving for Conclusion Stage 6 Key Methods: Achieving Progress Stage 7 Reaching Agreement: Settlement of Impasse Tactics to Consider #15– #21 #22– #31 Negotiation Phase #32– #38 #39– #46 #47– #50 Initiation Phase Resolution Phase 11 . Information.The Negotiation Process Table 1: The Negotiation Process: Seven Basic Stages Stage 1 Identify situation as one for negotiation Preparation: Key Factors – Time.

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SECTION III: 50 TACTICS FOR SUCCESS

Stage 1: Preparing to Negotiate
n many negotiation situations, the parties have time to prepare for the actual bargaining. In other situations, such as when you’ve been served something at a restaurant that you did not order, there is no time to deliberate. You have to be prepared to instantly recognize that the situation can be negotiated, and begin to bargain. You can have time to prepare if you simply ask for it. For example, at the end of an employment interview for a management position, the candidate was surprised to receive a job offer on the spot. The candidate wanted the job, but wisely recognized that she could negotiate the contract. She said that she was very interested, but needed forty-eight hours to make up her mind. She used the time to talk to current employees, and developed a list of perks and conditions that she then negotiated, before accepting the position. To prepare for a negotiation, do as many of the following activities as you can: 1. Have realistic objectives. Identify everything that can be negotiated, and set realistic objectives for each item. If, for example, price is a factor, determine the desired outcome and set a minimum (or maximum) acceptable outcome, beyond which you will walk away and choose another alternative (see Tactic #1: Know Your BATNA). Also determine your opening offer in light of your desired and your minimum outcomes. It is often helpful to list each specific item to be negotiated and your minimum acceptable offer for it, as well as your desired goal and an acceptable opening offer (see Tactic #5: Listing Items). Thus, for each factor, write down and stick to three figures:

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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.

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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.

Example 1
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.

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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. was a power play. In this case. and the Jaggers decided once and for all to sell their business assets and invest the proceeds conservatively. and equipment. the Jaggers decided to seek buyers for their land. but rather what the buyer planned to do with the car. The owners. They learned that their assets would be easy to sell and were worth more than originally estimated. With only two weeks remaining before a threatened strike. The $56 million dollar business took them 30 years to grow. notified all the employees of their intentions. The union negotiators thought the Jaggers were bluffing. Example 2 Shari and Jim Jaggers own a successful West Coast pottery company. selling became an attractive alternative to a strike or prolonged battle. When negotiations with the union became hopeless. The union negotiators convinced the employees that this too. and either move it with him to Arizona or find another classic car collector who might buy it (perhaps for less) and preserve it. Conclusion Selling their business was the Jaggers’ BATNA. inventory. as Harvey had for many years. The Jaggers gave the union their “last. and it now employs 230 craftsmen. his BATNA was not to hold out for more money. labor contract negotiations between the Jaggers and a local labor union representing the pottery’s craftsmen have stalled. The union is demanding wage and benefit increases.” which was refused. providing them with a very good income for life. best. The threatened strike became a reality. and final offer. 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.Conclusion Harvey’s best alternative—his BATNA—was simply to hold on to the car for the moment. For the past two months. 16 50 Practical Negotiation Tactics . as a last resort.

Tactic 2: Know Your Opponent’s Real Objective Each party in a negotiation will know. I think so. for example. This is a good thing to know.000? That’s more than I planned. at some point. I’ve been thinking of getting rid of it for a while. and told John several times to let him know if he ever wanted to get rid of it. Just running out of space.000. what the other party’s desired outcome is. she might have to take a lower offer just to be able to move. John: Tom: John: Tom: Tom. you know. John assured Tom that this would never happen. I’ll have to think about that. sure. Gosh. 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. you still interested in my rifle? Of course. It is extremely rare—one of only 100 made with that bore and handle. Preparation 17 . Just as important is the why. Tom: $20. right? John: Sure. Make me an offer. A person who has to sell her home because her company is relocating her. it’s still perfect. If you are the party making the offer on the house. Example 1 Tom had always admired John’s 1861 Confederate rifle. because if the company does not provide relocation benefits. Are you finally ready to sell it? Yes. it’s to your advantage to know what is behind a seller’s decision to put it on the market. What changed your mind about getting rid of it? It is still in perfect condition. I guess I couldn’t take less than $20. How much are you thinking it’s worth? John: Well. so Tom was surprised when John called him out of the blue one day with a proposal. 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.

Tom: Okay. parties to a negotiation are not likely to reach agreement. so he is making it a condition of the sale that ALL current employees must be retained for a minimum of two years. Example 2 Rick.000. fearing that this will put all of his employees out of work.) Tom: John. and we’re committed to keeping it open as a major division of our company. but then he will be happy to retire.500 had an 1861 for sale. The sale price for the company has not yet been agreed to. He doesn’t want BigManu to know this because he thinks it will hurt his negotiating position. Was Tom interested? Tom declined. One of them mentioned that someone who is negotiating with him to buy a restored Winchester rifle for $18. and now the two-year requirement has become a stumbling block in the negotiations. However. When Tom found out why John decided to sell his rifle. we 18 50 Practical Negotiation Tactics . but I could get the money to you right away. John: Well. but thought this might explain John’s sudden interest in selling the rifle. Well. Tom now felt comfortable negotiating the price. He is two years away from retiring and does not want his business to fail before he does. I don’t think I can go higher than $18. Tom: Okay. it made the negotiations easier. I’ve been thinking about your offer.500—we’d have a deal. Rick needs to remain president of the company for the next two years. let me think about it and I’ll get back to you. let’s do it. No longer worried about John’s motives. if you could come up a little—say $18. Without some trust. we really want to buy your company. has begun negotiations to sell his firm to BigManu Company. the owner of a small manufacturing company. BigManu: Rick. (Tom investigated the “market” for a restored 1861 Confederate rifle by calling a few other collectors. Conclusion Tom entered into the negotiations suspicious of John’s motives.

my employees will prove to you that they are uniquely able to run this place. BigManu: You know we want you to stay on and manage this division for us. 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.cannot guarantee to you that ALL of your employees will be retained for two years. You’ll be in place to participate in our employment decisions. and we think it’s an odd request anyway. and I hired every one of these people. Working as a division of your company. Within the parameters of efficiency and effectiveness. Preparation 19 . Rick: I built this business from the ground up. We just can’t make good operational decisions with our hands tied. they decided to put their price on the table and revisit the issue after a price was agreed upon. Rick: These people are the best at what they do. BigManu’s negotiating team concluded that they were in the dark as to why this two-year requirement was so important to Rick. you will have a say in how the employees are treated. let’s talk about the job guarantee you wanted. We still can’t find a way to do it. they will make you plenty of money and more than make up for any “operational” difficulties it might cause you. I need to give them some sense of comfort if this deal goes through. Let’s talk later. (Between negotiating sessions.) BigManu: Okay. BigManu: We just don’t see a way to give you what you want on this. I just can’t go through with this sale. I just want them to have a real chance to show you how good they are. What is it you’re afraid is going to happen? Rick: I am convinced that with a two-year time frame. Without this commitment. I just don’t want it to change after I’m gone. In hopes of pushing the deal forward.

Rick: Well. 20 50 Practical Negotiation Tactics . would it? Rick: Well. I’m hoping to retire in two years. Once Rick realized that he no longer risked anything at the negotiating table by making his need known. Conclusion By masking his real objective (giving himself two more years as president before retiring). BigManu: Why don’t we guarantee to you that you will stay for two years? That way. Rich almost lost the deal. Let me get back to you. This wouldn’t have anything to do with your own plans for the future. you’ll have a guaranteed “in” to protect your people. he agreed to allow BigManu to accommodate him without limiting their ability to make business decisions.BigManu: We intend for you to stay and become a big part of our company. that might work. but we won’t be completely tied to operations as they are now. I certainly want to do all I can until then to protect my people. to tell you the truth. Surely you’ll be able to “protect” your people if they are as good as you say.

such as a hotel conference room. I like the frog. and go play somewhere! Cybil: Well … Okay. Mother: Hush. (thirty minutes later) Bailey: So. 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. Bailey: Cybil: Preparation 21 . the frog is everybody’s favorite.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. girls. and so on. (Think of the showroom tactics used by car dealers. too. Cybil. Make up your minds. how can you trade the frog—he’s your best one! Dede: (Bailey’s other sister) Yeah. they control the breaks and environmental factors. they have the information they need at their fingertips.) 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. it’s a deal.) Prepare for the negotiations by controlling the setting—to your advantage or to mutual advantage. I’ll give you my duck and frog for your whale and horse! Cybil: I already told you that I don’t really like that frog much! Jenny: (Bailey’s sister) What? Bailey.

Conclusion Team A did not realize the practical advantage they gave Team B when they agreed to negotiate in B’s boardroom. around the clock. until we have a settlement.” The chief negotiator for Team B agreed. non-stop negotiations wore down the members of Team A. The chief negotiator for Team A publicly challenged Team B to “negotiate non-stop. They were blamed for accepting the same deal that had been rejected only days earlier. Team A agreed to a settlement almost identical to the one rejected days before. Team B had clearly used its home turf to gain a substantial advantage. knew that her sisters liked the frog best and that they would help convince Cybil of its “value” and help Bailey make the trade. Team B. Team A was whipped physically and emotionally. having set up beds. 22 50 Practical Negotiation Tactics . meals. Both sides desperately needed to settle a property dispute. That’s why she wanted to go to her house. Team A agreed to change the meeting place. although only ten years old. as long as they met in the boardroom of Team B.Conclusion Bailey. in their own familiar setting. not one member of Team A was chosen to return to the table. About thirty-six hours later. When negotiations resumed in two months over another piece of property. was still going strong. They had all been replaced after their decision to negotiate “around the clock” in Team B’s boardroom became known. while members of Team B were able to stay fresh. and other conveniences in the adjoining room. After forty hours of negotiating. Example 2 Two five-person negotiating teams had been trying to work out a deal for over a month. The firm deadline was only four days away. The physical and emotional demands of 24-hour.

I gave you my “family” rate. I would have charged anyone else much more. Larry: Just make sure you’re comparing apples to apples. This uncomfortable negotiation followed: Larry: Will. When you first told me about your project. Will is a licensed plumber. based on objective criteria (think property appraisals in real estate). Larry had expected to pay him for his time. you are likely to resent them for it and hold out. Larry: Well.Tactic 4: Use Objective Criteria Use objective criteria to judge the quality of each side’s proposals—you will probably improve your chances of coming away satisfied. I did get some estimates from plumbers. After all. and show them the actual work that got done. but was shocked at the amount of the bill. Prepare for the negotiations by having an outside authority measure or weigh in on each side’s position. I was kind of surprised at how high it was. Larry: But Will. about your bill. Larry was thrilled. When we got into it. It was twice as high as the estimates Larry received from other plumbers before they started the project. I anticipated much less work. it became clear that all of those pipes had to be pulled and new ones put in. Things turned sour. these plumbers certainly acted like they understood the work when they gave me their estimates! Will: Tell you what. rather than give them the “advantage. and they were much lower than this. If you think that the other party knows more than you do. Example 1 When Larry’s cousin offered to help Larry finish the renovation on his bathroom. If they tell us that they either Preparation 23 . Will: Larry.” This can hold up an agreement and cost you in the end. Let’s get the guys back in who gave you estimates. though. and he and Larry have always gotten along. Believe me. when Will presented Larry with his bill.

Comparing the estimates to Will’s actual costs would have been counterproductive. she had been investing the college’s endowment funds for many years. I find your suggestion to the Board that I haven’t been doing my job right to be very insulting! Stuart: I’m sorry. my first reaction was that some of the investments 24 50 Practical Negotiation Tactics . they had to agree that their early estimates were low. because (as Will pointed out) it wasn’t an apples-to-apples comparison. they would have had to revise the figures. I have been very diligent about making sure that the fund makes the most money it can without putting us at risk. and decided to bring the matter up at a Board meeting. I’ll revise my bill to meet the lowest estimate you get. Budget Officer: I don’t know what your problem is. He was disappointed in the performance of the fund. Example 2 After Stuart was appointed to the college’s Board of Trustees. he used his financial expertise to analyze the investments of the college’s endowment fund. they said. I certainly didn’t mean to offend you. and no one had ever questioned her performance. Conclusion When the other plumbers looked at the work. while she wasn’t an expert. The college’s budget officer was understandably offended. The estimates would have been higher than what cousin Will charged. Settling on the right objective criteria upon which to base a negotiation requires that both parties think through their options. Had they actually prepared bids on the work.disagree on the need for that work or that they would have done it for less. Larry: That sounds fair. 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. From a look at the portfolio.

As you know. 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. I don’t question that they were sound at one time. then you and I can talk about changing our investment strategy. Okay? Budget Officer: Okay. how can we identify the right parties? Conclusion The two-month experiment did produce the results Stuart had anticipated. but we can ask them to plan and cost out each move. considering commissions and all. but I want to be involved in the discussions with them about what we’re asking. the college is a private institution. I find that a more aggressive investment strategy produces a better return. Stuart: Yes. Preparation 25 . Now. 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. I don’t want you directing how they’re going to go.were stale. but I think they more than offset the gains. At the end of two months. We just can’t make up losses to the endowment fund without considerable impact on our annual budget. but some of these stocks have really lost their value. if both of them demonstrate a similar strategy and produce better results after expenses. because she did not have the background in investments necessary to trust such advice. there might be increased risk and some expenses for commissions. Stuart: No problem. In this situation. Budget Officer: Yes. but such a strategy also increases risk and costs more money to administer. I have a suggestion. and its resources are limited. and the budget officer was comfortable that the risk and expense of such a strategy was small and worth the effort.

a sixteen-year-old who lives with her parents and three younger sisters. you should each put together a “package” of several items on the list and work out a win–win agreement for these things. not just an allowance increase! There is: (1) a $10 increase. You can’t treat me the same! Mother: Well—so we’re talking about several issues. 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. has asked her mother for a $10/week increase in her allowance. 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. baby-sit your sisters. what else can I do. Shari: I’m four years older than the next-oldest. (3) more chores. not on what you want to spend. your little sisters will want equal treatment. Example 1 Shari. besides washing the dishes every night and cleaning my room? Mother: You could cook dinners. It will cost me more than $10—about $35 per week. cut the grass. Mother: But your allowance is based on what you earn in your weekly chores. This strategy can build trust in the negotiation process itself. I need more money for clothes and CDs. Mother: That’s a large increase—and we just raised it last year! Shari: Well. if I give you an increase. and ask the other party to add to the list. and for going out with my friends. and (4) different treatment from your sisters! 26 50 Practical Negotiation Tactics . Once you both agree on the list of things to be negotiated. (2) a later curfew. Shari: Well.

Example 2 The union and management negotiating teams opened discussions with a list of 48 demands. but unlike your sisters. was avoided. Management: (after calculating the total value of the five items during a break period) We agree to your package of five items.Shari: Right! Mother: So … I suggest no allowance increase. Shari: (pause) I like it! Conclusion Shari’s mother helped negotiations along by listing all of the items being discussed. while your Dad and I go out. Now we have a package deal to propose … Preparation 27 . which the other children would have requested as well. since all of their items were included as requested. and item #23 (the wellness program voucher). Shari got the $10 she wanted and a later curfew. An allowance increase. Then a “win-win” solution could be determined. Union: We will agree to your proposal on item #6 (the number of paid holidays) and item #14 (the new overtime hourly rate). The union’s chief negotiator. item #11 (the clothing allowance). Management agrees. And if you clean the whole house on Saturday. 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. in the first session. opens by proposing the list of items. while the mother won a Saturday house-cleaning and a night out each week. if you agree to our proposals on item #3 (the paid vacation schedule). I’ll pay you $10 to babysit every Wednesday night.

28 50 Practical Negotiation Tactics .Conclusion In most labor negotiations. the two sides will at this point sign and date the list of proposed items. Then negotiations can resume on the remaining 43 items. other trade-offs are proposed and agreed to until only a few items remain. thus removing them from the discussion table.

but money doesn’t mean anything to me at this point in my life … Well. day. I live a few blocks from here. time of day. He stopped and knocked on the door. One day. Timing is everything! Example 1 Bob Hillard had been coveting a turquoise 1963 Chevrolet Impala Supersport convertible for several years.Tactic 6: Timing Is Everything The exact month. thanks. As the man got out of his car. (For the next three years. my name is Bob Hillard. he saw an elderly man get in his dream car and drive away. That’s a generous offer. as he left the supermarket. say. I love this car—restored it myself. Prepare carefully. just out of curiosity. Hi! What can I do for you? I’ve admired your ‘63 Impala for years. Not even for. $12.) Preparation 29 . 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. It was nice meeting you. on Briarwood Road. which turned out to be only a few blocks from his own house. Would you possibly be interested in selling it? No. and do your homework.000? No. One day. the following conversation occurred: Bob: Car owner: Bob: Car owner: Bob: Car owner: Bob: Hello. he noticed a FOR SALE sign in the yard. 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. and general circumstances under which negotiations take place can substantially impact the outcome.

the timing of his second effort was perfect and it enabled him to negotiate for the car of his dreams. I’ll see you on Monday. the proposal would die at midnight. A third vote at 3:00 p. A majority was needed to pass the partnership agreement. Can you come back on Monday at 10:00 a. Example 2 It was Sunday. Can I see it? Sure. and the vote was a 6-6 tie each time. 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. resulted in another 6-6 30 50 Practical Negotiation Tactics . and wondered if your ‘63 Impala might also be for sale … (obviously not remembering Bob) Well. so I guess I will be selling it. I can’t take it with me. Follow me. as a matter of fact. beyond which the project would have to be abandoned. that’s a fair price. I’m moving to California to live with my daughter.Bob: Car owner: Bob: Car owner: Bob: Car owner: Bob: Car owner: Hello! I noticed your FOR SALE sign. to seal the agreement at the courthouse? Sure. The board members had met twice before. if a seventh vote could not be found by the pro-agreement side. Well. The partner organization. had issued a deadline of December 31st.m. December 31st. Then it’s a deal? Yes. for tax reasons. (after a careful inspection) It’s a very nice car! I’ll give you $12.m.000. and I promise to take good care of it.

in the end.m. 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.m. the project had been stalled by 6–6 votes. Preparation 31 .. the leader of the pro-partnership side heard someone say that the meeting needed to end by 5:30 p. When the meeting resumed at 4:00 p. timing was everything..deadlock. Conclusion The leader of the pro-project group recognized that they might have a unique timing advantage. That effort failed. Both sides caucused: The leaders on each side met to negotiate a compromise..m. a member of the anti-project group left the room. and the meeting was adjourned. during an hour break in the meeting. Then..m. For weeks. At 5:30 p. The measure passed 6–5 at 5:45 p. the pro-project leader told his members to filibuster until he gave a signal and called for another vote. as predicted. A member of the pro-project group quickly called for a vote after the leader gave a signal. and it worked. He planned for it accordingly.

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such as a buyer and a seller or a city and its union. For example. might step in and help settle negotiations between a union and administration negotiators. Third parties sometimes have their own hidden agendas. for example. or one-time-only. The overall strategy chosen does not limit the use of other tactics. 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. if you want to begin in a friendly. decide whether the negotiations should be continuous. In some cases. If you prefer to take a firm and direct approach. After you have evaluated these factors. uncaring approach (Tactic #9: Control Your Emotions. as well as their bargaining history and financial and political positions. Are there any outside people who might influence the process. Identify all outside influences and hidden agendas before you develop your strategy. 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. a third party can serve as a mediator (a legislative body. Look at the personalities of each negotiator and see which side will be more vulnerable to pressure bargaining (Stage 5). Tactic #12: Find Common Interests can be helpful. Before you can do this. and Tactic #48 (Walk Away). Tactic #33 (Bluff). and Tactic #10: Make a Reciprocal Buy-Sell Offer) are also useful alternative strategies. such as Tactic #19 (Make a First and Best Offer). as it can substantially alter the negotiations between two primary parties. A neutral. you must first evaluate your needs and those of your opponent. then Tactic #13: Set a Deadline or Tactic #11: Have an Expert Witness might be helpful. Tactic #43 (Nickel and Diming). 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 . Be sure you are aware of this at the beginning. such as a third-party negotiator.Stage 2: Planning a Strategy he next stage is critical: Choosing a strategy. Some of the tactics listed in this book are only suitable for single-session negotiations. cooperative manner. but in practice it will likely influence the whole process.

half-serious. By assuming opposing roles. I offer half the asking price. with “All right. the seller’s agent called the buyer about the property. 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. and the buyer was able to completely renovate the house and still have a great deal. The agent explained that the seller was desperate. 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). 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). but the inside was a complete turnoff.” The agent took the offer to the seller.side is either caught off-guard or (in some rare cases) a negotiator will be able to achieve an unexpected fantastic settlement. If there is a significant weakness in your position. 34 50 Practical Negotiation Tactics . His teenage sons had “trashed” the house. The buyer loved the location. The desperate owner agreed. two people on the team will be more successful because they evoke different emotions from the other side. Weeks later. “Please make any offer—they are motivated!” The buyer responded. For example. The buyer said he wasn’t interested.

your request must not be so low that the other party concludes that you are not negotiating in good faith. but certainly not exceptional in any way. Carol: Maybe not. six years ago you bought it for $60. we think $160. It’s a good neighborhood. Carol wants $160. one buyer shows some interest. Buyer: The air conditioning might have increased the value of the house. After all. First.000. Planning a Strategy 35 .Tactic 7: Decide How “High” Is High Your first demand in the negotiation process is the most important decision you will make. Surely there’s some flexibility in your asking price. with no success. And I don’t see a lot of difference in the neighborhood. Buyer: We really like the house. but not so high as to end the negotiations before they begin. Your demand should be high enough to give you room to compromise. and just refuses to reduce it. Finally. so think this through well ahead of time. Be realistic. but the house has increased in value. The market hasn’t gone up that much in six years. If you consider the demand ridiculous. so do not underestimate what you might be able to achieve. You are not likely to get more than you request. She has had it on and off the market for the last five years. Anyone buying the house would want to change wall colors or add new carpets. but we simply can’t take less than $160.000. However. and then look at the demand from your opponent’s perspective. but quite frankly. it is likely that your opponent will.000. but the redecorating is of little value. Example 1 Carol has been unhappy with the house she and her husband bought six years ago. we’ve put a considerable amount of money into a new air-conditioning system and in redecorating. Each time. We also think that the neighborhood has improved over the last few years. Carol: We really want to sell. her real estate agent told her that they were probably not going to get a buyer because she is asking too much.000 is very high. as well.

Example 2 The law firm of Bits & Bites was a Sioux City institution. though. or she has unreal expectations. the founders of the firm.000. When Carol refused to budge. Buyer: Good luck!! Conclusion The buyer expected Carol to counter the $100. A new law partnership from a nearby city contacted Bits & Bites and offered to “buy” the rights to the name to use in their law office in their city. 36 50 Practical Negotiation Tactics . were still alive.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. Inquiries to other law firms were not very helpful because in almost all of the instances. Here’s how the initial negotiations went: Partners: Well. We’re curious.000 immediately. the transaction also included some degree of consolidation of the law firms involved—not just the use of the firm’s name. as to how you think the name is going to benefit you. we are certainly interested in your request to “buy” our firm name to use in your city. Neither Edward Bits nor Edmund Bites. but they have no idea what the value of their firm’s name might be in this nearby city. and then $10. The firm now had over twenty-five law partners who owned the firm and continued to benefit from the reputation and name recognition of Bits & Bites.000? Carol: We really can’t take less than $160.Buyer: What if we offered you $100. the buyer took it as a signal that either Carol didn’t want to sell. enjoying a statewide reputation for quality representation.000 offer by coming down in price at least a little. In any event. Carol drove off a potential buyer by setting an asking price that was just too high. The partners are interested in selling the name.

I’m kind of embarrassed now. We should assume. And we. (surprised) Well. that is a very high number. Let’s just pretend this didn’t happen. We probably won’t be insulted. because we were not even close to that number.New law firm: We are establishing a partnership of ten lawyers—the top two moneymaking attorneys in each of five local firms. Well. Yes. To offer it now would be an insult. We weren’t really thinking about that amount of money. but we get to keep all of the money we’ve received up to that point. What number were you thinking about? Well. Thanks so much for meeting with me. we do. we reserve the right to withdraw our permission. expect to pay for that. you have a very solid reputation there. In every instance. If at any time we feel that you have “harmed” our name. one of these two attorneys carries the surname of the firm they are leaving. And even though you don’t have an office in our city. I really don’t feel comfortable doing that now. Using the Bits & Bites name can only enhance our profitability. (concerned about loosing the opportunity) Wait. Give us some range. we want $500. So. Partners: New law firm: Partners: New law firm: Partners: New law firm: Partners: New law firm: Planning a Strategy 37 . it would be impossible to create a new name out of the names of our key partners. starting with the ten partners you describe. of course. then. and then 10% of your profits each year for as long as you use the name. because you are in the state capital and your firm has handled a lot of high-profile political cases.000 initially. that you anticipate to build a very profitable law firm. I guess this is just not something we’ll be able to pursue. that’s just our initial figure.

Bits and Bites should have let the prospective firm make the first offer.Conclusion Bits & Bites lost an opportunity here because their initial demand was so unrealistic with what the prospective firm thought the “naming rights” should cost. In this situation. because there was no “objective” criteria available to help them set a reasonable price. Both parties were probably at a disadvantage. 38 50 Practical Negotiation Tactics . since they had initiated the contact. Either side could have asked for too much. The price they were willing to pay would have indicated what the naming rights were worth. It immediately dropped the idea. rather than negotiate.

Peggy: That’s fair. Andy and Paula. Andy and Paula: Yes.200. Half what it cost us new. Peggy: I assumed they went with the mower. Andy: No. One member of your team acts friendly to people on the other side (the good guy) in order to gain their trust and support. They cost about $300. since they are sitting out in the driveway with it.Tactic 8: The Good Guy/Bad Guy Routine The “good guy/bad guy” routine is a useful one. Peggy: Planning a Strategy 39 .400 if the catcher and can are included. Your opponents will want to avoid confrontation and unpleasantness with the “bad guy” and are likely to be more willing to cooperate with you. Peggy: I’m hearing one thing from Paula and another from Andy. so I’ll take it. what’s your price? Andy: $1. I don’t know what the deal is now.200! We should get $1. only three years ago. I want to keep those. I’ll go home and you can call me if you two can reach an agreement. Peggy. I can use them. 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: So. not for $1. we won’t need it at the new condo. Andy: I want them… Paula: Go ahead and take them. And take the leaf-catcher attachment and the gas can. and I know how you take care of things. threatening. Andy: No. while another acts difficult. Example 1 So. etc. angry. Paula: Go ahead and ride it home. I heard that you want to sell your riding mower.

She very wisely recognized the routine and forced Andy and Paula to give her a clear.000 per month is one of the highest in town. Sandy. firm offer if they decided to continue negotiations. And we need to add a clause that holds your company responsible for machine damages.Conclusion Peggy thought she was getting the old “good guy/bad guy” routine. we’re here to negotiate a new service agreement. You are located outside our primary service area.200 will be about right… Sandy: I can’t begin to pay that! Liz: Calm down. For the past three years. Liz: But we still want to renew your contract. Miguel: Well. She realized that it put her in an impossible negotiating position. Let’s talk. And we want to change the 24-hour service response time to 48 hours. Miguel: I’ve figured $4. Sandy: What? First of all. Example 2 Sandy (business owner): Miguel and Liz (representatives of a computer firm). perhaps even unintentionally. we’ve been fairly happy with your responsiveness. and your training programs. your account has taken too much time. Miguel: But not at this ridiculous rate. Sandy. the quality of the technicians’ work. And cut the training hours from 55 to 20. 40 50 Practical Negotiation Tactics . your rate of $3. We estimated that it has cost us more than $50. causing our reps to spend hours on the road.000 in service calls last year alone because your damn people don’t take care of the equipment.

Our customer base has grown. I’m afraid our relationship is over. (Three hours later) I’m back. Any luck. you two? Good news. I’m going on to lunch. What can I do? Let’s try to negotiate something reasonable before Miguel gets back. I’ll explain on the way back to the office. Sandy. Conclusion Miguel and Liz used the good guy/bad guy tactic in the classic form: Miguel scared and threatened their opponent. Then he left so Liz could convince Sandy that they needed to quietly reach an agreement she could “sell” to Miguel later. 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. Planning a Strategy 41 .Miguel: Sandy: Liz: Sandy: Liz: Miguel: Liz: No. Sandy. and it’s not efficient enough anymore for us to handle smaller firms—especially those outside our region. Miguel! We’ve worked out a deal I think you can live with.m. but Miguel’s right. with a position he knew was unreasonable. even though it was far above the previous contract. Sandy. If not. I hope you can meet my terms. I want to keep you as a customer. these terms will put me out of business—I’m a small 20-person operation. Liz.

because we have had a sick relative out of town and we used long distance a lot this past month. in fact. Control your emotions and use them to your advantage! Example 1 Mike prided himself on being an informed and educated consumer. he was very unhappy. I have a problem with my recent bill and my billing rate. 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. 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. 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.00 a minute. The fault was partly his because he did not stay on top of changes. 42 50 Practical Negotiation Tactics .Tactic 9: Control Your Emotions Stay cool. So. but I recently was sold a $. and might even harden your opponent into an unfavorable position (for you or for both of you). 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. It seems that the rate you are charging me on my home phone is $1. Here’s how the phone conversation went: Customer representative: Mike: Over-the-Air Long Distance. He had. such as deals on computer packages and phone services. He decided that the best approach was to act indignant when he spoke to the company representative. I noticed this. How may I help you? Hello. This will put you at a distinct disadvantage from this point on. made some very good purchase decisions for his small business.10 a minute rate at my office location.

although he wasn’t really angry) Are you suggesting that it was my responsibility to advise you when one of your “offers” was available to lower my rates? How would such information even come to my attention? More importantly. Had you brought this to our attention before. (beginning to sound irritated. But as a very good customer of yours. to begin now. Mike: Customer representative: Mike: Customer representative: Planning a Strategy 43 . But I am able to offer you a $.I expected the bill to be higher than usual. The company might have had any number of different introductory rates and incentives for people to buy our service over the course of eight years. I realize that that might be the rate I started paying when I first took your service over eight years ago. how would anyone who might only have residential service even know to ask? Well. and I also realize that if I had examined my bill closely. Mike. Well.10 per minute rate on your long-distance service. but this was quite a shock. I would think you would have given me the best rate you offer new customers. I would have known I was paying too much. we certainly would have discussed your options. I see that the rate you are being charged is the rate we offer for the type of service you have with us. of course it is not always possible to give existing customers some of the “offers” we have out. Customer representative: Let me pull up your account. It hasn’t been increased at any time.

there’s no reason for this conversation to continue. If you can’t get me someone to talk to. controlled voice) I need to talk to someone who can do it immediately. 44 50 Practical Negotiation Tactics . a long-time customer of your company. The best we can do is fix the rate for the future. (with a much angrier tone) Madam. Wait—I’ll get my supervisor. but I can’t do that. don’t think this is directed at you personally. strategic anger and abusive behavior. I would hope that you would credit my account for this better rate for past service. however.10 per minute. But I’m looking at a $500 longdistance bill. and I should be treated with more respect! I’m sorry. which should rightly be $50. either. Mike’s willingness to show a measured “flare of temper” brought results. We certainly don’t want to lose you as a customer.Mike: I would imagine so. The latter would not have produced the desired results. she kept Mike as a residential customer as well as a business customer. I am. 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 $. I … (interrupting and in a stern. but I am very angry with Over-the-Air Company. In doing so. He was walking a thin line. Is your supervisor there? I’m certain that he cannot adjust your account retroactively. after all. and I want to speak to someone in authority so I can terminate my service. between controlled.

The employees’ negotiator finally decided to use “indignation” to break the stalemate. The most-senior employees want to have the right to refuse overtime and have those less-senior employees take the overtime. Owner: Now. and it’s not what we’re even talking about. Owner: I’m just not willing to let my best people refuse to work the extra shifts during our busy season. 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. 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. Working with fireworks is working with explosives. and that they should be asking for a fairer base wage for the work they do for you. they would become dissatisfied with their pay and want their base pay increased. Where are your managers? Where is the training necessary to make Planning a Strategy 45 . The owner told the employees that he was worried that during the overtime shifts. and it’s getting old. They will be putting the plant AND their fellow workers at risk by not being here. The owner was afraid that if the mostsenior employees routinely passed up the overtime and the overtime pay. and you just can’t be too careful. On those overtime shifts. that’s just not fair. 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. lesssenior employees might be at greater risk of injury because they have to handle explosives.

No one who takes a job with us can be unaware of that. though. he became more reasonable. Had the owner let him leave.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. In practice. but not all? Conclusion The owner was on shaky ground with this one. Until you’re ready to talk about that.) Now. But we protect our people. (He begins to walk out. or they’re not. After the employees’ negotiator threatened to walk out. The safety of the plant demands it! (standing up to leave) This is just ridiculous. The negotiator was also running a risk with his flare of temper. most of them continued to take all the overtime they could get. Sit down. not at all. don’t be so hasty. or they’re not. The end result was that the most-senior employees did win the right to refuse overtime. You are not addressing the real issue for you: money. But the fireworks business is a business that involves risk. I’m not coming back. All I’m saying is that the most-senior employees have to be on the overtime shifts. Then you can’t have it both ways. That’s all. Either they are properly protected. either the employees are properly trained. now. 46 50 Practical Negotiation Tactics . What if we were to agree that the senior employees could refuse half of the overtime offered to them. the negotiator would have had to find a way back into the negotiations without losing ground. sit down.

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. called the “Reciprocal Buy-Sell Offer. since this one is in perfect shape and it was Mother’s. or sell it to the first party and consequently receive the full amount from the first party—thus giving up the object. The following examples explain how it works: Example 1 Susan and Mary Anne learned from their brother Mike that their recently departed parents’ estate included a somewhat valuable antique coffee grinder. The first party decides on a price for which he or she will either buy or sell the object to the second party. All the rest of the estate has been divided among the family. Susan. Both sisters covet it. (two days later) Mary Anne: Well. you’re the oldest. my kids and I looked on eBay and everywhere else and found out that coffee grinders in perfect condition sell for about $500. the executor of the estate. The second party then decides to either buy it at that price and pay the first party.” is the recommendation of Howard Raiffa. However. with winner taking all. I’ll give you 48 hours to decide the price. Mike: Mary Anne. and split the proceeds. a well-known negotiations professor from Harvard University. with the highest bidder paying the amount to the other side in compensation for their loss. Planning a Strategy 47 . I’m willing to pay or let it go for $800. you will decide if you want to buy it for that price or receive that amount from Mary Anne (but lose the grinder). 2) They can flip a coin. 3) They can agree to sell the object to a third party. has decided to use the “reciprocal buy/sell offer” process to settle this last piece of the estate. A fourth option. Then Susan. so you set a price at which you agree to buy or sell the coffee grinder. Mike.

Both sisters felt that the process enabled them to resolve the issue fairly.” Howard: Since in this case you are talking about a multi-million-dollar business. and then decide how much more “emotional value” it held. They accepted his suggestion to use the “reciprocal buy-sell strategy. 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. After I open the bids. Conclusion The “reciprocal buy-sell offer” process caused both Mary Anne and Susan to research the market value of the coffee grinder. I suggest a slight modification to the process. Agreed? Abe and Bobby: Sounds good! Let’s draft and sign a written agreement detailing the process. which will bind us to the outcome. Thanks for making this last step as easy as possible. Two business partners had been working together for ten years to build a successful business. to submit a sealed offer to buy/sell the business sixty days from today. They thus were able to determine the highest price each was willing to pay for it or receive for it. Both came to Raiffa to help negotiate a settlement. You will both agree.Susan: Mike: Well. but each partner had grown to dislike the other and wanted to end the partnership (but continue to own the business without a partner). (sixty days later) 48 50 Practical Negotiation Tactics . Example 2 Howard Raiffa described a consulting situation in which he used the “reciprocal buy-sell offer” process in his book. I’ll pick it up tonight. Lectures on Negotiation Analysis. Here is my check for $800. in writing. I choose to buy it.

you agree to sell your half-interest to Bobby for $180 million. Planning a Strategy 49 . but only if they could become the sole owner. And I will arrange financing to pay you $180 million to become sole owner. Agreed. Abe. Conclusion Both parties wanted to keep the business. and to close within ninety days. Bobby was willing to pay more than Abe to remain sole owner. I will arrange to sell him my half-interest for $180 million. your bid is $190 million. The partner who was out-bid in a fair process received a fair settlement: $10 million above what he was willing to pay. and both men had carefully estimated the market value of half the business. and we close by July 1st. 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. your bid is $170 million. Bobby.Howard: Abe: Bobby: Abe.

Example 1 A young couple were discussing a possible purchase of new furniture for their living room. When he showed his wife the detailed spreadsheet. He thus ended up having greater negotiating power. he decided upon a strategy: First establish himself as the “dimension expert. and forcing him or her to control the discussion of the issue. This strategy worked. The wife was determined to buy the least-expensive brand rated excellent by consumer publications.” but there were substantial differences in price—differences that the wife did not see as a problem. Looking at these statistics. They both expressed an interest in finding a couch that offered the most “interior” space. she glanced at it and immediately deferred to his opinion. and created a spreadsheet to compare the five best-rated couches on their list. Based on seating capacity. The husband found the dimensions of the couches in the brochures and Web sites. so when the husband wants them to make an 50 50 Practical Negotiation Tactics . the one he wanted (one of the least-expensive) was superior. It can also work in reverse: establishing the other person as the expert. When it came to comfort.Tactic 11: Use an “Expert Witness” Establishing yourself as the expert on a certain topic in order to get what you want can be an effective tactic in the appropriate situation.” and then argue for the frugal alternative. and the husband felt like he saved them hundreds of dollars. Conclusion The husband became the “expert” in this situation by doing the homework. They knew that sitting on dozens of couches in a single day would be confusing and would make it difficult to determine which one is the most comfortable and roomy. This approach can also be reversed: The wife in this situation is a banker. The couple decided to limit their selection to those rated “excellent. the one that was the most expensive was superior.

Preferred Provider Organizations (PPOs). and should therefore handle the problem. you gain an edge when negotiating a new plan for your company.investment decision or deal with an error in a bill. and Point of Service (POS) plans. he argues that she is the expert. He claims to lack the knowledge or insight to do the work—which he is then able to avoid! Example 2 A negotiator can often gain a valuable advantage on issues such as medical insurance or labor contracts by doing the homework and becoming an “expert. Many bargainers on the other side will not know their HMOs from their PPOs or their POSs and are likely to leave important details up to “the expert” to decide—just as the negotiator planned! After explaining in some detail what each of these three types of insurance plans are. 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 .” If you spend many hours learning about Health Maintenance Organizations (HMOs).

neither of you want to be embarrassed at the outcome. I missed dessert the other night because I had to get to baseball practice. This is done by deciding at the outset what you both have in common: You both want to reach an agreement. she decided to try something different. Example 1 When Russ and Bill got home from school. and neither boy was very happy. because I am so conscientious about my paper route. like we usually have. they saw that there was one piece of cake left over from their mom’s bridge party. Unless you can convince me otherwise. here’s what they said to her: I think I should be rewarded with the piece of cake. you want to reach an agreement that is favorable to an outside party. I also took out the garbage last week without being asked twice. They immediately began to fight over it. and so on. she made them share whatever it was. These positive things are part of your goals and objectives. This time. and their mother was tired of it. Usually.Tactic 12: Find Common Interests You are more likely to come away with a satisfying outcome if you and the other party set the stage for agreement. The boys quickly huddled. you both want to complete negotiations by a certain date. particularly when things seem to be at a standstill. and then asked their mom for a chance to negotiate with each other. the last piece of cake will get thrown away. If this was chocolate icing. Russ: 52 50 Practical Negotiation Tactics . That simply rewards your continual squabbling. point them out at the very beginning of negotiations and refer to them throughout the process. Mom: I’ve decided that I’m not going to cut this piece of cake in half and give you both some. and I really love the banana/butternut/ sour cream frosting on this cake. I wouldn’t care so much. Be clear on what you have in common at the start. When they boys returned. The two boys fought over the last piece of everything.

to 3:00 p. Marilyn originally set her shop’s hours for 10:00 a. so these hours worked out well. It was the type of shop the nearby residents preferred. Customers have started to park in nearby apartment lots. 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. 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. That sounds like a wonderful solution.m.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. and that’s not my favorite either. Now that her children are in college. Residents: Marilyn. she opens her shop at 7:30 a.m. Example 2 Marilyn’s Memorabilia Store was located along the main commercial street of a residential neighborhood. One day. and I really like white cake. and her children were in school. The last cake we had was chocolate cake. and better than a fast-food restaurant with late-night hours and a drive-through window. your new shop hours have caused your customers to park in our parking spaces. and keeps it open longer so she can attract customers on their way to and from work.m. We realized that if we cut the cake lengthwise. Planning a Strategy 53 . I helped with the bags without being asked twice. so that your customers can park on the street. I can have the part with the icing and Bill can have the part with the cake and filling. she got a visit from some of the residents. This cake is white cake. We really want you to go back to your original times. because there is no parking along the street during morning and evening rush hours.

54 50 Practical Negotiation Tactics . But in order to keep my new customers. Between 7:30 a. So. Lets try it. 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. and between 4:00 p.. if I go ahead and open the shop at 7:30 a. and see if it works.m. and 9:00 a. But I really am increasing my sales by being open longer hours. and the residents needed Marilyn’s shop.. let’s see what the options are. rather than after work. and is probably empty in the afternoon if they haven’t gotten home yet. We think they’ll be agreeable to the morning parking.m. It is very costly to have cars towed. I have to convince them to come before work.m. Most of our residents are gone by 8:00 a. if residents haven’t left for work yet. Do you? Marilyn: No. my customers can’t park on the street. and 6:00 p. and usually the car is gone by the time a tow truck shows up anyway. Identifying their shared interests caused the nearby residents and the customers to reach agreement. The parking lot used for apartment residents is probably full from 7:30– 9. I don’t think that would be very good for business..m. and I close at 4:00 p.I’m sorry this is happening. and 9:00 a.m.m. then we’ll try and accommodate you.m. Marilyn: Conclusion Marilyn needed the extra parking. I really need that extra income to stay in business.m.m.? Residents: We certainly want you to stay in business here. 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. The shared parking arrangement did work out for Marilyn. If you need to have the shop open more hours.00 a.m. And we don’t think you want your customers’ cars towed. Okay. we have to be willing to tow the cars that violate it. or so anyway. the off-street lots probably won’t be used by my customers.

That will take days! I haven’t been in this house for twelve years. 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. one at a time: the youngest. how should we go about dividing up the furniture and possessions? I can’t talk about it. but it can also work against you if you set one that is unrealistic or you fail to plan for it adequately. Well. But at Planning a Strategy 55 . How can I do that? You all live in this town and you know this house. 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. A few hours? I can’t—I’ve got to leave shortly for the drive home. We just don’t have the time … We’ve got to do this—the house is sold! Okay. let’s all take two hours to look around and make a list of things we might want.Tactic 13: Set a Deadline Be sure you know well ahead of time what the deadline is for completion of negotiations. Example 1 Four adult children have gathered at the home of their recently deceased mother. etc. let’s all take a few hours to look around. Then we can sit down at this table at 3:00 p. we can each take turns selecting things … Like each tool or dish. I don’t. the first.m. Deadlines can be imposed externally (such as the government’s deadline to get a tax break) or internally (set by one side. and start choosing things. Well. 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).

if I cannot carry a negotiated and signed deal to my board by noon on December 31. All of us must come back before Saturday to take what is ours—agreed? Okay. and I appreciate your interest in the historic structure. being the oldest. can sell or give away what is left. 56 50 Practical Negotiation Tactics . we all leave. Agreed. However. then the whole deal is lost because my company will lose $10 million in tax benefits under a federal law that expires on midnight.m. if we are not finished.Sue: Mary: Jenny: 5:00 p. we cannot agree to these development plans submitted by your company until we have reviewed how they will affect the historic buildings. Example 2 Allan: As the negotiating team for the city. 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. And besides. Sue. your attorneys know the tax laws. David: I understand your concern. this is December 29. Okay.. December 31. Allan: Let me confer with the city attorneys. Allan: What! Why did you not tell us this before? David: We never thought you would take three months to get to this point.

Obviously. Planning a Strategy 57 . He waited to bring it up until it was clear that doing so would help him get the settlement his side desired. Conclusion Knowing the external deadline gave David a significant negotiating edge.) I understand the December 31 deadline. we can’t get the reports we wanted in 48 hours.Allan: (One hour later. Let’s continue. and I don’t like it.

But don’t lose it again. I bought the second one. 58 50 Practical Negotiation Tactics . and we used it a couple of times. and one of the ways to do that is to reveal a weakness at the beginning. Mom: All right. Then the teacher went back to the first one. I’ll need to buy it again. I’ll give you money for it. but his grades are good. There will be times during a negotiation when you will want to catch your opponent off-guard. Unfortunately.Tactic 14: Don’t Always Hide Your Weaknesses Be sure you know what your strengths and weaknesses are. as well as strengths. and Jason knows he is getting a D in Spanish. but I have a problem in my Spanish class. The objective is to negotiate from a position of strength. so he was able to prevail upon her to let him continue. but remember that both sides have weaknesses. but that was actually a different workbook. Mom: What’s that? Jason: A few weeks ago I lost my workbook. Have a clear goal in mind AND all the information you need to make your points. Mom: I gave you money to buy a workbook a few weeks ago. Now. before your opponent tries to catch you off-guard. we need to talk. and this usually means having all the right information. and I missed some assignments. Control the use of the information. We had one at the beginning of the semester that we were using pretty often. He knows that a D will mean that he will have to change the way he studies. Jason: Mom. Example 1 Jason likes to play video games as soon as he gets home from school and do his homework later. One day mine disappeared. first-quarter grades are coming out at the end of the week. while watching TV. as well as those of the other side. He decided to preempt the discussion in order to make the best deal. and you can neutralize its effect on the negotiations. His mother disapproves of his study habits. Did you buy it? Jason: Yes. don’t get mad.

my study habits are okay. The work I did turn in was fine. Since I missed some assignments. or borderline B.(maybe C+). she trusted it more. Conclusion All of Jason’s grades did improve over the next quarter. Obviously. then I’ll agree to make changes. It’s because I didn’t have the book. The location was ideal for a convenience store or a fast-food restaurant. All of my other classes are A. Although his Spanish grade was only a C+. I don’t think you’re taking your schoolwork seriously enough. Mom: Well. I think I can do that. And those are hard classes—Algebra. Example 2 Jane once owned a piece of property she wanted very much to sell. so there’s no reason to think I need to change my study habits. If I don’t pull the D up to a C or better. I think you need to give me the rest of the semester before making me change the way I do my schoolwork. and the D is directly related to my losing the book. B. but all three deals Planning a Strategy 59 . His explanation made sense. English. And I know I have to be better about getting in all of my assignments. and since he offered her the information up front. but I think you do need to change your study habits. Pizza Boy was interested and had even made inquiries about the property.Jason: Another thing. Environmental Science. 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. But that Spanish grade needs to come up to a B!! Jason: Okay. I’m sorry. I’ll give you more time. Thanks. Mom: Well. Jason: Spanish is just one class. he was able to continue to study the way he wanted to. all right. 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. Its owners found out that at least three other buyers had been in contact with Jane.

60 50 Practical Negotiation Tactics . and it’s zoned for commercial use. and was able to politely ignore her. Pizza Boy: We’ve checked the property out. since they were well aware of the negatives. Jane: Oh. was that Jane’s neighbor had contacted each of the previous potential buyers and complained about their plans to use the property. it’s only the neighbor to the right of the property who has a problem. Pizza Boy: Well. The Pizza Boy people figured that Jane’s asking price must be too high or that she is unwilling to negotiate. however. A tentative deal was signed. Pizza Boy: Well. When she contacts you.had fallen through. I know. The neighbor’s attitude suggested that there would be major resistance in the neighborhood if Pizza Boy tried to put in a commercial establishment. the other interested buyers already have businesses in the neighborhood. which was way below the price they were actually willing to pay. When the neighbor heard about the new buyer. I’ve got to warn you—you might hear that there is neighborhood resistance to your putting in a pizza restaurant. I’m sure. What are her grounds for complaining? Jane: She doesn’t have any. This is how the negotiations went: Jane: Pizza Boy. But unlike your company. I’m very happy you’re interested in my property. however. she will want you to think it’s the whole neighborhood. I think you’ll find that this is only one person. we’re not interested in neighborhood fights. though. Actually. she started her campaign to keep them from closing the deal. Furthermore. let’s assume that you are right. Jane’s up-front disclosure of a potential problem allowed Pizza Boy to weigh the negatives with the positives. either. there were no unpleasant surprises to stop the deal. What are you asking for the property? Conclusion Jane told them her asking price. They decided not to fight a disgruntled neighbor. You are a big enough corporation to withstand her objections. Pizza Boy was prepared for her call. really. The real problem.

by Michael R. Another common strategy is to start with the status quo.500) Fig. (2004). “Distributive” bargaining (“win-lose” or “zero sum”) is used. Adapted from Labor Relations and Collective Bargaining.000) Settlement Range ($22. 190–192. None is as important as the first one. Many negotiators make their initial offer the highest acceptable offer (Tactic #19: Make a First and Best Offer).750–$25.000) Target Point ($23. 2: Distributive Bargaining Process.000 22 23 24 25 26 27 Initial Offer $28. 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.500) M $21. Exchanging Initial Offers 61 . Experienced negotiators often view negotiations as a process in which the goals of one party are in direct conflict with the goals of the other party. such as proposing to continue at the current rate or price. quick agreement. Carrell and Christina Heavrin.750) Target Point ($24. for example. The initial offers of both parties are usually set reasonably above or below what each believes to be the settlement range. The negotiator firmly states that it is their best offer in an attempt to gain a nice. This is a practical starting point that will not anger the other side (and might even be expected).500) Resistance Point ($25.Stage 3: Exchanging Initial Offers any offers and counteroffers are made during a typical negotiation—sometimes even hundreds. as illustrated in the following figure: Seller Resistance Point ($22. The initial offer sets the tone of the negotiations and reveals something about the strategy of each side. in negotiating a labor agreement or the price of goods or services: The monetary gain realized by one party is also the monetary loss of the other party.000 Buyer Initial Offer ($21.

if the buyer’s initial offer was $25.In this example. thus starting out on a positive note. The settlement range is the distance between the resistance points. When the two parties agree to a price within the range.” but the settlement price. each initial offer ($21.000 and $28. the other side does not agree to this value). See Tactic #18: Agree on Something As Soon As You Can. 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. 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. these points have set the outer limits. 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). In the example. 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). 62 50 Practical Negotiation Tactics . 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. A target point is the desired settlement value a party has set as a goal when negotiations begin. the seller would immediately accept it because it is greater than the target point and the buyer would suffer a winner’s curse. it is termed the settlement point – not the “right price” or “fair price. thus producing a true “win-win” negotiation. Resistance points are the maximum or minimum beyond which a negotiator is likely to consider an offer unacceptable (and possibly walk out).000) is reasonable. usually.000. Experienced negotiators will begin the negotiation of several items by quickly proposing such a package. Two extremely helpful tactics to be used immediately after initial offers are made are Tactic #15: Caucus and Tactic #20: Posturing. the process quickly narrows to the range between the initial offers. and is the range in which most negotiations actually occur. After initial offers are exchanged.

calling for a caucus gives you a chance to get your team to recommit to a particular course of action. so we’ll have the party from 7:00 p. without revealing their ideas to the other side. Shelly. Mom: We’re planning on having your party here on Saturday night.Tactic 15: Caucus If you are part of a negotiating team.m. If the team is feeling pressure to concede on certain items. You can invite up to 20 of your friends. so her parents sat down with their daughter to discuss the details. If negotiations seem stalled. Example 1 Shelly’s “Sweet Sixteen” party was coming up. If the negotiations are heated. and I already have 25 names. it gives the parties an opportunity to reassess where they are and determine if everyone involved agrees that they should be heading in this direction. We don’t want it to be a late evening. A caucus is when a negotiating team calls for a break and leaves the negotiating table to confer in private. A caucus gives you an opportunity to work out problems with your own team in private. If the negotiations have suddenly gone in an unanticipated direction. call a caucus so both sides can brainstorm new solutions to keep the negotiations going. a caucus can be used as a break to calm the situation down. Shelly: Twenty friends? You’re kidding! I’ve just started on my list. To do so in front of your opponent would obviously undermine your team’s position in the negotiations. There are many ways to use this strategy. because it might disturb the neighbors. the negotiations got out of hand when Shelly’s dad forgot what had been decided. We’ll just have chips and soda. Unfortunately. and presumably had an agreement. A caucus is certainly called for if individual members of the team become agitated or express frustration with the progress of the negotiations. And that’s just my friends from school! I haven’t started Exchanging Initial Offers 63 .–10:00 p. or if a member takes on a role in the negotiations that has not been assigned to them. Her mom and dad had already talked about it privately. make use of the opportunity to call for a caucus.m.

(shocked) Jerry’s band from down the street? They’re a punk rock band! Their music is totally inappropriate for sixteen year-olds. And midnight is definitely too late. okay. we’ll call you when we’re ready.—that’s so “baby. Time out! Dad. That would be great! It would keep everyone entertained. Oh. 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.” They would never expect a party to end before midnight. (During the caucus. Mom! This is my “Sweet Sixteen” party. And they can’t go home at 10:00 p. (with some irritation) I’m not sure. I’m sure we can ask them to tone it down a little. It’s special!!! Well. (excited) That would be so cool.m. and then the number of kids won’t matter. And can we bring in pizza? Or maybe one of those “mile-long” hero sandwiches? I like those—let’s do the hero sandwiches. In fact. We’ll get a band—everyone does. We could play records and you guys could dance.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. That sounds like too many for here at the house. Shelly. we need to talk. I guess the VFW will work. I could invite everyone!! Hold on! I thought we agreed that this was to be a simple party. I think the band would be fine. we could rent the VFW hall. Shelly’s parents reviewed their first planning discussion and went over what Shelly’s mom thought they had already 64 50 Practical Negotiation Tactics . Your dad and I already talked about this and agreed that 20 guests would be the limit. Actually. Dad. alone.

please!! 11:00 p. When they called Shelly back in. Your mom and I agree—11:00 p. too? No way!! I want presents!! Conclusion In spite of their prior planning. That way. her mom presented the revised proposal. But we can have the band. Mom’s call for a caucus gave them a chance to regroup and re-state their original objective. this mom-and-dad negotiating team became unglued during the negotiations.m. Okay. and you can invite more friends. but no Sweet Sixteen birthday party decorations. is for little kids!! No.m. A DJ? I guess that’s okay. Does that mean no presents. and not a huge production. Example 2 The contract negotiations between the company and the union had been going on for days. That’s so lame. Dad. which was to make sure Shelly’s Sweet Sixteen party was a fun and safe evening. we will be better able to chaperone.Mom: Shelly: Mom: Shelly: Mom: Shelly: Dad: Shelly: Mom: Shelly: decided. And we’re serving chips and sodas. but we’ll schedule the party for 8:00 p.m. can’t we? No band. The item currently on the table was the company’s offer to give each Exchanging Initial Offers 65 . causing them to lose control and make compromises they hadn’t intended to make. But you are limited to 40.m. but your dad and I agree on getting a DJ to play.) Okay. sorry. and we will need to approve the list. Agreed. All right. to 11:00 p. midnight. we’re going to rent the VFW hall.

The union’s lead negotiator misunderstood the proposal. What is this. I’m just saying that tuition benefits are sometimes a good substitute for health insurance. and thought he was being asked to choose between a health insurance plan and a tuition benefit plan for all members. Tuition in place of health insurances? They’ll think I’ve lost my mind. it’s a good proposal. 66 50 Practical Negotiation Tactics . The company’s negotiator didn’t recognize the misunderstanding. and the following conversation occurred. Union negotiator #2: Please—just a moment outside. Union: (angrily) I’m not presenting this proposal to my people. Union: You’re offering a choice between health insurance and tuition payments? What kind of a deal is this? Company: Hey.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. A lot of employees have spouses who can get health insurance coverage through their work. many will want to use it for their children’s education. The tuition benefits will encourage the workers to be prepared for new job opportunities. With the cost of college educations so high. 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. Union: Why are you so concerned about new job opportunities? Are you holding out on us? Company: No.

and the parties were able to complete their negotiations.) I’m sorry. (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. Exchanging Initial Offers 67 .Union: Union: Company: Okay. I thought that the contract would cover one or the other for everyone. I think that what you’re proposing is a really good idea. let’s move on. Conclusion Negotiator #2’s timely call for a caucus so she could explain the miscommunication in private saved the session. Good. and I apologize for explaining it poorly. Now. Negotiator #1 regained his footing. the parties returned to the room. I didn’t understand that your proposal was to allow each individual member to choose between the health coverage or the tuition benefit. we’ll be back in 5 minutes.

It is a useful tactic in any negotiations. Salesman: Well. it’s a great car and a fair deal. I’ll go get him. At a point late in the negotiations. not revealing that the item exchanged is a “throwaway. Mr. But for this price. Hobbs: Yes. However. I know. I can go to another dealer and get a green exterior—the color I like best. you don’t want your opponent to know what these things are. Salesman: Let me talk to my manager. and noticed that none of the vehicles have a green exterior. but … Salesman: But what? Hobbs: Well. (Salesman returns with manager) 68 50 Practical Negotiation Tactics . this conversation takes place: Hobbs: Yes. when the two sides are only a few dollars apart. 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. Hobbs.” 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. 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.” Throwaway items are those things that hold little or no value to you. so be sure you present them in a way that suggests importance. He doesn’t really care about the color of the new vehicle. we’ve got expenses and we need to make some profit. Example 1 The buyer. but he makes a mental note to use color as a “throwaway” item. Here’s how it works: Party A exchanges the item for something of true value. but in reality. you are making $200 profit over the true dealer’s cost.Tactic 16: Use Throwaway Items Identify ahead of time what you place a high value on and what you are willing to give up easily—your “throwaways. according to my figures.

. Conclusion Mr. I’ll take the red one for $100 less. he brought it up and convinced the salesman and manager that it was an important item to him—possibly even a deal-breaker. Then we have a deal. The days in question are: Exchanging Initial Offers 69 . Employees will be paid time-and-a half for each of these days.Manager: Hobbs: Manager: Hobbs: Manager: Hobbs: Manager: We are offering you a great deal. 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 . All three employees must agree to the schedule. At the very end of the negotiations. and seniority will be used to determine who gets to choose the first day. Why didn’t you mention the color before? I didn’t expect to actually buy a new car today (note: not the truth). Miguel. 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. 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. Hobbs successfully chose color as a throwaway item.no it’s not. The manager was convinced enough to sacrifice a final $100 for the throwaway... Example 2 The office supervisor told the three internal sales representatives (Jenny. The three are sitting at a lunch table to discuss the schedule.

She proposes to work five days. Jenny and Miguel feel that they received something of value from Carolyn: She must work two more days than they must work. January 1 Carolyn: December 24. They agree. 27. Carolyn has decided to use as a “throwaway” the number of days she will work (previously. 30. She would actually prefer to work the extra days and get paid time-and-a half. She got what she wanted by giving up something she did not value: the two other days. and each chooses their days to work: Carolyn: December 27. They all agreed to their schedules. January 1. 70 50 Practical Negotiation Tactics . December 30. This would allow Jenny and Miguel to each work only two days. 2 Jenny: December 23. December 27. January 2 None of the three are totally happy with the results.November 25 (the day after Thanksgiving) December 23. December 24 Conclusion Carolyn has achieved her objective: She will be off December 24 and 26. December 31 Miguel: November 25. December 26. 26. but that is a secondary consideration. 26 Miguel: November 25. 31. 30. 2 In the first round of negotiation. A second and third round produced the following allocation: Jenny: December 23. if they let her choose the two days she will be off and the five days she will work. They have decided to start over. 31 January 1. it was assumed that each would work three) in order to have December 24 and 26 off to be at home with her children. each made a first choice of days they will work. 24. in exchange for giving up earlier choices due to seniority.

Autumn and Angela. were faced with the task of selling the house and disposing of their mom’s personal belongings. they met at the house. for example. Their mother’s will was very clear: the three daughters were to all have an equal share of her estate. Anne and her sisters. and a collection of antique furniture. The house and much of the furniture has been in the Exchanging Initial Offers 71 . When the girls decided it was time to talk about the estate. and the stock and distribute the proceeds. along with the cash. the antiques. 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. A reluctance to include one particular financial item with other financial issues. but I’d like to talk about the house and the furniture. realizing that the total cost of a deal might make or break the agreement. Anne: As I see it. their mom left specific pieces of jewelry and art in the will to each of the girls. 300 shares of stock in a pharmaceutical company. three ways.Tactic 17: Package Items In a negotiation where there are multiple issues or items to be negotiated.000. Example 1 When their mother died at age 82. it is often helpful to package the items in distinct groups and then deal with each package separately. one might package all of the financial issues in one group and negotiate on that package as one issue.000 with no mortgage on it. we need to sell the house. The estate’s assets included a checking and savings account totaling $450. The house was closed up at the time of their mother’s death because she had been in a nursing facility for a couple of months. can indicate that something you think is minor is really a major concern to your opponent. For example. In addition. Autumn: I don’t have any objection to selling the stock and distributing the proceeds and the cash three ways. a house valued at $250.

What would you think about agreeing today to distribute the cash and stock three ways. Anne: Okay. Frankly. it’s a magnet for vandals. Anne: I’m not sure I’m comfortable talking about trading the jewelry and art Mom left to each of us. There was a reason why she gave us what she did. Why don’t we leave some of the cash in the bank. I’d like it all to stay in the family. don’t you think? Angela: Maybe. I’d like to talk about the art works Mom left each of us. Anne: But that means we have to continue to take care of the house and its contents. we can sell ours. but the operative word is “give. So we agree: We’ll leave $30. I’d really be interested in talking a trade for some of them. We’ll split the stock three ways. so I will be able to keep tabs on it. Angela: Now’s not a good time to sell either the stock or the house and antiques. And we’ll fix the house up.” She gave those things to us.000 in the bank and distribute the remainder three ways. In fact. Angela: I live close by.family for years. Soon. and if we wait a couple of years. we’ll discuss again what happens to the house and the antiques. If Angela wants to hold on to her stock. we’re really free to do with them what we want. Angela: And we can talk about the art and jewelry? 72 50 Practical Negotiation Tactics . If we want. she’s free to do so. Autumn: Sounds good to me. Autumn: I think its awfully soon to be making these kinds of decisions. we will have a more valuable asset. and now that we have them. With no one living here. Mother was born here and grew up here. and letting everything else wait for another discussion. and use it to fix the house up? Then when we make a decision. It’s a buyer’s market now. we’d get a lot more for them. there’s a lot of work that needs to be done to get it ready to sell or to make it livable for one of us.

deciding whether there would be annual wage increases as well as merit increases. Waiting to make decisions on those items until some time has passed gives the women an opportunity to look at a number of options. including benefits for partners in non-traditional relationships. and the art works—will be more difficult. Example 2 The attorneys and staff of the local Legal Aid Society formed a union and were about to negotiate their first contract with the executive director. deciding to base the increases on a percentage or equally distribute the funds for increases among the professional and clerical staff. Several issues also needed to be addressed: the ability of employees to move up through the organization. Angela: That’s fine. etc. tuition benefits. and the assignment of the limited number of parking spaces. The third: Ben- Exchanging Initial Offers 73 . health benefits. The negotiations on the other items—the house. vacation.). sick. The second: working conditions (work schedules and promotional opportunities). May I suggest that we divide the items into three areas. Anne: Same with me. funeral. but I’m making no commitment to trade. what kind of paid leaves there will be (personal.Autumn: I can agree not to do anything with the jewelry and art Mom left me before we talk. and establishing a work schedule to accommodate evening and weekend clients. Employees: We’ve got a lot of items to cover. Conclusion Autumn’s suggestion to package the money and stock because they can be easily divided by three made agreement on those items possible. the antiques. the jewelry. The following tasks needed to be a accomplished: establishing basic pay schedules. and deal with one area at a time? The first: Wage issues (pay schedules and the annual and merit raise issues).

There is more flexibility to use non-public money sources to reward employees who will cover night or weekend hours or who qualify for merit increases. Executive Director: Well. Also.efits (health insurance. Employees: I’m surprised that you would take merit increases out of a general discussion of wages. so there’s not going to be a lot of discussion on what our pay schedules and annual increases can be. Let’s get started. tuition benefits. that makes sense. I would include that under the Working Conditions category. Executive Director: Sounds like a good agenda. Later negotiations were difficult. Executive Director: I think it’s a good idea to group items together. as well. to be honest with you. I think it also makes sense to include tuition benefits in the Working Conditions category. And paid leave clearly belongs with Wage issues and should be discussed with the pay schedules. 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. paid leave times. because they’re really an incentive for better performance. Employees: Okay. the paid leave categories are pretty clearly defined. but I’d change your list. Wages should not include merit pay raises. 74 50 Practical Negotiation Tactics . we are an agency supported generally by public funding. That’s a program that can have a lot to do with how employees are able to increase their worth to the organization. and the parking spaces). So I’d like to see us get through the wage issues quickly and then move on. but the parties were able to come to agreement because the wage issue had been resolved.

It indicates to your opponent that you are a reasonable negotiator. Consider starting things off by presenting your opponent with a proposal you feel confident can be agreed upon without argument. An initial agreement. and might not even be able to keep the house. It was her idea to buy the house and go into debt to furnish it. They had also furnished their house on credit.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. They were in the middle of buying a house. The couple hoped to do the divorce without involving lawyers in order to save money. Exchanging Initial Offers 75 . The discussion might become very heated. Kathy borrowed more money to go to graduate school full-time. You signed those papers. but don’t think you’re going to stick me with all of the mortgage and credit-card payments. and she agreed. Tim began working right after graduation. They have no children. and both have good jobs. sets the stage for mutual respect and communication. without suggesting any changes or modifications. no matter how insignificant. Now. Tim worried that he would be stuck with all of the debt. You can also make an effort to agree on something your opponent offers early in the negotiations. They met and married in college. rather than disposing of assets. Tim: You might be leaving town. are divorcing. Their “property division” was mostly about dividing their debts. Kathy’s first job paid more than Tim’s because she had a graduate degree. and that you are entering into the negotiations with the intent to reach agreement. because Tim felt that Kathy had taken advantage of him during the marriage. and they were making payments on school loans (for his undergraduate degree and her undergraduate and graduate degree) and on two cars. Kathy was asked by her employer to relocate to another city. after a brief marriage. Example 1 Tim and Kathy. with her promotion sending her out of town.

yes. Kathy: I suppose we should look at the school loans next. I think that makes sense. ABC usually uses UPS 76 50 Practical Negotiation Tactics . The first thing I’d like to talk about is what we are going to do about the cars. as you remember. I think it only fair that I take over repayment of all the school loans. Okay. and you got your sports car. hold on. I say we agree to transfer the convertible loan to me and you take over the loan on the sports car. Frankly. I got my convertible. about the house and furnishings. and XYZ Co. The monthly payments are about the same. Kathy and Tim were able to agree that Tim would take over paying for the house and furnishings and Kathy would get 50% of the equity accrued by the time of the divorce. When we bought them two years ago. Tim: Well. and he could pay it in annual installments over a five-year period. If both of us had been working the year I went to graduate school. Kathy: Now. Example 2 ABC Company. I can hardly argue with that. I don’t intend to “stick” you with anything. a wholesale art dealer. an art gallery. even though the convertible is being paid for through a 48-month loan and the sports car through a 36-month loan.Kathy: Hey. we would have paid down our school loans more. Tim: Okay.. 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. we decided to each pick out our “dream car” and that we would not overrule the other’s choice. entered into a contract through which ABC sold to XYZ twelve works of art by 19th century American painters of modest talent for a post–July 4th sale. as long as the cost was approximately the same.

and arrived on time and apparently in good condition. Holiday weekend storms caused the electricity to go off for different periods in different parts of the city. However. ABC refused to pay WeCanShipArt until it received payment from XYZ. XYZ decided to cancel the promotional sale that was to start on Wednesday. but XYZ asked specifically that a little-known company specializing in shipping art known as WeCanShipArt be the shipper. There was no indication that the gallery’s electricity had gone out over the weekend. and that XYZ needed to either go to the shipping company or its own employees for compensation for the damage. The three parties agreed to hold a conference call late Monday afternoon to try and resolve the dispute. let me make XYZ an offer: We will deliver three additional artworks to you by the end of the day tomorrow so you can conduct your promotional sale as advertised. ABC: Before we begin. and began preparing to return all of the artwork to ABC. We’ll expect you to pay for the 12 works that will be in your show. when the boxes were opened on Monday.to ship artwork. but only if you let us ship it UPS. Unfortunately. ABC’s position was that the artwork was fine when it left their location. and the boxes showed no external damage. XYZ’s manager failed to open the boxes or remove the artworks. or else the box was damaged in XYZ’s warehouse. XYZ: ABC: Exchanging Initial Offers 77 . water from the gallery’s air conditioning unit pooled on some of the surfaces of the warehouse area. The other times this happened. You can get the three new artworks here so that we can hold the sale as scheduled? Yes. and we will continue to discuss who is liable for the three water-damaged works. 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. They arrived right before the holiday weekend began. it was obvious that the art in one of the boxes had suffered considerable water damage. XYZ contacted ABC immediately. WeCanShipArt claimed that the boxes were not damaged in shipment—the artwork was already water damaged. The artworks filled four boxes.

XYZ: Agreed. XYZ: Okay. generated a like offer from WeCanShipArt and a reasonable response from XYZ. the three companies were able to agree to undertake an investigation within each company to determine when the artworks were damaged. If we don’t make the deadline. WeCanShipArt: Wait a minute. we’re ruined. that’s okay with me if it’s okay with XYZ. 78 50 Practical Negotiation Tactics . You can’t just ignore us. Now. They also agreed that if the investigations are not conclusive.m. regardless of where the original three artworks were damaged. Having reached an amiable solution to the immediate problem. how do we resolve the issue of the damaged artworks? Conclusion ABC’s decision to offer a solution to XYZ’s immediate problem. they will split the cost of the three damaged pieces three ways. and if word gets out that you think it was. at its financial risk. we’ll take responsibility for all of the consequences: the lost sale to ABC and the lost promotional sale by XYZ. tomorrow and we’ll wait for payment on both shipments until we resolve how the artworks were damaged. We can guarantee that we will deliver the new order in perfect condition by 5:00 p. And we’ll eat the cost of shipping. ABC: Well. I can’t see how I can refuse that. The artwork was not damaged while in our control.

It is important that both sides know that there is no negotiating beyond the single “best offer”—that the first offer will either be accepted or rejected. we paid $5. we plan on selling our Ford tractor when we move. but if you’re interested. and it came with the bush hog and the leaf pick-up. no hard feelings either way. Ann: That sounds great! I don’t want this to affect our friendship. 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. I don’t have any idea. Ann: Well. You must mean what you say and be prepared to walk away from an unacceptable offer. The “first and best” tactic enabled them to settle the matter easily. Jeff spends many hours mowing the yard every week. I know you and Jeff said you’d like one because you have about five acres. Example 1 Colleen: Ann. Ann: Thanks! We really need one. consider using the “First and Best” tactic. Why don’t you give me a price? Colleen: Oh. we’ll sell it to you. We plan to put an ad in the paper next week.Tactic 19: Make a First and Best Offer If you want to cut a deal but you don’t like the “give-and-take” negotiation process. but ONLY if you have a bottom line or definite point at which you will accept an agreement and you believe the other party will make a reasonable offer. 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. and even more hours in the fall picking up leaves.000 for it six years ago. period. Exchanging Initial Offers 79 . I don’t want to quibble. What do you want for it? Colleen: Well.

I came up with the best salary offer I can make. how about you making your first salary offer your best one. as we agreed. I’ll either accept it or reject it. and you know my current salary. (three days later) Vernon: Archie. So. no questions asked. We want you. because it was several thousand dollars above what he decided was the minimum it would take for him to change employers. and I’ll take 48 hours to consider it. I think we have agreed to all aspects of the job offer. Conclusion Archie accepted the job offer. I’ll get back to you in three days. I’ll discuss it with my wife and get back to you in 48 hours. 80 50 Practical Negotiation Tactics . I expect a fair increase. except salary.Example 2 Archie: Well. Archie: Thanks. Here it is. but I don’t want to start off in a new job by negotiating with my boss! So. on this slip of paper. I want the job. but we have internal budget considerations and we must consider equity with other employees. Okay? Vernon: That sounds good. I don’t like negotiating over salary either. who admired the way Archie negotiated his starting salary. He also started the job with a positive working relationship with Vernon.

curfew would be okay.) During the posturing phase. you only have one Senior Prom in your life. you know that Sally is really looking forward to this. a 4:00 a. but he figured “all night” was relative. you will probably have to modify some of your positions if you are to reach agreement. Example 1 Kevin. was dating a senior. and ignore or deny any weaknesses in it. He knew his parents would not agree to let him stay out all night. Kevin: Mom and Dad.” but it is also a source of valuable information that can help the negotiations proceed to a successful conclusion. and we’ve made a lot of plans with our friends that I need to talk to you about. First we’re going to dinner. Posturing is indeed “acting. Second. then the prom. I’m the only junior in the crowd. we’re all meeting at Donna’s so we can share a limousine. Present your position and demands as if yours is the only logical position.m. Exchanging Initial Offers 81 . First.Tactic 20: Posturing You might have to do a little acting at the beginning of the negotiations.” As you know. look for indications from your opponent as to what he or she believes is their best position. 17 years old and a junior in high school. Fourth. It might be your only opportunity to explain your position without interruption. 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. This is called posturing—presenting your position strongly and completely. He and his date had decided that as long as they could join their friends for breakfast after the prom. and in a favorable light. we’re not going to be dating exclusively after this summer. so he knew that he would have to sell them very quickly. Third. and then to breakfast at “Timothy’s. (Once negotiations get underway. and it really wouldn’t be fair if I wasn’t able to go along with the rest of the group. Kevin had “negotiated” with his parents before. since Sally is going away to college next year. so the prom is a pretty big deal to both of us. Sally’s Senior Prom is coming up.m.

you and Sally need to call it a night (or really a morning). Donna’s parents will be there. And. We’re just not convinced that your entire group has been alcohol. We are.or drug-free. We think that after the breakfast. this prom is a one-night thing—a dance that is dressier than you’re used to. but to use that as a reason to stay overnight doesn’t make sense. we told you that we would not be changing our rules to accommodate that older group. That’s the deal then? Okay. I don’t drink or do drugs. and the crowd we hang with doesn’t either. remember that when you started dating Sally and hanging out with an older crowd. for sure. you have been fairly good about making your curfew—most of the time.Mom: Kevin: Mom: Kevin: Timothy’s usually isn’t open early in the morning.m. I know you trust me and that I’ve earned the trust. And if we don’t spend the night. That’s asking us to believe a lot. I’ve never missed my curfew. However. Fifth. Sally’s parents trust us and have already said yes to her. we’ll have to get in our car and drive home very early in the morning. From where we sit. Second. Donna’s parents are not as strict as they could be when a bunch of you are there. Also. Yes. but it should not be oversold. they will be open for the Prom crowd only. 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. so there will be plenty of chaperoning. You make some good points. We’ve heard that they allow kids to drink. happy about your plans to use a limousine so you kids aren’t driving. which could be dangerous. I believe you can pay a little more and have the limousine bring you both home. of course. You realize that this could be as late as 4:00 a. yes. but because the owner’s daughter goes to Sally’s school. 82 50 Practical Negotiation Tactics . and we’re just not happy about that. I think I ought to be able to stay out all night. we know. Finally. So. Things can happen on a night like that that adversely affect you for the rest of your life. the limousine will take us back to Donna’s house to spend the night.

Tencro approached the state’s Economic Development Officer. if anything. The assembly plant is out-of-date.m. and it does not really need any help. Also. and had this conversation: Tencro: We really want to keep our company here and expand it. but there are limited options available.Conclusion Kevin’s strategy to hit his parents with all of his very good arguments at the outset gave him an advantage. The spin-off business from our operations is huge. Tencro has approached the state’s Office for Business Incentives to see what. but we’re getting a lot of interest from other states willing to help us relocate. but it could easily add another 500 if it had the space on its assembly line. regardless of the incentives. we’re of course interested in keeping you here. Tencro: Let me just remind you of what our company means to this state. we are one of the largest employers in this county. and it will grow—everything from sub-parts manufacturing to the shipping business we generate. Sally and Kevin had a wonderful night and were quite happy to have the evening end at 4:00 a. EDO: Well. but was disappointed to learn that they offer very few incentives. With 800 employees. If we can expand here. and a new. The company approached other states to see what incentives they might offer Tencro to locate in their state. It currently employs 800 people. the state can do to help the company expand and rebuild. Nevertheless. because his parents could not disagree with such wellthought-out ideas. we’d be adding at least 500 new jobs. Example 2 Tencro Company decided to modernize and expand its business. We need to find out what you’re willing to do to keep us here. one-floor operation would be very profitable. other companies have received incentives and Tencro certainly wants all it can get. Tencro is not going to leave the state. our Exchanging Initial Offers 83 .

additional police. We can’t possibly give it away to other companies coming in behind them. And we’ve been offered land practically free in the neighboring state. we will need the two-lane entrance expanded to four lanes. And. if the new location is at the local industrial park. schools. There are more residents in the state demanding more public services: road improvements. We do want you to expand your plant. Also. That might involve the state building housing for them at a reduced cost and providing them with some retraining. etc. and traffic signals.employees pump money into the economy by buying houses and cars. or else it will not be cost-effective for us to stay here. The industrial park land can’t be “free” because we have agreements with other companies that had to buy the land. what do you have to have? Tencro: We need a new location—20 acres or so—to build our new plant. any plan by the state to build housing that is subsidized by tax dollars will draw a great deal of criticism. 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. paying taxes. moving to a new location will raise a lot of questions from neighbors about the increase in traffic and pollution that might be generated by your plant. while we value your company as a long-time corporate citizen. Certainly. and we are willing to offer some training dollars for the new workers. so we’d have to have it free here. We need help in the cost of attracting and training the new 500 employees. EDO: Well.. We think that we’re the reason XYZ and ABC companies located here and we believe they are likely to leave if we do. and we’ve had to divert funds from business incentive programs over to basic services. We 84 50 Practical Negotiation Tactics . now that the economy has improved. We need certain incentives. EDO: The state has very limited resources to pay for economic development incentives. etc.

EDO: Get back to us as soon as you can. we’re just not in a position to offer more than that at this time. but for the fact that each party did its homework and was aware of the true facts. Tencro bought land in the industrial park. Conclusion The posturing by both sides could have caused the whole negotiation process to bog down. Exchanging Initial Offers 85 .agree that the road into the industrial park must be widened and a traffic light installed at our expense. let us go back and take another look at our options. Tencro: Well. However. Future negotiations continued. and hired 500 new employees. The new set-up was so profitable. and the state did end up participating in a housing subdivision in order to keep the purchase price down for the new employees. Other than that. the training and the new road improvements were all the incentives offered to Tencro. Tencro was able to pay off the borrowed money in half the time. borrowed money for the new building.

then $320. and that two similar ones on the same street sold for $330. such as last year’s price. Avoid giving away too much at the outset. Sue: Let’s offer $325.000. and houses in this area sell fast. 86 50 Practical Negotiation Tactics .000 this year. They found one they both like that lists for $325. Their realtor told them that it sold for $290.. before someone else does. particularly if you don’t know the other party’s “settlement range.e.000 and $337. at minimum cost.Tactic 21: Avoid the “Winner’s Curse” It is often quite difficult to make the first offer. 2) Start out with an old number.000 two years ago. Let’s low-ball them and offer $290.000. offer $150.000 three years ago). We don’t know how anxious they are to sell or if they know the market. thus requiring greater concessions on both sides. and you cannot withdraw it in good faith.000. either: 1) Let the other party make the first offer (this means that you will be giving up the chance to focus the negotiations on your figure. because you have settled quickly. of course. but you feel cursed because you gave away too much.000—what they paid for it. The sellers must be willing to come down a few thousand … Sue: Well. is the most (or least) the other side will accept.” (You have won a settlement. 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.) To prevent this from happening. or 3) Make an unrealistic offer (i.” The perfect first offer. Jay: No. The other party will probably come back with an equally ridiculous offer.000 for a house that sold for $185. never give them their asking price. That’s a fair price. think things through before you make or accept the first offer. Jay: No. which can be very useful). Example 1 Jay and Sue are looking to buy a house in a specific neighborhood because it has a good school system.

) Bob: I’d do it for $3.500—half the difference! Sue: Great. Let’s accept it! Conclusion Jay and Sue avoided the so-called winner’s curse by making a low (but reasonable) first offer. Sue: Then you do it. then let them make a counteroffer. They outlined how they would develop a new employee performance-appraisal system. Lyle Foxworthy. they had offered $325.000.Sue: Don’t be crazy. and the offer was based on fact: the prior negotiated price. I can’t tell our realtor $290.000 for each of us—$6. was very impressed with their presentation. (Bob and Frank meet privately to discuss the situation. the company president. That’s an insult! Jay: Well. realizing they offered too much.000 total. Give us your lowest price. 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. Lyle: So what’s your price? Bob: Can you tell us what you have budgeted for this project? Lyle: No. as requested by the human resource director. but who knows what they are planning on offering. since they had already bought another house. as Sue had first suggested. the sellers obviously would have accepted and Jay and Sue. Exchanging Initial Offers 87 . If.000. Both parties felt that they made a good deal. Frank: Me too. (the next day …) Jay: They made us a counteroffer of $307. The buyers were very motivated to sell.

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. We’ve waited long enough. They also ended up getting three times ($18.) Lyle: Okay. and you two come highly recommended. but we can’t pay more than $18. Lyle: Okay. but we know you must have an amount budgeted for this and we are willing to do it for that amount.000.Bob: Lets make them give us a price! (Bob and Frank return to the meeting room. Bob: That’s fair. and it would not apply. Conclusion Bob and Frank avoided the winner’s curse by forcing Lyle to make the first offer. That is all that’s left in this year’s training budget.000. We’ll do the job. 88 50 Practical Negotiation Tactics . I’m out of time.000) their minimum price of $6.

In some negotiation situations. Also. because if you do not at least appear to be flexible. Skilled negotiators such as salespeople. do not dismiss it because it is not all you want. Experienced negotiators seldom reveal their exact priorities and objectives. which would most likely weaken their position (see Tactic #26: Keeping Secrets). seeing no common ground. It has often been said that the key to negotiations is to be flexible (see Tactic #25). is likely to pull away from the table. 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. be enlarged (see Tactic #27: Expanding the Pie). and attorneys use tried and true tactics in giving and receiving offers. One or more parts might be acceptable or indicate movement from their previous positions. Experienced negotiators also know that proposing multiple options (see Tactic #22) and offering a tradeoff (see Tactic #23) are useful when more than one issue or item is to be negotiated. Use a prolonged period of silence (see Tactic #29) to convey something at a strategic moment. and remain open to offers and options that you did not originally expect (see Tactic #30: Always Leave Room for Dessert). and do not flatly reject it because it is not your offer. carefully evaluate an opponent’s offer. Expect that the “total pie” will be different from what it was at the outset. Instead. This can produce a negotiated solution without giving up your priorities (see Tactic #28: Fixed Alternatives). what appears to be an outer limit of the settlement range when the process starts can. Wait to counter (see Tactic #24) because this will give the opponent the sense that you are serious about bargaining. When the other party makes an offer. but possibly of different values to your opponent. labor negotiators.Stage 4: Making Counteroffers he heart of the negotiation process is the give-and-take. in fact. T Making Counteroffers (The “Give and Take”) 89 . the other party. which is often the case.

what say you. Example 1 Jerry. and that he already made plans to visit with college friends on the East Coast for the two weeks after that. Proposing only one solution to a problem. Jerry will be here. 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. 19. Here’s the discussion that followed: Mom: Well. Let’s see what we can work out. so you can go without me. His brother Sydney. Jerry had already started his summer job. I don’t want to give up on a family vacation that quickly. He planned on being home for one last week before having to pack up and go back to college. while it may be your best option. 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. The week he would be home would be the first week of school for Sydney. 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. their parents began discussing a family summer vacation. Proposing multiple ways to reach your goal can get you to the same place. except when you’re negotiating. Dad. The reciprocal opportunity to review and select among options rather than accept one (“take it or leave it”) also gives your opponent a way to win. 15. Sydney. Option 1: No family vacation. finished his freshman year of high school at the beginning of June. Option 2: Mom and I go before Jerry leaves on August 1. completed his first year of college and came home for the summer around the middle of May. In mid-June. 90 50 Practical Negotiation Tactics . We have four options. it looks like we can’t really plan a vacation for all four of us. and quicker. Dad: Wait a minute.Tactic 22: Propose Multiple Options The shortest distance between two points is a straight line.

Then Jerry joins us until Thursday. and Sydney go to South Carolina before his school starts. Sydney: Don’t I start school that week? I don’t want to miss school. Sydney: Okay. if it’s okay with Jerry. Sydney: So what you’re suggesting is that the three of us are on vacation from Thursday to Sunday. And I miss orientation and start school the next day? Dad: That’s an option. Example 2 Joe is an attorney whose job responsibilities include managing three other attorneys (Andrea. Mom? Mom: Let’s do it. Conclusion The goal was to have a family vacation. Andrea considers Making Counteroffers (The “Give and Take”) 91 . Joe has no say in who was hired by the corporate legal office to work in his unit. me. one paralegal. we could return home on Thursday and still get a week’s vacation.Option 3: Mom. By proposing numerous options. If we started the vacation on a Thursday. when we come home. It’s not perfect. Option 4: Jerry doesn’t return home the week between his visit to the Northeast and returning to school. Mom: Well. Jerry: Okay with me. they were able to make that happen and not interfere with or argue about the merits of each other’s individual goals. Classes don’t start until Friday. you have a half-day orientation on Wednesday. Jerry: My friends and I have plans through Saturday of that week. and Carl). and one secretary in his litigation unit. but he can discharge employees for poor performance. so I won’t be able to meet up with you until Sunday. but it should work out all right. actually. Bob. we meet up with him that week for vacation.

To put it as bluntly as I can. which forced Joe to take action. Andrea: Wait Joe. Joe: That’s all well and good. rather than to put it off on someone else or for some time in the future. but it doesn’t solve the problem—nor is it the only problem. Andrea: We’re hired for our expertise. The attorney for the other side has agreed to give me the additional time to file it. Joe: Andrea. and resents any attempt by Joe to supervise her work. so Joe took a “hands off” approach. You had no authority to agree to settle the Stites case without clearing it with me. I really see your options as follows: You can leave the corporation. Before you start. Joe: Come on. you have a job-performance problem. Andrea: You didn’t list moving to another unit as an option. she made a two glaring errors in judgment. we have a very big problem. and I don’t see why we don’t have more independence. Andrea: Well. In the last month. Joe: That is certainly an option. isn’t it? But I don’t think just moving you really solves the problem. It is to the corporation’s benefit to address that problem here and now. however. If you don’t like the way I do my job. 92 50 Practical Negotiation Tactics . let me say that I’m handling the missed deadline on the pleading. or you can work out a “supervision” agreement with me so that I can better monitor your performance. 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. Her job performance was acceptable. you know that wasn’t an okay to settle. 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. you can agree to a demotion so that your areas of responsibility are lessened to that of a paralegal. We have a formal procedure that you just don’t like to follow. It was just a comment.herself to be a professional. Andrea.

lets talk to Bill about the move. I hope we can work it out. Conclusion Joe’s willingness to offer more than one solution gave Andrea a way to look at this unfortunate situation as an opportunity. then it would save face for me if it comes with a move to another unit. If that option is okay with you. I want to stay with the firm. and propose an acceptable alternative. Believe it or not. or I would advise your next supervisor to put you on a very formal approval program. but it would still require some change in the way you work: either a demotion. Andrea’s move and subsequent “approval” regime did. improve her work performance. rather than my staying here. If you are convinced that I have to undertake an “approval” program. in fact. the needs of the corporation have to come first.) Making Counteroffers (The “Give and Take”) 93 .Joe: That could be an option. Andrea: Well. my goal is the same is yours: to create an environment where you can perform to your full potential. It also changed her attitude about being both a professional and a team player in a corporate office. But in fairness to our mutual employer. Joe: That’s fine with me. by Leigh Thompson. (Adapted from The Mind and The Heart of the Negotiator.

000. thus making it necessary to find a middle ground on each.) Yes. Maureen: First. we both want the sod. then those which can be easily traded. one person’s gain is another’s loss—zero-sum. With distributive items. and finally. It is used only when each side has several demands. For example. three strategies are used. They each agreed to list the items they want and then to negotiate whether or not they will be purchased. Let’s agree to those things. and a home theatre. then the contractor has lost $500 in revenue. 3) distributive items (those items for which the two parties have exactly opposite interests. that’s $9.). Wow! We are off to a good start. 94 50 Practical Negotiation Tactics . They both agreed that this is the maximum they will spend on “extras” before moving in. only those with polar-opposite interests that must be divided. etc. Example 1 Brooks and Maureen Wilson have just finished building a new home. 2) exchange items (those that can be easily traded off—one item for another item of equal value. 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). the fencing. (She looks over the list. In essence. let’s see if there are any items we both want. This approach is an important tactic. These items often involve money). because it can speed up negotiations and produce a more desirable outcome. if a buyer negotiates a $500 reduction of a contractor’s bill. They have a fixed amount of money—$14.Tactic 23: The “Win-Win” Approach (Identify Issues as Compatible.500. Let’s see. 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. Exchange. or Distributive) The “win-win” approach to negotiations is a basic tradeoff strategy of seeking maximum gains for both sides. Brooks: Right.

Maureen: No.500 $500 $1. that makes sense. $750 for lighting and $750 in the bank.# 1 Sod Item Cost $1.000 $1.000! Brooks: Good. which I’d like to keep in the bank. Making Counteroffers (The “Give and Take”) 95 .000 $5. which takes another $3.000 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. and we both get things we want. I’ll trade your sidewalk and trees for my whirlpool bath.200 $200–$2.000 $2.500 $5. We have $1. Can we split it evenly? Brooks: Okay.500 $2. These are all permanent immediate needs.000 $3. I’d like to spend some of it on lighting upgrades.500 left.000 $500 $1.

Length of Contract 2. All items to be negotiated and their desired outcome for each item were put in writing for review. Item Management 3 years None 1% 10% of net For cause only Union 3 years 2% 5% 12% of net For cause only Win-Win Category Compatible Exchange Distributive Exchange Compatible 1. This year. management and union negotiators found that a “winwin” approach to negotiations worked well. Drug-Testing Program 96 50 Practical Negotiation Tactics . 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. Pension Increase 3. The combined lists total thirteen different items: Desired Outcome No. 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).Conclusion By taking the time to list all the items each person wanted and their cost estimates. both sides exchanged lists of initial demands at their first meeting. finally agreeing to split the difference on the remaining amount (distributive items). Profit-Sharing 5.

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. Health Insurance Employees pay 20% Continue cur. the management profit sharing plan (#4) was exchanged for the union overtime assignment plan (#7). and removed from the table. they accepted the union job security proposal (#12) in exchange for the management subcontracting proposal (#11). No Strike/No Lockout 10.Distributive rent program co-pay Exchange Exchange 7. Subcontracting 12. signed. Overtime Assignment 8. (#5) a new drug testing program. Clothing Allowance Based on senior.Voluntary ity 2 days Continue current provision 10% 10% No provision $50/month 3 days Continue cur. they began to trade off the exchange issues of similar value and nature. First. They proceeded to draft the language to settle these issues. eleven of the thirteen original issues to be negotiated had been agreed to. Paid Funeral Leave 9. one Making Counteroffers (The “Give and Take”) 97 . Next. the negotiators agreed that they had compatible positions on three items: (#1) length of contract. 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.Compatible rent provision 15% Exchange 15% No layoff provision $100/month Exchange Exchange Exchange In their second meeting. Shift Differential 11. and the union clothing allowance proposal (#13) for the management funeral leave proposal (#8). Next.6. Job Security 13. and (#9) to continue the often-discussed no strike/no lockout provision. At this point. Finally.

you can use the process to settle many of the other issues on the table. negotiations begin on a positive “win-win” note. Third. A middle ground often must be found on each of these distributive issues if you are to reach an agreement. when you exchange items so that each party achieves their desired outcome on one of the two. Sometimes the classic “split-the-difference” method is helpful in locating a middle ground. but a middle ground was eventually found on each and negotiations ended. Second. or distributive so that the negotiations can begin in an organized manner. if both parties start from reasonable positions. exchange.side’s gain is the other’s loss. Both sides first agree that all issues to be discussed will indeed be listed and openly discussed. They then identify each as compatible. but it can be very effective when a negotiation situation involves several issues. Conclusion This tactic is simple. The tactic offers several advantages: First. 98 50 Practical Negotiation Tactics . when you agree on the items where both parties have similar desired outcomes. 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. These two distributive issues—wages (#1) and health insurance (#6)—were the most challenging to settle.

so I can study. It is especially important that you do two things: take your time before rejecting any offer from the other side. do not offer a counterproposal right away. each side is expected to put an offer on the table. the location of the TV. So when’s a good time? Jasper: (without hesitation) No way. and on what would be considered acceptable “sharing” of each other’s junk food supplies. They agreed on which part of the room each would have. A counterproposal delivered too quickly tells the other side that you haven’t or won’t even seriously consider their offer. You can reject the offer and offer a counterproposal after it is obvious that you have taken the time to consider the merits of it. Waiting a respectful amount of time to counter. and from a strategic standpoint. so he wants a quiet room late at night. Rob stays busy all day and evening with other activities. and looks like you are belittling them. This isn’t high school. Let me finish. and studies late into the night. Jasper studies during the day and early evening and likes to stay up very late watching TV and visiting with friends. you know. Since they didn’t know each other well. even if you aren’t going to accept their offer. Mutual respect must be part of the negotiation process. last item: I’d like it quiet in the room at night. Jasper: Finish or not. I’m not interested in a curfew. Rob: Wait a minute. and refrigerator. they decided to establish “room rules” so that they would both be comfortable with the room assignment. stereo. and can help you reach your goal. Example 1 Jasper and Rob met when they were assigned to the same dorm room their freshman year in college. The final issue had to do with “lights out” and quiet times for studying. will make your opponent feel good about the process.Tactic 24: Wait to Counter As the negotiations begin. Rob: Making Counteroffers (The “Give and Take”) 99 . Here is how the last issue was handled: Okay.

Jasper: (without taking a breath) At best. I want a 10:30 p. Example 2 ABC Company’s management was being restructured and compressed in order to facilitate its new “just-in-time” manufacturing philosophy. and the union foreman would report directly to the plant manager. Rob: I’m going to look for a new roommate!! Jasper: Fine!! Conclusion It was clear that neither Rob nor Jasper was seriously considering the requests and suggestions of the other person. The appeals procedure would have to be altered to reflect the restructuring. 10:30 p. b) written complaint to a floor manager if the matter is not resolved in 5 days. Rob: (there is no hesitation in this voice) No. The union contract required that management renegotiate this change in the grievance procedure with the union. midnight during the week is the only thing I’ll consider.) Listen. Neither side anticipates that there would be 100 50 Practical Negotiation Tactics . Jasper: Midnight. employee grievances had to go through four levels of supervisory review and appeal: a) verbal complaint to the non-union crew leader. Failure of both young men to allow one another to have their proposal considered caused the relationship to break down. Under ABC ‘s contract with the union. the positions of non-union crew leader and floor manager would both be eliminated.m. but changed his mind when he saw Jasper’s attitude. c) a formal “meeting” with plant manager if the matter is not resolved in 10 days. No agreement was reached. Under the restructuring. and that’s it.Rob: (Rob was about to suggest midnight on Mondays through Thursdays.m. and d) a hearing with company owner if the matter is not resolved in 20 days. is all I’ll consider. and that’s not negotiable. curfew on TV and other noise every night.

but to dictate. Company: (no hesitating) Trust me. Company: (rather abruptly) Let’s not drag this out. We just cut out two steps. The redraft is simple and straightforward. In fact. (Note: An attitude change sets in. Certainly. no one can complain about that. We’ve simply eliminated the first two steps. 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. he/she can take the grievance to the plant owner for a hearing. because those management layers are gone. We’ve got a couple of alternative models for you to consider. If the union foreman felt that the grievance had merit. The union was prepared to accept the plant manager’s position as final. the union arrived at the meeting prepared to support a streamlined process that called for the employee with a grievance to discuss it first with the union foreman. our grievances often signal to management that there are real problems on the shop floor. Union: You obviously didn’t come here to negotiate. rather than as a judge on the merits of the grievance.any objection to the change. rather than go on to appeal it to the company owner. We think that this is an opportunity to eliminate some of the adversarial aspects of the grievance procedure. If in 20 days he/she has not been satisfied. and everything else stays the same. and I’m certain your members will be okay with it. Company: Here’s the new draft of the grievance procedure. Union: Hold on. After initial pleasantries were exchanged. Union: As you know. We’d like you to consider the plant manager’s role as a problem-solver. ABC Company’s negotiator explained the management changes soon to be implemented. the employee and the foreman would meet with the plant manager and attempt to resolve it. this redraft is a very simple change to the contract. and began the negotiation session concerning the grievance procedure. An aggrieved employee can make a request for a meeting with the plant manager.) We’re just not happy that you are proposing a Making Counteroffers (The “Give and Take”) 101 .

You can’t be serious. and we’ll strike if we have to. 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. rather than in the 35 days the current system provides. Union: We’re very serious. This time. and actually accepted a three-step procedure. the company entertained the ideas the union had tried to propose before. the two parties did meet again. After a cooling off period.two-step grievance procedure instead of a four-step procedure. We’ll see you on the picket line. to prevent any change! Company: (surprised) What? Why would you object to this? Your guys will get a final decision in 20 days. 102 50 Practical Negotiation Tactics .

If you are flexible. Example 1 Sue and Bill have been married four years. But after the negotiation gets started. Bill. Nancy: Sue. They flipped a coin to see who “got” them and the new baby this year. Sue’s sister Nancy called her to talk her into coming anyway. Sue: Yes. Bill’s family won. and now have a new baby girl. and we’re really not able to enjoy either one. Making Counteroffers (The “Give and Take”) 103 . successful negotiators remain flexible because new solutions to old problems often surface during a negotiation. you can adjust your demands or goals to include such new ideas. Sue’s family (parents.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. and at least five aunts and uncles) ate around 7:00 p. Next year. Arriving late at Bill’s family gathering caused him to miss the “traditional” pre-dinner pro-football game on TV (which he had grown up believing was the real reason for thanks at Thanksgiving). The couple used to have Thanksgiving dinner at both families’ homes. and Sue called her mother to let her know that they would not be coming for Thanksgiving dinner this year. Be open minded. we’ll get to our side. Sue and Bill decided that they had to begin alternating their Thanksgiving Day visits between the two families. it’s just too much to do both. established goals. two sisters. four brothers. and the baby aren’t coming for Thanksgiving dinner this year—that you’re going to Bill’s parents’ house. and ten nieces and nephews) always ate around 5:00 p. two brothers. They’ve done the research.m. Mom says you.m. Bill’s family (parents. one sister. and identified the range of options they feel comfortable with negotiating. 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). their spouses. Even before the baby’s arrival.

some people have to work on the Friday after Thanksgiving. I thought of asking Mom if she could move dinner up to noon or so. but then I realized that the rest of you already go to your in-laws earlier in the day. When that goal looked out of reach. but she won’t tell you. Nancy: What if we did Thanksgiving on Friday? Sue: What? Nobody does Thanksgiving on Friday—that’s un-American! Anyway. Sue: Next year.Nancy: It just won’t be right without you guys. By being flexible. it’s okay with me if you can sell it to everyone else. Conclusion Nancy’s goal when she called Sue was to talk her into coming to their Mom’s Thanksgiving Dinner on Thursday. So that doesn’t work. There’s nothing “special” about Friday. and it became the family’s new tradition. Nancy: If we keep the time at 5:00 p. Thanksgiving is Thursday. Celebrating the next day seems odd. Mom’s very upset. I mean. the holiday will be over. Everyone in Sue’s family liked the idea of celebrating on the Friday after Thanksgiving. she suggested a unique alternative. 104 50 Practical Negotiation Tactics . I know that I would rather not do two Thanksgiving dinners on Thursday. either. Isn’t that what Thanksgiving is about—taking a day to give thanks for our blessings with the people we love? We’ll just arrange it so we do it two days in a row! Sue: Well. I bet everyone could make it on Friday. we’ll come to Mom’s. Nancy: I’ll let you know. Nancy: We’d make it special by all of us being together.. 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.m. Bill won the coin toss for this year.

Kids’ Home: As you know. Foundation officals: Oh. the interest income of around $6. had been negotiating with a foundation to become its major benefactor for a new building and to supplement the organization’s annual operating budget. Kids’ Home is also hoping to get the city to encourage the foundation to commit to full funding of the building project.000 a year for operations. We’re hoping to get a commitment from them to build and help fund the operations of a new facility. Unfortunately (for Kids’ Home). but we can’t fund all of the $12 or $15 million. We only have maybe $2 million a year to put toward this charity. We need the city’s help by allowing us to get the city land donated to us (for free). City: Can’t you borrow the money from a bank to build the facility. Each year. but the principal of the fund can’t be touched.5 million is available for distribution to numerous charities. we’re committed in theory. a non-profit organization for orphaned children. Estimates for building a new orphan home ranged from $12–$15 million. City officals: We can probably give you the land for free. depending on the cost of the land. Kids’ Home: That’s why we brought the foundation’s officials with us. the foundation’s regular annual grants come to roughly half of their available funds. They are meeting with the city to ask that the land be donated by the city for the project. but we need some assurance that you will be able to build and operate the orphan home at that location. Kids’ Home hoped to get $500. we hope to break ground early next year for the new orphan home. The foundation has a substantial endowment fund.Example 2 Kids’ Home. Kids’ Home and the foundation have decided that a parcel of city-owned land would be ideal as a site for the new building. 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 .

Kids’ Home: Borrowing the money gets very expensive. We’ve never committed our funds to pay back a bank loan. Why not ask the state to issue no-interest bonds? It can do that for non-profit organizations. and really taxes our ability to raise funds. We’re a nonprofit group. We probably would not be able to participate. We wouldn’t want to make such a commitment to a bank. 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. I’ll contact the state tomorrow. If we borrowed $15 million at 10% interest. but we’re willing to look at it. 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. And “donations” aren’t a very safe collateral for any bank that wants to loan us money. We’re not familiar with that program. Foundation: City: Foundation: Kids’ Home: Conclusion By exploring alternative financing plans suggested by the city. it could end up costing double that amount. 106 50 Practical Negotiation Tactics .

The Jones’ two older children—girls in their early 20’s—often had friends over on Friday and Saturday nights.Tactic 26: Keep Few Secrets One of the most difficult skills to master in a negotiation is how to be candid. The Jones family suspected that the Smiths called the police. The Jones’ two younger children—boys in their mid-teens—hit baseballs into the Smiths’ yard and scared the Smiths’ dog. Smith: We don’t know what you’re talking about. and often lasted until 2:00 or 3:00 a. They asked to meet with the Smiths to talk about these disagreements. Successful negotiations depend on trust. Example 1 Soon after the Jones family moved in next door to the Smiths. But the Jones clan had four cars altogether. It is perfectly acceptable to say that you are not ready to reveal certain things. each side has to know generally what each other wants to accomplish. and often took up all the space along the street in front of the two houses. Jones: We’ve obviously gotten off on the wrong foot. In order for a negotiation to be successful. and we would very much like to talk about how we can resolve these issues. and asked the officers to cite the Jones kids for parking too close to a corner. Making Counteroffers (The “Give and Take”) 107 . the Smiths could count on parking their car directly in front of their house. However. Before the Jones family moved into the neighborhood. you might not want to reveal all of your priorities at first. The Smiths called the police to complain about a late-night party. Mr. yet not reveal all of your goals and objectives. At the same time.m. and trust can only be established if all parties interact truthfully. These parties could get rather loud. the neighbors began to have problems. you should be careful not to misrepresent your position to such an extent that your opponent will feel that you have lied. and you probably won’t identify your throwaway items or tell your opponent your bottom-line. The Jones family let their tree branches hang over the Smiths’ back fence and rub against the Smiths’ garage roof. it is not acceptable to lie. Mr.

they kept it. Jones: I wish you had mentioned that the last time we talked. So. (A week later. 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. I’ll talk to the boys and we’ll make sure they play baseball in the park. And we’ll make sure none of our cars are parked in front of your house. if they are outside. and not in the back yard. Mr. we’re good now? Mr. Jones: We’ve already talked to the girls about the parties. Smith: Well. the late-night parties are a problem. Also. If you can tell us all the things that we have done or are doing that have caused you to be inconvenienced. Mr. we’d like to be able to park our car in front of our house. that wasn’t us. we thought you might have called the police about our kids’ party and our cars. they’re hitting baseballs into our yard. In spite of the Smiths’ assurances. Jones came to see what the problem was. a lot of problems. Almost every day. Smith: No. then they’ll need to come in at midnight so that their talking doesn’t disturb you. Is that everything now? Mr. since you’ve asked. Jones: Okay. Mr. I guess. And the music is to be off at midnight. fine. Jones: Well. yes. Smith: You know that your boys are causing our dog. we would like to work out some solution. but we do know that someone has complained. Mr. the next time the boys were out playing and the ball came into the Smiths’ yard.Mr.) 108 50 Practical Negotiation Tactics . It is really very disturbing. Smith: Yes. Muffin. Mr. and they won’t be having friends over more than one night a weekend from now on. and was met with the following: Mr. we have a problem walking long distances in bad weather. At our age. Smith: Well. In good weather.

Why didn’t you tell us? We can’t read what’s on your mind! Mr. have labor unions. Union officials are afraid that a Japanese company might purchase it. Example 2 Neno Enterprises is a shipping company with extensive global operations. because they didn’t like a grievance decision. although none of the facilities outside the U. the tree was clearly over the fence. Its local headquarters has a union to handle its international shipping. Making Counteroffers (The “Give and Take”) 109 .S. Unless Neno can get the Union members back to work on Monday. The union knows that the company is up for sale. We would have fixed the tree if you had asked. irate) I can’t believe you people called an inspector on us. Mr.S.Mr. or the deal is off. Jones: Sure. Neno has been negotiating the sale of its business to a British company. Jones: (at the Smiths’ door. You could have seen that yourself. or European companies do. you’ve said that before. The union laborers walked off the job on Friday. The British insist that a very strict confidentiality provision be part of the negotiating process. Smith: Well. But we didn’t call the inspector. Japanese companies often do not “recognize” labor unions the same way U. but Neno cannot tell the union this. the British firm will walk away from the deal. and the deal is close to being final. You obviously don’t want to be “good neighbors. and too bad for you! Conclusion The disagreements and unpleasantness continued until the Smiths finally sold their house and moved into a condominium.” Forget all we’ve agreed to do—we’ll just enjoy the use of our property. 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.

maybe by next Friday or the week after that we’ll have our guys back to work. Have the guys back on Monday. And one company that is interested has a really good track record on expanding the businesses they buy. no harm-no foul. the slowdown as a result of no one working Saturday and Sunday won’t be noticeable. any interruption in our shipping could affect how these buyers look at our business. I’m certain that if we can sit down and talk next week. Neno: Look. I need your guys to come back to work on Monday. 110 50 Practical Negotiation Tactics . Neno: Look. If they do come back. Anyone who buys the company will have to honor the contract we have.Neno: You know this is a wildcat strike and that it is in violation of our contract. You really don’t want to do that. We’ve not had a labor shutdown in 20 years. this is a legal strike under the contract. and if the guys are back on Monday. Union: What aren’t you telling me? A labor shutdown. If everyone is back on Monday. do you? Union: No. Union: We think that the grievance decision affects our wages. I promise you. we will resolve it to your satisfaction by the end of the day. It’s not the time to have one. But I have to have everyone back on Monday. we don’t. We’ll meet with all of the parties on the grievance first thing Monday. I think it already has. I’ll forget all about the strike. whether it’s for one weekend or a week. then there’s probably no harm done. is still a labor shutdown. I can’t really be more explicit than that at this time. But if your guys are out past Sunday. You don’t want to mess up our negotiations. Neno: All I’m saying is that there is a difference. I know it’s not news to you that this business is up for sale. so the union won’t be hurt by the buyout. If that’s going to have a bad effect on your being able to sell the business. Our guys are prepared to stay out a lot longer than Monday. We can’t put up with the kind of decision we got on our grievance. Therefore. it will impact our marketability. But we also need to make it clear that we expect you and whoever might buy your company to take our contract seriously.

as well. but the British firm will allow them to organize at their foreign locations. Conclusion On Monday.Union: It’s that important to you? Neno: Yes. the sale was finalized. He told him that it would mean that the union would not only keep its jobs here. Neno’s decision to respect his confidentiality agreement and simply tell the union that he couldn’t disclose all the information. rather than make up reasons. But I need to tell my guys that this is important to them as well. Because the parties had dealt honestly with each other in the past. and it’s that important to you as well. the union was willing to trust Neno—even though he couldn’t tell them everything. Can you assure me of that? Neno: Yes. we’ll be back to work on Monday. Making Counteroffers (The “Give and Take”) 111 . I would be more specific. I’m going to go along with you because you’ve always dealt straight with me. If I could. Union: Okay. while the grievance was being resolved. was the right decision to make. But I can’t. Neno called the union negotiator in and briefed him on the sale. I can. Union: Okay.

Tactic 27: Expand the Pie
In some negotiation situations, agreement can be reached by increasing the total pool of resources available to all the parties involved. While this is not practical in every situation, a relatively minor increase in the resources available might allow both parties to reach a solution. Resources should be as broadly defined as possible—money, people, time, etc.—when considering how a “fixed pie” might be expanded.

Example 1
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.

Conclusion
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.

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Example 2
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.

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Conclusion
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.

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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.

Example 1
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-

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but no TV or anything until it’s done! (pause) Okay. and clean it. Clean it after your game. Roberto: But I need to start the direct mail and newspaper ads within two weeks. At least this way the program will have a chance to succeed! 116 50 Practical Negotiation Tactics .000). Example 2 Roberto: I can’t properly advertise this new program with a $5. Take it or leave it. B. I have three hours.Amber: row before your basketball game. But when her mother laid out the schedule and gave her alternatives. I can accept B. or C. I’ll approve $15. Roberto: Well. keeping her Saturday free.000 for advertising. (long pause) Felipe: Let me give you three options: A. I’ll approve $15.000. Roberto: But it will never generate enough interest if no one knows about it. or we lose a whole year. I’ll do it now. I’m not going back to him again to discuss this program. Felipe: (Roberto’s supervisor) Sorry. Felipe: Well. Conclusion At first.000 in the budget. I’ll find a way to do without one part-time person. Three. that is enough time. I can’t help. Use the $5. but I will cut your travel budget out completely. but I will cut your staff by one part-time person (or $15.000 for advertising. Felipe: Sorry. she chose the one she most preferred.000 budget! I need at least $20. but the company president does not share your optimism on this program. Amber resisted the chore she hated.

Roberto believed. which was his goal. thus achieving his goal of not having to ask for a larger budget. Making Counteroffers (The “Give and Take”) 117 .” He offered Roberto three alternatives of equal cost. One alternative. would enable him to adequately promote the program.Conclusion Felipe was willing to think “outside the box.

Tactic 29: Prolonged Silence When negotiations have hit a critical stage. 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 118 50 Practical Negotiation Tactics . I very much appreciated the fair job performance review you gave me. 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. but one side comes back with a non-negotiable demand. the promotion had not yet been approved. and the annual merit raise she was getting from the company was the same 3% other employees were receiving. You know my commitment to this company. Example 1 Susan. Unfortunately. Jones. received a glowing report from her boss on her job performance. Susan: Mr. 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. Here’s how the negotiations went. you are a valued employee. This should have resulted in an automatic promotion and a sizable pay increase. nearing her third year with the company. It was 16% less than she had been led to believe she would be getting. Susan knew that she was considered a valued employee and that her boss would want to do the best he could for her. After a few minutes of silence. I am very disappointed in the company’s decision not to promote me and to limit my merit increase to 3%. Jones: I certainly do. he can make an open-ended statement. 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 think you would agree with me that I have performed well above expectations this past year. The negotiator for the other side says nothing. inviting a response. I have to tell you that while I appreciate what you have done for me. Susan: I hope so.

maybe we can talk about the promotion later in the year. If there is some flexibility in your request. I could probably find a way to phase it in over a two. Making Counteroffers (The “Give and Take”) 119 . Okay? (says nothing) Let me check it out and I’ll get back to you. but a pay increase of that size might be more difficult. but I don’t think management will be willing to give you an additional 10% pay raise AND a promotion. and I think that I really haven’t been dealt with fairly. the company’s refusal to grant them now was a harder position to support. and sell it to management that way. (says nothing) Or.Jones: Susan: Jones: Susan: Jones: Susan: Jones: Susan: Jones: that I deserve more consideration. Jones went to management and convinced them that they should give Susan the promotion and the 13% raise. Well. (says nothing) If I can’t get that pay increase approved right now. Conclusion Mr. of course I will be glad to do that. I would very much appreciate it if you could ask the company to reconsider. Promotions of this type are all but automatic around here. Jones to continue to offer solutions. if management can see their way to giving you the pay increase now. and I’m sure management will agree. I really want you to stay with the company.or three-year period. Susan’s silence prompted Mr. it could help. I must ask you to try to get both. I suppose I could get the promotion approved with the proper presentation. Once he acknowledged that both items might be awarded sometime in the future. because I feel my future with the company might be at stake here.

I don’t think it’s a problem. The office she was thinking about was the office held by her counterpart in the neighboring community (Mr. her plans really don’t have any bearing on these negotiations. but now they’ve got to ask what Madame Mayor’s motivations are. The mayor’s negotiating representative wanted to complete the negotiations on the expanded agreement. The parties agreed to continue the previous terms of the agreement. 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. Town Council Representative: I think you’re wrong. and were trying to settle on new and expanded areas when one of the elected officials (Ms. My bosses might not have been inclined to expand the agreement anyway. This is how the negotiations went: Town Council Representative: Well. the people Madame Mayor currently 120 50 Practical Negotiation Tactics . but the officials had hoped to complete the negotiations prior to anyone involved announcing for office. The term of the original agreement was nearing its end. and representatives of the elected officials of the two towns were meeting to renew and possibly expand the agreement. Town Council Chair). Also. Mayor) said that she was considering running for office. He decided to push for a simple renewal of the original terms. by saying that she might run for Chair.Example 2 Two local governments entered into a tax-sharing arrangement in order to provide joint services to citizens in a more efficient manner. The mayor. She has not decided what she’s running for. and until she does. 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. Mayor’s representative: No. Mr. The end of the agreement coincided with the election cycle for the two towns. has colored these negotiations.

Making Counteroffers (The “Give and Take”) 121 . Town Council Representative: (silence) Mayor’s representative: I would think that at least the proposals that don’t involve budget changes could be pursued. Conclusion By remaining silent. Mayor’s representative: Well. Town Council Representative: (silence) Mayor’s representative: I think it would look very bad for both of us if we spent all of this time negotiating and we don’t end up with anything new. the Town Council’s representative left the mayor’s representative with no room to maneuver. I hate not to attempt to add some additional areas to the agreement. I don’t know what her reaction will be. He either had to end the session or figure out what to say to reengage the other side. Town Council Representative: (long silence) Mayor’s representative: (after an uncomfortably long silence) Well. In the end. I’ll go back and tell Madame Mayor your position. I think we really have to drop back and just propose a renewal of the tax sharing agreement without adding any new items. and the agreement was renewed with no new provisions. the Town Council representative’s position prevailed.represents have to worry that her desire to switch governments might taint the negotiations.

which an upstream neighbor had built. and began to renovate it as a home and a pottery shop. The property came with three acres of forest alongside a meandering brook. Obviously. The reason I built it was so that I could protect my patio.” Avoid making that “necessary concession” too narrow: It should be large enough for both of you to step into comfortably. Madeline. after the gazebo had been there for about five months. or we will be at an impasse. 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. “I have to have this. Madeline built a gazebo about 500 yards from the brook. Neighbor: Well. in a small clearing. 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. you should always enter the talks with a good idea of what you are willing to agree to. She went to discuss this problem with the upstream neighbor and had every intention of demanding that the barrier be removed immediately. Joe. She traced the brook back along its course to see why and where it had changed its path. She discovered that a rock barrier. Madeline: Hi. One day. You will have to remove the rock barrier. when one of you might say. the brook was the property line separating her property from a neighboring farm. had redirected the brook further into her property. Example 1 Madeline bought an old farmhouse outside of a small town. It calls for compromise.Tactic 30: Always Leave Room for Dessert Negotiating is the art of give-and-take. Having an iron-clad demand probably won’t give you enough room to reach an agreement. The brook 122 50 Practical Negotiation Tactics . Your rock barrier has sent the brook onto my property and it is too close to my gazebo. she noticed that the brook came within 100 yards of it. the brook and rock barrier are on my property. As was sometimes the case in these parts. I have a problem.

By expanding the range of options available to resolve the dispute. Conclusion Madeline’s objective when she met with her neighbor was simple: Have the rock barrier removed. My neighbor on the adjacent farm wants to sell part of his property for a housing development. and allow the neighbor to protect his home. but only if I have a clear understanding with you that the barrier will be rebuilt to protect my house. Neighbor: I’m sorry. I understand that. It might not be necessary to make such a dramatic change. if the brook is redirected. I couldn’t have that. I won’t remove the rock barrier. Madeline: Well. 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. at least I’ve maintained my property line. restore her property line.extended right up to my back door when the rain was heavy. Madeline was able to protect her gazebo. and return everything as it was. I can’t have the brook in my house. 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. When she found out that this was not going to solve her neighbor’s problem. Making Counteroffers (The “Give and Take”) 123 . but you’ve changed the boundary line of my property. Madeline: Yes. she widened her range of options. you have not only threatened my gazebo. Neighbor: I can do both of these things. She left room for a compromise. Also. what I need is to protect my property line and my gazebo. What if you removed the barrier for a short time. Madeline: But by diverting the brook. This will put these houses right next to me. I’ve lost 400 yards of property on my three acres. but I don’t know what I can do about it. which enabled her to achieve her goals.

000 to cover the premiums for dependent coverage. and we know that with this new contract term of five years.000. that would be the minimum increase.000. the airline paid a total of $200.000.000.000. with all wage and operations issues resolved fairly early. Over the last five years.000. as it has always been. Pilots: So you are projecting that the increase in dependent coverage premiums will average $200. Pilots: Look. and the premiums for health care just keep going up. Everyone was afraid that the dispute would cause an impasse and a possible strike. and are willing to keep pension benefits the same. you are taking a risk on the costs increasing. The projections for the next five years were that these costs would increase to about $1. the company can make your pensions much better.000 (which we reasonably should have expected to pay in premiums) in the pension account now. However. The pilots want dependent coverage paid for by the company. dependent coverage could cost us $1.000 figure. This is just a cash-flow problem that your members have to understand. what they really need is for you to cover the costs of dependent coverage. the discussions of the employee benefits package bogged down on the issue of health insurance costs and pension benefits. Over the next five years. If we invest the $200. And we cannot afford that $1. With long-term planning and investments. The airline industry is in a slump.000 a year over the next five years? Company: Yes. Company: This could not come at a worst time for us. then the pension benefits overall will increase by $10. As best as we can tell. we know that health insurance premiums might skyrocket.000. But only a few of our people are close to retirement age. The company wants to trade paying for dependent coverage for better pension benefits. 124 50 Practical Negotiation Tactics . This would be a better benefit in the long run.Example 2 The contract negotiations between the pilots and the airline had been going pretty well.

Are you willing to risk not having an opportunity to increase pension benefits? Pilots: Yes. we are. can we agree to a year-to-year agreement on dependent coverage. or invest in the pension plan? Company: Yes. The dependent coverage is more important to us now than the pension benefits. so the decision to be flexible was a good one.000? Once the cap is met. It initially believed that the only option was to put that money into pension benefits.000. Making Counteroffers (The “Give and Take”) 125 .Pilots: But you do have the $200. and the pilots knew what to ask for when the contract expired. with a cap of $200. Conclusion The company was committed to limiting its exposure to $200. that would be worth it. If we can get two or even three years out of the $200.000 the first year on the premiums.000 available.000 actually carried them through four years. by agreeing to let the company cap its exposure for dependent health coverage. Company: If the company spends the $200. Pilots: Since the concern is about agreeing to a 5-year commitment without knowing the increases we might have in health insurance costs. The health insurance market stabilized. The $200. however. The pilots expanded the range of options. Company: Then it’s okay with us. then those funds will not be available to invest in the pension plan. the company will not be expected to give us this benefit. if they were that high.000 to either pay one year of the premiums.

$45.… (20 minutes later) Saleswoman: So.” Salesmen use this standard tactic with “big ticket” items: They present the total cost in small enough pieces to sound reasonable to the other party.000 car. Saleswoman: I’ll be right back. I guess it would be around $600 per month. but the Consumer Price Index has not gone up 150%—nor has my paycheck! Saleswoman: So. I just can’t imagine the monthly payment on a $45. it’s a deal? 126 50 Practical Negotiation Tactics . Buyer: Yes.Tactic 31: Cut Salami Slices One way to overcome anticipated or exhibited resistance to a proposed cost is to cut it into smaller units or “slices of salami. do you want to look at something else? Buyer: No. If you are on the receiving end of such a tactic. be sure to add up the total cost. if I can give you this car with a $300 monthly payment. and compare it to your strategic objective. Example 1 Car buyer: What. I recall the day you drove it out of here. what monthly payment did you have in mind? Buyer: More like $300 per month. I love this car. Phrases such as “for only pennies a day.500! Saleswoman: Yes. Buyer: Way too much! Saleswoman: Well.000 for a Volvo? I bought the one I’m driving for $19. but that was several years ago.” and “low monthly rates” are examples of the salami tactic.” “affordable weekly payments. Saleswoman: With your 740 in trade.

00 per month.000 down and $300 a month! Conclusion The saleswoman knew the buyer was suffering from “sticker shock. Example 2 Cable representative: Owner: Cable representative: Owner: Cable representative: Owner: Cable representative: Owner: Cable representative: Owner: Yes. do you want Disney? Yes. and added the trade-in. as promised. it will be a five-year lease.00 per month. can’t you? Buyer: Yes.” she had him—she worked around the $300 slices. But my neighbor pays $39. Instead of a three-year lease.00 per month for your service. you can get the Disney channel for only $5.000 price into “slices” the buyer thought reasonable.Buyer: I don’t see how you can do that. Great! So. down payment. You can do that. do you want HBO? How much? $5. I can’t afford that much. Saleswoman: Simple. but what else must I buy? Only the basic service for $8. but let me see the numbers.” She decided to cut the $45. with your car and $6. Sure. Let’s see.99 per month. Once the buyer volunteered that $300 was an affordable “slice.000 down. I can’t discuss another client’s account. Making Counteroffers (The “Give and Take”) 127 . (looks at the numbers) That looks good. and payout slices to reach the total price she wanted. I can afford $6.

128 50 Practical Negotiation Tactics . Disney is for the kids! The sports channels are for me.00.00 per month was far too much. That’s $5. instead of one total amount. and my wife wants the old movies. Thanks. Yeah. 3.00 per month.00! Why? Because he judged the per-slice price to be reasonable. and SI 1. But that’s all! Then we’ll hook you up on Monday. Great.00 a month. Okay. they asked about the Cartoon Network. I really want the sports channels. That’s another $5.99 per month. 2. The total is $38. 2? How much? $8. What about the music package? Yes. and probably felt much better about the total negotiated package because it was presented in modest individual slices. but he agreed to six “salami slices” for a total of $38. Conclusion The owner thought his neighbor’s service at $39.Cable representative: Owner: Cable representative: Owner: Cable representative: Owner: Cable representative: Owner: Cable representative: Owner: Cable representative: Owner: The Sports Combo–ESPN 1. Any other kids’ channels? Yes. we had that before.

Humor might not look like pressure. In some cases. It should be used with caution: It can end negotiations immediately. which can be successful if the opposing team has two or more members who hold different views of an issue. it is effective. and it can destroy your credibility. Tactic #36 (The Element of Surprise) can catch an opponent off-guard and cause stalled negotiations to move forward. the traditional car salesperson might tell the buyer. an unexpected element of humor can break the tension and encourage a person to calmly get back to the issues. however. 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). “I can only guarantee this price until 6:00 p. For example. angry negotiations. turned off by the tactic. but in tense. today. When both sides believe that each has equally strong positions. Tactic #35 (Applying Excessive Pressure) is a similar tactic that should also be used with caution. but it can be used effectively when one party clearly has an edge. so are you ready to make a deal? This might convince a few buyers. Applying Pressure 129 . Tactic #33 (The Bluff) is a classic pressure tactic. 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. Other less-obvious pressure tactics include Tactic #37 (Divide and Conquer). and the use of humor. pressure tactics should probably be avoided. but others will walk out the door.Stage 5: Applying Pressure P ressure tactics are generally used in situations where one side firmly believes that it holds the upper hand or simply convinces the other side that it does.m.

getting a divorce and each moving away (and would have no more use for the sailboat). he and Chloe wanted to buy out Don’s and Abby’s interest. 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.Tactic 32: Don’t Exaggerate It’s always acceptable in negotiations to put your best case forward and present your position vigorously. In the last couple of years. And we don’t want to be unfair. It 130 50 Practical Negotiation Tactics . Chloe and I would like to take the sailboat with us. I can’t tell you how many times Abby has said how happy she is that we have the sailboat. We’d hate to give it up. but it is not a good idea to exaggerate what you are offering or what you are giving up. but Don. Lacey. Lacey: I know. Example 1 Don and Abby went in on the purchase of a sailboat with their friends Lacey and Chloe. Don: Wow. and we need to talk to you about how we can buy you guys out. Don: Absolutely. The two couples used the sailboat a lot the first couple of years. Although I do think there ought to be some consideration for the two years you had use of the boat. together and separately. Such exaggerations are easily revealed or uncovered. in fact. Lacey and Chloe didn’t know that Don and Abby were. big news! I’ve been promoted. and we’ll be moving south in the next month or so. Lacey: Don. I don’t know. boat prices have really gone up. Don and Abby now use it less and less. 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. and they will weaken your credibility. I think Chloe and I would be willing to pay more than just the money you guys put into it. Abby really loves that boat.

and neither of us put much in for upkeep. (Around the same time. and we’re moving farther south. After all. I think it would be fair to pay you and Abby half of what you originally put into the boat for your 50% share. Let me talk to her. the boat has depreciated. Don and I are getting a divorce. Don: Lacey. I was afraid something was going on when you all-butstopped joining us on the boat. he likely would have found himself in a stronger negotiating position. Applying Pressure 131 . though it’s not so happy. but separately. We’ll be leaving here for the Midwest. I’m surprised by your attitude. Don. 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. and I’ll get back to you. It’s about time now for some major investment.) Lacey: Don. It just reminds me of how happy Don and I used to be. Abby: That boat. I thought you understood how important this boat is to Abby. I’ve been thinking. Lacey: Cut it out. I have big news too. If Don had not exaggerated the importance of the boat and dealt with Lacey honestly. I’m sorry. Abby told Chloe about the divorce and about how she never wants to see the boat again.is just about the most important thing we own. (After Lacey and Chloe had a chance to talk. Chloe: Oh. which you would have to share if you want to retain half-ownership. I’ll be glad never to see it again. big news!! Don got his promotion. Lacey and Don’s negotiations changed considerably. Abby: Well. Abby is having this conversation with Chloe) Chloe: Abby.

I’m afraid that with this current information. I’ll have to show them 132 50 Practical Negotiation Tactics . in fact. our production line changes at least three times a year. Company president: Well. but this has been such a crazy situation. And as you know. we will need to make drastic cuts in our operating costs just to survive. When I go to the bank for the Letter of Credit to keep our cash flow uniform while we switch from one type of production line to the other. in this global market.Example 2 Aimes Manufacturing had experienced major ups and downs in the price of its stock for the last two years. Telling me there’ll be no wage increase and asking for wage concessions now is a little premature. The current stock price is the lowest it has ever been. And while these fluctuations have little to do with the health of the company itself. the situation in the stock market is not good. I’m telling you the stock price is having a huge impact on us already. I’ll be going back to them as soon as next week. and that the economy is strong. I think you’ll have to agree with me that wage increases in this next contract will not be available. the company president decided to use the stock price as a negotiating tool during the current union contract talks. Here’s how these negotiations went: Company president: Well. I’ll be looking to you to make some major wage concessions on this upcoming contract. I read in the papers every day that the market is still strong. I can’t see how today’s numbers really impact the long-term profitability of this company. Union negotiator: The stock price might be down right now. they will make their decision based on a review of the stock price that day.

Company president: All right. here’s what happened. The union became hardened in its position that the employees needed wage increases in the new contract. Union negotiator: Well. the company’s position was weakened even more. Company president: What? I thought you understood that it is essential that we get concessions on this if we want to stay afloat. Let’s get back together next week. and the union ended up with a substantial increase in their contract. and I’ll have our people look at it. let’s talk about it. They told union officials that it would be very rare for a bank to make its decision solely on stock price. but your proposal to cut wages is just not going to fly. So. but I checked it out and it’s not totally true. Union negotiator: I know that’s what you told me.that we’ve cut expenses to counter the losses in the stock market. they would do a thorough analysis and look at the health of the company over the long haul.) Union negotiator: I’m sorry. If you put it that way. okay. Applying Pressure 133 . he lost the trust of the union. If the stock goes up next week. We think this company is very healthy and can withstand the temporary downturn. this week’s price would have little or no effect on your ability to get a Letter of Credit from the bank. (In the interim. Conclusion Because the company’s president over-emphasized the impact of the market on the company. we’d like to reopen talks on next year’s pay increase. Give me your proposal for wage concessions. When negotiations resumed. the union checked into the Letter of Credit transaction with some experts in banking. no concessions! In fact. When the market took a swing up during the negotiations.

and she didn’t think Tom had. but you always run the risk of having the opposing party call your bluff and end the negotiations without reaching agreement. 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. Christy thought that their relationship was exclusive: She hadn’t gone out with anyone else. If one party threatens to walk out of the negotiations if a demand isn’t agreed to. yeah. Christy realized that asking for a commitment from Tom at this stage would be a very serious discussion. Tom: Oh.Tactic 33: Bluff! Bluff with caution. and they really have no intentions of doing so. Poker players know all-too-well-that bluffing can be very costly. but I really am. so their “free” time was very limited. This can come back to haunt you. Example 1 Christy and Tom had been dating for about a year. There is a chance that the tactic will work and that both sides will agree to the proposal on the table. If you subsequently agree to begin talks again. it might backfire. I guess I’m just surprised. 134 50 Practical Negotiation Tactics . either. Charlene. but Christy thought the relationship was heading in that direction. You’re not upset about that. Both of them were still in graduate school and worked full-time. The couple had not discussed marriage. you will have lost credibility with your opponent. I really hate it that you chose to see the movie with Charlene. Here’s how the discussion went: Christy: Tom. are you? Christy: I don’t want to be. I called Charlene and she was available. Sara said she saw you at the movies with Charlene yesterday. She knew that if she made such a demand and threatened to leave him unless he made a commitment. I knew you had a class. they are bluffing. and I really wanted to see the new Lenny Bruce movie.

but very little progress had been made. The union negotiators. Tom: Okay. so he didn’t call her bluff. She convinced Tom that her feelings were strong.Tom: She’s a friend who happens to be a girl. Tom: I have friends of long standing who are women. then I’m afraid I want us to stop seeing each other. I certainly don’t want to lose you. I need to have your commitment that you won’t do that. Applying Pressure 135 . she paid her own way. Since he wasn’t sure about that. if you can’t make that kind of commitment. It’s made me realize that I want us to have an exclusive relationship. I won’t go out with any woman friend. Christy: I just can’t see it that way. Example 2 Nexon and its union had been negotiating a new contract for the past couple of weeks. It really wasn’t a “date”—we just saw the same movie together. and at first he thought she might bluffing. 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. Christy would have had to decide whether or not she was indeed bluffing or if she would really end their relationship. If that’s not possible. It is. Actually. Tom: You’re serious? It’s that important to you? Christy: Yes. I just thought of her because I knew you weren’t available. If Tom had “called” Christy’s bluff. he had to make a commitment or risk losing her. He believed she was sincere. Conclusion Tom didn’t want to lose Christy. I’m not “dating” anyone else. I’m willing to risk losing you. Going to a movie with one of them to me is the same as going to the movies with one of my male buddies.

we’re really prepared to go the distance on this benefits issue. much less today. Nexon: I’m sorry. Many of our union members who are working part-time hope to work full-time. The union members ended up voting not to strike at this time. Second. We need an answer today. Why don’t we put this one aside for now. Union: You’re wrong. And I don’t believe you’re going to go call for a strike over this. We’re not going to reach agreement on this at all. This is something we just have to have.) 136 50 Practical Negotiation Tactics . If we’re not able to reach agreement on this. but the company cannot offer the same benefits to the parttime workers as it offers to the full-time workers. Nexon: We’ve got lots of issues to discuss. it will cost too much. or else we’ll be asking the membership to strike. Nexon: I’m just not prepared to give you one. and try and reach agreement on the cost-of-living increase you’re proposing? Union: No. We need some agreement on this today. then all of our other demands will change. Here is what happened at the next negotiations session: Nexon: I’m sorry. but working without benefits is simply not acceptable.believing that Nexon would not risk a strike. This is a critical issue to us. we want the part-time workers to apply for and fill fulltime positions as they become available. First. 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. Another bargaining session was scheduled. (The union negotiating team left the bargaining session and called for an emergency meeting with all union members. Union: You don’t seem to understand. Nexon negotiators did not believe that the workers would actually strike this early in the negotiations.

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.

Conclusion
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.

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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.

Example 1
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

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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

Conclusion
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.

Example 2
A committee of three members of a governing board of twelve people is responsible for developing and presenting the annual budget recommendation for

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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.

Conclusion
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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Since the heating and air conditioning company held no leverage over him. The owners of professional sports Applying Pressure 141 . for example. It’s easy to prediet the outcome in collective bargaining talks if one side is clearly in a very favorable position. his air-conditioning unit went out.” Example 1 We have all been at the mercy of someone who uses pressure bargaining. It is sometimes referred to as “pressure bargaining. while the other is not—that is. and was forced to pay whatever they demanded. such as the advantage of time. because this is the busiest time for that industry. once had to call a plumber in for emergency repairs. Since his toilet had overflowed and water was continuing to run all over the floor. He was at the mercy of the company that could install an appropriate unit the fastest. its union has the advantage in the weeks just before Christmas. when one side has “leverage” over the other. They are more flexible on price and service when they know the consumer is not under any pressure to buy the service being offered. the guy was in no position to dicker over the price of the repair.Tactic 35: Apply Pressure (when you have the leverage) Analyzing a situation and applying pressure in order to achieve your goals when you have leverage over the other party is a commonly used tactic in negotiations. The same kind of thing happened a couple of years before that: In the middle of August. Try bargaining with a plumber! This homeowner. not blessed with many household repair skills. Many companies sell “tune ups” and routine seasonal checks to keep their people busy all year. he was able to successfully bargain for other services. Unions can strike at any time to achieve their goals if they have some leverage. On the other hand. there were times when there was no pressure and no emergency. If the employer is a shipping and express mail company. Example 2 Let’s face it: Sometimes one party holds all the cards.

and other undesired outcomes. When one side places undue pressure on the other side. the employer has the advantage: a supply of jobs. etc. despite strong resistance. What goes around comes around. she has leverage and can more likely hold firm on her price. unemployment is low and jobs are plentiful. low employee motivation. (Team owners are notoriously unpredictable. This gives it the upper hand in negotiating with employees. however. can suffer repercussions in the form of sabotage. The employees had no power to resist the demands of the employer.teams are generally more vulnerable to pressure from the players’ union several days before the season begins. will what goes around come around? 142 50 Practical Negotiation Tactics . if the unemployment rate is high and jobs are few. there are likely to be long-term repercussions. it is the union’s turn to hold firm on its demand).) The leverage of supply is also very powerful: If a jeweler has an exclusive contract to sell a ring everyone wants. Many labor contracts were agreed to when unemployment and inflation were high and employees felt pressured to accept the demands of the employer. for example. but they are less willing to negotiate several months ahead. Other employers find themselves in situations that actually reverse the leverage (when. When the employer proposed adding duties to the job classifications. benefits. Conclusion “Pressure bargaining” is a way to achieve objectives that are greater than what is deserved or desired by the other side. On the other hand. either individually or through collective bargaining. but before you choose such a tactic. A note of caution: Circumstances in one round of negotiations might give one side an advantage. he didn’t have to be flexible because the employees believed that they had no alternatives. then you are in a position where you can set reasonable demands on wages. Employers who refuse to give in on issues of high importance to employees and exert pressure on unions to accept their terms. If so. If you have a special skill that an employer needs and few others have that skill. consider whether or not the two parties will likely meet again in the future to negotiate.

Andrea: Okay. You’re driving me nuts. Just share the doll. Susie: Okay. the girls had been fussy. They stopped for lunch at a fast-food restaurant and shared a children’s meal that came with a small doll. Susie: The doll belongs to both of us. because you will probably only get to use it once. (Their dad pulls to the side of the road and turns to face them in the back seat. Why? A sudden surprise can disrupt the dynamics of a negotiation. Mom said so. Just because you saw it first doesn’t make it yours. you have it this part of the trip.) Dad: Stop it right now.) Applying Pressure 143 . Andrea: The doll is mine. and I can’t stand it. and here’s how the “negotiations” went: Dad: You two stop fighting. you have it when we drive home. Example 1 A father and his two daughters were on their way to visit the grandparents. About an hour into the drive. and Susie. Consider making a suggestion or a proposal that completely surprises your opponent. the argument is over the doll’s shoes. the fighting starts up again.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. Almost from the beginning of the three-hour drive. I took it out of the box. and Susie hid them under the seat. We’ve got a long ride ahead of us. (In a few minutes. Tell Susie to let me have it. the little girls began to fight over the doll. Their dad tried to reason with them. I can’t drive if you keep this up. Andrea had taken them off the doll. but use this tactic judiciously. The doll can be shared. Andrea. This time.

Dolly doesn’t need shoes on in the car.Andrea: Give me the shoes back. but nothing else up to that point was working. so it was worth the risk. Conclusion Dad’s use of a “surprise” tactic was extreme. Daddy said I got the doll on the way to Grandma’s house. I want the shoes. he slowed down.) Dad: Now there’s no more fighting over the doll. at great expense to the auditor’s office and the school board. Both Andrea and Susie were so shocked by their dad’s action. The tactic was so successful. and that they had invested and spent the tax dollars wisely. 144 50 Practical Negotiation Tactics . Here’s how the meeting went: Auditor: I appreciate a chance to talk to you about this litigation. and I hope I can convince you of that. Susie: Daddy didn’t say anything about the shoes. and reached back for the doll. He initiated the litigation against the local school board members and several banks that invested the money for the board. charging that they breached their duty in their handling these funds. The litigation itself had been going on for more than three years. Dad tried correcting them a few more times. Dolly has to have her shoes. to no avail. 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. The local newspaper was prepared to urge the auditor to end the litigation. The auditor asked to meet with the editor to explain his position. in fact. they didn’t say another word. He grabbed it and threw it out the window. She can have them later. The defendants contended that the auditor’s actions were politically motivated. The auditor’s job was to make sure that tax dollars collected for the local education system were appropriately handled. (They continued to argue and whine and pinch each other. Finally. I think I have acted properly.

Editor: (surprised) Really? They settled? This is public information? Auditor: Yes. perhaps you should just cut your losses—and just drop the suit. Applying Pressure 145 . We believe the other defendants will soon follow suit. From what I can see. the bank would not have done that had we not proven our case. and a significant amount of money will go toward the tax fund. The school board members make a very good argument that their practices regarding how the funds were expended are not just adequate. They’ve been making that same argument from the beginning. there’s just nothing to back up your allegations. I guess we’re finished here. this case needs to be dropped. My frustration is that they have refused to provide our office with sufficient information to back up their contention that what they are doing is best for the schools.Editor: I’m certainly willing to listen. I really think the community would be better off. This morning. Editor: Well. Auditor: I appreciate their arguments. They are very persuasive that this is just a political battle. Here are the papers. but recommended that the parties reach a settlement. I think I have something here that will convince you otherwise. Obviously. Auditor: Well. one of the banks settled with my office. and it is costing your office money and good will. but I have to warn you that from what I’ve seen and heard so far. Conclusion The editor wrote an editorial urging a resolution for the good of the community. That’s really the reason this has gone on so long. rather than drop the case. The auditor successfully used the element of surprise in announcing the settlement and thus changed the direction of the editorial. Thank you for coming in. Editor: Well. Your reporters will probably want to follow up on it. but actually superior to some other entities you supervise. as a matter of fact.

Kevin: I don’t really care about a pool table. Kevin is against it because he is turning 16 years-old soon. If the negotiating team sitting across the table from you seems to be divided on a subject or one of the team members seems to be more sympathetic to your arguments. and a car is more important to him than a pool table. I’d 146 50 Practical Negotiation Tactics . but I think it will get a lot of use. they’ll be mobile! The last thing I want is for them to be out cruising around. Kevin: So am I. 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. you might be able to dilute their power by identifying their different interests and addressing them separately. night after night. Mike knows he needs to get either his wife or his son on his side. I know we’ll all enjoy it. Dad. I can remember spending hours playing with my friends and family when I was growing up. Example 1 Tina’s husband Mike wants to buy a pool table for their family room.Tactic 37: Divide and Conquer Certain negotiations lend themselves to a divide-and-conquer tactic. If the other side involves more than one person. Mike: I know. Tina: I’m really against this pool table idea. I want to talk about a car! Mike: It’s really not one or the other. try to focus on that subject or address that member directly to get them to be more amenable to your proposal. Tina: What do you mean? Mike: When Kevin and his friends get their licenses. although getting your license and getting a pool table are connected. especially Kevin. Tina and their son Kevin are against the idea.

Tom.like them to hang out here more. Conclusion Mike found an argument that divided Tina and Kevin. Example 2 Negotiations on a new union contract seemed to be going quite smoothly. Instead of both opposing the idea. 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. What happened? Applying Pressure 147 . the chief negotiator for the company. who was studying the company’s financial records for the team) became uncomfortable when he heard Tom’s demand. the head of the union negotiating team. Once Mike convinced Tina of the idea’s merits. I’m surprised. don’t you think you guys would use it? Kevin: I guess so. And I really do need a car! Tina: Do you really think the guys would use it? I would rather have them here than out getting into trouble. I thought we were making real progress. She noticed that Jim (another member of the union’s negotiating team. and Kevin and his friends use it often. Kevin. But I’m not going to hang out here all the time. A pool table could attract them here. A number of contract changes have already been worked out and Wylma. Tina: Well. has just presented the company’s initial wage offer. Wylma: Tom. They bought the pool table. then maybe it’s not such a bad idea. she joined his side of the debate. Mike: I really do. received it without comment. only Kevin did. Here’s how the negotiations went. some.

you certainly are aware of our financial situation. Wylma: Jim.) Wylma: Now Tom. Right. these are our actual accounting figures. as Jim can point out to you. Wylma distributed copies of financial data that showed the company’s current condition. forcing them to reconsider their demand. This is just what we think is fair. I think you need to rethink your demand. you’ve heard our demand. (When they resumed. Jim? Jim: Yes. Do you think this is reasonable? Jim: (looking uncomfortable) Well. but he added some workplace changes that Wylma was comfortable negotiating. Tom: We don’t think so. Tom had reduced his wage demand significantly. Wylma: Tom. When the negotiations began again. Wylma: Let’s take a break. Your demand is totally unreasonable. Let’s start again tomorrow morning. 148 50 Practical Negotiation Tactics .Tom: Wylma: Nothing happened. these are accurate. But Tom. Conclusion Wylma’s appeal to Jim’s knowledge of the actual financial situation of the company worked to divide the union’s negotiating team. you’ve seen our sales projections and production costs.

some of the siblings decided they liked giving presents to one another. That will just make a bad situation worse. Stay alert and watch for clues that a negotiation is about to get out of hand. it was easy to agree on just giving presents to the children. especially between Madison and Cory. but it should never be at anybody’s personal expense. You are almost 40 years old. Example 1 The four Jones kids grew up. Ever since Mom and Dad died. but it is really important to me. 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. When all of their children were small. 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. and it makes me very sad. and had children. get over it. Applying Pressure 149 . Cory: Madison. We can’t afford to buy each other things we really need. Tempers flare and people say things they shouldn’t out of anger or frustration. the oldest and youngest Jones children. so pressure grew to draw names and exchange gifts. Sometimes the argument got heated. It was a tradition in the Jones family to spend Thanksgiving dinner arguing about how the family wanted to celebrate Christmas. so what’s the point? I don’t need another tie! Madison: It’s not the gift.Tactic 38: Break the Tension Tension is inevitable in most negotiations. Madison: Okay. I don’t feel Christmas in the way I used to. but the thought that matters. married. I want to say something. Humor often works to break the tension of the room. so you can find a way to quickly neutralize it.

Cory:

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.)

Conclusion
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.

Example 2
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.

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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!

Conclusion
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.

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If there is resistance to compromise. but since the other children in their room were not there. C. I want to play “Princess” and I want Dara to be the “Prince. Mr. or maybe tomorrow. Isn’t it “later” yet? Right now would be a good time to go outside. C. it is better not to compromise. they would have to play ball with older children. the exchange will be between things of equal value. not the Prince. the individual might be afraid that the exchange isn’t equitable). don’t you want to play? We could color before your mom comes. Julie wanted to play “dress-up.: Julie: Dara: Mr. When that point is reached. was ready to color. One day. each side must decide whether or not one more compromise will produce an agreement that they will later regret. At some point.” but she needed Dara to play with her. 154 50 Practical Negotiation Tactics . they were the last children left in the playroom for the remaining two hours of the day. Okay. If I can be the Princess. The day-care worker wanted to take them outside for a while so that he could visit with his friend. and that doesn’t happen without compromise. however.: Julie: Dara: Julie: Girls. I want to play “Prince and Princess. how about going out to the yard for a while? You can swing or play ball. Then we can color. (In a successful negotiation. Both of the little girls liked to play ball when they were outside. Dara.” Can I color now? You said we would color later. Example 1 Julie and Dara both attend a local preschool.” Dara.Tactic 39: Compromise Negotiations are successful when all parties walk away with an agreement they are satisfied with. 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. who was outside with older children.

According to the city’s zoning laws. you can come back in and play “Prince and Princess. Example 2 The owner of a small strip mall in the heart of a residential neighborhood was planning to add a small movie theater to the other businesses in the mall. Mr. C. The existing parking lot didn’t meet the current parking standards for that size theater. We don’t want to go outside. They were also concerned that teenagers would congregate outside the theater at all hours and there would be more litter and trash around the mall’s parking lot. the owner had to supply additional parking. and they still had time to color. When his variance application was made public. The owner and a small group of neighbors met to talk about these problems. 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.: Julie: Hey. The owner decided to try for a variance. or apply for a variance. wouldn’t you like to go outside first? After you swing for a while or play ball. C. however. failed to offer the children something that was as important as the plans they had made.” No. They did all the compromising they were willing to do. neighbors became concerned about the changes to the mall. there will be an overall increase in traffic coming through the neighborhood and vehicles will be turning into and leaving the parking lot. and teenagers attracted by Making Progress 155 . The neighbors: The neighborhood has four concerns: Theater patrons will be taking up scarce on-street parking spaces.Mr. the parking lot will start to look trashy. We want to play dress-up and then color. Conclusion The children stayed inside and played dress-up.

I’m certain the lot will accommodate the theater crowd without increasing the parking on your neighborhood streets. lights in and out at night can be very annoying. What if I changed the entrance to the middle of the lot? That way. Owner: You know that there’s always plenty of parking in the south end of the mall’s parking lot. The fence would shield neighbors from the lights from the vehicles and block the walking access through the alley. All a patron has to do is park on Elm and walk beside Joe’s yard through the small alley there. In fact. the north lot is used more. I could put a privacy fence along the east and west—at the backs of your yards. Many of our homes back up to that lot. even though I’m not adding any parking. the closest parking to it is along Elm Street. only when that lot is full would cars come around the mall and park on the south side. driveways on the south side of the mall are along the east and west side of the parking lot. as you said. not having direct access to the south lot from the street would be unworkable.the theater will start to hang around and maybe wander around our yards at night. Right now. Not having in and out traffic to the south of the mall is just not very practical. So. The neighbors: Owner: 156 50 Practical Negotiation Tactics . and break in his door. if I agree to move the theater entrance to the south side. We hope you’re right. We’re just not convinced. You could have all of the traffic enter from the north lot. 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. With the Comedy Club and the grocery store on that end. Right now. but it’s not ever full. And. with your plans to put the entrance of the theater on the east side of the mall. I’m afraid. and we’d like to keep it that way. the south parking lot has not been used much.

But you’re going to have to have some kind of security as well. put a privacy fence along both the east and west sides of the south lot. Teens can form into gangs if left unwatched. there could still be access from the street to our garages—just not to the main parking area. 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. Making Progress 157 . set back a driveway width. and make sure the parking lot is kept clean. add a new entrance into the south lot. Now you’re talking about considerable expense. The compromises were what everybody could live with. Conclusion Both sides had to give up something on certain items in order to reach agreement. but the privacy fence has to be landscaped so that it doesn’t look like a ghetto wall. then will you agree not to push for increased private security? Yes. And a year after the theater opened. If the fence was set back the width of a driveway onto your property. Agreed.The neighbors: Owner: The neighbors: Owner: But we use those side drives to get to our garages. The fence would help with the vehicle lights and buffer this noise from the kids who hang around. however. The fences created a buffer from the lights and noise. and they discouraged patrons from parking on neighborhood streets.

your friendliness might disarm and relax them to the point where they begin to talk about their priorities and objectives. and started to get upset. Your opponent might give in readily. They might even start to underestimate your negotiating skills. She sought advice from the family on the other side of the neighbor with the barking dog to see whether this 3:00 a. 158 50 Practical Negotiation Tactics . professional. they had gotten nowhere. She learned that everyone in the neighborhood had complained at least once. Mrs. Lonely. because you are the one to set the tone for agreement.m. Mrs. and I just moved in next door. and that as angry as they were. Close your windows at night and don’t listen. Example 1 Joan was new to the neighborhood. This gives you an advantage. Joan decided to at least try and talk to the neighbor. Joan was already pretty tired. and because she was hard of hearing. just forget it. she just didn’t think it was a serious problem. but be friendly. so her neighbor’s barking dog came as an unpleasant surprise. but going out of your way to be friendly is an especially helpful tactic. The dog was Mrs. She didn’t believe her neighbors ought to complain about the barking. Joan had a new baby. If your opponent is aggressive or angry. incident was usual or unusual. respectful. and didn’t stop until 6:00 a. Lonely: If you’re here to complain about my Rocky. Lonely’s only companionship. I’m Joan. Joan: Hi.Tactic 40: Be Friendly Being polite. and sleeping at night was already a difficult proposition! When the neighbor’s dog began to bark at 3:00 a. Take advantage of any confusion about your friendliness to try to get them to agree to some of the easier things you have to work out..m. and pleasant always enhances one’s ability to reach an agreement. thinking that you will be just as easy to work with on the sticky issues. Present your position forcefully.m. and what kind of complaints might have already been made.

When he does. Mikey. He’s been keeping me up at night. I can’t pay for something like that. by the way. Do you think his age has contributed to some of that? You know. I need to get the baby home. Well. Lonely: Joan: Mrs.Joan: Mrs. Why. Lonely: Joan: Mrs. I guess so. Lonely: Joan: Mrs. Who. it’s probably because they just haven’t had the time to get to know him. then. is a really sweet dog. too. I guess that would be okay. (Joan’s sleep was disturbed by another night of barking.) Hi. Lonely: Joan: Mrs. not at all. I know that some of these people around here don’t like him. Lonely again. I just wanted to come by and introduce myself. and I’d like to have him stop by and look at Rocky—would that be okay with you? Well. Maybe I could come back tomorrow and bring him? Oh. don’t worry about that. Well. I sure hope he starts sleeping through the night soon. no. Making Progress 159 . No. I’ve only got my Social Security. I might have to talk to you about Rocky. My friend wouldn’t charge anything for talking to us about Rocky and maybe giving us some advice. I’d like to introduce you to my new baby. isn’t he cute! He’s a handful. He’s a real comfort to me. sure. I stopped by and visited with him over the fence this morning. I’ve got a friend who is a veterinarian. though. The barking at night has been mentioned to me. How long have you had him? Almost eight years now. Lonely: Joan: No. Here’s my little angel. I’ll see you. but she took her baby and went to visit Mrs.

Here’s how the meeting went: Company ZZZ: We’re very sorry. It’s very difficult to make a move of this type without having it leak out. 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. Lonely and Rocky. They anticipated that it would be an unpleasant meeting. he prescribed medicine that gave Rocky a more regular sleep schedule. Joan took up contributions from the neighbors. and Mrs. Under its new corporate structure. of course. After Joan’s veterinarian friend visited with Mrs. Lonely’s needs and arrive at a workable solution to the problem.Conclusion Joan’s friendly approach enabled her to understand Mrs. When he heard the news on the radio. overseeing a factory in Mexico and selling products in the states. U.. Mayor: (very friendly) I understand how these things happen. Lonely didn’t have to pay for the medicine she could not afford. Hearing about this from the press obviously puts you in a very embarrassing situation. that the press got hold of the story of our company’s activities before we could call you to let you know. I think that if you could have let me know ahead of time. you would have. that’s very understanding of you. Company ZZZ. agreed to meet with the mayor. recognizing that the layoffs would be an issue in upcoming local elections. 160 50 Practical Negotiation Tactics .A.S. Example 2 Company ZZZ planned to close its manufacturing plant and lay off 300 union employees. the mayor called and asked for a meeting with Company ZZZ officials. Company ZZZ: (surprised) Well. its 150 management and sales employees could continue to work in Happy City. The barking all but stopped.

or would we need to involve the Malaysia group? Company ZZZ: Certainly. Mayor: Please let me know as soon as you can. Company ZZZ: I’m not sure what to tell you on that. and I want them to know that. They need a really good deal on the plant price. We recognize that your new corporate owner is a large company located in Malaysia. because I’d hate for us not to make an appropriate pitch to them. Mayor: Great! Let me know when we can talk again. It’s possible that some of the 300 laid-off employees will find work at this new endeavor. The mayor was able to broker a deal for the “disadvantaged business” to buy the plant and convert it to a different widget maker. 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. so we need to understand how we can affect their decision on keeping an office here. The buyer is a “disadvantaged business” we have been working with for some time. the city has a potential buyer for your plant building. Making Progress 161 . Would you be in a position to talk to me about such a deal. and the mayor was reelected. 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. Many laid-off employees did indeed find new jobs at the plant. By the way.Mayor: I wanted to meet with you so we can take the necessary steps to keep the 150 jobs here. We just haven’t heard anything yet. the 150 management/sales jobs did end up moving to Mexico. This strategy worked. You’ve been very understanding about this. Unfortunately. I am certain that you would like that kind of “good” publicity coming quickly after the recent bad publicity.

Alexis agreed. Example 2 Three men were meeting to discuss a charge of sexual harassment that had been made against Stuart Jones. The two sisters had saved up a little money so that they could buy souvenirs. She borrowed a tape recorder so she could ask her father if this was a fair deal. Michael Wood. had $40. Susan denied it. the investigator. who was disappointed to hear that she might propose such a deal. threats. They might worry that the tapes will be made public or given to others. She agreed that her proposal was not fair and that she had tried to take advantage of her younger sister.00 to spend. and Jones. Susan repeated her demand. Susan understood the impact a tape recording can have when it reveals a lie. and Alexis. thus becoming a source of embarrassment.00. this time in front of a hidden recorder. until Susan said they would evenly split what they bought. or used to pressure the other side to agree to certain demands. Fred Adams. Jones’s supervisor. the accused. The effect on the other party might be even more substantial if lies. South Carolina. or simply “bad faith” methods have been used by the other party. He asked his elder daughter about the arrangement. Example 1 Susan. Then he played the tape. age 15. Somehow. Susan wanted to negotiate with Alexis to “pool” their money so they could buy something together. 162 50 Practical Negotiation Tactics . but Susan had only $20.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. are talking about a possible settlement of the issue. Conclusion For the first time in her life. the younger sister. age 14. were on vacation with their parents in Myrtle Beach. Alexis then played the tape for her father. Alexis knew this was not fair. Alexis.

Appleton both claim they saw the incident and will testify. I’ve brought a tape recorder with me. stares. and gestures did not have a single hint of sexual implication or innuendo? None at all. And please describe your general manner. Making Progress 163 . Conclusion Jones had knowingly lied when he denied the charges. So you refuse to repeat the answers you just gave us? Yes. You never touched any part of her body? Not even accidentally? No. I think I can write my recommendation. Jones suddenly realized that his strategy would not work. you are aware that the next step in this process is to ask witnesses to come forth. And you did not threaten her job if she did not. exactly what you said to Ms. No one could have possibly misunderstood your intentions? No reasonable person. (a long pause) I want to see my lawyer. to quote you. Jones. and now I’ll ask you to repeat your answers—on tape. So. I simply asked her to make copies for me as quickly as possible. he also lost his negotiating position. When Adams set the tape recorder on the table and revealed that he had witnesses. Your request.” meaning something other than copies? No. He failed to think about what might be the next step. Ruiz and Ms. Well.Adams: Jones: Wood: Jones: Wood: Jones: Wood: Jones: Wood: Jones: Adams: Jones: Adams: Jones: Adams: Tell me again. Starr. Mr. Mr. “Do what I want. Stuart. But by refusing to repeat his answers.

is usually careful about dividing the object into two equal parts. take this knife and slice the Snickers into two halves. the classic “split and choose” tactic might be the best way to settle the issue. Maria. which certainly is large enough (he naively thought) for two young children to easily share. so I’ve got to cut it into two equal pieces or else he will choose the bigger one? Exactly. What is it? Maria: Father: 164 50 Practical Negotiation Tactics . Many of us learned this one from our parents: After two people agree to the strategy. The second person then chooses which of the two parts they will receive. one person is given the task of dividing the object(s) into two parts.Tactic 42: Split and Choose When two parties both desire something that can be shared or divided between them. Maria and Roberto: No. with the remaining part going to the person who did the dividing.… No way! Haven’t you two heard of ‘split and choose’? It’s a fair way to divide things. Oh. Roberto will get to choose which half he wants. Maria: Roberto: Maria: Father: Father: We can’t share it! It’s in one piece! I’ll eat half and give you the rest. 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. Their dad instructed them to share the candy bar. because you did the cutting. of course.” the divider. Realizing the potential of getting the “smaller half.

Clarence: Right. Archie: That’s true. Then I will choose which parcel I want. Archie is ready to build a retirement home on the property. even children. They have a recent appraisal that values the property at $150. Making Progress 165 . Archie: I really don’t care either. that sounds fair. Clarence agrees to divide it. There is only one place for an access road that must serve all lots. both parties.000. Archie: Here is the map. They all have a great view and are equally desirable to build on. I propose that you divide the fourteen acres into two parcels that you believe are about equally desirable: one parcel with three lakefront lots and the other with four lakefront lots. That makes them more desirable. Give me the map and a pencil.Conclusion When two people desire the same object and it is something that can be divided in some way. Lots must be at least one acre to be developed. but the appraiser pointed out that the seven one-acre lakefront lots are considerably more valuable than the other seven lots. The remaining lots should be distributed between the two parcels to make each parcel as equal in value as possible. I don’t really care which lakefront lots I keep. and wants to divide it into two separate parcels. Deal? Clarence: Sure. The problem is that one of us will get four lakefront lots and the other will only get three lots. according to county deed restrictions. Clarence: But some of the lots away from the lake have been partially cleared and are flatter than others. quickly recognize the fairness of the divideand-choose method. jointly purchased fourteen acres of lakefront property several years ago. but is not sure how to arrive at a fair split. so we should be able to divide the property fairly. Example 2 Two friends and business partners. Clarence and Archie.

and the second parcel with four lakefront lots and one other lot.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. Which would you have chosen? 166 50 Practical Negotiation Tactics .

miles from their home. What started out as a single issue is now a combination of a major issue and a much smaller issue. so the salesperson delivered the suite himself. Conclusion The amount the couple spent was fairly large. etc. we’ll take the suite if you’ll throw in free delivery and set up the furniture.” Many people have witnessed or used this effective negotiating tactic. However. is expected to dicker over the price. Jason was having a hard time getting the salesman to lower the price. because a “nickel” item has been added to negotiations about a much more significant item costing “dollars. With a great deal of effort.Tactic 43: Nickel and Diming Insisting on the addition of a small item (a “nickel or dime” item) as an inducement to help settle a more-important item being negotiated can change the negotiations in a significant way. he also set up all of the furniture in a second-floor bedroom.” Under store policy. and the delivery carrier doesn’t set up mirrors. attach legs. His tactic was to throw in a “nickel” in order to make lots of “dollars. delivery was limited to a small geographical area. Example 1 Brenda Davis is always thinking about the repairs that might be required on an item. Brenda did her part when she said. 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 . supposedly the bargainer in the household.” thus extending the scope of the negotiations. They recently purchased a new bedroom suite after they carefully priced comparable furniture all over town. “Okay. Her husband Jason. The suite they liked best was already at the lowest price in town (the retailer was having a real sale).

we’ll agree to Health Plan A with another ½ cent on the pension fund. This experienced bargainer said. it can be a dealbreaker.important item. the two sides had been engaged in considerable bargaining over an improved medical insurance plan (“Health Plan A”) costing hundreds of thousands of dollars.” The company negotiator yielded to this small-potatoes counteroffer in order to win agreement on the health plan. so be prepared to withdraw the nickel and dime item at the hint of trouble. 168 50 Practical Negotiation Tactics .” Conclusion The nickel and diming tactic is a classic negotiation tactic used successfully in a variety of situations. If one party misjudges the situation. In one case. At the end of negotiations. 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. “Okay. If used correctly—at the very end of a negotiation—the tactic can usually provide a small gain.

and all the rest is small junk. thus creating the impression in others that the good qualities they see are present all the time.” Having a member of a negotiating team whom the other side thinks can do no wrong might prove to be advantageous. Kathy: I’ll take the pool table. decision-making meetings. You can go first. Donna: Okay. Example 1 Donna: Mom said to take what we want from the old house and toss out the rest. but they are two pieces of furniture. and performance evaluations for people to come across as likeable.Tactic 44: Make Use of a Positive “Halo Effect” It is common in interviews. Kathy: Well you took the bar and four stools as one item! Donna: They are part of one set. or knowledgeable. I’ll take the color TV. Kathy: But they are a matched set. Kathy: Not if you accept your logic! (Pause) Donna: You’re not being fair… Making Progress 169 . People tend to make an effort to put their best foot forward. trustworthy. Donna: They match. Donna: No way! These are the last two pieces of furniture. This creates what is called a “halo effect. Kathy: Then I’ll take the couch and love seat. Kathy: I suggest we take turns choosing which of these things we want. Donna: I’ll take the bar with stools.

I want the love seat. Johnny had the “halo” of an honest person. I want the stools. and if the bar and stools should be one item or two. 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. 170 50 Practical Negotiation Tactics . but Kathy and Donna assumed that one positive quality (honesty) would carry over to other areas. (Pause) We’ve got to settle this today and get this stuff moved. He’s our cousin. Let’s call Johnny Ryan. Conclusion Kathy and Donna needed an arbitrator to settle their disagreement. The union negotiators. He might or might not have also been a good arbitrator. Example 2 During a heated labor negotiation. and ask him if the couch and chair should be one item or two. What for? Tell him the situation. I trust his judgment. what can we do? Give me the couch and love seat! No. and he has always struck me as an honest person.Kathy: Donna: Kathy: Donna: Kathy: Kathy: Donna: Kathy: Donna: Kathy: You’re not! (Pause) Well. Good idea. with a record of labor involvement that included three recent strikes.

Boston was widely known as a totally honest man who speaks his mind. 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. but his mere presence caused the union leaders to accept a management point as valid. Making Progress 171 . They might have stretched his halo farther than his expertise and experience warranted. thus bringing the negotiations to a conclusion. the consultant did not speak. even if the proposal appeared to be valid. The union accepted the proposal. as a consultant to review their proposal. when negotiations again stalled on a retirement plan issue. He solemnly told the union negotiators that he had been hired to review it. the city management again hired Boston. the former union president. This time. and that he did. During the break. On Monday. Two weeks later.simply did not trust the management team. The teams took a weekend break from the stalled negotiations. Boston went to the negotiation table with the management team. He said he believed that it would work as presented by management. the management team hired Sam Boston. without any reservations. but the power of the so-called halo effect was great.

has owned the house for 24 years and is downsizing to a condo. They believe it is overpriced. the other party will ignore or refuse to believe the information.000. and we are countering with an offer of $250. (Next day) We’ve reviewed the records you’ve produced. $237.Tactic 45: Use Facts Fact-gathering must be part of the preparations for every negotiations session. Sam Jones. Example 1 Henry and Maria Lopez are interested in a house that lists for $275. Being able to present them at the most appropriate and critical times has made the difference in countless negotiation situations. The owner.000.000.000. Sometimes.000.000.500. Here’s a list of the five that are about the same size as yours.000. Sam Jones: Sam Jones: 172 50 Practical Negotiation Tactics . and $237. I’ll get back to you.000 under the listing price! We realize that. but the key is to gather facts that you might need—not just the facts that you will need. but you’ve priced it way too high. 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. $235. but the right facts presented at the right time can chill or astound and completely turn things around. This offer is for more money than any four-bedroom houses on this neighborhood list. $229. Henry Lopez: Sam Jones: Maria Lopez: Sam Jones: Maria Lopez: We love the house and have made a written offer of $240. but we feel that it’s a fair offer. They sold for: $225. We love your house. What? That’s $35.

We accept. Here it is.400 each. and we know that only this model will meet our needs. Supervisor: If I okay this purchase order.600 for a computer. Conclusion Hatfield had anticipated what his supervisor’s position would be. We’ve talked with purchasing and we have the authority to buy seven for $2.000 each. Hatfield: My staff has done a lot of research. and did his homework. The last 20 were over $2. Making Progress 173 . and wisely chose exactly when to present them in order to make his point. I asked for a list of all new PCs bought this year. He found facts that supported his position. You can’t pay more than $1. let’s not worry about it.600 unless the company president approves. Order the new computers. I’ll get called on the carpet. The facts presented by Henry and Maria Lopez caused Jones to re-counter their asking and likely sale price. Conclusion The Joneses had based their asking price on the advice of a friend. who was not particularly knoledgeable about real estate. I’ll be… Okay. Well… We have a written counter of $245. if other departments have ignored the policy. No one can go over $1.Henry Lopez: Sam Jones: Henry Lopez: Sam Jones: Let us discuss this for a minute. Hatfield: While I was at purchasing. Example 2 Supervisor: You know the policy. Supervisor: Well. That’s the bottom price.000.

and two are for my husband. Maureen: Well. and they would all be unavailable to others. Would I do that? Jenny: Maureen. I want two of these. can you check out two on a card for him? Jenny: Well. A maximum of three books can be checked out to a person at any one time. I can do that within the rules. But I can’t break the limit rule—it is an absolute rule here. Maureen: Well. yes. I can’t check out these four books? Jenny (Librarian): That’s the policy. They can help you identify or better understand what the other side really wants. The effective use of probing questions can help achieve a favorable settlement. 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. Maureen: So you trust me with the books. Example 1 Maureen: What. Otherwise.Tactic 46: Ask Probing Questions Ask probing questions and follow-up questions. some people would have forty or fifty books out at the same time. but I don’t set the policy and I can’t make exceptions. If you trust me. reveal misperceptions or lack of knowledge about positions that can be corrected. you know me. and help you point out inconsistencies in a position that might “lead” the other side to change theirs. but you don’t want to jeopardize your job? Jenny: Yes. I’m sure you would not.

Mary and Kenzie? They are 2-3 pay grades below us. it could kill us. Example 2 Jack: Mark: Jack: Mark: Jack: Mark: Jack: Mark: Jack: Mark: Jack: Mark: Jack: Mark: Jack: Mark: Jack: Mark. They say it’s a security issue. What’s the policy number or date of approval? I don’t know.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. Babu. I couldn’t find anyone who knew it. If that data ended up in the wrong hands. Jay. we can’t do that. (Next day) Do you have the policy about giving out product sales information? No. Making Progress 175 . Why? Some policy? Yes. Sue. Security? Right. Brooks. and Kenzie. Mary. and they don’t even have a use for the sales data. but it’s because you don’t have access clearance. Can you get me the number? Sure. But this forces us to make decisions without complete information! Yes. are you sure I can’t get your information technology people to give us direct information on product sales? No. Who does have access clearance? Mike.

His probing questions turned up a critical fact. Jack: Here.” He intended to do this until he hit a dead-end or was able to find a solution to his problem.Mark: Well. that’s been the policy since I’ve been here. I’ll get it for you ASAP. I’ll sign now. Conclusion Jack continued to probe by asking why and who in order to find out more about “the policy. When can I get the data? Mark: Today. Jack: Can you ask your V. 176 50 Practical Negotiation Tactics .… (Next day) Mark: The vice president said you can have access if you sign a security card like everyone else who has access clearance. if we can have access? Mark: I guess so. Once he discovered that employees in lower pay grades had access clearance. Jack was able to receive clearance as well.P.

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 tactic can produce an agreement. In this process. the two parties agree to let a third party render a decision on unresolved issues and agree to accept the arbitrator’s decision as final and binding. If friends or neighbors need to settle something but prefer to avoid the negotiation process. When two parties believe they have an oral agreement. hours. 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 classic Walk Away (Tactic #48). When multiple issues are at stake and most have been agreed upon during negotiations. They bring it out when a dispute arises. Other final-agreement tactics include Tactic #47 (Giving Premature Congratulations) to make the other side feel good about having achieved an agreement (while you spring another condition on them). If people are not willing to take even a few minutes to write down the terms that have been agreed upon and sign the paper. If both parties desire a settlement but cannot seem to reach it through the usual give-and-take process. days. 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. this process can easily result in a final settlement. or even months after the first offer is presented. Tactic #49 (Final-Offer Arbitration) should bring about a settlement.Stage 7: Reaching Agreement he final stage! It might come minutes. and the child learns an important lesson about life.

Near the end of a particularly anxious bargaining session when there was little time left to negotiate.…” Larry was very pleased that his wife was agreeing to the idea he had been trying to sell. Example 2 Negotiations can take a long time and incorporate many issues. Weeks of stressful meetings cause both sides at the bargaining table to look forward to its conclusion.Tactic 47: The Premature Congratulation This tactic draws its strength from timing. After days and weeks of on-again. off-again discussions. She said. Larry Snyder gets bored staying in any one place for many days. 3) and adds one last key demand to the congratulation sentence.C. As he hugged her. one exhausted negotiator saw that his team was equally weary and 178 50 Practical Negotiation Tactics . and Virginia Beach —his plan—that he let the euphoria of the moment cause him to agree to a trip he dreaded and in fact had successfully avoided all year. Nancy brought up the subject of vacation again after dinner. His wife had carefully planned her exact “premature” vacation agreement. but his wife Nancy likes to stay put and relax. They both have stressful jobs and look forward to their annual vacation together. D.” Conclusion The husband was so excited about visiting Washington. “I’m thinking of agreeing to your plans for vacation. she continued to speak: “…as long as you agree to drive us to visit my mother on her birthday. Example 1 Many husbands and wives have different ideas about how they’ll spend their vacation. The bargainer skillfully 1) begins the congratulation sentence “I agree…”. Let’s do go to Virginia Beach and Washington D.C. 2) allows the other side to feel the release that comes with completing the bargain.

but also that they sensed the weariness of my team. Most people didn’t notice that the negotiators had not finished their hand shake… Ted: Then Ted continued his sentence with. “…as long as you give us a 45-day probation period. My team was afraid we would not even come to an agreement. One operating issue involved the probation period for new employees. The old agreement specified a 30-day period. because it makes you pretty vulnerable.almost willing to accept any deal. There were grins and handshakes coming from the other side. It took only a few minutes of caucusing for my team to convince me that a 45-day probation was costly. but acceptable. we made some small concessions on financial matters. (This is a bad position to be in. Ted said. I felt the tension in the room. “It was hard for us. When the chief negotiator emerged with his team and headed toward my team. In our last offer. symbolizing that he was agreeing to the entire final offer. and rested.” Bob: Ted timed this perfectly. but we agree to everything in your final proposal…” Members of my team shouted hooray. but held firm on remaining operating principles. Reaching Agreement 179 . we held firm on this and did not discuss the probation issue and many other “dead” issues for days. and this skillful negotiator let them feel the happiness and security one feels when the fear vanishes. but the other side continued to ask for 60 days. My team had convinced me that doubling the time frame would create a real problem on the shop floor. However. It was so close. We all knew that it could come down to agreement or strike. as the negotiator came closer. fit. he turned on a large warm smile and extended his hand to shake.) Here’s what happened: Bob: I knew that the other side was similarly harried. One of the best pieces of negotiation advice is to remain fresh. Therefore. The celebration had begun.

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. 180 50 Practical Negotiation Tactics . However. The negotiator makes a big show of agreeing and allows the other side to bask in the glory of a deal completed. knowing that it will probably be agreed to in order to continue in the euphoria of the moment.

I don’t want to negotiate. I’ve worked with you before. but his Avalon has been a good car. You bought your wife a new van just last year. what can you do on a 36-month lease? Reaching Agreement 181 . right? Jay: Yes. Jay. too. Sue: Let me get you the keys so you can take this one home overnight to see how you like it. the following exchange occurs.) Jay: Sue. if I roll over the lease to a Highlander. (Vahaly drives the new Highlander home. Example 1 Jay Vahaly has purchased three new Toyotas from Pembroke Toyota over the past twelve years. Your opponent will have to either let you go and run the risk that things are really over.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. He really likes it. Jay: Hi. but my Avalon is a good car. or go after you and perhaps make a new concession in order to get you back to the table. all from Sue Wilson. Sue: Well. how did you like it? Jay: Okay. Sue: I remember you. here are your keys. My name is Jay Vahaly. a veteran salesperson. and he can simply buy it when the lease expires. The next morning. I like it. He stopped by Pembroke one day to look at the new models. be sure you think this through beforehand. and the lease on my Avalon is about to expire. You had time to assess my car. but I thought I might want to try a new Highlander. Whether you are really bluffing or you are serious. Jay.

Jay. they came down to $199 more on a thirty-six month lease. He effectively used the walk-away tactic to let Sue know that he was firm on the price. These Highlanders are hot items! Jay: Well.Sue: Give me a few minutes and I’ll find out … (20 minutes later) Sue: Well. (Jay got in his car and drove home. a successful musical instrument sales and rental store. That was the figure he was looking for. Jay accepted. (He walks away) Sue: No. Example 2 Larry and Judy Bizannes own the Bizannes Music Mart. Jay: What? I was thinking the lease payment would be. Jay: I guess I’ll go to Dixie Toyota and see what they will do for me. They’ve talked about retiring in recent months. Let me try again. Sue: Sorry. Sue: I’ll try. He was prepared to keep his Avalon if the lease was even $1 more than his limit. but 182 50 Practical Negotiation Tactics . you can turn in the Avalon and get the Highlander for only $249 dollars more per month. (15 minutes later) Sue: Well. Please go back and work out a lower lease payment. Jay. $100 more.) Conclusion Jay knew his BATNA (best alternative to a negotiated agreement): to go somewhere else if the deal isn’t good enough. Sue called him as soon as he walked in the door and offered another $50 break on the lease. Jay—wait. I thought I’d get a fair deal. at most. I’m disappointed.

Reaching Agreement 183 . One day. He met with Bizannes twice before. I still want to develop this block. Larry. and I’m not interested in less.) 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.5 million for the building. Larry: Yes. go back to your office. let’s eat lunch.) Larry: Michael is here again. Judy: Larry. and he is offering us $4. Larry: Michael. so why are you here? Michael: I’ve discussed it with my partners. How’s business? Larry: Great! I’m surprised to see you again. and I’m prepared to offer you $4. Two months later. a local developer. What do you think? Judy: Larry. Michael: Good morning.5 million. after no contact from Larry or Judy. and I only need your building to own it. (Judy and Larry walk into the back room and close the door. Michael Roberts. and we gave you our price. you’ve already told us that.0 million. visited their store. today. Larry.both of them love their store. our accountant said it’s worth $6 million. You rejected it. come out here! (Judy comes out from the back room. they were prepared to accept $5.5 million. In reality. but their continued walkout convinced Michael that they would hold firm. Michael: I have a check right here for 4. Larry: Judy.5 million. Michael calls on them again with a check for $5. Michael: Well. which the Bizannes accept. with a certified check.

I won’t take it. Six months later. but they wanted to give Jenny $500 for her “share” of the machine. Lynne: No! I suggest that we each write down our position and let Dad choose one of the two as the final decision. each party submits their final offer on each unresolved issue (usually in writing) and the arbitrator chooses one as the final settlement as it has been submitted (no changes or compromises). the arbitrator is given the authority to make the parties comply with the final and binding decision. which is generally voluntary. I offered it to you for nothing. One day Lynne dropped by for a visit and the discussion turned to the old Singer. and would be able to restore hers as well. 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.000. Jenny told them to sell it. In arbitration.000. so they generally give up some ground and try to make the offer appear as fair and reasonable as possible. the mediator works with both sides to resolve certain issues but has no authority to make binding decisions. Keep the $1. Lynne responded that this was their intention. In final offer arbitration. Lynne: No. In mediation. Let’s split the money. Jenny: No. Example 1 Jenny and Lynne are sisters. They inform her that they put the machine on e-Bay and have an offer of $1. We have a few dollars invested in parts and we had fun working on it. That was the deal. Both involve the use of third parties who are objective. Jenny has an antique Singer sewing machine. both sides have agreed in writing to accept the arbitrator’s decision. 184 50 Practical Negotiation Tactics . which she has kept in a barn for over ten years.Tactic 49: Final-Offer Arbitration Mediation and arbitration are two well-known ways of resolving sticky disputes. In most arbitrations. But he isn’t allowed to try to find a “middle ground”—just to choose one position or the other. Jenny told Lynne she could take the old Singer that she has no interest in (and doubts that it is worth restoring). Lynne and Gary bring the restored Singer to Jenny’s house. Each party wants their offer chosen.

Example 2 Ralph: Well. As a brief explanation. They should get the other $950. Ralph: Right! (Friday at 3:00 p. so I am invoking the finaloffer arbitration ground rule we have in place. Conclusion Jenny’s final position was that she receive $50—the maximum possible value of an old “junker. but we’ve made no movement on any of them since we started.” Lynne proposed a 50-50 split. first on the health insurance co-pay. Any increase in value was due to the work of Gary and Lynne. The union’s position could have run into millions of dollars. Tina: Yes. since he could only choose one offer. At best. after six weeks of negotiating. on Friday. (One week later) I think Jenny’s position is the most reasonable. Ralph: I know. My troops are getting restless. Tina: Good.m. he did not need to “haggle” with them.m. I have chosen management’s offer to keep it as it is under the current contract. Then we both submit our final offers to Judge Ryan within 48 hours. the old machine was only worth $50 when Lynne hauled it away. Tina. I’ll buy that. Their father found Jenny’s position to be the most reasonable. I can’t see any way to reach an agreement. we are down to only three unresolved items. based Reaching Agreement 185 . binding decision on the three items.) Judge Ryan: Here is my written. and meet back here in 72 hours—3:00 p.Jenny: Dad: Okay.

reasonable resolution to their last three unresolved issues. and an item that large should have been negotiated at the table. money. and peacefully finalize a contract that contained several important gains for both sides.000—less than 1 percent of the total package. I’m sure you realize that we could have taken six more weeks to reach the same point. on the merit pool distribution method issue. 186 50 Practical Negotiation Tactics . Finally. I’m not happy with your decisions. It will only cost $120. Well. on the clothing allowance. At least we both saved time. but we agreed to this process. Conclusion The final-offer arbitration process enabled the parties to gain a fast. Ralph. Second.Ralph: Tina: on last year’s data. I have chosen the union’s final offer. and stress. Now let’s get a signed contract. nor why their method was superior. I have chosen management’s offer because the union did not justify why the past practice should be changed. No increase has been given for six years.

000.000. The goal of recording the precise details is to either avoid any misunderstandings or address them before the talks conclude. Bill and Paulette fell in love with the house. During a discussion. We’d like to make you an offer of $150. They were not the only couple to come to the open house. and felt that they would have to work fast to make an offer before someone else did. Obviously. Seller: We’re asking $152. and one of the other couples looked very interested. and while Bill and Paulette had been using an agent to help locate houses.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. 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. Bill: Bill: Can we talk to you a minute? What’s your asking price? And that includes the appliances in the kitchen? And all of the drapes and blinds? Okay. Bill: Reaching Agreement 187 . They finally looked at a house they really liked. not the furniture. however. we won’t be involving our real estate agent. The owners were selling the house without a real estate agent. Seller: Yes. If we shake hands on it right now. Bill pulled the seller aside. and decided to stop by to see if they liked the house. At the very least. They saw the “For Sale” and “Open House” signs. they looked at this particular house on their own. everyone is busy grappling with the details of the negotiations. seeing the agreement in writing will force both sides to acknowledge what has been said and agreed to in the negotiations. all the usual stuff in a sale. Example 1 Bill and Paulette had been house-hunting for some time.

and that no one would ever say that he was guilty of any type of sexual harassment or sexual discrimination. he left the price at $150. she said that her supervisor had repeatedly asked her out. he began to have “problems” with her job performance. Example 2 Monica brought a sex discrimination charge against her employer. Seller: Okay. Let me just get the standard “offer of sale” form and fill out what I hear you saying. he listed an attached hutch in the kitchen. since he probably would have missed them) Yes. and when she refused. a public agency. all window blinds and drapes. Conclusion The seller had always intended to leave the garbage disposal. Under the section for appliances to be left on the property. In her complaint. and the two area rugs were specifically included. then we have a deal. in fact. The supervisor assured the employer that there was no basis for her complaint. Bill: (pleasantly surprised to learn that the garbage disposal. The employer’s affirmative action officer looked into the charges and determined that 188 50 Practical Negotiation Tactics . look this over. the hutch. but I’d like to make sure there are no misunderstandings. It worked. Sign here. In the section for fixtures and miscellaneous items to be left on the property. and two area rugs. the hutch. I think we can work something out.000.) Seller: So. When he had the chance to put the deal in writing. The supervisor pointed out that he had a staff of 20 or so women.000 and added the additional items to “sweeten the pot” and give Bill and Paulette a deal they couldn’t refuse. he listed the stove. and the garbage disposal.Seller: Just a minute. that’s what I meant. (The seller recorded the offer of $150. If it’s what you meant.000. the house is yours. real. and that the problems with her job performance were. and had been prepared to drop his price to $145. and the two area rugs. the refrigerator.

but it’s not standard when a complaint is formally withdrawn. found a new job and wanted compensation for “embarrassment” and lost wages in the amount of $100.000 without actually having to prove anything.000. Look. and must agree not to tell anyone about the $100. The supervisor insisted that if the employer felt he had to settle. It might be standard when there’s a settlement. Withdrawing. He’s happy to prove that in court. 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. And the confidentiality clause is standard. Why’s that? Well. and expensive matter. He offered to send settlement agreement papers to her. my client is supposed to formally withdraw the complaint rather than just settle it. even though you are paying Monica because we can prove he did do something wrong.000. drawn-out. then Monica had to acknowledge that the supervisor did nothing wrong.there was little basis for the complaint.000.000. by this time. I’m He: She: He: Reaching Agreement 189 . the supervisor says he did nothing wrong and that Monica just misinterpreted what he said. But the employer doesn’t want to go through the expense and publicity of a trial. even though we’re certain we would prevail. You’re just trying to make it seem as if your supervisor did nothing wrong. settling—What difference does it make to her? She’s getting her $100. Monica had. but said that fighting the charges would be a long. you didn’t mention in the agreement that in exchange for the $100. The employer’s lawyer told Monica’s lawyer that the employer was ready to settle the deal for the $100.

000 and the conditions of the offer. 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. 190 50 Practical Negotiation Tactics . It would have been a better strategy in this situation to raise the issue of withdrawing the complaint during the actual negotiations.She: authorized to pay $200. but that’s under the same conditions—the claim must be formally withdrawn and Monica can never reveal the amount of the settlement. It was made clear that the employer had paid the additional $100. but word did get out that a public agency paid $200.000 when all that was asked for was $100. Monica accepted the $200. There was a confidentiality agreement.000 just to get the employee to “withdraw” the complaint.000.000. I’ll take your offer back to her and let you know. to his disadvantage.

however. commitment. As these examples of personal and business negotiations show. but it was not what I meant. One way to help the parties abide by an agreement is to put it into written form. A union contract. and contract. Certainly someone has said to you.” By the same token. but some of the decisions were put off for a couple of months. a written document is hardly necessary. If the agreement reached at the time had been put into writing with all three sisters signing it. “Oh. In Tactic #17 (Package Items). Unfortunately. rather than attack each other. However. it would have been easier to resume negotiations at a later date. Reaching an agreement is the first step. most certainly needs to be in written form. reaching an agreement is sometimes a long and difficult process. When two friends agree on what movie to see. Putting an agreement into writing serves three purposes: communication. “That may be what I said. and when they agree to solve problems together. even an informal agreement benefits from some type of written documentation. the three sisters reached an amiable agreement.SECTION IV: PUTTING THE AGREEMENT IN WRITING s you can see. A Communication Hearing is not necessarily the same as listening. The degree of detail and formality of a written document will. Putting the Agreement in Writing 191 . of course. then the parties have to abide by the agreement. when they engage in honest “give and take” negotiations. depend on the kind of negotiations in which you are involved. I thought you said something else. operating under an agreement after it has been reached can be even more difficult. Think of how often you have said to someone. it is much more effective in the long run when the parties enter into “win-win” agreements. talking is not always the same thing as communicating.” Clear communication is essential if you want to reach an agreement and have it abided by.

Jason agreed to change his study habits if he couldn’t pull his grades up by the end of the semester. If Jason fails to live up to his side of the deal. When communication is limited to the spoken word only. you have created something tangible that can be referred to in the future when memories become fuzzy. When you create a written record of the details of an agreement. The sender wishes to convey an idea. sounds. Negotiations are often necessary because there was a “misunderstanding” that could have been avoided if the parties had put their agreement in writing. Who isn’t excited about buying a brand new SUV or truck? Until. His mom could more easily enforce the agreement if she had it in writing. pictures. 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. or movements. the price is spelled out in the loan document as “twenty-two thousand.Communication is a process that involves a sender and a receiver. or movements being used by the sender. 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. 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. the message being conveyed and received might be understood differently. sounds. The receiver has to decode the message being sent by trying to understand and interpret the words. Commitment Reducing an agreement to writing often forces both sides to truly commit to the agreement. And because the sender and the receiver are two unique individuals. a couple of months away. seek information. 192 50 Practical Negotiation Tactics . that is.” In Tactic #14 (Don’t Always Hide Your Weaknesses). pictures. or express a thought or emotion through words.944. he can be reminded of the details because it’s all there in black and white. the opportunity for the sender and the receiver to misinterpret is greater than if the communication is first spoken and then written. nine hundred and forty-four dollars—$22.

have your spouse also agree to the details of the agreement. or it isn’t an agreement—it’s merely the conveying of a gift. where. WHAT? The written document should clearly describe the item(s) covered by the agreement. protect yourself by having a written. the address and description of the real property. one party will work if the other party pays for the work. say. Generally. when. details such as what fixtures stay or what appliances go can be easily overlooked. pulling an agreement in writing. in writing. Carefully and completely describe the subject matter of the agreement. and how much. your plants die because the house-sitter wasn’t told to water them.Contract Finally. why. 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. the real estate contract includes information about the buyer and seller. dating it. which kind of. and getting all the parties to sign it usually creates an enforceable contract. and dated agreement. one party will change behavior in exchange for something of value from the party who wants the behavior changed. what. Your spouse will share some responsibility for failing to make that duty clear in the agreement if. You can do this more formally by taking them to court (perhaps as a last resort). Both parties must receive a benefit or something they personally consider of value. If you have agreed to pay someone to house-sit while your family is on vacation. WHO? Provide of the full names the parties necessary to the agreement. One party wishes to buy what the other wishes to sell. In either case. When you are ready to commit yourself in writing. before the trip. Failure to do so can lead to big problems. and put that information into the document. signed. Here’s what we mean. how many. Putting the Agreement in Writing 193 . which. ask yourself the basic questions of who. However. and so on in standard contract form. 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. leading to misunderstandings and contract disputes.

which one or which kind of. depending upon the deal: when or where. the better. And it can create a tangible reminder of the deal (or an enforceable agreement. in fact. agreed to the same thing. Putting an agreement in writing.The remaining questions fill in the details of the agreement. dating it. and having all parties sign it ensures that the parties have. 194 50 Practical Negotiation Tactics . The more-specific and clear these details are. how much or how many. if that becomes necessary). It gives the parties an opportunity to really buy into the deal.

Personal Negotiations Negotiation situation: Parties involved: Issue: Tactics that might be helpful. and how they can be used: Exercise Forms Putting the Agreement in Writing 195 .

and how they can be used: 196 50 Practical Negotiation Tactics .Business Negotiations Negotiation situation: Parties involved: Issue: Tactics that might be helpful.

________________ 10. ________________ 3. ________________ Tactic# How will I use this tactic? (Application) _________________ _________________ _________________ _________________ _________________ _________________ _________________ _________________ _________________ _________________ ______ ______ ______ ______ ______ ______ ______ ______ ______ ______ Notes Putting the Agreement in Writing 197 . ________________ 8. ________________ 7. ________________ 4. ________________ 9. ________________ 2.Name of Negotiation Tactic 1. ________________ 6. ________________ 5.

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1991. 2004. Fiske. Gavin. D. Ill. Fisher. Sharpe. W. Kennedy. Roger. Clark. 1987. Inc. References 199 . Fuller. M. M. New Jersey: Prentice-Hall. 1988. New York: Simon and Schuster. 1980.. Upper Saddle River. 2001.E. The Negotiator’s Handbook. Practice. Getting to Yes: Negotiating Agreement Without Giving In. and S.REFERENCES Carrell. Fisher. Calif. Heavrin. Patton. 2nd ed. R. R. Eshelman. McKay. New York: Basil Blackwell. 1991. and M. R. Negotiating in the Real World.: Waveland Press. Inc. and S. Inc. Roger. New York: M. Herb. Oakland. and B. 1988. Patrick J. Gotbaum. J. Brown. Saunders. Getting Together: Building Relationships As We Negotiate.: New Harbinger Publications. Negotiation Skills. Prospect Heights. Minton. LittleJohn. 1989. Los Altos. 2001. 1997. Mediation. Inc. Calif. Victor. Pocket Negotiator. New York: Bantam Books. New York: Penguin Books. Inc. Lewicki. The Essentials of Negotiation. M. Upper Saddle River. and J. George.. 2nd ed. David. Cleary. W. E. New Jersey: Prentice-Hall. C. Irwin. Labor Relations and Collective Bargaining: Cases. The Relaxation and Stress Reduction Workbook. Inc.: Crisp Publications. K. and J. Ury. Cohen. Chicago: Richard D. Maddux. Successful Negotiation: Effective “Win-Win” Strategies and Tactics. 1999. 1996. 7th ed. University of Missouri: Columbia Press. You Can Negotiate Anything. Domenici. and Law. Inc. The Negotiation Handbook. and C. New York: Penguin Books.

negotiationsources. New York: Penguin Putnam. The Mind and Heart of a Negotiator. Heath and Company. Lectures on Negotiation Analysis. 1994. William. www. Stulberg. 1996.E. 2001. Raiffa. Tsogas. Getting Past No: Negotiating with Difficult People. The Art of Negotiating. B. Labor Relations in a Global Economy. Bargaining for Advantage. R. 1987. 1991. New York: Viking Press. New York: Simon and Schuster. Howard. Thompson. Inc. Inc.Nierenberg. Raiffa. Upper Saddle River. Ury. Sharpe. Shell. Massachusetts: PON Books. Massachusetts: D. Howard. Taking Charge/Managing Conflict. New Jersey: PrenticeHall. L.org 200 50 Practical Negotiation Tactics . Inc. Cambridge. Lexington. New York: M. Gerald I. 1998. George. Dudley. Weeks. The Art and Science of Negotiation. Massachusetts: Harvard University Press. The Eight Essential Steps to Conflict Resolution. G. Inc. J. Cambridge. C. 1981. New York: Bantam Books. 1999. 1982.

in Economics from the University of Louisville. Most of his professional career has been spent in the Louisville area and has included positions as a personnel director and labor negotiator. In addition to negotiating numerous litigation settlements and contracts. The University of Nebraska-Omaha. Carrell is Dean of the College of Business at Northern Kentucky University. Human Resource Management. he was elected to the City of Louisville Board of Aldermen for five terms. and MBA and B. These positions enabled him to build a sizable management consulting practice while teaching at the University of Louisville. Marshall University. Labor Law Journal. and negotiations. and served as President of the Board and Mayor Pro-tem for three terms. Bakersfield. The Academy of Management Review. M Christina Heavrin J. Business Forum. In addition.A. and Public Personnel Management. which is located in the greater Cincinnati area. has practiced law for 28 years primarily in the public sector as an attorney for local government in her hometown of Louisville Kentucky. Carrell has held academic positions at California State University. organizational behavior. HR Magazine. 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 .D. Books published by Dr.ABOUT THE AUTHORS ichael R. He received his doctorate from the University of Kentucky. and the University of Louisville. During his academic career he has received awards for both outstanding research and teaching. Carrell are in the fields of collective bargaining and labor relations. He has authored over 50 scholarly works in some of the leading management and human resource journals including The Academy of Management Journal. Personnel. The Personnel Administrator. Morehead State University. Personnel Journal. Dr. The Journal of Accountancy Training. Organizational Behavior and Human Performance.

202 50 Practical Negotiation Tactics . Ms.park and a successful industrial park in the City’s enterprise zone. 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. an agreement between the State of Kentucky. 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. 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. Jefferson County. Recently voters approved the merger of the City of Louisville and Jefferson County Governments. the City and a for-profit hospital for guaranteed indigent health care services for city residents.

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